Trade Compliance News – June 2024
Trade Compliance News – June 2024 General Election 2024: How Will it Impact Trade? Prime Minister Rishi Sunak has announced the date of the next election, ending months of speculation about when the UK would head to the polls. With the date set, we turn our attention to the future of UK trade policy. Several high-profile trade negotiations are ongoing but are likely to be paused until after the election. Notably, the UK-India talks have encountered delays, as both countries are now in election seasons. A fifth round of negotiations on the Switzerland-UK trade deal was planned for “early Summer 2024,” but this might be postponed, with talks with the Gulf Cooperation Council and Turkey also expected to face similar delays. David Henig, director of the UK Trade Policy Project, told Politico Morning Trade that some of these agreements could be reviewed: “If there is to be a change of administration, I’d expect Labour to review these and all other negotiations against broader objectives, and potentially put greater focus on negotiations with the EU, Switzerland, and Turkey.” The Independent reported that senior Labour MPs, including shadow exports minister Tan Dhesi and shadow immigration minister Stephen Kinnock, attended a meeting of the US right-wing think tank Heritage Foundation, possibly signalling Labour’s openness to working on a UK-US trade deal. Read More Brexit-Hit Businesses Demand Labour and Tories Cut EU Tariffs to Boost Trade The British Chambers of Commerce (BCC) has called for urgent action to improve the UK’s trading relationship with the EU, as Brexit has increased costs and complicated exports. In its election manifesto published on Tuesday, the BCC outlines a five-point plan to boost economic growth, emphasising the need for better relations with the EU. The manifesto states that Brexit has made it “more expensive and bureaucratic to sell our goods and services across the Channel” but also highlights that improved terms could help firms trade more efficiently. The BCC’s five demands for the next UK government, to be elected on July 4, include a focus on reducing tariffs and easing trade barriers with the EU to support British businesses. Learn More The Future of Northern Ireland Export is Looking Bright Northern Ireland has yet to fully realise its potential in the export market, according to business leaders.The Republic of Ireland, the EU26 and North America are likely to be key export destinations in the decades ahead however there are obstacles to overcome in NI before businesses reach their full export potential A recent report from Heathrow, Exporting Excellence – Spotlight on Northern Ireland, created with the help of the NI Chamber, found that 7,708 businesses across Northern Ireland export goods. Additionally, the report identified another 7,700 small and medium-sized businesses that have the potential to export but currently do not. The most recent Northern Ireland Economic Trade Statistics (NIETS) reveal that in 2022, 65.9% of total sales by businesses in Northern Ireland were within the region. Some 18.5% were within Great Britain, while only 15.6% (£13.3 billion) were exports to markets outside the UK. Read More CMA CGM Pays $1.975m Fine for Overcharging on Freight French liner CMA CGM incurred the largest fine, paying $1.975 million to resolve allegations that it over-broadly defined and applied its definition of “merchant” in a bill of lading, demanding payment from a third party who should not have been billed. In addition to the French shipping company, two other companies have paid smaller fines to the Federal Maritime Commission (FMC) in the US. These settlements reflect the FMC’s ongoing efforts to enforce regulations and ensure fair business practices in the maritime industry. Learn More EU signs off Mercury Import/ Export Ban The Council has passed a regulation that comprehensively bans and prohibits the manufacturing, import, and export of other mercury-added products. Traders were surprised when they had to deal with more checks than anticipated and some lorries had been held for hours before being waved on without inspection. Exporting dental amalgam will be prohibited from 1 January 2025; the ban on manufacturing and import in the EU will apply from 1 July 2026. Mercury-containing lamps will also be made subject to a manufacturing, import and export ban as from 31 December 2025 and 31 December 2026. Learn More Council Adopts New Regulations on SoHO The Council has adopted new rules aimed at improving the safety and quality of blood, tissues, and cells used in healthcare, as well as facilitating their cross-border circulation within the EU. Under the new regulation, member states may choose to apply stricter measures to protect their citizens. In addition to improving quality and safety, the regulation aims to increase harmonisation and facilitate cross-border exchanges and access to substances of human origin (SoHO) by: Setting up an EU-level SoHO coordination board to support member states in implementing the regulation. Introducing common EU-wide procedures for the authorisation and assessment of SoHO preparations. Requiring member states to designate a SoHO national authority and other competent authorities to authorise SoHO preparations and ensure independent and transparent oversight of SoHO-related activities. Setting out additional authorisation and inspection requirements for establishments that process, store, release, import, or export substances of human origin. Establishing a new common IT platform, the EU SoHO platform, to register and exchange information on related activities. The regulation will now be signed by both the Council and the European Parliament and will enter into force following its publication in the EU’s Official Journal. Read More Our latest issue keeps you in the loop with the latest customs & trade news, plus some exciting company milestones. Keep reading to stay informed! You may also like: 06 August 2024 Trade Compliance News – August 2024 Read More 30 July 2024 iCustoms in the Spotlight as Supply Chain Excellence Award 2024 Finalist Read More 18 July 2024 Trade Compliance News – July 2024 Read More 05 July 2024 Trade Compliance News – July 2024 Read More 20 June 2024 Trade Compliance News – June 2024 Read More About iCustoms iCustoms is an
Importing Goods into the UK: An Essential Guide
Importing Goods into the UK: An Essential Guide Is importing goods to the UK has been a hassle to you? You are not alone; it is common for traders to get stuck in import documentation, regulations, and expected expenses. Everything from selecting the shipping methods to clearing customs and calculating taxes needs meticulous attention and expertise, leaving traders with confusion and frustration. As per the World Options study, “The United Kingdom is the world’s 4th largest importing country, and it approximately has $823 billion import value yearly, including items like fuel, manufactured goods, foodstuff, machinery, etc. “ Similar to any other country, the United Kingdom has an appropriate method you must go through when importing goods. Fear not; we have come up with a detailed guide covering all you need to know about importing goods into the UK. Keep reading to equip yourself with the best strategies for importing to the UK and ensuring success. Comprehending the basics of importing goods into the UK Importing goods into the UK involves the movement of products from other countries to the United Kingdom. To accomplish this successfully, people need to follow a series of steps and must have a thorough