December 12th, 2012


An interesting article appeared on the BBC News website yesterday, about a case in which a UK importer evaded customs duty on garlic by declaring it as ginger (

The importer was convicted to 6 years imprisonment, which demonstrates the severity of punishment for deliberately declaring an incorrect tariff classification.  The motive for the importer’s actions were clearly to evade payment of the high amounts of duty applicable to garlic, however, there is a serious message here for all importers, not just those who set out to deliberately evade duty.  Any misclassification at import may be investigated by Customs, even if a genuinely innocent mistake with no intent to evade customs duty.  The consequences of a Customs investigation are, at best, a time-consuming disruption to business and at worst can lead to a custodial sentence.

So, how can a responsible business ensure they are not unwittingly exposed to a potentially damaging investigation?

The first step is to implement robust procedures which set out how an importer determines the accuracy of all data declared to Customs on an import entry.  The next step is to ensure those procedures are followed as part of routine business practice.

The Customs Practice can help to implement appropriate procedures, but if the worst has already happened and Customs are launching an investigation into alleged misdeclarations, then please call us urgently on 01635 521624.

For ceramic tableware and kitchenware products currently en route to the EU from China, it is important that importers are aware they will be charged anti dumping duty at 58.8% on the full customs value of the shipment, unless they take steps immediately to ensure they are able to claim a lower rate when the shipment arrives.  This will require cooperation from the supplier, which we can help to manage through our Hong Kong alliance.  If you have shipments on the way and need help to ensure that you don’t pay any more anti dumping duty than absolutely necessary, please get in touch – we can help.

Following on from the immediate issues of dealing with shipments currently on the water, the imposition of anti dumping duty on ceramic tableware and kitchenware from China has sharpened the focus of many importers on customs duty planning.  This is where a detailed analysis of the supply chain can often result in a restructuring of certain elements, in such a way that reduces the final duty cost on import into the EU. 

Customs duty planning involves close examination of the product itself, its value build-up and its origin, in order that the end result becomes the lowest possible duty payment.  Done correctly, we ensure that such planning is also compliant with Customs legislation, including ADD measures.  We are currently working on one case where we expect to reduce the value on which customs duty is charged by almost 40% - this will eliminate the effect of 58.8% ADD on current pricing!  Another client is restructuring certain elements of his manufacturing process, which will not only eliminate ADD, but it also reduces other supply chain costs. 

For any suppliers whose products are subject to 58.8% ADD, this is the time to implement effective customs duty planning, so that a robust case can be made for review when the current provisional ADD measure becomes definitive, expected to be 16 May 2013.  Importers buying from these suppliers should be putting pressure on them to undertake customs duty planning now, with a view to applying for a reduced individual ADD rate next May.

For many businesses, there will still be an increase in total duty costs, for a wide range of reasons which might prevent efficient customs duty planning.  This means a substantial increase in physical payments at point of import.  For those importers using deferment accounts, it is likely they will need to increase their deferment guarantee, which could also increase restrictions imposed by the banks on working capital.  Importers who don’t currently have a deferment account should consider getting one – it means you don’t have to find immediate cash to have your goods cleared through Customs.  If you are having difficulty in increasing your deferment guarantee, or even in getting one in the first place then come and talk to us – we have an alternative solution.

Every supply chain is different, so there is no “one size fits all” solution that everybody can just plug in.  Call us for an independent consultation, on 01635 521624, or email to

The European Commission has today (15 November) published a Regulation 1072/2012 imposing provisional ADD on imports of ceramic tableware and kitchenware from China, wef tomorrow. Rates of ADD range from 17.6% to 31.2% for specific named companies; 26.6% for 386 co-operating companies (all named in the Regulation), and 58.8% for all other companies in China not specifically named in the Regulation.

The Commission has imposed provisional ADD, despite a majority vote against imposition by the Commission's Anti Dumping advisory committee.

This means a significant increase in cost for EU importers, unless viable alternative sources can be found. The chances of a reversal of the decision may depend on the strength of lobbying activity over the next few months, however, given the Commission's willingness to ignore the vote of its own advisory committee, we should expect ADD to become definitive in 6 months time.

This link is to the Regulation, however, I am aware that many outside the EU will be unable to access, so if anybody needs confirmation of the ADD rate for a specific company please contact me at
The following message has just been received by The Customs Practice from the British Retail Consortium, and is consistent with information we have received from other sources…

You have probably heard lots of rumours about this case over the last week or so, but I have now heard from a number of reliable sources that the Commission will impose provisional anti-dumping duties on imports of ceramic tableware and kitchenware from China.  The deadline for the imposition of duties is 16 November. The measures will be published in the
Official Journal no later than 15 November.

The information in the OJ will also include the list of companies that will receive individual duty rates, together with the relevant
rate for each company.

This is obviously deeply disappointing news, particularly as a majority of EU member states voted against the Commission’s
proposal.  It is also frustrating that the Commission refused to reveal its intentions until 3 days before the deadline for the imposition of the duties.

This is not the end of the story.  The Commission will continue with its investigation and will need to make recommendations next year on “definitive” measures for this case.  The BRC will remain active in lobbying against measures, and we shall focus our efforts on making sure that the majority of member states who voted against the measure at the provisional stage do so again at the definitive stage, when their decision will be binding upon the Commission.

What can be done now?

We strongly recommend that all importers should contact their suppliers in China and establish what rate of ADD will apply. 

Any supplier whose goods will be subject to the countrywide rate (58.8%) or to the co-operating exporter rate (26.6%), in other words any supplier who does not have an individual rate, has not had his pricing structure investigated and therefore may be subject to a disproportionately high rate of ADD.  Similarly, new suppliers who were not eligible to participate in the initial investigation will be subject to the countrywide rate, without having had any opportunity to demonstrate the extent to which their own pricing structure may be defensible against dumping allegations.

