Becoming an IMPORTER of RECORD
For international trade requiring Canadian legal services call 403-400-4092 / 905-616-8864 or email Chris@NeufeldLegal.com
An Importer of Record is a person or entity officially responsible for ensuring that imported goods comply with all local laws and regulations. When a shipment crosses an international border, the Importer of Record is the party recognized by the government as the owner or purchaser of the goods. Their primary role involves the filing of required documentation, such as entry forms and packing lists, to the relevant customs authorities. Beyond paperwork, the Importer of Record is responsible for the payment of all assessed duties, taxes, and fees associated with the shipment. By acting as the formal interface between the business and the government, the Importer of Record facilitates the legal entry of products into a foreign market.
The importance of an Importer of Record cannot be overstated in the context of global supply chain management. Without a designated Importer of Record, goods can be detained at the border, leading to significant delays, storage fees, and potential seizure by customs officials. Having a clear Importer of Record ensures that there is accountability for the safety and legality of the items being brought into a country. This role is particularly vital for companies that do not have a physical presence in the destination country but wish to sell their products there. By assuming this responsibility, the Importer of Record provides the necessary legal framework to keep international trade moving efficiently and predictably.
Becoming an Importer of Record requires a thorough understanding of the customs landscape in the target country. Most businesses choose to act as their own Importer of Record if they have a local legal entity, but those without one often hire a professional third-party service. To qualify, an entity must typically obtain a specific identification number, such as a Customs Bond or a Tax ID, depending on the jurisdiction. The process involves significant due diligence to ensure that the entity has the financial resources and expertise to handle potential liabilities. Successfully establishing Importer of Record status allows a business to take full control over its international logistics and customer delivery experience.
Legal matters are the most critical aspect of being an Importer of Record, as the position carries substantial liability. The Importer of Record is legally responsible for the accuracy of the information provided to customs, including the valuation and classification of goods. If the Harmonized System codes are incorrect or the value of the goods is understated, the Importer of Record is the party that will be audited or fined. These legal obligations remain in effect even if the Importer of Record uses a customs broker to file the paperwork. Consequently, maintaining meticulous records and ensuring absolute transparency with government agencies is a fundamental legal requirement for anyone in this role.
Furthermore, the Importer of Record must ensure that all goods meet the specific regulatory standards of the importing country, such as safety certifications or labeling requirements. Failure to comply with these standards can result in civil or even criminal penalties, depending on the severity of the infraction. For example, importing restricted or prohibited items without the proper permits can lead to immediate legal action against the Importer of Record. This makes informed compliance a key legal doctrine, meaning the Importer of Record is expected to know the law and follow it proactively. Because the legal stakes are so high, many companies invest heavily in compliance software or legal counsel to mitigate these risks.
The financial responsibility of an Importer of Record extends beyond just the initial payment of duties at the time of entry. Customs authorities often have the right to audit shipments several years after they have cleared the border. If an audit reveals discrepancies, the Importer of Record is legally obligated to pay any back-duties plus interest and additional penalties. This long-term liability means that being an Importer of Record is not a one-time event but an ongoing commitment to regulatory adherence. Proper risk management strategies, such as securing adequate insurance and maintaining organized digital archives, are essential for protecting the entity from future legal challenges.
As such, when your international business seeks the professional services of an experienced Canadian business lawyer for international trade arrangements, contact our law firm for a confidential initial consultation at 403-400-4092 [for Alberta and Western Canada], 905-616-8864 [for Ontario and Eastern Canada], or Chris@NeufeldLegal.com.