Recommendations for customs broker able to act as indirect representative in EU?

Discussion in 'International Business' started by John_V85, Aug 4, 2021.

  1. John_V85

    John_V85 UKBF Newcomer

    54 4
    The (very large) freight forwarder we use has announced that they are only willing to provide a limited number of customs clearances into the EU each year under indirect representation. Not sure why; but it is what it is.

    We will neither need to find a new freight forwarder or an independent customs broker who is able (and willing) to act as an indirect representative but are finding it quite a struggle.

    Thanks in advance.
     
    Posted: Aug 4, 2021 By: John_V85 Member since: Jan 11, 2019
    #1
  2. Mike Godwin

    Mike Godwin UKBF Regular

    185 50
    Sorry to say, you'll find it almost impossible to find anyone to work with you on an indirect basis. Since Brexit in particular, freight forwarders have been inundated with companies asking them to be their customs agent in the traditional 'direct' way so have no real need to risk taking on 'indirect' work. Can I ask why you are seeking the indirect option?
     
    Posted: Aug 5, 2021 By: Mike Godwin Member since: Mar 27, 2018
    #2
  3. John_V85

    John_V85 UKBF Newcomer

    54 4
    We are based in the UK, with no establishment in the EU, so indirect representation is the only option.
     
    Posted: Aug 5, 2021 By: John_V85 Member since: Jan 11, 2019
    #3
  4. Mike Godwin

    Mike Godwin UKBF Regular

    185 50
    Without knowing the full details of your business with the EU it's difficult to offer accurate advice and many UK exporters to the EU are experiencing the same problem as yourselves.

    Outside of shipping parcels thru the integrators (DHL/UPS etc.) here are your basic options;
    1. Get each customer in each EU country to set up a Power of Attorney & customs clearance contract with a local freight agent in their respective country. This is a long tedious process if you ship to lots of individuals in lots of countries, plus I know from experience that customers are reluctant to get embroiled in all the bureaucracy involved.
    or
    2. Appoint or set up an EU distributor who can receive one bulk shipment from you for distribution throughout the EU. They too must set up a POA & customs clearance contract with a local freight agent.

    Not surprisingly, since Brexit, many UK companies are having to rethink their business model with ecommerce businesses likely suffering the most. Most of our customers took option 2 above and set up some form of representation in the EU during the lead up to Brexit.

    Apologies for not having more positive news for you...
     
    Posted: Aug 5, 2021 By: Mike Godwin Member since: Mar 27, 2018
    #4
  5. John_V85

    John_V85 UKBF Newcomer

    54 4
    Hi Mike,

    To add a bit of context, we operate an Amazon FBA business. Prior to Brexit we shipped mostly to the UK and let Amazon handle the re-distribution to mainland-Europe. Since Brexit, we have split shipments at source (China) to either UK or the EU, essentially operating 2 separate inventory pools. We don't ship directly to customers. We store in third party warehouses in the EU and ship in bulk to Amazon only.

    At first, the freight forwarder we used (one of the big ones) was happy to provide customs clearance as an indirect representative, but they appear to have had a sudden change of corporate policy. It's not clear.

    We'd rather avoid having to set up an EU branch if possible.

    John
     
    Posted: Aug 5, 2021 By: John_V85 Member since: Jan 11, 2019
    #5
  6. Mike Godwin

    Mike Godwin UKBF Regular

    185 50
    Thanks for that John.

    The reason why your freight forwarder has had a sudden change of policy is probably because In the case of miss-declared or unpaid import VAT or customs duties, Customs are most likely to pursue the indirect representative because there is no other EU based party to take action against. Therefore, the indirect customs agent should ensure that they have contractual arrangements in place to protect them from any non-compliance by their customer.

    May I suggest whoever receives the bulk inventory in the EU, arranges the customs clearance for you. Or am I missing something? It seems you're part way there so to speak....

    Mike.
     
    Posted: Aug 5, 2021 By: Mike Godwin Member since: Mar 27, 2018
    #6
  7. John_V85

    John_V85 UKBF Newcomer

    54 4
    Thanks Mike. I'm sure it's me (rather than you) that's probably missing something, but I'm not sure how easily the third-party warehouse we use would be able to arrange the customs clearance. I have assumed they are in the business of receiving already customs cleared goods.

    That said, the goods are stored with the contract logistics division of a relatively large logistics company so we're currently investigating using their freight forwarding and customs services (although I think these are third-party rather than in-house) also. Given we have a pre-existing relationship, they might be more inclined to provide an indirect service.
     
    Posted: Aug 5, 2021 By: John_V85 Member since: Jan 11, 2019
    #7
  8. Mike Godwin

    Mike Godwin UKBF Regular

    185 50
    Sounds encouraging John...good luck!
     
    Posted: Aug 5, 2021 By: Mike Godwin Member since: Mar 27, 2018
    #8
  9. Mike Godwin

    Mike Godwin UKBF Regular

    185 50
    Hi John.
    For UK companies shipping B2C single parcels with a value not exceeding Euro150, Taxamo Assured (www.taxamo.com) may be an option. Furthermore we have a customer who is liaising with Deloitte (www.deloitte.com) on local VAT payment for their larger shipments.
    Hope this helps...
    Mike.
     
    Posted: Aug 10, 2021 By: Mike Godwin Member since: Mar 27, 2018
    #9