New regulations on the export of goods to the US market

Wednesday - 08/12/2021 09:16
FMC license - Traffic ticket for further exporting container to the USA
New regulations on the export of goods to the US market

Currently, Vietnam has more than 30,000 enterprises registered to provide logistics-related services, of which about 4,000 logistics enterprises are providing international connection services. However, the number of logistics enterprises provides There are not many sea freight services to North America. Vietnam still faces many barriers in terms of FMC Bond registration procedures (and limited economic potential as a guarantee to sign FMC Bond for OTI.

It is known that the United States is a country with very strict policies, a diverse legal system, especially for imports, to protect the interests of businesses and their logistics chain. However, in return, the US market has lots of potentials. Therefore, Vietnamese enterprises need to strengthen their capacity, capacity to understand the system, be proactive in exporting, FMC's regulations related to container shipping to the US, which requires understanding. Local regulations, very high professionalism avoid the risks of taxes, fees, and fines at the place of delivery.

Source: (Theo ContainerNews)

Recently, there have been the most profound and effective exchanges on regulations on registration of FMC licenses for Vietnamese logistics enterprises with important contents including:

1. General provisions of FMC: FMC will review and track all agreements between shipping lines and port operators and contracts of carriage between shipping lines and NVOCCs. FMC also maintains and reviews service contracts that are kept confidential and prevent adverse effects on the carriage of goods to and from the United States. Normally, FMC also provides forums for importers and exporters, and members of shipping companies to support seaport operations and limit risks and disputes. At the same time, ensure the normal tariff and fee schedule announced by shipping lines in the automatic tariff system on FMC's website.
  1. Issuing B/L, signing service contract with carrier
1 Buy OTI - NVOCC bond with guaranteed value of 150,000 USD
Bond FMC is provided by licensed underwriters. Guarantee value is not an expense of the enterprise
1-2 Weeks after receiving the complete application
2 Registration form HBL 10 Days
3 Registration FMC License
4 Set up an account and declare the service fee schedule (tariff filing)
(B) Standard documents for registration and declaration of ACE/ AMS 5 Register Importer ID with US Customs (CPB) 1 Month
6 Register SCAC Code with National Motor Freight Association
7 Make a purchase of a Custom Bond (C3 Bond), with a guarantee value of 50,000 USD or 75,000 USD
Bond C3 is offered by authorized underwriters. The value of the guarantee is not at the expense of the business.
(C) Sign up for an account 8 Submit LOI to US Customs for approval of ACE declaration 1-3 Weeks
9 Set up ACE declaration account with GOL 1 Day

* FMC issues three types of licenses as follows:
- OTI-Ocean Freight Forwarder

2. How do Vietnamese logistics companies register for FMC License:

* Necessary conditions: 4 conditions must be met before applying for FMC License
Stable operation for at least 1 year
Be a member of a national forwarding association (such as VLA) or directly a member of FIATA
Have Logistics liability insurance of at least USD100,000/case and USD1,000,000/year.
Having sound financial statements, proving the capacity to be responsible for Logistics activities to the USA in the last 3 years.
* FMC License registration process:


3. Procedures for registration of FIATA Group Bond:

*To enjoy the benefits when applying FIATA Group Bond's collective deposit with FMC, FIATA stipulates that businesses doing business in the form of NVOCC issuing FBLs to the US market must meet the following conditions:
1. Must be a member of the National Freight Forwarding Association where they are headquartered (eg Vietnam's VLA).
2. Civil liability insurance must be purchased with an insurance company approved by FIATA to indemnify customers when issuing FBLs by the above method.
3. An application to participate in a FIATA Group Bond deposit must be submitted to both FIATA and an insurance company that FIATA accepts.
4. Fees and service prices must be announced on the internet.
5. An annual fee must be paid to FIATA for the application of FIATA Group Bond (this fee is equal to 0.9% of the Surety Bond amount prescribed by FMC, i.e. USD 1,350/year plus USD25 for each receipt or service.
* Apply for:
- Certificate of VLA. membership
- Certificate of cargo insurance and insurance for defects and controls.
- Service fee schedule (TARIFF): copy of FMC F1-FORM

4. Basic notes in signing contracts for US routes with shipping lines, other bond licenses related to FMC License:

*Basic notes in signing contracts for US routes with shipping lines:
- Exporters exporting goods from Vietnam to the US should note that they should choose a shipping company capable of issuing bills of lading (HBL) and must have a license (FMC license) to operate by FMC (US Federal Maritime Commission) grant.
- Units capable of issuing bills of lading are NVOCC and must have an FMC license.
* Other bond licenses related to FMC License:
- ISF: Import Security Filing
- ACI/ E-Manifest

Explanation of some terms:
An FMC license to provide freight services to the US is a mandatory rule, but not every business can do it. The large margin and building the right price list are the hardest parts for a business to get this license.
OTI-NVOCC: Holders of this license can issue an HBL as an “As Carrier” for their shipments to or from the US. All charges fees applied on the HBL (selling price) for both export and import must be recorded in one FMC tariff (FMC tariff). NVOCC can sign a service contract (Service Contract) with shipping lines. The only thing an NVOCC cannot do is collect a commission from the shipping line as an agent's ocean carrier. This is one of the most common forms. This license requires a bond deposit of USD 75,000 and an extra USD 10,000 for an affiliate.
OTI-Ocean Freight Forwarder: This license holder can operate as a forwarder in the US or as an agent of NVOCCs - businesses that own FMC bonds and have their tariff (Tariffs). They cannot issue a bill of lading as a carrier and issue an invoice equal to the price offered by the shipping line (no mark up). The profit of Ocean Freight Forwarders is only the commission paid to them by the shipping line or NVOCC and cannot enter into a service contract (Service contact) with a shipping line such as NVOCC. This license requires a bond deposit of USD 50,000 and USD 10,000 for an affiliate.
OTI-NF: This license holder has the functions of the above two types of licenses and must make two required guarantees. Retail service providers (Master Consol) use this license in their operations.


Editor: Nguyen Van Dung/Nguyen Thi Ho Huong

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