An Exporter of Record (EOR) is the entity legally responsible for ensuring shipments comply with all export regulations, preventing costly penalties. While companies can act as their own EOR, many hire experts to manage the complex exporter of record responsibilities and mitigate risks associated with global trade.
- Compliance and Documentation: The EOR handles correct shipment classification and valuation, secures necessary export licenses, and ensures all paperwork adheres to U.S. and destination country laws.
- Shipment Liability: This role assumes full responsibility for the shipment successfully reaching its destination, bearing the financial risk and liability if delivery fails.
- Due Diligence: U.S. sellers can be held accountable for export violations even when not formally the EOR if they fail to exercise proper due diligence.
What Is An Exporter of Record & What Do They Do?
International trade compliance has several moving parts that need to work together to ensure your business runs efficiently to avoid hefty penalties throughout the process. An Exporter of Record (EOR) is an integral part of your company’s trade compliance plan because they ensure that all shipments leaving the United States comply with all U.S. export regulations.
An Exporter of Record is the person or entity responsible for goods and services shipped between two countries. An EOR is a vital part of any export compliance plan, and it’s best to make sure you know who is the EOR for your shipments so you can avoid unwanted delays, penalties, or fines.
As you can imagine, the responsibilities of an Exporter of Record vary based on your export operation. There may be different documents or records required for customs purposes, but the general responsibilities of an Exporter of Record include:
- Classification: Review classification and valuation of shipments.
- Documentation: Ensure export licenses, documentation, and processes are followed to abide by local laws and regulations.
- Shipment Delivery: Assumes responsibility if your shipment does not reach its destination.
- Financial Obligations: Responsible for disruptions to your business if delivery is not made.
- Transparent Process: Maintain Exporter of Record documentation for a set amount of time to facilitate future audits.
EOR services must include their ability to answer all questions that come up by U.S. Customs and Border Protection (CBP). This means that an Exporter of Record takes on risks and responsibilities to ensure shipments arrive on time and reach their importing destination without delay. Be sure that your EOR understands what are needed for distribution statements that contain sensitive or controlled technology and are used to communicate the limitations on sharing or disseminating such information to foreign entities or individuals.
Why Is An Exporter of Record Important?
Many companies take on the responsibilities of the Exporter of Record to save money. However, this approach can quickly lead to compliance issues as your supply chain grows with your global network.
In most cases, exporters choose to hire trade compliance consultants to oversee required EOR services. This move can help routed export transactions reach their destination efficiently and reduce complications with shipments throughout the entire process. However, companies must trust the integrity and ability of their Exporter of Record because the U.S. Department of Commerce, Bureau of the Census holds entities shipping goods responsibly.
“… a U.S. seller will be liable for an export violation if the U.S. seller fails to exercise due diligence and proceeds with an EXW to a foreign buyer when the U.S. seller knows/believes or has reason to know/believe that an export violation has occurred, is about to occur or is intended to occur.”
Suppose you are the USPPI (i.e., “Exporter of Record”). In that case, you are required to prepare the EEI record or authorize the Freight Forwarder (or other US. Agent) with written authorization (Power of Attorney).
Ignorance is not bliss, and being named unknowingly as the Exporter of Record is not something to be taken lightly.
Find your company being the exporter in a routed order. You must provide the necessary information for the EEI record (i.e., Name, EIN, Schedule B, and Value, but NOT who the Ultimate Consignee is).
You could be exposing your company to fines, debarment, or liability should the shipment not arrive at its destination.
Add to that your customer is not paying you for your goods because they did not receive them, and you could also be facing adverse contractual and financial ramifications.
Even if you are successful in dodging the “Exporter of Record” bullet, you could be liable for failure to perform under a letter of credit that depends upon producing a bill of lading or waybill if the forwarder or U.S. agent does not provide one to you.
The absence of the correct proof of exportation could create problems with drawback claims, Foreign Sales Corporation benefits, and leave you vulnerable for sales taxes on the shipment to boot!
“But, if we are not the Exporter of Record, we are not held accountable for export compliance for that shipment, right?”
Not exactly true.
According to the U.S. Department of Commerce, Bureau of the Census: “… a U.S. seller will be liable for an export violation if the U.S. seller fails to exercise due diligence and proceeds with an EXW to a foreign buyer when the U.S. seller knows/believes or has reason to know/believe that an export violation has occurred, is about to occur or is intended to occur.”
Suppose you are the USPPI (i.e., “Exporter of Record”). In that case, you are required to prepare the EEI record or authorize the Freight Forwarder (or other US. Agent) with written authorization (Power of Attorney).
Of course, you must keep a detailed record of the support documentation and the AES information.
| Area | What the EOR (Exporter of Record) must do | Why it matters / Risk if not done |
|---|---|---|
| Classification & Valuation | Review shipment classification and valuation (e.g., HS/Schedule B, correct value). | Mis-classification or undervaluation can lead to penalties, delays, or audit exposure. |
| Documentation & Licensing | Ensure export licenses (if required), correct documentation, and export processes are followed under U.S. & destination country laws. | If documentation is incomplete or inaccurate, export may be delayed or barred; fines/regulatory action possible. |
| Shipment Delivery Liability | The EOR assumes responsibility if the shipment does not reach its destination — i.e., financial & contractual risk for non-delivery. | If goods don’t arrive (or buyer doesn’t pay), the EOR may face financial loss or be held the accountable party. |
| Record-keeping / Transparency | Maintain documentation for audits, transparency of the export process (classification, licenses, valuation, AES filing, etc.). | Without records, companies cannot demonstrate compliance in case of government inquiry; increased risk of penalties. |
| Due Diligence / Choosing the EOR | Ensure that the designated EOR is properly authorized and competent; understand roles in “routed transactions” (when foreign buyer selects freight forwarder). | Even if you’re not officially the EOR, you may still be liable if you fail to exercise due diligence. |
| Understanding Who Can Be the EOR | Determine if the shipper/exporter is the EOR or whether a third-party must act; freight forwarders typically aren’t EORs. | Mis-assigning roles can lead to non-compliance: using a freight forwarder as EOR without proper authority is risky. |
Is A Freight Forwarder An Exporter of Record?
Although Freight Forwarders are authorized agents for exporting U.S. shipments to foreign destinations and are authorized to make Automated Export System (AES) filings on behalf of U.S. companies, they are not the Exporter of Record.
But what if our foreign customer pays the freight forwarder and authorizes them to file AES? They are not our Freight Forwarder but an agent of the foreign customer.
Partially right. The Foreign Principal Party of Interest (FPPI) may not clear the export outbound, so a designated U.S. agent must do so for them. This is called a routed order and represents a cost and logistics problem for the foreign buyer.
You will also not be required to provide written authorization or Power of Attorney to the Freight Forwarder.
All things considered, if it sounds too good to be true, it probably is. Know who all the parties are, their roles, their authorizations, and above all, whether you are on the chopping block for violations or other unpleasant occurrences.
Don’t Risk Violations: Understand Your Responsibilities As An Exporter Of Record
If this blog raises more questions for you than answers, or if you had to look up one or more of the terms we have used, you might best be served by seeking the advice of your company’s Empowered Official (EO), or some other Subject Matter Expert.
We can also help! Contact us today for a no-charge consultation.
Exporter Of Record FAQs
Tom Reynolds is the President of Export Solutions, a consultancy firm which specializes in helping companies with import/export compliance.