How long can goods stay in a bonded warehouse?

Up to five years from the date of importation. After five years, goods must be exported, destroyed, or entered for consumption with full duty payment.

Is a bonded warehouse the same as a Foreign Trade Zone?

No. Both defer duties, but Foreign Trade Zones offer additional benefits like inverted tariff treatment and zone-to-zone transfers. Bonded warehouses are simpler to set up but have more limited manufacturing options.

Logistics

What is Bonded Warehouse?

A secured facility where imported goods can be stored without paying duties until withdrawn for consumption. In the context of U.S. customs and tariff recovery, understanding bonded warehouse is essential for navigating the CAPE refund process and ensuring accurate duty assessment.

Definition

A bonded warehouse (also called a customs bonded warehouse) is a facility licensed by CBP where imported merchandise may be stored, manipulated, or manufactured without payment of duty for up to five years from the date of importation. Duty is not owed until the goods are withdrawn for domestic consumption. If goods are exported directly from the bonded warehouse, no U.S. duty is payable at all. CBP recognizes several classes of bonded warehouses, from general-purpose storage (Class 1) to manufacturing (Class 6) and duty-free stores (Class 9).

How Bonded Warehouse Relates to Tariff Refunds

Goods stored in bonded warehouses have deferred duty liability — duties are assessed only upon withdrawal for consumption. If the tariff rate changes (e.g., an IEEPA rate is reduced) while goods are still in the bonded warehouse, the importer pays the lower rate at withdrawal, potentially avoiding the need for a refund claim entirely.

Example

An importer stores $2 million in Chinese-origin goods in a bonded warehouse while IEEPA tariff rates are under review. When the tariff drops from 25% to 10% three months later, they withdraw the goods and pay the lower rate, saving $300,000 without needing a CAPE refund.

Frequently Asked Questions

How long can goods stay in a bonded warehouse?: Up to five years from the date of importation. After five years, goods must be exported, destroyed, or entered for consumption with full duty payment.
Is a bonded warehouse the same as a Foreign Trade Zone?: No. Both defer duties, but Foreign Trade Zones offer additional benefits like inverted tariff treatment and zone-to-zone transfers. Bonded warehouses are simpler to set up but have more limited manufacturing options.

Legal References

19 U.S.C. § 1555 — Bonded Warehouses
19 CFR Part 19 — Customs Warehouse Regulations

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