Customs Brokers & Duties For Humanitarian Supplies

Customs Brokers and Duties Taxes
Organizing humanitarian aid and coordinating transportation is a big job without worrying about customs and duties. However, it’s essential to understand what, when, and why customs brokers and duties are important and how they factor into the aid shipment process and pricing. 

While most of TLM’s suppliers will handle the international shipping for you through their own freight forwarders (a company that handles the paperwork and coordinates the transport of goods), it’s very likely they may only get your humanitarian supplies to the nearest port. However, some of these companies will help you clear customs and duties for an additional fee – so be sure to inquire about this with your supplier! Whether you choose to clear your supplies on your own with a broker, with a local NGO partner or you have a freight forwarder do it for you, you should understand the basics. 

To make life a little easier for those new to humanitarian aid procurement (and those who just need a refresher), we’ve put together a brief overview of customs brokers and duties. 

What is a Customs Brokerage?

A customs brokerage is a professional organization that employs customs brokers who assist importers and exporters in getting their shipments to clear customs.

If you’re shipping internationally, chances are you’ll need a customs broker.

Throughout the import and export process, there are many checkpoints and a lot of paperwork. Almost every step of the journey, your shipment will face barriers to continuing, and without proper preparation and paperwork in place, your order may be delayed or even seized. 

Why You Need Customs Brokers

Customs brokers know the shipment and local customs processes and will help you clear hurdles so your supplies can make it to their destination on time and in one piece. Customs brokers are also known to arrange transportation of cleared shipments locally. They often have close working relationships with trucking companies and other transporters and can facilitate continued passage to the last mile when necessary.

Some customs brokers specialize and you can find those who work primarily with humanitarian logistics. Occasionally, a freight forwarder will work with or employ a specific customs broker, but they can be separate businesses also. If you’re ever in doubt, you can look for a reputable freight forwarder who will help you contact and coordinate with a customs broker or ask your supplier.

What Are Duties?

When you think of duties, you probably think of taxes. And, you’d be correct. Duties are a form of indirect taxes on international trade.  When a government applies duties to imported goods, it’s called “import duties,” and as you might guess, when it’s applied to exports, it’s called “export duties.” Customs duties are based on the assessable value of the supplies within your shipment. Depending on what you ship, your customs duty fees may rise or fall. Be prepared to navigate this added expense whenever you ship internationally.

Pitney Bowes offers an online duty calculator so you can estimate approximate duties. However, many developing countries are not included in the calculator. The best way to find learn more and find estimated duties is to contact the Revenue Authority in the destination country. For example, if you’re importing into Kenya, you may want to check out the Kenya Revenue Authority, where they provide a whole section on customs and border control. Again, the supplier’s freight forwarder may be able to assist in helping you obtain this information. 

 

What is a Tariff?

What many people don’t know is that the tariff itself is not actually your customs duty. It’s a list of all the goods being shipped along with their harmonized tariff system codes (or, HTS, for short), and their calculated duty amount or rate (also known as their leviable rate or customs duty rate). However, many people, including professionals, use the terms duty and tariff interchangeably, so be sure pay attention and look for both expressions.

VAT / Tariff Exemptions

It should be noted that items that the U.N. bodies import often have VAT / tariff exempt status. This is critical as the UN provides massive support to relief efforts worldwide. However, items imported by most other NGOs in most countries do not bypass the tariffs, which can increase costs up to 40%. This puts small suppliers at a disadvantage cost-wise. Our hope is that the UN and other multi-lateral organizations will put pressure on recipient governments to apply the same exempt status to all NGOs during times of crisis or disaster. Stay tuned! 

Learn about humanitarian supply procurement, shipping, transportation, amazing humanitarian products, and more when you visit our blog.

 

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