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PART 4U.K.Procedure-specific Rules

CHAPTER 1U.K.Storage Procedure

Modifications etc. (not altering text)

[F1SECTION 1U.K.Customs warehouses]

Textual Amendments

Eligibility for approval to operate a customs warehouseU.K.

14.—(1) This regulation applies to a person who owns, operates or otherwise uses premises which the person intends to operate as a customs warehouse.

(2) HMRC may approve the person to operate the premises as a customs warehouse only if an HMRC officer is satisfied that—

(a)the person will use the premises, or will only permit the premises to be used, primarily for the storage of goods;

(b)the person has a satisfactory logistical system to record the movement of goods into, within and out of the premises;

(c)where the person intends to operate premises as a public customs warehouse, there is sufficient potential trade for a public customs warehouse to be viable; and

(d)where the person intends to operate premises as a private customs warehouse, there would be sufficient benefit to the applicant to justify approval.

Commencement Information

I1Reg. 14 in force at 31.12.2020 by S.I. 2020/1643, reg. 2, Sch.

Approval to operate a customs warehouseU.K.

15.—(1) A notification of approval by HMRC to operate premises as a customs warehouse must specify—

(a)the premises;

(b)the approved person; and

(c)whether the premises are to be operated as a public customs warehouse or a private customs warehouse.

(2) The warehouse is not to be used for any processing of goods other than—

(a)an operation of a type—

(i)described in sub-paragraph (b) of paragraph 11 of Schedule 2 to the Act; and

(ii)specified in a notice published by HMRC as an operation constituting a usual form of handling of goods; or

(b)processing authorised under paragraph (3).

(3) The approval may authorise the taking place in the warehouse of the processing of goods declared [F2for a free zone procedure,] for an inward processing procedure or for an authorised use procedure where an HMRC officer is satisfied that—

(a)the holder of the procedure in relation to the goods or the approved person of the warehouse has an economic need for the processing to be carried out in the warehouse; and

(b)control by any HMRC officer of the goods subject to the [F3customs warehouse procedure] and goods subject to, as the case may be, the [F4free zone procedure,] inward processing procedure or authorised use procedure would not be adversely affected by the authorisation to carry out the processing in the warehouse.

(4) An approval must not authorise the keeping of goods other than chargeable goods in the customs warehouse unless—

(a)the other goods to be kept in the warehouse are domestic goods; and

(b)an HMRC officer is satisfied that—

(i)the approved person has viable commercial reasons for the storage of domestic goods alongside goods declared for a storage procedure; and

(ii)control by any HMRC officer of any chargeable goods stored in the warehouse would not be adversely affected by storage of domestic goods.

(5) The approval must require accounting segregation in accordance with a notice made under regulation 44 where—

(a)the approval permits domestic goods to be stored in the warehouse; and

(b)it is not possible, without incurring disproportionate cost, to identify—

(i)whether any goods stored are domestic goods or chargeable goods; and

(ii)the Customs procedure for which any chargeable goods have been declared.

(6) The approval is granted subject to the following conditions—

(a)retail sales of goods from the warehouse are not permitted other than as specified in the approval notification;

(b)the approved person must not allow goods [F5declared for a [F6customs warehouse procedure]] to leave the warehouse unless they are removed in accordance with regulation 17;

[F7(c)in relation to goods declared for a customs warehouse procedure, the approved person must notify any person keeping such goods in the warehouse of any permission to remove the goods from the warehouse contained in the approval notification;]

(d)the approved person must notify HMRC without delay of any breach by any person who is a holder of a procedure of any requirement imposed by or under Part 1 of the Act in relation to goods kept by the person in the warehouse; and

(e)such other conditions as may be specified in the approval notification.

(7) The approval may be granted subject to conditions regarding (amongst other things)—

(a)the type of goods which may be kept in the warehouse;

(b)the activities that are permitted to be carried out in the warehouse;

(c)the amount of time for which particular goods may be kept in the warehouse; and

(d)the facilities in which particular goods must be stored whilst kept in the warehouse.

