Top 5 Common Difficulties in Customs Procedures

Import and export play a crucial role in the economy, serving as the “gateway” for businesses to expand globally. However, the journey to conquer international markets is far from simple, especially when businesses face the “barrier” called customs procedures

In this article, SSR Logistics – a reputable logistics expert with 20 years of experience – will help you “decode” the Top 5 common difficulties in customs procedures, providing businesses with a comprehensive view and effective solutions to “overcome” these “obstacles”. 

What are customs procedures?

Definition of customs procedures  

Customs procedures are the entire mandatory administrative process that organizations and individuals must comply with when importing, transiting, or temporarily importing and re-exporting, or temporarily exporting and re-importing goods across the territorial borders of Vietnam and other countries. This is stipulated in the Customs Law and its guiding documents. 

Customs procedures include tasks such as: declaring goods, submitting customs declarations and documents; inspecting and supervising goods; determining the value and commodity codes of goods; classifying goods to apply appropriate tax rates; affixing customs security seals (if necessary); carrying out specialized inspection measures (quarantine, testing, appraisal) for goods with special requirements; collecting various taxes, fees, and customs charges. 

Purposes of customs procedures  

The implementation of customs procedures in import and export activities has the following main purposes: 

  • Trade control: Strictly managing the import and export of goods and means of transport across borders; preventing smuggling and trade fraud; ensuring economic and national defense security; controlling the import and export of specialized goods; protecting the environment, natural resources, and community health. 
  • Tax collection: Collecting taxes, fees, and charges related to import and export activities by legal provisions, to prevent fraud and tax evasion, and ensure national financial and budgetary revenues. 
  • Statistics: Collecting, compiling, and processing information and data to provide for management and trade policy formulation, as well as monitoring and supervising the import and export of sensitive goods. 
  • Consumer protection: Quality, specification, and labeling inspection measures for goods, preventing counterfeit and low-quality goods, controlling the import of goods that do not meet food safety standards to protect public health and consumer rights. 
  • Trade facilitation: Trade facilitation is also a top priority of customs procedures. Simplifying procedures, reducing customs clearance time, applying information technology to reduce logistics costs, improving business competitiveness, and promoting the exchange of goods between Vietnam and the world. 

In summary, the purposes of implementing customs procedures in import and export activities emphasize the importance of customs procedures in managing import and export activities by legal regulations, maintaining economic security, protecting people and the environment, and contributing to the development of Vietnam’s international trade activities. 

Difficulties in customs procedures that businesses commonly face

Import-export businesses often encounter many difficulties in carrying out customs procedures, affecting their business efficiency and morale. Here are some of the most common difficulties: 

Complex administrative procedures and numerous paperwork requirements 

One of the biggest challenges businesses face in the customs clearance process is the complex administrative procedures with many procedural steps to go through, accompanied by a large number of documents and papers that need to be prepared. 

Specifically, the customs process typically includes steps such as: declaring goods, submitting customs declarations, consignment documents, transportation documents, payment documents, determining the dutiable value, classifying commodity codes, carrying out specialized inspection procedures (quarantine, testing, appraisal…), paying relevant taxes, fees, and charges, and completing the final procedures to receive the goods. These dense and complex tasks undoubtedly consume a great deal of time and cost for businesses. Additionally, preparing the dossier to meet the requirements and procedures is also a significant challenge. Businesses must prepare various types of documents such as declarations, bills of lading, commercial invoices, certificates of origin, specialized permits… with a lot of repetitive information that needs to be declared. This is not only complicated but also very prone to errors and omissions, which can lead to delays and disruptions in the customs clearance process. 

Furthermore, the information systems and databases of the various agencies involved in customs procedures, such as Customs, Quarantine, and Testing agencies, are not yet synchronized and integrated for data sharing. This forces businesses to provide the same information multiple times to different agencies, resulting in wasted time, effort, and costs.  

Constant changes in policies and regulations 

A significant obstacle for businesses in import and export activities is the constant changes in customs policies and regulations that they must comply with. Vietnam’s economy is undergoing deeper integration with the region and the world, and laws in this area are continuously changing, amending, supplementing, and issuing new circulars and documents to tighten management, strengthen anti-fraud and anti-smuggling efforts, regulate additional groups of specialized and sensitive goods, etc. Frequent legal changes towards stricter control make it very difficult for businesses to keep up with the new regulations. If businesses fail to update and master the new legal regulations, they risk violating the law, being penalized, and finding themselves in illegal business situations. 

Moreover, many businesses are also confused when carrying out customs procedures because the interpretation, guidance, and application of these policies and regulations at many customs authorities are still inconsistent, and even contradictory. Disagreements in understanding and applying these regulations not only incur additional costs and procedures for businesses but also entail many other risks. To access and promptly grasp changes in laws and their application, businesses are forced to spend a significant amount of time and money on this activity. 

Top 5 Common Difficulties in Customs Procedures

Differences in customs regulations between countries 

Import and export activities involve many countries around the world, which is both an advantage and a major challenge for businesses when each country has its own specific customs regulations. 

Specifically, countries have different regulations regarding the tax rates applied to each group of goods, the required documents to be submitted, the step-by-step customs procedures, the entities exempt from various taxes and fees, commodity code classifications, and self-defense invoice systems. Additionally, the standards and norms for specialized inspections (such as plant and animal quarantine, food safety testing, chemical testing, etc.) also vary depending on the characteristics and conditions of each country. This difference is a significant challenge for businesses when they engage in import and export activities with multiple partners across different countries. Businesses are forced to thoroughly research and master the specific regulations of each country to avoid violations, procedural errors, and impacts on their import and export operations. 

