How will Brexit Affect UK Exporters

At this stage, we can only speculate on the many possible outcomes of the Brexit negotiations. It’s going to be long time before anyone knows what will happen when, or indeed, if, the UK finally does leave the EU and as the first member state to initiate article 50 and start the leaving process, we are in uncharted waters. International trade is a key point in the Brexit discussion, and we will be keeping a close eye on any developments in this area as the negotiations proceed.

What happens now?

Britain will remain an EU member state until 29th March 2019, two years after the leaving process was initiated by the triggering of article 50. This period will be used to negotiate the terms on which the UK will leave the European Union. During this time, the UK will be excluded from any internal EU discussions and will have no say in the decisions regarding its withdrawal; however, it will still play a normal role in all non-Brexit business within the EU as a full member.

What if an agreement isn’t reached within the two-year negotiation period?

Many experts believe a final Brexit deal will not be reached in this timeframe and could take closer to ten years due to the sheer scale and complexity of forming an agreement between 28 countries on such a huge range of matters. It is possible that the two-year period initiated by Article 50 could be extended if all 28 members agree to do so unanimously. However, if no extension is agreed and a deal is not reached, the UK will leave the EU and the consensus is that we will revert to World Trade Organisation (WTO) rules.

What are WTO rules?

The WTO’s mission is to promote free trade by abolishing customs barriers such as import tariffs. It is the only international body overseeing the rules of international trade, which are enforced with the use of trade sanctions against the countries that breach them. As WTO members, the EU and UK would have to abide by the Most Favoured Nation (MFN) rule, which essentially promotes fairness and equality between trading partners, or as the WTO puts it:

“Each member treats all the other members equally as ‘most-favoured’ trading partners. If a country improves the benefits that it gives to one trading partner, it has to give the same “best” treatment to all the other WTO members so that they all remain ‘most-favoured’.”

There are a few exceptions to this rule, but essentially it means that the EU cannot apply unfair tariffs to UK goods once we leave the union, and vice versa.

What is likely to change after Brexit?

Not a lot of detail has been shared on the government’s Brexit negotiation plans, and with more uncertainty in the government’s strategy following the result of the snap election this month, it is difficult to predict what type of deal the UK will aim for. We do know that the conservatives will not seek to keep the UK a part of the single market and Customs Union, so let’s look at what might happen if this doesn’t change.

What happens if we leave the customs union?

The purpose of the customs union is to facilitate the free movement of goods between EU members. There are no tariffs on goods moving within the EU and common external tariffs are applied to goods imported from the rest of the world. If the UK leaves the customs union, tariffs will apply to goods moving between the UK and EU and they will have to undergo customs clearance. Customs checks and administration will increase costs to UK business, both in terms of time and money. However, no longer restricted by the customs union rules, the UK would be free to forge its own trade deals with the rest of the world, which Brexit supporters believe outweighs the downsides of leaving the union.

What if we leave the single market?

The single market allows for the free movement of the “four freedoms” within the EU. These are goods, people, services and capitol. By harmonising trade regulations across all member states, the single market removes trade barriers. Essentially, there are no regulatory barriers or unfair restrictions within the EU. If the UK leaves the single market we will no longer be restricted by EU regulations and would have control over the movement of people across our borders, which many people see as positive outcomes. However, there would be massive impacts on the trade of goods and services as tariff and non-tariff barriers are reintroduced.

Are there other options for the UK?

You may have heard of the “Norway model”, which many see as a viable option for the UK post-Brexit. This would entail joining the European Economic Area (EEA) alongside Norway, Iceland, Liechtenstein and EU members. It allows near-full membership of the single market; members must adopt most legislation relating to the four freedoms of the single market, with a few exceptions, including the common agricultural and fisheries policies. The benefit of this option is that the likely impacts of joining the EEA can be modelled based on the current members, and at this stage it is suggested that taking this route will be better for the UK economy than arranging a separate free trade agreement with the EU. However, to gain this level of access to the single market, the UK will likely have to accept EU regulations on the free movement of people as well as make financial contributions to the EU budget, which are two of the most popular reasons why the UK voted to leave the EU in the first place.

