The customs clearance procedure for some imported goods can be as simple as submitting a receipt at the customs office, then transporting the goods.

That simplicity, however, often applies to non-commercial goods. These are personal or low-value items that attract minimal documentation, and you can even clear them through customs yourself.

The case of commercial goods is different. Importing for business, resale, or production involves formal procedures that start long before you can make the shipping decision.

Typically, you will need a buyer-seller agreement and various pre-shipment activities to establish the transaction’s feasibility. And only after confirming the import’s commercial and regulatory viability can you proceed with the shipment.

In this article, Blackthorne discusses the customs clearance procedures for commercial and non-commercial goods, with a more in-depth examination of the commercial procedure.

Customs Clearance Procedures for Commercial Vs Non-commercial Goods

Essentially, all imported goods are subject to the same customs clearance guidelines that we previously shared.

The key difference between the commercial and non-commercial customs procedures lies in the intended use, quantity, and value declared.

Let’s handle the two independently:

Commercial Goods

Commercial goods are intended for business use, resale, or industrial applications. That means they significantly influence trade, revenue collection, and safety standards.

As such, customs authorities impose stricter procedures to safeguard national security and quality standards, including:

• Export licensing: Depending on the nature of your shipment, you may be required to obtain import permits, licences, or approvals from relevant authorities
• Shipment valuation and tariff classification: You must submit detailed documentation, including commercial invoices, trade contracts, or freight costs, to validate the value of the shipment and applicable duties and taxes
• Tax obligations: Depending on the type of goods and the import destination, you must pay import duties, VAT, excise taxes, and sometimes customs processing fees.
• Record-keeping: You must maintain import transaction records for the minimum required duration (at least 5 years) to facilitate post-clearance compliance audits.
• In-country inspection: High-risk shipments may be subject to random inspections in the destination country.

Non-commercial (Personal) Goods

Non-commercial or personal goods often fall within these categories:

• Temporary imports/exports: goods brought into a country for a limited time and purpose (repair, exhibition, or testing), allowing for suspension of duties and taxes.
• Gifts: Personal-use items sent from a private individual to another.
• Household (personal) items: Items belonging to returning residents or individuals moving to a new country, such as clothes, furniture, or appliances.
• Humanitarian aid (charitable goods): items brought into a country to alleviate suffering or save lives during a crisis.
• Samples: Commercial specimens of goods brought into a country for quality control purposes, demonstration, or trade promotion. Often, they are rendered unfit for resale or of negligible value, attracting no duties or taxes.
• Personal luggage: Items an individual brings into a country for personal use when travelling.

 

Here is a comparative summary you can refer to when importing goods:

Step-by-Step Customs Clearance Procedure for Imported Commercial Goods

Since commercial goods demand a strict adherence to trade laws and regulations, let’s dive deeper into the steps to follow for a timely customs clearance at the border.

Here are the seven key steps to follow:

1. Pre-shipment Due Diligence

Before initiating any import transaction, you must determine the specific import requirements applicable to your shipment. This ensures compliance with trade laws and timely customs clearance.

Key activities to consider when conducting due diligence include:

• Identify the accurate HS code for every item. This helps determine applicable licensing requirements, product controls, tariffs, and duties and taxes.
• Confirm product-specific rules, regulations, and standards in the destination country.
• Determine which licensing requirements (if any) you must fulfill and the timelines for obtaining them.
• Check if your goods are eligible for preferential tariffs, so you can prepare the certificates of origin
• Verify who is responsible for the various supply chain responsibilities and the service providers to engage (if need be)
• Arrange for product testing (if required) and obtain relevant test reports as proof of compliance
• Calculate estimated duties, fees, and VAT to evaluate the transaction’s financial viability

2. Document Preparation and Verification

Since you already have a list of the required documentation, it’s time to ensure compliance, completeness, and accuracy before submitting to customs.

Here are the main considerations to make when preparing the import documentation:

Timeliness

Check the timeframe for processing specific licences, approvals, or permits. Some documentation may take days, others may take weeks.

Advance submission of the import documentation enables customs to pre-validate your shipment, expediting the clearance process.

Completeness

Have a checklist of the import documentation to ensure you don’t miss out on any requirements.

You can use the customs clearance documentation checklist below for reference.

Record keeping

Maintain an organised and secure archive of all import documentation. It’s not only a legal requirement but also essential for future compliance audits, internal reviews, and resolving any issues or queries regarding your shipment.

Regulatory updates

Changes in standards, safety requirements, and trade requirements can alter the documentation requirements. Ensure you review current regulations at the time of import, especially for regulated products, to ensure alignment.

Documentation consistency

All information across the invoice, packing list, transport documents, and certificates must be consistent and matched. Review product descriptions, values, weights, and quantities to ensure accuracy and correct any discrepancies.

3. Customs Declaration Submission

A customs declaration is an official document that lists the goods being imported, along with their descriptions.

The document provides the customs authorities with all the necessary information to classify the goods, assess duties and taxes, and approve market entry.

The core elements in a customs declaration include:

• Information about the goods: Item descriptions, HS codes, weight, quantities, and value.
• Details of the parties involved: information about the importer, exporter, consignee, and customs broker (if applicable).
• Shipping and transactional details: Bill of lading/airway bill number, freight information, incoterms, and customs procedure codes.

You can refer to examples of the various types of customs declarations when importing into Great Britain.

