customs clearance

customs clearance

With the increase in trade exchange between countries, it has become necessary to understand customs clearance procedures that ensure that goods cross borders legally and orderly, while ensuring that imported and exported goods comply with local and international laws and regulations and that due duties and taxes are paid.

In this article, we will explain in detail what customs clearance is and its importance in import and export operations, and what are the conditions for obtaining a license to practice work in this field?

What is customs clearance?

Customs clearance is a set of procedures that facilitate the legal movement of goods across international borders, whether imports or exports, while ensuring that these goods comply with local and international customs laws and regulations, protecting the rights of the state and the national economy, and facilitating legitimate trade.

Customs clearance includes multiple aspects that go beyond simply examining the required papers and documents to ensure their authenticity and completeness. It also includes examining the goods and ensuring that they conform to the data stated in the documents, verifying their quality and safety, and ensuring that there are no prohibited or dangerous materials.

Customs clearance also includes determining the value of duties and taxes due on goods based on their value, customs classification and collection, then releasing the goods and allowing them to enter or leave the country in question, so it plays an important role in combating smuggling and illegal trade.

The importance of customs clearance

Customs clearance is an essential element in international trade and the local economy, and its importance is evident in several main aspects, the most important of which are:

1. Facilitating international trade, accelerating trade exchange between countries, and improving the competitiveness of global markets.
2. Increase government revenues by collecting customs duties and taxes on imports, and then using them to develop infrastructure and public services.
3. Preventing the entry of goods that violate the law or do not comply with national standards, protecting local companies from unfair competition and counterfeit or inferior products.
4. Ensuring the safety of imports and that they do not threaten public health or national security, in order to preserve the safety of society.
5. Reducing smuggling and illegal commercial activities, which enhances economic and security stability.
6. Providing a regulated legal framework for completing import and export operations, thus reducing administrative complexities and facilitating companies’ efficient conduct of their activities.
7. Providing accurate data and statistics relevant to foreign trade helps the government make informed decisions.

The most important documents required to complete customs clearance steps in Saudi Arabia

Both the merchant and the importer must submit a set of documents to complete customs clearance procedures in Saudi Arabia, which are as follows:

Documents required to be submitted by the merchant:

1. Commercial invoice, which is a document that includes sale and purchase details such as the names of the seller and buyer, a description of the goods, quantities, prices, and delivery terms.
2. Package statement, which is the document that shows the contents of each package or package of shipping, and includes the number, dimensions, weights and distinctive mark of the packages.
3. Establishment certificate, which is the document that proves the country of manufacture or production of goods, and is used to determine applicable customs duties and benefit from trade agreements between countries.
4. A bill of lading, which is a contract of carriage between the shipper and the carrier, proves receipt and shipment of the goods, and includes details of the shipment and destination of arrival.
5. Certificates specific to the quality of goods, such as: fumigation certificate, health certificate, agricultural certificate, as well as quality certificate “CIQ” for some goods imported from China.

Documents required to be submitted by the importer:

1. The commercial or industrial register is the official document that proves the establishment’s registration in the commercial or industrial register, and serves as a legal identity for the importing company or institution.
2. A form issued by the bank through which the importer transferred the funds to the supplier, showing the total value transferred and the type of commercial contract.
3. An import card is an official license that allows an establishment to import goods. It can be obtained from the relevant government agencies and must be valid and match the importer’s type of business activity.
4. Tax card, which proves the establishment’s registration with the Tax Authority and its commitment to paying the taxes due.
5. Customs Dealers Card, which serves as an official authorization for the establishment to deal with the customs administration and facilitate the completion of its procedures.
6. A general authorization for the customs broker, in the event of hiring a customs clearance agent, which is the document that clearly and accurately defines the agent’s powers.

Types of customs clearance activities

We can define the types of customs clearance activities permitted in the Kingdom of Saudi Arabia as follows:

1. Activities related to exports and imports.
2. Postal parcel transportation activities.
3. Transit “transit“ activities.
4. Land transport activities for air transit shipments.
5. International land transport activities.
6. Commercial facility clearance activities.
7. Clearance activities for the military, diplomatic and government sectors.
8. Hazardous materials clearance activities for approved facilities.

List of the most important customs clearance services in Saudi Arabia

Customs clearance services play a major role in facilitating the movement of international trade and the passage of goods through various customs ports, whether land, sea or air. These services aim to ensure that imported and exported goods comply with the customs laws and regulations in force in the Kingdom, and to collect the customs duties and taxes due. The following is a summary of the most important customs clearance services in Saudi Arabia:

1. Facilitating any complications that customers may face in order to clear goods.
2. Avoid any risks or falling under penalty of fines.
3. Carrying out all necessary matters for the company to complete import operations.
4. Customs clearance procedure for all types of goods permitted by law.
5. Dealing with all authorities and authorities responsible for clearance.

It is worth noting that the Saudi Customs Authority has identified a list of goods exempt from customs, including: dairy products, artificial honey, starch, sinks and bathtubs, leather, wires and pipes.

Procedures for obtaining a license to practice the customs clearance profession

What do you know about customs clearance conditions, whether if the license is issued or renewed? The draft regulations for practicing the customs clearance profession have specified these conditions as follows:

In the event of issuing a new license, an application must be submitted through the Authority’s approved channels. A relationship manager must be appointed in accordance with the conditions set forth in Article 4/A of the Regulations, along with a copy of his national identity. A valid commercial register containing customs clearance activity is also required, with the exception of government agencies and diplomatic missions. Information must be provided about the facility’s national address and available communication channels, and fees due must be paid in accordance with the customs clearance services schedule.

In the event of renewing a customs clearance license, it is required to submit a renewal application through the Authority’s approved channels, and pay the fees due according to the customs clearance services schedule, while submitting a valid commercial register that includes the customs clearance activity, attaching a valid social insurance subscription certificate for all employees to the license, and settling all outstanding issues, including any previous pledges, restrictions or obligations on the establishment It is also necessary to update the contact information of all facility employees and update the approved national address.

Are there customs clearance fees in Saudi Arabia?

Customs clearance fees are defined as the costs related to completing the procedures for clearing goods through customs to facilitate their passage to the country concerned, and these costs include the following:

1. Customs duties.
2. Service fees.
3. Other taxes.

The Saudi system has set a customs clearance fee rate ranging from 5% to 15% for most goods, and the rate may reach 25% for some products.

Customs clearance and its role in facilitating international trade

Customs clearance plays a major role in facilitating international trade, as it aims primarily to ensure the smooth and efficient flow of goods across borders, which is required to be achieved in the smooth movement of exports and imports, and to reduce delays in their delivery.

On the other hand, customs clearance ensures that exporters and importers comply with customs laws and procedures, reduces violations and penalties that may result from them, and ensures that traded goods comply with international and local health and environmental standards through simplified and effective inspection procedures, which enhances the confidence of international companies in the Saudi market and encourages investment in it, thus strengthening the national economy and increasing the volume of exports and imports between the Kingdom of Saudi Arabia and the rest of the world.

Moreover, the adoption of modern technologies in the field of customs clearance in the Kingdom of Saudi Arabia, such as electronic document submission systems and shipment tracking, contributes to reducing time periods and costs related to customs procedures, enhancing the speed of completing transactions and raising the efficiency of international commercial transport.