Importing and exporting healthcare and assistive technology - today and post-transition
Host: William Barns-Graham Senior Content Editor Institute of Export & International Trade
Presenter: Kevin Shakespeare Director of Stakeholder Engagement Institute of Export & International Trade
POLL: Do the products you import and export have any tariffs applied?
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Supporting the interests of everyone involved in international trade since 1935 Established in 1935, the Institute of Export & International Trade is the professional membership body representing and supporting the interests of everyone involved in importing, exporting and international trade. Offering a unique range of individual and business membership benefits and a world renowned suite of qualifications and training, the Institute is the leading authority in best practice and competence for businesses trading globally. https://www.export.org.uk/ WWW.EXPORT.ORG.UK
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Content •
International trade classifications for Healthcare, Assistive Technology and PPE
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The COVID 19 Commodity Code list Regulatory, compliance and licensing requirements for imports and exports of Healthcare, Assistive Technology and PPE
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Import and Export trade in 2021 post Transition Period: with the European Union
with the Rest of the World with Northern Ireland •
Trade and freight options for movement of goods
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Ensuring best practice in Customs and Trade procedures
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Treatment of Import Tariffs and VAT
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Applicable terms of trade, including payment terms and Incoterms WWW.EXPORT.ORG.UK
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Commodity Codes
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Classification (commodity / tariff) codes Classification codes are vital to international trade, and the correct code must be used ❑ determine if there are any import duties, tariffs and VAT to be levied ❑ determine licensing and compliance requirements ❑ care should be taken if you are using a code in the ‘Other’ category - seek Binding Tariff Information
Assistive Technology Generally there are zero tariffs on assistive technology products. This is re-enforced by the WHO’s initiative to improve access to assistive devices and technology
COVID 19 Commodity Code List • Please see next slide
Healthcare and Medical Devices • Generally zero in developed countries, but with tariffs in developing countries WWW.EXPORT.ORG.UK
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Covid-19 commodity code list (world, EU & UK level) The World Customs Organisation established a COVID 19 Medical Supplies HS Classification Code List http://www.wcoomd.org//media/wco/public/global/pdf/topics/nomenclature/covid_19/hs-classificationreference_edition-3_en.pdf?la=en
The European Union have added to the list to indicate at a Member state level the products that can benefit from zero import duties and zero VAT https://ec.europa.eu/taxation_customs/sites/taxation/files/03-04-2020-importduties-vat-exemptions-on-importation-covid-19-list-of-goods.pdf The EU has indicated there is flexibility around how member states can act according to their particular needs
The UK has published its own COVID 19 commodity code list, applicable to goods with no import duty and no VAT https://assets.publishing.service.gov.uk/government/uploads/system/uploads/at tachment_data/file/890809/COVID-19_commodity_codes.csv/preview WWW.EXPORT.ORG.UK
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Covid-9 test kits/Instruments & apparatus Protective garments Disinfectants and sterilisation products Oxygen Therapy equipment and pulse oximeters Other medical devices and equipment Other Medical Consumables Vehicles Other (incl. furniture and glassware)
The EU added products such as o Humidifiers o Monitors o Electric Suction Machines to the commodity code list
UK has added several products including Disinfectants/ Sterilisation products , and Medicines to the Duty and VAT ‘free list’ 7
Distinguishing regulatory requirements A business placing PPE on the market must comply with different legislation to someone who wants to place medical devices on the market.
If intended exclusively for protection of the user (the person wearing it) against one or more health and safety hazards, the device is classified as PPE
If a product is designed to protect patients, it is considered a medical device.
Some countries - e.g. China - may require importer to sign a joint declaration with the exporter covering compliance of the product
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CE Marking Medical Devices Regulation REACH (Chemicals)
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Distinguishing regulatory requirements Product
Medical device
PPE
Gloves
Surgical gloves, examination gloves
Protective gloves (e.g., for use in medical laboratories)
Clothing
Surgical clothing (gowns and caps), clothing to protect against radiation for patients
Clothing to protect against radiation for users
Mouth protection
Mouth protection with a medical purpose
Mouthguards for boxers
Masks
Respirators with a medical purpose
Dust masks
Glasses
Corrective glasses (including those with light protection)
Sunglasses, protective goggles (including those with customized lenses), protective goggles for specific professions (e.g., welding goggles)
Laser glasses
Laser safety glasses for patients
Laser safety goggles for users
Bandages
Therapeutic bandages
Sports bandages for prevention
Helmets
Protective helmet for craniectomy, epilepsy helmet
Bicycle helmet, motorcycle helmet, sport helmet
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Trade in 2021 -What will be different
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POLL: How prepared do you feel for changes to trade with the EU at the end of the transition period?
