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Amity Institute of Competitive Intelligence & Strategic Management Page 1

AN EXPLORATORY STUDY ON

Bonded warehouses - features, operations, legal aspects, role in logistics

Submitted To: Submitted By:

Dr. J.P Saxena Priya Jain

MBA (CI &SM)

A0633511009

Amity Institute of Competitive Intelligence & Strategic Management

AMITY UNIVERSITY UTTAR PRADESH, SECTOR 125, NOIDA - 201303, INDIA

Tel:0120-2445252, 0120-4713600. Website:www.amity.edu


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Bonded warehouses - features, operations, legal aspects, role in logistics (Priya Jain)

Amity Institute Of Competitive Intelligence & Strategic Management Page 2

TABLE OF CONTENT

Learning Objectives 03

Introduction 05

Bonded Warehouses 05

Features of Bonded Warehouses 06

Operations of Bonded Warehouses... 07

Legal aspects of bonded warehouses 08

Role of Logistics in Bonded Warehouses 11

Detailed subject matter with tables, figures, photographs and examples 14

Applications 21

Advantages and disadvantages.. 22

Summary 24

Bibiliography. 26


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LEARNING OBJECTIVES

Importing goods from overseas can be challenging in many areas. One of those areas includes

the payment of duties on the imported goods. When items are brought into the United States, the

U.S. Customs office requires that the importer pay a duty, or tax, on the imported goods. The

items are stored in bonded warehouses until such time as the disposition is reached. There are

several possible results for removing the items, including export via ship or aircraft, duty

payment to release the goods for use in the United States and destruction of the imported items.

A business that imports goods regularly can save a great deal on operating costs by investing in

the construction or purchase of a bonded warehouse for their exclusive use. While the U.S.

Government owns and leases their own bonded warehouses, it is permissible for importers to be

bonded for their own facilities.

Primarily used by manufacturers, exporters, importers, wholesalers and transport businesses, a

warehouse refers to a commercial building that serves as the storage place for goods. These

warehouses are usually large plain buildings in industrial areas of cities and towns and are

equipped with loading docks, cranes and forklifts. Goods on which the duties are unpaid and

stored under agreement and surety ship are stored in bonded warehouses, however. Bonded

warehouses store goods which are under joint custody of the importer and the customs officer.

These bonded warehouses are usually managed by the state or by private enterprises, but with the

requirement to post customs bond with the government for the latter.

Goods that are being stored in the bonded warehouses are liable to duty and are lodged until the

duty has been paid. For importers, duties should be accomplished at the time of importation. The

system of bonded warehousing has several inconveniences such as the difficulty in finding

sureties on the part of the importers and the immediate selling of the goods in order to pay the

lump sum. Such condition has a trickledown effect on consumers since there will be a mark-up

on the prices of the goods. Realizing this matter, there will be resultant situation: smuggling and

low consumption because of high taxes on bonded warehouses. With the study of features,

operations, legal aspects, role in logistics in bonded warehousing.


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The main aim of this study is to investigate, evaluate and analyse the degree of efficiency and

effectiveness of bonded warehouses. In lieu with this, the research will seek to accomplish the

following specific objectives:

To explore the concept of bonded warehousing based on the advantages and

disadvantages of using them.

To determine the services that bonded warehouses provide business operators

(wholesalers, manufacturers, exporters and importers).

To study how bonded warehouses are managed and controlled based on identifying

the systems, techniques and processes in place.

To distinguish excise and taxing strategies and how these strategies affect the

business operators.

To understand the function of bonded warehouses in the global supply chain as a

value-adding activity.


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INTRODUCTION

Container Corporation Of India Ltd. says that,

The concept of 'bonded warehousing'was first tried out at Whitefield (Bangalore). The

importers could store cargo and effect partial releases thereby deferring duty payment to

Customs, and at the same time releasing the international (ISO) container in which the cargo is

imported.

Bonded warehousing offers a dual advantage to the importer. On the one hand, it allows the

deferral to duty payment, and at the same time, allows for cargo to be stored under the relatively

cheaper option of warehouse storage as opposed to holding on to an ISO container for which

dollar lease rentals accrue on the importer.

There is an increasing demand for bonded warehousing in all parts of the

country. CONCORhas a unique advantage in offering this service. Its warehouses are located in

close proximity to the sidings/ICDs where imports arrive in the first place. This makes bonding

of cargo a very cost effective option, as there are practically no transfer costs involved in the

movement of cargo from landing facility to a nominated bonded warehouse.

