EU Union Customs code

Posted on: 26/03/2015

1. Timescales: 2. Current Authorisations: 3. Changes to End-use: 4. Changes to Inward Processing: 5. Valuation issues

Here is a summary of some of the changes with additional clarification from EU Customs.  There are more changes than this as the UCC affect all areas of customs law, procedures and processes.  It is important you plan now as it is just over 12 months away.

1. Timescales: Version 4 of IA/DA was issued March 2015.  Official discussions will continue until the end of April then Customs Code Committee will vote on the IA/DA. The date for this vote is scheduled as 19th June 2015 but this may change.  After this vote, the final Version 5 of IA/DA but this will be published.  UCC implemented from 1st May 2016 with some conditions being introduced 2020.

2. Current Authorisations: Any company holding any customs authorisation that is valid to a date after the UCC implementation (ie expires after 1-5-2016) will continue to be approved UNDER THE TERMS OF THAT AUTHORISATION

·         This means, for example, that someone with IP expiring in September 2017 will not come under UCC conditions, in other words financial guarantees will not be required BUT

·         Beneficial conditions, eg you don’t have to export the goods, removal of compensatory interest, will not apply

·         If the Authorisation is amended prior to the expiry date it will be reassessed under UCC conditions

·         Even if a company has a current Authorisation they may decide to reapply to bring them under UCC conditions – the conditions do bring some potential benefits though they shouldn’t do this unless they are AEO compliant or AEO (C) or they will have to put the guarantee in place

·         Once IA/DA in place (summer 2015) companies can apply to be approved under the UCC conditions, don’t have to wait until May 2016.

·         This transition period for running dual-controlled customs authorisation will last until 1/5/2019

3.  Changes to End-use: End-use becomes a Special Procedure which means it will be subject to more customs controls, processes and regulations

  • Must meet normal EU Economic Conditions to be granted
  • Equivalents will be permitted under certain conditions (like IP)
  • A bill of discharge will have to be subjected
  • T5 will go – replaced where relevant with TS and Transit conditions (awaiting further information)
  • If after process there is waste/scrap it must be removed from EU and placed in a CW (didn’t say or duty paid !!! – we wait again)
  • Guarantees
  • This does not apply to civil end-use which will remain a separate issue if imported with an airworthiness certificate at the time of import.  It will be treated as a normal Tariff Suspension no Special Procedure

4. Changes to Inward Processing:

  • Customs wording is that PCC is being removed as a facility and that IP will no longer require re-export to discharge liabilities (in other words PCC is merged into IP but they don’t want to say that).
  • The requirement to pay compensatory interest will be removed
  • Drawback going as we know but there are no guidelines on what a drawback company should move to; this, they think, will be left to individual companies to decide
  • Guarantees will apply to IP approvals granted or amended after 1st May 2016

5. Valuation issues: Companies need to read the UCC/IA/DA with regard to valuation and make provisions or change contract terms ASAP as this could have serious financial implications

Royalties & Licence Fees

·         very few will be outside the scope of customs valuation (CV).  Currently law looks at the fees with regard to the importance to the seller and if the buyer doesn’t pay the seller or a directly related party generally they were outside the scope of CV.  UCC will look at it from the viewpoint of the buyer – can the buyer use/ sell the goods without paying the fees (to whoever! – even another EU company).

·         Trademarks – the special 6 point determination as to whether you include trademark costs in CV goes and it comes under the same conditions as Royalties and licence fees.  Therefore, most subject to customs duty under UCC, the complete opposite of the current conditions.

First Sale for Export Price: Definitely going but – there is a “sunset clause” which means that where the importer is bound by a contract concluded prior to the entry into force of the UCC then they can still declare the First Sale for Export Price until 31-12-2017.


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