Legislation watch 2012

Sandra Strong reports on new developments in Customs & Excise legislation.

December 2012


Changes to USA importer security status

Changes to the Importer Self-Assessment (ISA) programme, which allows participants the opportunity to assess their own compliance with US Customs and Border Protection (CBP) laws and regulations rather than undergoing comprehensive CBP audits, came into force 5 October 2012. This is linked to the Customs-Trade Partnership Against Terrorism (C-TPAT) programme.

Brazil increases tariff rates

On 1 October 2012, Brazil increased its import tariffs to as much as 25% on a list of 100 products in the steel, petrochemical, chemical, pharmaceutical and capital goods industries. The higher duties will initially remain in place for a year but can be extended for additional 12-month periods through to 31 December 2014. A similar tariff hike is planned for an additional 100 products expected to be identified later this year.


EFTA–Montenegro FTA

The EFTA–Montenegro free trade agreement became effective on 1 September 2012 between Montenegro, Liechtenstein and Switzerland. It was scheduled to enter into force on 1 October 2012 for Iceland and 1 November 2012 for Norway. With a focus on opportunities arising from the new agreement for Montenegrin producers and exporters, experts presented technical and practical aspects of accessing the EFTA markets. The topics covered included rules of origin and sanitary and phytosanitary requirements, as well as technical standards.

EFTA–Hong Kong FTA

The EFTA–Hong Kong free trade agreement took effect from the beginning of October 2012, opening up business opportunities and cutting prices of imports. The agreement, which was signed in June 2011 with Iceland, Liechtenstein, Norway and Switzerland — members of the European Free Trade Association (EFTA) — covers investments as well as trade in goods and services. Hong Kong service providers will be granted temporary entry permits to encourage travel into EFTA states.


An agreement on the free trade zone (FTZ) of the CIS (Commonwealth of Independent States), signed on 18 October 2011, has come into force. The CIS is an organisation of former Soviet republics. Currently, it covers only three out of the seven signatory countries: Russia, Belarus and Ukraine. The remaining countries, Kazakhstan, Kyrgyzstan, Moldova and Tajikistan, have not yet ratified the agreement. The formal entry into force of the agreement does not mean the creation of a new FTZ but, after six months, the participants will start negotiations on a phased cancellation of fees. Azerbaijan did not sign the agreement and it appears that it is not going to change its position. However, before the end of December 2012 Russia wants to draw Azerbaijan into the CIS free trade area and the Customs Union.

Italian VAT to increase

It was announced in October 2012 that Italian VAT was expected to increase by 2%. The rise will now be only 1%, from 21% to 22%, in July 2013. The rise in the reduced VAT rate will also be 1%, from 10% to 11%.

Intrastat thresholds

There will be no change to the Intrastat reporting thresholds for 2013. The arrivals threshold remains at £600,000, the dispatches threshold at £250,000, and the delivery terms threshold at £16 million.

November 2012


Algeria delays implementation of FTA With EU

Algeria has won a trade concession from the European Union, according to which the EU–Algeria Free Trade Agreement (FTA) should be fully phased in by 2020, and not by 2017. The Algerian government has successfully asked for more time to fully lift tariff restrictions with the EU on imports of industrial products. FTA signed 1 September 2012, full implementation expected by 2020.

EU Tariff

Customs have issued the correlation table looking at the Combined Nomenclature Tariff changes due in January 2013 (ie the eight-digit tariff used at export and Intrastat in the EU). Most changes are in the early sections, with Chapter 27 seeing the majority of amendments. In all, there are just over 50 changes. The tariff is available now. Effective 1 January 2013

Technical Regulations Russia/Belarus/Kazakhstan Customs Union

It has been announced that the scope of products that are to conform to Technical Regulations (TRs) in the Customs Union of Russia, Belarus and Kazakhstan will be increased. This is an on-going programme until 2015.