Exports to the European Union (including to Ireland) -become like exports to the Rest of the World
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Post-Brexit planning should start with the trade journey Export Stage Goods available at Exporters premises Goods require to clear Customs at Rotterdam
The Trade Journey from January 2021 – Royston to Essen, Germany Goods loaded onto lorry
Goods unloaded at Rotterdam
Lorry from exporter’s premises to port of dispatch
Vessel sales from Felixstowe to Rotterdam
Goods require to clear Customs at port of dispatch
Goods loaded on board the vessel
Goods leave the UK
Please note this could be ▪ Royston to Dublin ▪ Royston to Paris ▪ Royston to Madrid ▪ and so on
Goods clear customs at Felixstowe
Import Stage Goods clear Customs at Rotterdam WWW.EXPORT.ORG.UK
Goods loaded onto lorry at Rotterdam
Lorry from Rotterdam to Essen, Germany
Goods arrive at Essen
Goods unloaded from lorry at Essen
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Exports to EU –what is different from January 2021 Export Stage Goods available at Exporters premises
Here are some examples – there are more! Goods loaded onto lorry
Lorry from exporter’s premises to port of dispatch
Goods require to clear Customs at port of dispatch
Wooden Packaging must be ISPM 15 compliant
Requirement for Safety and Security exit declaration Export Customs Declaration required
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CE Marking and REACH (Chemicals) requirements on placing goods in EU
Export License required for Dual-Use goods
Carnet required for Temporary Exports
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Imports into the EU –what is different from January 2021 Here are some examples – there are more!
Import Stage Goods clear Customs at Rotterdam
Goods loaded onto lorry at Rotterdam
Possible Import Tariffs (if no UK:EU Trade deal)
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Lorry from Rotterdam to Essen, Germany
Import Customs Declaration required
Goods arrive at Essen
• CE Marking • REACH • Medical Devices Regulation
Goods unloaded from lorry at Essen
Requirement to meet packaging and labelling requirements as a third country
Import VAT payable upon importation, unless …
Entry Safety and Security declaration (into EU)
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Imports from the European Union (including Ireland) -become like imports from the Rest of the World
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Post-Brexit planning should start with the trade journey Export Stage Goods available at Exporters premises
Goods require to clear Customs at Felixstowe
The Trade Journey from January 2021 – Essen, Germany to Royston Goods loaded onto lorry
Goods unloaded at Felixstowe
Lorry from exporter’s premises to port of dispatch
Vessel sales from Rotterdam to Felixstowe
Goods require to clear Customs at port of dispatch
Goods loaded on board the vessel
Goods leave the EU Goods clear customs at Rotterdam
Import Stage Goods clear Customs at Felixstowe WWW.EXPORT.ORG.UK
Goods loaded onto lorry at Felixstowe
Lorry from Felixstowe to Royston (on A14)
Goods arrive at Royston
Goods unloaded from lorry at Royston
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Exports from EU to UK –what is different from January 2021 Export Stage Goods available at Exporters premises
Here are some examples – there are more! Goods loaded onto lorry
Lorry from exporter’s premises to port of dispatch
Export Customs Declaration required
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• CA Marking • Medical Devices • REACH (Chemicals)
Goods require to clear Customs at port of dispatch
Export License required for DualUse goods
Wooden Packaging must be ISPM 15 compliant
Carnet required for Temporary Exports
Requirement for Safety and Security declarations (Exit Summary Declaration)
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Imports into the UK –what is different from January 2021 Import Stage Goods clear Customs at Felixstowe
Here are some examples – there are more! Goods loaded onto lorry at Felixstowe
Possible Import Tariffs (if no UK:EU Trade deal)
Lorry from Felixstowe to Royston
Import Customs Declaration required
Goods arrive at Royston
• CA Marking • Medical Devices • REACH (Chemicals)
Goods unloaded from lorry at Royston
Requirement to meet packaging and labelling requirements of the UK
Import VAT payable upon importation, (if appliable)
Requirement for Safety and Security declarations (Entry Summary Declaration) Possible requirement for Import License
Postponed VAT Accounting will apply in the UK WWW.EXPORT.ORG.UK
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UK Border Operating Model -three stage import control procedures from 1 January 2021 Stage One from 1 January
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Declarations on Standard Goods can be deferred for up to six months from date of import Main benefit of this may be to defer payment if import duty is payable Achieved by a process called EIDR (Entry into Declarants Records) Controlled goods (excise, military) require full declarations Imports of live animals and high risk plants require full certification and pre-notification, with inspection of point of destination
Stage Two from 1 April
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Products of Animal Origin require full certification and pre-notification Inspection for products of animal origin at point of destination
Stage Three from 1 July
Full import controls (see below)
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Full customs declarations be required for all goods
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Relevant tariffs must be paid
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Full Safety and Security declarations required
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SPS products will have an increase in physical checks and samples taken
