Customs Clearance

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What is Customs Clearance?

Customs clearance is an act of creating and providing documentation for products that are to be exported or imported. It ensures that no prohibited or non-documented goods are imported or exported from a country. Customs clearance mainly comes into play during international shipping, which usually takes around 10 to 14 days. 

Significance of Customs Clearance in an E-commerce Shipping and Delivery

When shipping internationally, a seller requires all the documents for customs clearance. It ensures that items are imported or exported through an authorized customs broker. Some primary benefits of customs clearance are listed below:

  • Consignee and consignor benefits: A team of experts is appointed to check the bill of lading and verify the imported or to-be-exported products per the mentioned document. Even though their primary responsibility is to ensure that all laws are abided by, the experts often benefit the seller. They unintentionally verify the products and check all the required bills for discrepancies. 
  • Faster deliveries: With proper customs clearance, sellers will not have to worry about their shipment being stopped anywhere in the order fulfillment process. Hence, they can ensure faster deliveries. 

Prerequisites of Customs Clearance and How It Works

The primary prerequisite of customs clearance is to receive or import a product or to export. 

The steps for customs clearance are listed below.

  • Documentation: The importer/exporter must file certain documents like airway bill, bill of lading, shipping manifest, and more. 
  • Inspection: The documents are checked to ensure that no prohibited products are entering or leaving the port, and the stock is further verified. 
  • Payment and billing: The customs duty is then levied, and a bill of entry is issued. 

Use Case With Customs Clearance

Some use case for customs clearance have been provided below.

  • A retailer in the Philippines imports 10,000 units of face masks from a manufacturer in Thailand and pays the customs clearance, including duty payment, following the DAP incoterm. 

A Singapore-based customer orders footwear from an Australian manufacturer. The manufacturer manages the Customs Clearance, following the DDP incoterm.  

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