Customs

Common Terms in Customs

Physically and legally transmitting goods from a the

Export
boundaries of a country or national territory.

Physically and legally transmitting goods into the

Import
boundary of a country or national territory.

Exportation from a customs territory of goods previously

Reexport
imported into that territory

A method of storing or transporting goods that have

Bonded either already been exported from an national territory,
Storage/Transport or have yet to be imported. The warehouse or truck are
"international grounds."

The act of lawfully importing goods through a recognised

Clearing
import authority.

Any third party who works on behalf of a contracting

Agent party. Most common in customs clearance are "clearing
agents" and "forwarding agents."

Cargo that is held up and unable to be imported to a

Frustrated
country or territory for whatever reason.

Fees that accrue from cargo behind held pre-customs.

Demurrage
Frustrated cargo can greatly increase demurrage fees.
 The physical edge when entering or leaving a country or
Boundary
national territory.

Border The actual physical crossing point of a boundary.

Port of Entry Port through which goods are imported.

The legally required fees charged by governments to

Import
import goods. Each country has vastly different
Fees/Duties/Tariffs
regulations.

When part or all of the import fees and / or process are

Exemption exempted for specific goods or organizations, usually in
response to extraordinary circumstances.

Customs and Humanitarian Aid

Any physical good crossing the national boundary or entering the incorporated
territory of any country is obliged go through at least some level of government
control procedure and formalities. These formalities are colloquially known as
“customs,” however there may be specific agency names for each country in
question. Customs regulations in virtually all contexts will apply to all private
individuals and legally defined entities within the legal remit of the respective
country in question. These legal regulations can have far reaching implications for
violation or failure to comply, including impound and seizure of goods, fines,
arrest and detention and full criminal prosecution. Every country will have its own
standards and regulations pertaining to import or export of goods related to
economic, judicial or cultural mores within the territories in question. Any person
or entity operating in any country for any reason must be aware of these
regulations and endeavour to be in full compliance with them at all times, even if
compliance means following the proper exemption process.

Humanitarian organisations are sometimes at an advantage for the facilitation of

customs clearance in emergencies; not only are registered non-profits frequently
able to apply for some forms of tax or duty exemption in non-emergency settings,
during emergency responses many import regulations on humanitarian
responders are waived or loosened by the countries affected by disaster, or
adjacent countries to the disaster. The United Nations often assumes the lead role
in making appropriate arrangements with governments regarding quick access to
emergency supplies as the physical flow of emergency relief is supplies is
essential in the early days of response. The United Nations through the Office for
the Coordination of Humanitarian Affairs (OCHA) has also developed a “Model
Agreement” (approved by the Permanent Technical Committee in 1996) with the
World Customs Organisation (WCO). The Model Agreement can be adopted by
any country, and lay the foundation for the process of exemptions, streamlining
paperwork, pre-identification and expedited clearance of certain relief items, and
overall smoothing of the import and export process. The Logistics Clusters on
behalf of the UN Resident Coordinator (UNRC)/ UN Humanitarian Coordinator
(UNHC) may try to leverage these advantages for all humanitarian organisations
in an emergency.

Some of the problems encountered by humanitarian organisations during

emergencies are:

Complicated customs procedures causing delays resulting in congestion at

port of entry (airports, road borders, seaports) that affect turn-around time
for feeder vessels and railway wagons, so affecting the flow of goods.
High volumes of emergency supplies flowing into a country causing a bottle
neck to customs.
Complex and non-transparent administrative requirements, often pertaining
to documentation.
High costs for processing trade information.
High level of stress and large number of shipments in a short time, that can
lead to errors in documentation and lack of understanding of import
requirements.

Role of Customs Authorities

Customs relates to both the import and export of material goods. Import and
export were classically limited to the transmission of physical goods across a
legally recognised international boundary, however advances in technology and
changes to trade policy have also grown to include – in some cases - the
electronic transmission of electronic information such as proprietary software and
even intellectual property such as manufacturing processes. Import is the
transport of physical goods into the incorporated territory country, state,
autonomous region, whereas export is the movement and shipment of goods out
of said territory. To manage and oversee the legal and controlled import and
export process, national authorities can and will identify and establish one or a
limited few numbers of customs authorities which operate in the territory of the
country in question and enforce national regulations. Depending on the country,
customs authorities can have different names, and exercise different levels of
both scrutiny and control.