(8) Where the approved person breaches a requirement imposed by provision made by or under Schedule 2 to the Act in relation to the keeping of goods in the warehouse, the approved person is liable to any import duty arising as a result of that breach unless the approval specifies otherwise.

Textual Amendments

Commencement Information

I2Reg. 15 in force at 31.12.2020 by S.I. 2020/1643, reg. 2, Sch.

Obligations relating to keeping goods in a customs warehouseU.K.

16.—(1) A person must not declare goods for a [F8customs warehouse procedure that] are not of a type which may be kept in the warehouse [F9in which the goods are to be kept] under the conditions of the approval.

(2) Subject to paragraph (3), where goods have been declared for a [F10customs warehouse procedure] the person in whose name the goods have been declared must—

(a)ensure that the goods declared are moved directly to the customs warehouse named in the declaration once HMRC have accepted the declaration; and

(b)provide the approved person with details of the declaration and any differences between the goods deposited and the goods declared.

(3) In paragraph (2), where the person in whose name the goods have been declared is acting as an indirect agent, the reference to the person in whose name goods have been declared is to be read as a reference to the person on whose behalf the goods have been declared.

(4) A holder of the procedure who keeps goods in a customs warehouse must not—

(a)cause or permit those goods to be removed from the warehouse unless they are removed in accordance with regulation 17; or

(b)carry out, arrange or permit any processing of the goods other than as permitted under regulation 15(2).

Textual Amendments

Commencement Information

I3Reg. 16 in force at 31.12.2020 by S.I. 2020/1643, reg. 2, Sch.

Removal of goods from a customs warehouseU.K.

17.—(1) No person may remove from a customs warehouse goods declared for a [F11customs warehouse procedure] which have not been discharged M1 from [F12that] procedure (“declared goods”) unless—

(a)permitted under this regulation; or

(b)permitted by the approval notification relating to that customs warehouse.

(2) Declared goods may be permanently removed from a customs warehouse if the removal has been approved by HMRC.

(3) Declared goods may be temporarily removed from a customs warehouse if—

(a)the purpose of removing the goods is to undertake an operation of a type—

(i)described in sub-paragraph (b) of paragraph 11 of Schedule 2 to the Act; and

(ii)specified in a notice published by HMRC as an operation constituting a usual form of handling of goods; and

(b)the removal has been approved by HMRC.

(4) Paragraph (5) applies where—

(a)a person removes declared goods from a customs warehouse;

(b)the removal was not intended; and

(c)the removal was caused by abnormal and unforeseeable circumstances beyond the person's control.

(5) Where this paragraph applies—

(a)approval by HMRC for the removal is not required; but

(b)the person must notify HMRC that the removal has occurred.

(6) Declared goods may be removed from a customs warehouse where the goods move between—

(a)premises operated as customs warehouses and identified in the same approval;

[F13(b)the warehouse and a place at which, in relation to those goods, a notification of export of goods from the United Kingdom must be given under regulation 51(4) of the Customs (Export) (EU Exit) Regulations 2019;]

(c)the warehouse and a customs office at which a declaration for the purposes of discharging the storage procedure may be accepted [F14; or]

[F15(d)the warehouse and a location in Northern Ireland.]

(7) Any movement of goods under paragraph (6) must be completed within—

(a)30 days beginning with the day after the day on which the goods are removed from the customs warehouse; or

(b)any longer period permitted by an HMRC officer.

(8) Any person removing declared goods from a customs warehouse in contravention of this regulation is liable to import duty on those goods.

F16(9) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

Commencement Information

I4Reg. 17 in force at 31.12.2020 by S.I. 2020/1643, reg. 2, Sch.

Marginal Citations

M1See paragraphs 18 to 20 of Schedule 2 to the Act on discharge of goods from a Customs procedure.

Usual forms of handling – changes in nature of goodsU.K.

