Contract Bonds – Construction & Engineering Related
- Bid bonds and Letters of Intent
- Performance Guarantees/Bonds
- Retention Money Guarantees or Maintenance Guarantees/Bonds
- Advance Payment Guarantees/Bonds
- Materials Off-site Bonds
- Supplier Suretyships (construction industry only)
Custom and Excise Bonds
- Deferred Payment
- Customs Rebate
- Approved Warehouse Operator
SARS (Customs) require a bond on warehouses storing imported goods to ensure that the predetermined duty is paid once the goods have been cleared and removed. Failure by the firm to pay the duties timeously will result in the Bond being called up and the Guarantor will be liable for the duties.
- Temporary Importation
Where goods are temporarily imported and then exported, firms need to be exempted from paying duties. The issuance of a Temporary Importation Bond is an undertaking by the Guarantor that if goods are not returned to the country of origin by a specified date, the relevant duties (limited to the value of the Guarantee) will be payable by the Guarantor.
- Other Related Bonds
- Removal in Transit Bonds
These bonds cover goods in transit to another destination. For example, if goods are imported from Zimbabwe and the end user is Swaziland, the South African freight forwarding company does not have to pay duty with respect to these goods. A removal in transit bond is put in place to ensure that goods get to the final destination without duty being paid whilst in Transit.
- Inward Processing Rebates
This bond covers the importation of raw materials without duty and the goods manufactured there from also being exported.
Inward Processing Rebates
- Agents Bond
This bond is required by Customs from forwarding and clearing
companies who handle goods on behalf of other companies for
the due observation of SARS regulation and payment.
- About fuel guarantees
A fuel guarantee is security against a credit line provided by a fuel supplier to fuel wholesaler or retailer. The guarantee provided security to the fuel supplier against any possible payment default by the wholesaler or retailer.
The guarantee allows the retailers and wholesalers to get fuel supplies on credit and in turn allows the supplier to provide these credit terms with the assurance that should there be any default there is recourse to a 3rd party.
Fuel Guarantee Benefits
- Payment for fuel supplies via credit instead of COD or cash upfront
- Premium written off against taxable income
- Increase in working capital and reduction in loans or bank overdrafts. Without a guarantee, the retailer effectively trades on a ‘hard cash’ basis and this working capital required is costly
- The guarantee can also be used to increase existing guarantees or replace the entire guarantee.
- Opportunity cost
- It reduces your capital requirement for a new retailer as the up-front payments are removed from overall set up cost.
- Ensures more business
- Ensuring payment from Wholesalers and Retailers.
- Eliminates excessive vetting process to provide credit terms