Well prepared for Brexit

A trade agreement between the EU and the UK was agreed on 24 December 2020. Pending formal approval by the European Parliament, a provisional arrangement is in force and is valid from 1 January 2021. This provides more clarity about the terms for trade between the EU and the UK.

Download the Brexit pack below for maximum preparation and complete the checklist so that you are not faced with surprises.

Brexit checklist

Now that the United Kingdom is no longer part of the European Union as of 1 January 2021, this means that when goods are imported from the United Kingdom, a customs declaration must be submitted for your shipment. Any import duties and VAT on import are also calculated by means of this declaration. This can lead to additional costs for you. Keep in mind that the total costs for importing goods from the United Kingdom can therefore be significantly higher after January 1, 2021.

You have to pay the import duties and VAT to DHL before delivery. If your mobile phone number is stated by the sender in the shipment data, you will receive a payment request from DHL Express via SMS. Prompt payment will ensure fast delivery of your goods. (NB. A DHL Express payment request for VAT / import duties always contains the airwaybill / AWB number of your shipment. Did you receive an SMS without a (correct) airwaybill / AWB number? Do not click on anything and notify us via report phising or fraud.)

From 1 January 2021 Customs Declarations will be required for shipments between the European Union and Great Britain (and vice-versa). Although the EU-UK Trade and Cooperation Agreement refers to ‘zero tariffs’ (zero customs duties), this doesn’t replace the need to generate a Customs Declaration and so a Commercial or Pro-forma Invoice is required.

The trade deal only applies to Customs duties, meaning that in most cases Customs duties will not be applied to goods fulfilling all necessary “rules of origin” requirements.

However, VAT will still be levied. Customs declarations are therefore required for goods to clear the border, as the UK will have left the single market and the customs union. Country-specific restrictions will still be in place and any associated licenses will also be required.

in order to benefit from the EU-UK Trade Agreement ‘zero tariff’ (zero Customs duties), it is essential that you provide evidence of the country of origin in the Commercial or Pro-forma Invoice for shipments to businesses and consumers. This can be achieved using the statement below for UK or EU goods fulfilling the relevant rules of origin requirements. It is important that this information is supplied pre-clearance.

The exporter of the products covered by this document (Exporter Reference No.*) declares that, except where otherwise clearly indicated, these products are of ... preferential origin.

(Place and date**):

(Name of the exporter):

The goods Country of Origin must be calculated and recorded accurately, and it is the responsibility of the shipper to do this.

*: The Exporter Reference No. is required for all UK to EU shipments (this reference is your GB EORI number). For shipments from the EU to the UK, the Exporter Reference No. (this reference is your REX number) is only required where the value of the shipment exceeds 6,000 EUR / £5,700.

**: may be omitted if the information is contained on the document itself

Next to changes to Customs procedures, changes to UK VAT regulations will be introduced on 1 January 2021. This regulatory change is not part of the EU-UK Trade and Cooperation Agreement, and applies to shipments being imported into the UK from any country worldwide. This means that most shipments valued at more than £135 will attract VAT on importation from any country, including the EU. For shipments with a value of £ 0- £ 135 sold by businesses to consumers in the UK, VAT must be collected at the point of sale and is therefore the seller's responsibility. The VAT paid by the buyer must be stated on the invoice.

When you ship to UK customers, these shipments are dutiable. Of course, this also applies when your customers return shipments. With the Easy Returns service, DHL Express ensures that the returned goods are re-imported into the EU without payment of customs duties. Fast and easy!

You can consider using our billing service 'Duties Taxes Paid' (DTP). As the shipper you pay the import duties (where applicable) and the VAT. With an all-in sales price, you avoid surprises for your webshop customer. This way, the delivery of your product is just as smooth as the online purchase.

• DHL Express handles all your customs declarations for shipments to and from the UK

• DHL Express is also market leader in the UK with many years of experience, local expertise and an extensive network.

• DHL Paperless Trade - create your shipment invoice online and send it electronically to DHL Express for faster customs clearance.

With DHL Paperless Trade you can send your commercial or pro-forma invoice online within the electronic shipping application. This eliminates the need to print your commercial or pro forma invoice and physically add it to the shipment. With this free service from DHL Express, you save time preparing your shipment and make a positive contribution to the environment by saving paper. In addition, you will immediately receive a confirmation when the invoices have been successfully received by DHL Express.

