The government has said it will be removing a commodity code requirement for export declarations submitted via the Customs Declaration Service (CDS).

The change will apply to those submitting export declarations under the Export Memorandum of Understanding (Export MoU) via CDS.

The government agency has said that it is giving advanced notice so that traders can take action and plan accordingly.

The change will take effect from today after which a commodity code will no longer be needed, providing the supplementary declaration is submitted through CDS.

HMRC says that those using the old Customs Handling of Import and Export Freight (CHIEF) system do not need to take any further action.

The Export MoU is a measure agreed to between the government and the express delivery industry, described by HMRC “as an easement for low-value post and parcel exports travelling from Great Britain and Northern Ireland”.

It is frequently used by Fast Parcel Operators (FPOs) and reduces the amount of paperwork needed for smaller exports by clearing a large proportion of parcels that express operators regularly move across borders.

In order for a package to qualify, the goods value needs to be less than £900 and must not be controlled, restricted or subject to other customs procedures (like inward or outward processing or customs warehousing).

HMRC also used the opportunity to remind traders to complete their move to using CDS for export ahead of the 30 March deadline.

The long-running CHIEF-to-CDS switchover is approaching its final stages, with the government saying that it is working to help businesses complete the move ahead of the final deadline.

CHIEF hasn’t been operational for import declarations since 30 September 2022.

17,000 ships usually pass through the Suez Canal a year, carrying an estimated $1trn of goods and accounting for 12% of global trade.

However, due to the ongoing crisis in the Middle East and attacks on shipping in the Red Sea, only a fraction of this trade is currently using this vital trade short cut between Asia and Europe.

With ships increasingly taking a very long route around South Africa and the Cape of Good Hope, the knock-on impact on global trade and the world economy is self-evident.

The Panama Canal is just as important as the Suez Canal for shipping, as the Latin American route also carries $270bn in trade every year.

Throughout 2023, authorities have slowly been putting more and more restrictions on the canal, restricting the number of ships that can travel through and creating a sizeable backlog of vessels waiting to make the trip.

This has created a singular crisis for the world trade network, as two of its most important chokepoints are now operating under heavy restrictions.

The consequences for manufacturers with complex supply chains are likely to be significant. The question is whether the increase in shipping times and associated costs are painful enough for Western manufacturers to refocus their supply chains from “just in time” to “just in case” where reliability and security are prioritised over lower costs and higher profit margins.

We heard after the seismic disruption to global supply chains caused by the pandemic that manufacturers would seek to source raw materials and components closer to home but there is little evidence it actually happened.

Only time will tell if the latest events are sufficient to tip the scales.

New rules came into force yesterday in the UK that will require e-commerce platforms to pass information to HMRC on the income of sellers who use them.

The new measures will see HMRC gather the information on sellers of goods and services overseas before sharing it with the relevant foreign authorities in an international attempt to limit tax evasion. The regulations apply from 1 January 2024, while reporting will be required from January 2025.

They mark an implementation of the Organisation for Economic Co-operation and Development’s (OECD) ‘Model Rules for Reporting by Platform Operators’ with respect to Sellers in the Sharing and Gig Economy (MRDP) which the group has developed in talks with the UK and other nations over the last few years.

The government has said that the changes will affect “digital platforms in the UK that facilitate the provision of services or the sale of goods by UK or other taxpayers”.

UK taxpayers who sell goods or services on those platforms will also be affected, and the government notes that the platforms include those that provide services such as taxi hire and food delivery.

It notes that the new rules are not expected to have an impact on individuals who use digital platforms to purchase goods or services.

The rule not only provides a more consistent approach for OECD member countries but will also enable HMRC to quickly and efficiently exchange information with other tax authorities to access data from platforms based outside the UK.

The government has announced a new package of improvements to streamline customs processes and reduce admin burdens for business. 

HMRC published the results from three consultation processes that were initiated shortly after the Spring Budget in March 2023.

The first was on the development of a voluntary standard for customs intermediaries. The objective of the voluntary standard is to set a benchmark, drive best practice and improve quality in the sector.

The government also announced the next stage in its Modernising Authorisations project.

The initial aim of the project was to reduce administrative burden for using procedures – such as AEO or inward and outward processing – by taking a “once and done” approach, with the objective that traders will not have to submit the same information twice.

The next phase is focused on updating and introducing new authorisation guidance, while continuing to co-design future authorisation processes with industry. The project will commence delivery of a new customer portal in 2024 with plans to conclude delivery in 2025.

HMRC also announced that it will make changes to the way customs guarantees work for special procedures, temporary storage and duty deferment. The aim is to allow more traders to access these various procedures.

Under the planned changes, which are expected later in 2024, guarantees will not be required from approved traders for duty deferment accounts containing below £30,000, tripling from the current £10,000 threshold.

The final announcement was a set of three measures designed to make the transit process simpler, cheaper and more accessible:

– Authorised consignees will no longer be required to physically unload goods at their approved locations to end a transit movement, providing the movement originated at an authorised consignor’s approved location and the goods were moved under a seal.

