Governments use export clearance, customs and security clearance processes to monitor trade, collect revenue and prevent criminal and terrorist activity. These processes also provide data that assist governments in assessing the state of their economies and the need for regulatory changes.

As countries continue to move towards integrating their economies and removing trade barriers, the regulatory processes of exporting and importing should become easier, however that does not remove the need for continued collection of data, therefore documentation will continue to play an important role in the import and export clearance processes.

Given the number of countries in the world, it is impossible to offer one set of guidelines that would cover all eventualities, especially because requirements and procedures can change frequently. However, due to the WCO and the adoption of international recommendations for customs and border security practices, there are some common activities required of exporters and importers.

First, take care of the basics of export clearance

The export clearance process will differ depending on several variables:

• The trade regulations of the exporting and importing countries
• Type of goods being exported, e.g. restricted, food products
• Free trade agreements currently in force
• Level of customs and border security agency’s use of information and communication technology, e.g. Electronic Data Interchange (EDI)

With consideration of the above variables, typical activities for obtaining export clearance could include all or some of the following:

• Registering with customs and border security agency, e.g. obtain export/ import business number
• Determining country of origin for the goods being exported
• Ensuring product is exportable, i.e. not a prohibited good or service
• Ensuring product is allowed into importing country
• Determining HS code for product
• Filing export declaration, if required
• Obtaining export licences or permits, if required
• Obtaining product-specific/packing certificates and import specific documentation
• Determining shipping method and identifying reporting time frame

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What do the Incoterms® rules say?

Submitting export declaration and other documentation to customs and border security agency prior to shipping, if required

• Shipping goods as agreed upon with importer
• Providing certificate of origin and other documents to importer or importing country’s customs and border security agency
• Keeping export records for required time period

The responsibility for the cost and completion of these tasks will vary depending on the sales contract agreement, usually defined by the agreed upon Incoterms® rules. It is to the mutual benefit of both the importer and exporter if they help each other complete the export clearance process.

Next, check the local laws and regulations for further requirements

There are other factors that must be considered when exporting goods, including:

International export regulations:

Most countries have some form of export control. For example, 41 countries are signatory members of the Wassenaar Arrangement, which was established in 1996 to establish controls over sales of arms and dual-use products and technologies.

The control lists covered by the Wassenaar Arrangement cover a wide range of goods and technologies, including protective clothing, materials used in aircraft construction, metal alloys, many chemical compounds, submersible vehicles, robots designed for underwater use, telecommunications equipment, satellite components and many forms of software.

In order to export any of the controlled products or technologies, certain procedures must be followed. The importing company will often have to assist the exporter to obtain an export licence from its government, usually by providing an import certificate or other documentation.

Where an export licence or permit is required, both the importing and exporting companies need to consider the time it will take to obtain exporting and importing licences/permits when planning delivery schedules. The importing company must also include clauses in its agreements to require the exporter to obtain all required licences.

Exchange control licences:

Most countries also have some form of foreign exchange control, i.e. controls over the amounts of foreign currency in their economies. This means that exporters may have to provide proof that they will be paid by the importer in a specific currency before they will be permitted to export valuable products. Importers may also require a licence from the exporting country to convert payments into local currency to pay exporters. Importers should check whether this is necessary because otherwise delays might result while exporters wait for payment.

Some countries require payment to be made by specific means, such as a letter of credit. Some governments also impose strict payment regulations on all foreign trade contracts in order to ensure payment.

Export quotas:

Export quotas are restrictions imposed by a government on the amount or number of goods or services that can be exported annually. The purpose is to ensure that domestic prices of this good or service do not increase because of exports. Importing companies must make sure there are no foreign government quotas that could make their purchase agreement unsustainable.

Have all your documents ready – here’s what else you may need

Standard export transactions require that the exporter provide standard documentation to accompany shipments of goods:

• Commercial invoice
• Bill of lading or transport document
• Export declaration
• Packing list
• Insurance documentation
• Certificate of origin

Documentary requirements can vary significantly, due to the specifics of a transaction or shipment, as well as the payment and financing arrangements, which may be based on the tendering of documents by the exporter, depending on the agreed mechanism of settlement.

In addition to this standard list of documents, some export trades might require additional documents because of complications or the nature of the goods being transported.

These documents include the following:

• Export licences or permits: Either general (permitting any good to be exported, usually for shipments exceeding a specific value) or specific (required for restricted or controlled goods).
• Dangerous goods declaration: A statement about the contents and emergency handling of a dangerous goods shipment.
• Exchange control document: A declaration that the payments received for the shipped goods follow regulations.
• Inspection certificates: A certificate confirming that certain products (including packing materials) have been inspected for safety or conformity purposes.
• Consular invoices: Invoices provided by the importing country’s consulate located in the exporter’s country approving the shipment for import. It is important that the information on documents is complete, consistent, and accurate, whether electronic or hard copy.
• Intellectual property registration: When exporting to another country, it may be necessary to ensure that intellectual property is protected. It is prudent to check and register patents, trademarks, and copyright in the importing country to prevent infringement. Despite efforts, protection will depend on how rigorous the importing government’s regulations are, as well as the level of enforcement.

