Custom clearance process

Transportation Services

Before importing or exporting a cross-border shipment, the goods must clear the Canadian customs process. However, to understand the custom clearance process, you must become familiar with a set of rules and regulations in Canada. So, before we try to evaluate the depths of rules and requirements, let’s understand the basic meaning of custom clearance.

What Is Customs Clearance?

Custom clearance involves providing documentation to the customs agency associated with the government. The process then applies the following inspection and approval of goods in transit.  

Step by Step Analysis of Canada’s Custom Clearance Process:

1. Inspection of Document:

After reviewing the paperwork, a customs officer will signal the initial custom clearance process. The paperwork includes:

• The commercial invoice.
• Packing list.
• Purchase order from the buyer.
• Shipping bill.
• Air waybill or bill of lading.
• Certificate of origin.

Further, for incoming shipments, Canada requires a Custom Invoice document.

2. Duty and Tax

The custom broker ensures the collection of duties and taxes based on the shipped type. Custom officers further analyze the custom laws, declare value, and track prepaid charges.

3. Duties and Tax Payment:

The custom officers request payment if the duties and taxes applicable to your shipment are not cleared.

• Delivery Duty Paid (DDP): The shipment is marked as DDP for prepaid tax and duties. The customs broker makes this payment in advance for a clearance fee. 
• Delivered Duty Unpaid (DDU): An independent custom broker receives the shipment marked as DDU to collect the recipient’s due amount. It also includes additional fees such as storage, inspection, handling, disbursement, and insurance.
• Shipment Release: The shipment continues to its final destination once the outstanding duties and taxes are paid. Various transporter companies have “in bond” warehouses that allow shipment to be held through the border till its status is cleared. In other words, the shipper must not rely on the “in bond” beneficial capabilities every time a shipment is supposed to cross borders. 

4. Time Taken for Custom Clearance Process:

The customs clearance process is simple for shipments from outside: 

• Canada Border Services Agency (CBSA) receives the incoming international goods
• CBSA evaluates your paperwork and carries out a visual inspection
• Legal and duty-free packages are released. Whereas goods with duty charges or further inspection requirements are held.
• The shipment is rejected, or duty is applied.

How to Avoid Clearance Delays

To avoid custom clearance delays in Canada, you must provide accurate and complete paperwork to the transporter company. This will help them submit a paper by government officials for clearance and coordinate with your customs broker accordingly. Therefore, experienced shipping and transporter companies like Snapdel can assist in incorrectly submitting paperwork such as cargo value, business information, and inventory. In this way, you can consider custom clearance as your business solution to ensure proper duties and taxes application.