Integration Point recently hosted a webcast, featuring Jim Repper from Her Majesty’s (HM) Revenue & Customs UK (HMRC) – UCC Negotiations Team, to gain a better understanding of the Union Customs Code (UCC) and what the latest timescales really means to the trade. Due to time constraints, there were several questions that were not answered during the live event. Jim Repper agreed to answer those remaining questions here over a series of posts. The first post contained answers to questions posed to the panelist regarding details involved with the UCC and its implementation. This final post contains answers to questions regarding the legality behind the UCC as well as centralised clearance and questions regarding the Authorised Economic Operator (AEO).
If you missed the live webcast, you can register for the on-demand playback here.
Q: Are the 2016 and 2020 dates immoveable?
A: Never say never, but I think it would be highly unlikely these dates will be amended. IF there was a change, then fresh legislation would be required, and I don’t think anyone is prepared to go down that road. However, if push came to shove and it became clear that, for example, centralised clearance could not be put in place by 2020 for technical reasons, then there could be a move towards extending the transitional period for that particular aspect of the legislation. But, I think that there would need to be an extreme set of occurrences to bring about any changes.
Q: Will the first sale for export remain under the UCC and what happens to the royalty adjustment provision?
A: Although there is not a specific reference within the valuation provision of the UCC to “first sale”, there is a legal hook which may permit its retention within the supporting legislation. The royalty adjustment provision is not referred to in the UCC, and, without a legal hook, there is no possibility of it appearing in the supporting legislation.
Q: By operator, do you mean any company or the Customs operator?
A: “Operator” is a generic word used for anyone who has an involvement with customs, so it covers both parties referred to in the question.
Q: When we are talking about centralised clearance, does it mean that you can clear cargo within the EU, even when you are not located in the state you want to clear the cargo?
A: Basically, yes. The “clearance” of goods can mean many things to many people, and we are not yet clear on how the process will work. It is probably more accurate to say that the goods are presented in one Member State while the declaration is made in another.
Q: How many companies have, so far in the UK, applied for an AEO and how long does the application process take?
A: 525 AEO applications have so far been received in the UK with 370 certificates issued.
There are clearly laid down legal time limits within which the customs authorities must issue a decision. This stands at 120 calendar days plus a maximum of 60 calendar days should customs so require them. In addition, “the clock can be stopped” for a time in order to allow adjustments to be made to the applicant’s processes or procedures rather than the application withdrawn and the whole process start again. “Stopping the clock” is not counted against the legal time-limits. The average for issuing a decision stands at 220 calendar days – all of them being within the legally required time limit.
Q: What will happen or what is the disadvantage for companies without AEO registration?
A: Without formal AEO(c) certification, an operator will not be able to apply for Centralised Clearance or Self-Assessment or be able to obtain a duty deferment guarantee reduction. In addition, only an AEO(c) certificate holder can obtain a presentation waiver when authorised to make a declaration by entry in their commercial records. There are also some forms of movement of goods that will also require AEO(c) certification; for example, some movements under temporary storage.
Without being able to establish that they meet the AEO(c) criteria, an operator will be unable to obtain a comprehensive guarantee or a comprehensive guarantee waiver.
Furthermore, there are various conditions of special procedures that are deemed to be met where the applicant holds and AEO(c) certificate. However, the granting of the authorisation is not dependent upon an AEO(c) certificate being held.
Therefore, if an operator has no desire to operate centralised clearance or self-assessment and does not wish to apply for a guarantee waiver or reduction, they may not consider themselves to be immediately disadvantaged. However, over the long term, more changes and facilitations may become available and AEO(c) may become the standard operating criteria.
Q: Would the simplifications apply to non-resident importers who are part of a mutual recognition program such as C-TPAT and AEO? Which could be an example of a company meeting AEO criteria but not being certified.
A: Two part question here. Firstly, in order to take advantage of the simplifications within the UCC (where AEO(c) certification/compliance is a requirement), then the AEO criteria cannot be deemed to be met because the applicant has C-TPAT or any other external AEO equivalent. Secondly, there are several examples of where an applicant only has to meet the AEO(c) criteria to obtain a simplification/facilitation – a special procedure guarantee waiver comes immediately to mind.
Don’t forget to access a copy of the webcast playback on-demand here.