Importing and exporting freight is a massive international trade and economic growth component. It is essential to understand customs clearance, a mandated and necessary legal procedure you must undergo before your goods can move in and out of countries. The process can be complex, but you can confidently navigate it with the proper knowledge and understanding.
Whether you are expanding into international trade or need reminding of the procedures and requirements, this customs clearance 101 guide will equip you to handle customs clearance effortlessly. You can learn how to negotiate shipment clearing or seek reputable assistance. Experts in the logistics network can help you keep your supply chain moving without unnecessary delays.
What Is Customs Clearance?
Customs clearance is when a business or sole proprietor declares all imports and exports to and from a country to authorities such as the United States Customs and Border Protection to assess and clear for movement. The goods include commercial shipments and personal effects. Once the freight and paperwork pass inspection and the business has paid all taxes and duties, the customs authorities will issue documentation as receipt of payment and permission.
The Custom Clearance Process and Procedure for Exports
The following demonstrates what you need and how to send export goods through customs. In essence, you need to gain permission to transport the goods out of the country, and this depends on what you are shipping and the trade agreements between the exporting and importing countries.
1. Documents Required for Export
The buyer and authorities may require additional documentation, though these are the most common ones needed:
- Proforma invoice or purchase order from the buyer
- Sales invoice
- Customs packing list
- Letter of credit
- Bill of exchange
- Certificate of origin
- Commercial invoice
- Bill of lading or air waybill
- Shipping bill
- Bill of sight
- Warehouse receipt
- Health certificates
- Export license
2. Acquiring an Export Business Number
You must register your business with the customs authority to obtain your export business number.
3. Certificate of Origin
You need a COO from the relevant authorities before exporting your goods to another country. The COO is an essential piece of documentation in international trade as evidence that the items listed originated from a given country.
4. Shipping Legal Goods
Before trying to ship your goods, please visit the customs websites for the exporting and importing countries to ensure the freight is welcome in your intended destination. A product may be legal and permitted in your country, but it might not pass customs on the other side due to restrictions or prohibitions.
5. Export Commodity Codes
Commodity codes provide easy product identification for customs agencies, enabling them to choose applicable customs duties and taxes. Therefore, you need to determine which export commodity codes you need to ensure efficient and legal export of your goods. The Harmonized System Codes are one of the most commonly used industry classification systems for import and export goods.
6. Obtain an Export License
You may need an export license or permit to export specialized items. Whether you need a license depends on the destination, the buyer and the product. Often, this documentation is unnecessary.
7. Complete an Export Declaration
You should complete an export declaration for each shipment to provide information on your goods, including the value, type and number. Customs use these details to control exports and establish statistical information.
Imports Process and Procedure at Custom Clearance
There is some overlap between imports and exports, and the paperwork for both must be in order. Next, we’ll walk you through the process of receiving imported goods through customs. At this point, you need permission to bring your products into the country, and this depends on the type of goods you receive and whether all documentation is in order.
1. Documents Required for Import
As with exporting goods, you will need relevant documentation to ensure your products clear customs for you to obtain them. The most frequently required documents are:
- Bill of entry
- Sales invoice from the supplier
- Commercial invoice
- Purchase order
- Proof of insurance
- Packing list
- Pre-shipment inspection certificate
- Bill of lading or air waybill
- Transportation invoice
- Import license
- Letter of credit
- Industrial license
- Health certificate
- Consulate document
2. A Customs Officer Verifies Your Paperwork
Your shipment must go through U.S. CBP when it arrives at a port or airport and seeks entrance into the U.S. The customs officials inspect the accompanying documentation to ensure accurate and complete information. In some instances, you will need additional documents, and in rare cases, you will also need to apply for an import license or permit. On these occasions, officials may do further inspection.
Once they verify the information, the customs officials will clear the shipment and permit entry into the country. The documentation must contain the commercial invoice, including the shipper’s and receiver’s names and contact information, plus the export date and waybill number.
3. The Customs Officer Assesses Tax and Duties Owed
A customs officer will then determine whether taxes and duties apply to the shipment. These amounts often vary depending on the type of goods, their value, if specific import regulations pertain to them and if they surpass certain tax brackets. Having established that, the officer will check whether you have paid your taxes and duties or if you still owe.
If there are restrictions or regulations on your imported goods, you will incur additional fees on top of the tax and duties.
4. Tax and Duties Payment Request
There are two payment options for tax and duties. The first is delivery duty unpaid, where the fees remain outstanding. The customs officer will typically involve an independent customs broker to collect the amount, which often includes late payment, storage and the brokerage fee.
Alternatively, with delivery duty paid, the seller or sender already covered the import duties and taxes, which makes for a far smoother process. The customer or receiver must only pay the shipping fees to avoid added delays and further payment requests. DDP is the preferable means of shipping goods because the delivery process is far smoother.
When shipping goods internationally, it is vital to know whether the buyer or seller is responsible for goods at any point — including fees — and this is where understanding free on board becomes relevant.
5. Customs Clears Shipment for Release
Once officials have verified all paperwork and you have paid taxes and duties, your customs clearance is ready to go, and you can collect your shipment. Some products may receive a conditional release from customs and must meet specific requirements before leaving the site. The conditions often relate to packaging, labeling and the need for specialized certificates and handling.
Though the customs clearance time can vary, it is rare for customs to hold goods for longer than 48 hours to a week, and it often takes even less. To ensure the quickest process, ensure all paperwork is in order, goods are fully compliant and ship DDP.
Trust Nationwide Transport Services for All Your Import and Export Needs
Customs clearance is a simple enough concept, but you might still need help declaring goods to customs authorities. With the necessary expertise, insights and partnership, you can ensure full legal compliance, efficient customs clearance and merchandise acquisition. At the same time, you can focus on your business and servicing your markets.
Nationwide Transport Services is an award-winning team of industry-leading logistic transport experts who have serviced our customers faithfully since 2009. We offer a full range of logistics solutions, including dedicated international import and export services, where we assist with handling tariffs and all documentation and act as a freight shipping company to ensure the smooth transportation of your goods at the best possible rates.
To learn more and discuss your import and export needs, contact us or speak to a logistics agent at 877-278-3135 today!
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