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What is a Freeport?

What is a Freeport?

What is a Freeport?

By David Hooper, August 22, 2019, Category: General News

International Trade Secretary Liz Truss recently announced that the UK would create up to 10 freeports in the UK. She stated that they would create ‘thousands of jobs”.

  “Freedoms transformed London’s Docklands in the 1980s, and free ports will do the same for towns and cities across the UK” she added.

Mr Johnson backed the creation of new free ports as a Tory leadership candidate, suggesting there should be “about six” around the country.

Freeports are a special kind of port where normal tax and customs rules do not apply either at an airport or seaport. At a freeport, imports can enter with simplified customs documentation and without paying tariffs. Businesses operating inside designated areas in and around the port can manufacture goods using the imports and add value, before exporting again without ever facing the full tariffs or procedures.

If the goods move out of the freeport into another part of the country, however, they have to go through the full import process, including paying any tariffs.

Freeports are similar to free zones, or ‘enterprise zones’, which are designated areas subject to a broad array of special regulatory requirements, tax breaks and government support. The difference is that a freeport is designed to specifically encourage businesses that import, process and then re-export goods, rather than more general business support or regeneration objectives.

Would there be any benefit Post Brexit.

Most experts argue that benefits can be very small – the the University of Sussex recently put together a report on Freeports which suggested that the major risk was displacement of jobs from nearby areas as opposed to new job creation as well as providing other conclusions on why Freeports would be of little benefit to the UK Economy. In addition to this UK firms already benefit from the process of importing raw material duty and Vat free under the Inward Processing scheme, therefore, you could argue that any firms wishing to benefit from the process already can.

Future

The issue, therefore, should be about explaining to business what current procedures they should look at in the future to help offset any problems from loss of frictionless trade with the EU, and to help and encourage businesses to export to Non EU countries as creating expensive freeport areas is not the answer Post Brexit for the majority of firms involved in international trade.

To keep up to date with other freight-related news and articles please visit our website and follow us on LinkedIn to stay informed.

If you have any upcoming projects that we can support you on, please contact us directly on +44(0) 2476 343 037 and we’d be happy to help manage your freight journey.

Brexit Planning Workshop for Importers & Exporters

Brexit Planning Workshop for Importers & Exporters

Brexit Planning Workshop for Importers & Exporters

By David Hooper, August 09, 2019, Category: General News

In 2016 Boris Johnson, now the UK Prime Minister stated that:

  “We are proud to be running some workshops with the Coventry and Warwickshire Chamber of Commerce to help local businesses plan for Brexit. These will be full of content that you will find useful and allow you to make the decisions you need to make around Brexit.”

The first event is on 11th September.

Do you want to get your business Brexit ready but don’t know where to start? This workshop is designed for businesses that import & export and will cover the various aspects of international trade that will be affected by leaving the EU. It will also look at what steps you can take to prepare including conducting a supply chain audit, reviewing your customs processes and special procedures such as inward processing, outward processing and the AEO scheme.

This exciting workshop will bring you up to speed with the Brexit process and the key practical aspects of international trade that will be affected by Brexit including:

The Exit Process – What’s happening and when.

Trade Now and After Brexit:

  • How trade currently works with the EU and what will change
  • The current Single Market and Customs Union Model
  • Current Free Trade Agreement’s through the EU

The Post-Brexit Trading Models:

  • Customs Union, Single Market, Free Trade Agreement and their practical implications for importers and exporters
  • No Deal Implications
  • Practical Considerations such as tariffs, import VAT, customs declarations etc

Practical Steps to Take such as:

  • Conducting a supply chain audit
  • Using special procedures to minimise impact – for example IPR, OPR, AEO etc

Price:

  • Member: £250 + VAT
  • Non-Member: £295 + VAT

If you wish to book your place please contact Adele Wheatley adelew@cw-chamber.co.uk / 024 76654321

A Canada Style FTA post Brexit – what are the positive and negatives from this arrangement?

A Canada Style FTA post Brexit – what are the positive and negatives from this arrangement?

A Canada Style FTA post Brexit – what are the positive and negatives from this arrangement?

By David Hooper, August 08, 2019, Category: General News

In 2016 Boris Johnson, now the UK Prime Minister stated that:

  “I think we can strike a deal [with the EU] as the Canadians have done based on trade and getting rid of tariffs. It’s a very, very bright future I see.”

