Chamber News

The Export Control Organisation (ECO), part of the Department for Business, Innovation and Skills, has issued three new Notice to Exporters which provide an important update to all exporters about republication of the Control Lists and certain specified Open General Export Licences (OGELs).

Notice to Exporters 2012/25 advises all exporters that the “UK Strategic Export Control Lists: the consolidated list of strategic military and dual-use items that require export authorisation” has now been updated as of 15 June 2012. This follows the coming into force 30 days after publication of Council Regulation (EU) No 388/2012 which amends Annex I of the EU Dual-Use Regulation (Council Regulation (EC) No 428/2009).

All exporters of controlled goods now need to refer to the revised list published on 15 June when determining if they need to apply for an export licence for military or dual-use items issued by the ECO.

Notice to Exporters 2012/26 advises all exporters of the republication of certain dual-use and transhipment OGELs. If you are currently registered as holding any of the specified licences, you need to ensure that you take appropriate action (such as de-registering from the licence if necessary) as explained in further detail in the body of the Notice.

Notice to Exporters 2012/27 refers to thenews that the European Union has imposed new sanctions on Syria via Council Regulation (EU) No 509/2012. The sanctions came into force on 17 June 2012.

The sanctions measures include new prohibitions on the sale, supply, transfer or export of certain dual-use items and chemicals (such as protection and detection equipment and reaction vessels). There is also a licensing requirement on the sale, supply, transfer or export of certain dual use items that might be used for internal repression.

Prohibited items to Syria also include listed luxury goods (such as caviar, truffles, cigars, wines, spirits, leather goods, table and glassware, clocks, watches and luxury vehicles). If you trade with Syria in any of the prohibited or licensable items you should take time to inform yourself of these sanctions and take steps to comply with the restrictions.

The European Parliament’s International Trade Committee has endorsed four agreements with Russia that give the EU exclusive trading benefits.

The new deals cover Russian wood exports, trade in car parts, duties on raw materials and the services market. They pave the way for Russia to join the World Trade Organization (WTO).

The four bilateral agreements, which need Parliament’s consent to enter in force, are in fact more favourable to the EU than they have to be under WTO rules. The plenary vote by the European Parliament is expected in July.

Russia should then join the WTO by the end of the summer.

The deal on tariff-rate quotas for Russian exports of wood will boost the supply from Russia, which has agreed to cut export duties from current levels and grant the EU relatively large quotas for lower-duty Russian exports. The agreement defines the rules for applying these quotas and prevents Russia from applying unpredictable increases to export duties, which have affected many EU producers in the past.

The deal on car components protects EU auto part companies hit by Russian measures that will remain in force until 2018, even after Russia joins the WTO. These measures give foreign auto manufacturers incentives to relocate to Russia, and could discriminate against Russian imports of foreign car components.

Russia has also agreed to binding export tariffs for 80% of the raw materials it exports.

The remaining 20% are materials of strategic importance for EU industries. Under the deal, Russia will consult and negotiate with the EU at least two months before it plans to increase export duties on the products listed in the agreement.

This list includes agricultural products such as wheat, sunflower seeds, tobacco, animal skins, wool and cotton and a large number of earths and minerals.

Finally, the agreement on trade in services grants new opportunities for EU maritime transport agencies seeking to set up in Russia. It gives preferential access to people working for European services companies who need to work in Russia in order to start a business there.

The EU foresees a minimum quota of 16,000 work permits per year in this context.

Concerns that the current economic situation might be encouraging countries to turn towards protectionism have been highlighted by the European Commission in its latest report on potentially trade-restricting measures.

It identifies what it describes as a staggering increase in such measures in the last 8 months, with 123 new restrictions introduced – a rise of just over 25%.

This brings the total number of restrictive measures in place to 534. The Commission argues that this represents a failure by the G20 countries and called on them to do more to prevent the introduction of new barriers to trade, and to rectify protective measures introduced since the start of the current crisis.

