The control and regulation of exports from the UK is governed by various pieces of international, EU And national legislation.
The majority of legislation having a direct effect on exporters and suppliers of goods from the UK is administered by HM Revenue and Customs
The scope of such legislation, however, is extremely wide
Export Licensing Regulations
Export Control Act 2002
Tangible goods
This Act introduced new controls on intangible transfers of technology and controls on the trade of such goods
The general control of exports of goods
The present system of export licensing controls covers the exportation, from the UK, of specified goods which cannot be exported without the provision of an export licence issued by the Department for Business, Innovation and Skills (BIS)
As regards goods falling under the Export Control Act, BIS has extraterritorial controls insofar as they relate to acts outside of the UK by a person acting under the control of a UK person
A full list of prohibited goods, the Prohibited List is provided in the Annex to Regulation (EC) 428/2009 and the Schedules to the Export Control Order 2008
There are four principle types of authorisations which are granted by the issuing of a licence
EU General Export Authorisation (CGEA)
National General Export Authorisations (NGAs)
Global Authorisations (Gas)
Individual licences (ILs)
The most common type of licence issued is for CGEAs and NGAs; for these exports an Open General Export Licence (OGEL) is granted
The OGEL removes the need to apply for individual licences for exports to scheduled trusted destinations
OGELs are usually open-ended and do not have an expiry date
The next most common type of licence is the Open Individual Export Licence (OIEL) which is granted to an individual exporter for regular shipments of certain goods to specified destinations
These are generally valid for two to three years, depending on the goods and the countries exported to
Licences are also required for transhipments
However, for movements of dual-use goods between EU MS, these are subject to free movement provided that they are not items listed in Annex IV to Regulation (EC) 428/2009
Even in the case of goods which, as a rule, require an export licence, exceptions are admitted. They are stated in Pt 2 arts 13-18 and Pt 3 art.24 of the 2008 Control Order
Any licence or other permission for the exportation of goods may be granted in general or to a particular person; and may be designated to expire on a certain date unless, renewed, subject to conditions.
It may be amended, suspended or revoked at any time on notice by the Secretary of State
Even when the goods are only taken out of the country temporarily, if they are licensable they must be exported under the provisions of the relevant Order
The exporter is not entitled to assign the authority to export the goods which he is
granted by licence unless he is expressly authorised by the licence to do so
Normally the licence is not transferable, but in the case of bulk shipments or similar exceptional cases the licence may be granted to “X, Y or any person or firm authorised in writing by them”
The export licence does not authorise the exporter to do an act prohibited by other enactments or regulations, such as regulations relating to customs or postal movements
Further, an export licence issued in the UK does not relieve the exporter from his duty to obtain an import licence in the country of importation if such a licence is required
Strategic goods
The control of the export of strategic goods is covered by the provisions of the 2008 Control Order (as amended)
Unlike the earlier Orders, certain requirements in these Orders have an extraneous effect and therefore certain activities, such as the passing of restricted technical information, can be subject to licensing and may constitute an offence if it is not licensed, even if the activity is carried on outside the UK
Export control lists are maintained under the Wassenaar Agreement
All participant nations have agreed to implement controls to prevent the proliferation of military and dual-use goods, whilst not affecting legitimate civil transactions
The export licensing controls are supported by a range of offences and penalties
These are all held in Pt 6 to the 2008 Order (as amended)
Endangered species of wild flora and fauna
The international trade in endangered species in wild flora and fauna is protected by an international convention known as CITES
The Convention is now enforced through both EU and national legislation
The main requirements are set out in Community Regulation (EC) 338/97
Objects of cultural interest
The control of the export of objects of cultural interest is administered by the Department for Culture, Media and Sport (DCMS)
The control powers in respect of these goods are made under the Export Control Act 2002 and are contained in the Export of Objects of Cultural Interest (Control) Order 2003
In addition to national legislation, there is also EU law
Customs Regulations
Introduction
The principal function of Customs in international trade is the collection of duties and taxes (including excise) on the exportation and importation of goods
Customs in the UK is split between HM Revenue and Customs, which is responsible for policy on customs matters and some residual control issues and the UKBA, which enforces customs regulations at the frontier
Customs regulations often also encompasses secondary “agency” functions and the application of controls on behalf of other government departments
These include i.a. the control of prohibited and restricted goods, the collection of statistical information, application of the Common Agricultural Policy (CAP) and export licence checks
The effect of the European Union on customs legislation
As a consequence of the implementation of the Single European Act, all frontiers between the then 12 MS of the EEC were removed, allowing for the free movement of goods
