Reading Time: 10 minutes
When navigating the world of international trade, some aspects may appear simple, whilst others cause stress and uncertainty. Furthermore, while you may be comfortable deploying to one country, its neighbor may have additional regulations that you didn’t even know existed – leaving your high-value goods stuck in foreign customs.
When making decisions like this, it is crucial to confidently rely on the professional services of a third-party Importer of Record. But what exactly do they do, and how would this help me?
From OEM to distributor, this blog post explores how an IOR fits in your global deployment needs and can optimize your supply chain.
Customs Compliance and Global Logistics
Compliance is a heavy part of acting as the Importer of Record. A lot goes into the movement of goods across borders, particularly when looking at IT hardware (but we will get into this a bit later). Before even procuring the goods, one of the first questions may be, why can’t I just buy it in the country where the satellite office is located? Purchasing goods in-country generally costs and creates numerous admin headaches. Moreover, if you don’t have a trusted supplier, you may be left with subquality goods or be subject to other nefarious activities.
But more on the benefits of a centralized model here.
With this in mind, a centralized IT procurement model is often the most efficient method to deploy gear to global offices. But moving the goods across borders does come with a lot of compliance, legal, and financial risk.
Then you may ask, but if I have an entity in that country, can’t they just act as the IOR? Well, there are many considerations that come with this responsibility, some include:
- Permanent establishment risk for the local entity.
- Compliance risk:
- Do you have a full understanding of all the permits, licenses, and certifications needed for the hardware?
- Do you have the specific import knowledge to clear customs?
This is where an IOR shines. IORs are registered entities that quite literally take on all the risks and responsibilities that lie with importing goods into a country. They assume legal ownership of the goods while they are in transit, thereby shielding their clients from any potential liabilities or import risks.
An IOR has a thorough understanding of the distinct laws and customs regulations applicable to the products they deploy and in each of the countries where it provides a service. Some specialize in product types, like TecEx, which focuses on high-value, dual-use tech goods.
Dual-use refers to goods, software, and technology that can be used for both civilian and military purposes. These items are subject to export controls that restrict the movement of these goods across borders. Export controls, like ECCN classifications, prevent the proliferation of sensitive tech and weapons. Any cross-border movement of dual-use items is highly complex and challenging to comply with.
Examples of dual-use items include:
- Telecommunications equipment
- Aerospace technologies
In the context of central procurement, it is important to be aware of the dual-use status of items that are being purchased. The procurement team holds the responsibility of ensuring that every purchase is in full compliance with any export control regulations. This is how an IOR can step in to work alongside your procurement team to ensure due diligence.
FF versus IOR: Can’t My Carrier Just Help?
Freight forwarders’ expertise lies within the realm of logistics – they get the gear from A to B. Furthermore, they move all sorts of commodities. As an Importer of Record, TecEx provides a complete solution for high-value dual-use tech gear. We take care of all the necessary import and export compliance documentation, clear your goods through customs, address any tariffs and duties, and deliver your goods to their final destination while assuming all the financial and legal risks. We work closely with all carriers, including freight forwarders and couriers, to oversee each shipment and simplify the process, ensuring that your goods reach their destination on time.
Furthermore, we have developed strong relationships with various carriers. This means we can offer favorable rates and optimize routes (e.g., through consolidation of shipments) to provide cost optimization.
Value-Adds of an IOR
Due to the complexities of global deployment, most IORs will further streamline the process through various value-adds or specialties. Within TecEx, one of our preferred methods of deployment is to follow a DDP shipping solution. Under this, we handle everything – from pre-compliance all the way to final delivery.
Want to know more about DDP shipping? Read more here.
With our years of experience, TecEx proudly introduced a number of value-adds for our clients to improve their experience and make global deployment easy. Some of these include:
- Warehousing and staging: We have several warehouses strategically located across the globe, such as the US and the Netherlands. This aids in consolidating /deconsolidating and staging shipments to ensure compliance.
- Pre-compliance: Prior to shipping, our expert teams can assess the Bill of Materials (BOM) and ensure that all pre-compliance documents (i.e., the required licenses, permits, and certifications) are sourced.
- White-glove delivery: Through our network of trusted carriers, we have developed the most efficient routes of passage to get your goods where they need to go in the shortest amount of time.
- Enabling central procurement: With capabilities in over 200 destinations, we are a value-add to any procurement team – sorting out customs compliance, cross-border logistics, and enabling global rollouts.
- TecEx App: The TecEx App allows our clients to track and monitor their shipments. Features like automated notifications and messaging functionality make it easy for our clients to reach out to their dedicated Account Manager. This trade compliance portal offers a full breakdown of predicted costs and tax ranges for pro forma quotes. We provide the most accurate quotes in the industry by accounting for all import-related costs.
- Insurance: Another great addition to our risk management capabilities.
Clear Customs with Ease
An IOR is an essential value-add to any supply chain. IORs oversee the entire process – from coordinating with suppliers, carriers, and distributors ensuring the most efficient route for shipments.
IORs simplify international trade by acting as a trusted partner – they handle the complexities of importing and exporting goods, thereby allowing businesses to focus on their core competencies and expand their global reach.
At TecEx, we have worked across the IT channel to service clients with their global deployment needs. Through decades of experience, we have seen projects of all shapes and sizes, which means we can customize our solutions to your needs.