An established customs authority or authorities are by definition the only

government agencies mandated to take full control of trade imports and exports,
however this distinction can be blurry or not fully respected in times of
emergency or civil unrest. Agencies or persons operating attempting to import or
export anything for any reason should be aware of who the relevant authorities
are, and where responsibilities start and end.

As a direct extension of a national authority, a customs office through proactive

enforcement:

Protects the environment, and public safety, health and morality by barring
international trade in illegal substances and materials e.g. narcotic
substances, arms and ammunition, endangered animal species, hazardous
wastes, and expired, counterfeit or sub-standard goods.
Represents the political, economic and security interests of and takes legal
direction from the central authority of the country, state or semi-autonomous
region into and out of which goods flow.
Generates revenue through collection and enforcement of trade tariffs.
Liaises with other law enforcement agencies nationally and internationally to
prevent trans-border crimes e.g. movement of drugs, stolen motor vehicles
and smuggled goods.
Enhances voluntary trader compliance through quality client service.
Facilitates legitimate trade.

In its efforts to achieve, respond effectively and efficiently to the aforementioned

challenges and reduce the gap between expected needs and limited resources, a
given customs authority has to strategically train and inform customs authority
employees, and collect and compile trade statistics and data. Customs
administrations all over the world generally apply similar procedures and
processes, and speed of clearance depends largely on what controls are required
by legislation and the degree to which information and communication
technology is applied.
Duties and Taxes Exemption
In addition to enforcing national laws as regulated by the authorities of each
country in question, customs authorities are also charged with the collection of
duties and tariffs. The nature and types of these costs are variable from country
to country, and are developed by national authorities to raise revenue off key
economic activities, protect national industries, and even prevent spread of
sensitive or security related items. Import and export duties are typically
governed what are called “schedules”; duty/tariff schedules are typically
accompanied by national legislation and are widely published and made available
to commercial entities and transporters. These schedules are typically updated on
a regular basis, and it is the duty of any agency or person importing or exporting
anything to understand and adhere to these regulations.

Customs authorities may also collect certain fees and levies upon importation,
based on agency basis, such as:

Import declaration fees - on imported products.

Revenue stamps - for certain transaction documents which, by law, require
affixing of stamps.
Petroleum development levy - on petroleum products.
Registration fees - for first time importers.

The decision of exempting the goods imported into a country or territory for
humanitarian purposes, from the payment of duties and other taxes, is entirely
the decision of the country's authorities. At the on-set of an emergency,
especially a rapid on-set emergency, there may be ad-hoc pieces of legislation
from national authorities that impact the importation or duty process, ideally
waiving duties or significantly easing the importation process. Because of their
ad-hoc nature, these changes usually lack detailed instructions on the practical
implementation. The absence of guidelines on how to apply ad-hoc legislation is
due to the fact that most countries are not ready for emergencies in the specific
area of customs.

Whether a specific donated item or commodities can be imported into a country

without any tax payment depends on the local government's decisions about:

National humanitarian aid import policy.

Goods qualified under that policy.
Actors granted with tax-free status.
It is essential that donors and decision-making organisations at origin are aware
about the implication of taxes on operating costs as they develop their response
strategies.

The customs authorities might not qualify every single entity as “of public
interest” or “charitable” and grant the duty waived privilege associated with it.
Humanitarian organisations dealing with local counterparts, must make sure that
the local counterpart receiving the goods is a registered duty-free entity, and if
local exemption is required, that their counterpart is the one taking care of the
application for duty exemption and supplying all required documentation. For that
purpose, the local counterpart must have the capacity to know the procedures,
focal points and regulations within their administration, in order to lodge the
application correctly. If they have not got this specific knowledge (what
commodities are prohibited or restricted, quotas, etc.) or are just not familiarised
with the requirements and paperwork, it is useful to ask advice at local ministries,
other NGOs already operating, customs brokers, and tax experts. There are
certain items globally that tend to cause more scrutiny than others, and may
require special certification. Though regulations are country specific, exporters
and importers should pay close attention to the following categories when
planning response activities:

Medicines and medical equipment – Countries tend to maintain an essential

medicines list which denotes what may be restricted
Vehicles and vehicle/machine parts – Regulations on vehicles may be used to
protect local markets
Communications equipment – Radios, satellite phones, VSAT, or even basic
computers and smart phones
Dual use items – Any item that could have perceived military uses, such as
bullet proof vests or remote detection equipment
Alcohol and tobacco products

There is a common misconception that exempted goods/materials are free from

customs formalities. As any other type of cargo, all the relevant operations must
be carried out by the persons concerned and by customs in order to comply with
the customs law. Every shipment must be documented, and in the case of the
exempted goods/material, this includes an additional requirement, which is the
certification or proof of its status as exempted.

