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ICAT Blog: Article Continuous Bond Sufficiency: What it Means for Importers

April 30, 2025

WHAT IS HAPPENING?

When a shipment containing merchandise with a value of more than $2,500 is imported into the U.S. for commercial purposes, an importer must post a customs bond as a guarantee to the government that all duties, taxes, and fees will be paid to the federal government by the importer. This bond can take the form of a single transaction bond (for occasional imports) or a continuous bond (covering all transactions for a 12-month period).

Customs and Border Protection (CBP) is seeing a sharp upswing in the number of importers whose continuous bonds are being flagged as insufficient. What used to be a relatively rare issue (affecting only around 50 to 60 importers per month in mid-2018) has grown significantly in recent years. As of last year, over 4,700 importers were identified as having bond sufficiency issues. This spike indicates an increasing compliance risk for companies that import goods into the U.S. regularly.

WHY IS IT HAPPENING?

The rise in these insufficiency cases is largely due to the higher duties imposed through recent trade wars and tariff rules. As import costs continue to rise, so does the demand on continuous bonds, which must cover at least 10% of an importer’s total duties paid over the previous 12 months. If an importer’s activity increases without a corresponding bond adjustment, the bond can quickly become insufficient.

CBP is also ramping up its enforcement efforts, utilizing monthly information to flag importers and more actively monitoring for non-compliance.

WHAT DOES IT MEAN FOR YOU?

First, how do you know if you need a continuous bond?

  • A single-entry bond can be used for one transaction or for occasional imports.
  • A continuous bond is much more cost-effective for those entities that import regularly or import high-value merchandise.

Customs can deem a customs bond insufficient if the importer:

  • Pays more in duty, taxes, and fees than the current bond is written to cover,
  • Provides invalid or “non-deliverable” addresses for any entity using the bond,
  • Fails to comply with Customs requests for information or demand for cargo redelivery, or
  • Has any outstanding debt owed to CBP.

If Customs renders a bond insufficient, the importer has 15 days to have a new bond in place.

For importers, this trend highlights the importance of proactively managing bond coverage. CBP is not required to notify companies before labeling a bond as insufficient, which could result in shipment delays or being forced to use costly Single Transaction Bonds (STBs) while resolving the issue.

To stay ahead, Importers should regularly review their bond’s activity to ensure the amount is still suitable and increase the bond amounts when necessary. Importers must promptly address claims issues and ensure Customs has a proper address and updated contact information.

If you have any questions or concerns, please reach out to your ICAT representative and we will be happy to provide further insight.