What Is an Importer of Record, and What Is Their Role In International Shipping?
What is an importer of record? It refers to the party that is responsible for ensuring customs and legal compliance when importing goods to a given country. Typically, this role is assigned to the owner, purchaser, or consignee who owns the products during the importation. However, licensed customs clearance agents may also become an importer of record. Do you want to learn more? Then keep reading!
What Is an Importer of Record (IOR)?
An importer of record (IOR) is the entity in charge of the customs clearance process during goods importation. They take the liability for complying with the import regulations and are recorded in all the related documents, hence their name.
Multiple entities might be the importer of record. For instance, as the owner of goods, your business can become one when crossing the border. However, you could also outsource customs clearance services to certified customs brokers, who will then become the IOR despite not owning the goods.
What is the importer of record responsible for in detail? Namely:
Payment of duties, tariffs and taxes,
- Completing documentation, such as:
product classification,
import and export licenses,
import permits.
Interestingly enough, a consignee may also be the importer of records despite owning the goods only after they achieve customs clearance. More importantly, the entity that becomes the importer of record needs to have a fiscal presence in the destination country.
Becoming an Importer of Record
Let’s now take a brief look at how you become an importer of record. This is important for you even as an e-commerce owner—there are certain documents that an IOR needs to obtain to represent you, so knowing how to become one will help you learn how to start a partnership if you need an IOR.
First, an IOR needs to be registered locally. If it’s not a party involved in the import, it must be a licensed customer broker. Moreover, they have to obtain an IOR number. For that, they need:
Power of Attorney from the client,
proof of identity.
They also take liability for all potential issues regarding imports, so they have to be ready to face the consequences if anything goes wrong. This is why an IOR has to pay great attention to detail and knowledge of the law and customs regulations.
Why Should You Work with an Importer of Record?
What are the benefits of hiring an importer of record? We’ve prepared a short list for you—take a look below.
Customs Knowledge and Experience
An importer of record knows the customs regulations in a given country inside out. As a result, you don’t have to worry about potential delays, and your parcels will arrive safely and on time.
Lack of Fiscal Presence
One of the main benefits of working with an important record is the fact that you do not need to set up a fiscal presence in the target country. This way, you can reduce the amount of paperwork and optimise your operations financially.
Efficiency
Preparing for customs clearance often takes time. Take, for instance, applying the right HTS code when shipping your goods to the US. What if there is no straightforward category for your products? If you deal with customs clearance on your own, you need to think thoroughly about which code you want to apply.
When you hire an importer of record, this is no longer your responsibility. They need to find out which code will be the most appropriate (often by staying in touch with the local customs office). This way, you save a lot of time and resources; at the same time, you avoid the risk of making mistakes that could delay your shipments or put you in legal trouble.
The Takeaway
What is an importer of record? They are the party responsible for the legal side of an import. Outsourcing an IOR is a great way to eliminate errors and streamline your international operations. However, it’s not enough—you’ll also need an exporter of record for your returns management, so keep that in mind!
You might also read: What Are Incoterms®?
