Recently Integration Point held a webcast on the European Union’s (EU) Union Customs Code (UCC) and what organizations need to know now that we are almost one year away from implementation.  The presenters were from the United Kingdom’s HM Revenue & Customs (HMRC) team that has been working on the UCC. During the webcast there were several questions that we were not able to answer due to time. The panel agreed to provide answers to those questions to be posted here.

The first set of Q&A dealt with Authorised Economic Operator or AEO and why it is important in the UCC.  You can find that post here.

This second set of Q& dealt with Inward Processing Relief (IP or IPR) and Processing under Customs Control (PCC). You can find that post here.

If you missed the webcast, you can view it on-demand here.


Can you explain what is meant by the "sale immediately prior" to entry into community in value change since this  could mean various things and in certain cases would not accomplish the goal of eliminating 1st sale­.

The Commission’s aim is to get as close to the final value (the Last Sale) as possible and there were many changes to the text before we got to this version. The UK (and some other Member States) acknowledges that there is room for improvement and discussions are ongoing with the Commission on this point.  At the moment, the reference was intended to allow sales of goods already in the EU (warehouse, etc) to serve as the basis for the customs value instead of having recourse to secondary methods of valuation with the inevitable difficulties associated with the secondary methods.  The UK continues to seek clarity on this point.


Valuation: Earlier Sale - Could you provide example of Current Regulation & what the change is in 2016 by providing example of a Non EU Co Shipping to Affiliated office for consumer sale?  Can you provide example of how value / duty is assessed?

We are currently working on producing guidance notes with the Commission on how the new legislation will work in practice. For now, the Earlier Sales procedure works as follows;

You can use an Earlier Sale where it can be demonstrated that there are specific and relevant circumstances which led to export of the goods to the customs territory of the community. Ways in which you can do this include the following;

  • the goods  are manufactured according to EU specifications, or are identified (according to, for example, the marks they bear) as having no other use or destination
  • the goods in question were manufactured or produced specifically for a buyer in the EU
  • specific goods are ordered from an intermediary who sources the goods from a manufacturer and the goods are shipped directly to the EU from that manufacture.

Please note that this will change when the new legislation is introduced. The changes will practically eliminate any earlier sale in the supply chain with the last sale becoming “the norm”.

The Commission has started to look again at the new Legislation intensively but they cannot issue guidance until the new legislation has been adopted (later this summer).

 Assuming that royalties NOT having anything to do with goods - e.g. a royalty for marketing know-how - will not be included?!­

Under the current arrangements the importer is often required to pay a royalty or part of a royalty in respect of technical information or “know-how” supplied by the seller. Claims that the royalty or part royalty does not relate to the imported goods may be accepted where it can be established that the particular information or “know-how” has to do with something clearly unrelated to the imported goods and that the amount paid is reasonable having regard to what is supplied. Claims made for exclusion of payments for the provision by the seller to the importer of information necessary to assemble and/or use the goods for the purpose for which they were designed are   not acceptable.

Payments made (whether the full royalty or only part) for technical information concerning a process or operation that is specialised in itself, are excludable from the customs value (for example the importer may be able to show that the process could be carried out by similar goods obtained from other suppliers, who manufacture them without specialised information from the licensor or the importer).

So in summary, marketing “know how” has not always been excluded from the Customs Value; it all depends on the circumstances. It is envisaged that the situation will remain much as stated above subject to the ongoing discussions with the Commission and production of suitable guidance. The UK will raise this question as part of that process.


The next round of Q&A will focus on Guarantees and Special Procedures.