EU-UK: Trading Alcoholic Drinks
Opening remarks by HMTC Richard Burn Checklist: ✓ Prepare to import goods from the EU to Great Britain from 1 January 2021: https://www.gov.uk/prepare-to-importto-great-britain-from-january-2021 ✓ Prepare to export goods from Great Britain to the EU from 1 January 2021: https://www.gov.uk/prepare-to-exportfrom-great-britain-from-january-2021 ✓ Establish and agree Incoterms and conditions; decide how you are going to make customs declarations. ✓ Trade Tariff: look up commodity codes, duty and VAT rates: https://www.gov.uk/trade-tariff ✓ EORI numbers: • GB Importers and exporters must have an EORI number issued by the UK • EU importers and exporters must have an EORI number issued by an EU Member State (EORI numbers issued by UK will not be valid in the EU following the end of the transition period) • GB haulier will also need an EU EORI if they are, for example, the responsible entity for entering ENS data into a MS Import Control System (ICS) for accompanied freight
Case Studies: Excise Goods HMRC
1b. Heather has asked Mark to arrange for the release of the whisky from the distillery / warehouse. The excise movement guarantee is to be provided by Mark who is also stock account holder in the London excise bonded warehouse. He is also the transporter of the goods from distillery to bond in London and bond to port. 2a. Mark makes the removal from the distillery and loads the trucks for departure to the bond 2b. He makes the entry into UK EMCS and produces the electronic Administrative Document (e-AD) and leaves the distillery for the London bond. 2c. He has made a booking for the ferry transport and he has a booking number.
Case Study 3 : GB - BE exporting (non transit) of Scotch whisky from Dumbarton via bonded warehouse in London from an inventory linked port to the Port of Zeebrugge via a ferry line to a tax warehouse in BE - 1 Jan 2021 - unaccompanied freight
5. Mark checks the trailer in at the port with his booking number.
3. On arrival at the London bond, the whisky is entered into Mark’s stock account. Mark is to immediately ship 1 container from GB to Zeebrugge. Mark raises a new e-AD in UK EMCS for that 1 container to cover bond to port. Mark again uses his excise movement guarantee for this part of the movement. Mark has also lodged an export declaration in CHIEF for the export movement to evidence the export from GB port to Zeebrugge. 4. CHIEF has issued the P2P following risk analysis and the goods arrive at the port for export
Luc – spirits buyer and authorised consignee in Brussels
Heather– spirits distiller and tax warehouse keeper Mark – customs agent / trailer operator and registered consignor/ee
Ferry operator (FO)
HMG PLDA (PaperLess Douane en Accijnzen)
1a. Luc has placed an order for whisky and he wants to place the whisky in a tax warehouse in Brussels.
6. Manifest is sent by FO to port / CHIEF via the CSP before the ferry sets sail
7. Port inventory system automates the ‘departure’ message to CHIEF as the manifest has been checked - the ferry has left GB and these procedures also discharge the excise movement from UK EMCS
8. The ferry operator sends an ENS to PLDA, followed by a cargo manifest (= temporary storage declaration/TSD). 9. PLDA will perform an automated S&S risk analysis on the ENS.
Unaccompanied freight 10a. Departure confirmation is sent to the Port of Zeebrugge(PoZ). 10b. PoZ sends the notification of arrival of the ship to PLDA which “opens” the TSD for write-off
Tax warehouse Brussels
11a. Mark lodges an import declaration in PLDA followed by an e-AD in EUEMCS, allowing the goods to be transported under excise suspension to the tax warehouse in Brussels. 11b. Mark discharges the customs liabilities via his deferment account and bills them to Luc. 11c. Mark also includes Luc’s BE VAT number and VAT deferment account in the declaration. The liabilities will move to Luc’s account * If Heather was delivering duty paid, she would need a BE fiscal representative OR ask Mark to act on her b ehalf 13. Luc now registers the goods in his stock accounting system for the tax warehouse in Brussels. This ends the EU EMCS movement
12. PLDA performs an automated risk analysis (fiscal) and, in case of green light, sends the release message to Mark, who may collect the consignments and drive from Zeebrugge to the tax warehouse in Brussels.
