Receiving parcels from the US can be very expensive, thanks to a number of baffling extra charges, writes Rosita Boland.
Well into December, it's the time of year when you might be hoping for a little something to arrive in the mail from friends and family abroad. If those little somethings are coming from the US, news of them now usually arrives via a card through your door, advising you of a depot where you can pick up your parcel.
There are some changes the Irish public adapt to more easily than others. One they are still complaining bitterly about, almost two years after its introduction, is this system of delivery for personal gifts sent by airmail from the US.
Whatever about the inconvenience of trailing out to a depot to get your parcel, what the public has been consistently questioning and complaining about are the fees you must pay before you can take your parcel.
So what has changed? Prior to January 2002, if a US-based friend or relative sent you an airmail gift, it was delivered to your door by An Post.
"We had very few complaints about the service in those days," reports An Post's press officer, Anna McHugh.
In the past An Post rarely charged the Irish Revenue's duty and VAT on gift parcels that came via airmail from the US. When applied, the fees were a 3.5 per cent duty, plus VAT at the full rate, on the value of the contents.
Now An Post is "inundated with calls of complaint", about the current service, she says, "because customers historically are so used to us delivering their stuff. Unfortunately, since we no longer handle the service, we are not in a position to help."
A "customs clearance" fee of €9.50 is now levied on each parcel sent from the US that carries a value of more than €45. There is an additional fee for "VAT at point of entry" which varies, depending on the value of the parcel, but which is always higher than €9.50. Thus the collection fee is never less than €19 on parcels carrying a value of more than €45. Parcels valued below that amount escape these levies. If you don't accept the charges, the parcel is returned within 10 days, presumably to the hurt mystification of the sender.
In 2002, the United States Postal Services ended its contract with An Post for airmail parcels; An Post, however, still handles parcels that come by sea. All airmail parcels that arrive in Europe from the US are now handled by a private company called General Logistics Services (GLS), which is owned by Royal Mail. It is accepted in the business that this is a very attractive deal for the US Postal Services.
All these parcels destined for Europe now first arrive in Frankfurt. It is here that a flat rate for EU customs and VAT on the value of the contents is paid by GLS which then recoups it through charges to the customer.
The Irish Revenue Commissioners explain: "In the case of such consignments (US-originating airmail gifts) arriving in Frankfurt from a non-EU country, the parcels are released into free circulation in Germany on payment of a flat rate of 13.5 per cent customs duty and VAT."
While most of the EU customs fees and VAT go to central EU coffers, 10 per cent is retained by the country in which they are collected. As Germany is the hub of all US airmail parcels bound for the EU, that clearly translates into an attractive national annual sum for its economy.
It's this element of the process, the "VAT at point of entry", that is difficult for the average Irish punter to understand, judging by the number of complaints An Post says that it is still receiving regularly about the customs and VAT fees.
They have advised customers to complain to the American Embassy, as GLS does not have an office in this country, and customers have also complained of difficulties getting through to GLS's phone system.
Markus Schmermund is the operations manager for parcels of GLS, and is based in Amsterdam. He states that the US Postal Services are obliged to inform their customers sending parcels to the EU that they are liable for extra charges. "They are informed by a letter. There is one in every post office in the US." However, many of the customers still calling An Post report that this information was not passed on in the US.
"The €9.50 is a defined administration fee for every parcel," he explains. However, the problem for the customer is that this €9.50 is clearly indicated on each parcel's Customs/VAT Invoice - which is printed on GLS headed paper - as being a "Customs Clearance" charge. Yet there is no official stamp to indicate that this customs fee is a government one. Schmermund acknowledges that there have been many complaints by customers, but points out that GLS has costs to cover, thus the administration fee.
On gift airmail parcels originating in the US, the Irish Revenue Commissioners' current document, detailing the charges of Customs duty, VAT and Excise, acknowledges that: "Separate handling fees or charges vary. These are usually levied by the distribution company and are not a matter for Revenue."
Thus, the €9.50 fee which is indicated on paper as being "customs clearance", but which Schmermund states is "a defined administration fee", is an area where the handling company can make some profit.
If GLS offers the US Postal Services such a good deal, then extracting profit from the other side of the transaction makes sound economic sense. We may not like it much, but it seems that European customers are now, to a certain extent, subsidising the US Postal Services.
So, how is it, the new "administration fee" aside, that we so rarely seemed to pay duties and VAT in the past?
"An Post was more lenient about collecting duty and VAT," according to a government source. Those days are clearly over.
GLS's website is www.gls-ireland.com