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FAQs

In this section you will find answers to many frequently asked questions about International Trade. If these don't solve your query then please refer to our contact page.

Export

• We export goods to India from Felixstowe, via Rotterdam, where they are transhipped from a feeder to a deep sea vessel. Should the Felixstowe to Rotterdam stage of the shipment be reported under Intrastat?
• Is it true that the marking of goods with the country of origin isn’t just a requirement for Saudi Arabian shipment but also for other countries in that part of the world?
• We are exporting goods to Korea and they have asked for a certificate of origin. We are not the manufacturer of the goods, they were made in USA. Firstly, can we say they are UK origin even though we have only re-packaged and re-labelled the goods? If not, can we issue an EC Certificate of Origin if the goods do not originate in the EC?
• We had a very bad situation recently. A shipment went by road to Switzerland; the export term was FCA Seller’s Premises. Our customer nominated the freight forwarder who collected the goods. We provided them with the invoice and a CMR Note and advised them that we needed evidence of export. On arrival at the French/Swiss border the driver was asked to provide an EAD Form; they didn’t have one and were told that they had to return to the UK, that there could be a 2000 Euro fine or they would seize the goods and the vehicle. We were in stalemate for about a week and then our Swiss customer sorted something out – we don’t know what and the problem went away. Is this EAD something we should have done?
• We have a problem in Malaysia with a shipment we sent under an ATA Carnet. The goods were for demonstration purposes only and should have returned to the UK after a month or so. The company in Malaysia like the goods and wants to place a very lucrative order but they also want to keep the demo item and our sales manager has agreed. I have been tasked with sorting out the Carnet. Any help will be appreciated.
• A customer in Saudi has asked for our contract to be legalised, what does this mean?
• We have had a question from a customer in the USA. Our terms of sale are DDP Lakewood and the forwarder invoices us with USA duties. The question our customer has ask is: “Are we the Importer of Record”? Are we?
• We have heard about this security and safety procedure which was introduced by Customs for exports (ECS); we mainly export to Germany and France. Please will you explain how this new system affects us?
• One of the shipping lines that I use for my seafreight exports out of Tilbury has informed me that I must claim ‘Single Transport Contract’ on my export documents otherwise my goods could be snagged by Customs. The shipping line’s representative explained that it is due to the Export Control System and the fact that my goods actually sail from Antwerp although they are received at Tilbury. What is this ‘Single Transport Contract’ and why should I have to claim it on my export paperwork. Will my goods really be stopped if I don’t?
• Our customer in Brazil has asked us to remove the tariff code number from our invoice because it causes problems at import. Can you explain this; all our invoices show the tariff code.
• We have a customer in Singapore who insists on handling the import of repaired and replacement items we send back to them even though our agreement is to deliver on a DDP basis to their door. Their involvement is causing delivery delays, for which we are being blamed, and I can’t understand why they don’t let us just get on with it.

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Export Strategy

• What are the main overseas market research questions I should consider when considering entering an overseas market?
• What factors should I consider when determining my international pricing strategy?

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Import

• My boss would like to know the broad category of processes we can receive import duty relief on when we bring goods in from outside the EC.
• If items are brought into the UK for repair from the USA and the Importer of Record does not have an IPR authorisation are there any schemes they could utilise to reduce the VAT and duty?
• I understand there is a new Open General Import Licence issued by the Import Licensing Branch of BIS – can you please tell me if this is the case and, if so, where I can get a copy?

