Each exit from a customs territory and each entry into a customs territory gives rise to export and import formalities. Generally, each country constitutes a customs territory, except in the case of some customs unions where formalities are harmonised, and goods can move freely within the countries of the customs union area.
The following steps will give you a comprehensive understanding of customs mechanisms in the context of import/export operations.
For export:
When you make your customs export declaration, you will need to complete the trade description of your goods with the corresponding tariff classification for the exporting country. It will help determine any duties to be paid or specific export regulations requiring compliance. This classification is also used to compile foreign trade statistics.
For import:
When goods enter customs, they must be classified in the customs nomenclature of the importing country to anticipate the formalities to be completed. The customs classification number (or customs tariff) determines the clearance processes in force for each product, whether they are related to import controls (prohibitions, restrictions, surveillance) or tariffs (customs duties, anti-dumping duties, additional duties, etc.).
Note: Do not confuse the Harmonised System (HS) classification number of your product (i.e. a six-digit international code) with the local classification number (a code that usually contains more than six digits and sometimes includes letters and whose first six characters are the digits of the HS code).
The origin of products is important because applicable duties and restrictions depend on it in many cases. Origin information is necessary, for example, to determine whether imported products are eligible for preferential treatment (reduction or elimination of customs duties under trade agreements between two countries or customs unions) and to apply any specific taxes (such as anti-dumping duties).
The appropriate proof of preferential origin must be presented at customs to enable the importer to benefit from a tariff preference.
For export:
On export, the value to be declared corresponds to the value of the goods at the point of exit from the national territory, plus, where applicable, transport costs to the national or customs border. Exit duties and internal taxes are not taken into account.
The customs export value is necessary to establish the basis for certain export duties and for compiling external trade statistics. The value of the exported goods must correspond to the price that the foreign buyer pays for the goods (i.e. FOB value).
For import:
On import, the customs value is the price paid or payable by the importer for the imported goods, plus the costs of packaging, transport, insurance, handling and loading to the place where the goods enter the import territory (i.e. CIF value). It should be noted that some countries, such as Canada, the United States, South Africa and Australia, apply customs duties on the value at the point of exit from the export territory (i.e. FOB value).
Determining this customs value makes it possible to establish the real economic value of the imported goods. It is used to calculate not only the basis of assessment for customs duties but also for VAT and most other duties and taxes due on the import of goods.
For both exports and imports, you should be aware of the various formalities to be completed and obligations to be met to ensure that customs operations run smoothly and that your product reaches the market.
These may include declarations to be made (customs declaration, registrations), documents to be provided (invoice, packing list, certificate of origin, sanitary or phytosanitary certificate and other attestations), normative constraints to be considered (composition, marking, inspection), which may differ from one country to another and may be specific to certain products.
Note that the Incoterm® chosen in your transaction will determine everyone's obligations for completing formalities, paying customs duties and providing documents.
Various customs procedures allow you to benefit from administrative facilities and reductions or even elimination of duties and taxes. These include, for example, (i) temporary admission, which allows a product to be imported for re-export in its unaltered state, (ii) the use of the ATA carnet, which allows exports to be re-imported in their unaltered state, or (iii) drawback, which consists of granting reimbursement of import duties and taxes that have been paid for products contained in exported goods.
Different customs regimes may exist depending on the country and the customs union.
As regulations are constantly changing, keeping up to date with them is essential. This will allow you to control your customs processes and, consequently, your risks (additional costs or even penalties in the event of non-compliance, which can have serious economic consequences) by adapting ahead of time to regulatory changes.
You can do this by contacting the relevant bodies such as customs offices, chambers of commerce, and specialist companies or by asking importing customers or customs or transport agents.
Services on this site:
External resources:
Regional trade Agreements Database (WTO)
The customs value of goods
