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Changes in EU Customs Law per May 1 2016

On this page, Maco informs you about the major changes that will take place in EU customs law on May 1 2016.  If you have any questions about this subject, please contact Maco.

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Important changes in EU customs law

On May 1, 2016, a completely new European customs law will come into effect.  The old Community Customs Code will be replaced by the Union Customs Code (UCC).  As a trading partner of EU companies, you should take notice of these changes as they can influence your import and export businesses. On this website, Maco informs you about the major changes in the law.  However, the information we can give can only be brief.  It is also important to realize that the changes which are described on this website, relate to the Dutch situation.  This can be different in other member states.  If you want an exact assessment of the changes that affect your business, please contact Maco.  Our consultants are happy to inform you.

The most important changes for non-EU companies trading with EU companies are:

Jargon

In the future, community goods will be described as union goods.  Union goods are goods which are in free circulation within the European Union.  The opposite of union goods are non-union goods.  These are the goods that are under surveillance of customs authorities within the EU.  Goods are either union goods or non-union goods.

Customs value: first-sale principle changes to last-sale principle

Under the old EU customs law, the customs value could be based on any invoice used while exporting goods to the EU.  In practice, in most cases, this was the first invoice (first sale), as the price of the goods will be lower at an earlier stage in the chain of sales.  This has changed.  It is now obligatory to base the customs value on the last invoice that precedes directly before the import into the EU.  So the customs value will increase.  This is a tricky thing, so please contact your customs broker in advance to be sure you use the right invoice. 

Customs value: royalties and license fees

Under the Union Customs Code (UCC), you will have to add possible royalties and license fees to the transaction price if one of the following conditions is met:

  • The seller or a person connected to him requires an additional payment.
  • Any additional payment by the buyer to the seller.
  • The goods can only be resold after the payment of royalties or license fees.

This is a considerable enlargement of the practical definition of the customs value.  The consequences can be considerable, so please be careful and inform yourself well about this subject.

EU-based party

In the new Union Customs Code, an exporter is defined as an ‘EU-based party’.  However, as a non EU-company you can very well own goods within the EU, for example when you have a warehouse in Europe.  It is yet unclear how customs authorities in the different member states will apply this regulation.

Export of goods in an EU customs warehouse

So far, in the Netherlands, it was not necessary to make an export declaration when goods were exported from a customs warehouse.  It was sufficient to make a transit declaration.  From May 1, 2016, in the Netherlands it is mandatory to make an export declaration prior to a transit declaration when goods leave bonded warehouse. The reason for this is that there can be changes concerning the security situation of the goods that are exported.  Customs looks very carefully into security matters when an export declaration is filed, whereas this is not the primary focus of a check in the NCTS/ transit system.

Binding Tariff Information (BTI)

One can ask customs to issue a Binding Tariff Information (BTI) concerning a specific good that one wants to import in the EU. Such a BTI gives certainty about the duties that have to be paid, to avoid a discussion with customs afterwards.  If a BTI is available, it has to be mentioned in the import declaration under the UCC.  So please inform your customs broker if you have a BTI available for your import merchandise.

Additionally, a BTI will no longer be valid for 6, but only for 3 years.

Binding Origin Information (BOI)

A BOI will also be valid for only 3 years instead of 6 years.  A Binding Origin Information gives you certainty about the country of origin that you can apply when importing specific goods.

Miscellaneous

There are many other changes in customs law which will come into effect on May 1.  Please contact Maco if you have any further questions.  We are happy to help you.

Disclaimer

Maco cannot be held legally or in any other way responsible or liable for the content of the information on this page and on this website.    

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