18.—(1) Paragraph (2) applies where—

(a)a declaration (“the first declaration”) of goods for a [F17customs warehouse procedure] has been made;

(b)there is a change in the goods by virtue of an operation that has been applied to the goods whilst the goods are subject to the procedure;

(c)the operation is of a type—

(i)described in sub-paragraph (b) of paragraph 11 of Schedule 2 to the Act; and

(ii)specified in a notice published by HMRC as an operation constituting a usual form of handling of goods;

(d)a further declaration (“the second declaration”) of the goods for a different Customs procedure is made; and

(e)a liability to import duty is incurred in respect of the goods by virtue of making the second declaration.

(2) Where this paragraph applies the declarant may elect in the second declaration that the liability be determined by reference to the goods as they stood when the first declaration was made.

Textual Amendments

Commencement Information

I5Reg. 18 in force at 31.12.2020 by S.I. 2020/1643, reg. 2, Sch.

[F18SECTION 2U.K.Free zones

Textual Amendments

Authorisation as a free zone businessU.K.

18A.—(1)  An approval notification issued in relation to an authorisation as a free zone business must specify—

(a)the free zone or free zones in which—

(i)goods declared for a free zone procedure may be kept; and

(ii)any other free zone activity may take place;

(b)the authorised person;

(c)if the person is authorised to declare goods for a free zone procedure, that they are so authorised; and

(d)any free zone activities authorised.

(2) An authorisation to declare goods for a free zone procedure is subject to the requirements set out in regulation 18B and the conditions provided for in regulation 18C.

(3) An authorisation to carry out a free zone activity is subject to the conditions provided for in regulation 18C.

Textual Amendments

Authorisation to declare goods for a free zone procedure – requirementsU.K.

18B.—(1) Where an authorisation to declare goods for a free zone procedure is granted, the following are requirements of the procedure—

(a)in a case where the goods are outside a free zone when a declaration of those goods for a free zone procedure is accepted, the authorised person—

(i)once HMRC have accepted the declaration, ensures that the declared goods are moved directly to a free zone in which the goods are authorised to be kept; and

(ii)provides the responsible authority for that free zone with details of the declaration and any differences between the goods deposited and the goods declared;

(b)the authorised person—

(i)stores, uses or processes the goods themselves or arranges for another free zone business to store, use or process the goods; and

(ii)ensures such storage, use or processing takes place in accordance with the conditions of the authorisation of the free zone business carrying out those activities;

(c)where processing of the goods results in the production or manufacture of other goods in which the goods can be identified, the processing, or each individual processing operation, results in the production or manufacture of an approved quantity of the other goods; and

(d)the holder of the procedure does not export the goods or cause them to be exported where—

(i)the export is to a country or territory with whose government Her Majesty’s government in the United Kingdom has made arrangements which contain provision for the rate of import duty applicable to goods, or any description of goods, originating from the country or territory to be lower than the applicable rate in the customs tariff in its standard form, within the meaning given in section 9(2) of the Act;

(ii)a United Kingdom proof of origin issued under any provision made under section 9 of the Act in relation to the goods has been obtained for the purpose of claiming the lower rate when the goods are imported into the country or territory referred to in paragraph (i); and

(iii)the arrangements are not of a description specified in a notice published by HMRC.

(2) For the purposes of paragraph (1)(c), the methodology by which the approved quantity of the other goods is to be determined—

(a)is to be specified in the approval notification; and

(b)is to be—

(i)chosen by the applicant, if an HMRC officer approves that choice; or

(ii)in all other cases, set by an HMRC officer.

Textual Amendments

Free zone businesses – conditionsU.K.

18C.—(1) An authorisation as a free zone business is granted subject to conditions A to C and any other conditions specified under paragraph (6).

(2) Condition A is that the authorised person does not bring or cause to be brought into a free zone, or declare for a free zone procedure, goods of a description specified in a notice published by HMRC.

(3) HMRC—

(a)must publish a notice specifying a description of the goods mentioned in paragraph (2); and

(b)may specify a description of goods by reference to any matter or circumstance (including the manner in which a customs declaration may be made or is to be made in respect of them).

