Guidelines concerning PART II Title I Chapter 2 "End-use" of Commission Regulation (EEC) No 2454/93 of 2 July 1993 laying down provisions for the implementation of Council Regulation (EEC) No 2913/92 establishing the Community Customs Code(1)

(2002/C 207/02)

The references made in these guidelines refer to that chapter.

Preliminary remarks

As specified in the Commission's communication concerning a strategy for the customs union, and as requested by the representatives of the Member States customs administrations, guidelines should be drawn up for both administrations and economic operators to complement the process of simplification and modernisation of the customs procedures.

These guidelines do not constitute a legally binding act and are of an explanatory nature. Their purpose is to provide a tool to facilitate the correct application by the Member States of the modernised legal provisions on end-use.

CHAPTER 2

END-USE

Article 291(1)

(Application/scope of the end-use procedure)

This chapter applies where it is provided that goods released for free circulation with a favourable tariff treatment or at a reduced or zero rate of duty on account of their end-use are subject to end-use customs supervision.

The end-use procedure can be applied to favourable tariff treatments as well as to non-tariff measures with import duty implications under Articles 21 and 82 of the Code. However, the procedure does not impose itself automatically but applies only where and to the extent its application is provided for in Community or national provisions. E.g. agricultural, fishery or anti-dumping provisions could provide for the partial or total use of the end-use procedure.

These provisions do not apply where the import duty rate applicable under the end-use procedure to goods for a specific end-use is not lower than that which would otherwise be applicable to the goods.

Article 292(2)

(Application by using the model set out in Annex 67)

An applicant could apply to use more than one customs procedure (integrated authorisation). In this case, the goods could be placed under the different customs procedures concerned alternatively (e.g. inward processing - drawback system or end-use) or subsequently (e.g. firstly temporary importation and afterwards end-use).

Article 292(5)

(Single authorisation)

The application for a single authorisation is to be submitted to the customs authorities designated for the place where the applicant's main accounts are held facilitating audit-based controls of the procedure, and where at least part of the operations to be covered by the authorisation are conducted; or otherwise, where the goods should be assigned to the prescribed end-use.

The main accounts could be those accounts which are to be considered as the main accounts for customs purposes allowing the customs authorities to supervise and monitor the procedure. Consequently, the main accounts for the operator/applicant and for customs purposes may not necessarily be the same in each instance.

Furthermore, Article 292(5) should apply without prejudice to national rules determining the competent customs authorities.

Article 292(7)

(The decision on authorisation)

The applicant is informed of the decision to issue an authorisation, or the reasons why an application was rejected, within 30 days of the date the application was lodged or the date any requested outstanding or additional information is received by the customs authorities/administration. This period shall not apply in the case of a single authorisation unless prior consultation has been replaced by a simple notification in accordance with Article 292(6).

The date to be considered for the lodging of the application could be the date when the customs authorities received the application.

With regard to the calculation of the abovementioned 30 days period, Council Regulation (EEC, Euratom) No 1182/71(2) of 3 June 1971 determining the rules applicable to periods, dates and time limits applies.

Article 293(1)

(Authorisation by using the model set out in Annex 67)

The model set out in Annex 67 is designed to cover the customs procedures with economic impact and the end-use procedure.

(Persons to whom authorisation may be granted)

- In principle an end-use authorisation could be granted to any person established in the Community who fulfils the stipulated conditions (in particular Article 293(1)(b)), and always provided that efficient customs supervision is ensured. Authorisation could thus be granted not only to operators who partly or totally assign the goods to a prescribed end-use, but also to operators who purely transfer them to other authorised operators.

- The person to whom an authorisation will be granted (holder of an authorisation) takes over the obligation to assign the goods to the prescribed end-use. This obligation may be transferred to other persons in accordance with Article 82(2) of the Code and Article 296(2) to (6) or Article 297.

- The holder of an authorisation need not necessarily be the owner of the goods.

- The customs authorities may make the placing of goods under the end-use procedure conditional upon the provision of security.

Article 293(4)

(Validity of authorisation)

The period of validity may not exceed three years from the date the authorisation takes effect, except in cases where there are duly justified good reasons.

