“Export outside the EU? Prepare”

Ron van de Pavert took his first business steps in Germany with his company HJvan de Pavert BV in 2003. The owner of BrimaPack in Ulft now sells his machines all over the world. He outsources export declarations to a customs broker. The same party also assists him in disseminating export documents. His advice: “Prepare, find out in advance what you have to face. That way you avoid problems along the way.”

When selling products outside the EU, a customs declaration is required in both the exporting and importing country. Product requirements may vary from country to country. Van de Pavert explains how his company handles the export of machinery to countries outside the EU.

Examine the market
BrimaPack develops and produces packaging and sorting machines for vegetables such as broccoli and iceberg lettuce. With a worldwide sales market, the company has to dive into many countries.

For his market research, Van de Pavert mainly uses knowledge about his network, including colleagues and entrepreneurs in the chain, such as seed growers and suppliers. Since the founding of BrimaPack in 2006, he has built up an extensive international network. “In our sector, we communicate openly with each other about products, prices, suppliers and customers. After 15 minutes of talking, I have a picture of 80% of the major buyers in an export market, which is new to me.”

Market opportunities
Van de Pavert always visits a supermarket during a stay abroad. That way, he can immediately see if there is a need for his products in that country. “There’s a mark from the grower on vegetables. That way, I quickly find out the larger growers.” He also monitors market movements in large supermarket chains. “These companies want their vegetables packaged in a European way. It’s a plastic seal that extends the durability of the products. A wish that we can meet with our machines.”

Local product requirements
Like many other industrial product groups, machines must comply with CE guidelines that are mandatory within the EU or EEA. Countries outside the EU may require other standards. For example, the UK has had a UKCA brand since Brexit. “Legislation differs from country to country,” says Van de Pavert. “Check what rules and laws apply in the destination country. Inform your customers about the product specifications. That way, they know in advance what you are delivering and with what guidelines.”

Market access
Exports to existing or new export markets can be done in several ways. For example, through a connection between the exporter and the buyer, such as a distributor or trading agent, directly from a Dutch branch or by opening a foreign branch.

BrimaPack exports in two ways. “Packing machines for small growers go as far as possible through local distributors. These distributors often deliver from stock and solve any local problems with customers. Large growers buy the field harvesting machines directly from us. We make these machines according to the customer’s wishes. Larger growers often have their own technical “They take care of the first-line problems and keep the installations running themselves. If that does not work, we will go on the plane and fix the problem on the spot.”

UK iceberg lettuce harvesting and packing system

Find partners and customers
You can find foreign parties by attending trade shows or trade missions. Van de Pavert sometimes attends trade fairs. In addition, he mainly uses his own network to find new customers. “The vegetable world is small. In the exporting countries where seed suppliers sell their seeds, we will soon be able to supply packaging machines.”

Check reliability
Before he delivers, Van de Pavert checks on his customers. He always gets a credit check done. “Our packaging machines cost an average of 35,000 euros. The larger combine harvesters are on their way to 1 million euros. Before I accept an order, I want to know if my customer is financially sound. I also trust my gut feeling.”

Arrange the transport
By agreeing on an Incoterm, both supplier and customer know who arranges the transport and who has to pay any costs for damage during the transport. BrimaPack works with one of Incoterm’s rules by default. “This is not mandatory, but it makes sense. Most of our shipments go by sea. First on a low loader on the way to Rotterdam and then on the boat to the customer. Occasionally a shipment goes by air freight. This depends on the machine’s size and destination. Air freight is often too expensive for our machines. For our export shipments, we mainly use the Incoterms CIF port in Rotterdam and sometimes Ex Works or DAP. “

BrimaPack took out an ongoing transport insurance for all safety. “Yet sometimes you also need luck,” laughs Van de Pavert. He heard from competitors that importing into Brazil can cost a lot of time and money. “Our last shipment to Brazil went by plane because our customer wanted his order quickly. We offered the shipment under the Incoterm FCA Airport Schiphol. From Schiphol, our customer took over the risk and responsibility for the shipment. We had many lucky ones there. There was a volcanic eruption in Iceland. The shipment was stuck at Schiphol for a month and then another month in Brazil before the customer had his machine. “

Documents on export
Export documents are required for export to countries outside the EU. As a minimum, an export declaration, packing list, invoice and transport documents accompany the shipment. What additional documents are required depends on the product and destination country. For example, an import license or documents of origin.

Van de Pavert adds: “Our freight forwarder informs us of the necessary documents. No special certificates or other documents are required for our machines. We sometimes use an invoice declaration for deliveries to Switzerland. Our Swiss distributor then pays no or less import duties.”

Customs and Taxes
When exporting products to countries outside the EU, an export declaration to the Dutch customs is required. For the statement, use an EORI number; a mandatory identification number. The customs in the country of arrival clears the shipment and needs the products’ HS codes for this. The HS code of a product determines the level of import duties and whether additional import rules apply, such as import documents or a security check. The Incoterm rule used determines whether the supplier or the customer must clear the products.

Van de Pavert outsources export declarations to a customs broker. “There is an export worker in the office who works with a regular customs broker. It saves a lot of administrative hassle. Such as purchasing and immersion in the software for digital declarations.”

Import duties in exporting country
For most products, the consignee or consignor pays customs duties in the country of arrival outside the EU. The rate of import duties varies from product to product.

Van de Pavert explains: “Import duties are closely linked to the HS code. We do not actually look at the import duties ourselves. Our customers always import the machines themselves and pay the costs. Find out for your customer in advance which HS code best suits your This can save your customers’ import duties. “

VAT on exports
When exporting goods to countries outside the EU, the VAT rate of 0% applies. In a tax audit, the administration must demonstrate that the delivered products have left the EU. For example with the customs export document, transport documents and payment receipts.

If you offer export shipments with Incoterm Ex Works, have foreign customers sign a transport declaration when picking up the goods. This statement in the administration proves that products have left the EU. Then the 0% VAT rate applies, writes the Chamber of Commerce.

Determine the export price
The cost of products includes costs of production, storage, insurance and transportation. In addition, of course, they also want to make money.

Due to the customized offers, BrimaPack does not work with standard price lists. “We carefully calculate the cost of materials, hours and an advanced surcharge for each offer. We pass on any transportation and insurance costs. And customers also pay for the hours for product development. Then we charge development hours in addition to production. Hours.”

Record appointments
An offer contains agreements entered into between suppliers and customers. BrimaPack adds drawings, specifications and other documents to their offerings, such as general payment and delivery terms. The company applies the Metal Union’s standard terms and conditions.

Contracts with partners
If the customers agree on an offer, this is a valid agreement. Another option is to register agreements entered into in a contract. Van de Pavert admits that his company only occasionally works with official contracts. “Our offer actually covers everything. Sometimes customers want changed circumstances. For this, we ask Metaalunie for legal advice.”

to get paid
Exporters want to make sure they get paid. Preferably before they ship their products. This also applies to Van de Pavert. “New customers almost always have to pay in advance. Before machines are transported, they have usually paid 90% of the total amount. For example, 30% on order, 30% after two production months, 30% before delivery and finally 10%.% Within fourteen days after receipt of the machinery. “

There is no standard form of payment for export shipments. Customers can pay in advance, or you can arrange the payment with a “Letter of Credit (L / C)”. The form of payment is part of the negotiations. Banks provide information on the most appropriate form of payment for a transaction.

Source: KVK

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