Navigating through customs for smooth entry into the EU market
When goods are imported into the European Union, they need to be cleared through customs, before they can be brought into ‘free circulation’.
This process ensures that goods comply with EU regulations with regards to health, safety, environment and consumer rights, and that the appropriate duties and taxes are paid.
Ensure regulatory compliance
Avoid delays and penalties
Optimize duty payments
Customs clearance
To clear the goods through customs, an import declaration will have to be filed, which provides detailed information about the goods, their value, and other relevant data required for customs processing.
The import duty to be paid depends on the classification of the goods (according to the EU Combined Nomenclature), the value of the goods (generally, the transaction value plus any additional costs such as transport, insurance, etc) and the origin of the goods. Next to import duties, VAT and in some cases excise duty (for alcoholic beverages, tobacco products and mineral oils) and consumption tax (for non-alcoholic beverages), or other levies might need to be paid.
To have legal certainty in advance that the correct classification is applied when importing a specific product, companies can ask for a Binding Tariff Information (BTI) decision from the customs authorities.
The customs authorities are also responsible for ensuring that the goods comply with specific sectoral policies. The European General Food Law for example stipulates import requirements in terms of traceability, hygiene standards, and labelling. Pharmaceuticals and medical devices must be authorised and importers of textiles and clothing must adhere to labelling regulations, indicating fibre content, care instructions, and origin.
Based on a risk assessment, the customs authorities determine if the goods require physical inspection to verify the goods’ compliance with the declaration and EU regulations, before releasing the goods.
Who does the customs clearance?
Foreign business that do not have an entity in the EU can work with a customs agent to file the import declaration in their behalf. In the Netherlands there are many specialised customs brokers that offer this services, but many freight forwarders, carriers and logistics services providers also offer the service to their clients.
Foreign businesses that plan to bring their products to the EU market, will need to apply for an Economic Operators Registration and Identification, or EORI number, which the customs agent can use to clear their products.
Companies involved in international trade with the EU can apply for the Authorised Economic Operator (AEO) status, which offers considerable benefits to facilitate smoother and more efficient cross-border operations, such as simplified customs procedures, fewer physical customs inspections, simplified administrative compliance procedures, etc. A company will be licensed as AEO when it can prove that it complies with certain conditions related to security and administration in the supply chain. The AEO license is valid in all EU Member States. Most logistics services providers in HIDC’s member base have the AEO status.
Bonded warehousing
Instead of clearing goods upon arrival in the EU, it is also possible to place them in a bonded warehouse. In the Netherlands, there are different types of bonded warehouse with varying authorisations in terms of location and level of supervision. Companies that have a Type E bonded warehouse for example, can store products under bond, without physical restrictions, so they can be moved between multiple premises, allowing for more operational flexibility. Goods can be stored in a bonded warehouse indefinitely until they are imported into the EU, destroyed or leave the EU.
The advantage of storing goods in a bonded warehouse is that the payment of VAT and customs duties is postponed, or double payment is avoided when they are sold to non-EU customers. Most logistics services providers in the Netherlands offer the option of storing goods under bond.
Why the Netherlands
The Netherlands traditionally scores high in the various global rankings for customs efficiency and trade facilitation. The Dutch Customs Administration is well known for its practical and pro-active approach and aims to “perform proper checks but with as little administrative burden as possible for the business community and with minimal disruption to the logistics flow”. Most customs procedures are digitised and by collaborating with the business community, the customs authority continuously strives to further improve processes.
Please contact us for more detailed information. HIDC can make introductions to specialised member companies that offer custom advice and clearance services to foreign companies.
Any questions about customs?
Get in touch with Karin
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