How to use Union Transit to move non-EU goods within the EU and to move goods to or from the special territories.
Union Transit (UT) is a customs procedure that allows goods not in free circulation - non-Union goods - to move between 2 points within the EU, while customs duties or other charges are suspended.
UT also controls the movement of goods to or from the ’special territories’ which are:
- the Aland Islands
- the Canary Islands
- the Channel Islands
- French Guiana
- Mount Athos
UT is also used to control the movement of certain goods between the EU and Andorra and between the EU and San Marino.
Once UT goods arrive at a destination the goods must be presented to customs at the office of destination and the movement ended. The goods mustn’t be moved elsewhere before they’re entered into another customs procedure. Transit declarations are processed on the New Computerised Transit System (NCTS) used by all EU and Common Transit (CT) countries.
Common terms and processes in UT and CT
CT extends the UT procedure to both Union and non-Union status goods moving to, from, through or between the countries that have signed the Common Transit Convention.
UT covers movements between:
- the territory of the EU
- the special territories of the EU
- San Marino
CT covers movements between:
- the territory of the EU
- CT countries
Contracting parties for the Common Transit Convention are the EU and the European Free Trade Association (EFTA) countries:
Andorra and San Marino are outside both the EU and CT, but UT is required when moving goods to or from San Marino and when moving goods of chapter 25-97 of the Harmonised System (industrial goods) to or from Andorra.
Status of goods moving under UT
Goods moving under the UT procedure have a defined status.
External UT procedure or T1 status applies to the movement of non-Union goods - goods not in free circulation - between EU member states. It also applies in certain circumstances to the export of Union goods, where a refund of duties applies - for example Common Agricultural Policy (CAP) goods and whisky.
Internal UT procedure or T2 status applies to Union goods moving from one member state to or through a CT country, Union goods moving to or from San Marino or Union goods to or from Andorra (this only applies to goods of Tariff Chapters 25 to 97 of the Harmonised System - industrial goods).
Internal UT procedure or T2F status applies to Union goods moving to, from or between the special territories.
You can read more about Union and Common Transit procedures in volume 3 of the Trade Tariff.
Payment of Customs Duty and other charges is suspended while goods are in UT or CT. A guarantee must be provided to secure any potential customs debt which is equal to the value of duties and other charges.
Customs treatment of goods carried by sea in the Union differs according to whether the goods are carried on an authorised regular shipping service or a ‘non-regular shipping service’.
Goods carried by an authorised regular service are deemed to be Union goods and don’t need proof of their status. Non-Union goods carried are subject to the CT procedure and require a guarantee.
The European Commission’s Transit Manual gives full guidance on all aspects of UT and Common Transit.
There’s also guidance in the New customs transit systems for Europe.
Movement of goods under UT
Goods that can be moved between EU member states without restriction are described as being in free circulation or Union goods. Imports into the EU are put into free circulation once all the customs duties have been paid on them and import formalities completed. Goods that originate within the EU are in free circulation, unless a CAP or whisky export refund has been claimed on them.
Union goods don’t normally require UT declarations or evidence of customs status to move within the EU. Goods moved directly from one EU member state to another are regarded as Union goods unless there is evidence to suggest otherwise. Non-Union goods must remain under customs control when moved between EU member states, normally using CT.
Checklist to help confirm the customs status of your goods
|Where are the goods from||Customs status||Relevant transit status|
|Outside the EU||No duties paid or formalities completed yet||Non-Union goods - not in free circulation - and must remain under customs control|
|Outside the EU||All duties paid and formalities completed||Goods in free circulation. UT is required only if they’re to be moved to one of the special territories. Common Transit can be used if the goods are to be moved to or through any Common Transit countries.|
|Inside the EU, made from materials or parts from outside the EU that were put into free circulation||No duty to pay||Goods in free circulation. UT is required only if they’re to be moved to one of the special territories. Common Transit can be used if the goods are to be moved to or through any Common Transit countries.|
|Inside the EU, made from materials or parts from outside the EU that haven’t been put into free circulation - for example- parts which qualify for Inward Processing||No duty paid||These parts are non-Union goods - not in free circulation - and must remain under customs control|
Enforcement and penalties
HM Revenue and Customs (HMRC) is responsible for the enforcement of UT legislation. For general help and advice, contact the VAT Helpline.
