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Customs Transit: How Can It Help You?

Unlock efficiency in cross-border trade with customs transit. Expedite goods movement while deferring duties and taxes.



Executive Summary

Discover the transformative potential of customs transit in facilitating efficient cross-border trade. This comprehensive guide elucidates the benefits, options, and operational nuances of customs transit, empowering businesses to optimize supply chain operations and enhance competitiveness in the global marketplace.


Table of Contents

1. Introduction

2. Background

3. Main Points

4. Conclusion

5. Recommendations


Introduction

Transit serves as a fiscal facilitation within customs procedures, deferring import declarations and duties until goods reach their final destination. This EU customs procedure is applicable between EU and Common Transit countries, including the UK. Eliminating expenses associated with entering multiple countries under the same customs regime enables checks and customs procedures to occur away from the border, including at "authorised trader" premises.


How transit works

"Transit" is a customs procedure that lowers bureaucracy and its associated expenses. Businesses may employ transit to cross borders or regions without paying the normal fees. Businesses can also use transit to make it easier for goods to move from one Contracting Party to another. However, you do not have to use it.


Below is a scenario exemplifying a Common Transit movement:

- Departure Country: Great Britain (GB)

- Transit Procedure: Goods are placed into transit, suspending duty.

- Transit Member State: France

- Destination Country: Germany

- Process: The goods transit through France, a member state of the Common Transit procedure, without undergoing customs clearance or payment of duties. Upon arrival in Germany, the destination country, duties are paid, and the goods are released into free circulation within the EU.



Transit does not mean friction-free trade

Transit does not entirely exempt all customs processes. Customs declarations are mandatory in both the country of departure and the final destination, excluding transit or the countries transited through en route. For instance, if you are importing goods not yet in circulation in the EU market, such as those imported from the US under duty suspension and subsequently transported to the GB via transit, the customs export declaration would be completed in the originating country rather than in the EU.


Safety & Security (S&S) requirements, like the EU's ENS, must still be met at the borders or territories traversed during transit. For instance, if goods are transported to Bulgaria via Serbia, a standard-EU common transit country, S&S requirements must be fulfilled, though customs declarations are unnecessary. Similarly, transit journeys commencing and concluding within the EU must adhere to S&S requirements when exiting and re-entering the EU customs territory.


Is Transit The Tight Strategy For You?

Businesses constantly seek innovative strategies to gain a competitive edge in the dynamic international trade landscape. One such strategy is customs transit, a streamlined procedure allowing goods to move through common transit countries within Europe with duties and taxes suspended. Businesses can enhance their competitiveness in the global marketplace by harnessing the benefits of customs transit.


Transit is particularly relevant to the EU, where a single customs territory is combined with multiple fiscal territories: goods can move under transit from their point of entry into the EU to the point of their final destination. But also other countries, like the UK or Norway, benefit through the Common Transit Convention (CTC)


At this point, transit has ended, the customs and local fiscal obligations are taken care of, and the goods are released for free circulation or placed under another suspensive customs procedure.


A suspensive procedure can also be ended by placing third-country goods under transit, for example, re-exporting from one customs territory.In an era characterised by rapid globalisation and intricate supply chains, the expedited movement of goods across borders is paramount for businesses seeking to thrive in the competitive landscape.


 Customs transit emerges as a strategic solution, offering a pathway to efficiency and cost savings in cross-border trade.


Benefits of Customs Transit

Customs transit offers a pathway to expedited goods movement and deferred duty payments, enabling businesses to navigate cross-border trade more swiftly and cost-effectively. By leveraging customs transit, companies can move goods by air, rail, road, or sea through common transit countries in Europe and across EU member states, streamlining their supply chain operations and reducing administrative burdens. By leveraging this strategic procedure, companies can streamline their logistics operations and unlock significant benefits, including:


  • Expedited Goods Movement: Transit facilitates the swift movement of goods between common transit countries, enabling businesses to navigate international borders more quickly and efficiently.

  • Deferred Duties and Taxes: Import duties are not required at each border crossing, allowing businesses to defer duty payments until the goods reach their final destination. This deferral of duties can lead to substantial cost savings for firms engaged in cross-border trade.

  • Reduced Administrative Burden: Customs declarations and duties are not required at each border crossing, reducing the administrative burden associated with traditional customs procedures. This streamlined process enhances operational efficiency and minimises bureaucratic hurdles for businesses.

  • Flexibility in Customs Processes: Businesses can complete certain customs processes away from the border, either at designated offices of departure or destination or even at their premises if authorized as consignors or consignees. This flexibility empowers businesses to optimize their supply chain operations and adapt to evolving trade requirements seamlessly.


Transit Options


Option 1: Common Transit Convention

The Common Transit Convention serves as a cornerstone of customs transit in Europe, facilitating the movement of goods among signatory countries without the immediate need for customs declarations or duty payments. As a member of the Convention, the UK ensures seamless transit movements between Great Britain, Northern Ireland, and other common transit countries, offering businesses a streamlined pathway for cross-border trade.


Option 2: Union Transit

Alternatively, Union transit procedures provide a framework for customs transit operations between EU member states, Andorra, and San Marino. Governed by the Union Customs Code, Union transit enables the movement of non-Union goods and Union goods through third countries within the EU, fostering seamless trade flows and facilitating international commerce.


Step-By-Step Guide For Operators of Transit

So what are the steps to undertake to move goods under transit?

These these are:


Are you ready to get started with transit? Explore our step-by-step guide. We cover everything you need to know to get started with transit and implement a compliant transit system. For more details, please contact us to help you with the set-up.


Transit Training

Interested in learning about transit? Book yourself on our transit training or access our pre-recorded training right away.


Conclusion

In conclusion, customs transit emerges as a strategic tool for businesses seeking to enhance their competitiveness in the global marketplace. By leveraging the benefits of customs transit, companies can expedite goods movement, reduce operational costs, and easily navigate regulatory complexities, positioning themselves for success in the ever-evolving landscape of international trade.


Recommendations

If you are ready to embrace customs transit as a strategic enabler for optimizing supply chain operations and gaining a competitive edge in the global marketplace, then:

  • Conduct a thorough assessment of customs transit options to determine the most suitable approach for your business needs.

  • Exploring the transit options that are right for you

  • Invest in staff training and set up transit processes and procedures.

  • Collaborate with regulatory authorities and industry stakeholders to stay abreast of evolving customs regulations and best practices.

  • Book a free call now to discuss your transit needs.

More information and links


Implementing Efficient and Compliant Transit Procedures with our Transit Step-by-Step Guide

 

Understand how to use NCTS for efficient transit movements.

 

Discover all the latest transit updates here.


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