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Important changes to UK customs 1st Jan 2022 (Incoterms, Origin of goods and N status clearances – Phase 3)

As from 1st January 2022 further restrictions will be put in place for imports clearances into all of the UK, correct incoterms/origin of goods are more important to get right, and full import clearance is in place 1.1.22.

Incoterms

Stricter paperwork is in line ready for 1.1.22 based on more checks with HMRC. As we enter new rules, we are advising that all incoterms are added clearly on shipping invoices to help with addition information needed to add on clearance declarations.

We need the freight and insurance added on separate lines away from the value of the goods.

For example:-

10 Pallets 10,000kgs shipped from EU to UK, shipped EX WORKS.

Value £5000.00

Freight £1000.00

Insurance £75.00 (if fully insured as in some cases this will be £0.00)

When making import clearance, we breakdown the declaration and add the VAT on the value of the goods only, in some cases where DUTY will be payable we break down the declaration by adding the % of the duty rate, which is added to the total value of the goods, plus freight and insurance.

Guideline on incoterms (2020) required with freight / insurance included

Ex works/FAS/FCA/FOB freight included NO insurance included NO

CIF/CIP/DAP Uncleared/DAP Cleared freight included YES insurance included YES

Origin of goods 

Proof of origin is getting more important to get resolved and understood between shipping UK-EU and EU-UK to avoid paying DUTY.

We are increasing importance to our team to highlight getting correct paperwork from clients.

The origin of goods must be backed up with supported evidence by the seller/buyer.

The evidence can consist of the following (the  majors examples we predict) :-

  • Origin statement which is added to the shipping invoice
  • GSP certificate
  • REX number (GB can only accept EU REX numbers on imports into GB)

If these statements cannot be provided, there will complications when making clearance declarations and DUTY may be charged at destination. If something is of EU origin, it must be backed up with supporting evidence. The UK government has updated their website to look into origin guidance, these procedures must be adapted to suit your flow of freight moved between UK-EU and EU-UK.

Example statements on commercial invoices we recommend:-

Exports UK to EU

“the exporter of the goods covered by this document (exporter reference number and EORI number) declares that except where otherwise clearly indicated, these products are of UK preferential origin”

The exporter EORI number must be stated regardless of the goods value

Imports EU to UK

Upto max value EUR 6,000.00

“the exporter of the goods covered by this document declares that except where otherwise clearly indicated, these products are of EU  preferential origin”

Over the value of EUR 6,001.00

“the exporter of the products covered by this document (exporter reference no REX) declares that except where otherwise clearly indicated, these products are of EU preferential origin”

Failure to have any REX number means goods do not qualify for preferential status, even if imported from EU. Please also bear in mind that if the EU goods came from another 3rd country originally, then further REX may be needed from first origin.

Guidance for rules or origin:-

https://www.gov.uk/guidance/check-your-goods-meet-the-rules-of-origin

Guidance for REX:-

https://ec.europa.eu/taxation_customs/online-services/online-services-and-databases-customs/rex-registered-exporter-system_en

N status/full clearances 

These new changes mean that the current easement (we have had this easement for all of 2021) on all freight shipped through the UK ports will come to an end. N status clearances will mean full clearances and monies paid at the borders  before release of goods which will commence 1st Jan 2022.

Ocean Blue will continue to apply pre-lodgement that automatically clears freight when arrives at the UK Ports. This is based on all inventory linked UK ports (Destin8/CNS) which allows us to have a UCN (Unique consignment number)

Based on this we plan to have all clearance arranged with the use of our or importers own deferment account where Duty is applicable. VAT will continue to go against PVA (postponed vat accounting) unless stated otherwise.

What’s critical for the new change is the origin manifest and paperwork has to be 100% correct, when manifesting shipping lines the correct number of packages and weight must be identical to what the export paperwork states, failing to get this right means manifest corrections will need to be completed by the origin, this is something which is extra administration and takes time. Please be aware this is something OceanBlue cannot change, it has to be done at origin. To highlight we cannot make final import declaration until this is right and this will delay the process.

