1. 7. Customs document 7.1 Understand basic customs law 7.2 Types and function of forms used in import and export 7.3 Customs declaration and preparation of forms 7.4 Custom 1 7.5 Custom 2 7.6 Custom

2. Tariff systems Tariff systems provide either a single rate of duty for each item applicable to all countries, or two or more rates, applicable to different countries or groups of countries. Tariffs are usually grouped into two classifications: Single column tariff: A simple schedule of duties in which the rate applies to imports from all countries on the same basis. Two column tariff: The initial single column of duties is supplemented by a second column of "conventional" duties, which shows reduced rates agreed through tariff negotiations with other countries. The second column is supplied to all countries enjoying "most favoured nation" status within the framework of GATT. Signatories to GATT, with some exceptions, apply the most favourable tariff to products. Preferential tariff: A reduced tariff rate applied to imports from certain countries. GATT prohibits preferential tariffs except historical preference schemes like the Commonwealth, those part of a formal economic integration treaty like a free trade area and preference to companies of a developing country importing into a developed country.

3. Types of Duties: Customs duties are of two different types - ad valorem or specific amounts per unit, or a combination of these i) Ad valorem - This duty is expressed as a percentage of the value of goods. As definitions of customs value vary from country to country it is best to secure valuation policy information first. A uniform basis for the valuation of goods for customs purposes was elaborated by the Customs Cooperation Council in Brussels and was adopted in 1953 (the Brussels Nomenclature came out of this). In this case the customs value is landed GIF cost at the port of entry. This cost should reflect the arm's length price of the goods at the time the duty becomes payable. ii) Specific duties - Expressed as a specific amount of currency per unit of weight, volume, length, or number of other units of measurement, e.g. 25 cents per kg. Usually specific duties are expressed in the currency of the importing country.

4. iii) Alternative duties - In this case both ad valorem and specific duties are set out in the customs tariff for a given product. Normally, the applicable rate is the one that yields the higher amount of duty, although there are cases where the lower is specified. iv) Compound or mixed duties - These duties provide for specific plus ad valorem rates to be levied on the same articles. v) Antidumping duties - Applied if injury occurs to domestic producers. These are special additional import charges designed to cover the difference between the export price and the "normal" price, which usually refers to the price paid by customers in the exporting countries. vi) Countervailing duties - Additional duties levied to offset subsidies granted in the exporting country.

5. Other import charges: i) Variable import charges - Can be used to raise imported product prices to the domestic price level. ii) Temporary import surcharges - Used as a local industry protection measure and in response to balance of payments deficits. iii) Compensating import taxes - In theory these taxes correspond with various internal taxes, such as value added taxes and sales taxes. According to GATT such "border tax adjustments must not amount to additional protection for domestic producers or to a subsidy for exports". This can lead to great inequities.

6. 7.1 Understand basic customs law Goods can be imported and exported by land, air and sea but only at the places listed in the First Schedule of the Customs Regulations, 1977. All goods meant for import and export either it is under import/export duty or otherwise must be declared in writing in the respective forms; customs form No 1 for imported goods and customs form No 2 for exported goods. Declaration forms must be filled in detail including providing true information regarding the number, description of packages/crates, value, weight, quantity and type of goods. The origin of the goods will also need to be informed. This applies for goods meant for exports as well where the final destination of the goods is notified. Completed Custom forms will need to be submitted to Customs offices at the place where the goods are to be imported or exported.

7. Custom Agent Under the provision of the Customs Act 1967, importers and exporters are allowed to appoint any agents to act on their behalf with the condition that the agents had been given the approval by the Customs Director General for customs clearance duties. Application for legal agents will need to be given to the customs office at the location where the goods are to be imported or exported. Separate approvals are not necessary to manage customs clearance duties for each customs office. For example; if approval has been given to manage customs clearance duties in Johor Bahru; this means that the same approval can be applied to all customs clearance offices in the country on the condition that the state Customs Director has been informed.