To tap into this highly lucrative segment of business, bonded warehousing facilities have already

been made operational by CONCORat its facilities at Tondiarpet (Chennai), Sanathnagar

(Secundrabad), NewMulund (Mumbai), Tughlakabad (New Delhi), Sabarmati (Ahmedabad),

Gwalior etc.

CONCORalso plans to convert existing facilities or create new ones in all such business centers

where required.

BONDED WAREHOUSE

A Bonded warehouseis building or other secured areas in which dutiable goods may be stored,

manipulated, or undergoes manufacturing operations without payment of duty. 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.


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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. 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.

FEATURES OF BONDED WAREHOUSES

This type of warehouse is a safe option for starters of the business; this is a bonded warehouse

that means the contract of this warehouse controlled by a bond for a time period between the

importer, manufacturer or exporter with the owner of warehouse. This type of warehouse will be

very clean, maintained and very professional.

Basic advantage of a Bonded warehouse is properly licensed to keep all types of imported

goods under the government regulation.

There is no need for Manufacturer, exporter or Importer to invest a big capital on stock,

because the stocks will be safe because it has been maintained by contract for a period of

time, its the duty of authorities to take full responsibility of the goods stored in the

warehouse.


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State in art infrastructure facilities in warehouse, for example if you have agro based food

product, you need to maintain certain amount of temperature to keep those food products

fresh. You need to have certain standards of cooling and heating facility in the

warehouse; this kind of bonded warehouse has those features.

You can keep duty paid goods in warehouse without no hassles.

You can apply for a loan and you can pledge even the goods you kept in warehouse.

Owner of the warehouse takes full responsibility of the goods, no need to worry about

whether things might get lost.

Reduce in capital and also save money in expenses, if manufacturer want to re-export it

to another country.

OPERATIONS OF BONDED WAREHOUSES

Handling the A, C, D, and Es of customs and bonded warehousing

Type A, C, D, and E tax warehouses, AEO, IPR, OPR and PCC operations its an alphabet

soup of regulations out there if you handle excise or customs goods. What are importers and

exporters to do?

Bonded Warehousing enables efficient, compliant operation of a wide variety of import and

export tax-advantaged facilities. So whether you handle excise goods, such as beer, wine, spirits

or tobacco, or customs goods like electronics, textiles, consumer products or pharmaceuticals,

you will have the right tools and controls to make your operations more efficient and compliant.

Some of the alphabet soup of regulations supported includes:

Authorized Economic Operation (AEO)

Type A, C, D and E tax warehousing

IPR, and PCC operations

National Export System (NES)

Excise Movement and Control System (EMCS)


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Alcohol and Tobacco Warehouse Declarations (ATWD)

CFSP electronics customs clearance

Electronic import / export reporting

EU Customs Security Program

In addition, Customs & Bonded Warehousing supports bulk liquid operations as well as dry

goods, and manages value-added services such as kitting under Bond. It comes with a full suite

of reports to support stock balancing and rotation, item level movements, duty analysis and stock

valuations.

Customs & Bonded Warehousing supports the complex needs of WMS Bonded operations that

require a comprehensive, functionally rich Warehouse Management system with a high degree of

configurability and flexibility. This enables you to improve methodologies and efficiency,

increase profits, and provide a high level of confidence and operational integrity to their

customers.

LEGAL ASPECTS OF BONDED WAREHOUSES

With over 300 ports of entry in the United States, including the Virgin Islands and Puerto Rico,

many businesses find establishing their own bonded warehouse(s) to be advantageous.

To do so, a lengthy application must be completed and filed with the local ports U.S. Customs

director. Information must be provided that gives detailed information about the physical

features of the warehouse site (including a blueprint), as well as giving its location, a certificate

of fire insurability by an independent underwriter, and the intended warehouse classification.

The U.S. government recognizes eleven types of bonded warehouses, each defined within its own

class. (These are listed below, as they are described under federal law.)


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Bonded Warehouse Application Requirements Vary According to Classification

All applications for warehouses except Class 2 or Class 7 facilities must reveal if they will be

operated as public bonded warehouses or used solely by the applicant. Private use will require

that the applicant report to the federal officials not only what type of merchandise will be stored

in its private warehouse, but the maximum duties and taxes that will be due on the goods at any

set time.

Customs officials can also require identification of the applicants personnel, including not only

their names and personal addresses, but their fingerprints, as well. The list can require officers

and principals of the company along with all of its employees. This is true, regardless of the

warehouses intended classification.

