Customs and Excise Bonds
Ensuring Compliance for Canadian Importers and Exporters
What are Customs and Excise Bonds?
A Customs and Excise Bond is a type of surety bond required by the Canada Border Services Agency (CBSA) or other regulatory bodies. It guarantees that the principal (the importer or exporter) will pay all
duties, taxes, and fees associated with the movement of goods across international borders. In the event of non-compliance, the bond compensates the government for any financial losses.
Benefits of Customs and Excise Bonds
Facilitate Trade
Bid bonds showcase your client's reliability and financial stability, increasing their chances of being awarded contracts.
Compliance with Canadian Regulations
Customs and excise bonds are often mandatory for importers and exporters under Canadian law.
Financial Protection
If duties or taxes go unpaid, the bond provides financial compensation to customs authorities.
Risk Management
Helps mitigate the risks associated with cross-border trade and regulatory compliance.
How Customs and Excise Bonds Work
Application
The client applies for a customs bond through a surety provider.
Underwriting
The surety evaluates the client’s financial standing and history of trade compliance.
Bond Issuance
The bond is issued, typically covering the value of duties and taxes owed to the government.
Compliance
As long as the importer or exporter fulfills their payment obligations, no claims will be made on the bond.
Claims
If taxes or duties are unpaid, the bond compensates customs authorities, and the client is responsible for reimbursing the surety.
Why Brokers Should Offer Customs and Excise Bonds
Comprehensive Service Offering
Enhance your value to clients involved in cross-border trade by providing access to essential bonding solutions.
Streamlined Compliance
Help clients navigate the complex customs process and stay compliant with Canadian regulations.
Streamlined Compliance
Brokers can facilitate smoother international trade for clients by connecting them with reputable surety companies.
Get Expert Support with Customs Bonds
Navigating customs regulations can be complex. Reach out to our team to learn more about how customs and excise bonds can protect your clients and ensure smooth import/export operations.
FAQs about Customs and Excise Bonds
Are customs bonds mandatory for all imports and exports?
While not required for all shipments, many businesses involved in high-volume or high-value trade need
customs bonds to comply with regulations.
What fees are covered by a customs bond?
Customs bonds cover duties, taxes, and any associated penalties or fees related to importing or exporting goods.
How long does it take to obtain a customs bond?
The process can take a few days, depending on the complexity of the trade operations and the client’s
financial background.
Can small businesses apply for customs bonds?
Yes, customs bonds are available to businesses of all sizes, as long as they meet financial and compliance requirements.
What happens if a client fails to pay duties or taxes?
If a client defaults, the customs bond compensates the government, and the client must repay the surety.
