Customs clearance Only after fulfilling various obligations and going through customs declaration, inspection, taxation, release and other procedures, the goods can be released, and the owner or Customs Broker can pick up the goods.
Before your international shipment can be delivered to customers, it must clear customs. Customs clearance is simply the process of getting goods into the country through customs.
Each country imposes import duties and taxes on cross-border goods. This helps generate income and protect the economy, the environment and citizens.
But what exactly happened in the customs office? This unresolved issue is a stumbling block for many merchants to lucrative cross-border shipping.
Whether you choose to ship by air or sea, customs clearance is a mandatory process in international shipping. Shippers must obtain export clearance before the shipment leaves the port or airport of origin.
Upon arrival in the destination country, import clearance is required to deliver the goods to the recipient.
With no single global standard, customs clearance can be complicated for both novice and experienced shippers. This guide will answer your key customs clearance questions and give you an overview of the procedures involved.
Table of Contents
what is customs clearance ?
Before shipping a variety of goods, shippers may want to know what customs clearance means and how it relates to their shipping options. Each international sea freight shipment must meet each country’s customs clearance quota.
Customs clearance is a necessary procedure to allow goods to enter a country through an authorized customs broker. In this process, it also contains information on imported and exported goods related to the parties involved in the process.
Defining customs clearance is easy. This is the process of obtaining permission from a country’s government through customs to bring goods out of its territory (export) or into its territory (import). However, explaining the process of completing customs clearance is a more difficult task
Import and export clearance procedures are very similar. Importing materials and products, however, requires a valuation of the goods and payment of import duties and duties.
When is the procedure for customs clearance required ?
Generally speaking, customs clearance is required when you are transporting commercial cargo from one country to another by land, air or sea. However, there are some exceptions.
Europe
The movement of goods between countries in the Schengen area of Europe can be achieved without customs clearance because the borders have disappeared. Even smaller shipments are exempt from the need for formal customs clearance. For example, if you’re shipping to the United States and your shipment is worth less than $800 (USD), the shipment is exempt from customs clearance and duty payment.
Since import and export clearance procedures vary from country to country, you must do the necessary research or hire an expert such as a Customs Broker or freight forwarder.
United States
All packages entering the United States from other countries require customs clearance. U.S. Customs and Border Protection provides you with a form to complete your shipment description. The description provides a specific description of the package contents, quantity, purchase price, item weight, and country of origin.
During the customs clearance process, it is important to fill out the customs declaration form correctly to avoid legal issues. Items under $2,000 do not need to be declared.
A conservation officer prepares the import documents and releases them for delivery. Packages under $200 usually clear customs without any additional paperwork.
Which are the necessary customs clearance documents?
1. Commercial Invoice
The seller of the goods issues the commercial invoice to the buyer. It’s a legal document that serves as proof of sale between the two parties. When importing, the customs broker uses the commercial invoice to determine the true value of the goods and assess the duties and taxes due. Here are some of the details that customs authorities look for on commercial invoices: We provide blank file templates that you can download for free(Commercial INVOICE)
2.Packing List
The packing list includes all details about the contents of a shipment and plays an important role in the shipping process. In addition to being used by the customs broker for the clearance, freight forwarders need the details to create a booking with a carrier and issue the bill of lading. Here are some of the details that usually appear on packing lists:We provide blank file templates that you can download for free(Packing List)
3.Certificate of Origin
A certificate of origin indicates which country the material comes from or which country the product comes from. This document usually contains information about the goods themselves, the destination and the country of origin.
In some countries it is required anyway, in others it is only for certain products. A Certificate of Origin helps to determine if your goods are eligible for import, if they are subject to customs duties and if they receive any preferential treatment.
There is no standard format for a certificate of origin. Usually the exporter or manufacturer creates the file. Official certification from an authorized third party (such as a chamber of commerce) may be required. We recommend exporters check with the buyer and/or an experienced freight forwarder if a Certificate of Origin is required.
4.Letter of credit or other payment terms
A letter of credit is essentially a letter from a bank guaranteeing that the seller will receive payment in the correct amount on time. If the buyer fails to pay, the bank must pay the full or the balance of the purchase to protect the seller.
While letters of credit are still widely used, other payment instruments are also available:
Prepayment – The exporter receives payment by bank transfer or credit card prior to delivery.
Open an Account – Goods are shipped and delivered before payment is due, which is desirable for buyers but can be risky for carriers.
Documentary Collection – The bank in the importer’s country will collect payment on the shipper’s behalf.
5.Bill of Lading or Air Waybill
A bill of lading is a legally binding document issued by the freight forwarder to the shipper. It details details such as the type, quantity and destination of the cargo carried. A bill of lading is a contract between the carrier and the shipper. It is a title document that can be transferred by endorsement. Regardless of the mode of transport, this document must always accompany the shipment.
