The specialists at International Trade Matters have advised UK companies on the technicalities of importing and exporting all kinds of products, from human hair to potato chips and cosmetics to helicopter components. Global Operations & Supply Chain Specialist, Lindy Stacey has recently been delivering guidance on the import and export of Cannabidiol (CBD) products, looking at the challenges and considerations and how to approach them.
What is CBD and what has changed since Brexit?
According to the Food Standards Agency website; “CBD is one of many chemicals called cannabinoids. It is found within hemp and cannabis. CBD extracts are being sold as a food and as food supplements in the UK. They are widely available in shops, cafés and for sale online. CBD sold as food, or as a food supplement, includes; oils, drops or tinctures, gel capsules, sweets and confectionery, bread and other bakery products and drinks”Food Standards Agency accessed 13th November 2021
When the UK was part of the European Union (EU), it appreciated the free movement of goods with other EU member states. Since the UK left the EU the already somewhat complicated world of importing and exporting CBD products has become a lot more complicated!
Shipping, customs, tariffs, and novel food regulations are just some of the added obstacles UK CBD manufacturers and suppliers now face.
Novel Food Regulations, what does this mean?
CBD extracts have, what is called ‘novel food status’, which is given to foods that have not been widely consumed by humans in the EU before May 1997, under Novel Food Regulation EU 2015/2283. This means that the foods don’t have a ‘history of consumption’ apart from CBD foods where the CBD is derived from cold-pressed hemp seed oil, these are excluded from novel food regulations.
Food businesses must apply for authorisation for their CBD extracts and isolates to be placed on the GB market by using the regulated products application service applied by the Food Standards Agency. If you are in Scotland, you need to apply through Food Standards Scotland and if you are in Northern Ireland you need to apply through the European Commission.
Importing and exporting CBD products: what you need to know
How to prepare for importing and exporting CBD products
- Ensure you have a registered UK Company, with a UK bank account and obtain an EORI number if you don’t already have one.
- Obtain a licence to import and export if needed, refer to the HMRC controlled drug licence to find out if one is required.
Consider a letter of compliance from a lawyer that defines the products labelling and certificate of analysis has been reviewed and is compliant with regulatory requirements.
- Know your Incoterms® rules
An internationally recognised set of rules from the ICC governing the journey of goods, to understand the related costs, risks and obligations of both buyer and seller.
- Understand and apply Rules of Origin to establish the commercial nationality of your goods so the correct duties are applied.
- Identify the correct tariff code for your products, if you are exporting, consider applying for a legally binding tariff decision from HMRC.
If you don’t have a legally binding tariff, make sure you sign up to notifications to ensure you are aware of any changes to the tariff codes you have applied to your products.
- If you are VAT registered, ensure you use postponed VAT accounting.
This will ease cash flow by accounting for VAT on your next return rather than paying at the time of the import, this provides easier record keeping and removes payments to transporters.
- Identify and use an experienced shipping agent and ensure you have representation for any inspection requirements at the designated border control points if required.
Consider using smaller shipping agents who have experience and knowledge in the CBD industry.
What else should you think about when importing or exporting CBD products?
Remember that each country has its own set of rules and laws, therefore it is essential to ensure you research and understand specific requirements before you attempt to export products into them.
International Trade Matters can provide guidance and training, bespoke to your business to help you navigate this and other aspects of your international trade. We look forward to helping you!
Get in touch with Lindy and the International Trade Matters team to find out more: