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(S) A Packing List is an essential documentation for import or export clearance. What is involved? If the company does not know what documentation is required, it is important that they at least know where they can find out what their documentary responsibilities and obligations are. What is a packing list? A packing list is a formal document that shows an itemised list of the goods within a shipping package (for identification and tallying purposes). The document will typically state a number of details relating to the shipment, including how they have been physically packed. Who produces this and why? A packing list is produced by the seller primarily for the use of the buyer. Knowing what the goods are and also how they are packing them, helps relevant parties identify how to properly handle them, as it is not uncommon that there is a difference between the people arranging the transportation and the people who physically handle the goods. The information contained within the packing list should correspond with all other documentation relating to the shipment, such as the commercial invoice, a bill of lading or an air waybill. Not only does this help to ensure consistency but it also helps to form part of the audit trail necessary for compliance and of course your own records. A packing list may be required for customs clearance in certain countries, however, if the commercial invoice contains all the specifics usually included within a packing list, then this may suffice. Typical contents of a packing list Whilst this list is not exhaustive, it is indicative of some of the more common information required: The full name, address and contact details of the seller (Referred to as the shipper in trade terms) Where the goods are physically coming from. The full name, address and contact details for the buyer The full name, address and contact details for the delivery point As this may be a different address to the address of the buyer Incoterm Number of packages Type of packaging used such as pallets or boxes The dimensions of each piece The net weight and the gross weight for each piece Quantities of products within each package ‘Marks and Numbers’ The literal markings on the packages. Ordinarily, this would be the delivery address and any relevant job references This can and does often show as ‘Fully Addressed’ A description of the goods, often also showing the relevant commodity codes A reference number to signify the commercial sale with correlates with other shipping documentation, often a ‘sales order number’ or a ‘purchase order number’ An example of what a packing list may look like: Often documents such as packing lists are produced in a standardised format, for ease of reference, however, there generally isn’t a strict format that the document has to appear in. What is more important is that the information included is both accurate and adequate.

(S) Let's zoom in on EU Value Added Tax fundamentals that every business needs to know. Introduction The Value Added Tax, or VAT, in the European Union is a general, broadly based consumption tax assessed on the value added to goods and services. It applies more or less to all goods and services that are bought and sold for use or consumption in the European Union. Thus, goods which are sold for export or services which are sold to customers abroad are normally not subject to VAT. Conversely, imports are taxed to keep the system fair for EU producers so that they can compete on equal terms on the European market with suppliers situated outside the Union. What VAT is Value-added tax is a general tax that applies, in principle, to all commercial activities involving the production and distribution of goods and the provision of services. However, if the annual turnover of this person is less than a certain limit (the threshold), which differs according to the Member State, the person does not have to charge VAT on their sales. a consumption tax because it is borne ultimately by the final consumer. It is not a charge on businesses. charged as a percentage of price, which means that the actual tax burden is visible at each stage in the production and distribution chain. collected fractionally, via a system of partial payments whereby taxable persons (i.e., VAT-registered businesses) deduct from the VAT they have collected the amount of tax they have paid to other taxable persons on purchases for their business activities. This mechanism ensures that the tax is neutral regardless of how many transactions are involved. paid to the revenue authorities by the seller of the goods, who is the "taxable person", but it is actually paid by the buyer to the seller as part of the price. It is thus an indirect tax. Why do all EU countries use VAT? At the time when the European Community was created, the original six EU countries were using different forms of indirect taxation, most of which were cascade taxes. These were multi-stage taxes which were each levied on the actual value of output at each stage of the productive process, making it impossible to determine the real amount of tax actually included in the final price of a particular product. As a consequence, there was always a risk that EU countries would deliberately or accidentally subsidise their exports by overestimating the taxes refundable on exportation. It was evident that if there was ever going to be an efficient, single market in Europe, a neutral and transparent turnover tax system was required which ensured tax neutrality and allowed the exact amount of tax to be rebated at the point of export. As explained in VAT on imports and exports, VAT