What is Customs Bonded Warehousing & its Importance

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What is Customs Bonded Warehousing And Its Importance

Customs duty is a major expense in international trade and this is the reason that some enterprising
people came up with the idea of customs bonded warehousing. The warehouse itself is a facility in
which the goods imported into the country are stored for safe keeping.

The cargo can be stored in the customs bonded warehouse for up to 5 years. Here the cargo can also
undergo manufacturing operations and no customs duty has to be paid for this purpose. The owner of
the customs bonded warehouse incurs a liability when the goods are brought to the warehouse. The
liability in turn is protected by a warehouse bond. When the goods are vacated from the warehouse the
liability no longer exists.

The goods may be vacated from the warehouse for the following reasons:

 In order to provide supplies to aircraft or ships
 In order to be destroyed under the rules and supervision of the authority taking care of the

international trade.
 In order to be exported
 To be consumed within the country which has imported the goods
Importance of customs bonded warehouses in international trade

Customs bonded warehousing plays an important role in the import procedure and allows the
businesses to operate smoothly without any glitches. The owners of the warehouses usually provide the
extra services like managing the inventory and cash flow on behalf of the importers. Other than merely
storing cargo the warehouses also often aid in import of goods without the consequences of custom
delay or when the delivery of the goods takes too long due to ongoing negotiations.

The reasons why customs bonded warehouses are important for importers:

 The security of the goods and containers is assured
 The importers can enjoy duty free storage
 The goods are stored in safe facilities
The importers are benefitted by the concept of customs bonded warehouses in many ways. They
provide an affordable and simple way of deferring the expenses like custom duty and revenue
payments. This is the reason that customs bonded warehouses have become very popular in most
countries.