Case Study example: Exporting Belgium beer (unaccompanied freight) from Mechelen via the Port of Zeebrugge to Tilbury (from 1 Jan 2021 : export - import procedure) 11. Heather has requested that the goods are placed in duty suspension in a tax warehouse in London. Goods clear customs and immediately enter excise duty suspension. An excise Registered Consignor is required (usually the customs agent or receiving warehousekeeper) to lodge the UK EMCS movement and generate the eAD. Heathers movement guarantee is used to cover the movement from port to warehouse.
9. Pre entry declaration completed by customs agent prior to arrival in all cases CHIEF automates the entry number (ENO) when the pre-declaration is created. Heather, who has purchased the goods can either: a. Pay customs duty and excise duty at the Border OR b. Suspend both the customs and the excise duty and move the goods into a customs warehouse authorised to store excise goods. OR c. . Pay customs duty and suspend excise duty and move the goods into Excise warehouse* In this example, the goods are to be entered using c. and have been imported into Tilbury.
9 12. Once at the warehouse, the UK EMCS movement is discharged, Heather pays the relevant duties and VAT on account as she wants to remove the beer for onward delivery – and the haulage company has arrived to collect the beer and deliver it across the network of GB supermarkets.
10. Port inventory system automates the ‘Arrival’ message to HMRC systems (at inventory linked locations)
Luc – beer distributor in Mechelen Heather – supermarket buyer / UK logistics company inc UK haulier / customs agent
6. Frank’s driver delivers the trailer to the port and communicates his booking number 7a. Notice of arrival is sent to PLDA by the terminal operator via mentioning of the trailer ID and the MRN (or MRN’s if more than one shipment on the trailer) => pairing of Export Dec to trailer in PLDA 7b. The loading report is lodged by the cargo handler 7c. The export manifest is lodged by the shipping company into PLDA. 7d. The Notification of Departure is sent by the port authority to PLDA
Frank – includes customs representation and logistics
Carrier / Inventory Linked Port HMG PLDA (PaperLess Douane en Accijnzen)
In this example, Luc is exporting beer from the EU. These are excise goods would need additional controls on arrival including an entry into UK EMCS.
8. Exit confirmation is sent to Frank by PLDA. This message also closes EU EMCS.
1. Luc runs a brewery / beer distribution company in Mechelen he receives an order from Heather, a buyer for several large GB supermarkets for 20 separate consignments of specialist Belgium beer 2. Luc has already taken the necessary steps for authorisation (e.g. registering for an EU EORI number, and is registered with RX Seaport and the brewery had approval of the production facilitythey also have a movement guarantee and a registered status on SEED and EU EMCS 3. Luc has contracted Frank’s Logistics company to move the goods and complete the export formalities – they also have a movement guarantee, both are registered on SEED
4. Frank has placed an order with the shipping company and is using the RX Seaport Port Community Service - he receives a booking number
5a. Luc makes an entry into EU EMCS and get’s the e-AD export to move the goods to the Customs Office of Export (= Mechelen). 5b. Frank submits the Export Declaration to Customs (PLDA) indicating Mechelen as Office of Export and referring in this Export Declaration to the e-AD (so e-AD is paired to the Export Dec). He receives the unique MRN number of the Export Dec. He communicates this MRN to the shipping company together with his booking number.
