International parcels specialist ParcelHero is warning that the immediate consequence of Greece crashing out of the Euro and the European Union (EU), would be increased delivery fees and higher import costs.
Warns ParcelHero’s founder, international courier expert Roger Sumner-Rivers: ‘If Greece exits both the Euro and the European Union it will have no choice but to impose new excise duty, import VAT and possibly border controls. A go-it-alone Greece will have to set its own rates of excise duty and import VAT for imported products, and establish customs controls, just as fellow European EU outsiders Norway and Switzerland do currently. If this were to occur, businesses and customers will be subject to customs charges (and delays) when receiving and sending goods.’
Explains Roger: ‘The short-term impact this would have is concerning, as businesses and consumers would be forced to adapt rapidly to these new measures. Furthermore, there would be considerable strain on Greece’s Customs and Excise service, until it was able to sufficiently “scale up”’, which could result in a backlog of goods awaiting clearance.’
Continues Roger: ‘It is likely that a stand-alone Greece would immediately follow the example of those other European EU outsiders, Norway and Switzerland. They belong, together with Iceland and Liechtenstein, to the European Free Trade Association (EFTA). If Greece joined EFTA, it would then need, through the Association, to negotiate Free Trade agreements with other countries.’
Roger adds: ‘Further, if Greece were to find itself outside both the European Union and organisations such as EFTA, even for one day, it is probable that it would have no choice but to act immediately to ensure controls were put in place to apply duty and tax to products imported into the country. Were Greece to introduce border controls, it could have huge implications for business. A courier delivery from the UK to Greece currently costs less than £20, whereas if the country leaves the EU, and controls were in place, this could easily spiral by 15% or more, affecting businesses large and small, on both sides of the border.
‘If the sender chooses to pay the customs duties and taxes in advance – a popular choice for ParcelHero customers mailing gifts who don’t want the receiver to have to pay them – the standard customs clearance charge applied by UPS, DHL, FedEx and TNT for importing goods from a non-EU country is at least £15.
‘And the costs don’t finish there,’ says Roger: ‘If Greece does leave the EU, we have only to compare its costs to those of Norway and Switzerland in order to understand the implications for its economy. For example, Norwegian customs authorities may charge duties and taxes on your goods upon import. Although Norway is part of the EEA, and therefore the single market, businesses must complete customs and VAT forms when goods are shipped into and out of the EU.’
This has implications for British exporters, warns Roger: ‘Even for big companies, this is a significant cost and administrative burden, for smaller ones it can be a huge barrier to trade, and SMEs will often steer clear of trading with Norway. Even if they don’t, the additional duty and excise costs make their products uncompetitive. ParcelHero’s partner carriers such as DHL Express and UPS allow for this extra level of bureaucracy and warn customers of potential extra import charges.’
Finally, Roger says Greek imports into the UK may well rise in price. ‘Greece’s exports to the UK amounted to $1.3 billion last year. Perhaps surprisingly, its chief export into the UK is pharmaceuticals. We buy $176.3m of medicines and related items a year from Greece. Next, as you might expect from the land of olives and honey, we spend $114.3m on vegetable and fruit preparations and $102.9 million on Greek dairy products, eggs and honey. Import duty would be payable as the goods enter the UK.’
Concludes Roger: ‘Higher shipping costs are just one of the implications of Greece’s potential departure from the EU and Euro. It is to be hoped that a way forward can be found for Greece and the EU that does not lead to increasing costs to UK businesses seeking to trade with Greece.’