understanding of the procedures involved, such as: Certifications and import licences Commodity codes Import regulations UK customs Taxes and duties Customs documentation International market Documents required for importing to the UK A lot of documents are needed while importing goods to the UK. The common ones are listed below: Must-have documents: Commercial invoice Bill of lading EORI number Packing list Documents you may need: Certificate of origin CE certificate Certification for port health Test certificates Import licences MSDS Certificate of authorisation How to import goods to the UK: All the steps involved Follow these steps to import goods into the UK seamlessly: Step 1: Select your shipping method The shipping method for the transportation of goods from their original country to the UK has a significant impact on the overall expenses. The following are the various shipping options you can consider: Road freight: Can be costly and slow due to added fuel and toll expenses. Rail freight: Considered effective for RU, but there are very limited rail routes. Sea freight: Very cost-effective but can be slower than other methods. Air freight: Very costly but faster than all of the listed ones. Finding the most cost-effective and simple shipping method can be a daunting process for anyone new to global trade. To accomplish this task, you can get help from any freight forwarder company, which can help you choose the right method, negotiate the rates and track your shipment in real time. Step 2: Get an EORI number Economic Operators Registration and Identification (EORI) is a 12-digit code starting with a GB and is required when importing products into the UK. However, the EORI number may not be required when you are moving goods between Ireland and Northern Ireland or if you are running a service-based business. In case of the absence of an EORI number, you might face increased expenses and delayed shipments. To get an EORI number, you can apply on the govt. website, and it should be assigned to you within a week. Step 3: Ensure that the company sending goods can export to the UK The company sending the goods into the UK must need to: Have certificates or licenses to export goods to the UK Make an export declaration Checking what documents are required to enable your goods to reach the UK will help avoid unnecessary delays. Step 4: Check whether you need any certificate or license Importing specific goods requires certificates or licenses to pass the borders, such as: Plants and plant products Animals and animal products Chemicals Drugs Medicine High-risk goods Products having fluorinated gas Nuclear material Besides this, if you are importing manufacturing goods, food items, or plant seeds, you must ensure that the goods follow accurate marketing, labelling, and marking standards. Step 5: Agree on incoterms with the supplier In international trade, both the importer and the supplier must agree to a set of terms and conditions that establish their responsibilities, i.e., incoterms. Their significance in customs procedures cannot be overstated, as they determine who is liable for a specific customs obligation. For instance, if you are a non-UK-based business exporting goods under DDP incoterms from a European Union country, you are in charge of both the import into the UK and the export in the country of departure. On the other hand, you will not be responsible for either the import into the UK or the export in the country of dispatch if you are selling under EXW incoterms. Step 6: Check compliance with the importing rules The United Kingdom has a strict set of measures to promote fair trading and protect the environment, resulting in avoiding delays and legal penalties. These include: Product safety regulations: Traders must confirm that the products they are importing are properly labelled with the safety certifications and comply with the particular safety standards. Trade-specific regulations: Some products may have specific regulations that you must comply with; for instance, pharmaceutical products require approval from the Medicines and Healthcare Products Regulatory Agency, while food items must comply with specific labelling standards. Environmental regulations: The companies importing goods must be compliant with the rules and restrictions on packaging materials, waste management, and hazardous substances. Step 7: Choose the right software provider for import declaration Import declaration is the most important and critical step, as it holds many chances for mistakes. Although it can be performed on your own, it is suggested to hire a customs agent or use AI-driven customs declaration software. iCustoms – Premium customs declaration software provider To ensure accurate customs declarations, choose iCustoms’ AI-driven CDS and automate complex declaration procedures. You can get the following benefits from iCustoms’ CDS: Regulations enforcement: It ensures your shipments are rigorously compliant with the governing importing and exporting rules, saving you from fines and penalties.
Top 7 Global Trade Management Software for Imports and Exports
Top 7 Global Trade Management Software for Imports and Exports In this modern era of international trade, businesses encounter many challenges, such as handling bundles of customs documents, calculating customs duties and taxes, and navigating intricate trading regulations and rules. All these issues can lead to customs delays or goods suspensions. As per a study conducted by Martincus et al., “In Uruguay, a 10 % increase in delay times resulted in a 3.8% drop rate in exports.” There is an increasing demand for an automated, all-in-one system to tackle the import, export, and customs challenges. One such solution is Global Trade Management Software. It can be challenging to select the best one when searching because there is a lengthy list of options. In order to help you select the trade management software that is most appropriate for your company, we have compiled a list of the top 7 trade management softwares. Understanding Trade Management Software Trade Management Software is a system that helps businesses manage and streamline their global trade procedures. It helps optimise and automate tedious trade-related activities, reduce manual mishaps, and improve efficiency. With their AI-driven features and tools, trade management systems enable companies to manage import and export documentation, compliance, customs management, and all other trade processes. Benefits of Global Trade Management Software GTM software provides you with the following benefits: Increased productivity With their ability to automate customs documentation, tax calculations, and logistics management, these softwares streamline customs clearance and the overall trading process. This translates to reduced burdens and quicker processing, improving productivity. Reduced cost Global trade management solutions reduce costs related to compliance and shipping by taking advantage of Free Trade Agreements to reduce customs taxes and duties. Moreover, operational costs can be saved when tasks and trade processes are automated. Increased visibility With the help of International trade compliance software, firms can monitor goods, manage shipments, and analyse trade data in real time. This visibility improves supply chain management, makes compliance monitoring possible, and strengthens decision-making. Having control over trade processes allows businesses to react quickly to modifications or disruptions in operations. Enhanced compliance International trade is expanding due to the growth of