Duty free shopshave special requirements. Designated as a Class 9 Bonded Warehouse under

federal law, duty free shop applicants must provide Customs officials with information regarding

the location, exit-points, record keeping systems, and confirmation of local government

approvals of the facility.

List of Bonded Warehouse Classifications

According to 19 C.F.R. 19.1, bonded warehouses are classified as:

(1) Class 1.Premises that may be owned or leased by the Government, when the exigencies of

the service as determined by the port director so require, and used for the storage of merchandise

undergoing examination by Customs, under seizure, or pending final release from Customs

custody. Merchandise will be stored in such premises only at Customs direction and will be held

under general order.

(2) Class 2.Importers' private bonded warehouses used exclusively for the storage of

merchandise belonging or consigned to the proprietor thereof. A warehouse of class 4 or 5 may

be bonded exclusively for the storage of goods imported by the proprietor thereof, in which case

it shall be known as a private bonded warehouse.

(3) Class 3.Public bonded warehouses used exclusively for the storage of imported merchandise.


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(4) Class 4. Bonded yards or sheds for the storage of heavy and bulky imported merchandise;

stables, feeding pens, corrals, or other similar buildings or limited enclosures for the storage of

imported animals; and tanks for the storage of imported liquid merchandise in bulk. If the port

director deems it necessary, the yards shall be enclosed by substantial fences with entrances and

exit gates capable of being secured by the proprietor's locks. The inlets and outlets to tanks shall

be secured by means of seals or the proprietor's locks.

(5) Class 5. Bonded bins or parts of buildings or of elevators to be used for the storage of grain.

The bonded portions shall be effectively separated from the rest of the building.

(6) Class 6. Warehouses for the manufacture in bond, solely for exportation, of articles made in

whole or in part of imported materials or of materials subject to internal-revenue tax; and for the

manufacture for home consumption or exportation of cigars in whole of tobacco imported from

one country.

(7) Class 7. Warehouses bonded for smelting and refining imported metal-bearing materials for

exportation or domestic consumption.

(8) Class 8. Bonded warehouses established for the purpose of cleaning, sorting, repacking, or

otherwise changing in condition, but not manufacturing, imported merchandise, under Customs

supervision and at the expense of the proprietor.

(9) Class 9. Bonded warehouse, known as duty-free stores, used for selling, for use outside the

Customs territory, conditionally duty-free merchandise owned or sold by the proprietor and

delivered from the Class 9 warehouse to an airport or other exit point for exportation by, or on

behalf of, individuals departing from the Customs territory for destinations other than foreign

trade zones. Pursuant to 19 U.S.C. 1555(b)(8)(C), Customs territory, for purposes of duty-free

stores, means the Customs territory of the U.S. as defined in 101.1(e) of this chapter, and foreign

trade zones (see part 146 of this chapter). All distribution warehouses used exclusively toprovide individual duty-free sales locations and storage cribs with conditionally duty-free

merchandise are also Class 9 warehouses.

(10) [Reserved]


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(11) Class 11. Bonded warehouses, known as general order warehouses, established for the

storage and disposition exclusively of general order merchandise.

ROLE OF LOGISTICS IN BONDED WAREHOUSES

Logistics is the art and science of management, engineering and technical activities concerned

with requirements, design and supplying, maintaining resources to support objectives, plans and

operation.

It is important to recognize the importance of a dynamic balance between the minute details and

the main elements involved in a product. The Role of Logistics is to maintain that balance. Once

the firm realizes the importance of logistics it is necessary that the firm make full and efficient

use of logistics. The first step is to create a buyer value for the customer and a strategic value for

the firm.

The customer is the most important asset for a company. He drives the entire supply chain

including manufacturing, marketing and logistics. Hence it is important for a firm to have a clear

understanding of what the customer demands and to keep up to the customers expectations. Once

a company has a clear understanding of its customers requirements it must device a strategy on

how to use logistics to achieve it. This means that the company has to have a clear understanding

or assessment of companys strategic direction.

Now lets take a look at the various steps involved in a logistics strategy development and

planning process.

Visioning: this includes the systematic development of an organizational consensus regarding the

key inputs to the logistics planning process as well as identification of the potential alternative

logistics approaches. This is an important step for the following reasons:

Helps to define a strategic direction to the company and also to get a clear understanding

the role of logistics in it.

