A U.S. exporter has a high value piece equipment to ship to the U.K. on a Temporary Department of State license. They hand the shipment and copy of license to an International Courier service provider, who in turn proceeds to export the shipment to the U.K. The courier service failed to understand the U.S. export requirements, and therefore did not have the U.S. license physically signed prior to export. In addition, the courier service then clears the shipment in the U.K. as a permanent import, and invoices the freight charges plus the U.K. tax (VAT 20%) back the U.S. shipper.
- Failure to facilitate US export compliance process, therefore the U.S. shipper ends up with an export violation, resulting in a Voluntary Disclosure to the Department of State
- Failure to discuss the terms of the shipment (Incoterm) to properly facilitate import clearance for the correct Importer of Record, resulting in an incorrect U.K. Customs entry
- Failure to discuss the Incoterm and expectation of landed costs, which resulted in a tax bill of $200,000 billed back to the U.S. shipper
- Overall failure by the international courier service provider to assist in rectifying and correcting these infractions
The Strategic Solution
- The U.S. shipper contacted us for advice and assistance in correcting these errors
- Provided advise on corrective actions to the U.S. shipper as part of their violation disclosure, which is to select a specialized freight forwarder who understands and complies with all US export regulations
- Spoke directly to U.K. Customs and proceed to amend the original U.K. import entry, to reflect the correct U.K. registered importer
- Filed paperwork through U.K. Customs for reclaim of $200,000 that was paid by the U.S. shipper
- Successfully reclaimed the VAT and assisted with return to the U.S. shipper
- Provided training for export compliance and shipping staff regarding use of Incoterms
- Provided training for export compliance and shipping staff regarding U.K. import regimes
How We Can Help
Our eye on compliance allows the shippers to focus on their core competencies…their product. Our understanding of export compliance regulations, Incoterms and import regimes have since saved this shipper time, and money, while ensuring they comply with the export regulations. This has resulted in no further violations or disclosures to the Department of State.