allows for the certainty that exports there are completely and transparently tax-free. How is it charged? The VAT due on any sale is a percentage of the sale price but from this the taxable person is entitled to deduct all the tax already paid at the preceding stage. Therefore, double taxation is avoided and tax is paid only on the value added at each stage of production and distribution. In this way, as the final price of the product is equal to the sum of the values added at each preceding stage, the final VAT paid is made up of the sum of the VAT paid at each stage. Registered VAT traders are given a number and have to show the VAT charged to customers on invoices. In this way, the customer, if he is a registered trader, knows how much he can deduct in turn and the consumer knows how much tax he has paid on the final product. In this way the correct VAT is paid in stages and to a degree the system is self-policing. Examples Stage 1 A mine sells iron ore to a smelter. The sale is worth €1000 and, if the VAT rate is 20%, the mine charges its customers €1200. It should pay €200 to the treasury, but as it has bought €240 worth of tools in the same accounting period, including €40 VAT, it is only required to pay €160 (€200 less €40) to the treasury. The treasury also receives the €40 and now gets €160 making €200 - which is the correct amount of VAT due on the sale of the iron ore. Supply: €1000 VAT on supply: €200 VAT on purchases: €40 Net VAT to be paid: €160 Stage 2 The smelter has paid €200 VAT to the mine and, say, another €20 VAT on other purchases, such as furniture, stationery, etc. So when the smelter sells €2000 worth of steel it charges €2400 including €400 VAT. The smelter deducts the €220 already paid on his inputs and pays €180 to the treasury. The treasury receives this €180 from the smelter plus €160 from the mine, plus €40 paid by the supplier of tools to the mine, plus €20 paid by the furniture/stationary supplier to the smelter. Supply: €2000 VAT on supply: €400 VAT on purchases: €220 Net VAT to be paid: €180 €180 (paid by the smelter) + €160 (paid by the mine) + €40 (paid by the supplier to the mine) + €20 (paid by the supplier to the smelter) = €400 or the correct amount of VAT on a sale worth €2000. VAT rates EU law only requires that the standard VAT rate must be at least 15% and the reduced rate at least 5% (only for supplies of goods and services referred to in an exhaustive list). Actual rates applied to vary between EU countries and between certain types of products. In addition, certain EU countries have retained other rates for specific products. The most reliable source of information on current VAT rates for a specified product in a particular EU country is that country's VAT authority. An overview of the different rates applied in all EU countries is available. Why are there different VAT rates in the EU? European acts in the field of taxation have to be adopted by unanimity. The current provisions on VAT rates are thus the result of different compromises agreed by all the EU Ministers of Finance. The VAT Directive sets the framework for the VAT rates in the EU, but it gives national governments freedom to set the number and level of rates they choose, subject only to 2 basic rules: Rule 1: The standard rate for all goods and services Rule 2: An EU country can opt to apply one or two reduced rates but only to goods or services listed in the VAT Directive Standard VAT rate This is the rate that EU countries have to apply to all non-exempt goods and services (Article 96 VAT Directive). It must be no less than 15%, but there is no maximum (Article 97 VAT Directive). Reduced rates of VAT EU countries have also the option to apply one or two reduced rates (Article 98(1) VAT Directive which: may be applied to goods or services listed in Annex III of the VAT Directive but not to electronically supplied services (Article 98(2) VAT Directive) must be no less than 5% (Article 99 VAT Directive) Exceptions to the rules – "special rates" of VAT "Special rates" refers to the multiple exceptions to the basic rules. Largely for historical reasons and under certain conditions, many EU countries (in some instances, most of them) have been allowed to depart from these rules for a transitional period, with the objective to allow for the gradual alignment of national laws with the VAT Directive, pending the definitive adoption of agreed VAT arrangements by all EU countries. This enables them to keep "special rates" - reduced rates under 5% (including zero rates) and reduced rates for goods and services other than those listed in the directive (Articles 102-128 VAT Directive). How do the EU countries apply VAT? EU countries implement common rules set in VAT Directive in their national legislation. The practical application and the administrative practices of each EU country therefore vary. Sources: EU Commission Website

(P) There have been key changes in import VAT since 1 July 2021. Find out about the new law and changes B-2-C businesses need to know. Download a presentation, explanatory notes and IOSS contacts. PRESENTATION FOR DOWNLOAD We have created a presentation for you to understand the key changes in a Presentation for you to download. EU Explanatory Notes EU Member States Contacts that deal with IOSS All you need to know about the one-stop-shop (OSS) Currently EU businesses making distance sales of goods from within the EU above a certain threshold (EUR 35 000 or 100 000, depending on the Member State) to buyers located in another EU Member State need to register and pay VAT in the buyers’ Member State. This is very costly and burdensome. From 1 July 2021 new rules enter into force. According to these new rules, below a threshold of EUR 10 000 VAT can be paid to the Member State where the selling business is located. Above this threshold, businesses will be able to easily register in a One-Stop Shop (OSS) – where they can easily declare and pay the VAT due in other Member States. From the EU Commission Englsih German French Spanish