The opportunity for these suppliers to request an individual review will arise when definitive ADD is imposed, expected to be in May 2013, however, the preparation for submission of well-argued requests for review should start as soon as possible, in order that they have the best possible chance of securing ADD rates lower than the default rates

We can help your suppliers to construct a comprehensive and fully supported application for review, but we need you to point your suppliers in our direction.

At the time of writing, the Commission has still not published the necessary regulation to impose provisional ADD, but we will advise further when this happens.  If you have any questions please contact us on 01635 521 624 or by email to
Further to our earlier news items on 3 and 8 October, we can now report that the European Commission has today (14 November) published a regulation which suspends the duty rates on import to the EU for a range of products originating in Pakistan. The measure takes effect from tomorrow (15 November) and will remain in force until 31st December 2013, at which time it will be decided whether to terminate the suspension, or to continue it.

This means that products including certain yarns, fabrics and textile garments will be free of customs duty, providing they meet specific origin criteria.  Other products, including undenatured ethyl alcohol, certain articles of leather and other yarns, fabrics, garments and footwear will also be free of duty but subject to quota limits.

Importers wishing to check whether their imports may be eligible for this duty suspension can contact us on 01635 521 624, or by email to

The Customs Practice has learnt that proposals are under consideration by the Commission for the introduction of an autonomous duty suspension (zero duty rate) on most flat panel display monitors, currently subject to duty at 14%.

It is anticipated that subject to approval, this measure could come into effect in April 2013, however, we understand it will not be applied retrospectively.  Importers of flat screen monitors are invited to get in touch – we may be able to help achieve this duty saving even before the necessary Regulation takes effect. 

For more information please call on 01635 521624, or email

At this morning’s meeting of the Anti-dumping Committee, the Commission’s proposals for Anti-dumping duties on imports for ceramic tableware and kitchenware were voted against by at least 14 of the 27 EU Member States.  At this stage, we can regard this as good news, although the optimism should be tempered as the Committee’s vote is not binding on the Commission, which can still go ahead and impose provisional duties.

An Anti dumping Committee vote against proposed measures is extremely rare, so it is a little unclear what steps the Commission will now take – they could drop the case completely, ignore the vote and impose provisional ADD anyway, or seek to agree amended proposals. 

We are monitoring developments closely, and will update further as soon as we have more clarity.

Further to previous updates on this subject, The Customs Practice has now learnt that the following proposals will be put before the Commission’s Anti-Dumping Committee on 23 October, for approval to implement provisional ADD on 16 November.  These proposals relate to imports of ceramic tableware and kitchenware from China.

·         Individual ADD rates between 17.7% and 31.2% to be applied to imports from 10 specific Chinese producers;

·         A rate of 26.6% to be applied to imports from around 400 companies which have co-operated in the investigation;

·         A residual rate of 58.8% to be applied to all remaining suppliers.

Please note, this is the proposal which will be considered by the Anti Dumping Committee – it is still subject to vote, so cannot be regarded as finalised at this stage (we are aware of lobbying activity, which might still impact the voting).

We will post a further update here as more news becomes available, otherwise to discuss further, please call us on 01635 521 624, or email

Why are UK businesses so reluctant to apply for AEO?  Is it simply because they don’t see any benefit, or maybe they are put off by the negative incentives offered by UK Customs? (i.e. failure to obtain AEO status may result in increased delays at clearance etc.).  Could it be that those who have achieved authorisation might be somewhat disillusioned to find that an accreditation which is supposed to demonstrate that they are “trusted” by Customs actually means a much greater level of intrusion by Customs, with audits going to ever deeper levels?  Is it perceived that the cost of professional assistance in managing the application process is out of reach for many businesses?  Or is there simply no incentive, or pressure, from any direction to persuade a UK business to apply?

AEO has been around for about 6 years now, during which time over 10,000 authorisations have been issued throughout the EU.  Of those, almost half have been issued by Germany, yet only 3% have been issued by UK Customs.  It does look increasingly like apathy rules UK where AEO is concerned.  The Customs Practice understands that UK Customs are receiving only four applications each month, which is a poor reflection of our belief that the UK is a major worldwide trading nation – these statistics suggest we are not even a major European trading nation.

So, back to the question of why are UK businesses so reluctant to apply for AEO?  We would like to hear from any businesses which have considered AEO, and then dismissed the idea, for whatever reason.  So please send a very brief email, with a summary of the key reasons to or call me on 01635 521 624.

Following our news item of 3 October, The Customs Practice has now obtained further information about the introduction of duty suspensions for a range of products from Pakistan.

  • A total of 75 separate commodity codes (at 8-digit level) will benefit from duty exemption;
  • Of these, 26 will be subject to quota limits, on a first-come, first-served basis;
  • In all cases, goods must meet GSP rules of origin, and at import must be accompanied by a valid GSP Form A, with specific endorsement making reference to the relevant EU Council Regulation (This has not yet been published, so the final wording of the endorsement cannot be confirmed yet).
  • Claims to the quota preference are likely to be subject to a deposit / guarantee to cover the event that a quota may become exhausted quickly.
  • If imports from Pakistan of any product increases by 25% or more during the period of this measure, the duty exemption will be removed, from such offending products.
  • The measure will expire on 31 December 2013.  The start date of the measure is subject to publication of a Council Regulation, however we expect this to be 15 November 2012.

We have a list of all products affected by this measure.  For further details, please call us on 01635 521 624, or email

    Ian Worth

    Managing Director

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