Questions & Answers
VAT: Exports and dispatches: from 1 Jan 2021 • Goods moved from Great Britain(GB) to the EU become exports. • Goods moved from Northern Ireland(NI) to the EU continue to be dispatches. • For goods being sold from NI to the EU the existing intra-community rules will remain and B2B supplies will be zero-rated as dispatches. • NI to EU B2C supplies of excise goods require the seller to register for VAT in the place of consumption with no threshold, the movement of the goods being a deemed supply of the transfer of own goods. • For exports from GB to the EU, goods will be zero rated whether excise goods or not. OFFICIAL
VAT: Imports and acquisitions: from 1 Jan 2021 • Goods moved from the EU to GB become imports, and are no longer acquisitions, so import VAT (not acquisition VAT) will be due. • Acquisition VAT will continue to be due on goods moved from the EU to NI. • Postponed VAT accounting (PVA) will be introduced. • PVA is available to UK VAT registered traders who import goods into GB from anywhere outside the UK, or into NI from outside the UK and EU. • PVA allows UK VAT registered traders to account for and recover import VAT on the same VAT return. • Other existing means of paying import VAT are also available. • Non-VAT registered traders will pay import VAT when they make their customs declaration. • Different rules apply to imported goods not exceeding £135 in value (excluding excise).
Postponed VAT accounting (PVA): General • Traders do not need to be authorised to use PVA. • PVA is selected on the customs declaration, and the trader’s EORI (CHIEF users) or VAT Registration Number (CDS users) is entered. • An online monthly statement is generated, which the trader will be able to access and download. It contains the information the trader needs to complete their VAT return. • Non-established taxable persons (NETP) are entitled to use PVA. In order to import goods into the UK, a NETP will need to hold a UK EORI, and instruct an agent to make the customs declaration on its behalf. • Use of PVA is normally optional, but as its use is highly beneficial to traders’ cashflow we expect the large majority to use it. OFFICIAL
Postponed VAT accounting (PVA): Excise • PVA can be used when imported excise goods are released for home consumption. • This includes when goods are released from an excise warehouse after being in duty suspense since the point of import. • PVA can be used for excise goods of any value.
Changes to removals of goods from excise warehouses: Alcohol and Tobacco Warehousing Declarations (ATWD) • Accounting for VAT on goods removed from excise warehouse from 1 Jan 2021: o VAT is payable: This will apply to UK supply VAT, and to any payment of import VAT where PVA is not used. o Acquisition VAT: This will continue to apply to goods brought into NI from the EU. o PVA: If selected this will apply for goods imported into GB from the EU; or into GB or NI from outside the UK and the EU. • Goods entering GB from the EU before 1 Jan 2021, and released from duty suspense in an excise warehouse on or after 1 Jan 2021 will continue to be subject to acquisition VAT. • As no online PVA statement is generated, the trader must ensure that they retain evidence of how they calculate the value for the VAT declared, to complete their VAT return. OFFICIAL
Questions & Answers
New rules and regulations DEFRA
Wine & Alcohol Webinar Agenda 1.
Food & Drink Labelling
2. Wine Labelling 3. Geographical Indications 4. Marketing Standards
5. Export Inspection Arrangements GB-EU 6. Organics 7. Wood Packaging Materials
8. Q&A Please note that the information in this presentation is correct as of 17/12/2020, but may be subject to change. For the late st information please visit the .gov website.
Food Labelling For an overview of the actions food and drink businesses may need to take, visit here For food labelling specific guidance, visit here Placing food on the GB and NI markets • Guidance on food and drink labelling changes from 1 January 2021 is available here. • You’ll need to make any required labelling changes for goods sold in GB by 30 September 2022 • Goods sold in NI will continue to follow EU rules for labelling, but you may need to make some labelling changes. However, the UK Government recognises that businesses will need time to adapt to these new labelling rules • Your label can contain other information if you need to comply with labelling requirements for another market Importing GB food to the EU Market • The European Commission issued advice in its notice to stakeholders, Withdrawal of the UK and EU food law, on the changes required to food labels for the EU market • Based on this notice, UK businesses will need to make the required changes to food labels in order to place food on the EU market as soon as the TP has ended • GB exporters are advised to seek advice from EU importing contacts
Food Labelling Food business operator (FBO) addresses for goods marketed in the UK: •
Until 30 September 2022, you can continue to use an EU, GB or NI address for the FBO on prepackaged food or caseins sold in GB.
