Exiting The European Union Citation, commencement, extent and application 1 1 These Regulations may be cited as the Customs Tariff (Preferential Trade Arrangements) (EU Exit) Regulations 2020 and come into force on the appointed day. 2 These Regulations extend to the United Kingdom. 3 These Regulations apply to all goods— a that are imported into the United Kingdom in respect of which a liability to a charge to import duty is incurred under the Act; and b in respect of which a claim is made by the importer or the importer's representative for a preferential rate of import duty to be applied to the goods under the terms of an Agreement. 4 Schedule 1 has effect for the purposes of specifying the Agreements and associated reference documents in respect of which the provisions of these Regulations apply. Interpretation 2 1 In these Regulations— “ the Act ” means the Taxation (Cross-border Trade) Act 2018; “ the Tariff Quota Regulations ” means the Customs (Tariff Quotas) (EU Exit) Regulations 2020 ; “Agreement” means an arrangement— that is listed in column 1 of the table in Schedule 1; and the effect of which is to apply import duty rates to goods, or any description of goods, originating from the country or territory that are lower than the applicable standard rate of import duty for those goods. “ adjusted quota period ” has the meaning given in regulation 8(2); “ the appointed day ” means the day appointed by the Treasury by regulations under section 52(2) of the Act for the coming into force of these Regulations; “ authorised use goods ” has the meaning given in regulation 5(1); “ customs value ” means the value of goods for Customs purposes established by the methodology set out in Part 12 of the Customs (Import Duty) (EU Exit) Regulations 2018 ; “ import licence ” has the meaning given in regulation 2(1) of the Tariff Quotas Regulations; “ originating goods ” has the meaning given in regulation 6; “ origin quota ” has the meaning given in regulation 7(1) and “ origin quota goods ” is to be construed accordingly; “ the Parties ” means the parties to an Agreement; “ preferential duty rate ” means the duty rate applicable under regulation 3(2) where— the terms of an Agreement provide for a rate of import duty to be applied to any goods that is lower than the applicable standard rate of import duty for those goods; or in the case of any goods, the rate of import duty to be applied under the terms of an Agreement may be higher than the applicable standard rate of import duty for those goods; “ Preferential Duty Tariff Table ”, in relation to an Agreement, means the table at Annex 1 to the Preferential Tariff or, where Annex 1 to the Preferential Tariff contains more than one table, the table relating to the relevant party to that Agreement ; “ preferential quota goods ” means goods that are classified under a commodity code listed in the Preferential Quota Table; “ Preferential Quota Table ”, in relation to an Agreement, means the table at Annex 2 to the document described in column 2 of the table in Schedule 1 or, where Annex 2 to that document contains more than one table, the table relating to the party to the Agreement relevant to the originating goods ; “Preferential Tariff” is the document described in column 2 of the table in Schedule 1; “ proof of origin ”, in relation to any goods, means a document or declaration which meets the requirements or conditions set out in the relevant origin reference document to an Agreement for the purpose of proving that those goods qualify as originating goods; “ quota close date ” has the meaning given in regulation 8(1); “ quota duty rate ” has the meaning given in regulation 4(1); “ quota number ” means a unique reference number by reference to which each quota is identified as specified in column 1 of the Preferential Quota Table; “ quota open date ” has the meaning given in regulation 8(1); “ quota period ” has the meaning given in regulation 8(1); “ quota volume ” has the meaning given in regulation 9; “ re-imported goods ” has the meaning given in regulation 20(1); “ relevant origin reference document ”, in relation to a particular Agreement, means the origin reference document described in column 3 of the table in Schedule 1, which sets out (with modifications) the rules of origin applicable between the government of the United Kingdom and the government of any other country or territory which is a party to that Agreement and includes any annexes or appendices to that document; “ working day ” means any day except— a Saturday or Sunday; or a bank holiday within the meaning of section 1 of the Banking and Financial Dealings Act 1971 , including those bank holidays occurring only in part of the United Kingdom. 2 Other words and expressions have the meaning given in the Customs Tariff (Establishment) (EU Exit) Regulations 2020 . Preferential duty rates 3 1 Subject to meeting the conditions specified in paragraph (3), where, in relation to originating goods, the importer or the importer's representative— a makes a Customs declaration under section 3(1) of the Act (obligation to declare goods for a customs procedure on import) for free circulation or authorised use claiming a preferential duty rate under an Agreement; and b that declaration is accepted by HMRC under section 4(1) of the Act (when liability to import duty incurred), the duty rate applicable to those goods on importation into the United Kingdom is the preferential duty rate determined in accordance with paragraph (2). 