What Is Customs Clearance and How Long Does It Take?
How long does customs clearance take?
Customs officers, buyers and shippers — everyone wants fast customs clearance.
International trade hangs on a knife edge at customs. An April 2014 study found that delays arising from customs processes negatively impact firms' exports. A 10% increase in delays in customs clearance resulted in a 3.8% decrease in exports.
Delays mean increased costs for traders and a decrease in their exports. There’s a knock-on effect. Consumers buy fewer imported products or opt for local sellers when delays occur.
The question is how long does customs clearance take? What causes delays, and how can you avoid them? We will address all these concerns below.
This article at a glance
As an international trader, all your goods must pass through customs clearance to gain entry into your destination country. On average, customs clearance is quick and takes up to 24 hours to pass through. Delays usually occur when there is incomplete or incorrect documentation. Most customs clearance delays are easily preventable by preparing clearance paperwork meticulously.
What is customs clearance?
All goods entering or leaving a country are subject to customs clearance. Customs clearance involves the screening of goods, verifying accompanying import and export documentation, paying import duties, VAT and taxes, testing by customs agents, and storage of goods. It’s in place to safeguard citizens, protect the local economy and environment, and generate revenue.
How long does customs clearance take?
On average, a customs clearance takes 24 hours. The United Kingdom customs clearance, for example, takes just a few minutes or hours to clear. However, if any documents are missing or your goods are inspected, it might take longer, ranging from a few days to several weeks.
When giving an estimate to your customers, present to them the maximum possible delay to minimise disappointment. Generally, the time taken for your goods to go through customs differs depending on the following:
- Country of destination
- Type of goods
- The number of cargo going through clearance
How much does customs clearance cost?
There are various charges associated with importing and exporting commodities across international borders. Let’s delve deeper.
Duty tax levied on imported and exported goods. Duty tax is a percentage of the total value of the goods tagged to the good’s commodity codes. Commodity codes, duty and VAT information for the U.K. can be accessed on this website.
VAT (Value-Added Tax)
You pay VAT when you purchase goods and services. In the U.K. the standard VAT rate is 20%
If customs agents call for X-Rays or tests to ensure compliance or quality standards, importers incur costs. Other costs may include storage costs for items held up longer than usual.
Usually, freight forwarders or customs brokers handle payments for customs clearance. If you manage your shipment, you are billed when your goods arrive at the destination port. Your items would only be released upon payment of the customs charges.
Ultimately, who is liable for payment would depend on the Incoterm agreements between the supplier and importer.
There are also exemptions and duty relief schemes available to U.K. importers. You can find out more about them on the U.K.'s Trade Tariff website.
What is the customs clearance process?
When a cargo reaches customs, a customs officer goes through its paperwork — as such, the shipping label and commercial invoice should correctly list contact information, date of export, and Air Waybill number.
Import tax and duty are calculated based on the value of items imported and import regulations. Items below £39, for example, are not charged import VAT.
If a Deliver Duty Paid (DDP) shipping is selected, the customs clearance process is smoother. Opting for “Deliver Duty Unpaid” (DDU) shipping requires additional time as the customs officer must liaise with a customs broker or even the recipient to collect the import duties and taxes.
Once all taxes and duties (if applicable) are paid, the cargo is transported by courier service for its onward journey to its end destination.
Shipments are seldom held up at customs, and oftentimes goods pass clearance swiftly.
What documentation is required for customs clearance?
Each country has its requirements for customs clearance. However, these are the most common documents required by most countries:
Purchase orders, sales invoices, certificates of origin, packing lists, and Bills of Lading or Air Waybills are typical requirements by customs offices. Ensure that you have them all in order and filled up accurately. Check if you need a licence for restricted goods such as live animals or drugs.
What causes customs delays?
Delays cause bottlenecks in the shipment process. Here are the most usual reasons that customs delays occur:
- Wrongly-filled or incomplete documents. The tiniest mistakes in filling out accompanying documentation can cause delays in customs clearance. Items which are hazardous for example, need to be appropriately marked as they pass through specialists and not standard customs
- Wrong licence. Verify that you have the correct import or export licence. Your products must also have a Certificate of Origin to speed up customs clearance
- Goods selected for random testing. If your shipment is selected by chance for compliance and quality testing, you may expect a longer time for customs clearance. There is nothing you can do to avoid this
- Congestion during peak periods. The logistics industry experiences seasonality too. During holiday or sales season, expect more hold-ups at land, sea, and air ports as they experience a larger volume of parcels to process. When possible, ship off-season
How to avoid delays through customs
Sometimes delays are unavoidable, but other times you could prevent them. These are some of the ways to avoid customs delays:
- Choose a trustworthy freight forwarder. Their expert agents help oversee that you have all the necessary documents
- Check for country-specific regulations from the customs office of the country you are exporting to. Customs clearance paperwork varies from country to country
- Ensure that all the details for your documents are correct. Verify your commercial invoice that lists your buyer and seller information, product HS codes, Incoterms, product and shipping details, and country of origin. Check that your transport accompanying documents, such as Bill of Lading, Air Waybill or CMR, is in order
- Declare the correct value of your goods and check if they are eligible for import tax and duty exemptions. Under-declaring the value of goods risks getting fined or having your goods seized
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