DutyFree items moves TR -> UK -> EU

Discussion in 'International Business' started by GuyMor, Feb 8, 2021.

  1. GuyMor

    GuyMor UKBF Regular Free Member

    121 5
    Hello,

    We are manufacturing trousers in Turkey, bringing them to the UK and then dispatching some to the EU B2B.

    As far as we are aware, the UK and the EU has a trade deal with Turkey putting the relevant HS codes at 0% duty.

    BUT, latest delivery to Italy, our UK DHL rep said that although there's a trade deal, due to the item going to the UK first, it's classed differently.

    It sounds like a load of rubbish to me but I may obviously be wrong.

    Where do I begin finding that out?
     
    Posted: Feb 8, 2021 By: GuyMor Member since: Mar 23, 2016
    #1
  2. Trevor Andrews

    Trevor Andrews UKBF Newcomer Free Member

    23 6
    As I understand it you were using the U.K. as a base to distribute your trousers into the EU. That was fine before Brexit but now U.K. is a third party country just like Turkey.
    We have a shop in Spain and all the UK businesses we are dealing with are either setting up office/ distributors in EU or paying the appropriate duties.
    Even with us trying to send this to U.K. it’s been a problem.
    You need to look at basic EU rules regarding imports from third party countries.
     
    Posted: Feb 9, 2021 By: Trevor Andrews Member since: Feb 9, 2021
    #2
  3. Mr D

    Mr D UKBF Legend Free Member

    27,231 3,345
    If its any consolation, M&S are having the same problem.
    Import then export. Rules of origin in the trade deal apparently is an issue.



    Percy Pigs in Ireland hit by Brexit red tape as M&S warns of tariffs | Marks & Spencer | The Guardian

    EU-UK Trade and Cooperation Agreement (europa.eu)
     
    Posted: Feb 9, 2021 By: Mr D Member since: Feb 12, 2017
    #3
  4. Paul Norman

    Paul Norman UKBF Ace Free Member

    3,096 983
    Using the UK as a base to distribute into the UK makes little sense.

    There will be duty issues, and until matters settle down, transport delays.

    These goods originate outside the UK and the EU, and under the Brexit deal that makes them liable to some tax when they arrive in the EU. Your DHL rep is, I believe, correct.
     
    Posted: Feb 9, 2021 By: Paul Norman Member since: Apr 8, 2010
    #4
  5. GuyMor

    GuyMor UKBF Regular Free Member

    121 5
    Where do I look these up?

    Thanks, but it's not :)

    What do you mean? why does it make them liable to "some tax"? obviously local VAT is due on import but why impose duty? if an item has 0% while importing directly, why should it be liable just because it came from the UK? I don't understand it
     
    Posted: Feb 9, 2021 By: GuyMor Member since: Mar 23, 2016
    #5
  6. Paul Norman

    Paul Norman UKBF Ace Free Member

    3,096 983
    The rules of the Brexit deal differentiate between items that originated outside the EU before they were dispatched from the UK, and those that originated in the UK.

    But specifically, the answer to your question why should it be liable just because it came from the UK is that the UK and the EU have a specific deal on this, and the deal says so. It may, or may not, seem logical to you or I, but it obvious did to the negotiators at the time.
     
    Posted: Feb 9, 2021 By: Paul Norman Member since: Apr 8, 2010
    #6
  7. GuyMor

    GuyMor UKBF Regular Free Member

    121 5
    Thanks Paul.

    That's ridiculous and we'll have to change our whole B2B operation into the EU.
    The options I am considering:
    1. Bonded warehouse in the UK then only import the items that aren't going back into the EU
    2. Absorb the duty - makes more sense in the short term though obviously, margins will suffer.
    I think if that the case moving forward, it'll make sense to either dispatch from the supplier straight to the B2B but that's pretty much impossible, OR, have some kind of mini operation in an EU country to import from Turkey then export again to the UK without the EU items. Both options are bad.
     
    Posted: Feb 9, 2021 By: GuyMor Member since: Mar 23, 2016
    #7
  8. Mr D

    Mr D UKBF Legend Free Member

    27,231 3,345
    Welcome to the UK.
    You are far from the only one needing to try different options.

    But we left the EU so here we are .....
     
