CELEX: 51973PC0830
Language: en
Date: 1973-05-30 00:00:00
Title: RECOMMENDATION FOR A COUNCIL DECISION on the negotiation of an agreement concerning two draft annexes to the international Convention for the simplification and harmonisation of customs procedures and in respect of temporary admission for inward processing and warehousing for inward processing (submitted to the Council by the Commission)

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COM (73) 830
Vol. 1973/0156
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 ---pagebreak--- COMMISSION OP THE EUROPEAN COMMUNITIES
                                                           COM(73)830 final
                                                           Brussels . 30 May 1973
                      RECOMMENDATION FOR A COUNCIL DECISION
                       on the negotiation of an agreement
               concerning two draft annexes to the international
             Convention for the simplification and harmonisation of
                      customs procedures and in respect of
                 temporary admission for inward processing and
                       warehousing for inward processing
                    (submitted to the Council "by the Commission)
 COMC73 ) 830 final
 ---pagebreak---                                 Recommendation
                            for a Council Decision
                  relating to the negotiation of an agreement
                      concerning two draft annexes to the •
               international Convention for the simplification
                  and harmonisation of customs procedures and
               in respect of temporary admission for processing
                ( inward processing ) and warehousing for inward
                                  processmg
EXPLANATORY STATEMENT
1.  I ntroduction
   '1.1    The Customs Cooperation Council (C .C .C . ) has prepared a draft
           international Convention for the simplification and harmonisation
           of customs procedures , which will be submitted for adoption at
           its meeting of 16 to 22'May 1973 .
           With regard to the Community , this Convention has been made
           the subject of a Recommendation for a Council Decision ( doc .
           COM ( 73 ) k60 final of 28 March 1973, E/9?7/73r"^ COKER 1^6 ) of 12'
         ' April 1973 ).
           The Convention opens the possibility , from the time of its
           signature , of specifying the annex or the annexes, which the
           contracting parties may undertake to apply ( Article 11 paragraph
           4 of the Convention ).
        .  Further , for the purposes of voting when required at the C.C.C. ,
           each annex is taken as constituting a separate convention
           ( Article 6 of the Convention ).
 ---pagebreak---                                        - 2 -
     1.2 • The Permanent Technical Committee of the C.C.C. has decided
             to write into its programme of future work the draft annex
             concerning :
             - temporary admission for inward processing ( doc . 19.503 of
             6 April 1973 » shown at Annex I ),
             - warehousing for inward processing ( doc . 19.501* of 10 April 1973 ,
             shown at Annex II ).
             The Secretariat of the C.C . e . has invited Member States as well
             as non-Members and international organisations concerned , to
             submit any observations and suggestions which they may have
             on the draft annex
             • before 15 June 1973 on matters affecting temporary admission
             for inward processing ,
             - before 29 June 1973 °n matters affecting warehousing for inward
             processing .
     1 . 3 . The Commission has examined these drafts with representatives
             of Member States at a meeting of the ad hoc Group of the
             Committee on Inward Processing with a view to preparing a
             common stand to be' tiaksn, to be conveyed to the Secretariat of
             the Customs Cooperation Council within th,e time limit laid down .
                          \
2.   The main features of the drafts
   ■ 2.1 . Temporary admission for inward processing
             The work on this draft by the Secretariat of the C.C.G. ^as
             taken into account , inter alia , the Council Directive of k March
             1S69 » concerning the harmonisation of provisions laid down by
             law , regulation or administrative action ( EEC 69/73 ) in respect
             of the procedure for inward processing .
 ---pagebreak---                                  - 3 -
        The draft is based on the following points :
        - the legislation of most of the States contains provisions
        allowing conditional relief from import duties and taxes to
        be granted for goods which are intended to be re-exported after
        having undergone specified manufacturing , processing or repair ,
        - the principal aim of this Customs procedure is ta make it
        possible for natienal undertakings to offer their products or
        their services on foreign markets at competitive prices and
        thereby help to provide more employment opportunities for
        national labour ,
        - this procedure may be subject to the condition that the
        proposed operations shall be beneficial to the national economy
        and shall not conflict with".', the interests of national producers
        of identical or similar goods ,
        - as a general ruXe , the procedure involves total conditional
        relief from import " duties and taxes .
2 « 2 . Warehousing for inward processing
        This draft is devoted to the subject of temporary admission for
        inward processing : it is part of the field of application of
        Directive ( ESC )    69/73 .
