Shipping office services, helpline, consultancy and supply chain security

Tuesday, 30 April 2013

China Compulsory Certification – what do I do?

The CCC (China Compulsory Certification) safety license requirement by the government of China requires manufacturers to obtain the CCC China Compulsory Certification before exporting to or selling products covered in the CCC catalogue in the China market. Products not meeting CCC China Compulsory Certification requirements may be held at the border by Chinese Customs and will be subject to other penalties.

New product categories have been added to the CCC China Compulsory Certification catalogue(

The application process for the CCC China Compulsory Certification:
  1. can take about ninety man-days or longer;
  2. requires testing at accredited laboratories in China;
  3. generally does not permit self-certification or third-party testing results;
  4. requires submission of numerous technical documents;
  5. requires submission of product sample(s) to a Chinese testing laboratory;
  6. requires a factory inspection( by Chinese officials at the applicant's expense;
  7. requires follow-up inspections every twelve to eighteen months;
  8. can cost several thousand dollars(
CCC China Compulsory Certification is administered by the Chinese government agency Certification and Accreditation Administration(CNCA).

Step One: Determine Whether Your Products Require CCC China Compulsory Certification

First, examine CCC China Compulsory Certification product catalogue( and determine whether your products, or component parts within your finished goods, require CCC China Compulsory Certification. The CCC China Compulsory Certification product catalogue is a list, originally divided into 132 broad product categories, of all the products requiring CCC China Compulsory Certification.

Step Two: Apply

There are five major steps in the CCC China Compulsory Certification application process. The five-step application process includes:
  1. Submission of an application( and supporting materials, including user guides, CB reports, EMC reports, regulatory labels and other information.
  2. Type Testing. A designated test laboratory in China will test product samples.
  3. Factory Inspection. Certification body will send representatives to inspect the manufacturing facilities for your product. They will inspect each factory producing your product(e.g. If your company manufactures Product Z in five separate factories, all of which ship product to China, you will need to have five separate factory inspections).
  4. Evaluation of certification results, and approval(or failure or retesting).
  5. Follow-up Factory Inspection. Manufacturing facilities for the product will be re-inspected by Chinese officials every 12-18 months.

Step Three: Note Other Chinese Licensing Requirements

Like many countries, China has multiple certification schemes. Though the CCC China Compulsory Certification is the widest-ranging certification requirement, your product may have to meet other requirements as well. For example, China's Ministry of Information Industry regulates telecom and internet equipment, and for certain equipment requires manufacturers to obtain a "Network Access License" and "Network Access Identifier Mark", which includes requirements for testing in Chinese test laboratories. Similarly, China's State Drug Administration requires product registration for certain medical devices.

Thanks to Johnny Xie   Managing Director at QUESTOUD for the information

Friday, 26 April 2013

Why do Russian/ CIS company prefer to trade with USA or Germany companies instead of UK businesses?

 Last week I was doing some public speaking on international trade development and a little group of delegates (from Russia/ Ukraine/ Azerbaijan – various sectors) approached me and asked why aren't UK exporters as co-operative as suppliers based in countries such as Germany and Russia?

A couple of things they mentioned was our reluctance to move from ExWork or FCA delivery terms while German companies begin with offering delivered prices and USA even work on DDP terms. They also expressed concern that UK companies always ask for full payment in advance rather than negotiating payment terms - which may include payment in advance so they aren’t opposed to this but to say this is the only way UK supplier will trade with them was seen as a little insulting and arrogant.

The Russian guys said that Germany and USA suppliers were now shipping direct into Russia but UK suppliers were still wanting them to consolidate from Finland, Germany etc so giving them extra costs, delays and paperwork issues. Again, the customers may prefer to consolidate their shipments through Germany or Finland but they want to negotiate this not have it presented as an ultimatum.

