A Brief on Customs Brokerage

International trade is regulated through tariffs and trade laws established by the Country’s Federal Governments to control the imports and exports of the country. The Government invests executive powers to the Customs Departments, headed by Custom’s Commissioners to administer the policies and tariffs on all imports and exports into and out of the country.

Customs Clearance Departments are setup in all ports of entry and exit at the Country’s borders including Airports, Sea Ports and Check Posts at Road.

Customs Clearance involves valuation of the goods for their authenticity in terms of both physical inspection as well as value assessment. The Customs inspect the documents submitted to ascertain that the valuation on the Commercial Invoice is on par with the international markets and approve the assessment based on appropriate classification. Once the consignment is assessed, valuation determined the demand for duty is made on the Importer. On receipt of duty payment, the consignment is released out of the Customs bond.

The entire process of imports is governed not only by the Customs Laws, but all imports are required to be compliant with the other relevant Boards and Bodies like Food and Drug Administration, Department of Agriculture approval, Fisheries and Wildlife Department approval etc. While the import consignment is in the custody of Customs, the rest of the tests and approvals would have to be acquired before the customs can release the consignment.

The above process of customs clearance can take from anywhere from one day to seven days depending upon each case. There are several commercial documents that are to be submitted by the Importer and few Custom related documents have to be prepared and submitted to enable customs clearance of the imports.

The customs clearance process and co-ordination with the Customs and other agencies necessitates the services of engaging a Customs Clearance Broker or Brokerage Agency.

Customs Clearance Brokerage Agency is a Third Party Service Agency that is licensed by Customs Department to operate and represent the Importer. Customs Clearance License Holder is required to have passed Customs Test and Examination and is required to be fully conversant with Customs Laws, Rules, and Processes and ensure adherence to the same.

There are several Customs Clearance Service Providers who are specializing in the field. There are many freight forwarder companies including Multi National Companies that own and operate Customs Clearance services for their clients.

The Customs Clearance process requires several documents including commercial documents from the Buyer, Seller as well as bill of Transport from the Transporting Company, Certificate of Origin from the Seller country etc. Besides the Customs Bill of Entry is one of the key documents required to be submitted along with the rest of the documents. These documents are filed electronically from the Customs Broker’s office before the consignment land.

From the time the consignment lands and is warehoused at the Custom’s Bonded Warehouse, there is a free period of three days to seven days (varies from country to country) within which the customs clearance process would have to be completed and the consignment released. If not the consignment then starts accruing demurrage on daily basis and would have to be paid up by the Importer before clearance of the Consignment.

Customs Clearance Agent plays a very crucial role in representing the Importer with Customs and takes the responsibility for compliance of all Rules and Regulations on behalf of the Importer.

❮❮   Previous Next   ❯❯

Authorship/Referencing - About the Author(s)

The article is Written By “Prachi Juneja” and Reviewed By Management Study Guide Content Team. MSG Content Team comprises experienced Faculty Member, Professionals and Subject Matter Experts. We are a ISO 2001:2015 Certified Education Provider. To Know more, click on About Us. The use of this material is free for learning and education purpose. Please reference authorship of content used, including link(s) to ManagementStudyGuide.com and the content page url.