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Automotive sector: international trade regulations

Import and export regulations for the automotive sector, market trends and drivers, and the role of the UK Trade Tariff and correct classification of goods.
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Contents
Introduction Key drivers in the automotive sector Type approval of whole vehicles and automotive components The Tariff, customs duty and restrictions and the automotive sector How customs reliefs facilitate and support international trade Preferential trade agreements and the automotive sector Key importing and exporting requirements and the automotive sector Sources of help and support in the automotive sector urther information !" See more li#e this

Introduction
This guide provides an overview of the automotive sector, the #ey regulations you will need to comply with as an exporter or importer, and selected sources of further help and support" This guide also covers an overview of the mar#et, including #ey automotive trends and drivers and the type$approval requirements that must %e met %efore placing vehicles on the mar#et" It introduces the role of the &K Trade Tariff and correct classification of your goods, the taxes and duties that apply, reliefs that might %e availa%le for different products and circumstances, preferential trade agreements and where to go for more help and advice"

Key drivers in the automotive sector


'esearch and development to decar%onise cars, vehicles and the fuels they use is the single most important driver for the sector" This comes as countries and governments wor# towards reducing their car%on footprint %y using new technologies and ever more stringent standards to reduce emissions and other environmental pollutants such as noise"

In the &K, a (!)* million +ow Car%on ,ehicles Innovation Platform provides funds to develop low car%on cars and methods for charging ultra low car%on vehicles" Trials of low car%on vans in pu%lic fleets are also %eneficiaries of this funding" - new +ow Car%on .conomic -rea for ultra low car%on vehicles in the /orth .ast taps into and %rings together the various research and production strengths in the region" Cleaner engines, lighter cars, plug$in hy%rids and components for electric vehicles are li#ely to %e among their #ey pro0ects" The 1epartment for 2usiness, Innovation 3 S#ills 42IS5 provides incentives %y investing in charging infrastructure, and ma#ing (67* million availa%le from 6*!! for consumer su%sidies for the first ma0or generation of ultra$low car%on cars" The sector also %enefits from government support for low$car%on vehicles including8

an exemption from company car tax for electric cars from 6*!* a !**9 first$year allowance for electric vans a further (7* million investment in low$car%on transport pro0ects

:lo%al harmonisation and economies of scale are also #ey drivers" It is widely considered that the glo%al car manufacturing industry has reached over capacity in traditional vehicles in existing mar#ets" ;anufacturers are now loo#ing towards emerging economies under a system of type approval that will allow any vehicle to %e sold in any mar#et under a single set of harmonised glo%al technical regulations" To this end, .& type approval regulations are %eing aligned with the glo%al &/ .C. agreements of !<)= and !<<= to ensure a single standard incorporating high levels of safety, environmental protection, energy efficiency and anti$theft mechanisms" or more information, see the following section" :eneral safety and personal protection $ demands for higher standards in protecting %oth persons and property mean that investment in new and enhanced electronic devices ma#es up an increasing proportion of vehicle value"

Type approval of whole vehicles and automotive components


>ithin .urope there are two possi%le systems of type approval" ?ne is %ased around .C1irectives and provides for the approval of whole vehicles, vehicle systems, and separate components" The other is %ased

around &/ .C. regulations and provides for approval of vehicle systems and separate components, %ut not whole vehicles" European Community Whole Vehicle Type Approval (EC WVTA .C >,T- is to ensure that new vehicles are safe to use on the road and have a lower impact on the environment, without having to inspect and test every single one" 2usinesses that manufacture, %uild, convert or sell passenger vehicles, commercial vehicles or trailers may also require type approval under legislation %eing phased in %etween 6**< and 6*!@ that will %ring them into line with the car sector, which has %een su%0ect to similar legislation for more than ten years" .C >,T- has created a single .uropean mar#et in truc#s, %uses and trailers" Self$certification of trailers is %eing phased out and replaced %y two new statutory recording schemes $ one for light trailers, the other for large trailers" Aou must su%mit any new vehicle made, adapted or imported for sale in the &K or the.& to the approval authority for whole vehicle approval in a mem%er state %efore you can sell it anywhere in the .&" However, once a vehicle has approval in any one mem%er state, it will apply to all vehicles of that type throughout the .&" Aou can find essential type approval certification requirements information on the ,ehicle Certification -gency 4,C-5 we%site" The !K"s four#trac$ type approval system Approval title !uropean "ommunit# $hole %ehicle T#pe Approval &!" $%TA' Application criteria (anufacturers of vehicles and od#)ork producing large num ers of the same vehicle t#pe or product each #ear. It can e applied to a design of chassis, design of od# or a complete vehicle. There is no upper limit on *uantit#. Scope and enefits It allo)s the manufacturer to sell the product in an# !Umarket )ithout needing additional national tests in another !Umem er state.

