COMMISSION REGULATION (EEC) N° 2228/91

of 26 June 1991

laying down provisions for the implementation of Regulation (EEC) No 1999/85 on inward processing relief arrangements

THE COUNCIL OF THE EUROPEAN COMMUNITIES,

Having regard to the Treaty establishing the European Economic Community,

Having regard to Council Regulation (EEC) No 1999/85 of 16 July 1985 on inward processing relief arrangements (1), and in particular Article 31 thereof,

Whereas Council Regulation (EEC) No 3677/86 of 24 November 1986 laying down provisions for the implementation of Regulation (EEC) No 1999/85 on inward processing relief arrangements (2), as last amended by Regulation (EEC) No 704/91 (3), has been substantially amended on a number of occasions; whereas it is appropriate, for reasons of clarity and rationality, to consolidate the said Regulation;

Whereas it is necessary to adopt certain provisions to regulate the issue of inward processing authorizations; whereas in particular it is appropriate to lay down rules for application of the economic conditions and to define the circumstances in which those conditions, in the interests of maximum administrative simplification, shall be deemed to be fulfilled;

Whereas in view of the market situation for milk products the period of validity of the inward processing authorization should be limited; whereas a non-renewable time-limit should also be set for dealing with the compensation products in one of the approved ways;

Whereas the procedure for the exchange of information should apply to all authorization granted in respect of milk products, even where the value does not exceed ECU 100 000;

Whereas certain conditions which must at present be complied with in order to obtain an inward processing authorization and for use of the arrangements constitute a significant hindrance to the promotion of exports by Community undertakings from the customs territory of the Community; whereas experience has shown that the management of the arrangements could be simplified in the case of processing undertakings where most of their main compensating products are intended for export out of the customs territory of the Community as well as for those undertakings which have a continuous flow of production intended both for the Community and for third country markets; whereas the reduction or elimination of administrative complications is bound to have a positive effect on the cost of products exported to third country markets, thus increasing the competitiveness of Community undertakings on these markets; whereas it is appropriate therefore to lay down new provisions consolidating or repealing certain existing implementing provisions;

Whereas it is desirable to define the circumstances in which the suspension system may be used, given that compensating products are to be exported from the customs territory of the Community; whereas in cases where the products are not to be exported the drawback system may be used when the conditions for this system are fulfilled; whereas provision should also be made, in certain circumstances, for the release for free circulation of compensating products to be authorized under the suspension system;

Whereas it is necessary to lay down the conditions for use of the equivalent compensation and prior exportation systems and to define the time at which the change in customs position of the goods concerned takes place;

Whereas it is necessary to define the conditions under which the equivalent compensation of rice can be authorized, by using the CN code at eight figures; whereas, however, while awaiting for an appropriate modification of the combined nomenclature on certain types of rice, it is necessary that equivalence be determined only by the length/width ratio for certain types of rice;

Whereas it is desirable to restrict the system whereby import goods are placed under the arrangements in a Member State other than that in which use of the arrangements was authorized and where the processing operations are carried out, where the prior exportation procedure is used; whereas provision should be made for the requisite exchange of information between the two Member States concerned;

Whereas it is necessary to specify the formalities to be carried out and the compensatory amounts applicable in cases of triangular traffic where compensating products are dispatched from the Member State where processing has taken place to another Member State where the formalities for export from the customs territory of the Community are carried out;

Whereas it is necessary to specify how the various procedures are to apply in connection with the common commercial policy;

Whereas standard rates of yield should be laid down on the basis of the existing Community rules;

Whereas there is a need to lay down standard rates of yield to ensure the same facilities for pasta whether or not it contains eggs;

Whereas implementing rules must be laid down to cover entry of goods for the arrangements, use of the drawback system and some of the ways in which goods or products may be dealt with for customs purposes; whereas such rules, while being adequate to prevent abuses, must be such as to keep administrative procedures to a minimum so as not to impose a burden on firms using the arrangements;

Whereas it is necessary to lay down rules ensuring the uniform application of the second paragraph of Article 14 (2) of Regulation (EEC) No 1999/85; whereas the wording of certain provisions of the Regulation relating to discharge of the arrangements should be amended to illustrate the link between them and the provisions concerning simplified procedures; whereas some examples should be given in these provisions to facilitate that application in practice; whereas more detailed provisions are required concerning the time limit for submitting the bill of discharge, the supporting documents required for discharge and the payment of import duties in respect of compensating products or goods put onto the market;

Whereas it is necessary to lay down uniform rules for the charging of duties in cases where a customs debt arises; whereas for that purpose it is necessary to draw up a list of compensating products which can be charged at their appropriate rate, to lay down special rules for olive oil and to provide for the application of certain agricultural import duties; whereas it is also desirable to lay down certain rules for the application of monetary compensatory amounts in connection with the arrangements;

Whereas it is necessary to lay down provisions for calculating the proportion of import goods incorporated in compensating products where this is necessary in order to ascertain the amount of import duties to charge, to be repaid or remitted; whereas in view of the complexity of the calculations which may be involved, it is appropriate to give quantified examples;

Whereas, since the value scale method cannot reasonably be used for operations involving the inward processing of durum wheat into cereal meal, it is necessary to use the quantitative scale method (import goods) to calculate the import goods incorporated in the compensating products; whereas for these operations it is also necessary to amend the standard rates of yield to take into account the processing conditions;

Whereas civil aircraft from non-member countries do not attract import duties when introduced into the customs territory of the Community; whereas, in view of the way in which civil aircraft are used in the transport sector, delivery of such aircraft to airline companies should be deemed to be equivalent to exportation from the territory of the Community; whereas it is also desirable to consider as equivalent to such exportation the repair, modification or conversion of civil aircraft carried out under inward processing relief arrangements;

Whereas there is a need under the suspension system for procedures allowing goods in the unaltered state and for compensating products to be placed under a new customs procedure, where their nature of technical characteristics have been appreciably changed by unforeseen circumstances or force majeure;

Whereas it is necessary to adapt the procedure for exchange of information for administrative cooperation by means of the INF 1 sheet in order to enable the customs authorities of the Member State where release for free circulation is authorized to levy the total amount of import duties resulting from this release for free circulation;

Whereas the new provisions must favour only those compensating products exported from the customs territory of the Community, and must not result in an unjustified financial advantage due to a postponement of the date on which a customs debt arises; whereas this last objective may be achieved by introducing a system of compensatory interest; whereas, however, such interest should in some cases not be provided for;

Whereas the interest rates will be set by the Commission on the basis of average representative short-term interest rates for each Member State in a given six-month period of the preceding year; whereas the rates set will be valid for six months and will be published in the L series of the Official Journal of the European Communities before they come into force;

Whereas it is desirable to establish rules for discharge of the arrangements and for repayment or remission under the drawback system;

Whereas it should be specified that where several processing operations have been carried out under the drawback system, the repayment claim must be presented to the customs authority of the Member State where the first processing operation was authorized and where the entry of release for free circulation was accepted; whereas it is, however, appropriate to provide for a procedure making it possible to obtain repayment or remission from the customs authority of the Member State where the compensating products are dealt with in one of the procedures referred to in Article 27 of Regulation (EEC) No 1999/85;

Whereas it is necessary to provide for a suitable exchange of information between the customs authorities of the Member States in order to facilitate repayment or remission of import duties in cases where the compensating products have been placed under a procedure allowing for repayment or remission after undergoing subsequent processing under a new authorization; whereas it is also necessary to specify that the document used in this exchange must be attached to the repayment claim;

Whereas it is necessary to lay down rules for administrative cooperation to ensure uniformity in the application of economic conditions and implementation of the arrangements where more than one Member State is concerned;

Whereas the information to be exchanged between Member States and the Commission for the purpose of scrutinizing the economic conditions should be simplified in order to speed up transmission and allow computerization of the procedure;

Whereas the measures provided for in this Regulation are in accordance with the opinion of the Committee for Customs Procedures with Economic Impact,

HAS ADOPTED THIS REGULATION:

TITLE I GENERAL PROVISIONS AND PRODUCTION ACCESSORIES

Article 1

For the purposes of this Regulation:

1. basic Regulation means Regulation (EEC) No 1999/85;

2. main compensating products means the compensating products for the production of which use of the inward processing arrangements (hereinafter referred to as the 'arrangements`) was authorized;

3. secondary compensating products means compensating products other than those referred to in paragraph 2 which are a necessary by-product of the processing operation;

4. losses means the proportion of the import goods destroyed and lost during the processing operation, in particular by evaporation, dessication, venting as gas or leaching;

5. quantitative scale method means calculation of the import goods incorporated in the various compensating products by reference to the quantity of such import goods;

6. value scale method means calculation of the import goods incorporated in the various compensating products by reference to the value of such compensating products;

7. equivalent compensation means the system referred to in Article 2 (1) (a) of the basic Regulation;

8. prior exportation means the system referred to in Article 2 (1) (b) of the basic Regulation;

9. triangular traffic means the system whereby import goods are entered for the arrangements in a Member State other than that in which use of the arrangements was authorized and where the processing operations are carried out;

10. importing Member State means the Member State in which the import goods are entered for the arrangements;

11. exporting Member State means the Member State in which the compensating products are declared for export;

12. specific commercial policy measures means non-tariff measures established as part of the common commercial policy in the form of Community rules governing arrangements for the import or export of goods, such as surveillance or safeguard measures, quantitative limits or restrictions and import or export bans;

13. time limit for re-exportation means the date by which the compensating products must have been dealt with in one of the ways listed in Articles 18 or 27 (1) of the basic Regulation;

14. monthly aggregation means application of the second paragraph of Article 14 (2) of the basic Regulation in respect of time limits for re-exportation which begin to run during a given calendar month;

15. quarterly aggregation means application of the second paragraph of Article 14 (2) of the basic Regulation in respect of time limits for re-exportation which begin to run during a given quarter.

