Companies that operate as ocean freight forwarders and Non-Vessel Operator Common Carriers (NVOCC) are required to be licensed as an OTI. This guarantees that the contractual relationships between shippers and carriers will be fulfilled. The OTI collects the transportation charges from the shipper for payment to the carrier. The bond is in place to help … Read more
The Federal Maritime Commission (FMC) has reviewed and believes the bond amounts, as currently required, are insufficient to demonstrate financial responsibility of the OTI (Ocean Transportation Intermediaries) due to the large number of bond saturations the FMC has seen. They have proposed that domestic NVOs increase their current bond requirement from $75,000 to $100,000 and … Read more
A foreign-trade zone is a secured area under U.S. Customs’ supervision that is generally considered outside United States territory (for commerce purposes) upon activation. A foreign-trade zone is typically located in or near a U.S. Customs port of entry and falls under the authority of that port. Foreign and domestic merchandise may be moved into … Read more
Customs will allow the filing of a single bond form to meet the bond requirement for both the International Carrier (type 3) and the Instrument of International Traffic (type 3A). If a single bond form is issued to combine these types of bonds, one bond number would be assigned by Customs; however the liability of … Read more
An Instrument of International Traffic bond, or Activity 3A, is used to cover the movements and clearances of containers which move internationally. Without this provision, each container moved into the United States would have to be entered as a standard consumption entry and duty would be due to Customs on the container. Containers commonly used … Read more
An International Carrier bond, or Activity 301-3, ensures that operators of ships, airlines and conveyors of international merchandise properly manifest their goods, pay for overtime services and comply with Customs regulations related to clearance of the vessel. Therefore, any entity operating a ship, airplane or railway in international areas wishing to gain entry to the … Read more
C.A. Shea provides a unique role in the world of customs bonds as a facilitator for brokers in many different ways. Our office’s primary role is to assist brokers with the placement of Customs bonds for accounts that are not part of a larger surety program. The broker can submit a request for a bond … Read more
To further expand on the disadvantages of co-principals on a customs bond, unfortunately, when Customs issues a notice of penalty, liquidated damage, supplemental duty bill or other violation notice on a bond with multiple co-principal’s, there may be confusion as to which entity on the bond is liable for the claim. In certain instances as … Read more
Occasionally, companies express an interest in listing more than one entity on a bond. In these situations, Customs does allow separately incorporated entities to be listed on the same bond as co-principals as long as the entities each have the same distinct legal status, such as corporations, partnerships or sole proprietorships. It is important for a … Read more
In our office’s November 3, 2011 newsletter our office included an article on Carnet bonds. As a reminder, the use of a Carnet allows a principal to avoid posting of financial security at the time of entry, eliminates value added taxes (VAT) and simplifies customs procedures. This is done under the premise that the goods … Read more
