Exporting to the European Union - PowerPoint PPT Presentation


PPT – Exporting to the European Union PowerPoint presentation | free to download - id: 44e5b-YjI2Z


The Adobe Flash plugin is needed to view this content

Get the plugin now

View by Category
About This Presentation

Exporting to the European Union


Duty Relief. Occurs in very limited circumstances. ... buy items from Europe, check for VAT and the possibility of recovery of the tax ... – PowerPoint PPT presentation

Number of Views:98
Avg rating:3.0/5.0
Slides: 54
Provided by: kwtc
Learn more at: http://www.kwtc.org
Tags: check | coming | european | exporting | is | my | relief | tax | union | when


Write a Comment
User Comments (0)
Transcript and Presenter's Notes

Title: Exporting to the European Union


Exporting to the European Union An Overview
July 24, 2008
The EU 27 Countries, One Common Market
The EU and the United States
Euro Zone 15 Countries, 1 Currency
  • Lowers transactional costs by avoiding exchange
    into multiple currencies.
  • Stable, set pricing.

Top Kentucky Export Destinations 2007
Source U.S. Census Bureau, http//www.census.gov/
Growth in US Exports to EU, 2000-2007
Source USITC Dataweb
The European Idea of a Common Market
Single European Market
stands for 'free movement within the Common
Market of
The European Idea of a Common Market
  • Goods Customs union covers trade in all goods
    and sets tariff rates with Non-Member States.
  • People Any citizen of an EU Member-State may
    settle and work in any other EU State.
  • Services Any EU Member-State national may
    provide services in another EU State.
  • Capital Prohibits barriers to capital movements
    within the EU and between Member States and third

European and National Law
  • The EU is more than just a confederation of
    countries, but a supranational union
  • Member States are sovereign countries, each with
    its own national legal system.
  • EU has power to make laws binding on Member
  • In these areas, Member States must harmonize
    their code with EU law.
  • In other areas, Member States are free to enact
    their own laws.
  • Companies face not only European but also
    national regulations of the respective Member

Advantages of Exporting to the EU
  • One Common Market no boundaries to movement of
    people, goods and services.
  • EU is Americas largest trading and investment
  • Considerable growth potential in new and
    potential Member States.
  • U.S. products prized for their quality and
  • Weak dollar stimulates U.S. exports (record 24B
    to EU in May 2008).
  • Compliance with higher EU standards translates
    into compliance in other regions of the globe.

Legal Advantages of Exporting to the EU
  • Product liability laws exist, but awards are
    generally lower.
  • No punitive damages no contingency fees less
    impetus to sue.
  • Legal fees usually lower.
  • Recovery of cost from opposite party if you win
    your case.
  • The above points are generalities and vary from
    country to country within the EU.

Things to Consider When Exporting Goods
  • Contract Documentation.
  • Pricing, quotation, and terms of shipment
  • Payment and exchange controls
  • Inspection, testing and quality control
  • Licensing, technical assistance and other
    intellectual property issues
  • Warranties and indemnities
  • Territories
  • Force majeure, insurance and other management
  • Language
  • Dispute resolution, forum and jurisdiction
  • Termination

Things to Consider When Exporting Goods
  • What are the Added Export Costs?
  • Tariffs
  • Import tax
  • Customs handling fee
  • Sales tax (VAT)
  • Freight
  • Insurance
  • Packing
  • Importing documentation

Things to Consider When Exporting Goods
  • Common Required Import Documentation.
  • Commercial invoice
  • Packing list
  • Certificate of origin
  • Bill of lading
  • Import license
  • Other foreign required license/certificates (CE
    Marking, WEEE Marking, Other labels and

Export Licenses
  • BIS has the responsibility of enforcing Export
    Administration Regulations (EAR).
  • BIS defines export as any item sent from the U.S.
    to a foreign destination.
  • Very few U.S. exports require a license.

Export Licenses
  • Department of State Requirements - International
    Trade in Arms Regulation
  • The U.S. Munitions List is provided in ITAR.
  • It includes all defense-related services, goods
    and technology.
  • All exports of USML must be licensed through the
    Department of States Office of Defense Trade
    Controls unless an exemption exists.

Questions to Ask to Determine if a License is
  • What are you exporting?
  • Where are you exporting?
  • Who will receive your item?
  • What will your item be used for?
  • Be aware of
  • Entity List
  • Treasury Department Specially Designated
    Nationals and Blocked Persons List
  • The Unverified List
  • Denied Persons
  • Debarred List

Market Characteristics
  • Despite common market, consumption patterns vary
    between member states.
  • 23 languages spoken across 27 Member States.

Free Circulation of Goods
  • Upon payment of customs duties, imported goods
    are free to circulate within the European Union
    under Article 23 of the EC Treaty.

Relations with the U.S.
  • Many Member States already has trade agreements
    in place with the U.S. prior to the last EU
  • The Member States may continue to honor these
    bilateral agreements as long as they do not
    contradict other EU policies.
  • As a result, many EU Member States keep their own
    list of goods subject to import licensing and
    tariffs (e.g. rice, cereal, etc).