e-commerce, yet it is still difficult to navigate the complexity of trade legislation and compliance. With the help of global trade compliance automation software, companies can ensure compliance with trade and customs legislation and sanctions while being informed and efficient. This opens up new development prospects for businesses in the global economy while also protecting them against fines. Growth and scalability Global trade management software is capable of handling increasing trade volumes and complexities, offering scalability to meet the demands of growing business. By integrating with the ERP system, this trade compliance solution supports seamless growth without affecting trade operations. Top 7 Global Trade Management Software iCustoms iCustoms is a powerful and industry-leading Customs Declaration Software that makes use of machine learning and artificial intelligence to streamline and simplify the customs declaration process for customs brokers and businesses. Features Effortless document processing: With the Large Language Models (LLMs), our efficient Intelligent Document Processing (IDP) solution elevates customs declarations. It brings remarkable accuracy to data extraction and validation, ensuring the efficiency and accuracy of your customs declaration process. Improved visibility and control: iCustoms’ automated CDS software provides real-time visibility into the goods movement, improving trading processes and helping you make the right decisions. One-stop shop: With iCustoms’ multitasking global trade management system, you can bid farewell to managing multiple trade and customs processes individually. It helps you handle everything involved, such as documentation, tax calculation, product classification, and declarations, efficiently. AI usage: With the help of artificial intelligence (AI), iCustoms captures unstructured data and fills it automatically in the customs declaration forms, eliminating the hassle of sorting out data manually and avoiding the chances of mistakes. Reduced time and cost: The contemporary AI features of iCustoms optimise trade and customs procedures, saving you time and resources. Easy integration: The AI-powered user-friendly system of iCustoms integrates easily with the current operations of a company, making the procedures simple and efficient. Panjiva Panjiva is a platform that brings transparency to international trade with its powerful data visualisation. It serves as an informational platform for trade professionals, providing them with space to connect. Features Smart analytics Market insights Competitive analysis Customisable searches PartnerLinQ PartnerLinQ ensures real-time visibility, which, as a result, empowers decision making. They help streamline complex global supply chain ecosystems by proactively identifying supply chain risks, promoting sustainable growth, and exploring new revenue opportunities. Features Unified digital connectivity Improved visibility and control Mapping of 3,700 trading partners Delivery of customer success metrics. Zonos Zonos facilitates global trade by equipping it with scalable technology that enhances accessibility. This platform grants businesses control over their cross-border trade by helping them in the following areas: Duties and taxes Foreign payments Restricted items Fraud mitigation Features Full country compliance Currency conversion Automated tax compliance SAP Global Trade Services SAP creates intelligent enterprise networks and ERP for companies of all sizes, providing sustainability, transparency, and resiliency in the supply chain network. With their end-to-end suite of services, they enable customers to adapt to any modifications and operate profitably. Features Inclusive and diverse culture Sustainability at the core Corporate social responsibility Trademo Trademo builds a strengthened operational supply chain, ensures compliance with the trade rules, and assists companies in finding more commercial opportunities. This platform gathers data from various sources, such as the Census Bureau, financial data providers, the UN, etc., and then processes this data to build customer insights and supply chain knowledge charts. Features Product master Enhanced sanction protection Ensures compliance proactively Trade reference Alpega TMS Alpega TMS is a worthwhile option for retailers and manufacturers who want to digitise their logistical processes. The platform provides an amazing end-to-end transportation management system that includes modular solutions for increased efficiency, cost savings, visibility, and sustainability. Features Transport planning Smart booking Reusable packaging management FAQ’s What is trade compliance software? Trade compliance
What is a Movement Reference Number ( MRN Number ) on CDS?
What is a Movement Reference Number ( MRN Number ) on CDS? An essential component of international trade, the Movement Reference Number (MRN) acts as a distinct identification for import and export customs declarations. This distinct number simplifies customs clearance processes and guarantees the efficient movement of products across borders. Since the introduction of the MRN number, customs clearance times have reduced considerably. Moreover, businesses involved in global commerce should expect significant savings and enhanced logistical efficiency as a result. The method of making customs declarations is changing for importers and exporters. With the introduction of Customs Declaration Service (CDS) in place of Customs Handling Import and Export Freight (CHIEF), you need to use a Movement Reference Number (MRN) when submitting your declarations. In this blog post, we will walk you through every possible aspect of MRN on CDS. What is an MRN number? A movement Reference Number, or MRN, is a customs registration number issued by customs authorities to manage the shipment process and serve as a primary reference number for customs declarations. Every time an import or export declaration is submitted in the UK or EU, a unique number is assigned to it that is referred to as a goods movement reference number. The import and export declaration MRN number is used for electronic declarations in ATLAS (Automated Tariff and Trade System) or similar systems. Movement Reference Number (MRN) on CDS When a declaration is submitted on CDS for the purpose of importing or exporting goods, a customs identification number (MRN) is generated. The customised number produced enables a unique connection between your goods and you. Consequently, MRNs are a critical component of the audit procedure pertaining to your declarations. Why do I need MRN? Customs processes may be somewhat complicated when moving products among EU member states. Traders use the Movement Reference Number to improve the efficiency and effectiveness of cross-border commodity movement. The reasons why you need an MRN are as follows: Smooth and faster customs clearance Each customs declaration is assigned a unique identity, which is determined by MRN. It streamlines the customs clearance process at the final destination by electronically linking your cargo with the necessary authorities. In doing so, it helps traders save considerable time and resources by not having to undergo customs inspection at each border crossing. Struggling with slow & costly customs clearance? Reduce delays, minimise errors, and boost efficiency with our AI-powered platform. Start Now Taxes and duties suspension An important benefit of the MRN system is the ability to temporarily halt import taxes and tariffs. So long as the items don’t enter the customs territory at their