EN Official Journal of the European Communities L 331/11

COUNCIL DECISION

of 8 December 1994

accepting, on behalf of the Community, Annexes E.7 and F.4 to the International Convention on the Simplification and Harmonization of Customs Procedures

(94/798/EC)

THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty establishing the European Community, and in particular Article 113 thereof, in conjunction with the first sentence of Article 228 (2),

Having regard to the proposal from the Commission,

Whereas, pursuant to Council Decision 75/199/EEC (1), the Community has accepted the International Convention on the Simplification and Harmonization of Customs Procedures (Kyoto Convention);

Whereas the Annexes to the said Convention concerning the duty-free replacement of goods and customs formalities in respect of postal traffic can be accepted by the Community;

Whereas it is appropriate, however, to accompany this acceptance with certain reservations in order to take account of the special requirements of the customs union and of Community customs legislation,

HAS DECIDED AS FOLLOWS:

Article 1

The following Annexes to the International Convention on the Simplification and Harmonization of Customs Procedures are hereby accepted on behalf of the Community, subject to the reservations indicated:

— Annex E.7 concerning the duty-free replacement of goods with a general reservation and reservations with regard to Standards 3, 9 and 20 and Recommended practices 11, 13, 16, 17 and 25,

— Annex F.4 concerning customs formalities in respect of postal traffic with a general reservation and reservations with regard to Standards 19 and 26 and Recommended practices 23, 24 and 25.

The texts of Annexes E.7 and F.4 to Convention appear in Annexes I and II respectively to this Decision, which contain, in the appendices, the corresponding reservations expressed by the Community.

Article 2

The President of the Council is hereby authorized to designate the person entitled to notify the Secretary-General of the Customs Cooperation Council of the acceptance, on behalf of the Community, of the Annexes referred to in Article 1, together with the reservations indicated in that Article.

Done at Brussels, 8 December 1994. For the Council The President G. REXRODT

(1) OJ No L 100, 21. 4.1975, p.1.

