23/06/2024 By admin Off

What are the customs procedures, definitions and concepts that second-hand , used machinery export and import companies should know?

Exporting and importing second-hand or used machinery involves various customs procedures, definitions, and concepts that companies must be familiar with to ensure compliance with international trade regulations. Here is a comprehensive explanation of the critical elements involved:

1. Customs Procedures

Import and Export Documentation

  • Commercial Invoice: A document that provides details of the transaction between the buyer and the seller, including the price, terms of sale, and a description of the goods.
  • Bill of Lading (B/L) or Air Waybill (AWB): A document issued by a carrier to acknowledge receipt of cargo for shipment.
  • Packing List: Detailed information about the contents of the shipment, including the weight, dimensions, and packaging of each item.
  • Certificate of Origin: A document certifying that the goods were manufactured in a specific country. This may affect the duties and tariffs applicable.
  • Import/Export License: Certain countries require licenses to import or export specific types of goods, including used machinery.
  • Customs Declaration Form: A form submitted to customs authorities detailing the goods being imported or exported. It includes information about the value, classification, and origin of the goods.

Customs Clearance

  • Classification: Goods must be classified under the Harmonized System (HS) code, which determines the applicable tariffs and duties.
  • Valuation: Determining the value of the goods for customs purposes, which may include the cost of the goods, shipping, and insurance.
  • Inspection: Customs authorities may inspect the shipment to verify the contents and ensure compliance with import/export regulations.
  • Duty and Tax Payment: Import duties, taxes, and other fees must be paid to clear the goods through customs.

2. Definitions and Concepts

Harmonized System (HS) Code

  • HS Code: An internationally standardized system of names and numbers to classify traded products. Each product is assigned a unique code that determines the applicable customs duties and regulations.
  • Chapter, Heading, and Subheading: The HS code is structured into chapters, headings, and subheadings. For example, used machinery might fall under Chapter 84, which covers “Nuclear reactors, boilers, machinery and mechanical appliances; parts thereof.”

Valuation Methods

  • Transaction Value: The most common method, based on the price actually paid or payable for the goods when sold for export.
  • Deductive Value: Based on the resale price of the goods in the importing country, minus certain costs.
  • Computed Value: Based on the cost of production, plus an amount for profit and general expenses.
  • Fallback Method: Used when none of the above methods can be applied, often involving a reasonable means consistent with the principles of the WTO’s Customs Valuation Agreement.

3. Regulations and Compliance

Import Regulations

  • Safety Standards: Used machinery must comply with the safety standards of the importing country. This may include certifications like CE marking in Europe.
  • Environmental Regulations: Compliance with environmental regulations such as emissions standards and waste disposal.
  • Prohibitions and Restrictions: Some countries have prohibitions or restrictions on the import of certain types of used machinery to prevent dumping or the spread of pests and diseases.

Export Regulations

  • Export Control: Some used machinery may be subject to export controls due to dual-use technology (items that can be used for both civilian and military applications).
  • Sanctions and Embargoes: Exporters must ensure that they are not exporting to countries or entities subject to international sanctions or embargoes.

4. Tariffs and Duties

Duty Rates

  • Ad Valorem Duties: Calculated as a percentage of the value of the goods.
  • Specific Duties: Calculated based on a specific amount per unit of measurement (e.g., per kilogram, per unit).

Preferential Tariffs

  • Free Trade Agreements (FTAs): Used machinery may benefit from reduced or zero tariffs under FTAs, provided it meets the rules of origin requirements.
  • Generalized System of Preferences (GSP): Developing countries may receive preferential tariff rates under the GSP.

5. Logistics and Transportation

Modes of Transport

  • Sea Freight: Common for heavy and bulky machinery, involving container shipping or break-bulk shipping.
  • Air Freight: Used for high-value, urgent shipments due to higher costs but faster transit times.
  • Land Transport: Often used for cross-border trade within the same continent, involving trucks or trains.


  • EXW (Ex Works): The buyer takes responsibility once the goods are available for pickup at the seller’s premises.
  • FOB (Free On Board): The seller is responsible for delivering the goods onto the ship; the buyer assumes responsibility from that point.
  • CIF (Cost, Insurance, and Freight): The seller covers the cost, insurance, and freight to the destination port, but the risk transfers to the buyer once the goods are on board the ship.

6. Insurance

Marine Insurance

  • Coverage: Insures against losses or damage to the goods during transit by sea.
  • Policy Types: Can be all-risk or named perils policies, depending on the level of coverage required.

General Liability Insurance

  • Coverage: Protects against claims for damages or injury that occur during the handling and transportation of the machinery.


Navigating the complexities of importing and exporting second-hand machinery requires a thorough understanding of customs procedures, compliance regulations, and logistical considerations. By staying informed about these aspects, companies can ensure smooth operations and avoid costly delays and penalties. Proper documentation, adherence to safety and environmental standards, and efficient logistics management are key to successful international trade in used machinery.

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