What Is Customs Clearance? Definition, Benefits, and Processing Stages
There is one mandatory procedure that exporters and importers must go through when moving goods out of or into the customs territory of a country, including Indonesia.
This procedure is known as customs clearance.
The customs clearance process can seem complicated and complex for exporters and importers who are handling it for the first time or are not familiar with the procedure.
But what exactly is customs clearance?
What are its purpose and benefits?
And what are the main stages involved?
This article explains the definition, purpose, benefits, and main stages of the customs clearance process.
Let’s take a closer look.
What Is Customs Clearance?
Export and import activities involve moving goods out of or into the customs territory of a country.
In this case, we will use Indonesia as the example.
Every item leaving or entering the customs territory has legal and economic consequences.
For example, certain goods may be prohibited and/or restricted from being exported or imported because of specific government policies.
Therefore, the goods need to be checked first.
From an economic perspective, goods entering or leaving the customs territory may also be subject to charges that must be paid to the government as state revenue.
These charges are commonly known as:
- Export duties
- Import duties
The inspection process and payment of import or export duties take place during customs clearance.
Naturally, customs clearance also involves several administrative procedures.
Therefore, customs clearance can be understood as the administrative process and fulfillment of customs obligations when goods are exported from or imported into a country's customs territory.
The scope of customs clearance itself is quite broad.
The process starts from registration and the submission of export or import declarations, continues until the goods are released from the port, and may even include audits and post-release reviews.
The implementation of customs services in Indonesia is under the authority of the Directorate General of Customs and Excise (DJBC) under the Ministry of Finance of the Republic of Indonesia.
DJBC has the authority to determine whether goods are allowed to enter or leave Indonesia and to determine the amount of import or export duties that must be paid.
These decisions are made in accordance with the applicable regulations.
Customs services or customs clearance in Indonesia are regulated under Law of the Republic of Indonesia No. 10 of 1995 concerning Customs, as amended by Law of the Republic of Indonesia No. 17 of 2006.
What Are the Purpose and Benefits of Customs Clearance?
Customs services are part of export and import procedures and therefore have specific purposes and benefits for both the government and exporters or importers.
In general, customs clearance aims to ensure that goods entering or leaving the Indonesian customs territory comply with applicable regulations.
It also allows the state to collect revenue from export and import activities.
The following are several benefits that exporters and importers may obtain from properly completing customs clearance procedures:
- By following customs procedures correctly, the logistics process becomes legal. This can reduce the risk of goods being manipulated by irresponsible parties.
- Following customs procedures can help increase business capacity. Businesses that comply with government procedures may increase their business value because their export and import activities become easier and legally compliant.
- Customs procedures can help reduce the risk of delays. Export and import activities are more likely to remain on schedule when shipping and customs documents are complete.
What Are the Main Stages of Customs Clearance?
In general, customs clearance procedures can be quite extensive.
However, there are three main stages of customs clearance.
These stages are:
1. Pre-Clearance
The pre-clearance stage takes place before the goods arrive at the port.
This stage is intended to check the legality of the exporter or importer as well as the goods being shipped.
One of the checks is to determine whether the exported or imported goods are classified as LARTAS (Prohibited and Restricted Goods).
For legal registration purposes, customs service users or logistics service companies need to complete the required registration.
The output of this registration process is a Customs Identification Number (Nomor Identitas Kepabeanan/NIK) issued by DJBC.
However, there have been changes regarding NIK requirements.
Currently, only certain customs service users, such as:
- Carriers
- Courier Service Companies (Pengusaha Jasa Titipan/PJT)
- Customs Brokerage Companies (Pengusaha Pengurusan Jasa Kepabeanan/PPJK)
are still required to register with DJBC to obtain an NIK.
Meanwhile, customs service users acting as exporters or importers may use their Business Identification Number (Nomor Induk Berusaha/NIB).
For LARTAS goods, customs service users exporting or importing such products must first obtain the required import permits from the relevant ministries or government institutions.
These requirements are generally provided in the form of Import Licensing documents.
In addition, certain goods under specific HS Codes may also require a Surveyor Report.
Information regarding licensing requirements for LARTAS goods can be checked through the insw.go.id portal.
2. Clearance
The second stage is Clearance.
In principle, the clearance stage covers three main activities:
- Customs declaration
- Tax and duty payment
- Release of goods
However, the technical process may vary, especially for the release of goods, depending on the inspection results determined by DJBC.
In general, the clearance process may include the following stages:
- Preparing the customs declaration, such as an Import Declaration or Export Declaration, and submitting the data to DJBC.
- Paying import duties and taxes for imported goods.
- Document inspection.
- Taking product samples for physical inspection or laboratory testing, if required.
- Release of goods.
During the clearance process, DJBC may assign one of three customs service channels:
- Green Line
- Yellow Line
- Red Line
The assignment of these channels is based on the importer profile and/or the imported commodity profile.
It may also be determined randomly through the DJBC system.
Each channel has different requirements and procedures.
3. Post-Clearance
The final stage is post-clearance.
Post-clearance takes place after the goods have been released from the port.
The main activities in this stage are:
- Customs audits
- Re-assessment or re-examination
These processes may take place when a company is selected by DJBC as the subject of an audit or re-examination.
Under the Customs Law, DJBC has the authority to determine customs tariffs and customs values within a period of 2 years.
The two-year period is calculated from the date of the PIB or PEB.
The determination of customs tariffs and customs values may be carried out through customs audit and re-examination mechanisms.
Therefore, customs audits and re-examinations are included in the post-clearance stage.
The results of customs audits and re-examinations may be issued in the form of:
- SPKTNP
- SPP
- SPSA
The type of assessment issued depends on the findings identified during the audit or re-examination.
Customs Clearance Services with PT. Alpha Romeo Teknologi
The customs clearance process can be quite long and relatively complicated, especially for importers or exporters who are not familiar with the procedures.
However, you do not need to worry because the government allows customs clearance services to be handled with the assistance of third parties.
This allows you to remain focused on developing your business.
PT. Alpha Romeo Teknologi provides customs clearance services for both import and export activities.
With our assistance, the customs process can become easier and faster.
In addition, PT. Alpha Romeo Teknologi can also assist with the pre-clearance process, including the preparation of Import Licensing documents and Surveyor Reports for goods classified as LARTAS.
Interested in our services or would you like to discuss your requirements first?