Ultimate consignee

Ultimate consignee is the party who will actually receive the item for the end-use designated. A bank, freight forwarder, forwarding agent or other intermediary may not be identified as the ultimate consignee. Government purchasing organizations are the sole exception to this requirement. This type of entity may be identified as the government entity that is the actual ultimate consignee in those instances when the items are to be transferred to the government entity that is the actual end-user, provided the actual end-user and end-use is clearly identified or the additional documentation attached to the application.

An issue of occasional concern is the "ultimate consignee" designation of Customs and Border Protection. Customs has the right to scrutinize an important transaction to determine which party is the ultimate consignee. In some cases, purchasing or buying agents services will act as the "importer of record", affecting clearance and delivery to the ultimate consignee. However, Customs might construe that the actual "importer of record" is not the buying or purchasing agent and is actually the ultimate consignee.

The policy for ultimate consignee number

The policy for ultimate consignee number reporting format will be amended as follows:

• US-based ultimate consignees: The appropriate ultimate consignee identification number for US-based ultimate consignees is defined as either an Internal Revenue Service employer identification number or a Social Security number. US based ultimate consignees are not to be identified with CBP-issued ultimate consignee identification number. If a US based ultimate consignee does not have either an Internal Revenue Service employer identification number or a Social Security number, he or she must obtain one for any shipments that require the ultimate consignee identification number.
• Foreign-based ultimate consignees: in the limited instances in which imported merchandise is consigned to an ultimate consignee that is not based in the United States, the ultimate consignee must be identified with a CBP-issued ultimate consignee identification number for formal entries, or in the case of informal entries, including consolidated entry lines with a value less than $2000, may be identified with either a CBP-issued ultimate consignee identification number or the name and address of the foreign-based ultimate consignee. CBP-issued ultimate consignee identification number are only to be used to identify foreign-based ultimate consignees and must be based on the name and address of the foreign-based ultimate consignee.

Single transaction statement from ultimate consignee

Where an application to export a commodity involves a single-transaction, a statement must be submitted certifying to the following facts. Such statements may be submitted on Form IT-842, or in the form of a letter, wire or cable. Statements from the ultimate consignee by wire or cable may be accepted even though not signed manually.

If the ultimate consignee intends to distribute or resell, such statement must either contain assurance that distribution and resale will be made only in the country named as ultimate destination or must name all of the other countries in which resale or distribution will be made.

Examples of Ultimate consignee

• A retail store that orders a shipment of goods from a manufacturer
• A homeowner who orders a piece of furniture from an online store
• A government agency that purchases medical supplies for a hospital
• A university that orders laboratory equipment for a research project
• A company that orders raw materials for production of its goods

Advantages of Ultimate consignee

• Ultimate consignee helps companies to quickly identify the actual end-user and end-use of the product, making it easier to track, monitor, and manage the product.
• It also ensures that the product is not illegally diverted to unintended parties and end-uses.
• By providing the identity of the ultimate consignee, companies can make sure that the product is used for the intended purpose and is not misused.
• It also helps companies to avoid complications in the legal and regulatory requirements of the destination country.
• Furthermore, it helps to build trust and transparency in the supply chain process by providing a clear view on the actual end-user.

Limitations of Ultimate consignee

• Ultimate consignee must be the actual end-user, and the end-use must be clearly identified.
• Documentation such as invoices, purchase orders, bills of lading, or other relevant documents must be attached to the application to verify the end-use.
• In cases when government entities are the ultimate consignee, the actual end-user and end-use must also be identified.
• The ultimate consignee cannot be a bank, freight forwarder, forwarding agent or other intermediary, except in cases when the goods are to be transferred to a government entity.
• The ultimate consignee must have a valid address, contact information, and other relevant information that is necessary for the transaction.

Other approaches related to Ultimate consignee

• One approach is to ask the customer to provide a detailed list of all parties involved in the transaction, including buyers, sellers, intermediaries, and ultimate consignees.
• A second approach is to conduct due diligence on the customer’s background and activities, to ensure that they are legitimate and that the ultimate consignee is not a prohibited party.
• A third approach is to require the customer to provide a copy of the purchase order or contract that identifies the ultimate consignee and/or end user.
• A fourth approach is to require the customer to provide a letter of authorization from the ultimate consignee, stating that the customer has the authority to make the purchase on their behalf.

In summary, there are a number of approaches that can be used to ascertain the identity of the ultimate consignee, including conducting due diligence, asking for a list of parties involved in the transaction, requesting a copy of the purchase order or contract, and asking for a letter of authorization from the ultimate consignee.

Footnotes

Ultimate consignee — recommended articles

Dispatch note — Export declaration — Import declaration — Acknowledgement of receipt — Shipping bill — Shipping note — Dock receipt — Consular Invoice — Receiving report

References

• Commerce and Foreign Trade Parts, (2018), Government Publishing, Washington.
• Cook T.A., (2010), Managing Global Supply Chains, CRC Press, New York.
• Cook T.A., (2014), Mastering the Business of Global Trade, CRC Press, London.
• Kendall L.K., (2012), The Business of Shipping, Springer Science & Business Media, London.
• Sparks A., (2013), Steel Carriage by Sea, CRC Press, New York.

Author: Brygida Mordarska