What is Custom Clearance?
If you run a business that imports and exports goods, then you are probably well acquainted with the term Customs Clearance since customs plays a large role in cross-border trade. Those who are just getting into import-export business will find it a foreign concept and one that presents serious challenges to small businesses since it is so complicated.
Customs Clearance - What is it?
An important part of customs clearance is to attain permission from the governing administration, through its customs authority, to either take products out of a country’s territory (export) or have them enter their territory (import).To help you prepare for your journey into the import-export market, we’ve compiled a handy list of popular customs clearance questions to help answer your questions.
Frequently asked questions? FAQ
- Is customs clearance required for importers/exporters?
- Can imports and exports be cleared differently?
- How do I clear customs? What documents do I need?
- When does cargo clear at the port?
- How do I check the progress of the clearance process?
1. Is customs clearance required for importers/exporters?
Customs clearance is a mandatory action for any company shipping internationally, even via air freight or sea freight. Any cargo that leaves a port of origin or airport must be cleared for export. When the shipment arrives at the destination country, the freight must first undergo import clearance.
2. Can imports and exports be cleared differently?
The process of importing materials and products involves assessment of the goods along with payment of import taxes and duties.Although, the process of import and export custom clearance is the same.
3. How do I clear customs? What documents do I need?
It usually involves preparing documents for submission with the consignment, either electronically or physically. As a result, tax and duty calculations can be performed by the concerned authorities.
The documents needed for custom clearance are:
ProForma Invoice
Customs Packing List
Country of Origin or COO Certificate
Commercial Invoice
Shipping Bill
Bill of Lading or Airway Bill
Letter of Credit
Bill of Exchange
Export License
Warehouse Receipt
4. When does cargo clear at the port?
Almost every country offers online systems for submitting customs entries, which allow them to release the goods within 24 hours.In four steps, here’s what happens when a shipment arrives at customs:
A customs officer examines your customs paperwork.
Commercial invoices are important because they list the shipper and recipient, as well as the export date and airway bill number. These documents must be accurate.
Import duties and taxes are assessed using the customs paperwork.
Generally, import fees differ by type, value, and country of destination. Import duties are charged on goods that exceed their nominal value,
Customs requests payment for taxes and duties, if applicable.
Your shipment is considered tax-exempt if the customs officer confirms the duty and taxes were paid.
Your shipment cleared customs once all duties are paid.
After customs clearance is completed, the shipment is transported from customs to the final destination by your chosen courier service.
If the customs authorities have questions, require additional documentation, or insist that the goods be inspected, the inspection may last a few days or even weeks. A seller and buyer will need to cooperate if they want to avoid storage charges at the port or airport of arrival.
5. How do I check the progress of the clearance process?
In most cases, the customs broker or freight forwarder will be able to notify you when your shipment has cleared customs. In case of delays or holdups, they should inform you immediately.
Conclusion
Even though the information provided is a brief overview of what is required for customs clearance, it may be sufficient as a strong starting point for more in-depth research.