Bonded Warehouse (Customs Glossary)

🔖 This article is part of the Customs Glossary Guide

Bonded Warehouse

A secured facility supervised by customs where dutiable goods may be stored or manipulated without immediate payment of duty.

Type: Storage Facility Region: North America (CBP & CBSA)

Overview

Goods stored in a Bonded Warehouse can be re-exported without paying import duties

A Bonded Warehouse is a specialized facility licensed by customs authorities (CBP in the U.S. and CBSA in Canada) to store imported goods, foreign merchandise, and domestically produced goods destined for export.

The primary function of these facilities is Duty Deferral. When goods enter a bonded warehouse, they are considered to be in the legal custody of customs, meaning import duties and taxes are not payable until the goods are formally "withdrawn for consumption" (entered into the domestic economy). If the goods are re-exported, no duties are paid at all.

Bonded warehouse diagram and how they work.

Time Limits:

• USA: Goods can remain in a CBP bonded warehouse for up to 5 years from the date of importation.
• Canada: Goods can remain in a CBSA Customs Bonded Warehouse (CBW) for up to 4 years.

Permitted Activities (Manipulation)

Bonded warehouses are not just for static storage. Customs regulations allow for specific "manipulations" to be performed on the goods without triggering duty payments.

Activity	Description
Cleaning & Sorting	Goods can be cleaned, sorted, or graded to meet domestic standards before they are formally entered.
Repacking	Bulk shipments can be broken down, repacked, or relabeled for distribution. This is common for "Pick and Pack" operations.
Manufacturing	USA: Limited to Class 6 (Export Only) or Class 7 (Smelting) warehouses. Canada: Generally prohibited unless it is minor "display" preparation. Goods cannot be substantially altered.

Types & Classes

United States (11 Classes)

CBP categorizes warehouses into 11 distinct classes based on their use:

• Class 2: Private bonded warehouses used exclusively for the importer's own goods.
• Class 3: Public bonded warehouses available for general commercial use.
• Class 8: Established specifically for cleaning, sorting, and repacking (manipulation).
• Class 9: Duty-Free Stores (selling to travelers leaving the country).
• Class 11: General Order (GO) warehouses for unclaimed freight.

Canada (Customs Bonded Warehouses)

The CBSA creates a distinction between Sufferance Warehouses (short-term, up to 40 days) and Customs Bonded Warehouses (long-term, up to 4 years).

• Private CBW: For the storage of goods owned by the licensee.
• Public CBW: For the storage of goods imported by various importers.

Common Usage Scenarios

• Import for Re-Exportation: A company imports raw materials into the U.S. to clean and package them, then re-exports them to Europe. No U.S. duty is ever paid.
• Just-In-Time Inventory: A manufacturer stores high-value components in a bonded warehouse located near their factory. They withdraw (and pay duty on) only what they need for that week's production, preserving cash flow.
• Seasonal Distribution: A retailer imports winter jackets in July but stores them in bond. They delay paying the expensive duty until October when the coats are actually shipped to stores.

Usage in BorderConnect

Moving goods to a bonded warehouse requires specific eManifest filings to allow the "In-Bond" movement.

United States (ACE)

To move goods to a bonded warehouse, a carrier typically files a QP In-Bond (Type 21 or 22) in BorderConnect. The "Destination" on the manifest must be the FIRMS code of the Bonded Warehouse, not the final city.

Canada (ACI)

Goods destined for a bonded warehouse are usually released via a paper A8A Cargo Control Document (Type 10 or 20) presented at the border, or electronically linked if the warehouse is an approved sufferance location. The manifest must indicate the warehouse as the destination sub-location.

Official Resources

• CBP (USA): Bonded Warehouse Manual
• CBSA (Canada): Memorandum D7-4-4: Customs Bonded Warehouses

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