The EU Common Customs Tariff
The European Unions Common Customs Tariff sets out the rules and the rates of duty applicable to imports into the European Union. The EU Common Customs tariff is a three volume guide setting out custom duties and other relevant information applicable to the import and export of goods. It enables importers and exporters to comply with their legal obligations.
Volume 1 of the tariff sets out a range of general information for importers and exporters including restrictions, VAT relief schemes and anti dumping duties.
Volume 2 sets out the commodity codes for each type of product. It contains thousands of commodity codes. It lists duty rates and important information such as import licensing and preferential duties applicable to the goods. This is a 10 digit reference number for imports and an 8 digit code for consignments trading within the EU. With the correct commodity code, the tariff can be used to ascertain the current duty and import VAT rate. The tariff will also specify whether a licence is required.
Volume 3 sets out customs procedures. It explains how to complete the relevant documentation for importing and exporting.
Commodity Codes and Classification
All goods have been given classification numbers. Goods are given different classifications based on what they are, according to their constituent parts and class. The tariff is divided into chapters, sub-headings and commodity codes. Classifying goods can be a complex process involving a number of steps. All goods must be classified under a tariff heading and commodity code.
The tariff incorporates the harmonised system developed by the World Customs Organisation. It adopts European statistical naming conventions. The correct commodity codes are necessary to fill out customs paper work. The commodity code is an eight digit code. The commodity code must be declared under both the simplified procedures and the SAD procedure.
The commodity code identifies the goods under the Common Custom Tariff. It allows the customs to apply appropriate controls on exportation and apply the correct rates of duty on importation. Commodity codes are held in a database called the Taric (Tariff Intégré Communautaire.- the integrated Community tariff). These are updated daily and provide common standards and treatment throughout the EU. The commodity codes cover 98% of the types of merchandise in over 5,000 commodity groups and is available on line. The tariff is updated on a monthly basis by the European Union.
Interpretation of Tariff
There are a number of rules for interpretation of the tariff. They determine how the tariff is used to establish a heading for a particular type of good. Where goods fall into two categories the most specific description takes precedence over a general description. A description by name is more specific than a description by class. Goods comprising of component parts are classified according to the material or component that gives their essential character.
There are notes on classification for incomplete or unfinished articles which have the essential character of a finished article and for mixtures or combinations of mixtures. The substance or material of the good is the determining factor in deciding its essential character.
It is possible to have goods certified under the tariff in a binding way. It is possible to apply to Revenue for a Binding Tariff Information (BTI). This decision on the classification is binding for 6 years.
The tariff will set out the following in respect of each commodity.
- The customs procedure associated with the classification will be set out;
- The duty rates applicable to particular goods. This will be a percentage calculated on value;
- Preferential rates of duty, where applicable, will be specified.
- Anti dumping duties that may apply. A business can be liable for anti duty charges under an anti dumping duty.
- Quotas which may apply.
The commodity code must be entered on the single administrative document.
An anti-dumping levy or countervailing duty is a duty levied on goods from outside EU to protect the EU trade. Anti-dumping duty may be imposed if goods are being “dumped” below commercial value in the EU. Countervailing duties can apply to imports that have been subsidised in the exporting country.
Traders may complain to the EU, who investigate dumping and may impose countervailing subsidies. The rate of duty applicable may depend on the origin.
There is a system of valuation for the purpose of the application of customs duties. The valuations are used for customs duties, VAT and statistics purposes. The value is generally the transactional value or price paid. There are other criteria for when this price cannot be determined.
Integrated Tariff of the European Union (TARIC).
The integrated tariff of the EU sets out the customs duty rates and rules applicable to the import of goods into the European Union. The EU Regulations adopt the standard goods classification and naming system (nomenclature) known as combined nomenclature (CN). A Regulation is adopted each year reproducing the complete version of the combined nomenclature and customs tariff duty rates. The annex to the Regulation sets out the rates of duty applicable to each category of goods.
There is a TARIC subheading which describes each type of goods and sets out their code number. Each subheading has an eight-digit code. The first six digits refer to the harmonised system of headings and subheadings. The seventh and eighth digit represent the CN subheading. The ninth and tenth digit represent the tariff subheadings.
The Community Customs Code incorporates the key EU customs law provisions in a single regulation. The EU Customs Regulation provides for the entry of goods into the EU. The customs authorities may examine the goods. The goods may be assigned to customs-approved treatment.
Binding Tariff Information
BTI decisions are classification decisions issued by the Customs administrations in the various Member States. They are legally binding throughout the European Union. The offer legal certainty regarding tariff classification decisions. The promote the uniform application of the rules of classification throughout the European Union. BTI is normally valid for three years from the date of issue.
A BTI may be invalidated due to a change in European Union legislation. In such cases traders may be afforded a ‘period of grace’. If approved, this allows traders to complete any binding contracts entered into on the basis of that BTI.
A BTI may be invalidated when:
- the classification code changes
- it is affected by European Union (EU) or international customs tariff measures or
- it is affected by a judgement of the Court of Justice of the European Union (CJEU).
Revenue may approve a ‘period of grace’. This allows the trader to continue to use a BTI for a period of up to six months to take account of binding contracts you have entered into.
BTI is void if it is based on inaccurate or incomplete data from the applicant.
The BTI database database contains classification decisions issued by EU countries. It provides details on the composition of goods (excluding any confidential information) and the justifications for the classifications. It may be accessed at BTI database.
Community Status Goods
Goods on which customs formalities have been completed and duties have been paid may be released for free circulation within the EU. They are “community” goods. No further duties or procedures can be applied to them. They may move freely within the European Union. Goods placed in temporary storage, a free zone, free warehouse or a suspensive procedure are not yet community goods
Goods are “community goods” provided they are brought from another EU country without crossing a third non-EU country or crossing a non-EU country under a transit document. There is a number of transit procedures. The internal transit procedure maintains goods as community goods. The most important procedures are Community Transit and the TIR procedure
Certain activities can be undertaken on goods without incurring customs duties. The purpose is to maintain and attract economic activities to the EU. Non-community goods may be imported and worked on under one of the following processors
- inward processing;
- processing under customs control;
- temporary importation procedure;
- outward processing
Goods from certain places qualify for preferential treatment. The preference may apply to developing countries under the EU generalised system of preferences. Products must be wholly from the relevant country or result from processing within that country.
The TIR and ATA procedure permit goods to be carried through the EU with duties and levies suspended while in the course of transit. The TIR procedure applies to transport without intermediate reloading between a customs office of departure and an office of destination. The journey must be by road. There are 56 countries which are parties in the TIR procedure.
Recipients of goods under a TIR carnet may qualify for authorisation as an authorised consignee.
The procedure must be discharged by the customs office of arrival or departure. Provided the office of departure is notified that the operation is completed within one month of acceptance of TIR carnet, it may be discharged. If not discharged, the guarantor associated with the carnet holder is notified. If not discharged within four months an enquiry is initiated. If there are infringements, the duties may be recovered. The guaranteeing association may be liable.
The ATA carnet is used on the temporary importation transit or for the admission of goods for specific purposes.