This meant the final removal of all duties and quantitative restrictions, as well as procedural barriers such as systematic checks by the customs administrations at internal frontiers
The Single Market changed customs procedures significantly with the concepts of export and import being replaced with dispatches or supplies and acquisitions or arrivals within what then became the European Community (EC)
Supply of goods to other Member States of the European Union
VAT
Whilst the Single European Act removed the frontiers between the MS, some forms of control remain to take account of the payment of VAT and excise duty and the collection of statistical information
Before goods can benefit from free movement between the MS they must be in free circulation
Since January 1993 VAT on the movement of goods has been accountable in the MS of destination, through the national VAT system
For all supplies of goods to other MS it is important for VAT purposes that evidence is retained in the trader’s records that the goods left the UK
The VAT system introduced in 1993 is transitional and it was intended that it would be replaced at some stage by what is referred to as the definitive VAT system
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Statistics
Proposals for the definitive system were produced by the European Commission
These proposals, however, are unlikely to be introduced until MS can align their respective national VAT rates and a number of MS are reluctant to do so
Obtaining accurate statistical information is extremely important for business and for government
For exports to countries outside of the EU information is collected via the customs declaration
However, within the EU, with the removal of frontier formalities, other measures have been put in place
The system introduced is called Intrastat and it requires supplied of goods to other MS who trade above a certain threshold to report their supplies on a monthly declaration
The legal basis for the Intrastat system lies in EU law, indeed the EU requirement to provide statistics on the movement of goods between MS was challenged as being contrary to free movement, by creating a quantitative restriction, but upheld as being necessary to provide information on the movement of goods
EU legislation is supplemented by various statutory instruments
🡪Excise
Excise is a duty levied on goods containing alcohol, tobacco or hydrocarbon oil and their derivatives, although certain goods are exempt
It is applied to all such goods irrespective of whether they are supplied domestically, to another MS or to a non-EU country
Excise is a national tax and is accountable in the country of consumption
Within the EU the rates of excise charged vary considerably between the MS and as a consequence strict controls are applied to the movement of such products
The legislation for the movement of excise goods is held in Directive 2008/118/EC concerning the general arrangements for excise duty, the associated implementing regulations in Directive 2009/684/EC and the Excise Goods Regulations 2010
Movements in excise goods within the EU are carried out under one of three procedures
Either in suspension to an authorised receiver of excise goods in another MS, where the excise must be accounted for on arrival in that MS
Between authorised excise warehouse keepers
Or as a distance sale, where the supply must be made duty paid
Excise becomes chargeable at the time of release for consumption
The movement of excise goods upon which the duty is suspended can only take place under the cover of an electronic administrative accompanying document
(EAD)
Offences of handling goods subject to unpaid excise duty or taking preparatory steps for the evasion of excise duty are treated as serious offences
It is also an offence to falsify any document including those integral to the excise control system. Therefore where the documents have been created fraudulently, the excise becomes immediately payable under arts. 7(2)(a) and 10 of Directive 2008/118/EC.
Later prosecution for this offence will not be bad for duplicity
In addition, HM Revenue and Customs can seize the goods
Where excise goods are stolen or lost, the owner is still potentially liable for the duty
Supply of goods to countries in the European Economic Area (EEA) or the European Free Trade Area (EFTA)
Similar to movements between EU MS, customs duties and charges having equivalent effect as well as quantitative restrictions on certain specified goods are prohibited between EU MS and EEA countries
Although Switzerland is not an EEA member, it also has a bilateral free trade agreement with the EU
Both the EEA and EFTA agreements with the EU only provide for a free trade area and do not extend to a customs union
Consequently, customs frontiers still exist and customs documents are still required for exports to EEA/EFTA countries, including certificates of origin
Supply of goods to countries outside of the EU and EEA
The basic policy for the export of goods from the UK has remained unchanged and depends on the fiscal and restrictive character of the goods intended to be exported
Where exportation does not involve the payment or refund of customs duties and the goods are not restricted, these formalities are relatively simple, but where the payment or refund of customs duties or licensing controls are involved, the procedure can become complex
Since 1993 and the creation of a single European customs territory, the European Commission, with the support of MS, combined the various pieces of European customs law into a single Code. This became the Community Customs Code and its implementing regulations
As an EU regulation this legislation is directly applicable in the MS and so requires no further re-enactment into national law, although the regulations are supplemented by an explanatory document and some national customs legislation
