Савчук. Foreign trade

CHAPTER 7

CUSTOMS PROCEDURES

THE WORK OF THE CUSTOMS

In nearly every country the Customs collect import and export duties, issue export and import licences and collect import and export statistics.

The Customs of importing countries use information on invoices to assess duty. They need to know:

- the value of the goods (excluding transport, insurance and other costs).

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-the country of origin. The goods might be duty free or have a lower duty, depending on whether the exporting country has a trading agreement with the importing country.

-the BTN number. The Brussels Tariff Nomenclature is an international system of classification of goods. It is used because goods have different names in different countries. The number tells the Customs which class of goods they are dealing with.

Licences apply to restricted goods. For instance:

-Some goods can be exported only with a licence.

-The export of some goods is prohibited.

-Only certain kinds of goods can be sent to some countries.

-Exporting goods to some countries may be prohibited.

Statistics are important for the government to know the total value of all goods leaving and entering a country in one month and one year. This information gives the Balance of Trade figures (how much the country is selling compared to how much it is buying) and is provided by the Customs.

Match the words on the left with those on the right:

Replace each phrase in italics with one word from the passage:

(a)Before they charge tax the Customs have to judge the value of the goods for tax.

(b)The population of Mecca is 300,000 not including the people who go there on pilgrimage.

(c)The country where the family came from was India.

Supply one suitable word for each space:

The Customs in most countries have _ main tasks. Firstly they collect import _ and export taxes on goods entering _ leaving the country. Secondly they issue _ to traders to export or import _. Then they also have to collect _ for all trade into and out _ the country.

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The amount of duty _ partly on value, partly on the _ of the goods and partly on their _ of origin. Goods from some countries _ duty free; sometimes the duty is _ compared with the duty on goods _ other countries. Some countries make agreements _ bring down the duties on each _ goods.

CUSTOMS PROCEDURES

Transfer of Goods from the Ports of Entry

Physical examination of the shipment takes place upon arrival of the imported goods at any port of entry. A card is then issued for the goods to enter the yard and a transfer from is prepared. The goods are then recorded in a special register and inspected. After which, the clearing agent guarantees payment of duties and transfers the consignment to the closest Customs Center, authorized to clear the goods.

It is permitted to transfer the goods to any Customs Center or to the free zone areas based on the importer’s request and in accordance with the forms prepared for this purpose (transfer forms), available at the Customs Center. This ensures the safe arrival of the goods to the customs center where clearing procedures take place.

Placing Goods in Bonded Areas

A written request is submitted to the center’s director or any of his assistants to enter the goods into the bonded area. After which a bonded entry declaration form is prepared for conducting the registration, inspection, valuation, auditing, and accounting procedures. The form is then signed by the center’s director or any of his assistants authorizing the completion of the procedures.

The clearing agent then sends the goods to the bonded area with an official written guarantee letter, where customs duties remain pending until clearance time.

Customs Declaration Form

The customs declaration form presented by the consignee should provide details of the specifications of the declared goods (i.e. its value, kind, weight, and quantity etc). The type of clearance form depends on the procedure required by the consignee.

The Article # 58 of the Customs Law stipulates that a customs declaration form must be filled out for all goods, even if they are exempt from duties and taxes. One declaration form is required for cargo accounted for in each manifest submitted by the carrier. It is not allowed to cancel the declaration form after paying the customs duties incurred on the goods.

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What Documents Do You Need?

Every import declaration form should be accompanied by original copies of the following documents:

1.Commercial Invoice of the purchase of commodity from the country of origin. The invoice should state the purchase price, shipping and freight charges, insurance cost and any other expenses incurred on the importer. The invoice should also state, in Arabic, the classification of the goods according to the Customs tariff table, which must be signed by the owner or his representative.

2.Certificate of Origin is conditional in order to provide proof where the goods were manufactured or the country of origin.

An original invoice that includes a certificate of origin must clearly state the

country of origin. It is possible to accept the original invoices that include a certificate of origin issued from parties concerned with the goods, even if they are in a location other than the country of origin.

