Why Do Freight Forwarders Need OTI Bonds in the US?
It’s never easy to move products, raw materials, and
machines in other countries around the world without the help of experts.
Businesses who conduct business internationally rely on freight forwarders and
ocean carriers to move their items feasibly from one part of the land to
another. The U.S. Customs and Border Protection observe and control the
importing and exporting in the US. The federal agency requires all importing
entities to obtain necessary customs bond.
On the other hand, freight forwarders and non-vessel
operating common carriers are required to obtain OTI Bonds SC to meet the
rules and regulations of the Federal Maritime Commission (FMC). Any kind of business
that does require transacting merchandise internationally might be aware of the
importance of having an efficient freight forwarding partner by their side.
What are Customs Bonds?
America is the largest importing country in the world.
However, the process of importing is nothing short of intricacies, especially
for newbies. Business that import frequently might be aware of the level of
paperwork needed such as Bill of Landing, Commercial Invoice, and Arrival
Notice. Customs bonds are quite
different from other types of bonds.
A customs bond is like an insurance policy that guarantees
payment of all duties and fees related to a shipment. As an importer, you can purchase
a bond from a surety company or customs broker, who guarantees the US
government that all corresponding shipment fees and taxes will be paid for. If the
importer fails to comply with federal regulations, the bonding company will be
responsible for compensation.
OTI Bonds
All international freight forwarders and non-vessel
operating ocean carriers are required to obtain OTI bonds to operate as
legitimate ocean transportation intermediaries. These bonds are also similar to
customs bonds that warrant obeying all contracts with shippers and carriers.
So you belongs to freight forwarding fraternity, you may be
already aware of the importance of being licensed. If you wish to become a
licensed ocean transport intermediary, you will need post necessary bond.
OTI bonds act as proper proof of financial responsibility.
If you don’t possess adequate bond, you may be subjected to some heavy fines by
the FMC and your license can be revoked by the authorities if you found noncompliant
at any stage of carrying.
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