The legal definition of an Importer of Record (IOR), as a term used in Customs Law, refers to an importer, whether an entity or individual, who is responsible for ensuring that legal goods are imported in accordance with the law of the place in which they are arriving. The Importer of Record is responsible for filing all legally required documents and making payment for the assessed import duties and other taxes on the imported goods.

In shipping terms, an Importer of Record is the entity in the destination country responsible for:

Ensuring the import is 100% compliant from a customs perspective (licences, permits and import permissions)

Making all necessary declarations regarding the shipment to customs

Preparing and submitting all filings relating to the import process

Making full payment for the duties and taxes related to the shipment

The Importer of Record takes on the following four risks when acting as the Importer:

  1. Audit risk – depending on the local laws and regulations, the Importer of Record is open to be audited for any transactions that it has been party to for up to 7 years after the import is complete;
  2. Financial risk – the above audit can result in subsequent revaluations of the import resulting in larger tax bills and penalties relating to the import;
  3. Legal risk – non-compliance with import laws and regulations could result in the loss of import licences and, for the importing entity, legal action against the entity and its directors;
  4. Operational risk – improper importing procedures may result in the shipment being temporarily held or permanently seized by customs because of non-compliance with local import regulations.

What is an IOR in shipping?

Practically speaking, an Importer of Record is the “ship to” entity, or consignee, on shipping documents. The IOR is the entity to which the shipment is consigned. This entity could be different from the final delivery address but the IOR will always be the party responsible for receiving the shipment upon entry into the destination country.

Foreign Importer of Record or Third Party IOR services

When you ship IT hardware or networking equipment into a country in which your business does not have a registered entity that can act as the local Importer of Record, you carry an almost certain risk that your valuable equipment gets stuck in customs, with customs officials demanding a local IOR to take responsibility for the shipment. In the IT industry, it is often the case that you do not have import capabilities when shipping to a data center in a foreign country, either for your own entity or on behalf of your customer. Similarly, this lack of import capability often occurs if you are shipping to a foreign branch of your customer’s business, if the customer wants a local purchase order (not in the destination country) or if the customer simply does not want to get involved with customs clearance due to lack of knowledge or the complexities related to importing IT hardware.

In the above instances, shipping terms such as Delivery Duty Paid (DDP) will be requested, or put simply, a door-to-door delivery solution is required. This results in a situation where you require a third-party registered entity in the foreign country to act as the local Importer of Record.

Turn to our Turnkey IOR Compliance Solution

TecEx is a project manager, Importer of Record and compliance partner to large high-tech corporates and multinationals, including some of the largest cloud, CDN, software and IT hardware providers across the globe. We provide a complete door-to-door solution to enable the movement of high value, large scale technology components to go cross-border in over 200+ countries and territories.

When using our Importer of Record services, the clearance and filing is done in TecEx’s name. As a result, all tax payments and associated risks lie with us. It’s our business to ensure complete import compliance to guarantee smooth and efficient customs clearance and logistics, every time.

TecEx provides corporates and multinationals with a full door-to-door service through which we:

  • Prepare your shipping documents;
  • Pre-approve all parts to be shipped;
  • Apply for all required licences and permits;
  • Arrange international transport using our global carrier accounts;
  • Clear items through customs at the required destination/s;
  • Make final delivery to the specified destination in country; and
  • Provide all local support required to ensure successful, predictable clearance and delivery.

Our simple quoting process and holistic operational solution will empower you to grow your business in over 200+ countries and territories.

Importer of Record and IT hardware – Specific Compliance

Your need for a local entity that is willing to act as an Importer of Record in the destination country is just one side of the coin – if you are shipping technology equipment to your foreign offices or for clients’ global data centers, branch offices or edge sites, you will need to navigate the complicated maze of ever-changing compliance and documentation requirements needed to get your equipment delivered without major delays.

Most technology equipment that is shipped contains wireless capabilities or is highly encrypted and is therefore considered dual-use in nature by the majority of governments and import bodies around the world. The term “dual-use” refers to the ability of the equipment to be used for either the specified and approved purpose or misused for causing harm. These types of goods are highly regulated and come with a multitude of compliance requirements in order to import them successfully.

TecEx’s knowledge is unmatched when it comes to current and up-to-date global import compliance requirements. Our vast industry knowledge regarding networking and IT equipment, as well as continuous deep research into changes in tax laws, results in peace of mind and accurate delivery times to all 200+ destinations that we offer. This means that we get your technology equipment into the destination country as quickly and as easily as possible, ensuring that your or your client’s expectations and deadlines are met.

What does “Dual-Use” mean for an Importer of Record?

Due to the highly regulated nature of high-tech networking equipment and IT hardware, the Importer of Record is responsible for properly declaring the use of the equipment being imported. This can include, but is not limited to:

  • Ensuring that the importing entity is registered with local regulatory bodies as an authorized importer with a valid import licence for the many different types of import restrictions applicable to IT hardware;
  • Applying for the import permits related to the specific equipment being imported and declaring all specifications of the related hardware;
  • Where needed, arranging for an inspection of the hardware being imported as well as the testing of this hardware to ensure it aligns with the conformity requirements of the relevant regulatory body in the destination country;
  • In some countries, import regulations might require the Importer of Record to arrange a formal, rigorous testing process carried out by a third-party professional body for the equipment being imported; and
  • Ensuring the equipment being imported is declared under the correct Harmonized Tariff Schedule (HTS) code.

Being an Importer of Record (IOR) is therefore not simply having a trading entity or foreign tax registration in the destination country, but rather encompasses a whole host of responsibilities and compliance requirements that must be satisfied with absolute certainty for each and every shipment.

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