Article 2

The goods covered by the fourth indent of Article 1 (3) (h) of the basic Regulation, used as production accessories, are listed in Annex I.

TITLE II AUTHORIZING USE OF THE ARRANGEMENTS CHAPTER I APPLYING FOR AUTHORIZATION

Article 3

1. Without prejudice to paragraph 4 or to Article 25, applications for authorization shall be made in writing and shall conform to the model set out in Annex II. They shall at least contain the information indicated in the said Annex. Applications must be signed and dated.

2. Where the customs authority considers the particulars indicated in the model referred to in paragraph 1 to be inadequate, it may require the applicant to supply additional particulars.

3. The application must be accompanied by all supporting documents or evidence needed for its appraisal.

4. The customs authority may allow the holder of an authorization to apply for its renewal by simple written request, giving particulars of the previous authorization and indicating any changes which need to be made.

5. The customs authority shall keep applications and the documents and evidence relating to them, together with copies of any authorizations issued.

6. The applicant may request that the authorization be either for the suspension system or the drawback system where the conditions for use of the appropriate system are fulfilled.

7. Where processing is carried out under a job processing contract between two persons established in the Community the application for authorization shall be lodged by or on behalf of the principal.

8. Where a request is to be made for alteration of an authorization, paragraph 4 shall apply.

CHAPTER II GENERAL CONDITIONS FOR AUTHORIZING USE OF THE ARRANGEMENTS

Article 4

1. Before issuing the authorization the customs authority shall check that the conditions for use of the arrangements, in particular the economic conditions, are fulfilled.

2. For the purposes of the second sentence of Article 4 (a) of the basic Regulation, 'imports of a non-commercial nature` means imports of an occasional nature, containing goods the nature and quantity of which does not indicate that they are being imported for any commercial purpose.

3. For the purposes of Article 4 (c) of the basic Regulation the customs authority shall establish the methods of identifying the import goods in the compensating products or the means of verifying whether the conditions laid down for the proper conduct of operations under the equivalent compensation system have been complied with.

To this end the customs authority shall use, inter alia, the following means:

(a) statement or description of special marks or manufacturer's numbers;

(b)

affixing of seals, clip-marks or other distinctive marks;

(c)

the taking of samples, illustrations or technical descriptions;

(d)

the carrying-out of analyses.

Article 5

1. For the purposes of applying the economic conditions:

(a)

comparable goods shall be considered unavailable within a 'suitable time` within the meaning of Article 6 (1) (c) of the basic Regulation where producers established in the Community cannot make them available to the operator in time for the proposed commercial operation to be carried out, despite a request having been made to them in good time;

(b)

in deciding whether the price of comparable goods produced in the Community is such as to make the proposed commercial operation economically impracticable, the customs authority shall take account, inter alia, of the impact that the use of Community-produced goods would have on the cost price of the compensating product and hence on the disposal of the product on the third-country market, having regard to:

- both the price of the uncleared goods for processing and the price of comparable goods produced in the Community less domestic taxes refunded or refundable on exportation, including any refunds and any other amounts applying under the common agricultural policy. Conditions of sale, in particular payment terms, and proposed delivery terms shall also be taken into consideration when comparing prices, and

- the price obtainable for the compensating product on the third-country market, as ascertained from commercial correspondence or other information;

(c)

'job processing` means any processing of import goods directly or indirectly placed at the disposal of the holder of the authorization which is carried out according to the specifications and on behalf of a principal established outside the customs territory of the Community, generally against payment of processing costs alone.

2. Goods produced in the Community shall be comparable to import goods when they fall within the same CN code, are of the same commercial quality and have the same technical characteristics, having regard to the compensating products to be obtained.

3. In assessing the economic conditions, the following shall not in themselves be taken as grounds for granting the authorization:

(a)

the fact that the Community producer of comparable goods which could be used to carry out the processing operations is an undertaking in competition with the person applying to use the arrangements;

(b)

the fact that the goods are produced in the Community by a single undertaking.

Article 6

1 For the purposes of Article 6 (4) of the basic Regulation the value limit shall be ECU 200 000 per authorization, irrespective of the number of operators carrying out the processing operation.

However, the value limit for the goods and products listed in Annex III shall be ECU 100 000.

2. The value referred to in paragraph 1 shall be the customs value of the goods estimated on the basis of the particulars known and the documents presented at the time when the application is lodged.

3. The application of paragraphs 1 and 2 may be suspended in respect of particular import goods in accordance with the procedure described in Article 31 (2) and (3) of the basic Regulation.

Article 7

1. For the purposes of Article 7 of the basic Regulation, the economic conditions shall be deemed to be fulfilled in respect of a given type of goods to be entered for the arrangements within a given period where the applicant:

(a) during the period in question obtains 80 % of his global requirements for these goods incorporated in the compensating products in the customs territory of the Community, in the form of goods produced in the Community being comparable within the meaning of Article 5 (2) to the import goods.

To make use of this provision, the applicant must supply the customs authority with supporting documents which enable the authority to satisfy itself that the intended purchase of Community goods may be reasonably carried out. Such supporting documents, to be annexed to the application, may take the form, for example, of copies of commercial or administrative documents which refer to purchase made in an earlier reference period, or orders or untended purchase for the period under consideration.

Without prejudice to Article 11 (2) of the basic Regulation, the customs authority shall, where necessary, check that the said percentage is correct at the end of the period in question;

(b)

is trying to guard against real supply problems, proven to the satisfaction of the customs authority, for that type of goods, and the proportion of Community-produced supplies is lower than the percentage indicated at (a);

(c)

satisfies the customs authority that he has taken the necessary steps to obtain goods for processing on the Community market but has met with no response from Community producers.

2. Paragraph 1 (a) shall not apply to goods falling within Annex II to the Treaty.

Article 8

1. An authorization for use of the suspension system may be granted only on condition that there is an actual intention to export the main compensating products from the customs territory of the Community.

2. The following shall be deemed to be an export from the customs territory of the Community:

(a) the delivery of compensating products to persons eligible for reliefs under the Vienna Convention of 18 April 1961 on Diplomatic Relations, the Vienna Convention of 24 April 1963 on Consular Relations or other consular conventions, or the New York Convention of 16 December 1969 on Special Missions;

(b)

the delivery of compensating products to the armed forces stationed in the territory of a Member State in accordance with Article 136 of Council Regulation (EEC) No 918/83 (1);

(c)

the delivery of civil aircraft to airline companies established in the customs territory of the Community;

(d)

the repair, modification or conversion of civil aircraft carried out under processing relief arrangements.

CHAPTER III EQUIVALENT COMPENSATION AND PRIOR EXPORTATION

Article 9

Without prejudice to Article 10, where use is to be made of equivalent compensation or prior exportation, the equivalent goods must fall within the same CN code, be of the same commercial quality and have the same technical characteristics as the import goods.

Article 10

Where the circumstances so warrant, the customs authority may allow the equivalent goods to be at a more advanced stage of manufacture than the import goods, provided that the essential part of the processing to which the said equivalent goods are subjected is carried out in the premises of the holder of the authorization or in the premises where the operation is being carried out on his behalf.

Article 11

Special provisions, set out in Annex IV, shall apply in respect of the goods referred to in that Annex.

Article 12

1. The change in customs position described in Article 2 (3) of the basic Regulation shall be effected as follows:

(a)

In the case of equivalent compensation without prior exportation, the change in customs position of the import goods and the equivalent goods shall take place at the time of acceptance of the document placing the compensating products or unprocessed goods under one of the customs procedures referred to in Article 18 of the basic Regulation.

However, where the holder of the authorization puts the import goods on the Community market either in the unaltered state or in the form of compensating products before the arrangements have been discharged, the change in customs position of the import goods and the equivalent goods shall take place at the time the goods are put on the market;

(b)

In the case of prior exportation:

- the change in the customs position of the exported compensating products shall take place at the time of acceptance of the export declaration and on condition that the import goods are entered for the arrangements,

- the change in the customs position of the import goods and the equivalent goods shall take place at the time of acceptance of the declaration entering them for the arrangements.

2. The change in customs position referred to in paragraph 1 shall not alter the origin of the exported goods.

3. In the event of the total destruction or irretrievable loss of goods in the unaltered state or compensating products the share of import goods destroyed or lost shall be calculated by reference to the proportion of import goods in stocks of goods of the same kind held by the holder of the authorization at the time when the destruction or loss occurred, unless he can produce evidence of the actual quantity of import goods destroyed or lost.

CHAPTER IV TRIANGULAR TRAFFIC

Article 13

The customs authority of the Member State referred to in Article 3 of the basic Regulation may allow triangular traffic only as part of the prior exportation system.

CHAPTER V ISSUING THE AUTHORIZATION

Article 14

1. Without prejudice to Article 25, authorizations shall be made out in writing and shall conform to the model set out in Annex II. They shall contain at least the particulars there indicated. Authorizations must be signed and dated.

2. Authorizations shall be addressed to the applicant.

3. Authorizations shall take effect on the date of issue.

4. In cases which can be shown to be exceptional, the customs authority may issue a retroactive authorization.

However, the retroactive effect of such authorization may not go back beyond the time when the application was lodged.

