4 Secrets of late delivery from China suppliers Part 2:Late Shipping Caused by China Customs

Filed Under:Shipping & Logistics   |   Viewed by: 13156 Persons

Before the products are loaded to the ship, suppliers need to make custom clearance at China Customs.

I am sure that many buyers are not aware that there are risks that China Customs might not release or even detain the products, which will cause late shipping.

a. improper categorization of HS code
For most products, the suppliers can get tax refund from the government based on the HS code of the products. The tax refund rate vary from 0 to 17%. And because of that, many suppliers will use wrong HS code when conducting customs clearance, just to get higher tax rebate rate. For example, if I export door mats, these door mats are made of rubber back(70%) and carpet top(30%), if I use the HS code of rubber, the tax refund rate is 9%, if I use the HS code of carpet, then the tax refund rate is 17%. As the products are mainly produced by rubber, so I should adopt the HS code of rubber when make custom clearance, however, many of the suppliers will use the HS code of carpet when making custom clearance.

If the customs find it out, they will detain the products until the supplier correct the HS code and pay penalty. This procedure as well as investigation will take months to finish, these months of delay will cause huge loss and damage to buyers.

b. intelligence property rights protection
We have exported some gift products to US baseball champion team SF Giants. On the gifts, the logo of sponsor Toyota was printed.

When we made the custom clearance through China Customs, we were requested to submit an authorization letter from the brand owner Toyota, giving us the authorization to use the logo of Toyota. We were not prepared for it, so the products were detained due to suspected intelligence property rights infringement.

We then contacted our client(who is a gift promotion company, who got the order from a Toyota dealer in California), our client then tried to contact Giant team, Toyota dealer association, so many people in the middle…….

After 10 days, we got the authorization letter, we then submitted to the Ningbo Customs, the products were then released, but we have missed the delivery time by then.

If you are not sure that your products will infringe IP rights of third party, you can inquire on the IP rights registration system of China Customs at http://www.haiguanbeian.cn/applyrecord/

c. When suppliers send out the container, they will also prepare a set of documents which will be used for custom clearance.

Normally these documents will be sent to shipping agent, shipping agent will then send it to their custom house brokers for use of custom declaration.

A mistake on the document will delay the custom clearance(hence shipping, as the products won’t be released without going through customs). If there are mistakes, the suppliers will need to correct the documents, resend to shipping agent for customs clearance.

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