If you ever stumbled upon customs bonds NJ, you probably have read it somewhere in trade-related articles or have heard it in transport discussions. Luckily, we are going to break both the terms, OTI Bonds as well, and will discuss here in this article how they work. Bonds are the prerequisite in the international transportation industry and this means if you’re going to import/export something or want to evolve in transportation as a freight forwarder or carrier, you should be aware of basics about bonds.
There are different types of bonds vary with the type of activity you are going to conduct. If you’re a customs broker, you will need to earn a license from the Customs and Border Protection (CBP). If you desire to operate as a Non-Vessel Operating Common Carrier (NVOCC) you required by the Federal Maritime Commission (FMC) to obtain a surety bond. You must be licensed to operate as an Ocean Transportation Intermediary (OTI) to stay compliant with rules and regulations.
Customs bonds are an important component when it comes to importing goods from foreign countries to the United States. It’s like an insurance policy that guarantees that the principle (importer) will obey all the financial obligations and follow the laws and regulations during a transaction. If the importer fails to adhere to pertaining rules or find with insufficient bond, the CBP retains the right to make a claim against insurance, delay the merchandise, or suspend the transaction.
There are mainly two types of bond – continuous customs bond and a single entry bond. When the shipment’s commercial value crosses the mark of $2,500, the importer needs to post sufficient customs bonds. It is simply intended to protect the interest of the US treasury. There are many other documents that a merchandiser needs to fulfill.
You can submit a continuous customs bond if you’re required to do shipment multiple times in a year. You can either post a single bond, which is valid for a single transaction during the period of 12 months. You need to renew a single entry bond every year and a continuous bond is 10% of duties, taxes, and fees paid for the 12 month period and it gets renewed automatically.
OTI Bonds NY is for IFFs and NVOCCs who have been in the international shipping business for at least 3 years and want to operate as Ocean Transport Intermediaries. Similar to other custom bonds, it is intended to ensure that Otis will follow the Ocean Shipping Reform Act. It also allows the FMC to collect all duties, taxes, and fines for the violation of regulations by an OTI.