2 The preferential duty rate is— a where the rate for originating goods is expressed in column 2 of the Preferential Duty Tariff Table against the commodity code in column 1 of the same row of that table only as a percentage, that percentage of the customs value of the originating goods; or b where the rate for originating goods is determined by applying a formula set out in column 2 of the Preferential Duty Tariff Table against the commodity code in column 1 of the same row of that table, the result of applying that formula in accordance with the method of calculation set out in the notes in Part 2 of the Preferential Tariff. 3 For the purposes of paragraph (1), the conditions specified in this paragraph are that, unless regulation 18 applies, the importer or the importer's representative must, on receipt of a request from HMRC— a provide— i a valid proof of origin under regulation 14; or ii such other information or documents as are requested by HMRC under regulation 19; or b present to HMRC the documents required under regulation 17. 4 In paragraph (1)— a in sub-paragraph (a), the reference to “a Customs declaration under section 3(1) of the Act” is to be read as including a reference to any such declaration made to HMRC under equivalent provisions of direct EU legislation that have effect in Northern Ireland in respect of goods that are imported into the United Kingdom by their entry into Northern Ireland; and b in sub-paragraph (b), the reference to “that declaration is accepted by HMRC under section 4(1) of the Act” is to be read as including the acceptance by HMRC of any such declaration under equivalent provisions of direct EU legislation that have effect in Northern Ireland in respect of goods that are imported into the United Kingdom by their entry into Northern Ireland. 5 The preferential duty rate described in paragraph (2) is without prejudice to the application of a lower duty rate which may exist in respect of the same classification of goods (classified under the same commodity code) by virtue of regulations made under sections 8, 11, 12 or 19 of the Act. Preferential quota 4 1 Subject to paragraph (2) and to meeting the conditions specified in paragraph (4), where, in relation to preferential quota goods for which no import licence is required, the importer or the importer's representative— a makes a Customs declaration under section 3(1) of the Act (obligation to declare goods for a customs procedure on import) for free circulation or authorised use claiming a preferential duty rate under an Agreement; and b that declaration is accepted by HMRC under section 4(1) of the Act (when liability to import duty incurred), the duty rate applicable to those goods on importation into the United Kingdom is the quota duty rate determined in accordance with paragraph (3). 2 Subject to meeting the conditions specified in paragraph (5), where, in relation to preferential quota goods for which an import licence is required, the importer or the importer's representative— a makes a Customs declaration under section 3(1) of the Act (obligation to declare goods for a customs procedure on import) for free circulation or authorised use claiming a preferential duty rate under an Agreement; and b that declaration is accepted by HMRC under section 4(1) of the Act (when liability to import duty incurred), the duty rate applicable to those goods on importation into the United Kingdom is the quota duty rate determined in accordance with paragraph (3). 3 The quota duty rate is— a where the rate for originating goods is expressed in column 4 of the Preferential Quota Table against the commodity code in column 3 of the same row of that table only as a percentage, that percentage of the customs value of the originating goods; or b where the rate for originating goods is determined by applying a formula set out in column 4 of the Preferential Quota Table against the commodity code in column 3 of the same row of that table, the result of applying that formula in accordance with the method of calculation set out in the notes in Part 2 of the Preferential Tariff. 4 For the purposes of paragraph (1), the conditions specified in this paragraph are that— a the goods qualify as originating goods in accordance with regulation 6; b unless regulation 18 applies, the importer or the importer's representative must, on receipt of a request from HMRC— i provide— aa a valid proof of origin in accordance with regulation 14; or bb such other information or documents as are requested by HMRC under regulation 19, and ii present to HMRC any documents required under regulation 17; c the goods are of a description which is classified under a commodity code in the Preferential Quota Table; d the quantity of the imported goods for which the quota duty rate is claimed is within the limits of the quota volume as described in regulation 9; e the quota period has not expired; and f a request to benefit from the quota and a Customs declaration for free circulation or authorised use for the goods have been accepted by HMRC. 5 For the purposes of paragraph (2), the conditions specified in this paragraph are that— a the goods qualify as originating goods in accordance with regulation 6; b unless regulation 18 applies, the importer or the importer's representative must, on receipt of a request from HMRC— i provide— aa a valid proof of origin in accordance with regulation 14, or bb such other information or documents as are requested by HMRC under regulation 19; and ii present to HMRC any documents required under regulation 17; c the goods— i are of a description which is classified under a commodity code in column 3 of the Preferential Quota Table; and ii meet any conditions relating to the nature or identity of the goods that are specified in column 12 of the Preferential Quota Table; and d the import licence in respect of the goods is valid in accordance with regulation 35 of the Tariff Quota Regulations. 