      • The draft is based on the following points :
        - the legislation of certain countries contains provisions for
        persons to be authorised to import goods under terms of condi­
        tional relief from import duties and taxes , the conditions
        being  that :
        . operations on such goods shall be carried out in premises
        designated by the Customs authorities and put under their control ,
        and
        . the resulting products shall be re-exported in their entirety
        or in part ,
        - the provisions relating to temporary admission for inward
        processing are in general applicable to the procedure for
        warehousing for inward processing .
 ---pagebreak---                                     - k -
          This latter procedure differs from the former by the special           |
          facilities which the authorities ■ accord on' ' account of 1 t^ie
                                                                         ;
                                                                            more !l
          favourable conditions under which customs control may be exercise!
3•   Scope for Community action in the negotiation of the drafts .
     The main characteristics of these drafts ( point 2 above ) give them
     perforce . a bearing on those Customs procedures which rank among the 1
     principal instruments of commercial policy .   Consequently , when these
     procedures are the subject of international agreements , they become
     both tariff and commercial agreements which are part of the common
     commercial policy , by virtue of Article 113 of the EEC Treaty .
     The nature of Articles 113 and 11 ^ of the EEC Treaty is such that
     only the Community has the competence to negotiate and conclude these
     agreements .
     Article 113 paragraph 3 of the EEC Treaty stipulates that if agreements
     on which it has a bearing need to be negotiated with third countries ,
     the Commission shall submit its recommendations to the Council which
     shall authorise the opening of the necessary negotiations .
k»   Conclusion .
     The Commission recommends that the Council , by virtue of Article 113
   , of the EEC Treaty , should , having regard to Directive EEC N° 69/73 «
     authorise it to negotiate the draft annexes at the international
     Convention for the simplification and harmonisation of Customs proce­
     dures and in respect of :
     - temporary admission for inward processing ,
     - warehousing for inward processing
                                             \
 ---pagebreak---                              Recommendation
                                  for a
                            Council Decision
                   on the negotiation of an agreement
           concerning two draft annexes to the international
        Convention for the simplification and harmonisation of
                           customs procedures
           and in respect of temporary admission for inward
           processing and warehousing for inward processing
The Council of the European Communities ,
HAVING REGARD to the Treaty establishing the European Economic Community ,
and in particular Article 113 thereof ;
HAVING REGARD to the Recommendation of the Commission ;
WHEREAS the conclusion of an agreement concerning two draft annexes to
the International Convention for the simplification and harmonisation
of customs procedures and in respect of temporary admission for inward
processing and warehousing for inward processing can
efficiently contribute to the development of international trade , and
in particular international commerce ;
WHEREAS the aforesaid agreement has a bearing on the common customs
legislation , in particular in the matter of the Common Customs Tariff ;
whereas it is necessary to have regard to the proper requirements of a
Customs Union ; whereas it is agreed that the Community negotiate and
conclude this agreement ;
HAS DECIDED :
                               Article 1
    The Commission is authorised to conduct negotiations with the
Customs Co-operation Council in order to conclude an agreement Concerning
two draft annexes to the international Convention for the simplification
and harmonisation of customs procedures , and in respect of temporary
admission for inward processing and warehousing for inward processing ,
 ---pagebreak---     The Commission shall conduct these negotiations in consultation
with the Special Committee , as provided for in Article 113 of the
Treaty , which shall assist the Commission in that task .
Done at Brussels                             For the Council
                                              The President ,
 ---pagebreak---                                                         Annex    I«
                                                               i
     E. 6 - DRAFT ANNEX CONCERNING TEMPORARY ADMISSION
                   FOR PROCESSING ( INWARD PROCESSING )
                                 !              ·           ,» · '    '
INTRODUCTION
                                                                          S ' '
        The national legislations of most countries contain provisions
                                      . >   i .
allowing conditional relief from import duties -and taxes to be
granted in respect of goods that are to be re-exported after having
undergone specified manufacturing , processing or repair . The
Customs procedure which reflects these provisions is that of
Temporary admission for processing ( inward processing ), hereinafter
called " inward processing ".
                '1  '■>
        The' main purpose of this Customs procedure is to - make it
possible for national enterprises to offer their products or
                        »                                           ,
services on foreign markets at competitive prices and thereby to
help to provide more employment opportunities for national labour .
                           4
                '                  *    ' i :
        However ^ - admission for inward processing may be made subject
to the condition that the proposed ; operations shall be beneficial
to the national ' economy and shall , not conflict with the interests
of national producers of goods identical or similar to those in
                             4»
respect of which admission is requested .