One of the Ukraine people said he'd hit upon what he thought was a great compromise so the Ukraine company didn't have to get involved with EU export declarations, etc he bought FCA Finland - unfortunately he found that the UK suppliers didn't understand that they had to ensure the goods could leave the EU (FCA - free carrier, meaning free from export restrictions). One quote (I'm paraphrasing a little) was: "German supplier says give me a reason why you won't buy from me! UK supplier says give me a reason why I should sell to you!"

There were more but I'll stop there and look forward to comments.

Tuesday, 23 April 2013

EU MCC/UCC update:

The new EU Customs Code is still currently due to come into force on in July 2013 but the European Commission are discussing the official handling of this legislation in view of the Union Customs Code being the new preferred legislation to amend and update the Customs Procedures in place in the European Union.  Official decision after the Trilogue in April 2013 won’t be available for about 6 weeks after this but the UCC discussions within the EU Commission/Council/Parliament saw some points emerging:
  •        The 24 June 2013 deadline for enactment (when the current Customs Code is superseded by the Modernised Customs Code) is to be moved to the 1 November 2013 (see attached draft regulation)
  •        The implementation timetable is still emerging, although the January 2015 potential date is looking very tight - talk of slippage to 2016 exists
  •        In addition to Customs Warehousing/IP etc Guarantee Waivers being introduced for AEOs, discussions are now emerging about similar waivers for Deferment Account Guarantees - these are at a very early stage and may not result in change, but it appears Germany are supportive.
  •        Although it was thought "First Sale" valuation was retained, this may now be back on the table for discussion.. 

The final Regulation has to be published at the very start of June 2013, at the latest, to replace the Modernised Customs Code and it has to be formally ratified by Council and EP first.  A study of the Council Compromise text reported the following:
 Centralised Clearance – is retained.  Confirmation that goods have been presented on arrival will be required.  Even if CC covers UK national procedures, the need for an authorisation would be removed courtesy an addition to paragraph 1.  All supporting rules will be laid down by implementing act under the examination procedure - so a vote for MS.  Authorisations - AEO(c) only
Self Assessment – no detail, all for a delegated act and an implementing act.  Authorisations - AEO(c) only.
Simplifications – key simplifications such as the ability for airlines to move goods in their own records is maintained.  AEO(c)’s holding goods in “temporary storage” will be able to move goods around the EU just recording the movement in their own records.  Movements between different traders (but within one member state) will also be allowed; as will “other movements” to be covered in a delegated act.
Guarantees – Tried and lost the argument for a guarantee waiver for deferment charges - Commission were willing to consider if all MS agreed, not all did.  The principle remains that guarantees will be required for any customs charges not already paid, but this guarantee can be reduced or waived completely if the trader meets certain criteria (based on AEO).  Control by audit rather than transaction monitoring will be agreed - certainly for temporary storage, and reason to hope the Commission will accept that approach more generally.
Valuation - Commission finally bowed to pressure from both EP and Council and we can be confident that an implementing provision allowing for successive sales will be included in the final text.  Further work will be needed to secure acceptable text in that implementing act.
Temporary Storage - is bound to be a status (as now) rather than a procedure.  Commission’s aim is to have “no change”, this inevitably will be “minimum change” as at least data sets will be harmonised.  Council proposes TS be time limited to 90 days, without possibility of extension, instead of the current 21/45 days.

Friday, 19 April 2013

Incoterms 2010 – Group C Terms – are they useful?

The C Group has the main heading of ‘Main Carriage Paid’, meaning that the main   carriage is paid by the seller. It is a constant within the Incoterms ® rule system that a place must be named when the term is formalised within the contract of supply between buyer and seller. The place named within the C term will always be a place in the country of destination, hence CIF Bangkok, CPT Sydney and so on. This is because the seller has the responsibility for paying the carriage to the point named. As we will see under ‘key points and responsibilities’ there are common confusions and misconceptions related particularly to the C group of terms which prompted the quote from Professor Ramberg referred to at the beginning of this article.

