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February 10, 2008

A Not-So-Quick but Definitely Dirty Guide To Customs

A recent experience with FedEx, wherein packages were being shipped express mail to us from the United States at a cost of several hundred dollars and for which we are still waiting after thirteen days, has inspired me to write about international shipments and customs.

Yes, that office invariably staffed by sunny, cheery and professional folk whose job it is to monitor and control the flow of goods in and out of the country, and to collect taxes on various imported and exported goods called "duties." That is how their job description reads on paper. I suspect that there is a secret book somewhere that details it more like it is:

to do whatever they can to keep people from entering the country with any interesting items whenever possible, and when not possible, to charge the offending party exorbitant taxes for their impertinence, at all times performing this duty with discourtesy, obscurity, uninteligibility and incompetence, so as to provide the maximum amount of inconvenience possible.

Just like finding out the truth about Santa Claus, the Easter Bunny and the policeman being your friend, the realization of the real nature of customs can be shocking. The experience of dealing with customs has reduced me to tears even when things go perfectly well, just from the amount of paperwork to be filled out, the time spent waiting, and the fistful of pesos extracted from my wallet without even the courtesy of a quick cuddle afterwards.

In hopes of easing the pain of that first time, I have decided to share the benefit of my experience with the world here on the blog. My experience is by no means expansive; I am no Art Vandelay. Before embarking on any international shipping program, you should always consult your local parcel professional for guidance in your particular case. Yet it is my hope that this article will give you some idea of what to expect when sending things to someone in a foreign country.

Know Your Enemy

Bureaucrats do not like to do their jobs. They will do anything they can to keep from doing their jobs, and any mistake on your part gives them the excuse to not do their jobs.

If the rule is that you need to have three copies of a form and you only have two when you arrive at their window, they'll shut you down right there because you did not follow instructions. Because you need their help and they don't need you, you are entirely at their mercy and must do things exactly as they dictate, even if their requirements are ridiculous and completely non-sensical.

It's a lot like dealing with the Soup Nazi. You must know the rules before your number comes up and you must follow them exactly, or no soup for you! If there is an exception or a problem with how you have completed your paperwork, or if you have included any forbidden, restricted or even questionable items, customs and shipping companies dealing with your international shipment can hold your package for days, or they might even send it back undelivered.

When sending an international package, make sure:

  • everything you are sending is allowed into the destination country (not 'forbidden')
  • you have all the proper certificates from the relevant agency in the destination country documenting clearance of any items on the 'restricted' list for that country
  • the values declared for the items are realistic
  • all the proper paperwork is filled out neatly and in full
  • all the information (names, addresses, phone numbers, etc.) are 100% correct
  • your documentation lists every item in the package individually, and when possible, include the Harmonized System Code numbers (see below)

Failure to do any of these things can cause huge delays and possible rejection of your package. Allow me to give you a personal example of the chain of errors that have kept our current package in a near two-week limbo.

First, the FedEx employee serving my mother when she went to send the package instructed her to write simply "Christmas and birthday presents" on the list of the box's contents. As I mentioned before, this is a big no-no. You must always list everything as well as a stated value for it. Yes, one would think that a FedEx employee would know this, but apparently she did not.

Still, it made it from southern Illinois to Guadalajara in one day, where it was turned over to an in-house customs broker. A customs broker is an expert in customs processing that prepares a shipment and all its paperwork before the package goes to customs. Large shipping companies with international service tend to have their own in-house people that do this, but you can hire independent customs brokers. Our customs broker immediately saw that the list was not acceptable for customs, so the package was held for days until a full, itemized list, complete with prices and country of origin for each item was provided to him. If the full list had been sent in the paperwork with the package, this delay would have been avoided.

Unfortunately, the recipient's phone number (my phone number) listed in the paperwork was incorrect. It was not incorrect like it had wrong numbers in it; it was wrong because it was written as it would be dialed from the United States, not written as someone would dial it within Mexico. Because of this, FedEx did nothing with my package for two days, claiming that they could not get in touch with me to request necessary paperwork, because the number on the form was incorrect.

