SITPRO Simplifying International Trade

Trading Advice FAQs

The most frequently asked questions from enquiries on SITPRO's Trade Efficiency Helpdesk, and the Answers!


Q. I wish to send a parcel containing food items to the United States. I have been advised by the Post Office that a special form and procedure are now required. Please can you help?

A. Since the 11th September 2001 terrorist attacks, the USA have increased all of their security measures. As a consequence, the Public Health Security and Bioterrorism Preparedness and Response Act of 2002 (aka Bioterrorism Act) has been introduced, which places controls on all food products entering America.

Any food parcel being sent to the US now requires a "Prior Notice" form which can only be filled on the Internet (www.access.fda.gov External Link Icon). Prior Notice must be received and confirmed electronically by FDA no more than five days before arrival and according to mode of transport, no fewer than:

Information required includes personal details and company information, if relevant, as well as the product identification details.

Should the quantities, arrival information, shipment type etc. change once the form has been submitted, a new form will need to be filled in which reflects the correct details.

Once the details have been submitted the sender will receive confirmation from the department. Once this has been received, the process is virtually complete, however, FDA staff may inspect the imported goods.

Failure to ensure "Prior Notice" has been submitted will result in any parcels being refused entry until the correct information is provided.

The new rules do not apply to meat, poultry and egg products. These fall under the jurisdiction of the US Department of Agriculture, nor do they apply to food made by an individual in their personal residence and sent as a personal gift (i.e. non-business reasons) to an individual in the US.


Q. When selling to firms outside the EU, what is the absolute minimum amount of documentation I will be required to produce to sell my goods overseas?

A. A Commercial Invoice is used as a support document for most trade procedures. If using a freight-forwarder or shipping company to manage the export of your goods, he should be able to arrange for most of the other export procedures that may be applicable on your behalf by using the information contained in the Invoice.

A Commercial Invoice is a document outlining your invoicing arrangements with your customer. Typically, a Commercial Invoice will provide details on:

While most countries do not specify the format of the Commercial Invoice, SITPRO recommends using a template which conforms to the UN standard. Parties involved in international trade generally are more familiar with this format and will be able to handle your document more efficiently. A list of suppliers producing a Commercial Invoice compliant to the UN standard can be viewed on our website (http://www.sitpro.org.uk/documents/licensees.html?type=DOCPRNT).

There are a number of countries which have specific requirements for the commercial invoice. To give some examples, these may relate to the format of the document, the language used, use of facsimile signatures, specific requirement for consulate certification, number of copies or specific information requirements. You are advised to check with your freight forwarder or the relevant country consulate whether such requirements may apply to the country to which you are conducting your export. Alternatively, you can seek advice from SITPRO's help-line (020 7215 8150).

You or your freight forwarder will have to provide an export declaration. Since March 2003 export declarations have to be produced and submitted electronically via the UK Customs website or a third party systems provider. Further details on the electronic transmission of export declarations can be found in Customs Notice 276: (http://www.hmce.gov.uk/forms/catalogue/catalogue.htm External Link Icon)


Q. How do I find a Freight-Forwarder?

A. If you require freight forwarding services, we would recommend that you contact the British International Freight Association (www.bifa.org; tel. 020 8844 2266) for advice. Most reputable freight forwarders will be BIFA members and subscribe to its Code of Conduct.


Q. I'm negotiating to sell goods to a customer in France and in the contract they're asking me to deliver them by reference to something called "Incoterms 2000" - what are they and how do they work?

A. Incoterms are a set of agreed rules which set out the delivery terms for goods which are being traded internationally. They allow the buyer and seller to agree responsibilities for the carriage of the goods, customs clearance and division of costs and risks. They avoid the possibility of misunderstandings and disputes that can arise because of differing trading practices in the respective countries. Incoterms were first published by the International Chamber of Commerce in 1936 and the latest version was agreed in 2000. There are thirteen Incoterms which cover the range of responsibilities from minimum to maximum for both buyer and seller (http://www.iccuk.net External Link Icon). For further information see SITPRO's Briefings Incoterms - A General Guide and Incoterms - An Action Plan and Checklist.


Q. What Customs formalities apply in countries outside the European Union?

A. At the very least you, your freight forwarder or your customer (depending on the Incoterm agreed) will have to make an import declaration and make payment for any import duties and taxes due. Some country specific Customs Duties can be found at http://mkaccdb.eu.int/ (requires your Customs Commodity Code). In certain circumstances, e.g. where goods are to be returned to the EU or put to a specific end-use, payment of duties may be suspended. Similarly, some countries give preferential duty rates for goods of EU origin (see EUR1).

