Bond

A surety bond is a contract whereby one party, the surety, guarantees the performance of a second party, the principal, for the benefit of a third party, the obligee (the Federal government, in the case of Customs bonds). Should the principal fail to perform his agreement with the obligee, the surety will be required to pay liquidated damages, and will have the right to obtain reimbursement from the defaulting principal. “Customs bonds” – all bonds required to be given under Customs laws or regulations shall be known as Customs bonds. (19 CFR §113.4(a))