SUPPORTING OUR CUSTOMERS - THROUGH BREXIT - Pressidium

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SUPPORTING OUR CUSTOMERS - THROUGH BREXIT - Pressidium
SUPPORTING
OUR CUSTOMERS
THROUGH BREXIT

1
SUPPORTING OUR CUSTOMERS - THROUGH BREXIT - Pressidium
CONTENTS

01 02 03 04
Current     Political    How DHL      Preparing
situation   Engagement   Express is   your business
                         preparing
SUPPORTING OUR CUSTOMERS - THROUGH BREXIT - Pressidium
CURRENT SITUATION
& LATEST UPDATES
SUPPORTING OUR CUSTOMERS - THROUGH BREXIT - Pressidium
Overview

The Brexit transition period will conclude on 31 December.

Negotiations are ongoing between the UK and the EU to secure a new
Free Trade Agreement. In the meantime, goods continue to move
between the UK and the EU as before, and DHL Express services
remain unchanged.

We know that certain elements (e.g. Customs checks) will apply to UK-
EU shipments from 2021 regardless of the outcome, but if no
agreement is reached, the UK will adopt World Trade Organisation
standards and become what’s known as a ‘third country’, with special
rules in place for Northern Ireland.

The content in this guide is based on our planning for this scenario.
SUPPORTING OUR CUSTOMERS - THROUGH BREXIT - Pressidium
DHL Express is preparing

As international specialists, we’re already in a strong position,
with existing customs teams, a successful global network and vast
experience of international trade.
Across the business we are making significant and continued
investment with the aim of maintaining service quality throughout.
Dedicated taskforces in the UK and Europe have been assessing every
aspect of Brexit since 2016, considering all implications and risks.

Our planning is based on available information.
As requirements change, we will adapt, but some elements will
be beyond our control and will have an impact across our sector.
We will work together to overcome these challenges, and will inform
you of any developments. Our determination to continue providing
an excellent service for customers remains unchanged.
SUPPORTING OUR CUSTOMERS - THROUGH BREXIT - Pressidium
Timeline

           18 OCT ‘19                                            1 JAN ‘21
           PM secures new                                        New trading rules apply.
           withdrawal deal for
           Parliament approval                                   WTO rules assumed if no
                                 Transition Period
                                                                 new arrangement is secured

                                            TODAY

                                                     31 DEC ’20
                                                     End of transition period
                                                     Final trade arrangements confirmed
SUPPORTING OUR CUSTOMERS - THROUGH BREXIT - Pressidium
The Northern Ireland Protocol

The Northern Ireland Protocol is designed to be a “fully legally-
operative solution”, whereby Northern Ireland (NI) remains part
of the UK’s customs territory, but aligns with EU Single Market rules.
NI will also remain in the UK VAT system, but in alignment with EU VAT
regulation (including access to the EU’s IT systems).
                                                                                            NO CHECKS

In practical terms, this means no customs procedures, regulatory
                                                                                           CHECKS
checks or tariffs will be enforced against trade between NI and the            NO CHECKS

Republic of Ireland (ROI), and vice versa.
Goods moving between GB and NI will also be tariff-free, unless they
are deemed ‘at risk’ of entering the EU. Likewise, goods moving                                         CHECKS

between ROI and NI that are ‘at risk’ of entering GB will also be subject
to tariffs.
                                                                            NO CHECKS

Many questions remain regarding the Northern Ireland Protocol,
and the details are still subject to ongoing UK-EU negotiations.                                    *Current working assumption
                                                                                                    (September 2020)
                                                                             REST OF EU
SUPPORTING OUR CUSTOMERS - THROUGH BREXIT - Pressidium
Northern Ireland EORI Numbers

An EORI number starting with XI will be required to move goods to
or from Northern Ireland from a non-EU country, to make a
declaration and get a customs decision in Northern Ireland, from 1
January 2021.

You must already have a GB EORI number to get an XI EORI number.

If you already have a GB EORI number and HMRC think you need an
XI EORI number, you’ll be automatically issued one in mid-
December 2020.

