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To TIB or Not to TIB

U.S. Customs and Border Protection (CBP) offers several programs that allow importers to save on duties and taxes. One of these programs is the Temporary Importation Under Bond or TIB program. Like most CBP related programs for reducing duty payments, this process can be complex and costly if not executed properly.

A TIB allows an importer to enter goods into U.S. territory without paying duties or taxes; however the goods must be exported or destroyed within one year of the date of importation (two one-year extensions requests are allowed). 

In determining whether or not a TIB is a viable option, an importer must consider the reason for the import, the length of time the goods will be in the U.S., and the monetary amount of the duties that will be avoided. 

First, an importer must determine if the goods will be imported for a reason consistent with the regulations for TIB’s.  The allowable reasons for TIB’s are:
•    Goods that are under exclusion orders or restrictions that cannot be permanently enter the goods as a consumption entry
•    Goods imported temporary for testing or study
•    Goods brought in for display or demonstration
•    Goods to be repaired, altered or processed

Next an importer should establish a timeframe based on how long the item will actually be in the U.S. If there is no way to tell, or if the item will be in the country longer than one year, a TIB should not be considered.  

Lastly, there is always additional administrative time needed to handle TIB’s properly. Therefore, if items normally have a low duty rate or are duty free, it may not be worth going through the TIB process. 
While a properly imported TIB can help you realize great savings, it is important to know that there is also increased risk associated with using the TIB program.  If a TIB is not closed (or extended) properly and timely, then the importer will face liquidated damages up to twice the original duty. 

More often than not, TIB failures are due to poor record keeping and inventory control.  Being able to trace imported goods from importation through the export process is the key.  If an importer doesn’t keep track of the item and loses it, or somehow exports it without notification, liquidated damages will most likely be assessed.

For compliance minded companies, the TIB program can offer a substantial reduction in duties, or a way to import items that are under an exclusion order.  However, companies without trained personnel or sufficient policies may end up paying more in the end. 

If you would additional information on if TIB’s can work for your company or if you have any other Global Trade Compliance matter please contact Allyn at (239) 489-9900 or you can email us at Incorporated in the State of Florida in 1992, Allyn International is a boutique provider of logistics, corporate tax, and global trade services.  Our in-house Customs team has 6 licensed customs brokers on staff in the US and Europe.  


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