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Legal Advice – An outline of international contracts

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Legal Advice – An outline of international contracts

contratto

Legal advice: why is it crucial to have well drawn-up contracts in international trade?

The early stages of a start-up or a project in a foreign market are characterised by great motivation and enthusiasm. However, at a certain point in the life of your business or project, you may end up having different views from those of your counterpart. In such cases, having a contract that clearly identifies one’s responsibilities and obligations, and which was designed to protect one’s own interests, is vital for the sustainability and the survival of your business.

First of all, what is an international contract?

The contract is the main legal instrument by which the circulation of wealth occurs and national and international trade is governed.

There is not a real definition of International Contract. However, all contracts that have foreign elements with respect to a national legal system are considered as such. Some of these elements constitute the structure of a contract. These elements are:

1. The nationality of the parties;

2. The registered office of each party;

3. The place where the contract was signed;

4. The place where the contract is to be carried out;

5. The place where the object of the contract is located;

6. The currency of payment;

7. The place of payment.

Oral or written contract?

An oral contract is binding; however, it creates evidentiary problems. Moreover, some essential clauses must be laid out in written form. Therefore, a written contract is highly recommended.

In what language should a contract be drafted?

A contract may be drafted in several languages. However, in order to avoid reaching an impasse due to different interpretations of some clauses, it is necessary to insert clauses in the contract that establish what the official language of the contract is, and which version shall prevail in case of dispute.

What law is applicable to the contract?

Contracts are legally binding between the parties. In the case of an International contractual relationship, it is necessary to establish the law which is applicable to the contract. The applicable law must be clearly stated in the contract or must be clear from the provisions of the contract or from the circumstances.

This must be done when concluding the contract; the parties, however, may agree to change the applicable law which governs the contract at any time.

In the case of an agency contract, and the relevant pay to be given to the agent in the event of termination of contract, for example, the aspect of the applicable law is extremely important. This is because, sometimes, there are significant differences between the various legal systems. Therefore, if the agent has worked for many years, and has generated considerable sales, the impact on the principal, who is obliged to pay a considerable sum of money, may be catastrophic.

If the applicable law has not been identified, or it cannot be deduced from the circumstances, for the countries which are party to the Rome 1 Regulation, Art. 4 establishes that: “the contract shall be governed by the law of the country with which it is most closely related”.

If that is not the case, i.e. for the countries which are not party to the Regulation, regulations concerning private international law have the goal of identifying the law which is applicable to those legal situations which have an international nature.

What is the competent court in the event of a dispute arising between the parties in an international contract?

Another significant problem concerning international contracts is the competent jurisdiction.

Having the competent court in your country is not always the best solution. Sometimes, due to the absence of a bilateral agreement that enforces the rulings of a foreign country at a later stage, or due to high costs, or to the sluggishness of a particular judicial system, it is better to choose the competent judge in the country of the other party or in a third country.

It all depends on the interests and the assets you wish to protect, the expected scenarios in relation to your business, and the evolution of the regulations both in the European Community and worldwide.

As to Jurisdiction, for the member countries, EC Regulation 44/2001, which replaced the 1968 Brussels Convention, governs the jurisdictional competence, the recognition, and the enforcement of judgements in civil and commercial matters.

FOR FURTHER INFORMATION ON LEGAL TOPICS/INTERNATIONAL CONTRACTS, OR FOR A FREE CONSULTATION, PLEASE POST A QUESTION ON “THE EXPERT ANSWERS” SECTION, OR CONTACT US VIA E-MAIL BY CLICKING ON THE LINK BELOW

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Legal Advisory – Ordinary Courts or Arbitration – ADR Alternative Dispute Resolution

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Legal Advisory – Ordinary Courts or Arbitration – ADR Alternative Dispute Resolution

ADR

What is Arbitration

Arbitration may be defined as a “private trial”

- It is a “trial” since it ends with a ruling called the arbitral award which is final, as the possibilities for an appeal are limited and vary from country to country; and they are enforceable. Please bear in mind, however, that in Italy, for example, arbitral awards become enforceable following approval by an Italian Court.

- It is “private” since the arbitrators are not judges but they operate as such, on the basis of powers which have been given to them contractually by the parties.


What to choose in the case of a dispute? Arbitration or ordinary courts? strong>

In the case of disputes arising out of the contract, parties may choose between ordinary court and arbitration.

The parties of an international contract may refer to one or more ARBITRATORS to decide upon one or more disputes, by inserting an arbitration clause in the contract. Disputes must concern disposable rights.

This choice may be made when signing the contract or at a later stage, after the dispute has already arisen.

The principle that the competent judge is the one appointed by the parties is internationally recognised. The choice depends upon the parties, and, if they have not written anything on the matter on the contract, all disputes arising out of the contract will be resolved by an ordinary court. However, the validity of the choice and the rules for its implementation also depend upon the international private law of the state where the appointed judge is based.

