"IMPORTER OF RECORD" and RIGHT TO MAKE ENTRY
Only an "Importer of Record" Has the Right to Make Entry.
The importation of goods into the U.S. carries with it many legal obligations (concerning duties, country of origin, and other regulatory matters) which are enforced by the U.S. Customs Service, (" Customs"). While one does not need a license to import, an "importer of record" number must be established with Customs, and a bond provided in Customs favor in order to import under one's own name.
Under federal law, only an "importer of record" has the right to make entry of goods. (19 USC 1484.) Corresponding to that right, it is the importer of record who will be held liable for all Customs-related aspects of the import transaction.
Who is an "Importer of Record?"
"Importer of record" is defined as the owner or purchaser of the goods, or when designated by the owner, a licensed customs broker.
"Owner or purchaser" is in turn defined as including:
" ...any party with a financial interest in a transaction, including, but not limited to, the actual owner of the goods, the actual purchaser of the goods, a buying or selling agent, a person or firm who imports on consignment, a person or firm who imports under loan or lease, a person or firm who imports for repair or alteration or further fabrication, etc.
Any such owner or purchaser may make entry on his own behalf or may designate a licensed Customs broker to make entry on his behalf and may be shown as the importer of record on the CF 7501.
The terms 'owner' or 'purchaser" would not include a 'nominal consignee' who effectively possesses no other right, title or interest in the goods except as he possessed under a bill of lading, air waybill, or other shipping document. " (Customs Directive 3530-00A, dated June 27, 2001, superseding Directive 3530-002 dated November 6, 1984.)
Why Are These Limitations on the Right to Make Entry Imposed by Customs?
Customs requires that the importer of record have a certain level of financial interest in the import transaction so as to ensure that the importer of record, as the person liable for the import transaction, also has an interest in the goods themselves.
Since Customs maintains authority over goods crossing the borders, this requirement of a financial interest in the transaction helps ensure that the importer of record will be responsive to Customs in terms of compliance with duty payment and regulatory enforcement.
It also ensures that the party entering the goods will have access to the documents necessary to establish the proprieties of the transaction in terms of proper valuation, classification, marking and other matters.
Who May "Use" an Importer of Record Number?
The only parties that may import under a particular importer of record number are the named company itself and any divisions or dba's of that company that are listed on the company's customs bond as authorized users.
Because divisions or dba's of a company are really just parts of the company itself, and not separate entities in the eyes of the law, the chain of legal responsibility for the import transaction is unbroken.
A Parent Corporation And A Subsidiary Are In Law Separate And Distinct Entities.
Because a corporation, whether a parent, subsidiary, or sister corporation is seen as a separate "person" in the eyes of the law, the rights and obligations of each under the laws, including the Customs laws, must be viewed as separate and distinct.
A Corporation May Not Make Entry for a Related Corporation Based Solely on the Relationship.
Because of the view of corporations as distinct legal entities, a parent corporation may not make entry for a subsidiary, and the subsidiary may not make entry for the parent based solely on their relationship. The same is true for sister corporations which may not make entry for each other simply because they are related under the same corporate umbrella.
A Corporation May Make Entry for a Related Corporation if the Corporation Making Entry Meets the Definition of "Owner or Purchaser."
As defined in the Customs Directive quoted above, certain parties have sufficient financial interest in an import transaction to have the right to make entry. If a related corporation meets this definition, it may make entry under its own importer of record number for its parent, subsidiary or sister corporation.
Determination of the Right to Make Entry May Involve a Complicated Legal Analysis.
In any given case, application of the rules concerning right to make entry may involve a complicated legal analysis. The terms "owner or purchaser, ' 'consignee, ' 'buying or selling agent' and the like are all terms bearing legal definitions.
The legal analysis in connection with right to make entry should be done either by the company's internal or external customs experts. If any entity other than the actual owner of the imported goods is being considered for use as importer of record, prior approval of the arrangement should be obtained through those experts.
Improper Designation and Usage of Importer of Record Numbers is a Violation of Federal Laws and Penalties May Be Imposed as a Consequence.
It is strongly emphasized that improper usage of importer of record numbers is a violation of the customs laws. In particular cases, penalties and other enforcement actions may attach to any entities involved in prohibited practices.