A Financial Guarantee (or Individual Financial Guarantee) is a type of guarantee provided by a financial institution (such as a bank or an insurance company) to ensure payment of customs duties. This form of guarantee is used in customs clearance to reduce the need for actual cash payment of customs duties during the importation of goods.
Typically, a financial guarantee allows businesses or individuals to ensure the payment of customs duties when they cannot or prefer not to pay them in cash. Instead, they obtain a financial guarantee from a financial institution that agrees to pay the customs duties in case the obligated party fails to make the payment.
A Financial Guarantee can be issued in the form of a bank guarantee or an insurance policy. It allows businesses to avoid the necessity of having cash on hand or making direct payments of customs duties during the importation of goods, thus ensuring quicker and more efficient customs clearance.
If issues arise with the payment of customs duties, the customs authorities can turn to the financial institution that issued the individual financial guarantee to seek compensation. In turn, the financial institution will pay the customs duties in accordance with the terms of the guarantee.
7PORT can provide consultations and assistance in obtaining a financial guarantee to ensure payment of customs duties. Our experts will help you understand the requirements and procedures necessary for obtaining a financial guarantee and provide guidance throughout the process of obtaining it.
