www.bifa.org


Policy & Compliance


and very often relates to minerals mined in a country, crops grown or livestock raised in it. It would also cover products derived from them, such as straw which is a by-product of cereal growing. The second situation is more complex and FTAs


usually include product-specific rules for each product or group of products. There are three main methods in which products are sufficiently transformed to meet the applicable legislation. For preferential origin, substantial


transformation is defined through one or a combination of three main criteria: • Change of tariff classification:When the work undertaken within a country results in a change of classification. For example, the unique code for car parts, 8708, is different to the code for a finished car, 8703. If a country assembles car parts into a finished car, it would qualify as a change of tariff classification.


• Sufficient value-added: The originating state must contribute a minimum percentage of the value of a product. Each component will add a certain amount of value, calculated as the percentage of the ex-works price of the final good (ie the total price of the inputs to the good exempting transportation and insurance costs). Typically, around 50%+ of value has to be added to claim origin. NB: due to significant fluctuations in the value of agricultural goods, some permit the substitution of value for weight.


• Specific processing: Finished products can qualify when particular specific working or processing activities are carried out. For example, a rule may require clothing products to be manufactured from yarn.


Fundamental issue So the fundamental issue is how many UK manufactured goods would actually meet the above criteria and qualify as being of UK origin? After so many years in the Customs Union and Single Market, many UK manufacturers have sourced products and components in the EU. These manufacturers, in many cases, may also find that products made from a mix of EU and UK products would no longer meet the rules to qualify as being of UK origin. In fact, unless UK sources can be identified, importing from other countries outside the EU will not overcome the specific problem and will not allow the goods to be classified of UK origin. Now we are getting into the detail of EU Exit, it


is clear that many such complex issues have either been ignored or not understood by government since the outcome of the Brexit Referendum on 23 June 2016.


September 2020


BIFAlink


Wooden pallet shortage is Brexit stumbling block


The UK does not have enough of the right sort of disease-resistant pallets to trade with the EU, according to the Timber Packaging and Pallet Confederation


As if those in the import and export industry have not got enough trouble with COVID-19, their next quarantining crisis could be handed to them on an otherwise humble wooden pallet, The Times reports. According to the Timber Packaging and


Pallet Confederation, Britain does not have enough of the right sort of disease-resistant pallets to trade with the EU in future –a situation that, ironically, has been made worse by the pandemic. Wooden pallets must be baked at 56ºC to


ensure they meet the requirements of a regulation known as ISPM 15. It means that they are less likely to harbour diseases and pests and are more likely, with their cargo, to get through export control at ports around the world without going into quarantine, the newspaper explained. For the purposes of world trade, the EU is


treated as one country and therefore it has not mattered whether wooden pallets going between Britain and the Continent are certified to ISPM 15 standards. From the end of the Brexit transition period on 31 December, the standards will matter.


Ministers have been alerted to the fact that


the coronavirus has hampered efforts to get enough disease-resistant, ISPM-certified pallets produced to cover the 100 million used in trade between the UK and the EU.


Extension plea Quoted by Bloomberg, John Dye, the Confederation’s president, has asked the government for an extension to get the right amount of pallets produced. “It is ever more unlikely the 1 January 2021, compliance date will be met,” he told the Department for Environment, Food and Rural Affairs in a letter seen by the news agency. The issue appears to be a lack of kilns and the


need to invest in new such ovens to put the wooden pallets through the heat-treating process. “Treatment capacity for wooden pallets has


increased,” the department said in a statement. “We are working closely with industry to help ensure a sufficient stock of compliant pallets in time for January.”


This article originally appeared in Lloyd’s Loading List, Monday, 27 July 2020.


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