The Fashion Industry & Customs

Compliance is always a hot topic when it comes to customs and fashion, with real financial, operational, and speed advantages waiting to be unveiled by the brands that get it right.

At Customs Support Group, we help some of Europe’s best-known brands stay complaint from factory floor to final delivery. With our bold combination of digital and real intelligence, we create a seamless customs experience whether you are shipping clothes, jewellery, shoes, hats, or the millions of items that come under the umbrella of fashion.

In this article, we cover how our specialised solutions help you with common compliance challenges so that you can avoid disaster.

Contents:

• Challenge #1: global classification for a large range of products
• Challenge #2: returned goods and duty reclaims
• Challenge #3: constantly changing requirements
• How Customs Support Group helps you stay compliant across Europe

Challenge #1: Global Classification for a Large Range of Products

Being clear on goods classification is a big challenge for the global industry, with hundreds of commodity codes that fashion items can be classified into. Just one different number in your commodity code can mean a significant increase for your payable duties, or even delays at the border if you mis-classify a product.

What’s more, the same item can attract completely different commodity codes from one territory to another, or be subject to different requirements – even from the same origin.

As the single most important customs data element, classification matters. And yet, simple mistakes are easy to make. Luckily, CSG is here for you.

CSG Accurately Classifies Millions of Items a Year

In our Maldon office alone, we did more than 7.5 million UK classifications and 5.6 million US classifications in 2023. Imagine trying to do that volume without technology or clean data; it would be impossible!

So, how do we do it? In a word, digitalisation.

As a leading provider of customs and trade solutions, we leverage artificial and real intelligence to maximise your efficiency without cutting corners. Our specialists help you to:

• Avoid customs audits and supply chain disruption: Our advanced planning and optimisation (APO) solution allows us to quality check data before it enters our duty management process – proactively correcting discrepancies before they are problems.
• Auto-classify your goods: Save time and money by working with the solution’s guided process that combines information from the importer with real input from an operative. This tool alone has saved our clients thousands of hours and reduced costs.
• Maintain efficiency at scale: Several years of real use have gone into our APO and supplementary tools, with each upgrade refining the process based on client feedback. No matter how many products you have our world-class automation won’t let you down.

More than Classification, Our Solution Provides Data Enrichment at Scale

Our APO provides visibility over your whole supply chain. Not only in real time, but also from a reporting point of view. We can filter and collect data from warehouses and ERP (enterprise resource planning) systems, track the duty status of goods and more. The system’s ability to knit (or weave) together information from different places is extremely useful in some cases.

For example, we have a client who exports from the UK to Ireland. They send us the file from their ERP system, our system matches up the stock records with what is held in the duty management system and then completes the entry file. This is then automatically sent to all the parties who need visibility of the declaration for the movement.

It’s because of the work with database enrichment and digital integration that this process can be practically seamless. Contact us to find out how we can do the same for you.

Challenge #2: Navigating Stock Levels for Fashion Trends and Returns

Demand for fashion items comes and goes across Europe, and stock that is in one territory may need to be moved to another – and possibly back again.

Within the EU, you may need to manage Intrastat declarations, but across the borders of the EU, UK, Norway, and Switzerland? There’s the requirement for multiple customs clearances, potential for double duty payments, and an all-round compliance headache if the process isn’t managed well. Essentially, time and money that can be wasted unnecessarily.

Thankfully, CSG can help you with several solutions. In conjunction with our APO above, we can also leverage:

Customs Warehousing

Using a customs warehouse means that you can suspend paying import duty and VAT until you need the goods to enter free circulation, providing flexibility and improving cash flow.

If the goods go to market, you can pay the duty as normal to release the goods from bond. If you want to export them, then you don’t pay the duty and simply export them. You can repeat this process in each territory until you decide the goods are to be sold.

Duty Reclaims

Since Brexit created a unique compliance environment between the EU and UK, we have built a system around the particular challenge of exporting returned items so that our clients can avoid unnecessary duty payments.

Now, around 50% of our UK retail clients save money with us this way.

The keys to successfully reclaiming duties are having visibility of the opportunity, having the right circumstances to apply for a reclaim, and providing the right information to the authorities in an easy-to-approve format.

If you are not compliant when applying for reclaims, then there will be a problem when the authorities come to audit the thousands of movements you’ve done.

It’s a real fear that retailers have, and one we successfully help to alleviate.

Simplified Customs Procedures (Not Available in All Countries)

We work with many retailers using simplified customs procedures, meaning that we only enter a small dataset on the import clearance and reconcile everything at the end of the month.

This means that you can bring your goods in quicker, and there are also cash flow and accounting benefits when it comes to paying your import duty – even if you pay it at the time of reconciliation and don’t combine this procedure with customs warehousing.

Challenge #3: Constantly Changing Requirements

From commodity codes to the rules of preferential origin, customs is always evolving. A change in a Free Trade Agreement (FTA), a new sustainability directive, or an increased duty rate can all become a financial problem if they aren’t spotted before arrival at the border.

And across thousands of products, keeping on top of it all can be time-consuming, expensive, and inefficient if you are not leveraging the right people and tools.

One of our core functions at CSG is to keep clients ahead of the curve when it comes to changing classification, running checks on codes to highlight problematic products and establishing what the implications are ahead of arrival.

In this way, we help our clients prevent nasty surprises and minimise unexpected financial burdens.

For example, we had a client in the UK who held a large amount of goods under bond. Their product was duty-free from India, but this preference was being removed and a duty rate would be applicable from the next month. We quickly worked with them to ascertain that the goods were meant for the UK as the final destination, and released the goods from bond before the import duty became live – saving them a considerable sum.

Other ways in which we help with compliance are our close connections with authorities and visibility on changing circumstances. Our teams are well-connected with their local authorities – putting us in a position to receive information quickly and to ask the right people for guidance when we need it.

How Customs Support Group Helps You Stay Compliant Across Europe

Available throughout the EU, UK, Norway, and Switzerland, CSG is your trusted partner for fashion customs across Europe.

Here are a few of the ways we help you to remain compliant and unlock the financial benefits of an efficient customs function:

• End-to-End Customs Clearance: Avoid delays and keep your data clean with customs representation on both sides when moving goods between the UK, EU, Norway, and Switzerland.
• Duty Management: From helping you leverage customs procedures to understanding your procurement from a customs perspective, we help you to be more cost-efficient throughout the entire customs process whilst maintaining flexibility.
• Digital Efficiency: Streamline your processes and create a comprehensive database that covers your blind spots and holds the information you need at a glance – allowing you to make quicker decisions, safeguard your compliance, and save money.

If you are from a fashion or retail brand and you think ‘Okay, where do I start?’, here is a simple overview of how we can welcome you onboard.

The first thing we do is a customs health check, which we call a customs compliance scan. This is where we look into what you are doing, where there are shortfalls in terms of procedures and compliance, and create an action plan so that we can reduce your risk and create opportunities to save money.

Partner with Europe’s leading customs experts and unlock the insight, efficiency, and flexibility you need to enhance your fashion supply chain. Contact us to get started.