Punishment Customs

The European Union has installed a new punishment customs vs. goods from the USA taking effect since March 1 2004.

Rate: 5% increasing by 1% every month till they can make an agreement with the USA or the economy crashes.
That means in April the customs will be 6%, 7 % in May and so on up to a maximum of 17% that will be reached in March 2005.

Now, in September 2004 we have a level of 11%

What does this mean for you customers?

When buying a game directly from the USA you have to pay that customs fully in addition the games price taking effect immediately. And yes the shipping costs are added to the games total. From that combined total the customs is calculated. The same calculation is made for the sales tax.

Example: You buy games for 100 Euro in the USA, shipping is 40 Euro. The games enter Europe in September. Punishment customs is calculated: 11% of 140 Euro = 15,40 Euro. So the effective punishment customs is always higher than the actual percentage.
(If no shipping fees are mentioned on the invoice coming with the games, the customs agents "generously" estimate if for you).
On that total VAT is added for example 25% in Sweden or 20% in France.
In France we have now 20% of 155,40 = 31,08 Euro VAT.
So your games cost is now 186,48, nearly the double amount of your original game costs. Sometimes warehouse fees and handling fees are added.

When ordering from UGG we did not charge that punishment customs till August 31.

From September 1 2004 on UGG must pass part of the customs to you customers but only half of the current rate.
The rates are September 2004 5,5% , thereafter increasing by 0,5% every month.
For example in October the customs fee would be 6% from UGG and 12% if ordering from the USA. UGG does not misuse the shipping cost to increase the VAT or the customs. In Germany VAT is only 16% and UGG customers from other European countries can profit from the lower German VAT also.

Prepubs and P 500 orders. UGG must add the customs due at the time of shipping here from UGG:
Affected are the following companies:

Avalanche Press, Clash of Arms, Critical Hit, Decision Games, Eagle Games, Excalibre Games, , HPS Simulations, Moments in History, Multiman Publishing, New England Simulations, Operational Studies Group, The Gamers, Inc., Australian Design Group, Days of Wonder, Avalon Hill Hasbro, Eagle Games, Excalibre Games, Shrapnel Games

Not affected are: UGG, L2 Design, Phalanx, Histoire & Collections, Giogames, Simtac, Italeri,
GMT pays the customs for you and is not affected.

UGG's Online shop cannot calculate the new customs. UGG adds that manually to the invoice amount. We are handling the customs separately

Political Background

The European Union wishes to force the USA to accept the judgement of the World Trade Organization. According to that judgement the USA must remove subsidies for exports of US companies.
However, we could experience how the US Government reacted on means of political suppression in the past. In alternative to an agreement are countermeasures of the USA.
We read some articles that the US government is willing to give in. Furthermore is stated that there would be no real harm for the European industry.
But frankly said UGG has problems to trust announcements of EU or US politicians. In our actual mass import UGG already paid that punishment customs 7 times.
An Analysis of the facts, however, shows the real situation is more complex. The Punishment Customs are a new element in the trade war between the USA and the EU that lasts for 15 years now.

With a lot of luck and competent politicians we do not have these customs anymore soon.
But are the EU or US politicians competent? So far all rumours that the customs may vanish soon have been wrong. The mass media reports nearly nothing about it. So no public pressure to get rid of the customs exist.

What does this mean for UGG?
A longer existence of these customs can kill UGG.
We here at UGG can understand the you customers are unwilling to pay such customs. Its anyway hard to earn a living today. That could make some of you delay your orders.
UGG just can say please don't. UGG is not responsible for the decisions of our politicians.
As seen from above UGG does its best to harm the customers only minimally.

In the morning I woke up in cold sweat. It thought it was because of a nightmare. After getting busy I realized that my nightmare has already become reality.

Udo