Bonded warehouse


Bonded warehouse

A Bonded warehouse is a building or other secured area in which dutiable goods may be stored, manipulated, or undergo manufacturing operations without payment of duty.[1] It may be managed by the state or by private enterprise. In the latter case a customs bond must be posted with the government. This system exists in all developed countries of the world.

Upon entry of goods into the warehouse, the importer and warehouse proprietor incur liability under a bond. This liability is generally cancelled when the goods are:

  • Exported; or deemed exported;
  • Withdrawn for supplies to a vessel or aircraft in international traffic;
  • Destroyed under Customs supervision; or
  • Withdrawn for consumption domestically after payment of duty.

While the goods are in the bonded warehouse, they may, under supervision by the customs authority, be manipulated by cleaning, sorting, repacking, or otherwise changing their condition by processes that do not amount to manufacturing. After manipulation, and within the warehousing period, the goods may be exported without the payment of duty, or they may be withdrawn for consumption upon payment of duty at the rate applicable to the goods in their manipulated condition at the time of withdrawal. In the United States, goods may remain in the bonded warehouse up to five years from the date of importation.[2] Bonded warehouses provide specialized storage services such as deep freeze or bulk liquid storage, commodity processing, and coordination with transportation, and are an integral part of the global supply chain.

Contents

History

Mason Transfer and Grain Co., bonded warehouse on the South Texas Border. Taken by Robert Runyon sometime between 1900-1920.

Previous to the establishment of bonded warehouses in England the payment of duties on imported goods had to be made at the time of importation, or a bond with security for future payment given to the revenue authorities. The inconveniences of this system were many:

  • it was not always possible for the importer to find sureties, and he had often to make an immediate sale of the goods, in order to raise the duty, frequently selling when the market was depressed and prices low;
  • the duty, having to be paid in a lump sum, raised the price of the goods by the amount of the interest on the capital required to pay the duty;
  • competition was stifled from the fact that large capital was required for the importation of the more heavily taxed articles;

To obviate these difficulties and to put a check upon frauds on the revenue, Sir Robert Walpole proposed in his "excise scheme" of 1733, the system of warehousing for tobacco and wine. The proposal was unpopular, and it was not till 1803 that the system was actually adopted. By an act of that year imported goods were to be placed in warehouses approved by the customs authorities, and importers were to give bonds for payment of duties when the goods were removed.

The Customs Consolidation Act 1853 dispensed with the giving of bonds, and laid down various provisions for securing the payment of customs duties on goods warehoused. These provisions are contained in the Customs Consolidation Act 1876, and the amending statutes, the Customs and Inland Revenue Act 1880, and the Revenue Act 1883. The warehouses are known as "king's warehouses," and by s. 284 of the act of 1876 are defined as "any place provided by the crown or approved by the commissioners of customs, for the deposit of goods for security thereof, and the duties due thereon."

By s. 12 of the same act the treasury may appoint warehousing ports or places, and the commissioners of customs may from time to time approve and appoint warehouses in such ports or places where goods may be warehoused or kept, and fix the amount of rent payable in respect of the goods. The proprietor or occupier of every warehouse so approved (except existing warehouses of special security in respect of which security by bond has hitherto been dispensed with), or some one on his behalf, must, before any goods be warehoused therein, give security by bond, or such other security as the commissioners may approve of, for the payment of the full duties chargeable on any goods warehoused therein, or for the due exportation thereof (s. 13).

All goods deposited in a warehouse, without payment of duty on the first importation, upon being entered for home consumption, are chargeable with existing duties on like goods under any customs acts in force at the time of passing such entry (s. 19). The act also prescribes various rules for the unshipping, landing, examination, warehousing and custody of goods, and the penalties on breach. The system of warehousing has proved of great advantage both to importers and purchasers, as the payment of duty is deferred until the goods are required, while the title-deeds, or warrants, are transferable by endorsement.

While the goods are in the warehouse ("in bond") the owner may subject them to various processes necessary to fit them for the market, such as the repacking and mixing of tea, the racking, vatting, mixing and bottling of wines and spirits, the roasting of coffee, the manufacture of certain kinds of tobacco, &c., and certain specific allowances are made in respect of waste arising from such processes or from leakage, evaporation and the like.

See also

External links

References

  1. ^ 19 U.S.C. 1555
  2. ^ Section 311 of the Tariff Act of 1930, 19 U.S.C. 1311

 This article incorporates text from a publication now in the public domainChisholm, Hugh, ed (1911). Encyclopædia Britannica (11th ed.). Cambridge University Press. 


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Look at other dictionaries:

  • Bonded warehouse — Bonded Bond ed, a. Placed under, or covered by, a bond, as for the payment of duties, or for conformity to certain regulations. [1913 Webster] {Bonded goods}, goods placed in a bonded warehouse; goods, for the duties on which bonds are given at… …   The Collaborative International Dictionary of English

  • bonded warehouse — n. a warehouse, certified by the government and guaranteed by a bonding agency, where taxable or dutiable goods may be stored, with payment of the tax or duty deferred until the goods are removed …   English World dictionary

  • bonded warehouse — n technical an official place for storing goods that have been brought into a country before tax has been paid on them …   Dictionary of contemporary English

  • bonded warehouse — A place approved by HM Revenue & Customs for the deposit, keeping and securing of goods liable to excise duty, without payment of that duty. This term is often applied to a Customs Warehouse: incorrectly, since no bond is usually required for… …   Financial and business terms

  • bonded warehouse — A building or part of a building, usually at a port of entry, designated by the Secretary of the Treasury as a bonded warehouse for the storage of imported merchandise entered for warehousing, for the manufacture of merchandise in bond, or for… …   Ballentine's law dictionary

  • bonded warehouse — noun 1. : a warehouse under bond to the government for payment of customs duties and taxes on goods stored or processed there 2. : a warehouse insured against loss or damage to goods stored therein * * * ˌbonded ˈwarehouse 7 [bonded warehouse]… …   Useful english dictionary

  • bonded warehouse — UK [ˌbɒndɪd ˈweə(r)ˌhaʊs] / US [ˌbɑndəd ˈwerˌhaʊs] noun [countable] Word forms bonded warehouse : singular bonded warehouse plural bonded warehouses a government building for storing goods that have been brought into a country before tax has been …   English dictionary

  • bonded warehouse — warehouse in which goods are held until customs duties are paid …   English contemporary dictionary

  • bonded warehouse — A warehouse, usually close to a sea port or airport, in which goods that attract customs duty or excise are stored after being imported, pending payment of the duty or the re export of the goods. The owners of the warehouse are held responsible… …   Big dictionary of business and management

  • bonded warehouse — a warehouse for goods held in bond by the government. [1840 50] * * * …   Universalium


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