Customs territory from where they were sent. When it comes to expediting the whole import process, an Importer of Record (IOR) is a vital asset to have.
You could be wondering why you need an IOR in your exporter-importer equation. Well, stick with us in this blog as we shine some light on the importance of an importer of record in importing goods throughout the shipping process.
In this article, we also discuss the main parties in an import transaction and what roles they all play in making the importation process a success. The importer of record is the fiscal entity taking responsibility for the import of goods into a different customs territory from where they were sent.
So, what are the Other Parties in an Import Transaction?
- The purchaser or owner
- The exporter
- The importer of record (IOR)
- The customs broker
- The consignee
Who is the purchaser or owner?
The purchaser is the party that imports the shipment and has a financial interest in the imported goods.
Who is the exporter?
The exporter is the party (individual or legal entity) authorised by government authorities and customs to send goods from one country to another.
The exporter may sometimes not be the actual seller of the goods. This party may be exporting goods on behalf of the actual maker/seller of the goods. The exporter can be; an individual, business, or exporter of record (a company that acts on behalf of the exporter).
Who is the importer of record (IOR)?
The IOR is the party in the importing country responsible for ensuring that the imported goods comply with the importing country’s import regulations/requirements and receive customs clearance.
Who is the customs broker?
The customs broker is an agent/third party who deals directly with a country’s Customs on behalf of the importing party, relating to the importation, transportation, or storage of goods.
A customs broker arranges the customs clearance process during a shipment. This party ensures that the cargo (imported goods) meets all the regulations and standards for importing goods.
Who is the consignee?
The consignee is the owner and receiver of the shipment. In a simple export/import transaction, the consignee is the party that pays all the relevant import duties and taxes.
In an import transaction where you have an IOR, the consignee is the party that takes ownership of goods after customs clearance. The consignee can be an individual end-user or another business that orders goods from a business abroad.
When can a consignee also be an importer?
This usually occurs when a business imports its own goods for use, storage or distribution. In this scenario, the business is both an importer and consignee.
Now that we know all the parties involved in the import process, let’s understand the role of an Importer of Record.
What is an Importer of Record (IOR)?
This is a person, agency, or legal entity in the importing country legally responsible for ensuring that goods being brought into the destination country comply with its legal import requirements and regulations.
An importer of record ensures the imports’ customs compliance with all importing laws. The importer of record makes sure that all relevant export documents and permits are filed, that goods are correctly inspected and valued, and that all duties and taxes are paid in regard to the country of origin. For this reason, the IOR is also known as the declarant.
An importer of record is great if the seller or buyer doesn’t want to be the official goods’ importer or doesn’t want to get involved in the legal process. In this case, the IOR gains temporary ownership of the goods until they reach the final user or distribution centre in the importing country.
Who can Act as an Importer of Record?
The ‘who’ depends on the importing country’s stipulations but usually, any local resident or locally registered entity can act as an IOR.
Below are the parties who can act as importers of records:
The consignee
At the time of import, the owner of the goods can act as the importer of record.
Customs broker
A customs broker can take on the legal (official) responsibility for fees, documentation, and compliance. However, a customs broker is usually limited to simple shipments that don’t involve complex import certification or licensing procedures, financial protection, and after-sales support.
An IOR service
This is an agency or legal entity registered in the destination country to provide IOR services to importers.
The power of attorney
This party can act on behalf of the IOR with the proper documentation.
Why is it Important to Appoint an Importer of Record?
An IOR ensures that your goods leave the exporting country and reach their destination hassle-free in compliance with the law. An IOR is conversant with all the required paperwork, permits, and import/export regulations. Appointing them will help you have all the necessary import documentation in the required time.
The import process has many requirements and details, which can in turn make the process lengthy, complex, and frustrating if you are not conversant with them. To avoid making mistakes, delays, extra costs, and increased transportation risks, we always suggest appointing an experienced IOR provider such as Blackthorne to take charge of the whole import process.
The IOR solutions provider must know everything concerning a destination country’s import requirements, regulations, taxes, duties or fines, required permits and documentation, and everything else needed for customs clearance. This party handles the whole import transaction process from start to finish whilst removing all the pressure from you. This allows you to focus on your role; to receive the goods after clearance.