EU-UK Trade and Cooperation Agreement (TCA)
 

1. BREXIT BASICS

What are the main changes from 1^st January 2021 to Customs?

The EU-UK Trade and Cooperation Agreement (TCA) was reached on 24^th December 2020.The Agreement will provisionally apply from 1st of January 2021, most probably until the end of Feb 2021 (to allow time for the formal legislative steps to be completed). Once completed, the Agreement will enter into force in full.

As of 1st January 2021, the UK will no longer be part of the EU Customs Union and the Single Market. Therefore, all customs controls and formalities will be required for goods moving between GB and EU. Simply put, customs declarations will still be required despite the TCA.

The TCA does bring some certainty on many of the new trading rules. There will be tariff-free, quota-free access for products traded between the EU and UK under the TCA if the goods originate from the EU or UK. However, this is accompanied by a number of new customs procedures and formalities, including new ‘rules of origin’ requirements, which are needed in order to qualify for the tariff-free, quota-free treatment.

The movement of goods (which are in free circulation) between Northern Ireland and the EU is not governed by the Agreement, and will be treated as an intra-EU movement. Therefore, no customs formalities are applied.

2. Clearance process (import, Export and Transit) and handling of shopments subject to sanitary and/or phytosanitary formalities

Does the Agreement mean that no customs formalities are required for goods entering the EU from GB?

No! This is incorrect. From 1^st January 2021 goods in trade between GB and EU are subject to customs formalities, including entry safety and security declarations, filing of import and export customs declarations and provision of all relevant supporting documents (e.g. authorizations, certificates, etc.). This means import, export and transit declarations are to be lodged for goods moving between GB and the EU. The Agreement does not change these requirements.

What does the deal mean for handling of Sanitary and Phytosanitary (SPS) goods- are there any simplifications into EU?

Sanitary and phytosanitary (SPS) measures are a set of rules defined by the EU and the UK for the protection of human and animal health (“sanitary”) and plant health(“phytosanitary”).  EU law already includes detailed SPS rules to ensure high levels of food safety, and reduce or eliminate possible health threats to EU citizens, as well as to animals and plants in the EU.

Shipments from GB must be treated from an SPS point of view in the same way as any other 3^rd country of the world, meaning necessary authorizations & certificates must be provided, controls at first point of entry apply, etc..

If special formalities apply for SPS, the shipper has to provide the required paperwork. A Customer Statement letter for the customer to warrant towards DHL that no specific SPS rules apply for their shipment has to be signed.

3. Preferential Treatment and Zero Tariff

What does “zero tariff” mean in the Agreement?

Only products imported from GB, and having the relevant proof of origin attached, can have a customs duty rate of 0% applied (and vice versa from EU to GB). Despite a 0% customs duty rate, import VAT will be levied based on the country specific VAT rate regardless of whether a proof of origin is supplied. This means that import customs declarations are to be done in every case, the billing/collection processes apply, VAT is to be paid for imports to the EU (either by DHL or via the customer’s deferment account) and disbursement charges apply as per our standard terms and conditions.

Do goods from the EU/UK receive preferential treatment in the respective other country?

The TCA means that in most cases Customs duties will not be applied as a zero tariff has been confirmed for goods sent between the EU-UK (or vice-versa), however, this is conditional on Rules of Origin Requirements being confirmed when shipping. Note that import VAT will still be levied for imports into the EU. For goods where it can be proved that the customs origin is EU/UK, preferential treatment can be claimed in the respective destination country subject to it being correctly applied for in the customs declaration.

Does the Agreement automatically mean that all EU/UK goods benefit from the 0% customs duty rate (“zero tariff”)?

No, only goods with the relevant proof of origin indicating the country of origin EU or UK may benefit from the 0% customs duty rate of the Agreement. In order to benefit from the 0% duty rate of the Agreement, the “Statement of Origin” should show as country of origin either UK or EU.

When does a product originate from the EU or UK?

