It is commonly referred to as the Clearing and Forwarding Instructions. Such instructions are made out on a shipment level. There are two components namely 1) Clearing, and 2) Forwarding. The completion of the form is a requirement by the LSP (Logistics Service Provider) for a Trader to ‘instruct’ or inform them of clearing and forwarding requirements.
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The ‘forwarding’ components of any instruction is not a legal requirement. It assists a LSP to understand all logistical requirements per shipment. Examples of forwarding instructions may include the mode of transport, packing, loading, delivery, unpacking requirements, temperature control during transport, and any special requirements.
The Customs Clearance information on the instructions is a legal requirement in both the old and the new Customs legislation. The Clearance Instruction is dealt with in section 176(1)(c) of the Customs Control Act number 31 of 2014, and in Rule 7.6 of the Rules to the Act. SARS has not provided a standard template of this form.
LSPs therefore improvise by setting up their own templates. While traders are generally requested to complete the “Agents” Clearing and Forwarding Instructions, some large traders use their own templates. There is nothing untoward about whoever’s template is used, so long as the minimum legal requirements are contained therein. Some large Traders supplement the Clearing and Forwarding Instructions with SOPs (Standard Operating Procedures). The SOPs are designed to apply to all shipments as a standard requirement of the Trader’s needs, i.e. for large quantities of highly repetitive clearances. This allows the instruction form to be simplified or even nullified. Such methods are normally accompanied by indemnities at contractual level.
So, what are the consequences of incorrect instructions, or not using instructions at all? Any incorrect or false information supplied to SARS Customs is an offence in terms of the legislation. The instruction shows the real intention of the trader at time of clearance. For example, if the importer requires a shipment to be cleared under rebate of duty but who accidentally instructs the LSP to bring duties to account, SARS Customs may argue that the importer had no intention to make use of the rebate facilities in the first instance. The importer will have a tough time qualifying for a reimbursement of the duties in a subsequent refund application. One occasionally lands up seeking legal recourse which is a cumbersome affair.
In the new legislation, a consequence of the Clearance Instruction not being utilised at all is that all Customs liabilities may become transferred from a Trader to the LSP. While this may appear to set the Trader free from Customs liability, the Trader may in the same instance lose legal standing over his own shipment. This double dilemma (i.e. transfer of liability and losing legal standing) affects both parties negatively.
In the new legislation, the Clearance Instructions will become more important for the clearance of goods than before.