International shipping: Your guide to customs, duties and selling worldwide

6 minute read

E-commerce is more important than ever, making now the best time to lay the foundation for success and growth online.

Selling beyond Canadian borders is a big decision for businesses big and small. Navigating forms, regulations, laws, taxes and fees required to deliver your products into other nations is a complex operation – and it’s difficult to know where to start.

Fortunately, we’ve put together everything you need to do just that. Below, you’ll find all the info you need to:

  1. Determine what you can and can’t ship across borders
  2. Understand duties and taxes on your products
  3. Manage and automate forms for shipping to various nations
  4. Navigate declaration and the customs process
  5. Comply with special regulatory requirements

1. Know what you can and can’t ship across borders

Before you dive into cross-border shipping, it’s vital to find out if there are any rules or regulations governing the shipment of your products to the country you want to ship to.

These regulations fall into two main categories: Restricted and Prohibited.

Restricted

Special provisions must be met by the merchant before restricted products will be released from customs and allowed to enter the destination country. These special provisions may include a certificate, a licence, a form, or certain packaging requirements.

Examples of restricted items in some countries include weapons, certain cosmetics, perfumes that contain alcohol, and lithium batteries.

Prohibited

Prohibited items are not allowed to be exported to the international destination at all. If you attempt to ship a prohibited item to that destination country, it will most likely be seized and possibly destroyed by customs.

Only in some instances will customs return prohibited items to the sender.

Examples of prohibited items can include live animals, misbranded items and cigarettes.

The list of restricted and prohibited items varies widely by country, and these can include surprising items so it’s important you don’t assume that your products can be exported as is!

Make sure to use the Canada Post International Destination Listing. It’s an essential online resource that enables you to search by country to view their import restrictions and prohibitions.

Tip

Canada Post communicates any shipping services restrictions or suspensions related to weather, politics or circumstances beyond our control – such as COVID-19. Visit Delivery Service Alerts to learn more.

2. Understand how duties and taxes work

To help you get the most out of the cross-border opportunity, you’ll want to gain a basic understanding of how international duties and taxes work. A good place to start is with the de minimis.

The de minimis

Most countries have set an exemption value that allows orders under that value to enter the country duty-free. This de minimis varies by country. For instance, it is $800 in the U.S. and just €22 in many European countries (i.e., Belgium, Denmark, Finland, France).

With $800 set as the U.S. de minimis value, Canadian merchants have a great opportunity to expand south of the border. That means no additional fees need to be paid by you or your customers to ship orders under $800 – leading to better margins and higher conversion rates.

Keep in mind that certain products in the U.S. may not qualify for the exemption, regardless of value. Find out more about the U.S. in section 4 of this guide.

Who pays for duty?

The answer to who pays for duty depends on how you ship the package: through the postal network (which means sending through Canada Post) or the commercial network (such as UPS, FedEx or DHL).

  • Postal network: When sending items through the postal network, it’s the responsibility of the recipient to pay any duties. Customs officials will determine how much duty will be applied based on the information you have provided about the value of the shipment, country of origin, materials used to manufacture the product, etc. Visit Canadian Border Services for more details.
  • Commercial network: When you send items through the commercial network, the payment of duties and taxes can be the responsibility of the merchant or the recipient, depending on terms of sale.
Note

Communication up front is key. To manage customer expectations and avoid cart abandonment, it’s best to make your customers aware of all costs associated with the transaction before they check out – including the possibility of paying duties and taxes.

3. Fill out the customs forms accurately and in detail

To clear customs, merchants must provide officials with the information they need to do their inspections. This information – i.e., the value of the item being shipped, the description of the item, or in some cases, where the item was manufactured – is provided on a customs form.

When you ship with Canada Post, the customs form is integrated right into your shipping label!

The most important takeaway for merchants: When you fill out the form, do it accurately and provide details when describing the contents of the package.

Doing so will help you clear the primary inspection and ultimately get your order to your customers faster.

At Canada Post, we provide all the required shipping and customs labels through our shipping tools, allowing for an easy and simplified creation of shipping labels.

To view the fields and information needed on the customs form, download a copy of Canada Post’s Guide to International Shipping.

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If you are sending your package through the commercial network (e.g., UPS, FedEx or DHL), you will also need to provide extra information on your customs form. This includes the country where your item was manufactured and the Harmonized System (HS) code. The HS code is a classification used during the customs process and is optional in the postal network.

Did you know?

Globally, the customs process is starting to become automated. Soon, all customs information will be electronically sent to customs officials once you fill out your form, so your package can make it across borders even faster.

4. Learn the customs process – it’s not as complicated as you think

While all goods shipped internationally are subject to the specific customs laws and regulations of the receiving country, the postal customs process is similar for most countries. It looks like this:

The primary inspection

Once the package is received in the destination country it begins the customs process, which starts with the primary inspection.

At this stage, the information on the customs declaration is verified (e.g., sender, receiver, value, commodity, etc.) and the item is visually inspected by a customs official who decides whether to clear the item for delivery or forward it for a secondary inspection.

A package is generally cleared in this stage if the customs form is filled out correctly, if there are no restrictions or prohibitions on the item, and if the value of the goods being shipped is declared to be under the de minimis threshold.

From here, your package is cleared for delivery and handed off to the destination country’s postal network.

The secondary inspection

There are several reasons a shipment may be subject to a secondary inspection:

  • Its value exceeds the de minimis and duties needed to be assessed by a customs official.
  • The shipment includes items requiring further inspection by other government agencies such as the Federal Communications Commission (FCC), Food and Drug Administration (FDA), et cetera, to determine whether the shipment is compliant with import laws of the destination country.
  • Customs may find some aspects of the package suspicious and wish to perform a more in-depth inspection. This could include mis-declaration of value, suspicious content, etc.

Once your package clears the secondary inspection, it’s cleared for delivery.

Packages that are denied clearance

During the secondary inspection, packages are generally denied clearance if they’re found to contain items that are non-mailable matter, prohibited, or restricted and the merchant has failed to provide the necessary documentation.

How do customs and duties get assessed? Read the Canada Post blog post on the customs process.

5. Know the ins and outs of shipping to the U.S.

The U.S. offers many opportunities for Canadian businesses, especially given the high $800 de minimis. To fully benefit from this opportunity, it’s important to stay on top of the rules and regulations of U.S. Customs.

Here are a few examples of rules to be aware of:

Shipping food

The U.S. Food and Drug Administration (FDA) requires prior notice on all products for human and animal consumption that are sent into the U.S.

The prior notice confirmation must be listed on the package to allow U.S. Customs and Border Protection to reconcile the filing with the FDA.

For more information, visit Importing food products to the United States.

Shipping electronics

While electronic products do not require additional paperwork or electronic filing, they do need to comply with the U.S. Federal Communications Commission regulations. Visit here for more information.

Restrictions and prohibited items in the U.S.

There are dozens of restrictions and prohibited items for the U.S. Find the full list in the Canada Post International Destination Listing. You can also use this listing when shipping to other countries.

Connect to the world and grow

Every business takes a different path to selling worldwide, so it’s not always easy to know which route is best for your business. Along the way you’ll encounter challenges and more than a few opportunities to make important decisions for the future of your business, which is why it’s so helpful to have access to partners you can trust.

Along your path to international sales, Canada Post is ready and available to help you make these decisions with full information and confidence. Whether your business is big or small, simply click below to connect with experts you can trust to help your business navigate the complexities of international shipping.

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Canada Post has representatives all over Canada who are ready to assist you.

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