FOR DHL INTERNAL USE ONLY
DHL EXPRESS | 2-22-EXIT PROGRAM
UPCOMING EU CUSTOMS REGULATORY CHANGES
DHL INTERNAL FREQUENTLY ASKED QUESTIONS (FAQs) Last Update: May 4th 2021
DHL EXPRESS | INTERNAL FREQUENTLY ASKED QUESTIONS (FAQs) – UPCOMING EU REGULATORY CHANGES - FOR DHL INTERNAL USE ONLY Page 1
Purpose The purpose of this document is to ensure that DHL Express employees have a clear understanding regarding the: a) Internal Organizational Setup, i.e. ‘who’ does ‘what’, ‘where’ to find support material, etc. b) Upcoming 2021 European Customs Regulatory Changes, i.e. Brexit, ICS2, VAT De Minimis Removal c) DHL Electronic Shipping Solutions (ESS) capabilities regarding Commercial Invoice electronic data and Waybill This is a ‘living’ document which will be updated over time based on the most frequently asked questions from our DHL Express Employees.
Instructions ▪ Please select Ctrl + F in order to search for a specific question/topic, or click on the section under the index (page below). ▪ IMPORTANT: this document is for DHL INTERNAL use only, and shall be used as a source of information for DHL Employees only – therefore, please do NOT send this entire document externally/to customers. ▪ External sharing should leverage the CUSTOMER FAQs or when absolutely required, only share an extract of the information related to a specific question/answer – NEVER share this entire Internal FAQ document with customers. ▪ In such occasions (when sharing one specific answer with customers), please also include the disclaimer indicated on the grey box below.
Disclaimer ▪ This document has been developed based on information provided by the various DHL functions and also based on publicly available info from the UK Government and European Union Commission websites. ▪ DHL is not a Tax/Legal Consulting firm, and does NOT provide legal advice to customers. ▪ Customers should always perform their own research & consult with their own Tax Advisor/Legal Counsel for advisory with regards to regulatory changes. ▪ Please find below an important disclaimer that must ALWAYS be used when interacting with customers with regards to upcoming regulatory changes: Disclaimer While we have made every attempt to ensure that the information contained herein has been obtained, produced and processed from sources believed to be reliable, no warranty, express or implied, is made regarding the accuracy, adequacy, completeness, legality, reliability or usefulness of such information. All information contained herein is provided on an "as is" basis. In no event will DHL Express, its related partnerships or corporations under the Deutsche Post DHL Group, or the partners, agents or employees thereof be liable to you or anyone else for any decision made or action taken in reliance on the information contained herein or for any consequential, special or similar damages, even if advised of the possibility of such damages.
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DHL EXPRESS | INTERNAL FREQUENTLY ASKED QUESTIONS (FAQs) – UPCOMING EU REGULATORY CHANGES - FOR DHL INTERNAL USE ONLY Page 3
Contents Purpose..................................................................................................................................................2 Instructions..........................................................................................................................................2 Disclaimer.............................................................................................................................................2 1. INTERNAL ORGANIZATIONAL SETUP..............................................................................4 2. UPCOMING EU REGULATORY CHANGES........................................................................8 2.1
BREXIT.........................................................................................................................................8
2.2
ICS2.............................................................................................................................................19
2.3
VAT De Minimis Removal................................................................................................33
3. DHL ELECTRONIC SHIPPING SOLUTIONS (ESS)......................................................44 4. APPENDIX....................................................................................................................................55 Document’s Version History.....................................................................................................60
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1.INTERNAL ORGANIZATIONAL SETUP 1.1 WHY is DHL Express working towards Customs Clearance digitalization? Please see below a quote from our DHL Express CEO that summarizes it:
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1.2 What support will be required from the various DHL Express Functions? Who does what? It is essential that the various DHL Express teams work ‘AS ONE’ in order to ensure readiness for the upcoming 2021 EU Regulatory Changes, including customer electronic data. Therefore, we count on the support of each function to accomplish this task. WHO
COG
Commerc ial
ESS / Custome r Facing IT
Service Quality Customs
WHAT ▪ 2-22-EXIT Work stream central lead (GCOG) - Central materials, forums, functional communication ▪ 2-22-EXIT Customer tracker updates where COG is dedicated PM program owner ▪ SME as face of NetOPS related to 2-22-EXIT topics ▪ Support per COG Structure the dedicated Customer programs, CSI, MNC and National Strategic ▪ internal preparation and readiness for attending Customer Engagement calls, meetings to introduce the EU Regulation and CI Data quality improvement topics ▪ Communicate accordingly to Customers as guided by Commercial toolkit ▪ Plan Customer engagement with right stakeholders in their organization- e.g. Logistics, Trade compliance and I.T ▪ Update appropriate Commercial tool (e.g. GCPT)and/or the 2-22-EXIT Customer Trackers ▪ Engage COG & ESS/IT CO/RO/GHO resources as applicable to Customer ▪ Support COG/ESS to ensure the right approach, leverage with Customer ▪ Customer stakeholder escalation as required to ensure 2-22-EXIT technical/data readiness ▪ Refer to Appendix C – Decision Tree for Overview on CFIT engagement ▪ Work with Commercial Team to encourage customers currently not providing any CI line item data to send this electronically, make sure electronic data provided is also of good data quality. ▪ Once Customer engaged by Commercial lead and confirms IT project ESS/CFIT to lead the IT project and update/add Customer Project to the 2-22EXIT Customer Tracker through to completion of project and/or required Commercial escalations ▪ Based on Target customer lists, prepare as SME re existing customer Integration/tool. ▪ Review your Customer ESS/ESI tool and where DHL gets Commercial invoice (CI) LINE item data conduct gap analysis in fields critical for ICS2 & VAT22 ▪ Support all requested Customer engagement meetings (from commercial/COG) ▪ Support COG & Commercial visibility of data files related to Waybill Redlist and improvements ▪ Support as SME (subject matter expert) on Customs materials & resources ▪ Support Customer engagement when requested by COG/Commercial teams – for meeting preparation, additional support materials and or calls/meeting attendance (when needed)
WHEN ▪ Prioritise support required through all “Target” Customer lists ▪ Dedicated COG Customer Programs ▪ All other Commercial Channels per COG processes
▪ ▪ ▪
▪ ▪
Prioritise support required through all “Target” Customer lists All other Commercial Channels per Commercially agreed approach/timelines Note- all SME requests should be via COG/Commercial process. COG will make necessary steps to engage Customs group as required. Prioritise support required through all “Target” Customer lists All other Commercial Channels per Sales/ESS/CFIT processes
Weekly CLICK HERE to access the Weekly Non-Doc Red List Report Engaged by COG when additional support required during Customer engagement, i.e.: ▪ Support when requested (focus on ‘Target’ Customer)
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▪ Lead and/or participate in agreed Internal 2-22-EXIT Forums ▪ Support the end-to-end testing of customers changing their data input to ensure data flows correctly into relevant customs applications
▪ ▪
Support COG Customer Programs Support Commercial Channel (via COG)
1.3Can you please clarify what is meant by Target customers? The global project work stream has defined a priority Target Customer list. This is to help our Commercial and functional teams focus on large volume shippers/accounts, before notification/engagement to ALL customers. ▪ Countries with Customers on Target lists - must prioritize the lists PLUS engage ALL customers for the overarching requirement for good quality electronic Commercial Invoice line and Waybill data; per agreed project timelines. ▪ Countries without Customers on Target list - are to proceed to manage ALL Customer engagement/notification per their commercial planning beginning with inbound EU Customer PLUS all other customers. 1.4 By WHEN should we contact the customers in the target customer list? The target customers should be prioritized and contacted as soon as possible. 1.5 WHERE can I find the DHL Sales Support Material related to these upcoming European Customs Regulatory changes? https://www.certifiedreplenishment.com/course/2-22-exit-3843/ where you can download all support material available (internal & external material). 1.6 WHO should I contact in case my customer has questions about the upcoming European Customs Regulatory changes? In case of customer specific questions about the upcoming European Customs Regulatory, please: a) First review the Customer Presentation & Customer FAQs document to check if you can find the answer there. b) If not answered, then please carefully review this Internal FAQs document to check if you can find the answer here. c) If not answered, then please follow the standard internal rules of engagement of DHL Express, i.e. please liaise with your respective Customer Operations Group (COG) point of contact, who will then liaise with the Customs Team when needed. 1.7 Will you share the presentation of the 2-22-EXIT Project Regional Kick-off Webinar sessions? Yes, the Kick-off Webinar presentation slides & video recording are already available on the DHL internal website below: https://www.certifiedreplenishment.com/course/2-22-exit-3843/ 1.8 Are we going to have the Sales Support Material in local languages, or this will be a country's responsibility? The material will be made available in English, and it will be countries’ responsibility to translate to local language. Once translated, the material will then be uploaded and made available on DHL internal website below: https://www.certifiedreplenishment.com/course/2-22-exit-3843/ 1.9 For customers that are MNC or Global, how do we know which Country or Team is in the lead on communicating with the Customer? DHL EXPRESS | INTERNAL FREQUENTLY ASKED QUESTIONS (FAQs) – UPCOMING EU REGULATORY CHANGES - FOR DHL INTERNAL USE ONLY Page 7
For CSI and MNC customers, please engage with the Global or Regional Customer Manager (GCM / RCM) who will ultimately take the lead in the initial dialogue with the customer. He / She will then be supported by a DHL Express cross functional team who will communicate with all country teams accordingly. 1.10 For the Outbound IMP Customers, the commercial team in my country does not have any customer contact since they do not generate revenue. Will the account owner sales do the communication or our country sales have to contact them? Just like how we communicate GPI/ESS, yes the answer is account owner sales will do the communication but it is also important that country does the communication to ALL customers too. 1.11 Since we're already implementing this for the EU, will we be making this mandatory for the rest of the regions soon since the setup can be replicated across their entire shipping process? Yes. Global CI Mask requirement is applicable to all customers shipping dutiable goods. Whilst the 2021 EU Customs Regulations focus the requirement of good quality electronic data from the Shipper, i.e. complete and accurate Waybill goods description and Commercial invoice data is relevant for all countries. The more accurate & timely the Customer data at/prior to pick up, the less manual intervention; which means more compliant data to the Customs Regulatory authorities, optimized clearance processes and less transit time impact for our Customer. So when engaging your Customer for the EU regulatory change notification and the importance of good quality electronic customs data - the improved data will be supporting the customer’s global shipping profile for Regulatory purposes. 1.12 What if customers do not want to make any changes? Will this ultimately impact their performance? If a customer does not/cannot give good electronic Commercial invoice data, it may lead to impacts such as: Origin process impact to manually intervene and complete data entry. Meaning origin submission of data may not meet current cut offs impacting connections/uplift. Transit time impact - if ICS2 screening incomplete to load shipment to flight AND for the Clearance process - EXP/IMP. Refer to the internal Regional kick off deck for slide on benefit/impacts of good data. There is also a version of Customer benefit/impacts in the Customer facing deck. 1.13 Do we know how our competitors are handling this? Yes, and we will be uploading material about competitors on our DHL internal website below: https://www.certifiedreplenishment.com/course/2-22-exit-3843/ 1.14 What role is expected to be played by origin gateways? I understand that most of the action will be done before shipments reach gateways? In relation to ICS2: a shipment destined to (or transiting) a European Union Member state, Norway or Switzerland is subject to ICS2 screening and approval before loading at Origin. Data will be captured at initial customer entry and filed to EU authority risk analysis engine (i.e. Import Control System). If a request is received back from the Authority (requesting information, screening or instructing Do Not Load) an intercept will be raised to prevent loading before the request is resolved. Origin Country/Gateway will be responsible to follow the instruction – DO NOT LOAD, hold and secure shipment (all pieces) at origin, until the request is resolved. 1.15
Is there any change expected for the courier at point of pick up? DHL EXPRESS | INTERNAL FREQUENTLY ASKED QUESTIONS (FAQs) – UPCOMING EU REGULATORY CHANGES - FOR DHL INTERNAL USE ONLY Page 8
Today, per Global SOP for Shipment acceptance, the courier is expected to ensure that the Waybill and Commercial Invoice (where available to courier, e.g. excludes PLT shipment) are complete and accurate. There is no expectation that a courier will be able to determine that a Shipper is using electronic Commercial invoice data to DHL; therefore, there is no change from this Global SOP for the Courier process at shipment acceptance.
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2.UPCOMING EU REGULATORY CHANGES 2.1 BREXIT GENERAL 2.1.1
What are the main changes from 1st January 2021 to Customs?
The EU-UK Trade and Cooperation Agreement (TCA) was reached on 24th December 2020.The Agreement provisionally applies from 1st of January 2021, most probably until the end of Feb 2021 (to allow time for the formal legislative steps to be completed). Once completed, the Agreement will enter into force in full. As of 1st January 2021, the UK is no longer be part of the EU Customs Union and the Single Market. Therefore, all customs controls and formalities is required for goods moving between GB and EU. Simply put, customs declarations will still be required despite the TCA. The TCA does bring some certainty on many of the new trading rules. There is a tariff-free, quota-free access for products traded between the EU and GB under the TCA if the goods originate from the EU or UK. However, this is accompanied by a number of new customs procedures and formalities, including new ‘rules of origin’ requirements, which are needed in order to qualify for the tarifffree, quota-free treatment. The movement of goods (being in free circulation) between Northern Ireland and the EU is not governed by the Agreement, and is treated as an intra-EU movement. Therefore, no customs formalities are applied. CLEARANCE PROCESS (IMPORT, EXPORT AND TRANSIT) 2.1.2 Does the Agreement mean that no customs formalities are required for goods entering the EU from GB? No, this is incorrect. From 1st January 2021 goods in trade between GB and EU are subject to customs formalities, including entry safety and security declarations, filing of import and export customs declarations and provision of all relevant supporting documents (e.g. authorizations, certificates, etc.). This means import, export and transit declarations are to be lodged for goods moving between GB and the EU. The Agreement does not change these requirements. VETERINARY AND PHYTOSANITARY GOODS 2.1.3
What does the deal mean for handling of Veterinary and Phytosanitary goods - are there any simplifications from GB into EU? Shipments from GB to EU must be treated from a Veterinary and Phytosanitary point of view in the same way as any other 3 rd country of the world, meaning the necessary authorizations & certificates must be provided, controls at first point of entry apply, etc. Therefore, for GB to EU shipments: • For Veterinary and Phytosanitary shipments that require special Veterinary and Phytosanitary control formalities (such as authorisation & import/export licence requirements) under the Veterinary and Phytosanitary regulations, customers must provide the proper paperwork and authorisations. This paperwork must be provided to DHL DHL EXPRESS | INTERNAL FREQUENTLY ASKED QUESTIONS (FAQs) – UPCOMING EU REGULATORY CHANGES - FOR DHL INTERNAL USE ONLY Page 10
Express together with the shipments, so it can be handed over to Regulatory Authorities at their request in the European Union (EU). • For Veterinary and Phytosanitary shipments (from GB to EU) that do NOT require special Veterinary and Phytosanitary control formalities: the customer is required to provide DHL Express with a confirmation of our Veterinary and Phytosanitary Control - Customer Statement Form. This form needs to be attached to each Veterinary and Phytosanitary shipments which do not require special Veterinary and Phytosanitary control formalities. IMPORTANT: due to BREXIT, shipments from GB to the European Union (EU) since January 1 st are subject to the same import rules & restrictions just like any other 3rd party/origin country in the world shipping to the EU. This also applies to Veterinary and Phytosanitary goods restrictions, therefore please ensure to follow the EU import regulations, and also consider the DHL Express country-specific limitations indicated on the DHL Interactive Service Directory. PREFERENTIAL TREATMENT AND ZERO TARIFF 2.1.4 What does “zero tariff” mean in the Agreement? Only products imported from GB, and having the relevant proof of origin attached, can have a customs duty rate of 0% applied (and vice versa from EU to GB). Despite a 0% customs duty rate, import VAT will be levied based on the country specific VAT rate regardless of whether a proof of origin is supplied. This means that import customs declarations are to be done in every case, the billing/collection processes apply, VAT is to be paid for imports to the EU (either by DHL or via the customer’s deferment account) and disbursement charges apply as per our standard terms and conditions. 2.1.5 Do goods from the EU/UK receive preferential treatment in the respective other country? The TCA means that in most cases Customs duties will not be applied, as a zero tariff has been confirmed for goods sent between the EU-UK (or vice-versa), however, this is conditional on Rules of Origin Requirements being confirmed when shipping. Note that import VAT will still be levied for imports into the EU. For goods where it can be proved that the customs origin is EU/UK, preferential treatment can be claimed in the respective destination country subject to it being correctly applied for in the customs declaration. Please consider, that goods delivered once from EU to UK and shipped back in unaltered condition from UK to EU cannot benefit from the preferential treatment. In this case the return goods relief applies. 2.1.6
Does the Agreement automatically mean that all EU/UK goods benefit from the 0% customs duty rate (“zero tariff”)? No, only goods with the relevant proof of origin indicating the country of origin EU or UK may benefit from the 0% customs duty rate of the Agreement. In order to benefit from the 0% duty rate of the Agreement, the “Statement on Origin” should show as country of origin either UK or EU. 2.1.7 When does a product originate from the EU or UK? To qualify there are general origin rules and then product specific origin rules based on a product’s tariff classification in the TCA. These rules are broadly comparable with other EU and UK Free Trade Agreements (FTAs). Whilst varied across the tariff, for most classifications there are two main qualification criteria for meeting the product specific origin rules: a) difference in the tariff classification of the finished product and its non-originating materials at the heading or sub-heading level (first 4 or 6 digit tariff code change); b) or a maximum percentage value of non-originating materials in the finished product, most commonly 50%. Accurate tariff classification will be critical for businesses, whether to determine the product specific rule of origin or in assessing qualification with that rule of origin. DHL EXPRESS | INTERNAL FREQUENTLY ASKED QUESTIONS (FAQs) – UPCOMING EU REGULATORY CHANGES - FOR DHL INTERNAL USE ONLY Page 11
2.1.8 How can the country of origin be proven under the Agreement? The country of origin can be proven via a “Statement on Origin” (confirming that the product is originating from UK or EU), completed by the exporter. It is the exporter’s responsibility to ensure the completeness /accuracy of the statement of origin. 2.1.9 How can preferential treatment be applied for? Origin related information must be entered in the customs declaration in order to obtain preferential treatment. No customs duties are levied if the proof of origin (“Statement on Origin”) is available and valid and information is properly entered into the import customs declaration. Import VAT is unaffected and will be assessed and levied according to local laws. 2.1.10 Who must apply for the preference? DHL has to apply for the 0% customs duty rate in the course of the import customs declaration in case the country of origin UK/EU is proven. To do so, DHL must receive the required information (“Statement on Origin”) on the Commercial/Proforma Invoice from the customer. DHL will automatically apply for preferential treatment at import if the “Statement on Origin” is available and valid on the Commercial/Proforma Invoice received from the customer. The shipper is responsible for the completeness and accuracy of the information regarding the origin of the goods. Details on the “Statement on Origin”: • Can be made out in all/any of the official languages of the EU plus English; • Exporter should indicate the statement on the Commercial or Proforma Invoice that describes the originating product in sufficient detail to enable the identification of that product; • DHL requires the statement on a shipment-by-shipment basis; • Important- The wording of the statement must be exactly as indicated below and with all the information mentioned. Place and date may be omitted if the information is contained in the document itself. Wording of the “Statement on Origin” on the Commercial/Proforma Invoice: The exporter of the products covered by this document (Exporter Reference No ... (GB EORI or REX) declares that, except where otherwise clearly indicated, these products are of ... preferential origin. (Place and date): ………………………………. (Name of the exporter): …………………… 2.1.11 What is the Exporter Reference Number in the “Statement on Origin” and when must the number be indicated by the exporter? • For shipments from GB to EU the Exporter Reference Number is the GB EORI number of the exporter and must be provided in the statement regardless of the value of the shipment. • For shipments from EU to GB the Exporter Reference Number (the REX number of the exporter) is only required if the value of the shipment exceeds 6,000 EUR (or 5,700 GBP). Below this threshold the statement may be accepted without the Exporter Reference Number. 2.1.12 Does exemption from the proof of origin exist? Exemptions exist for goods in small consignments only for C2C shipments, meaning so long as they are declared to the customs authorities as meeting the origin rules, some goods may be imported without the need for a formal proof of origin (without “Statement on Origin”). DHL EXPRESS | INTERNAL FREQUENTLY ASKED QUESTIONS (FAQs) – UPCOMING EU REGULATORY CHANGES - FOR DHL INTERNAL USE ONLY Page 12
For import into the EU, this waiver applies to goods valued under €500 in the case of products sent in small packages from private persons to private persons. The waiver does not apply if it is established that the import forms a series of importations that are being made separately to avoid the normal requirements. 2.1.13 Should shippers also include a Proof of Origin statement on the Commercial/Proforma Invoice of Low Value Shipments (i.e. shipments below 150 EUR imported in the EU or below 135 GBP imported in GB) to qualify 0% customs duty rate (“zero tariff”)? No. Shipments below 150 EUR imported in the EU (or below 135 GBP imported in GB) are relieved from import duty - independently from the country of origin, no customs duties apply (0% customs duties). Therefore, there is no need to include a Proof of Origin statement on the Commercial/Proforma Invoice for Low Value Shipments (i.e. shipments below 150 EUR imported in the EU or 135 GBP imported in GB). However, please note that VAT will be applicable – please find below an overview of the thresholds for Great Britain (Post-BREXIT) and for EU: GREAT BRITAIN (Post-BREXIT) Customs Goods Value Duties Up to £15 Between £15 and £135 Above £135
Exempt Exempt Levied
Upon Import
EUROPEAN UNION VAT Applied
Upon Sale
Applied
Upon Sale
Levied
Upon Import
Customs Duties
VAT**
Up to €22*
Exempt
Exempt
Between €22* and €150
Exempt
Goods Value
Above €150
Levied
Upon Import
Levied
Upon Import
Levied
Upon Import
* EUR 22 De Minimis: Please note that in certain EU Member States (e.g. BG), the De Minimis value is of €10 (instead of €22); other EU Member States (i.e. PL, FR, SE) have already decided to curb the use of this exemption to certain (mail) orders or in whole. ** EU VAT Rules: please note that the European Union VAT rules will change as of July 1 st 2021 where shipments below EUR22 will no longer be VAT exempted, following a similar model as the UK VAT (post-BREXIT).
