Customs Procedures in Singapore

por con No hay comentarios Blog

Every time a company purchases an imported product it must fulfill with the regulations established by the Customs Regime of that country, in this sense we will talk about the customs procedures in Singapore in this article.

Firstly, it is important to know that Singapore does not belong to any customs union. Rather, it’s a member of the Asia-Pacific Economic Cooperation Forum (APEC) and applies the Harmonized Customs System.

According to the World Trade Organization, it is defined as the nomenclature based on a classification of goods according to a 6-digit code system accepted by all participating countries. They may establish their own sub-classifications with more than 6 digits for tariff or other purposes.

It consists on a six-digit combination that identifies the products based on their characteristics.

More than 200 countries and 98% of global trade use this product nomenclature system known as the Harmonized System which is regulated by the World Customs Organization.

Therefore, one of the points that any PYME or company should take into account when trying to trade their products in the international market is that it’s not enough to know the current name of the goods that they sell, but also it will be necessary to indicate the “code” That identifies it.

This “code” will appear frequently in the export and import documentation, and will be essential in determining the applicable tariffs for each product.

The legal regulations that rule the entire area of customs procedures in Singapore are:

  • Customs law
  • Goods and Services Tax Law

Both laws are responsible for regulating all merchandise that enters the country through import.

However, the import process in Singapore is quite open, most products can enter the country without further restriction, exceptions include products with chewing gum and weapons.

Regarding the tariffs and taxes corresponding to the import activity, the country is free of taxes except for products such as automobiles, gasoline, tobacco and alcohol.

However, every good that enters the country through importation is submit to the laws, and requires a customs permit to consider the activity and order the payment of corresponding taxes.

In Singapore, there is a licensing system that is required for 6% of total imports, related to fresh fruit and vegetables, plants, meat, animals, medicines, diffusion products (automatic licenses), and also a series of products that may represent a risk to health or to the State (without automatic licenses).

These licenses are issued by the Singapore International Company, another body that can also take part is the Ministry of Health.

Incoterms provide security and transparency in international trade

por con No hay comentarios Blog

Carrying out a purchase and sale operation leads to a real need for the parties to establish clear rules for the negotiation, this in order to avoid inconveniences within the process, under this premise Incoterms are born.

Incoterms are nothing more than the most used international legal instrument in the world when performing a purchase or sale negotiation. It’s established by the International Chamber of Commerce and its use is generalized and accepted for sale contracts throughout the world.

It is important to have in mind that, as all legal regulations, their misinterpretation or application have often led to conflicts or litigation between the parties, that is why understanding their rules and adhering to them is essential when performing a contract.

Today rather than learning how to interpret them, we will talk about their importance in international trade and their latest updates.

What are Incoterms?

It’s the acronym for International Commercial Terms, a concept that groups together 11 international rules created, managed and control by the International Chamber of Commerce. The first date from 1936 and have suffered changes and updates.

Its main objective is both to facilitate the operation of international trade transactions and to establish a set of terms and rules that define the rights and obligations of both the seller and buyer.

Some of the Incoterms that are established in a sale contract are the following:

•          Free Alongside Ship

•          Cost and Freight

•          Carriage and Insurance Paid To

•          Delivered Duty Paid

Since January 1 of this year, the new rules of Incoterms 2020 came into effect.

One of the points that were improved in the Incoterms was a market need in relation to the bill of shipment.

The different levels of insurance coverage in Cost, Insurance, Freight or Transportation.

Includes arrangements for transportation with own means, delivered duty paid or delivery at terminal.

Includes the requirements for Cost, Insurance and Freight, among others

With the correct use of Incoterms, companies have confidence in the interpretation of the terms of negotiation between the buyer and the seller, since international rules are applied which help to define in detail the distribution of obligations between the parties, making a direct reference to the transport that is used and to the place where the documentation is delivered, as well as the procedures, expenses and payments that must be sent.

SHOSHAN - trade finance

Merchandise value and its importance for international trade

por con No hay comentarios Blog

One of the main challenges that arises in the customs sector when processing merchandise resulting from an import is determining the customs value or the value of the transaction.

The proper application of this evaluation procedure allows promoting both the fluidity of trade, as well as the transparency of operations and the economic growth of the country.

