The CBSA (Canada Border Services Agency) requires customs brokers, importers and businesses temporarily removing goods from Canada to post bonds with them to guarantee payment of duties and taxes. In addition, the CBSA requires that certain businesses operating in segments of the import/export business to post license bonds in Canada guaranteeing they perform the duties of those specific licenses.
CBSA recently established CARM to look into modernizing the collection of duties and taxes for goods imported into Canada. As part of this process they are looking to move to a model more similar to that used in the United States. Currently, customs brokers can lodge a bond with the CBSA to cover payment of duties and taxes for their importers. Once CARM is finalized, each individual importer into Canada will require its own bond.
This is a significant shift for how business is being done and customs brokers are looking at ways to make this process easy for their importer clients.
If you are looking for a solution for your importer clients ahead of the CARM implementation, please reach out to FCA. Together, with our commercial surety partners we have access to a number of solutions including digital solutions that allow the customs broker or importer to apply for these bonds, pay by credit card and renew these bonds all on an online platform. Depending on how many importers you work with, these online solutions can be customized and branded to meet the specific workflows of your business.
Customs brokers that obtain the release of their goods prior to payment of duties require a release of goods prior to payment of duties (Customs Brokers) Bond.
Importers into Canada that require a release of their goods prior to payment of taxes and are not currently under a customs broker bond require their own release of goods prior to payment of duties (Importer) bond.
Licensed customs brokers operating in Canada require a Customs Broker License and Permit Bond.
Non-resident persons and businesses registered for a Canadian Goods and Services Tax/Harmonized Sales Tax (GST/HST) account require a Non-Resident GST/HST Bond.
Customs brokers that import goods to Canada on a temporary basis duty-free under the Temporary Importation (Tariff Item No. 9993.00.00) Regulations require a Temporary Importation of Goods (Customs Broker) Bond
Importers other than customs brokers that import goods to Canada on a temporary basis duty-free under the Temporary Importation (Tariff Item No. 9993.00.00) Regulations require a Temporary Importation of Goods (Importer Direct) Bond.
Bonded air carriers can apply to the Customs Self Assessment (CSA) program, whereas non-bonded air carriers cannot.
Customs bonded warehouse operators participating in the Canadian Customs Bonded Warehouse Program require a Customs Bonded Warehouse Bond.
Licensed customs sufferance warehouse operators in Canada require a Customs Sufferance Warehouse Bond.
A Carnet Bond is required when goods are exported to a foreign country with an ATA Carnet for later re-exporting back to Canada. This can be purchased for a single trip of a blanket for all exports within one year.
Bonded freight forwarders can transport in-bond goods between points in Canada (including between sufferance warehouses), whereas non-bonded freight forwarders cannot.
Almost any business can require a customs bond. Customs brokers, importers operating in a variety of industries who are bringing goods into Canada or an orchestra who is taking equipment out of Canada temporarily for a show in a foreign country. Each of these businesses require a bond. The common theme is each operation is moving goods either in or out of Canada.
Rates for customs bonds can vary widely depending on the type of bond required. License bonds can go as low as $375 for small bonds. Larger release of goods bonds can go anywhere from 0.5% to 1.5% of the bond value.
For small customs bonds, the surety is typically doing a very simple application process and no financials are required. Once bonds reach values between $50,000 – $100,000, surety companies will start to request financial statements as part of their underwriting process.
As noted, for small customs bonds these can typically be done online and require basic information about the applicant including:
These bonds can typically be secured same day. For larger bonds, they will look at the above items and will also do a more in-depth review of an applicant’s financial statements to ensure creditworthiness. They will also sometimes ask for copies of the statement of account to confirm the payment of duties and taxes are current.
Your FCA Advisor can quickly walk you through the process and will explain any requirements for your specific business need.
We set the industry standard for turnaround time for both new and existing construction bond clients, you can expect excellence.
Outstanding relationships with all of the most reputable construction surety bond markets in the industry, giving you the power of choice.
Our industry-leading team boasts seven full time dedicated surety professionals with a combined 80+ years of construction surety bond experience.
Chris Dardarian and FCA were great to work with! They provided timely and comprehensive advice and a product that suited our needs. Our situation was complicated by COVID but the transaction was handled efficiently.
FCA is one of the best companies we have had the pleasure of working with so far. Very professional, fast and timely. Looking forward to continue working with them.
Jamie Collum from FCA did a great job in assisting me throughout the process. Not only from bonding aspect but other aspects to relating to obtaining approvals and insurance Would definitely and highly recommend them.
It all starts with a conversation today with one of our surety bonding experts. Once we determine which type of surety bonds you require, we will work tirelessly to expedite these bonds for you.