Ever since the new 25% tariffs on China have gone into effect, many importers are receiving notices from their bonding company or from Customs directly that say the importer's current Continuous Bond amount is no longer sufficient, and it must be raised (rather quickly) to a new, higher minimum amount. Please do not ignore these notices!
If a new bond is not in place by the deadline listed on the notice, Customs will cancel the current bond, and will require single entry bonds (SEB) for each shipment until the new bond is in place. These SEB's are quite expensive, when compared to their continuous bond counterparts that cover all shipments by the importer for a year.
The new limit required by the notice is calculated using a trailing 12 month total. Unfortunately, this does not take into account what the importer is still importing, or plans to import in the future, so if the importer continues to import at their current rate, they could well get another notice in a month or two requiring yet another increase in their bond.
Unfortunately, there are no refunds on bond premiums available, so if you get a new $60,000 bond today, and then get another notice in a month that you now need a $70,000 bond (or higher), you will not get a refund for the premium on the previous bond. Therefore, it is highly recommended that you do your own calculation (or ask Averitt for assistance). The formula is rather simple. Add whatever amount of duties, taxes, and fees (DTF) you expect to pay in the next 12 months, and then divide by 10.
Whatever number you come up with is the minimum bond level you will need. Bonds increase in increments of $10,000 until they reach $100,000 when they rise in $100,000 increments. The premiums are roughly $10/$1000 of bond level. So, a $60K bond would carry a $600/yr premium.
Continuous Bonds and Single Entry Bonds are essentially policies required by Customs that cover either all entries or single entries, respectively, by the importer. The bond insures Customs that the duties will be paid, and that any future duties possibly levied by Customs will also be paid, even if the importer has gone out of business in the meantime. The calculations and the letters from Customs happen automatically through their systems, so there is no way that something will slip through the cracks, or that only large importers will get hit. EVERY importer is reviewed every month, and many letters are being sent out.
Again, if you get a notice from either the bonding company or from Customs about raising your bond, please take action immediately. Also, please try to ascertain the proper bond level, regardless of what Customs's letter requires today. To not do so could very well end up costing a good bit in wasted premium payments.
If you have any questions, do not hesitate to contact our team at firstname.lastname@example.org. If you would like to learn more about Averitt's International Solutions, our team is always available to help. Visit the Averitt International Website for more information.