Customs Classification, Excise and Duty
1 Within the European Union
The completion of the Single European Market in January 1993 meant that exporters* supplying customers within the EU no longer had to provide custom documentation on moving goods from their own country to another Member State. (The SAD is still required for trade with the non-fiscal areas of the EU and for goods, transiting through the EU, destined for non-EU markets.).
Two new requirements were introduced: VIES and Intrastat (see Chapter 14, VAT, Paras. 14:6.1, 14:6.3 and 14:6.5) VIES (Vat Information Exchange System) places an onus on the exporter to make a quarterly return to the Revenue Commissioners. Its purpose is to ensure that VAT liabilities are recorded and discharged in the appropriate country. The Intrastat system is required to compile statistics of intra-EU trade. Exporters, whose total exports to EU Member States exceed 634,869 annually, are required to provide a detailed monthly statement to the VIMA (VIES, Intrastat, Mutual Assistance) office at Dundalk, Co. Louth.
•Exporters The term is used loosely here in describing intra-EU trade as exporting importing/exporting. The European Commission uses the terms supplies and acquisitions - given that we are all within the Single European Market. However, it will probably remain common parlance within Europe to talk about exporting from, e.g. Ireland to France for some time yet.
2 Exports to countries outside the EU
Exporting from Ireland to third countries requires the completion of Customs formalities by the exporter or his agent. The necessary documentation for clearance of goods through Customs should accompany the Customs declaration. The declaration must correspond with the goods being shipped. The principal document required by customs are the SAD, the Export Licence (if one is required, see Chapter 13) and the EUR1 if preference is being claimed.
2.1 Automated Entry Processing
Customs export (and import) procedures were automated in April 1991. The new system (AEP) replaced the manual processing of the export document-the SAD. Data are submitted to the AEP in one of two ways, either directly by the trader or else by customs officers. The first is known as Direct Trader Input(DTI) and the second as Customs Input (CI). In the latter case Customs communicate directly with AEP.
2.2 Direct Trader Input
DTI users must be approved in advance by Customs, and are issued with a Trader Account Number(TAN) and confidential password. Traders must use approved messaging standards, and use only the managed network to communicate with AEP. The messaging standard is known as Irish Customs Edifact Specifications. The network is managed by Icarus e-Com.
In practice the trader inputs the SAD information on his terminal and transmits to AEP via Icarus e-Com.The AEP checks the information received, and if everything is in order, a Green routing is assigned, and the goods may then be moved through Customs. If this is not the case, an Orange routing indicates a documentary check will be required, while a Red routing means that a physical check of the goods is necessary.
Eighty per cent of exports are now handled on a DTI basis, so direct input by Customs should not be seen as an option for the future. On May 1st 1996 the paper-less declaration facility was introduced in order to further facilitate trade, by giving legal status and accountability to Electronic Document Interchange (EDI) i.e. SADs submitted via computer. The introduction of Paper-less Declarations is backed by the Historic Database System (HDS). This database has access to SAD data for a period of three years, in addition to the current year. A paper-less declaration has the same legal status as a declaration on a hard copy SAD. The combination of the TAN and the confidential password has the same legal status as a hand written signature.
2.3 CAP Goods exports
Goods which are eligible for export refunds still require proof of export from the EU in the form of a hard-copy SAD. Exporters are required to have the SAD stamped by Customs. These goods have not been included in the paper-less declaration regime.
2.4 Simplified Procedures
Low value consignments - Approved traders may present a commercial document to Customs in lieu of
the SAD where the export consignment does not exceed 634.87 in value. Information is available from Customs Procedures B branch. See Appendix 1 for details.
Local clearance procedure - This is a procedure which allows exporters to have their Customs Office of Export formalities carried out at their own premises. The facility does not apply to goods liable to excise duties or those subject to special regimes such as CAP goods. The procedure requires the approval of the Revenue Commissioners. Information is available from Customs Procedures B branch. See Appendix1 for details.