Trade Commissioner Karel De Gucht said: “Let us remind ourselves that the G20 pledged to end such practices and that protectionism benefits no-one. It sends the wrong signal to global trading partners, it sends the wrong signal to investors and it sends the wrong signal to the business community, which relies on a predictable business climate.”

Between September 2011 and 1 May 2012, the roll-back of measures slowed down: only 13 measures have been removed, compared to 40 measures between October 2010 and September 2011.

Overall, only about 17% (89) of the measures have been removed or lapsed since October 2008.

Russia deserves close scrutiny, according to the Commissioner, as one of the most frequent users of trade-restrictive measures, especially as these may not conform with its obligations as an upcoming member of the World Trade Organization.

The report covers 31 of the EU’s main trading partners, including the G20 countries: Algeria, Argentina, Australia, Belarus, Brazil, Canada, China, Ecuador, Egypt, Hong Kong, India, Indonesia, Japan, Kazakhstan, Malaysia, Mexico, Nigeria, Pakistan, Paraguay, Philippines, Russia, Saudi Arabia, South Africa, South Korea, Switzerland, Taiwan, Thailand, Turkey, Ukraine, the USA and Vietnam.

The findings of a survey by the British Chambers of Commerce (BCC) show that existing regulations and problems around accessing credit are hindering export growth in the UK.

The survey of more than 8000 businesses shows that nearly two-thirds of potential exporters (63%) see access to finance issues as a reason not to trade overseas, while a quarter of companies believe that red tape, such as that associated with export licenses, is a barrier to doing so.

Furthermore, nearly three-quarters of companies that are already exporting have failed to put an export strategy in place.

With the domestic economy almost flat, however, exporting is seen as an important route to growth for companies and nearly half (44%) of respondents said they would be more likely to consider exporting if sales revenues deteriorated.

The BCC is calling for the creation of a business bank and for improvement in the service offered by existing banks to address issues around access to finance. In addition, it argued, high street banks should train front line staff to be able to explain state-backed financial products to their business customers.

It also wants to see more businesses encouraged to proactively pursue export opportunities and, to this end, would like a variable fee system to be introduced within the Overseas Market Introduction Service, which is operated by UK Trade and Investment.

If this was based on company size, the BCC suggested, it would prevent smaller firms from being crowded out.

BCC Director-General John Longworth said: “The Government can make some simple changes which will go a long way to giving firms the confidence and encouragement they need to trade overseas. Incentivising more firms to take part in trade missions would be a start to getting more companies thinking about adapting their products for the export market.”

Commenting on the proposals to reform collective redundancy prcedures announced by Norman Lamb today, Caroline Williams CEO Norfolk Chamber said:

“As they stand, the UK’s redundancy rules are outdated and damaging to Norfolk firms. Consulting for a quarter of a year to change the direction of a business is unnecessary and out of step with the modern world. Instead of thresholds and processes, the rules should encourage firms to focus on quality consultation with staff, and enable fair decisions in a swift timeframe. A shorter compulsory period of 45 days would allow quicker decision-making where the survival of the business could be at risk, such as following the loss of a major contract.

“Redundancy is always a last resort, but is sometimes necessary to save other jobs or prevent the business from failing. When tough decisions are necessary, businesses must be assured that the redundancy consultation process can be carried out efficiently, rather than being drawn out in a way that increases uncertainty for employers and employees alike.”

Measures to make the international system of patent application faster and more effective were announced today by the UK Intellectual Property Office (UKIPO) with changes to the UK’s Fast Track system. These moves come as part of a wider effort by the UK and US intellectual property authorities to get more businesses to use the PCT system.

The UK’s Fast Track system, originally introduced in June 2010 with the aim of getting business’ patents granted faster and more cheaply, will now give applicants the chance to make changes to an international application, and still have the opportunity to request accelerating processing in the UK. This change removes a bureaucratic hurdle and increases the flexibility and accessibility of the patent application process.

