Trade and Customs News - Edition 7 | KPMG | BE

Trade and Customs News - Edition 7

Trade and Customs News - Edition 7

The Trade & Customs newsletter is designed to highlight changes in the global trade landscape.

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1) Union Customs Code applicable as of 1 May 2016: documents made available

Late April, the European Commission launched a website fully dedicated to the Union Customs Code: The website provides for:

 

  • A Question & Answer section with regard to the impact of the UCC in the EU 
  • A link to all legislative acts 
  • A link to the guidance documents with regard to different topics (not legally binding) 
  • A link to the updated UCC Working Program relating to the development and deployment of the electronic systems (period 2016 to 2020) 
  • A link to the eLearning courses on the UCC

 

Late April, the Belgian Customs launched a website fully dedicated to the Union Customs Code:

 

The website provides for:

  • A short presentation on the UCC highlighting the main changes 
  • An information note on the UCC highlighting the main changes 
  • A link to the eLearning courses on the UCC 
  • A link to the guidance documents with regard to different topics (not legally binding) 
  • A Question & Answer section with regard to the impact of the UCC in Belgium 
  • A document on the modifications in PLDA due to the application of the UCC 
  • A document on the modifications regarding temporary storage due to the application of the UCC 
  • An information note on the new definition of exporter, including an overview table outlining the impact of this new definition from a customs and VAT perspective 
  • Technical specifications as regards the new procedure in order to move goods between temporary storage areas

 

This month, Belgian Customs has also posted the new applications forms which have to be (electronically) filed with regard temporary storage, inward and outward processing:

 

We expect that within the forthcoming weeks and months new documents and/or updates will be posted on these websites.

2) Ombudsman urges the European Commission to conduct a comprehensive and participatory human rights impact assessment of the EU – Vietnam FTA

The EU released the final version of the text of the EU-Vietnam Free Trade Agreement. It is expected that this FTA will not start to apply provisionally until after 2017. However on 26 February 2016, the European Ombudsman decided that the European Commission failed to carry out a human rights impact assessment of the EU-Vietnam FTA.

It has to been seen what the impact of this decision will be when the FTA is put for a vote in the European Parliament and the Council later this year and, moreover, whether the European Commission will make such an impact assessment a standard practice prior to concluding FTA’s.

3) Canada and EU reach breakthrough on new approach on investment

Finally, the original CETA text of August 2014 has been legal scrubbed. As a result, the much debated CETA investment chapter has been profoundly revised replacing the Investor to State Settlement approach. The CETA investment chapter moves away from an ad hoc arbitration system towards a permanent and institutionalized dispute settlement tribunal and appellate tribunal. The final aim is to launch a permanent multilateral investment court. This significant change reflects the new approach of the European Commission on investment in trade to ensure fairness and objectivity. The new approach is embedded in the free trade agreement recently concluded with Vietnam and forms part of the recent European Commission’s TTIP proposal on investment.



The final text of CETA will now be translated in all EU official languages and tabled with the European Parliament and Council for ratification purposes before the end of this year. In case of approval, CETA will be provisionally implemented in the course of next year.

4) GSP beneficiary countries subject to product graduation as from 2017 to 2020

The European Commission reviews every three years the list a list of GSP sections for which unilateral tariff preferences are suspended as regards certain GSP beneficiary countries.

Please find a link to the Implementing Regulation of the European Commission suspending tariff preferences with regard to India (7 product categories), Indonesia (2 products categories), Kenya (1 product category) and Ukraine (2 product categories).

n practice, only products originating in India and Indonesia will be affected because Kenya concluded an EPA and Ukraine concluded a DCFTA ensuring alternative preferential duty access to the EU. Note that products of origin ‘India’, which are falling within Chapters 71 to 75, will be suspended from tariff preferences as of 2017,

5) China Customs revised the standards for filling in customs declaration forms

China Customs recently introduced new requirements and a monitoring mechanism for import and export declarations. A Tax Alert prepared by KPMG China further explains the main change.
 

6) Gradual implementation of ITA II as of 1 July 2016

During the 10th Ministerial Conference on 16 December 2015 in Nairobi, the agreement in the form of a Declaration on the Expansion of the ITA (including schedules containing the staging commitments) was adopted. The Proposal for a Council Decision on the conclusion, on behalf of the European Union, of an agreement in the form of a Declaration on the expansion of Trade in Information Technology Products (ITA) is expected soon. The exact schedule of tariff cuts will be reflected on a Commission Regulation implementing the Council regulation.

The import duty on the majority of products (201 in total) will be slashed as of 1 July 2016 and will be followed by various tariff cuts spread over a period of 7 years.

