Re: custom brokers...

In a message dated 5/17/03 8:00:43 AM, pho@
John,

I contacted a customs broker and he said that to import (from Taiwan) I would
need a Customs Bond in the amount of $500.00 a year. He also mentioned that
I could use his bond as a cost plus option, $5.00 per $1000.00 or a $50.00
min which is probably the way I'd would go at first. Is this reasonable?
Are these fees in line?

Peter

Well, the bond is to cover the exposure you have if something goes wrong, and
USCustoms needs to fine someone, and you can't be found. Say you bring in
$8,000 worth of ceramics, which has been released to you, and the FDA test
for lead content in the glaze shows an unacceptable level of toxicity.

Customs would require you to redeliver the goods to Customs, or destroy
them, or some such proof the ceramics did not enter the commerce of USA. Say
you can't comply, the the bond covers the fine, which would be the $8000
value of the goods. And the bonding company would then come looking for you.

(Now before anyone asks "can this happen?!", my answer is of course, every
day to those who buy products off the shelf from overseas and expect to make
money... it normally does not happen to those who compete on design, but if
it does, the seller makes good.)

Bonds are SEB or GTB. SEB = single entry bond, meaning you get a bond one
each deal you bring in... GTB means general term bond, meaning you buy a bond
that covers all of your importations for the year. I think the rule of thumb
is you use SEBs until you expect to have more than a half-dozen importations
per year, then you switch to GTB.

Bonds are required, they are not new or special, it is an area where, shall I
say, neither the customsbrokers nor the bondwriters are afraid of a profit.
But your competitors are paying it too.

The trick is not to worry about bonds, or the cost, the trick is to ask and
know all the costs, and figure all of them in to make sure you price covers
all of that. Then when you bring your first deal in, you are assured a
profit. Which of course is a part of why we do business.

John

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