He was at the time referring to the fact that the UK could agree a deal with the EU based on the Free Trade Agreement the EU had agreed with the UK.

Some argue a deal like this could still be reached with the EU either before we leave on the 31st October or afterwards. However, even if a deal like this is agreed which most would agree is better than ‘No Deal’ this is still not the frictionless trade which many Politicians carelessly suggest.

The practicalities and complexities may actually be the same as no deal for other trying to prove that goods qualify under preferential rules of origin it could be even more bureaucratic.

POSITIVES:

Unlike ‘No Deal’ Tariffs would be eliminated on most products wholly produced or manufactured in the UK and EU – however, see rules of origin under negatives.

Public Procurement – businesses in the both UK and EU may still be able to bid for public contracts

NEGATIVES:

Businesses would need to do a Customs Declaration at import/ export – Incotmers would become even more important in understanding where risk and responsibility starts and finishes.

Businesses would need to meet complex rules of origin to ensure their goods 

Duty would still be payable on goods consigned from third countries imported into the UK or EU and then exported out to the UK and EU – due to the UK leaving the Customs Union. E.g. -A shipment is imported from China to the UK goods are repackaged and distributed to EU customers under this scenario duty would have to be paid twice once at import into the UK and again in the EU.

UK businesses will need to pay Import VAT albeit the Government originally stated under a ‘No Deal’ this could be deferred until the VAT return is made – however, for EU customers they may have to pay VAT before they can receive their goods. If they don’t have a deferment account this may lead to cash flow issues.

Any deal may only grant limited access to service contracts by no means comparable to access under the Single Market.

Therefore our advice all along is prepare for ‘No Deal’ now. Independent Freight Solutions Ltd is ready to support all of our valued existing and new customers in ensuring shipments will managed as smoothly as possible in the event of a ‘No Deal’ but preparing now is important to ensure you’re your business is ready. Independent Freight is a HMRC approved Authorised Economic Operator for AEO (C) Customs and (S) Security.  Out sister Company Hooper and Co can provide additional support by way of training/audits and consultancy on a whole range of international trade and customs related issues. If you would like to find out more about our Freight, Customs or Training Services – contact us

 

Reports of a Post Brexit Free Trade Agreement Between the UK and USA

Reports of a Post Brexit Free Trade Agreement Between the UK and USA

Reports of a Post Brexit Free Trade Agreement Between the UK and USA

By David Hooper, July 16, 2019, Category: General News

There has been a lot of talk in the media about a US / UK Free trade agreement post Brexit. Recent reports suggest that if Boris Johnson becomes Prime Minister this will be the first thing he will look to secure. However, how easy will this be? And how long will it take?  Some argue that the economic benefits to the UK will actually be quite small and be more beneficial to the US than the UK. It has also been commented that the US will also have the upper hand in that any agreement has to be in the interests of US firms or else what’s the point as there is no desperate requirement for the USA in the grand scheme of things. 

The Economist in 2018 also stated that one of the reasons for large scale investment by the US in the UK in the past was to access the EU Single Market a point made the US Chamber of Commerce. Therefore, in reality would the UK actually still be of interest to the USA?

What Progress has been made so far?

So what progress has there been so far behind the scenes, well the groundwork for a future deal began in 2017 with the establishment of US/UK Trade and Investment Working Group. In November 2018 President Trump notified congress that once the UK leaves the EU he intended to negotiate a trade agreement with the UK. 

The US then set out its specific negotiating objectives in Feb 2019. These objectives looked at addressing tariffs with non tariffs. For some UK companies opening up the US market could be very beneficial especially if trade tariffs were reduced to zero and other barriers to entry are lowered, however, the same applies the other way, whereby US firms unable to target the UK due to existing EU/UK tariffs and non tariff barriers could start importing into the UK. 

Concerns from the UK side

Some of the concerns raised in the UK concern the fact that the UK would need to relax certain rules around food hygiene as well as healthcare contracts. Although US firms already compete to deliver NHS contracts which go out for tender the issue is that the US uses different mechanisms for pricing medicines. There is currently a huge gap between what the NHS can afford, and the price certain US firms demand. This may be an area that President Trump will want to address before any deal is signed. Something that could impact on healthcare in the long term in the UK, The US may also demand that tariffs are scrapped on all US cars.  