To qualify there are general origin rules and then product specific origin rules based on a product’s tariff classification in the TCA. These rules are broadly comparable with other EU and UK Free Trade Agreements (FTAs). Whilst varied across the tariff, for most classifications there are two main qualification criteria for meeting the product specific origin rules:

1. difference in the tariff classification of the finished product and its non-originating materials at the heading or sub-heading level (first 4 or 6 digit tariff code change);
2. or a maximum percentage value of non-originating materials in the finished product, most commonly 50%.

Accurate tariff classification will be critical for businesses, whether to determine the product specific rule of origin or in assessing qualification with that rule of origin.

How can the country of origin be proven under the Agreement?

The country of origin can be proven through a “Statement of Origin” (confirming that the product has been produced or sufficiently processed in the UK or the EU) filled in by the exporter. It is the responsibility of the exporter to ensure the completeness / accuracy of the origin declaration.

How can preferential treatment be applied for?

Proof of origin related information must be entered in the customs declaration in order to obtain preferential treatment. No customs duties are levied if the proof of origin (“Statement of Origin”) is available and information is properly entered into the import customs declaration. Import VAT is unaffected and will be assessed and levied according to local laws.

Who must apply for the preference?

DHL has to apply for the 0% customs duty rate in the course of the import customs declaration. To do so, DHL must receive the required information (“Statement of Origin”) on the invoice. DHL will automatically apply for preferential treatment at import if the “Statement of Origin” is available on the invoice. The shipper is responsible for the completeness and accuracy of the information regarding the origin of the goods.

Details on the “Statement of Origin”:

• Can be made out in all/any of the official languages of the EU plus English; 
• Exporter should indicate the statement on the commercial or pro-forma invoice that describes the originating product in sufficient detail to enable the identification of that product;
• DHL requires the statement on a shipment-by-shipment basis;
• Important- The wording of the statement must be exactly as indicated below and with all the information mentioned. Place and date may be omitted if the information is contained in the document itself.

Wording of the “Statement of Origin” on the invoice:

The exporter of the products covered by this document (Exporter Reference No ... (GB EORI or REX) declares that, except where otherwise clearly indicated, these products are of ...  preferential origin.

(Place and date): ……………………………….

(Name of the exporter): ……………………

What is the Exporter Reference Number in the “Statement of Origin” and when must the number be indicated by the exporter?

• For shipments from GB to EU the Exporter Reference Number is the GB EORI number of the exporter and must be provided in the statement regardless of the value of the shipment.
• For shipments from EU to GB the Exporter Reference Number (REX) is only required if the value of the shipment exceeds 6,000 EUR (or 5,700 GBP). Below this threshold the statement may be accepted without the Exporter Reference Number.

Does exemption from the proof of origin exist?

There are exemptions for goods in small consignments, only for C2C consignments, which means that if the goods have a value less than € 150 (B2B, B2C) or a value less than € 45 (C2C) there are no import duties regardless of whether the goods meet the rules of origin.

Is it possible to apply for 0% customs duty rate after customs clearance is completed and get a refund of the duties paid?

The claim can be made at either the time of importation, or technically also after the date of importation (as outlined in either UK or EU law). The customer has to provide the basis for the claim (i.e. “Statement of Origin), and the product has to satisfy all other requirements necessary to claim preferential treatment. Without the statement, it will not be possible for DHL to claim the duty relief, and DHL cannot amend the documentation post-clearance . DHL Express NL will provide you with a statement which enables you to request an amendment to Dutch Customs Authorities yourself. 

Where can I get information about the requirements for proof of origin?

https://eur-lex.europa.eu/legal-content/DE/TXT/PDF/?uri=CELEX:22020A1231(01)&from=EN

https://www.gov.uk/guidance/check-your-goods-meet-the-rules-of-origin

Where can I find further information about Brexit and the EU-UK Trade and Cooperation Agreement (TCA)?

