New tariffs may require importers to secure and/or increase customs surety bonds
The implementation of new tariff policies by the governments of the United States and Canada will result in significant increases to duty outlay by importers in both countries and, in turn, their customs surety obligations. It is critical for importers to understand those obligations to avoid disruption to flow of imports.
Canadian import bonds
The Canada Border Services Agency recently launched a modernized version of its customs-duty payment process. Dubbed the CBSA Assessment and Revenue Management (CARM) initiative, this new process requires all importers to secure their own customs bond to insure the customs duty outlay on imported goods. Previously, most importers used the bond of their customs brokers to facilitate surety against duty outlay.
To help ease the transition of this new process, importers have been given a 180-day grace period after the launch of CARM to secure a bond. This period ends on April 19, 2025. Due to this transition period, imports into Canada on which new tariffs are being applied will not immediately impact surety bonds. However, after April 19, 2025, importers in Canada will be required to ensure they have a customs bond in place (50% of the duty/tax outlay on an annual basis ) or a cash deposit (100% of the duty /tax outlay) . Given that the implementation of a 25% tariff will likely increase that duty outlay significantly, it is incumbent on all importers of U.S.-origin goods imported into Canada to review their current surety and confirm it adequately covers the increase in their duty outlay.
In the event surety does not adequately cover duty outlay at time of imports, CBSA could choose to detain the shipment at the border until the importer provides proof of sufficient surety, and/or the importer pays the duties in full.
U.S. import bonds
The imposition of universal tariffs on Canada-origin, Mexico-origin and China-origin goods will similarly require U.S. bond holders to re-evaluate the sufficiency of their current bonds. In the event a bond doesn’t cover the value of duties associated with goods at time of import, CBP may issue a notification in writing to require the importer to increase their bond.
Importers are typically granted a 30-day grace period to bring their surety to suitable levels. Bonds that are not adequately increased within the 30-day period will likely be terminated and the importer will no longer have surety to cover their customs duties. Should this occur, goods will be held at the border until the importer secures adequate surety and/or pays the duties in full.
It is important to note that the implementation of universal tariffs against Canada-origin, Mexico-origin goods and China-origin goods will eventually apply to low-value shipments that have traditionally been exempt from requiring formal customs entries or the application of customs duties. As a result, importers of low-value shipments and parcels will be required to submit a formal customs entry for all shipments over $250 USD in value and secure a customs bond to insure the associated duty outlay.
Livingston may contact importers who have secured their bond through Livingston and are at risk of saturating their bond value to notify them that additional bond capacity is required. However, it is the responsibility of importers to confirm they have sufficient capacity within their bonds to cover the increased value of duty outlay.