The Duty Deferment Account is the most widely used model of payment for customs procedures that is in place in the UK. It is a solution that can significantly streamline the movement of both goods and cash when transporting overseas.
On 29 August 2023, the UK government announced the Final Border Target Operating Model or, in other words, a strategy to introduce a new approach aimed at enhancing security during importation. The new approach includes screening of all imports and sanitary and phytosanitary inspections for live animals, animal products, plants and plant products at the border.
After leaving the European Union on 1 January 2021, the UK introduced restrictive measures related to hygiene and phytosanitary (SPS) controls at its borders. The aim was to supervise the import of animals, plants and derived products. However, from the end of October 2023, phytosanitary controls will be stepped up. It is crucial that importers and exporters prepare for the new import rules, which will take effect later this year. It is worth ensuring that all partners in the supply chain are properly oriented and prepared for the potential changes regarding imported goods from the European Union to the UK. In the summer of 2023, TOM risk categories will become available for products coming from outside the European Union. For plants and their derivatives, this information will be available on the UK Plant Health Information Portal, known as the UK Plant Health Information Portal.
Border clearance should be carried out in the fastest and most efficient way, and this can be done by using end-to-end customs clearance. By opting for this solution, we engage a single agent who handles both the process of exporting goods from the country of origin and importing them into the destination country. The agent responsible for exporting the goods informs his counterpart at the destination of the planned shipment and provides all the necessary documents. This practice prevents scenarios in which the customs agent at the destination would be required to await the dispatch of documentation. This method effectively mitigates border delays that could arise from the absence of necessary documents.
Returned Goods Relief (RGR) is a customs procedure that allows goods to be imported back into the country without incurring duties or taxes, provided certain conditions are met. It is designed to facilitate the re-importation of goods that have previously been exported from the country, either temporarily or permanently.
Incoterms (International Commercial Terms) are widely recognized regulations that govern the sale of goods, including aspects such as insurance, product condition, and liability. They provide a standardized framework for transporting and selling goods internationally, helping to streamline the application of relevant laws.
Customs Freight Simplified Procedures (CFSP) is a system of simplified customs procedures for the carriage of goods. CFSP is used in the European Union (EU) and allows businesses to benefit from simplified customs procedures, leading to faster and more efficient movement of goods across borders.
Goods arriving and passing through the service must be given a price in order to be traded in the destination country. But how do you determine this? During customs clearance, in addition to the correct classification of the goods, it is necessary to correctly value them and estimate their customs debt.
TRACES, or Trade Control and Expert System, is a system to control and determine for what purpose and how products of animal origin move between countries. This system has been used by the veterinary authorities of the European Union Member States since 1 January 2005. For non-EU countries, the TRACES system is the basis by which we can transport livestock within the UK. Everything is done electronically, so there is no unnecessary paperwork or waste of paper.
If you are planning to relocate to the UK, there is a solution to help you avoid paying extra taxes when transporting your belongings. This is through TOR 1 residency transfer, which is an allowance that allows you to move your goods to the UK more cheaply.
There is a noteworthy development in the UK's customs clearance system, which is transforming the process of exporting goods. So far, the CHIEF system has been utilized for this purpose, but a new export system has been introduced. On December 15, HMRC announced that the implementation of the new system for exporting goods from the UK will be postponed. This is to ensure sufficient time for proper testing and optimization of IT solutions for the new system in collaboration with industry partners. The complete transition to the Custom Declaration Service (CDS) will take place by November 30, 2023. Following this date, all goods will be exported using the new system. HMRC has released approximate dates for the upcoming changes in the system.
In the UK, there are presently two categories of ports: inventory-linked and non-inventory-linked. Each type of port has distinct protocols and prerequisites. Therefore, to ensure smooth transportation of goods, it is vital to determine in advance which category of port our goods will be cleared into since not all ports adhere to the same regulations. There are two alternatives available: employing the GVMS system or choosing an inventory-linked port.
For the proper marking of customs procedures, a corresponding system was created to collect their codes in one place. The customs procedure code, first of all, specifies for what purpose the goods are being imported or exported. It also depicts what processes your shipment will go through and what required taxes will be collected during the execution of transportation. In order not to lose out on the smoothness of the transportation of goods, which can be caused by too long and complicated customs clearance, it is necessary to use the appropriate customs procedure codes, which are generally accepted. Thus, the appropriate code allows you to identify the purpose for which you intend to import or export goods. This system is designed to increase the speed of the entire procedure. It was primarily intended to simplify the difficult and often incomprehensible customs procedure. Customs procedure codes are used to identify them more efficiently.
What exactly is a HS code?
In 1988, the World Customs Organization incorporated a new solution, which was the introduction of appropriate markings for transported products. It was then that the Harmonized Commodity Description and Coding System (in short, HS- Harmonized System) came into effect. Without proper classification, it would not be possible to transport them. Thanks to this, there are no major problems establishing trade cooperation, even with countries from the farthest corners of the earth. This is because the customs codes used are similar for all countries. The HS code also governs what customs duties, restrictions, and exemptions are available for a particular product. Without the right designation for a commodity, its import or export can be significantly delayed.
NCTS is, in a nutshell, a computerized system that allows the submission of common transit declarations. NCTS, or New Computer Transit System, is present throughout the European Union, and is based primarily on customs declarations made electronically. Its main objectives were to increase efficiency and effectiveness during transit procedures. The system also prevents possible fraud, and secures goods that are in transit. All member countries are required to switch to version 5 of NCTS by the end of November 2023. The latest version of NCTS 5 introduces a number of changes that European Union member states should comply with.
Britain's exit from the European Union has dramatically affected imports and exports from the remaining member countries. When it comes to transporting livestock, major changes have also been noted. Therefore, instead of the existing EU TRACES system, a new solution - Import of products, animals, food and feed system, called IPAFFS was presented. It is used for the transportation of goods such as animals, food products, plants, animal products, biological products, high-risk non-animal foods, and complex food products. Thus, in addition to the usual import declaration, an IPAFFS will be required when transporting the above products.
With the UK leaving the European Union, HMRS has established a brand new system that significantly improves the transportation of goods. GVMS, or Goods Vehicle Movement System, is a system that helps with transportation between the European Union and the UK and Northern Ireland. It is designed to streamline all border crossing procedures and is linked to pre-loading declarations(pre-lodge).
What is customs procedure 42?
With Customs Procedure 42, a company can be exempt from paying VAT on the transportation of goods, provided that it meets several necessary conditions. Nevertheless, it should be remembered here that we are still obliged to pay customs duty. Procedure 42 has its main application when a businessman wants to bring goods from a third country to the European Union with the help of another EU member country. It should be noted that all these countries must belong to the community. Its main purpose is primarily to streamline all customs formalities for importing VAT-taxable entities by allowing the use of VAT exemption. The exemption is used when importing as well as supplying within the European Union. This allows the operator to avoid cash expenses.
Britain's withdrawal from the European Union has been a rather controversial topic. People feared significant changes that would affect most aspects of their existing lives. Fortunately, a solution was put in place to prevent unnecessary complications. Brexit itself was introduced on February 1, 2020. In order to avoid changes in the existing system regarding trade, it was therefore necessary, to introduce a special regulation on this issue.
UK-registered companies that were involved in importing goods have started a new system called VAT deferral. It was introduced on January 1, 2021. This is the result of a major change, which was the exit of the UK from the European Union. In the broadest terms, PVA is the way VAT is calculated after Brexit.
Before the end of the transition period on December 31, 2020, a special trade agreement was concluded between the UK and the European Union. However, the deferred VAT system was to be introduced regardless of whether the agreement had been signed.
Cumulation occurs when countries share production and jointly comply with the ROO provisions. This allows for products which are produced entirely in one country or substantially transformed to be considered as originating in that country, even though this deviates from the core concept of origin
Global supply chains are heavily relied upon in the manufacturing process, with component sourcing and processing taking place across many countries. When two or more countries have agreed to follow the same ROO principles within a free trade agreement, if one country's product is further processed in another country that falls under the agreement, then it can be considered as originating from the final production country.
If you want to move goods into or out of Great Britain, you will need an Economic Operator Registration and Identification (EORI) number. HMRC uses this number to identify your business and track your exports and imports.
You'll need an EORI number if you want to trade with the UK after Brexit. If you don't have one, don't worry - you can apply for one now, even if you're not planning on using it immediately.
Exporting or transporting animal by-products, including bones and protein.
If you want to export or move animal by-products (ABPs) such as bones and protein, there are some steps you need to follow. In most cases, you will need an Export Health Certificate (EHC) or Model Declaration Form. However, there are some types of ABP that cannot be exported and situations where a certificate is not required.
The certifier invoices the government for these costs; therefore, companies do not have to pay for certification out of pocket as part of the Movement Assistance Scheme.
Rough diamonds export
You need a certificate to export rough diamonds. If you try to import or export them outside of the Kimberley Process (KP) Certification Scheme, law enforcement could seize your merchandise. The KP regulates global trade in Rough Diamonds.
If you plan on international transport of your rough diamonds, you will need to obtain a KP certificate. Exchanges of rough diamonds after January 1st, 2021 - the UK's Independence Day - have new rules for those within Great Britain and the European Union. If you find yourself transporting rough diamonds between these two areas, know that you will need a UK KP certificate in hand before exporting them into an EU country. You can apply for this document by contacting the Government Diamond Office via their website (linked below).
How do you determine the origin of goods?
The first thing you need to do is figure out what good is being traded. The World Customs Organization has a comprehensive list that classifies every product based on tariff headings. Each product has its own code, which falls into different categories.
After the good is classified, we need to find its "economic nationality" instead of just the country it originate from. This means figuring out how much value the product has and where most of work in making it was done (as described below under "sufficient value-added").
Submission of a preference application using a statement of origin.
Statement of origin.
An importer may use the “statement of origin” prepared by an exporter to claim preferences. An exporter is obliged by the law to publish “statement of origin” on an invoice or other document, including commercial document which describes originating product in sufficient detail to enable it to be identified. The statement or document may be submitted in electronic form.
What are rules of origin?
Simply put, rules of origin are criteria used to determine the country of origin of a good. This is crucial for trade purposes because it can determine whether duties should be paid on a good when it is imported into another country.
Under the UK-EU trade agreement, rules of origin will be used to determine whether goods imported into the UK from the EU qualify for preferential treatment. This means they may be exempt from paying customs duties or may qualify for reduced tariffs.
To claim preferential treatment, companies will have to prove that their goods meet the relevant rules of origin. In most cases, this will require a certificate of origin from the exporting country.
The Customs Handling of Import and Export Freight (CHIEF) System will be closed.
HMRC will close the Customs Handling of Import and Export Freight (CHIEF) system.
The Customs Declaration Service (CDS) will be the standardised customs platform.
HMRC warns - Switch to the new Customs Declaration System now or risk "significant delays" on imports.
HMRC sent correspondence to many companies informing them of the new British Customs Declaration Service (CDS) system. If you do not act quickly, your customs broker may not be able to file declarations, which will result in delays in receiving the goods for your company.