Blog - ICS Logistics, Shipping, Customs and IOR

Importer of Record / Declarant Services

i.simmonds@talktalk.net (Ian Simmonds) — Fri, 19 Feb 2021 15:52:50 GMT

We provide Importer Of Record (IOR) services for foreign importers

Many UK based technology companies and web marketplaces require products to be delivered on Delivered Duty Paid (DDP) Terms. Under the terms DDP, the foreign seller is responsible for door to door delivery, the payment of import duties and any applicable taxes. Under the eleven Incoterms® Rules, DDP terms impose the maximum level of obligation on the foreign seller.

Issues for Foreign Importers

In a straightforward import transaction, the consignee is usually the party paying import duties and taxes. Under DDP terms the consignee is not responsible for the payment of import duties and taxes, the foreign importer will be.

Generally, the import of products under DDP terms requires a Declarant / Importer of Record (IOR) located or established in the place of importation. In the UK the Declarant / IOR is required to have proper documentation confirming that they meet all the necessary criteria.

If you are a foreign importer into the UK, under DDP terms you are legally liable for payment of duties, taxes, fees and compliance with customs and other government agency regulations pertaining to your imports. However, not all foreign importers want to register their business within the UK, file paperwork, classify their goods with UK Customs, arrange the payment of duties and taxes or apply for VAT registration in the UK.

Many foreign importers are aware that they can file for VAT reclaim as a non-UK IOR. However, they are reluctant to file for this registration because they don’t want to charge VAT to their local UK customers.

Those non-UK IOR who do apply for VAT registration in the UK to benefit from any tax relief, often find VAT refunds a lengthy process. The UK tax authorities will investigate each import separately, whilst reviewing the entire document trail. The process can take anywhere between four and six months.

The UK government sets a high level of regulations, each enforced by a different government department. Some foreign importers find UK importing too confusing and so fail to develop additional international business, while others try to comply with the laws and regulations but find themselves in violation regardless and face fines, penalties or goods being forfeit.

What is an Importer of Record?

“Importer of Record” is a term used in customs law for the entity responsible for ensuring the imported products comply with local laws and regulations, filing a completed customs entry and paying the assessed import duties and other taxation for those products. In the UK, the Declarant / IOR needs to be established in the UK, meaning the importer needs to have a UK entity, established business or a physical presence, to take responsibility for customs procedures and declaring the import.

If a foreign company is importing into the UK and is not established in the UK, they can’t make a customs declaration for a shipment of products. The foreign company will require a third party that will need to act as the IOR. This third party could be a third-party service company, such as ICS Logistics Limited.

How can we help?

Shipping products between countries can be an extremely complex process with some products being highly regulated, which is why you need to use an experienced Importer of Record. Working as the IOR we are formally recognised as an official party within the international shipment transaction by the government.

We provide IOR services for foreign importers and take care of every phase of the importation from customs clearance to the payment of duties and taxes. As the IOR for your products we are responsible for all paperwork relating to import of your products, customs classification and we will arrange the payment of duties and taxes.

By working with ICS Logistics Limited, we will enable your business to supply products to UK customers whilst meeting import and trade compliance requirements. We act as importers on behalf of your overseas business.

ICS Logistics Limited do not take ownership of your products and do not resell them, but we perform services and distribute products for your business. Title to the products (at all times) remains with your overseas business, as the owners. However, as we are acting as the ‘Importer of Record’ on UK import declarations and paying the import VAT to HMRC, we will receive the import VAT certificate (C79).

Reclaiming Import VAT

As from 15th July 2019, ICS Logistics Limited cannot reclaim the import VAT. Only the owner of the goods can reclaim VAT, meaning overseas companies will need to register for VAT or changes to the ownership of goods having to be made before they enter the UK. The correct procedure is for the owner to be the IOR and reclaim the import VAT. We can assist you in identifying alternative approaches to lessen the tax burden.

If you would like more details, please call +44 (0) 118 932 8447 or email info@icslogistics.co.uk

ICS Logistics Limited

EU Tariffs on EU Goods via Great Britain

i.simmonds@talktalk.net (Ian Simmonds) — Sun, 07 Feb 2021 10:02:35 GMT

EU to EU distribution via Great Britain is liable to a tariff on re-entry to the EU.

EU Tariffs on EU Goods via Great Britain

The EU-UK Trade and Cooperation Agreement (TCA) came into force on 24 December 2020 and provides zero tariffs and zero quotas between the European Union (EU) and Great Britain (GB). The agreement states that it will preserve the immense benefits of free trade for millions of people in the United Kingdom (UK) and across Europe. But does it?

“There appears to be some areas where the agreement does not provide zero tariffs on EU products moving between EU countries via GB.“

Many established supply chains across the EU utilise distribution centres within GB for cost-effective bulk storage of a wide range of products which can be ordered by customers within GB and the EU. There are now difficulties concerning this important route to market due to the rules of origin stated within the TCA. Under the current rules, products imported from the EU into GB qualify for zero tariffs. If the same goods are then supplied to a customer within the EU, full tariffs are due on re-importation back into the EU.

EU Customs Authorities state:

These goods have not been altered or processed and therefore they have not acquired UK origin. The EU-UK FTA tariff preferences cannot be claimed because the goods need to be of UK preferential Origin to avail of the 0% tariff. These goods are EU origin and therefore liable to a tariff on re-entry to the EU.

Example:

A manufacturer in Germany supplies EU qualifying products to a GB company and zero tariffs applies. The GB company places the products within their common stock warehouse and later they are purchased by a company in the Republic of Ireland. Under the TCA rules of origin for preferential trade, these goods when imported into Ireland are not covered by the agreement and full tariffs apply.

There are a range of solutions for this issue, however many EU and GB companies did not have time to prepare for these unreasonable origin rules. Implementing possible solutions, such as Transit, Inward Processing, Returns Goods Relief, Customs Warehousing or using supply chains that avoid GB will take time to put in place and may not be cost effective. Each of these solutions for moving products via GB have specific circumstances attached to them and these circumstances will determine the best movement type for the products.

Transit

Product movements between Ireland and other EU countries by road through GB can utilise the UK Landbridge using the Customs Transit Procedure. The Customs Transit procedure allows for the temporary suspension of UK customs and commercial policy measures that would be applicable at GB import and GB export.

Inward Processing

The inward processing procedure allows businesses to import goods for processing/manufacturing under UK customs supervision without the goods being subject to import duties. The UK duty liability is discharged when the goods are re-exported out of the UK.

The EU Customs Authorities state:

The amount of processing on the goods will determine if duties must be paid on re-export to the EU. These goods can only qualify for preferential origin under the EU-UK Trade and Cooperation Agreement (TCA) on re-export to the EU if the processing meets the requirements as specified in the Product Specific Rule (PSR) for the product in the EU-UK TCA. If UK preferential origin can be proven, preferential origin can be claimed on re-export to the EU under the TCA. The advantage of using Inward Processing is that the import duties due on import into the UK are suspended.

Returns Goods Relief

Businesses can re-import goods back into the EU without payment of Customs Duty and Value-Added Tax (VAT) if the EU Returned Goods Relief conditions are met. The goods must be re-imported in an unaltered state, apart from any work that may have been carried out to repair them, maintain them or restore them to good condition. In addition, the Importer must present the original proof of export from the EU to avoid any customs duties. If the EU return is via a different economic operator to the one who completed the export formalities, then Import VAT is chargeable.

