The Customs (Special Procedures and Outward Processing) (EU Exit) Regulations 2018

[F1 Liability to import duty where there is a change in the goods U.K.

18G.— (1) Subject to paragraph (2), an applicant for authorisation to declare goods for a free zone procedure may—

(a) elect that any liability to import duty incurred in relation to processed goods resulting from processing while the goods are subject to the free zone procedure be determined by reference to the goods as they stood when the declaration was made; or

(b) reserve the right to elect, once the authorisation has been granted, that any liability to import duty incurred in relation to processed goods resulting from processing while the goods are subject to the free zone procedure be determined by reference to the goods as they stood when the declaration was made.

(2) Paragraph (1) applies only to the extent that—

(a) the processing under the free zone procedure consists of—

(i) qualifying processing activities as defined in paragraph 9(4) of Schedule 2 to the Act; or

(ii) the operations referred to in paragraph 11 of that Schedule (meaning of goods declared for “an inward processing procedure” in the supplementary form); and

(b) where the processing to be carried out is the use of production accessories, they are not—

(i) fuels or energy sources, other than those needed for the testing of processed goods or for the detection of faults in goods declared for the free zone procedure which need repair;

(ii) lubricants, other than those needed for the testing, adjustment or withdrawal of processed goods; or

(iii) equipment and tools;

(3) An election under paragraph (1) must be made in accordance with such additional requirements, if any, specified in a notice published by HMRC which may also specify amongst other things—

(a) further conditions that must be satisfied before an election under paragraph (1) may be made; and

(b) cases in which an election may not be made.

(4) An election under paragraph (1), once so made, has effect only if—

(a) the processing takes place within the period specified in either—

(i) the authorisation; or

(ii) a notice given to the applicant; and

(b) the processing takes place in accordance with the conditions of the applicant’s authorisation.

(5) Determination of liability to import duty incurred in relation to processed goods resulting from processing under a free zone procedure is to be by reference to the goods as they stood when the declaration for the procedure was made where—

(a) an election is made under paragraph (1); or

(b) paragraph (6), (7) or (10) applies.

(6) This paragraph applies where—

(a) the processed goods resulting from the processing of the goods are imported by the free zone business within one year after export of the processed goods or their removal from Great Britain to Northern Ireland; and

(b) if a declaration of those goods for the free-circulation procedure had been accepted at the time of their release to the free zone procedure—

(i) the goods would have been subject to—

(aa) an additional amount of import duty under section 13, 14 or 15 of the Act;

(bb) a non-tariff trade policy measure; or

(cc) an agricultural policy measure; or

(ii) the importer of the goods would have been required to give a guarantee under paragraph 15(5) of Schedule 4 to the Act.

(7) Subject to paragraphs (8) and (9), this paragraph applies where, if a declaration of those goods for the free-circulation procedure were accepted at the time the authorisation to declare goods for a free zone procedure is granted—

(a) the goods would have been subject to—

(i) an additional amount of import duty under section 13, 14 or 15 of the Act;

(ii) a non-tariff trade policy measure; or

(iii) an agricultural policy measure; or

(b) the importer of the goods would have been required to give a guarantee under paragraph 15(5) of Schedule 4 to the Act.

(8) Paragraph (7) does not apply where—

(a) the goods are not ones in relation to which, if a declaration of those goods for the free-circulation procedure were accepted at the time the authorisation is granted—

(i) an additional amount of import duty under section 13, 14 or 15 of the Act would be applicable; or

(ii) the importer of the goods would be required to give a guarantee under paragraph 15(5) of Schedule 4 to the Act; and

(b) the aggregate value of goods to be declared for a free zone procedure to be processed under that procedure, by the applicant for authorisation, in that calendar year, for each classification code, does not exceed—

(i) in the case of sensitive goods, £135,000;

(ii) in all other cases, £270,000.

(9) Paragraph (7) does not apply where the goods—

(a) are non-commercial goods or personal gifts;

(b) are goods resulting from processing under an authorisation to declare goods for an inward processing procedure, the application for which was a case—

(i) in relation to which an examination of the available evidence was required for the purposes of regulation 20(1)(a); or

(ii) in relation to which an examination of the economic conditions was required for the purposes of Article 211(4)(b) of the UCC;

(c) are to be processed into samples;

(d) are to be reduced to waste and scrap;

(e) are to be destroyed; or

(f) are to be subject to recovery of parts or components.

(10) This paragraph applies where a liability to import duty has arisen as a result of a breach of the requirement at regulation 18B(1)(d).]

Textual Amendments

F1 Pt. 4 Ch. 1 Section 2 inserted (8.11.2021) by The Free Zones (Customs, Excise and Value Added Tax) Regulations 2021 (S.I. 2021/1156), regs. 1, 3(13)