I am sure you have heard the phrase ‘Proof of Export’ frequently in your studies and when performing your job, we hope you hear it on a daily basis.
But consider this, do you know what it really means and the implications of not having a full proof of export file?
On a scale of 1 to 10 consider the following
|I do not know I have some idea and think I know for certain what it is My company is compliant Company is compliant referring to|
|1 to 3 4 to 6 7 to 10|
Based on your knowledge and learning how would you rank your understanding on a scale of 1 to 10?
Thinking about this differently where do you think your company is on a scale of 1 to 10 in evidencing proof of export:
- if you have an audit tomorrow where would your company rank
- if you are asked for evidence going back 3 years would your ranking change?
Let us consider why proof of export is important:
- The Customs authorities want evidence that the goods have left the frontier of the UK correctly (legitimate trading, valuation, origin, classification code and exports to a legitimate source)
- There is also VAT to consider (zero rated VAT requires valid proof of export)
- Export credit insurance companies are unlikely to pay a claim for non-payment or late payment (protracted default) unless there is valid proof of export
We are sure that you already know the requirements of proof of export relative to points 1 and 2 above (if not please review the learning). However no matter how much we say it is important we frequently come across instances where there is not a valid and full file – notably the goods departed message is not in the file, and the transport document is not in the file (in particular for air freight!).
You will see above mention of export credit insurance. Finance, payment risk and export credit insurance are outside of the scope of the UK Customs Academy Learning however you should take the time to consider how your company manages payment risk. You can perform your function as efficiently as possible, but you still need to get paid!
- Is your department and the finance department working together to ensure a full and successful export operation?
If you would like to hear more about payment risk, please let us know.