What is Bonded Warehouse?
A bonded warehouse is a customs-approved storage facility where imported goods can be held without payment of import duties, and in many jurisdictions import VAT, until they are released for free circulation, re-exported or otherwise disposed of. The operator posts a bond or guarantee covering the duties on goods in its custody and is accountable to customs for every receipt and withdrawal. In the US the regime is governed by 19 CFR Part 19 and 19 U.S.C. 1557, with eleven classes of warehouse ranging from public storage to manufacturing and duty-free stores. In the EU the equivalent is the customs warehousing special procedure under the Union Customs Code, run in public or private customs warehouses under authorisation. Limited handling such as repacking, sorting or labelling is generally allowed, but manufacturing is restricted to specifically authorised facilities.
Why it matters for forwarders
Bonded storage lets importers defer duty until goods are sold, avoid duty entirely on goods that are re-exported, and hold stock close to market while documents or quotas are resolved. Forwarders must move goods into bond under the correct transit or in-bond procedure and keep stock records that match customs declarations, since unexplained shortages become a duty liability for the warehouse keeper. Time limits matter: US goods may stay up to five years from importation, while EU customs warehousing has no time limit. Duty is calculated on withdrawal, so tariff changes between entry and withdrawal can affect the landed cost. Separate the commercial storage contract from the customs status of the goods, because a lapse in authorisation or bond coverage exposes the cargo owner to immediate duty payment.