BIFAlink is BIFA's monthly magazine covering issues of importance for the logistics and supply chain industry.
The magazine of the British International Freight Association BIFA link Customs Agents: The importance of vigilance August 2023
INSIDE: Germany recon fi gures road tolls • Navigating carbon markets • Saving orangutans • Supreme Court rules on excise duty payments • Thank you, Virgin Atlantic Cargo
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Issue: 396
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Steve Parker’s Column
Lionesses roar
BIFAlink is the official magazine of the British International Freight Association Redfern House, Browells Lane, Feltham TW13 7EP Tel: 020 8844 2266 (A company limited by guarantee. Registered in England: 00391973. VAT Registration: 216476363) Director General Steve Parker s.parker@bifa.org Member Policy & Compliance Director Robert Windsor r.windsor@bifa.org Member Support Director Spencer Stevenson s.stevenson@bifa.org Member Services Director Carl Hobbis c.hobbis@bifa.org Member Engagement Director Denise Hill d.hill@bifa.org International Relations Manager Robert Keen r.keen@bifa.org Policy & Compliance Advisor – Customs Igor Popovics i.popovics@bifa.org Policy & Compliance Advisor – Air David Stroud d.stroud@bifa.org Editorial Co-ordinator Sharon Hammond s.hammond@bifa.org Communications Manager Natalie Pitts bifacomms@bifa.org Membership Supervisor Sarah Milton s.milton@bifa.org Published by Park Lane Publishing peter@parklanepublishingltd.com Contributors Steve Parker, Robert Windsor, David Stroud, Spencer Stevenson, Carl Hobbis, Web site: www.bifa.org E-mail: bifa@bifa.org Sharon Hammond, Natalie Pitts, Igor Popovics, Brooke Neilson, Nezda Leigh, Robert Keen, Denise Hill Note to media: If you wish to use items in this magazine that are older than one month, please contact the editor to ensure that the item in question still reflects the current circumstances. Please be advised that BIFA DOES NOT OFFER LEGAL ADVICE. BIFA is not a law firm and the authors of this publication are not legally qualified and do not have any legal training. The guidance and assistance set out herein are based on BIFA’s own experience with the issues concerned and should not be in any circumstances regarded or relied upon as legal advice. It is strongly recommended that anyone considering further action based on the information contained in this publication should seek the advice of a qualified professional.
W hat a period for women’s sport! Having just caught the last overs of the Women’s Ashes’ cracking fi nish and great win, I am now looking forward watching a brilliant fi nal of the Women’s Football World Cup in August. I should at this point offer my apologies to the rest of Britain and Northern Ireland, this is an England team (these are not my rules). Anyway, my point is, what a transformation we are seeing for women’s sport and not only in this country, but around the world. A transformation that is being mirrored in the freight industry. For our industry, having attended a number of Young Forwarder Network events, I have been encouraged to see an ever-larger representation of females. The confidence and enthusiasm that they express when joining
the discussions and activities is inspiring, engaging with the guest speakers and asking great questions. A drive to support their personal development through knowledge and learning that suggests to me we are heading in the right direction. In general, for young people irrespective of gender, BIFA continues to push and support apprenticeships, the Freight Development Pathway and of course training. In late June, we welcomed the news of additional government funding for the Generation Logistics initiative. All of the above is positive for the future and at BIFA we will continue to support young people’s engagement within the freight and logistics community. Representation Before I get too carried away with all this positivity, I must bring us back to an important topic. An immense amount of our time at BIFA is being spent on Customs Representation. This is particularly crucial when you are acting as an Indirect Representative. In past editions of BIFAlink , Robert Windsor has written several articles related to this topic, giving some robust advice and guidance. I obviously will not share details but suffice to say we have heard from several sources about a growing number of actions being taken by HMRC against BIFA Members, in particular, relating to valuation issues surrounding Chinese imports into the UK cleared on a DDP basis. Please ensure you follow due diligence on your customers and do all you can to verify that they are established in the UK. Business Leaders Forum Lastly for this edition – could I ask business leaders to put 19 October 2023 in their diaries. I am currently working on the agenda for the second Business Leaders Forum event and invitations will be sent out soon. I know how busy you are and how important your time is, so let me reassure you that I intend to make this event as informative and worthwhile as possible.
Director General
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BIFA News
Ian Matheson, from Impress Communications, reviews some recent news that might impact on Members’ business
Air cargo rates still failing to reach pre-pandemic levels
One of the main conclusions from Drewry’s recently published Container Census & Leasing Annual Review & Forecast 2023/24 report is that the global telematics- enabled container equipment fleet will grow sixfold over the next five years and account for 30% of global box inventories by 2027, driven by wider adoption across the dry container fleet. Average demurrage and detention charges are experiencing a year-on-year decline of 25% in 2023, with a significant 14% decrease compared with the rates in 2020, according to Container xChange’s annual Demurrage and Detention Charges benchmark report for 2023. However, there are still 11 ports where demurrage and detention fees remain higher than in 2020: Antwerp, Jebel Ali, Ningbo, Port Kelang, Rotterdam, Shenzen, Singapore, Tianjin, Xiamen, Hong Kong and Guangzhou. A record 285,000 teu of new containership capacity was delivered in June, as a result of the orderbook boom of 2021- 22, according to consultancy Alphaliner. This was less than the 400,000 teu Alphaliner predicted, due to labour shortages in Asian yards and deliveries being pushed back due to the sluggish cargo market. The trend seen in June looks set to continue in the coming months as the orderbook stands at 7.6 million teu, some 28% of the current fleet on the water. IN THE WAREHOUSE As part of outline planning permission for over 2.3 million sq ft of logistics floor space at its Symmetry Park site in Kettering, Tritax Symmetry plans to develop a 500,000 sq ft cross dock logistics facility, built to net zero carbon in construction, with a minimum of BREEAM ‘Excellent’ certification (https://bregroup.com/ products/breeam/) and an EPC ‘A’ rating.
