Regulatory alerts

The Mexican Tax Authority (SAT) announced in May 2021 that they were mandating that all transportation carriers issue a waybill supplement known as the Complemento Carta Porte (Carta Porte). This waybill supplement must accompany any import, export and domestic shipment in an invoice, detailing the origin, destination and type of goods transported into and through Mexico.

• The origin and destination of goods will be recorded so that any goods moved via ground freight (road or railways), air freight, ocean freight or river freight will all be easily identifiable.
• The legal possession of moved goods and merchandise will be verified.
• The amounts of VAT produced by transportation services will be confirmed.
• Shipping and recipient information will be recorded, including location.

The information detailed in the Mexican Carta Porte Supplement includes but is not limited to the transport used to move goods, category of product, the packaging, weight, quantity, insurance, driver and vehicle info, information about shipping location and recipient. Most of this information will need to be supplied by the shipper prior to shipping. The Carta Porte must be added to an Online Tax Receipt (Comprobante Fiscal Digital por Internet – CFDI).

The effective date of this regulation is January 1, 2022, but the SAT have advised that the enforcement of the Carta Porte will begin as of September 30, 2022. This appears to allow shipping customers and transportation companies to make good faith efforts to comply with the regulations, without facing fines or penalties prior to that date. 

All businesses that ship packages and goods to and from Mexico will need to comply with the new regulations. Shipments arriving in Mexico without the required information allowing FedEx Express to issue a CFDI – Carta Porte, where applicable, may not be transported to the final destination. In the event of non-compliance, the new CFDI – Carta Porte regulations establish significant fines and penalties for both the shipper and the carrier.

You must ensure that the waybill (Carta de Porte) supplement is completed accurately with all required information before shipping. Here you can find the info Fedex needs for each domestic or international transfer.

FedEx Express LAC (Latin America Countries) has developed tools to enable shipping customers to provide the required information for the issuance of the CFDI – Carta Porte. Shipping customers are able to provide the required shipment information using several options, including an online form found at Carta Porte (fedex.com).

The National Customs Service (Servicio Nacional de Aduanas) has stated that as of February 1, 2022 the Rol Único Tributario – RUT (Unique Taxpayer ID) must be included for all shipments to Chile, regardless of the type and value of the shipment.

All shipments arriving to Chile from abroad must include the RUT of the consignee to avoid being held by Chile’s Customs authority. Shipments arriving without RUT may be rejected and will not be allowed to clear until the RUT is provided. In addition, the carrier, may be subject to fines.

Shipments must include the RUT, and the first name, last name, and/or company name, of the consignee.

Anyone sending shipments to Chile will need to comply with the new regulations. 

As of February 1, 2022, you must include the Rol Único Tributario – RUT (Unique Taxpayer ID) number on the commercial invoice for all shipments to Chile.

Canada, along with over 200 countries and customs territories, accept the World Customs Organization (WCO) Harmonized System (HS) nomenclature as the foundation for their tariff legislation and the collection of international trade statistics. The HS code is updated every 5 years to keep current with new and evolving changes in technology, trade patterns, and global issues. For HS 2022, the WCO made significant amendments that came into effect on January 1, 2022.

The 2022 Canadian Customs Tariff has been updated to reflect the 351 sets of amendments made to the WCO HS nomenclature. The amendments include changes to HS classification codes, but duty rates have not been affected.

The Canadian Border Service Agency (CBSA) has prepared a Table of Concordance and this table reflects that around 1,194 tariff items at the 8-digit level and 1,534 tariff items at the 10-digit level are impacted. This encompasses a wide range of goods. 

If your products fall under the following customs chapters, it’s a good idea to double-check their classifications:

Chapter 29: Organic chemicals

Chapter 30: Pharmaceutical products

Chapter 44: Wood, articles of wood, charcoal

Chapter 70: Glass and glassware

Chapter 73: Articles of iron or steel

Chapter 84: Nuclear reactors, boilers, machinery

Chapter 85: Electrical machinery and equipment

Chapter 87: Vehicles (non-railway, non-rolling stock)

Chapter 88: Aircraft and spacecraft

Chapter 90: Medical or surgical instruments and apparatus

Chapter 95: Toys, games and sports accessories

Chapter 97: Works of art, collectors’ pieces and antiques

All businesses that ship packages and goods to and from Canada will need to comply with the new HS classification codes. Given the wide scope of changes, there are many important ones not mentioned here so it is therefore essential that you fully review to see if your goods are impacted.

