Trade War Fear

In early March 2018, the United States announced the imposition of tariffs on foreign imports of Steel (25%) and aluminium (10%). The European Union, along with Canada and Mexico, were at that time granted temporary exemptions.  These exemptions were lifted on May 31 2018, when the USA announced its intention to set new duties on Steel and Aluminium imported from the EU.  These additional tariffs are now in place.

EU Response

The EU took the case to the World Trade Organisation (WTO) on the 1st of June 2018 and announced the increase in duty of 10%, 25%, 35% and 50% on the certain products (summarized in Annexes I and II of Regulation (EU) 2018/724)) originating in the United States.

Following this, duties were applied on products listed in Annex I on June 21st 2018. Additional duties (on the products in Annex II) will be imposed on the earlier date of June 1st 2021 or the 5th day following the date of the adoption by the WTO Dispute Settlement Body of a ruling that the United States' safeguard measures are inconsistent with the relevant provisions of the WTO Agreement.

The practical effects are demonstrated as follows on some of the product coming from the US into the EU:

Surveillance System

A surveillance system was put in place in 2016 (Regulation (EU) 2016/670 on iron and Steel) and demonstrated that imports of certain steel products have been increasing.

With the US imposing restriction on steel products, the risk is an increase of import of steel products coming from other Third Countries. The surveillance programme has recently been extended to aluminium products (Regulations (EU) 2018/640).

Under the surveillance system, products concerned shall be put into free circulation in the Union only on production of a surveillance document issued by the competent authority designated by a Member State.

China

The US announced the imposition of additional tariffs on 818 items coming from China on July 6th. Retaliation from China will be on additional tariffs on over 545 US goods including sectors such as agriculture and automotive.

This discussion had been ongoing since January with back and forth submissions of further lists of products subject to additional duties between China and the USA.

The main focus seemed to be on steel, aluminium waste (making US measures on aluminium less effective as the aluminium waste would be stuck in the US) and on Pork  (then wine, fruits, steel pipe and tube; ginseng, soybean and cars…).

The US sanctions are putting on hold further trade negotiations between the two countries.

EU Impacts

Levies on European cars and Irish Alcohol are two sectors of potential concern and would have a major impact for German car manufacturer and Irish spirit producers. On the other hand, if tariffs on pork from US into China are imposed, then EU (Irish) pork producers could benefit and export to China.

For further information on how the sanctions might impact your business or to arrange a meeting please contact Carol Lynch on [email protected] or any member of the Customs and Trade Team at your local BDO office.

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Are you Brexit Ready?

The EU Council met during the last week in June to discuss a range of issues from Migration, to the growing Global Trade tensions and deterioration in EU-US relations along with the reform of the Economic and Monetary Unit.

The Council reviewed the state of play of Brexit negotiations and adapted conclusions on progress made.

As expected however the results were disappointing as the Brexit discussions are not progressing as planned. The Summit was scheduled to progress matters on the Withdrawal Agreement and future Trade Arrangements, however that has not been the case.

Instead the EU has issued a statement advising that Member States step up plans for all outcomes - widely interpreted as advising companies to plan for a Hard Brexit in March as a real risk at this point.

This is not to say that a Hard Brexit in March 2019 is to be expected only that, as Airbus stated:

“We have sought to highlight our concerns over the past 12 months, without success. Far from Project Fear, this is a dawning reality for Airbus. Put simply, a No Deal scenario directly threatens Airbus’s future in the UK……”

This statement has been echoed by BMW who have raised concerns about customs delays at the Borders negatively impacting their JIT model.

Are you ready?

As UK based multi-nationals start to prepare for the risk of a hard Brexit in March 2019 it is more critical than ever that Irish Exporters also prepare for the risk of customs checks as early as next year.

We strongly recommend putting together a customs plan, along with a wider VAT, Tax and Supply Chain plan to ensure any risks of delays are addressed now and the relevant procedures and simplifications put into effect to enable the efficient movement and clearance of your goods.

The BDO checklist below identifies the key areas that your business should be reviewing:

 

 

 

We would urgently recommend companies take on board that preparing for a potential hard Brexit is a prudent decision in order to be prepared for all outcomes.

For further information on Brexit and all customs queries please contact BDO.

For more information about our partnership with BDO Ireland click here.

