Customs Archives | Page 14 of 20

UK and EU customs border changes

Apr 17, 2024 | 4PL, Customs, EU, MVT, Sea, Supply Chain

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.

The Carbon Border Adjustment Mechanism

Apr 17, 2024 | Customs, Environment, EU, MVT, Technology

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 dumping fears growing

Feb 21, 2024 | 4PL, Automotive, China, Customs, Economics, EU, International Trade, Retail

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.

New Developing Countries Trading Scheme

Jan 10, 2024 | 4PL, Customs, Economics, International Trade, Supply Chain, Technology

The UK government launched a new preferential trading scheme, The Developing Countries Trading Scheme (DCTS) last year, to provide tariff concessions for developing countries exporting to the UK market.

The DCTS replaces the Generalised Scheme of Preferences (GSP) and extends tariff cuts to hundreds of products, including clothes and food, from specified developing countries, as part of the UK government’s efforts to replace similar EU schemes.

Like GSP, DCTS has three tiers of countries. On the first tier are LDCs; the second tier consists of countries classified by the World Bank as a low-income (LICs) or lower-middle income countries (LMICs); and the third tier includes countries that are economically vulnerable LICs or LMICs due to a lack of export diversification.

An expanded cumulation for LDCs, means they can have extended cumulation with other DCTS countries and countries with Economic Partnership Agreements with the UK and reduces trade barriers for LDCs in regional and global supply chains serving the UK.

The DCTS offers developing countries a simpler and more generous set of trading preferences and simplifies rules such as rules of origin, which dictate what proportion of a product must be made in its country of origin and removes some seasonal tariffs, in a bid to reduce red tape and lower costs, as an incentive to firms to import more goods from developing countries.

An additional 156 products are eligible for tariff reductions and more than 85% of eligible goods now benefit from zero-rated tariffs and the renaming of preference tiers from GSP to DCTS aligns with the UK's offerings in each tier, to reflect the progression of countries as their economies grow:

DCTS Comprehensive Preferences (previously GSP LDC Framework)
DCTS Enhanced Preferences (previously GSP Enhanced Framework)
DCTS Standard Preferences (previously GSP General Framework)

Under the comprehensive preference, 46 LDCs will get zero tariff facilities on all products except arms and ammunition, which means that LDC countries like Bangladesh will enjoy zero-duty tariff lines for its products until it graduates to the next level.

After graduation from LDC, Bangladesh may be entitled to an enhanced preference regime as it is an "economically vulnerable" country based on the absence of export diversification criteria.

Furthermore, the DCTS will allow qualifying countries like Bangladesh to access global supply chains for importing raw materials from 95 countries to export their final products to the UK duty-free under regional cumulation.

Bangladesh can also utilise the benefits of extended cumulation with UK-DCTS and UK-EPAs (UK-Pacific economic partnership agreement with 95 countries). Cumulation with the UK, British Overseas Territories, EU, Norway, Switzerland, and group 2 countries (for intra-regional cumulation: SAARC countries except the Maldives and Afghanistan) — and in such a case, Bangladesh's tariff rates in the UK under EPA will apply.

For such cumulation, the country must follow minimum processing rules to count as originating. For inter-regional cumulation, culminating with group 1 countries (Cambodia, Indonesia, Laos, Myanmar, and the Philippines — with Vietnam's FTA soon excluding it), a case-by-case application is needed.

DCTS is a bit more liberal than that of the EU GSP+. Under the EU's draft GSP proposal for 2024–34, Bangladesh's apparel products may face safeguard measures when the share of relevant products exceeds both 6% of total EU imports of those products as well as the product graduation threshold during that year.

Under the new agreement, access to the enhanced preferences is based purely on the economic vulnerability of LICs and LMICs, which is considered to be a more generous approach, with eight countries becoming immediately eligible for enhanced preferences.

The DCTS retains power to suspend any country that violates human rights or labour rights, including violations in relation to anti-corruption, climate change and environmental conventions.

Overall, the DCTS offers more generous benefits than the existing GSP and any business currently utilising GSP should review the application of the DCTS frameworks.

Our CuDoS customs brokerage platform is optimised continuously, in line with HMRC regime changes, automating and submitting customs declarations, for simple and compliant preference processing.

To discuss your trading strategy, access to preferential tariffs and documentary requirements please EMAIL our customs expert, Andy Fitchett, who can talk you through your opportunities and options.