Guidance

The Union Customs Code

Planned changes to import, export and storage procedures following the introduction of the Union Customs Code (UCC).

Changes under the UCC

The UCC was introduced across the European Union (EU) on 1 May 2016. There are a number of changes to how goods cross EU borders and some transitional arrangements will operate until 2020.

The main changes from 1 May 2016 are:

  • mandatory guarantees for most special procedures and temporary storage (TS) – this only applies to new authorisations
  • the ability to make some movements under TS rather than national transit or New Computerised Transit System (NCTS)
  • the removal of the earlier sales provisions relating to valuation – but there are some transitional arrangements
  • all communications between customs authorities and economic operators must be electronic

Some procedures and reliefs ended or changed on 30 April 2016, these are:

  • the €10 waiver of Customs Duty for free circulation customs declarations - where Customs Duty is payable no de-minimis exemption will apply - this doesn’t affect any Community System of Duty Reliefs (CSDR) duty reliefs
  • goods being declared to Onward Supply Relief (OSR) (customs procedure code 42 series) - can only be entered using a full customs declaration or the Simplified Declaration Procedure (SDP)
  • the use of information sheets for Special Procedures (INF) documents with an Entry in Declarant’s Records (EIDR)
  • Inward Processing Drawback (IP (D)) and Low Value Bulking Imports (LVBI) authorisations will no longer be valid and these authorisations can’t be used to import goods regardless of any expiry dates shown on your authorisations
  • Processing under Customs Control (PCC) authorisation holders will be given an Inward Processing (IP) authorisation number which must be used for new importations after 30 April 2016
  • type D customs warehousing authorisation holders will be given a new authorisation number with a prefix of C (for type D authorisation), or E (for a type E warehouse with type D rules of assessment) - these must be used for entries to customs warehouses after 1 May 2016, the normal debt rules of assessment will apply
  • goods being declared to LVBI will only be entered using an SDP authorisation

Guidance to help you understand the new legislation

The UCC is a revision of the Modernised Customs Code (MCC) and HM Revenue and Customs (HMRC) is updating public notices and guidance to reflect this. HMRC expect further EU guidance to be issued soon on topics such as Union Transit and Authorised Economic Operator (AEO) arrangements.

System changes

HMRC expects that some changes to economic operators’ systems will be needed. However this will depend on which authorisations are held and what procedures or processes individual businesses use. A plan for major IT changes are already in place.

The Multi-Annual Strategic Plan (MASP) and supporting legislation contained in the work programme gives:

  • dates by which functional specifications must be provided
  • the proposed implementation dates between 2016 and 2020

In addition to the MASP, a number of other transitional arrangements for IT systems will be introduced. This will balance the transition of new data requirements with the introduction of new IT systems.

Manual Declarations under the UCC

The UCC requires that all exchanges of information (for example, declarations between customs authorities and economic operators) must be electronic. This may result in the removal of Non Inventory Linked Ports and Airports and the phasing out of paper declarations between now and 2019.

Economic Operator Registration and Identification (EORI)

There are no changes to the EORI process. It is a requirement for all economic operators (such as businesses) involved in international trade to be registered and to have an EORI number.

You’ll need to have an EORI number to be able to apply for any customs authorisations, approvals or decisions.

Authorised Economic Operator (AEO)

It isn’t mandatory to become an AEO unless you wish to be authorised for:

  • moving goods in TS between different member states
  • centralised clearance (to be introduced at a later date)
  • waiver of the presentation of goods requirement when making declarations in your records – Entry in Declarants Records (EIDR)
  • self-assessment (to be introduced at a later date)
  • deferment accounts - reduced guarantees for customs duties payable

However, for many authorisations and simplifications within the UCC you’ll need to meet some or all of the customs simplifications AEO certificate (AEOC) criteria. Unless you wish to obtain an authorisation for any of the above (and therefore an AEOC certificate is required), you’ll need to make a commercial decision on whether:

  • AEO certification is for you
  • it’s sufficient for you to prove that you meet the AEO standards

This must be based on the information available, your business activities and your role in the supply chain.

The difference between meeting AEO criteria and being an authorised AEO

There’s little difference apart from the areas where authorisation is a specific requirement. The main difference is that in most cases only some of the AEO criteria have to be met, perhaps only 2 or 3 of the basic conditions. You may not want to go through the whole authorisation process.

AEO doesn’t automatically qualify you for any authorisations but in most cases it can make the authorisation process easier.