3.Bill of Lading (for goods entering the country by sea or land) or Airway Bill (for goods entering the country by air) which are certificates of the cargo.

It should include the number of consignments, their kind, trade marks and

numbers, as well as type of goods, their gross and net weight, name of shipper, name of consignee and the country of origin.

Registration of Customs Declaration

Once the necessary documents have been assembled, the importer is ready to begin the clearance process at the Customs Center. The declaration form and the accompanying documents which include the importer`s authorization must be presented to the Customs office where the contents of the declaration form are checked against the documentation and assigned an annual serial number. The serial number indicates that the declaration of the cargo has been officially registered with the Customs Department.

The importer is not allowed to amend or cancel the declaration form without the prior approval of the center’s director.

Inspection of Goods

Once the declaration form has been registered with the Customs authorities, the cargo must be physically examined according to Article 66 of the Customs Law, on the premises of the Customs Center in the presence of the clearing agent or consignee. In some cases, the goods may be transferred to another location for inspection upon the request of the goods` owner. Under such circumstances, any expense incurred in the transfer and inspection of the cargo shall be covered by the individual presenting the declaration form. The inspection procedure includes physical examination of the goods, in compliance with the documents enclosed with the declaration form.

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Under current practices, every cargo is subject to inspection by Customs authorities, with at least 10% of the cargo examined as a representative sample.

The inspection is conducted to:

1.Confirm compliance of the imported goods with the declaration form and the enclosed documents.

2.Determine the value of the cargo for tariff classification and duty assessment.

3.Identify any shortages or overages based on the content of the declaration and the enclosed documents.

4.Determine if there is any damage to the cargo.

5.Check for items prohibited by Jordanian law from entering the country.

6.Verify the description of the cargo in the declaration form.

Laboratory Analysis of Goods & Objections to Analysis Results

Existing laws and regulations require that samples of certain imported items be examined to ensure that they meet the specifications set by various governing bodies before they enter the local market. Article 70 of the Customs Law stipulates that all such products must be inspected by authorized analysts before being cleared by Customs.

Three samples of the goods are taken for analysis to ensure that the quality and the specifications of the goods are in conformity with regulations. Two of the samples are sent to a Customs laboratory and the third is kept at the Customs Center. The importer or the owner of the goods may object to the analysis results within five days from the release of the analysis in front of an arbitration committee. If the presence of the goods is not necessary for the settlement of the dispute, then Customs authorities may clear the goods before completion of the arbitration procedures against a guarantee from the importer.

In certain circumstances, especially where perishable goods are concerned, the importer may request to immediately clear the consignment by posting a guarantee that the goods will not enter the local market until the results of the analysis have been released.

Valuation of Goods

After the declaration has been registered and the goods inspected by Customs authorities, the value of the goods must be determined by a Customs official.

Customs officials may take samples of the goods for laboratory analysis to assist them in determining the value and tariff classification of the goods.

Article 39 of the Customs Law grants the Customs Department the right to reassess the value of the commodity if it is not satisfied with the figures on the declaration form. If the importer is not satisfied with the final value assessed by

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the Customs official, then a claim may be submitted first to the Director of the Customs Center. A second appeal can be made to the Director General at Customs headquarters. It must be noted, however, that the goods cannot be cleared on guarantee or otherwise until the dispute is settled.

Payment of Duties, Taxes and Other Fees

Once the value and the tariff classification of the goods have been determined and the custom duties and fees allocated, the declaration form is transferred to the auditing section where financial figures are verified. After which the form is forwarded to the accounting section where full payment is made in cash or through a certified check in the name and title of the Customs Center accountant, whereby customs duties are levied against official receipts.

Release of Goods by Customs

Once payment has been made and the necessary guarantees posted, the declaration form is forwarded to the Director of the Customs Center or any of his assistants for signature, authorizing the release of goods from the custody of the Customs Department. An exist permit is issued for the goods to be transported out of the Customs Center. Upon loading the goods, the permit is submitted to the authorized customs officer at the exist gate, who in tern groups those permits, giving them to the forms delivery section. The customs declaration forms remain in the warehouse whereby the warehouse officer forwards them to the delivery section after obtaining copies for the consignees.

