Customs Form for International Shipping- An Introduction
A customs form is a mandatory document for importing and exporting goods across international borders. It establishes that you have declared the value of the goods and complied with all the rules and regulations of both the receiving and sending countries.
Furthermore, a custom form is also crucial for security purposes. It guarantees that nothing illegal or dangerous is entering the country. Each region has the right to impose taxes and duties on the incoming goods, and a custom form helps the border authorities assess these items efficiently.
Considering both factors, it is crucial to fill out the international shipping customs form carefully and meticulously. Failure to do so might lead to unpleasant consequences, such as steep fines, penalties, and other complications in your package’s itinerary.
Do All Carriers Require a Form?
Yes, every parcel that enters an international border must have a carefully filled customs form. Having said that, there are two exceptions to this, namely Switzerland and European Union. You do not need an international shipping customs form if you ship goods between regions in these two countries.
Why You Need a Custom Form for International Shipping
Let’s explore some of the most common rookie mistakes people tend to make when filling out a customs form.
1. Underestimating value
One of the most crucial tasks while filling out a customs form is correctly estimating the value of your goods. Failure to do so might land you in serious legal complications. In fact, it is illegal to tamper with the accurate estimate of the value of your exported goods. Even if an overseas buyer convinces you to lower the value to avoid paying higher fees, do not oblige under any circumstances.
2. Using the wrong HS code
HS code, also known as Harmonized System Code, helps authorities determine whether any tariffs apply to imported goods. There are as many as 5000 HS codes in use. Finding the right one for your goods can sometimes become confusing. Nonetheless, using the right HS code is always advisable to avoid any complications with your shipments.
3. Incorrect recipient address
Filling out the recipient’s address is also crucial to the custom form. If you provide the wrong address, your shipment might get delivered to the wrong place or even not get delivered at all by the transport company. As an e-commerce store owner, you will have a lot of overseas customers, which means you will have to deal with various foreign addresses. Ensure to check them properly before adding them to the custom form.
4. Inputting incorrect AES information
Contrary to popular belief, filling out a customs form does not simply involve paper and a pen. You must also input electronic export information in the AES (Automated Export System). Ensure that you are filling in the right details, and if required, double-check before submitting. This will prevent any kind of error from occurring.
5. Adding wrong or no contact information
While entering your contact details in the custom form, ensure you give the correct information. Otherwise, it might prevent authorities from contacting you in case of any complications or delays with your shipment.
6. Not properly labeling hazardous materials
There are a few items that require special handling, especially when you are shipping them across international borders. A few examples of the same might include food and other fragile materials. Therefore, it is extremely important to label them properly. Failure to do so could lead to disastrous consequences.
7. Attaching the form or barcode incorrectly
Carefully read the instructions and try to abide by them when attaching the custom form to the packages headed for overseas shipment. Ensure that the barcode is properly visible. Transport companies such as UPS, Canada Post, or DHL usually provide a set of instructions for this purpose.
8. Not abiding by specific import-export laws
As stated earlier, each region has its own set of rules and regulations when it comes to the international shipment. Some might require an AMS, while others ask you to provide an origin certificate. Whichever country you are dealing with, ensure you fully understand all their import laws and abide by them to the best of your ability.
9. Assuming your goods qualify for duty-free treatment
Free trade agreements have a few advantages, such as tariff reduction or expanded investment opportunities. However, in order to avail of the same, you need to follow certain rules and regulations. Assuming that your goods qualify for duty-free treatment, even when they don’t, can lead to dire consequences. It also constitutes fraud, and you, alongside your customers, will be charged a steep fine for the violation.
How to Fill Out a Customs Form for International Shipping
If you are new to this arena or do not export too often, all these might seem confusing. To help you with the same, here is a detailed guide on filling out a customs form for international shipping.
Almost every custom form requires you to enter the following details,
- Your full name, address, and contact number
- The full name, address, and contact information of the recipient
- Number of items inside the box
- Description of the said items
- Value of each item
- Weight of the package and
- Shipping cost, among other things
When entering information regarding the description of the items you wish to ship, ensure that it is done clearly and concisely. For example, if you are shipping apple juice, avoid writing just ‘beverage’ in the description box. Instead, to make it more specific, you can write ‘juice’ or ‘non-alcoholic beverage.’