(S) Do you export low-value parcels to Europe? Arne Mielken of Customs Manager says non-EU sellers can use simplifications to accelerate imports. The growth in online shopping has been turbocharged by the global pandemic, with more and more small parcels being exported between the UK and Europe. Until recently, non-EU businesses could sell goods directly to consumers in the European Union (EU) without paying import VAT if the consignment was valued at €22 or below. This has given the UK and other sellers a competitive edge over EU suppliers of similar goods, although the system has been abused by some sellers who under-declare the value of their goods to avoid import VAT. VAT exemption axed But the exemption on low-value consignments was scrapped on 1st July 2021 and since then, all imports are subject to EU VAT, irrespective of their value. Now, you will have to charge your EU customers VAT at the point of sale, rather than pay import VAT, for consignments of €150 or below. Not surprisingly, many UK businesses fear that having to collect and account for this additional VAT will result in even more red tape. Not only will you have to work out what VAT rate to charge customers in different EU countries, but you may also have to adapt your e-commerce payment systems to charge VAT at the point of sale. In some cases, however, you may be able to offload the VAT collection to postal operators, express carriers and customs agents. Import One-Stop-Shop The good news is that you can opt to use the EU's Import One-Stop-Shop (IOSS), which is designed to simplify the reporting and payment of VAT on consignments valued at €150 or less. This should reduce paperwork for many non-EU traders, who won’t have to register for VAT in different EU countries. Those that use it can submit a quarterly return to just one tax authority in one member state and pay your VAT wherever you have registered your IOSS account. Bear in mind, though, that the different VAT rates of the countries where your customers live will still apply, so you will need to invoice them accordingly. The new VAT regime should also benefit EU consumers, who won’t have any surprise import costs when their goods arrive, because they will have already paid for them. If you are eligible to use the one-stop-shop, remember to include your IOSS identification number on all relevant invoices and packages. This will ensure that the customs authorities know that import VAT has been correctly declared. And if you sell goods via online platforms, check whether you need to make changes to your IT systems to allow for the correct VAT to be charged. More detail We have created a presentation for you to understand how IOSS really works in a Presentation for you to download. Also, access EU guidance, EU Member States OSS contact points and much more. https://www.customsmanager.org/post/ioss-eu-vat-rules

(S) Move to Postponed VAT accounting in France. Download the note from the Directorate General of Public Finances / DGFIP on the postponed VAT accounting on Import VAT (ATVAI). Since January 1, 2022, the declaration and payment of import VAT will be made directly through the VAT declaration instead of the customs declaration. For this purpose, no prior authorization is required. This new declaration method is mandatory for any taxpayer identified for VAT. It will allow businesses to simultaneously collect and deduct import VAT on their VAT return, without a cash advance. Your VAT return will evolve to integrate operations relating to imports. Download the note (In French)

(P) Importers must charge their EU customers VAT and transmit it to all EU-27 tax authorities - no matter how small the parcel or how invaluable. Most countries place a consumption tax on the product you sell with a profit, so when you add value to the product. This Value Added Tax follows the supply chain, from production to the final point of sale. Countries like the U.S. prefer to call it a goods and services tax (GST). The average buyer sees it as sales tax, as we see this levied on every product we buy, either included in the final price (but listed separately on the receipt/invoice) or charges upon check out (like in the U.S.) The rate varies from country to country and even across the EU, there is no harmonized rate. For a list of current rates in the European Union, please see here: https://ec.europa.eu/taxation_customs/business/vat/telecommunications-broadcasting-electronic-services/vat-rates_en Apart from the actual rate, VAT rates can also differ depending on the type of good and service. For example, in the UK, the standard rate is 20%, charged on most goods and services. There is a reduced rate of 5% for some goods and services, e.g. children’s car seats and home energy. Finally, a zero rate is placed on most foods. https://www.gov.uk/vat-rates Global E-commerce boom The European Union (EU) will introduce new VAT rules for e-commerce in July 2021. E-commerce is booming, even more so during the COVID-19 pandemic. The mass move to online buying has changed freight and logistic pattern. Rather than large containers, millions of small parcels with low values criss-cross the globe 365/24. Already back in 2017, these were worth more than 1/2 a trillion Euros. Almost 20% of that, around 100 billion Euros came from global sales. VAT change for