German Legal Points for Business By : By : Guido Mayer attorney-at-law attorney-at-law bar certified...

German Legal Points German Legal Points for Businessfor Business

By :By :

Guido MayerGuido Mayer

attorney-at-lawattorney-at-law bar certified specialist for bar certified specialist for

commercial – and company lawcommercial – and company law business mediatorbusiness mediator

Partner atPartner at

Dumslaff & Partner LawyersDumslaff & Partner Lawyers Loehrstr. 87bLoehrstr. 87b 56068 Koblenz56068 Koblenz

GermanyGermany Phone : +49 261 96323 0Phone : +49 261 96323 0 Fax : +49 261 96323 34Fax : +49 261 96323 34

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RA Guido Mayer RA Guido Mayer ________________________________________________________________________________________

Dumslaff & Partner RechtsanwälteDumslaff & Partner Rechtsanwälte 22

German an European German an European Regulations of ImportRegulations of Import

Customs DutiesCustoms Duties

The delivery of goods all The delivery of goods all

over the EU is to be set over the EU is to be set

apartapart from import !from import !

ImportImport means the delivery means the delivery of goods from beyond the of goods from beyond the bounds of the European bounds of the European Union (EU) Union (EU) intointo the the European Union.European Union.

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EuropeEuropeEEUURROOPPEE

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Import Regulation from Import Regulation from Non EU-Countries (e.g. Indonesia)Non EU-Countries (e.g. Indonesia)

GermanyEU - Customs Code:EU - Customs Code:

Regulation EWGRegulation EWG11

No. 2913/92No. 2913/92

German Customs Code:German Customs Code:ZollverwG ZollverwG 2 2 and AWR and AWR 33

§12 AWR for dangerous goods§12 AWR for dangerous goods11 EWG = Europäische Wirtschaftsgemeinschaft (European Economic Community)2 ZollverwG = Zollverwaltungsgesetz (Administrative Law for Customs )3 AWR = Außenwirtschaftsgesetz (German Foreign Trade and Payments Law)

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Customs ProceedingsCustoms Proceedings

There are different kind of customs proceedings. The most There are different kind of customs proceedings. The most important way is delivering goods from a non - EU - country important way is delivering goods from a non - EU - country into an EU - country. Another interesting custom proceeding is into an EU - country. Another interesting custom proceeding is the bond warehouse. The other legal customs proceedings the bond warehouse. The other legal customs proceedings are only reasonable, if your client wants to cultivate a good in are only reasonable, if your client wants to cultivate a good in Europe!Europe! They They are not attractive for your kind of business. are not attractive for your kind of business.

Bonded WarehouseBonded Warehouse Customs have not to be paid by being imported in the bonded Customs have not to be paid by being imported in the bonded

warehouse, but by taking goods of the bonded warehouse.warehouse, but by taking goods of the bonded warehouse. Economically reasonable when destination of goods all over Economically reasonable when destination of goods all over

the EU is not clearthe EU is not clear

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Bonded WarehouseBonded Warehouse

Bonded Warehouse

Merchandise Consignment Sales

Account Payment & Collect Service

Warehouse Storage &

Distribution ServiceJust-in-Time

Delivery Service

Customs & PortClearance Service

Import Formality

Packing &Re-packing

Market Analyis

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EU Tariff of DutiesEU Tariff of DutiesOnline Database

of Customs Tariff

Website:http://ec.europa.eu/taxation_

customs/index_en.htm

Price Price CalculationCalculation

The Tariff of Duties and the taxes

have to be paid by the importer !

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EZT (Electronic Tariff of Duties)EZT (Electronic Tariff of Duties)

EZT

Onl

ine

EZT

Onl

ine

Tariff of Tariff of DutiesDuties

Import RestrictionImport Restriction

Reportable Reportable importimport

RequiredRequiredDocumentsDocuments

Demand of Demand of Import LicenseImport License

Since Jan 1Since Jan 1stst, 2006, the German customs administration offers the tariff of duties , 2006, the German customs administration offers the tariff of duties addedadded with with national taxes (import sales tax and consumption tax) as „EZT – online“ (EZT = Electronic Tariff national taxes (import sales tax and consumption tax) as „EZT – online“ (EZT = Electronic Tariff of Duties) in the internet: of Duties) in the internet: http://www.zoll.de/b0_zoll_und_steuern/a0_zoelle/c0_zollanmeldung/d10_atlas/e1_ezt_online/index.htmlhttp://www.zoll.de/b0_zoll_und_steuern/a0_zoelle/c0_zollanmeldung/d10_atlas/e1_ezt_online/index.html

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Required Documents Required Documents (for normal case)(for normal case)

1. 1. Bill of EntryBill of Entry;; registration via Internet: registration via Internet: https://www.einfuhr.internetzollanmeldung.de/iza/content.dohttps://www.einfuhr.internetzollanmeldung.de/iza/content.do

2. 2. Invoice,Invoice, with : with :

Name,Name, Address, Address,

Number of goods, Number of goods, Description of goods,Description of goods,Price of goods,Price of goods,Terms of payment and deliveryTerms of payment and deliveryCountry of origin and destinationCountry of origin and destination

3. 3. Declaration of ValueDeclaration of Value It is only necessary if the value of goods is more than € 10,000 (120 It is only necessary if the value of goods is more than € 10,000 (120

million Rp.)million Rp.)