General approx import clearance time frames:-

Documents received by 12 noon, entry will be created same day and will clear upon arrival at UK ports.

Documents received after 12 noon, clearance will be completed by 12 noon following day (24 hours)

More urgent clearances can be addressed with our team where required.

Current EU imports are time driven due to the short sailing schedules and quick clearances needed. Import clearances can be adapted per shipping line and port, it’s important to understand that every line/port has different procedures to work via, all different systems in place with various ports (GVMS, Cheif /Destin8, CDS)

The new CDS system is not yet fully implemented until 2023 this will be the single system to use by the the majority, in the future, OceanBlue plan’s to stage the full use of CDS by 31.12.22 or before. GVMS is designed for any port inventory or not inventory linked which will be adapted to suit new procedures. Cheif/Destin8 is the model we have used for the last 25 years and will slowly be introduced by CDS.

For short sea shipping (like export from Holland, Germany, France and other channel ports) there can be 2 models adapted:

1 Temporary storage model (Inventory linked procedure):                             

No changes to the procedure as known today.

2 Pre-lodgment model (GVMS):                                                                  

OceanBlue can make the import declaration in CHIEF/CDS before the goods move. We then pass the Movement Reference Number (MRN) or import entry number to the export haulier so they can use this in GVMS, this generates a GMR reference which needs to be given to the shipping line (this can be done by OceanBlue or the EU haulier subject to each preference, if via OceanBlue then we will only create the GMR if we are in full access for all UK clearances, if 3rd party brokers are involved we cannot help) All must be done prior to units being accepted onto the EU terminal of exit, truck and or trailers are not allowed entry to loading terminal without GVMS/GMR reference (to try and stop congestion)

5 important steps will be for imports to UK:-

1 Invoices are provided to OceanBlue

2 Import entry prelodged with UK customs

3 MRN/Import entry number provided

4 OBL/Other trucking company does GVMS if applicable for shipping from EU

5 Once shipped / Goods automatically clear upon arrival

Standage charges (trailer/container standing charges at ports) will be charged 72 hours after UK arrival at the port. The new standage system will benefit every stage of the chain by promoting more efficient transport and stops congestion, this will be across the board with no alternative.

New N Status clearance and deferment fees applicable 1st Jan 2022, based on valid commercial clearances with EORI numbers. ** Our Deferment applies to all duty payable at UK ports and does not include VAT if this is put on PVA (postponed vat accounting) If you do don’t have a valid UK EORI number then PVA cannot be used and the use of our deferment can be granted for DUTY and or VAT. Please note that a deferment account is prepared to help the easy flow of traffic through UK Ports. For a small fee this automatically stops trucks getting held up and forcing haulage to be re-schedule and ports getting congested where bigger fees will apply from the supply chain involved. The deferment is handled by full time staff which adapts unwanted delays to be a real benefit to UK importers **

A general summary of the further controls and when they will be implemented:-

From 1 Jan 2022 full clearance declarations at UK borders for imports. This also includes pre notification requirements on animal origin (POAO), animal by-products (ABP) and high risk food not of animal origin (HRFNAO) This we believe is a paperwork check rather than physical checks of goods (physical checks will come into force 1.7.22) This must be done using the UK IT system know as IPAFFS.

To view new changes please visit :-

https://www.gov.uk/guidance/import-of-products-animals-food-and-feed-system

From 1 July 2022 certification and physical identity checks for live animal, plant, meat and high risk foods not of animal origin products. Safety and security declarations will be required on all imports.

From 1 September 2022 certification and physical checks for all dairy products.

From 1 November 2022  certification and physical identity checks for all regulated products now including composite and fish products.

For more further detailed information please contact-

Daniel Morrison – danny@oceanbluelogistics.co.uk

Gavin Legg – gavin@oceanbluelogistics.co.uk

Updated 7.12.21