Tuesday, 10 May 2016

LEADING SUPPLIER WARNS OIL AND GAS BUSINESSES CAN ONLY RETAIN COST AND TIME BENEFITS BY USING ACCREDITED PROVIDERS - 10/05/2016

LEADING SUPPLIER WARNS OIL AND GAS BUSINESSES CAN ONLY RETAIN COST AND TIME BENEFITS BY USING ACCREDITED PROVIDERS

A leading supplier to the oil and gas industry has warned sector businesses trading internationally that choosing appropriate freight forwarding and logistics partners is now more vital than ever.

Leeds-based Tudor International Freight said industry participants are set to lose significant cost and speed benefits once the EU’s Union Customs Code legislation takes effect on 1 May, unless they employ a logistics partner who holds Authorised Economic Operator (AEO) accreditation. A mere 300 UK-based organisations currently enjoy full AEO status, which is awarded by HM Revenue & Customs (HMRC). 

The internationally-recognised AEO quality mark confirms a provider’s role in the international supply chain is secure and its controls and procedures meet demanding efficiency and compliance standards. Companies with full authorisation can enjoy benefits when transporting goods overseas, including a faster application process for customs authorisations and a reduction in the level of financial guarantees required.

Providers with full AEO status enjoy these advantages across the EU and in other countries with which it has mutual recognition agreements, including the USA, Japan and China.

Tudor recently joined the ranks of organisations with full AEO accreditation.

David Johnson, the company’s managing director, said: “We’re delighted to have become an AEO. Most of the other organisations with full status are large worldwide multinationals, which makes our achievement - we operate from just one site - all the more impressive.  

“Specifically, suppliers with full accreditation can now help clients in the oil and gas industry benefit from a faster application process for simplified customs procedures, such as Inward and Outward Processing Relief and Customs Warehousing.

“Inward Processing Relief is a method of obtaining relief from customs duties and VAT charges. It applies to goods imported from outside the EU, processed and exported to countries outside the EU. Outward Processing Relief allows you to temporarily export goods for processing or repair in a non-EU country and pay no or only partial duty when re-importing them.

“Full AEO status means you also qualify for a reduction in the level of financial guarantees required to operate certain procedures. These include the use of a duty deferment account, which enables goods to be cleared through customs without being delayed pending payment of customs duty and import VAT liability. This will allow companies like ours to pass on significant savings to oil and gas industry customers.” 

Mr Johnson said full AEO status, in addition to delivering financial and speed advantages for clients, confirmed a business’s operations met exacting standards. As part of its own accreditation process, for example, HMRC visited Tudor’s head office several times to review its customs processes and procedures and carry out transaction testing with staff members from different departments.

He said: “Among the many aspects of our operations HMRC examined with a fine tooth comb were our customs compliance history, commercial and transport record keeping, financial solvency and practical professional competence.

“We also had to demonstrate security and safety standards adequate for protecting the international supply chain. This requirement covered areas such as physical integrity and access controls, logistical processes and the handling of specific types of cargo, plus personnel and business partner vetting procedures.”

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