Customs Bonds – benefits, challenges and opportunities – by Marina Stefan
A business breakfast hosted by CertAsig and Deloitte Romania:
Customs Bonds, an effective alternative to bank letters of guarantees
Insurance specialists from CertAsig and senior financial consultants from Deloitte Romania discussed a long-expected event on the insurance market and of high interest to logistic companies, operations and import departments of commercial companies. The presenters and audience proactively debated the benefits, challenges and opportunities of Customs Bonds. The event took place at InterContinental Hotel, bringing together guests from import-export companies, transport companies, as well as customs officers and insurance broker partners.
On a market dominated by legislative changes, specialists on the insurance market of Contract and Customs Bonds need to stay informed and connected. Nowadays, it is known that customs legislation allows economic operators to resort to a new form of customs guarantee: a policy issued by insurance companies established within the European Union. This represents a huge opportunity. The panel and guests shared their opinions, offering answers regarding the Customs Bond, while emphasising this instrument’s benefits compared to bank letters of guarantees.
The event was opened by James Grindley – CEO CertAsig: The idea of this product came from abroad. It’s a very well-known product if we’re talking about the American, English, or French markets. In Romania, CertAsig launched this product 4 years ago. So far, CertAsig – leader on the bond insurance market – has already subscribed around 2000-3000 Customs Bonds. So our clients already enjoy the benefits of the product.
During the presentation, Mihai Petre – Senior Manager, Customs & Global Trade and Cosmin Dinca – Senior Consultant, Customs & Global Trade at Deloitte Romania provided pragmatic information on topics such as: when you need a Custom Bond, customs regimes and procedures that are subjected to customs bond policy, types of customs bonds, single entry guarantee or in the form of transit security guarantee, global guarantee / discounts, customs bonds in the form of a guarantor’s commitment, commitment forms to be used.
Moreover, Sinziana Muscalu – Chief Bond Underwriter, CertAsig highlighted that: At the end of May 2016, when the EU Customs Code became enforceable, it was clearly stated that the role of guarantor may be fulfilled by both banks and insurance companies. It is worth mentioning that this does not require a prior approval by the customs authorities.
Sinziana Muscalu also listed the main advantages of the Customs Bond as compared to Bank Letters of Guarantees. The benefits mentioned include: the possibility for the insurer to analyse the risk, both financially and operationally, technically and commercially; autonomy over the company’s funds; different collateral options (80% promissory notes) or even the option of a solution involving no collateral; the insured is protected against Authority’s erroneous claims; the process is quick as CertAsig can issue a bond within a maximum of one day. Finally, Sinziana Muscalu underlined several key aspects: Customs Bond, in the form of a commitment issued by CertAsig, may be used in any special customs regimes / procedures; using customs bond insurance is beneficial for business; the amount granted is influenced by the transparency of the data provided, and the quality of the collateral influences price.
CertAsig is a leader on the guarantee insurance market, offering contract bonds since 2009 and customs bonds since 2014. In the future, the company aims to continue building long-term partnerships, while bringing its clients solutions tailored to their specific needs. The CertAsig Custom Bond is now a viable option for our clients following the recent legislative changes.