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General Information on Dispatching Goods within the European Union (Part One)

Posted on Sunday, November 2nd by

The sale and dispatch of goods usually involves a number of procedures that can easily cause problems if not properly understood. With its twenty-eight members, the European Union (EU) is one of today’s main trading markets. So here is an introduction to the sale and dispatch of goods on the EU market.

Firstly, it should be noted that goods moved from an EU country to a non-EU one (a so-called third country) are referred to as exports. Once the goods leave the country of origin, they are being dispatched. Once they reach the country of destination, they are referred to as arrivals. These two terms distinguish this kind of trade as single market trade rather than international trade.

The dispatching procedure involving EU countries is rather uncomplicated, changes in law only occurring very rarely. However, it is essential to keep up with the changes, whether they concern the VAT, the Intrastat returns or licensing requirements.

Consisting of Austria, Belgium, Bulgaria, Croatia, Cyprus, the Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, the Republic of Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, the Netherlands, Poland, Portugal, Romania, Slovakia, Spain, Slovenia and Sweden, the EU acts as a single market based on the free movement of goods, persons, services and capital. In other words, no specific customs documentation is required for dispatching goods within EU countries, with the exception of goods sold to international organisations or exports to special territories of the EU. Some of the main exceptions include goods requiring licences, such as class A drugs or military goods, and excise products, such as tobacco or alcohol. It should be noted that goods delivered to the areas in Cyprus that are not controlled by the Government are zero-rated as exports.

There are also several agreements between the EU and countries outside the EU. In Turkey, for instance, the market for UK exports is relatively free as a result of the customs union between the country and the EU. Exports to Turkey require a so-called ATR form for goods in free circulation. There is a similar agreement between the EU and the Channel Islands. Although they do not require export declarations to be submitted for goods in free circulation but for controlled goods only, they require the sequential numbering of VAT invoices. Also, restrictions may apply to certain goods.

Finally, the EU forms an internal market along with Iceland, Norway, Liechtenstein and Switzerland, which form EFTA (The European Free Trade Association), characterised by pretty much the same kind of trading relationships as the ones existing within the EU. The former three are part of the European Economic Area (EEA), where goods can be moved freely.

Community or common transit

Customs status

The customs status divides goods in transit into Community goods and non-Community goods. The former are transiting from an EU country or have been released for free circulation after being imported from non-EU countries and do not usually have to be accompanied by Community Transit (CT) declarations. However, these CT declarations are required in the case of:

- non-Community goods – which have been imported from non-EU countries but not released for free circulation;
- community and non-Community goods transiting to and from the states of San Marino, Andorra or to and from “special EU territories”;
- goods transiting to and passing through states members of EFTA or other states that have signed the Common Transit Convention. This is also simply referred to as Common Transit.

Transit procedures have also been simplified significantly by the implementation of a new system known as NCTS (The New Computerised Transit System), which all countries members of the EU and EFTA use. This is a system which uses information messages to control transit movements and manages the electronic transit declarations submitted by individuals or companies interested in passing their goods through those particular countries.

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