Customs and Importing: Documents, Duties and HS Codes Explained

Importing without understanding customs is like driving without knowing the road signs: you may get there, but the risk of something going wrong is high. Duties, HS codes and import documents are not arbitrary bureaucracy: they are the system that determines how much tax you pay, which documents you have to submit and how long your goods wait at the port. This guide explains it precisely.

1. Import documents: what they are and what they are for

To clear goods through customs at destination, the importer must submit a set of documents proving the origin, value and nature of the cargo. The essential documents for any import from China are:

Commercial Invoice

Issued by the supplier. It must include: full name and address of the exporter and the importer, a detailed description of the goods, the HS code (at least 6 digits), quantity and unit of measure, unit and total price, currency, Incoterm, ports of origin and destination, and the order number.

Packing List

It complements the invoice with details per package: number of cartons or pallets, contents of each, gross and net weight, dimensions (length, width, height). Customs uses this document to check that what was declared matches what is physically there.

Bill of Lading (B/L) for ocean freight or Air Waybill (AWB) for air freight

The B/L is issued by the shipping line. It is at the same time the contract of carriage, the receipt for the cargo and, in the case of a negotiable B/L, the document of title to the goods. Without the original B/L or a telex release (electronic release), the importer cannot collect the goods at destination.

Certificate of Origin

It is not always mandatory, but it is necessary when you want to access preferential duty rates under a free trade agreement. For imports from China, the most widely used certificates of origin are Form E (for ASEAN countries with an agreement with China) and the general Certificate of Origin issued by the Chinese Chamber of Commerce.

2. The HS code: how to find the right one for your product

The Harmonized System (HS) is a universal language for classifying goods, organized in 6 digits at the international level. Each country adds extra digits for national specificity (8 digits in Mexico, 10 digits in Colombia and the EU). The HS code determines the applicable duty and the control requirements.

Structure of the HS code

• Chapter (2 digits): broad product category. E.g. 84 = machinery and mechanical appliances
• Heading (4 digits): subcategory. E.g. 8471 = automatic data processing machines
• Subheading (6 digits): international classification. E.g. 847130 = laptop computers
• National tariff line (8-10 digits): each country adds digits for local specificity and control

How to find the right HS code

1. Describe the product with technical precision: material, function, main use, technical characteristics
2. Use your country's customs search tool: SAT/VUCEM (Mexico), DIAN (Colombia), TARIC (EU/Spain)
3. Confirm the code with your customs broker: misclassification can lead to fines or audits
4. Check that the description on the supplier's invoice matches the HS code you are using

Why HS classification is critical

The same product can carry very different duties depending on how it is classified. A classification error can make you pay more than necessary or, worse, pay less than you should and leave you exposed to a later audit. In Mexico, an incorrect tariff classification can lead to fines of up to 70% of the unpaid duty.

3. Duties: how to calculate the real cost before importing

A duty is a percentage applied to the customs value of the goods, which is usually the CIF value: the price of the goods plus international freight plus cargo insurance.

How to calculate the duty

Basic formula: Duty = CIF value × Applicable duty rate

Example: you import 1,000 pairs of shoes with an FOB value of USD 5,000. Ocean freight is USD 800 and insurance USD 50. The CIF value is USD 5,850. If the duty on footwear in your country is 20%, the duty payable is USD 1,170.

Where to find duty rates

• Mexico: the TIGIE tariff on the SAT portal (sat.gob.mx). Search by HS code or description
• Colombia: DIAN's Customs Tariff (dian.gov.co), updated annually
• Spain / EU: TARIC (ec.europa.eu/taxation_customs/dds2/taric). Includes anti-dumping measures
• Peru: Aduanas.gob.pe, with Peru's Customs Tariff
• Chile: very low rates (0% to 6%) thanks to the FTA with China in force since 2006

Preferential regimes and FTAs with China

Some Latin American countries have free trade agreements with China that reduce or eliminate duties on certain products. Chile has the broadest agreement (the Chile-China FTA since 2006, with many products at 0%). Peru has the Peru-China FTA. Costa Rica and other Central American countries also have agreements. Always check whether your product qualifies under an FTA before calculating the total cost.

4. Other import taxes: VAT and additional charges

Duty is not the only tax on imports. Depending on the country, additional taxes apply on the CIF value plus duty:

In Mexico, in addition to VAT, the DTA (Customs Processing Fee) of 0.8% of the customs value applies, with a minimum of MXN 500 per customs entry. In Colombia, you pay VAT plus duty plus the customs broker's fees (approximately USD 150 to 400 per declaration).

5. The customs clearance process step by step

1. The goods arrive at the destination port and are unloaded from the vessel
2. The importer is notified by the shipping agent (you should receive this 2 to 5 days before arrival)
3. The B/L or telex release is presented to the shipping agent to prove title
4. The customs entry/declaration is prepared by the customs broker: classification, declaration of value, tax calculation
5. Duties and taxes are paid before filing with customs
6. Document review: customs checks that the documents match the declaration
7. Clearance channel: green (released without inspection), orange (document review) or red (physical inspection)
8. The goods are released and leave the port

Clearance times

Green channel: 24 to 48 hours. Orange channel: 2 to 5 days. Red channel (physical inspection): 5 to 15 days. Free storage time at the port is usually 5 to 7 days; after that, demurrage (container storage) and detention (use of the container outside the port) charges start to apply.

6. The customs broker: when you need one and how to choose

In most countries, a customs broker is legally required for commercial imports. It is the licensed professional authorized to file declarations with customs on the importer's behalf.

How to choose a customs broker

• Experience with imports from China and in your product category
• Up to date with the current year's tariff and regulatory changes
• Explains the costs clearly before starting: fees, storage costs, port charges
• Willing to review the HS classification with you before the goods arrive
• Responds quickly: when the goods are at the port, time is money

Customs broker costs

Fees vary by country and volume. In Mexico: USD 150 to 500 per customs entry. In Colombia: USD 150 to 400 per declaration. In Spain: EUR 100 to 300 per declaration for small imports.

7. Special duties: anti-dumping, safeguards and sanctions

In addition to the base duty, some products are subject to special measures that can significantly increase the cost of importing:

Anti-dumping duties

These apply when it is determined that China exports a product below its production cost, harming local industry. In the United States, Section 301 tariffs impose additional duties of 7.5% to 25% on thousands of categories of Chinese products. The EU also has anti-dumping measures in force on steel, ceramics, solar glass and other products.

Safeguards

Temporary measures a country can apply when a sudden surge in imports threatens its local industry. Mexico, Brazil and other Latin American countries have applied safeguards on Chinese textiles, footwear and steel.

Before committing to a supplier, check that your product is not subject to anti-dumping measures or safeguards in your destination market. A 20% safeguard on a product with a 10% base duty can completely change the profitability equation.