Get a clear idea of the requirements of the various segments of customers.

Have a look at the various factors that would affect the strategy of the company.


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Define alternative strategies and also the scope of the planning effort.

Strategic analysis: this involves taking a look at the various components involved in the process

and selecting the best logistics process among the alternatives. These components, which are to

be reviewed, are revealed during he first step. This may include revamping the entire process to

assessing how a single component can be used more effectively.

Planning: this involves the assembling of a plan that outlines the mission and goals for the

logistics function and the programs and activities to achieve these goals. Logistics planning is an

iterative process. The plans have to be redefined every year to improve the quality of

performance.

Managing change: this involves effective management to implement enhanced ways of

conducting business. The management should keeping changing the plans in accordance with the

change in the market and also coach the organization to effectively embrace this change.

C. Current L ogistics Related Issues

There are several factors that affect logistics. These issues need to be anticipated, prepared for

and taken advantage of for a company tobe successful in todays market. They are

External:

Globalization

Technology

Workforce 2000

challenging nature of the work force

Environmental concerns

Internal:

Customer service and quality

Third party networks


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Supply chain management

Changes in management and organization style

Listed below are some of the steps that could be followed to mitigate the above mentioned

issues:

Performance:

Better service for customers

Improved productivity

Assess just in time and quick response needs

System structure:

Better relationship with vendors, customers and third parties to more effectively manage

the supply chain

Better relationship within and across the organization

Technology integration:

Better information systems that connect functions and organizations

Combine information and material handling systems for increased efficiency and

effectiveness.


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DETAILED SUBJECT MATTER WITH TABLES, FIGURES,

PHOTOGRAPHS AND EXAMPLES

The Table below summarizes the position of the licensed bonded warehouses as at April 2006

Table 1: Summary of Bonded Warehouses, Bangladesh April 2006

License Type Total Active Non

Active

Suspended

(a)

Non

Active

Para 202

(a)

Non

Active

Cancelled

Status

Not

known

(b)

Garments

Bond

3,510 2,553 813 106 8 30

Deemed

Bond

1,012 798 157 29 2 26

Export

Processing

Zone

77 75 0 1 0 1

Home

Consumption

96 81 11 2 0 2

Privileged

Bond

14 13 1 0 0 0

Supervised

Bond

51 37 11 1 2 0

4,760 3,557 993 139 12 59

Notes: This Table was provided by CBC. It replaces the information contained in Table


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25 of Bangladesh Administrative Barriers Review, March 2006

(a) The reason for the large number of non-active licenses is that these bonded

warehouses have outstanding claims made by the CBC. The CBC cannot collect these

outstanding bills, but consider they may be in a better position legally if the license is

suspended rather than cancelled

(b) The CBC has no information on the location of these warehouses. They were

licensed by staff who no longer work at the CBC

The Customs Act 1969 (Refer Sections 13, 32, 84-119,156 and 202) and SRO 153 (03/08/1999)

are the main sources of legislation relating to the Bonded Warehouses.

The bulk of staff resources are spent administering the current stock of bonded warehouses rather

than on new license applications

Any application must first be approved by BOI. An application can then be made by the CBC.

The application requires 25 to 28 supporting documents including 20 from 12 different

institutions.

Upon receipt of a license application, the license division checks the submitted documents and

opens a file against the application and forwards it to the License Committee. The Committee

forms an examination team consisting of one or two inspectors and one superintendent. Usually

the applicant is responsible for making arrangements and providing transportation for the

examination team. The examination team carries out a physical inspection and submits a report

of their findings to the inspection committee within seven to fifteen days.

The license committee verifies the inspection report with the submitted documents and forwards

the file with their recommendation to the Commissioner. Based on the recommendation of the

license committee, the Commissioner makes the final decision regarding the issuance of the

license. If approved for a license, the applicant has to appear in person before the issuing

authority to sign a bond against their license. (Note: the CBC has had great difficulty enforcing

these bonds. This is the major reason for the large number of suspended and para 202 licenses)


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Based on a survey of 22 companies in Dhaka that had recently received a license1, the average

time taken to acquire a bonded warehouse license was 226 days

Table 1: Time Required to Obtain a New Bonded Warehouse License, 2006.

Source: Administrative Barriers Review April 2006

According to the respondents in the Administrative Barriers Review survey, it costs an average

of Tk. 408,608 to obtain a bonded warehouse license. Of this, 94% of the cost was related to

expenses at the CBC. A further breakdown of costs reveal that 60% of the cost related to BOI,

and 75% of the cost related to CBC represented gifts/bribes.