This process currently does not have a provision to cover products of animal origin (POAO), which are subject to Sanitary and Phyto-Sanitary (SPS) requirements. Therefore, re-import into the EU from GB is treated as an import from a 3rd country, so full tariffs and full import controls may apply. The EU common agricultural policy sets out specific conditions for claiming relief from import duty.

Customs Warehousing

EU goods can be moved into GB using the transit procedure and kept in a customs warehouse in the UK, therefore keeping their EU preferential origin status. Businesses with adequate stock control systems can store EU and 3rd country stock without the need to physically segregate. The same is true of duty paid stock and duty unpaid stock, providing stock control systems are adequate.

The EU Customs Authorities state:

When EU originating goods are brought into the UK from an EU member state under a T2 transit procedure, remain under customs control in a customs warehouse and undergo no production/transformation while in the UK, the goods can be returned to the EU under another T2 Transit procedure provided that they have not been altered other than for preservation or splitting of consignments without replacing the packaging. By using a transit started in the EU, a customs warehousing authorisation in the UK followed by another transit from the UK to the EU, the Union status of the goods is maintained, and import/export tariffs are not incurred.

This process does not cover products of animal origin (POAO), which are subject to Sanitary and Phyto-Sanitary (SPS) requirements once they have been unloaded and placed in the customs warehouse. Therefore, the re-import of these products would require Export Health Certificates and may be subject to full tariffs and full import controls.

If you would like more details, please call +44 (0) 118 932 8447 or email info@icslogistics.co.uk

ICS Logistics Limited

GB Export Health Certificates (EHCs) for EU and Northern Ireland

i.simmonds@talktalk.net (Ian Simmonds) — Sat, 23 Jan 2021 21:55:35 GMT

Briefing Note 02/2021 - Guidance updates for certification of POAO exports to the EU and movement to Northern Ireland.

GB Export Health Certificates (EHCs) for EU and Northern Ireland

The new EU-UK Trade and Cooperation Agreement was not finalised until Christmas Eve, two months after the original deadline for an agreement. This resulted in only a week to implement new export / import processes with the EU.

Not having clearly defined export / import processes with the EU caused unnecessary documentation issues resulting in long delays at the ports and some vehicles being sent back to the UK. Exporters of food products from Great Britain (GB) were especially impacted due to their Export Health Certificates (EHCs) not being compliant with EU import regulations. Food exporters and their Official Veterinarians complete and issued these certificates in compliance with the directives of the Department for Environment Food & Rural Affairs.

EHCs are required for exports of live animals or animal products exported from GB to the EU. This ensures the consignment complies with the quality and health standards of the EU. EHCs are signed by an Official Veterinarian following inspection of the consignment and they are commodity and destination specific.

Exporters must apply for an EHC if they are exporting or moving live animals or animal products from GB (England, Scotland and Wales) to or through the following destinations:

The EU
Non-EU countries
Northern Ireland (NI)

Exporters will also need a Transit EHC to transit through an EU country.

On 19 January 2021, the Animal & Plant Health Agency (APHA) published Briefing Note 02/2021 called ‘Guidance updates for certification of POAO exports to the EU and movement to Northern Ireland.’ APHA is an Executive Agency of the Department for Environment, Food and Rural Affairs. The APHA document provided amendments in relation to the certification of Products of Animal Origin (POAO) for export to the EU or movement to Northern Ireland. Therefore, enabling food exporters to comply with EU import requirements 19 days after Brexit!

The amendments include:

The agreed method for page numbering.
The replacement of UK fan stamping by the EU requirement to stamp and sign all pages.
The stamping and initialling of changes and deletions.
Permitted paragraphs and sections may be crossed out by applying a ‘Z’ across paragraphs and sections.
The use of 6-digit Commodity Codes rather than 8 or 10 digits.
The creation of schedules for multiple commodities.
There is no requirement to list the time of departure.
New guidance on composite products.
More than 5 commodities can be added in a schedule.

Read more: APHA Briefing Note 02/2021 Guidance updates for certification of POAO exports to the EU and movement to Northern Ireland.

If you would like more details, please call +44 (0) 118 932 8447 or email info@icslogistics.co.uk

ICS Logistics Limited

Brexit Solutions

i.simmonds@talktalk.net (Ian Simmonds) — Mon, 28 Dec 2020 16:58:03 GMT

Supporting companies with import and export solutions.

Brexit Solutions

Overview

We have been developing contingency plans to ensure our customers’ products are delivered correctly after 1 January 2021. Significant changes will occur once the UK has left the EU. All UK businesses will be required to provide Customs documentation for products exported to, or imported from the EU, even with the ‘EU Deal’ on Brexit.

ICS, as part of our customer services, will be supporting companies with the necessary Customs documentation to comply with the new regulations.

Northern Ireland

Products moving between Great Britain and Northern Ireland will need to comply with the Northern Ireland protocol agreed in October 2019. Products crossing the Irish Sea will need to demonstrate compliance with the new measures. This means that new Customs and regulatory paperwork, checks and processes will be required on goods entering Northern Ireland from Great Britain from 1 January 2021.

ICS has solutions in place to move products between Great Britain and Northern Ireland, or to bring products into Northern Ireland from outside the UK.

Republic of Ireland and Northern Ireland

The movement of products between the Republic of Ireland and Northern Ireland should not require any new Customs declarations, paperwork, duty tariffs, quotas or checks on rules of origin.

If you would like more details, please call +44 (0) 118 932 8447 or email info@icslogistics.co.uk

ICS Logistics Limited

XI EORI required for Northern Ireland

i.simmonds@talktalk.net (Ian Simmonds) — Sun, 08 Nov 2020 10:45:29 GMT

Moving goods to or from Northern Ireland

XI EORI required for Northern Ireland

The Government have confirmed that businesses moving goods to or from Northern Ireland (NI) will need a special EORI number with a ‘XI’ country prefix.

The Government have stated:

If you move goods to or from Northern Ireland

From 1 January 2021 you’ll need an EORI number that starts with XI to:

move goods between Northern Ireland and non-EU countries
make a declaration in Northern Ireland
get a customs decision in Northern Ireland

To get an EORI number that starts with XI, you must already have an EORI number that starts with GB. If you do not have one, apply for an EORI number that starts with GB as soon as possible.

If you already have an EORI number that starts with GB and HMRC thinks you need one that starts with XI, they’ll automatically send you one in mid-December 2020.

If you would like more details, please call +44 (0) 118 932 8447 or email info@icslogistics.co.uk

ICS Logistics Limited

Intrastat declaration requirements for 2021

i.simmonds@talktalk.net (Ian Simmonds) — Sat, 31 Oct 2020 16:53:45 GMT

Intrastat arrivals declarations will continue to be required during 2021.

Intrastat declaration requirements for 2021

On 14 October, the Government published the requirements for submitting Intrastat declarations after 1 January 2021.

The Government have stated:

From 1 January 2021, HMRC expected that information sourced direct from customs declarations would be used to compile trade statistics for international trade in goods between GB and the EU.

However, to give businesses more time to fully prepare for the new border controls for EU goods, customs import controls will be introduced in stages from 1 January 2021. As part of these staged controls, businesses importing non-controlled goods from the EU to GB can delay the submission of the customs declaration for up to 6 months.

For statistical purposes this means the data from customs declarations will be unavailable or significantly delayed and would leave the UK with significant gaps in the data available to compile accurate and timely trade in goods statistics for imports. To avoid this, monthly Intrastat arrivals declarations will continue to be required during 2021.

There will be no Intrastat requirement for the movement of goods exported from GB to the EU or goods imported from EU to GB, from 1 January 2022.

