10-2. Customs Procedures in Maritime Export

Overview

IINO san

In this topic, we’ll explain the specific steps of customs procedures!

Are export and import flows the same?

Rookie

IINO san

No! Generally speaking, importing is more complicated than exporting because each country has to regulate what comes into their country.

Oh, I see. Then, we will learn about the export process this time, right?

Rookie

IINO san

Yup, let’s start by which is easy to understand.

Learning Points

• Customs Procedures in Maritime Export
• Required Documents

Export Customs Clearance Procedure

Customs clearance for maritime exports proceeds as follows.

1. Preparation for customs procedures
2. Confirming if the cargo requires export permission or approval by competent agencies
3. Submitting the export declaration
4. Transporting the goods to the bonded area
5. Loading onto the vessel
6. Sending Shipping Advice (SA) to the importer

IINO san

This is a general process, but the details vary due to differences in laws, regulations, and processes in each country.

So, you mean, It’s important to check the specific procedures and regulations in each country or region, right?

Rookie

IINO san

Yup! Here, we will provide an overview of the general framework.

1. Preparation

Exporters entrust customs clearance to a customs broker.

When entrusting this task for the first time, the shipper submits a “Letter of Authorization.” This document specifies the request for customs clearance services to the customs broker.

Shippers can handle customs procedures on their own, do they?

Rookie

IINO san

Yeah, but it is advisable to entrust them to a customs broker! Because verifying the accuracy of the declaration with customs, preparing documents, and dealing with regulations can be complex.

I see..

Rookie

Required Documents

・Shipping Instruction
・Invoice
・Packing List
・Product catalog (MSDS, etc.)
・Other required permits

Wao! That’s a lot!

Rookie

IINO san

One of the problems in this industry.

Shipping Instruction (S/I)

A Shipping Instruction is a document the shipper provides to the shipping company or freight forwarder.

It contains detailed instructions regarding the shipment of goods, including information about the cargo, its destination, and how it should be handled.

IINO san

S/I is required for the export declaration, and B/L will be prepared based on this.

Invoice

Packing List

A Packing List (P/L) is a document that provides information on the packaging method, weight, size, and shipping marks on cargo cases. This is also used for customs clearance.

IINO san

In the export process, it is necessary to declare what goods are being exported, the quantity, and the value!

Catalogs or MSDS

Shippers may need to submit catalogs and MSDS when exporting a product for the first time.

MSDS, an abbreviation for Material Safety Data Sheet, contains information about such as the following:

• The material
• Handling precautions
• Applicable regulations
• Other details related to product safety

KEY POINT

The shipper must prepare the following documents for export clearance and submit them to the customs broker.

• Shipping Instruction
• Invoice
• Packing List

If necessary, prepare the following also.

• Catalogs
• MSDS

IINO san

The customs broker sometimes requires a catalog if they are not familiar with the products.

There are customs brokers who can make quick judgments on HS codes, although it may vary depending on the company.

Rookie

2. Verifying if Export Permission/Approval is Needed

Before making a declaration, confirming whether the cargo requires permission or approval in the exporting country is essential.

If the goods necessitate permission or approval, the shipper must complete the application form and gather the necessary documents.

IINO san

This is extremely crucial! Even if the goods are brought into the forwarder’s warehouse without the necessary permission, the export procedures cannot proceed.

Shipper doesn’t get permission right away. So it seems that there will be a storage fee…..

Rookie

3. Submiting the Export Declaration

After checking the shipping documents, customs brokers proceed with export declarations on behalf of the exporter.

The methods for declarations vary by country. The Automated Export System (AES) is utilized in the United States. Similarly, an online system known as NACCS (NACCS) is used in Japan.

IINO san

Many countries abroad seem to use Electronic Data Interchange (EDI). 

That means that most of the countries now declare online, right?

Rookie

Two Deadlines

When submitting export declarations, paying attention to the two cutoff dates below is important.

• Documentation cutoff date
• CY/CFS cutoff date

The Document Cutoff Date is the deadline for submitting shipping documents. The CY/CFS cutoff date is the deadline for cargo delivery.

IINO san

Because of the 24-hour rule, the document cutoff date is a bit earlier.

24-Hour Rule

The “24-hour rule” is a regulation in international shipping, particularly related to the advance notification of cargo information to customs authorities.

In this regulation, customs brokers must submit cargo information to the shipping company at least 24 hours before goods are loaded on the main vessel.

Below are three representative 24-hour rules:

• North America 24-Hour Rule
• EU 24-Hour Rule
• China 24-Hour Rule

IINO san

This 24-hour rule started as a counterterrorism measure in North America. They charge a fee for advance declarations under names such as AFR and AMS.

4. Bringing Goods into Bonded Areas

The exporter transports the goods to a bonded area. The goods are stored there until the export permit is granted.

Where the goods are brought in depends on whether it’s FCL or LCL. FCL is delivered to the container yard (CY), but LCL is delivered to the Container Freight Station (CFS).

LCL cargo brought into the CFS is consolidated with goods from other exporters and, after loading into one container, is transported to CY.

IINO san

The export declaration is sometimes made before the goods are brought into the bonded area.

5. Loadeding on the Vessel

Once the export permit is obtained, the goods are loaded onto the main vessel from the bonded area and depart. After departure, the shipping company issues the Bill of Lading (B/L).

If the shipper/consignee loses the B/L, it can cause issues with import customs clearance. So, it’s crucial to be extremely careful and avoid any mishandling of it.

IINO san

You can read more about B/L in another topic (Lesson 8: Maritime Transport).※ リンクの挿入をお願いします

6. Sending S/A to the Importer

After customs clearance, the exporter sends the complete documents to the importer as Shipping Advice (S/A) before the cargo arrives at the importing location.

IINO san

Please make sure to send the documents to the consignee.

Summary

In this topic, we provided an overview of the general flow of maritime exports. The detailed procedures vary by country.

To ensure a smooth export process, it is crucial to prepare the required documents thoroughly. Additionally, pay attention to handling the Bill of Lading (B/L).

There are many documents to handle, and it involves different parties like the shipper, customs broker, shipping company, and customs, aren’t they?

Rookie

IINO san

The key is to cooperate and work together smoothly.

Take the Test

Reinforce your understanding of this topic by working through the exercises. Attempting the exercises without referring to the material as much as possible is advisable.

IINO san

The act of “remembering” helps it sink in your memory.