Entities Involved
As goods flow out and into countries, there are a number of parties who may
come into contact with or be involved with the handling and clearance process. A
non-exhaustive list of parties who may be involved with customs import and
export are:

Shipper – Any individual or legal entity who is coordinating, paying and/or legally
acting as the owner of goods moved from one point to another.

Consignee – Any individual or legal entity who receiving a shipment. For

international shipments, consignees must be legally registered in the country of
reception, and are ultimately responsible for the paperwork, legality and
reception of cargo. A consignee and a shipper can be the same entity. Cargo is
legally in the name of the consignee, however depending on the contractual
shipping arrangements, a third party may pay customs authorities directly for
fees and duties, and may even pick up cargo at points of entry into a country.

Notify Party – Any individual or legal entity who is notified once an international
shipment has arrived. Notify parties can be the consignee, or they can be
identified third parties responsible for the clearance process. Notify parties don’t
need to be legally registered in any country, but should be in contacted with the
consignee.

Customs Brokers / Clearing Agents – Clearing agents and brokers are

individual or entities who facilitate the movement of goods through the customs
process. Usually, they are private for-profit service providers who have some form
of accreditation to facilitate customs in specific locations and contexts. Brokers
and agents should be very familiar with customs procedures and spell out all
paperwork needs. They also usually work on commission or for fees.

Independent Inspection Companies – Companies who conduct, visual,

physical and even laboratory testing of incoming cargoes. Inspection companies
are usually legally separate from the national authorities, and agencies
undergoing clearance usually are expected to pay for inspection costs.

Ground Handling Agents – Companies or entities that are tasked with moving
cargos on and off vessels, and around customs facilities. Costs for ground
handling may be built into contracts, or directly billed towards the clearance
process.

Freight Forwarders – Depending on the terms of the transport contract, freight

forwarders may be directly responsible for customs clearance, acting as clearing
agent.
Customs Authorities – Agents and direct representatives of the respective
customs authorities in question. Depending on the contexts, customs officials
may be heavily involved with every step of the process, or may outsource the
process to other third parties. Customs authorities will have ultimate say on the
process and legality of imported and exported goods.

Other respective governmental authorities and departments – Many

government agencies might play a part in the import and export process,
depending on the item, the circumstance or the parties involved, these entities
might include the Ministries of Health, Agriculture, Ministry of Foreign Affairs,
Ministry of Finance, Disaster Mitigation unit/office, Ministry of Communication,
Military and Civil defense, or other involved parties.

Common Concepts

Harmonised Customs Procedures - Though regulations vary from country to

country, there has been an effort to develop a standard nomenclature and
numbering convention led by the World Customs Organization the (WCO). The
more than 200 member states of the WCO have agreed on what is called a
Harmonised Commodity Description and Coding Systems, or frequently referred
to as the Harmonised System (HS) for short. The HS process has also been
adopted and backed by the United Nations, through the Kyoto Convention or
International Convention on the Simplification and Harmonisation of Customs
Procedures (Annex J, Chapter 5, specifically deals with relief consignments). Last
updated in 2017, the HS codes allow customs authorities and exporters/importers
support clearance of goods through simplified and harmonised customs
procedures, thus facilitating international trade. Shippers can learn more about
the HS process and look up HS codes for specific products on the WCO’s online
system.

HS codes are six digits long, and are derived directly from the WCO's
classification system, however many countries use eight or even ten digits to
accommodate both regional and national legislation. The structure of the HS
codes is derived from:

Chapter Heading Sub Heading Region Specific Codes Country Specific Codes
 94 04 21 00 00

Furniture Mattress Of cellular rubber or plastics Region Specific Country Specific

International Commercial Terms (Incoterms) – In the customs process

Incoterms denote at what physical point cargo may be delivered to and who bears
the responsibility for clearing customs. Incoterms range from the importer having
to do all the work regarding transport and clearance (FCA) all the way to carriers
clearing customs on behalf of the receiving agency and delivering to a named
place inside the country (DDP). For information on international trade, see
International Commercial Terms used in international contracts of sale.

