As an accompaniment to our biweekly series on "What Every Multinational Company Should Know About" various international trade, enforcement, and compliance topics, below find an update to our series on compliance checks that every multinational company should consider. Give us two minutes, and we will give you five suggested compliance best practices that will benefit your international regulatory compliance program.
The importer of record holds significant responsibilities in the importation process, including compliance with customs regulations and ensuring the accurate entry of goods into the destination country. Here are some key responsibilities of the importer of record:
The importer of record plays a crucial role in ensuring compliance with customs regulations. Failure to fulfill these responsibilities can result in delays, penalties, or other consequences for the importer and their business.
Five compliance checks that every importer should consider include:
- Recognize that Your Customs Broker is an Asset but Not
the Responsible Party for Clearing Entries and Paying
Tariffs. Many importers believe they can delegate all
responsibility for import-related matters to their Customs brokers.
But customs law firmly places all responsibility for accuracy in
import clearance on the importer of record, not the Customs broker
or freight forwarder. You should ensure that all personnel
connected to import matters understand that the ultimate
responsibility for import matters lies with the importer.
- Set Your Company Up to Exercise Reasonable Care in Its
Import Operations. Customs expects that all importers will
exercise "reasonable care" in their clearance of imports.
At a minimum, this includes responsibility for compliance with all
relevant customs regulations and laws, including proper
classification of imported goods, the declaration of the country of
origin, valuation, the provision of full supporting information,
and the correct and full payment of duties and taxes. Customs'
expectations are that every significant importer will have a
tailored Customs manual for laying out overall responsibilities and
the proper execution of import-related functions, an accurate and
up-to-date Classification Index to ensure the consistent and
correct classification of goods, protocols for dealing with Customs
brokers, and a Customs Transfer Pricing Study if your company
imports from related parties. You should review your Customs
compliance procedures and infrastructure to ensure your
organization is meeting these minimum requirements.
- Set Up a Customs Coordinator. Customs is a
specialized area of law, with its own sets of rules and
requirements. Any significant importer should have someone within
the company who is knowledgeable about Customs requirements and who
can provide guidance regarding classification, valuation, and other
Customs requirements for the proper calculation of the tariff due
and other import requirements.
- Set Up Systems for Active Customs Broker and Freight
Forwarder Oversight and Management. Too many companies
leave their Customs compliance to their Customs brokers or freight
forwarders. Although these entities provide valuable services for
importing goods, each importer of record is ultimately responsible
for the accuracy of all submitted import information and the
correct payment of all tariffs due. To exercise the reasonable care
required by Customs of all importers of record, any significant
importer should assign a person who is knowledgeable about Customs
requirements to oversee all Customs brokers and freight forwarders,
who can also take steps to ensure compliance with all Customs
responsibilities, such as by conducting post-entry reviews.
- Check the Integrity of Your Recordkeeping. Recordkeeping is the responsibility of the importer of record, not the Customs broker. Further, many Customs brokers only maintain records in an easily accessible format for one year, not the full five years required by Customs recordkeeping requirements. Significant importers should be maintaining separate records consistent with recordkeeping requirements called for under the Customs regulations.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.