Q&A: Proof of Origin

Why do we need to prove origin?

There are several reasons for the need to prove the national origin of imported goods, which can be grouped into two categories: preferential and non-preferential.

Non-preferential origin is used for the implementation of commercial policy measures, such as anti-dumping duty and tariff quotas. There are also origin marking and labelling requirements for certain goods and countries, and origin is also used for international trade statistics.

Preferential origin allows goods to be imported at a reduced or zero rate of duty. So if you’re exporting to a preference-giving country, your customer could pay less or no import duty. This only applies to countries with which we have a preferential trade agreement.

How do we define origin?

There are two categories of origin:

  • Goods wholly obtained from a single country. 
  • This covers goods that only contain materials obtained or produced from a single country, for example, vegetables wholly originate from the country in which they are harvested, animals wholly originate from the country in which they were born and raised etc.
  • Goods sufficiently worked or processed.
  • This is a more complicated rule for defining origin but, essentially, goods which are comprised of materials from outside the EU could be granted EU origin if they have undergone a substantial manufacturing process within an EU country.

There are two different ways to determine if goods have been sufficiently processed in the EU:

  • How much value has been added through the process?
  • How has the tariff code changed from the components to the final product?

This means that, provided the requirements for sufficient process are met, your products can be sold as EU origin goods even if the component materials are not of EU origin. Tariff codes define the nomenclature and duty rates applied to your goods, so a change in tariff heading will change how the goods are treated by HMRC.

How do we prove origin?

If your goods meet all the requirements for EU origin, you will need to provide proof to the importing country. Depending on whether the importing country can take preference or not, there are different forms of proof of origin:

  • EUR-1 certificate – this states that your goods are of EU origin and allows the importer to take preferential import duty rates.
  • ATR certificate – similar to an EUR-1, this allows preferential duty rates on imports and exports between the European Community and Turkey.
  • Invoice declaration by the exporter – this allows preferential duty rates to be taken by the importer, but can only be used by Approved Exporters with a customs authorisation number.
  • Certificate of Origin – this states that the goods are of EU origin, but does not allow any preferential duty rates to be taken by the importer. It is used for non-preferential origin.

Exporter Services can provide all of the above certificates through our links with UK Chambers of Commerce and we also provide assistance with applications for Approved Exporter status. If you would like to find out more about any of the above, please give us a call or fill out the contact form on our contact page.

Shipping batteries by air?

1328180598862

Having just completed his IATA Dangerous Goods training with a near perfect score, Owen is your go to person for shipping any dangerous goods including lithium batteries by air, to any place the world.

We can provide advice on packing, marking, labels, procedures and relevant documents including Shipper’s Declaration for Dangerous Goods. We can come to your site, assess your products and give you support with all official requirements including signing the Shipper’s Declaration for Dangerous Goods. 

 

New member of our team

ProfileWe are pleased to introduce Owen Lewis to our team. He brings a wealth of knowledge with him from an import transport company. He has relocated for us from Kent, where he spent two years working in import duty management, specialising in Customs Freight Simplified Procedure. Owen looks forward to building on his knowledge of the shipping industry, particularly on the Export side of things. 

Welcome to the team Owen.

DID YOU KNOW… About the changes to UCC starting May 1st 2016

UNION CUSTOMS CODE

ONE OF THE MOST SIGNIFICANT CHANGES IS TO INWARD PROCESSING RELIEF from 1st May 2016

Background

The current European Union Customs regulations will be replaced by the Union Customs Code with effect from 1st May 2016. Along with the associated implementing and delegated regulations the UCC will replace the current regulations which have been in force since 1992/93.