final destination, these taxes can be postponed. For businesses engaged in global commerce, this suspension might be very advantageous to their cash flow. Smooth and faster customs clearance The MRN system provides better tracking and management of products by making their movement more transparent. By employing the MRN, customs officials may easily monitor the shipment’s whereabouts, which improves their ability to keep control of it during transit and guarantees compliance with rules. What is the MRN number used for? The MRN is used for the following purposes: Customs declaration tracking: The MRN number tracking helps businesses and customs authorities track the shipment after the customs declaration has been submitted electronically. Archiving and documentation: The businesses involved in international trades can use MRN numbers to archive and document their customs declarations. This helps them quickly provide the required documents in case of any inspections from customs authorities. Communication with customs authorities: In the event that doubts or uncertainties emerge concerning a customs declaration, the MRN number functions as a point of reference to guarantee that all parties are communicating about the same procedure. What are the benefits of MRN in international trade? Transparency: The customs MRN number ensures transparent tracking of the shipments, thus facilitating communication between customs authorities, freight forwarders, and businesses. Improved efficiency: The MRN number serves as a unique identifier for customs declaration, allowing the goods to be processed and released more quickly. Error reduction: A unique MRN number is assigned to each customs declaration, reducing the chances of mixing ups and errors. What characters constitute the MRN number? As per the UK Govt., “The Movement Reference Number (MRN) is an ID consisting of 18 characters, a combination of letters and numbers.” Alphanumeric Reference: A 14-character code which is generated in CDS. Country code: It is a 2-digit geographical code. For instance, it is shown as “GB” for the United Kingdom. Year: It is a 2-digit code; for 2024, it becomes “24”. How is an MRN number assigned? CDS issues a unique MRN number for each customs declaration. This number is automatically generated for all the export and import declarations submitted to CDS. The MRN can be viewed in your commercial software as a part of the initial notification response to the declaration submission. In the event that your declaration is denied and upon successful resubmission, a new MRN will be generated. Importance of the MRN Number in Customs Clearance Customs declaration proof: The Movement Reference Number (MRN) confirms that a shipment’s declaration has been successfully submitted. Status monitoring: The MRN number enables customs authorities and traders to track the status of their shipments. Customs control simplification: The customs inspection is made easier with the MRN number as all the relevant documents and information are readily accessible. Essential for customs clearance: A valid export MRN number is required for customs clearance; imports cannot be cleared for customs without one. Tired of customs clearance issues? Our customs software automates submissions, minimises errors, and speeds up clearances. Watch a Demo FAQ’s What is the MRN on a customs declaration? MRN stands for Movement Reference Number. Customs authorities issue MRNs and use them to process and track shipments. Where can I find my customs MRN number? To get a goods movement reference number, submit an import or export declaration to CDS, and it
Trade Compliance News – May 2024
Trade Compliance News – May 2024 Exporters Urged to make CDS migration as June Deadline Approaches HMRC has recommended exporters migrate to the Customs Declaration Service (CDS) “as quickly as possible” ahead of a firm 4 June deadline. Time is running out for exporters that have been advised to seek support to make the switch from the existing Customs Handling of Import and Export Freight (CHIEF) system. The transition to CDS is expected to introduce a more streamlined and digital approach to customs declarations, ultimately improving efficiency. CDS provides businesses with a more user-friendly, streamlined system with greater functionality. It’s been running since 2018 for import declarations and more than 117 million customs declarations have already been submitted through CDS. CHIEF ceased operations for importers on November 30, 2023, making the use of CDS mandatory for import declarations. While the migration process for exporters has faced delays, it officially began on March 4, providing a three-month window for traders to adapt before the June deadline. HMRC has emphasised that limited exceptions to CDS usage will be granted after June 4, with readiness issues such as staff training or software concerns not considered acceptable grounds for further extension. To facilitate the transition, the government has issued guidance for exporters, recommending the use of TDR and collaboration with software providers to ensure compatibility with CDS. What are the next steps? Government Unveils Plan to Boost UK Businesses The UK government is taking a bold step to boost businesses. A new White Paper, leveraging Brexit freedoms, outlines a ten-point plan to rein in regulators and reduce burdensome red tape. This move aims to create a more business-friendly environment by raising the bar for introducing new regulations. The principles will introduce a new rule that means new regulations can only be introduced when it is “absolutely necessary. This marks the latest step in Government efforts to make regulations more effective and less burdensome for businesses – known as the Smarter Regulation Programme. The Programme – which was launched just last year – has already introduced reforms saving 50 million hours of admin work per year for businesses, saving them an estimated £1 billion, which has been pumped back into the economy. Get Insights Global Trade Surges, Expected to Double This Year Global trade growth is expected to more than double this year, propelled by easing inflation and a robust US economy, as indicated by international organisations. The OECD, IMF, and World Trade Organization are all predicting a significant rebound in global trade flow this year, following a slowdown in 2023 attributed to increased prices and rising interest rates. The OECD forecasts a 2.3% increase in global trade in goods and services for the current year, followed by a projected growth of 3.3% in 2025. This marks a notable acceleration compared to the 1% growth recorded last year. Read more Ireland Gains €700m from Brexit Customs Duties Ireland has reaped €700m Brexit bonanza from customs duties as reported by The Guardian Prior to Brexit, Britain benefited from customs-free exports to Ireland and the wider EU as a result of its membership in the single market and customs union. New data from Ireland reveals a significant 90% surge in customs duty receipts between 2020 and 2021 coinciding with the implementation of Brexit. Notably, compared to 2019, receipts surged by 52% in 2021, followed by an 80% increase in 2022 and a 72% rise in 2023. Learn More BTOM Checks Throw UK Flower Industry into Chaos It’s a confusing time for many including the flower industry in the UK. Things are not as easy as they used to be after the government introduced physical checks on some food and plants from the EU. Traders were surprised when they had to deal with more checks than anticipated and some lorries had been held for hours