Importing goods can significantly cut costs and expand your profit margins as it allows you to source the best price and quality from global suppliers.
However, a legal and profitable importation requires a clear understanding of the customs clearance process and compliance with each country’s regulations.
Different countries have unique customs clearance instructions governing how goods cross their borders. Failing to meet these requirements can result in delayed delivery, fines, or detention.
If your shipment involves restricted items such as pharmaceuticals, chemicals, or electronics, you may need additional permits for clearance.
So what exactly are customs clearance instructions? Are they universal, or do they differ from one country to another? And what steps must importers take to expedite the clearance process?
In this article, Blackthorne walks you through the customs clearance instructions and everything you need to know about them.
What are Customs Clearance Instructions?
Customs clearance instructions refer to the customs clearance procedure. They outline the information, permits, and steps that guide an import or export shipment from declaration till it clears through customs authorities.
The national customs authority in nearly every country publishes these instructions, linking them to specific product categories, trade agreements, and valuation rules.
Custom clearance instructions ensure that every imported item is accurately classified, taxed, and compliant with import requirements before entering the market.
Key instructions that guide imports/exports include:
- Documentation requirements
- Tariff classification rules
- Valuation methods
- Import restrictions
- Import licensing requirements
- Duty and tax assessment guidelines
- Record-keeping requirements
Accurate documentation and compliance with import/export requirements are essential in ensuring a timely and hassle-free customs clearance and release.
Who Handles the Customs Clearance Instructions?
Multiple parties are involved in handling the various aspects of the customs clearance process.
The main parties include:
Importer of Record (IOR)
The importer of record is the legally designated fiscal entity responsible for meeting all customs requirements. The role entails ensuring all import duties, taxes, documentation, technical, and licensing regulations are met.
Usually, the seller or buyer serves as the IOR, provided they are legally authorised to assume that role. When neither party qualifies or wishes to manage such responsibilities, a third-party IOR, such as Blackthorne, can do it on their behalf.
Shipping agreements play a key role in determining the scope of IOR responsibilities. And some countries have strict requirements concerning who can serve as the IOR.
We discussed the roles of an importer of record in a previous article. You can learn more about the responsibilities, including how shipping agreements influence the choice of an IOR when shipping.
Customs Broker
A customs broker (sometimes referred to as a clearing agent) is a private partnership, association, corporation, or individual authorised to handle border entry compliance.
Customs brokers must be familiar with international shipping procedures, precisely customs procedures, laws, and documentation requirements.
Their roles include:
- Submitting customs declarations
- Classification and valuation of goods
- Record keeping
Importers often struggle to decide whether to engage an IOR or a customs broker when delegating import responsibilities.
Both roles share certain obligations, such as preparing and submitting import paperwork. However, a third-party IOR generally manages a broader scope, extending to import accountability, licensing, and regulatory compliance.
To help you make an informed choice, we compiled the key differences between an IOR and a customer broker.
Additionally, here’s a quick comparison you can refer to when choosing between them:
Freight Forwarder
A freight forwarder is a logistics specialist who organises and coordinates the movement of goods across international borders.
Key responsibilities of a freight forwarder include:
- Selecting the most appropriate means of transportation for your goods
- Preparing transport documents, including the bill of lading and airway bill
- Coordinating with the IOR, customs brokers, and consignees for the timely delivery of goods
Customs Authorities
Customs authorities are a government agency responsible for enforcing trade laws, collecting import duties, and inspecting shipments. These agencies verify that imported goods comply with tariff schedules, product regulations, and national security standards.
Regulatory Bodies
Restricted goods require permits, approvals, or licences before shipping them internationally. Depending on the nature of the goods, regulatory bodies issue the permits, approvals, and certificates required to expedite market entry.
IORs and customs brokers work with regulatory bodies to obtain relevant documentation as proof of compliance when clearing goods.
Information Required for Customs Clearance
You must support imported goods with accurate and complete documentation. Customs authorities rely on these records to determine a shipment’s legality, classification, and dutiable value.
Incomplete or inaccurate information is one of the most common causes of penalties, delays, or detention of goods.
Here is the information and documentation required when clearing goods through customs:
1. Importer and Exporter Details
Customs authorities require identification details for the importer, exporter, and any authorised representatives for legal accountability.
These details include:
- Registered business names and addresses
- Tax Identification Number (TIN) or VAT number
- Importer of Record (IOR) or customs broker details
- Country of origin and destination
2. Logistics and Transport Documentation
These documents confirm how goods are packed, shipped, and handled while in transit. They serve as proof of delivery while also supporting shipment tracking and customs inspections.
Key logistics documents include:
- Packing List: Details the weight, measurements, quantity, and descriptions to help customs verify cargo during inspection
- Bill of Lading (B/L) or Air Waybill (AWB): serves as a contract between the carrier and shipper, acknowledging receipt and transfer of goods. It details parties involved in the shipment, terms of shipment, and the quantity and type of goods.
- Insurance Certificate: Provides proof of coverage against loss or damage in transit. It helps customs determine the dutiable amount based on the CIF (Cost, Insurance, and Freight) valuation.
