Malta Customs in the EU

1. How do I bring goods to an approved place ?
When you bring goods into the Community through Malta, you must take them without delay to a place approved by Customs, that is an approved office of destination, and then present them to Customs.

2. What places are approved in Malta ?
Goods imported by sea must be landed at an approved wharf. Goods imported by air must be landed at the Malta International Airport. At the airport, goods must be taken to the approved examination station. When goods are cleared inland, they may be removed to an approved temporary storage premise. Alternatively, goods may move under local clearance procedures to an authorised importer’s approved premises.

3. How do I bring goods through another member state to Malta ?
If your goods arrive in another Member State but you intend to put them into free circulation in Malta, they will need to travel under a transit procedure. Transit rules apply until they reach an approved office of destination. You can put the goods under an international transit procedure, for example TIR, before they enter the Community or under the Community Transit Procedure when they enter the Community.

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REQUIREMENTS AT PRESENTATION

4. What is required when the goods first arrive ?
Imported goods from third countries must arrive at a designated place and must be presented to Customs by the person who brought the goods into the Community. Presentation means informing Customs in the required manner that the goods have arrived. A summary declaration (e.g. a manifest of the goods) must be lodged with Customs.

5. Who should present the goods ?
The person, or the person representing them, who has brought the goods into the Community, or the person who assumes responsibility for their onward carriage, should present them.

6. How do I present the goods ?
The first stage is to submit to Customs a list of the goods by using an approved computerised system linked to Customs. Then the goods are physically presented to Customs as soon as they arrive. You should present goods which have been moved under a transit procedure to Customs under the rules applicable to that regime.

7. Are there time limits for presentation ?
Yes. Goods must be presented immediately after their arrival at the place of unloading. If the Customs office is closed, presentation must be made within an hour of its reopening.

8. Can presentation be waived ?
No.

9. Who should make the summary declaration ?
The declaration must be made by one of the following:

the person who conveyed the goods into the Community

the person who assumes responsibility for their onward carriage;

the shipping, airline or haulage company; or

the representative of any of the above.

10. What is the summary declaration ?
The summary declaration is a computer version of the manifest. Where goods have traveled under the Community or common transit procedures, the copy of the transit document retained by the Office of Destination will be the summary declaration. This applies to manifests used under the Community transit simplified procedures for transport by air or sea.
11. When should the summary declaration be made ?
A summary declaration must be made before the goods are presented to Customs. If the goods are entered or re-exported from the Community or destroyed before the time when the summary declaration has to be made, Customs may be prepared to waive lodgement. You must contact the Customs office at the place of unloading to see whether Customs are prepared to do this.

12. Can I combine presentation and summary declaration ?
A summary declaration must precede presentation.

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UNLOADING AND STORAGE OF GOODS

13. Where can I unload goods ?
You may only unload goods from a ship, aircraft or vehicle after presentation and with our permission at places approved by Customs. In emergencies, goods may be unloaded for safety reasons without permission. However you must inform Customs immediately of their arrival once the goods have been unloaded. You must also unload goods if Customs so require, so that the goods and the means of transport may be examined.

14. Are lightering or lightening operations allowed ?
Yes. Where it is necessary for cargo to be transferred at sea from an importing ship at deep water anchorage to smaller vessels, for example barges for delivery ashore, Customs may give permission for these operations. You should contact the Customs office at the place of unloading to agree procedures for transporting the goods to an approved wharf. Customs shall impose conditions and specify the route the goods must take.

15. Are there restrictions on the movement of goods after unloading ?
Yes. After presentation, goods have the status of being in temporary storage until they are assigned to a Customs approved treatment or use. While in temporary storage, goods may not be removed, opened or examined without our permission and may only be handled in a way which preserves them without changing them. They may only be stored in places which Customs have approved. These are called temporary storage facilities in Community law. For goods imported by sea, wharves and transit sheds may be approved as places for temporary storage purposes subject to conditions being met. At airports, transit sheds will be approved. The restrictions on movement of goods in temporary storage also apply to goods brought into a free zone.

16. What are the conditions for customs approval of temporary storage premises ?
They include a requirement for the operator of the temporary storage premises to:

maintain adequate physical security of the premises;

keep stock accounts which enable the movement of the goods to be traced; and

provide security for the goods.

Operators of Customs approved temporary storage facilities have obligations under the Community Customs Code and the Implementing Regulations which must be observed in addition to the specific terms of any written conditions of approval.
17. What happens if goods are removed without permission ?
A customs debt will arise if the conditions of temporary storage are breached. If the goods are removed unlawfully, Customs may hold the person holding the goods personally liable for any customs debt incurred. In addition, the person removing the goods and others may be guilty of an offence.
18. Are there any other conditions ?
Customs shall require operators of temporary storage facilities to provide some form of financial security

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CUSTOMS DEBT

19. What is the policy on customs debt ?
It is based upon the following principles:

the declarant on the customs declaration is to be pursued by Customs for arrears of import duties;

the person entitled to repayment is the person who was obliged to pay the duty as a customs debtor;

the type of representation (direct or indirect) must be declared on the customs declaration at the time of importation or exportation; and

if the type of representation is not declared on the customs declaration, the representation is deemed to be self-representation and in these circumstances the person making the declaration will be the customs debtor.

20. What do the rules on customs debt cover ?
They cover:

the type of commercial relationship between principal and representative for the purposes of customs declaration;

who will be pursued in respect of customs debt; and

who will be entitled to repayment of any customs duty which has been overpaid or incorrectly raised.

These rules ensure that doubt is eliminated as to who will be pursued for customs debt and who will be entitled to any repayment.
21. What do direct and indirect representation mean ?
Representation by an agent may be in one of the following forms:

direct, where the agent acts in the name of, and on behalf of, another person; or

indirect, where the agent acts in their own name but on behalf of another person.

Should direct or indirect agents fail to state that they are acting in the name of, or on behalf of, another person or they are not empowered to do so, they will be deemed to be acting in their own name on their own behalf. In addition, agents who clear goods in their own name for a potential customer take the risk that they will be liable for any customs debt that arises at that point or at any time in the future. If an agent delegates tasks to a sub-agent, then the sub-agent is bound by the type of representation agreed between the agent and the principal.
22. Can you give me some more information on direct representation ?
Under direct representation, the principal is the sole customs debtor and therefore neither the agent nor the sub-agent takes on any liability for customs debts. The agreement between the agent and the principal must provide, either implicitly or explicitly, for the delegation of tasks to a sub-agent in order for the sub-agent to be empowered to act for the principal. If such a provision is absent, then the sub-agent will not be empowered to represent the principal and may be rendered liable for customs debts.

23. Can you give me some more information on indirect representation ?
Under indirect representation, both the principal and the agent are customs debtors. If the agent delegates the making of a customs declaration to a sub-agent, then the sub-agent becomes a customs debtor and the agent ceases to be one. This is because the agent neither makes the declaration nor has responsibility for performing the acts and formalities laid down by customs rules.

24. What is a declarant ?
A declarant is the legal person (company, partnership, public body etc or an individual) who makes the declaration in his own name or the person in whose name a declaration is made. Often this is not the same as the individual who signs the form. Legal persons other than individuals cannot themselves sign forms. They must employ officers and servants to do this for them. But an officer or servant signing on behalf of a legal person is not the declarant. A declaration may be made by the importer or by an authorised Customs agent established in Malta. In this latter case the importer becomes the principal. Warehousing entries made by authorised Customs agents on behalf of their principals for goods for free circulation can only be made by way of indirect representation. The declarant has to be the person who is authorised and because of this, if the authorised person is doing this on another’s behalf, it is being done indirectly. If the acceptance of a declaration imposes obligations on a particular person, then the declaration must be made by that person or on that person’s behalf.

25. How should box 54 of the SAD be completed ?
The original hand-written signature of the person making the declaration must be inserted and where the signatory is an officer or servant of a legal person, such as a limited company, they should print their full name and their capacity after their signature. The use of an electronic signature is permitted by Customs legislation.

26. What does ‘recovery action’ mean ?
Once a customs debt has been established, Customs shall pursue the individual or party liable for the debt. Who this will be will depend upon the type of representation agreed between the parties concerned. Where there is direct representation, that is a representative makes a customs declaration on behalf of a principal in the latter’s name, the principal is the declarant and as such is the customs debtor whom Customs shall pursue for any monies due. Where there is indirect representation, that is a representative makes a customs declaration on behalf of a principal in the representative’s own name, the representative alone is the declarant but both the representative and the principal are customs debtors and as such Customs shall pursue them jointly for any monies due, even if one of them is insolvent. If a receiver is acting for the insolvent party, Customs shall lodge a claim with the receiver. Where a person is not represented but makes a declaration in their own name on their own behalf, they are the declarant and also the customs debtor, and as such Customs shall pursue them for any monies due.

27. Must a declarant formally authorise an agent to act on their behalf ?
No. Authorisation or empowerment can be inferred from circumstantial evidence and formal authorisation is not a requirement. However a formal authority leaves no doubt as to whom Customs shall pursue for customs debt. Where no formal authorisation is held, the agent may incur the risk of being deemed to be the customs debtor and therefore liable for the debt. Agents should therefore consider taking appropriate action to protect their own interests. Customs shall accept at face value a statement on a customs declaration indicating the type of representation unless there are operational reasons for querying it.

28. What are monies on deposit ?
They are a form of security for duty - notduty. If the deposit is not sufficient to cover the customs debt once established, then Customs shall recover the extra monies from the customs debtor or debtors. If there are monies to be repaid once the customs debt has been established, then Customs shall repay the monies to whomever provided the monies on deposit. The rules about repayment to persons who paid the duties as a customs debtor do not apply as the monies are not duty, merely a form of security for duty.

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DISPOSAL OF PRESENTED GOODS

29. What can be done with the goods ?
Goods presented to Customs must be assigned to a Customs approved treatment or use. These are:

the placing of goods under a Customs procedure;

their entry into a free zone or free warehouse;

their re-exportation from the customs territory of the Community;

their destruction; and

their abandonment to the Government.

30. What are customs procedures ?

Customs procedures are:

release for free circulation;

transit;

customs warehousing;

inward processing;

processing under Customs control;

temporary admission;

outward processing; and

exportation.

31. Are there any time limits for disposal of the goods ?
Yes. Goods must be assigned to a Customs approved treatment or use within 14 days of the goods being presented to Customs. If you cannot arrange for the goods to be assigned to a Customs approved treatment or use within the period allowed, you must apply in writing to the Customs office for the place where the goods are stored for a possible extension of time. Your application must give the reason for the request and the following information:

the name and address of the applicant;

the location of the goods;

the number of the summary declaration, or indication of previous customs procedures, or the means of identifying the means of transport on which the goods are located; and

all other information necessary for identifying the goods.

When an application is granted in exceptional circumstances, Customs shall write to you giving a date by which the goods must be entered. You must pass a copy of this letter to the operator of the temporary storage facility.
32. How do I declare goods for free circulation or another customs procedure ?
You can make an electronic declaration when the relevant manifest for the goods has been recorded by the Customs Electronic System.

33. Where can I declare the goods ?
A declaration is normally made where the goods can be physically presented to Customs. This may take place at an approved airport, port, approved temporary storage area or other approved premises.

34. Can I examine the goods before I declare them ?
Yes. If you need to examine the goods, contact the Customs office where they are stored and ask for permission. If you want to take samples, you must make a written application to Customs and include the following information:

the name and address of the applicant;

the location of the goods;

the number of the summary declaration, or indication of previous customs procedures, or the means of identifying the means of transport on which the goods are located; and

all other information necessary for identifying the goods.

35. How do I place goods under a transit procedure ?
You should present the goods together with the appropriate transit document to Customs at the office of departure where the transit movement will start.
36. How do I place goods in a free zone ?
The questions on the Free Zones procedure will answer your question.

37. How do I destroy goods ?
If you wish to destroy goods, you must make a written application to the Customs office for the place of storage. The application must be signed by the owner of the goods and include the following details:

the name and address of the applicant;

the location of the goods;

the number of the summary declaration, or indication of previous customs procedures, or the means of identifying the means of transport on which the goods are located; and

all other information necessary for identifying the goods.

You should pass a copy of our authorisation, which will set out the conditions which must be met, to the operator of the temporary storage facility. Destruction of the goods must not entail any expense to Customs.
38. What happens if the goods are not declared or otherwise dealt with within the time allowed ?
If the goods are not assigned to a Customs approved treatment or use within the time allowed, Customs are required without delay to take measures, including sale of the goods, to ensure that they are properly disposed of. Storage charges are the responsibility of the person in possession of the goods, unless the goods have been formally seized. In the latter case, Customs are not responsible for accrued charges prior to seizure.

39. What special conditions apply to goods subject to controls operated on behalf of other government departments ?
Special conditions apply to goods which are subject to controls operated on behalf of other government departments. These include the need for veterinary or other health checks to be carried out before temporary storage status is ended. The production of import licences, certificates etc may also be required when the goods are entered.

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COMMUNITY GOODS

40. Do the above provisions apply to any community goods ?
Yes, it applies where Community goods have to be presented to Customs under Community regulations.

41. Which goods are affected ?
Certain goods from those parts of the customs territory where the VAT Directive does not apply are affected. The parts of the customs territory concerned are as follows: Aland Islands, Guadeloupe, Canary Islands, Martinique, Channel Islands, Mount Athos, French Guiana Reunion.

42. How are these goods identified ?
They will travel to Malta under the internal Community Transit Procedure (T2). The Office of destination copy of the T2 will act as the summary declaration.

43. Are any other goods affected ?
There are also certain circumstances where Community goods must have their status established. It must be established unless the goods are carried by air between two Community airports under cover of a single transport document or carried by sea on an authorised regular shipping service. The affected goods are usually either:

in temporary storage in a free zone or free warehouse; or

placed under a suspensive procedure when they have been brought into the customs territory of the Community.

If the status document is not available at the port or airport of destination, the goods will be treated as goods of third country origin until their status is established.

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OFFENCES

44. In what circumstances might an offence be committed ?
If you are responsible for any breach of, or failure to comply with:

any provision of the relevant Community Regulations, namely, Council Regulation (EEC) 2913/92 (Customs Code) and Council Regulation (EEC) 2454/93 (Implementing Provisions);

any requirement or condition imposed by Customs under the Regulations;

any undertaking that you give to Customs; or

the requirement for presentation, summary declaration or customs entry of goods, or for the assignment of goods to some Customs approved treatment or use; you will be committing an offence which could result in prosecution and a fine.

45. What will happen to the goods for which an offence has been committed ?
Any goods in respect of which an offence has been committed may be seized by Customs as liable to forfeiture. If Customs seize the goods in the presence of you or your representative, Customs shall give you a copy of the form which, amongst other things, sets out your right of appeal against the seizure. If Customs seize the goods in the absence of you or your representative, Customs shall send you a formal Notice of Seizure which will also set out your right of appeal against the seizure. If Customs subsequently decide not to offer you restoration of the seized goods or Customs only offer to restore them on payment by you of a sum of money with which you are unhappy, you can appeal against this decision.

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PLACE OF IMPORTATION

46. Which goods are subject to checks at the place of importation ?
All goods are eligible for temporary storage. But certain goods are subject to specific checks at the place of importation before they may be removed for temporary storage or released for free circulation.

47. Which goods are subject to veterinary checks at a border inspection post ?

Live animals;

Fresh red meat and meat products;

Poultry meat and poultry meat products;

Rabbit meat, game meat (wild/farmed) and products thereof;

Fish products, fresh and frozen fish and dry and/or salted fishery products;

Whole eggs, egg products, hatching eggs;

Lard and rendered fats;

Animal casings;

Milk and milk products whether or not for human consumption;

Processed animal protein;

Honey;

Semen;

Embryos/ova;

Hunting trophies;

Manure;

Gelatin;

Frogs’ legs and snails;

Bones and bone products;

Hides and skins;

Bristles, wool, hair, feathers;

Horns, horn products, hooves and hoof products;

Apiculture products;

Processed pet food;

Raw material for the manufacture of pet food;

Raw material, blood, blood products, glands and organs for pharmaceutical use;

Blood products for technical use;

Pathogens; and

Hay and straw.

48. What about goods that are subject to plant health, horticultural or timber controls ?
You must normally clear these goods at the place of importation. Control in other places depends upon whether the Plant Health Directorate or the Horticultural Directorate as appropriate, considers that controls can be satisfactorily carried out inland.
49. What about foodstuffs that are subject to controls ?
You should normally clear these at the place of importation. However we may allow them to be removed to other places if both the Port Health Authority and the Environmental Directorate allow their controls to be carried out inland.

50. Which goods are subject to environmental controls ?

Specified consignments of goods subject to various environmental controls (such as certain new chemicals or hazardous waste) where we have been requested by a regulatory body to arrange their detention at the point of entry into the Community;

Ozone depleting substances (ODS), including CFCs or halons, which need import licences issued by the European Commission.

51. Which goods are subject to endangered species control ?
Certain species of animals or plants (including their parts or derivatives such as furs, ivory, reptile skin goods, timber and stuffed specimens) subject to the control on endangered species for which the Ministry for Rural Development and the Environment permits/approvals must be presented at the first point of entry into the Community. After presentation of the appropriate licence, the goods may be released.

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MAKING AN IMPORT ENTRY (TRADE WITH COUNTRIES OUTSIDE THE EU)

52. Who should submit an import entry ?
If you are in business and import goods into Malta from countries outside the EU, you must normally declare them by making an entry on the Single Administrative Document (SAD) and delivering it to us. You may either do this yourself or arrange for an agent to act for you. If you or your agent has approval you can input entry data direct to our computerised entry processing system. This is called Direct Trader Input (DTI).

53. What is the tariff ?
The Tariff (better known as the Combined Nomenclature (CN) is the document which gives a description of the goods, sets out the HS Codes to be used and gives details of import duty rates applicable. It is Council Regulation (EEC) No. 2658/87.

54. But what if I trade with other EU Member States ?
If you import goods from another EU Member State, you do not need to make a customs entry. However, you may be required to complete an Intrastat supplementary declaration if your EU imports (arrivals) exceed an annual value threshold.

55. May I defer payment of customs charges ?
When you import goods you must pay duty, Value Added Tax (VAT), agricultural levy etc which are liable under Maltese or EU law. However, you can defer paying most import charges and those due on the removal of goods from warehouses or free zones (including VAT) for an average of 30 days. To be approved for deferment, you must meet certain conditions, including:

providing an approved security; and

agreeing to pay by direct debit.

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GOODS ELIGIBLE FOR REDUCED RATES OF DUTY

56. What goods are eligible ?
The goods you import may be eligible for admission at a nil or reduced rate of duty if they:

originated in a preference country or were in free circulation within Turkey; or

are from a non-EU country and qualify for temporary suspension of customs duty.

57. What are preference and tariff quota arrangements ?
Certain goods which originate in a `preference' country may be imported into the EU at a nil or reduced rate of customs duty. The exporter must provide you with evidence in the form of an approved Preference Certificate issued by a recognised competent authority to present to us proving the origin of the goods. There may be a limit on the total quantity of goods which can be admitted at a preferential rate in a specified period. Preferences on Turkish goods are based on their being in free circulation rather than on their origin.
58. What is temporary suspension of customs duty ?
You may also benefit from a nil or reduced rate of duty on certain goods imported from non-EU countries. Appropriate details will be given in later questions on Customs Economic Procedures.

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IMPORT PROCEDURES

59. What are valuation statements ?
An individual valuation declaration should normally accompany the import entry for goods liable to customs duty where the value of the goods exceeds Lm…………. However, if you regularly import dutiable goods, you can save time by completing and registering a general valuation statement. You need to complete this form only once every three years provided that the terms and conditions of supply in that period do not change.

60. What is a simplified procedure ?
With the approval of Customs and subject to certain conditions you may be authorised to submit electronic declaration methods which are designed to enhance and simplify customs procedures for clearing imported goods either at the frontier or upon removal from a free zone or customs warehouse. The simplified procedure offers a variety of methods which may be operated in isolation or combined to best meet your particular needs. You can opt to use either the Simplified Declaration Procedure (SDP) or Local Clearance Procedure (LCP). In both cases you submit the declaration in two stages. The initial declaration provides us with a minimum amount of data which effects the release of the goods. You can provide this either at the frontier in the form of a simplified SAD (SFD) or as an entry in your records. You then follow this up with an electronic SAD which contains the full fiscal and statistical data.

61. What is the purpose of customs warehousing ?
If you import non-EU goods liable to customs duty and/or Common Agricultural Policy (CAP) charges, you can suspend payment of the import charges by placing the goods in an approved customs warehouse. Charges are only payable (but may be deferred) when the goods are removed from the customs warehousing arrangements. These facilities are also available for excise goods and for CAP goods imported from other EU states which are liable only to positive Monetary Compensatory Amounts (please obtain more information regarding MCA from Ministry for Rural Affairs and the Environment). You can find further information in Notices:

62. What are free zones ?
You can move imported goods into a free zone without paying import charges (although relief from excise duty is available only if there is an approved excise warehouse in the zone). You pay customs duty and import VAT only if you:

bring goods out of the zone into the EU market; or

use or consume them in the zone.

Within the zone you may, with the appropriate authorisation, process imported goods free of customs duty and import VAT except that:

customs duty is payable when products are intended for the EU market; and

import VAT is payable when processed goods are delivered for the EU market.

Any supplies of goods and services within the zone are subject to the normal VAT rules.
63. What does ‘goods in transit’ mean ?
The simplified transit procedures allow goods to be taken through the EU and on to a third country without payment of import charges. Whilst the goods are in transit they can, under certain conditions, be regrouped or repacked but they must not be altered. Goods in transit should normally be delivered to their destination within 8 days. If you wish to hold the goods within the EU for a longer period, goods arriving by sea may be held for up to 14days under the Temporary Storage Procedure.

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RELIEFS

64. What is inward processing relief (IPR) ?
You can obtain duty relief on imported goods from non-EU countries which you process in the EU and then re-export to a non-EU country provided that the trade does not harm the interests of EU producers of similar goods. You can obtain relief from customs duty, specific customs duty (previously CAP charges), anti-dumping duty and countervailing duty but not excise duties. Import VAT is not due if the goods are entered to IPR suspension but is due if the goods are entered to IPR drawback. Processing can be anything from repacking or sorting goods to the most complicated manufacturing. You may also qualify for relief if you obtain the goods from someone who is approved for IPR in the EU or if you dispose of finished goods other than by re-export. You can only use IPR if you meet certain conditions and record keeping requirements, and we have given our approval.

65. What is processing under customs control (PCC) ?
In most cases you will not be able to claim duty relief on imported goods which are processed but not subsequently re-exported. However, if the duty due on the raw materials used in the process is greater than it would have been had you imported the finished product, you can declare the goods to free circulation at the lower rate that applies to the finished product rather than at the rate that applies to the raw materials. You can only use PCC if you meet certain conditions and record keeping requirements, and we have given our approval.

66. What is end-use relief ?
End-Use provides duty relief on imported goods in order to promote certain EU industries and trades. To qualify for relief:

the goods and/or processes must be eligible for end-use relief;

you must be authorised by us for the relief (except for certain denatured products); and

the goods must be put to their prescribed end-use within agreed time limits.

End-use relief applies only to customs duty. VAT, if due, must be paid, unless any separate VAT relief applies.

67. What do temporary importation and other conditional reliefs mean ?
You may not have to pay customs duty and other import charges when goods are either temporarily imported or imported finally for particular purposes. In either case certain conditions must be met. A large range of other reliefs are also available.

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TEMPORARY IMPORTATION INTRODUCTION

68. What is the purpose of temporary importation (TI) ?
TI generally allows you to temporarily import goods with relief from customs duty, specific customs duty (previously CAP charges), anti-dumping duty and countervailing duty but does not relieve excise duties. Goods must not be processed or repaired other than routine maintenance necessary to preserve them in the condition in which they were imported. There are several different TI reliefs, for example goods for exhibition, medical equipment, items for auction, or goods for testing. Some of the reliefs impose conditions on ownership of the goods, or how they may be used.

69. Who can use TI ?
TI approval can be granted at the request of the person who uses the goods or arranges for them to be used. Depending on the type of goods that person can be established within or outside the Community. Any person temporarily entering the EC who is not normally resident there can use relief for travellers' personal effects.

70. How does TI work ?
To enter goods to TI an authorisation is required. With very few exceptions you can apply for authorisation to use TI relief at the time you import your goods. You will be authorised by the Customs Front Office. For most importations you will be required to provide security (either by cash deposit, or bank guarantee) equal to the full amount of duty and import VAT potentially due. This may be reclaimed when the goods have been re-exported and satisfactory documentary evidence can be provided. No import VAT is payable unless goods are released for free circulation.

71. What is TI with total relief ?
Total relief from import duty can be claimed if the goods and use made of them are in accordance with the provisions of Articles 555 – 578 of the Customs Code Implementing Provisions.

72. What other forms of total relief exist ?
If goods do not comply with the conditions identified in Articles 555 – 578, total relief may still be available if they:

are imported occasionally and for a period not exceeding three months; and/or

have a value of less than Euro 4,000.

73. What is TI with partial relief ?
Partial relief can be claimed if goods do not comply with the conditions identified in Articles 555 – 578 and other forms of total relief in referred to in question 72 cannot be claimed. Import VAT under partial relief must be paid at import so partial relief cannot be claimed for goods on which VAT only is due. Full security for the amount of customs duties due will be required and for each month the goods remain in the EC, 3% of the customs duties will be deducted from the security taken at import. When the goods leave the EC any remaining balance of the security taken will be repaid. Note: Partial relief cannot be claimed on consumable goods.
74. What legislation covers the TI procedure ?
The law on TI is published in the Official Journal of the European Community under Council Regulation (EEC) No 2913/92 establishing the Community Customs Code and Commission Regulation (EEC) No 2454/93, which lays down provisions for its implementation. EC law on Import VAT relief is contained in the 6th VAT Directive which is interpreted into Maltese law in the Value Added Tax Act 1994 . Other National provisions and VAT Directives may also apply.

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CUSTOMS WAREHOUSING

75. What is the law on customs warehousing ?
The law on customs warehousing is contained in: Council Regulation (EEC) 2913/92 establishing the Customs Code; and Commission Regulation (EEC) 2454/93 as amended, which lays down the provisions for its implementation.

76. What is the EC law on import vat relief

The 6th VAT Directive which is enacted in Maltese law in the Value Added Tax Act 1994

other national provisions and other VAT directives may also apply.

Any person who makes a false declaration or provides untrue information about goods entered to or removed from customs warehousing may be liable to penalties. This also applies to declarations made using simplified procedures.
77. How can I benefit from customs warehousing ?
There are different ways to benefit from the customs warehousing procedure with varying conditions and requirements. (a) if your operations are processing based with little need for storage, then another customs procedure may be more appropriate (such as IPR, (Inward Processing Relief) (b) if you want to benefit from customs warehousing but not have the responsibilities of a warehousekeeper, you may choose to be a depositor in a public warehouse; (c) if you want to be authorised for a customs warehouse, consider what type is most suitable for your business;

78. What are the other advantages of customs warehousing ?
Customs warehousing is particularly useful if you:
(a) want to delay paying import duty and/or VAT on your stocks of imported goods;
(b) want to delay having a customs treatment applied to imported goods;
(c) want to re-export non-Community goods (in which case import duty and/or VAT may not be payable at all);
(d) have difficulty at the time of import in meeting particular conditions (such as certain import licensing requirements);
(e) want to discharge another customs procedure (such as IPR) without physically exporting the goods; or
(f) want to use a customs warehouse for co-storage of goods subject to another customs procedure (such as free circulation, IPR, PCC).

79. What does a customs warehouse mean ?
A customs warehouse can either be a defined location (such as premises or place) or an inventory system authorised by us for storing non-Community goods, that are:

chargeable with import duty and/or VAT; or

otherwise not in free circulation.

Depending on the circumstances, a defined location can be the whole of a building, a small compartment in a building, an open site, a silo or a storage tank.

80. What is the difference between public and private customs warehouses ?

A customs warehouse can be either a public or a private warehouse.

A public warehouse is authorised for use by warehousekeepers whose main business is the storage of goods deposited by other traders (depositors).

A private warehouse is for the storage of goods deposited by an individual trader authorised as the warehousekeeper. The warehousekeeper need not necessarily own the goods but must be the depositor.

81. What types of customs warehouses exist ?
EC legislation allows for 6 different types of customs warehouse, classified as A – F (Article 515, Customs Code Implementing Provisions).

82. How is the location of the warehouse identified ?
Warehouse types A, C and D have their physical location defined and the same location cannot be authorised for more than one of these customs warehouse types. The defined location can include many sites (referred to as multi-sited) but the authorised location of the warehouse will be the storage site where the warehouse stock records are kept.

For type E authorisations, the goods may be stored at any notified storage site/facility belonging to the authorised trader. The authorised trader need not physically own the storage site and it can include the premises of a type A, C or D warehouse. However, the authorised trader must have control over the goods whilst they are stored at those sites and must have access to them at all times.

Multi-sited type A, C and D warehouses and type E authorisations cater for more than one storage location and movements between one such site and another is permitted without any official documentation. However, the warehouse stock records or system of accounting and record keeping must be capable of identifying the location of the goods at all times.

