16 September 2021 –
What Is Customs Clearance
Before the arrival and departure of any international freight, going through the process of customs clearance is compulsory. The process involves the preparation and submission of documentations required to facilitate export or imports into or out of the country.
Before the cargo leaves the port of origin, export clearance must be obtained. Likewise, shipment can officially enter the destination country only after import clearance is acquired.
Customs clearance even for seasoned shippers, can be a complex process with many pitfalls if the customs entry is not processed with necessary documentation, licenses, duties, taxes, and payments. It is essential to meet the conditions and requirements of specific countries to ensure your freight is allowed to be exported from the country of origin and permitted to enter the country of arrival. It is your responsibility to adhere to these restrictions and prohibitions when moving your goods internationally.
Whilst the key documents for clearance are the commercial invoice, packing slip and shipping label, your shipment only clears customs once all duties are paid. In some countries, certificate of origin (COO), additional licenses and other paperwork could also be a factor on the degree of control.
To obtain the clearance approval, here is a full list of documentation you will need:
Purchase Order
A purchase order is the official declaration of receiving an order. This document contains the details about the transaction, parties taking part in it, the type of products involved, and the date of the transaction.
Commercial Invoice
The commercial invoice is a vital document. It contains complete details of the financial contract between the seller and buyer, including the freight shipping terms which is required for customs clearance.
Pro Forma Invoice
Proforma invoice is considered as the preliminary bill of sale. However, in some countries, the proforma invoice is recognized as an official document in place of a commercial invoice. Hence, customs authorities will use the details on the invoice to estimate and determine taxes and duties your shipment is subjected to.
Packing List (EXPORT)
As part of the shipping documents, the packing list has itemized detailed information of the goods. This includes the cargo’s weight, dimensions, safety measures, and packaging type. This list is used by the freight forwarders during inspection and to track every item in your shipment.
Export and import license
When you import or export goods to and from foreign markets, having the proper licenses will ensure the safety of the goods being shipped and a must when transporting restricted goods.
Import-export license can be obtained by applying to the relevant licensing authorities.
Certificate of origin (COO)
A Certificate of Origin (COO) is a document that declares the country-of-origin of where the goods are manufactured, processed, and acquired from. This is to establish the goods being exported/imported are legal and if the export / import is subject to duties.
This document can be certified by the consulate or chamber of commerce. The exporter is responsible for providing the certificate of origin according to the laws and regulations of the destination country for the shipping process.
Shipping bill
The Shipping bill is prepared according to the category of export goods and the value of the goods you want to export. It is issued by the shipping agent on behalf buyer, seller, C&F agent/Freight Forwarder/Customs Broker after the vessel carrying your goods is allowed to move out of the country.
Bill of lading / Airway bill
A bill of lading (BOL)is the official document used to confirm receipt of goods for shipment between the shipper and freight forwarder.
A BOL confirms the legal receipt of your cargo and has detailed information about the shipping destination, the goods included, how they should be handled. This document will be issued from the freight forwarder to you, the exporter.
Bill Of Entry
This is a legal document that is filed by importers or customs clearance agents on or before the arrival of imported goods. As part of the clearance process, the customs department will use this document to examine your cargo.
To make international shipping more effortless, work with Customs brokers. Customs brokers are licensed logistics experts, who can help facilitate the customs clearance process and ensure you are holding the correct paperwork for your freight shipping. A robust customs broker will ensure your shipment meets all standards, laws, and regulations for the import and export of the goods, to avoid unnecessary delays and penalties.