When self-importing, you or the consignee can act as the importer of record. But what if neither of you wants to take on the import responsibilities?
Local regulations, import paperwork, and logistics requirements can complicate the importation process, especially for restricted goods. Sometimes, you may also lack the time or resources to manage the global supply chain obligations effectively on your own.
That’s where an IOR shipment comes in. It involves engaging a third-party importer of record (IOR) such as Blackthorne to handle the importation requirements on your behalf.
The agency, person, or legal entity you designate assumes full customs and legal responsibility on your behalf, ensuring compliance and timely delivery.
But what more do you gain by partnering with an IOR? What are the key requirements for an IOR shipment? And how can you identify the right IOR for your shipment?
Let’s dive in.
5 Benefits of IOR in International Shipping
An IOR shipment is beneficial in various ways, including:
1. Local Entity Representation
When importing into a foreign market, you must establish a local presence to facilitate effective fulfillment of customs procedures. Registering a local entity can be costly and time-consuming, delaying the market entry for your shipment.
An IOR utilises its local credentials to manage customs declarations, duties, and all import licensing requirements on your behalf.
2. Regulatory Compliance
You must identify the local regulations that apply to your shipment. Additionally, if you are importing licensed items such as IT equipment, you must obtain the relevant import permits and approvals before customs clearance.
In some import destinations, your physical presence may be required to facilitate in-country inspections.
A third-party IOR ensures your shipment meets the destination country’s regulatory standards. They foresee accurate classification of your items, obtain import permits, and liaise with customs officers for inspection and clearance.
3. Coordinated Logistics and Documentation
A successful and timely delivery demands determining how your goods will be transported and preparing transportation documents before shipping.
Additionally, you may have to coordinate several service providers before your goods eventually reach the final destination.
An IOR, on the other hand, prepares all shipment documentation and manages logistics on your behalf till the consignee receives the goods.
Some IORs like Blackthorne utilise route optimisation while tracking the status of goods for a safe and timely door-to-door delivery.
4. Cutting Unnecessary Costs
Unnecessary costs can emanate from various procedures in the global supply chain, including:
- Overpayment of duties or taxes due to inaccurate classification of goods
- Unexpected taxes, duties, or handling charges due to the wrong choice of shipping terms (incoterms)
- Return of goods, storage charges, penalties, or detention of goods due to non-compliance
- Demurrage and broker handling fees due to delayed clearance
- Damage to goods during transit, handling, or storage due to poor packaging
Expert IORs ensure compliance throughout the global supply chain procedures. They also engage certified freight forwarders and handlers to ensure safe packaging and transportation. Additionally, they track all shipping costs for transparency and accountability.
5. Ensuring Ongoing Compliance
Import regulations change with safety standards, new trade agreements, and customs updates. You must stay ahead of regulatory changes to ensure ongoing compliance, even long after the delivery of your goods.
IORs ensure ongoing compliance through:
- Continuous monitoring of tariffs, documentation, and customs requirements
- Keeping records of import transactions to facilitate future compliance audits
- Managing licences and permits for timely renewal
- Ongoing risk assessment and compliance audits to offer guidance and apply corrective measures
- Maintaining a structured compliance policy for various import destinations for the predictability of possible changes and requirements
IOR Shipment Requirements
Every country has its own technical, customs, and documentation requirements for imported goods that you, or your designated IOR, must fulfil. But does the IOR require anything from you (the importer) once you partner with them for your shipment?
While the IOR can handle all the import procedures from product classification to customs clearance to last-mile delivery, your input is essential.
The IOR may require you to:
Prepare a Clear Contractual Agreement Between the Buyer and Seller
Your sales contract and purchase order should clearly outline:
- Terms of shipment (incoterms) defining each party’s responsibilities, including who covers duties and taxes
- Valuation terms, including product price, freight, and insurance
- When the consignee becomes the legal owner of the goods
Confirm Intended Use and End Destination
The IOR needs your help in understanding:
- The final delivery address or recipient
- Any end-user restrictions related to controlled goods
- The intended use of the goods (e.g., installation, resale, internal business use)
Disclose End-User and End-Use Information
IORs perform end-user and end-use due diligence to prevent export control violations or sanctions.
You can be helpful in this procedure by providing the following information about the parties involved:
- The buyer’s legal name, registration details, and tax identification information
- End-user’s business information (if different from the buyer)
- Any government, defense, or restricted-party affiliations
- A summary of the intended use of the goods
Additionally, if you are already locally established in the destination country, your IOR will require:
- The local entity’s registration and tax details
- Any existing import licences or certifications issued to your business
- Local contact persons for delivery, inspection, or customs verification
Provide a Power of Attorney (PoA)/Authorisation Letter
You must issue a Power of Attorney or an authorisation letter that grants your IOR the authority to act on your behalf.
The document allows the IOR to:
- Pay duties and taxes
- File customs declarations
- Communicate with customs authorities
Communicate Promptly
Unexpected customs queries, document requests, or inspections may arise. And in case your IOR needs a piece of information or clarification from you, a timely response facilitates problem-solving and prevents storage or demurrage fees.