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Effective Routes to Europe bypassing the UK

Effective Routes to Europe bypassing the UK

Avoid potential customs delays in the UK and move your cargo direct to Europe with Rhenus Logistics

A significant portion of Irish exports to Europe currently ship on trucks transiting the UK on the traditional land-bridge route. Post-Brexit, it remains unclear how UK Customs authorities will manage this traffic. Rhenus Logistics can help you avoid this uncertainty and potential additional customs clearance costs and delays post Brexit.

With regular groupage departures to Europe Rhenus Logistics can help you service your European customers effectively maintaining free movement of cargo for the duration of the journey.

For large or small exporters to Europe, Rhenus Logistics can arrange movement from all main ports in Ireland direct to European ports bypassing the UK. Regular departures from Dublin, Rosslare, Waterford and Cork connect with European Ports in France, Belgium and the Netherlands. You may have to plan for slightly longer transit times but maintaining supply chain certainty remains critically important. Begin your contingency planning now!

For further information please contact your local Rhenus Logistics office.

Lynda Barry / Tel +353 (0)1 429 2300 / [email protected]


Your options from Ireland bypassing the UK

About Rhenus: Turnover at the Rhenus Group tops € 4.8 billion, making it one of the leading logistics service companies with global operations. Rhenus has business locations at more than 610 locations worldwide and employs 29,000 people. The Rhenus business areas - Contract Logistics, Freight Logistics, Port Logistics and Public Transport - manage complex supply chains and provide a wealth of innovative value-added services.

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Centralised Clearance – Centralising your EU customs clearance process in Ireland

Centralised Customs Clearance is a valuable trade facilitation measure under a customs procedure of the Union Customs Code (UCC) within the EU.

It allows an approved trader to lodge at the customs office where they are established, a customs declaration for goods which are presented at another customs office within the customs territory of the Union.

Centralised Clearance allows the economic operators to centralise and integrate accounting, logistics and distribution functions with financial savings in administrative and transaction costs, thus providing a genuine simplification. Centralising payment of customs duties and related declaration costs provides real savings and efficiencies.

Multinational organisations with manufacturing or distribution centres in different EU countries can centralise their EU customs clearance administration in one location within the EU. These organisations may have to implement or purchase costly IT solutions in each member state they are importing/exporting to/from or outsource this facility to many different external stakeholders. Centralised Clearance can eliminate this costly administration burden, centralise these operations in one location, and reduce risk within your global supply chain.

As your global supply chain expands and non-EU imports increase into multiple cross country locations throughout the EU, you now should consider this very useful trade facilitation measure. Global sourcing within your industry can be complex. Making the inbound process of this function more efficient by ensuring security of supply and reducing risk should be considered.

For more information contact Brian Murphy, Head of Trade Services, Irish Exporters Association at [email protected]

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Do you have inventory supplied from outside the EU?

Rhenus Logistics can help you postpone the payment of VAT and Duty with simplified procedures

Would you like support to manage VAT and Duty liabilities on your imports from outside the EU? Reach out to Rhenus Logistics to discuss the opportunity to postpone the payment of VAT and Duty at point of entry.

Rhenus Logistics operates a Public Warehouse Type 1, utilising the simplified procedure of Entry in Declarants Records. This facility allows importers to postpone the payment of VAT and Duty until the month after they are consumed.

Rhenus Logistics offers a full suite of warehouse and logistics services such as Vendor Managed Inventory, Order Fulfilment and Line Feed, Pick & Pack etc. all from our facility off the Naas Road, Dublin. With global services by air, land and sea Rhenus Logistics can meet all your freight and logistics needs.

To discuss Simplified Procedure or any other aspect of your supply chain please speak to Rhenus Logistics today

Contact your local Rhenus Logistics office.

Lynda Barry / Tel +353 (0)1 429 2300 / [email protected]     www.rhenus.com

Revenue

About Rhenus: Turnover at the Rhenus Group tops € 4.8 billion, making it one of the leading logistics service companies with global operations. Rhenus has business locations at more than 610 locations worldwide and employs 29,000 people. The Rhenus business areas - Contract Logistics, Freight Logistics, Port Logistics and Public Transport - manage complex supply chains and provide a wealth of innovative value-added services.

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Brexit Impact on Hauliers, Freight Forwarders & Exporters

From a continental perspective, 56.8% of Irish exports by value are delivered to other European countries and this figure is expected to grow further.

It is impossible to overstate the importance of the British transit route when one considers that two-thirds of Irish exporters go through the UK. But will the UK land bridge remain the quickest and most efficient way to EU mainland?

Currently road transport through the UK takes 12 hours on average whereas the Carriage Ro-Ro Ferry Services may take up to three times as long to get to the same destination.

