IOR

Conditions for Becoming an Importer of Record (IOR) in Japan

Last Updated on August 17, 2024 by ACP JAPAN

In Japan, the Customs Act establishes the criteria for who can become an Importer of Record (IOR). With the revision of the Customs Act Basic Notice in October 2023, these conditions have become more stringent. As a result, it has become increasingly difficult for foreign corporations without a Japanese office to appoint another Japanese entity as a nominal importer. Instead, foreign corporations are often required to become importers themselves by utilizing an Attorney for Customs Procedures (ACP).

 

Definition of an Importer

According to Customs Act Basic Notice 6-1, an importer is defined as:

Customs Act Basic Notice 6-1
The interpretation of terms related to taxpayers as stipulated in Article 6 of the Act is as follows:
(1) “Person who imports goods” generally refers to the consignee listed on the invoice (or the bill of lading if there is no invoice) for goods imported through an “Import Transaction” (as defined in Article 4, Paragraph 1 of the Customs Tariff Act).

 

This definition implies that in cases of an “Import Transaction,” the consignee is typically recognized as the importer. The term “Import Transaction” is defined in the Customs Tariff Act as:

A transaction conducted between a seller and a buyer who has a base (address, residence, head office, branch office, office, place of business, or equivalent) in Japan, with the purpose of bringing goods into Japan, resulting in the actual arrival of the goods in Japan.

 

When a buy/sell transaction meets this definition, the consignee usually becomes the importer. However, the receiver of the goods does not necessarily have to be the consignee = importer.

For instance, in cases where we act as an Attorney for Customs Procedures (ACP), if goods are sent to a Japanese buyer through a transaction between a foreign seller and a Japanese buyer, but the Japanese buyer does not become the importer due to contractual reasons, the foreign seller can become the importer (using ACP). The foreign seller then imports the goods and subsequently sells them within Japan.

However, it is not straightforward for a foreign seller to obtain approval from Japan Customs as the importer in B2B transactions. The ACP must employ specialized knowledge and legal reasoning to explain the situation to customs authorities and obtain approval.

 

Cases That Do Not Qualify as “Import Transactions”

A review of the “import transaction” definition reveals that it is limited to transactions where the buyer has a base in Japan. Therefore, transactions where a foreign corporation without a Japanese base purchases goods overseas and sends them to Japan, or imports goods through transactions without a sale, do not qualify as “Import Transactions.” In such cases, the conditions for becoming an importer are defined as:

 

Customs Act Basic Notice 67-3-3-2
The definition of “person intending to import goods” as stipulated in Article 59, Paragraph 1, Item 1 of the Ordinance is as follows:

For goods imported through an import transaction, the definition is the same as the “person who imports goods” as stipulated in 6-1(1) above.
In cases other than those in (1) above, the person who has the authority to dispose of the imported goods after domestic clearance at the time of the import declaration, including any other person involved in the import for the intended purpose. Examples include:

  • A person who leases and uses goods imported under a lease agreement.
  • A person who sells goods imported for consignment sales under their own name.
  • A person who processes or repairs goods imported for that purpose.
  • A person who destroys goods imported for that purpose.

It is important to note that the “person intending to import goods” is liable for paying the applicable customs duties under Article 6 of the Act.

 

Thus, even in cases that do not qualify as “Import Transactions,” a person who has the authority to dispose of the imported goods can be recognized as the importer. Many of the foreign corporations we support as ACP are recognized as importers because they have the authority to dispose of the goods.