ITS Knowledge Space

In these times where minimising costs is high on all our agendas, one of the options available for importers is to seek an autonomous duty suspension from the European Commission for a particular product. However, this is arguably one of the most political areas of customs law and an application should not be made without strong research, robust drafting and patient negotiations with (potential) objectors.

January and February has been a strange couple of months. Business confidence appears to returning but at a much slower rate than anticipated and hoped for. There have been a plethora of tax changes (not least the return of VAT to 17.5% from 15%) that businesses have had to take on board but the predominant impression so far is that businesses are still very cautious about expenditure and financial directors are seemingly unwilling to spend unless there is an immediate visible return on investment and addition to the "bottom line".

Most businesses would agree with the importance of reducing inbound costs and the likelihood of unexpected additional tax demands and penalties.  However, in our experience, very few businesses do actually review their customs functions or are even aware of the full extent of their legal obligations.  This failure is usually borne out of lack of the required level of customs knowledge or resources within the business.

Modern customs regulations are complex and hard to understand for even the biggest players in International Trade. The European Customs Code and Implementing Regulations are cumbersome and on the whole inaccessible to the ordinary importer. However, the obligations that they impose on businesses are significant as are the obligations on HMRC to ensure that businesses are complying with their legal obligations and paying the correct duty owed.

Most businesses delegate much of the customs work to third party freight forwarders and in-house staff are forced to manage urgent daily customs issues as part of their often broader areas of responsibility.

The Modernised Customs Code (MCC)   was adopted in April 2008 but the process of bartering and haggling over the Implementing Regulations is still continuing. However, it is anticipated that these regulations will be finalised at some point in 2010 for implementation by 2013.

The lull in between finalisation and implementation should give businesses time to acquaint themselves with the changes that are coming and to realign their practices and procedures accordingly. However, in our experience very few even know about the proposed changes and even fewer are planning to realign accordingly.
Therefore, this paper, whilst no means an exhaustive summary of what the new code is all about, will offer a brief synopsis of the changes that will be occurring and how they will impact upon your customs operations.