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Brexit checklist: trade with the United Kingdom

  • Who is responsible for customs formalities?

    Incoterms® are part of the contract between the seller and the customer. This is important in determining who should bear costs such as transport or insurance. In trade with third countries, such as the United Kingdom, an important question arises: who is responsible for customs formalities? In addition to the costs associated with the management of customs documents, the parties concerned must also be able to clearly identify who will assume the role of exporter and importer.  

    The Incoterm® rule determines who assumes what role and bears the costs 

    The two best-known Incoterms® rules are at opposite ends of the spectrum. With an Ex Works (EXW) contract, the responsibility and role of the seller is very limited. He simply makes the goods available at his location. 

    The oppposite is Duty Delivery Paid (DDP), where the seller commits to deliver the goods “ready for use” to the buyer. With traffic within the EU, this mainly has consequences for the arrangements and costs of the transport. 

    However, as it concerns trade with third countries, the story does not end with the cost. In the case of international trade, i.e. since January 1st for the United Kingdom as well, customs formalities and costs are added. With EXW, these are for the buyer. In the case of a DDP, it is for the seller. That is why it is often advisable to consider other conditions of sale. 

    Role as exporter 

    A company with an establishment in the EU can act as an exporter under its own EORI number. From a fiscal point of view, there is an exemption from VAT because it is an export to a third country. However, this is more complex for a British company. A company without an establishment in the EU can apply for an EORI number within the Union. A customs declarant will be able to make the declaration on behalf of the non-EU company through an indirect representation.  

    However, the company must be represented in tax matters. After all, it cannot act as an exporter in VAT matters. A European salesman therefore makes life easier for a British customer if he himself carries out the export formatting. For all F, C and D Incoterms® rules (everything that is not Ex Works), the seller is supposed to bear the formatting and export costs.  

    Importing into a third country 

    The opposite situation occurs when a Belgian exporter sells in DDEP. By doing so, he commits to handle the entire process, including customs clearance in the UK. British subsidiaries or sister companies can assume the role of importer. But for companies not established in the UK, it is not easy to comply with the formalities.  

    The customs declaration can be made by a customs representative, but to act as an importer, the Belgian seller will need to be represented for tax purposes.  

    It is not just about EXW and DDP 

    Opting for DDEP is without a doubt very convenient, especially if your company delivers to individuals. And if your customer has extensive experience of importing and exporting to the UK, there is no harm in agreeing on an EXW delivery term. 

    However, for both the customer and the supplier, it often makes sense to choose a different incoterm® rule than DDP or EXW. For example, under an FCA contract, you can bring goods to the port terminal of departure. Under DAP, you deliver the cargo on site and the customer can take care of the customs clearance.  

     Incoterms® 2020 by the International Chamber of Commerce (ICC) (PDF, 499.38 KB)

    Incoterms® and the Incoterms® 2020 logo are trademarks of ICC. Use of these trademarks does not imply association with, approval of or sponsorship by ICC unless specifically stated above. The Incoterms® Rules are protected by copyright owned by ICC. Further information on the Incoterms® Rules may be obtained from the ICC website
  • Apply for an EORI number

    You need an EORI number in order to trade with countries outside of the EU (aka third countries). This number is based on your company number. More information on how to obtain this number here.
    You can also check if your EORI number is active

  • Knowledge of customs legislation and customs processes

    If you are already trading with third countries, you must apply the same rules with the United Kingdom as of now. If you lack experience in import and export, we advise you to contact qualified external companies. It could be, among others, a customs representative.

    For larger volumes, it is recommended to plan for an accounting and a software solution that include a customs module. 

  • Customs documents

    Each import and export must be accompanied by a customs document that must be sent electornically via the PLDA system of the Belgian customs. Customs representatives and logistics service providers can carry out these formalities for you. 

  • Verification

    Customs checks whether the information contained in the customs documents matches with the content of your shipment. These verifications may be based solely on documents but also on tools such as scanning. A certain percentage of shipments will be subject to a cmplete physical check. During such a check, you or your representative , must be able to provide assistance to local customs services.

    Some goods, such as food or military equipment, can only be imported or exported if the customs declaration is accompanied by the necessary authorizations. A container must also be degassed, for the safety of the person presenting the goods and customs.

    If irregularities are found, for example if the type or quantity of goods differs from the declaration, your shipment cannot be released.

  • Customs authorisations

    Customs authorizations simplify the process, allowing the temporary storage of goods or giving the possibility of working under suspension of duties and VAT. Via the 'Product sheets' page, you will find the types of authorizations concerned as well as how to request them.

  • Guarantee request

    If you use an authorization, there is a high probability that your goods will fall under a duty suspension system. This means that duties and VAT will not have to be paid until the plan is closed. For this, a guarantee or deposit must be made with customs, and this can be done in different ways. The simplest is in cash but the most common is what we call the global guarantee.