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Customs

• Do HMRC make it mandatory to submit Intrastat data electronically?
• Are HMRC planning to bring forward the due date deadline for submitting Intrastat data?
• If I can’t change my systems to meet the 1/4/2012 deadline for data submission, will HMRC take penalty action against me?
• We supply goods to an unrelated company in another EU Member State which can be subject to transfer price adjustments at a later date. If prices are adjusted do I have to submit corrected Intrastat data once the true value is known?
• Why do I have to declare net mass on the Intrastat supplementary declaration? It’s yet another piece of information I’ve got to try and find and it doesn’t seem to have much purpose.
• We dispatch a series of consignments, over several months, to a German company. Each consignment forms part of a packing machine and the parts are assembled together to make the finished machine. Should we report each consignment as it occurs?
• We supply fuel to aircraft registered in a variety of other EU Member States at a number of UK airports. Should we use the appropriate commodity code from chapter 27 in the ICN, e.g. 2710 19 21 for jet fuel?
• I think our technologists should join in the Commodity Code classification process, particularly as our products are technically sophisticated, do you agree?
• Hopefully you will be able to make sense of this query. We sold some demo units to a sister company in the US back in 2005 & 2006. This company was then sold and we bought the units back from them which were then delivered to another company in the USA as our stock but for demonstration purposes. These units have now been sold to a company in Mexico and they are requesting that we supply them with a EUR-1 Preference Form so they can clear customs easier. The 5 pieces are still in the USA. Is this something we can do?
• We recently sent a shipment to Lebanon with a EUR1 Form which was stamped through a Chamber of Commerce electronic system. The goods have been delayed at Customs in Lebanon and we have been told that they will not accept the EUR1 form because it has not been correctly stamped. Are they able to do this?
• A US customer recently returned some items for repair. The problem is that we supplied them with a large system and they have only returned a small part of the whole but have declared the full system price on the paperwork but of $500,000. We will be using Inward Processing Relief (IPR) so duty won’t be paid we don’t want to have an artificial duty liability. Can we legally declare the correct price for the small bit to Customs ($25,000)?
• What is or were Smoot-Hawley – it was referred to in a recent document on tariff controls but not explained?
• Does the introduction of the EORI affect my Intrastat declaration?
• I have been reading some information about the provisions coming in under the EU’s Modernised Customs Code and I am interested in the simplified procedures they mention called “self-assessment”. Can you give me some more information on it please, as I think it will be of benefit to our cashflow with regard to the payment of customs duties and VAT at import?
• 'Arm's length trading and 'distance selling' what are they and what is the difference (if any)?

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The Incoterms ® Rules

• The Incoterms, Delivered at Terminal (DAT) and Delivered at Place (DAP), were introduced in 2011, but I still invoice using the old ones, e.g. DAF, DDU. Will these still be accepted by the HMRC system?
• I understand there is a new set of the Incoterms rules. Can you give me some more information?
• We shipped a recent export consignment to an Indian customer with the shipping term FCA (Sellers premises) Incoterms 2000. In accordance with the Incoterm the customer instructed their freight forwarder to collect the goods from our site, we handed the goods to the forwarder along with appropriate documentation sufficient to clear the goods through Customs and thought that was the end of the matter, we were surprised one morning to receive an invoice from the forwarder charging us for Customs presentation and export declaration fee, the amount was over £80. Needless to say we took this up with the forwarder on the basis that we expected such charges to be billed forward to our customer. They were adamant that these costs should be to our account. What do you think ?
• What are Combiterms?
• A colleague attended one of your export courses in London. He enjoyed it very much. In the section where you were talking about Incoterms and passage of risk from seller to buyer he said you mentioned ‘The Invisible Man’ but he couldn’t remember the exact context, I am curious about this, can you explain?
• I am having a rather large debate with our director regarding Ex-Works (loaded) and FCA Sellers Premises Incoterms. Our director wants to use ‘FCA Sellers Premises’ for our old ‘Ex-Works Loaded’ customers, but I believe that this is incorrect, because that would then make us responsible for clearing the goods for export. But if the goods are only being moved within the EU, and there is no customs entry as such (clearing goods for export), then what is the difference between ‘Ex-Works Loaded’ and ‘FCA Sellers Premises’?
• We buy under CPT UK Airport and have recently had a problem with a damaged shipment. The goods were badly damaged during loading or unloading, a forklift truck appears to have run over one of the boxes and crashed into another. Our supplier is being very unhelpful saying it is our problem and demanding their money. We are trying to establish where the damage took place: what difference would it make to our claim on the seller if the damage was done at the airport of loading or unloading?
• Last month we received an order from Turkey on an Ex Works basis. The freight company nominated by the customer came in and collected the goods, we just did an invoice. I have recently attended an export documentation course and the trainer was concerned that we didn’t have evidence of export. Could you explain this in more detail for me please?

