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 instead of posting that in cash you pay a surety company an annual premium that’s a small percentage of the bond’s face value. Once it’s on file with CBP, every entry you make is covered, with no per-shipment bonding paperwork at the port.
How the Bond Works
A continuous bond is a three-party agreement. 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’ll 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.
The bond stays active indefinitely until either you or your surety formally cancels it. That open-ended coverage is the point: once it’s in place, every shipment moves through customs without additional bonding steps.
What the Bond Actually Covers
The bond’s scope goes well beyond paying tariffs. It guarantees that you’ll file accurate entry documentation, produce supporting records when asked, mark merchandise properly with its country of origin, and redeliver goods to CBP custody on demand if something about the shipment doesn’t comply with U.S. law.3eCFR. 19 CFR Part 113 Subpart G – CBP Bond Conditions
It also has to cover Section 301 tariffs on affected merchandise, meaning your bond amount must be sufficient to absorb those additional duties.4U.S. Customs and Border Protection. Section 301 Trade Remedies Frequently Asked Questions For ocean shipments, the continuous bond covers your Importer Security Filing obligations, so in most cases you don’t need a separate ISF bond.
When You Need One Instead of a Single Transaction Bond
The alternative is a single transaction bond, which covers exactly one entry and then expires. STBs are priced against the value of that individual shipment, so a small one-time import can be bonded cheaply. But the costs compound quickly, and you’re generating separate paperwork for every entry.
A continuous bond, by contrast, covers unlimited entries for a flat annual premium. Most importers who ship more than two or three times a year find the continuous bond cheaper and simpler. It’s the standard setup for any business that imports with any regularity.
How the Bond Amount Is Calculated
The baseline formula is straightforward. Your continuous bond amount must equal at least 10 percent of the total duties, taxes, and fees you paid over the previous 12 months.5U.S. Customs and Border Protection. Bonds – Types of Bonds CBP enforces a hard floor: no Activity Code 1 continuous bond can be less than $50,000, whatever the 10 percent 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 works out to $30,000, but your bond still has to be at least $50,000.
New importers without a 12-month track record estimate projected duties, taxes, and fees for the coming year based on anticipated volumes, commodity types, and applicable rates under the Harmonized Tariff Schedule.7eCFR. 19 CFR Part 113 – CBP Bonds Your surety reviews those projections during underwriting, and CBP requires certification that the estimates 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 require a bond higher than the CBP minimum based on their own risk assessment. Thin financials, a history of late duty payments, or high-risk goods can all push the required amount up.
Cost and How to Get One
Most importers secure a bond through a licensed customs broker, who connects you with a surety and handles the paperwork. You can also go directly to a surety. Either way, you provide a completed bond application, your Importer ID number (usually your IRS Employer Identification Number with a two-digit CBP suffix), and information about 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 an annual premium, a non-refundable fee that typically runs between 0.5 and 2 percent of the bond amount, though higher-risk importers may pay more. On a $50,000 bond, that puts the annual cost roughly in the $250 to $1,000 range for most importers. Brokers may charge an administrative fee on top of the premium.
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’re authorized to make entries against the bond.
Anti-Dumping and Countervailing Duty Merchandise
If you import goods subject to anti-dumping or countervailing duties, your bond situation gets more complicated. CBP can designate these goods as “special category merchandise” and require an increase to your continuous bond well beyond the standard 10 percent formula.
The additional coverage is calculated by multiplying the AD/CVD rate from the Commerce Department order (or the most recent administrative review) by the total value of subject merchandise imported over the preceding 12 months. If you imported $1 million of covered goods and the Commerce rate is 40 percent, your bond would need an additional $400,000 in coverage on top of your baseline.9Federal 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.
AD/CVD rates can change after administrative reviews. A rate increase means your bond may suddenly be insufficient, so monitoring Commerce Department proceedings on your product categories isn’t optional if you import anywhere near an AD/CVD order.
Bond Sufficiency Reviews
Your bond amount isn’t locked in. CBP periodically reviews every bond on file to confirm it’s still adequate. The agency weighs your payment history, the value and nature of your merchandise, any prior liquidated damages, and how much supervision your entries require.10eCFR. 19 CFR 113.13 – Amount of Bond
If CBP determines the bond is insufficient, you and your surety get written notice and 15 days to fix it, typically by filing an amended bond at a higher amount.10eCFR. 19 CFR 113.13 – Amount of Bond In urgent cases where CBP believes 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. Failing to increase the bond when demanded effectively freezes your import operations.
Defaults, Liquidated Damages, and ISF Penalties
When you default on a bond obligation, whether that’s failing to pay duties on time, ignoring a redelivery demand, or violating marking requirements, CBP assesses liquidated damages against the bond. The amount depends on the type of default. For most violations involving merchandise, 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 not tied to specific merchandise, damages are $1,000 per violation.
One distinction trips people up: a bond is considered exhausted only when the surety (or the principal paying to the surety’s credit) has actually paid out the full bond amount as liquidated damages. If you pay duties or penalties directly out of your own funds, the bond is not reduced or exhausted. That matters because an exhausted bond means no new transactions can be charged against it, and you need replacement security immediately to keep importing.
The most common source 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 U.S.-bound vessel. 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 penalties are charged against your continuous bond, or against a standalone Activity Code 16 ISF bond if you have one. Multiple late filings on a single sailing can compound fast.
Terminating the Bond
When you want to stop importing or switch sureties, the timeline depends on who initiates cancellation. If you (the principal) request it, 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 a bond terminates, no new customs transactions can be charged against it, and a replacement bond has to be in place before you make further entries.
Termination doesn’t erase obligations that accrued while the bond was active. Unpaid duties or unresolved redelivery demands from the bond period survive cancellation, and CBP can still pursue claims against both you and the surety.