Customs clearance

Customs clearance is a process handled by the Customs Department of your country and the receiving country when your business is working beyond the borders of your country. Goods are declared to Customs authorities when entering or leaving a country in this process. Items that are imported or exported, along with personal effects and commercial shipments, are subject to customs clearance.

The customs department are authorized by the government to implement policies relating to import and export. You should be familiarized yourself with the international trade policies of your country when looking to move goods across borders, as these policies differ based on country.

Customs duties are also collected by the customs department and they enable shipments into and out of the country. Cargo is warehoused in an area under customs jurisdiction to await clearance before it is released, when it enters a country.

The process of getting permission from the associated government agency to import or export goods is known as customs clearance. Customs clearance can also be defined as a document that the customs authority issues to a shipper which typically indicates that the goods are cleared for export and the shipper has paid all duties. 

The lists of all the goods you have in your cargo mentioned in your customs declaration document, along with the following documents on hand must be there to get this customs clearance document.

You will be able to move goods seamlessly across borders with Export and import license. You will be allowed to export goods, and whether you need a export license will depend on the type of goods you are shipping. You will be able you to bring in goods that are restricted with the import license. You have to apply to the licensing authority for export and import license.

Pro Forma Invoice is an agreement between all the parties involved in the transaction. It is the invoice that is sent by you to your buyers after they confirmed their order. It is used in place of a commercial invoice in some countries. The information in the pro forma invoice is used by customs authorities to determine taxes and duties.

Customs packing list is the list of all the items included in your shipment. This list goes with your shipment when it leaves the port to help transportation companies to keep track of every item included in your shipment. 

Country of origin is a document issued by you which have all the information about where the goods you are shipping are manufactured, processed or acquired from.

Commercial invoice is like the pro forma invoice, which connects you and your buyers by providing proof of the transaction between both parties. Information such as Your name and address; The name and address of the party receiving the shipment; The address to which the shipment will be going, if it is different from that of the receiving party; Customer reference number; Volume and weight of goods; The number and date of the invoice; Terms of sale of the goods; Terms of payment for the goods; Currency of payment for the goods; Quantity of goods sold; Description of goods; Unit of measure; unit price of the goods; total commercial value of the invoice; total price of the goods; Package marks; Mode of shipment; Freight insurance details; the tax identification numbers and other information of yours and the buyers; the incoterm you and the buyers had agreed upon; Miscellaneous charges and Certifications are included in this invoice.

The customs officer on duty will forward the shipment when they confirms a match of the shipment with the details on the commercial invoice.

Shipping bill is typically filed after the container carrying your goods is allowed to move out of the country. The customs officers can assess the value of the goods you want to export with Shipping bill.

Bill of lading or airway bill is a receipt that contain the list of the goods in the shipment you are looking to export. The bill of lading will be issued to you by the carrier of your shipment.

Bill of entry is filed before the shipment arrives at the port, by the customs broker. The bill of entry is required by the customs department to start examining your load and uses it for the clearance process.

The U.S. Customs and Border Protection authorizes customs brokers to assist with n activity called customs brokerage in which the importers and exporters get assistance with their customs issues. A customs brokerage firm ensures the compliance with customs regulations.

Customs Invoice is similar to commercial invoice and contain a specific format set by customs authorities.  It is part of the responsibility of your customs broker to get the customs invoice form for you to fill out.

Coverage for losses or damage to cargo while it is in transit is provided by Insurance certificate. Import duty aggregate can also be determined with the help of this.

Several steps are involved in the process of customs clearance. These include:

The first step of customs clearance is document inspection in which all the papers and documents will be reviewed by a customs officer. The customs clearance process will begin by the officer if all the documents are found to be in order.

Tax and duty calculation is the next step in which taxes are calculated based on the type of goods to be imported or exported in your shipment, their declared value, the customs laws of the country to which the goods are shipping, and the mode of shipping, and incoterm you chose.

Either a DDU (Delivered Duty Unpaid) or a DDP (Delivered Duty Paid) can be chosen by you. It will be checked by customs officials that which of the incoterms can be applied to your shipment. Your shipment will be marked as DDP (Delivered Duty Paid) if you have paid. This means, all taxes and import duties are paid by your customs broker in advance.

Your shipment will be marked DDU (Delivered Duty Unpaid) if you have not paid these taxes and duties. The cargo will be transferred by the customs officer to an independent customs broker to process and collect the payments in this case. Also, extra fees, such as inspection, handling, insurance,  storage, and disbursement will apply in this case.

The customs department releases the shipment when all outstanding taxes and duties are paid, and the shipment is released to its final destination.

The process can be made smoother and much more manageable by the help of the following tips: