An importer of record (IOR) is essential when importing goods to foreign destinations. The IOR is responsible for ensuring a successful importation of goods from source to destination.
There are various reasons as to why you may need an IOR when importing. One of the critical reasons importers opt for an IOR is seeking help with customs compliance.
Ensuring compliance with customs regulations is a hard nut to crack for overly restricted destinations. This is because of the procedures involved, with some processes requiring your physical presence in the local destination.
Such complex regulatory procedures and the need for legal entity representation in other destinations are some of the reasons why IORs are invaluable.
However, most importers do not understand that not all IORs are suited for their import transactions. Although they may play similar roles, the IOR expertise required to handle every import transaction varies significantly.
Some industries have unique import requirements that only an expert IOR can handle. And that is what makes industry-specific IORs a go-to for every importer. But how do you choose an industry-specific importer of record?
This article walks you through the criteria for selecting the right IOR for your import needs. You will learn the unique importation needs of specific industries, why you should consider industry expertise and why it’s essential.
Let’s delve into the details.
How different industries have unique import requirements
Diverse industries in cross-border trade operate within unique import requirements, procedures, and challenges. IORs with expertise in specific industries are preferable to generic IORs to overcome the unique intricacies.
Here are the top three industries with unique import needs:
Importing healthcare and pharmaceutical products
The healthcare industry is critical in safeguarding public health, so imported products in this sector demand strict scrutiny. This ensures that imported medical equipment, drugs, and health products are safe for patients and the public.
Given the sensitive nature of medical devices and pharmaceuticals, healthcare products are subject to strict import regulations and licensing requirements. Hence, an importer of record must have the expertise to fulfil requirements such as Good Distribution Practices (GDP).
A GDP certification for pharmaceuticals demonstrates a distributor’s dedication to quality distribution practices throughout the entire supply chain. This cuts across raw material delivery and manufacturing plants to shipment of the drugs to end users. It’s a quality system for distribution centres and warehouses dedicated to pharmaceutical products and medicines.
Besides the GDP certification, there are various licensing requirements at every stage of the import process. Local regulations vary from country to country since each country has an authority responsible for regulating pharmaceutical product distribution.
For instance, in the UK, the Medicines and Healthcare Products Regulatory Agency (MHRA) is responsible for overseeing and inspecting clinical trial approvals. To facilitate timely and effective customs clearance, the importer must ensure all licensing requirements and certifications (local and international) are met.
Importing IT hardware and technology
One of the dominant challenges in the importation of technology is assigning accurate HS codes to IT hardware and software.
Importers find it challenging to determine the accurate classification for some goods, since the software product characteristics may match multiple HS codes. That makes a technology-specific IOR invaluable in the classification exercise. Accurate HS codes are essential as they lay the foundation for customs product valuation, duties and tax assessment. Incorrect HS codes can lead to the seizure of products, where discrepancies arise and certain licensing requirements are unmet.
Another complexity in the IT industry is security management for imported products. Security is critical, considering data breach risks and vulnerabilities in poor handling of technology. Hence, importers must adhere to privacy laws and regulations such as the GDPR in the EU. Provision of end-user agreements and quality assurance certifications such as ISO certification for import and export are also required.
Compliance with intellectual property laws including copyrights, patents, and trademarks is another reason to work with a technology-specific importer of record.
Importing food and agricultural products
The leading challenge in the food and agriculture industry is ensuring compliance with the diverse range of regulations. From a global perspective of the World Health Organization (for food safety regulations) and World Trade Organization (for trade and food standards), importers have a whole world of regulations to comply with.
Due to the complexities of ensuring food quality and safety, the importation of food and agricultural products brings together various specialists. This involves specialisations in agriculture, food science, health science, and natural science.
Hence, the right importer of record should demonstrate specialities in these fields. Additionally, since food and agricultural products are perishable, they demand specific transportation and storage facilities.
Key considerations when selecting industry-specific IOR
Selecting an importer of record (IOR) that aligns with the unique needs of your industry calls for careful consideration.
Here are the five key considerations to make when selecting the right importer of record (IOR) in your industry.