Changes to Inward Processing Relief

From 1st May IPR will become one of the Special Procedures which replace the current CPEI (Customs Procedures with an Economic Impact), and will be re-named Inward Processing.

Simplified Authorisations, such as SIPR, will become Authorisation by submission of a Declaration for a Special Procedure. Effectively the import declaration submitted on your behalf acts as your application for IP authorisation on a transactional basis, in the same manner as SIPR operates now.

Financial security for Inward Processing

The Union Customs Code makes it a mandatory requirement that any potential duties are secured by a financial guarantee.

Unless you already have an IPR authorisation or bank guarantee in place for Inward processing your options will be to;

  • Obtain a full authorisation
  • Obtain a bank guarantee for individual transactions.
  • Provide security in the form of a cash deposit for the amount of potential duties, which will be refunded following only following appropriate re-export or approved disposal.
  • Provide a deposit payment via your duty deferment account.
  • Authorise your nominated carrier to provide HMRC with a deposit, which will be payable prior to delivery or receipt of invoice for account holders.
  • Consider outright payment of the duties.
    • This could be especially appropriate if only import VAT, or small amounts of duty are involved.
  • Only secure duty amounts, as import VAT which is paid outright is recoverable as input tax by VAT registered traders. Limit to availability of simplified authorisation (Authorisation by submission of a declaration) 
  • In addition to the above, HMRC have advised that the availability to use the simplified authorisation procedure will be limited to 3 times a year for each operator. This means that if you need to import goods for inward processing, or use other simplified authorisations, more than 3 times a year your will need to obtain an IP authorisation. 

Transitional Arrangements

If you already have an approval, you may operate without a guarantee until this approval expires.

Re-approval after 1st May 2016 will be under UCC conditions. Inward Processing authorisations issued under Union Customs Code conditions will be subject to a bank guarantee.

Applications for authorisation under current conditions will not be accepted by HMRC after 1st April 2016

Guarantee waivers are available on a sliding scale dependant on your level of compliance with Approved Economic Operator conditions, with 100% waiver available for operations to full AEO Customs Simplifications standards.

What do I need to do

If you have a need to continue importing goods under IP arrangements for processing after 1st May 2016, you will need to consider the implications that the changes detailed above will have on your business.

Further information

https://www.gov.uk/guidance/introduction-of-the-union-customs-code-ucc#inward-processing

SOLAS Regulations are being updated – Are you aware?

Update to SOLAS Regulations 1st July 2016

As of 1st July 2016, changes to the International Convention for the Safety of Life at Sea (SOLAS) 1974 regulations will come into effect. One of the major changes effecting cargo carriage is the requirement for all packed sea freight containers carried by ships subject to SOLAS to have a proven gross weight in the form of the Verified Gross Mass (VGM).

The Verified Gross Mass must include the total weight of all packed cargo, the container tare and any additional material used to pack or secure the cargo within the container.

Verified Gross Mass = Container Tare + Cargo + Securing Material

VGM can be determined by either of the following two methods:

  1. Weighing – once the container has been completely packed and sealed it can be weighed by the shipper or a third party contracted by the shipper.
  2. Calculating – all packages, cargo, dunnage and any other packing material can be weighed individually and the sum added to the container tare, as stated on the outside of the container.

It is the Shipper’s responsibility to verify the gross mass of a container and to ensure that it is communicated to the carrier on time, or to authorize a third party to do so on their behalf. Weight values must meet the accuracy standards of the state in which the weighing has been carried out.

A new EDIFACT message, VERMAS, has been developed for the purpose of communicating the VGM and additional mandatory information to all parties involved in the transport chain. The mandatory information to be included with the VGM is as follows:

  • Booking Number
  • Container Number
  • Verified Weight
  • Unit of Measurement
  • Responsible Party (named on BOL)
  • Authorized Person (authorized by Shipper)

More details about SOLAS can be found here:

http://www.imo.org/en/About/Conventions/ListOfConventions/Pages/International-Convention-for-the-Safety-of-Life-at-Sea-(SOLAS),-1974.aspx

Exporter Services Training Courses – Join us at a location near you.