(4) Condition B is that the authorised person complies with any requirement of an HMRC officer that goods in the free zone are to be—

(a)segregated, marked or otherwise identified; or

(b)produced to an HMRC officer for examination.

(5) Condition C is that the authorised person does not cause or permit chargeable goods to be removed from the free zone otherwise than in accordance with regulation 18F.

(6) The authorisation is granted subject to such other conditions as may be specified in the approval notification issued in relation to the authorisation which may include conditions regarding (amongst other things)—

(a)the type of goods the authorised person may—

(i)bring into or keep in the free zone; or

(ii)declare for a free zone procedure;

(b)any activities that may be carried out in relation to the goods;

(c)in relation to the keeping of goods in the free zone—

(i)the amount of time for which they may be kept;

(ii)the facilities in which they must be stored.

Textual Amendments

Notification that goods are to be kept in a free zoneU.K.

18D.—(1)  A notification that goods are to be kept in a free zone must be given to HMRC—

(a)in relation to goods of a description specified in a notice published by HMRC; and

(b)by the person specified in a notice published by HMRC.

(2) The notification referred to in paragraph (1) must—

(a)contain the matters;

(b)be accompanied by the documents

(c)be made in the form and manner; and

(d)be given within the period,

specified in a notice published by HMRC.

(3) A notice published under paragraph (1) or (2) may make different provision for different cases.

(4) If HMRC publish a notice under paragraph (1)(a), they must publish a notice under paragraphs (1)(b) and (2).

Textual Amendments

Control of other activities in free zones by responsible authorityU.K.

18E.—(1) Subject to paragraph (5), a person must not carry out any industrial, commercial or service activity in a free zone unless HMRC have been notified of an intention to carry out that activity before it is commenced.

(2) The notification referred to in paragraph (1) must be made by—

(a)a responsible authority for the free zone; or

(b)another person specified in a notice published by HMRC.

(3) Any notification referred to in paragraph (1) must be—

(a)made to the place;

(b)made in the form and manner, including electronic; and

(c)accompanied by the information, ,

specified in a notice published by HMRC.

(4) A notice published under paragraph (2)(b) or (3) may make different provision for different cases.

(5) A notification is not required to be given, or is to be treated as given, in any case specified in a notice published by HMRC.

(6) Where HMRC receive notification of intention to carry out an activity specified in paragraph (1), HMRC may prohibit or restrict such an activity where an HMRC officer considers it appropriate for the purposes of ensuring the control of chargeable goods.

(7) Where HMRC prohibit or restrict an activity specified in paragraph (1), HMRC must notify the person who made the notification and, if different, the responsible authority, in writing (including electronic) of—

(a)the prohibition or restriction on the activity; and

(b)the reason for the prohibition or restriction.

(8) A responsible authority for a free zone must take reasonable steps to ensure that—

(a)no person carries out an activity involving the keeping of goods subject to a special customs procedure in the free zone if—

(i)a notification was required to be given to HMRC under paragraph (1) in relation to that activity and was not so given or treated as having been given;

(ii)HMRC have prohibited that activity under paragraph (6); or

(iii)the activity would not comply with the terms of any restriction imposed under paragraph (6);

(b)no person brings into the free zone goods of a description specified in a notice published under regulation 18C(2); and

(c)no person removes goods from a free zone in breach of regulation 18F(1).

(9) A responsible authority must comply with any other requirements relating to the control of goods subject to a special customs procedure within a free zone that are imposed by an HMRC officer.

(10) If a responsible authority fails to comply with the requirement in paragraph (8) or a requirement imposed by an HMRC officer under paragraph (9), the responsible authority is liable to any import duty arising from the breach of the requirement.

Textual Amendments

Removal of goods from free zonesU.K.

18F.—(1) A person must not remove goods, or cause goods to be removed, from a free zone unless—

(a)if the person removing the goods is not a responsible authority for that free zone, notification of the movement has been given to that responsible authority in accordance with paragraph (2); and

(b)any of paragraphs (4) to (7) applies.