What are the advantages of arbitration?

Neutrality: in international contracts, the parties are usually from different legal cultures (e.g. Italy – China); therefore, the choice of a national court would bring an advantage for one or the other party;

Confidentiality: arbitration is confidential not only with respect to the documents, but also with regards to the existence of the case;

Duration: on average, arbitration is usually faster than litigation in the courts, also because the possibilities of an appeal are limited and vary from State to State;

Specialisation: provided that they are appointed by the parties, arbitrators are usually professionals with an expertise in international commercial law or international corporate law.

What are the disadvantages?

– Costs: arbitration may be very expensive. Costs vary depending on whether the parties opt for ad hoc or institutional arbitration; in the latter case, the costs depend upon the institution chosen. Please bear in mind, however, that the courts’ timescales entail indirect costs that may be higher.

– Interim measures of protection: In accordance with the Rules set out by the Chamber of Arbitration of Milan, arbitrators do not have the power to issue interim measures of protection.

– Enforcement: arbitrators do not have enforcement powers, therefore, on the basis of the arbitral award, the parties will have to refer to the competent judicial authority of the place where they want to ask for the enforcement of the arbitral award (should the losing party not comply autonomously).

In how many countries is the arbitration award recognised?

The New York Convention of 10 June 1958 on the recognition and enforcement of foreign arbitral awards and of the various types of arbitration has been ratified by 143 countries so far.

Example of an arbitration clause, the Chamber of Arbitration of Milan:

Any dispute arising out of, or relating to this contract shall be resolved under the Rules of the Chamber of Arbitration of Milan, by a sole arbitrator/three arbitrators, in compliance with the aforementioned Rules. The arbitration shall be held in……. The language of the arbitration shall be:

What is Alternative Dispute Resolution (ADR)?

Lengthy timescales and the high costs of litigation in courts and of international arbitration have led to the spread of Alternative Dispute Resolution methods in international trade. ADR has its origin in the British and North-American practices.

Main forms of ADR

- Conciliation: the parties appoint an impartial and independent third party who has the role of assisting the parties and, if necessary, once he has heard the positions of both parties, both together and separately, he may express his opinion and propose a solution. The suggested solution is not binding and must be accepted and signed by both parties.

- Mediation: the parties ask a third party, called the Mediator, to assist them in the resolution of the dispute or in avoiding future controversies. The Mediator is independent and impartial. The aim of the mediation is to facilitate the exchange of views between the parties and encourage them to find solutions which are acceptable for both of them.

NB: the mediator does not express his opinion, nor does he propose solutions.

Positive aspects of ADR

Unlike arbitration, the aim of ADR is not to “say that one of the parties is right”, but to “weigh up” the arguments of both parties and then, help them to find a compromise which represents a fair balance between the interests of the parties.

ADR leads to a reasonable and out-of-court resolution and avoids any reputational risk that may result from losing a lawsuit or an arbitration award.

Business reasons prevail on the solutions offered by the law in the specific case; the costs are insignificant if compared to those of arbitration and litigation in court. Finally, ADR is carried out privately and is strictly confidential.

Example of an ADR clause

If any dispute arises out of, or relates to this contract, the parties agree to try to settle the dispute in an amicable manner by mediation to be carried out under the ICC ADR Rules. If the dispute is not settled within 45 days or a further term agreed in writing by the parties, the dispute shall be resolved by arbitration and the arbitration award shall be final and binding on the parties.

FOR FURTHER INFORMATION ON DISPUTES RESOLVED IN ORDINARY COURTS/BY ARBITRATION/ADR, OR FOR A FREE CONSULTATION, PLEASE POST A QUESTION ON “THE EXPERT ANSWERS” SECTION, OR CONTACT US VIA E-MAIL BY CLICKING ON THE LINK BELOW

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Customs Advice – Incoterms 2010

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Customs Advice – Incoterms 2010

supply chain - incoterm 2010

What are the International Commercial Terms (INCOTERMS)?

INCOTERMS are a set of rules developed by the International Chamber of Commerce to establish the responsibilities, the costs, and the risks related to the delivery of goods in international sale contracts. In addition to requiring that the shipment be organised differently, Incoterms define how the cost of carriage and the associated risks should be apportioned.

List of INCOTERMS divided into 2 groups:

First group of Incoterms:

The 7 Incoterms listed below may be used with any mode of transport:

- EXW – Ex Works
- FCA – Free Carrier
- CPT – Carriage Paid To
- CIP – Carriage and Insurance Paid To
- DAT – Delivered At Terminal
- DAP – Delivered At Place
- DDP – Delivered Duty Paid

- EXW – Ex Works
The seller delivers when it places the goods at the disposal of the buyer at the seller’s premises or at any other agreed place (factory, works, or warehouse).

- FCA – Free Carrier
The seller delivers when it places the goods at the disposal of the carrier or of any other person designated by the buyer at the seller’s premises or at any other agreed place.