It therefore forms the basis of customs law in the UK and contains the provisions governing the exportation and importation of goods with countries outside the EU
A Modernised Community Customs Code (MCCC) entered into force in June 2008, however, whilst it has entered into force, its provisions will only be applicable once the associated implementing regulations have entered into force and are applicable
In summary, the effect of the MCCC will result in there being fewer customs procedures, greater simplification and computerisation of the new procedures and less reliance on paper documents and a move to trader self- assessment, more analogous to the way that domestic VAT controls operate
The Customs Code is supported by national legislation and, where EU law does not apply, national legislation takes effect
The main statute in this regard is the Customs and Excise Management Act 1979 (CEMA), although this is surrounded and supported by numerous other Parliamentary Acts and Regulations
Customs publish guidance on the provisions in these Acts in Customs notices
Customs requirements
The basic requirement of Customs legislation in respect of the exportation of
goods is that all such goods shall be entered under the export procedure
In order to do this, goods must be declared to Customs
Declarations can be made to Customs either directly or on behalf of third parties, acting as an agent or representative of the exporter
Customs declarations must be accurate
For goods leaving the EU as exports, EU law requires that they are declared at the customs office of export (the customs office in the UK) and, where those goods also travel through another MS, at the final customs office of exit from the EU
The basic export declaration procedures can be grouped into four categories
Standard entry prior to the goods departing the UK
Low value and non-statistical procedures
Simplified declaration procedure (SDP)
Local clearance procedure (LPC)
Normal declaration procedure
Sometimes referred to as pre-entry, this requires the exporter to present an electronic export declaration to Customs using the Customs computer system, CHIEF, and the New Export System (NES) to enter the equivalent declaration electronically
Where the goods are restricted or controlled goods, the declaration must be accompanied by the appropriate supporting documents
Simplified declaration procedures
Simplified procedures permit relaxations to be applied enabling exports to benefit from swifter clearance or the provision of reduced information at the time of shipment
The Community Customs Code provides for three such procedures
Incomplete declaration procedure
Simplified declaration procedure
Local clearance
In the UK these procedures are available as part of a range of options for exporters under the NES
New export system (NES)
In March 2002, as part of a range of new facilities and initiatives to computerise government by 2005, Customs introduced the New Export System (NES), enabling exporters to transmit declarations to Customs without the need to complete a paper declaration
The range of simplified procedures available in the UK, other than for low value or small consignments, is not limited to the following:
Simplified Declaration Procedure (SDP)
Local Clearance Procedure (LCP)
Designated Export Place (DEP)
SDP only requires a minimum amount of information to be transmitted electronically to Customs prior to export, supplemented later by a full statistical declaration
In terms of the law, SDP falls to be an incomplete declaration procedure under Council Regulation (EEC) 2913/92 art. 76(1)(a)
For low value consignments, there is a separate simplified procedure which is similar to SDP
To qualify, the consignment cannot contain dutiable or restricted goods and must be below a value of £ 600 and weigh less than 1000kg
Only a pre-shipment declaration is required to be made to Customs (there is not requirement for a supplementary declaration)
If the consignment is to travel through other MS, then an EAD must also accompany the goods and be marked “simplified exportation”
No supplementary declaration is required under this procedure
If the goods require an export licence then the normal procedure applies
In this case the exporter must present the licence with the full pre- shipment declaration
Certain simplified procedures are available to assist exporters who wish to have the customs controls undertaken at their, or other, designated inland premises. These are based on the local clearance provisions in the Customs Code.
The Local Clearance Procedure (LCP) and Designated Export Place (DEP) procedure are two such procedures
Exporters or their agents authorised to operate under LCP declare and customs-clear their goods electronically at either their own or other inland premises, without the normal formalities having to be carried out at the port or export
Consequently, consignments generally pass through the port unhindered
Exporters operating this procedure have a choice of either submitting a full pre-shipment declaration or a simplified declaration, which will need to be followed up with a supplementary declaration
To operate the procedure the exporter must first be authorised by Customs
DEP is a similar system, but is for approved operators who are able to operate their own inventory systems which have been approved by HM Revenue and Customs and are linked to CHIEF
Unlike LCP, excise goods cannot be moved under DEP
Goods moving through a DEP can also move under a simplified declaration procedure (including LCP), but it is the declarant and not the DEP operator that needs to be authorised for the procedure
Modernising Customs requirements and simplifications
Ahead of the changes which will be brought about by the Modernised Customs Code in 2013, other fundamental changes were made to EU law in 2008 and 2009.
