In the world of cross-border commerce, it’s important to note that different parties have clearly defined roles in order to expedite the process and manage the many important details. This ensures that there is as little friction as possible holding up an international shipment. The role of the exporter of record is certainly key in the shipping and customs process, so we’ll take some time to break it down.

Put simply, an exporter of record, aka EOR, is the legal entity – an individual or company – that is authorized and responsible for exporting an item from one country to another. Their name is on all the shipping and customs documentation, and the EOR is usually the owner or shipper of the goods being exported.

The EOR's role is vital in international trade, ensuring that exports proceed smoothly, legally, and in compliance with all relevant regulations. They protect all parties to the transaction, including exporters, importers, and government trade authorities, by ensuring that the cross-border movement of goods adheres to international laws and standards.

Key Characteristics of an Exporter of Record

Being an exporter of record comes with serious legal responsibilities. These include making sure the goods are classified and valued accurately; securing an export license (if necessary); paying taxes and duties to the importing customs authority, if required per the terms of sale; and maintaining detailed transaction records. Failure to comply with these requirements can result in fines, penalties, and reputational damage.

Rules Governing Who Can Be an EOR

To act as an EOR, an individual or entity must be legally registered in the exporting country. This gives them the authority to conduct trade, and makes them subject to federal export laws and regulations.

By law, the role of an EOR can’t be circumvented by any effort to unofficially transfer the designation to a party connected with the buyer who is acting as an exporter. This ensures that the legal responsibilities for compliance with export and import regulations are clearly defined and adhered to. Thus, the EOR is officially recognized and accountable for the export transaction.

To prevent export fraud, customs officials require the EOR to provide a physical U.S. address, an Employer Identification Number (EIN) or a Social Security number (if an individual) on export documentation to verify they are based here and doing business here. 

Some foreign entities may set up a U.S.-based company to qualify as an EOR. In some cases, this is done so that their customers in Europe, for example, buy goods from them instead of directly from the manufacturer. Or a foreign company may have goods held in storage in the U.S. that the company wishes to export and sell. In that case, there are services that can act as the EOR to facilitate export shipments.

Responsibilities of an EOR

The EOR is responsible for ensuring that the goods being shipped meet export criteria. For starters, they have to make sure the goods don’t require an export license. This applies to products that are so-called “dual use” for both civilian and military applications. In general, the EOR must comply with export regulations and secure all necessary approvals from customs authorities.

An exporter can check their items against the Commerce Control List (CCL) to see if a license is required. They also need to make sure goods aren’t being shipped to a country under export ban. This list currently includes Cuba, Iran, North Korea, Syria, Russia and Belarus. These regulations are in place to ensure exports don’t run afoul of national security or existing trade agreements.

The EOR has to guarantee that export documentation is managed accurately and promptly. This includes responsibility for commercial invoices, packing lists, export license (if required) and filing Electronic Export Information (EEI) documentation through the Automated Export System (AES). The EEI is mandatory for items valued over $2,500, or those requiring an export license, and must be filed with the U.S. Census Bureau. 

Exporters can file an EEI through the Census Bureau’s Automated Export System (AES) by logging into the U.S. Customs and Border Protection's Automated Commercial Environment (ACE) platform. After that submission is completed, the exporter receives confirmation of receipt in the form of an Internal Transaction Number (ITN). The shipping line will require an ITN as proof that an EEI has been filed, and will not load your cargo without it.

The EOR is required to maintain records of all transactions, including communications, shipping documents, and compliance checks, for five years, per the U.S. Bureau of Industry and Security (BIS), a division of the Department of Commerce.

Other Parties to Cross-Border Trade That Don’t Act as EOR

Drop shippers can handle the sale of goods from a U.S. manufacturer to an end customer overseas, without ever physically handling the product. In those cases, the manufacturer or another entity acting as an intermediary is the designated EOR, assuming responsibility for export compliance.

Foreign companies can sell their products to a domestic buyer who stores them here, then exports them to end customers overseas. The foreign company is an indirect exporter, but the domestic buyer acts as the EOR.

Challenges and Risks

As a legal entity, the EOR is responsible for compliance with evolving export/import regulations. They are liable for penalties, fines, and loss of export privileges for errors such as incorrect classification of goods, failure to secure necessary licenses, or violating sanctions and embargoes. For this reason, a good bit of due diligence and oversight is required to understand international trade laws and mitigate risks.

Conclusion

While cross-border trade is a lucrative opportunity to expand your business, careful attention to detail and research is required to take on the responsibilities of being an exporter of record. For this reason, it’s strongly recommended you find an experienced 3PL partner to guide you through all the nuances and requirements. This partner can also manage all the logistical details of export shipping, providing a seamless experience for both logistics and compliance.

I.C.E. Transport is a licensed NVOCC /OTI with years of experience providing full international shipping services between North America and all of Eastern and Western Europe. This includes customs brokerage, handling large out-of-gauge (OOG) shipments and complex, door-to-door deliveries. To learn more or to get a quote, contact the experts at I.C.E. Transport today.