Clearance
Clearance of International Cross-border Trade
Clearance of goods and conveyances for import, export or transit is a key activity that brings together the various governmental bodies and industry stakeholders involved in international cross-border trade. According to Chapter 2 of the General Annex to the Revised Kyoto Convention, clearance is defined as the accomplishment of the Customs formalities necessary to allow goods to enter home use, to be exported or to be placed under another Customs procedure. Customs is traditionally the focal point through which clearance and border control is exercised.
Goods moving across international borders have to undergo sometimes lengthy, complex and difficult administrative procedures in order to be imported to, exported from, or transited through a country or Customs territory. International organizations such as the World Bank keep annual statistics about the performance of countries/governments to manage this cross-border activity, such as Trading Across Borders as part of the Doing Business report. Differences between countries in clearance times, number of documents required or fees to be paid (official and unofficial ones) have a significantly wide range. For example, while clearing goods in Singapore for imports takes a maximum of 4 days, the same process can take up to 92 days in Uzbekistan.
One of the main reason for the differences is the importance a government places on promoting and facilitating trade in and out of its country for economic and social development, and the extent to which that government is engaged in continuous reform and modernization. Customs often engages in trade facilitation by providing the legitimate trader with access to simplified procedures or other facilitative arrangements, such as electronic filing, e-payment or 24/7 online access. There are many general measures for trade facilitation that apply to all five steps of a standard Customs clearance process, whereas process-related trade facilitation measures apply to individual steps of the process, as explained in greater detail under the process-related measures for trade facilitation.
While some of these measures require significant time and resource commitments from both governments and industry such as “Single Window” systems, there is a wide range of simplifications and trade facilitation measures that are less difficult (e.g. formal trade consultation) or less resource demanding (e.g. advance rulings).
To better analyse the root causes of current bottlenecks in the clearance process at particular ports, airports or border offices, policy makers and practitioners in trade facilitation should conduct an in-depth analysis of the current situation. The time release study as developed by the WCO provides a good practice methodology and model for such a study in order to identify the problem areas and the roles and responsibilities in the clearance process.
Various relevant international conventions, recommendations and best practice guidelines can guide countries in their modernization efforts. These include the Revised Kyoto Convention on the simplification and harmonization of Customs procedures, the Istanbul and ATA Conventions on temporary admission, the Harmonized System on the classification of goods and the WTO Valuation Agreement .
