Fashion is a global business, and the world is a burgeoning marketplace. The rapid growth in the fashion trade is being driven by developing economies1, and big retailers are not the only beneficiaries. Start-ups and smaller entrepreneurs are finding fresh cross-border growth potential in the form of new customers, or in a demand for unique finishes and garment components. However, whether it’s sourcing, manufacturing or selling fashion items internationally, getting smart on customs can make or break a budding empire.
Understanding customs rules is a must: they are fluid and can differ markedly from country to country, and long hold-ups and penalties can ensue if rules are not followed.
If you’re a fashion entrepreneur ready to take the next step of either sourcing or selling items internationally, here are some tips on navigating customs to get you started.
- Check textile quotas and licensing requirements.
The textile industry has long been the subject of global trade negotiations. In the 1960s there was a complex global quota system, which has since been abolished. However, some countries still maintain select quotas2 e.g. Costa Rica controls trade in certain wool fabrics while markets such as Mexico require textile or material importers to hold a license or visa3.
- Review banned or restricted substances lists.
Many textiles and materials used by the fashion industry contain plastics or chemicals which are subject to ban or restrictions, as is the case in Europe concerning textiles containing formaldehyde. Obtain a list of banned substances from local authorities, and check with vendors that textiles and materials pass the test before purchasing.
- Be sure valuations are accurate and goods are clearly labelled in detail.
When importing or exporting goods, make sure to provide an accurate valuation to calculate duties along with a detailed description of the contents of a shipment – for example rather than ‘bolt of silk’, the description should read ‘bolt of blue silk with embroidered detail’. This additional information will help customs officials to calculate the duties and taxes to be paid.
- Check the authenticity of goods and report any counterfeit products.
It is estimated that counterfeit goods make up 10% of all fashion trade sales, with belts, handbags and shoes the most popular items4. We’re not just talking heavily branded bags and clothing - today’s counterfeit goods can be much harder to detect, so you may inadvertently find you are sourcing (or being subject to) ‘knock-off’ merchandise to complete a seasonal line-up.
- Be clear on conventions and local rules prohibiting or restricting certain animal products.
The Convention on International Trade in Endangered Species (CITES) is an international governmental agreement prohibiting the trade of wild animals5. In addition, many countries have supplementary laws to govern the trade in animal products which can vary significantly between different markets. For example, while it is illegal to import dog or domestic cat hair into Europe it is permitted in some parts of Asia.
- Secure necessary certification where required.
In some instances additional certification will be needed to import goods.
Sourcing or selling goods internationally can seem complex. However, there is a range of helpful organisations that can assist, from government agencies to transportation partners. Once you’re on your way, talk to your transportation provider to find out how tools such as FedEx Global Trade Manager can help estimate duties and taxes, manage documentation and gain up-to-date insights into local market conditions.
For more information, please call Customer Service on 1800 535 800.
- Department of Business, Innovation & Skills
- Dow Jones, 2014