Inbond General Information

Owned by Itaty Cisneros
Last updated: Jan 20, 2023 by Jackeline Ashley Lara
4 min read

IN-BOND GENERAL REQUIREMENTS AND INFORMATION

DEFINITIONS

  • In-Bond - A transaction that allows for the movement of cargo through the United States, without payment of duty and taxes prior to entry into domestic consumption or for exportation to foreign countries. In-bonds were 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 cargo must be covered by a custodial bond while being transported. The bond protects the interest of CBP and other agencies in the cargo by obligating the carrier to pay a penalty or liquidated damage assessment for noncompliance with the regulations governing the movement of in-bond merchandise. In-bonds may not be used to transport explosives or prohibited cargo;

  • Bonded Carriers - A carrier of merchandise whose bond under 19 CFR 113.63 is obligated for the transportation and delivery of merchandise from one U.S. port of entry to another. These carriers include:

    • Common Carrier - A carrier of merchandise that owns or operates a transportation line (railroad, steamship, pipeline, truck line or other transportation line or route and is employed by the general public to transport merchandise;

    • Contract Carrier - A carrier is hired to transport merchandise for a specific person or consignee;

    • Freight Forwarder -A freight forwarder dispatches shipments on behalf of other persons and handling the formalities incident to such shipments;

    • Private Carrier – A carrier of one’s own goods or merchandise;

  • Origination port – the U.S. port of entry at which the transportation of merchandise in-bond begins;

  • Port of Destination – the U.S. port of entry at which merchandise is delivered after being shipped in-bond from the origination port where it was entered as an immediate transportation entry;

  • Port of Diversion – the U.S. port of entry to which merchandise is diverted while in-transit from the origination port to the port of destination or the port of exportation;

  • Port of Exportation – the U.S. port of entry at which in-bond merchandise entered for transportation and exportation or for immediate exportation is delivered for exportation from the United States.

 

Permitted Filing

A transportation entry (filing for in-bond transit authorization) may be filed by:

  1. The carrier, or authorized agent of the carrier, that brings the merchandise to the in-bond origination port under its bond;

  2. The carrier, or authorized agent of the carrier, that is to accept the merchandise under its bond or a carnet for transportation to the port of destination or the port of exportation; or

  3. Any person or the authorized agent of any person, who has a sufficient interest in the merchandise as shown by the bill of lading or manifest, a certificate of the importing carrier (such as a power of attorney or letter of authorization), or by any other document. If the person is filing the entry using the bond of another entity, written authorization to use that entity’s bond for the specific filing situation is also required, CBP may request evidence to demonstrate sufficient interest.

Required Bond

Carriers, warehouses, cartmen and container stations that handle “in-bond” cargo are required by CBP to obtain an Activity Code 2 (C2) Bond, in accordance with 19 CFR 113.63. The custodial bond guarantees compliance with regulations relating to the receipt, carriage, safekeeping and disposition of merchandise not yet officially entered into the U.S. commerce and for which duties are due. Once on file with CBP, the C2 bond is valid for all ports of entry.

Road transport companies wanting to operate as a bonded carrier will need to obtain a Standard Carrier Alpha Code (SCAC) issued by the National Motor Freight Traffic 8 Association, (http://www.nmfta.org ). The SCAC is used to identify road transport companies. For in-bonds created as a result of a withdrawal from a Foreign Trade Zone or bonded warehouse, the FIRMS code of the FTZ or bonded warehouse may be used in lieu of a SCAC.

 

Types of In-Bond Movements

There are three primary types of in-bond movements:

  • Immediate Transportation (IT; Type 61) entry that allows foreign merchandise which has arrived at one U.S. port to be transported to another U.S. port where a subsequent entry must be filed;

  • Transportation and Exportation (T&E; Type 62)) entry that allows foreign merchandise arriving at one U.S. port to be transported through the U.S. and to be exported from another U.S. port without the payment of duty. This requires a Custodial Type 2 bond only. Example –Vehicles imported to Brunswick, Georgia. Transferred on a Type 62 for transfer to Miami with eventual exportation to Brazil.

  • Immediate Exportation (IE; Type 63) entry that allows foreign merchandise arriving at one U.S. port to be exported from the same U.S. port without the payment of duty;

In addition to the three primary in-bond movements, there are other scenarios using inbonds as required by policy and regulation.

  • Vessel Supplies for Immediate Exportation (VSIE) is the same entry as an IE inbond movement except that the merchandise will be loaded on a vessel or aircraft for its use;

  • Vessel Supplies for Transportation and Exportation (VSTE) is the same entry as a T&E in-bond movement except that the merchandise will be loaded on a vessel or aircraft for its use;

  • Warehouse Withdrawal for Immediate Exportation (WDIE) is an entry that allows merchandise that has been withdrawn from a bonded warehouse at one U.S. port to be exported from the same U.S. port without the payment of duty;

  • Warehouse Withdrawal for Transportation (WWT) is an entry that allows merchandise withdrawn from a bonded warehouse at one U.S. port to be transported to another U.S. port where entry must be filed;

  • Warehouse Withdrawal for Transportation and Exportation (WWTE) is an entry that allows merchandise withdrawn from a bonded warehouse at one U.S. port to be transported through the U.S. to be exported from another U.S. port without the payment of duty;

  • Warehouse Withdrawal of Vessel Supplies for Immediate Exportation (WDVSIE) is an entry that allows merchandise withdrawn from a bonded warehouse to be loaded on a vessel or aircraft, for its use, and exported from the same U.S. port;

  • Warehouse Withdrawal of Vessel Supplies for Transportation and Exportation (WDSTE) is an entry that allows merchandise to be withdrawn from a bonded warehouse at one U.S. port, transported through the U.S., loaded on a vessel or aircraft for its use, and exported from another U.S. port.