A nation is defined by its borders, its language and its culture. They also have their own laws regarding everything from taxes to import restrictions to lifestyle issues. If you’re trying to ship goods across national borders, you’ll certainly have to fill out a lot of paperwork. And you can’t get product to your customer or the supplies you need until they clear customs. Let’s learn more about customs clearance.
What Is Customs?
Customs is generally part of border control. They want to know everything that’s coming in and out of the country. Customs offices are typically located at ports of entry, though this could be a highway crossing the border as well as an ocean port.
Why Do Countries Have Customs?
They want to make sure that illegal weapons, drugs and terroristic material don’t enter the country. They want to ensure that import duties, the fees that are owed by anyone importing an item, are collected. Most countries have different duties or tariffs charged based on what industries the government wants to encourage or discourage. One product may have no tariff and another has a steep tariff.
Other items are subject to additional inspection for safety reasons. For example, you may not be allowed to import certain foods for health reasons. Livestock and plants may be screened or prohibited to prevent the introduction of diseases, pests and invasive species.
What Is Customs Clearance?
The clearance process is when the government officials review the paperwork and clear the item to leave their control. This includes but is not limited to:
- verifying the quantity and type of items being imported or exported
- verify that the necessary forms required for government record-keeping are present and complete
- verifying import duties were paid or collecting said duties
What Happens If You Don’t Have the Right Paperwork?
At best, your shipment gets delayed. At worst, the items are disposed of and you get nothing. In many cases, the items are shipped back to you or their point of origin at your expense.
How Can You Ensure That Your Products Pass Through Customs?
One solution is working with a customs broker. They can help you fill out the HTS codes that are used to import product and avoid problems with them. For example, the United States has a slightly different HS code system than the rest of the world.
Country of origin labeling is necessary to get items through customs. If you don’t have good documentation regarding its origin point, the items may be denied entry. If the products are thought to come from a country that the nation doesn’t do business with, the items may be returned or destroyed. Or the nation may simply charge whatever the highest relative tariff rate is. For example, if you can’t prove it passed through a free trade zone, you’ll have to pay the higher tax rate.
One solution to these problems is to learn the ins and outs of customs paperwork. The alternative is to hire a cheap customs clearance that specializes in this area. They know how to do the paperwork, and they understand the different requirements of various countries.
Some customs brokers back up their promise that your shipment will clear customs by offering bonds. If they don’t do their job, you don’t have to pay the fines or pay to get your product back.
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