Regulations on personal protection equipment, perfumery and cosmetics, packaging safety, products for children, toys and light industry products are now in affect. Until the end of 2012, the regulation regarding requirements of automotive and aviation gasoline, diesel and marine fuel, jet fuel and heating oil will become valid as well. As a result, all products that are in compliance with the requirements of the relevant Technical Regulations may freely circulate within the territory of the Customs Union, meaning that manufacturers and vendors will be obliged just once to carry out product conformity assessment without the need of conducting conformity assessment for every new target country. There is a transition period before the Technical Regulations become effective.

  • PPEs, toys, packaging and products intended for children and teenagers — Feb 2014.

  • Perfumery and cosmetic products and light industry products — July 2014.

Six new controls came in June–July 2012. New controls coming in until 2015.


New Electronic C99 for IPR/ PCC returns

If you use Inward Processing Relief or Processing Under Customs Control under the Simplified procedure (ie you do not have a specific IPR authorisation number) then you must report the re-export/disposal of IPR goods by sending a C99 (Bill of Discharge) to HMRC at Enniskillen. Please note that this form has changed and is now an electronic version. The old C99 is not to be used. Effective September 2012.


Laos to join WTO

The terms of Laos’ membership to the World Trade Organisation were agreed by the countries negotiating with the least-developed nation on 28 September 2012, and have now gone for approval by all 157 current WTO members in the General Council (26 October 2012). Membership is due in 2013.

Czech Republic suggests VAT increase

The Czech Republic has announced that it is considering raising the standard VAT rate by 1% from 20% to 21% in 2013. There will also be a rise of 1% in the reduced VAT rate to 15%.

Italian VAT to increase

Italian VAT is expected to increase from 21% to 23% in July 2013. There will also be a rise in the reduced VAT rate, currently 10%.

September 2012


Russia joins WTO

In December 2011, the General Council paved the way for Russia’s membership in the World Trade Organization (WTO) by approving its accession package. Russia has now become the 156th member of the WTO. Signed 21 July 2012, accession date 22 August 2012.

August 2012


New UK EUU forms

The UK Export Control Organisation (ECO) has issued two new End-User Undertaking (EUU) forms, which must be used immediately. The existing EUU has also been revised to remove any reference to goods being held in stock and a new Stockist Undertaking has been introduced. This is effective as of 31 July 2012. Old EUU forms will be permitted until the end of October 2012.

EU FTA with Colombia and Peru

The EU has signed a Free Trade Agreement (FTA) with Colombia and Peru, which “creates a stable framework to boost trade and investment between the EU and the Andean region”. The trade agreement, once fully implemented, will eliminate tariffs and relieve EU exporters of €270 million in duties annually. For example, it is worth over €33 million of tariff reductions for the automotive and car parts sector, around €16 million for chemicals and over €60 million for textiles. Other noticeable tariff reductions will be on pharmaceutical and telecommunication products. Signed 27 June 2012, expected by latest January 2013.

EU signs agreement with Central America

EU and Central America (Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua and Panama) signed a comprehensive Association Agreement that also includes an ambitious trade component. The agreement consists of three pillars: political dialogue, co-operation and trade. The provisions relating to the free trade area will enter into force at the end of this year, or the beginning of next year at the latest. The agreement as a whole will enter into force as soon as it is ratified by all parties. Signed end of June 2012, trade agreement expected January 2013.

Technical Regulations: Russia/Belarus/Kazakhstan Customs Union

It has been announced that the scope of products that are to conform to Technical Regulations (TRs) in the Customs Union of Russia, Belarus and Kazakhstan will be increased. This is an on-going programme until 2015. On 1 June 2012, the first of eight TRs for 2012 was in place, covering personal protective equipment. On 1 July 2012, TRs came into force for packaging, low voltage equipment, toys, cosmetic and perfume products, products for children and adolescents, and light industry products. Until the end of 2012, the regulation regarding requirements of automotive and aviation gasoline, diesel and marine fuel, jet fuel and heating oil will become valid as well.


