Why Are OTI Bonds Important For Shipping Companies?

by Samuel C. Customs Advisor

It is very important for shipping companies to understand all the legal factors and responsibilities before initiating their business in the US. If you were planning to import goods to the United States, it is imperative to know about the rules and regulations set by the Federal Maritime Commission (FMC). The US is the largest hub of business in the world and many people wonder to try their mark. Every business needs to assure the government about its credibility, potential, and authenticity as well as policies regarding security before establishing it publically. It is the legal process which everyone needs to follow in order to operate successfully. OTI Bonds CA are required to operate as a non-vessel-operating common carrier (NVOCC) or ocean freight forwarder (OFF) in the U.S.

FMC is responsible to handle international ocean transportation. The federal agency has been regulating importing and exporting of cargos for years and protecting the land and public from illegal and harmful properties.

OTI Bonds

In 1984, a new MOD Act or Shipping Act was introduced by the government that made a big difference in FMC’s functioning. To make the merchandise fair and reliable through the ocean, the system has renovated for several times since the inception of FMC. The commission is in charge of inspecting carrier activities, thus it made mandatory for NVOCCs and OFFs to obtain OTI Bonds CA.

The aim of any type of Customs bonds CA is to secure the trading from any deceptive operations. There are different types of bonds for different purposes. It provides security that the cargo will safely reach its destination without any delay and without violating rules.

Those who wish to transport goods from foreign countries to the United States should hold OTI Bonds or FMC-84 bonds. It is a kind of license for intermediaries who claim to operate their business in accordance with the regulations. Just like continuous import bond or single transaction bond, OTI Bonds SC are also proof of financial security between three parties the principal, obligee, and insurance firm.

Obtaining OTI Bonds

One can obtain OTI Bonds SC only if he qualifies for it. The eligibility criteria for an individual is he should possess at least three years of OTI experience outside the US, must be a licensed business entity. The further process is quite easy as you can fill application for it online with the help of a broker or insurance professional.

Once the information you provide found correct by the authorities, the rest of the process becomes quick. A broker can help you in determining the exact price of the Customs bonds CA as it varies as per the operations and operative companies.