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Checks for animals, plants and their products will now take place at GB Border Control Posts and not at destination
• If deferral process is used businesses – or their agent - must be approved for CFSP (Customs Freight Simplified Procedures) to make the full customs declaration 20
GB:NI trade
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GB:NI trade GB: NI Trade will have additional requirements Customs Declarations
Customs declarations will be required for goods entering NI (as these goods are entering the territory of the European Union) The scope of declaration requirements is to be fully determined
Safety and Security Declarations
Safety and Security declarations will be required on goods exiting the UK, and goods entering NI
‘At Risk’ Goods
Goods at risk of moving from NI to Republic of Ireland may be subject to tariffs (if tariffs apply)
Inspection (SPS) Checks
SPS checks will be required on goods entering NI from GB -e.g. products of animal origin
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Post and parcels Customs declaration in place for movement of goods by post and parcel between UK and Rest of World WILL apply to movements between GB and EU
Postal consignments imported into GB by the Royal Mail Group require use of CN22/CN23 customs forms
For goods moved into GB by parcel operators a customs declaration will need to be submitted
UNLESS the parcel operator is authorised to submit a bulked customs declaration
The same principles apply to Exports • EU trade becomes the same as Rest of World trade
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Imported goods not exceeding £135 • Import VAT no longer due at border • Businesses selling goods imported into UK must charge and collect any VAT due at time of sale • Are required to register for VAT in UK and account for VAT due on the VAT return • For sales through an online marketplace it is the marketplace that must register for UK VAT and account for VAT due on the return. UK VAT registered businesses importing goods that have not been charged VAT at time of purchase will require to account for VAT on their VAT return under the reverse charge method.
Low value consignment relief will be withdrawn and VAT will be charged on the goods as if they were supplied in UK. WWW.EXPORT.ORG.UK
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The importance of Incoterms and liability for customs declarations
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Responsibility for customs declaration and paperwork Responsibility depends on the Incoterms (International Commercial Terms) agreed There are 11 sets of Incoterms determining responsibilities for transportation, customs declaration, paperwork, licenses and in some cases insurance of goods in transit.
• ExWorks places the onus on the overseas buyer • they are responsible for both Customs declarations and the Customs paperwork • DDP (Delivered Duty Paid) places the onus on the UK exporter • with responsibility for both Customs declarations, paperwork, and any import tariffs There are also further considerations in terms of; Selecting correct Commodity Code
Declaring correct valuation of goods
Declarant of Record
VAT
Maintaining Proof of Export / Import
Licenses
Requirement for separate Safety and Security declarations (by haulier?) 26
Incoterms® determine obligations for exporter & importer Examples of Incoterms® used for GB to EU trade EXW (EX Works) Maximum responsibility for European buyer
FCA (Free Carrier) UK exporter responsible for loading of goods and is declarant of record in UK
DDP (Delivered Duty Paid) Maximum responsibility for UK exporter with EU EORI and EU VAT number* Declarant of Record**
DAP (Delivered at Place) European buyer responsible as declarant of record in EU and for any import duties and VAT
UK exporters to maintain full ‘proof of export’ files with C88 (Single Administrative Document), Transport Document and Commercial Documents *In some sectors UK exporters may feel they have to take responsibility
**The declarant is the person “responsible” for the import They must ensure the goods are; -legitimate, -correctly valued, and declared upon import With responsibility for; • any import duty, and VAT • the accuracy of information in the declaration • the authenticity of documents • compliance with all obligations (e.g. licenses)
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Making a customs declaration: your choices Use a customs intermediary (forwarder, agent, broker)
Trader is liable for all information on a declaration
Must use the correct commodity code
Make your own declarations (software, badges required)
Trade documentation must be correct and match information in declaration
Maintain full proof of export / import file, including declarations, transport documents with all trade documentation
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Can customs special procedures help Yes – customs special procedures provide economic benefit to traders (exporters & importers) Customs Warehousing Goods not in free circulation can be stored without payment of customs duty, and where appropriate excise duty or import VAT, in a customs warehouse Inward Processing Payment of customs duties and import VAT is suspended on imported goods whilst processing is taking place. Returned goods and repairs Outward Processing Allows for temporary export of goods for processing or repair, and to re-import the processed products whilst retaining domestic status or with partial relief from import duties Temporary Admission
Authorised Use
Businesses authorised to import goods with total or partial relief from customs duties because of the specific use to which the goods will be put Reduced or zero rates of Customs duty on certain imported goods, provided they are put to a prescribed end use
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Can customs special procedures help New rules are being introduced which will allow most traders to use duty deferment without a Customs Comprehensive Guarantee (CCG).
