Bonded warehouses allow for the storage of dutiable goods without paying duties, providing flexibility for importers and customs officials. They can be run by governments or third parties, and operators must meet customs and port requirements.
Bonded warehouses are warehouses where dutiable goods can be stored without paying duties on them. For importers, there are a number of benefits to using this type of storage, making them a popular option in many ports around the world. Different governments have different laws on how to administer such warehouses and who can use or manage one.
Also known as a bonded warehouse, a bonded warehouse acts like a no man’s land where goods can be stored without an importer or agent having to pay duties on them. If the importer decides to sell the goods for re-export, duties will not be incurred. Likewise, in the event of destruction of the goods, the obligation to pay the duties will also be resolved. If the imported goods are released for sale, however, customs duties will be payable.
Importers often appreciate the flexibility of such warehouses, as if they can’t get a good price for goods domestically or can’t sell them at all, they can sell them for re-export without having to worry about duties that may already have been paid. Paying duties upon arrival can also be costly, and using a bonded warehouse allows importers to access sale funds to pay duties, rather than having to pay duties upfront. Customs officials also use them to store seized or confiscated goods while they work out what will happen to them, thus ensuring people don’t pay duty on goods they can’t use.
Some warehouses are run by a government, while others are operated by third parties who contract out their warehouse space. In some cases they may take responsibility for paying the duties, while in other cases the importer or storage agent is responsible. Import/export businesses can maintain their own storage space for the convenience of themselves and their customers, especially if they do a lot of business.
Individuals wishing to open bonded warehouses generally need to apply to the customs agency in the countries where they intend to operate warehouses. The application process can be complex and lengthy, and some people choose to entrust it to a lawyer experienced in such matters. In addition to meeting customs requirements, operators may also need to meet requirements established by the port in which they operate, including proof of insurance, installation of safety systems and measures to prevent losses due to fire or contamination.
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