A continuous customs bond is a standing financial guarantee filed with U.S. Customs and Border Protection that covers the duties, taxes, fees, and compliance obligations on every shipment you import over an ongoing period. The minimum bond amount is $50,000, and most importers pay a small annual premium rather than tying up that much cash. If you bring goods into the United States more than a few times a year, a continuous bond is what keeps your cargo clearing the port without a separate guarantee attached to each entry.
How the Bond Works
A continuous bond creates a three-party arrangement. You, the importer of record, are the principal, legally responsible for paying duties, taxes, and fees and for following every CBP regulation that applies to your shipments.1U.S. Customs and Border Protection. Tips for New Importers and Exporters The surety is a U.S.-incorporated insurance company that guarantees CBP you will meet those obligations.2U.S. Customs and Border Protection (CBP). Importing into the United States A Guide for Commercial Importers CBP is the obligee, holding the bond as its financial backstop.
What the bond actually guarantees goes well beyond paying tariffs. It covers filing accurate entry documentation, producing supporting records on request, marking merchandise correctly with its country of origin, and redelivering goods to CBP custody if something about a shipment turns out not to comply with U.S. law.3eCFR. 19 CFR Part 113 Subpart G – CBP Bond Conditions It also has to be sufficient to cover additional duties on merchandise subject to Section 301 tariffs.4U.S. Customs and Border Protection. Section 301 Trade Remedies Frequently Asked Questions For ocean shipments, the continuous bond typically covers your Importer Security Filing obligations as well, so you don’t need a separate ISF bond.
Once in place, the bond stays active indefinitely until either you or the surety cancels it. That open-ended coverage is the whole point: every entry you file is already backed, with no port-level bonding paperwork for individual shipments.
Do You Need a Continuous Bond or a Single Transaction Bond?
The alternative is a single transaction bond, which covers exactly one entry and then expires. STBs are priced on the value of the shipment, so a one-off import can be bonded cheaply. The costs add up fast if you import regularly, though. You pay a new fee and generate new paperwork for every entry.
A continuous bond covers unlimited entries for a flat annual premium. Most importers who ship more than two or three times a year find it cheaper and much simpler, and it’s the standard setup for any business importing with any regularity.
How the Required Amount Is Calculated
The baseline is simple: your continuous bond must equal at least 10 percent of the total duties, taxes, and fees you paid during the previous 12 months.5U.S. Customs and Border Protection. Bonds – Types of Bonds Below that calculation sits a hard floor: no Activity Code 1 continuous bond can be less than $50,000, no matter what the math produces.6U.S. Customs and Border Protection. Monetary Guidelines for Setting Bond Amounts So if you paid $300,000 in duties last year, 10 percent is $30,000, but your bond still has to be $50,000.
If you’re new and don’t have a 12-month track record, you estimate projected duties, taxes, and fees for the coming year based on anticipated volumes, commodity types, and the applicable rates under the Harmonized Tariff Schedule.7eCFR. 19 CFR Part 113 – CBP Bonds The surety reviews those projections during underwriting, and CBP requires certification that the numbers are based on the best information available.8U.S. Customs and Border Protection. General Guidelines for Completing the CBP Form 301 for Continuous Bonds
Sureties sometimes insist on a bond amount higher than the CBP minimum based on their own risk assessment. Thin financials, a history of late duty payments, or high-risk commodities will push the number up.
What It Costs and How to Get One
Most importers secure the bond through a licensed customs broker, who connects you with a surety and handles the paperwork. You can also deal with a surety directly. Either way, you’ll need a completed bond application, your Importer ID number (usually your IRS Employer Identification Number with a two-digit CBP suffix), and information on your estimated or historical duties and fees.8U.S. Customs and Border Protection. General Guidelines for Completing the CBP Form 301 for Continuous Bonds
The surety underwrites based on your financial stability, import history, and risk profile. Once approved, you pay a non-refundable annual premium, typically between 0.5 and 2 percent of the bond amount, though higher-risk importers pay more. On a $50,000 bond, that works out to roughly $250 to $1,000 a year for most importers. Brokers may add an administrative fee on top.
