Export training in Northern Ireland

We’re excited to announce that we will be holding an export training day at the Fitzwilliam Hotel in Belfast on 12th February 2018 on Understanding Export Documentation and Customs Compliance.

 

This course is suitable for anyone involved in exporting goods, though it requires some basic knowledge of International Trade.

It is an excellent refresher as well as providing new information to learners.

 

Content:

Review and discuss the following topics:

  • Incoterms ® 2010, Insurance & Licence considerations
  • Overview of International Document Types
  • Tariff Codes, Proving Origin & Certificates of Origin
  • Free Trade Agreements & Preference Documents
  • HMRC Requirements for zero rated VAT
  • Booking the Shipment & the associated Transport Documents
  • The role of HMRC, Customs & Export Control
  • Preparing for BREXIT
  • HMRC Audits and managing them
  • General good practice for compliance

Additionally, we will offer:

  • One on one workshops to discuss any specific issues 

 

Certificates will be provided on the day.

 

Date: 12th February 2018

Venue: Fitzwilliam Hotel (Boardroom)

http://www.fitzwilliamhotelbelfast.com/ 

Agenda:

Registration 9.15 am

Break 10.45 am

Lunch 12.30 pm

Afternoon 2.30 pm

Close 4.30 pm

 

At £295.00 + VAT per person, this course offers excellent value for money and gives the delegate a chance to discuss any specific issues they may be facing in the world of international trade with an expert with over 30 years experience in this field. 

 

Contact team@exporter-services.co.uk to request a booking form.

 

We look forward to seeing you soon!

New EU Sanctions against Venezuela

The latest Notice for Exporters 2017/25 from Department of International Trade describes new EU sanctions against Venezuela.

Sanctions were imposed by European Union on 13th November 2017 and the new measures are contained in Council Decision 2017/2074/CFSP and Council Regulation (EU) No 2017/2063.

The sanctions include

  • Arms embargo – including all items from the UK Military List (controlled items having ML number)
  • Prohibition on the supply of equipment which might be used for internal repression
  • Equipment for monitoring communications – A licence will be required for the supply of equipment, technology or software intended primarily for use in the monitoring or interception of internet or telephone communications on mobile or fixed networks in Venezuela
  • There are related prohibitions on the provision of technical assistance, financing and financial assistance, brokering services, and other related services.
  • Financial sanctions

The new sanctions permit Member States to authorise transactions, prohibited by the arms embargo, which concern the execution of a contract or an agreement concluded before 13 November 2017.

 

For more information and support, please contact us directly.

Why using EXW/FCA for Letters of Credit is not a good idea!

Image result for not a good ideaIncoterms EXW: Spotlight on Ex Works | Shipping Solutions

A Letter of Credit (LC) is an important method of payment in International Trade. It is a type of a bank guarantee which ensures that if compliant documents are presented to the negotiating bank payment will be received as per the LC terms.

It should be noted that LC’s come with associated costs.  The opening charges are borne by the Importer who becomes the Applicant (the Buyer), any charges outside the country of the Applicant are borne by the Beneficiary of the credit, the Exporter (the Seller).

Charges can include costs such as advising commission, acceptance commission, any amendment charges, confirmation commission (if applicable), checking/paying commission, transmission charges, courier charges for original documents and reimbursement fees (if applicable).  These can total up to several hundred pounds depending on which bank in the UK is used for handling the documents with multiple presentations against the LC further increasing charges.  When quoting for the goods on any Incoterm basis, many companies do not take these costs into consideration and this results in reduced margins.

There are further complications when LCs are raised on an EXW/FCA basis.  Using these Incoterms, it is the Importer which contracts for carriage and they can choose any Agent in their country to arrange the shipment. Such Agents might not necessarily work with Freight Forwarders in the United Kingdom (UK) who have experience raising transport documents for LC presentations.

