Importing into Europe19 March 2021
Learn more about the complexities of importing into Europe.
With Brexit now implemented and Free Trade between the United Kingdom (UK) and European Union (EU) a thing of the past, many companies have had to restructure how they do business. Pre-Brexit statistics reveal approximately 48% of shipments out of the UK are headed to the EU, while 54% of those arriving in the UK originated from the EU. Despite this prevalence of trade between the EU and the UK, all the recent changes in legislation are making these kinds of transactions increasingly difficult. The ever-growing climate of confusion and frustration is clear.
Complexity was introduced to the process of exporting from Europe during 2019 when officials announced that from 1 December 2019 only EU-established entities were able to act as an exporter out of the EU. Companies were given until 1 April 2020 to adjust and, where necessary, register an entity. This is a time-consuming and expensive process at the best of times, but with Covid-19 shutting down most of the world this process has been delayed even further. As a result, many international companies are being forced to seek alternative solutions. A significant number of the companies affected have turned to TecEx to act as the Exporter of Record (EOR) on their behalf, finding great value in our EOR, Importer of Record (IOR), and compliance services. So much so in fact that they abandoned their plans to register EU entities and settled on TecEx as a permanent solution.
Now enter Brexit – and with it the end of Free Trade between the EU and the UK. This has had far-reaching consequences, such as:
As the piles of new trade legislation have become common practice, companies are now being required to obtain lists of licenses and permits for even the simplest of shipments. These licenses are extremely hard to come by and require extensive legal counsel to obtain. Certain licenses also have long lead times, such as the Single Individual Export License (SIEL) which can take around 4-6 weeks in approval time. This is just one of many compliance requirements that those wanting to export out of the UK are required to obtain for every shipment – that is, of course, assuming they have a UK registered entity. Even with a UK registered entity, exporting goods requires extensive due diligence around the goods and destinations. This includes detailed records of the shipment which require annual submission and need to be kept for auditing purposes. Using TecEx eliminates this requirement as we perform the submissions on our client’s behalf and maintain all documentation in case of an audit.
These new trade rules have also added complexity to the process of calculating taxes and duties. Accurately calculating these taxes and duties takes years of experience, requiring accurate identification of HS codes and expert knowledge of trade relations between origin and destination countries. A miscalculation in this department can be catastrophic in terms of cost. Top-up invoices due to miscalculated taxes can sour client relationships or tip budgets over the edge into loss-making deals, while a missed compliance document could result in lengthy delays at customs.
TecEx has years of experience and a proven track record in facilitating complex and high-value transactions for many UK & European companies. With the ability to act as both Importer of Record (IOR) and Exporter of Record (EOR) in the UK and EU, TecEx is an ideal partner for those struggling to navigate the maze that is Post-Brexit trade. One of the major benefits that TecEx offers is our OIEL, an open export license that allows us to act as the exporter out of the UK. This license means our clients do not have to apply for a SIEL, drastically cutting lead time for shipments by weeks. This license is exceptionally difficult to obtain and places significant risk and burden on the holder. So much so that several of our UK-based clients have been making use of our Exporter services, despite holding their own OIEL.
We are also able to offer EOR out of the EU for those UK registered entities who were previously exporting directly out of the EU but are now unable to do so after Brexit. Using TecEx’s EOR service means that our clients, in any location, can export out of Europe with significantly less cost and risk.
In addition to being able to act as IOR in both the EU and the UK, TecEx can act as IOR in over 200 other destinations around the globe. We are able to facilitate imports into any European country using our already established processes. This saves UK clients from having to research the individual compliance regulations in each EU Member State, which differ in subtle but significant ways. By acting as the IOR, TecEx also takes on the significant legal and financial risks associated with the importing process.
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