eu modernised customs code implementing provisions (mccip)

Modernised Customs Code Implementing Provisions (MCCIP), Version July 2009

Jasper Helder, Bird & Bird LLP

19 November 2009

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Agenda

Topics Discussed

1) Structure of MCCIP

2) AEO

3) BTI/BOI

4) Repayment/ Remission

5) Penalties

6) Customs Value

7) Right to be heard

8) Customs Procedures

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1. Structure of MCCIP (Articles)

Provisional Structure is based on MCC:

Article 123-01: is the first Article of Section 3 of Chapter 2 of Title I. If there is no Section within a chapter of the MCC, the third digit is ‘0’.

Subsections that do not exist in MCC, but are introduced in MCCIP are mentioned in some parts between hyphens after the first three “key number” and before the Article Number:

→Article 523-3-07 is the 7th Article of Subsection 3 of Section 3 of Chapter 2 of Title V

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2. AEO (Art 13-15 MCC, Articles 123-01 – 123-27)

Renaming types of AEO-Certificates (Art 123-01):

1) AEO- Certificate: Customs simplifications for economic operators fulfilling conditions in Articles 123-08, 123-09, 123-10 and 123-11

2) AEOS-Certificate: Security and Safety, benefit from facilitations of customs controls relating to security and safety for goods entering or leaving customs territory EU

condition: Articles 123-08, 123-09 and 123-12

3) AEOF-Certificate: AEO + AEOS Certificate

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2. AEO (Art 13- 15 MCC, Articles 123-01 – 123-27 MCCIP)

Specific Articles on the benefits of AEO (Art 123-02) (10 identified):

1) Simplifications customs legislation (AEOC or AEOF)2) Provide customs representation in other EU Member State where holder AEOC or AEOF is established3) Comprehensive guarantee waiver or reduced guarantee4) Deemed to fulfil conditions centralised clearance (Art 106 MCC, possible to lodge declaration at other customs office than where operator is established)

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Specific Articles on the benefits of AEO (Art 123-02):

5) Deemed to fulfil conditions of self-assessment (Art 116 (2) d MCC, self-assessment instead of control by customs)

6) Deemed to fulfil conditions for granting the authorisation for entry in the records

7) Notification to holder, when consignment is selected for physical control (goods entering EU)

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Specific Articles on the benefits of AEO (Art 123-02):

8) No need to lodge or reduced data requirements for exit summary declaration. If export declaration is lodged by representative, representative needs AEOS or AEOF

9) Subject to fewer physical and document based control

10) Priority for consignments of holders AEO/AEOF if there are incidents requiring closing or re-opening customs office of entry or exit

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Similar Criteria AEO:Similar (customs/ tax compliance, satisfactory system of

managing commercial and transport record, solvency, security and safety standards

New criteria added:standards of competence and professional qualifications (Art 14

d MCC, Art 123-22 MCCIP):

With respect to security/safety: appoint a contact person competent for safety and security related questions

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Examination of AEO criteria:

Similar, but MCCIP specifically provides that examination shall be suspended for period criminal proceedings if the authorities have reasons to believe that an act which gives rises to criminal court proceedings related to customs or tax infringements is perpetrated by applicant

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AEO Transitional measures:

Criteria Article 14 MCC applicable to all economic operators applying for AEO-statues. Issued AEO- certificates before MCCIP are applicable continue to be valid unless there is evidence of non-compliance.

Customs can examine this situation within a transitional period of 24 months.

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3. BTI/ BOI (Art 20 MCC, Articles 124-3-01 – 124-3-08 MCCIP)

Art 20 MCC:- Combining grounds for refusing BTI/ BOI:

a) application has already been made at same or other customs office (preventing BTI/BOI shopping)

b) No intended use- BTI/BOI not only binds customs, but also the holder- Validity BTI/BOI: 3 years- Commission decision requesting EU Member States to

amend, revoke BTI/BOI

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Application: in principle electronically, unless computerised system of customs or applicant is not functioning. Information to be provided in listed in Annex. Customs also notifies BOI or BTI in principle electronically

Additional information to be provided for BOI :indication by the applicant whether to his knowledge the goods are subject to any legal or administrative proceeding concerning origin or a court ruling on origin

indication whether application relates to import or export

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Exchange binding information EU Member States and Commission (new):

changes in the application

also notification and details where BTI is annulled, revoked or ceased to be valid

also notification if period of extended use of BTI is granted indicating the end date and the quantities to be covered

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3. BTI/ BOI (Art. 20 MCC, Articles 124-3-01 – 124-3-08 MCCIP)

Procedures inconsistencies BTI/BOINew:- EU Member States endeavour to bilaterally agree on

correct classification or origin of the goods. Time period for bilateral consultation is 3 months.