83. What are the structural standards required for a customs warehouse ?
In general, any premises, which affords reasonable structural security and safe access, may be authorised. For type E warehouses the authorisation is not applied to physical premises but you must notify us of the address of all the facilities in which goods are to be stored. You must maintain the premises/storage facilities and operate the warehouse in a way that meets the requirements of all Health and Safety legislation.

84. What goods can be stored in a customs warehouse ?
The following goods can be stored in a customs warehouse:

Non-Community goods liable to customs duties and/or VAT (whether or not eligible for preference);

Non-Community goods for which necessary supporting documents (such as a licence) are not available at the time of import;

Non-Community goods imported to another suspensive regime (such as IPR (Inward Processing Relief) or TI (Temporary Importation) warehoused for export from the Community;

Non-Community PCC (Processing under Customs Control) products;

Non-Community goods that are not subject to a full rate of customs duty in the tariff, but are liable to import VAT;

Community produced goods or non-Community goods released to free circulation, eligible for CAP refunds on export. These goods should be warehoused in a specially approved warehouse under the CAP pre-financing arrangements; and

Non-Community goods in free circulation that are subject to a claim under a rejected imports arrangements.

85. What goods cannot be stored in a customs warehouse ?
The following goods may not be stored in a customs warehouse:

meat, meat products and other goods subject to the Veterinary Checks regime unless the required import licence and/or health certificate have been presented and veterinary checks have been completed at the frontier;

most other non-Community goods subject to prohibitions or restrictions applicable at the EC frontier unless necessary supporting documents (such as import licences, permits or other supporting documents) have been presented; and

goods liable to excise duties unless the warehouse is additionally authorised as an excise warehouse or the excise duty is paid before the entry is made for customs warehousing.

86. What is the time limit for storage ?
Generally you can store warehoused goods for an unlimited period but if you store pre-financed goods there may be a time limit for storage of specific products.

87. What are the responsibilities of a warehousekeeper ?
If you are authorised to operate a customs warehouse, you are responsible for:

the security and proper control of the warehoused goods, including maintaining stock records for those goods throughout the customs warehousing procedure and accounting for any shortage;

ensuring that the conditions of your customs warehouse authorisation and all customs obligations are met;

fully co-operating with customs in our supervision of your authorisation; and

allowing authorised customs officials access to the warehouse premises,your warehouse records and to the warehouse goods at all reasonable times.

88. What are the responsibilities of a depositor ?
If you are the person who placed the goods under the customs warehousing procedure - a depositor in a public warehouse or a private warehousekeeper - you are bound by the declaration placing the goods under the procedure. You must ensure that:

the goods are sent directly to the warehouse shown on the declaration; and

that the customs warehousing procedure is discharged by declaration of the goods to another customs approved treatment or use.

If you are using a public warehouse, you are responsible for providing the warehousekeeper with all the necessary details of the declaration that entered the goods to the customs warehousing procedure to enable the warehouse stock records to be updated (such as the quantity and a description of the goods).

89. What limitations exist on retail sales in a customs warehouse ?
Retail sales are prohibited in a customs warehouse. This includes goods under the type E warehousing arrangements. The only exceptions are where goods are retailed with relief from import duties:

to travellers to third countries (such as from airside shops at airports);

under diplomatic or consular arrangements; and

to members of international organisations or NATO forces.

90. How is vat dealt with on supplies of goods in customs warehousing ?
Sales or other supplies of imported goods which remain within the customs warehousing arrangements as described in Question 88 are disregarded for VAT purposes provided the sales or supplies take place before removal to free circulation or, where both customs and excise duty are chargeable, before removal to home use.

91. What security for duty and/or vat on warehoused goods is required ?
Security is not normally required on warehoused goods although we may ask for financial security if we consider that the duty and/or VAT is at special risk. Should security be required it will need to be provided in the form of a cash deposit or bankers guarantee.

92. May I take samples of warehoused goods ?
Should you wish to remove goods from the customs warehousing arrangements for sample purposes you will need to submit a written request to your local supervising office. Once the authorisation has been received samples may be taken and removed from the warehouse without payment of customs duty and/or VAT. This is provided that, singly or collectively, they are of negligible value and are of a kind and in a quantity capable of being used for soliciting orders for similar goods or for quality control purposes.

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INWARD PROCESSING RELIEF (IPR)

93. What is the purpose of IPR ?
IPR provides relief to promote exports from the EC and assist Community processors to compete on an equal footing in the world market. Duty is relieved on imports of non EC goods which are processed in the Community and re-exported provided the trade does not harm the essential interests of Community producers of similar goods. It can provide relief from customs duty, specific customs duty (previously CAP charges), anti-dumping duty, countervailing duty but does not relieve excise duties. Import VAT is not due when entered to IPR suspension but is due if entered to IPR drawback. Processing can be anything from repacking or sorting goods to the most complicated manufacturing. You may also obtain relief if you receive IPR goods from another approved trader in Malta or another Member State. If you dispose of the finished goods other than by re-export, you may still be able to claim relief.

94. Who can use IPR ?
Individuals, partnerships or corporate bodies established within the European Community, acting on their own behalf or representing a non Community body; individuals, partnerships or corporate bodies established outside the European Community provided imports are of a non commercial nature.

95. How does IPR work ?
There are two methods of duty relief, suspension or drawback. In either case there must be an intention to re-export goods from the EC and an authorisation to enter goods to IPR will be required. Goods must be processed within a certain period and records kept for all operations carried out. If you use suspension you will also be required to submit returns detailing your receipts and disposals.

There are five types of authorisation. Processing of certain goods is subject to a monetary limit of Euro 150,000 per 8 digit CN code, per applicant, per calendar year. If the value of these goods entered to IPR exceeds this limit and does not involve agricultural products covered by Annex 1 to the Treaty , an economic test must be carried out . No economic test is required for goods not listed in Annex 1 to the Treaty.

96. What is the suspension system ?
Customs duties are suspended when the goods are first entered to IPR in the EC. Import VAT is not due unless the goods are released to the Community market. If you plan to export all your IPR goods or products, transfer them to another IPR authorisation holder or dispose of them in another way e.g. customs warehousing, suspension is likely to be the most suitable method for you. If you plan to export or transfer only a percentage, suspension can be used for that percentage of your imports/receipts, based on a reasonable estimate. The remainder should be entered to free circulation with full payment of duty and import VAT (unless another duty or VAT relief is available). If you import/receive more goods under IPR suspension than you need for your export market or other eligible disposals, you will have to divert the surplus goods to free circulation. You will have to pay the suspended duty and import VAT and will also be charged compensatory interest from the date the goods were imported to the EC. Certain goods must be entered to suspension and the drawback system cannot be used (e.g. goods subject to quantitative import restrictions; goods subject to tariff measures within quotas ; goods subject to presentation of an import or export licence). These include agricultural goods, some licensable goods (mostly textiles) and any goods you intend to process under IPR in a Customs warehouse or Free Zone. The conditions for using suspension will be communicated to you e.g. there should be an intention to export the goods imported to the suspension system.

97. What is the drawback system ?
Customs duties and import VAT are paid when the goods are entered to IPR. You claim duty back only if you export the goods or products, transfer them to an IPR suspension authorisation holder or dispose of them in another authorised way e.g. entering them in a customs warehouse. You may be able to reclaim the import VAT as input tax. You will not be able to reclaim duty on goods you destroy under Customs supervision or on any waste and scrap which results from that destruction. Except for goods which cannot be entered to drawback (vide question 95), this method may suit you if you do not know how much of the goods you receive will be exported etc and you will not be charged compensatory interest on any goods you release for use on the Community market. The conditions and restrictions will apply for using the drawback system.

98. What law covers IPR ?
The law on IPR is published in the Official Journal of the European Community under Council Regulation (EEC) No 2913/92 establishing the Community Customs Code and Commission Regulation (EEC) No 2454/93 which lays down provisions for its implementation. EC law on import VAT relief is contained in the 6th VAT Directive which is interpreted into Maltese law in the Value Added Tax Act 1999, Cap. 406. Other National provisions and VAT Directives may also apply.

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END-USE RELIEF

99. What is the purpose of end-use relief ?
End-use provides relief to promote certain EC industries and trades. To qualify for relief the following must apply:

the goods and/or processes must be eligible for end-use;

you must be authorised for the relief ;

the goods must be put to their prescribed end-use within agreed timelimits.

End-use relief applies only to duty. VAT if due, must be paid unless any separate VAT relief applies. End-use does not include relief from Excise duty or Anti Dumping Duty (ADD).

100. What is the law applicable ?
The law on end-use relief is contained in:

Council Regulation (EEC) No 2913/92 establishing the Customs Code; and

Commission Regulation (EEC) No 2454/93 as amended, which lays down the provisions for its implementation.

101. How does end-use work ?
End-use relief can assist certain industries and trades within the EC by providing favourable rates of duty on certain goods imported from outside the EC, provided those goods are put to a prescribed use. To obtain relief an authorisation is required to import the goods to end-use relief. The goods must then be put to a prescribed use within a certain period and records kept about the goods and their treatment. If the goods are not put to the prescribed use duty will be due.

102. Who can use end-use relief ?
Individuals, partnerships or corporate bodies established within the European Community, acting on their own behalf or representing a non EC body; and individuals, partnerships or corporate bodies established outside the European Community provided imports are of a non commercial nature.

103. What goods and processes are eligible ?
Eligible goods are individually highlighted in the Tariff. Certain goods denatured to make them unfit for human consumption do not require an end-use authorisation to qualify for duty relief. The goods should be denatured or meet the classification criteria at the time of import and are identified in the Tariff.

104. How do I identify end-use goods in the tariff ?
With the exception of certain military equipment and shipwork , goods eligible for end-use relief are indicated throughout the Tariff (by commodity code) and are identified by one of the following footnotes:

"entry under this subheading is subject to conditions laid down in the relevant Community provisions (see articles 291 to 300 of Commission Regulation (EEC) No 2454/93OJL 253, 11.10.1993 P.71 and subsequent amendments)."; or

"entry under this subheading is subject to conditions laid down in the relevant Community provisions. See also Volume 1, Part II, para 11.2.8."; or

"subject to end-use control - see Volume 1, Part 11".

The Tariff description of the goods will normally indicate what the prescribed end-use is for each particular commodity eg for use in civil aircraft.

End-use relief generally applies to:

Goods under Tariff sub-headings which attract a temporary suspension of duty or Tariff Quotas on condition that they are put to a prescribed use.

End-use provisions relating to temporary suspensions or Tariff Quotas may be subject to change. If you are unable to identify an indicator of end-use relief in your copy of the Tariff for any specific goods contact our Tariff/TARIC Service. It is possible a recent change may have occurred.

Goods entered for shipwork end-use relief ie goods intended for use in certain ships, boats and other vessels and drilling or production platforms. Relief is available for shipwork goods of any description except food and drink.

Certain weapons and military equipment when they are used by or on behalf of the military forces of a Member State.

Other goods entered at import to headings in the Tariff that require such goods to be put to a specific use.

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PROCESSING UNDER CUSTOMS CONTROL (PCC)

105. What is the purpose of processing under customs control (PCC) ?
The customs tariff is organised in such a way that, in most cases, imported goods carry higher rates of duty than the raw materials or components from which they are manufactured. In some cases however, processed products attract a lower rate of duty than the goods from which they are made. In some cases these tariff anomalies tend to make it more economical to import finished products directly from outside the EC, than to import the raw materials and manufacture the products in the Community. The PCC procedure is a trade facilitation measure, intended to encourage processing in the Community by allowing certain raw materials or components to be imported under duty suspension arrangements. After processing, the finished products may be declared to free circulation at the lower rate that applies to them rather than the rate which applies to the raw materials.

106. What law deals with PCC ?
The law on PCC and other customs procedures is contained in Council Regulation (EEC) 2913/92 establishing the Community Customs Code, and in Commission Regulation (EEC) 2454/93 which lays down provisions for its implementation. EC law on import VAT relief is contained in the 6th VAT Directive, interpreted in Maltese Law in the Value Added Tax Act 1999, Cap.406.

107. How does PCC work ?
Using the PCC arrangements, you can:

import goods from outside the EC with all customs charges suspended;

process them in your own premises, or have them processed for you; and

pay duty at the rate which applies to the processed products (rather than the imported goods) when you put them into free circulation.

You will normally save money if the rate of duty on the products is less than the rate on the imported goods. If the duty rates on the imported goods and processed products are the same there is no duty advantage and therefore PCC should not be used. You may import goods directly to the PCC arrangements, or transfer goods into PCC from another customs procedure, such as customs warehousing. Before entering goods to PCC you must be authorised to use the arrangements. You may not use equivalence under PCC.

108. Who is eligible to place goods under the PCC procedure ?
To place goods under the procedure you must be:

a "natural", or "legal" person established in the Community;

the person carrying out the process or arranging for it to be carried out; and

authorised by Customs to use the procedure.

A "natural" person is any person normally resident in one of the Member States. A "legal" person is a business, for example, a partnership or a limited company, which has a permanent business establishment in the Community. You may arrange for someone else to carry out the processing on your behalf, but, as the authorisation holder, you are responsible for paying any duty or other charges due on the imported or processed goods.

109 What processes are eligible under the PCC procedure ?
Customs can only authorise processes where:

the imported goods can be identified in the processed products;

it would not be economically viable to restore the processed goods to their original condition; and

use of the procedure enables processing activity to be created or maintained in the Community without harming the essential interests of Community producers of similar goods.

The specific processes allowable under PCC arrangements are listed in Annex 76 of Commission Regulation (EEC) 2454/93. Subject to certain conditions however, for most goods, any type of process may be undertaken under PCC arrangements.

Packaging Materials - if the final processed product is to be packed into jars/bottles/cartons for retail sale and this forms part of the whole processing operation then these may be included in any application.

PCC may also apply for goods which have to undergo operations to ensure their compliance with technical requirements prior to release for free circulation eg the provision of a Certificate of Conformity in the case of fresh fruit. It does not apply to goods imported to specific specifications eg computers which are subsequently found not to comply with the individual specification requested.

110. Can I put IPR goods into PCC ?
You may be able to put the by-products of an IPR process into PCC, (for example, to recover materials used in the IPR process), but you may place the compensating products of an IPR process into PCC only if the imported goods in their original state would have been eligible for PCC.

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MERCHANDISE IN BAGGAGE

111. What is merchandise in baggage (MIB) ?
MIB refers to goods which are: (a) not in free circulation in the European Community (EC); and
(b) carried by passengers in accompanied baggage or in private vehicles for trade or business use; and
(c) not recorded on the ship or aircraft manifest as freight; and
(d) not the personal property of the passenger.

112. What goods are included in MIB ?
MIB includes:

goods acquired for your company;

goods for sale;

spare parts; and

trade samples, etc;

whether or not they are:

permanently imported;

temporarily imported;

in transit; or

liable to customs charges

113. What must I do when I arrive at the (air)port in malta ?
All commercial goods carried in your baggage or private vehicle must be declared in the Red "Goods to Declare" Channel. If there is no separate Red Channel, you should go to the Red Point in the customs area. MIB GOODS ARE NOT ALLOWED TO FORM PART OF YOUR PASSENGER ALLOWANCES. If the final destination for the goods that you are carrying is another EU country, you should refer to Question 116
114. What happens if I fail to go into the red channel, or to the red point ?
You may lose the goods and be liable to prosecution, or a fine.

115. Can I use a customs clearance agent ?
The requirement to complete a customs declaration, often known as an import entry, or SAD is dependent on the value of the goods and the customs regime that the goods are being entered to. Where an SAD is required you may prefer to use an authorised Customs clearance agent to deal with the formalities, however they will make a charge for their services. AS A LEGAL DECLARATION IS REQUIRED, A CUSTOMS OFFICER CAN ONLY GIVE YOU GENERAL ADVICE. If you decide to employ an agent it can save you time if you provide the agent with prior notification of the goods you are carrying and arrange for the agent to meet you when you arrive. At most locations, agents are able to input the declaration direct into the Customs computer and arrange payment of any duty and VAT due. Customs take no part in the selection of authorised agents, but usually have a list available to assist you in the selection of one.

116. What will happen if I am travelling on to another EU airport ?
It will depend on whether your MIB is in your cabin or hold baggage.

Hold Baggage - If your MIB is in the hold of the aircraft and is in transit to another EU airport, you will not be able to declare it in Malta. It cannot be dealt with until you clear your hold baggage at your final destination.

Cabin Baggage - If your merchandise is in your cabin baggage, you must declare it in Malta, even if you are travelling on to another EU airport. You will have the option of either paying any customs charges, or completing a Community Transit (CT) declaration for the MIB to be cleared at your final destination.

NB: To avoid transit delays you are strongly advised to carry MIB goods in your hold baggage for clearance at your final destination.
117. When must I complete an electronic/manual customs declaration using the SAD form ?
An SAD Form is only required if you have commercial goods especially if you have goods for which you:

claim Inward or Outward Processing Relief;

request clearance under Tariff Quota;

request relief from duty under duty-free direction, or certificate of re-importation;

apply for End Use;

request warehousing under Customs control; or

are using the Community Transit procedures.

You must complete the SAD Form and present it with the goods in the same way as for the importation of unaccompanied freight.
118. Who can sign a customs declaration ?
There must be a clear legal connection between the consignee of the goods and the person signing the declaration. It is therefore important that you are the appropriate person, or have the authority, to sign the declaration. Customs may require written evidence that a declarant has been authorised by a consignee to sign declarations on their behalf.

119. Are there any other documents customs will require ?
Customs will require your completed declaration to be accompanied by documentary evidence of value of the goods, for example the supplier's invoice. This document will be retained. If you require a copy for your records you are advised to take a photocopy before you present your entry. Where applicable the following documents will also be required: (a) Movement Certificate or Certificate of Origin - you will be required to produce a valid Movement certificate or Certificate of Origin if you ask for clearance at a preferential rate of duty. If this cannot be produced, you will be required to pay the full duty rate. (b) Proof of origin for textiles - under certain conditions you must produce a document to prove the origin of textiles. (c) Import licences or restrictions - you must produce an import licence when the goods are subject to import licensing. If your goods are subject to import restrictions, you must meet the conditions. (d) Comprehensive guarantee certificate/individual guarantee - if the goods are moving under Community Transit you must present either:

an individual guarantee in the form of a cash deposit, voucher(s) or an individual guarantee by a guarantor; or

a comprehensive guarantee

to cover the full amount of the duties and VAT on the goods.
120. When do I need to make an export declaration ?
A declaration on the SAD is only required when the MIB goods are for export to a country outside the EU or to one of the 'special territories' such as Canary Islands, Channel Islands and Mount Athos.

121. What must I do ?
You will need to declare the goods. You must therefore:

arrive well before your scheduled departure time; and

present the goods to the export officer at the (air)port of departure together with the completed customs export declaration.

However if you use the low value goods or non-statistical procedures, you will only have to complete a minimum number of boxes or any other authorised document. The export declaration must be accompanied by any other export documentation which may be required eg an export licence.
122. How do I obtain evidence of export ?
To support your claim for the VAT zero-rating of your goods, you need official evidence that the goods have left the EU. This is achieved by obtaining Customs endorsement of the copy 3 of the SAD. If you are going to a non-EU country direct, this will take place in Malta. However, if you are travelling via another Member State of the EU, the copy 3 of the SAD will be endorsed by Customs at the last (air)port before you leave the Community.

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INTELLECTUAL PROPERTY RIGHTS (IPR)

123. Which is the law on IPR ?
The procedures in the following questions are based on the following:

Council Regulation (EC) No 3295/94 as amended by Council regulation (EC) No. 241/1999;

Commission Regulation (EC) No 1367/95 as amended by Commission Regulation (EC) No. 2549/1999;

Act 414 VIII/2000 better known as the Cross Border Measures.

124. Can you give me more information on European Community (EC) legislation on IPR ?
Council Regulation (EC) No 3295/94 as amended by Council Regulation (EC) No 241/1999 allows the holder of a right to lodge an application with Customs to prohibit entry into the Community and the export or re-export from the Community, of counterfeit, pirated and patent infringing goods. The Regulation also provides for Customs to contact you if we come across suspected infringing goods during the course of our checks. In this case the goods will be detained and you will be invited to lodge an application within a specified timescale.
125. What kinds of good are subject to IPR legislation ?
COUNTERFEIT GOODS

Goods, including packaging bearing without authorisation a trade mark which is identical or cannot be distinguished in its essential aspects from validly registered Maltese or EC trade marks for the same type of goods;

any symbol (eg logo, label, sticker, brochure, instruction manual or guarantee document) whether presented separately or not, carrying a trade mark without authorisation as above; and

packaging materials, presented separately, bearing the trade marks of counterfeit goods.

PIRATED GOODS

Goods which are (or embody) copies made without the consent of the holder of the copyright or right in a performance or design right (registered or unregistered), or of a person authorised in the country of production, where the making of those copies would have constituted an infringement of the right in question under Maltese or EC law.

PATENT INFRINGING GOODS

Goods infringing a patent under Maltese law or a supplementary protection certificate (SPC) as provided for by EC law. Please discuss Patent Infringing Goods with the Industrial Property office.

126. What does ‘the holder of a right’ mean ?
The holder of a right means a trade mark, copyright, right in a performance design right, patent or supplementary protection certificate, or any person authorised to use those rights, or an authorised representative.

127. What are ‘grey market goods’ ?
Grey market goods are:

Goods manufactured with the consent of the right holder, but marketed without the consent, (ie parallel trade goods); and

goods manufactured or bearing a trade mark under conditions other than those agreed by the right holder, (ie overruns).

128. What other goods the definitions of counterfeit, pirated and patent infringing goods also include ?
The definitions of counterfeit, pirated and patent infringing goods also includes moulds or matrices specifically designed or adapted for the manufacture of counterfeit trade marks, goods bearing such trade marks, pirated goods and goods infringing a patent or a supplementary protection certificate.

129. What goods does the law on IPR exclude ?
The law does not apply to:

GREY MARKET GOODS - for example parallel trade goods and overruns.

GOODS OF A NON COMMERCIAL NATURE - contained in travellers' personal luggage within the current value limit for relief from Customs duty.

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PARCEL POST PACKAGES

POSTAL PACKAGES FROM OTHER EC MEMBER STATES

130. Are there customs controls on goods sent by post from elsewhere in the EC ?
As members of the EU Customs does not have routine controls for revenue purposes on goods posted into Malta from anywhere within the EC. Goods from certain "Special Territories" are not included in the fiscal territory of the EC and are treated differently for Excise Duty and VAT purposes.

We do however have to carry out selective checks to ensure that no prohibited items are imported such as drugs, indecent or obscene material and weapons.

131. What are the Special Territories ?
These are territories connected to Member States of the EC to which special rules apply. They are not included in the fiscal territory of the EC, and although goods from these areas are not liable to Customs Duty they are subject to VAT and to Excise Duty in the case of alcohol and tobacco products.

The Special Territories of the Community are:

The Aland Islands (Finland);

The Canary Islands (Spain);

The Channel Islands;

The French Overseas Departments of Guadeloupe, French Guiana, Martinique and Reunion and

Mount Athos - also known as Agion Poros (Greece).

132. What is the relationship between the EC and Turkey ?
The EC and Turkey established a Customs Union on 1 January 1996. As a result many products coming from Turkey no longer attract Customs Duty although VAT and Excise Duty still apply.

133. Can I receive alcohol and tobacco products from elsewhere in the EC ?
This depends on the nature of the consignment. If you receive a gift through the post, we will not make additional charges for alcohol and tobacco, providing all the following conditions apply to the gift:

it must have been sent by a private person resident in another Member State of the EC at the time of despatch to a private person in Malta;

it must be for your own use. You would be committing an offence if you sold on to someone else excise goods for which Maltese Excise Duty has not been paid;

you must not have paid for the gift, either directly or indirectly, and there must be no commercial or trade element to the contents of the consignment;

it should be of an occasional nature only, for example, for a birthday or anniversary; and

the quantities involved must not be excessive.

If you receive alcohol or tobacco products by post on a commercial basis, this is known as distance selling, and there is liability to both local Excise Duty and VAT.

134. Can I receive alcohol and tobacco products from the Special Territories ?
You may receive gifts of alcohol and tobacco products from the Special Territories free of Customs Duty but they are liable to Excise Duty and VAT unless they are within the quantity allowances set out in Question 138.

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POSTAL PACKAGES FROM THE REST OF THE WORLD

135. How and why do we examine packages ?We examine all postal packages arriving in Malta from outside the EC to determine hether import duty and VAT are payable. We also look for prohibited or restricted items such as drugs, indecent or obscene material, weapons, endangered species and counterfeit goods.

136. Do I have to pay duty or vat on goods sent to me from outside the EC ?
Most goods arriving in Malta from outside the EC are liable to any or all of these charges:

Customs Duty;

Excise Duty; and

VAT

These must be paid whether:

you purchase the goods or receive them as a gift;

the goods are new or used; or

the goods are for your private use or for sale.

137. Can I get relief from duty or vat on any goods ?
Yes. EC agreements allow relief from charges on certain imported goods if they:

have an intrinsic value of Lm11 although this particular relief does not include alcohol, tobacco products, perfume or toilet waters which are covered in Question 138. The intrinsic value is the actual value of the goods excluding postage, packing and other miscellaneous costs;

are gifts worth Lm23 or less which comply with the rules shown in Question 139; or

are entitled to any other relief, as explained in question 140.

138. Do alcohol, tobacco products, perfume and toilet waters qualify for any relief ?
Yes, but only if they are gifts which comply with the rules in Question 139 and are within the following allowances:

Tobacco Products

50 cigarettes; or

25 cigarillos (cigars with a maximum individual weight of 3 gms); or

10 cigars; or

50 gms of tobacco; or

a proportional assortment of the different products.

Alcohol

1 litre of distilled beverages and spirits over 22% volume;

1 litre of fortified or sparkling wine, and some liqueurs of 22% volume or less; or

a proportional assortment of the different products; and

2 litres of still wines.

Perfume and toilet waters

50 gms of perfume; or

0.25 litres of toilet water.

139. Is Duty and Vat charged on gifts ?
A gift is not free of duty and VAT merely because it is a gift. The EC agreement allows them to be imported free of charges only if they comply with these rules:

The value of the goods must not exceed 45 EURO (currently Lm23).

They must be correctly declared.

They must have been sent from a private person abroad to another person in this country.

The gift must be for the use of either yourself or your family.

There is no commercial or trade element and they have not been paid for either directly or indirectly.

Any alcohol, tobacco products, perfumes or toilet waters are within the allowances shown in Question 138 anything over those allowances is liable to charges.

They must be of an occasional nature only, such as a birthday or anniversary.

140. Do multi-gift consignments qualify for the relief ?
When a postal package contains goods that are clearly intended for several different people such as members of the same family, the limits described in Questions 138 and 139 can be applied to each individual person. Each recipient's goods must be;

individually packaged; and

specifically addressed to the recipient by the sender.

Where more than one package is addressed to a particular recipient the quantitative limits on tobacco and alcohol must be applied collectively to the total goods addressed to one recipient. If a consignment consists of items that can be separately valued, then as many items as add up to a value not exceeding the allowance will be granted relief. However, the value of an individual item cannot be divided. Any additional items are liable to charges. For example, if a consignment contains 5 items of Lm4 (10 EURO) each, only 4 will be eligible for the relief with charges payable on the value of the remaining item. An illustration of this is shown below.

DUTY AND VAT LIABILITY

RELIEF ALLOWANCE

ONE ITEM VALUED AT Lm23 (45 EURO)
Relief granted on total amount.

ONE ITEM VALUED AT Lm28 (55 EURO)
Duty and VAT payable on full amount (3.5% flat rate or normal duty rate).

FIVE ITEMS VALUED AT Lm4 (10 EURO) EACH
Four items relieved in full. One item duty and VAT payable on Lm4 (10 EURO) (3.5% flat rate duty or normal duty rate).

FIVE ITEMS VALUED AT Lm77 (150 EURO) EACH
Duty and VAT payable on full amount (3.5% flat rate duty or normal duty rate).

ONE ITEM VALUED AT Lm210 (410 EURO)
Duty and VAT payable on full amount at normal duty rate.

141. Are there any other reliefs available ?
There are a number of circumstances where relief from some or all Customs charges may be available.

If you think your goods may be eligible for a relief, you should contact our Front Office for further information.

142. Does the sender have to declare the goods ?
Under international postal agreements, the sender must make a Customs declaration on a form which, in most cases, will be attached to the package. The declaration includes a description of the goods, their value and whether they are gifts or commercial items. Any Post Office abroad should be able to give advice to the sender. It is in your own interest, whenever possible, to ensure that the sender abroad makes a complete and accurate declaration.

If no declaration is made, or the information given is inaccurate, the package may be delayed while we make further enquiries or in some cases the package and its contents may be seized.

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CHARGES

143. How are customs charges calculated ?
Charges are raised at the Post Office and Branches where the goods are imported. The Customs charge levied will depend on the type of goods imported and will be one or more of the following:

CUSTOMS (IMPORT) DUTY
This is charged as a percentage of the value. The percentage varies depending on the type of goods and their country of origin. Duty is charged on the price paid for the goods including any local sales taxes plus postage, packing and insurance costs. Where the value of private gifts falls between 45 EURO (Lm23) and 350 EURO (Lm179) per consignment, a flat rate of 3.5% import duty may be applied but only if it is to your advantage. The flat rate does not apply to VAT or excise goods such as alcohol and tobacco.

