The need to comply with EUDR-related obligations is slowly coming for all entities that import or trade with commodities such as timber, rubber, cattle, cocoa, coffee, soya and oil palm (also products derived from them)

EUDR is an EU regulation, which means that it is a directly applicable regulation. In other words, the EUDR obligations apply automatically, without the need to implement them through national law. Nevertheless, this regulation contains elements that are rather typical of directives – it contains only general assumptions and a basic list of measures and sanctions that Member States may impose on economic operators and traders. Specific measures and sanctions (including their amount) are thus decided by individual states. The first category is precautionary measures, for which the Regulation provides minimum guidance. These are immediate measures when a possible violation of relevant commodities or products is detected under the Regulation. These measures include confiscation and, where appropriate, suspension of their placing on the market or making available on the market or their export. Another category is corrective measures that an economic operator or trader must take at the request of the competent authorities. Such measures include, for example, correcting formal deficiencies, preventing the placing on the market or making available or exporting the relevant product, withdrawing the product from the market or donating it to charity, or disposing of it. If the economic operator or trader fails to take such corrective action, they shall be taken by the competent authorities. It is important to remember that remedies do not serve as a substitute for penalties – they can be imposed alongside them. Penalties must be effective, proportionate and dissuasive under the Regulation. As the EUDR provides only a minimal list of sanctions and leaves the final decision on their form to individual Member States, these sanctions may vary within the European Union. The minimum range of sanctions includes, for example, fines, confiscation of products or income earned, temporary exclusion from public procurement and public financing, temporary ban on marketing, supply or export of commodities and products, and prohibition to carry out certain activities.

In December 2023, new rules for the PEM Agreement were adopted, which aim to increase trade between the European Union and neighbouring countries in the Pan-Euro-Mediterranean (PEM) region. The rules of origin will apply from 1 January 2025 and will cause changes to all preferential trade agreements between 24 countries or countries. Parties to the PEM Agreement.

This change in rules of origin concerns: the European Union, Iceland, Liechtenstein, Norway, Switzerland, Faroe Islands, Turkey, Morocco, Algeria, Tunisia, Egypt, Israel, Jordan, Lebanon, Palestine (this designation should not be construed as recognition of a Palestinian state and is without prejudice to the individual positions of Member States on this issue), Georgia, Republic of Moldova, Ukraine, Albania, Bosnia and Herzegovina, North Macedonia, Montenegro, Serbia and Kosovo.

Trade with these countries amounted to around €700 billion in 2022, half of the EU's preferential trade.

These provisions will make it easier for products to benefit from trade preferences such as:

• simpler product-specific rules, such as the removal of cumulative requirements, thresholds for local added value, better tailored to the EU's production needs and the new twin transitions for textiles;

• Increased tolerance for non-originating materials from 10% to 15%;

• Introduction of 'full' cumulation, whereby the production operations required to establish the origin of most products can be split between several countries;

• Duty drawback (duty drawback on imported parts) for most products.

Regulation (EU) 2023/1115 of the European Parliament and of the Council, the so-called "Regulation against deforestation and soil degradation", directly or indirectly affects many companies. To meet the requirements of this legislation, it is necessary to start by performing an analysis of the product portfolio, logistics, trade flows, contractual relationships with business partners, etc. Subsequently, sophisticated IT solutions that are created specifically for EUDR can be used. It is only necessary to start working on this issue as soon as possible, as the obligation to report to authorised authorities is coming. Do not hesitate to contact us!

In 2023, Regulation (EU) 2023/1115 of the European Parliament and of the Council, the so-called "Regulation against Deforestation and Soil Degradation", came into force, replacing the Timber Regulation 995/2010 (EUTR). The regulation applies to commodities such as coffee, cocoa, beef, rubber, soy, palm oil and timber products. Economic operators will be forced to collect and provide data on the origin of products or commodities that are traded in the EU. To ensure compliance with all the requirements of the Regulation, it is possible to use advanced applications developed specifically for this purpose.

