We have been asked to supply and install equipment in The Galapagos by A UK Charity who is the exporter?

Question posted by Peter Barlow, on behalf of Outersight (UK) Ltd in PL1

I am pricing up for this project in the Galapagos and I am unsure whether it will be our responsibility to cover any import duties or that of our client. We would be supplying and installing the equipment which is long term research apparatus but as our client is UK based and they will own the equipment it is a bit unclear who is exporting the equipment and I don't want to get stitched up by not accounting for any import duty through Ecuador. All our other projects have been UK or EC based and when EC the customer has been based in that country so no confusion.

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Mike Josypenko, on behalf of The Institute of Export in PE2.

If I understand your question correctly, you are quoting for a contract to supply equipment to a UK Charity and install the equipment onsite at a location in the Galapagos Islands. As a rule, I would expect the supplier (ie you) to include in their quotation all costs to ship the goods to the point of installation, clear them through Ecuadorian Customs, and therefore pay all import duties & other costs. If this is the case, you should quote the Charity with delivery terms of Delivered Duty Paid, including installation. If you have any doubts on this, you might want to check with the charity whether this is what they are expecting you to do, or whether they wish to make different arrangements for shipping charges, Customs clearance & duty charges. Whatever agreement you come to with them, you need to specify the terms of delivery on your offer, preferably making reference to Incoterms 2010 (to avoid any misunderstanding).

This sounds like an interesting project, and if you do go down the route I suggested above, and include all shipping costs, I would strongly recommend that you get quotations from experienced freight forwarders, preferably ones with experience in that market, and an office or representative in Ecaudor to give you the freight costs and carry out the shipping - depending on the size of the goods, it might even be worth using a specialist project freight forwarder. Bearing in mind the special conditions which apply to the Galapagos Islands, you may need to transport over some of the equipment you will use to install the equipment (lifting gear?)

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Dear Peter,
I suggest if you are selling the goods to another UK company who in addition is a registered charity it would be easier to sell the goods to them as usual on one purchase invoice. In that way they can export and re-import the equipment on a temproary export basis.
The Galapagos is such a rare route in this industry that you will find it is quite expensive to export to. Also because of the laws in Ecuador being a bit more shall we say "fluid" than our own I suggest not getting involved in the movement.
You could sell them the goods on a payment upon return basis thus you would be in control of all the costs and thus re-sell the service at a profit. You would need to get in contact with a agent in Ecu with a good grasp of what you want to do and go from there. I could link you up with someone in our network if you want?
I am just expressing my opinion I dont want to seen as be giving a biased response.
Good Luck

Glenn Hayes glenn@embassyfreight.co.uk

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David Mahoney, on behalf of CWC Global logistics Ltd in SL3.

Hi Peter

Agree with Glen, shipping to the Galapagos Islands will be a very specialised service and in the first instance you should ask your client to recommend a forwarder or service they have previously used. If this is not available then a recommendation from one of the other scientific camps on the islands would be your next point of call. Hopefully this will greatly lower the risks involved with the shipping/clearance and final delivery.

Recommended reading

http://www.darwinfoundation.org/english/_upload/procedure_handbook_cvs.pdf

I believe section four gives some detail on logistics.

Hope this helps

Kind Regards

David

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Peter Barlow, on behalf of Outersight (UK) Ltd in PL1.

Thanks for all the fantastic responses so far, I will be asking my contact at the charity for more advice on what they would prefer. We are pretty used to the complications of working on remote islands but don't often have to worry about the export side of things so I am glad we have found this site with all you experts on it and actively contributing. I have asked my local office of IJS Global to work ups some costs but I am open to suggestions of any specialists email is peter (at) outersight.co.uk.

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Peter,

I wanted to clarify that under Ecuadorian Customs regulations you have to decide in advance whether you are exporting using a CIF form - which means the sender pays the customs charges (which could either be you or the charity) - or exporting using a FOF form which means the receiver pays the customs charges. Your selected export company should know this. The same will apply when returning the equipment.

As others have said it will not be cheap to export to the Galapagos. Please note depending on volume it would have to go by sea freight as no large aircraft can land on the islands. Hope this helps.

Regards,
Tina

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

The importer into the Galapagos Islands would be liable to declare the goods and pay any import charges that may occur at the time of import. There are no charges for exporting goods from the UK.
Information on the Customs requirements for exporting are given in HMRC Public Notice 275. 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 Barlow, on behalf of Outersight (UK) Ltd in PL1.

This project shows some of the difficulties where there is a transfer of goods and services between countries. We have talked with the client and for now we are going to put the export and shipping side of things to one side and concentrate on getting the other formalities sorted out, there is a bit of politics and a great deal of technical stuff to sort out when working in a sensitive place like the Galapagos. Currently we have provided a cost for the equipment required and a separate cost for the services and logistics for an installation team to install the equipment which keeps things simple. I suppose it may be less expensive for the client if we export the equipment pay the duty on the equipment at our cost price then install it and then charge them for a complete system supplied in the Galapagos. Other wise we would be selling the client the equipment in the UK at our marked up cost and they would presumably pay UK VAT on the kit and then exporting the equipment and paying duty in Ecuador on the market value of the goods. They would then be paying for us to install the equipment and I will have to read up on my VAT rules to know what we do their.

There was me thinking that supplying equipment and services in the another EU country was complex. Better scared than bored!

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