Customs Clearance: The Must-Knows

When the goods move from one country to another, there is one step your international shipment cannot avoid – going through customs clearance. Customs activities are generally performed by dedicated experts, but good preparation can help you avoid unnecessary delays and frustration: the Freight Forwarding Experts share a few best practices you can adopt today to make the process flow smoothly.

The smooth handling of your customs activities starts with a precise description of the goods you are shipping. This is achieved through an internationally standardized commodity code, the Harmonized System (HS) Code, which will ensure that the correct duties and taxes are applied by Customs. Note that HS Codes differ from country to country so it is important to make sure you classify products correctly for both the export and import country.

• Universal 6 digit HS Codes from      World Customs Organization
• In the European Union, refer to      TARIC
• In the United Kingdom, refer to the      UK Tariffs Code
• In the USA, refer to the      Harmonized Tariff Schedule
• In Mercosur countries (Uruguay, Paraguay, Brazil and Argentina), refer to the Nomenclatura Comun do Mercosur

The items in your shipment have been correctly identified – but can they leave the country or enter their destination location? Especially for import, some goods may be subject to certain government department regulations and require licenses or other permits depending on their nature–for instance health related products may require licenses from a Health Authority. It is key that you find out the specific requirements for your shipment before importing or exporting.

A properly formatted invoice will ease the control of your shipment for the customs department, your overseas business partner and your customs broker. Here is what is should contain:

• The HS code for each article, both for Import and Export countries
• A total amount, without VAT
• The currency in which the transaction occurred
• An invoice number
• The name and address of the shipper (i.e. the seller) and the consignee ( the buyer)
• A VAT Number – it is not mandatory for both shipper and consignee, but displaying both can considerably speed up the process
• For exports from and imports to Europe, an EORI number (Economic Operators' Registration and Identification), in order for your customs broker to be able to perform the necessary activities.
• An indication of the total weight and number of packs that matches all the other shipping documents.

These documents will be necessary both at origin and destination, whether your goods are being cleared for export or import:

• Contact name and number for Consignee and Shipper: your broker will need to contact the consignee or the shipper to arrange the customs clearance.
• Packing list: it should match all the other shipping documents in terms of total weight and number of packs.
• Country of Origin: proof of origin might be requested during export clearance, and is mandatory for import if you want to benefit from lower – or zero-rated – import customs duties.
• Authorizations based on your product – is a license required? In some instances, the cargo will require further inspection prior to its release – this is often referred to as export control. In this case, you have to clarify the nature and purpose of your goods to the export country’s customs authorities.

The inspection can take place physically or be limited to your shipment’s documentation, whereby customs authorities will apply different levels of control procedures to ascertain that the exportation is compliant with national and international laws and regulations. They may require to inspect the container, its products or have the usage of the products demonstrated for them before allowing exportation.

Here is our pro tip: consult with your customs broker prior to exporting by providing documentation samples and information on your goods’ nature and possible usages. This will enable your experts to let you avoid unnecessary delays or penalties.

If you use the services of a customs broker, the import process and controls will be an experience similar to that of the export clearance. It is important to share your delivery plan with your broker, along with all the necessary documentation – they will in turn create a compliant customs declaration. The key documents remain the same as seen above, with a particular attention needed for import licenses and proof of origin.

Based on the documentation shared by your broker, the Customs office either decides to release the goods or to inspect the transaction. In the latter case, your customs broker will coordinate with you the further actions needed.

Unless exempt, all imported commercial goods are subject to customs duties and taxes based on their HS Code tariff classification. Generally speaking, it is the importer of record who will pay the import duty and tax.

Some goods are also assessed in relation to other taxes. This includes excise duties and anti-dumping duties, which are applied to goods priced significantly below their value in their import market.

• Does your transaction have a VAT number in both origin and destination countries?
• Direct payment or deferred payment? Ascertain that you are able to pay customs duties, excise duties, VAT either directly or via a deferment account. Your customs broker can also outlay and settle payment on your behalf against a small disbursement fee.
• Do you have the correct Power of Attorneys in place? If you are using a customs broker, you and your trading partners need to take the correct dispositions to allow them to operate on your behalf.
• Do you have an EORI number? You will need to qualify as registered economic operator if you are exporting from or importing to Europe, or use a customs broker that is an authorised economic operator.

The documentation resulting from the clearance process must be kept for a set period of time that differs per country but can be up to 10 years or longer. For compliance audit purposes. DHL Global Forwarding offers archiving services, so customs authorities’ inquiries will be answered efficiently, without delay or prosecution risk.

Export cleared, import cleared and duties paid? It’s time for your shipment to arrive at destination. Experience a seamless import or export journey with DHL Global Forwarding.