Bonded Warehouses

Imy Clarke - On behalf of Alchemy Recruitment, March 30, 2015

Bonded warehouses, or customs warehouses, are an important part of the international logistics infrastructure. So what is a bonded warehouse? It’s a secured facility supervised by customs authorities where imports are stored pending either re-export or release following assessment and payment of any outstanding duties and charges. These warehouses are essential in the legal trade of goods in all developed countries in the world.

The warehouses are called so because upon entry into the warehouse, all goods incur liability under a bond for both the importer and warehouse proprietor. This liability disappears once the goods have left the warehouse, whether exported, destroyed or after the payment of duty.

So why are these warehouses so useful to importers? Very simply the importer has cash flow advantage; the imported goods can be stored without paying duty and even re-exported without payment. Until the goods are removed from the warehouse and sold in that country, payment is deferred. Similarly, if the country you’re looking to export goods to does not have payable duty or VAT it provides a useful storage place.

They also have their use for customs officials. Should goods be confiscated or quarantined, these warehouses are perfect; goods can be stored without people paying duties while the fate of the goods is decided.

Although the government operates some warehouses, many are instead run by third parties that rent out their warehouse space via contract. In these cases it can vary who takes on the responsibility for paying duties – the contractor or the importer. Either way evidence nearly always needs to be provided for insurance, installation of security systems and other measures in place to prevent fire damage or contamination.

Bonded warehousing is integral to the monitoring of international trade. As well as preventing the distribution of illegal or unwanted goods and substances, they also provide significant economic benefit in maintaining cash flow for companies.

Posted in categories: International, Warehousing
comments powered by Disqus