It should also be noted that Mr Trump may not actually be President after 2020 and that the World may have changed again – therefore any chance of a quick deal being agreed and in place with the USA may take years to complete in reality, if at all!

For more information on the benefits and issues of exporting and importing using free trade agreements including:

  • how and when to use them 
  • paperwork for shipping and 
  • the evidence needed to support them 
  • Implication now under EU rules and in the future post Brexit

Please do not hesitate to contact us if you would like to know more.

Half Day Workshops Available

In the near future Independent Freights sister Company, Hooper and Co will be running a series of half day practical workshops on Free Trade Agreements (FTA’s). If you are interested or have employees who you may like to send, please do not hesitate to contact us.

 

Why you should hire a customs broker before Brexit

Why you should hire a customs broker before Brexit

Why you should hire a customs broker before Brexit

By Jenny Hooper, July 16, 2019, Category: General News

Once the United Kingdom officially leaves the European Union, we will no longer be a part of the EU Customs Area. This has many implications, largely that the UK will have to write its own customs legislation, and trade with members of the EU will change significantly. Namely, freight shipping between the UK and the EU will become subject to customs formalities and procedures. Listed below are some of the biggest changes businesses will be subject to when importing and exporting goods after Brexit.

Licenses and declarations

• Any import and export licenses issued in the UK will no longer be valid in the EU.

• All movement of goods to the UK from the EU will require an export declaration.

• Excise goods, such as alcohol and tobacco, may require an electronic administrative document (eAD)

New charges

• Customs duties will apply to goods moving between the UK and the EU.

• VAT will be charged by member states when importing goods from the UK.

• Payment of VAT and cross-border VAT returns will be governed by new rules.

How can a freight forwarder that offer customs brokerage help?

Hiring a Freight Forwarder who can act as a customs broker will reduce stress during the post-Brexit changeover. A freight forwarder or custom broker’s job is to provide assistance and support in the area of specialist laws and regulations surrounding the import and export of goods. They prepare the customs documentation and liaise with airlines, shipping lines , cargo handlers and other carriers of freight.  They can be given power of attorney to sign legal documents, and handle any duties and taxes payable by their client. By hiring a freight forwarder who can offer the services of a customs broker, you won’t have to take as much time away from other aspects of your business, as you will be confident that you already have someone focusing on the legal side of your imports, exports, charges, and goods storage.

10 things you need to know about the customs clearance process

10 things you need to know about the customs clearance process

10 things you need to know about the customs clearance process

By Jenny Hooper, June 28, 2019, Category: General News

Customs can be a confusing process for those who have never shipped goods before. If you’re looking to send goods overseas or you’re importing goods into the UK, here are 10 things you need to know:

1. Customs clearance is complex

The customs clearance process involves more than simply passing goods across borders – the preparation and submission of documentation is required to facilitate exports and imports.

2. There’s a lot of documentation to consider

Common export and import documentation includes a Certificate of Origin, a sales invoice, a packing list, a shipping bill, insurance, an Airway Bill, a Bill of Lading and much more.

3. Your cargo will go through customs in every country around the world

Every country has its own customs clearance process, and the rules, laws and regulations will vary. Therefore, you will need to do your research before shipping your goods.

4. Customs will request payment of taxes and duties

If these haven’t been paid when the shipment arrives, customs will forward the package to an independent customs broker. This can get very expensive, so pay all charges before sending your shipment.

5. The time it takes varies from shipment to shipment

There’s no set time limit – the process is very much dependent on what goods are entering the country.

6. Customs charges in the UK are calculated using three variables

These are UK Duty, UK VAT and any additional costs like testing, storage and x-rays.

7. All goods are subject to Trading Standards

There are certain items that will attract more attention than others, such as lithium batteries, toys and electronics.

8. Certain items will need an import licence

Items which require a licence are often dangerous or require heavier regulation. Examples include drugs, fur, livestock and nuclear materials.

9. Properly loaded shipping containers can ease the process

Improper loading can lead to extensive searches of shipments, which can result in delays and more expenses.

10. It’s best left to a freight forwarding company

If the wrong person handles your customs brokerage, you could face a number of issues. A freight forwarder will be able to manage all your clearance requirements, including any documentation.

To find out more about Independent Freight’s air cargo and sea freight options, get in touch with a member of our team today.