The Customs Department of Changchun issued Jilin province's first customs surety bond on a shipment of 3,551 kilograms of fabric, used in the making of car seats, which was worth 240,000 yuan ($34,626) at the Jilin Economic Technology Development Zone on Nov 2.

The Changchun Customs District under the General Administration of Customs of China issues Jilin province's first customs surety bond for a local foreign trade company on Nov 2. [Photo provided to chinadaily.com.cn]

It was the first time for Jilin province to offer an insurance product as a new type of customs bond.

Traditional customs bonds usually come in two forms: cash deposits and bank guarantees. The latter were mainly issued to big companies with larger credit lines, but were difficult for small and medium-sized enterprises to obtain.

A customs surety bond however, is a contract signed between the customs department and an importer or exporter in order to guarantee that a specific obligation will be fulfilled between the two for any given import and export transaction. The main purpose is to ensure the payment of import and export duties and taxes while easing the burden on foreign trade enterprises.

The first customs surety bond is issued on a shipment of 3,551 kilograms of fabric, used in making car seats, worth 240,000 yuan ($34,626) at the Jilin Economic Technology Development Zone on Nov 2. [Photo provided to chinadaily.com.cn]

As the new customs surety insurance system has now been introduced in the province, the overall operating costs of small and medium-sized enterprises, such as the cost of capital and institutional transaction costs, can be significantly reduced.

"It used to cost us the same amount as the taxes for insurance fees to export our products. This time we spent just a few hundred yuan to take out the bond. The customs surety bond saved us not only money but also time," said Li Yang, the customs declaration manager of the Jilin International Storage and Transportation Co Ltd.

The new customs surety insurance system helps reduce the overall operating costs of small and medium-sized enterprises, such as the cost of capital and institutional transaction costs. [Photo provided to chinadaily.com.cn]