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DraftingDrafting of Contracts of Contracts

Indonesia has not acceded the Convention Indonesia has not acceded the Convention on Contracts for the International Sales of on Contracts for the International Sales of Goods (UN – Sales of Goods) by now. Goods (UN – Sales of Goods) by now.

Therefore it is very important to arrange Therefore it is very important to arrange choice of law and to arrange the place of choice of law and to arrange the place of jurisdiction.jurisdiction.

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Place of JurisdictionPlace of Jurisdiction

It would be very difficult to carry out an It would be very difficult to carry out an

Indonesian sentence in Germany. It is advisable Indonesian sentence in Germany. It is advisable

to arrange the place of jurisdiction in Germany at to arrange the place of jurisdiction in Germany at

the place where the buyer is locatedthe place where the buyer is located..

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Choice of LawChoice of Law

There are three practicable possibilities to draft There are three practicable possibilities to draft the law:the law:

International Law

German Law

33rdrd Country Law Country Law

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1. International Law 1. International Law

AdvantagesAdvantages

International rules that are International rules that are

accepted by governments, accepted by governments,

legal authorities and legal authorities and

practitioners world - widepractitioners world - wide

As a rule fair and balancedAs a rule fair and balanced

DisadvantagesDisadvantages

Difficult to customise for Difficult to customise for

particular interestsparticular interests

In detail difficult to useIn detail difficult to use

UN - Sales of Good (CISG) / Incoterms

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2. German Law2. German Law

AdvantagesAdvantages German judges are very familiar with German law; if the place of German judges are very familiar with German law; if the place of

jurisdiction is in Germany - as highly recommended -, it is advisable jurisdiction is in Germany - as highly recommended -, it is advisable to choose German law; usage of foreign law leads to expert opinion to choose German law; usage of foreign law leads to expert opinion and high cost and high cost

German buyers are common with German law; that avoids quarrels German buyers are common with German law; that avoids quarrels in connection with the contract and its interpretationin connection with the contract and its interpretation

Contracts can be simply adjusted for the individual caseContracts can be simply adjusted for the individual case

DisadvantagesDisadvantages Requirement of legal advise in Germany Requirement of legal advise in Germany Your are not familiar to German law (until now)Your are not familiar to German law (until now) A buyer in another European country does not know german law; it A buyer in another European country does not know german law; it

might be that he does not accept German lawmight be that he does not accept German law

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3. Choice of the Law of a Third 3. Choice of the Law of a Third CountryCountry

Advantage:Advantage: Neither buyer nor purchaser know the law; Neither buyer nor purchaser know the law;

chosen law is neutralchosen law is neutral

Disadvantages: Disadvantages: High costs of legal adviceHigh costs of legal advice Legal actions are very expensiveLegal actions are very expensive

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German Import Sales TaxGerman Import Sales Tax Import sales tax called „Einfuhrumsatzsteuer“ Import sales tax called „Einfuhrumsatzsteuer“

originates according to § 1 subparagraph 1 number originates according to § 1 subparagraph 1 number 4 of the German sales tax law (UStG) with the 4 of the German sales tax law (UStG) with the import of goods from a Non EU-Country; it is a import of goods from a Non EU-Country; it is a special kind of value added tax.special kind of value added tax.

Payment of import sales tax has to be proved by a Payment of import sales tax has to be proved by a receipt of custom housereceipt of custom house

Debtor is the buyerDebtor is the buyer The sales tax is actually in Germany about The sales tax is actually in Germany about 19 %19 % of of

the price of goodsthe price of goods In a normal case, the import sales tax is a VAT In a normal case, the import sales tax is a VAT

(Value Added Tax) on input(Value Added Tax) on input The buyer can subtract it from his sales tax, he has The buyer can subtract it from his sales tax, he has

to payto pay

So the buyer is not burdened with the import So the buyer is not burdened with the import sales tax!sales tax!

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Import Sales Tax Import Sales Tax in in

different EU-countriesdifferent EU-countries

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Concept of Co-operation between Concept of Co-operation between Indonesian Vendors and German Indonesian Vendors and German

Businessmen in GermanyBusinessmen in Germany

Instead of selling the goods to German Instead of selling the goods to German

importers, it is worth considering to incorporate importers, it is worth considering to incorporate

with a German company, whose shareholders with a German company, whose shareholders

are shared between Indonesian vendors and are shared between Indonesian vendors and

German businessmen.German businessmen.

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Concept of Co-operationConcept of Co-operationAdvantages :Advantages : Indonesian vendors does not need to search Indonesian vendors does not need to search

the German buyers the German buyers Prices can be negotiated in a fair wayPrices can be negotiated in a fair way Indonesian vendors don‘t need middlemenIndonesian vendors don‘t need middlemen No non-payment riskNo non-payment risk All risks of selling are shared by all All risks of selling are shared by all

shareholdersshareholders

Disadvantages:Disadvantages: Indonesian vendors have to engage in a Indonesian vendors have to engage in a

German companyGerman company

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Example of CooperativeExample of Cooperative

Buyers in EuropeEuropean BuyersEuropean Buyers

Co-operation of Indonesian Suppliers in Germany

(supported by German Companies)sell

sel l

Indonesian Supplier

Indonesian SupplierIndonesian Supplier

Sell

Shared

Indonesian Indonesian SupplierSupplier

Sell

Shared

Shared

Sell

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Example of Contract (German Law)Example of Contract (German Law)

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German Legal Points for Business By : By : Guido Mayer attorney-at-law attorney-at-law bar certified...

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