Businesses who ship goods to Canada should review their product/commodity databases to ensure their HS classification codes remain valid in accordance to the 2022 Canadian Customs Tariff. Using invalid HS classification codes could result in customs entry errors and potential clearance delays.

Customs Tariff 2022

World Customs Organization – HS 2022 Amendments

The World Custom Organisation’s (WCO) Harmonized System (HS) is used for the international classification of goods when they are being traded across borders. It is applied in more than 200 states, countries and territories worldwide, meaning 98% of the world's trade is classified using the HS nomenclature. It is revised every 5 years, and HS 2022, the seventh edition of the Harmonized System nomenclature, will come into effect from January 1, 2022.

Commodity codes are a key requirement for the completion of customs processes such as completing declarations and are used to determine what duties and other taxes may be payable when goods are traded across borders. It is essential they are correct as product misclassification could lead to customs delays or payment of higher duties and taxes.

The new HS 2022 edition has a total of 351 amendments covering a wide range of goods.

HS 2022 recognises new product streams and addresses environmental and social issues of global concern. Some examples include:

• Electrical and electronic waste (e-waste): HS 2022 includes specific provisions for its classification to assist countries in their work under the Basel Convention.
• Nicotine-based products and unmanned aerial vehicles (UAVs, also known as drones): New provisions simplify the classification of these products.
• Smartphones: Gain their own subheadings.
• Glass fibres and metal-forming machinery: Major reconfigurations have been undertaken because the current subheadings do not effectively represent technological advances in these sectors.
• Multi-purpose intermediate assemblies: there will be more products classified in their own right, such as flat panel display modules.

Goods specifically controlled under various Conventions have also been updated and many new subheadings have been created for dual-use goods.

Changes have also been made to put a greater focus on health and safety. The recognition of the dangers of delays in the deployment of tools for the rapid diagnosis of infectious diseases in outbreaks has led to changes to the provisions for such diagnostic kits to simplify classification. New provisions for placebos and clinical trial kits for medical research to enable classification without information on the ingredients in a placebo will assist in facilitating cross-border medical research. Cell cultures and cell therapy are among the product classes that have gained new and specific provisions.

Given the wide scope of the changes, there are many important changes not mentioned here so it is therefore essential that any business shipping goods across borders review the changes to see if their goods are impacted.

You should review the HS 2022 changes to determine if any of these changes impact your product classifications. Additionally, importers should perform a complete product database review to confirm their existing product classifications are valid for when HS 2022 goes into effect.

The WCO has published 2017 to 2022 correlation tables that can be used to check if the current HS code will change and, if so, where the relevant goods will be classified.

The WCO standardizes HS codes at the six-digit level. That six-digit code is the international standard for all participating countries. The first two digits indicate the HS chapter heading, the second two identify the product heading, and third two identify the specific subheading or subcategory of a given product.

Most countries accept at the six-digit level but there are exceptions and some countries require additional digits. For example, the United States uses a 10-digit code to classify products for export, known as a Schedule B number. In India, 8 digits are used, called the ITC number (Indian Tariff Code number).

It is essential to check the country you are shipping to and from to see what is required.

HS Nomenclature 2022 Edition

Amendments to the Nomenclature

WCO correlation tables

Use of the import VAT reverse charge is compulsory for businesses importing into France with effect January 1, 2022. In addition, the management and collection of VAT on imports has been transferred from French Customs to the French Tax Authority - Directorate of Public Finance (DGFiP).

The declaration and payment of import VAT will be made in the French VAT return instead of the customs declaration. This deferral to the VAT return is known as a ‘reverse charge’. This reverse charge means that the import VAT is no longer paid at the point of importation.

As of January 1, 2022, if a business will act as the importer of record for an import of goods into France, then it is mandatory for that business to be registered for French VAT and to submit a French VAT return.

VAT registration in France can be done directly by businesses established in France or by businesses located in the EU or UK. Businesses not established in the EU or UK that wish to act as the importer of record for their goods will have to appoint a French tax representative to file the VAT registration application on their behalf.

