Clearing: Here's How It Works

What is customs clearance? Customs clearance is the process of declaring goods imported from another country to customs and the associated import duties.

Kenny Lipman

April 12, 2023

What is customs clearance?

Customs clearance is the process of declaring goods imported from another country to customs and paying the associated duties and taxes. This process is important to ensure that the goods can enter the country legally and to comply with the destination country's customs legislation. If you are unable to provide the correct documents to customs, or do not do this on time, customs clearance can be delayed by weeks. It is therefore important that you know what customs clearance is and how it works, so that your shipment can be imported smoothly by your Forwarder.

Types of customs fees

When clearing goods, different types of customs fees may apply, depending on the type of goods, the origin of the goods (e.g. China or Taiwan) and the destination of the goods (e.g. the Netherlands). Some of the common types of import duties include:

Import duties: These are taxes levied on the value of the goods and may vary depending on the type of goods and the country of destination.
VAT: This is the value added tax levied on the value of the goods, including customs duties.
Excise duties: These are taxes levied on certain products, such as alcohol and tobacco.
Anti-dumping duties: These are import duties imposed by customs to prevent goods from being marketed at too low a price, causing unfair competition. They are imposed when goods are imported at a price lower than the normal value in the exporting country, which can result in damage to the importing country's domestic industry.

The process

The customs clearance process consists of several steps that must be followed to successfully clear the goods at customs. Here are the key steps:

1. Declaration

The first step in clearing goods is to submit a declaration to customs. This declaration must include the details of the importer, exporter, goods and associated duties and taxes. It is important to ensure that all information is accurate and complies with the destination country's customs legislation.

2. Control

After filing the declaration, customs can check the goods to verify that the specified information is correct. This may include physically inspecting the goods, checking the associated documents and taking any samples. It is important to ensure that the goods comply with applicable import rules and regulations to avoid delays or fines.

3. Import duties and taxes

After the inspection, the import duties and taxes are calculated based on the specified data and the applicable rates. The importer is responsible for paying these fees to customs before the goods can be released.

4. Release of goods

After payment of import duties and taxes, the goods can be released by customs and handed over to the importer. At this point, the customs clearance process has been completed and the goods can be imported into the destination country.

Most common mistakes

The customs clearance process can be complex and there are several errors that can occur. Some of the most common errors include:

Incorrect or incomplete declaration: Failure to fill in the declaration correctly can lead to delays and fines. An example could be entering an incorrect HS code
Improper valuation: Misjudging the value of the goods may lead to an incorrect calculation of import duties and taxes. It is often thought that you only pay VAT and import duties on the purchase value. However, you also pay for transport costs up to the time of customs clearance, for example.
Missing or incorrect documents: Failure to provide the correct documents may result in delays and rejection of the declaration. For example, when there is no billing address on the purchase invoice, or an incorrect EORI or VAT number.
Failure to comply with import rules and regulations: Failure to comply with applicable import rules and regulations may result in delays and fines. For example, when a company imports a product that requires import controls (such as protein powder or other animal products) but is unable to comply

How long does it take to clear?

The duration of the customs clearance process may vary depending on various factors, such as the complexity of the goods (chemical goods vs. mouse pads), the customs procedures of the country concerned (how strict is a country's customs?) and the completeness and accuracy of the declaration. In some cases, customs clearance can take a few days to a few weeks. It is important to take into account the possible delays in planning the import of goods. With Boloo Forwarding, customs clearance takes an average of 1 hour.

How do you prevent delays in your customs clearances?

To avoid delays in the customs clearance of goods, here are some tips:

Ensure a complete and correct declaration: Check all data carefully to prevent errors. For example, see if the products on your invoice match in numbers and purchase value compared to the shipment you create in your Forwarding dashboard.
Provide the correct documents: Make sure that all necessary documents, such as invoices, transport documents and certificates, are complete and correct. Read here what should be on a purchase invoice.
Pay duties and taxes in a timely manner: Ensure timely payment of duties and taxes to avoid delays.
Comply with import rules and regulations: Make sure the goods comply with the applicable country's import rules and regulations to prevent rejections. So check beforehand whether the product you want to import (such as protein powder) must meet additional import controls.
Work with a professional customs broker: Hiring an experienced customs agent can help smooth the customs clearance process and minimize delays.
Stay up to date with changes in customs legislation: Customs legislation can change and it's important to stay up to date with the latest updates to ensure compliance. It is possible that the HS code that you always used for your product may have suddenly changed. So it's good to check this regularly.
Communicate well with customs and other parties involved: Keep open lines of communication with customs, carriers, suppliers and other parties involved to resolve any questions or problems in a timely manner.
Schedule sufficient time for the customs clearance process: Take into account the time required for the customs clearance process when planning the delivery of the goods so that delays do not have a negative impact on your business activities. Customs clearance is usually arranged within a few hours. However, customs may want to physically check the shipment. As a result, it can quickly increase to a week.

Conclusion

The customs clearance process is an important part of international trade and can be complex. It is essential to be aware of the customs procedures and requirements of the respective country where you are importing and to ensure that the declaration is complete and accurate to avoid delays and fines. By working with an experienced customs broker, providing the right documents, paying duties and taxes on time, and complying with import rules and regulations, you can make the customs clearance process smoother and receive your products as quickly as possible.Do you have any questions about the customs clearance process or would you like more information about customs matters? Feel free to contact us via the chat at the bottom right, we'll be happy to help you out!