Physical examination involves visual checking of goods to verify the nature, properties, origin, condition and quantity to ensure proper customs valuation, tariff classification and that regulatory compliance before clearance.
By Edwin Norasco
The customs cargo clearance process begins with declarations, where importers submit requisite information regarding the goods prior to their arrival.
This information is then reviewed and validated by customs authority through physical or intrinsic examination, and any required modifications are requested from the importer.
The goods are also subjected to inspection by other government departments (OGDs) to ensure compliance with different regulatory requirements.
Physical examination involves visual checking of goods to verify the nature, properties, origin, condition and quantity to ensure proper customs valuation, tariff classification and that regulatory compliance before clearance.
While most goods can be accurately identified and classified through simple visual inspection or documentation review, certain products require scientific testing to determine their identity and ensure proper classification.
Items such as industrial chemicals, cosmetic ingredients, pharmaceutical products, flavours and fragrances, food additives and sweeteners, chemical precursors and intermediates, agricultural chemicals, plastics and polymers, alloys and toxic substances and poisons fall under this category and cannot be reliably differentiated without a thorough chemical analysis.
The Tanzanian Revenue Authority's (TRA) through their sixth corporate plan 2022/23 – 2025/26 under the strategic directions for 2022/23 – 2025/26 established a customs laboratory to support its operational efficiency.
This laboratory will be a specialised facility operated by customs authorities to carry out scientific and chemical analyses of imported and exported goods.
Its role will be to verify product identity, composition, and quality, ensuring accurate classification for valuation, the correct assessment and collection of duties and taxes, and compliance with applicable regulatory requirements.
In practice, the customs laboratory function will be extended beyond the determination of correct classification of products in the Harmonized System (HS) to being a critical tool in the fight against dangerous substances such as chemical weapons, ozone depleting substances, pesticides, persistent organic products, and drug precursors.
Personnel in these laboratories will be required to demonstrate expertise that extends beyond analytical techniques, industrial manufacturing processes, and general chemistry, to include a comprehensive understanding of customs procedures, regulations, and compliance requirements.
Historically, the customs authority has relied on assessments conducted by the Chief Government Chemist Laboratory Agency (GCLA). However, with the increasing volume and complexity of traded goods requiring chemical analysis, there is a growing need for the customs authority to establish its own independent and dedicated laboratories, staffed with qualified personnel to conduct customs-specific analyses.
This shift raises important considerations for traders whose businesses depend on customs processes, making it increasingly critical for them to understand the implications of this change to effectively navigate the evolving regulatory environment.
This shift by customs authorities means that traders will need to take greater precautions to ensure their goods comply with both tariff and non-tariff regulatory requirements.
The introduction of the customs laboratory will undoubtedly enhance operational efficiency in customs inspections. Traders can expect more accurate determinations of product classifications, which could reduce disputes related to tariff classifications.
However, this could also come at cost of anticipated delays. Therefore, traders who deal with products that require specific chemical analysis or are subject to environmental and safety regulations, should prepare for a more rigorous process and ensure that they their documentation and certifications in order, before shipment.
While the introduction of the customs laboratory is designed to streamline and improve customs processes, it could also introduce additional costs for traders. These could include costs associated with meeting compliance requirements, and potential delays that could impact supply chains.
Traders are therefore encouraged to budget for these expenses and factor them in their pricing strategies to maintain profitability.
To effectively adapt to the new customs laboratory and its associated changes, it is important for traders to take proactive measures including staying updated on the latest regulations, investing in compliance training for staff, and consulting with customs experts to ensure that their operations meet all the requirements.
Edwin Norasco is a Senior Tax Advisor with KPMG Advisory Limited ([email protected]). The views and opinions are those of the author and do not necessarily represent the views and opinions of KPMG