The changes were published in Council Regulation (EC) 648/2005 and Commission Regulation (EC) 1875/2006 and introduced new concepts within customs procedures
The first is the Authorised Economic Operator (AEO) status, which enables authorised importers, exporters or their agents to benefit from favourable treatment with regard to customs controls relating to security and safety and other simplifications
In order to acquire EAO status exporters have to meet certain criteria
There are three types of certificate which will offer differing status and benefits
◊ a) customs simplification of procedures
◊ b) security and safety and facilitation from customs controls
◊ c) customs simplification and security and safety (an amalgamation of (a) and (b))
In addition to the AEO status, changes to the Community Customs Code also introduced additional requirements, particularly for exports
For goods leaving the EU a requirement for pre-departure information was introduced, except where those goods are passing through without stopping
The new “export summary declaration” is required where a full declaration is not required
Information required to be declared to Customs
Whilst simplified procedures generally defer the requirement to supply information to Customs, the overall information requirement remains the same as that required in a declaration for goods declared under the normal declaration procedure
There are one or two key items of data which Customs rely upon and which are worthy of individual note
The commodity code is one example
This code identifies the goods and allows Customs to apply the appropriate controls on exportation and correct rates of duties and
taxes at importation
All import and export duties are applied using the Common Customs Tariff in the EU
In addition to the commodity code, Customs require an accurate value of the goods for statistical purposes and in the importing country in order to assess the customs duty
The value of the goods to be declared at import is primarily based on the sale price actually paid or payable by the buyer to the seller when sold for export. This is known as the “transaction value”
The objective of customs valuation is to reach a fair, uniform and neutral system excluding the use of arbitrary or fictitious values
The transaction value can be used except where there are certain restrictions as to the disposal of the goods in the importing country, or where the sale is subject to conditions or consideration which mean that the value of the goods cannot be determined, and provided that the buyer and seller are not related
◊ Where the transaction value cannot be used then other secondary methods must be considered
The statistical value for export purposes is the price charged to the buyer, plus an adjustment to include all the costs up to the point of loading on the ship or aircraft
Postal exports
Customs legislation and powers are applied to postal movements by regulations made under the Postal Services Act 2000 s.105
New regulations were introduced at the end of 2011: the Postal Packets (Revenue and Customs) Regulations 2011
Unlike the regulations which they replaced, the 2011 Regulations apply both to the Royal Mail and other postal operators which do not provide a universal postal service
Also under the new Regulations, Customs allows goods, other than drawback goods, to be exported by parcel post without being pre-entered or post-entered for Customs
A customs declaration has to be completed which can be obtained from the Post Office or Parcel Force or other postal operator
The postal despatch documentation has to be affixed to the package, accompanied by the appropriate supporting documents
Customs trader records and accounts
The Community Customs Code requires that any person directly or indirectly involved in the trade of goods with Customs must retain and provide the relevant documentation
Under the Customs and Excise Management Act 1979 traders must preserve records
Transit procedures
Customs transit procedures facilitate the movement of goods between countries by reducing the border formalities and removing the requirement to pay duties and taxes at each and every international frontier
There are currently three international transit systems in effect
Common transit system
Community transit system
TIR
Common and Community transit
The Community transit system allows non-EU goods and certain EU goods not in free circulation to transit MS and EFTA countries unhindered
The legal provisions for the system are contained in the Community Customs Code and its implementing regulations, supported by national legislation
The system is also extended to EFTA countries under the Convention on Common Transit
In relation to exports from the UK, two types of transit procedure apply
The Common Transit system where goods either travel to or through EFTA countries
The Community Transit system, for goods not in free-circulation within the EU transiting other MS or travelling between MS via non-EU/EFTA countries
Certain goods are exempt
The objective of the transit system is to ensure that goods are not diverted onto a country’s domestic market without proper accounting for taxes and duties
This is achieved by appointing a principal, who is responsible for ensuring that transit formalities are carried out correctly and that the goods are presented to Customs in the country of destination
There are also simplified procedures for approval consignee/consignor status companies.