It is simple for anyone living in Mexico (unless they've never dialed phone numbers before) to look at a number written to be dialed from the US and determine how it should be dialed from within Mexico, but having it not exactly as it should have been on the form gave them the excuse to not do their jobs and delay the package for days while they got the 'right' number.

Once customs got the package, they found that there were ceramics from Asia in the box. These are restricted items and only allowed into Mexico with the proper clearance from the Mexican Department of Health. Because getting the proper clearance through that other bureaucratic nightmare would take a month, and because the deadline had already passed for the package to be submitted to customs after arriving via FedEx in the country, the only two options were to surrender the items to customs to have them sent back at my mother's own expense or 'destroyed' (customs claims they destroy such restricted items, but the rumor is that customs agents just take them home themselves because no documentation that they actually have been destroyed is ever provided).

Federal Express has a book, called the "Fedex Global SRG" that details what items are forbidden and restricted in the different countries to which they ship packages. Every international shipping company should have something similar, and confirming that that everything you want to ship is actually allowed into the country with such a book will let you avoid unnecessary delays and the destruction or return of any forbidden or restricted items in your shipment. If you print out your own shipping labels at home, generated through a shipping company's web site, they will usually present you with the necessary information in the process.

The lady at the FedEx office should have gone over each item with my mother to make sure that it is allowed into the Mexico, but since she thought it was okay to ship an international shipment with only "Christmas and birthday presents" written on the packing list, it doesn't surprise me that she didn't think to look in the SRG to see if any of the items in the shipment were forbidden or restricted.

Duty Now for the Future

Customs offices charge indirect taxes called "duties" on things brought into the country. If you send something to someone in a foreign country, chances are high that either you or the recipient will have to pay duties on it. It does not matter that you paid taxes on the item when you bought it. You did not pay those taxes to the government of the country into which you want to send the item, and they want their taste. Customs agents are the goons they send to collect.

I have yet to see any place that does this easily, like charging a set percentage of the value on everything, or a flat-rate for everything. Instead, different items are charged differently, with some things being charged by assessable value and others by volume, and the rate and form of duty varies from country to country.

To make it easier for someone in one country to fill out the paperwork for the entry of goods into another country, a universal set of numbers for different product classes has been developed, called the Harmonized Systems Code (or H.S. Code). It divides everything shipped between countries into around 5 thousand different classes of commodities, identifying each by a six-digit code. With these uniform descriptors, the need to translate "watch" to "reloj" or "montre" is eliminated, as it is "910211," no matter what country it comes from or goes into. These are also used for comparison of trade statistics, so that analysists can be sure they're comparing apples to oranges.

If you look up the Harmonized Systems Code number for each of your products before taking the list to the shipping company, they should be able to provide you with a book showing the duty rates for each item, so you know how much duty must be paid on your shipment.

It is probably a good idea to look up how much duty will have to be paid before sending something to another country, or ordering something from a foreign country. I made the mistake of ordering some stuff to be delivered from the United States before checking with the duty rates for those items once, and I'll never make the mistake again.

Because I'm much bigger along every axis than your average Mexican, it is very difficult for me to find clothes in stores here. For a long time, I didn't know where to buy any fat-person clothes in Guadalajara, and my clothes were getting ripped and stained at a rate that I figured I'd soon look like a bum if I didn't get some new ample duds. I was delighted to learn that a company I'd used in the United States, one which specialized in clothes for the huge and enormous, delivered worldwide. I understood that the shipping would be considerably more expensive than I was used to from ordering from them online, but I was ignorant about the fact that duty rates can be obscene.

When the shipment arrived, the FedEx guy told me that I owed something like MXN $550 (around USD $50) for the two t-shirts that I'd ordered, which only cost USD $25 each. I could not believe my ears. Since Spanish is not my lengua materna, I asked him to repeat the amount. Sure enough I heard him right. I asked him what that was for. Did I somehow mistakenly have it shipped C.O.D. or something? I thought I had already paid for the shipping on my credit card when I placed the order. He explained that it was for import duties, but could not tell me why the duties were 100% of the cost of what I'd ordered. Usually, import duties are not that high, but your average Mexican doesn't have the need to order clothes through the mail from the United States, and being an average Mexican, the FedEx delivery guy didn't have any idea why the rate would be that high.

