UCC ~ EUs basic customs law UCC published Regulation 952/2013 - - PowerPoint PPT Presentation

Union Customs Code

BIFA Conference

International Trade Development Liaison Officers (ITDLO) Team

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UCC ~ EU’s basic customs law

• UCC published – Regulation 952/2013
• framework regulation for customs rules and procedures
• entered into force on 30 October 2013 (but only to allow negotiations)
• Requires implementing legislation –
• Commission Delegated Regulation (EU) 2015/2446 of 28 July 2015
• Commission Implementing Act (EU) 2015/2447 of 24 November 2015

Operative date for changes to procedures - 1st May 2016 earliest

• changes will be phased in from 1 May 2016 to 31 December 2020

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Aims of the UCC

• Facilitation of legitimate trade
• Reinforced need to ensure security & safety
• Paperless environment for customs & trade
• Harmonised & standardised application of customs controls

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What’s changing…?

• All communications between customs & operators to be electronic
• AEO criteria
• Guarantees for special procedures & temporary storage
• Customs procedures
• Temporary Storage
• Valuation
• Simplified Declaration Procedures and Local Clearance Procedures
• Preference and Status
• Introduction of Centralised Clearance & Self Assessment

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All communications must be electronic

• Paperless environment for customs & trade
• Declarations must be made electronically
• No more manual declarations
• HMRC is currently scoping the impact
• NILPs will be expected to be inventory linked
• Consultation once more details are available

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Under current legislation Member States have discretion to decide when a guarantee is or is not required, but under UCC this will change

• Mandatory for authorisations to operate certain procedures
• Required for Potential and Existing customs debts
• Level of guarantee shall be based on a reference amount and must be

sufficient at all times

• The debtor provides guarantee
• De minimis threshold increased to EUR 1000
• A comprehensive guarantee is available to cover more that one transaction
• Transitional arrangements may apply

Guarantees

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Guarantee for a potential debt (with reduction to 30%)

A B C D E F

Customs Procedure Max value

• f goods

within the procedure at any time Highest duty rate applicable to the goods Estimate of charges (BxC%) Max liabilities allowed in the procedure at any time (suspended revenue) Guarantee level Amount of guarantee required (D/100xE)+ D=F IP £100,000 5% £5,000 30% £1,500 CW £200,000 5% £10,000 30% £3,000 Total Potential Debt £300,000 5% £15,000 30% £4,500

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Comprehensive Guarantees

Reduced Guarantees and Guarantee Waivers available only Reduction or Waiver for potential debts

where AEOC status is held or criteria met where AEOC is held

Reduction for actual debts e.g. deferment

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Streamlining customs procedures: headlines

• IP Drawback & Type D customs warehouses no longer available
• PCC merged with IP and no requirement to re-export using IP
• Equivalence extended to Storage, Specific Use and Processing procedures
• Greater flexibility between procedures aimed at reducing levels of post-

clearance action

• No compensatory interest under IP or TA
• CPEI becomes Special Procedures:

Transit External & Internal Storage Customs Warehousing & Free Zones Specific use Temporary Admission & End-use Processing Inward & Outward

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Transition Arrangements: Special Procedures

• Current authorisations may continue until their expiry date but not

beyond 30th April 2019

• For those authorisations with no expiry date - reassessment must be

completed before 1st May 2019

• Goods entered to a Special Procedure after 1 May 2016 must follow the

UCC rules, even if a current (pre UCC) authorisation is still being used

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Special procedures: Storage

Customs warehousing

• Current types A,C,D,E to be replaced by two types - ‘Private’ or ‘Public’
• Remote retail (internet) sales are permitted
• Use of equivalence including where it is impossible to identify their customs

status by using accounting segregation

• Only the authorisation holder can operate the storage facilities

Free Zones – still available under UCC but not used in the UK

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Special procedures: Processing

Inward Processing

• IP and PCC being merged
• No intention to re-export
• No standard rates of yield – actual or

average

• Processed products can be released

to End-use

• Changes to economic test to include

ADD, CVD and other similar types duties

• Applicant must indicate on application

whether any debt will be calculated under traditional PCC or traditional IP

Outward processing

• Use of value added method to

calculate duty due

• Duty differential method no longer

available

• Prior importation of replacement or

processed products subject to a guarantee

• Restriction on who can be

authorised removed (no longer has to be person arranging processing)

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Special procedures: Specific Use

Temporary admission

• For diversions, rules of assessment

apply at time of diversion

• Use of equivalent goods extended

to TA in specific cases

• Period of use may be extended

beyond 24 months in exceptional circumstances to a maximum of 10 years

• No compensatory interest

End-use

• Use of equivalent goods is extended

to end-use

• End-use goods can be entered to

processing procedure and discharged at end-use rate

• Bill of Discharge introduced
• Procedures for moving goods are

aligned with special procedures (no more T5s)

• Waste and scrap following

destruction must be placed under the customs warehousing procedure

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Valuation

• The facility to use an earlier sale is withdrawn
• Royalties and licence fees
• All royalty payments will be dutiable irrespective of the relationship

between the manufacturer and third party licensor

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Transition Arrangements: Valuation

Earlier Sales – so called ‘sunset clause’

• Article (IA 341) applies until 31st December 2017.
• Declarant must be able to prove, to the satisfaction of the customs

authorities, that they are bound by contracts through to the 31st December 2017.