Simplified declaration procedures - Exporters who ship regularly to third countries may make a simplified export declaration at the time of export. The declaration may be in the form of an incomplete SAD or another administrative or commercial document. The declaration must contain sufficient information to enable the goods to be identified. A supplementary declaration is made at the end of the month. This covers all simplified declaration made during the month in question. The Revenue Commissioners may require a guarantee from the exporter in order to ensure compliance with their procedures and prior approval is necessary. Exporters who wish to use the procedure must apply in writing to their local Customs office.
Incomplete export declaration - Customs may accept an incomplete declaration at the time of export, where the exporter, for good reasons, does not have all the relevant information or backing documentation necessary to complete the declaration. Community rules allow for certain minimum information to appear on an incomplete declaration. A full completed declaration, including any missing documentation must be provided to Customs within one month of providing the incomplete declaration. Exporters must apply for this facility to their local Customs office.
2.5 Relevant Legislation
Customs administrations in the member states operate under the provisions of the Community CustomsCode (Council Regulation EEC No. 2913/92). Details are available in the Official Journal of the European Communities No. L302, 19th October 1992. Copies are available from:
The Commission of the European Communities18 Dawson Street Dublin 2Tel: 01 662 5113Fax: 01 662 5118
3 Customs Procedures with economic impact
A number of Customs procedures are designed to help the competitiveness of EU exporters. These are outlined briefly below. Further information is available from Customs Economic Procedures at Nenagh. See Appendix 1 for details.
3.1 Customs Warehousing
A Customs warehouse is a place approved by the Revenue Commissioners where non-Community goods may be stored without payment of import duties, as long as they remain in the warehouse.
3.2 Free Zones
A designated area within the Community in which non-Community goods are considered as being outside the Community for Customs purposes. Manufacturing or processing may take place including improving the goods for marketing or distribution. There are two free zones in Ireland, Shannon freeZone and Ringaskiddy free zone.
3.3 Processing under Customs control
This scheme allows goods imported from outside the Community to be processed without being subject to import duties. Duty becomes payable on the finished product when it is put on the Community market. If the goods are exported from the Community to third markets, no duty is payable.
3.4 Outward Processing (OP)
This allows Community goods to be temporarily exported in order to undergo processing operations. The products resulting from the processing can be released for free circulation in the Community with total or partial relief from import duties. Where the OP involves the repair of goods, a simplified procedure applies i.e. Application may be made for OP facilities at the place of exportation.
A special arrangement - known as Economic Outward Processing - applies to the textile products and clothing of chapters 50 to 63 of the Common Customs Tariff. Goods, within limits fixed by the Community may be exported to certain third countries for processing and subsequently re-imported without restriction.
3.5 Inward Processing (IP)
This allows goods to be imported into the Community, processed and subsequently exported without payment of duties. A process can be anything from re-packing or sorting goods to manufacturing. IP allows duty relief but may also be available for goods subject to the Communitys Commercial Policy Measures i.e. quantitative restrictions. The IP procedure applies to import duties, excise duties and VAT. Two methods of relief apply. The Suspension System, which can be of great benefit when an export market has been identified, allows goods to be imported without payment of duty, but subject to the provision of security - usually a bond to a value equal to the unpaid duty. The other method of relief is the drawback system, which provides for payment of duties on importation, which are reclaimed when the goods are subsequently exported.
4 Transit and TIR
The transit system allows the movement of goods through the Community under Customs control. The system applies to goods that are not in free circulation and Community goods such as those benefiting from CAP export refunds on Inward Processing procedures. There are three forms of transit, Community Transit, Common Transit and TIR.
The Community Transit system consists of two separate procedures: External Community Transit Procedure (T1) and Internal Community Transit Procedures (T2) External Transit facilitates the movement of goods moving through the Community in the course of export from the Community. For instance many Irish goods going by sea will first transit through the ports of Rotterdam or Antwerp. Customs will demand a guarantee to cover any possible claims for duties in the event the goods are not exported from the Community. Some airlines, express carriers and shipping companies are approved for simplified transit procedures, and their manifests can be used as transit documents. In this case there will be no need for a guarantee by the exporter.
