E-COMMERCE & FOREIGN IMPORTER CHALLENGES
E-Commerce makes it possible for businesses around the world to deliver their products directly to U.S. consumers with lightning speed. These E-Commerce platforms were heavily relied upon during the early part of the pandemic and hasn’t showed any signs of slowing. Domestic ultimate consignees’ now have quick access to a much wider pool of products from around the world, but it all comes with some compliance challenges.
One challenge is determining who is the Importer of Record (IOR) for shipments originating overseas. A surety that bonds a foreign IOR is faced with increased bond risk compared to the traditional USA domiciled company with local assets acting as IOR. This scenario limits the surety’s ability to enforce U.S. laws regarding collections of surety payments under the bonds. Customs Brokers are also faced with the challenge of validating POAs for Importers they will never meet face to face.
IB&M fully supports E-Commerce and making the import process smooth. We view this trend as a great opportunity for companies to get their products into the USA and to their end users seamlessly. Nonetheless, IB&M will be expecting its non-resident bond applicants to meet certain additional requirements when continuous bonds are requested. Bond issuance for non-resident importers will be decided on a case-by-case basis together with our normal underwriting standards to ensure loss ratios are protected and our bond rates stay competitive for our customs broker partners nationwide.
Jason Wieselman
V.P. Business Development