Principal (Customs Bond)

The Principal is the party named on a customs bond as the obligor — the party whose performance the surety guarantees to CBP. In nearly all import bonds, the principal is the importer of record, though other principals exist for specialized bonds:

• Importer/broker bond (Activity Code 1) — Principal is the importer of record
• Custodian bond (Activity Code 2) — Principal is the bonded warehouse operator, container freight station, foreign trade zone operator, or in-bond carrier
• International carrier bond (Activity Code 3) — Principal is the ocean, air, or rail carrier
• Foreign trade zone bond (Activity Code 4) — Principal is the FTZ operator

The principal is contractually obligated to:

1. Pay all duties, taxes, and fees within the prescribed deadlines
2. Maintain compliance with all CBP regulations, including filing accurate entries, producing records on demand, and responding to CBP inquiries
3. Reimburse the surety for any payments made to CBP on the principal's behalf, plus interest and collection costs

If the principal fails to perform, CBP can make a demand on the surety, and the bond's penal sum (face value) is the maximum the surety must pay. The principal remains liable to CBP for any amount exceeding the bond — bonds limit the surety's exposure, not the principal's.

Sureties typically require an Indemnity Agreement from the principal and its officers personally guaranteeing reimbursement of any bond claims paid out.