What is High Sea Sale (HSS)?

High Sea Sale is a type of sale where goods are sold while still in transit on the high seas or international waters, before the goods reach the importer’s country. The seller (usually the exporter) sells the goods to a buyer (often a local importer or distributor) before the arrival of the goods at the destination port.

Why High Sea Sales?

• To defer import duties and taxes until the actual import.
• To transfer ownership and risk while the goods are still at sea.
• Facilitate easier clearance and distribution by local buyers.
• Sometimes used to benefit from different import duty rates or avoid direct import restrictions.

High Sea Sales Procedures

1. Contract Formation

• Original Sale Contract: Between the manufacturer/exporter and the first buyer (exporter).
• High Sea Sale Contract: Between the original buyer (who becomes the seller in HSS) and the new buyer in the importing country.

2. Shipment & Documentation

• The exporter ships the goods as usual and obtains:
  • Bill of Lading (B/L) or Sea Waybill in the name of the original buyer.
  • Commercial Invoice and Packing List.

3. High Sea Sale Agreement

• Once the goods are on the high seas, the original buyer sells the goods to the new buyer locally (importer).
• This new sale is documented by a High Sea Sale Agreement or Sales Contract.
• The ownership is transferred while goods are still at sea.

4. Documentation for Customs Clearance

The importer (final buyer) will use these documents for customs clearance:

• Original Bill of Lading or sometimes Non-Negotiable Copy of B/L.
• Commercial Invoice from the high sea seller to the final buyer.
• High Sea Sale Agreement between the original buyer and final buyer.
• Packing List.
• Insurance Certificate (if applicable).
• Import License or permits if required.
• Customs Declaration Forms as per local regulations.

5. Customs Duties & Taxes

• Duties are paid by the final buyer/importer when goods reach the destination port.
• Customs valuation is usually done based on the High Sea Sale Invoice price, not the original export invoice.

6. Goods Clearance

• After payment of applicable customs duties and taxes, the goods are cleared for delivery.

Key Documents in High Sea Sales

Document	Purpose
Original Bill of Lading	Evidence of goods shipped, needed for claiming goods.
Commercial Invoice	Shows sale details for customs valuation.
High Sea Sale Agreement	Legal contract for ownership transfer at sea.
Packing List	Details on cargo for verification by customs and buyer.
Insurance Certificate	Proof of insurance coverage for goods in transit.
Import License	If required by importing country for clearance.
Customs Declaration	Declaration to customs for duty assessment and clearance.

Important Considerations

• Legal Validity: High Sea Sale is recognized in many countries but may be subject to local laws and import regulations.
• Customs Scrutiny: Customs authorities may scrutinize the high sea sale documents carefully to prevent undervaluation or illegal avoidance of duties.
• Risk & Ownership: Ownership transfers at sea, so risk shifts accordingly — buyer must ensure clear contractual terms.
• Taxes and Duties: Customs valuation is typically based on the High Sea Sale price; undervaluation may lead to penalties.
• Contract Clarity: Contracts must clearly define terms of sale, ownership, risk, and responsibilities.

Summary

Step	Description
Export shipment	Exporter ships goods with original buyer as consignee.
High Sea Sale contract	Original buyer sells goods to new buyer while at sea.
Documentation prepared	B/L, Commercial Invoice, High Sea Sale Agreement.
Goods arrive port	New buyer clears goods using High Sea Sale documents.
Duties & taxes paid	Based on high sea sale invoice by the new buyer.
Goods delivered	After clearance, goods are delivered to the final buyer.