These Regulations may be cited as the Customs Tariff (Preferential Trade Arrangements) (EU Exit) Regulations 2020 and come into force on the appointed day.

These Regulations extend to the United Kingdom.

Schedule 1 has effect for the purposes of specifying the Agreements and associated reference documents in respect of which the provisions of these Regulations apply.

In these Regulations—

• “the Act” means the Taxation (Cross-border Trade) Act 2018;

• “the Tariff Quota Regulations” means the Customs (Tariff Quotas) (EU Exit) Regulations 2020 F1;

• F11“Agreement” means an arrangement—

  1. a

     that is listed in column 1 of the table in Schedule 1; and

  2. b

     the effect of which is to apply import duty rates to goods, or any description of goods, originating from the country or territory that are lower than the applicable standard rate of import duty for those goods.

• “adjusted quota period” has the meaning given in regulation 8(2);

• “the appointed day” means the day appointed by the Treasury by regulations under section 52(2) of the Act for the coming into force of these Regulations;

• “authorised use goods” has the meaning given in regulation 5(1);

• “customs value” means the value of goods for Customs purposes established by the methodology set out in Part 12 of the Customs (Import Duty) (EU Exit) Regulations 2018 F2;

• “import licence” has the meaning given in regulation 2(1) of the Tariff Quotas Regulations;

• “originating goods” has the meaning given in regulation 6;

• “origin quota” has the meaning given in regulation 7(1) and “origin quota goods” is to be construed accordingly;

• “the Parties” means the parties to an Agreement;

• “preferential duty rate” means the duty rate applicable under regulation 3(2) where—

  1. a

     the terms of an Agreement provide for a rate of import duty to be applied to any goods that is lower than the applicable standard rate of import duty for those goods; or

  2. b

     in the case of any goods, the rate of import duty to be applied under the terms of an Agreement may be higher than the applicable standard rate of import duty for those goods;

• “Preferential Duty Tariff Table”, in relation to an Agreement, means the table at Annex 1 to the Preferential Tariff or, where Annex 1 to the Preferential Tariff contains more than one table, the table relating to the relevant party to that Agreement F3;

• “preferential quota goods” means goods that are classified under a commodity code listed in the Preferential Quota Table;

• “Preferential Quota Table”, in relation to an Agreement, means the table at Annex 2 to the document described in F12column 2 of the table in Schedule 1 or, where Annex 2 to that document contains more than one table, the table relating to the party to the Agreement relevant to the originating goods F4;

• “Preferential Tariff” is the document described in column 2 of the table in Schedule 1;

• “proof of origin”, in relation to any goods, means a document or declaration which meets the requirements or conditions set out in the relevant origin reference document to an Agreement for the purpose of proving that those goods qualify as originating goods;

• “quota close date” has the meaning given in regulation 8(1);

• “quota duty rate” has the meaning given in regulation 4(1);

• “quota number” means a unique reference number by reference to which each quota is identified as specified in column 1 of the Preferential Quota Table;

• “quota open date” has the meaning given in regulation 8(1);

• “quota period” has the meaning given in regulation 8(1);

• “quota volume” has the meaning given in regulation 9;

• “re-imported goods” has the meaning given in regulation 20(1);

• “relevant origin reference document”, in relation to a particular Agreement, means the origin reference document described in column 3 of the table in Schedule 1, which sets out (with modifications) the rules of origin applicable between the government of the United Kingdom and the government of any other country or territory which is a party to that Agreement F5 and includes any annexes or appendices to that document;

• “working day” means any day except—

  1. c

     a Saturday or Sunday; or

  2. d

     a bank holiday within the meaning of section 1 of the Banking and Financial Dealings Act 1971 F6, including those bank holidays occurring only in part of the United Kingdom.

Other words and expressions have the meaning given in the Customs Tariff (Establishment) (EU Exit) Regulations 2020 F7.

The preferential duty rate described in paragraph (2) is without prejudice to the application of a lower duty rate which may exist in respect of the same classification of goods (classified under the same commodity code) by virtue of regulations made under sections 8, 11, 12 or 19 of the Act.

A quota may include one or more types of goods classified under different commodity codes, provided the unit of measure which establishes the quota volume is the same for each type of goods.

