Continuous Bond

What Is a Continuous Bond?

A continuous bond is a financial guarantee commonly utilized in international trade that reestablishes consequently until it is canceled. Continuous bonds don't terminate as long as the client makes the required payment for every renewal.

This can be diverged from traditional (term) bonds that feature an expiration or maturity date.

How Continuous Bonds Work

Continuous bonds are utilized as customs bonds, airport security bonds, importer security filing bonds, and intellectual property rights bonds.

A continuous bond can be utilized for an annual period and covers the continuous shipment of imports soon. There are three gatherings associated with this bond — the surety company that issues the bond, the principal (importer) who is required to file the bond, and the CBP.

The continuous bond is consequently recharged consistently on the off chance that it isn't canceled except if it is terminated by one of the three gatherings included. This bond is an option for importers who carry goods into the U.S. on a successive or standard basis. Moreover, the bond can be involved by numerous customs brokers in cases in which an importer involves different trade brokers in various U.S. markets.

Something contrary to a continuous bond is a term bond, single entry bond, or single transaction bond. A single transaction bond covers just a single import shipment. This bond covers just the entry or transaction for which it was written and it is filed at the specific port where the entry will be made. A bond that isn't continuous might be reestablished utilizing a continuation certificate.

Instances of Continuous Bonds

In the United States, quite a few insurance or surety companies might sell continuous bonds under normalized terms laid out by the government. The Revenue Division of the U.S. CBP agency supports continuous bond entries. Data stated on the bond and rider (if applicable) ought to incorporate the bond amount, principal name, importer name, importer number, and CBP-appointed number. The bond can be utilized at any port of entry.

The $50,000 continuous import bond is the most common in the U.S. also, expects as long as 10 days to be put in place. The continuous import bond is a type of customs bond — a bond that guarantees the U.S. Customs and Border Protection (CBP) that the importer will follow through with its payment.

In the event that the importer neglects to make its payments, the CBP can file a claim against the bond from the surety company that guaranteed payment. As a rule, the amount of the bond must be no less than 10% of the total duties and taxes paid to CBP annually at least $50,000. This means that the duties, taxes, fines, and punishments that the surety company will cover inside every one-year bond term is $50,000.

Features

• Continuous bonds are much of the time found in international trade and commerce, covering progressing shipments received at ports of entry.
• Continuous bonds are financial agreements with legally binding terms that reestablish consequently for an unknown period of time.
• The $50,000 continuous import bond is the most common example found in the United States, which expects as long as 10 days to be put in place.