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Importers concerned at cost of Brexit trade checks

May 16, 2024 | , , , , , , ,

Delayed five times by the UK government, post-Brexit physical border checks of animal products, plants and plant products through the Port of Dover and Eurotunnel were finally implemented on the 30th April 2024. However, importers of affected products express concern about additional costs.

The common user charge (CUC) was also introduced on the 30th April for commercial movements of animal products, plants and plant products through the Port of Dover and Eurotunnel.

It covers imports, goods in transit and goods eligible for sanitary and phytosanitary (SPS) checks at a government-run border control post.

The CUC applies to small imports of products such as plants, seeds, fish, salami, sausage, cheese and yoghurt. The flat-rate of £10 or £29 per commodity has been capped at £145, “specifically to help smaller businesses”, Defra said.

Health certificates were introduced in January on EU goods ranging from cut flowers, to fresh produce including meat, fruit and vegetables, but physical checks for the goods came into force two weeks ago.

Physical checks will be based on the “risk” category that goods fall into, so high-risk goods, such as live animals, will be subject to identity and physical checks at the border.

Products that present a medium risk to biosecurity will also be checked, while low-risk goods, such as canned meat will not require any checks.

But businesses, especially smaller companies, have raised concerns that the new checks from the EU could disrupt their supply chains and despite the £145 cap will increase their costs, with one importer interviewed by the BBC, suggesting “the checks would cost his business between £200,000 and £225,000 per year.”

Controls for SPS goods from the rest of the world are long-established and traders are aware of the responsibilities and inherent risk of goods moved from the rest of the world, but the extensions to goods moving from the EU is catching them out.

An additional CUC cost of £29 for a single commodity is minimal, but if you have four trailers carrying five or more commodities arriving every day then you easily add £200,000 plus to your supply chain.

There have been some easements with Customs, which allow fewer inspections and there are processes which can reduce costs, but preparation is key and the correct documentation is critical in ensuring a smoother frontier transition.

Metro are at the forefront of customs brokerage solutions, with our automated CuDoS declaration platform.

We can automate your CHED import notification, on the import of products, animals, food and feed system (IPAFFS) and simplify customs compliance, to safeguard your supply chain and cut costs.

To learn more about CUC or CuDoS, or how we can simplify and automate customs declarations for your business, please EMAIL Andy Fitchett, Brokerage Manager.

Dover truck arrival

UK and EU customs border changes

Apr 17, 2024 | , , , , ,

ICS2 advance filings will be used by EU customs to identify high-risk shipments from the 3rd June, while post-Brexit import charges which come into effect on the 30th April have raised fears of UK food price inflation.

The UK Common User Charge (CUC)
The CUC will apply to each commodity line in a Common Health Entry Document (CHED) and the maximum charge for one CHED will be limited to 5 commodity lines, even if there are more than 5 commodity lines present in the CHED.

The CHED is an import notification, that is submitted on the Import of Products, Animals, Food and Feed System (IPAFFS) to notify authorities in Great Britain about the import, and each commodity line defines a quantity of goods that are entered as a separate item in the CHED.

Delayed by the government five times to give businesses time to prepare and to reduce disruption to supply chains, the CUC will come into effect on the 30th April and applies to imports of products such as fish, salami, sausage, cheese and yoghurt, with the flat-rate of £10 or £29 per commodity, capped at £145.

The Fresh Produce Consortium said the charges would add £200m in costs for the fresh produce sector, at a time it is already struggling with inflation.

CUC rates only apply to goods entering the UK via Eurotunnel or the port of Dover, while the other (circa 30) commercially run entry points will set their own rates.

EU Import Control System 2 (ICS2)
The third release of the European Union’s customs pre-arrival safety and security system, the Import Control System 2 (ICS2), will go live on 3rd June 2024. 

The advanced filing of Entry Summary Declarations (ENS) for deep sea and short sea cargo will still apply to all cargo either discharging or transhipping in the EU, Northern Ireland, or Norway and to cargo remaining on board.

With the new release, the ENS will have to contain more mandatory data elements than today, including Buyer and Seller data, EORI of supplementary declarant in case of multiple filing and data elements such as the 6-digit HS Code with a complete and accurate cargo description. 

We have been sending EU Customs advanced security data in then Entry Summary Declaration (ENS) for years and are continuously developing our CuDoS customs platform and carrier integrations to receive additional data. We will be approaching affected customers with additional information on this process and any additional requirements.

When the ENS information is not provided to EU customs, shipments will be stopped and will not be processed for customs clearance, which will lead to delays and potential fines.

We can guide you on the CUC and ICS2 changes, help you to educate your suppliers and provide full support for all your import and export documentary needs.

Metro are at the forefront of customs brokerage solutions, with our automated CuDoS declaration platform and dedicated team of customs experts, reacting swiftly to any changes in the UK and EU’s trading regimes.

To learn more about CUC or ICS2, or to see how we can simplify and automate customs declarations for your businesses, please EMAIL Andy Fitchett, Brokerage Manager.

factory emissions

The Carbon Border Adjustment Mechanism

Apr 17, 2024 | , , , ,

There are 195 signatories to the Paris Agreement to limit their greenhouse gas (GHG) emissions, though some including the EU and UK have undertaken to cut carbon emissions faster than others.

