Exporting machinery to another country can be difficult for anyone unfamiliar with the processes involved.
In this post I will try to simplify the procedure as much as possible to provide a useful how to guide for exporting machinery to another country.
In this example we will be sending a Mazak CNC to France from Coventry in the UK.
Hopefully this will benefit you in some way if you are looking to export machinery – or provide you with enough confidence to consider DDK doing it for you.
Firstly we need to define some of the terms used throughout import & export of machinery;
Export: Sending a machine outside of a country
Import: Receiving a machine into a country.
Import Agent: The person you appoint to handle the importing documentation of the machine.
Export Agent: The person you appoint to handle the exporting documentation of the machine.
Clearing agent: The person who can legally satisfy the goods have entered the destination country as described. They are licensed by the countries import and export authority.
“Customs Cleared / Cleared Customs”: When the goods have been inspected at destination country by the clearing agent and released into the country.
Export Declaration: a form submitted by an exporter at the port of export. It provides information about the goods being shipped, including type, number, and value. This information is used by customs to control exports, in addition to compiling statistical information about a country's foreign trade.
CDS: Customs Declarations service – the HMRC online program for lodging declarations by agents which many countries across the world can also interact with.
Custom Duty & Tax: The calculation of duties depends on the assessable value of a shipment. Goods are given a classification code that is known as the Harmonized System code. Every item that is shipped has a Harmonized code. To find the code for a good in the UK you can use: https://www.gov.uk/trade-tariff
Our Mazak has a Harmonized Code or “HS” Code of: 8459619000
Some harmonized codes, as we will discover later require additional information when you lodge them to be exported.
Commercial Invoice: The document that contains all of the information of the item being shipped. This must include:
· Reason for export
· Shipping date and airway bill/order number
· Goods description
· Quantity of goods per item
· HS code
· Declared value of goods per item
· Insurance costs
· Country of origin
· Weight
EORI Number: An Economic Operators Registration and Identification number (EORI number) is a European Union registration and identification number for businesses which undertake the import or export of goods into or out of the EU. If you wish to import or export goods, even If you’re using an agent you need to have one of these. To get one in the UK you can register here: https://www.gov.uk/eori/apply-for-eori
We also need to understand why we need to have this system in place when carrying out the export of a machine.
It is important that countries are aware of what is inside and what is leaving their country.
The reasons for this are many, but we will deal with our example of a Mazak CNC.
With high tech machinery such as this, the country that receives it want to ensure that the engineers using it are qualified, trained and working to the highest level of health and safety. For them to do their job correctly and safely, the machine needs to be correctly identified when leaving a border and coming through a border. This is so the engineers that are working with the exact spec they are expecting and to ensure there have been no damages since the last inspection.
For this reason when we take our Mazak CNC across the English channel, the UK Border Force will open up the back of the trailer, look inside of it, and make sure that the machine is what we have said it is when we lodged what is known as a “export declaration”
You cannot get the item out of the country without this. You will be stopped at a customs checkpoint.
If you have filed your export declaration correctly you will be allowed to leave the country.
When our machine arrives into France, the trailer will go to an import agent who will also check the back of the trailer and make sure it is what we have said it is. When they have checked it they will register this with their customs authority which is linked with CDS and notify both countries that the machine has arrived as described.
If the machine for any reason does not arrive – this is automatically flagged up and border force will begin tracking down this item, as well as dealing with any incorrect procedures. The punishment for incorrectly exporting or importing goods varies from a small fine to imprisonment depending on the circumstance.
There is also the matter of paying the duty on our machine. It has a value and the tax amount needs to be paid. We will get to this later.
In this example we will be sending a Mazak CNC to France for our customer Machine Importing Corp.
The procedure we follow when exporting machinery is something like this:
1. Identify machinery to be relocated
In this case – 1x Mazak CNC.
We also need to identify if the machine needs an export licence. As a rule of thumb anything that has military applications or can be used to produce something with a military application will need an export licence. This is most machinery.
Export licences are available from SPIRE - who deal with the UK export licence. They will want information such as make and model of machine, country of origin, serial numbers, and will check other factors to ensure the machine is being exported responsibly.
https://www.spire.trade.gov.uk/spire/fox/espire/LOGIN/login
2. Identify collection address and delivery address
UK to France.