!" Small Series Smaller manufacturers producing It allo)s sales an#)here in T#pe Approval up to +,,,, passenger cars per t#pe the !U, ut has technical and &!"SSTA' each #ear. administrative re*uirements adapted to smaller usinesses.

Approval title -ational Small Series T#pe Approval &-SSTA'

Application criteria A UK national scheme for lo) volume manufacturers )ho intend to sell onl# in the UK. It is limited to production of et)een ./ and /,, vehicles produced per t#pe per #ear, su 0ect to the categor# of vehicle.

Scope and enefits A reduced "onformit# of 1roduction &"o1' re*uirement, and fe)er administrative re*uirements. 2nce the design is approved, individual vehicles do not need to e tested.

Individual A UK national scheme intended for There is no "o1re*uirement, ut %ehicle those manufacturing or importing most od# uilders and converters Approval &I%A' single vehicles or ver# small )ill )ork )ith manufacturers to num ers from third &non3!U' ensure there is no )arrant# countries )hen there is no !uropean compromise. Approval is vehicle t#pe approval. These individual. vehicles must e inspected # the %ehicle and 2perator Services Agenc# in 4reat Britain. Key points to consider when planning your type approval application To achieve type approval for a new model of vehicle you must first apply to the ,C- in the &K or the equivalent %ody in another mem%er state for an assessment of your production processes and other tests to determine that you have quality management standards in place" ?nce you are awarded type approval for a vehicle you manufacture, you will %e solely responsi%le for ensuring CoP remains valid for all vehicles you produce under that approval" Aou will then %e a%le to issue a Certificate of Conformity for each vehicle of that type you produce" Aou must have separate type approval for certain components, where previously it was optional" Items li#e engines, lights, tyres, mirrors and glass all have to have their own approvals" The installation of the equipment is covered %y .C >,T-" The &K national approval schemes will not %e accepted automatically %y other .&mem%er states" Producers who want to export products with national certification will have to apply directly to the type approval authority in the country to which they wish to export" There are however processes in place to facilitate the mutual recognition of national type approvals" !nited %ations Economic Community for Europe (!% ECE regulation

,ehicle manufacturers increasingly opt for type approval through the glo%al technical harmonisation of regulations relating to motor vehicles under the &/B.C. !<)= and !<<= agreements" This is %ecause &/ .C. approval allows access to mar#ets outside the .& $ eg 'ussia, South -frica and Capan" This trend made a num%er of .C 1irectives in the parallel vehicle type approval system redundant" The .& is simplifying and harmonising requirements to facilitate the individual approval of vehicles imported from and exported to third countries" The intention is to esta%lish a process for promoting the development of glo%al technical regulations ensuring high levels of safety, environmental protection, energy efficiency and anti$theft performance of wheeled vehicles, equipment and parts which can %e fitted andBor %e used on wheeled vehicles" >hen exporting, you need to consider which safety, construction and use regulations you need to comply with" These could cover the complete manufactured vehicle andBor any num%er of its component parts" ;any countries and trading %locs have their own specific requirements for vehicles and components" >hen importing, you will to chec# that vehicles and automotive components and su%$assem%lies comply with &K legislation as all goods imported into the &K must comply with domestic %usiness standards, including health and safety legislation" ind out how to comply with automotive regulations in the section on your %usiness sector" or more information, see glo%al technical regulations for wheeled vehicles, equipment and parts which can %e fitted andBor %e used on wheeled vehicles from the :lo%al -uto 'egs we%site"

The Tariff& customs duty and restrictions and the automotive sector
+i#e all %usinesses engaging in import andBor export, those in the automotive sector must comply with a range of regulations relating to international trade" !sing the Integrated Tariff The starting point to the smooth movement of goods in the .& is the common customs tariff in force across all .& countries to classify goods for import to or export from the.&"

