A Customs and Excise Bond is a guarantee which provides the relevant security to protect a government department, normally SARS, against the failure of an enterprise to pay taxes and customs duties.

The taxes and custom duties are duties incurred by an importer and/or exporter.

These duties are payable by the importer/exporter or by a clearing agent and are payable to SARS. However, at this point the entity responsible for payment is unlikely to have received payment from its clients, thereby creating potential cash flow problems. There is an answer.    

A simple solution

The government department will defer your payments up to a maximum of 51 days, provided you are able to produce a Customs and Excise Bond guaranteed by Coface South Africa. This deferment will take you closer to the time you can expect to be paid by your clients.

This bond protects the interests of the government department for outstanding customs and excise duties, while providing you with the necessary deferment needed to improve your liquidity management.

Examples of Bonds available

·         Duty Deferment Bonds

·         Rebate Bonds

·         Warehouse Bonds

·         Remover of Goods in Bond

·         Manufacturer for AGOA

Main features

·         Payment of Duty & VAT deferred.

·         Bond available on a 12-month ongoing facility basis.

·         A fully completed proposal form required.

·         Audited financial statements and up to date management accounts required.

·         A signed counter-indemnity required.

·         Invoice is payable prior to issue of the bond.

Benefits

·         Frees up liquidity.

·         Does not compromise bank overdraft facilities.

·         No collateral security required.

·         Straightforward solution with minimal administration.

·         Competitive pricing from an organisation that is an expert in international trading conditions.

·         Analytical underwriting based on a combination of internationally recognised techniques and a proven track record in the South African market.

·         An organisation that can satisfy both your bond and credit insurance requirements.