7 tips to avoid customs clearance delays
By Camille Felappi
There is nothing worse than waiting for a package that never reaches you. If you do not want that to happen as a buyer, you certainly don’t want it as a seller either. Customs clearance delays are frustrating for both the seller and the buyer, but you still have the power to avoid them.
When you ship internationally, there is a key to avoiding clearance delay: compliance. If you comply with legal regulations and customs authorities’ requirements, clearing goods will be a mere formality. However, in practice, understanding what paperwork you need and how to fill them out can give you a hard time. That is why we compiled 7 tips you should bear in mind when you dispatch a parcel, to avoid customs clearance delays.
- Take care of all the necessary paperwork for customs clearance
- Provide accurate goods description on your commercial invoice
- Declare the correct value of your goods to customs authorities
- State the reasons for your shipment in your customs declaration
- Check if additional documents are needed in the customs clearance process
- Remember that all countries have different rules and practices
- Use an automated solution like Eurora to avoid customs clearance delays
Are you searching for a way to automate your customs clearance? Check out our automated customs clearance service!
1. Take care of all the necessary paperwork for customs clearance
It might sound obvious, but too many cross-border businesses forget to prepare all the mandatory documents before shipping their goods abroad. This usually happens because sellers think that customs clearance paperwork is the same globally. They forget that there can be country-specific regulations. A wise piece of advice we can give you is to always double-check with the customs office of the country you are shipping goods to.
The most important document you need to prepare each time you conclude an international sale is a commercial invoice. It is a document created for international shipments and it must contain critical information for customs authorities. The commercial invoice is needed to assess if the goods can move in or out of a country. It also helps customs know if additional controls need to be done. Furthermore, it is used to determine duties and taxes. Most of the time, you need to prepare the commercial invoice in English and it must include the following elements:
- Buyer and seller information
- Product and shipping details
- HS code of each good
- Country of origin
- Terms of sales, also known as Incoterms.
The second document customs authorities require is a transportation accompanying document. The type of transportation accompanying document you need depends on the mode of transport you are using to ship your goods:
- If you ship via ocean freight, you will need a Bill of Lading
- For air freight, you will need an Air Waybill
- Via road, you will need a CMR.
Preparing these two documents in advance will reduce the risk of customs clearance delays, but this is not enough to avoid them.
2.Provide accurate goods description on your commercial invoice
Providing inaccurate or incomplete goods descriptions on the commercial invoice is one of the main reasons for clearance delays. This is a critical issue, especially for eCommerce sellers. Most of them do not have enough information on how to write an appropriate goods description. This results in customs brokers being unable to classify the goods, and shipments being delayed or held by customs authorities. Customs authorities indeed require the right classification of goods based on a clear description. They need it to assess taxes and duties. The description is also necessary to check if your goods can enter the destination country.
So, how to provide the best description? There is no secret formula: you need to be as accurate as possible. You need to make sure you are using plain language when you describe the goods. To do so, you can try to put yourself in the shoes of someone else. See what you understand from your description without any knowledge and background information. It can also be helpful to ask yourself these 3 questions:
- What are the goods?
- In what material are they made?
- What is their purpose?
For example, if you are selling t-shirts, your description shouldn’t be simply “shirts”. It should be instead “10 men’s shirts, size XL, 100% cotton”. For branded items, you should also include the brand and the model number.
3.Declare the correct value of your goods to customs authorities
The declared value is another key element for customs clearance. Customs use it to clear your goods and determine the duties and taxes. The principles of customs valuation are set in the World Trade Organization’s Customs Valuation Agreement. Besides, every country has its own rules on how to implement those principles. The declared value corresponds to the transaction value of imported goods. It is usually the amount paid by the receiver for the imported items. You need to declare what the buyer paid and provide customs authorities with proof of transaction if requested.
Declared value is even more important when you know that customs clearance delay won’t be the only consequence if you state the wrong value. If you under-evaluate your goods, you will pay interest, could get a fine, or customs authorities could seize your goods. To make sure your clients receive their packages on time, always keep in mind what information customs need to calculate duties. The 3 most important elements they need are the classification, the origin, and the valuation of goods.
