How a Foreign OTI Becomes Authorized to Service U.S. Trade

Foreign companies interested in performing Ocean Transportation Intermediary (OTI) services in US trade lanes are subject to regulation by the Federal Maritime Commission (FMC). The FMC will permit a qualified foreign company to act as an NVOCC for shipments to and from the U.S., however a foreign company cannot legally act as an ocean freight forwarder for U.S. shipments.

To legally operate as foreign based NVOCC, there are two options:

Option 1 –Licensing Method – the foreign based company must establish a presence in the United States through a branch office which is not a separate legal entity. Once the office is established, the following must be submitted to the FMC:

• Completed application Form FMC-18 and $250.00 fee.
• Proof of firm’s name, original and English translation.
• Proof of the position of the qualifying individual within the company, such as corporate minutes appointing that individual as an officer of the company or other official documentation demonstrating the qualifying individual’s position.
• At least three references that can attest to the qualifying individual having at least three years’ experience in OTI services and his/her good character.
• Employment history of the qualifying individual demonstrating that the individual has at least three years’ experience in OTI services.

Qualifying Individual Criteria:

• Must be a corporate officer if the entity is a corporation, or a manager or member (depending on the Operating Agreement) if the entity is an LLC.
• Must have at least three years’ experience in providing OTI services (OFF or NVOCC services), as defined in 46 CFR 515.2, which may be obtained outside the United States. The qualifying individual need not be located in the United States before or after licensing.

• Acceptable proof of financial responsibility in the amount of $150,000.
• FMC-1 which informs the Commission of the location of the tariff.
• Publication of a tariff in compliance with 46 CFR Part 520. An agent for service must be listed in the tariff. The agent for service need not be an OTI.
• Only firms holding OTI licenses may furnish or contract to furnish OTI services in the United States on behalf of an unlicensed foreign NVOCC OTI.
• File Form FMC-65 with Ocean Transportation Intermediaries Office via e-mail.

Alternatively, a foreign OTI provider can start a new company in the U.S. and become a domestic OTI.

A domestic OTI can act as an NVOCC and/or an ocean freight forwarder, but it must have a qualified individual with three years of US OTI experience who is an officer and employee authorized to work in the U.S. To become a domestic OTI, the company must submit for the FMC’s consideration:

• Completed Application Form FMC-18 and $250.00 fee.
• Proof of firm’s name. The document must be in English when submitted.
• Proof of position of the qualifying individual, e.g., corporate minutes appointing that officer or other official documentation demonstrating qualifying individual’s position.
• At least three references that can attest to the qualifying individual having at least three years’ experience in OTI services and his/her good character.
• Employment history of the qualifying individual demonstrating that the individual has at least three years’ experience in OTI services.
• Publish and maintain a tariff using Form FMC-1 through a tariff publisher.

(1) NVOCC will need to maintain a bond in the amount of $75,000 (2) Ocean Freight Forwarder will need to maintain a bond in the amount of $50,000

• Must be a corporate officer if the entity is a corporation or a manager, or member (depending on the Operating Agreement) if the entity is an LLC.
• Must have at least three years’ experience in providing OTI services (OFF or NVOCC services), as defined in 46 CFR 515.2.

The license is issued to the domestic NVOCC, but the company’s 100% shareholder can be a company located outside the United States. All profits flow to the parent company. Domestic NVOCC can enter into confidential service contracts with the steamship lines and issue its own house bills.

“In the last 20 years Blanck & Cooper P.A. has successfully assisted both Domestic and Foreign companies in navigating through the FMC application process to secure a license.”

If you have an interested obtaining a license or if you have already filed for one and the FMC examiners have questioned your application feel free to contact our office as we are available to assist in any way possible.

Additionally, we are available for consultation on surety bonds, tariff rules, bills of lading and other matters related to an NVOCC / Ocean Freight Forwarder operation in the U.S.