January 1st, 2021 marked the start of the Brexit transition period, and the UK has effectively left the EU’s customs union and single market. Customs procedures for trade between the EU and UK have been applied and have a considerable impact on the logistics sector.
BREXIT AND THE LOGISTICS SECTOR
The logistics sector aims to move products from A to B as quickly and as efficiently as possible and at the right price. Depending on the supply chain of a particular product, this can include multiple iterations at different stages of the production and distribution process. Brexit has the potential to severely impact the haulage of freight into and out of the UK across all modes of transportation: road, rail, air, and maritime.
HOW DO YOU HANDLE CUSTOMS DECLARATIONS SINCE 1ST OF JANUARY 2021?
Ensuring compliance with the requisite customs procedures and having the proper documentation for consignments is crucial to minimize delays at the border; possession of the wrong documentation could risk consignments being turned away. Shippers must identify shipments with products that must be checked at the border (e.g., products of animal origin). These guidelines also extend to the wood packaging material (WPM) the freight is transported on and in, including pallets, crates, boxes, cable drums, spools, and dunnage. Currently, WPM moving between the UK and the rest of the EU does not need to meet International Standard for Phytosanitary Measure No. 15 (ISPM15).
However, in a no-deal scenario, all WPM moving between the UK and the EU will need to be ISPM15 compliant (treated and marked) and may be subject to checks.
The EU / UK Trade & Cooperation Agreement (TCA), also known as the Free Trade Agreement (FTA), only allows for UK and EU originating goods’ duty-free movement.
For example:
- Goods originating from China must pay duty on entry to the UK even if they are paid in the EU.
- Traders and sellers can import goods originating in the UK into France duty-free with the correct origin statement.
To claim preferential status, the requirements are slightly different depending on the direction of flow:
UK to the EU
When exporting from the UK to the EU, the trader/seller must include their EORI number in any preference statement trader/seller issues to their EU customer, regardless of the value.
EU to the UK
When exporting from the EU to the UK, a statement on origin can be made out by any exporter provided the value of the consignment is 6,000 euros (currently £5,700) or less with just the EORI number. Above this amount, the EU exporter must have a Registered Exporter (REX) number and include it in the statement.
STEP-BY-STEP IMPORT GUIDE AFTERS BREXIT
The guide is for advice and guidance only and is not intended to cover all products and eventualities. Some areas may change, and businesses are advised to monitor relevant government and customs sources closely.
1) Register for an EORI number
You need an EORI number to trade, whether you are based in the UK or EU27. Your customers will need to register for an EU EORI number if they do not already have one. You can obtain an EORI number by registering with the customs authority in your country.
2) Complete and send a Power of Attorney
HLOGISTICS needs written authorization from you to enable us to act as a customs agent on your behalf. This standard will apply to both export declarations and import clearances. Without this, we cannot move your cargo through customs.
3) Find out the commodity (HS classification) code of your goods
Commodity codes classify goods so you or your broker can fill in import declarations. Classifying your goods correctly means that you:
- Pay the correct amount of duty.
- Know if duty is suspended on any of your goods.
- Are aware if any preferential duty rates can be applied.
- Know if you need to obtain an import or export license.
If you are unsure about how to classify your products, your national customs authority will have guides available online.
4) Determine the value of your goods
The value of the goods is necessary to determine the level of customs duty applicable. The value is also used for trade statistics.
5) Check whether your goods are prohibited or restricted in any way or whether any additional requirements are necessary
There are some goods that you can’t bring into countries. Transporters will need a special license to import restricted goods.
Licenses are often needed to import and export military and paramilitary goods, dual-use and technology, artworks, plants and animals, medicines, and chemicals.
For more information, please see the current guidance on prohibited and restricted goods, Import and Export Licences on your local customs or government website.
6) Establish the origin of the goods
Establishing the goods’ origin will help identify whether they qualify for lower or nil customs duty.
There are two main categories of origin in the rules:
- Goods wholly obtained or produced in a single country
- Goods whose production involved materials from more than one country The second category is more complex as there are several criteria to follow.
Once you have clarified the origin of the goods, you can determine if they qualify for preferential treatment under a tariff preference scheme.
7) Consider whether you are eligible to use any facilitations
There are several customs special procedures available to traders:
- Storage comprising of Customs Warehousing (CW)
- Specific use comprising of Temporary Admission and End Use
- Processing comprising Inward and Outward Processing
- Transit.
Before deciding whether to use a special procedure, you should research the procedure to ensure that you can meet all the obligations attached to it.
To note, the use of special procedures requires prior authorization from HMRC (UK) or local authorities in one of the 27 EU member states.
8) Declaring your import to customs
It is possible to make your own customs declarations, but the process is complicated and only suitable for more experienced importers. Most businesses use a customs broker or agent to do this for them.
If HLOGISTICS are handling your goods, we can assist you with this.
9) Pay duty on the goods
You might have to pay import duty depending on the goods’ classification and where they come from. Some goods benefit from a duty suspension regime. You can find information on this on your national customs website. Your goods might also be liable to additional duties, such as anti-dumping duties.
Customs don’t normally release goods until you’ve paid all the charges due. Exceptions to this include if the importer of the goods opens an account with customs. Conditions must be met to take advantage of this scheme which will include providing guarantees.
We’re ready for Brexit, and we’ve got you covered.
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