What is Customs?

The simplest customs definition is a government authority responsible for regulating goods entering and leaving a country. As a border control authority overseeing international trade, customs enforces import and export regulations. According to the World Customs Organization (WCO), these authorities play a fundamental role in facilitating trade, ensuring revenue collection and protecting society.

Customs authorities have several responsibilities in international shipping, including:

• Enforcing import and export regulations

• Assessing duties, taxes, and compliance

• Inspecting shipments for safety and legality

Understanding the definition of customs and how the clearance process works is business-critical as customs directly impacts on cross-border operations:

• Impact on delivery timelines: Smooth customs clearance helps avoid border delays and keeps shipments moving as scheduled.

• Financial risks of non-compliance: Failing to adhere to trade compliance rules can result in unexpected fines or seized goods.

• Consequences of incorrect documentation: Missing or inaccurate paperwork or customs declarations can slow down customs clearance.  

• Customer experience: Effective customs clearance prevents border delays and ensures customers receive their international shipments on time, with no surprise import taxes or fees. 

Successful customs clearance typically involves the following customs documents:  

• Commercial invoice

• Packing list

• Import and export declarations  

• Certificates and permits (where applicable) 

Customs definition in shipping refers to the regulatory agency that inspects, assesses, and approves goods moving across international borders.

Common reasons shipments can be held by customs include incomplete documentation, unpaid duties, restricted goods, or valuation discrepancies. 

Customs clearance refers to the process through which an import or export shipment is reviewed and cleared by the customs office. Customs processing refers to the administration, document checking, inspection of goods, and collection of duties and taxes by customs authorities. 

Customs clearance delays commonly occur due to incomplete or inaccurate documentation, missing shipment pieces, or extra processing required by regulatory agencies. To avoid prolonged delays, ensure all paperwork is completed accurately. Ensure that information is consistent across all required documents and that you have declared the accurate value for your items, even if they are being provided to the recipient at no charge.

The Harmonized System (HS) is a global standard for categorizing goods in international trade, and is developed and maintained by the World Customs Organization (WCO). HS code ensures consistency in trade practices and supports compliance across the global economy.

Customs duties are a type of tax charged on products being shipped across borders and are controlled by the customs of each country/territory. The purpose of customs duties is to maintain fair competition between imported and local goods, and the duties must typically be paid at the time of import.

A customs duty is a product-specific tariff based on the item's HS code classification. An import tax, such as VAT or GST, is a broader tax applied to imported goods similar to domestic sales taxes.

For more detailed guidance, please visit FedEx Customs FAQ

The information provided in this document does not, and is not intended to, constitute legal and/or business advice; instead, the information contained herein is for general informational purposes only. Readers of this document should contact their own advisor to obtain advice with respect to any particular matter or topic addressed herein. The content in this document is provided on an “as is” basis; FedEx makes no warranties or representations in relation to the currency, accuracy and/or sufficiency of the information set out herein and shall not be liable for any reliance placed on the same.  For the avoidance of doubt, any and all liability with respect to actions taken or not taken based on the contents of this document are hereby expressly disclaimed.