Customs clearance is a mandatory process that all goods must go through when entering and leaving a country. In the UK’s case, custom clearance allows HM Customs & Excise to ensure the submission of export and import documents has been completed correctly and that the payment of any duties, VAT and other costs incurred by customs agents, such as storage and testing, has been made. Additionally, with the UK now no longer a member of the European Union, it operates inside its own customs territory independent of the EU’s collective free-trade zone. This means that added customs checks and additional inspections are now required for all imports and exports to and from the UK.
Below, we explain how customs clearance works in importing and exporting, before looking into how shipping companies can help clients efficiently navigate the process.
Custom clearance procedure for export
Customs clearance for exports is essentially the process of gaining permission from a country’s government to transport goods out of a sovereign territory. When looking at what the custom clearance procedure for exports looks like, a number of factors need to be taken into account. For example, the specific regulations in place in your country of export, the type of goods you are attempting to ship, trade agreements in place between the countries of export and import, and the sophistication of technology used by an exporting country’s customs agency. However, as a rule, the custom clearance procedure for export typically follows these steps:
- Registering your business/organisation with the customs authority’s system and obtaining an export business number. This will only need to be performed once, rather than for every shipment.
- Applying for and obtaining a certificate of origin for the items you want to export. This essential item can be provided by a ‘competent authority’ of the exporting country.
- Ensuring the goods you are attempting to ship are not prohibited or banned in either the country of export or the country of import. This can be checked on the official websites of both parties.
- Determining which export commodity codes you need in order to legally and efficiently export your goods. These unique six, eight or 10 digit numbers are assigned to every different type of product type and help customs agencies quickly identify products and decide the customs duties applicable.
- Applying for and obtaining an export licence and/or permit for your goods, if needed. This will typically only need to be performed once per specialist item, rather than every time you ship specialist goods.
- Completing an export declaration form for each shipment. This can be done either manually or digitally, and must be carried out before all shipments you export.
What is import customs clearance?
Import customs clearance is the process of gaining permission from a country’s government to bring materials and/or produce into their sovereign territory. For the most part, the import customs process is very similar to export customs clearance, however with the addition of a number of steps. These extra stages generally relate to tax and duty assessments and final payment options involved in international shipping, and include:
- Completing and filing an import declaration form. This can be done either digitally or manually. At this stage, it is likely you will also need to provide a packing list for the goods in your consignment, any copies of relevant import licences, and certificates of origin. As we discuss below, this can be done by your freight forwarder or broker, if you chose to use one.
- Waiting until customs officials based in the country of import approve your declaration.
- Paying the duties and taxes you owe based on the customs import assessment. Again, if you are partnered with a freight forwarding company or broker, they will typically do this for you and invoice you at a later date.
- Waiting for your goods to be released, signalling the end of the customs clearance process.
Does the shipping company arrange customs clearance?
If you choose to partner with a specialist customs broker or a freight forwarding shipping company to help you manage your logistical needs, this partner will typically make all arrangements, in theory at least, taking the stress out of overseas shipping. From ensuring relevant VAT declarations and customs clearance documentation are correctly completed and filed to monitoring and ensuring the entire export/import customs clearance happens as efficiently as possible and your goods remain safe, a shipping company can take care of everything.
However, in order for a shipping partner or broker to act as an intermediary between you and the various stages involved in long-distance shipping, they will require you to provide the customs agents working for the partner with a number of vital documents. As discussed above, this includes commercial invoices, packing lists, commodity codes and licences, and certificate of origins. For this reason, despite the expert service many shipping companies provide when it comes to customs clearance, it can still be a good idea to employ someone familiar with these administration processes.