Import Terms (Incoterms) for IOR Shipments
Incoterms (International Commercial Terms) define the responsibilities, including risks and costs, that the buyer and seller share during importation. The document clearly defines who is responsible for what, ensuring accountability.
When a shipment involves an importer of record, Incoterms determine:
- Who pays import duties
- Who clears goods through customs
- Who is legally responsible for compliance in the destination country
The Incoterm you agree on also influences who serves as the importer of record for the shipment.
Some import destinations explicitly regulate who must act as the importer of record. In most cases, the IOR must be locally established, with a local address and tax registration number.
That means if you are the foreign importer, you may not act as the IOR unless you have a local presence.
While Incoterms are essential, they do not override local regulations. Hence, when developing the shipment terms, you must consider the destination country’s IOR requirements.
You can learn more about how shipping agreements affect IOR’s responsibilities from our previous guide on IOR responsibilities.
Factors to Consider Before Partnering with an IOR
An IOR shipment should protect your business from financial losses and compliance risks that you would possibly incur if you import directly.
Here are seven key considerations to make before choosing an IOR for your shipment:
1. 360° Regulatory Compliance
Your IOR should demonstrate a comprehensive understanding of import laws, export controls, sanctions, and product classification requirements in your niche market.
Additionally, they should be familiar with HS classification codes, dual-use goods regulations, environmental standards, and end-user due diligence protocols.
Such an approach ensures your shipment complies with all import regulations locally and internationally. In return, it safeguards your business against penalties, delayed delivery, and reputational damage.
2. Professional Competence
It’s important to determine the operational reliability of your IOR. This includes evaluating an IOR’s years of experience, professional recognitions and accreditations, and technical knowledge in handling international imports.
Other benefits to consider when evaluating professional competence include:
- An established professional relationship with customs authorities in your import destination
- Capability to handle changing customs, environmental, and technical regulations
- Post clearance support, including helping with compliance audits
3. Product-Based Experience
IT hardware and technology, food and agricultural products, and healthcare products are some of the highly regulated imports. An industry-specific IOR for such products is essential in identifying and fulfilling the import requirements.
For instance, importing telecommunication and IT equipment often requires type approvals and radiofrequency certifications. Additionally, IT equipment falling under medical classification may require health authority clearance.
An IOR experienced in your industry understands the technical requirements, certification procedures, and the relevant documentation for a compliant import.
4. Costs and Compliance Transparency
Without financial and compliance accountability, you risk handling hidden costs and settling compliance disputes, a costly and time-consuming oversight.
Consider working with an IOR who:
- Has clear compliance management procedures and risk management plans
- Utilises technology to optimise the effectiveness of the global supply chain operations, including real-time shipment tracking and route optimisation
- Provides a detailed cost breakdown detailing duties, VAT, customs charges, service fee, and any other import costs
For instance, Blackthorne leverages an IOR calculator that provides visibility into anticipated taxes, duties, and fees before committing to a shipment.
5. Local Presence
Your IOR should be able to offer entity representation in case you or the buyer is unable to act as the IOR.
Moreover, having a local presence allows the IOR to:
- Directly engage customs authorities
- Comply with local regulations
- Settle import duties and taxes
- Oversee in-country inspection
- Process relevant paperwork and
- Clear the shipment through customs
6. Service Scope
A transparent service scope ensures mutual accountability, eliminating gaps in responsibility that could potentially delay your shipment.
Different IORs handle varied services in the global supply chain depending on the import destination, client needs, and the nature of goods.
Most IORs handle paperwork processing, payment of duties and taxes, and customs clearance. However, some IORs like Blackthorne offer additional services, including EOR, freight forwarding, and export licensing.
It’s essential to understand the IOR, importer, and exporter obligations before initiating the import process.
7. Data Protection and Privacy
Industries such as tech, healthcare, and finance are prone to data breaches, which can have far-reaching consequences. Additionally, IORs handle confidential commercial information and personal data that can be compromised easily.
Ensure your IOR:
- Complies with GDPR and equivalent data protection regulations
- Maintains secure digital systems for handling invoices, permits, and Personally Identifiable Information (PII)
- Discloses how long they retain import records, and how they protect confidential trade information
Import IT Equipment with Blackthorne IOR
While compliance remains a top priority in our global supply chain operations, financial accountability is as important. We have built systems and tools that not only simplify import procedures but also keep your profit margins in check.
For over 25 years of IOR shipping, we have been identifying the risks of financial loss and providing solutions so you can make the most of your international shipments.
As a result, we have:
- Established a physical presence in over 200 import destinations
- Streamlined the global supply chain to handle all the import procedures on your behalf
- Incorporated a door-to-door delivery to avoid export control diversion and mitigate the risk of noncompliance
- Built an IT support system that operates virtually and physically in various destinations
- Supported IT equipment expansion globally with a delivery-to-data-centre solution
We are still expanding our global footprint and would love for you to scale your business to as many countries as the global market can support.
The goal is to serve as an enabler for technology equipment, including medical devices, to move to desired destinations compliantly and cost-efficiently.
Why not entrust us with your next IT equipment delivery?
You can call or email us at sales@blackthorneit.com so we can discuss the next steps for your IOR shipment.
