Designation and Authorisation
Information about designation of Freeports.
A customs site and its operator are designated by HM Treasury, following an assessment of suitability by HMRC. Unlike customs authorisations, it is discretionary and does not have qualifying legislative criteria or time limits for the application to be approved or rejected.
Designation is legally effected by the Treasury making a type of statutory instrument known as a Designation Order. This sets out details such as the location of the customs site, who the operator is and what their responsibilities are. However, the process for applying for designation, and for assessing whether an applicant meets the requirements for designation are administered by HMRC.
As part of the assessment process the applicant is required to demonstrate that they meet Authorised Economic Operator (AEO) standards in respect of the customs activities to be carried out at the customs site. This includes safety and security requirements. They will therefore also be required to complete one of the following actions, as appropriate:
- update any existing AEO authorisation held
- apply for AEO authorisation
- apply for Freeport Safety and Security (FPSS) authorisation
FPSS authorisation allows a customs site operator to demonstrate that it meets AEO equivalent standards for its Freeport customs site activities only. This is an alternative to obtaining AEO authorisation solely for the purpose of designation. On completion of a satisfactory assessment, HMRC makes the recommendation to the HM Treasury to designate. It will be considered alongside any other relevant information.
A designation order has effect for a period of 10 years, beginning the day after the date on which it is made.
Anyone can apply to be a customs site operator, provided they have:
- rights to the proposed site — either as the owner of that land, or by agreement with the owner
- written agreement from the Freeport that they are located within
To be designated, a proposed customs site area is required to be within the boundary of the Freeport area. However, in exceptional circumstances consideration may be given to designating sites outside of but close to the Freeport boundary. In this case, it must be demonstrated, by the applicant during the assessment process, that activities at the site would contribute to the wider Freeports objectives.
There is no limit to the number of customs sites that can be designated within a Freeport.
HMRC may consider an application for an offshore customs site located within the UK’s inland waters, where it can be demonstrated by the applicant that it would not be possible or practicable to carry out the proposed activities at an onshore customs site.
A business is required to be authorised by HMRC to declare goods for a free zone procedure, and to carry out any industrial, service or commercial activity on goods in a free zone.
Authorisation is not required where the activity is the transfer of free zone goods as described in notice 1 of the Notices made under the Customs (Special Procedures and Outward Processing) (EU Exit) Regulations 2018, as made by virtue of Regulation 3.2.c.ii.
At the time of applying for authorisation the business must confirm it has an agreement with the relevant customs site operator that allows it to operate at the customs site. To apply, the business must complete and submit form FPT2 to HMRC by:
- email: freeportbusinessapplications@hmrc.gov.uk
- post: Freeport Authorisations, HM Revenue and Customs, BX9 2AA
The approval notification will include details of the:
- free zones where the goods are to be kept
- authorised activities to be carried out there
- authorised business
An authorised business is required to comply with HMRC requirements. This applies to segregating, marking, or otherwise identifying goods in the free zone, and for making goods available for examination.
A Freeport customs procedure authorisation does not specify an end date. An application for the Freeport customs procedure cannot be made retrospectively.
A customs site operator must also apply for Freeport customs procedure authorisation if they also wish to import goods to, or carry out activities on goods declared to the Freezone procedure in a customs site. This is in addition to their Customs Site Operator (CSO) role and responsibilities.