What Is Customs Clearance and How Does It Work?
Before release of international freight upon arrival at destination or departure from origin, the owner must complete customs clearance.
The exporter must obtain export clearance before the cargo leaves the port of origin. Similarly, a package can only leave the destination port and into ‘free circulation’ once the importer has received import clearance.
Even seasoned shippers making customs entries can run into complications if they don’t have the appropriate documents on hand.
It’s critical you meet the conditions of the jurisdictions your freight is exported from and being imported into.
You can outsource the physical and administrative work of processing declarations. It remains your responsibility however as owner of the goods to ensure you have complied with customs rules and regulations. The obligation to have paid any duties and taxes due also rests with the owner of the goods.
The commercial invoice, packing list, and shipping document are essential for customs clearance. Still, your package will only physically leave customs control once all duties and taxes have been paid or guarantees given.
For certain cargoes, you may need additional documents such as import / export licences, or certificates of origin to clear customs.
What Documents Do I Need For Customs Clearance
Here is a brief list of documents you’ll need as a minimum in most cases to get clearance approval:
The commercial invoice is a critical document. It contains all the financial conditions of the buyer-seller agreement, including the shipping terms required for customs clearance.
In some cases, the importer can use a proforma invoice instead of a commercial invoice as an official document. Customs officials utilise the information on the invoice to assess the taxes and duties applicable to your cargo.
The packing list is part of the shipping documentation and contains precise information about the products. The freight forwarders will utilize this list to inspect and trace every item in your shipment as it comprises the weight, size, safety measures, and packaging for the cargo.
Exporters may sometimes integrate the above two documents into a single combined document called a CIPL (commercial invoice packing list).
Certificate of Transport
The certificate of transport may be either an Airwaybill for air freight, a Bill of Lading for ocean freight, a Consignment Note for an express shipment or parcel, or a Delivery Order for road freight, and is what the shipper and freight forwarder use to confirm receipt of goods for shipping.
Either the carrier or a freight forwarder will issue a bill of lading to you as the exporter. This further guarantees the legal receipt of your cargo and contains precise information about the shipping destination, the products you are shipping, and how you wish them to be handled.
Other Documents You Might Need For Customs Clearance
You may also need one or more of these documents depending on the nature of the cargo, the legal standing of the parties involved, or if you are claiming preferential rates of duty.
Import and Export Licenses
Having the correct licences in place when you import or export goods to and from foreign markets ensures the safety of the commodities you are shipping and is a prerequisite for carrying restricted goods.
The owner of the goods can obtain any import or export licenses required by applying to the appropriate licensing authorities, and these vary from country to country.
Certification of Origin (COO)
A Certificate of Origin (COO) states where the items originate, were processed or obtained from ensuring that the export or import is lawful and that export or import duties and taxes are correctly calculated.
The consulate or chamber of commerce can sometimes issue or certify this document. For claiming duty preferences, it’s usually the national customs body in the country of origin which issues the COO.
The exporter is responsible for delivering the certificate of origin following the rules and regulations of the destination country.
Working with experienced customs brokers makes international shipping easier. Customs brokers are registered and licenced professionals who can assist with customs clearance and guarantee that you have the proper documents for your freight shipment.
A purchase order is a formal declaration that you have received an order. This document contains information about the transaction, including the parties involved, the products, and the transaction date.