Air Waybill / Sea Waybill
A transport document used when goods are transported by air freight, typically issued by the carrying airline or freight forwarder. It acts as a receipt for the goods being shipped, and confirms the terms and conditions of the contract of transport
Anti Dumping Duty
You may see this on an invoice from a fast parcel operator like DPD or DHL
This is an additional Customs Duty on imports chargeable to certain products and originating from certain countries. It provides protection against the dumping of goods in a country at prices substantially lower than the normal value. It is charged in addition to, and independent of, any other duty to which the imported goods are liable.
Authorised Economic Operator (AEO)
A status awarded to traders within the UK who demonstrate that they achieve high standards of supply chain security and / or compliance in customs matters. AEO status is a part of an international “Trusted Trader” programme, designed to increase global supply chain security. Companies who achieve AEO status can benefit from simpler and less rigorous customs controls, access to customs procedures, and lower requirements to provide financial guarantees.
Bonded or Customs warehouse
A bonded warehouse is a building, or other secured area in which dutiable goods may be stored, manipulated, or undergo manufacturing operations without payment of duty. See also customs warehouse.
Bill of lading
A legal document between the shipper and a transportation company that confirms the terms of a contract under which freight is to be moved by sea between specified points for a specified charge. It must be signed by an authorised representative from the carrier.
It acts as a receipt for goods shipped and identifies the nature of the goods, the number of packages, their quantity and weight and their condition at the time of loading. Bills of lading can also act as documents of title.
A consignee usually needs at least one original to take possession of the goods.
Certificate of Conformity (CofC)
A document that certifies that a product complies with minimum production, technical, and safety standards.
CHIEF (Customs Handling of Import Export Freight)
This is the computerised operating system and interface used in the UK by H.M. Revenue & Customs which is responsible for controlling and recording all of the UK’s international trade movements and is due to end its service by close of March 2023. It links UK Customs offices to thousands of sea-and airports, inland facilities, freight Customs agents, UK businesses and European Customs authorities.
Commercial Invoice
The commercial invoice is the primary document used in international trade to provide information about a shipment or transaction and identify products being shipped. It is used to support customs declarations in valuation and duty determination, and when submitting certificates of origin or other documents for certification. In many cases a commercial invoice will be the same as a sales invoice, although specific version, containing particular information may be required in certain circumstances, or when trading with specific countries.
Consignee
Who the goods are being sent to (often but not always, the importer).
Consignment
Delivery of goods from an exporter (often but not always, the consignor) to an overseas party (the consignee) under agreement that the agent sell the goods on behalf of the exporter.
The consignee sells the goods for commission and remits the net proceeds to the consignor. The consignor retains title to the goods until the consignee has sold them and bears legal responsibility for paperwork and customs declarations made.
Consignor
Who is sending the goods (the exporter).
Controlled goods
Controlled military and dual-use items that require an export licence.
Customs broker
A specialist company with expertise that includes tariff and customs laws, rules and regulations for the clearance of imported or exported goods or merchandise from customs authority, and the preparation of export or import documents including computation and payment of duties, taxes and other charges. Custom brokers may be employed by, or affiliated with, freight forwarders, independent businesses, or shipping lines, importers, exporters, trade authorities, and customs brokerage firms.
Customs declaration
A legal document that lists the details of goods that are being exported from or imported into the UK/EU.
Customs Declaration Service (CDS)
CDS will replace the existing Customs Handling of Import and Export Freight (CHIEF) system when it ends its service by close of March, 2023, with all declarations taking place on CDS.
Customs Duty
A tax levied on goods imported. Customs Duty is there to raise revenue, and/or to protect domestic industries from (subsidised) competitors abroad.
Customs intermediaries
Customs brokers, freight forwarders and clearing agents are all customs intermediaries that help exporters and importers to declare and move goods internationally. Services include preparation of shipping and export documents, warehousing, booking cargo space, negotiating freight charges and freight consolidation.
Customs value
This is the amount customs will charge duty on (transaction value + insurance + freight). This calculation will be shown on the E2 form generated by CHIEF once the import entry has been accepted.
Customs warehousing (CW)
Customs warehouses are operated by warehouse keepers, who must be authorised by HMRC. Customs warehousing allows goods to be held duty and VAT free until they are released to free circulation. See also bonded warehouse.
Deferment account
A deferment account is set up with customs, subject to an agreed maximum limit – usually, this is sufficient to cover a full month’s Customs Duty and import VAT liability. No interest is charged by customs, so in effect, an importer obtains up to six weeks of positive cash flow.
Dual Use
Goods which have a valid commercial or civilian function, but which could also be used for strategic, or military purposes. They are therefore subject to export controls (see below). Examples of dual use goods include advanced materials, chemicals or metals, high technology machine tools and instruments, software and other technology.
Entry Summary Declaration (ENS)
In order for the goods to even leave a country, the carrier must lodge an ENS (sometimes called a ‘safety and security declaration’) with customs at the first place of arrival within the customs territory to let HMRC know which goods are being carried. The ENS must be lodged within certain time limits. For example, if sea transport is used, an ENS needs to be filed by the ship 24 hours before the goods are scheduled to be loaded.
Economic Operator Identification Registration (EORI) Number
A unique identification number used in customs declarations across the European Union to identify the trader (exporter or importer). EORI is generally based on a company’s VAT number. Any business wishing to engage in export or import in the UK should apply to HM Revenue & Customs for an EORI number.