The EU’s Emissions Trading System (ETS) continuously expands to include new sectors to encourage industrial decarbonisation. However, it also drives carbon prices upwards, which risks carbon leakage if consumers switch from buying EU-produced goods to purchasing substitutes from non-EU countries, that have lower emission requirements.

To combat this, the Carbon Border Adjustment Mechanism (CBAM) came into place on 17th May 2023 and is expected to be fully implemented by 2026. It is designed to counter the risk of carbon leakage by imposing a charge on the embedded carbon content of certain imports that is equal to the charge imposed on domestic goods under the ETS.

The UK CBAM is about a year behind the EU’s version and means that specified goods imported into the UK from countries with a lower or no carbon price will have to pay a levy by 2027.

Like the EU CBAM, unprepared businesses who import or export to the UK could face higher costs and carbon reporting challenges.

The UK CBAM is designed to tackle the most carbon-intensive industrial goods imported to the UK, by putting a price on the carbon footprint of the manufacture of products in the aluminium, cement, ceramics, fertiliser, glass, hydrogen, iron and steel sectors, with a consultation currently determining the precise list of products in the CBAM’s scope.

The consultation launched on 21st March 2024 and seeks views on proposals for the design and administration of CBAM. It is available on this LINK and closes on 13th of June.

The calculation of UK CBAM certificate price will be based on the carbon footprint of imported goods. Companies exporting to the UK will be required to pay a carbon price, reflecting the difference between the carbon price in the country of origin (if applicable) and the UK’s carbon price (which is currently one of the highest of all major trading partners).

The measurement of emissions for UK CBAM reporting is likely to be similar to the EU’s methodology for calculating CBAM emissions and declaring CBAM emissions.

In addition to the upcoming UK CBAM for imported goods, the UK already requires companies to report their carbon information through the Streamlined Energy and Carbon Reporting (SECR) policy.

Our MVT Eco module measures and monitors the emissions of every shipment, by every mode, with offsetting alternatives, so our customers can work towards carbon neutrality in their global supply chain. 

The MVT Eco module incorporates powerful reporting tools, which may be adapted to measure liabilities under the ETS and CBAM regimes.

To request an MVT Eco demo or to discuss any of the issues raised here, please EMAIL our CCO Andrew Smith.

China car factory parking lot

China dumping fears growing

Feb 21, 2024 | , , , , , , ,

The United States is voicing increasing concerns that Chinese manufacturing overcapacity will hit world markets, while the EU launched an anti-dumping investigation into China’s EV industry last year.

Senior US Treasury officials told the Financial Times this week that a visiting US delegation made its concerns clear that Chinese policies are focused on supply and that overcapacity will hit world markets.

The US is most concerned about advanced manufacturing and clean energy sectors such as electric vehicles, solar panels and lithium-ion batteries, while the EU has already launched its own anti-subsidy probe into imports of Chinese electric vehicles.

Chinese brands exported 280,000 vehicles to the EU in the first ten months of last year, with BYD, China’s biggest EV maker, selling 526,400 EVs globally last year. Yet the carmaker wants to increase its sales in Europe to 10% of global volumes by 2030, equal to 800,000 vehicles a year.

Elon Musk has already gone on record to say that China’s EVs are extremely good and that if there are no trade barriers established, they will pretty much demolish most other car companies in the world.

However, exports from China have been affected by RoRo capacity shortages, with BYD among the manufacturers that have commissioned their own RoRo vessels.

The EU launched its anti-subsidy probe into China’s EV industry last year, alongside several other investigations into allegedly unfair Chinese trade practices, including punitive tariffs on imports of plastic for bottles and opening a probe into suspected dumping of biofuel.

China has launched reciprocal anti-dumping investigations and their commerce ministry this month announced plans to support the healthy development of overseas EV expansion, with BYD planning to build an assembly plant in Hungary.

The Chinese point to the fact that the US Inflation Reduction Act makes it cost-prohibitive to import Chinese lithium batteries and EVs, while nearly one-third of Chinese EV exports last year were cars of Elon Musk’s US company Tesla, produced at its factory in Shanghai.

And while US Treasury secretary Janet Yellen is expected to raise Chinese overcapacity with her G20 counterparts when they meet in São Paulo later this month, western manufacturers are facing US pressure to sever links with China following claims of forced labour in its supply chain.

US Customs impounded several thousand new VW vehicles because a Chinese subcomponent is alleged to have been manufactured in breach of forced labour laws.

And while we have seen significant spikes in demand from Thailand and Vietnam, with fashion brands in particular diversifying sourcing, there is still a huge proportion of the global supply chain reliant on China.

While leading global brands including Apple, Samsung, Sony and Adidas have shifted some production out of China, it only represents an incremental shift and it is clear that they are not leaving the region.

We continue to monitor the diversifying growth in production around south-east Asian countries, Latin America and EMEA, to support our customers’ diversification and sourcing strategies.

We have fixed price and long-term global capacity agreements in place with sea and air carrier partners, to support all your sourcing requirements with resilient, consistent and reliable supply chain solutions.

Our cloud-based supply chain management platform, MVT, simplifies global sourcing and vendor management, by making every milestone and participant in the supply chain transparent and controllable, down to individual SKU level.

EMAIL Andrew Smith to review our current freight profile movements to and from China and Asia.

Category: Customs

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