Overview

Are import procedures more complicated than export ones?

Rookie

IINO san

Yeah, that’s right.
There are things like customs duties to pay, too.

That’s something we absolutely can’t afford to mistake.

Rookie

IINO san

It’s really important.
The key is to prepare in advance.

What You Learn in This Topic

• Customs Procedures in Maritime Import

Import Customs Clearance Procedure

Customs clearance for maritime imports proceeded as follows.

1. Receive S/A from Exporter
2. Cargo is brought into the bonded area
3. Confirmation of Shipping Documents
4. Request import procedures to customs brokers
5. Request internal transportation to the Carrier
6. Arrangements for Marine Insurance
7. Paying expenses and preparing for delivery
8. Import Declaration
9. Payments of customs duties and consumption taxes
10. Document examination (cargo inspection, if any)
11. Once the import permit is granted, the goods are carried out from the bonded area

IINO san

This is the overall framework of the import process. One major difference from export is the requirement to pay customs duties and taxes.

1. Receive S/A from Exporter

Once the cargo departs from the origin, the importer receives the Shipping Advice (S/A) from the exporter. S/A includes the following documents:

• Bill of Lading (B/L)
• Invoice
• Packing List
• Permits or certificates required by regulations
• Catalog or Material Safety Data Sheet (MSDS)
• Certificate of Origin, etc.,

IINO san

The consignee can expect to receive it via email around that time when a B/L is issued.

Additionally, a few days before the vessel arrives at the port, the consignee will receive an Arrival Notice (A/N) from the shipping company.

Arrival Notice（A/N）

An Arrival Notice serves as an alert or notification that the cargo is about to arrive. It typically includes details such as:

• Estimated arrival date of the vessel
• Port of arrival
• Container or shipment details
• Instructions for the consignee to make necessary arrangements for customs clearance and cargo pickup

The Arrival Notice (A/N) is sent to the contact information listed in the Notify Party section, often the forwarders or customs brokers. If the importer receives the A/N, they should promptly forward it to the customs broker via email or fax.

IINO san

Isn’t it kinda ridiculous that we still have to deal with faxes?

Yeah, it’d be awesome if things went more digital.

Rookie

2. Cargo is Brought into the Bonded Area

The cargo that has arrived at the port is brought into the bonded area. The bonded area is where foreign goods are temporarily stored before being cleared through customs.

The cargo will be stored in the bonded area until the necessary permits are issued.

IINO san

Although located within Japan, the area is treated as a bonded zone, receiving distinct treatment from the mainland until import permit is granted.

3. Confirmation of Shipment Documents

The importer checks for any deficiencies or errors in the S/A documents. In case of discrepancies or shortages, the importer must promptly report to the exporter to obtain replacement documents.

IINO san

It often discovers mistakes here, such as discrepancies between the B/L, packing list, and the number of goods.

4. Request Import Procedures to Customs Brokers

The importer requests a customs broker for the customs clearance procedures. Then, they verify whether the imported goods fall under the categories outlined in the destination country’s customs regulations and other applicable laws.

Verifying if the goods fall under designated categories in regulations before importing is recommended. If applicable, the consignee has to prepare the necessary documents in advance to get permission.

Early confirmation is crucial!

Rookie

5. Request Internal Transportation to the Carrier

The importer chooses a transportation provider and requests domestic transportation arrangements. In some cases, the customs broker may handle the transportation arrangements on behalf of the importer.

6. Arrangements for Marine Insurance

This is the case where the importer is responsible for arranging the insurance.

Insurance should typically be arranged before vessel loading. But if there are delays in receiving vessel information, it should be completed at least before arrival.

IINO san

Once the importer obtains an insurance premium invoice, they have to provide it to the customs broker.

7. Paying Expenses and Preparing for Delivery

The customs broker pays the shipping company expenses on behalf of the importer. The costs are listed in the A/N, and the contents are like:

・Ocean Freight
・Terminal Handling Charge
・CFS Charge
・D/O FEE
・DOC Fee, etc.

IINO san

Advanced payment is kind of a bad habit, but it’s expected to be corrected in the future.

They even advance the customs duties sometimes.

Rookie

Once the customs broker pays the fees and hands the endorsed B/L to the shipping company, they can obtain the Delivery Order. Then, the customs broker will prepare for the pickup of the cargo.

Delivery Order (D/O)

Delivery Order (D/O) is a document issued by the shipping company that instructs the operator in the bonded area to release cargo. The consignee can pick up the cargo by submitting the D/O to the operator.

IINO san

Simply put, the consignee can get D/O in exchange for B/L if they pay the necessary expenses.

8. Import Declaration

Upon confirming the transportation of the cargo to the bonded area, the customs broker will proceed to submit the import declaration on behalf of the importer.

It must be declared to the customs office with jurisdiction over the bonded area where the goods are stored.

IINO san

The declaration is conducted through an online system, similar to the export customs clearance.

EDI, right? In Japan, it’s NACCS.

Rookie

9. Payments of Customs Duties and Consumption Taxes

To import goods, the consignee must pay:

• Customs duties
• Consumption tax

Generally, this declaration is made through the online system simultaneously with the import declaration.

10. Document Examination (Cargo Inspection, if any)

Customs will review the shipping documents that the customs broker has submitted. If customs deems it necessary, a cargo inspection may be performed.

IINO san

In Japan, there are below three patterns, but it varies from country to country.

(1) Import approval is granted immediately after the declaration
(2) Document examination is performed (submission of shipping documents required)
(3) Cargo’s physical Inspection is performed

IINO san

In many cases, it’s Pattern 1, but if the customs deems it necessary, it could be either Pattern 2 or 3.

11. Cargo Release

Once the import permit is granted, the driver hands over the Delivery Order (D/O) and the permit document to the bonded area personnel and then pick up the cargo.

Indeed, there are more required processes compared to exports.

Rookie

IINO san

Only after going through these processes can the importer finally obtain the imported goods.

Summary

In this topic, we explained the general framework of maritime imports.

IINO san

While specific details may vary from country to country, the overall structure remains the same.

When importing goods, it is crucial to check the regulations of the importing country in advance. It is highly essential to make necessary preparations beforehand.

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 stick in your memory.