Overseas Trade: what to consider in 2021
So far in 2021, we have not only seen the continuation of the worldwide pandemic crisis but also the final arrival of a full Brexit. With all of the pressures and changes, what key things should businesses consider, if carrying out business globally, or in the EU?
December 2020 demonstrated the extent to which shipping delays can impact on goods in transit, with seafood cargo a particular victim of French port closures. Whilst goods held up in port should continue to be covered by their insurance policy, still being deemed to be ‘in transit’, cargo deterioration claims, or those for loss of customer orders due to delay, typically require physical goods loss or damage to have occurred before they can be validated.
With food, a trigger such as refrigeration machinery breakdown often has to be proved to be the cause of the loss. ‘Delay’ and ‘inherent vice’ are often specific policy exclusions in the many policies written using the Institute Frozen Food Clauses (A) as the insuring clause, according to the insurer.6 Therefore, a supply chain breakdown is typically not a reason for a successful policy claim.
The exceptions to this general rule may be found in the liability sections of policies held by hauliers and freight forwarders. Here, the cover may protect against claims brought against the policyholder. The best advice is for those faced with such an action to seek the advice of their broker, so that specific policy wording can be examined, to assess its scope.
Despite delay exclusions within marine cargo policies, this insurance protection is acquiring huge importance. Cargo theft has been increasing worldwide7 and thieves are benefiting from COVID-19 disruptions to shipping schedules, changes of port and, at times, a switch in transportation method, where cargo is diverted for carriage by land, rather than by sea, for instance.8 Warehouse thefts are rising sharply and the attractiveness of certain cargoes9 to thieves – particularly those related to PPE – is evident. Having robust Marine Cargo insurance in place may never have been so vital, no matter what transportation method you use.
Following Brexit, haulage companies (and coach tour operators, when permitted to travel), have new rules to follow with regard to European travel. A wide range of vehicle and tax-related documentation must now be carried onboard, including a paper (hard copy) version of a Green Card – a document issued by an insurer, to prove the vehicle has valid insurance.10 A trailer also requires its own Green Card. Green Card holders must also make plans carefully over the time of insurance renewal, if a new policy will take over from an existing one, whilst the vehicle is in Europe. In that case, two Green Cards are required – one for proof of insurance policy one and the second to prove another policy now covers the vehicle.
Passport validity11 is another area requiring careful checking and operators should also review their drivers’ European Health Insurance Cards (EHICs), which have traditionally provided medical treatment benefits in Europe. EHICs are valid up to their current expiry dates, but must then be replaced by Global Health Insurance Cards (GHICs).12 Unlike the EHIC, these are not valid in Norway, Iceland, Liechtenstein or Switzerland and do not offer quite as many benefits. Operators should apply for new GHICs around two weeks before their EHIC expires and not use these as an alternative to travel insurance purchase. It should be noted that neither EHICs or GHICS cover any private healthcare costs. In many parts of Europe, private services, including ambulances, are part of the general medical infrastructure, so having travel insurance, to cover such private medical costs, as well as many other aspects of travel, is vital.
If you are a sales representative, taking samples into Europe, you have another piece of paperwork to embrace – an Admission Temporaire (ATA) Carnet application.13 This covers the transit of many types of product (though not all), through 77 countries14, for temporary use, such as at a sales meeting or exhibition. An ATA Carnet avoids customs charges being incurred for goods and simplifies passing through customs as a business traveller.
Applications can be made online from the London Chamber of Commerce and Industry15 but list all the goods you wish to take on business trips at once, as you cannot add extra goods later and would need a separate carnet for additions.
Exporters need to check carefully on the various permissions, licences and certificates they require, which are often country specific. They also need an EORI (Economic Operators Registration and Identification number) number starting with GB, to export goods from England, Wales or Scotland. If moving goods to or from Northern Ireland, they may need one starting with XI.16 An application takes five to ten minutes but there could be a five-working-day delay in receiving the number, if checks are required. Ensure enough time is allocated.
The Government website carries much information on the post-Brexit permissions exporters require. Just remember that any exported goods also need the right goods-in-transit insurance protection to be in place and that other covers should be discussed with us, to prevent loopholes and possible financial losses as you carry out your trade.
10https://www.gov.uk/vehicle-insurance/driving-abroad 11https://www.gov.uk/guidance/passport-rules-for-travel-to-europe 12https://www.bbc.co.uk/news/world-europe-44850972
13https://www.gov.uk/taking-goods-out-uk-temporarily 14https://www.gov.uk/guidance/countries-that-accept-ata-carnets 15https://www.gov.uk/guidance/apply-for-an-ata-carnet