Recently, HM Revenue & Customs (HMRC) took a significant step forward in clarifying processes for imports and exports between the UK and the UK Continental Shelf (UKCS). In this blog post, we will break down the latest developments and how they impact your industry.
Since 2016, businesses have grappled with a mix of customs procedures, leading to an uneven playing field. HMRC’s latest initiative, Declaration by Conduct, aims to streamline these processes, providing clarity and fairness for all stakeholders. This simplified approach will see eligible goods utilising Declaration by Conduct, while non-eligible goods will require full customs entries.
So, what constitutes eligible goods? For outbound shipments to the UKCS, eligible goods include non-licensable or excisable items in Free Circulation or under Authorised Use in the UK. Similarly, inbound shipments from the UKCS must meet criteria for Returned Goods Relief (RGR) in addition to being non-licensable or excisable.
The Declaration by Conduct process involves submitting a simplified data set via the Government Gateway Portal, including information on declarants, shipping locations, item descriptions, and customs procedures. This declaration must be transmitted two hours prior to vessel departure or arrival, with a reference number generated upon submission.
Crucially, shippers must maintain comprehensive records of all items shipped to demonstrate eligibility. While HMRC will provide further guidance, these records are expected to include details such as Harmonized System (HS) Codes, values, quantities, country of origin, and RGR eligibility. This ensures transparency and facilitates auditing by HMRC to confirm compliance.
As we prepare for the implementation of Declaration by Conduct, several key points merit attention:
1. Responsibility for Declaration: HMRC holds no preference over who completes the declaration, but liability for mis-declared items will trace back to the responsible party. Likely you will have a customs agent who can take this responsibility on.
2. Returned Goods Relief: Records must be held demonstrating eligibility for RGR, that goods were held in Free Circulation in the UK within the last three years. If goods have been offshore for more than three years or if proof is unavailable, this may have an impact on duty and VAT obligations when bringing goods onshore.
3. Sanctions and Compliance: Items subject to sanctions, such as goods of potential Russian origin, will require full customs entries.
4. Consequences of Non-Compliance: Non-compliance may result in delays at the border, fines or even the loss of eligibility for Declaration by Conduct, necessitating full customs entries for all goods.
HMRC anticipates making the system available in summer this year, with ongoing developments such as the integration of sailings inventory via a C21 dependent on the rollout of the Customs Declaration Service (CDS) in March.
As these changes unfold, LS Customs remains committed to supporting your business through tailored consultancy services, ensuring seamless adaptation to evolving customs procedures. By staying informed and proactive we can navigate these changes together, unlocking opportunities and mitigating risks.
The Customs Declaration Service (CDS) Export System will become mandatory in March 2024, ushering in a new era for exporters.
This transformative system brings about significant changes to the existing export processes, introducing enhanced features and a more structured framework. Among the key modifications are the replacement of traditional boxes with data elements, an expanded set of data fields, and the reorganisation of critical documents, licenses, and shipment codes.
Revamped Data Elements:
One of the primary changes in the CDS export system is the repackaging of information. Boxes in the new system are organised based on data elements, providing a more intuitive and organised approach. This restructuring aims to simplify the input process for exporters and improve accuracy.
Extended Data Fields:
In comparison to its predecessor, the Customs Handling of Import and Export Freight (CHIEF) system, CDS offers more extended data fields for crucial documentation such as licenses, shipment codes, and other relevant documents. This enhancement allows for more detailed and accurate reporting, ensuring that the export process is well-documented and compliant with regulations.
New Structure of CPC Codes:
The Commodity and Product Codes (CPC) form a critical part of export documentation. The CDS export system introduces a new structure for CPC codes, aiming to align with international standards and improve the accuracy of classifying goods. Exporters should familiarise themselves with these changes to ensure seamless and compliant reporting.
Additional Dataset Requirements:
The CDS export system introduces additional datasets to enhance the depth of information provided. This includes details on the nature of the transaction, valuation methods employed, and the Incoterms used for the shipment. These additions contribute to a more comprehensive understanding of the export process and facilitate better decision-making.
Country of Origin Requirement:
One crucial requirement in the new system is the mandatory inclusion of the country of origin for exported goods. This information is vital for determining eligibility for preferential trade agreements, ensuring compliance with trade regulations, and providing transparency in the global supply chain.
