The increasing attractiveness of UK exports to overseas markets, thanks to the fall in the price of the pound, and a growing demand for ‘made in Britain’ produce in economies such as China and India, makes now an ideal time for UK retailers, distributors and manufacturers to explore the benefits of export.
So whilst it’s an exciting time if you’re looking to expand your business into new markets, it’s also necessary to ensure that relevant processes are followed and that all documentation is provided (and correctly completed!) in a timely fashion, to avoid encountering any problems, and additional costs or delays being incurred against your exports.
After all, a good reputation and cash flow are significant factors in the success of any business. Making sure that you can maintain stock levels to meet customer demands, whilst ensuring the financial capabilities of your company can mean the difference between a flourishing business model and a floundering one.
What documentation is required for the export process?
Firstly, ensure that you have a written contract in place with your buyer. Utilising incoterms in your contract helps to ensure transparency of each party’s responsibilities and of the costs chargeable in relation to the shipment. Depending on your company requirements, we can advise of the best term under which to conduct trade. It’s also important to outline payment methods in the contract, including specifying currency for transaction.
Letter of Credit
Because of the time it takes for cargo to reach destination, you may wish to utilise a Letter of Credit, an instruction by the importer’s bank to an overseas bank to pay you, the exporting company. The buyer sets a list of terms and conditions under which they would like to buy and ship the cargo, you as the seller prepare the goods and documents based on the terms and conditions of Letter of Credit, and when your buyer’s bank is happy that the payment criteria has been met, the payment is released.
Once your contract is in place, it’s time to arrange your shipment documentation. Provision of a commercial invoice and packing list is necessary to identify the contents of the shipment and the value of the goods. These documents are often used by governments to assess import Customs duties that are payable against the goods so be sure to provide an accurate description else you could find too much duty is charged against the goods.
In addition, certificates may also be applicable for your export shipment.
Certificates of Origin
Certificates of Origin, or other origin criteria certificates are often required by the import country. Evidence of the country of origin can enable importers to take advantage of preferential tariffs. For example, a EUR1 enables companies to take advantage of the 3rd country preferential trade agreement with the EU, qualifying for reduced or zero Customs duties. Tariffs such as anti-dumping duties are also levied against goods imported from certain countries, where a certificate of origin is used as evidence as to whether such payments are applicable.
Other certificates and licences are applicable for specific goods
Depending on the type of produce that you are shipping, an export licence may also be required. Controls are often placed on exports of plants, animals, agricultural produce, medicines, chemicals, valuable antiques and artwork, military items and dangerous goods such as paint, batteries and fireworks. Similarly, such licences may be applicable on the import of goods to the UK, which is particularly worth bearing in mind if importing raw materials to the UK for processing ahead of re-exporting. It’s wise to check that you have the correct licences in place as without them, you will be hard pressed to export or import goods.
You may also find that you need import certificates to allow your goods entry to your destination country. You should check what documentation applies to your destination country. Different countries operate different standards for imports. For example, meat exports to the Middle East require a ‘Halal‘ slaughter certificate in addition to a health certificate.
Shipments with incorrect or incomplete declarations may be held by the port authorities on arrival at the destination country, amassing additional charges for storage whilst awaiting release. They may even refuse clearance of the container altogether, with arrangements having to be made for the re-export of the goods, which can prove costly.
What if your exports are temporary?
Ifyou are looking to export goods to a destination on a temporary basis, such as items for trade exhibitions, it may be possible to arrange for an ATA Carnet, which is used to clear Customs without paying duties and import taxes on merchandise that will be re-exported. The validity of these varies, but never exceeds 12 months.
Proceeding with your shipment
Once the relevant documentation is in place, it is possible to proceed with arranging the shipment. A Customs export declaration needs to be made via the CHIEF (Customs Handling of Import and ExportFreight) system. IMO’s SOLAS (Safety of Life at Sea) regulations introduced last summer also require for a VGM (verified gross mass) to be provided for all ocean freight containers. Then it’s over to your carrier!
Bill of Lading
On receiving the cargo, after completion of customs formalities, the carrier will issue a Bill of Lading. The BOL documentation is completed by the carrier as evidence that they have received the goods, and acts as a contract between the owner of the goods and the carrier. A BOL is significant as it is required for proof of ownership upon collection of the goods when delivered to destination so be sure to supply a copy to your buyer!
You may now be thinking that exporting is a complex process, involving a lot of documentation, but it all really depends on the items that you are shipping. And you needn’t worry, as enlisting the experience of a freight forwarder, they will be able to handle the complexities of the process on your behalf, making the procedure a breeze. So if you’re open to export, why not get in touch with us today to talk through how we can be of assistance.