Customs bond

Importers, carriers and customs brokers can meet customs bonds: the Customs Act ties bonds or other security to the release of goods and to transporting imported goods that have not been released, except in prescribed circumstances (ss. 20(1), 35(1)). A buyer of such a business meets one when working out whether the seller’s bond stays in place after closing or whether the buyer must arrange its own. See also what licences transfer when you buy a business.

What the Customs Act says

Under the Customs Act, goods released under s. 32(2) or (4) or s. 33 are released only once the prescribed deposits, bonds or other security are given, except in prescribed circumstances (s. 35(1)). The person who gave the bond must satisfy any prescribed terms and conditions (s. 35(2)). The Governor in Council may make regulations prescribing the amount of a bond, or authorizing the Minister to determine it, and its nature, terms and conditions (s. 166(1)). Where security already given is no longer adequate, the Minister or a designated officer may, by notice, require additional security within a reasonable time stipulated in the notice (s. 3.4(1)).

Where it shows up, and what to ask

• Bonded highway carrier codes: the CBSA says a bonded carrier operation needs a customs bond that is a continuous bond or a bond for a specified period. A bonded carrier code expires when a bond for a specified period ends.
• Customs brokers: the CBSA’s licensed broker page lists form D120, Customs Bond, among its related forms.
• Ask whose name the bond is in, whether it continues after closing, and whether the CBSA needs a new one for the buyer.

The Customs Act is federal, so this entry is not specific to one province. For the broker side, see customs broker licence.