Internal transit applies to goods moving via an EFTA country (Iceland, Norway, Switzerland and Liechtenstein) and also in trade with non-fiscal areas of the EU.
Common Transit is used to cover the movement of goods to, from or between the EFTA countries and /or the Visegrad countries (Poland, Hungary, Czech Republic and Slovak Republic). Its rules and procedures are almost identical to Internal Community Transit.
The TIR system provides for the movement of goods across one or more frontiers of the parties to the Convention on the International Transport of Goods under cover of the TIR (Transport International Routier) Carnets. The contracting parties are countries in Europe, the Middle East, North Africa and North America. It is a condition of the TIR system that some portion of the journey must be completed by road. The load is normally transported in an approved vehicle or container under Customs seal.
4.1 The Transit Declaration
The declaration is made on the SAD. The copies to be used for the purpose are:
Copy 1 - retained by the office of departure
Copy 4 - Retained by the office of destination
Copy 5 - Returned by the office of destination to the office of departure so that the transit operation may be discharged.
Copy 7 - Used for statistical purposes.
Further details are contained in a booklet on import and export procedures available from your local Customs office.
Council regulation (EEC) No. 2913/92 and Commission Regulation (EEC) No. 2454/93 are the principal regulations covering Community Transit and status. TIR is covered by the TIR Convention 1975.
4.3 Future developments
For Governments, the transit system has proved difficult to police, and considerable fraud has been experienced. For exporters the problem of undischarged transits continues to present problems. It is suggested that exporters experiencing these problems make use of Carriers who operate simplified transit procedures. Proposals to computerise the system are being acted on and software programmes are already being tested. It will take a couple of years at least for the computer-based system to be implemented.
5 Binding Tariff Information
Binding Tariff Information (BTI) is a system that provides exporters and importers with tariff classification decisions which are legally binding throughout the EU. It gives traders legal certainty regarding tariff decisions. If a change in Community regulations should bring about a change in the tariff classification, the trader is entitled to a period of grace in order to complete any existing contracts undertaken on the basis of the BTI. The system binds customs as well as traders.
Exporters seeking a BTI must apply to the Tariff Classification Unit at Nenagh, Co. Tipperary.
6 Export refunds under the Common Agricultural Policy
Exports of certain agricultural products to non-EU countries are entitled to export refunds under the CAP. Details are in the Official Journal from 1968 onwards. Broadly, the products include cereals, fruit and vegetables, oils, sugar, milk, milk products, beef and veal, products processed from cereals, fruit and vegetables. The refund is paid upon proof of export being furnished. Details are given in Commission Regulation 354/90. The documents required in order to receive the refund are the SAD and the T5. The SAD is sufficient for goods loaded in an Irish port and transported to the non-EU country directly. Goods that transit through a European Port such as Felixstone or Rotterdam, and do not move from Customs control in that port are considered as leaving the EU directly. For goods which go indirectly, whether byroad or barge movement between ports in Europe or via Northern Ireland and onward from there or any European port, or for temporary storage or consolidation in Europe, a T5 form is necessary in addition to the SAD.
Air Cargo Security
The European Civil Aviation Conference (ECAC) representing all the civil aviation departments of the EU Member States, has developed a comprehensive set of security provisions. These provisions are published in the ECAC, DOC No.30, official manual.
ECAC Doc No.30 contains guidance and recommendations intended to assist Member States in the determination of security controls in respect of air cargo consignments, other than mail, but including courier and express parcels, which must be provided by an agent, freight forwarder or any entity which conducts business with an airline. However these recommendations are not EC Directives and are not binding in law.
The Civil Aviation Division of the Department of Public Enterprise is the body responsible for air cargo security in Ireland. An Air Cargo Security Programme (ACSP), based on ECAC Doc No.30recommendations is currently being devised by the Department of Public Enterprise, Civil Aviation Division, Ref 12.15.2.