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Essential Guide to Customs Clearance

December 1, 2023

Table of Contents

What is Custom Clearance

Customs clearance is the mandatory process that goods must undergo when entering or exiting a country. It involves submitting documentation, paying duties and taxes, and ensuring that the goods comply with all applicable import or export regulations. The process is managed by the customs authority of the respective country, which is responsible for enforcing trade laws and ensuring compliance with international agreements.

Purpose of Customs Clearance

Customs clearance serves several crucial purposes, including:

Revenue Collection: Customs authorities collect duties, taxes, and other fees on imported goods, which generate significant revenue for the government. These funds are often used to support government programs and infrastructure development.
Trade Protection: Customs clearance helps to protect domestic industries from unfair competition from imports by ensuring that imported goods meet specific standards and are subject to tariffs. This helps to level the playing field for domestic producers and maintain employment levels.
Enforcement of Laws: Customs clearance helps to enforce laws and regulations related to intellectual property rights, hazardous materials, and prohibited items. This protects consumers from unsafe or counterfeit goods and helps to ensure that illegal items are not smuggled into the country.
Data Collection: Customs clearance provides valuable data on trade flows, which can be used to inform economic policy decisions. This data helps governments to understand the movement of goods across borders and to identify trends in international trade.

Importance of Customs Clearance

Customs clearance is an essential part of international trade. It ensures that goods are correctly declared, duties and taxes are paid, and all applicable regulations are followed. This helps to protect governments, businesses, and consumers. Efficient customs clearance procedures can facilitate trade flows, reduce costs, and promote economic growth.

What is Customs Clearance in Malaysia

Custom clearance in Malaysia imports or exports goods through the Royal Malaysian Customs Department (RMCD). It involves submitting documentation, paying duties and taxes, and ensuring that the goods comply with all applicable import or export regulations.

The RMCD is responsible for administering and enforcing Malaysia’s customs laws and regulations. The department has a network of customs offices located throughout the country and at international airports and seaports.

Steps in the Customs Clearance Process in Malaysia

The customs clearance process in Malaysia typically involves the following steps:

Pre-Arrival Processing (PAP): Importers can submit an import declaration to the RMCD before the arrival of their goods. This can help to streamline the customs clearance process and expedite the release of the goods.
Submission of Documentation: Importers must submit a customs declaration form and other required documentation, such as commercial invoices, packing lists, and certificates of origin.
Customs Examination and Assessment: Customs officials may examine the goods physically or electronically to verify the information provided in the documentation and assess applicable duties and taxes.
Payment of Duties and Taxes: The importer or their authorized representative must pay any applicable duties and taxes before the goods can be released from customs control.
Release of Goods: Once all requirements are met, the goods are released from customs control and can be transported to their final destination.

Additional Resources

For more information on customs clearance in Malaysia, please visit the following websites:

Royal Malaysian Customs Department: http://www.customs.gov.my/en
Ministry of International Trade and Industry (MITI): https://www.miti.gov.my/index.php

How Long Does Customs Clearance Take Shipping

The duration of customs clearance can vary depending on several factors, including the type of goods being shipped, the country of origin and destination, the documentation’s complexity, and the customs authority’s efficiency. However, customs clearance typically takes between 24 and 72 hours under normal circumstances.

Here’s a breakdown of the factors that can affect customs clearance times:

Type of Goods: Certain goods, such as hazardous materials, perishable items, or goods subject to special regulations, may require additional inspections or certifications, which can extend the clearance process.
Country of Origin and Destination: Customs clearance procedures vary significantly between countries. Some countries may have more stringent requirements or experience higher volumes of shipments, leading to longer clearance times.
Documentation: Accurate and complete documentation is crucial for efficient customs clearance. Any errors or missing information can delay the process while customs officials seek clarification.
Efficiency of Customs Authority: The workload and efficiency of the customs authority in the destination country can also impact clearance times. Countries with well-staffed and technologically advanced customs departments tend to process shipments more quickly.
Customs Broker Involvement: Engaging a customs broker can expedite the clearance process, as they have expertise in navigating the customs regulations and can handle the paperwork on behalf of the importer or exporter.
Advance Filing: Submitting customs documentation before the goods’ arrival can also help streamline the process, as customs officials can review the information and prepare for the inspection before the shipment arrives.
Random Inspections: Customs authorities may randomly select shipments for inspection, even if all documentation is correct. These inspections can add additional time to the clearance process.

Generally, customs clearance for express shipments, such as those sent via courier services, tends to be faster than for air or sea freight shipments. This is because express couriers often have their own customs clearance facilities and dedicated personnel, allowing them to process shipments more quickly.

While customs clearance can take some time, it is an essential step in international trade to ensure compliance with regulations, protect consumers, and facilitate the movement of goods across borders.

Who is Responsible For Customs Clearance

The responsibility for customs clearance typically falls on the importer or exporter, depending on the Incoterm (International Commercial Terms) used in the sales contract. Incoterms are standardized international trade terms that define the responsibilities of the buyer and seller for the delivery of goods.

