8th July 2013

Did You Know? Issue 161


1. Croatia and dual-use goods/ technology: 2. Harmonised System Codes 2017 – Amendments being finalised: 3. IATA Air Freight Market Analysis - May 2013: 4. Italy to increase VAT rate: 5. China to fully adopt VAT:    6. Importers and agents that declare fruit and vegetables: 7. UK Export Finance – new address:  8. Anti-Dumping Duty (ADD) on Ceramics: 9. Japan New 24-hour Pre-notification of cargo:
1. Croatia and dual-use goods/ technology: Croatia now a member of the EU for Dual-Use export licensing issues - but still check UK OGELs! And don't assume OGELs for Military goods will cover Croatia immediately. Read More
2. Harmonised System Codes 2017 – Amendments being finalised: The WCO is due to sit in September 2013 to review the items and amendments that are to be put forward for consideration in November 2013 and potential acceptance in March 2014. Some areas under consideration in the hi-tech are:
1.               new heading for Tablet Computers (yes, they are thinking of putting the word Computer in the HS – though other “computers” will stay as Automatic Data Processing (ADP) Machines;
2.               something needs to be added within the “Monitor” sections to facilitate the classification of multi-functional monitors
3.               a “smart phone” with an inbuilt camera – not like we have now but a real zoom in camera and “smart phones” with a games console attached
4.               Light emitting devices (LEDs) of all kinds – lamps, screens, displays, etc – being considered as a new entry into the tariff within Chapters 85 and 943
5.               Touch sensitive screens
6.               Machine tools operated by lasers and numerically operated machines to have their own headings
7.               Monopod, tri-pods, bipods, etc for digital cameras to be given their own definition
These are just some things being considered, there are also amendments in other Chapters of the tariff being considered for 2017, especially chemicals.  We won’t get an official list until 2015; some of the things mentioned above may not make the 2017 list but might have to wait until HS 2022.
3. IATA Air Freight Market Analysis - May 2013:
  • Air freight markets made little progress in May – up just 0.8% on a year ago;
  • The growth trend in global FTKs shows no improvement on the gains made during Q4 2012;
  • In fact, current air freight volumes are in line with the flat trend seen over the past 18 months;
  • The stall in air freight markets over recent months reflects an emerging softness in some developing economies;
  • GDP growth in China has failed to meet expectations and growth momentum in Asian trade has slowed;
  • While Asia Pacific supported the rise in FTKs throughout Q4 2012, growth year-to-date as contracted 2.5%;
  • The only region to see strong growth in air freight demand in May was the Middle East, up 9.7%;
  • Air freight load factors remain weak with all regions recording a decline in May compared to a year ago;
  • A recent easing in the rate of decline in the Eurozone could help reduce downward pressure on global growth;
  • But for now, business confidence is barely above stagnation and world trade is subdued in advanced economies;
  • Until global demand starts to improve, air freight markets will continue to face difficult conditions.
       Read full report
4. Italy to increase VAT rate:  Italy announced in February 2013 plans to increase its standard VAT rate from 20% to 22%.  It has been delayed from 1st July 2013 until later in the year but it still may not happen. The fallout from the 3-month delay of the Italian VAT rise continues. The estimated €1 billion cost of the postponement to 1 October 2013 is to be partially met by a rise in tax on electronic cigarettes. As Italian borrowing costs have risen sharply since the delay this may not be enough. Delayed until 1st October 2013 or later to 1stJanuary 2014
5. China to fully adopt VAT: A VAT pilot scheme has been running in China since 2012 as a means of replacing Business Tax (BT) for three specific industries: transportation, asset leasing and modern services section.  The scheme is to be extended to other industries later this year with the aim of moving over to VAT completely by the end of 2015. The Asia Tax Watch website noted that, “The expansion of the pilot program to the rest of mainland China is likely to be welcomed by the business community, especially multinational companies and other larger businesses. During the transition period between the commencement of the pilot program in Shanghai on January 1, 2012 and the national rollout on August 1, 2013, the complexity of having VAT apply in some locations, and Business Tax (BT) in others, created some confusion and uncertainties. With the nationwide expansion soon to be complete, some of the competitive advantages in sourcing services from pilot cities will soon be replaced by a more level playing field.”
For more on the roll-out of the VAT program in China, clickhere.

6. Importers and agents that declare fruit and vegetables:From 1st September 2013 to declare the value of fruit and vegetables using the Standard Import Values (SIVs) you will have to use a new Customs Procedure Code (CPC). To identify the use of SIVs and in accordance with Commission Regulation 2454/93, Annex 38 the following CPC is to be incorporated into CHIEF:
40 00 E02
Imports of fresh fruit and vegetables listed in Annex XVI, Part A to Commission Regulation 543/11, declared to home use with the customs value and duty calculated using a Standard Import Value (SIV).
Use of this CPC will be restricted to those commodities where SIVs apply and Box 43 (Valuation method) of the declaration must be left blank.
7. UK Export Finance – new address:  As of 8th July 2013 the UK Export Finance relocate to new offices in Westminster. As from Monday 8 July 2013, our new address will be:
Address: UK Export Finance (Export Credits Guarantee Department) 1 Horse Guards Road London SW1A2HQ
Switchboard: 0207271 8000 Fax: 0207271 8001 Customer services: 0207271 8010
For the time being, staff email addresses will remain the same.
Contact information is also available on our websitewww.gov.uk/uk-export-finance.
8. Anti-Dumping Duty (ADD) on Ceramics: Council Regulation 412/2013 has now been issued which imposes definitive anti-dumping duty on the following commodity codes for certain goods from China. 
6911 1000 90  6912 0010 11 
6912 0010 91  6912 0030 10
6912 0050 10  6912 0090 10
Since November 2012 HMRC have been taking many thousands of security deposits for provisional ADD these entries that now require adjustment by the National Duty Adjustment Centre at the National Clearance Hub.  This is going to be a significant undertaking from both HMRC and the Trade. To assist with this process, HMRC propose that traders who have more than 50 entries requiring adjustment can submit their claims in a schedule.  This schedule must include the following information:
•           EPU
•           Entry Number
•           Date
•           Trader Reference (box 7)
•           Supplier Name (including provisional code and definitive code)
•           Duty Paid
•           Duty Payable
•           Person to receive the payment (Importer or Agent)
The National Clearance Hub will then contact traders directly to request selected documentation if required.  Queries should be addressed to NIDACAdjustingTeam@HMRC.gsi.gov.uk or telephone 0161 261 5527.
9. Japan New 24-hour Pre-notification of cargo: New system schedule for cargo destined for Japan, it will have to be pre-notified to Japanese Customs 24-hours prior to loading, similar to the scheme introduced by the USA. This procedure is scheduled to go into force March 2014, Japan Customs and Nippon Automated Cargo and Port Consolidated System (NACCS) are encouraging shippers to begin looking at requirements and working towards compliance now.   Penalties include Do Not Loads (DNLs) and fines up to 500 thousand JPY
The NACCS has provided several good resources for the trade to use in familiarizing themselves with the Japan 24-hour Rule
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