To get advice on moving goods between Great Britain and Northern
Ireland sign up for the Trader Support Service.
SUPPORTING OUR CUSTOMERS - THROUGH BREXIT - Pressidium
Product restrictions applied by EU countries
Individual country-specific goods restrictions will come into effect for
products sent from Great Britain to the EU from 1 January 2021. The
UK will also apply it’s own set of rules for goods arriving in the UK.
Please check if restrictions apply to the category of goods you’re
sending using our country profile guidance here.
If your products are within a restricted category, please contact your
Account Manager to confirm the details of the regulation in place.

As part of these restrictions, veterinary and phytosanitary inspections
will be required at an EU Border Control Point (BCP) for some
Foodstuffs and Animal-or Plant based products. Please see Gov.uk for
details on when additional licences and inspections will be required.
Please be aware that DHL Express will suspend the carriage of goods
subject to veterinary and phytosanitary inspections at an EU BCP from
1 January 2020.

Please note that EU country-specific restrictions will not be applied to goods moving between Northern
Ireland and the EU, based on current customs law, however should this customs position change, DHL may
need to revisit this position.
SUPPORTING OUR CUSTOMERS - THROUGH BREXIT - Pressidium
Changes to UK VAT

From 1 January 2021, UK VAT on goods valued up to £135 will be
collected at the point of sale, and not the point of import.
This means that overseas businesses selling goods to be imported into
the UK, valued between £0-135, will be required to charge and collect
any VAT due at the time of sale. They must be registered for UK VAT and
pay VAT using a UK VAT return.
VAT registered UK importers can still choose to account for the VAT by
providing their VAT registration to the supplier. For details see the
‘Business to business sales’ section here.
Alongside this, Low Value Consignment Relief (LVCR) will be
abolished, meaning VAT will be due at the time of sale on all imported
goods valued £0 - £135.*
More information is available here.

* excludes excise goods and gifts
Changes to EU VAT

The EU will be moving to a similar VAT collection model
to that being introduced in the UK, however this will be
effective from July 2021.
When goods worth up to €150 are purchased from sellers
outside the EU, VAT will be charged at the time of sale.
The current €22 VAT threshold for importing goods into
the EU will also be removed. This means VAT will be due
on all non-document shipments from the UK to the EU.
More information is available here.
Brexit Fee
From 1 January 2021, a fee will be levied on all dutiable shipments
between Great Britain and European Union countries, both inbound and
outbound. With the information that is currently available, the intention is
that this fee will be set at £0.25 per kg with a minimum charged amount
of £4.50 per shipment. This fee may be adjusted, should circumstances
change significantly.
This fee will be introduced regardless of any trade deal agreed, as the
following will still apply:
• Customs requirements for all shipments between GB & EU. This results
  in an increase in the number of declarations, licenses, data submissions,
  overall processing, plus new IT systems
• Border formalities will be introduced that must be complied with, i.e.
  the new ‘Border Ready’ requirements in Kent
• Increased regulatory requirements restricting commodities into Europe
• Increased Bond storage facilities and associated security
The fee is applied per kg as heavier shipments in general have more
complex customs requirements.
Please note that no Brexit fee will be applied to goods moving between Northern Ireland and the EU, based on
current customs law, however should this customs position change, DHL may need to revisit this position.
POLITICAL
ENGAGEMENT
DHL is active with political engagement

DHL is working closely with EU and UK legislators, to help them understand the complexity and implications of the exit terms on businesses,
highlighting issues and calling for terms that are in the interest of our organisation and our customers.

    CUSTOMS                                   ROAD HAULAGE                            PORTS                                   AVIATION                           IMMIGRATION
    Simplified declarations                   Maintenance of current                  INFRASTRUCTURE                          European Aviation Safety           Simple visa
    & automatic release for                   road market access                      Allow for inspections                   Agency (EASA) and UK Civil         requirements for
    Authorised Economic                       with no rationing of                    away from the physical                  Aviation Authority (CAA)           key workers
    Operators (AEOs) / Inland                 international freight                   border / Reductions in                  memberships / An Open
    pre-clearance / Use of                    permits / Mutual recognition            planned checks for                      Skies Agreement, with
    periodic payments /                       of driving licences and                 agri-food on both                       protection on investments /
    Maintenance of special                    driver qualifications                   sides of the border                     Mutually-recognised cargo
    customs procedures                        & vehicle standards                                                             security agreement
    post-Brexit                               / Light touch international
                                              trailer registration

