Related Buying Agent Has Right to Make Entry as Importer of Record, CBP Says

A buying agent for a related manufacturing company meets the standard for "financial interest" for importing goods in the U.S. as the importer of record, CBP said in a April 6 ruling (here). The buying agent, Overseas Food Trading, sought a CBP ruling on its ability to file entries for imports of cooking oils from Pompeian, a sister company that manufactures oils and vinegars. Overseas and Pompeian entered an agreement that would have Overseas serve as the importer of record, among other things, the company said. The two companies have the same owner but operate separately, CBP said.

Overseas is paid a fee for its work per metric ton and this fee is invoiced per operation under the agreement, which was reached last year, CBP said. "Overseas does not receive any compensation from foreign suppliers," while Pompeian owns the goods, retains the risk of loss and is responsible for delivery. "Pompeian is also responsible for duties and third-party expenses such as Customs exams, broker fees or any Governmental agency fee in connection with transactions pursuant to the Agreement."

Overseas may serve as the importer of record if it "can show that it has a financial interest in the goods at the time of entry, sufficient enough to constitute a nexus between Overseas’ financial welfare and the imported goods," CBP said. The agency first examined whether an "agency relationship exists." Based on past court rulings, Overseas can be considered "an agent if Pompeian, as the principal, can control Overseas’ conduct with respect to the matters entrusted to Overseas by Pompeian and if Overseas’ actions are primarily for the benefit of Pompeian," CBP said.

Among other things, Overseas is required to "negotiate price and contract terms with foreign suppliers on behalf of Pompeian, and to coordinate a shipping schedule in accordance with Pompeian’s schedule," under the agreement, CBP said. Because "all terms of offers and orders are approved and processed by Pompeian, Overseas acts as an agent for Pompeian," it said. Therefore, "Overseas also has a sufficient financial interest in performing its responsibilities and tasks as a buying agent for the imported merchandise to serve as importer of record," CBP said. "On account of this financial interest in the imported goods as a buying agent, Overseas is considered an 'owner or purchaser' and has the right to make entry as importer of record."