What is a Customs Bonded Warehouse?

A bonded warehouse is an area of a warehouse that U.S. Customs controls. In this warehouse, imported goods can be stored without having to pay duties or fees for up to 5 years. Duties are only collected when the products are actually shipped, reducing the overall waiting time. Title 19 of the United States Code Section 1555 backs the legal obligations of a bonded warehouse.

Anyone who is interested in opening and running a bonded warehouse must be bonded first. The Port of Directors decides the bond amount based on the reason for the bond. Each building or area of coverage must be covered with at least a $25,000 bond amount. A bond is required since the warehouse operator is legally responsible for all goods stored in the warehouse.

The class and warehouse type are factors to decide on before getting a bond. There are 11 different classes depending on the specific type of merchandise:

  1. Merchandise is under investigation by CBP
  2. Private merchandise
  3. Public merchandise
  4. Bonded yards or sheds for storage of heavy/bulky items
  5. Bonded pins, parts of building, elevator for storage of grain
  6. Items subject to internal revenue tax
  7. Smelting and refining imported metal-bearing materials
  8. Cleaning, sorting, repacking materials
  9. “Duty free stores”
  10. International travel merchandise
  11. Storage of General Order (G.O) goods

Steps to achieve a bonded warehouse:

  1. Get a certificate signed by the president or secretary of a board of fire underwriters
  2. Collect the warehouse blueprint to show the local CBP port director
  3. Submit a written application to the local CBP port director
  4. Explain any extra supporting information about the warehouse to the port director
  5. Show proof of customs bond CBP Form 301

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