Warehouse Entries, Bonded Warehouses in International Shipping

Bonded warehouses in international shipping are an excellent method of storing internationally shipped merchandise without paying duty until necessary. A bonded Warehouse in international shipping is a facility where goods are kept in a Customs Bond; in customs custody, duty has not been paid, and the global shipping goods have not been entered into U.S. Commerce.

To get internationally shipping goods into a Bonded Warehouse, the same entry forms must be filed (CF3461 and 7501), EXCEPT that the entry code block must be put 21, i.e., Bonded Warehouse Entry.

Bonded Warehouse Entries for international shipping REQUIRE A BOND OF 2 (TWO) TIMES THE AMOUNT OF DUTY AND TAXES, not for the total value of the international shipping goods. Bonds can be either single or continuous.

TIME LIMIT IS 5 YEARS FROM THE DATE OF IMPORT EXTENSIONS. If 5 years are exceeded, the international shipping goods considered involuntarily abandoned shall be transferred into the General Order Warehouse.

There is no duty if international shipping goods are entered into the BW and exported. However, the DUTY RATE FOR CONSUMPTION ENTRY IS ON THE DATE WHEN THE GOODS HAD BEEN WITHDRAWN FROM THE Bonded Warehouse. NOT ON THE DATE OF ENTRY IN THE BW.

• If it is withdrawn for transportation and exportation, then CF 7512.
• If it is consumption withdrawal, then CF 7501

In both cases, the importer put an " in " in the bottom left-hand corner of the entry:

1. What is the Bonded Warehouse;
2. How many have been withdrawn;
3. How many are left?

When it reaches 0 (zero), the words must be typed "Final Withdraw."

Restrictions on BONDED WAREHOUSE in international shipping:

1. No perishable global shipping goods;
2. No explosives for international shipping.
3. Dangerous goods can only be stored with approval from the Bonded Warehouse insurance company.

The condition for the Bonded Warehouse is STORAGE ONLY! If the importer repacks, sorts, tests it, etc., a CF 3499 "Permit to Manipulate" must be issued to do so. Example: Combine small pieces into a unit.

Classes of Bonded Warehouses (19.1)
One Bonded Warehouse can handle multiple courses itself.

1. Governments warehouses;
2. Importer's private warehouses for exclusive storage only;
3. Public warehouses are used exclusively for storage.
4. Bonded yard for heavy bulk materials;
5. Bonded yards and elevators for storage of grain;
6. Manufacturing warehouses for manufacturing in a bond. Solely for the export of the finished products. It MAY NOT be entered in the U.S.;
7. Smelting and Refining warehouses for metal and ore materials for export or domestic consumption;
8. Manipulation warehouses, bonded for clearing, sorting, and repacking, but NOT for manufacturing imported goods; and
9. "Duty-free stores" are in airports.
10. Reserved

RE-WAREHOUSING in BONDED WAREHOUSE:

Internationally, goods can be shipped from one Bonded Warehouse to another. Use CF 7501 with code 22 (re-warehouse), and do not use 3461.

1. If it is within the same port, then file CF 6043 (Delivery Notice);
2. If to different ports, then:
   a. CF 7512 Withdraw for transportation and exportation in the Bonded Warehouse where the goods are going out, and;
   b. CF 7501 with code 22 (re-warehousing) at a destination Bonded Warehouse.

Important: When re-warehousing, you DO NOT have to pay the HARBOR MAINTENANCE FEE at the destination warehouse because the fee was already paid at the first warehouse.

The minimum for removal:

• One box;
• 1 case;
• One piece
• For bulk, one metric ton.

Internationally shipping goods CAN BE SOLD while in the Bonded Warehouse. However, when the new owner of the goods is ready to withdraw them from the warehouse, they must get the RIGHTS TO WITHDRAW from the seller.

Internationally shipping goods in a Bonded Warehouse are sorted by:

1. Entry #;
2. Unique Identifier #. SKU - Stock Keeping Unit.

Bonded Warehouse requires an Inventory Control System. It can be manual (book) or automated (computer).
At any time when Customs comes for a spot check, it must be able to track:

• when it entered & withdrew;
• amount of remaining;
• amount of damages;
• amount of destruction;
• all of that by SKU #.

DIFFERENT TYPES OF KEEPING INVENTORY: Bonded Warehouse must notify customs by letter what method it uses:

1. FIFO - First in - First out;
2. LIFO - Last in - First off.

DISCREPANCIES in BONDED WAREHOUSE for international shipping:

• IF BW IS SHORT, it must pay duty and taxes on its items;
• IF BW IS OVER, it must notify Customs WITHIN 5 (FIVE) WORKING DAYS and file a new 7501 for those overages.

Extraordinary shortages must be reported to Customs and paid within 20 days of the month the shortage was discovered.
- Extraordinary shortages are $100 or more in duty and taxes per entry, OR 1% or more of the total value of the entry.
- If it is NOT an extraordinary shortage (small ones), it will be paid when the 300 REPORT is filed yearly.

DAMAGES: You CANNOT write damages off on your own. You must write a letter to customs and hold it on site until customs writes it off (For example, keep the necks of sealed, broken international shipping bottles).

If Customs wrote the damages off, you are not liable for the duty. Customs will decide whether or not they would like to see proof of the damages.

Form 300 Report:

This report shows Bonded Warehouse activity within one physical year.
It must be filed within 45 days of the Bonded Warehouse's physical year (it does not have to be the end of the calendar year).

The penalty is $100 per day after those 45 days.

Bonded Warehouse could use an alternative format if they got the approval from Customs, or a reconciliation report, and 300 reports. It must be filed within 19 days after the end of the physical year.

Bonded Warehouse does not have to send the 300 Report to Customs. Just write a letter stating that the report is done and the Bonded Warehouse is open for inspection.

When you bring international shipping items into the Bonded Warehouse, the Bonded Warehouse opens a PERMIT FILE FOLDER for the 7501. The documents are filed in the folder as duplicates of entry activity until the entry gets to a 0 (zero) balance. When it reaches its zero balance, you submit it to Customs for liquidation of the entry.

• All documents in the Permit Folder must be filed within 5 (five) working days.
• After it reaches a 0 (zero) balance and the final withdrawal statement is put on top of the Permit Folder, it must be submitted to Customs for the entry liquidation within 30 days of the last withdrawal entry.

APPLYING FOR A STATUS OF BONDED WAREHOUSE (for the permit):

• You apply to the Port Director with an estimated bond, blueprints, security proofs, type of international shipping goods that will be stored, etc. (19.2). A list of all employees with names, SSNs, addresses, work history, etc., must also be submitted. All employees MUST BE FINGERPRINTED.
• Customs is considering issuing you the Bonded Warehouse permit.
• A new application must be filed to increase space in the Bonded Warehouse.
• A new application must be filed to discontinue the Bonded Warehouse.

You can bond JUST A PART, but not an entire warehouse.

Customs have the right to take off Bonded Warehouse permits for:

• Bonded Warehouse management fails to obey proper customs commands.
• Does not submit a complete employee list;
• Misstatement in applications;
• If no bonded goods had been stored for 2 (2) years,
• etc.

Unbonding a part of a Bonded Warehouse can be allowed by Customs for a period of up to 1 (one) year (Temporary un-bond).