5. The customs authorities shall keep copies of authorizations for at least three calendar years after the end of the year of their expiry.

Article 15

1. The period of validity of an authorization shall be set by the customs authority, having regard to the economic conditions and the specific needs of the applicant.

Where an authorization is for a period exceeding two years the conditions on which it was issued shall be reviewed periodically at intervals specified in the authorization.

2. Notwithstanding paragraph 1, the period of validity of an authorization in respect of the products referred to in the second subparagraph of Article 28 (1) may not exceed three months.

TITLE III OPERATION OF THE ARRANGEMENTS CHAPTER I SPECIFIC COMMERCIAL POLICY MEASURES

Article 16

Where non-Community goods are entered for the arrangements using the suspension system, any specific commerical policy measures to which imports of the said goods are subject shall not apply.

Article 17

Non-Community goods, even where they are not liable for import duties, may also be entered for the arrangements using the suspension system:

(a) with a view to non-application of specific commercial policy measures applying to the goods;

(b)

with a view to non-application of specific commercial policy measures applying to export of the goods in the unaltered state or the compensating products, without prejudice to specific commerical policy measures applying to exports of products originating in the Community.

CHAPTER II FORMALITIES FOR ENTRY OF GOODS FOR ARRANGEMENTS (SUSPENSION SYSTEM) AND FORMALITIES FOR RELEASE OF GOODS FOR FREE CIRCULATION (DRAWBACK SYSTEM) Section 1 Normal procedure

Article 18

1. The entry of goods for the arrangements using the suspension system shall be subject to the lodging of a declaration of entry for the arrangements. The person making the declaration is hereinafter referred to as the 'declarant`.

2. Paragraph 1 shall also apply to the entry for the arrangements of import goods under the prior exportation system.

3. The declaration referred to in paragraph 1 must be lodged at a competent customs office in the Member State where the authorization was issued. However, where the triangular traffic system is used, the declaration entering the import goods for the arrangements shall be lodged at the customs office indicated on information sheet INF 5, referred to in Article 32.

Article 19

1. The declaration referred to in Article 18 shall be made out on a form IM as provided for in Article 3 of Council Regulation (EEC) No 1900/85 (1).

2. The declaration referred to in paragraph 1 must also contain, should the need arise:

- in box 44, the reference to the authorization,

- in box 47, the elements to be taken into consideration for the calculation of the import duties to be applied.

3. The description of the goods given in the declaration referred to in paragraph 1 must correspond to the description given in the authorization.

Article 20

1. The customs authority may require that the authorization be presented when the declaration or, where the drawback system is used, the entry for release for free circulation, is lodged.

2. The said declaration or entry must be accompanied by all other documents whose presentation is necessary for entry for the arrangements or for free circulation, as the case may be.

3. The customs authority may agree that the documents in question be held at its disposal rather than accompanying the declaration or entry.

Article 21

1. Particulars of the authorization must also be given in Box 44 of the entry for release for free circulation made out under the drawback system.

2. The description of the goods given in the entry referred to in paragraph 1 must correspond to the description given in the authorization.

Article 22

1. Article 4 (3), (4) and (5) and Articles 5 to 10 of Commission Regulation (EEC) No 1751/84 (2) shall apply mutatis mutandis.

2. Acceptance of a declaration under Article 18 or entry under Article 21 shall be subject to issue of an inward processing authorization. In cases which can be shown to be exceptional, however, the particular authority may accept the declaration or entry without such authorization having been issued, provided the application was submitted before such acceptance.

3. Where paragraph 2 is applied, particulars of the application for authorization shall also be given in Box 44 of the declaration or entry in question.

Section 2 Simplified procedures

Article 23

1. Provided the proper conduct of operations is not thereby affected, the customs authority, at the declarant's request and on conditions it shall lay down, shall agree that:

(a) a declaration under Article 18 or entry under Article 21 need not contain some of the particulars referred to in Article 19 or 21 as the case may be, or need not be accompanied by some of the documents referred to in Article 20;

(b)

a declaration under Article 18 or entry under Article 21 can be replaced by a commercial or administrative document, accompanied by an application for entry for the arrangements or use of the drawback system, signed by the declarant;

(c)

the goods can be entered for the arrangements or the drawback system used without the goods having been presented and before the declaration or entry is lodged.

2. Where use of the simplified procedure referred to in paragraph 1 (c) is authorized, the person authorized shall, upon arrival of the goods on the designated premises:

(a)

duly notify the customs authority of such arrival in the manner specified by the said authority.

However, the customs authority may:

- permit the authorized person to notify it of the arrival of the goods when this is imminent, rather than requiring him to wait for their actual arrival;

- in special circumstances, where the nature of the goods and the rapid import turnover warrant this, exempt the authorized person from the requirement to notify each arrival of goods, provided that he supplies all the information the particular authority judges necessary to enable it to exercise its right to examine the goods should the need arise;

(b)

enter the goods in his accounts. Such entry shall be effected in the manner specified by the customs authority. It shall indicate the date of such entry. Such entry may be replaced by any other formality of comparable probative effect stipulated by the customs authority;

(c)

make available to the customs authorities all documents relating to the entry of the goods for the arrangements.

3. The following shall not be authorized by the customs authority to use the simplified procedures described in paragraph 1:

(a)

persons who do not offer adequate guarantees as to the proper conduct of the operations;

(b)

persons whose accounts are not such as to enable the customs authority to check on the operations where the simplified procedure described in paragraph 1 (c) is used.

The customs authority may withhold authorization to use the simplified procedures from persons who do not frequently enter goods for the arrangements.

Article 24

1. Incomplete declarations or entries, commercial or administrative documents and entries in the accounts as referred to in Article 23 must contain at least the particulars necessary for identification of the goods.

Acceptance by the customs authority of such incomplete declaration or entry, commercial or administrative documents or entry in the accounts shall have the same force in law as acceptance of the declaration referred to in Article 18 or entry as referred to in Article 21.

Any examination of the goods shall be based on the particulars given in the incomplete declaration or entry, commercial or administrative document or entry in the accounts.

In the cases referred to in Article 23 (1) (c), entry of the goods in the accounts shall be equivalent to their release.

2. Additional declarations or declarations relating to goods covered by the procedure authorized under Article 23 (1) must be lodged, or documents omitted under Article 23 (1) (a) must be supplied, at the competent customs office, and no later than the time when the bill of discharge is lodged.

Acceptance of such declaration shall not have the same force in law as acceptance of the declaration referred to in Article 18 or entry referred to in Article 21.

3. The customs authority may agree that the declaration or additional declaration be of a general, periodic or recapitulative nature.

Article 25

1. Where Articles 23 and 24 are not applied, the customs office designated by the customs authority shall, in respect of operations relating to:

(a)

repair of goods, including restoring them to their original condition and putting them in order, or

(b)

the usual forms of handling to which goods may be subject under the Community rules governing customs warehouses and free zones,

permit lodging of the inward processing declaration or, under the drawback system, the entry for release for free circulation to constitute an application.

In this case acceptance of the declaration or entry shall constitute the authorization and shall be subject to the conditions governing the granting of the authorization.

2. The customs office designated by the customs authority may apply the procedure described in paragraph 1 in respect of goods to be used for inward processing operations other than those referred to in that paragraph.

Each Member State shall notify the Commission of the designated offices, specifying the type of goods and the processing operations covered in each case.

3. Where paragraphs 1 and 2 are applied, the declaration referred to in Article 18 or the entry referred to in Article 21 shall be accompanied by a document made out by the declarant containing the following information:

(a)

where the person applying to use the arrangements is not the same as the declarant, the name or business name and address of that person;

(b)

where the processor is not the same as the applicant or declarant, the name or business name and address of the said processor;

(c)

the nature of the processing operation;

(d)

the trade and/or technical description of the compensating products;

(e)

the rate of yield or, where appropriate, the method by which the rate will be established;

(f)

the period within which the goods are to be dealt with in one of the ways provided for in Article 18 or 27 of the basic Regulation;

(g)

the place where it is intended to carry out the processing operation.

Such accompanying document shall form an integral part of the declaration.

CHAPTER III TIME LIMITS PROVIDED FOR IN ARTICLE 14 OF THE BASIC REGULATION

Article 26

Where the circumstances so warrant, the time limit set for placement under one of the procedures referred to in Article 18 or 27 of the basic Regulation may be extended, even when the limit originally set has expired.

Article 27

1. In the case of monthly aggregation, all time limits for re-exportation beginning to run in a given month shall expire on the last day of the calendar month during which the time limit for re-exportation relating to the final entry for the arrangements in the month in question would expire.

2. In the case of quarterly aggregation, all time limits for re-exportation beginning to run in a given quarter shall expire on the last day of the quarter during which the time limit for re-exportation relating to the final entry for the arrangements in the quarter in question would expire.

3. Where monthly or quarterly aggregation has been requested and authorized, that fact shall be indicated at point 9 of the inward processing application and of the authorization itself (see specimens in Annex II).

4. Monthly or quarterly aggregation may be authorized where the import goods are expected to be entered, on a regular basis, for the arrangements for processing and exportation in the form of compensating goods so that the time taken for re-exportation will be more or less constant.

