As international trade continues to grow, the importance of remaining trade-compliant becomes increasingly important. Part of being trade-compliant means ensuring your operations adhere to import and export regulations. 

Import and export compliance not only ensures your business is following the law but also protects you from facing costly penalties and having to overcome operational disruptions and reputational damage. 

In this blog, we will explain what import and export compliance is, the regulations for importing and exporting goods into and out of the UK, and how non-compliance can put your business at risk. We will also outline some practical tips that can help you stay on top of import and export compliance. 

 

What is import and export compliance?

Staying trade compliant is important for any trading business, as it ensures that their processes and procedures are adhering to international trade rules and laws. If a business is not trade compliant, it can be penalised. 

To be trade compliant, your business must also be import and export compliant. Import compliance means ensuring that a business’s import control and management processes do not violate any domestic or international trade laws or regulations.

Similarly, export compliance means your business’s export activities are operating in line with the relevant rules and regulations in place. 

Import and export compliance can become complex, as every country has their own guidelines and regulations to abide by. Certain goods may also have extra regulations that they have to comply with, depending on the nature of those goods.

 

What are import-export laws?

Import-export laws are the rules and regulations that are put in place to control the movement of goods in and out of the country. They set out rules for customs procedures, duties and taxes, trade restrictions, and special regulations for certain categories of goods. 

Non-compliance with import-export laws can result in a range of penalties, such as delayed shipments, seized goods, fines, and, in some cases, criminal penalties. 

However, having efficient processes in place to ensure compliance with import-export laws can help reduce costs, avoid disputes, and position yourself as a reliable business to international partners. All of these benefits can contribute to your business scaling up more quickly.

 

Import compliance: Regulations for importing goods into the UK

There are three main elements to import compliance, if you have any questions, get to know our UK logistics team, who can walk you through the following: 

 

Import declaration and classification

When importing goods, all businesses will need to identify and classify the goods being imported. This requires making an import declaration to HMRC, which tells them the type and value of the goods being imported. 

Commodity codes are used to identify what the item being imported is. This will influence the duties that need to be paid and whether there are any other special permissions or certificates needed, like an import licence. 

Import declarations also detail who is importing the goods, where the goods are from, and where they are going.

 

Customs duties and VAT

Businesses are required to calculate any tariffs and duties associated with the import of goods. This includes duties, VAT, and duty/VAT relief.

The amount of duty you need to pay on the import of goods depends on different factors, including the type of goods being imported and the trade agreement between the UK and the country you are importing goods from. 

You may also be required to pay VAT on your imported goods at the point of entry. The way in which your business is set up and its VAT registration will affect who pays the VAT, and how the VAT is to be paid. 

In some cases, you might be eligible for reduced or zero duty charges. You might wish to consider getting advice or guidance about whether you qualify for any reliefs or exemptions. 

 

Documentation

You might be required to apply for certain documents, licences, and permits depending on your circumstances and the type of goods being imported. 

If you are importing controlled or restricted goods, you might be required to apply for extra documentation, such as import licenses or clearance from regulators. Controlled goods can include medicines, plants, certain chemicals, and products made for human consumption. 

Certain countries, such as the UK, require an official import permit for specific goods. For example, if you are trying to import firearms, live animals, and hazardous materials into the UK, you must secure an official permit before importing them. If you fail to do so, it is considered an offence. 

 

Export compliance: Regulations for exporting goods overseas from the UK

Exporting goods also has its own set of rules and regulations to follow. The main factors to consider are:

 

Registration and identification

Similarly to importing goods, HMRC needs to be able to track what goods and shipments are being exported out of the UK. 

Most UK businesses exporting goods internationally will need an Economic Operators Registration and Identification Number, which enables HMRC to track traders and assists with customs clearance procedures. 

Occasional, regular, and commercial exporters are all required to inform HMRC about their shipments and need to be HMRC registered. This is important as it prevents VAT and compliance issues. 

 

Export declaration

The commercial export of goods requires an export declaration to be completed. These are usually completed via the National Export System or by third-party agents. 

If you do not have the correct documentation during export, you can face delays in your shipments.  

 

Documentation

Other supporting documentation you might need includes:

  • Proof of origin, for example, an EUR1 or Certificate of Origin

  • Invoices 

  • Commercial packing lists

  • Export certificates for certain goods requiring them, like animal products

The supporting documents you need will depend on the goods you are exporting and where they are being exported to. 

Export licences are also required to sell certain goods and services: 

  • Military equipment

  • Technology and related services

  • Firearms, ammunition, and defence-related items

  • Radioactive materials

  • Certain chemicals

  • Controlled waste materials

  • Dual-use items that have civilian and military uses

 

Special compliance rules

There are certain types of goods that require you to meet special compliance rules. Categories that require you to meet extra regulations include: 

  • Food, drink, and agriculture: Products related to food, drink, and agriculture require health certificates and will need to be compliant with safety standards for the UK and its destination country. 

  • Medicines and cosmetics: Some medicines and cosmetics will require special licences and are regulated by the MHRA. They will also need to comply with labelling and packaging regulations. 

  • Endangered species, animal products, and plants: Goods that fall under this category require specific import and export licences. They might also be subject to more thorough checks at the border for compliance reasons.

 

Risks of non-compliance

Non-compliance with import and export regulations can result in penalties and have negative consequences for your business. We have outlined some of the key risks of non-compliance for your business below:

 

Legal risks

Failing to comply with trade regulations can result in legal consequences. Your business can face fines, penalties, tariffs, and taxes as a result of non-compliance. In some cases, you might even face bans from operating as a business in certain markets.

 

Operational risks

Businesses risk operational disruptions if they are unable to comply with trading rules and regulations. For example, goods can be seized at the border and shipments can face delays. 

Interruptions to the supply chain can be costly for your business and might also harm the relationships you have built with customers and third-party suppliers.

 

Reputational risks

The reputation of your business is also at risk when you fail to comply with import and export regulations. Disruptions to the supply chain can damage relationships with your customers, as they might be required to wait longer than anticipated for their shipment to arrive. 

Efficient and compliant shipping practices can establish you as a trustworthy trader. By failing to comply with trade regulations, you are at risk of losing this status and having to face more thorough inspections and possible delays as a result. 

 

Tips for remaining import-export compliant

Import and export rules and regulations can be complex. Here are some top tips to help you remain import-export compliant: 

  • Keep updated on trade shipping rules and regulations for the UK and the destination countries you ship to.

  • Review commodity codes regularly in case of any changes made by HMRC - assigning the right commodity code to your products is of vital importance. 

  • Research trade agreements. Understanding different trade agreements will help you remain compliant, and you might sometimes qualify for better rates. 

  • Ensure any third parties you work with are reliable and reputable. Their failure to comply can also negatively impact you. 

  • Maintain accurate, organised, and accessible records of your shipments and licences. Consider digital record-keeping in case HMRC have any queries to resolve.

  • Establish clear shipping and compliance procedures for staff and partners to follow. 

 

SEKO Logistics: Your trusted partner for import and export compliance

At SEKO Logistics, we provide global customs clearance and brokerage services, helping your business stay compliant. We offer export and import compliance audits, consulting, and training alongside 24/7 support to help create Import Management Programs tailored to your business’s requirements.   

With extensive experience in value-added freight forwarding and international cross-border shipping, our team of experts have knowledge and expertise to help you optimise your import and export processes and reduce the risk of delays or penalties. 

Our specialty delivery services also allow us to handle the movement of goods in specialist industries that might need to meet extra compliance rules, such as medical and technology. 

Contact us to speak to a logistics expert today.