For example, if you’re an authorised AEO who wants to expand your business to include customs warehousing, your AEO status wouldn’t automatically qualify you for a customs warehouse authorisation. Further checks will be carried out concerning your new venture but HMRC won’t repeat tests previously done.

There’s no legal power which allows for the substitution of the AEO condition with other conditions (for example, the provision of a guarantee or the imposition of alternative conditions).

The size or complexity of an applicant

AEO is available to anyone involved in the international supply chain where activities are covered by customs legislation. Procedures and processes appropriate to the business must be in place. For example, a micro business could have manual records which would be inappropriate for a larger business.

AEOC criterion

A new condition has been introduced covering competence or professional qualifications in most customs procedures. Also, the current test on compliance with customs rules has been expanded to cover all the taxation elements of your business.

Re-application for AEO

If you’re an existing AEO holder you don’t have to submit a new application, but your authorisation will need to be reassessed to take account of the new conditions. HMRC will contact you when reassessment is due.

HMRC will work with you wherever possible to ensure the new criteria can be met.

The European Commission is currently working with member states to determine the details behind this new criterion. Further information will be published when more is known.

Established for less than 3 years and can’t meet the new competency rules

When considering an application, HMRC take into account the experience available within a business.

For example, if the person in charge of customs matters has been working in the customs field for a considerable period. As long as all other criteria are met, the fact that the business had been established in the EU for less than 3 years would not necessarily be a problem.

If neither the competence nor establishment time limits are met, it’s unlikely that the application would be successful. A business could apply for a Security and Safety authorisation instead, although this won’t provide access to any customs simplifications.

Phasing out the combined (AEOF) certificate

It’s proposed that a transitional provision will be put in place phasing out AEOF over a number of years. Further details will be published soon.

Transitional arrangements for AEO

AEO authorisations will be reassessed using the new AEO criteria before 1 May 2019. Reassessment will focus on difficulties encountered during the original AEO authorisation process and the ability to meet the new authorisation criteria.

The reassessment will form part of the normal monitoring activity for AEO. You don’t need to contact HMRC to obtain reassessment.

Valuation

There are a number of changes proposed to the valuation rules within the UCC. The main ones are to earlier sales, royalties and license fees.

Earlier sales rules

The earlier sale facility will be withdrawn and replaced by a last sale only rule. There will be a transitional measure by which any binding contracts containing a reference to an earlier sales agreement may be used until 31 December 2017.

For these contracts to be eligible for the earlier sale rule they must:

  • be contractually binding
  • contain reference to the earlier sales agreement
  • had been entered into before the IA coming into force (expected to be 20th day following its publication in the Official Journal of the EU)

Full details will be published in a customs information paper shortly.

Royalties and licence fees

Currently, for a royalty fee to be liable to duty it must:

  • relate to the imported goods
  • be paid as a condition of sale of those imported goods

Under the UCC, royalties and licence fees will generally be paid as a condition of the sale of the goods and should be included in the customs value.

Guarantees

Under the UCC there will be some circumstances where the provision of a guarantee is mandatory.

Use form CCG1 to apply for a Customs Comprehensive Guarantee (CCG).

Introduction of mandatory guarantees

Businesses may continue to operate certain regimes or procedures after 1 May 2016 without providing a guarantee until they are changed to a new UCC authorisation and approval. The regimes and procedures concerned are:

  • Inward Processing
  • Outward Processing (OP) with prior importation or under the Standard Exchange System
  • Temporary admissions (TA) where the UCC doesn’t provide for an outright guarantee exemption
  • end use
  • temporary storage
  • customs warehousing

Under the UCC you’ll need a guarantee after authorisation or approval of these regimes and procedures.

You can apply for a CCG using form CCG1.

Businesses can apply for a reduction in the level of guarantee required (if eligible a 0% guarantee or waiver may be granted).

Any new authorisations or approvals granted on or after 1 May 2016 will need to provide a guarantee immediately.

One-off applications for a special procedure such as IP (currently known as simplified authorisations) made using the customs declaration will need a guarantee before the goods are released.

When a guarantee isn’t mandatory

A guarantee will be needed for any actual and potential debts. The only exceptions are for:

  • goods imported using a TA oral declaration
  • Outward Processing (unless prior importation or the Standard Exchange System is used)
  • Inward Processing prior export equivalence

Guarantee levels

The guarantees against a customs authorisation or approval (for example, customs warehouse) must be enough to cover the maximum amount of customs duty applicable to the goods held in the regime or procedure at any in time.