Public Auction of Goods

The following confiscated goods stored in the Customs yard may be placed in a public auction by the Customs authority without prior notification to the beneficiary of the goods:

∙Perishable goods.

∙Livestock or goods which pose a hazard to other goods.

Certain goods stored in the Customs yard may be placed in a public auction after their beneficiary has been duly notified. Such goods include:

Goods and livestock which, during their storage at the Customs Center, show signs of deterioration, sickness and endanger other stored goods.

Confiscated goods whose value is substantially reduced while in custody of the Customs authorities.

In the event that the beneficiary could not be reached, notice of the auction must

be posted on the billboard of the concerned Customs Center. In such situations, public auctions can be conducted without advertising in the newspapers so long as they are posted on the billboards of the Customs Centers.

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Unclaimed Goods and Luggage

Goods that have been stored in the Customs warehouse, yards or sidewalks for more than three months may be sold in a public auction two weeks after advertising them in one or more daily newspapers. The same applies to luggage left behind by travelers.

Goods Stored in Warehouses

Goods stored in warehouses outside the Customs yard can be placed in a public auction when the storage period ends and the owners do not re-export it or place it in the local market within one month of being notified by Customs authorities.

The owner of the goods must be issued a warning published in one or more local newspapers indicating the name of the goods’ owner, place of auction and a description of the goods.

Canceling a Customs Declaration

The Customs Center may cancel a Customs declaration provided that:

1. Customs duties and fees have not already been collected and/or are subject to dispute.

2. No disagreements, legal cases or Customs contraventions exist regarding the Customs declaration.

3.The cancellation does not conflict with the interest of the state Treasury by reducing Customs duties or due to a fluctuation in the currency exchange rates. To cancel a Customs declaration, the beneficiary of the goods must submit a

request to the Customs Center on a special form, which is registered, given a serial number and attached to a document describing the conditions of cancellation of the Customs declaration.

After the Customs declaration is cancelled with an approval form the Director of the Customs Center, NEW Customs declaration is prepared. The cancelled declaration is attached to the new declaration which is processed. In the event that the goods are transferred to another Customs Center, the cancelled declaration is attached to the goods’ transfer documents.

Cancellation of Declaration prior to goods’ Inspection

If the cancellation request is submitted before inspection of goods, the Customs Center may proceed with inspection of goods in the presence of the goods’ owner.

If any discrepancy is discovered between the goods and their description on the declaration form, then the cancellation of the declaration can only be processed after the dispute is settled.

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Refund of Import Duties, Taxes and Fees for Imports Diverted to Re-Exports

In certain cases, imported goods must be re-exported before entering the local market due to a deficiency or non-conformity discovered in the Customs clearance process. In other cases, the goods’ beneficiary may decide to re-export them because they are not of the specifications ordered in the first place. This will need to be proved by contracts and correspondence between the exporting and importing parties and approved by the Customs authority.

Goods released to the owners pending a final decision by Customs authority on their status will require a guarantee that the goods will not enter the local market until such a decision has been made.

When the goods have been denied entry into the country by Customs, a request for re-export must be submitted to the relevant Custom Center within tow weeks.

The application for re-export must include the following:

1.Type and quantity of goods.

2.Registration number of the import declaration.

3.Number and date of payment of duties, taxes and other fees.

If the request for re-export concerns only part of the goods’ contents, then the

application should also include the following:

1.The brand of the contents in question.

2.The number of the contents in question.

3.The value of the contents in question.

Refundable Duties, Taxes and Fees

The following duties and taxes are refundable:

∙Customs duties.

∙Unified taxes.

∙Municipality and University fees.

∙Additional taxes.

∙General sales tax.

∙Import license fees excluding service fees.

Storage fees, porter’s fees, overtime fees, insurance fees and fees for other services are not refundable. If any amendments on the rates of duties and taxes take place prior to receiving a refund, then the duties are calculated on the basis of the lower rates.

