IMPORTING AND EXPORTING This information sheet summarises UK import and export procedures. The factors covered are: 1. Overview 2. Imports 3. Exports 4. Further information The UK Government agency responsible for the collection of customs and excise duties is HM Revenue & Customs. For detailed information on the full responsibilities of businesses that intend to import or export please see: www.hmrc.gov.uk 1. OVERVIEW The UK is one of the leading trading nations in the world. It is the second largest exporter and third largest importer of commercial services, and the tenth largest exporter and sixth largest importer of merchandise (Source: World Trade Organization, 2009). An important aspect of the UK?s import and export policy is its membership of the European Union (please see Appendix A), a customs union where imported goods can circulate freely within European Union member states once customs duty and any other charges have been paid. Goods that are exported from the UK are not charged customs duty. Due to the UK?s multiple international trading agreements, many exports from the UK also receive preferential tariff rates of duty (often nil) in their country of destination. 2. IMPORTS Imported goods that enter European Union member states from outside of the European Union are subject to a common external tariff entitled the ?Common Customs Tariff? (CCT). In order to calculate the CCT, the European Union annually publishes a ?Combined Nomenclature? that is based on the ?Harmonised Commodity Description and Coding System? used by most trading nations worldwide. The Combined Nomenclature shows the conventional duties payable across the European Union and also gives general information on tariffs and other measures affecting the import, export and transit of goods, the valuation of goods for import duty purposes, VAT and excise duties. Duties are usually calculated as a percentage of the value of the goods imported, although some goods are liable to specific rates (for example, euros per kilogram). For further information please see: www.bis.gov.uk/policies/trade-policy-unit/importing-into-uk or call the HMRC Customs Tariff Classification Enquiry Helpline on: +44 (0)1702 366 077. In order to fully establish the level of customs duty to be paid, the European Union applies ?rules of origin? to identify the country in which a product has originated (or has ?acquired origin?). Once this has been established and the requisite tariff has been paid, the goods can move between European Union countries without further duty having to be paid (although the goods may still be liable to national taxes). The two main types of European Union rules of origin are ?preferential rules? and ?non-preferential rules?. For detailed information on European Union rules of origin please contact the Department for Business, Innovation & Skills on: +44 (0)20 7215 5059 or see: http://www.bis.gov.uk/files/file45006.pdf a) Preferential rules The European Union operates preferential agreements with many countries (known as ?preferential partner countries?). These are listed in Appendices B to D and include: ? members of the European Free Trade Area, ? many developing countries, ? the African, Caribbean and Pacific states, ? overseas countries and territories of European Union member states, and ? Central and Southern America. The preferential agreements allow industrial goods originating in preferential partner countries and being imported into the European Union to pay less duty than the common external tariff, or no duty at all. A product acquires origin if it is ?wholly produced? or ?sufficiently processed or worked? in a preferential partner country. Generally, for a manufactured product incorporating imported components, ?sufficiently processed or worked? means that the final product must be classified under a different tariff heading from any non-originating components (components not manufactured in the preferential partner country from which the final product is being imported). b) Non-preferential rules The non-preferential rules apply to goods imported from any country outside the preferential partner countries. Non-preferential countries include Australia, Canada, Japan, New Zealand, South Korea and the USA. For non-preferential rules, there are two main categories of goods: ? goods ?wholly obtained or produced? in a single country, or ? goods ?whose production involved more than one country?. The rules state that the originating country of goods is the country where the last major process took place. For each consignment of goods imported into the European Union, a customs declaration (?the entry?) must be made in order to assess the duty payable, identify any claims for relief (see below) and help checks on controlled goods. A customs declaration is not necessary for most consignments from within the European Union. The UK has progressively abolished almost all import licensing controls although some