In-bond & bonded warehouse

Cargo that arrives at a US port does not have to be entered there, and does not have to be entered at all if it is leaving again. The instrument that makes that possible is CBP Form 7512, and it comes in three flavours. An Immediate Transportation, entry type 61, moves the cargo from the arrival port to another US port where the consumption entry will actually be filed. A Transportation and Exportation, type 62, moves it to a different port or land crossing and out of the country. An Immediate Exportation, type 63, sends it straight back out from where it landed.

All three are transmitted and closed out electronically. The paper 7512 that people still ask for is a printout of a record that lives in ACE, and the record is what CBP is actually looking at.

The rules that generate the claims

• Thirty days to complete the movement, with one exception that still stands: merchandise moving by barge for any part of the trip gets 60 days. The 2017 in-bond rule cut every other mode to 30 and kept the barge allowance deliberately (19 CFR 18.1(i)).
• Arrival at the destination port has to be reported to CBP within two business days of arriving.
• Export has to be reported within two business days of the cargo leaving.
• Diverting cargo to a port other than the one named on the bond requires permission from CBP, requested before the diversion, not explained after it.
• An IT carries a six-digit HTSUS number. A movement filed without a usable description is a movement waiting to be questioned.

Failure to report is where liquidated damages come from, and the measure is the value of the merchandise rather than the duty. That catches carriers out constantly. A low duty rate does not make a failed in-bond a small problem, because the duty rate is not what the claim is calculated on.

Bonded warehouse

A bonded warehouse entry, type 21, puts the goods into a facility operated under a custodial bond and CBP supervision. They can stay for five years from the date of importation. Duty is not paid going in. It is paid coming out, on a withdrawal for consumption, entry type 31, and you can withdraw in parts as you sell. Goods can also be withdrawn for export, or re-warehoused elsewhere on a type 22.

Deferring the duty is not the same as fixing the rate

This is the point that matters most right now and the one most often got wrong. Duty on warehoused merchandise is assessed at the rate in force on the date of withdrawal for consumption, not the date the goods went in. In a stable tariff environment that is a footnote. With Section 232 reaching new derivative articles, Section 301 lists in place and IEEPA actions moving, it is the whole calculation. Warehousing defers the payment and leaves the rate floating, so goods sitting on a rack are exposed to whatever the rate becomes.

A foreign trade zone behaves differently. Goods admitted in privileged foreign status have their classification and rate fixed at admission, and the current Section 232 and IEEPA measures generally require admission in that status for goods they cover. So the choice between a bonded warehouse and a zone is partly a forecast: warehouse if you think the rate is coming down, zone if you think it is going up, and talk to us before you commit inventory to either. We would rather give you that answer than sell you storage.

Why importers warehouse anyway

Tariff-rate quota commodities are the clearest case. Sugar is the standard example: product lands, waits in bond, and is withdrawn at the in-quota rate once the quota period opens, with USDA and CBP both in the file. Alcohol is the other: a bonded facility defers the federal excise tax as well as the duty, so the TTB rules run alongside the customs ones and a withdrawal has to satisfy both. And plenty of ordinary importers simply do not want to fund duty on stock that has not been sold.

Whose bond it runs on

An in-bond movement is secured by a custodial bond held by the bonded carrier, the warehouse proprietor, the cartman or the container station. Not by your importer bond. Part of the work is confirming that the party named on the 7512 actually holds a current custodial bond, because a movement filed against a party that does not is a movement that will not move.

What we need

• Bill of lading, arrival port and estimated arrival date
• Destination port, warehouse or crossing
• The bonded carrier or warehouse and their bond details
• Container and seal numbers, piece count, weight, and a description good enough to carry a six-digit HTS
• What the goods are ultimately going to do: enter, export, sit

We file the movement and then we watch it. An open in-bond is not a problem on the day it is created. It is a problem ninety days later, when nobody remembers the container and CBP does.