Customs Practitioners Group

Newsbites 2003

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Links to Newsbites' archive: | 2005 | 2004 |

June 2003

Customs Duty Rates Changing (June 2003)

February 2003

Duty Suspended on Military Imports

January 2003

C&E Accept Duty Relief Programme Inadequacies

List of JCCC Information Papers issued in 2002

Customs Duty Rates Changing (June 2003)

Material provided by Barbara Scott

Following its three year review, the European Commission is making changes to the operation of the Generalised System of Preferences. The GSP provides for goods originating in developing countries to attain a lower, sometimes zero, rate of duty. In accordance with EC Regulation 815/2003, which was published on 13 May, some more goods from beneficiary countries will attain preferential tariffs but many more will lose the preferential status they currently enjoy and, specifically, merchandise from China is badly affected.

Thanks to the objections raised by a number of Member States, the Commission has not been able to introduce the duty increases with immediate effect. They will be introduced in two equal stages - the first 50% increase will take place on 01 November 2003 and the second increase on 01 May 2004, thus bringing in the full rate of duty. This two stage increase will lessen the blow and should allow Christmas imports to be relatively unscathed.

However, the duty reductions take effect immediately (see further details below).

It is not possible for to list all the products that are affected by this change but anyone importing goods from the following countries could be affected:

Argentina, Brazil, Chile, China, Colombia, Costa Rica, Kazakhstan, Kuwait, Malaysia, Mauritius, Mexico, Morocco, Russia, Thailand and Tunisia.

For example, many plastic products from China are currently free of duty under GSP but the duty will increase to 3.2% on 1 November this year and to 6.5% from 1 May 2004.

For goods which have been added to the list of products that obtain preferential status, such as toys from Thailand, importers will need to present authentic GSP Forms A to Customs to obtain the duty reduction. In fact, this legislation is retrospective to 1 January this year so any importers who can obtain retrospective GSP Forms A from their suppliers will be able to apply to Customs for a refund of the duty paid.

Importers should therefore

1. check whether the duty benefit they currently enjoy under GSP will continue;

2. check whether they can attain a duty benefit on goods they currently import at the full rate of duty;

3. consider resourcing goods to benefit from GSP;

4. recost their products accordingly.

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Duty Suspended on Military Imports (February 2003)

Material provided by Barbara Scott

Council Regulation 150/2003 was published on 30 January suspending the duty on imports of certain weapons and military equipment.

However, the relief not only applies to imports of most arms and ammunitions and parts and accessories thereof, but also to a whole raft of goods including certain vehicles, machinery and clothing. It also applies to parts and components for incorporation or fitting into listed goods supplied to the defence authorities of the Member States.

This legislation has been under discussion for many, many years and was often regarded to be a matter of national security and outside the Treaty of Rome. Clearly the current international climate has persuaded the politicians to push this through – it was not a matter agreed through the usual Code Committee proceedings in Brussels.

In the UK, it will replace the relief already allowed under DODIM and Customs will be meeting with the MOD to agree how it will operate – each Member State has six months within which to inform the Commission as to how they will implement the regulation.

A further regulation is also under discussion which would extend the relief, under PCC, to raw materials used to produce goods for the military.

UK Customs will issue a JCCC information paper once they have more operational details (how the get the appropriate certificate for duty free entry, Customs Procedure Codes, etc)

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C&E Accept Duty Relief Programme Inadequacies (January 2003)

Material provided by Phil Challen

HM C&E has published the JCCC sub-committee report into the implementation of the changes in law affecting customs procedures with economic impact - see http://www.hmce.gov.uk/forms/notices/jccc0245-ann.pdf . The executive summary is a wimpish fudge designed to bore the inquisitive into a stupor to arrest further reading, but the report itself pulls no punches.

In essence, Customs accepts that its mass of publicity went largely undistributed, and even when it was distributed, it was not targeted in any way (the summary merely says "some of this material did not reach or was not read by its intended audience"). As a result, both Customs and the Trade are largely ignorant of the changes introduced by the most wide-ranging amending legislation since the introduction of the customs code.