before being waved on without inspection. The Department for the Environment, Food and Rural Affairs (Defra) said it would check 3% to 5% of shipments with “medium-risk” items like cut flowers. However, some flower sellers said all their trucks were stopped for checks. Recently Defra insisted it was meeting this target, but some flower wholesalers said every one of their lorries had been pulled aside for checking. This caused problems for customers waiting for their flower deliveries, as the flowers were stuck at the new facility in Kent. Learn More EU – New Zealand Trade Deal sees New Opportunities for EU exporters EU businesses, producers and farmers can now tap into a range of fresh export opportunities with the EU-New Zealand trade agreement. The deal is expected to cut €140 million a year in duties for EU companies Thanks to the EU-New Zealand trade agreement, trade between the two regions could grow by up to 30% over the next decade. This growth may result in EU exports increasing by as much as €4.5 billion each year, while EU investment in New Zealand could rise by up to 80%. EU businesses, producers and farmers are now able to take advantage of new export opportunities with the entry into force of the EU-New Zealand trade agreement on 1st May: Zero tariffs on EU exports to New Zealand. A more open New Zealand services market in key sectors such as financial services, telecommunications, maritime transport and delivery services. Non-discriminatory treatment of EU investors in New Zealand. Improved access for EU companies to New Zealand government procurement contracts for goods, services, works and works concessions. A dedicated chapter to help small business exports. Significantly reduced compliance requirements and procedures. Find out more UK Government Enhances Biosecurity Measures at Trade Border Biosecurity measures have been beefed up as part of the second phase of the Border Target Operating Mode to ensure the safety of imported products and enhance biosecurity at the UK’s trade border. Products which present a ‘medium’ risk to our biosecurity will now undergo identity and physical checks. The checks involve visual inspections and temperature readings of goods. Additionally, ‘high risk’ goods are now checked
Common Customs Issues Faced by Importers and Exporters in 2024
Common Customs Issues Faced by Importers and Exporters in 2024 Global trade plays a pivotal role in a country’s economy. A country’s focus on imports signifies robust local demand and a thriving economy, while a significant export volume creates numerous job opportunities. Thus, to keep the economy stable, it is imperative to maintain a balance between imports and exports, which is heavily influenced by the volume of trade. The volume of global trade is increasing progressively. As per Global Trade Outlook’s recent report “The volume of global merchandise trade is predicted to increase by 2.6% in 2024 and 3.3% in 2025, after declining by 1.2% more than anticipated in 2023.” With the prediction of this massive rise in the number of trades, there come a lot of hurdles and challenges that importers and exporters have to deal with to become successful in the trading world. When you are well informed about all the customs issues that come across importers and exporters prior to trading, you can make better plans on how to tackle them. In this blog, we will take you through all the common challenges and equip you with simple solutions. Changes in customs regulations in 2024 Before delving into the challenges, let’s first examine any modifications in the trading and customs regulations. There exist separate regulations for both imports and exports: Customs import regulations Customs export regulations The UK Government introduced a series of changes in the Border Target Operating Model for 2024. These changes are specifically designed for importers of animals, plants, and Food & Feed Systems. January 31, 2024: There are 3 risk categories for the products (Low, medium, and high). Export health certifications are required for medium and high risk commodities. Certain products, such as medications, plastics, or cosmetics containing animal ingredients, might need to be declared with the IPAFFS. A phytosanitary certificate and an IPAFFS pre-notification for medium and high risk commodities are required for plants and plant products. Fruits and vegetables in the EU are mostly low-risk. April 30, 2024: Depending on the risk level, document and physical checks at designated Border Control Posts. Inspections of EU plants and products deemed high risk are moved to specific Border Control Posts. Oct 31, 2024: Safety and security declarations for imports into the EU will begin on this date. Details will be provided closer to the date. Common customs issues Customs clearance involves ensuring that all imported goods are compliant with the governing rules and regulations. Most traders can find it problematic and complicated, leading to customs clearance delays. Major customs clearance problems are discussed below: Customs documentation Handling custom documents for imports and exports is a major challenge as it requires keen attention and time to be done accurately. According to a report by the Federation of Small Business (FSB), “Nearly 10% of small businesses in the UK have come to an end in the previous five years due to complicated customs documents.” The common documents are the following: Bill of lading The bill of lading acts as a contract between the carrier and shipper. It provides details about tracking the parcel and confirms that the products are received for the shipment. The common bill of lading issues are: Missing or incorrect information, which can lead to clearance delays. Getting the original paper copy for release can be costly and time-consuming. Commercial invoice The commercial invoice provides information about the goods’ quantity and total value. Moreover, it helps calculate the amount of duty and tax to be paid. The common commercial invoice issues are: Missing details, such as product descriptions or origin information, can result in clearance rejections. Inconsistencies between the invoice value and the real value may result in delays and inspections by customs. Packing list A packing list is a comprehensive inventory of the shipment that includes the quantities and contents of every package. The common packing list issues are: Discrepancies in quantity or inaccurate itemisation can result in physical inspection delays. The missing packing list, which can completely impede clearance Certificate of origin The certificate of origin shows the country in which the goods are produced. It helps to determine whether there are any trade restrictions or if a trade agreement is eligible. The common certificate of origin issues are: Acquiring them may necessitate intricate procedures and authentication by governmental entities, resulting in prolonged periods of time. Errors in the certificate may give rise to customs rejections. Adjusting to new customs rules and regulations Customs rules and regulations for importing and exporting countries can change anytime, becoming a nightmare for global traders. Thus, having access to AI-driven customs declaration software that automatically adjusts to any updates is a key to stress-free trading. iCustoms is at the top of the market in this regard, providing you with a sophisticated AI-driven tool, i.e. CDS, to keep you alert of all the fluctuations in customs regulations. The following are some ways that importers and exporters in international trading face difficulties while responding