Last modified: December 12, 2017
Recall our post about the role of the Importer of Record. In a sense, the Exporter of Record performs similar duties and maintains similar responsibilities to the Importer of Record. Essentially, the Exporter of Record is responsible for ensuring appropriate exports from the US to foreign destinations. As a result, the Exporter of Record can sometimes be a misnomer due to forwarding agents. While some may assume the Exporter of Record falls to the shipment recipient, the Exporter of Record is required to be determined at the time of export. There is no room for error when working with IOR/EOR practices. If you are not comfortable with the subject but know you must be, contact Flash Global today with any questions.
The Exporter of Record may be an individual or an entity who is responsible for obtaining and documenting export clearance. Furthermore, the Exporter of Record must ensure all US export regulations are upheld. If a violation does occur, the Exporter of Record may face severe criminal and civil penalties of monetary and actionable value.
The Exporter of Record must answer to any possible inquiries by US Customs and Border Protection (CBP). Unfortunately, many exporters do not even know they are labeled as the Exporter of Record until a problem arises. Fundamentally, the Exporter of Record is the person who owns and ships the product, which a stereotypical quality equal to the Importer of Record. However, if an Export of Record is not designated, the Exporter of Record may default to the shipment’s foreign recipient (foreign principal party).
If the Exporter of Record is aware of any negligent business or practices that have occurred, will occur, or are likely to occur, the Exporter of Record must address and report such violations. Failure to do so would result in a penalty equal to the penalty of the potential violation itself.
Another key consideration for the Exporter of Record remains the forwarding agents. In international trade, forwarding agents are used in routed transactions when the foreign principal party designates a representative as Power of Attorney to act on their discretion at the time of export. Furthermore, the Exporter of Record must provide the forwarding agent with detailed information about the shipment, which includes the following:
Furthermore, the forwarding agent must then use this information to create the SEC or AES record, which must include the following:
Since global supply chain management inherently involves parties on differing foreign lands, the Exporter of Record plays a vital in ensuring the accurate accountability in international trade. The Exporter of Record is the hypothetical “go-to” person for any concerns about a given export. Furthermore, the Exporter of Record allows both the seller and buyer to ensure all products are shipped, received, and paid for appropriately. The Export of Record must maintain documentation for at least five years to ensure accountability and accuracy in the event of an audit.
Since the role of Exporter of Record results in many accountability and potential compliance concerns, many sellers opt to designate a non-company Exporter of Record. However, this causes problems when tracing information back to the responsible parties, especially the seller, if the Exporter of Record fails to maintain all appropriate documentation and compliance with all applicable regulations.
To prevent this problem, more companies have turned to third-party logistics providers to act as their Exporter of Record. Basically, the responsibility of Exporter of Record is passed to an entity that spans multiple countries, which allows forwarding agents to be identified in both domestic and foreign transactions. Therefore, the cost of appointing an Exporter of Record when the original seller refutes responsibility is eliminated. Flash Global also offers this capability, which allows business owners to maintain their normal operations without worrying about possible implications from errors or issues when exporting goods to other countries.
To learn more about Flash Global end-to-end solution for service supply chain logistics, use the form below to get in touch. An expert advisor can help address your specific needs and provide the detailed information you need to succeed.
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