5. Monthly or quarterly aggregation shall be applied taking account of the examples in Annex XII.

Article 28

1. In the case of agricultural products of the kind referred to in Article 1 of Council Regulation (EEC) No 565/80 (1) which are to be exported in the form of processed products or goods within the meaning of Article 2 (b) or (c) of that Regulation, the period within which the import goods must be dealt with in one of the ways specified in Article 18 of the basic Regulation may not exceed six months.

However, in case of the products specified in Article 1 of Council Regulation (EEC) No 804/68 (2) intended for the manufacture of products referred to in that Article or of goods listed in the Annex to that Regulation, the time-limit for re-export may not exceed four months.

2. Where monthly aggregation is authorized for the agricultural products referred to in paragraph 1, the time limits for re-exportation referred to in Article 27 (1) shall expire not later than the last day of the fifth calendar month following that for which aggregation was authorized.

3. Where quarterly aggregation is authorized for the agricultural products referred to in paragraph 1, the time limits for re-exportation referred to in Article 27 (2) shall expire no later than the last day of the quarter following that for which aggregation was authorized.

Article 29

1. The time limit referred to in Article 14 (3) of the basic Regulation shall be set with due regard to the time needed for the supply and transport of the import goods to the Community.

2. The time limit referred to in paragraph 1 may not exceed:

- three months in the case of goods subject to a price-regulating mechanism,

- the period of validity of the import licence issued in accordance with Commission Regulation (EEC) No 2630/81 (1) in the case of raw sugar falling within CN codes 1701 11 or 1701 12,

- six months in the case of all other goods. This period may, however, be extended where the holder of the authorization submits a reasoned request, provided that the total period does not exceed 12 months. Where the circumstances so warrant, the extension may be allowed even after the original time limit has expired.

Article 30

1. The time limits referred to in Articles 26 and 28 shall run from the date of acceptance of the declaration entering the goods for the arrangements or, under the drawback system, of the entry for release for free circulation.

2. The time limits set in accordance with Article 29 shall run from the date of acceptance of the export declaration.

CHAPTER IV STANDARD RATES OF YIELD

Article 31

1. Where the import goods for inward processing are listed in column 1 of Annex V and the compensating products obtained are those in columns 3 and 4, the customs authority shall apply the standard rates of yield shown in column 5.

2. The standard rates of yield referred to in paragraph 1 shall apply only to goods of sound, genuine and (;) OJ N° L 258, 11. 9. 1981, p. 16.

merchantable quality which conform to any standard quality laid down in Community rules.

3. Each Member State shall notify the Commission of cases in which it proves impossible to apply the standard rates referred to in paragraph 1 because, although the import of goods processed are listed in column 1 of Annex V, the processing operations produce compensating products other than those shown in columns 3 and 4 at the same stage of manufacture.

CHAPTER V TRIANGULAR TRAFFIC

Article 32

1. For triangular traffic the information sheet referred to as 'information sheet INF 5` shall be used.

2. Information sheet INF 5 shall be made out on a form corresponding to the model and indications in Annex VI, in one original and three copies which must be presented together at the customs office where the export declaration is lodged.

Information sheet INF 5 shall be made out in respect of the quantity of import goods corresponding to the quantity of compensating products exported. Where it is planned to import the goods in successive consignments, more than one INF 5 form may be made out.

Article 33

1. The customs office where the export formalities are carried out shall endorse information sheet INF 5. It shall retain copy No 1 and return the original and the other copies to the declarant.

The customs office where export from the customs territory of the Community takes place shall certify on the original and copies, which it shall then return to the declarant, that the products have left the said territory.

2. Where the customs office where the export formalities are carried out is not the office competent to check on the arrangements, it shall send copy No 1, endorsed, to the latter office.

3. Where the compensating products are dispatched to a Member State other than the Member State where the processing took place in order that the export formalities for the dispatch of those compensating products from the customs territory of the Community might be carried out in the customs office of this other Member State, the compensating products shall be consigned from the Member State of processing to the Member State of export using the Community transit procedure (external procedure). The box reserved for the description of goods on the transit document shall contain one of the indications referred to in Article 73 (1), plus the letters "EX-IM".

The procedure for use of the INF 5 sheet shall be modified as follows:

- the original and the three copies duly completed (boxes 1 to 8) must be lodged with the customs office which is requested to issue the T 1 document,

- that office shall enter particulars of the T 1 document in box 9 and shall affix the "T 1 stamp" ,

- box 10 shall be completed when the compensating products are actually exported from the particular territory of the Community.

4. The compensating products referred to in paragraph 3 may only be exported direct to third countries.

5. For the purposes of Article 37, in the cases referred to in paragraph 3, 'the exporter of the compensating products from the exporting Member State` referred to in the first indent of Article 37 (1) (b) shall mean the holder of the authorization who consigns the compensating products to the Member State from which they are exported from the customs territory of the Community, and 'the exporting Member State` referred to in Articles 35 and 37 (1) (a), the first and second indents of Article 37 (1) (b), and in Article 37 (2) shall mean the Member State where the compensating products are placed under the procedure referred to in paragraph 3.

Article 34

1. The import goods may be entered for the arrangements at a particular office of importation, other than that specified, if so allowed by the customs office of the exporting Member State which is competent to check on the arrangements or by the customs office of the importing Member State which shall notify this change to the customs office responsible for control of the arrangements.

2. In the event of theft, loss or destruction of information sheet INF 5, the importer may ask the customs office which endorsed it for a duplicate to be issued. The said office shall comply with this request provided it can be shown that the import goods in respect of which the duplicate is requested have not been entered for the arrangements.

The original and copies of the information sheet INF 5 so issued shall bear one of the following indications:

DUPLICADO

DUPLIKAT

ÁÍÔÉÃÑÁOEÏ

DUPLICATE

DUPLICATA

DUPLICATO

DUPLIKAAT

SEGUNDA VIA

Article 35

1. The declaration entering import goods for the arrangements must be accompanied by the original and copies Nos 2 and 3 of information sheet INF 5.

2. The customs office where the inward processing declaration is presented shall note on the original and copies Nos 2 and 3 of information sheet INF 5 the quantity of import goods entered for the arrangements and the date of acceptance of the corresponding declaration. It shall send without delay copy No 3 to the customs office in the exporting Member State competent to check the arrangements, returning the original to the declarant and retaining copy No 2.

Article 36

On receipt of copy No 3 the customs office competent to check on the arrangements shall notify the holder of the authorization without delay of the quantity of import goods entered for the arrangements and the date of such entry.

Article 37

1. Under the triangular traffic system:

(a) where the import goods are liable, in trade between the exporting and importing Member States, to customs duties, charges having equivalent effect or other charges provided for under the common agricultural policy, the specific arrangements applicable to certain goods resulting from the processing of agricultural products, or provided for, where appropriate, in an Act of Accession; or

(b)

where the import goods qualify, in the trade referred to at (a), for the payment of amounts provided for under the common agricultural policy, the specific arrangements applicable to certain goods resulting from the processing of agricultural products, or provided for, where appropriate, in an Act of Accesion,

such duties, charges or amounts shall apply in the same way as if the import goods in question had been:

- sent by the exporter of the compensating products from the exporting Member State to the importing Member State, and

- brought into the importing Member State from the exporting Member State by the person in the name or on behalf of whom the inward processing declaration in respect of the said goods was made out.

2. The duties, charges and amounts referred to in paragraph 1 shall be applied by the importing Member State at the time when the import goods are entered for the arrangements, and by the exporting Member State at the time when the arrangements are discharged.

3. The particulars used for applying paragraph 1 shall be those obtaining on the date of acceptance of the declaration.

Article 38

This chapter shall also apply where the prior exportation of compensating products and importation of import goods take place in a single Member State. However, Member States may lay down other procedures.

CHAPTER VI SPECIAL PROVISIONS FOR USE OF THE DRAWBACK SYSTEM

Article 39

1. Goods released for free circulation under the drawback system and compensating products obtained under that system may undergo successive processing operations under other authorizations permitting use of the same system. Where necessary, the particular authority shall issue a new authorization with reference to the authorization previously issued.

2. Where another authorization has been granted under the conditions laid down in paragraph 1, account shall be taken of the time set in this new authorization for the repayment or remission of duties.

CHAPTER VII GENERAL PROVISIONS FOR IMPLEMENTATION OF ARTICLES 18 AND 27 OF THE BASIC REGULATION

Article 40

1. Without prejudice to use of the simplified procedures, any compensating products or goods in the unaltered state to be placed under one of the customs procedures referred to in Article 18 or 27 of the basic Regulation must be produced at a customs office empowered by the customs authority to supervise the arrangements in order to undergo the customs formalities specified for the procedure in question under the general provisions applicable.

However, the customs authorities may allow the products or goods concerned to be produced at a customs office other than that referred to in the first subparagraph.

2. Compensating products or goods in the unaltered state shall be deemed to have been produced at a customs office when their presence on the premises of that office or on other premises designated by the customs authority has been notified to the said authority in the manner required to enable it to carry out supervision or checks.

Article 41

The declaration of application to place compensating products or goods in the unaltered state under one of the customs procedures referred to in Article 18 or 27 of the basic Regulation must contain the particulars necessary for discharge of the arrangements or to support an application for drawback.

Article 42

1. When the nature or technical characteristics of the import goods have been altered as a result of unforeseeable circumstances or force majeure so that it becomes impossible to obtain the compensating products for which an inward processing authorization under the suspension procedure has been granted, the holder of the authorization must inform the customs authority of what has happened and apply for the import goods concerned to be placed under another customs procedure.