Bonded Storage / Transport – a bonded storage facility is any facility that

holds cargo that has not yet been cleared for import into a country, or cargo that
has been pre-cleared for export from a country. In real terms, the inside of a
bonded facility “international territory” for any cargo stored there. Bonded
facilities are usually highly regulated and guarded, and penalties for removing
cargo from a bonded facility without proper clearance can be very high. As cargo
is imported into a country, usually customs authorities keep cargo in a bonded
facility of some kind prior to clearing customs. Third party companies may also
maintain bonded facilities if they have special arrangements with their respective
customs authorities, or they operate in some kind free trade zone.

Any time cargo in a bonded facility must be moved from one place to another
without undergoing proper clearance, it must be transported with ‘bonded
transport.’ The concept of bonded transport is the same as bonded storage – the
items are not technically cleared for import, nor have duties been paid on them
and as such bonded transport his highly regulated.

Demurrage – Demurrage is the accrual of fees on any cargo items that are left in
the holding of a customs authority or air/port side operation after a pre-defined
time. Cargo that arrives via air/sea/land border is usually given a specific period
of time to undergo clearance without additional charge. The duration of the free
of charge period and the daily/hourly rates varies location to location, and is
negotiated between the national authorities, the company/authority authorised to
run the air/seaport, handling agents, and the transport companies. Demurrage
accrued from air and railway shipping typically begins with 1-3 days, while
demurrage accrued sea shipping can start as late as two weeks after arrival.
Importers should be aware of what their demurrage rates can be, as long-term
delays can lead to significant costs.

Reexport – any time a cargo is imported into a country and then shipped again
to another third country, it is defined as a “reexport.” Importers and exporters of
goods must be aware of how reexports impact their operations. Governments
may have import/export restrictions on specific good coming from or going to
specific countries, either through regional politics binding international sections.
Many governments view a reexported item as the same as coming from its
original country, even if it passed through a different country in-between.
Unwitting importers may accidentally import/export banned commodities, which
can have legal and financial repercussions on both the consignee and the shipper.

Frustrated Cargo - Any shipment or cargo undergoing the customs procedure

that is stopped and prevented from release for any reason. Frustrated cargo could
be held up due to improper documentation, failure to meet payment, and
attempted import of regulated or banned goods, and usually requires further
disposition instructions or additional paperwork.

General Customs Process

Prior to importing goods, agencies should conduct a thorough analysis of all

customs guidelines and requirements, including any restrictions and the
necessary documentation. Clearing agents/customs brokers and national
authorities can help guide importers on the steps and documentation required. In
emergencies where a national Logistics Cluster is activated, participating
members can also share import relevant information as needed. In any situation –
emergency or not – there should be a clear understanding of what steps are
required and a clear plan of how to move.
It should be noted that this process may be altered in the face of rapid-onset
emergencies, but not always.

Upstream Planning
As the need for international shipments develop, there are key steps that any
organisation or entity initiating shipping will need to undergo. Response
organisations acting as exporters/shippers will need to take key actions to obtain
information and coordinate shipments:
 Receive specific information about the required
shipment – Quantities, specific item types,
required dates, and more.
Clarify import/export regulations into and out of
the countries relating to the shipment.
Identify delivery terms, Incoterms and which
parties are responsible for what stage of the
customs process.
Data Required from Identify all documentation needs with the
Requestor/Receiver receiver and provide advanced copies to the
consignee or customs agent before the
shipment.
If budgets are signed off by either or both
parties, communicate potential costs for
clearance and shipping.
Establish viable transport methods (air, sea,
road, rail) and identify delivery locations and
dates.

Work with vendors to properly identify HS

codes, and fulfil all documentation, packaging
and labelling needs.
Understand national and international
regulations surrounding both regulated or
banned goods, and legalities around countries
of origin/destination.
Shipment Preparation Include physical copies of all required customs
and Organization clearance documentation with the shipment.
Ensure all required documentation is available,
and (where available) double check physical
cargo so that items, quantities, and dimensions
match documentation.
Solicit, identify and contract with a transporter,
freight forwarder or other certified entity
familiar with customs.
 Work with respective program and operations
teams to identify routine response activities
and pre-define cargo that will likely be used in
response activities.
For propositioned stock, it is possible to pre-
identify HS codes, shipping documentation
needs, and screen against country level import
Strategies for regulations (example – WHO approved
Emergency Response medicines list).
Organisations Solicit and identify third party vendors who can
rapidly provide the specific products required
for response, and make agreements that
include documentation and labelling needs.
Develop agreements with forwarding agents
and shipping agents to provide rapid transport
service and information on customs and
infrastructure bottlenecks.

