How to get your items clearance through customs seamlessly? Many of us wonder what the need for customs is. In simple terms, they are the watchdogs who ensure that the goods from destination to arrival are done in compliance with the local and international laws, proper documentation, nature of goods, and payment of custom and excise duties. All these have to be done correctly and timely to avoid any penalties, as customers shouldn’t face the brunt of delays. The objective of this article will guide you in getting your goods via custom clearance.
Introduction
The customs is an agency or an authority in a country responsible for collecting tariffs and regulating the flow of goods. They may also have livestock, transport, jewelry, and other hazardous items in and out of the country. Every country has laws and enforcement policies that are governed and regulated by them. The customs duty tax is enforced to protect a country’s economy and to control cargo entering and exiting the country. Recently, the scope and duties of the customs have expanded and covered three new issues: taxation, security & trade facilitation.
I. The customs clearance process
- Familiarity:- When shipping overseas, an exporter needs to be familiar with the country and product-specific custom policy irrespective of the export of a product or as a free sample. The preliminary step to this would be finding information about the same. For example, certain countries’ customs policies might allow a pro forma while others might ask for additional documents for clearance, such as the original stamped custom invoice.
- Detailed Declaration:- A detailed declaration is a document most shippers ask the exporters to ensure that the product’s shipping happens with proper documentation. Most shippers document fundamental information name, number, and weight of the product forgetting that the same product might have a different name in another country. Suppose the customs officer has doubts about the product description. In that case, it might invite the intervention of a specialized customs office which would result in a delay and an additional fee for checking and screening. In a worst-case scenario, the shipments won’t be returned. Documents like invoices, bills of lading, and certificates of origin have consistent information from the declaration form.
- Declaration forms:- These forms, as mentioned below, are crucial for custom clearance, easing the smooth passage of goods without any late fees or detention.
- Shipper’s details: name, address, tax number or VAT number or EORI number, etc.
- The authorized person in the sending company: name, phone, e-mail address
- Buyer company details: name, address, tax number or VAT number or EORI number, etc.
- The authorized person in the recipient company: name, phone, e-mail address
- The actual name and English name of the product
- A correct declaration of the origin of your goods, such as “MADE IN ________.”
- Quantity of the product
- Net weight of the product and gross weight in packaged
- Shipment purpose of the product: commercial, sample, etc.
- Detail of the product, including material
- Product HS code
- Package details: number of packages, dimensions, package type, etc.
- Import / Export documents:- Along with the Declaration forms, as mentioned, this is the following crucial document that should be filled with correct information when exporting goods.
II. Basic Documents:
- Commercial Invoice
- Packing List
- Bill of Lading (or Airwaybill or CMR)
With the help of the three documents mentioned above, one can export goods without needing additional documents. Certain export houses make their invoices which have the information regarding the packing lists along with package and weight details. It is highly suggested to have your packing list as you do not want to leave it to the discretion of customs officers at the customs clearance stage. The essential three documents listed above can further be elaborated at an individual level as mentioned below:-
- Commercial Invoice:
- Shipper’s details (company name, contact information)
- Buyer company’s details (company name, contact information)
- Date
- Invoice Number
- Product name(s) and description
- Quantity of product and unit price
- Invoice total price
- Payment method
- Delivery method
- Bank account information
- Packing List:
- Shipper’s details (company name, contact information)
- Buyer company’s details (company name, contact information)
- Date
- Invoice Number
- Product name(s) and description
- Product net weight
- Packaged gross weight
- Package dimensions
- Bill of lading
An AWB or Airway bill and CMR (Contract de transport international de marchandises par route) if the goods are being sent by air or road. This document has all the above information except the bank and price details. Bill of lading is a crucial document for international shipping as this cannot be modified or edited after being shipped with the original document. Any changes to the bill of lading are an expensive and arduous process.
III. List of Additional Documents:
- Insurance certificate
- Certificate of Origin
- Movement Certificates (ex. EUR. 1, ATR, etc.)
- Test & Analyze Certificate
- Inspection Certificate
- Electronic Export Information (EEI)
- Insurance certificate:- Though not necessary, one is recommended to secure against any disaster. It is up to the discretion of the importer or exporter to decide which party will pay for the insurance and also according to the delivery type and incoterms. For example, an exporter isn’t liable to pay for insurance for shipments incotermed as FOB, EXW & CFR. However, shipments labeled with incoterms CIF, CIP & DDP should be secured with insurance.
- Certificate of origin:- The certificate of origin can be obtained from a local chamber of commerce and/or the chamber of the industry. This is required for certain countries to prove the actual origins of the product.
- Movement certificate:- Countries with pacts like bilateral trade agreements, free trade agreements, and customs unions provide tax-exempt trade. These documents can be attached with the shipments to provide tax exemption. For example, getting an ATR certificate ensures that the products are free from custom duty customs in the EU countries and exported to a member EU country.
- Test & Analyze certificate:– Depending on the product type, specific documents and certificates may be required in different countries customs, for example, health certificates, tests, certificates, analysis reports, and much more.
- Inspection Certificate:- Certain countries may order an inspection certificate or standard audit report from an inspection firm depending upon the product type.
- Electronic Export Information EEI:- Countries like the US must electronically file export declarations into the customs system before the customs authorities physically inspect the product. For example, any product above the value of $2500 must be EEI filed to the US Census Bureau’s web-based system called AESDirect.
