11th November 2013

Did You Know? Issue 171


1.  EU Intrastat Reports – Arrivals: 2. Belarus-Kazakhstan –Russia Customs Union:  3. CN2014 is now out: 4. New EU Counterfeit Goods Regulation:  5. 20 Years On- the Single Market: 6. Change to ITAR/EAR destination controls statements: 7. MERCOSUR – EU FTA: 8. Ukraine Tax Changes:  9. Special Tools to assist ITAR/EAR transition

1.  EU Intrastat Reports – Arrivals: From 1st January 2014 the assimilation threshold for submitting Intrastat Reports to UK Customs on EU Arrivals will increase from £600,000 pa to £1.2 million – so removing about 4,000 businesses from the requirement to submit arrival Intrastat reports.       
2. Belarus-Kazakhstan –Russia Customs Union:  Armenia and Kyrgyzstan are expected to join the Belarus-Kazakhstan –Russia Customs Union in 2014 after accession proposals was approved in August 2013.  The process to harmonise national legislation and regulatory framework with the Union’s standards has already started in these two countries.  Ukraine, Moldova, Georgia and Azerbaijan are also being courted for membership. From this list, all but Azerbaijan are also in negotiation with the EU on Deep and Comprehensive Free Trade Agreements (DCFTA) with the EU.  EU officials have made it clear that membership of the Customs Union is incompatible with the DCFTAs.
3. CN2014 is now out.  Only 39 8-digits codes are affected.  Click here for the spreadsheet. The EU Combined Nomenclature, ie the 8-digit commodity codes are reviewed annually.  2014 will see just 39 of the 6,500 codes affected which included goods in Chapters 3, 20, 27, 31, 44, 70, 73, 76, 84 and 87.  If your goods are classified within these Tariff Chapters you must obtain the 2013-2014 Correlation Table from HMRC LINK
4. New EU Counterfeit Goods Regulation:  The new regulation provides the framework for the customs authorities of EU Member States to deal with infringing/counterfeit products passing through the relevant customs, either on the application of a right-holder or on discovery by customs authorities through routine inspections.
The key changes include:

  • extension of the remit to other types of intellectual property rights (including trade names, semiconductor topographies and utility models);
  • making the accelerated procedure to secure destruction without a court order compulsory in all EU Member States;
  • provisions to address the growing problem of counterfeits imported by post or courier in small consignments;
  • relaxation of the rules (applied with varying strictness around the EU) about the use by rights holders of information learned from customs officers.

It will replace of Regulation 1383/2003/EC. Read more on the new regulation.
5. 20 Years On- the Single Market: The EU Single Market is now twenty years old; twenty years in which it has become the most economically integrated trading bloc in the world. It has successfully dealt with considerable growing pains to reach this milestone, including expanding to include new Member States with very difficult economic legacies, and ever freer movement of goods, services, labour and capital. This achievement has allowed UK and European companies to make far better use of the resources on our doorsteps, and consumers to enjoy a huge variety of choice. For these reasons alone the Single Market has represented a powerful boost to freedom of choice.  Read MoreTwenty Years On The UK and the Future of the Single Market
6. Change to ITAR/EAR destination controls statements: Sub - Section 123.9 Country of ultimate destination and approval of re-exports or retransfers states that: “The exporter, US or foreign, must inform the end-user and all consignees that the defense articles being exported are subject to US export laws and regulations as follows:
(1) The exporter, U.S. or foreign, must incorporate the following statement as an integral part of the bill of lading, air waybill, or other shipping document, and the purchase documentation or invoice whenever defense articles are to be exported, retransferred, or reexported pursuant to a license or other approval under this subchapter:
“These commodities are authorized by the U.S. Government for export only to [country of ultimate destination] for use by [end-user] under [license or other approval number or exemption citation]. They may not be resold, diverted, transferred, or otherwise be disposed of, to any other country or to any person other than the authorized end-user or consignee(s), either in their original form or after being incorporated into other end-items, without first obtaining approval from the U.S. Department of State or use of an applicable exemption.”; and
(2) When exporting items subject to the EAR (see Sub-Section's 120.42 and 123.1(b)) on a Department of State (DoS) license or other approval, the U.S. exporter must provide to the end user and consignees in the purchase documentation or other support documentation the appropriate EAR classification information for each item exported pursuant to a U.S. Munitions List “(x)” paragraph. This includes the appropriate ECCN or EAR99 designation.” – this relates to goods that have moved to Department of Commerce control under the Export Control Reform (Series 600) but the exporter/ re-exporter.
7. MERCOSUR – EU FTA: Mercosur will be holding a special meeting of foreign ministers 15 November 2013 in Caracas to consolidate “Mercosur presentation before the European Union”, according to a news release from the Argentine Foreign ministry. Foreign ministers from Argentina, Brazil, Uruguay, Bolivia and Venezuela held a meeting in Caracas at the end of October 2013 , and reiterated Mercosur interest in reaching a trade and cooperation agreements which “effectively acknowledges the development differences between both blocs”. It has been agreed that before the end of the year the two blocs will exchange proposals (list of goods and services) to consider for trade liberalization and lower tariffs' system.  Mercosur and the European Union have been negotiating a trade and cooperation agreement since 1999, but talks have succumbed on several occasions and finally in 2010 were retaken. However the main difference remains: Mercosur wants ample access for farm produce and the EU for its manufactured goods and access to the services sector.  (Note: from 15 August 2013, Paraguay was re-admitted as a full member of the Southern Common Market (MERCOSUR). Suspended from the executive bodies of the MERCOSUR since June 2012, the country's re-admission was possible as the country's new President, elected on 21 April 2013, assumed his office on 15 August 2013.)

8. Ukraine Tax Changes: Ukraine’s VAT rate will decrease to 17% on 1stJanuary 2014.  VAT is levied on the supply of goods and services in the customs territory of Ukraine and on the importation of goods and services to Ukraine at a rate of 20 per cent. Corporate Income Tax: as of 1 January 2013 to current the basic CIT rate ia 19% (reduced from 21% that year), from 1st January 2014 it is set to decrease to 16%.
9. Special Tools to assist ITAR/EAR transition: The U.S. Department of State, Directorate of Defense Trade Controls (DDTC) offers the following tool to users to help them identify the steps to follow when reviewing the U.S. Munitions List (USML) in ITAR Sub-Section 121.1. This decision tool will help you classify items that are subject to the ITAR
Specially Designed Decision Tool- This tool is effective for exports on or after October 15, 2013. It applies only to commodities and software related to United States Munitions List (USML) Categories that have been revised in accordance with the President's Export Control Reform (ECR) initiative.http://www.pmddtc.state.gov/licensing/dt_SpeciallyDesigned.htm
Issued 9th October 2013: Guidelines for Preparing Electronic Agreements (Revision 4.1).  These Guidelines were prepared by the U.S. State Department Bureau of Political Military Affairs, Directorate of Defense Trade Controls, Office of Defense Trade Controls Licensing (DTCL). They are intended to serve as an aid in applying the International Traffic in Arms Regulations (ITAR*); to provide clarity to Defense Trade Policy as it pertains to Agreements; and to establish a standard basis for submissions of agreements and related correspondence.http://www.pmddtc.state.gov/licensing/documents/agreement_guidelinesv4.1.pdf

Contact Strong & Herd
to discuss your requirements
0161 499 7000
0161 499 7100
Strong & Herd LLP, Manchester International Office Centre
Styal Road, Manchester, M22 5WB