Downstream Planning
An organisation or an entity acting as importer or consignee intending to receive
a shipment should also take steps to properly prepare and identify needs.
 Any organisation used as a consignee for any
shipment must be legally registered in the
country of importation. The registration process
varies from country to country.
Wherever possible consignees should avoid
listing single individuals as consignee, or using
abbreviated or acronyms for agencies as
consignee names.
If necessary, solicit and enlist the services of a
clearing agent/company that is duly registered
and licensed by the customs authorities to
Defining the process the import documentation through
Importation Process customs.
Work with national authorities (customs, health,
bureau of standards, border security) and/or
contracted clearing agent to identify import
regulations and requirements and share with the
exporter/shipper.
Work with national authorities and/or contracted
clearing agent to understand all tariffs, duties,
fees and possible exemptions.
Define with the exporter/shipper the Incoterms
and limits of responsibilities with the forwarder
and/or contracted transporter.
 If the importer/consignee is also the requester,
the importer/consignee should endeavour to
provide as much information on the required
cargo to the exporter/shipper as possible.
Prepare for receipt, storage and inspection of the
consignments in country.
Understand the entry points and bottle necks
associated with customs clearance.
Have all documentation ready before
consignment arrives.
Preparing to Receive Expedite clearances where possible by pre-
Shipments clearing using advanced copies of
documentation.
Track shipment and know when it arrives in
country to avoid demurrage or lost cargo.
Pre-identify transport to remove cargo from
customs, ideally planned around the size of the
shipment. Have adequate storage or down-
stream deliveries planned as well.
As soon as consignment arrives, arrange for
inspection and clear the consignments through
customs.

Temporary importation for use of items and re-

exportation at a later date.
Provisional customs release pending perfection of
the documentation at a later pre-defined date,
e.g. pending exemption letter, certain permits.
Possible Customs
Entry of re-exported cargo.
Specific Regulations
Entry of transit cargo, under security bonds.
for Importation
Re-importation of cargo after temporary
exportation for repair of maintenance.
Seizure and destruction of prohibited cargo.
Customs penalties/fines for incorrect declaration
by consignees or their appointed clearing agents.
 Liaise with programming and operational teams
to assess needs, and use assessment outcomes
to validate needs.
If possible, apply for authorities and waivers for
Strategies for
the exports and the imports.
Emergency Response
Attempt to expedite exemptions. Where
Organisations
exemptions are already given, immediately
authorise shipment of consignments ensuring all
the correct paperwork is in place and that the
shipping instructions are appropriate.

Documentation
The import process usually requires specific, and at times substantial
documentation.

In emergencies, the authorities will usually ask for originals or copies of the
following documents:

Commercial / Proforma Invoice – Indicates an overview of the contents of

the shipment and the party responsible for procuring / paying for the cargo.
Invoices typically list a total cargo cost which can be used for customs duty
purposes. Many humanitarian agencies prefer to use self-generated
proforma invoices to specifically indicate that the cargo will be used for
humanitarian aid.
 Packing List – Should be detailed and accurate enough that customs
officials don’t need to inspect every item. Packing lists are typically far more
detailed than invoices when shipments have a large number of line items.
Bill of Lading / Airway Bill / Rail Waybill / Trucking Waybill.

Other Import documentation often required:

Letter/Certificate of Donations and/or Humanitarian Goods - Many

agencies will included self made letters of humanitarian intent or donation to
help facilitate the customs exemption process.
Proof of duty exemption - May be required at the time of clearance,
usually a registered humanitarian agency should be able to obtain some
form of letter from the relevant tax revenue authority. A letter may be
required for every import, however.
Certificates of Origin (COO) - Usually generated and certified by the
manufacturer, but can be done by the sending agency if required. Some
countries have strict source origin requirements.
Certificates of Inspection (COI) - COIs are usually associated with
regulated commodities that may be consumed by humans - example:
Medication - or may have adverse effects on human health - example:
flammable plastic shelter material. COIs typically require certification from
an outside laboratory testing facility, certified to test the specific chemical
properties of the items in question.
Certificates of Conformity (COC) - COCs are used to confirm that
products meet or exceed a certain industry standard, and require inspection
by outside testing and certifying companies.
Phytosanitary Certificates - Certification attesting that imported plant
based material meets the sanitary requirements of the country in question,
usually from an outside laboratory.
Special handling instructions (dangerous goods, cold chain, drugs, food).