 Progress is being made across all topics listed above, but is dependent on ongoing negotiations, particularly around fisheries and the ‘level playing field’.
WHAT WE ARE DOING
AND HOW WE CAN HELP
As international specialists, we’re already in a strong position

We already have a number of key differentiators and all the expertise needed to support you following Brexit:

               300+                              5+ million                                7+                            AEO
            dedicated customs                      customs transactions      bonded or customs warehouses in the     DHL is an Authorised
              professionals                             each year            UK / plus at least one per EU country    Economic Operator

                                 WHAT IS AEO?
                                 § Authorised Economic Operator (AEO)        § AEO enables us to leverage Customs
                                   status is an international quality mark     Freight Simplified Procedure (CFSP),
                                   for companies whose customs                 which speeds goods release from
                                   processes are secure and efficient          Customs and allows deferred payments

  Figures quoted are for DHL Express in the UK
What is DHL doing to prepare?

Our expert taskforces in the UK and Europe have been assessing every aspect of Brexit since the referendum, considering all
implications for international trade.

DHL Express – Workstreams                            Network, hubs and ground operations planning, border issues management
                                           ps
                                         kO
                                       or
                                  e tw               Contingency planning for air network
                                 N
                                          ine
                                     Airl
                                                     Assessment of new requirements, including recruitment/training
 UK Steering                                    ms
  Group and                            Custo
 workstreams

                                         HR          Supporting impacted workers, recruiting additional workers

               Global Steering           IT          Systems analysis, cross-border risk analysis, systems testing, data management
                   Group               Fina
                                              nce
                                                     Data analysis, VAT and Duty, Calculations/collection
                                    Se c
                                        urit
                                 Co          y
                                    mm               Security awareness and contingency planning
                                       e rc
                                           ial
                                                     Customer transition, Customer Operations Group, Customer Service considerations
DHL Express Contingency Planning

         Enhance our                                Increasing our                             Minimise disruption                     Delivering service
  1      systems and                         2      resources to manage                3       to customer supply              4       quality for our
         infrastructure                             future requirements                        chains                                  customers

 a) Changes to systems and tools        a) Expanded Customs Agent capability       a) Increase in network capabilities   a) A dedicated ‘Brexit Control Tower’
    to enable shipping when customs        on/off shore                               to provide additional capacity        to proactively monitor our network
    regulations apply between UK & EU                                                 where possible                        and action contingency plans
                                        b) Mitigate transportation permit issues
 b) Bond capacity increased                to ensure driver access                                                       b) Significant and continued
    for both the UK and EU                                                         If you will need additional              investment with the
                                        c) Additional people and resources         Time Definite services by air,           aim of providing as seamless
                                           to enable increased duty                please speak with your                   a service as possible,
                                           and VAT collection                      account manager now                      in what may be challenging
                                           requirements                                                                     circumstances
1. Enhance our systems and infrastructure

§ Standard Shipping Tools: Our IT systems have been reviewed and developed to ensure
  all systems are ready for product code changes and can accept increased customs
  requirements. This includes our electronic shipping tools.

  Changes required to our standard shipping tools (e.g. MyDHL+) will automatically be in
  place ready for 2021.

§ Bespoke Shipping Tools: Customers using a bespoke IT shipping tool (EDI or XML-PI)
  or use Shipment Import within EasyShip have already been advised of the changes
  required. Guides are available at www.DHLGuide.co.uk/Brexit.

  The ESS team can support with these updates. Contact ESSUK@DHL.com.

