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 ian.worth@thecustomspractice.com.

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 ian.worth@thecustomspractice.com

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 ian.worth@thecustomspractice.com 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@thecustomspractice.com

The Customs Practice has learnt that a temporary suspension of customs duties will apply to imports from Pakistan of a range of products, predominantly textiles and clothing, from 15 November.  We understand that duties will be eliminated from 75 separate commodity codes, until 31 December 2013, although final details have yet to be published.  This measure is intended to assist Pakistan’s recovery from the effects of the flooding of 2010.

We would welcome contact from importers of yarns, fabrics, garments and footwear, of textiles and leather, from Pakistan, so that we can update as soon as more information becomes available.  Please contact us on 01635 521 624, or by email to ian.worth@thecustomspractice.com

During 2011, over £28 billion in duty and import VAT was paid in the UK using deferment accounts.  That means that the remaining importers are still paying around £20 billion a year at the time of import, without taking advantage of additional cash flow available to those with deferment accounts.  If you don’t yet have a deferment account, or are unsure of the benefits, then call us on 01635 521624 – we can probably help.

September update

Here is a summary of some of the key news items and developments over the last month.  Please note this is not intended to be exhaustive, nor is it intended to be used as definitive advice upon which you may rely in making decisions of importance to your business.  If you would like more detail about any item, please call The Customs Practice on +44 (0) 1635 521624, or email ian.worth@thecustomspractice.com

Anti-dumping duties (ADD)

Ceramic tableware from China: the investigation into alleged dumping is continuing.  We expect to have news by mid-October on whether provisional anti-dumping duty will be imposed by its target date of 16 November.

Aluminium Foil from China: provisional ADD has now been imposed on aluminium foil from China, ranging from 13% to 35.4%.  Importers may wish to consider whether this additional cost might be mitigated – give us a call, we have some ideas.

Bicycles from China:  an investigation has been initiated into possible circumvention of ADD on Chinese bicycles, consigned from Indonesia, Malaysia, Sri Lanka and Tunisia.   During the investigation, shipments from these countries are subject to registration so that if the investigation concludes that circumvention of anti-dumping measures has taken place, the Commission can collect appropriate levels of ADD.

Organic coated steel products from China:  provisional ADD has been imposed on a range of flat-rolled coated steel products, in Chapter 72.  ADD rates range from 13.2% to 57.8%, which represents a significant increase in cost for importers of these products.

There are also continuing investigations into Chinese manufacturers of solar panels and telecommunications products, as well as US investigations into Chinese manufacturers of automotive parts.

UK Customs U-turn on IPR drawback

Drawback is a version of Inward Processing Relief whereby imported goods are declared to IPR with a simultaneous declaration to free circulation.  In this way, customs duty is paid at time of import, then is reclaimed following export of compensating products, subject to the conditions of the processor’s authorisation. 

Over the past couple of years, UK Customs have refused new applications for IPR drawback, on the basis that drawback was not envisaged by the Modernised Customs Code, even though the MCC had not been enacted.  Now, the MCC is to be redrafted as the Union Customs Code, and could take several years before it can be a) finalised and then b) enacted by its Implementing Regulation.  This means that the original Customs Code and its Implementing Regulation remain in force – this includes provision for IPR drawback.  Consequently, Customs have advised that they will accept new applications for drawback, and extend current authorisations up to 31 December 2014.  This deadline may be extended depending on progress towards implementation of the UCC.

We would like to hear from any businesses which have had applications or renewals for IPR drawback rejected, or who simply would like to know more about whether IPR drawback could benefit them.

Ex-works sales for export

Customs have issued clarification - CIP (12)47, that where goods are sold to a non-EU buyer for export under ex-works terms,

1. an agent making the export declaration must do so under indirect representation, and
2. the declared consignor (box2) must be the EU contracting party, with the non EU buyer being shown in box 44.

There are some exceptions – in the UK an instructed agent can make an export declaration under direct representation, but this must be authorised in writing by the UK seller.  Also, care is needed to ensure any export declarations comply with the requirements of, for example, inward processing relief. 

If you have regular export shipments under ex-works terms, we can help to ensure your related processes are compliant with customs requirements, and that any agents used are instructed appropriately.

Duty deferment guarantees

For those who have existing deferment guarantees, when was the last time you looked at whether they are efficient and appropriate for your business?  We can review their efficiency and, in many cases can source an alternative, cheaper guarantee solution.

Unable to obtain a bank guarantee?  Whatever the obstacle preventing you from obtaining a bank guarantee – give us a call.  We may be able to help you get around the obstacle and then you can  start reaping the benefits of a duty deferment account.

Compliance checking service

Do you have the time to undertake post-entry checks on the accuracy of your customs declarations?  Most importers don’t have the resource to do this, and consequently the first time any checks are undertaken are during a Customs audit.  This can (and does!) often result in an unexpected demand for underpaid customs duty, going back up to 3 years.  Regular compliance checks of import entries  not only give some comfort that declarations have been correct, but they also enable timely corrections where necessary, which helps to ensure that duty has not been underdeclared, or overdeclared.  If you don’t have the resource to carry out these checks, then please ask about our compliance checking service.

And finally…..

A recent success story.  The Customs Practice was approached by a business which had been found to be using rebated fuel (red diesel) in two of its vehicles.  Customs issued a demand to the business for almost £22,000, plus penalties.  After detailed analysis of the business records, we were able to secure a reduction of the demand to just over £300, and withdrawal of the penalties.

The message here is that if your business receives a demand from Customs, please don’t assume that it cannot be successfully challenged.  We are here to help.

UK Customs permit importers to defer payment of their customs duty and import VAT liabilities until the 15th of the month following physical import. 

What does this mean?

This enables goods to be cleared and delivered without being delayed pending payment.  A deferment account is set up with Customs, subject to an agreed maximum limit – usually this is sufficient to cover a full month’s customs duty and import VAT liability.  No interest is charged by Customs, so in effect an importer obtains up to six weeks of positive cash flow.

A deferment account is a prerequisite for customs warehousing, which opens much greater opportunities for substantial cash flow benefits, as well as hard savings, and is also extremely useful for administration of duty relief regimes, by extending the point at which customs duty and import VAT becomes payable to its absolute maximum.  These benefits cannot be fully exploited without a deferment account.

However, Customs require security, in the form of a guarantee.  The guarantee must be sufficient to cover two months of liability, because the limit in month two could be reached before payment is collected from month one.  In most cases, guarantees are provided by banks, but are subject to conditions imposed by the banks – in some cases this can mean a restriction on borrowing, or a requirement for a cash deposit equal to the guarantee amount.  For many businesses, this restricts working capital, which renders a deferment account unviable.

The Customs Practice can help

There is, however, an alternative.  One which provides sufficient security to obtain a deferment account and does not restrict working capital.  It is based on a risk assessment and can be attractive to importers who cannot obtain a cost-effective bank guarantee.

So, if you don’t currently have a deferment account, perhaps because the cost of a guarantee has been prohibitive; or if you would like to review your current deferment arrangements, please call us on 01635 521624 or by e-mail to ian.worth@thecustomspractice.com.