As it exists the bonded warehouse licensing process is extremely cost prohibitive for businesses,

both in terms of time and money. According to the survey respondents, on average it took longer

than four months and costs more than Tk. 400,000. The process requires duplication of effort,

particularly at BOI, which on average adds 25 days to the process with little justification and

almost no value addition. In addition, while BOI does not charge a processing fee for its

recommendation process, it requires that the service is offered only to businesses registered with

BOI, which itself involves a cost and takes an additional one month to process the registration.

Peru export boom

Despite lower production, Peru managed to export more fishmeal in 2008. This was mainly

because the country managed to reduce inventories created in 2007 as a result of sky high prices

1Work conducted for the Bangladesh Administrative Barriers Review, March 2006

umber of

working days

Agency

BOI

CBC

Total

Application

and

Preparation-

BOI

and

Preparation

CBC

Application

and

Preparation

Total

Average 25 108 133 59 167 226

Minimum 2 7 9 13 27 40

Maxximum 60 280 340 105 480 585


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and consumer resistance. Total Peruvian fishmeal exports reached 1.56 million tonnes last year,

24% ahead of the 2007 result. Main importing country continued to be China with a 53% share

of Peruvian exports of fishmeal. Germany is a distant second, importing some 190 000 tonnes of

fishmeal in 2008. However, while Peru export figure show an increase, German import statistics

register a decline; this might be explained by the retention of fishmeal in bonded warehouses, a

common practice.

At present, most of the fishmeal business in Peru is betting on the new fishing season as

remaining stocks from the last fishing season are very small. Catch quota for anchovy was fixedat 3.5 million tonnes. However, the fishery was immediately closed in some areas, as there was a

strong presence of juveniles in the catch. Reports in the trade are that bookings for the second

quarter of 2009 are very good, which should lead to higher prices in the next quarter.


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German imports of fishmeal were down in 2008, as prices were considered too high, and the feed

producing industry turned to different raw material. Peru continues to be the main exported to the

German market with over 80% market share.

The impact of the economic crisis on Chinese consumers is starting to be felt. As industrial

complexes in the southern part of the country start to close down, the migrant workers are

moving back to their home villages. Pork consumption is declining as a result, leading to falling

prices. The swine flu also influence the Chinese consumers negatively, and pork prices in China

are in free fall. The situation has led the government to consider curbing pork imports, increasing

exports and providing subsidies to farmers and meat processors. At present, demand for fishmeal

for feed to the pork weaning industry is declining.


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ADVANTAGE AND DISADVANTAGE

Advantages of Bonded Warehouse

Basic advantage of a Bonded warehouse is properly licensed to keep all types of imported

goods under the government regulation.

There is no need for Manufacturer, exporter or Importer to invest a big capital on stock,

because the stocks will be safe because it has been maintained by contract for a period of

time, its the duty of authorities to take full responsibility of the goods stored in the

warehouse.

State in art infrastructure facilities in warehouse, for example if you have agro based food

product, you need to maintain certain amount of temperature to keep those food products

fresh. You need to have certain standards of cooling and heating facility in the

warehouse, these kind of bonded warehouse has those features.

You can keep duty paid goods in warehouse without no hassles.

You can apply for a loan and you can pledge even the goods you kept in warehouse.

Owner of the warehouse takes full responsibility of the goods , no need to worry about

whether things might get lost.

Reduce in capital and also save money in expenses, if manufacturer want to re-export it

to another country.

By storing goods in a bonded warehouse, traders can enjoy substantial cost savings

through the deferment of payment of tax if the goods are not immediately required when

they arrive in the destination port.

Duty need not be paid on imported goods which are intended for reexport. Duty need not be paid on goods which are produced in a Free Industrial Zone pending

export if they are stored in a bonded warehouse.


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Disadvantages of Bonded Warehouse

The main disadvantage would be the risk of duty on a certain products being increased while the

goods are in the warehouse.

The following conditions apply:

The duty rate applicable at the time of withdrawal (UNLESS BEING EXPORTED

FROM THE WAREHOUSE) is the rate in force at that time and not the rate that was

applicable at the time of warehousing. In other words if the duty is increased by

Government during the time the goods are warehoused then the increase will apply. By

the same token, if the duty is reduced, the lower rate will apply.

Only dutiable goods may be warehoused however both duty and VAT is then deferred

while in the warehouse. Goods on which VAT only is payable may not be placed in a

Bonded Warehouse.

