The process of passing products through customs authorities in order to allow cargo to flow in and out of a country is known as customs clearance. It is a procedure that verifies that all the tariffs have been paid and that the shipper’s products have been cleared for import or export.

Customs clearance is an important stage in permitting products to enter a country through a licensed customs broker. Information about shipments, including imports and exports, as well as the parties involved in the process, is included in this procedure. All international ocean freight shipments must also comply with each country’s customs clearance regulations.

What is the process of Customs Clearance?

Customs clearance procedures include preparing and submitting the necessary papers to facilitate exports or imports into or out of the country, identifying the owner during customs scrutiny, evaluating, paying duty and receiving cargo from the customs agency.

A step-by-step procedure for customs clearance is given below:

Paperwork Verification

A customs officer checks the papers for data integrity and accuracy. The use of commercial invoicing is required for shipments. In order for the documents to be authenticated, they must include the contact information of the shipper and receiver. Additionally, the cargos are given a date and airway bill number.

Cargo Validation

Depending on the nature of the commodities, their value, and the laws enforced by the importing country, a customs officer will validate the cargo and the applicable fees for a consignment. The officer will verify that all applicable taxes and duties have been paid if the value of the items exceeds a certain tax bracket.

Duty Payment

Based on the type of items in the shipment, their claimed value, and the importing country’s customs legislation, the customs broker will ensure that the applicable duties and taxes are pre-paid or collected. The verification and tracking of these charges are the responsibility of customs officers. Customs will request payment if there are any outstanding taxes or duties. There are two payment methods offered: DDU (Delivery Duty Unpaid) and DDP (Delivery Duty Paid).

Release of Shipment

Customs releases the consignment and permits it to proceed to its final destination once any outstanding taxes and fees are paid. Certain businesses run warehouses that allow shipments to cross the border while remaining ‘in bond’ until cleared. When the required documents are not on hand to legally clear a shipment, there is typically a fee associated with it.