International Trade Training Courses

 

Exporter Services provide a number of BCC Accredited short training courses throughout the year at a range of locations across the UK. These courses cover the key aspects of international trade and are tailored to suit people at all levels, from those just starting out, to the experienced trader. Topics include:

  • An Introduction to Export and Import
  • Incoterms (2010)
  • Documentary Letters of Credit and Methods of Payment
  • International Documentation and Customs Compliance
  • Export and Import Procedures and Documentation

All courses currently scheduled for the year are listed below with links to more information and course booking. Be sure to check back regularly as more courses will become available through the year.

 

14.07.16

Shropshire Chamber – Letters of Credit and Methods of Payment

http://shropshire-chamber.co.uk/event-registration/?ee=682

19.07.16

I.O.E London – International Documentation and Customs Compliance

http://www.export.org.uk/shop/international-documentation

28.07.16

Shropshire Chamber – Letters of Credit and Methods of Payment

http://shropshire-chamber.co.uk/event-registration/?ee=551

10.08.16

Glasgow Chamber – Export and Import Basics

http://www.glasgowchamberofcommerce.com/training/international-trade/international-trade-training/export-and-import-basics-10-august/

11.08.16

Glasgow Chamber – Letters of Credit

http://www.glasgowchamberofcommerce.com/training/international-trade/international-trade-training/letters-of-credit-11-august/

30.08.16

I.O.E. Manchester – International Documentation and Customs Compliance

http://www.export.org.uk/shop/international-documentation

13.09.16

I.O.E. London – International Documentation and Customs Compliance

http://www.export.org.uk/shop/international-documentation

20.09.16

I.O.E. Birmingham – International Documentation and Customs Compliance

http://www.export.org.uk/shop/international-documentation

22.09.16

Shropshire Chamber – Incoterms

http://shropshire-chamber.co.uk/event-registration/?ee=549

12.10.16

Glasgow Chamber – Export and Import Basics

http://www.glasgowchamberofcommerce.com/training/international-trade/international-trade-training/export-and-import-basics-12-october/

13.10.16

Glasgow Chamber – Letters of Credit

http://www.glasgowchamberofcommerce.com/training/international-trade/international-trade-training/letters-of-credit-13-october/

18.10.16

Shropshire Chamber – Export Documentation

http://shropshire-chamber.co.uk/event-registration/?ee=683

10.11.16

Shropshire Chamber – Letters of Credit and Methods of Payment

http://shropshire-chamber.co.uk/event-registration/?ee=552

22.11.16

I.O.E. London – International Documentation and Customs Compliance

http://www.export.org.uk/shop/international-documentation

6.12.16

I.O.E. Manchester – International Documentation and Customs Compliance

http://www.export.org.uk/shop/international-documentation

7.12.16

Glasgow Chamber – Export and Import Basics

 http://www.glasgowchamberofcommerce.com/training/international-trade/international-trade-training/

8.12.16

Glasgow Chamber – Letters of Credit

http://www.glasgowchamberofcommerce.com/training/international-trade/international-trade-training/

Sue Wright made “Fellow” Member

IOE 80th-5692

We are very proud to announce that our Managing Director, Sue Wright has been made a  “Fellow” member of the Institute of Export at their 80th birthday celebrations.

This is an outstanding achievement and the team here at Exporter Services, cannot congratulate her enough.

Sue is pictured above with Lord Empy and Lesley Batchelor OBE, FIEx (Grad) – Director General of the Institute of Export, as she is presented with the award. We congratulate Sue again and cannot wait to see what she achieves next!

Full stories can be found on the IOE website. Also follow us on Twitter for instant updates @ExporterServ

http://www.export.org.uk/blog/

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