Welcome to Thomas Insights – every day we post the latest news and analysis to keep our readers up to date with what’s happening in the industry. Sign up here to receive the best stories of the day straight to your inbox.

A customs bonded warehouse is a facility that stores imported and payable goods for processing before they are delivered to their final destination.

These facilities, which can be public or private, are a useful option for organizations looking to store inventory overseas.

The special feature of a customs bonded warehouse is that the payment of customs duties can be deferred for up to five years from the date of importation. During this time, until the customs duties are paid, the goods must remain in the facility, but the products can be handled and undergo manufacturing operations during this period.

The customs bonded warehouse owner is responsible for bonded goods until they are exported, collected for delivery to an aircraft or ship, or collected for consumption in the United States after payment of the charges. rights. In the event that neither of these criteria is met, the imported goods will be confiscated and treated in accordance with the laws of the country. This usually means that the shipment is discarded.

Why are customs bonded warehouses particularly important at this time?

One of the main advantages of using a bonded bonded warehouse is that the imported goods are immune to disruptive geopolitical changes, effectively acting as a protected guard.

Take the example of COVID-19. For many organizations, the global pandemic has created supply chain bottlenecks, reduced global demand for certain items, and resulted in a build-up of inventory.

To maintain business contracts with suppliers, many distributors and manufacturers look to customs bonded warehouses to save money in the short term.

Demandable luxury goods such as perfumes are less in demand, which means that the warehouses of distributors and retailers are filling up with excess product. Placing some or all of the excess stock in a customs bonded warehouse will temporarily relieve organizations of tariffs on products, which could mean the difference between a bankrupt business or the ability to continue trading after the coronavirus.

Importers also have the option of exporting their goods without paying duty if they are unable to sell them in the domestic market.

Export processing zones (EPZ)

Another way to get tax breaks and eliminate duties on imported products is to open processing and manufacturing plants in an EPZ. In these areas, the importation of materials and goods is duty free and they are usually located near good shipping ports, roads, railways and air transport hubs.

Different classes of bonded warehouses

Bonded warehouses are part of one of the 11 different classes:

  1. Government owned or rented premises. These are used to store goods that need to be examined by CBP, that have been seized by CBP or are awaiting release from CBP custody.
  2. Private import warehouse. The goods contained in this type of installation must belong to or be consigned to the owner of the warehouse.
  3. Public bonded warehouses are used only to store imported goods.
  4. Bonded yards or sheds are used to store bulky or heavy items, including tanks for importing important liquids, and barns, pens, etc. for imported animals.
  5. Glued grain bins for grain storage.
  6. Export bonded warehouses are used for goods manufactured only for export. It also covers the manufacture for export or domestic sale of cigars.
  7. Foundry and refining of bonded warehouses for refining metals intended for export or sale in the domestic market.
  8. Bonded warehouses for sorting, repackaging or cleaning imported goods (without manufacturing). This is overseen by CBP at the owner’s expense.
  9. Bonded warehouses known as “duty free stores”, for the sale of goods for use or consumption abroad.
  10. Bonded warehouses that store items specifically intended for sale on international journeys as duty-free goods on board aircraft.
  11. Bonded warehouses to store goods on general order (GO). GO goods are all goods that are not claimed within 15 days of arriving on US shores.

5 advantages of using a bonded warehouse

1. Deferred rights

As mentioned, the main advantage of a bonded bonded warehouse is that duty is not payable on stored goods until they are removed for consumption or sale. This means that an importer or distributor can retain additional funds until the goods are withdrawn.

2. Convenient international shipping

Organizations can keep their merchandise at the facility until demand increases. Once this happens, the duty will be paid and some (or all) of the goods can be delivered to the country.

If a domestic buyer is not found for the imported goods or if demand weakens, the importer can export the goods at no additional cost.

3. Storage of Restricted Items

Regulated or restricted goods may be stored in a bonded warehouse, but must be recorded, and sometimes supervised, by CBP officers. In most cases, restricted goods can only be kept in a warehouse for a very limited period of time. Customs bonded warehouses are exempt from these time restrictions, which means organizations have five years to process the necessary documents.

4. Security

Using a bonded bonded warehouse makes the process of importing goods much less stressful for manufacturers. Facilities are safe and secure with 24/7 monitoring and organizations won’t have to worry about inspections, spikes or drops in product demand, or lead times to complete complex and time-consuming documents.

Image Credit: SasinTipchai / Shutterstock

The industrial augmented reality market is expected to reach $ 70 billion by 2025Next story »

Learn more about the supply chain



Source link

About The Author

Related Posts