every parcel Currently, the EU is missing out on collecting VAT from all those millions of low-value parcel imports into the EU thanks to an exemption, Low-value means goods under €22. Today, EU consumers are happy because they do not get a VAT inflated bill. EU and non-EU sellers selling goods (online or not) can sell on to their customers without charging them import VAT. This ends 1 July 2021 and all imports will be subject to EU VAT. Import VAT is then applicable and may need to be paid along with customs duty if the worth of the goods is over. Practically, this means that sellers (and/or marketplace operators like Amazon) will be required to account for VAT on their sales to customers. But wait - I pay the import VAT at the point of import, not sale! Import VAT is the same as VAT, except it is paid on goods and services purchased from another country outside the European Union (EU). In the case of goods imported into the EU, import VAT is usually applicable at the point of import and may need to be paid along with customs duty. But under new rules, no import VAT is no longer due at the point of import from 1 July 2021. EU and non-EU sellers have to charge VAT at the point of sale (so before the import of the goods for consignments of €150 or below from 1 July 2021. Red Tape Alert! Do I have to collect the VAT? Businesses are fearing a massive amount of extra red tape in having to collect and account for additional VAT. They have to work out what VAT rate to charge based on their customer’s EU country of residence and adapt IT systems to take the VAT at the point-of-sale on the website (Sellers can use the delivery address of the customer to determine the country's VAT rate). So the red tape is a concern indeed, however, at least in some cases, they may offload the VAT collection to postal operators, express carriers, and customs agents. Simplification: Import One-Stop-Shop - IOSS Sellers can report the EU-wide VAT charged the EU's "Import One-Stop-Shop". It is specifically designed for all sales of imports below the €150 import value. UK traders and others, which had to navigate various VAT registrations across the EU Member States can only register for one IOSS - then valid across the EU. Their IOSS identification number must then go on the invoice and packages after 1 July 2021. In this way, customs know that import VAT is correctly declared. IOSS Returns IOSS will require quarterly filing to just one tax authority in one member state. They will then share the money due with all other Member States. Sellers can pay their VAT wherever they registered their IOSS accounts. How to prepare for the changes Businesses wishing to supply low-value goods and services to the EU need to consider how they will charge their customer the correct VAT rate after 1 July 2021, depending on the Member State and the type of product, as discussed above. If sold using online platforms, then IT changes may need to occur to allow for the correct VAT to be charged. Finally, businesses should consider registering for an IOSS account and get training on how to lodge the correct VAT returns to the authorities. How we help We help businesses to register for VAT in the EU and advise on how to prepare for the 1 July 2021 changes. We work with VAT representatives in the EU and can support any non-EU business with VAT requirements in the EU. Resources The new rules will come into action on 1 July 2021 but preparation can start right here, right now. Explanatory Notes and Guidance documents Member States OSS contact details Explanatory Notes on VAT e-commerce rules Guide to the VAT One-Stop Shop (applicable from 1 July 2021) Guidance for Member States and Trade concerning the importation and exportation of low-value consignments Explanatory Notes on Telecommunications, Broadcasting and Electronic (TBE) services VAT rates Taxes in Europe database Campaign tools https://ec.europa.eu/taxation_customs/business/vat/resources_en About Customs Manager Ltd. Working with us means having a Customs Advisor, Global Trade Expert and Export Controls Consultant, on speed-dial. If you are looking for a customs consultant UK and EU, let us help you trade effectively, efficiently and, of course, compliantly, wherever you want to go in the world. Need to stay up-to-date with changing customs and global trade rules? We monitor legislation so our clients don't have to. 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(S) Charging the right VAT when dealing with the EU is often a sticking point for businesses from outside the EU The EU rules in the field of VAT differ depending on it, you are in the EU or not, as taxable transactions in goods are treated differently. In the club The EU rules for cross-border supplies and movements between the Member States concerned the intra-EU supplies and acquisitions of goods; distance sales regime for goods to and from the EU Member States. Outside the club Instead, supplies and movements of goods between the EU and third countries are subject to the VAT rules on imports and exports. This means that goods that are brought into the VAT territory of the EU from the a third country (or are to be taken out of that territory for dispatch or transport to the third country), will be subject to customs supervision and may be subject to customs controls in accordance with the EU’s Union Customs Code. Introduction to EU Import VAT rules for exporting businesses For a "foreign" product, VAT will now be due at the importation in the EU, at the rate that applies to the supplies of the same goods within the Member State. Traditionally, VAT will be payable to customs authorities at the time of importation, unless the Member