I found out later that the clothing union in Mexico City is incredibly powerful, and therefore, they have been able to get a ridiculous duty rate enacted for the import of any new clothing to the country. Therefore, people only get clothes from America when they go there and can bring them back in a suitcase. That is the only way people in Mexico get clothes from America. Thanks to the import duties, clothes sent in the mail cost double, and on top of that, the shipping rates are ridiculous.

A side note: The only shipping 'speed' available for private shipping companies like UPS and FedEx between Mexico and the United States and within Mexico are only express for some reason. This seems funny to me, since they have slower service available in the United States and in Canada, and having been in both those places, Mexico seems far more laid back and slower in general pace of life than either of those two countries. No representatives of the shipping services know why their companies do not provide regular, standard 'ground' service here either. I've asked, and I always get the same blank stare and shrug of the shoulders. I even wrote to UPS and asked why they don't provide their 'Standard' (ground) Service in Mexico like they do within and between Canada and the United States. I was told that such information is "not in the system."

Your Wallet or Mine?

If you are sending someone in a foreign country a gift, it is considerate to pay any duties yourself. Otherwise, you are putting the recipient in a position where they have to pay to get the gift. At a minimum, you should warn them that they should have cash on hand to pay the delivery person when the package arrives.

Most shipping services allow you to indicate whether or not the duties are to be paid by the sender or the recipient. For example, on a FedEx International Waybill form, there is a checkbox (line 7-B) that can be checked so that the sender, not the recipient, gets billed for import duties. If one uses Federal Express and does not check this package, when the delivery person shows up at the recipient's door, they will insist on cash for the payment of duties before handing over the shipment. If you don't have the cash, you won't get your package.

Do Used

While the process of paying ridiculous duties to customs is unpleasant for everyone, it is worse for some than others. If you are a commercial importer, bringing products into the country to be resold, you usually have to pay higher duty rates than someone having stuff shipped to them for personal use. Customs agents are especially suspcious of anything that is brand-spanking new and still in the original wrapper, because they think it is going to be resold. Sure, it is completely understandable that Aunt Tillie from Cleveland might go out and buy you a Nintendo Wii for Christmas because you cannot get one in Peru, shipping it to you in the sealed, pristine box it came in from the store. Why wouldn't she? After all, it's a present. However, this would raise all kinds of red flags to customs agents, and it might cause her shipment to be rejected by customs or to be charged higher duty rates.

When sending things to someone in a foreign country that are intended for their personal use, it is best to take all the items out of new wrapping and have them in a condition that would make it difficult to command full price if sold. This does not mean that you have to tie things you are going to send to a foreign country to the back of your truck and drive around the block several times. It just means that you should take things out of their boxes and original packaging, and remove any non-essential stickers or twist ties as well. This will also cut down on the space and weight demands of the package, so it is a good idea for making the shipment more economical anyway.

Sending used things is also helpful. Many countries charge less for the importation of used items than they do for their brand new counterparts. Mexico used to charge a lower rate of duty for used books than they did for new books, although I think that has now changed. This varies from country to country and from item to item, so be sure to check with your shipping professional if you are not sure.

Live globally. Buy locally.

I hope this entry has given those of you who have never had the delight of dealing with international shipping and customs some idea of what they do and how they work (not very well). It can be a real treat when living abroad to get a care package from back home, but it truly does exact a high toll, both from your wallet and from your mental well-being.

If you have to send a gift to someone outside your home country, you might want to consider buying gifts that can be purchased, delivered and redeemed over the Internet. iTunes credit has become a very popular gift in our household, and with it, we can even get a taste of the home country, buying a season or two of American television shows.

Alternatively, if your loved ones live in more economically developed countries, you can probably find online stores for businesses in their country that can ship domestically, thereby cutting down on shipping costs and completely eliminating the need to put anything through customs.

Posted by crispy at February 10, 2008 09:56 AM

Comments

Posted by: Chris Coen at February 16, 2008 01:00 PM

Wow. What a great article for those in the USA sending packages and for those of us planning to move to Mexico. For us it means we will really stock up on clothes for Dennis. By the way, let us know if there is anything we can bring to you when we come in July.

Posted by: Gay G-L at February 17, 2008 02:15 PM

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