- CPT – Carriage Paid To
The seller delivers when it places the goods at the disposal of the buyer at an agreed place. The seller is responsible for the transportation costs to the agreed place of destination.

- CIP – Carriage and Insurance Paid to
The seller delivers the goods to the carrier at an agreed place. The seller is responsible for the transportation costs associated with delivering the goods and must also provide insurance cover against loss or damage to the goods during carriage.

- DAT – Delivered At Terminal
The seller delivers the goods when it places at the disposal of the buyer at an agreed terminal at the port or place agreed. This incoterm replaces the old DDU (Delivered Duty Unpaid) and clarifies an ambiguous aspect of the former incoterm, and states that the costs of warehousing at the destination and the costs associated with customs operations to destination are to be paid by the buyer.

DAP – Delivered At Place
The seller delivers the goods when it places them at the disposal of the buyer and ready for unloading at the place of destination. DAP also replaces DDU.

- DDP – Delivered Duty Paid
The seller delivers when it places the goods at the disposal of the buyer ready for unloading in the agreed place of destination. The seller bears all costs associated with the transportation, including customs duties and import taxes. This incoterm places the maximum obligation on the seller.

Second group of Incoterms:

This group includes 4 Incoterms rules which are applied when the place of delivery and the place to which the goods will be carried are both ports. For this reason, these rules may be used only if a part of the carriage is by sea:

- FAS – Free Alongside Ship
- FOB – Free On Board
- CFR – Cost and Freight
- CIF – Cost Insurance and Freight

FAS – Free Alongside Ship
The carrier delivers the goods, leaving them alongside the vessel (e.g. on a quay) nominated by the buyer at the named port of shipment. If the goods are containerised, FAS is not recommended.

FOB – Free On Board
The seller delivers the goods placing them on board the vessel nominated by the buyer at the agreed port of shipment.

CFR – Cost and Freight
The seller delivers the goods on board the vessel or procures the goods which have been delivered on board at the agreed and specified port of shipment.

CIF – Cost Insurance and Freight
The seller delivers the goods on board the vessel or procures the goods which have been delivered on board to the specified port of shipment. The seller must also provide insurance cover against the risk of loss of or damage to the goods during the carriage.

In order to avoid misunderstandings, unexpected costs, and delays in the transportation, it is recommended that the parties specify the exact point to which the Incoterm refers. E.g. EXW Milan – FOB Hong Kong port – CPT Hong Kong airport.

In international carriage, insurance, is automatically activated and in case of loss, damage or theft, it gives the right to minimum compensation. This type of insurance is called carrier’s insurance. However, such compensation, is not calculated on the basis of the true value of the transported goods, but is calculated based upon the weight and the chosen mode of transport (on average this compensation is equal to €1 per Kg). For better guarantees, it is necessary to provide an additional insurance policy with higher limits of indemnity and greater coverage.

FOR FURTHER INFORMATION ON INCOTERMS, OR FOR A FREE CONSULTATION, PLEASE POST A QUESTION ON “THE EXPERT ANSWERS” SECTION, OR CONTACT US VIA E-MAIL BY CLICKING ON THE LINK BELOW
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Customs Advice – An outline of “the origin of goods”

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Customs Advice – An outline of “the origin of goods”

origine merci

CUSTOMS, THE EU LEGAL FRAMEWORK

The EU is a customs union; therefore, customs law is a responsibility of the Community. Community customs law is, in turn, based upon the law of the World Trade Organization (WTO). Economic operators and institutions must follow the interpretation guidelines of the EU Commission, DG Taxation and Customs Union, the rulings of the Court of Justice of the European Union. The European Community is based upon a customs union that covers the trade of all goods and that establishes:

- the prohibition of customs duties on imports and exports and charges of equivalent effect between Member States (the so-called internal dimension);
- the adoption of a common customs tariff for the relations between Members States and Third Countries (the so-called external dimension);
– Common Customs Tariff duties shall be fixed by the Council acting by a qualified majority on a proposal from the Commission (art. 28 Treaty EC).

THE EU TREATY

- EEC Regulation 2658/87 on the tariff nomenclature and on the Common Customs Tariff
- Updates and amendments of the Combined Nomenclature (CN)
- Explanatory Notes to the CN
- Tariff classification regulations
- The interpretations of the Tariff and Statistical Nomenclature Section of the Customs Code Committee
- The Binding Tariff Information (BTI)
- For the electronic products the Information Technology Agreement of the WTO

THE HARMONISED SYSTEM

The Harmonised System is a convention whose purpose is to facilitate international trade by establishing a single “language” that identifies the products via a code and a description. This convention has been enforced by 200 Countries.