2.1.14 Consider the scenario: a shipment with parts for a motor vehicle (HS code 8708709115) manufactured in China, and then shipped to Germany for a distributor who then ships from Germany to London (GB). Will this shipment (from Germany to GB) be eligible to qualify for 0% customs duty rate (under the EU-UK Trade & Cooperation Agreement)? No, given that the car parts mentioned in the example were manufactured in China, the product does not qualify for zero tariff (0% customs duty rate) under the EU-UK Trade & Cooperation Agreement. The agreement’s scope is focused on goods originating in the European Union and United Kingdom (fulfilling the Origin Rules of the agreement), therefore goods originated in other countries do not qualify for 0% customs duty rate under the EU-UK Trade & Cooperation Agreement (exceptions are the cases of Low Value Shipments as indicated on questions above, where the country of origin does not play a role). For additional information of the conditions that define if a product qualifies for the EU-UK Trade & Cooperation Agreement, please see question above (“When does a product originate from the EU or UK?”). Please note, that some products imported into EU or GB have “standard” 0% customs duty rate, independent from the country of origin. In those cases, a statement of origin is not needed, since the payable import custom duty will be zero (0) EUR/GBP, but VAT applies as per thresholds indicated. DHL EXPRESS | INTERNAL FREQUENTLY ASKED QUESTIONS (FAQs) – UPCOMING EU REGULATORY CHANGES - FOR DHL INTERNAL USE ONLY Page 13
2.1.15 If the EU has a trade deal with another country, but the goods enter the EU via the UK, can they still benefit from the EU-UK TCA? No. These goods cannot benefit from the EU-UK TCA, but with some conditions they may benefit from the initial FTA. For example, consider a scenario, in which goods are sent from Japan to the EU, but via the UK. If the goods are released into free circulation in the UK, and then subsequently sent to the EU then they cannot benefit from the EU-UK TCA. This is because the goods do not originate in the UK, and the EU-UK TCA only applies to goods which originate in the EU or the UK. If the goods were not cleared in the UK (i.e. were still under customs supervision) and subsequently shipped to the EU, then the goods still cannot benefit from the EU-UK TCA, but would qualify for the EU-JP EPA (provided other criteria of the EU-JP EPA are met). This is because once again the goods did not originate in EU or UK, but were also not released into free circulation in the UK, and therefore still meet the requirements of the EU-JP EPA. 2.1.16 Does the EU-UK Trade & Cooperation Agreement (TCA) customs import duty exemption apply for returned goods from GB to EU (or vice versa)? No, the EU-UK TCA does not grant an import Customs Duty Relief (“zero tariff”) for returned goods. Import Customs Duty relief for returned goods is only possible by applying the Returned Goods Relief (RGR) procedure. For example, consider the scenarios below: ▪ EU origin goods are shipped from an EU country to GB and cleared there for import – for this flow, goods are eligible for “zero tariff” (under the EU-UK TCA) if the “Statement of Origin” is issued properly. However, if these goods are returned back to an EU country, these are no longer eligible for “zero tariff” (under the EU-UK TCA), and the only possibility is to avoid import customs duty payment is to apply the Returned Goods Relief (RGR) procedure (in countries where offered by DHL). ▪ GB origin goods, are shipped from GB to an EU country and cleared there for import – f for this flow, goods are eligible for “zero tariff” (under the EU-UK TCA) if the “Statement of Origin” is issued properly. However, if these goods are returned back to an EU country, these are no longer eligible for “zero tariff” (under the EU-UK TCA), and the only possibility is to avoid import customs duty payment is to apply the Returned Goods Relief (RGR) procedure. Note: DHL Express does not offer Returned Goods Relief (RGR) as a standard service. If requested by a customer, this requires a solution-design assessment with the countries in scope to review the capabilities (lead by the DHL Customer Operations Group/COG). POST CLEARANCE MODIFICATION 2.1.17 Is it possible to apply for 0% customs duty rate after customs clearance is completed and get a refund of the duties paid? The claim can be made at either the time of importation, or technically also after the date of importation (as outlined in either UK or EU law). The customer has to provide the basis for the claim (i.e. “Statement on Origin”), and the product has to satisfy all other requirements necessary to claim preferential treatment. DHL has to get an authorization of the importer/receiver of the shipment to file the refund application with Customs Authorities. This process is also known as Post Clearance Modification. 2.1.18 Can DHL Express perform the Post Clearance Modification (PCM)? Yes. DHL Express offers a Post Clearance Modification (PCM) service that applies in case of subsequent adjustment/modification of an existing customs declaration along with the application to refund assessed duties upon Customer’s request. 2.1.19 What is the price of the Post Clearance Modification (PCM) service? DHL EXPRESS | INTERNAL FREQUENTLY ASKED QUESTIONS (FAQs) – UPCOMING EU REGULATORY CHANGES - FOR DHL INTERNAL USE ONLY Page 14
The Post-Clearance Modification (PCM) service price is of EUR 50 per Post-Clearance Discounts/Exemptions follow the standard DHL Express Commercial approval process.
modification
done
by
DHL.
2.1.20 Is there any limitation / time period until when customers can request a Post Clearance Modification (PCM) service? Requests for Post Clearance Modification (PCM) service for EU-UK and UK-EU shipments must be made within 3-months of the shipment date. DHL is imposing this timeline to reflect the expected high numbers of requests following Brexit and the high administrative burden of supporting such requests in relation to historical shipments. To provide the Post Clearance Modification (PCM) service, the original customs declaration must be referenced and the representative must be authorized to make the refund application at the competent customs authority (which, in the case of shipments to private individuals, requires an authorization in relation to the individual shipment). If an authorization can no longer be obtained from the declarant/importer by DHL and/or other operational or legal reasons prevent a refund request, DHL is not obliged to provide the Post Clearance Modification (PCM) service. In those cases, the customer can either submit a Post Clearance Modification request to Authorities directly, or via an authorized representative. 2.1.21 Who can apply for duty refund and is an application after the 3 months still possible? A post clearance modification application can be submitted by or on behalf of the importer by an authorized representative. The application for refund of wrongly assessed duties upon initial clearance due to the exporter statement was not on the invoice at the time, can be submitted within 3 years of the clearance date. The importer/receiver can thus send the application directly to Authorities, either on his/her own, or sub-contract an authorized representative. The application does not have to be submitted via a customs system interface, but can be provided directly to the competent customs authority in letter format including the updated documents. 2.1.22 Will the Post Clearance Modification (PCM) service fee also be charged in case of post-clearance modifications done due to DHL Express’ operational mistakes during the declaration process? No. The Post Clearance Modification (PCM) service is ONLY triggered only upon Customer’s request, including the provision of updated documents by the customer (i.e. updated Commercial Invoice to indicate the Proof of Origin statement for shipments that qualify for trade agreement). In case of a DHL operational error to be corrected (e.g. DHL employee overlooked the statement and did not declare correctly on the declaration), the service charge must not to be triggered. OTHER BREXIT-RELATED QUESTIONS 2.1.23 Are there any facilitations for goods entering GB from the EU? ▪ The UK has announced that as of January 1st 2021 they will provide temporary customs and safety/security facilitations for goods entering GB from the EU. ▪ These facilitations will last until July 1st 2021 and will be phased - for more information on the facilitations please use the following link. ▪ Facilitations include (but not limited to): o Customs declarations are required but traders have 6 months to complete these declarations. o Tariffs are due, but duty payment can also be deferred until the declaration has been made. o The requirement for safety and security declarations will be waived. ▪ Goods entering Northern Ireland (NI) from the EU will not be covered by the provisions above. ▪ Specific rules for EU/GB trade with Northern Ireland (NI) is outlined in the Northern Ireland protocol. DHL EXPRESS | INTERNAL FREQUENTLY ASKED QUESTIONS (FAQs) – UPCOMING EU REGULATORY CHANGES - FOR DHL INTERNAL USE ONLY Page 15
2.1.24 What is the Northern Ireland (NI) Protocol? What does the Protocol say? ▪ Protocol is designed to be a “fully legally operative solution.” It will come into force from January 1st 2021. ▪ NI remains in the UK’s customs territory, but aligns with EU Single Market rules. ▪ NI will remain in the UK VAT area, but in alignment with EU VAT rules (including access to EU’s tax IT system). What does it mean? ▪ No customs procedures, regulatory checks or tariffs on NI-Republic of Ireland (RoI) trade ▪ Goods moving from GB to NI will be tariff free, unless they are “at risk” of entering the EU. Goods moving from RoI to NI “at risk” of entering GB will face tariffs. ▪ The extent of customs procedures and regulatory checks for goods moving between GB and NI are being discussed between UK and EU. ▪ NI businesses to comply with EU VAT and customs rules (including the need for VAT and EORI registration numbers). 2.1.25How should importers/exporters ensure a smooth trade? ▪ If you are already trading outside the EU: o If you’re currently trading outside the EU, you’ll be familiar with customs requirements. o However, the information in this section could still be useful in helping you prepare. o Thus please review the content on Customs Data Integration, availability of Commercial/Proforma Invoice, Paperless Trade and EORI numbers. ▪ If you are only trading within the EU: o If you currently only ship within the EU, now is the time to get familiarised with customs procedures. o The following CHECKLIST (see below) is designed to highlight areas where you can make customs clearance a smoother process post-Brexit. o We suggest reaching out to your local Chambers of Commerce for advice on any specific paperwork required for your products – they can produce Certificates of Origin (COO), ATA Carnets, etc. o DHL Express will submit customs data & paperwork directly to Customs Authorities on your behalf. o Therefore, we need to receive high quality Commercial Invoice line item data to transport & clear your shipments. o Additionally, providing the relevant documents via our Paperless Trade option will help ensuring a swift customs processing.
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In addition, please see the following Questions & Answers extracted from the UK Government website which helps customers with regards of how to: IMPORT goods from outside the EU into the UK EXPORT goods from the UK to countries outside the EU How can UK importers prepare to IMPORT goods from the EU to Great Britain from 1 January 2021 How can UK exporters prepare to EXPORT goods from Great Britain to the EU from 1 January 2021 2.1.26 What are the key steps to IMPORT goods from outside the EU into the UK? Please see below the basic steps of how to bring goods into the UK from outside the EU, including how much tax and duty you’ll need to pay and whether you need to get a license or certificate. Click here: https://www.gov.uk/import-goods-outside-eu 2.1.27 What are the key steps to EXPORT goods from the UK to countries outside the EU? Please see below the basic steps of how to move goods from the UK to countries outside the EU, including any special rules you’ll need to follow for your goods in the UK and the destination country. Click here: https://www.gov.uk/export-goods-outside-eu 2.1.28Does BREXIT impact return shipments back to EU (from UK) or vice-versa? Yes. Shipments returning to the EU from GB will require full customs formalities as per any other 3rd country. Whilst the goods will still be eligible from duty relief (when applied for via the relevant code 4010, and fulfilling the necessary criteria to be deemed a ‘returned’ good), formal customs and security declarations will be required. Please note that this is in the scenario returns from GB back to the EU. As outlined in the Withdrawal Agreement, the Northern Ireland Protocol demonstrates that goods travelling between the EU and NI will be treated as intra-EU movements and therefore no impact should be felt. 2.1.29What about shipments from AP transiting EU to GB & GB EU?
