A customs pre-clearance involves a traveler (and belongings) clearing customs procedures in a third country before arriving in the destination country. It is the outcome of a bilateral agreement where the locations and the conditions (facilities, security, personnel) for pre-clearance are set. Although pre-clearance can be used for many transportation modes, it is the most common for air transportation, where each traveler undergoes immigration, customs, and agriculture inspection prior to boarding a direct flight to the destination country.
Pre-clearance involves an airport setting a facility solely reserved for this purpose, such as a wing including a number of gates. The procedures and the facility must meet the criteria set by the pre-clearance agreement. This also incurs additional costs assumed by the airport, which are reflected in airfares (often as additional fees). However, passengers are commonly willing to assume these costs because of the convenience of not having to clear customs at the destination airport. About half a million passengers per year are deemed to be the threshold for pre-clearance to be economically justified. The main advantages of customs pre-clearance are:
- Improved control. By “pushing the border” outside its national boundary, a country can usually cope more effectively with immigration and security concerns. A traveler can be denied admission in a third country, without incurring deportation costs (holding and travel costs).
- More destination choices. An airline can use a pre-clearance airport to service any destination airport in a third country, even if these airports do not have customs facilities. This can substantially improve commercial opportunities through a wider set of destinations.
- Less congestion at national gateways. Customs pre-clearance can remove a significant number of passengers handled at national ports of entry. This can help mitigate congestion and overburdened customs facilities and improve international travel time at the aggregate level. The pre-clearance takes time before boarding, which is more flexible than the time taken after disembarking.
The world’s most significant pre-clearance agreement is between Canada and the United States, which involves eight Canadian airports (Calgary, Toronto, Edmonton, Halifax, Montreal, Ottawa, Vancouver, and Winnipeg). Pre-clearance began in 1952 at the Toronto airport, and by 1974 a formal agreement was reached. Since then, the agreement has been revised and expanded. Although the agreement is bilateral, allowing pre-clearance to take place in both countries, pre-clearance only takes place in Canada. The structure of transborder air flows is not conducive to having Canadian pre-clearance taking place in the United States since the network involves a few Canadian airports connected to many American airports.
Pre-clearance agreements also exist with Ireland (Dublin and Shannon), Aruba, the Bahamas (Freeport and Nassau), Bermuda, and the United Arab Emirates (Abu Dhabi). As of 2016, more than 18 million passengers bound for the United States were handled through pre-clearance agreements (including Canada). Thus, 15% of the air passengers bound for the United States are using pre-clearance facilities.
In light of the increasing growth of international passenger flows and the congestion of major American ports of entry, the pre-clearance program is being expanded. An additional 21 airports are being considered in Europe, Latin America, and Japan. This is likely to reinforce further the hub function of these airports within international and regional air transport systems.