On November 27, 2023, the European Union and New Zealand opened a new chapter in their economic cooperation. The two partners have been negotiating the free trade agreement for a long time, and now the European Union has ratified it. The Council Decision (EU) 2024/244 highlights the mutual commitment to improving market access and promoting economic growth between the two regions.

Overview of the Agreement

The agreement marks a significant milestone in the relationship between the European Union and New Zealand. It is designed to simplify trade processes, reduce tariffs, and remove barriers to facilitate a smoother flow of goods, services, and investments. Beyond the economic benefits, this agreement also represents a strong political bond with the aim of strengthening relationships and promoting common values on a global level.

Economic Implications and Benefits

For EU companies, the agreement initially means a significant reduction in trade barriers. The elimination of tariffs and quotas will facilitate market access for a wide range of products and services. This can lead to an increase in trade volume between the EU and New Zealand and open up new markets for EU companies.

The agriculture and food industry of the EU could particularly benefit from the agreement. With simplified trade conditions, EU agricultural products and food can gain a larger market share in New Zealand. Conversely, EU consumers benefit from a greater choice of New Zealand products.

Furthermore, the agreement also includes provisions on services, investments, intellectual property, and sustainable development. Therefore, EU companies can expect improved legal frameworks and better protection of their rights in New Zealand. At the same time, EU companies need to adapt to the new trade conditions and reconsider their competitive strategies. Additionally, some sectors, such as the automotive industry, may face pressure from increased competition from New Zealand.

Future Prospects and Strategic Importance

The free trade agreement between the EU and New Zealand brings both opportunities and challenges. It is therefore important for companies to carefully analyze the impact of the agreement on their specific business areas and develop appropriate adjustment strategies. As always, the customs experts at Gerlach are here to assist you and provide support. Please contact us if you have any questions about the free trade agreement between the EU and New Zealand.

The implementation of the new system will take place in 2 phases. The first phase, beginning on 1 March 2024, will see the transition from paper T2L(F) documents to their digital counterparts within the PoUS system. The second phase will incorporate the customs goods manifest, expected to be implemented by the third quarter of 2025.

What does this mean for your company?

To continue issuing T2L(F) documents, your company will need to access the PoUS system via the EU Customs Trader Portal, which requires eRecognition level 3. Paper T2L(F) documents will be phased out and replaced by a Movement Reference Number (MRN) generated through the new system. This MRN must be presented to the customs authorities of the country where the goods arrive. We recommend that companies review their supply chains to identify any necessary adaptations to this new process.

Gerlach Customs is here to support you

To access the PoUS system, you must log into the EU Customs Trader Portal, which necessitates eRecognition level 3. If you have any questions about this process, we will be happy to assist you. Please do not hesitate to contact your local Gerlach office regarding the use of these documents or the new system.

Customs regulations in Germany

As in other EU countries, importers in Germany must present a number of documents before allowing foreign goods into the country. These include the commercial invoice, the packing list, the certificate of origin, the waybill for sea freight or the air waybill for air freight.

In addition, it is necessary to register for an EORI number. Only companies with such a number are authorized to import or export goods within and outside the EU. If you are importing goods from the USA to Germany, you should also consider the following aspects:

• Note any restrictions in relation to certain goods
• Apply for an export license if required
• Take into account the applicable customs regulations: Imported goods from the USA and non-EU countries must be declared. The amount of customs duties is regulated in the Customs Ordinance § 29.
• Know all the important requirements regarding the payment of taxes. The contact for this is the General Customs Service. As long as the customs duties and sales tax due on the imported goods are not paid, Customs will retain the goods.
• Disclose the freight price. If this is not apparent, the value of the imported goods is estimated to determine the customs duties.
• Provide transparent information about the payment of freight costs. The key here is who pays the freight charges. If the shipper from the U.S. pays them, it is important that they are listed as line items on the invoice. Otherwise, the importer may be billed twice for the import duty.

Although there are not many restrictions on importing into Germany, some products are subject to additional regulations. These include pharmaceuticals, chemicals, steel and iron products, clothing and textiles, and vegetables and fruits. More detailed information on these and other products can be found in the TARIC database.