FedEx customers shipping goods from outside of the EU to business customers in France should provide the French VAT registration number for the importer of record for the customs documentation.

Please note:

• The online French VAT return will be pre-filled automatically with the amount of import VAT based on the information previously declared to French Customs on the customs declaration.
• A web portal will be set up by French Customs to allow businesses to download monthly details of all their imports into France.
• The pre-filled VAT return will be available on the 14^th day of each month via French Customs’ online tax portal.
• The deadline for filing the VAT return will become the 24^th day of each month for all businesses liable for import VAT. 

The change applies to businesses that will be importer of record for goods entering France.

The customs declaration will now have to include the importer's French VAT number so you must include this information on the commercial invoice. If a business will be an importer and does not have a French VAT number, it should contact the French tax authority to register for VAT. For businesses based outside the EU, a fiscal representative may need to be appointed.

For importers that are businesses and do not possess a French VAT number or for private individuals, the import VAT will be collected at the time of import via the import declaration, as was the case before January 1, 2022.

_{The information provided does not, and is not intended to, constitute legal and/or tax advice; instead, this information is for general informational purposes only. This information may not constitute the most up-to-date legal or other information. Readers of this information should contact their own advisor to obtain advice with respect to any particular legal and/or tax matter. All liability with respect to actions taken or not taken based on the contents of this site are hereby expressly disclaimed. The content on this posting is provided “as is”; no representations are made that the content is error-free.}

There will be changes coming into effect on January 1, 2022 with regards to imports of specified Sanitary and Phytosanitary (SPS) goods from the EU27 and European Economic Area (EEA) to GB.

Customers in the EU27 and EEA who send the following SPS goods to GB:

• Live animals;
• Germinal products;
• Products of animal origin (POAO) under safeguard measures;
• High risk animal by-products (ABP);
• High Risk Food or Feed not of animal origin (HRFNAO)
• All regulated plants and plant products.

From January 1, 2022:

From January 1, 2022, pre-notification of the import of products, animals, food, and feed system (IPAFFS) will be required. Our UK Import Clearance teams will complete the pre-notifications on behalf of GB importers.

For now, documentary checks have been postponed, and there will be no requirement for the goods to enter GB via an established point of entry as there will be no physical identity inspections. However, these checks will be introduced from July 1, 2022, together with the requirement for Export Health Certificates (EHCs). The EU exporter will have to provide a copy of the EHC to their UK importer prior to sending the goods.

Further changes in 2022:

In addition to IPAFFS pre-notification requirements, from July 1, 2022, all of the above mentioned types of goods will require a valid EHC or SPS Certificate in order to undergo documentary checks.

Beginning on July 1, 2022, all POAO and ABPs and all regulated plants and plant products will also have to enter GB via a point of entry with a specialized Border Control Post (BCP), even if the product is not subject to documentary checks, as per the following timetable:

• 1 July 2022 - All remaining regulated ABP and all meat and meat products;
• 1 September 2022 - All dairy products;
• 1 November 2022 - All remaining regulated products of animal origin, including composite products and fish products. 

If you are an EU exporter to GB, you must classify your goods correctly and provide specific goods descriptions on all commercial paperwork.

Please ensure that you provide the following information on your commercial documents or create an IPAFFS summary page:

• What type of animal product or goods you’re sending (i.e., POAO, ABP, HRFNAO etc.);
• Origin of the animal product or goods (which country it was produced, originated in);
• Commodity code;
• Commodity type;
• Species of the commodity;
• Commodity weight (kg);
• Reason for exporting consignment (i.e. internal market, transit, research, etc.);
• Consignment’s place of destination;
• Addresses and contact details for place of origin, importer and place of destination.

You should also start preparing for July 1, 2022 when you will be required to provide Export Health Certificates (EHC) for your goods before you ship them.

If you are sending marine-caught fish and some shellfish in addition you must ensure you include a validated Catch Certificate with your commercial paperwork.

If you are the GB importer and we contact you for clearance instructions, please provide all requested information in a timely manner.