Port of Entry Procedures

Most large seaports and international airports have the capacity to carrying out
customs inspections, storage and clearance on site. For customs clearance to be
official, there will need to be offices designated to the relevant customs authority
and space for storage of goods undergoing customs.

The main formalities connected with the handling of goods by authorities in the
export or import trade are as follows:
 1. Before any cargo is has a copy of the cargo manifest/packing list and
BOL/AWB must be delivered to the relevant customs and port/airport
authorities.
2. When cargo is discharged and offloaded from the ship/aircraft, it will be
counted by a designated agent on the ground.
3. Wharfage and/or ground handling fees at the prescribed rates is levied on all
goods arrived.
4. Goods not removed from the custody of the customs authorities within the
free storage period allowed are charged rent at the prescribed demurrage
rate.
5. Demurrage will be charged on any un-manifested cargo not removed within
the prescribed time after delivery.
6. Failure to cover demurrage fees may ultimately result in cargo being sold at
public auction.
7. Demurrage fees may be waived in cases of:
1. Goods arriving in a damaged condition for which a claim is made
against the carrier, some extension of free time may be allowed to
enable a survey of the damaged cargo to be made.
2. Goods damaged subsequent to offloading and for which an "Application
for Survey" has been received by the port authorities.
3. Goods are detained by the customs authorities for special examination,
chemical tests, etc.
4. Removal of goods is delayed due to no fault or negligence on the part of
the importers.
8. Areas used for the offloaded and storage of imported goods must be
declared as Customs Areas under a Customs Act, and usually are bonded,
highly secure facilities.
9. Storage of hazardous cargo will be permitted only in locations specially
designated for that purpose.
10. Examination of cargo by Customs will be permitted only if the consignee or
clearing agent produces to the port authorities the delivery order issued by
the shipping agent together with the Bill of Entry prepared on behalf of the
consignee.

For cargo arriving by air:

Larger airports usually provide facilities inside designated Customs Areas for
transit cargo to be de-consolidated and consolidated with local export cargo.

For arriving by sea:

 In the case of containerised cargo, containers may be unstuffed in the port
area before the cargo is presented for examination by Customs.
Alternatively, containers may be taken to an inland container depot, or
warehouse, or factory of the consignee where they are unstuffed and
delivered to the consignee after completing Customs formalities.
Carting or transporting of export cargo, if it is Break Bulk, is permitted at the
berth where the ship is ready to load. In the case of containerised cargo,
carting is permitted to the location assigned to the shipping line by the port
authority.
Like imports, exports attract demurrage after the expiry of free time but port
authorities sometimes waive this charge in the case of special cargo. Ports
may defer acceptance of export cargo if there is a delay in the arrival of the
vessel.
When export cargo is taken to an inland clearance depot, Customs
formalities are completed there and the cargo is stuffed into containers,
which are then brought to the port for direct loading onto the ship. The same
procedure may also be followed if containers are stuffed at the factory or
warehouse of the shipper.

When planning arrival of cargo, it is extremely important to know if customs is an

option, especially in post rapid-onset emergencies. There may be instances where
planes or boats may be physically able to arrive at a seaport or airport, but not
actually able to legally import goods.

