Lecture 7

Customs Procedure

Dr. Md. Shahidul Islam

Member, National Board of Revenue (NBR)
Cell: 01955555555
E-mail: [email protected]
 Overview of the
Examination Process
 • Random • Risky HS
Based on risk Based on risk
Selection profiles, some Code
management
B/Es are
randomly algorithm some
selected for HS code products
The 100% are selected for
examination 100%
Examination examination

and Sample
JC (Jetty)
Collection
Process: Its not 100% Sometimes the
examination. assessment
Initiation Usually group requires
common for 100%
• Sample chemical, examination • Required
Collection radiation for some risky by the
BSTI Tests items Group
 Alpha Sample
• AC/DC of
•Sends Bravo the Zone Collection
JC gives
to Charlie posting by
Jetty Zones assigning
names of
Delta AROs 100%
Examination
 Sample Collection
•Process
Assigned ARO gives
authorization to keep down the
container
• The C&F agent opens the
lock/seal in presence of
the assigned ARO
• The ARO collects the sample, put
signature on the sample and
sends it to the sample
section
• The sample is used for further
chemical, radiation, BSTI etc
 Examination
•
Process
Assigned ARO signs the container
sheet to keep down the
container
seal number with the number
• The assigned ARO matches the
mentioned in the BL, and the
C&F agent keeps down the
container and opens the
lock/seal in presence of the
assigned ARO
Examination
Process
• C&F Agent, with the help of
labors unloads the
cartons/packet/plates and
organizes those as per the
detailed packing lists
• The assigned ARO matches the
description, quantity, quality, type
part number, model number etc
of the imported products against
the Packing Lists, Bill of Entry and
Commercial Invoice
 If the description, quantity,
Examination
quality, part number model
number etc of the imported
Process
goods matches with the
declaration as per the BE, PL
and CI, then the assigned
ARO gives the examination
report through the
Inspection Act and the
AC/DC of the zone signs off
the BE and send to group for
assessment (along with
samples and/or images if
Examination
Report
Online Examination
Report through
Inspection Act
Registering • In case the description,
quality, part number etc
an Anomaly
matches but the quantity
or weight is higher than
declared
• If the excess weight or
quantity is below 5% of
the declared, then the
over weight is
mentioned in the report
as overload
• If the excess is equal or
higher than 5% then
an anomaly is
• If any goods is found out
of declaration, an
anomaly is registered.
• If the description and/or
quality of the declared
goods do not match with
the actually imported
goods the an anomaly is
registered.
• If the declared C/O does
not matches with the
C/O found on goods, an
anomaly is registered
Challenges in
Examination
• In many cases
rolls/cartons/
packets are
homogenous and
not
the C&F agents
can not provide a
detailed packing
lists with
accurate serial
number
• There was no detailed
packing list for this
consignment
• The declaration was
‘Machine parts’ only
• We could find 172
different goods in
different quantity and
weight
• All the products were
declared under codes with
1% CD, whereas some of
those were to be classified
under 25% CD
• In many cases, to save the
unloading and reloading costs,
the C&F agents claims that the
product can not be unloaded
for examination.
• In many such cases we found
undeclared products behind
the front rows
• Except for the large glass
sheets and large machines, all
other goods can be unloaded
for examination using the
labor and equipment provided
by the port authority
• After the transfer orders
there is usually a lag time
between the release of
officers and joining of new
officers due to the transition
time
• Some places like Gates can
not be kept vacant and
that’s why examination is
run with very few AROs
• In some cases there are only
1-2 AROs in a zone and an
ARO have to examine as
many as 25-30 consignments
during that time
• Examination goes on till very
late
 Even with all
odds….. We carry on the
examination with the
philosophy
…..…
Thank
“IF I DON’T SEE IT,
You
I DON’T BELIEVE
IT”
 Customs Clearance
Procedures for Import
• For imported goods into Bangladesh, shipping agents submit their
manifest data (containing description of imported goods by ship)
electronically to the Customs authority. This manifest data is called
IGM (Import General Manifest) which is popularly known as Bill of
Lading (BL)
This Bill of Lading (BL) is submitted by carriers (Shipping
agents, Airlines , Freight Forwarders ) through
electronically using Asycuda World System.
Every Shipping agents/Airlines has user credentials (user id
and password) of Asycuda System to submit IGM/BL.
What is Bill of Lading (BL) ?
A bill of lading (BL or BoL) is a legal document issued by a carrier to a
shipper that details the type, quantity, and destination of the goods being
carried. A bill of lading also serves as a shipment receipt when the carrier
delivers the goods at a predetermined destination.
 Asycuda World System

The UNCTAD Automated System for Customs Data (ASYCUDA) programme works to both
increase the effective collection of customs revenues and strengthen institutions for
customs data collection and processing in the countries where it operates, increasing
government revenues from trade and producing trade-related statistics through its
customs automation, modernization and reform projects. Given the programme’s
important function and the wide demand from member States for the services it
provides, it is no wonder that ASYCUDA is the largest UNCTAD technical assistance
programme, active in more than 90 countries.
The ASYCUDA programme is recognized worldwide for its contribution to the
modernization and automation of customs procedures.
 Steps to Customs Clearance

Steps-1 : Warehousing of goods :

When carriers (Ships/airlines) arrived at port, imported goods are off-loaded and
stored into warehouse of port. Port authority is the custodian of imported goods before
released.
Steps-2 : Submission of B/E :
Once the Import General Manifest (IGM) is submitted online, the nominated C&F
Agent (or the importer himself) completes the goods declaration (popularly known as
Bill of Entry or B/E) from their own premises and submits the goods declaration to
Customs systems through ASYCUDA World. The declaration or B/E has to be made in
a specific format, known as Single Administrative Document (SAD)
Bill of Entry (B/E) :
The Prescribed Bill of Entry and Bill of Export Form Order, 2001 issued by the NBR outlines the
documentary submission requirements
 Steps-3: Documents List :
For release of goods from Customs, following documents need to be
submitted along with the declaration (B/E) for all types of imports:
Letter of Credit (L/C).
Invoice
Bill of Lading/AWB/Truck Receipt/Railway Receipt
Packing List
“Country of Origin” Certificate (except coal and export oriented garments
industries)
Insurance policy/cover note
VAT/BIN Certificate
Following additional documents are required for different types of goods, such as:
1. BDS standard will be mandatory for clearence of 55 items, and in case where no
certificate from and accredited laboratory from the exporting country is available, a
certificate from the BSTI is necessary, as per Import Policy Order, 2015-2018 Para
26(28).
2. Radioactivity test report from the concerned authority of the exporting country for
food items (Import Policy Order, 2015-2018 Para 16).
3. Clearance certificate(s) from the Bangladesh Atomic Energy Commission for food
items to the effect that the radioactivity level found in the imported food-stuff is
within the acceptable limit (Import Policy Order, 2015-2018 Para 16(9)).
4. Pre-shipment Inspection test report for milk food products and powder milk, coal
and hard coke, Break Acrylic (HS 39.15 and 3915.90), M.S. Billets (7207) and for
items where the value of a single item authorized for import by public sector agencies
is Taka fifty lac or above.
5. Approval letter of the Chief Inspector of Explosives of the Ministry of Power,
Energy & Mineral Resources for import of explosives (Import Policy Order,
2015-2018 Para 26(1)).
6. Copy of intellectual property certificate (by the IPR holder of the exporting
country) in the case of import of branded goods registered under any law related to
IP in Bangladesh [Para 5(6)(c) of Import Policy Order, 2015-18]
Checking documents by Custom officers

Steps-4: Documents and BE copy checking :

• To release goods C&F Agents come to Customs Officers (Assistant Revenue
officer/Revenue officers) with documents along with B/E copy which was
submitted into Asycuda System.
• Getting documents from C&F Agents, Customs Officers (Assistant Revenue
officer/Revenue officers) check and verify all documents .
• If documents found correct, then they login into Asycuda System and check
submitted B/E whether it is correct or not according to submitted documents.
• They also check HS Code, tax rates and value of goods.

• What is HS Code ?
• The Harmonized System is a standardized numerical method of classifying traded
products. It is used by customs authorities around the world to identify products
when assessing duties and taxes and for gathering statistics.
Is the HS code the same for all countries?
First six digits of HS code (HTS code) are same in all countries. But countries can add
additional digits to categorize and define commodities at more detailed level without
modifying or changing first six digits.
Steps-5: Physical Examination of goods :
It is to be noted that for the customs clearance of imported animals, plants and
plant products, quarantine conditions (such as certification from quarantine
department, fumigation etc.) shall have to be observed. As per Import Policy
Order, 2015-2018 Para 26(60), fumigation is mandatory in case of import of raw
cotton produced and packed in Western Hemisphere.
10% of imported goods can be physically examined by customs officers. Physical
examination is performed to protect revenue from illegal declarations or to find
out goods which were not declared in documents.
Some HS codes, importer BIN, C&F Agents’ AIN are put surveillance in Asycuda
System. For these, BE submitted by C&F , are marked as RED. To clear red line ,
goods need to be examined.
After examination of goods, the concern officers write down reports in Asycuda
system or physical reports send to goods assessment officers.
Steps-6: Check Value of imported goods :
Some times importer may declared lower value of goods to evasion of taxes.
Therefore, average value of same imported goods are checked from Asycuda Database
System. Average value is counted for last 3 months. Some times, internet values are
collected or market prices are collected. After collection of valuation data , actual value
of that imported goods are measured. In all customs houses/stations , there are a
valuation committed for approval of value if dispute is raised regarding value of
imported goods

Steps-7: Classification of HS Codes :

Each imported good is identified by a Hscode. There are different tax rates for different
goods. To protect proper revenue , actual hscode of imported good is important.
Otherwise, there is a chance to evasion of taxes. That is why, correct is hscode is taken
by customs officers. If dispute raised on hscodes, importers and customs jointly finalize
hscode .
Steps-8 : Taxes calcution:
When there was no automated Asycuda system, taxes were calculated by manually. At
present, all taxes for imported goods are calculated by Asycuda System against submitted
BE. Tax rates, exchange rate of foreign currency are stored in Asycuda System after every
National Budget. When BE submitted into Asycuda System, taxes are automatically
calculated based some formula previously assigned in Asycuda System. Firstly, Revenue
Officer needs to login in Asycuda System. Then open the specific BE and checked it.
When checked done, then he click on Assessment option of Asycuda System. When
assessment button is clicked, taxes are automatically calculated.
Steps-9 : Payment of taxes:
When taxes are finalized, then concern C&F agents/importer will collect the assessment
notice (assessment copy) of BE and go to Bank. Then he deposit taxes against this
imported goods. At present, payment of taxes are online. Importer can pay their taxes
from online banking option. All commercial banks have online banking options for
collections of customs taxes.
Steps-10 : Released of goods:
When payment is done, then C&F agent/importer will go to
port authority to release goods. Port authority will check BE
and payment on Asycuda system through user credentials
collected from Asycuda Team previously. When found
everything correct in Asycuda System, then port officer will
issue digital delivery note on asycuda system and release
goods.
Steps-11 : Deliver goods to importer door/premises:
When delivery note is issued by port authority, C&F
agent/importer collect goods from port warehouse and loaded
into transports to carry goods. In these way , a life cycle of
imported goods are end.