Customs Bonded Warehouse: Classes, 5-Year Limit, Duty, Manipulation

Key Points

• A customs bonded warehouse lets imported merchandise be stored under bond without payment of duty, and goods may stay for up to five years from the date of importation.
• Goods enter on a warehouse entry (entry type 21) and leave for domestic use on a withdrawal for consumption (entry type 31), at which point duty is paid.
• Duty is owed at the rate in effect on the date of withdrawal for consumption, not the rate on the date of import.
• Merchandise withdrawn for export pays no duty.
• Cleaning, sorting, and repacking can be done under CBP supervision with CBP Form 3499, but manufacturing is a separate warehouse class.

On this page

1. What a customs bonded warehouse is
2. Classes of bonded warehouse
3. The five-year storage limit and the entry flow
4. Duty at withdrawal
5. Manipulation under CBP supervision
6. Common uses of bonded warehouses
7. What importers should do
8. Key references

The links in this article go to the primary documents: the statutes, regulations, and official CBP pages themselves. Read the source.

A customs bonded warehouse is a building, or part of one, where imported merchandise is stored under bond without paying duty. The goods can stay up to five years from the date of importation. Duty is paid only when the goods are withdrawn for consumption, at the rate in effect on the withdrawal date, and goods withdrawn for export pay no duty. The governing law is 19 U.S.C. 1555 and 19 U.S.C. 1557, with the operating rules in 19 CFR part 19.

What a customs bonded warehouse is

The warehouse itself is secured by a bond, and the proprietor is responsible to CBP for the goods held inside. Merchandise placed there has been imported, but duty is deferred. The goods remain under CBP control until they are withdrawn, exported, or otherwise lawfully dealt with.

Two parties matter. The importer of record files the entries and owes the duty. The proprietor runs the facility and must meet CBP's recordkeeping and security requirements. For background on who qualifies as importer of record, see Importer of Record: Owner, Purchaser, Broker, or Non-Resident. For the proprietor's side of the relationship, see CBP Form 300 and the bonded warehouse proprietor's submission.

Classes of bonded warehouse

19 CFR 19.1, within part 19, sorts bonded warehouses into classes by who owns them and what they are used for. In plain terms:

• Government-owned: premises owned or leased by the government and used to store merchandise under CBP control.
• Private, for the proprietor's own goods: a facility used only to store the proprietor's own imported merchandise.
• Public, for general storage: a facility that stores merchandise for various importers and owners.
• Special classes: facilities approved for named uses, including manipulation, manufacturing, duty-free stores, and other uses listed in the regulation.

The class determines what activity is allowed. A public warehouse that is not approved for manufacturing, for example, cannot be used to make products from stored goods.

The five-year storage limit and the entry flow

Five years from importation

Under 19 U.S.C. 1557, merchandise may remain in a bonded warehouse for up to five years from the date of importation. The clock runs from importation, not from the day the goods physically arrive at the warehouse, so a delay in moving goods in uses up part of the period. Track each lot's deadline individually and plan withdrawals or exports well before it ends. The statute and regulations control what happens to goods left past the limit.

Entry types 21 and 31

• Warehouse entry (entry type 21): filed to place merchandise into the warehouse. No duty is paid at this stage.
• Withdrawal for consumption (entry type 31): filed when goods leave the warehouse for the U.S. market. Duty is paid here.

Each withdrawal ties back to the original warehouse entry. Keep the entry numbers organized so the inventory records and the CBP records match. For how entry numbers are built, see Entry Number Format: How the 11-Character CBP Entry Number Works.

Duty at withdrawal

Duty is assessed when the merchandise is withdrawn for consumption, at the rate in effect on the date of withdrawal. This has two practical effects:

• If the rate goes down while goods are stored, the importer benefits.
• If the rate goes up, the importer pays the higher rate. Storage does not lock in the import-date rate.

Merchandise withdrawn for export pays no duty. That makes the warehouse useful for goods that may be re-exported, since the importer avoids paying duty on goods that never enter U.S. commerce.

Because the rate on the withdrawal date applies, check the applicable tariff provisions at each withdrawal rather than relying on what applied at import. Each additional-duty program sets its own terms, so read the program text before assuming how it treats warehouse goods.

Manipulation under CBP supervision

Goods in a bonded warehouse can be handled in limited ways while still under bond. Manipulation means operations such as:

• Cleaning
• Sorting
• Repacking

These operations happen under CBP supervision, and the proprietor applies on CBP Form 3499. The same form covers related requests such as examining, sampling, and transferring goods. See CBP Form 3499: application, approval, and what you can do with it for the process.

Manipulation is not manufacturing. If the activity creates a new article, it belongs in a warehouse approved for manufacturing, which is a separate special class. Confirm that the facility's class covers the planned activity before the work begins.

Common uses of bonded warehouses

• Deferring duty until sale: the importer pays duty only as goods are withdrawn, which can improve cash flow for slow-moving inventory.
• Re-export without duty: goods withdrawn for export owe no duty.
• Holding quota goods until a period opens: merchandise subject to a quota can wait in the warehouse until the quota period opens, then be withdrawn. See Tariff Rate Quota: In-Quota vs Over-Quota Rates and Bulletins for how opening timing affects the rate.

What importers should do

• Log the importation date for every warehouse entry and set internal alerts well ahead of the five-year limit.
• Recheck classification and applicable duty provisions at each withdrawal for consumption, since the withdrawal-date rate governs.
• Confirm the warehouse's class before planning any manipulation or manufacturing, and file CBP Form 3499 before work starts.
• Reconcile each type 31 withdrawal against its type 21 warehouse entry and the proprietor's inventory records.

Key references

• 19 U.S.C. 1555: statute on bonded warehouses and their classification.
• 19 U.S.C. 1557: statute on withdrawal, storage period, and handling of warehoused merchandise.
• 19 CFR part 19: CBP regulations on customs warehouses, including the classes in 19 CFR 19.1.
• CBP Form 3499 guide: application and approval to manipulate, examine, sample, or transfer warehoused goods.
• CBP Form 300 guide: the bonded warehouse proprietor's submission.