Understanding Customs Clearance
When commodities enter (import) or leave (export) a country, they must be reported to customs authorities – a mandatory process known as a customs declaration. This declaration consists of a portfolio of documents containing essential details regarding the transported cargo. The client (i.e., the shipper) bears the responsibility for providing this information. This video explains everything that is required.
Following the submission of the customs declaration, officers execute a thorough review to verify – among other elements – if the commodities are legal and compliant. They will then provide a Duties & Tax Assessment indicating the amount that must be settled. After remittance, they will confirm the Customs Release or “Customs Clearance” (which frequently occurs right when the shipment enters the country).
Why is it essential to understand customs clearance processes?
When shipping goods internationally, failing to comply with all customs regulations means authorities may hold your products to carry out further document checks or physical inspections, for example. In the most severe instances, your goods may even be seized by authorities. Both scenarios mean potential late deliveries to your end customers, along with possible fines and penalties for your business.
But don’t panic! Below we’ll explore the primary catalysts for Customs Clearance delays, and the steps your business can take to avoid these complications.
7 reasons for customs clearance delays – and how to prevent them
1. Flawed or incomplete information and documentation
Erroneous or missing records stand among the top reasons for customs delays.
To guarantee seamless import processing when shipping internationally, it is crucial to provide a complete and accurate Commercial Invoice, featuring an exact description, declared value, tariff code, and supporting details.
Solution: The two critical forms requiring close scrutiny are the Commercial Invoice and the Waybill. On the Commercial Invoice, you must prioritize entering a highly precise line-item commodity description. Vague descriptions in this section frequently trigger border hold-ups, so ensure you provide exhaustive details. This guide will help you complete every field of the Commercial Invoice correctly, allowing your shipment to transition smoothly without any challenges.
2. Incorrect HS Codes What is an HS Code?
Harmonized System Codes (also known as Tariff Codes) are globally standardized commodity codes used to classify the exact type of merchandise being shipped. Without these identifiers, customs authorities cannot verify the shipment contents or calculate the taxes and duties due.
Solution: You can locate the appropriate classification number for your product via your local government website, or by utilizing DHL’s MyGTS (My Global Trade Services) tool.
3. Undervaluation of goods
You are obligated to declare the worth of the goods on the Commercial Invoice. Some shippers try to reduce their import customs duty by undervaluing their goods, an illicit practice across most jurisdictions that often triggers steep regulatory fines and penalties. Therefore, we strongly advise businesses to always declare the authentic commercial worth of their goods.
If customs authorities suspect a shipment features artificially low pricing, the receiver will be contacted and requested to provide proof of payment or a purchase receipt. If undervaluation is confirmed, this frequently leads to reassessed duties and taxes, severe financial sanctions, and potential restrictions on subsequent import operations.
Solution: Maintain full transparency by stating the true market value of the goods being shipped, along with the corresponding currency. The pricing must be precisely reported for each item listed on the Commercial Invoice. This guide will help you determine and declare the correct value.
4. Non-compliance with import/export regulations
Every country enforces unique border regulations to monitor items crossing its boundaries – maintaining a strict registry of restricted and prohibited items. Non-compliance with import/export regulations can result in your shipment being detained, fined, or confiscated.
Solution: Make sure to comprehensively investigate the border protocols of both the origin and destination nations – determining if your commodities require specific permits, licenses, or certificates. With DHL’s MyGTS, you can review international trade prerequisites by country in a fast, straightforward manner.
5. Failure to pay duties and taxes on time
Import Customs Duties & Taxes are collected by customs authorities on goods traded internationally.
Import Customs Duties & Taxes must be paid before the goods are released by authorities into the country; failure to do so risks the shipment being delayed, held, or even returned to origin.
Solution: When shipping internationally, you must determine who is going to pay the associated border charges. To simplify this process, DHL Express offers a service to settle these fees 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 tariffs and assessments, 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 tariffs and assessments, 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
Please execute the online payment as soon as possible to ensure a smooth delivery of your shipment.
6. Improper labeling or packing methods
Illegible or incomplete labels, markings, or inadequate packaging can lead to damaged, delayed, or rejected goods– particularly when handling materials classified as “Hazardous” or “Dangerous Goods”.
Solution: Carefully check the packaging, marking, and labeling requirements of your destination. Some countries and transportes, for example, 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 or marks – like “Hazardous” or “Dangerous Goods” – are always clearly visible and readable.
Our Certified International Specialists may be contacted should you have any questions.
7. Poor communication with customs authorities
Customs authorities or your designated customs broker might reach out to verify specific shipment records or request omitted data. Failing to reply frequently triggers transit disruptions.
Solution: Provide immediate answers to any inquiries from regulatory bodies. Additionally, make sure to resolve requests from the DHL Express team right away. This guarantees that any erroneous or absent details are corrected immediately, keeping your goods moving seamlessly through our logistics network.
MyGTS: Simplifying Your International Shipping
To accelerate your international shipment, DHL Express created My Global Trade Services—an advanced, unified platform.
This complimentary, highly accessible tool enables you to manage complex international trade protocols effortlessly. You can sign in using your active DHL Express Business Account or create a new MyGTS profile to utilize:
Pre-Shipment Planning Module: A specialized application engineered to keep your business fully aligned with import and export regulations while projecting your complete Landed Cost.
Harmonized System (HS) Classifications: Eliminate the uncertainty; MyGTS utilizes artificial intelligence to identify the correct tariff classification for your items, accelerating border clearance. Locate your specific codes using descriptive search terms or the integrated directory.
Total Landed Cost for your international shipments: Calculate your anticipated manufacturing values, applicable duties, local taxes, and transportation fees. This helps optimize your commercial pricing model and offers complete transparency to your clientele regarding international shipping fees.
International Compliance Directories: Gain vital insights into regional import and export rules, allowing you to review essential cross-border conditions well ahead of dispatch.
Custom Product Repositories: A convenient archive feature where you can store historical lookups, merchandise profiles, and assigned tariff codes to expedite recurring dispatches.
You can access the MyGTS platform using your current DHL Express account or set up a new MyGTS profile today. Click below to explore your options.
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