Foreign Trade Flashcards
Scheme for working out whether the product originated in a Contracting Party
- Contracting Party exports to Contracting Party (Appendix I, Art. 2(1))
- Wholly obtained in Contracting Party (Appendix I, Art. 2(1)(a))
OR
sufficient working or processing (Appendix I, Art. 2(1)(b))
How do I find out who is a Contracting Party?
Art 2(1) Contracting Party means those listed in Article 1(3)
Art 1(3) - “as listed in the preamble”
–> See Preamble
Where is wholly obtained in a Contracting Party defined
Appendix I, Art. 4
What are the steps to determining if there is sufficient working or processing (simplest case)?
- Minimal treatment? No! (required by Art 5(3), defined in Art 6)
- Sufficiently worked or processed - Art 5(1) says must fulfill conditions in Annex II
a. Preference criteria:
- “use ex Chapter 86” or “use heading 8608, alternative method in column 4”
- write condition; instead of “materials”, write “non-originating materials”
b. Preference determination:
- ex works price:
- % of ex-works price = €x
- “The value of the non-originating materials used may not exceed €x”
c. Determination of non-originating materials:
- add non-originating materials (from outside EU)
- < €x
Conclusion: EU originating product
What are the steps to determining if there is sufficient working or processing and the determination of input materials without origin leads to a conclusion it is not an EU originating product (for chapter 86 only) so only column 3
Write: > €x, so not an EU originating product HOWEVER application of cumulation
d. Determination of non-originating materials using cumulation (Appendix I, Art 3):
- add non-originating materials using cumulation
- > or < than €x
- not an EU originating product
What are the steps to determining if there is sufficient working or processing and the determination of input materials without origin using cumulation leads to conclusion of not an EU originating product with heading 8608?
- “BUT application of column 3 criteria” using tolerance Art. 5(2) of the Attachment
Apply previous steps again, BUT condition must say:
“Manufacture in which the value of all non-originating materials used does not exceed 40% of the ex-works price
AND value of the non-originating materials from heading 8608 used must not exceed 10% of the ex-work price of the product”.
Repeat preference determination, determination of non-originating materials and determination of non-originating materials using cumulation with first condition –> Condition fulfilled, BUT
e. Value of non-originating materials from heading 8608 < 10% of the ex-work price of the product - ex-work price =
- 10% of ex-work price = €y
–> The value percentage of the non-originating materials from heading 8608 used may not exceed €y - Non-originating materials from heading 8608 used: calculate
- > or < €y
Conclusion: (not) EU originating product
If not EU originating product –> “Third country customs clearance is necessary in country X”
What do I need to consider when applying Annex II % condition to materials?
- Consider accessories, spare parts and tools included in price (Appendix I, Art 8)
- Don’t consider neutral elements: energy and fuel, plant and equipment, machines and tools, goods which neither enter into the final composition of the product nor are intended to do so (Appendix I, Art 10)
- Sets: see Appendix I, Art 9
How does tolerance work in the Regional Convention?
Tolerance for non-originating materials (in contracting parties, not including EU) not exceeding 10% ex works price of product (e.g. if originating material must be from other headings);
BUT
it can’t exceed Appendix II percentages (Art 1(2) and Appendix I, Art 5(2))
What do I need to consider for cumulation of origin?
- Contracting Party 1 (EU) sells material to Contracting Party 2.
- Contracting Party 2 sells product using the material to Contracting Party 1 (EU).
In Contracting Party 2 (exporting Country):
1. No working or processing –> product retains origin in Contracting Party 1 (Appendix I, Art 3(4)
2. “Insufficient working or processing” AND value added is LESS than value of materials originating in other Contracting Party –> product originates in Contracting Party which accounts for highest value of originating materials used (Appendix 1, Art 3(3))
3. “Insufficient working or processing”, value added is GREATER than value of materials originating in other Contracting Party –> originates in Contracting Party 2 (Appendix I, Art 3(3))
4. More than “insufficient working or processing” but less than “sufficienty worked or processed” –> material originates in Contracting Party 2 (Appendix I, Art 3(1) or 3(2) depending on where materials are from)
How is “value added” defined?
Ex-works (product) price minus customs value of materials originating in other Contracting Parties outside the EU (Appendix 1, Art 1)
Wie untergliedert man die Zollbelastung bei der Einfuhr?
- Regelzollsatz
- Wert- oder mengenmäßig eingeschränkte Zollvergünstigungen
a. Zollkontingent
i. Lizenzkontingent
ii. Zollkontingent im Windhundverfahren
b. Zollplafond - Zeitlich aber nicht wert- oder mengenmäßig eingeschränkte Zollvergünstigung
i. Zollaussetzung
Was ist eine Lizenzkontingent?
- Wert- oder mengenmäßig eingeschränkte Zollvergünstigungen
- Mit der Erteilung der Einfuhrlizenz an Firmen ist die Anwendung der Zollvergünstigung garantiert
- Danach, Regelzollsatz
Was ist eine Zollkontingent im Windhundverfahren?
