Customs Solution to ‘Percy Pig’ tariffs (Ireland)

This blog does not focus on customs, tariffs, or VAT. But this story from the Irish state broadcaster RTE, caught my eye. Here

Percy Pig are popular sweets, sold by the UK retailer Marks & Spencer widely in Ireland and Europe. They are made in Germany and imported to the UK for onward re-distribution to Ireland and Europe without further processing.

It was thought under the EU-UK trade and cooperation agreement such import into the UK and re-distribution back to the EU without further manufacture or processing in the UK would attract a tariff.

But a partner in Customs and International Trade at (the accounting firm) BDO Ireland thinks she has a possible solution, which she is running by the authorities for verification. It utilises a Returned Goods Relief in existing EU customs rules.

[others may also have located Returned Goods Relief or other facilitations in the EU customs rules]

GB-EU Border Checks (UK & EU from 1st Jan 2021)

On 14 July, the EU updated and reissued it’s 1 Jan 2021 Readiness Notice on Customs (dated 22 Nov 2019) and combined the content with the updated and replaced Readiness Notices on Preferential Rules of Origin (dated 4 June 2018) and Customs and Indirect Taxation (dated 30 Jan 2018), here.

The day before, on 13 July, the UK published its Border Operating Model, here. I Blog posted about it at the time.

The Institute for Government in the UK has published a handy explainer – here.

GB to EU trade – From 1 Jan 2021

(1) Full customs declarations (UK export declarations and EU import declarations) will be required.

(2) If applicable, tariffs and import VAT will be payable at the time of import, unless traders are eligible to defer payments.

(3) UK exit summary Safety and Security declaration (or combined fiscal and safety and security declaration) and EU entry summary Safety and Security declaration will be needed.  

(4) Checks according to international conventions (e.g. CITES) will take place.

(5) Full SPS checks will be imposed, including a requirement for UK Export Health Certificates.

(6) Additional requirements will apply to the export of other controlled goods, in line with EU and member state rules.

(7) Excise goods will be subject to the rules applied by the importing EU member state.

EU to GB trade –

From 1 Jan 2021

(1) Full customs declarations will be required for controlled goods (e.g. excise goods like tobacco and alcohol).

(2) For standard goods (most goods), simplified customs requirements will be in place from January. Traders will have to keep sufficient records of their imports, but will be able to defer full customs declarations until 1 July 2021 (although they may submit customs declarations before if they wish).

(3) If applicable, tariffs will be payable, but it will be possible to defer payment until customs declarations are made (no later than July 2021). If applicable, import VAT will be payable, although many traders will be able to defer payment.

(4) An EU exit summary Safety and Security declaration will be needed.

(5) Checks according to international conventions (e.g. CITES) will take place.

(6) Imports of high-risk live animal and plants (and animal and plant products) must be pre-notified to the UK authorities via IPAFFS, have correct health documentation and may be subject to checks. Physical checks will be carried out at the point of destination or other approved premises.

(7) Import licenses and other requirements will apply to the import of some high-risk goods.

(8) Businesses importing excise goods will need to pay GB excise duties using the CHIEF or CDS systems (although excise duties are already payable on excisable imports from the EU).

From April 2021

Imports of all products of animal origin, regulated plants and plant products will require pre-notification to the UK authorities via IPAFFS and must have correct health documentation. Necessary physical checks will take place at the point of destination or other approved premises.

From July 2021

(1) Full customs declarations will need to be made at the time of import for all goods. Some traders may be eligible for simplified declaration procedures.

(2) Any applicable tariffs will be payable on import, although many traders are eligible to defer payments.

(3) A UK entry summary Safety and Security declaration will be needed.  

(4) Products subject to SPS checks will need to transit through a designated Border Control Post equipped to handle the goods in question and be subject to checks. Goods will subject to an increased rate of physical checks.

EU-UK Readiness post 1st Jan 2021 (UK 1st Jan 2021)

Yesterday, 13 July, the UK published its Border Operating Model (206 page Policy Paper) that will apply from 1st Jan 2021 for GB trade with the EU – here.

In addition, HMRC information for traders importing or exporting goods between Britain (GB) and the EU after 1st Jan 2021 is published – here.

HMRC also has guidance on declaring goods brought into GB from the EU after 1st Jan 2021 (update from 10 July) – here.

Specific instructions –

(1) Plants and plant products (update from 10 June) – here

(2) Animals, animal products and high-risk food and feed not of animal origin (update from 10 June) – here

In addition, the Forestry Commission’s guidance on importing wood, wood products or bark from non-EU countries is updated – here.

Protocols for GB trade with NI, and NI trade with the EU (including Ireland) will be published later this month (the UK government said yesterday 13 July).

I Blog posted a few days ago on EU-UK Readiness on the EU side.

UK Temporary Import Tariff Regime (UK Brexit)

Exit day is 31st October (this date is in a Statutory Instrument)

Today (8th October) the UK republished it’s temporary Import Tariff Regime that will apply in a no-deal Brexit.

Here

[this Blog does not focus on Customs or VAT]

It is mostly unchanged from the March version. Three aspects have changes – affecting HGVs, bioethanol and clothing –

• lower tariffs on HGVs entering the UK market, striking a better balance between the needs of British producers and the SMEs that make up the UK haulage industry, ensuring that crucial fleet replacement programmes that help to lower carbon emissions can continue

• adjusted tariffs on bioethanol to retain support for UK producers, as the supply of this fuel is important to critical national infrastructure

• tariffs applied to additional clothing products to ensure the preferential access to the UK market currently available to developing countries (compared to other countries) is maintained.

Moving Goods from Ireland to Northern Ireland (Northern Ireland Brexit)

Exit day is 31st October (this date is in a Statutory instrument)

[this Blog does not focus on Customs or VAT, this post is made only because the changes are substantive]

Today HMRC updated (in a major way) and reissued its guidance on customs procedures applying in Northern Ireland.