ind commodity codes and other measures applying to imports and exports in the automotive sector %y accessing the online trade tariff or specific information on using the Tariff for vehicles and automotive products, see the guide on classifying vehicles" ?nce you have identified the correct code, you will at a glance %e a%le to see whether any import duties, taxes, tax re%ates, reliefs, licences and special conditions such as prohi%itions apply to your goods" 'icensing re(uirements -lthough you will not normally need a licence to export automotive goods, you will need to consider whether your goods might %e adapted and put to strategic or military use" Such products are considered to %e dual$use goods and will require export licensing" To find out whether you need a licence to export your goods, you should first identify their commodity code" >hen importing goods into the .&, you should also chec# whether a licensing requirement is in place %ecause of the country of origin of the goods" In addition, motor vehicles and #ey components will have to meet specific safety, environmental and quality requirements %efore they can %e imported into the &K" If you are not sure whether the goods, software or technology you wish to export are controlled %y &K or .& strategic export control legislation, register to use the :oods Chec#er on the 1epartment for 2usiness, Innovation 3 S#ills 42IS5 we%site" To find out more a%out licensing controls applying to international trade, you can read the guides8 export control licensing process and how to appeal and do you need an export or import licenceD Anti#dumping and countervailing duties -nti$dumping duties andBor quotas may %e permanently or temporarily in force to protect domestic producers from unfair competition from under$ priced third country imports" Countervailing duties can apply to imports that have %een su%sidised %y the country from which they originate" or more information, see the guide on anti$dumping and countervailing duties" Intellectual property

Aou must ma#e sure that goods you import do not %reach intellectual property rights of other %usinesses" Infringing goods can %e seiEed and destroyed %y H; 'evenue 3 Customs 4H;'C5" If you have concerns that others might import counterfeit versions of your goods, you can as# H;'C to chec# incoming shipments for any goods you %elieve infringe on your intellectual property rights" >hen exporting you should %ear in mind that certain intellectual property rights are territorial and might only give protection in the countries where they are granted or registered" Aou can find advice on the Intellectual Property ?ffice we%site" )omestic *usiness legislation and standards -ll goods imported into the &K must comply with domestic %usiness standards, including health and safety legislation" ind out how to comply with automotive regulations in the section on your %usiness sector"

+ow customs reliefs facilitate and support international trade


H;'C runs a num%er of duty relief schemes that could %enefit automotive %usinesses" 1uty relief procedures can8

provide relief from or delay payment of duty andBor ,-T allow reduced or nil rates of duty to %e applied on goods that are permanently or temporarily imported under specific conditions andBor imported to a specific use provide relief from duty andBor ,-T for goods, temporarily exported and returned from outside the .uropean Community 4.C5 Inward Processing 4IP5 $ IP ena%les you to o%tain duty relief on goods you import from outside the .C for processing and re$export from the .C" Processing can %e anything from repac#ing or sorting goods to the most complicated manufacturing" See the guide on inward processing" ?utward Processing 'elief 4?P'5 $ ?P' allows you to export Community goods, for processing or for repair" The processing wor# can range from the very simple through to involved manufacturing" ?n reimport to the .C you will only have to account for duty on the value added to the goods %y the processing outside the .C" See the guide on outward processing relief 4?P'5"

1uty relief schemes include %ut are not limited to8

Customs warehousing $ this storage procedure allows payment of import duty andBor ,-T to %e delayed when non$Community goods are stored in a defined location or under an inventory system authorised as a Customs warehouse" See the guide oncustoms warehousing" .nd$use relief $ this scheme promotes particular .C industries and trades, su%0ect to certain criteria %y allowing a reduced or Eero rate of customs duty on goods used for prescri%ed purposes" or information on how to apply for an authorisation to use this relief, see the guide on end$ use relief" ree Eones $ these are designated areas where payment of duty and ,-T can %e delayed provided imported goods are not released to free circulation or used or consumed within the free Eone" See the guide on free Eones"

Aou can find out whether the goods you import are eligi%le for any of the a%ove or other reliefs %y referring to the relevant footnotes in the Tariff" Customs reight Simplified Procedures $ while not defined as a relief, this optional electronic customs system $ with its Simplified 1eclaration and +ocal Clearance Procedures can %enefit %usinesses importing eligi%le goods from outside the .C" See the guide on Customs reight Simplified Procedures" +ow the automotive sector can *enefit from duty relief schemes IP and ?P', for example, are useful to manufacturers who need to import components for final manufacturing or assem%ly in the &K or for %usinesses wishing to use .C$produced items to %e manufactured elsewhere" Aou could also use end$use relief to receive certain goods at a reduced or nil rate of duty provided they are imported from outside the .C, put them to a prescri%ed use under Customs control and within a specified time limit" .nd$use is deemed to %e completed for vehicle parts used for assem%ly when assem%ly of the vehicle is complete and the vehicle has left the assem%ly line" .nd$use relief does not extend to ,-T, excise duty or anti$dumping duty" >here ,-T is due, it must %e paid unless any separate ,-T relief applies" See the guide on end$use relief"

