A customs surety bond is a legal requirement for all importers to the United States. It is a mandate whereby importers are required to provide third –party assurance that agreed-upon revenue will be paid, local regulations will be followed, and all associated levies and taxes will be adhered to. A surety bond can be single or continuous depending on whether the import is a one-time situation or if the importer plans to continually repeat import activity.

While one may go to an insurance underwriter to secure a customs surety bond, there is at least one distinct difference between a surety bond and an insurance contract. A surety bond involves three entities: the surety, principal, and the beneficiary. The surety issues the bond on behalf of the principal (importer of goods). The bond is a guarantee to the beneficiary that the principal will proceed according to the agreed-upon contractual obligations. If the principal fails to meet those obligations, the beneficiary can receive compensation from the bond. Insurance generally protects property of the individual who takes out the policy. For example, an importer could take out insurance to protect goods being shipped. A bond protects an outside party (in this case, the federal government). In short, surety bonds are a way for the government to ensure that the revenue stream for imports is protected and that importers comply with their obligations.