ANNEX I ANNEX E.7 concerning the duty-free replacement of goods INTRODUCTION In most countries, national legislation contains provisions under which goods used to make products for export are not required to bear duties and taxes. The drawback procedure and temporary admission for inward processing allow a refund of, or conditional relief from, import duties and taxes to be granted in respect of foreign goods used to obtain exported products. In the case of the duty-free replacement of goods procedure, the subject of the present Annex, the technique employed is to grant exemption from import duties and taxes for goods equivalent to those which were in free circulation and were processed into products exported from the Customs territory. However, application of this procedure may be made subject to the condition that the importation of goods equivalent to those incorporated in the products previously exported is regarded by the competent authorities as beneficial to the national economy. Products manufactured from goods admitted free of import duties and taxes under this procedure may be put on the home market. Should they be exported, the duty-free replacement of goods procedure could again become applicable. DEFINITIONS For the purposes of this Annex (a) the term ‘duty-free replacement of goods procedure’ means the customs procedure which permits the importation, free of import duties and taxes, of goods equivalent (i. e., identical in description, quality and technical characteristics) to those which were in free circulation and which were processed into products previously exported outright; (b) the term ‘import duties and taxes’ means the customs duties and all other duties, taxes, fees or other charges which are collected on or in connection with the importation of goods, but not including fees and charges which are limited in amount to the approximate cost of services rendered; (c) the term ‘person’ means both natural and legal persons, unless the context otherwise requires. PRINCIPLE 1. Standard The duty-free replacement of goods procedure shall be governed by the provisions of this Annex. FIELD OF APPLICATION 2. Standard National legislation shall specify the circumstances in which the duty-free replacement of goods procedure may be granted and shall lay down the requirements which must be met. Notes (1) The circumstances in which the duty-free replacement of goods procedure is allowed may be set out in general terms and/or in detail. (2) The granting of this procedure may be made subject to the condition that the importation of goods equivalent to those incorporated in the products previously exported is regarded by the competent authorities as beneficial to the national economy. (3) The benefit of the procedure may be reserved to persons established in the Customs territory. 3. Standard At importation, goods equivalent to those which were in free circulation and which were incorporated in the products previously exported shall be afforded total exemption from import duties and taxes, subject to payment of any duties and taxes repaid or remitted on the exportation of the products. Notes (1) The exemption from import duties and taxes may be granted in respect of raw materials and semi-manufactured products as well as to parts equivalent to those incorporated, without further manufacture, in the products exported. (2) Goods such as catalysts and accelerators or retarders of chemical reactions which, on being used to obtain products for exportation with entitlement to duty-free replacement of goods, disappear entirely or partially during such use without actually being contained in the products for export, may be treated as goods used to obtain the said products and granted the same exemption from import duties and taxes. However, this exemption does not normally extend to mere aids to manufacture such as lubricants. 4. Recommended practice The benefit of the duty-free replacement of goods procedure should not be withheld solely on the grounds that the products are exported to a specific country. 5. Standard National legislation shall specify the categories of persons who may receive an authorization for the duty-free replacement of goods. Note The holder of an authorization for the duty-free replacement of goods may be the exporter, the manufacturer or the owner of the exported products. 6. Standard The benefit of the duty-free replacement of goods procedure shall be granted where it is possible to ascertain the use of the goods in arriving at the exported products. Note In order to ascertain the use of the goods in arriving at the exported products the customs authorities may carry out controls during the manufacturing process or may have recourse to the record kept by the manufacturer of the products to be exported. EXPORTATION OF PRODUCTS WITH ENTITLEMENT TO DUTY-FREE REPLACEMENT OF GOODS (a) Formalities prior to the exportation of the products 7. Standard National legislation shall specify the circumstances in which prior authority is required for application of the duty-free replacement of goods procedure and the authorities empowered to grant such authority. 8. Recommended practice Persons who carry on large-scale and continuous operations involving the duty-free replacement of goods should be granted a general authority covering such operations. 9. Standard The description, quality, technical characteristics and quantity of the various goods which were in free circulation and are contained in the products to be exported with entitlement to duty-free replacement of goods shall be determined by the competent authorities on the basis of the actual conditions under which those products were obtained. 10. Recommended practice In determining the quantities of the various goods contained in the products to be exported with entitlement to duty-free replacement of goods, the competent authorities should make allowance for losses and irrecoverable waste deriving from the manufacturing process. 11. Recommended practice Where products to be exported with entitlement to duty-free replacement of goods have reasonably constant characteristics and are obtained under clearly defined technical conditions, the competent authorities should establish standard quantity scales for the various goods contained in the products to be exported. (b) Declaration for exportation entitlement to duty-free replacement of goods 12. Standard National legislation shall specify the conditions under which products to be exported with entitlement of duty-free replacement of goods shall be produced at the competent customs office and a goods declaration (outwards) shall be lodged. Note National legislation may provide that the goods declaration relevant to the exportation of the products must contain the particulars necessary to enable the customs to determine the quantitites of the various goods for which exemption from import duties and taxes will be claimed. 13. Recommended practice Where the competent authorities have not been able to give a ruling on an application for duty-free replacement of goods, the declarant should be authorized to export the products concerned without delay provided that the conditions prescribed are met and without prejudice to the final decision. 