                  ! »
        As a general rule , admission , for inward processing involves
total conditional relief from import duties and taxes . However ,
import duties and taxes may be charged on waste deriving from7 the
processing or manufacturing of the goods .                                      >
        National legislations usually require that the goods exported
shal ^ ha^e been obtained from the . imported goods ( setting-off with !
the same goo'ds ),.
                                                                        1.
 ---pagebreak--- Annex I >
        In some cases , however , authority may be given for the use
of goods equivalent to those admitted for inward processing '
                                           >                        »
( setting-off with equivalent goods ).           -
                  *
        Within the context of inward processing , exemption from
import duties and taxes may be granted in respect of goods used -
                      n n             • J!    ;1
up during the production' of the exported goods without actually ;
being contained in them *
        A special Customs procedure may be applied in respect of
foreign goods which are to be re-exported , in whole or in part ,
after having undergone specified manufacture , processing or
                                                                      *
repair and are 1 utilized in premises' approved by the Customs and
placed under their supervision .     This special Customs procedure ,
which is closely delated to the temporary admission ( inward
processing ) procedure , 'forms the subject of the Annex concerning
warehousing for " inward processing . 1 '
                                                   *
DEFINITIONS         ■                        . .     • "
             For the purposes of this Annex :                   /j
( a ) The term " inward processing " means the Customs procedure under
      which certain goods can be brought into a Customs territory
      conditionally relieved from payment of import duties and
      taxes ; such goods must be imported for a specific purpose
      and must be intended for re-exportation within a specific
      period after having undergone specified manufacturing ,
      processing , or repair ;
                »
              ,7
( b ) The term " import duties and taxes " means the Customs duties
      and all other duties , taxes , fees or other charges which are
      collected on or in connexion with the importation of goods , but
      not including fees and charges which are limited in amount
      to the approximate cost of services rendered ;
 ---pagebreak---                                                         Annex I
 ( c ) The term " compensating products " means the products obtained
       as a result of the manufacturing , processing or repair 'of the
       goods admitted with conditional relief from import " duties and
       taxes ;
( d ) The term " Customs control " means the measures applied to
       ensure compliance with the laws and regulations which the
       Customs are responsible for enforcing ;
( e ) The term " security " means that which ensures to the satisfac­
       tion of the .Customs, that an obligation to the Customs will be
       fulfilled . Security is described as " general " when it ensures
       that the obligations arising from several operations will be
       fulfilled ;   *                '/
( f ) The term " person " means both natural and legal persons i unless
       the context 'otherwise requires .
                                ' '      1    *   •
PRINCIPLE                                 ' '
                 : r                      ! y
                                                              Standard
         Inward processing shall be governed by the provisions of '
this Annex .     ;
FIELD OF APPLICATION                •    . -
2»             •                                              Standard
         National legislation shall enumerate the cases in which
                                         f  -   •    •            '
admission for inward processing may be granted and shall lay down
the requirements which must be met .
                                                                    3.
 ---pagebreak---  Annex I
 Notes .                             : .   . .
                                                                 <
  1.  :  The cases eligible for inward processing may be enumerated
  in the form of exhaustive lists and /or in general terms .
  2.     The right to import goods for inward processing may be made
  subject to then condition that the proposed processing operations
  are regarded by the competent authorities as beneficial to the
 national economy .
  3.     The right to import goods for inward processing may be      t
  reserved to persons established in the Customs territory. "      /
  3.                                                            Standard
             /                           *
         Goods admitted for inward processing shall be afforded
  total conditional relief from import duties and taxes . However ,
  waste deriving frcJm the processing or manufacturing of goods
  admitted for inward processing that is not re-exported or treated
  in such a way as to render it commercially valueless may be
                                               s
  assessed to ambort duties and taxes'-.
                                 *
                 r ■' '
  Notes
                             ~                        .i
  1.     National ; legislation may provide that waste having commercial
 value shall be assessed either on the basis of its own tariff
  description or on the basis of the tariff description of the goods
• from which it is derived .           .     .
■2 .     National legislation, may provide that , import duties and
  taxes shall not be charged on waste within certain percentage •
 limits or on waste that is irrecoverable or unusable .
 ---pagebreak---                                                                          Annex !
4.                                   '   '         . '                            Standard
       Admission for inward processing shall not be limited to . goods      « «   •
imported directly from abroad but shall also be granted for goods
ex Customs transit , ex Customs warehouse or from a free port or a
free zone .                                                                                <•
5.                                         -                    • Recommended Practice '
       Admission for inward processing should be granted without
regard to the country of origin of the goods , the country, whence
they arrived or .their country of destination .