• Declarant must be able to prove he/she is bound by such an

agreement to the satisfaction of the customs authorities to use an earlier sale value

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Entry in the Declarant’s Records (EIDR)

• Replaces Local Clearance Procedures (LCP)
• Authorisation required
• Must fulfil AEOC criteria
• Presentation of goods waiver requires an:
• application
• applicant must be an AEO
• Transitional arrangements apply

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Simplified Customs Declarations

• Enter goods to a customs procedure without providing a full customs

declaration at the point of release

• Authorisation required
• Supplementary declarations may be waived subject to additional

criteria being fulfilled

• Provision of a guarantee for imports (dependent on customs

procedures used)

• Banana importers who do not hold Weighing Certificates at point of

importation will be required to use SDP

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Centralised Clearance

Centralised clearance is a new procedure under the UCC where more than one customs authority is involved in the imports or exports

• Allows a business to declare their goods to customs authority

in one member state but present the goods to customs in another member state

• Requires an authorisation and MUST hold AEOC status
• Expected date of delivery 2020
• Transition - SASP remains until CC implemented

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Self Assessment

Allows an authorised business to carry out certain customs formalities and determine their customs duty liabilities

• Requires an authorisation and MUST hold AEOC status
• Notification and payment of customs duty on a periodic basis
• Much of the detail, particularly in relation to the management of Import

VAT, Excise and Prohibitions and Restrictions has yet to be agreed

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Tariff Preferences

• Enabling businesses to make out origin declarations instead of the

current paper certificates, for EUR and GSP

• The Registered Exporters System (REX) is a self-certification for

exporters that will replace GSP certificates

• Registration of exporters under REX will begin on 1 January 2017,

with full implementation completed by 30 June 2020 Transition:

• No re-assessment required for Approved Exporter authorisations
• The registration period for existing UK exporters and re-consignors

will be completed by 31 December 2017 and re-consignors will be completed by 31 December 2017

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Temporary storage

UCC allows for goods in TS to be moved between different TS facilities as an alternative to using the external transit procedure

• Movements under temporary storage used to replace national

transit

• Time limits to keep goods under temporary storage increased

to 90 days

• A guarantee will be required unless the conditions for a

reduction or waiver are met

• For AEOC holders some conditions for authorisation can be

considered as met

• Movements between different authorisation holders require

both to have AEOC status

• TS facility cannot be operated by a third party

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Changes introduced by UCC – Temporary Storage

• 90 days storage period, no difference between transport mode
• f arrival
• The continuation of the same storage period when goods are

transferred between economic operators

• Additional criteria – Adequate IT security measures
• Provide a guarantee to cover the goods whilst they are in

temporary storage, requirements will only apply from 1 May 2016 for new authorisations

• Move goods using the TS arrangements - C21 or inventory

messaging

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Temporary Storage

The latest up to date changes regarding Temporary Storage can be found in the Customs Information Paper 05 (2016) issued 20 January 2016 A further CIP will be issued to explain the requirement for ‘exclusively operated’ under the UCC Existing TS approvals will continue for a transitional period until

• a new authorization is applied for after it’s expiry date
• an amendment to the authorization - 1 May 2019, whichever is

earliest

• New applications for TS approval after 1st February 2016

authorized under UCC

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Summary - Temporary Storage The UCC introduces 4 main changes for T.S

• mandatory guarantees
• ability to move goods under TS (rather than transit)
• new data sets for TS declarations
• Maximum of 90-day storage period

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Transit-Internal and External

• NCTS becomes Electronic Transit System (ETS)
• New criteria to be fulfilled when applying for transit authorisations
• Transit guarantees to be applied for using the comprehensive guarantee

procedures and rules

• IT Transition may affect:
• Removal of national transit simplifications
• Air and Sea level 1 and level 2 paper based simplifications end date
• Requirements for new reduced data set Transit declaration for transports

by rail, air and sea to be made electronically

• The current electronic air /sea level 2 simplifications are replaced by the

electronic transport document.

