custom clearance is referred to as the act of passing goods through customs so that they can enter or leave the country.
It can also be seen as the act of passing goods through customs so that they can enter or leave the country.
In moving goods to and fro or through customs, documents must be given by customs to the shipper to show that customs duty has been paid and the goods can be shipped.
In this post, we will be looking at the necessary customs clearance procedure as well as the customs clearance Process and some important custom clearance documents.
custom clearance process
wondering what happens when your shipment arrives in customs?
We will be looking at that in the list below.
STEP ONE
Your paperwork for your shipment will be checked by the customs officer. There is a need for all international shipments need to have commercial invoices.
This document will have both the shipper and the receiver’s contact information, in addition to shipment details such as export data and airway bill number.
The invoice will include the description of the item and its total value.
STEP TWO
A customs officer will see if any taxes and duties apply to your shipment.
This depends on the type of goods, their value, and the law of the importing country.
If the value of the goods is above the tax threshold, the officer will check whether these taxes and duties have been paid for.
STEP THREE
Customs will request payment of taxes and duties, that is if they haven’t been paid.
This is where the option of DDU (Delivery Duty Unpaid) and DDP (Delivery Duty Paid) comes in play.
If a shipment is marked DDP, this means that payment of the taxes and duties have already been paid for.
Most express couriers have their own customs brokers who can process this payment for you, and they offer these services at a fixed price when you pay for your label.
If the shipment is marked as DDU, customs will forward the package will be forwarded by customs to an independent customs broker to collect the required amount.
Sometimes it can get very expensive, as brokers are independent and each charge a different fee structure.
various fees such as brokerage, storage, and late payment fees may apply, making it difficult to tell the customer what their final amount will be.
These brokers will need to contact the recipient to collect a payment, which can throw off your customer if they are unaware of these additional charges.
This is why it is recommended sellers to pre-pay duties for a smoother delivery experience.
STEP FOUR
Once there is a confirmation on the outstanding taxes and duties have been paid, the shipment is released and continues on to its final destination.
As long as you have the required paperwork and understand how to handle taxes and duties, clearing customs should be as easy as possible.
If you find yourself in a situation where your shipment gets stuck in customs, don’t panic. We can help you.
Custom clearance documents required
Custom clearance involves preparing and submitting required documents to facilitate the delivery of the consignment.
It is important to make available shipping clearance documents before the vessel arrivals.
This aids in the fast delivery of the consignment and reduces the risk of it being delayed at the customs office.
Below are the necessary documents needed:
Commercial Invoice
a commercial invoice is a record or evidence that shows the transaction between the exporter and the importer.
When the goods are made available, the exporter issues a commercial invoice to the importer in order to charge him for the goods.
the commercial invoice also contains the basic information on the transaction and it is mostly required for customs clearance.
It is a monetary value declaration of goods. It is always issued by the seller or the shipper of the goods.
This invoice will be needed in two ways which are for form M and Pre Arrival Assessment Reports by the customs for import duty.
a commercial invoice is prepared by the exporter and it must be submitted in the original along with at least one copy.
The invoice does not necessarily need to be signed. Both the original and the copy of the commercial invoice are often signed.
Customs Value Declaration
Customs Value Declaration is a document, which must be presented to the customs authorities Delegated Act.
This form is to be presented with the Single Administrative Document (SAD).
The sole purpose of this requirement is to assess the value of the transaction in order to fix the customs value (taxable value) to apply the tariff duties.
The customs value corresponds to the value of the goods including all the costs incurred like commercial price, transport, insurance, etc.
The usual method used in establishing the Customs value is using the transaction value (the price paid or payable for the imported goods).
In certain cases, the transaction value of the imported goods may be subject to an adjustment, which involves additions or deductions. Like:
Addition of commissions or royalties to the price;
the internal transport which is from the entry point to the final destination in the Community Customs Territory must be deducted.
Bill of Lading
The Bill of Lading (B/L) is a document issued by the shipping company to the operating shipper, which acknowledges that the goods have been received on board.
