Shipping pre bottled whiskey in boxes from UK to Brasil and EU

Question posted by Kathryn Simons, on behalf of Wish4Whiskey in OX14

Hi, we are a newly created scotch whiskey exporter targeting various countries, such as Brasil....what forms do I need and any certifications do I need to hold? I am assuming the process will be easier for shipments to the EU? Orders will have been placed, paid for, monies exchanged so theoretically doesnt the shipment become the responsibility of the buyer? Please help.

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Ian James, on behalf of i2i Infinity Limited in BA4.

Hi,

The responsibility for the shipment will depend on the Delivery Terms you agreed during the sale i.e. Ex-works would mean your responsibility stops at your warehouse gate whereas other delivery terms make you responsible for a portion or all of the journey to the buyer (potentially including any taxes and duties). So it's important to agree that up-front.

With excisable goods like alcohol it's also important to know whether you are selling them duty-paid or duty-suspended. Have you set yourself up with a Bonded Warehouse to avoid paying excise duty or are you planning not to actually handle the whisky?
If you selling to another business in the EU then it's likely to be duty-suspended and each movement of goods needs to be declared to HMRC via the EMCS system - the European system for tracking excise goods under duty-suspension between bonded warehouses.
For shipments going to non-European destinations you may still need to declare the portion of the movement of goods to HMRC i.e. from your premises to the port or airport. The responsibility for excise duty isn’t released until the goods are received (in Europe) or the NES declaration is marked as having left the UK (non-EU).

We work with many whisky distilleries in Scotland so drop me a line if you would like further information about the document they raise to accompany the goods and the declarations to HMRC they make via our software to ensure their liability for excise duty is managed.

HMRC Notice 197 has lots of information:
http://customs.hmrc.gov.uk/channelsPortalWebApp/channelsPortalWebApp.portal?_nfpb=true&_pageLabel=pageExcise_ShowContent&id=HMCE_PROD1_025227&propertyType=document

With whisky you may also need to create Certificates of Age and Origin. Are you manufacturing/bottling your own whisky?

Hope this information is of use.

Kind regards,

Ian James.

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

Hi Kathryn - from your question I'm not sure if you understand that whiskey falls under a specially controlled area known as Excise Goods. This means that as well as the normal customs rules applicable to the movement of goods internationally you have to follow the special excise rules. This is because alcohol (+ tobacco & fuels) incur an additional tax known as excise duty.
Ian is correct above: you need to know if you are selling "duty" paid or unpaid. Excise goods have two different types of duty that could be applicable - the standard customs duty and the additional nationally set excise duty. In the UK the excise duty is set on budget day by the exchequer and is a national rate so, when trading with alcohol even within the EU you could incur additional excise duty charges ... and this is the duty Ian is referring to.
Excise goods do not freely move within the EU because of these national taxes (ie excise duty) which is why carriers or yourself must be registered with the EMCS system for movement. If you are not careful your shipments could incur excise duties in more than one country of transit, there will be transit bonds required (depending on the value of the shipment) and delays or seizures. And this is just in the EU.
When looking at overseas markets for alcohol you must ensure that firstly they permit the import of alcohol, next do they have any limits on foreign alcohol imports (ie quotas), then do you need special certificates and finally how much standard customs duty, excise duty and local taxes will be incurred.
You do not say how many bottles you expect to sell per shipment or whether you are hoping to deliver direct to your customers. Are your customers individuals, shops, distributors or other companies. All of this makes a different ...
We can help clarify things - my contact details are sandras@strongandherd.co.uk but I also refer you to the Scotch Whiskey Association and WSTA (The Wine & Spirit Trade Association)

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Hello Kathryn,
If you are not the producer of the whiskey but are seeking to sell other companies' branded products you also need to check whether or not that company already has a restrictive distribution agreement for your chosen destination country. If such an agreement is in place you may not be able to export their products to that country as it would violate the distribution agreement. In some countries the local Customs officials check against these agreements at the time of import and confiscate items that contravene the agreement.

Regards,
Susan
enquiries@morley-consulting.co.uk
www.morley-consulting.co.uk

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Fiona Johnson, on behalf of Vellag Ltd in SP3.

I agree with all the advice above. I recommend you get VAT registered as it gives your company credibility. Also you will need an EORI number which is usually derived from your VAT registration number.

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Kathryn Simons, on behalf of Wish4Whiskey in OX14.

Thanks to all who took the time to respond to my question, I really appreciate your help. We will go for VAT as suggested and then the other required licences such as the EORI.

Our intention was initially to ship direct from the distillery, so I assume that they provide shipment docs such as the Origin certificate. Would it be the distillery that has to pay the duty?

I guess if we go ex works direct from a warehouse if and when we use a warehouse, this means that the buyer is responsible for all customs and duty - I am not sure if this then is offputting to a buyer, I would think so?

Sorry for the confusion!

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Everything should be clarified and agreed in the contract(s). Please do not confuse the purchase contract that you have with a supplier of whiskey, with the sales contract that you have with your customer.
The distillery will probably charge for the certificate of origin. All they are doing is selling you the products at their factory gate so they wont provide export docs. You are the exporter so this is your responsibility. If you get them to agree to arrange the shipping you will still need to include your own invoice to your customer (so the distillery will be able to see your markup!).
If you sell ex works to a foreign customer this is a totally separate event and contract. Ex works means in effect that you dump the goods at the doors of the warehouse and do nothing else. The customer would need to be tax registered in the UK. He would have to employ an agent in the UK to make the entries to Customs, to arrange the collection, packing and transport to destination and check the agent made the correct entries and payments to customs on his behalf as he would be legally liable.
It would be more customer friendly to get the product to the destination airport even if under your pricing structure shipping was listed as an addition to the product sales price. The INCOterm CIP destination airport. Under this term you are also responsible for taking out transit insurance on behalf of your customer You could also consider DAP which means you would include delivery to the actual destination but not the importation or destination taxes.
If you are only shipping small quantities to a defined list of destinations a courier company such as DHL or Fed Ex can provide you with an agreed table of shipping costs that you can add to your web site.
I would recommend that you leave the import part of the transaction to your customer

Regards,
Susan

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Hi Mr.Simons, Are you looking for market other than Brazil? If you interested to target Mumbai then please get in touch with me on shukla@looktrade.co.uk

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

Information on the Customs requirements for exporting spirits from the EU can be found in section 13 of Notice 197 “Excise Goods: receipt into and removal from an excise warehouse of excise goods” This notice also advises on the movement of spirits in duty suspension between EU member states.

A Copy of this notice can be obtained from our website at www.hmrc.gov.uk > Quick links – Library, Official Statistics > Publications > Notices, Information Sheets and other reference materials > Excise duties, environmental taxes and other duties and taxes > Yes to open site > Scroll to Subject Heading Alcohol > Public Notices

Notices are listed in number order.

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

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Darren Thomas, on behalf of Simpex Freight Management in LS15.

Good afternoon.

We have excellent worldwide LCL/FCL container rates as well as full load trailers.

We also already work very closely with a drinks exporter and would love to discuss any opportunities at present to work with your company.

If you have any further questions please do not hesitate to contact me.

Best regards.,

Darren Thomas - Business Development Manager
Tel: 0113 3970 461
Mob: 07979140007
Email: darren.thomas@simpexfm.com

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