Customs Release Process- All The Essential Documentation For Importers
Any imported commercial product arriving in Israel is required to complete a customs release process. We recommend that you consult a suitable professional in order to avoid making any errors during the process.
Generally speaking, it is imperative that you become familiar with the various documents you are required to have in you possession, which are summarized in the following table:
|Packing list, Invoice, Freight invoice||Commercial Document|
|Gate Pass||Port Document|
|Importer Declaration||Customs Documents|
|Licenses; Standards; Permits; Certificates||Government Documents|
|According to the rules established by the country of origin’s trade agreement with Israel||Certificates of Origin/Preference Documents|
|(Freight Bills (AWB, B/L, SWB)||Carriage Documents|
|Insurance Certificates||Insurance Documents|
The Customs Ordinance contains a complete summary of an Importer Invoice’s appearance, and addresses such details as the date, the importer’s name, the sale conditions etc.
- Invoice – represents the freight’s financial data, and is required to include:
- Manufacturer Logo
- Purchaser’s Name
- Number and Date
- Detailed Description of the Goods – including serial numbers
- Cost per Unit
- Total Value of Invoice (Type of Currency)
- Terms of Shipping and Payment
- Goods’ Country of Origin
- The Type of Export (temporary/ consignment) – in cases where no money is received or paid for the export, as in the case of samples meant for display or for use at an exhibition.
- Packing List – here we are concerned with a document that represents the freight’s physical data, and it is required when a number of different packages are included in the same shipment and/or container:
- Manufacturer Logo
- Purchaser’s Name
- Number of Packages
- Type of Packages
- Identification Numbers
- Each package’s weight
- Each package’s dimensions or volume
- Each package’s contents
- Freight Invoice – here we are concerned with the cost of shipping. The freight invoice is issued in two copies. One is submitted to customs authorities and the other is submitted to the importer.
Delivery Order – A document noting the freight’s physical location at the port of import. This is a document submitted by a shipping agent/international freight company to a customs agent in possession of the goods’ Freight Bill in order to allow the latter to carry out the port release procedures. This document, once signed by Customs, acts as the possessor and Customs’ authorization for delivering the freight to the customer. This is a legally significant document that transfers possession of the goods from the shipping agent/international freight company to the customs agent or importer after the former party has received payment for its carriage services. A copy of the Delivery Order signed by the port of unloading’s reckoning department is known as a Gate Pass.
Gate Pass – as noted above, we are concerned with a certificate the importer can use for transporting the freight from the import port after releasing it from customs (includes the freight location number).
Import Declaration – this is a document that proves import taxes have been paid to the state. The Import Declaration is completed by the customs agent when the latter receives the documents required for releasing the goods from the importer. After the customs release process is complete, this Declaration will primarily serve as a receipt for the taxes’ payment, as a tax invoice for offsetting VAT and as a customs certificate permitting the freight’s release.
Importer’s Customs Declaration – The Importer Declaration (Customs Form no. 138) is a form that needs to be completed by the importer and is meant for indicating the relations between the importer and the supplier for the purpose of calculating the total value of the deal concluded between them including all auxiliary costs.
The Declaration also requires the Importer to complete its identifying details and to declare whether “special relations” as provided by applicable legislation exist between itself and the foreign supplier, and whether these relations affected the deal’s value. The Customs Ordinance also specifies additional costs that need to be taken into account when concluding a deal, such as discounts, special relations, interest associated with the deal’s financing etc. These costs need to be taken into account since they are also manifested in the goods’ value with respect to the final customer (the consumer) [i.e. in the price the consumer eventually pays for the goods].
There are two types of Importer Declarations. The first is a Periodic Importer Declaration, which refers to each supplier separately. In other words, this is a Declaration pertaining to a regular supplier from whom merchandise is purchased by the importer on a day-to-day basis. The second is a Specific Import Declaration’s Importer Declaration, which is a one-time declaration pertaining to a single shipment and meant for cases where differences exist between the data contained in a supplier’s Periodic Importer Declaration and the data contained in the Import Declaration pertaining to a specific shipment from the supplier.
