If you’re thinking about starting your own business as a an ocean Freight Forwarder or Non-Vessel Operating Common Carrier (NVOCC) handling cargo shipped in or from the US, you firstly need to learn more about the process. It is necessary for you to purchase OTI Bonds SC in order to operate as a licensed OFF or NVOCC in the United States. These bonds are somewhat similar to other customer bonds such as a continuous import bond.
Being an online business, importing products from all around the world so lead on Amazon either as Amazon fee seller or sell it on your own website. Nothing beat being your boss, right? During the importation process though you will have to deal with customs clearance, now everything you moved around to customs clearances seems to be so mysterious.
For example, continuous import bond if you’ve never done it before. You’d be like, what is a customs bond? Don’t worry, in this post, we’re going to make it crystal clear for you. And you’ll be reading three tips to save you money while purchasing OTI Bonds.
What is a customs bond?
You know you need the HTS code to determine the correct test and duty you’ll have to pay to the US customs. But, the US custom is not going to take the risk and assume that you’re going to pay for it therefore the customs bond is required to be established as an insurance to guarantee that you’ll pay your taxes and duties.
If you’re importing for commercial purpose and your declared value is greater than $2,500, you’re required to acquire either a continuous import bond or single entry bond depending on how many times you’re going to import in the next twelve months.
What is an OTI Bond?
The difference between other bonds and OTI bonds is simple. A normal customs bond is a kind of a financial agreement between three parties – the importer, Surety Company, and customs agency (CBP). An OTI bond guarantees completing all contracts with shippers and carriers without any harm to shipping merchandize.
Important tips to avoid risks and save money
- Know your eligibility: It is vital that you know the eligibility requirements for obtaining an OTI license. You must have at least three years of experience as an OTI to be qualified for this. Your must be gained this experience while being in the US.
- Wait: Wait until you have met the eligibility criteria. It’s better to avoid filling FMC-18 application form if you know you’re not a qualified individual.
- Shop: A lot of people buy custom bond from their freight forwarder which is fine but you should shop your customs bond from different customs broker or you can purchase it through online surety companies that give significant discounts.
- Compare rates: Customs bonds rates vary depending on various factors such as total value of your cargo and from where you’re importing goods. You should compare rates of different companies to see who is giving the best cost.