IN THE AIR Air cargo rates remain well below pandemic-era levels and, when adjusted for fuel, are close to 2018-19 levels, according to investment bank Stifel’s market update published last month and based on the latest data from the Baltic Exchange’s Baltic Air Freight Index. IATA reported that global demand in May, measured in cargo tonne-kilometres (CTK), fell 5.2% compared with the same month in 2022 (-6% for international operations). However, capacity measured in available cargo tonne- kilometres (ACTK) rose 14.5% compared with May 2022. This was driven primarily by belly
develop a strategic rail freight interchange supported by up to 3.6 million sq ft of modern, sustainable logistics warehousing, including ancillary B1 (office, light industrial, research and development) and B2 (general industrial) warehouses, with works expected to start this summer. Following several months of testing with Eurotunnel’s Le Shuttle Freight and “unaccompanied trailers” customers, Getlink is planning to launch Sherpass this autumn. This will provide a services platform to simplify border crossings for freight and the supply chain by providing a turnkey, one-stop solution that saves hauliers a significant amount of time by eliminating the need to enter information and centralising all the data flows required for cross-border exchanges. ON THE OCEAN P&O Ferries has extended the charters on its ships Norsky and Norstream, maintaining its presence on the Zeebrugge- Teesport and Zeebrugge- Tilbury routes for the long term. It has also reinforced its commitment to the Zeebrugge- Teesport route through the extension of a charter agreement with Finnlines for its ship Finnpulp, which will continue serving the route with two sailings per week. Schedule reliability for the global container shipping industry in May continued its rebound from the depths of the delays in 2021 and 2022 to reach a near three-year high, according to analytics firm Sea-Intelligence. It added that carriers have also increased capacity back into the markets reducing the number of sailings blanked from their schedules.
capacity which continues to increase as demand in the passenger business recovers, with capacity now 5.9% above May 2019 (pre-pandemic) levels. OVERLAND SEGRO plc has completed the acquisition of 419 hectares of land at the former Radlett Aerodrome in the Upper Colne Valley, Hertfordshire. It will now
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BIFA News
The Big Logistics Diversity Challenge 2023 – driving diversity forward
Companies representing the UK’s Logistics and Transport industry came together at Newark Showground on 22 June 2023 to participate in The Big Logistics Diversity Challenge. First held in 2019, The Big Logistics Diversity Challenge (BLDC) has truly captured the hearts and minds of the industry – demonstrating the passion, support and enthusiasm companies have to improve equality, diversity and inclusion, as well as the business benefits attained by establishing a diverse workforce. Growing by a staggering 40% since its launch, The BLDC has become a staple in the industry’s event calendar, with many key industry
communication and teamwork skills to the test, the challenges are developed to ensure that everyone has a role to play. A number of BIFA Members fielded teams at the event and congratulations go to the following who went home with trophies: • Best team name – Woodland Group “We will rack you!” • Best teamwork – DFDS “Born to move” • Best team performance – DFDS “Red hot chilli steppers” • Team of the year – XPO Logistics For more information on the BLDC and to register a team for 2024, visit https://biglogistics diversity.co.uk/
Woodland Group team members take part in BLDC 2023
stakeholders supporting it year-on-year. The BLDC is the only team- based logistics event showcasing the diversity that the UK logistics industry is seeking to achieve. The challenges are designed to promote the message that diverse teams
work better together, with companies taking part in a series of physical, mental and skill-based sessions including: catwalk challenge, quad bikes, archery, agents in disguise, human table football, the mighty quiz and dancing with the shows. Designed to put a team's
Pledge emissions calculator
Furthering the cooperation with Pledge, BIFA Members now have access to the Pledge Freight Emissions Calculator (https://bifa.org/ information-guidance/ technical-information/ sustainable-logistics/). Simply enter the origin and destination along with a few details of your shipment, select the mode of transport and you will be presented with
a Smart Freight Centre accredited, GLEC Framework compliant carbon emissions figure. The Pledge Emissions Calculator covers sea, air, road, rail, inland waterways and logistics sites. Once you have calculated your freight emissions, you can use your results to set targets and explore reduction strategies for future shipments.