,referential trade agreements and the automotive sector

-utomotive %usinesses may find one or more of the.&Fs preferential trade agreements with third countries or groupings of third countries %eneficial to their %usiness" To qualify for preferential treatment $ ie elimination or partial elimination of the full rate of customs duty $ the goods must meet the relevant origin rules" See the guide on rules of origin" ,referential trade agreements -s a result of preferential trade agreements certain goods that you import or export may attract a lower or nil rate of duty" The main agreements include8

ree trade agreements 4 T-s5 $ The .& has many %ilateral T-s with individual countries, whether with partners in the region $ eg the .uro$;editerranean Partnership, with central .uropean countries, or %eyond 4;exico, Chile, South -frica5" The :eneralised System of Preferences 4:SP5 encourages developing countries to export %y allowing their products preferential access to the mar#ets of developed countries" Aou will need to support all preference claims with a valid proof of preferential origin" or more information, see the page on the :eneralised System of Preferences and :SPG in the guide on using trade preferences" .conomic Partnership -greements or the preferential duty regime of the -frican, Cari%%ean and Pacific States 4-CP5 and the .& remove %arriers to trade and enhance cooperation in all areas related to trade" or detailed and country$specific information on Tariff preferences, see8 /otice =7* $ Tariff Preference8 /ew :SP rules of origin on the H;'C we%site /otice =6H on .C preferences for exports on the H;'C we%site /otice =6I on .C preferences for imports and related notices on the H;'Cwe%site

Key importing and e-porting re(uirements and the automotive sector


The international trade section of this we%site fully covers every aspect of practical importing and exporting" This page %rings together #ey requirements to help automotive %usinesses cost$effectively and efficiently move goods %etween the &K, the .&, andBor third countries"

The common customs tariff in force across all .& countries is the single most important document when importing andBor exporting" Aou will need to refer to it to classify goods for import to or export from the .&" ind commodity codes and other measures applying to imports and exports in the automotive sector %y accessing the online trade tariff or specific information on using the Tariff for vehicles and automotive products, see the guide on classifying vehicles" ?ther #ey topics relevant to %usinesses in the automotive and related sectors are8

.conomic ?perator 'egistration and Identification Scheme 4.?'I5 $ you must have an .?'I num%er if you are required to provide pre$ arrivalBpre$departure information for goods, or are involved in the import, export or movement of goods under a transit procedure" See the guide on the .conomic ?perator 'egistration and Identification 4.?'I5 Scheme" -uthorised .conomic ?perator 4-.?5 $ an -.? certificate is li#ely to %e particularly relevant to this sector as it is an internationally recognised quality mar# that proves your role in the international supply chain is secure and that your customs controls and procedures are efficient and compliant" Aou must have an .?'I num%er in order to ma#e an -.? application" See the guide on -uthorised .conomic ?perators" ,-T, excise and duty in international trade $ getting these requirements right will save you time and prevent delays in releasing your goods" Customs handling of freight through the CHI. system $ CHI. , the Customs Handling of Import and .xport reight system electronically records the movement of goods %y land, sea and air" If youFre not yet using the system, find out how to register and use CHI. in the guide on &KFs import and export processing systemCHI. " 1eclarations and the Single -dministrative 1ocument 4S-15 $ you or your agent must use S-1 or form C== as it is #nown in the &K to declare imports, exports and transit and community status declarations on trade with third countries" Aou should use it to enter goods to and remove them from customs procedures" >hile itFs not necessary for trade within the .& single mar#et, you will need it to move non$ .& goods in the.&" See the guide on declarations and the S-1"

Intrastat& .upplementary )eclarations and European .ales 'ists (E.'s

,-T$registered %usinesses that trade in goods with other .& mem%er states are required to provide details of their transactions for use in collating .& trade statistics" Intrastat is the system used to collect these statistics" In addition to showing the total value of goods you dispatch to other .& mem%er states in your ,-T return, you must also su%mit monthly supplementary declarations 4S1s5 toH;'C if you trade in goods with other .& countries a%ove annually$set Intrastat exemption thresholds" ,-T$registered %usinesses that supply goods or services to other ,-T$ registered %usinesses in the .& must also provide details of these transactions at prescri%ed intervals for use in the .S+" or the detail on all the a%ove requirements, see the section on supplementary declarations for Intrastat"

