Who’s the importer of record in this scenario:

An electronics company ships old cell phones to Canada to be refurbished. The cell phones are then shipped back to them in the U.S. They rely on their shipper to do their paperwork.

U.S. Customs asked them to produce routine paperwork, but they didn’t have it. Although they didn’t realize it, they are actually the importer of record

What should have been an everyday transaction with Customs turned into an investigation. Customs dug in and discovered that the country of origin, value and classification on their documentation were all wrong.

The U.S. company had to pay five years of back duties and interest -- over $200,000.

Unfortunately, they came to us, after they were already in trouble. We helped them find their way out.

Livingston International recently conducted a survey which showed 62 percent or respondents are concerned their company lacks knowledge about clearing goods for international trade.

This story demonstrates there’s good reason for this concern. A common confusion in U.S.-Canada trade is identifying the importer of record. The importer of record is not defined by who’s importing the shipment, but by the contract or International Commercial terms (aka Incotermsrules). Consequently, it’s not unusual for a company to be unaware they are the importer of record.

Just because it’s confusing doesn’t mean you can ignore it. It doesn’t matter how many links in the supply chain come between you and the final destination. Do your homework and find out where you fit in. As our client discovered – the hard way – there are hundreds of thousands of good reasons to protect your business.

Cora Di Pietro is vice president of consulting at Livingston International.