B2B export from Malaysia to Europe

By January 14, 2016Money transfer

Malaysia as one of the top 20 Exporting nations worldwide (Source: WTO) has export earnings of around Malaysian Ringgit (MYR) 72.84 Billion in its trade with Europe for 2014. This was an increase of 11.6% from 2013. The main items exported by Malaysia to EU were Electronic and Electrical Equipment especially IC (Integrated Circuit) Boards. The top five major destinations for Malaysian exports to the EU were the Netherlands, Germany, the United Kingdom, France and Belgium. Other items which saw an increase in value were palm oil, chemicals, optical and scientific equipment, machinery, appliances and parts, transport equipment, textiles, clothing, and footwear (Source: MITI).

Legal Requirements to export goods into EU

The following procedures/regulations need to be complied with before a Malaysian exporter can start sending their goods into the European Union.

  • The first time a Malaysian company makes any customs declaration to export a product into the EU, the company will be given an EORI (Economic Operator Registration and Identification). This is a unique identifier for use by Customs Authorities in the EU for anyone wishing to export or import goods into the EU. The EORI must be used in all communications with any EU Customs Authority for the purpose of exporting or importing from and to the EU.
  • The next requirement is the Entry Summary Declaration (ENS). This will contain information about the consignments entering the EU. This must be done in advance (of the goods arriving) at the first port in the EU where the vessel transporting the goods crosses into EU territory.

There are different deadlines for submitting the ENS to Customs. The deadlines is based upon the type of vessel transporting the goods into the EU (source).

There are strict rules on the export of goods into the EU and Malaysian exporters need to be aware of these rules prior to shipment of their goods into the EU (see this document).

There are more tips on EU import requirements at the European Commission website.

When does an exporter of goods into the EU expect payment?

A Malaysian exporter can specify what the payment terms are upon signing of the contract for the supply of goods with the recipient EU based company. The EU has enacted legislation that specifies what the terms of payment are for B2B transactions. This was done to protect EU based business especially SME’s from having cash flow issues which affect their business. The directive also provides for protection for non EU based exporters provided the contract specifies that the payment terms are as per the Late Payment Directive. This is usually 60 days unless mutually agreed by both parties.

More information can be found at the European Commission website.

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