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What is an ISF Bond?

The Importer Security Filing (ISF) is an electronic data transfer processed prior to the ocean vessel departure that is a required part of customs entry, and one necessary component of the filing is securing an ISF bond. The ISF bond serves as a financial guarantee that specific data points are provided to CBP in a timely and efficient manner before ever loading the cargo on an ocean vessel. An ISF bond is a particular type of customs bond. Customs bonds are categorized into activity codes that are designed to cover more specific usages common in international trade.

An ISF bond is designated as an “Activity Code 16 – Importer Security Filing (ISF) Bond” by the U.S. Customs and Border Protection. An ISF bond is a financial guarantee that exists between three major parties:

  1. The Obligee – The U.S. Customs and Border Protection (CBP)
  2. The Principal – The importer of record (IOR)
  3. The Surety – The insurance company that underwrites the bond

ISF bonds can either be single transaction or continuous bonds, based on the specific needs of the company. A single import bond is valid for a single transaction, while a continuous bond covers all imports made over the course of a 12-month period. It is necessary to decide what is the most cost-effective option based on the needs of the individual business.

Continuous customs bonds of other activity codes than the ISF activity code 16 may fulfill the ISF bonding requirement. These activity codes include:

Activity Code 1 – Import Bonds

Activity Code 2 – Custodian of Bonded Merchandise

Activity Code 3 – International Carrier

Activity Code 4 – Foreign Trade Zone Operator

 

 

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