From 1 October 2022, pre-packaged food or caseins sold in GB must include a UK address for the FBO. If the FBO is not in the UK, include the address of your importer, based in the UK.
From 1 January 2021, pre-packaged food or caseins sold in NI must include a NI or EU FBO address. If the FBO is not in NI or EU, include the address of your importer, based in NI or the EU.
Food Labelling For UK food placed on the EU market, at the end of the Transition Period, the following changes will take effect immediately: •
Country of origin labelling: it will be inaccurate to label GB food as origin ‘EU’. Food from NI can continue to use 'origin EU'. Food from NI should be labelled 'UK(NI)' or 'United Kingdom (Northern Ireland)' where EU law requires member state. The EU organic logo: As the EU has recognised UK control bodies, operators may continue to use the EU organic logo on GB organic food or feed until 31 December 2021. The EU organic logo will be optional. If used, it must meet the EU organic labelling requirements and statement of agricultural origin.
The EU emblem: must not be placed on GB produced goods except where the ongoing use of the emblem after exit day has been authorised by the EU.
Food Business Operator addresses: pre-packaged food and caseins must have an EU or NI address, or an address of the EU or NI importer on the packaging or food label.
For more information on EU labelling requirements for pre-packaged food and caseins, visit here.
Wine Labelling Changes - Name and Address of Bottler/Importer For wine marketed in GB: â&#x20AC;˘ You can continue to use the name and address of an importer, or bottler in the case of bulk wine imports, based in the EU, GB or NI on the label for bottles of wine marketed in GB until 30 September 2022. â&#x20AC;˘ From 1 October 2022, wine marketed in GB must be labelled with the name and address of an importer or bottler located within the UK. For further information on wine labelling, visit here.
Wine Labelling Changes – Reverse Epsilon Marking For wine marketed in GB: • To rationalise the number of conformity markings under UK regulations the UKCA marking will replace the reverse epsilon, which is currently required on aerosol containers and measuring container bottles to denote compliance with EU regulations. • Reverse epsilon is a self-declaration of conformity with EU regulations. Measuring Container Bottles must still have a conformity mark. The UKCA mark will replace the reverse epsilon ‘Э’. • We have agreed to a period of ‘standstill’ whereby for 12 months after the end of the Transition Period, the reverse epsilon will still be accepted on the UK market, but only until end 2021. From 1 January 2022 the UKCA marking will be the marking to denote conformity with UK regulations for sale on the UK market.
For further information on product safety and metrology, visit here.
Wine labelling EU-GB â&#x20AC;&#x201C; still wines
Information on wine bottle labelling can be found on the website of the Food Standards Agency (FSA).
Wine labelling EU-GB â&#x20AC;&#x201C; still wines
Wine labelling EU-GB â&#x20AC;&#x201C; EU sparkling wines
Geographical Indications (GIs) • •
The UK Government will establish new UK GI schemes on 1 January 2021. All existing UK products registered under the EU's GI schemes by the end of the transition period will remain protected under the UK GI schemes. The new UK GI logos are available to download on GOV.UK and can be used from 1 January 2021. Producers of GIs registered before the end of the transition period, that are required to use the UK GI logos, will have until 1 January 2024 to adopt the logos. The logos will remain optional for producers outside of GB. All UK GIs registered under the EU GI schemes at the end of the transition period to continue to receive protection in the EU.