                          .    '              i :      ■■ ■
6.   •                                         '     " '■         Recommended Practice
       Wh6n the goods are to be used in the performance of a contract
to make up work from materials supplied , entered into with a person
established abroad , admission for inward processing should not be
made conditional upon non-availability in the Customs territory of
                                 *                          *                        - <
goods equal in quality and value , ,to the imported goods .
                                   t   »                      *
7.            '               „                                                     Standard
                  L? '                       . n
       Where the right 'to import goods for inward processing is
                                             K ..                               .
reserved to persons established in the Customs territory , it shall
not be required that such persons shall be the owners of the
imported goods .
8.                                                -     <         Recommended Practice -
       The identifiability of the imported goods in the compensating
products should not be imposed as an essential condition of
admission for inward processing .
   /    «
9.        •     *                                                 Recommended Practice
            • •»            -                                                                 ■
       Products such as catalysts , 1 accelerators or retarders of
chemical reactions which , being used to obtain compensating
products , disappear entirely or partially during such use without
 ---pagebreak--- Annex T
actually being contained in those products , should be exempted
from import duties and taxes to the extent that the resultant-
compensating products are exported . This exemption from import.'
duties and taxes shall not , however , extend to the use of sources
of energy , lubricants , equipment or tools .
                  η λ                 .. Γη
ADMISSION OF GOODS FOR INWARD PROCESSING
( a ) Formalities prior to admission for inward processing
10 .                                              .                   Standard
         National legislation shall specify the cases in which prior
authority is required for admission, for " inward processing and the
authorities, empowered to grant such authority .
11 .                        *                            Recommended Practice
         Persons who carry on large-scale and .continuous inward
                              ■ *
processing operations should be granted a general authorization
                  η    η                '
covering such operations .              ■:
12 .                       '      .        •/                         Standard
         Where goods admitted for inward processing are to undergo
manufacturing or processing , the Customs authorities shall fix
the rate of yieLd of the operation by reference to the actual !
                   is
conditions under1 which it is effected .            The description , quality
                        V-                    !
and quantity of the various compensating products shall be
specified upon fixing that rate . ,
13 .               !                .   ri      ,        Recommended Practice
        ,Wher£ the inward processing operations :
                   t ■:                                                     •
- relate to . goods whose characteristics remain reasonably constant
- are customarily carried out under . clearly defined technical               ;;
   conditions , andi '
                                            .
- give compensating products of constant quality ,
 ---pagebreak---                                                             Annex I
the Customs authorities shauld lay down Standard rates of yield
applicable to the operations .               '                    .    (
(b) Declaration for_i.nward_2rocessi.n2 -                        ' /
14 .                                                                Standard
      •                                                                      " «. r'
        National legislation shall specify the conditions under
                    _ „                   .η π
which goods for inward processing shall be produced at the competent
Customs office and 'a Goods declaration shall be lodged .
15 .                                                                Standard
                                               m*
        The national - forms -used on admission for inward processing .
shall be harmonized with those used for the Goods declaration for
home use .                •     .
            *
( c ) Securit ^             ^                       ■
16 .                          '                                     Standard
        The forms ;, in which security is to be provided on admission
for inward processing shall be laid, down in national legislation
or determined by the Customs ^ authorities in accordance with
national legislation .              . .
17 .                              •               .   Recommended Practice
        The choice between the various acceptable forms of security
should be left to the declarant .
18 .                                                                Standard
        The Customs authorities shall , in accordance with national
legislation , determine the amount in which security is to be ■
provided when goods are admitted for inward processing .
                » -
                /   * • »
19 .                    •'              *    "        Recommended Practice
        The amount of the security to be provided when goods are
admitted for inward processing should not exceed the amount of the
import duties and taxes from which the goods are conditionally
relieved .                                                               _
                                                                         / .
                              «
 ---pagebreak--- Annex I          ι
                                                             /
Note                           '
        This Recommended Practice does not. prevent the amount of •
the security from being determined on the basis of a single rate
where the goods fall in a wide range of tariff headings .
^0.                nn                                                      Standard
        Persons who regularly use the inward processing procedure
at one or more Customs offices in' a given Customs territory shall
be authorized to provide gpneral security .
                         i *
21 .                                                           Recommended Practice
        Customs authorities should waive the requirement for
             *                                             ♦
security where they . are satisfied that payment of any sums that .
                   Γ) Ί                  ·          ί ;
might fall due can be ensured by other means .