These enable the exporter/importer to carry out transit formalities at their own premises and this can be a DEP or LCP location
The TIR system
The TIR system is based on similar objectives to the Common and Community transit systems, but applies between the contracting countries to the TIR Convention
Unlike the Common and Community transit systems, TIR is based on the use of approved vehicles and containers
For goods entered under the TIR system a TIR Carnet must be obtained from a guaranteeing authority
This Carnet is evidence that the carrier has met some basic criteria
Since 1993, the EU has been defined as a single territory for the purposes of the TIR Convention, therefore TIR Carnets should not be used for movement between EU MS
Certain goods are prohibited from moving under the system because of the increased risk of fraud that they present
Duty suspense and relief schemes
There is a range of facilities provided for in customs regulations which enable duties and taxes to be relieved or suspended for certain goods
These schemes include Outward Processing Relief (OPR), Outward Processing Textiles (OPT), Inward Processing Relief (IPR), Drawback and a range of customs warehousing facilities
The provisions for such procedures are found in EU legislation, although the authorisation for the procedures is currently given at a national level
There is also a range of documents which apply to the procedures
Outward Processing and Inward Processing Relief
Under the Outward Processing Relief (OPR) scheme, goods can be sent to non-EU countries for processing and returned with total or partial relief from taxes and duties in the processing country and on re-importation into the EU
The legal base for OPR is held in the Community Customs Code and its implementing regulations
Textile products are excluded from OPR and must be entered under a separate scheme called Outward Processing Textiles (OPT)
The benefits are the same as for OPR, but the application for the OPT is submitted to the Department for Business, Innovation and Skills (BIS)
The IPR scheme is similar to OPR, but allows importers to receive goods from non- EU countries for incorporation into a process, again with total or partial relief from duty and taxes, provided they are re-exported and it can be demonstrated that the goods imported are part of the final exported product
The legal base for IPR is also held in EU legislation
Both schemes have restrictions on goods which are eligible
Under OPR goods must be in free circulation in the EU unless they are held under the IPR procedure and no refunds or remissions can be claimed at export
The IPR scheme is even more restrictive in that one of the primary conditions for entering goods to the scheme is that authorisation must not harm EU suppliers, which produce the same goods, but are unable to match the non-EU products on the basis of price
For certain sensitive commodities produced in the EU an economic test may be required
Application for this type of authorisation must be submitted to the appropriate department with supporting evidence that the equivalent goods are either not produced in the EU or there is some other valid reason why these goods cannot be used
For less sensitive products an economic test is not required and the application for the scheme is made as part of the customs import declaration procedure
In addition to IPR, a Drawback scheme is also available
Drawback applies to goods which have previously been imported with all the relevant taxes and duties paid and are subsequently exported, either in the same state, or following a process, whether or not it has changed their form or character
The procedure enables any duties and taxes paid at importation to be reclaimed
The relevant law on Drawback is contained in EU and national legislation
Return of unused imports
Subject to certain conditions, an importer is entitled to be granted relief from the payment of any import duty for returned goods
Where the end-use for which the goods in question are to be imported is no longer the same, the amount of import duties is reduced by any amount collected on the goods when they were first released for free circulation
Should the latter amount exceed that levied on the entry for free circulation of returned goods, no refund shall be granted
Provisions supplementing the basic rules on returned goods also exist in the implementing regulations to the Code, the Customs and Excise Management Act 1979 and specific provisions exist for VAT, excise and CAP goods
Also note that import duties cannot be reclaimed for goods imported on approval, on sale or return, or on similar terms
Warehouse goods
As a facilitation measure for importers, import goods can be permitted entry into the EU without payment of taxes and duties and kept in an approved warehouse until such time as they are needed, when the goods must be entered to another customs procedure. Where that procedure requires, taxes and duties must then be paid
Under EU law there are six types of customs warehouse facilities and a further additional excise warehouse facility. In the UK, Customs operate four of the six types:
Type A: a public warehouse, under the responsibility of the warehouse keeper
Available for use by any person and it is responsibility of warehouse keeper to ensure goods can be accounted for
Type B: private warehouse, where warehouse keeper is same as depositor, but is not necessarily owner of the goods
Appropriate for individual traders and applies where warehouse keeper is bound by declaration to the warehouse procedure
Warehouse keeper is responsible for some or all of the Customs documentation
Type D: private warehouse, where warehouse keeper is same as depositor, but is not necessarily owner of the goods
This type is similar to Type C, with important difference that tax and duty point is taken at the time when the goods are entered to the
warehouse procedure, as opposed to the time when the goods are removed from the warehouse as is the case with Type C warehouses
Appropriate for individual traders and warehouse keeper is bound by declaration to warehouse procedure
