Jun 13, 2017 - t rad e be t t e r i nt e r n at i o na l ly. Status of UK>EU Negotiations. âWhat we have come up wi
13/06/2017
Contents
Straightforward Consultancy, Coaching & Training Import | Export | Logistics | Customs
Customs Familiarisation Free Trade Agreements
A Full English Brexit
Trade Examples Customs Regimes AEO Status
Presented by: Gavin Makowski
Quick Tips This information is for general information & illustration purposes. We make no representations as to its 2 accuracy or completeness & will not be liable for any errors, omissions, or actions taken from its display or use.
Status of UK>EU Negotiations “What we have come up with is the idea of a comprehensive free trade agreement and a comprehensive customs agreement that will deliver the exact same benefits as we have.” - David Davis
Remoaner? Brextremist? Does it matter? Managing Director Trade Co Ltd
“Countries with third-country status cannot and will not have the same or even more rights than an EU member. All 27 member states and the European institutions agree on this. You may think that all this is self-evident. But I have to put this so clearly because I get the impression that some in Great Britain still have illusions about this, and that is a waste of time.” - Angela Merkel © 2017 Makowski Associates Ltd
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Status of UK>UK Negotiations
Customs Familiarisation The dark arts within international supply chain management
The Dual Kingdom (DK)
Let’s assume that Scotland, N. Ireland & London will remain! © 2017 Makowski Associates Ltd
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International Trade is Different
Why Customs Clear?
1. Every export & import is linked 2. Varying customs formalities: -
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Customs declarations Supporting documents Procedures & competency Compliance expectations
Duty & VAT
Prohibitions Restrictions Licences
Trade Statistics
1. Tax over/underpayments, & reclaims!
3. Varying customs taxes:
2. Civil penalties & criminal offences
- Import customs duty - Import VAT
3. Border delays or cargo seizure
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Security Routines
4. Loss of beneficial customs regimes © 2017 Makowski Associates Ltd
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A Customs Entry
Average Duty % on Import Value *ILLUSTRATIVE ONLY (figs not up to date)
Lots of product variation within the categories © 2017 Makowski Associates Ltd
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What’s New
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A Quick Word on the UCC 1. Union Customs Code (2016) - 20-year rewrite of EU customs regs
UCC
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2. Customs Declaration System
1. Changes to key customs concepts & processes 2. Stricter procedural & compliance expectations
- >20-year update of UK customs system
3. New guarantees
3. Brexit
4. Advanced customs regime changes
[A bit on this later]
5. Authorised Economic Operator (AEO) status
[A bit on this later]
BREXIT The perfect storm? © 2017 Makowski Associates Ltd
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A word on EU FTAs 1. Walk from 50 EU FTAs 2. Plus 15 in the pipeline
Free Trade Agreements (FTAs)
3. And ‘single market’ access (27 members)
Bilateral agreements allowing deviation from standard import tax rates
4. We can strike our own FTAs 5. 5 years each? Trickle effect? 6. Reliance on complex Rules of Origin (ROO) © 2017 Makowski Associates Ltd
Europe is Complicated
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State of EU Trade Agreements
*EU Commission data
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State of UK Trade Agreements?
Customs is Complex & Expensive Brexit likely to lead to… Bewildering paperwork to the uninitiated Complex tax structures by country & product New legal & compliance obligations
*UK data
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3rd Country Trade 1. Imports & exports (3rd country status) 2. Customs formalities & potential taxes all directions
Trade Examples
3. Taxes may decrease if there is preference/FTA
International trade may include (a) standard
3rd Country
or (b) preferential tax arrangements 3rd Country
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UK …trade better internationally
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UK within Single Market
UK Outside the EU
1. Arrivals & dispatches (not true imports & exports)
1. Imports & exports (3rd country status)
2. Customs duty x1 | Import VAT x1 | Customs formalities x1
2. Customs duty x2 | Import VAT x2 | Customs formalities x2
[Reverse position for EU to UK trade]
6%
[Reverse position for EU to UK trade]
6%
UK
3rd Country
EU
UK 6%
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UK
EU
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UK
3rd Country
UK with EU FTA
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We don’t need EU?