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BIFA News
Germany recon fi gures road tolls to encourage emission-free vehicles
BIFA monitors news of tolls and surcharges throughout Europe and reports on this item that will be of interest to BIFA Members who may see new charges imposed for freight travelling by road in Germany. A key change in Germany is the planned introduction of a CO 2 surcharge per kilometre as a fourth toll sub-rate on December 1, 2023. Based on a price €200 per ton of CO 2 , this results in a CO 2 surcharge of €0.158 per kilometre for a vehicle greater than 18 t with five axles and more. The toll sub-rate for infrastructure costs is to remain unchanged for the time being but will be divided into two CO 2 emission classes: 1-4 and 5. The toll rate for noise pollution will remain unchanged and the toll rate for air pollution will receive the new category G for emission- free vehicles as well as vehicles that are more environmentally friendly than category A. In case of technical or legal obstacles, the start date can be postponed by ministerial decree of the German Federal Ministry for Digital and Transport (BMDV). As a further step, an extension of the toll to vehicles over 3.5 t is planned from
July1, 2024. To this end, the partial toll rates will be expanded to include the weight class for vehicles over 3.5 t. The German government is making use of the option opened up by the Eurovignette Directive to exempt tradesmen's vehicles up to 7.5t from the toll. Emission-free vehicles are fully exempt from tolls until December 31, 2025. From January 1, 2026, a greatly reduced toll will then be introduced for zero-emission vehicles, with only 25 percent of the infrastructure costs being charged.
As of January 1, 2024, there will no longer be a toll exemption for gas-powered trucks. Gas trucks do not have their own CO 2 emission class, but fall into classes 1, 2 or 3 - the spread of costs is small (€0.158 - €0.15 - €0.142). In class 1 Euro VI gas trucks have the same costs as a Euro VI diesel. The draft also provides for the possibility of staggered tolls based on traffic volume to reduce congestion on selected routes. Toll percentages for road costs can be increased at times of particular traffic congestion or decreased at times of
particularly low traffic congestion. An interesting detail is that toll data can be analysed pseudonymously in the future, for instance to determine the utilisation of truck parking spaces. There has been criticism from transport bodies of the timetable for the measures. They advocated postponing the introduction of the CO 2 surcharge until after the market for alternative power systems has ramped up. The fact that the conversion of transport to climate-friendly alternatives is a necessity was not questioned at any time.
The Limits of Liability for Carriers
In association with
By air – Warsaw Convention (17 SDR): £17.56 per kg
By sea – Hague Visby rules (2 SDR): £2.07 per kg £688.59 per package
BIFA STC: (2 SDR): £2.07 per kg
By road – CMR (8.33 SDR): £8.60 per kg
Insurance for the Marine & Logistics industries
(The SDR rate on 18 July 2023,
By air – Montreal Convention (22 SDR): £22.72 per kg
according to the IMF website, was 1.03288)
+44 (0) 1628 532613
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August 2023 | 7
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Policy & Compliance
local communities, typically in emerging economies, including improved employment and biodiversity protection. What makes an environmental project viable for offsetting business emissions? The VCM is not overseen by a single overarching body; there are a number of globally recognised standards including Verra and Gold Standard. Companies investing in projects under the watchful eye of standards like Verra, Gold Standard and others are ultimately more likely to be successful in reducing/removing emissions. When it comes to reviewing the efficiency of offsetting projects, it is important to understand key areas of diligence, such as leakage and permanence. If a project does not meet criteria surrounding these characteristics, it cannot be verified or registered as a source of offsets. Leakage refers to whether a project would simply shift emissions elsewhere, while permanence explores how long carbon remains out of the atmosphere as a result of the project. Where do we go from here? When used properly, carbon offsets are an essential tool if you are a business looking to address emissions as part of a net-zero target under the Science Based Targets. Offsetting can also be used on the path to net-zero to address emissions whilst decarbonisation efforts are under way. The VCM helps fund offsetting projects that are having a positive impact on carbon levels in the atmosphere, yet there is still room for the market to evolve into something more transparent and effective. Conversations surrounding offsetting should no longer revolve around whether offsets are a weapon in the war against climate change, but rather how we can improve accountability, and effectiveness. With VCM projects varying considerably in quality and impact, working alongside offsetting experts can help to create confidence that any investments are made to pre-vetted high- quality offsetting projects.
Getting to grips with carbon markets and offsetting projects and how to best approach them can be overwhelming at fi rst. This article from Pledge aims to make carbon markets more approachable by exploring the history of these markets and the important role they play in enabling BIFA Members to offset their residual emissions A beginner’s guide to navigating carbon markets
Understanding the origins of carbon markets In 1997, the Kyoto Protocol was founded by a group of developed countries that pledged to reduce and limit their greenhouse gas (GHG) emissions as an early means of combating irreversible climate change. The Clean Development Mechanism (CDM) is an example of a compliance carbon market, where countries who failed to meet mandatory emission reduction targets could purchase emissions from projects in developing countries that reduce/remove emissions. What is the difference between the compliance and voluntary carbon market? Compliance markets are used by companies that are mandated to adhere to government emission trading schemes to drive emission reductions. The EU Emission Trading
are traded on exchanges. It is important to note that these allowances do not represent any emission reduction or removal. The voluntary carbon market (VCM) brings together projects that reduce or remove emissions with companies that want to support these projects to mitigate their carbon footprint. It is important to note that companies choose to purchase carbon offsets from the VCM willingly. The importance of the voluntary carbon market Companies tend to purchase offsets from the voluntary carbon market to address their residual emissions or to achieve other sustainability objectives such as carbon neutrality. But it is important to remember that offsetting should be used as a tool to address those emissions that cannot be reduced. VCMs are an important way of providing funding to climate and sustainability projects. There are a range of positive outcomes for
“ When used properly, carbon offsets are an essential tool if you are a business looking to address emissions as part of a net-zero target
System (EU ETS) – scan the QR code – is one of the largest schemes in the world and it is based on emission allowances that
8 | August 2023
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Legal
Court con fi rms carrier liability for excise duty payments under CMR
A recent Supreme Court decision re-examined a haulier’s liability under the CMR convention for excise duty should the load be lost or stolen. In this article we will examine the legal arguments challenging the original decision and the reasons given by the Supreme Court for upholding it
T he Supreme Court has issued its judgment in the case of JTI Polska Sp Z o.o. and Ors v Jakubowski & Ors [2023] UKSC 19, af fi rming the House of Lords’ decision in James Buchanan & Co. Ltd v Babco Forwarding & Shipping (UK) Ltd. [1978] AC 141. In Buchanan v Babco , the House of Lords held that excise duty payable in respect of excisable goods lost or stolen during transit is recoverable in full from the carrier (in addition to the market value of the goods), as ‘other charges’ under Article 23.4 of CMR. In the present appeal, whilst the carrier accepted that in light of Buchanan the first instance court was bound to hold the carrier liable for the excise duty, it submitted that the House of Lords’ decision was wrong and should be departed from, and applied for a certificate enabling a direct appeal to the Supreme Court. The appeal was accepted on the basis of criticism of Buchanan by academics and the Court of Appeal in the case of Sandeman Coprimar SA v Transitos y Transportes Integrales SL [2003] EWCA Civ 113; [2003] QB 1270 . The Supreme Court’s decision Article 23.4 of the CMR Convention provides: “In addition, the carriage charges, Customs duties and other charges incurred in respect of the carriage of the goods shall be refunded in full in case of total loss and in proportion to the loss sustained in case of
The Supreme Court ruling upheld the decision that the carrier was liable for excise duty of almost £500,000 in this case relating to the theft of a consignment of cigarettes.
partial loss, but no further damages shall be payable.” Courts in other jurisdictions have either adopted a ‘broad interpretation’ of Article 23.4 (as per Buchanan) in which charges incurred due to a loss in transit are recoverable from the carrier, or a ‘narrow interpretation’ in which recovery is limited to those charges that would have been incurred if the carriage had been performed without incident, thus excluding excise duty levied as a result of loss or theft. The Supreme Court acknowledged that there were powerful arguments in favour of the narrow interpretation, in particular those based on the object and purpose of Chapter IV of CMR and the structure of the compensation scheme for the loss of goods. However, the court determined that the travaux préparatoires (documentary evidence of the negotiation, discussions and drafting of a final treaty text), which the appellant had sought to cite in support of the narrow interpretation, was unable to demonstrate a definitive legislative
intent in relation to the wording of Article 23.4. The Supreme Court considered that the broad interpretation was tenable on the basis of the arguments heard by the House of Lords in Buchanan and similar findings made by the higher courts in other CMR jurisdictions (including Denmark, Belgium and Lithuania). As such, the Supreme Court found that the required threshold of the decision in Buchanan being shown to be untenable had not been met. The court ruled that Buchanan should be upheld and by doing so maintained the status quo. Given the high values associated with excisable products, this judgment upholds a decision that significantly increases a haulier’s liabilities should a loss occur. All BIFA Members physically engaged in transporting excise goods should liaise with their insurers to confirm that they have adequate cover.
“ This judgment upholds a decision that signi fi cantly increases a haulier’s liabilities should a loss occur
BIFA would like to thank Hill Dickinson LLP, for allowing publication of this article
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Member Engagement
“ Andrew served as a non- executive director of BIFA for 14 years, as well as being its chair from 2009 to 2011
A s indicated in the July issue of BIFAlink , BIFA is strengthening the team of regional representatives who support and engage with Members across the UK, and who are the trade association’s ‘eyes and ears’ at a local level in each of its regions. This has led to the recent appointment of Andrew Melton as regional representative covering the Midlands and North Region. Andrew has almost 50 years of experience of the freight and logistics industry across all modes. He joins BIFA from Ligentia UK Ltd where he was UK compliance manager. No stranger to the work of the trade association, Andrew served as a non-executive director for 14 years, as well as being its chair from 2009 to 2011. He has been an active participant in BIFA’s Customs, Surface, and Legal and Insurance policy groups, and various ad hoc working groups. See page 23 for details of regional Member meetings being planned in the Midlands, Manchester, Liverpool and Leeds. Andrew can be contacted by email at a.melton@bifa.org
Meet Andrew Melton
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August 2023 | 11
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Policy & Compliance
Customs Agents: The importance of vigilance
There are clear risks involved in acting as a Customs Agent, whether Direct or Indirect. It is important that Members fully understand and assess those risks
C ustoms representation continues to be an important part of the work done by BIFA Members for their customers. BIFA has been clear in its advice that, wherever possible, Members should act as a Direct Customs Agent (a Direct Representative in pre-Brexit terminology). However, in many cases this will not be possible, because the customer/importer is a Non-Established Taxable Person (NETP – not established in the UK). Where a Member undertakes an import entry for an NETP, that can only be done on the basis that the Member acts as an Indirect Customs Agent (Indirect Representation in pre-Brexit terminology). When acting as an Indirect Customs Agent, the Member assumes joint and several liability for any Customs debt arising out of the entry. Customs debt includes duties, import VAT and any fines or other levies imposed arising out of the importation of the goods and includes any liability arising out of a post-entry demand. Post-entry, HMRC may assess, for example, that the value of the goods was under-declared, or an incorrect commodity code used and that additional duty or import VAT is therefore payable. Members should also be aware that even when acting as a Direct Customs Agent, personal liability may arise. This would be the case where the Member knowingly made a false declaration. Specific issues arise in relation to entries made under the Postponed VAT Accounting (PVA) procedure. Legislation requires
that the Customs Agent undertakes quite stringent due diligence in relation to those on whose behalf PVA entries are submitted; a failure to do so exposes the
Member to personal liability for the postponed VAT. See for example the HMRC Guidance Due diligence when making Customs declarations (www.gov.uk/guidance/due-diligence- when-making-customs-declarations).