EXCISE DUTY
This is charged on alcohol and tobacco products and is in addition to Customs Duty. The Excise Duty on wines and spirits depends on the alcohol content and whether wine is sparkling or still. Excise Duty on cigarettes is based (worked out) on a percentage of the recommended retail price combined with a quantity charge. Excise Duty on other tobacco products is based on the net weight.

VALUE ADDED TAX
Import VAT is charged at the same rate that applies to similar goods sold in this country. The value of the goods for import VAT is based on the value for Customs Duty plus any duty charged.

144. Is duty charged on used items ?
Used items are still liable to the same duty and VAT rates as if they were new. However, their value may vary depending on their age or condition.

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EXPORTS

145. What do I need to do when I send a package abroad ?
You do not need a declaration for packages sent to other Member States of the European Community. However, a declaration is required for packages sent to the Special Territories, Turkey and all countries outside the EC. Any necessary preference certificate or licence should also be attached to the package.

146. Do I need to obtain evidence of posting ?
In most cases there is no need to obtain evidence of posting. However, when posting goods to destinations both inside and outside the EC you will need to obtain and keep a certificate of posting for goods subject to special controls or to support the zero-rating of the supply for VAT purposes.

147. Are there customs controls on goods exported from Malta ?
Although packages being exported are not subject to fiscal controls, we do carry out selective checks to ensure that no prohibited or restricted goods are being improperly sent.

148. Are there any other restrictions on what can be sent abroad ?
Customs and Postal administrations throughout the world set certain restrictions on what type of goods can be sent in the post. These should not be confused with Customs requirements and procedures.

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AUTHORISATION FOR A CUSTOMS WAREHOUSE

149. Is an authorisation required from customs ?
You need to be authorised by Customs to set up and operate a customs warehouse.

150. What types of authorisation are available ?
An application for a customs warehouse authorisation for use within Malta (Individual authorisation) only is made in accordance with Annex 67 (Customs Code Implementing Provisions Commission Regulation 2454/93).

If you want to apply for a customs warehouse authorisation and an authorisation for another customs procedure with economic impact (such as IPR or End Use Relief) using one form (Integrated authorisation), you should apply using the Form in Annex 67 (Customs Code Implementing Provisions Commission Regulation 2454/93).

An integrated authorisation cannot apply if the goods concerned are not the same for each customs procedure indicated on the application form. This does not necessarily mean the procedures have to be applied to the same goods in sequence. They can be alternative procedures for the goods.

If you require a customs warehouse authorisation that involves Malta and another Member State (Single authorisation), you must apply on the model application form, see Commission Regulation 2454/93 (Annex 67). Single authorisations are only applicable for private warehouses.

NOTE:
When applying for an integrated authorisation you should bear in mind that the period of authorisation relating to the other customs procedures will be valid for a specified period only. Declarations, whether normal or simplified, will still need to be made to move goods between the customs procedures on the same basis as if individual authorisations applied.

151. What are the basic conditions for authorisation ?
Before we authorise a new customs warehouse we must be satisfied that:

the applicant is established in the European Community

the warehouse is intended to be used primarily for the storage of goods

there is a genuine economic need for such facilities, either sufficient potential trade for a public warehouse to be viable or sufficient benefits to the applicant for a private warehouse (such as the amount of re-exports, customs duty suspended)

the applicant is able to comply with the conditions of authorisation; and

Customs has sufficient resources to oversee the setting up of the customs warehouse and also to carry out the necessary checks on the warehouse keeper's control systems and records and on the goods stored.

152. What additional conditions apply for a type E Warehouse ?
As a type E warehouse offers maximum flexibility we impose stricter authorisation requirements.

All of the following conditions listed must be met before we will approve a type E warehouse (these are in addition to the basic conditions in Question 151).

the administration and organisation of your business must be sound and strictly managed

your company's accounts and stock controls must be robust and managed to ensure that all commercial transactions are properly handled and recorded

your system must be capable of identifying the location and quantity of a given item held under duty suspension at any stage under a controlled inventory system

you must have a compliant revenue record (for example VAT returns and payments must be up-to-date)

if you are already authorised to operate a customs warehouse you must have a proven/satisfactory record of operation

payment of duties must be secured and subject to specific conditions imposed by Customs

your accounting system must be authorised by Customs; and

any changes to those parts of the business such as the structure, administration or accounting systems which directly affect the warehousing arrangements must be notified to Customs in advance.

153. How do I apply for an authorisation ?
After you have sent in your application you will receive an acknowledgement within 10 working days of your application being received, indicating whether it is satisfactory or containing a request from us for further information.

Each application is carefully considered and it is in your own interests not to take any action on the assumption that the authorisation will be granted automatically.

154. How do I apply for a Maltese (individual) authorisation ?
If you require your authorisation to cover the customs warehousing arrangements within Malta only, you should complete the application form in Annex 67 using the guidance notes on the form. Send your completed application to the Customs office and the customs office that agrees and issues your authorisation will be your supervising office.

155. How do I apply for an integrated authorisation ?
If you require an authorisation predominately for the customs warehousing procedure but also wish to include use of other customs procedures with economic impact (for example IPR or PCC), complete application in Annex 67.

If customs warehousing is not the main procedure, you should complete the application form for the procedure that is, with the additional requirements for customs warehousing added. You may find that it helps to complete separate application forms for each procedure to cover all your requirements. The completed application form(s) should be sent to Customs.

156. How do I apply for a single authorisation ?
You should apply in the Member State where your main accounts are kept. If that is in Malta, complete the model application form in Commission Regulation 2454/93 (Annex 67).

You should mark the form "SA-CPEI ONLY".

Satisfactory applications, will be forwarded together with a draft authorisation to the customs authorities of the other Member States where there are intended storage facilities, for agreement. Other Member States are allowed one month in which to reply. Once agreed, the authorisation will be issued. As the other Member States included on the application need to be consulted, you should apply at least 2 months before the intended start date of the customs warehouse authorisation.

157. What about Customs visits ?
We will arrange to visit you to confirm and clarify the information you have given us on your application form. This gives us the opportunity to explain the customs warehousing procedure in more detail by advising you of what you have to do, for example, keeping warehousing records. In turn, this visit enables you to raise any points that you do not fully understand. During the period of your authorisation further visits may be made to inspect or audit your records to ensure that you are complying with all the conditions of the your authorisation.

158. What happens when an authorisation is granted ?
Once you have been granted an authorisation it will be sent to you with an authorised copy of your application form and your authorisation number, together with any special conditions relating to its use. For individual authorisations, this certified copy will be your customs warehouse authorisation together with the annexes attached. Your authorisation number should be quoted on all official warehousing documents and in any correspondence with us.

If the authorisation is for a type A (public) warehouse you should also notify the users of your warehouse of the customs warehouse authorisation number, as they will need it when filling in official documents for their goods. Your individual customs warehouse authorisation will be issued without time limit.

159. What happens if an application for authorisation is refused ?
If your application is refused, you will not be eligible to receive goods entered for the customs warehousing procedure. We will inform you in writing of the reasons for our decision. You have the right to appeal against this decision.

160. What about alterations or amendments to your authorization ?
If any details of your business (for example name, address or ownership) change, you must advise your supervising office in writing. As the holder of the customs warehouse authorisation, you must ensure that all the details relating to the authorisation remain current and correct. If it is just a change in trading name or style, not involving the transfer of business to another legal entity, the existing customs warehousing authorisation may be allowed to continue in the new name or trading style. Otherwise, it will be necessary for you to re-apply for authorisation in the new name. If there is a change of premises, the warehouse identification number may remain the same. The transfer of the goods to the new premises should be treated as an inter-warehouse transfer using the SAD supported by a schedule of the goods. You can also request a change to the terms and conditions of your authorisation, for example the area designated as the authorized location. To do this you must contact your supervising office and provide details of the reason for the change. If it concerns a single authorisation, the Customs authorities in the other Member States may need to be consulted. If your request is agreed we will normally confirm this in writing and you should attach the notification to your authorisation. If appropriate, we will issue you with a new authorisation. We can also change an authorisation ourselves without a request from you if we think it necessary to meet any changed circumstances.

161. What should I do in the case of a transfer of an authorisation to another person or company ?
We do not allow the transfer of warehouse authorisation. If you sell your business as a going concern the prospective new owner must:

apply for a fresh customs warehousing authorisation

obtain a written agreement from you to cancel your own authorisation in favour of the buyer which must accompany the application; and

accept any liability for duties that may be unpaid on the part of the previous warehouse keeper, found by reference to the warehouse stock account or otherwise

The new customs warehousing application is considered on its own merits and is not automatically accepted just because a previous authorisation had been granted for the same premises.

162. Can I cancel an authorization ?
You can cancel your customs warehousing authorisation at any time by writing to your supervising office. In your letter you must give the date by which you will no longer have customs warehousing goods in stock. We may also annul your customs warehousing authorisation if we find it has been issued on the basis of incorrect or incomplete information. We can also revoke the authorisation when the requirements of the customs warehousing procedure or the conditions of your authorisation have not been complied with. This includes situations where we consider the warehouse is no longer used sufficiently to justify the authorisation. You will be notified in writing of any action to annul or revoke your customs warehousing authorisation. When your authorisation is revoked you will be given a date by which any remaining customs warehousing goods must be removed to another customs procedure.

163. What security will be required ?
In certain circumstance, before authorisation is granted, Customs may require you to provide security, normally in the form of a guarantee. We will review the need for security at regular intervals taking into consideration your compliance with the conditions of your customs warehousing authorisation. If you intend to store any goods which are sensitive (agricultural products) you will be required to ensure that any movements of these goods, for example between the Port and the warehouse or between warehouses are covered by a financial guarantee.

164. What are the record keeping requirements ?
It is a condition of your customs warehousing authorisation that you maintain sufficiently detailed stock records to identify:

receipt;

stockholding,

handling; and

removal

of warehoused goods held under the customs warehousing procedure using your authorization number. We need to be satisfied that the records give a complete history of the goods from the time of their entry to the warehouse to the time of their discharge from the customs warehousing arrangements.

The stock records must be kept at the warehouse premises for types A, C and D warehouses and at the company's Head Office for type E unless we allow otherwise. Normally your commercial records will be sufficient, but we may require you to adapt them for our control purposes. If you intend to keep computerised records you must contact us first to ensure that they meet the requirements of the customs warehousing procedure. You will be required to provide any technical information and assistance that we may need in order to check them. You must keep your stock records and any associated documentation for at least 4 years after the date of removal of the goods from the customs warehousing arrangements. If convenient, you can use a microfilm or computer medium but you must produce these records in a legible form on request and allow us to take copies as required. If you are a depositor in a public warehouse you must maintain records that provide evidence of the details of entry to the customs warehousing procedure and removal from the customs warehousing procedure.

165. What about maintaining an inventory ?
If your normal commercial stock control system can meet our requirements there is no need to have a separate list of stock numbers for our purposes. If your system does not meet the requirements you must maintain a stock number master list from which you must allocate a unique stock number to each consignment of goods entered to your warehouse. You can give separate stock numbers to different goods within the same consignment. The stock number will usually consist of the last 2 digits of the year, followed by a serial number in an annual series, such as 01/146. You must record in the stock number list (which identifies the consignment) the dates the account is opened and closed.

166. What are the stocktaking requirements ?
Periodically we will ask you to take stock. The timing and nature of the exercise will be agreed with you. You must also carry out a stock take if a stock discrepancy is likely because of incidents such as a fire or break-in at the warehouse. Otherwise, there is no obligation to undertake stock checks on a regular basis for our purposes unless we communicate this request to you.

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PLACING GOODS UNDER THE CUSTOMS WAREHOUSING ARRANGEMENTS

167. How are goods entered to the customs warehousing procedure ?
Goods can be entered for the customs warehousing procedure in any of the following ways:

directly from import or from a free zone under the normal arrangements or using simplified procedures

after inward processing relief (IPR); or Processing under Customs Control (PCC) under the normal arrangements or by the use of the transfer procedure

after a claim for remission or repayment of import duty has been allowed in respect of rejected imports; or

after Temporary Import (TI) using the normal procedures.

Goods already under the customs warehousing procedure can be re-warehoused in either of the following ways:

after being temporarily removed from the warehouse; or

on transfer from a customs warehouse in Malta or another EC Member State.

168. What is the initial action required by depositors at a type a warehouse ?
First, you must confirm with the warehouse keeper that the warehouse you wish to use is authorised for the storage of the type of goods you wish to warehouse. You can then agree the terms of storage and the date of expected arrival of the goods as matters of ordinary commercial practice. If the goods you intend to warehouse fall under specific HS Codes (e.g. some agricultural products, tobacco and alcoholic products), guarantee arrangements must be in place before the movement of such goods is commenced.

169. How must I declare the goods for the customs warehousing procedure ?
To enter goods to the customs warehousing procedure using the normal arrangements, you must declare the goods for entry to customs warehousing on the SAD.

170. Can I authorise an agent to act on my behalf ?
You can use an authorised agent to complete your entries on your behalf but you must ensure that you give clear written instructions for the goods to be entered to customs warehousing.

Direct representation - the third party makes an entry in your name and on your behalf but you are still responsible for any customs debt that may arise if an entry is incorrectly made.

Indirect representation - the third party makes an entry in their own name and they are jointly and severally liable with you for any customs debt that may arise if an entry is incorrectly made.

If an entry on a SAD is required you must ensure that the third party sends you a copy of the entry to check that the details and customs warehousing CPC used are correct. If you are a depositor using a type A warehouse you should also ensure that a copy of the entry is sent by the agent to the warehouse keeper.

Note: Third parties who enter goods to the customs warehousing procedure without written authority of the person in whose name the entries are made, will be liable for any customs debt incurred.

171. Can I amend an entry ?
If goods are entered in error to another customs procedure or to free circulation instead of customs warehousing you may be allowed to amend the entry provided that:

the application for amendment is received as soon as you become aware of the error and within 3 months of the date of entry;

the customs warehouse intended for storage was authorised to receive the goods at the time of entry;

the nature of the goods has not been altered and use of the goods has not contravened custom warehousing requirements; and

the goods will be immediately entered to customs warehousing.

To request amendment of the entry send a copy of the original documentation together with any evidence to support your request.

172. What are the responsibilities of the depositor ?
Once we release the goods for customs warehousing, it is your responsibility to ensure that:

(a) the goods are taken directly to the warehouse stated on the SAD without any delay and delivered intact. The goods must be transported direct to the designated premises and entered to the customs warehouse procedure as soon as possible;

(b) if you are using a type A warehouse, you provide the warehouse keeper with a copy of the declaration before or at the time of arrival of the goods at the warehouse;

(c) you provide the type A warehouse keeper with an explanation of any discrepancies that are brought to your notice;

(d) duties due on any discrepancies in goods received at the customs warehouse are paid if they cannot otherwise be properly accounted for;

(e) if you require evidence that goods previously entered for IPR have been entered for customs warehousing, you provide the warehouse keeper with 2 copies of the declaration. One copy will be sent to the IPR trader with the warehouse keeper's endorsement of receipt; and

(f) if you have a preference certificate for the goods, you should pass it to the warehouse keeper to retain until needed for a declaration to free circulation.

173. What are the responsibilities of the warehouse keeper ?
You can usually take goods into the warehouse without having to produce them to us first. It is your responsibility to:

(a) if specified in your authorisation, notify the supervising office for your warehouse of the arrival of the goods. The supervising office will already have agreed the method of notification with you;

(b) examine the consignment carefully to ensure that the number of packages or weight and types of goods received agree with the goods described in the customs warehousing declaration;

(c) ensure your customs warehouse authorisation covers the goods;

(d) for goods in containers, check:

the identifying number of any seals; and

whether they are intact;

(e) allocate to each document the next consecutive stock number or stock numbers from the stock number master list;

(f) enter in the stock record details of the goods actually received and check whether the quantity is more or less than the quantity declared on the entry for warehousing;

(g) establish and resolve any discrepancies; and

(h) if you receive 2 copies of the declaration for endorsement as evidence for IPR purposes endorse the reverse of both copies with:

stock reference number;

quantities and values of the warehoused goods;

your signature and the date; and

any discrepancies found between the details on the declaration and the goods actually warehoused.

You should retain one copy and send the other to the IPR trader.

In cases of discrepancy (if you do not own the goods) you must inform the depositor or the owners of the goods immediately so they can investigate what has happened and provide you with a satisfactory explanation and/or supporting evidence. Goods received in excess of the entered quantity must be regarded as dutiable and warehoused provisionally until the matter has been resolved.

It is not necessary for you to routinely report to your supervising office all discrepancies between import entry documents and goods received but you should have in place a system to investigate and resolve under or over-shipments. A report will only need to be made if the discrepancies are not resolved within 14 days.

If you receive a preference certificate, you should endorse it with the stock reference number for the consignment it covers and the date of warehousing of the goods. This is to avoid the risk of losing preferential treatment if the certificate's time limit expires before the goods are removed from the warehouse and declared to free circulation.

174. What details are required in the stock records ?
The following details are required in the stock records:

(a) for goods in containers, record in the stock account:

the identifying number of any seals; and

whether or not the seals were intact on arrival;

the following details, which should be the same as those declared on entry to customs warehousing:

status (T1);
- marks and numbers of consignment and description of the goods;
- the CPC used; and
- the value, commodity code and quantity established on the declaration entering the goods to the customs warehousing procedure;

(b) the reference number and date of the declaration entering the goods to customs warehousing procedure.

175. What method should I use to store or stack the goods ?
You may choose where to store the goods in the authorised warehouse area, but do not stack them so closely together that they cannot be properly or safely identified, counted or examined. You must also make sure that goods are not placed in a way that is in itself dangerous (for example in stacks likely to collapse or blocking emergency exits). If you wish to store Community and non-Community goods in the same storage area you must be authorised to do so.

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HANDLING OPERATIONS

176. Is any handling operation permitted in a customs warehouse ?
While the main purpose of the customs warehousing procedure is storage, minor handling operations may be allowed while the goods remain under your control. If you wish to carry out any handling operations in your warehouse you will need to be authorised. If you deposit goods in a type A warehouse and want to carry out handling operations on your goods you must make sure that your warehouse keeper has been authorised for the handling operations you wish to undertake.

177. How do I apply for an authorisation ?
If you wish to carry any handling operations on goods in your warehouse you must submit an application to do so in advance of the operation taking place. If the forms of handling are to be a regular feature of your business we may grant you a general authorisation. This will be shown in Box 23 of your warehouse authorisation (Annex 67). All other cases will be treated on an individual basis. The authorisation will indicate whether we require notification before the operation takes place. We may revoke the authorisation at any time for reasonable cause.

178. What operations can be performed on warehoused goods ?
Minor handling operations may be allowed to:

ensure warehoused goods are preserved;

improve their presentation or marketable quality; or

prepare them for distribution or resale.

Annex 72 of Regulation EC 2454/93 (Implementing Provisions as amended) describes and lists the allowable handling operations that can be authorised. If any operation is not on the list, you have no legal basis to carry it out on goods while they remain in the customs warehousing procedure. An example of an acceptable handling operation is the installation of a radio in a motor vehicle. An example of an unacceptable handling operation is the dyeing of cloth. If the operation you wish to undertake is not one of those listed you should discuss with Customs officials whether another customs procedure such as IPR would be more appropriate for your needs.

179. What procedure must I follow when the handling operation alters the amount of duties payable ?
In some circumstances the handling may increase the value and/or change the nature of the goods, which in turn affects the amount of duty payable. (This does not affect type D arrangements because the nature, value and quantity of the goods have already been determined on entry to the customs warehousing procedure.) You may request that the nature, value and quantity of the goods that would have been taken into consideration, had the goods not undergone the handling operation, be used. However, you must request all three (nature, value and quantity), they are not individual options. A request to use the pre-handling details should be made by completing an INF 8 form. This form is used to ensure that the correct duty rates are applied following the handling operations in a customs warehouse. The INF 8 can be requested when the goods are entered for release to free circulation or to another customs procedure. A specimen of Form INF 8 is reproduced in the Implementing Provisions.

180. What are the details required in the stock records ?
You must record in the stock records the quantity and description of the goods taken into the handling operation and the quantity and description of the products resulting from the operation. If you intend to make a request on an INF 8, then the value, quantity and nature of the goods before the operation took place must be entered in the stock records. Otherwise, we may refuse the application of the pre-handling details and then the particulars relating to the goods at the time of removal must be used to calculate charges.

181. What about the completion of more complex operations in a warehouse ?
Operations or processes not allowed under customs warehousing law can be carried out on the premises or at a type E storage facility but you must first remove the goods from the customs warehousing arrangements. You do this by entering them to:

free circulation; or

inward processing relief providing some of the processed products are to be exported outside the Community; or

processing under customs control.

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TEMPORARY REMOVAL

182. Can I remove temporarily goods from a customs warehouse ?
In certain circumstances goods may be temporarily removed from a customs warehouse. You will need to be authorised before you can take advantage of this facility.
183. How do I apply for an authorisation ?
If the temporary removal of goods from your warehouse is a regular requirement of your business then you can apply for a general temporary removal authorisation. If granted, this will be included in your warehouse authorisation and will replace the need for you to submit a separate application for each removal. We will set out the method that you must use to advise us of when such removals take place.

If temporary removals are not a regular requirement of your business you can apply for an authorisation for individual removals. You must ensure that the goods are not removed before we grant you the authorisation.

184. What are the conditions for authorisation ?
The goods must be returned to the same custom warehouse from which they were temporarily removed within 3 months from the date of removal. If you find more time is required then you must apply to your supervising office setting out the reason the extension is required. Provided authorisation for minor handling has been granted goods may also undergo the usual forms of handling while they are temporarily removed from the customs warehouse.

185. What details are required in the stock records
You must record in the stock records:

the date of removal of the goods and the date of their return;

the quantity and description of the goods temporarily removed;

their temporary location; and

details of any handling that have taken place.

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CO-STORAGE (INCLUDING COMMON STORAGE)

186. What is co-storage ?
We can allow you to operate co-storage of Community goods and non-Community goods in your customs warehouse to enable you make full use of the available space. Co-storage can also apply to goods in the IPR and/or the PCC arrangements stored in a customs warehouse. We may specify the requirements for identifying co-storage goods, to ensure that the customs warehousing goods are readily distinguishable from any others. However, co-storage must not be allowed to affect the operation of the customs warehouse arrangements.

187. What is common storage ?
Common storage is the co-storage of the same type of goods having different customs status where it is not possible for you to identify at all times the customs status of the goods. We can only authorise common storage if the goods are equivalent, that is, sharing the same 8-digit commodity code, the same commercial quality and the same technical characteristics. It can apply to goods in the IPR with equivalence arrangements but not to Community goods known as pre-financed goods stored under the customs warehousing procedure. We consider common storage is more appropriate to private warehouses where the warehouse keeper is also the depositor.

Note: Any goods that are subject to excise duty, as well as customs duty cannot be stored under the common storage facilities, as there is no provision for equivalence in excise law.

188. How do I determine if goods are equivalent ?
To help you decide if product A is equivalent to product B, consider the following questions:

Are A and B mutually interchangeable ?

Would a customer ordering A accept B instead and vice-versa ?

Do you differentiate between A and B for any reason ?

If the answer to the first two questions is "yes" and to the third "no", then assuming that A and B share the same first 8 digits of the commodity code, they will can usually be treated as equivalent for common storage purposes.

189. How do I apply for common storage ?
Usually you will apply for co-storage at the same time as applying for a customs warehouse authorisation. When you apply to use common storage, you must provide sufficient information to enable us to make a comparison between the goods. You must state factors common to the equivalent goods and the customs warehousing goods and suggest how this can be checked (for example technical specifications or samples).

We will need to be satisfied that your records and/or systems can identify, monitor and correctly account for goods that are stored in common storage. The records and/or systems should contain safeguards to prevent the removal to free circulation of goods liable to restrictions (for example goods being imported to free circulation without an appropriate valid licence being available). We also need to be sure that authorising common storage does not adversely affect the customs warehousing procedure or any subsequent customs procedure (for example, it is not being used to circumvent anti-dumping duty requirements).

190. What procedures are available when customs warehousing goods are being transferred ?
When transferring certain agricultural goods and excise goods, the goods must be covered by a guarantee under conditions equivalent to those provided for in the transit procedure. This includes the movement of such goods under the customs warehousing procedure to/from the port or between sites/warehouses approved within the same authorisation.

191. What methods are available for transferring goods ?
There are five methods of transferring goods under the customs warehousing regime:

Methods for transferring goods under customs warehousing regime

Community Transit

3 copy SAD (normal procedure)

2 copy SAD

Commercial documentation

W8 (this document can only be used when both customs and excise duties are being suspended)

The method of transfer you intend to use should be specified in your application/authorisation.

192. How are inter-warehouse transfers between EC member states effected ?
Transfers between warehouses in different EC Member States will follow the 3 copy SAD procedures. To use any of the alternative methods of transfer documentation you will need the agreement of the Member States involved.

193. What action is required by the warehouse keeper for the despatching warehouse in Malta ?
The movement of goods in and out of Malta form part of the national trade statistics and there are the following requirements for transfers of this nature:

When goods are transferred to a customs warehouse in another Member State you, as the despatching warehouse keeper, must also complete copy 2 of the SAD for statistical purposes, and clearly mark it "WAREHOUSED GOODS. STATS PURPOSES ONLY" in red ink at the top of the form. It must then be sent to your supervising office.

194. What action is required by the warehouse keeper for the receiving warehouse in Malta ?
When goods are received from a customs warehouse in another member state you, as the receiving warehouse keeper, must provide us with a photocopy of copy 4 of the SAD for statistical purposes. You must clearly mark it "WAREHOUSED GOODS. STATS PURPOSES ONLY" in red ink at the top of the form. It must then be sent to your supervising office.

195. How is transfer of goods within an integrated authorisation effected ?
If an integrated authorisation is held goods can be transferred from customs warehousing to another Customs Procedure with Economic Impact (CPEI) or vice versa by entry in the records, provided that the movement between customs procedures does not create a customs debt. (If as a result of the transfer duty is due an entry must be submitted on the SAD.) The level of information provided should be sufficient to allow the goods to be traced from the initial entry to final disposal.

196. How is transfer of goods within a single authorisation effected ?
Transfers of goods (between locations/named operators) can be made within a single authorisation, without official documentation subject to the agreement of the Member States involved. The authorisation holders commercial records must show at all times the current and past locations of the goods.

197. Are there any additional considerations for receipts by a type a warehouse ?
You should enter in your stock records the name of the depositor for the goods being transferred into your warehouse.

Table of Contents

REMOVALS FROM CUSTOMS WAREHOUSE AND THE USE OF NORMAL PROCEDURES

198. What does removal from warehouse mean ?
Removal means the removal of goods from the customs warehousing procedure. This could coincide with the physical removal of goods from the warehouse premises or the goods may physically remain in the warehouse premises.

Goods may be removed for:

free circulation including onward supply to another Member State;

re-export outside the Community (including duty free sales to entitled travellers);

transfer to another customs procedure with economic impact (such as IPR);

despatch to another Member State under the Community Transit procedure;

transfer to a free zone; or

shipment as duty-free stores.

Removal also covers the transfer of goods between warehouses and temporary removals.

199. Where is the entry presented ?
The SADs for removals should be completed and signed then sent together with any documents (licences, etc) to your supervising office to be allowed to effect such removals.

200. What evidence is required for removal of goods to free circulation ?
You must not allow goods to leave your warehouse until you have received evidence that we have released the goods to free circulation. Otherwise you have failed in your responsibilities under your customs warehouse authorisation and could be liable to any duties due.

Evidence of our release of the goods can be either:

a copy of the SAD certified by us; or

a removal note certified by us.

201. What is the date from which tariff measures (duty rates, anti-dumping and licensing restrictions) apply ?
The measures that apply are those in force at the time the entry is received by the EPU regardless of when the goods are intended to be physically removed from the warehouse. Any import licence, Documentary Proof of Origin, CAP licence or preference certificate required should be presented with the SAD.

202. What about IPR goods diverted to free circulation ?
You may have warehoused (or bought in warehouse) goods for export outside the Community, under the IPR arrangements. The duty chargeable is usually the amount relieved or paid when the goods were first entered to IPR. For goods first entered to IPR in another Member State, you will need to obtain a Form INF 1 from your supplier showing what that amount was. Goods diverted to free circulation are subject to compensatory interest payments.

203. May I remove goods to other customs procedures with economic impact ?
You may remove goods from the customs warehousing arrangements and enter them to another customs procedure with economic impact (for example IPR or PCC) by completing the SAD. Before you allow the goods to be removed from your warehouse, you must have evidence that they have been entered into the new procedure.

Note: Should the goods being transferred from the customs warehousing procedure to another customs procedure be certain agricultural products or excise goods you should ensure that the appropriate guarantee is in place before the goods leave your warehouse.

204. Can warehoused goods be removed to a free zone ?
If the premises or storage facilities of the customs warehouse are at a free zone you may remove goods from the customs warehousing arrangements and enter them to the free zone by completing the SAD. For evidence to support the removal, you should have a copy of the SAD, together with a receipt for the goods issued by the free zone.

