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 as we shine more light on the importance of an importer of record in importing goods.
This article will also break down the main parties in an import transaction and what roles they all play to make the importation process a success.The importer of record is the fiscal entity taking responsibility for the import of goods in to a different.
The purchaser is the party that imports the shipment and has a financial interest in the imported goods.
The exporter is the party (individual or legal entity) authorized 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).
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.
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.
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.
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.
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 center in the importing country.
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:
At the time of import, the owner of the goods can act as the importer of record.
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.
This is an agency or legal entity registered in the destination country to provide IOR services to importers.
This party can act on behalf of the IOR with the proper documentation.
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 so many requirements and details, which can 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, appoint an IOR to take charge of the whole import process.
The IOR 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.
An importer of record removes all the pressure from you. This party handles the whole import transaction process from start to finish. Your only role is to receive the goods after all clearance.
Contracting an importer of record 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.
These are some of the roles of an importer of record:
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.
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.
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.
An importer of records 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, say, 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.
Imports enter a country using different locations and transport means. So 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.
Still, figuring out whether you need an importer of record? Here is how to know when you need an IOR.
Hiring an IOR 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. Our importer of record services 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.