The international customs clearance process
All you need to know about international customs clearance processes
During import / export operations internationally, the customs clearance process and its different stages may change because of different variables :
– The trade rules of the importing / exporting countries,
– The nature of the imported / exported goods (food, prohibited goods,…),
– Free-trade agreements (existing or not) between parties,
– The available technologies for the customs services of the involved countries.
However, the following processes may serve as a reference for actions to be generally performed for any clearance operation. Depending on the variables discussed above, the process may include all or some of the following.
· Registration with the exporting country’s customs, and acquisition of the Export Business Number if necessary (EORI in Europe, BN in Canada, ABN in Australia, NZBN in New Zealand).
· Acquisition / production of the origin certificate for the exported goods.
· Verification of the existence of any export restrictionsin the exporting country for the concerned goods (food, hazardous materials,…)
· Verification of the existence of any import restrictions in the importing country for the concerned goods (food, hazardous materials,…).
· Determination of customs HS codes associated with the exported goods.
· If necessary, acquisition of export authorizations / licenses / permits for the exported goods.
· Completion and transmission of the export declaration, electronically or manually, according to the tools available in the customs services of the exporting country.
· Customs deposit of the goods to export.
· If necessary, acquisition of the Import Business Number for the importing country
Acquisition / production of the origin certificate for the imported goods
· Verification of the existence of any import restrictions in the importing country for the concerned goods (food, hazardous materials,…)
· Determination of customs HS codes associated with the imported goods
· If necessary, acquisition of import authorizations / licenses / permits for the imported goods
· Completion and transmission of the import declaration, electronically or manually, according to the tools available in the customs services of the importing country
· Waiting for the declaration to be approved by the customs services of the importing country
Payment of import duties and taxes
· Waiting for the goods to be made available by the customs services. If all the previous steps have been followed scrupulously, and the required documents correctly completed, the customs services have no reason to detain the goods and will make them quickly available.
SAD (Single Administrative Document) : a form which must be completed during import or export operations between EU member countries and third countries..
ECS (Export Control System) : a system of email used within the European Union in order to harmonize the procedures and strengthen the security of goods passing through the EU to non-EU countries (indirect export).
EXS (Exit Summary Declaration) : an electronic message to communicate with the EU customs services before the actual exit of the goods from the customs territory.
EORI (Economic Operator Registration and Identification) : used for the identification of economic operators and other people in their relationships with customs authorities. Therefore, each economic actor having contacts with the EU customs administrations, or carrying or activities covered by the customs legislations, is identified by a unique number.
MRN (Movement Reference Number) : it appears on the SAD and is composed of 18 alphanumeric characters. The 3rd and the 4th characters indicates the ISO of the origin country.
The export customs clearance process from the EU
For informational purpose, here is the detailed customs clearance process, specific for export operations from the EU :
· Routing and presentation of goods in a customs office of the exporting country (export office). It’s also possible to make them available in premises approved or authorized by the local customs.
· Production of the SAD customs declaration (Single Administrative Document), which specifies the customs office the goods are leaving the EU from, and to which we attach the invoice, the packing note and other required documents for export, according to the goods and the exporting country. It is mandatory for the exporter to have a EORI number (Economic Operator Registration and Identification).
· Production of adematerialized declaration via the informatic customs clearance system of the exporting country (for example, DELTA in France), in association with the ECS (Export Control System). At the same time, issuance of the EXS (Exit Summary Declaration). It is followed by a possible customs control of the goods, and then the acquisition of the BAE (Good To Remove) from the exporting customs office. The latter will inform the exit office of the European Union of the future passage of the goods at the border Advance (Notice of Export)
· Issuance at the same time of the EAD (Export Accompanying Document), which is then entrusted to the driver. It is an extract of the SAD, where are mentioned the MRN (Movement Reference Number) and the barcode. Thanks to the CDU, this document will soon be dematerialized as well.
· Routing of goods to the exit office of the European Union :
– Customs presentation and notification of the goods arrival by the goods responsible.
– Entrance of the MRN in the ECS au at the exit office of the European Union.
– Eventually un nouveau a new customs control.
– Finally, Observation of the finale exit of the goods from the customs territory by the customs service at the border.
· Obtention of the proof of exit :
– Transmission of the controls results and of the observation of exit to the exportation office of the exit office of the European Union.
– Change of status of the SAD to “SOR”” for exit. It is the electronic visa to leave the UE.
– This document is a proof for the TVA exemption for an exporting sale. The exporter receives it from the customs representant once the customs clearance procedure is complete. The exporter can also find it online via the customs website.
The import customs clearance process to the EU
The specific customs clearance procedure to import goods to the EU includes :
· Routing and presentation of the goods to the customs office, or in any other place approved by customs, at the entry point of the EU. It is possible to clear the goods under customs control by a different customs office than the entrance one. In that case, the goods have to be accompanied between both customs offices by a transit declaration T1, established on NSTO (procedure soon available via DELTA T).
· Production of a SAD customs declaration, o which is joined the supplier’s invoice, the packing note and the other required documents for importation, according to the importing country and the goods. Same than for the exporting procedure, it is mandatory to have a EORI number.
· Production of adematerialized declaration via the informatic customs system of the importing country (for example, DELTA in France).
· Possible customs controls of the documents and / or of the goods by the customs officers.
· Effective customs clearance of the goods to allow their free circulation inside the European Union, or their consumption by an importing member state. Otherwise, the goods are placed under a specific customs regime, which as for effect to suspend the payment of duties and taxes. If there is a release for consumption, the payment of duties and taxes associated in the importing country is required (cash, or after 30 days via a collection credit).