– Government is removing the requirement to submit an export declaration when goods under transit are loaded onto vehicles in Great Britain for use or consumption on board, providing evidence of the goods leaving is retained.

– In 2024, as part of the modernising authorisations project, the government will introduce a digital process to allow authorised consignors to add a client’s premises to their authorisation to start transit movements from these locations. 

The UK and Florida have signed a memorandum of understanding (MOU) to boost trade and investment with business and trade secretary Kemi Badenoch saying progress was also being made with the US federal government on a broader agreement.

Badenoch signed the MOU in Florida alongside governor Ron DeSantis and said that she sees “huge opportunities” for UK businesses in the US’ fourth largest state.

The deal focuses on space, financial technology, artificial intelligence and legal services, and is the seventh that the UK has agreed with a US state.

The UK adopted a strategy of pursuing state-level deals after president Joe Biden said that his administration would not pursue a federal trade agreement with the UK.

State-level deals have a limited impact compared to country-wide agreements because they don’t include preferential tariffs although The UK did secure a country-wide agreement of sorts with the US in June, when president Biden and prime minister Rishi Sunak signed the Atlantic declaration, which enhanced ties over advanced technologies, clean energy and critical minerals.

The UK also secured an agreement to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) earlier this year – the UK is the first ever new member and the only European member.

The UK’s chemical regulation scheme is set to diverge from the EU’s, after the Department for Environment, Food and Rural Affairs (Defra) announced a change to the post-Brexit system.

Following Brexit, the UK established an independent regulatory framework for chemicals known as UK Reach, initially borrowing heavily from the previous regime.

The European version, EU Reach, continues to apply in Northern Ireland under the Windsor Framework.

The government has said that not all data collected under EU Reach will be required under the UK version, indicating that the two versions will continue to diverge from one another.

According to a statement from Defra: “it has become evident as part of the review, that our regulators do not need to hold a complete replica of all the registration data on all chemical substances held under EU Reach in order for UK Reach to undertake its regulatory work.”

Industry experts have said that the proposals could result in less laboratory testing and lower compliance costs.

The government has published the ten national codes to replace 999L.

HMRC had previously announced the extension of waiver document ‘999L’ for import declarations submitted through the Customs Declaration Service (CDS), up until 31 January 2024.

Ahead of this new deadline, the government has published the 10 national waiver document codes to the tariff that should be used instead of code 999L.

Until January 2024, code 999L can continue to be used on ex-heading goods, where declarants have confirmed that there are no documentary or licensing requirements on the goods being moved.

The Joint Customs Consultative Committee (JCCC) is advising traders to start using these codes straightaway.

The committee warns that, if a business uses the 999L waiver document code for imports after 31 January 2024, the declaration “will not be accepted” and goods face delays at the border.

Waiver code 999L will be available for export declarations on CDS until 31 January 2025 following a full roll out of the service in March 2024.

NCTS5, which will allow traders to amend any pre-lodged transit declarations made on goods moving within countries covered by the Common Transit Convention (CTC), was slated to enter operation on 16 November 2023.

In response to concerns from multiple countries that they would not be ready for the rollout, the CTC facilitated an extension which HMRC have opted to implement, pushing back the UK deadline for NCTS5-compliance to 1 July 2024.

Ahead of the CTC’s extension, several countries reported that making their internal systems NCTS5-compliant would take longer than the initial November deadline, largely due to the need for software development and subsequent testing alongside the new system.

HMRC’s Joint Customs Consultative Committee (JCCC) announced its decision to make use of the extension after receiving several petitions from industry that more time would be required.

When completed, the upgrade will allow traders to amend any pre-lodged transit declarations made for countries covered by the CTC, which currently allows a 30-day window in which traders can lodge a declaration ahead of a goods movement.

The ability to update customs information such as EORI numbers, which traders may not already have access to, should allow admin to be carried out more efficiently.

The delay will impact the rollout of other government initiatives such as the Customs Declaration Service.

HMRC is encouraging future NCTS5 users to continue using its Trader Test Environment, especially those developing software to support the upgrade.

The Electronic Trade Documents Act (ETDA) has now become law in what has been called a “vital development for the improvement of the efficiency and sustainability of international trade” by many business leaders.

It has been hailed as a possible cost-saver for traders, with technology and digital economy minister Paul Scully recently saying that it could save businesses an estimated £1.1 bn over the next decade.

The act, for the first time in English and Welsh law, gives digital versions of certain commercial trade documents the same legal footing as paper versions, particularly those used for the trade in or transport of goods or the financing of such trade or transport.

The legislation lists the following as examples of the documents that can now be digitised: bills of exchange, promissory notes, bills of lading, a ship’s delivery order, warehouse receipts, a mate’s receipt, marine insurance policies, and cargo insurance certificates.

However, there are reservations in the industry about the immediate impact of the Act for traders, the general consensus is that the importance could be more that it indirectly encourages the digitisation of other documents that aren’t necessarily included as examples in the legislation. This includes e-Phyto certificates, electronic export health certificates, airway bills and CMR notes for road transport.

The legislation will also help banks and other financial institutions have better visibility of trade transactions, helping them to tackle money laundering in global supply chains.