1. Imports & exports (3rd country status) 2. Customs duty x1 | Import VAT x2 | Customs formalities x2 3. Duty benefits possibly restricted to UK/EU originating goods [Reverse position for EU to UK trade]
6%
UK
3rd Country
UK
EU
We cannot simply replace doorstep trade with the world’s largest trading block with that from far flung places.
6% © 2017 Makowski Associates Ltd
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The Concept 1. Delay, reduce or eliminate import taxes 2. Ongoing savings & potential retrospection
Advanced Regimes Trade facilitation & customs tax planning
3. Help UK companies compete globally 4. Conditional advantage! 5. Enhanced procedural & compliance expectations 6. Authorisation/long set-up times? 7. Frequently missed by SME’s & large corporations alike © 2017 Makowski Associates Ltd
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Opportunity Assessment Baseline Classification, valuation, origin
Processing Re-import/export & processed products
Trade agreements Regional or industry
Specific use Temporarily or for certain end uses
Competitive environment Profile of EU/UK producers
Situational scenarios Encourage trade & edu/science/culture
Storage Deferrals & re-export reliefs
Transit EU / UK movements
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1
2
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3
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Authorised Economic Operator (AEO) Status Significant new customs & supply chain security accreditation recognised across the EU & internationally.
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AEO Overview
Internal Requirements
1. Customs, supply chain security & trade facilitation have become government priority 2. Formal recognition as safe, secure, & compliant 3. ~70 operational programmes (16 waiting launch) 4. ~ 35,000 global (incl. 14,500 EU) companies 5. Bedding in & gaining momentum © 2017 Makowski Associates Ltd
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COUNTRY GERMANY NETHERL. FRANCE ITALY SPAIN UK USA CHINA CANADA JAPAN MEXICO THAILAND N.ZEALAND OTHER (55)
NO. 6000 1500 1400 1100 700 500 11000 3540 1535 542 421 291 122 20000
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Potential Benefits
1. Customs procedures, competency & compliance record 2. Supply chain security standards But also… 3. Overall business processes & controls 4. Accounting & logistical systems 5. ICT disciplines 6. Financial solvency ~ 3 to 10 months prep + 4 month application process? © 2017 Makowski Associates Ltd
Fitting it Together
1. Fewer physical/document border checks 2. Priority treatment in backlogs 3. Simplified/faster customs clearances 4. Easier admittance to advanced customs regimes 5. Waivers from new financial guarantees 6. Reduced errors, civil penalties, crime, theft & losses 7. Improved supply chain predictability & vulnerability 8. Inherent benefits for higher risk cargo types 9. Industry 'kite mark' & marketing tool 10. International reciprocal/mutual recognition © 2017 Makowski Associates Ltd
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BREXIT
CUSTOMS PROCESSES
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AEO
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Customs Taxes Map cargo flows & origins, in & outbound, for raw materials, components & finished goods. Monitor & consider:
Quick Tips Manage & minimise your risks
1. 2. 3. 4. 5. 6. 7. 8.
Standard UK import taxes Standard import taxes in 3rd countries Preferential rates that may be withdrawn Upcoming UK’s trade negotiations Competitor (dis)advantages Tax planning mitigations Routings, manufacture/storage locations, transaction structures Alternative sourcing/selling possibilities
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Customs Formalities
Risk Management
1. EU trade becomes international trade
1. Create risk register
2. Consider internal, supplier & client ambitions:
2. Risk identification (& assumptions)
- Willingness for international trade?
3. Risk evaluation
- Customs skills gaps?
4. Risk treatment
- Processes & procedures?
5. Project management (update & retire risks & treatment plans)
- Contract terms?
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ACTIVITIES
IMPORT / EXPORT OPERATIONS INTERNATIONAL LOGISTICS CUSTOMS ROUTINES & DUTY RELIEFS GLOBAL TRADE COMPLIANCE AEO STATUS & BREXIT PLANNING SUPPORTING SYSTEMS & PROCEDURES
THANK YOU
FOCUS
REDUCING COSTS MINIMISING OPERATING RISKS ACHIEVING COMPLIANCE RESOLVING DAILY ISSUES IMPROVING PROFICIENCY & CAPABILITY
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