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Jim Clark, CITP|FIBP is the CBSA director responsible for trade operations in Prairie region. He oversees the customs officers who are responsible for conducting compliance verifications on companies who participate in importing and exporting.

Jim has an immense appreciation for the challenges, complexity and opportunities that the global trade industry brings to those who participate in it.

However, when he first began his long career of almost three decades in public service, Jim had no idea he would end up working in this sector.

Jim began his career as a social worker with the Government of Alberta, after graduating with a diploma in social service and social work from Mount Royal College in 1985.

In 1989, Jim moved on to take on the role of Area Counsellor for Veteran’s Affairs Canada, a position he held until 1997 when he entered a federal management development program called the Career Assignment Program.

“The Career Assignment Program’s mission was to identify people with “executive potential” and give them training and learning assignments to help them be successful in executive level competitions. The program has since been discontinued due to budgetary issues.”

Jumping at the chance to tackle trade

At the end of the program, Jim was offered a chance to switch gears and take on a role at the Canadian Border Services Agency, working in customs compliance.

It was his first taste of global trade and he found himself enjoying this new foray into a complicated, challenging and dynamic industry.

Prior to 2001, I had always worked in health and social programming for a variety of departments, and when I was given the chance to work in trade in customs, I jumped at it.

“Up until this point, my career had been very focused on human services. This was a significant departure for me, a job working in an enforcement/compliance organization and trade is huge.”

“There is always a different, new problem every day. The intellectual challenge was always apparent.”

Jim says what he enjoys most about working in global trade is the variety and complexity found in his everyday work experience. No two days are the same.

“I have found the challenge of the work to be an amazing experience. I enjoy the fact that you have so many different issues to deal with. Every day you might talk about horses, hinneys, auto parts, furniture, grains, jet engines, pumps, clothing and textiles – and everything is treated slightly differently.”

“Since 2001, I have worked exclusively in dealing with trade issues at the regional, national and occasionally international levels.”

“Every day there was something new to learn, and as we looked at the different goods and commodities and the issues that we faced, I knew early on that I was hooked.”

Meeting fascinating people in exotic locations

Over the course of his trade career, Jim has had the opportunity to do several international assessment missions, taking him to places as diverse as Afghanistan, Pakistan, Colombia, Peru, El Salvador and Costa Rica.

“Kabul was intense. Islamabad was beautiful – our embassy driver assured us that Islamabad was not the ‘real Pakistan’. When we told him that we would be going up to Peshawar, he said ‘that is the REAL Pakistan’.”

These missions were carried out on behalf of the Government of Canada in support of customs modernization, and were linked to trade facilitation.

Each mission had a particular focus, such as a post-clearance audit. Others were on authorized economic operators (trusted trader programs) or sometimes a review of business processes and other capacity building and strengthening.

Jim says of the experience,

It is amazing to work with people from around the world and to see the challenges that many of our colleagues face as we work to keep the global economy moving.

“We met with people who work in the various administrations, as well as with consultants and other government departments working to improve the functioning of the various governments. In some parts of the world, corruption is so commonplace that it is the number one concern of government managers and at times they feel powerless to deal with it.”

After nearly fifteen years, working as Director of Trade Operations, Jim still finds his work rewarding.

“I still find everyday working in the trade environment interesting and challenging.”

“On any given day I may speak with managers about contentious files or issues and talk to importers or other members of the trade community about a variety of issues related to customs clearance and compliance with trade, customs and tax rules, laws and regulations.”

Reinforcing 15 years of hard work and leadership

In 2015, Jim decided to seek his elite CITP®|FIBP® designation to signal his commitment, proficiency and leadership in international trade.

He successfully earned his designation in August 2015, joining his peers in the global trade elite community.

“I took the executive route to my CITP®|FIBP® designation because of the amount of time and the breadth of experience I have gained in this area. I believe it adds credibility and it adds valuable connections to my network. I am pleased to say that some of my current and former colleagues are also CITP|FIBP’s, which was part of the reason it interested me.”

I chose to apply for the CITP®|FIBP® designation because it is the hallmark of trade professionals, and to me, a valuable credential that will help me with my current career, as well as for my future plans when I leave the public service.

On top of earning his designation, Jim has been honoured for his work in trade by being awarded the Queen’s 50th Jubilee medal in 2003, as well as a Queen’s 60th Jubilee medal in 2013.

The medals “honour significant contributions and achievements by Canadians,” and are administered by the Chancellery of Honours at Rideau Hall.

They were awarded to 60,000 citizens and permanent residents of Canada who made a significant contribution to their fellow countrymen, their community, or to Canada over the previous sixty years.

As for Jim’s future in global trade, he will continue to be a leader in his international trade community and serve the public capably and expertly.

“I have been involved with IPAC, I look forward to working on trade and leadership past the finish of my public service career. I would be very interested in consulting opportunities on customs and trade as well as management and leadership, particularly in relation to public service.”

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