Business owners hoping to expand their operations may look outside their country’s borders to find new customers. To successfully send products overseas, however, it’s vital for a company to know about shipping laws and customs first or it could be hit with unexpected expenses.
Most companies that sell internationally use a customs broker that is experienced and familiar with the latest International Trade regulations. It’s still important however to have a general understanding of how the customs clearance process works. Here’s a quick Q&A to get you started!
What is customs clearance?
Customs clearance is how goods are legally prepared to be internationally imported or exported. All goods must meet certain criteria to be cleared in the point of origin. Usually, this means having the correct paperwork ascertaining that the goods are safe to send/arrive and that all fees connected with the shipment have been paid. It is similar to entering or leaving a country, but the paperwork is far less friendly, and the fees can be confusing. A customs broker is familiar with the entire bureaucracy and can expedite shipments.
What goods require customs clearance?
Any package imported into the U.S. will require customs clearance. You will receive a form that will require a shipment description with information such as the content, quantity, price, weight, and country of origin. Items that are less than $2,000 do not need customs clearance. An agent will prepare the paperwork for export and release your package. A package under $200 generally does not need this paperwork.
What documents are required?
The two main forms used for customs clearance are the CF-28 and the CF-29, depending on the good. The CF-28 is a notice that there may be some irregularity with your shipment that needs to be addressed. The problem may be solved immediately, or you may be given a CF-29 notice, which asks customs to decide on some irregularity. If you are importing, you will also need an invoice from your supplier and an official customs form, which goes by various names depending on the country.
How long does customs clearance take?
Customs clearance usually only takes a day to clear, but in some cases, where the goods need further analysis, it can take several days or even several weeks.
What are the customs clearance fees?
Goods will be given a 10-digit Harmonized Item Description Code known as an HS code. Each HS code classifies your item and determines the rate of duty on your product. The country of origin also determines how much you will be taxed. Generally, it depends on whether your country has a trade agreement with the corresponding country or is considered an adversary. In some countries, you will be reimbursed for these taxes; in others, you won’t.
What does customs clearance completed mean?
Once your paperwork is approved and any outstanding duties are paid (usually this needs to be done by cash or check), your goods will be released for import or export. A customs official will inform the warehouse/port holding your goods that they have been released by customs. You will then be free to pick up or send your goods, assuming you’ve paid your freight forwarder any outstanding balances and presented an Original Bill of Lading.
Who handles the customs clearance process?
Considering the complexity of the customs clearance process, it is best to hire a qualified customs broker. They can assist with HS code classification and determine the country of origin if the shipment has gone through several ports. Brokers are also familiar with the various trade agreements and can save you money by navigating them. By using the same brokerage company, they will soon get to know your business and be in a position to offer priceless advice on the importing and exporting of goods. If you need a qualified customs broker to guide you through the customs clearance process step-by-step, click here to Contact T.H. Weiss, Inc. for your custom clearance services.