The term bill of lading is usually used for goods shipped by sea. For air freight, the term air waybill is more common. Both documents serve the same purpose. If you ship your goods through a freight forwarder such as Shipa Freight, they will issue you a bill of lading or an air waybill.
6.Other customs clearance documents
Sometimes customs authorities will require additional documents to complete the process.
- Import and export license
- Inspection certificate
- Dangerous Goods Declaration
- license
Three Common Reasons For Customs Clearance Delays
1:Reasons for the goods themselves
1.Special name of goods declared
Sensitive goods such as powders, liquids, charged magnets, and solids are more likely to be inspected by customs than general goods. Such goods take longer than general goods, so customs clearance is generally delayed.
2.Famous brand and infringing products
When selling products, there must be authorization from the brand. When these products enter the country, customs will ask for a brand authorization. If not, customs clearance will be delayed, resulting in detained goods by customs, or even directly ordered to return.
3.Prohibited goods
Every country in the world has its own prohibited goods, such as drugs, firearms, ammunition, weapons, etc. Everyone is familiar with them. These are all prohibited from entering the country. The specific prohibited goods shall be subject to the requirements of each country.
2:Reasons for the owner or the agent of the customs broker
1.Logistics And Transportation Methods
In order to save freight, sellers choose logistics transportation with cheap price and long transportation time
2.The complete information of the goods is not standardized and incomplete
The owner himself did not fill in the information and documents completely. If the product quantity is incorrect, the product name is written casually, and the declared value does not match the actual value. Many sellers have done this. In order to pay less tax, the declared value of the goods is reported a little less, and sometimes it is too low, which will lead to delays in customs clearance. Shipping legal compliance is the most important!
3:Customs Issues
1.Taxation
Customs believes that the declared value of your goods does not match the actual value. If your declared value is consistent with the value of the goods, but the customs thinks it is different, in this case, you can go to customs with the certificate of value of the goods. If the declared value of your goods does not match the actual value, under-reported or over-reported, as long as it is found by the customs, you will have to pay tax.
2.Routine inspection
Customs random inspection of goods is routine inspection. If your goods are randomly inspected, you can only wait. Routine inspections can generally be completed within 1-3 working days. If the customs thinks that the goods are no problem, they will be released.
What is a Customs Broker?
A customs broker is the importer’s agent and assists the importer in processing customs transactions.
These agents are authorized by customs laws. A customs broker is an individual or company licensed by the local state customs to organize customs declarations and customs payments, and understand how CBP’s release of goods affects this process.
How can I find a customs broker?
The easiest way is to have your carrier handle customs clearance, for which you will have to pay customs fees. For example, FBAFO has authorized customs brokers worldwide to clear customers’ goods.
Even if you work with a freight forwarder like FBAFO, you can hire your own customs broker. However, keep in mind that you will need export clearance at the port of departure and import clearance at the port of arrival.
You must also be aware that your carrier will not be responsible for any additional charges you may incur if a third-party customs agent causes delays in the shipping process.
What services can customs brokers assist with?
Customs agents can assist in processing HTS codes based on 8-10 digit product classification codes. The first six digits are the HS code and the importing country contains consecutive numbers provided for additional classification. All codes are administered by the U.S. International Trade Commission.
Furthermore, it is difficult for customs to determine the country of origin. Country of origin is important for labelling. It is defined by the country where the goods are assembled or where most of the work goes into the product.
Advantages of Customs Brokerage
A customs agent can be responsible for shipping the product. The customs broker will check that you are complying with customs regulations. Delays will occur if customs regulations are not followed.
The way customs brokers operate their business can avoid the shipping issues that can arise from trade agreements. There are trade agreements designed to reduce tariffs and taxes, such as the ASEAN, JPEPA and EFTA Free Trade Agreements.
If the customs broker is unable to process the product you are shipping, they will notify you. In this case, they can deliver your shipment as safely as possible.
It’s always great to have outside sources to validate your goals and commodity reasons. By doing this, you will develop a closer relationship with your customs broker, who will advise you on your business model.
Provide the correct documents to the customs agent. You are still responsible for reporting and paying taxes and duties, but a good customs broker can correct mistakes and let you know if any important information is missing.
FAQ
How long does custom clearance take?
Customs clearance takes less than 24 hours, but it can sometimes take days or weeks for shipments to be inspected.
Due to the variety of systems and protocols around the world, it is difficult to predict how long the customs clearance process will take. Usually, import clearance can begin during transit and before reaching the destination country, provided the necessary documents are provided. Many countries offer online customs declaration systems that allow authorities to release goods within 24 hours.
The deadline can be extended to days or even weeks if customs authorities have questions, request additional documentation or insist on inspection of the shipment. In order to avoid storage charges at the port of arrival or airport, it is vital that both buyers and sellers provide the necessary documents together.
When is customs clearance needed?