Warning on UK-incorporated companies Members should also be aware that they may unwittingly fail to recognise that a UK-incorporated company is in fact an NETP, and that they cannot properly act as a Direct Customs Agent (regardless of the box ticked within CDS). In such cases, the Member will be treated as an Indirect Customs Agent and assume joint and several liability. Members should see the BIFA article published in the May 2023 issue of BIFAlink for further discussion on NETPs (scan the QR code). The increasing prevalence of (i) DDP shipments; and (ii) foreign based e-tailers and other foreign sellers holding their stock in the UK in fulfilment houses pending sales being made while the goods are in the UK, have given rise to increasing requests to Members to act as Indirect Customs Agents. It will be for
“ Members should also be aware that even when acting as a Direct Customs Agent, personal liability may arise
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Policy & Compliance
responsible for such freight, duties, charges, dues or other expenses.” It makes clear the Customer is responsible for all expenses arising out of performance of the Customer’s instructions, including duties and taxes. Clauses 17(A) and 20(A) supplement clause 12(B). Clause 17(A) is a warranty clause, which is an undertaking from the Customer that all information it provides (including the particulars of the goods to be imported/cleared) are full and accurate. Clause 20(A) is the indemnity clause, to be read in conjunction with clause 17(A). If the customer breaches the warranty in clause 17(A), the BIFA Member is entitled to be indemnified for all financial consequences including those that may arise out of post-entry examinations and demands. As already said, whilst the BIFA STC provide the contractual entitlement to be indemnified for any expenses incurred by the Member, enforcing those rights may not always be possible. Customers based overseas, potentially seeking to avoid (or at least unlawfully minimise) duties and taxes are unlikely to stand behind their freight forwarder if and when HMRC raises substantial post-entry demands. Strong advice BIFA’s strong advice is to ensure that you undertake careful due diligence of all customers for whom you act as a Customs Agent. Do not presume that a UK registered company will not be treated as an NETP. Do not take any information at face value. Check EORI and VAT numbers to ensure that they are valid and registered to the party seeking to use them (and re- check that information on a regular basis). Be vigilant to the possibility of fraud. Obtain written authority directly from the importer on whose behalf you act, to act as its Customs Agent (see BIFA Good
Practice Guide on the Appointment and Responsibilities of a Customs Agent – scan the QR code). Commodity Codes should be checked, and declared values should
Members to undertake their own due diligence and satisfy themselves that the customers are ‘good for the money’, including possible post-entry demands. It is not straight-forward to identify the extent of the financial exposure that exists, considering that HMRC can look back several years when assessing entries and making post-entry demands. Problems in relation to PVA entries will take several months, at least, before they come to light. Will your customer still be around and willing to indemnify you after such a passage of time? Regardless of the protections that may be contractually available under the BIFA STC, if the customer is not good for the money (or not accessible to effective legal process due to inefficient or inaccessible legal systems in the customer’s place of domicile) then this will be little consolation. Members should not take false comfort from the contractual provisions within the BIFA STC. However, where the customer is financially sound, the BIFA STC do provide the tools required to ensure that Members are contractually entitled to be reimbursed for liabilities that the Member may incur in discharging the customer’s instructions. The STC define ‘Customer’ widely as “any person at whose request or on whose behalf the Company undertakes any business or provides advice, information or services.” This may catch multiple parties involved in a request to a Member to undertake import declarations. Clause 12(B) provides “…the Customer shall remain
be sense-checked. The method of valuation should be considered – if Method 1 (scan QR code below) is to be used, is there a genuine transaction underpinning the movement of the goods into the UK? If not, Method 1 (the transaction value) may not be the appropriate method
“ BIFA’s strong advice is to ensure that you undertake careful due diligence of all customers for whom you act as a Customs Agent
and you will have to consider which method should be used (see HMRC Notice 252). Be cautious of ‘commercial invoices’ that are in fact a document created by the importer for import purposes only and not representative of a genuine transaction.
