News & Press

May 8th, 2025

Rogers & Brown

Written By: Raymond Kelley, President of Rogers & Brown

Last month, I attended the National Customs Brokers & Freight Forwarders Association of America (NCBFAA) annual conference in Phoenix, Arizona—an event I’ve regularly participated in over the past decade. As in previous years, the conference featured a range of insightful panel discussions led by attorneys specializing in Customs law, U.S. Customs officials, and other leading industry professionals. Unsurprisingly, much of the focus this year centered on the growing complexity of tariffs—Section 301, 232, IEEPA Fentanyl, Reciprocal Tariffs, and ADD/CVD, among others.

However, one key difference stood out: unlike previous conferences that included a standalone panel featuring the top three surety companies discussing bonds and related issues, this year saw representatives from surety companies integrated into several broader panels addressing critical industry concerns. This shift signals an important change—Customs bonds are no longer a routine administrative matter but a significant area of focus with far-reaching implications for importers.

What Is a Customs Bond?

A custom bond is a financial guarantee between an importer, a surety company, and U.S. Customs and Border Protection (CBP). It ensures that all duties, taxes, and fees owed on imported goods will be paid. Customs Bonds regulations are found in Chapter 113 of Title 19 of the Code of Federal Regulations (CFR). Without a valid customs bond, goods can not legally enter U.S. commerce. A customs broker does not issue or control the requirements for obtaining a bond.

Why Importers Need to Pay Attention

One of the most pressing issues is the growing insufficiency of existing Customs bonds due to the rise in duties stemming from new tariffs. We’ve already begun to see signs of strain, but a larger wave of bond insufficiencies is on the horizon. For importers accustomed to duty rates of 0–2.5%, increases to 10% or even 25% will significantly raise their financial exposure. Since a bond must cover 10% of duties paid over a 12-month period, many importers will find their current bond levels inadequate and will need to increase them accordingly.

Understanding Bond Periods vs. Saturation Periods

Importers need to understand how bond sufficiency is evaluated. A Customs bond is valid for one year from the issuance date, provided it remains sufficient. It automatically renews unless canceled. However, bond saturation is assessed based on the trailing 12 months of duty payments, which may not align with the bond’s anniversary. A common misconception is that a new bond year resets the liability, but it does not. When reassessing your bond, consider both past liabilities and the anticipated impact of tariff increases.

All major sureties advise importers to overestimate rather than underestimate bond needs. Underestimation can lead to quick saturation, forcing a new bond to be issued. This can result in stacked liabilities, which elevates risk levels and may lead to greater financial demands by the surety.

Act Before Receiving a Bond Insufficiency Notice

Importers should proactively review their bond sufficiency rather than waiting to receive an Insufficiency Notice from Customs. Once issued, these notices come with strict timelines for resolution. Increased bond amounts mean greater risk for sureties, which will trigger more stringent vetting of importers. Importers should be prepared for:

• Review of financial statements
• Assessment of credit history
• Evaluation of past customs compliance
• Analysis of business stability and tariff impact
• Additionally, sureties may require collateral, such as a letter of credit or a cash deposit, to secure the bond, which can place added pressure on cash flow and profitability.

This vetting process takes time. Delays in securing a higher bond can lead to the termination of the current bond, temporarily halting import activity. This, in turn, may cause cargo to be held at ports or terminals, resulting in costly demurrage and storage fees.

Increased Enforcement and Risk of Non-Compliance

As duties and liabilities increase, so does Customs enforcement. We are already seeing more frequent audits, CF-28 Requests for Information, and CF-29 Duty Assessments. Failure to respond to or pay additional duties can result in claims against your bond, demands for reimbursement from your surety, and potentially severe consequences, including penalties, bond cancellation, or loss of importing privileges.

How Rogers & Brown Can Help

Rogers & Brown is committed to helping importers navigate these changes. Rogers & Brown acts as a facilitator for the bond writers (surety) – we do not request financials nor demand collateral. In fact, we often share in our customers’ frustration when these demands are made. If a customer prefers, we are glad to have our surety partners work directly with them on any matters related to the financial elements of the bonding process. We will always remain by the side of our importers to support and facilitate the bonding process. 

For clients who have obtained their Customs bond through our surety partner, we actively monitor bond saturation and receive weekly updates to identify risks in advance. Our goal is to provide early alerts, allowing clients to take action before Customs issues a formal Insufficiency Notice.

Conclusion

In today’s evolving trade environment, Customs bonds have become a critical element of risk management—not just a compliance formality. Importers must take a proactive approach: monitor bond usage, maintain updated financial documentation, and seek expert guidance. With tariffs and enforcement trends continuing to shift, staying ahead of your bond obligations can be the difference between smooth operations and costly disruptions.