The quota duty rate described in paragraphs (1) and (2) is without prejudice to the application of a lower duty rate which may exist in respect of the same classification of goods (classified under the same commodity code) by virtue of regulations made under sections 8, 11, 12 or 19 of the Act.

This regulation has effect subject to the arrangements for a licensing system in respect of preferential quota goods under Part 3 of the Tariff Quota Regulations.

Where, in column 2 of the Preferential Quota Table, it states “Yes”, goods classified against the commodity code in that row are origin quota goods and are subject to goods-specific rules of origin within the limits of a quota (the “origin quota”) as set out in the relevant origin reference document to an Agreement for the purpose of that Agreement.

Each origin quota is to be identified by a quota number.

On application to HMRC by the importer or the importer's representative, goods that qualify as origin quota goods are subject to the preferential quota duty rate determined in accordance with regulation 4(3).

An application under paragraph (3) must be made in the Customs declaration for release to free circulation or authorised use relating to the relevant goods.

Subject to paragraph (2), each period during which a quota applies (“the quota period”) commences at the beginning of the day which falls on a date specified in column 6 of the Preferential Quota Table (“the quota open date”) and finishes at the end of the day which falls on the corresponding date specified in column 7 of that Table (“the quota close date”) in respect of each quota.

For the purposes of paragraph (2), as it has effect in relation to an Agreement described in column 1 of the table in Schedule 1 in respect of which arrangements are in place for applying the effect of that Agreement, the date on which the Agreement takes effect is the date on which such arrangements take effect.

Subject to paragraph (2), the quota volume for each quota during the quota period is as set out in column 5 of the Preferential Quota Table as a figure or figures and unit of measure or a formula for calculating the quota volume against the relevant quota number in column 1 in the same row of that Table.

Where, by virtue of regulation 8(2), an adjusted quota period exists in respect of a particular quota number then, for the purposes of an Agreement, the quota volume for that quota is also to be adjusted on a pro-rata basis in accordance with paragraph (3).

For the purposes of paragraph (3)(c) as it has effect in relation to an Agreement described in column 1 of the table in Schedule 1 in respect of which arrangements are in place for applying the effect of that Agreement, the date on which the Agreement takes effect is the date on which such arrangements take effect.

Deductions from the quota volume must be allocated against the quantity of the imported goods subject to the relevant quota in the order in which HMRC accepted the request to benefit from the quota for those goods together with the Customs declaration for free circulation or authorised use.

For the purposes of paragraph (1), the order of acceptance by HMRC of a request to benefit from a quota is to be determined by reference to the date of acceptance by HMRC of the Customs declaration for free circulation or authorised use of the relevant goods into the United Kingdom.

Where the Customs declaration for a request referred to in paragraph (1) is accepted by HMRC on 1st, 2nd or 3rd January of any year, the declaration is deemed to have been accepted on 3rd January of the same year or, if 3rd January is not a working day, on the next working day following 3rd January.

Subject to paragraph (7), the quantity to be deducted from the quota volume for preferential quota goods or origin quota goods is the quantity of any such goods for which HMRC has accepted the request to benefit from the relevant quota.

When the quantity of preferential quota goods or, as the case may be, origin quota goods deducted from the relevant quota volume for those goods in any quota period is equal to the quota volume for that period in column 5 of the Preferential Quota Table, the quota is exhausted.

Where the acceptance by HMRC of a request referred to in paragraph (1) occurs on the same day as the acceptance by HMRC of the associated Customs declaration for release of the goods for free circulation or authorised use into the United Kingdom, acceptance of the request and of the Customs declaration is to be treated as having occurred simultaneously.

On a day when the total quantity of preferential quota goods or, as the case may be, origin quota goods for which requests under paragraph (1) are accepted by HMRC exceeds the remaining quota volume for any such goods, deductions must be apportioned between all such requests on a pro rata basis calculated by reference to the quantity of any such goods requested in each case.

For the purposes of this regulation, where a quota (a “linked quota”) is linked to one or more other quotas, as indicated in the Preferential Quota Table, a deduction from the linked quota in respect of a quantity of imported quota goods is to also operate as a deduction in respect of the same amount of goods from each of the other quotas.