Bill of Lading serves as proof of receipt of the goods by the carrier obliging him to deliver the goods to the consignee.
Bill of lading contains the details of the goods, the vessel, and the port of destination.
It contains details of ports of loading and discharging are included in the document.
It serves as a piece of evidence showing the contract of carriage and conveys title to the goods, meaning that the bearer of the Bill of Lading is the owner of the goods.
The Bill of Lading may be a negotiable document. Different types of bills of lading can be used.
‘Clean Bills of Lading’ indicates that the goods have been received in an apparent good order and condition.
‘Unclean or Dirty Bills of Lading’ signifies that the goods are damaged or in bad order, in this case, the financing bank may refuse to accept the consignor’s documents.
Freight Insurance
The insurance is an agreement by which the insured is indemnified in the event of damages caused by a risk covered in the policy.
Insurance is very important in the transport of goods because of their exposure to more common risks during handling, storing, loading, or transporting cargo, but also to other rare risks, such as riots, strikes, or terrorism.
There is a difference between the goods transport insurance and the carrier’s responsibility insurance.
The fixed compensation, covered risks, and indemnity of the contract of transport insurance are left to the holder’s choice.
Meanwhile, the hauler’s responsibility insurance is determined by different regulations.
Depending on the means of transport, indemnity is limited by the weight and value of the goods and is only given in case the transporter has been unable to evade responsibility.
when the relevant data in the commercial invoice indicating the premium paid to insure the merchandise does not appear, the insurance invoice will be required for customs clearance.
The standard extent of the transporter’s responsibility is laid down in the following international conventions:
Packing List
The packing list (P/L) is a document accompanying the commercial invoice and the transport documents.
It provides information on the imported items and the packaging details of each shipment like weight, dimensions, handling issues, etc.
It is used for customs clearance as an inventory of the incoming cargo.
The data includes:
Information on the exporter, the importer, and the transport company
Date of issue
Number of the freight invoice
Type of packaging (drum, crate, carton, box, barrel, bag, etc.)
Number of packages
package content of each (description of the goods and number of items per package)
Marks and numbers
Net weight, gross weight, and measurement of the packages
The packing list is prepared by the exporter according to standard business practice and the original along with at least one copy must be submitted. Generally, there is no need to be signed.
However, the original and the copy of the packing list are often signed.
Agency Certificate
Without the approval or certifications from agencies responsible for a related type of consignment, the customs clearance process may not work out as planned.
This custom clearance certificate usually depends on the goods you are importing.
For example, for manufactured goods, the SONCAP Certificate issued by the Standard Organization of Nigeria will be needed for the clearance process. For importation of food items, cosmetics, drugs, etc. NAFDAC certificate will be needed.
NDLEA and NAFDAC certificates are required for clearing imported drugs and so on.
PAAR –This is an acronym for Pre-arrival Assessment Report. A document used in the declaration is issued by the Nigeria Customs Service through the bank.
A valid PAAR approved by NCS is required to clear goods coming into Nigeria.
Clearance Letter: This is a document that gives an agent the right to clear goods at the terminal.
Letter Of Indemnity: This document is an undertaking guaranteeing contractual provisions will be met, otherwise financial reparations will be made.
Duty Receipt: This document signifies proof of Duty Payment. Duty is known as the charge paid to the government for bringing goods to the country.
Import and Export License – There are import and export controls on many goods, which means you need a license to import or export.
There are controls on exports of Military or paramilitary goods, Technology, Artworks, Plants and animals, Medicines, and chemicals
There are also controls on the import of items like Firearms, plants and animals, Foods, Medicines, Textiles, Chemicals
Custom clearance agent in Nigeria/ Custom clearance company in Nigeria
Kingshipping maritime services are one of the leading shipping companies in Nigeria and West Africa.
We are also the best when it comes to helping our clients with custom clearance issues within a short time.
If you have any questions concerning the issuance of documents for your shipment or you want to learn more about the documents required for customs clearance or need a certified custom clearance agency
Give us a call 2348167069828 or send an Email via info@kingshippingtrading.com.