( d ) Examination of the cjoods ■
22 .                i ,,           ;                fi         Recommended Practice
        At the request of the. importer , and for reasons deemed to be
valid , th <* Customs authorities ' should , so far as possible , allow
goods that are ,to be admitted for inward processing to be examined
                                 ^   ■           ,
                                             ' »
on private premises , the expenses entailed by such examination
                                       ι   ·
being borne by ,the . importer'. - ^                 •
( e ) Identi f icationjneasures
23 .      ..   '    '                              ;m                      Standard
                             '        •'      .        • '
        The requirements relating to the identification of goods
admitted for inward processing shall be laid down by the Customs
authorities , due account being taken of the nature of the goods ,
the magnitude of the interes.ts irlvolved and the need to avoid
deteriorating the goods .
 ---pagebreak---                                                         Annex I
Note
       For the identification of goods admitted for inward -• .
processing , the Customs authorities may rely on foreign . seals-
affixed to the goods , on marks , numbers or other indications "
permanently affixed to them , on the description of the goods or
scale plans or photographs , or have recourse to sampling ,. to the'
               « «                ,  ■  n
affixing of Customs marks ( seals , .stamps , perforations , etc .).
The Customs authorities may also have recourse to the importers'
stock accounts .                            -
STAY OP THE GOODS IN THE CUSTOMS TERRITORY
24 .                                          1               Standard
         /                      *
       The time limit for. inward processing shall be fixed , in. each
case , by reference to the time necessary to complete the processing
operations , up to the maximum period , if any , laid down in national
              ' i *•
legislation ..        ,
25 .              u           .     ^             Recommonded Practice
              EL            *          t  '
       At the request of the person concerned , and for reasons
deemed to be valid , the Customs authorities should extend the
period initially fixedT
26 .             '                                            Standard
       The persons concerned shall keep records or stock accounts
from which the use of the goods admitted for inward processing
can be checked .
                          *                     *
27 .                                                          Standard
       Persons- accorded inward processing facilities shall allow
the Customs authorities t<5 check on their premises , at any time ,
the goods admitted for inward processing and also the
compensating products and the products in course . of processing .
 ---pagebreak--- Annex I
28 .                                                                 Recommended Practice
         The Customs authorities should allow part of the proces'sing
operations provided for to be carried out by a person' other' than                     . i
the person accorded inward processing facilities , without the
latter having to transfer ownership of the goods admitted for
inward processing but with the condition that he shall remain
liable to the Customs for the entire * duration of ' the operations .
TERMINATION OF INWARD PROCESSING                                 '               -
29 .                     -,           •                                         Standard
         National legislation shall specify the conditions under
which the compensating products shall be produced at the
                  ; ι;                                   .
competent Customs office and a Goods declaration shall be lodged .
                      «                •
                  ' ' «                                ', 1
Note                     ^                                  ■■
         National legislation may prescribe that the Goods declara-
                  ^          . .         . .      -    A *■
tion shall contain the particulars needed to permit discharge of
                  II'                                              *
the inward processing . declaration with respect to the goods that
                                             *
have been utilized .
                     1             '
( a ) Re-exgortation                 "         ■
30 .               ■t ■                          +                              Standard
                   . i     '                           V: ;
         Provision shall be made to permit compensating goods to be
exported through a Customs office other than that through which
the goods admitted for inward processing were imported .
                                          *            i
31 .                                                           •                Standard
                                 '                  '• î.i U
        /Provision shall be made to permit inward processing to be
terminated by," exportation of^the compensating products in one or
more consignments ( setting-off with identical goods ).
10 .
                       I
 ---pagebreak---                                                                Annex I
                                                      T?r>rornmended Practice
32 .
             Provision should be made for termination o£ inward processing
by exportation of the products from the treatment of goods
identical in description , quality and technical characteristics
to those admitted for inward processing ( setting-off with equivalent
         i \    ' •' - '                   n π
                                         . π  n
QOOOS      ) •              •
                                                      Recommended Practice
             At the request of . the exporter , and for reasons deemed to be
valid , the Customs authorities should , so far as possible , allow .
compensating products for re-exportation to be examined on private
premises , the expenses entailed by such examination being borne
by the exporter .
 ^.
 j4 *
                         ■. .                 "        Recommended Practice
                                                       -
              Where , for reasons deemed to be valid , the goods admitted
 for inward processing cannot undergo the intended manufacturing ,
 processing or "repair , the Customs authorities should authorize
 their re-exportation in the, state as imported , with termination
 of inward processing . - •                    ,
                                "                                      Standard
 •3 «) •
               Provision shall be mad-e for terminating inward processing
 by placing the compensating products in a free port or free zone .