7) Belgian Royal and Ministerial Decrees concerning direct and indirect representation finally published

In 2014, the Belgian Customs Code introduced the concept of direct and indirect customs representative. A direct customs representative takes care of all customs formalities in the name and on behalf of its principal. An indirect customs representative takes care of all customs formalities in its own name and on behalf of its principal. The difference between both forms of representation is important as far as the customs’ liability of the Belgian customs broker is concerned. In case of indirect representation, the customs broker and its principal are jointly liable in case of duty recovery. In case of direct representation, only the principal of the customs broker is liable vis-à-vis Belgian Customs. This is important, for example, in case anti-dumping duties are circumvented or in case incorrect and/or false certificates of preferential origin are submitted.

After almost two years, the implementing provisions were published laying down the conditions in order to act as a direct or indirect representative in Belgium. It follows that a Belgian customs broker is now legally able to act as a direct representative.

However, it not expected that Belgian customs brokers will directly swift from indirect to direct representation, as currently certain issues (the customs’ liability of a direct representative, guarantee deed, PLDA settings) are still pending.

8) EU Member State of destination competent to recover excise duties in case of shortfalls

According to Article 10(2) of the Council Directive 2008/118, the EU Member State of destination shall be competent in the case an irregularity giving rise to the release of consumption has been detected during a movement under excise duty suspension arrangement.

According to Article 10(4) of the Council Directive 2008/118, the EU Member State of dispatch shall be competent in the case no irregularity giving rise to the release for consumption was detected during a movement under excise duty suspension arrangement.

According to the European Court of Justice, the actual receipt of the excise goods by the consignee occurs when the consignee is able to check the quantity of excise goods actually received against the quantity to be received. If the consignee is not in a position to measure precisely the quantity received, this would run counter to the very nature of the excise duty, i.e. tax on consumption. It follows that the simple arriving of the means of transport is insufficient to end the duty suspension arrangement. Therefore, the duty suspension arrangement only ends in case the consignee is able to physically check the quantities received and to enter these goods in its tax warehouse and to report the quantities received in its stock records. Thus, the end of the movement under duty suspension arrangement and the entering into the accounts coincide with the ending of the duty suspension arrangement.

It follows that the EU Member State of destination will in case of reported shortages by the consignee be competent to recovery excise duties from the consignor. This judgement seems to confirm the position of the Belgian excise authorities.
 

9) Components presented separately to Customs are held to be ‘goods put up in sets for retail sale’

The Belgian Supreme Court requested the European Court of Justice for a preliminary ruling in order to determine whether a DVD player and loudspeakers, which are presented to Customs in separate packages, should upon importation be regarded as goods put up for retail sale in sets because they are subsequently packaged together for sale.

The European Court of Justice ruled that Rule 3(b) of the General Rules for the interpretation of the Combined Nomenclature must be interpreted as meaning that such goods, may nevertheless be held to be ‘goods put up in sets for retail sale’, and may, therefore, come under a single tariff heading, where it is established, having regard to other objective factors, which it is for the national court to assess, that the goods belong together as a unit and are intended to be presented as such in the retail trade.

Based upon the facts, it is likely that the Belgian Supreme Court shall rule that the separate components should have been declared under a single tariff heading, as a set, triggering higher import duties.

10) EU and Mercosur exchange revised negotiation offers

On 11 May 2016, the EU and Mercosur (Argentina, Brazil, Uruguay and Paraguay only) announced in a joint communiqué that they exchanged revised negotiation offers in order to revamp the long-stalled negotiations in view of concluding a bilateral Association Agreement. However, it is far from sure that both parties will successfully conclude such an Association Agreement as agriculture appears to be a stumbling block.
 

11) The Stabilization and Association Agreement (SAA) between the EU and Kosovo entered into force on 1 April 2016

Kosovo is the last Balkan country that entered into an SAA with the EU. As of 1 April 2016, EU originating goods might benefit from a preferential duty treatment upon entry in Kosovo and vice versa.

12) EP resolution against granting MEP status to China

On 12 May 2016, the European Parliament voted a resolution on trade relations between the EU and China and market economy status. The European Parliament is convinced that the EU should not grant MES (Market Economy Status) to China now that the EU has not developed new legislation on trade defense instruments.
 

13) Certain steel products will be subject to a prior surveillance system

In an attempt to protect the EU steel industry, the European Commission introduced a prior surveillance system on certain steel products falling within Chapters 72 and 73 in order to provide advanced statistical information permitting rapid analysis of import trends from all non-EU member states (with the exception of EEA countries). In the near future, importers need to tender a surveillance document in order to release certain steel products for free circulation.

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