There is little that is straightforward about international trade. From regulations on imported goods to compliance issues, the trade of two parties over international lines requires a wealth of knowledge and expertise. From following specified regulations to filing correct documents for customs, securing imported goods can be a complicated and time-consuming process.
According to Customs and Border Protection (CBP), an Importer of Record bears the responsibility for ensuring compliance with all importing laws. This individual or business can be the shipper, receiver, or a third party. Oftentimes, IOR designation is determined by the Incoterms of the shipment.
If you need help with a current or upcoming shipment, our team of import experts and Licensed Customs Brokers are available to assist you. Whether you’re the importer of record or another party involved in the shipment, we’ll use our knowledge and experience to support you.
As noted above, the individual or entity that is responsible for ensuring import compliance is known as the Importer of Record. This individual or entity assumes legal responsibility for the imports and assumes temporary ownership of the imported goods.
Depending on the Incoterms of the shipment, the Importer of Record will vary. For terms such as EXA, FCA, FAS, and FOB the buyer/consignee is responsible for all necessary import requirements. Under other terms like DDP, DAP, and DPU the seller takes on this important task. Regardless of the situation, it’s worth noting that either individual or entity can hire a Licensed Customs Broker to act as the Importer of Record. Licensed Customs Brokers, along with freight forwarders handle numerous pieces of the supply chain when it comes to importing goods.
There is a lot to know when it comes to Incoterms. For more information, take a look at our blog What Are Incoterms? We take a deep dive into the topic so that you gain a full understanding of all relevant terms.
The duties and responsibilities of an Importer of Record are numerous and critical. With so many important tasks to be completed, it’s imperative to be aware of exactly what needs to be done.
Below are the responsibilities of an Importer of Record:
Forgetting to execute any of the above tasks or completing them incorrectly can have disastrous consequences. Daily fines for held goods, harsh financial penalties, and seized goods are just a few that can occur when these things aren’t done properly. If you’re acting as the IOR yourself, be certain that you have a complete understanding of what’s required and needs to be done. If you’ve hired a third party, clearly communicate all of the details of your shipment to ensure nothing is missed.
If you need help navigating customs requirements, our experts can help you. Our Licensed Customs Brokers can assist you. They’re licensed by the CBP and have extensive experience handling tricky government regulations and more.
The Importer of Record is not to be confused with the consignee. While they can and sometimes do overlap, they are not intrinsically the same role.
The consignee of a shipment is the individual or entity that is the end receiver of the goods. Many times, a consignee will hire an IOR since a consignee is simply to whom the imported goods belong to after they have traveled through the U.S. port of entry. While the IOR is responsible for the goods at the time of import, the consignee is who imports are ultimately shipped to.
In instances of freight-forwarding, as an example, a freight forwarder can take on some of the responsibilities of the Importer of Record. However, they won't be listed as the Importer of Record for a shipment. Only the owner or purchaser of the goods being shipped or a Licensed Customs Broker can act as the Importer of Record
When it comes to actual ownership of the goods being imported, this question regularly comes up. Typically, clarification is needed when the importer of record is different from the final recipient of the goods. In all situations, the importer of record does own the goods. The length of time for this ownership varies on a case-by-case basis and is ultimately determined by the Incoterms of the shipment.
In situations where the IOR is also the final recipient of the goods, ownership of goods transfers according to the Incoterms and is permanent from that point on. For example, in a FOB shipment, the ownership of goods transfers to the IOR when the shipment is loaded onto the ship at the departure port.
On the other hand, if a third party like a freight forwarder is involved, they can take temporary ownership of the goods during the import process. They may even store goods in a warehouse or consolidate the shipment further. This temporary ownership still operates under the Incoterms of the shipment. Once the goods have been transferred to the end recipient though, ownership transfers from the third party to the final owner.
When it comes to who should ultimately be the Importer of Record, there are a number of details to consider. The choice really comes down to the specific details of the shipment and the needs of the parties involved.
When deciding who should be the Importer of Record, these are some of the questions you should ask to ensure you are making the right decision:
Make sure that as you answer these questions, you are honest with yourself. If, for instance, you think you could provide your own Importer of Record services in the short-term, but would not be willing to keep receipts for five years or need help securing logistics, a high-quality IOR may be something you need to look into.
When finding your Importer of Record, the goal is to improve the bottom line of your company by expediting customs clearance.
One of the major advantages of imports in the United States is the ease of conducting international trade. Oftentimes, the United States (along with the EU) is referred to as an open market because of the ease of trade. One of the reasons that trade is relatively straightforward in the U.S. is due to the fact that if you have a business based in the United States, you can be your own Importer of Record.
However, just because you can be your own IOR does not mean you necessarily want to be your own importer. If it is your company’s first time dealing with imports, you may very well want the expertise of a Customs Broker or Importer of Record. Depending on your industry, your IOR should be an expert in your field as far as shipping, logistics, and compliance services you may require. Also, the IOR can help with procuring paperwork and import permits, filing the paperwork for customs, and arranging the customs clearance.
A reputable Customs Broker should be upfront with you during your initial consultation regarding whether you truly need an IOR service or not, and help guide you through any questions regarding the value of an IOR in your specific circumstances. If you require door-to-door logistics or require a distribution center to hold your imported goods, working with an IOR can prove invaluable.
Foreign manufacturers and suppliers can also act as their own importer of record. This can be used as a competitive advantage compared to other suppliers and manufacturers. To learn more, read our article on foreign importer of record.
If you’re in need of help when importing goods, and aren’t sure exactly what documents to file, or what taxes and duties you will be required to pay, a customs broker can be extremely helpful.
Our team of customs experts and Licensed Customs Brokers can help with the following:
We are experts in multiple fields of imports, and our friendly agents can help answer any questions regarding imports. Give USA Customs Clearance a call today to set up your consultation to see how we can best assist you in making sure your imports are easily handled and dealt with in an efficient, secure manner. We can discuss any importing issues you have, help you purchase a customs bond, and make importing goods into the U.S. a simple and hassle-free process.
For more information, give our team a call at (855)912-0406.
If we were to use a supplier as an IOR for material going over the CA border... since they will be the IOR, are they technically the owners of that material? Or can we still own the material that will be in their facility?
I have a question about how to become the IOR for goods such as food and alcohol (bottled and bulk). My largest concern is if it is a flat fee or a recurring fee for every import we would bring into the US. To give you a bit of context, we are a distillery that partners with other distilleries that would import goods or bulk spirits from other countries to be brought into the USA.