Calculating guarantees

The guarantee limit for the deferment account can be calculated using either:

  • the past deferment account limit
  • evidence of the customs duties and other charges paid over the previous 12 month period
  • projected forecasts of the value of goods to be imported in a month and the highest rate of duty applicable to these goods
  • known purchase orders and invoice values of the goods and the actual duty rate applicable to these goods for each month

When applying for a comprehensive guarantee on an authorisation or approval, you’ll need to complete a schedule detailing the:

  • maximum value of goods held in the regime or procedure at any point in time
  • highest rate of duty applicable to the goods (including any anti-dumping duty which may apply)

This will let you know the maximum amount of customs duty to be guaranteed.

This amount may be reduced or waived depending on the level of comprehensive guarantee authorisation held (100%, 50%, 30% or 0%).

The maximum value of the goods doesn’t always need to be established by proven invoice values. It can also be worked out by using the average value of goods over a given period, or the value of goods covered by an insurance policy or company accounts.

Waivers and reductions

There’s no waiver or reduction available to businesses using individual guarantees (transaction specific guarantees).

Businesses that would like to benefit from a guarantee waiver or reduction will need to apply for a comprehensive guarantee.

Customs will assess the business eligibility for a waiver or reduction. If successful the guarantee requirement may be reduced to 50%, 30% or a waiver for potential debts. The customs duty deferment guarantee may be reduced to 30% for AEOC businesses.

If you hold an AEOC certificate you’ll be eligible to benefit from a 0% guarantee for potential debts and a reduction to 30% guarantee for the deferment account.

Becoming an AEO to obtain a guarantee reduction or waiver

You’ll need an AEOC authorisation to reduce the guarantee to cover the payment of actual debts (for example, reduce the level of deferment guarantee). An AEOC authorisation isn’t necessary to benefit from a waiver or reduction in the level of the guarantee for potential debts (for example, goods held in duty suspension). However certain AEO criteria will still have to be met.

Guarantees for several different authorisations

You’ll need to cover the total volume of goods entered to each procedure by a guarantee, but you don’t need to hold separate guarantees for each. You can choose to apply for a comprehensive guarantee to cover all your liabilities under a single guarantee. Sometimes guarantees can be used in more than one EU member state.

Imports that attract 0% duty under preference

If you place your goods under an authorisation or approval that results in revenue not being paid at the time of import, you’ll need a guarantee to cover the potential duty liability. This will be calculated at the highest applicable duty rate and won’t take account of any preferential duty rates.

Import VAT and excise guarantees

Unless authorisations are held for Simplified Import VAT Accounting Scheme (SIVA) and the Excise Payment Security System, the deferment account guarantee will need to cover these charges where payable.

Guarantees for transit movements will need to cover all duties and charges applicable to the goods.

Guarantees to cover an authorisation or approval that will be used in more than one EU member state will need to cover all duties and charges applicable to the goods.

Guarantees to cover an authorisation or approval (potential debts) that will only be used in the UK will only need to include import VAT in the guarantee where:

  • the authorisation or approval holder isn’t established in the EU
  • the guarantee is being used for a simplified authorisation (for example, old style simplified Customs Procedures with Economic Impact (CPEI) one-off IP) - now known as ‘authorisation on a customs declaration’
  • non-compliance has been identified

Transitional arrangements for guarantees

Comprehensive transit guarantees, reductions or waivers issued before 1 May 2016 can continue to be used until the transit guarantee authorisation is reassessed by customs.

Deferment accounts can continue to be used after 1 May 2016 without requiring reauthorisation. However, you’ll need reauthorisation of the deferment account for a change of legal entity.

You’ll need to meet the UCC comprehensive guarantee criteria to retain the deferment facility and satisfy customs and taxation compliance criteria.

You can continue to use SIVA authorisations after 1 May 2016 until the authorisation is reassessed.

Businesses requesting SIVA authorisations will need to meet the same standards as those required for a guarantee waiver under the UCC (AEOC standards).

Imports

The UCC requires all commercial users to submit their customs declarations electronically. The current paper declaration used by the customs authorities may be phased out in due course. HMRC has issued further information on this change.

Temporary storage

The UCC introduces 4 main changes for TS:

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

If you’re currently approved for TS you won’t need to provide a guarantee on 1 May 2016. You’ll only need to do this when TS premises are reapproved under the UCC. This re-approval must be completed by 30 April 2019.

From 1 May 2016 some of the movements between TS premises will become TS movements and no transit declarations will be needed. However this is dependent on sufficient detail being available in the TS records to identify the goods.

Reauthorisation

If you want to apply to operate a TS facility after 1 May 2016, you’ll need to sign up to the new UCC criteria.