The annual Importer Declaration, which used to be a physical document, presently exists as a digital document that is digitally transferred [‘scanned’] to the Customs Authority’s Global Gateway [Sha’ar ‘Olami] system, so a smart card is required to complete it. It should be noted, however, that the document’s contents did not change, and the same questions still exist in the digital document. However, the very fact of digital submission gives rise to a significant change in the Customs Authority’s enforcement and cross-referencing capabilities.
Importers are required to fill in new Importer Declarations in the following cases:
- Working with a new supplier
- Renewing an expired Importer Declaration
- If the importer was formerly exempted from submitting an Importer Declaration is now legally obliged to do so [submit an Importer Declaration]
- If there is any change in any of the responses provided in an earlier Importer Declaration that affect the importer’s future business with a given supplier
We would like to stress that the Importer Declaration submitted to the Customs Authority is a highly significant document and the importer must ensure that it fully understands how it should be completed in a correct and professional fashion, as well as how the manner of its completion should be supported by orderly internal business procedures.
Here we are concerned with an NTB (Non Tariff Barrier).Import Certificates and/or Licenses (when these are required by a Free Import Order) – this certificate/license is issued by a duly authorized professional party know as the Duly Authorized Authority. Duly Authorized Authorities issue certificates and/or licenses, whichever is applicable, in accordance with relevant legislation, regulations and procedures that, among other things, regulate the procedures associated with applying for these certificates and/or licenses. For example, the Ministry of Health’s National Food Service is the Duly Authorized Authority with respect to the licensing of food imports to Israel. The National Food Service acts in accordance with the Public Health Protection Law and has also instituted procedures to this end.
Importers whose merchandise is covered by exceptions to the rules established in a Free Import Order (for example, who are exempt from presenting a Standards Authority Certificate) – [in such cases] the Customs Item number allows us to know whether the item needs to comply with a given standard and which standard is applicable. There are [also certain cases] where a given standard does not in fact apply to given products despite provisions in their Free Import Order that specify that the product must comply with the requirements of said standard.
In such cases, an importer can obtain a suitable certificate (presently issued by the Standards Institute of Israel [SII]) stating that a given standard does not apply to a given product (an SNA [Standard does Not Apply] Certificate [TALACH [Teken Lo Chal] Certificate in Hebrew]). This certificate allows the importers to release the imported shipment from Customs.
If a given standard does apply to a given product, then the product must be sent for standards-compliance testing and [the importer must] obtain [and present] a Standards Compliance Certificate issued by the SII or by a laboratory recognized by the Ministry of Economy and Industry’s Standardization Administration that will allow it to release the product from customs.
Please note that any imported products subject to an official standard have been divided into 4 levels of standards compliance testing according to the level of risk they pose to public health and safety as of June 1st, 2005.
Group 1: Goods with the greatest level of inherent risk, such as toys, domestic electrical appliances, pressurized containers, foam-based portable fire extinguishers etc. Every shipment must be inspected.
Group 2: Goods with an intermediate level of inherent risk, such as light bulbs for various uses, pipe fittings/connectors, carpets, bottles, roof sealing sheets etc. Goods belonging to this group require a one-time certificate pertaining to the specific product model and an Importer Declaration stating that the products contained in the supplier’s day-to-day shipments are identical to the certified model and that they comply with the requirements of applicable standard. [If these conditions are satisfied, Customs will not] inspect the products contained in day-to-day shipments.
Group 3: Goods with a low level of inherent risk, such as ceramic tiles for covering walls, sunglasses, ceramic toilet seats etc. Goods belonging to this group only require an Importer Declaration and do not necessitate an inspection of the actual product.
*A lawyer’s signature is no longer required insofar as the shipment of goods belonging to standardization groups 2 and 3 is concerned. However, [such shipments still require] an Importer Declaration (that does not require the presence of a lawyer) alongside a detailed product file as specified in Standardization Administration directives. Importers must sign a declaration according with Appendix A of the Standardization Administration’s Directives and Procedures [manual] in a Microsoft Word format document that permits the unlimited addition of lines. Please pay careful attention to the paragraphs at the beginning of the new [version of] Appendix [A] that are meant for ensuring that no manipulations are made to the form other than the completion of the specified particulars.
