What is the meaning of "In-Bond"?

Transportation Entry (CBP 7512) is defined as:

"A procedure that allows the movement of merchandise through the United States without payment of duty and taxes prior to entry into domestic or foreign commerce. It is
established by statute (19 USC 1551, 19 USC 1552 and 19 USC 1553) and the process is set forth pursuant to regulation (19 CFR Part 18). The merchandise must be covered by a custodial
bond while being transported. The bond protects the interest of CBP and other agencies in the merchandise. In-bonds may not be used for explosives or prohibited cargo."

• CBP allows cargo to move through the U.S. prior to the cargo being cleared by CBP. It is moved under the coverage of a Customs custodial bond. The bond acts as an insurance policy against which CBP will assess any penalties that may be levied against the bond holder for failure to properly follow CBP procedures, declare, and clear in-bond cargo.
• Carrier must have a Customs custodial bond in order to carry “in-bond” merchandise.

Bonded Carriers 

Must be authorized to receive merchandise (19 CFR 112.1) for transportation from one port to another in the U.S.

• Carriers must be bonded
• Customs Surety Bond purchased to ensure compliance
• Accepts responsibility for accuracy of information
• Assures integrity of complete load to final destination
• No manipulation of cargo without CBP permission
• Accepts responsibility of monetary penalties

• Merchandise transported from one port to another in the USA In-Bond must be delivered to a:

  • Common carrier (truck, airline, railroad, steamship or other transportation line)
  • Contract Carrier
  • Freight Forwarder
  • Private Carrier

This is bonded for that purpose!

In-Bond uses:

• To transit from merchandise from one Port of Entry to another.
• Transit the USA only to ultimately export to another foreign country (For example, Mexico or Canada).
• Transit the USA to another U.S. City with intent to make an import entry for consumption or placed in a bonded warehouse or Foreign Trade Zone (FTZ).
• Moving merchandise between two shipping companies within a port of export.

Benefits of using In-Bond

• To avoid the payment of Customs Duties and Fees.
• It allows the movement of cargo cleared at another designated Customs Port.
• Can be initiated by Customs Brokers, Freight Forwarders, Trucking Companies, railroads, importers, Foreign Trade Zones.
• Allows the filing of in-bond movements electronically via “QP” for quick Customs processing and release of cargo.
• Allows some regulatory flexibility, e.g. marking requirements if not going to be consumed in the USA.

Types of In-Bond Entry

• There are three basic types of In-Bond Entry
  • IT (Immediate Transportation), Type 61
  • T&E (Transportation & Exportation), Type 62
  • IE (Immediate Exportation), Type 63

In-Bond CBP Compliance

Carriers arriving with In-Bond cargo

• Validate the quantities reflected on ACE System with the CBP-7512 Form provided by the carrier.
• As a FIRMS Arrival, If a quantify discrepancy is found, then immediately notify the carrier.  Do not sign for the documents unless in-bond CBP-7512 is corrected.
• Bonded Carriers responsibility to investigate where discrepancy occurred prior to submitting MDR to CBP for correction.
• Amended CBP 7512 must be submitted by bonded carrier or his agent via ACE or at CBP Port.

Export to Mexico

• Mexican Driver should have 3 copies of the In-bond (IE or T&E)) with him/her at the time of exportation.
• Mexican Driver stops at the Export Lot submits In-bonds self dispatched to CBP. 
• CBP will perforate or sign off on the paperwork. Failure to stop will result in Export trough ACE during next day. Pedimento Desaduanizado is required as proof of export.
• Driver proceeds to Mexico.

Export in a timely manner

• The In-Bond time limits for the following are listed: 
  • In-Bond movement to final destination port  - 30 days
  • U.S. Customs notification of arrival at port - 2 days
  • IE Time  - 15 days
  • Entered Freight in GO(General Order) - 20 days

Avoid fines/penalties from U.S Customs

• The penalty and value of merchandise's bond amount can be high as $50,000
• If export fail, a fine will be issued.
• A copy is required of the Pedimento Desaduanizado and if available any other paperwork that can prove that the shipment is in Mexico, which can be proof of arrival at destination, Mexican Bill of Lading, etc.
• CBP is contacted explain and submit a letter explaining the situation and wait for a penalty, it is usually issued within the year and this letter will serve as mitigation to reduce the duty amount.
• NOTE: Multiple infractions on any U.S. Customs’ requirements can lead to the loss of Bond and also jeopardizes Customs Broker license, Bonded Warehouse, and FTZ.
• We must keep all records for a period of 5 years.
• In case of an audit, the bonded carrier will be fined.
• File consists of:
  • Copy of original in-bond
  • Copy of in-bond which cancelled original in-bond
  • Proof of Exportation