Explanatory notes concerning protocol No 4 to the Europe Agreements — Explanatory note — Accounting segregation
Date: 2002-02-22
Institutions: European Commission
Subjects: customs regulations, management accounting, raw material, storage

C 49/8

EN

Official Journal of the European Communities

22.2.2002

EXPLANATORY NOTES CONCERNING PROTOCOL No 4 TO THE EUROPE AGREEMENTS

Explanatory note (cid:151) Accounting segregation

(2002/C 49/04)

Conditions for the use of (cid:145)accounting segregation(cid:146) for the management of stocks of materials used
in manufacture (referred to in Article 20(a)

the
Authorisation to use accounting segregation for
1.
management of stocks of materials used in manufacture shall
be granted to any manufacturer who submits to the customs
authorities a written request to this end and who satisfies all
the conditions for the grant of the authorisation.

2.
The applicant must demonstrate a need to use accounting
segregation on the grounds of unreasonable costs or imprac-
ticibility of holding stocks of materials physically separate
according to origin.

3.
The originating and non-originating materials must be of
the same kind and commercial quality and possess the same
technical and physical characteristics. It must not be possible to
distinguish materials one from another for origin purposes
once they are incorporated into the finished product.

4.
The use of the system of accounting segregation shall not
give rise to more products acquiring originating status that
would have been the case had the materials used in the manu-
facture been physically segregated.

5.

The accounting system must:

(cid:151) maintain a clear distinction between the quantities of orig-
inating and non-originating materials acquired, showing the
dates on which those materials were placed in stock and,
where necessary, the values of those materials;

accounts, in sufficient quantity to support the declaration of
originating status.

The stock balance to which reference is made in
6.1
paragraph 5 final
indent shall reflect both originating and
non-originating materials entered in the accounts. The stock
balance shall be debited for all finished products whether or
not those products are supplied with a declaration of prefer-
ential originating status.

the

6.2 Where products are supplied without a declaration of
preferential origin,
stock balance of non-originating
materials only may be debited for as long as a balance of
such materials is available to support such action. Where this
is not the case, the stock balance of originating materials shall
be debited.

6.3
The time at which the determination of origin is made
(i.e. time of manufacture or date of issue of proof of origin or
other declaration of origin) shall be agreed between the manu-
facturer and the customs authorities and be recorded in the
authorisation granted by the customs authorities.

At the time of

the application to commence using a
7.
the customs authorities
system of accounting segregation,
shall
to determine
the manufacturer’s
opening balances of originating and non-originating materials
that may be deemed to be held in stock.

examine

records

(cid:151) show the quantity of:

8.

The manufacturer must:

(a) originating and non-originating materials used and,
where necessary, the total value of those materials;

(b) finished products manufactured;

(c)

finished products supplied to all customers, identifying
separately,

(cid:151) accept full responsibility for the way the authorisation is
incorrect origin

used and for
statements or other misuses of the authorisation;

consequences of

the

(cid:151) make available to the custom authorities, when requested to
do so, all documents, records and accounts for any relevant
period.

(i) supplies to customers requiring evidence of prefer-
ential origin (including sales to customers requiring
evidence other than in the form of a proof of
origin), and

The customs authorities shall refuse authorisation to a
9.
manufacturer who does not offer all the guarantees that the
customs authorities deem necessary for the proper functioning
of the accounting segregation system.

(ii) supplies to customers not requiring such evidence;

(cid:151) be capable of demonstrating either at the time of manu-
facture or at the time of issue of any proof of origin (or
other evidence of originating status), that stocks of orig-
inating materials were deemed available, according to the

The customs authorities may withdraw an authorisation
10.
at any time. They must do so whenever the manufacturer no
longer satisfies the conditions or no longer offers the specified
guarantees.
invalidate the
proofs of origin or other documents justifying origin that
have been incorrectly issued.

In this case the authorities shall