Existing TS operators will have until 1 May 2019 (at the latest) to meet the UCC criteria.

TS declarations

As TS isn’t a customs procedure, no customs declaration is required. However, you’ll need to provide information in a TS declaration. This could be in commercial records, such as inventory records, manifests or transport documents.

The full list of the information you’ll need to give for TS is:

  • goods item number
  • signature/authentication
  • simplified declaration/previous documents
  • additional information
  • documents produced, certificates, authorisations and additional references
  • reference number
  • LRN
  • identification of warehouse
  • declarant
  • declarant identification number
  • representative
  • representative identification number
  • representative status code
  • additional supply chain actor(s) identification
  • location of goods
  • supervising customs office
  • gross mass (kilogram)
  • description of goods
  • type of packages
  • number of packages
  • shipping marks
  • customs code
  • commodity code - combined nomenclature code
  • identity of means of transport on arrival
  • container identification number
  • seal number

Maximum storage time for goods in TS

The UCC is introducing changes to the storage period goods can be held in TS. The changes are that:

  • all goods entered to TS on or after 1 May 2016 will be entitled to a storage period of 90 days
  • the 90 day TS period starts when the goods are declared at the frontier but ends when goods are put into a customs procedure such as the NCTS - the 90 days restarts from day 1 when or if the goods go back into TS

Movement of TS goods

There are a number of options available to enable the movement of goods under TS.

Movements between TS sites in the UK

When moving goods under TS, you must notify the receiving TS operator of the date the goods first entered the TS arrangements and how many of the 90 days remain. Movements between internal temporary storage facility (ITSF) locations can be conducted on the inventory as long as the necessary data is included. You don’t need a transit declaration.

You can conduct movements from an ITSF to an external temporary storage facility (ETSF) on the inventory as long as you include the necessary data in the inventory. Again no transit declaration is required.

Any subsequent movements between ETSFs will need a full external temporary storage transit declaration.

Movements from an ITSF to CFSP designated premises may be made under TS arrangements using a C21 to release the goods from the frontier inventory system. No transit declaration is required in this case.

Any subsequent movements between CFSP designated premises and any movements from an ETSF to a CFSP designated premises will also need a full external temporary storage transit declaration.

Movements between premises using the TS arrangements must have enough information to identify the goods being held within the TS records and inventory systems.

The information must be sufficient to enable examinations and a hold to be placed on the goods prior to their movement (fully describe the goods for targeting purposes).

Simplified customs declarations and meeting the AEOC criteria

Customs Freight Simplified Procedures (CFSP) under UCC

For local clearance exports refer to the section on exports.

Local Clearance Procedures (LCP) imports will become Entry in the Declarants Records (EIDR).

Movement from the frontier to CFSP designated premises

Movement of goods from TS at the airport/port may be permitted under the terms and conditions of CFSP designated premises approval. As an alternative, ETS will be available.

Movements from an ITSF to CFSP designated premises may be made under TS arrangements using a C21 to release the goods from the frontier inventory system. No transit declaration is required.

Applying for simplified customs declaration procedures

You’ll need to provide new information for a simplified customs declaration application. If you haven’t already given this information in your existing authorisation, you’ll need to provide it when your authorisation is reassessed.

The information you’ll need for your SDP application is:

  • type of application - SDP
  • representatives name and address
  • representatives EORI number
  • name and address of the person responsible for customs matters
  • contact details of the person responsible for the application
  • the contact details of the person in charge of the applicant company or exercising control over its management
  • details of place at which the form was signed or authenticated
  • the start date for the authorisation

The information you’ll need for an EIDR application is:

  • type of application - EIDR
  • representative’s name and address
  • representative’s EORI number
  • name and address of the person responsible for customs matters
  • contact details of the person responsible for the application
  • the contact details of the person in charge of the applicant company or exercising control over its management
  • details of place at which the form was signed or authenticated
  • start date for the authorisation
  • location of the goods
  • the time limit after which the goods will be deemed to be released if the customs authorities have not indicated they wish to examine the goods (in respect of a notification of presentation of the goods)
  • how the declaration details for EIDR will be made available
  • eligibility information to qualify for a notification waiver
  • the customs office where the goods will be available for control (in respect of a centralised clearance authorisation)

If you haven’t already given this information for your existing authorisation, you’ll need it when your authorisation is reassessed.

