As small and medium enterprises (SMEs) expand their businesses and explore new markets for their products, many begin to consider exporting to the European Union (EU) and its Member States. Since the EU is treated as a single market with access to 28 Member States (of which, 19 share the same currency), the potential market access is appealing. This is very applicable within the agriculture and food technology sector, which was estimated to be $2.4 billion dollars in 2013. However, the export process can be challenging as each Member State retains the right to dictate their own tax, importation laws and fees on all imported products.
The goal of this blog is to provide an overview of some of the requirements you will be asked to comply with when exporting to the EU as well as some of the available resources that may assist you and your company throughout the export process.
Every importable product within the EU has a specific Combined Nomenclature (CN) code, which is comprised of 10-digits. The first six digits are specific to the product code system implemented globally, known as the Harmonized System (HS) (sometimes referred to as a Taric code). The product CN code, which is specific to only the EU, is required to be present on all exporting documents as it indicates whether or not the product can enter the target Member State and what importation fees are placed on the product. To classify your products’ HS and CN codes, the EU Taxation and Customs Union and the Canada Post websites, are great resources for doing so. Some products may be harder than others to classify due to the nature of the product and in these situations contacting a Customs Trade Commissioner might be the best solution. They can be contacted at any time to assist you in obtaining the correct CN number for your product, as well as guide you through the exporting process and answer any additional questions you may have about exporting in general.
To find your products HS code, follow the provided link.
Once you have obtained the correct CN code for your product, you are able to use the EU’s Taric system to determine the EU importation restrictions and tariff fees (importation fees and associated taxes) placed on your product in each EU Member State. This is exceptionally helpful in determining which EU countries you may consider expanding to first, as well as what additional export documentation may be required to do so. In addition to the product CN code, all products exported to the EU must also be accompanied by a commercial invoice, detailing the items packaged in the shipment; a CETA Declaration of Origin; a B13 Export Declaration Form, if the product is valued over $2000 CN, and any other supporting documents that may be required on a Member State-specific basis. The commercial invoice containing all of this information can either be self-created or can be generated by regulatory and compliance company who specializes in exporting.
Furthermore, many companies and treaties have been established to assist SMEs with successfully exporting their products to the EU. To name a few:
The Comprehensive Economic and Trade Agreement (CETA) is an established free-trade agreement between Canada, the EU, and its Member States that allows almost all products to receive a reduced (and sometimes zeroed) tariff, minimizing the costs associated with exporting.
Export Development Canada (EDC) was also established to provide small companies with insurance and financial assistance when exporting to new markets by providing access to more capital during the process.
Other industry-specific initiatives exist as well, for example, the Canadian Food Exporters Association (CFEA) assists companies in the food, beverage and ingredient product industry to increase their total export sales through improved marketing and business strategy development.
Although exporting to the EU can be complicated, knowing your products CN and HS code, properly preparing the export documentation, understanding the services and programs available to assist you through the process and having a general understanding of the EU export landscape will greatly simplify the process.
The Canadian Trade Commissioner Service
Agriculture and Agri-Food Canada
Junior Analyst, Escarpment Labs
Bioenterprise Recent Graduate & Mentorship Program