In mid-2021, the EU abolished the threshold at which e-commerce transactions in the EU are subject to EU VAT and a customs declaration. This means that all imports to EU countries – regardless of the value of the goods – are now subject to VAT.

An electronic import one-stop-shop portal has been introduced through which non-EU businesses can register for EU VAT and the correct amount of VAT will be paid to the Member State to which it is due. This simplifies the process by allowing you to collect, declare and account for VAT and pay your invoice directly to the EU tax authorities via a periodic tax return (for goods up to a value of €150).

For your customers, this means more price transparency: when they buy from a non-EU seller registered in the One Stop Shop, the VAT is part of the price they pay to the seller.

However, the best tip is: Find a reliable and competent customs service provider like Gerlach. We will take care of all customs-related matters for you and ensure that everything runs smoothly, while you can concentrate on your core business!

Export to Europe – why?

Over 748 million people call Europe home. The continent’s 47 countries have a wide range of socioeconomic demographics, but there is one commonality that should be of interest to ambitious online entrepreneurs: the rapid growth of e-commerce.

Driven by rising Internet penetration – and the pandemic, of course – 2021 was a milestone year for e-commerce in Europe, as the number of online shoppers passed the 500 million mark for the first time. And now the part that should really interest you: Cross-border e-commerce in Europe has grown to more than 25% of the region’s total online sales, as consumers increasingly look to foreign brands in search of new products and better prices.

In 2016, the Transatlantic Trade and Investment Partnership (TTIP), a proposed comprehensive trade agreement between the European Union (EU) and the United States to promote trade and economic growth, ended without an agreement. Nevertheless, the U.S. and the EU remain solid trading partners, accounting for one-third of global trade.

However, before you rush to draw a big circle around Europe on your map of sales targets, there are a few important things to keep in mind.

Choose the right markets for your business

The largest e-commerce markets in Europe are the United Kingdom, France, and especially Germany. Consumers in these markets are used to shopping online and feel comfortable buying from sellers abroad.

Perhaps you are already receiving inquiries from potential customers abroad. Look at your web analytics – is there traffic from new markets you haven’t tapped into yet?

Research your target country thoroughly. Is the demand for your products high enough to make shipping there a worthwhile investment? If there is already a lot of competition from domestic suppliers, how can you align your business to stand out from the competition?

Look at which European markets your U.S. competitors are selling to – because if they’re shipping to a particular country, there must be a healthy customer base there.

A good strategy for your European expansion is to focus on a few select markets first, like Germany. Then you can focus on the markets with the best visible results and expand there. But please note: Depending on your business model, you also need to consider tax aspects. For example, tax registration may be required in the respective country. It is best to seek comprehensive advice from competent experts with many years of customs experience.

Whatever your business, contact Gerlach Customs today! We help you reach new international markets with minimal effort and maximum profit.

Here we would like to briefly explain three essential aspects regarding the customs clearance of goods.

1) Third country: The USA is a third country for Germany. In terms of customs and foreign trade law, exports from Germany to the USA are therefore equivalent to any other export to a third country.

2) Tariff level: The tariff level is basically low. Exemption from customs duties is provided in the customs tariff for some products from the agricultural sector. In the commercial sector, many goods are also duty-free, for example in the areas of machinery and apparatus and electrical goods.

3) Responsible customs authority in the U.S.: Responsibilities for the regulation and monitoring of international trade in the U.S. are divided among several federal agencies. There may also be different ancillary costs depending on the state.

Conclusion:

Taking into account all the rules and regulations, it is therefore important to submit all the required documents correctly and in detail, as well as to comply with the requirements. To ensure a smooth and time-saving process, it is recommended to hire a good and experienced customs service provider like Gerlach.

Do you have any further questions? We at Gerlach will be happy to support you!

Background: Due to e-commerce, the import of so-called small consignments has been increasing massively for years. In some cases, foreign exporters deliberately declare fictitious low values. Due to the mass of consignments, this led to a disadvantage for domestic suppliers, for whom there was no VAT exemption. In addition, the treasury lost considerable revenue. For this reason, the EU VAT digital package stipulated that the 22 euro threshold should be abolished on 1 July 2021 and import VAT should be due from the first euro.