Presentation of the goods

If you hold an AEOC authorisation, you may not need a notification of presentation in every case. However, in this case you’ll need to meet other criteria such as:

  • giving access to your records
  • showing the nature and flow of your goods

Centralised clearance

This is due to be introduced in 2020.

The scope of centralised clearance and exactly how it will work isn’t yet clear as it’s still the subject of negotiations. However, it’s expected that:

  • a declaration will be lodged at an office in the EU member state which granted that authorisation
  • the goods will be presented and imported in another member state

The current Single Authorisation for Simplified Procedures (SASP), which can be seen as a form of centralised clearance, will continue in its current form until centralised clearance is finalised.

However, if a SASP authorisation is combined with an EIDR authorisation, the EIDR restrictions will apply from 1 May 2016.

Centralised clearance is available to any operator as long as they hold an AEOC authorisation and meet any additional conditions that may be in place.

Centralised clearance operating models

It’s expected that there’ll be 4 possible models for centralised clearance. These are:

  • full declaration
  • entry in the declarant’s records with notification
  • entry in the declarant’s records with notification waiver
  • simplified declaration

Applicable VAT rate

Import VAT will be due at the rate applicable in the member state where the goods are imported, not where the declaration is made.

Self-assessment

This is expected to be introduced at a later date.

The scope of self-assessment hasn’t been established and is still the subject of negotiations. However, the principle of self-assessment is that an authorised person will take responsibility for and perform certain formalities or controls normally undertaken by customs.

Self-assessment is available to any operator as long as they hold an AEOC authorisation and meet any additional conditions that may be in place.

The scope of self-assessment

HMRC expects that under self-assessment, economic operators will:

  • manage and monitor their customs activities through their own business account and financial administration and its supporting IT systems
  • determine the amount of import/export duty payable
  • notify customs periodically of the amount of duty payable for the defined period - for example, monthly

The economic operator (or their representative) will be responsible for lodging an import/export declaration. Self-assessment doesn’t dispense with the need to provide a formal declaration. This can only be achieved by obtaining an additional authorisation for EIDR. Some form of periodic return to meet statistical requirements is also likely to be necessary.

Exclusion of prohibited and restricted goods from self-assessment

The extent to which such goods will be included or excluded from self-assessment is still to be determined. National competencies may apply.

Entry In Declarants’ Record

Scope of EIDR

EIDR allows you to enter goods to a customs procedure without the need to provide a full customs declaration at the point of release. It enables operators to manage cash-flow by allowing them to provide fiscal data at a later date.

It also removes the requirement for a supplementary declaration when entering goods to a customs warehouse. However, there will still need to be a way of collecting trade statistics.

EIDR can be used to enter goods to:

  • free circulation
  • customs warehousing
  • Inward Processing
  • Outward Processing
  • end use
  • temporary admission
  • export
  • re-export

EIDR can’t be used to enter goods for:

  • temporary storage
  • Onward Supply Relief
  • transit
  • any special procedure where an INF form is required
  • low value import procedures (LVBI replacement)
  • pre-departure declarations, indirect exports and exports of excise goods

Data and declaration requirements

EIDR (Imports) is the equivalent of the current LCP (imports). The data requirements for 1 May 2016 for an EIDR declaration remains unchanged from those currently required under LCP.

Like LCP, EIDR is a 2-part declaration process. The initial entry in the records followed by a supplementary declaration to be submitted within one calendar month.

You’ll need to provide an electronic notification that the goods have been entered in the records unless a waiver is granted. Statistics will generally be collected, as now, from the supplementary declaration.

Presentation of goods

If you hold an AEOC authorisation, you may not need a notification of presentation in every case. However, in this case other criteria must be satisfied, such as:

  • access to records on request
  • the nature and flow of the goods
  • absence of prohibited and restricted goods

Guarantees

Depending upon the customs procedures used, a guarantee will be required for imports.

Simplified Declaration Procedure (SDP)

Scope of SDP

SDP allows you to enter goods to a customs procedure without the need to provide a full customs declaration at the point of release. It enables operators to manage cash-flow by allowing them to provide fiscal data at a later date. It also removes the requirement for a supplementary declaration when entering goods to a customs warehouse. However, there will still be a need to continue to collect trade statistics.

SDP also removes the requirement for a supplementary declaration when entering goods to low value imports (LVBI replacement) or OSR. These Simplified Frontier Declarations have an increased data set which means a supplementary declaration will not be needed for these goods.

