Understanding Customs: Authority, Clearance, and Trade
Customs and International Trade
1. Concept:
Authority located in each country to control the entrance and departure of persons, animals, and items inside and outside its territory.
3.2 Mission:
Customs authorities:
- Examine items and animals before entering a country to ensure they follow established rules. These rules are determined by each country’s laws and agreements with other countries. Tariffs may be charged depending on the product or animal type.
Immigration authorities:
- Control the movement of persons for entrance and departures.
- Each country regulates entry requirements through its own laws and agreements with other countries.
3.3 Customs clearance:
- Permission to take goods into or out of a country once customs requirements have been satisfied.
Customs broker:
- A person licensed by local customs after passing an exam covering customs law, classification, tariff schedules, import/export regulations, shipping procedures, and trade documentation. They act as a professional agent for importers or exporters, preparing and submitting all necessary documents.
Customs Agent:
- A party authorized by international customs authorities to certify and manage consignments between countries. Also called a customs and forwarding agent.
Customs Classification:
- A numbered category in a country’s customs tariff schedule to which goods being imported or exported are assigned for the purpose of imposing duties and taxes, and recording international trade statistics.
Customs Documents:
- During customs clearance, exporters or importers must present the required documents to the customs agent to permit the entrance or exit of goods.
Customs Payments:
- During customs clearance, required taxes must be paid. When importing, taxes must be paid before crossing customs.
- Some products are also subject to tariffs, which are paid during this process.
Trade Barriers:
- A government-imposed restriction on the free international exchange of goods or services.
Customs Union:
- Economic areas like the EU do not have internal trade barriers.
- Many trade barriers exist in international business.
- During customs clearance, it is determined if goods meet the requirements to pass through customs.
- An agreement between two or more countries to remove trade barriers and reduce or eliminate customs duties on mutual trade.
- A customs union (unlike a free trade area) generally imposes a common external tariff on imports from non-member countries.
Customs Value:
- The value of imported goods as appraised by customs, used as the basis for assessing import duties and other taxes.
Customs declaration:
- A statement showing goods being imported on which duty will have to be paid.
Customs Bond:
- A statement showing goods being imported on which duty will have to be paid.
- The main purpose of customs bonds is to guarantee the payment of customs duties and taxes.
Customs Entry:
- A declaration of information on imported or exported goods, prepared by a customs broker on a prescribed form called an Entry Form or Duty Entry Form, and submitted to customs.
- It states the customs classification number, country of origin, description, quantity, and value of the goods.