Group 4: Goods meant for industrial use only and not meant for consumers, such as industrial electrical goods etc. The release of such goods [from Customs] is not contingent on the obtainment [and presentation of] an official Standards Compliance Certificate.
Link to detailed standardization information on the Ministry of the Economy website that will allow you to find out the official standards (and which sections of the standards are official if only some of them are official), which standardization group the standard belongs to (which affects its inspection regime) and which laboratories were recognized by the Standardization Administration for import inspection purposes (import inspections will be gradually opened for competition from 2018 onwards in order to allow private laboratories to compete with the SII)
*Exemptions – An exemption from [the need for] an import license, certificate, or permit may be granted in specific cases unless we are concerned with products whose importation is prohibited by the provisions of a Customs Order. Further detailed information concerning exemptions according to section 2(c)2 of the Free Import Order / Fifth Supplement to the Free Import Order and other [types of] exemptions [such] as customs fee exemptions (MB 381), as well as the distribution of importation quotas for the duty-free or reduced-custom-fee importation of processed foodstuffs – which are contingent on the obtainment of a license can be found in the following link to the Exemptions chapter of the Importer Guide on the Ministry of the Economy website
Certificate of Origin/Preference Documents:
A certificate indicating the goods’ country of origin according to an agreement between countries. There are various rules contained in Israel’s trade agreements with other countries that govern the realization/utilization of the benefits contained in the preference agreements [with these countries] (usually an exemption from or a reduction in customs fees). The importer must ensure that it understands the rules specified in the trade agreement applicable to the country it is importing the goods from provided said country has signed such a trade agreement with Israel.
A distinction should be made between Certificates of Origin and Declarations of Origin.
*[Actions according with] agreements signed with EU [states], EFTA [countries] (Norway, Iceland, Switzerland, Lichtenstein) and Turkey must include EUR-1 or EUR-MED type Certificates of Origin. The Certificate must be signed by the exporter and by the exporting country’s customs authority. This Certificate has an alternative which is the Declaration of Origin. There are two types of Declarations [of Origin]:
- Limited Declaration – [up to a value] of 6,000 Euros.
- Unlimited Declaration made by an Approved Exporter (which undergoes a training course lasting several hours and taking place at the Israel Export Institute) or by a Certified Exporter.
*[Actions according with] agreements signed with MERCOSUR countries – Brazil, Argentina, Uruguay and Paraguay - must be accompanied by a Certificate of Origin signed by the exporter and by the exporting country’s customs authority.
*[Actions according with] agreements signed with Canada and Mexico must be accompanied by a Certificate of Origin signed by the exporter only.
A Declaration Invoice is an Invoice containing a Declaration of Origin. This Declaration actually replaces a Certificate of Origin. Please note that the Joint Israel-US government commission adopted a resolution concerning the cancellation of the need for a Certificate of Origin and a transition toward the submission of a Declaration signed by the good’s manufacturer or supplier in the countries of origin that will be submitted as part of the [Tax] Invoice or a commercial document (a Packing List alone) such that there will no longer be a need for a separate document or for the involvement of additional parties on November 1st, 2017.
Carriage Documents – Freight Bills:
A Freight Bill is a document [certifying] the receipt of freight issued by the shipper and indicating the details of the sender and recipient, the description and amount of merchandise, the merchandise’s origin and intended destination, the party paying for shipping and more.
Sea Waybill/Ocean Bill of Lading/Marine Bill of Lading
The Sea Waybill is one of the most important documents in the international trade apparatus. Its importance is far greater than [suggested] by its limited basic definition as a document issued by the [container] shipping company or by its agent and [it is] meant for use as [a] –
- Receipt – attests to the [existence] of the freight accepted for shipping and to its external condition
- Evidence attesting to the existence of a shipping contract between the shipping company and the merchandise’s sender/consigner and including the shipping’s terms and conditions
- Document of Title – attesting to the fact that the holder of a waybill issued to her/his/its name, or assigned to her/his/its name [also] holds an exclusive right to transfer the goods to her/his/its possession or to transfer the right to possess them to another person. The transfer of a right of possession is permitted by virtue of the waybill’s nature as a negotiable instrument. Any person possessing an original waybill issued to her/his name or assigned to her/him may gain possession of the goods once they arrive at the destination port.