SDP can be used to enter goods to:

  • free circulation
  • customs warehousing
  • Inward Processing
  • Outward Processing
  • end use
  • temporary admission
  • export
  • re-export
  • low value import procedures (LVBI replacement)
  • Onward Supply Relief on removal from customs warehousing

Data and declaration requirements

The data requirements for 1 May 2016 for an SDP declaration remains unchanged from those currently required. It is a 2-part declaration process, the initial entry is followed by a supplementary declaration which must be submitted within one calendar month, unless specifically exempted.

Guarantees

Depending on the customs procedures used, a guarantee will be required for imports.

Returned Goods Relief (RGR)

There are no changes to RGR under the UCC.

Changes to CPEI

CPEI are becoming ‘Special Procedures’ made up of:

  • processing – Inward and Outward
  • specific use – temporary admission and end use
  • transit - external and internal transit
  • storage - customs warehousing and free zones

Most Special Procedures will be subject to some form of transition. All current special procedures authorisations will need to become UCC authorisations by 1 May 2019.

The following CPEI (special procedures) will be unavailable:

  • free zone type II
  • customs warehouse type D
  • Processing under Customs Control
  • Inward Processing drawback system

In addition, the following changes will be introduced:

  • a financial guarantee will be a mandatory requirement for most special procedures authorisations
  • the need to re-export IP goods will be removed
  • compensatory interest will be abolished
  • remote retail sales will be allowed from a customs warehouse

Transitional arrangements for CPEI (special procedure authorisations)

IP drawback authorisations can’t be used to import goods after 30 April 2016. IP (D) authorised businesses who wish to continue to import goods to IP will require a new UCC IP authorisation (including a guarantee).

No goods can be imported to PCC after 30 April 2016. PCC authorisation holders will be able to use their PCC authorisations to import their goods to IP during the transition period. They’ll also be able to use their PCC authorisation until it expires or 30 April 2019, whichever is earliest.

You won’t be able to enter any goods using customs warehousing type D rules of assessment on or after 1 May 2016. However, you’ll be able to use type D warehousing authorisations to import goods to customs private warehousing arrangements during the transition period until the warehousing authorisation is reassessed, or 30 April 2019, whichever is earliest.

Type D warehousing authorisation holders will be issued with a new authorisation number with a prefix of:

  • C (if it is currently only a type D authorisation)
  • E (if it is currently a type E with D)

All entries to the warehouse made after 1 May 2016 must be made in accordance with the UCC rules for a private warehouse, using the normal customs debt rules of assessment.

Authorisations that were granted under the Community Customs Code (Reg. No. 2913/92) can still be used to enter goods to the special procedure until the date of expiry or 30 April 2019 whichever is earliest. This applies for:

  • Inward Processing (suspension)
  • Outward Processing
  • end use
  • temporary admission

Economic operators must have their new authorisation for these procedures in place by 1 May 2019 to retain the special procedure.

Economic operators will need to re-apply for these types of authorisations.

Authorisations for storage that were granted under the Community Customs Code (Reg. No. 2913/92) can still be used to enter goods to the special procedure until the authorisation is reassessed. This covers authorisations for:

  • customs warehousing
  • free zone

The criteria and conditions stipulated in the Code will need to be met when the reassessment takes place. This must be no later than 1 May 2019.

Once Community Customs Code (Reg No. 2913/92) authorisations for Military End Use are reissued as UCC authorisations, the goods (under Council Regulation 150/2003) can only be entered to end use by the Ministry of Defence, under their own authorisation.

Sub-contractors must apply for and use IP instead. Sub-contractors can continue to use their end use authorisations for these goods until the authorisation expires or 30 April 2019, whichever is earliest.

Goods entered to certain special procedures on or before 30 April 2016, but discharged on or after 1 May 2016, must be discharged under the UCC rules. These procedures are:

  • end use (this includes the requirement for a Bill of Discharge to be submitted)
  • customs warehousing (with the exception of type D)
  • Inward Processing (suspension)
  • Processing under Customs Control

Other goods entered to special procedures on or before 30 April 2016, but discharged on or after 1 May 2016, must be discharged under the Community Customs Code (Reg No. 2913/92) rules. The procedures involved are:

  • Inward Processing drawback
  • temporary admission
  • customs warehousing type D
  • Outward Processing

Goods entered before 1 May 2016 to a type D customs warehouse can only be removed using the type D rules of assessment until 31 December 2018.

Authorisation by the submission of a declaration

Authorisation of a declaration for a special procedure (other than customs warehousing and transit) remains available under the UCC.

UK policy is to limit this form of authorisation to 3 times a year for each operator. Any entries by this method made on or after 1 May 2016 will require a guarantee and be accepted under UCC rules.