Common pitfalls
There are 2 groups of C terms . One is intended for use only when the goods are carried by sea (CFR and CIF). The other group (CPT and CIP) can be used for any mode of transport, including sea and multimodal transport. The sea freight terms have the ships rail as a critical point whereas the multimodal terms have delivery attached to putting the goods into the first carrier’s hands. A common pitfall is in not understanding the significant difference between the 2 groups.

Without doubt, however, the C group causes considerable confusion in that unlike the other groups E, F,and D there are two critical points instead of one contained within the term. Risk passes from seller to the buyer in the country of departure but freight is paid and arranged by the seller to a point named in the country of destination. The fact that only one place is named in expressing the term, sellers and buyers fall into the trap of regarding that as the only significant point.

As if these traps were not enough there is an additional pitfall in connection with insurance, two of the four C terms (CIF CIP) require the seller to take out insurance in the name of the buyer even though risk passes from seller to buyer in the country of departure.

Key points and responsibilities under C group terms

1. The seller must contract for carriage to the destination specified in the term agreed in the contract of supply. This applies in each of the 4 group C terms. It is important, however, for the seller to note that two of the terms are intended for sea freight shipment only, these are CIF and CFR. With the sea freight terms the ship’s rail plays a key part as the point at which risk passes from seller to buyer.

Real life example:

Company H in the UK concluded an order for a New Zealand customer with the Incoterms ® rule CIF Auckland included in the written contract document. When despatch was achieved the goods were sent air freight. Because no ship’s rail was crossed risk effectively did not transfer to the buyer. No damage occurred in transit but the buyer hastened to point out to the seller a lack of compliance in the procedure which could have led to dispute.

2 .  Risk passes from seller to buyer in the country of departure either when the goods are in the hands of the first carrier (CPT and CIP) or have crossed the ships rail (CIF CFR) . Effectively the seller has no risk after these points BUT in two of the terms CIF and CIP the seller has the obligation under the term to take out insurance cover in the name of the buyer, this cover is set out in the Incoterms ® rules published by the ICC, it limits the sellers obligation to taking out minimum cover of the Institute of London Underwriters Cargo Clauses or similar. Further cover must be negotiated by the buyer and seller to cover risks additional  to the minimum referred to.
Jan Ramberg has the opinion that this minimum cover comes about because of the sale of goods in transit (as in commodity trading) how, though, he asks, is the seller to know at the outset what the insurance requirements of the buyer are?  He cannot.  Therefore if the buyer requires additional cover it should make it known at the outset.

Real life example:  UK buyer agreed the term CIF Felixstowe (Incoterms ® 2010) but realised that they had not understood the extent (or lack of) of insurance cover until the goods arrived from Russia in a damaged state due to ‘civil commotion’ which was not covered by the buyers insurance requirement. It then came to light that the buyer had an insurance policy for goods in transit which covered the cost, the question they were then forced to ask themselves  was “why are buying under CIF when we already are covering the risk with our own insurance ?’

Real Life example:  UK seller quoted CFR and CIF on various export quotations but did not always adhere to the requirement to ship by sea freight, this meant that they were not always able to provide a bill of lading to the buyer. The buyer in one case was not impressed by the sellers’ lack of competence or understanding which turned out to be detrimental to the relationship.

Essential differences between the 4 C terms

The broad characteristics of each of the 4 groups contained within the new  (2010) set of Incoterms ® rules apply to the terms contained within the particular group, e.g. under the C group terms the main carriage costs must be paid by the seller and risk will pass in the country of departure these are constants.

The differences in the 4 terms are significant. Two apply to sea freight and two are multimodal. Two have obligations on the seller to insure the goods. One by one we look at the differences.

CFR (Cost & Freight)
Main responsibilities of the seller are:
•     to contract for carriage
•     to deliver the goods on board the vessel with the main carriage paid to the named point in the country of destination
•     provide a clean transport document (bill of lading or sea waybill)
•     arrange export clearance
•     pay unloading costs if for their account under the contract of carriage

Remember that, as with FOB, the ship’s rail is no longer the point at which risk passes from seller to buyer as under the 2010 set this has changed to loaded at port of export but this still means that only conventional sea freight should be used under this term.

