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HMRC internal manual

Customs Special Procedures Manual

Transfer of Rights and Obligations movement of goods under the Union Customs Code

Special Procedure - Transfer of Rights and Obligations movement of goods under the Union Customs Code

 

1. Background

Following discussions in the special procedures expert group the commission has revised guidance including the transfer of rights and obligations (TORO) of goods along a supply chain under End Use Relief.

The revised guidance can be found at Union Customs Code (UCC) - Guidance documents.

2. General information

TORO doesn’t require the transferee to have a special procedures authorisation. In principle two different procedures can be used for TORO:

  • from the holder of a special procedures authorisation (who has also a TORO authorisation) to a transferee who doesn’t have any authorisation
  • from the holder of a special procedures authorisation (who has also a TORO authorisation) to a transferee who has a TORO authorisation

2.1 TORO from the holder of a special procedures authorisation to a transferee who doesn’t have any authorisation

The transferee doesn’t have any authorisation relating to TORO. In this case the holder of the special procedures authorisation needs to provide information about the discharge of the procedure in his bill of discharge. This requires in many cases exchange of commercially sensitive information between the (subsequent) transferee(s) and the holder of the special procedures authorisation. The transferee doesn’t have an obligation to provide information about the discharge of the procedure to customs.

This type of TORO can be used both for partial and full TORO.

2.2 TORO from the holder of a special procedures authorisation to a transferee who has a TORO authorisation

The transferee needs to be granted a TORO authorisation before any transfer of rights and obligations can take place.

In this case the holder of a special procedures authorisation needs to provide information on the TORO in his bill of discharge or, where a bill of discharge is not required, in his records. He doesn’t have to provide information on the actual discharge to customs. There’s no need to exchange (sensitive) information between the transferee(s) and the holder of a special procedures authorisation. The transferee must provide information on the discharge or on a subsequent TORO to his supervising customs office. The transferee should provide information on the discharge or on a subsequent TORO to this supervising customs office within 30 days after the expiry of the time-limit for discharge or, in case of customs warehousing, within 30 days after the day on which TORO took place.

  1. The transferor’s responsibility for the goods subject to TORO can cease completely at the time of transfer based on the conditions of the transfer. Thus, a holder of an end-use or inward processing authorisation should provide information in the bill of discharge about a full TORO which means that the transferee became the holder of the procedure. Consequently the holder of the end-use or inward processing authorisation doesn’t have any rights and obligations after the transfer regarding the goods which were released for the end-use or inward processing procedure under coverage of his end-use or inward processing authorisation.
  2. Where TORO involves more than one member state a prior consultation of the member states concerned is necessary.
  3. The obligations that are transferred include the obligation to discharge the procedure within the period for discharge (not relevant for customs warehousing). The information about the discharge or another TORO must be submitted by the transferee to his supervising customs office.
  4. If an end-use or inward processing authorisation includes a rate of yield, then the rate of yield may be adjusted (see paragraph 2 of Article 255 UCC).

This type of TORO can only be used for a full TORO.

3. Procedure

In order to undertake a full TORO under end-use using option 2 as described above:

  • a guarantee must be provided by the importer to hold the end-use authorisation - TORO applicants won’t be issued with an end-use authorisation
  • if goods are sent to a processor that processor must have a TORO authorisation (applied for in advance of the import)
  • the processor must provide a comprehensive guarantee to use at the time of TORO - upon receipt of the guarantee from the processor the importers guarantee is released
  • the TORO authorisation can be granted before the goods are imported and doesn’t have to be for named processors
  • the processor can only benefit from TORO if they have a TORO authorisation and they have put up a guarantee - this can apply for one member state or multiple member states
  • the importer must submit the Bill of Discharge (BoD)
  • the transferee must inform the customs supervising office the procedure has ended or another TORO has been approved within 30 days after the expiry of the time limit for discharge
  • the importer (holder of the authorisation) must indicate in their BoD the information regarding the TORO
  • to use the TORO in this way the TORO form in the guidance must be used the:
    • TORO authorisation holder sends copy 1 to the transferor and copy 2 to their supervising office
    • TORO authorisation holder retains copy 3
    • importer’s end-use authorisation number and the TORO authorisation would be required on any documents
  • the processor can’t process more goods than the guarantee allows - if the processor has exceeded the guarantee amount a debt is incurred

Further details are contained in the guidance. Although the case details fish importers or processors the concept will be extended to any traders as long as the conditions above are followed.

4. Guidance

HM Revenue and Customs (HMRC) have been asked to provide specific information on the scenarios below.

Example 1

Company A imports to inward processing (IP) and sends goods to another Company B, also authorised for inward processing.

This is not a TORO but a movement.

Company A may discharge their liability if Company B makes a declaration to inward processing and Company A receives details of that declaration and notes it in their records and also on their bill of discharge.

The declaration could be by entry in records or a standard customs declaration. Company B discharges his liability by making a standard declaration either to free circulation or re-export which is noted in his records and his bill of discharge.

Example 2

Company A imports to IP and then enters the goods to customs warehousing (CW).

This is not a TORO but a movement.

Company A can only discharge their IP liability when the goods move to the customs warehouse if a declaration is made to customs warehousing by the holder of the procedure/holder of the customs warehouse authorisation (depending on the type of customs warehouse).

In the situation above if Company A imports to IP and then enters the goods to customs warehousing. Company B removes goods from the customs warehouse to their own inward processing authorisation,

This will discharge Company A’s liability as long as a declaration is made from the warehouse to Company B’s IP authorisation and noted in the records of Company A and on their bill of discharge. This is also not a TORO.

So for movements between the same type of authorisations i.e. IP to IP, CW to CW TORO may apply if the transferee doesn’t hold an authorisation but is named in the holder of the authorisations approval.

If the transferee holds their own authorisation or the procedures are different i.e. IP to CW, and the transferor of the goods wishes to discharge their liability then as long as a customs declaration is made by the transferee this will discharge the transferor’s liability. For customs warehouse to customs warehouse a declaration must be made by both transferee and transferor.

These are movements not TORO.

Example 3

Under end use relief - to move goods between 2 parties there must always be a TORO. You cannot move goods between 2 end-use authorisation holders and discharge liability by making customs declarations as only one customs declaration is permitted at import and only the obligations can be transferred.

Example 4

Companies may wish to enter goods to external transit to move goods this will discharge their liability as transit is a special procedure as long as evidence is held that the transit movement had been discharged.

 

5. Contact details

For further information please email: customs special procedures and reliefs.

Issued on 12 July 2017 by Customer Strategy and Tax Design, Customs Directorate, HM Revenue and Customs (HMRC).

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