In terms of delays — taking into consideration the worst case scenario where border controls exist — we are talking about four different check points between Ireland and the EU mainland. The first upon exiting Ireland, the next two while entering and exiting the UK and the last on entrance to the EU.

Delays will be inevitable unless both the company exporting goods and the hauliers are AEO authorised and/or can prove they have a secure supply chain.

Customs resources at each point will be restricted which will also mean added delays.

Alongside this, hauliers may now need to be able to produce Customs Documentation such as Transit Documents, access the NCTS EU Computer system for managing transit and provide Customs Guarantees for the Transit operation.

Finally, customers will start requesting information regarding their hauliers’ Brexit plans as this will be a critical component of a company’s AEO application.

This raises the following questions:

  • How much time will Brexit add to the usual transit time?
  • What is the solution to minimise it?
  • Do we need to look for AEO?

These are the questions Irish hauliers and freight forwarders have to plan for and they need to plan sooner rather than later to be able to keep their usual business going, meet customer delivery deadlines and maintain profits.

For further information on Brexit and all customs queries please contact BDO.

For more information about our partnership with BDO Ireland click here.

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What is Customs?

Many companies are now having to try to understand Customs and Trade legislation for the first time with the potential requirement to lodge Customs Declarations on purchases and sales with the UK.

The purpose of this article is to look at the key essentials to consider.

The first thing to remember is that Customs Duties and Customs Declarations are required each time you cross an International Border. Therefore on sales to the UK for example, you will need to lodge an export declaration from Ireland and an import declaration into the UK.

The same requirements currently exist for all International Trade between Ireland and any non-EU country.

In preparing your customs procedures you will need to look at your requirements from both a customs compliance perspective and a cost savings perspective.

You will also need to look at your type of imports e.g. whether it is capital equipment, raw material/parts or excisable goods. There can be different rules and cost-saving opportunities for each type of transaction and it is best to review this well in advance of importing as Customs Authorisations can take some time to secure.

Customs Compliance

  • EORI

Firstly, in order to be able to import into Ireland from outside the EU, or export out of Ireland, you will need a customs registration known as an EORI number.

The EORI is a unique EU Customs Registration which enables you to interact with Customs in each Member State.

  • Import Procedures
    There are generally two options for importing into Ireland from a customs administration point of view.

These are as follows:

  1. Authorise your freight/clearance agents to pay the import duty, import VAT on your behalf and invoice this back to you.
  2. Pay the duty directly to Customs – ideally with a deferred payment account authorisation to enable one monthly payment rather than individual payments each time your goods cross the border.

A deferred payment account will however require provision of a Guarantee and we would recommend allowing three months to obtain this authorisation and guarantee.

Duty Costs

Along with establishing a method for importing and exporting you will also need to look at the duty costs associated with importing goods.

One of the most important aspects of this is being able to determine the duty rate applicable to your goods. This is based on what is known as the tariff code.

The tariff code for imports is a 10-digit number which equates to a description of the item. Each tariff code has a separate duty rate. Therefore it is critical to classify your products under the right tariff code in order to ensure the correct duty is paid. If you pay too much you will be disadvantaged financially. If you pay too little you are likely to have to pay an additional amount later, when you have a Customs audit. In addition the tariff code must be correct as this is critical security information for Customs.

Determining tariff classification will often be one of the biggest projects a company has to take on.

Along with the duty rate you will also need to determine the origin of goods and whether the country you are importing from has a preferential trade agreement with the EU. This will be critical in the context of any new UK-EU Free Trade Agreement. It is currently a huge benefit for companies trading with Canada or South Korea, for example, where accurate determination of origin can yield significant duty reductions.

Finally you will need to look at ensuring the correct value is given to Customs for the goods.

These aspects of Customs should all be drafted into a Procedure Manual to ensure compliance and to support ongoing management of Customs – a critical issue in our post-Brexit world.

If you are likely to be impacted by additional costs you will then need to review opportunities for duty and costs savings.

This will be the focus of our next article.

For further information on Brexit and all customs queries please contact BDO.

For more information about our partnership with BDO Ireland click here.

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Brexit Funding Support

As a follow on to our piece on this last year we find companies often ask what supports are out there to prepare for Brexit.

There are a number of loans, grants and training programmes which are on offer and it’s a good idea to take advantage of these to start preparing for Brexit.

