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Eastern Europe Shipping Blog

Expert tips on smarter shipping between the U.S. and Eastern Europe, including shipping of heavy goods.

What Is an Importer of Record?

 

An Importer of Record (IOR) is the party to a transaction responsible for ensuring that imported goods meet the legal and regulatory requirements of Customs and Border Protection (CBP). This is hugely important because non-compliance with customs regulations carries serious consequences, including legal liability, fees and even seizure of cargo or suspension of an import license.

It is the IOR’s duty to make sure that all import documentation is in order and filed on time, that all duties, taxes and fees have been paid, and that all relevant customs regulations are adhered to. 

There’s a lot to know about the role of an Importer of Record in facilitating cross-border trade, so let’s take a deeper dive.  

 

What Are the Responsibilities of an Importer of Record?

importer of recordAn Importer of Record is responsible for paying duties, fees and taxes on imported goods. They also must ensure that all filings have been submitted properly, including the customs entry summary based on the commercial invoice, the bill of lading (BOL), and the packing list.

For some goods (food and beverages, pharmaceuticals, chemicals, cosmetics, etc.), further import certification is required based on requirements from the FDA, EPA, DOT and other regulating agencies. 

On the customs entry form, the IOR or their customs broker has to declare the value of the imported goods and enter the Harmonized System (HS) code, which determines the duties, taxes and fees to be paid.

 

Who Is the Importer of Record Under Different Incoterms?

How a transaction is structured determines what type of Incoterms (International Commerce Terms) are used, and that drives who the importer of record will be. For instance, under Delivered Duty Paid (DDP), the seller generally becomes the IOR, as they are responsible for handling customs requirements, paying import duties and taxes, and regulatory compliance.

Under an Ex Works (EXW) Incoterm arrangement, the buyer becomes the IOR because they take full responsibility for transportation as well as exporting and importing requirements. In EXW, the seller is only responsible for making the freight available for pickup at their location.

However, under both EXW and DDP, the seller or buyer can assign a third party, such as a customs broker, to be Importer of Record (more on that below).

There are several other Incoterms under which the buyer is the IOR, including:

  • FCA (Free Carrier): The buyer is responsible for customs clearance and duties.
  • CPT (Carriage Paid To) and CIP (Carriage and Insurance Paid To): The seller pays for transport, but the buyer handles import clearance and taxes.
  • DAP (Delivered at Place): The seller delivers the goods to the final destination, but the buyer handles import documentation and duties.
  • DPU (Delivered at Place Unloaded): The buyer is responsible for import clearance and taxes.
  • FOB (Free On Board), CFR (Cost and Freight), and CIF (Cost, Insurance, and Freight): The buyer handles import responsibilities and is the IOR once goods reach the port of destination.

 

Who Can Be an Importer of Record?

The IOR has to be a registered business entity in the country where the goods are being imported. In the US, for example, they must have a valid IRS Employer Identification Number (EIN) or an importer ID number assigned by Customs and Border Protection (CBP). In the European Union, an IOR must have an Economic Operators Registration and Identification (EORI) number. 

An individual can be an IOR, but that means assuming all legal liabilities and responsibilities for the imported goods, so it’s typically a business or their representative agent. 

 

Can a Freight Forwarder or NVOCC Act as Importer of Record?

Generally speaking, a freight forwarder or an NVOCC does not act as the IOR, as they don’t have a financial interest in the cargo, and as such do not take on the associated risks.

That said, these companies are experienced in helping ensure documentation is in order, the proper HS classification is used, and that shipments adhere to import laws, reducing the risk of penalties or delays. 

Primarily, a forwarder or NVOCC provides logistics services such as arranging transportation from the port to the final destination, or even door-to-door international transportation from the point of origin. 

With decades of experience in cross-border logistics between the US and Eastern Europe, I.C.E. Transport, with headquarters near the Ports of New York and New Jersey, has handled thousands of import shipments on behalf of its clients across many industries.

 

Speaking of Transportation and Logistics, Is the Importer of Record Responsible for That?

The Importer of Record’s primary responsibilities are handling customs clearance, documentation, and payment of duties, taxes, and fees. That said, transportation and logistics can fall under their scope, depending on their agreement with other parties. 

For instance, the IOR may be responsible for ensuring that transportation and delivery comply with customs regulations, but logistics management (selecting carriers, scheduling delivery, etc.) can be handled by a logistics provider.

 

Can a Customs Broker Be an Importer of Record?

Customs brokers can serve as the IOR in certain scenarios, but this depends on the specifics of the shipment and the importer’s requirements. 

When a customs broker agrees to act as the Importer of Record, clear contractual agreements are typically established to outline their responsibilities and liabilities. As with a forwarder or NVOCC, partnering with a customs broker simplifies cross-border transactions, reducing the administrative burden and ensuring regulatory compliance.

Most brokers tend to shy away from being an IOR because they don’t want to take on the associated risks, especially if they’re not familiar with the cargo. And, as noted, typically a company that has a financial interest in the cargo (buyer, seller or consignee) acts as the Importer of Record.

 

Can a Foreign Company Be an Importer of Record Without a Physical Presence?

Yes, but they must designate a US-based agent, such as a broker or forwarder, to handle customs clearance, filings, and CBP compliance. 

They must also apply for a Customs Assigned Number from CBP, which is typically done by a customs broker on their behalf. It’s used by CBP for persons or companies that do not have Social Security or EIN numbers.

 

Is a Customs Bond Required for Imports?

In most cases with US imports, the answer is yes. A customs bond, also known as a surety or import bond, is a legal contract between the Importer of Record, a surety company that sells the bond, and CBP. It guarantees that the importer follows all applicable customs laws and regulations and pays the required duties, taxes and fees. You can learn more about the requirements for customs bonds here. You may also be interested in our Small Business Survival Guide to Global Shipping

 

The IOR: A Key Player in the Import Process

As you can see, the Importer of Record plays an important role, ensuring that all documents are in order and fees, taxes and duties are paid so goods can clear customs and move out of port. 

I.C.E. Transport, a licensed NVOCC, ensures compliance with all aspects of customs clearance, including securing customs bonds, payment of duties and fees, and preparation of import documentation. They not only assist with your IOR duties flawlessly, but can also take charge of every aspect of cross-border logistics and transportation, including the option of door-to-door service, giving you peace of mind on every shipment. To learn more, contact the experts at I.C.E. Transport today.

 

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