New Union Customs Code comes into force - Newsflash October 2016
Eesti keeles  Eesti keeles      Latviešu valodā  Latviešu valodā '       Lietuvių  Lietuvių      Русский  Русский

  Jānis Taukačs
   
 
Jānis Taukačs
Partner
Sorainen Latvia
janis.taukacs@sorainen.com
   
  Jonas Sakalauskas
   
 
Jonas Sakalauskas
Senior Associate
Sorainen Lithuania
jonas.sakalauskas@sorainen.com
   
  Allar Jõks
   
 
Allar Jõks
Partner
Sorainen Estonia
allar.joks@sorainen.com
   
  Viktar Strachuk
   
 
Viktar Strachuk
Specialist Counsel
Sorainen Belarus
viktar.strachuk@sorainen.com
   
Dear clients and cooperation partners,

The new Union Customs Code (UCC) came into force on 1 May 2016. The Code modifies, adjusts and supplements the previous provisions of the Community Customs Code. The implementing provisions of the UCC are provided in the Delegated Act and the Implementing Act. The Transitional Delegated Act also establishes transitional rules for economic operators and customs authorities pending introduction of the relevant IT systems.

The UCC introduces major changes affecting both customs administration and global trade, especially as to inclusion of royalties and licence fees in customs value, abolition of the first-sale principle, a new system of customs procedures, introduction of compulsory guarantees, as well as changes to Binding Tariff Information (BTI) and the requirements for Authorised Economic Operator (AEO) status.

Some of the main novelties of the UCC

  • The UCC sets deadlines for decisions taken by the customs authorities and introduces a two-step procedure: the customs authorities notify of the request received (a 30-day term) and then announce the decision adopted (a 120-day term with an option to extend).
  • The UCC also sets the procedure for adoption of decisions unfavourable to the applicant. Before making a decision potentially unfavourable to an applicant, the customs authorities must notify the applicant of the grounds it intends to base its decision on and enable the applicant to express an opinion within a specified period.
  • The UCC introduces changes in the area of customs valuation by changing the provisions on customs valuation, abolishing the “first sale for export” rule and introducing the “last sale for export” rules, and establishes new rules on the dutiability of royalties and licence fee.
  • Comprehensive guarantees and guarantee waivers become available. The UCC does not enable businesses using individual guarantees to apply a guarantee rate reduction. Comprehensive guarantee holders are provided with more favourable conditions.
  • BTI becomes binding on the holder. BTI issued after 1 May 2016 will be valid for 3 years.
  • The UCC introduces new criteria for AEO status. The Code provides more benefits and simplifies regulation for AEO status holders. AEO authorisation is obligatory if it is intended to use certain authorisations and simplified procedures.
  • The UCC contains new, stricter provisions for sanctioning business that violate customs legislation.
  • Most of the changes introduced by the UCC are aimed at facilitating trade and optimising processes, but these changes are also likely to result in additional costs and administrative burdens for businesses.

Recommended assessments

In order to optimise financial costs and take advantage of the changes introduced by the UCC, businesses currently need to prepare for working under the UCC. Therefore, we recommend assessing the following.

  • Impact of the UCC on current and planned customs procedures and the new requirements applicable. It is advisable to assess the system of customs approved treatment and procedures introduced by the UCC, requirements applicable to companies and transitional periods.
  • New customs simplifications and their benefits. It is advisable to review preconditions for granting specific authorisation, potential benefits for your company and possible additional costs.
  • The need for AEO authorisation, the types of AEO certificates and compliance with the applicable criteria. Although the UCC does not provide for mandatory AEO status, the advantages provided by this status are reflected in most UCC provisions.
  • Compliance with guarantee requirements. It is advisable to review the terms of agreements with guarantors and choose a suitable and economically sound guarantor, as well as to evaluate the need for a monetary deposit and working capital flows.
  • Business partners in the supply chain and their possible influence on company sales (for example, whether a partner has AEO status, whether a partner is qualified in customs matters, whether a partner is economically sound, if the business is to be declared a debtor as a result of the partner’s actions). The UCC changes provide additional rights and obligations for importers, so that the terms of contracts with suppliers must be reviewed in order to fulfil the established requirements and adapt them to company activities. Proper selection of Incoterms is no longer the main relevant requirement in contracts with suppliers.
  • The possible impact of the new customs valuation rules on the customs value of goods and the company’s business. It is advisable to review the terms of contracts with customers and to review the terms of contracts with licence and patent holders.
  • Select staff meeting the applicable UCC requirements and ensure staff training. Evaluate the need for upgrading or installing IT systems.

The Sorainen Tax & Customs Team with education and experience in customs law will gladly help to solve all uncertainties that you might face in relation to the amendments introduced by the UCC.

 
ESTONIA
Allar Jõks
Partner
send e-mail
Pärnu mnt 15
10141 Tallinn
ph +372 6 400 900
estonia@sorainen.com
 
LATVIA
Jānis Taukačs
Partner
send e-mail
Kr. Valdemāra iela 21
LV-1010 Riga
ph +371 67 365 000
latvia@sorainen.com
 
LITHUANIA
Saulė Dagilytė
Partner
send e-mail
Jogailos g 4
LT-01116 Vilnius
ph +370 52 685 040
lithuania@sorainen.com
 
BELARUS
Viktar Strachuk
Specialist Counsel
send e-mail
ul Internatsionalnaya 36-1, 220030 Minsk
ph +375 17 306 2102
belarus@sorainen.com

You have received this e-mail with the Sorainen newsflash because you are in the Sorainen database.
You can modify your subscription preferences by clicking here or to unsubscribe from all Sorainen news/seminar mailings in the future, please reply by clicking here.

Please note that Sorainen newsflashes are compiled for general information only, free of obligation and free of legal responsibility and liability. They do not cover all laws or reflect all changes in legislation, nor are the explanations provided exhaustive. Therefore, we recommend that you contact Sorainen or your legal adviser for further information. Electronic versions of Sorainen newsflashes are available on the Sorainen website – www.sorainen.com.

© Sorainen 2016
All rights reserved