Economic Protection

by Era Inventions
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Basically, all goods that go across borders from one country to another (or regions like the European Union) require a customs clearance. Success in global trade depends on many things, but one of your most critical tasks is mastering the complexities of the customs clearance process. 

If not handled well, it can stop you dead on your tracks to a smooth transaction. The main goal of the custom agencies is typically protection.


This translates into many things for the country.  Protection takes in the form of protecting the revenue of the country. In turn, it enhances the country’s economic prosperity by way of ensuring the collection of proper duties and taxes.

It also means the protection of consumers by making sure the product standards are at par. (As examples, it is expected that food products are safe to eat and electrical products will not malfunction.)

The third protection angle is protecting and safeguarding the borders of the country from smugglers, terrorists, and other bad elements that would use the world’s supply chain to harm others.

Clearance process

In the customs clearance process, an importer strives hard to bring his goods into the country of destination without delay, are in full compliance with laws and regulations, and most importantly at the lowest possible cost.

As importer, you will have to pay the import duties of your goods; the amount is the percentage of the declared value that you had paid. This is dependent on the goods’ classification code and country of origin.

There are other fees, as well. 

Customs clearance fee

A broker handles the customs clearance process, completes and files the necessary paperwork on your behalf. He will also act as your expert partner to help assure you your company are still compliant.

An outsider broker’s fee varies depending on the complexity of your products and the services provided.

Inspection fees

Your cargo might be among the small percentage of import cargo that gets physically inspected, and gets delayed for several days in the process. 

However, it is you who will pay for the inspection. These inspection fees vary widely depending on the type, location and scope of the exam done on your cargo.


If your goods are regulated by an agency other than the custom, you may have to pay additional costs and paperwork to clear customs. 

Depending on your product, you may also have to pay additional fees. With the US as example, the following payments may apply. 

Bond payments

You will need to post a bond to guarantee payment of duties and taxes that may be due on your imports. You can secure that bond through your custom broker.

If you import regularly, you might have to buy a continuous bond that covers all imports into the US for the whole year.If your import is sporadic, you can post a single-entry bond for each customs clearance instead.

Payments also include the merchandise processing fee (MPF) and the Harbor Maintenance fee HMF. Both are calculated differently as regards the declared value of your cargo.

Custom brokers 

The main role of custom brokers is to help you navigate the complexities of global commerce. This includes entry procedures, admissibility requirements, HS code classifications, product valuation and the duties and taxes imposed on them.

Since you are the importer, your company is responsible for making proper declarations and complying with regulations from Customs and other agencies. If you ar3 not a licensed custom broker, you need an expert broker working in your behalf.

Broker’s work

As your broker, he needs to move your products for priority trade issue and other government agency reporting requirements. He also needs to review and prepare required documents.

He needs to make sure they are complete and compliant for submission. Likewise, he needs to vet your products for correct classifications and valuation. This is to ensure duty payments are accurate.  He needs to advise you on a number of issues that can save money and time.

He must make sure documents are correct and complete because custom agents could delay your cargo substantially.

Good custom broker

Your shipment will not be delayed and there will be no fines. If the custom entries are incorrect, it can lead to inspections, fines, supply chain delays and, eventually, lost sales.

The stakes are high and it could mean 6 to 7 figure profit loss.

There is a huge, although hard-to-quantify, benefit to entrust this detail work to an expert. He will keep your company compliant and free you up for more strategic work.

It is not realistic to think you can keep up with all the changing laws and regulations that govern international trade. Only the right customs broker will serve as a seamless extension of your organization.

He will guide you through the importing process and even advising on strategic questions.

If you are a small or a mid-sized importer that don’t have their own compliance department, getting a reliable partner to represent you is crucial.

Clearance time

Custom entries are transmitted electronically, and if they are managed well, they can be transmitted even before the goods arrive. 

Typically, the goods are cleared in less than 24 hours, unless there are problems with the entry, or some government agency process is needed, or when an inspection happens. This way your cargo is on its way after it hits the port or airport.

Clearance mistakes

The main culprit is actually improper paperwork and not taking the time and double-checking details before filling the customs entry. The first one is not providing a compliant commercial invoice or missing paperwork.

Your job is to ensure proper paperwork to present to your customs broker to assure a release by Customs. The paperwork should include a commercial invoice, packing list, and transport documents.

Your supplier invoices should be complete and accurate. These should include much of the essential details that Customs need (so it should be right).

Other documents or certificates may be required, depending on the nature of your commodity. The right international freight forwarder and customs broker can also help.

It is going to be difficult to master the complexities of trade compliance and the customs clearance process. At these points, working with an outside expert who knows customs brokerage helps.

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