TARIC

The existence of preferential duties, applied by virtue of commercial agreements, of agreements in favour of the Developing Countries, and of commercial policy measures, such as anti-dumping duties, results in a considerable variability of the duties that may be applied to imported goods, depending on the Country of origin of the imported goods. For this reason, the Commission has set up the Integrated Tariff of the European Union, named TARIC, that indicates all duties that may be applied to a product.

ORIGIN OF THE GOODS

The concept of the origin of the goods is quite important, if you want to understand and manage the customs aspects correctly.
Below are two kinds of origin, which, despite having a small difference in their names, are substantially different from one another.

non-preferential origin: it protects the consumer by providing information about the actual place of production of the product or the place where the product underwent the last substantial processing or working (art. 24 EC Reg. 2913/92), regardless of the possible percentages of foreign goods that were used during the production. Please note that the affixing of the “Made in” label in the invoice, complies with the conditions set out in the aforementioned art. 24, without providing any information on the preferential origin.

Preferential origin : it enables the reduction or elimination of duties in the trade of goods among the countries who have signed the relevant arrangements that grant a “preferential treatment” when trading specific products which are recognised as “originating” products.

Goods are of preferential origin when they are wholly obtained in the territory of the EU or when:

- Sufficient working has been carried out in the EU or in the territory of the partner/beneficiary country;
- They comply with the list rules which are based upon three fundamental criteria;
- Substantial working procedures outnumber the insufficient working procedures (pay attention to the concept of simple assembly);
- There is a tolerance threshold (the so-called de minimis) that allows to use a percentage of non-originating materials that would not be allowed according to the list rules;
- The cumulation of origin to optimise the supply chain has been applied.

Operations which are always insufficient to obtain the preferential origin:

- Preserving operations to ensure that the products remain in good condition during transport and storage;
- Breaking-up and assembly of packages;
- Washing, cleaning; removal of dust, oxide, oil, paint or other coverings;
- Simple painting and polishing operations;
- Sharpening, simple grinding or simple cutting;
- Sifting, screening, sorting, classifying, grading, matching; (including the making-up of sets of articles);
- Simple packaging operations;
- Affixing or printing marks, labels, logos and other like distinguishing signs on products or their packaging;
- Simple mixing of products, whether or not of different kinds;
– Simple assembly of parts of articles to constitute a complete article or disassembly of products into parts.
Countries with which the EU has stipulated arrangements on preferential origin

Albania, Algeria, Bosnia and Herzegovina, Chile, South Korea, Colombia, Croatia, Egypt, Jordan, Morocco, Iceland, Faroe Islands, Israel, Lebanon, Macedonia, Mexico, Montenegro, Norway, Palestine (West Bank and Gaza Strip), Peru, Serbia, Switzerland, Tunisia, Turkey. The arrangements stipulated by the EU may be looked at the following webpage: LINK

IMPORTING FROM DEVELOPING COUNTRIES

The EU grants generalised tariff preferences to developing countries. As it is a unilateral concession, the EU decides:

- What beneficiary countries to include;
- Which products and in what measure;
- The rules of origin to determine the actual benefits;
- How to exclude those products and countries that have become too competitive.
This system consists of three regimes:

- General i.e. reduced duties compared to the duty of the most-favoured nation;
- Duty exemption on many product categories for the countries who are fighting for the achievement of good governance, and for the countries who have ratified the ILO conventions on labour rights;
- “Duty free, quota free” regime for the Least Developed Countries (LDCs) This regime does not include arms and has no time limits;
- NB: Since 1 January 2014, the Generalised Scheme of Preferences (GSP) still has 3 regimes, but with substantial changes.

paesi spg

PROCEDURE TO OBTAIN THE “APPROVED EXPORTER” STATUS

After examining the application, the customs office will arrange an inspection at the registered office of the applicant in order to verify:

- the frequency of the exportations (this requisite is not assessed for exportations to South Korea);
- that the exporter is able to provide sufficient guarantees for the verification the originating status of the products; *
- that the exporter knows the rules of origin and is in a position to offer, at any time, all documents proving origin (suppliers’ declarations, processing documents etc.);
- that the accounts, i.e. the stock records for producers and the management of trade flows for traders, allow the traceability of the operations.

* art. 90 and 117 par.1 of EC Regulation 2454/93

PRESERVATION OF PROOF OF ORIGIN AND SANCTIONS

Suppliers filling out a declaration must retain, for at least three years (five years for the exportations towards South Korea), all documentary evidence certifying the correctness of the issued declaration. The customs authority may arrange controls concerning the origin either when fulfilling importation and/or exportation formalities, or at a later stage (for a period of maximum three years). The customs authority may arrange random controls on the documents giving evidence of the origin of the goods (controls on a sample basis).