Now German customs has introduced the new ATLAS module IMPOST (import clearance of postal and courier consignments). This web application is intended to help manage the increase in customs declarations for small consignments under 150 euros. According to German customs, the advantage of ATLAS-IMPOST is that the clearance processes are largely automated, which is particularly beneficial for e-commerce.

Compared to a standard customs declaration, less data has to be declared and the data exchange between the application participant and customs takes place exclusively via the web application. Incidentally, consignments of goods with a value of more than 150 euro as well as goods subject to excise duty or goods subject to prohibitions and restrictions will continue to be cleared via the specialised application “ATLAS customs handling” (standard customs declaration with full data ring).

Requirements for the use of ATLAS-IMPOST

Unlike the previous ATLAS declaration procedure, IMPOST is a web-based tool. In order to use it, companies must first apply for an “Import One-Stop-Shop” identification number (IOSS-ID). The import application is linked to the IOSS registration. Prerequisite: They must be private end customers. VAT is then calculated directly to the EU buyer at the time of sale and declared to the competent tax authority of the respective member state.

In order to be able to take advantage of ATLAS-IMPOST, companies should contact their local Gerlach advisor for information and to discuss any necessary preparations regarding the correct process flow. Contact us now.

On the one hand, it was decided to abolish industrial customs duties for imports into Switzerland, and on the other hand, it was decided to simplify the customs tariff structure [1] in Switzerland.

This means that industrial products [1] , which were previously still subject to customs duties, can now in principle be imported into Switzerland duty-free, i.e. without using a preferential agreement [2]. However, this exemption does not apply to agricultural products.

What are the advantages for suppliers and importers in the future?

In fact, suppliers of industrial products to Switzerland could now have the opportunity to reduce their sales price. This applies in any case if they were not already exempt from customs duties or if the exemption from customs duties could only be obtained through the use of preferential agreements of Switzerland or EFTA (free trade agreements or agreements with developing countries). In the latter case, the costs/risks for the preparation of the preferential proof of origin itself (e.g. EUR.1) or the authorisation as an approved exporter applied for for this purpose could possibly be omitted.

In addition to the customs amount itself, the advance payment fees of the customs service provider/freight forwarder are also omitted.

You emphasise the “could” – are there also challenges or stumbling blocks?

It should not be forgotten, also by suppliers both abroad and in Switzerland itself, that a large proportion of Swiss companies and thus of their customers subsequently export their products abroad themselves. These target markets, for their part, still have no plans for further tariff reductions.

If Swiss exporters have previously required proof of preference for subsequent imports into these foreign markets in order to benefit from preferential customs treatment (preferential origin), they will continue to do so.

Likewise, proof of so-called non-preferential origin will continue to be required if this was already currently necessary in order to access target markets at all or to avoid anti-dumping duties.

For these exporting companies, the preparation of the necessary proof of origin could now become more difficult and cost-intensive. In order to counter these difficulties, suppliers may also have to forego certain cost-saving potentials here.

(Depending on the constellation itself, this may also affect suppliers in Switzerland who in turn import input materials or goods and issue supplier declarations to Swiss customers).

The possible future challenges for the exporting company are based on the fact that for the calculation of origin required

• for the calculation of origin for these imported products
• now have to be procured and checked in a different or more complex way.

In any case, the exporting company should evaluate the need for action in this context in advance and in a timely manner.

Since the supplier is primarily responsible for providing these preliminary documents, this clarification should take place in consultation with him.

In addition, companies that export later may also have to coordinate with the customs service provider who makes the customs declaration for the input material. The latter recommendation is due to the following special feature (facilitation):

Quite a few companies in Switzerland belong to the so-called small or medium-sized enterprises (=SMEs). Not least for these, customs service providers have so far frequently, quasi “centralised”, taken over the verification of the preliminary documents (supplier’s preference certificates) upon import.

In the process, it was up to the customs service provider, in the sense of a point of entry for the most diverse types of proof of origin, to keep track of the very complex regulations of the possible proofs of origin in the context of the various agreements. He had to assess whether the type of proof of origin presented in each case and the form in which it was issued could be regarded as formally valid or not and, if necessary, provide assistance in requesting it from the supplier.

In the end, the later exporting company could, in the sense of facilitation

• the import declaration (eVV Import) created on this basis “with ticked preference
• as a preliminary document that is always the same in every situation, without any significant scope for checking, even for both types of origin mentioned above (preferential and non-preferential).

The same applies to importing companies in Switzerland that do not export later but issue supplier’s declarations to their customers.

In practice, this service was and is often associated with considerable risks for the customs service provider, both in terms of civil law and fines.

In addition, this service requires a valid proof of origin from the supplier at the time of the customs declaration, which makes such a “pre-service” by the customs service provider possible at all.

It is already becoming apparent for the future that many suppliers will now question the necessity of issuing such a proof of origin in view of the fact that imports are duty-free anyway. In view of the additional costs and risks involved, this does not seem incomprehensible. On the other hand, this would make the future provision of this pre-service by the customs service provider even more difficult.

What does this mean for existing clients or other companies? What should they pay attention to?

First of all, it must be noted that the obligation to declare customs will remain in place and, in our opinion, will not really become any easier. The declaration of the so-called preference concerns only one of 24 necessary fields.

Irrespective of customs duties, other duties such as VAT, VOC duties, mineral oil and automobile taxes will continue to be incurred and errors in the declaration can and will also lead to considerable fines in the future.

The obligation for proper tariff classification also remains in principle, even if the need for tariff elimination beyond the 6th digit no longer applies.

In addition, the Swiss Customs Administration is not bound by a tariff decision of a foreign authority. It is therefore advisable in future to at least compare this with the local understanding and, if necessary, to obtain binding tariff information from the Swiss customs administration as a safeguard.

The significance for the individual company in the form of an advantage or need for action cannot be answered in a blanket manner due to the initial situation described above. Our customers are both the suppliers, the recipients in Switzerland, but also the subsequent exporters and it therefore always depends on the individual situation.

However, with reference to the explanations given above, the following questions can perhaps be roughly outlined, depending on the respective role of the company.

For suppliers: 

Check cost-saving potential for imports, if applicable

• Customs duties,
• prepayment fees
• Costs for preparing proof of preference (for authorisation as an approved exporter, EUR.1, securing know-how of staff for declaration of origin)

For suppliers and exporters/creators of supplier’s declarations, the following must also be taken into account:

(as supplier see right side of table, as exporter see left side of table)

Finally, it remains to be said that Gerlach AG is happy to support you as well as your customers in this regard, also within the framework of the consulting offer.

Are there any valuable informative website links for this?

Yes, I can recommend the website of SECO – State Secretariat for Economic Affairs here: https://www.seco.admin.ch

[1] With a few exceptions from Chapters 25 to 97 of the Harmonised Tariff.

[2] Free trade agreements or so-called GSP agreements with developing countries, either bilaterally with Switzerland or as part of EFTA.

You can no longer delay the submission of import customs declarations, as was possible under the Staged Customs Controls that applied in 2021. Most customers will have to declare their goods and pay the corresponding duties at the time of import. (see link: https://www.gov.uk/government/news/less-than-a-month-until-full-customs-controls-are-introduced)

We can expect increased Customs Checks/controls at the border starting 1. January 2022

2. GVMS usage is mandatory starting 1.1.2022:

The goods vehicle movement service (GVMS) is a UK Government IT platform for moving goods into or out of Northern Ireland and Great Britain (England, Scotland and Wales).

From 1. January 2022, every transporter is obliged to register on this platform if they transports goods from the EU to the UK under the common transit procedure (= transit document) or in transit.

Without registration in the above (Goods Vehicle Movement Service) GVMS, a carrier will NOT be able to transit the goods via any port (incl. Folkestone) in the UK using this service from January 2022. Customs will reject the vehicle upon arrival in the UK at the latest.

All ports using GVMS for goods control will then require pre-deposited declarant references which will be merged into a single Goods Movement Reference (GMR). We already know a similar procedure today with the creation of the border pass.

Transporters who have not yet registered are urgently requested to do so immediately. For this a UK EORI number is required in advance. After registration  will be received a movement reference (under www.gov.uk the steps are explained). 