205. What if I want to destroy warehoused goods ?
If you want to destroy warehoused goods (because they are damaged or outdated for example), you should write to your supervising office giving details of the goods and intended place and means of destruction. We will indicate whether or not we wish to attend. There is no need for a customs declaration to be made but the stock records should be adjusted if the remains after destruction do not have an economic use.

206. How can I remove goods using community transit procedure ?
The Community Transit (CT) procedure indicating T1 status may be used if:

(a) you want to move the goods to another place in the EC; and

(b) have not discharged the customs warehousing procedure by making a declaration for another customs procedure, re-export or entry into a free zone.

(c) CT documentation needs to be presented at an office of departure, which could be the one nearest to the warehouse or, if the goods are to leave Malta, the one at the port/airport. You must not allow goods to leave your warehouse until you have received evidence that we have accepted the Community Transit (CT) documentation and released the goods. The evidence is a copy of the CT documentation (SAD), which should be completed and certified by us. Failure to provide this information will mean that you have not fulfilled your responsibilities under your customs warehouse authorisation and could make you liable to any duties due.

207. How do I move goods to the office of exit under the customs warehousing arrangements ?

We can allow you, as part of your customs warehouse authorisation, to move goods from your warehouse premises/storage facility to the Office of Exit where they are removed from the Community (for example port, airport) for re-export under the customs warehousing arrangements. This has the advantage of not requiring Community Transit documentation to cover the movement of the goods to the port etc. However, you remain responsible for the goods and your liability ends only when you obtain appropriate evidence that the goods have been re-exported. The appropriate evidence of export is a copy of the SAD endorsed by Customs, bearing the appropriate CPC, plus the supporting commercial evidence. This evidence should be retained by the warehouse keeper. Notification requirements for these removals and acceptable evidence of re-export will be included in your authorisation. Any movements of certain agricultural products and excise goods must be covered by a guarantee under conditions equivalent to those provided for in the transit procedure. Otherwise, you must use Community Transit procedure to move the goods from your custom warehouse premises/storage facilities.

208. How are duty charges calculated ?

You can work out the duty charges on the goods by using the following elements:

the tariff description and rate of duty;

the quantity; and/or

the value.

Use these elements including the official rate of exchange (published monthly) applicable at the time the goods are removed from the customs warehousing arrangements. This is the time the SAD is accepted by the EPU, which is usually the date you present it. The exceptions to this rule is where:

(a) you make removals from a type D warehouse or a type E warehouse using the type D arrangements where the rules of assessment for customs duty are established on entry into the customs warehousing procedure (unless the warehouse keeper requests the use of those applicable on removal); and

(b) where the INF8 procedure is being used.

In these instances the calculation of duty is based on the rates in force on the date the declaration to the customs warehousing procedure is accepted. You may only exclude the cost of warehousing and any handling from the value for duty if it is possible to distinguish between the additional costs and the price of the goods actually paid or payable.

209. How do I classify warehoused goods ?

Generally, goods in the customs warehousing procedure do not change their nature. However, goods entering a warehouse as individual items/parts may be classified as a finished article when removed. The parts must be presented together in quantities that make a specific number of the finished article. The items must contain a non-community element forming the essential character of the finished article. This can only apply if the elements (value, quantity) are those relating to the time of removal. If the goods have had their nature altered by a form of handling, you can request, on an INF 8, to calculate duty on the elements that applied to the goods before the handling operation took place.

210. May I claim tariff preference or tariff quota rates ?

You may be able to claim a reduced or zero rate of duty under the tariff preference or tariff quota arrangements. If you remove part of an imported consignment to free circulation the preference document must be presented with the first removal. A photocopy of the document may be presented for subsequent removals from the same imported consignment and part removals written off against it. A claim to tariff quota relief is made when goods are entered to free circulation by entering the tariff quota serial number in Box 38 of the entry. The entry must be endorsed on the top, in red, with the words "Tariff Quota".

Note: All preference imports are liable to be checked. Where checks show that the goods do not qualify for preferential tariff treatment duty will be payable at the full (non-preferential) rate. Where a warehouse keeper makes a customs declaration as an indirect representative, both depositor and warehouse keeper are jointly and severally liable for the debt. Community legislation allows for the collection of back duty for a period of up to 3 years after the goods have been imported.

211. When does import VAT become payable ?
Import VAT becomes payable when goods are removed from the customs warehousing arrangements unless:

they have also been warehoused in an excise warehouse suspending payment of excise duty,

they qualify for relief from import VAT;

they are for onward supply to another EC Member State where only the customs duty is paid; and

ex IPR (drawback) goods now being released to free circulation.

212. What are duty-free stores ?
Duty-free stores are goods that will be used, consumed or sold on an "entitled" ship or aircraft leaving Malta. They include fuel, foodstuffs, spare parts and other items of equipment whether or not for immediate fitting.

213. What are goods for consumption on board ?
"Entitled" ships or aircraft are those, which are leaving Malta on a journey for which we allow the shipment and use of duty-free stores. For an aircraft to be entitled, it must be departing on a flight to a country outside Malta. Goods intended as stores, but sent out of Malta as freight to supply vessels etc abroad, must use the export procedure.

214. Who is entitled for goods for duty free sale on board ?
"Entitled" ships or aircraft are those that are leaving the EC on a journey for which we allow the shipment and use of duty-free stores. For an aircraft to be entitled, it must be departing on a flight to a country outside the EC. Goods intended as stores, but sent out of Malta as freight to supply vessels etc abroad, must use the export procedure.

215. What is the removal procedure for duty-free stores ?
Warehoused goods can be removed for shipment as duty-free stores on entitled ships or aircraft against commercial documents. Authorisation to use the procedure should be included in your customs warehouse authorisation and will specify the notification and documentation requirements.

216. What action is required by the shipper/agent for ships' stores ?
When ordering removal of the goods from the warehouse you must include on the commercial document (despatch note) all of the following:

a document serial number;

the name and address of the warehouse;

the warehouse stock number(s);

the number and description of packages;

the quantity and description of goods;

the ship's name/aircraft flight number and destination; and

the following signed and dated declaration and undertaking: "This vessel is entitled to receive duty-free stores. I undertake to pay to Customs the amount of duty/tax due on any or all of the goods which are neither shipped intact nor re-warehoused in a customs warehouse if not so shipped".

The despatch note must have provision for a dated certificate by the warehouse keeper that the particulars of the goods are correct and agree with the stock account and provision for a certificate by the authorised person that the goods have been received on board.

When the goods have been shipped you must return to the warehouse keeper a copy of the dispatch note certified accordingly (or indicating other disposal of the goods).

217. What action is required by the warehouse keeper for ships' stores ?
You must:

certify on the despatch note that the goods removed from the warehouse are those shown on the commercial document;

check that the shipper has included and signed the declaration of entitlement and undertaking to pay the duty on any goods not properly shipped;

record the removal in the stock account; and

notify Customs as specified in your authorisation.

Unless we wish to examine the goods you may allow removal as soon as you have completed the above actions.

If a copy of the despatch note certifying receipt of the goods on board the ship or aircraft is not received within 2 months of removal, you should check with the shipper and report all such "unconfirmed" shipments in writing to your supervising office. Keep copy despatch notes and commercial documentation in your warehouse records for our inspection if necessary.

218. What action is required for aircraft stores ?
The procedure for aircraft stores is more or less similar to those for ships stores.

219. What are the responsibilities of a warehouse keeper for removals ?
On receipt of evidence of release from Customs (for example copy of SAD) you must check that the details of the goods on the evidence agree with your stock records. Any discrepancies should be resolved with the depositor or the provider of the evidence.

You must include the following details in the stock records:

the number and description of packages;

the quantity; and

the identifying reference of the removal evidence, for example date of acceptance and EPU reference number of the SAD.

This should be completed before the goods are removed.

It is an offence to remove or allow goods to be removed from a customs warehouse unless we have authorised the release or you have other evidence that we have allowed their release. If you fail to comply we may withdraw your warehouse authorisation and/or take legal proceedings. You will be required to pay the duties on any goods not accounted for satisfactorily.

220. How do I close the accounts ?
You must balance and close the stock record when all the goods have been recorded as removed. If the same goods had been entered to customs warehousing on different declarations they should be discharged against the earliest declaration when removed from customs warehousing. If you wish to discharge removals against specific entry declarations, you should contact your supervising office.

221. How must I declare goods for export ?
When you export goods you must enter details of the goods on a SAD, and present it to us at the place of export. If you want to export goods under the customs warehousing arrangements, you must normally present a full export declaration before the goods are shipped. This is because we may need to examine the goods before export, to confirm the identity of the exported goods. You will need to lodge with Customs an official version of the SAD copy 3 or an approved electronic version.

222. What satisfactory evidence for re-export must I provide ?
Goods removed for re-exports are not to be closed in the stock records until satisfactory evidence of re-export has been received. This evidence should be:

the declaration for re-export, for example the copy of the SAD for direct re-exports from Malta; and

confirmation that the goods have actually left the Community in the form of Bills of Lading or Airway bills. You will need to produce a certified SAD copy 3 from your computer system. The document must contain a unique declaration number allocated by our electronic declaration system. For goods despatched to other Member States you should have evidence that the appropriate Community transit document was accepted at the office of departure.

Table of Contents

AUTHORISATIONFOR END-USE: TYPES AND HOW TO APPLY FOR THEM

223. Do I need an authorisation to import end-use goods ?
You need to be authorised to import or receive end-use goods. Authorisations are issued to the person importing or having goods imported.

If you are a processor of end-use goods you must be authorised to receive such goods from the importers either in your own right or as a named processor in the importers authorisation.

224.What types of end-use authorisation are available ?
There are four types of authorisation. The type of authorisation you need will depend on the operation you are involved in, the number of entries you will make and whether you use Simplified Procedures for declaring goods.

Simplified Authorisation: This simplification is only available for end-use operations carried out in Malta. The simplification can be used if you import goods in Malta either on a one-off basis or for simple operations eg importation of a single aircraft or an aircraft engine. In addition you must wholly assign the goods to the prescribed use and operations must be carried out solely in Malta. Application is made on a simplified application Form and presented with the import declaration.

National Authorisation: If you are a regular importer or receive end-use goods or do not meet the conditions for a simplified Form authorisation you must apply for an authorization on the model application form in Annex 67 (CCIP 2454/93). This can cover processing on your behalf by other companies where operations are solely carried out in Malta.

Application must be made prior to import naming in Box 1b of the application form the other parties who will import or process goods under your authorisation. As the authorisation holder you will be responsible for duty and associated charges for all goods entered to the authorisation including those imported by named processors on your behalf.

Single Community authorisation: Where processing or transport of goods involves more than one Member State. Application is made on the model form (Annex 67) in Commission Regulation 2454/93.

Integrated authorisation: For traders intending to import and process various goods which require authorisation for end-use and another custom procedure eg IPR. Application is made using the model form in Annex 67 (CCIP 2454/93).

225. How do I use a Simplified Authorisation ?
When you import goods to end-use you will need to complete the simplified Form in duplicate and attach the first copy to the SAD. The second copy of the Form should be retained in your records. An agent who has your written permission to enter goods on your behalf may also complete and sign the Form. Acceptance of the entry will be your authorisation.

226. How do you apply for an authorisation for use in Malta ?
Complete model Form Annex 67 using the guidance notes on the form. If the application covers more than one company in Malta give details of the goods to be imported and operations that will be carried out by each processor including the sequence and locations. You will be responsible for any duty and associated charges for all goods imported under your authorisation including those imported by your named processors on your behalf. Once agreed your authorising office will issue an authorisation and end-use authorisation number, together with any special conditions relating to its use.

227. How do I apply for a single community authorisation ?
Application should be made in the Member State where your main accounts are kept and where part of the operation will take place. If this does not suit your business needs you can apply at the place where the goods will be assigned to the prescribed end-use.

You need to complete your application on the model form (Annex 67) in Commission Regulation 2454/93.

You should mark your application SINGLE AUTHORISATION in red and provide details of:

the names and addresses of all the operators, both in Malta and in other Member States;

the goods to be entered, the ports through which they are to be imported into the Community, the processing operations that will take place in each Member State including the sequence and the locations;

the address of the Customs office for each location;

the rate of yield for each processing operation and means of identification;

details of the prescribed end-use and the place(s) where goods will be assigned to the prescribed end-use;

any simplified procedures for entry or transfer you wish to use;

what records you will keep and how they may be verified;

how goods will be transferred between operators; and

confirmation that all operators named in your application are aware of their involvement.

We are not able to provide a list of Customs offices in other Member States. You may need to obtain this information from the actual importer of the goods for process or from a freight agent if you employ one in the importing Member State.

Normally other Member States will accept applications in English but we may have to ask you to provide a translation of your application, or parts of it, in the language of the other Member State(s) involved.

If your supervising office is content with the details and supervision arrangements the application will be forwarded for agreement, together with a draft authorisation, to the Customs authorities of the other Member States where end-use operations will take place.

Other Member States are allowed one month in which to reply. Because of the need to consult the other Member States included in the application you should apply at least 2 months before you need to use it.

Once agreed your authorising office will issue an authorisation and end-use authorisation number together with any special conditions relating to its use.

228. How do I apply for an integrated authorisation ?
If you need an authorisation to include the use of other Customs procedures (eg IPR, Customs warehousing) as well as end-use, you can apply for a single integrated authorisation. If the main Customs procedure required is IPR, Customs warehousing or OPR you should complete the application using the appropriate form for that procedure with any additional requirements for end-use added.

229. May retrospective end-use authorisation be issued ?
Retrospective authorisation may be issued in certain circumstances but will not be accepted as a regular means of approval. All requests are considered on an individual basis. You will need to state the reasons why retrospective authorisation is required and be able to produce records in support of your application showing that the goods in question have been put to the prescribed use.

In order for your application to be considered there are basic criteria that have to be met:

Exceptional circumstances must apply. Retrospection cannot be regarded as a regular or recurring form of authorisation;

You will need to establish that there is an economic need for authorisation. Where necessary, an economic test will be carried out;

No obvious negligence or attempted deception should be associated with the application;

All periods of validity and throughput periods must be/have been adhered to;

The applicant’s accounts must be able to show that all the requirements of end use can be deemed to be met; and

All the formalities of the arrangements must be regularised by amending any relevant declarations.

Any period of retrospection cannot be dated beyond one year from the date your completed application is received.

230. What are the record keeping requirements ?
You must keep records of all goods you enter to end-use. These must show:

what the goods are;

when you imported or received them from another trader;

that the goods have been put to the prescribed end-use; and

details of any by-products resulting from any processing that has taken place.

You can normally use your commercial records, however, you may be asked to adapt them, if necessary, to provide the information needed to claim relief.

If you intend to keep computerised records you must contact Customs first to ensure that these records meet the requirements of end-use relief. You will be required to provide any technical information and assistance that we may need in order to check them.

You must keep your records for four years after the goods have been put to the prescribed end-use. All Customs documentation should be retained for 4 years and cross-referenced to import invoices and sales invoices.

231. What customs checks are carried out ?
You may receive a visit from your supervising office to ensure that your records and systems are adequate for our purposes and to clarify details regarding the goods that you enter and process. During your period of authorisation further visits may be made to inspect your records and to ensure that you are complying with all conditions of the authorisation.

If you have a Single Community authorisation issued in Malta, a Maltese Customs office will be your supervising office. Visits to check operations or records in another Member State may be made by Customs in those Member States. These arrangements will generally have been agreed with the Maltese Customs office when the authorisation was being considered. If a Single Community authorisation is issued in another Member State, Customs in that Member State will be responsible for monitoring your operation. They may request information from Maltese Customs or require Maltese Customs to carry out checks on your operations in Malta.

232. How long does an authorisation last ?
The length of time an end-use authorisation can be issued for will depend on the type of goods and processing involved. The period of authorisation should not normally exceed 3 years from the date the authorisation takes effect. However in certain circumstances longer periods can be approved where there are duly justified good reasons. When the authorisation expires you can apply for it to be renewed if you have a continuing need to use the arrangements.

233. What is the rate of yield ?
Rate of yield is the quantity of processed products made from a given quantity of imported goods. The expected rate or how the rate will be calculated should be specified in your application. If the application covers more than one process/type of goods, give the rate of yield for each processing operation and say how the end-use goods will be identified in the processed products. In cases where the rate of yield is not known at the time of application or where the rate may vary, you should record on your application that you intend to use your production records as the basis for establishing the rate. If you have entered the rate of yield on the application/authorisation form and the rate of yield changes or is incorrect you must inform your supervising office immediately.

234. What is the time-limit for putting the goods to the prescribed end-use ?
As a condition of end-use you must put the goods to the prescribed end-use within a certain time limit or dispose of them as authorised. This period starts from either the date of entry into free circulation or the date the end-use goods were transferred to you. Goods can 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 may be after the period of validity has expired. You should specify in your application the period that you require to meet your business needs. As a general rule the period should not normally exceed one year but in certain industries longer periods may be required eg for aircraft, shipwork, and where there are sound business reasons, such longer periods will be approved. If, after authorisation, you subsequently find you need a longer period to put the goods to the end-use, you should apply to your supervising office for an extension.

235. What security is required ?
Security is not usually required but if it is your local supervising office will advise you.

236. Can an application be refused ?
Except where a single Community authorisation is applied for we are required to issue a decision on your application within 30 days of receipt of all necessary information. If your application for authorisation is refused you will not be eligible to claim the relief. You have the right to appeal against the decision.

237. Can I make alterations or amendments to your authorisation ?
If any details of your business (eg name, address or ownership) change, you must advise the Customs office that issued your authorisation. In cases involving a change of name or ownership it may be necessary for you to re-apply for authorisation in the new name. As the holder of an end-use authorisation you must ensure that all details relating to the authorisation remain current and correct. If you wish to make any changes to the terms and conditions of your authorisation, you should contact your authorising office. If you have a single Community authorisation Customs authorities in other Member States may need to be consulted. If appropriate, a new authorisation will be issued.

238. Can I apply for renewal of an authorisation ?
For Annex 67 end-use authorisations you should apply in writing approximately two months prior to the expiry of your current authorisation. In your letter you must advise Customs if any of the relevant facts (previously completed on your original application), have changed.

Note: As the authorisation holder it is your responsibility to apply for a renewal, if you still require it. Customs do not issue reminders and if you do not hold a valid authorisation, end-use relief will not apply and full duty will be payable.

239. Can I apply to have an authorisation cancelled ?
If you wish to cancel your end-use authorisation at any time you should advise (in writing) your authorising office. In your letter you should confirm the date by which all of your end-use goods will have been put to the prescribed end-use. If goods are not put to the prescribed end-use you will have to pay the additional duty due. However, you may, subject to Customs approval, be entitled to put the goods to an alternative use. Customs may annul or revoke an authorisation if they find that it has been issued on the basis of incorrect or incomplete information or when conditions of end-use have not been met. If this happens you will be notified in writing.

240. How do I enter goods for end-use relief ?
When goods are imported or removed from a Customs warehouse, you are required to pay the appropriate end-use rate of duty and import VAT due. To enter goods you must complete an SAD.

241. What if I authorise an agent to act on my behalf ?
If you use an agent to complete your entries you must ensure you give clear instructions for the goods to be entered to end-use. You must also ensure that your agent sends you a copy of the entry and check that the correct authorisation number and CPC has been used.

Note: Whilst you may authorise an agent to act on your behalf, as the end-use authorisation holder you will be responsible to Customs for any duty liability that may be incurred.

242. Can I amend an entry entered for another procedure ?
If goods are entered to another Customs procedure or non end-use commodity code in error you may be allowed to amend the entry to end-use providing:

the application for amendment is received as soon as you become aware of the error;

you were authorised for end-use at the time of the importation;

use of the goods is consistent with the prescribed end-use and your records are sufficient to show the goods are or have been put to the prescribed end-use; and

the goods will immediately be entered to the end-use procedure.

To request an amendment of entry you should contact the EPU where the original entry was lodged, submitting a copy of the original documentation together with any evidence (including a copy of your end-use authorisation), to support your request. If you were not authorised for end-use at the time of importation you may be able to apply to your authorising office for a retrospective authorisation.

243. What about end-use relief on IPR goods ?
If you have EC and non EC markets and import or receive goods for processing that are eligible for IPR and end-use relief but at the time of entry you do not know the ultimate use of the goods you can:

enter the goods to end-use using the relevant commodity code quoting your end-use authorisation number. If the goods are later re-exported, the reduced import duties paid at the time of importation are not reimbursed; or

enter the goods to IPR and pay or suspend the normal rate of duties. In this case the import duties paid or suspended at the time of entry to IPR may be reimbursed or remitted when the goods are re-exported; or

apportion entries between IPR and end-use based on past or estimated requirements.

Diversion of IPR goods to end-use may be approved provided it is not a regular or normal method of disposal eg where an export order has been cancelled. If the IPR goods being diverted are eligible for end-use, duty on diversion can be calculated at the end-use rate provided, at the time of release, you hold an end-use authorisation and all the conditions for granting end-use are satisfied. Any duty due will be calculated at the end-use rate of duty on the value of the goods at import. For IPR suspension goods compensatory interest will be calculated at the end-use rate of duty due from the date of first entry to IPR suspension.

For IPR drawback any repayment of duty will be based on the difference between the duty paid on the imported goods and the duty due on the value of the imported goods at the end-use duty rate.

244. What is the relationship between end-use relief and tariff quotas ?
Some Tariff Quotas apply only when goods are to be put to a prescribed end-use. If you claim a Quota you must provide your end-use authorisation number when making the claim, without this evidence the claim will be rejected. Any delay in submitting this information may cause a loss of relief under the Quota. Once a Tariff Quota is exhausted, no further end-use relief is applicable. Those Quotas which require an end-use authorisation have the reference "end-use authority" in the "documents required" column.

245. What is the relationship between end-use relief and temporary duty suspensions ?
Temporary Duty Suspensions are published in the Official Journal of the EC and are agreed for an indefinite period, or until such time as a Community operator seeks to change the situation. New duty suspensions or changes to existing measures come into force on 1 January and 1 July each year.

Some duty suspensions such as those for aircraft and shipwork goods are granted subject to the condition that the goods are put to a specific end-use. Such goods are identified in the Tariff by a suitable footnote and where this is a requirement you will need an end-use authorisation.

246. How do I enter end-use goods to customs warehousing ?
At importation goods should be entered under normal warehousing procedures. Only at the time of removal from the Warehousing procedure should you claim end-use relief by completing the SAD with the relevant CPC entered in Box 37.

247. What is the relationship between end-use relief and OPR products ?
Goods imported to end-use relief may, if necessary, be re-exported outside the EC for processing under OPR and then re-entered to end-use providing they remain eligible for end-use after processing in a third country. Prior authorisation to use OPR arrangements is required.

248. What is the relationship between returned goods relief and end-use goods ?
Providing goods are re-imported in the same state in which they were exported from the EC, they may qualify for Returned Goods Relief (RGR) eg:

if at re-importation the goods can be correctly entered under the same end-use heading in the Tariff, relief from paying a reduced rate of duty for a second time can be claimed under RGR providing all the relevant RGR conditions are met; and

if the re-imported goods are not (or cannot be) entered to end-use, the full rate of duty can be reduced by an amount equal to any duty paid at the time of first importation, by using the RGR procedures.

249. What if I import end-use goods by post ?
When arranging for overseas packages to be mailed you should ask the sender to boldly mark the package(s) and accompanying Customs declaration with the following:

your "end-use authorisation number ...";

"Goods eligible for end-use relief under Commodity Code ..." (add number) or for shipwork goods "goods eligible for nil rate of duty under Shipwork end-use provisions"; and

your VAT number if you are registered for VAT.

If the sender does not mark the package as above, end-use rates of duty will not be applied.

If the duty on the goods does not exceed 10 Euro they may be released to you without the need to complete an entry. If the duty is over 10 Euros you will have to complete an SAD. If you have any queries regarding the valuation of your goods or the amount of duty payable you should contact Customs at the postal depot.

250. How does end-use relief operate within the special territories of the EC ?
"Special Territories" are areas within the Customs Territory of the European Union but outside the Fiscal Territory eg Channel Islands, Canary Islands. This means that Customs Duty and European Community Customs Regulations apply in these territories but VAT and Excise Directives do not. If goods are moved from a Special Territory to an EC Member State, the consignment must be declared at importation for VAT, Excise and statistical purposes. Goods that are in free circulation in a Special Territory can be admitted in Malta (or any other EC Member State) free of Customs duty, however, VAT must be paid at the point of importation - unless payment is deferred. For end-use relief to operate in a Special Territory the authorities of that territory must issue an end-use authorisation to all eligible applicants.

251. How do I transfer end-use goods to another end-use trader within Malta ?
Goods can be transferred provided the recipient holds a current end-use authorisation. It is your responsibility to check before any items are dispatched that your customer has a valid end-use authorisation for the goods. No prior approval or official documentation is required. When transfer takes place the recipient must state on each order:

"I request delivery under the terms of my end-use authorisation number ..."

On receipt of an order you should keep the original (or a photocopy) as part of your end-use records. Clearly mark each invoice and delivery note with:

"Supplied under the terms of your end-use authorisation"

If your commercial records are not adequate for Customs purposes, we may require you to include additional information on the commercial documentation or to use the T5 method of transfer. Where this is necessary any additional requirement will be stated in your endues authorisation.

Responsibility for compliance with the conditions of end-use relief will be transferred on the date your customer receives the goods. As the supplier, you must retain in your records suitable evidence of the date of receipt eg a goods received note.

If after transfer end-use goods are diverted to an ineligible use, the transferee will receive a demand for duty. This demand will be based on the value for duty at the time of importation.

252. How do I transfer end-use goods to an end-use trader in another Member State ?
Goods can be transferred provided the recipient holds a current end-use authorisation. It is your responsibility to check before any items are dispatched that your customer is eligible to receive end-use goods. Unless you have prior approval to transfer goods using commercial documentation the T5 procedure must be used to transfer end-use goods between end-use traders in different Member States. Where this method of transfer is to be used it should be stated in your end-use authorisation.

If you wish to transfer goods to other Member States using commercial documentation you will need to apply for this simplification on your Form in Annex 67 application. Approval will be subject to the agreement of the other Member States involved. Where approved it will be stated in your authorisation.

253. How do I transfer end-use goods within a Single Community authorisation ?
You must ensure when completing your application form for end-use authorisation, that you provide the name(s) and address(es) of any processors who will handle your goods and the locations where the goods will be processed and put to the prescribed end-use. Subject to agreement with the Member States involved, transfers can be made within the authorisation between the locations and/or named operators without official documentation but it will be your responsibility to maintain accurate records that show where the goods are at all times. The recipient must also keep records to show where the goods are and what process(es) they undergo.

254. How do I transfer goods to end-use within an Integrated Authorisation ?
How you transfer goods from another Customs procedure to end-use within an Integrated Authorisation will be agreed and stated in the authorisation. Usually transfer will be by entry in your records unless, as a result of transfer to end-use, a Customs debt is due ie the end-use rate of duty is a positive rate.

If for example IPR goods are transferred to end-use and duty is due, an entry must be made to end-use and you will need to complete a SAD.

The Customs procedure from which goods are transferred will be discharged when the transfer to end-use is entered into your records and the conditions governing end-use relief will apply from that date.

255. How do I receive end-use goods from another end-use trader ?
If you are ordering end-use goods from an authorised trader in Malta state on your order form:

"I request delivery under the terms of my end-use authorisation number ..."

Responsibility for compliance with the conditions of end-use relief will be transferred to you on the date that you receive the goods. If you are ordering end-use goods from an authorised trader in another Member State, you can use commercial documents provided your supplier has prior Customs approval (this should be stated in their authorisation). Alternatively you will need to use the "T5" procedure for transferring end-use goods.

256. How do I transfer IPR goods to end-use ?
If you have an integrated IPR/end-use authorisation and no duty is due, you can transfer by noting your records with details of the IPR CN code, the end-use CN code and date of transfer. If you do not hold an integrated authorisation or receive IPR goods from another trader, a SAD will be required whether or not any end-use duty is due. If you receive IPR goods from another trader the IPR trader should complete a SAD quoting your end-use authorisation number.

257. How are goods entitled to end-use identified ?
All goods eligible for end-use relief are identified in the Tariff by an appropriate footnote. The Tariff description of the goods will normally indicate what the prescribed end-use is for the particular commodity. Goods remain under end-use provisions from the time of entry until the goods are either:

put to the prescribed use; or

put to another Customs approved treatment or use.

However, if you are unable to put the goods to the prescribed end-use, Customs can approve the goods to be:

exported outside the Customs territory of the EC;

destroyed under Customs supervision (any resulting by-products from the destruction process may be liable to duty); or

put to an alternative use, subject to the payment of any duty which has been relieved.

You can also transfer your liability by transferring your goods to another authorised endues trader.

Although end-use is normally completed when the goods are first put to the prescribed use, where goods are suitable for repeated use or there is a risk of abuse, Customs may require the goods to remain under end-use for longer. This will not exceed two years from the date the goods were first put to the end-use and where Customs consider this necessary they will specify this requirement on your authorisation. Your commercial records must continue to show the current and past locations of these goods during this period.

