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What is the Difference between Consignee and Importer of Record?

What is the Difference between Consignee and Importer of Record?

When trying to navigate the complex legislation involved with the customs process, it’s helpful to understand the definition of the most important roles involved in an import transaction – and the differences between them.

In this article, we are going to discuss the difference between a Consignee and an Importer of Record.

Understanding Consignee

Once the goods are cleared through customs, the consignee is the entity who takes ownership of them. In a straightforward import/export transaction, the consignee is usually the party paying import duties and taxes.

If a business has imported its own goods, either for its own internal use, for storage, or for distribution at a later date, it is both the importer and the consignee.

The different roles and responsibilities involved in customs clearance can be complex and vary from country to country. It’s worth getting expert advice if you’re not familiar with the process.

Who can Act as a Consignee?

The consignee can be a private individual consumer (ordering goods from an overseas business), or it can be another business.  A consignee is an individual or a firm to whom the cargo is consigned by the shipper.

The consignee may or may not be an actual buyer of goods. A consignee is considered an exporter when the imported goods are solely shipped for internal use.

Understanding Importer of Record (IOR)

Many people often confuse consignees and Importers of Records (IOR) because both entities deal with imported goods. However, there is a significant difference between the two.

Customs compliance requires a very important role, known as the Importer of Record (IOR) or declarant. The importer of record is an individual or a firm authorized by the government to act as an ‘Importer’ to bring goods or services to a country.

The appointed importer of record is the person or entity officially responsible for ensuring the import transaction complies with all the regulations in that country, that goods are correctly valued, pays the relevant taxes and duties and files all the correct documentation and permits.

Unlike consignees, IOR services have the knowledge of customs laws of various countries because they are taking care of imports to many different coastlines.

Who can Act as the Importer of Record?

The requirements for who can act as the importer of record differ between countries. Interestingly, a consignee can also assume the role of an Importer of Record (IOR). However, it only serves the purpose of any individual or the company.

Sometimes, particularly in less straightforward transactions, it’s necessary to appoint an agent or broker or some other legal entity in the destination country, to act as the importer of record on their behalf.

Where Importer of Record (IOR) Services Make Impact?

Appointing an IOR can help to avoid confusion about who actually has ownership of the goods when a transaction involves suppliers, distributors, and end-users. The IOR becomes the temporary owner of the goods until the goods have been accepted by a distribution center.

The professional IOR services, on the other hand, facilitate the importing shipments of all those who don’t have any presence or business connections in the destination country.

Import your Products with COVUE!

Let COVUE’s regulatory experts help you to speed up the market entry process so can that you can focus on your business. With our IOR license, we seek to make the import process simple, compliant, and accessible to all sellers of all sizes.