State of importation allows entering import VAT in the periodical VAT return of the taxable person. The taxable import VAT amount is based on the value for customs purposes, but increased by taxes, duties, levies and other charges due outside the Member State of importation, and those due by reason of importation, excluding the VAT to be levied, and incidental expenses, such as commission, packing, transport and insurance costs, incurred up to the first place of destination within the territory of the Member State of importation as well as those resulting from transport to another place of destination within the EU, if that other place is known when the chargeable event occurs. No taxable supply from outside the EU From a third country's perspective, goods will be exempt from VAT if they are dispatched or transported to a destination outside that country. However, a business as a supplier of exported goods must be able to prove that the goods have left their country. Usually, it is the certification of exit given to the exporter by the customs office of export. Download the EU VAT Brexit Notice

(P) Download the Customs (Origin of Chargeable Goods) (EU Exit) Regulations 2020 and get a guide on how to read them The Customs (Origin of Chargeable Goods) (EU Exit) Regulations 2020 allow us to determine the "place of origin" of so-called "chargeable goods". What is meant by that, and where are the actual rules of origin? What are the rules of Origin? Rules of Origin here refers to the document entitled “Rules of Origin: Special Rules for Determining Non-Preferential Origin, which comprises the following as are so named in that document (a)Part One (goods wholly obtained in a single country or territory); (b)Part Two (operations not constituting an important stage of manufacture); (c)Part Three (accessories, spare parts or tools); and (d)Part Four (product specific rules); “Second General Rule” means the rule of origin of goods provided by section 17(3) of the Act. PART 2 Provision in relation to the Second General Rule (If goods are obtained in two or more countries or territories, the goods are to be regarded as originating from the last country or territory in which substantial processing of them has taken place that is economically justified) Processing that is not economically justified Materials that do not form part of the final composition of goods Cases and containers Origin determined by reference to the value of materials PART 3 Provision contained within the Rules of Origin Goods wholly obtained in a country or territory: specified cases Operations not constituting an important stage of manufacture Accessories, spare parts and tools Application of the product-specific rules Regulation 2: Definitions Regulation 2 contains definitions used in the Regulations, including “Rules of Origin”. This means the document entitled “Rules of Origin: Special Rules for Determining Non-Preferential Origin, The Rules of Origin contain four Parts, the contents of which are given effect by provisions of the Regulations. Regulation 2 also defines the rule of origin in section 17(3) of the Act as the “Second General Rule”: "If goods are obtained in two or more countries or territories, the goods are to be regarded as originating from the last country or territory in which substantial processing of them has taken place that is economically justified". Regulation 3: Preferential arrangements for the rate of import duty By regulation 3, the Regulations are made for the purposes of Part 1, except sections 9 and 10, of the Act. Section 9 provides for the Treasury to make regulations to give effect to preferential arrangements for the rate of import duty made with a government of a country or territory outside the United Kingdom. Section 10 provides for the Secretary of State to make regulations to give effect to trade preference schemes (as defined in that section) made with eligible developing countries (see Schedule 3 to the Act). Regulation 4-6 Regulation 4 provides for circumstances where the processing of goods is not economically justified, such that a place of origin otherwise applicable is in consequence disregarded. Regulation 5 Provides that regard must not be had to the place of origin of materials used in the manufacture of goods but which do not form part of their final composition when determining if goods are obtained in two or more countries or territories, such that the Second General Rule applies. Regulation 6 Provides for instances where cases or containers of goods are to be disregarded for the purposes of determining the place of origin of the goods under the Second General Rule. Regulation 7 Provides that where a country or territory of origin under the Second General Rule is disregarded because processing there is not economically justified, the place of origin is determined by reference to the value of materials in the goods. Regulation 8 provides that goods falling within a description of goods given in Part One of the Rules of Origin have a place of origin according to the rule applicable to the goods set out in that Part. Regulation 9 provides that operations set out in Part Two of the Rules of Origin which may be applied to goods do not constitute an important stage of manufacture. Regulation 10 provides that accessories, spare parts or tools falling within a description given in Part Three of the Rules of Origin have a place of origin according to the applicable rule set out in that Part. Regulation 11 provides for circumstances where the product-specific rules in Part Four of the Rules of Origin apply to determine the place of origin of goods. Download the law https://www.legislation.gov.uk/uksi/2020/1433/contents/made