Industry-specific expertise and experience
Every country has a local authority responsible for regulating the importation of items in varied industries such as healthcare and technology. Even the World Trade Organization (WTO) has standards for such importations.
The regulations and licensing requirements ascertain the quality of imported goods and ensure local and global security.
An importer of record (IOR) with industry-specific expertise better understands the licensing requirements and regulations, the authorities responsible, and how to ensure compliance. For instance, a technology importer of record (IOR) importing IT hardware to a data centre abroad understands the current encryption level of the items. As such, the IOR will be quick in obtaining the relevant licensing permit and assigning the accurate HS code for a seamless customs clearance.
If the IOR has experience importing similar or the same products, it would be easier to navigate all customs requirements including settling duties and taxes and providing required documentation and paperwork.
Safe door-to-door delivery
According to Packaging Digest, 11% of goods arrive at the distribution centres or warehouses damaged. Damaging of goods can stem from poor handling, improper packaging, poor storage, or adverse weather conditions.
The last thing you want in your import transaction is damaged goods. Damaged goods are returned to the importer as they can’t serve the intended purpose. Returning goods implies lost sales and it can even ruin your reputation with the buyer. For this reason, you should consider an IOR in your industry who offers specialised door-to-door delivery. This ensures that your goods are well packaged, before and during transit, and do not break due to many hands touching them irresponsibly.
And if the weather challenges the importation of goods, an industry-specific IOR knows how to handle the goods so that they reach the destination country safely. It could mean adopting a specialized storage, or the fastest route to destination to avoid damage.
Customs clearance and legal entity representation
For some reason, you may not want to be the importer of record. Yet some countries have stringent local regulations that may change abruptly. It’s not uncommon for a shipment to be held until pending clarifications are made.
If your shipment is held because of issues such as discrepancies in HS code classification, an industry-specific IOR would handle it. Then your goods would be cleared of customs in the shortest time possible.
Note: If your goods are not cleared at the destination country for whatever reasons, the importer has a few days (depending on the country) then they become public property. Even worse, you may be penalised or charged, depending on the issue with the goods.
Technology integration
The most efficient way of overcoming supply chain disruptions is incorporating technology in managing import transactions. Established IORs understand the significance of technology, even in ensuring industry-specific compliance.
An importer of record (IOR) that utilises trade management software, updated with the latest changes in regulations as a go-to. This is because the IOR can see any possible disruptions in the supply chain and adjust ahead of an import transaction. Technology is also helping to determine the shortest yet safest path to an import destination. This is because there are smart routing software that provide insights into the weather, border and road safety, and route monitoring.
Additionally, technology helps IORs track goods from source to destination, providing details of the status of shipment and expected arrival time.
IOR service fee calculation
The tight profit margins importers set when shipping can easily be compromised due to poor cost management. From goods valuation to transportation, poor route choice, cost estimations, and inaccurate classification can lead to unnecessary costs.
Industry-specific IORs know the hidden costs to care about and avoid. They understand the cost implications of the choice of trade incoterm and the means of transportation.
Established IORs such as Blackthorne have even adopted an IT/networking IOR service cost calculator, that customers can use to estimate an import transaction cost.
Hence, consider an industry-specific IOR that offers transparent and efficient pricing techniques for importation services.
Benefits of industry-specific importer of record (IOR)
Choosing the right importer of record (IOR) for your industry offers you three key benefits:
- Secure importation: Your goods are safely transported from source to destination, fully compliant with industry regulations and standards.
- Timely delivery: Goods are cleared of customs in time, and shipped via the shortest yet safe route, using the safest transportation means. No holding, and no delays. Therefore, they move from an importer’s door to the buyer’s door in time.
- Optimised ROI: Since industry-specific IORs ensure there are no hidden or unnecessary costs, you attain you reap the most from your import investment and surpass your set profit margins.
Over to you
Undoubtedly, the benefits of selecting an industry-specific importer of record (IOR) cannot be overemphasised. From ensuring compliance with industry regulations to optimising your return on investment, a dedicated IOR will always come through for you.
That said, are you looking forward to importing IT hardware, telecommunication, or network equipment? You can explore the IOR services that we have been offering for over 25 years and let us know how we can partner with you.
