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HMRC internal manual

Customs Authorisation and Approval

HM Revenue & Customs
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Criteria and Conditions of Authorisation or Approval: Matrix of criteria required for Processing

Generic Criteria, mapped against AEO standards UK Explanation of the criteria Required Y/N Legal Basis for criteria
Compliance History of Applicants      
The absence of any serious infringement or repeated infringements of customs legislation and taxation rules, including no record of serious criminal offences relating to the economic activity of the applicant by any of the following persons: Demonstrate a good compliance history in customs and other taxation areas including the absence of serious or repeated irregularities or criminal offences (including the legal entity and any company officials).  Y A.211(3)(b) A.211(4)(a)Code  
The criterion referred to above shall be considered as fulfilled where the decision-taking customs authority considers any infringement to be of negligible importance, in relation to the number or size of the related operations, and not such as to create doubts concerning the good faith of the applicant. Customs may consider applications from companies with a past history of non-compliance where these are deemed to have a negligible impact on the procedure applied for. Y A.211(3)(b) A.211(4)(a)Code  
Management of customs operations, including internal controls and record keeping      
The demonstration by the applicant of a high level of control of his or her operations and of the flow of goods, by means of a system of managing commercial and, where appropriate, transport records, which allows appropriate customs controls Effective internal controls to manage customs processes and regimes including the maintenance of appropriate documents and records. Y A.211(3)(b) A.211(4)(a)Code  
Maintain an accounting system which is consistent with the generally accepted accounting principles applied in the Member State where the accounts are held and which will allow audit-based customs control. Records kept for customs purposes shall be integrated in the applicant’s accounting system or, at least allow the cross check of information with the accounting system and in such a way enabling all relevant information to be made available. The accounting system shall maintain a historical record of data that provides an audit trail from the moment the data enters the file; Clear audit trails of the import, export, movement and transfer of goods within customs procedures.  Clearly documented audit trails between customs declarations, stock records and commercial documentation. Y A.211(3)(b) A.214Code 
Allow the customs authority physical and/or, where required by law or depending on the form in which the records are kept, electronic access to its customs and, where appropriate, commercial and/or transport records Access provided at an agreed place of business to the commercial and customs records necessary to verify the use of the procedure.    
Where necessary, remote electronic access is to be provided to commercial systems. Y A.211(3)(b) A.211(4)(a)A.214Code   
Have a logistical system which identifies and distinguishes between Union and non-Union goods and, where appropriate, their location, except in the cases where the applicant applies for an AEOS; Clear audit trails to identify Union and non-Union goods and their locations (as appropriate) Y A.211(3)(b) A.211(4)aA.214Code 
Have an administrative organisation which corresponds to the type and size of business and which is suitable for the management of the flow of goods, and have internal controls capable of preventing, detecting and correcting mistakes and of detecting illegal or irregular transactions; Appropriate internal management controls to verify the accuracy of customs declarations, ensure the correct operation of procedures and to identify and correct irregularities/ mistakes Y A.211(3)(b)Code
)Where applicable, have satisfactory procedures in place for the handling of licences and authorisations connected to commercial policy measures or to trade in agricultural products; Procedures for administering licences, health certificates, preferential origin documentation and other official documentation relating to the import and/or export of  goods N  
Have satisfactory procedures in place for the archiving of the company’s records and information and for protection against the loss of information; Have appropriate retention procedures in place to manage the archiving of all documentation relating to the import, movement, transfer, transit and export of non-Union goods as required by customs legislation Y A.211(3)(b)A.214Code 
Ensure that relevant employees are made aware of the need to inform the customs authorities whenever compliance difficulties are discovered and establish suitable contacts to inform the customs authorities of such occurrences; Procedures in place to inform employees, agents and third parties of the requirements of the customs procedure and ensure mechanisms are in place for any irregularities/ mistakes to be notified to the customs authorities N  
Have appropriate information technology security measures in place to protect the applicant’s computer system from unauthorised intrusion and to secure the applicant’s documentation; Adequate IT security measures to protect systems and data, e.g., firewall, antivirus programme, password protection N  
Where applicable, have procedures in place for the handling of import and/or export licences connected to prohibitions and restrictions, including measures to distinguish these goods from other goods and to ensure compliance with these prohibitions and restrictions. Procedures in place to manage licences relating to prohibitions and restrictions and adequate management controls to ensure health and safety and compliance in this area. Y A.211(4)(a)Code
Guarantees are mandatory for this type of application      
Practical experience and competency in customs operations      
With regard to the authorisation referred to in point (a) of Article 38(2), practical standards of competence or professional qualifications directly related to the activity carried out; Demonstrate a good understanding of customs procedures and operational requirements Y A.211(3)(b)Code  
For the practical standards of competence: Have practical experience in the import, export, movement, transfer or transit of goods Y A.211(3)(b) Code 
A minimum of three years practical experience in customs matters has been ascertained; or For businesses with less than 3 years trading history:·        Understand the obligations of operating the customs regime and demonstrate how the terms and conditions will be adhered to·        Demonstrate a good understanding of the obligations involved in importing, exporting, using transit (as appropriate) Y A.211(3)(b) Code 
Security and Safety of the supply chain criteria do not apply to this type of application      




