What are customs procedures? What steps does the process include?

Customs procedures, one of the mandatory tasks that must be performed when exporting/importing goods. So what is customs procedure? What steps are included? What to keep in mind when doing customs procedures. Let’s find out more details with Viet Linh in the article below.

What are customs procedures?

According to the 2014 Customs Law, customs procedures are the work that customs declarants and customs officers must perform according to the law for goods and means of transport. To ensure that goods and means of transport are exported or imported across borders, customs procedures are one of the mandatory tasks that must be performed. The purpose of this is:

• The Government has a basis to calculate and collect taxes from businesses
• Used to manage goods, ensuring that goods leaving from or returning to Vietnamese territory do not belong to the list of goods banned from export.

Export customs procedures include

The export customs process includes 6 different steps. Details of each step are as follows:

Step 1: Determine the type of exported goods

Not all products are allowed to be exported to foreign markets. Therefore, when exporting a certain item, it is essential to to check whether it is on the list of prohibited exports or not, and which export category it belongs to. Based on Decree No. 69/2018/ND-CP dated May 15, 2018 of the Government, it is intended as follows:

• Commercial items: this group of items is not banned from export and export procedures are not too complicated or troublesome
• Prohibited goods: This is a group of goods that cannot be exported to foreign markets.
• Group of goods requiring an export license: For this group of goods, when carrying out export procedures, traders and enterprises need to apply for a full license. Some groups of goods that require an import license include: Modern medicines, seeds, animals and plants, mineral samples, wood and products made from wood, liquids, cosmetics, charcoal, books and newspapers, hard disk.
• Groups of goods requiring specialized inspection: Normally, imported goods will be subject to specialized inspection by authorities rather than groups of exported goods. In fact, there is still no specific regulation on the list of items that require specialized inspection when exported abroad.
• Goods subject to export tax: To be able to export goods, traders and businesses need to pay full tax in case these items are subject to export tax.
• Group of goods exported by quota: It refers to a group of goods that are limited in quantity, volume or value when businesses export abroad.

Step 2: Sign foreign trade contract

Sale Contract, also known as foreign trade contract, is a contract agreement between two parties, the exporter and importer. Some important contents that need to be expressed in foreign trade contracts include: Name of goods, quantity, price, delivery conditions, packaging method, payment method, other agreements between buyer and seller,…

Step 3: Prepare a set of export documents

The set of export documents includes documents such as:

• Sale Contract (Foreign trade contract)
• Commercial Invoice (Commercial Invoice)
• Packing list (Goods packing slip)
• Booking note – Is the recording of the cargo owner’s shipping company reservation for the purpose of transporting goods.
• The receipt confirms that the container has been landed at the port.
• Other types of licenses depend on the exported goods.

Step 4: Declare and transmit the customs declaration

Based on the available data from the set of documents, the customs declaration officer will now enter the electronic customs software to enter data and create the customs declaration.

For businesses exporting goods for the first time, a number of additional tasks need to be performed, including:

• Buy digital signatures from reputable companies such as Viettel, VNPT, BKAV, Thai Son…
• Register digital signature with the General Department of Customs (VNACCS system).
• Download and install electronic customs declaration software. Currently, Thai Son company’s ECUS electronic customs declaration software is the software used by the majority of businesses.
• After successfully installing the electronic customs declaration software, businesses proceed to declare shipment information into the software. After transmitting the customs declaration, print the declaration and continue with the procedures at the customs branch as per the steps below.

Step 5: Prepare customs documents

After successfully completing customs declaration on electronic customs declaration software, the enterprise’s customs dossier will be divided into 3 streams including: green stream, red stream and yellow stream. Each stream will have different regulations on procedures and required documents. Specifically:

Green stream declaration

Goods are accepted for electronic customs clearance immediately upon transmission of the declaration and are assigned to customs channels. When the declaration is classified as green, businesses need to prepare a number of documents to bring to the customs authorities, including:

• Unloading goods
• Barcode sheet (printed from the website of the General Department of Customs)
• Infrastructure fee (only applicable at Hai Phong port).

Customs will initialize and in some places even stamp internally on the back of the declaration, at which point the business can submit it to the shipping company.

Yellow stream declaration

If the channel classification result is the yellow channel, the enterprise needs to prepare paper documents according to the provisions of Circular 38 (amended by Circular 39). Then bring this set of documents to the customs department to be checked by customs officials.

Red stream declaration

In case the channel classification result is a red channel, the customs authority will conduct a detailed inspection of the documents and directly inspect the goods. Chemical inspection can be performed using a specialized scanner. Or in addition, customs officers can also open the container for manual inspection.

The purpose of inspecting red channel goods is to determine whether the goods are in fact the same as stated in the documents. If the results are the same, the business can now complete customs procedures like the green channel. In case customs discovers minor errors, the business may have to correct the declaration. In case serious errors are discovered, the business’s goods may be subject to administrative fines. In even severe cases, it is forbidden to export goods abroad.

Step 6: Customs clearance and declaration liquidation

After the declaration has been cleared and supervised by customs, the business only needs to submit the declaration along with a printed barcode sheet to the shipping company. This is for the shipping company to carry out procedures to confirm actual export with customs supervision when the goods have been on board the ship.

Common errors when completing export customs procedures

Above are 6 steps to help businesses clear customs quickly and accurately. In addition, below are some additional notes for businesses:

• The information declared on the customs declaration software is wrong: When declaring electronic customs, there will be some information that can be edited after declaration. However, there will be information that once declared cannot be edited or supplemented. Re-filing a new declaration will take a lot of time.
• Wrong declaration of HS code of exported goods: It is necessary to clearly determine what the HS code is to ensure customs clearance takes place quickly and accurately.
• The information on the documents is incorrect or inconsistent: If not checked thoroughly and carefully, information on the documents will be incorrect. Accordingly, there are discrepancies in delivery conditions, quantity, weight, spelling errors, etc. Therefore, when declaring, customs declarants must be careful and carefully check the document information to avoid errors. In case there are errors, it is necessary to notify relevant parties for timely correction.
• Common errors when checking and packaging goods: If the goods are not carefully packaged according to requirements and specifications, they will be easily inspected by customs. Therefore, before exporting abroad, businesses need to pay attention to the label or origin, date of production, expiry date… to ensure the customs clearance process of goods takes place faster.

Through this article, readers have learned what customs procedures are and issues related to applying for customs permits. Understanding the regulations and steps will make it easier for businesses to export goods to international markets.