There are clear risks involved in acting as a Customs Agent, whether Direct or Indirect, and it is important to understand those risks and to carefully assess the likelihood of your customer being willing and able to indemnify you for any financial obligations that fall at your door. It should be noted that this generic guidance does not constitute advice and Members should consider taking formal legal advice where appropriate, with a view to writing bespoke contracts for their customers. Acting as an Indirect Agent increases a Member’s risk exposure, and Members should always ensure that they conduct the appropriate due diligence checks on clients.
August 2023 | 13
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BIFA Awards
Kea and Ramon would travel. First, JCS had to bring the female orangutan, Kea, from Jersey, which has its own CITES permits and other requirements. “We had to have an export CITES permit issued by the Jersey authorities showing JCS as the importer in the UK so that we could bring Kea over by boat to join Ramon for the flight to Germany,” Knowles said. “We also had to apply for UK import and re-export licences for Kea, and the zoos in Germany had to list JCS (rather than Jersey Zoo) as the exporter. Additionally, representatives from the German zoos had to fly over to take faecal samples from both animals to satisfy the German import health requirements.” “Fortunately, JCS has longstanding relationships with the relevant authorities, which pulled out all the stops to facilitate the move. This comes from working with them for 37 years,” Knowles said. “A lot goes on to make these moves as seamless and stress- free as possible for the animals.” Transition stage Orangutans are highly intelligent, so Kea and Ramon needed plenty of interaction and stimulation as well as fresh fruit and water during their journey. Ramon’s keeper from Blackpool Zoo accompanied them, helping with the transition to quarantine and introducing the apes to their new keepers. The ‘freighter’ flight JCS booked was the last but one that BA intended to operate, although the carrier subsequently extended the service. This allowed JCS to bring another male orangutan from the Netherlands to Blackpool to replace Ramon. “It has worked out very well,” Knowles said. “Ramon had not been interested in mating with the females at Blackpool, but has mated with the ones in Germany, while the male we brought back over from Holland has mated with the females in Blackpool. “Both of the orangutans we flew to Germany have settled in extremely well, with Ramon gaining himself two new girlfriends and Kea meeting the man of her dreams. Young ones are due in the near future, so all parties are very happy.”
The female orangutan, Kea, travelled by boat from Jersey to the UK before flying to Germany with the male, Ramon
Helping to save the world’s orangutans
JCS Livestock, a division of James Cargo Services, won BIFA’s Cool & Special Cargoes Award 2022 in recognition of the successful move of two orangutans to Germany from Blackpool Zoo and Jersey Zoo
W ith fewer than 164,000 left in the wild, orangutans are critically endangered. Their natural habitats in Borneo and Sumatra are under threat from agriculture as well as growing urbanisation. With this in mind, Philip Knowles, JCS Livestock general manager, said: “We were thrilled to be asked to help with the relocation of two orangutans – named Ramon and Kea – from Blackpool Zoo and Jersey Zoo to Münster Zoo and Dortmund Zoo in Germany, to springboard their conservation efforts.” Considering the restrictions now in place following Brexit and the impact these have on CITES permits, plus Jersey’s status as an independent sovereign state, the move would be no mean feat.
“ Because of Brexit, all animals [excluding pets] travelling from the UK into the EU need to spend time in quarantine
Knowles explained: “Because of Brexit, all animals [excluding pets] travelling from the UK into the EU need to spend time in quarantine. The orangutans were to be held for six weeks at Frankfurt Zoo, which had the space to accommodate them. As quarantine only starts when all the animals have arrived, it made sense to move Kea and Ramon at the same time.” Air option Quarantine requirements in Germany meant that the great apes could not be transported by road through the EU. Air was the only option. With ports heavily congested, British Airways (BA) was operating Boeing 787s and A380s as freighters on a handful of its European routes, placing cargo in their bellies and passenger cabins. It was on one of these flights that
Cool & Special Cargoes Award
American Airlines Cargo provides one of the largest cargo networks in the world with cargo terminals and interline connections across the globe. Every day, American transports cargo between major cities in the United States, Europe, Canada, Mexico, the Caribbean, Latin America and Asia.
14 | August 2023
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BIFA Awards
Pictured are: Kirk Murray, Jenna Speed, Corey Chambers, Cameron Smith, Jordan Prangnell and Graeme Wilkinson.