Bespoke Requirement applicable to Processing    
Bespoke Requirements UK Explanation of the criteria Legal Basis for criteria
Appropriate system for the management of transfer of rights and obligations You may request to transfer the rights and obligations for goods placed under the processing procedure fully or partially from your supervising office. If approved the Supervising office will establish the conditions for such transfer e.g. IP EX/IM  A.218 Code
IA  A.266    
  Period of validity Authorisations for Processing shall be valid for a maximum of five years from the date the authorisation takes effect.
The period of validity referred to above shall not exceed three years where goods are covered by Annex 71-02. DA  A.173    
  Appropriate system for the management of the movement of goods within processing Detailed records should be kept for the movements of goods A.219 Code

DA  A.179

IA   A.267      
  Rate of Yield Customs authorities will set the rate or average rate of yield. You must submit details of the process, rate of yield and how this can be supervised with your application A.255 Code
  Economic tests If your goods require an economic test you should send your application to your supervising office. DA A.166

DA A.167

IA A.259      
  INFs An INF will be required if you are applying for IP EX/IM,OP EX/IM .If you are applying to use IP or OP IM/EX which involves more than one MS you must use an INF. DA  A.176

DA  A.181

IA   A.271      
  Bills of Discharge A bill of discharge will be required for goods entered to IP IM/EX, IP EX/IM (if an INF is not used). DA  A.175
IA    A.265    
  Throughput period – periods for discharge You should request the period you wish in order to discharge the procedure.(the period you require to process the goods)
  A.257 Code

DA  A.174

IA    A.324      
  Equivalence Equivalence may not be used under IP where only a usual form of handling is being carried out. A.223 Code

DA  A.169

IA    A.268

IA    A.269      
  Usual Forms of Handling Usual forms of handling are defined in Annex 71-03-DA A.220 Code

DA  A.180

Annex 71-03-DA      
  Temporary re-export You may temporary re export IP goods to undergo further processing and re import A.258 Code
  Standard exchange system You may import a processed ‘replacement’ product to replace a processed product under OPR A.261 Code
  Prior import of replacement products The authorisation shall specify the period within which the Union goods, which are replaced by equivalent goods, shall be placed under outward processing. The defective goods must be exported within two months following the arrival of the replacement products.

In the case of outward processing IM/EX the authorisation shall specify the period within which the Union goods, which are replaced by equivalent goods, shall be placed under outward processing.

 The period shall not exceed 6 months. This period may be extended but the overall total period cannot be more than one year. A guarantee shall be provided covering the amount of the import duty that would be payable should the replaced Union goods not be placed under outward processing. A.262 Code
DA  A.242      
  Goods repaired free of charge The goods must be capable of being repaired and not used to increase technical performance. Evidence of the contractual or statutory guarantee, manufacturing or material defect will be required. A.260 Code
DA  A.243  
  Specific records requirements:

·        Provide audit trails between goods, commercial documents, customs declarations and authorisation reference numbers

·        Identification marks of goods and commercial documents

·        Location and movement of goods

·        Customs status of goods

·        Particulars of UFH

·        Costs of UFH where these affect the customs value and duty calculations (a.86(1))

·        Rate of yield

·        Audit trails and commercial documents to support supervision of the process and goods

·        Records to demonstrate and supervise transfers of rights and obligations You are required to keep detailed records including the list opposite for the period of your authorisation
  A.214 Code
DA  A.178      
  VAT only You may not claim OPR if the goods are only subject to VAT VAT Regulation 1995 2518 s 120