Customs Exam Fee

Customs Exam Fee: The Ultimate FAQ Guide

Let’s look at some fundamental aspects of custom exam fee.

I am sure, if you’re in an import and export business, probably, you have come across this term.

Let’s get the details.

What is Customs Exam Fee?

Customs exams fee is the amount payable to the customs authority whenever they pull your shipments for customs inspection.

This cost is borne by the importer and it is not fixed since it depends on a number of factors.

Figure 1 Customs exam fee

 Customs exam fee

What is the Purpose of Customs Exam?

  1. It is a measure of national security and consumer health protection of all the goods and materials that get imported.
  2. Promote lawful trade by restricting dumping of goods into a country that may lead to unfair price competition.
  3. Customs exams is there to nab contraband and illegal shipments from entering the country such as narcotics, weapons, etc.
  4. Ensure that goods that are being imported are of the standards acceptable in the country.

What are the Different Types of Customs Exam Fees?

There are three common types of customs exams that can be carried out on your goods namely:

Vehicle and Cargo Inspection System (VACIS) Exam

This type of examination is carried out by an X-ray machine hence it is also known as the X-Ray exams.

The container is driven through the machine and the images of the container examined.

If the content pass the exams, you are required to pay between USD 150 to 300 depending on the container size.

Failure to pass this exams means the cargo is subjected to one or two more customs exams.

This inspection can take between a few hours up to 3 days depending on the queue at the port.

Tail Gate Exam

Tailgate examination is carried out when the cargo fails to pass the VACIS exams.

In this case, the customs officer breaks open the container seal and checks the container content for any suspicious material.

If the content does not have any goods that might be deemed illegal, the container is cleared for shipment.

This exam costs between USD 150 to 350 depending on the port of search and container size.

Shipment that fail this exams are upgraded to the next step which is intensive in nature.

This customs exams takes ocean shipment between 2 to 3 days while air shipment take less due to loose packaging.

Intensive Exam

Unlike the VACIS exams, intense customs exams is intrusive and it takes about 7 to 30 days to complete.

The shipment is transferred a private customs facility known as Customs Exams Site (CES) where it is offloaded.

The cargo is then classified accordingly, removed from their secondary packages such as boxes and prepared for inspection.

One such examination involves opening the actual goods such as electronic devices, seats, etc. and closely examining the inside.

Once the inspection is over, the goods are loaded back and the shipment cleared to proceed. This type of customs examination is very expensive to importers.

This is because, they bare costs of transportation to and from the CES, labor cost and goods are likely to get damages.

The average cost of intensive examination ranges from USD 1,000 to 3,000 or more. This cost is dependent on the labor intensity, port of operation and the container size.

It is therefore important to use a reputable supplier and insure your goods in transit to avoid incurring such extra costs.

Who charges Customs Exam Fee?

Figure 2 Customs border protection

Customs border protection

Customs exams fee is charged by the customs authority of the country of origin.

For example, USA customs border protection (CBP) charge the exams fees for any imports into the USA.

How is Customs Exam Fee Calculated?

Customs exams fees is calculated based on the type of exams, the port conducting the inspection and the size of container. The fees ranges from USD 80 to USD 3000 depending on the mentioned factors.

Where is Customs Exam Fee charged at?

The customs exams fee is charged at the port where the customs inspections is carried out. It can be at the port of entry or destination port.

How do I pay Customs Exam Fee?

Customs exams fees is remitted to the customs authority bank account once the customs broker shares the invoice of the exams.

You can also remit the fee via the internet depending on the timeline stated on the invoice. Cash payment is also accepted at the point of inspection.

What is the best way to avoid paying Customs Exam Fee?

You can avoid future customs exams fee by ensuring the following:

  1. Screen all your suppliers properly and make sure they comply with the acceptable standards when manufacturing or producing your products.
  2. Hire an agent or freight forwarder who is knowledgeable about customs rules and regulations. They will ensure that all the required shopping documents are presented to the respective customs authority.

Are Customs Exam Fees negotiable?

Not really.

Other customs charges such as value added tax or duty might be exempted depending on the trade agreement of the countries.

How often does Customs Exam Fee get reviewed?

Customs exams fees is reviewed at the discretion of the customs authority. This also applies to the algorithm score that is used to determine shipments that undergo custom exams review.

Can a Customs Broker or Freight Forwarder help pay Customs Exam Fee?