3. All products of animal origin (POAO) – for example meat, honey, milk or egg products will require an IPAFFS pre-notification.

These are three of many aspects that we think are important to consider. To understand all details and get the full picture of requirements please check the gov.uk Website. A document we highly recommend to look at is the The Border Operating Model.

We highly recommend trading companies to start the preparation, especially for transport companies being prepared on GVMS usage.

For more information around how to obtain a Government Gateway Account, get a GB EORI and register for GVMS please see:

GVMS Registrations Webinar available on YouTube Link here

GVMS Registration journey (specific for Non UK haulier) available on YouTube Link here.

However, there are now some important changes as of 1 January 2022, as reported by the Federal Statistical Office. Some of these changes have significant effects, so we ask you to prepare yourself sufficiently here.

We would like to draw your attention in particular to these two points:

1. for shipments to other EU Member States, the country of origin of the exported goods must be declared as of the reporting month January 2022.
2. for shipments to another member state of the European Union, the VAT identification number (VAT ID) of the recipient of the goods in the country of destination must also be declared in future.

For more information, visit the website of the Federal Statistical Office. Here you can find more information  on this topic.

The importing company was under great pressure. On the one hand, the customer received hardly any reliable information from the Far East as to whether the goods could even be produced and, if so, whether they would still arrive in Germany on time. This is because the BMG allocates fixed delivery slots; if these are not adhered to, the purchase contract is automatically cancelled by the Federal Ministry. On the other hand, the authorities were eagerly awaiting the urgently needed protective masks with which medical personnel throughout Germany would be protected against the dangerous Covid 19 viruses. But then suddenly everything had to happen very quickly.

Suddenly everything had to go quickly

The importer was informed at short notice from China that the goods were on their way to Germany. The delivery to the BMG could just barely go ahead if all parties involved would now give their best. Fortunately, he had chosen Gerlach Customs for the customs arrangements. The experts at Europe’s leading neutral customs service provider had already prepared everything and were now working flat out. As delivery had to be made the next day due to the fixed appointment slots, it was clear that the goods had to be loaded at 4 a.m. at the latest. A Gerlach employee from the compliance department did not hesitate for long and immediately pulled out all the stops to help the customer. In record time he processed the import declaration, made a few telephone calls with the handling agent and customs, until finally customs clearance was granted and the goods reached the Federal Ministry of Health in time.

The customer was enthusiastic about the professional work and commitment of the customs experts from Gerlach Customs. He will continue to handle further shipments of masks and protective equipment with Gerlach in the future. After all, he has experienced for himself how important it is to have a partner at his side who helps quickly and without complications – no matter what the circumstances.

The tax on plastic carrier bags also affects imports from third countries, such as Norway. It will already be levied at the time of import if the importer is not an Approved Stockholder – i.e. the tax will be paid each time a plastic carrier bag is imported. Being an Approved Stockholder means that the importer must periodically report the tax directly to the tax authorities in a periodic declaration.

According to the Swedish Tax Agency’s definition, a plastic carrier bag is a bag with or without a handle that is made of plastic. It is intended for consumers to pack goods in or carry home and is not intended for long-term use.

Exceptions make tax confusing

This means, for example, that paper bags with plastic handles or with a plastic film that allows the packaged product to be seen must also be taxed. The level for „free import” (import without tax) is 40 plastic bags per occasion.

Tax rate:
3 SEK/piece
30 øre/piece for plastic carriers with a capacity of not more than seven litres and a wall thickness of less than 15 microns (e.g. fruit and vegetable bags)

The tax is not levied on consumer packaging that is not intended for the packaging or transport of goods.

Examples:

• Dog bags
• Garbage bags
• Waste bag
• small freezer bags
• Carrier bags, for example made of paper, where plastic is only an additive of glue or paint used in the production process.

“Gerlach Customs can help you save time and money”

Gerlach Customs sees several advantages for companies that apply to the Swedish Tax Agency for an “Approved Stockholder” permit. One example is that as an Approved Stockholder you pay no tax when the plastic carriers are delivered to a buyer in another EU country.

If you would like help in applying for an “Approved Stockholder” permit or have any other customs questions, please contact us quickly and easily via the contact form.