Area of Law: Insurance Law
Answer # 2794
Customs and Excise BondsRegion: Ontario Answer # 2794
What are Customs Bonds?
A Customs Bond is required by the Government of Canada and guarantees that an importer or exporter comply with the federal Customs Act by paying customs duties and taxes on products being sent between a foreign country and Canada.
In a Customs Bond, the surety guarantees to the obligee (the Government of Canada) that the principal (the importer) will comply with the federal Act. If the importer fails to fulfill their financial obligation to the Canadian government, the surety is required to pay the amount owed to the government on behalf of the importer.
A Customs Bond allows for the immediate release of imported goods prior to the financial determination and payment of legally required duties, taxes and applicable tariffs from Customs.
What are Excise Bonds?
An Excise Bond is required by federal and provincial governments and guarantees payment of excise taxes and compliance with the federal Excise Tax Act, as well as provincial tax acts and regulations. An Excise Bond allows businesses to use or ship goods prior to the payment of applicable excise taxes.
Who requires Customs and Excise Bonds?
The Government of Canada requires the following types of individuals and businesses hold Customs Bonds, Excise Bonds, or both:
- custom brokers,
- transportation companies,
- logistic companies,
- and others
Types of Customs and Excise Bonds
Common types of Customs Bonds include:
- Bonded Carriers (highway, air, freight)
- Customs Bonded Warehouse Bonds
- Customs Brokers License Bonds
- Duty Free Shops Bonds
- Release of Goods Bonds
- Temporary Importation of Articles Bonds
Common types of Excise Bonds include:
- General Excise Bonds
- Fuel Tax Bonds
- Sales Tax Bonds
- Tobacco Bonds
Customs and Excise Bonds fall into one of two categories:
- Single Transaction Bonds cover a single import transaction at one port of entry.
- Continuous Bonds cover all entries made by an importer at all U.S. ports of entry and are good for one complete year.
For more information about Customs and Excise Bonds, or to purchase a bond, contact Ai Surety Bonding.
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