Customs clearance is a compulsory process which goods must pass every time they enter or leave a country. Custom clearance procedures are designed to keep global trade flowing smoothly by ensuring that the correct taxes and duties are paid, and regulations are complied with. There are four key stages to the customs clearance process:
- When entering/leaving a country, the goods are declared to the relevant customs authority, including details of their value, origin and destination. Supporting documentation, such as invoices or bills of lading, may also be required.
- Based on the documentation provided, the customs authorities will calculate how much must be paid in duties and taxes.
- If the customs declaration meets the requirements and all necessary payments have been made, the shipper will receive documentation confirming the goods are cleared to legally pass the border.
- Once customs officers clear the shipment, it can be released for onward travel/delivery.
International imports and exports across all industries must pass customs clearance, including commercial shipments. Individuals and businesses can arrange this, however it is worth noting that for international ocean freight shipments, the goods must pass customs clearance in every country. As such, this task is typically handled by a specialist customs broker.
What is a customs declaration?
A completed customs declaration is required as part of the mandatory customs clearance process. Usually filed electronically, the document includes key information about the goods which are passing the customs border during the import/export process. If the declaration does not meet the requirements set out by the relevant customs authority, the goods may be held at the border for inspection or until further information is obtained. To avoid these kinds of delays, a specialist customs broker is often used to complete and submit the customs declaration.
Who pays customs charges?
Technically speaking, customs duties and taxes can be paid by either the buyer or seller. Having said this, in commercial shipping, it is almost always the importer or consignee who pays customs charges. In other words, the person bringing the goods into a country from abroad is the one that covers any customs duties and taxes.
The party responsible for paying customs charges will be pre-agreed and set out in the contractual incoterms. It is important for those involved in the international shipping of goods to understand who is responsible for paying customs charges, as well as the accepted payment methods and deadlines of the relevant country, which can vary significantly around the world.
What is a customs broker?
A customs broker helps simplify the customs clearance process when importing or exporting goods across international borders. They ensure the smooth transit of goods so that the items get to where they need to be without any unnecessary delays of charges. An individual or business can appoint a customs broker to take care of the administrative tasks related to customs clearance, such as ensuring the correct customs declaration is submitted and all necessary duties and taxes are paid. A customs broker may also offer to pay duties on behalf of the importer as part of their service. Customs brokers have specialist knowledge of the local customs rules, regulations, and requirements, so using their expertise can help to avoid errors and ensure goods clear customs easily and efficiently.
What are custom clearance services?
Due to the complexity of customs regulations, many organisations enlist a customs broker to assist with this part of their business operations and prevent any delays or disruptions. But what exactly are customs clearance services and what support can they provide? They can help with:
- Preparing customs documentation, including correcting errors and identifying any missing information before submitting the paperwork.
- Ensuring compliance with customs regulations in the destination country.
- Identifying and advising on any trade agreements which can help reduce duties and taxes.
- Paying customs duties and taxes for the importer, making customs clearance easier and simpler for the client.
- Liaising with the relevant authorities to resolve any issues.
- Providing post-clearance support for clients, such as compliance audits and record-keeping.