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Your learning module: Customs Declarations

“The UK is now a third country”. Ever since the UK departed from the European Union, we hear this statement over and over in all media outlets, but what does this mean?

Though the concept of being a third country and the responsibilities that come along this are not new to companies that had been previously trading with countries outside of the EU, this was certainly new for companies whose international business was solely with EU member states.

Before Brexit, trade between the UK and the EU was considered “domestic”, which means borders between nations were open and no customs formalities were needed for the movement of people and goods.

The separation from the EU meant that the borders were reinstated for trading and that the movement of goods and people between both territories had to comply with customs formalities, hence the UK became a “third country”.

This nevertheless and as mentioned before was not a new concept, the UK has been historically and actively complying with third country customs formalities with all other nations outside of the EU. However, given that the EU was and still is the UK’s main trading partner, becoming a third country with the community had a strong affect in the UK SME business community.

But what are these “new” customs formalities that businesses must fulfil to export and import goods in and out of the UK? These procedures are the “Customs Declarations”.

What are Customs Declarations?

Customs declarations are documents that businesses or individuals must complete when importing or exporting goods internationally. These declarations are a formal way to communicate to customs authorities the intention to move goods within countries and provide information about the nature of said goods: their origin, value, the parties involved – importer/exporter – and other relevant details that will allow the receiving customs authorities (HMRC in the UK) assess the relevant duties and vat due, and ensure international laws and trade regulations are followed, in other words, that the trade is customs compliant in the importing and exporting countries.

There are several different types of customs declarations, but the most common are export and import entries.

Export declarations are raised by the seller/exporter when goods have been sold to a foreign country and are to be sent out (exported) to the foreign buyer. The information in the declaration is used by customs to control the export of the involved goods, and to compile statistical information about the country’s foreign trade.

Import declarations on the other hand are raised by the importer in the buyer’s country and are used to calculate the taxes and duties applicable, as well as determine any other related measures/restrictions to the traded goods. Same as an export declaration, import declarations are legal documents used by customs authorities to ensure the correct implementation of trading measures and to enforce trade compliance, in addition to the correct calculation and payment of taxes and duties.

It is important to mention that in addition to import and export declarations, certain acts may also constitute a customs declaration – such as oral declaration by conduct, merchandise in baggage declaration, going through green or ‘nothing to declare’ channel, and other authorised customs declaration simplifications. The Gov.uk website holds detailed guidance and information on how and when businesses and individuals can use different methods to declare the goods through customs, for example:

Oral declaration by conduct

Merchandise in baggage (MIB)

The specific requirements for customs declarations may vary from country to country and often depend on the type of goods being shipped. It is essential that traders are diligent and aware of the procedures and country requirements they will need to comply with when trading overseas prior to the shipment of the goods, this to accurately complete the declarations, facilitate the movement of the goods across borders, follow and comply with international trade laws and eliminate any potential legal and financial consequences due to inaccuracy in the information declared.

In the UK, Customs Declarations are currently processed through two separate platforms, the Customs Handling Imports and Exports Freight (CHIEF) and the Customs Declarations Service (CDS), however, after 5 years of preparation, HMRC announced that CHIEF will be officially replaced by CDS by 2024, which will see customs declarations moving from a system based on paperwork (CHIEF) to a digital platform (CDS), providing businesses a more user-friendly and streamlined system with greater functionality. Import declarations were officially moved to CDS on 30 September 2022, and export declarations will move completely from CHIEF to CDS by 30 March 2024.

In most cases, traders would need to appoint a customs agent to complete declarations on their behalf, as specific software is needed to fill in these documents, alongside the set of skills and expertise required to correctly complete the information.

The documentation traders need to provide to complete import/export declarations for their shipments would vary depending on the type of goods traded, the trading country requirements as well as the method of shipment (sea freight, road, airway). However, the basic documents required are:

  1. Commercial invoice
  2. Packing list/Bill of lading / Airway bill / CMR.
  3. Other documents if applicable: health certificate, licences, certificates of origin, EUR1 movement certificates and similar documents.

As a minimum, this documentation needs to contain:

  1. Trading parties’ details (name and address)
  2. Incoterms
  3. Description of the goods and Commodity (HS) codes
  4. Origin of the goods
  5. Weights and packaging details
  6. Value of the goods and currency type

Please note the above information is a basic introductory guide to customs declarations; traders are strongly encouraged to approach a customs agent or trade adviser to obtain clearer and tailored guidance for their shipments, given that each export/import is different, and it depends on many circumstances that need to be addressed case by case.

At LCCI, we have teamed up with ChamberCustoms (A BCC company) and have a dedicated Customs Declarations department that can support traders with their import and export declarations. For more information about our services and support, please visit LCCI's website or email us, we are ready to assist you.

Prepared by: Regina Astrauskiene, Ana Ford-Sotelo and Elizabeth Skewes. Trade Documentation and Services Department.