Click here for further details.

The UK’s best and worst locations for doing business effectively have been revealed by a new survey from the Forum of Private Business (FPB). Energy costs and access to effective telecommunications top the list of infrastructure issues for small firms.

The survey, “Infrastructure for Growth”, found that, overall, 74% feel their location is effective for their business needs, with the key factors being their proximity to good road networks (16%), their centrality (14%) and their footfall (9%).

As far as geographical location is concerned, 79% of business owners in the North West feel their location is effective for their company, 78% in the South West, 76% in the Midlands, 75% in Wales, 75% in the East of England, 74% in London, the North East and Yorkshire, 67% in the South East of England and 65% in Scotland.

The survey also found that 80% of respondents thought energy costs are an extremely important infrastructure issue and 80% also cite the importance of telecommunications and broadband access. Working down the list, 75% believe the reliability of the energy supply to be a key issue, 73% feel local banking services are key and 65% cite local roads. The next priorities are post office services (60%), mobile communications (59%), the motorway network (56%), the provision of skills training (46%), waste services and recycling (41%), e-communications (32%) and rail transport (23%).

When asked what infrastructure-related problems should be prioritised by the Government, most business owners identified business rates (52%), followed by measures to boost consumer and business confidence (49%), health and safety regulations (45%), utilities costs (44%), tax policies (44%), other regulations (42%), reducing employment law (40%), and late payment and debt (28%).

The European Commission has launched a challenge at the World Trade Organization (WTO) in Geneva to Argentina’s import restrictions.

Under WTO dispute settlement procedures, the EU is first requesting consultations with Argentina in a bid to have these measures, which negatively affect the EU’s trade and investment, lifted. This is a first step in the WTO dispute settlement system.

If no solution is found within 60 days, then the EU can request a WTO Panel to be established to rule on the legality of Argentina’s actions.

The restrictive measures include Argentina’s import licensing regime, notably the procedures to obtain an import licence as well as the obligation on companies to balance imports with exports.

EU Trade Commissioner Karel De Gucht explained: “The trade and investment climate in Argentina is clearly getting worse. This leaves me no choice but to challenge Argentina’s protectionist import regime and ensure that the rules for free and fair trade are upheld.”

Argentina subjects the import of all goods to a pre-registration and pre-approval regime, called the “Declaración Jurada Anticipada de Importación”. Since February 2012, this pre-approval requirement is applied to all imports.

Hundreds of goods also need an import licence.

On the basis of these procedures, imports are systematically delayed or refused on non-transparent grounds. In early 2011, more than 600 product types were affected by this licence regime, such as electrical machinery, auto parts and chemical products.

Moreover, Argentina requires importers to balance imports with exports, or to increase the local content of the products they manufacture in Argentina, or not to transfer revenues abroad.

This practice is systematic, non-written and non-transparent. Acceptance by importers to undertake this practice appears to be a condition for obtaining the licence that allows imports of their goods.

The Government has introduced legislation promising to encourage long-term growth, although some of the country’s leading business organisations seem, at best, to be taking a wait-and-see attitude to the new proposals.

Presenting the Enterprise and Regulatory Reform Bill to Parliament, Business Secretary Vince Cable said: “Growing our economy out of a period of acute crisis is the most pressing issue for this Government. We want to make sure the right conditions are in place to encourage investment and exports, boost enterprise, support green growth and build a responsible business culture.”

The Bill includes provisions to change the employment tribunal system by encouraging parties to come together to settle their dispute before a tribunal claim is lodged, through Acas early conciliation and greater use of Settlement Agreements.

It also aims to make the determination of less complex disputes quicker and cheaper for employers and employees alike, through a new “Rapid Resolution” scheme. Taking away the fear of employment tribunals will give business more confidence to take on new staff, the Government said.

The Bill will also address the disconnect between directors’ pay and long-term company performance by giving shareholders of UK-quoted companies binding votes on directors’ remuneration.