CIF (Cost, Insurance and Freight )

Main responsibilities of the seller are:
•     To contract for carriage and insurance (as defined by the ICC rules)
•     Deliver the goods on board
•     Provide a clean transport document and a cargo insurance policy or certificate
•     arrange export clearance
•     pay unloading costs if required under the contract of carriage

The safe loading on the ship is the key point where risk passes so conventional sea freight is the required mode of transport.

CPT (Carriage paid to … named place of destination)

Main responsibilities of the seller are:
•     To contract for carriage
•     Deliver the goods to the (first) carrier
•     Provide a usual and ‘clean’ transport document
•     Arrange export clearance
•     Pay loading costs
•     Pay unloading costs if required under the contract of carriage

This term applies to any mode of transport. Risk passes when the goods are in the hands of the first carrier

CIP  (Carriage & Insurance paid to … named place of destination )

Main responsibilities of the seller are:
•     To contract for Carriage & Insurance
•     Deliver the goods to the (first) carrier
•     Provide a clean and usual transport document and certificate of insurance (or policy)
•     Arrange export clearance
•     Pay loading costs
•     Pay unloading costs if required under the contract of carriage

This term applies to any mode of transport.

Remember that the Incoterms ® rules give valuable support to buyers and sellers in establishing responsibilities in international contracts of supply but there are elements of interpretation involved which can sometimes be clarified by reference to the ICC publications referred to in this article.

Tuesday, 16 April 2013

Incoterms 2010 – Use FCA not FOB terms

Of the three terms contained within the F group two are intended for use only when the goods are carried by sea (but not containerised freight) or inland waterway transport, the other one FCA(Free Carrier … named place) is intended for use by any mode of transport.

This differentiation between terms intended for one mode of transport rather than another leads to difficulties when parties confuse matters by using a sea freight term with an instruction to use air freight or deliver to an air freight forwarder at an airport or airport cargo centre.

If the shipper air freights a consignment of goods which have been ordered as “Free on Board UK airport” then risk which should pass to the buyer when the goods cross the ships’ rail remains with the seller as there is no ships rail point for the passage of risk from one party to the other.

Key points and responsibilities under F group terms.

1    Main carriage (or transportation) is the responsibility of the buyer who must nominate the carrier and be responsible for paying the freight costs from the named point in the country of departure to destination. By mutual agreement the seller can arrange the carrier and transportation but it will be at the buyers cost.

Real life example :  In the early stages of supplier/customer relationship it should be made clear who is nominating the carrier and equally important identifying the place where the supplier meets his requirement for delivery under the contract of supply. All 11 Incoterms ® rules must be qualified by stating a specific place. In this example the supplier in northern England merely quoted his Japanese customer “FCA … UK”. This led to confusion as to whether the goods should have been delivered at the suppliers cost to a freight terminal or whether the buyer of the goods was required to collect from the sellers premises. Either of these options is valid under the FCA term but must be agreed at the outset. Vagueness should be avoided in order to prevent argument.

2    Risk (of loss or damage ) transfers from the seller to the buyer when the goods have been delivered to the carrier at the named point. In the 2010 set of Incoterms ® rules published by the International Chamber of Commerce (ICC) the rules relating to loading were made more logical,  ie under “Ex Works” the seller has no responsibility for loading  whereas under FCA (Sellers premises) the seller does have to load.

Real life example:  Yorkshire exporter, failing to understand the loading obligation aspect of the FCA term, damaged the goods when unloading them at the nominated point which was a freight forwarders warehouse: by taking on a responsibility which was not incumbent under the term they found themselves liable for the damage incurred.  