Customs civil penalties apply to breaches in the rules and regulations in UT. Traders may receive a warning letter or have to pay a penalty. You can read about how civil penalty schemes work in Notice 300: customs civil investigation of suspected evasion.
The New Computerised Transit System
The NCTS processes a trader’s electronic customs transit declarations. It’s mandatory for traders using UT and CT to make their declarations using the NCTS, which is used by all the member states of the EU and CT countries.
Paper declarations are only allowed during fallback, when transit declarations can’t be made on the NCTS system, and for private travellers with goods in excess of their duty free allowances.
Temporary storage prior to making declarations to customs
If you import third country goods into the UK, they may be stored temporarily in customs approved premises until they’re assigned to a customs approved treatment or use. These approved premises are situated within ports or linked to particular ports or airports.
The main types of approved premises are:
- Transit Sheds - Internal Temporary Storage Facility (ITSF)
- Remote Transit Sheds - Internal Temporary Storage Facility Remote (ITSFR)
- Enhanced Remote Transit Sheds - External Temporary Storage Facility (ETSF)
There’s further guidance in the article on temporary storage for imports or more detailed guidance in the Temporary Storage and Approved Depositories TDSA manual.
Union Transit documentation
As a general rule UT declarations must be made electronically using the NCTS. Once the declaration is accepted and processed, the system will create the Transit Accompanying Document (TAD) in case the goods are diverted, or if there are any incidents during the transit operation. The TAD can be printed out at the customs office of departure or, if your printer can accommodate barcodes, at your own premises.
Paper declarations are only allowed during fallback, that is, when the NCTS is unavailable for private travellers with goods in excess of their duty free allowances. The document used in these circumstances is the Single Administrative Document (SAD) form C88 .
Transports Internationaux Routiers (TIR) is based on an international agreement, not EU regulations, and isn’t part of UT or CT.
The document T5 (form C1125) is used to control a selection of goods subject to taxes, restrictions or refunds on export from, or import to, the Union and to provide proof those goods arrive at a particular destination, or are disposed of in a particular way. You can also get the document T5 (form C1125) by contacting the VAT Helpline.
Traders should also be aware goods must also be accompanied by the correct import and export licences, if necessary.
Organisations that can help
TIR controls movements of both Union and non-Union status goods being imported or exported by road in approved vehicles and containers. The TIR procedure can be used in any of the 55 countries that have adopted the TIR Convention. Goods moved under TIR can cross the frontiers between these countries without the need to start/end a new transit procedure or to unload/reload the contents of the vehicle or container.
You must be approved to use the TIR process, which only applies to movements that involve crossing the territory of a third country. Like UT procedures, TIR declarations must be made into the NCTS.
For general help with the NCTS, you can contact the NCTS Helpdesk.
You can also write to them at the following address:
HM Revenue and Customs
Trade association help
Your trade association may be able to help with information for your kind of business. You can search for trade associations on the Trade Association Forum website.
The British Chambers of Commerce also offer information and events on global trade topics. Find your local Chamber on the British Chambers of Commerce website.
For general help and advice, contact the VAT Helpline.
If you have a complaint or suggestion, you should try to resolve it with your local customs office first. You also have the right to a formal departmental review at HMRC. You may also have the right to ask for a hearing at a Tax and Duties Tribunal, which are based in London, Manchester and Edinburgh.
If the issue is not resolved to your satisfaction, you can ask the independent adjudicator to look into it. You can call the Adjudicator’s Office Enquiry Line on Telephone: 0300 057 1111.