Warehouse keeper responsible for some or all the Customs documentation
Type E: private warehouse, where warehouse keeper is same person as depositor of goods, but not necessarily owner and it is the trader’s system of stock control which is used to account for the goods
With the exception of Type E, the other warehouse types require a physical warehouse – a building where the goods are stored
For Type E approved traders, the goods can be stored at any site, or may be moved between any site, which has previously been notified to Customs
For excise warehouses, a guarantee is necessary to secure the taxes and duties whilst the goods are in storage, whereas for Customs warehouses, a financial guarantee is rarely required
As a general rule, no manufacturing process is allowed on goods whilst in a warehouse,
Removals from a warehouse for export must be declared either under the normal or simplified procedures using the NES
EU preference arrangements
Some countries which are not members of the EU grant imports from an EU MS preferential tariff treatment
The exporter has to comply with certain requirement to enable his customer in the preference-giving country to claim preferential treatment
The basic condition is that the exported goods must comply with the origin rules governing the particular preference
In addition the EU also has Stabilisation and Association agreements and Interim Agreement on trade and trade-related matters or is in negotiation with countries with the intention of a customs union, or for some, eventual accession to full EU membership
As a general rule there can be no entitlement to both export relief in the EU and preferential tariff treatment in EFTA, Israel, West Bank/Gaza Strip and the Faroe Islands
For exports to other countries, both can apply provided the final product is deemed as originating in the EU
Customs appeals
In January 1995 an appeal system was introduced into customs law
Tax Tribunal
Two tiers
Customs civil penalties
One aspect of the increasing influence of EU law on HM Revenue and Customs’ national powers is the inclusion of certain EU provisions placing obligations on MS to enforce EU requirements or ensure compliance by exporters, importers and ff with those provisions
Criminal sanctions were not adequate/useful
In order to address this and bring customs law into line with VAT and excise, a range of civil penalties was introduced in 2003. The penalties are set out in two regulations:
Customs (Contravention of a Relevant Rule) Regulations 2003 in relation to imports
Export (Penalty) Regulations 2003 in relation to exports
In respect of the actual penalties, there are two levels: £ 2,500 for serious contraventions and £ 1,000 for less serious contraventions
Penalty can be reduced and under EU law principles any penalty must be proportionate to the seriousness of the non-compliance, error or deficiency
An appeal can be made against the levy of a penalty or the amount of penalty
following a review by HM Revenue and Customs
Customs Offences
Concept of customs offences
As well as the civil provisions and penalties, the measures dealing with these topics contain, in many instances, criminal provisions as well
The concept of customs offence is much wider than merely constituting an infringement of the Customs and Excise Management Acts and regulations made thereunder.
Customs offences and EU law
At present, under the principle of subsidiarity, EU law only extends to the provision of offences and penalties in some limited areas
It does, however, place certain requirement on MS to ensure that their obligations are fulfilled in terms of enforcement
Whilst EU law only places obligations on MS in relation to creation of offences, it can have a direct effect even in areas where the MS are deemed to have competence
The European Commission is now seeking to align criminal sanctions in certain areas of customs law
Indeed, one of the primary reasons behind the 2007 revision of the Community Customs Code was to introduce such provisions, although in practice the MCCC only provides for criminal penalties
Application of customs offences
CEMA s.68(2) extends criminal liability to any person knowingly “concerned in the exportation” of goods which require an export licence
Activities which amount to being “concerned with exportation” are not limited to the actual taking of the goods out of the country, but a person can be “concerned in the exportation” by doing things in advance of the time when the ship or aircraft leaves, e.g. by handing over the goods to the buyer’s agent the night before the ship or aircraft leaves, knowing that the agent will take the goods out of the country without a licence
In respect of goods requiring an export licence, the granting of a licence does not prevent a person from being liable under the relevant Export of Goods (Control) Order, where he has knowingly attempted to export prohibited goods
It is also noteworthy that some customs offences are absolute offences and require no mens rea for the offence to be complete
There are also instances where the burden of proof in relation to certain customs offences may be transferred from the Revenue and Customs Commissioners to the defendant
In instances where the burden of proof shifts from the prosecution to the defence, the standard of proof required is lowered from the criminal standard of “beyond reasonable doubt” to the civil standard of “on a balance of probabilities”
Finally, Revenue and Customs powers are covered by the Police and Criminal Evidence Act and this confers upon them certain rights and restrictions
Fines, forfeiture of goods and restoration
The customs Acts provide heavy fines and terms of imprisonment for persons contravening the customs regulations
In addition, the goods in respect of which the offence is committed may be treated as “prohibited goods” and declared forfeit to the Crown
Customs may also seize as liable to forfeiture any ship, aircraft or vessel that has been used to carry goods liable to forfeiture, provided that the owner is aware of the carriage of the prohibited goods or that he could have discovered the goods had he used due diligence
