I’m James and I work for a health company in Yorkshire.
My query is related to drop shipping. We have a distributor in Finland who is branching out into Norway via a third party. We will be shipping direct to Norway but invoicing our distributor in Finland. Of course, we cannot declare our Finnish distributors pricing on the commercial invoice as the importer in Norway will see these. Our distributor has suggested we export the order using their prices and then raise a credit note for the difference so that the importer does not see the low rates our distributor receives and our distributor can relax knowing the credit note will balance out the transaction. From an export compliance perspective how would this work? Would this be seen as fraudulent?
We haven’t drop shipped before so I would appreciate your help and any advice on how to proceed.
Many thanks in advance.
You can give your distributor’s invoice to the customer in Norway. Whilst separately you invoice your customer in Finland.
The goods however go straight to Norway.
Since its an EFTA country an invoice and packing list should preferably go with the goods.Is your Finland distributor arranging the transport ? Get him to send his commercial invoice to the freight forwarder, to ensure it travels with the goods.
Thanks for your response.
When completing the basket of evidence for the export audit trail would I enclose a copy of each invoice, the one issued by our distributor (which will determine import duty at customs) and the one generated by our system to our distributor (as proof of the transaction). I will be arranging the transport on a DAP basis. Our distributor will most likely not invoice the customer in Norway until they have received the goods, which could cause another problem when shipping, unless I requested one beforehand.
Its always wise to keep both documents for the audit trail.
If the transaction is DAP Norway, then all the costs are on account of the seller except for import clearance formalities and related duties and taxes and other charges payable on importation.
That is why it would be easier to have an invoice and packing list with the goods for ease of clearance.
Tell your distributor that he needs to produce his invoice to go with the goods to avoid his customer having problems.