BONDED WAREHOUSE

This article appears in Volume V04, Page 200 of the Encyclopedia Britannica.

Encyclopedia Britannica - Main :: BLA-BOS

BONDED WAREHOUSE , a warehouse established by the state, or by private enterprise, in which goods liable to duty are lodged until the duty upon them has been paid. Previous to the

establishment

ESTABLISHMENT (0. Fr. establissement, Fr. etablissement,
late
- LATE
Norm. Fr. establishement, from O. Fr. establir, Fr. etablir, Lat. stabilire, to make stable)

of bonded warehouses in England the payment of duties on imported goods had to be made at the time of importation, or a bond with security for future payment given to the revenue authorities. The inconveniences of this system were many; it was not always possible for the importer to find sureties, and he had often to make an immediate sale of the goods, in order to raise the duty, frequently selling when the market was depressed and prices low; the duty, having to be paid in a lump sum, raised the price of the goods by the amount of the

interest

INTEREST

on the

capital

CAPITAL (i.e. capital stock or fund)
CAPITAL (Lat. caput, head)

required to pay the duty; competition was stifled from the fact that large

capital

CAPITAL (i.e. capital stock or fund)
CAPITAL (Lat. caput, head)

was required for the importation of the more heavily taxed articles; there was also the difficulty of granting an exact equivalent

drawback

DRAWBACK

to the exporter, on goods which had already paid duty. To obviate these difficulties and to put a check upon frauds on the revenue, Sir Robert Walpole proposed in his " excise

scheme

SCHEME (Lat. schema, Gr. oxfjya, figure, form, from the root axe, seen in exeiv, to have, hold, to be of such shape, form, &c.)

" of 1733, the system of warehousing, so far as concerned tobacco and wine. The proposal, however, was very unpopular, and it was not till 1803 that the system was actually adopted. By an act of that year imported goods were to be placed in warehouses approved by the customs authorities, and importers were to give " bonds " for payment of duties when the goods were removed. It was from this that the warehouses received the name of " bonded " or " bonding." The Customs Consolidation Act 1853 dispensed with the giving of bonds, and laid down various provisions for securing the payment of customs duties on goods warehoused. These provisions are contained in the Customs Consolidation Act 1876, and the amending statutes, the Customs and Inland Revenue Act 188o, and the Revenue Act 1883. The warehouses are known as " king's warehouses," and by s. 284 of the act of 1876 are defined as " any place provided by the crown or approved by the commissioners of customs, for the deposit of goods for security thereof, and the duties due thereon." By s. 12 of the same act the treasury may appoint warehousing ports or places, and the commissioners of customs may from time to time approve and appoint

ware

WARE

-houses in such ports or places where goods may be warehoused or kept, and fix the amount of rent payable in respect of the goods. The proprietor or occupier of every warehouse so approved(except existing warehouses of

special

SPECIAL

security in respect of which security by bond has hitherto been dispensed with), or some one on his behalf, must, before any goods be warehoused therein, give security by bond, or such other security as the commissioners may approve of, for the payment of the full duties chargeable on any goods warehoused therein, or for the due exportation thereof (s. 13). All goods deposited in a

ware

WARE

house

HOUSE
HOUSE (O. Eng. hiss, a word common to Teutonic languages, cf. Dut. huis, Ger. Haus; in
Gothic
- GOTHIC
it is only found in gudhiss, a temple; it may be ultimately connected with the root of " hide," conceal)

, without payment of duty on the first importation, upon being entered for home consumption, are chargeable with existing duties on like goods under any customs acts in force at the time of passing such entry (s. 19). The act also prescribes various rules for the unshipping, landing, examination, ware-housing and custody of goods, and the penalties on breach. The system of warehousing has proved of great advantage both to importers and purchasers, as the payment of duty is deferred until the goods are required, while the title-deeds, or warrants, are transferable by endorsement.
While the goods are in the warehouse (" in bond") the owner may subject them to various processes necessary to fit them for the market, such as the repacking and mixing of tea, the racking, vatting, mixing and bottling of wines and spirits, the roasting of coffee, the manufacture of certain kinds of tobacco, &c., and certain specific allowances are made in respect of waste arising from such processes or from leakage, evaporation and the like.

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