- Eine Zollkontingent
- Reservierung von Kontingentsmengen is nicht möglich.
- First come, first served
Was ist eine Zollplafond?
• Wert- oder mengenmäßig eingeschränkte Zollvergünstigungen
• Anders bei einem Zollkontingent führt das Erreichen des Plafonds nicht automatisch zum Wegfall der Zollvergünstigung:
1. Amtsblatt: Plafond
2. Plafond wird erreicht
3. Mit einer Rechtsverordnung der Europäische Kommission wird die Aufhebung der Vergünstigung bekannt gegeben
4. Tritt in Kraft (3 Tage später)
5. Regelzollsatz
Was ist eine Zollaussetzung?
- Zeitlich aber nicht mengen- oder wertmäßig eingeschränkte Zollvergünstigung
- Die Europäische Gemeinschaft gewährt aufgrund von Verträgen oder autonom (ohne vertragliche Verpflichtung), zolltarifliche Abgabenvergünstigungen bei der Einfuhr, die zu einer Zollermäßigung bis hin zum Zollsatz 0% führen.
What are import duties?
Customs duties payable on the importation of goods - Art. 5(20)
- Customs (third country customs, preference customs)
- Anti-dumping customs
- Import VAT
- Consumer taxes (mineral oil, alcohol, tobacco tax and electricity tax)
What customs procedures are there?
- Release for free circulation - collection
- Export
- Special procedures:
- Transit, comprising external and internal transit
- Storage, comprising customs warehousing and free zones
- Specific use, comprising temporary admission and end-use
- Processing, comprising inward and outward processing
What is the Transit customs procedure?
Transporting goods from one country, going through another country and selling it in a third country.
e.g. arrives in Holland, goes to Germany –> customs duties payable to Germany, not Holland.
What is the inward processing customs procedure?
Further processing of the goods in the EU before being re-exported and sold outside the EU
What is the outward processing customs procedure?
Further processing of the goods outside the EU before being re-imported and sold in the EU –> only pay customs on value added
What are the advantages of the customs warehousing (Zollagerverfahren) customs procedure?
Only pay customs when you sell the goods (interest advantage), time for inward processing stops
What is needed for determination of the amount of customs to pay?
- Customs tariff
- Origin
- Customs value
What governs the international customs value?
WTO Valuation Agreement
GATT-Zollwertkodex
In order, what methods are used to determine the customs value of goods?
TI-TITS-DCF
- Transaction value of the imported goods
- Transaction value of identical goods
- Transaction value of similar goods
- Deductive value
- Computed value
- Fall-back method
How to determine whether you can use the transaction value of the imported goods for the customs value?
- Bestehen Verwendungs- / Gebrauchsbeschränkungen - Art. 70(3)(a) UCC–> Ja –> ZW-Ermittlung nach Art 74(2)a-d; 74(3) UCC
- Bestehen besondere Kauf- oder Preisbedingungen - Art. 70(3)(b) UCC –> Ja –> Ist Berichtigung des Rechnungspreises möglich? –> Nein, ZW-Ermittlung nach Art 74(2)a-d; 74(3) UCC.
- Besteht Erlösbeteiligung - Art. 70(3)(c) UCC–> Ja –> Ist Berichtigung des Rechnungspreises möglich? Nein, ZW-Ermittlung nach Art 74(2)a-d; 74(3) UCC
- Besteht Verbundenheit - Art. 70(3)(d) UCC–> Ja –> Presibeeinflussung? –> Ja –> Ist Berichtigung des Rechnungspreises möglich? Nein, ZW-Ermittlung nach Art 74(2)a-d; 74(3) UCC.
Ansonsten, Art. 70 -Transaktionswert +/ ./. (Art. 71, 72)
What is the transaction value of the imported goods?
The price actually paid or payable for the goods when sold for export to the customs territory of the Union, adjusted, where necessary (Art 70 Union Customs Code)
- price actually paid or payable
- goods, not services
- sale (not commission)
- for export
What does the “existing limitation of application/use” condition for the transaction value as the customs value mean?
There must be no restrictions as to the disposal or use of the goods by the buyer, other any of the following: - restrictions imposed or required by a law or by the public authorities in the Union - limitations of the geographical area in which the goods may be resold, or - restrictions which do not substantially affect the customs value of the goods Art 70(3)(a)UCC
What does the “existing special purchase or price conditions” condition for the transaction value as the customs value mean?
Sale or price must not be subject to some condition or consideration for which a value cannot be determined wrt the goods being valued Art 70(3)(b)
What does the “existing income participation” condition for the transaction value as the customs value mean?
No part of the proceeds of any subsequent resale, disposal or use of the goods by the buyer will accrue directly or indirectly to the seller, unless an appropriate adjustment can be made Art 70(3)(c)
What does the “existing bond” condition for the transaction value as the customs value mean?
The buyer and seller must not be related OR
The relation must not have influenced the price
Art 70(3)(d)
What are the functions of warehouses?