You are advised to consult with your customer and freight forwarder to check if specific import procedures apply for which you have to provide additional documentation. Country specific information may be obtained from the relevant country consulate.

Details on country specific import procedures can be found in specialist trade publications, the EU Market Export Guide (http://mkaccdb.eu.int/), SITPRO's Country Fact Sheets or by contacting the relevant countries Customs or Trade Attaché at their embassies.

When researching import formalities it is always useful to have the relevant Customs Commodity Codes to hand.


Q. I am sending goods to Switzerland where I believe they have a VAT system similar to ours. Do I need to charge UK VAT?

A. Switzerland is outside of the European Union and as with all exports to third countries you should zero rate the export invoice for VAT purposes. However you will need to keep suitable evidence that the goods have left the EU. Customs Notice 703 (http://www.hmce.gov.uk/forms/catalogue/catalogue.htm External Link Icon) gives examples of what documentation is suitable for this proof


Q. I'm taking some equipment out to Australia for display at an exhibition. We're hoping to take orders at the exhibition, but all the equipment will be returning to the UK. Is there an easy way to cut down on the Customs paperwork?

A. Australia is one of a number of countries which have agreed to operate the 'ATA Carnet' scheme which simplifies clearance procedures in both countries by replacing the normal Customs forms. In Australia it also allows the goods to be temporarily imported free of Customs duties and tax without the need to provide a guarantee or cash security while the goods are in the country. The ATA Carnet can be used for single or multi-country visits, but the validity never exceeds one year. (see HM Customs Notice 104, http://www.hmce.gov.uk/forms/catalogue/catalogue.htm). Where imports into your country of destination are of a temporary nature and accompanied by a representative of your company, you are also advised to research whether any specific Merchandise in Baggage allowances apply (see Customs Notice 6). For further information about the ATA Carnet scheme and the fees involved, contact your local chamber of commerce. http://www.britishchambers.org.uk External Link Icon.


Q. A customer in South Africa has asked me to provide an EUR 1 form. What is this form for and where do I get it?

A. Some countries provide lower duty rates for goods of EU origin. In which case your Customer may request you to provide an EUR1 form or a Certificate of Origin to certify the good's EU origin in accordance to the governing origin rules. Details on the EUR1 form can be obtained from Customs (see Customs Notice 827, http://www.hmce.gov.uk/forms/catalogue/catalogue.htm)


Q. What is the Customs Commodity Code that is required on my export declaration and how do I find out the codes of my products?

A. For exports out of the European Union you are required to provide an eight-digit commodity code which needs to be entered on the Customs export declaration (see above). Sometimes this code is also referred to as the "first eight digits of the Customs Tariff number" or "CN (Customs nomenclature) code". This number will also be used as a basis for the import declaration in the country of destination. Based on the Commodity Code Customs authorities will assess duty rates, apply product specific controls and origin rules. If you are unfamiliar with Customs classification you are advised to contact the UK Customs Tariff Classification Help-Line (tel. 01702 366077) who will be able to give you an opinion on what is the most appropriate code for the exported product. Further detail on classification can be found in Customs Notice 600 (http://www.hmce.gov.uk/forms/catalogue/catalogue.htm) and in The Tariff, available for purchase from Customs and Excise, or available for reference in most main libraries.


Q. We have recently received an order from a new customer in Kenya. However we have been told that goods being exported to Kenya are subject to pre-shipment inspection. We are unsure what this is or how to go about having the goods inspected.

A. Pre-shipment inspection is required for a number of countries, including Kenya. It involves an agency, which is usually mandated by the government of the country concerned, inspecting the goods for price and classification.

Most goods being sent to Kenya require pre-shipment inspection which is carried out by Cotecna International Ltd. To initiate the importation process importers are required to present information for the Import Declaration Form (IDF) to Cotecna S.A. in Nairobi. There are some goods which are exempt from pre-shipment inspection. For further information on these and the pre-shipment inspection procedure for Kenya contact Cotecna International Ltd. Holdsworth House, 65-73 Staines Road, Hounslow, Middlesex TW3 3HW Tel: 020 8277 7700 Fax 020 8277 7804 http://www.cotecna.com External Link Icon. For more information about Kenya see SITPRO's Kenya Country Factsheet.


Q. We have been asked by our customer (who is based in Germany) for a Long-term Declaration for the goods we send them. I thought that there was no longer any need for any Customs documentation to accompany goods being sent within the European Union. Why does our customer need this and what do we need to do?

