Trade and Customs News - Edition 2
1) Union Customs Code (UCC): a state of play
In March this year the European Commission circulated the fourth version of the draft implementing and delegated acts for the Union Customs Code (UCC). It is expected that the fifth and final draft version will be circulated early May 2015. This will be the version which has been approved in inter-service consultation. This version will be translated in the various languages of the member states. The delegated acts will be sent to the European Parliament to be put to a vote.
2) First draft on transitional provisions UCC finally published
In the fourth version of the draft implementing and delegated acts transitional provisions have been approved. From the draft transitional provisions, we learn that a big bang is not expected by May 1, 2016. In principle the existing authorizations remain valid until January 2019.
In early May the Commission and the Member states will continue the discussion with regard to IT related transitional provisions. We expect that the outcome will be circulated mid June.
3) Enlargement common transit system with Macedonia expected soon
On April 15, the European Commission published a proposal enabling the accession of the Former Yugoslav Republic of Macedonia (FYROM) to the common transit system.
Currently, the common transit procedure can only be used for the movement of goods under duty suspension between the EU, Turkey and the EFTA countries (i.e. Norway, Iceland, Switzerland and Liechtenstein). If FYROM is to join this system, this would become a valid alternative for the TIR procedure.
It is expected that FYROM will accede to the common transit system as of 1 June 2015.
4) Supply chain due diligence for importers of "conflict" minerals or metals?
On April 14, the European International Trade Committee adopted a final proposal imposing a mandatory self-certification mechanism for EU smelters and refiners importing "conflict" minerals and metals.
In order to help reduce the financing of illegal armed groups, EU importers of gold, tin, tantalum, and tungsten originating in conflict affected areas will need to undergo a self-certification process of their supply chain due diligence. The proposal builds on existing industry initiatives and guidelines, thus limiting the additional burden on the importers. For small and medium size enterprises it seems that the self-certification will however remain optional and that incentives and assistance will be foreseen.
The Commission's proposal will likely be voted on at the May plenary session of the European Parliament.
5) Bosnia and Herzegovina - EU trade preferences?
The European Union foresees in trade preference measures for Western Balkan countries participating in or linked to the Stabilisation and Association process. As such, most products originating in these countries are benefitting from a preferential duty treatment upon importation in the EU. These measures apply until 31 December 2015. The EU suggests to prolong the duration of the measures until 31 December 2020.
However, the proposal aims to suspend trade preferences relating to Bosnia and Herzegovina as of 1 January 2016 in case the country has not accepted to adopt the preferential trade concessions with Croatia by said date.
On 30 April, the plenary of the European Parliament decided to postpone the vote on the Commission's proposal.
6) Dutch Pilot Project with regard to complaints launched
Dutch customs started a pilot project to monitor complains raised by firms. Although a formal complaint provision with strict procedures already exists for years, the impression exists that industry seems to be somehow reluctant to make use of this provision. Therefore it will be possible for industry to raise concerns to the regional complaint officer. It will be the intention to resolve the issue without using the formal complaint procedure. This pilot will initially last for 1 year.
7) Belgian customs policy plan 2015-2019 setting ambitious goals
The Belgian authorities have presented a customs policy plan for the next 5 years. The Belgian Customs aims at attaining a top three ranking in the World Bank's Logistic Performance Index (LPI) by 2019; it currently ranks 11th.
Belgian customs aiming for 80% of the total import and export volume being AEO-accredited and 80% of industry with an integrated bookkeeping system will transfer from transactional audits to a system based approach by 2019. In line with the upcoming UCC, it is clear that AEO accreditation will become a key engine to benefit from trade facilitations and customs simplifications in Belgium in the near future.
8) Dutch Court of Appeal on dutiability of royalties
On April 30, the Dutch Court of Appeal overruled a decision from the Dutch Court of First Instance with respect to the dutiability of royalties. In this case (handled by Meijburg & Co) the Dutch customs inspector argued that the payment of the royalty was to be considered a condition of sale as the licensor had imposed strict quality control measures on the manufacturers and therefore the customs inspector argued that the licensor and the manufacturers were related parties within the meaning of Article 143 CCCIP. Consequently, the customs inspector argued that the "deemed" condition of sale provision of Article 160 CCCIP has to be applied.
The Dutch Court of First Instance ruled in favor of the customs inspector, but now the Dutch Court of Appeal has ruled that strict quality control oversight cannot be considered to be "control" as defined in Article 143 CCCIP and as such Article 160 CCCIP does not apply.