(FREE) We asked you to explain what 35 random global trade terms mean. How many did you get right? Here is our solution.... PART 2 of 2: The Quiz SOLUTION We asked you to explain 35 top terms you will hear in importing and exporting all the time. How many did you get right? To recall the results key: 35-30 correct answers = Customs Geek. We want to hire you or at least meet you. Get in touch to claim a free coffee :-) 29-20 correct answers = Customs Geek in training. Little brush up cannot help. 19-10 correct answers = Well, this is going to get tough for you. Get in touch, we need to talk. 9 - 0 correct answers = We think you are looking for CustomERS, not Customs. You might be at the wrong place. Get in touch, we can help. These were the terms we wanted you to define: Air waybill Bill of lading Certificate of Origin (COO) Commercial invoice Consignment Consular invoice Customs declaration Customs invoice Export licence Packing list Freight forwarder Incoterms Inspection certificate Insurance certificate Pro forma invoice Tariff Tariff Code Terms of Sale Origin/Originate TCA preference Preference Union goods Preferential origin Non-preferential origin Statement on origin Importer’s knowledge Free circulation Transit Special Procedures UK Global Tariff Returned Goods Relief Product-specific rules Goods subject to any form of operation Wholly obtained Wholly produced Certificate of conformity Here are our answers: 1. Air waybill An air waybill is a receipt issued by an international airline for goods, and evidence of the contract of carriage. It obliges the carrier to carry the goods to the airport of destination, according to specified conditions. It is a document of title, which proves ownership, and is non-negotiable. 2. Bill of lading A bill of lading is a contract between the owner of the goods and the carrier. It is a receipt, contains the terms of the carriage contract, and importantly, is a document of title, which proves ownership of the goods. For ships, there are two types: A straight bill of lading. This is not negotiable. It indicates that the carrier has accepted the goods listed, and obliges the carrier to carry the goods to the port of destination, according to specific conditions. A ‘shipper’s orders’ bill of lading. This is negotiable. It can be bought, sold or traded whilst the goods are in transit. 3. Certificate of Origin (COO) A certificate of origin is a signed statement guaranteeing the origin of the export item. Certificates of origin are usually validated by a chamber of commerce in the UK. 4. Commercial invoice A commercial invoice provides the information needed to clear your goods through customs in the destination country. It is prepared by the exporter or freight forwarder and required by the buyer to arrange for payment to the exporter. It should provide a description of goods, the address of the shipper and seller, and the delivery and payment terms. In most cases, the commercial invoice is used to assess customs duties and taxes. 5. Consignment A consignment is an arrangement where an exporter delivers goods to a distributor, who agrees to only pay the exporter once they have sold it. The exporter retains ownership of the goods until they are sold, but also carries all the financial burden and risk. 6. Consular invoice An invoice covering a shipment of goods certified by the embassy or consulate of the country for which the merchandise is destined. A consular invoice describes the shipment of goods and shows information such as the consignor, consignee, and value of the shipment. It is used by the country’s customs officials to verify the value, quantity, and nature of the shipment. 7. Customs declaration A customs declaration needs to be made in a country for any goods that are being exported out of the country or imported into it. 8. Customs invoice A customs invoice is a document used to clear goods through customs in the country you are exporting to. It provides evidence for the value of the goods. In some countries, it might be sufficient to use the commercial invoice for this. 9. Export licence An export licence is a government document that authorises the export of restricted goods. 10. Packing list A packing list is a document that indicates the type of package being used to transport goods for export, such as a box, crate, drum or carton. It also itemises the goods for export in each package. An export packing list is considerably more detailed than a standard domestic packing list. For example, it shows individual weights and measurements for each package. 11. Freight forwarder A freight forwarder is a third party agent that you can hire to move your goods from the country to the country you are exporting to. Most companies choose to use a freight forwarder to move their goods. A freight forwarder can take on full responsibility for the documentation required to clear domestic and foreign customs and the movement of goods between these points. The split of responsibility between you and the freight forwarder will depend on the type of incoterms you choose. Read our guidance on moving goods and using freight forwarders 12. Incoterms Incoterms are a set of rules which define the responsibilities of sellers and buyers for the delivery of goods under sales contracts. They are published by the International Chamber of Commerce (ICC) and are widely used in commercial transactions. A freight forwarder can also advise you on selecting the most appropriate Incoterms for your business, defining delivery responsibilities for you and your overseas buyer. You may decide on a company policy of the Incoterm you will use in all but exceptional circumstances. This makes your pricing and sales terms clear. However, an overseas buyer may insist on which of you organizes the freight and that will determine the Incoterm you eventually use. 13. Inspection certificate A pre-shipment inspection (PSI), is required in certain countries. The certificate issued guarantees the specifications of the goods being shipped. The inspection is performed by a third party such as Intertec, SGS, Cotecna, and Bureau Veritas. The required inspection agency is contracted by the country of destination. 