3. Identify most cost effective solution for sending machinery
In this example it is most sensible to load the machine to a truck (preferably something enclosed like our Meusburger Trailer) and drive it to it’s destination.
Different destinations have different requirements – USA for example would need to be loaded to a cargo ship.
If the machine is too large to fit into a container – it will need export packing and wrapping. This is how larger machinery comes from the manufacture. Information on how we pack machines professionaly for export is available here.
4. Identify and prepare for duty charges.
Every item has a tax code which is identified by using the HS code on the commercial invoice. Some items are expensive such as alcohol and tobacco, and some items have no duty. This is how a country makes some of it's income and is to be expected on virtually everything imported. The person importing our Mazak is responsible for paying the duty to the clearing agent prior to the goods clearing.
5. Lodge export declaration
This is done on CDS – the HMRC program for lodging declarations. To lodge an export declaration you require several pieces of information about the sender and receiver of the goods, as well as information on the goods which we will go into shortly.
6. Nominate import agent
You will need to find a clearing agent to check the goods when they arrive into the destination country. They are licensed by the countries Customs Authorisation.
7. Send driver to HMRC facility for checking export paperwork
8. Lodge import declaration
This is done by the import agent to notify their authority goods are coming into the country. They will be licensed by their import authority.
9. Send driver to Clearing agent at the destination country to be “customs cleared”
10. Arrive at destination address. Offload and position!
When you nominate an export agent (we can do this for you) we will require the following information off of you to be able to handle the export.
Commercial Invoice: This is required for the agent to make a customs declaration. It has the information they require to be able to lodge an export declaration. An example of one we use is below
EORI Number: An Economic Operators Registration and Identification number (EORI number) is a European Union registration and identification number for businesses which undertake the import or export of goods into or out of the EU. If you wish to import or export goods, even If you’re using an agent you need to have one of these. To get one in the UK you can register here: https://www.gov.uk/eori/apply-for-eori
EXAMPLE COMMERCIAL INVOICE
DDK Machine Movers
Ltd
Stringers Barn
Salt Box Road
Guildford
Surrey
GU4 7PX
Tel: +44 1483 440166
EXAMPLE COMMERCIAL INVOICE
Shipping to:
Machine Importing Corp, France Road, France . FR587 22
QUANTITY DESCRIPTION VALUE
1 1x Mazak Machine £ 0.00
Goods are free of charge, value for customs only
Description of Products
Quantity: 1
Unit Value: £25,000
Sub-total: £25,000
Value: £25,000
Unit Net
Weight (Kg) 5000kg
Country of Manufacture: Japan
1 x Mazak Machine
DIMS: 112X72X72
H S. TARIFF NO. 8459619000
Sender’s
VAT Number: *** *** ***
EORI Number *** *** ***
Total £25,000
Total Net Weight 5,000kg
Importer of Record EORI: Enter EORI of importer
Company Name: Machine Importing Corp
France Road
France
FR587 22
Contact Tel: Importers Phone number
Contact Email: Importers Email
WE HEREBY CERTIFY THIS INVOICE TO BE TRUE AND CORRECT AND IN ACCORDANCE WITH OUR BOOKS, ALSO THAT THE GOODS REFERRED TO ARE OF UNITED KINGDOM ORIGIN.
..……………………………..................AUTHORISED SIGNATORY
Together with these documents we have the required information to be able to lodge an export declaration for you, and also find a clearing agent to "clear the goods" once they have arrived in the destination country.
Paying Duty
There is a step before the goods can be cleared and this is ensuring relevant duty is paid on the goods by the person or business importing. These fees can vary - usually between 10 and 25% It is important the person importing the goods is aware that Duty is due on goods before you ship them, and they have adequate funds to cover it.
Why do I need to pay duty if I'm importing?
Import duty is one of the many ways countries and their governments make their money. It is unavoidable and you can be fined or imprisoned for failing to pay it. Every country has their own rates for duty. To calculate duty we use the HS code of the item on the commercial invoice. In this case, our Mazak is going from UK to France. We can use the following online free calculator.
In this case our Mazak attracts a 20% duty when it enters France. This means the person importing will have to send the authorised clearing agent around 6000EUR
Once this has been paid the shipment will be cleared by the clearing agent and the machine can go onto it's final destination to be unloaded and positioned.
If you have a machine you want to send to another country feel free to get in touch for more advice, or we can provide a cost for you.