3    Cost responsibilities pass when the seller has delivered the goods to the carrier at the named place.

Essential differences between the three “F” terms

The broad characteristics of each of the 4 groups contained within the new 2010 set of Incoterms ® rules apply to the terms contained within it, eg under “F” group terms as described above the main carriage will be paid by the buyer, risk will pass to the buyer at the named point as will costs. This consistency within the group is vital to an understanding of how the Incoterms ® rules system is meant to work.

It is, nevertheless, important to see the differences between the terms, with this in mind we will take a brief look at the 3 “F” terms to highlight their essential differences. First of all note that the FAS and FOB terms are intended to be used only for “conventional” sea freight whereas FCA can be used for any mode of transport

Free Carrier named place

Main points are that this is a multimodal term used for any mode of transport, main freight is paid by the buyer and cost and risk pass at the named point.

Export documentation suitable for clearing the goods for export is the responsibility of the seller.  It is important that the buyer gives clear instructions to the seller as to the point of delivery and that both parties agree the separation of any costs that may arise other than those considered normal in such transactions.

Real-life example:  The UK seller of goods consigned via air freight FCA (Forwarder’s premises) to an Australian destination. The seller claimed that as they delivered to the forwarders warehouse with the appropriate documentation for customs clearance he should not be charged a ‘handling fee’ by the forwarder. A further question arose with regard to other potential fees for storage and aviation security charges. The dispute was resolved when after considering the wording of Incoterms ® rules it was felt that handling related to customs clearance and should be paid by the seller. Storage in the event of delays in consigning the goods should be to the buyers account as the forwarder is acting for the buyer. Aviation security is arguably a national restriction which should be to the sellers account.

Free alongside ship named port of shipment

Main points are that this term must only be used for conventional sea freight or inland waterway modes of transport, main freight is paid by the buyer, cost and risk pass to the buyer when the goods are delivered to the named point.
Real- life example:  Seller of the goods delivers to the named port on a Tuesday despite the vessel not loading until the Thursday. On the Wednesday the goods are destroyed in a fire. Who had responsibility for the risk?  The simple fact of the matter was that the seller had not placed the goods alongside the ship as the term dictates, the ship was not there, in the absence of any other considerations such as port practice it had to be that the seller was at risk as delivery had not been achieved in line with the term.

The buyer is responsible for giving proper instructions to the seller in respect of delivering the goods to the named point, if the seller is not clearly instructed clarification is required.

Free on Board named port of loading

Main points are the same as FAS except that delivery takes place and cost and risk pass when the goods cross the ships rail at loading at the port of shipment. FAS and FOB are clearly intended for conventional sea freight (or inland waterway) modes of transport.   Finally the ICC have decided to get rid of the rather dated concept of the ship’s rail point of delivery as the named legal delivery point and where risk passes to the buyer.  These points (after 74 years) are now, under the Incoterms ® 2010 rules when the goods are loaded.  A very high proportion of world freight tonnages is containerised and not handled  by conventional sea freight techniques so other alternatives to the ships rail delivery point are available.

Real-life example:  Lancashire seller of textile goods delivered to the port nominated by his USA client but found that the vessel nominated by the buyer was late arriving in port. The seller incurred considerable cost for storage and demurrage charges, the buyer refused to accept these charges and arbitration was called for. It was held that the buyer had failed in his obligation to inform the seller as to the time and place that the vessel was available for loading. The buyer was obliged to pay the additional charges.

Those involved in the sale and purchase of goods internationally benefit enormously from having the comfort and protection of Incoterms ® rules, however there is still the need to take account of methods of transport, port practices and the possible advantage for the particular transaction of one Incoterms ® rule over another in terms of security under the contract and ability to meet the obligations of the individual term.

Friday, 12 April 2013

Intrastat Supplementary Declarations – reasonable excuse?

I have always believed that if you had a reasonable excuse for having failed to submit you Intrastat SD on time, then Customs would not penalise you. I’m now told that, except for some very strict ‘events’, there is no such thing as ‘reasonable excuse’.   Is that correct?