Importer-Responsible Incoterms: Under importer-responsible Incoterms (such as CIF and CIP), the importer is responsible for customs clearance. This means they must submit the necessary documentation, pay applicable duties and taxes, and arrange for the goods to be released from customs control.
Exporter-Responsible Incoterms: Under exporter-responsible Incoterms (such as DPU and DDP), the exporter is responsible for customs clearance. This means they must handle customs clearance before delivering the goods to the importer.

In some cases, the importer and exporter may agree to share the responsibility for customs clearance. This is typically done through a special Incoterm called DAT (Delivered at Terminal). Under DAT, the exporter is responsible for customs clearance until the goods are unloaded at the agreed-upon terminal. The importer is responsible for clearing the goods through customs and transporting them to their final destination.

Regardless of who is responsible for customs clearance, it is essential to note that both the importer and exporter are responsible for ensuring that the goods comply with all applicable import or export regulations. Failure to do so can result in delays, penalties, or even seizure of the goods.

How Do I Clear Customs Clearance

Clearing customs clearance can be complex, but it is essential for importing or exporting goods. Here is a general overview of the steps involved:

1. Prepare documentation:

The first step is to prepare all required customs clearance documentation. This typically includes:

A commercial invoice
A packing list
A certificate of origin
Any other required documentation, such as a phytosanitary certificate or a certificate of analysis

2. Submit documentation:

Once you have prepared all of the required documentation, you must submit it to the customs authority in the destination country. This can be done electronically or in person.

3. Pay duties and taxes:

If you are importing goods, you must pay applicable duties and taxes. The duties and taxes you must pay will depend on the value of the goods, the country of origin, and the tariff classification of the goods.

4. Arrange for inspection (if required):

In some cases, customs officials may require that your goods be inspected. This is typically done to verify that the goods are what they are described to be and that they comply with all applicable regulations.

5. Release of goods:

Once all requirements have been met, your goods will be released from customs control. You can then arrange for the goods to be transported to their destination.

Additional tips:

Use a customs broker: A customs broker can help you prepare the correct documentation, classify your goods, calculate duties and taxes, and ensure compliance with regulations.
Submit your documentation electronically: Many customs authorities accept electronic submissions of customs declarations, which can help to speed up the clearance process.
Track your shipment: You can track your shipment’s progress through the customs authority’s website or a tracking tool provided by your shipping carrier.

By following these tips, you can help to ensure that your shipment clears customs quickly and efficiently.

How Much Are Customs Charges in Malaysia

The amount of customs charges in Malaysia depends on several factors, including the value of the goods, the country of origin, and the tariff classification of the goods. However, as a general guide, you can expect to pay between 5% and 10% in import duty on most goods. You must also pay 10% in sales tax (SST) on most goods.

Here is a table of some of the most common import duties and taxes in Malaysia:

Goods	Import Duty	SST
Raw materials	0% – 5%	10%
Semi-finished goods	5% – 10%	10%
Finished goods	10% – 25%	10%

Several exemptions and reductions are available for certain types of goods, such as goods imported for educational or research purposes. You can find more information on customs charges in Malaysia on the Royal Malaysian Customs Department (RMCD) website.

Here are some additional tips for reducing your customs charges in Malaysia:

Use a customs broker: A customs broker can help you classify your goods correctly and identify any applicable exemptions or reductions.
Import goods from countries with which Malaysia has a Free Trade Agreement (FTA): Malaysia has FTAs with several countries, which can reduce or eliminate import duties on goods from those countries.
Consider importing goods in bulk: Importing goods in bulk can sometimes result in lower import duties per unit.

By following these tips, you can help to reduce your customs charges in Malaysia and save money.

How Do I Check the Status of My Customs Clearance

You can check the status of your customs clearance in Malaysia by using the Royal Malaysian Customs Department (RMCD)’s eTracking system. To use the eTracking system, you will need the following information:

Your customs declaration number (CD number): This is a unique number assigned to your declaration when you submit it to the RMCD. You can find your CD number on your customs declaration or the confirmation email you received from the RMCD.
Your bill of lading (BL) number: This is a unique number assigned to your shipment by the shipping carrier. You can find your BL number on your bill of lading.

Once you have this information, you can follow these steps to check the status of your customs clearance:

Go to the RMCD’s eTracking website: http://www.customs.gov.my/en
Enter your CD number or BL number in the search bar.
Click on the “Search” button.

The eTracking system will display the current status of your customs clearance. The status will be one of the following:

Lodged: The RMCD has received your customs declaration and is being processed.
Assessment: The RMCD is assessing your customs declaration and calculating applicable duties and taxes.
Payment: You must pay any applicable duties and taxes before your goods can be released from customs control.
Release: Your goods have been released from customs control, and you can arrange for them to be transported to their final destination.

You can also check the status of your customs clearance by calling the RMCD’s hotline at 1300 888 500. The hotline is available 24 hours a day, seven days a week.