national import restrictions for public health and security reasons have been retained. Most goods are included in the Open General Import Licence (OGIL) and can be imported without further licensing formalities. Some goods, including agricultural and certain textile products, are excluded from the OGIL and require a specific licence for importation. For further information, please contact the Import Licensing Branch of the Department for Business, Innovation & Skills on +44 (0)1642 364333 or at: www.bis.gov.uk/Policies/trade-policy-unit/importing-into-uk/import-licensing- branch There are various forms of relief that may be available on payments of import duty, such as: ? ?Temporary Importation? relief (Customs Notice 200), ? ?Inward Processing? relief (Customs Notice 221), ? ?End-use? relief (Customs Notice 770), ? ?Returned goods? relief (Customs Notice 236), and ? ?Outward Processing? relief (Customs Notice 235). For further information on import reliefs please see: www.hmrc.gov.uk and the relevant Customs Notice. Businesses operating in the UK can also choose to take advantage of the import benefits offered by Free Zones and customs warehouses: ? There are five Free Zones in the UK in which non-European Union goods are treated, for the purposes of import duties, as being outside of the customs territory of the European Union (meaning that import duties are not payable until the goods are released for free circulation). For further information on UK Free Zones please see ?Customs Notice 334? at: www.hmrc.gov.uk or the UK Trade & Investment information sheet entitled ?Free Zones?. ? Customs warehouses allow businesses to hold non-European Union goods without payment of the duty or VAT due at import. Goods can be stored in a specific customs warehouse or in an ?inventory system? authorised and approved by HM Revenue & Customs. Duty and VAT must be paid at the time goods are delivered for use in the UK or, under deferment arrangements, within a fixed time afterwards. Deliveries for re-export outside the European Union are free of all duties and VAT. Various operations such as cleaning, stocktaking and packing may also be undertaken while the goods are stored in the customs warehouse, although manufacturing is not allowed. For further information please see ?Customs Notice 232? at: www.hmrc.gov.uk For a detailed guide to import procedures in the UK please see: http://customs.hmrc.gov.uk/channelsPortalWebApp/channelsPortalWebApp.por tal?_nfpb=true&_pageLabel=pageImport_InfoGuides&propertyType=document &id=HMCE_CL_001172 or contact the National Advice Service Helpline on: +44 (0)845 010 9000 or +44 (0)2920 501 261. 3. EXPORTS Exporting from the European Union and the UK is a straightforward process. Many exports from the European Union receive preferential tariff rates of duty (often nil) in their country of destination. The goods must meet the specified rules of origin contained in the European Union agreement with the particular destination country. In the UK, exporters of goods must present an export declaration to Customs before the goods leave the country (this also applies to goods that are leaving the European Union via other member states). Most exports are cleared promptly by Customs via the electronic ?New Export System?, but licences, permits and certificates are required for certain goods (either for exporting from the UK or for presentation in the importing country). For further information please see: http://bis.gov.uk/Policies/export-control-organisation Businesses in the UK must, for VAT purposes, maintain proof of exports, incorporating a valid commercial or official evidence of export, supported by relevant commercial documents. These may include the customer?s order, contract correspondence, copy export invoices, advice notes, consignment notes, packing lists, insurance and freight charges, evidence of payment and receipts from abroad. All documents must clearly identify the exporter and the goods. A detailed guide to export procedures can be found at: http://customs.hmrc.gov.uk/channelsPortalWebApp/channelsPortalWebApp.por tal?_nfpb=true&_pageLabel=pageImport_InfoGuides&propertyType=document &id=HMCE_CL_001172 4. FURTHER INFORMATION This information sheet was updated in March 2010. As information changes from time to time, please contact the organisations listed or UK Trade & Investment to confirm any item that you intend to rely on. This information sheet was produced by the Marketing Group of: UK Trade & Investment 9th Floor Kingsgate House 66-74 Victoria Street London SW1E 6SW Tel: +44 (0)20 7215 4957 Email: enquiries@uktradeinvest.gov.uk Website: www.uktradeinvest.gov.uk APPENDIX A - THE EUROPEAN UNION The fiscal territory of the European Union consists of the following: ? Austria ? Belgium ? Bulgaria ? Cyprus ? Czech Republic ? Denmark (except the Faroe Islands and Greenland) ? Estonia ? Finland ? France (including Monaco) ? Germany (except Busingen and the Isle of