Clearit.ca's Blog on Customs Brokerage and News Updates
One of the most asked about topics this month from our “ask your broker” section has been customs bonds. The following is a short overview as to what a customs bond is and how it can help you.
A customs bond is similar to an insurance policy in that it guarantees payment of duties and fees on goods brought into Canada; it may also grantee the customs broker‘s performance, knowledge and expertise in customs clearance and ensures that regulations governing clearance of goods will be adhered to. A bond is issued by a surety company, and insures that the importer will abide by all laws and regulations concerning importation. The surety company agrees to pay any liability that might arise from an importer’s failure to perform any of his/her obligations and there are a number of customs bonds available, depending on your needs.
Customs bonds provide principals with the opportunity for immediate release of their imported goods from customs prior to financial determination and payment of required tariffs, duties and taxes. Customs bonds also enable transportation companies to move goods in Canada in a quick and efficient manner.
You are able to purchase a bond directly through your insurance company or through any customs brokerage firm, although an administration fee usually applies. More often then not, importers require assistance with the bond application process. In order to determine the size of the customs bond required, your customs broker will review the commodities being imported and come up with a rough estimate of how much duty is expected to be paid over one year. Your broker will then ask you to place one or two month’s worth in bond.
An alternative to a Customs bond is a refundable cash deposit to the Receiver General of Canada of no less than $250.00 for one port and no less than $5000.00 to cover all ports.
Examples of customs Bonds:
- Customs bonded warehouse bond
- Bonded carriers (highway, air, freight)
- Customs sufferance – warehouse bond
- Temporary Importation of Articles Bond
- Release of Goods Bond
- Duty-Free Shop Bond
- Customs Bonded Warehouse Bond
For more information on customs bonds, please feel free to: