Clearing up the air on Clearing Instructions
Cargo passing custom borders can be daunting for any business owner. Concepts like SARS, clearing instructions and SAD 500 are generally not a favorite topic in the movement of goods through the supply chain, but this doesn’t have to be the case. We would like to take away the smoke screens and get to the basics of Customs clearance.
Let’s dive into the clearance procedure
All importers and exporters require Customs clearance when cargo leaves or enters the country or when they are moved in bond/ transit. This process facilitates and regulates goods passing through the border to ensure compliance with the governments regulations. Certain commodities may also require duties and taxes to be paid to the state, depending on their tariff heading. Regular importers require a SARS importers code, which Customs will use to allocate the entry to.
Each country has their own set of document and processes. South Africa generally requires a Commercial Invoice, Packing List and shipping documents (Air waybill, Bill of Lading, etc) for clearance. Depending on the commodity they may also require Permits, Certificates of Origin, Inspection reports, or other documents in order to proceed with the clearance. The freight forwarder will also need a clearing instruction with these documents.
A set of clearing instructions are a mandate from the Principal (the client) to the Broker (the clearing agent). In essence, it serves as a set of instructions on how to clear the cargo with Customs, essentially a self-assessment for the importer/exporter accountable for all clearances submitted. Each entry sent to customs will require a customs clearance, except whether shipments are identical; Same supplier, product & quantity. In the event of complex, multiple line invoices a signed draft of the SAD 500 can be used as a clearing instruction.
Special attention needs to be paid to the SAD 500, it cements that the Principal approves that the documents and entries are correct. A Voucher of Correction (VOC), in the event of an incorrect entry, also requires clearing instruction as changes are being requested to the original entry submitted.
Customs documents you may come across
- SAD 500 – Customs Declaration (Single Administrative Document) This facilitates clearance for importers, exporters and RIT traders. The SAD is a multi-purpose goods declaration form that covers imports, exports, cross-border and transit movements.
- SAD 501 – Customs Declaration (Continuation Sheet)
- SAD 502 – Customs Declaration (Transit Control)
- SAD 503 – Customs Declaration (Query Notification)
- SAD 504 – Voucher of Correction Bill of Entry (direct)
- SAD 505 – Customs Declaration Form (Bond Control)
- SAD 506 – Continuation Sheet Bill of Entry (direct)
- SAD 507 – Additional Information/Produced Document
- SAD 514 – Voucher of Correction Bill of Entry (direct) Transfer of Liability
- SAD 551 – Continuation Sheet Bill of Entry Export
- SAD 554 – Voucher of Correction Bill of Entry Export
- SAD 601 – Continuation Sheet Bill of Entry (ex-warehouse) Imported Goods
- SAD 604 – Voucher of Correction Bill of Entry (ex-warehouse) Imported goods
Once SARS has issued a release, cargo is given the green light to move past the border to complete its transit.
These processes, which form a vital part in the supply chain, can be complex. But with our in-house customs team, we will always be ready to assist with any related inquiries or advice.
Global Logistics Alliance is committed to be your total supply chain partner.