Shipping office services, helpline, consultancy and supply chain security

Monday, 12 March 2012

Gary Grumble 24th Feb

I’ve just talked to a mature gent (71) who is an honest exporter of non strategic industrial goods. He got an order from Iran which is not unusual for him as he has exported to Iran for 26 years, he knows the form, he went through all the hoops e.g. The Iran list etc. He was told his goods did not need an export licence, he went ahead and booked the shipment only to find it detained by HMRC and the Border security people. Despite prompt response to the questions asked it took him nearly 3 weeks to get the shipment reinstated, he was told (would you believe) that the goods did not need an export licence.

He was more than upset to find all this cost him about £2000 in demurrage, storage, reconsigning etc.

He read in the newspaper that the Government were looking for an export led recovery to solve our economy and recessionary ills. “They are having a laugh aren’t they?” he said “ I need some kind of recovery myself”

My advice to our friend who feels like an innocent man sentenced to working on the chain gang.?

Write to David Cameron !!!

Dave Heaver MIEx on the ....
Origin Woes & Dangerous Treaties

If you want a certificate of origin approved by your local Chamber of Commerce, whether or not it is in connection with any preferential tariff treatment, you will need to supply them with “proof of origin”. For years a signed declaration from your supplier has probably been accepted to satisfy this requirement. But beware… things are changing.

Recently the Chambers have been tightening up on their origin requirements from the exporter, requiring more substantiated documentary proof of where the goods “originate” before they will approve a certificate of origin. But this has led to a few problems for exporters. Supply chains these days can be long and complex. Many exporters buy products from third parties; who in turn may have bought from elsewhere in the UK who may have sourced them from an overseas supplier who had them manufactured specifically for them in a galaxy far, far away… Or maybe by a small manufacturer in a town in Poland, or Latvia, or India... well, you get the idea.
So, picture the scene. You, the UK exporter, have a consignment packed and ready to ship. You prepare all your shipping documentation and apply to the local Chamber for a non-preference certificate of origin. It is rejected because the “declaration of origin” which they have always accepted in the past is now unacceptable. So you go to your UK supplier and ask them for a declaration of origin from the manufacturer of the goods… But your supplier is still perhaps several more steps removed from the actual manufacturer, and even if he knows who makes the products, he doesn’t want his customer - you – to know this information, for fear that you will then go direct and cut him out of the loop. And if he doesn’t know the manufacturer, he will have to request this same information from his supplier, who will go through the same thought process.

So, the Chambers of Commerce came up with a cunning plan whereby the manufacturer’s details can be sent direct to the Chamber who will hold this information confidentially, and the exporter can then declare, “evidence of origin is held by the xxxxxxx Chamber of Commerce” on their C of O application… Job done; right? Well not necessarily…
Perhaps your supplier - or theirs - is themselves not an exporter, and never deals with the Chambers of Commerce and therefore doesn’t really know what they do. So now begins the Spanish Inquisition: “Why do you need to know this now?”; “Who is the Chamber of Commerce to make us divulge this information?”; “What guarantees do we have if we provide you with this confidential information?” etc…. and all the time, the clock is ticking.

The rules of origin are defined in Article 24 of the EU treaty. They are sent out to individual Chambers by the British Chamber of Commerce and are clear as to what is required… but do you have a copy of these rules? If not, you should get them from your local Chamber. However, as we know with so many things which are proposed by the EU (remember the standardised curve of the banana fiasco?); it is the impact of these rules in the real world which is causing some consternation. If you cannot get the required and acceptable proofs of origin from your suppliers, and you cannot send a certificate of origin which your customer requires, what happens then?

I suggest you pass the problem back to the Chamber of Commerce and ask them to try to get the documents they require to prove origin. They say they are there to help exporters, so this way they will see first-hand exactly how unworkable these requirements can be in the real world.
But that is just one frustration for exporters…

The government keeps banging on about how they want companies to export the country back to prosperity, but there seems to be an increasing undercurrent of unnecessarily complicated hurdles to be jumped by exporters. It has been reported that UK companies applying for export licences still find it an extremely slow process with no significant signs of improvement over the years. However, one exporter has reported chasing for their licence which had been in the system for several weeks, only to find the process taking even longer than usual; almost, she felt, as a punishment for daring to chase up the dawdling civil service. This irresponsible and immature attitude from any government department, let alone BIS, is a totally unnecessary frustration to an already difficult job.
Of course there are without doubt some forward thinking individuals within government departments, but sadly there are also far too many who are simply plodding their way to their overblown pension, either incapable or unwilling to work - and respond - at the speed demanded by modern commercial business.
And what happens to the new or inexperienced exporter who comes up against such bureaucracy and all the associated intransigence? Their first thought is likely to be, why should I bother? This is too complicated and time-consuming.

And then of course we have the Blair/Bush legacy, which has resulted in an ever more regulated and far less flexible international trading environment which does little or nothing to encourage companies to trade overseas. In the light of the recent extradition of retired British businessman Christopher Tappin, without trial, to the US, UK exporters will (or should) now be doubly wary of violating US export regulations. These regulations are so complex that many exporters could easily find themselves facing a similar situation, simply through a genuine mistake or a failure to appreciate the depth of research they need to do into their customers before shipping. The UK government should stand up now and withdraw from this one-sided treaty which has no logical basis in law. UK exporters are (generally speaking) not a bunch of terrorists and should not be presumed to be so by any so-called friendly foreign government. UK exporters need help and support from their own government, not dangerous, lawless pacts with paranoid overseas totalitarianism which puts UK citizens at unacceptable risk. The powers that be need to recognise this urgently and act accordingly. Or to paraphrase the vernacular, perhaps it’s time for the UK government to cultivate some testicular fortitude …