A.         Yes and no, I’m afraid. The  term 'reasonable excuse' is not defined in law and excuses accepted by HMRC tend to be those which they consider to be reasonable, e.g. mainly those events which are unforeseeable or unusual and beyond your control, although they do say that they will look closely at the circumstances of each case.
According to HMRC, a reasonable excuse might involve:
  • a failure in the HMRC computer system,
  • your computer breaks down just before or during the preparation of your online return,
  • a serious illness, disability or serious mental health condition has made you incapable of filing your SD,
  • documents being lost through theft, fire or flood,
  • electrical faults,

These are pretty strict examples and could only be invoked if one of the problems listed stopped you from submitting your data.
However, each case should be considered on its merits. Other ‘excuses’ have been accepted in the past, such as misleading advice on postal delivery times, or the previous incumbent in the job had failed to let you know that a declaration was due, but these seem a touch tenuous, especially as HMRC emails a reminder about your SD if you’re part of their ‘Alert Service’ .

Reasonably enough, HMRC will not accept an excuse as ‘reasonable’ if you haven't made a reasonable effort to submit your data on time. They quote the following as fairly obvious unacceptable examples. You:
  • found the online system too complicated to follow,
  • left everything to your accountant to do and they let you down (NB In this case the law provides specifically that you do not have a reasonable excuse if you relied on someone else to perform any task for you),
  • forgot about the submission deadline, or
  • did not try to re-submit your SD on time once a problem with the IT system was put right .

 However, a number of recent First Tier tax tribunals have overturned HMRC’s concept of what constitutes a ‘reasonable excuse’. Excuses tendered for late filing of tax returns, for instance, have been supported by the courts as reasonable, using European Court of Human Rights rulings, supporting the argument that HMRC’s idea of ‘reasonable excuse’ was based on some exceptional circumstance and therefore ‘unreasonable’. In fairness, HMRC do say that if you can show that your conduct was that of a conscientious business person who accepted their compliance obligations, then there may be a reasonable excuse.

Remember that HMRC state that genuine mistakes, honesty and acting in good faith are not accepted as reasonable excuses for penalty purposes. But don’t immediately accept HMRC’s decision if you feel you have a valid reason for, say, submitting your SD late. Courts have been showing a trend towards business-friendly rulings, adopting a commercial approach to what is reasonable and this could ‘colour’ HMRC’s opinion.
However, remember, ignorance is still no excuse, unless I suppose you can prove that HMRC withheld the knowledge that would have allowed you to comply, but that’s probably unlikely… the small print will find you out! You should make every effort to comply and not rely on the excuse that you had to vacate your premises unexpectedly, due to a plague of locusts… unless of course that’s what happened!

Tuesday, 9 April 2013

Evidence of Shipment

“Evidence of export consists of two types, official and commercial. For VAT purposes there is no mandatory requirement to retain official evidence of export so equal emphasis should be placed on the acceptance of either official or commercial evidence to substantiate zero-rating. The official and commercial transport evidence must be supported by other supplementary documentation associated with the supply, such as the customer’s order, inter-company correspondence, despatch note, acknowledgement of receipt, evidence of payment, etc.” Full details on the supplementary evidence required are in Notice 703 Export of goods from the United Kingdom. Taken together, the transport and supplementary evidence must show that a transaction has taken place and the goods have actually left the Community.
Official evidence is normally:
  • A Goods Departed Message (GDM) where the goods are exported directly out of the UK to a third country destination - see VEXP40400. The GDM is generated by the National Export System (NES) when electronic export declarations are processed. The GDM is only acceptable as export evidence when the Input Customs Status (ICS) code = 60 and the Status of Entry is coded = 8).
  • A certified Export Administrative Document (EAD) also known as the Single Administrative Document (SAD) (Form C88) Copy 3, or NES declaration (as you describe). These must show an official Customs stamp from the office of exit from the EC where the goods exit the EC from another member State. In this case the GDM will show an ICS code = 61 and is not acceptable as official evidence of export unless supported by the stamped copy 3 SAD.
  • Confirmation from the New Community Transit System (NCTS) that the Community/Common Transit (CT) procedure has been discharged.
  • In addition, where an exporter subscribes to the MSS Data to the Trade Service, an MSS report showing ICS code 60 and Status of entry (SOE) code 8 is acceptable official evidence of export.

