Understanding all the intricacies of international trade takes a lot of work. Through years of experience and acting as Importer of Record (IOR) to over 200 destinations, we've developed a bulletproof guide that’s key to scaling your business.
What Is an Importer of Record (IOR)?
Put simply, an IOR is a legal entity entrusted to move a shipment through customs while adhering to all compliance regulations and import restrictions. This entity is recorded on all entry documents and is liable should the shipment not comply with the destination country’s import laws and regulations.
An Exporter of Record (EOR) is similar and applies to getting gear out of a country. This also requires following stringent customs compliance requirements.
Responsibilities of the Importer of Record (IOR)
The IOR is entrusted with ensuring all legal requirements are met before the shipment can clear through customs. This entails making sure that the product classification is correct and that all imported goods have been accurately valued.
The IOR is responsible for the payment of duties, tariffs, and taxes and for completing all required compliance documentation and paperwork. Above all, the IOR is liable for the shipment and is subject to any risks associated with importing dual-use goods.
What an IOR Must Consider
The most common documents include:
- Product classification details the type and value of the imported goods.
- Import and export licenses – this is proof that you have permission to import or export goods.
- Import permits – specific documentation relating to your importing activities.
- Fees/Taxes/Duties – when paying associated fees, taxes, and duties, the associated paperwork needs to be filled out.
- Power of Attorney (POA) – documentation that appoints the entity to take on legal responsibilities, acting on behalf of the Importer of Record when they are not on site.
- Country-specific – each country has its own specific niche customs requirements and regulations. The IOR must have an up-to-date understanding of this in order to facilitate first-time customs clearance.
Who Can Act as an IOR?
When deciding who will act as the Importer of Record (IOR), it is essential to understand the role of the IOR. The IOR helps avoid confusion over who owns the goods during the import – this then feeds into who pays custom duties and taxes, as well as who assumes the import risk. During the time of import, the IOR is the temporary owner of the goods and takes on all the risk associated with that import process.
- Only a locally registered entity can act as the Importer of Record. They must have a physical presence in the destination country.
- Sometimes, the consignee can act as the IOR. However, for complex transactions, you need a licensed customs broker and an Importer of Record service partner.
IOR Definitions
Consignee
The owner and recipient of the imported goods. The consignee doesn’t take on the ownership of the goods until customs have cleared them. This entity can be both the importer and consignee if a business imports goods for internal use, storage, or distribution.
Exporter
This entity is recognized by customs as the legal exporter of goods from one country to another. The exporter can be a business, an individual, or a company acting on behalf of the exporter as the Exporter of Record (EOR).
Owner/Purchaser
The entity that imports the consignment and has a financial stake in importing the goods.
Customs Broker
An agent or broker that is external to the business. The broker is responsible for submitting documentation and clearing goods through customs.
How to Become an Importer of Record (IOR)
You need to obtain an Importer of Record IOR number – this requires fees to be paid and various pieces of documentation such as proof of identity and a Power of Attorney declaration.
You also need a full working knowledge of the ins and outs of the importing process, have a presence in the destination country, and be comfortable taking on all the legal risks associated with customs clearance. Any errors or mistakes can result in major financial and legal penalties for you and your clients. As the IOR, you would be responsible for all of this. On top of this, any error in documentation can result in shipments getting stuck in customs – this may mean demurrage payments.
IOR Compliance and Customs
Ensuring the shipment complies with the destination country’s customs regulations, statutes, and laws is paramount for the IOR. All of this is voluntary compliance – done by decades of research and training.
The IOR is also subject to enforced compliance. This is everything from inspection of the imports, documentation audits, monetary penalties, civil penalties, criminal penalties, and investigations.
Some government agencies have the power to overrule an IOR and deny entry of the shipment if they believe the goods pose a possible threat. These agencies include the likes of the Environmental Protection Agency (EPA) and the Food and Drug Administration (FDA).
Importer of Record IOR FAQs
Does the IOR own the Imported 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 take temporary ownership of goods until cleared through customs. Once cleared, the consignee takes ownership.
What is an Importer of Record Number?
An IOR number is a unique number given to the Importer of Record by the destination country’s government.
Is the Consignee the same as the Importer of Record?
The consignee is the entity that takes ownership or responsibility of the goods once they have been through customs clearance. In cases where the imported goods belong to the company in-country and are for internal use or storage, the consignee can act as an importer but are not always the same entity.
Can the freight forwarder be the Importer of Record?
Not all freight forwarders or couriers may be willing or able to act as the IOR. They may not possess the correct licenses and permits required to perform a compliant import.
Who is the Importer of Record on a DDP Shipment?
Under DDP (Delivered Duty Paid) shipping, a seller is responsible for the shipment’s goods until the point at which it’s finally delivered. This occurs regardless of which mode of transport is selected.
Can I be my own Importer of Record (IOR)?
When selling, the local buyer in a sales transaction can act as their own Importer of Record (IOR). However, for cost and convenience, many choose to work with a licensed IOR service partner who can take control of all the relevant legal requirements and mitigate unnecessary penalties.
Let’s find the IOR solution that
works for you
Fill in the form to get in touch, and our expert team will contact you with a bespoke customs compliance solution to suit your needs.
Let’s find a solution that works for you
Fill in the form to get in touch, and our expert team will contact you with a bespoke customs compliance solution to suit your needs.