International Business

Operations (2MO352)
by Vít Hinčica

Winter term 2019/2020

Lecture No. 9
TOPIC NO. 9

CUSTOMS CLEARANCE
Exporting and importing is not so easy!
• Not because of the incompetence of
forwarders, carriers or other members of a
logistics chain, but because of the bureaucracy
that grows…
• And bureaucracy costs money…

3
 Customs procedures
• Goods brought into the customs territory of
the Community shall be presented to customs
immediately upon their arrival at the
designated customs office or any other places
designated as approved by customs
authorities by one of the following persons:

4
 Customs procedures
1. The person who brought the goods into the
customs territory of the Community.
2. The person in whose name or on whose
behalf the person who brought the goods
into that territory acts.
3. The person who assumed responsibility for
the carriage of the goods after they were
brought into the customs territory of the
Community.
5
 Customs procedures
• Goods shall be covered by a customs
declaration containing all the detail necessary
for the customs procedure. In many countries,
an electronic declaration is possible.
• The supporting documents required for the
customs procedure shall be made available to
the customs authorities together with the
declaration. The following documents are
most frequently required:

6
 Customs procedures
• The following documents are most frequently
required:

 Commercial invoice,
 Packing list,
 Shipping documents,
 Insurance policy,
 Certificate of origin.

7
 Customs procedures
• In the European Community, the Single
Administrative Document (SAD) is used within
the framework of trade with third countries
and for the movement of non-EU goods within
the customs territory.
• For trade within the EU single market
the SAD is not necessary.
• The SAD is also used by EFTA (European Free
Trade Association) countries (i.e. Norway,
Lichtenstein, Iceland and Switzerland).
8
 Single administrative document (SAD)
• A customs form developed by the European Union
(EU) to control the import
and export of goods arriving into and departing from
EU nations.
• The document uses harmonized codes to identify
the countries of origin and destination,
the exporter or carrier, the party(s) responsible
for making the custom
declaration and settlement payments,
an inventory of the goods and the number
of containers.
Read more: http://ec.europa.eu/taxation_customs/customs/procedural_aspects/general/sad/index_en.htm
9
• You must buy it or
print somewhere.
• Better to ask a
forwarder to fill it!

10
 Customs debt
• This term means the obligation on a person to
pay the amount of the import duties (customs
debt on importation) or export duties (customs
debt on exportation) which apply to specific
goods under the Community provisions in force.
• Where no duty exemption applies, the customs
debt is incurred at the time when the customs
declaration requesting release for free circulation
is accepted.
11
 Customs debt
• Customs authorities may require a guarantee
to be provided in order to ensure payment of
the amount of import and export duty
corresponding to a customs debt. A guarantee
may be required from the debtor or from a
third person other than the debtor, but always
only one guarantee in respect to specific
goods or a specific declaration.

12
 Customs debt
• The guarantee provided for a specific declaration
shall apply to the amount of import or export
duty corresponding to the customs duty.
• A guarantee may be proved in one of the
following forms:
 By a cash deposit,
 By an undertaking given by a guarantor (bank
guarantor)
 By another form of guarantee which provides
equivalent assurance.
13
 Customs procedures
• The declarant can be any person who is able
to present all of the documents which are
required for the application of the customs
procedure in respect of which the goods are
declared.

14
 Common Customs Tariff
• Since the completion of the internal market,
goods can circulate freely between Member
States. The 'Common Customs Tariff' (CCT)
therefore applies to the import of goods across
the external borders of the EU.
• The tariff is common to all EU members, but the
rates of duty differ from one kind of import to
another depending on what they are and where
they come from. The rates depend on the
economic sensitivity of products.
15
 Common Customs Tariff
• TARIC, the integrated Tariff of the European
Union, is a multilingual database in which are
integrated all measures relating to EU
customs tariff, commercial and agricultural
legislation.
• Take a look:
http://ec.europa.eu/taxation_customs/dds2/t
aric/taric_consultation.jsp?Lang=en

16
 Origin of goods (1/3)
• Preferential tariff rates are an important part
of the tariff system; usage of them is tied to
the origin of the goods and existence of a
bilateral or multilateral agreement between
the European Community and countries of
origin.
• We distinguish between goods wholly
obtained in a single country or territory, as for
instance:

17
 Origin of goods (2/3)
 Mineral products extracted from their soil or
from their seabed,
 Vegetable products harvested there,
 Live animals born and raised there,
 Products obtained by hunting or fishing
conducted there,
 Used articles collected there fir only for the
recovery of raw material,
 Goods produced there exclusively from the
products specified above etc.

