The Export Business Explained
The export business can be lucrative, but it can also be complicated, with a tangle of different laws and regulations to keep straight. You must make sure you understand the key components of the business before you get involved and begin trying to ship and sell your products overseas.
The Export Business Defined
When a person says that they are in the export business, they simply mean that they produce goods or services in the United Kingdom and sell them outside of the country. Many businesses from software and technology companies to textiles are involved in the export business. Different kinds of companies are subject to different kinds of rules and regulations governing what kinds of goods can be exported, where they can be exported to, and what kinds of taxes and licenses are required.
Export Business Information
Controls on Exports
Certain kinds of licenses may be required in order to be involved in the export business. The Export Control Organization (ECO) is responsible for issuing licenses and controlling products that have primary or secondary military uses. These include weapons, military vehicles, items for use in torture, and radioactive materials. Other controlled items include so-called “dual-use items” that may be used for civilian or military purposes. These include certain chemicals, computers, medicines, and other products. An export business that produces these products must secure the appropriate license.
There are also limits on where a company engaged in the export business can ship things. These may include countries that are unstable, engaged in human rights violations, or at war. Some countries will be off-limits to an export business because of a U.N.-sponsored embargo or because of treaty obligations. In addition, if a country is considered to be a threat to the safety or stability of the UK, exports may be controlled. The ECO has a list of these restrictions on its website and also has an email list so that export businesses can keep up-to-date on this information.
Exporting to the European Union
The creation of the European Union has simplified some of the regulations that restrict trade exports. An export business is usually in compliance with EU rules if it is in compliance with UK restrictions. For instance, sales and purchases anywhere in the EU can be reported on the same VAT form as those conducted inside the UK. In addition, technical and other standards have been harmonized, so an export business does not have to worry that its products will not meet the standards of another EU country.
Exporting Outside the EU
Countries outside the EU are known as “third countries,” and the rules that govern exporting to them are different than those inside the EU. For one thing, an export business must use the National Export System (NES) electronic processing system to make all their country export declarations. Third countries may also asses a duty or tax on goods, which an export business must take into account when negotiating a price for its goods. Weapons, agricultural products, dangerous chemicals, live animals and plants, and other exports may require special licenses, as well.
It is important to know all of the rules and regulations that govern exports before getting involved in an export business. Make sure that you consult the Export Control Organisation and the HM Customs & Revenue department to keep up-to-date on the rules that govern the export business.
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