If you would like more details, please call +44 (0) 118 932 8447 or email info@icslogistics.co.uk

ICS Logistics Limited

Importing and exporting wine from 1 January 2021

i.simmonds@talktalk.net (Ian Simmonds) — Sat, 31 Oct 2020 16:25:57 GMT

New rules for wine importers, exporters, producers, retailers and distributors.

Importing and exporting wine from 1 January 2021

The UK Government has updated the rules for wine importers, exporters, producers, retailers and distributors, as from 1 January 2021.

The Government have stated:

There will be no change to the requirements for wine imported into the UK from a non-EU country from 1 January 2021 to 1 October 2021.
VI-1 certificates will not be required for EU wine imported into Great Britain (England, Scotland and Wales) from 1 January 2021 to 30 June 2021.
There will be no change to the marketing standards requirements for importing wine into Northern Ireland (NI) from the EU.
VI-1 certificates will not be required to move wine to GB from NI.
Companies can continue to use the name and address of an importer, or bottler in the case of bulk wine imports, based in the EU, GB or NI on the label for bottles of wine marketed in GB until 30 September 2022. From 1 October 2022, wine marketed in GB must be labelled with the name and address of an importer or bottler located within the UK.
Consignments of wine exported from GB to the EU will be subject to EU third country requirements for wine which include having an EU VI-1. There are some situations where companies do not need a VI-1 to export wine from GB to the EU.
There will be no change to marketing standards requirements for exporting wine from NI to the EU. Businesses in NI will not be required to provide VI-1 documents for exports to the EU.
Goods moving from GB into NI will also be required to meet EU import marketing standards requirements.

If you would like more details, please call +44 (0) 118 932 8447 or email info@icslogistics.co.uk

ICS Logistics Limited

Import VAT

i.simmonds@talktalk.net (Ian Simmonds) — Mon, 14 Sep 2020 15:04:46 GMT

Import VAT: Postponed VAT Accounting

Import VAT: Postponed VAT Accounting

The Government announced, during the Budget, that on 1 January 2021 Postponed VAT Accounting (PVA) will be introduced on imports. Currently, imported goods from a non-EU country are liable for payment of import VAT at the same time as customs duty. However, importers can defer to the fifteenth of the following month the payment of the customs duty and import VAT by using a duty deferment account (if available to them).

The Government have stated:

The introduction of PVA will enable importers to account for and recover import VAT as input tax on the same periodic (usually quarterly) VAT return, rather than having to pay it upfront and recover it on a subsequent return using the C79 VAT certificate as evidence of entitlement.

These changes will not affect non-VAT registered importers and individuals who must continue to pay (or defer) import VAT on imported goods at the same time as the customs duty, as they do now.

The process will provide importers with a new cashflow benefit, as they will be able to postpone VAT at the time of import, as opposed to paying it immediately upon importation. Importing businesses should note that this new process does not only cover goods arriving from non-EU countries, but also goods coming from the EU after the 1 January 2021.

How will the PVA work?

The Government have stated:

All UK VAT registered Importers will be eligible to use PVA; no authorisation will be required. They will simply make the appropriate entry and provide their EORI and/or VAT registration number (VRN) on their customs declaration. This process (subject to customs clearance) will allow the goods to enter into free circulation without up-front payment of the import VAT. The customs declaration will generate an online Monthly Postponed Import VAT Statement (MPIVS) that will be the evidence required to account for and recover the import VAT as input tax on their next VAT return. (Note: The C79 will continue to be produced for those entries where any VAT is paid on importation).

Will there be a staged approach?

There will be a staged approach from 1 January 2021 until 30 June 2021. The Government have stated:

UK VAT registered Importers who import standard (non-controlled) goods into GB from the EU and who make an Entry in Declarants Records (EIDR) under the staged approach to import controls will be required to use PVA to account for the import VAT on those goods. Making the EIDR allows the VAT registered importer to defer submission of their supplementary declaration by up to 6 months from the point of import, and they will be required to use PVA irrespective of when they submit their supplementary declaration.

Where the importer does defer their supplementary declaration, they will not have an MPIVS when they complete their VAT return. They will therefore need to use the information on their EIDR or other commercial import records to estimate the amount of import VAT due and account for that tax on the VAT return relating to the month of import. (For example; the import VAT on goods imported in January 2021 will be accounted for on the VAT return that covers January 2021).

When the deferred declaration is subsequently submitted the actual amount of import VAT will be calculated and tax due to be accounted for will be recorded on the MPIVS for the month the declaration is submitted. This should be compared to the estimated amount and any adjustments required should be made on the next VAT return.

If you would like more details, please call +44 (0) 118 932 8447 or email info@icslogistics.co.uk

ICS Logistics Limited

The Border with the European Union

i.simmonds@talktalk.net (Ian Simmonds) — Sun, 30 Aug 2020 09:09:47 GMT

The UK Government have published the Border Operating Model.

The Border with the European Union

The UK Government have stated that on 1 January 2021 the transition period with the European Union (EU) will end and the United Kingdom (UK) will operate a full, external border as a sovereign nation. This means that controls will be placed on the movement of goods between Great Britain (GB) and the EU.

The UK Government have recognised the impact of coronavirus on UK businesses’ ability to prepare and therefore have announced that they will implement full border controls on imports coming into GB in three stages up until 1 July 2021.

Stage 1 – from 1 January 2021

Stage 2 – from 1 April 2021

Stage 3 – from 1 July 2021

The UK Government have published the Border Operating Model (BOM), which outlines the processes for moving goods between GB and the EU from 1 January 2021 onwards. This document provides all the detail around the border operating requirements in the event that the UK and the EU do not negotiate a UK/EU Free Trade Agreement.

Click here to read the full document.

If you would like more details, please call +44 (0) 118 932 8447 or email info@icslogistics.co.uk

ICS Logistics Limited

Brexit Import / Export Guides

i.simmonds@talktalk.net (Ian Simmonds) — Sun, 23 Aug 2020 09:38:39 GMT

New Import and Export Guides

Brexit Import / Export Guides

The UK Government has now released their new Import and Export Guides for the end of the Transition Period. The guides have been designed to provide a step-by-step process and aim to provide clarity around what is required at the end of the year. When it comes to following the new import / export processes and completing your Customs declarations, we can provide you with assistance and support.

Click here to read the Import Guide

Click here to read the Export Guide

If you would like more details, please call +44 (0) 118 932 8447 or email info@icslogistics.co.uk

ICS Logistics Limited

https://www.icslogistics.co.uk/services

Incoterms® 2020

i.simmonds@talktalk.net (Ian Simmonds) — Mon, 13 Jul 2020 09:29:16 GMT

Your choice of Incoterms® will be an integral part of your commercial transaction stated within the contract.

I ncoterms® 2020

What are Incoterms?

Incoterms® is a registered trademark of the International Chamber of Commerce (ICC). Incoterms® were first created by the ICC in 1936. The Incoterms® rules are created and published by the ICC and are normally revised every 10 years, since 1980. The ICC describe the Incoterms® 2020 rules as:

The Incoterms® rules are the world’s essential terms of trade for the sale of goods. Whether you are filing a purchase order, packaging and labelling a shipment for freight transport, or preparing a certificate of origin at a port, the Incoterms® rules are there to guide you. The Incoterms® rules provide specific guidance to individuals participating in the import and export of global trade on a daily basis.

How are they used?

By the parties agreeing the relevant Incoterms for the international supply chain and then incorporating it into the contract, the buyer and seller will understand responsibilities in the event of loss and damage.

The seller and buyer can include Incoterms in their contract to cover who is responsible for every stage of the international supply chain, including customs clearance and insurance requirements. Incoterms also make it clear who pays for each different cost within the international supply chain.