2. On receipt of the application referred to in paragraph 1, the customs authority shall allow the arrangements to be discharged in respect of the import goods concerned in accordance with Article 18 of the basic Regulation, which shall be applied mutatis mutandis.

3. Article 12 (3) shall be applicable mutatis mutandis.

4. In cases where the alteration in question may affect the continuation in force or the substance of the authorization, paragraphs 1 and 2 shall be without prejudice to Article 11 (2) of the basic Regulation.

5. The provisions of this Article shall apply mutatis mutandis to the compensating products.

CHAPTER VIII SPECIAL PROVISIONS CONCERNING EXPORT Section 1 Normal procedure

Article 43

The export, either direct or after one of the customs procedures referred to in Article 18 (2) (a) or (b) or 27 of the basic Regulation, of compensating products or goods in the unaltered state shall be subject to completion of the export formalities.

Article 44

1. The lodging, acceptance, correction and cancellation of the export declaration, examination of the declared compensating products or goods in the unaltered state, the possible taking of samples, checking of the export declaration and related documents, the results of such checks and the granting of authorization to export the products or goods shall be governed by the provisions adopted by Member States pursuant to Council Directive 81/177/ EEC (1) and Commission Directive 82/347/EEC (2), having regard to the objectives of the Regulation.

2. Where the prior exportation system is used, Article 22 (2) shall apply mutatis mutandis.

Section 2 Simplified procedures

Article 45

1. Provided the proper conduct of operations is not thereby affected, the customs authority, at the request of the person concerned and on conditions it shall lay down, shall agree that:

(a) the export declaration may be replaced by a commercial or administrative document accompanied by an export application signed by the declarant;

(b)

the compensating products may be exported without being presented to the customs authority competent to check on exportation and before lodging of the export declaration.

2. Where use of the simplified procedure described in paragraph 1 (b) is authorized, the person authorized shall:

(a) give the customs authority competent to check on exportation, referred to in paragraph 1 (b), notice of dispatch in the manner specified by the said authority, so as to enable such authority to check on consignments, if necessary, before their dispatch;

(b)

make out an export declaration or the document referred to in paragraph 1 (a);

(c)

enter the goods in the unaltered state or compensating products to be exported in his accounts. Such entry shall be effected in the manner laid down by the customs authority. It shall indicate the date of entry. Such entry may be replaced by any other formality of comparable probative effect stipulated by the customs authority;

(d)

make available to the customs authority all documents relating to the export of the goods in the unaltered state or compensating products in question.

3. The following shall not be authorized by the customs authority to use the simplified procedures described in paragraph 1:

(;) OJ N° L 83, 30. 3. 1981, p. 40.

($) OJ N° L 156, 7. 6. 1982, p. 1.

(a)

persons who do not offer adequate guarantees as to the proper conduct of the inward processing operations;

(b)

persons whose accounts are not such as to enable the customs authority to check on the operations where the simplified procedure described in paragraph 1 (b) is used.

The customs authority may withhold authorization to use the simplified procedures from persons who do not frequently carry out inward processing operations.

Article 46

1. The commercial or administrative document and entry in the accounts referred to in Article 45 must contain at least the particulars necessary for identification of the goods or products and a reference to the authorization.

Acceptance by the customs office of such commercial or administrative document or entry in the accounts shall have the same force in law as acceptance of the export declaration.

Any examination of the goods or products shall be based on the particulars given in the commercial or administrative document or entry in the accounts.

In cases covered by Article 45 (1) (b) entry of the goods in the accounts shall be equivalent to their release.

2. The declaration relating to goods or products covered by the authorization referred to in paragraph 1 must be lodged at the competent customs office within the period stipulated by the customs authority. Acceptance of such declaration shall not have the same force in law as acceptance of the export declaration.

3. The customs authority may agree that the declaration should be of a general, periodic or recapitulative nature.

CHAPTER IX SPECIAL PROVISIONS CONCERNING RELEASE FOR FREE CIRCULATION Section 1 Circumstances in which goods may be released for free circulation

Article 47

1. The conditions for the release for free circulation of goods in the unaltered state or compensating products shall be deemed to be fulfilled where the person concerned declares that he is unable to enter those products or goods for a customs procedure under which import duties would not be payable.

2. The customs authority may authorize release for free circulation on a case-by-case or general basis, provided this does not contravene other Community provisions relating to release for free circulation.

Section 2 Simplified procedures

Article 48

1. Provided the proper conduct of operations is not thereby affected, the customs authority, at the request of the person concerned and on conditions it shall lay down, shall agree that:

(a) the entry for release for free circulation need not contain some of the particulars asked for;

(b)

the entry may be replaced by a commercial or administrative document accompanied by an application signed by the declarant for release for free circulation;

(c)

the compensating products or goods in the unaltered state may be released for free circulation without being presented and before the entry is lodged.

2. Where use of the simplified procedure described in paragraph 1 (c) is authorized, the person authorized shall:

(a)

notify the customs authority in the manner specified by the said authority, and before the goods leave his premises, of the imminent dispatch of consignments, and/or supply the said authority with all the information it judges necessary to enable it to exercise its right to examine the goods should the need arise;

(b)

enter the compensating products or goods in the unaltered state in his accounts. Such entry shall be effected in the manner laid down by the customs authorities. It shall indicate the date of entry. Such entry may be replaced by any other formality of comparable probative effect stipulated by the customs authority;

(c)

make available to the customs authority all documents relating to the release for free circulation of the compensating products or goods in the unaltered state in question, and in particular the import licence required under the common agricultural policy or documents provided for by the common commercial policy.

3. The following shall not be authorized by the customs authority to use the simplified procedures described in paragraph 1:

(a)

persons who do not offer adequate guarantees as to the proper conduct of the processing operation;

(b)

persons whose accounts are not such as to enable the customs authority to check on the operations where the simplified procedure described in paragraph 1 (c) is used.

The customs authority may withhold authorization to use the simplified procedures from persons who do not frequently carry out processing operations.

Article 49

1. Incomplete entries, commercial or administrative documents and entry in the accounts as referred to in Article 48 must contain at least the particulars necessary for identification of the compensating products or goods and a reference to the authorization.

Acceptance by the customs authority of such incomplete entry, commercial or administrative document or entry in the accounts shall have the same force in law as acceptance of the entry for release for free circulation.

Any examination of the compensating products or goods shall be based on the particulars given in the incomplete entry, commercial or administrative document or entry in the accounts.

In cases as referred to in Article 48 (1) (c), entry of the compensating products or goods in the accounts shall be equivalent to their release.

2. The additional declaration or declaration relating to products or goods covered by the authorization referred to in paragraph 1 must be lodged at the competent customs office within the period stipulated by the customs authority.

Acceptance of such declaration shall not have the same force in law as acceptance of the entry for release for free circulation.

3. The customs authority may agree that the additional declaration or the declaration referred to in paragraph 2 should be of a general, periodic or recapitulative nature.

Article 50

1. Where a general authorization for release for free circulation has been issued in accordance with Article 47, the import goods may be put on the Community market either in the form of compensating products or of goods in the unaltered state without the formalities for release for free circulation being completed at the time of their being put on the market.

Goods put on that market in such a manner shall not be deemed solely for the purposes of paragraph 2 as having been treated in one of the ways specified in Article 18 of the basic Regulation.

2. Import goods, whether in the form of compensating products or of goods in the unaltered state, which are covered by a general authorization for release for free circulation issued in accordance with Article 47 and which, on expiry of the time limit for re-exportation, have not been dealt with, having due regard to Article 27 (a), in one of the ways referred to in Article 18 of the basic Regulation shall be deemed to have been released for free circulation, and the entry for release for free circulation shall be deemed to have been lodged and accepted and release granted upon expiry of the said time limit.

3. For the purposes of applying Council Regulation (EEC) N° 222/77 (1), goods put on the market in accordance with paragraph 1 shall be regarded forthwith as Community goods.

Section 3 Release for free circulation of goods subject to specific commercial policy measures

Article 51

1. The release for free circulation of import goods in the form either of goods in the unaltered state or of compensating products other than secondary compensating products referred to in Annex VII shall be subject to the application by the customs authority of any specific commercial policy measures in force for the import goods at the time when the entry for release for free circulation was accepted.

2. Where release for free circulation is requested in a Member State other than that in which use of the arrangements was authorized, it shall be subject to the application by the customs authority in the Member State of authorization or, at the declarant's request, by the customs authority in the Member State where release is requested, of any specific commercial policy measures in force for the import goods in the Member State concerned at the time when the entry for release for free circulation was accepted.

CHAPTER X PROVISIONS RELATING TO DUTIES AND OTHER CHARGES AND APPLICATION OF MONETARY COMPENSATORY AMOUNTS Section 1 Duties and other charges and application of monetary compensatory amounts

Article 52

1. The duties to be charged under Article 20 (1) of the basic Regulation on import goods eligible, at the time when (;) OJ N° L 38, 9. 2. 1977, p. 1.

the declaration referred to in Article 18 was accepted, for favourable tariff treatment by reason of their end-use shall be calculated at the rate corresponding to such end-use without special authorization for the granting of such treatment being required, provided that the conditions attaching to the granting of favourable tariff treatment are fulfilled.

2. Paragraph 1 shall apply only where the goods have been put to the end-use qualifying them for favourable tariff treatment before expiry of the time-limit set for that purpose by the Community provisions governing the conditions under which such goods may be accorded the said treatment. The time-limit shall run from the time of acceptance of the declaration referred to in Article 18. It may be extended by the customs authority where the goods have not been put to the end-use in question as a result of unforeseeable circumstances, force majeure or inherent technical exigencies of the processing operation.

