Surety Bonds for Foreign Trade (Import & Export)
Importers and exporters use surety bonds to defer customs duties, protect prepayments to overseas suppliers, and secure supply contracts — without tying up cash with customs or counterparties.
Importers and exporters use customs bonds (garantia aduaneira) to defer or secure duties before Brazil's Federal Revenue, advance payment bonds to protect prepayments to overseas suppliers, and performance bonds on supply contracts — replacing the cash tied up with customs or counterparties with an insurance policy.
Key facts
- Customs bond: Accepted by Brazil's Federal Revenue to suspend/defer duties under regimes such as drawback, without a cash deposit at customs.
- Prepayment to overseas supplier: The advance payment bond refunds the prepaid amount if the overseas supplier fails to deliver the order.
- Supply contracts: The performance bond assures the buyer that delivery will follow the import/export contract.
- Benefit: Frees cash and the bank credit line — capital stays available for the operation instead of being locked as collateral.
Guarantee by foreign-trade need
| Guarantee | Use case | Who is protected | Typical cost |
|---|---|---|---|
| Customs bond | Suspend/defer import duties (e.g. drawback, bonded warehouse) | Federal Revenue / customs | ~1% to 5% p.a. |
| Advance payment | Prepayment to an overseas supplier | Importer (buyer) | ~1% to 5% p.a. |
| Performance | Import/export supply contract | Buyer / contracting party | ~1% to 5% p.a. |
Customs bonds and the Federal Revenue
A customs bond (garantia aduaneira — see customs bond) lets the importer suspend or defer the federal duties charged on incoming goods (import tax, IPI, PIS/Cofins) instead of tying up cash as a deposit or collateral with customs. It is widely used under special regimes such as drawback, industrial bonded warehousing and temporary admission.
Brazil\'s Federal Revenue accepts the surety policy as a way to secure these duties: the insurer commits to paying if the tax obligation is not met (for example, if the goods are not re-exported within the regime). This frees up working capital that would otherwise be blocked until the customs regime is closed.
In practice, the importer registers the bond in SISCOMEX/DUIMP with the policy number, and the goods are cleared without paying the duty upfront — reducing the financial cost of the import operation.
Prepayments to overseas suppliers
Many imports require a prepayment to the foreign supplier — partial or full — before shipment. That prepayment is exposed: if the supplier fails to produce, ship, or goes bankrupt, the importer can lose the prepaid amount without receiving the goods.
The advance payment bond (advance payment bond) protects exactly this risk. The insurer refunds the importer for the advanced amount if the overseas supplier breaches the delivery obligation, within the policy terms.
The exact coverage terms — covered events, term, step-down as delivery progresses — are defined in the policy wording. It is worth reviewing the advance payment bond wording to understand what triggers payment and when the guarantee is released.
Supply contracts
Beyond the customs flow and the prepayment, international supply contracts — long-term or high-value — often require a performance guarantee to assure delivery as agreed (term, quantity, specification).
The performance bond covers this risk: if the supplier (exporter) fails to perform the supply contract, the insurer indemnifies the buyer up to the guaranteed limit. It is the same logic as domestic contractual guarantees, applied to foreign trade.
For the exporter, offering a performance bond to a foreign buyer is a competitive edge: it signals solidity and reduces the demand for cash guarantees in the negotiation.
How to arrange it
It starts with risk analysis: the insurer assesses the company profile, the foreign-trade operation, and the beneficiary of the guarantee (Federal Revenue, importer, or buyer). Corporate and financial documentation, plus the contract/regime behind the guarantee, are the basis of the analysis.
Once the guarantee type (customs, advance payment, or performance), amount and term are set, the policy is issued — usually within a few business days. For a customs bond, the policy number is then registered in the Federal Revenue system.
ERGO specializes in surety bonds and structures the right modality for each stage of your import or export operation. Request a quote for the specific operation and get the analysis of the appropriate guarantee.
Frequently asked questions
Does Brazil's Federal Revenue accept a customs bond?
Yes. The Federal Revenue accepts the surety policy (customs bond / garantia aduaneira) to suspend or defer duties under regimes such as drawback, bonded warehousing and temporary admission, in place of a cash deposit. The policy number is registered in SISCOMEX/DUIMP.
How do I secure a prepayment to a foreign supplier?
With an advance payment bond. The insurer refunds the importer for the prepaid amount if the overseas supplier fails to deliver, per the events and terms defined in the policy wording.
How much does a foreign-trade guarantee cost?
The premium usually ranges from 1% to 5% per year on the guaranteed amount, depending on the modality (customs, advance payment, or performance), the term, the amount, and the company's risk analysis. Customs bonds tend to sit at the lower end.
Does a customs bond free up my working capital?
Yes. Instead of tying up cash as a deposit or collateral with customs, the policy takes on the commitment before the Federal Revenue. The capital that would be blocked stays available for the company's operation.
Is a performance bond useful for exports?
Yes. The performance bond assures the foreign buyer that the exporter will perform the supply contract (term, quantity, specification). It is a competitive edge in international negotiations.
How long does it take to issue the guarantee?
After risk analysis and documentation, the policy is usually issued within a few business days. For a customs bond, the policy number must also be registered in the Federal Revenue system before clearance.
Need a guarantee to import or export?
ERGO structures customs, advance payment, and performance guarantees for your foreign-trade operation — freeing your cash and your bank credit line.