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- EU to GB: From an EU customs perspective, they will be only transiting the EU and therefore will only require ICS2 filings and the necessary compliance with transit rules. From a UK perspective, the goods will require the necessary import declarations and UK security filings (once introduced). - GB to EU: From GB customs perspective, they will only be transiting GB and therefore will only require GB security filings (once introduced) and the necessary compliance with transit rules. From an EU perspective, the goods will follow the standard customs clearance process for goods from 3rd countries (including safety and security filings). 2.1.30Is the BBX product to Europe & UK still available? Is there anything different due to BREXIT? TDI BBX product is still available. However, it cannot be combined for the EU and UK from 1 January 2021. For example, a mother shipment cannot have baby shipments for both EU Member States and the UK – this will require a mother shipment into the UK and a separate mother shipment into the EU. BBX remains a product offering per the current BBX capability and per the approved Inbound EU or GB Hub/GTWs. As of Jan 1st 2021, a Mother Waybill BBX consol can no longer support a combination of EU member states + UK baby shipments. Therefore BBX is offered under the following criteria: ▪ ▪
Mother Waybill BBX Consol with baby shipment/pieces for ONLY EU member states final destination only (remaining 27 EU member states) or Mother Waybill BBX Consol with baby shipment/pieces for GB final destination only
IMPORTANT All request for BBX are to follow the current process - BBX Checklist/pre sales process and engagement via your COG team is required. ▪ Any Customer currently using BBX to EU/UK as a combined Mother shipment, must be reviewed to ensure they are aware & ready to have Mother WB and baby shipments consigned to either EU or GB per the requirement. ▪ ALL new BBX requests must be submitted by your COG to EU RO COG for review. 2.1.31How do you foresee managing potential delivery delays that may be caused by additional customs checks at borders due to BREXIT? DHL closely monitors shipment volumes in the network, the timeliness of checkpoints and compliance with lead times. If there are impacts, our customer will be informed about the potential impact and the measurements taken in order to meet the agreed times and delivery times. In addition, shipment data quality is proactively reviewed with customers to optimize customs clearance from DHL/customer side. 2.1.32Do you have a dedicated team for Brexit? Yes, our DHL Express Brexit Taskforces in UK and Europe have been in place for more than 2 years to ensure the DHL operational readiness, covering multiple work streams, such as: - Network Operations ⎼ Network, hubs and ground operations planning, border issues management - Airline ⎼ Contingency planning for air network - Customs ⎼ Manage & plan customs operations, including recruitment, training and assessment of new customs requirements - HR ⎼ supporting impacted workers, recruiting additional workers - IT ⎼ IT systems analysis, cross-border risk analysis, IT systems testing, data management - Finance ⎼ Data analysis, VAT and Duty, Calculations/collection - Security ⎼ Security awareness and contingency planning DHL EXPRESS | INTERNAL FREQUENTLY ASKED QUESTIONS (FAQs) – UPCOMING EU REGULATORY CHANGES - FOR DHL INTERNAL USE ONLY Page 18
- Commercial ⎼ Customer transition, Customer Operations Group, Customer Service considerations
2.1.33Are staffing, processes and systems in place to handle these BREXIT clearances without delay? From DHL Express perspective, our expert taskforces in the UK and Europe have been assessing every aspect of Brexit for more than 2 years now, considering all implications for trade in goods. As international specialists, we are already in a strong position with our existing customs teams, network capabilities and experience in tackling such challenges. 2.1.34If there are gaps or incomplete contingencies from a Customs processing perspective, what are they and what are the plans to close these before the end of the year? - Across the business, we are making significant and continued investment with the aim of maintaining service post-Brexit, regardless of the future trading arrangements between the UK and the EU. - There are still a number of critical questions about the way goods will move across borders between the UK and the EU, and importantly the different arrangements that will need to be put in place between Great Britain and Northern Ireland. - Notwithstanding the still unknown operational details in the areas of customs, employment, road transport and aviation, our planning continues based on the assumption that the post-Brexit trade scenario will include customs and border formalities between the UK and EU and also between Great Britain and Northern Ireland following the implementation of the Ireland/Northern Ireland Protocol. 2.1.35The UK Government is offering Deferred Declarations in the first 6 months after Brexit. >>Customers<< business units will not be able to keep track of deferred declarations and the required supplementary declarations. Is you firm offering a tracking system for shipments with deferred declarations? - The UK offers a simplification allowing economic operators to customs clear their imports at any time within the first 6 months. Therefore, in theory, goods entering the UK on 2nd January 2021 may be customs import cleared on 30th June 2021. Only then, import duties and taxes are to be paid. - However, DHL does not intend to make use of this simplification, as shipments booked with us, already contain the required information to make a compliant customs declaration. A tracking of “deferred declarations” is therefore not required. - With regards to the advancement of duties and taxes by DHL and applicable billing service agreed upon with the customer, the payment of duties and taxes to DHL practically is deferred according to the payment terms. 2.1.36Does DHL have an authorization for CFSP (Customs Freight Simplified Procedure)? DHL Express UK (legal entity DHL International (UK) Ltd) is authorized to use the Customs Simplified procedures for imports (CFSP) to optimize Customs clearance into the UK for qualifying imports. 2.1.37What is the Return Process for shipment to EU/UK (if shipment get there and being returned by customs authorities)? Is it FOC/any charges? There is no change to RTO in case shipments are returned prior to release into free circulation at destination – see GSOP for Undeliverables: https://mynet.dpdhl.com/cmsmedia/Document%20Library/org_20190923165850935810/Global%20Undeliverables %20Guide_NO_R00051.pdf 2.1.38What are the low value thresholds post Brexit and what will be the clearance process? - From 01 January 2021, the UK will remove their 15GBP De Minimis (Low Value Consignment Relief – LVCR), and introduce bulk manifest clearance for goods up to 135GBP. For goods entering the UK up to 135GBP, VAT will now be applied at the point of sale and not at the border. This will move liability onto the seller, and not DHL. DHL EXPRESS | INTERNAL FREQUENTLY ASKED QUESTIONS (FAQs) – UPCOMING EU REGULATORY CHANGES - FOR DHL INTERNAL USE ONLY Page 19
- For B2C sales, the overseas seller will be required to register with HMRC for VAT purposes. Additionally, for B2B sales up to 135GBP, VAT can be accounted for by the Importer of Record by way of reverse charge, if UK VAT registered. These changes do not apply to excise goods or gifts/samples etc., where existing rules continue to apply. - As a result of these changes, shipments valued between 0-135 GBP will be bulked under a single customs declaration with limited data elements. Whilst this applies to most goods, exemptions include: excise goods, gifts, C2C, and shipments destined for Northern Ireland* (* subject to further confirmation given current uncertainty on the final Customs status of NI). Overseas suppliers making sales of goods below GB 135 into the UK will: • Need to register for UK VAT, regardless of the level of sales • Charge UK VAT to their UK customers • Quote their VAT number on the commercial invoice and AWB data (shipper or consignee TBC) • Periodically make a UK VAT return • Pay any VAT due to HMRC Unless the sale is to a VAT registered UK business, in which case they may: • Obtain the UK VAT registration number of their customer • They will not need to charge VAT, or include these transactions in any UK VAT return • They should quote the VAT registration number on the commercial invoice where possible For more information on these changes please consult the following link: https://www.gov.uk/government/collections/customs-vat-and-excise-uk-transition-legislation-from-1-january-2021? utm_source=ec8b9986-d8c7-4889-910a-4029e105d6d4&utm_medium=email&utm_campaign=govuknotifications&utm_content=immediate 2.1.39What are the Security & Safety Declaration (SSD) requirements for BREXIT? - EU to UK: There is a 6-month waiver to submit safety and security declarations (SSD). Meaning that these will not be required until July 2021. What is due to enter into force after this date, and how it will operate, still needs to be confirmed- but this will not be ICS2. ICS2 is an EU system, and the UK will most probably develop their own system under a different name. However, it is almost certain that there will be some form of Safety and Security Declaration from July 2021. - UK to EU: As GB will be a third country, the Union Customs Code will apply as such. This means that there will be a requirement for safety and security declarations. As mentioned above, if the goods are moved via air express and it takes place after March 2021 then an ICS2 pre-loading declaration will need to be completed in addition to full ENS via ICS1. If moved via air/express prior to March then this will be ENS via ICS1. In addition, as mentioned above, for road it differs slightly as ICS2 is not introduced until 2024. Therefore, between 2021 and 2024, a complete ENS will be required via ICS1 for road movements of goods. ADDITIONAL BREXIT INFO 2.1.40 Where can I find further information about Brexit and the EU-UK Trade and Cooperation Agreement (TCA)? EUROPEAN COMMISSION LINKS:
EU-UK Trade and Cooperation Agreement
https://ec.europa.eu/info/files/eu-uk-trade-and-cooperation-agreement_en
BREXIT Overview, Publications/News, EU-UK Negotiations
https://ec.europa.eu/info/european-union-and-united-kingdom-forging-new-partnership_en DHL EXPRESS | INTERNAL FREQUENTLY ASKED QUESTIONS (FAQs) – UPCOMING EU REGULATORY CHANGES - FOR DHL INTERNAL USE ONLY Page 20
BREXIT Legislative Developments, Links to Member States https://ec.europa.eu/info/brexit/brexit-preparedness_en
UK GOVERNMENT LINKS: −
UK Government Transition Guide
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UK Government Guidance: Check if your goods meet the rules of origin
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How to Import/Export to/from UK, EORI Registration, Duty/VAT, Customs Declaration
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Export Control Guidance
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UK Government Imports and Exports Helpline
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British Chambers of Commerce Brexit Hub
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Changes to VAT treatment of overseas goods sold to customers from 1 Jan 2021
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UK VAT Returns
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Check when you can account for import VAT on your VAT Return
https://www.gov.uk/transition https://www.gov.uk/guidance/check-your-goods-meet-the-rules-of-origin https://www.gov.uk/topic/business-tax/import-export https://www.gov.uk/guidance/exporting-controlled-goods-after-eu-exit http://www.gov.uk/contact-brexit-import-export-helpline https://www.britishchambers.org.uk/page/brexit-hub https://www.gov.uk/government/publications/changes-to-vat-treatment-of-overseas-goods-sold-to-customers-from-1-january-2021 / https://www.gov.uk/vat-returns https://www.gov.uk/guidance/check-when-you-can-account-for-import-vat-on-your-vat-return
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2.2 ICS2 ABOUT THE ICS2 REGULATION 2.2.1 What is ICS? ▪ ICS (Import Control System) is the electronic security declaration management system for goods destined to the EU (both EU final destination and just transiting through the EU, e.g. a shipment from a non EU country, transiting EU, and then moving to another non-EU country). ▪ The ICS EU regulation and system have been in place since 2009, and are intended to elevate the mitigation of security related risks & possible terrorist threats, such as explosives hidden in consignments. ▪ The ICS requirements were further enhanced after the 2010 Yemen incident, where fused explosive devices hidden in printer cartridges were carried by passenger and cargo planes, and intercepted thanks to intelligence received. ▪ In 2016, it was decided that ICS will be replaced by a new system (ICS2), where in addition to other enhancements, Pre loading Advanced Cargo Information (PLACI) filing for all goods have to be provided to the EU customs authorities. ▪ ICS2 aims to further ensure the protection of movements destined to, or in transit through, the European Union, Norway and Switzerland. ▪ ICS2 is the new EU customs advance cargo information system that will facilitate the free flow of trade through improved datadriven customs security processes, adapted to global business models. ▪ It will collect data about all goods entering the EU prior to their arrival. The system will be used by EU customs authorities to ensure security and safety of all people living in the EU. ▪ It is a large scale EU information system supporting the following processes: o lodgement of the Entry Summary Declaration - ENS (advance cargo information) to customs; o security and safety risk analysis by customs; o arrival of means of transport; o presentation of goods to customs, and o control by customs of goods, where required. 2.2.2 What is ICS2 not? ICS2 is not an import system and it is not used for the processing of the customs declarations for release into free circulation. 2.2.3 What are the ICS2 data elements that need to be sent to EU Customs Authorities? ▪ The new regulation (ICS2, Release 1) as of March 2021 requires that a certain number of data elements be sent to the EU customs authorities before leaving the country of export (prior to loading) – referred to as the Last Point of Departure. ▪ The new regulation requires the following data for every consignment to be submitted prior to loading on a flight into or transiting EU Member States, Norway or Switzerland: PLACI (Pre Loading Advance Cargo Information) with 7+1 data elements: Consignor Name | Consignor Address | Consignee Name | Consignee Address | Detailed Line Item Description of Goods | Weight | Pieces + HAWB number ▪
A new EU capability named Shared Trader Interface (STI) is being developed for operators (DHL) to submit electronic data in the form of an ENS (Entry Summary Declaration). DHL EXPRESS | INTERNAL FREQUENTLY ASKED QUESTIONS (FAQs) – UPCOMING EU REGULATORY CHANGES - FOR DHL INTERNAL USE ONLY Page 22
▪ ▪
Upon receipt of the ENS (Entry Summary Declaration) message, the customs authorities perform the security-related risk analysis. Based on the outcome of the ICS Risk Assessment, DHL shall either: continue to Load/Move the Shipment (Assessment Complete), Submit Additional Information (Request for Information), Screen the Shipment (Request for Screening) or Refuse the Shipment Loading/Movement (Do Not Load).
2.2.4 What are the benefits of ICS2? ▪ Strengthen protection of EU citizens and the internal market against security and safety threats. ▪ Allow EU Customs authorities to better identify high-risk consignments and intervene at the most appropriate point in supply chain. ▪ Facilitate cross-border clearance for the largest part of legitimate trade. ▪ Simplify the exchange of information between Economic Operators (EOs) and EU Customs Authorities 2.2.5 How can advanced cargo information help to protect EU citizens against safety and security threats? ▪ Advance cargo information and risk analysis will enable early identification of threats and help customs to intervene at the most appropriate place in supply chain. ▪ For customs purposes, security and safety risks cover a range of issues including explosives in air cargo, narcotics, precursors, dangerous fake medicines, dangerous toys or electronics, contaminated foods, weapons, and all kinds of organized smuggling. ▪ New threats (like postal delivery of lethal synthetic opiates) continue to emerge. Organized groups use entry point shipping and arrange their supply chains to evade detection, innovating on a continuous basis. ▪ At the same time, the volume of consignments supervised by customs is multiplying due to changes of global trade business models generated by e-commerce. New advance data for goods in postal consignments will bring big opportunities, and challenges. 2.2.6 Whom does ICS2 affect? ▪ ICS2 will directly affect all Economic Operators involved in handling, shipping and transporting of cargo, express or postal consignments, such as: o Postal operators within/beyond EU; o Express delivery services; o Air cargo carriers; o Freight forwarding logistics companies; o Ultimate consignees established in EU (for goods received via maritime transport); o Maritime, railway and road carriers; o Representatives of above. ▪ These economic operators will need to provide the safety and security data to ICS2. ▪ ICS2 will indirectly affect all manufacturers, exporters, and individuals from outside the EU, wishing to send goods to or through the EU. ▪ They will have to provide the necessary information to the directly affected stakeholders. 2.2.7 How to get prepared for ICS2? It is essential to ensure the provision of complete & accurate Customs Data electronically, including Goods Descriptions, Shipper & Receiver information. Therefore, it is important to: DHL EXPRESS | INTERNAL FREQUENTLY ASKED QUESTIONS (FAQs) – UPCOMING EU REGULATORY CHANGES - FOR DHL INTERNAL USE ONLY Page 23
▪ ▪ ▪ ▪
Adapt your business processes. Take steps to ensure high quality, precise data is provided. Develop or update your IT systems for exchange of information. Provide training and support to your staff, to ensure complete & accurate data.
2.2.8 What will happen if companies are not ready on time for ICS2? Please find below an extract from the European Commission webpage with regards to ICS2 indicating the consequences of not being ready on time:
2.2.9 How does ICS2 fit into the customs domain? ▪ Entry of the goods into the EU can be described as a 5-step process, consisting of: 1. The lodgement of the Entry summary declaration (ENS); 2. Notification of the arrival of the means of transport; 3. Presentation of goods; 4. Temporary storage of goods and; 5. Placing the goods under a customs procedure. ▪ ICS2 business process scope covers three steps out of five: lodgement of the ENS, notification of the arrival of the means of transport and presentation of goods. 2.2.10What are the business models/transport modes affected by ICS2? ICS2 will support the communication of advance cargo information for safety and security risk analysis on the entry of goods into the EU for the following transport modes and business models: maritime, air, road, rail and inland waterways; general cargo, express and postal business models. 2.2.11Is ICS2 an upgrade of ICS1? No. It will fully replace ICS1 and introduces an entirely new business process in accordance with the Union Customs Code legal requirements and the strategic operational needs expressed in the EU Customs Risk Management Strategy and Action Plan (adopted in 2014). Furthermore, it enables multiple filing of advance cargo information for application of Article 127 (6) of the Union DHL EXPRESS | INTERNAL FREQUENTLY ASKED QUESTIONS (FAQs) – UPCOMING EU REGULATORY CHANGES - FOR DHL INTERNAL USE ONLY Page 24
Customs Code and involves more supply chain actors and business models as Article 127 (4) of the Union Customs Code with an objective to collect better quality and timely data related to the supply chains of goods movement. 2.2.12Are ICS1 and ICS2 going to run in parallel? Yes, they will operate in parallel for a period of time. After the rollout of ICS2 Release 3 on 1 March 2024, ICS1 will phase out after a transitional period of 200 days. 2.2.13What are ICS2 ‘Releases’? The EU Authorities’ ICS2 Transition Strategy and Plan foresees implementation of the new system and consequently new Entry Summary Declaration requirements and related business and risk management processes in three operational releases. Note: these are not the DHL systems releases, but the phasing by the EU authorities. •
Release 1: Air postal and express consignments – Pre-Loading Advance Cargo Information (PLACI) minimum ENS dataset; o As from 15. March 2021 express carriers and designated postal operators established in the European Union (destination posts) will be required by the Union Customs Code to provide the minimum set of advance electronic data, in the format of the electronic Entry Summary Declaration (ENS) to the ICS2, for all goods in consignments they are responsible to bring into the EU Customs territory. o ENS will be mandatory for all express and postal consignments destined to enter the Union customs territory. o The aim is to provide an extra security layer to the existing civil aviation security requirements. Pre-loading advance cargo information – PLACI, as a subset of the ENS will be used by the EU customs authorities to perform air cargo and mail security risk assessment. o The scope of this assessment is to detect immediate threats to aviation security i.e. bringing on board an aircraft articles that could lead to destruction of the plane and/or loss of lives – improvised explosive (IED) or incendiary device (IID) a.k.a. ‘bomb in the box’. o Where necessary, in course of carrying out risk assessment, an EU customs authority will trigger risk mitigation procedures. These will need to be implemented by express carriers and by designated operators in the origin country (origin post). The following risk mitigation measures will be triggered by a competent EU customs authority (based on the legal provisions under the Union Customs Code Implementing Regulation (EU) 2015/2447): • Request for Additional Information on the particulars (data quality and accuracy referral); known as RFI notification, and corresponding response to the request for information; • Request for High Risk Cargo and Mail screening by making use of EU Civil Aviation measures; known as RFS and corresponding response in form of the outcome of the screening; • ‘Do Not Load’; known as DNL instruction that require triggering of the aviation security protocols to address instances of imminent threat to aircraft presented by an air cargo shipment. o Customs will inform economic operators about completion of risk analysis by providing Assessment Complete notifications.
•
Release 2: Goods in Air traffic – complete ENS dataset for all goods in air transport; o As from 1 March 2023, all goods by air in postal, express and general cargo consignments will be subject, in addition to pre-loading filing requirements, to complete pre-arrival ENS data requirements. Furthermore, air carriers and other DHL EXPRESS | INTERNAL FREQUENTLY ASKED QUESTIONS (FAQs) – UPCOMING EU REGULATORY CHANGES - FOR DHL INTERNAL USE ONLY Page 25
•
parties such as freight forwarding logistics providers, will become liable to submit minimum pre-loading and complete pre-arrival data to ICS2. More information coming soon. Release 3: Goods in Maritime and inland waterways, Road and Rail traffic – complete ENS dataset for all goods in these sectors, including postal goods. o As from 1 March 2024, maritime, road and rail carriers, including postal and express carriers that transport goods via those modes, and other parties, such as logistic providers, and in certain circumstances also final consignees established in the EU, will have to submit ENS data to ICS2. More information coming soon.
