The Taxation Cross-border Trade (Special Procedures Supplementary and General Provision etc.) (EU Exit) Regulations 2020

Discharge of an inward processing procedure U.K.

3.—(1) This regulation applies to processed goods where the processing was carried out under an inward processing procedure, but does not apply where—

(a) the processing takes place using equivalent domestic goods M1 in place of goods intended to be declared for the procedure (“intended imported goods”) and the processed goods are exported before the intended imported goods are imported;

(b) if the goods as they stood when the declaration for the procedure was made were declared for the free-circulation procedure M2 and that declaration were accepted—

(i) the goods would be subject to—

(aa) an additional amount of import duty under section 13, 14 or 15 of the Act;

(bb) a non-tariff trade policy measure; or

(cc) an agricultural policy measure; or

(ii) the importer of the goods would be required to give a guarantee under paragraph 15(5) of Schedule 4 to the Act; or

(c) export of the goods would breach the requirement of the procedure set out in regulation 22(3)(c) of the special procedures regulations.

(2) This paragraph applies where—

(a) the processed goods are—

(i) a necessary result of the processing; and

(ii) not goods whose production or manufacture was the purpose of the processing;

(b) the processed goods are disposed of in accordance with—

(i) the authorisation to declare the goods for an inward processing procedure; or

(ii) all applicable provisions in any enactment relating to disposal of the goods;

(c) destruction of the goods is prohibited under an enactment on the grounds that destruction could not take place without harming the environment; and

(d) the holder of the procedure can demonstrate to the satisfaction of an HMRC officer M3 that discharge of the procedure in accordance with the rules relating to discharge in paragraphs 18 and 19 of Schedule 2 to the Act is either impossible or not economically viable given the nature of the goods.

(3) Where paragraph (2) applies and paragraph (6) does not apply, the processed goods are to be treated for the purposes of Part 1 of the Act as if, on the date the processed goods are disposed of—

(a) the processed goods were declared for the free-circulation procedure;

(b) HMRC M4 accepted that declaration; and

(c) the free-circulation procedure was discharged.

(4) This paragraph applies where the processed goods are delivered to persons who are eligible for relief from import duty pursuant to—

(a) the Vienna Convention on Diplomatic Relations (Vienna, April 18, 1961) M5 ;

(b) the Vienna Convention on Consular Relations (Vienna, April 24, 1963) M6 ; or

(c) the Convention on Special Missions (December 8, 1969) M7 ; or

(d) section 36 (visiting forces and headquarters) of the UK Reliefs document.

(5) Where paragraph (4) applies, the processed goods are to be treated for the purposes of Part 1 of the Act as if, on the date the processed goods are delivered—

(a) the processed goods were declared for the free-circulation procedure;

(b) HMRC accepted that declaration; and

(c) the free-circulation procedure was discharged.

(6) Subject to paragraph (7), this paragraph applies where—

(a) the processed goods are aircraft, or parts thereof, that are delivered to a person who will use the processed goods, where an HMRC officer is satisfied that—

(i) the goods released to an inward processing procedure have been used for the first time for the manufacture, modification, conversion, or repair, including maintenance, of the aircraft, or parts thereof; and

(ii) the records of the holder of the procedure are sufficient to enable HMRC to verify that the procedure has been correctly applied and operated;

(b) the processed goods are spacecraft or related equipment, or parts thereof, that are delivered to a person who will use the processed goods, where an HMRC officer is satisfied that—

(i) the goods released to an inward processing procedure have been used for the first time for the manufacture, modification, conversion or repair, including maintenance, of satellites, their launch vehicles and ground station equipment, or integral parts thereof; and

(ii) the records of the holder of the procedure are sufficient to enable HMRC to verify that the procedure has been correctly applied and operated;

(c) the processed goods are goods other than those referred to in paragraph (2)(a), where—

(i) either—

(aa) the import duty applicable in a standard case to which paragraph 1 of Part 4 of the Tariff of the United Kingdom applies is 0%; or

(bb) an authorised release certificate CAA Form 1 M8 has been issued in relation to those processed goods, or an equivalent certificate has been issued in relation to those processed goods in accordance with the law of another country;

(ii) the processed goods are delivered to a person who will use them; and

(iii) an HMRC officer is satisfied that—

(aa) the goods released to the inward processing procedure have been used for the first time in the processing relating to the processed goods or parts thereof; and

(bb) the records of the holder of the procedure are sufficient to enable HMRC to verify that the procedure has been correctly applied and operated.

(7) Paragraph (6) does not apply where the processing consists solely of repair of the goods, including maintenance thereof.

(8) Where paragraph (6) applies, the processed goods and any processed goods referred to in paragraph (2)(a) that result from the same processing are to be treated for the purposes of Part 1 of the Act as if, on the date of the completion of the first use of the goods released to an inward processing procedure—

(a) the processed goods were declared for the free-circulation procedure;

(b) HMRC accepted that declaration; and

(c) the free-circulation procedure was discharged.

(9) For the purposes of paragraphs (6) and (8) whether the goods released to the procedure have been used for the first time is to be determined in accordance with the terms of the authorisation to declare goods for an inward processing procedure and the date of the completion of the first use is to be determined accordingly.

(10) In this regulation—

“a standard case” means a case other than one to which any of sections 9 to 15 or 19(4) of the Act apply (preferential rates, quotas, tariff suspension, safeguarding, etc);

“Tariff of the United Kingdom” has the same meaning as it has in the Customs Tariff (Establishment) (EU Exit) Regulations 2020 M9 ;

“UK Reliefs document” has the same meaning as it has in the Customs (Reliefs from a Liability to Import Duty and Miscellaneous Amendments) (EU Exit) Regulations 2020 M10 .

Modifications etc. (not altering text)

C1 Regs. 1-4 applied (with modifications) (31.12.2020) by The Customs (Northern Ireland) (EU Exit) Regulations 2020 (S.I. 2020/1605), regs. 1(1), 36; S.I. 2020/1643, reg. 2, Sch.

Commencement Information

I1 Reg. 3 not in force at made date, see reg. 1(2)

I2 Reg. 3 in force at 31.12.2020 on IP completion day by S.I. 2020/1643, reg. 2, Sch.

Marginal Citations

M1 The meaning of “equivalent domestic goods” is given in paragraph 23(2) of Schedule 2 to the Act.

M2 The meaning of “the free-circulation procedure” is given in section 3(3)(a) of the Act.

M3 “HMRC officer” is defined in section 37(1) of the Act for the purposes of Part 1 of the Act.

M4 “HMRC” is defined in section 37(1) of the Act.

M5 Cmnd. 2565. Available electronically from: http://legal.un.org/ilc/texts/instruments/english/conventions/9_1_1961.pdf. A hard copy is available for inspection free of charge at the offices of HMRC at 100 Parliament Street, London, SW1A 2BQ.

M6 Cmnd. 5219. Available electronically from: http://legal.un.org/ilc/texts/instruments/english/conventions/9_2_1963.pdf\. A hard copy is available for inspection free of charge at the offices of HMRC at 100 Parliament Street, London, SW1A 2BQ.

M7 Cmnd. 4300. Available electronically from: http://legal.un.org/ilc/texts/instruments/english/conventions/9_3_1969.pdf. A hard copy is available for inspection free of charge at the offices of HMRC at 100 Parliament Street, London, SW1A 2BQ.

M8 A sample form can be found at https://info.caa.co.uk/media/1033/caa-form-1.pdf.

M9 S.I. 2020/1430.

M10 S.I. 2020/1431.