Russia to become a member of WTO

In December 2011, the General Council paved the way for Russia’s membership in the World Trade Organization (WTO) by approving its accession package. Russia has to ratify the deal and will become the 156th member of the WTO 30 days after ratification. Revised date: Signed 21 July 2012, accession due 22 August 2012.

July 2012


Iran sanctions

The Export Control Organisation (ECO) has introduced a new legislative Order covering the Sanctions currently in place on Iran. The Export Control (Iran Sanctions) Order 2012 (SI 2012/1243) provides for offences and penalties in relation to certain restrictive measures against Iran imposed by the EU by Council Regulation (EU) 264/2012 and Council Regulation (EU) 267/2012 (which amends Regulation (EU) 359/2011). It revokes the previous Export Control (Iran) Order 2011 (SI 2011/1297) and came into force on 1 June 2012. The new order is published on the Government’s legislative database: http://www.legislation.gov.uk.

New OGEL EU/USA Defence Treaty

A new Open General Export Control Licence (OGEL) covering licensable exports under the US–UK Defence Trade Co-operation Treaty (DTCT) was issued by the Export Control Organisation (ECO) of the Department for Business, Innovation and Skills in May 2012. The Treaty formally came into force in both countries on 13 April 2012. The OGEL permits the export or transfer of specified military goods or technology under the DTCT from the UK to the USA. Only members of the “Approved Community” can use this OGEL and the ultimate end-user of the goods or technology must be the US or UK Government. If you are not already on the Approved Community list but are interested in using this OGEL, contact the ECO.

New EU Dual-Use List

The EU has adopted a new Regulation which amends the existing EU Dual-Use Regulation (Council Regulation 428/2009). This legislation amends Annex I of the EU Dual-Use Regulation (also referred to as the EU Dual-Use List) and is directly applicable across all EU Member States. Anyone trading in dual-use (high tech) material, products or technology must check the new regulations. Some goods will cease to be controlled and some new items have been added. This new legislation is Regulation (EU) No 388/2012 of the European Parliament and of the Council of 19 April 2012 amending Council Regulation (EC) No 428/2009 setting up a Community regime for the control of exports, transfer, brokering and transit of dual-use items. The new list comes into force 30 days after publication on 15 June 2012. UK Open General Export Licences applicable to dual-use shipments will be amended.

TIR-EPD in Russia

The International Road Transport Union (IRU) has successfully implemented its TIR (Transports Internationaux Routiers) Electronic Pre-Declaration (TIR-EPD) IT application in Russia. This allowed it to meet the new Customs Union legal requirements between Belarus, Kazakhstan and Russia for the electronic submission of advance cargo information to enter into force in June 2012, as well as in Ukraine.

This deployment of TIR-EPD to Russia and Ukraine, bringing the total number of countries where TIR-EPD is operational to 21, will considerably enhance security and simplify border crossing procedures for trade by international road transport between Europe and Asia, the IRU said. All TIR Carnet Holders can now submit electronic TIR pre-declarations both to the Russian and Ukrainian Customs authorities free of charge through TIR-EPD, saving transport operators time and money during border crossings. It also allows Russian Customs authorities to perform risk assessment measures far in advance of a truck’s arrival at the border.

Cargo notification

In line with a Decision issued by the Customs Union of Belarus, Russia and Kazakhstan with the intention of improving the customs control of imported goods and to speed up the clearing process at the border, a preliminary cargo declaration must be submitted to the customs authorities for all goods arriving by a road (motor vehicle) two hours prior to their arrival at the customs office of entry (as of June 2012). The declaration must contain full information on the parties involved, ie the consignor, consignee, declarant and freight forwarder, as well as the means of transportation and the cargo.