.ources of help and support in the automotive sector


-s an importer or exporter in the automotive sector, you can turn to a range of %odies for help and information" The ,C- is the designated &K -pproval -uthority and Technical Service for type approval to all automotive .C 1irectives and the equivalent &/ .conomic Community for .urope 4&/ .C.5 'egulations" ,ehicle type approval is the confirmation that production samples of a design will meet specified performance standards" ind out a%out type approval and certification -Js, presentations and guidance on the ,C-we%site" The 1epartment for 2usiness, Innovation 3 S#ills 42IS5 runs a num%er of support schemes within the automotive sector" Aou can find listings of automotive sector support schemes on the 2IS we%site" 2IS also has teams that offer guidance and practical support for specific functions within the automotive industry" 'ead a%out direct support for the automotive industry on the 2IS we%site" &K Trade 3 Investment is the government organisation with primary responsi%ility for providing trade support" ind information on the services offered to exporters on the &K Trade 3 Investment 4&KTI5 we%site" The &K Trade 3 Investment -utomotive Team can provide #nowledge, advice and practical support through a networ# of international specialists in the &K and in 2ritish .m%assies and other diplomatic posts around the world, including8

support to %uild export capa%ility access to inward and outward mar#et visits, seminars, opportunities and reports sales leads and %espo#e research services specific to mar#et assistance in exporting for the first time, including access to the Passport To .xport programme ind your local international trade team on the &KTI we%site or call the &KTI-utomotive Sector Team on *!@! 66= 7I)@ for direct advice a%out this sector" 'ead a%out partnership programmes offering %usiness support to the automotive sector on the &KTI we%site"

or information on support services that can help you grow your export %usiness, see the guide on government help for exporters" The &nited Kingdom -utomotive Council arose from a recommendation of the industry$led /ew -utomotive Innovation and :rowth Team to support the industry, develop its technologies as well as a stronger and more competitive automotive supply chain" Aou can find news, events and reports on and for the automotive sector on the &K -utomotive Council we%site" The Society of ;otor ;anufacturers and Traders +imited Industry orum is a colla%oration %etween international vehicle manufacturers and component suppliers" Created %y the motor industry for the motor industry, Industry orum has created a num%er of programmes %ased around a common approach which ena%le a company in any part of the supply chain to ma#e measura%le improvements in quality, cost and delivery, while also improving partnership with its customers" Aou can call the Industry orum on *!6! H!H II** or read a%out the Industry orum on the Industry orum we%site" +ow Car%on ,ehicle Partnership $ +owC,P is an action and advisory group that ta#es the lead in accelerating the shift to clean, low car%on vehicles and fuels in the &K" It is a partnership of organisations from the automotive and fuel industries, academia, environmental non$ governmental organisations and other sta#eholders who are wor#ing together with the government" Aou can call +owC,P on *6* H7*@ H*@* or find advice a%out low car%on vehicles and fuels on the +owC,P we%site"

/urther information
+01C Tariff Classification .ervice En(uiry 'ine

*!H*6 7II *HH !K Trade 2 Investment En(uiry 'ine *6* H6!) =*** -utomotive sector information on the &KTI we%site -utomotive sector information on the 2IS we%site 1ownload a leaflet on ;otor Industry acts 6*!! from the Society of ;otor ;anufacturers and Traders +imited we%site 4P1 , !"<;25 1ownload the +ow Car%on -utomotive 1irectory from the &K Trade 3 Investment we%site 4P1 , @"<*;25 'ead a report on growing the automotive supply chain from the -utomotive Council &K we%site Type approval requirements guidance on the ,C- we%site :lo%al technical regulations for wheeled vehicles, equipment and parts on the :lo%al -uto 'egs we%site" International trade team search on the &K Trade 3 Investment we%site :oods Chec#er registration on the 2IS we%site ?verseas intellectual property protection advice on the Intellectual Property ?ffice we%site :eneralised System of Preferences guidance on the 1epartment for 2usiness, Innovation 3 S#ills 42IS5 we%site .& customs tariffs guidance on the 2IS we%site +atest news on .uropean Community >hole ,ehicle Type -pproval on the 1epartment for Transport we%site :lo%al technical regulations for wheeled vehicles, equipment and parts which can %e fitted andBor %e used on wheeled vehicles on the :lo%al -uto 'egs we%site" .& :eneralised System of Preferences information on the .uropean Commission Trade we%site Preferential agreements %etween -CP countries and the .& information on the .uropean Commission Trade we%site /otice =6I on .C preferences for imports and related notices on the H;'C we%site /otice =6H on .C preferences for exports on the H;'C we%site /otice =7* $ Tariff Preference on the H;'C we%site Services offered to exporters on the &K Trade 3 Investment we%site Support measures for the automotive industry on the 2IS we%site -utomotive industry support information on the 2IS we%site