What Is Bonded Warehousing?
Posted by World Trade Distribution
Filed Under: Container Freight
The United States routinely charges an import tax, called a duty, when goods are shipped in from other countries. The duty is simply a tax on foreign items that come into one nation’s economy from another nation. So, before an importing business can receive the international goods, it first needs to pay the duty tax. Otherwise, the federal government could place a lien on the value of the goods.
Bonded warehousing is the storing of items classified as imported dutiable goods at a secured site where they may be worked on or simply held, without duty payments, until they are taken out of storage. The importing company pays for a customs bond to have a commercial bonded warehouse, such as ours, hold the items.
That is how a private warehouse can post a customs bond with the federal government — thus the term bonded warehousing. This customs bond ensures the government that it holds collateral for any taxes due on imported items.
The government does more, though, than wait for its revenue. It also oversees inspections of stored goods. So, federal Customs agents may, at any time, come into our warehouse and check the stored inventories, making sure they are what the customs declaration form says they are.
Why Use a Bonded Warehouse?
A bonded warehouse is an important part of the inventory system. It supports international trade by alleviating some of the costs of doing import business. There are several specific ways a bonded warehouse can be important and save businesses money. Here are a few examples.
- If goods travel through countries in order to get to their final destination, a buyer will need to use a bonded warehouse to avoid having to pay duty taxes charged by the intermediate countries.
- If you import goods and no domestic buyer is available, it’s possible to export the goods that cannot be sold, avoiding the import duty charges.
- Bonded warehouses can hold a variety of restricted goods.
If a shipment must pass through the United States on the way to a third country, it is called bonded inventory until it continues its journey. Once the inventory is off to its destination, the importing business may redeem the collateral it puts up, by receiving the Customs deposit back.
How Does a Business Regain Control Over Items in Bonded
If your business has us hold inventory, you are free to move
items from our bonded warehouse for a range of reasons:
- You may export items back out of the country and on to their next destination to carry you’re your scheduled transport itinerary. The bond deposit is returned to your business once the items leave the United States in further international travel.
- Under U.S. Customs supervision, your company is permitted to destroy any of your imported items.
- You may have the items sent out of the warehouse and along to your domestic buyer. Your bond serves as the import tax, so it will not be returned to you.