4. Duties, Taxes, and Fees Assessment

Once customs authorities process the customs declaration, they assess the applicable duties and taxes in the following sub-steps:

• Document verification: Customs authorities ensure compliance with documentation requirements, including consistency, completeness, and accuracy of the documentation.
• Customs valuation: They determine the customs value of the goods based on the transaction value and other costs (transport and insurance costs, cost of containers, royalties, etc.)
• Tariff classification: Customs verifies the HS code you assigned for your goods to ensure it’s accurate and complies with applicable import rules.
• Duties and taxes calculation: Based on the verified HS classification and the value of goods, customs calculates the applicable duties, taxes, and fees.

5. Customs Inspection and Verification

Customs uses a risk-based evaluation to determine whether a shipment is subject to inspection. Inconsistencies in documentation and the presence of high-risk or regulated goods increase the likelihood of an in-country inspection.

During this stage, customs officials may request additional supporting documentation for your shipment. And if necessary, they may physically inspect the goods.

Suspected imports may also trigger the customs officials to collect samples for laboratory testing. This is done to confirm product safety or compliance with specific standards or regulations.

6. Payment of Duties and Applicable Fees

Customs provides a document outlining shipment charges, deductions, and exemptions, as well as the total amount due. You can pay the amount owing via the customs online payment portal, authorised banks, or designated government channels.

In the event of unexpected discrepancies, please raise the concern with customs officials immediately to avoid overpayment or further delays.

7. Cargo Release

Customs issues a release order or updates the declaration status to indicate that the goods can be released from the port, airport, or border facility.

Once the terminal or port authorities approve the release, you (the importer), freight forwarder, or IOR can then arrange for last-mile delivery.

Timely delivery is essential as continued stay of the shipment at the customs office may result in storage fees, demurrage, or other port-related charges.

Customs Clearance Documentation Checklist for Imported Goods

To avoid noncompliance and ensure a timely customs clearance, ensure you have the following documentation ready before your shipment arrives:

Customs Declaration Checklist

This checklist includes all the import documentation you should prepare before shipping:

• Final commercial invoice (with accurate HS classification)
• Packing list (with correct weight, quantity, and dimensions)
• Bill of lading or Air Waybill number
• Certificate of origin (if claiming preferential duties)
• licences /type approvals for restricted goods
• Insurance certificate
• Importer registration number (EORI, VAT, TIN)
• IOR/Broker contact and authorisation

Compliance Inspection Checklist

The compliance inspection checklist includes documentation that can serve as proof of compliance for your shipment, in case your goods are subject to inspection.

These include:

• Technical dossier or test reports
• End-user declaration
• Product datasheets with model /serial numbers
• Lab test certificates
• Certificates of conformity

If you are importing restricted goods, you can find detailed requirements in our previous article, the Customs Clearance Requirements for Restricted Goods, to update your checklist.

3 Key Challenges in the Customs Clearance Process [+ Best Practices]

Here are the three main challenges that often lead to noncompliance, unnecessary costs, and unsuccessful importation:

1. Product Classification and Valuation Complexities

The harmonised classification codes can be challenging to interpret as some products belong to multiple categories, each with a unique code.

For instance, different parts of an equipment may require separate classification codes if their material or functionalities differ from the rest of the equipment.

Inaccurate assignment of HS codes can result in incorrect import requirements, rendering your import transaction noncompliant.

Best Practice

You can use official national tariff databases or World Customs Organization resources to determine the correct HS code for your items. Also, working with an IOR experienced in your industry can help determine the accurate HS code for your shipment.

2. Changing Regulatory Requirements

Being unaware of the latest regulatory changes is an unacceptable excuse for noncompliance. And customs clearance instructions keep changing due to shifting government policies, evolving security protocols, and environmental concerns.

A change in import requirements may trigger sudden requests for new permits, inspection, or documentation updates. This, in turn, can delay customs clearance and increase importation costs.

Best Practice

You must monitor and adhere to changes in regulatory requirements to ensure your import transactions are compliant.

Additionally, you can partner with international trade experts like Blackthorne, who have the tools to monitor regulatory updates, saving you the hassle of doing so.

3. Hidden Costs

Some of the costs you may be unable to factor in when performing feasibility analysis for your importation stem from:

• Incomplete, inaccurate, or inconsistent documentation
• Misclassification of goods leading to undervaluation or overvaluation
• Random physical inspections at the expense of importer
• Customs clearance delays leading to the accumulation of storage or demurrage charges
• Non-transparent brokerage fees
• Facilitation for special handling of equipment
• Penalties for noncompliance

Such hidden costs can thin your profit margins and undermine the financial viability of your import transaction.

Best Practice

The most effective way to track hidden costs in the global supply chain is to leverage technology and automation for supply chain visibility. Tools like Blackthorne’s IOR Calculator provide a sneak peek into expected costs before you ship your products.

You can also learn the various ways IoT works in global logistics to increase transparency and accountability, lowering compliance risks.

FAQs

1. Can I clear goods without a customs broker?

Yes! You can clear goods without a customs broker if you have the legal expertise and experience required to fulfill all applicable import requirements.

2. What is a carnet for customs clearance?

A carnet (ATA carnet) is an internationally recognised customs document that permits the temporary importation of duty-free goods.

3. Can customs taxes be refunded?

Yes! Customs taxes can be refunded under specific circumstances.

These circumstances include unsuccessful importation of goods, damage to goods before clearance, returned goods, and exemptions that were not applied at the time of import, among others.

Ace the Customs Clearance Procedure with Blackthorne

Blackthorne understands how challenging it can be to import high-risk products such as IT and telecommunications equipment. Our tailored global logistics services ensure safety, compliance, and operational efficiency, from documentation to final delivery.

We can legally represent you in over 200 import destinations, handling export licensing, freight forwarding, and last-mile delivery.

So, if you are looking to import IT equipment or machinery internationally, let us know your destination and we’ll handle the importation on your behalf.