Geographical Indications (GIs) â&#x20AC;&#x201C; Q&A Q: Will EU products be protected in the UK? A: We of course intend to honour our legal obligations under the Withdrawal Agreement. Q: Can I use both the UK and the EU logo on my product? A: GI products that are protected under both the UK and EU schemes will be able to use both the UK and EU logos when the product is on sale in the UK. They will also be able to use both logos when the product is on sale in the EU, provided that this is not prohibited by EU regulations. Why is there a 3-year adoption period for the logos? A: This is based on research that a three year period reasonably allows businesses to incorporate labelling changes within their normal labelling cycles, to the point that the cost burden reduces by around 95% (compared with an immediate change requirement). As such a three year adoption period is assessed to have a negligible net business impact. This proposition was supported by the majority of GI stakeholders in our autumn 2018 public consultation.
Marketing Standards • •
• • •
Marketing standards inspections will continue after the end of the transition period but will be managed to minimise delays at the border and disruption to trade flows. The UK has not and will not be making any substantive changes to current EU marketing standards on 1 January 2021. However, as we become a third country in EU terms, there will be changes to certification processes or other documentation requirements for import and export of fruits & vegetables, hops, wine, beef & veal, eggs, hatching eggs & chicks and poultry meat. The UK Government is working to ensure that, as we become a third country at the end of the transition period, this does not lead to any unnecessary marketing standards restrictions to trade with the EU. This principle has guided our approach to EU goods entering the UK. Specifically, the EU will either be listed as a third country from 1 January 2021, or there will be a defined period during which EU goods can enter the UK based on existing intra-community marketing standards rules. The marketing standards requirements will be different for each product so check the specific guidance for the product you’re importing.
Marketing Standards • • •
The EU has indicated that it will list the UK for marketing standards requirements by the end of the year and we will be holding them to that. These third country listing requirements will be necessary whether or not there is an agreement with the EU on an FTA. Goods being moved from GB to NI will have specific marketing standards certification and inspection requirements. Further information will be provided when available. There will be no change to the marketing standards requirements for moving goods to GB from NI. There will also be no changes to marketing standards requirements for goods moving from NI to the EU, and from the EU to NI.
Marketing Standards – Wine Imports from the EU to GB • VI-1 certificates will not be required for EU wine imported into GB from 1 January 2021 to 30 June 2021. Exports from GB to the EU • EU requirements for certification of wine exports from GB are subject to ongoing negotiation and responsibilities of GB exporters will be confirmed as soon as possible. Current Status of exports from GB to the EU (as of 17/12/2020) • The UK is no longer a member of the EU and will be classed as a third country from 1 January 2021. • Consignments of wine exported from GB to the EU or those moved to NI will be subject to EU third country requirements for wine, which include having an EU VI-1. • GB exporters will need to apply for a VI-1 certificate from the Department for Environment, Food and Rural Affairs (Defra). Guidance on how you can apply for an EU VI-1 will be published on GOV.UK. • There are some situations where you do not need a VI-1 to export wine from GB to the EU, read more here. For further information on the import and export processes for wine, visit here.
Marketing Standards â&#x20AC;&#x201C; Wine Exporting wine from NI to the EU â&#x20AC;˘ There will be no change to the marketing standards requirements for exporting wine to the EU from NI. Businesses in NI will not be required to provide VI-1 documents for exports to the EU. Importing wine from the EU to NI â&#x20AC;˘ There will be no change to the marketing standard requirements for importing wine from the EU to NI.
For further information on the import and export processes for wine, visit here.
Export Inspection arrangements GB-EU Defra will be required to certify that the wine complies with EU regulations and has been produced using winemaking practices which are either or both of the following: 1.
Recommended and published by The International Organisation of Vine and Wine
Authorised by the EU
The Food Standards Agency (FSA) and Food Standards Scotland (FSS) are responsible for the inspection and registration of wine exporters.
You’ll need to have registered with the FSA’s Wine Standards Team or with FSS before you apply to Defra for a VI-1.
After registering with the FSA or FSS you’ll receive a WSB number. You will need to provide your WSB number to Defra when you apply for a VI-1.
For more information on obtaining a WSB number and VI-1, please visit here.
