Checking of Bill of Lading against Customs documents

I had a question from a reader related to the checking of Bill of lading against customs documents

Dear Sir, Every shipping line check bill of lading with shipping bill. why they are checking with s.bill. is this advised by Indian gov. or as per IMO. wht are the details to match….

The Customs documents

If you are wondering what a “shipping bill” referenced in the above question is, you are not alone.. In India a shipping bill is the document you pass with customs before you export the cargo.. It is known by many names in different countries..

South Africa calls it “Bill of Entry – SAD500”, UK calls it “Export Declaration (using the NES)”, Japan calls it “Customs form C-5010”, Canada terms it “B13A – Export Declaration”, and so on and so on and could look like below..

But whichever country it is or whichever document is used as a customs declaration , the common thread here is that, it is always or should always be checked and verified by the shipping line against the bill of lading issued..

I don’t think there is any shipping line or agent in the world that does not do this check.. If there are some, in their best interest, it is necessary that this check is done..

But WHY, you ask..??

 

The connection between customs and shipping line

First and foremost, every shipping line, agent, broker, freight forwarder operating in a country must adhere to the rules and regulations of that country..

When it comes to foreign trade, the main body that regulates and polices the movement of cargo in and out of the country is the Customs and Excise department..

All cargo moving in and out of the country should be cleared with Customs before the cargo is released (in the case of imports) or shipped (in the case of exports)..

The responsibility of securing this clearance from Customs rests with the importer or exporter as the case maybe..

A shipping line or agent must be registered with Customs in order for them to operate their services within the country..

The shipping line has a responsibility to Customs to ensure that none of the goods are released to the customer (in the case of imports) or shipped on board any vessel (in the case of exports) without getting the authorised release from customs which maybe in a manual or electronic format..

 

What should the shipping line check and what should they check against..!!

As you know, a bill of lading has 3 basic functions or roles..

1. Evidence of Contract of Carriage
2. Receipt of Goods and
3. Document of Title to the goods

As an evidence of the contract of carriage and receipt of goods, the bill of lading is the key document used by the shipping line to declare the nature of the cargo that is carried under this contract of carriage..

In case of any queries by customs anywhere in the world relating to the cargo on board a ship, the first document they will ask the shipping line is the “manifest“..

The manifest as you maybe aware is essentially a collation of all the bills of lading issued by the shipping line for that particular vessel and the manifest should naturally have the same information as the bill of lading..

So, to answer the above question, the shipping line is checking (or should be checking) to verify that the cargo description and other information shown on the import or export declaration to Customs is the same as that is shown on the line’s bill of lading..

This is especially important when the shipment is in containers because in a containerised shipment and especially FCL cargoes, the shipping line/agents are not privy to the packing of the containers or the nature of the cargo that is inside the containers..

The shipping line relies on the information provided by the shipper in terms of the cargo, number of packages, weight and measurement..

For example, there could be customers who book Cargo A with the shipping line but this Cargo A maybe prohibited by customs and therefore the declaration to customs could be Cargo B..

The shipping line is the custodian of the cargo till it is accepted for release by customs.. So if they release or ship the cargo without receiving the release from customs, the shipping line maybe liable for heavy penalties, legal action which may also result in the revoking of their operating license..

Therefore it is imperative that the shipping line checks the bill of lading against customs documents to ensure that the cargo declarations on the bill of lading and customs documents match..

Have you had any experiences (positive or negative) in this regard..?? Do share it..

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Article reposted after some updates

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