Technical Regulations Russia/ Belarus/ Kazakhstan Customs Union

It has been announced that the scope of products that are to conform to Technical Regulations (TRs) in the Customs Union of Russia, Belarus and Kazakhstan will be increased. This is an on-going programme until 2015. On 1 June 2012, the first of eight TRs were put in place, covering personal protective equipment. On 1 July 2012, TRs came into force for packaging, low voltage equipment, toys, cosmetic and perfume products, products for children and adolescents and light industry products. Until the end of 2012, the regulation regarding requirements of automotive and aviation gasoline, diesel and marine fuel, jet fuel and heating oil will become valid as well.

EU–Ukraine Free-Trade Agreement

The EU and Ukraine have agreed to complete the process of final technical revision of this agreement to create a free-trade area, within the broader framework of the association agreement initialled on 30 March 2012. The 160-page long association agreement and the 1100-page text on the economic and commercial chapter have gone for legal verification and translation — which could take several months — prior to the signing of the agreement by the council and the European Parliament, then ratification by Member States. Expected August 2012.


EU–India Free Trade Agreement

During the recent India–EU Summit, the two sides agreed to expedite discussions to conclude the pact, which aims to slash duties on over 90% of the trade under the pact. Due September 2012.

Netherlands suggests VAT increase

The Netherlands has announced that from October 2012 the standard VAT rate will rise by 2% from 19% to 21%. The VAT rate on theatre and concert tickets will change from the standard rate to a reduced rate of 6%. In 2008, the Netherlands announced a 1% VAT rise to 20%, but it was pulled as the financial crisis broke.

EU Late Payment Regulations

The EU Late Payment Regulations came into force on 15 March 2011 but each country has until 16 March 2013 to implement its provisions; at that point the old Directive will be officially repealed. It is at each country's discretion whether contracts concluded prior to 16 March 2013 are covered by the new rules.

June 2012


New Syria sanctions

The EU adopted new restrictive measures against Syria as set out in Council Decision 2012/122/CFSP and implemented by Council Regulation (EU) No 168/2012. The Department for Business, Innovation, and Skills has responded with a UK order to provide for enforcement of those aspects falling under its jurisdiction. The new measure is the Export Control (Sanctions) and (Miscellaneous Amendments) Order 2012 (SI 2012 No. 810), which came into force on 5 April 2012, and includes the following.

  • Prohibition on the trade of gold, precious metals, and diamonds.

  • Asset freeze on the Central Bank of Syria.

  • Ban on cargo flights operated by Syrian carriers.

  • Additional names on sanctions list of persons and entities subject to restrictive measures.

Learn more in the original Notice to Exporters 2012/15.

NCTS extended to Croatia and Turkey

The EU has agreed to extend the New Computer Transit System (NCTS) to include movements to and from Croatia and Turkey. The NCTS procedure is an electronic tracking and tracing system introduced in 2005 to provide Common Transit control on the movement of goods between the 27 EU Member States and the EFTA countries (Iceland, Norway, Liechtenstein, and Switzerland). Effective 1 July 2012.

New Russian Customs Code

The renewed Customs Code of the Customs Union will come into force on 1 January 2013. The Eurasian Economic Commission has already taken over some authority and is now acting within its competence to revise decisions of the Customs Union Commission, making changes and additions, and passing new documents in the form of resolutions of the councils and the board.


Singapore: change in export procedure

Singapore Customs has issued a circular and a media release on the Implementation of Advance Export Declaration (AED) for all exports. The administrative exemption (IE Notice No. 2/76) that allows for declarations of non-controlled goods and non-dutiable goods by air and sea to be submitted within three days of export will be rescinded. Beginning 1 April 2013, declarations for all exports must be submitted prior to export.


Amended UK Customs Public Notices

The following Customs Public Notices have been revised and updated.

  • Notice 112 Attendance and charges by HM Revenue & Customs.

  • Notice 112A Attendance at private premises by HM Revenue & Customs.

