Are you thinking about taking your small business global? Shipping goods internationally can feel daunting, especially when ensuring that your international shipments clear customs smoothly, which is essential for every global shipper.
Problems with customs clearance can lead to delays, rejections, or fines. Providing incorrect details on customs documents could even violate laws in the import or export countries.
Ready to send your products overseas? Here’s a guide to help you grasp the customs clearance processes for both imports and exports. Let’s dive into the customs clearance completed meaning and discover these helpful tips and resources to simplify your life.
What Is Customs Clearance?
Customs clearance is the procedure where an import or export shipment undergoes review and approval by the Customs Office.
Generally, customs clearance involves four main steps:
- Submitting customs paperwork for examination by a Customs Officer.
- Assessing the submitted customs paperwork.
- Calculating any applicable duties and taxes.
- Payment of duties and taxes.
Customs Clearance Process
Here’s what happens in four steps when a shipment arrives at customs.
1. A customs officer reviews your customs paperwork.
These documents need to be precise and comprehensive, particularly the shipping label and commercial invoice. The commercial invoice holds utmost importance as it includes the contact details of the shipper and receiver, along with the export date and airway bill number.
2. Import duties and taxes are calculated based on the customs paperwork.
Import fees differ based on the types of goods, their worth, and the particular import regulations in the destination country. Import duties are applied to goods surpassing the de minimus value, which is the minimum taxable threshold for imported goods. For instance, if the de minimus value is $200, goods valued at $200 or less won’t be subject to import duties.
3. Customs asks for payment of taxes and duties if required.
If your shipment surpasses the tax threshold, the customs officer verifies whether duty and taxes have been settled. Additionally, certain restricted items may incur charges regardless of their value.
Here’s where the choice between shipping with Deliver Duty Unpaid (DDU) and Deliver Duty Paid (DDP) matters.
Delivery Duty Paid (DDP) means that import duties and taxes have already been covered. Most express courier services like IOR Africa have customs brokers who handle this payment on your behalf at customs.
With DDP, the shipping cost you pay includes any import fees, as indicated on the shipping label. Essentially, using DDP ensures a smooth customs clearance process. On the other hand, Delivery Duty Unpaid (DDU) means import duties and taxes are not paid upfront. In this scenario, the customs officer ships an independent customs broker to collect the required amount.
Customs brokers act as intermediaries and charge fees for assisting in the customs clearance process. These fees can vary and may include brokerage, storage, and late payment charges. With unpaid customs fees, the broker contacts the recipient for payment. Naturally, this could lead to customer dissatisfaction.
4. Your shipment clears customs after all duties are paid.
Once cleared customs is finished, your selected courier service transports the shipment from customs to the final destination. Shipments seldom encounter delays at customs. However, if they do, it’s typically due to incorrect paperwork.
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Customs Clearance Completed Meaning
There’s a clear distinction between customs cleared and customs clearance. When your international shipment has customs clearance, it means it has been greenlit by the customs authority. Customs cleared, on the other hand, is the specific seal of approval bestowed by the customs department.
Now that your package has been cleared, it can move forward to the next phase of its journey or delivery to the final destination.
How Long Does Customs Clearance Take To Be Completed?
Usually, customs clearance is completed in less than 24 hours. But if your paperwork is incomplete, it might take several days before your shipment is cleared by customs.
Here are other factors that can affect delays
- The rules are set by both the origin and destination nations.
- The nature of the shipment.
- Whether the incoming goods are subject to regulation.
- The effectiveness of your customs agent.
Read Our Related Article:
What is The Customs Declaration?
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Frequently Asked Questions About Customs Clearance
What documents are required for customs clearance?
The primary documents required for customs clearance are the commercial invoice and the air waybill.
Additional documents may be necessary depending on the origin, destination, and type of commodity being shipped.
These may include:
- Certificate of origin
- Export/Import license/permit
Is it possible for me to arrange customs clearance on my own?
Yes, this means you’ll need to prepay all import duties and taxes, either when you select your cross-border shipping service or separately. In simple terms, choose Delivery Duty Paid shipping options.
Who is responsible for handling the paperwork and payments required for customs clearance?
Typically, it’s the responsibility of the Importer of Record to manage the paperwork and payments throughout the import process. However, this can vary depending on the incoterms used.
An Importer Of Record (IOR) is required to declare the paperwork, settle the fees, and accept the shipment. But what exactly is an Importer Of Record (IOR)? An IOR acts as the temporary legal owner of the goods during this process and can be either the manufacturer/shipper of the goods or a legal individual or entity authorized to represent them.
What steps can I take to prevent customs clearance delays?
1. Prepare your paperwork in advance.
2. Provide a precise description of your goods.
3. Follow the regulations specific to the destination country.
4. indicate the value of your goods.
5. Provide a reason for shipping your items.
6. Ensure that all information remains consistent.
What comes next after the shipment has been cleared?
Once your shipment has been cleared by customs, you can move it from the bonded warehouse to its final destination.