Japan is open for trade and business from many of the countries however the customs regulations, licenses streamlined procedures and additional certificates are required while shipping to Japan. Although procedures are defined many small and medium scale businesses often have issues when they ship goods to or from Japan. The paperwork is however different depending on the goods being shipped. The main documentation required for most of the items that are either imported or exported are commercial invoices. The commercial invoices have complete information both of the sender and the receiver including the list of items being shipped also the country of origin nevertheless this rule doesn’t apply for shipment of documents for example if you are only shipping documents then there is no need for any commercial invoice. World has shrunk in terms of transportation, communication and trade for example now; money can be transferred in seconds to any part of the world, one can reach to any destination within 24 hours similarly, shipping goods overseas has become affordable and simple.
The 5 essential things to know while shipping are:
- Documentation required to ship to Japan
The documentation is rather simple however packing list which includes complete information of the consignment to the freight forwarder, consignee and the exporter it also states the labelling on the outside of the containers or the boxes and how the consignment was packed, an airway bill that provides details of the consignment with the tracking information, it is a signed contract between the exporter and importer which is legally enforceable, and commercial invoice are enough. Apart from this there are some prohibited items for example some goods that are hazardous in nature including chemicals, narcotics and arms. To ship commercial items like food, pharmaceutical products, cosmetics, etc. some additional documents will be considered.
- Commercial invoices
The description of goods mentioned on the commercial invoice should be clear and understandable to the customs as it will save time and the classification of the goods will be done properly by the authorities.
The airwaybill and the commercial invoice are crucial aspects while shipping goods, the information mentioned should be clear and accurate. The contact information of the recipient must be written in English in both the documents.
- Trade agreements in Japan
The bilateral international trade agreements of Japan with countries like Canada, Australia, Peru, the USA, Switzerland, Mexico, EU, and vast parts of Asia are created to have a smooth trade between the countries. The small firms can run businesses easily with these economic partnership agreements (EPA) in place.
These agreements also give the partnering counties some additional benefits like discounted pricing in the shipment on the tariffs and the duty charges. The country of origin must be mentioned clearly on the commercial invoice and supporting documents like certificate of origin and any other essential documents which may be called for.
- Customs Clearance
There are three ways of customs clearance in Japan, the Customs clearance procedure applicable to the shipment depends on the nature of the goods, their worth also the description present in the documents when the goods reach the destination.
- Manifest clearance (MIC)
This is equal to express clearance in most of the countries, the goods which are less than JPY 10,000 which includes Cost Insurance and Freight will be processed under this clearance without any duty fee, extra taxes as the shipment has a low value. However, goods like leather, alcohol, food, clothing, etc. require tax approval hence manifest clearance cannot be applied to these items.
- Formal pre-clearance (Preliminary declaration)
Before the consignment lands in Japan, a formal pre clearance can be filed at the Japan customs authorities. The commercial invoice must have a clear description of all the goods in the shipment as this type of clearance can be applied for all the goods with no exception. The documentation must be produced in advance to the authorities to expedite the process.
- Formal clearance (When consignment lands in Japan)
When the commercial invoice has incomplete information or in a situation where the seller fails to produce all the necessary documents in advance and uses the ‘Hold and Notify’ service the formal clearance will be applied. This clearance is contrary to the manifest clearance as this is applied for goods of high value. If the total charges cross JPY 500,000 then formal clearance is applied. The goods will be sent for customs clearance when the shipments land in Japan.
Additional documentation for customs clearance:
In general, any goods that are being shipped need to have all the appropriate documentation that is legally required. Mainly documentation is crucial for goods like food, pharmaceutical, and biological items or things that come under CITES (Convention on International Trade in Endangered Species) .The common list of documents required are: a list of packing, the certificate of origin on the commercial invoice is needed this is applicable for the countries that fall under the EPA or any preferential trade deal to get the benefits like exemption on taxes and appropriate licenses or certificates for regulated goods are required .
- Prohibition and restrictions
There are goods that are banned from import and export as they might be hazardous to health and safety of the citizens. The Japanese customs and ministry of health labor and welfare give detailed information about the rules and regulations that need to be followed while exporting or importing goods related to heath. Countries which have trade agreements with Japan also have similar policies for imports from Japan. Japan has a strict ban on any import of items such as narcotics and any substances related to it, firearms, gunpowder, equipments of explosives, substances that are precursors for weapons made from chemicals, bio-terrorism (importing germs or viruses that lead to bio- terrorism), imitation currency, obscene substances and goods or items that cause violation of intellectual property rights. Apart from the aforementioned; goods that fall under certain agriculture and meat products such as goods related to animals like ivory, fur and endangered species are prohibited. Restrictions are imposed on the imports of certain pharmaceutical products and licenses must be strictly acquired for trade of these goods.