A. What your customer probably requires is a "Long-term declaration for goods having preferential origin status". This is a declaration of the origin of the goods you sell to your customer and is needed if he re-exports them to a third country that has an preference trade agreement with the European Union. Using your declaration he can prove the origin of the goods which means that his customer can claim a preferential rate of duty. The wording for such a declaration and details of what constitutes "originating" products are contained in Customs Notices 827, 828 and 829 which are available from your local Customs Advice Centre or the Customs website http://www.hmce.gov.uk/forms/catalogue/catalogue.htm


Q. What are Export Controls and Export Licences?

A. Export Controls apply to goods upon which the UK government has placed export licensing requirements. Typically export controls relate to goods that may be used in some way or other for military applications, goods of national heritage (e.g. works of art) or certain chemicals used in the production of controlled drugs. If you think your goods may be applied to military purposes you are advised to contact BIS's Export Controls Organisation (eco.help@bis.gsi.gov.uk Mail Icon; http://www.bis.gov.uk/europeandtrade/strategic-export-control/index.html External Link Icon). If you think your goods may be of importance to national heritage, you are advised to contact the Department of Culture, Media and Sport (020 7211 6164). For chemicals that are used in the production of drugs contact the Home Office (020 7273 2085/3627). If the above departments consider your products to be sensitive, you will need to apply for an export licence before your can take them out of the UK.


Q. How can I find out if a certificate of origin is required for goods going to a particular country?

A. Certificates of origin are required by a number of countries including many Middle Eastern countries who will require a Arab-British Certificate of Origin. SITPRO produce Factsheets on a number of countries which include details of whether certificates of origin are required. You may also call SITPRO for information on country requirements. Further information is available from the British Chambers of Commerce website (http://www.britishchambers.org.uk External Link Icon), including 'e-Cert', the Chambers' electronic Certificate of Origin.


Q. My customer says that I need an Export Certificate to sell my goods to him. Where must I go to get the licence I require?

A. Sometimes customers require goods to be certified by a UK government authority before being exported. These may relate to product standards as well as to environmental, health and safety issues. Export Certification requirements are relatively common for goods of animal and plant origin.

For example, some countries require specific Phytosanitary Certificates for specific plants and plant products as well as products or packaging material made out of or containing wood. If you have been asked to provide a Phytosanitary Certificate, you are advised to contact DEFRA (08459 335577) for plants and plant products, and the Forestry Commission (0131-314-6549/6120) for wood related items. Associated product inspection visits will normally incur a charge.

Veterinary certification is usually required when live animals and genetic material are exported. These are issued through DEFRA's network of local Animal Health Offices (call: 020 7904 6000 for details).

In addition, certain countries are concerned about the implications on consumer health from certain products. In this case they may ask for a Certificate of Free Sale which states that the product complies with EU regulations and is suitable for use by EU consumers. For more details please telephone:

For particular products, some markets will also require imported goods to be inspected by an independent inspection agency in order to verify compliance with local product standards and legislation. For example most goods exported to Russia require GOST certification (see SITPRO's Russia Country Factsheet). You are advised to consult with your customer whether such inspection and testing requirement apply.


Q. What is a Pre-Shipment Inspection (PSI), why do I need a PSI of my goods and who will carry the PSI out?

A. A small number of countries, generally with less developed Customs authorities, require goods and documents to be examined before export by an independent agency. Usually, countries where PSI applies will have appointed one dedicated agency to perform the pre-shipment inspection. Before exporting to a country where PSI applies, you are advised to establish specific procedures and whether you or your customer will carry possible PSI related cost (- in certain circumstances this may include an inspection fee). Normally, your freight forwarder or customer will be able to advise on PSI formalities.

In some countries PSI is optional and usually requested by the customer. If this is the case, you are advised to establish which party is responsible for making the arrangements with the PSI body and who is to bare the costs.


Q. We have received a letter of credit that asks for an airway bill. However we have decided that it would be more advantageous to send the goods by sea and so we will be issued with a bill of lading. As this is also a transport document will this be acceptable under the L/C?

A. No, although both a bill of lading and an airway bill are transport documents you must produce exactly what the L/C requests. You will need to contact your importer to ask for an amendment to the letter of credit. The terms of a letter of credit must be strictly adhered to otherwise the bank will reject the documents. You may wish to use the SITPRO Letter of Credit Checklists and Guides - there are three, one for the exporter, one for the importer and one for the export sales executive. These are available to download from the SITPRO Website at http://www.sitpro.org.uk/trade/lettcred.html.


If you have a query relating to the international trade movement of goods the SITPRO Helpline may be able to assist you. Please call 020 7215 8150 or email info@sitpro.org.uk Mail Icon.

Disclaimer

Whilst every effort is made to ensure that the information given herein is accurate, SITPRO Ltd. accepts no legal responsibility for any views expressed or implied or for any errors, omissions or misleading statements in that information caused by negligence or otherwise.

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