After payment, the surety issues CBP Form 301, the actual bond document. It’s submitted electronically and registered in CBP’s Automated Commercial Environment. Once CBP accepts the filing, you can start making entries against it.
One wrinkle for foreign companies: the surety on any CBP bond must be incorporated in the United States, and if someone other than a corporate officer signs the bond on behalf of the company, a power of attorney has to be attached.7eCFR. 19 CFR Part 113 – CBP Bonds Non-resident importers typically route this through a U.S. broker.
Keeping the Bond Adequate
Your bond amount isn’t locked in forever. CBP periodically reviews every bond on file to confirm it still protects revenue. The agency weighs factors like your payment history, the value and nature of your merchandise, any prior liquidated damages, and how much supervision your entries require.9eCFR. 19 CFR 113.13 – Amount of Bond
If CBP decides your bond is insufficient, you and your surety get written notice and 15 days to fix it, usually by filing an amended bond at a higher amount.9eCFR. 19 CFR 113.13 – Amount of Bond When CBP thinks the revenue is at immediate risk, it can skip the 15-day window and require additional security — cash deposits or single transaction bonds — on every entry until you remedy the deficiency. Ignoring an insufficiency demand effectively freezes your import operations.
Anti-Dumping and Countervailing Duties
If your goods are subject to anti-dumping or countervailing duties, the bond math changes. CBP can designate the merchandise as a special category and require coverage well beyond the 10 percent formula.
The additional amount is the AD/CVD rate from the Department of Commerce order (or the most recent administrative review) multiplied by the total value of subject merchandise imported over the preceding 12 months. Import $1 million of covered goods at a 40 percent rate and your bond needs another $400,000 on top of the baseline.10Federal Register. Monetary Guidelines for Setting Bond Amounts for Importations Subject to Enhanced Bonding Requirements New importers of AD/CVD merchandise use the deposit rate in effect on the date of entry multiplied by their estimated annual import value.
These enhanced requirements catch importers off guard more than almost anything else. Commerce rates change after administrative reviews, and a rate increase can make your bond suddenly insufficient. If you import anywhere near an AD/CVD order, monitoring Commerce proceedings on your product categories isn’t optional.
What Happens If You Default
When you default on a bond obligation — late duty payment, ignored redelivery demand, violated marking rules — CBP assesses liquidated damages. The amount depends on the type of default. For most merchandise violations, damages equal the value of the goods, or three times the value if the goods are restricted, prohibited, or alcoholic beverages.3eCFR. 19 CFR Part 113 Subpart G – CBP Bond Conditions For defaults that don’t involve specific merchandise, damages are $1,000 per violation.
A distinction that trips people up: the bond is considered exhausted only when the surety (or the principal, to the surety’s credit) actually pays out the full bond amount in liquidated damages. If you pay duties or penalties directly out of your own funds, the bond is not reduced. That matters because an exhausted bond means no new transactions can be charged against it, and you’ll need replacement security immediately to keep importing.
One of the most common sources of liquidated damages is the Importer Security Filing. CBP requires the ISF to be submitted at least 24 hours before cargo is loaded onto a vessel bound for the United States. An inaccurate, incomplete, or late filing can trigger $5,000 in liquidated damages per violation.11U.S. Customs and Border Protection. Import Security Filing (ISF) – When to Submit to CBP These charges hit your continuous bond, and multiple late filings on a single sailing compound quickly.
Terminating or Replacing the Bond
When you want to stop importing or switch sureties, the timeline depends on who initiates it. If you request cancellation, termination takes effect as soon as 10 business days after CBP receives your written request.7eCFR. 19 CFR Part 113 – CBP Bonds If the surety initiates it, the surety must give at least 30 days’ notice to both CBP and the principal. Once terminated, no new customs transactions can be charged against the bond, and a replacement must be in place before any further entries.
Termination doesn’t erase obligations that accrued while the bond was active. Unpaid duties and unresolved redelivery demands from the bond period survive cancellation, and CBP can still pursue claims against both you and the surety for them.