New EU rules bring 'risk of paying huge duties', says shipper

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New EU rules bring 'risk of paying huge duties', says shipper

Moroccan officials have cried foul over changes to the Entry Price System for fruits and vegetables that will come into force on Oct. 13, but a European Commission spokesman told the new regulations would apply to all suppliers to the market, emphasizing they would do away with a pricing option that was "less transparent". Delassus Group marketing manager Fatiha Charrat is not convinced that transparency is the order of the day under the upcoming arrangement.

Charrat, whose company grows and exports citrus, cherry tomatoes, grapes and flowers, says her understanding of the new law is that it will impact consignment sales.

"Once a lorry of tomatoes comes to Perpignan (France) for example, its selling price is not often known in advance by the exporter. The receiver will have to sell it at market price and endeavor to get the upper price possible," she says.

"Once this is done, clearance of the lorry is completed based on the average selling price done on the greater lot. This is called the deductive method."

This is the current way that Delassus sells its products, but European Commission spokesman for Agriculture and Rural Development, Roger Waite, has confirmed deductive pricing will no longer be an option come October; at least not for those without preferential import quotas.

"From Oct. 1, clearance will be done automatically upon arrival based on the Standard Import Value (SIV) of the arrival day and not based on the effective selling price which is fixed some days after arrival of goods," Charrat says.

"If the SIV is negative you can still clear against the Delivered Duty Paid (DDP) invoice value, but the security deposit for duty will be based on the daily SIV and this could be catastrophic as duty could be higher than the cost of the product itself."

Charrat calls for more transparency in how the European Union calculates the daily SIV and urges EU officials to 'be temperate in the decision'.

Photo: Muffet, via Flickr Creative Commons

Photo: Muffet, via Flickr Creative Commons

"I assume the EU uses various EU markets to establish the SIV but we do not know which specific markets as this is a guarded secret to prevent market prices being fixed to influence the SIV," she says.

"At this moment we do not know the exact effects of this change as it appears at first glance to be no different to what we are currently doing.

"However, it does seem to imply that releasing the security could become more complicated as it appears they may be asking for the remittance advice, proof of freight costs (invoice) and credit notes for all shipments where a reduced value has been paid."

She says this could mean exporters will need to pay security deposits on the same day of arrival and not after selling is done.

"Moroccan exporters who use the consignment system will have no visibility on how the market will be on the day of arrival, thus there is a risk of paying a huge duty."

EU delegates arrived in Meknes, Morocco on April 23 for the Agricultural fair SIAM which goes on until May 3 Discussions, meetings, workshops and programs are planned. The Director-General of the European Commission’s Agriculture Department, Pavel Jerzy Plewa, will be among those attending.

Related story: Q&A: European Commission explains new Entry Price System for fruit & veg



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