Yes, they can.

Customs brokers or freight forwarder are licensed by customs authority and clear goods on behalf of importer.

They can therefore may the customs exams fee payment on your behalf since they are your contact during freight shipment.

What factors influence the price of Customs Exam Fee?

Type of Exams

There are three common customs exams that your shipment could be subjected to in case it is stopped at the port.

Each exams charges differently depending on the time and labor involved in conducting such exams.

For instance, VACIS cost an average of USD 300 while intensive exams cost up to USD 3000.

Port of Inspection

Different ports charge different rates for the customs exams fees.

Busy and large ports are likely to charge higher fees for the same exams compared to small and less busy ports.

Size of the Container

Bigger containers ship more goods hence they will require more time to review their contents compared to smaller ones.

As a result, the bigger containers importer will pay more than shippers using smaller containers.

How does Insuring Cargo help with Customs Exams Fee?

Well, like I mentioned earlier, customs exams is unavoidable but an expected customs process by shippers.

When your cargo is selected for inspection, it may be subjected to VACIS, tailgate or intensive exams or all the three exams.

While VACIS and tailgate inspections are less intrusive, intense customs exams is very intrusive. This is because, all the container goods are unloaded, categorized and seals broken to get full access of the goods.

The inspection staff will thoroughly check the goods and even cut them open to ensure they are not stuffed with anything illegal.

As a result, your goods may end up damaged upon completion of the examination.

The staff are neither responsible for proper handling of your shipment nor liable for any damages.

This is why having an insurance for your cargo on transit is important.

The insurance should clearly spell out the scope of cover in the event of damages or theft of goods in transit.

To claim for compensation of damaged goods, the shipper will need to provide the insurance certificate to assist with their claim.

Lack of it means the shipper not only bares the cost of shipping damaged goods but also losses the goods.

What is the Benefit of Hiring a Customs Broker in relation to Customs Exam Fee?

A customs broker is well equipped with the customs rules and regulations for different jurisdiction.

This makes them suitable persons to help with shipping paperwork thus avoid customs exam fee due to improper documentation.

Figure 3 Customs brokege

 Customs brokerage

How does Customs Exam Fees affect Shipping?

Delivery Delays

If your shipment is chosen for customs exams during shipment, the likelihood of getting delivery delay is increased.

This is because of the queues at the port for the customs exams by other shipments.

Extreme delays maybe experienced if your goods are upgraded to intensive customs review.

Clearance Delays

When your shipment is scheduled for customs clearance but instead gets held for customs exams, clearance process is delayed.

This is because, customs authority cannot clear goods that have been flagged for further review.

Your shipment will only be cleared once the customs officers examine the cargo and clear it to proceed with customs clearance.

Extra Shipping Cost

The news of customs examination of goods is frustrating to shippers as it comes with more financial burdens and shipment delays.

The cost of customs exams, demurrage fees, storage fees, drayage fees, etc. is borne by the importer.

The goods are only released upon payment of all the costs by the shipper.

What is the Relation Between Shipping Incoterms and Customs Exam Fee?

Figure 4 Incoterms 2020

 Incoterms 2020

Shipping incoterms are shipping guidelines that indicate cost and risk sharing as well as liability ownership between buyer and seller.

The significance of this is to assist the customs broker know who to contact in case of customs exams fees.

For instance, we have the following shipping incoterms for sea freight which can guide on the customs exams fees.

Free On Board (FOB)

Free on Board indicates that the seller’s obligation ends at the point of departure port when the cargo is loaded. The importer therefore takes all the costs, risks and ownership of goods in transit till they are delivered at their destination.

Customs exams fees is handles by suppliers.

Cost, Insurance and Freight (CIF)

Here, the seller bears all the responsibility of goods during transit to the destination port. However, the buyer bears the all the delivery costs incurred in the quotation provided including customs exams fee.

C&F

Cost and Freight is almost similar to CIF terms only that it is cheaper. In C&F the seller does not take the risk responsibility for goods on transit.

The buyer bears all the costs involved during transit including customs exams fees. This incoterm does not include insurance cover hence maybe a risky option for buyers.

Answer this question along this line:

Apart from the Customs Exam Fee, What Additional Costs can come up during and after a Customs Exam?

Some of these costs include:

Per Diem or Demurrage Fee

This is a fee charged on the containers for failing to load or offload the ship at the agreed time. It is charged per day and can be very high if the delay is prolonged.