It will also reduce inspection burdens on businesses of all sizes and increase SME access to “reliable, consistent advice” on complying with regulations in areas such as trading standards, health and safety and environmental health.

The Bill has not been well-received by the Institute of Directors (IoD) with Alexander Ehmann, Head of Regulation and Employment Policy, describing it as disappointing.

“It signals another missed opportunity for the Government,” he said. “In a week where Adrian Beecroft’s report has dominated the news agenda, the gap between government rhetoric and actual deregulation is all too obvious.”

For the CBI, Chief Policy Director Katja Hall said that it was light on detail in some key areas.

“Companies will judge the Government’s progress by what changes in their business on the ground,” she said. “So far, there has been too little progress in too many areas, with the Government’s intended changes yet to filter through.”

HMRC has been blasted for the length of time that callers have to wait before they get through to someone on the organisation’s helpline numbers.

The Low Income Tax Group undertook a mystery shopping exercise of three HMRC helplines in the week after Easter – the first of the new tax year – and it revealed that each caller was kept on hold for an average of 30 minutes before it was answered. The group also said it had reports of member clients hanging on the phone for up to an hour.

It says that over recent years, HMRC has consistently failed to answer their telephone helplines within a reasonable time-scale. It points to the halcyon days of the Inland Revenue back in 1997/98 when it vowed to answer a call within 30 seconds 91% of the time.

But now, according to the LITRG, callers “can spend four times as much time pushing buttons before you even get in a queue”. It said the subsequent wait can then be excessively costly for callers on a low income, especially as many rely on PAYG mobiles.

It carried out its “mystery shop” on Tuesday 10 April 2012 and made three calls using the routes taken by an ordinary PAYE caller, a pensioner and a tax credit claimant. On average, the wait was 29 minutes. On a PAYG mobile that could have cost £11.60 per call, which could equate to half a day’s income for a pensioner.

An HMRC spokesman said: “HMRC handles around 60 million telephone calls every year. During busy periods, there will be times when customers will find it more difficult to get through. We are working hard to improve contact centre service levels and have made good progress. We are managing busy periods better by deploying extra people to deal with short-term increases in demand.”

He added that the week after Easter was an exceptionally busy week, and typical call volumes can vary from 750,000 to 1.7m in any given seven-day period, so it was “very hard to forecast”.

“We are sorry if anyone has been kept waiting, or could not get through over the last couple of days, but we are getting back on top of things”.

Further details of the mystery shop exercise can be found on the LITRG website

Air freight markets slumped sharply in the first half of 2011, bottoming out towards the end of the year. However, various distortions and month-to-month volatility have continued to mark performance since the beginning of 2012.

According to the International Air Transport Association (IATA), things may finally be taking a turn for the better.

Tony Tyler, IATA’s Director General and CEO, said after viewing the latest figures that, amid the many distortions that have marked the first four months of the year, it is possible to identify the start of a growth trend in cargo for some parts of the world.

“But economic uncertainty in Europe makes it very difficult to be optimistic in the near to medium-term,” he warned.

Asia-Pacific carriers saw a 7.3% decline in demand in April, well ahead of capacity cuts of 4.1% and reflecting weakening exports from China.

Meanwhile, European airlines saw a 4.9% fall in cargo traffic compared to the year before, despite having cut capacity by 0.2%, and North American carriers showed a 6.4% drop in demand with a 2.9% cut in capacity.

Latin American carriers recorded a 3.6% fall in demand, even though capacity expanded by 8.8% compared to April 2011. Middle Eastern carriers were the bright spot in cargo with a 14.5% increase in demand, and even this was behind a 15.1% increase in capacity.

African carriers showed a 6.1% increase in demand, behind a 9% increase in capacity.

See what the Bank of England’s Agents think about business conditions in Norfolk and East Anglia and what they think is going to happen with consumer demand, investment, exports, employment and the housing market. Click here to read the full report.