What does it mean to be an importer of record?
An importer of record is the entity that Customs will hold responsible for a shipment as it undergoes import clearance. This party can be the consignee, the owner, a forwarder or some other party with a vested interest in the shipment. The importer of record, or IOR as is more commonly referred to, need not be a single person. It can also be a company or legal entity. The obligations of being an importer of record are important to know. The IOR is directly responsible to Customs for penalties and fines arising from the shipment. If the IOR is an individual, he or she may also be exposed to jail time in cases of giving false information to Customs. The IOR must be able to answer any questions that Customs may have about the shipment. In case the shipment cannot clear Customs, the IOR will be responsible to Customs for any fees associated with the destruction of the product.
The IOR is responsible to ensure that information is correctly provided to Customs. This information can include value, quantity, HS code (or TARIC code), country of origin, weights, dimensions and product descriptions.
Being an importer of record is not simply an administrative formality and one should not agree to act as the IOR unless he/she is genuinely a party to a transaction.
Can a shipper be an importer of record?
This question is closely related to the question of whether a foreign entity can act as the importer of record. This depends on the regulations in the country of import.
Is consignee the same as importer of record?
Not necessarily. The consignee is the intended end receiver of the cargo. However, an IOR can be appointed that is not the consignee. Most of the time, Customs will expect the IOR to be in some way related to the shipment or clearly an interested party to the shipment.
How do you become the importer of record?
When doing import declaration, the Customs declarant will indicate the identity of the importer of record. Ideally, you would have agreed to act as the IOR before the declarant submits the information to Customs. In most countries, the importer will need to have prior registration with the Customs authority in order to act as the importer of record. However, most countries also allow personal shipments sent by parcel to be imported of individuals as long as the product value does not cross thresholds.
When individuals attempt to import products by themselves, they need to be careful of licensing requirements. Even if the value of the product is low, licensing controls usually still apply.
Importer of record services
Being an importer of record in some countries can be a tricky business. Hence, some companies may choose to outsource this responsibility to a third party vendor. This is unlike distributorships. By engaging a party to simply be an importer of record, the company will take full responsibility of the cargo during Customs clearance, however they will not be responsible for warehousing or sales. This is a very practical option especially for companies that want to test out new foreign markets.
Can the forwarder act as the importer of record?
Yes, the forwarder can act as the IOR. However, not all forwarders will agree to do so. In fact, most of the big name forwarders will not take on the responsibility of being an IOR on behalf of a company, as the risks posed are great. Any instances of non-compliance could cause the forwarders to lose AEO certifications, or other facilitative privileges.
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