5 Insider Tips For How to Clear Customs With Ease

Gain a competitive edge as Tim Harding, SEKO's UK Customs Manager, shares invaluable tips for effortless customs clearance.

A recent report from the Federation of Small Businesses has revealed that complex customs paperwork, escalating costs and disrupted supply chains has caused nearly 10% of small businesses to cease operations.

While import and export customs checks can indeed pose a challenge for businesses across the board, knowing how to clear customs efficiently can streamline the process.

But first, let’s explore more about what import and export customs clearance is, and why smooth clearance is so important for businesses.

WHAT IS CUSTOMS CLEARANCE?

Customs clearance is the process that goods must follow when being imported into or exported out of a country. It is a critical aspect of international trade, as it ensures that goods meet all legal requirements before being transported.

While the customs clearance process is managed by customs authorities in the respective countries, the responsibility for customs clearance usually lies with customs brokers or agents. These act on behalf of businesses to work through the paperwork and documentation needed. 

Within the customs clearance process, different rules and regulations apply to importing and exporting.

IMPORT CUSTOMS CLEARANCE

In the case of importing, the importer must provide detailed information about the shipment, such as quantity and nature of the goods. Before the goods can continue to their destination, all relevant tariffs, duties and taxes must be calculated and paid. 

Necessary documentation, such as a bill of lading, commercial invoice, and packing list, and any relevant import licences, is also required to prevent any delays from occurring. 

EXPORT CUSTOMS CLEARANCE

When goods are sent out of a country, subject to the Incoterms used, the exporter is responsible for ensuring the submission of all necessary documentation. This means the goods must comply not only with the regulations in the country of export but also the country of destination, where the exporter will need to provide any statement of origin for tariff preference purposes.

WHY IS CUSTOMS CLEARANCE IMPORTANT?

Put simply, without customs clearance goods cannot progress to their destination. Customs clearance ensures that international trade is conducted legally and smoothly, in turn allowing businesses to meet customer demand and maintain their supply chain. 

But while customs clearance is a necessity for any business trading overseas, it’s also vitally important for businesses to make the process as efficient as possible. This will help to avoid costly delays, save time and even prevent fines or penalties by ensuring compliance with local regulations.

HOW TO CLEAR CUSTOMS: 5 TOP TIPS

If you're a customer-focused business engaged in international trade, here are my top five tips on how to clear customs with ease.

1. Provide instructions

Whenever you engage in any type of customs clearance, it’s important that your customers understand the type and quality of information that is needed. It’s up to you to provide guidance. For some importers and exporters, this might not be obvious.

While larger organisations may have dedicated teams that deal with customs, compliance and shipping, businesses on the small to medium end may not have the resources to dedicate to shipping and international customs clearance requirements. This is where customs brokers and intermediaries can play a crucial role, by assisting clients with their customs clearance needs.

Having a clear template for customs clearance information will save time when onboarding new customers. You can find this information online and remember to adapt each template depending on country and region.

2. Understand representation types

Understanding the different types of customs representation and their associated risks is crucial for both customer-facing teams and internal commercial departments in your freight forwarding, brokerage, and intermediary business. In all cases you should undertake your due diligence checks.

There are two main types of customs representation: indirect representation and direct representation. Both are required to have written authorisation, and the customer has to authorise you to use their Customs Declaration Service (CDS) duty deferment scheme.

• Indirect representation. If your customer is not established in the UK, your relationship with them for customs purposes becomes indirect. In this case, the responsibility for duties, taxes, and record-keeping is shared between you and your customer. In essence, HMRC will come to you, as the broker or intermediary, to collect the taxes and hand out any fines for non-compliance or potential fraud. It’s a question for the business managers and directors if they are willing and able to manage the risks to their business and commercial reputation.

• Direct representation. For most businesses established in the UK, direct representation will cover the customs compliance requirements. This type of representation reduces the risk to the business as you are working directly with the importer and exporter, and they will be liable for all the customs risks for non-compliance, duties and taxes. It does not mean that the intermediary or broker can walk away. You will have commercial responsibilities to your customer, albeit with reduced risk to the company.

3. Always conduct due diligence

Never accept, on face value, the information given to you without doing due diligence checks. HMRC will expect that you have done the basic checks, and you should have a process in place to do this.

You may want to include this as part of the commercial side of the business, just before any agreements to onboard new customers. Or, you can include this as part of the customs clearance check and request, conducted by the operations team.

These checks should include the following:

• Check the UK VAT number—you can do this online at HMRC Check a UK VAT number
• Companies house and credit checks.
• Get written confirmation from the customers that they will pay HMRC any VAT that is postponed at the time of import.
• Get the direct or indirect letter completed and signed by a director of the company.
• Can you identify the person instructing you?
• Check the instructions they give you—the suppliers, if you can, and the commercial invoice details—as well as the details of goods, value, description, UK tariff numbers.
• Check where the goods are being moved from and to.

Consider the following:

• Does the price of the goods seem reasonable in the current market?
• Is there a genuine market for the goods at the place of delivery?
• Does the overall deal look too good to be true?

4. Achieving AEO status

Dealing with customers who have achieved AEO status can help with both the customer and the broker/intermediary relationship. It shows that both parties work towards common standards that already address most of the questions raised by engagement with cross-border customs requirements.

If the customer does not have AEO, then showing them that your process and procedures conform to AEO standards can help them when dealing with the customs red tape. Having AEO confers some advantages to the business, such as the required financial guarantees and speedier HMRC border checks for goods.

5. Engage with your customers

Regular engagement with your customer via your commercial teams can help establish your credentials as a knowledgeable and safe pair of hands when it comes to customs and cross border trade. Building relationships gives your customer the reassurance that your organisation is committed to the quality and quantity of any advice or future engagement.

Since the UK left the Single Market and Customs Union, there will be a slow drift towards nonalignment with some EU customs regulations and you need to keep them updated of any changes.

If you'd like to learn more about SEKO's customs clearance tips, please reach out to a member of the team.

CLEAR CUSTOMS SMOOTHLY WITH SEKO LOGISTICS

At SEKO Logistics, we make customs clearance easy. Our expertise in cross border shipping and fulfilment ensures your international shipments move swiftly and smoothly, all with the help of our customs experts. 

Our advanced customs capabilities, spanning 150 offices worldwide, give you the freedom to expand your business globally. We handle every aspect of customs regulations, from intricate details to bulk parcel clearance, so you can focus on growth. 

Contact us today to speak with our logistics experts and learn more about our industry-leading services. 

CUSTOMS CLEARANCE FAQS

What documents are required for customs clearance?

Key documents required for customs clearance include a bill of lading, commercial invoice, packing list, and certificates of origin may be required. Additional documents may be needed depending on the type of goods, their value, and the destination country’s regulations. 

How long does customs clearance take?

The time required for customs clearance can vary widely depending on factors such as the destination country and the complexity of the shipment.

However, in a typical customs arrangement, it can take anywhere from a few minutes to a couple of hours, if information is missing. 

Delays can occur if there are issues with the documentation, if the goods require additional inspection, or if customs duties have not been paid.

What are the costs associated with customs clearance?

Just some of the costs associated with customs clearance include duties, taxes, agent’s disbursements, and fees that vary by country and the type of goods being shipped. Further costs can arise if there are delays or if goods are held for inspection.