Resources
The commercial invoice functions as a bill of sale between the seller and the buyer. The invoice identifies the product being shipped, country of origin, a full description of the product, its intended use, and commercial value. Download
North American Free Trade Agreement (NAFTA) is an agreement signed by Canada, Mexico, and the United States, creating a trilateral trade bloc in North America. If your shipment is destined for Canada and its value exceeds $1600 CDN, or is destined for Mexico and its value exceeds $1000 USD, you are required to complete a NAFTA Certificate of Origin. This certificate is used to determine if goods being imported are subject to reduced or eliminated duty. Download
Or in Short a Certificate of Origin (CO) is a document which is used for certification that the products exported are wholly obtained, produced or manufactured in a particular Country. It is generally an integral part of export documents. Download
The dimensional or volumetric weight of a shipment is a calculation that reflects the density of a package. A less dense item generally occupies more volume of space, in comparison to its actual weight. The volumetric or dimensional weight is calculated and compared with the actual weight of the shipment to ascertain which is greater; the higher weight is used to calculate the shipment cost.
How to Calculate the Volumetric Weight of Your Express Shipment
The dimensional weight factor has changed to 139 for inches/pounds (5,000 for cm/kg) and applies to all Express Time Definite and Day Definite services.
Customs is an authority or agency in a country responsible for collecting and safeguarding customs duties and for controlling the flow of goods including animals, transports, personal effects and hazardous items in and out of a country.
Depending on local legislation and regulations, the import or export of some goods may be restricted or forbidden, and the customs agency enforces these rules. [1] The customs authority may be different from the immigration authority, which monitors persons who leave or enter the country, checking for appropriate documentation, apprehending people wanted by international arrest warrants, and impeding the entry of others deemed dangerous to the country.
In most countries customs are attained through government agreements and international laws. A customs duty is a tariff or tax on the importation (usually) or exportation (unusually) of goods. In the Kingdom of England, customs duties were typically part of the customary revenue of the king, and therefore did not need parliamentary consent to be levied, unlike excise duty, land tax, or other forms of taxes.
Commercial goods not yet cleared through customs are held in a customs area, often called a bonded store, until processed. All authorized ports are recognized customs area.
Calculation of Customs duty depends on the determination of what is called assessable value in case of items for which the duty is levied ad valorem. This is often the transaction value unless the Customs officers determine assessable value in accordance with Brussels definition.
However, for certain items like petroleum and alcohol, Customs duty is realized at a specific rate applied to the volume of the import or export consignments.
H. S. Code
For the purpose of assessment of Customs duty, products are given an identification code that has come to be known as the Harmonized System code. This code was developed by the World Customs Organization based in Brussels. H. S. Code may be from four to ten digits. For example 17.03 is the H. S. Code for molasses from the extraction or refining of sugar. However, within 17.03, the number 17.03.90 stands for "Molasses (Excluding Cane Molasses)".
Introduction of H. S. Code in 1990s has largely replaced what used to be known as SITC or Standard International Trade Classification, though SITC remains in use for statistical purposes. In drawing up the national tariff, the revenue departments often specify the rate of Customs duty with reference to the H. S. Code of the product. In some countries and customs unions, 6 digit HS codes are locally extended to 8 digits or 10 digits for further tariff discrimination: for example the European Union uses its 8 digit CN (Combined Nomenclature) and 10 digit TARIC codes. Download
International Airport Code List
Customs Terminology Explained
Customs has a language all of its own as well as terminology that can appear a little complicated at times. Our glossary presents some of the more common terms you will come across when shipping dutiable goods internationally.
Ad Valorem
This is a Latin term meaning “according to the value.” All duties and taxes are calculated on the basis of value, so you may see this used quite often.
ATA Carnet
The ATA Carnet is an international Customs document. Issued under the terms of the ATA Convention and the Istanbul Convention, it incorporates an internationally valid guarantee.
The carnet can be used in place of national Customs documents and as security for import duties and taxes. This covers the temporary admission of goods and the transit of goods.
The ATA Carnet can also be accepted to control the temporary export and re importation of goods. However, in this case, the international guarantee does not apply.
Bonded Goods
These are goods stored in a secure warehouse. While they remain there, they are not liable for any payment of import duty. That is, until the duty is paid or the goods are exported or legally dealt with.
Brokerage
Often refers to customs brokerage, where a third party is used for the clearance of inbound or outbound shipments.
Cargo Manifest
A Cargo Manifest lists the goods carried in a means of transport or in a transport unit.
The manifest gives the commercial details of the goods, such as:
- transport document numbers
- consignors and consignees
- marks and numbers
- number and kind of packages
- descriptions and quantities of goods
It may be used in place of the Cargo declaration.
Certificate of Origin
This is a specific document that expressly certifies that the goods to which the certificate relates, originate in a specific country.
This Certificate may also include a declaration by the manufacturer, producer, supplier, exporter or other competent person.
CIF
An abbreviation used in some international sales contracts, when the selling price includes all “Costs, Insurance and Freight” for the goods sold.
This means that the seller arranges and pays for all relevant expenses involved in shipping goods – from their point of export to a given point of import.
In trade statistics, “CIF value” means that all figures for imports or exports are calculated on this basis, regardless of the nature of individual transactions.
CITES
Convention on International Trade in Endangered Species
Consular Invoice
This is a detailed statement of goods shipped, certified by the consulate of a country. It is required by certain foreign governments that want a tighter control over imports.
Customs Declaration
Any statement or action, in any form prescribed or accepted by Customs, giving information or particulars required by Customs.
De Minimis
This is a Latin term and is a shortened version of the expression “de minimis non curat lex” meaning “the law does not care about very small matters.”
It is often considered more efficient to waive very small amounts of duties and taxes rather than collect them.
EDI
Electronic Data Interchange – the electronic transmission of data.
Free Zone
An area within a country (a seaport, airport, warehouse or any designated area) regarded as being outside its customs territory.
Importers may therefore bring goods of foreign origin into such areas without paying customs duties and taxes. This is always pending eventual processing, trans shipment or re exportation.
Free zones were once numerous and prosperous when tariffs were higher many years ago. Some still exist in capital cities, transport junctions and major seaports, but their number and prominence have declined as tariffs have fallen in recent years.
Free zones may also be known as "free ports," "free warehouses," "free trade zones" and "foreign trade zones."
Harmonized System
The international system published by the World Customs Organization that sets out in a systemized form the goods handled in international trade.
Goods are grouped in Sections, Chapters and sub Chapters that are governed by rules.
INCOTERMS
The recognized abbreviation for the International Chamber of Commerce Terms of Sale. These terms were last amended in the year 2010.
Landed Cost
The cost of the imported goods at the port or point of entry into a country, including the cost of freight, insurance and port and dock charges.
All charges occurring after the goods leave the import point are not included.
Phytosanitary Certificate
A certificate issued by a Government agency (usually Agriculture) to satisfy import regulations of foreign countries.
The certificate indicates that a shipment has been inspected and found free from harmful pests and plant diseases.
Preference (or Preferential) Duty
A lower duty rate based on the value of the goods and dependent on the country of origin.
Pro forma Invoice
An invoice provided by a supplier prior to the shipment of merchandise, informing the buyer of the kinds and quantities of goods to be sent, their value and specifications (weight, size, etc.).
UN/EDIFACT
United Nations EDI For Administration, Commerce and Transport.
EDI (Electronic Data Interchange) Standards are developed and supported by the UN for electronic message (data) interchange on an international level.
