If you’re not a customs brokers, a customs managers within a company or a developer of customs software, you may or may not be aware that new EU-wide customs regulations (Union Customs Code or UCC) will come into play from 1 May 2016. Within these groups, there has been a lot of speculation about how UCC will affect day-to-day customs management.
Most questions address the changes ahead
“What will be the new requirements in terms of how, when and what to communicate with customs authorities? What will happen to customs permits? Will there be changes to customs procedures? Will we be able to keep the simplifications we have today? Will everything change from Day One or will there be transitional arrangements of some sort?”
But there has been little thought and discussion about customs matters that will remain unchanged after the introduction of UCC. We think many companies could benefit from reviewing how they work with these unchanged areas ahead of the full digitalization of customs declarations.
Areas that will not change include:
- Commodity codes
- How to calculate Customs value*
- How to determine Preferential origin for exports and imports
- Excise duties
And the questions you may want to ask yourselves:
- Which of these areas are relevant for us?
- How well do we handle these within our company?
- Who is responsible for these in our company?
- Do we have documented work routines that are updated and relevant?
- Do we have the knowledge to perform to the required standard?
- When did we last check our quality in these areas?
Direct impact on the duties you pay
Most of the areas above have a direct impact on the level of duties levied on the goods involved, and as such will be of interest for future customs controls and audits after digitalization. Your business may already carry out this part of your customs work to a high standard. However, should you need to make some improvements, now is the time to find out and plan how to address any gaps you find. Some companies may only have a few articles (parts and products), but many have thousands. It takes time to review these registers properly, especially if some time has elapsed since you last did this. You may also have had staff changes leaving a knowledge gap about what has been done before.
We hope this can help you prepare as early and as well as possible for the changes – and non-changes – ahead. Do not hesitate to contact us at KGH if we can help you with any specific questions.
*Customs value will not change apart from “first sale” practice can no longer be used and, in the case of sea transport, the value at the first EU arrival port applies.