to new customs laws and regulations: Intricacy and Insufficient clarity Updated rules may be hidden: If new regulations are not extensively announced, businesses may not be aware of significant modifications. Uncertainty in interpretation: New rules may be written in technical language, making it difficult to understand their precise intent and scope. Differential implementation: Uncertainty arises from the possibility that new regulations may be implemented differently in various nations or even within the same customs agency. Limitations on time and resources Adaptation costs: Organisations must devote time and money to learning new rules, revising protocols, and retraining employees. Shipments delayed: Uncertainty about new rules may cause delays at customs as documentation is examined or resubmitted. Enhanced compliance costs: New regulations may require additional paperwork or inspections, which would raise operating expenses. Competitive disadvantage Unequal information access: Smaller organisations may be at a disadvantage since larger enterprises with specialised compliance teams may adjust more quickly. Supply chain disruption: Delays caused by adjusting to new regulations may affect delivery
Beyond Recognition: The Significance of Our Multimodal 2024 Finalist Status
Beyond Recognition: The Significance of Our Multimodal 2024 Finalist Status Efficiency and innovation are key components of the global logistics and trade industries. Every year, the Multimodal Awards honour these same ideas by rewarding businesses that push the envelope and promote smooth international trade. We are happy to announce that iCustoms has been selected as a finalist for Multimodal 2024’s prestigious “Customs Technology Partner of the Year” award. This is much more than just an honour to be recognised. The Multimodal Awards are impartial recognition awards for people and businesses in the supply chain that excel. The industry-leading voting method, in conjunction with a stringent selection process, guarantees that firms of all sizes are represented. This makes the Awards one of the most fair in the market, and being shortlisted places us alongside some of the industry’s most respected names. Fulfilling Multimodal’s High Standards The Multimodal Awards have stringent criteria. A long-term vision, creative thinking, positive business impact, and company-wide acceptance are among the key factors considered when evaluating entrants based on their contribution to sector innovation. The focus is on projects and products that have been proven to be effective and have actually improved the lives of consumers. Our ranking as finalists is a strong indicator that our AI-driven customs technology solutions live up to these demanding expectations. We express our deep gratitude to the Multimodal judges for recognising our commitment to quality and innovation in this important area. Our achievement as finalists clearly shows our steadfast dedication to creating cutting-edge artificial intelligence (AI)-driven customs technology. Thanks to iCustoms AI-powered solutions, businesses can handle the complexity of trade compliance with unmatched efficiency and precision. The Multimodal 2024 shortlist does not signify the conclusion of our journey; rather, it stimulates our desire for continual innovation. Our mission at iCustoms is to provide businesses with the most effective and frictionless trade compliance solutions we can. We always work to improve our services and provide our clients with outstanding value by utilising AI and machine learning. Being a finalist for Multimodal 2024 is more than merely an award; it’s a testament to our dedication to quality work and a guarantee of further innovation to come. We are excited to work with businesses to help them achieve a more seamless and productive trade journey by utilising the revolutionary potential of AI-driven customs technology. Ready to witness the effectiveness and precision of AI-driven customs solutions? Examine our selection of top-notch technologies to see how iCustoms can enable your business to have a more efficient and seamless trading journey. To find out more about our services or to arrange a free consultation, contact us right now. You may also like: 06 August 2024 Trade Compliance News – August 2024 Read More 30 July 2024 iCustoms in the Spotlight as Supply Chain Excellence Award 2024 Finalist Read More 18 July 2024 Trade Compliance News – July 2024 Read More 05 July 2024 Trade Compliance News – July 2024 Read More 20 June 2024 Trade Compliance News – June 2024 Read More About iCustoms iCustoms is an all-in-one solution helping businesses automate customs processes more efficiently. With AI-powered and machine-learning capabilities, iCustoms is designed to streamline your all customs procedures in a few minutes, cut additional costs and save time. Start Now Solutions Customs Agents Traders Couriers Products Import Export Classification Intelligent Document Processing Customs Audit Landed Cost Calculation Restricted Screening
All You Need to Know About Customs Import Duty and Tax
All You Need to Know About Customs Import Duty and Tax When importing items outside the European Union, you must pass through the customs import duties and taxes. However, entering this exciting world involves encountering a number of unforeseen issues, particularly regarding customs charges. A vital electronic document, an import customs declaration, provides comprehensive information regarding the import, including your details, those of the exporter, product specifications, value, and country of origin. By ensuring the accuracy of this declaration and having prior knowledge of applicable duty rates, you can prevent any mishaps. According to the World Trade Organisation, “The global trade has increased to $25.3 trillion in 2022.” Given this increasing number, it’s clear that comprehending the financial importance of importing goods is crucial. This exponential rise highlights how imports are becoming more and more significant in today’s trade environment. In the contemporary interconnected global economy, success relies on the capacity to comprehend the financial ramifications of importing goods. This blog post delves into the importance of customs duties and taxes and everything you must know. Understanding customs import duties A fee imposed by a government on products entering a country is known as a customs duty, often referred to as an import duty or tariff. The customs duties have two main goals: Protecting local industries: Placing tax or duty on imported goods encourages local job development and manufacturing, which will reduce their competitiveness when compared to domestically produced alternatives. Government revenue: Customs charges provide governments with a considerable amount of revenue that goes towards funding national budgets. Types of Taxes and Duties HMRC primarily implements two types of taxes and duties on imported goods. Customs duties Value added tax Customs duties Customs duties are applied to imported goods by HMRC that are valued at more than 135 GBP. These import duties normally range from 0% to 25% of the value of the goods; which are not applied to gifts. If the gifts are priced between 135-630 GBP, they are subject to a custom import rate of 2.5% or less, while gifts over GBP 630 will be subject to higher rates based on their individual commodity codes. Value added tax (VAT) Generally, imported goods are subjected to 20% of the VAT rate. Nonetheless, a few items, such as child car seats, health products, and fuel heating, incur to 5% VAT rate. It is crucial