6 A quota may include one or more types of goods classified under different commodity codes, provided the unit of measure which establishes the quota volume is the same for each type of goods. 7 The quota duty rate described in paragraphs (1) and (2) is without prejudice to the application of a lower duty rate which may exist in respect of the same classification of goods (classified under the same commodity code) by virtue of regulations made under sections 8, 11, 12 or 19 of the Act. 8 In paragraph (1)— a in sub-paragraph (a), the reference to “a Customs declaration under section 3(1) of the Act” is to be read as including a reference any such declaration made to HMRC under equivalent provisions of direct EU legislation that have effect in Northern Ireland in respect of goods that are imported into the United Kingdom by their entry into Northern Ireland; and b in sub-paragraph (b), the reference to “that declaration is accepted by HMRC under section 4(1) of the Act” is to be read as including the acceptance by HMRC of any such declaration under equivalent provisions of direct EU legislation that have effect in Northern Ireland in respect of goods that are imported into the United Kingdom by their entry into Northern Ireland. 9 This regulation has effect subject to the arrangements for a licensing system in respect of preferential quota goods under Part 3 of the Tariff Quota Regulations. Authorised use 5 1 If in— a column 1 of the Preferential Duty Tariff Table; or b column 3 of the Preferential Quota Table, the commodity code applies to goods, the description of which in the Goods Classification Table refers to the use to which the goods are put, then the goods so classified under the commodity code in that row are “authorised use goods”. 2 Authorised use goods are subject to the preferential duty rate or quota duty rate described in paragraph (3) if— a they are granted authorisation under the Customs (Special Procedures and Outward Processing) (EU Exit) Regulations 2018 ; and b they comply with the conditions set out in regulation 3 or 4. 3 Without prejudice to regulation 3(4) or 4(7), the preferential duty rate or quota duty rate for authorised use goods is either the percentage of the customs value of those goods or, where the rate is determined by applying— a the formula in column 2 of the Preferential Duty Tariff Table in respect of goods listed in that Table, the result of applying that formula in accordance with the method of calculation set out in the notes in Part 2 of the Preferential Tariff; or b the formula in column 4 of the Preferential Quota Table in respect of goods listed in that Table, the result of applying that formula in accordance with the method of calculation set out in the notes in Part 2 of the Preferential Tariff. Preferential origin goods 6 Goods qualify as originating goods if they meet the conditions to qualify as originating goods as set out in the relevant origin reference document to an Agreement for the purposes of that Agreement. Origin quota 7 1 Where, in column 2 of the Preferential Quota Table, it states “Yes”, goods classified against the commodity code in that row are origin quota goods and are subject to goods-specific rules of origin within the limits of a quota (the “origin quota”) as set out in the relevant origin reference document to an Agreement for the purpose of that Agreement. 2 Each origin quota is to be identified by a quota number. 3 On application to HMRC by the importer or the importer's representative, goods that qualify as origin quota goods are subject to the preferential quota duty rate determined in accordance with regulation 4(3). 4 An application under paragraph (3) must be made in the Customs declaration for release to free circulation or authorised use relating to the relevant goods. Quota periods 8 1 Subject to paragraph (2), each period during which a quota applies (“the quota period”) commences at the beginning of the day which falls on a date specified in column 6 of the Preferential Quota Table (“the quota open date”) and finishes at the end of the day which falls on the corresponding date specified in column 7 of that Table (“the quota close date”) in respect of each quota. 2 Where an Agreement takes effect on a date which, in respect of a particular quota number, falls between the relevant quota open date and the relevant quota close date— a the quota period is to be adjusted so that it begins with the day which falls on the date on which the Agreement takes effect and ends with the quota close date for the relevant quota (“adjusted quota period”); and b the quota open date for each subsequent such quota is to revert to the date specified in column 6 of the Preferential Quota Table. 