Customs
Customs is an authority or agency in a country responsible for collecting tariffs and for controlling
the flow of goods, including animals, transports, personal effects, and hazardous items, into and out
of a country.[1][2] Traditionally, customs has been considered as the fiscal subject that charges
customs duties (i.e. tariffs) and other taxes on import and export. In recent decades, the views on
the functions of customs have considerably expanded and now covers three basic issues: taxation,
security, and trade facilitation.[3]
A customs officer in Amsterdam Airport
Schiphol checks the luggage of an incoming
traveler.
Vienna Convention road sign for
customs
Each country has its own laws and regulations for the import and export of goods into and out of a
country, enforced by their respective customs authorities; the import/export of some goods may be
restricted or forbidden entirely.[4] A wide range of penalties are faced by those who break these
laws.[5]
Overview
Officers from US Customs and Border
Protection boarding a ship
Taxation
The traditional function of customs has been the assessment and collection of customs duties,
which is a tariff or tax on the importation or, at times, exportation of goods. Commercial goods not
yet cleared through customs are held in a customs area, often called a bonded store, until
processed. Authorized ports are usually recognized customs areas.
Trade facilitation
A more recent objective of customs has been trade facilitation, which is the streamlining of
processing of import and export of goods to reduce trade transaction costs. The contemporary
understanding of the “trade facilitation” concept is based on the Recommendation No. 4 of
UN/CEFACT “National Trade Facilitation Bodies”.[6] According to its provisions (para. 14),[6]
facilitation covers formalities, procedures, documents and operations
related to international trade transactions. Its goals are simplification,
harmonization and standardization, so that transactions become easier,
faster and more economical than before.
Security
The Finnish police, customs and
border guard working together in
2006
The September 11, 2001 terrorist attacks in the United States has become the cardinal factor in
prompting a significant strengthening of the security component of modern customs operations,
after which security-oriented control measures for supply chains have been widely implemented for
the aims of preventing risk identification. At airports today, customs functions as the point of no
return for all passengers; once passengers have cleared customs, they cannot go back. Anyone
arriving at an airport must also clear customs before they can officially enter a country. Those who
breach the law will be detained by customs and likely returned to their original location.[7] The
movement of people into and out of a country is normally monitored by migration authorities, under
a variety of names and arrangements. Border control authorities normally check for appropriate
documentation, verify that a person is entitled to enter the country, apprehend people wanted by
domestic or international arrest warrants, and deny the entry of people deemed dangerous to the
country.
The most complete guidelines for customs security functions implementation is provided in the
World Customs Organization Framework of Standards to Secure and Facilitate Global Trade
(SAFE),[8] which has had five editions in 2005, 2007, 2010, 2012, and 2018, respectively.
Privatization of customs
The customs-and-duty house at the
port of Haifa, Israel
Customs is part of one of the three basic functions of a government, namely: administration;
maintenance of law, order, and justice; and collection of revenue. However, in a bid to mitigate
corruption, many countries have partly privatised their customs. This has occurred by way of
contracting pre-shipment inspection agencies, which examine the cargo and verify the declared
value before importation occurs. The country's customs is obliged to accept the agency's report for
the purpose of assessing duties and taxes at the port of entry.
While engaging a pre-shipment inspection agency may appear justified in a country with an
inexperienced or inadequate customs establishment, the measure has not been able to plug the
loophole and protect revenue. It has been found that evasion of customs duty escalated when pre-
shipment agencies took over.[9] It has also been alleged that involvement of such agencies has
caused shipping delays.[4] Privatization of customs has been viewed as a fatal remedy.[9] In many
countries, import and export data are issued on the basis of national laws (Transparency Laws /
Freedom of Information Act).[10]
There has, however, been some speed bumps when transitioning customs over from the public to
private sector. Factors such as an incompetent private sector, government's reluctance to change
the traditional roles of customs, neglecting priority-setting and lack of transparency in the transition
process have slowed the rate at which the public to private transition has taken place.[11]
Red and green channels
Customs control zone at
Sheremetyevo International
Airport, Moscow Oblast, February
2019
In most countries, customs procedures for arriving passengers at major international airports, ports
and some road crossings are separated into red and green channels.[12][13] Passengers with goods
to declare (carrying goods above the permitted customs limits and/or carrying prohibited items) go
through the red channel, while passengers with nothing to declare (carrying goods within the
permitted customs limits and not carrying prohibited items) go through the green channel. However,
entry into a particular channel constitutes a legal declaration, so if a passenger goes through a
green channel and is found to be in possession of a prohibited item, or failure to declare dutiable
items the passenger can be subject to a fine, the item being seized, and in some cases result in an
arrest and criminal prosecution. Each channel is a point of no return, once a passenger has entered
a particular channel, they cannot go back.
