What a Customs Bond Actually Does
A customs bond is a financial guarantee between three parties: you (the importer), a surety company, and U.S. Customs and Border Protection (CBP). It promises that if you fail to pay duties, taxes, or penalties — or fail to comply with federal import regulations — the surety will cover CBP's losses, up to the bond's face value.
Without a valid bond on file, your shipment doesn't move. Full stop.
Bonds are required under 19 CFR Part 113 for all formal entries — that means any commercial shipment valued over $2,500. Below that threshold, informal entries don't require a bond, but the $2,500 line is easier to cross than most new importers expect once you factor in freight, insurance, and declared value.
The bond doesn't protect you. It protects the government. That distinction matters when you're deciding how much coverage to carry.
The Two Bond Types: A Direct Comparison
There are roughly a dozen bond types under 19 CFR 113, but for standard importers, only two matter:
- Single Transaction Bond (STB) — also called a single entry bond
- Continuous Transaction Bond (CTB) — also called a continuous bond
Here's what separates them in practice.
Single Entry Bond
A single transaction bond covers one shipment, at one port, one time. Once CBP liquidates that entry — typically within 314 days — the bond obligation is discharged.
Who Sets the Amount?
CBP requires the bond amount to be equal to the total value of the merchandise plus all duties, taxes, and fees. If you're importing $80,000 worth of furniture with a 25% tariff rate (common for goods under HTSUS Chapter 94 sourced from China), your minimum bond amount is $80,000 + $20,000 = $100,000.
The surety charges a premium on that amount. Typical rates run 0.25% to 0.50% per bond. On a $100,000 bond, that's $250–$500 per shipment.
When a Single Entry Bond Makes Sense
Use a single entry bond if:
- You're importing once or twice a year
- You're testing a new supplier and don't want a recurring commitment
- The shipment involves unusual goods that require a specialized bond (e.g., goods subject to antidumping duties under a CBP case)
- Your customs broker is handling a one-off import on your behalf
If you're doing three or more shipments annually, the math almost always flips in favor of a continuous bond.
Continuous Bond
A continuous transaction bond covers all your imports for a full 12-month period, across all ports of entry, for all modes of transport. One bond, unlimited entries.
How the Amount Is Calculated
CBP calculates the minimum bond amount as 10% of duties, taxes, and fees paid in the prior calendar year, with a minimum floor of $50,000. If you paid $300,000 in duties last year, your minimum continuous bond is $30,000 — but since that's below the floor, you'd still carry $50,000.
If you paid $600,000 in duties, your minimum is $60,000.
For new importers with no prior year data, CBP typically requires the $50,000 minimum unless your projected import volume suggests higher exposure.
What It Costs
Annual premiums on a continuous bond typically run $500–$1,500 per year at the $50,000 level, depending on your surety and credit profile. At $100,000 coverage, expect $700–$2,000 annually.
Compare that to paying $300–$500 per shipment on single entry bonds. If you're shipping monthly, a continuous bond saves you $3,000–$5,000 per year at minimum — and eliminates a lot of friction.
Why Continuous Bonds Get Complicated
CBP can — and does — issue Demand for Increased Bond notices when your import activity outpaces your bond amount. Under CBP's Bond Sufficiency Guidelines (CBP Directive 3510-004), if your annual duty liability exceeds your bond amount, CBP will flag it.
If your bond is insufficient and you don't increase it promptly, CBP can hold your entries, issue a Rate Advance, or escalate to a formal Penalty Notice under 19 USC 1592. Don't ignore bond sufficiency letters. Respond within 30 days.
The Real Cost of Getting This Wrong
Let's run a real scenario.
An apparel brand imports 10 containers per year from Vietnam. Average entry value: $60,000. Average duty rate under HTSUS Chapter 62: 16.5%. That's roughly $9,900 in duties per entry, or $99,000 in annual duties.
If they're using single entry bonds at 0.35% of entry value + duties, they're paying roughly $245 per bond × 10 entries = $2,450/year.
A continuous bond at $100,000 coverage (because $99,000 in duties triggers the 10% floor at $99,000, rounding up) costs approximately $900–$1,400/year.
They're overpaying by $1,000–$1,500 annually, plus dealing with 10 separate bond transactions per year, each with its own documentation trail.
Now add a second scenario: same brand, same volume, gets hit with a CBP audit under 19 USC 1509. If they're found to have underpaid duties — even accidentally — CBP can assess penalties up to 4x the unpaid duties in cases of negligence, or up to 8x for fraud. A $50,000 bond won't cover a $200,000 penalty. You need to match your bond to your real risk exposure, not just your normal duty bill.
Filing and Managing Your Bond
Who Files It?
Your licensed customs broker files the bond on your behalf as part of the entry process. For a continuous bond, your broker submits it directly to CBP's bond module. It goes into effect within 1–3 business days and auto-renews annually unless cancelled.
You can also work directly with a surety company — names like Roanoke Trade, Avalon Risk Management, and Merchants Bonding Company are common in the space. Your broker may have a preferred surety they work with, but you're not obligated to use theirs.
What Information You Need Ready
- Importer of Record (IOR) number — your EIN or CBP-assigned importer number
- Business legal name and address
- Estimated annual import value and duty liability
- HTS chapters you typically import under
- Any history of CBP penalties or prior bond cancellations
Bond Cancellation
Either party — you or the surety — can cancel a continuous bond with 30 days written notice to CBP. But cancellation doesn't release you from liability on entries made while the bond was active. CBP has up to 5 years to liquidate an entry and assess additional duties or penalties under 19 USC 1514 timelines.
Section 301 Tariffs and Bond Sizing: A Current Issue
If you're importing from China, Section 301 tariffs — which added 7.5% to 25% (and in some cases 145% as of 2025) on top of normal duty rates — dramatically increase your effective duty bill. That matters for bond sizing.
A $50,000 continuous bond that was adequate when you paid 5% duty on electronics may be grossly insufficient now that you're paying 20–30% combined. CBP has been actively issuing bond insufficiency notices to importers who haven't recalculated their exposure post-tariff escalation.
Run the math annually. Every January, pull your CBP entry summary data, add up your total duty payments, multiply by 10%, and confirm your bond amount meets or exceeds that number. If it doesn't, contact your surety to increase coverage before CBP contacts you first.
Quick Decision Framework
Use this to decide which bond type fits your operation:
| Factor | Single Entry | Continuous |
|---|---|---|
| Shipment frequency | 1–2/year | 3+/year |
| Multiple ports used | No | Yes |
| Duty exposure predictable | Yes | Doesn't matter |
| Want to minimize paperwork | No | Yes |
| New importer, testing volume | Yes | No |
If you're scaling, default to continuous. The administrative overhead of managing per-shipment bonds at volume is a real operational cost that doesn't show up in the premium comparison but absolutely shows up in your team's time.
What to Do Right Now
- Pull your last 12 months of CBP entry summaries (Form 7501) and total your duty payments.
- Multiply by 10%. That's your minimum continuous bond amount.
- Compare that to what you're currently bonded for.
- If you're using single entry bonds, calculate your per-shipment premium spend for the year.
- Get a continuous bond quote from your broker or a surety directly. Most quotes come back within 24 hours.
Customs bonds are not complicated, but they are consequential. An undersized bond or a lapsed bond doesn't just create paperwork — it can stop your freight at the port, trigger CBP scrutiny, and expose you to personal liability as the Importer of Record.
Get this right once, and it runs on autopilot. Let it slide, and it becomes an expensive problem at the worst possible time.
Ready to get your import compliance in order? Get started with Regenerate Trade today and work with a team that treats bond management as the foundation it is — not an afterthought.