In international trade, it is important to follow all the required documentation and regulations not just while seeking clearance from customs department of the origin country – India, but also when goods are imported into the destination country. To effectively handle the global supply chain and ensure that necessary compliances are met at the time of import, an Importer of Record becomes a crucial part of the process. In the USA, an Importer of Record is an individual who is responsible for ensuring compliance with all the state, local and central laws at the time of import for a particular product. The chances of international compliance violations are minimized with easy record keeping and minimal efforts.
What is an Importer of Record?
An Importer of Record (IOR) is a person who ensures all import products are documented as required by the Customs and Border Protection (CBP) in the USA. An IOR is responsible for filing taxes, duties and legal documents related to a particular imported shipment. The inspection and clearance done by an IOR is crucial as it helps detect any unlawful activities, while also regulating the payment of import duties1.
What are the customs and compliance
considerations in the USA?
In a few cases, the Customs and Border Protection in the USA has strict compliances depending on the documents submitted and products being imported into the country. These types of compliances are called enforced compliances2. Following are the enforced compliances:
• Examination of import samples
• Assessment of penalties
• Investigating into business history of the exporter
• Criminal and civil penalties (if any)
Apart from Importer of Record, government agencies in the USA also hold the power to stop the entry of certain products into the country on account of potential threat. Following are the agencies that are responsible for entry of such products:
1. Environmental Protection Agency (USEPA)
2. Food and Drug Administration (FDA)
3. Consumer Product Safety Commission (CPSC)
What are the roles and responsibilities of an IOR?
An Importer of Record holds many responsibilities in streamlining shipping services like fulfilling the requirements of the customs department and ensuring all the entry documents are ready. Following are the list of responsibilities of the US Importer of Record:
• Initial checking and classification of the imported goods
• Ensuring the correctness of documentation and shipping paperwork of the goods for smooth entry into the destination country
• Ensuring that all compliances and legal requirements are fulfilled at the place of import
• Paying duties, tariffs, and other required fees
• Taking responsibility for the accuracy and accountability of the goods at the time of import
• IOR also has temporary ownership of the consignment till the imported goods are completely accepted for delivery
While importing the shipment, an IOR is expected to verify the following documentation:
- Product classification: Details about type and value of goods being imported
- Import and export licenses: Permits and licenses for export and import
- Fees, taxes and duties: Receipt and paperwork of all the associated fees and taxes at the time of import
- Power of Attorney (POA): Documentation that classifies a person on behalf of the IOR to take the authority of the goods at the time of import
- Others: Any compliance requirements particular to the importing country
Who can be an IOR?
An IOR can be the customer, purchaser or consignee who is importing the products into the destination country.
A person who is the final owner of the products
A person exporting goods to the destination country
The owner of the shipment – a business or an individual can be both importer as well as a consignee if they import the products for their internal use
A legal body hired to handle paperwork during customs clearance. They do not check taxes and duties at the clearance, but only stay updated about the custom regulations and manage required paperwork. Whereas, an IOR checks all the taxes and duties and keeps an update about all the compliances and regulations.
Importer of Record is an important step in the export process from India. It is recommended that you obtain the necessary documents and licenses before shipping your products.
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Published on May 13, 2022.
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*Map not to scale. The map has been used for design and representational purpose only, it does not depict the geographical boundaries of the country. These do not conform to the external boundaries of India recognized by the Survey of India.