Frequently Asked Questions for Customs Cleared
Does Customs Check Every Package?
In short, yes. Although the exact process differs from country to country, it is always best to be properly prepared. TecEx ships to over 200 destinations, each with unique customs processes. This is why having an expert on board is essential to getting your goods through customs every time.
For example, at the John F. Kennedy International Airport, the U.S. Customs and Border Protection (CBP) has a multi-tier process to tag which packages to open and fully inspect.
Their inspection to-do list includes:
- Cross-check shipment data with Homeland Security, the FBI, and the DEA,
- Have detection dogs sniff out drugs,
- And visually review all packages with an x-ray scanner.
If your shipment arrives damaged, that may also signal full inspection before clearing customs. A good rule of thumb is to package and document your shipments with the expectation that they will be thoroughly inspected during the customs process.
How Long Does Customs Clearance Take?
As with any process that deals with safety and regulations, customs clearance can take some time. The entire process can take anywhere from a few hours to a few weeks. The amount of time depends on several factors, including:
- The regulations of the origin and destination countries,
- The type of cargo,
- Whether or not the imported goods are controlled/regulated,
- And how efficient your customs broker is.
Some countries have agreements with others that allow for quicker clearance times. Meanwhile, others have quite the opposite. Meaning times can vary to get to the customs cleared status.
For example, did you know that if you’re importing something from China to the United States, it’ll take longer than importing something from Canada to the United States? You might think, “Sure, that makes sense, China is on an entirely different continent!” But geography isn’t the only thing that comes into play here.
Due to China’s stricter regulations and an ongoing trade war with the United States, customs clearance lead times are much longer than they would be if you were importing something from Canada. Getting expert advice in these instances is highly recommended – trying to figure it out as you go can sometimes lead to your shipment getting stuck, penalized, ‘returned to sender’, or destroyed. And, no one needs that pain.
What Duties & Taxes Have To Be Paid To Clear A Shipment At Customs?
If you’re shipping goods across the world, you’re probably familiar with the long list of taxes and fees you have to pay to get your product from point A to point B. Included on that list is something called duties. Most countries require that the importer pay duties (also called tariffs) and taxes on their imports.
Duty rates vary from 0% to 20% or more, depending on the product, country of origin (the country the product is manufactured in), the origin country (the country the products are being shipped from), and the country’s policies. Different types of goods are subject to different rates, with the cost usually calculated by quantities, weight, volume, or a combination.
Another unavoidable fee is import VAT (Value Added Tax). This is a tax levied on all imports with a set rate that varies for each country. In some countries, such as India, there are varying VAT rates applied, depending on the product. The good news about VAT is that this isn’t always a sunken cost, as TecEx has numerous VAT products and customized solutions to help you reclaim it, or avoid paying it altogether.
Every country has additional unique import taxes based on their tax structures and policies. These may be isolated percentages of the shipment value, as with VAT and duties, or compounding in nature where, for example, the taxes are applied to the shipment value as well as the total VAT and Duty amounts.
The best way to estimate these duties and taxes is by understanding and using the Harmonized System (HS) Code and tax structures for the country in question. 3 But your focus should be on creating and selling your products—not on learning facts and figures outside your wheelhouse. Give your business its best chance by focusing on your strengths and letting an expert handle the tax and duty estimates. If you’re shipping with TecEx, we handle the HS Code classifications for your products, and we understand these tax structures. So, we can provide you with extremely accurate duty and tax calculations thanks to our years of experience, this includes the handling of the customs clearance process.
Who Handles Paperwork and Payments Needed For Customs Clearance?
Usually, it is the responsibility of the Importer of Record or consignee (traditionally the buyer) to handle the paperwork and payments during the import process. However, this can depend on the Incoterms used.
TecEx acts as a third-party Importer or Record (IOR) which means we must be present to declare the paperwork, pay the fees, and receive the shipment. But what is an Importer Of Record (IOR)? An IOR is the legal entity entrusted with customs clearing the products and taking responsibility for the import, both at the time of clearance and for numerous years after a successful import. In essence, it’s a party appointed by the buyer/consignee or seller/shipper to handle customs formalities.
When is Customs Clearance Needed?
Customs clearance is required for all international shipments. So, if you’re a business looking to import and/or export products, you’ll need to have all the relevant documentation ready for customs officers to review.
