What's the Difference Between Customs Declaration and Customs Clearance?
When it comes to international trade, understanding the difference between customs declaration and customs clearance is essential. These two processes may seem similar, but they serve distinct purposes and involve different procedures. In this article, I’ll walk you through what each process entails and explain the step-by-step procedures involved in both.
What Is Customs Declaration?
Customs declaration refers to the act of submitting relevant information about imported or exported goods to the customs authorities. Importers, exporters, or their agents must provide details such as the name, quantity, value, and origin of the goods. The primary goal of the declaration process is to ensure transparency and compliance, as well as to enable the authorities to monitor and record trade flows.
This process is one-way — the focus lies solely on the party submitting the information to customs.
What Is Customs Clearance?
In contrast, customs clearance is a more comprehensive process. It involves the customs authorities reviewing the declared information, inspecting the goods if necessary, calculating taxes and duties, and then approving the release of the shipment. It’s a two-way interaction that includes both the documentation submitted by traders and the regulatory inspections conducted by the customs officials.
Simply put, customs clearance ensures that the goods can legally enter or exit the country.
Step-by-Step: The Customs Declaration Process
1. Preparation Stage
First, the exporter and foreign buyer sign a contract detailing the type, quantity, and value of the goods.
Next, the exporter contacts a logistics company to arrange trucking, booking, and customs handling.
Then, the exporter prepares necessary international shipping documentation such as:
Export contract
Commercial invoice
Packing list
Declaration power of attorney
Foreign exchange verification forms (if applicable)
2. Submission Stage
Using the bill of lading and declaration documents, the exporter submits the customs declaration.
Required documents include:
Bill of lading
Original packing list
Invoice
Contract
Customs declaration form
3. Customs Operations
Customs authorities verify the documents, inspect the goods if necessary, assess taxes, and authorize release.
At this stage, accuracy and completeness of documentation are critical.
4. Key Considerations
Double-check product classification and tax codes.
Ensure shipping agents submit the manifest to customs in a timely manner.
Step-by-Step: The Customs Clearance Process
1. Document Preparation
To initiate customs clearance, gather the following documents:
Import/export contracts
Invoices
Transportation documents (such as bill of lading and insurance)
Customs declaration forms
2. Submission and Review
Submit all documents and the declaration form to customs.
Authorities will review the information to ensure it complies with local laws.
3. Inspection Phase
Customs may inspect the shipment physically to verify that the contents match the declaration.
4. Payment of Duties and Taxes
Customs calculates applicable duties and taxes based on the declared value, origin, and classification of the goods.
Once payment is completed, the process moves forward.
5. Cargo Release
Customs issues a release notice. Your shipment is now free to leave or enter the country.
6. Post-Clearance
Collect official documents such as the import/export certificate and declaration confirmation.
In some cases, exporters may apply for tax refunds such as VAT or excise tax based on qualification.
Complete delivery to the final destination.
Conclusion
To summarize, customs declaration is all about submitting the required documents to begin the import export process, while customs clearance involves review, inspection, and final release of the goods. Both are crucial steps in international trade and must be handled carefully to avoid delays or penalties.
Whether you’re new to customs procedures or looking to optimize your international shipping documentation, understanding the difference between these two processes will streamline your operations and improve efficiency.
If you need help navigating either the declaration process or the customs clearance stage, our experienced team is here to assist.
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