The procedure of shipping cargo goods, across an international border, can be confusing and infuriating. The time-consuming process of customs clearance not only requires a great deal of preparation and documentation but its procedures also vary from one country to another.
While international trade is simpler, the aspect of customs clearance and border security protocols still remains a challenge for many. The primary prerequisite of international trade is to equip the shipper with relevant data and knowledge about the nature of the cargo that is required to be shipped. Alongside, the trade laws, regulations and customs practices, and border security of the country of import/export are the information that requires utmost importance.
What is the type of cargo that you want to ship?
Cargo may comprise of ‘dangerous goods’ that includes explosives, toxic substances, radioactive material, etc. or decaying and organic products that include dairy products, meat, fruits & vegetables. One may also need to check if the cargo is categorised as ‘restricted’ (firearms, flammable, animals, plants, etc.) in the country of import/export.
Such goods can cross international borders on the conditions that the shippers fulfil specific settings related but not limited to labelling, packaging, declaration, and transport & storage data. Also, one cannot ship any hazardous consignment without a Dangerous Goods Declaration. Similarly, if one is exporting food or agricultural produce, they must satisfy the safety, quality assurance and certification requirements of both the importing and exporting countries.
What are the rules and policies that you should be aware of?
The laws and regulations governing foreign trade in a particular market have a bearing on everything, from the goods the shipper plan to ship to the documents that must accompany them. The Customs bodies and other government agencies play key role within the facilitation of international trade. Besides, the shipper must also coordinate for cross-border management & principles to organise the respective regulatory activities.
Secondly, border formalities must be completed with the customs and authorities in both the export and import countries, respectively. Therefore, cross-border coordination is important for a smooth and unobstructed flow of international trading.
Key points for a successful cross-border trading
Customs clearance is a document-heavy process. It requires the importer and exporter to file a wide range of paperwork and documentation, including licences and certificates, and to make sure they are accurate, complete and submitted on time.
Certificate of Origin: Several countries demand a Certificate of Origin for customs clearance, which certifies that a product was acquired, produced, manufactured and/or processed in a particular country
Shipping Bill: Also known as the Bill of Export, a shipper needs this document to export goods by Sea, Air or Surface. In India, a Shipping Bill is submitted electronically in the form of an application of a prescribed format
Bill of Lading: Another must-have document is the Bill of Lading, a contract of carriage between the carrier and shipper, a receipt for shipped goods and a document of ownership of the goods. It must be submitted to the customs at the destination for a final clearance
Bill of Entry: A mandatory paperwork for the clearance of import, the Bill of Entry marks the entry of goods into a country. It is a legal obligation
Import/Export licences: Certain goods cannot be imported or exported without an authorised licence issued by the relevant authority of a country. In India, the Import and Export licences are required for trade-in restricted goods, issued by the Directorate General of Foreign Trade (DGFT)
Free-trade agreements: An agreement between countries that facilitates trade, primarily by reducing tariffs, needs to be established. Also, one must find out the product qualification to benefit from the tariff reductions. Also, the shipper needs to look up the correct Harmonised System (HS) code of the product
Foreign trade rules: Every country has its own set of foreign trade laws and regulations. In Indian government, the main laws leading imports and exports include the Foreign Trade Policy (updated every five years), Foreign Trade (Development and Regulation) Act, Foreign Trade (Regulation) Rules, Customs Act and Foreign Exchange Management Act
Digital customs: With the majority of countries, worldwide, digitising their customs systems, it is vital to know about the Electronic Data Interchange (EDI) Systems that is used for customs clearance procedures and the shipping activities
Additionally, there are government-imposed limits on the value or volume of specific goods that can be exported or imported. Thus, quotas are implemented to keep the prices of these goods low for domestic users. This varies from country to country.
Other than this, the aspects of a Commercial Invoice, Health and Quality Certificates for food products, insurance certificate basis the valuation of the shipping good, Inspection & Declaration Certificate are also to be taken care of. A plethora of relevant information and material about Customs and Trade facilitation is available on the United Nations Centre for Trade Facilitation and e-business (UN/CEFACT) and the World Trade Organization (WTO).
To make such operational and administrative practices more seamless and efficient, Cargo Flash preaches of going digital through cloud-based documentation and operations for a leak-proof, error-free operation. From audits to AWBs and further accounting, the next-generation nGen CRA (Cargo Revenue Accounting) boasts of error-free and cloud-based documentation, which makes the entire operation more comprehensive.