Australia, Canada, New Zealand, and the United States do not officially operate a red and green
channel system; however, some airports have adopted this layout.
Blue channel
Airports in EU countries also have a blue channel. As the EU is a customs union, travellers between
EU countries do not have to pay customs duties. Value-added tax (VAT) and excise duties may be
applicable if the goods are subsequently sold, but these are collected when the goods are sold, not
at the border. Passengers arriving from other EU countries go through the blue channel, where they
may still be subject to checks for prohibited or restricted goods. Luggage tickets for checked
luggage travelling within the EU are green-edged so they may be identified.[14][15] In the recent years
usage of the blue channel has become limited mostly to flights between the Schengen Area
member states of the EU and the remainder of EU member states, while flights which cross the
border of neither the customs union nor the Schengen Area are in practice treated as domestic, and
therefore, the people travelling on them do not go through customs channels at all.
Red point phone
All airports in the United Kingdom operate a channel system; however, some airports do not have a
red channel, instead having a red point phone which serves the same purpose.
Summary of basic custom rules
Europe
The basic customs law is harmonized across Europe within the European Union Customs Union.
This includes customs duties and restrictions. Customs tax typically applies from €22 to €150. For
more information, see regulations of each member state.
For customs declarations in the EU and in Switzerland, Norway and Iceland, the "Single
Administrative Document" (SAD) is used as a basis.[16]
Germany
Up to €22, there are no taxes. From €22 up to €150, it is necessary to pay VAT (EUSt in Germany),
which is 7% or 19% depending on the goods. From €150 it is necessary to pay VAT and customs.
Romania
Customs may be very strict, especially for goods shipped from anywhere outside the EU. Up to €10
goods/package.
Italy
Customs in Italy takes additional 22% VAT (Value-added tax) for goods imported from outside the
European Union even if the VAT is already paid to the origin country sender.
Czech Republic and Slovakia
Up to €22, there are no taxes. From €22 up to €150, it is necessary to pay VAT (DPH in
Czech/Slovak), which is 21%. From €150, it is necessary to pay VAT and customs. Customs may
range from zero to 10% depending on the type of imported goods.
Ukraine
Ukraine has had 5 reforms of its customs authorities. The recent one, in 2019, reorganized State
Fiscal Service into the State Customs Service. The reform attempt seeks to digitize customs
procedures, get market-level wages, innovate customs checkpoints, integrate into EU customs
community, open reference database of customs inspections.[17]
The Americas
Canada
In 2003, Canada replaced the Canada Customs and Revenue Agency with the current Canada Border
Services Agency (CBSA). The CBSA performs searches at Canadian ports of entry and detains
illegal immigrants, along with preventing contraband from entering the country.[18] Tariffs are
administered under Canada's Customs Tariff Act.
United States
Every person arriving in the US is subject to inspection by Customs and Border Protection (CBP)
officers for compliance with immigration, customs and agriculture regulations. This public service is
administered on almost a million visitors who enter the US daily.[20] Travelers are screened for a
number of prohibited items including; gold, alcoholic
Predicted US customs revenue[19]
[21]
beverages, firearms and soil. A wide range of penalties
Predicted revenue (billion
face those non-compliers.[22] Year
USD)
The United States imposes tariffs or "customs duties" on 2017 35
[23]
imports of goods, being 3% on average. The duty is
2018 38
levied at the time of import and is paid by the importer of
2019 41
record. Individuals arriving in the United States may be
exempt from duty on a limited amount of purchases, and 2020 43
on goods temporarily imported (such as laptop 2021 46
computers) under the ATA Carnet system. Customs duties 2022 47
vary by country of origin and product, with duties ranging
2023 49
from zero to 81% of the value of the goods. Goods from
2024 51
many countries are exempt from duty under various trade
agreements. Certain types of goods are exempt from duty 2025 52
regardless of source. Customs rules differ from other 2026 54
import restrictions. Failure to comply with customs rules
2027 56
can result in seizure of goods and civil and criminal
2028 58
penalties against involved parties. The CBP enforces
customs rules. All goods entering the United States are
subject to inspection by CBP prior to legal entry.
Uruguay
Uruguayan Customs place a cap on the importation of personal packages to up to 3 packages of a
nominal value of no more than US$200 which can be entered into the country without extra charge.
For a package to be included in the 3 free slots, the addressee must register the package with the
Uruguayan Postal Service linking the tracking code, their address, national ID number phone and
email address. Should a package arrive prior to registration the package must pay the 60% tax and
no less than US$10. Any personal package worth more than US$200 or after the 3 free packages,
must pay a 60% tax. This severely limits the public's ability to buy products online. Due to Uruguay's
small population and market, many popular and specialty products are unavailable in the regular
marketplace, forcing Uruguayans to strategically pool several purchases together and max each one
of their free slots.
