Union Customs Code: Transitional Measures. | KPMG | BE

e-Trade Flash - Union Customs Code: Transitional Measures from 1 May 2016

Union Customs Code: Transitional Measures.

On 1 May 2016 the Union Customs Code and its implementing and delegated act (new Code) will become applicable. From that date, the new Code will replace the Community Customs Code and its implementing provisions (old Code).

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Recently, the European Commission published a first (draft) version of the transitional measures that aim to provide clarity in regards to customs procedures and decisions that have been issued prior to the implementation of the new Code. From the current draft transitional provisions we derive that:

 

  • BTI’s granted before 1 May 2016 will remain valid until the end of their period of validity (6 years).
  • Under the new Code, the inward processing drawback system (IP/D) will be abandoned and processing under Customs Control (PCC) and the inward processing suspension system (IP/S) will be merged into IP. IP/D and PCC authorizations granted before 1 May 2016 shall be considered as IP authorizations in accordance with the new Code. In other words, the provisions of the new Code will be applicable on authorizations, where it is important to note that the IP facilitation under the new Code will suspend the duties upon entry of the goods into the EU (contrary to IP/D under the old Code). A refund of customs duties with respect to goods that are placed under IP/D and which are exported after 1 May 2016, will be granted in accordance with the provisions of the old Code. 

 

  •  Under the new Code, the customs warehousing procedure with type D facilitation shall be abandoned. As of 1 May 2016, authorizations for these procedure will be considered private customs warehouse authorizations.  But the customs warehousing procedure with type D facilitation may still be discharged after 1 May 2016, applying the conditions of the old Code. This means that goods which are placed before 1 May 2016 under this procedure may be customs cleared based upon the (lower) customs value upon entry. However, as of 1 January 2019, such goods shall be customs cleared based upon the (higher) customs value upon release.

 

The transitional provisions also cover other situations although the consequences will depend on the exact nature of the current set up (assessment on a case-by-case basis). It is expected that in mid-May an update of the transitional provisions will be published. We hope that more clarity will be provided.

 

Impact on your business

If you are currently holding or using customs authorizations or decisions, it is advisable to further investigate whether your customs setup will be UCC-proof.

 

How can KPMG help?

The KPMG Global Trade & Customs Practice would be happy to assist with this assessment and prepare your company to guarantee a smooth transition to the new European customs legislation.

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