Bonds And Guarantees
A bond or guarantee can be described as a written understanding by the guarantor to accept responsibility for the performance of a contractual obligation entered into by the contractor liable under the contract in the event of the contractor defaulting.
Customs Bonds
Temporary Importation Bond
This covers importation privileges. Where goods are temporarily imported and then exported, firms need to be exempted from duty. This is an undertaking that if goods are not taken out by a specified date, duty will be payable by the guarantor
Warehouse Bonds
Customs require a bond on warehouses storing imported goods to ensure that duty is paid once the goods have been cleared and removed.
Removal In Transit Bonds
These cover goods in transit to another destination. For example if goods are imported from South Africa and the end user is in Zambia, the Zimbabwean 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 customer without duty being paid whilst in transit.
Inward Processing Rebates
These cover the importation of raw materials without duty and the goods manufactured there from also being exported.
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 ZIMRA regulations and payment.
Construction Bonds
Advance payment Bond
This bond is required to guard against the misuse of money that is paid in advance to contractors for the purchase of materials.
Retention Bond
This bond enables the retention monies to be released to the contractor, at the same time guaranteeing the employer that in the event of default by the contractor, such monies will be paid to the employer.
Bid Bond
Bid bonds make sure that contractors submit serious bid proposals. These bonds reassure project developers that bidders have the financial credentials necessary to accept the job. If a bid is selected and the contractor declines the job or retracts the bid, the project developer can make a claim on the bond to recoup the difference between that bid and the next-highest bid.
Performance Bond
Performance bonds guarantee that contractors complete projects according to contractual terms. If a contractor fails to do so, the project developer can make a claim on the bond to access funds that can be used to pay a second contractor to finish the job.
Supply Bond
Supply bonds mandate that suppliers provide materials, equipment and/or supplies as defined in purchase orders. If the supplier fails to provide the supplies as agreed, the bond amount can be used to reimburse the purchaser for the resulting loss.
Maintenance Bond
Maintenance bonds guarantee against defective materials and workmanship for a specific time period following a project's completion. If the project is found to be defective during this time, the bond amount can be used to pay for repairs that need to be made as a result.
Court Bonds
Administration of Estate Bond
The Master of High Court requires this bond to ensure that beneficiaries will not be prejudiced by mal-administration and fraud by the administrator of the estate.
Judicial Management Bond
This bond is required by the Master of High Court to ensure the due performance of expert management that has been called in to avoid the liquidation of a company that is experiencing financial difficulties.
Liquidators Bond
This bond is required by the Master of High Court to ensure the due performance of the person appointed in the liquidation proceedings of a company.
Other Bonds
Railway Ledger Bond
This bond is required by the National Railways of Zimbabwe from the companies that use railway carriage facilities on credit. This bond is required as security against default of the monthly payments by the respective customs.