Restrictions on exports to Libya

Question posted by Martyn Matthews, on behalf of Anstee & Ware Ltd in BS11

Dear All

We have won an order to export spare parts for industrial air compressors dryers to Libya. We have clarified CFR to Tripoli and certification required. CofC Legalised by embassy, bill of lading etc..

Are there any issues with exporting these goods?
Do we need to record the export commodity codes for HRMC?

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Gemma Price, on behalf of @GemmaPriceUK in W13.

Hi Martyn

Welcome to Open to Export & congratulations on the export order!

The United Kingdom & other EU countries have active sanctions / embargos against Libya. As you are dealing with a sensitive market I advise you join the BIS Export Control Organisation mailing list to keep upto date with market movements:

http://blogs.bis.gov.uk/exportcontrol/

Our arms embargo against Libya bans the export of ‘arms and related material’ - eg military ammunition, weapons & goods. You can view the full list of controlled goods and establish if your products fall within these regulations here:

https://www.gov.uk/government/publications/uk-strategic-export-control-lists-the-consolidated-list-of-strategic-military-and-dual-use-items-that-require-export-authorisation

Some otherwise uncontrolled goods are at risk of being used as parts for, or to manufacture military equipment in an embargoed country, even though they do not appear on the UK Military List and export may be banned/restricted. It is possible that air compressors could be deemed as “dual use” or have military end use. You can quickly establish if your goods are deemed as dual use here:

https://www.gov.uk/military-end-use-control-guidance-notes

Also, I ship CFR both FCL & LCL on a weekly basis and have never experienced issues with this. Especially as sensitive markets such as Libya typically require insurance to be effected locally.

I hope this helps & good luck!

Kind regards

Gemma
@ExportExpertUK
info@export-expert.co.uk
www.export-expert.co.uk

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Hello Martyn,
The first thing to say is some INCOterms are specific to seafreight only, others can be used for any method of transport.

CPT is the any method of transport equivalent of CFR. CPT would be appropriate if you are using airfreight so be careful what you put in the contract in case you want to use more than one method of transport in the future.

All exports need the products to be classified for customs by the use of a commodity or tariff code. This code is stated on the customs entry (declaration) made to customs at the time of export (as exporter you are responsible for making sure the right code is used even if your freight agent makes the declaration). You can look up the codes at https://www.gov.uk/trade-tariff.

This tariff code will also be used by the importer at the time of import at which point it will determine the rate of import duty and taxes to be applied and any special rules that may apply.

Please also take care with the value declared. This would normally be the price you have agreed that the customer will pay, but you also need to know what is included in it - e.g. freight costs or insurance etc.

Regards,
Susan

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Sandra Strong, on behalf of Strong and Herd LLP in M22.

Hi Martyn
We can trade with Libya though it is covered by 2 types of export controls.
1. Military end-use and
2. Financial sanctions.
Under this 2nd control there is a list of denied parties we cannot supply any goods or receive payments. You must check this https://www.gov.uk/government/publications/financial-sanctions-libya

To make these checks worthwhile you should request and end-user statement from your customer in Libya so you know if they are the end-user or a distributor and if they are a distributor who are they selling on to. We can assist in this if you require but a format similar to this is recommended: https://www.gov.uk/government/publications/end-user-undertaking-and-stockist-undertaking-checklist

The other thing we need to check is the type of goods you are supplying "spare parts for industrial air compressors dryers" is rather vague and some of these items themselves may be caught under the export controls as "dual-use" goods. If you can obtain commodity codes (tariff numbers) specific to the goods (and not just parts of....) then you can check here to see if any additional controls on shipments to 3rd countries (ie outside the EU). Click on the export tab when you have the right commodity code https://www.gov.uk/trade-tariff/sections

"CFR Tripoli" under Incoterms 2010 rules is only applicable for non-containerised freight but it is still in common usage just hope nothing goes wrong if you do stick with it. You mentioned certification. I assume you meant CofO not CofC? A Certificate of Origin is generally required for goods going to Libya and you need to check the cost of issuance and legalised by embassy with your local chamber of commerce. Under a "C" Incoterm you must organise the transport and the freight company you choose will make the export declaration to HMRC using the information you provide. Ensure you get a copy of this export declaration.

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HMRC Advisor, on behalf of HM Revenue & Customs in G67.

Information on the Customs requirements for exporting is given in HMRC Public Notice 275. All notices can be found on our website www.hmrc.gov.uk under Quick Links > Library > Official Statistics – Publications – Notices, Info Sheets & Other Reference Materials > Import, Export & International Trade. The Public Notices are in numerical order.

HM Revenue & Customs
Customs International Trade & Excise
www.hmrc.gov.uk/contactus

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PETER BRIALEY, on behalf of STI GLOBAL LOGISTICS LTD in SS13.

Cost and Freight" means that the seller delivers when the goods pass the ship's rail in the port of shipment.

Hi Martin

As per Gemmas answer, the terms you are working with to Libya are fine. It firstly means you stay in control of your goods. Basically CFR means the seller must pay the costs and freight necessary to bring the goods to the named port of destination BUT the risk of loss of or damage to the goods, as well as any additional costs due to events occurring after the time of delivery, are transferred from the seller to the buyer. The CFR term requires the seller to clear the goods for export.

As a freight forwarder that deals daily in all middle eastern areas Like Tripoli, Baghdad, Beirut etc we are fully equipped to ensure that your goods are collected and delivered under your conditions. We arrange all consular work for you as well. All weekly direct services.
For bookings and more info please email me or call me on the following details:

Ian Robery
Business Development Manager
STI Global Logistics Ltd
Unit 1 Lords Court
Cricketers Way
Basildon Essex SS13 1SS
Tel: +44 (0)1268 289653
Mobile: +44 (0)7554 117585
Fax: +44 (0)1268 289649
Email: irobery@stigl.co.uk

Look forward to hearing from you.

Best Regards

Ian

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