18
 Origin of goods (3/3)
• …and goods, the production of which involved
more than one country or territory. In such a
case, these goods shall be deemed to originate in
the country or territory where they underwent
their last substantial transformation.
• The EU has both conventional preferential
agreements with reciprocal agreements
establishing free trade areas and unilateral with
preference granted by the Community with no
reciprocity.
19
 How to apply for a better rate?
• EUR.1 movement certificate – to claim preferential
duty rates on goods exported to countries that have a
preferential trading agreement with the EC (and vice
versa). For shipments with a value lower than of EUR
6,000, a simple declaration of origin is OK.
• A.TR is a customs document used in trade
between EU members and Turkey, to benefit from
cheaper rates of duty.
• Form A is a document to be presented to the importing
country's custom in order to be benefited from
reduced tariff rates under GSP schemes.
• The applicant is the exporter!
20
 A sample

21
Source: www.chinaimportexport.org
 Value of goods for customs purpose
• The customs value must be determined
somehow.
• The primary basis for the customs value of goods
is the transaction value, corresponding to the
price paid or payable for the goods exported to
the customs territory of the Community.
• Where the customs value of goods cannot be
determined in this way, other (secondary)
methods can be used.
22
 Special customs regimes
• Free circulations can be called as the
„conventional customs regime“. However, with an
authorization from the customs authorities goods
may also be placed under any of these special
procedures:
 External and internal transit,
 Temporary storage, customs warehousing and
free zones,
 Inward and outward processing.
 Temporary importation.
23
 Entry Summary Declaration (ENS)
• A innovation since 2011…
• The carrier, or another person with the
carrier's knowledge and consent, lodges the
entry summary declaration (ENS) for all goods
brought into the customs territory of the
Community.
• Read also:
http://ec.europa.eu/ecip/model_transactions/import/import_scenario/st
ep3_en.htm

24
Entry Summary Declaration (ENS)

25
26
 Certificate of origin
• The Certificate of Origin (CO) is
required by some countries for
all or only certain products. In
many cases, a statement of
origin printed on company
letterhead will suffice. The
exporter should verify whether
a CO is required with the buyer
and/or an experienced
shipper/freight forwarder or a
trade information center.
(Source: http://www.export.gov/)
27
 Export license
• You may also need an export license. This a
document issued by the government of the
exporter‘s country authorizing the export of
specific goods in specific quantities. This
document may be required for most or all
exports to some countries or for other
countries only under special circumstances.
For import, you may need an import license…
(Source: http://www.export.gov/)

28
 ATA Carnet
• The ATA Carnet System is currently in force in
more than 70 countries.
• In China, India and the UAE, the use of Carnets
is limited to fairs and exhibitions.
• Individuals or firms wishing to use a carnet to
move goods in and out of foreign countries
must submit an application and the necessary
collateral to their home national guaranteeing
organization.
29
ATA Carnet

30
 ATA Carnet
• You may apply the carnet on almost all types
of goods:
Commercial Samples
Professional Equipment
Goods for Exhibitions (limited to 6 months)
• Consumable items such as agricultural
products, explosives, disposables and postal
traffic cannot travel under an ATA Carnet.
Source: http://www.atacarnet.com/ 31
What other certificates may you need?
• Fisheries Certificate

• Fumigation Certificate
Source: Google Pictures
32
What other certificates may you need?
• Halal Certificate
• Health Certificate

33
What other certificates may you need?
• Inspection Certificate
• Insurance Certificate
• Radiation Certificate
• Phytosanitary Certificate
• Weight Certificate
• And many others…

34
 See you next week.

Sources used: Sato A., Halík J.: IBO (manual, ISBN 978-80-245-2053-7), SEYOUM, B., Export-import: theory, practices, and
procedures (ISBN: 978-0-7890-3419-9, European Commission, UK Government, International Trade Administration, Corporation for
International Business, Government Digital Service. 35