Bonded Warehouse (Customs Glossary)
| This article is part of the Customs Glossary Guide |
In North American trade, a Bonded Warehouse is a facility authorized by customs authorities to store imported goods or other controlled merchandise under bond. Duties and taxes are generally deferred while the goods remain under customs control and become payable when the goods are released for domestic consumption. If the goods are exported instead, duties may not become payable in the country where the bonded storage occurred.
Bonded warehouses are used to support import, export, inventory, and logistics workflows where goods must remain under customs control before final release or export.
Common Uses
| Scenario | Use of Bonded Warehouse |
|---|---|
| Import for Re-Exportation | Goods are stored under bond and later exported without entering domestic commerce. |
| Deferred Duty Payment | Duties and taxes are deferred until goods are withdrawn for domestic consumption. |
| Inventory Flexibility | Goods can be stored until market demand, production timing, or customer instructions determine when they should be released. |
| Perishable or Specialized Storage | Goods may be stored in facilities equipped for required handling or temperature controls. |
| Trade Shows or Temporary Movements | Goods may be temporarily stored under customs control before being re-exported or otherwise accounted for. |
Permitted Activities
Bonded warehouses are not always limited to static storage. Customs rules may allow certain handling or manipulation activities while goods remain under bond.
| Activity | Description |
|---|---|
| Cleaning, Sorting, or Grading | Goods may be prepared or organized for later release or export when permitted by customs rules. |
| Repacking or Relabeling | Goods may be repacked, marked, or labeled when allowed by the warehouse program. |
| Display Preparation | Goods may be prepared for display or inspection in limited circumstances. |
The allowed activities depend on the country, warehouse licence, and customs program. Goods generally cannot be substantially altered unless the applicable program specifically allows it.
Canada: Customs Bonded Warehouses
In Canada, a Customs Bonded Warehouse (CBW) is licensed by the CBSA. CBSA Memorandum D7-4-4 states that goods may generally remain in a customs bonded warehouse for up to four years, subject to the applicable rules and exceptions.
CBSA distinguishes Customs Bonded Warehouses from sufferance warehouses. Sufferance warehouses are used for short-term control of unreleased imported goods, while customs bonded warehouses are used for longer-term storage under the CBW program.
United States: Bonded Warehouses
In the United States, bonded warehouses are authorized by CBP and are used to store imported merchandise under customs control. U.S. bonded warehouse rules include multiple warehouse classes and procedures, so users should consult CBP's bonded warehouse guidance for the specific warehouse type and activity.
Usage in BorderConnect
Moving goods to a bonded warehouse usually requires the correct in-bond or eManifest workflow.
- United States (ACE): a carrier may need a QP in-bond movement, with the bonded warehouse or facility identified by the appropriate destination information such as a FIRMS code.
- Canada (ACI): a carrier may need an ACI eManifest with the correct release type, destination sub-location, warehouse code, or cargo control document for the movement.