14. Recommended practice The national forms used for the exportation of products with entitlement to duty-free replacement of goods should be harmonized with the goods declaration (outwards). (c) Examination of products exported with entitlement to duty-free replacement of goods 15. Recommended practice At the request of the declarant, and for reasons which they deem valid, the customs authorities should, so far as possible, allow products for exportation with entitlement to duty-free replacement of goods to be examined on private premises, the expenses entailed by such examination being borne by the declarant. (d) Authorized destinations of products exported with entitlement to duty-free replacement of goods 16. Recommended practice Provisions should be made to permit products for exportation with entitlement to duty-free replacement of goods to be placed in free ports or free zones. 17. Recommended practice Provisions should be made to permit products for exportation with entitlement to duty-free replacement of goods to be placed in a customs warehouse with a view to subsequent exportation. (e) Certification of exportation with entitlement to duty-free replacement of goods 18. Standard Where products have been exported with entitlement to duty-free replacement of goods, the customs authorities shall issue to the declarant a document establishing his entitlement to import, without payment of import duties and taxes, goods equivalent to those which were in free circulation and which were contained in the products in question. Note The document issued to the declarant may consist of a copy, duly certified by the customs, of the declaration for exportation with entitlement to duty-free replacement of goods, or may be made out on an appropriate form. IMPORTATION OF GOODS 19. Standard National legislation shall specify the conditions under which goods which may be admitted free of import duties and taxes under the duty-free replacement of goods procedure shall be produced at the competent customs office and a goods declaration shall be lodged. Note National legislation may provide that the goods declaration must contain the particulars necessary for authorizing exemption from import duties and taxes and that the entitling document(s) issued by the customs authorities must be produced in support of that declaration. 20. Standard The competent authorities shall fix with due regard to the commercial circumstances the time limit for the importation of goods which may be admitted free of import duties and taxes. 21. Standard Provision shall be made to permit goods which may be admitted free of import duties and taxes to be imported through a customs office other than that through which the products were exported. 22. Standard Provision shall be made to permit goods which may be admitted free of import duties and taxes to be imported in one or more consignments. 23. Standard Provision shall be made to permit goods covered by several documents establishing entitlement to importation under the duty-free replacement of goods procedure to be imported in one consignment. 24. Standard Provision shall be made to permit goods which may be admitted free of import duties and taxes to be imported from a country other than that to which the products were exported. 25. Recommended practice Provision should be made to permit goods which may be admitted free of import duties and taxes to be imported by a person other than the exporter of the products, subject to compliance with the conditions laid down by the customs authorities. 26. Recommended practice At the request of the declarant, and for reasons deemed to be valid, the customs authorities should, as far as possible, allow goods which may be admitted free of import duties and taxes to be examined on private premises, the expenses entailed by such examination being borne by the declarant. 27. Standard National legislation shall specify the customs treatment applicable when products which have been exported with entitlement to duty-free replacement of goods are re-imported. INFORMATION CONCERNING THE DUTY-FREE REPLACEMENT OF GOODS PROCEDURE 28. Standard The customs authorities shall ensure that all relevant information regarding the duty-free replacement of goods procedure is readily available to any person interested. Appendix to Annex 1 Reservations entered by the Community in respect of Annex E.7 to the International Convention on the Simplification and Harmonization of Customs Procedures 1. General reservation (general observation) Community legislation on inward processing covers most of the provisions of this Annex. However, in any areas not covered by Community legislation, Member States may, if necessary, enter their own reservations. 2. Standard 3 When import goods are entered under the inward processing arrangements in a Member State of the Community other than the one where the arrangement was authorized and the inward processing operations effected, this Standard may not be applied unless certain conditions laid down in the Community legislation governing inward processing arrangement are met. Community legislation on value-added tax does not provide for a non-application in this case. However, the registered tax-payers concerned generally dispose of a right to complete deduction of the VAT due for the imported equivalent goods. 3. Standard 9 This arrangement is generally granted in the Community on the condition that the goods to be imported and the goods used in the manufacture of the exported product must fall within the same code of the Community customs tariff, be of the same commercial quality and have the same technical characteristics. 4. Recommended practice 11 At present, Community legislation on inward processing includes standard rates of yield for certain products only. 5. Recommended practice 13 Community legislation provides for issuing processing authorizations with retrospective effect in exceptional, duly documented cases only, and then only if the application was made prior to the export declaration in respect of the compensating products being accepted. 6. Recommended practices 16 and 17 Under Community legislation there is no entitlement to duty-free replacement of goods for compensating products placed in free zones or warehouses until the products are actually exported. 7. Standard 20 Generally speaking, Community legislation allows six months from the expected date of exportation of compensating products (extendable by a further six months upon application by the holder of the authorization) to complete the importation of import goods. However, for certain categories of goods, the time limits are shorter and cannot be extended. 8. Recommended practice 25 Community legislation on inward processing stipulates, for certain cases, that evidence has to be presented proving that the advantages of the processing operations are restricted to the holder of the authorization for inward processing.