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HMRC internal manual

Guidance on the Audit of Customs Values

From
HM Revenue & Customs
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Meat: what are meat quotas?

By Regulation, the Council of the EC authorised the opening of a quota for high quality, fresh, chilled or frozen beef or veal. This arrangement is known as the ‘Hilton’ scheme. Quota is allocated by the EC to the exporting countries (Australia, Argentina, Uruguay and USA) benefiting from the scheme. These exporting countries control their respective quota allocations by the issue of certificates of authenticity. The certificates are specific to particular consignments of meat intended for export to the EC. They confirm that the meat conforms to the quality requirements for quota. The certificates are not transferable.

Importers who hold a certificate of authenticity can claim a total suspension of import levy. This represents a considerable saving. Thus, not unexpectedly, exporters charge higher prices for meat sold with such a certificate. The charge can be as much as 66% of the price of the meat. The charge may be included in the invoice price of the meat; or shown separately on that invoice, or can even be invoiced separately.

For customs purposes the treatment of payments made for certificates of authenticity is to be considered under the provisions of Article 29 of the Code.

The European Court Judgement in Case No 219/88 (Malt) ruled that, for the purposes of Article 29(1) and (3) of the Code, when determining the value of imported Argentinean beef the amounts paid to the seller for certificates of authenticity, in addition to the price of the goods, must be regarded as part of the customs value.

Article 33(1)(f) of the Code must be interpreted as meaning that the amounts paid for certificates of authenticity must not be regarded as charges paid in the EC by reason of importation, whether or not they are shown separately from the price actually paid or payable (CVS Conclusion 15 also refers).

Practical Application

Payments made to the seller in respect of certificates of authenticity must be included in the price paid or payable. The fact that they are shown separately on the invoice does not exclude them from the customs value.

Charges made for certificates of authenticity may in some instances be invoiced separately. Therefore, it is important to ensure that any payments made have been correctly included in the customs value.