A question from a reader:
When a customs broker is the importer of record, for liability purposes, how is that different from that of the actual importer? In other words is there a difference between the importer and the importer of record?
For example, for surety purposes, customs would go to the importer of record, but what about if there’s an issue such as a trademark violation/infringement? Would that liability lie with the importer of record (a customs broker) or with the actual importer?
When a customs broker is the importer of record, he is essentially clearing the import shipment in his own name instead of that of the consignee. In that role, the broker is liable for all of the Customs regulations as if he were the importer. Any additional duties, liquidated damages, or penalties would be the Customs broker’s liability. In short, there is no difference as far as the Customs regulations go.
That may or may not be true for other agency regulations, such as the Food and Drug Administration, or the Consumer Protection Safety Commission. Some agencies may still hold the consignee liable, regardless of who might be the importer of record.
In the particular case of trademark violation, Customs regulations has provisions for Customs to enforce this on imports. So if the broker is the importer of record, Customs will go after the broker.
It is always my advice that a customs broker should not put them self as the importer of record. The risk is just too high for a product or transaction that the broker actually knows little about. Other than for imports of the customs broker’s own property, this should be very rare and carefully thought out.
Ironically, even when the consignee is shown as the importer of record, some agencies may pursue the broker for the consignee’s violations. This can be simply poor legislation from Congress, or the agencies poor interpretation of the law.