(2) The notification referred to in paragraph (1)(a) must be—

(a)made by the person;

(b)made in the form and manner, including electronic; and

(c)accompanied by such information,

as specified in a notice published by HMRC.

(3) HMRC must publish a notice specifying the matters referred to in paragraph (2) and may make different provision for different cases.

(4) This paragraph applies where—

(a)the goods have been declared for—

(i)an inward processing procedure;

(ii)an authorised used procedure;

(iii)a transit procedure;

(iv)a temporary admission procedure; or

(v)a customs warehouse procedure;

(b)the procedure has not been discharged; and

(c)the movement of goods out of the free zone takes place in accordance with the requirements relating to the procedure for which the goods have been declared.

(5) This paragraph applies where—

(a)the goods have been declared for a free zone procedure; and

(b)they are moved directly to—

(i)a place from which they are exported;

(ii)a customs office at which a declaration for the purposes of discharging the free zone procedure may be accepted;

(iii)a location in Northern Ireland; or

(iv)another free zone in Great Britain.

(6) This paragraph applies where the goods are domestic goods.

(7) This paragraph applies where—

(a)removal of the goods has been approved by an HMRC officer; and

(b)the movement takes place in accordance with any conditions of the approval.

(8) Subject to paragraph (9), any person who removes chargeable goods from a free zone, or causes such a removal, in contravention of this regulation is liable to import duty on those goods.

(9) Paragraph (8) does not apply where—

(a)a person removes or causes goods to be removed from a free zone;

(b)the removal was not intended;

(c)the removal was caused by abnormal and unforeseeable circumstances beyond the control of that person; and

(d)notification of the removal is given to the responsible authority as soon as reasonably practicable.

Textual Amendments

Liability to import duty where there is a change in the goodsU.K.

18G.—(1) Subject to paragraph (2), an applicant for authorisation to declare goods for a free zone procedure may—

(a)elect that any liability to import duty incurred in relation to processed goods resulting from processing while the goods are subject to the free zone procedure be determined by reference to the goods as they stood when the declaration was made; or

(b)reserve the right to elect, once the authorisation has been granted, that any liability to import duty incurred in relation to processed goods resulting from processing while the goods are subject to the free zone procedure be determined by reference to the goods as they stood when the declaration was made.

(2) Paragraph (1) applies only to the extent that—

(a)the processing under the free zone procedure consists of—

(i)qualifying processing activities as defined in paragraph 9(4) of Schedule 2 to the Act; or

(ii)the operations referred to in paragraph 11 of that Schedule (meaning of goods declared for “an inward processing procedure” in the supplementary form); and

(b)where the processing to be carried out is the use of production accessories, they are not—

(i)fuels or energy sources, other than those needed for the testing of processed goods or for the detection of faults in goods declared for the free zone procedure which need repair;

(ii)lubricants, other than those needed for the testing, adjustment or withdrawal of processed goods; or

(iii)equipment and tools;

(3) An election under paragraph (1) must be made in accordance with such additional requirements, if any, specified in a notice published by HMRC which may also specify amongst other things—

(a)further conditions that must be satisfied before an election under paragraph (1) may be made; and

(b)cases in which an election may not be made.

(4) An election under paragraph (1), once so made, has effect only if—

(a)the processing takes place within the period specified in either—

(i)the authorisation; or

(ii)a notice given to the applicant; and

(b)the processing takes place in accordance with the conditions of the applicant’s authorisation.

(5) Determination of liability to import duty incurred in relation to processed goods resulting from processing under a free zone procedure is to be by reference to the goods as they stood when the declaration for the procedure was made where—

(a)an election is made under paragraph (1); or

(b)paragraph (6), (7) or (10) applies.