As regards forfeiture, a number of points should be noted
The forfeiture of smuggled goods is only possible if the customs authorities have lawfully seized them. There is an established procedure which must be undertaken before goods can be condemned as forfeit
The legality of the seizure sometimes concerns a question of interpretation of the Customs Act
The powers of the Customs authorities in relation to the forfeiture of goods are capable of review under the provisions relating to the free movement of goods under EU law
However, where such forfeiture concerns a matter of public morality, policy or security, then the seizure will, in the vast majority of cases, be lawful
State authorities are (as opposed to art. 1 ECHR) permitted to control the free circulation of goods and, if necessary, to forfeit those goods where this can be justified on the ground of public interest or to secure payment of taxes and duties
After goods have been condemned as forfeit to the Crown, HM Revenue and Customs has discretion to restore them to their original owner under such terms as they think proper
A refusal to restore an item by Customs can be challenged, the only recourse being appeal to the Tax Tribunal
Where an appeal is taken to the Tribunal in respect of a refusal to restore an item, then the burden of proof is on the appellant and the standard of proof is to the civil standard (on a balance of probabilities)
Counterfeit and pirated goods
Customs are also responsible for controls in respect of the prohibition of counterfeit and pirated goods
Council Regulation (EC) 1383/2003 provides that such goods are liable to forfeiture and destruction
For patented goods, where such goods are imported into the UK without being licensed by the owner of the patent, Customs must disclose the names of the importers to the owner of the patent because the illicit importation constitutes a tort against the owner of the patent and every person who, though innocently, becomes involved in the tortuous acts of others, comes under a duty to assist the injured person by not giving him full information by way of discovery, although he personally may not be liable in damages to the third person
However, where goods do not actually infringe the owner’s trademark, then the powers of seizure are not engaged and any challenge (by judicial review) to a refusal to seize the goods will be refused
Just skim through!Chapter 32: Standardisation of Terms and Unification of International Sales Law (
Introduction
Frequent attempts have been made to standardise the terms on which export and import business is transacted
Such attempts can be classified into 3 groups
First, uniform rules of general character have been issued, which are intended to apply to all types of international trade transactions
Second, in some types of business, mainly in the trade in commodities or in capital goods, there are standard contract forms relating to specified international transactions, which normally apply only if used by the parties to the contract
Third, exporters and importers frequently incorporate general terms of business into their contracts, which are intended to apply to all transactions between them, unless they are expressly excluded
Uniform Rules of General Character
The most important sets of uniform rules applying to international trade transactions
are formulated by international organisations which have as their object, or as one of their objects, the harmonisation of international trade law
These organisations are intergovernmental, regional or non-governmental
United Nationals Commission on International Trade Law (UNCITRAL)
The objective of UNCITRAL is to further the progressive harmonisation and unification of the law of international trade
The most important texts
International Conventions
United Nations Convention on Contracts for the International Sale of Goods
United Nations Convention of the Carriage of Goods by Sea
Model Laws
Other Instruments
UNCITRAL Arbitration Rules
Legal guides
International Chamber of Commerce publications
The ICC has contributed valuable publications which serve to ease the flow of international trade
Incoterms
American Uniform Commercial Code
Not carried out by federal legislation but by the adoption of a uniform law
Standard Contract Forms Applying to Specified International Transactions
The international trade in many commodities and capital goods is conducted on the basis of standard contract forms
Some of these are issued by international trade associations
Others are drafted by the United Nations Economic Commission for Europe
Others again are used in construction contracts for works and installations abroad
All types of standard contract have in common that they apply only if the parties to a contract of sale adopt them and that they normally can be varied by agreement of the contracting parties
General Terms of Business Adopted by Individual Exporters
Some important clauses
General clause, which subjects every contract of sale to the seller's conditions of sale
Retention of title clause
Price escalation clause
Interest
Force majeure clause
Choice of law clause
Arbitration
Jurisdiction
The Uniform Laws in the United Kingdom
The Uniform Laws on International Sales Act 1967
Application of Uniform Laws only if adopted by parties
Mandatory provisions of applicable law cannot be contracted out of (when the parties adopt the Uniform Laws)
General Limitations of Uniform Laws
It is recognised that 2 of these general limitations are
The restriction of these Laws to cases in which the parties have chosen them as the applicable law of the contract and
The rule that the parties cannot exclude the mandatory provisions of the applicable law by their adoption of the Uniform Laws
Restriction to contracts between parties in Convention States
The Uniform Laws, as drafted, apply to all cases in which the parties to the
contract have their places of business in the territories of different States or, if they have no place of business, are habitually resident in different States
The Laws do not require that the places of business or habitual residence should be in the territories of the Contracting States
