From Ray Stannnard, International Trade Financial Solutions
What? We’re back to a single letter again this month! It’s quite surprising how many international-related issues start with this letter. I promise that next month we will start motoring – currently, I cannot think of any terms starting with the letter J – and K is also a challenge. OK, then, the I’s.
ICC
In International terms, ICC stands for the International Chamber of Commerce. Think of it as a Chamber of Commerce that covers much of the world. Amongst their many responsibilities they formulate, interpret and put into place standards and procedures that are recognised globally. Without this, International Trade would rapidly deteriorate into local practices and chaos. Some cynics will say this already happens, but things like the Letter or Credit rules are drawn up by the ICC. They are also responsible for arbitration, and the general opening up of global markets. Visit their main website for more info.
Import Licence
These may still be required by some countries for some or all goods, including certain imports into the UK. Whilst compliance is the responsibility of the importer, as an exporter, it is a good idea to make sure they are doing so; after all, you want payment for your goods!
Import Paperwork
If goods are already in free circulation within the EU [see 'Free Circulation, Issue 17], paperwork is usually minimal. However, if imports into the UK exceed £600,000 and/or your exports exceed £250,000, you need Intrastat declarations [see below]. Goods from outside the EU will require more documentation, possibly including an import licence [see above].
(All previous issues of the newsletter can be found as PDF files on my website. Click on Articles/Newsletters on the left hand side.)
Incoterms
I have already covered these in Issue 12, at the start of the 1st actual Incoterm.
Inspection Certificate
This is what it says, but it is vital to ensure that the correct one is provided, if called upon. Anyone can issue one, but it is more usual for an independent, random sample to be inspected by an accredited inspection company, such as SGS. Some countries may require these as a precondition of import into the Country. As ever, know the rules for the areas of the world in which you deal.
Insurance policy/certificate
If called for, it is usual for goods to be insured for 110% of their value, and will include details of quantity and route plus, if necessary, time limits and any transshipments. Insurance certificates called for under transferable Letters of Credit can cause an issue in as much as they will show the mark up amount that the middle man is taking to the other parties. More later…
Intrastat
This is a system for collecting statistics on the physical trade in goods between EU member states. If you import or export above the thresholds [currently £600k and £250k respectively] you must complete monthly returns on line, or face heavy fines and penalties. There is a lot more info on the revenue’s website. Just search for Intrastat.
Inward Processing Relief
I do not intend to include all of the many HMRC reliefs in this glossary, but this one is of note for anyone who imports goods for re-export, post processing. If you apply for IPR, you only pay VAT if you subsequently decide to sell them in the UK [or fail to met the conditions attached to IPR, of course].
ISP98
I toyed with whether or not to include, but it is still seen sometimes, so I voted it in. ISP98 is a set of rules that govern Standby Letters of Credit [SLC]. I will cover both Letters of Credit [L/C's] and Stand bys in the relevant sections later on, but, in brief, all L/C’s and SLC’s must state under which set of internationally recognised rules they operate. For L/C’s it should read UCP600, but for SLC’s, ISP98 is usually preferable to UCP600. Without going into too much detail, if you need further advice on ISP98 [or UCP600], please contact me.
Right, that’s the end of I. As I said at the start, J & K are presently blank, so here’s a challenge for everyone – send me an e-mail if you can think of any terms!