Surety Bonds

Search     

Home » Customs Bonds

Customs, Custodial & OTI Bonds

What are OTI and Customs Bonds?

A Customs Bond, also called a Custodial bond or an import bond, is a contract ensuring that all legal obligations are fulfilled during the course of importing. Essentially, the customs bond guarantees that the U.S. Customs & Border Protection will be paid if a regulated or legally required act is not performed as mandated by law.

An OTI Bond (Ocean Transportation Intermediary) is needed for those who are involved in international trade business to guarantee contracts with shippers and carriers for all cargo originating from, or in transit to, the United States and is in compliance with all Federal maritime Commission regulations.

IMPORT CUSTOMS BONDS

Required by United States Customs and Border Protection, Customs Bonds are needed by every party that imports products into the U.S. for commercial reasons, or that transports or carries imported goods through the United States even if those goods are not yet processed through with duties paid.

A customs bond's most common function is to allow an importer to take prompt possession of its imported goods without having to wait for all of the Customs & Border Protection regulations and formalities.  

ACTIVITY CODE 1 IMPORT CUSTOMS BOND:

There are two most common types of Customs Bonds, the Continuous Customs Bond and Single Entry Customs Bonds.  These fit under the category of Activity Code 1 Importer or Broker Entry Bonds.

Activity Code 1 Single Transaction Importer Customs BondThe other type of bond, a Single Entry Bond, is more appropriate for a single shipment of imported goods and covers only the single transaction or entry for which the bond was written.

U.S. Customs Activity Code 1 Single Transaction Importer Bond Application (up to $50,000)

Activity Code 1a Continuous Importer Customs Bond: Continuous Customs Bonds are normally acquired by importers who import frequently throughout several ports during any given year. These bonds might also be obtained by international transporters who are frequently arriving and leaving the U.S. Customs & Border Protection territory, or by overseers of goods who engage in business with the U.S. Customs & Border Protection regularly. These types of bonds have a one year term, are automatically renewed each year and are valid until terminated by either the issuing company or by the party who acquired the bond.

U.S. Customs Activity Code 1a Continuous Importer Bond Application (over $50,000)


ACTIVITY CODE 2 CUSTODIAN OF BONDED MERCHANDISE CUSTOMS BOND:

The Activity Code 2 Custodian of Bonded Merchandise Customs Bond is a type of bond that covers the custodial activities bonded merchandise warehouses, container stations, cartman and carriers.  When merchandise has not been entered into United States commerce and duties are due, Custodians are responsible for their activities with the merchandise.  This merchandise is commonly referred to being "in-bond."  The minimum bond amount for the Activity Code 3 Custodian of Bonded Merchandise Customs Bond is $50,000 and is set by the District Director of Customs.

U.S. Customs Activity Code 2 Custodian of Bonded Merchandise Bond Application


ACTIVITY CODE 3 INTERNATIONAL CARRIER CUSTOMS BOND:

The Activity Code 3 International Carrier Customs Bond is required by operators to ensure that the manifest of all goods and passengers carried is accurate.  The Activity Code 3 International Carrier Customs Bond is also used to ensure payment of overtime to Customs Officials.  The clearance of vessels, vehicles or aircraft originating from any location outside of the United States is also covered by this bond.  The Activity Code 3 International Carrier Customs Bond has a minimum bond amount of $25,000 and can go up to $250,000 for shipments originating from high-risk drug areas.

U.S. Customs Activity Code 3 International Carrier Bond Application


ACTIVITY CODE 4 FOREIGN TRADE ZONE CUSTOMS BOND:

The Activity Code 4 Foreign Trade Zone Customs Bond is used when foreign goods from a non-U.S. territory are manufactured, manipulated, replaced or exported without duties being paid.  These bonds are exceptionally difficult to underwrite and require strong financials, clean credit and United State citizenship.

U.S. Customs requires an Airport Security Bond for companies that operate out-sourced airport services (such as non-airport employed cleaning services or maintenance technicians)  that need to enter secured areas of an airport.  The Airport Security Bond amount is set by the airport at which the company is operating.

U.S. Customs Airport Security Bond Application


OCEAN TRANSPORTATION INTERMEDIARY (OTI) BONDS

OTI Bonds are required to be in place by the Federal Maritime Commission in order to assure that any and all fines levied by the Federal Maritime Commission for the violation of regulations by an Ocean Transportation Intermediary are payable via a bond.  The bond also protects clients from damages as a result of OTI activity.

OTI's are currently categorized as either NVOCC's (Non-Vessel Operating Container Carriers) or OFF's (Ocean Freight Forwarders).  All entities engaged as an OTI must have an OTI Bond in place in order to ensure compliance with the Ocean Shipping Reform Act.

NON-VESSEL OPERATOR CONTAINER CARRIER (NVOCC) BOND: 

The function of an NVOCC is to assume legal possession of a shipper's cargo and through consolidation of the shipment, arrange for the packing, transportation and the loading of shipping containers bound for ocean transit.  A domestic NVOCC is required to execute a $75,000 NVOCC Bond (Form 48) plus an additional $10,000 per operating location; and a $150,000 NVOCC Bond is required for a foreign NVOCC.  



OCEAN FREIGHT FORWARDER BOND:

The function of an Ocean Freight Forwarder is to assume legal possession of a shipper's cargo and moves it from one location to another.  A domestic Ocean Freight Forwarder is required to execute a $50,000 OFF Bond plus an additional $10,000 per operating location.


Our Free 24 Hour Quote Procedure

How to cut down the approval process and keep your cost low:

1.      Our applications are all that's usually needed to get you a price.

2.      Occasionally, more information is needed. If so, we will contact you within 24 hours.

3.      If you have credit issues, approvals might need an additional day.

4.      We never require an application fee. All quotes are 100% free.

5.      Bond approvals, like loans, are based on personal credit, financial strength of the owner, bond amount and type of bond. The more information you provide, the better chance you have of getting the lowest available price and a faster approval.


Complete our fast and easy online application by clicking the link below. Most will receive a free quote for your Customs Bond or OTI Bond within 24 hours.