§ Bond Capacity: We have increased our bond capacity in the UK and EU, sourcing
  additional space and expanding our existing bonds. This will allow us to handle the
  increased number of bonded shipments expected when Customs requirements are
  applied to/from the EU.
2. Increase our resources to manage requirements

Managing the impact of changing regulations

§ Customs: We anticipate an increase in customs entries of around 400%.
  We are continuing to recruit additional customs agents, both in the UK and offshore,
  to manage and process more customs entries.
§ Operations: Duty & VAT collection is likely to be required for EU shipments.
  We have employed and trained approximately 150 additional couriers, plus 100 operational
  processors and support staff.
§ Vehicles: Investment in vehicles and equipment for the additional couriers.
§ Customer Service: An increased volume of queries is highly likely.
  We have recruited additional customer service advisors to support and provide guidance.
§ Permits: New driver permits could be required in 2021. We are working very closely with
  the UK Department for Transport to understand what vehicle access requirements will look
  like in 2021, and will look to attain the necessary documents as soon as they are available.
3. Minimise disruption to customer supply chains

Preparing our network for a ‘WTO Trade Rules’ scenario:

§ We are exploring the option to introduce greater capacity to our own air network, as well
  as looking for alternative road entry/exit points to/from the UK.

§ We are also reviewing our line haul and sort hub capabilities & timings against customs-
  clearance deadlines and exploring mitigation measures in the case that a bottleneck is
  identified to be customs clearance capacity on the side of the Customs authorities.

§ Moving day definite material to time definite air network (where compatible) could be
  considered as a contingency measure to avoid potential delays at the Brexit moment, or as
  a permanent change to your supply chain model for goods destined to the UK/EU after
  Brexit. If this is the case, we recommend you discuss this with your account manager well
  ahead of time as this will impact your shipping costs.

If you think you will need additional time definite air services, please discuss this with
your account manager now.
4. Deliver service quality for our customers

We are investing to maintain our service standard throughout the transition.

                                                                                                       UK Board
§ During Q4 2020 and Q1 2021, DHL Express will have a dedicated ‘Control Tower’,
  proactively monitoring all aspects of our network and triggering contingency plans
  where necessary

§ We will keep you informed of any developments that may impact shipments                              Brexit
                                                                                                    Control Tower
§ Across the business we are making significant and continued investment                           We will be proactively
  with the aim of providing as seamless a service as possible post-Brexit,                            monitoring and
  in what will potentially be challenging circumstances                                           ensuring any disruption
                                                                                                    has the appropriate
                                                                                                   contingency applied
                                                                                         EU
                                                                                       Regional                              Internal
                                                                                       Control                              informers
                                                                                        Tower
WHAT ABOUT
YOUR BUSINESS?
Preparing for Customs in the EU

Already trading outside the EU?           Only trading with the EU?
If you’re currently trading outside the   If you’re currently only shipping within the EU, now is the time to familiarise
EU, you’ll be familiar with customs       yourself with customs procedures. The following pages will highlight areas
requirements. Nonetheless, the            where you can make customs clearance a smoother process. There are lots of
information that follows could still be   help materials available in addition to this guide.
useful in helping you prepare.
Please review the content on Paperless    We suggest reaching out to your local Chambers of Commerce for advice on
Trade, EORI numbers, Returns, and         any specific paperwork required for your products
Delivery Duties Paid in particular.       – they can produce Certificates of Origin (COO) or ATA Carnets, for example.
                                          DHL Express will submit customs paperwork directly to Customs on your
                                          behalf as we send your shipments. Providing the relevant documents via our
                                          Paperless Trade option will help ensure swift customs processing.
Preparing for Customs
in the EU                      An EORI number is an Economic Operator Registration and
                               Identification number, required in order to release goods from
Have you confirmed your EORI   Customs. You currently only need an EORI number when
number with us?                trading with countries outside the EU.
   Yes        No
                               However, a GB EORI number will be required for UK imports
                               and exports from 2021.

                               VAT-registered businesses were automatically issued with an
                               EORI number in September 2019. Businesses without an EORI
                               can apply for free at www.gov.uk/eori. Numbers will be sent
                               by email within five working days.

                               As a priority, please inform our teams of your EORI number.
                               Please also include it on Commercial Invoices to promote
                               smooth customs processing and clearance.

