Bonded warehouses and International Trade

• Bonded Warehouses are also looked at under the Warehousing Topic here.

Why customs authorities control bonded warehouses

• Bonded warehouses are used to store dutiable goods i.e. goods on which duty has not been paid.
• Customs authorities control activities of these bonded warehouses in order.
• Collect import duties before goods are released.
• Ensure that goods in entrepot (re-export) trade are released without payment of duty.
• To prevent smuggling of goods under bond.
• To allow goods to be packed, branded, sampled and bottled.
• To make possible the movement of goods between bonded warehouses.

Importance of bonded warehouse

Are used:

• To keep dutiable goods or goods on which duty has not been paid.
• To allow goods to be packed, branded, sampled, bottled or graded but goods cannot be manufactured in a bonded warehouse.
• To enable government to raise revenue by collecting customs duties.
• To allow goods to be removed in small quantities thus saving on working capital.
• To allow certain goods to mature e.g wine.
• To enable goods to be transferred from one bonded warehouse to another by a bonded carman. A warehouse warrant is a document of title that allows dutiable goods to be released.
• To store goods for entrepot trade.
• To enable goods to be sold whilst in bond thus allowing an importer to possibly avoid paying customs duty. A customs drawback refund on duty previously paid on goods meant for re-export trade.

To access more topics go to the Commerce Notes page.