With the upcoming changes, exporters must prepare for a more detailed and streamlined export process. Staying informed and adapting is essential for ensuring compliance, efficiency, and competitiveness in the ever-evolving global market. As the new system goes live, exporters should embrace these advancements to unlock the full potential of modernized trade documentation.
At LS Customs, our team is ready to help your organisation prepare to meet the challenges of this transition. Please reach out if you would benefit from a deeper discussion.
At LS Customs, we have always been committed to providing top-notch services to our clients, ensuring their smooth navigation through the complex world of international trade. Today, we are delighted to announce that we are expanding our offering to include comprehensive trade compliance services.
We recognise the importance of compliance with export regulations and the need for businesses to stay up to date with the ever-evolving trade landscape. To address these needs, LS Customs now offers an array of additional trade compliance services to complement our existing customs consultancy solutions.
Here’s a glimpse of the new services we provide:
- Export license checks: We offer meticulous export license checks to ensure your exports of dual use material comply with all applicable regulations. Our team will thoroughly review your documentation pre and post shipment, saving you time and preventing any potential compliance issues.
- Export license applications: Navigating the export license application process can be overwhelming. Our experts will guide you through the entire application process, ensuring that all required information is accurately compiled and submitted, leading to a smooth approval process.
- DGSA services: From 1st January 2023, dangerous goods consignors now face a legal requirement to have a named DGSA (Dangerous Goods Safety Advisor) on their books. Our team of experienced professionals can act as your named DGSA: conducting DGSA audits, offering ongoing advice to your team, investigating any dangerous goods incidents, preparing your annual report and ensuring your compliance with the latest regulations to help you maintain a safe and secure environment for transporting dangerous goods.
At LS Customs, we are dedicated to staying abreast of industry changes and regulatory updates. Our expanded trade compliance services align with our core mission of assisting businesses in meeting their legal obligations while optimising their international trade operations.
Whether you are a small business or a multinational corporation, our team of knowledgeable consultants is here to support you every step of the way. We pride ourselves on delivering tailored solutions that meet your unique needs, ensuring seamless compliance and facilitating your global business endeavours.
If you would like to learn more about our new trade compliance services or discuss how LS Customs can assist your business, please reach out by emailing queries@lscustoms.com. Our team is ready to engage in meaningful conversations and help you navigate the intricacies of international trade.
Please join us in welcoming Rosario San Andres Cervilla, who joins the team at LS Customs as a Trainee Customs Coordinator. Rosario discusses her career progression, areas of expertise and future goals.
How has your career progressed to where you are now?
I studied marine biology at the University of Aberdeen and went on to achieve my diploma in ecology and environmental sustainability. Following this, I began a career in the oil and gas industry as a Marine Mammal Observer where I worked offshore on boats and rigs. When I heard that LS Customs were looking for a Trainee Customs Coordinator, I thought it would be the perfect opportunity to learn something new whilst building on my past experience in the industry.
What is your area of expertise?
My previous employment and academic background have given me a vast knowledge of data collection and analysis, which are extremely useful skills in my current position. I also have a strong background in customer service, having worked in several customer-facing roles. I am looking forward to using that experience to provide clients with expert advice on their customs queries.
What has been the highlight of your career so far?
The highlight of my career has been joining the team at LS Customs and learning new skills. Currently, my main responsibility is to check import and export declaration entries and I am excited to continue expanding on my skillset as I advance in my career.
Do you have any goals that you would like to achieve in the next few years?
I would love to become a fully qualified Customs Coordinator and one day cycle The North Coast 500.
Discussions with HMRC, OEUK and the UK Government on a permanent customs solution for the UK Continental Shelf (UKCS) are moving forward, with the industry’s preferred option of declaration by conduct receiving ministerial approval.
This will enable non licensable and free circulation goods to move to and from the UKCS without a formal customs entry being processed through the Customs Declaration Service (CDS) or Customs Handling of Import and Export Freight (CHIEF).
In the absence of an entry, there will still be a requirement for a detailed manifest with every shipment. LS Customs will be working with OEUK as part of the industry group as these details are finalised prior to any implementation.
Please note that this is still in progress with no definitive timetable in place. Until the legislation has passed, your current process for UKCS shipments will remain the same. Sign up to our newsletter for further updates.