EUROPEAN COMMISSION LINKS:

EU-UK Trade and Cooperation Agreement

https://ec.europa.eu/info/files/eu-uk-trade-and-cooperation-agreement_en

 BREXIT Overview, Publications/News, EU-UK Negotiations

https://ec.europa.eu/info/european-union-and-united-kingdom-forging-new-partnership_en

BREXIT Legislative Developments, Links to Member States

https://ec.europa.eu/info/brexit/brexit-preparedness_en

UK GOVERNMENT LINKS:

UK Government Transition Guide

https://www.gov.uk/transition

How to Import/Export to/from UK, EORI Registration, Duty/VAT, Customs Declaration

https://www.gov.uk/topic/business-tax/import-export

Export Control Guidance

https://www.gov.uk/guidance/exporting-controlled-goods-after-eu-exit

UK Government Imports and Exports Helpline

http://www.gov.uk/contact-brexit-import-export-helpline

British Chambers of Commerce Brexit Hub

https://www.britishchambers.org.uk/page/brexit-hub

4. PRE BREXIT Q&A

What is Brexit?

The United Kingdom (UK) left the European Union (EU) on January 31, 2020 (midnight Dutch time). From this moment, a transition phase applies, until December 31, 2020. During this period, all EU rules and laws for the UK remain in force.

What happens with a Brexit?

The UK will leave the EU in Brexit. Until January 1, 2021, nothing will change for trade with the UK. After this date, customs declarations are required for import and export. 

What are possible Brexit scenarios?

Negotiations are currently underway on the trade agreement. If these negotiations succeed, lower import duty rates may be applicable for certain goods. If not, keep in mind that more import duties have to be paid.

5. DHL Express & Brexit 

How is DHL preparing for Brexit?

DHL is busy preparing for Brexit with European and national teams. For example, adjustments have been made to our IT systems and online shipping applications. There are processes for hiring more employees, both in the Netherlands, the EU and the United Kingdom, and DHL has made a plan for all Brexit scenarios.

Is DHL ready for Brexit?

Dealing with the uncertainties surrounding Brexit remains a challenge for the world of international business. Deutsche Post DHL has a wide experience of dealing with changes in conditions of international trade. For over a year now, we have been working on an extensive contingency plan. And we will continue to do so, given the rapidly changing political climate.

DHL will stay in close contact with customers and suppliers and will keep supporting them in doing international business also after Brexit.

DHL Express is of course aware that transporters to the UK a required to have ECMT-permits. DHL has already taken the necessary steps to ensure that these permits are received in time.

As Brexit relates to the government of the UK, we are dependent on the actions of the British government and the way in which they treat this entire process. We will of course keep our customers informed of all Brexit-related processes and developments.

6. Customers & Brexit

What will change for me as a Customer? 

Regardless of Brexit, a customs declaration will always be required at import and export. However, the moment at which this becomes a requirement, depends on whether a hard of soft Brexit scenario is chosen.
In addition, please take into account the following:
• Customs duties and VAT will apply upon import into the UK and EU.
• Customs invoices will be required for trade between the UK and EU.
• Transit times may change.
• Rates and additional surcharges may change as a result of customs clearance.
• Any additional inspections may be required for certain goods such as animal and plant products.
 

What is the impact of Brexit on rates and additional surcharges?

Due to the costs associated with Brexit and the investment we have to make, we are forced to introduce a Brexit surcharge. Cost factors include changes in customs and import regulations that significantly impact DHL Express operational costs.

The surcharge applies from 1 January 2021 to all dutiable shipments between the EU and the UK, both import and export. This has been set at € 0.25 per kg with a minimum amount of € 5 per shipment.

There is no Brexit surcharge for shipments to Guernsey, Jersey and Gibraltar. The surcharge does apply to shipments to Isle of Man.

What is the impact of Brexit on transit times?

After Brexit, shipments that are sent using our Time Definite services, will be transported via air from and to the United Kingdom. In combination with our Paperless Trade (PLT) services and using billing service DTP, we anticipate minimal impact.

What is the impact of Brexit on Pre-9 and Pre-12 shipments?

After Brexit, shipments that are sent using our Time Definite services, will be transported via air from and to the United Kingdom. In combination with our Paperless Trade (PLT) services and using the DTP Incoterm, we anticipate minimal impact.on the timely delivery of Pre-9 and Pre-12 shipments.