2.2.14What is the scope of different ICS2 Releases? Release 1: ▪ Lodgement of pre-loading minimum data set (PLACI) for air express and postal consignments; ▪ Presentation process for postal consignments. Release 2: ▪ Lodgement of the complete ENS for all goods in air traffic; ▪ Lodgement of the arrival notification for all goods in air traffic; ▪ Presentation process for air express consignments and general air cargo. Release 3: ▪ Lodgement of the complete ENS for maritime and inland waterways, road and rail traffic (this includes goods in express and postal consignments transported in these means of transport); DHL EXPRESS | INTERNAL FREQUENTLY ASKED QUESTIONS (FAQs) – UPCOMING EU REGULATORY CHANGES - FOR DHL INTERNAL USE ONLY Page 26
▪ ▪
Lodgement of the arrival notification for maritime and inland waterways; Presentation process for all goods on all modes of traffic.
2.2.15What is definition of an express consignment? An express consignment means an individual item conveyed by or under the responsibility of an express carrier. 2.2.16Who is an express carrier? An express carrier means an operator providing integrated services of expedited/time-definite collection, transport, customs clearance and delivery of parcels whilst tracking the location of, and maintaining control over, such item throughout the supply of the service. 2.2.17What is an ENS? Entry Summary Declaration (ENS) means the act whereby a person informs the customs authorities, in the prescribed form and manner and within a specific time limit that goods are to be brought into the customs territory of the Union. 2.2.18What is a multiple filing? A multiple filing means that an ENS is composed of two or more partial ENS filings (i.e. two or more prescribed data sets), which together form an ENS declaration. 2.2.19What is an ENS filing? ENS filing means either partial or full ENS data set required by the legislation per specific mode of transport or business model. 2.2.20What is PLACI? PLACI refers to a specific type of partial ENS filing, which is the mandatory minimum dataset (‘7+1’) to be filed as soon as possible prior to loading of the goods onto the aircraft in a third country. It is limited to air traffic only and covers all goods (i.e. general cargo, express consignments and postal consignments). 2.2.21What is pre-loading? Pre-loading means before the goods are loaded onto the means of transport that will bring them into the customs territory of the European Union. 2.2.22What is pre-arrival? Pre-arrival means before the means of transport arrives in the customs territory of the European Union. 2.2.23Who has to file an ENS and when? ▪ In general the carrier bringing the goods into the customs territory of the European Union is obliged to lodge an ENS for those goods [Article 127 (4) UCC]. ▪ In cases where the carrier does not have all legally required particulars of the ENS at its disposal those particulars are to be filed by the person who holds those particulars and did not share them with the carrier thus enabling the carrier to lodge a complete ENS [Article 127 (6) UCC; case of multiple filing]. ▪ Depending on the mode of transport, the ENS is to be filed within the following time limits outlined below: DHL EXPRESS | INTERNAL FREQUENTLY ASKED QUESTIONS (FAQs) – UPCOMING EU REGULATORY CHANGES - FOR DHL INTERNAL USE ONLY Page 27
Transport by AIR ▪ The ENS, or where that is not possible the minimum data set for air pre-loading, shall be lodged as early as possible but at the latest before the goods are loaded onto the aircraft which will bring them into the customs territory of the Union; ▪ Where only minimum data set was lodged (as per above), the complete ENS shall be lodged at the time of actual departure of the aircraft when the duration of the flight is less than four hours; ▪ For other flights than mentioned under bullet above, the complete ENS is to be lodged four hours before the arrival of the aircraft at the first airport in the customs territory of the Union. Transport by ROAD ▪ The ENS shall be lodged at the latest one hour before the goods arrive at the entry point of the Union. Transport by SEA ▪ At the latest two hours before the arrival of the vessel at the first port of entry into the Union in case of goods coming from Greenland, Faeroe Islands, Iceland, ports on the Baltic Sea, Black Sea, Mediterranean Sea or Morocco; ▪ The same two hours apply in cases where the goods are coming from other third country territories and enter the enter the customs territory of the Union, the French overseas departments, the Azores, Madeira or the Canary Islands and the duration of the vessel’s journey is less than 24 hours; ▪ At the latest four hours before the arrival of the vessel for bulk cargo in other cases than the two bullets above; ▪ For containerized cargo in other cases than the first two bullets above, 24 hours before the goods are loaded onto the vessel, which will bring them into the customs territory of the Union. Transport by RAIL ▪ Where the train voyage takes less than two hours from the last train formation station outside the customs territory of the Union to the first point of entry into the customs territory the ENS is to be lodged at the latest one hour before the train arrives at the border entry point of the Union; ▪ In other cases than mentioned on bullet above, the ENS is to be lodged at the latest two hours before the train arrives at the entry point of the Union. Transport by INLAND WATERWAYS ▪ The ENS shall be lodged at the latest two hours before the goods arrive at the entry point of the Union. 2.2.24What is the background regarding ICS? Why was this developed? ▪ Security aspects were introduced into the EU customs legislation in year 2005 and 2006 (Regulation (EC) 648/2005, 1875/2006) as a response to the aftermath of the terrorist attacks in September 2001 in the United States. ▪ The purpose of these measures went beyond strict sense of terrorism related security threats that emerged to the international goods supply chains in new millennia. This measures allow customs authorities of the Member States in fulfilling its mission (Article 3 of the Union Customs Code) to ensure protection of the Union and its residents from a wider range of security and safety risks posed by illicit trade. The measures also aim to strike a proper balance between customs controls and legitimate trade. ▪ Integral to the measures were: o The requirement to submit electronic data prior to the arrival of goods in the EU (the so called Entry Summary Declaration - ENS) to analyze and identify security and safety risks before goods arrive at the external borders; DHL EXPRESS | INTERNAL FREQUENTLY ASKED QUESTIONS (FAQs) – UPCOMING EU REGULATORY CHANGES - FOR DHL INTERNAL USE ONLY Page 28
Setting up of advance cargo information system (Import Control System – ICS); The introduction of the Authorized Economic Operator (AEO) program; Deployment of a common risk management framework with controls based on electronic risk analysis techniques; Control focus on high-risk goods movements while identifying and facilitating cross-border movements of goods involving legitimate trade. As the new regime was just entering into operation, new security threats emerged. The Yemen Incident in October 2010, where a shipment containing improvised explosive devices was found on-board of an airplane transiting the EU towards the United States, exposed certain structural weaknesses and gaps of the system. This prompted a comprehensive review of the ICS and of the entire risk management framework with a view to reinforce the framework and to be more responsive, efficient, effective and adaptable to new emerging threats. It has led to adoption of the EU customs risk management strategy and action plan, endorsed by the Council in year 2014 that laid the ground for further reform of the legislative, IT and operational framework. The cornerstone of the reform in the field of protection of safety and security is a complete overhaul of the ICS into a new largescale advance cargo information program underpinned by the ICS2. It will be developed, deployed and operationalized within time-period of 2021 and 2025. It aims to further strengthen the “first line of defense” for customs. o o o o
▪ ▪ ▪ ▪ ▪ ▪
2.2.25Is the current ICS version (“ICS1”) also screening shipments inbound (or transiting) the European Union, Switzerland and Norway? Only inbound (or transiting) the EU? The current ICS1is screening shipments inbound the European Union, Switzerland and Norway. 2.2.26What is the difference between ICS1 and ICS2? - ICS1 is the current Import Control System used in the European Union, already in place since 2011, and is currently used for security screening of shipments prior to arrival in the European Union, Switzerland & Norway. - ICS2 is the new security screening system for goods destined to (or transiting) the European Union, Switzerland & Norway, which will go live: ▪ On March 15th 2021 for security screening of shipments prior to loading of cargo on planes at the country of export, for Air Express shipments – and ICS1 will continue to operate in parallel (for pre-arrival) for Air Express. ▪ On March 1st 2023 for security screening prior to loading (and pre-arrival) of cargo on planes at the country of export, for all goods transported by air (also including Air General Cargo) – therefore, ICS1 phased out completely for air. ▪ On March 1st 2024 for security, screening prior to arrival of cargo transported by road – therefore, ICS1 phased out completely for road. Therefore, ICS1 and ICS2 will operate in parallel for a period of time as outlined above. For more details, please visit: https://ec.europa.eu/taxation_customs/general-information-customs/customs-security/ics2_en 2.2.27Will shipments from EU to UK be subject to ICS screening as well as of Jan 1st 2021? No, shipments from EU to UK are not subject to ICS screening. However, the UK has ASN to which we lodge data, so the lack of ICS is not an issue for them, really - they would still have all the data and possibilities to verify it. 2.2.28Will shipments from UK to EU be subject to ICS screening as well as of Jan 1st 2021? Yes, as of January 1st 2021, shipments from UK to EU will be subject to ICS screening. 2.2.29Does ICS2 apply for Road Shipments from UK to EU? DHL EXPRESS | INTERNAL FREQUENTLY ASKED QUESTIONS (FAQs) – UPCOMING EU REGULATORY CHANGES - FOR DHL INTERNAL USE ONLY Page 29
- ICS2 will only apply for Road Shipments into EU as of release 3 in 2024. - However, ICS1 (which is already in place) will screen Road Shipments as of January 1 st due to BREXIT – therefore, essential to provide complete & accurate Customs Data, including goods descriptions, for Road Shipments as well. 2.2.30If my customer is shipping from Hong Kong to USA, and the airplane is transiting via Leipzig/Germany, will these also be screened by the Import Control System? YES, all shipments inbound or transition through EU Member states, Norway, or Switzerland. 2.2.31For the security declaration data need to be submit to EU authority prior to flight close from origin? Is this manage by EU or? Yes, the data will be sent before the flight is closed at origin. It will be done automatically through a special internal system that will send the filling to the European system. 2.2.32Is ICS applicable if I ship from USA to UK directly? No, ICS does not apply in the UK. However, UK have their own security system similar to the ICS, therefore essential to provide accurate Customs data for UK shipments as well. 2.2.33Where can I find more information from Regulatory Authorities regarding ICS2? Please find below the links: ▪ EU | ICS 2 Communication: https://ec.europa.eu/taxation_customs/news/are-you-ready-ics2_en ▪ EU | ICS 2 Overview, Factsheet, Timelines: https://ec.europa.eu/taxation_customs/general-information-customs/customssecurity/ics2_en ABOUT THE DHL OPERATIONS / PROCESSES / SYSTEMS RELATED TO ICS2 2.2.34Is there an ICS2 SOP document available? Please find the ICS2 Shipment Processing (GSOP Map) at https://editor.signavio.com/p/hub/model/8418c8476e994b8397160fd4f18a6a8c 2.2.35What data DHL Express uses for ICS1 and ICS2 filing? - ICS1 (pre-arrival security filing) is filed based on Waybill Data, and in place since 2011. - ICS2 (pre-loading security filing) will file the Pre Loading Advance Cargo Information (PLACI 7+1 = Consignor name & address, Consignee name & address, Detailed Line Item Description of Goods, Weight, Pieces and HAWB ID) and will be filed based on Commercial Invoice Line Item data as of March 15th 2021. IMPORTANT: If the customer does not provide line item data, DHL will use the Waybill information - this is why it is so important to ensure that Waybill Goods Descriptions are fixed as well, since it will be used whenever no line item data is available. - The ICS1 and ICS2 systems will continue to run in parallel until 2023, therefore the importance of having both data elements (Waybill & Commercial) with good quality. - After 2024 (once ICS1 is phased out for all transport modes as outlined above), Commercial Invoice Line Item goods description data will be the main source of information for ICS2 security filing – and DHL Express recommends customers to continue providing Waybill Goods Descriptions data in alignment with the Commercial Invoice for consistency purposes. 2.2.36When will the shipment data be sent to ICS2? DHL EXPRESS | INTERNAL FREQUENTLY ASKED QUESTIONS (FAQs) – UPCOMING EU REGULATORY CHANGES - FOR DHL INTERNAL USE ONLY Page 30
Shipment data for ICS2 filing will be sent at the earliest stage possible, to avoid any type of delays. This is usually as soon as we receive the data from the shipper (via various customer and DHL ESS shipping systems), and once it has passed the data validation checks (automatically) in DCVS. Over 95% of the relevant data will have arrived and be processed before the shipment arrives at our facilities. 2.2.37When is ICS 2 regulation coming into force, and when will my country have to comply or implement the processes? We have agreed with Customs a gradual deployment of origin countries over at least a 6 month period (March to October). The global teams will advise the regions and countries in which order they are coming live, and work with them to get them prepared. The deployment plans will be shared with the regional teams this will be further shared as required. 2.2.38If there is difference in WAYBILL, weight and our re-weigh weight how should be send as security filing? What would be taken by the authority? If there is a discrepancy between the gross weight as provided by the customer and the DHL gross weight after re-weight, DHL will submit an amended security filing as required, but this will be automatic. 2.2.39Will shipments be customs cleared before leaving from origins? What if the shipment data is not ready or available? Should these shipments keep OH at origin hub? - Customs clearance at origin is done independently from security filing. - If the data has not been received, or is classed as INVALID (current data checks standards in DCVS the DHL data entry system), then it is not ready/available for ICS submission, no NON DOC shipments can be loaded onto an airplane with final destination to EU, unless it has had an assessment complete from Customs/ICS 2. - ICS is not about Customs declaration submission and clearance of goods; it is about the SECURITY screening of shipment transiting or into EU Member states (plus NO/CH). Therefore, if the data for ICS2 is NOT available (and VALID) to be sent to Customs/ICS2, then it may need to be held temporarily at origin (or other facility where the shipment was at the time the referral was raised and actioned), so that the data issues or referrals (RFI and RFS) from customs can be actioned and resolved. The shipment can be removed from OH once the referral has been actioned and an assessment complete has been received from Customs/ICS2or - If the ENS entry is reviewed by Customs and it triggers a DNL (Do Not Load – extreme and rare cases)rejected by the EU screening process the shipment will receive a do not load and will need to be identified and held at origin, and handed over to the relevant authorities as instructed. 2.2.40If ICS also applies to shipments transiting Europe, then does this apply to *all* shipments going through LEJ even if the destination is not in Europe? Correct, all shipments with a non-EU member states (plus NO and CH origin) destined to (or transiting) Europe will be subject to security screening no matter what is the final destination. Shipments with origin of one of the EU member states (plus NO and CH) are not subject to ICS2 filing. 2.2.41When will operations be alerted via Intercept that shipment cannot load to flight? In short at the earliest possible/practicable time, and only when really necessary – in the service centre OB process, and/or the GTW export processing. Our objectives is to ensure that ALL shipments are ENS filed and assessments complete at origin, and no shipment to leave the origin country with an open referral. If 30 (can be variable/less depending on the operational setup of the facility) minutes from ENS submission expires and no Assessment Complete message has been received from Customs, an intercept is set in the system and consignment stopped. Then DHL EXPRESS | INTERNAL FREQUENTLY ASKED QUESTIONS (FAQs) – UPCOMING EU REGULATORY CHANGES - FOR DHL INTERNAL USE ONLY Page 31
the newly established DHL ICS2 Central Control team follows up with customs authorities ICS2 help desk to check if a request/referral could be expected, what is the status of the risk assessment or possible system error occurred. 2.2.42Is there a timeline for the ICS2 system to respond to the DHL with the shipment qualification for uplift? At this point, there is no official response time given for the STI (Shared Trader Interface) to respond to the analysis performed. ▪ DHL Express expects to receive your Commercial invoice data electronically, together with the shipment data. ▪ In this way, the Entry Summary Declaration for ICS2 and preparation of the customs clearance process can start immediately giving huge advantages in terms of quality and lead-time performance. ▪ In the past years, we tried to push the authorities to commit with certain time limits, however they refused this approach. ▪ Thus, DHL Express has decided to set up an internal timer of 30 minutes (less in certain facilities) from initial ENS submission, meaning: - If 30 minutes from ENS submission expires and no Assessment Complete message has been received from Customs, an intercept is set in the system and consignment stopped. - Then the newly established DHL ICS2 Control team follows up with customs authorities ICS2 help desk to check if a request/referral could be expected, what is the current status of the risk assessment or possible system error occurred. 2.2.43From the time DHL provide the details to customs on the ICS2 system how long will it take for them to respond to see if the goods are good to ship. I am concerned in regards to transit delays as I can imagine we will not load anything until we get the all clear the goods are good to go. Based on our ENS filing the EU customs authorities will perform a risk assessment, involving all 27 Member States + NO and CH. ▪ The process is split into two stages: automated and manual. ▪ Indeed, the results of the automated process could be expected in a couple of minutes. However, if a manual intervention is needed then it might take longer. ▪ In the past years, we tried to push the authorities to commit with certain time limits, however they refused this approach. - Thus, DHL Express has decided to set up an internal timer of 30 minutes from initial ENS submission, meaning: If 30 minutes from ENS submission expires and no Assessment Complete message has been received from Customs, an intercept is set in the system and consignment stopped. Then the newly established DHL ICS2 Control team follows up with customs authorities ICS2 help desk to check if a request/referral could be expected, what is the current status of the risk assessment or possible system error occurred. 2.2.44Which products are in scope of ICS2? In Release 1 (live 15 March 2021) only DHL NON DOC products are in scope. ICS2 rules excludes “items of correspondence” from the scope. DHL is in process of aligning DOX DOC product accepted content descriptions with the EU legal definition of items of correspondence. Release 2 will add ACS (Aviation Capacity Sales) to scope and Release 3 will include road. 2.2.45How is the required data set being captured and filed to EU authorities? The shipment data comes into DHL as it does today from customers/shippers and the respective systems. Manual data (nonelectronic) captured by DHL on behalf of the shipper will be transmitted once it has been captured and completed. Capture Management of this data and transmission (filing) is done automatically, without any involvement from shipment origins. A new system is being developed in DHL– ICS2 Processing Module for the purpose. DHL EXPRESS | INTERNAL FREQUENTLY ASKED QUESTIONS (FAQs) – UPCOMING EU REGULATORY CHANGES - FOR DHL INTERNAL USE ONLY Page 32
2.2.46How are the authority requests (that cannot be resolved by the Central Control Team) will be communicated to countries/facilities? The DHL Central ICS 2 Control team will be set up to manage the referrals and communications with Customs. Where a referral is required to be sent to the origin or other relevant facility, this will be managed by the DHL Central ICS2 Control team, using DHL systems (eCase) developed for this purpose of control and oversight. An activity (an e-mail message) will be sent to the existing POC (point of contact - DP or security distribution addresses). The e-mails will contain a link for response/action information to be sent, which will feed eCase tool. The default for the activities is as follows: RFI to be assigned to the Denied Parties team. RFS and DNL to be assigned to Country Security team. 2.2.47What is and RFI (Request for Information) Referral? An RFI is a referral raised by Customs, where they require clarification, more or additional information on the shipment, based on the PLACI information that we have submitted to Customs. Request contents are defined: *PLACI (7+1): Consignor Name & Address, Consignee Name & Address, Goods Description, Pieces, Weight, HWB The RFI may be required relative to the below data items ▪ Amend PLACI* data elements ▪ Confirm PLACI data elements ▪ Provide additional information ▪ Provide documents ▪ Confirm if HRCM screening is done The RFI response will first be attempted to be completed by the Central Control Team, if they cannot resolve it, it will be requested to the origin country or relevant facility to resolve it. 2.2.48What can we expect in an ICS2 Referral - Request for Information (RFI)? Request for Information (RFI) may have a request to provide or amend shipment information. The requests may contain: Amend Consignor name Amend Consignor address Amend Consignee name Amend Consignee address Amend number of packages Amend description of goods Amend gross mass Confirm PLACI data elements Provide all available documents Provide phone number and e-mail address(es) of Consignor Provide phone number and e-mail address(es) of Consignee DHL EXPRESS | INTERNAL FREQUENTLY ASKED QUESTIONS (FAQs) – UPCOMING EU REGULATORY CHANGES - FOR DHL INTERNAL USE ONLY Page 33