Page 92 of Document: Businesses intending to use special procedures regularly need to be authorised by HMRC.
Consider Transit Most efficient way to end movements at traders’ premises is to become registered as an authorised consignee, enabling customs processes to take place away from border (requiring approved temporary storage facility). Your forwarder may assist. EU;GB:ROI GB: France: Rest of EU
Consider CFSP on a Permanent Basis A Customs Comprehensive Guarantee will not be needed to be authorised to use a special procedure unless specifically required.
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Customs Freight Simplified Procedures Cash flow benefits
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Rest of world trade Post transition trading will be influenced by UK trade agreements, and exporters must consider their export plans and how they can best prepare for growth in exporting • qualified employees • trade facilitation opportunities • UK Government support (e.g. UK Export Finance)
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UK trade continuity agreements are key to market access https://www.gov.uk/guidance/uk-trade-agreements-with-non-eu-countries
Trade agreements that have been signed Agreements with the following countries and trading blocs are expected to take effect when existing EU trade agreements no longer apply to the UK, from 1 January 2021.
Check content of trade continuity agreement e.g. Switzerland to determine if ‘full rollover’ https://www.gov.uk/guidance/summ ary-of-the-uk-switzerland-tradeagreement WWW.EXPORT.ORG.UK
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UK trade continuity agreements are key to market access Businesses must consider the impacts of trade agreements with third countries, current and future -for example trade discussions with United States, Australia and New Zealand
EU, Turkey and Japan
Trade agreements still in discussion The following agreements are still under discussion with countries where there are existing EU trade agreements in place. If an agreement is not reached by 31 December 2020, trade with other WTO members will take place on WTO terms.
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Rules of origin Origin is the ‘economic’ nationality of goods traded. Businesses must check if they can meet the Origin requirements for their products. •
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In the event of a trade deal between the EU and UK preferential origin must be met Equally UK exporters must meet Origin requirements for UK trade deals with other countries globally
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• Used for the application of measures such as anti-dumping and countervailing duties, trade embargoes, safeguard measures, origin marking requirements, quotas and trade statistics
• Applies to goods from particular countries where they fulfil the rules of origin for the relevant preferential arrangement to benefit from reduced or zero customs duty
Non-preferential origin
Preferential origin
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Sunshine Rule and Bribery Act The 2010 Physician Payments Sunshine Act created a new standard of transparency for financial relationships between pharmaceutical companies and health care professionals in the U.S. • Countries across Europe and the Rest of the World have implemented or are considering their own Sunshine Rules. The US Act requires that manufacturers publicly report gifts, payments, or other transfers of value to physicians from pharmaceutical and medical device manufacturers worth more than $10
Anti-Bribery and Corruption UK Bribery Act 2010 Facilitation payments! Dealing with agents! Government officials! Disclosure of gifts WWW.EXPORT.ORG.UK
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Capacity building and grant scheme
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Capacity building and accessing customs grants • Many businesses have already accessed the Grant scheme, including business involved in medical devices • There is now an additional £50 million available: • all businesses including importers, exporters, distributors should use the scheme • includes businesses in the medical devices sector
• Issues around customs declarations, procedures, trade documentation and tariff classification impact all businesses • Accessing the grant scheme will assist your company’s post transition business planning
https://www.export.org.uk/page/CustomsGrants
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POLL: How many of you currently use customs authorisations and special procedures or will consider using them post-transition?
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