                               Please also note that an XI EORI number will be required to
                               move goods to or from Northern Ireland to non-EU countries.
                               The government will issue XI EORI numbers, where needed, in
                               mid-December.
Preparing for Customs
in the EU
                                  This is essential paperwork in order for your goods to clear
Have you completed a commercial   Customs in the destination country. An annotated copy of this
or pro-forma invoice?             is available here.
   Yes        No                  Detailed goods descriptions and HS codes for the products
                                  you’re sending must be included.
                                  It’s possible to produce a standard commercial or pro-forma
                                  invoice within our shipping tools, (e.g. MyDHL+).
                                  For DHL Express to clear shipments through customs on your
                                  behalf, the following must accompany your shipment:
                                  § Commercial or pro-forma Invoice
                                  § Any relevant licences or certificates
                                  § The DHL waybill
                                  § A packing list (often required by destination Customs)

                                  These documents can be submitted electronically using
                                  Paperless Trade (PLT) – or attached to your shipment where
                                  PLT is not accepted in the destination country.
Preparing for Customs
in the EU
                                       PLT is a service incorporated within our Electronic Shipping
Are you using Paperless Trade (PLT)?   Tools to support digital submission of customs documents.
                                       This provides a stable platform to work from, a reduction in
   Yes         Sometimes         No    potential delays (as our data-entry team have earlier visibility),
                                       and no requirement for physical paperwork to accompany
                                       shipments.

                                       This service is already available for shipments outside the EU,
                                       and we will be activating PLT for EU shipments from 2021.

                                       We strongly advise setting up and using PLT now for any
                                       applicable trade outside the EU.

                                       *If certificates or licences are required, PLT cannot be used and hard copies must be provided.
                                       **Most, but not all, countries accept PLT. Please ask your Account Manager for further info.
Preparing for Customs
in the EU
                                  If you’re using one of our integrated shipping tools, in addition
Do you provide detailed customs   to providing Customs paperwork digitally, entering a detailed
information via your integrated   goods description, along with individual invoice line item
shipping tool?                    information is also advised.
   Yes        No                  This information can currently be supplied seamlessly through
                                  direct integration with our bespoke shipping tools (e.g. EDI
                                  or API).
                                  This will be essential when the EU’s new Information Control
                                  System 2 (ICS2) is introduced in March 2021. This system
                                  provides critical data for EU customs authorities, which must
                                  be submitted in advance of shipments being loaded at the
                                  country of export.
                                  Further information will follow for customers using our
                                  standard shipping tools in advance of March 2021.
Preparing for Customs
in the EU
                             When shipping internationally it is important to consider the
Have you checked if your     content of your shipment, as documents and non- documents
shipments are classed as a   are treated differently. While we currently do not differentiate
document or non-document?    between the two when shipping to or from the EU, this will no
   Yes        No             longer be the case from 2021.

                             It isn’t always obvious which category your shipment falls in to,
                             so please review our guide or speak with your account
                             manager.

                             Incorrectly marked shipments could result in delays,
                             or items being returned undelivered.
Preparing for Customs
in the EU
                            The goods you are sending are identifiable via a precise,
Do you know the commodity   internationally-recognised commodity (Harmonised System)
code for your product?      code. This ensures the correct duties and taxes are applied by
   Yes       No
                            Customs. It can also be used to identify the duties and taxes
                            applicable in each country you’re sending to, but remember:
                            the exact rates that will apply in the EU for UK shipments are
                            yet to be agreed.

                            To identify the commodity code for your product(s) visit the UK
                            Government site here.
                            Note: you must ensure the commodity code is included on your
                            commercial / pro-forma invoice.
Preparing for Customs
in the EU
                                          Certain goods may be subject to restrictions when shipping
Have you checked on the restrictions in
                                          between the UK and the EU from 2021.
the EU countries you’re sending to?
    Yes        No
                                          • Restrictions apply to medical and dental equipment,
                                            electronics and toys, for example. Veterinary and
                                            phytosanitary inspections will also be required at a Border
                                            Control Point (BCP) for some Foodstuffs and Animal-or Plant
                                            based products.
                                          • Check if restrictions apply to category of goods you’re
                                            sending using our country profile guidance here.
                                          • If your products are within a restricted category, please
                                            contact your Account Manager to confirm details of the
                                            regulation in place.
                                          • Please be aware that DHL Express will suspend the carriage
                                            of goods subject to veterinary and phytosanitary
                                            inspections at an EU BCP from 1 January 2020.
Preparing for Customs
in the EU
                                           Licences are required in a number of cases:
Are additional licences or certification
needed for your product?
                                           • Goods considered to be military, dual-use, or subject
    Yes         No                           to control due to trade conventions, such as Washington
                                             Convention or Kimberley Process