3 For the purposes of paragraph (2), as it has effect in relation to an Agreement described in column 1 of the table in Schedule 1 in respect of which arrangements are in place for applying the effect of that Agreement, the date on which the Agreement takes effect is the date on which such arrangements take effect. Quota volumes 9 1 Subject to paragraph (2), the quota volume for each quota during the quota period is as set out in column 5 of the Preferential Quota Table as a figure or figures and unit of measure or a formula for calculating the quota volume against the relevant quota number in column 1 in the same row of that Table. 2 Where, by virtue of regulation 8(2), an adjusted quota period exists in respect of a particular quota number then, for the purposes of an Agreement, the quota volume for that quota is also to be adjusted on a pro-rata basis , calculated in accordance with— a where the Preferential Tariff sets out a methodology for calculating an adjustment to a quota volume and states that this sub-paragraph applies, that methodology; or b paragraph (3) in all other cases. 3 In cases referred to in paragraph (2)(b), the pro-rata adjustment to the quota volume referred to in paragraph (2) is to be calculated by dividing QV by DQP and the resulting number then being multiplied by AQP where— a QV is the quota volume for the relevant quota; b DQP is the number of days in the quota period (including the quota open date and the quota close date) for the relevant quota; and c AQP is the number of days in the period beginning with the day on which the Agreement takes effect and ending with the quota close date for the relevant quota. 4 For the purposes of paragraph (3)(c) as it has effect in relation to an Agreement described in column 1 of the table in Schedule 1 in respect of which arrangements are in place for applying the effect of that Agreement, the date on which the Agreement takes effect is the date on which such arrangements take effect. Deductions from quotas 10 1 Deductions from the quota volume must be allocated against the quantity of the imported goods subject to the relevant quota in the order in which HMRC accepted the request to benefit from the quota for those goods together with the Customs declaration for free circulation or authorised use. 2 For the purposes of paragraph (1), the order of acceptance by HMRC of a request to benefit from a quota is to be determined by reference to the date of acceptance by HMRC of the Customs declaration for free circulation or authorised use of the relevant goods into the United Kingdom. 3 Where the Customs declaration for a request referred to in paragraph (1) is accepted by HMRC on 1st, 2nd or 3rd January of any year, the declaration is deemed to have been accepted on 3rd January of the same year or, if 3rd January is not a working day, on the next working day following 3rd January. 4 Subject to paragraph (7), the quantity to be deducted from the quota volume for preferential quota goods or origin quota goods is the quantity of any such goods for which HMRC has accepted the request to benefit from the relevant quota. 5 When the quantity of preferential quota goods or, as the case may be, origin quota goods deducted from the relevant quota volume for those goods in any quota period is equal to the quota volume for that period in column 5 of the Preferential Quota Table, the quota is exhausted. 6 Where the acceptance by HMRC of a request referred to in paragraph (1) occurs on the same day as the acceptance by HMRC of the associated Customs declaration for release of the goods for free circulation or authorised use into the United Kingdom, acceptance of the request and of the Customs declaration is to be treated as having occurred simultaneously. 7 On a day when the total quantity of preferential quota goods or, as the case may be, origin quota goods for which requests under paragraph (1) are accepted by HMRC exceeds the remaining quota volume for any such goods, deductions must be apportioned between all such requests on a pro rata basis calculated by reference to the quantity of any such goods requested in each case. 8 For the purposes of this regulation, where a quota (a “linked quota”) is linked to one or more other quotas, as indicated in the Preferential Quota Table, a deduction from the linked quota in respect of a quantity of imported quota goods is to also operate as a deduction in respect of the same amount of goods from each of the other quotas. 9 This regulation does not apply to preferential quota goods referred to in regulation 4(2). Allocation of the quota volume 11 1 Deductions from the quota volume under regulation 10 in respect of the importation of preferential quota goods or origin quota goods into the United Kingdom must not be allocated to any requests to benefit any earlier than the first working day after the date of acceptance by HMRC of the Customs declaration for free circulation or authorised use for those goods. 2 Allocation of the quota volume by HMRC must take account of all requests to benefit from the preferential quota or, as the case may be, origin quota which were accepted by HMRC together with Customs declarations for free circulation or authorised use up to and including the last working day prior to the day of allocation of the relevant quota. 