These can be summarised as follows:

 

Intertrade Ireland

Intertrade Ireland offers a voucher of up to €2,000 (or £2,000 if applying from Northern Ireland) to help SMEs seeking support and advice in relation to Brexit.

It is important to be mindful of the time frames within which you are required to choose a Service Provider and submit a terms of reference within a month of the voucher being issued.

This money can be used to complete an initial Brexit impact assessment which will provide a guideline for your business for the next year.

 

Enterprise Ireland - Be Prepared Grant

Enterprise Ireland launched its Brexit SME Scorecard in which SMEs can register to assess their readiness for Brexit.

The Be Prepared Grant offers up to €5,000 to assist in the cost of developing a strategic response to Brexit.

This grant is available to Enterprise Ireland client companies who are directly or indirectly exposed to the UK market.

It is important to bear in mind that you do have to also match the €5,000 being spent but this enables a comprehensive Brexit analysis to be completed.

Enterprise Ireland also offer training and one-to-one workshops which companies are well advised to take advantage of.

 

Enterprise Ireland - Agile Innovation Fund

Enterprise Ireland launched its Fast Track Agile Innovation Fund to give companies rapid access to innovation funding.

The fund is targeted at companies looking to respond quickly to market opportunities and challenges posed by Brexit, helping companies develop new products, processes and services for new market opportunities and enabling exporters to respond quickly and maximise export performance.

It allows companies access grants of up to €150,000 in support for product, process or service development projects with a total cost of up to €300,000.

 

Bord Bia

Bord Bia run three month workshops for companies to assist them with developing their knowledge of customs and trade in order to expand their business outside of the European Union.

If you are a Bord Bia client we would strongly advise contacting their Brexit team to take advantage of this.

 

Brexit Loan Scheme

Preparation, innovation and adaptation are key focuses for Irish businesses facing the opportunities and challenges posed by Brexit. Such actions however require working capital.

This has been acknowledged by the Irish Government who announced in October 2017 the implementation of a Brexit Loan Scheme to support Irish businesses and assist them in the preparation of their action plans.

Through this programme the government set aside up to €300 million which is available at competitive rates to SMEs (40% of which are planned to be specifically used to benefit the agri-food sector – acknowledging it as a particularly exposed sector). The scheme excludes farmers and fishermen for whom alternative schemes should be further discussed.

 

CONCLUSION

While different conditions will apply, these offerings will benefit:

  • Traders and manufacturers
  • Companies facing cross border issues
  • SME's

BDO’s key message is to take action now and plan for Brexit with the resources that are available to you.

For further information on Brexit and all customs queries please contact BDO.

For more information about our partnership with BDO Ireland click here.

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The world’s largest short sea roll-on roll-off vessel launched from Dublin Port

Following from our article in the last edition “Soft Brexit or Hard Cheese” we have recently seen the markets reacting with additional capacity on Dublin to The Netherlands/Belgium route.  Cobelfret/CLDN recently launched a vessel almost twice the size of any other ferry operating in Dublin Port. Officially named MV Celine it has already acquired the nickname of Brexit Buster.

It is positive to see the market supply more capacity as Brexit looms and we expect others to follow suit providing new direct lanes into Europe.

We will keep you posted.

For more information about this partnership click here.

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Rhenus Air & Ocean joins Pharma Gateway Amsterdam initiative

Last December Rhenus Air & Ocean signed the partnership covenant with Pharma Gateway Amsterdam (PGA). Schiphol Group, Air Cargo Netherlands and 18 logistics companies have initiated Pharma Gateway Amsterdam with the aim to establish Schiphol as the best European pharma hub.

The purpose is to retain, enhance and attract pharma business to Schiphol by offering pharma shippers an IATA CEIV Pharma certified (and/or equally qualified programs focused on airfreight) closed supply chain.

Marketing & Communication, Quality & Transparency and Knowledge & Innovation will be the core activities of the PGA community.

PGA’s ambition is substantiated by five USPs: high quality, full transparency, most innovative, most efficient and best connected.

Rhenus Air & Ocean will meet on a regular basis to discuss a.o. shipper requirements but also to actively participate in agreed improvements of the pharma supply chain.

Rhenus’ pharm hub in The Netherlands has three different temperature controlled cells, its own customized ULD handling services for inbound and outbound with direct access to airside, and Customs control & security screening in our own warehouse.

Find out information about Pharma Gateway Amsterdam: https://pharmagateway.nl/  or contact Lynda Barry, Rhenus Logistics, Dublin, Tel 01 429 2300 / [email protected]

For more information about this partnership click here.

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