Bonded warehouse definition
Bonded warehouses help delay tariffs until goods sell domestically and waive duties if items are exported.
A US Customs bonded warehouse is a secure facility where imported goods can be stored, processed, or manufactured for up to five years without paying duties.
Using a bonded warehouse to store imported goods has some financial advantages, such as delaying the tariffs due until domestic buyers are found. Duties do not apply if the goods are reshipped to foreign markets.
Customs and Border Protection (CBP) and the bonded warehouse proprietor hold joint custody and joint supervision of the merchandise stored in the facility. The bonded warehouse proprietor charges a fee for using its storage facility. There are 11 classes of bonded warehouses, some publicly owned, some privately owned, and some jointly operated.
The warehouse operator is responsible for the goods under a bond (a financial guarantee) and must allow CBP access for searches, inspections and audits. The proprietor is responsible for making sure every part of the warehouse operation complies with the relevant laws and regulations: transportation, receiving, delivery, sampling, recordkeeping, repacking, physical and procedural security, storage conditions, any authorized processing or destruction.
The duty is only settled and the liability lifted when the goods are either exported, used as supplies for ships or planes, destroyed under Customs supervision, or released into the US market.
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- What are tariffs and how do they work? - Tariffs are taxes paid by firms importing goods internationally. They are used as a tool to control global trade.
- What is the value of US trade overall?
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