What can I do as a DHL Express customer to prepare for Brexit?

a. Apply for an EORI number
If you have only operated in the EU so far and still trade with the United Kingdom after Brexit, an EORI (Economic Operators Registration and Identification Number) number is required. The EORI number must be entered as an identification number in all data exchange with Customs. More information about EORI or request an EORI number.
b. Switch to Paperless Trade (PLT)
DHL’s Paperless Trade allows you to transmit your commercial or pro forma invoices online. Digital processing of your customs invoices facilitates smooth processing at Customs and promotes quick clearance of your shipment. Less paper, more speed – PLT saves you time and money. Read more about PLT.
c. Duty Taxes Paid (DTP)
Consider sending our billing service 'Duties Taxes Paid' (DTP) if the value of the product is higher than the de minimis value (currently £ 15). You then pay the import duties & VAT as the sender. With an all-in sales price you avoid surprises for your webshop customer. This makes delivery of your product as smooth as the online purchase.
 

What about returns from the United Kingdom?

When customers ship to the United Kingdom, after Brexit these shipments will be dutiable. This also applies, of course, when the recipient returns the shipments. With the Easy Returns service, DHL Express ensures that the returning goods are reintroduced into the EU without payment of customs duties. Fast and easy!
 

What about excise goods?

Within the EU, the sending of excise goods (alcoholic beverages, tobacco products, mineral oils) is subject to extensive regulations. There is no statutory exemption for carriers as applicable to private individuals. As a result, DHL Express can only transport excise goods within the EU under certain conditions. However, as soon as the United Kingdom leaves the EU, all shipments from and to the EU will be dutiable and DHL Express will process the payment of excise duties via the customs declaration.
 

What should I take into account when sending gifts?

As long as the UK is still part of the EU, gifts are exempt from duties and taxes provided that the shipment's value does not exceed the threshold of €45,-. After Brexit (soft or hard) you can still receive gifts from the UK in the EU below this threshold value. DHL Express will take this into account in the customs declaration. However, for sending gifts to the UK after Brexit, it is unclear whether the UK will also apply an exemption and if so, what the threshold value will be. DHL Express will keep you informed of the developments.
 

Which documents do I need to add to shipments to the United Kingdom after Brexit?

You need to add the same document as you normally do for other countries outside the EU. That means at least a commercial or pro forma invoice. DHL Express will keep you informed of any changes or exceptions to this process. If you have any questions, please contact our Customer Service at 088 - 0552 000.
 

Can I take out insurance on shipments to the United Kingdom after Brexit?

Of course, that is possible. Customers can take out the same insurance just like for shipments to other countries outside the EU.
 

Which product code should I use for shipments to the United Kingdom?

When the United Kingdom is no longer part of the EU, non-EU product codes will have to be chosen, as with other non-EU countries.
 

7. DUAL USE & BREXIT

Will UK on 12 April or before that date be added to the EU001 license as specified in Annex IIa of the Dual Use Directive?

In december 2018 the Commision proposed to add UK to the General Union License EU001 of the Dual Use Directive (hereafter Directive), in case UK will leave the EU on 13 April with a withdrawal agreement. You are able to consult the proposed text or the procedural next steps via the official website of EU legislation, EUR-Lex. In january 2019 the Commission indicated that the mentioned proposal for change of the Directive is to be expected to be in place on 31 October. There is a small chance that the adjustment of the Directive will not be in place on time (31 October)

Did The Netherlands determine an alternative solution in case UK is not added on time (31 October) to the EU001 license? 

The government of The Netherlands is planning to publish a national general license for export of dual use goods to UK in case UK leaves the EU without withdrawal agreement per 1 November and the adjusted directive is not entered into force. This national general license will be equal to the EU001, understanding that this national general license will just refer to export to UK, not to export to other countries.  

Which license for export of dual use goods to UK after 1 November can be applied for best?  

In case you wish to export dual use goods to UK , you can register for:

(i) the use of the Genaral Union License EU001;  AND

(ii) in case the adjusted EU001 will not enter into force untill Brexit date, the new national general license for export to UK; OR

(iii) in case the adjusted EU001 did not enter into force untill Brexit date and the tob e exported goods fall within the range of an actual national general license (e.g. NL010 or NL002), the use of an already existing national general license. 

In case you have already registered for the use of the EU001 license, you just need to register for the new national general licens for export to UK or, if applicable for an already existing national general license.

In case you have already registered for the use of an already existing national general license, you just need to register for for the use of the EU001 license.

Note: There is still the option, besides registering for use of the EU001 and national general license, to register for an individual license in case of a single transaction. This application can be done as per 6 March 2019.