258. How is completion for certain types of goods carried out ?
End-use is deemed to be completed for certain goods when they are put to the following uses:

goods intended for certain classes 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 left the assembly line;

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; or

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

259. What is the time limit for the completion of end-use ?
When you apply for end-use authorisation you will need to state the time you require to put the goods to the prescribed end-use. If you subsequently find you need a longer period to put the goods to the end-use you should contact your supervising office immediately and apply in writing for an extension. The period may also be extended after the original period has expired provided your records are sufficient to show that the goods are still under endues supervision and are being or have been put to the prescribed end-use.

260. Am I allowed to keep end-use goods in common stock ?
Where there is a commercial need, you may apply to your supervising office for authority to store end-use goods together with other goods of the same kind. They must be of the same commercial quality, technical characteristics and share the same Tariff sub-heading (ie the same first 8 digits of the commodity code).

To help you decide if goods A are the same as goods B consider the following questions:
· are A and B mutually interchangeable ?
· would you or a customer ordering A accept B instead ?
· do you differentiate between A and B ?

If your answer to the first two questions is "yes" and the third "no" then assuming A and B share the same first 8 digit CN code they will usually be eligible to be kept in common stock.

If a common stocking arrangement is approved end-use will be discharged once a quantity of goods equal to those imported to end-use have been put to a prescribed use.

If charges become due on goods which, because they are held in common stock cannot be related to a particular import, duty is calculated by reference to the earliest identifiable relevant importation.

261. What about waste and scrap products ?
Additional duty is not payable on waste and scrap resulting from:

normal processing of goods; or

any losses due to natural wastage.

However, VAT is chargeable on the supply of any waste or scrap materials.

Any resulting by-products derived from normal processing which have a value must be declared and may be liable to duty and VAT.

262. What is the procedure I must follow to export end-use goods ?
For aircraft or shipwork, export is an allowable method of completing end-use. Export of other end-use goods may be approved but should not be the normal method of discharging liability.

263. What is the procedure I must follow if the goods are to be destroyed ?
If goods are found, on or after importation, to be defective, contaminated, obsolete or otherwise unusable and you wish to destroy them, you must make a written request. No further duty will be due provided the goods have no value. If scrap resulting from destruction has a commercial value duty is payable based on the rate applicable to the waste and scrap, at the time the goods were destroyed. If destruction of goods is prohibited on environmental grounds you may be able to discharge your liability by assigning the goods to another treatment or use.

264. May I put end-use goods to an alternative use ?
If you want to put your end-use goods to an alternative use to that allowed in your authorisation you must contact Customs. If the alternative use is also eligible for end-use the goods can benefit from the reduced end-use rate applicable to the alternative use. Any duty due at the time the goods are put to the alternative end-use, will be calculated on the difference between the two end-use rates. If end-use goods are put to an ineligible use duty will be due, at the rate applicable to the non end-use Tariff heading or sub-heading at the date of importation or of release from warehouse. Duty will be due when the goods are removed from end-use supervision and put to an ineligible use.

265. When is a customs debt incurred ?
A Customs debt will be incurred:

if a condition governing the placing of the goods under end-use was not fulfilled at the time the goods were declared for end-use;

through a failure to meet an obligation that is a requirement under end-use; or

if the goods are not put to the prescribed end-use (the debt is incurred at the time the goods are put to the other use).

If the debt has not been paid interest will be charged on any Customs duty debt that is not paid in full within 5 days of the due date. Interest is calculated on a daily basis from the due date and may be subject to a minimum charge.

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THE DIFFERENT TYPES OF AUTHORISATION AVAILABLE FOR INWARD PROCESSING RELIEF

266. Why do I need an authorisation ?
You need to be authorised to import or receive IPR goods to be eligible for duty relief. Authorisations are issued to the person who processes the goods or arranges for them to be processed on their behalf. If you subcontract processing the subcontractor must either hold their own authorisation or be named on your authorisation.

267 what types of authorisation are there ?
There are five types of authorisation:

Simplified (Malta only);

Local (Malta only);

Specific;

Single Community ; and

Integrated.

268. How do I know which one to use ?
Which type of authorisation you need will depends on:

whether you intend to enter , inter alia, agricultural products covered by Annex I to the Treaty;

value of the goods;

the nature of the processing involved;

the economic code you apply under;

whether you import or receive goods from another IPR trader;

the number of entries you intend to make, for example if you make infrequent entries you may find it easier to use a simplified authorisation;

if you want to apply to use any simplified procedures within IPR these require prior approval;

if you want to use equivalence.

269. What is an economic code ?
These codes are used to identify the reasons for using IPR. When you apply for an authorisation you will need to quote the economic code under which your application is being made. This applies even if the application is not required to undergo an economic test.

270. How long does authorisation take ?
If you apply for an authorisation using Annex 67 Form you should be informed of the decision to grant or reject the application within 30 days of Customs receiving the application. However, this period will not start until all the necessary information required is received. When an authorisation is issued you will only be approved to receive goods under IPR that are specified in your authorisation.

271. How long does an authorisation last ?
The length of time an IPR authorisation can be used will depend on the type of goods and processing involved. Except for Simplified authorisations, where the period of authorisation is limited to the period required to process and re-export the goods, all other types of authorisation should not normally exceed 3 years from the date the authorisation takes effect. However restricted periods of authorisation do apply to certain agricultural goods, for example, 6 months in the case of agricultural products covered by Annex 1 to the Treaty. Except for these goods longer periods may in certain circumstances be approved where there are duly justified good reasons, for example a fixed term contract or commercial agreement.

272. What are the responsibilities of the authorisation holder ?
As the authorisation holder you will be responsible for the duty and associated charges on all goods entered under your authorisation, whether or not you own them. This includes goods entered under the authorisation by any named processors until they are put to an eligible disposal. Other companies included as named processors may only receive, process, dispose or transfer IPR goods as specified in the authorisation. You should make your own arrangements to indemnify yourself with any suppliers/customers/ associated companies included in your authorisation in the event of an ineligible entry or disposal.

You will be responsible for ensuring:

entries on SAD are correctly completed using the appropriate IPR CPC;

that any processor named on your authorisation or third party such as agents, who enter IPR goods under the authorisation, are given clear written instructions of the goods to be entered and procedures to be followed;

the correct transfer procedures are used for IPR goods received or transferred;

records are kept of all operations carried out under your approval;

goods are pre-entered at export using the appropriate IPR export CPC and for keeping evidence of their disposal;

the payment of duty, import VAT (and compensatory interest) for suspension goods diverted to free circulation;

returns of receipts and disposals of IPR suspension goods and requests for repayment of IPR drawback goods are made by their due date;

amendments or alterations to your authorisation are notified in writing to your supervising Customs office;

for applying to renew your authorisation;

security by cash deposit or bank guarantee is made where required.

273. Do I need to provide security ?
Security will not usually be required (except for transfers of certain goods considered to bear increased risks, such as certain meat products, however it may be requested if you do not fulfil your obligations under your authorisation eg fail to submit suspension returns, fail to pre enter goods at export etc.

274. Can an application for authorisation be refused ?
Except where a single Community authorisation is applied for, we are required to issue a decision on your application within 30 days of receipt of all necessary information. If your application is refused you will not be eligible to claim the relief. You have the right to appeal against the decision.

275. Can I alter or amend my authorisation ?
Yes - if any details of your business (ie name, address or ownership) change, you must advise your supervising office. If it involves a change of name or ownership you may have to re-apply for authorisation in the new name. As the authorisation holder you must ensure that all details relating to the authorisation remain current and correct. If you need to make any changes to the terms and conditions of your authorisation, contact your supervising Customs office. If you have a Single Community authorisation Customs authorities in other Member States may need to be consulted. If appropriate, a new authorisation will be issued.

276. How do I renew my authorisation ?
You should apply in writing to your supervising office no later than one month before your authorisation expires. You must advise Customs if any of the relevant facts (on your original application) have changed. The authorisation holder is responsible for applying for a renewal if it is still required. Customs does not issue reminders.

277. How do I cancel my authorisation ?
You can cancel your authorisation at any time by writing to your supervising office. In your letter you must give the date by which all of your IPR goods will have been correctly disposed of. Customs may also annul or revoke an authorisation if they find that it has been issued on the basis of incorrect or incomplete information or when conditions of IPR have not been met. If this happens you will be notified in writing.

278. What customs checks are carried out ?
You may receive a visit from your supervising office to ensure that your records and systems are adequate for Customs purposes and to clarify details of the goods that you enter and process. During your period of authorisation further visits may be made to inspect your records and to ensure that you are complying with all conditions of the authorisation. If you have a Single Community authorisation issued in Malta, a Maltese Customs office will be your supervising office. Visits to check operations or records in another Member State may be made by Customs in those Member States. These arrangements will generally have been agreed with the Maltese supervising office when the authorisation was considered. If a Single Community authorisation is issued in another Member State, Customs in that Member State will be responsible for monitoring your operation. They may request information from Maltese Customs or require Maltese Customs to carry out checks on your operations in Malta.

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APPLICATION FOR INWARD PROCESSING RELIEF - CONDITIONS AND REQUIREMENTS

279. What is the period required to enter, process and dispose of IPR goods ?
This is known as the "through-put period". The period starts either from the date you import to IPR or the date goods were transferred to you. You need to specify on your application the period you require to meet your business needs. As a general rule the period should not normally exceed one year but in certain industries longer periods may be required eg for aircraft and where there are sound business reasons these will be approved. For Simplified authorisations a standard 6 months will apply. If, after authorisation, you find you need a longer period you should contact your supervising office and apply in writing for an extension. The period may also be extended after the original period has expired provided your records are sufficient to show that the goods are still under IPR supervision.

280. What is the inventory system ?
This system provides for the throughput period to be automatically extended for all goods (except agricultural goods listed in question 281) that remain in stock at the end of your agreed throughput period. This can be agreed provided your records are sufficient to show that the goods are still under IPR supervision.

281. What are the restricted through-put periods ?
For certain agricultural goods the period is restricted as follows:

4 months for certain dairy products referred to in Article 1(1) of Council Regulation 1255/99;

2 months in the case of slaughter without fattening of animals referred to in Tariff Chapter 1;

3 months in the case of fattening (including slaughter where relevant) of animals which fall under CN codes 0104 and 0105;

6 months in the case of fattening (including slaughter where relevant) of other animals referred to in the Tariff Chapter 1;

6 months in the case of processing of meat;

6 months in the case of other agricultural products of a kind eligible for advance payment of export refunds referred to in Article 1 of Council Regulation (EEC) No 565/80 and processed into products or goods referred to in Article 2(b) or (c) of the same Regulation.

Where successive processing is involved or there are duly substantiated exceptional circumstances, the above periods may be extended on written request but the total period from entry to disposal must not exceed 12 months.

282. What are compensating products ?
Compensating products are all the products resulting from processing operations under IPR including by-products. When you apply for an authorisation you must state all the products you obtain from the goods you import/receive under IPR and indicate which of those products are your main compensating products (MCPs) and any secondary compensating products (SCPs). You will also need to state how the IPR goods will be identified in the processed product. All products, which are a necessary by-product of producing your MCP(s), are secondary compensating products (SCPs), they are not to be treated as waste or scrap. They are not the same as production losses which must be taken into account when establishing the rate of yield for the processing operation being carried out. For IPR purposes the term "waste and scrap" only applies to goods destroyed under Customs supervision.

283. What are the rates of duty on secondary compensating products ?
If, as a result of your processing operation, you have SCPs and put them on the Community market, you will generally pay duty at the rate appropriate to the goods originally imported. You may however be able to pay a reduced or nil rate of duty ie the rate applicable had the SCP itself been imported. This rate is referred to as the "own rate" but can only be considered in proportion to the quantity of MCPs exported from the Community. Your authorisation will state whether any SCPs you produce may be eligible to an own rate. The list of SCPs to which own rates of duty could be applied are set out in Annex 75 of Commission Regulation (EEC) No 2454/93. To find the duty rate you can look in the Tariff under the CN code for the SCP.

284. What is the rate of yield ?
Rate of yield is the quantity of processed products (compensating products) made from a unit quantity of goods entered to IPR. This can include production accessories or catalysts not found in the compensating product. The expected rate of yield or the method by which it will be calculated must be specified in your application. How the rate will be established will be confirmed in your authorisation. If your application includes more than one processing operation, you must give the rate of yield for each processing operation at each location taking account of:

the quantity of main compensating products (MCPs) produced ie products for which use of IPR is applied for;

the quantity of any other products that are a necessary by-product of producing your MCP(s) ie secondary compensating products;

goods lost or used up during processing (production losses) such as loss through evaporation, desiccation, venting as gas or leeching; and

(if applicable) the quantity of production accessory used to aid the production of IPR goods or accessory used to process a unit quantity of free circulation goods for export.

If you dispose of the same goods as you receive, the rate of yield is 1:1. This is likely for goods for repair or for minor activities under usual forms of handling. If you receive many different IPR goods to make a single product, then the rate of yield is expressed as so many of each IPR item to one product you export or dispose of for example 3 metres of cloth, 4 metres of cotton and 6 buttons to each shirt. If you receive one IPR item and split it up into many different products, the rate of yield is expressed as the quantity of IPR item that produces so much of each product (main compensating products) and what is left as a result of producing those products (secondary compensating products) eg. 1000 kg of timber produces 14 tables, 12 chairs and 2 bookcases (MCPs) and 50 kg of wood/waste/cuttings/sawdust (SCP). In cases where the rate of yield is not known at the time of application or the rate may vary, you should record on your application that you intend to use your production records as the basis for establishing the rate. If you have entered the rate of yield on the application/authorisation form and the rate of yield changes or is incorrect, you must inform your supervising office immediately.

285. What are standard rates of yield for agricultural goods ?
For certain processing operations on agricultural goods, Community law sets standard rates of yield that must be used, these are based on information obtained from all Member States and lay down the quantities of compensating products deemed to be obtained from a given quantity of imported goods. They apply only to goods of sound, genuine and merchantable quality. Using a standard rate of yield:

puts you on the same footing as other processors in the Community;

gives you firm figures on which to account for your products, regardless of minor fluctuations in actual yields;

simplifies your IPR planning and administration; and

allows you, when you exceed the standard rate of yield for the main product, to dispose of the excess on the Community market without paying import charges.

286. How do I check if a standard rate of yield applies ?
The list of standard rates of yield are published in the Official Journal of the Community (OJ) and are set out in Annex 69 of Commission Regulation (EEC) No 2454/93. The Annex identifies in column 5 the rates of yield to be applied to a fixed quantity of goods identified in column 1. Where processing under IPR is identical with those carried out to obtain "export refunds", column 5 of the Annex will be noted with an asterisk. If a standard rate of yield applies to the goods you process, the rates of yield will be stated in your authorisation.

287. What evidence needs to be produced in the case of an economic test being required ?
Where the application requires an economic test you will need to provide evidence with your application why you cannot use Community produced goods. Enter the appropriate economic code and attach any supporting evidence in respect of each code you have quoted. Your application cannot be examined without such evidence and may be returned to you if the information is not provided.

288. Who carries out the test ?
This will be carried out by MALTA ENTERPRISE. They may contact you direct for additional information if necessary. We will also consider your application to examine the other conditions attached to the authorisation. If we are satisfied and MALTA ENTERPRISE recommend that the economic conditions are met, you will be issued an authorisation detailing any conditions relating to its use and an IPR authorisation number. The Customs office responsible for your authorisation will be your supervising office. Any authorised values and/or quantities are the maximum you can enter and apply to the period of approval granted. They should not be treated as annual figures unless otherwise stated. If you need to change the value or quantity limit you must apply before that limit is exceeded. This will be treated as a fresh application and will be referred to MALTA ENTERPRISE for a further examination of the economic conditions.

289. What records must I keep ?
You must keep records of all goods you enter to IPR. These must show:

details of the quantities of goods entered to IPR, if your authorisation restricts the quantity or value of goods on which you may claim IPR, it will be your responsibility to ensure that you do not exceed the limits. You will therefore need to ensure that your records enable you to monitor the amount of goods you enter to IPR;

what goods are entered ie the commercial or technical description of the goods sufficient to identify them (this should correspond to the description of goods that will be stated in your IPR authorisation);

when and where goods were entered to IPR including transfers received and documents relating to their entry;

where all goods and compensating products held under the authorisation are held at any time including any movement of goods and compensating products to or between operators specified in the authorisation (for single Community authorisations, Customs authorities in other Member States where operators are located, will usually require the operators to have basic stock records showing what goods or products the operator has received and how they have been disposed of);

what processing is carried out on the goods;

locations where processing takes place;

how goods entered to IPR are identified in the products produced, for example manufacturer's marks, serial numbers, plumbs, seals, clip marks, other marks fixed to the compensating product, samples, illustrations, technical descriptions, analysis or other supporting documents that clearly show the compensating product has been manufactured from your IPR goods;

production data that establishes the rate of yield achieved ie how many products are produced including any secondary compensating products (by-products); and

when and where goods were exported or disposed of including documents relating to their disposal.

290. Can I use my normal commercial records ?
You can normally use your commercial records but we may ask you to adapt them to provide the information needed to claim relief. If you intend to keep computerised records you must advise us when you apply for authorisation to ensure that these records meet the requirements of IPR. You will be required to provide any technical information and assistance we may need in order to check them.

291. How long records must be kept for ?
You must keep your records for four years after you dispose of the goods.

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SIMPLIFIED AUTHORISATION

292. When can I use a simplified authorisation ?
This may suit you if you only make occasional imports to IPR and processing operations are solely carried out in Malta. You can also use it to remove goods from a customs warehouse or Free Zone. Application is made on a Simplified Form and presented with the import declaration. Any goods (excluding certain agricultural products may be entered to IPR using a simplified authorisation. These agricultural products goods, however, may also be entered provided the application concerns:

operations of a non commercial nature, in other words goods which are your own personal property or the property of members of your family;

a job processing contract (any processing of imported goods that are directly or indirectly placed at your disposal by a non EC customer and processed according to their specifications, generally against processing costs alone);

usual forms of handling;

repair (including overhaul and adjustment);

processing of durum wheat falling within CN code 1001 10 00 to produce pasta falling within CN codes 1902 11 00 and 1902 19;

the value of the goods imported per applicant, per calendar year for each 8 digit CN code does not exceed Euro 150,000.

293. How do I apply ?
Application prior to entry to IPR is not necessary as it is accepted that the goods and processes allowed under this type of authorisation do not harm the essential interests of Community producers. Each time you enter goods to IPR you will need to complete a simplified form, 2 copies for IPR drawback or 3 copies for IPR suspension and an entry on form (SAD). The form must be stamped by Malta Enterprise as an approval of the application . Attach the first copy to the entry form (SAD). In Box 37 of the SAD enter the relevant CPC. Copy 2 of the simplified form should be retained in your records. If you use IPR suspension copy 3 serves as the suspension return and should be submitted to the Customs Economic Procedures Unit at the end of the period allowed for disposal of the good. Acceptance of the entry under the economic code you quote will be your authorisation by Customs, your authorisation number will be the SAD entry number. A third party, who is an authorised agent and who has your written permission to enter on your behalf, may also complete and sign the simplified application. If you use the simplified system when you should not, you may not get relief even if you transfer the goods to another IPR operator or export them.

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NATIONAL AUTHORISATION (MALTA ONLY)

294. When might I need a national authorisation ?
This type of authorisation is ideal if you frequently import and process IPR goods, as you avoid having to complete a simplified application form for each importation. All goods and processes which are eligible for a simplified authorisation are also entitled to use the national authorisation procedure. In addition the following may also be authorised:

successive processing - compensating products obtained under an authorisation that was subject to an economic test carried out in Malta or another Member State, do not require an economic test. However, evidence that an economic test has been carried out will be required;

agricultural products where the Ministry of Rural Affairs and the Environment have issued a document permitting entry to IPR within limits determined on the basis of a supply balance under Council Regulation (EC) No. 3448/93 Article 11;

economic code 99 (other reasons) - if you use this code, you will need to explain the reasons on your application.

295. How do I apply for a national authorisation ?
You will need to complete form in Annex 67, guidance notes are included on the form. If your application covers more than one company in Malta give details of the goods to be entered and operations to be carried out by each processor including the sequence and locations. If agreed you will be issued an authorisation detailing any conditions relating to its use and an IPR authorisation number. The Customs office responsible for your authorisation will be your supervising office. You should apply at least one month before you first intend to import or receive IPR goods. If you wish to enter goods to IPR before the result of your application is known, you can use the simplified system, provided you are eligible to do so and do not use any of the procedures which are excluded under a simplified authorisation.

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SPECIFIC AUTHORISATION (MALTA ONLY)

296. When might I need a specific authorisation ?
This type of authorisation will be needed if you intend to import or receive certain agricultural goods and the value of the goods to be entered exceeds Euro 150,000 per 8 digit CN code, per calendar year, unless the application concerns:

operations involving goods of a non-commercial ie goods which are your own personal property or the property of members of your family;

a job processing contract;

successive processing of compensating products obtained under an authorisation which was subject to an economic test (evidence that an economic test has been carried out will be required);

usual forms of handling;

repair;

processing of durum wheat falling under CN code 1001 10 00 to produce pasta falling under CN codes 1902 11 00 and 1902 19.

An economic test will be required and you will need to provide evidence why you cannot use Community produced goods. If you are using IPR under the terms of a supply balance, the quantity limits allowed by the supply balance certificate can be added to the Euro 150,000 limit before an economic test is required.

297. How do I apply for a specific authorisation ?
You should apply at least two months in advance. You need to complete form in Annex 67. If your application covers more than one company in Malta give details of the goods to be entered and operations to be carried out by each processor including the sequence and locations.

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SINGLE COMMUNITY AUTHORISATION

298. When might I need a single community authorisation ?
You might want to apply for this where receipts and processing under IPR are carried out in more than one Member State. Processing can be carried out by one or more businesses and there is no requirement for you and other processors to have a legal relationship or for successive processing of goods to take place. Application is made on the model form in Annex 67 in Commission Regulation 2454/93.

299. How do I apply for a single community authorisation ?
An application should normally be made in the Member State where your main accounts are held and at least part of your processing will be carried out. However, if this does not suit your business, perhaps because accounts are held in a different Member State from the process, you can apply to the Customs authorities in either Member state. As the application has to be considered by each Member State where processing takes place, you should apply at least two months before the first intended entry. You will not be able to import or receive IPR goods until the result of your application is known. If you apply in Malta, you need to complete the model form indicated in question 298 (explanatory notes are included with the form). Contact our Customs Economic Procedures Unit where to send the form. You must ensure you provide the following details:

the names and addresses of all operators, both in Malta and in other Member States;

the goods to be entered and what processing operations will take place in each Member State, including the sequence and the locations;

the address of the Customs Office for each location;

the rate of yield for each processing operation and means of identification;

where goods will be sent after processing for example export;

any simplified procedures for entry, transfer or discharge you wish to use;

records that will be available covering all operations in Malta and other Member States and how they may be verified;

how goods will be transferred between operators;

if you are applying to use equivalence how you can demonstrate goods are equivalent, for example samples, illustrations, technical specifications and so on; and

confirmation that all operators named in your application are aware of their involvement.

We are not able to provide a list of Customs offices in other Member States, you may need to obtain this information from your operator or agent in that Member State. Normally Member States will accept applications in English but we may need to ask you for a translation of your application, or parts of it, in the language of the other Member State(s) involved. There is a possibility that some goods you import or receive fall within the scope for an "economic test. If the economic test is satisfied and we are content with the supervision arrangements, it will be forwarded together with a draft authorisation to each of the Customs authorities where IPR operations take place for agreement. Member States are required to issue a decision on your application within 30 days of receipt of the draft authorisation from Maltese Customs. If agreed you will be issued an authorisation detailing any conditions relating to its use and an IPR authorisation number. The Customs office responsible for your authorisation will be your supervising office.

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INTEGRATED AUTHORISATION

300. When might I use an integrated authorisation ?
You might want to use an integrated authorisation to cover imports and processing of various goods which require authorisation for IPR and other customs procedures such as customs warehousing, OPR, PCC, TI relief, End Use or Free Zone. How you transfer goods between customs procedures covered by the authorisation will be agreed and stated in the authorisation. If you are approved to use commercial documents you will be able to transfer between the different procedures within the integrated authorisation by notation in your records (except where payment of duty is due on transfer).

301. How do I apply for an integrated authorisation ?
If your application predominantly covers IPR, follow the guidance for a national or specific authorisation. You will need to show the goods to be entered and processed goods and indicate under which procedure the entry and process will be made. You will also need to describe the processing operations including any proposed transfer between procedures. Any additional requirements of the other procedures applied for should be entered also. If the main customs procedure required is not IPR, for example customs warehousing, you should complete the application using the appropriate form for that procedure with any additional requirements for IPR added. If you wish to apply for an integrated Community authorisation, you will use the model format form indicated in Annex 67.

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RETROSPECTIVE IPR AUTHORISATION

302. Can I apply for a retrospective IPR authorisation ?
You can but they may only be issued in certain circumstances. Examples may be, if you receive an unexpected export order from a customer or if your domestic customer has gone bankrupt and you decide to export the compensating products to another customer outside the EC. All requests are considered on an individual basis. Application should be made on form (Annex 67) stating the reasons why it is required. You will also need to be able to produce records to support your application and show that the goods in question were or are eligible for relief. In order for your application to be considered, there are basic criteria that have to be met:

exceptional circumstances must apply. Retrospection cannot be regarded as a regular or re-curring form of authorisation;

you will need to establish that there is an economic need for authorisation. Where necessary, an economic test will be carried out;

no obvious negligence or attempted deception should be associated with the application;

all periods of validity and through-put periods must be/have been adhered to;

the applicants accounts must be able to show that all the requirements of IPR can be deemed to be met; and

all the formalities of the arrangements must be regularised by amending any relevant declarations.

Within the context of retrospection, EC Commission guidelines define "obvious negligence" as being any situation where the applicant has failed to comply with the conditions for granting an authorisation although they must have been aware of those requirements or had previously been in a similar situation and therefore must have been aware of the need to obtain an authorisation prior to importation.

Any period of retrospection cannot be dated beyond one year from the date your completed application is received.

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IMPORTATION AND ENTRY PROCEDURES

303. How do I enter goods to IPR ?
You must complete an entry (SAD) such as:

the description of the goods (this should correspond with the description specified in your authorisation)

the CN code for the goods entered

enter a CPC. The CPC you use will depend on the type of authorisation you have

whether you are importing from outside the EC;

receiving goods from another IPR trader in another Member State;

receiving goods from another customs procedure, such as customs warehousing, in Malta or from another Member State.

If you have an integrated authorisation and wish to enter goods to IPR you must give your authorisation number with the prefix "IP". If your integrated authorisation includes customs warehousing you will be given a separate authorisation number to be used for customs warehouse entries only.

304. Can I amend an entry ?
Yes, if goods are entered in error to another customs procedure or to free circulation instead of IPR you may be allowed to amend the entry provided:

the application for amendment is received as soon as you become aware of the error and within 3 months of the date of entry;

you were authorised at the time of entry (if you were not authorised at the time of entry you may be able to apply for a retrospective authorisation);

use of the goods has not contravened the conditions of IPR and your records are sufficient to show that the goods are or have been correctly disposed of under IPR; and

the goods will immediately be entered to IPR.

305. How do I amend an entry ?
You need to contact the EPU and send a copy of the original documentation together with any evidence, including a copy of your IPR authorisation to support your request. If goods are entered in error to another customs procedure instead of IPR for example customs warehousing, contact your supervising office.

306. What about goods subject to preference, import licensing or other Import restrictions ?
If preference is available at importation it cannot be claimed when goods are entered to IPR. Any preferential rate of duty may however, be claimed if goods are diverted to free circulation provided preference is also available at the time of diversion. Licensable goods subject to quantitative restrictions, goods subject to tariff quotas or other quantitative import restrictions etc cannot be entered to IPR drawback, they must be entered under IPR suspension. If you import milk or milk products you should contact Customs and Ministry for Rural Affairs and the Environment as certain restrictions may apply.

307. What about goods that need an import licence from the commerce division ?
If you are importing goods, such as textiles, which normally require an import licence from the |Commerce Division, you can enter them to IPR suspension without presentation of a licence. However, you will need to obtain a licence if you divert licensable goods to free circulation

308. Can I enter goods with non-quantitative import restrictions (surveillance licenses) for IPR ?
Goods can be entered to either IPR suspension or drawback. If drawback is used, a valid licence must be presented and endorsed when the goods are entered. If entered under IPR suspension the licence will not be required unless the goods are diverted to free circulation - or are transferred to drawback.

309. What about imports of ozone depleting substances ?
If you intend to import ozone depleting substances you should contact Customs as some cannot be entered to IPR and others will require an EC Commission licence before they can be imported.

310. What restrictions exist on imports of animals and animal products ?
If you intend to import certain animals or products of animal origin, they may only be imported at approved Border Inspection Posts for checks by health officials to be made.

311. How do I import IPR goods by post ?
You should ask the sender to clearly mark the package(s) and accompanying Customs declaration with the following:

"IPR suspension" or "IPR drawback" as appropriate;

if you have an authorisation enter your "IPR authorisation no:_______________" or if you will be using the simplified authorisation state "Simplified authorisation"; and

your VAT number if you are registered for VAT.

If the sender does not mark the package(s) as above IPR will not be applied. If the duty does not exceed Euro10 (presently Lm4) the goods may be released to you without the need to complete an entry. If duty is over Euro10 you will need to complete a SAD.