3 Where, on any day, the total quantity of any preferential quota goods or, as the case may be, origin quota goods in respect of which requests to benefit from a relevant quota have been accepted by HMRC, together with the Customs declaration for free circulation or authorised use, exceeds the quota volume or remaining quota volume for those goods, the quota volume, or remaining quota volume, for those goods must be allocated on a pro rata basis calculated by reference to the requests for quantities of goods to be treated as preferential quota goods or, as the case may be, origin quota goods and declared for free circulation or authorised use. 4 Where a quantity of goods has been allocated to a preferential quota or, as the case may be, origin quota on the basis of incorrect information or an error by the person who made the declaration or HMRC, then the remaining quota volume must be adjusted accordingly to take account of the incorrect information or error. 5 This regulation does not apply to preferential quota goods referred to in regulation 4(2). Critical quotas 12 1 Where goods are subject to a quota and the quota is designated critical under paragraph (2) or (3), security for the full amount of duty at the standard rate must, unless otherwise directed by HMRC, be provided to HMRC at the time of a request to benefit from the quota. 2 Subject to paragraph (3), a quota becomes critical when HMRC gives notice that 90 percent of the whole quota volume has been allocated. 3 HMRC may publish a notice— a varying the percentage figure to be applied under paragraph (2) in respect of the goods for the period specified in the notice; or b providing for other cases where a quota becomes critical in respect of specific goods. 4 This regulation does not apply to preferential quota goods referred to in regulation 4(2). Retaining commodity codes 13 Where a commodity code specified in the Preferential Quota Table or relevant origin reference document to an Agreement for the purposes of that Agreement is deleted without being replaced in the Goods Classification Table then, for the purposes of applying the preferential quota or relevant origin quota, the original code in the Preferential Quota Table or, as the case may be, that relevant origin reference document, continues to apply to goods as originally classified under that code. Proof of origin 14 1 Proof that goods qualify as originating goods must be provided by a proof of origin that meets the conditions set out in the relevant origin reference document to an Agreement for the purposes of that Agreement. 2 On presentation of the goods on importation into the United Kingdom, the importer or the importer's representative must, on receipt of a request from HMRC, present to HMRC the proof of origin described in paragraph (1) relating to the goods. 3 The importer or the importer's representative may, on receipt of a request from HMRC, provide a single proof of origin in relation to the importation of a series of goods that are unassembled or disassembled products as provided for in the relevant Origin Reference Document to an Agreement for the purposes of that Agreement. 4 If at any time the importer or the importer's representative becomes aware or has reason to believe that the proof of origin described in paragraph (1) contains incorrect information, that person must immediately give notice to HMRC in writing of any change which affects the originating status of the goods covered by that proof of origin and, where that change gives rise to additional duty, pay that duty. Period of validity of a proof of origin 15 1 A proof of origin described in regulation 14(1) is valid for— a the period set out in the relevant origin reference document to an Agreement for the purpose of that Agreement; or b in any case where the relevant origin reference document allows for the setting of a longer validity period, for the period of two years from the date on which that proof of origin was issued. 2 A proof of origin presented to HMRC by an importer or an importer's representative after the expiry of the period referred to in paragraph (1) may be accepted by HMRC if HMRC is satisfied that— a the proof of origin is genuine; b the originating status of the goods to which the proof of origin relates can still be confirmed; and c there are reasonable grounds for the proof of origin not having been presented before the expiry of the period of its validity. Backdated claims for the preferential rate 16 1 Where originating goods are imported into the United Kingdom and, at the time of their importation, the importer or the importer's representative— a does not have— i the proof of origin as required by regulation 14(1); or ii such information or documents as are requested by HMRC under regulation 19 in order to verify the originating status of those goods; and b pays the applicable standard rate of import duty in respect of those goods, the importer, or the person who paid the import duty, may make a claim for partial repayment of the import duty on presentation to HMRC of a valid proof of origin relating to the goods or such information or documents as are required by HMRC to verify the originating status of the goods after their importation. 