                                             . ι
  ( b ) Other method s_of_disgo sal
  .,                              . •                                  Standard
  36 *                                                                    "
               Provision shall be made for . terminating inward processing
  by deposit of the compensating products in a Customs warehouse .
  with a view" to subsequent exportation or other authorized disposal ..
                                                                            11 .
 ---pagebreak--- Annex I
                                                                    v
37 .                                                    Recommended Practico
          Provision should be made for terminating inward processing
by placing the goods under a Customs transit procedure with a yiew
to their subsequent exportation .                                 ,           '
38 .                                              r     Recommended Practice
                     η Π                Ν. Γ.       ·
          Provision should be made for terminating inward processing
by declaring the compensating products for home use , subject to
compliance with the conditions and formalities applicable in such
case .  .
39 *                                                    Recommended Practice
          Where , for reasons deemed to be valid , the goods admitted
for inward processing cannot undergo the intended manufacturing ,
                          c„                 -
processing or repair , the Customs authorities should authorize
                     9 L >
their declaration for home use , subject to compliance with the
conditions and formalities applicable in such case .
                      n 1 1              •
                . . r'                         \      '               Standard
                      [-          '        • r
          National legislation shall specify the point in time to be
                      . :                     Α
taken into consideration for the purpose of determining the value
and quantity of goods allowed to be declared for home use and
also the rates o.f the import duties and taxes applicable to i;hem .
Note                   5-             .       k-
     ■■                                         i
                       :: 'î                 c
1.        National legislation may , in - particular , provide that the
                            >                 » ,
amount of the import duties and taxes applicable to the compensating
                       i. '
products shall not exceed the amount of the import duties and
taxes applicable to the goods admitted for inward processing and ■
        /     * ■
utilized .         ,
12 .
 ---pagebreak---                                                         Annex I
2.     National legislation may provide that in the event of
declaration for home use of compensating products which , during
processing , have been temporarily sent - abroad for- suppleiriehtary
processing , the import duties and taxes shall be , chargeable only
on the basis of the value of the goods initially used , increased
by the cost of the processing operations carried out abroad .
41 .                                              Recommendod Practice
       Provision should be - made for terminating inward processing
by transfer of ownership of the compensating products to a person'
who intends to re-export them after having subjected them to a
processing operation , provided that the' latter person assumes the
obligations of the " importer and that a new inward processing ...
authorization can be granted .
42 .                '                     ,-i . . Recommonded Practice
                           »          ... ^
       Provision - should be mad'e for terminating inward processing
in respect of goods lost as a consequence^ of natural causes , such
as leakage or drying out , provided that such loss is duly
established to the satisfaction of the Customs authorities .
Note ,                .  '
       National 'legislation may lay down Standard loss percentages
for specified categories of goods admitted for inward processing .
43 .         •                                                Standard
       Provision shall be rrtade for inward processing to be
terminated where , at the . request Of the person concerned , the
good ^ ar^ abandoned to^ the Revenue or destroyed or rendered
commercially' valueless under Customs control,' as the Customs
authorities may decide .     Such abandonment or destruction shall
not entail any cost to the Revenue .--,
                                                                  13 .
 ---pagebreak--- Annex I •
44 .                                                          Standard
                                             • »                  '
        Goods admitted for inward processing , and compensating ;
products , which are destroyed or irrecoverably lost by accident
or force majeure shall not be subjected to import duties and
taxes , provided that such destruction or loss is duly established
to the satisfaction of the. Customs kifthorities .
        Any waste or scrap remaining after destruction shall be
liable , if taken into home use , to the import duties and taxes
that would be applicable to such waste, or scrap imported in that
state .
DISCHARGE OR SECURITY                ;
45 .              , , *   -                                   Standard
                        y
        Any security furnished shall be discharged as soon as
possible after inward processing has 'been terminated .
46 .          • .                                Recomm<*nded Practice
        If security has been . given in the form of a cash deposit , .
provision should be made for it to be repaid at the office of
re-exportation , even if the goods for inward processing were not .
imported through , that office .   *
INFORMATION CONCERNING TEMPORARY ADMISSION
47 .                                                          Standard
                                       ι-» κ
        The Customs authorities shall ensure that all relevant
information regarding the inward processing procedure is readily
available to any person interested .
14 .
 ---pagebreak---                                                         Annex II .
