By Jim Trubits
Astute importers and exporters can benefit from the numerous duty avoidance, deferral, and recovery programs offered by U.S. Customs & Border Protection (CBP).
Temporary Importation Bonds (TIB) are a great way to avoid paying thousands of dollars in duty. Here’s how it works: Under certain conditions, goods are imported into the U.S.—for a limited time—duty free. Instead of paying duties, the importer posts a bond for 110% or twice the amount of duties, taxes, etc. that would be due if the goods were entering without the TIB.
Most TIB goods must be re-exported or destroyed within one year. Two one year extensions may be granted. When using a TIB, it’s important to understand that the goods cannot be sold in the U.S. and must be re-exported within the allotted time frame. Many importers prefer using a TIB instead of setting up a duty drawback program, as they don’t have to wait months to recovery their duties.
When to use a TIB
TIBs are most useful for goods subject to high duties that will be imported for testing/repair before being re-exported. They are commonly used for medical devices that have yet to be approved by the FDA.
Keep in mind that CBP has strict requirements for goods that qualify for TIB. If your goods fail to meet these conditions, you could face a penalty of 110% or double the duties and user fees due, depending on which TIB provision was used.
Are you TIB ready?
Before ever making entry under a TIB, make sure
- your goods qualify under one of the 14 TIB provisions
- you’ve carefully reviewed the Customs requirements for TIBs
- you’ve consulted with an expert or obtained a binding ruling, if necessary
- your Customs documentation indicates that it’s a TIB shipment
- you’ll be able to supply the necessary supporting documentation and records to account for the imported goods, including the required proof of export/destruction
Come learn more about TIB and other duty savings programs during one of our seminars on Duty Deferral & Recovery Strategies this November.
Chicago, IL – 11/4/14
Rochester, NY – 11/12/14
Syracuse, NY – 11/13/14
Albany, NY – 11/20/14
Jim Trubits is Vice President for Mohawk Global Trade Advisors. Click here to read more about Jim.