                                           • CITES documentation, required for any movement
                                             of endangered species

                                           • An ATA Carnet, for goods being temporarily
                                             exported/imported

                                           • Certificates of Origin, required by certain destinations

                                           If your goods do not need a licence, please confirm
                                           to our teams at emahubcmfupdate@dhl.com
                                           and ukexpcmf@dhl.com
Preparing for Customs
in the EU
                                   Goods that are deemed to be ‘dual-use’ or for military
Do you provide a declaration for   application are subject to export controls.
controlled exports?
    Yes        No                  These rules are based upon the export of goods or technology
                                   that can be used for military purposes, but the same
                                   commodity codes can apply to a wide range of other goods.
                                   You may need an Open General Export License (OGEL)
                                   to export these items to the EU from 2021.

                                   More information is available here.
                                   Check whether your goods are subject to these controls here.

                                   To conform with HMRC regulations, exporters should
                                   provide a blanket declaration to confirm their goods are not
                                   controlled.

                                   In cases where goods are subject to controls, please ensure
                                   you provide email pre-alerts to ukexport@dhl.com on the day
                                   your goods are to be shipped.
Preparing for Customs
in the EU
                                      Postponed VAT accounting will be applied to imports by VAT
Have you confirmed your VAT number?
                                      registered traders from 2021. This allows VAT-registered UK
   Yes        No                      businesses to receive monthly import VAT statements from
                                      HMRC, rather than pay these charges upfront.

                                      There’s no extra charge to use this service, but if you wish to
                                      postpone VAT payments, you must provide confirmation –
                                      along with your VAT and EORI numbers – by email to
                                      emahubcmfupdate@dhl.com.
Preparing for Customs
in the EU
                                  Opening a deferment account allows you to postpone the
Do you have a deferment account   payment of import duties and VAT on goods imported by up
for Import Duties & VAT?          to 46 days.
   Yes        No                  Apply here.
                                  Please authorise us to clear your shipments using your
                                  deferment account with form C1207N available here,
                                  and advise us of your deferment account and if appropriate
                                  your CCG (Customs Comprehensive Guarantee) reference
                                  by emailing emahubcmfupdate@dhl.com.

                                  Note: you will need to increase your deferment guarantee
                                  if you expect to pay higher duty amounts.
Preparing for Customs
in the EU
                                         By offering a DDP service, you can bill all duty and taxes back
Do you offer your customers a Delivery   to your account instead of your customer being charged on
Duties Paid (DDP) service?               receipt of their parcel.
   Yes         No                        Research shows retailers who send DDP are growing at double
                                         the rate of those that choose for duty to be paid by the
                                         customer on delivery, with the impact being 70 per cent
                                         of online shoppers choosing to prepay duties and taxes
                                         at checkout.
Preparing for Customs
in the EU
                                             Your returns policy could be impacted by Brexit.
Do you offer a simplified returns process?
                                             Orders shipped into the EU on or before 31 December 2020
    Yes        No                            will fall under current free trade agreements. However, if your
                                             customer then returns an item after this date, it will need
                                             additional paperwork to facilitate Customs, and may be subject
                                             to duties and taxes.
                                             DHL can support you with understanding the requirements for
                                             shipping cross border, non-EU returns back to the UK.

                                             If you require support, get in touch now.
Government & British Chambers
of Commerce Support

The latest Brexit information from DHL Express can be
found at DHLGuide.co.uk/Brexit

A lot of useful support material is available online,
including the following:

 • UK Government Transition Guide

 • UK Government Imports and Exports Helpline

 • British Chambers of Commerce Brexit Hub

 • The European Union and the United Kingdom –
   forging a new partnership
THIS IS OUR FIELD
OF EXPERTISE.
Our Certified International
Specialists are here to support you.

By increasing the number of countries
you trade with, you will reduce risk and
increase the opportunities for growth.

We’ll be with you every step of the way.
You can also read