In 2021, the European Commission adopted a proposal for a carbon adjustment system for imports of selected commodities into the EU. The CBAM (Carbon Border Adjustment Mechanism) regulation applies to all entities that import iron and steel, aluminium, cement, electricity, hydrogen, fertilisers, certain precursors (active cathode materials) and, to a limited extent, downstream products (e.g. screws and bolts) from third countries to EU. From October 2023, a transitional period has begun, in which importers will have to collect information on emissions,  generated during the production of imported products and then report this data to the administrative authority, which is the national customs office. In addition, after the end of the transition period, each entity will have to register with the CBAM authority and, as an approved declarant, submit annual reports, as well as pay for the emissions contained in imported goods. This is a relatively complex issue, that is very likely to evolve over time and the related legislative developments will need to be closely monitored. 

The current system for monitoring the production and circulation of cigarettes and RYO tobacco in the EU, Track and Trace, will be extended to other tobacco products such as cigars from May 2024. By this date, it must have already been implemented. If this topic  also touches your business, do not hesitate to contact us with any question.

In the context of the current situation of mutual relations with the Russian Federation, strict rules have been introduced  for EU exports. The European Commission has published a list of companies and goods subject to specific sanctions. For exports to Russia, it is first of all necessary to monitor the possibility of the so-called dual use of the goods. For more detailed information regarding specific types of goods and demands for exports, do not hesitate to contact us.

The Treaty on reciprocal trade between EU and other Mediterranean states, EFTA States (Norway, Iceland, Switzerland, and Liechtenstein) and the Faroe Islands, the so-called PEM Convention, which aims to facilitate trade between them, inter alia, by a system of recognition of the origin of goods, was modified again in September 2021. Some new or updated rules for determining the origin of goods when using components of a traded product originating in third countries apply. If you need more information about the PEM convention, do not hesitate to contact us. 

In September 2021, a new, revised EU regulation on trade in dual-use items entered into force. These are types of goods that are intended for legal, civilian use, can be used at the same time, for example, for the production of weapons. For trade in this type of goods, special licenses are required, or other obligations are fulfilled. The new regulation concerns, inter alia, exporters of dual-use items. The provision of software or various related services may also be subject to licensing proceedings. Violation of the rules on trade in dual-use items means the risk of heavy fines and, where appropriate, criminal liability. For more detailed information about trade in this type of goods, do not hesitate to contact us.

In the context of Regulation (EU) 2019/2152 of the European Parliament and of the Council and Commission Implementing Regulation (EU) 2020/1197, changes to intrastat reporting will enter into force from 1 January 2020. The changes concern, for example,  the codes of the nature of the transaction, the indication of the customer's TAX ID in the direction of sending the goods , or the indication of the country of origin of the goods. In addition, new option will be introduced- so called simplified reporting for reporting parties with an annual sent/received  goods volume of up to CZK 20 million. The limit for the aggregate reporting of small consignments is also increased to EUR 400.

Safeguard measures for imports of steel and iron products into the EU are extended until mid-2024. However, in accordance with the legislation in place, it is possible to benefit from a partial or total suspension of duty and to benefit from the regularly opening tariff quotas. Access to the quota must be requested by the importer or his customs representative in the customs declaration. The quotas set are drawn gradually (by the FIFO method), so it is not possible to "book" the duty reduction in advance in any way. Therefore, where the suspension of duties is conditional on a terminal use regime in the EU, only entities authorized by that customs procedure may benefit from it. Quotas can be monitored on the European Commission's website, in the QUOTA database.

When goods are imported into the EU from third countries, consignments are now not subject to customs duties or VAT at low levels (up to EUR 22). With effect from 1 July 2021, these consignments will be subject to VAT. Consignments up to EUR 150 will continue to be exempt from customs duties, but will be subject to customs clearance and will have to be lodged with a customs declaration. For more information, please do not hesitate to contact us!

While it may seem that the tobacco industry is on a downward trend and more and more consumers are turning away from tobacco products, the opposite is true. In particular, due to new types of products, such as heated tobacco products like Heets for example, the entire industry is growing. However, the big problem for the tobacco industry is the illegal market. In order to eliminate the illegal trade with tobacco products, there is a very sophisticated system within the EU to monitor tobacco products along their entire route from the factory to the final consumer. Thanks to this system, it is possible to find not only the manufacturer, but also the specific production line, batch or way in which the product reached the consumer by simply scanning the code from the cigarette packaging. It is not yet an obligation to use the Track and Trace tracking system for cigars, for example. Since 2024, however, the obligation to participate in track and trace has been extended to cigars, cigarillos and other tobacco products. The implementation of this system is financially demanding and time consuming and many legislative and technical regulations need to be met. In case you need more information on this topic, do not hesitate to turn to us!

