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What is an exporter of record, and why should you care? If you're involved in international trade, you need to understand the role of an exporter of record. Finding the right exporter of record can be challenging, as the consequences of not complying can be costly.
The Department of Commerce's Bureau of Industry and Security (BIS) defines exporter of record as the party that receives the main benefit of an international trade. An exporter of record is the party responsible for making sure that shipments meet all government regulations and documentation. This includes obtaining necessary licenses, permits, and certifications.
We can help you become familiar with this important part of international trade, so you can see how essential it is for the success of your exporting business.
The Bureau of Industry and Security (BIS) recognizes the Exporter of Record (EOR) as a principal party of interest. They receive the primary benefit of the transaction and have the power and authority to determine the terms of the sale. In other words, the Exporter of Record is the party in charge of the legal export of goods.
They play a similar role in exporting products as an Importer of Record (IOR) would for incoming products.
You may also hear the term, USPPI, or United States Principal Party in Interest. This refers to the person or entity in the United States that enjoys the primary financial benefits of an export transaction. A foreign principal party is also allowed.
A USPPI is responsible for:
In simpler terms, the EOR handles compliance with all regulations related to the physical export of goods. The USPPI works to report and provide information related to any financial obligations.
It is possible for the exporter and the USPPI to be the same person or company. It all depends on the trade agreements. These terms should also not get confused with a Shipper of Record.
It's essential to note that the EOR is not the same as the Shipper of Record.
The Shipper of Record is in charge of physically transporting the goods from one country to another.
This includes being in charge of:
The EOR makes sure that the shipment complies with all regulations and documentation requirements.
This includes overseeing things such as:
Let’s start with a simple example. Say there a U.S. electronics company who wants to export their products to a company in France.
They might have a trade compliance consultant act as the EOR and take care of the necessary licenses, permits, and certifications of the export process. The Shipper of Record would be arranging the physical transportation of the goods from the U.S. to France.
A Shipper of Record can transport goods, but they may not have the knowledge required to ensure compliance with government regulations. By using an EOR, businesses are better able to reduce the many export risks.
The government regulates an IOR and EOR differently based on their responsibilities. There are different risks involved in the import and export processes.
As mentioned, the EOR is responsible for ensuring compliance with export regulations. When also acting as the shipper of record, an EOR also deals with physical transportation.
The Importer of Record makes sure goods agree with import regulations, and take possession once they arrive at their destination. A company’s IOR has to notify U.S. Customs and Border Patrol (CBP) of their status. This is done by completing official importer of record registration documents.
An IOR would oversee details such as:
The EOR doesn’t have a specific registration requirement with the Census Bureau. The person or company that completes the AES filing is the official EOR by default. An official written statement from a shipper or forwarder’s customer is the only way to shift the legal responsibilities to someone else.
However, they do each have to make sure they comply with the import or export laws. Any violations can still result in government penalties.
These can be placed directly on the importer or exporter. They can also be extended to the company or individual being represented.
For businesses involved in international trade, having an EOR is necessary for many reasons.
With an EOR, a business can:
In this section, we'll take a closer look at these reasons and show you why having an EOR is essential for a successful exporting business.
The most important reason to have an EOR is to ensure compliance with government export regulations. Export controls and related documents can be complex and ever-changing. That makes it challenging for businesses to keep up and have all the record required.
An EOR can help ensure that all laws and regulations are met.
This includes helping with services such as:
There may be licenses required on both ends of a trade deal. Export compliance help is a must when you want things to stay smooth.
By using EOR services, businesses can reduce various financial risks. Not complying with government regulations can result in a variety of penalties and fines. The amount depends on the nature and severity of the violation.
Some types of fines and criminal charges that may result from not complying include:
These penalties can come from both sides of the trade. Make sure you choose an EOR with knowledge of U.S. export rules and the import rules of the destination country.
Export regulation fines can vary depending on two factors.
Take a look at a comparison of penalties for export violations in different countries.
| Country / Organization | Max Fine (USD) Per Violation |
| European Union* | $55,000 |
| Australia | $550,650 |
| Canada | $295,770 |
| Mexico | 100% of Total Value |
| Brazil | 30% of Total Value |
| China | $145,520 |
It's important for businesses in international trade to work with export consultants. Consultants can make sure you comply with all relevant regulations wherever your goods will travel.
Not complying with government regulations can damage your business's reputation, making it difficult to do business in the future.
A bad history of exporting mistakes may result in:
By ensuring compliance with regulations through the use of an EOR, businesses can protect their reputation and maintain customer trust.
Shipping delays and associated risks can have a significant impact on a business's bottom line. An EOR can help you stay compliant and make sure things like labels meet destination requirements.
The following delays are then avoided:
Shipping delays can have a negative impact on your supply chain. Even small delays can spiral out of control. Aside from working with a trusty EOR, make sure that your export logistics needs are also being taken care of.
When choosing an EOR, look for things like experience, knowledge of regulations, and reliability. It's important to pick a company that has a proven record of compliance. You also want them to have experience in the specific industries and regions where you'll be doing business.
Consider this step-by-step process to help you choose the right EOR:
If you still need help narrowing down an EOR, look into working with trade compliance consultants. Many work for export logistic services as export consultants.
Trade compliance consultants are a great source for businesses seeking to export products to other countries. Export consulting services can help your company manage complex export regulations. They also keep your shipment in line with all relevant laws and regulations.
Many export specialists are able to provide guidance for the following tasks:
Working with an export consultant and using EOR helps businesses decrease the risk of penalties and fines. It also improves their chance at success in international trade.
At Cargo Export USA, we offer personalized consulting sessions with our experienced export consultants. You can get help specific to your products and chosen destination.
Understanding the role of an Exporter of Record will help your business when exporting U.S. products all around the world. Cargo Export USA is your trusted partner for all your Exporter of Record needs.
At Cargo Export USA, we offer a range of services to support your exporting needs:
We're committed to providing top-notch service and support to help your business succeed in international trade.
Don't risk compliance issues or shipping delays – trust Cargo Export USA for the advice you need to succeed. Contact us today at (866) 301-0135. You can also complete an online form now for a risk-free quote and to learn more about how we can help your business thrive in global markets.
I am domiciled in Auckland, New Zealand
The company that I work for, UAC International, is a TSA approved freight forwarder in the USA. UAC International has an import customer in New Zealand that wants to set up as a Foreign Exporter of Record in the USA. The New Zealand customer already imports almost twice monthly shipments by air freight from Florida via Dallas-Fort Worth to Auckland New Zealand. The New Zealand importer has sourced other suppliers in the USA to purchase products from and wants to consolidate these products in Dallas-Fort Worth and consign them as one export shipment into New Zealand. This used to be termed as an "assembly" service, however in the true sense of the word, this service is no longer fit for purpose. Due to this and the fact that the New Zealand importer may locate other products in the USA that are fit for regulatory export, wishes to set up as a Foreign Exporter of Record in the USA. Can you please advise how this can be achieved. Thank you