What is Customs Clearance?

Customs clearance is the process of getting permission from the associated government agency to either move goods out of a country (export) or bring goods into the country (import). We can also define customs clearance as a document that the customs authority issues to a shipper.

Key takeaways:

Customs clearance is a necessary procedure before goods can be imported or exported internationally.

If a shipment is cleared, then the shipper will provide documentation confirming customs duties that are paid and the shipment can be processed.

A freight forwarder will usually handle the customs clearance process, but you may also choose to hire a customs broker.

If you don’t prepare your shipment correctly, customs can hold or even confiscate your goods

Information you need to provide for customs clearance:

1.Tax information of the importer and exporter

2.Origin and destination of the import/export

3.Name and country of the means of transport

4.No. of packages, gross and net weight, volume and description of the goods

5.Payable taxes (for imports)

6.There are certain types of merchandise that may require inspections, such as health or pharmaceutical goods. In these cases, you will also need to provide certificates to prove that the merchandise has passed relevant controls.

Documents needed for customs clearance:

1.Commercial invoice: This certifies the trading operation between the parties. Fiscal data of both parties, description of the cargo, the Incoterm under which the transaction is taking place, and the value of the cargo must be listed on the commercial invoice.

2.Packing list: The packing list is issued by the seller and accompanies the commercial invoice. It should detail the merchandise (number and type of packages, weights, volume, etc.)

3.Bill of Lading: The Bill of Lading, or B/L, is issued by the transport company. It certifies that the goods have been loaded on board the means of transport. The customs agent must have original copies of this document.

4.You may be required to produce additional documentation depending on the type of merchandise and/or destination country.

Notes:

Make sure that your paperwork is complete and 100% accurate. Incomplete paperwork or paperwork that has even the slightest mistake can be very costly to you.

Understand that your shipment will go through customs clearance in every country through which it goes.

Understand that international trade laws and regulations change frequently.

Make sure that you pack your shipment correctly.