FALSE DECLARATION AND SANCTIONS

In Italy, when importing from non-EU countries, the presentation at the customs of a false Eur 1 or Form A certificate of origin results in the automatic cancellation of duty benefits and the consequent application of “full” import duties, as well as the application of the administrative sanctions provided for by article 303 of the Italian Consolidated Law on Customs, which set outs sanctions equal to 1 to 10 times the value of the evaded duties.
When exporting, the presentation of false Eur 1 certificates, if their falsity has been established subsequent to their lodgement with customs, results in the notification to the Public Prosecutor of the Italian Republic on charges of false declaration of origin. (art. 517 of Italian Criminal Code).

LITIGATION IN CUSTOMS MATTERS

By the term “litigation”, we usually mean any administrative or judicial activity which has the goal of resolving the disputes arisen among two or more parties who are in conflict with each other. Therefore, by “litigation in customs matters” we mean any administrative or judicial activity which has the goal of resolving the disputes arisen among the operators of the industry and the customs authorities in case of notification of breaches of EU and national customs law. This procedure consists of two steps; an administrative step and a (possible) judicial step.

FOR FURTHER INFORMATION ON THE ORIGIN OF GOODS, OR FOR A FREE CONSULTATION, PLEASE POST A QUESTION ON “THE EXPERT ANSWERS” SECTION, OR CONTACT US VIA E-MAIL BY CLICKING ON THE LINK BELOW
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Import – Export Manual – Customs Glossary

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Import – Export Manual – Customs Glossary

Manual ABC of Import Export

Customs Glossary, Manual with Customs terminology

AEO (Authorised Economic Operator) : these operators ask the competent customs authority to assess their degree of reliability in the sector of the logistics chain in which they operate. Following to an audit, they may be granted the AEO status. AEO Certificate and AEO status bring advantages in customs procedures. Legal references: EC Regulation 648/2005 and EC Regulation 1875/2006.

Air waybill: A document of transport which is made out in all its parts by the airline (carrier) in accordance with the instructions of the shipper.

ATA Carnet (Admission Temporaire – Temporary Admission) : this document facilitates the movement of goods through the simplification of customs formalities and the reduction of costs for the operators. The procedure is implemented by replacing standard customs documentation with the ATA Carnet. The Initials “ATA” are an acronym of the French and English words “Admission Temporaire/Temporary Admission”.

ATR: ATR is a certificate used in the trade between the European Union and Turkey which is issued by customs authorities. It certifies the so-called free movement of goods. It must not be confused with the certificate of preferential origin.

Basic products: products to be exported before being processed to become processed products or goods; goods to be exported which have been processed are also classified as basic products.

Bill of lading (B/L) : document of transport by sea which executes the contract of carriage by sea. It is issued by the carrier to the shipper when boarding the ship.

CAD (Centro Assistenza Doganale) : in Italy, CADs are centres offering assistance to businesses as concerns customs procedures. In other countries (both EU and non-EU), customs authorities may have similar centres either they be traditional offices or online websites.

Carriage (contract of) : contract through which a party, named carrier, undertakes to carry some goods from an appointed place to another, for consideration, within an agreed period of time. The carrier performs the carriage on behalf of a person (the sender) and undertakes to deliver the goods to a third person (the recipient).

Caution money: form of guarantee to be given to the relevant customs office for customs operations under duty-suspensive procedures and/or procedures with economic impact. The amount of caution money must be equal to the value of the duties that would be levied on the goods for permanent operations.

Certificate of analysis: certificate issued by one of the chemical laboratories of the customs, following to the taking of a sample in the measure of six times on the goods to be exported or imported. The taking of a sample is carried out by the competent customs.

CIM (Convention Internationale Marchandise) : convention of international public law governing rail transport among various states. The states who have signed the convention have undertaken to enforce the clauses of the convention in their territory via a specific act of ratification.

CIM Consignment note : document for rail transport to be filled out in case of shipping by rail.

CMR Consignment note: standard document that governs the contract of carriage of goods by road signed in compliance with the “Convention relative au contrat de trasport international de marchandises par route” (Convention on the Contract for the International Carriage of Goods by Road).

CMR (consignment note): international consignment note concerning the carriage of goods by road; CMR stands for “Convention relative au contrat de transport international de Marchandises par Route”

Combined Nomenclature (CN): 8-digit nomenclature of goods that includes about 9,500 entries with the relevant rates of duty. CN is the starting point for the determination of the 12-digit TARIC.

Combined transport: Transport carried out via different kinds of carriers.

Community Customs Code (CC) EEC Regulation 2913/92, new CC EC Regulation 450/08: it is the Regulation of the Community which includes all customs regulations, which have been harmonised and coordinated, with the only exception of the penalty system which is not included.

Community Origin: it is used to define when a product may be considered of Community origin i.e. if it has been wholly obtained within the EU or if the last substantial transformation was carried out within the Community in compliance with art. 23 and 24 or the EEC Regulation 2913/92

Customs areas: any premises where customs services are offered, or any premises where customs exercise supervision and surveillance. It also refers to industrial facilities, carriers, warehouses where customs officers are fulfilling customs operations.