In these situations, it is often found the transport document is raised and sent off to the Applicant for approval without the Beneficiary being able to ask for any changes which may be required under the LC. Crucial information can be missed off, spelling is not thoroughly checked, declarations and signatures are not sufficient to comply with the LC requirements. It can take time to see a draft document for checking and for any of the requested changes to be applied.  A Freight Forwarder who is not familiar with transport documents raised in accordance with an LC might dismiss the importance of minor changes required such as spelling, dates, correct version of the document with the right stamps and signatures.  The Beneficiary may have to wait several days for the transport documents to be sent to them therefore delaying the presentation and, in many cases, receipt of payment. Each shipment, even for the same Applicant, might mean working with a different Freight Forwarder in the UK as they offered the cheapest rate for that shipment.

Quoting for goods on CPT/CIP basis might seem like more work in getting the right price from a Freight Forwarder, ensuring the service is of good quality and that the Applicant will accept the costs. However, in the long term, finding a Freight Forwarder that understands the company requirements and has worked with LCs previously will mean that the transport document will be for the Beneficiary to approve.  The Freight Forwarder will know what sort of information is required and in what format it should be included, they will work with the Beneficiary on agreeing the documents in advance so that when the goods move the originals can be issued straight away. As the Beneficiary is paying their fee there is the ability to apply pressure on them to get the transport documents right and provided in a timely manner. The Freight Forwarder will also provide the required proof of export for the shipment, this can be an issue when trying to obtain this from a Freight Forwarder contracted by an Applicant.

LCs are a secure way to get paid for goods, however they require a thorough assessment of the costs which will be incurred to ensure that the quotation to the client and the subsequent LC is raised for an amount which will cover the Beneficiary’s costs and protect margins. By contracting for carriage there is an increased chance of being able to present compliant documents as there is control over the transport documents being raised by the appointed Freight Forwarder.

Qatar Crisis

Qatar is currently being blockaded by many of its Gulf neighbours in a dispute that came to a head last month. As of 5th June 2017, Saudi Arabia, Oman, Egypt and Bahrain have closed all of their land, sea and air routes into and out of Qatar. As a result, moving goods into Qatar has become extremely difficult. Flights to and from Qatar cannot pass through airspace of the four countries mentioned above.

It is unknown how long this crisis might go on for. The opposing countries sent a list of 13 demands to Qatar in order to end the dispute; however, these have been formally rejected by Qatar and the blockade remains in place.

A list of the 11 countries that have cut or limited diplomatic ties with Qatar is as follows: Bahrain, UAE, Saudi Arabia, Egypt, Yemen, Libya, Maldives, Mauritania, Senegal, Jordan, Djibouti. If you plan to export any goods to Qatar, be prepared for massive delays and very high costs, as routes into Qatar have become very restricted. Imports have been limited to food and other urgent supplies, which are being flown in.

 

 

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.

Exporter Services Sponsor John Duncan Racing

John Duncan Racing – Mini Cooper Cup Championship 2017

Exporter Services is proud to sponsor John Duncan Racing this year in the Celtic Speed Mini Cooper Cup Championship.

Round 1 was held on 9th April at Knockhill Racing Circuit, and despite a few problems, John did well to get a podium finish on the final race, qualifying in 6th place overall. Well Done John! We wish him the best of luck in his next race.

You can find out more about the weekend of racing and find some great photos on John’s Facebook page

 

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.

Why are some batteries so difficult to ship?

  Have you ever wondered how batteries are transported safely around the world? Maybe you’ve never considered the potential hazards the humble double-A could pose? Well, with so many devices taking power from cells and batteries these days it is important to recognise that shipping electrical items and the batteries that power them isn’t always straight forward.

What are the hazards?

Not all batteries are considered hazardous, but there are many different types available and some present different risks than others. Most batteries contain corrosive chemicals, which present an obvious hazard if the casing becomes damaged and it leaks. This is generally the main hazard with single-use batteries and, provided they are packed to certain specifications, they can be transported on both passenger and cargo aircraft.

