When the goods move from one country to another, there is one step your international shipment cannot avoid – going through customs clearance. Customs activities are generally performed by dedicated experts, but good preparation can help you avoid unnecessary delays and frustration: the Freight Forwarding Experts share a few best practices you can adopt today to make the process flow smoothly.

Customs clearance and the payment of duties (also referred to as “tariffs”) can be complex to manage. But whether you are the shipper or the consignee, it is likely that you will be responsible for the import or the export customs brokerage of your shipment. Depending on the selected Incoterms®, you may even have to take care of both:TG | Customs | Incoterms clarify who is supposed to take care of clearance at destination as early as possible with your overseas business partner.

Before Anything Else: Identifying Your Goods

The smooth handling of your customs activities starts with a precise description of the goods you are shipping. This is achieved through an internationally standardized commodity code, the Harmonized System (HS) Code, which will ensure that the correct duties and taxes are applied by Customs. Note that HS Codes differ from country to country so it is important to make sure you classify products correctly for both the export and import country.

Exporting

With the right documentation, export clearance can go smoothly. The shipper shares the necessary documentation (see drop-downs below) with their broker, who in turn submits a compliant clearance form to the customs office. The customs office can decide to immediately release the cargo, and shares the shipment’s authorization to export (such as the MRN Number in Europe): you are good to go!

The inspection can take place physically or be limited to your shipment’s documentation, whereby customs authorities will apply different levels of control procedures to ascertain that the exportation is compliant with national and international laws and regulations. They may require to inspect the container, its products or have the usage of the products demonstrated for them before allowing exportation.

Here is our pro tip: consult with your customs broker prior to exporting by providing documentation samples and information on your goods’ nature and possible usages. This will enable your customs experts to let you avoid unnecessary delays or penalties.

Importing

If you use the services of a customs broker, the import process and controls will be an experience similar to that of the export clearance. It is important to share your delivery plan with your broker, along with all the necessary documentation – they will in turn create a compliant customs declaration. The key documents remain the same as seen above, with a particular attention needed for import licenses and proof of origin. 

Based on the documentation shared by your broker, the Customs office either decides to release the goods or to inspect the transaction. In the latter case, your customs broker will coordinate with you the further actions needed.

Paying Customs Duties

Unless exempt, all imported commercial goods are subject to customs duties and taxes based on their HS Code tariff classification. Generally speaking, it is the importer of record who will pay the import duty and tax. 

Some goods are also assessed in relation to other taxes. This includes excise duties and anti-dumping duties, which can be applied to goods priced significantly below their value in their import market.