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New EU Customs Code comes into force

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The new Union Customs Code (UCC) came into force on 1 May 2016 across the EU to introduce a ‘simpler, faster and safer customs union’. The UCC represents a major overhaul of existing EU customs legislation, which dated back to 1992. The new legislation aims to:

·       streamline customs legislation and procedures across the EU;

·       offer greater legal certainty and uniformity to businesses and increase clarity for customs officials;

·       simplify customs rules and procedures to make customs transactions more efficient and modern;

·       complete the shift to a paperless and fully electronic and interoperable customs environment; and

·       introduce more speedy customs procedures for compliant and trustworthy businesses.

Key changes for businesses to consider include the following:

·       The need to obtain new authorisations or renew existing authorisations to use customs simplification procedures: Operators not meeting authorised economic operator (AEO) standards or gaining AEO accreditation will not be approved for entry into declarants’ records or the use of customs simplifications, including special procedures such as inward processing relief, customs warehousing, duty reliefs and duty deferments.

·       Financial guarantees for all actual and potential duty debts: These will be required for customs procedures, such as warehousing or customs duty reliefs, unless the importer is AEO accredited. Guarantee waivers and reductions will be available to businesses where the AEO criteria are met or the AEO accreditation is held.

·       A significant proportion of royalty, trademark and licence fees paid in relation to imported products will be considered dutiable under the UCC: This is regardless of who pays the licensor and the timing or structure of the payment. HMRC has published guidance (see which confirms this treatment.

·       Non-EU exporters face the prospect of no longer being able to be the named exporter on the export declaration: Some customs authorities have provided guidance for a transitional period which states that a non-EU exporter can still be the named exporter. However, the length of this transitional period is unclear and whether this will be applied consistently across the EU remains to be seen.

The UCC should be fully implemented by the end of 2020. During the transitional period, the new rules will apply by using existing IT systems and, in some cases, paper forms. See

For a review of the UCC, see the article in last week’s Tax Journal.

Issue: 1307
Categories: News