Provide information whether HRCM screening has taken place 2.2.49How many RFIs referrals can we expect? It is not known exactly how many RFI referrals that we will get. It was estimated that we would get around 1% of the volume daily/globally. However we estimate that this could be between 300-1000/day globally. The distribution of the volume across countries will not be uniform, and it will be influenced by origins of interest, and other factors related to security. The numbers of referrals will depend on what Customs is screening for and what external intelligence they have. The numbers and actions will be under constant review by the Central Control team and discussions with Customs. 2.2.50What is required when ICS2 Referral Request for Screening (RFS) is received? Request for Screening (RFS) requires High Risk Cargo & Mail Screening (HRCM). Standard X-ray screening (including dual view) on its own is no longer sufficient, and has to be screened in combination with another approved method (ETD, EDD). If EDS is used/available, it is sufficient as a single method. The facility that holds the shipment will receive the e-mail and local Security will be contacted by the Control team to confirm the process. If the shipment holding facility has no screening capability, it has to organize a controlled transport to the screening location and ensure shipment identification. After screening and based on the outcome, applies appropriate scanning. The RFS must be closed with an assessment complete before going on a flight with and EU (plus NO and CH) destination, unless explicit approval has been given from the Central ICS 2 Control team. 2.2.51If a request is received before we collected the shipment, do we cancel pick-up? Unless the request is Do Not Load, shipment should be collected and request processed. As soon as the request is resolved, the shipment continues moving to its destination. 2.2.52What if a request is received on a ghost shipment? If shipment is filed and receives a request, while not reaching Active state for more than 14 days, the file will be invalidated by the Control team. 2.2.53What do we do if a request cannot be resolved? There is an option of replying with inability message. In such cases another request should be expected. 2.2.54Will all shipments be intercepted at origin? No, not all shipments will be intercepted for the ICS 2 controls, only where it is necessary to due to an action required on a referral. We anticipate that with the advance data that we have and the processes we have designed, that over 99% of shipments will not be intercepted for ICS 2 reasons, and will be processed as per normal. 2.2.55Where is ICS2 intercept visible? OCNT, DCVS, AHS. There is no physical checkpoint generated to be visible across all applications (like NPTS or GEMA), at this stage only an event visible in SHERLOC (ST checkpoint will be made visible in later version of SHERLOC). 2.2.56Is HS code mandatory data element for ICS2 filing? No, but will be captured when available and added to the filing message. However, HS code may significantly reduce the potential for a referral, especially where content descriptions are vague. DHL EXPRESS | INTERNAL FREQUENTLY ASKED QUESTIONS (FAQs) – UPCOMING EU REGULATORY CHANGES - FOR DHL INTERNAL USE ONLY Page 34
2.2.57Are countries responsible for ENS declarations (PLACI data) to their local Customs Authorities in the Member States as it is for ICS1 today? No, this is done automatically and centrally to German Customs as per ICS2 rule that initial risk analysis to be performed by the authority in the country where the operator's main hub is located. 2.2.58What do country operations need to do if there is ad hoc routing transiting ICS2 country? This will be automated by new routing engine which detects route via EU. Then the respective ENS entries will be made, assessments received and referrals will be raised and actioned as relevant. 2.2.59Are there any GSOP changes in relation to ICS2 rejections and how to fix them, pre-export from the origin country? Yes there are many activities ongoing regarding ICS2 but mainly on OPS side, DCVS etc. No changes required on ESS applications except that BBX customers need to ensure they properly link baby and mother shipments (more information to be sent out shortly if not yet done already in your region). 2.2.60If a shipment has an open RFI referral, can it depart the origin country and be forwarded to the network? No, if a shipment has an open RFI referral, and we have not received an assessment complete from customs, then the RFI must be closed (by receiving an assessment complete) from Customs. A shipment with an open RFI should not leave the origin country until resolved. The only exception to this is if approval or release has been given by the Central Control Team. 2.2.61If a shipment has an open RFS referral, can it continue its journey in the network? No, the shipment needs to be controlled by the Security POC, the RFS must be actioned and assessment complete issued from Customs before it can travel further. The RFS screening needs to be conducted to HRCM screening standards and as per request details from customs, by an RA3 certified facility or agent. 2.2.62Do we need to put ICS2 shipments ON HOLD, when there is an open referral? If there is an intercept active on a shipment, for the purpose of ICS 2 processing and an open referral, it may be required to place the shipment ON HOLD and raise the respective checkpoints. - If the shipment has an active intercept and open referral, but gets resolved during its operational window, and sent on its way – then there is generally not a need to place the shipment ON HOLD during this down time. - If the shipment has an active intercept and open referral, and does NOT get resolved during its operational window (possibly missing connection), and needs to be held until resolved – then the shipment should be placed OH HOLD and where required placed in the HELD cage as required. 2.2.63What is a DNL (DO NOT Load) Referral? A DNL is a DO NOT LOAD referral, and it implies that Customs believe the shipment is a possible immediate security threat, and needs to be actioned and removed from circulation as fast as possible. 2.2.64How many DNLs can we expect? A DNL would be exceptional, and we do not expect any. If we do get one we must act according to instructions, quickly and safely. DHL EXPRESS | INTERNAL FREQUENTLY ASKED QUESTIONS (FAQs) – UPCOMING EU REGULATORY CHANGES - FOR DHL INTERNAL USE ONLY Page 35
2.2.65What does the Operation do in the case of a DNL referral is communicated to them from the central control team? The DNL will be managed by the Central Control Team, and the local POC will be instructed what to do in the case there is a DNL. These instructions need to be carried out quickly, efficiently, safely, and in accordance with the relevant security protocols.
DHL EXPRESS | INTERNAL FREQUENTLY ASKED QUESTIONS (FAQs) – UPCOMING EU REGULATORY CHANGES - FOR DHL INTERNAL USE ONLY Page 36
2.3 VAT De Minimis Removal 2.3.1
VAT Regulatory Change
2.3.1.1 What is the current EU VAT De Minimis threshold, and what is changing? ▪ In summary, goods below EUR 22* are currently exempted from VAT, and as of July 1st 2021 these will no longer be exempted (i.e. VAT will be levied). ▪ When the new rules enter into force, goods up to 150€ will be taxable, but will remain duty free. ▪ Previously, only imports with a value lower than 22€ were not taxable, and goods up to 150€ were duty free. ▪ Please find below the table that illustrates the current & future thresholds of Duties & VAT:
*Goods Value: intrinsic value (the price at which the goods are sold, excluding transport and insurance costs, unless they are included in the price and not separately indicated on the invoice). It is important to note that the threshold applies to the value of the consignment, not to each individual item. ** EUR 22 De Minimis: please note that in certain EU Member States (e.g. BG), the De Minimis value is of €10 (instead of €22); other EU Member States (i.e. PL, FR, SE) have already decided to curb the use of this exemption to certain (mail) orders or in whole. NOTE: please note the abbreviation B2C = Business to Consumers and B2B = Business to Business
2.3.1.2 What are the types of VAT collection models that will be available? ▪ From 1 July 2021 the value added tax (VAT) exemption for the importation of goods with a value not exceeding EUR 22 will be removed. ▪ As a result, all commercial goods imported to the EU will be subject to VAT, with different VAT collection possibilities available: a) with IOSS (only for B2C | goods up to EUR 150): VAT collected by the ONLINE SELLER at the moment of purchase (and ONLINE SELLER then pays to EU Tax Authorities via monthly VAT return) b) without IOSS (for B2C or B2B | any goods value): DHL pays VAT to Authorities upon import (and then charges the customer),or customer pays VAT directly to Authorities DHL EXPRESS | INTERNAL FREQUENTLY ASKED QUESTIONS (FAQs) – UPCOMING EU REGULATORY CHANGES - FOR DHL INTERNAL USE ONLY Page 37
2.3.1.3 Why is the EU removing the VAT exemption on imports of low-value consignments from non-EU countries? ▪ Small consignments imported into the EU that are worth less than EUR 22 are currently exempt from VAT. ▪ With around 150 million parcels imported free of VAT into the EU each year, this system is open to massive fraud and abuse, which could create major distortions against EU business. ▪ Currently, EU businesses must apply VAT from the first eurocent as a De Minimis threshold does not apply for goods sold within the EU. ▪ Imported high-value goods such as smartphones and tablets may be undervalued or wrongly described in the importation paperwork in order to benefit from this VAT exemption. ▪ Compliant EU companies – both online and traditional (‘brick-and-mortar’ stores) – can be placed at a disadvantage. ▪ Removing this VAT exemption has been strongly requested by European e-commerce organizations, while other OECD members have taken or are about to take similar measures. 2.3.1.4 Will the abolition of the EU VAT De Minimis threshold from July 2021 also apply to shipments being sent through the postal channel? Yes. The abolition of the de Minimis applies to all modes of transport, including postal operators. 2.3.1.5 Is the VAT rate different per country in the EU? Where can I find the VAT% per country? Yes, VAT rates vary per country. You can find more info at: https://ec.europa.eu/taxation_customs/business/vat/eu-country-specificinformation-vat_en 2.3.1.6 VAT rates differ in the EU country by country. Which VAT rate has to be paid? The VAT rate to be applied depends on the destination country in the EU- regardless if the shipper uses the IOSS scheme or not. It also does not matter where the Importer of Record or the IOSS/VAT intermediary is established for the amount of VAT to be paid. 2.3.1.7 How will VAT be calculated for the order, does the customer need to have a plug in on their website? The calculation of the VAT at sales is the responsibility of the seller. The VAT rate which has to be paid depends on the final EU destination country. 2.3.1.8 Where can I find more information from Regulatory Authorities regarding VAT De Minimis Removal? Please find below the link: https://ec.europa.eu/taxation_customs/business/vat/modernising-vat-cross-border-ecommerce_en 2.3.2
IOSS (Import One Stop Shop)
2.3.2.1 What is IOSS? ▪ Non-EU businesses selling to EU customers and opting to register under IOSS (Import One Stop Shop) will have to collect and pay VAT at the moment of sale. ▪ Registration to the Import One Stop Shop (IOSS) will be open to all sellers from outside the EU. ▪ Businesses from outside the EU with no EU representation will have to assign an intermediary (tax representative) to deal with EU VAT compliance on their behalf. ▪ Upon registration, Non EU Business will have a VAT IOSS identification that applies in all Member States. ▪ Once registered, such Non EU Business must apply the IOSS to all their distance sales of goods imported to the EU (under 150€). DHL EXPRESS | INTERNAL FREQUENTLY ASKED QUESTIONS (FAQs) – UPCOMING EU REGULATORY CHANGES - FOR DHL INTERNAL USE ONLY Page 38
▪ ▪
For customers to benefit from the IOSS ‘green’ customs lane, it is essential that the IOSS VAT identification is provided by the retailer/marketplace etc. and made available on the dedicated field in the booking details to DHL. For additional information, please visit the EU Commission website – link below: https://ec.europa.eu/taxation_customs/business/vat/modernising-vat-cross-border-ecommerce_en
2.3.2.2 What is OSS? One-Stop Shop (OSS) - for EU-based businesses that sell to customers in other EU countries, so intra-EU only (NOTE: This should not be confused with IOSS). 2.3.2.3 What is the difference between OSS and IOSS? One-Stop Shop (OSS) - for EU-based businesses that sell to customers in other EU countries (intra-EU only). Import One-Stop Shop (IOSS) - for non-EU businesses that sell to EU customers, but only for B2C ‘low value’ goods up to €150. 2.3.2.4 When will IOSS go live? Will it also be on 1st July in line with the removal of the VAT De Minimis (22EUR)? IOSS Registration already started since 1 April 2021. The IOSS scheme will be applicable as of 1 July, 2021 at the same time the VAT De Minimis threshold of 22 EUR is removed. 2.3.2.5 What is an IOSS/VAT intermediary? An intermediary is a VAT/tax representative to deal with EU VAT compliance on behalf of the seller, for companies from outside the EU with no EU representation (i.e. not established in the EU). The IOSS/VAT intermediary is responsible for filing the monthly VAT return, paying the VAT to the Authorities and complying with all other formalities resulting out of the use of the IOSS scheme. If an IOSS/VAT intermediary is used, only 1 registration is required and this 1 registration is valid for all EU27 countries for VAT purposes. 2.3.2.6 Can DHL act as IOSS/VAT intermediary? No, DHL is not acting as intermediary from an IOSS/VAT perspective, and has no intention of doing so. The responsibility for finding & contracting an IOSS/VAT intermediary lies with the Seller. 2.3.2.7 Can DHL recommend any IOSS/VAT intermediary or will sellers have to find out themselves? Sellers can find a series of IOSS/VAT representatives by searching for the term "IOSS intermediary" on the internet. DHL does not recommend a specific company. 2.3.2.8 How easy/how difficult it is for a non-EU seller to switch from one IOSS/VAT intermediary to another? DHL is not acting as intermediary from an IOSS/VAT perspective, and has no intention of doing so. The responsibility for finding & contracting an IOSS/VAT intermediary lies with the Seller. At this point, DHL does not have feedback from sellers nor intermediaries on how easy/how difficult it is to switch from one intermediary to another. 2.3.2.9 Not all B2C shippers are established in one of the 27 EU Member States and can act as an Importer of Record (IOR) in front of the EU Customs Authorities. Does the IOSS/VAT intermediary replace the requirement to be established in the EU to become an IOR for Customs purposes? The IOR from a customs perspective is independent from the IOSS. The intermediary would not act as IOR. IOR would still be the receivers in most of the cases established in the EU or in case the shipper is established in the EU, the shipper can act as IOR. 2.3.2.10 Do non-EU based companies have to establish a legal entity in the European Union (EU) before registering for IOSS? DHL EXPRESS | INTERNAL FREQUENTLY ASKED QUESTIONS (FAQs) – UPCOMING EU REGULATORY CHANGES - FOR DHL INTERNAL USE ONLY Page 39
Non-EU based companies have 2 options: 1. Use an IOSS/VAT intermediary (who is based in the European Union). 2. Establish a legal entity in the European Union (EU), including VAT registration, and then register for IOSS yourself. Hence, no EU establishment is required if an IOSS/VAT intermediary is nominated. 2.3.2.11 Is there any cost associated with registering for an IOSS number? No, there are generally no costs associated with the registration of an IOSS number with the Authorities. However, in case a shipper wants to be supported by an intermediary, the intermediary might charge for his service. 2.3.2.12 Where do customers register for IOSS? From 1 April 2021, online sellers can register on the IOSS portal of any EU Member State (of the country where the company is established in the EU). If the online seller is not based in the EU, they need to appoint an EU-established IOSS/VAT intermediary to fulfil their VAT obligations under IOSS (which can be based in any of the 27 EU Member States). IOSS can be used only for the goods sold as from 1 July 2021. 2.3.2.13 Does it matter which country the customer chooses to register for IOSS? Is there any methodology for which country to choose? The establishment of the company intending to register for IOSS or the establishment of the intermediary will define the EU country of registration. The IOSS number will be valid for all 27 EU Member States. Note: Non-EU established companies must appoint an IOSS/VAT intermediary which can be based in any of the 27 EU Member States. 2.3.2.14 Would there be a retroactive option for shippers that collect VAT up front but have delays with the IOSS registration? IOSS registration is open since 1st April 2021 and registration can be done at any time. If non-EU business are not able to obtain their IOSS numbers before 1st of July, then shipments coming into the EU will still be subject to VAT and DHL must collect it (as no IOSS number will be provided). The IOSS registration takes effect from the day the IOSS number has been allocated by the Member State's authority to the seller (either directly or via his intermediary). This is the date of commencement, from this date the IOSS number can be used for the sales transactions. Hence, there is no retroactive option available if the IOSS number is not available on 1 July, 2021. 2.3.2.15 IOSS only applies to VAT, or to both VAT and Customs duty? ▪ IOSS applies only to VAT. ▪ IOSS can only be used for goods with an intrinsic value not exceeding 150 EUR, and all goods up to 150 EUR imported into the EU are duty free, which means no customs duties are levied by Customs Authorities. 2.3.2.16 Can one seller apply the IOSS scheme for certain low-value shipments, and for other low-value shipments apply the standard VAT collection (non-IOSS)? No. If a seller applies for an IOSS number, then all their low-value shipments not exceeding 150 EUR must follow the IOSS scheme (exemption: excise duties). 2.3.2.17 What does an invoice need to show in case a seller sells via a marketplace and wants/has to use the marketplace IOSS? The applicable IOSS number has to be provided as part of the invoice electronic data in a dedicated field to DHL. It is the responsibility of the IOSS holder to communicate it to DHL. If the goods are sold via a marketplace, and this marketplace is DHL EXPRESS | INTERNAL FREQUENTLY ASKED QUESTIONS (FAQs) – UPCOMING EU REGULATORY CHANGES - FOR DHL INTERNAL USE ONLY Page 40
registered for IOSS, the IOSS number of this marketplace must be communicated to DHL via the invoice data by the seller. Hence, the marketplace has to ensure that the seller knows his IOSS number and can include it in the invoice data with DHL when booking the shipment. 2.3.2.18 If a product sold to the EU is covered by an Free Trade Agreement (such as between EU-UK) and the IOSS is applied by the seller, are there any customs formalities to be met although no Customs Duties and VAT apply at the time of import. Customs clearance is required for all non EU shipments, even if no Customs Duties/VAT is levied, i.e. the filing of a formal customs declaration is required and will be performed by DHL for each shipment imported into the EU as of 1 July, 2021 regardless of the value, origin or VAT collection model used. 2.3.2.19 If a client has two channels, B2B and B2C, how will the IOSS be used? IOSS may be only used for B2C transactions. For B2B shipments, the standard clearance process would apply and import VAT occurs at the time of import clearance at destination. 2.3.2.20 Some EU countries demand a receiver's personal Tax ID or security ID for clearance. Would this also be required for goods not exceeding 150 EUR value when the IOSS scheme is used? Yes, Tax ID or other ID numbers will continue to be required when IOSS is used. 2.3.2.21 Is the 150 EUR threshold for IOSS calculated based on the value of the goods only, or the value of the goods including the freight charge, insurance, etc.? The threshold for IOSS, described as "Not Exceeding 150 EUR", is the so called intrinsic value, i.e. the value of goods only (without freight charge, insurance, etc). 2.3.2.22 Where should the IOSS number be indicated? The IOSS number needs to be stated on the customs invoice data for the shipment and provided to DHL, so this will need to be captured at the time of shipment creation on the DHL Shipping Solution which the shipper is using. If the IOSS number is not indicated in the correct field (e.g. in the VAT/Tax reference number box of the shipper for MyDHL+), DHL cannot ensure that the IOSS number is used for the clearance process. A DHL guideline is available identifying where the IOSS number should be recorded depending on which shipping tool is used. 2.3.2.23 What if the shipper sends their goods as DDU? Does this mean that IOSS registration is still required? The IOSS registration and usage is independent from the Incoterms used and can be used in combination with all incoterms. If the IOSS scheme is applied, a VAT collection model at the time of Sales applies which means that that at the time of importation, no import VAT is levied and DHL would not charge out any import VAT to the receiver (since the seller already paid). 2.3.2.24 Is there a total sales threshold to be considered when the IOSS scheme is used, e.g. the IOSS scheme can only be used if a shipper does not sell goods with a value for more than 1M EUR/year to the EU? No, there is no threshold for the total value amount of shipments shipped to the EU within a year. However, the value of the goods imported to the EU on a transaction basis must not exceed 150 EUR (excl. Transport costs, insurance and other handling charges). 2.3.2.25
Will DHL have visibility to IOSS records so that we can see which customers applied the IOSS scheme?