Generally speaking, customs clearance is required when you are transporting commercial cargo from one country to another by land, air or sea. However, there are some exceptions.
Where can I find a customs broker?
Depending on the freight forwarder, they take over the transport logistics of the delivery and provide customs and import clearance services. This may help you avoid multiple outsourcers.
It is relatively easy to find customs brokers online. Not every broker will be able to cover all entry points and it is important to note whether their specialty is seaport or air freight.
Each service is tailored to a specific delivery method and includes import details that can generate a quote. Compare every offer you find and verify the broker’s credentials before choosing one. It is also important to check the reviews of other customers.
What is the cost of customs clearance?
Customs charges consist of two main parts. The first is the customs clearance fee. These are the fees for preparing and submitting customs declarations. If brokerage services are part of the services, this fee shall be payable to the customs agent or freight forwarder.
The second part is duties and taxes. These are calculated by customs agents and are usually a percentage of the value of the goods and shipping costs. Duties and taxes usually have to be paid directly to the customs authorities.
The type of goods you import determines the duties that the customs broker must apply. Use a customs code search and the broker will find the correct tariff based on your item description. Note that tariffs vary by country and can vary widely. Certain goods can often be imported into a country without paying import duties. It’s worth checking with your customs agent beforehand to make sure your product is free.
Customs inspection fees may apply if the authorities conduct an intensive customs inspection of your shipment. Unfortunately, there is no way to know in advance whether your item will be selected for this type of processing.
Customs Clearance Agent In China
If you send the goods to China, you must go through the customs clearance of the Chinese Customs and Border Protection Bureau. Need to obtain complex requirements and complex forms required for China customs clearance, it is recommended to use Customs Clearance Agent In China
Customs Clearance Agent In China must have a good understanding of trade requirements and procedures, as well as customs and tariff regulations. Customs Clearance Agent must be aware of any potential issues affecting each inbound item they represent, including cargo clearance and other government agency requirements.
How China Imports Goods
For imported goods, in addition to temporary entry, there are two ways recognized by China Customs: one is import by general trade declaration, and express declaration.
China Customs website: www.customs.gov.cn
Contact: 010-65194114
Contact address: No. 6 Jianguomen Inner Street, Beijing
Postcode: 100730
Advantages of general trade declaration
The advantage of general trade declaration is that it can import the required materials in large quantities, and will provide proof of all taxes and related fees levied by the customs.
Disadvantages of general trade declaration
(General trade import requires various documents, and the approval documents must be complete, and the processing time will take a long time). It requires that imported goods must be separately declared for entry using a trailer, which will increase the cost and time delay of imported goods. General trade is mostly applicable to: production of raw materials, mechanical production lines, and other bulk high-value goods
Advantages of express declaration
As far as express import is concerned, its advantages are obvious. First of all, it does not require the owner to provide the documents and related certificates of the goods. Second, because the information it requires is only the commercial invoice and packing list of the goods, the time and speed required for express import are relatively fast, from receiving the goods to importing. Customs clearance to the mainland generally takes one to two days.
If you encounter a lot of goods, you can declare the import in batches, so the import of a large number of goods can also be operated by express import. Express imports are mostly applicable to: IC, communication products, alcohol, maintenance products, cosmetics, precious leather goods, small tonnage machines, etc.
China Customs Clearance Process
1:Confirm The Delivery Date Of The Goods
Confirm order – confirm the price and quantity of the goods.
Confirm the contract – confirm the terms of the contract, the final delivery volume, the price of the goods, and the latest shipping date.
2:Notify Contact Freight Forwarder
Notify the domestic agent and contact the domestic freight forwarder to prepare customs clearance documents.
Customs clearance documents: B/L, invoice, packing list, contract, certificate of origin, quality inspection certificate, packaging statement, etc.
3:China Customs Clearance Process
- Exchange order – go to the freight forwarder or shipping company to exchange the D/O. (According to the bill of lading in hand to determine where to change the bill. H B/L freight forwarder bill of lading M B/L ship owner bill of lading)
- Electronic declaration – computer pre-recording, document review, sending, contact with customs/release.
- Application for inspection – after the electronic declaration is released, go to the Commodity Inspection Bureau to go through the quotation procedures with one of the four pages of the customs declaration form, and issue the customs clearance form or knock on the third inspection seal.
- On-site handover form – Customs on-site handover form
- Inspection – The customs will inspect the goods according to the supervision conditions of the declared name of the goods and the inspection probability of the day. If there is inspection, an inspection notice will be issued.
- Release – Customs release has the following steps: 1:direct release of goods 2:Issue an inspection notice or release twice without inspection 3:After inspection, they will be released after being sealed.
Do You Have Any Questions?
Although this page covers points related to customs clearance, you may still want to learn more about the process. If you have any questions, please feel free to contact us.
Our company provides freight and value-added services, customs clearance and regulatory compliance for your international supply chain.
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