If you decide to complete your IPAFFS pre-notification yourself, please ensure you inform us about your authorization number before the goods arrive in GB. In order to do so, please email us stating your air waybill (AWB) number in the subject field of the email and your authorization number in the email body. The email addresses to use are as follows:

• For FedEx shipments: stncustomsadmin@corp.ds.fedex.com
• For TNT shipments: GBTNTIPAFFS@fedex.com

Useful Resources

Import or move food and drink from the EU and Northern Ireland to Great Britain - GOV.UK (www.gov.uk)

Import or move composite products from the EU and Northern Ireland to Great Britain - GOV.UK (www.gov.uk)

Import of products, animals, food and feed system (IPAFFS) – GOV.UK (www.gov.uk)

HM Revenue Border Operating Model

Indonesia brought in a new regulation on August 1, 2021 which may impact how international shipments are cleared by the local customs authority. Failure to comply with this new regulation could result in shipment delays.

From August 1, 2021, the regulation requires shippers located outside Indonesia to:

(1) Obtain the Tax ID (NPWP) of their consignee/recipient in Indonesia for each imported shipment; and

(2) Input the Tax ID (NPWP) into the ‘Consignee’ or ‘Recipient’ section of the Air Waybill and Commercial Invoice.

Anyone importing between Europe and Indonesia.

What you need to do when shipping to Indonesia as of August 1, 2021:

• Contact your consignee in Indonesia to obtain their local Tax Identity Number / Tax ID (known locally as ‘NPWP’).
• Input the Tax ID into the ‘Consignee’ or ‘Recipient’ section of your shipment's Air Waybill and Commercial Invoice.
• If your consignee/recipient does not have a Tax ID, other forms of identification may be used instead:
  • For Indonesian citizens, input their Indonesian Citizenship Identity Number in place of Tax ID.
  • For those without Indonesian citizenship, input their Passport Number in place of Tax ID.
• If you use a shipping tool to electronically prepare shipping documents, please input the Tax ID (or its equivalent as listed above) into the text box provided in the tool:
  •  FedEx Ship Manager^TM at fedex.com (Modernized Version): [RECIPIENT TAX ID] text box located in the ‘Billing’ section. The consignee's Tax ID will be visible on the air waybill.
  • FedEx Ship Manager^TM at fedex.com (Basic Version): [RECIPIENT TAX ID] text box located in the ‘To’ section.
  • FedEx Ship Manager^TM Software: [VAT/Customs ID/EIN#] text box located in the ‘Recipient Information’ section.
  • Global Ship Manager^TM Software: [VAT/Customs ID/EIN#] text box located in the ‘Recipient Information’ section.
  • myTNT 2: [VAT Number] text box located in the ‘Receiver’ section.

The EU-Vietnam Free Trade Agreement (EVFTA) came into force on August 1, 2020. It will replace the EU’s Generalised System of Preferences (GSP) scheme for Vietnam.

Anyone importing or exporting between the EU and Vietnam, with goods of EU or Vietnam origin.

The EVFTA will:

• Eliminate the majority of customs duties immediately
• Phase out tariffs on the remainder of goods covering up to 99% of all trade by 2030
• Simplify and modernise customs and rules of origin procedures, cutting red tape and reducing costs for businesses
• Streamline technical and non-tariff barriers to trade which unnecessarily restrict business
• Establish a legal framework for trade through the EU-Vietnam Investment Protection Agreement (EVIPA), which guarantees the rights of businesses and consumers on both sides. This will come into effect at a later date.

Collectively, the agreements aim to promote sustainable development on both sides, for stronger employment, environmental, and human rights protection.

Vietnam is currently part of the EU’s GSP scheme and this will remain in place for up to two years. You can decide if you prefer to use the GSP or FTA for this period, but you should be aware that the conditions for GSP may vary from the FTA.

EU exporters must complete a statement of origin made out on the commercial invoice to qualify for the FTA. For shipments above €6,000, EU exporters will also need to register in the REX system.

Vietnam exporters must complete a statement of origin made out on the commercial invoice to qualify for the FTA. For shipments above €6,000, Vietnam exporters will also require a certificate of origin.

To find out more about the EVFTA you can read this comprehensive guide, while information on the FTA’s rules of origin requirements are available in the EU’s guidance document.