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No, DHL we will not have a central view. We will request the IOSS number on a transactional basis as per the guidelines issued, and this data will flow to destination country local clearance applications. In case IOSS number is not provided by the seller for the import customs purposes, the VAT will be levied by the authorities at the time of import. 2.3.2.26 How can IOSS registered shippers provide the IOSS number to DHL? The Shipper must provide their IOSS number electronically to DHL in the correct shipper’s VAT/Tax ID field of the DHL Electronic Shipping Solutions. DHL will use this IOSS number in the clearance process during shipment declaration as of July 1 st 2021. In case IOSS number is not provided by the seller for the import customs purposes, the VAT will be levied by the authorities at the time of import.
2.3.2.27 As of when the IOSS registered shippers shall provide the IOSS number to DHL? Shippers can register for IOSS as of April 1st 2021. As of July 1st 2021 registered IOSS shippers must provide their IOSS number electronically to DHL in the correct Tax ID field of the DHL Electronic Shipping Solutions, so DHL can use this IOSS number in the clearance process during shipment declaration. In case IOSS number is not provided by the seller for the import customs purposes, the VAT will be collected at the import. 2.3.2.28 Can an IOSS registered shipper provide the IOSS number on ALL shipments regardless of value? In other words, if the IOSS number is provided to DHL for an order exceeding 150 EUR (where VAT is payable on import), will this cause any concerns? The IOSS number is only applicable to shipments where the value does not exceed 150 EUR. Therefore, for shipments exceeding EUR150, the IOSS number is not required (since it is not applicable) and we will not use it for clearance. 2.3.2.29 Can the IOSS scheme be used in case of shipments containing samples/gits? No, the IOSS Scheme cannot be used for Samples/Gifts, and is restricted to B2C commercial goods with a sales transaction. Hence, for samples/gifts DHL requires a Pro Forma invoice indicating the true value of the shipment so that the import VAT can be levied based on this value. 2.3.2.30 What happens if customer do not register for IOSS? IOSS in not mandatory to use. If a shipment is sent without an IOSS number in the dedicated field, then the import customs clearance will follow the standard process, i.e. import VAT is levied at the time of import clearance at destination. 2.3.2.31 Will DHL store shipper’s IOSS numbers on local Customer Master Files or centrally? No, DHL will not store IOSS numbers on local Customer Master Files or centrally and fully relies on the shipper providing the IOSS number as part of the electronic shipment data. The shipper is required to provide their IOSS number for every shipment (transactional basis). If the IOSS number is not provided in the requested shipper’s VAT/Tax ID field, then the clearance will be treated as standard, with VAT to be paid at import and as per DHL Billing Service selected. 2.3.2.32 What happens if customer registered for IOSS, but not provided the IOSS number in the shipment data? The shipper is required to provide their IOSS registration number on every shipment (transactional basis) electronically to DHL. If the IOSS number is not provided in the requested Tax ID field, then the clearance will be treated as standard, with VAT to be paid at import and as per DHL Billing Service selected. DHL EXPRESS | INTERNAL FREQUENTLY ASKED QUESTIONS (FAQs) – UPCOMING EU REGULATORY CHANGES - FOR DHL INTERNAL USE ONLY Page 42
2.3.2.33 Do any of DHL’s systems validate IOSS, at least by format and length? No, validation of IOSS number is the responsibility of the customs/tax administrations in the EU 27 countries. 2.3.2.34 Is the IOSS requirement for the platforms (as in Norway), or the individual shippers? The IOSS Scheme is for non-EU based businesses that sell to EU Customers. That could be the platform or the individual sellers. If the individual sellers are selling via a platform, the assumption is that the platform would manage the VAT/IOSS transactions. This is important as consolidated/combined shipments that exceed 150 EUR will not be able to use the IOSS Scheme and VAT will be collected at import/destination for shipments exceeding 150 EUR. 2.3.2.35 Customs Authorities mentioned that IOSS should be handled as confidential, to avoid that an IOSS number is misused by other sender. How will DHL handle the IOSS number? DHL (as well as other operators) does not have access to the database of IOSS Registrations. It is essential for the shipper to provide the IOSS number electronically as part of the shipment data (in the shipper’s VAT/Tax ID field). The Customs Authority will validate the IOSS number for each transaction. 2.3.2.36 If IOSS is not mandatory for Non-EU sellers, what’s the practical advantage the seller gets? There are many Pros and Cons of using the IOSS System, both for the Shipper and Receiver. DHL neither encourages nor discourages the IOSS Scheme for the moment. It should only be discussed on a factual basis as to what it is. The advantage for the seller is that he does not have to get VAT registered in each EU Member State if he sell DDP (shipper pays import VAT) and only sells shipments with a value not exceeding 150 EUR. Also, the receiver does not have to pay import VAT but know the exact costs of the ordered goods at the time of check out. On the other side, the IOSS Scheme generates a certain administrative effort, i.e. an intermediary has to be involved for non-EU established sellers. 2.3.2.37 Are we actively encouraging our customers to sign up to IOSS? DHL neither encourages nor discourages the IOSS Scheme for the moment. It should only be discussed on a factual basis as to what it is. This scheme is currently being evaluated and will be discussed by the GMB. Our current position is to remain NEUTRAL and Factual. 2.3.2.38 Can my customer register his IOSS in a low VAT country like Luxembourg whilst shipping to various EU Member States (the Amazon model)? Yes. The EU country of IOSS registration will be the country where the company who wants to register for IOSS is established or the EU country where the intermediary is established. Independent from the IOSS registration country the VAT to be charged at sales is the relevant VAT in the destination EU country. Hence, if the seller is IOSS registered in Luxembourg but the final destination country of the goods is e.g. Germany, the VAT rate of Germany applies and has to be paid by the seller via IOSS to the VAT Authorities in Luxembourg (who then transfer the collected VAT to Germany). 2.3.2.39 In regards to IOSS processing errors, would there be an option to validate locally if VAT was already paid and/or to process entry corrections to rectify the VAT responsible party? If shipper collected VAT at time of sale but did not include the IOSS number in the Invoice Data – there is a potential of duplication of VAT payment. Therefore, it is important to ensure that the shipper provides the IOSS number in the correct data field in the Commercial Invoice for each and every shipment. DHL is not able to validate locally if a seller already collected VAT (or not), or if the seller is using the IOSS scheme (or not). DHL depends on the information provided in the Commercial Invoice data. In addition, DHL can offer a Post Clearance Modification service when/if required (upon a service charge, in case the error was caused by the customer). DHL EXPRESS | INTERNAL FREQUENTLY ASKED QUESTIONS (FAQs) – UPCOMING EU REGULATORY CHANGES - FOR DHL INTERNAL USE ONLY Page 43
2.3.2.40 How will IOSS impact shipping excise goods? Will the buyer still be responsible for that payment or will that be calculated on selling? Excise goods are excluded from the IOSS scheme. For excise goods a standard clearance process has to take place and import VAT is levied at the time of importation. 2.3.2.41 Is it the seller's responsibility to collect VAT on orders not exceeding 150 EUR (goods' value) only, and not for the ones above? Yes, it is the seller who has to ensure that (if IOSS registered) VAT at the time of check out is only charged for orders not exceeding 150 EUR (goods value). For orders above 150 EUR, VAT will be levied at the time of import customs clearance in EU and it depends on the chosen DHL Billing Service who pays for it (either seller for DTP or receiver for DTU). 2.3.2.42 In the case of a DHL declares shipment without using IOSS (but shipper is IOSS registered). How will DHL resolve this issue? It will depend on the root cause of the error, i.e.: a) If due to DHL Error (e.g. DHL employee did not see the IOSS number on the shipment data): DHL refunds VAT payment, with or without a Post Clearance Modification (PCM) process depending on local Customs processes (and does not charge a PCM fee). b) If due to Customer Error (e.g. shipper forgot to indicate the IOSS number on the shipment data): DHL performs Post Clearance Modification (PCM) and charges a PCM fee. 2.3.2.43 How will undervaluation for IOSS shipments be handled? If the value is still not exceeding 150 EUR after Customs assessed the correct value of the goods, the initial customs declaration will be corrected. The correction of the VAT amount is the responsibility of the seller. If the value exceeds 150 EUR after Customs assessed the correct value, an import customs declaration with full data set will be lodged, and import VAT and customs duties will be collected. 2.3.2.44 For calculation of the eligibility for IOSS, should the VAT collected at check-out be included in the 150 EUR? No. In order to decide whether the shipment is eligible for IOSS (or not), the customer should use the value of the goods, and this value should neither include the VAT nor freight /insurance costs. 2.3.3
VAT Payment for Replacement/Returned Goods
2.3.3.1 Can IOSS be applied for returned goods? For return goods the IOSS cannot be applied (since the condition of the distance sales of goods is not fulfilled). 2.3.3.2 Should shipments containing replacement goods be subject to full VAT payment when entering the European Union (considering that VAT was already paid on the first/original shipment)? e.g. in case of replacement due to broken goods / clothes not fitting? Yes, shipments containing replacement goods are subject to full VAT payment. Please also note that if the original goods (i.e. broken goods / clothes not fitting / etc.) are subject to VAT, and if these goods are re-exported, VAT can be reclaimed.
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2.3.3.3 In regards to shipments imported into the EU and then returned to the shipper (outside the EU), is there an option for the shipper to get reimbursed for the VAT paid for the original import? The question covers different scenarios from a regulatory point of view. a) Return of goods under IOSS (where VAT is collected by the seller at the time of checkout): the seller will have to correct their IOSS VAT return and records. No involvement of DHL on the VAT side just the customs formalities applicable for return shipments. b) Return of goods with no IOSS (where VAT is collected by DHL at the time of clearance): DHL will return the shipment with a new Waybill where a cross reference to the original Waybill used for the import needs to be included. In order to extinguish the VAT payment obligation, the import customs declaration must be invalidated and reimbursement of VAT must be applied for. VAT can be reimbursed in case local criteria are met, and DHL may potentially charge for the service (i.e. Post Clearance Modification charge in case the correction was caused by the customer). 2.3.3.4 For a 'back-order' scenario: an online seller sells 3 pairs of shoes, but only 2 are available for shipping. The commercial invoice, reflects 3 pairs of shoes, and VAT is paid on 3 pairs. The 1 missing pair is shipped later. How would DHL handle this? The Commercial Invoice must always reflect the physical content of the shipment (for VAT & customs purposes). Therefore, in this scenario, the shipper should prepare 2 Commercial Invoices: for the first shipment (with 2 pairs of shoes), the Commercial Invoice should reflect those 2 pairs. For the second shipment (with 1 pair of shoes), the Commercial Invoice should reflect the 1 pair. In case this is not possible, normal customs declaration to be filed for the missing/late shipment. Post Clearance Modification can be applied for, in case it can be proven, that 3rd pair of shoes was missing in the first shipment (DHL charge may apply).
2.3.4
Customs Declaration for Low Value Goods
2.3.4.1 Are there going to be any changes in terms of Customs Declaration to Authorities of low value goods up to 22 EUR? ▪ Currently, low value shipments in the majority of EU countries below 22 EUR are cleared with a so called ‘Manifest Clearance’, where multiple low value shipments are grouped under one (1) declaration. ▪ ▪
With the EU decision to abolish the VAT relief as of July 1st 2021, all shipments imported to the European Union (EU) will require a FORMAL Customs Declaration (1 per shipment). Please find below an overview:
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*Goods Value: intrinsic value (the price at which the goods are sold, excluding transport and insurance costs, unless they are included in the price and not separately indicated on the invoice). It is important to note that the threshold applies to the value of the consignment, not to each individual item. ** EUR 22 De Minimis: please note that in certain EU Member States (e.g. BG), the De Minimis value is of €10 (instead of €22); other EU Member States (i.e. PL, FR, SE) have already decided to curb the use of this exemption to certain (mail) orders or in whole.
2.3.4.2 There is no longer a De Minimis shipment to EU as of July 2021, and every single shipment to EU will require a formal declaration, is it right? DHL Express can do formal clearance or consignee has to do or hire a broker to do? Correct, every shipment into the EU will require a formal declaration (excluding items listed under the European Commission’s definition of ‘Items of Correspondence’ – which are mainly letters, postcards and printed matters). Regarding who can complete the necessary customs formalities: yes, DHL Express can do the Customs clearance process (preferred option), or alternatively the Importer of Record can chose an own 3rd party broker. 2.3.4.3 Will the Formal Clearance process for low-value goods delay the transit time of goods? Formal clearance is already the current process for goods above 22 EUR, so DHL has very robust and stable processes to ensure a speedy and smooth customs clearance. The regulatory change is for goods up to 22 EUR, and potential delays might occur depending on the level of completeness & quality of the Commercial Invoice data provided by the shipper. 2.3.5
Super Reduced Data Set (SRDS)
2.3.5.1 What is SRDS? Currently, consignments of goods imported into the European Union (EU) that are below or equal to 22 EUR are exempt from VAT. This exemption ceases to exist on July 1st, 2021.Therefore, with the decision to abolish the VAT relief as of 2021, all shipments imported to the European Union (EU) will require a formal customs declaration. For consignments which value does not exceed 150 EUR (Intrinsic Value) a new type of customs declaration, known as Super Reduced Data Set (SRDS), may be used. The SRDS declaration can be used regardless of the VAT collection model used i.e. with IOSS or without IOSS. A SRDS DHL EXPRESS | INTERNAL FREQUENTLY ASKED QUESTIONS (FAQs) – UPCOMING EU REGULATORY CHANGES - FOR DHL INTERNAL USE ONLY Page 46
declaration requires the submission of fewer data elements than a standard import clearance, but is still a formal act of submitting a customs declaration. 2.3.5.2 What happens to goods that are valued at exactly 150 EUR? Would these qualify for SRDS? The wording of the legislation says: “the intrinsic value of which does not exceed a total of 150 EEUR per consignment“, so a value of 150 EUR would qualify as SRDS, as this is not exceeding the value threshold. 2.3.5.3 When we can start to lodge the SRDS? What about shipments started to deliver before 1st of July and arrive to EU after 1st of July? Goods picked up before 1st of July 2021 and arrive to one of the EU27 for customs clearance for free circulation after 1st of July 2021 may be cleared with SRDS if all conditions are fulfilled. 2.3.5.4 What do you mean by VAT ‘Simplified’ Declarations? SRDS (Super Reduced Data Set), i.e. the new customs declaration introduced for all goods not exceeding 150 EUR as a result of the VAT changes. SRDS is still a formal declaration, only it has a reduced number of data elements. 2.3.5.5 Is a Power of Attorney (POA) required in case of an Import Customs Declaration done using the Super Reduced Data Set (SRDS)? The Power of Attorney (POA) requirements are based on EU and local Customs rules, and the POA requirement is typically independent from the type of Customs Declaration. So yes, a PoA is generally required when filing a Super Reduced Data Set (for both, IOSS and non-IOSS transactions). 2.3.6
Services & Surcharges
2.3.6.1 After the abolishment of the 22 EUR De Minimis threshold, will DHL charge customs related surcharges such as Multi-line Entry or Bonded Storage? Yes, as per global business rules these surcharges may still apply although only for exceptional cases. 2.3.6.2 Will there be any new associated charges for handling/clearing IOSS shipments? The business model for the IOSS is currently being reviewed, and further details will be made available once finalized. At this point (May 3rd 2021), no additional charges are expected (only the ones that are part of the existing DHL Express Services & Surcharges portfolio). 2.3.6.3 Will DHL charge an administrative charge for DTU shipments where the VAT to be collected from the receiver is below 5 EUROS? No. Administrative charges such as Disbursement or Advance Payment will not apply for DTU shipments with VAT below 5 EUR. Only the VAT is collected. 2.3.6.4 Will any VAT Disbursement surcharge be applicable for IOSS shipments? DHL is not involved on VAT payment of IOSS shipments, therefore no VAT Disbursement surcharge applies. 2.3.6.5 Will DHL offer the DTP Billing Service in case of IOSS shipments? Yes, shippers will continue to have the option of selecting the ‘DTP’ Billing Service when creating a shipment to pay for additional Customs-related charges (when/if applicable), e.g. Bonded Storage, Multiline entry, etc. (if shipper wants an ‘all in’ experience for receiver / to avoid charges for receiver). NOTE: the usage of IOSS is independent from INCOTERMS being used. Please also note that INCOTERMS are different than DHL Billing Services. For additional information, please check the 28. EXP Customs Guidelines - INCOTERMS vs. BILLING SERVICES v0.2 21.01.2021 DHL EXPRESS | INTERNAL FREQUENTLY ASKED QUESTIONS (FAQs) – UPCOMING EU REGULATORY CHANGES - FOR DHL INTERNAL USE ONLY Page 47
2.3.7
Other Questions
2.3.7.1 What is EORI number? An Economic Operators Registration and Identification number (EORI number) is a European Union registration and identification number for businesses which undertake the import or export of goods into or out of the EU. Please see more info at: https://ec.europa.eu/taxation_customs/business/customs-procedures/general-overview/economic-operators-registrationidentification-number-eori_en 2.3.7.2 Is there any relation between EORI and IOSS? EORI stands for Economic Operators Registration and Identification number, which is a European Union registration, and identification number for businesses which undertake the import or export of goods into or out of the EU. Under the new rules as of 1 July, 2021, the requirement for EORI numbers remains. It is key to note however, that the EORI number is different from the IOSS number, i.e.:
EORI: The EORI number is provided as an identification number, unique in the EU, which is assigned by a customs authority for customs purposes to those wishing to trade. Therefore, the EORI number is needed by those, for example, who are importing, exporting or declaring goods. Usually for imports, the EORI is required for the declarant, Importer of Record and consignee. IOSS: The IOSS number is the number provided to a seller outside the EU, who has established themselves (or via a VAT representative/ intermediary) in the EU for tax purposes. This number is for VAT purposes only. The IOSS number allows sellers to pay VAT at point of sale, not at the time of import.
