Shipping Ex Works, and the VAT number

29 May 2012

Please will you comment on the following sales situation we have agreed to? We are selling from the UK Ex Works to a Danish company, which will send its freight forwarder to collect the goods and the goods will be shipped out of the EU direct to the Danish company’s customer. We understand that the export presentation in the UK is going to be made in the Danish company’s name, against the Danish EORI (Economic Operator Registered Identification) number. We will receive a copy of the UK export presentation but will not be named on this or the transport documents. As the goods are leaving the UK/EU we assume that we don’t have to charge VAT or report anything on Intrastat or the EC Sales List. We have the Danish Company’s VAT number, which is on the sales invoice. Can you suggest anything else we might need?

Exporting military equipment

29 May 2012

We’ve recently been concerned that some of the products we are exporting may require an export licence as we have some orders concerning military contracts. We have called in a consultant to help and they have told us to classify the goods in line with the tariff commodity codes; if we need a licence this will show in the tariff. However, a freight company we use believes this isn’t correct. Can you help?

Proof of preference origin

29 May 2012

We have a contract to supply equipment to a customer in South Korea. We have been advised that exporters will not be able to issue EUR1 certificates as proof of preference origin and that we now have to be “approved” exporters to issue proof of preference origin where the value is £5700 or more. We are interested in applying for this status and have obtained an application form (C1454) to complete, but we are somewhat confused by it. The full commodity code for our goods begins 8479 (machinery). The value of the contract is approximately €1.8 million euro (of which 1 million will be shipped from the UK) and we will be making between 10 and 20 shipments per annum. We import the material from India and the EU but manufacture the finished machine in the UK. Do we meet the conditions of the preferential origin? Can we state we are the manufacturer of the goods? We will hold evidence of the origin of the bought-in goods but are not sure what they mean by “supplier declarations”. Hopefully you can sketch out an “idiot’s guide” on understanding this issue.

Returning repaired goods FOC

29 May 2012

Can you confirm if a zero value commercial invoice is acceptable for repaired goods being returned free of charge (FOC) to a customer in the USA? Our commercial department was under the impression that the commercial invoice had to show the customs value of the goods being shipped, even if there was no charge to the customer. However, our US customer has advised us of the following: “Please note that the true value of the commercial invoice is the repair cost of each unit … not the value of the end item. Under the US valuation rules, an article manufactured by you in the UK sent for repair under warranty (at no cost to the US buyer) at the time of re-entry into the US has duty assessed upon the value of the repair. The fact that the repair is under warranty is irrelevant to Customs.”

Following IPR instructions

29 May 2012

As you have probably been told many times, some agents are unable to follow clear IPR (Inward Processing Relief) instructions on customer paperwork, and choose to ship under the Customs Procedure Code (CPC) 1000001 (Standard Export Procedure). I have had two freight forwarding agents tell me now that the customs form C81 (request to amend an export entry) can no longer be used for CPC Code change. They say there is no longer a requirement for an export entry to be changed when the error has been spotted and highlighted as part of our control process, and our records are updated accordingly. Is this true? I can’t believe customs have given freight agents a “get out of jail free” card. This really isn’t going to improve their vigilance and accuracy with paperwork. Please could you confirm that all I have to do is show evidence in my file of the agents’ errors for any future customs audit and, if so, should I keep a log of the affected files? Do I need to notify our Customs control office? Your advice would be appreciated.

CPD Carnet

9 May 2012

I was asked recently about obtaining a CPD carnet. I am familiar with the ATA (Admission temporaire) Carnet procedure, administered by the local Chamber of Commerce, which we use for our sales people visiting certain countries for demonstration purposes. It enables them to enter and leave the country without having to pay import duty and tax and, providing they get the carnet stamped when entering and leaving the country, then there are no penalties incurred. All that is fine but CPD carnets mean nothing to me. Can you help?

Commodity Code numbers

9 May 2012

My line manager called me in this morning and announced that he was making me responsible for the accuracy of all the Commodity Code numbers (otherwise known as Tariff numbers) and also the rating of any products that might fall under the Dual-Use Export Control list. He looked as if he was conveying some kind of compliment on me or a tribute to the care I would give to such a task. During the course of the day, I have given this considerable thought and discussed it with a couple of friends who, like me, are supply chain staff, responsible for documentation, transportation and compliance with both export and import regulations. This has led me to the belief that this action by my manager is misguided. Without me telling you my exact concerns, would you comment please?

Preferential goods and the direct transport rule

9 May 2012

We have goods held in a customs warehouse in the Netherlands which were manufactured in China. We are only storing the goods in the Netherlands and have not changed them in any way. An order has been received from Pakistan and our customer has asked if we can provide a Certificate of Origin to support a claim at import of the lower duty rate that is applicable under the China/Pakistan trade agreement. Is this possible?

The EUR 1 form

9 May 2012

We have branched out a bit in terms of export destinations and we would like a word of advice from you after we had a response from a South African company who we had quoted. Their response to our quote included a statement saying: “Consignment must be accompanied by a EUR 1 form. We cannot import these goods into South Africa without that document accompanying the goods.” I have never come across this before so I would like your help, please.

Trading with Iran

9 May 2012

There is a discussion taking place in the company as to whether we should quote when we receive an enquiry from Iran. We know it is not totally forbidden to trade with Iran but clearly the sanctions are biting hard and the new currency sanctions may make it difficult to get paid. My feeling is that it is not worth the risk. Would you like to comment?