- If not bilaterally solved, EU Member States to submit matter to the European Commission

- EU Member States may not make any decision until the Committee has reached agreement

- Commission may take a decision to instruct the EU Member States to revoke BTI decision and to indicate just tariff clarification

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3. BTI/ BOI (Art. 20 MCC, Articles 124-3-01 – 124-3-08 MCCIP)

Legal Effect of BTI/BOI:

New CriteriaHolder has to inform customs authorities that he is in possession of BTI/BOI: Box 44 SAD

A new category added that may affect validity BTI/BOI: agreement on the interpretation of the customs nomenclature reached at the Committee.

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4. Repayment and remission

Article 79 MCC: Summarizing repayment/remission:

1) overcharged amounts import or export duty (Art. 80 MCC, Articles 236 and 237 CCC)

2) defective goods or not complying with contract (Art. 81 MCC, Art. 238 CCC)

3) error customs (Art. 82 MCC, Art. 220 (2) b CCC)

4) equity (Art. 83 MCC, Art. 239 CCC)

Period is 3 years, also for requests ex Article 82 MCC (Art. 239 CCC)

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4. Repayment and Remission

Structure in MCCIP:Section 3: Repayment and remission of the amount of

import or export dutySubsection 1: general provision, definitions and procedure,

Articles 333-1 - 333-13Subsection 2: Specific provisions application Article 80

MCC, Articles 333-14- 333-15Subsection 3: Specific provisions application Article 81

MCC, Articles 333-16 – 333-17Subsection 4; Specific provisions application Articles 82

and 83 MCC, Articles 333-18 – 333-28

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Format (Art. 333-03 MCCIP):

In accordance with Annex III. One fixed form will be adopted. Aim is to have one fixed procedure/application for all requests for repayment and remission

Applications may be accepted if not all information is provided. Applications must at least contain information mentioned in boxes 1-3 and 7of the application form

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Decision on repayment/ remission (Art 333-08) has to include (comprehensive approach throughout MCCIP):

information necessary for identifying goods

ground for repayment/remission + reference to corresponding Article of MCC

formalities to which repayment or remission is subject (2 months)

time-limit for completing formalities

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Decision on repayment/ remission (Art 333-08) has to include:

Statement that there will be no repayment/remission until the implementing customs office has informed the decision-making customs authority that formalities have been completed

Particulars of requirements to which the goods remain pending implementation decision

Notice informing applicant that the has to submit the original of the decision at the implementing customs when presenting goods

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Requests Articles 82 and 83 MCC

New Articles in MCCIP added:- Definition of “competent authority”: authority which is acting

within the scope of its powers, furnishes information relevant to the recovery of an amount of import or export duty and which may thus cause the person liable for payment to entertain legitimate expectations”

- Article stipulating how to determine whether error could be detected (taking into account nature error, professional experience debtor and the degree of care)

- Special Circumstances (new definition)

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Definition redefined when cases have to be referred to the Commission or not:

special situation is result of Commission failing its obligation; orCommission has committed an errorother conditions (EUR 500.000 and Community Investigation carried out

under Reg. 515/97) maintained.

Matter is not transferred to Commission if the case is based on the indicated “special circumstances” or “re-exportation or destruction without customs supervision”.Other 2 conditions for not transferring matter to Commission are maintained:

decision adopted comparable issues of law and factCommission is already considering a case involving comparable issues of fact and law)

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5. Penalties

Article 21 MCC

- EU Member States have to provide penalties that are effective, proportionate and dissuasive

- In case of administrative penalties, they can bea) pecuniary charge including a settlement in place of criminal penaltyb) revocation, suspension or amendment of authorisation

- National provision have to be notified to CommissionMCCIP does not provide provisions on penalties

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6. Customs Value

Article 40 MCC: primary and secondary methods customs valueArticle 41 MCC: Transaction value is primary method

