What Is an Import? Wonderful Definitions & Over 20 Examples
Import means a good that originates in a foreign country and is shipped domestically for sale or trade. Imports can be made due to the mandatory needs for essentially needed products such as energy and food products, or they can be made for products that are already domestic equivalents depending on the consumers’ demands.
Imports are carried out by selling products and services from countries where resources can be produced with much or lower costs to countries with low or high production costs. For example, importing natural gas from Russia and oil from Middle Eastern countries is a must for many European countries. Energy import is a must for countries with limited energy resources.
In another example, although there are companies and facilities capable of producing in the USA, many electronic devices are imported from China due to cheaper labor and production costs.
Companies that import or start to import should conduct careful and detailed research, especially for the products that will be imported for the first time, and carefully analyze the supplier companies and all the details about the product.
Top Importing Countries & Top Import Products
Imports have increased around the world, especially during the ’80s, with the increase in the number of countries that switched to a free market economy, reduced tariffs between countries, and reduced practices that made imports difficult.
The facilitation of trade between countries, the increase of commercial visas and trade fairs, the decrease in shipping costs, B2B sites operating in the online network, e-markets, and many more developments have accelerated international trade. One pillar of global business is export, and the other pillar is imported. In this context, the number of importers and importers has been increasing rapidly for years.
Global imports, which were 6.29 trillion USD in 2001, increased to 15.3 trillion USD in 2010 and 19 trillion USD in 2019. In the last 20 years, imports have tripled worldwide. The pandemic process caused both export and import graphs to decrease in 2020.
When the export statistics of the last twenty years are analyzed, we see that the USA is the constant leader. The USA realized 13% of world imports in 2019 with 2.56 trillion imports. Despite the pandemic process, the USA closed the year 2020 with 2.4 trillion USD imports. The USA’s title as the world’s largest consumer society seems to continue for many years to come.
Countries tend to specialize in certain product groups and evaluate their production capacities in exporting these products, thus importing inefficient and produced products in a limited capacity.
When we examine trade partnerships and trade associations, we see a similar strategy being applied. For example, countries in the European Union separate their export and import resources with a similar strategy.
Who Can Do Import Business?
Import of commercial goods is free in almost every country. Any company can import products that comply with the applicable customs regulations in their country. In some countries, companies that will import are required to obtain an importer company license.
The HS codes of the products planned to be imported should be determined, and the documents, permits, restrictions, and tax rates required for import should be determined according to these HS codes. Without this preliminary study, whether it is possible to import any product or the costs that will affect the imported product’s unit cost cannot be predicted.
Countries make imports from those countries advantageous by providing various tax exemptions to countries included in bilateral agreements or trade communities. EU member states, for example, can trade among themselves free of customs duties. Therefore, an EU country should pay attention to the customs tax rates imposed on non-EU countries, surveillance tax, quota, certification, etc.
The USA does not levy customs duties on 3474 different products imported from 131 different countries, with a Generalized System of Preferences (GSP). Therefore, a US importer should investigate whether the product he intends to import and the country he plans to import is on this list while researching products abroad. As an important cost item, Customs taxes are one of the most determining factors in the selection of imported products and countries.
Nowadays, it is not difficult for importers to search globally to find a product with the features they are looking for, thanks to the web marketplace, B2B sites, and the manufacturers’ websites. You have found the right product, and you believe it will be sold in your market. It’s easier than ever to import from all over the world.
What Is An Example Of Import?
To understand the import. It is the most logical method to describe the import processes through an imported example. Explaining a sample import operation with information about import documents will be much more explanatory for foreign importers.
“FR-X” company operating in France has a chain of stores selling suits. The company “FR-X” orders 5.000 Wedding Suits to a Turkish suit manufacturer named “TR-Y,” which he visited at the “Barcelona Bridal Fashion” fair. The two companies agree on details such as the production process, payment terms, and delivery terms. Company “FR-X” pays a down payment of 50% of the cost to “TR-Y” based on the proforma invoice. “TR-Y” company organizes the shipment in accordance with the incoterms specified in the invoice.
The company “TR-Y” starts the process for partial truck loading at Turkish customs with the invoice, packing list. In order to avoid customs tax in France, which is an EU member, a circulation certificate called ATR.1 is issued. The shipping company gives a CMR document as a bill of lading. In this way, the required document set at the French customs is completed.
When the truck reaches French customs, the document set is delivered to the French importer “FR-X” company, the customs broker. Turkey with exemption from customs duties ATR.1 document prepared by members of the customs union to be provided. The shipping company delivers the cargo of 5000 Wedding Suits to the company’s warehouses “FR-X” after the customs procedures are completed.
“US-1” company, operating in the USA, sells high-resolution optical lenses via drop-shipping method through social media channels and various e-commerce sites. “US-A” company has given a 1-week deadline guarantee to its local customers in the USA who place orders through e-commerce sites.
When the “US-1” company orders its supplier in China, they can deliver the products to the customer address they will specify in the USA within three days, through the UPS express courier, after a fast customs clearance process through electronic declaration. It works by keeping. The Chinese company uses a stock control application that can be accessed instantly by the “US-1” company, “US-1” company has integrated the Chinese company’s stock control application into its e-commerce site and social media channels.
When the Chinese manufacturer receives an order, it prepares a standard set of documents consisting of the invoice, packing list, and certificate of origin for both the preparation of an electronic export declaration in its own country and the use of the “US-1” company in the US customs. During the export stage in China, the UPS bill of lading is added to the document set. The product transported by air is processed with the same set of documents in US customs. After the import, procedures are completed at the US customs, and the customs duties, VAT, and other costs are paid for the product, the cargo is delivered to the address of the US company that purchased the product from the “US-1” company, pursuant to the two-stage transportation contract between “US-1” and UPS.
In this e-commerce based import process, the consumer that “US-1” sells the product in the USA is not a party to the customs procedures. After the import process on behalf of “US-1” is completed, it receives the product, just like a domestic shopping, with the e-invoice issued by “US-1”.
Aside from the basic import document set (standard import documents are: Invoice, Packing List, Certificate of origin, Bill of lading), depending on the imported product or the importing country, different documents and certificates may be requested from the customs of the country where your import transactions will be made. Requests such as inspection reports, test, and analysis reports may occur. Before starting an import, the demands of the importing country’s customs should be determined through the hs code of the product.
As additional information, bond openings by US importers for processing in US customs. In addition to standard import documents, the “Arrival Notice” (Inward Cargo Manifest) must be prepared and delivered to the shipping company’s US agency before it reaches US ports.
Import Regulations: Prohibitions, Products Subject To Permissions
In many countries, importing products such as drugs, weapons, explosives, and drugs has been restricted. While government agencies in some countries are the only authorized importer of such products, these products could be imported with a special permit or certain restrictions.
In transactions to be carried out within the framework of the import regime, the procedure to be applied and the permits to be obtained from the relevant institutions are determined in each country by the Import Communiqués, Product Safety and Inspection Communiqués issued by the Ministry of Commerce or the Ministry of Customs.
Import of the products listed below is subject to special authorization in many countries. Before importing, importers complete the information and documents that they have to submit at the customs stage, apply for permission, and import based on the approval they have received.
- Explosive substances
- Pharmaceuticals and medical products
- Live animals and plants
The importation of the products listed below is prohibited in many countries.
- Environmentally hazardous chemicals and scraps
- Protected animals
- Articles of counterfeit origin
- Counterfeit branded products
When the imported product reaches the borders of your country, it may be required to go through customs control and obtain the requested documents and certificates depending on the tariff code of the product, and sometimes inspection or testing. The importation of products may not be allowed due to missing or incorrect documents that do not comply with the customs standards.
Customs duties are called tariffs. Countries increase the product’s cost or the products imported from that country by increasing the import taxes applied to a product or product to be imported from a specific country. For example, during the trade wars with China, the USA increased the import costs of Chinese products by increasing the taxes on many products imported from China by up to 25%. In such a situation, importing companies in the USA have turned to different markets to import with more favorable tax rates.
However, unilateral customs tax increases between countries are not in line with the WTO’s free trade approach. WTO member countries can bring the issue to the WTO’s judicial bodies using their complaint mechanisms. At this point, “non-tariff barriers” appear.
Sometimes countries reduce or stop imports from the other country through non-tariff barriers instead of creating a pronounced response by increasing tariffs.
Non-tariff barriers are applied through imposing quotas, imposing embargoes, imposing anti-dumping, and demanding additional tax items such as surcharge, countervailing duties. Non-tariff barriers are often applied for political rather than economic reasons.
a1) Quotas : The most common form of non-tariff barriers are quotas, i.e., quantity restrictions. Here, quantity restrictions are imposed on importing certain goods or all goods into the country, and quotas are distributed accordingly to the importers. For example, it limits a specific product or a commercial good against a certain country by measures such as quantity, weight, m2. It is a quota practice to charge additional taxes on products that cross this limit. (Let’s assume that the European Union imposes a 1 million ton limit on coffee imported from Brazil. An additional tax will be levied on imports exceeding this rate.1 million tons is the limit of the EU’s quota to Brazil.)
a2) Voluntary Trade Restrictions : It is the mutual agreement of two countries that have foreign trade relations to limit the exports of certain goods. This application is provided by mutual consensus. It aims to prevent practices such as quotas or additional taxes. For example, Japan has committed to the USA that it will not exceed a specific number in its annual automobile exports to the USA.
a3) Surcharge In Import : Additional tax application in imports is the reflection of the additional payment under the name of extra tax or fund besides the normal customs duty on the imported product.
a4) Countervailing Duties : It is seen that some countries occasionally make support payments to producers per exported product in order to increase the export capacity of some sectors. The importing country imposes this type of tax to circumvent the support imposed by the exporting country, with countervailing duties in addition to the customs duty to protect the domestic industry.
a5) Extending Import Processes and Making Imports Difficult : We cannot explain this application with a single method. Countries can use different ways to make it difficult to import different products. For example, by requiring the control of the voltage values of imported electrical appliances and applying the entire control process at a single customs point, ensure the accumulation of the import files and prolong the process.
a6) Anti Dumping : Dumping can aim to capture the local market in the importing country and thus eliminate the domestic industry by exporting the goods produced by a company at a price below the price it sells in the domestic market. This situation is called dumping. Rival companies operating in a country that suspects that any goods are exported with dumping may request an anti-dumping investigation. The imported product’s cost is increased by taking guarantees such as additional tax and letter of guarantee for the imported products during the investigation process. If dumping is detected due to the investigation, various sanctions may be imposed on the exporting company or local importer partners.
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