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For countries that do not have any listings
on the IFCBA site, I strongly advise that you check on thequalifications of any
customs broker you consider consulting. A suitable alternative to working
througha customs broker is usually to go to a reputable freight forwarder. In
many case they will have suitablyqualified employees who can guide you on traffic studio review. They will also usually be able to handle thecustoms clearance
work for you.Customs brokers can handle such things as whether you need
licenses or permits. As a general rule, inmost Western countries anyone can set
up in business as an importer. Other than for certain restrictedgoods, in
most countries you do not need a license or permit to be an importer,
although you willusually have to obtain an importer’s registration number which
will appear on all of your customsclearance documents. Your customs broker (or
Air Courier – see “When you do not need a customs
broker” below) knows about this and will obtain the
number for you when your first traffic studio review has to becleared. That registration
number stays with you for as long as you continue importing, and it helpsspeed
up the clearance process.If you can’t find that number on the documentation
provided by your broker after the shipment has beendelivered, I suggest that
you ask for it. It will be of value to you later if you do any clearance
workyourself.In many countries, quotas apply that restrict the volume of
imports of certain items. It may be the casethat such goods may be imported in
unrestricted quantities from certain favored countries. I suggest thatyou make
inquiries with a broker or through your official Customs and Excise (in the
USA, Customsand Border Protection) office at an early stage to ascertain
whether you need licenses, quotas, or permits.
Chances are that you will not have to worry
about goods that might be banned, restricted or subject to
quotas. Few consumer goods would be restricted so you have a
huge scope to choose from. But just incase you think you have a market for
goods a little out of the ordinary, I have included this section on
restrictions.Restricted goods will
obviously include alcohol, tobacco, wildlife products, motor vehicles,
firearms,explosives, and munitions, but other items where quotas or
strict quarantine rules may apply caninclude food, agricultural goods,
fertilizer, steel, clothing, textiles, and footwear.Instead of trying to sort
out the volumes of regulations involved, it would be easier, and probably
safer,to ask a customs broker’s advice in relation to the product type you are
considering. If in doubt aboutwhether you need a license, permit, or quota, a
customs broker can advise you or you could contact yournearest Customs and
Excise office. In Canada and the USA, I have found the Customs office to be
veryhelpful, but in other countries, including most EU countries you may get no
help from them at all. Thatis when you must consult a customs
broker.While I am not giving advice on general business operation, even if it
is not legally required for you tobe registered as a business, it will usually
make it easier for you. You also need to ensure that you knowwhat rules apply
to sales taxes and other income taxes.
A Power of Attorney may be required by your
broker or traffic studio review, and in some countries, even
thepostal service will require that. The purpose of a Power of Attorney is to
give the relevant person theauthority to make declarations to the customs
authorities and to sign documents on your behalf. Onevery important part of
customs regulations that applies in every country is that you the importer ― and
not your customs broker ― will be ultimately responsible for any
breaches of law in relation to theimportation of the goods.For this reason you
need to be sure that your broker is appropriately qualified and licensed.It
would be wise to not only check their license credentials, but also ask for
references and then checkthem.You must be sure that all
information supplied to the broker, air courier, or postal service is true
andcorrect. The Power of Attorney does not extend beyond their role as your
customs broker. This is one
rule you must learn. You are legally responsible for the facts declared in
any declaration lodged forclearance purposes. Even if your broker makes an
error, you are legally responsible.One area that few consider in this
respect is declared value. It is almost universal practice for Asiansuppliers
to under-declare the shipment value, thinking they are doing you a favor.
Chinese supplierswill do it routinely unless at the time of placing the order
you firmly tell them not to. The majority ofimporters insist on them doing
it.It is a serious crime to understate the value. With duty rates in most cases
now being so low, I cannotunderstand why anyone would take the risk. When I
first started importing, average duty rate wasaround 15%. Now that the world is
a global village, average duty rates in many parts of the world arearound 5%
(in the US 5.63%).
Here are a few things to be taken into
account:
Understating the value is illegal and can
result in severe penalties. One of the lesser penalties isthe flagging of your
name and address for thorough inspection of every shipment thereafter, withlong
delays and extra cost often resulting.
Numerous suppliers have also been flagged
for understating values, with the result that everyshipment they send is
delayed at the port of entry.
Customs officials are not stupid; they see
huge volumes of invoices; and they have a good ideaof real values in many
cases.
Unless substantial undervaluing takes place,
with average duty rates now being so low, thesaving would be very small even on
a high value order. Rates are continually falling, mainly dueto Free Trade
Agreements.
The ways you can
get caught are:a) A customs official becomes
suspicious.b) A supplier is known to Customs.c) A competitor might complain.
Not very likely unless you have one or two majorcompetitors who are tracking
your shipments. That is relatively easy to do if they knowyour trading name.
Insisting that suppliers declare full value
enhances your standing with them. They may think youare crazy, but they will
respect you.
You can sleep more soundly.If shipping
documents arrive in advance of the shipment reaching your country, you should
check theinvoice value, and notify your broker if the value is not correct.
3.3 When you do not need a customs broker.If you use international air courier services they
normally carry out customs clearance work for you as anormal part of their
service. They also obtain an importer’s number for you. It is very
important that you
know in advance whether or not the cost of clearance work is included
in their door-to-door service. Seevery important information on this subject in
Chapter 4 - Freight.
Another way to avoid a lot of red tape is by limiting the value of each consignment and having
itshipped via EMS (International Express Mail Service). This service has
different names in differentcountries. Provided you do not exceed a certain
value per parcel, the postal service will do the
calculations for you, lodge the customs
forms, and deliver to your address. All this is usually free ofcharge. You pay
any duty and taxes due when you collect the goods from your postal
service.Check with your Customs and Excise office to find out what is the
maximum value per shipment underthis scheme. For some items entering the USA,
it is $2,500.00 at time of printing, but for others it is only$250.00. The UK
is the toughest one I know of, with a limit of £135. Some countries have
moregenerous allowances and others do not allow any goods to be imported under
such a scheme.
Note:
If you use this scheme, avoid having more than one parcel dispatched on any one
day. You shouldinstruct suppliers to leave at least 3 days
between shipments, otherwise they may be regarded as oneshipment and Customs
would then require you to lodge a Formal Clearance. If that ever happens,
theeasiest course is to call upon the services of your customs broker rather
than attempt the FormalClearance yourself. Believe me; you do not want to try doing
a Formal Clearance yourself. Your brokercan do it electronically in minutes,
but it could take you hours, even if you get it right on the second orthird
try. You will almost certainly get it wrong the first time.The US Customs and
Border Protection Agency publishes online a “helpful guide” that runs to
211pages, but it provides very little practical help and would confuse many
people. I am sure you willappreciate what I have done to simplify the whole
process for you. I only mention this “helpful guide” toshow you the value of
using a broker rather than trying to do the clearance work yourself.
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