Care needed with offshore DCs say lawyers

Customs implications of using such facilities can be overlooked

Care needed with offshore DCs say lawyers
Customs implications should be taken into acount

International supply chain providers could be exposed to compliance risks through their offshore distribution centres (DC), a low firm notes.

According to Hunt & Hunt lawyers, supply-chain cost savings of offshore DC use bring with them the possibility of exposure to Customs non-compliance that may negate the financial advantage.

In an alert to customers the lawyers say they are "increasingly seeing sophisticated supply chains being set up without enough attention being given to the Customs implications.

"Not only does this result in reduced levels of customs compliance, but may also result in customs duty being overpaid."

Offshore DCs can receive goods from multiple suppliers and coordinate consolidation and distribution for shipment to one or more countries.

Advantages include ensuring full container loads, or to bypass or shorten the domestic supply chain and in some cases may may perform a buy and/or sell or ordering function in addition to value add services, such as attaching pricing tags or labelling cartons.

Pitfalls to be wary of include:

  • incorrect use of free trade agreements
  • use of incorrect Customs value, especially in buying and selling
  • reporting of incorrect information to Customs.

The full advisory can be found here.

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