What is an Importer of Record?
An importer of record (IOR) is the entity or person in the destination country responsible for ensuring compliance requirements are met, when importing goods internationally.
It is much like an Exporter of Record (EOR) but applies to imports rather than exports.
What Does an Importer of Record Do?
The importer of record is responsible for ensuring all the legal requirements are met before goods can be cleared through customs.
During this process, the IOR must ensure that the product classification is accurate, making sure that imported goods have been appropriately valued. They will also be responsible for the payment of fees, duties and taxes associated with importing goods, as well as completing the required documentation and paperwork.
The importer of record is the entity liable for all risks associated with clearing the goods.
When importing goods, you must comply with the customs requirements of the destination country. The most common documentation requirements include:
- Product classification – this will detail the type and value of goods being imported
- Import and export licenses – proof that you have the permission to import goods
- Permits – specific documentation relating to your importing activities
- Fees/Taxes/Duties – when paying associated fees, taxes or duties, the associated paperwork will need to be filled out
- Power of Attorney (POA) – documentation that appoints a power of attorney to take on legal responsibilities, acting on behalf of the importer of record when they are not on site.
Countries may also require local regulations and rules to be followed, for which further paperwork and documentation may be required.
Who Can Act as an Importer of Record?
Any locally registered entity can act as the IOR. The importer of record must have a presence within the destination country in order to act as such.
In some cases, the consignee (the goods at the time of import) will act as the importer of record; however for more complex transactions it may be necessary to appoint a customs broker or importer of record service.
Appointing an importer of record helps to avoid confusion between suppliers, distributors and end users as to who owns the goods. At the time of import, the IOR temporarily becomes the owner of the goods and assumes all responsibility relating to the import process.
The power of attorney may also act on behalf of the importer of record with the proper documentation.
Definition: the entity who imports the consignment and has a financial stake in the importing of the goods.
Definition: the entity recognized by customs to be the legal exporter of the goods from one country to another. The exporter can be a business, individual or a company acting on behalf of the exporter as their exporter of record.
Definition: the owner and recipient of the goods on import. The consignee does not take ownership of the goods until after they have been cleared by customs. The consignee can be an individual or a business entity. They can also be both the importer and the consignee if a business imports goods for internal use, storage or distribution.
Definition: an agent or broker external to the business, who acts as the importer of record, taking on the legal responsibility for documentation, fees and compliance.
How to Become an Importer of Record
To become an importer of record, you will need to apply for an importer of record number. There will likely also be a fee involved in gaining this. You will need to provide documentation such as proof of identity and a power of attorney declaration.
You will need a good working knowledge of the importing process, a presence within the importing country and should feel comfortable taking on the legal requirements relating to customs clearance. Should all the requirements not be fulfilled fines and penalties may be imposed. These will be the responsibility of the IOR to pay. Shipments may also get stuck at customs for which demurrage charges will apply.
Find out more about demurrage
If you are not familiar with the process, using an importer of record service can help to avoid any nasty fees or delays.
Customs and Compliance Considerations
It is the IOR’s responsibility to ensure they remain compliant with the laws, regulations and statutes of the country they are importing to. This should be done via self auditing programs, compliance tools, training and more. This is known as voluntary compliance.
The appointed IOR is also subject to enforced compliance. Enforced compliance includes inspection on imports, documentation audits, monetary penalties, civil penalties, criminal penalties, and investigations.
Some government agencies can overrule the IOR and deny entry to imported goods if they believe they may pose a threat. Agencies such as this include the Environmental Protection Agency (EPA) and the Food and Drug Administration (FDA).
Streamlining Your Global Supply Chain
Importing goods on a global scale can be an extremely complex process. The role of the importer of record is to ensure this runs smoothly. When suppliers, distributors and end users are involved, important things can be missed. This can result in stuck shipments, penalties and fines.
The supply chain can be effectively streamlined by choosing to use an entity such as TecEx as the importer of record. They will take on all the necessary responsibilities associated with importing goods, ensuring first time customs clearance. This minimizes the risk which can save you both time and money.
With a dedicated importer of record, you can also be confident that nothing will be missed. For other people in the supply chain, they may also have a wide range of other responsibilities that could make gathering the necessary documentation difficult. Importer of record services can improve accuracy, efficiency and give peace of mind.
Does the IOR own the goods?
In some cases, the importer of record is also the owner of the goods; however if a third party service such as a customs broker is used, they will take temporary ownership of goods until cleared through customs. Once cleared, the consignee will take ownership.
An IOR number is a unique number given to the importer of record by the government of the country you are importing to.
The consignee is the entity that takes ownership or responsibility of the goods once they have been cleared. In cases where the goods being imported already belong to the company in-country and are for internal use or storage, the consignee can act as an importer but, they are not always the same entity.
Yes, if goods have been shipped under DDP terms (delivered duty paid), the shipper can also act as the importer of record.
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