Customs agent: physical person who is registered in the relevant register and who has been given the power to represent third parties before the customs authority.

Customs clearance: process through which foreign goods that have been permanently imported in a country are considered as national goods for the customs law of the country.

Customs form: paper or electronic document containing the customs declaration i.e. the declaration through which the subject (or third parties on their behalf) moving goods from and/or to non-EU countries informs the customs authorities about what type of operation they are carrying out (temporary or permanent importation, temporary or permanent exportation, storage in customs warehouse, release for free circulation, etc.) and undertakes to pay the relevant customs duties. Such declaration is made out on the SAD form (Single Administrative Document) as provided for in annexes 34 et seq. of the EC Regulation 2454/93 (Provisions implementing the Community Customs Code).

Customs circuit: Pursuant to the Italian law, the customs network (circuito doganale) includes all premises and areas which are used by the customs for the fulfilment of customs operations.

Customs procedure: term that indicates under what type of customs declaration or customs form the goods must be placed. The most common types are: Exportation, Transit, Customs warehouse, Release for free circulation, Inward processing, Outward processing, Processing under customs control, Temporary admission.

Customs status of the goods: term used to indicate whether the goods are Community goods or not.

Customs territory of the Community: it is the territory in which the Community Customs code is in force. It does not correspond to the sum of the territories of the Communities in which Member States exercise their sovereignty, since some areas which belong to some Member States are excluded. On the other hand, however, the Customs territory includes some territories which do not belong to the Member States of the EU.

Customs warehouse: any premises which have been authorised by and under the supervision of the customs authority where goods may be stored under the terms set out by the regulations in force.

Economic Operator Registration and Identification scheme (EORI) : EORI scheme has the purpose of assigning a unique customs identification number (known as EORI number) to the economic operators who are recognised by all Community customs authorities. In Italy, EORI number corresponds to the ISO code of Italy (IT) followed by the VAT registration number or the fiscal code of the operator.

EDI (Electronic Data Interchange) : IT procedure that enables to replace the paper version of the SAD. It consists in the electronic submission of data in the form of messages whose content is identical to that of the original paper version.

EFTA (European Free Trade Association) : Intergovernmental association and free-trade area within the EU which includes Iceland, Liechtenstein, Norway and Switzerland.

Endorsement of certified exit from the Community: Endorsement issued by the appropriate customs offices which certifies the exit of the goods from the European Community by land. Nowadays it corresponds to the “exit results” message, which, with regard to the Italian customs authority, may be freely checked out at the website (Italian version only) http://www.agenziadogane.it (Please select: L’operatore economico/e-customs AIDA/AES – Automated Export System).

EUR.1 : Certificate issued by the customs authorities of the EU and by authorities of non-EU countries with which the European Union has signed trade and customs agreements. This certificate is used as evidence of preferential origin of the goods and therefore enables to obtain preferential tariff treatment.

European Economic Area (EEA) : European Economic Area that includes the Member States of the European Union along with Norway, Iceland and Liechtenstein.

Export Accompanying Document (EAD) : this form is issued by the customs office of export and it accompanies the goods to the customs office of exit of the Community. This form must be lodged with this customs office in order to verify the operation and to enter all relevant data on the AIDA system so to “close” the movement. AIDA is the IT system of the Italian Customs Agency. This procedure is also necessary to obtain the so-called “exit results” message for VAT purposes.

Exportation: the fulfilment of all customs formalities of exportation, after which the goods exit the customs territory of the Community.

Export license (AGREX) : In Italy, export licences are issued by the Ministry of Economic Development, and such licences authorise the exportation of agricultural products towards third countries within their period of validity. Export licenses with advance fixing of the refund establish the rate of the refund to be applied in case of export refund.

Free zones/Free Warehouse (CC EC Regulation 450/08): physical areas of the customs territory of the Community (indoor and/or outdoor areas, warehouses, etc.) where non-Community goods, due to the application of duties and of commercial policy measures on imports, are considered as goods which are not physically located within the customs territory of the Community, provided that they are not released for free circulation or subject to other customs procedures, nor consumed or used in conditions, other than those provided for by the legislation in force.

Harmonised System for customs tariffs (HS) : Acronym that refers to a convention, which has been signed by many countries, concerning the harmonisation of customs tariffs.

Importation: Fulfilment of all customs formalities of importation, after that the goods have entered the customs territory of the Community.

Import duties: customs duties, as well as other equivalent taxes and other import taxes provided for under CAP (Common Agricultural Policy) or under specific procedures concerning the trade of some goods obtained by the working and processing of agricultural products.

Intermodal transport: Transport system that involves two or more different modes of transport without breaking of bulk when moving from a mean of transport to another.

Integrated Tariff of the European Union (TARIC) : system of classification of goods through which the goods are identified by a 10-digit number to which corresponds a rate of duty. TARIC is mandatory and is used by all Member States of the European Union.