Submission of an application for special procedures

Where an authorisation has a specific end date, the authorisation holder should submit their application at least 30 days before the authorisation is due to expire. HMRC won’t remind you that the authorisation is due to expire.

Where an authorisation has no specific end date, HMRC will contact you and arrange the reassessment of your authorisation. Only contact HMRC if you want to vary the terms of your customs warehousing authorisation (for example, by the use of retail sales).

If you want to vary your authorisation, your application should be submitted at least 60 days before the date on which you wish to start your new activities.

Guarantees: special procedures

The special procedures sections below explain the new guarantee requirements for special procedures. Although mandatory guarantees were introduced on 1 May 2016, they won’t apply until your authorisation has been reassessed or reissued as a UCC authorisation.

INF Forms

INF forms 1, 2, 5 and 9 will remain and will eventually become electronic.

Electronic movement of goods under special procedures

Under Article 6 of the UCC, any communications between member states and economic operators must be electronic. The movement of goods under a special procedure can be carried out without customs formalities and aren’t subject to the requirements of Article 6.

‘VAT-only’ special procedures

Goods that are only liable to import VAT can be declared to IP and TA if the reason for using the relief isn’t purely cash-flow. However, a guarantee will be needed so operators may want to consider if it’s economically viable to use the relief when goods are duty free. Policy on other special procedures is still under consideration.

Inward Processing

Guarantees

To operate IP after 1 May 2016, you’ll need to provide a financial guarantee, subject to any transitional arrangements. If you can meet certain criteria, you may be able to obtain a guarantee waiver or reduction.

Re-exporting processed products

The requirement to re-export processed products has been removed, as has the compensatory interest applicable when goods are released to free circulation.

With removal of the re-export requirement and compensatory interest, you’ll normally be able to choose how the amount of duty payable on release to free circulation can be worked out. This can be on the basis of either:

  • imported goods
  • processed products

IP drawback authorisations

The drawback arrangements were withdrawn on 1 May 2016. While goods can’t be entered to drawback on or after 1 May 2016, goods entered into drawback before that date can be kept under the procedure until the expiry of the throughput period.

Provided that the goods are correctly disposed of (for example, by export), drawback claims can be submitted and duties repaid.

Simplified discharge arrangements for civil aircraft

The scope of the current discharge simplifications for civil aircraft currently available under Article 544(c) CCIP, has been expanded to encompass all aircraft. This measure has been introduced prior to the UCC being implemented by Regulation (EU) No 1223/2014 of 14.11.14 (OJ L 330/37 15.11.14).

Customs warehousing

Guarantees

Subject to any transitional arrangements, to operate a customs warehouse after 1 May 2016 you’ll need to provide a financial guarantee. If you can meet certain criteria, you may be able to obtain a guarantee waiver or reduction.

Type D customs warehouses

You can’t enter goods to a type D customs warehouse on or after 1 May 2016. However, if you entered goods before that date they can be kept under type D arrangements until they are correctly disposed of (for example, by release to free circulation).

The charging rules appropriate at the time of entry can be kept until 1 January 2019.

Retail sales from a customs warehouse

From 1 May 2016 and in addition to those sales currently permitted, you can make retail sales from the premises of a customs warehouse provided that it’s by:

  • the internet
  • catalogue
  • any other distance selling method

You can’t invite customers into the premises of the customs warehouse to make face to face retail sales. Sales are permitted to both EU and third country customers.

Your authorisation must be reissued as a UCC authorisation before you start retail sales.

End use

Guarantees

Subject to any transitional arrangements, to operate end use after 1 May 2016 you need to give a financial guarantee. If you can meet certain criteria, you may be able to obtain a guarantee waiver or reduction.

Bill of Discharge

A periodic return has been introduced. It is similar to the Bill of Discharge currently used under IP and applies from 1 May 2016.

Temporary admissions

Waivers or reductions for guarantees taken for TA

Where a comprehensive guarantee is used a waiver or reduction may be available.

Retroactive authorisations for persons not established in the EU

Retrospection is primarily based the conditions for relief. Where an authorisation can normally be issued to a non-EU person, an application for a retroactive authorisation by a third country person is allowed.

Transit

Abolition of UK national transit simplifications using port/airport inventory systems

From 1 May 2016 UK national transit simplifications used in port/airport inventory systems ended. The movements between TS premises that were covered by the national transit simplification become TS movements. The TS section gives details on how this operates.

Level 1 and level 2 air and sea simplified procedures

Air and sea level 1 and 2 paper based simplifications will end under the UCC once IT systems are in place.