2.3.7.3 What is Goods Intrinsic Value? This is the value of the goods alone, and does not include other costs such as insurance, freight costs, import VAT etc. 2.3.7.4 Where Customs Authorities require a Proof of Purchase (or Proof of Payment) for goods sold as C2C (Consumer to Consumer), and the seller does not have the original Purchase Order/ Receipt of the original goods. What should be provided to Customs? If the goods were sold online between two individuals (e.g. Person to Person transaction), the payment receipt of the transaction shall be provided. If the shipment was a gift between two individuals (i.e. no financial transaction), Customs Authorities at destination will estimate the goods value and charge Duties/VAT if applicable (based on the estimated value). 2.3.7.5 Is there a plan for EU to place an ST (shipment intercept) checkpoint at origin for the undervalued flagged accounts so that origin verifies the Proof of Purchase before it gets to EU? Not at the moment, but DHL is working on a solution for the mid-long term to automatically pro-actively identify potential undervalued shipments & stop those at origin. 2.3.7.6 Why some B2C shipments from China to Europe are held to request consignee’s additional paperwork, while others are released by customs without any stop? Shipments can be stopped by authorities for multiple reasons, for example: due to potential undervaluation of shipments, e.g. if the shipper declares 5 EUROS for a cell phone that was sold for 300 EUROS; due to Customs’ internal Risk Assessment of shipments, e.g. depending on the goods description /shipper name /consignee name/etc. Customs considers the shipment to be a high risk and request a physical inspection or additional paperwork, etc.
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3.DHL ELECTRONIC SHIPPING SOLUTIONS (ESS) Please refer to Appendix C - Decision Tree for an overview on CFIT engagement. 3.1 Who is conducting the ESS Application calls per region? Lim Sze Looi and Miklos Muzik are conducting global CFIT country calls on a monthly basis. Regional Representatives are: AM: Gordana Licina APEC: Rajendra Sawant CN: Matthew Zhao EU: Peter Carlier MENA: Fadi Abdul Wahab SSA: David Nyambinya (CFIT) / Imtiaz GHANCHI (ESS) BREXIT-RELATED 3.2 Where should customers indicate the Proof of Origin statement when creating a shipment using one of the DHL’s Electronic Shipping Solutions (for goods that qualify for a Country of Origin Statement under the EU-UK Trade & Cooperation Agreement)? Please find below an overview, and also PDF documents embedded below with additional technical info (for additional information/clarification, please contact your local CFIT/ESS Team): Rules of Origin Rules of Origin Requirements - Integrated.pdf Requirements - EasyShip.pdf
ESS MyDHL+
Description Customers have to use the Invoice Remarks section (free text), to include the Proof of Origin statement (for shipments that qualify for the EU-UK Trade Agreement), i.e.: The exporter of the products covered by this document (0123456789) declares that, except where otherwise clearly indicated, these products are of CT preferential origin. Exporter Name
Instructions: please replace the red text with exporter’s registration number, country of origin (UK or EU) and the exporter’s name (company name or individual name, i.e. the one responsible for the statement – as per EU-UK TCA agreement). Please see question #10 (‘10. Who must apply for the preference?’) for more information about the Proof of Origin statement. Important: DHL EXPRESS | INTERNAL FREQUENTLY ASKED QUESTIONS (FAQs) – UPCOMING EU REGULATORY CHANGES - FOR DHL INTERNAL USE ONLY Page 49
- Characters Limitation: the Invoice Remarks section (free text) has a limitation of 199 characters. Therefore, if the length of the Proof of Origin statement exceeds that limit (e.g. due to a long exporter name), the customer must use its own Commercial/Proforma Invoice indicating the Proof of Origin statement. - Steps required to be able to edit the Invoice Remarks field: Customers using the “Step-by-Step” Shipment Creation Process Flow in MyDHL+ need to select the advanced invoice option which will appear on the right side of the screen after selecting the “Create Invoice” button. The text shown is: “Need to add other details or create and save invoice templates? Use our enhanced Customs Invoice”. Alternatively, customers can change the process flow to “All-in-One” Shipment Creation Process Flow (this process will always offer the customer the option to edit the Invoice Remarks field) by selecting this option under “My Profile → Manage MyDHL+ → Your Shipment Creation Process”. In both cases (i.e. Step-by-Step and All-in-One) the customer will be required to include the Proof of Origin statement in the Invoice Remarks field (for shipments that qualify for the EU-UK Trade Agreement) on a shipment by shipment basis. -
EDI
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XMLPI
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MyDHL API
EasyShip
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Ad-Hoc Shippers (without a DHL account) using MyDHL+ must use their own Commercial/Proforma Invoice indicating the Proof of Origin statement, or need to add the statement to the invoice after printing (only applicable for shipments from EU countries to GB, as GB is offering a different Ad-Hoc shipping solution). If the customer generates its own Commercial/Proforma Invoice document: customer must ensure to include the Proof of Origin statement when creating the invoice before submitting to DHL (if applicable). If DHL renders the invoice (on behalf of the customer) based on the EDI message: customer must ensure to include the Proof of Origin statement as part of the EDI message transmitted to DHL. For additional technical information, please see PDF document: Rules of Origin Requirements – Integrated.pdf If the customer generates its own Commercial/Proforma Invoice document: customer must ensure to include the Proof of Origin statement when creating the invoice before submitting to DHL (if applicable). If DHL renders the invoice (on behalf of the customer): customers have to use the ‘Invoice Declaration’ section (free text field) to include the Proof of Origin statement (content depends on coding in customer’s system). For additional technical information, please see PDF document: Rules of Origin Requirements – Integrated.pdf If the customer generates its own Commercial/Proforma Invoice document: customer must ensure to include the Proof of Origin statement when creating the invoice before submitting to DHL (if applicable). If DHL renders the invoice (on behalf of the customer): customers have to use the ‘Declaration Text M AN 300’ section (free text field) to include the Proof of Origin statement (content depends on coding in customer’s system). For additional technical information, please see PDF document: Rules of Origin Requirements – Integrated.pdf EasyShip has a button to customize the statement at the bottom of the invoice Customers have to click on ‘Customize Invoice Statement’ and then copy / paste the desired text for the preferential origin statement (if applicable) For additional technical information, please see the PDF document: Rules of Origin Requirements – EasyShip.pdf
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ELP
- ELP is not capable of adding a statement on Commercial/Proforma Invoice. - Therefore, the customer must ensure that the statement is indicated on the Proforma/Commercial Invoice based on the customer’s own internal processes (if applicable).
Emailshi p
- Emailship is not capable of adding a statement on Commercial/Proforma Invoice. - Therefore, the customer must ensure that the statement is indicated on the Proforma/Commercial Invoice based on the customer’s own internal processes (if applicable).
DHL Express Commer ce
- Customers can apply a Proof of Origin statement to invoices for specific shipments using the Rules feature. - The rule can applied based on various conditions such as SKU, Value, Country of Origin, Destination etc. - The rule is configured at: Settings > Rules > Action > Set Invoice Declaration Text - For additional setup information, please visit: https://dhlcommerce.zendesk.com/hc/en-gb/articles/900005098843Rule-to-add-statement-to-customs-invoice
COMMERCIAL INVOICE DATA 3.3 What do you mean by Commercial Invoice data? In order to ensure a smooth customs clearance process, it is essential that customers provide DHL with electronic Commercial Invoice data. Please see the section Appendix A - Commercial Invoice Data Elements where you can the minimum required Commercial Invoice data elements expected from customers for a smooth clearance process. 3.4 Is it sufficient if my customers provide Commercial Invoices using Paperless Trade (PLT)? In these cases we receive the invoice image electronically but not the actual data, please encourage your customers to also provide the actual Commercial Invoice data electronically. 3.5 How can customers provide Commercial Invoice data to DHL Express? Please find below an overview of how customers can provide Commercial Invoice data to DHL considering the various DHL Electronic Shipping Solutions (ESS), i.e.: MyDHL API/XMLPI ▪ Customs invoice data can be sent together with the shipment data, this way the customs clearance process can start immediately giving huge advantages in terms of lead time performance. In case if electronic customs data can be provided but not together with the shipment data, please engage country CFIT/ESS to evaluate on CIN Data Integration capability. Electronic Data Interchange (EDI) ▪ Customs invoice data can be sent together with the shipment data, this way the customs clearance process can start immediately giving huge advantages in terms of lead time performance. ▪ For EDI this can be done by utilizing: o FFTIN v4 or higher shipment manifest format. Customs invoice data can be passed in Invoice Section (FF0INV) and Line Item Records (FF0IVL) o FFRMIN v2 or higher. Customs invoice data can be passed in the Invoice Section (INVMIN) DHL EXPRESS | INTERNAL FREQUENTLY ASKED QUESTIONS (FAQs) – UPCOMING EU REGULATORY CHANGES - FOR DHL INTERNAL USE ONLY Page 51
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If for any reason the customs invoice data cannot be send together with the shipment data, a separate EDI message can be utilized. Currently DHL Express supports EDIFACT format CUSDEC D09B for this process. For destinations that support Paperless Trade, the image of the customs invoice can also be provided next to the customs invoice data. This caters for an end-to- end paperless customs clearance process. The invoice image can be send via FTP with at least the tracking number in the filename allowing a link to be made with the shipment and commercial invoice data set.
MyDHL+ ▪ You may create a customs invoice or use your own invoice as you create a shipment. Providing accurate and detailed ‘Line Item Description’ speeds up the customs clearing for your shipment. ▪ You may also create a customs invoice template for your specific business needs. You can select from your saved templates to retrieve filled-out invoice with shipment information. ▪ Sign-up for Digital Customs Invoices (Paperless Trade) to submit an image of your customs invoice to DHL Express. You can also upload additional documents needed by customs to evaluate and clear your shipment. Digital invoices can be set-up using ‘Shipment Settings’ or your can also enrol during shipment creation. Express Logistics Platform ▪ A DHL Administrator can setup the Customer Program so when you create a shipment, the customs invoice is created automatically for all legs, Supply (Leg 1), Collect (Leg 2) and Return (Leg 3). Paperless Trade can be enabled in this section too. ▪ You can also create the customs invoice while creating a shipment or upload your own invoice. Accurately filling-out the ‘Line Item Description’ is essential to speed up the customs clearing of your shipment. EmailShip ▪ You may fill-out the ‘Customs Document’ page of the PDF form as you prepare shipments. The information is transmitted to DHL when you email the form. ▪ Customs Invoice creation within the form is optional. However, it is preferred that customs related information are sent to DHL Express together with the shipment details to help speed up the customs processing of your shipment. EasyShip ▪ You may create customs invoice while creating a shipment and therefore enter all requires customs related data in the application. Alternatively, you could use your own invoice however; the necessary customs information will not be transmitted to the DHL network. You may enrol to Paperless Trade feature, which will allow you to send an image of your invoice to DHL Express. 3.6 If my customer is already integrated, is there anything I need to do? My customer already provides Commercial Invoice line item data electronically, but how can I check whether they send all necessary data elements such as full item description, HS code etc.? ▪ In case your customer already provides line item data electronically please check whether they send all necessary data elements (this can be investigated using OPMS – EFR report or C360 – ESS Failure Freedrill) and whether the line item description is sufficient to derive a HS code from it (in case not provided). DHL EXPRESS | INTERNAL FREQUENTLY ASKED QUESTIONS (FAQs) – UPCOMING EU REGULATORY CHANGES - FOR DHL INTERNAL USE ONLY Page 52
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Please liaise with your country Customer Facing IT Team in order to understand if customer is already integrated with DHL Express and providing sufficient data.
3.7 What if my Customer refuses to manually enter the Commercial Invoice data into our EasyShip system? In case the customer still refuses please ask them for the reason and what would make them provide the data electronically (different upload functions, further support in entering the data etc.). 3.8 What do we do if the Commercial Invoice data integration with my Customer is not ready by end of June 2021? In case your customer integration is not finalized by end of June 2021, please ensure that your customer provides, at least, the minimum Customs data elements required on a Commercial Invoice – please see Appendix B - Commercial Invoice Template. 3.9 For SME and telesales customers: Is MyDHL+ the solution to provide Commercial Invoice data? MyDHL+ is the target solution for all customers that do not want to integrate with us directly. It offers a variety of features and will guide the customer throughout the shipment creation process. 3.10 Validation of content description: could the goods description be deviated from the commodity code in our systems? Goods description provide by the customer are not always accurate. The commodity code is derived from the description and not the other way round. We need good quality descriptions so that we can determine the correct commodity code to be declared. 3.11 Do you know / can you share how the business will handle any non-compliant shipments? I presume shipments will be held in Customs until missing information is collected from Customers by our Country Gateway organization? Also, is there a grace period whereby Customers / Logistics partners can adjust to this new process or is July 2021 a firm date? Once the new legislation comes into force DHL and our customers will be immediately expected to comply. Any non-compliant shipments will be handled in the same manner as non-compliant shipments are handled in the network today. 3.12 Will there be any IOSS relation to DHL Billing Services selection in ESS tools? No, IOSS and DHL Billing Services are independent from each other. 3.13 Will Paperless Trade (PLT) be a supported and a viable solution for getting the Commercial Invoice data from the customer? Should we still promote this approach with customers or should we focus on integrated data transfers? Focus should absolutely be on getting the actual Commercial Invoice data electronically. PLT is good, but Commercial Invoice data is much better. 3.14 Have we ever thought about OCR solutions to read Commercial Invoice data? (So then PLT will flow seamless to electronic data). OCR will initially only be used in the OPS area for standard invoice templates or specifically selected customer templates. Once the OCR has proven to be accurate enough we will consider it for customer facing applications as well.
