What is Export Clearance? Understanding the Process and Its Importance

Export clearance is one of the most critical procedures in international trade and consists of the official permit by the state authorities to export goods outside a country. It includes export rules, payment of all duties and taxes, and verification of export documents.

Despite persistent global challenges, India’s overall exports (merchandise + services) is estimated to surpass last year’s highest record. It is estimated to reach USD 778 Billion in present financial year. As a positive growth pattern is exhibited, learning about export clearance has become more critical than ever.

Scroll down further to gain a comprehensive overview of the process.

The Journey Through Export Clearance

It is an official authorisation granted by the customs authority upon the exportation of goods from a country. Export clearance entails examining and validating documents in relation to those required for complaints with laws, regulations, and trade agreements. Once the clearance is obtained, the cargo can be legally transported across International borders.

The procedure can be divided into two types, taking the degree of accuracy of the process:

●     Simplified export clearance

●     Standard export clearance

The process should take place under the guidance of a tax officer while following the local jurisdiction of the place where the goods are loaded.

What does export clearance look like? – A step-by-step guide

Once the cargo is ready to take flight for international markets, here is what one can expect:

1.   Documentation preparation

A set of documents are required to get export clearance. A comprehensive list of the paperwork is mentioned in the below section for your ease. A reliable freight forwarder, customs broker, export consultant, or in-house export department can assist in such an undertaking.

2.   Electronic submission

This refers to submitting the export clearance documents digitally rather than physically. It saves time and is accurate, accessible, and environmentally friendly. Most countries have leveraged this digitalisation, streamlining the entire clearance process.

3.   Custom review

The officials meticulously review the export clearance documents to ensure they comply with regulations and are accurate.

4.   Physical inspection

Although not every cargo shipment undergoes a physical inspection, the officials have the right to examine the goods if necessary. Export clearance scrutiny can occur for various reasons and happen randomly based on risk assessment.

5.   Export permit

In some situations, specific cargo might require an export clearance permit from the government. Adhering to this is encouraged to comply with applicable laws and regulations. Once the physical inspection and verification of documents are completed, a “let export” clearance is required.

6.   Release

Export clearance can be received once all the necessary checks have been completed and a final inspection has been done. The customs agency will issue a clearance certificate or authorisation allowing this shipment to proceed to its destination.

Documents Required For Exports Clearance

For your convenience, here’s a list of paperwork required for export customs clearance:

●     ProForma Invoice

●     Bill of Lading or Airway Bill

●     Bill of Sight

●     Letter of Credit

●     Commercial Invoice

●     Shipping Bill

●     Bill of Exchange

●     Export License

●     Customs Packing List

●     Warehouse Receipt

●     Health Certificates

●     Country of Origin or COO Certificate

Momentousness of export clearance

The importance of export clearance cannot be overstated. It is the last and most crucial stage of international trade, standing on guard to ensure observance of laws, regulations, and agreements, with few resources justifying its criticality. Here is a list of key reasons defending the value of this procedure:

●     Knowledge of rules will help avoid legal problems while shipping goods internationally.

●     Secondly, export clearance is a good way to prevent illegal exports. Some procedures may be governed by laws relating to national security, so enforcement of such laws demands a strict clearance process.

●    It ensures a smooth customs procedure and efficiency in the movement of goods across borders. The credit goes to all relevant documents and confirmations present.

●  Export clearance performs an all-important task of assisting international trade and economic cooperation, strengthening international relations.

●     The export clearance process ensures the deal’s legality, allowing the exporters to do business internationally.

Tips for Successful Export Clearance

Now that we are enlightened about the process, perhaps the first thing we should do is prepare ourselves for embarking upon this mission of filing export clearance.

●     Work on export clearance ahead of time and correct paperwork will help alleviate delays in the process.

●   Understanding and familiarising oneself with laws, tariffs, and duties of the importing country’s laws will assist the cargo to move without glitches.

●     Proper documents will include an exhaustive list, packing proof and certifications of origin.

●     Make sure to declare the goods well and make truthful declarations so as not to delay the export process.

●     Keeping insurance for your shipments to protect against loss or damage is encouraged.

●     Easy navigation through the export clearance process will come about through the assistance of a customs broker.

Ending notes

This comprehensive guidance touched upon all significant stages of export clearance. Following the suggestions will minimise waiting time and help avoid penalties from the respective authorities.