- Transit function
- Credit function
- Control measures relating to foreign trade policy
- Export storage
What is the transit function of a warehouse?
Following a transfer into the customs warehouse, imported non-community goods are not be transferred into free circulation. Instead they will later be re-expored
E.g. import of fire fighters’ helmets from the USA destined for Russia
What is the credit function of a warehouse?
Payment of entry duties is postponed until the stored goods are transferred into customs free circulation
What is the function of a warehouse to control measures relating to foreign trade policy?
Bridging the Union’s economic protection measures with respect to third countries
E.g. At the time of import, the required import approval was not available for textiles from USA. Until this is issued, the goods can be temporarily stored without having to pay duties.
What is the export storage function of a warehouse?
Non-community goods are transferred to a customs warehouse with the aim of ending a previous customs process
E.g. To end inward processing, goods are transferred to the warehouse as the export of the processed products can only take place at a later date. If the goods are not transferred to the warehouse then the deadline for settling the processing transactions could expire.
What conditions are there for a person to operate a customs warehouse (i.e. be the warehousekeeper)
- Established in the EU
- Applicant must guarantee proper application of warehouse provisions
- Must demonstrate an economic need. This exists when:
- goods are stored in a large amount
- the warehouse is mainly intended for the storage of goods
- average duration of storage is longer than 32 days
What two authorities are involved in the export procedure?
- Customs office of export is the customs office:
- responsible for supervising the place where the exporter is established, or
- where the goods are packed or loaded for export shipment.
Tasks: completes formalities for assigning goods leaving the customs territory to a customs procedure, including risk-based controls - Customs office of exit: Completes customs controls relating to the completion of exit formalities including releasing the goods for exit and supervising the physical exit of the goods from the customs territory
What is the normal export procedure?
- Exporter/representative lodges his export declaration (Single Administrative Document or SAD) at the customs office of export (Arts. 263, 172 UCC), and if requested lodges supporting documenting and presents the goods
a. Customs office of export conducts risk analysis (Art 264 UCC) and accepts the customs declaration (Art 172)
b. Customs office of export releases the goods (makes goods available for the export procedure) (Art 194 UCC)
c. SAD 1 (statistics), SAD 2 (KOBRA for risk analysis), SAD 3 (stamped, given to declarant to take to customs office of export). - Exporter/representative presents the goods and the SAD 3 to the customs office of exit.
- Customs office of exit performs customs controls relating to the completion of exit formalities and supervises the physical exit of the goods from the customs territory.
What is the electronic export procedure (keywords only)
- Customs declaration
- Acceptance of customs declaration
- Release for export / Export Accompanying Document (EAD) - shows export declaration lodged, shipment released for export
- Advance export notification
- Transport / EAD / Presentation of goods
- Release for exit / Transport
- Confirmation of exit
- Proof of export
What is the electronic export procedure?
- Customs declaration: Exporter lodges electronic export declaration with the customs office of export
- Acceptance: Customs office of export accepts the export declaration
- Release for export/EAD (Export Accompanying Document): Customs office of export:
a) examines whether the export is permissible
b) issues a Master Reference Number (MRN)
c) carries out a risk analysis (may request presentation of goods or documents if necessary)
d) releases the goods for export and issues and Export Accompanying Document (EAD) to identify the export operation - Advance export notification; customs office of export notifies the customs office of export that the goods are on their way
- Transport/EBD/Gestellung:
- consignment travels to customs office of exit
- exporter/representative presents the EAD and goods to the customs office of exit - Release for exit/Transport:
- The customs office of exit releases the goods for exit and supervises the physical exit of the goods from the EU customs territory
- The goods are transported to the receiver - Confirmation of exit:
- The customs office of exit confirms the exit to the customs office of export. - Proof of export: The customs office of export provides proof of export to the exporter/representative
How is preferential status documented?
One of the following:
- Movement certificate EUR. 1 or EUR-MED
- origin declaration EUR-MED
- Invoice declaration (usually for goods value up to 6.000€
- Approval of “authorised exporter” if goods value over 6.000€
- -> customs reductions or exemption from customs in the country of destination
What does TR stand for?
Turkey
What does IS stand for?
Iceland
What does LI stand for?
Liechtenstein
What does NO stand for?
Norway
What does CH stand for?
Switzerland
What does DZ stand for?
Algeria
What does EG stand for?
Egypt
What does IL stand for?
Israel
What does JO stand for?
Jordan
What does LB stand for?
Lebanon
What does MA stand for?
Morocco
What does PS stand for?
Palestine
What does SY stand for?
Syria
What does TN stand for?
Tunisia
What does AL stand for?
Albania
What does BA stand for?
Bosnia and Herzegovinia
What does HR stand for?
Croatia
What does MK stand for?
Macedonia
What does ME stand for?
Montenegro
What does RS stand for?
Serbia
What does FO stand for?
Faroe Islands
What does XK stand for?
Kosovo
