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How Do I Import Raw Materials?

Merchants can store imported raw materials at bonded warehouses without paying duties.
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  • Written By: Peter Hann
  • Edited By: Angela B.
  • Last Modified Date: 12 April 2014
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Finding the correct and most cost-effective supplier for raw materials may be done through a specialist importer or by getting information from a foreign trade commission or consulate. When a foreign supplier is identified, the business wishing to import raw materials may arrange for samples to be examined and agree to the terms of a contract. The provisions of the contract and the method of payment for the goods must be clear to both parties. When the raw materials arrive at the port of entry, customs formalities must be dealt with and import duties paid. The importer should ensure that any available customs duty exemptions or deferral arrangements are claimed, if this is appropriate.

A business that needs to import raw materials may find information on producers from publications issued by trade commissions or it may consult the commissions' websites. Information about any possible restrictions on trade with certain countries — including licensing, regulations and any trade barriers — may be obtained from foreign consular offices. When a potential overseas supplier has been identified, depending on the type of materials to be imported, it may be possible to request samples of their product. These may be examined for quality and shown to the various sections of the company that will need to make use of them. It also is possible to employ the services of an independent inspection company to perform this task.

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An important factor for a business wishing to import raw materials is the agreement with the foreign supplier. It is essential that the terms of the agreement are clear to both buyer and seller, despite language and cultural differences. The contract with the supplier must specify the products being purchased, the price and payment terms, shipping terms, delivery, insurance and arrangements for dispute resolution. Full use should be made of standard international contract terms such as the international commercial terms issued by the International Chamber of Commerce. These can help to clarify the responsibilities of each party with regard to freight and insurance during each part of the transit of goods from seller to buyer.

When the raw materials arrive at the port, entry documents must be filed with the customs authorities. Depending on the laws of the country into which the business wants to import raw materials, evidence of ownership of the goods will be required and a relevant document, such as a bill of lading or an air waybill in the case of air freight, should be produced. The customs authorities also will require a guarantee of payment of customs duties and any other taxes or penalties. The importer could use a customs broker to complete customs formalities. The payment of duties can be delayed by storing the goods in a bonded warehouse, where they will remain under customs control until they are removed by the owner and put into circulation.

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