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Manufacturer custom fees issue.

HenryTheGreat

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Apr 11, 2018
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Good day!

Im writing this post, because im really struggling.
I ordered a vending machine from abroad. Everything good with that. The struggle is with the payment terminal which needs commissioning etc. I sent it via DHL as temporary export/import to avoid customs fees. They said that they cannot receive the goods due to immensive amount of paperwork and requested me to redeclare the package as normal private package. And to avoid custom fees also change the value of the package to less amount. Everything worked except changing the value and they had to pay high customs fees anyway and they want me to cover these fees, which i do not find fair, since it is their failure to receive goods.
My question is: How is the most pollite/ diplomatic way to try to make them pay those fees, or at least split the fees? Im already writing three days this email and still struggling to come up with something good enough. Only thing i did so far, i asked to explain the reason why i am the person to cover these fees.

Thank you all in advance for your time.
 

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MitchM

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Wait - so you’re importing something, right?

I may be ignorant here, but in my time importing products I have always assumed responsibility for covering duties.

Are you expecting the supplier to cover these? I don’t really understand.
 
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HenryTheGreat

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Read Millionaire Fastlane
Apr 11, 2018
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Im not really importing.
I sent them a device for calibration. And they should send it back when this job is done.
Since it is a expensive piece of equipment i declared it as temporary export/import. This will avoid the customs fees. They failed to do the neccessary paperwork and paid the duty. Now they want me to cover customs fees.
I need some negotiation tactics advice to make them pay this.
I see no other outcome here that i have to pay it myself, because they have my equipment etc...
But maybe tou guys have some ideas i could try?
 

MitchM

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Im not really importing.
I sent them a device for calibration. And they should send it back when this job is done.
Since it is a expensive piece of equipment i declared it as temporary export/import. This will avoid the customs fees. They failed to do the neccessary paperwork and paid the duty. Now they want me to cover customs fees.
I need some negotiation tactics advice to make them pay this.
I see no other outcome here that i have to pay it myself, because they have my equipment etc...
But maybe tou guys have some ideas i could try?
Interesting, I have no experience doing a temporary export/import.

Is it currently being charged by the full value of the goods due to the failure with the paperwork?

Also, if you've already paid them and you have nothing particular in writing - I'm not really sure where you would have the leverage to get your equipment back without either paying the fees or smoothing things over with those holding you responsible to the fees.
 

Walter Hay

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Im not really importing.
I sent them a device for calibration. And they should send it back when this job is done.
Since it is a expensive piece of equipment i declared it as temporary export/import. This will avoid the customs fees. They failed to do the neccessary paperwork and paid the duty. Now they want me to cover customs fees.
I need some negotiation tactics advice to make them pay this.
I see no other outcome here that i have to pay it myself, because they have my equipment etc...
But maybe tou guys have some ideas i could try?
I doubt that you will have any hope of recovering the duty paid. The importer cannot obtain exemption without proper documentation, and in some countries there is no way to declare a temporary import. I am assuming the country where you bought the item is China?

You should have arranged appropriate documentation in advance, so that they could claim it as a temporary import. The proper documentation is known as a Carnet. (Pronounced as CarNay). The type of Carnet accepted by China since the beginning of this year is known as an ATA Carnet.

Carnets are purchased from companies specializing in these Customs guarantee documents. Cost varies according to the value of the item. It generally ranges between $200 and $400.

The bad news for you is that unless your supplier provides a carnet or you buy one, you will almost certainly pay duty again when the item arrives in your country.

The only hope I can offer to minimize your losses is to consult a Customs Broker who might find a way for you to make a declaration that will enable you to avoid paying that second lot of duty. Of course if the duty will be less than the cost of a Carnet, you will just have to pay the duty and cut your losses.

For the benefit of other readers I suggest that before venturing into DIY sourcing and importing, the very least you should do is read through my AMA GOLD! Sharing my lifetime experience in export/import. Product sourcing specialist. Or if you want more complete education you might consider whether my book will provide you with a good ROI.

Walter
P.S. NEVER under declare the value of goods.
 
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HenryTheGreat

New Contributor
Read Millionaire Fastlane
Apr 11, 2018
5
1
16
I doubt that you will have any hope of recovering the duty paid. The importer cannot obtain exemption without proper documentation, and in some countries there is no way to declare a temporary import. I am assuming the country where you bought the item is China?

You should have arranged appropriate documentation in advance, so that they could claim it as a temporary import. The proper documentation is known as a Carnet. (Pronounced as CarNay). The type of Carnet accepted by China since the beginning of this year is known as an ATA Carnet.

Carnets are purchased from companies specializing in these Customs guarantee documents. Cost varies according to the value of the item. It generally ranges between $200 and $400.

The bad news for you is that unless your supplier provides a carnet or you buy one, you will almost certainly pay duty again when the item arrives in your country.

The only hope I can offer to minimize your losses is to consult a Customs Broker who might find a way for you to make a declaration that will enable you to avoid paying that second lot of duty. Of course if the duty will be less than the cost of a Carnet, you will just have to pay the duty and cut your losses.

For the benefit of other readers I suggest that before venturing into DIY sourcing and importing, the very least you should do is read through my AMA GOLD! Sharing my lifetime experience in export/import. Product sourcing specialist. Or if you want more complete education you might consider whether my book will provide you with a good ROI.

Walter
P.S. NEVER under declare the value of goods.
Good day all and thank you all for replies.

I have solved the issue and this post is to clarify situation and lessons learned. Hopefully someone will find it useful.

The device was intended to send from EU to Ukraine for servicing — I send it to them and after service they will return it.
Therefore i used broker to declare it as temporary export/import. Which means when the goods arrive tto UA, duty is not required to be paid and when delivered back to EU Duty is not required to be paid. Therefore special declaration has to be made, which was done by my broker.
When the goods arrived to UA, the receiver failed to do needed paperwork and Customs fees had to be paid.
From here, the lesson i learned: No prior agreement was made, who will cover this sum. From the other side, the shipment was declared as DDP, so theoretically it should be me to cover the fees. But there is a but. Since the declaration was made as temporary import/export which assumes no import tax and they failed the paperwork, Im not sure if incoterms apply in this case or not. At least my side was done properly.
I should have made a prior agreement, who will pay the duty and then approve their action.
Final word:
I settled the situation by paying the fees to maintain good business relationships with them and consider this sum as school money.

Thank you all for your time reading this.
 
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