· Once the Customs release note is made by the customs services the goods can be withdrawn. Otherwise, the goods will be placed in temporary storage pending a customs regime attribution : until 90 days under IST (Temporary Storage Installation) or 24 hours if the receiver is agreed for LDAT transit (Agreed Places for Temporary Storage). Passed these delays, it is possible for the customs services to sell the abandoned goods to auction.
Release note : act by which the customs authorities authorize the removal of goods placed under surveillance.
DDT (Declaration of Temporary Deposit) : required for the storage of goods on LADT.
IST (Temporary Storage Facility) : place allowing the storage of non-Union goods for 90 days under suspension of duties, taxes and commercial policy measures.
LADT : Approved Place for Temporary Deposit.
NCTS (New Computerized Transit System) : Allows automatic collection and transmission of transit documents between economic operators and customs offices of goods departure, passage and arrival. Are recipient of the collected data : authorized services of the Directorate General of Customs and Taxes, and customs administrations of the NCTS’s participating states.
There are different means available for importers to suspend and / or delay the payment of dus à import duties and taxes.
During goods importation, duties and taxes have to be paid cash to the customs services, at the moment of the import declaration deposit, or during the release for consumption..
However, at the condition of a removal credit’s guarantee,it is possible to pay the duties and taxes associated 30 days later. In addition, imported goods can be removed in the course of the customs verifications, and before the globalized liquidation/acquittement of the duties and taxes associated.
The liquidations of the duties and taxes guaranteed by the removal credit arematerialized on one or more credit slips. And these latter can be established with different periodicities (daily, ten-day or mensual). They must be paid in total by electronic payment (SEPA direct debit) once the deadline if finished, and partial payments are not authorized
The self-liquidation procedure of VAT during import operations allows to report the VAT due payment, which in principle takes place during the setting consumption of goods.
It is now possible to report the due amount on the revenue declaration (CA3, mensual or trimestrial), to be transmitted to the competent services (the DGFiP in France, for General Management of Public Finances). This self-liquidation prevent the operators to advance funds, usually needed to VAT liquidation at import.
The self-liquidation permission request has to be transmitted to the customs office where is deposed the import declaration. Any natural or legal person subject to VAT, established on the customs territory of the Union and submitted to taxes for import operations to the EU, can make a self-liquidation permission demand.
Some conditions have to be respected for operators to process a self-liquidation :
· For the operators established inside the EU :
– Minimum 4 imports into the territory of the EU have been made
12 months prior to the request,
– To have acustoms and taxes management system, to follow import operations,
– Tohave a a healthy financial situation during the 12 months prior to the request,
– To not have committed major infractions regarding fiscal and customs authorities during the 12 months prior to the request.
· For the operators non-established inside the EU :
– To perform clearance customs operations through a customs representative with the valid authorization of an economic operator certified “customs simplification” allowing the operator to have the same level of security than european operators.
After their presentation at customs (“notification to the customs authorities of the goods arrival to the customs office or any other place chosen or agreed by the customs authorities, and of the goods availability for the customs purposes”), and waiting for a customs regime allocation (or by default their re-exportation), non-Union goods can be stored for a temporary deposit n a place agreed by the customs services. It can also be located at the border : in a harbour terminal, or inside the territory in the importer’s premises for example.
The temporary storage suspends the payment of duties and taxes, and the measures of foreign trade. Moreover, this operation needs an authorization from the customs, and is limited in time.
There are two types of location for non-EU temporary deposit storage :
· l’The IST, for Temporary Storage Installation.
– Is authorized the storage of goods for a period of 90 days maximum, but also the movement of goods between different installations, under certain conditions.
– The IST manager has to follow and index all goods entries, stays and exits.
– It is necessary for the operator to make an authorization request for the goods storage, and to constitute a guarantee (in some cases, deductions or total dispensation can be possible).
· le The LADT, for Agreed Locations for Temporary Storage.
– Is authorized a short period storage, until 3 days for a storage at the border, and until 6 days for the storage inside an agreed receiver’s premises.
– The operator needs to know what goods are detained in LADT, but doesn’t have to keep an index of them.
– As for IST, it is necessary for the operator to make an authorization request for the goods storage, and to constitute a guarantee (in some cases, deductions or total dispensation can be possible).
– The temporary storage ends as soon as a customs regime is attributed to the goods.
– After 3 or 6 days of storage, it is necessary to place the goods under a customs regime, or to re-export them.
If the goods are still placed under LADT once the deadline is passed, the owner of the certification has the choice between :
√ destruction of the goods at the cost of the manager ,
√ or abandon of the goods for a sale at the State’s profit.
In both cases, it is necessary for the operator / manager of the location (the one in charge, who is engaged to meet the expectations related to temporary storage) to the concerned customs services (via the online service SOPRANO in France) an authorization request for temporary storage, and for location approval, for the purposes of temporary deposit. To make this request, the operator / manager needs to meet these conditions :
– Being established in a EU customs territory,
– Constitute a guarantee,
– Offer the mandatory insurance for the good continuity of the operations,
– Allow customs to assure the surveillance of the goods,
– To not make retail sales,
– Establish special installations, for hazardous materials for instance,
– Being the only manager of the location,
– The IST / LADT need to be delimited to the operator’s premises, but also securised in order to prevent any risk of theft of the goods.
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