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 email@example.com.