BIFA Young Freight Forwarder of the Year fi nalists have been given behind the scenes tours of the Virgin/dnata operation at London Heathrow Airport Thank you, Virgin Atlantic Cargo
V irgin Atlantic Cargo has been the sponsor of the BIFA Young Freight Forwarder of the Year category of the BIFA Freight Service Awards for a number of years now and has been offering fi nalists in the category the opportunity to visit its facilities. The tours After donning hi-vis and safety boots, three groups of finalists from the BIFA Awards 2021 and 2022 were treated to fantastic behind-the- scenes, access-all-areas tours of the Virgin/dnata warehouse at dnata City East, adjacent to London Heathrow Airport, and an airside tour of numerous Virgin Atlantic aircraft at various stages during their efficient turnaround time at the terminal. Our thanks go to Joe Ellis, regional sales manager UK & Europe, and Kirk Murray, operations, who gave up their precious time to give those in
Thomas Frost Sharon Hammond and Ronan Kitchin
“ Three groups of fi nalists from the BIFA Awards 2021 and 2022 were treated to fantastic behind-the- scenes, access-all- areas tours
Kelly Bell, David Stroud, Thomas Low
and Elliot Haldane
16 | August 2023
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Policy & Compliance
Warning on diversion of trade to Russia
S ince the commencement of the war between Russia and the Ukraine, BIFA has been warning Members to be extra vigilant when asked to ship goods to Russia. The Russia sanctions regulations impose fi nancial, trade, aircraft, shipping, and immigration sanctions for the purposes of encouraging Russia to cease actions that destabilise Ukraine, or undermine or threaten the territorial integrity, sovereignty or independence of Ukraine. Trade sanctions seek to deny Russia access to the goods, technologies and revenue necessary to pursue its illegal war, and preventing the undermining of trade sanctions, export controls and other restrictive measures designed and implemented in response to Russia’s invasion of Ukraine is paramount. Awareness of the risk and obligations in relation to sanctioned goods is an important first step for trade. Direct trade between the UK and Russia has fallen significantly since sanctions were introduced. However, Russia will seek to procure restricted goods via other routes. As such, there are risks around displacement of trade and diversion of goods to Russia. One area of particular concern is the circumvention of these regulations, which would undermine these sanctions. Spotting circumvention can be difficult, but the Export Control Joint Unit (ECJU) has provided a document ( NTE 2023/08: Russia Sanctions – Trade Sanctions
Circumvention ) highlighting areas and behaviours to consider – scan the QR code below to open the guidance. Members have contacted BIFA with concerns about two shipments being tendered to them. Their information is practical and highlights the difficulties of identifying attempts to circumvent sanctions. In both cases there was an unsolicited approach from an overseas entity to ship goods from the UK. Warning signs The common points in both cases were: • That the approach to ship the goods originated outside the UK from traders they could establish very little about; • Direct communication with the prospective overseas client was difficult; • Shipping documents lacked some information; for instance in one case the UK shipper was not mentioned; • Shipments were high-end consumer goods or medical goods; • Routings were complex and in one case, there was a request to mark the shipping documents as ‘being in transit’. In both cases the BIFA Member declined the shipments – their decision was
Cameron Smith and Jordan Prangnell in a tug during push-back
attendance an experience to remember, including access to the cargo hold, the cabin crew onboard rest area, the cockpit and a ride in a tug as an aircraft was pushed-back ready for departure. Enter the BIFA Young Freight Forwarder of the Year 2023 Award (www.bifa.org/awards) to be in with the chance of attending one of these exclusive tours next year (subject to availability).
based on no one single fact, rather a cumulation of points and issues.
August 2023 | 17
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Policy & Compliance
The inherent risk in handling lithium-ion batteries during transport by sea, land or indeed by air is well documented. Moreover, demand for their use is growing exponentially as nations grapple with pathways to net zero objectives. Here TT Club’s MD Loss Prevention, Mike Yarwood, highlights the nature of the risks in transporting them and argues that their current IMDG Code Class 9 categorisation is totally unsuitable to safeguard against such risks Lithium-ion batteries: The case for re-classi fi cation
minimise the risks and, if necessary, make sure there is an effective response to any catastrophic event. As with many successful technologies, market demand has outpaced the development of safety regulations. Since the mid- 1980s, lithium batteries have been classified under dangerous goods regulations for transport based on the weight of lithium contained in the cells or battery. As the technology has advanced, the amount of energy derived from the active material has increased by up to 50%, while the weight of cells has reduced greatly. Given their nature and use, newly manufactured lithium-ion batteries can be transported by themselves as individual items, packaged with products (ie replaceable) or within products (not intended to be removed). In addition, consideration should be given to reverse logistics, including used, damaged and faulty products being returned, batteries being shipped as waste and those being shipped to be recycled. In all instances, the state of charge of any battery is a relevant factor; less stored energy generally equates to less risk. Currently lithium-ion batteries are classified as one of four UN numbers, depending on power output or the weight of lithium in them and whether they are contained within devices or shipped separately. • UN 3090, Lithium metal batteries (shipped by themselves); • UN 3480, Lithium-ion batteries (shipped by themselves); • UN 3091, Lithium metal batteries contained in equipment or packed with equipment; • UN 3481, Lithium-ion batteries contained in equipment or packed with equipment. IMDG Code All four are Class 9 in the IMDG Code – Miscellaneous dangerous substances and articles. This classification dates from a change in IMDG Class from 4.3 (substances which, in contact with water, emit flammable gases) decades ago when the predominant available product was button cells, which were significantly less powerful than those today. At that time experts
