When you become part of international trade, there are a number of things that one needs to take into consideration, and one most important among them is the need to have bonds. Or they are popularly known as custom bonds. These are the bonds that make your international trade easier. The purpose of the custom bonds is to make the financial trade convenient for all those parties that are part of the international trade.
Therefore, if you think that importing goods, pets, automobiles, and other essentials could be a risky thing to do, one of the important financial security that you have is to have custom bonds. The main aim of custom bonds is to ensure that the whole trade, fees, duties and other trade taxes are paid before the process is completed, and all the parties that are involved in the trade are able to get the benefit of the customs bond.
However, there are two main types of customs bonds that are part of the trading extravaganza. Therefore, you need to learn about them both to know what suits your trading and importing business.
The main types of bonds are custom continuous bonds and single entry bonds. The continuous bonds are the ones which you renew annually, and the trade could be made possible from any entry port. On the other hand, the single entry bonds are those which enable the transaction to take place for one time only and that the imports are only filed for specified ports.
Thus, when you are choosing any specific bonds for your business, make sure that you know the pros and cons of both and why you should choose one over the other.
What are the continuous custom bonds?
Before you choose one kind of bond over the other, you need to know the benefits of having continuous bonds by your side.
Continuous bonds are bonds which can be renewed indefinitely. And therefore, you don’t need to worry about the whole process of renewal after every short period. Once you have made the purchase of the custom continuous bond, all you need to do is make the payment for the whole year, and the bond remains valid for one whole year from the date of purchase.
Most of the traders and importers, whether they are new to the business or have an old association, like to go for continuous bonds because they have an auto-renewal system, and the traders don’t have to plunge themselves into the daunting task of buying the bonds after every shipment arrives.
Another important aspect that one has of the custom continuous bonds is that they could be easily usable by multiple brokers. If there are multiple transactions that are required to be made each year, then custom continuous bonds are the best bonds that could be bought for your trading in the U.S.
What is a single entry bond:
Another type of bond that is considered to be the best one in the business is the single entry bond. These are the bonds which are made for the purchase of a single transaction when the shipment is imported. Moreover, with the single entry bonds, all you are required to do is to make sure that payment and dues are cleared for pre-specified ports.
The key aspects of single entry bonds are that they can be used for a single entry; however, if there are multiple containers that are shipped at the same time and same date, then single entry bonds could be used for the purchase of multiple containers.
After the payment and clearance of the dues with regard to the single entry bonds are being made, the bond expires and can’t be reused for a specific purpose.
The difference between the single entry bonds and the continuous bonds:
One of the main reasons people mark the single entry bonds as the most effective ones is because they are only required for a single transaction, and if you don’t hope to get another shipment throughout the year, you will not be required to pay for the annual fees year after year.
However, the selection of the single entry bonds and the continuous bonds depends upon the number of imports that you are expecting each year at your ports.
The continuous bonds are effective within ten days of purchase, and therefore, if you are required to pay the dues and clearance charges, all could be made in the shortest period of time.
On the other hand, the single entry bond might be three times higher than the value of your shipment valid for the single transaction.
The choice to go for the single entry or the continuous bonds remains subjective to the nature of the business that you have and how often you are expecting a shipment over the year.