Global market exposure is a vital element for an export business. It paves the way to a golden niche for the particular product you are exporting. If you are willing to transport perishable goods between ports, you need to have a clear idea about the customs clearance process. You need to abide by the export customs clearance procedure; if you fail to do so, the customs authority has the right to halt your shipment, and you might have to encounter legal issues and heavy fines.
What is the customs clearance process?
Customs clearance procedure for export involves verifying the integrity of goods before their entry or exit from a country. The customs clearance process ensures that shipments comply with regulations and that all taxes and duties are paid. Furthermore, the customs clearance process mainly focuses on reviewing the necessary documentation to facilitate the nation's economic interests, food safety, and standards during the movement of goods.
Why is customs clearance important?
You need to make meticulous preparations to reduce the potential delays and additional fees during the customs clearance process. Keep in mind these considerations before transporting perishable goods from one port to another.
If you are new to the perishable industry or want to export fruits, vegetables, meat , dairy products , or seafood , you need to keep the necessary documents for a seamless customs clearance process.
The List of Documents necessary for Customs Clearance Process
- Proforma Invoice: A proforma invoice is a preliminary document that is provided to a buyer before the final transaction is made. This invoice involves the primary stages of exporting the perishable goods that need to be shipped. The bill is prepared by the exporters and provides an estimated price, quantities, shipping bills, and a fixed timeline.
- Commercial Invoice: When conducting business internationally, an authorized document known as a commercial invoice is useful for customs clearance. It is a document that lists the amount and cost of goods being transported across international boundaries. Commercial invoices are mandatory to ship goods globally by land or ocean freight. This authorized document enables the customs authorities to review the import duties and taxes to be paid for the goods being shipped.
- Export Packing List: An export packing list is a document that specializes in the shipment of goods being shipped from one country to another. It includes the contents of the shipment, providing comprehensive information about the goods, their quantities, and packaging.
- Certificate of Origin: The Certificate of Origin , an authentic document, implies the identity of the country where goods or commodities are manufactured. It has all the details, such as the nature of the goods, its port destination, and the countries of export. This certificate is essential for exporting goods across international borders, as required by trade agreements and treaties between nations.
- Shipping Bill: The shipping bill refers to the document with which the customs authorities permit the exporters to ship their perishable cargo from end-to-end port. The bill contains all the information relating to the perishable cargo being exported, including the name of the vessel, the desired destination where the shipment needs to be landed, its value, and other relevant details.
- Bill of Lading: A bill of lading is an official document issued by a carrier to a shipper, outlining the type, quantity, and location of the goods being transported. It acts as a title document, a receipt for the goods, and a contractual agreement between the carrier and the shipper.
- Letter of Credit: A Letter of Credit (LC) is a legal document issued by a bank that guarantees payment from the buyer to the seller. It ensures that the seller receives full and timely payment for goods or services rendered. If the buyer fails to make the payment, the bank provides the payment in full coverage or the remaining amount on behalf of the buyer.
- Shipper’s Letter of Instruction: A shipper’s letter of instruction is an authentic document that is issued by the exporters to provide shipping instructions to the freight forwarders . This document is also known as the shipper’s export declaration, through which the freight forwarder can export the goods globally. The freight forwarder acting on behalf of the exporter may provide a Bill of Lading (BIL) that includes the precise dimensions, weight, and packing specified in the SLI, ensuring that the cargo is loaded and unloaded without any damage.
- Ocean Bill of Lading: The Ocean Bill of Lading refers to the document that helps ship cargo across international waters.
How to handle the customs clearance process?
Lets discuss in brief the steps to clear the customs process:
1. Correct Documentation : The customs clearance process can be tough, especially if you do not understand the policy requirements. You need to make sure that all the essential documents are in place. Additionally, ensure you list your shipments correctly and their value. Any mistakes between your documentation and the actual shipment contents can delay your clearance, leading to court proceedings by the concerned customs authorities.
2. Adhere to International Trade Laws: The first and foremost thing in global trade is being familiar with the international trade laws and regulations. These foreign laws change from time to time. Both the buyer and seller should understand the intercom agreement. The agreement terms decide who is responsible for paying the customs duties and taxes, as this might affect the goods being shipped.
3. Know What Goods You are Shipping: You must have a precise understanding of the goods you are shipping. If you are sending perishable foods or any pharmaceuticals to the USA, you need to abide by the Food and Drug Administration. Before entering your perishable shipment to an imported nation, ensure you contact reliable federal agencies. Pay the applicable customs fees and duties, as the U.S. Customs and Border Protection evaluates the charges based on your shipment value.
4. Be Ready for Customs Clearance Checks: You must be ready to undergo customs procedures for port entry or exit. Each country has its strict customs clearance procedure for export, and you must comply with it.
5. Evaluate Tax and Duties : If you are shipping perishable goods overseas, you need to be aware of the relevant customs charges. The fees depend entirely on the imported goods value and specific tax rates. The importers can calculate the customs clearance cost by estimating their goods value and adding the cost of all individual goods and any shipping or insurance charges.
The Final Steps in the Customs Clearance Process Upon the Arrival of the Perishable Cargo at the Port
- Checklist: The custodian is responsible for checking and verifying the quantity of the goods at the destination port. The exporter, or CHA, hands over the endorsed checklist to the customs officer at the dock, along with the original invoice, packing list, and other necessary documents.
- Verification: The customs authority inspects the received shipment and updates the system. After submitting the original paperwork, they also create an electronic copy of the shipping bill and hand it to the dock appraiser.
- Examination: The dock inspector assigns a customs official to examine the goods thoroughly. The Customs Department has the right to bypass standard examination norms and the Risk Management System (RMS) to verify any export shipment based on credible information for perishable cargo.
- Sample Test: A customs officer may take a sample of the shipment regarding the description, valuation, and nature of the particular good.
- Let Export Order (LEO): Let Export Order (LEO) is the final go given by customs authority to the exporter after the shipment has been examined properly.
- Loading: When it comes to stuffing the perishable goods in a container, a customs preventive officer is assigned to survey the cargo loading and is marked as "Shipped on Board" on the exporter’s copy of the shipping bill to avoid misplacement or loss of the goods.
- Export General Manifest (EGM): It is mandatory for the agents to submit an Export General Manifest (EGM) for each shipping bill to the customs department before transporting the goods. The EGM can be submitted either electronically or manually.
- Duty Drawback: Duty drawback, which is instructed mainly for customs duties on inputs, is claimed by submitting a specific shipping bill format with the needed documents as per the Drawback Rules 2017. If there are any issues involved with the shipment, it can be returned, but the shipment can’t be stopped.
Conclusion
The customs clearance process ensures that all necessary checks and documentation are verified before exporting the cargo. Following the best loading practices, the customs clearance agents comply with the stringent laws for a seamless movement of perishable cargo across the international borders.
Citrus Freight has strived to provide you with an excellent customs clearance process to export the perishables all over the world. If you are finding it difficult to cope with the customs clearance process, you can contact our customer support at Citrus Freight.
