(FREE) Customs authorities use a form of terminology which is rarely fully understood. Let's learn the customs lingo!
The term (from the Latin) means “According to value”. It refers to import duty liabilities, which are always expressed as a percentage and are based on the total import value of
the consignment on a CIF (Cost Insurance and Freight) basis.
ATR is the term used to refer to the document used for preferential free trade between the EU and Turkey. It specifically refers to the A.TR Movement Certificate, which enables importers in both the EU and Turkey to import consignments on a duty-free basis from each other as long as the goods are in free circulation in either bloc.
CPC – Customs Procedure Code
The Customs Procedure Code (CPC) is the 7-digit code found in box 37 of both import and export Customs declarations which refers to the status of the consignment being exported or imported, and whether it is treated as being in free circulation (duty paid) or under duty suspension and therefore Customs control, such as under Inward Processing Relief (IPR) status. It is the responsibility of the declarant at both import and export stages to ensure that the correct status of the goods under such circumstances is declared correctly. Failure to do so will result in the imposition of excess import duty and VAT.
This is the process whereby import duty and VAT are not paid at the time
of importation of a consignment, but will be deferred until a fixed date the following month and paid to customs. Frequent importers may apply for a duty deferment account to avoid payment of import duty and VAT every time a consignment arrives
in the country. This means that import duty and VAT is removed automatically from their account every month by direct debit as an accumulated total for all imports made during the previous month, as the payment is made in the month following that during which the imports were actually made.
This is an import duty relief facility used for the import of materials that are destined for a specific and prescribed use, namely inclusion in products destined for the following sector uses:
Shipbuilding and repair (shipwork)
Continental Shelf (offshore oil & gas)
EUR1 refers to the Movement Certificate used in the free trade preferential system which allows the importer to import goods duty-free (in most cases) from countries engaged in
free trade with the European Union. The certificate is known as EUR1.
Excise refers to the duty payable on all items of the following nature:
This duty applies domestically as well as on imported goods.
GSP (Generalised System of Preferences) is the regime whereby importers based in North America and Europe (including Norway and Switzerland) may import goods
from developing countries which are authorised to issue a GSP Certificate of
Origin on a duty-free or duty-reduced basis. A list of such countries may be found in the Customs Tariff.
HS - Harmonised System
The system is a universal economic language used to determine your goods.
Developed by the World Customs Organisation (WCO). Used by over 200 countries
Covers 99% of world trade. Creates a worldwide map of goods and movement
Inward Processing is the regime used to allow traders to import goods duty-free (under import duty suspension) into the EU as long as those goods are to be re-exported at a determined later stage. The trader must gain prior authorisation from HMRC to operate this facility.
The standard-duty rate is based on the GATT/WTO principle of Most Favoured Nation (MFN). "Most favoured nation" (MFN) is one of the cornerstones of WTO trade law. MFN status is granted by governments on certain countries goods with the intention that a set level of customs duty will remain stable and non-discriminate. Free or Preferential Trade Agreements give partner countries access to lower tariffs than the MFN rate.
Outward Processing (OP) is the regime used to allow traders to export materials for processing overseas and then re-import the resulting product at an import duty liability based on the value of the overseas processing cost (known as value-added).
The trader must gain prior authorisation from HMRC to operate this facility.
Returned Goods Relief (RGR) is a facility whereby goods exported from the EU up to 3 years previously may be reimported into the EU free of import duty, but with import VAT liability.
Duty Suspension is a technique used to avoid paying import duty paid on an imported consignment which is subsequently re-exported out of the EU has undergone processing in the EU under the Inward Processing Regime. The importer must be authorized to use this facility by customs prior to carrying out such activities.
T1 is the status given to goods in Community Transit, i.e. entering the EU to be carried across the EU to a point where they leave the EU again. It is now part of the NCTS (New Community Transit System).
T2 is a document that is used to accompany a consignment which is in
EU free circulation but which crosses a non-EU country before re-entering the EU at another point, i.e. Germany – Italy via Switzerland. It is also used where goods are carried by sea between two EU countries on a ship which is registered and owned outside the EU.
Also known as a commodity code, Customs Cooperation Council Number, Harmonised System Number, trade code number or BTN (Brussels Tariff Number) this is a system of coding and classification used in international trade which identifies goods for duty,
statistical and customs clearance purposes.
WTO - World Trade Organisation
The World Trade Organization (WTO) is the only international organization dealing with the global rules of trade. Its main function is to ensure that trade flows as smoothly, predictably and freely as possible.
WCO - World Customs Organisation
GATT work led to the adoption in 1950 of the Convention Establishing the Customs Cooperation Council (CCC), which was signed in Brussels. In 1994, the Organisation adopted its current name, the World Customs Organisation. It looks after Commodity Codes, the HS Commodity coding system. It works on harmonised procedures, security initiatives and much more.
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