It should be noted that a Sea Waybill is not necessarily a document that imbues a person with the right to possess a given item of freight. This depends on the type of document. A Seaway Bill only complies with the first two parameters: a receipt, and evidence attesting to the existence of a shipping contract.
A Freight Bill can be negotiable but it is not automatically negotiable. There are certain types of marine Freight Bills that are non-negotiable and do not constitute a Document of Title. Such Freight bills are known as Express B/L or Sea Waybill[s].
Air Waybill/Air Consignment Note
Unlike a Sea Waybill, an Air Waybill does not constitute a Document of Title and cannot be assigned in order to transfer the right to possess the merchandise to another person. This is why the only party that can receive the merchandise upon its arrival at its intended destination is the consignee the Air Waybill was issued to.
An Air Waybill can be used as evidence attesting to:
- The existence of a shipping contract between the shipper and the consigner
- The receipt of the goods by the shipper
In addition, an Air Waybill can also serve as:
- A Shipping Invoice
- Instructions to the Shipper pertaining to the freight’s handling and delivery to its intended destination
- An Insurance Certificate (if the insurance is carried out by the [cargo] airline).
An Air Waybill is issued by the shipper or by an agent acting on its behalf. The consigner bears responsibility for the truthfulness of the [declared] merchandise particulars.
Internal and Direct Freight Bills
An Internal Freight Bill is a Freight Bill issued by an international shipper the case of consolidations (several shipments being made on the same marine vessel/aircraft). This type of Freight Bill is issued by the shipper. Internal Freight Bills will state the international shipper as the shipper while Direct Freight Bills will state the [cargo] airline or marine shipping company as the shippers.
Insurance Documents (If Applicable):
Marine Insurance (a general term, this terminology also applies to airfreight insurance) is a contract in which an insurer commits to compensating an insured party (freight owner, importer, or exporter) with a contracted amount of money in any case of the loss or damage of the insured party’s freight as a result of marine, aerial or terrestrial risks in the course of the journey from the seller’s warehouse to the buyer’s specified destination in return for the payment of a predetermined insurance premium.
The insurance [policy] seeks to return the insured party to its pre-damage condition.
Therefore, said compensation will only be paid to an insured party who possessed an ‘insurance affiliation’ with the freight when the damage took place, i.e. a party who possessed a proven legal relation to the goods (ownership, possession or lien) and that would suffer from a monetary loss on account of the damage. A Marine Insurance Policy is a negotiable instrument, and the insured party can transfer the rights contained therein [in the Marine Insurance Policy] to another beneficiary by way of assignment.
The Insurance Certificate must be attached to the package of documents submitted to the Customs Authority. We recommend insuring the merchandise in any case.
*The above should solely be considered as preliminary information and does not contain a comprehensive presentation of all regulatory or legal requirements. Nothing in the above constitutes legal advice or an alternative to legal advice or a legal opinion. The above text constitutes a general description and is not binding in any way. The reader should also consider the fact that procedures, circulars, ordinances and regulations are added or modified over time and that these occasional changes and updates must be tracked before carrying out any action based on the information contained in the present document.
*This article only addresses the documents required for the importation process. There may be additional regulatory requirements that must be satisfied but which are not part of the importation procedure. These include, for example, labeling and marking requirements, cross-sectional standardization requirements, environmental legislation requirements and more.
*The sources used for preparing the present article include the book Importation, Exportation and International Trade by Ze’ev Telem, an international trade expert, consultant to importation and exportation companies, and academic director of foreign trade courses at the Tel Aviv and Central Israel Chamber of Commerce’s Business College and at additional bodies concerned with international trade.