IOR is defined as the entity legally responsible for importing goods or services from another country into their own jurisdiction. In the global marketplace, social media has become a popular platform for goods and services. As such, Importer of Record (IOR) is an important concept that must be taken into consideration when conducting international transactions through these platforms.
Social media platforms can be useful in engaging with your audience to improve and strengthen relationships with your target audience and advertise your products and services. It can also open new opportunities for networking and collaboration, driving new markets and increasing trade relations. However, with the increasingly demanding data privacy regulations and a rise in false claims and misleading information, social media can also damage your company’s reputation due to non-compliance issues.
Data privacy and policy compliance are even more strict in regulated companies such as healthcare, finance, insurance, and government. While companies may have some control over their internal process, IOR services can be useful in ensuring social media compliance for international relations.
This article discusses the relationship between IOR and social media, including its impact on customs regulations, the roles, and responsibilities of an IOR with respect to social media transactions, and challenges associated with meeting regulatory requirements for international purchases through these platforms.
As you may have observed, selling through social media such as Facebook pages and Instagram business accounts, even WhatsApp continues to gain prominence. But have you ever wondered how business owners can win the trust of their target audience? Or how safe it is to transact online? Inarguably, selling on social media demands compliance with certain policies, regulations, terms, and conditions against which your business is subject to termination and legal actions taken against you, and so is the case even with imported goods sold via social media. But how do IORs relate to social media?
Customs regulations are in place to ensure that imported goods and services comply with local regulatory requirements, such as safety standards, quality, or taxes. When you are placing an import request online, you may not have the trust and confidence of the product owner, but you can trust the importation service provider.
For instance, you are ordering a pair of shoes from an e-commerce site shared on social media but must be shipped from a store abroad. While you may be unsure of the shoe manufacturer, you want to believe that the seller has verified compliance with the importation terms and conditions. Additionally, you also have an agreement with the seller on what should happen if your expectations are unmet. And if you don’t agree with the terms and conditions, you can opt-out. Hence, custom laws, policies and regulations are meant to ensure customer satisfaction and safety to the end consumer.
Though the international trade rule may be unclear when it comes to digital trade, meeting existing inventory principles, rules and standards is critical in international business and IORs can help ensure compliance.
We have transitioned from the old international trade rules to digital trade across multiple social media platforms. While governments embrace technology, they are also careful to protect the partners involved in social media transactions, and hence the introduction of data governance and privacy regulations. Since digital trade is data intensive and most processes are conducted online from electronic document processing to electronic compliance and payment, the introduction of digital trade principles defines international trade relations.
Digital trade principles are standards used to ensure a secure and responsible exchange of digital goods and services in a global economy. The following are some of the principles providing guidance for countries to consider when establishing their own policies related to electronic commerce:
Digital trade should be open, fair, transparent, and non-discriminatory. Governments should avoid imposing unnecessary restrictions or burdens on cross-border data flows or digital transactions that could impede the free flow of information online.
For example, governments should not require foreign companies to use domestic servers as a condition for operating in their country.
To protect consumer privacy, security measures must be taken by businesses when collecting, storing, and sharing personal data across borders electronically. Companies must also adhere to international standards such as General Data Protection Regulation (GDPR).
For instance, companies need user consent before collecting any sensitive personal information from them like credit card details or addresses for marketing purposes.
Countries should develop regulations that protect intellectual property rights while ensuring access to creative works is made available at reasonable prices for consumers worldwide. This includes copyright laws which allow creators of original content such as music or books to receive royalties whenever their work is shared commercially over the internet.
Digital markets can become concentrated quickly due to network effects – meaning large tech firms can dominate an industry after they reach a certain size with little competition remaining afterwards. To keep these markets competitive, countries must have clear anti-monopoly rules which prevent dominant players from abusing their market power through predatory pricing strategies or other unfair practices against competitors.
With the digital trade at play, transactions and regulatory requirements are based on data security, digital trade principles, data governance, mutual agreement on what is right and wrong, business trust and electronic document processing. Digital trade barriers are restrictions imposed by governments on the flow of goods, services, and data across borders. They can take many forms, such as tariffs or taxes on digital products; customs regulations that limit international e-commerce; laws that require local storage of customer data or restrict cross-border transfers of personal information; and censorship policies that block access to certain websites.
Major international trade barriers include:
Countries involved in digital trade come to a mutual agreement on what is considered right between them, as guided by the digital trade principles. However, trading internationally through ecommerce and social media is still challenging due to the following issues:
The fast-paced technology has led to the automation of significant importation processes such as compliance. IORs can access the dedicated portals and submit required documentation and proof of compliance for required certifications and permits. Goods on transit can also be tracked from source to destination through real-time tracking and smart routing which helps in identifying the most cost-effective route for your shipment. Therefore, with social media transactions and digital trade, IORs can be helpful in the following ways:
By bridging the digital divide in digital trade IORs help to facilitate cross-border transactions and ensure compliance with any existing digital trade principles between the trading countries. By providing an efficient platform for businesses to conduct international trade online, IORs reduce the time and cost associated with traditional methods of trading while also increasing transparency and security.
This helps to create a level playing field between small businesses that may not have access to the same resources as large corporations or multinational organisations.
Additionally, by offering services such as electronic document processing (export/import document preparation assistance, product origin certification guidance), warehouse logistics support, online transactions, and compliance verification the IOR can help bridge the gap between those who are digitally connected and those who are not yet connected due to lack of resources or knowledge.
Some IOR providers such as Blackthorne have gone out of their way to provide technical expertise for IT equipment. With their wealth of experience, they can help in quality assurance for safety, product requirements specification and packaging, to guarantee customer satisfaction. After ensuring all the product’s requirements have been met, the IOR can then organise for shipping to the destination using top-notch tracking and route optimisation software for transparency and convenience. Having presented proof of compliance, you can have your product at the destination at reduced costs and within your convenience.
Reputable IORs have established a legal entity in nearly all parts of the world. The legal entity, coupled with years of experience in IOR service provision, provides the upper hand in identifying legal and customs requirements and any other requirement that may turn out a barrier to a successful importation.
In addition, with the automated business process, IORs can generate an audit trail for the processes, transactions and parties involved as proof of transparency and accountability. Hence, cases of inconsistencies would be unheard of and even some cultural differences would finally dissolve.
Technology keeps shaping international trade and opening new opportunities and ways of doing business and social media remains a reliable marketing strategy. While strict rules and regulations plus cases of insecurity limit some industries and threaten privacy and confidentiality, digital trade is here to stay.
It’s time to embrace technology and stay ahead of the digital curve to solve problems even before they exist. By preparing, you want to cope with technology, legal and policy changes with minimal adjustments. You may not need all the software and tools IORs are using. However, partnering with a reputable importer of record such as Blackthorne will keep you ahead of technology and allow you to seamlessly engage in international trade. So, why not get in touch with the team today and take the initial step towards a simpler and hassle-free trade experience today with Blackthorne? We look forward to hearing from you.