Companies not ready for Brexit face severe customs delays

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Planning for Brexit Day among companies in the UK ranges from ‘excellent’ to ‘chaotic’, according to cross-border e-commerce specialist Hurricane Commerce. The company says there is a huge discrepancy between those who have put in place robust plans and those who haven’t. Specifically, postal authorities, carriers, e-commerce merchants and marketplaces all face severe impact on their businesses if they are unable to provide complete and valid data on parcels from January 1, 2021.

Martin Palmer, Hurricane Commerce’s chief content and compliance officer, explained, “This is not just about the UK and trading into the EU; it is also about the remaining 27 EU member countries and their cross-border trade into the UK. The phrase ‘My shipment is stuck in customs’ is often used by businesses and the ever-growing number of private citizens using international e-commerce retailers. The perception is that customs officers and their bureaucratic requirements are bringing the world to a grinding halt. The reality is quite different: most customs authorities operate sophisticated, automated clearance facilities taking just a few moments for a shipment with the correct data to clear customs.

“The real problem is usually that the exporter or importer has not complied with the requirements to import a shipment into a country and has failed to supply full and accurate data and documentation. The problem is only going to be exacerbated by Brexit. We know that while some postal operators, carriers and e-commerce merchants are ready for the changes, many more are a long way from being prepared. The state of readiness ranges from the excellent to the chaotic.”

According to the company, some of the main reasons for delays in customs clearance include:

  • Missing or incomplete data – Customs clearance in most countries is automated. Missing or incomplete data will result in an automatic failure.
  • Vague or misleading descriptions of contents – Product descriptions need to be accurate and detailed.
  • Missing and incorrect HS 6 codes – The World Customs Organization Harmonized System uses code numbers to define products. Many logistics service providers (LSPs) will refuse to accept shipments without provision of this information.
  • Incomplete shipper and consignee data – It is essential to provide full shipper and consignee name and address data, including collection and importer details if relevant.
  • Contents require licenses or other specialized paperwork for import – Every country has unique requirements, practices and restrictions for international shipping and determining which commodities can be shipped into and out of a country.
  • Unrealistic valuation of contents – One of the most common duty and tax disputes is an incorrectly declared value. Values should represent the actual transaction value or a realistic market value. An error in value can cost you considerably in import delays and fines.
  • Missing country of origin (COO) – Customs need to know where the commodity was manufactured in addition to where it was exported from. The COO may influence the amount of duty and tax that needs to be paid.
  • Denied parties (DPs) – Denied parties are individuals, organizations and entities that have been placed on a governmental list that limits the ability to do business with them. Most governments have DP lists, as do international organizations such as the United Nations and the EU. Shipments originating from or destined to an individual organization or entity appearing on a DP list can be subject to clearance delays, substantial financial penalties or even jail time.

Palmer added, “Anyone who leaves their Brexit preparations until the last minute is asking for trouble. We are now less than 80 days away from this seismic change in the trading relationship between the UK and the EU. Customs authorities themselves are having to scale up massively to cope with the huge increase in requirement for customs declarations, and there will inevitably be some major challenges as both sides get used to the new norm. It therefore means the more prepared those involved in cross-border e-commerce trade are, the more likely your parcels are to get to their destination as seamlessly as possible after January 1.”

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Lawrence has been covering engineering subjects – with a focus on motorsport technology – since 2007 and has edited and contributed to a variety of international titles. Currently, he is responsible for content across UKI Media & Events' portfolio of websites while also writing for the company's print titles.

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