Partnering with an experienced IOR company can also help you avoid confusion about who actually owns the goods. Confusion about ownership is common when the import transaction has many suppliers, distributors, and end-users. The IOR gains temporary ownership of the goods until the goods are delivered to a distributor or end-user.
What are the Responsibilities of an Importer of Record?
These are some of the roles of an importer of record:
- To assess duties on imports based on their classification and value.
- To pay the taxes, duties, and fees on the imported goods.
- To deal with tariffs and reference a tariff database if needed.
- To ensure that the imported goods have the proper entry documentation.
- To obtain all needed authorisation, licenses, and certificates for the imported goods.
- To obtain custom bond paperwork for the imported goods.
- To make custom declarations with various countries about the imported goods. For example, importing and notifying the country of origin that its exported goods have different requirements than those from another country.
- To appoint a valid power of attorney if the importer is unreachable/absent at the time of delivery.
- To keep all import records for the imported goods.
- To prepare for inspections and audits from the nation’s borders.
- Keeps up to date with your shipment status reports.
- To help you avoid international shipping risks.
Key Points to Consider When Choosing an Importer of Record Service
- The importer of record should have expertise in your industry.
- The importer of record should provide a power of attorney. Do not choose an IOR which doesn’t. Doing so will make you incur more expenses.
- The importer of record should be able to cover all the details and regulations concerning the shipment. Do not contract an IOR who leaves you to do a big portion of the clearance work.
- The importer of record should be able to help you with the logistics after customs clearance. They should be able to either provide the transportation of the goods (by way of a distribution centre or do door-to-door delivery). If this is not the case, they should recommend a logistics company that provides quality services.
- The IOR provider should be someone or an entity whose services you can use for the foreseeable future on all your imports. Choose an IOR service which you can have a lasting business relationship with.
- Your chosen importer of record should guarantee the safety of your records for your imported goods for a minimum of five years.
Specifics that an Importer of Record should hold
Official authorisation to work in the importing country
An importer of record should be a national of the destination country or a legal entity or agency with the right to do business in that country.
Importer of record number
An IOR number verifies the legitimacy of the IOR service or agency. It shows that it is operating lawfully as a registered IOR service.
For an IOR service to be fully registered (get the IOR number), the entity should have paid the required fees and provided the necessary documentation such as proof of identity and a power of attorney declaration.
Extensive knowledge about the import sector in your country
The more well-informed an IOR is about your country’s import procedure, requirements, and regulations (destination), the more equipped and prepared it is to handle all your import clearance needs.
An importer of record should have a wealth of expertise and be knowledgeable about the import and export business and the shipping industry. This will enable this party to process the correct certifications, licenses, permits, product classifications, fines, duties, and taxes required by different importing countries on time.
Good repute and financial standing
An importer of record financial status should be trustworthy and reliable. This entity or individual should have a good standing with the law and operate above board. This is a person you entrust to take care of all the legal obligations enforced by the destination country’s customs when importing goods.
This party is also responsible for the financial needs of the import process, for example, paying all taxes and fees of the imported goods. To avoid getting scammed, you should entrust a person or entity of good repute and financially sound.
Extensive/solid presence in the importing country
Imports enter a country using different locations and transport means. Therefore, the IOR should have the workforce and connections to be present at all customs entry points to ensure that the customs clearance process occurs smoothly. The importer of record should have built a countrywide presence within the importing country.
Note: An IOR should be able and comfortable with taking on all the legal and financial responsibilities that come with their role. The IOR is liable for any problems during customs clearance before the importer gets ownership over the shipped goods.
So, you managed to get to here. Are you still figuring out whether you need an importer of record? We have the perfect next step for you, with our blog on when to know when you need an IOR.
An experienced IOR at every step of your journey
Hiring an IOR provider is the way forward to enjoy a hassle-free import process. It is the best way to ensure that your import transaction/process proceeds as it should.
For quick, efficient, and reliable importation services worldwide, trust Blackthorne IOR services. With over 20 years of experience in the field, Blackthorne provides the most efficient customs clearance. We offer legal entity representation in over 226 countries, providing hassle-free compliant, and cost-effective import solutions.
We ensure the efficient and safe delivery of your goods by partnering with efficient logistics companies worldwide. So, partner with us today and let us simplify and transform your importing processes.
