Importer Liabilities & Risk

7 snips

May 14, 2025

Emmet McGovern is a customs brokerage manager at Siva Logistics, bringing eight years of trade compliance expertise. He discusses the vital role of the Importer of Record, emphasizing how legal responsibility lies with them for declarations and duties. Emmet outlines the importance of accurate documentation to avoid costly penalties and highlights real-world examples of tariff evasion. He also offers best practices for audit preparedness and transforming compliance into a competitive edge, ensuring that importers navigate international trade complexities effectively.

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INSIGHT

Importance of Importer of Record

The Importer of Record (IOR) is legally liable for customs declarations and paying duties regardless of who physically receives the goods.
Being listed as IOR means customs will hold you accountable for compliance and any errors or penalties.

ADVICE

Verify Importer Responsibilities

Always know if you're acting as Importer of Record and understand your liability for accuracy and payment of duties.
Work with licensed customs brokers and verify HTS codes and valuation yourself; don't blindly rely on suppliers' info.

ADVICE

Avoid Illegal Tariff Schemes

Avoid illegal tariff circumvention schemes like false transshipment or undervaluation; such practices can cause severe penalties.
If you knowingly allow incorrect customs filings, the liability is yours, even if the seller misleads you.

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In this episode of the International Trade Resource Podcast, host Kim Kirkendall chats with Emmet McGovern, a seasoned trade compliance expert about the often-overlooked but critically important world of importer liabilities and risks. Together, they unpack the role of the Importer of Record, explaining how legal responsibility for declaring goods, paying duties, and maintaining accurate documentation ultimately falls on whoever is listed as IOR. Listeners will gain clarity on why simply relying on your supplier or freight forwarder isn’t enough to shield you from potential penalties.

They then dive into the nuts and bolts of what it takes to stay compliant—everything from choosing the right customs bond (single-entry vs. continuous) to declaring the full ten-digit HTS code, proper valuation of your goods (including assists and tooling fees), and correctly stating the country of origin. Real-world examples of tariff-circumvention schemes, such as undervaluation tricks and transshipment fraud, bring home just how costly even small errors can be.

Next, Kim and her guest walk through best practices for audit preparedness and recordkeeping, emphasizing the five-year retention requirement for documents and they list critical ones for you. They also discuss foreign sellers acting as the Importer of Record or under DDP terms. Finally, listeners are armed with proactive strategies to transform customs compliance from a risk into a competitive advantage.

Key Takeaways:

Who is legally responsible for accuracy of customs documents and payment of duties.
The importance of HTS codes and all valuation components.
How to do self-audits, and prepare for a customs audit.

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