Ensure accurate specifying of the weight of the overall package as well as the individual items. This is because the total shipping price is usually determined by considering the total weight and size of the shipment.
Estimation of Declared Value
You can calculate the declared value primarily in two ways,
- The selling price of the product
- The total amount paid by the customer for the product.
Carriers usually use the declared value in different ways. For example, companies like FedEx usually use it for insurance, whereas others, like UPS, use the declared value for recovery. Nonetheless, you should always enter the right declared value.
There are a few important points to remember in this stage. Firstly, you should never state a value more than what your customers have originally been charged. Even when the customer has paid more than the good’s selling price, you can still enter the actual selling price of the good. In this way, if your package ever gets stolen or lost, you will receive compensation equal to the selling price.
Secondly, undervaluation offenses are usually taken quite seriously by customs officials. You will likely be charged with a fine if you fail to comply with all the rules and regulations. In worst-case scenarios, your goods might even be seized by the officials.
Conditions of Sale
Delivered At Place intercoms, or DAP, fetches several significant benefits, especially for small business owners. Under DAT, sellers are only liable for export proceedings, which include packaging, documentation, and shipment. This basically means they are not responsible for the import duties and the risks. On the other hand, the buyer will be held responsible for all the import taxes and duties as levied by the customs authorities.
Once the package has reached the customs office, the risk is transferred to the buyer. This means they will need to look after any additional charges or paperwork on certain items.
However, in order to avail of this benefit, you must ensure that the DAT agreement has been set during the time of purchase. Ensure that the sale condition has been mentioned properly in the commercial invoice. Otherwise, it might cost you additional delays and checks.
As stated earlier, if your packaging consists of hazardous items, you must label them accordingly. You might also be required to submit additional documentation containing a much more in-depth description of the materials to be shipped. But what exactly constitutes hazardous materials?
Below mentioned are a few examples of the same,
- Explosives and flammable materials
- Battery power equipment
- Dry Ice
- Radioactive materials and
- Toxic substances, among others.
Safety is one of the primary reasons you need to label these items carefully. In order to avoid any dire consequences, customs officials are always on the lookout for any kind of leakage from these boxes. Shipment of these goods via air usually consists of red-striped forms, whereas, if you are using ocean freight, then blue-striped forms are used. Additionally, you should also ensure that the country you are shipping to accepts such hazardous items.
Electronic Export Information
Lastly, you will be required to fill out an EEI form, specifically for Schedule B products with a value exceeding $2,500. They usually require an export license. An export license is a must-have document that the government issues for the export of certain products, such as plants, animals, and medicine, among others.
You can find the EEI form online directly at the official website of your carrier. There might be a few differences between an EEI form and a commercial invoice. Nonetheless, you can expect to enter more or less the same information.
Hopefully, this has cleared all your doubts and queries regarding how to fill out a customs form for international shipping. It can seem quite confusing at first glance, but once you get the hang of it, it will get much easier. International shipping is one of the most effective growth strategies for e-commerce businesses. But it also requires you to deal with extensive paperwork and forms. This is primarily because, when shipping products from one country to another, the packages are subjected to all the laws and regulations of both the origin countries and the destination. Therefore, you must be extremely careful while filling out the details since even a small mistake can land you in big trouble.
Do I need a customs declaration?
A customs declaration is a vital official document that contains an in-depth detail of all the goods that will be imported or exported. As per law, most countries across the globe require exporters to carry a customs declaration form for any goods being sent abroad.
What happens if you fill out a customs form incorrectly?
Some of the many dire consequences that you are most likely to face if you fill out a customs form incorrectly include,
- Charged with steep fines and penalties
- Delay in your shipments
- The package might even be returned.
What are the most common problems with customs clearance?
Mentioned below are some of the most common problems with customs clearance.
- Inaccurate Cargo Classification- When goods or packages are not classified properly based on their size, specific features, degree of hazard, and size, among other similar parameters.
- Inadequate documentation provided by the exporter
- Duties that can be, at times, much higher than what has been anticipated.
Do customs check every parcel?
Simply put, yes, every parcel or packaging is opened during the Customs examination process. Following this, they are sealed using a distinctive mark by the post office officials. It is mandatory to check all inbound international packages and mail.
How detailed do you have to be on the customs form?
While filling out the customs form, you must provide very specific detail about each item in the package. This includes both its use and what it is made of. Additionally, you are also required to enter an accurate value for each item.