Transport documents used as a transit declaration

Current authorisations can continue to be used until they are re-assessed by 1 May 2019.

Anyone wishing to apply to use an ‘electronic transport document’ as a transit declaration after 1 May 2016 will need to use electronic systems immediately.

Anyone currently using a mix of electronic and paper simplifications should move to an electronic system as soon as possible. This will trigger UCC re-authorisation which will include AEO criteria. The electronic system already in use must continue to be used.

If you use an electronic system now and the data elements for the electronic transport document differ, you’ll have until 1 May 2019 or until reassessment to add these to your systems.

If you currently use paper simplifications, you’ll need to include any additional data elements under the UCC on the paper document from 1 May 2016 until you’re reassessed for an electronic system.

Other transit simplifications

The current simplifications for authorised consignor, authorised consignee and the use of seals of a special type, will continue to be available. There’ll also be a new simplification allowing the use of a customs declaration (on the ETS) with reduced data requirements.

This will be available to operators of rail, air and sea transport. The simplification will be introduced at a later date when the ETS system has been changed.

You won’t need to hold an AEO authorisation to apply for transit simplifications. However, you’ll need to demonstrate that you can meet certain AEOC criteria.

Movements between the UK and the Channel Islands or other special fiscal territories of the EU

The T2F transit procedure will no longer be needed for direct movements of Union goods between EU special fiscal territories (for example, the Channel Islands) and a single EU member state.

The T2F procedure will still be needed for EU goods moved from one of the special fiscal territories if the movement ends in an EU member state other than the EU member state of first entry into the EU. For example, goods from the Channel Islands arriving in France for a final destination in the UK.

Proof of Union Status (PoUS)

Electronic T2L

Following the introduction of the EU PoUS system:

  • T2Ls and T2LFs will have to be submitted using the electronic system
  • customs manifest and invoice declarations can only be used for goods under the value threshold of €15,000

Under the UCC, you can become an authorised issuer of PoUS for:

  • customs manifests up to the value threshold of €15,000
  • T2Ls and T2LFs of any value

If you want to be an Authorised Issuer for PoUS under the UCC you’ll need to have:

  • a satisfactory compliance history in customs and other taxation areas
  • agreed access to your commercial and customs records
  • satisfactory procedures for managing customs documentation
  • adequate IT security to protect systems and data.

Exports

Export goods using a Single Transport Contract (STC)

STC will stay under the UCC. An authorisation for STC isn’t needed, but excise goods and Common Agricultural Policy refund goods are excluded from using STC.

Presenting an Export Accompanying Document (EAD) at the office of exit

A paper version of an EAD will no longer need to be presented at the office of exit with the goods. Instead, you only need to let the office of exit know the Movement Reference Number of the export declaration when you present the goods for exit from the EU. You may wish to continue to take an EAD with the goods during the IT transition period to the UCC.

Export simplifications

The SDP will stay under the UCC (the SDP section gives additional data requirements).

LCP exports are being removed under the UCC. HMRC is considering alternative methods and will contact traders authorised for LCP direct.

A new simplified EIDR will operate under the UCC from 1 May 2016 (the EIDR section gives details of the data requirements).

EIDR can only be used for direct exports, non-excise goods and where a pre-departure declaration is waived.

Export transit movements

The changes to exports that require a transit movement under the UCC are:

  • when a non-excise export is entered to the transit procedure, the customs office of departure is the customs office of exit
  • non-excise goods placed under external transit are exited from the Union when they are put under the external transit procedure
  • where excise duty suspended goods are moving under transit, the customs office of exit remains the competent office where goods leave the territory of the Union

Right to be heard: exceptions

The introduction of the ‘right to be heard’ in the UCC for adverse customs decisions won’t apply where:

  • the application for a decision, including the application for registration and assignment of an EORI number, may not be accepted
  • the customs authorities notify the person who lodged the entry summary declaration for containerised maritime and air traffic, that the goods are not to be loaded
  • the decision concerns a notification to the applicant of a Commission decision as referred to in Article 116(3) of the Code
  • an invalidation of an EORI number occurs
Published 24 October 2014
Last updated 3 March 2017 + show all updates
  1. Paragraph about transitional arrangements for guarantees has been updated.
  2. The temporary storage guidance has been updated because of the implementation of the Union Customs Code.
  3. This guide has been updated to reflect the latest information on the introduction of Union Customs Code.
  4. Provides further updates on the planned changes to import and export procedures under the new Union Customs Code (UCC).
  5. First published.