Import Documentation
  • The official model for written declarations to
    customs is the Single Administrative Document
  • The person bringing in the goods or assuming
    responsibility for the entry of the goods must
    make the summary declaration.
  • Customs must classify Non-EU goods for entry into
    the European Union.

Common Customs Tariff (CCT)
  • The CCT applies to goods imported into the EU.
  • The EU hopes to even the playing field for
    domestic producers competing with external
  • Tariff common to all EU members but rates of duty
    differ from one kind of import to another
    depending on
  • What they are
  • Where they come from
  • The economic sensitivity of products

TARIC Online Customs Tariff Database
  • Similar to the Harmonized Tariff Schedule.
  • TARIC online system notes if a license is
    required for a particular product, and calculates
    all additional costs based on tariff, commercial
    and agricultural legislation.
  • Covers tariffs, quotas, anti-dumping measures.
  • TARIC does not contain information relating to
    specific Member State taxes.
  • Each EU Member State also maintains a separate
    list of goods subject to licensing.

Combined Nomenclature (CN)
  • Imported goods must be declared using the
    subheadings listed.
  • This determines
  • Which rate of customs duty applies
  • How the goods are treated for statistical
  • Based on the Harmonized System run by the World
    Customers Organization (WCO).
  • U.S. participates in the same Harmonized System

Binding Tariff Information (BTI)
  • The BTI system is a tool to assist companies to
    obtain the correct tariff classification for
    goods they intend to import or export.
  • Valid throughout the community regardless of the
    issuing Member State
  • It provides legal certainty with regard to tariff
  • Generally valid for six years
  • New classification regulations, a change in the
    nomenclature at the international level or any
    other international changes can change this
  • EBTI-database is online.

Duty Relief
  • Occurs in very limited circumstances.
  • Only happens when the usual need to protect the
    economy no longer exists.
  • Personal property from resident of another
  • Personal property brought into the EU
  • as a result of marriage or inheritance
  • Very specific farming equipment
  • Specific scientific equipment
  • Items for charitable organizations

  • Industrial Suspensions - enables EU businesses to
    use raw materials, semi-finished goods or
    components otherwise not available.
  • Airworthiness Suspensions (since 2002) for
    import of goods used for planes.
  • Military Suspensions (since 2003) certain
    military weapons and equipment may be imported
    free of import duties.
  • Outermost Regions (on-going) regards the import
    of goods to outlying regions like the Canary
    Islands, Madeira, the Azores and other French
    overseas departments.

Tariff Quotas
  • For some goods, a pre-determined amount from some
    countries will not require tariffs.
  • These quotas stimulate the economy of Member
    States improving capacity, creating employment,
    modernizing structures, etc.
  • Generally restricted to raw materials,
    semi-finished goods, components or some
    agriculture products.

What is Value Added Tax?
  • The Value Added Tax, or VAT, is a general
    consumption tax assessed on the value added to
    goods and services (including imports).
  • Charged as a percentage of price.
  • Under EU Law, standard VAT rate no less than
    15. Reduced rate on certain items at least 5
    (varies by country).
  • It is not charged on businesses but passed on to
    the consumer and paid at point of entry no VAT
    charges once goods pass into free circulation.

How is VAT Calculated?
  • Example Consider a 10 VAT
  • Woody sells 100 of wood to Carpenter. Woody
    collects 10 in VAT
  • Carpenter uses wood to make a table
  • Carpenter sells table to John for 1000
  • 100 total is required for VAT but since 10 has
    already been paid, Carpenter only collects 90
    VAT from John

VAT on Imports to EU
  • All vendors, including local EU business, pay the
  • To level the playing field, importers generally
    pay the VAT the minute their goods hit the
  • If you buy items from Europe, check for VAT and
    the possibility of recovery of the tax (usually
    requires local counsel or accountants to obtain
    correct forms to claim VAT back).

CE Conformite Europenne
  • Certifies that a product has met EU health,
    safety and environmental requirements.
  • The manufacturer has the responsibility to
    determine if a product requires CE marking.
  • No comprehensive list.
  • Certification performed by Conformity Assessment
    Bodies (CABs)
  • List available from the National Institute of
    Standards and Technology (NIST).
  • Self-certification allowed in certain cases.

CE Testing - Example
  • The following list demonstrates the numerous
    criteria and categories that are included in the
    EN 71 European safety standard for toys alone
  • EN 71 Part 1 Mechanical and physical properties
  • EN 71 Part 2 Flammability
  • EN 71 Part 3 Migration of certain elements
  • EN 71 Part 4 Experimental sets for chemical and
    related activities
  • EN 71 Part 5 Chemical toys (sets) other than
    experimental sets
  • EN 71 Part 6 Graphical symbol for age warning
  • EN 71 Part 7 Finger paints requirements and
    test methods
  • EN 71 Part 8 Swings, slides and similar activity
    toys for indoor and outdoor family domestic use
  • EN 71 Parts 911 Organic chemical compounds in
  • Tests as per EN 71 Mechanical/physical tests,
    flammability, chemical analysis