L ithium batteries are today used to power a variety of products, including hand-held devices (such as phones or cameras) through to larger items such as power tools and electric vehicles of all types. The market has expanded rapidly over the last two decades due to developments in electronics and now broader energy transition globally. Understanding the risks in transporting them is crucial. Lithium-ion batteries have become a preferred energy source given their high-power density and light weight, as well as their ability to recharge and, in the case of vehicles, their apparent environmental credentials over fossil fuels. Inevitably, these batteries are moved by all modes of transport. Serious incidents However, following serious incidents, regulatory restrictions regarding the carriage of lithium batteries by air have been implemented, resulting in greater use of surface modes. Coupled with a further number of recently recorded incidents, safety concerns around the transporting of lithium-ion batteries and their handling at ports rightly continue to grow among the maritime community. The hazard that a given lithium- ion battery presents is primarily related to the amount of contained reactive substances, including lithium and other reactive material. The sharp rise in demand has been
accompanied by supply of cheaper, poorer quality and untested batteries, including refurbished and even homemade power banks. E-commerce platforms have facilitated a global trade in these potentially lethal batteries, often circumventing global standards and regulations. The logistics industry needs to have a clear understanding of the dangers inherent in transporting these batteries which can include fire, explosions and toxic gas emissions. The release of toxic fumes may be the first alert, but fire with temperatures higher than 1,000° C can be reached in a matter of seconds and, as the mix of chemicals and metals ignites, devastation can ensue. There needs to be increased efforts to A range of garden power tools incorporating the type of lithium batteries that present risks during transportation
“ The sharp rise in demand has been accompanied by supply of cheaper, poorer quality and untested batteries, including refurbished and even homemade
power banks
18 | August 2023
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Policy & Compliance
and regulators were persuaded that those smaller batteries presented reduced hazards compared with their larger counterparts through the supply chain. Clearly there is now a need for a radical review of this classification, as the size and energy capacity of these batteries has altered dramatically since then. As has the volume being carried in containerships. The situation is further complicated by the existence of various special provisions applicable to lithium batteries. The focus here is on one alone. On the basis that smaller lithium batteries present a reduced hazard, within the UN regulations SP188 exists to enable transport under specific conditions. Where lithium batteries or cells meet these requirements, when offered for transport, they may not be subject to other provisions of the IMDG code. Notwithstanding qualification for transport under SP188, however, these batteries continue to be dangerous goods, presenting the same risks, rather on a smaller scale. Once lithium batteries, particularly those shipped under SP188, are placed into the intermodal supply chain there is very little opportunity for the cargo to be checked, visually or otherwise, to verify compliance. Incorrect classi fi cation The clear conclusion is that lithium- ion batteries are not classified as sufficiently hazardous and the range of potential special provisions increases complexity and uncertainty. All this may have serious ramifications when a container is being accepted for shipment or a ship stowage plan is being compiled. In addressing the commercial opportunities in answering the agenda to move away from fossil fuels, there also needs to be urgent engagement from all involved to resolve the justifiable concerns of the logistics industry – ahead of regulatory strengthening. BIFA is grateful to TT Club’s MD Loss Prevention, Mike Yarwood, for this article. Visit www.ttclub.com for further information and guidance on the transport of Lithium-ion batteries and other topics.
Longer lorries allowed on the UK’s roads
I n general, the transport industry welcomed the announcement from government that longer lorries will be allowed on Britain’s roads. Lorry trailers up to 15.65 m long have been permitted to be used since 31 May 2023 under legislation laid in Parliament on Wednesday 10 May.There are already around 3,000 such lorries in use. The total length of the tractor and trailer is 18.55 m – which is about 2.05 m longer than the standard size. This decision follows an 11-year trial of longer semi-trailers (LSTs), during which the additional load capacity of such vehicles was evaluated alongside the safety aspects of their operation. The trials indicated that this change would increase productivity, reduce HGV journeys – by carrying the same volume of freight in fewer lorries – and cut mileage, congestion and carbon emissions. However, such vehicles are not suitable for all trades; the main beneficiaries are sectors carrying mainly volumetric freight such as light consumer goods and retail products. The new lorries will move the same volume of goods using 8% fewer journeys than current trailers. The Road Haulage Association commented: “The government could, however, go further by increasing the permitted weight to 48 tonnes. This will be increasingly important when we roll out zero- emission trucks, to compensate for the increased weight from batteries.” There is a precedent for such a
facilitation. In 2018, the UK government gave the go-ahead for drivers with a standard UK category B driving licence to drive vehicles powered by electricity, natural gas, biogas or hydrogen up to the weight of 4.25 tonnes for the purpose of transporting goods. Previously motorists would have been required to obtain a category C driving licence (an HGV licence) if they wanted to drive a van in excess of 3.5 tonnes in weight. Tail swing concerns One campaign group has warned that the tail swing of the longer lorries when turning covers a larger area, which could put pedestrians and cyclists at risk. Ministers have said the lorries, which have been trialled since 2011, are safe; in fact they have a lower accident rate than the currently standard 16.5 m articulated lorry. The Department for Transport (DfT) has said that the vehicles had been involved in “around 61% fewer personal injury collisions than conventional lorries”. The DfT has said the vehicles would help businesses be more productive. The move is set to result in £1.4 billion of economic benefits and take one standard- size trailer off the road for every 12 trips or, looked another way, potentially reduce journeys by this class of vehicle by approximately 8%. It estimates the vehicles will save 70,000 tonnes of carbon dioxide from being released into the atmosphere over 11 years.
“ The clear conclusion is that lithium-ion batteries are not classified as sufficiently hazardous
and the range of potential special
provisions increases complexity and uncertainty
August 2023 | 19
www.bifa.org
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