Organics - Equivalence •
To ensure a smooth transition process, the UK in respect of Great Britain (GB) will recognise the EU, Norway, Iceland and Liechtenstein as equivalent for the purpose of trade in organics until 31 December 2021.
The six UK organic control bodies have now been recognised by the EU as equivalent until 31 December 2021.
This means that trade organic products can continue between the UK and EU in 2021.
The UK Government proposed an organics equivalence agreement, as a technical annex, in its Comprehensive Free Trade Agreement (CFTA) proposals. Equivalence agreements for organic products, such as the UK has proposed, are a common tool in international trade.
Although the EU has recognised the individual UK control bodies, it remains our objective to negotiate a durable, long-term organics equivalence agreement with the EU.
Organics – Northern Ireland and Organic Equivalence •
In regards to organic goods, Northern Ireland (NI) will continue to follow EU regulations.
NI can continue to move organic goods to the EU and GB, as they do now.
Organic goods sent to NI from third countries will be required to provide a Certificate of Inspection (CoI) using the EU’s Trade Control and Expert System New Technology (TRACES NT) system.
Organic goods moved to NI from GB will be required to provide a Certificate of Inspection (CoI) using the EU’s Trade Control and Expert System New Technology (TRACES NT) system.
The EU has confirmed control bodies established in NI can continue to certify NI organic businesses.
Organics – Imports into GB • • • • • • •
All imports from third countries, except from the EU, Norway, Iceland, Liechtenstein and Switzerland, must be accompanied by a GB Certificate of Inspection (CoI) from 1 January 2021. Imports from the EU, Norway, Iceland, Liechtenstein and Switzerland will be required to be accompanied by a GB COI from 1 July 2021. From 1 January 2021, we will use a paper-based import system for all imports. This is the same system previously used in the EU until 2017. This is a temporary solution that will be replaced with an electronic system when available. Control Bodies in third countries must continue to endorse the CoIs before the consignment leaves the third country. However, transport documentation can be provided after the CoI has been endorsed, but it must be received before the consignment can be cleared in GB. Importers must ensure that all organic imports from third countries meet the requirements laid out in retained Commission Regulation (EC) No 1235/2008. The CoI will need to be endorsed when the organic goods arrive either at an appropriate GB border control post (BCP) or by local trading standards. If the consignment needs a physical check or testing, the consignment will need to go to a port that is able to carry out these checks. Further information can be accessed via the Defra step by step guidance.
Wood Packaging Material •
From 1 January 2021 all wood packaging material moving between GB and the EU must meet ISPM15 international standards by undergoing heat treatment and marking.
This includes pallets, crates, boxes, cable drums, spools and dunnage.
Wood packaging material may be subject to official checks either upon or after entry to the EU.
As there will be no immediate change to the biosecurity threat of wood packaging material originating from the EU at the end of the Transition Period, the UK will maintain its current risk based checking regime for EU wood packaging material.
Please note that some articles of wooden packaging materials are generally regarded as being of sufficiently low risk to be exempt from ISPM 15 requirements. Please the Defra resource here for more information on this.
More information can be found on the gov.uk website here.
Questions & Answers
Closing remarks Further Resources: HMRC Transition Period Checklists: https://www.gov.uk/government/publications/hmrc-brexit-transition-communications-resources Prepare to import goods from the EU to Great Britain from 1 January 2021: https://www.gov.uk/prepare-to-import-to-great-britain-from-january-2021 Prepare to export goods from Great Britain to the EU from 1 January 2021: https://www.gov.uk/prepare-to-export-from-great-britain-from-january-2021 Border Operating Model: https://www.gov.uk/government/publications/the-border-operating-model EU Transition Trader and Industry Forum: https://transition-forum.service.cabinetoffice.gov.uk/ Haulier guides (available in multiple languages): https://www.gov.uk/guidance/transporting-goodsbetween-great-britain-and-the-eu-from-1-january-2021-guidance-for-hauliers