Article 42 MCC: Secondary methodsTransaction value identical goodsTransaction value similar goodsDeductive methodComputed ValueReasonable means

Certain provisions of Article 29-32 CCC in MCCIP

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6. Customs Value: First sale of Export

Article 230-02 Removes First sale of export:

In case of multiple contracts of sale, transaction value is determined on the basis of the last sale in the commercial chain

Background: WCO, Commentary 22.1

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7. Right to be heard

MCC introduces the right for a person to express his point of view before decision is taken (Article 16 sub 4)MCCIP sets the criteria (Articles 124-02 and 124-03):

‘Customs Communication’ must include grounds and refer to all documents and information related to the intended decision‘Point of view’ must be expressed within a 1 month periodWaiver of “the right to be heard” if 1 month period is exceededVerification customs declaration : ‘Customs Communication’ and ‘Point of view’ may be made orally, right to request a written ‘Customs Communication’ remains open (1 month period)Control of goods without declaration: idemCatch-all if exceptions (Article 124-03 MCCIP) do not apply Adoption of decision is suspended until expiry of 1 month period or renouncement to further express ‘Point of view’ if made within 1 month period

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7. Right to be heard: Exceptions

Right to be heard does not apply in the following cases:Where the request for a decision may not be accepted;

Where the decision at stake is a BTI/BOI (Article 20 of MCC);

In case of refusal of the benefit of a tariff quota (Article 33 sub 4 of MCC);

Where the nature or the level of the threat to the security of the Community and its residents, to human, animal or plant health, to the environment or to consumers so requires; and

Where the decision relates to enforcement measures, without prejudice to the law of the EU Member State concerned.

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8. Customs procedures

Customs Procedures in MCC:Title VI Release for free circulation and relief from import dutiesTitle VII Special procedures

Transit (external and internal transit)Storage (temporary storage, customs warehousing and free zones)Specific use (temporary admission, end-use)Processing (inward and outward processing

Title VIII Departure of goods from customs territory EC

Common rules special procedures (Art 135-143 MCC):authorisation, administration, discharge of procedure, equivalent goods

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8. Customs Procedures

Conditions authorisation special procedures:Established in customs territory EC

Necessary assurance of proper conduct, in cases where custom debt is incurred, have to provide a guarantee

Temporary admission or inward-processing: the person who uses the goods or arranges for their use or who carries out processing operations on the goods or arranges them to be carried out (not anymore to persons outside EC imports non-commercial nature)

Customs are able to exercise customs supervision without having to introduce administrative arrangements disproportionate to economic needs

Economic Conditions (Art 710-07 MCCIP)

Amended rules for retroactive authorisation (conditions, and period 3 years)

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Inward Processing (Art 168-169 MCC, Art 752-01- 752-05)

Inward processing suspension combined with processing under customs control

Inward processing draw-back is not included

May be used in other cases than repair and destruction where products can be verified, also equivalent goods, goods intended to undergo operations to ensure compliance with technical requirements for release free circulation and usual forms of handling (equivalent goods)

In case of prior exportation the period of declaring non-Community goods is six months (period 3 months for goods common market regulation deleted)

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Inward processingList of situations for which the economic conditions are deemed to be fulfilled are listed in Art 710-07 MCCIP

Validity license (for all processing procedures) is five years instead of three years. Period is three years for goods covered by Annex 73

Equivalent rules: Art. 710-18 MCCIP, redefined definition when use of equivalent goods is authorised if the goods have same eight-digit CN code. Added is that the use should not impact customs supervision, increase the risk of fraud and not lead to an unjustified import duty advantage (common to special procedures)

Redefined rules commercial policy measures

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Customs Warehouse (Art 153-154 MCC, Art 733-01- 733-02 MCCIP)

4 types of warehouses:Public customs warehouse type I: responsibility holder of authorisation

Public customs warehouse type II: responsibility holder of procedure

Public customs warehouse type III: operated by customs authorities

Private customs warehouse

When a person is authorised to operate temporary storage and customs warehousing, these facilities cannot be operated in addition by a third party

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Questions?

Bird & Bird is an international legal practice comprising Bird & Bird LLP and its affiliated businesses. www.twobirds.com

Tel + 31 6 46 17 94 82 [email protected]

Tel + 31 6 46 17 94 82 [email protected]

Jasper Helder

eu modernised customs code implementing provisions (mccip)

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