Here

Goods moving between Ireland and Northern Ireland will face different procedures compared to other UK-EU trade.

You will not need to:

• get a customs agent or an Economic Operator Registration and Identification (EORI) number

• pay Customs Duty or make import or export declarations to HMRC

You should also consider advice issued by the Irish government about their requirements for goods moving into or out of Ireland.

This was the case in the March instructions (see Blog post then).

What is added is information about moving controlled and licensed goods, transitional simplified procedures and moving goods under transit.

HMRC also issued updated instructions on excise duty applying to exports to Ireland and imports from Ireland.

Export – here.

Import – here.

Customs and VAT processes in Northern Ireland will also change if there is an orderly exit. I will be issuing further Blog posts.

Latest Instructions (UK Brexit)

UPDATE : HMRC has issued further easements (imports to UK) – here.

UPDATE : the EU Council has agreed its positions on basic road and air connectivity. Here and here.

The following are latest instructions issued by the UK government and agencies :

(1) agreement is reached to continue the EU dual-use controls (Open General Licence) – applies to certain equipment – here (UK) – background – here (EU).

(2) using UKCA label (goods) – and CE marked goods circulation – here.

(3) letters issued individually to EU trading businesses – here.

(4) simplified customs procedures (updated) – here. (I updated the post I had made earlier on this topic)

Transitional simplified procedures – here.

HMRC (Imports) Customs Simplifications (UK Brexit)

Disclaimer : this Blog is not focused on Customs arrangements per se.

UPDATE (19 Feb 2019) : further easements – here.

UPDATE (4 Feb 2019) : these are now published – here. Transitional simplified procedures – here.

UPDATE : these do not apply to trade across the international border on the island of Ireland. These are initial plans from the UK side, they are not worked through with the EU (or agreed with the EU). In no deal, EU agreement is not needed, the EU is just supplied with the documentation they need for their processes.

HMRC has a Customs Partnership Pack, it’s in its third edition. Here.

I am hearing about substantial simplifications planned for EU/UK trade. Also for RoRo traffic. Available for undefined time but 12 months’ notice will be given if changes planned. These are not yet published. I will update this post, as necessary.

(1) Customs declarations and pre-notifications still required but various simplifications available to avoid congestion. Traders able to lodge them ahead of goods arriving at the border or into company’s records.

(2) Initial declaration submitted in the company’s own commercial records. Once the goods arrive in the UK a supplementary declaration is lodged.

(3) Transitional arrangements very similar to the two existing customs procedures Customs Freight Simplified Procedures (CFSP) and Entry in Declarants Records (EIDR).

(4) Brokers able to use own CFSP authorizations without being jointly liable for customs duties. Only importer liable to encourage brokers to use own CFSP. Unlike now. This simplification available for all trade, not only EU-UK.

(5) Relaxation of comprehensive guarantee requirement. Simpler version of the guarantee available for all traders without the need to meet the current CCG requirements. Sufficient time given to provide a guarantee.

(6) Only anti-smuggling (Border Force) checks at the border on selected shipments based on risk-analysis. Reminder -this is what currently happens. Even goods from other EU countries currently undergo these checks.

(7) Special simplifications for customs formalities also for traders of controlled goods (requiring a licence or a certificate).

[my thanks to Dr Anna Jerzewska, trade expert, for the above information]

Customs Transit Procedures (Brexit UK)

The Customs Transit Procedures (EU Exit) Regulations 2018 (SI 1258) are enacted. These will come into force when separately determined by Treasury Regulations (not enacted yet), these separate Treasury regulations will be made under the (Brexit) Taxation (Cross-border) Trade Act 2018. The Regulations are here.

These Regulations make provision for the international movements of goods, with import duty suspended, under the internationally recognised common transit procedure and TIR Carnet system, with provision for such movements within the United Kingdom. They also provide for such movements of goods under arrangements for NATO forces.

When enacted, they will ensure that these customs procedures operate as before once the United Kingdom exits the European Union.

Draft Notices to be made under these Regulations are here.

Detailed following of the new Customs arrangements is beyond the scope of this Blog. HMRC continue to publish guidance and instructions. Please follow HMRC for these.

Grants for Customs Declarations (Brexit)

The UK Government has today announced grants for companies and individuals carrying out customs declarations, the details are here.

– Up to £750 for each employee receiving training

– Up to €200,000 for new software (the maximum under EU state aid rules)

PricewaterhouseCoopers (PwC) is administering the grants for HMRC.

More information about the grants is on PwC’s website. The link to apply will be published on the government link above in early December 2018.

Ireland and the Netherlands have been offering grants for some time – here.

Customs, Excise and VAT (UK Brexit)

I have posted already with the UK Technical Notices for Brexit Preparedness. HMRC has three of these Technical Notices. Further instruction is now issued from HMRC in the form of a Partnership Pack. This is here.

For goods exports, the following is required :

(1) register for an EORI number – not open yet [EORI – is UK Economic Operator Registration and Identification Number] and ensure the EU bloc customer also has an EORI number

(2) check is a special licence is required

(3) get the commodity code from published codes

(4) get the correct Customs Procedure Code (CPC)

(5) decide how to declare to HMRC – this is complex – decide if to pay a Freight Forwarder, an Express Courier, or a Customs Agent/Broker

(6) register for the National Export System (NES)

(7) attach the invoice (and licence if needed) with the goods transport

(8) present the goods to customs

(9) finalise the Export entry on HMRC CHIEF system

(10) keep records for 6 years

The Pack is the first of a series of more specific HMRC instructions. This Pack also covers Goods Imports. It does not cover direct sales on a digital platform.