Operator CPC Part 48
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Welcome to week 48 of our articles on the Operator CPC, brought to you in conjunction with EP Training
This week, we're concluding our topic on customs transit regimes and beginning to look at the customs guarantee scheme.
When the full Community/Common Transit System (CTS) procedure is used, the principal must provide customsapproved guarantees to cover any customs duties and charges that may be payable if the goods are lost during a CTS journey. Remember, CTS is used to establish the community status of goods and to move goods under customs control within the EU and the European Free Trade Association (EFTA).
Customs-approved guarantees relieve the principal from producing deposits to cover customs duties. The principal would normally be responsible for the payment of any duties in the event of a claim by customs. The authorisation is only granted to people who: • are established in a contracting party country (in other words, the company is incorporated there and can be traced and controlled); • regularly use the CTS or whose customs authority know that they can meet their obligations;
• have not committed any serious or repeated offences against customs or tax legislation. The guarantee system
An individual guarantee is required for each transport movement covering the full amount of customs duties and other charges, such as VAT or excise duty. An individual guarantee can be replaced by a comprehensive guarantee, which is subject to strict criteria. Comprehensive guarantees cover a
certain number of transit operations. Guarantees are now fixed to cover the maximum amount of duties and other charges that are at stake within a period of at least one week that's based on previous transactions. The maximum amount mentioned is also referred to as the reference amount and a trader must not exceed this value. Individual guarantees can be established with a cash
deposit or by having someone act as the guarantor. A set of guarantee vouchers can also be used with each voucher being valued at €7,000 (£5,873). The amount of the guarantee is calculated on the highest rate in the country of departure.
If vouchers are being used, they must cover the whole amount of duty and other related charges. Vouchers are valid for one year.
The end of the transit operation is defined as the moment when the goods and their accompanying documentation are officially presented to the customs office of destination.
The goods can only be discharged when the customs authority of the country of departure has compared its information with the documentation that was sent back by the office of destination. It must be established that the procedure has been properly concluded.
If no proof of procedure conclusion has been produced after four months, the customs office of departure must start the inquiry procedure. To do this, they must seek to obtain the information from the office of destination, and if appropriate, the office or offices of transit. Under these circumstances, the principal will be responsible for paying any duties that may become due. Vehicles and containers
Most goods that are carried under CTS no longer need to be sealed. However, there are still certain instances when customs may require the vehicle or its load to be sealed. Customs will only seal a vehicle or its load if: • the vehicle is capable of being sealed; • it is of a construction that, once sealed, means nothing can be removed or inserted without obvious traces or without breaking the seals; • it contains no concealed places;
• the loading space is readily accessible to customs officers. Preferential rates of duty
Under various trading agreements, goods may be imported and exported to and from the UK at preferential rates of duty. The goods can be imported at a duty free or reduced rate if they originate from a country party to the agreement. EUR1
The EUR1 movement certificate is used when exporting goods to an EFTA country (Iceland, Liechtenstein, Norway and Switzerland).
The EUR1 form should be sent to the customs office of departure along with supporting documentation and the invoice. Pages 1 and 2 of the form are for the exporter and pages 3 and 4 are retained by customs.
The EUR1 certificate is required when the value of the goods exceeds £4,830 for EFTA movements.
For goods below this value, exporters will simply make a declaration to that effect on the export invoice. ATR1
Similar to the EUR1, the ATR1 is used when exporting goods to Turkey in order to claim preferential rates of duty. The ATR1 certificate would also establish the origin of the goods. VAT deferment
Importers can apply for a VAT deferment, which allows them to postpone the payment of VAT to a later date (normally the month following the importation of the goods). It is essential that the VAT deferment number is recorded on the completed documentation.