Is Your DDP Shipping Legal? The Truth About Importer of Record (IOR) and Customs Bonds

If you ask 10 Amazon sellers what "DDP" (Delivered Duty Paid) means, 9 of them will say: "It means I pay one price, and the forwarder handles everything. I don't have to worry about Customs."

While convenient, this mindset is dangerous.

In the eyes of US Customs and Border Protection (CBP), there is no such thing as "magic logistics." Someone must legally declare the goods. Someone must pay the tax. Someone must be the Importer of Record (IOR).

If your freight forwarder isn't transparent about who that "someone" is, you could be unknowingly participating in tax evasion.

At Forest Leopard, we believe in White Hat Logistics. Here is the uncomfortable truth about DDP shipping and how to protect your business from seizures and audits in 2026.

The Core Question: Who is the "Importer of Record"?

The Importer of Record (IOR) is the entity legally responsible for ensuring the goods comply with local laws and paying the import duties.

When you ship from China to the USA, there are two ways to handle this:

Scenario A: You Are the IOR (The "White" Way)

• How it works: You buy a Customs Bond (about $300-$500/year). Forest Leopard uses your Tax ID (EIN) to clear customs.
• The Benefit: The import history belongs to you. You get the tax deduction records. You have total control.
• The Cost: You pay the duties directly to the government (or via us).

Scenario B: The Forwarder is the IOR (The "DDP" Way)

• How it works: Forest Leopard (or our US partner) acts as the IOR. We use our bond to clear the goods on your behalf. We bill you an "all-in" price that includes the duty.
• The Benefit: Convenience. You don't need a bond.
• The Risk: You must trust that your forwarder is actually paying the correct duty and not under-declaring the value.

The "Grey Market" Trap: Why Cheap DDP is Dangerous

If you receive a DDP quote that is 30% cheaper than everyone else, be careful. The forwarder might be using "Grey Clearance" tactics.

1. The "bundled" Bond Risk Some budget forwarders consolidate 50 different clients (selling everything from toys to batteries) into one container and clear it under one shell company's bond.

• The Consequence: If one client in that container is shipping counterfeit Nikes, CBP seizes the entire container. Your legitimate goods get held hostage indefinitely.

2. Undervaluation (Tax Evasion) You paid the forwarder based on the real value ($50,000). The forwarder declares $5,000 to Customs to pocket the difference in tax.

• The Consequence: When CBP audits the entry, they don't look for the Chinese forwarder; they look for the ultimate consignee (You). You could face penalties of up to 400% of the duty value.

The "Section 321" (Type 86) Loophole

In 2025 and 2026, many e-commerce shipments are utilizing Section 321, also known as the "De Minimis" entry.

• The Rule: If a shipment is valued under $800 and is shipped to one individual on one day, it enters duty-free.
• The Use Case: This is perfect for direct-to-consumer parcels (like Temu/Shein models).

The Forest Leopard Advantage: We can ship bulk cargo to our US Warehouses (Brooklyn/Azusa), break bulk, and inject individual packages into the USPS/UPS network to legally utilize Section 321 for valid B2C orders.

Warning: Using Section 321 to import bulk stock for Amazon FBA (e.g., splitting one large shipment into 20 small fake shipments) is illegal. CBP is cracking down hard on this in 2026.

How to Verify Your Shipment is Compliant

You don't have to take our word for it. As a transparent logistics partner, Forest Leopard empowers you to audit your own shipments.

Here is the one document you need to ask for: CBP Form 7501 (Entry Summary).

This is the official receipt from the US Government. It shows:

• Who was the IOR? (Box 11)
• What value was declared? (Box 35)
• How much duty was paid? (Box 39)

If your current forwarder refuses to show you the 7501 Form, run. It means they are hiding something (likely undervaluation).

At Forest Leopard, we provide the 7501 Form copies upon request for all formal entry shipments.

Forest Leopard's Compliance Promise

We offer flexible solutions based on your business size, but we never compromise on compliance.

• For Enterprise/Brand Owners: We strongly recommend you buy your own Continuous Bond. We will guide you through the application. It builds your credit with US Customs.
• For SMBs: We offer legitimate DDP services using our own compliant bonds. We segregate high-risk cargo (like batteries) from general cargo to protect your shipments.
• Transparency: No hidden HS Codes. No fake valuations. We declare what you ship.

Summary: Sleep Better at Night

Cheap shipping is great, but safe shipping is essential. Don't let a "too good to be true" shipping rate destroy your business reputation with the IRS or Customs.

Whether you need to set up your own Importer of Record account or need a trustworthy DDP partner, Forest Leopard has the expertise to keep your supply chain in the "White Zone."

Need a Compliance Health Check on your current shipping route? Contact Forest Leopard today. Let's make sure your paperwork is as solid as your product.