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CHARGES FOR SECONDARY COMPENSATING PRODUCTS AND USING STANDARD RATES OF YIELD

312. How do I calculate charges on secondary compensating products (SCP) ?
IPR allows relief in respect of the Main Compensating Products (MCP) resulting from processing. The treatment of SCPs or by-products therefore depends on how you dispose of the main products and what you do with the by-products. If you export a proportion of your MCPs, relief can be claimed on the same proportion of your SCPs provided they are also exported. Duty liability on MCPs and SCPs is determined using the quantity or value methods described later.

313. How do I calculate charges on secondary compensating products if an own rate applies ?
You can benefit from "own rates" whether you use IPR suspension or drawback. If an "own rate" applies relief will be based on the difference between the duty rate of the imported goods and the duty rate of the SCP calculated on the value of the SCP. The quantity of SCPs on which you can claim an own rate depends on the quantity of main products that you export from the EC eg if you export 90% of your MCPs you can use the own rate, if applicable, for up to 90% of the SCP that you release for use on the community market. You will not be entitled to claim relief on SCPs in respect of any quantities of MCPs you release for use on the Community market even if the SCPs are exported from the EC or destroyed under Customs supervision.

314. How do I use the standard rates of yield ?
At the end of each IPR accounting period, calculate the quantity of each compensating product. Whatever the quantity of products you actually produce, you must account for the quantities deemed to be produced from the standard rates of yield eg if you process cocoa beans to produce cocoa paste and during the accounting period you process 200 tonnes of cocoa beans, you would account for the compensating products as follows:

Compensating product
Quantity of IPR goods (t)                = 200
Standard rate %                             = 76.3
Quantity of products produced (t)   = 152.6 (200x76.3%)

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INWARD PROCESSING RELIEF TRANSFERS

315. How can IPR goods be transferred ?
Goods entered under any type of IPR authorisation can be transferred provided the receiving authorisation holder has approval to receive the goods in question. Goods can be transferred by the consignee completing a SAD using the appropriate customs procedure.

316. Do I need to provide a guarantee when I transfer goods ?
Only certain goods that are considered to bear increased risks when transferred will, subject to minimum quantities, require a guarantee. This includes the movement of such goods to/from the port, to/from premises where processing takes place and between sites and operators approved within the same authorisation. Where security has already been provided, for whatever reason, additional security for transfers will only be taken if the transfer guarantee subject to minimum quantities is greater.

317. Do I need to be authorised to transfer goods ?
The method of transfer you intend to use should be specified in your application/authorisation.

318. How do I carry out transfers within the same authorisation ?
You can transfer goods between locations or other processors included in your authorisation using commercial documents. They must be endorsed with "IP/S goods or IP/D goods" as appropriate. The location of the goods should also be entered in your records.

319. How do I transfer goods subject to quantitative restrictions, tariff quotas or other import restrictions ?
These types of goods fall under what is called `commercial policy measures'. If you transfer such goods Box 44 of the SAD must be endorsed "commercial policy".

320. How do I divert goods under an IPR suspension to the community market ?
If you receive IPR suspension goods and divert them for use within the EC, compensatory interest will be charged. This will be calculated from the date the goods were first entered to suspension. If the goods were first entered in another Member State interest will be calculated from the date of entry at the rate of interest applicable in that Member State and import VAT by reference to the value at the time of entry. If you receive Form INF1 when you receive goods, you will need to pass this on to your customer.

321. How do I transfer IPR drawback goods ?
(a) Transferring drawback goods to another IPR drawback trader
If drawback goods are transferred to a drawback trader the supplier cannot claim back the duty from Customs. The supplier should invoice the customer the duty inclusive price. The customer will be entitled to reclaim the duty from Customs if they dispose of the goods, for example, by exporting them outside the EC. If the customer transfers the goods to another drawback trader they will also need to invoice duty inclusive.

(b) Transferring drawback goods to an IPR Suspension trader
The supplier should invoice their customer the duty exclusive price. The supplier can submit a repayment claim to Customs when they send the goods.

(c) Transferring suspension goods to another IPR suspension trader
The supplier should show the value for VAT at import and invoice their customer the duty exclusive price.

(d) Transferring Suspension goods to a IPR Drawback trader
The supplier should invoice the customer inclusive of duty and compensatory interest. The supplier must show the interest payable and the value for VAT at import. A SAD has to be prepared.

322. How do I transfer IPR suspension goods between member states ?
Transfers of IPR suspension goods to or from other Member States can be made using a 3 copy form SAD or the Community Transit procedure.

(a) 3 copy SAD - Copies 1, 4 and an additional copy 1 are used. The supplier keeps copy 1 with their records and sends copy 4 with the goods to the customer and the additional copy 1 to their supervising office. Copy 4 is retained by the customer who should issue a commercial receipt for the goods. The receipt should be kept with the suppliers records as evidence that the duty liability has been discharged.

(b) Community Transit - the transit form SAD must show the status of the goods as T1. Box 37 (CPC) should not be completed. Box 44 should include the supplier's IPR authorisation number/Customs office address and be endorsed "IP/S goods" for suspension.

323. Can I use a simplified transfer procedures for IPR suspension goods between member states ?
Simplified transfer procedures can allow the use of a 2 copy form SAD or commercial document. The supervising offices must be satisfied that records are sufficient to support use of the simplification before it can be approved. If you want to send IPR suspension goods using a simplified procedure, you will need to write to your supervising office giving details of the goods you expect to supply and the name and address of your customer. Your customer in the other Member State will also need to apply to their Customs office. You will need to supply written confirmation that they have been approved to receive the goods under the simplified procedure. The customer becomes responsible for the suspended duty and potential import VAT when the goods are received and entered in their records. The customer is required to issue a commercial receipt for the goods which the supplier should keep with their records as evidence that their duty liability has been discharged. The following identifies in general what may be approved for IPR suspension transfers made from Malta. These will be subject to what has been required by other Member States involved.

(a) 2 copy SAD - copy 1 and 4 of the SAD is used. The supplier retains copy 1 and sends copy 4 with the goods to their customer who should issue a commercial receipt for the goods. The receipt should be kept with the supplier's records as evidence that duty liability has been discharged. Which the supplier should keep with their records.

(b) Commercial documents - if approved copies of the commercial document must be clearly endorsed "IP/S goods" and contain the following information:

the name, address and authorisation numbers of the supplier and customer;

the invoice number and any other reference number which is needed to trace the goods through the supplier's and customer's records;

the description, quantity and commodity code(s) of the goods supplied;

the entry number and date of the SAD or commercial document used to enter the goods to IPR;

if equivalence applies, the country of origin of the goods; and

value for Import VAT and the amount of duty suspended.

To protect commercial confidentiality, the amount of duty/import VAT suspended can be omitted from commercial documents. However, this can only be done with the customer's written consent. The supplier will however have to give an undertaking to provide the necessary information if goods supplied are subsequently diverted to free circulation to enable calculation of the duty due.

324. What is Form INF 1 ?
Form INF 1 is an information document used to confirm the amount of duty and other charges that were suspended on first entry to IPR, when goods are diverted to free circulation in a Member State other than where they were first entered. If the goods you supply were first entered to IPR suspension in Malta, you can send an INF1, stamped by your supervising office if required, with the SAD or commercial document showing the suspended duty, value for VAT at import and the date of entry to IPR. If the goods you supply were first entered to IPR suspension in another Member State, then for any future diversion to free circulation, compensatory interest will be calculated by reference to the date of entry of the goods into that country and the VAT by reference to the value at that entry. If you received an INF 1 at import attach a copy to the SAD and send it to your customer with the goods.

325. How are IPR goods between member states under a single community authorisation transferred ?
You must ensure when completing your application for IPR, that you provide the name(s) and address(es) of any processors who will handle your goods and the locations where the goods will be processed and transferred. Subject to agreement with the Member States involved, transfers can be made within the authorisation between the locations and/or named operators without official documentation but it will be your responsibility to maintain accurate records that show where the goods are at all times. The recipient must also keep records to show where the goods are and what process they undergo.

326. How are IPR drawback goods to or from another member state transferred ?
Transfers of IPR drawback goods to or from other Member States can be made using the Community Transit procedure. The transit Form SAD must show the status of the goods as T1 and box 44 should include the supplier's IPR authorisation number/supervising office address and be endorsed "IP/D goods". This method of transfer must be used if the goods are moving between drawback authorisation holders. Simplified transfer procedures can allow the use of commercial document accompanied by an INF 7. The INF 7 is an information document used to verify that drawback goods, that are transferred without a repayment of duty, have been re-exported or put to an eligible disposal that entitles repayment of duty to be made. The form is raised and presented by the receiving authorisation holder when they export the goods or put them to an eligible disposal. The supplier and receiver should notify their supervising offices if they intend to use this procedure. Approval to use the simplified procedure will be subject to the agreement of other Member States involved. If approved, commercial documents must be endorsed with "IP/D goods" together with the supplier's authorisation number. The right to repayment of drawback may be transferred with the goods but will always be subject to Customs approval in Malta or other Member State concerned. If you want to transfer the right to repayment you must contact your supervising office.

Note: Repayment of duty on drawback goods can only be made when the goods are reexported or are placed with a view to export under customs warehousing, Community Transit, IPR suspension, TI relief, or Free Zone. If you transfer drawback goods to another drawback authorisation holder in another Member State and do not use the Community transit "T1" procedure, the INF 7 can only be raised if the receiving trader enters the goods to one of the customs procedures mentioned above.

327. How are goods within an integrated authorisation transferred ?
If you have an integrated authorisation eg IPR and customs warehousing, transfer of goods between the procedures can be made by entry in your records. Records must be sufficient to trace the goods from their first entry through processing, transfer and final disposal ie:

details of the goods transferred;

identify the procedure under which the goods were held and the procedure they are being transferred to; and

the date of transfer.

A formal entry on form SAD will only be required where payment of duty is due on the transfer. For drawback goods, if as a result of the transfer a repayment claim will be made, the commercial document or record identifying the transfer should be used to support the claim.

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EQUIVALENCE

328. What is equivalence ?
This is a procedure that can allow you to use identical free circulation goods in place of IPR goods for processing and export. It must not be used to offset exports of free circulation goods in order to reduce import duty bills on non EC imports for use on the Community market. Some agricultural goods, such as rice, wheat and sugar, have special equivalence rules. IPR and free circulation goods held in a common stock can make the use of IPR more flexible:

removing the need for you to distinguish between IPR and free circulation goods;

when you may not have IPR goods on hand but do have identical free circulation goods available;

by enabling you to draw from a common stock of identical IPR and free circulation goods; and

by simplifying your record keeping requirements as you need only keep a balanced account of exported goods against IPR imports (provided you do not differentiate between the goods for any reason).

Variations of equivalence are available which permit you to use equivalent goods before you import or export goods under IPR. These are called prior export equivalence and triangulation but can only be used by suspension traders who import/export goods.

329. What conditions apply to equivalence ?
If you consider use of equivalence the following points must be taken into account:

if you do not export any of your imports it must not be because your non EC or EC customer differentiate between the goods, for any reason;

you will need to provide evidence that clearly demonstrates that the free circulation goods are exactly the same. Only in certain situations may goods differ, any difference must not itself be a characteristic or factor that changes its use or affects its acceptability to your customer eg colour (where colour is a factor eg clothing, any difference would not be acceptable); and

if you apply to use triangulation you must be able to prove that you are the sole beneficiary of using the system and that there is a commercial link between you and the subsequent importer of the goods.

330. How do I know when goods are equivalent ?
To be equivalent goods must be exactly the same as the goods you are authorised to import to IPR. They must be of the same commercial quality, technical characteristics and Tariff sub-heading (ie they share the same first 8 digits of the commodity code). The goods which you substitute for the imported IPR goods can be:

imported goods from the same source which you have entered to free circulation;

goods imported from other sources which you have entered to free circulation; or

goods obtained from Community sources which are already in free circulation.

Note: Authorisations may restrict use of equivalence to a certain source only.

To help you decide whether product A is equivalent to product B, consider the questions:

Are A and B mutually interchangeable ?

Would an EC and non EC customer ordering A (or a compensating product containing A) accept B (or a compensating product containing B) instead and vice versa ?

Do you differentiate between A and B for any reason ?

If your answer to the first two questions is "yes" and to the third "no", then assuming that A and B share the same first 8 digits of the commodity code, they will usually be equivalent for IPR purposes. When you apply to use equivalence the information you provide must be sufficient for a comparison to be made between the goods. You must state factors common to the equivalent goods and the goods you enter to IPR and suggest how this can be checked eg technical specifications, samples.

331. Can I use goods at a more advanced stage of processing than the imported goods ?
This can be allowed provided you carry out the essential part of the processing on the equivalent goods or it is carried out on your behalf by an operator named in your authorisation. You will need to demonstrate:

the more advanced stage goods were manufactured from goods which would qualify as equivalent as the goods you are authorised to import;

that you or an operator named on your authorisation carry out the same processing on the goods as the processing you are approved to do under IPR;

that compensating products you obtain from the goods at a more advanced stage are the same as those you are authorised to produce under your authorisation; and

the process takes place at your premises or at an operators premises named on your authorisation.

332. Do I need an authorisation to use equivalence ?
If you want to use equivalence, prior export equivalence, prior import equivalence or triangulation you must have prior authorisation to do so. Equivalence cannot therefore be used in conjunction with a simplified authorisation. If you apply for IPR because the goods you need are not available in the Community, you cannot claim equivalence on Community produced goods. Similarly, if you apply for IPR because the import goods are specified by your customer, you can only claim equivalence on goods from the same source. In all cases, equivalence is subject to Customs approval that the goods remain equivalent. When prior export or import equivalence is to be used the authorisation will also specify the period within which the replacement goods must be entered to IPR.

333. How can equivalence be used ?
Common stocking - you do not have to keep imported IPR goods separate from the equivalent goods; they can be stored together, it does not matter if you cannot differentiate between them. Goods sent for export will still be counted against the stock record balance of IPR goods.

Replacement parts - if you import goods for repair etc you can export a replacement part which you have repaired previously.

Goods not held in common stock - you can claim equivalence in other circumstances where the goods are not in a common stock. If you differentiate between the goods for any commercial reasons, your supervising office will want to know why, in order to decide if they will qualify as equivalent to the IPR goods.

334. What is prior export equivalence (EX/IM) ?
This is a procedure that allows the export of products made from equivalent goods to take place before you import the IPR goods ie export before import. Prior export can be of use to you in a number of ways:

Urgent export - if you receive an order but do not have any IPR goods in stock, you can (provided you are approved) export immediately, using equivalent goods drawn from your duty-paid stock. You can then import replacement goods to IPR and use them as you wish without paying duty.

Occasional exports - if you only occasionally have export sales, or export sales are a small proportion of your total sales, it may not be practicable to apportion imports in advance to IPR and free circulation. You can import goods to free circulation initially, wait until you have exported products and then import goods to IPR to replace the goods exported from your duty-paid stock.

Apportioning of imports - if you are entering goods to IPR on the basis of a reasonable estimate of your export needs and you find you have underestimated your IPR needs, you simply supply export markets with products made from free circulation materials. When you next import, you can enter a higher proportion to IPR, as you already have a "credit" of prior exports.

You cannot use prior export equivalence for goods held under IPR drawback.

A variation of prior export equivalence which provides for import to be made before duty paid goods are exported, is prior import equivalence.

335. How do I export equivalent goods ?
Present form SAD ensuring that "EX" is entered in Box 1 and the correct CPC is quoted in Box 37. In Box 44, enter your authorisation number and the address of your supervising office.

336. Are there any time limits for importing the replacement goods (EX/IM) ?
For most goods you must import within 6 months of export. If this proves difficult you can apply to your supervising office explaining the reasons for needing an extension. An extension can only be considered to a maximum total period of 12 months. For goods subject to a common market organisation (primarily agricultural goods in Chapters 1 to 24 of the Tariff) you must import within 3 months of export. The period for these goods cannot be extended in any circumstances. When you import replacement goods to IPR present an SAD, quote the correct CPC in box 37 and complete as a normal IPR import entry.

337. What is triangulation ? (EX/IM - Form INF 5)
This is a variation of the prior export equivalence procedure described above. Export of the free circulation goods is made by the authorisation holder or an operator named in the authorisation holders approval. The importer does not need to be authorised for IPR but must be named on the authorisation, under which the export and subsequent import is made. Triangulation with other Member States can apply where export and subsequent import take place in different Member States eg export from Malta with subsequent import made into France. In these circumstances details of the French importer would need to be included. If you export goods using prior export equivalence but then wish to import goods under triangulation, you may be allowed to have an INF 5 raised after the export was made, provided the prior export was made using the correct export CPC. You need to apply to your supervising Office for approval to use triangulation.

Another variation of triangulation which provides for equivalent goods to be imported before IPR goods are exported, can be made using the INF 9 procedure. You cannot use triangulation for goods held under IPR drawback. Checks may be made to ensure that use of triangulation only benefits the exporter of the equivalent goods ie the authorisation holder.

338. How do I export goods under triangulation (EX/IM) ?
When the equivalent goods are exported you must present a certificate of entitlement Form INF 5 with the export declaration. The correct CPC must be quoted in box 37 of the SAD. You must pass the certified INF 5 to the importer named in your authorisation. The importer will need to present the INF 5 at the time of entry to offset duty due on the replacement goods. Once the goods are entered they can be released without payment of duty for use on the community market.

339. How do I import goods to IPR under triangulation (EX/IM) ?
You will need to present the certified INF 5 passed to you by the exporter and complete an entry (SAD). Quote the correct CPC in box 37 and the exporters IPR authorisation number in Box 44. The import of replacement goods must be made within the time limit. Where the exporter and subsequent importer are in different Member States, the imported goods, although coming form outside the Community, will be subject to any charges under CAP to which they would have been subject, had they been consigned in free circulation from the Member State where the INF 5 was raised.

340. What is prior import equivalence (IM/EX) ?
This is a procedure that allows goods to be imported to IPR and for them to be released to free circulation without payment of duty provided equivalent goods are later exported. This enables you to benefit from duty relief at the time you export equivalent goods from your duty paid stock. This can be allowed provided you carry out the essential part of the processing on equivalent goods or it is carried out on your behalf by an operator named in your authorisation. You will need to demonstrate:

the goods were manufactured from goods which would qualify as equivalent to the goods you are authorised to import;

that you or an operator named on your authorisation carry out the same processing on the equivalent goods as the processing you are approved to do under IPR;

that compensating products you obtain from the equivalent goods are the same as those you are authorised to produce under your authorisation; and

the process takes place at your premises or at an operators premises named on your authorisation.

341. How do I import goods using prior import equivalence ?
When you import the goods complete an entry (SAD). In box 37 enter the correct CPC and complete as a normal IPR import entry.

342. How do I export goods using prior import equivalence ?
When you export equivalent free circulation goods complete a SAD. In box 1 enter "EX" and in box 37 enter the correct CPC. You must export the equivalent goods within the agreed throughput period for the goods you are authorised to import. Failure to export equivalent goods will cause a customs debt to be incurred on the goods that were entered to IPR.

343. What is triangulation import/export (IM/EX ) - Form INF 9 ?
This is a variation of prior import equivalence where import and subsequent export take place in different Member States. With this version of triangulation, Form INF 9 is raised by the authorisation holder when non EC goods are imported. Goods are entered to IPR but can released to free circulation. The certified INF 9 should then be passed on to the exporter. The exporter does not need to be authorised for IPR but must be named on the authorisation under which import has been made, as the person approved to export goods. Importing goods when you import goods to IPR in Malta you will need to complete an INF 9 and present a SAD, in box 37 enter the correct CPC and complete as a normal IPR import entry. Exporting goods when equivalent free circulation goods are exported, Form INF 9 must be presented with the export declaration.

You must export the equivalent goods within the agreed throughput period for the goods you are authorised to import. Failure to export the equivalent goods results in a customs debt on the imported goods from date they were entered to IPR. You cannot use triangulation for goods exported under IPR drawback.

344. What is the customs status of the goods imported and exported under equivalence ?
Under prior export equivalence (EX/IM), although in free circulation, the equivalent goods assume the customs status of IPR goods when the export declaration is accepted and IPR export procedures apply to them. The replacement goods change status and become Community goods when the import declaration is accepted and they are released to free circulation.

With prior import equivalence (IM/EX) the goods imported to IPR change status and become Community goods when the import declaration is accepted and they are released to free circulation, however duty liability on the goods remains until equivalent Community goods have been exported. Equivalent Community goods assume the customs status of IPR goods, when the export declaration is accepted and IPR export procedures apply to them.

The use of equivalence, prior export equivalence or prior import equivalence does not change the origin of the exported goods, which retain their true origin.

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EXPORT AND OTHER ELIGIBLE DISPOSALS

345. How is IPR discharged ?
When goods are entered to IPR drawback you pay duty and import VAT, when you enter goods to suspension, as the authorisation holder, you accept responsibility for the unpaid duty and import VAT. This applies whether or not you take ownership of the goods. If you have entered goods under several declarations and you are unable to determine which compensating product has been produced from which imported goods, you can discharge your duty liability on a first in first out basis.

346. What are the eligible disposals ?
You can reclaim the duty on drawback goods or discharge your IPR liability on suspension goods, if you dispose of the goods in an authorised way, such as:

export the goods from the Community;

export the goods from the Community via another Member State;

transfer the goods either to another customs procedure or to another operator authorised to use one of those procedures eg a customs warehouse, Free zone, Processing under Customs Control (PCC), Temporary Importation TI relief ;

transfer goods to another Member State to be entered to another customs procedure in that Member State;

transfer goods to another IPR authorisation holder in Malta or another Member State;

transfer the goods to a Customs approved use such as export shops, Embassies, ships stores or bunkers;

divert goods to the Community market with payment of duty, import VAT and compensatory interest (suspension goods);

destroy goods under Customs supervision (suspension goods only) .

For suspension goods you will be required to complete a return of receipts and disposals to account for your goods periodically. For drawback goods you will need to complete a return detailing the receipt and disposal of goods on which you are seeking a repayment of duty.

347. Is pre-entry of goods for export required ?
All IPR goods must be pre-entered (notified to Customs in advance) before exportation. You will need to complete copies 1, 2 and 3 of the SAD and present it to Customs at the office of export before the goods are shipped. Keep the airway bill or bill of lading with your records as evidence of export.

348. What procedures must I follow for postal export ?
You should clearly mark the package(s) with "IP/S" or "IP/D" goods as appropriate together with your IPR authorisation Number and your VAT number if you are registered. You will need to complete a SAD as above and present it to Customs. You will also need to obtain a certificate of posting which should be kept with your records as evidence of export.

349. How do I export goods from the community via another Member State ?
You must complete a SAD and present it to Customs at the office of departure before the goods leave Malta. When you export goods from Malta via another EC country, copy 3 of the SAD, endorsed by Maltese Customs, must travel with the goods and be presented to Customs at the office of exit from the EC. Copy 3 provides proof that the export formalities have been carried out in the EC. There are special concessions for goods exported by sea, air, post and rail on a single transport contract for carriage to a non-EC country.

350. How can I export goods from the community using the Community Transit procedure ?
Where your IPR goods have been entered to the export procedure, the goods will have to move to the office of exit from the EC under the transit procedures. The status of the goods must be shown in Box 1 of the SAD as `T1'. No CPC is required in Box 37, box 44 must include the consignors IPR authorisation number, their supervising office address and be endorsed `IP/S or IP/D goods'. You should ensure that you obtain a copy of your customer's declaration as this will act as your evidence of disposal of the goods and enable you to claim a repayment of your security.

351. How do I transfer goods to another customs procedure within Malta ?
When IPR goods are transferred to another customs procedure IPR liability will not be discharged until the goods have been received and entered to the new procedure. There should also be an intention to subsequently re-export the goods.

(a) Drawback goods - SAD should be used quoting appropriate CPCs for warehousing, for Free Zones or for TI relief in box 37 of the SAD and indicate T1 status.

(b) Suspension goods - SAD should be used quoting appropriate CPCs for TI relief or for a Free zone in box 37 of the SAD and indicate T1 status. If goods transferred to a Free zone are subsequently diverted to the Community Market, the period spent in the Free zone will be included for charging compensatory interest. Where transfer will be made to a customs warehouse, or Export shops (authorised as a customs warehouse) transfer should be made using form a SAD) quoting the appropriate CPC. If you and the receiver are approved you can also use a 2 copy SAD or commercial documents.

Processing under Customs Control (PCC) - in certain circumstances, you may be able to dispose of IPR compensating products by transferring them to PCC. You could save duty, for example, if your IPR secondary compensating products (by-products) contain valuable parts or components that would be worth recovering. If the recovery operation is carried out under PCC, you will pay import duty and VAT only on the recovered parts or components actually put onto the Community market.

352. How do I transfer goods to another Member State for subsequent entry to another customs procedure ?
Transfer can be made using the Community Transit procedure, complete a SAD. For drawback goods you also have the option of transferring without seeking repayment of duty until the goods have been received and entered to IPR suspension, customs warehousing, Free Zone, TI relief or export in the receiving Member State using the INF 7 procedure. For suspension goods you can also use a 3 copy SAD. If the goods are subject to import licence restrictions Box 44 should also be endorsed "commercial policy".

You will not discharge your IPR liability or be able to claim a repayment of duty until the trader in the other Member State has received and entered the goods into their records.

353. Does temporary export outside the EC (IPR and OPR) discharge IPR ?
Although temporary export does not discharge IPR, if the temporary export is for processing and return, you can use Outward Processing Relief (OPR) in conjunction with IPR. When you apply for IPR authorisation you should ensure that any time under OPR is included in the throughput period you require.

Provided you are authorised for OPR before you export the goods for processing, you can re-enter them to IPR and claim OPR when the goods are re-imported. You may want to do this so that if the products are not re-exported you will be able to pay less duty. If you decide not to re-import the goods you will need to apply to have the OPR entry invalidated and replace it with an IPR export declaration. When the goods are reimported to IPR additional duty will be due as a result of processing carried out under OPR. At re-importation the additional duty will be suspended if returned to IPR suspension or must be paid if returned to IPR drawback. When the OPR goods are reimported to IPR the IPR duty liability remains until the goods are discharged in one of the authorised ways.

354. Can I divert IPR suspension goods to the community market ?
If you supply IPR suspension goods including any products you make from them for use on the community market you must pay duty, import VAT based on the value of the goods inclusive of duty and compensatory interest. If only some of your compensating products are diverted to free circulation you will pay a corresponding proportion of duties suspended. You will need to present a diversion entry using the SAD and pay the amounts due. This can be done at the time of diversion or if you have been approved to release goods on a general basis, at the time your suspension return is due. Goods released to free circulation on a general basis with periodic submission of diversion entries, may incur additional compensatory interest charges.

355. Can I diverting goods subject to import licence restrictions ?
If you intend to divert IPR suspension goods or products which are subject to license restrictions, you must first obtain a licence from the Commerce Division. Present the licence with the diversion entry. Licensing requirements apply to the description by commodity code of the goods as first imported into the Community ie the "import goods" and not to their classification following inward processing (compensating product). Box 31 of the SAD must be endorsed "Commercial policy" and "IP/S goods".

356. Can I divert goods subject to tariff quotas or ceilings ?
You must check if quantitative restrictions apply in respect of identical goods at the time of diversion. If similar treatment does exist you should contact your supervising office.

357. What is the duty due on IPR goods diverted to the community market ?
The duty due will be determined on the basis of how much "import goods" are in the goods you are diverting. You may be able to pay less duty if the imported goods qualified for preferential tariff treatment when they were imported provided the same treatment is available for identical goods at the time you divert to free circulation. If you divert IPR goods received from another Member State, ask your supplier to send you Form INF1. This shows the amount of duty due and the date the goods were entered to IPR. Use this to calculate the compensatory interest. You will have to pay VAT at the national rate at the date of diversion based on the value of the goods, inclusive of duty, when they were first entered to IPR in the EC. You may be able to reclaim this as input tax. Compensatory interest charges are not included in the value for VAT purposes. If you are diverting a single item or several items with the same duty rate which you received from another Member State, you can calculate the VAT due as follows:

EXAMPLE:
Duty rate = 10%
Duty Suspended at first entry to IPR in the EC = Lm400 (as shown on Form INF 1)
Value for duty is Lm400 x 10 = Lm4000
Total = Lm4400
VAT is Lm4400 x 18% = Lm792

If you are diverting several items with different duty rates, ask your EC supplier to confirm the value for VAT of the diverted goods at import to that country. If you are diverting goods because you are transferring them to a taxable person in another Member State, you may be able to get relief from the import VAT.

358. What are the methods of calculating duty ?
There are three methods of calculating the duty due:

Quantity method (compensating products) - this is used where only one kind of product is produced under IPR. The amount of duty is determined by the amount of import goods used to produce the amount of compensating product diverted.

Quantity method (import goods) - this applies where more than one compensating product is produced and all elements of the import goods are found in each compensating product.

Value method - this is used where neither of above apply eg where import goods are broken down during processing. The quantity of import goods used to produce each compensating product is determined by the ratio of the value of each product to the total value of all products produced. The value of each product to be used for applying the value method should be:

the recent ex-works price in the Community; or
the recent selling price in the Community of identical or similar products and not be influenced by any relationship between the buyer and seller.