3. Financial Documentation
Financial transparency is crucial when verifying a shipment’s value and ensuring the payment of duties and taxes.
Essential financial documents include:
- Commercial invoice: Details the buyer-seller transactions, including product descriptions, unit prices, currency, incoterms, and total value.
- Payment proof: Documents such as bank transfer records, purchase orders, or letters of credit are required to verify the transaction value you declare.
- Valuation statements: You may be required to provide a breakdown of freight, insurance, and any additional costs (such as inspection costs) for customs valuation consistency.
4. Harmonised System (HS) Code
The HS code is a standardised classification system used globally to assign imported/exported items unique numerical digits.
Before shipping any item, you must assign it the correct HS code so you can determine the import requirements and applicable regulations. Inaccurately classifying an item translates to unmet import requirements, which may delay customs clearance.
5. Import Licences and Permits
If your shipment entails restricted products, you are required to submit relevant licences and approvals as proof of licensing compliance.
Examples include:
- Type approval certificate for telecommunication equipment
- Health and safety permits for pharmaceuticals or medical equipment
- Environmental compliance certificates for chemicals or batteries
6. Certificate of Origin
The Certificate of Origin authenticates the country where goods were manufactured or assembled. It allows customs to verify free trade agreements and apply preferential tariffs.
7. Additional Proof of Compliance
Depending on the nature of your shipment, customs officials may require additional documentation as proof of compliance, including:
- Inspection certificates
- Test or conformity assessment reports
- Importer registration or tax compliance documents
Step-by-Step Guide to Clearing Customs
With all the information and documentation required for customs clearance, you may wonder what is needed when.
Here is a step-by-step guide to clearing goods through customs, alongside the actions to take at every stage.
Step 1: Preparing and Verifying Import Documentation
We have discussed a wide range of documentation required for customs clearance. Documents such as import licences and permits take time to process, requiring prior preparation.
So, before shipping, use the HS code to classify your goods. With the HS code, you can determine:
- If your shipment requires an import permit or approval
- Applicable duty rates and taxes
- Any restrictions or restrictions under trade agreements
Next, identify the relevant regulatory bodies to apply for applicable licences, certifications, and approvals (if any). Additionally, liaise with your logistics provider to prepare the shipping documents, including commercial invoices and packing lists.
Once ready, cross-check the documentation to ensure completeness, consistency, and accuracy.
For instance, the commercial invoice should describe goods precisely (including brand, model, composition, quantity, unit, and total value) and match the packing list.
Step 2: Submitting Customs Declarations
Once the vessel departs, file a customs declaration to alert customs of your incoming shipment.
The declaration details what you are importing, its value, origin, and classification. You must attach supporting documentation for verification. This helps customs evaluate if your shipment complies with national import regulations.
At this stage, it’s advisable to engage an IOR or a licensed customs broker, especially if you are unfamiliar with the destination country’s customs clearance procedures. They will handle the customs declaration on your behalf.
Step 3: Assessing Duties and Taxes
Once your customs declaration is submitted, customs officials assess the duties, taxes, and other import charges payable before release.
The total payable amount is calculated based on three main factors: the HS classification, customs value, and the country of origin. You can pay the applicable duties and taxes via the customs payment platform.
Step 4: Shipment Inspection (If Required)
After payment, customs conducts a risk assessment of your declarations.
Depending on your compliance history, declaration accuracy, and product category, customs may decide to inspect your shipment before release.
The inspection can be in the form of a documentation review, physical examination of goods, or laboratory testing for conformity verification.
If they take samples for a laboratory test, ensure to record what they took and when for future reference.
Step 5: Releasing Goods
When duties are paid and inspection (if any) cleared, customs issues a Release Order or Delivery Order to the freight forwarder. That means your goods are cleared for entry.
Here’s what you need to do once you have the release order:
- Submit the release order to the port or terminal operator
- Pay any outstanding storage, demurrage, or handling fees
- Arrange for last-mile delivery
Ace Customs Clearance Instructions with Blackthorne
The benefits of international trade are innumerable. But the risks associated with it can easily nullify the benefits, especially for high-risk shipments like IT equipment.
Engaging multiple service providers for every shipment can be unnecessarily expensive. It’s even more expensive when an issue concerning the shipment arises, and you are unsure who is accountable.
Serving as a technology IOR for over 20 years, we understand how complex the customs clearance instructions for restricted equipment can get.
To strengthen compliance and ensure financial accountability and transparency, Blackthorne offers a one-stop shop for your cross-border transactions.
We blend expertise and experience with the following services to lower the risk of compliance and streamline the customs clearance procedure:
- A door-to-door delivery to ensure safe handling and avoid export control diversion
- A reliable freight forwarding team safely handling even high-risk shipments
- Export licensing professionals ensuring export control compliance
- Dedicated legal team, always identifying non-compliance loopholes and addressing them in advance
- A local presence in over 200 import destinations to strengthen customs relationships and facilitate in-country inspections
Additionally, if you are shipping to a data centre abroad, we offer a data centre delivery, with an IT support team ready to offer any assistance that you may need.
So, what is your dream IT equipment import destination? Why not call or email us at sales@blackthorneit.com so we can start planning your shipment?