EUR1
The name of a type of movement certificate (a form of certificate of origin) which can be issued within the EU to prove that goods are of EU origin, and therefore qualify for a preferential rate of duty when imported. The form must be stamped by a Chamber of Commerce or customs authority, but the exporter must demonstrate that the goods meet the required conditions of origin.
Excise
Excise Duty is chargeable, in addition to any Customs Duty which may be due, for certain types of goods that include alcohol, tobacco and some energy products.
Free circulation
Goods that have been produced in the EU, or that have been imported into an EU country can be released for “free circulation” after payment of the import duty to which they are liable. Once relevant import formalities are completed, and Customs Duty has been paid, the goods are deemed to be in free circulation. Imports in free circulation can be sold within the EU like any product made in the EU.
Harmonized System
The Harmonized Commodity Description and Coding System generally referred to as “Harmonized System”, or simply “HS”, is a multipurpose international product nomenclature developed by the World Customs Organisation (WCO). It comprises about 5,000 commodity groups each identified by a six-digit code. The system is used as a basis for customs tariffs and for the collection of international trade statistics. Over 98% of the merchandise in international trade is classified in terms of the HS.
Home use: Most import clearing agents will enter goods to customs under home use. This declares the goods are to remain in the UK/EU.
Incoterms®
The Incoterms® rules are the world’s essential terms of trade for the sale of goods. Whether you are filing a purchase order, packaging and labelling a shipment for freight transport, or preparing a certificate of origin at a port, the Incoterms® rules are there to guide you. The Incoterms® rules provide specific guidance to individuals participating in the import and export of global trade on a daily basis.
Indirect exports
Moving goods for the export through the EU to non-EU countries, such as export consignments declared for export at a location in one member state that then exit the EU via another member state.
Invoice
A commercial document issued by a seller to a buyer, relating to a sale transaction and indicating the products, quantities, and agreed prices for products or services the seller had provided the buyer.
Intrastat
The Intrastat system collects statistics on the trade in goods within the EU. All VAT-registered businesses trading with other EU member states must provide details of the total value of goods dispatched to other EU member states and the total arrivals of goods acquired from other EU member states, on their VAT return. The supply of services, however, is excluded from Intrastat.
Less than Container Load (LCL)
When goods are shipped by container (see above), a shipper may not have enough cargo to fill a container. Less than Container Load (or LCL.) services are operated by carriers or forwarders to cater for such shippers. LCL operators will receive small shipments from multiple shippers at receiving depots in the country of export, and consolidate them into cost-effective full container shipments, charging each shipper for the weight or volume of cargo shipped, and issuing a transport document (usually a Bill of lading) to each client. On arrival in the destination country, goods will be deconsolidated from containers at a freight depot, for transfer or delivery to the client.
Similar services can also apply when goods are transported by road or air; in such cases they are typically known as “groupage” or “consolidation” services respectively.
Letter of credit
Importing and exporting involves risks. Exporters run the risk of buyers failing to pay for goods, while importers may risk paying but never receiving anything. Because of the distances involved, it may be difficult to resolve any disputes.
A letter of credit is a written undertaking given by a Bank to pay the seller (the beneficiary) an amount of money within a specified time provided that the beneficiary presents specified documents which are in compliance with the terms of the letter of credit
By using a Letter of Credit, the seller knows the precise terms and conditions which must be met in order to obtain payment and when that payment will be received. It is provided by the buyer’s bank — for a fee.
Movement certificate
This enables importers to import goods from certain countries at a reduced or nil rate of duty under specific trade agreements with the beneficiary countries.
Packing list
A complete list of what is being sent in a consignment. Customs and border authorities need the packing list so that they can find what they want to inspect more quickly.
Processing
Inward processing (IP) allows businesses to obtain relief from customs duties and import VAT on goods that are imported from outside the EU to be processed and which can be exported outside the EU.
Proforma invoice
An advance draft of a sales invoice, which can act as a format for a sales offer, or may be used to facilitate payment in advance by a client. A proforma invoice may also be requested by a client in order to secure an import licence, foreign exchange or to initiate a letter of credit.
Quota
An import quota is a limit on the amount of certain goods that can be brought into the UK.
Rules of origin
The WTO rules used to determine the country of origin (‘economic nationality’) of a product for purposes of international trade, where there is not a free trade agreement between the relevant countries.
Single Administrative Document (SAD)/C88
Import customs declarations are based on the information required on the SAD (known as a C88 in the UK). It is either completed by the importer or by their appointed agent on their behalf, for instance, a freight forwarder.
Transaction value
The price paid by the buyer when goods are sold by the seller in a normal commercial transaction. If goods have been sold to more than one buyer (wholesaler to distributor, for example) it is the last sale price in the commercial chain before goods cross the border.
Unique Consignment Reference (UCR)
A reference number that businesses and customs use to identify boxes/packages being sent in a single consignment. Sometimes also known as Unique Consignment Indicator or Unique Consignment Number.
Value build up
The costs that Customs Duty is levied on. This is the value of goods (minus any discounts) + insurance + freight + delivery costs to the customer’s location.
Volumetric weight
The cost of a shipment can be affected by the amount of space that it occupies on an aircraft or ship, rather than the actual weight. This is the volumetric (or dimensional) weight.
Generally freight charges are calculated on the actual weight of the goods plus packing (gross weight) but if the goods are a low weight but large in volume then the freight carrier may charge for the amount of space the goods use. In this case an estimated weight is calculated from the length, width and height of a package.
The concept of volumetric weight has been adopted by the transportation industry worldwide as a uniform means of establishing a minimum charge for the cubic space a package occupies.