8. Duties All duties/custom taxes imposed on imported goods will need to be paid in advance before the goods can be released. The same applies for exported goods. All exported goods will need to settle the export duties prior to clearance. Duties/Taxes levied on any goods imported into the county include : Import duty Sales tax Excise duty

9. Import Duty Duty import rates vary according to the type of imported goods. The rates imposed on each good imported is describe in column 4 and 5 of the First Schedule under the Customs Duties Order 1996. It is possible that imported goods are exempted from the import duty. However, it is not exempted from the sales tax.

10. Sales Tax Rates on the sales tax levied are described in the Sales Tax Order 1977. There are 3 different rates charges: 5%, 10%, 20% and 25% which are levied on all imported goods other than those listed in the Sales Tax (Exemption) Order 1980 which are exempted from the sales tax. Goods that will be levied the 20% sales tax includes : Beer, wine and other wine. Alcoholic liquors which are classified under the heading 2205.10 100 to 2208.90 990.

11. Export Duty Column 5 of The First Schedule under the Customs Duties Order 1996 indicates the export duty rates imposed on particular exported goods. The word “Nil” printed in column 4 and 5 in the Customs Duties Order 1996 indicates no export and import duties will be levied on export and imported goods.

12. CEPT DUTY RATES An agreement on the creation of a Common Effective Preferential Tariff (CEPT) Scheme for the Asean Free Trade Area (AFTA) was setup for ASEAN countries. Following the existence of the scheme, a CEPT order called Customs Duties (Goods of ASEAN Countries Origin)(ASEAN Harmonised Tariff Normenclature and Common Effective Preferential Tariff) Order 2004 was issued effective 1.1.2004 Under the CEPT Order, column 2 of the Second Schedule contains a list of goods that falls under the CEPT scheme. CEPT duties are also listed as described in column 3 of the same table. Importers importing goods within ASEAN countries qualify under the CEPT duties rates as long as they comply to the followings: - Claim on CEPT ASEAN duties will need to be endorsed in the Import Declaration Forms (Custom Forms No. 1) Display the origin of goods certificates (FORM D) issued by ASEAN exporting countries.

13. 7.2 Types and function of forms used in import and export Customs No.1 for declaration of imported goods. Customs No.2 for declaration of export of goods. Customs No.3 for application/permit to transport goods within the Federation. Customs No.8 for application permit to transship/remove goods Customs No.9 for requisition/permit to release dutiable goods.

14. 7.3 Customs declaration and preparation of forms Proper preparation of customs declaration forms is highly essential. Special attention must be given to the full description, numbers, marks, packing and weight of the packages, the unit value and the total value, and the tariff classification of the goods. Section 79 of the Customs Act 1967 requires the declaring of dutiable goods imported to give a full and true account of the number and description of packages, of the description, weight, measure or quantity, and value of all such dutiable goods and the country of origin of such goods. The exporter of dutiable goods, on the other hand, is also required to declare the full and true account of the number and description of packages and of the description, weight, measure or quantity and the country of destination of such goods as stated in Section 80 of the Customs Act 1967. The declaring of non-dutiable goods imported or to be exported is required to give a full or true account of the particulars for which are required in the respective prescribed forms. Section 90 of the Customs Act 1967 allows customs declaration forms to be made by the owner of the goods or by a forwarding agent licensed by the customs department for that purpose and to be duly authorized by the owner of the goods.

15. 7.4 Custom 1

16. 7.5 Custom 2

17. 7.6 Custom Customs is an authority or agency in a country responsible for collecting customs duties and for controlling the flow of goods, including animals, transports, personal effects, and hazardous items, into and out of a country. The movement of people into and out of a country is normally monitored by immigration authorities, under a variety of names and arrangements. The immigration authorities normally check for appropriate documentation, verify that a person is entitled to enter the country, apprehend people wanted by domestic or international arrest warrants, and impede the entry of people deemed dangerous to the country. Each country has its own laws and regulations for the import and export of goods into and out of a country, which its customs authority enforces. The import or export of some goods may be restricted or forbidden. In most countries, customs are attained through government agreements and international laws. A customs duty is a tariff or tax on the importation (usually) or exportation (unusually) of goods. Commercial goods not yet cleared through customs are held in a customs area, often called a bonded store, until processed. All authorised ports are recognised customs areas.