Consequences of NOT Complying with CE Marking
  • European national agencies including Customs
    and/or the Department of Health, Industry and
    Labor conduct market surveillance which
  • Visit commercial, industrial and storage premises
    on a regular basis
  • Visit work places and other premises where
    products are put into service and used
  • Organize random checks
  • Takes samples of products for examination and
  • Penalties, including imprisonment, are determined
    by national law

CE Marketing Countries
  • Austria, Belgium, Bulgaria, Cyprus, Czech
    Republic, Denmark, Estonia, Finland, France,
    Germany, Greece, Hungary, Iceland, Ireland,
    Italy, Latvia, Liechtenstein, Luxembourg, Malta,
    Netherlands, Norway, Poland, Portugal, Romania,
    Slovakia, Slovenia, Spain, Sweden, Switzerland,
    Turkey, United Kingdom

Types of Marks and Labels
  • Mandatory Marks and Labels
  • Textiles, cosmetics, dangerous substances,
    explosive atmosphere, electrical electronic
    equipment, household appliances, pricing,
    recycling separate collection, footwear, units
    of measurement, automotive, maritime, materials
    in contact with food, noise emission
  • Voluntary Marks and Labels
  • Cup/fork symbol
  • Eco-label
  • Green Dot
  • Energy Star
  • e mark
  • Recycling mark
  • Requirements and labels can vary between Member

WEEE (Waste Electrical Electronic Equipment)
  • Aimed at counteracting flow of discarded
    electronics into landfills.
  • Must be displayed on all products to indicate
    that item must not be disposed with normal
    household waste, including
  • Household Appliances
  • Lighting
  • IT and Telecommunications Equipment
  • Electrical and Electronic Tools

Consequences for Not Complying with WEEE?
  • WEEE regulations are put into national law at the
    national level.
  • As a result, the penalties vary but typically
    involve fines or possibly suspension of license.
  • Examples Italy fines the producer between
    30,000 euro to 100,000 euro for not registering
    Germany fines producer 50,000 euro for the same
    violation, failure to collect WEEE or present and
    adequate guarantee of collection could lead to a
    prohibition on sales.

RoHS Restriction of Hazardous Substances
  • Voluntary mark placed on products to represent
    absence of six restricted substances in
    electronic equipment
  • Lead
  • Mercury
  • Cadmium
  • Hexavelant Chromium
  • Polybrominated Biphenyls
  • Polybrominated Diphenyl Ethers

Other Notes on Packaging and Labeling
  • Barcodes not legislated by the European Union but
    regulated rather by voluntary industry
  • All labels will exclusively require metric units
    by end of 2009.
  • The label must also show the selling price and
    the price per unit of measurement on all products.

Who is Responsible for Packaging and Labeling?
  • The importer is generally responsible for meeting
    the recycling and packaging requirements of the
  • Foreign buyers, however, will take into account
    the type of packaging used for international
  • U.S. companies could face a disadvantage,
    therefore, for not meeting their buyers domestic

What is REACH?
  • REACH stands for Registration, Evaluation,
    Authorization and Restriction of Chemicals.
  • Makes industry bear most responsibilities to
    manage the risks posed by chemicals and provide
    safety information to users.
  • European Community Regulation on Chemicals and
    Their Safe Use (EC 1907/2006) which entered into
    force on June 1, 2007.

Which Products are Covered?
  • Chemical substances (e.g. base chemicals,
    specialty chemicals, metals, natural substances
    if they are chemically modified)
  • Mixtures (preparations) of chemical substances
    (e.g. cleaning products, formulated process
    chemicals, paints, motor oils)
  • Substances or preparations in containers (e.g.
    printer cartridge)
  • Articles containing substances which are
    intentionally released during their use (e.g.
    fragrance in a scented candle)
  • Articles containing substances which are
    considered substances of very high concern

Complying with REACH
  • REACH requires all chemicals imported into the EU
    in volumes of 1 metric tonne per year to be
    registered with European Chemicals Agency (ECHA).
  • All manufacturers and importers of chemicals must
    identify and manage risks linked to the substance
    they manufacture and market and are required to
    gather information on the properties of their
    chemical substances (incl. metals), and to
    register the information with the European
    Chemicals Agency (ECHA).

  • Most chemicals currently imported into the EU are
    eligible for pre-registration, which allow for
    continued import until a later deadline.
  • Phase-in period will expire December 1, 2008.

Internet Resources
  • Kentucky World Trade Center www.kwtc.org
  • U.S. Commercial Service - http//www.buyusa.gov/ho
  • Export.gov www.export.gov
  • Bureau of Industry and Security
  • European Commission Taxation and Customs Website-

Contact Us
Jan de Beer Senior Associate 250 West Main
Street Suite 2800 Lexington, KY 40507 T
859.244.3247 F 859.231.0011 jdebeer_at_fbtlaw.com
Kai BitterSenior Associate 2200 PNC Center201
East Fifth StreetCincinnati, OH 45202T
513.369.4809 F 513.651.6981kbitter_at_fbtlaw.com
Not admitted in Ohio licensed in Stuttgart,
About PowerShow.com