Goods could be entered for the procedure only during the period of validity of the authorisation. However, the end of the period within which the goods have to be assigned to the prescribed end-use could be after the period of validity has expired.

Article 294(3)

(Retroactive authorisation)

"Obvious negligence" may be attributed to a person, in particular where a person, or his/her representative, has failed to comply with the procedural requirements which in principle are a condition for granting an authorisation although that person could have been aware of their existence or has already been in a similar situation and was consequently aware of the legal requirements for obtaining such an authorisation.

In order to determine whether there is "obvious negligence" account must be taken in particular of the complexity of the provisions and the professional experience of, and the care taken by, the trader.

Example of a retroactive authorisation

On 1 February 2002, a firm imports non-Community goods, which are released for free circulation. Subsequently, the firm's customer goes bankrupt. However, the firm finds another customer who wishes to use the goods for a purpose benefiting from end-use and who has a relevant end-use authorisation.

In this case, a retroactive authorisation could exceptionally allow the goods to be "retroactively" covered by end-use.

Therefore, on 1 July 2002, the firm applies for retroactive authorisation. By virtue of Article 294(3), the customs authorities may issue such an authorisation taking effect on 1 February 2002.

The recourse to retroactive authorisation is however subordinated to a certain number of conditions:

- the provision should not apply as a general rule, but in exceptional circumstances only, and the operator has to prove the economic need,

- its application may not be related to attempted deception or to obvious negligence,

- the periods of validity specified in Article 293(4) must be respected,

- the applicant's accounts must confirm that all the requirements of the procedure can be deemed to be met and amongst others allow the procedure to be controlled,

- the situation of the goods has to be regularised by invalidating the declaration for free circulation and making a new declaration for free circulation with end-use, in accordance with Article 251(1)(c) first indent.

Article 300(1)(a)

(Completion of the end-use procedure)

Normally goods remain under customs supervision and conditionally liable to import duties until they are first assigned to the prescribed end-use. With the assignment to the prescribed end-use the procedure is completed. From this moment no possibility exists that a customs debt on importation could be incurred. The holder of an authorisation is then able to do as one wants with the goods. E.g. the holder could sell and transfer the goods to an operator who does not have an end-use authorisation.

However, with regard to goods which are suitable for repeated use, customs supervision may continue for a maximum period of two years after the date of first assignment. This prolongation of the period of customs supervision is allowed only where the customs authorities consider it appropriate in order to avoid abuse. This would be a case-by-case decision and could depend on the result of risk analysis. During the extended period of customs supervision the goods are conditionally liable to import duties and a customs debt could be incurred in accordance with Article 203 or 204 of the Code and the holder of the relevant end-use authorisation would be a debtor.

In order to ensure legal certainty relevant authorisations should clearly provide the details regarding the point at which customs supervision ends. This is not required where the goods are not suitable for repeated use and the end of the customs control is already apparent from the law (e.g. horses for slaughter).

Examples of when goods could be regarded as first assigned to the prescribed end-use are:

- goods intended for certain types of aircraft for the purpose of their construction, maintenance, conversion or equipping - when the aircraft is transferred to a third party, or is again made available to its owner after maintenance, repair or conversion,

- civil aircraft - once they have been registered in the public records specified for that purpose,

- vehicle parts used for assembly - when assembly of the vehicle is complete and the vehicle has been transferred to another person,

- goods intended for certain classes of vessel or for drilling or production platforms for the purpose of construction, repair, maintenance, conversion, fitting or equipping - when the vessel or platform is transferred to a third party, or again made available to its owner following maintenance, repair or conversion,

- goods supplied directly on board a vessel for the purpose of equipping the vessel - at the time of supply.

Note:

The first assignment to the prescribed end-use does not necessarily mean that the end-use procedure has been completed. This is only the case where the goods are not suitable for repeated use or where customs authorities have decided that the customs supervision shall not continue after the date of first assignment (see above).

(1) Consolidated versions of both regulations can be found in EUR-Lex:

http://europa.eu.int/eur-lex/en/consleg/reg/en_register_0210.html

(2) OJ L 124, 8.6.1971, p. 1.