Who is responsible for evaluating or determining the value of a merchandise?

The authority in charge of determining this is basically the Technical Committee for Customs Valuation of each country, which is made based on a number of regulations and procedures, the customs value of each merchandise.

The methodology to establish said customs value for imported merchandise subject to tax rates is established in the Agreement Relating to the Application of Article VII of the General Agreement on Tariffs and Trade of 1994.

Every country member of the

have an obligation to implement the Agreement and apply this methodology. Those who are not members also choose to adopt it making it applicable to most international trade.

The same is established according to the sum of three fundamental elements:

1- The value of the merchandise

2- Amount of insurance.

3- The cost of freight.

For what purpose is this measure applied?

Regarding international trade, guidelines or mechanisms have been developed to promote the principle of free competition using international standards of cooperation between companies and tax authorities that allows establishing the profit margins of most companies worldwide.

The customs value of imported goods is used for the following reasons:

• As a basis to determine the customs tax obligation for imported goods when ad valorem taxes apply.

• The classification of customs duties and the preferential origin are other key elements necessary to establish the tax obligation.

• Valuation, classification and origin are also vital for international trade statistics.

Currently, the World Customs Organization is working together with the Organization for Economic Co-operation and Development and the World Bank Group to encourage Customs and tax administrations to establish bilateral lines of communication in order to exchange knowledge, practices and data, when possible, which would help to ensure that each authority has the widest possible vision of a business, its compliance record so they can make informed decisions on the correct tax liability.

Establishing the value of imported merchandise is a starting point of what the final price of the product will be to the consumer from which the profit margins of the company that performs said import operation and consequently its tax responsibilities will derived; that is the reason why it is important that governments and companies are able to adhere to the regulatory frameworks established in this matter.

Customs agencies foster a safer global trade

por con No hay comentarios Blog

Due to the continues changes in the global economy, the international trade has become a primary activity to the economical grow and prosperity of any country. The world’s trade systems have changed significantly creating new methods for the purchase and sale of products that often require transportation from one continent to other.

The progressive increase in the international trade shows a prevailing need in the market of agents that provides advise, support and guarantees to those companies that needs to sell or buy a product somewhere else in the world but are unaware of the legal and logistic processes of this activity. Thus, several customs agencies appeared and, to a better understanding we will define it in this article.

Basically, the customs agency is the legal entity authorized to provide counseling services on customs matters focused on ensuring its users’ compliance of the legal regulations pertaining the import, export, customs transit and any operation or customs procedure intrinsic in such activities.

Therefore, a customs agency ensures the safe conditions so an entity may be able to trade a product or goods without further risks considering the legal regulations issued in the directives of the World Customs Organization (WCO).

Advantages of having a customs agency:

  • Endorse in the entire legal process of import and export.
  • Manage and facilitate the requirements needed prior to the dispatch/shipment or delivery of goods.
  • Provide counseling during the process of logistic management.
  • Promptness in the processes of dispatch/shipment and delivery of goods.
  • Decreases the operative costs.
  • Inspection and control of products.
  • Storage and distribution of goods.
  • Oversees the compliance of the international trade regulations.
  • Work with the authorities of each country to reduce tax evasion, smuggling and money laundering.

Obligations of the customs agencies:

All the advantages that the endorsement of a customs agency has to offer to your business or entity are based on the regulations of the WCO; among its responsibilities are:

  • Monitoring the services offered to the public.
  • Availability to provide services twenty four (24) hours.
  •  Integrated management of the logistic chain.
  • Authorization of the cargo inspections.
  • Declaration of goods.
  • System for the risk assessment of goods.
  • Previous electronic information.
  • Ongoing communication.
  • Assessment of the goods’ safety, among others.
  • Manage the transportation of the goods to the customs warehouse
  • Present before the customs authorities the necessary documentation to each process.

Due to the services provided by the customs agencies, the international trade activity currently can be performed safer and reliable; each day new private entities are added to the acquisition of this service securing their investment.

Now, therefore, considering the fundamental roll in the security and assistance of the global trade given by the customs agencies, ¿Have you evaluated the chance of getting this service for your company?