What is customs clearance?
When goods enter (import) or leave (export) a country, they must be declared to customs authorities – 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. This film breaks 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).
Why is it important to understand 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 example. 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 don’t panic! 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 – and how to avoid them
1. Inaccurate or incomplete data and documentation
Inaccurate or missing data and documentation is one of the leading reasons for customs delays. To ensure a smooth Customs Clearance when shipping internationally, it is crucial to provide a complete and accurate Commercial Invoice, including a goods description, value, tariff code, and other information.
Solution: The two most important documents that require special attention are the Commercial Invoice and the Waybill. On the Commercial Invoice, it is particularly important to provide a detailed and accurate goods description. Insufficient information in this section is one of the biggest causes of shipments being delayed at customs so ensure you provide plenty of detail.
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? Harmonized System Codes (also known as Tariff Codes) are globally standardized commodity codes used to classify the exact type of goods being shipped. Without these, 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
You will be required to declare the value of the goods on the Commercial Invoice. Some shippers try to reduce their import customs duty by undervaluing their goods, which is illegal in most countries globally, and may result in fines and penalties by authorities. Therefore, we strongly advise shippers to always declare the true value of the goods!
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: Be transparent and declare the true market value of the goods being shipped, along with the currency. The value must be accurately declared for each item of the Commercial Invoice. This guide will help you to calculate and declare the correct value.
4. Non-compliance with import/export regulations
Each country has specific import and export customs rules and regulations to control the goods crossing its borders – including a list of restricted and prohibited goods. Non-compliance with such rules risks your shipment being held, fined or seized.
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. 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 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. Improper labeling or packaging
Unreadable/incomplete labels, marks, or inadequate packaging can lead to damaged, delayed or rejected goods – especially so for “Hazardous” or “Dangerous Goods”.
Solution: Carefully check the packaging, marking and labeling requirements of your destination. Some countries and transporters, 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 in case of any doubt.
7. Lack of communication with customs authorities
Customs authorities or your customs broker may contact you to check shipment details or seek missing information. Not responding can cause delays.
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.
