Meaning
Importer of record status confers legal responsibility for customs compliance regardless of the party that committed the initial error. A strict liability importer faces fines and seizures even if they acted in good faith or relied on incorrect information provided by a supplier. This legal standard removes the requirement for the government to prove intent or negligence before issuing a penalty.
Legal Liability
Customs authorities apply this standard to ensure that the party bringing goods into a territory remains diligent in their documentation and valuation. The strict liability importer is the primary target for enforcement actions related to misclassification or under valuation of freight. Because the government does not need to show that a mistake was purposeful, the process of assessing penalties is highly efficient for the state.
Contractual Indemnity
To protect against the financial risks of this status, distribution agreements often include strong reimbursement clauses. The strict liability importer may require the foreign exporter to pay for any fines resulting from incorrect certificates of origin or safety data sheets. These agreements shift the economic burden of compliance errors back to the party that controlled the data.
Risk Exposure
The potential for massive financial loss makes the choice of customs broker and freight forwarder a major strategic decision. A strict liability importer must implement internal audit programs to catch errors before they are discovered by government inspectors. Even a small percentage of incorrect filings can lead to the loss of import privileges or a permanent increase in the frequency of physical cargo inspections.
These audits should cover every aspect of the entry process, from the initial purchase order to the final delivery of the goods at the domestic warehouse.