If you want to use the quantity method (import goods) instead you must submit an example of both methods to your supervising office, with an explanation why you need to use it. If either method gives similar results your application will be considered.

359. Can I divert IPR goods to End Use relief ?
If you have EC and non EC markets and import or receive goods for processing that are eligible for IPR and End Use relief but at the time of entry you do not know the ultimateuse of the goods you have the option of:

entering the goods to IPR and pay or suspend the normal rate of duties. In this case the import duties paid or suspended at the time of entry to IPR may be reimbursed or remitted when the goods are re-exported; or

apportioning entries between IPR and End Use based on past or estimated requirements.

Diversion of IPR goods to End Use relief may be approved provided it is not a normal method of disposal e.g. where an export order has been cancelled. If the IPR goods being diverted are eligible for End Use relief, duty on diversion can be calculated at the End Use rate provided, at the time of diversion, all conditions for granting End Use are satisfied. However, you are not required to hold an end use authorisation at either the time of entry to IPR or on diversion to end use. Any duty due will be calculated at the End Use rate of duty on the value of the goods at import to IPR. For IPR suspension goods compensatory interest will be charged at the End Use rate of duty from the date of first entry to IPR suspension. For IPR drawback any repayment of duty will be based on the difference between the duty paid on the imported goods and the duty due at the End Use duty rate.

360. Can I destroy IPR goods ?
(a) Suspension goods. If goods are found on or after entry, to be defective, contaminated, obsolete or otherwise unusable or you have processed goods which you wish to destroy, you may do so without payment of the duty provided you have the prior agreement of your supervising office. If waste and scrap resulting from destruction has a commercial value, duty and import VAT will be charged on the value and at the rate applicable to the waste and scrap. If destruction of goods is prohibited on environmental grounds, you may be able to discharge your liability by assigning the goods to another treatment or use that discharges IPR other than export. In these circumstances you must prove that export is either impossible or uneconomic.

(b) Drawback goods no relief is available for goods destroyed.

361. When is a Customs Debt incurred ?
A customs debt will be incurred:

if a condition governing the placing of the goods under IPR was not fulfilled at the time the goods were declared for IPR;

through a failure to meet an obligation that is a requirement under IPR eg failure to submit a suspension return, use of an incorrect CPC; or

if IPR goods are not re-exported or placed under another customs procedure that discharges IPR (the debt is incurred at the time the goods are diverted).

If you fail to meet an obligation required under your IPR authorisation you may be denied relief of duty. Interest for late payment will be charged on any customs duty debt that is not paid in full within 5 days of the due date. Interest will be calculated on a daily basis from the due date and is subject to an administrative charge (minimum charge of Lm25). This should not be confused with compensatory interest that is due on IPR suspension goods diverted to free circulation.

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SUSPENSION RETURNS AND DRAWBACK REPAYMENT CLAIMS

362. What are Suspension returns ?
You must complete a suspension return and send it to your supervising office to account for the goods you receive and dispose of under IPR. You must show what IPR goods you imported or received from other authorisation holders and where you sent them after processing. Your authorisation will tell you how often to send in the form (usually monthly or quarterly). Whatever period applies, the form must reach your supervising office within thirty days of the date the goods were disposed of or within 30 days of the end of your agreed throughput period. Nil returns are required. Duty, import VAT and compensatory interest is due if you fail to submit returns. It is your responsibility to ensure that returns are submitted in time, you will not be sent reminders. Where you have failed to submit a return within the required time scale you may apply to your supervising office for an extension. However, approval is not automatic and you will need to show that there are special circumstances which warrant such an extension before it is granted.

363. How do I claim repayment of duty on IPR drawback goods ?
After you have dealt with the goods in one of the authorised ways, eg export, you must submit your claim. Your authorisation will tell you how often to send in the form (usually monthly or quarterly). Whatever period applies, the form must reach your supervising office within 6 months of export or eligible disposal of the goods. It is your responsibility to submit your repayment claims in time. No reminders will be sent. Where you have failed to submit a claim within the required timescale you may apply to your supervising office for an extension. However, approval is not automatic and you will need to show that there are special circumstances which warrant such an extension before it is granted. If you have supplied drawback goods using the INF 7 procedure, you must send the endorsed INF 7 returned by your customer with your repayment claim. If you re-export drawback goods on which interest and import VAT have been paid, you may also reclaim the interest. If you do not re-export all your products there are various ways of working out the proportion duty you can claim back.

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COMPENSATORY INTEREST

364. Why compensatory interest is charged ?
Compensatory interest is charged on IPR suspension goods to prevent operators who divert such goods gaining a financial advantage over operators, who import directly to the Community market who will not have had the benefit of deferring the payment of duty due on the same goods at import. Compensatory interest will also be due on ex IPR drawback goods that are re-entered to a customs procedure under which duty is suspended eg IPR suspension, customs warehousing, TI relief, or Free Zone which are subsequently released to the Community market.

365. How compensatory interest is calculated ?
Compensatory interest is calculated from the first day of the month following the date of first entry to IPR suspension in the EC, to the last day of the month in which the goods are diverted and the customs debt is incurred. If goods are not put to an eligible disposal by the end of the agreed throughput period and no extension has been requested, the debt will be incurred on the day following the date the throughput period expires. If you have IPR suspension goods which were previously entered to IPR drawback, the charging period starts from the first day of the month following the month in which the repayment claim under drawback was made. The minimum charging period is one month, no interest is due for periods less than one month. Where ex IPR suspension goods are transferred to a customs warehouse, Free Zone, TI relief or OPR before diversion, any time spent in the other suspensive procedure is included in the charging period.

If you send or receive goods from another Member State, Form INF 1 will be used to establish the date when the goods first entered IPR in the EC. The INF1 can be raised and sent with the goods at the time of transfer or when the goods will be diverted.

366. How is the compensatory interest rate fixed ?
Compensatory interest rates are set on the 3 month money market rates published in the statistical annex of the Monthly Bulletin of the European Central Bank. The rate applied will be the rate 2 months before the month in which a customs debt is incurred and applies to the whole period for which interest is due. If goods were first entered to IPR suspension in another Member State, the rate for that country will apply.

367. How do I effect payment of any compensatory interest ?
You must pay the compensatory interest on a SAD when you pay the duty and import VAT. You will need to quote the appropriate CPC in box 37 and show the amount of interest in box 44. The interest payment is not subject to VAT, neither is the potential VAT at import subject to interest.

368. What are the circumstances when compensatory interest will not be due ?
No Interest is due if:

the period for interest is less than one month;

the interest due on a diversion entry is less than Euro 20;

you release the goods to free circulation to obtain a preference certificate (EUR1, invoice declaration or suppliers declaration) for export to a preference-giving country

you destroy goods under Customs supervision and the resultant scrap and waste is released to free circulation;

you divert secondary compensating products listed in Annex 75 of Commission Regulation 2454/93 which are eligible to be charged at their "own rate" due to export of your main compensating products; or

you can prove that a firm export order has been lost due to circumstances beyond your control. You must forward to your supervising office written evidence to support your claim.

Note - If you wish to divert goods whilst your claim is being considered you must
provide security to cover the full amount of potential interest unless

you paid cash security at least equal to the amount of duty due;

goods are placed under TI relief with partial relief from import duties;

drawback goods are placed under the Community transit procedure, customs warehousing, TI relief, IPR suspension or free zone, with a view to subsequent reexport from the EC, are released to the Community market but no repayment for the goods in question has been made.

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INWARD PROCESSING IN A CUSTOMS WAREHOUSE OR FREE ZONE

369. Can I carry out Inward Processing operations in a Customs Warehouse or Free Zone ?
If you use IPR suspension you can apply to carry out IPR operations on the premises of a customs warehouse or in a Free Zone. Although the goods remain physically in the warehouse or free zone you must transfer them from your warehouse or free zone records to the IPR records. Warehouse keepers assume responsibility for the goods and must maintain stock records to monitor the operations.

370. How do I apply for approval ?
You must obtain prior authorisation (either a local, Specific, Single Community or Integrated authorisation) specifying the warehouse (indicating type) or free zone where the processing will be carried out.

371. Are any simplified transfer procedures available ?
Subject to Customs approval simplified procedures may be used for the transfer using commercial documents. These documents must show the IPR authorisation number and at least sufficient information to identify the goods. Customs warehousing or free zone storage is discharged by entry in your IPR records which must be cross referenced to an entry in your customs warehouse or free zone stock records. If you transfer the goods back to customs warehousing or Free Zone after processing, commercial documents may also be used. These documents must show the IPR authorisation number and at least sufficient information to identify the goods. In addition "IP/S goods" must be shown on the commercial document covering the transfer. IPR is discharged by entry in the customs warehouse or Free Zone stock records which must show that the goods are ex IPR. Where the import goods are subject to import license restrictions the wording "Commercial policy" must also appear. If you export compensating products instead of transferring them back to warehousing or free zone you should complete a SAD and present it to Customs.

372. Can I divert goods from warehousing or a free zone to the Community Market ?
If the goods were in the IPR regime before warehousing or free zone, the period spent in the customs warehouse or free zone will be included in the period for charging compensatory interest.

373. When is import VAT payable ?
You do not pay import VAT on goods entered to IPR suspension or on customs warehouse or Free Zone goods. If you divert the goods to free circulation, import VAT will be due.

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PRODUCTION ACCESSORIES

374. What are production accessories, catalysts and agents ?
You can use IPR to obtain relief from duty on goods which are not found in the exported products but which allow or facilitate their production. This applies even if they are entirely or partially used up in the process eg:

chemical reaction accelerators, retarders or arresters;

goods needed to protect products during or after their working; or

goods needed to create the physical or chemical environment essential to the performance of certain processing operations.

These may not however include the use of:

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

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

equipment and tools.

375. How can I apply for authorisation to use a production accessory ?
You can apply for authorisation to use a production accessory on goods you enter to IPR or on free circulation goods provided they will be exported from the EC. If you are processing IPR goods you should include the production accessories on your application. If you will be processing free circulation goods you will be restricted to using IPR suspension and security will be required. You will need to provide details of the free circulation goods and all products made from them together with details of the intended destination of export.

376. What about production accessories for repeated use ?
If production accessories remain unchanged after use in your processing operation and can be used repeatedly, they will remain under IPR until they are re-exported or transferred to another customs procedure. If you want to continue to use them to process further IPR goods or free circulation goods for export, you must apply to your supervising office to have your through-put period extended if necessary.

377. How do I discharge duty liability ?
To ensure that no advantage is gained through using IPR over local or other community producers of similar goods, liability on production accessories will be discharged:

(a) if used on IPR goods - when all the main compensating products are exported and any secondary compensating products are exported (unless an own rate applies). If the goods are held under IPR suspension you have the option, if you do not export them, of applying to destroy them under Customs supervision;

(b) for accessories that can be used repeatedly - when all main and secondary compensating product have been exported or, for any secondary compensating products, an own rate can be applied. If the goods are held under IPR suspension you have the option, if you do not export them, of applying to destroy them under Customs supervision;

(c) if used on free circulation goods - when all the products are exported. Duty and compensatory interest (if security is other than by cash deposit) will be charged on the proportion of production accessory used for any products that are not exported.

In addition to the above if the production accessory is not used up in the production process it must itself be re-exported or transferred to another customs procedure.

378. Is it possible to divert IPR goods ?
If you only export a proportion of your main compensating products, relief will be determined on the basis of the amount of production accessory used to facilitate the production of the quantity of main compensating products exported. If an own rate does not apply to any secondary compensating product(s), you will be charged/not be entitled to reclaim:

duty and import at the rate appropriate to the imported goods;

duty and import on the proportion of production accessory deemed to have been used to produce the quantity of secondary compensating products; and

compensatory interest (suspension goods).

379. What is my liability if IPR goods are stolen ?

If your IPR goods are stolen you will still have to pay the suspended duty and compensatory interest on suspension goods or will not be able to reclaim duty paid under drawback unless the goods are recovered and returned to IPR control.

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CONDITIONS AND RESTRICTIONS OF IPR DRAWBACK

380. What are the main conditions I must meet if I have an IPR Drawback Authorisation ?
The following is a list of some of the main conditions which you must meet if you import, export, process or hold goods under IPR drawback. Failure to comply with any of these conditions could result in your prosecution, seizure of the goods, refusal of relief or withdrawal of your authorisation.

If you issue transit or status documents which show the status of the goods as T2 (free circulation) then you must not make any claims for repayment of import duties.

If you issue preference certificates for the goods then you must not make any claim for repayment of import duties unless the preference rules allow you to.

You must send your supervising office a claim at intervals agreed with Customs and within six months of disposing of the goods.

You must not claim equivalence (common stocking only) unless you are authorised or between goods which are not of the same 8 digit commodity code, commercial quality and technical characteristics.

You cannot use prior export equivalence or triangulation.

If you transfer the goods to another IPR drawback trader you cannot reclaim the import duties from Customs.

You must allow our officer to examine your records and goods at any reasonable time.

381. Which goods are excluded from drawback ?

goods subject to quantitative import restrictions;

goods subject to tariff measures within quotas ;

goods subject to presentation of an import or export licence ;

goods subject to a certificate within the framework of the common agricultural policy;

goods where an export refund or tax has been set for the proposed compensating product;

goods for export under prior export equivalence;

goods for import under triangulation; and

goods which you will process under IPR in a customs warehouse or free zone.

If you want to claim IPR on these goods, use suspension.

382. Which are the situations where drawback will not be repaid ?
Drawback will not be repaid on compensating products which, at the time the declaration for discharge is presented:

are subject to an import or export licence;

are subject to presentation of a certificate within the framework of the common agricultural policy;

are eligible for export refunds or tax has been set for them; or

have been transferred for Processing under Customs Control (PCC);

If you want to claim IPR on these goods, use suspension.

383. Which conditions apply to the use of IPR suspension ?
The following is a list of some of the main conditions which you must meet if you import, export, process or hold goods under IPR suspension. Failure to comply with any of these conditions could result in payment of duty, prosecution, seizure of the goods, refusal of relief or withdrawal of your authorisation.

There should be an intention to export the goods imported to the suspension system

If you transfer goods to an authorisation holder approved for IPR drawback you must first pay the suspended duties, compensatory interest and VAT

You must not issue transit or status documents which show the status of the goods as T2 (free circulation)

You must not issue preference certificates for the goods unless the preference rules allow you to

You must send a return to your supervising office within thirty days of the expiry of your agreed time limit

You must not claim equivalence unless you are authorised. Equivalence should not be claimed between goods which are not of the same 8 digit commodity code, commercial quality and technical characteristics unless special equivalence rules allow.

You must allow our officer to examine your records and goods at any reasonable time

Unless you are approved and authorised, you must re-export or otherwise dispose of the goods within the time limit set by our local officer or apply for an extension of the time limit.

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PROCESSING UNDER CUSTOMS CONTROL (PCC) AUTHORISATION

384. What types of authorisation exist ?
There are four types of authorisation:

simplified authorisation;

national (local) authorisation;

single "Community" authorisation; and

integrated authorisation.

If you intend to carry out all the processing in Malta, you need only apply for authorisation here. If you intend to process goods in more than one Member State, you can apply for a single "Community" authorisation. You should normally apply in the Member State where your records are kept and where you will be carrying out at least part of the processing activities. It is important that you apply for authorisation at the correct time and in the correct Member State. If you do not hold a valid authorisation we cannot grant duty relief.

385. What is a Simplified Authorisation ?
For goods and processes for which the economic conditions are deemed to be satisfied, (that is the items covered by Part A of Annex 76) goods for process may be declared to PCC at the time of importation, using a simplified authorisation procedure. This may suit you if you make only occasional imports to PCC and the processing operations are carried out only in Malta. Application is made in accordance with model in Annex 67 (or simplified form) and presented with the import declaration. Authorisation is granted when we accept the import declaration. Each time you use this procedure you must:

Declare the goods using the appropriate CPC on the SAD.

Using a simplified format give:

full details of the goods;

the item under which the processing will be carried out; and

the rate of yield.

If the processing operation is covered by Item 10 and is subject to the 50,000 Euro annual "duty advantage" limit, you must attach a schedule showing how this has been calculated. Unless you specify on the application form that a different throughput period is required, you will be given 6 months in which to complete the processing and submit the return. You should ensure that you monitor any limits you entered on the Form. If you exceed these limits you may be liable for a customs debt. If you expect to exceed the 50,000 euro limit you should apply for a national authorisation on model form in Anne 67.

386. May I transfer PCC goods to another trader ?
If you declare goods to PCC using this procedure you may transfer them to another trader who holds a full national, or single "Community" authorisation, but you may not receive PCC goods transferred to you by anyone else.

387. Are the authorisations supervised ?
Yes, Customs will supervise them. At the end of the throughput period allowed for processing, you must complete an explanatory statement and send it to the Customs Economic Procedures Unit (CEPU). This will discharge the goods from the PCC arrangements and the potential duty liability. If you have transferred the goods to another PCC authorised trader you must quote their authorisation number.

388. Will Customs visit my premises ?
We may visit you either during the period of authorisation or after processing is completed to verify that the PCC operation complies with the conditions of your authorisation. We will also check that you are entitled to the duty relief claimed. You must retain all records relating to goods entered under this procedure for a period of 3 years after the return has been submitted. If you intend to carry out regular processing under the PCC arrangements you will probably find it more convenient to apply for a normal national authorisation.

389. Can you give me some more details on national authorisations ?
If you intend to carry out processing under PCC arrangements on a regular basis in Malta only, you should apply for a national authorisation. You can apply to use any process, but if the process is not itemised in Part A of Annex 76, an economic test will be required. If you are authorised for a specific quantity/value limit following an economic test you must ensure that you can monitor the level of goods imported/processed. If you exceed the authorised limits you may be liable for a customs debt. If you think you may exceed the limits authorised you should apply to your supervising office and request to amend your authorised limits. If your application is acceptable, we will issue an authorisation number and a letter detailing the conditions and requirements of your authorisation. The Customs office responsible for your authorisation will be your supervising office.

390. Can you give me some more details on single "community" authorisations ?
If you will be carrying out processing operations in more than one Member State you may apply for a single authorisation to cover all your PCC activities in the Community. Application should normally be made in the Member State where your main accounts are held and where at least part of the processing operations will be carried out. However, if this does not suit your business, for example, because accounts are held in a different Member State from the processing operations, you may apply to the customs authorities in either Member State. As the application has to be considered by each Member State involved, you should apply at least 2 months before the first intended entry of goods for process. You will not be able to obtain relief in other Member States until your application has been approved. If you apply in Malta you should submit your application using the model form available in Annex 67. In addition to the information required for a national authorisation you must provide the following details:

a list of the Member States into which goods will be imported and/or processed on your behalf; and

the addresses of the Customs offices in each Member State where you intend to present import declarations, or declarations to free circulation.

Normally other Member States will accept applications in English, but we may have to ask you to provide a translation of your application, or parts of it, in the language of the other Member State(s) involved.

391. Can you give me some more information on Integrated Authorisations ?
If you need an authorisation to include use of other customs procedures, for example IPR as well as PCC, you can apply for an integrated authorisation. If your application mainly covers PCC, for each type of goods you must:

indicate under which procedure the goods will be placed;

describe the processing operations, and include details of any proposed transfer between procedures in; and

any additional requirements of the other procedures applied for.

If the main customs procedure required is not PCC, but is IPR, for example you should complete the application using the appropriate form for that procedure with any additional requirements for PCC added.

If you wish to apply for an integrated Community authorisation, you must use the model form in Annex 67.

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PCC CONDITIONS

392. How are the processed goods identified ?
In theory, where there is a duty advantage obtainable on the compensating products, any process can be undertaken on any type of goods. However, we can grant authorisation only for processes which involve changing the imported goods in such a way that it would not be economically viable for them to be restored to their original condition at import. It must also be possible for the imported goods to be identified in the compensating products. Where this is not practical, the processor must be able to show by documentary evidence that the imported goods have been used to produce the compensating products. You may use commercial documents such as invoices and correspondence, serial numbers or other distinguishing marks, samples or illustrations to identify the imported goods. You must specify in your application the means of identification to be used.

393. What does the throughput period mean ?
This is the period of time between declaring the goods for process to the PCC arrangements at import, and discharging the arrangements by declaring the processed goods to free circulation, or to another "customs approved treatment or use". The throughput period will be determined according to the needs of the authorisation holder and must be specified in the application and authorisation. If the throughput period is likely to be exceeded you should notify your supervising office and request an extension. This will normally be granted provided there are satisfactory reasons for the delay in processing the imported goods.

In the case of goods entered to PCC under the simplified arrangements, unless you request a longer period when completing the application, a fixed throughput period of 6 months will be authorised. If this is insufficient you must notify the Customs Economic Procedures Unit (CEPU) and request an extension.

394. What does the Rate of Yield mean ?
The rate of yield is the quantity of compensating product you obtain by processing a fixed quantity of imported goods. It is used to establish the quantity of imported goods you have used in the process, to satisfy customs that the imported goods have been properly accounted for. When calculating the rate of yield you should take into account any imported goods wasted in the processing operation, since duty relief is granted on the wastage element also. The rate of yield should never be stated as a percentage. Where production involves the assembly of component parts, the most reliable method of stating the rate of yield is as a schedule, or "bill of materials", listing the quantity and type of each component included in the finished product. The expected rate of yield, or the method by which it is to be calculated, must be specified in your application. If your application includes more than one processing operation you must give the rate of yield for each processing operation. In cases where the rate of yield is not known at the time of application, or the rate may vary, you should record on your application that you intend to use production records as the basis for establishing it. If you have entered the rate in your application/authorisation form and it changes or is incorrect, you must inform the supervising office immediately.

395. When is an economic test required ?
In certain cases EC law requires an examination of the economic conditions to establish whether use of PCC will enable processing activity to be created or maintained in the Community, without harming the essential interests of Community producers of similar goods. The conditions which apply to various types of goods imported for process are described in Annex 76 of Commission Regulation (EEC) 2454/93.

For the specific goods and processes listed in Part A of the Annex the economic conditions are deemed to be satisfied, and no economic test is required. Item 10 is a "blanket" provision covering any type of process on any type of goods, other than goods in the agricultural sector (CAP) or goods liable to anti-dumping (ADD) or countervailing duties. Authorisation under this item is subject, however, to an overall "duty advantage" of 50,000 Euros per applicant, per calendar year. If you import more than one item to manufacture one product all items must be included in the calculations, for example, if you import 2 items, one with a duty advantage of 50,000 Euros and one with a duty advantage of 30,000 Euros both items will require an economic test. Applications involving a number of different goods/processes may estimate the duty advantage by either:

applying an average duty rate to all your goods/processes under PCC; or

applying the calculation (described later) to the main imported goods eg the 3 or 4 goods that account for approximately 75% of the customs value of your imports.

If your application requires an economic test no authorisation can be granted until the results of the test are known. You should keep adequate records to enable customs to refund any duty paid during the period the application is being considered. If successful your application can be backdated to the date on which you applied for authorisation. You should then submit a request to reclaim any duties paid during the period your application was under consideration. If you are authorised for a specific quantity/value limit following an economic test you must ensure that you have systems in place to monitor the levels of goods imported/processed. If you exceed the authorised limits you may be liable for a customs debt. If you think you may exceed those limits you must inform your supervising office without delay and request an amendment to your authorisation. This may involve a further economic test and as such you should provide further evidence to support your increase in limits.

396. What if my application is not specified in Part A of the annex ?
Applications to process goods not specified in Part A of Annex 76 of Commission Regulation (EEC) 2454/93 are subject to an examination of the economic conditions. For "industrial" goods, not specifically itemised in Part A, or where the 50,000 Euro duty advantage limit will be exceeded, the economic test will be carried out in the Member State in which application is made. In Malta this will be done by the MALTA ENTERPRISE. For CAP goods or goods subject to other agricultural measures, to anti dumping duty, countervailing/safeguard/additional duties etc the application will need to be forwarded to the European Commission where it will be considered by the Customs Procedures with Economic Impact Section. The application must state which goods are subject to CAP/countervailing/additional duties etc. You should ensure these details are entered on your application form to avoid any delays. Goods in chapters 1 - 24 that are not subject to additional duties etc may be considered without reference to the European Commission but still require an economic test to be carried out. In both cases you should forward your application form, with the necessary details as outlined above to your supervising office. You will also need to provide additional information to support the economic basis of the application.

397. Is security always required ?
We will not normally require security, but in certain circumstances (for example if you wish to begin processing before your application is approved) you may be asked to lodge security for the potential duty and VAT on the imported goods. If required, security must be provided either by cash deposit or in the form of a guarantee issued by a recognised provider, such as a bank.

398. May I authorise a third party to act on my behalf ?
You can use a third party i.e. an authorised agent to complete entries on your behalf but you must ensure that you give clear written instructions for the goods to be imported.

Direct representation - the third party makes an entry in your name and on your behalf but you are still responsible for any customs debt that may arise if an entry is incorrectly made.

Indirect representation - the third party makes an entry in their own name and they are jointly and severally liable with you for any customs debt that may arise if an entry is incorrectly made.

The third party must quote your PCC authorisation number on the SAD declaration forms. Always make sure that your third party sends you copies of the customs declarations for your records, and check that the correct CPC has been used and that the duty calculations are correct. When you renew your authorisation, remember to tell the third party your new number. If you do not do this, your imports may be delayed, or we may require security for the release of the goods.

Note: Third parties who enter to PCC without written authority of the person in whose name entries are made, will be liable for any customs debt incurred.

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AUTHORISATION

399. When should I apply for an Authorisation ?
You should normally apply to use the PCC arrangements at least one month before you need to use the arrangements. If you are relying on the availability of duty relief to make the processing operation economically viable, you should allow sufficient time for us, and if necessary MALTA ENTERPRISE and the Ministry for Rural Affairs and the Environment (for agricultural goods), to consider your application before you begin to import the goods for process. If, exceptionally, you wish to start processing before the result of your application is known you should seek advice from your supervising Customs office. We may require you to provide security for the potential customs charges. When you apply you should provide as much information as possible about the goods you will be importing, and the processes you intend to carry out. We are required to give a decision on your application within 30 days of receiving all the necessary information to enable us to make one, but if it is necessary for us, or the ME/MRAE, to ask you to provide further information, this will probably delay the issue of an authorisation. If you are applying for a single "Community" authorisation, we must also send the application to the other Member State(s) involved for them to consider. Other Member States have a period of 15 days in which to acknowledge receipt of the application, and must give a decision on authorisation within 30 days of receipt.

400. What happens after I apply ?
We will determine whether the type of process you have applied for is allowable under the PCC rules. If you are applying to carry out a process which is not covered by Part A of Annex 76, an economic test will be required, and we will forward your application to ME for consideration. Along with your application you must provide:

evidence of the economic reasons for needing to use imported goods in the process; and

evidence that authorisation will lead to the creation or maintenance of processing activity within the Community.

You should enclose documentary evidence to support your application.

We will give you a decision within 30 days of receiving all the information we need to consider your application. All documentary evidence you supply will be treated as "Commercial in Confidence" and will be returned to you after use, if you wish. We may need to visit you to check that your records and systems are adequate for audit purposes, and to find out more about your imports and processing operations. If your application is approved, we will write to notify you of your authorisation number and any special conditions relating to its use. During your period of authorisation we may make further visits, to inspect your records and to make sure that you are complying with the conditions of your authorisation and claiming the correct amount of duty relief.

401. What will be the period of Authorisation ?
The period for which PCC authorisation is granted will take into consideration the needs of the applicant, but will not normally exceed 3 years. Authorisation can be granted for longer periods, but you will have to provide reasons, and evidence such as long term contractual arrangements, if you wish to be authorised for more than 3 years at a time. If the process is one which requires the ME/MRAE, or the EC committee, to carry out an economic test, the period of authorisation granted may be shorter than 3 years, or may be subject to periodic re-examination of the economic conditions. When the authorisation expires you must apply for renewal if you wish to continue to be approved.

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RECORDS

402. What records must I keep ?
You must keep records of all the goods you import for processing under PCC. These must show:

the type of goods imported;

the processes which are carried out;

what the products are; and

how you dispose of them or any unprocessed goods.

You should be able to use your normal commercial records, but we may ask you to adapt them to show the information needed to support your claims to duty relief.

403. Can I keep my records on computer ?
If you wish to keep your processing records on a computer system or other electronic media, you must advise us when you apply for authorisation. We will need to make arrangements to ensure that the system meets our requirements. You will also have to provide technical information and assistance to our staff if they require it. You must keep all records relating to your PCC transactions for 4 years after your authorisation expires. We may still visit you even after your authorisation has expired. You must make your records available to our officers for examination if you are asked to do so.

404. May I alter or amend an Authorisation ?
If your circumstances change after your approval has been issued you must notify the Customs office which first issued your authorisation in writing. As the authorisation holder you must ensure that all the details in it remain current and correct. If you wish to use a different process, or process a different type of goods, you must write immediately to your supervising office who will check that the intended process is allowable under PCC. If an economic test is required we will also have to consult the ME/MRAE as necessary and you may need to provide further evidence to support the requested alteration. If you have a single "Community" authorisation we will also need to consult the other Member States where processing is carried out.

405. What if I change my business name or legal status ?
If you change the name of your business without changing its legal status, you should tell the Customs office that issued your authorisation. Your authorisation can be amended to show the new business name.

