An IOR is responsible for import operations and makes them less challenging, especially when shipping IT technologies to closed markets like in Russia.
Technology hardware logistics is full of complications
For the transportation industry, the USA, Canada, and the EU are the most comfortable places to trade tech products. The markets are “open”, and relatively easy import requirements simplify shipping IT equipment to the aforementioned areas. Usually, you need only to register a company or its branch in Europe to import services there, while in the USA, this requirement may be avoidable.
As for the rest of the world – emerging markets, countries with strict regulations in commodity transportation, causing international trade obstacles. The situation may be trickier when we talk about IT Hardware, as oftentimes it includes encryption-enabled or dual-use devices.
Another difficulty is that having a representative office in these regions is not enough – you also need special permits from local authorities to import shipments from abroad.
However, there is a way to get rid of a headache while entering a closed market – a partnership with a tech-related Importer of Record. We will look at the general advantages of IOR services and how they help international trading in Russia.
What is an Importer Of Record in shipping?
An Importer of Record is a person or entity responsible for importing goods to a country of destination. IOR is also considered as an owner of the hardware that enters the intended country. One more characteristic is that only the Importer of Record has a right to put its name – whether personal or a company one – on the import paperwork.
Is Consignee the same as an Importer Of Record?
Consignee – be it a person or a company – is a body that receives shipments and usually owns the goods. Usually, a consignee does not have deep knowledge of the import and customs clearance processes. But in some cases, a consignee can also be an IOR that receives shipment for storage, personal use, or further distribution.
The IOR’s role in a tech field
Tech-related Importers of Record have obligations for a wide range of services for shipping goods. An IOR organizes importing hardware, but the process itself consists of several subtasks:
- understand in what cases IOR services are essential;
- procure all the documents requested by the destination country;
- provide compliance services;
- help in classifying IT equipment with an HS Code and ECCN number;
- find and collect information about costs for importing shipments;
- pay all customs fees and required taxes, especially when a shipper of record has not made any payments;
- complete customs clearance;
- ensure the process of import doesn’t violate shipping laws in a transit and final location;
- provide support to a customer all the time when shipping goods are on their way to a destination point;
Can a company work without an Importer of Record?
In the USA, Canada, and Europe, all the company should have for receiving goods from a foreign shipper of record is a registered business entity and a Business Number (BN), a Tax ID (EIN) for Canada, VAT IT for the USA, or EORI for the EU. Finishing these steps allows you to become an Importer of Record on your own. Being an IOR, your company also may recoup any VAT or GST paid on shipments.
In the rest of the world, sending goods makes using an IOR provider essential for the company’s trade activity.
Why is an Importer of Record necessary for trading in Russia?
Even COVID-19 consequences did not prevent Russia from staying an important location for shipments from Europe. Moreover, in 2020, the Russian Federation took fifth place among the EU’s main trade partners in export and import. For Russia, some of the most significant shipments from abroad are cars, vehicle parts, broadcasting equipment.
But foreign countries still face challenges in delivering their goods to a local market. There could be four reasons for this:
- In 2016, Russia issued Resolution №1236, requiring local government agencies to prioritize domestic software based on a registry published by the Russian Communications Ministry. Thus, the agencies may buy software from abroad only if it is impossible to replace them with a suitable local substitute. Resolution №1236 can force localizing tech services, as it was with Check Point Software Technologies.
- Importing goods to Russia may occur if an importer finds a local buyer or distributor first. Dealing with many distributors for each type of shipment means distributors need to obtain import permits and do customs clearance separately. Such a situation causes wasting too much time and money. Another option is to find an exclusive distributor for dealing with all imported goods, leading to a strong dependency on one distributor.
- Companies fall under strict regulations for importing technologies to the Russian market if such goods belong to dual-use items. The complete list of dual-use technologies is specified by the Presidential decree of the Russian Federation №1661 and includes encrypted devices, hard drivers, USB storage, laptops.
- For shipping hardware to Russia, an importer must prepare a lot of paperwork and meet strict deadlines in the process. The situation is complicated if an import company does not know what documents are necessary for a successful goods transportation.
How IOR helps enter the Russian market?
Most described obstacles are avoidable for a foreign company thanks to a trustworthy IOR provider with solid experience in importing IT technologies to Russia. Such a partner assists with preparing essential documents, including:
- Certificates of compliance;
- Product packaging lists;
- Commercial agreements;
- Bills of lading and more…
A reliable IOR provider also helps approaching the Russian governmental authorities for import permits like EAC Certificates, FSB Notifications, FSTEK Certification, and Certificate of Conformity. This service is irreplaceable for importing IT hardware, dual-use technology, networking and OT / IoT equipment to Russia.
(here is more detailed information about import-export licenses and permits in Russia)
An IOR also provides RMA services, especially in the IT sphere. RMA solutions give access to local repair laboratories, on-site field engineers, warehouse and inventory management, and SLA. They also help with freight forwarding and customs clearance. In general, IOR and RMA are a win-win combination for a provider and its customers.
Local Market Representation
Another IOR’s advantage is the ability to receive imported goods on behalf of non-Russian clients. A company does not have to register an entity in Russia because an IOR provider acts like its representative. It allows a foreign business to import goods to Russia without having a local office and not violating import legislation.
Who can be an IOR in Russia?
There are two things you should know to be an IOR in Russia:
- If a person imports items to Russia for personal use, he can be an IOR for himself. But if an IOR provides services for others, he must register a company on the Russian territory.
- The imported goods profile must match the company’s main activity area declared to authorities. For example, an agriculture company cannot act as an IOR for importing 5G equipment.
Qualities of reliable IOR provider and where to find one
A trustworthy IOR provider has a geographical expertise advantage, and deep knowledge of local legislation multiplies the chances of successful import operations. Besides, an IOR should take responsibility for importing operations and give extensive support to customers. These points become crucial in shipping IT hardware that is expensive and fragile at the same time.
Velox combines all the characteristics mentioned above. Realizing 1200 projects, importing 8530 units, and preparing 3820 documents for global customers, the company proved itself a partner international businesses count on. If you need help with importing technologies to Russia or look for an IOR provider in the region, check out the Velox solutions for delivering IT, Networking and OT / IoT equipment, including encryption-enabled devices, telecom hardware, and dual-use technology.