Commercial evidence comprises two types:
Primary (eg Master air waybills)
Secondary (eg authenticated house air or sea waybills).
Along with these transport documents you will also have to provide your own commercial documentation, including payment details, as a basket of evidence.  Ensure the transport documents show clear details of how the goods moved along with the endorsement that they have flown or been shipped.  This is a problem with FPOs because the consignment notes are not acceptable as commercial evidence. HMRC advise that Audit Officers will accept the FPO Global Certificate of Shipment and Air Waybill for VAT zero rating purposes. Also, it is advisable to obtain and retain the Proof of Export (POD) showing the date and signature the goods were received by the customer.

Friday, 5 April 2013

Accession of Croatia to the European Union

Croatia is set to become the 28th member state of the European Union on 1 July 2013.
 Croatia applied for EU membership in 2003 and the European Commission recommended making it an official candidate in early 2004. Candidate country status was granted to Croatia by the European Council in mid-2004. The entry negotiations, while originally set for March 2005, began in October that year together with the screening process. The accession process of Croatia was complicated by the insistence of Slovenia, an EU member state, that the two countries' border issues be dealt with prior to Croatia's accession to the EU.
 Croatia finished accession negotiations on 30 June 2011[2] and on 9 December 2011 signed the Treaty of Accession to become the bloc's 28th member. The ratification process, by the parliaments of all 27 EU member states, is expected to be concluded by the end of June 2013. Therefore, entry into force and accession of Croatia to the EU is expected to take place on 1 July 2013.
A referendum on EU accession was held in Croatia on 22 January 2012, with 66 percent of participants voting in favour of joining the Union.
Croatian public opinion has been generally supportive of the EU accession process. Spikes in Euro-scepticism have occasionally happened, for example in April 2011 due to the association of the Hague tribunal with the EU.
Croatia has had to contend with long-standing border issues with Slovenia. Good trade relations have precluded this up to December 2008 when Slovenia's blockade of Croatia's EU accession stalled the negotiating process for 10 months.
In September 2009, it was announced Slovenia would remove restraints on Croatia's negotiations with the EU without prejudice to the international mediation on the border dispute. However, as of April 2010, Slovenia was still blocking opening of Chapter 31 (Foreign, Security & Defence Policy). As of June 2010, Slovenia has voted to accept the ruling of international arbitrators on the dispute, removing this obstacle.
 Croatia has border disputes with Serbia, Bosnia & Herzegovina, and Montenegro, but these countries are not European Union members and cannot directly block the accession process. In December 2008, Croatia and Montenegro agreed that the outstanding sea border issue between the two countries should be settled before an international court whose decision would be accepted in advance by the parliaments of the two countries.
Assuming that nothing blocks the current expected path, from 1st July 2013 you should treat Croatia as the 28th member state of the European Union.
This means that customs clearances will no longer be expected in both directions, customs paperwork requirements will reduce to match the EU standard and this should speed up and simplify transit on both dispatches (formerly exports) and arrivals (formerly imports).
Finance departments need to be warned to include Croatia data on their VAT returns (boxes 8+9), EC Sales List reporting and Intrastat reporting from July onwards.
Other current restricted practices for both import and export activities should stop immediately, however as with some of the other eastern member states some requirements may linger for a while
For full details nearer the time, please see Strong & Herd DYK, articles, blogs etc or alternatively book yourself on one of our EC training courses, where full details and updates will be provided.