  • Notice 199 Imported Goods: Customs procedures and Customs debt.

  • Notice 221A Inward Processing Relief Simplified Procedures.

  • Notice 266 Rejected imports: repayment or remission of duty and VAT.

  • Notice 275 Export Procedures.

  • VAT Notice 700 The VAT Guide Supplement to Notice 700/1 and 700/11 New VAT registration and deregistration thresholds effective from 1 April 2012.

  • Notice 760 Customs Freight Simplified Procedures.

  • Notice 812 Preferential Trade — Turkey.

  • Notice 827 European Community Preferences: export procedures.

They are available in the Library section of the HM Revenue & Customs website.

Chile–Malaysia FTA

On 18 April, the Free Trade Agreement (FTA) between Chile and Malaysia entered into force. Director General of International Economic Relations (DIRECON), Rodrigo Contreras, said: "From now on, 98.6% of Chilean products will enter duty free to Malaysia, for example fresh fruits, while from Malaysia to Chile 95% of total exports products will enter with zero tariff, including tropical fruits."

Montenegro new WTO member

On 29 April 2012, the World Trade Organization (WTO) welcomed Montenegro as its 154th member. Note, Montenegro is not the 155th member, as originally planned, as Vanuatu did not formally arrange the domestic ratification of its Accession Package and its membership is currently suspended.

US–Colombia FTA

The Free Trade Agreement with Colombia came into effect on 15 May 2012, boosting the prospect of US exports to the Andean nation. The agreement had been pending for several years before the Obama administration submitted it to Congress, which ratified it last year.

Malaysia–Australia FTA

Malaysia and Australia trade ministers have reaffirmed a joint commitment made by Prime Ministers Datuk Seri Najib Razak and Julia Gillard to conclude a Free Trade Agreement. The International Trade and Industry Minister, Datuk Mustapa Mohamed, told reporters "we hope to complete the FTA talks with Australia … and sign it in May". Both ministers are confident the FTA will elevate the bilateral trade and investment relations to a new level, and build further on the achievements of the Asean–Australia–New Zealand Free Trade Agreement (AANZFTA).

May 2012


New sanctions for Iran

The Council of the European Union adopted a new regulation implementing restrictive measures on Iran, set out in Council Decision 2010/413/CFSP. There are significant changes, including further controls on finance and importing from Iran, so exports must check out the Notices issued by the Department for Business, Innovation and Skills (BIS). Notices 2012/18 and 2012/19 apply and are effective from March 2012.

MSS Reports — an increase in costs

As you are probably aware, you can purchase from HM Revenue & Customs a monthly list of your export and/or import shipments. This is known as the Management Support Service (MSS) and there is an annual fee per type of report. We have received notification from HMRC that the annual basic charges for a single standard report will increase from £17 per calendar month to £20 plus VAT. With the rate of VAT at 20% the total annual cost of a single standard report will rise to £288. The cost of non-standard reports has also increased. No action by customers is necessary at this stage. Customers will be contacted directly by HMRC as part of the annual renewals process. Effective from 1 May 2012.

New regulations: cosmetics to Russia

A new Technical Regulation on the safety of cosmetic products will come into force on 1 July 2012, and will be applicable within the Customs Union of Russia, Belarus and Kazakhstan. Access to the Russian market should be simplified as, with this new regulation, the number of required documents will be reduced. For cosmetic manufacturers and exporters, the Technical Regulation TR TC 009/2011, approved on 23 September 2011 by CU Commission’s Decree 799, provides a double advantage: harmonising Russian regulation with the regulation in force in the EU and ending "the dual compliance system". All cosmetics categories are now grouped under a single document. As with the EU, the definition of cosmetics and the lists of regulated ingredients are almost identical. This is effective from 1 July 2012.


New issues Notice 221A

Customs Notice 221A, covering IPR under simplified (at the time of import) approvals, has been amended. This does not affect anyone with a specific IPR authorisation approval obtained on Form C&E810 The significant changes are as follows.

  • Extensions beyond six months will only be granted in exceptional circumstances.

  • Some goods cannot be entered under Simplified IPR. These are Chapter 93 of the Tariff — Arms and ammunition parts and accessories and Chapter 97 of the Tariff — Works of art, collectors' pieces and antiques. This is mainly because the items in these Chapters may require a licence.

  • Goods with a valuation in excess of £500,000 can only be entered to IPR under a specific/local authorisation.


Defence Trade Co-operation Treaty UK–USA

The Defence Trade Co-operation Treaty between the USA and the UK has come into effect. This Treaty is a result of the close, longstanding relationship between the two countries. Hillary Rodham Clinton said: “It will help American and British troops get the best technology in the fastest way possible so they can continue to defend our interests and protect our national security around the world.” It is effective from 13 April 2012.

April 2012


Updates from UK ECO

The UK Export Control Organisation has issued three new notices to Exporters in February 2012.

  1. Amendment to OGEL (International Non-Proliferation Regime Decontrols: Dual-Use Items).

  2. Announcement of Suspension Mechanism for processing of licence applications in countries experiencing a sharp deterioration in security or stability.

  3. UK Response to the EU Green Paper on Export Licensing conditions across the Member States.

UCC instead of MCC

In the wake of the delays to the implementation of the EU Modernised Customs Code (MCC) — published in Official Journal of the European Communities No L145 on 4 June 2008 as Regulation (EC) No 450/2008 of the European Parliament and of the Council of 23 April 2008 — it became evident, following discussions, that amendments were necessary to make the MCC compliant and address issues raised/identified through development of the Implementing Procedures (MCCIPs). The re-cast of the MCC, now known as the Union Customs Code (UCC), has recently been published (20 February 2012) on the European Commission website, and is entitled “Proposal laying down the UCC”.

Update to dual-use regulations

The European Commission (EC) issued, in March 2012, an update to the EC Regulations regarding dual-use items. The update shows the measures taken by Member States to implement the controls of export, transfer, brokering and transit of dual-use items according to Articles 5, 6, 8, 9, 10, 17 and 22 of Council Regulation (EC) No 428/2009. Included in this document is a table that shows each Member State and whether it has taken measures to extend these regulations and notified the Commission of these measures. It also details how each Member State has decided to implement these regulations. This will be very helpful to any company planning to conduct business within the EU. For a copy, e-mail croner@strongandherd.co.uk.


India bans export of cotton

The Directorate General of Foreign Trade has issued a notification banning exports of all grades of cotton with immediate effect (as from 5 March 2012). The Indian Government announced the ban to protect its domestic market amid worries about a supply crunch.

EU Investigation into household ceramic imports from China

The European Commission has launched an investigation into allegations that Chinese tableware and kitchenware is being “dumped” in the EU, ie sold by Chinese exporters at prices lower than those charged in their home market.

If the investigation proves dumping, additional customs duties will be imposed on affected product, in the form of Anti-Dumping Duty (ADD). The rate of ADD will vary from one supplier to another, depending on the levels of dumping established by the investigation. It affects:

  • tableware and kitchenware of porcelain and china classified to 6911 1000 00, and

  • ceramic tableware, kitchenware, other household articles and toilet articles other than of porcelain and china.

An investigation has started and is awaiting further announcements.


USA–South Korea FTA

Nearly five years after its original signing, the long-debated US–Korea free trade agreement (FTA) entered into force on 15 March, despite continued sparring in Seoul at both the public and political levels. This follows months of technical-level talks between South Korean and US officials to review each side’s laws and regulations.

EU–India FTA

The EU and India have advanced negotiations on their FTA, which is expected to be finalised by the end of 2012. The agreement, once complete, is expected to boost bilateral trade leading to increased international business expansion opportunities for both European and Indian companies. Future updates are due June 2012.