Inward processing: customs procedure that allows the temporary importation of goods or semi-manufactured goods to be processed and re-exported later as finished products.

MRN (Movement Reference Number) : Number that uniquely identifies the customs operations of exportation and exportation with confirmation of exit. It is essential that the operator is given the MRN so that they can verify that the goods have successfully exited the customs territory of the Community and therefore are non-taxable for VAT.

Multimodal transport : Usage of different modes of transport to carry goods from the place of departure to the place of arrival.

New Computerised Transit System (NCTS) : computerised system through which all movements of goods may be processed electronically and therefore they are not processed through the lodgement of the declarations with the appropriate customs. Once fully operational, this system will foster the simplification and the unification of transit procedures among the countries of the European Union, EFTA countries, and the Visegrad group (Poland, Slovakia, Czech Republic, Hungary), with an improvement in the movement of goods, more effective anti-fraud prevention, a strong rationalisation of services and a considerable reduction of costs.

Outward processing: custom procedure that allows the temporary exportation of goods to be processed abroad. Such goods must be then re-imported as finished products.

Pallets: loading and unloading platforms whose function is to facilitate the handling of goods for the various modes of transports and, when possible, to eliminate the use of external packaging.

Permanent exportation : Permanent shipment of goods outside the customs territory of the Community.

Permanent importation: procedure through which the goods enter permanently the Member State of the European Union, subject to the payment of customs duties and the fulfilment of all required formalities.

Processed products : products obtained from the processing of basic products for which export refunds are applied.

Processing under customs control: procedure that enables to use, within the customs territory of the Community, non-Community goods with the purpose of processing them in a way that modifies their kind or status, without them being subject to import duties or to commercial policy measures. It is possible to release the processed goods for free circulation at a later stage, after the payment of import duties.

Reintroduction under relief of customs duty procedure: customs procedure through which the goods belonging to the EU customs territory and which have been permanently exported, may be reintroduced within the EU territory free of import duties (duty relief), provided that the goods are goods of the Community, that their origin has been proven, and that no processing has occurred. Such procedure must take place within three years from the date of permanent exportation.

Release for free circulation: customs procedure that, through the payment of customs duty and the complete fulfilment of commercial policy measures and local fiscal measures, enables the free circulation of foreign goods within the EU territory. The goods are then only subject to fiscal obligations.

Repackaging : A form of handling of the goods; more specifically, it is part of the so-called minimal operations which do not change the origin of the goods. Such operations are allowed provided that you submit an authorisation request for goods which are still under customs procedure. Repackaging may be carried out in warehouses, private or public customs areas, warehouses where the goods are in temporary storage or in VAT/excise duties tax warehouses.

Simplified assessment procedure: Particular procedure that enables some businesses to be exempt from the lodging of the goods with the customs. Physical inspections are replaced by indirect administrative inspections which are based upon the records and the general accounting of the businesses which are required to make accounts available to customs authorities. Such procedure is applicable to those businesses (either commercial, industrial, agricultural, private or state-owned) whose activities fall under the art. 2195 of the Italian Civil Code.

Single Administrative Document(SAD): single form which, pursuant to the Community legislation is used in all cases where you are referring to an import declaration, an export declaration or to the placing of goods under any other customs procedures, including the Union transit procedure.

T 1 : symbol that refers to a shipment carried out under the external Community transit procedure. It refers to the movement goods which are non-Community goods and have not been released for free circulation in the Community. They are goods of third countries which either have not been customs cleared in one of the Member States or have to transit across the territory of the European Community for the purpose of being exported in third countries.

T 2 : symbol that indicates a shipment carried out under the internal Community transit procedure and it refers to the movement of goods which are in free circulation in the countries of the European Community, should they cross a third country.

Temporary exportation: customs operation that enables the exporter to ship goods abroad without a sale, to participate in tradeshows and sport events, to undergo repairs, for test purposes, for attempted sale or for other reasons. It is necessary to apply for authorisation to the territorially competent customs office depending on the residence of the applicant. The applicant must also provide all documentation attesting the reason for the application, and provide information about what operations will be carried out abroad and for what period of time. An easier and faster alternative is to apply for ATA Carnet, provided that the country where the goods are sent has adhered to the convention and that the operation the applicant wishes to carry out is included.

Temporary importation : customs operation that enables the temporary introduction of goods within the territory of the Community for participating in tradeshows, sport events, for repairs, for test purposes, etc. The applicant must apply in advance for the authorisation to the territorially competent customs office, depending on the residence of the applicant. The applicant must provide the documentation that justifies the reason for the application and must also inform the office about the operation they intend to carry out and the time needed for such operations. ATA Carnet may be used in this case as well.

TIR: Acronym of “Transports Internationaux Routiers”.

TIR Carnet : Special guarantee document to which carriage by road is bound at international level. It enables a motor vehicle to arrive to the place of destination in a third country, without customs endorsements for the Member States it crossed.

