Transit guarantee

Transit guarantee

When goods leave the UK, for example for export to Germany, they will pass through a number of other EU Member States, i.e. France and potentially Belgium and The Netherlands.  If the goods are lost during the movement, the authorities in the country of transit will call on the owner to pay any import VAT, customs duty and other charges.

In order to ensure that any fees are paid, the transit must be covered by an approved guarantee.  If the owner cannot pay, the guarantee will be triggered.

A typical transit guarantee will range between 20% and 30% of the value of the goods and might include:

  • French VAT at 20% or Belgian/Dutch VAT at 21%.

  • Duty, dependant on the goods concerned, may range from 0% on telecommunications equipment, 12% on clothing and more than 100% on some agricultural goods.

The shipper can hold their own guarantee, setup with a bank etc.  This will impact on the company’s level of available borrowing or will be subject to a fee.

Alternatively, a 3rd party’s guarantee can be used for a fee.

 

SGS International Trade Services

The Custom House’s partner SGS understand the complexities of moving cargo in transit by road, rail and water, and has designed TransitNet with these complexities in mind.

TransitNet is a secure, multi-lingual, web-based platform that captures, controls and monitors transit declarations to significantly reduce transit times.

TransitNet enables the transport and logistics industry to submit an electronic customs transit declaration, together with a financial guarantee covering their liability for customs debt.

SGS obtain due diligence clearance for each prospective client from its insurers, and act as principal towards customs, establishing guarantees in favour of customs but on behalf of TransitNet clients, covering the liability for taxes and duties for all clients’ transit operations.

The guarantees are lodged where the client’s transit movement begins, and cover movements through to destination.  The client pays a fee for each transit movement.

For further information click here.