The blame for this is placed squarely on poor management within the Department. The implementation date occurred during a shambolic internal reorganisation, in which the relevant policy team was reduced by 40%, losing all expertise in Warehousing, Free Zones, OPR, PCC and Temporary Importation. In addition, the postcode system for allocating responsibility to outfield offices was in turmoil as Collections became Regions and local offices transferring traders to new supervising offices failed either to post information leaflets or to transfer the leaflets with the traders.

Receiving offices were either unaware of the need to circulate information to these traders or else elected not to do so given so many other things to do as a result of the reorganisation. In addition, the traditional departmental lines of communication had been abolished in the full knowledge that more modern methods were not being regularly accessed by the staff.

Of those traders who responded to Customs questionnaire, an astonishing 93% did not receive updated notices about changes affecting the regimes for which they were authorised! 75% of respondents had received no contact of any kind from Customs about the changes. Concerns are expressed in the report that the same management technique that caused this problem - reallocation of staff without thought to how their tasks will be performed in their absence - will mean that INF and Carnet forms cannot be stamped at the frontier because the staff have been reassigned. Pending introduction of electronic validation of such forms, the report asks for a clear policy statement on the stamping of them. This will be one to watch out for.

The report also admits what advisors have long known - that HM C&E Officers have got out of the habit of reading the books of guidance, and the Department has consequently dumbed down to the level of the Public Notice. The report recommends that priority be given to the delivery of International Trade Foundation and Excise & International Trade Legal & Technical Training to raise standards and the awareness of staff to the legislative requirements of the regimes.

Also recommended is further assurance activity in the area of CPEI transfers. These procedures were significantly changed by the new legislation, and as most traders are unaware of changes, most will be operating inaccurately.

The lack of effective control of C101 simplified IPR is acknowledged, and a call is made (apparently more in hope than expectation) for electronic systems to improve matters.

In full, the report recommends:

1. That future publicity campaigns recognise the important role of customs agents and ensure they are incorporated within the communications strategy (paragraph 3.1.1).

2. That consideration be given to additional targeted publicity of the legislative changes (paragraph 3.1.7).

3. That urgent consideration be given to the introduction of a central register of all CPEI, End-Use and free zone authorisation holders (paragraph 3.1.8).

4. That those involved in meeting the department's commitment to business education should be fully conversant with the procedures and should have undergone EITLTT [training] (paragraph 3.4.4).

5. That Customs gives a clear policy statement on the continued stamping of documents at entry to and on departure from the UK (paragraph 3.4.5).

6. That to ensure the UK is applying retrospection consistently and in accordance with the Explanatory Notes and to provide further guidance on its application, Customs approach the Commission with examples of retrospection granted (paragraph 4.1.1).

7. That a list of mandatory checks be published on the receipt of claims and returns, the resources required to carry out these checks are quantified and supervising offices are resourced to enable compliance (paragraph 4.1.4).

8. That in the long term, consideration be given to the centralisation of all returns and claims in one site to ensure a consistent approach to the handling of these documents (paragraph 4.1.4).

9. That priority is given to the delivery of International Trade Foundation training & EITLTT to raise standards and the awareness of staff to the legislative requirements of the regimes (paragraph 4.1.6).

10. That further assurance activity should be targeted on the operation of the transfer procedures as a key concern (paragraph 4.1.7).

11. That priority is given to an automated system which enables electronic completion and transmission as well as basic automatic eligibility checks of applications for simplified authorisations (paragraph 4.1.8).

12. That in the interim an assurance strategy is developed and implemented to address the eligibility risks for the simplified authorisation procedures (paragraph 4.1.8).

13. That in the absence of meaningful information, the UK continues to press the Commission for a reduction in the level of statistical information to be provided with the aim of removing simplified authorisation statistics entirely (paragraph 4.1.9).

14. That as the number of applications for inward processing authorisation in respect of agricultural goods involving the economic test is at a lower level than before the implementation of the revised legislation, there is no pressing argument for a further reform of the economic test for such goods (paragraph 5.1).

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List of JCCC Information Papers issued in 2002 (January 2003)

Click here for a list of JCCC Information Papers issued in 2002

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