In this and the next How to … article we will be looking at the steps to take to manage this part of your business. Part 1 is looking at the movement of goods when they will be returned unchanged, so covering goods going to an exhibition, demonstration or for evaluation for example. Part 2 will review the different procedures available when you move goods for a process, such as repacking or repair.

Since the UK left the Customs Union of the EU (1-01-2021) the number of temporary movements requiring customs declarations has increased significantly and sadly a lot of companies are not prepared for these changes and have incurred delays, rejected arrivals and/or high customs costs. Temporary movements of goods internationally can create confusion and misunderstanding in many quarters, leading to unnecessary cost, delay, and administrative burden not to mention downright contravention of statutory regulations both local and international. It is important to understand that there are mechanisms within customs regulations to permit the movement of goods temporarily without incurring such costs, it’s just that the company moving the goods needs to be aware of them and ensure the declarations are completed correctly.

Customs duties and taxes are used, not only to increase a country’s revenue, but also to control the import of foreign origin goods. But, if the goods arriving at the port or airport of arrival are commercial samples, the packing containers, goods being used to maintain previously imported products, broadcasting equipment, equipment required in a national disaster, etc why should they be subjected to the same level of controls, documentation, and customs duties? Good question … which the World Customs Organisation (WCO) worked on resolving to enhance international trade co-operations.  

The temporary movement of goods has always been challenging as it involves at least 4 different customs declarations:

a) The export declaration

b) An import declaration

c) The re-export declaration

d) The re-import declaration

At two of these points (b) and (d) there is also the concern that you may be charged import customs duties and taxes unless you use a special procedure. The exporting company should work with someone in the importing country to ensure that customs formalities can be arranged correctly. As we are looking at the movement of goods that will be returned unaltered then we are looking at relevant international regulations such as the ATA Carnet scheme and Temporary Admission procedures also know as Temporary Imports. Customs duties and taxes don’t just vanish when we use these procedures, so we also must consider how we guarantee potential duty at stage 2. Unfortunately, customs will not just take our word that its “temporary” and waive all charges.  

The ATA Carnet, also known as a passport for goods, is a simple way of moving goods that are not undergoing any process into and out of other countries without needing full customs declarations or the payment of duty and taxes. Not available to all destinations it also has some limitations and can be expensive to obtain. An ATA Carnet is suitable for both hand carried consignments and unaccompanied freight, but it does not replace the need for export or import licences though, it only covers customs declarations. An ATA Carnet is applicable for three different types of temporary exports and though it:

• Professional equipment, such as equipment going out to test machinery already overseas

• Commercial samples, where the samples are high value and being returned to the exporter

• Exhibitions and demonstrations

There is an issuing fee for the ATA Carnet, payable to the issuing authority in the exporter’s country (this is a Chamber of Commerce in the UK) and also a guarantee to put down or insure to cover potential import duty and taxes in case the goods do not leave the import country. The ATA Carnet permits the return of goods within 12 months, though this can be reduced at the time of import by the customs authorities so ensure you check the vouchers/tickets within this passport and don’t assume 12 months will be ok. 

If the country is not a signatory to the ATA Carnet agreement, or the reason for export is not covered by the Carnet system, or the goods need to be out of the country for longer than 12 months, or, you find the costs of the Carnet too expensive then you have to review more conventional customs procedures. Remember there are 4 customs declarations to consider – we will look at these in the next 4 steps.

a) - Export: There are temporary export procedures available in all countries’ customs legislation. In the UK and the EU this involves selecting the correct Customs Procedure Code (CPC) to declare on the export customs declaration. The normal temporary export code for goods returning unaltered is 23-00-000. This permits the return/ re-import to come in under returned goods relief waiving both import duty and VAT, also long as the original exporter retained ownership and the goods did not undergo a process. Quick easy.

b) – Import: This is the complicated one. There are several Temporary Admission procedures depending on the type of arrival and the length of time the goods will remain in that country. But all will require security or a guarantee to be put in place for potential duty/taxes in case the goods remain in the country. Unfortunately, there is no hard and fast rule for dealing with this, it can depend on the type of equipment, whether it is hand carried or freighted in, the length of time of the stay, whether you have representation in that country and to which country the goods are exported. It may be possible to set up a Temporary Import Bond (TIB) or secure against an established guarantee, such as a deferment account at the import customs point. Alternatively, you may have to pay the money and them reclaim from customs on leaving the country? Will a company in that country do this for you - either your client or freight forwarder?

c) – Re-export: It is vital, as we stressed with the ATA Carnet procedure, that the time limit imposed on the temporary import must be adhered to or the duty/tax will become due. If the goods are hand-carried, then a simplified export declaration may be required which is usually completed by your representative with customs’ help (though some countries insist on getting a freight agent involved). Any bonds, guarantees, securities must be cancelled, and any monies paid refunded.

When the goods are freighted out, the responsibility for correctly re-exporting the goods rests with the freight agent. He should have clear instructions, especially if the bond/guarantee to be cancelled is in your name not his. Evidence of export, e.g., a stamped copy of the shipping invoice, should be requested in case the foreign customs authorities seek import duties/taxes at a later date.

d) – Re-import: If we’ve done a) correctly and have the evidence of the original export then this is fairly straightforward. The important thing here is to ensure the goods are entered as Returned Goods (RGR) so no import duty/VAT is payable. There is a standard time limit of 3 years to re-import goods into the UK under RGR. In the UK and EU this is controlled using the correct Customs Procedure Code (CPC), which is generally 61-23-F01

It is important to understand that there are mechanisms within customs regulations to permit the movement of goods temporarily without incurring such costs, it’s just that the company moving the goods needs to be aware of them and ensure the declarations are completed correctly and not just send goods hoping for the best outcome.