4.State the reasons for your shipment in your customs declaration
The reason for shipment is another important element to indicate on your commercial invoice. When you select the option that reflects best your shipment, you reduce the risk of customs delay, but not only. It also helps customs authorities assess if your goods are eligible for special customs procedures or lower customs charges. Besides, you can benefit from preferential duty rates in certain cases. If you do not include the reason for shipping, you will make your customers wait. Besides, you could pay higher customs charges than necessary. It is therefore an element not to overlook.
So, what can be the different reasons for shipping goods? There are in practice many different types of exports. The export can be permanent, which means goods are not intended to be imported back to their country of origin. Goods can be exported temporarily too, for example, if they are imported for a fair or an exhibition. You can also export goods for repair or testing, and in this case, goods can be re-imported duty-free.
In addition, many special situations allow the exemption from import duty. For example, if an individual sends a gift to another private individual, the goods can be relieved from import duty. It can also be the case if you import school outfits, educational materials, or goods imported for a marriage. You can find all the customs duty cases set by the EU in this Council Regulation.
5.Check if additional documents are needed in the customs clearance process
As we saw, some documents like the commercial invoice and the transportation accompanying document are required for every international sale. Some shipments however require special documents, especially when you ship restricted or strictly regulated items.
If you ship goods that originate from endangered species, you will need a CITES license. If you ship such goods in Germany for example, you need to contact the Federal Agency for Nature Conservation and apply for the appropriate CITES documents. You must obtain this document before the customs clearance. This is why it is always important to verify with enough anticipation. If you export rough diamonds, you will need a Kimberley certificate that is meant to eliminate the diamond trade conflicts. You must obtain a Kimberley Process Certificate as proof the diamonds are from legitimate sources.
Anytime you export goods, you must verify who you do business with and if your goods are part of any restricted or prohibited list. The most reliable way to comply and avoid customs clearance delays is to conduct automated restricted party and restricted items screenings.
6.Remember that all countries have different rules and practices
International trade is regulated by multilateral treaties and conventions. We can mention the General Agreement on Tariffs and Trade (GATT) administrated by the World Trade Organization which oversees international trade. We can also mention the International Convention on the simplification and harmonization of Customs procedures, (Kyoto Convention) administrated by the World Customs Organization. Besides, countries have many different bilateral agreements and unilateral systems for facilitation and preferences. It means that each country is free to apply specific rules, but also to apply common rules with its own different system and requirements.
The EU is probably the best example to illustrate this puzzle. Inside the EU, there is a principle of free movement of goods. It means that goods can move from one EU Member State to another with no obligation to pay customs duties. There are also common customs duty rates on goods imported from outside the union. If we take a closer look at the VAT, however, things get more confusing.
The EU has a VAT Directive which stipulates basic principles and standard rules on VAT. However, each EU country can apply these rules differently. It is mostly because of the very complicated decision-making process in the EU. In fact, taxation issues need unanimity among the EU Member States. This usually creates confusion among sellers. Few of them are aware that each EU Member State applies its own VAT rates, according to its own law and system. Since the importation of goods includes VAT, it is essential that you know about VAT specifics to avoid clearance delays.
7.Use an automated solution like Eurora to avoid customs clearance delays
As we saw, to avoid customs clearance delays, you need to provide accurate information and be aware of country-specific subtilties. When you run a business and dispatch your goods around the globe, keeping up with all these requirements is a hard task. What if you allocate the wrong HS code to your goods? Then the duty assessed won’t be correct, and customs can seize your goods. Since there is no space for human error in regulation matters, using an automated customs declaration software is a safer bet.
Using Eurora’s automated Customs Clearance service ensures that you avoid human mistakes and missing data. With a fast automated customs clearance process, you also save time and money. Our Customs Clearance service works as one unique platform from which you can handle all your customs clearance issues. We offer an end-to-end compliance service, and we can also provide fiscal representation in the EU.
Eurora’s platform uses several AI-based solutions. They validate the declaration data before submitting it to customs for clearance. It uses HS Code Allocation, Duty & Tax Calculation, and many other Eurora services to provide you with a fast and seamless clearance process. Our Global Database covers VAT rates, duties, and trade restrictions for most of the countries in the world.
Do you want to avoid customs clearance delays and improve your customers’ satisfaction? Check out our Customs Clearance service!