Do you import goods from South East Asia?

News has emerged that preferential rates are to be scrapped for some goods coming out of Cambodia. Here is our update on how this will affect importers in the UK.

For many years, the WTO has promoted trade with less well-developed countries through implementation of preferential or zero duty rates. By building the international trade of the least well-developed countries, jobs are created and economies become more robust. It also means these countries become less dependent on international aid and more self-sufficient. 

Preferential rates are granted to such countries provided they meet stringent criteria on issues like human rights and the safety and freedom of their inhabitants and visitors. For many years Cambodia has benefitted from preferential duty rates. 

However, following what the EU Commission describes as “Serious and systematic violations of principles laid down in the ICCPR” it has decided to withdraw preferential duty rates on products which are imported into the EU under the following HS codes

1212 93, 4201 00, 4202, 4203, 4205 00, 4206 00, 6103 41, 6103 43, 6103 49, 6105, 6107, 6109, 6115 10, 6115 21, 6115 22, 6115 29, 6115 95, 6115 96, 6115 99, 6203 41, 6203 43, 6203 49, 6205, 6207, 6211 32, 6211 33, 6211 39, 6211 42, 6211 43, 6211 49, 6212, 6403 19, 6403 20, 6403 40, 6403 51, 6403 59, 6403 91, 6403 99, 6405 and 6406.

The ruling comes into effect for goods leaving Cambodia after 12th August 2020 and means that imported goods in these categories will attract the full rate of duty.

For example, products with current code 4202929890, leather bags with a textile coating, which are of Cambodian origin were being imported with 0% duty, but now will have a duty rate of 2.7%.

As this will impact margins it will be worthwhile reviewing your product ranges to find affected products as it may influence on where you source affected products in future.

For more information on the Commissions findings click here

If you need any assistance on classification or origin issues with your products please feel free to contact us