           E. 7 - DRAFT ANNEX CONCERNING WAREHOUSING
                        FOR    INWARD      PROCESSING
                                                           I < '
INTRODUCTION
        The national legislations of a number of countries contain
provisions under which persons may be authorized to import goods
with conditional relief from import duties and taxes , provided
that the goods are used in establishments approved by the Customs ,,         ι
and placed under their supervision and that the products obtained ;
are to be re-exported - in whole or in part .                              ■
        The Customs procedure which reflects these provisions is
the warehousing for inward processing procedure .
        The provisions of the Annex concerning temporary admission .
for processing' ( inward processing ) apply , in general , to the
warehousing .for inward processin-g procedure . This latter
               . , ,                   ' 1 '
procedure differs , however , frorp the former in that special
facilities are generally accorded by the Customs authorities
becausfe Customs control is more easily ensured .
        Admission to - the , warehousing for inward processing /
procedure may , however , be made subject to the condition /that
the establishment in which the processing operations are to be
carried out shall be situated in a particular locality or area .
The volume of the imported goods to be used may also be taken
into consideration .          "     , v :     .
DEFINITIONS '
       «
                                                                     ι
        For the purposes of this ; Annex :
         0
( a ) the term " warehousing for inward processing procedure " means
      the Customs procedure under / which certain gpods can be brought
      into a Customs territory conditionally relieved from payment
                                                                       !..
 ---pagebreak--- Annex II        . .
       of import duties and taxes ; ■ such goods must be imported for
                                                                   «
       a specific purpose and must be intended for re-exportation
       within a specific period after having undergone specified ,,
       manufacturing , processing or repair in establishments •
       approved by the Customs and placed under their control ( inward. r
       processing"warehouses ) ;       * !1 "         _        ' /
( b ) the term " import duties and taxes " means the Customs duties
       and all other duties , taxes , fees or other charges which are
       collected on or in connection wi.th " the importation of goods ,
       but not including fees and charges which are limited in amount
       to the approximate cost of services rendered ;-
( c ) the term " compensating products " means the products obtained
       as a result of the manufacturing , processing or repair of the
       goods admitted with conditional relief from import duties and
       taxes ;      ,     ,              ' .
( d ) the term "Customs control " means the -measures applied to ensure
       compliance with the laws - and regulations which the Customs are
       responsible for enforcing ;
( e ) the term " security " m^ans that which ensures to the satisfaction
       of the Customs that an obiigation to the Customs will be ful­
       filled . Security is described as " general " when it ensures
       that the obligations arising from several operations will be
       fulfilled ;                  - *r
                                       » I'
( f ) the term " person " means both natural and legal persons , unless
     - the context otherwise requires .
       /    «
2.
 ---pagebreak---                                                         Annex' II ..
PRINCIPLE                    ,                                         ... •
1.                                                                Standard
        The warehousing for -inward processing procedure shall be
governed by the provisions of this . Annex .                               v
              * n                   ■ > r. - y.   , -     ■■,■■■
2.                               .                                Standard
        The provisions of the Annex concerning temporary admission
for processing ( inward processing ) shall apply to goods under
the warehousing- for inward processing procedure provided that
the Contracting Party accepting the present Annex has under­
taken to apply the Annex concerning temporary admission for
processing ( inward processing ).                                      .     '
ESTABLISHMENT OF INWARD PROCESSING WAREHOUSES ••                .   "
3.            • ]
                      ,        !
                                   ■ • ,|             •  ■ . ■ • standard
        National legislation shall provide for inward processing
warehouses , for the sole use of persons who regularly place goods
                            é                 • •
under an inward processing procedure .
4.                      "                                    '    Standard
        The requirements witlt respect to the geographical location
of inward processing warehouses, and their equipment shall be
laid down by the Customs authoriti-es .
Noter,
                •1        .            ri  rs
1.      The Customs authorities may designate the localities or
areas in which the establishment of warehouses may bo . approved .
   /    «                        ......                    ;
2.      The persons concerned may be required to furnish proof
that , the technical equipment of 7 the establishment is adequate -
for the contemplated processing operations .
                                                                         3.
 ---pagebreak--- Annex     II
INSTRUMENTS OF APPROVAL
5.                                           . ■                            Standard
         The Customs authorities shall specify in the instrument of
approval of an inward processing warehouse :
Ca ) the goods that may be used there ;
( b ) the nature of the authorized processing operations ;
( c ) the duration of validity of the authorization ;
( d ) the person ( s ) responsible for the payment of any import duties
      and taxes chargeable on goods under this procedure .
6.             Μ
                                           '     Recommended Practa. ce
                                                 ΙΜ·.··-·· Ί Ι····!!·!··     II II   Η II
         The instrument of approval of an inward processing warehouse
should not place any limit on the quantities of goods that may be
imported under this procedure .