For particularly sensitive and specialized goods, the differences in regulations between countries are even greater. To meet the varying requirements of each import and export market, businesses often have to utilize professional consulting and support services for international customs procedures. However, the costs of these services are typically very high, placing an additional financial burden on businesses and directly affecting their operating efficiency. Moreover, the provision of these services is not always able to respond promptly and accurately to the changing policies and customs regulations of various economies. 

High customs costs 

One of the most pressing issues that businesses frequently complain about when engaging in import and export activities is the excessively high customs costs. In reality, the costs associated with import duties (including import duties, special consumption taxes, value-added taxes, etc.), fees, and customs charges (customs fees, appraisal fees, storage fees, etc.) always account for a very large proportion of the total cost of imported and exported goods, typically ranging from 20-35% of the value of the goods. 

This figure does not include other service costs related to import and export activities, such as international transportation fees, cargo insurance fees, international payment bank service fees, customs declaration service fees, warehouse fees, customs clearance fees, etc. All of these costs, when added together, account for a very high proportion of the total cost of import and export operations, directly affecting the profitability and competitiveness of businesses. 

Therefore, before deciding to export or import goods, businesses need to carefully consider and calculate the customs costs to be paid to assess the economic efficiency of this activity. Some solutions adopted by businesses to reduce the cost burden include maximizing the exemptions and reductions offered by international trade agreements, importing raw materials and inputs for production, or engaging in export processing activities to enjoy exemptions from import duties on raw materials and production inputs. 

Risk of being delayed or denied customs clearance 

In addition to issues such as complex procedures, frequent policy changes, differences in regulations between countries, and high costs, the risk of having goods delayed or denied customs clearance is also a constant concern for import and export businesses. The causes leading to this situation are diverse, ranging from minor errors such as incomplete or inaccurate declarations or documents that do not meet legal requirements, to more serious violations involving goods that are prohibited or restricted for import or export, or related to issues of trade fraud and smuggling. 

When customs authorities delay clearance, the businesses’ goods will be held and awaiting supplementation or correction of documents. This leads to delays and disruptions in the transportation and circulation of goods, as well as various undue risks and costs, such as storage and warehousing costs, additional transportation costs, commission fees, etc. In addition to economic losses, this situation can also adversely affect the business’s reputation with partners and customers. 

In worse cases, if the goods are found to be in serious violation, customs authorities may issue a decision to deny clearance, forcing the business to re-export or destroy the consignment. In this situation, the entire investment in import and export activities and transportation will be completely lost, resulting in severe losses and even the risk of bankruptcy for the business. 

Therefore, to avoid facing these risks, businesses need to exercise extreme caution, strictly comply with customs laws, and prepare all required documents and papers by regulations. Thoroughly researching and understanding the relevant laws and mastering the necessary procedures before engaging in import and export activities is of utmost importance. Additionally, businesses also need to proactively keep up-to-date with changes in policies and new regulations to adjust their business plans accordingly, avoiding unpreparedness and regrettable violations. 

In summary, the above difficulties reflect a longstanding reality and major obstacles that both domestic and foreign businesses are facing when participating in import and export activities through customs in Vietnam. Issues such as cumbersome and complex administrative procedures, constantly changing policies and regulations, differences in procedures between countries, high costs, and risks of delays or cancellations of customs clearance all pose significant challenges for businesses, resulting in losses of both time and money, and seriously affecting the efficiency of import and export operations. 

Customs Clearance Services by SSR Logistics 

With over 15 years of experience in the customs services field and nearly 1 million successful customs declarations, SSR Logistics takes pride in being the market leader in providing reputable and high-quality customs declaration services. 

Unlike many newly established companies, SSR Logistics has a team of highly experienced experts with in-depth knowledge of all customs regulations and procedures. With an error rate close to zero, SSR Logistics always ensures accurate and prompt declarations, helping customers save maximum time and costs. 

Comprehensive Customs Clearance Services at SSR Logistics

At SSR Logistics, we fully understand the importance of clearing goods quickly and efficiently in today’s global trade environment. We are committed to providing comprehensive, professional, and reliable customs clearance services with three outstanding competitive advantages: 

  • Extensive expertise: A team of seasoned experts well-versed in the customs regulations and laws of countries worldwide, ensuring procedures are handled accurately and in full compliance. 
  • Swift processes: With optimized processing systems and streamlined procedures, we commit to reducing customs clearance times, enabling timely delivery of your goods as promised. 
  • Global network: With agency networks in over 50 countries worldwide, we stand ready to support your customs clearance anytime, anywhere conveniently and flexibly.

Through this article, SSR Logistics hopes that customers have gained an overview of the difficulties businesses commonly face in customs procedures.  For more articles, please visit our Logistics Knowledge section.    

SSR looks forward to becoming your reliable logistics partner, providing optimal solutions for your importing and exporting business. Should you have any question regarding our services, please feel free to contact us for specific advice.   

With our experienced team, extensive network and flexible shipping & customs solutions, SSR Logistics is confident to deliver excellent services to our clients.  

Businesses that need customs and import-export consulting, please contact SSR Logistics via Hotline (+84) 911 988 484 or leave your information here for specific advice. 

With a modern warehouse system and experienced transportation staff, SSR Logistics provides a variety of additional services such as: customs clearance, warehouse leasing, domestic transportation, international transportation by sea and air, and international express delivery

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