The eleven Incoterms® 2020 grouped by means of transport

Incoterms are grouped by the means of transportation used to move the goods.

The seven Incoterms for any mode or modes of transport:

Ex Works (EXW)
Free Carrier (FCA)
Carriage Paid To (CPT)
Carriage and Insurance Paid To (CIP)
Delivered at Place (DAP)
Delivered at Place Unloaded (DPU)
Delivered Duty Paid (DDP)

The four Incoterms for sea and inland waterway transport:

Free Alongside Ship (FAS)
Free On Board (FOB)
Cost and Freight (CFR)
Cost Insurance and Freight (CIF)

Incoterms® 2020 Rules Groups

The eleven Incoterms 2020 are divided into four groups (E, F, C, D), with E and D at the opposite poles of the international supply chain. The rules are divided according to the costs, risks, obligations, transportation, as well as challenges related to import and export.

E Group – Departure. Includes only one Incoterms rule, EXW.
F Group – Main Carriage Unpaid. Includes FCA, FAS, and FOB Incoterms rules.
C Group – Main Carriage Paid. Includes CFR, CIF, CPT, and CIP Incoterms rules.
D Group – Arrival. Includes DAP, DPU, and DDP Incoterms rules.

Ten articles for each Incoterms® rule

Each Incoterms rule is covered by ten articles which clarify the responsibilities of both the seller and the buyer. The ICC have reorganised these as follows:

General obligations
Delivery/Taking delivery
Transfer of risks
Carriage
Insurance
Delivery/transport document
Export/import clearance
Checking/packaging/marking
Allocation of costs
Notices

Incoterms® 2020 Rules

The Incoterms® 2020 rules define the following main areas:

The obligations between the seller and the buyer for arranging carriage and/or insurance of the goods.
Who is responsible for obtaining the shipping documentation and export or import licences.
Where and when the seller delivers the goods to the buyer, subsequently confirming the transfer of risk between the seller and buyer.
When the seller is or is not responsible for costs, such as packing, loading, transport, security compliance, unloading and checking of goods shipped and/or delivered.
When the buyer is or is not responsible for costs, such as packing, loading, transport, security compliance, unloading and checking of goods shipped and/or delivered.
The Incoterms®2020, as per previous Incoterms®, do NOT handle the transfer of ownership or title of the goods sold.

Key Differences between Incoterms® 2010 and 2020

The ICC have enhanced Incoterms® 2020 to better assist the international trading community in selecting the correct Incoterms® rule for their sales contract. Therefore, ensuring more efficient export / import transactions.
Delivery At Terminal (DAT) in Incoterms® 2010 has been replaced by Delivered at Place Unloaded (DPU). Under the new DPU Incoterms®, the seller is required to unload the goods at the destination. This is the only Incoterms® rule which requires the seller to unload goods, therefore the seller needs to ensure they can organise unloading at the named place.
Incoterms® 2020 now include security-related requirements within the carriage obligations and costs.
Under the Incoterms®2020, Cost Insurance and Freight (CIF) keeps the same insurance requirements i.e. Clause C (Institute of Cargo Clauses), but under Carriage and Insurance Paid To (CIP) the insurance requirement has been increased to Clause A (Institute of Cargo Clauses). This is because CIF is mostly used with bulk commodity movements and CIP is mostly used for manufactured goods via multimodal solutions.

Your choice of Incoterms® will be an integral part of your commercial transaction stated within the contract and must be applicable to the type of goods that will be shipped and the type of transportation that will be used.

If you would like more details, please call +44 (0) 118 932 8447 or email info@icslogistics.co.uk

ICS Logistics Limited

UK Government Waives Import Taxes on Vital Medical Supplies

i.simmonds@talktalk.net (Ian Simmonds) — Mon, 06 Apr 2020 11:44:32 GMT

HMRC has published new guidance about the import relief on GOV.UK. Only organisations supplying the NHS can utilise this relief.

Goods such as ventilators, coronavirus testing kits and protective clothing arriving from outside the EU are no longer subject to customs duty or import VAT. This will reduce red tape to ensure frontline health workers get vital equipment quickly and removes barriers to those who want to donate supplies to the NHS.

NHS suppliers will no longer have to pay customs duty and import VAT, the removal of tariffs on these vital supplies will reduce the import price by up to 12 per cent.

Goods imported into the UK for donation or onward sale to the NHS are also eligible for this relief and can be imported free of import duty and import VAT. Importers will need to pay import duties and VAT if they loan, hire out or transfer their goods to organisations or individuals not affected by coronavirus outbreak.

International Trade Secretary, Liz Truss said:

We are removing tariffs and barriers on essential medical supplies imported into the UK to ensure our front-line workers have everything they need to treat people suffering from Covid-19.

As I agreed with my G20 trade minister counterparts, we will work together to keep trade flowing and ensure the supply of essential goods and services.

HM Revenue & Customs have published the following explanatory notes:

Under the current rules, importers require a duty deferment account with HMRC backed by a guarantee. Importers of these critical goods would need to increase the level of their guarantee to cover any additional duty due.
T his new approach, in place until 31 July 2020, will allow companies to import goods critical for our fight against coronavirus at a faster rate and reduce costs significantly.
The relief can be claimed from HMRC immediately by state organisations, including state bodies, public bodies and other bodies governed by public law who are supplying the NHS. Other approved organisations wanting to supply the NHS can also apply to HMRC.
HMRC has published new guidance about the import relief on GOV.UK. Only organisations supplying the NHS can utilise this relief.
All imports will continue to arrive through the same channels and face the same checks as before, so there is minimal chance of fraud. Companies benefiting from the relief also need to first be approved by HMRC.
The EU’s disaster relief regulation can be used in relation to COVID-19. This allows certain items that are needed to deal with C-19 to be imported free of VAT and customs duties.

ICS Logistics Limited

www.icslogistics.co.uk

Outsourcing International Supply Chain Management with ICS Logistics Limited

Wed, 01 Apr 2020 16:01:19 GMT

Fourth-Party Logistics (4PL)

Services

Outsourcing International Supply Chain Management with ICS Logistics Limited

Several of our ICS Global Services clients requested Fourth-Party Logistics (4PL) solutions to manage the complexities of their company’s logistical operations. To support our valued partnership with these clients we established a sister company, ICS Logistics Limited .

Outsourcing your international supply chain management by contracting with ICS Logistics Limited will not only save money and provide a higher level of service, but it also frees up your internal resources to focus on the company’s core business.

Being a Fourth-Party Logistics (4PL) provider, we have a broad role within our customers’ international supply chains. We assume many of the same roles as third-party logistics (3PL) providers, but we have a much broader responsibility and accountability in helping our customers reach their strategic goals.

If your company is dealing with an increasingly complex supply chain and struggling to meet customer expectations, then we may be the best solution for you. We have a passion for helping businesses with limited resources to manage their import and export activities. Functioning as a 4PL, we become a true partner with our customers, working to create lean, cost-effective international supply chains.

We are a non-asset based business with no contractual obligations to any freight forwarding companies. It is our company policy not to receive any margin or revenue from our clients’ international transportation spend. This enables us to remain neutral within the shipping market and to obtain the best cost-effective solution for our clients.

The 4PL Service Advantages

The primary advantage of our 4PL services is that we are a strategic partner focused on providing the highest level of services for the best value, as opposed to Third-Party Logistics Providers (3PL) who may be more transaction focused. As a 4PL we provide a single point of contact for your international supply chain. With a 3PL, there may be some aspects that you still have to manage. We take over those processes for you, acting as the intermediary for 3PLs, carriers, warehouse vendors, cargo consolidation, clearance agents and other participants in your international supply chains.