14. Insurance certificate An insurance certificate is a document prepared by the exporter or freight forwarder to provide evidence that insurance against loss or damage has been obtained for the goods. 15. Pro forma invoice A pro forma invoice can act as a quotation and is prepared by the exporter before shipping the goods. It informs the buyer of the goods to be sent, their value, and other key specifications. Sometimes exporters say they are being paid by ‘Proforma’. They mean payment in advance with their buyer using this document as a notification of the full amount to be paid 16. Tariff Tax or duty imposed on a product when it is imported into a country. When an exporter knows the tariff code for their product they can look up the import duty. This duty would usually be paid by the buyer/importer unless the exporter is selling on incoterms such as DDP where they include the duty in their selling price. 17. Tariff code A tariff, or commodity code, is a unique number that’s assigned to every product type. The same code is used in all countries of the world so it's relatively easy to find out the import duty for your product. 18. Terms of Sale Terms that define the obligations, risks, and costs of the buyer and seller involving the delivery of goods that comprise the export transaction. These terms are commonly known as Incoterms. 19. Origin/Originate Rules of origin determine where your goods originate from. This means that the origin is the economic nationality of goods being imported and exported (where they have been produced or manufactured). It is not just where they have been shipped or bought from. 20. TCA preference A zero rate of duty is provided under the UK-EU Trade and Co-Operation Agreement (TCA). 21. Preference A reduced or zero rate of duty is provided under an agreement that a country/region has entered into with another country. 22. Union goods Union goods mean: a) Goods wholly obtained in the EU and not incorporating goods imported from outside the EU b) Goods imported into the EU and released into free circulation in the EU c) Goods obtained or produced in the EU from goods in categories a) and b) 23. Preferential origin Applies to goods that are being traded between the Parties to a preference agreement and which meet the rules of origin and origin procedures within that agreement. Non-preferential origin These are rules that apply for purposes other than preferential duty, for example, if trade embargoes or Anti-Dumping Duties apply or for compiling statistics. 24. Statement on origin This is an origin declaration (also known as an ‘invoice declaration’) that is made by using a commercial document that has enough detail to identify the origin of the goods. This can be an invoice, packing list or delivery note. 25. Importer’s knowledge This allows the importer to claim preferential tariff treatment merely based on their own knowledge about the originating status of imported products. 26. Free circulation This applies to goods that are duty paid and cleared by Customs and which can now be sold, or used within the customs territory. 27. Transit The Common Transit Convention is used to ease the movement of goods between or through any common transit countries. The UK is a member of the Common Transit Convention. 28. Special Procedures Customs special procedures allow you to store, temporarily use, process or repair your goods and get partial or full relief from import duty, or in some cases suspension of duty. 29. UK Global Tariff The UK Global Tariff (UKGT) applies to all goods imported into the UK unless the country you’re importing from has a trade agreement with the UK or an exception applies, such as a relief or tariff suspension or the goods come from developing countries covered by the Generalised Scheme of Preferences. 30. Returned Goods Relief This is a relief that can be applied to goods which are being re-imported into the UK that have previously been exported from the UK. You may also be able to claim relief on goods that you re-export to the EU that have previously been exported from the EU, but you will need to check with the relevant EU customs authority. 31 Product-specific rules For every product traded under a free trade agreement, there is a corresponding product-specific rule (PSR) that must be met to demonstrate the product originates in the free trade area and qualifies for preferential tariff treatment. 32. Goods subject to any form of operation Goods that are not substantially processed or transformed but undergo some form of minimal processing. 33. Wholly obtained Your goods are normally classed as ‘wholly obtained’ if they’re natural products, or products manufactured entirely from them that completely originate from the country or territory covered in preference agreements. 34. Wholly produced Wholly produced goods are those produced or manufactured exclusively from wholly obtained inputs. 35. Certificate of conformity A certificate of conformity is a signed statement from a manufacturer guaranteeing that a product meets certain technical standards. How did you do? Let us know by posting your results in the comments below!