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Benefits from Transit authorisations

• Authorised Consignors (Transit) can make a transit declaration

and start a transit movement at their own premises without presenting the goods to customs

• Authorized Consignees (Transit or TIR) can receive transit/

TIR goods at their own premises and end the transit movement without presenting the goods to customs

• Economic operators can be authorized to apply their own

seals, at their own premises

• Economic operators can be authorized to use a reduced data

set transit declaration (new under UCC)

• Economic operators can be authorized to use their own

electronic transport documents in lieu of a transit declaration

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Transition Arrangements - Transit

• Any transit movements which started on or before 30 April 2016

will be discharged under the Community Customs Code arrangements

• All goods entered to transit after 1 May 2016 must follow the

UCC rules, even if a Community Customs Code authorisation is still being used

• Economic operators who are authorised for the Community

Customs Code seals simplification may use their old stocks of seals until the stocks run out or until 1st May 2019

• Air and sea paper based simplifications will cease under

the UCC once IT systems are in place

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Single Transport Contract (STC)

• Single Transport Contract:
• Authorisation not required
• Excise goods and CAP refund goods are excluded

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Authorised Economic Operator (AEO)

Is an internationally recognised quality mark which indicates that a business operates within a secure supply chain and their internal controls and procedures are efficient and compliant

• AEO standards are linked throughout the UCC
• AEO standards become the cornerstone for operating customs

procedures and other financial benefits ~ guarantee reductions and waivers

• Transition - Current authorisation holders will be

re-assessed by 30th April 2019

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AEO authorisation criteria

• An appropriate record of compliance
• A satisfactory system of managing commercial and where

appropriate, transport records, which facilitates customs controls

• Proven financial solvency
• Plus, for AEO security and safety, appropriate security and safety

measures.

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AEO – so what is changing?

• Two types outlined in UCC:

Holding both is equivalent of current AEOF status

• New criteria for practical standards of competence or professional

qualifications

• Criteria expands to include compliance with customs

and taxation activity of the applicant. AEOC

Customs Simplifications

AEOS

Security & Safety

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Universal aim to ‘Secure’ the ‘Supply Chain’ ?

Based on the WCO framework of standards, the Security measures have to be seen against the international background and measures introduced by our trading partners, e.g. USA, Canada, New Zealand etc With the overall objective: Mutual recognition of controls, standards and authorised economic operators through international agreements in order to achieve ‘green lanes' and thus facilitation for trade

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AEO interaction across UCC

• Comprehensive guarantee
• Guarantee reductions/waivers
• Simplified Customs Declarations
• Entry in Declarant’s Records (EIDR)
• Valuation simplifications
• Regular shipping services
• Temporary storage
• Authorised weigher
• Transit simplifications
• Special procedures
• Customs representative in OMS

Certain AEO(c) criteria must be met

AEOC criteria to be met

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AEO interaction across UCC

• Duty deferment guarantee reduction
• Movements within a TS

authorisation between different MS

• Centralised Clearance
• Self Assessment
• EIDR – presentation waiver

Certain AEO(c) criteria must be met AEO(c) Mandatory

AEOC Mandatory

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MR Agreements in place

MRAs being negotiated (11) China - Japan China - Korea Japan - Malaysia Hong Kong, China - Singapore India - Korea Israel - Korea New Zealand - Singapore Norway - Switzerland Singapore - USA USA - Israel USA - Mexico Concluded MRAs (24) June 2007 New Zealand - USA May 2008 Japan - New Zealand June 2008 Canada - USA June 2008 Jordan - USA June 2009 Japan - USA July 2009 EU - Norway July 2009 EU - Switzerland June 2010 Canada - Japan June 2010 Canada - Korea June 2010 Canada - Singapore June 2010 EU - Japan June 2010 Korea - Singapore June 2010 Korea - USA Jan 2011 Andorra - EU May 2011 Japan - Korea June 2011 Korea - New Zealand June 2011 Japan - Singapore May 2012 EU - USA June 2012 China - Singapore Oct 2013 China - Hong Kong, China Nov 2013 India - Hong Kong, China Feb 2014 Hong Kong, China - Korea Mar 2014 Korea - Mexico May 2014 EU - China

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AEO update

UK –

657 applications received Certificates issued = 390

• AEO(F) = 309
• AEO(C) = 69
• AEO(S) = 12

EU – (includes UK figs)

18,276 Applications received Certificates issued = 14,206

• Germany 6364
• Netherlands 1465
• France 1255
• Italy 979
• Poland 775
• Spain 647
• Sweden 320

*Figures correct at October 2015 AEO database available on Europa website at www.ec.europa.eu/taxation_customs/dds/cgi-bin/aeoaeoquery?Lang=EN

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Further information

• HMRC’s Union Customs Code FAQs:

www.gov.uk/introduction-of-the-union-customs-code-ucc

• Customs Information Papers on UCC and mailshots:
• HMRC UCC Team, email: international.documents@hmrc.gsi.gov.uk
• EU UCC site: www.ec.europa.eu/taxation_customs/customs/customs_code
• AEO Public Notice 117
• AEO Central Site, tel: 03000 564 556
• www.gov.uk

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Any Questions?