1.3 Micronesia Customs Information | Digital Logistics Capacity Assessments

Duties and Tax Exemption
Customs Clearance

For contact information regarding government custom authorities, please follow the link below:  4.1 Micronesia Government Contact List

Customs policy, procedures, rules and regulations are the responsibility of the Division of Customs and Taxation Administration (DCTA) of the Department of Finance and Tax Administration. (DFTA)

While each State maintains various departments, at state level customs is regulated and controlled nationally with an office in each of the four states.

Duties and Tax Exemption

Duties and tax exemption can be applied for all goods that are part of a foreign aid program and for all goods that are used for humanitarian purposes. Tax exemption requests must be agreed to and approved by the Secretary of the Department of Finance and Tax Administration.

Applications are made on a consignment or case by case basis and organisations are not given a blanket exemption based on the organisation’s activities.

All goods which are classified as being goods that fall under the import category of Foreign Aid and also for use in Humanitarian Aid are tax exempted. However, any of these goods being imported under such classification and subsequently sold will attract all taxes. Imported goods that are donated are not taxed. (Source: Department of Customs and Tax Administration (Palikir).

Emergency Response

[Note: This section contains information that is related and applicable to 'crisis' times. These instruments can be applied when the Government officially declares an emergency.  When this occurs, there is usually a streamlined process to import goods duty and tax-free.]

Agreements / Conventions Description	Ratified by Country? (Yes / No)
WCO (World Customs Organization) member	No
Annex J-5 Revised Kyoto Convention	No
OCHA Model Agreement	No
Tampere Convention (on the Provision of Telecommunication Resources for Disaster Mitigation and Relief Operations)	No
Regional Agreements (on emergency/disaster response, but also customs unions, regional integration)	Public Law 15-58 section Compact of Free Association with United States

Exemption Regular Regime (Non-Emergency Response)

Duties and tax exemption fall under Section 222 of title 54 1 of the Code of the 2 Federated States of Micronesia Amendment 15-118. Specifically section 6 Refers to the exemption for goods imported for foreign aid projects and Section 9 refers to good used for humanitarian purposes.

The procedures and polices do not change with the enactment of a state of disaster or emergency.

The official process to be followed for taxes exemption is the same.

While an organisation can directly apply for tax exemption directly to the DFTA during non-disaster times, during a national state of emergency they should channel duty and tax exemption requests through the Department of Environment, Climate Change, and Emergency Management  (DECEM) who are the national focal point and cluster coordination focal point and will be able to expedite exemption requests directly to the Secretary.

Organizational Requirements to obtain Duty Free Status
United Nations Agencies
All UN Organisations are exempt from duties and taxes if the goods are for the use in humanitarian programs assessed on a case by case or individual consignment bases
Non Governmental Organizations
All Non-Government Organisations are exempt from duties and taxes if the goods are for the use in humanitarian programs assessed on a case by case bases individual consignment basis.

Note: Organisations cannot get a blanket exemption based on the organisation activities. (source Assistant Secretary to DCTA)

Exemption Certificate Application Procedure

Duties and Taxes Exemption Application Procedure
Generalities (include a list of necessary documentation)
The Tax exemption process requires only standard transport and shipping documentation to request the exemption. Documentation Required Copy Air Waybill/ Bill of Lading Copy Commercial Invoice. Indication of value of goods Itemised Packing List Letter of Donation detailing consignee -If being donated to DECEM or Government Department Letter of Request for duty and tax exemption detailing purpose of use i.e. humanitarian disaster relief.
Process to be followed (step by step or flowchart)
Pre Shipment Approval Goods donated to FSM Govt Entities and Agencies For all goods being donated to Government entities and agencies it is essential that prior to shipment, approval from the departments as the consignee has been granted. This includes DECEM, Department of Health and all other departments There must be documented approval of the packing list and the agreement to receive the goods consigned 2. Obtain Dispatch Documents from Point of Origin Original Bill of Lading/ Airway Bill Commercial Invoice/ Invoice for value of goods in consignment Itemised packing list Letter of Donation 3. Send Original Documents Courier copies or original documentation -Specific to consignment to in country contact. Shipping Agent if relevant National Office or organisation If DECEM or Govt Department consignees they must be notified prior to dispatch 4. Arrival of documents a. Obtain Request for Tax exemption letter from Government Dept. or Organisation to complete 5. Submit to DECEM Take all original documentation to DECEM to facilitate exemption request to DCTA 6. DCTA Approval Once Exemption is granted take documentation to Customs agent at point of import or shipping agent if applicable

