What is customs clearance?
When goods are being imported or exported to a country, they must be declared to customs authorities which is a mandatory process known as customs declaration. A customs declaration is a set of documents containing important information about the transported goods. The customer (i.e. the shipper) is responsible for providing this data. watch the following film to break down everything that is required.
Based on the customs declaration, authorities conduct an assessment and check (among other elements) if the goods are legal and compliant. They will then provide a Duties & Tax Assessment indicating the amount that must be paid. After payment, they will confirm the Customs Release or “Customs Clearance” (which in many cases happens at the time of the shipment’s arrival in the country).
Importance of understanding customs clearance processes
When shipping goods internationally, failing to comply with all customs regulations means authorities may hold your goods to carry out further document checks or physical inspections, for instance. In the worst cases, your goods may even be seized by authorities. Both scenarios mean potential late deliveries to your end customers, and possible fines and penalties for your business.
But no need to worry. Below we’ll explore the leading reasons for Customs Clearance delays, and the steps your business can take to avoid the pitfalls.
7 reasons for customs clearance delays & how to avoid them
1. Inaccurate or incomplete data and documentation
Inaccurate or missing data and documentation is one of the main reasons for customs delays. Therefore to ensure a smooth Customs Clearance when shipping internationally, it is crucial to provide a complete and accurate Commercial Invoice, in addition to a goods description, value, tariff code, and other required information.
Solution: The Commercial Invoice and Waybill are the two most critical shipping documents and require particular attention. When completing the Commercial Invoice, it is essential to include a clear, detailed, and accurate description of the goods being shipped. Vague or incomplete product descriptions are among the most common reasons for customs delays, so providing comprehensive and precise information is key to ensuring efficient customs clearance.
This guide will help you fill in each section of the Commercial Invoice correctly, so your shipment moves through customs without any challenges.
2. Incorrect HS Code
What is an HS Code? It stands for Harmonized System Codes (also known as Tariff Codes) which are globally standardized commodity codes used to classify the exact type of goods being shipped. Without these codes, customs authorities cannot identify a shipment’s contents or calculate the taxes and duties due.
Solution: You can find the HS Code for your product via your country’s government website, or with DHL’s MyGTS (My Global Trade Services) tool.
3. Undervaluation of goods
The value of the goods must be accurately declared on the Commercial Invoice. While some shippers may attempt to lower import duties by understating the value of their goods, this practice is illegal in most countries and can lead to fines, penalties, and customs compliance issues. To avoid delays and potential legal consequences, always ensure that the true and correct value of the goods is declared.
If customs authorities raise a suspect of goods being undervalued, the receiver will be contacted and requested to provide proof of payment or a receipt for the goods purchased. If undervaluation is confirmed, this may result in a higher duties and taxes assessment for the shipment, as well as potential fines and penalties imposed by authorities (and possible restrictions of future shipments.)
Solution: Always be transparent and declare the actual market value of the goods being shipped, including the applicable currency. The value should be accurately stated for each individual item listed on the Commercial Invoice. This guide will assist you in determining and declaring the correct value to ensure compliance and facilitate smooth customs clearance.
4. Being non-compliant with import/export regulations
Every country enforces specific customs laws and regulations governing the import and export of goods, including lists of restricted and prohibited items. Failure to comply with these requirements can result in shipments being delayed, detained, fined, or even confiscated by customs authorities.
Solution: Be sure to thoroughly research all the customs rules for the country you’re exporting from and to – including any special permits, licenses or certificates you may need to apply for. With DHL’s MyGTS, you can check examples of import and export requirement per country, quickly and easily.
5. Unable to pay duties and taxes on time
Import Customs Duties and Taxes are charges imposed by customs authorities on goods being traded across international borders.
These duties and taxes must be paid before the shipment can be released for entry into the destination country. Failure to settle these charges promptly may result in the shipment being delayed, placed on hold by customs, or even returned to the country of origin.
Solution: When shipping internationally, you must establish who is going to pay the Import Customs Duties & Taxes.
To make things easier for you, DHL Express offers a service to pay these Import Customs Duties & Taxes on your behalf to government authorities when your goods arrive in the country. You will then be charged by DHL Express for these costs.
There are two options:
- If the shipper has pre-selected the option to pay for the Import Customs Duties & Taxes, then no further payment is needed from the receiver prior to delivery.
- If the shipper has NOT pre-selected the option to pay for the Import Customs Duties & Taxes, then the receiver will be charged prior to delivery. There are two options for that payment:
a. If the receiver has a DHL account, DHL will bill the receiver’s account.
b. If the receiver does not have a DHL account, DHL will send a link to the receiver for payment to be made online. Please make the online payment as soon as possible to ensure a smooth delivery of your shipment.
6. Inaccurate labeling or packaging
Unreadable or incomplete labels, or inadequate packaging can lead to damaged, delayed or rejected goods especially for “Hazardous” or “Dangerous Goods”.
Solution: Carefully check the packaging and labeling requirements of your destination. Some countries and transporters, for instance , have restrictions on certain packaging materials. Ensure your packages are packed, marked and labeled correctly to ensure full compliance with all the regulations and regulators involved in the consignment’s journey, and that any special labels like “Hazardous” or “Dangerous Goods” are always clearly visible and readable. Our Certified International Specialists may be contacted in case of any doubt.
7. Miscommunication with customs authorities
Customs authorities or your designated customs broker may reach out to verify shipment details or request additional information. Delayed or missing responses can result in customs clearance delays and may impact the timely delivery of your shipment.
Solution: Reply to any queries from authorities promptly. Be sure, too, to respond to requests from DHL Express – this will ensure any inaccurate or missing information can be addressed quickly, and your shipment kept moving through our network.
MyGTS: Your gateway to easy international shipping
To speed up international shipping and simplify customs clearance, DHL Express has developed My Global Trade Services, an intuitive, all-in-one portal.
MyGTS is a free, user-friendly platform that will help you navigate all international shipping regulations, seamlessly. You can log in with your existing DHL Express Business Account or register a new MyGTS account to access:
- Pre-shipment Planner: a dedicated tool to help your business comply with all import/export regulations and calculate Landed Cost.
- Harmonized System (HS) Codes: no more guesswork; MyGTS leverages AI to give you the potential tariff classification for your shipment, making customs clearance faster. Search for HS Codes using keywords or the code directory.
- Landed Cost for your international shipments: calculate your estimated product cost, duties & taxes, and freight charges to enhance your pricing strategy and give your customers transparency over estimated shipping fees.
- Guidance on a country’s import and export requirements – so you can understand some of the key requirements before shipping.
- A product catalog feature – where you can save past searches, product details and tariff codes for quicker repeat shipping.
You can log in to MyGTS with your existing DHL Express account or register a new MyGTS account. Click below for your options.
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