There are a number of duty savings strategies companies can use to conserve cash, lower customs duties and tariffs, and seek refunds. These strategies are always a high priority for businesses involved in international trade, but particularly so in today’s volatile environment. This is another in ST&R’s series of articles examining these strategies in more detail and covers the use of bonded movements and facilities.
Bonded movements. Importers can use three different types of in-bond shipments to defer or avoid duties, taxes, and fees on imported goods. Immediate transportation entries allow imported goods to be moved from the port of entry to another authorized U.S. location before being entered into U.S. commerce or a bonded facility. Immediate export entries cover cargo imported into and exported from the same port. Transportation and/or exportation entries cover cargo that enters at one U.S. port and moves in-bond before being exported at another port. In-bond cargo must be transported by a bonded carrier, which can move goods by ship, truck, rail, plane, or any combination of modes.
In addition, temporary importation bonds allow duty-free treatment for up to three years for a limited range of goods imported with the intent to be exported or destroyed. Goods brought in under a TIB may be repaired, altered, or processed, including processes that result in goods manufactured or produced in the U.S.
Bonded facilities. Imported goods may be stored or manipulated in a bonded warehouse without payment of duty for up to five years. There are currently 11 classes of bonded warehouses, ranging from private facilities designed for storage, to yards or sheds that handle heavy or bulky items, to duty-free stores.
Importers can also use container freight stations (secure areas under U.S. Customs and Border Protection custody) to open cargo containers and rearrange or consolidate their contents prior to making entry and paying duty. These facilities are often used in conjunction with in-bond movements and bonded warehouses.
Each of these tools offers potential benefits and drawbacks depending on the nature of the imported goods and their intended purpose. Cost savings in the form of duty deferral, inventory management, and faster time to market can be substantial.
But complex rules can lead to compliance difficulties, which in turn can result in costly penalties or liquidated damages claims. And CBP works to closely track, control, process, and audit in-bond shipments to mitigate risks to public health, safety, and revenue, making it important for importers to develop and maintain effective compliance plans.
ST&R’s experienced professionals can show you how each of these programs might benefit your business, assess your expected return on investment, and assist with applications, implementation, and operations.
For more information, please contact ST&R.
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