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Reasons for Export / Purpose of Shipment

You've probably figured out by now that anytime you ship something internationally (with the exception of documents) a commercial invoice is required.  There are many reasons this document is required but mainly, it is so that custom's officials can determine if the items you are shipping can be imported within the country (are they allowed, restricted, or prohibited), but also to calculate the amount of tax to impose on the shipment (if any).  

The 'Reason for the Export' is an important element on the commercial invoice and selecting the right option can affect how your shipment is cleared and how much tax is imposed on your shipment.  Here are the 7 Reasons for Export that are currently permitted through Secureship.

 

1. Permanent / Sold

No explanation required :-)

 

2. Temporary

This option is meant for shipments that will be returning back to you. For example, you have tradeshow booth and event gear that will be shipped temporarily to the destination, used, and then shipped back to you when the show is finished.  You would use this option when shipping your items to the destination. Customs officials likes to know when the package is expected to be returned (or will leave the country) so find a way to include an expected return date on your commercial invoice.

Note: Not all courier's can clear shipments as temporary so the preferential tarrif rate or clearance method around temporary imports is not always available. 

 

3. Gift

In the Customs world, a gift is defined as "Any shipment containing articles to be given as an unsolicited gift, from one private individual to another private individual, which are not being shipped by a business nor consigned to a business."  If your shipping a gift, it also helps to include the wording "unsolicited gift" in the General Description and to have the word 'Gift' somewhere in the Detailed Description of Goods.

 

4. Repair / Warranty

There are two ways to look at this option - you are sending a shipment for repair or you have repaired the item and are shipping it back to the customer.  If either of those are true, you'll use the Repair / Warranty option as the Reason for Export.

If you are sending a shipment for repair - make sure you are clear to Customs that the shipment is going FOR REPAIR or Warranty replacement. This can be done by listing this information anywhere on the commercial invoice (normally in the General Description text field).

If you have fixed a shipment and are returning it to the customer, Customs like to know the market value/purchase value of the shipment along with the repair cost.

 

5. Commercial Sample

A Commercial Sample is defined as "Any shipment containing articles which are sent free of charge that have been marked or mutilated or otherwise made unsuitable for sale or use except as commercial samples, being shipped with the view of soliciting an order or as a mock-up to furthering an existing order from the foreign entity."

What to take away from all that? Your sample is free of charge and  mutilated or made unusable for resale.

 

6. Personal Effects

"Any shipment containing used personal articles such as unaccompanied baggage and household goods being shipped for relocation". This is typically used by those who are moving and are having their personal belongings shipped to an international location.

 

7. Return Shipment

If your shipment was temporarily exported and is now being returned back to you, this is the option you'll want to use.  Customs likes to see the tracking number of the original shipment as well as the original arrival date into the country so specifying that somewhere on your commercial invoice is always a good idea.

 

 

What if my shipment has multiple reasons for export?

This can happen in a number of ways but the best example that comes to mind is shipping items to a tradeshow.  Typically, these kind of shipments will contain a tradeshow booth and some equipment that will be used at the tradeshow and then shipped back when the show is over.  But you may also have some promotional material or printed matter that you will be giving out free of charge.  Use the reason that describes the majority of the shipment.  That said, you'll want to tell Customs what is returning and what is given out as a gift/commercial sample so you would specify this information for every part/line item (Detailed Description of Goods box) on your commercial invoice.

ie. Temporary: 1 TradeShow booth to be used at Solar Energy Convention returning to Canada on May 4th.

    Commercial Sample/Permanent: 100 Promotional kits given out free of charge to solicit business.

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