The backbone of any economy has always been the free trade flow with various countries and other world markets.
Now that most countries serve a role in the supply chain of products or services, it is essential to ensure that the trading process is safe and meets the compliances of various countries that the goods flow through.
Countries such as Canada and USA require a custom bond between importers and exporters.
These bonds are required to ensure that all duties and taxes of the port will be paid in time and in full. It is mandated by the border regulator agency in Canada known as CBSA (Canada Border Services Agency)
Earlier, the process was quite complicated, but now the Canadian government has established CARM (CBSA Assessment and Revenue Management) to ease collecting taxes for importing goods into Canada.
However, after the implementation of CARM, customs brokers still would have to acquire bonds for their clients. The most effective way to do so is to reach out to a surety company, as they will provide digital solutions and options to pay through credit and renew bonds for ease of business.
Here are some different types of customs bonds that you might need.
- Form D-120 Bond
This type of bond is applied when a broker wants to release the goods before the duties have been paid to the authorities. The usual process entails paying duties first, and then the authorities release the goods. But, this bond enables one to do the opposite. This bond is done amongst parties; the importer, the principal, the surety company and the obligee, the CBSA.
However, this bond is only for custom brokers. But, if you are an importer not currently under a customs broker bond, you need to apply for an importers bond.
- Customs broker license
Suppose someone wishes to start a business of brokering cargo spaces and liaising with traders regarding the customs process. In that case, one needs to obtain a license from the authorities.
To become a custom bond broker in Canada, you must undergo courses by CSCB or work under someone who has been or is a member of the CSCB.
You must have two years of working experience in cargo or ship brokering to be eligible.
In addition, you must also clear a written examination by the authorities to obtain a CCS license.
- Temporary Importation of Goods
This bond is required for custom brokers who import goods into the country only for a specified period and will re-export them further.
These types of goods or cargo require a special permit classified as E29B, and the goods are allowed in the country under specific circumstances.
The maximum time you can temporarily keep the goods in the country is 18 months but only after approvals from the authorities.
- Air carrier bonds
There are various ways through which goods can enter the country, and air carriers are one of them. If the air carrier is bonded, they can bring the goods to the government even past the official entry point without special clearance. They can do this because they have already bonded with the CBSA by ensuring a bond of $5000 to $25000.
So, if you want to import goods into Canada, then not only do you need the support of a good broker, but also a good surety company to help facilitate your trade.