    Posted: Feb 9, 2021 By: Mr D Member since: Feb 12, 2017
    #8
  9. GuyMor

    GuyMor UKBF Regular Free Member

    121 5
    Another option is a bonded warehouse - anyone knows anything about that? general costing? I'm not talking about applying for our own warehouse to become a bonded which I believe is a different scale of a ****-storm but perhaps using a 3rd-party
     
    Posted: Feb 9, 2021 By: GuyMor Member since: Mar 23, 2016
    #9
  10. Mr D

    Mr D UKBF Legend Free Member

    27,231 3,345
    Not cheap and quite a bit of paperwork.
    But cheaper short term than getting your own bonded warehouse. Long term may want to think again.
    We looked at both options 6 years ago, it can be made workable as an expense but may involve considerable change in how you trade.
     
    Posted: Feb 9, 2021 By: Mr D Member since: Feb 12, 2017
    #10
  11. GuyMor

    GuyMor UKBF Regular Free Member

    121 5
    B2B into the EU is such a small part of our operation.

    I might just tell them I'll send them a credit note for the duty incurred as a short-term solution. The volume doesn't justify our own bonded warehouse for sure. I need to explore the costs of using a 3rd-party bonded warehouse but there's also the logistical aspect of sending my team there which is probably 3 hours away from where we are to do the QC and handle the re-dispatch
     
    Posted: Feb 9, 2021 By: GuyMor Member since: Mar 23, 2016
    #11
  12. Mr D

    Mr D UKBF Legend Free Member

    27,231 3,345
    There were some places that did QC and re-dispatch. Using your own staff for that would be incredibly inefficient.
     
    Posted: Feb 9, 2021 By: Mr D Member since: Feb 12, 2017
    #12
  13. GuyMor

    GuyMor UKBF Regular Free Member

    121 5
    Where would be the official guideline on this specific issue?

    I know where to find the taarif for product X coming from Y but don't know where to look for this specific scenario where it comes from TR -> UK -> EU
     
    Posted: Feb 11, 2021 By: GuyMor Member since: Mar 23, 2016
    #13
  14. DefinitelyMaybeUK

    DefinitelyMaybeUK UKBF Contributor Free Member

    46 7
    I read it as not meeting the "party" requirements as stated in "Article ORIG.3: General requirements" of the TCA. Turkey aren't a party in the TCA - see page 27 and the following a, b & c requirements of paragraph 1:
    https://assets.publishing.service.g...rade_and_Cooperation_Agreement_24.12.2020.pdf

    But I'd like it to be wrong as we have a number of Canadian items that could benefit under the EU-Can and the UK-Can deals...:eek:
     
    Last edited: Feb 11, 2021
    Posted: Feb 11, 2021 By: DefinitelyMaybeUK Member since: Jan 12, 2021
    #14
  15. apricot

    apricot UKBF Regular Free Member

    413 41
    We import from Turkey too and we thought being within the EU Tradedeal would save us the costs. We are now sending goods directly from Turkey to EU then from here to EU. All the costs gets cheaper.
     
    Posted: Feb 17, 2021 By: apricot Member since: Apr 7, 2012
    #15
  16. GuyMor

    GuyMor UKBF Regular Free Member

    121 5
    By "here" you mean EU?
     
    Posted: Feb 17, 2021 By: GuyMor Member since: Mar 23, 2016
    #16
  17. apricot

    apricot UKBF Regular Free Member

    413 41
    Here means UK
     
    Posted: Feb 17, 2021 By: apricot Member since: Apr 7, 2012
    #17
  18. GuyMor

    GuyMor UKBF Regular Free Member

    121 5
    So I don't understand your reply - you ship items from TR to the EU and then from the UK to the EU? how did the items get to the UK? What costs are cheaper?
     
    Posted: Feb 17, 2021 By: GuyMor Member since: Mar 23, 2016
    #18
  19. apricot

    apricot UKBF Regular Free Member

    413 41
    Upps! Correction:
    We were operating from Turkey to UK and from UK to EU
    Now switched to Turkey to EU and Turkey to UK
     
    Posted: Feb 17, 2021 By: apricot Member since: Apr 7, 2012
    #19
  20. GuyMor

    GuyMor UKBF Regular Free Member

    121 5
    Makes sense now...

    Our volumes to the EU are tiny (sometimes 2-3 boxes to a client) so I think setting that operation is not really feasible for us.

    Did you have to have some kind of business entity in TR or your supplier handles it?
     
    Posted: Feb 17, 2021 By: GuyMor Member since: Mar 23, 2016
    #20