Article 53

1. The list of compensating products and processing operations to which the first indent of Article 21 (1) (a) of the basic Regulation applies is given at Annex VII.

For the application of this Article, the destruction under the supervision of the customs authority of compensating products other than those to which the first indent of Article 21 (1) (a) of the basic Regulation applies, is considered to be the same as an exportation outside the customs territory of the Community.

2. The date to be used for calculating import duties on the compensating products referred to in paragraph 1 shall be that on which the entry for release for free circulation is accepted.

3. The customs authority shall permit application of the first indent of Article 21 (1) (a) of the basic Regulation in respect of waste, scrap, residues and rejects other than those mentioned in the list referred to in paragraph 1.

The Member States shall notify the Commission every six months of cases in which this paragraph has been applied.

Article 54

1. Where the import goods are olive oils falling within headings 1509 and 1510 of the combined nomenclature and their release for free circulation either in the unaltered state or in the form of compensating products falling within CN codes 1509 90 00 or 1510 00 90 has been authorized, the agricultural levy to be charged shall be:

- the agricultural levy indicated on the import licence issued under the tendering procedure, subject to the

provisions of Article 4 (2) of Commission Regulation (EEC) N° 3136/78 (1),

or

- the last minimum agricultural levy fixed by the Commission before the date of acceptance of the entry for free circulation, when the licence referred to in Article 6 of the said Regulation is submitted or when the quantity released for free circulation does not exceed 100 kilograms.

2. Paragraph 1 shall also apply where the import goods are olives falling within CN codes 0709 90 39 or 0711 20 90 and the release for free circulation of compensating products falling within CN codes 1509 90 00 or 1510 00 90 has been authorized.

Article 55

1. In the event of the release for free circulation in a Member State other than the one in which use of the arrangements was authorized of goods in the unaltered state or compensating products, the said Member State shall:

- collect import duties other than those referred to in the second indent which are mentioned on information sheet INF 1 provided for in Article 75, in accordance with the corresponding indications,

- apply any monetary compensatory amount in force at the time of acceptance of the entry for release for free circulation, without prejudice to Article 10 of Council Regulation (EEC) N° 1677/85 (2). In the event of release for free circulation of goods in the unaltered state the amount shall be that applying to those goods; where compensating products are released for free circulation the amount shall be that applying to those products.

2. In the event of export, as defined in Article 1 (2) (c) of Commission Regulation (EEC) N° 3154/85 (3), the exporting Member State shall apply the monetary compensatory amounts in accordance with Articles 7 and 8 of the said Regulation

Article 56

1. Where the compensating products are released for free circulation and the customs debt is calculated in accordance with Article 20 of the basic Regulation, on the basis of the items of charge appropriate to the import goods, the particulars mentioned in Article 2 (1) (h), (i), (j) and (k) of Commission Directive 82/57/EEC (4), shall refer to the goods in the unaltered state.

2. The particulars referred to in paragraph 1 need not be supplied where information sheet INF 1 or another document containing the same particulars as the INF 1 sheet, issued in the Member State where release for free circulation takes place, accompanies the entry for release for free circulation.

Section 2 Proportion of import goods incorporated in compensating products

Article 57

The proportion of import goods incorporated in compensating products shall be calculated when necessary in order to determine the import duties to be charged, repaid or remitted. Such calculation shall not be effected when, inter alia, the amount of the debt is determined solely on the basis of Article 21 of the basic Regulation.

Article 58

The quantitative scale method (compensating products) shall be used where one kind of compensating product only is derived from the inward processing operations. In that case the quantity of import goods corresponding to the quantity of compensating products in respect of which a customs debt has arisen shall be calculated by applying to the whole amount of the said goods a coefficient corresponding to the ratio of the quantity of compensating products in respect of which a customs debt arises to the total quantity of compensating products.

Article 59

1. The quantitative scale method (import goods) shall be applied in accordance with this Article where all elements of the import goods are found in each compensating product.

In deciding whether this method shall apply, losses shall not be taken into account.

The quantity of import goods used in the manufacture of each compensating product shall be determined by successively applying to the total quantity of import goods a coefficient corresponding to the ratio of the quantity of the said goods found in each type of compensating product to the total quantity of the goods found in the compensating products as a whole.

The quantity of import goods corresponding to the quantity of compensating products in respect of which a customs debt has arisen shall be determined by applying the coefficient arrived at by the method indicated in Article 58 to the quantity of import goods used in the manufacture of the said product calculated in accordance with the third paragraph hereof.

2. Notwithstanding paragraph 1, the quantitative scale method (import goods) shall also apply to operations involving the processing of durum wheat into 'couscous` cereal meal, groats and other meal.

Article 60

1. Where Articles 58 and 59 do not apply, the value scale method shall be used in accordance with this Article. However, with the agreement of the holder of the authorization and for the purposes of simplification, the customs authority may apply the quantitative scale method (import goods) instead of the value scale method where either method would give similar results.

2. In order to determine the quantity of import goods used in the manufacture of each type of compensating product, successive coefficients corresponding to the ratio of the value of each compensating product to the total value of those products, calculated in accordance with paragraph 3, shall be applied to the total quantity of import goods.

3. The value of each of the different compensating products to be used for applying the value scale shall be:

- the recent selling price in the Community of identical or similar products, provided that this has not been influenced by the relationship between buyer and seller, or, where this is not known,

- the latest ex-works price in the Community, provided that this has not been influenced by the relationship between buyer and seller.

Where the value cannot be ascertained under the first subparagraph it shall be determined by the customs authority using any reasonable method.

4. The quantity of import goods corresponding to the quantity of compensating products in respect of which a customs debt has arisen shall be calculated by applying the coefficient arrived at by the method indicated in Article 58 to the quantity of import goods used in the manufacture of the products in question, calculated in accordance with paragraph 2.

Article 61

The calculations referred to in Article 58, 59 or 60 shall be effected on the basis of the examples set out in Annex XI or by any other method giving the same results.

Section 3 Compensatory interest

Article 62

1. Where a customs debt is incurred in respect of compensating products or goods in the unaltered state compensatory interest shall be paid on the import duty applicable.

2. Paragraph 1 shall not apply:

- where a customs debt governed by Article 9 (1) of Council Regulation (EEC) N° 2144/87 (;) is incurred,

- where Article 21 (2) of the basic Regulation is applied,

- where the secondary compensating products referred to in Annex VII are released for free circulation, provided they are in proportion to exported quantities of main compensating products,

- where the holder of the authorization applies for release for free circulation and furnishes proof that particular circumstances not arising from any negligence or action on his part make it impossible or economically impossible to carry out the export operation under the conditions he had anticipated and duly substantiated when applying for the authorization.

3. The request for consideration of a case under the terms of the fourth indent of paragraph 2 shall be submitted to the customs authority indicated by the Member State which issued the inward processing authorization. It shall be admissible only if accompanied by all the supporting documents needed for a full examination of the case put forward. Where a customs authority receives a request relating to compensatory interest on a sum of ECU 3 000 or less per bill of discharge and observes that the documents supporting the request indicate a situation of the kind provided for in the fourth indent of paragraph 2, it shall not apply paragraph 1. In this case the supporting documents shall be held for three years by the customs authority.

In all other cases, where it intends to grant the request, it shall forward the said request to the Commission with the file containing the material needed for a full examination of the case. Clearance from the customs authority for entry for free circulation of compensating products or goods in the unaltered state shall be subject to the furnishing of a security, the level of which shall be determined in accordance with paragraph 4.

The Commission shall notify the Member State concerned immediately it receives the file. The Member State which OJ N° L 201, 22. 7. 1987, p. 15.

forwarded the request shall not apply paragraph 1 if within two months of the date of notification of receipt the Commission has failed to inform it of any objections.

The Commission shall notify the Member States of requests received and the action taken on them.

4. (a) The annual interest rates shall be set by the Commission on the basis of the arithmetical average of representative short-term rates for each Member State in a given six-month period in the previous year.

They shall apply to all customs debts incurred in the course of a six-month period.

The rate applied shall be that for the Member State where the inward processing operations, or the first such operation, took place.

Rates shall be published in the L series of the Official Journal of the European Communities at least one month before they become applicable.

(b)

Interest shall be applied per calendar month for the period running from the first day of the month following the month in which the import goods in respect of which the arrangements are discharged were entered for those arrangements to the last day of the month in which the customs debt is incurred. Such period shall not be less than a month.

(c)

The amount of interest shall be calculated on the basis of the import duties, the interest rate referred to in (a) above and the period referred to in (b) above.

TITLE IV BILL OF DISCHARGE AND REPAYMENT CLAIM CHAPTER 1 BILL OF DISCHARGE

Article 63

1. Without prejudice to paragraph 2, where the suspension system is used the holder of the authorization must supply the customs authority with a bill of discharge within 30 days of the expiry of the time limit set for re-exportation having regard, where appropriate, to Article 27.

Where monthly or quarterly aggregation is used, a bill of discharge shall be supplied for each month or quarter in question.

2. The customs authority may itself draw up the bill of discharge referred to in paragraph 1 subject to the same time limits. That fact shall be indicated in the authorization.

