What are the biggest customs hurdles for Swiss SMEs?
They are required to compile the necessary and correct documents for export and import to the destination country. This can be a major expense, especially for inexperienced SMEs. Customs problems can arise, for example, if a transporter loads the wrong goods from the exporter and the goods or quantity do not correspond to the export declaration or import customs clearance. Correct documents are always required for international trade.
For which products do I need special permits?
Anyone wishing to export food to the USA, for example, must register with the Food and Drug Administration FDA. The authority checks the product and prevents it from being imported if it does not comply with the directives. Should this be the case, companies then receive an overview of the necessary adjustments. This catalogue can be up to one-hundred pages long. Anyone exporting to China also needs special certification. These approval procedures can be lengthy and cost-intensive, especially for health products and medical technology.
What happens when a document is missing?
Then goods cannot be delivered, or delivery is delayed. An example: Anyone exporting animal feed to China needs a special veterinary certificate. If this is not available, the goods cannot be exported and, in some circumstances, may even spoil at customs. It is even worse if goods get stuck at customs or even have to be returned. Some years ago, a customer contacted us because he wanted to import a wild boar bristles for a car wash in Switzerland. However, this was held up at customs because not all certificates were available.
What's the best way to proceed?
We always first ask customers: Do you know the customs tariff number? This number can be used to search the customs database to find out which permits, certificates and documents are required for export from Switzerland and import into the destination country.
When should a forwarding agent be called in?
Many companies have in-house export capabilities. For SMEs that do not export regularly, a freight forwarding or logistics service provider can prove helpful.
Who is liable for transport damage?
Unfortunately, it happens every day. If, for example, food is held up and the cold chain is interrupted, it can become expensive. The liability between buyer and seller is regulated in the Incoterms clauses. If there is any uncertainty, it is worth clarifying the matter beforehand with the transport insurance company.
How can you save on customs costs?
Customs costs can be kept down for the importer by using existing free trade agreements. However, this is only possible if the origin criteria are fulfilled and formal proof is provided. Central Switzerland's Garaventa, for example, has saved around 350,000 Swiss francs on the export of Swiss funiculars to China; this is because the free trade agreement reduced the import duty on the funicular railway infrastructure from 8 percent to 1.6 percent, and customs duties on the import of railway wagons have been completely abolished.
How does S-GE support Swiss exporters?
Our core task is to advise export-oriented SMEs in Switzerland and Liechtenstein. We help with questions about export formalities and provide databases and checklists. Of course, we are also happy to support you with a country consultation, market analyses, market entry and the search for a suitable business partner. Some of our services are free of charge for our customers, due to our public mandate.
Export tips for customs formalities
- S-GE provides practical tools: Determine the customs tariff number at www.tares.ch and look up the customs tariffs, formalities and rules of origin for your target market in the customs database.
- The video explains how the export declaration works. The checklist for export starters and the manual “Getting Started with Internationalization” show which documents are required by customs and how internationalization can be achieved.
This interview with Alfonso Orlando was published on Raiffeisen.ch in November 2018.