Exclusive British diamond company Graff Diamonds has improved control over its customs declarations process and saved a significant amount in duty by automating and integrating its Outward Processing Relief (OPR) and Customs Warehouse procedures using Descartes’ cloud-based Import Customs solution.
Founded in 1960, Graff operates at the very pinnacle of the jewellery retail market. The company is involved in every step of the jewellery making process; from sourcing rough stones, cutting and setting the gems, and then retailing the finished pieces which are sold across 50 stores and concessions globally.
Graff has been working with Descartes Systems Group since January 2014 to develop and implement a tailored, automated customs solution to replace its historic reliance on spreadsheets for duty management. By developing a solution that has integrated Graff’s warehouse and OPR inventory systems, Descartes has saved the jewellery company both time and money, and improved the level of control it has over its import and export processes and inventory.
OPR allows importers, like Graff, to claim duty relief for goods imported from non-European Union (EU) countries where the goods only temporarily left the EU for processing or repair. By integrating the OPR process with the Customs Warehouse procedures, Graff can accurately track circumstances where duty relief may be available.
Andrew Petherick, Head of International Shipping and Logistics, Graff, explains: “As an organisation, we source diamonds and loose gems from a variety of sources worldwide. These gems are imported into our UK based customs warehouse where they are checked for quality; some might be returned, most will remain in the UK for manufacture, while others might be processed under OPR.
“When I started with Graff in late 2013, we were predominantly using spreadsheets to manage and track this inventory. The manual manipulation required to combine the spreadsheets was complicated and significant manual work was required to prevent the risk that diversions could be missed resulting in the full duty and VAT being paid. I recognised that there were both time and significant cost savings that could be achieved through automating elements of the process, and integrating the different systems.”
Initially, Descartes provided Graff with a basic customs entry system that would allow it to manage the warehouse diversion reporting itself. Over the ensuing six months, Descartes worked to develop a tailored solution that integrated and automated Graff’s warehouse and OPR modules, allowing the retailer to have a clear picture of the duty that was due on each item of jewellery and each gem that it handled.
Andrew expands: “Using Descartes’ Import Customs solution every single gem is itemised so we have complete visibility for each and every item across this process. This allows us to build up an inventory of stock which has been exported under OPR, including all documentation relating to the gem, ensuring that duty is not paid unnecessarily.. In addition, the integration between the systems also means that we know exactly which gems on the system are still available, and we can ensure that all gems exported under OPR are reimported within the two year limit.”
The duty management functions within Descartes’ Import Customs Solution as used by Graff are designed to meet the needs of the larger members of the UK trading community. The solution provides complete customs and warehousing functionality, including full audit trails and comprehensive management information.
Andrew concludes, “Descartes’ Import Customs Solution has enabled us to move away from our reliance on spreadsheets which in turn has brought about a real cost saving from a duty perspective. We recently produced the world’s most expensive watch retailing at $55 million. So if you imagine that duty on jewellery in the UK is 2.5%, then the numbers involved in our process speak for themselves. But it’s not just about the fiscal numbers; moving our systems online has given us much more control and allowed us to become far more self-sufficient, and it’s not something we could have achieved without the technology or the support of the Descartes’ team.”