2 The amount of duty which may be repaid in respect of a claim under paragraph (1) is the difference between the amount of duty which the importer, or other person, paid at the time of importation of the goods into the United Kingdom (which is the standard rate of import duty under the Customs Tariff (Establishment) (EU Exit) Regulations 2020) and the preferential duty rate or quota duty rate which applied at that time. 3 A repayment of import duty under this regulation must only be granted where HMRC is satisfied that— a the claim for repayment is made within a period of three years from the date of importation; b the declaration presented after importation is genuine; and c the originating status of the goods to which the declaration relates can still be verified. 4 For the purposes of this regulation, “the date of importation” is the date of acceptance by HMRC of the declaration for free circulation or authorised use into the United Kingdom relating to the relevant goods. 5 This regulation does not apply to preferential quota goods referred to in regulation 4(2). Proof of origin: transport through a third country 17 1 Upon receipt of a request from HMRC, the importer or the importer's representative must provide documents of the type specified in the relevant origin reference document to an Agreement for the purposes of that Agreement to prove that goods that have previously undergone production— a were transported in accordance with that relevant origin reference document; b have not undergone further production that is not permitted by the Agreement outside the territories of the Parties; and c have remained under the control of HMRC while outside of those territories to the extent required by the Agreement. 2 For the purposes of paragraph (1)— a “ production ” means any kind of working or processing, including such operations as growing, raising, harvesting, manufacturing, assembling or disassembling of the goods; and b “ further production ” does not include unloading, reloading, or any other operation necessary to preserve the goods in a good condition. Exceptions from the requirement for proof of origin 18 1 Subject to paragraph (2), it is not necessary to provide a proof of origin under regulation 14(1) in respect of any originating goods presented to HMRC— a that are exempt from the requirement to provide a proof of origin under the relevant origin reference document; or b the value of which falls below such de minimis threshold amount as HMRC may publish in a notice. 2 The exception in paragraph (1) does not apply where HMRC is satisfied that an importer or an importer's representative has undertaken or arranged a series of importations of originating goods with the intention of avoiding the requirement to provide a proof of origin under regulation 14 in respect of those goods. 3 This regulation does not apply to preferential quota goods referred to in regulation 4(2). Verification of originating status 19 1 HMRC may, in the circumstances described in paragraph (2), request the importer or the importer's representative to produce such information or documents as are necessary to verify the originating status of any goods at the time those goods were presented to HMRC. 2 The circumstances described in this paragraph are where the relevant origin reference document to an Agreement for the purposes of that Agreement requires the provision of information that is within the knowledge of the importer or the importer's representative in order to verify that goods are originating goods. Re-imported goods (United Kingdom: Switzerland) 20 1 Relief may be given by HMRC in accordance with paragraph (2) from a liability to pay import duty in respect of any goods described in paragraph (3) (“re-imported goods”). 2 The relief referred to in paragraph (1) must be given— a by reference to the preferential rate for goods of Swiss origin as listed in column 1 of the Table of Re-imported Goods Subject to Relief under the Trade Agreement between the United Kingdom of Great Britain and Northern Ireland and the Swiss Confederation signed on 11th February 2019 (“ the Switzerland Trade Agreement ”) ; and b in respect of the amount by which, but for the existence of the Switzerland Trade Agreement, the rate of import duty for the re-imported goods would exceed the preferential rate of import duty which applies to goods of Swiss origin which are of the same commodity code as the re-imported goods. 3 The goods described in this paragraph are goods— a which originate in the United Kingdom in accordance with the conditions specified in the Switzerland Trade Agreement; b are of a commodity code that appears in column 1 of the Table of Re-imported Goods Subject to Relief under the Switzerland Trade Agreement; and c in respect of which such proof of United Kingdom origin as is required under the terms of the Switzerland Trade Agreement is, on receipt of a request from Customs, provided to HMRC by the importer or the importer's representative. United Kingdom - Crown Dependencies Customs Union: Modifications 21 The provisions of the Act and of these Regulations that are referred to in Schedule 2 have effect, in respect of customs matters to which these Regulations apply, as modified by that Schedule. Michael Tomlinson Rebecca Harris Two of the Lord's Commissioners of Her Majesty's Treasury Greg Hands Minister of State for Trade Policy Department of International Trade