If, while in the warehouse, duty is totally removed by Government from a certain

product, then the goods must be removed immediately from the warehouse and the VAT

applicable must be paid.

All goods must be removed and duty paid after the two year period is expired.

No goods may be removed from the bonded warehouse WITHOUT PROPER

CLEARANCE AND PAYMENT OF DUTIES AND VAT HAVING TAKEN PLACE.


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SUMMARY

As more customs bonded warehouses spring up around the globe, exporters are in a good

position to benefit from this counterparty performance and credit risk management tool.

Licensed by a countrys local customs authority for temporary storage or processing of goods on

which no duties are paid until the goods are cleared for internal consumption, customs bonded

warehouses provide services such as deep freeze or bulk liquid storage, commodity processing

and coordination with onward transportation.

The evaluation study evaluated the sufferance and customs bonded warehouses only; therefore,

only these warehouses are discussed in detail in this report.

Exhibit 3: CBSA-Regulated Warehouses, by Category, Operation and Use.

Warehouse

CategoryOperation Use

Sufferance

warehouses

Privately owned and operated,

licensed by the CBSA. 14 sub-types.

Temporary (40-day) storage of

imported goods pending CBSA

release.

Customs

bonded

warehouses

Privately owned and operated,

licensed by the CBSA. Part of Duty

Deferral Program. Two types:

private (for a company's own use) or

public (offer services to clients).

Imported goods can be stored

duty and tax free (generally for

up to four years) until they are

exported or consumed

domestically.

Queen's

warehouses

CBSA operated Storage and disposal of

unclaimed, abandoned, detained

and seized goods.

Highway CBSA operated For examination of unreleased


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frontier

examining

warehouses

imports at highway POEs.

Sufferance and customs bonded warehouses are operated by the private sector under CBSA

licence, while Queen's and highway frontier examining warehouses are operated by the CBSA.

Warehouse licences are issued under the authority of the Customs Act and/or the Customs Tariff,

and the operation of the warehouse facilities must adhere to a number of CBSA memoranda and

warehouse-specific regulations and policies.Both the Customs Actand the CBSA Act grant border

services officers (BSOs) open access to all warehouse facilities and authorize them to examine

and seize goods.

Customs Bonded Warehouses

Customs bonded warehouses are part of the larger CBSA Duty Deferral Program. The various

programs under the Duty Deferral Program umbrella are intended to improve the

competitiveness of Canadian businesses by offering relief from payment of most duties and some

taxes on imported goods ultimately destined for export.Customs bonded warehouses provide for

longer-term (generally up to four years) tax- and duty-free storage of goods. Operators are

permitted to conduct limited processing of goods (allowable process) under the terms of

the Customs Bonded Warehouse Regulations.

Customs bonded warehouse operators must provide a security (bond) in the amount of 60

percent of duties and taxes that would otherwise be payable at any time in the year following the

issuance of the licence'. This security bond ranges from $10,000 to $500,000 and is to be

reviewed at least once per year by the CBSA, and may be increased or decreased to reflect the

changing value of in-bond goods stored. In addition, operators pay an annual licensing fee based

on the value of their financial security, ranging from $100 to $5,000. All customs bonded

warehouses are privately owned and operated, and used either exclusively by a single company

or by multiple companies where users are charged storage and handling fees.


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BIBILIOGRAPHY

http://sampleresearchproposals.blogspot.in/2008/07/evaluation-of-efficiency-and.html

http://www.fuerstlaw.com/practice-areas/bonded-warehouse-applications

http://www.concorindia.com/bonded_services.asp

http://www.tamadam.com/bondedbenefits.html

http://www.uh.edu/~lcr3600/simulation/logistics.html

http://www.panoramaacuicola.com/reportes_de_mercado/2009/05/11/fishmeal_market_r

eport_may_2009.html

http://www.stockmarketsreview.com/extras/returning_focus_to_china_20110325_124026

http://wiki.answers.com/Q/How_do_you_apply_to_become_a_bonded_warehouse#ixzz2

5bj0QmqI

http://browseme.info/bonded_warehouse.asp

http://www.tamadam.com/bondedbenefits.html

http://www.cbsa-asfc.gc.ca/agency-agence/reports-rapports/ae-ve/2010/lwp-pvea-

eng.html#s1x1

http://law.justia.com/cfr/title19/19-2.0.1.1.4.2.html

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