                            t
7.           .    ' '                            Recommenclod Practice .
                                                                  111      "       11     "
         The Customs authorities should extend the initial period of
validity of the instrument of approval of an inward processing
warehouse at the request ^of the person concerned , provided that
the conditions of approval continue to be fulfilled .
8.                                                                       -   Standard
         The Customs authorities , shall lay down the arrangements for
the Customs control in inward processing warehouses .
                               _ *
Note
       / For* the purposes of control ^ the Customs authorities may ,
in particular :
- keep the premises under permanent or intermittent supervision ;
 ---pagebreak---                                                              Annex IX.
 - keep ( or require to be kept by the person concerned ) accounts
     of goods admitted under the procedure , using either special
     registers or the declarations ;            f
                                                                       . i
 - take stock from time to time of the goods admitted under the
     procedure , whether in the state as imported , undergoing             ^ r.
    processing " or in the form of compensating products .
 ADMISSION OF GOODS TO INWARD PROCESSING WAREHOUSE
 ( a ) Dec 1 a rat ion _f or warehousing for inward processing
                                                   M
 9.                                                              Standard
         Provision shall be made for declarations in respect of
 goods that are to be admitted under the warehousing for inward
■processing procedure to be centralized at the Customs office
 within whose jurisdiction the inward processing warehouse is
 located .                   ,
                    :
                                          1 . M
 ( b ) Securit^                        .                 „
                                   *
 10 .    • *      „^                              . . ..         Standard
         The Customs authorities shall waive security where the
 goods - are placed in an inward processing warehouse which is
 under adequate Customs supervision .
 11 .                                         •                  Standard
         Where security is required on admission of goods under the
warehousing for inward processing procedure , the Customs
authorities shall allow the persons concerned to provide a general
 security .                              ' "
 ---pagebreak--- Annex    II
                                                                    ι
( c ) Examination                     ' •
12 .                                                             ' Standard
        Goods to be admitted under the warehousing for inward
processing procedure shall be examined on ; the premises of the             sr
person concerned .       »
                              • ■ •                      •
Note
        Payment by the person concerned of the expenses entailed by
such examination may be waived .
( d ) Identification measures             ' . - .
13 .                                                ■ Recommended Practice
        For the identification of goods placed in an inward ' *
processing wairehduse , the Customs authorities should be content
with the particulars contained in' the stock accounts of the person
concerned .   . r'
STAY OP THE GOODS IN INWARD PROCESSING WAREHOUSE
                   K                ' V"                              '
14 .                                                               Standard
        The Customs authorities' may require that the stock; accounts
of the person concerned shall at all times show the following .
particulars for each category of goods placed in an inward
processing warehouse : quantities not yet used , quantities in
course of processing and quantities which have been incorporated
in compensating products . .     ;    ^           , < •,
6.
 ---pagebreak---                                                           Annex   II
REMOVAL FROM INWARD PROCESSING WAREHOUSE
                                  nmmMaamMMMaMMaaaiMaMMMm
( a ) Declaration upon removal f rom_inward ££2£essin2_warehouse
15 »                                                            Standard
        Provision shall be made for Goods declarations for removal
from inward processing warehouse to be centralised at the
Customs office within whose jurisdiction the inward processing
warehouse is located .
( b ) Examination'
                          t
16 .            « «     *            ,
                                         ^ i,
                                            r> r» "
                                                                Standard
          /
        The compensating products declared for removal from
inward proc§§s"ing warehouse shail be examined on the premises
of the person doncerned .
                            t
                                /
Note    ,   .   n                        " C
        Payment by the person concerned of the expenses entailed
                              *
by such examihation may be waived ,
( c ) Clearance for hom£" use
17 .               '                                            Standard
        Provision shall be made for terminating the warehousing
for inward processing procedure by the clearance for home use
of a specified percentage of compensating products .
Note
    /           .; •                   ''' 11                   •
        This percentage may be laid down in the instrument of
              *                           .
approval of the inward processing warehouse .
                n  • ••                -r ,    i
                                                                      7.
 ---pagebreak--- Annex II ;
INFORMATION CONCERNING THE WAREHOUSING FOR INWARD PROCESSING .
PROCEDURE
                                                            ' 1 '  ►
             .     *                                              i •
18 .       '                           1                   Standard
      The Customs authorities shall ensure that all relevant
'              ' r, «               .M n
information regarding the - warehousmgL for inward .processing
procedure is readily available to any person interested .