Businesses have looked to 3PLs to fill essential roles within the international supply chain and this works well for many businesses. However, the relationship between the client and the 3PL is not always successful. There are many reasons that the 3PL relationship does not always work. This is normally because the client does not have the internal resources or expertise to manage their international supply chain processes, which would enable effective 3PL services solutions. In addition, many 3PLs are task or functional operations without trade process facilitators or international commerce specialists. 3PLs are essentially not international supply chain service companies, their primary focus is freight or warehousing.

We take the 3PL service solution one step further to optimise efficiency, reduce international supply chain costs and improve service performance. As a 4PL, we fill the service vacuum created by 3PLs by understanding that international supply chain management is a key business process and needs to be managed efficiently. We manage the end-to-end international supply chain process to meet the client’s needs, regardless of what carriers, freight forwarders or warehouses are used. As a 4PL we even manage the 3PLs selected by our clients and achieve optimise efficiencies by developing agreed Service Level Agreements (SLAs) with the 3PLs.

We provide our clients with outsourced resources and expertise to manage their international supply chain processes and create a seamless comprehensive fulfilment experience. We provide our clients with valuable insights into where processes and transit times can be improved, whilst identifying cost reductions. We are more than just service providers, our integration in your business allows us to better understand our client’s long-term vision and goals.

Our aim is to optimise efficiency, reduce international supply chain costs and improve service performance.

Solutions

As a 4PL, we support your business by offering a full range of logistics support as well as customised end-to-end import / export solutions:

Freight Management
Order Management
Cargo Consolidation
Warehousing
Import Documentation
Import Customs Clearance
Import Licensing
Export Documentation
Export Customs Clearance
Export Licensing
Invoice Auditing

4PL Benefits

Focus on core business

By outsourcing the international supply chain activities to our company with its in-depth expertise and experience, this allows our clients to focus on other critical operations within their business.

Back-Office

We have the resources to reduce back office activities, therefore releasing staff and increasing resources to focus on other business matters which in turn increases productivity. We can also manage the international logistics contracts and KPIs on behalf of our clients.

Waste

Working with clients in proactive partnership, we highlight waste within the business as well as an explanation of where and why it occurs.

Clarity

We act as the single contact point between our clients and their contracted 3PLs functional operations. As a Fourth Party Logistics Provider (4PL) we oversee and manage the complexities of a company’s logistical operations.

Company Expansion

When growth is a company’s goal, we can make that aspiration a reality without disruption to da ily operations. We have access and relationships within the supply chain industry to easily assist business’ during times of growth and expansion.

Business Processes

As international supply chain architects, we design and develop processes to support a growing company’s logistical needs and provide the seamless execution of the flow of goods.

S yn ergies

Synergies emerge because we are committed to achieving the same goal as our client. We ke ep our client’s interests at the forefront of our focus since the relationship between a 4PL provider and an international business is a valued partnership.

If you would like more details, please call +44 (0) 118 932 8447 or email i nfo@icslogistics.co.uk

ICS Logistics Limited

www.icslogistics.co.uk

Customs Declaration System (CDS)

i.simmonds@talktalk.net (Ian Simmonds) — Tue, 18 Feb 2020 08:51:50 GMT

Customs Declaration Service (CDS) will replace the existing Customs Handling of Import and Export Freight (CHIEF) system.

Customs Declaration System (CDS)

HM Revenue & Customs (HMRC) had stated that the Customs Declaration Service (CDS) will replace the existing Customs Handling of Import and Export Freight (CHIEF) system over three phases. During this period there will be dual running between the operation of CHIEF and CDS. The purpose of dual running was to minimise the impact on businesses, whilst reducing the volumes via CHIEF. The dual running of the declaration processing would stop when all importers/agents were on the CDS platform.

It now appears that HMRC plan is to continue with dual running until the department is confident that the new system is fully developed, stable and tested. This is good news after the UK Government confirmed plans to introduce border controls for all EU goods at the end of the transition period on 31 December 2020. This will require traders in the EU and GB to submit customs declarations and be liable to goods’ checks. To-date there have been concerns that the new CDS solution would not be able to handle all these additional customs entries in addition to replacing the CHIEF system.

HMRC have stated the following:

CHIEF is one of the world’s largest and most sophisticated electronic services for managing customs declaration processes, but it’s nearly 25 years old and can’t be easily adapted to new requirements.

The decision to replace CHIEF with CDS was made before the EU referendum, however CDS will be scaled to handle any potential increases in the volume of declarations that may result from the UK’s exit from the EU.

If you use an agent for customs declarations you may need to give them more information because of the changes required by CDS.

If you would like more details, please call +44 (0) 118 932 8447 or email info@icslogistics.co.uk

ICS Logistics Limited

www.icslogistics.co.uk

The Implications of Selling on DDP Terms

Wed, 12 Feb 2020 18:46:44 GMT

DDP terms impose the maximum level of obligation on the seller.

The Implications of Selling on Delivered Duty Paid (DDP) Terms

Selling on DDP sales terms is a workable solution for domestic transactions or with only some transactions within the European Union, but for other international trade it can be particularly problematic. Under the terms DDP, the seller is responsible for door to door delivery, the payment of import duties and any applicable taxes. Under the eleven Incoterms® Rules, DDP terms impose the maximum level of obligation on the seller.

Insurance Obligations

The DDP risk transfer point or delivery point, is important in relation to marine cargo insurance underwriting and claims, because it establishes the seller’s liability for insurance cover. Under DDP terms, the seller has no obligation to the buyer to make a contract of insurance. The buyer also has no obligation to the seller to make a contract of insurance. However, the buyer must provide the seller with information they need for obtaining insurance.

As the seller will bear all risks of loss of or damage to the goods from the time they are dispatched until they are delivered to the overseas buyer at the delivery point, it is advisable that the seller obtains insurance cover for the goods whilst in transit.

Registered Importer of Record

Under DDP terms, the seller may be required to act as the registered Importer of Record in many countries. It is not always possible for a foreign business to become the Importer of Record and this may cause issues in some countries, such as the USA and South Africa. In addition, the EU requires the importer of goods to be registered with a relevant government authority (in the EU this registration is under the EORI system) and often the importer needs to have a physical presence in the country as well.

Import Customs Clearance

Under DDP terms, the seller will be responsible for preparing customs clearance documentation and each country has specific documentary requirements. The seller will be responsible for the costs related to customs clearance. These costs may include any storage or demurrage charges incurred due to delays during customs clearance, investigations by government agencies and service issues with the freight forwarders. These additional costs can very quickly impact profit margins on export sales.

Paying Customs Duty and Import Taxes

Under DDP terms, the seller will be responsible for paying customs duties and relevant taxes due at the time of import. Appointing a freight forwarder / customs agent to provide customs clearance services and to pay the import formalities (import taxes and duties) is a solution. However, these companies may require funds to be logged prior to shipping and/or charge for usage of their customs deferment account.

Import Tax Implications

There may be tax implications due to the import taxes being paid by the seller. The overseas buyer may be eligible for an import tax refund, but these tax payments may not be recoverable by the buyer within the overseas country due to the seller being the Importer of Record. In other cases, the seller may have paid the import tax, been unable to recover the tax and the overseas buyer obtains a tax refund. The seller not being able to offset the import tax paid has a true added cost to the price of the exported goods, which may not be accounted for within the selling price.

