The role of the Importer of Record sounds simple enough, but did you know that it was created by the U.S. Customs and Border Protection (CBP) to help secure imports from terrorist threats and assure the payment of duties on all imported goods? Indeed, the Importer of Record carries the legal responsibility for the valuing, classifying, and assessment of duties on U.S. imports.
As simple as this may seem, many businesses fail to understand the value of an Importer of Record and how this role impacts global shipments. Fines may be imposed if the Importer of Record does not do his/her job correctly. There are also compliance challenges that the Importer of Record must adhere to as well. The role plays a vital role in ensuring the safe, on-time delivery to its designated destination.
Importer of Record: A Definition
An Importer of Record is the owner or buyer of products being imported into a destination country. The Importer of Record must ensure all goods are documented and valued, and is responsible for the payment of duties, tariffs, and fees for the imported goods.
The Importer of Record’s responsibilities includes ensuring the fulfillment of customs compliance on goods to the importing country. They do this by providing the appropriate entry documents, including relevant import permits for clearance through ports of entry; the payment of any duties, levies, or fines; product classification and certification; arrangement for customs clearance and any other obligations that fall to the importer.
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History of the Importer of Record
(Customs Modernization Act of 1993)
The role of Importer of Record was created by Customs and Border Protection (CBP) through the Customs Modernization Act of 1993 to assist in the security of imports from terrorist threats and ensure the payment of duties on all imported goods. The Importer of Record has the legal responsibility for the initial valuing, classifying, and assessment of duties on imports.
Compliance Challenges for the Importer of Record
The Importer of Record is required to ensure compliance with all necessary regulations and statutes through compliance tools, a self-auditing program, staff training, recognition from executive-level management, communication, and the Importer Self-Assessment Program. Although voluntary compliance measures are preferred by the U.S. Customs and Border Protection (CBP), an Importer of Record might be subject to enforced compliance.
Enforced compliance means inspections and examinations of imports, assessment of monetary penalties, audits of documentation, civil penalties, investigations into the Importer of Record’s business dealings, and additional criminal penalties.
Some government agencies can go beyond the Importer of Record and deny entry of imports based on possible threats to the welfare of the U.S. For example, a product may be refused by the Environmental Protection Agency, the Food and Drug Administration, and the Consumer Product Safety Commission. If this refusal occurs, U.S. Customs and Border Protection (CBP) does not assume responsibility for the importing of goods. Instead, U.S. Customs and Border Protection (CBP) may oversee the export or destruction of such goods.
Who Appoints the Importer of Record?
In most situations, the Importer of Record is the person or body who actually owns the imported goods at the import time. This gets a little confusing when thinking about suppliers, distributors, and end-users. When importing already-purchased goods, the typical thinking would imply the owner of the product (the end-user) is obligated to pay any associated duties. However, appointing a given body as the Importer of Record gets rid of this confusion. They become the temporary owner of the goods until the distribution center has accepted the goods.
What Are Their Documentation Responsibilities?
Documentation responsibilities for an Importer of Record include supporting documentation of all initial assessments for an import. Additionally, the Importer of Record is required to appoint a Power of Attorney (POA). If an Importer of Record is not on-site at the time of import, the POA then has the authority to act on the behalf of the Importer of Record for the import’s accountability. However, as outlined by the CBP, the POA must have been executed and maintained reasonable care at the import time.
The Role of Importer of Record in International Freight Forwarding
Some, but not all, freight forwarders can also be Importers of Record. However, if a shipper hires a freight forwarder that does not offer such services as Importers of Record, the shipper will need to have a legal representative at the country of origin to handle the import process. Or they can outsource the service to an additional company, which will mean extra costs to the shipper.
Importers of Record typically have a wide network of connections worldwide and know the varying import and export laws and regulations throughout the world.
At Alba Wheels Up, we offer Importer of Record services. Furthermore, through our U.S. government connectivity, our high ratio of licensed customs brokers on staff, and our continuous investment in compliance with staff expertise and technology, we deliver the most compliant customs brokerage services in our class. Contact us today.
Summary
Since the Importer of Record can seem complicated when considering international trade between differing parties, their role is often forgotten. However, to import any product, a shipper must have a physical presence or an agent in the import destination. The branch or the responsible person will be in charge of taking care of all the legal obligations enforced by the destination country’s customs. But having representation abroad is not that simple.
If a shipper does not have a representative in the importing country, it can either hire such representation or, better yet, utilize its freight forwarder. They can ensure that the imported goods comply with all local laws, filing duty entry documents, and paying import taxes for those goods. Hiring a freight forwarding company that provides such services can make the shipping smooth and hassle-free.
