Customs clearance is an essential process that must be completed before the international import or export of goods can occur. Once the goods are cleared, the shipper will present documentation that attests the payment of customs duties, and the shipment will then be processed. The use of a customs broker when importing or exporting goods can simplify the customs clearance process even more.
What is customs clearance and why is it necessary?
When preparing to ship different types of goods, a shipper may have questions about the meaning of customs clearance and how it impacts their shipping choices. It’s mandatory for every ocean freight shipment that crosses international borders to undergo customs clearance in every country. This process is facilitated by a licensed customs broker, and it requires details about the shipment, including information about the parties involved in the import and export of goods.
How can a Customs Broker help?
First, let’s understand what a customs broker really is. A customs broker is a representative who works on behalf of importers to facilitate their customs-related transactions. In the UK these brokers are legally allowed to operate under tariff laws and are licensed by the HM Revenue and Customs (HMRC). By hiring a customs broker or using customs clearance services, businesses can ensure that their shipments comply with all applicable regulations and are processed efficiently. Customs brokers are experts in navigating complex customs procedures and can provide guidance and assistance in completing the necessary paperwork, calculating taxes and duties, and handling any issues that may arise.
What is the Process of Customs Clearance?
The customs clearance process consists of 4 steps starting with the paper verification and ending with the release of shipment.
1. Paperwork check
The role of a customs officer is to confirm that all the documentation submitted for a shipment is accurate. For international shipments, commercial invoices are mandatory. After the officer has reviewed and verified the paperwork, it will contain details such as the shipper’s information, the receiver’s contact details, the export date, and the airway bill number for the shipment.
2. Customs officer check
When reviewing a shipment, a customs officer will assess whether any fees need to be levied. The decision will depend on factors such as the nature of the goods being shipped, their value, and the laws that govern imports in the destination country. In cases where the value of the goods exceeds a certain tax bracket, the officer will verify that any applicable taxes and duties have been paid.
3. Payment of outstanding taxes and duties
In cases where taxes and duties remain unpaid, the customs department will request businesses to pay them. There are two methods of payment available: Deliver Duty Unpaid (DDU) and Deliver Duty Paid (DDP). If a shipment is marked as DDP, it indicates that the taxes and duties have already been paid. The cost of these services may be included in a fixed price when purchasing a shipping label, but it can still be expensive because brokers are independent and charge different fees. The total cost of the shipment can be affected by various fees, such as brokerage fees, storage fees, late payment fees, and other charges.
4. Shipment release
Once the taxes and duties have been settled, the shipment will be released. Assuming that all the necessary paperwork, taxes, and duties have been handled correctly, the goods will then be transported to the end customer.
In conclusion, it is essential for businesses that transport products (especially perishable ones) to opt for customs clearance services in today’s globalized business environment. Having these services handled by qualified customs brokers enables them to comply with regulations, streamline operations, manage costs, and enhance customer service, ultimately leading to the growth of their business in the international marketplace.
Disclaimer:
This press release may contain forward-looking statements. Forward-looking statements describe future expectations, plans, results, or strategies (including product offerings, regulatory plans and business plans) and may change without notice. You are cautioned that such statements are subject to a multitude of risks and uncertainties that could cause future circumstances, events, or results to differ materially from those projected in the forward-looking statements, including the risks that actual results may differ materially from those projected in the forward-looking statements.
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