Domestic Tax Implications

The seller being engaged in business in a foreign country without a physical presence and distributing goods to the buyer within that foreign country, may be classified as having a permanent establishment. In this situation, the company could be subjected to direct as well as indirect taxes within that foreign country.

Import Permits and Import Licences

Under DDP terms, the seller will be responsible for obtaining any import permits or import licences (if required) as the registered Importer of Record.

Bribery

Selling on DDP terms can expose the seller to greater legal risks, such as the severe legal consequences of a bribe being offered during the customs clearance process without the seller’s knowledge.

Conclusion

If the overseas buyer does require delivered terms within the sales contract, it would be a good business strategy to trade under a different Incoterms® rule. Using either Delivered at Place (DAP) or Delivered at Pace Unloaded (DPU) would allow the seller to deliver the goods and the overseas buyer would be the Importer of Record (the legal entity within the export market).

The seller’s choice of Incoterms® will be an integral part of their commercial transaction stated within the sales contract and must be applicable to the type of goods that will be shipped and the type of transportation that will be used.

If you would like more details, please call +44 (0) 118 932 8447 or email info@icslogistics.co.uk

ICS Logistics Limited

www.icslogistics.co.uk

Preferential Trade Deals and Brexit

Mon, 03 Feb 2020 18:10:42 GMT

The UK Government has been attempting to replicate all the EU's trade deals with countries outside the EU.

Preferential Trade Deals and Brexit

The UK Government is preparing to negotiate a free trade deal with the EU to ensure that UK goods are not subject to duty tariffs and other trade barriers within the EU after the transition period ends on 31 December 2020.

However, the EU has approximately 40 free trade deals with more than 70 countries outside the EU. As a member of the EU, the UK was trading with these countries under EU preferential trade agreements, without having to pay duties on most goods.

The UK Government has been attempting to replicate all the EU's trade deals with countries outside the EU. Ensuring that UK businesses still have the same tariff-free access to these countries. Otherwise, WTO (World Trade Organization) terms will apply and UK businesses will be paying extra duties on imports and exports with these countries.

The UK Government has stated that it plans to build ambitious new preferential trade arrangements with the USA and other countries.

What is Preference?

To obtain access to foreign markets and promote international trade, preferential trade agreements are set up between partner countries. A large and growing number of countries participate in preferential trade agreements, resulting in businesses paying lower or zero preference rates of import customs duty on their goods. However, to be eligible for preference rates the goods must comply with relevant rules of origin.

Preferential rules of origin can be complicated, and importers and/or exporters need to understand how the rules apply to their products.

What are the main benefits of using Preference?

Imports

Businesses importing their products from foreign markets covered by Preferential Trade Agreements can receive the products at reduced or nil rates of duty. Therefore, the importer pays less for their products compared with sourcing them from a foreign market not covered by Preferential Trade Agreements.

Exports

Businesses can export their products to markets covered by Preferential Trade Agreements and their foreign customer can receive the products at a reduced or nil rate of duty. Therefore, the exporter has a market advantage over competitors supplying products from countries not covered by Preferential Trade Agreements.

Claiming Preference on UK Imports – Top level

The UK importer will need to confirm if their imported products qualify for preferential duty rates by following these steps:

Step 1

Classify the products to be imported against the Customs Trade Tariff using the full 10-digit commodity code. Commodity codes are also known as HTS or tariff codes, in different countries. Please see our Blog for more details on commodity codes: Brexit and Customs Clearance

Step 2

Once the products have been classified, check the commodity code against the Customs Trade Tariff to identify if any preferential rate of duty is appropriate.

Step 3

Identify the country the products are being sourced from and confirm within the Customs Trade Tariff if that country is a beneficiary country under preference.

Step 4

Most importantly, confirm with the foreign supplier that products are of ‘Preference Origin’, that the products fully comply with the rules of preference origin and that the supplier (foreign exporter) can issue the correct preference document, such as a GSP Form A. See preference origin rules below.

Step 5

On import ensure that the correct preference document is presented to customs at the time of the import declaration / entry.

Claiming Preference on UK Exports – Top level

The UK exporter will need confirm if their products for export out of the UK qualify for preferential duty rates by following these steps:

Step 1

Classify the products to be exported against the Customs Trade Tariff. Use the first four digits of the commodity code to check the preference origin rules, which are covered by country specific laws. These origin rules are contained within the EU regulations. These will ultimately be covered by UK regulations.

Step 2

Identify if the export market is a beneficiary country under preference.

Step 3

The UK exporter must ensure a full understanding of the preference origin rules covering the products to be exported. See preference origin rules below.

Step 4

Most importantly, the exporter must make sure to have documented evidence to support the issue of preference certificates or invoice declarations to cover the export.

Step 5

Issue the EUR1 Form or EUR1/EUR-MED Form (these EU forms could soon be replaced with new UK forms?) or make an invoice declaration, depending on the export destination and the regulations.

Currently, only Registered EU exporters may issue statements on origin for consignments with a value exceeding €6,000 and they must include their registered exporter (REX) number as the exporter reference number in the statement on origin. This should ultimately be covered by UK regulations?

Preferential Trade Agreements

The EU has both bilateral and unilateral preferential trade arrangements with unions of countries (trading blocs) and third countries. These would ultimately be replaced by UK arrangements.

Bilateral

Bilateral agreements are often very specific and targeting an individual policy area. The EU has many bilateral agreements in place. Some examples:

A bilateral preferential trade arrangement between the EU and Turkey which covers most agricultural, coal and steel products.

The EU and Japan's Economic Partnership Agreement removed tariffs and other trade barriers, which had made it difficult for EU exporters to compete. UK trade with Japan is worth just over 2% of total UK trade and an agreement will not be ready for Brexit.

The agreement between the EU and Canada (the EU-Canada Comprehensive Economic and Trade Agreement or CETA) has eliminated 98% of tariffs in bilateral trade.

Unilateral Preferential Trade Arrangements

These arrangements normally benefit only one nation and are imposed on one nation by another. A good example is the Generalised System of Preferences (GSP), which allows products from developing or Least Developed Countries (LDCs) to be imported into the European Union (EU) at a reduced or zero rate of duty. These GSP preferences are 'non-reciprocal', which means that GSP does not apply to exports from the EU to these same countries.

The UK and EU administer three GSP systems:

Standard GSP for low and lower-middle income countries, resulting in partial or full removal of customs duties.
An extension to the GSP system is GSP+, which includes developing countries that have proved their commitment to good governance and sustainable development. As a result, most duty rates are 'zero' under this part of the scheme.
Everything But Arms (EBA) is a special arrangement for least developed countries, providing them with duty-free, quota-free access for all products except arms and ammunition.

HM Revenue & Customs (HMRC) have stated:

The UK will continue to apply the EU Generalised Scheme of Preferences during an implementation period after the UK leaves the EU with a deal.

Preference Origin Rules

To be eligible for preference origin, the products must be manufactured and/or originate in a beneficiary or qualifying country. If the products do not meet these requirements, then import or export preference duty cannot be claimed, and full standard rate duty will apply.

All preferential origin goods must satisfy the relevant conditions, such as:

Be manufactured from raw materials or components which have been grown or produced in the beneficiary country.
The product underwent a certain amount of working or processing in the beneficiary country and can be considered as "originating".
Products have been sufficiently transformed in beneficiary country, resulting in a change of tariff classification.
During manufacture of the product, the customs value of all the non-originating materials used did not exceed the threshold fixed by the origin rule for that product.
A combination of the above.
UK importers and exporters can apply to HMRC for Binding Origin Information (BOI), which is a written decision by customs confirming the origin of the product. This is valid for 3 years and is legally recognised within the UK. This should also continue to be recognised within the EU (subject to a UK / EU agreement).

