Analysis on Differences Between Formal and Informal Customs Clearance

A Detailed Analysis What Are the Differences Between Formal and Informal Customs Clearance?

With the continuous development of international trade, customs clearance is playing an increasingly important role in import and export businesses. Customs clearance refers to the process where importers or exporters or their agents apply to customs authorities for handling customs procedures. However, there are various ways of customs clearance, among which formal and informal customs clearance are the most common. So, what are the differences between formal and informal customs clearance? This article will provide a detailed analysis.

I. Differences in Customs Procedures

Formal customs clearance requires importers or exporters or their agents to submit paper customs declarations to customs authorities and provide relevant supporting documents such as bills of lading, invoices, packing lists, and contracts. Additionally, they must declare at the designated time and location, and undergo customs inspection on-site. In contrast, informal customs clearance is relatively simpler. It usually only requires submitting electronic customs declarations and accompanying documents via email, fax, or post, and completing online declarations within the stipulated time. On-site inspections are not required.

II. Different Regulatory Requirements

Formal customs clearance applies to goods subject to customs supervision, such as restricted imports/exports or goods requiring permits. These goods must be declared according to customs regulations during import/export processes and remain under customs supervision throughout transportation, storage, and sales. Informal customs clearance, on the other hand, applies to general trade or goods that do not require customs supervision, such as personal items. These goods only need to meet basic requirements for general trade, including import/export licenses and foreign exchange management.

III. Differences in Fees and Time

Formal customs clearance involves paying corresponding taxes and regulatory fees, and it requires customs review, so the declaration costs are relatively high. Moreover, formal customs clearance involves customs reviews and inspections, taking longer time. Informal customs clearance, however, can usually be completed quickly online, with lower costs and no requirement for taxes, regulatory fees, or inspections.

IV. Differences in Applicable Scope

Formal customs clearance applies to goods subject to customs supervision and special trade methods, such as processing trade and goods from bonded areas. Informal customs clearance applies to general trade and other goods not subject to customs supervision. In some special cases, such as emergency relief supplies and cross-border e-commerce, informal customs clearance is also used.

In conclusion, formal and informal customs clearance differ significantly in terms of customs procedures, regulatory requirements, costs, time, and applicable scope. Enterprises must evaluate and choose the appropriate customs clearance method based on actual circumstances to ensure compliance and efficiency in import and export operations. At the same time, relevant departments should strengthen standardization and management of customs clearance methods to promote trade facilitation.