to remember that even though most books, food, and children’s clothes are VAT-exempt, the sale of these items needs to be reported on your VAT return. Furthermore, gifts worth less than GBP 39 are VAT-free. Calculating customs duties and taxes Calculating customs taxes and duties is a major challenge faced by UK importers. As per Statista survey, “30.3% importing businesses had to deal with customs duties and taxes problems at the UK borders”. To keep you free from this hassle, iCustoms has come up with its automated tool, i.e. iCalculator; it helps with tax calculations within a matter of minutes. Furthermore, we will also equip you with the manual calculation of the customs duties and VAT by considering the following example: Calculating customs duties Customs duties can be calculated by two methods: CIF CIF takes into account the entire cost, which includes the value of the item, insurance, and freight. CIF value is calculated by adding the insurance and freight costs to the commercial value of the goods. For instance, if you have 2000 umbrellas worth GBP 5 per piece, the total GBP becomes 10,000. Plus GBP 500 for insurance and freight, your CIF value is GBP 10,500. To determine the customs duties, you then multiply this CIF value by the applicable customs duty rate, which in this case, is 4%. Thus, 10,500 GBP x 4% = 420 GBP. The CIF value plus the duties would equal the total cost of your shipment, including customs duties: GBP 10,500 + GBP 420 = GBP 10,920. FOB FOB does not include goods or insurance; it only accounts for the value of the goods. To calculate the duty rate, just multiply the total value of your goods. In the identical scenario, the customs duties would be GBP 400 with a total goods value of GBP 10,000 and a 4% duty rate. Customs duties and the total goods value equal GBP 10,000 + GBP 400 = GBP 10,400, which is the total cost of your shipment. Calculating Value-Added Tax (VAT) After calculating the value of your goods either by FOB or CIF, multiply it by the VAT rate designated by the UK government on the tariff trade site. Resuming the same example, the calculation is carried out as follows: CIF GBP 10,500 x 20%= 2,100 GBP FOB GBP 10,000 x 20 %= 2,080 GBP Comprehending custom import fees A number of costs related to customs clearance must be taken into account when importing products. Among them exist: Customs import rate: The specific rate for a given commodity depends on the product category and the country of origin. Prior research on duty rates is necessary for an accurate estimate of costs. Specific import information and rules It is essential to do an extensive study on customs import regulations (also known as import restrictions) prior to importing any items. This study ought to include: Comprehending regulations: Become acquainted with the particular import laws governing the products you plan to import. These rules could cover things like licence requirements, restricted products, and standards for product safety. The bottom line Gaining knowledge of customs duties, import taxes, and the import clearance procedure will enable you to facilitate the entry of goods into a country in a streamlined and economical manner. When creating import strategies, it is imperative to conduct comprehensive regulatory research, ensure the preparation of precise documentation, and account for all possible expenses. For additional information regarding import duties and taxes, refer to authoritative resources furnished by your country’s customs authority, such as iCustoms. Our sophisticated AI-driven iCalculator automates the calculation of customs
From Streamlined to Stalled? Solving Rule of Origin Challenges in UK Construction with iCustoms
From Streamlined to Stalled? Solving Rule of Origin Challenges in UK Construction with iCustoms The construction industry has traditionally relied on the free flow of materials across borders. The European Union customs union provided advantages to UK construction sites prior to Brexit. Projects could use steel beams from Germany, pre-cast concrete blocks from Ireland, and high-performance glazing from France without worrying about where they came from. This facilitated efficient project timelines, optimised costs, and fostered collaboration within the European market. But a new level of complexity has surfaced since the UK left the EU customs union: Rules of Origin. Understanding Rules of Origin and Their Impact: RoO is a regulation within Free Trade Agreements (FTAs) that determines the “economic nationality” of a good. These rules define the minimum amount of processing or transformation a product must undergo in a specific country to be considered “originating” from that country. RoO is crucial because FTAs often offer preferential tariff rates (reduced or eliminated import duties) for originating goods. In the UK construction industry context, RoO will significantly impact the import of essential materials. The Pre-Brexit Landscape: Prior to Brexit, UK construction companies had no trouble sourcing materials from any part of the EU without considering their country of origin. Import taxes did not apply to materials as long as they came from within the bloc. This streamlined process facilitated faster project completion and minimised import costs for construction firms. The Post-Brexit Puzzle: With Brexit, the free flow of construction materials has ended. Now, the origin of each component, from steel beams to wiring and specialised insulation, becomes a critical factor in determining import duties. Construction companies need to ensure that essential materials meet the RoO requirements of the UK-EU Trade and Cooperation Agreement (TCA) to avoid facing significant tariff increases. Examples of RoO Implications: A UK construction firm planning a high-rise office building might face import duties on steel beams sourced from Germany if the beams still need sufficient processing within the EU to meet the UK’s RoO criteria. Pre-fabricated bathroom pods manufactured in Ireland and intended for a UK residential development could be subject to import duties if the manufacturing process in Ireland doesn’t satisfy the UK’s RoO requirements for prefabricated building units. High-performance glazing imported from France for a sustainable office building project in London could incur import duties if the glazing fails to meet the minimum processing standards outlined in the UK-EU TCA for originating goods. Building Resilience in the New Landscape: The impact of RoO on the UK construction industry is undeniable. Businesses can take into account the following tactics to successfully navigate this new environment and guarantee project success: Supply Chain Optimisation with AI-Powered Solutions: Make a thorough analysis of current supply chains with iCustoms’ AI-powered tools. These tools can analyse vast amounts of data to identify the origin of all materials and assess the potential impact of RoO on project costs. Leverage iCustoms’ risk assessment modules to proactively identify potential RoO compliance issues and areas where sourcing strategies must be adjusted. Enhanced Collaboration and Transparency: iCustoms’ secure communication platform facilitates close collaboration with EU-based suppliers. Businesses can use this platform to understand suppliers’ RoO compliance efforts and explore alternative sourcing options within the UK or countries with favourable RoO agreements with the UK. Expert Guidance and Streamlined Compliance: iCustoms offers a team of customs specialists and international trade consultants who can provide in-depth guidance on RoO