Cumulative Origin Rules for EU Exports

Once again, the UK will need to replicate these rules after a UK / EU agreement.

The European Commission states the following:

Cumulation is a mechanism that allows you to consider non-originating materials used or processing carried out in another country as originating in your country or carried out in your country.

There are three types of cumulation:

1) Bilateral cumulation

Materials originating in the EU may be used as materials originating in your country. This cumulation applies to all EU preferential regimes.

How it works

If the rule attributed to your good is as that described in the sufficiently transformed goods section.

The value-added rule: cumulation permits you not to account the value of the materials originating in the EU in the percentage maximum threshold.
The change of tariff classification: because of cumulation you do not need to verify if there was change of tariff classification of the materials originating in the EU.
Manufacture from certain products: because of cumulation you do not need to verify if the materials originating in the EU refer to a later state of production or not.

2) Diagonal cumulation

Materials originating in a defined country (mentioned in the relevant provision on cumulation) may be used as materials originating in your country.

How it works

If the rule attributed to your good is as that described in sufficiently transformed goods section.

The value-added rule: cumulation permits you not to account the value of the materials originating in that country in the percentage maximum threshold.
The change of tariff classification: because of cumulation you do not need to verify if there was change of tariff classification of the materials originating in that country.
Manufacture from certain products: because of cumulation you do not need to verify if the materials originating in that country refer to a later state of production (i.e. fabric) or not.

3) Full cumulation

Processes carried out in the EU or a defined country (mentioned in the relevant provision on cumulation) may be considered as carried out in your country. Contrary to bilateral or diagonal cumulation, full cumulation permits you to consider materials that are not yet originating in the EU or your country. This implies that there are more materials imported from the EU or your country that you can use for cumulation purposes under this specific type of cumulation.

How it works

If the rule attributed to your good is as that described in sufficiently transformed goods section.

The value-added rule: cumulation permits you not to account the value of the materials imported from that country in the percentage maximum threshold.
The change of tariff classification: because of cumulation you do not need to verify if there was change of tariff classification of the materials imported from that country.
Manufacture from certain products: because of cumulation you do not need to verify if the materials you imported from that country refer to a later state of production (i.e. fabric) or not.

If you would like more details, please call +44 (0) 118 932 8447 or email info@icslogistics.co.uk

ICS Logistics Limited

Brexit and Preferential Trade Deals

Mon, 13 Jan 2020 08:58:13 GMT

The UK Government has been attempting to replicate all the EU's trade deals with countries outside the EU.

Brexit and Preferential Trade Deals

As we approach Brexit, the UK Government is preparing to negotiate a free trade deal with the EU to ensure that UK goods are not subject to duty tariffs and other trade barriers within the EU after the transition period ends on 31 December 2020.

However, the EU has approximately 40 free trade deals with more than 70 countries outside the EU. As a member of the EU, the UK currently trades with these countries under EU preferential trade agreements, without having to pay duties on most goods.

With Brexit on 31 January 2020 approaching fast, the UK Government has been attempting to replicate all the EU's trade deals with countries outside the EU. Ensuring that UK businesses still have the same tariff-free access to these countries. Otherwise, WTO (World Trade Organization) terms will apply and UK businesses will be paying extra duties on imports and exports with these countries.

Once the UK leaves the EU, the UK Government has stated that it plans to build ambitious new preferential trade arrangements with the USA and other countries.

What is Preference?

Preferential rules of origin can be complicated, and importers and/or exporters need to understand how the rules apply to their products.

What are the main benefits of using Preference?

Imports

Exports

Claiming Preference on UK Imports – Top level

The UK importer will need to confirm if their imported products qualify for preferential duty rates by following these steps:

Step 1

Step 2

Once the products have been classified, check the commodity code against the Customs Trade Tariff to identify if any preferential rate of duty is appropriate.

Step 3

Identify the country the products are being sourced from and confirm within the Customs Trade Tariff if that country is a beneficiary country under preference.

Step 4

Step 5

On import ensure that the correct preference document is presented to customs at the time of the import declaration / entry.

Claiming Preference on UK Exports – Top level

The UK exporter will need confirm if their products for export out of the UK qualify for preferential duty rates by following these steps:

Step 1

Step 2

Identify if the export market is a beneficiary country under preference.

Step 3

The UK exporter must ensure a full understanding of the preference origin rules covering the products to be exported. See preference origin rules below.

Step 4

Most importantly, the exporter must make sure to have documented evidence to support the issue of preference certificates or invoice declarations to cover the export.

Step 5

Issue the EUR1 Form or EUR1/EUR-MED Form (these EU forms could be replaced with new UK forms after Brexit?) or make an invoice declaration, depending on the export destination and the regulations.

Preferential Trade Agreements

The EU has both bilateral and unilateral preferential trade arrangements with unions of countries (trading blocs) and third countries. These would be replaced by UK arrangements following Brexit.

Bilateral

Bilateral agreements are often very specific and targeting an individual policy area. The EU has many bilateral agreements in place. Some examples:

A bilateral preferential trade arrangement between the EU and Turkey which covers most agricultural, coal and steel products.

The EU and Japan's Economic Partnership Agreement removed tariffs and other trade barriers, which had made it difficult for EU exporters to compete. UK trade with Japan is worth just over 2% of total UK trade and an agreement will not be ready for Brexit.

The agreement between the EU and Canada (the EU-Canada Comprehensive Economic and Trade Agreement or CETA) has eliminated 98% of tariffs in bilateral trade.

Unilateral Preferential Trade Arrangements

The UK and EU administer three GSP systems:

Standard GSP for low and lower-middle income countries, resulting in partial or full removal of customs duties.
An extension to the GSP system is GSP+, which includes developing countries that have proved their commitment to good governance and sustainable development. As a result, most duty rates are 'zero' under this part of the scheme.
Everything But Arms (EBA) is a special arrangement for least developed countries, providing them with duty-free, quota-free access for all products except arms and ammunition.

HM Revenue & Customs (HMRC) have stated:

The UK will continue to apply the EU Generalised Scheme of Preferences during an implementation period after the UK leaves the EU with a deal.

Preference Origin Rules

All preferential origin goods must satisfy the relevant conditions, such as:

Be manufactured from raw materials or components which have been grown or produced in the beneficiary country.
The product underwent a certain amount of working or processing in the beneficiary country and can be considered as "originating".
Products have been sufficiently transformed in beneficiary country, resulting in a change of tariff classification.
During manufacture of the product, the customs value of all the non-originating materials used did not exceed the threshold fixed by the origin rule for that product.
A combination of the above.
UK importers and exporters can apply to HMRC for Binding Origin Information (BOI), which is a written decision by customs confirming the origin of the product. This is valid for 3 years and is legally recognised within the UK. This should also continue to be recognised within the EU (subject to a UK / EU agreement).

Cumulative Origin Rules for EU Exports

Once again, the UK will need to replicate these rules after Brexit.

The European Commission states the following:

Cumulation is a mechanism that allows you to consider non-originating materials used or processing carried out in another country as originating in your country or carried out in your country.

There are three types of cumulation:

1) Bilateral cumulation

Materials originating in the EU may be used as materials originating in your country. This cumulation applies to all EU preferential regimes.

How it works

If the rule attributed to your good is as that described in the sufficiently transformed goods section.

The value-added rule: cumulation permits you not to account the value of the materials originating in the EU in the percentage maximum threshold.
The change of tariff classification: because of cumulation you do not need to verify if there was change of tariff classification of the materials originating in the EU.
Manufacture from certain products: because of cumulation you do not need to verify if the materials originating in the EU refer to a later state of production or not.

