1. What is inward processing relief (IPR)?
Inward processing relief (IPR) is if you intend to re-export goods you've imported after processing them, you can apply for inward processing relief. This means VAT and duty only become payable if you decide to sell your goods in the UK or if you fail to meet the conditions of the scheme.
Forwarding agent is most smaller importers use a forwarding agent to handle customs clearance for goods coming into the UK from outside the EU.
DEQ is delivered ex quay (named port of destination). This is an Incoterm. Find more information about Incoterms at the Incoterms 2000 website. The seller clears the goods for export and pays for delivery. The goods are delivered when they're placed on the quay at the named port of destination. The buyer is responsible for clearing the goods for import and associated costs, unless agreed otherwise.
Groupage is this allows exporters of small consignments to gain the benefits of containerisation. A freight forwarder undertakes to group together different exporters' consignments to fill a whole container for a particular destination.
CIP is carriage and insurance paid to (named place of destination). This is an Incoterm. Find out more information about Incoterms on the Incoterms 2000 website. The seller clears the goods for export and pays for delivery to the named destination. The goods are delivered when the seller passes the goods to its carrier. From this point the buyer takes responsibility for all costs and risks. But the seller must also take out insurance to cover the buyer's risk during transport.
6. What is pre-shipment inspection (PSI)?
Pre-shipment inspection (PSI) is a few countries require goods and documents to be examined before export by an independent agency. In some countries it's optional but can be requested by the customer. Usually, countries where PSI applies have appointed one dedicated agency to perform the pre-shipment inspection. Normally, your freight forwarder or customer will be able to advise on the necessary arrangements.
Import license is some countries may require import licences for certain or all goods. As an exporter it's normally your customer's responsibility to comply with import procedures, but it's a good idea to check they're doing so.
8. What is Foreign and Commonwealth Office (FCO)?
Foreign and Commonwealth Office (FCO) is government department responsible for foreign affairs. With the Department of Trade and Industry, the FCO manages British Trade International to support international trade by UK exporters and boost inward investment by overseas firms in Britain .
9. What is customs commodity code?
Customs commodity code is eight-digit commodity code required for exports outside the EU. It needs to be entered on your customs export declaration. Sometimes known as the “first eight digits of the Customs Tariff number” or “CN (Customs nomenclature) code”, it's also used as the basis for the import declaration in the country of destination. Find more information about Customs community codes in Customs Notice 600 on the Customs and Excise website.
10. What is certificate of manufacture?
Certificate of manufacture is statement (often legalised by a notary) in which a producer of goods certifies that manufacture has been completed and the goods can be bought.
11. What is customs Freight Simplified Procedures (CFSP)?
Customs Freight Simplified Procedures (CFSP) is electronic declaration methods that simplify customs procedures for clearing non-EU imported goods either at a frontier or upon removal from a free zone or customs warehouse. Find more information about CFSP at the Customs and Excise website.
12. What is standard shipping note?
Standard shipping note is document completed by the exporter which tells destination ports and container depots how the goods should be handled. A dangerous goods note must also be sent with hazardous goods.
13. What is open General Import Licence?
Open General Import Licence is available from the Department of Trade and Industry, this allows the import of most goods from outside the EU without licensing formalities. But some goods require a special licence and are listed in a schedule to OGIL.
Duty is you may be required to pay import duty if you are bringing goods into the country. There is no duty on goods that re in free circulation (See Free circulation with the EUL).
For goods that are imported from outside the EU, the rate of duty depends on the product and the country of origin. Duty is based on the cost, insurance and freight value (ad valorem duties) of the goods. Rates of duty can vary suddenly and without warning and can have a significant effect on the value of the goods.
15. What is certificate of insurance?
Certificate of insurance is shows insurance cover has been arranged for goods being exported. It should detail the degree of cover and list the policy number and all other relevant details.
16. What is confirmed letter of credit?
Confirmed letter of credit is letter of credit issued by an overseas bank but also confirmed by a domestic bank (in your country). Under these circumstances you'll be paid by the domestic bank even if your buyer or other bank defaults, providing the terms of the letter are met fully. (see letter of credit)
Export licence is government document legally required for the export of certain goods such as pharmaceuticals, chemicals and munitions. It's the exporter's responsibility to obtain a licence if necessary.
18. What is single Administrative Document (SAD)?
Single Administrative Document (SAD) is also known as the C88, this document must be completed for all exports, imports and goods crossing the EU. Find more information about the SAD at the Customs and Excise website.
Free circulation is goods are in free circulation in the EU if they originate from an EU country or have already been imported, all customs charges paid, into an EU country.
DDP is delivered duty paid (named place of destination). This is an Incoterm. Find more information about Incoterms at the Incoterm 2000 website. The seller clears the goods for export and pays for delivery to the named destination. The seller meets all the costs and risk of clearing the goods for import, though the buyer may agree to bear some of the costs. The goods are delivered when they arrive, cleared for import but not unloaded, at the named destination.
21. What is British International Freight Association (BIFA)?
British International Freight Association (BIFA) is body representing the UK international freight services industry. BIFA can provide you with a list of freight forwarders and customs clearing agents.
Bill of exchange is written document in which a supplier is guaranteed payment of a specified amount by a drawee by a fixed date. The drawee is generally the customer but is likely to be the customer's bank if the bill of exchange is used with a term letter of credit (see Letter of Credit).
Carnet is Customs document which allows you to carry or send goods temporarily into certain countries for display or demonstration purposes without paying duty or posting a bond.
Consignment is when goods are exported subject to consignment, the exporter only receives payment on completed sales. Any unsold items may be returned to the exporter, usually at their expense. This is a high-risk method of payment for an exporter.
Export invoice is part of the documentation needed if you ship your goods abroad. It should contain a full description of your goods, their price, weight and country of origin.
26. What is forward foreign exchange contract?
Forward foreign exchange contract is exporters can hedge against the risk of adverse exchange rate movements by using a forward foreign exchange contract. You agree to sell the bank a particular foreign currency at a fixed future date for a price that is set now.
27. What is payment in advance?
Payment in advance is an exporter may be able to negotiate these terms for all or port of its shipment. The exporter bears no risks or financing cost. Payment or part-payment in advance is typically used for low-value sales to individuals or new customers.
UNCTAD is United Nations Conference on Trade and Development. Main arm of the United Nations General Assembly dealing with trade, investment and development issues.
Insurance policy is should cover goods for at least their full value (110 per cent is common), and include details of quantity and route. Where necessary, it should also provide for time extensions and transhipments.
Export house is intermediary organisation between an exporter and a buyer.
31. What is correspondent bank?
Correspondent bank is a bank that handles in its own country the business of a foreign bank.
32. What is credit-risk insurance?
Credit-risk insurance is insurance for exporters designed to cover risk of non-payment for delivered goods. (See Export Credits Guarantee Department).
33. What is certificate of origin (C/O)?
Certificate of origin (C/O) is statement on the origin of goods. You may need one if you're exporting to a number of countries. They're available from your chamber of commerce for goods of EU origin.
34. Tell me what is bonded warehouse?
Bonded warehouse is warehouse authorised by Customs for storing goods on which payment of duty is deferred until the goods leave the warehouse.
Tariff is customs duties on imports of goods. They give price advantages or parity to similar locally produced goods and raise revenues for the government that levies them.