compliance, customs procedures, and navigating the UK’s post-Brexit trade landscape. iCustoms’ AI-powered solutions automate many aspects of customs documentation and data management, ensuring efficient and compliant import processes. Saving Time and Simplifying Customs Declarations: Traditional customs declarations can be complex and time-consuming, burdening construction projects with tight deadlines. iCustoms’ AI technology streamlines this process by: Automating Data Entry: Minimise manual data input by leveraging pre-populated forms and intelligent data capture from invoices and other documents. Classification Assistance: iCustoms’ AI helps classify construction materials accurately using the UK Trade Tariff Schedule, eliminating errors and potential delays. Real-Time Compliance Checks: The platform performs instant compliance checks to ensure all documentation meets RoO requirements and avoids costly penalties. Conclusion: The UK construction industry is adapting to a new reality shaped by RoO. While these regulations present challenges, proactive companies that invest in understanding RoO requirements, optimising supply chains with AI-powered solutions from iCustoms, and seeking expert guidance can mitigate risks, ensure efficient project completion within budget, and contribute to the nation’s continued infrastructure development. You may also like: 30 April 2024 Trade Compliance News – April 2024 Read More 25 April 2024 Stuck in Customs? Build a Smoother Supply Chain for Your Manufacturing Clients Read More 19 April 2024 iCustoms Receives ICC Digital Trade Award for “Best Port or Logistics Systems” Read More 18 April 2024 iCustoms Board Member Series: Michael Burnett Read More 04 April 2024 iCustoms Board Advisor Series – Mark Denney Read More About iCustoms iCustoms is an all-in-one solution helping businesses automate customs processes more efficiently. With AI-powered and machine-learning capabilities, iCustoms is designed to streamline your all customs procedures in a few minutes, cut additional costs and save time. Start Now Solutions Customs Agents Traders Couriers Products Import Export Classification Intelligent Document Processing Customs Audit Landed Cost Calculation Restricted Screening
Trade Compliance News – April 2024
Trade Compliance News – April 2024 New SPS Import Controls Come Into Effect There’s been some confusion amidst the new BTOM checks especially following a recent report in the Financial Times, UK port authorities were informed that health and safety checks on EU imports wouldn’t proceed as scheduled. However this has been debunked and the next round of BTOM border checks on plant and animals products proceeded as planned.The 2nd Phase of the BTOM SPS Import Controls commenced from 30th April 2024 at these BCPS ( border control posts )that will carry out new SPS checks The priority for physical checks will be the highest risk goods, and Port Health Authorities will be conducting documentary checks on consignments of all risk levels and will contact traders where they have concerns. You must adhere to the following guidelines to avoid disruptions to your business and supply chain. Ensure that goods arrive via a designated Border Control Post (BCP) or Control Point (CP) suitable for your commodity type. If requested, present the consignment for documentary, physical, and identification inspections at the designated BCP or CP. Additionally you’ll need to pay the common user charge if you are a UK business importing a consignment of goods that enters or transits through Great Britain through the Port of Dover or Eurotunnel. The charge will apply even if the authorities do not select your consignment for SPS checks. See details EU Enforces Ban on Goods Made with Forced Labour New regulation enabling the EU to prohibit the sale, import, and export of goods made using forced labour has been approved. The European Parliament announced that both member states and the European Commission (EC) will receive enhanced authority to investigate “suspicious goods, supply chains, and manufacturers. Companies found to be using forced labour will face consequences. They will need to remove their products from the EU single market and either donate, recycle, or destroy them. Non-compliant companies may be subject to fines. However, if a company eliminates forced labour from its supply chains, its goods may be permitted back into the EU single market. Read the press release here Suez Canal Traffic Plummets by Two-Thirds Amid Red Sea Crisis The Data from the Office for National Statistics (ONS)highlights that during the initial week of April this year, the number of cargo and tanker ships traversing the Suez Canal was 71% and 61% lower compared to ship crossings recorded at the same time in 2023. The decline occurred in both tanker and cargo ships The Suez Canal is one of the most important maritime canals in the world. Since the start of the war in the middle east in October 2023, Houthi rebels have been attacking vessels travelling through the Red Sea. This has resulted in significant disruption after major shipping companies announced they would not be using the trade route. The ONS said that these numbers “align with the widely reported maritime disruption in the Middle East.” Read more Notice issued to UK Exporters The Export Control Joint Unit (ECJU) has recently issued a notice to exporters, bringing attention to recently issued compound settlements for breaches of strategic export controls. This is to ensure that exporters comply with the updated licensing requirements. Between January and March 2024, HM Revenue and Customs (HMRC) issued compound settlement offers to six UK exporters totalling just over £1.3 million. These settlements relate to unlicensed exports of Military listed goods, dual use goods and related activity controlled by The Export Control Order 2008. Over the 12 months, HMRC has seen an increase in the number of voluntary disclosures relating to: Unlicensed exports Incorrect licence usage Breach of licence conditions Find Out More Surge in UK Car Exports to Russia’s Neighbouring Markets New official data reveals that there’s been a remarkable, unprecedented, and largely unexplained influx of millions of pounds worth of British luxury cars into neighbouring states of Russia . According to HM Revenue & Customs, British car exports to Azerbaijan totaled £26 million. Azerbaijan’s ascent has coincided almost to the month with the imposition of sanctions on the export of cars to Russia. This has transformed a small, relatively poor economy into one of the most lucrative luxury car markets globally, rivalling Switzerland, Luxembourg, and Saudi Arabia. Read More You may also like: 02 May 2024 From Streamlined to Stalled? Solving Rule of Origin Challenges in UK Construction with iCustoms Read More 30 April 2024 Trade Compliance News – April 2024 Read More 25 April 2024 Stuck in Customs? Build a Smoother Supply Chain for Your Manufacturing Clients Read More 19 April 2024 iCustoms Receives ICC Digital Trade Award for “Best Port or Logistics Systems” Read More 18 April 2024 iCustoms Board Member Series: Michael Burnett Read More About iCustoms iCustoms is an all-in-one solution helping businesses automate customs processes more efficiently. With AI-powered and machine-learning capabilities, iCustoms is designed to streamline your all customs procedures in a few minutes, cut additional costs and save time. Start Now Solutions Customs Agents Traders Couriers Products Import Export Classification Intelligent Document Processing Customs Audit Landed Cost Calculation Restricted Screening