Refund of Import Duties, Taxes and Fees for Imports Re-exported After Customs Clearance

At the request of the beneficiary of the goods, imported goods may be reexported after they have been cleared through Customs for local consumption. In order to do so, the goods must be in their original state with the packaging intact.

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At the time of import, the goods should have been new and not of a perishable nature. In addition to consulting the Ministry of Industry and Trade, the beneficiary of the goods must also ensure that a similar locally produced product does not already exist in the market. A committee will be formed by the Customs authorities to inspect the goods being exported.

Re-export of goods must take place within three months of their import into the country, and the person exporting them should be the same person who brought them into the country in the first place.

CERTIFICATES (ORIGIN, INSPECTION, HEALTH)

Certain destination countries require certificates of origin to prove the country of origin of the goods. Many countries give a preferential tariff for products imported from certain other countries. Conversely, countries that boycott goods from certain other countries will seek an undertaking that goods do not break their import restrictions.

The forms are obtained from a Chamber of Commerce and completed by the exporter. The certificates need to be authenticated by a Chamber of Commerce or by the destination country’s embassy or other representative, or by both. Getting certificates of origin authenticated may take seven working days or more. It may also be a substantial cost to the exporter, and the cost should be anticipated and reflected in quotations.

A certificate of conformity or inspection certificate states that goods comply with standards laid down by the destination country’s authorities in terms of (for example) physical condition, quantity, and technical specification. The goods must be inspected, before shipment, usually at the exporter’s premises, by an appointed inspection body. The exporter must pay for this service, and so should ensure that the cost is allowed for in quotations. For some destination countries, a certificate of conformity is a legal requirement. In other cases, a certificate of conformity is a condition for payment specified in the terms of the Letter of Credit. Shipments without a required certificate of conformity are likely to be impounded.

Health certificates, issued by the Department of Food and Rural Affairs (DeFRA), are required for all shipments of agricultural or fresh meat products.

Phytosanitary and plant certificates, also issued by DeFRA, are required for exports of planting materials, trees and shrubs, and for certain raw fruits and vegetables.

CUSTOMS PROCEDURES

The work of collecting duties would be simpler if all countries charged the same tariffs on goods from all other countries. But there are a number of “Customs

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unions” which are the groups of countries which have agreed to charge less duty or no duty on each others goods. Two well known examples are EFTA (European Free Trade Association) and the EEC (European Economic Community). Austria, Finland, Iceland, Norway, Sweden and Switzerland belong to EFTA. They have reduced all taxes on industrial goods.

The EEC, whose members include Belgium, Britain, Denmark, France Greece, Holland, Ireland and Luxembourg, go further. It has freedom of movement of all labour, goods and capital as well as other forms of co-operation. Also all imports from other countries pay the same duties (common external tariff).

Other groups have been formed with similar aims: ASEAN (Association of South East Asian Nations), LAFTA (Latin American Free Trade Area) and EAC (East African Community).

All EEC exports are pre-entered through Customs. Completed forms have to be lodged with Customs before the goods are shipped.

There are 2 kinds of pre-entry:

1 Restricted goods. They need special forms:

(a)if they have been imported duty free and kept in a bonded warehouse. This applies to goods which have been temporarily imported for later export. They are stored under bond in a Customs warehouse.

(b)If drawback is claimed for goods. Drawback is repayment of Customs duty to exporters. For example, tobacco companies claim drawback on exported cigarettes because they paid duty on the imported tobacco.

(c)If goods are considered dangerous such as guns and animals.

(d)If the goods are shipped in special stowage.

2 Low value and non-negotiable goods do not have to be inspected. Regular shippers obtain a Customs registration number which goes on the SSN, Air Waybill or road/rail consignment note. One of these forms must be lodged with the Customs before despatch.

Write the following out in full:

The EEC; the WHO; the EAC; the UN.

We use “the” in front of them and say the letters. Otherwise we call the organization by the name their letters make together. Write the following out in full.

EFTA; ASEAN; OPEC;UNICEF.

Match the words on the left with the phrase on the right: