Broadside Customs Clearance Agency, Customs Procedures and Terminology

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Anti-Dumping Duty (ADD)

The EEC may increase the duty rate for a specific product from a given country if it feels that its’ home market can not compete fairly. If they consider one manufacturer in an overseas market is trading too cheaply in relation to others from the same country, they use Anti-Dumping duty to compensate. By checking the tariff book the agent can assess if the exporter’s name has been specifically listed with a higher duty rate. This can often be significantly higher than the standard duty rate so agents must take particular care to avoid an underpayment. It can also be used to target just one country. The normal 10 digit commodity code is supplemented with a extra 4 digit number. (Public Notice 376)

Antiques

You may bring antiques into the UK free of duty and at a reduced rate of VAT.
A certificate of antiquity signed by the exporter is usually required, confirming that the antiques are over 100 years old.
(Public Notice 362)

ATA Carnet

For goods travelling temporarily overseas to a third country for an exhibition, and subsequent return. An ATA carnet is ideal where several exhibitions are arranged in different countries over a period of time, as the carnet has a book of vouchers that can be stamped by customs for each country that you pass through.

The Chamber of Commerce can help an exporter acquire one of these. A basic carnet charge is payable and security must be paid based on the destination and the commodity involved.

Goods travelling to an exhibition overseas would be a typical case for raising an ATA Carnet since the document secures the goods and acts as an import and export entry, minimising paperwork at each border crossing, avoiding the need to pay customs duties overseas or on return to the UK. To claim back the security paid on the ATA carnet at export, the document must be returned to the issuant along with the goods covered by the document within an agreed time frame. See also Third Country.
(Public Notice 104)

Binding Tariff Information (BTI)

The most secure way to classify (obtain a commodity code for) your products.
The commodity code will determine any duties that are payable and the need for licences and restrictions, so it is important to classify your goods correctly at the start.

Customs can only give verbal, non binding advice to an importer of the phone.
This can cause an importer distress should two separate customs officers differ on the classification of their goods.
If you apply to HM Customs at Southend, submitting satisfactory evidence of your product they will issue you with BTI ruling on the commodity code.
You can then pass this information onto your clearing agent who will use this when declaring the goods to customs on all future entries.
The BTI ruling number should be quoted on all entries to avoid any confusion.
Once issued, any customs office in the UK or within the EEC, will not contest the ruling. See also Classifying your imports and exports.
(Tel HM Customs Southend on 01702 366077)

Cars and Motor Vehicles (Privately Owned)

The rules are much the same as for Personal Effects (see below) except that is more than one form that the importer must sign and send to their clearing agent:-
C384 - Private Motor Vehicle-Application for release on payment of Customs Duty and VAT as applicable (if the forms below do not apply)
C104A - Import of a Private Motor Vehicle into the UK or transfer of residence from Outside the European Community
C104F - Temporary Importation of a Motor Vehicle for Private Use from outside the European Community
C179B - Re-Importation of an Unaccompanied Private Motor Vehicle from outside The European Community
If you have any difficulty in obtaining these forms and wish to use our services, then call Alastair at Broadside on 01394 286200 and I will send them out to you).
Alternatively, you can print these forms from the Customs website www.hmce.gov.uk
(Public Notice 3)

Cars and Motor Vehicles (Commercial)

Some collectable cars are eligible to be imported duty free and at a reduced VAT rate of 5% subject to acceptance by Southend Customs. The importer must apply for a BTI ruling on each individual car to achieve this.
(Contact HMC&E at Southend 01702 366077 or 367266)

Customs Freight Simplified Procedures (CFSP)

Customs Freight Simplified Procedures provides importers with a variety of simplified import and warehouse removal schemes. Prior authorisation and good record keeping is required. The container is cleared at the port with no duty/VAT payable, and travels to your customs approved premises. At this point you have 20 days to decide how you want to enter your cargo, e.g. for home use, warehousing etc. Once the cargo is cleared from stock, the tax point is set and will determine when duty and VAT will become payable.
CFSP accelerates clearance at the port and can improve an importer’s cash flow.
(See public notices 759/760 and 761)

Classifying Your Imports and Exports ( HS Commodity Codes)

‘You, as the importer or exporter, are legally responsible for the correct Tariff classification of your goods. This applies even if you employ an agent to handle your customs entries on your behalf’ This comes from Public notice 600, page 4.
It is surprising how few importers and exporters are aware of this.
Again it highlights the need for an agent to be qualified in this field, to reduce
the client’s liability to Customs when errors are made. (Public Notice 600)

Chemicals ( INNS)

Many chemicals fall under the List of International Non-Propriety Names (also known
as the INNS), which is provided for pharmaceutical substances by the World Health
Organisation, which are free of duty.
If your agent is unaware of this list they may inadvertently pay the full rate of duty on the product, when an override of customs duty would have been permissible. Pharmaceuticals can qualify for this if they have a CAS RN (chemical abstracts service registry number) and the international non-proprietary names (INNs) .
(Phone the Customs Helpline for clarification on 0845 0109000)

Deferment

If you are an importer and do not yet have a deferment approval number, then applying for one will defer payment of customs duties on cleared cargo until the 15th of the following month. Deferment numbers require a banker’s guarantee. The alternative is to raise a banker’s draft at the time of importation. .
Needless to say, it also reduces the work involved with bank drafts, whilst improving your cash-flow. See also SIVA.
(Public Notice 101)

Duty Suspension

Some goods are eligible to duty suspension in their own right, but the customs clearance agent must be aware of this so that the entry is coded correctly. Failure to do so will result in duty being paid when it was not necessary. This is subject to the commodity code, and the goods conforming to any restrictions imposed by the suspension.

EFTA (or the European Free Trade Association

This group comprises Iceland, Norway, Switzerland and Lichtenstein.
When goods are imported (or exported) to or from these countries, provided an EUR
certificate has been issued by the exporting country, then a preferential rate of duty may be claimed.

End Use

Aircraft parts are a common form of end-use relief. A product used on the ground may incur a positive duty rate, but if the same product was used on an aircraft making international flights it would be exempt from duty as it’s ‘end-use’ will be on the aircraft. Likewise with slate intended for use in pencils.
(Public Notice 770)

Enhanced Remote Transit Sheds (ERTS)

These are warehouses that have applied for and been granted E.R.T.S. status by their local Customs office. You must be able to provide satisfactory control records and provide adequate security as you will be holding cargo that has not yet cleared customs. You will need to have access to the customs computer to create a manifest so that outside agents can arrange clearance of your stock.

Broadside has worked with ERTS sheds that do not handle customs clearances directly to provide a continuity of service to their customers.

Exhibition

For products temporarily imported into the UK for an exhibition, there is a procedure that will allow duty reclaim after export.
(Public Note 200) See also ATA Carnet.

Free Circulation

Goods of wholly Customs Union origin (including components parts), or goods imported into the Union on which all the import formalities have been completed,
and all the duty due has been paid and not repaid in whole or part.

Generalised System of Preferences (GSP)

A large group of developing countries that may receive preferential duty rates within the EC providing that the exporting country has issued a GSP Form A.
If the country and commodity qualify then a reduced or nil rate of duty may apply. The GSP group is very large and comprises sub-groups such as the LDDC (Least Developed Developing Countries) which, as they are poorer than standard GSP countries, are more likely to obtain a nil rate of duty when accompanied by a GSP.

Import Declarations or Customs Entries (C88)

When goods are imported into the UK it is the responsibility of the importer or his authorised agent to declare them to Customs. If the cargo is required to be brought into home use, then all customs duties must be paid to HM Customs and Excise before release is granted. (Public Notice 702)

IPR (Inward Process Relief)

If goods are imported for a process and then intended to be exported within 6 months, then IPR may relieve duty and VAT, as long as all the components are exported within this time. This is called IPR Suspension. Where doubt occurs duty is often paid under IPR Drawback and reclaimed upon export. A process can involve such things as cleaning, checking, labelling, adjusting, repairing etc. Repetitive IPR imports require an authorisation number from the local Customs Station. (Public Notice 221)

NES (New Export System)

A computerised export declaration system for all exports that leave the EEC.
(Public Notice 276)

OPR (Outward Process Relief)

The reverse of IPR in that the process occurs overseas and is then re-imported into the UK. (Public Notice 235)

PEACH System (Conformity Certificates)

Specified fresh fruit and vegetables require a Conformity Certificate before they can be imported into the UK from outside the EEC. These forms are normally arranged by the importer (or their agent) through DEFRA (Department for Environment Food and Rural Affairs). You can apply for certificates on the internet using DEFRA’s PEACH System. If you are intending to import fresh fruit or vegetable produce then you may want to check DEFRA’s website to see how this affects you. www.peach.defra.gov.uk

Personal Effects

Generally speaking, as long as the goods have been owned and used for 6 months, and the owner has lived abroad for the last 12 months, then effects may be imported duty and VAT free. All imports of this nature require a C3 document to be signed by the person importing the effects. A packing list, showing the contents of all cases, must also be signed by the importer. It is always recommended that cigarettes and alcohol are consumed overseas before returning home as these are not eligible to relief and the excise rate on both can be rather high. So party before you leave!
If you have any difficulty in obtaining these forms call Alastair at Broadside on 01394 286200 and I will send them to you and process them on your behalf.
For importing cars, see Cars and Motor Vehicles (Privately Owned).
(Public Notice 3)

Quota

Some cargo may be eligible to a quota outright with no country criteria required. Others, providing they have proof of origin, may be eligible to a reduced or nil rate of duty. (Public Notice 375)

Removals (UK and T1)

If a container is removed from a port to an Inland Clearance Depot then a UK-T1 is required. A Full Community T1 is used when goods that are not in free circulation are required to move from one EEC country to another. Both removals require the clearance agent to put up a special bond and to take direct liability to pay the potential duties should they not discharge. For this reason they tend to be more costly.

Returned Containers and Packaging

Can be re-imported duty/VAT free if they have had duty/VAT paid on a previous importation or were of UK origin to begin with. See also Free Circulation
(Public Notice 236)

Returned Goods Relief (RGR)

If you have proof of export (copy export sales invoice or certificate of shipment/ Bill of Lading) and the goods are being returned within 3 years, there is usually no problem in claiming duty relief. For VAT relief the goods must have been retained in ownership of the UK exporter whilst overseas (goods for hire would be one example).
(Public Notice 236)

Standard Import Values (SIVs)

Also known as the Entry Price System, it is a valuation method for fresh fruit and vegetables. It is based on a variable ECU rate (which can daily), and is multiplied by the net weight divided by 100kgs to achieve an acceptable value for customs purposes. Importers are not required to produce commercial invoices. Under this system fresh produce cannot be entered to customs until after arrival in the UK.

Should the importer prefer to use the ’ad valorem’ method (see SPV below), then security must be lodged with customs for the difference in duty, should the customs value falls below the SIV rate.
(Public Notice 252)

Simplified Import VAT Accounting (SIVA)

This new scheme commences on the 1st December 2003. It allows holders of a SIVA deferment guarantee to operate a 0% deferment guarantee for Import VAT purposes only. Import duty would still require a bank guaranteed deferment account.
This system can release much needed capital for an importer or clearing agent.
(See Customs website www.hmce.gov.uk or phone HM Customs on 0845 010 9000)

SPV (Simplified Procedure Values)

A valuation system of predetermined prices per 100kgs for fresh fruit and vegetable produce.

Similar to SIV (see above) except that with this system, the rate changes every second Friday. Whereas the SIV system is rated in ECU’s, the SPV method uses Pounds Sterling per 100kgs. Importers are free to use the ‘ad valorem’ method (based on commercial sale of the goods, i.e. ‘by value’), but if at any time they elect to use the SPV method then they are expected to use this scheme for a product for a full calendar year. If after a full year you then choose to go back to the ‘ad valorem’ system, then you can not revert back to using SPV during the remainder of that year.

You can not change from SIV to SPV as the two systems never operate on the same product at the same time. However, one particular product of fruit or vegetable may be eligible for both systems at different times of the year. Your clearing agent will have access to the customs computer to keep them informed of these changes.
(Public Notice 252)

Temporary Imports

Certain temporary imports are allowed into the UK free of duty and/or VAT subject to their prescribed use. (Public Notice 200)

Third Country

A country or place outside the Customs Union

TIR Carnet

TIR stands for ‘Transport Internationale Routiers’ or for you and me, International Road Transport. It is similar in some ways to the ATA Carnet except that goods can only be transported within the EU and security is taken, not against the goods, but against the means of transport containing them. For this reason only approved organisations may operate under TIR. In the UK the only two that are approved for TIR transportation are, the Freight Transport Association (FTA) and the Road Haulage Association (RHA). The unit will be seal checked at each border to ensure the contents have not been tampered with. Tilt Trailers cannot have tears in their covering. (see Public Notice 464)

Transhipment

If cargo is intended to tranship from one vessel to another in the UK, and the cargo is not required for processing (see IPR) then a transhipment entry can be raised.
.
Should your cargo require re-consolidation into another container/trailer before re-export, be careful to ensure that your re-consolidation address is Customs approved.
If not, you will need to liase with the local Customs control office to arrange attendance during the re-consolidation. Transhipments cost more than a normal entry as a secured guarantee is required to move them and will deem the holder liable to pay customs duties for any un-exported cargo.

Triangulation

Is the exportation of goods from one Customs Union (such as France) to a third country (such as the USA), followed by their re-importation to another Customs
Union country (such as Great Britain). As triangulation has occurred here
(involving two EEC countries and one Third Country), the Customs in the UK will require an Information Sheet INF3 issued by French Customs, if Returned Goods Relief is to be claimed.

VAT Payable In another EEC Country (Duty paid in the UK)

If cargo is bound for export to another EEC country after importation, provided that you have the VAT number and agreement of the EEC importer, you may defer VAT payment. Therefore duty is paid in the UK and VAT will be suspended for payment. This is known as ‘Goods entered for Free Circulation without payment of any VAT for zero rated onward supply to another EC member state’. (Public Notice 702/7)

Variable Charge Levy (VCL)

Is an additional charge imposed on flour and sugar (and their derivatives), and requires a four digit code to be added to the end of the standard ten digit commodity code.
The four digit code is based on the four percentages by weight of:
1) the starch glucose
2) sucrose/invert sugar/isoglucose
3) milk fat
4) milk protein

The higher the sugar content for example, the higher the VCL that will be payable.
VCL is determined by the net weight of the product and not by value.

Warehouse Entries

Often used when an importer does not want to pay duty/VAT on imported cargo as they have too much stock already. Although the client will incur RH&D, a handover fee and rent charges for this facility, it is often financially favourable when goods are warehoused for a long period of time. The importer does not have to pay the duty/VAT at the time of importation and the quay rent/demurrage on the dock is often more than that applied at the warehouse.
This system is also used when preference documents/licences are not available at first import, but if the problem is short-term then warehousing is often more expensive.
Lastly, it can be used when a quota expires in one year, and the goods are warehoused until say the 1st January when the quota is expected to be re-instated.
(Public Notice 232)

The above Public Notices can be viewed on-line under Customs website
www.hmce.gov.uk (Then select ‘Forms & Publications’ icon, top right of screen)
Then choose Catalogue of publications section.

If there is a customs procedure or terminology not listed above that you would like added to our website, please e-mail, Alastair on broadside.web@btconnect.com and we will try to include it next time.