Storage Fees

The warehouse at the port will charge the importer for the storage space per day as they wait for inspection.

Admin Fee

This is charged for handling process of your shipment from booking for inspection to facilitation the whole process.

Drayage Fees

This is the cost of transportation of the cargo to and from the customs examination station. The payment is made to the transportation company that transfers the container.

Labor Cost

Any cargo that has been escalated to intensive customs exams will need to be offloaded and loaded back after inspection.

As a result, there will be need for man power to help with the exercise and this cost is on shipper.

How can I reduce the probability of a Customs Inspection during Importation?

Custom inspection is completely by luck and therefore you can have everything in order and still have your shipment flagged.

There is however, a few things you can do to reduce the chances of your shipment being held for inspection.

Proper Shipping Documentation

Having proper shipping documentation will help you avoid being held on account of inaccurate or insufficient paperwork. Having an established freight forwarder can you connect with a customs broker to help with the correct paperwork.

  1. Accurate Valuation of Goods

Goods on transit have a commercial invoice which indicates the value per item on board. The customs officials check the values on the invoice against those of similar nature during customs clearance process.

It is important to enter the correct values to avoid raising suspicion with the customs official.

Hire established Agents

Using the services of an experienced freight forwarder with a good history of shipping services reduces the chances of being flagged.

Avoid Consolidation of Goods

Shipping via less than container load (LCL) is the cheaper option for importers will less cargo. This however, may be a costly affair if the shipment is flagged for inspection due to the other goods.

The cost of customs exam fee will be shared among all the shippers whose goods are on board. Besides, you risk delayed delivery of goods as a result of inspection.

Get a Continuous Entry Bond (CEB)

Having a CEB is a sign of reliability of the shipper to the customs authority.

If you ship large quantities of cargo you may want to consider partnership with the customs authority against terrorism.

This partnership has its benefits if you qualify such as reduces customs inspection or front-of the-line inspection when flagged.

What is the Difference Between Customs Exam Fees for LCL and FCL Shipments?

Customs exams fee for LCL shipment is divided equally among all the shippers with cargos on board.

On the other hand, customs exams for FCL is borne by one shipper whose cargo is being transported.

Customs exams fees is cheaper for LCL shippers while very costly for FCL importers.

Whereas LCL shipment may lead to long delay due to exams failure of some goods, FCL goods once cleared are okay.

What are the Factors that are Generally Checked by Customs during a Customs Examination?

Customs officer look out for any suspicious material or goods in the cargo during an examination.

They also such for proper documentation of the packed goods.

How long do Customs Exams take?

Customs exams takes between a few hours to several days, weeks or even a month. This is due to factors such as type of customs inspection involved, the queue at the port, container size and the shipment.

VACIS examination takes a few hours using a machine and is non-intrusive whereas intense exams takes several days to weeks. Also, the queue at the port for particular inspection may delay your shipment.

Bigger containers carry large quantities of goods which require more time to examine during tailgate and intense exams. Type of shipment being inspected may determine the time taken during the examination.

New material or products are examined more closely as compared to known materials or type of shipment.

Are Customs Exams Regular?

Customs exams are random therefore, it is hard to tell if your shipment will be subjected to customs inspection during shipment.

The customs authority use their tools and algorithms to check all the goods that pass through the customs borders.

Depending on the set thresholds, goods that don’t meet the algorithm scores are held for any of the three customs review.

Can Customs Release Shipments before Payment of the Customs Exam Fee?

No.

Shipment is only released after the custom exams fees have been paid and any other related customs costs.

Is there a Deadline for paying Customs Exam Fee?

Yes.

The inspected goods are to be cleared with a specified timeline beyond which extra costs are charged.

Where can I get Information about Customs Exams and Fees?

The information about custom exams fees are available on the website of the customs authority within the jurisdiction.

Are there Exemptions to Customs Exam Fee?

No.

Custom exams fees must be paid for any shipment to be released

What happens if my Shipment fails a Customs Exam? Do I still Pay Fees?

Yes.

Customs exams fees will apply once the shipment undergoes the inspection process regardless of the outcome.

Failure of the exam only means more cost as they upgrade the customs review process of your cargo.

At BanSar, we are here to help you import easily from China to any global destination.

Depending on you import or export needs, we offer affordable solutions for your specific needs.

Contact us now for all your freight forwarding needs.

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