Are you an e-commerce seller taking the first step towards international shipping? If so, you might be feeling overwhelmed by the amount of terminology you need to learn.
As an international seller, you need to be aware of customs laws and regulations. Otherwise, you may be breaking the rules, which can lead to costly penalties for your business. To avoid customs delays and fines, it’s important to get up to speed on key terms and their definitions.
In this guide, you’ll learn what an Importer of Record is, why it’s important and who can act as one. As a result, you’ll understand your responsibilities and any next steps you need to take.
What Is An Importer of Record?
An Importer Of Record (IOR) is the party responsible for meeting local customs regulations and legal requirements when importing into a foreign country. When imported goods arrive at customs in a foreign country and go through clearance, the IOR works with customs officials to document and value the goods and produce payments for duties, fees, and tariffs. An IOR is a role required by the U.S. Customs and Border Protection and recognized by many governments. The more you learn about the role, the better chance your business will succeed in international markets.
Who Can Act As An Importer Of Record?
An Importer Of Record can be any locally registered entity in the destination country. By “registered entity” we just mean someone with a tax registration happy to be held responsible for the item as it’s imported. That includes:
- The owner of the shipment,
- The consignee,
- An authorized customs broker,
- And, in some cases, the purchaser of the shipment (Keep in mind, there is no buyer when it comes to importing to an Amazon FBA warehouse, so the buyer probably won’t be a possible IOR for your business).
Can the Shipper Be the Importer of Record?
Yes, the shipper can be the Importer of Record. The owner or purchaser of the goods is usually the IOR, but there are no laws that restrict the shipper from assuming this role. They would take on the usual responsibilities including filing documentation, paying duties and taxes, and complying with local import regulations.
Importer of Record Responsibilities
The Importer Of Record operates on behalf of the shipper. The IOR essentially takes on the legal responsibility of the goods until they’ve been accepted by a distribution center or another recipient.
An Importer of Record’s responsibilities include:
- Ensuring the imported merchandise is classified, valued, and documented according to international laws and regulations,
- Filling out the commercial invoice correctly,
- Assessing and paying taxes, duties, tariffs, and fees for the import,
- Ensuring the shipment follows any other local laws related to import regulation,
- And being the point-person accountable for the imported merchandise at the time of import.
The IOR also needs to keep track of the import records—and these notes have to be thorough. An IOR service provider is required to identify and maintain up to 40 pieces of information about each shipment, including:
- Import permits and licenses as well as export permits and licenses,
- Local rules and regulations paperwork,
- And documentation and receipts of all payments.
Under the North American Free Trade Agreement Implementation Act of 1993, these documents and records must be maintained, usually in their original format, for five years.1
What Are The Risks For Importers Of Record?
The Importer Of Record helps ensure your happy customers receive their goods and keeps your company above board legally. The IOR is a role governments take very seriously, as the misrepresentation of import locations and processes puts countries at considerable risk.
Breaking the rules can result in:
- An audit and investigation at any time,
- Enforced compliance measures such as a self-auditing program and staff training,
- And penalties of $100,000 or more.
For any business breaking into the international market, these penalties can throw you off course or even put your entire business at risk. That’s why, ultimately, businesses should use an IOR they can trust when importing goods to a foreign country.
Benefits of Using an Importer of Record Service
If you’re new to international shipping, using an Importer of Record service can be highly beneficial for your business. Here’s why:
If you use an IOR service, your partner will handle the complexities of international shipping for you. By drawing upon their experience, they can ensure your products reach your customers efficiently and on time.
Local customs laws and regulations are complex, as they differ from country to country. If you partner with a specialist, they’ll have a deep understanding of these regulations, so you can remain compliant and avoid delays, fines and penalties.
If you’re not familiar with the customs clearance process, it can take a lot of time to manage the process from beginning to end. By using an IOR service, you can offload this burden, and focus on other tasks that will help grow your business.
Customs compliance specialists have established networks with customs authorities and shipping partners. As a result, they can establish an import management process that’s optimized to be cost-effective.
Ready To Multiply Your E-commerce Customers?
An e-commerce seller holds the risk through every leg of the shipping journey—whether by land, air or carrier pigeon—so it’s critical to rely on resources you can trust that will follow the local law of the destination country you are shipping to.
If you’re ready to open up your sales to international customers but are overwhelmed by all the red tape, Zee can help!
Consider Zee your personal guide to international e-commerce success. We operate as an IOR in multiple countries and can navigate the ins and outs of international shipping so your company can thrive. We’re always ready to pick up the phone, solve problems, and help pave the way for your products to clear customs and reach their destination.
Let Zee handle the burden of import bureaucracies so you can focus on what you do best—building a business you’re proud of.
Learn more about our Importer of Record (IOR) services.
- U.S. Customs and Border Protection (CBP). What Every Member of the Trade Community Should Know About: Recordkeeping. https://www.cbp.gov/sites/default/files/assets/documents/2016-Apr/icp027_3.pdf