Inward Processing - conditions and requirements: Secondary Processed Products (SPPs)
Secondary processed products (SPPs) are any by-products that are left over as a result of producing the main processed products. Operators may consider these waste or scrap but if there are any by-products produced they must be clearly identified on the application as SPPs and taken into account when the rate of yield is set.
Waste and scrap resulting from IP goods destroyed under customs supervision may also have a commercial value. The authorisation holder must apply in writing for customs approval to destroy goods (unless otherwise notified by their authorising office in their authorisation letter). Requests must be submitted in sufficient time (usually five days) for the supervising office to consider whether there should be customs attendance at the destruction time. If the scrap resulting from destruction has a value, customs duty and import VAT will be due on the value of scrap and at the rate applicable to the scrap if it is released to free circulation. This liability can be discharged if the scrap is re-exported.
By-products are not the same as production losses (see SPE13015 ‘Production losses’) and may be of considerable value or of no value at all.
If any SPPs are produced there will be a duty liability on the amount of goods that were entered to IP that are contained in the SPPs. This duty liability is calculated at the duty rate applicable to the goods entered to IP on the value of those goods contained in the SPPs.
*Council Regulation (EU) 952/2013, Article 211; *Commission Delegated Regulation (EU) 2015/2446, Annex A, Title I, Applications and decisions, Chapter 2, 5/7; Commission Implementing Regulation (EU) 2015/2447, Article 324; Notice 3001/2015, Annex D, Section 4.9