Customs/Duties at Destination Ports: A Comprehensive Guide for Ship Cars Ltd Customers

Navigating Customs Duties at Destination Ports: A Complete Guide

One of the most complex and often misunderstood aspects of international vehicle shipping is the customs clearance process at the destination country. As the UK exporter, you are not directly responsible for paying foreign import duties; however, understanding the process is crucial for your customer—the importer—and for setting accurate expectations. Failure to comply can result in the vehicle being held, incurring steep storage fees, or even being seized.

At Ship Cars Ltd, we ensure our clients are fully informed. This guide explains the key concepts of customs duties, the critical difference between temporary and permanent import, and how essential shipping documents like the Bill of Lading facilitate the entire process.

Understanding Customs Duties and Taxes

When a vehicle arrives in a new country, it is subject to the import regulations of that nation. The importer (your customer) is legally responsible for clearing the vehicle through customs and paying any applicable charges. These can include several types of fees Ship Cars Ltd:

Common Types of Import Charges

• Import Duty: A tariff levied on the imported goods. The rate is a percentage of the vehicle’s customs value and varies significantly by country and the vehicle’s age, engine size, and type.
• Value Added Tax (VAT) or Goods and Services Tax (GST): A consumption tax applied to the total value of the vehicle, which often includes the cost of the car, shipping, and insurance, plus the import duty.
• Other Taxes and Fees: Some countries have additional taxes, such as excise duty, environmental taxes (e.g., based on CO2 emissions), or administrative processing fees.

Crucial Point: The rules, rates, and calculation methods are determined solely by the destination country’s government. It is the importer’s responsibility to research these costs beforehand.

Temporary Import vs. Permanent Import: A Fundamental Choice

The importer’s intentions for the vehicle dictate the customs process. The choice between temporary and permanent import is critical and has major financial and legal implications destination.

What is Permanent Import?

This is the standard process for when a vehicle is being brought into a country to remain there indefinitely.

• Purpose: The vehicle is being imported to be registered, plated, and used within the country permanently. This applies to personal vehicles moving with an owner, or vehicles being sold.
• Duties and Taxes: All applicable import duties and taxes must be paid in full to secure the vehicle’s release from customs.
• Documentation: Requires a full customs declaration. The vehicle will typically need to be modified to meet local standards (e.g., headlights, speedometers) before it can be registered.
• Finality: This is a permanent decision. The vehicle cannot easily be re-exported without going through another customs process.

What is Temporary Import?

This is a special regime that allows a vehicle to be brought into a country for a limited period without paying import duties and taxes.

• Purpose: For tourists, students, or individuals on a temporary work assignment who will be taking the vehicle back out of the country. It is not for selling the vehicle or for permanent residence shipping companies.
• Duties and Taxes: Duties and taxes are suspended, not waived. They will become payable if the vehicle is not exported by the end of the authorised period.
• Documentation & Guarantees: The process often requires:
  • A Carnet de Passages en Douane (CPD), which is an international customs document that guarantees the payment of taxes if the vehicle is not re-exported.
  • A financial security or bond (e.g., a cash deposit or bank guarantee) equal to the potential duties.
• Time Limits: Strict time limits apply, usually from 6 to 12 months, with possible extensions. The vehicle must be exported before this period expires.

The Role of the Bill of Lading in Customs Clearance

The Bill of Lading (B/L) is the cornerstone document that enables the customs process. It is the legal title to the goods, and customs authorities will require it to verify the shipment’s details.

Paper Bill of Lading in Customs

• The Process: The original, physical Paper Bill of Lading must be couriered to the importer or their customs broker in the destination country.
• The Customs Requirement: The importer’s broker must present the original paper document to the shipping line to obtain a “Delivery Order,” which is then used for the customs declaration.
• The Risk: This method can cause significant delays if the documents are slow to arrive or get lost in the post, leading to high port storage demurrage charges.

Telex Release (Electronic Release) in Customs

This is the modern, efficient standard that streamlines the customs process.

• The Process: The original Bill of Lading is electronically surrendered at the port of loading. The shipping line sends an electronic release message to their agent at the destination port.
• The Customs Requirement: The importer can use a copy of the Bill of Lading and their photo ID to collect the vehicle and begin the customs clearance process immediately upon the ship’s arrival. There is no wait for physical documents.
• The Benefit: Prevents costly delays. This is the recommended method for almost all private vehicle shipments, as it allows the importer to start customs clearance without delay, avoiding storage fees.

The Importer’s Step-by-Step Customs Process

1. Appoint a Customs Broker: Most importers use a licensed customs broker in the destination country. The broker acts as their agent and handles the complex paperwork and interactions with customs.
2. Submit Documents: The importer/broker submits required documents to customs, which typically include:
   • Bill of Lading (Original or Copy, depending on the release type)
   • Commercial Invoice (proof of value)
   • Packing List
   • Proof of Ownership (e.g., copy of V5C)
   • Import Declaration forms
3. Customs Valuation: The customs authority will assess the vehicle’s value to calculate duties and taxes. They may accept the commercial invoice value or use their own methods.
4. Payment: The importer pays the calculated import duties, taxes, and any broker fees.
5. Customs Clearance & Release: Once payment is confirmed, customs issues a release notice. The shipping line is then authorised to release the vehicle to the importer.

Authority Link: GOV.UK – Exporting vehicles from the UK

Summary: Key Takeaways for a Smooth Customs Experience

• The Importer is Liable: Your customer in the destination country is responsible for all import duties, taxes, and the clearance process.
• Permanent vs. Temporary is a Critical Decision: Choosing the wrong import type can lead to major financial penalties and legal issues.
• A Customs Broker is Essential: Advise your customer to hire a professional customs broker in the destination country.
• The Telex Release is Highly Recommended: It prevents documentary delays, allowing faster customs clearance and avoiding port storage fees.
• Research is Non-Negotiable: The importer must research the specific costs and regulations for their country before shipping.

Ship with Confidence to Any Destination

Navigating foreign customs can be daunting. While Ship Cars Ltd handles the UK export and ocean freight, our expertise allows us to guide you and your customers on the requirements at the other end. We ensure the shipping documentation, including the Bill of Lading, is perfectly managed to facilitate a smooth customs experience.

Contact us today for a shipping quote, and let us provide the clarity and support needed for a successful international vehicle shipment.