The situation of trade between the UK and the States of the European Union is still not stabilised and there are supply delays. According to a survey of 350 managers of logistics and retail companies, there are delays in deliveries of several working days or more. There are outages in the supply to final customers, which is also accompanied by price increases. Many companies also face complications in the handling of customs procedures. For the time being, imports into the United Kingdom from European Union countries is at least be subject to a transitional period until June 2021, during which it is not necessary to make a customs declaration immediately upon importation. Customs clearance may be submitted additionally.

Excise duty rates will change from January 2021. The changes in tariffs mainly affect alcohol and tobacco products. In the case of excise duty on cigarettes, both specific as well as ad valorem excise tax component shall be increased. Other obligations, such as changing the type of excise tax stamp are also related to the changes. The amendments to the Excise Tax Act also affect the operators of tax warehouses. If these changes also apply to your activities and you need to consult on the impact of the changes, do not hesitate to contact us!

A major free trade agreement was signed as part of the Association of Southeast Asian Nations (ASEAN) summit held in Hanoi, Vietnam, in mid-November 2020. A total of 15 Southeast Asian countries, along with Australia and New Zealand, signed the agreement, called the Regional Comprehensive Economic Partnership (RCEP). According to Bloomberg, this is the largest trade agreement involving a market with a population of 2.2 billion and a total GDP of almost USD 26 trillion. The agreement also affects services, investment, information technology, e-commerce and intellectual property. 

The Brexit transition period will end on 31 December 2020. Trade between the European Union and the United Kingdom shall be governed by a free trade agreement or, if the terms of this Agreement are not mutually accepted, import and export shall be governed by the terms of the World Trade Organization. From a customs point of view, it is therefore necessary to prepare yourself for the standard customs process, linked to the possible payment of customs debts, i.e. payments of customs duties and VAT. Of course, the changes will also affect excise duties. It will be necessary to apply for EORI number and declare the JSD and VDD documents on import or export. Trade will no longer be reported in the Intrastat system.

A new announcement has been released in May 2020. It is dedicated for EU based companies which export or plan on export to ESA territory. It is based on agreement between EU and ESA countries.

By 31.8.2020, all ESA countries provide preferential customs clearance procedure for products of EU origin. EU exporters must provide EUR1 document or „EU goods origin declaration“ on export invoice. This regime is valid for products of value not exceeding 6000 EUR.

Since 1.9.2020 the preferential customs clearance will be provided only for EU exporters registered in REX system. A need for „EU goods origin declaration“ on export invoice and validity for products of value not exceeding 6000 EUR remain the same.

You can contact our office to get more information.

The British parliament has approved the brexit and the United Kingdom can leave the European Union by 31.1.2020. After the brexit, the United Kingdom will not use customs system of European union anymore. However, there is a transition period until 31.12.2020. During this transition period, the trade with the United Kingdom will be processed within intrastat system.

There are new excise tax rates valid in Czech republic since the beginning of year of 2020. Previous rates have been valid for several years. Ministry of Finance of Czech republic made a decision, following an increasing average monthly incomes, to increase excise taxes on cigarettes from 27% to 30% in case of percentage part of tax and from 1,46 CZK to 1,61 CZK in case of fixed part of tax. In case of alcohol, excise tax on 0,5 lit. of 40% alcohol increased from 57 CZK to 64,50 CZK. Also excise tax on cigars, tobacco for smoking and smoke-free products increased by app. 10%.

We have opened new office in Kolín, in close proximity of Kolin customs office. We provide services like customs clearance for both import and export, intrastat reporting, customs advisory and all documentation related with customs. We are opened on working days 8 a.m. to 3 p.m. or upon agreement. If you plan on import or export at Kolin customs office, do not hesitate to get in touch with us!