Clearing Goods
The following steps detail the process through which cargo is handled and
inspected by customs after arrival and offloading:
1. All imported cargo must be offloaded at a designated Customs port and
should not be removed from customs control without written permission of
the customs authorities.
2. Before permission is given to remove goods from customs control, the owner
or agent acting on the owner’s behalf is required to submit documentation
as required by law, in the prescribed form to enable customs authorities to
examine the goods. The specific cargo details must match across all
documents.
3. When goods are destined for bonded warehousing, application for
permission to warehouse those goods and a bond must accompany the
documentation.
4. Customs authorities are empowered to examine all imported goods. The
examination may be physical (visual inspection, counting, weighing,
measuring, chemical test, etc.) or documentary (involving examination of
relevant documents such as invoices, bankers' notes, insurance policies and
forms listing the quantity and description of goods).
5. If goods are dutiable, either customs tariffs must be paid at the time or the
importer must give a bond to guarantee payment of the duty.
6. If goods are not removed within the prescribed period after the arrival of the
importing vessel or aircraft, they are liable to be sold at public auction by the
port authorities who will recover from the sale proceeds all charges due to
them, including customs duty.
7. Customs authorities are entitled to recover from the importer any shortfall in
duty levied or erroneous refund of customs duty, in accordance with
prescribed procedures and laws.
 8. In cases where import licenses are required, customs authorities will check
the legality of the imported goods against those licenses.
9. Once the local customs authority has deemed all paperwork and payment
sufficient, the consignee or consignee's acting agent will be able to pick up
cargo from the designated cargo facility.

Customs authorities will use paper copies of all associated documentations - and
depending on the context and the capacity of the customs authority, electronic
copies - to identify cargo going through the physical inspection process.

If the importer or the customs broker acting on their behalf fails to obtain
paperwork by the time customs clearance should begin, the submission
procedure will be delayed, and the release of cargo will be delayed or not happen
at all. The consequences of frustrated cargo result in delays in the delivery to
beneficiaries, or additional costs such as demurrage. Within a short period of
time, large amounts fees can accumulate for which the receiver is held
accountable.

Methods of Payment in
Import/Export

Letters of Credit (LC) - A letter of credit is an undertaking by a bank to make a

payment to a named beneficiary within a specified time, against the presentation
of documents which comply strictly with the terms of the LC. The parties to a LC
are usually a beneficiary who is to receive the money, the issuing bank of whom
the applicant is a client, and the advising bank of whom the beneficiary is a client.
Almost all LCs are irrevocable, they cannot be amended or cancelled without prior
agreement of the beneficiary, the issuing bank and the confirming bank, if any.
Typically, the documents a beneficiary has to present in order to receive payment
include a commercial invoice, international waybill of some kind, and insurance
documents. However, the list and form of documents is open to interpretation and
negotiation, and there might be requirements to present documents issued by a
neutral third party evidencing the quality of the goods shipped, or their place of
origin.

Electronic funds transfer (EFT) - An EFT refers to the computer-based systems

used to perform financial transactions electronically. Most governments and
customs authorities will prefer EFTs, and usually have a designated bank account
for all deposits. A government managed bank account has the advantage of
enabling transparent monitoring of funds transfer,.

Cash Payment - In very rare circumstances, customs authorities will request

cash payments. Though it is becoming less common, cash based payments can
occur, especially in the aftermath of rapid onset natural disasters. Wherever
possible, cash payments customs clearance should be avoided as they are hard
to trace and may lead to fraud. If a cash payment for customs is required,
organisations should request a receipt in full, detailing what each individual fee
was for and the official within the customs authority with whom the transaction
occurred.

Order of Payments and Risk

Payment In
Open Account Documents Collection Documentary Credit
Advance

Least Secure Most Secure

Payment In
Documentary Credit Documents Collection Open Account
Advance

Payment in Advance - All import duties, fees and handling charges are
paid in advance. In the event there are changes to the items, quantities or
the overall anticipated fees are incorrect, the entity paying up front bears
additional risk. If payment in advance is required, importers should try to use
a letter of credit.
Documentary Credit - The technical term for letter of credit.
Documentary Collections - Instruction from an exporter (seller or supplier)
to a remitting bank, normally the exporter’s local bank, to collect payment
immediately or at a future date from an importer (buyer) against delivery of
 the relevant commercial documents. Documentary collections function like
a letter of credit, however the burden of documentation and values are
supplied by the seller/exporter. Importers should still monitor these
communications to ensure agreed upon costs are still being used.
Open Account - An agreement between an importer and an exporter
whereby goods are supplied on the understanding that payment will be
effected at an agreed future date. Payment can be made after goods have
been imported. This method is used when there is a high level of trust
between exporters and importers.

Customs Tools and Resources

Templates and Tools

TEMPLATE - Certificate of Origin

TEMPLATE - Donation Letter

References
Country specific customs information can be found at the Global Logistics
Cluster, Logistics Cluster Assessment (LCA) country pages.
Customs Model Agreement Between UN and State
Kyoto Convention. Cp. 5 Annex J - Relief Consignments