This regulation does not apply to preferential quota goods referred to in regulation 4(2).

Deductions from the quota volume under regulation 10 in respect of the importation of preferential quota goods or origin quota goods into the United Kingdom must not be allocated to any requests to benefit any earlier than the first working day after the date of acceptance by HMRC of the Customs declaration for free circulation or authorised use for those goods.

Allocation of the quota volume by HMRC must take account of all requests to benefit from the preferential quota or, as the case may be, origin quota which were accepted by HMRC together with Customs declarations for free circulation or authorised use up to and including the last working day prior to the day of allocation of the relevant quota.

Where, on any day, the total quantity of any preferential quota goods or, as the case may be, origin quota goods in respect of which requests to benefit from a relevant quota have been accepted by HMRC, together with the Customs declaration for free circulation or authorised use, exceeds the quota volume or remaining quota volume for those goods, the quota volume, or remaining quota volume, for those goods must be allocated on a pro rata basis calculated by reference to the requests for quantities of goods to be treated as preferential quota goods or, as the case may be, origin quota goods and declared for free circulation or authorised use.

Where a quantity of goods has been allocated to a preferential quota or, as the case may be, origin quota on the basis of incorrect information or an error by the person who made the declaration or HMRC, then the remaining quota volume must be adjusted accordingly to take account of the incorrect information or error.

This regulation does not apply to preferential quota goods referred to in regulation 4(2).

Where goods are subject to a quota and the quota is designated critical under paragraph (2) or (3), security for the full amount of duty at the standard rate must, unless otherwise directed by HMRC, be provided to HMRC at the time of a request to benefit from the quota.

Subject to paragraph (3), a quota becomes critical when HMRC gives notice that 90 percent of the whole quota volume has been allocated.

This regulation does not apply to preferential quota goods referred to in regulation 4(2).

Proof that goods qualify as originating goods must be provided by a proof of origin that meets the conditions set out in the relevant origin reference document to an Agreement for the purposes of that Agreement.

On presentation of the goods on importation into the United Kingdom, the importer or the importer's representative must, on receipt of a request from HMRC, present to HMRC the proof of origin described in paragraph (1) relating to the goods.

The importer or the importer's representative may, on receipt of a request from HMRC, provide a single proof of origin in relation to the importation of a series of goods that are unassembled or disassembled products as provided for in the relevant Origin Reference Document to an Agreement for the purposes of that Agreement.

If at any time the importer or the importer's representative becomes aware or has reason to believe that the proof of origin described in paragraph (1) contains incorrect information, that person must immediately give notice to HMRC in writing of any change which affects the originating status of the goods covered by that proof of origin and, where that change gives rise to additional duty, pay that duty.

The amount of duty which may be repaid in respect of a claim under paragraph (1) is the difference between the amount of duty which the importer, or other person, paid at the time of importation of the goods into the United Kingdom (which is the standard rate of import duty under the Customs Tariff (Establishment) (EU Exit) Regulations 2020) and the preferential duty rate or quota duty rate which applied at that time.

For the purposes of this regulation, “the date of importation” is the date of acceptance by HMRC of the declaration for free circulation or authorised use into the United Kingdom relating to the relevant goods.

This regulation does not apply to preferential quota goods referred to in regulation 4(2).

The exception in paragraph (1) does not apply where HMRC is satisfied that an importer or an importer's representative has undertaken or arranged a series of importations of originating goods with the intention of avoiding the requirement to provide a proof of origin under regulation 14 in respect of those goods.

This regulation does not apply to preferential quota goods referred to in regulation 4(2).

HMRC may, in the circumstances described in paragraph (2), request the importer or the importer's representative to produce such information or documents as are necessary to verify the originating status of any goods at the time those goods were presented to HMRC.

The circumstances described in this paragraph are where the relevant origin reference document to an Agreement for the purposes of that Agreement requires the provision of information that is within the knowledge of the importer or the importer's representative in order to verify that goods are originating goods.

Relief may be given by HMRC in accordance with paragraph (2) from a liability to pay import duty in respect of any goods described in paragraph (3) (“re-imported goods”).