6th June 2011


Did You Know?  Issue 111 – 6th June 2011


1. Import Licensing Branch June closure: 2. Ethiopia and WTO membership3. ITAR Amendment4. EU ADD Measures5. EU imposes first ever anti-subsidy tariffs against imports from China: 6. Report on VAT and the government sector: 7. CN 2012: 8. New CPC from August 20119. Starter Pack for Importers/ Exporters:


1. Import Licensing Branch June closure: The ILB is operating an emergency service only between 6th June 2011 and the 23rd June 2011.  It was originally going to close during these dates but not importers with an urgent need for an import licence should emailed grant.mosedale@bis.gsi.gov.uk. It will not be possible to provide a “same day service”.    Alternatively, applications for import licences under EU import regimes covering iron & steel products, or textiles & clothing from Belarus or North Korea, can be made to any of the 26 other EU licensing offices (contact details attached).  Non-urgent import licence applications will be dealt with as quickly as possible when Import Licensing Branch reopens at 9am on 23 June.


2. Ethiopia and WTO membership:  After a 3-year break, Ethiopia’s membership talks resumed on its trade regime WTO members negotiating Ethiopia’s membership application reviewed the reforms to its trade regime it has undertaken to comply with WTO rules.


3. ITAR Amendment:  The Department of State is amending the International Traffic in Arms Regulations (ITAR) to establish a policy to address those who are unable to implement the exemption for intra-company, intra-organization, and intra-government transfers of defense articles and defense services by approved end-users to dual national and third-country nationals who are employees of such approved end-users.  Prior to making transfers to certain dual national and third-country national employees under this policy, approved end-users must screen employees, make anaffirmative decision to allow access, and maintain records of screening procedures to prevent diversion of ITAR-controlled technology for purposes other than those authorized by the applicable export license or other authorization. Let us know if you require more information.


4. EU ADD Measures:  We have a list of EU anti-dumping and anti-subsidy measures either in force, under current investigation, terminated or expired dated 3rd June 2011.  Let us know if you want a copy.


5. EU imposes first ever anti-subsidy tariffs against imports from China: After the Confederation of European Fine Paper Industries (CEPIFINE) lodged such a complaint regarding Chinese fine coated paper imports and provided evidence as regards subsidies, dumping and the caused injury for European producers, the Commission initiated an anti-dumping and an anti-subsidy proceeding on 17 February 2010 and 18 April 2010 respectively. The European Commission imposed provisional anti-dumping duties on 17 November 2010, ranging from 19.7% to 39.1%. After a 15 month investigation, the EU found that that the Chinese government was significantly subsidising its coated fine paper industry by giving cheap loans, allocating land below market value and granting various tax incentives which are illegal practices under WTO rules. After this first-ever anti-subsidy proceeding launched by the EU against China, the EU imposed definite countervailing duties ranging from 4% to 12% on this high quality paper imported from China from 15th May 2011. The investigation also brought to light that Chinese producers of coated fine paper exported their products to the EU at dumped prices, hence the EU will impose anti-dumping duties ranging from 8% to 35.1%, depending on the producer. No provisional anti-subsidy duties were imposed. After the Council of the European Union confirmed that definitive measures are warranted, it has been decided to impose definitive measures for the injury caused both by subsidisation and dumping. The measures imposed by the EU are in line with WTO rules.Note: Anti-subsidy measures counteract trade distortive subsidies which make subsidised goods artificially competitive (e.g. cheaper) compared to non-subsidised goods.


6. Report on VAT and the government sector: May 2011 the European Union has published a report on VAT and the government sector. It concludes that the approach to VAT is not identical in all the EU Member States. Public and private activities possibly apply a different VAT treatment. This can lead to distortions of competition. On the one hand governments may be impeded on the input side from outsourcing support services such as cleaning, IT, bookkeeping etc. because they have to pay VAT on this which is not deductible. On the output side, governments can have a market advantage over businesses because they do not have to charge VAT on certain activities that they also offer to third parties. It appears that eight EU Member States have a VAT refund system (VAT compensation fund) for governments to deal with distortion of competition on the input side. Such systems do, however, turn out to entail considerable compliance costs. The researchers suggest making the output of governments subject to VAT so that they also have the right to deduct their input VAT. The system that exists in New Zealand is referred to as a model of best practice.


7. CN 2012: In addition to the many changes brought about by the International Harmonised System (HS) codes in 2012, the new EU Combined Nomenclaure (CN) has also incorporated changes agreed specific to EU trade, eg proposed by European Federations, EU Institutions etc. that are considered annually. The main products and codes affected are listed below:

  • New codes for: Continuous Glass Filaments (7019); Surgical Gowns and Drapes (6210 10 & 6307 90); Roofing and Wall Slates (6803 00); Eels (0301 92); Acids (2915 70 & 90); Electric Cycles (8711 90); Fertilisers (3105 20); and, Vignole Rails (7302 10 - restructuring).
  • Revised Supplementary Unit: Fibreboards (4411 – from m2 to m3).
  • Modernisation/Simplification: As Eurostat are still awaiting responses from their consultation process, it is unclear what codes are planned for merging or deletion. Therefore, at this stage, please refer to the (Codes & Guides, Goods Classification Systems) ‘CN Documents’ pages on the HMRC uktradeinfo site, at www.uktradeinfo.com which list codes implicated.
  • Other codes under consideration are: 6505 90 10, 7307 99 30, 8403 10, 8431 49 20, 8439 91 10, 8439 99 10, 8443 91 91, 8474 90 10, 8477 90 10, 8479 90 20, 8483 10 21, 8483 50 20, 8483 60 20, 8483 90 81, 8503 00 91, 8607 21 10.


Please note that all of these codes are subject to formal ratification in July and as such should be considered ‘indicative’ for the time being. For any further information on these issues, please Email the contact below. Contact: Ian.Belfield@hmrc.gsi.gov.uk

Note:  The HS 2012 changes affect the 1st 6-digits of the commodity code, the CN2012 changes affect the final 2-digits.


8. New CPC from August 2011:  CPC 00 09 090 is currently used to clear short shipments, generate release notes for non inventory linked (Phase 1) entries and to clear inventory records when the goods have been abandoned, seized or destroyed.   To differentiate between inventory clearances and destruction/seizure entries HMRC has introduced a new Customs Procedure Code (CPC) 00 09 080.  CPC 0009090 will continue to be used when the goods have been abandoned, seized or destroyed. When using this CPC, you must contact the NCH Shed Compliance team via email nch.shedcompliance@hmrc.gsi.gov.uk for a reference number.


9. Starter Pack for Importers/ Exporters: HMRC publishes on its website a Guide to Importing and Exporting - Breaking Down the Barriers.  This provides importers and exporters with a basic guide on things they need to know about importing and exporting and gives an overview of most customs procedures so is a good starting point for those new to trading internationally. This guidance includes information on importing, exporting, transit and duty relief procedures.  It is updated on a quarterly basis.



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