Argentina
Customs may be very strict. Goods valued up to US$500[24] brought in by plane and up to US$300 by
sea or land are free of duties and taxes, cellphones and laptop computers are duty free regardless
of their value only one per passenger, clothing and other personal use items are free of taxes. Above
those values, tax is 50% of the value of all acquired goods summed up.
Asia
Indonesia
Main article: Directorate General of Customs and Excise
Direktorat Jenderal Bea dan Cukai (abbreviated Bea Cukai or DJBC), works under the Ministry of
Finance (Indonesia) and performs various duties relating to the traffic of goods entering or leaving
the Customs Area such as the collection of import/export duties, monitoring prohibition and
restriction of certain goods, collecting excise and other state levies based on legislation apply.
DJBC envisions itself as "The leading customs and excise institution globally" and has three
missions:
to facilitate trade and industry;
to protect the border and the community from smuggling and illegal trade; and
to optimize state revenue in the field of customs and excise [25]
International Customs Day
Customs, Tolls or Duties of the
Corporation of Kinsale (1788)
International Customs Day recognizes the role of agencies and customs officials in maintaining
border security around the world. It focuses on the workers and their working conditions as well as
the challenges that some customs officers face in their job.[26] Custom agencies hold employee
appreciation events where custom officers are recognized for their work. Several agencies also hold
events for the public where they explain their jobs and responsibilities in a transparent manner.[26]
Each year, at the end of January is celebrated the International Customs Day with a particular
theme, as follows:
2024, the chosen theme was 'Customs Engaging Traditional and New Partners with Purpose'.[27]
2023, the chosen theme was 'Nurturing the Next Generation: Promoting a Culture of Knowledge-
sharing and Professional Pride in Customs'.[28]
2022, the chosen theme was 'Customs Digital Transformation by Embracing a Data Culture and
Building a Data Ecosystem'.[29]
2021, the chosen theme was 'Customs bolstering Recovery, Renewal and Resilience for a
sustainable supply chain'.[30]
2020, the chosen theme was 'Customs fostering Sustainability for People, Prosperity and the
Planet'.[31]
2019, the chosen theme was 'SMART borders for seamless Trade, Travel and Transport'.[32]
2018, the chosen theme was 'A secure business environment for economic development'.[33]
Chosen theme for previous editions 2009 - 2018.[34]
See also
Customs Trade Partnership against Terrorism
Duty (economics)
Port authority
World Customs Journal
World Customs Organization
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ms-administration/penalties) . Retrieved 2019-03-11.
23. "Federation of International Trade Associations, country profile: United States" (https://web.arc
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24. "Customs: Government raises tax free limit from U$S300 to U$S500 for imported goods (in
Spanish)" (https://www.infobae.com/economia/2018/11/07/aduana-el-gobierno-aumenta-el-to
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25. "Visi, Misi dan Fungsi Utama DJBC" (https://www.beacukai.go.id/arsip/abt/visi-misi-dan-fungsi
-utama.html) .
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y) . www.timeanddate. Retrieved 2019-03-11.
27. "World Customs Organization" (https://www.wcoomd.org/en/about-us/international-customs-d
ay/icd-2024.aspx#:~:text=INDONESIA%20:Customs%20celebrated%20ICD%202024,to%20addr
ess%20global%20trade%20dynamics.) . www.wcoomd.org. Retrieved 2024-07-16.
28. "World Customs Organization" (https://www.wcoomd.org/en/media/newsroom/2023/january/i
nternational-customs-day-2023.aspx) . www.wcoomd.org. Retrieved 2024-07-16.
29. "International Customs Day 2022" (http://www.wcoomd.org/en/about-us/international-custom
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30. "International Customs Day 2021" (http://www.wcoomd.org/en/about-us/international-custom
s-day/previous-editions/icd-2021.aspx) . www.wcoomd.org. Retrieved 2022-09-09.
31. "International Customs Day 2020" (http://www.wcoomd.org/en/about-us/international-custom
s-day/previous-editions/icd-2020.aspx) . www.wcoomd.org. Retrieved 2022-09-09.
32. "International Customs Day 2019" (http://www.wcoomd.org/en/about-us/international-custom
s-day/previous-editions/icd-2019.aspx) . www.wcoomd.org. Retrieved 2019-02-24.
33. "International Customs Day 2018" (http://www.wcoomd.org/en/about-us/international-custom
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External links
World Customs Organization (http://www.wcoomd.org)
EU Customs (http://ec.europa.eu/taxation_customs/index_en.htm)
