By Nick Lung    Photo：CANVA

Why the Importer of Record (IOR) Plays a Critical Role in the Import Process

When importing goods into the United States, the Importer of Record (IOR) is responsible for declaring the goods to U.S. Customs and Border Protection (CBP), providing the correct documentation, paying duties and taxes, and ensuring regulatory compliance. Without the appropriate IOR, goods may be delayed, detained, or even refused entry at the port. Furthermore, customs require the importer (or final consignee) to provide an Importer Identification Number (IIN) upon official entry. This number can be an Employer Identification Number (EIN) issued by the Internal Revenue Service (IRS), a Social Security Number (SSN), or a number assigned by U.S. Customs and Border Protection (CBP). If you do not have any of the above, you must complete U.S. Customs and Border Protection (CBP) Form 5106, Establishment/Update of Importer Identity, to apply for or renew this Importer Identity (IOR).

Options and Key Steps for Foreign Companies Without a U.S. Entity

If you are a foreign company without a U.S. branch or Employer Identification Number (EIN) but still need to import, you have several options:

Apply for a CBP-assigned Number: You can apply for an Importer Identity (IOR) by completing CBP Form 5106. If you already have an EIN or Social Security Number (SSN), use that; if not, apply for a CBP-assigned number.

Designate a U.S. Agent/Ultimate Consignee: A foreign company can designate a company or partner with a U.S. entity as the ultimate consignee and Importer Identity (IOR). This company can use its own U.S. address and tax ID number to handle visa and customs obligations.

Seeking assistance from a customs broker: A customs broker can assist you with document preparation, obtaining a power of attorney (POA), and handling customs declaration and clearance procedures. You will typically need to sign a POA to allow the customs broker to conduct customs transactions on your behalf.

Responsibilities and Notes for Completing CBP Form 5106

CBP Form 5106 (Importer Establishment/Update of Identity Form) is used to establish or update the identification information of an importer/ultimate consignee. This form is crucial if you are a foreign company without a U.S. entity and intend to become an importer (or designate an ultimate consignee). When completing and submitting the form, please note the following:

Please provide information such as your company name, address (mailing and physical), nature of business, frequency of imports and exports, and projected annual import volume.

U.S. Customs and Border Protection

If you already have an Employer Identification Number (EIN) or Social Security Number (SSN) from the Internal Revenue Service (IRS), please enter it. If not, check the "Request for a U.S. Customs and Border Protection-assigned number" box and provide the necessary information for CBP to assign a number. The form will request information about the ultimate consignee. If the ultimate consignee is located in the United States, please provide their identification number and address. Even if you are the importer, you will typically register a U.S. ultimate consignee.

If any information (name, address, etc.) changes, you will need to update the form. Once the form is submitted and accepted, the number can be used for future import declarations. If it is not used within one year, the number may expire and need to be reactivated.

Risks, Costs, and Practical Advice

Even if you have selected a plan and completed the necessary documentation, foreign companies should be aware of the following risks and costs when importing without a local Customs Office of Registration (IOR):

Regulatory and Compliance Risks: The importer/consignee may be held liable if the goods are incorrectly classified (HS code), the origin declaration is inconsistent, or the labeling does not meet safety, environmental, or labor requirements.

Costs: Fees for hiring a customs broker or agent; potential customs bonds; storage fees or demurrage charges, which can extend the time it takes to prepare documents and clear customs.

Time and Delays: Delays can occur if U.S. Customs and Border Protection (CBP) cannot locate the final consignee or importer, or if additional documentation is required. Incomplete Purchase Authorizations (POAs) or Form 5106s, or unclear addresses and tax ID numbers, can create bottlenecks.

Control and Responsibility Assignment: When appointing an agent or final consignee, clearly define who is responsible for each aspect of the contract (customs clearance, legal responsibilities, and document preparation). Ideally, this should be a clear written agreement with the other party.

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