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Export Licensing Controls

• My manager said to apply for an Open General Export Licence to ship our goods to the USA. He’s got it wrong hasn’t he?
• Some items in our product catalogue are subject to export licensing regulations. We are totally compliant in exporting these products using suitable export licence cover whether SIELs (Standard Individual Export Licences) or OGELs (Open General Export Licences). The question arose recently concerning an instance where we received an order from a UK based company for an item that was subject to export licence requirements, we supplied the item without query but it later came to light that the item had been exported from the UK. How do we stand in relation to other UK parties exporting our product?
• We understand that a customer in the USA will be returning some goods to us in the UK for repair under a DSP73 licence, what is one?
• Our Finance Department has passed me an invoice from a US supplier on which there is a “Diversion Warning"; and reference to ITAR. The statement reads that these goods are licensed for supply to the UK and diversion contrary to US law is forbidden. There is more but this is the gist of it. I am out of my depth on this one, can you help because I’m not sure if I’m suppose to do anything?

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AEO & Supply Chain Security

• What is AEO Status?
• If you are involved in international trade do you have to become an AEO?
• How do we decide whether to apply for AEO status?
• If we decide to apply for AEO Status – how do we do it?
• The majority of our company’s trade is with EU businesses. Does AEO status apply to intra-EC trade?
• I have heard that there are two different types of AEO Status, is this true and if so which is the best to apply for?
• Is AEO just about “locks on my doors”, in other words an extension of the Aviation Security procedure?
• What areas of business will be looked at during the AEO accreditation audit?
• We are only a small business but 90% of our trade is export and our main market is the USA so we think we should become AEO approved but we are concerned about rumours we have heard about how much it time it has taken some companies to get approval in the pilot scheme and the expense of allocating those resources. We would appreciate your comments on this.
• If our company applies for AEO status and we are refused can we reapply? I have heard there is a 3 year waiting period before you are allowed to reapply.
• I attended one of your courses some time ago in which the presenters referred to our Border Protection system and identified the three main agencies who were responsible for protecting our borders as:a. Customs (HMRC H.M. Revenue & Customs)b. Immigration (Home Office)c. Police (Special Branch)Is this still the case because we are aware that changes are taking place through the growth of supply chain security systems such as AEO (Authorised Economic Operator) and the U.S. CT-PAT ( Customs and Trade Partnership against Terrorism) and would like to feel that we are up to date?
• We had a vigorous discussion over lunch the other day, AEO (Authorised Economic Operator system) was part of it, our Logistics manager and the Sales guy got into a head to head on the subject of, would you believe, Incoterms!! Our Logistics guy was saying that when we receive AEO accreditation we will need to change our policy regarding how we quote overseas clients, all our quotes should use an Incoterm that gives us the responsibility for the choice of forwarder and carrier eg the C Group and D Group, the reason being, he said, that we cannot be sure of supply chain security if we are constantly handing goods out to unknown forwarders or carriers under Group E and F. Our Sales guy went ballistic at this: “Are you telling me that we notify the overseas customer base that we have cultivated over the years that they cannot use their own choice of forwarder or carrier? – that is like saying that our service providers are superior to theirs – it’s a good way to drive them into the arms of our competitors who are happy to legally deliver when handing out the goods on their own doorstep so to speak.” Is there a right and wrong here?

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Finance

• We have been asked by a customer in Bulgaria to provide them with an IBAN number. Please can you tell me what one is?
• A customer in Thailand has offered to pay us using a “usance letter of credit” by a customer in Thailand. What does this mean?
• Q. A new supplier is the Far East has asked to be paid under a letter of credit. We have only sold on letters of credit before and know it is easy to make errors; now, as buyers we are worried that “discrepant documents” may delay the delivery of goods. What do we need to be aware of?
• We have experienced problems in cancelling a performance bond issued through our bank to an overseas client, even though we have fulfilled all our obligations and the bond expired 3 months ago. Why won’t our bank release us from liability?

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VAT

• Please can you give me some more information on the VAT changes starting 2010?
• Do you know a simple way I can find out what taxes are in place in other member states of the EU?

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Dangerous Goods

• With regard to road shipments, what are the ADR regulations, and what is a CMR note?
• Is it true that dangerous goods training is now mandatory not just for air freight shipments but also for goods moved by sea freight?
• When is it applicable to use the limited quantity provision when transporting dangerous goods?
• I have heard about “excepted quantities” but do not know how these are used. Can you explain?
• When I present a dangerous goods note to a freight forwarder/haulier they sometimes ask for a “tunnel category code”. Can you explain what this means and where I get the information from?
• What are “High Consequence Dangerous Goods”?
• What is a Dangerous Goods Note and when is one required?
• What is meant by “UN certified packages”?

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