Customs planning can reduce the price of a product to an overseas customer at no cost to the exporter. Competitive pricing is dependent not just on the amount your customer pays you but on his total landed cost. Amongst the steps that you can take to reduce that cost are:
- Designing the products to be customs-effective;
- Separate invoicing of different types of goods and of services;
- Distinguishing charges for interest, for the installation of machinery and for the right to reproduce or resell imported goods; and
- Providing accurate and timely documentation, especially certificates of origin.
For the exporter, a transaction which results in payment difficulties or a dispute over liabilities is likely to be totally unprofitable and probably damaging to customer relations. Careful attention to the conditions of sale, correct use of Incoterms and the close control of letter of credit and other payment procedures are therefore essential elements of Customs planning for exports.
- To determine and achieve the optimum customs treatment for your products in export markets;
- To conclude customs-effective contracts with your export customers; and
- To avoid disputes and unnecessary costs and to ensure receipt of full and timely payments.