Exemption Certificate Document Requirements

Duties and Taxes Exemption Certificate Document Requirements (by commodity)
	Food	NFI (Shelter, WASH, Education)	Medicines	Vehicle & Spare Parts	Staff & Office Supplies	Telecoms Equipment
Invoice	Yes, 1x copy	Yes, 1x copy	Yes, 1x copy	Yes, 1x copy	Yes, 1x copy	Yes, 1x copy
AWB/BL/Other Transport Documents	Yes, 1x copy	Yes, 1x copy	Yes, 1x copy	Yes, 1x copy	Yes, 1x copy	Yes, 1x copy
Donation/Non-Commercial Certificates	Yes Letter of Donation 1x copy	Yes Letter of Donation 1x copy	Yes Letter of Donation 1x copy	Yes Letter of Donation 1x copy	Yes Letter of Donation 1x copy	Yes Letter of Donation 1x copy
Packing Lists	Yes, 1x copy	Yes, 1x copy	Yes, 1x copy	Yes, 1x copy	Yes, 1x copy	Yes, 1x copy
Other Documents	Letter of Duty and Taxes Exemption Request Original	Letter of Duty and Taxes Exemption Request Original	Letter of Duty and Taxes Exemption Request Original	Letter of Duty and Taxes Exemption Request Original	Letter of Duty and Taxes Exemption Request Original	Letter of Duty and Taxes Exemption Request Original
Additional Notes
Medical Items- There are no specific requirement for import of medical items other than outlined above Vehicles- There are no specific documentation requirement for the import of vehicles for use in humanitarian or disaster programs Communications Equipment- There are no specific requirements for the importation of Satellite phones / VHF or HF radios (Source :Assistant Secretary -Division of Customs and Tax Administration Palikir)

Customs Clearance

General Information

Customs Information
Document Requirements	As Outlined Above
Embargoes	None
Prohibited Items	Firearms, illegal drugs
General Restrictions	There are no general restrictions

Customs Clearance Document Requirements

Customs Clearance Document Requirements (by commodity)
	Food	NFI (Shelter, WASH, Education)	Medicines	Vehicles & Spare Parts	Staff & Office Supplies	Telecoms Equipment
D&T Exemption Certificate	Yes 1 x original	Yes 1 x original	Yes 1 x original	Yes 1 x original	Yes 1 x original	Yes 1 x original
Invoice	Yes 1 x original	Yes 1 x original	Yes 1 x original	Yes 1 x original	Yes 1 x original	Yes 1 x original
AWB/BL/Other Transport Documents	Yes 3 x original	Yes 3 x original	Yes 3 x original	Yes 3 x original	Yes 3 x original	Yes 3 x original
Donation/Non-Commercial Certificates	Yes Letter of Donation 1x Original 1x Copy	Yes Letter of Donation 1x Original 1x Copy	Yes Letter of Donation 1x Original 1x Copy	Yes Letter of Donation 1x Original 1x Copy	Yes Letter of Donation 1x Original 1x Copy	Yes Letter of Donation 1x Original 1x Copy
Packing Lists	Yes 1 x original	Yes 1 x original	Yes 1 x original	Yes 1 x original	Yes 1 x original	Yes 1 x original
Phytosanitary Certificate	No	No	No	No	No	No
Additional Notes
Used clothing For the import of used clothing items no phytosanitary certificate is required to facilitate the import. However such goods will be inspected by quarantine. Should there be identifiable contamination the container will be decontaminated at cost to the consignee.

Transit Regime

No ports in Micronesia have bonded facilities but can however store full containers for goods in transit.