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Op-Ed: Understanding in-bond shipments to Puerto Rico

You started a small business selling auto parts based on your contacts and years in that industry. You were able to buy a container of automobile brakes from a manufacturer in that you know in Vietnam. 

As part of your due diligence, you found an international shipping company that can bring the container up to the port of New York- New Jersey, and of course, a transshipment will ensue moving the merchandise to a U.S. flagged carrier that can bring the cargo to San Juan.  

What you should know is that any merchandise of foreign origin that is bought by a local importer that will be transshipped through a U.S. mainland port must be shipped to Puerto Rico in-bond. 

Under 19 CFR 18, the in-bond process allows imported merchandise to be entered at one U.S. port of entry without appraisement or payment of duties and transported by a bonded carrier to another U.S. port of entry or other authorized destination provided all statutory and regulatory conditions are met.

At the destination port, the merchandise is entered for consumption or exported.  An in-bond application consists of a transportation entry and a manifest.

It is important that the bill of lading and electronic transmissions clearly indicate that the merchandise transported is of foreign origin so that it is not confused with domestic cargo, and it can be delivered to the importer’s final destination in full compliance with federal regulations.

The importer is responsible for presenting to U.S Customs and Border Protection an entry for consumption, duties, taxes and fees to obtain release before lifting all foreign cargo.

Likewise, cargo of foreign origin that is removed from a Free Zone, and immediately transported from a port in the U.S. mainland to Puerto Rico, is also subject to the same regulations and must obtain a release authorization before being delivered.

The importer who does not present a commercial entry to obtain the CBP release authorization is in violation of federal statutes and subject to penalties.

The CBP seeks to educate small and medium businesses on their compliance regarding importing and exporting into the U.S. Trade is an integral part of CBP’s mission; making America safer, stronger, more prosperous, and economically competitive.

Author Leida Colón is the CBP Assistant Director of Field Operations – Trade for Puerto Rico and the U.S. Virgin Islands.

To assist all parties in understanding these topics, CBP is providing guidance in the form of frequently asked questions. CBP will continual to update this document as necessary.

In Puerto Rico, importers and carriers are advised to contact the San Juan Trade Audit Team at 787-749-4588 or visit our page.

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This story was written by our staff based on a press release.

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