Lithium batteries, which are used in rechargeable devices like mobile phones and laptops, present a different hazard; they can combust and explode if damaged, which in a confined space on an aircraft could potentially cause catastrophic damage. For this reason, lithium battery shipments are treated very seriously by the International Air Transport Authority (IATA) and are heavily regulated for air travel.

How can batteries be safely transported?

Guidelines for safely packing and shipping batteries are set out in IATA’s Dangerous Goods Regulations (DGR), and the requirements vary depending on the type of battery being shipped. Generally, provided these regulations are followed and state and operator requirements are met, shipping batteries is no harder than any other hazardous material. However, when it comes to lithium battery shipments, things can become a bit more complicated. Let’s take a look at lithium batteries in more detail:

There are two main types of lithium battery:

  • Lithium ion
  • Lithium metal

Each type is treated differently in the DGR, so the procedures for shipping a box of lithium ion batteries are different to shipping a box of lithium metal batteries. Therefore, when we look at a lithium battery shipment the first question is what type of lithium batteries do we have?

The second question we ask is how are the batteries packed? There are three ways in which lithium batteries can be packed:

  • Lithium ion/metal batteries
  • Lithium ion/metal batteries packed with equipment
  • Lithium ion/metal batteries contained in equipment

Each of these have their own Packing Instructions in the DGR, so a parcel is treated differently depending on whether it contains batteries only, batteries and equipment, or batteries installed in equipment. This is because of the amount of inner packaging protecting each individual battery within a package. Let’s look at an example:

Parcel A contains 20 batteries, each individually packaged in a plastic blister pack. The amount of space and material between each battery in the parcel is quite small.

Parcel B contains 20 of the same batteries, but this time each battery is packed on a foam tray inside a box, which also contains a mobile phone. It’s bigger than Parcel A because it contains more and this means the amount of space and material separating each battery is also bigger.

Parcel C contains the same 20 batteries as A and B, but they are now each installed within a mobile phone, which is packed in the same way as in Parcel B. Each battery is encased by a phone in a foam tray inside a box.

Now imagine that one of the 20 batteries in each parcel is defective and starts to heat up to the point of combustion (a process known as thermal runaway). In parcel A the batteries closest to the defective battery have very little protection from the heat it emits and could in turn become damaged to the point of combustion. In parcels B and C, there is more space between each battery to allow the heat to dissipate safely, and there is also a lot more material protecting them. Batteries in parcel C gain extra protection from the mobile phone itself.

Put simply, there is less risk in shipping lithium batteries that are contained in equipment compared to batteries packed “loose”, and this is reflected in the regulations. Of course, it’s never quite that simple; there are specific requirements and restrictions for each type of battery, but Exporter Services has experienced and certified people who can take the difficulties of shipping batteries off your hands.

If you would like to know more about shipping batteries, or need help with a shipment, please get in touch; we’re happy to help.

2017 Changes to Lithium Battery Regulations

As we settle in to 2017 we’re already seeing changes in some of the regulations that affect our day to day shipping procedures. For those of you who ship lithium batteries by air, a change in freight operators’ attitudes to certain parts of IATA packing instructions (PI) could affect the way you move your goods.

As of January 1st this year, many freight operators no longer allow lithium batteries to be shipped under reduced regulations, which cover the following PI:

Section II of Packing Instruction 965 for UN3480 lithium ion batteries.

Section II of Packing Instruction 968 for UN3090 lithium metal batteries.

 This means that any packages that would normally meet the specifications of Section II of either of these packing instructions are now treated as Section IB, and are consequently subject to all the regulations associated with Class 9 hazards, including the requirement for a Shipper’s Declaration.

Although the IATA regulations have not yet been changed to reflect the above, the freight operators are entirely within their rights to refuse any packages that do not meet their own safety regulations, so it is important to always check with freight operators for any additional requirements when using them for hazardous shipments.