Heligoland) ? Greece ? Hungary ? The Republic of Ireland ? Italy (except Livigno and Campione d'Italia) ? Latvia ? Lithuania ? Luxembourg ? Malta ? Netherlands ? Poland ? Portugal (including the Azores and Madeira) ? Romania ? Spain (including the Balearic Islands but excluding Ceuta and Melilla) ? The Slovak Republic ? Slovenia ? Sweden ? United Kingdom There are also ?special territories? which are within the European Union customs area but are outside the European Union fiscal territory. These include the following: ? Andorra ? The Åland Islands (Finland) ? The Channel Islands ? The Canary Islands (Spain) ? The overseas departments of France (Guadeloupe, Martinique, Réunion and French Guiana) ? Mount Athos (Greece) Goods entering the UK from the special territories are, for VAT purposes, treated as imported goods. APPENDIX B PREFERENTIAL TRADING ARRANGEMENTS The European Union has concluded the following preferential trading arrangements: ? Reciprocal agreements with the following: ? Algeria, Albania, Chile, Croatia, Egypt, Faroe Islands, Iceland, Israel, Jordan, Lebanon, Liechtenstein, Macedonia, Mexico, Morocco, Norway, Palestinian Authority, South Africa, Switzerland, Syria, Tunisia and Turkey. ? Autonomous non-reciprocal arrangements: ? Bosnia-Herzegovina, Kosovo, Moldova, Montenegro and Serbia, ? Overseas countries and territories of European Union member states (please see Appendix C), and ? Developing countries, under the Generalised System of Preferences (please see Appendix D). APPENDIX C OVERSEAS COUNTRIES AND TERRITORIES OF EUROPEAN UNION MEMBER STATES ? Overseas countries and territories of the United Kingdom: ? Anguilla ? British Antarctic Territory ? British Indian Ocean Territory ? British Virgin Islands ? Cayman Islands ? Falkland Islands and Dependencies ? Montserrat ? Pitcairn Islands ? St Helena and Dependencies ? South Sandwich Islands and Dependencies ? Turks and Caicos ? Overseas country of Denmark: ? Greenland ? ?Collective territoriales? of the French Republic: ? French Guiana ? Guadeloupe ? Martinique ? Réunion ? Overseas territories and territorial communities of the French Republic: ? French Polynesia ? French Southern and Antarctic Territories ? Mayotte ? New Caledonia and Dependencies ? St Pierre and Miquelon ? Wallis and Futuna Islands ? Overseas countries of the Netherlands: ? The Netherlands Antilles (Bonaire, Curaçao, Saba, St Eustatius, St Martin) and Aruba APPENDIX D DEVELOPING COUNTRIES AND TERRITORIES WITH GENERALISED TARIFF PREFERENCES Afghanistan Cook Islands Macao São Tomé and Algeria Costa Rica Madagascar Principe American Samoa Côte d?Ivoire Malawi Saudi Arabia Angola Cuba Malaysia Senegal Anguilla Djibouti Maldives Seychelles and Antarctica Dominica Mali Dependencies Antigua and Dominican Republic Marshall Islands Sierra Leone Barbuda Ecuador Mauritania South Africa Argentina Egypt Mauritius South Georgia and Armenia El Salvador Mayotte South Sandwich Aruba Equatorial Guinea Mexico Islands Azerbaijan Eritrea Micronesia Solomon Islands Bahamas Ethiopia Federated States Somalia Bahrain Falkland Islands Moldova Sri Lanka Bangladesh Fiji Mongolia Sudan Barbados French Polynesia Montserrat Suriname Belarus* French Southern Morocco Swaziland Belize and Antarctic Lands Mozambique Syrian Arab Benin Gabon Myanmar** Republic Bermuda Gambia Namibia Tajikistan Bhutan Georgia Nauru Tanzania Bolivia Ghana Nepal Thailand Botswana Gibraltar Netherlands Antilles Timor-Leste Bouvet Island Greenland New Caledonia Togo Brazil Grenada Niue Island Tokelau Islands British Antarctic Guam Nicaragua Tonga Territory Guatemala Niger Trinidad and Tobago British Indian Ocean Guinea Nigeria Tunisia Territory Guinea-Bissau Norfolk Island Turkmenistan British Virgin Islands Guyana Northern Mariana Turks and Caicos Brunei Darussalam Haiti Islands Islands Burkina Faso Heard Island and Oman Tuvalu Burundi McDonald Islands Pakistan Uganda Cambodia Honduras Palau Republic Ukraine Cameroon India Panama United Arab Cape Verde Indonesia Papua New Guinea Emirates Cayman Islands Iran Paraguay United States Minor Central African Iraq Peru Outlying Islands Republic Jamaica Philippines Uruguay Chad Jordan Pitcairn Islands Uzbekistan Chile Kazakhstan Qatar Vanuatu China, People?s Kenya Russian Federation Venezuela Republic of Kiribati Rwanda Vietnam Cocos (Keeling) Kuwait St Kitts and Nevis Virgin Islands of the Islands Kyrgyzstan Santa Helena United States Christmas Islands Laos St Lucia Wallis and Futuna Colombia Lebanon St Pierre and Islands Comoros Lesotho Miquelon Yemen Congo (Republic of) Liberia St Vincent and the Zambia Congo (Democratic Libyan Arab Grenadines Zimbabwe Republic of) Jamahiriya Samoa * Preferences temporarily withdrawn from 20 December 2006 ** Preferences withdrawn from 3 May 1997 Any enquiries about the Generalised Tariff Preferences should be made to the Negotiations and Development Unit of the Department for Business, Innovation & Skills on +44 (0)20 7215 5922.