3. On the basis of the rate of yield established, the bill of discharge shall show the quantity of import goods, giving particulars of the inward processing declarations, and the quantity of compensating products, giving particulars of the documents under which the products were placed under one of the procedures referred to in Article 18 of the basic Regulation. Where a simplified procedure is used for entry under the arrangements or placement under a customs procedure referred to in Article 18 of the basic Regulation, the declarations and documents shall be those stipulated in Articles 24 (2), 46 (2) and 49 (2), and in the provisions relating to other simplified customs procedures. The bill of discharge shall also show the quantity of goods deemed to have been released for free circulation in accordance with Article 50.

4. Import duties on import goods, whether in the form of compensating products or of goods in the unaltered state, deemed to have been released for free circulation in accordance with Article 50, shall be paid, at the latest, on presentation of the bill of discharge possibly based on a summary declaration.

5. Where identification of other items of charge relating to the import goods is necessary in order to determine the amount of import duties, the bill of discharge shall in addition show such items and, where appropriate, the proportion of the import goods incorporated in the compensating products, calculated in accordance with Articles 58 to 61.

6. Any document relating to goods deemed to have been released for free circulation in accordance with Article 50 which is necessary for the proper implementation of the provisions governing the release of goods for free circulation must be made available to the customs authority by the holder of the authorization.

7. The customs authority may agree that the bill of discharge referred to in paragraph 1 be made out by computer or in such other manner as the said authority shall stipulate.

Article 64

The customs authority may permit the bill of discharge to be made out directly on the inward processing declaration.

Article 65

The customs authority shall annotate the bill of discharge on the basis of the check which has been carried out, informing the holder of the authorization, if necessary, of the result of the check and shall keep the bill of discharge and related documents for at least three calendar years from the end of the year in which the bill was drawn up. However, the customs authority may decide that documents relating to the bill of discharge should be kept by the holder of the authorization, in which case the said documents shall be kept for the same period.

Article 66

1. Where import goods have been entered for the arrangements by virtue of a single authorization but under several declarations, compensating products or goods in the unaltered state shall be deemed for the purposes of Article 18 of the basic Regulation to have been obtained from the import goods entered for the arrangements under the earliest of the declarations.

2. Where the holder of the authorization can show the specific import goods from which the compensating products or goods in the unaltered state referred to in paragraph 1 were obtained, the said paragraph 1 shall not apply.

CHAPTER II REPAYMENT CLAIM

Article 67

Repayment or remission of import duties on specified goods may be claimed only by the holder of the authorization, or by a single holder where Article 39 is applied.

Article 68

1. The repayment or remission of import duties to the holder of the authorization shall be subject to the lodging by the said holder with the customs authority of the Member State referred to in Article 3 (1) of the basic Regulation of a claim, hereinafter referred to as the 'repayment claim`. Such claim must be submitted in duplicate.

2. Subject to paragraph 3, claims for the repayment of import duties may be submitted only to the customs authority of the Member State where the entry for release for free circulation referred to in Article 21 (1) was accepted.

3. In specific cases, following a written request from the persons concerned, where two or more Member States involved in processing operations are prepared to allow claims for repayment to be submitted to the customs authority of a Member State other than the one specified in paragraph 2, they shall first communicate the requests to the Commission, together with a draft of the procedures planned to ensure that the claim referred to in Article 69 is correctly made out. The Commission shall inform the other Member States accordingly. The procedures notified to the Commission may be applied unless the Commission notifies the Member States concerned, within two months of the date of receipt of the draft, of any objections to such application.

4. The customs authority may agree that the repayment claim be made out by computer or in such other manner as the said authority shall stipulate.

Article 69

1. The repayment claim must contain, inter alia, the following particulars:

(a) reference to the authorization;

(b)

the type and quantity of the import goods in respect of which repayment or remission is claimed;

(c)

the CN code of the import goods;

(d)

the customs value of the import goods and the rate of import duties to which they are liable as agreed by the customs authority on the date of acceptance of the entry for release for free circulation in connection with the arrangements;

(e)

the date of release for free circulation of the import goods in connection with the arrangements;

(f)

reference to the entries under which the import goods were released for free circulation in connection with the arrangements;

(g)

the type and quantity of the compensating products and the customs procedure under which they are to be placed;

(h)

the value of the compensating products if the value scale method is used for the purpose of discharge;

(i)

the rate of yield;

(j)

reference to the declarations under which the compensating products were entered for one of the customs procedures referred to in Article 27 (1) of the basic Regulation;

(k)

the amount of import duties to be repaid or remitted, as well as any compensating interest collected, taking into account, inter alia, the import duties on other compensating products.

2. The customs authority may agree that the claim should not contain some of the particulars referred to in paragraph 1 where these do not concern calculation of the amount to be repaid or remitted.

3. Where Article 77 (1) applies, the claim shall be accompanied by the originals of INF 7 sheet(s), duly endorsed.

4. Where the customs authority decides that the entries and declarations referred to in paragraph 1 (f) and (j) respectively, and such other document as the said authority shall stipulate, should be kept by the holder of the authorization, the said entries, declarations and documents shall be made available to the customs authority.

Article 70

1. The time limit referred to in Article 27 (2) of the basic Regulation shall be set at a maximum of six months from the date on which the compensating products were dealt with under one of the procedures specified in Article 27 (1) of the said Regulation.

2. Where special circumstances so justify, the customs authority may extend the time limit referred to in paragraph 1 even after the expiry of that time limit.

Article 71

The customs authority shall annotate the repayment claim in accordance with the check carried out and shall inform the holder of the authorization of the result; it shall keep the claim and related documents for at least three calendar years from the end of the year in which it takes a decision on the claim. However, the customs authority may decide that documents relating to the claim should be kept by the holder of the authorization, in which case the said documents shall be kept for the same period.

TITLE V ADMINISTRATIVE COOPERATION CHAPTER I COMMUNICATION CONCERNING ECONOMIC CONDITIONS

Article 72

1. The communication referred to in Article 8 of the basic Regulation must be transmitted to the Commission in the month following that in which the authorization was issued.

2. Where an authorization is issued under Article 9 of the basic Regulation the period referred to in paragraph 1 shall apply.

Where the customs authority does not consider it desirable to issue the authorization before consultation has taken place at Community level, it shall transmit the particulars of the application to the Commission as soon as possible.

3. The Member States shall transmit to the Commission:

(a) in respect of each authorization where the value of the import goods per operator and per calendar year exceeds the limits set in Article 6, the particulars indicated in Annex VIII; such particulars need not be transmitted where the inward processing application has been issued on the basis of one or more of the economic conditions referred to by the following codes: 6106, 6107, 6201, 6202, 6301, 6302, 6303.

However, in respect of the products referred to in the second subparagraph of Article 28 (1), particulars must be supplied for every authorization granted, irrespective of the value of the products and irrespective of the code used to identify the economic condition.

(b)

in respect of each application for an authorization rejected because the conditions are not considered to be fulfilled, the particulars indicated in Annex IX.

4. The information referred to in paragraph 3 shall be transmitted during the month following that in which the authorization was issued or the application for an authorization rejected, as the case may be. It shall be forwarded by the Commission to the other Member States and, where it gives rise to comment by a Member State or the Chairman of the Committee for Customs Procedures with Economic Impact, shall be examined by the Committee.

CHAPTER II EXCHANGE OF INFORMATION BETWEEN CUSTOMS AUTHORITIES

Article 73

1. Where the compensating products or goods in the unaltered state are placed in a free zone or under one of the customs procedures referred to in Article 18 (2) (a), (b) or (d) or in the second indent of Article 27 (1) of the basic Regulation, the box reserved for the description of goods on the document used for the procedure or in the free zone or another box intended for this purpose shall contain one of the following indications:

- Mercancías PA,

- A. F.-varer,

- A. V.-Waren,

- AAìðïñaaýìáôá AAÔ,

- I. P. goods,

- Marchandises PA,

- Merci PA,

- AV-goederen,

- Mercadorias PA.

2. Where import goods are subject to specific commercial policy measures and such measures continue to be applicable at the time when the goods, either in the unaltered state or in the form of compensating products, are placed under one of the procedures mentioned in Article 18 of the basic Regulation or in a free zone, the indication referred to in paragraph 1 must be supplemented by one of the following:

- Política commercial,

- Handelspolitik,

- AAìðïñéêÞ ðïëéôéêÞ,

- Commercial policy,

- Politique commerciale,

- Politica commerciale,

- Handelspolitiek.

Article 74

Where the products or goods referred to in Article 73 are placed under a customs procedure or in a free zone after having been in a free zone or under one of the customs procedures referred to in Article 18 (2) (a), (b) or (d) or in the second indent of Article 27 (1) of the basic Regulation, the customs authority shall satisfy itself that the indications mentioned in Article 73 (1) and, where appropriate, Article 73 (2), have been entered on the documents used for the procedure or in the free zone.

Article 75

1. Where release for free circulation of the compensating products or the goods in the unaltered state is requested in a Member State other than the one where use of the arrangements was authorized or where the customs authority has to establish the amount of the security referred to in Article 16 of the basic Regulation, the information sheet, hereinafter referred to as the 'INF 1 sheet` shall be used. It shall comprise an original and one copy on a form conforming to the model and provisions set out in Annex X.

2. For the purpose of calculating the import duties, and the compensatory interest,

- to be indicated on the INF 1 sheet in respect of the products to which the sheet relates, or

- to be collected on other products in respect of which a customs debt has been or will be incurred,

the products to which the sheet relates shall be deemed to have been released for free circulation on the date on which the customs authority endorsed box 2 of the INF 1 sheet.

