Bonded Warehouse

What is a bonded warehouse?

A warehouse, building, or otherwise secured warehouse that is customs-controlled where goods for which the duty has not been paid can be stored.

Products stored in bonded warehouses are referred to as bonded goods.

There are 11 different types of bonded warehouses.

How does a bonded warehouse work?

Importers move goods into a bonded warehouse under a customs bond, and customs supervises the stock. The importer pays duty only when the goods leave for domestic sale. Goods that are re-exported or sent to another bonded facility can avoid duty altogether, depending on local rules.

Businesses use bonded warehouses to hold inventory while they wait for a buyer, a better exchange rate, or a lower tariff. The operator tracks every movement of goods in and out, and customs can audit the records. Storage usually has a time limit that varies by country. In the United States, goods can generally stay in bond for up to five years.

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