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3.15 "Customer providing additional data electronically”: does it mean customers need to start using an additional tool to pass on these data? Or it will be covered within MyDHL+ while creating a shipment? MyDHL+ has been upgraded to enable customers to provide line item data electronically also when using their own Commercial Invoice. 3.16 For the customer who DO NOT provide data electronically currently: can we package the standard DHL Electronic Shipping Solutions (ESS) options available to customers to encourage electronic on boarding - a specific customer info pack with the purpose of addressing EU customs changes? Please refer to the APPENDIX deck which you can download on the link below – there you can find an overview of the DHL Electronic Shipping Solutions (ESS) options of how customers can provide Commercial Invoice data electronically to DHL: https://www.certifiedreplenishment.com/home/ 3.17 If the tool to be used is MyDHL+, does it mean that customer has to prepare the commercial invoice or invoice all thru the DHL tools and not thru his own internal SAP tools? Customers can continue to use their systems / invoice. They should be encouraged though to provide us with the Commercial Invoice data electronically as well. In case they have SAP, they might integrate their system with DHL’s system to provide Commercial Invoice data electronically. Or provide via MyDHL+ during shipment creation once that option is available in future. Please refer to the APPENDIX deck – there you can find an overview of the DHL Electronic Shipping Solutions (ESS) options of how customers can provide Commercial Invoice data electronically to DHL: https://www.certifiedreplenishment.com/home/ 3.18 Have we considered making the fields required for customs cleared mandatory and validated in MyDHL+? We will only make fields mandatory that are absolutely required for customs clearance. Most of the new fields will be optional, at least in the beginning. This is to ensure there’s no major disruption to the customer shipping journey - e.g. HS codes will stay optional for now as most customers struggle to provide these. Instead we are working on automatically detecting HS codes based on goods descriptions. 3.19 Should my customer provide electronic Commercial Invoice data PLUS also provide documents (PDF copy) via PLT? Or just electronic Commercial Invoice data is enough? Electronic customs line data PLUS commercial invoice Image where PLT is enabled. Hard copy of the commercial invoice required where PLT is not available. Talk to your CFIT leads re shipping tool options that enable the Customer’s Commercial invoice data to be rendered to an Image (where PLT enabled). 3.20 Several countries require Tax Identification number for clearance purpose. Can we have MyDHL+ and other etools validating that information based on destination country format? The Commercial Invoice mask does cater for the possibility to add new Tax IDs (such as IOSS number). The DHL Electronic Shipping Solutions (ESS) applications will validate the respective format accordingly. MyDHL API will only validate on field length for now. 3.21 Is DHL Express also working with shipping platforms? For example magento, prestashop, wix etc.? Yes, all third party vendors are being contacted on the upgrade requirement. For specific vendor’s progress, please reach out to your country CFIT representatives. DHL EXPRESS | INTERNAL FREQUENTLY ASKED QUESTIONS (FAQs) – UPCOMING EU REGULATORY CHANGES - FOR DHL INTERNAL USE ONLY Page 54
3.22 Will all countries be expected to utilize Commercial Invoice line descriptions or will we continue to have two set of expectations: one at Waybill and one at Commercial Invoice line level? It’s essential to provide complete & accurate goods descriptions on both Waybill & Commercial Invoice. For the near term, there are two sets of descriptions – the contents of the shipment summarized for the Waybill and label (used for Security filings), and the Commercial Line Item Goods Description (used for Customs Valuation and declaration). In some cases it is possible to use the Line Item data to populate the contents of the shipment using concatenation, truncation and other data types. 3.23 Is it okay with my customer can only provide the first 6 digits of the HS code on the Commercial Invoice? The first 6 digits for both Export and Import HS Code is good; but if possible, we prefer customers to provide the complete set of HS digits for both Export & Import countries. 3.24 To what level is the HS code required 6-8 digit & how will a Customer know how to classify goods? (For example, my customer in Australia only knows how to classify the Australia Export HS Code). If possible, the Customer should be asked to provide the full Export Classification code for the Origin country, and the full Import HS code for the destination country as well. Having said that, HS code is currently optional from a DHL IT/Systems perspective, but customers should be encouraged to provide these. In the future (2023), Customers will be asked to provide the HS Code at shipment creation, as this is a regulatory requirement for a future phase of ICS2 for goods inbound to the EU. From a purely regulatory perspective: ▪ For VAT22: the regulatory requirement for the SRDS is a 6 digit HS code for shipments up to 150 EUR. This is a mandatory data element. The EU foresees that every vendor selling to the EU would need to learn the classification process for their goods/or use service provides (such as us or customs brokers) to provide accurate HS codes. In general, given that the HS code is a widely recognized standard, the HS code used for export clearance might be used for import. ▪ For ICS2: Externally, the regulatory requirement for the ICS2 is a 6 digit HS code if there is no goods description. However, if there is a detailed and accurate goods description, the HS code is not required. 3.25 If the Receiver and the IOR are the same entity, do we need to provide the information (i.e. name / address / contact info) twice on the Commercial Invoice data? No. If the Receiver and Importer of Record (IOR) are the same entity, we only need the information once. 3.26 What about if there are multiple items in the package, do we need to put HS Code of all items? Yes, each line item of the Commercial Invoice requires a HS code. 3.27 Will customers be able to send Commercial Invoice electronic data in his native language in accordance with the requirements of the local customs? Commercial Invoice is a document exchanged between us and the customer for clearance purposes. From this document, we gain the information needed to complete the necessary customs requirements. For this reason, preferably, this should be in English in order to facilitate our processes.
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Under EU customs law, customs documentation must be provided in a language accepted by national customs in the respective Member State. This varies from country to country. For example, a Member State may accept its national language, and English, whereas another Member State may only accept its national language. 3.28 Is providing commercial invoice data electronically mandatory for the customers? For any new customer, it is mandatory to provide electronic commercial invoice data as of 1 May, 2021. If an existing customer does not/cannot provide electronic Commercial invoice data to DHL Express, this may lead to impacts such as: Origin process impact to manually intervene and complete data entry. Meaning origin submission of data may not meet current cut offs impacting connections/uplift. Transit time impact- if ICS2 screening incomplete to load shipment to flight AND for the Clearance process- EXP/IMP. Refer to the internal Regional kick off deck for slide on benefit/impacts of good data. There is also a version of Customer benefit/impacts in the Customer facing deck. 3.29 If the customer provides his own invoice but no line item information, who will be responsible to check if line item are presented and who will be responsible to input the missing line item information? Ideally, we should ask customers to provide Electronic Commercial Invoice with line item data – this should always be our preferred approach/initial position when talking to every customer. Only providing Commercial Invoice hardcopy/paperwork with line item info (but not providing electronic line item DATA) is not ideal, since this might create additional operational processes and/or delays. 3.30 How do we manage if there's discrepancies between the image and data? Does one take precedence over the other, if yes which one will it be? The customer has to ensure that the information in the data and the image mage. Otherwise, the clearance of the shipment will be delayed and fines/penalties can be levied by the relevant Customs Authorities. This situation has to be avoided. Customer will be contacted in case it doesn’t match. WAYBILL GOODS DESCRIPTIONS DATA 3.31 Do you have a list with examples of acceptable/unacceptable Waybill goods descriptions? In general, a good Waybill Goods description should indicate: what the goods are for which purpose the goods are used, and what is made of The European Commission has published this document (which can be downloaded on the link below) including a list of examples:
https://ec.europa.eu/taxation_customs/sites/taxation/files/resources/documents/customs/customs_code/guidance_acceptable_goods_description_e n.pdf
3.32 Is “Returned Goods” an acceptable description? Returned goods is not an acceptable goods description, since it does not indicate what is inside the package. The description should indicate what is inside the package, e.g. shirts, belts, shoes, etc. 3.33 Would it be acceptable for a customer to use an HS code on the Waybill goods description in place of the text description? DHL EXPRESS | INTERNAL FREQUENTLY ASKED QUESTIONS (FAQs) – UPCOMING EU REGULATORY CHANGES - FOR DHL INTERNAL USE ONLY Page 56
No. It’s important that you provide a complete & accurate goods descriptions of the goods inside the package. In general, a good Waybill Goods description should indicate: what the goods are for which purpose the goods are used, and what is made of 3.34 What should I indicate in the Waybill goods descriptions in case of multiple items inside the package? In the case of multiple items inside the same package, the recommended approach for the Waybill description is to start with the highest value items of the shipment, and then describing the other items after that (and include as many as possible). 3.35 My customer indicated that, due to security concerns, they prefer to declare ‘electronics’ instead of indicating ‘mobile phones’ in the Waybill Goods Description in order to ‘hide’ high value goods descriptions. Is this fine? No. It’s essential to ensure the complete & accurate Goods Description indicating on the Waybill. The Waybill Goods description should indicate: what the goods are for which purpose the goods are used, and what is made of This position has been also confirmed by DHL Security function, in that the overarching guideline is to correctly indicate the goods inside as required, which in his view is not an issue from a DHL Global Security perspective. Everyone in the process ‘who wants to conduct a criminal act’ already understands very quickly what to look for or what is inside specific shipments from specific customers. Even without an exact description. Our policies, processes and protective measures are there to prevent it or quickly identify it, when it happens. Our customers can be assured we do everything possible to safeguard our customer’s shipments with a solid security and contingency program and measurements and a security min-set and culture as Security is Everyone’s Responsibility within DHL Express. 3.36 Would 'medical device' or 'medical equipment' be sufficient on the Waybill? No. ‘Medical Device’/’Medical Equipment’ is very generic and does not specify what is the actual equipment/device. Therefore, it is important to indicate exactly which ‘device’/’equipment’ is inside the package. This is an essential element from a Security Filing perspective, where authorities perform a risk-assessment based on a combination of several data elements, which includes goods descriptions. 3.37 My customer has a great line item goods description on the Commercial Invoice, but on the Waybill they simply indicate ‘Industrial Supplies’. Is this OK? No. ‘Industrial Supplies’ is very generic and does not specify what the actual product on the package is (e.g. pipes, screws, etc.) Therefore, it is important to indicate exactly what is inside the package. This is an essential element from a Security Filing perspective, where authorities perform a risk-assessment based on a combination of several data elements, which includes goods descriptions. 3.38 What is the maximum number of characters allowed on the Waybill Goods Description field? In general, the current DHL Express systems are able to handle up to seventy (70) characters. DHL EXPRESS | INTERNAL FREQUENTLY ASKED QUESTIONS (FAQs) – UPCOMING EU REGULATORY CHANGES - FOR DHL INTERNAL USE ONLY Page 57
3.39 What steps are being taken to validate the quality of the shipment content description when the AWB is completed? Chasing customers after the fact has proven to be difficult. In those Customer-facing applications that can manage real-time updates and validation (like MyDHL+) we are introducing the same keywords that are currently found in the Non-Doc Red List to prevent a Customer from entering poor quality descriptions at Shipment creation. This will also be true in EDI integrations, we will use the same logic used today in GSS (Global Shipment Screening) to filter out poor quality descriptions. Unfortunately, there are legacy systems that do not support this functionality and it will be important to follow up with offending Customers to correct the poor quality data issues. 3.40 What is our operational process to support the identification of the bad goods descriptions, and will our GSOP be update accordingly? We already have in place a weekly report (REDLIST Report) that identifies the shipments with bad goods descriptions, available on the link below, which the DHL Commercial Team can already use to identify non-compliant customers: https://isharenew.dhl.com/sites/GRPT/Shared%20Documents/Forms/AllItems.aspx?RootFolder=%2fsites%2fGRPT%2fShared %20Documents%2fReports%2fNONDOC%20Redlist%20Report %2fReports&FolderCTID=0x012000BE852354D8ADE848B6205530C2978C1D In the future, through the Global Shipment Screening (GSS) solution, DHL will be able to identify non-compliant shipments proactively. There will be a point at which shipments will be physically stopped in the flow if this compliant description is not achieved prior movement departure. This does not require a change in GSOP because even today’s GSOP Reference Guide Data Capture & Validation (attached) doesn’t allow “sample” or “gift” as valid descriptions and until the point where you define correctly the descriptions, you should not load the shipment. This is the general rule in place, but currently not fully enforced. OTHER ESS-RELATED QUESTIONS 3.41 Will these changes to MyDHL+ be applicable to the whole network when rolled out, regardless of whether the shipment is destined to the EU? These changes on our ESS applications are applicable globally as all these customs fields are valid globally 3.42 What if a customer don't want to give same details on MyDHL+ as he mentioned the same on his invoice, should he be able to get a label? We don't force customers using their own invoice to also enter the invoice data manually so yes they will be able to create a shipment without it as well. We should encourage these customers though moving forward to consider doing it to speed up customs clearance 3.43 Shipper’s Tax ID is currently filled by shipper’s VAT number that is required for export clearance purposes. If this field will be taken by IOSS number, what field is supposed to be used for shipper’s local taxpayer number? Some shippers will require to provide both. We didn't remove the existing shipper / receiver VAT fields - the shipment tax ID field is added in addition. To provide your Shipment Tax ID (e.g. IOSS), please refer to the ESS Guide available on the Certified Replenishment Portal (LINK) 3.44
Will there be a customer facing guide with screenshots explaining the changes to MYDHL+? DHL EXPRESS | INTERNAL FREQUENTLY ASKED QUESTIONS (FAQs) – UPCOMING EU REGULATORY CHANGES - FOR DHL INTERNAL USE ONLY Page 58
MyDHL+ user guide is available on DHL Express EU Customs Microsite under Useful Links: https://www.dhl-eucustoms.com/usefullinks.html . The user guide is available in English and other local languages ( Simplified Chinese, German, Spanish LATAM, Spanish (EU), French, Canadian French, Italian, Japanese, Korean, Dutch, Portuguese (EU), Portuguese BR, Russian, Vietnamese, Arabic).
3.45 Will Shipment File Upload option in MyDHL+ have a mapping to include Customs Declaration data? Customers would need to remap their current files Yes, the Shipment File Upload will cater for all the Global CI Mask data fields to be uploaded. 3.46 When customer enters invoice information via MyDHL+, for example and all mandatory data fields (8) are available, so does our system check if the provided information is correct or not, or we only need the information to be available. example: the EORI#/ VAT#/HS code is available but not correct We do validate certain fields, not all. Moving forward focus will indeed be on data quality so more fields might be validated. We'll keep everybody updated on this 3.47 What happens if a customer cannot provide insurance and freight breakdown to the value? Only if customers have this information they should provide. Otherwise they can skip this and simply provide the goods value. We assume there are no additional charges. 3.48 Can customers set default settings regarding the new customs clearance fields in MyDHL+? In the Shipment Settings, customers can set default settings for some fields (e.g. IOSS), or set an invoice template. The user guide is available under the following link. 3.49 Will MyDHL+ use PLT to transmit the images? PLT section/process will remain as is. 3.50 Will the upgrade to MYDHL+ include the global HS Code that customers can identify and choose based on the description of their goods There is already a lookup function for HS code. We have on the roadmap an enhancement of this function but it will not be available soon. 3.51 Will we be able to extract Commercial Invoice data from MyDHL+' shipments through ADT reports (CI generated in MyDHL and also the data inputted by customer using its own CI), as we have for regular shipments nowadays? If the customer used MyDHL+ to create their invoice, you may get the information in MyDHL+ ADT Reports, report name: “MyDHL+_Customs_Invoice_Detail_Report_Shipper Country”. 3.52 Why now a 'this is a business check box' if we have already have a residential check box? The residential checkbox is tied to a charge code. The Business checkbox is a new Commercial Invoice field. A business may be at a residential Address where you ship from / to. 3.53
How do we control the quality of content description by ESS automation?
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Improvement of data quality of certain elements (e.g. shipment description) is being worked on separately but is included in our roadmap. For MyDHL+ it's already planned to guide the customer a bit more when entering a shipment description for dutiable shipments. 3.54 Will the booking tools pull through the local EU VAT %'s for the customers to charge at Point of Sales? Our shipping solutions will not calculate local VAT for customers, it will be up to the customer to add VAT to the price of their products. Pricing brought forward from the shipping tools will relate to the shipping costs 3.55 For B2C customers will the necessary tools like MyDHL+ be updated to reflect and prompt to include the IOSS registration number? Yes the tools will be updated with additional fields to be compliant for VAT 22. However not all fields will be mandatory but rather will be available for customers to use if needed. 3.56 For Co-loaders: Should they fill in Shipper name (Customer Detail) or account name (Co-loader detail)? DHL and Customs authorities expect and require shippers to declare the complete and true shipper & receiver information (name/address) in the shipment documentation. The true shipper must be different to the carrier, freight forwarder, consolidator, postal operator, or customs agent (and other party providing services along the supply chain), and must be the party shown on the Waybill. Shipments sent via Co-loader / Re-seller / Sales partner must show the party that ultimately sends the shipment as Shipper (i.e. the party that originally initiated the export, in most cases it is the co-loader’s customer). Co-loaders are parties providing services along the supply chain and therefore are not considered as the True Shipper and cannot be manifested as Shipper on the Waybill and commercial invoice.
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4.APPENDIX Appendix A: Commercial Invoice Data Elements A complete & accurate Commercial Invoice shall include (at very least/minimum) the following 8 key information categories outlined below:
#
1
Topic
Involved Parties
Data Elements Category
Shipper & Exporter of Record (EOR) Receiver & Importer of Record (IOR)
Example
WHY is this important?
Shipper & Exporter of Record (EOR): John Shipper | Road Name, No | Zip Code | Country Receiver: Paul Receiver | Road Name, No | Zip Code| Country
Legally required for security filing and as part of a compliant customs declaration.
Importer of Record (IOR): Tom Importer | Road Name, No | Zip Code| Country
2
Contact Details
Contact (e-mail, mobile number)
John.Shipper@email.com | +12 3456789 Paul.Receiver@email.com | +98 7654321 Tom.Importer@email.com | +45 6478391
To contact in case of missing paperwork / information, avoiding clearance delays so we can clear customer shipment as quick as possible.
3
Parties’ Registration Numbers
Registration Number Type Issuing country
Number: 12345678910 Type: EORI Number Issuing Country: Belgium
Critical info for DHL to clear the shipment (i.e. tax & customs registration of the parties involved). If customer wants to use a shipper VAT collect model, DHL requires the shipper’s VAT Registration (e.g. IOSS, LVG, OSR), otherwise VAT potentially is charged twice.
4
Type of Transaction
Type (Business / Private) Reason for Export
Type: Private or Commercial , B2C or B2B Reason for Export: Repair and Return
For compliant customs clearance and to ensure the correct DE Minimis threshold and duty exemptions are applied.
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5
Goods Item Information
6
Value Information
7
Weight
8
Document Reference
Line Item Goods Description (in English) Line Item HS Code for Export / Import (if available) Line Item Country of Origin Line Item Quantity and Measure Goods Line Item Value & Currency Total Other Monetary Amount Total Freight Value & Currency Total Invoice Value & Currency Incoterm and Place
Sunglasses with lenses optically worked 9004.10.XXXX* (*last digits are country-specific) China 3 units (sunglasses)
Legally required for security filing and as part of a compliant customs declaration.
Goods Line Item Value: US$150 (x 3 units) Insurance: US$ 25 Total Freight: US$ 50 Total Invoice: US$ 525 Incoterm: EXW Place: Shanghai / China
Legally required for as part of a compliant customs declaration.
Total Gross Weight & Unit
0.5 kilograms (KG)
Legally required for security filing.
Customs Document Type and ID Customs Document Date
Type: Commercial Invoice | ID: 98765543 Date: July 1st 2021
Legally required for compliant customs declaration.
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Appendix B: Commercial Invoice Template
COMMERCIAL INVOICE SENDER
GENERAL INFORMATION
Company Name:
Date:
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Appendix C: Decision Tree
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Appendix D: IOSS Flow IMPORTANT: DHL requires (mandatory) the shipper to provide the IOSS number on the shipment electronic data, in the Tax ID data field indicated in the document: APPENDIX – Where to Indicate the IOSS Number (available on the Certified Replenishment portal LINK)
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Document’s Version History Version
Release Date
Remarks/ Comment
0.1
September 2020
Initial Version.
0.2
October 2020
Updated with additional Q&As.
0.3
February 2021
Updated with additional Q&As.
0.4
May 2021
Updated with additional Q&As.
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