Except where Article 76 (5) applies, the compensatory interest shall be indicated under heading 9 (b) of the information sheet.

Article 76

1. Where the release for free circulation of all or part of the compensating goods or goods in the unaltered state referred to in Article 73 is requested, the customs authority responsible for authorizing such release, using the INF 1 sheet endorsed by it, shall ask the customs authority which authorized use of the inward processing arrangements to indicate:

- the amount of import duties to be levied under Article 20 (1) or Article 27 (3) of the basic Regulation,

- the amount of compensatory interest to be levied under Article 62,

- the quantity, CN code and origin of the imported goods used in the manufacture of the compensating products released for free circulation.

The said amount of import duties shall also reflect any difference between:

- the amount of import duties determined by the application of Article 20 of the basic Regulation or the amount of import duties refunded or remitted, and

- the amount of import duties already recorded or to be refunded or remitted.

The original of the INF 1 sheet shall be transmitted to the customs authority which authorized use of the inward processing arrangements, and the copy shall be kept by the customs authority which endorsed box 2 of the sheet.

2. Where the application for release for free circulation related to products or goods referred to in Article 73 (2) and the specific commercial policy measures are to be applied in the Member State where use of the arrangements was authorized, the customs authority responsible for authorizing such release shall, using the INF 1 sheet endorsed by it, ask the customs authority which authorized use of the inward processing arrangements to indicate whether the specific commercial policy measures in force for goods entered for the said arrangements have in fact been applied. In that case the original of the INF 1 sheet shall be transmitted to the customs authority which authorized use of the inward processing arrangements, and the copy shall be kept by the customs authority which endorsed the sheet.

Where the INF 1 sheet is used to apply specific commercial policy measures, the authority receiving it shall notify the holder of the authorization of the application.

3. The customs authority to which the INF 1 sheet is addressed shall supply the information requested in boxes 8, 9 and 10 of this sheet, certify and return the original. However, it shall not be obliged to supply such information beyond the expiry of the period for which it is required to keep records.

4. Where the compensating products obtained from processing operations under the drawback system are transferred to another Member State under cover of a T1 document or one of the documents referred to in Article 7 of Regulation (EEC) N° 222/77 which may constitute supporting documents for a request for repayment, and are the subject of a new inward processing application, the customs authority of the other Member State responsible for issuing the new authorization, either with the suspension system or with the drawback system, shall use the INF 1 sheet to determine the amount of any import duties to be levied or the amount of the customs debt liable to be incurred.

5. Where the INF 1 sheet is used to establish the amount of the security referred to in Article 16 of the basic Regulation, one of the following indications must be entered in box 2 of the INF 1 sheet:

- Garantía

- Sikkerhedsstillelse

- Sicherheit

- AAããýçóç

- Security

- Garantie

- Cauzione

- Zekerheidsstelling

- Garantia.

6. The INF 1 sheet containing one of the indications listed in paragraph 5 may be used only for the purposes of Article 16 of the basic Regulation.

7. Should release for free circulation be requested where an INF 1 sheet has been made out under paragraph 5, a new INF 1 sheet shall be endorsed in accordance with paragraphs 1 to 4.

8. The acceptance of the declaration for release for free circulation shall imply the transfer of the obligation to export the compensating products indicated on the INF 1 sheet from the holder of the authorization to the person who has lodged the declaration.

Article 77

1. Where the compensating products obtained from processing operations under the drawback system are transferred, without a repayment claim being submitted, to a Member State other than the one where release for free circulation took place and are placed there, either in the unaltered state or after further processing, under one of the customs procedures permitting repayment or remission under Article 27 (1) of the basic Regulation, the customs authority in the Member State where the products were placed under one of the procedures shall where necessary, at the request of the person concerned, issue the information sheet referred to in paragraph 2.

The said authority shall give the original to the person concerned and keep the copy.

2. The information sheet known as the INF 7 sheet shall comprise an original and one copy on a form conforming to the model in Annex XIII.

The sheet shall be presented at the same time as the customs declaration used to confer the required destination.

TITLE VI FINAL PROVISIONS

Article 78

1. Regulation (EEC) N° 3677/86 is hereby repealed.

2. References to the repealed Regulation shall be construed as references to this Regulation and should be read in accordance with the correlation table in Annex XIV.

Article 79

This Regulation shall enter into force on 1 October 1991.

This Regulation shall be binding in its entirety and directly applicable in all Member States.

Done at Brussels, 26 June 1991.

For the Commission

Christiane SCRIVENER

Member of the Commission

(1) OJ N° L 188, 20. 7. 1985, p. 1.

(2) OJ N° L 351, 12. 12. 1986, p. 1.

(3) OJ N° L 77, 23. 3. 1991, p. 11.

(1) OJ N° L 105, 23. 4. 1983, p. 1.

(1) OJ N° L 179, 11. 7. 1985, p. 4.

(2) OJ N° L 171, 29. 6. 1984, p. 1.

(1) OJ N° L 62, 7. 3. 1980, p. 5.

(2) OJ N° L 148, 28. 6. 1968, p. 13.

(1) OJ N° L 370, 30. 12. 1978, p. 72.

(2) OJ N° L 164, 24. 6. 1985, p. 6.

(3) OJ N° L 310, 21. 11. 1985, p. 9.

(4) OJ N° L 28, 5. 2. 1982, p. 38.

ANNEX I

LIST OF GOODS (PRODUCTION AS ACCESSORIES) REFERRED TO IN ARTICLE 2

All goods, which are not to be found in the compensating products, but which allow or facilitate the production of compensating products, even if they are entirely or partially used up in the process, with the exclusion of the following goods:

(a) fuels, energy sources other than those needed for the testing of compensating products or for the detection of faults in import goods needing repair;

(b)

lubricants other than those needed for the testing of compensating products, their adjustment or withdrawal;

(c)

equipment and tools.

ANNEX II

MODEL APPLICATION FOR INWARD PROCESSING AUTHORIZATION

APPLICATION FOR INWARD PROCESSING AUTHORIZATION

Date: ..............................

NB: The particulars should, if possible, be supplied in the order indicated. Information relating to goods/products must be given for every type of goods/products concerned.

Applicants shall be required to supply only such particulars as they may reasonably be expected to know.

1.

Name or business name and address:

a)

of the applicant: .

.

b)

of the operator (¹): .

.

2.

Which system it is intended to use (²):

a)

suspension system: .

.

b)

drawback system: .

.

3.

Special procedure applied for (²):

a)

equivalent compensation: .

.

.

b)

prior exportation: .

.

.

c)

triangular system: .

.

.

4.

Goods to be processed and grounds for application:

a)

trade and/or technical description (³): .

b)

indication of combined nomenclature classification (%): .

c)

estimated quantity (¹): .

d)

estimated value (¹): .

e)

origin ((): .

f)

code ()): .

5.

Compensating products and planned export operation:

a)

trade and/or technical description (³): .

.

.

b)

indication of combined nomenclature classification (%): .

.

c)

main compensating products: .

.

d)

planned export operation ( 7): .

.

6.

Rate of yield (§): .

.

.

7.

Nature of processing operation: .

.

.

8.

Place where the processing operation is to be carried out: .

9.

Estimated time needed for:

a)

carrying out the processing operations (¹*): .

b)

disposing of the compensating products (¹¹): .

c)

procurement and transport to the Community of non-Community goods (¹²): .

10.

Suggested method of identification: .

.

.

11.

Indicate the customs office through which it is planned to carry out formalities relating:

a)

to the import goods: .

b)

to the compensating products: .

12.

Intended duration of authorization (¹³): .

13.

Equivalent goods (¹%): .

.

14.

Importer authorized to enter goods for the arrangements (¹¹): .

.

15.

Reference to any authorization issued in the preceding three years in respect of goods identical to those covered by this application: .

.

Date: .

Signature: .

Notes (application)

¹(¹)

Where applicant and operator are not the same, give operator's name/business name and address.

¹(²)

Indicate the system and/or the special procedure intended to be used or applied for.

¹(³)

The description should be sufficiently clear and detailed to enable the customs authority to take a decision on the application, and in particular to decide in the light of information supplied whether the economic conditions can be regarded as fulfilled and whether, in cases where it is planned to use the equivalent compensation system, the conditions for use of that system are fulfilled.

¹(%)

For information: Only the four digit code need be given, unless an indication of the eight digit code is required to enable the authorization to be issued or for the proper conduct of the processing operations. The eight digit code must be given where it is planned to use the equivalent compensation system.

¹(¹)

This information is not required where the code indicated under (f) is one of the following codes: 6101, 6301, 6302, 6201 or 6107. Where they are supplied, they may refer to an import period.

¹(()

State country of origin.

¹())

Enter the appropriate code or other requisite information indicating why the essential interests of Community producers are not affected:

Where the operation concerned is one of the following:

-

job processing under a contract with a person established outside the Community (to be specified in the application):code 6201

-

operation of a non-commercial nature:code 6202

-

repair of goods, including overhaul or adjustment:code 6301

-

usual forms of handling listed in Directive 71/235/EEC (¹):code 6302

-

operations to be carried out successively in one or more Member States using import goods covered by an authorization issued by virtue of codes 6101 to 6107:code 6303

-

operation relating to goods whose value per type of goods and per calendar year does not exceed the amount indicated in Article 6:code 6400

Where the goods to which the application relates are not available in the Community:

-

either because they are not produced there:code 6101

-

or because they are not produced there in sufficient quantity:code 6102

-

or because Community suppliers are unable to make