2) Diagonal cumulation

Materials originating in a defined country (mentioned in the relevant provision on cumulation) may be used as materials originating in your country.

How it works

If the rule attributed to your good is as that described in sufficiently transformed goods section.

The value-added rule: cumulation permits you not to account the value of the materials originating in that country in the percentage maximum threshold.
The change of tariff classification: because of cumulation you do not need to verify if there was change of tariff classification of the materials originating in that country.
Manufacture from certain products: because of cumulation you do not need to verify if the materials originating in that country refer to a later state of production (i.e. fabric) or not.

3) Full cumulation

How it works

If the rule attributed to your good is as that described in sufficiently transformed goods section.

The value-added rule: cumulation permits you not to account the value of the materials imported from that country in the percentage maximum threshold.
The change of tariff classification: because of cumulation you do not need to verify if there was change of tariff classification of the materials imported from that country.
Manufacture from certain products: because of cumulation you do not need to verify if the materials you imported from that country refer to a later state of production (i.e. fabric) or not.

If you would like more details, please call +44 (0) 118 932 8447 or email info@icslogistics.co.uk

ICS Logistics Limited

Incoterms® 2020

Mon, 06 Jan 2020 08:14:40 GMT

Incoterms® 2020 Rules

What are Incoterms?

The eleven Incoterms® 2020

The seven Incoterms® for any mode or modes of transport:

Ex Works (EXW)
Free Carrier (FCA)
Carriage Paid To (CPT)
Carriage and Insurance Paid To (CIP)
Delivered at Place (DAP)
Delivered at Place Unloaded (DPU)
Delivered Duty Paid (DDP)

The four Incoterms® for sea and inland waterway transport:

Free Alongside Ship (FAS)
Free On Board (FOB)
Cost and Freight (CFR)
Cost Insurance and Freight (CIF)

Ten articles for each Incoterm

Each Incoterm is covered by ten articles which clarify the responsibilities of both the seller and the buyer. The ICC have reorganised these as follows:

General obligations
Delivery/Taking delivery
Transfer of risks
Carriage
Insurance
Delivery/transport document
Export/import clearance
Checking/packaging/marking
Allocation of costs
Notices

Incoterms® 2020 Rules

The new Incoterms® rules define the following main areas:

The obligations between the seller and the buyer for arranging carriage and/or insurance of the goods.
Who is responsible for obtaining the shipping documentation and export or import licences.
Where and when the seller delivers the goods to the buyer, subsequently confirming the transfer of risk between the seller and buyer.
When the seller is or is not responsible for costs, such as packing, loading, transport, security compliance, unloading and checking of goods shipped and/or delivered.
When the buyer is or is not responsible for costs, such as packing, loading, transport, security compliance, unloading and checking of goods shipped and/or delivered.
The Incoterms®2020, as per previous Incoterms®, do NOT handle the transfer of ownership or title of the goods sold.

Key Changes

The ICC have enhanced Incoterms® 2020 to better assist the international trading community in selecting the correct Incoterms® rule for their sales contract. Therefore, ensuring more efficient export / import transactions.
Delivery At Terminal (DAT) in Incoterms® 2010 has been replaced by Delivered at Place Unloaded (DPU). Under the new DPU Incoterms®, the seller is required to unload the goods at the destination. This is the only Incoterms® rule which requires the seller to unload goods, therefore the seller needs to ensure they can organise unloading at the named place.
Incoterms® 2020 now include security-related requirements within the carriage obligations and costs.
Under the new Incoterms®, Cost Insurance and Freight (CIF) keeps the same insurance requirements i.e. Clause C (Institute of Cargo Clauses), but under Carriage and Insurance Paid To (CIP) the insurance requirement has been increased to Clause A (Institute of Cargo Clauses). This is because CIF is mostly used with bulk commodity movements and CIP is mostly used for manufactured goods via multimodal solutions.

If you would like more details, please call +44 (0) 118 932 8447 or email info@icslogistics.co.uk

ICS Logistics Limited

Import / Export Compliance

Mon, 02 Dec 2019 16:56:25 GMT

International business can be problematic for companies.

Import / Export Compliance

Engaging in international business can be problematic for companies, due to the high level of regulations set and enforced by different Government Agencies.

Companies find the field of import / export too complex and confusing. Subsequently, they fail to exploit international business opportunities and create multiple new streams of income and profit for their businesses.
Companies engage in import / export with the intention of being fully compliant with applicable laws and regulations, but due to misunderstandings find themselves in violation of the regulations and facing fines or penalties.
Companies fail to maximise the full profit potential of importing products, due to not having full visibility and control of the costs within the end-to-end international supply chain.
Companies may win export business, but not fully understand the overseas customer’s requirements or the terms and conditions of selling into that export market. This often results in reduced profit, as the export sales price agreed with the overseas customer was not fully inclusive of all costs.

Having over 35 years’ experience of international business and trade compliance, we have helped companies build successful and profitable import / export activities, whilst ensuring that they maximise compliance with laws and regulations.

If you would like more details, please call +44 (0) 118 932 8447 or email info@icslogistics.co.uk

ICS Logistics Limited

Brexit and Customs Clearance

Thu, 17 Oct 2019 08:13:41 GMT

Transitional Simplified Procedures

Brexit and Customs Clearance

Customs has been communicating with UK businesses that currently import from the EU, advocating that after Brexit they should use Transitional Simplified Procedures to make customs clearance as easy as possible. Transitional Simplified Procedures will enable an importer to bring goods into the UK from the EU without having to make a full customs declaration in advance.

However, an importer will still need to submit a customs declaration after their goods have crossed the UK border. The customs procedure can be frustrating, difficult and costly, if you get it wrong.

For example, you will need the correct commodity codes of the items you are importing to determine any duty payable on your import.

What are commodity codes?

The World Customs Organization (WCO) has developed a multipurpose international product nomenclature known as the Harmonized Commodity Description and Coding System (HS Codes). The six-digit code is regulated by the WCO and that means the first six digits of the tariff are the same in most countries.

The EU use an eight-digit coding system comprising of the HS codes with further EU subdivisions, this is called the Combined Nomenclature (CN). The CN serves as the EU's common customs tariff and provides statistics for trade inside the EU (intra-EU trade statistics) and between the EU and the rest of the world.

The EU hold commodity codes in a database called the TARIC, or Tariff Intégré Communautaire. This integrated tariff comprises of the eight-digit code Combined Nomenclature, plus two additional digits (TARIC subheadings).

The Integrated Tariff of the UK is based on the Combined Nomenclature (CN) eight-digit coding system for classifying goods. The Integrated Tariff is formatted, with the first two digits of the tariff code representative of the name of the trade tariff chapter, digits three to eight apply to headings within the chapters and numbers nine and ten determine the duties.

Product example:

Code Description Classification type

64 Footwear Harmonized System (HS) Chapter

64 06 Parts of footwear Harmonized System (HS) Heading

6406 10 Shoe uppers Harmonized System (HS) Subheading

6406 10 10 Leather Combined Nomenclature (CN) Subheading

6406 10 10 10 Hand-made TARIC Subheading

Getting the commodity code wrong!

Incorrectly classifying a product can lead to incorrect duty payments, border delays, non-compliance penalties, seizure of the products and a denial of import privileges.

Unless you are incredibly well versed in customs clearance, you’ll probably be wanting some help and we can help.

If you would like more details, please call +44 (0) 118 932 8447 or email info@icslogistics.co.uk

ICS Logistics Limited

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