What Is the IOR’s Role in Facilitating International Trade?


To say that international trade is a complex business is to understate the obvious. From national laws to international standards, getting so many goods across so many borders is no small task. It is complicated, time-consuming, and subject to a dizzying array of rules. For example, do you know what an international importer of record (IOR) is?

If you do, you are in a small minority. Pat yourself on the back and take the rest of the afternoon off. If you don’t, you’re about to learn. An IOR plays an integral role in facilitating international trade regardless of import or export country.

Someone Must Be Accountable

The place to start in understanding the IOR’s role is to settle the fact that someone ultimately has to be responsible for international trade compliance. There are rules governing every export and import transaction. Furthermore, there are duties and tariffs to worry about. Someone has to make sure that all the ducks are in a row before customs officials can release a shipment.

That is really the role of the IOR. A company looking to bring goods into the country can work with an organization like the Ohio-based Vigilant Global Trade Services on everything from trade compliance to streamline logistics, but it is ultimately that company’s IOR that makes things happen.

What the IOR Does

An IOR can be a company, trade organization, or even an individual. Whatever the case, the IOR’s primary responsibility is to ensure all imported goods are compliant with trade regulations. And by the way, this is a legal responsibility. The IOR is not just someone that importers and exporters loosely rely on to move shipments.

In the eyes of the law, an IOR assumes temporary ownership of imported goods until all customs regulations have been satisfied. Only when shipments are approved and released is an IOR absolved of legal authority and responsibility.

Examples of IOR Organizations

Global trade partners rely on something known as Incoterms to form legal sales contracts. More often than not, a deal’s Incoterms will determine who the IOR is. For example, the Incoterm acronym FCA refers to ‘free carrier’. Under such an arrangement, the exporter delivers a shipment to the importer’s carrier of choice. The buyer or its consignee becomes the IOR and bears the responsibility of trade compliance.

On the other hand, a shipment designated as DPU is one that will be delivered to the buyer’s preferred location with unloading included. Under this arrangement, the seller is the IOR. It is the seller’s responsibility to guarantee trade compliance inasmuch as it is also legally responsible for the shipment until it reaches the buyer’s designated location.

Third-Party IORs

Most countries do not have laws specifically designating which organizations or individuals can or cannot be IORs. With that in mind, it is not unusual for buyers and sellers to utilize third-party IORs in their respective countries. A third-party organization handles trade compliance issues on behalf of buyer or seller, thus streamlining the process and mitigating potential risks.

Knowing that, any organization planning to outsource to an IOR must be diligent about vetting service providers. At bare minimum, an IOR that does not do its job can delay shipments considerably. In a worst-case scenario, an organization could be held partly accountable for the actions of an IOR who chooses to violate the law.

Irrespective of whether third parties are directly involved in the transactions they facilitate, IORs play a critical role in keeping international goods moving. They ensure that imports comply with the law, allowing customs authorities to move said shipments along quickly.