(S) Many exporters or importers forget that the direct transport or non-manipulation rule can disqualify your product counting as originating. Find out how it works Preferential arrangements contain rules concerning the transportation of preferential goods from one party's territory to another. The purpose of direct transport is to ensure that the goods arriving in the country of import are the same as those which left the country of export. You need to verify that your product has been sent from your country to the recipient/partner country without being altered or transformed in another country. If for any reason the goods pass through or stop-over in, the territory of a third country provided that they stay under the customs supervision, the conditions of direct transport are considered to have been fulfilled. Upon request, your importer must be able to prove to customs authorities that the goods bought to you and originating in your country has not been altered elsewhere before arriving in the country of import If your product “transit” in another country, it must not be altered or separated, and it has to be under the vigilance of customs authorities. Proof of compliance with the direct transport rule may be given by a single transport document covering the passage of the goods through the country of transit or, for example, a "non-manipulation certificate" issued by the authorities of that country. Case Study: The UK FTAs and the Direct Transport Rule in Practice The majority of the agreements signed by UK provide this. For the importer to benefit from the tariff preference (reduction/removal of customs duties), the transport of goods must be direct between the partner countries. However, a logistics stopover in a third country to the agreement or transit through another country between the UK and the partner country is not likely to interfere with this rule. The transport or transit documents must be able to certify that the goods have remained under the control of the main carrier or customs. for example, this may be case for goods between the UK and Tunisia, whose trucks will necessarily transit through EU territory under cover of a T1 transit document. This should not interfere with the benefit of the tariff preference applicable to products imported into the UK or Tunisia under this agreement. What happens if the goods have been unloaded to be stored for a time in the EU? Concrete example : A product manufactured in UK obtains UK preferential origin according to the rule of the UK/Switzerland agreement. This product is not exported directly from UK to Switzerland, but is previously imported and stored in France. The French company exports some of these products to Switzerland (as is, without transformation). Question: can the Swiss customer benefit from the tariff preference provided for in the UK/Switzerland agreement, knowing that the condition of direct transport has not been respected? Answer: Possibly… under conditions. The French demonstrates that these goods have not been transformed by proving that they remained under customs control during the storage period: the Swiss customs accept as proof the T1 transit declaration which will accompany these goods on leaving the warehouse under customs or temporary storage facility for example, and… On presentation, to the Swiss customer, of the proof of preferential UK origin as provided for in the agreement. The practical terms are to be defined according to the operation and the agreement (declaration of origin on a commercial document from the UK supplier, or, for certain agreements, the EUR.1 movement certificate issued in the UK). The free trade agreements signed by UK accepts for some the splitting of shipments in the country of storage (a truck imported into the EU and re-exported to Switzerland in the form of split shipments). It also works in the sense: Swiss products are stored in the EU before returning to the UK. Training

(S) So, you'd like to export or import a set that consists of multiple items? Which Commodity code do you use? Customs Classification for sets put up for retail sale can be tricky. You wonder if you should classify each individual part of the set or classify the set as a whole. GIR's guide the way Formally, we would apply the General Rules for the Interpretation (GIRs) of the Harmonized System, as we would do every time we classify a product. GIR 1 First up, I would, therefore, verify if your set is specifically mentioned by name across the customs tariff you look at, If you see your set under the particular HS provisions describing your set, check the relevant chapter and section notes, and the relevant Explanatory Notes (ENs) to make sure nothing is excluded. For example, there are electric generating sets of heading 8502 or sets of kitchenware of subheadings 8215.10 and 8215.20. GIR 3 Essential Character If this is not your set, you may proceed to Rule 3 of the General Rules for the Interpretation (GIRs) of the Harmonized System. It should clarify. Here we read that sets are to be classified according to the component which gives the set its essential character. But for this to apply, we first need to determine if the product is a set at all according to customs authorities. So, answer these questions: Does my set consist of at least two different articles which are, prima facie, classifiable in different headings? Does my set consist of products or articles put up together to meet a particular need or carry out a specific activity? Are they put up in a manner suitable for sale directly to users without repacking(e.g., in boxes or cases or on boards)? If you can answer YES to these questions, chances are that you have a set! Now figure out which of these has the essential characteristics. GIR 6 There is also GIR 6 to apply before you can determine your customs classification. Binding Ruling If still in doubt, consider getting a binding ruling from the authorities to help you get legal certainty.

(S) Part 3: EU rules for the completion of export health certificates are complex. Here are seven steps to follow to get it right. Watch Part 2: https://www.customsmanager.org/post/three-part-mini-video-series-how-can-i-be-exempted-from-new-eu-food-licence-requirements Part 3: Top 7 steps you can take now What happened? The EU has published the rules to follow for the completion and use of the model animal health certificates and model animal health/official certificates for certain imports into the EU. The rules explain how animal health certificates must be completed and on what models for various species.. Why does it matter? Using outdated or incorrect certificates can lead to goods being rejected at the border and this increases delays and costs. What can I do? Exporters to the EU of the animal products concerned need to make sure that they have the correct documentation, completed in all particulars and stamped and signed by authorized veterinarians as per the EU legislation. Contact us to discuss how we may be able to support your de-risk and ensure ongoing compliance with the law. Name of the Regulation: Commission Implementing Regulation (EU) 2021/403 of 24 March 2021 laying down rules for the application of Regulations (EU) 2016/429 and (EU) 2017/625 of the European Parliament and of the Council as regards model animal health certificates and model animal health/official certificates, for the entry into the Union and movements between Member States of consignments of certain categories of terrestrial animals and germinal products thereof, official certification regarding such certificates and repealing Decision 2010/470/EU (Text with EEA relevance) Link to the legislation: https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=uriserv%3AOJ.L_.2021.113.01.0001.01.ENG&toc=OJ%3AL%3A2021%3A113%3ATOC Link to the full blog entry: https://www.customsmanager.org/post/pizza-fish-fingers-burgers-and-the-like-eu-food-import-controls-from-21-april-2021-ready