However, a State, when ratifying the Conventions embodying the Uniform Laws, may stipulate that it will apply them only if each of the parties to the contract has his place of business or habitual residence in the territory of a different State which likewise has ratified the Conventions
Contracts of International Sale
The Uniform Laws apply only to contracts for the international sale of goods
They do not apply to domestic transactions
A contract of international sale, within the meaning of the Uniform Laws, is defined as a contract of sale of goods entered into by parties whose places of business are in the territories of "different contracting States"
The Uniform Law on International Sales
The Uniform Law on Sales does not define the trade terms customary in international trade
Where the parties have agreed on a trade term (such as FOB or CIF) the regulation intended by that term takes precedence over the provisions of the Law
Further, the Law does not prevent the parties from agreeing on a uniform interpretation of these trade terms
The Uniform Law does not use the distinction between conditions and warranties
It distinguishes, however, between two types of breach of contract, namely a fundamental and a non-fundamental breach
The principle of the Law is that where a breach is of fundamental nature, the person who suffers it may declare the contract as avoided
However, if the breach is not fundamental the contract continues to be in existence, subject to the right of the wronged party to claim damages
Of further interest are the provisions of the Uniform Law on the rights of the buyer if the seller tenders or delivers "non-conforming goods"
Such a failure will normally constitute a fundamental breach of the seller's obligation to deliver the goods contracted for
The Uniform Law on Formation
Three provisions of the Law on Formation deserve special mention
First, the Law attempts to reconcile the different attitude of English and European continental law to the problem of the firm offer
Second, the Uniform Law on Formation attempts to solve the problem of an acceptance containing additional stipulations
Third, it deals with the case of the late acceptance
UN Convention on Contracts for the International Sale of Goods (1980)
The Vienna Convention and the Hague Uniform Laws
Although founded on the Hague Uniform Laws, the Vienna Convention differs from them in form and, in some respects, in substance
Applicability of the Vienna Convention
The sphere of application of the Vienna Convention is different from that of the Uniform Laws
While the latter are intended to apply in principle to all international sales but enable an acceding State to restrict their application to sales contracts between parties who have their place of business or habitual residence in Contracting States,
The Vienna Convention - realistically - restricts its application to contracts between parties who have their place of business in different Contracting States, or to cases in which the proper law of the contract is that of a Contracting State
The Vienna Convention and the national law
While the Uniform Law on International Sales is intended to be a self-contained code as regards the topics regulated by it, and expressly excludes the rules of private international law, the draftsmen of the Vienna Convention were aware
that measures of conflict avoidance can reduce the dangers of a conflict of laws but cannot completely exclude them. For this reason they have linked the Vienna Convention with the national systems of private international law
This linkage occurs in two respects
First, the Vienna Convention (like the Uniform Sales Law) does not regulate all incidents of the international sales transaction
Second, the Convention contains an express reference to national systems of private international law for the filling of gaps in the Convention
The central position of the Vienna Convention
The Vienna International Sales Convention is intended to be the centrepiece of international harmonisation of trade law
A number of other associated Conventions are linked to it, each dealing with a specialised subject and being self-contained, but taking account of the provisions of the International Sales Convention
Some features of the Vienna Convention
Fundamental and non-fundamental breach
The Convention adopts many concepts of the Uniform Sales Law of 1964, but has refined them and made the more useful.
It retains the distinction between fundamental and non-fundamental breach of the sales contract but defines fundamental breach in a more objective manner
The definition of fundamental breach in the Vienna Convention should be compared with that of the Uniform Law on International Sales
From the practical point of view, the objective test of fundamental breach considerably restricts the cases in which avoidance of the international sales contract can be claimed under the Vienna Convention
Specific performance and repair of non-conforming goods
The Vienna Convention entitled the buyer to demand specific performance, delivery of substitute goods for non-conforming goods and even repair of such goods
UN Convention on the Limitation Period in the International Sale of Goods (1974)
The Convention is intended to replace a variety of conflicting national laws, which provide limitation periods ranging from 6 months to 30 years
The basic aim of the Convention is to establish a uniform time limit that prevents the pressing of claims at such a late date that evidence has become unreliable
The Convention limits to four years the period within which a buyer or seller may press claims based on a contract for the international sale of goods
Proposed Common European Sales Law
A self-standing set of contract law rules, which includes provisions to protect consumers
The aim is to simplify the legal environment for businesses in relation to cross-border transactions by offering them the opportunity of using a second regional regime within the EU as an alternative to dealing with a variety of different national contract laws
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