Customs and Excise Bonds
What are Customs Bonds?
Customs Bonds are required by the federal government to guarantee payment of various duties, tariffs and taxes. The most commonly used customs bonds are:
- Release of Goods Bond
- Non-Resident GST Bond
- Customs Brokers License Bond
- Customs Bonded Warehouse Bond
What are Excise Bonds?
Excise Bonds are required by federal and provincial governments to guarantee payment of excise taxes. These include:
- Fuel Tax Bond
- Tobacco Bond
- General Excise Bond
What do these Bonds Do?
Depending on the type, customs and excise bonds allow for the immediate release of imported or exported goods prior to the financial determination and payment of legally required duties, taxes and applicable tariffs from customs.
Customs bonds enable transportation companies to move their respective goods through Canada and the US in a quick and efficient manner.
What types of businesses generally require Customs and Excise Bonds?
- Customs Brokers
- Importers/Exporters
- Wholesalers
- Manufacturers
- Freight Forwarders, Logistic & Transportation Companies
When are Customs and Excise Bonds required?
You may need a Canada Customs bond if you or your business needs to provide financial security to the Canada Border Service Agency (CBSA) or Canada Revenue Agency (CRA) before you import, export or move commercial goods through Canada. This bond ensures that you meet the requirements of the act or regulation governing the customs activity you are carrying out.
If you are importing merchandise from the U.S. for commercial purposes that are valued over $2,500, or a commodity subject to other federal agencies requirements (i.e. firearms or food), you must post a Customs bond to ensure that all duties, taxes and fees owed to the federal government will be paid.
What is a Continuous Customs Bond?
A continuous customs bond covers a percentage of the duties, taxes and fees paid during a 12 month period. The continuous bond will cover you for all of your cross border activities throughout the year and is based on the volume of cross border business you maintain. The percentage and amount of the bond required is determined by the government and will allow you to determine the size of bond you will need.
What do I need to obtain a Customs and Excise Bond?
The process is fairly simple to obtain a bond. Bonds under $25,000 in value generally only require a completed customs bond application. For bonds in excess of $25,000, the following is a list of the documents that a bond company will require:
- Customs Bond Application
- Current Corporate Financial Statements
- Bank Reference Letter if applicable