Transport document: document constituting evidence of carriage of the goods from the place of loading to the final destination. There are different versions of the document depending on the type of carrier.

Customs Advisory – Free Download

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CUSTOMS FREE DOWNLOAD – clicking on the file of interest

1. REGULATION EU No 952 – 2013;

2. REGULATION EC No 450-2008;

3. REGULATION EU No 1294-2013;

4. ATA carnet for temporary admission of goods;

5. Inventory form for ATA Carnet for temporary Export;

6. Coordinating offices for ata carnet;

7. Countries that accept the ATA carnet;

8. GSP beneficiary countries;

9. Binding Tariff Information BTI

SACE Export Credit Agency

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SACE riepilogo servizi per Blog

WHAT IS SACE ?

SACE is an A- rated group (Fitch), it can count on 30 years of experience, 25.000 client firms, 70 billions of Euros of insured operations in as many as 189 countries to support each type of enterprises in the business development, both in Italy and abroad.
SACE group can offer a wide range of finance and insurance products:
- export credit and credit insurance;
- investment protection;
- financial guarantees, securities and factoring.

COMPANIES OF SACE GROUP:

SACE le società del gruppo

SACE

SACE

A unique partner for Italians firms accredited as global player, able to support the enterprises at every stage of growth projects throughout the world.
The offer of SACE as export credit agency, is enriched by the securities to operate abroad and by the guarantees to the supply of funding for the International development and the realization of strategic projects for the entire Italian economy.
Great experience in the assessment, assumption and management of risks connected to the operations on foreign markets, an office network throughout the national territory and in different other countries with high development potential.
SACE is part of “Cassa Depositi e Prestiti” Group and owns 100% of SACE BT e SACE Fct shares.

PRODUCTS AND SERVICES

SACE is the ideal partner for Italian businesses interested in foreign markets. It can offer a wide range of services which may enable to :
- transform into liquidity the credit towards private enterprises, public administrations and foreign buyers;
- participate in tenders and contracts with all the necessary guarantees;
- ensure the credit through competitive terms products, protecting Italian enterprises against the risk of non-payment.
LINK TO PRODUCTS AND SERVICES

SACE FCT

SACE FCT

Factoring company able to answer to the liquidity needs and to the management of Italian firms cash flow. ACE Fct is an active member of Assifact, Italian Association for the Factoring, and it is registered in the general list of Financial intermediaries (ex art. 107). It offers a diversified range of services for the credit disinvestment, for the Public Administration suppliers, for the large industrial groups and for the export companies.

SACE BT

SACE BT

Specialized in the insurance of short-term trade receivables, in the framework of securities and of protection against construction risks. It has its own offices and an agents network all over Italy. SACE BT is entirely controlled by SACE, and it is the sole shareholder of SACE SRV, whose specialisation refers to services of business information and debt collection.

SACE SRV

SACE SRV

It is specialized in services of business information and debt collection, dealing with information assets of the groups, producing credit opinion for SACE customers and for third parties. It has a network of legal correspondents both in Italy and abroad. It works for SACE and on behalf of foreign export credit agencies against Italian debtors, as it can deal with judicial and non-judicial activities achieving to negotiate restructuring agreements in the context of financial corporate and bank exposures, repossession and remarketing of abroad guaranteed supplies. SACE SRV is a member of ANCIC, National Association of Business Information enterprises and of Credit management.

TYPES OF RISKS

SACE Risk Management per Blog

- Sovereign risk: concerns the ability and the will of a debtor government of honour the signed payment commitments. It is important to consider the effective availability of resources and the reputation as payer of the government, which could have the money and decide not to pay.

- Political risk: (systematic risk), which can derive from wars, changes in the Country Institutions, from Governments unilateral decisions, such as expropriations or nationalisations of private activities. Set of circumstances which translate into a non-repayment of the incurred debt, for reasons beyond the counterpart situation but related to the intervention of a sovereign state.

- Economic risk: related to coherence of the economic policy objectives, to the country development and the growth rates, to the degree of openness of the economy, to the tendency of economic exchanges between regions in different countries, etc.

- Transfer risk: connected to restrictions in capitals movement and in repatriation of dividends / profits resulted from economic activities. It can be related to the Sovereign risk in so far as a State could have monetary problems and for this reason the limitation of payment or provisions to foreign countries.

- Foreign Exchange risk: linked to currency fluctuations, both in transaction from a monetary system to another and in moving from a fixed exchange to a variable one or vice versa.

- Position risk: connected to the globalization and the contamination which spreads because of the proximity to a country, or in the case of common political or economic characteristics.

All of this is quite distinct from the Counterparty/ commercial risk which translates to a non-repayment of the incurred debt, because of the changed conditions in the counterpart economic financial situation. The nature of the latter is connected to the Enterprise therefore more specific.