Head of the Customs and Brokerage Department of ZAMMLER Logistics Companies Group about the specifics of custom registration of goods.
The recent news about customs restrictions on the import of branded goods has shaken the business community and raised many questions not only from importers, but also from exporters. The export potential of Ukraine continues to grow, so the customs clearance of goods, including those listed in the State Fiscal Service of Ukraine, is an important issue for both novice and experienced exporters.In the first quarter of 2017, the volume of Ukrainian goods sold to foreign markets amounted to $12.4 billion, which is 28% more than last year. This is evidenced by the latest data of the Ministry of Economic Development of Ukraine. Theoretically, Ukrainian producers now have great opportunities for expanding their business, because different areas of the world are open for the sale of goods. The European Union remains the main trading partner of Ukraine today. Also, India, Russia, Turkey, Iran, Egypt, and USA are among the countries that showed the largest increase in exports of Ukrainian goods in the first quarter of this year. It is likely that this list will soon be complemented by Canada, with which, in early April, Ukraine had completed ratification of the Free Trade Area. The signing of the Free Trade Agreement with Israel is currently under negotiation.
Despite the open horizons, many companies face significant difficulties at the customs clearance stage. Due to the thorny legal framework, the specifics of the work of customs services and constant changes of regulatory acts, customs clearance has been associated with a number of risks that can be minimized or completely prevented.
What should pay attention to in the customs clearance process so that the cargo “should not be stuck” at the border?
FULL PACKAGE OF DOCUMENTS
The customs registration of an export declaration requires the submission of the following documents:
You should know:
— if you intend to sell different products under a single contract and the seller may require different conditions then it is better to indicate that the terms of delivery are indicated in the invoices (contract specifications) for each consignment.
— any terms of payment may be indicated, but it must be taken into account that, according to the NBU regulation No. 410, the term for currency admission for export should not exceed 120 days. Non-observance of terms should entail a penalty for each day of delay in the amount of 0.3% of the amount of non-receipt of proceeds.
— The list of documents accompanying the goods must be as complete as possible. There are precedents when the contract prescribes certificates of conformity or bank charges that the customs does not control. But, if they are registered, then they can apply for customs clearance. Therefore, it is recommended to list only: invoice (4 pcs.); packing sheet (4 pcs); transport document depending on the nature of the carriage; veterinary/phytosanitary certificates, if required by the product code.
2) Invoice. The broker gathers from it the basic information in the declaration.
If the goods are shipped free of charge, then the price information should be indicated for the customs clearance, and it is not intended for commercial activity. In this case, the INVOICE Proforma, which is identical to the invoice, except for the name, is submitted.
3) Packing list. This is an analogue of the invoice, only the following information is indicated instead of the price: quantity, gross weight, net weight, type of packaging (pallets, barrels, boxes, etc.). You can combine the packing list and invoice, or prescribe the weight in the specification to the contract.
4) Transport documents. This is the CMR for auto-delivery, bill of lading for sea shipping or airway delivery for air transportation. Should be made up by the carrier.
You should know: It is better to send out the documents to the business partner in advance so that it can check them and confirm them until the goods have crossed the border.
Correct classification under UKT ZED (The Ukrainian Classification of Goods of Foreign Economic Activity)
Classification of goods during customs clearance should be carried out by a broker based on the Law of Ukraine “On Customs Tariff of Ukraine”, and is called UKT ZED. Every product that crosses the border of Ukraine must be encoded in accordance with this classification.
There are situations when the customs system automatically generates the risk of classification of goods, or the inspector itself sets out the form of control over the classification. In the latter case, it may be necessary to prove that, conditionally speaking, the hanger is really a hanger, and not part of the hadron collider. In such circumstances, the broker provides additional information. However, if the department of the nomenclature determines that the hanger can whip milk and therefore it should be considered a mixer, it will require a laboratory examination, which takes from 10 to 40 days. In summary, the product code should be confirmed or changed.
You should know:
— The decision of the customs authority regarding the code of the goods is obligatory, but the exporter may apply to the court to appeal the conclusion of the examination.
— For the classification of the goods the exporter may apply for an expert opinion to the Chamber of Commerce and Industry. However, this code can be changed by the customs. An alternative should be when you apply to the customs authority, either by yourself or through a broker, for receipt of the PRK (preliminary decision on classification), which should be issued within 30 days, accepted by all customs authorities, and valid for 3 years.
TARIFF AND NON-TARIFF REGULATION
Tariff regulation is the use of customs duties when exporting goods. The website of the State Fiscal Service of Ukraine contains the "List of Goods, for which the Laws of Ukraine Set the Rates for Export Duty in 2017." But to use it, you will have to define the product code first.
Non-tariff regulation involves several types of controls, among which the most common are:
You should know: If the documents for the product cause suspicion to the inspector, an additional procedure for laboratory analysis will be assigned.
You should know:
— At the visit of the inspector to the production area, the exporter is deprived of the necessity to carry out the analysis every time and wait for one day at the customs.
— You should pay particular attention to wooden pallets. When exported, they should be marked with a cone, have act of fumigation of pallets and purchase documents. The situations occur when pallets are not properly labelled, and in this case the customs refuses to release the goods on the pallets.
At the end of May, customs authorities restricted importing goods from well-known brands purchased in foreign online stores, at the request of legal owners or their representatives. As explained in the State Fiscal Service of Ukraine, the restriction applies to counterfeit goods or goods whose origin has not been able to be established. Quite often, exporters face similar problems.
According to the Ukrainian legislation, customs clearance of goods entered in the Register of intellectual property objects should be suspended for up to 10 business days to obtain the permission of the copyright holder of the trademark. If the permit is received, the cargo should cross the border. In case of refusal, the goods may be confiscated.
You should know:
— Be sure to check the customs registry. Even if you export nuts, check if the packages in which you packed the product are not intellectual property.
— If the exporter has a warranty letter from the right holder, the customs clearance should still be pending until the management of the customs service receives a fax from the right holder of the trademark confirming that the goods can cross the border.
Other types of control that occur quite rarely, include: dual/military goods (the permission of the State Export Control Service of Ukraine) and cultural values (the permission of the Ministry of Culture of Ukraine).
ORIGIN OF THE GOODS
Rules of origin of goods also have a number of nuances. Consider an example of foreign economic relations with Canada under free trade agreement. According to Article 3.2 of Chapter 3, there are three types of origin of goods: fully manufactured; produced exclusively of materials that are manufactured in Ukraine; subjected to sufficient processing.
Importance of customs clearance is difficult to be overestimated. There are still many subtleties and standards that you should know. Professional approach and deep expertise carried out under UKT ZED in gathering the necessary documents and passing all customs procedures allows to avoid penalties, confiscations of goods and additional logistic costs.