If you move goods into the EU through Calais, Dunkirk or Le Havre, the Regime 42 change that took effect on 1 January has already altered how your shipments clear. France has abolished Customs Procedure Code Regime 42 for businesses not established in the EU, which removes the import VAT deferral route that UK exporters leaned on for delivered duty-paid work. The door is not shut. The entry requirements are simply higher, and UK shippers and freight forwarders are moving to DAP (Delivered at Place) 42 terms to keep goods flowing.
What Happened
Regime 42 let an importer bring goods into one EU member state without paying import VAT at the border, on the basis that the goods would move on to a customer in another member state. France has now closed that procedure to non-EU established businesses. For UK exporters, France was one of the busiest entry points into the single market, so the change lands hardest on traders who built their EU distribution around a French port of entry.
The pain concentrates on DDP shipments. A UK exporter shipping DDP takes on the import clearance, the duty and the VAT, and Regime 42 was the mechanism that made that workable without a French establishment. That option has gone. The practical alternative being adopted across the market is DAP 42, where the buyer or a designated EU-established party takes the importer of record role and runs the Regime 42 movement in their own name.
Impact on Freight Rates and Operations
The direct cost is not on the ocean or road rate. It sits in clearance, cash flow and delay risk. Import VAT that used to be deferred now has to be paid or handled through a fiscal representative, so working capital gets tied up per consignment rather than settled downstream. Traders who need an EU VAT registration or a fiscal representative in France face a registration lead time and an ongoing compliance cost that did not exist in December.
Operationally, expect friction at the border while paperwork catches up. A shipment tendered on the wrong Incoterm can sit at the port until an importer of record is named, and detention and demurrage start ticking from day one. Forwarders are also renegotiating who carries the duty and VAT line in the quote, so the all-in landed cost you agreed last year may no longer match what the invoice says this quarter.
What Shippers Should Do
- Audit every DDP contract routed through France. Identify which customers you currently sell DDP to and flag any consignment that clears in a French port. Those are the ones exposed.
- Move to DAP 42 where the buyer can act as importer of record. This is the route most UK exporters are taking. Confirm your customer has an EU VAT number and is willing to take the clearance role before you rewrite the terms.
- Price an EU establishment or fiscal representative if you must keep DDP. Some buyers will refuse to import. If DDP is a commercial requirement, budget for a French VAT registration and factor the registration lead time into your delivery promises.
- Test an alternative entry point. Belgium and the Netherlands still operate their own onward-supply arrangements. Run a cost and transit comparison for Rotterdam or Antwerp against your current French routing before you commit for the year.
Key Takeaway
France has not closed EU access to UK exporters, but it has ended the cheap DDP shortcut, and the shippers who rewrite their Incoterms to DAP 42 now will avoid the border delays that catch everyone else.
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Source: The Loadstar