This clause allocates responsibility for managing customs clearance procedures and associated costs when goods cross international borders. Customs clearance involves obtaining government approval for imported or exported goods, which typically requires submitting documentation, paying duties and taxes, and complying with regulatory requirements specific to the destination country. By including this in a force-majeure category, the clause likely addresses what happens when customs delays or denials occur—whether these are treated as excusable events beyond the parties' control, or whether one party bears responsibility for delays caused by customs authorities.
The clause matters because customs clearance can be unpredictable and costly, and disputes often arise about who should bear these costs and who is responsible if clearance is delayed or denied. If the clause assigns responsibility to the wrong party, it can create significant financial exposure or operational disruption. For example, if the seller is responsible for clearance but the buyer's country has unusual regulatory requirements, the seller may face unexpected costs or delays. Conversely, if the buyer assumes all customs responsibility, they may face delays beyond their control. The force-majeure framing suggests the parties are attempting to address whether customs delays excuse performance obligations.
Clearly specify which party is responsible for: (1) obtaining all necessary customs documentation; (2) paying customs duties, taxes, and clearance fees; (3) complying with destination country regulations; and (4) managing delays caused by customs authorities. Consider whether responsibility should be shared (e.g., seller handles export clearance, buyer handles import clearance), and specify what happens if one party's actions cause customs delays. Define what customs-related events qualify as force majeure excusing performance (e.g., unexpected regulatory changes, customs strikes), and what events do not (e.g., standard processing delays, known regulatory requirements). Include provisions for cost-sharing if customs issues arise, and establish a timeline for notifying the other party of customs problems. Consider requiring appropriate insurance to cover customs-related risks.
Frequently Asked Questions
What does this clause mean in simple terms?
This clause allocates responsibility for managing customs clearance procedures and associated costs when goods cross international borders. Customs clearance involves obtaining government approval for imported or exported goods, which typically requires submitting documentation, paying duties and taxes, and complying with regulatory requirements specific to the destination country.
Why should I care about this clause?
By including this in a force-majeure category, the clause likely addresses what happens when customs delays or denials occur—whether these are treated as excusable events beyond the parties' control, or whether one party bears responsibility for delays caused by customs authorities. The clause matters because customs clearance can be unpredictable and costly, and disputes often arise about who should bear these costs and who is responsible if clearance is delayed or denied.
What are my options?
If the clause assigns responsibility to the wrong party, it can create significant financial exposure or operational disruption. For example, if the seller is responsible for clearance but the buyer's country has unusual regulatory requirements, the seller may face unexpected costs or delays.
How does this affect small businesses?
Conversely, if the buyer assumes all customs responsibility, they may face delays beyond their control. The force-majeure framing suggests the parties are attempting to address whether customs delays excuse performance obligations.