(6) This paragraph applies where—

(a)the processed goods resulting from the processing of the goods are imported by the free zone business within one year after export of the processed goods or their removal from Great Britain to Northern Ireland; and

(b)if a declaration of those goods for the free-circulation procedure had been accepted at the time of their release to the free zone procedure—

(i)the goods would have been 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 have been required to give a guarantee under paragraph 15(5) of Schedule 4 to the Act.

(7) Subject to paragraphs (8) and (9), this paragraph applies where, if a declaration of those goods for the free-circulation procedure were accepted at the time the authorisation to declare goods for a free zone procedure is granted—

(a)the goods would have been subject to—

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

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

(iii)an agricultural policy measure; or

(b)the importer of the goods would have been required to give a guarantee under paragraph 15(5) of Schedule 4 to the Act.

(8) Paragraph (7) does not apply where—

(a)the goods are not ones in relation to which, if a declaration of those goods for the free-circulation procedure were accepted at the time the authorisation is granted—

(i)an additional amount of import duty under section 13, 14 or 15 of the Act would be applicable; or

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

(b)the aggregate value of goods to be declared for a free zone procedure to be processed under that procedure, by the applicant for authorisation, in that calendar year, for each classification code, does not exceed—

(i)in the case of sensitive goods, £135,000;

(ii)in all other cases, £270,000.

(9) Paragraph (7) does not apply where the goods—

(a)are non-commercial goods or personal gifts;

(b)are goods resulting from processing under an authorisation to declare goods for an inward processing procedure, the application for which was a case—

(i)in relation to which an examination of the available evidence was required for the purposes of regulation 20(1)(a); or

(ii)in relation to which an examination of the economic conditions was required for the purposes of Article 211(4)(b) of the UCC;

(c)are to be processed into samples;

(d)are to be reduced to waste and scrap;

(e)are to be destroyed; or

(f)are to be subject to recovery of parts or components.

(10) This paragraph applies where a liability to import duty has arisen as a result of a breach of the requirement at regulation 18B(1)(d).

Textual Amendments

Value of goods where there is a change in the goodsU.K.

18H.—(1) Where regulation 18G applies, the value of the goods for the purposes of import duty is to be determined by reference to the quantity of the goods declared for the free zone procedure—

(a)which, in accordance with a notice published by HMRC, are to be treated as present in the processed goods; and

(b)for which import duty is incurred.

(2) HMRC must publish a notice specifying the methods for determining the matters referred to in paragraph (1) and may make different provision for different cases.

Textual Amendments

Consequences of determination of liability under regulation 18GU.K.

18I.—(1) Paragraph (2) applies where—

(a)a liability to import duty is to be determined in accordance with regulation 18G(5);

(b)any processing in relation to the goods while they were subject to a free zone procedure was an authorised use under regulation 32 at the time that the goods were released to a free zone procedure; and

(c)at the time that the goods were released to a free zone procedure an application for authorisation to declare goods for an authorised use procedure by the person authorised to declare the goods for a free zone procedure would not have been prohibited by regulation 86(1) or (2) of the import duty regulations.

(2) Where this paragraph applies, the rate of import duty applicable to the goods is to be such rate as would have been applicable to those goods if they had been declared for an authorised use procedure and the declaration had been accepted by HMRC.

Textual Amendments

Usual forms of handling – changes in nature of goodsU.K.

18J.—(1) Paragraph (2) applies where—

(a)a declaration (“the first declaration”) of goods for a free zone procedure has been made;

(b)there is a change in the goods by virtue of an operation that has been applied to the goods whilst the goods are subject to the procedure;

(c)the operation is of a type—

(i)described in sub-paragraph (b) of paragraph 11 of Schedule 2 to the Act; and

(ii)specified in a notice published by HMRC as an operation constituting a usual form of handling of goods;

(d)a further declaration (“the second declaration”) of goods for a different Customs procedure is made; and

(e)a liability to import duty is incurred in respect of the goods by virtue of making the second declaration.

(2) Where this paragraph applies the declarant may elect in the second declaration that the liability be determined by reference to the goods as they stood when the first declaration was made.]

Textual Amendments