If you change the legal status of the business, for example by becoming a limited company, or you take over a business that already holds an authorisation, you will need to apply for authorisation for the new legal entity if you intend to continue using PCC.

406. How may I renew an authorisation ?
If you wish to renew your authorisation, and the goods and processes involved remain unchanged, you should apply in writing to the issuing office no later than one month before expiry. There should be no need for you to complete a further application unless a review of the economic conditions is necessary. If this is the case, we may have to ask you to provide updated documentary evidence to enable ME/MRAE to conduct the economic test. As the authorisation holder it is your responsibility to make sure that you apply for renewal if you still require it. We do not issue reminders. If you do not hold a valid authorisation you may have to pay additional customs charges which you may not be able to recover at a later stage.

407. Can I apply for retrospective authorisation ?
You can but they may only be issued in certain circumstances. All requests are considered on an individual basis. Application should state the reasons why it is required. You will also need to be able to produce records to support your application and show that the goods in question were or are eligible for relief. In order for your application to be considered, there are basic criteria that have to be met:

exceptional circumstances must apply. Retrospection can not be regarded as a regular or recurring form of authorisation;

you will need to establish that there is an economic need for authorisation. Where necessary an economic test will be carried out;

no obvious negligence or attempted deception should be associated with the application;

all periods of validity and through-put periods must be/have been adhered to;

the applicants’ accounts must be able to show that all the requirements of PCC can be deemed to be met; and

all the formalities of the arrangements must be regularised by amending any relevant declarations.

Within the context of retrospection, EC Commission guidelines define "obvious negligence" as being any situation where the applicant has failed to comply with the conditions for granting an authorisation although they must have been aware of the need to obtain an authorisation prior to importation. Any period of retrospection cannot be dated beyond one year from the date your completed application is received.

408. Can I cancel an authorisation ?
If your circumstances have changed and you no longer need authorisation to use PCC, you can have your authorisation cancelled by notifying your supervising office in writing. In your letter you should state the date from which cancellation is requested. We may annul an authorisation if we find that it was issued on the basis of incorrect or incomplete information. In these circumstances you may be required to repay the amount of duty and any other customs charges relieved under it. We may revoke an authorisation if the conditions of authorisation have not been complied with, if the economic conditions have changed, or if the item under which the process is authorised is removed from Annex 76. In any of these circumstances we will inform you in writing of the reasons for the decision.

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IMPORTING PCC GOODS

409. How do I enter goods to PCC ?
You can put eligible goods into PCC:

at import - enter the goods on a SAD using the correct CPC;

from IPR - enter the goods on a SAD quoting the appropriate CPC; or

from a customs warehouse or free zone using simplified transfer procedures, or using a SAD if required by Customs.

If you hold a local authorisation or a single "Community" authorisation issued in Malta, you must enter the authorisation number in Box 44 of the SAD. If you have an integrated authorisation and you wish to enter goods to PCC, you must give your authorisation number with the prefix "PC". You must comply with any import prohibitions or restrictions on the imported goods.

410. May I process goods under PCC in a customs warehouse or free zone ?
The customs warehousing arrangements allows some simple processing operations to be carried out. These are the "Usual forms of handling" described in Annex 72 of Commission Regulation (EEC) 2454/93. These forms of handling are also allowed under PCC (Annex 76, Part A, item 7), and can be performed under PCC arrangements, whether or not in a customs warehouse or free zone. If, however, you wish to carry out processing in a customs warehouse or free zone, which goes beyond the usual forms of handling normally, allowed, you will need to be authorised for PCC, and you must place the goods for process under the PCC arrangements. If you frequently carry out PCC operations in a customs warehouse or free zone, you may apply to use simplified transfer procedures relying on commercial documents. These documents must show the PCC authorisation number and at least sufficient information to identify the goods. The goods may physically remain in the warehouse or free zone, but storage is discharged by an entry in your PCC records. This must be cross-referenced to an entry in the warehouse or free zone stock records.

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TRANSFERRING PCC GOODS

411. How can PCC goods be transferred ?
Goods can be transferred:

between PCC authorisation holders in Malta using the declaration procedure;

to a PCC authorisation holder in another Member State using the Community transit procedure, or a 3 copy SAD, a 2 copy SAD or commercial documents;

within an integrated authorisation eg from PCC to customs warehousing by notation in commercial records.

412. Do I need to provide a guarantee when I transfer goods ?
Only certain goods that are considered to bear increased risks when transferred will, subject to minimum quantities, require a guarantee. This includes the movement of such goods to or from the port, to premises where processing takes place and between sites and operators approved within the same authorisation. (These goods are referred to also in questions on Inward Processing Relief.) In certain circumstances, the amount of guarantee can be reduced. If you wish to apply for such a reduction, contact your supervising office for further details. Where security has already been provided, for whatever reason, additional security for transfers will only be taken if the transfer guarantee subject to minimum quantities is greater.

413. Do I need to be authorised to transfer goods ?
The method of transfer you intend to use should be specified in your application/authorisation. With the exception of the declaration procedure or 3 copy SAD transfers to another Member State, all other methods of transfer require prior approval.

414. How do I carry out transfers within the same authorisation ?
You can transfer goods between locations or other processors included in your authorisation using commercial documents. They must be endorsed with "PCC goods". The location of the goods should also be entered in your records.

415. How do I transfer PCC goods using the declaration procedure (Malta) ?
The consignee completes a SAD using the appropriate customs procedure.

416. Are there any simplified procedures for transfers within Malta ?
Simplified procedures can allow use of a commercial document or a simplified Form. You will need to write to your supervising office giving details of the goods you expect to supply/receive and the name and address of your customer/supplier. It is your responsibility to ensure that they are authorised for PCC and are or will be approved to use the same simplified procedure. The supervising office must be satisfied that your records are sufficient to support use of the simplification before it can be approved.

417. What should I do if I am approved to use commercial documents ?
Commercial documents can be used if approved. The commercial document used must include "PCC goods" and contain the following information:

the name, address and authorisation numbers of the supplier and customer;

the invoice number and any other reference number needed to trace the goods through the supplier's and customer's records;

the description, quantity and commodity code(s) of the goods supplied;

the entry number and date of the SAD, simplified form or commercial document used to enter the goods to PCC;

value for Import VAT and the amount of duty suspended.

Movement of documents where the requirement to notify the supervising office of each individual transfer has been waived will entail that a copy of the commercial document/or simplified should be retained by the supplier and the original sent with the goods retained by the customer. The customer will be responsible for the goods when they have received and entered the goods in their records. A commercial receipt should be issued which should be retained in the supplier's records as evidence that the duty liability has been discharged.

418. How do I transfer PCC goods between Member States ?
Unless simplified procedures are approved, transfers of PCC goods to or from other Member States can be made using a 3 copy Form SAD or the Community Transit procedure.

(a) 3 copy SAD - Copies 1, 4 and an additional copy 1 are used (no CPC is required). The supplier keeps copy 1 with their records and sends copy 4 with the goods to the customer and the additional copy 1 to their supervising office. Copy 4 is retained by the customer who should issue a commercial receipt for the goods. The receipt should be kept with the suppliers records as evidence that the duty liability has been discharged.

(b) Community Transit - The transit Form SAD must show the status of the goods as T1. Box 37 (CPC) should not be completed. Box 44 should include the supplier's PCC authorisation number/Customs office address and be endorsed "PCC goods".

419. Can simplified transfer procedures for PCC goods between Member States be used ?
Simplified transfer procedures can allow the use of a 2 copy Form SAD or commercial document. The supervising offices must be satisfied that records are sufficient to support use of the simplification before it can be approved. If you want to send PCC goods using a simplified procedure, you will need to write to your supervising office giving details of the goods you expect to supply and the name and address of your customer. Your customer in the other Member State will also need to apply to their Customs office. You will need to supply written confirmation that they have been approved to receive the goods under the simplified procedure. The customer becomes responsible for the suspended duty and potential import VAT when the goods are received and entered in their records. The customer is required to issue a commercial receipt for the goods which the supplier should keep with their records as evidence that their duty liability has been discharged. The following identifies in general what may be approved for PCC transfers made from Malta. These will be subject to what has been required by other Member States involved.

(a) 2 copy SAD - copy 1 and 4 of the SAD is used. The supplier retains copy 1 and sends copy 4 with the goods to their customer who should issue a commercial receipt for the goods. The receipt should be kept with the supplier's records as evidence that duty liability has been discharged, which the supplier should keep with their records.

(b) Commercial documents - if approved, copies of the commercial document must be clearly endorsed "PCC goods" and contain the following information:

the name, address and authorisation numbers of the supplier and customer;

the invoice number and any other reference number which is needed to trace the goods through the supplier's and customer's records;

the description, quantity and commodity code(s) of the goods supplied;

the entry number and date of the SAD, simplified form or commercial document used to enter the goods to PCC;

value for Import VAT and the amount of duty suspended.

Unless otherwise approved the flow of the commercial documents should follow the flow of the 3 copy Form SAD. However, the requirement to notify your supervising office of each individual transfer can also be waived and alternative methods of notification agreed including a standing notification.

420. How do I transfer PCC goods between Member States under a Single Community authorisation ?
You must ensure when completing your application for PCC, that you provide the name(s) and address(es) of any processors who will handle your goods and the locations where the goods will be processed and transferred. Subject to agreement with the Member States involved, transfers can be made within the authorisation between the locations and/or named operators without official documentation but it will be your responsibility to maintain accurate records that show where the goods are at all times. The recipient must also keep records to show where the goods are and what process they undergo.

421. How do I transfer goods within an integrated authorisation ?
If you have an integrated authorisation eg PCC and customs warehousing, transfer of goods between the procedures can be made by entry in your records. Records must be sufficient to trace the goods from their first entry through processing, transfer and final disposal ie:

details of the goods transferred;

identify the procedure under which the goods were held and the procedure they are being transferred to; and

the date of transfer.

A formal entry on Form SAD will only be required where payment of duty is due on the transfer.

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DISCHARGING PCC

422. How do I dispose of PCC products ?
The main purpose of PCC is that the processed products should be put into free circulation. However, if circumstances change you can dispose of the products or any unaltered goods in any of the following ways:

put them into free circulation;

put them into another customs regime, for example IPR, customs warehousing etc;

export them;

put them back into PCC for further process; or

destroy them under customs supervision.

In the first four cases you must enter the goods on a SAD, quoting the appropriate CPC. If you wish to put the goods into IPR you must first be authorised for this regime. You should consult your supervising office.

If you wish to export processed products or unaltered goods you must obtain prior permission from your supervising office. You should explain why it is impossible for you to put the products into free circulation within the EC. Export should not be a regular means of disposal for your PCC products.

423. Can PCC goods utilise End-Use relief ?
Processed products which qualify for end-use relief may be released to free circulation at a reduced rate of duty on account of their end-use regardless of whether the import goods were eligible for favourable tariff treatment or not. However, if no satisfactory evidence is available for the processed products, the import goods will not be entitled to relief under PCC and duty and import VAT will be due on the imported goods on the basis of the charge elements appropriate to them at the time of acceptance of the DECLARATION to PCC . You must also note details of the end-use authorisation holder whom you have supplied your goods to and keep a record of the SAD using the appropriate CPC to discharge your liability.

424. What about waste and scrap ?
If your process produces waste/scrap as a secondary product you will need to declare the waste/scrap at the rate appropriate to the imported goods (and not the rate applicable for such scrap), based on the value of the imported goods.

425. How do I calculate the duty payable on goods or products put into Free Circulation (FC) ?
For products liable to "ad valorem" duty (a duty rate expressed as a percentage of the customs value) you must choose one of the following four methods of valuation:

the customs value of the imported goods plus the cost of processing;

the customs value of identical or similar products imported from outside the Community at or about the same time as you put the products into free circulation;

the selling price of the products, provided it is not influenced by any relationship between you and the customer; or

the selling price in the Community of identical or similar products provided this is not influenced by any relationship between buyer and seller.

426. How do I calculate processing costs ?
Processing costs means all the costs incurred to obtain the processed product, including overheads and the value of Community goods used, if any, but excluding profit, the customs value of the import goods and import duties. This sum will need to be added to the customs value of the imported goods if you are using the first method under Question 425 to calculate the duty payable on goods or products that are being entered to free circulation.

427. How do I calculate the duty on products which are liable to specific duty rates ?
For products liable to "specific" duty (a specified amount of duty per item) you must pay duty on the quantity of processed goods at the rate which applies on the day you put them into free circulation. If you put unaltered goods into free circulation you must calculate the duty on the customs value of the import goods, at the duty rate which applied when you put them into PCC. Free circulation entries for processed products or unaltered goods must be presented at the Customs office identified in your application/authorisation form.

428. How can I claim preferential duty rates on products ?
Products of processing in the Community cannot qualify for preference as such, but they can
sometimes benefit from a preferential rate of duty. The rules regarding preference are complex
but if:

the imported goods qualify for preference, (and you produce the appropriate certificates); and

there is a preference rate available under the same preference arrangements (for example, GSP) for the processed products when you enter them for free circulation; then you may use that preferential rate for your products.

You should also be aware that some preference rates are also subject to tariff quotas and ceilings. If this is the case you can use the preference rate for your processed products only if the quota or ceiling applicable to the imported goods is open when you put the products into free circulation. The amount set against the quota or ceiling will be the quantity of imported goods used to make the products put into free circulation.

If preference is available on the imported goods and you want to avoid coping with the complexities of the above rules, you may prefer to claim the preferential rate of duty at the time of importation and not put the goods into PCC at all.

429. Is import VAT suspended when goods are declared to PCC ?
Import VAT is suspended along with other Customs duties when you declare goods to PCC at import. When you declare the compensating products to free circulation, VAT is due on the duty paid value of the products. Any unaltered goods you declare to free circulation will also be liable to VAT at the appropriate rate.

430. When will a Customs Debt be incurred ?
A customs debt will be incurred:

if a condition governing the placing of the goods under PCC was not fulfilled at the time the goods were declared for PCC;

through a failure to meet an obligation that is a requirement under PCC eg failure to submit a return, use of an incorrect CPC; or

if PCC goods are not released to free circulation or placed under another customs procedure that discharges PCC (the debt is incurred at the time the goods are diverted).

If you fail to meet an obligation required under your PCC authorisation you may be denied relief of duty. Interest for late payment will be charged on any Customs duty debt that is not paid in full within 5 days of the due date. Interest will be calculated on a daily basis from the due date and you may be subject to penalties.

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RETURNS

431. Am I obliged to submit returns ?
Submission of a return, or "bill of discharge" is a condition of authorisation to use the PCC arrangements. If you are using the simplified authorisation procedure, "Community", or integrated authorisation holders, you must make a return to your supervising office. The return may be made, if you prefer, on a company letterhead. You must provide us with the following information:

Goods imported for process

tariff commodity code and description;

quantity;

customs value;

rate of yield (actual);

import entry number(s); and

date(s) of entry.

Compensating products

tariff commodity code and description;

quantity;

customs value;

cost of process (if the value of the compensating products is based on a built up value);

method of disposal (treatment we have approved or use to which the products have been assigned); and

free circulation entry numbers and dates.

432. How often do I need to submit returns ?
Your authorisation will state how often you should submit returns (usually monthly or quarterly). Whatever period applies the return must reach your supervising office within 30 days of disposal of the goods, or within 30 days of the end of your agreed throughput period. "Nil" returns are required.

433. What if I fail to submit a return ?
Duty and import VAT are payable if you fail to submit returns. It is your responsibility to ensure that returns are submitted on time. You will not be sent reminders. If you have failed to submit a return within the required time scale, you may apply to your supervising office for an extension. Approval is not automatic, however, and you will need to show that there are special circumstances which justify an extension before it is granted.

434. May I use simplified returns ?
Except for Simplified authorisations you can apply to use a simplified return which omits certain details providing they can be readily identified in your records. Your supervising office must be satisfied that your records are sufficient to support use of the simplification and may need to check your systems and records before the simplified return can be approved.

435. Can I appeal against a customs authorities decision ?
There is an independent appeals mechanism for most Excise and Customs decisions. This involves a two stage process:

(a) the first is an independent Departmental review by us; and
(b) the second if required, provides for an appeal to an independent tribunal.

The following time limits apply:

you have 45 days from the date of the written notification of the decision by us to ask for a formal Departmental review;

we then have 45 days from receipt of your letter in which to carry out the review and notify the outcome; and

if following the formal review you still wish to pursue the matter, you have 30 days to lodge your appeal with the tribunal.

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COMMON AGRICULTURAL POLICY (CAP) IMPORT PROCEDURES

436. What law covers CAP import procedures ?
The Treaty of Rome sets out the basic legal provisions governing the CAP. The detailed rules and requirements are set out in various Regulations issued by the EC Council or Commission, and published in the Official Journal of the European Communities.

437. What are the functions of Government Departments ?
The Ministry for Rural Affairs and the Environment is responsible for Malta’s agricultural policy and represents Maltese interests. They can give you advice on all licensing or other health related issues, and you are urged to contact them prior to finalising plans for importing agricultural goods.

This Ministry’s Paying Agency is the Maltese authority responsible for:

publishing information on:

goods subject to mandatory CAP import licences;

licence quotas;

issuing CAP licences and extracts from such documents;

taking any security required for CAP charges, advance payments and licences; and

applying CAP measures to the internal Maltese market.

Applications for registration or for the issue of licences and any questions arising on licensing should be addressed to the Paying Agency (MRAE).

The Department of Customs is responsible for:

accepting CAP import entries;

verifying the tariff classification of CAP goods at import;

verifying and attributing licences at import;

collecting CAP charges at importation; and

the physical control of goods, including examination and sampling.

438. What is the background to the common agricultural policy ?
Setting up a common market for agriculture posed problems for 2 reasons:

the dependency of agriculture on natural conditions such as type of soil, weather, disease, pests etc; and

social and economic factors which influence the structure of agriculture and the consumer demand for its products.

The Treaty of Rome created the European Community (EC). When it was signed the agricultural policies of the 6 signatory countries were very different. A common policy was needed to stimulate agricultural production under controlled conditions. This policy is called the Common Agricultural Policy (CAP).

439. What are the objectives of the cap ?
The five main objectives are:

increased agricultural productivity;

a fair standard of living for the farming community;

stable markets;

guaranteed security of supplies; and

an assurance of reasonable prices to consumers.

440. What goods are covered by the CAP ?

ANNEX I GOODS - The products covered by the CAP are described in Article 38 of the Treaty of Rome as "products of the soil, of stock farming and of fisheries and products of first-stage processing directly related to these products". These are called the basic products and they are specified in Annex I of the Treaty as extended by EEC Regulation 827/68. (Vide Question 458).

NON-ANNEX I GOODS - A system of trade has been established for specified goods derived from certain of these basic products. They are generally called "non-Annex I goods". (Vide Question 459).

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CAP CHARGES

441. What are cap charges ?
The CAP provides for a system of common prices within the EC with market support to secure supplies. Its purpose is to ensure that the Community is protected from world price fluctuations and that the level of prices for agricultural products within the Community provides a reasonable return for Community producers. When world market prices are lower than those of the Community, a charge called a 'duty' brings the price of imported produce from non-Community prices up to the level of Community prices. This is to prevent low-priced imports undercutting Community produce. When world prices are higher a duty is charged on export. There are several types of CAP charge, which are all set by the EC Commission in Brussels. Rates are published in the Official Journal of the EC. Details of these rates plus others that are not in the Tariff can be obtained directly (from 1 May 2004) if you are linked to our Customs Electronic System by using the relevant transaction. The Commission's website also shows the rates including preference rates and quotas. (www.europa.eu.int/comm/taxation_customs/dds/en/tarhome.htm#).

The various types of charge are explained in the following questions. The rates of charge to be used are those in force on the date of acceptance of the declaration for free circulation.

442. How is specific customs duty charged ?
Specific customs duty is charged on most agricultural goods from non-European Union (EU) countries. It is a charge based on weight, eg 100 Euros per 100kg or 150 Euros per metric tonne. Most charges are set annually, although some commodities, eg cereals and rice, are subject to more frequent change.

443. How is Ad Valorem customs duty charged ?
Ad valorem customs duty is charged on some imported agricultural goods and is based on the value of a consignment, eg value x 10%. These charges are set annually. Charges on some agricultural goods can be a combination of specific and ad valorem customs duty. Some processed products, eg cakes and biscuits are subject to a MAX. This means you have the option of paying a combination of specific and ad valorem customs duty, or a (usually) higher ad valorem customs duty plus a (usually) lower specific customs duty dependent on the sugar or flour content of the product. If you have this option you may pay whichever calculation is lower. A few products, mainly certain fruit and vegetables, are subject to a MIN. This means that an ad valorem charge applies only if the amount of duty payable is greater than a minimum amount based on the weight of the product. If the ad valorem rate is less than the minimum then the MIN stated in the Tariff applies.

444. What is a Countervailing Charge ?
Countervailing charge may apply in the following circumstances:

on certain fresh fruits and vegetables from particular countries at certain times of the year; and

on certain goods, eg dried grapes, when the import price fails to meet a predetermined minimum import price set by the EC Commission.

The charge on fresh fruits and vegetables can be imposed at very short notice. In both cases, the purpose of the charge is to protect EU produced goods. Goods to which countervailing charge may apply are indicated in the TARIC.

445. What are preferential rates of CAP charge ?
EU Agreements with non-EU countries provide for special preferential rates of CAP charges to be applied to certain goods originating in those countries or country groups. These charges are indicated in the TARIC and on the Customs Electronic System. These preferential charges may be subject to the presentation at import of certain documentation, eg origin documents and import licences.

446. What are safeguard charges ?
In addition to specific and ad valorem customs duties the EU may introduce a charge on imported CAP goods under the safeguard measures where cheap or excessive imports threaten EU production of a similar commodity. This additional charge may be imposed at short notice and is based on the value of an individual consignment. It can take the form of an ad valorem or specific charge, or a combination of the two. If you are unable to supply a proven value for your consignment a standard value may be set by the EC Commission and used instead. The value (actual or standard) is compared to a trigger price also set by the EC Commission. If this trigger price is exceeded no additional charge will be raised. However, if the value falls below the trigger price an additional charge must be paid. The amount of additional charge depends on how far below the trigger price the value of the consignment falls, ie the lower the value the higher the additional charge. If you supply the value of the consignment you are required to lodge a security equal to the additional charge, based on the trigger price at the time of importation and provide the following documentation:

the contract of purchase (or equivalent);

the bill of lading (where appropriate);

the transport contract;

the insurance contract;

the certificate of origin (where appropriate); and

the invoice.

Within the regulatory deadlines governing each particular commodity you must present to Customs Station through which the goods were entered proof that the consignment was sold on at a value exceeding the invoice value. Customs will then release your security. Certain selling on deadlines may be extended at the request of the importer by a maximum of three months in exceptional circumstances as long as they are substantiated to the satisfaction of the respective Customs Station.

447. Can CAP goods be placed in a Customs Warehouse ?
Goods subject to CAP import charges can be put into the customs warehousing regime without payment of those charges. The CAP charges do not have to be paid until the goods are removed from warehouse to free circulation, when a valid CAP licence (if required) must also be presented.

448. Can CAP goods be sent in small consignments to private individuals ?
Small consignments of CAP goods sent to a private individual may be eligible for a flat charge of 3.5% ad valorem duty if such imports are:

only occasional;

for the personal or family use of the person receiving the goods;

of a non-commercial nature; and

have a total value of less than Lm180 (based on rates at time of publication).

The flat rate includes all CAP charges but not any VAT or excise duty which may apply: these are payable at import in addition to the flat rate charge. If you wish to enter the goods at the appropriate individual rate of CAP charge, you must state this on the free circulation declaration
and complete the form accordingly.

The following goods are not eligible for the flat rate charge:

advertising material;

business gifts;

articles purchased abroad by a Maltese resident.

449. Are there any reliefs from CAP charges ?

Goods imported under inward processing relief arrangements – Inward Processing Relief

Goods eligible for a reduced or nil rate of duty under quota arrangements

Goods eligible for a favourable rate of charge by reason of their end-use

Re-imported goods

Goods re-imported after processing - Outward Processing Relief

Temporarily imported goods – Temporary Importations

Certain goods are eligible for duty reductions under special import arrangements.

450. What procedure must be followed when customs duties are expressed in Euros ?
Where specific customs duties are expressed in Euros they must be converted into Maltese liri using the Monthly Industrial conversion rate. The Customs Electronic System will do this automatically.

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CAP IMPORT LICENSING

451. What is the purpose of CAP import licensing ?
The system of CAP licensing provides much of the information needed for the management of the EU's agricultural market sectors. Many agricultural commodities cannot be imported into the EU without a valid licence. Licences may also be used to restrict imports by imposing quantitative limits, or allow a reduced rate of duty. They are usually issued by the MRAE on request against a security, which is forfeited if the quantity of goods for which the licence was issued is not imported. Licences issued in other Member States are valid in Malta.

452. When is a CAP import licence needed ?
Goods which may need a CAP import licence are identified in the TARIC by the symbol "CAP Lic". You must have a valid licence when the goods are entered to free circulation and you should enter details on the import declaration.

453. When is a cap import licence not needed ?
You do not need a CAP import licence for:

goods which are in free circulation in the EU;

goods imported from non-EU countries which are not entered for free circulation (eg inward processing relief goods);

most imports if the licence security needed would not exceed 5 Euros or if the market sector Regulation specifies a minimum quantity (contact MRAE for details);

EU returned goods;

imports for which a formal declaration on a SAD is not required (eg private belongings);

454. What are the requirements for commercial imports in personal baggage ?
These must be declared to Customs and are subject to the normal licensing requirements.

455. How can I get a licence ?
In Malta, you should apply to the MRAE.
Note. You must still comply with import licensing or any other requirements for prohibited or restricted goods, even though you hold CAP licences.

456. How do I complete licences ?
It is in your own interest to make entries on the licence carefully. If you use more than one licence, ensure that you exhaust the earlier one(s) first, because the security is forfeit on expired, unused or partly used licences. (For more details please consult MRAE.) Customs will endorse attributions on licences and return these documents to importers/agents as soon as all import procedures have been completed.

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IMPORT PROCEDURES

457. How are import declarations made ?
Import declarations into Malta from non-EU countries may be declared either electronically or on the Single Administrative Document (SAD). Not all agricultural goods will be liable to the charges. The commodity code determines the one(s) that may be applicable. The rates to be charged are those in force at the time we accept the declaration for free circulation. If a CAP import licence is required, the SAD must include in the additional information box 44:

the CAP licence identifier;

the expiry date of the licence;

the country prefix;

the number shown in box 25 of the licence; and

the date of issue of the licence.

(More information can be obtained from MRAE who is the Ministry responsible for licences which cover CAP products).

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GOODS COVERED BY CAP

458. Which are the basic products ?

Live animals

Meat and edible meat offals

Fish, crustaceans and molluscs

Dairy produce; birds' eggs; natural honey; edible products of animal origin, not elsewhere specified or included

Guts, bladders and stomachs of animals (other than fish), whole and pieces thereof

Animal products not elsewhere specified or included; dead animals of Chapter 1 or Chapter 3, unfit for human consumption

Live trees and other plants; bulbs, roots and the like; cut flowers and ornamental foliage

Edible vegetables and certain roots and tubers

Edible fruit and nuts; peel of melons or citrus fruit

Coffee, tea and spices, excluding maté

Cereals

Products of the milling industry; malt and starches; gluten; inulin

Oil seeds and oleaginous fruit; miscellaneous grains, seeds and fruit; industrial and medical plants; straw and fodder

Pectin

Lard, other pig fat and poultry fat, rendered and solvent-extracted

Fats of bovine cattle, sheep or goats, unrendered; rendered or solvent-extracted fats (including "premier jus") obtained from those unrendered fats

Lard stearin, oleostearin and tallow stearin; lard oil, oleo-oil and tallow oil, not emulsified or mixed or prepared in any way

Fats and oils, of fish and marine mammals, whether or not refined

Fixed vegetable oils, fluid or solid, crude, refined or purified

Animal or vegetable oils and fats, wholly or partly hydrogenated, or solidified or hardened by any other process, whether or not refined, but not further prepared

Margarine, imitation lard and other prepared edible fats

Degras, residues resulting from the treatment of fatty substances or animal or vegetable waxes

Preparations of meat, of fish, of crustaceans or molluscs

Beet sugar and cane sugar, in solid form

Other sugars in solid form; sugar syrups, not containing added flavouring or colouring matter; artificial honey, whether or not mixed with natural honey; caramel

Molasses

Cocoa beans, whole or broken, raw or roasted

Cocoa shells, husks, skins and waste

Preparations of vegetables, fruit or other parts of plants

Flavoured or coloured sugar syrups

Grape must, in fermentation or with fermentation arrested otherwise than by the addition of alcohol

Wine of fresh grapes; grape must with fermentation arrested by the addition of alcohol

Other fermented beverages (for example, cider, perry and mead)

Ethyl alcohol or neutral spirits, whether or not denatured, of any strength, obtained from agricultural products listed in Annex I to the Treaty, excluding liqueurs and other spirituous beverages and compound alcoholic preparations (known as "concentrated extracts") for the manufacture of beverages

Vinegar and substitutes for vinegar

Residues and waste from the food industries; prepared animal fodder

Unmanufactured tobacco, tobacco refuse

Natural cork, unworked, crushed, granulated or ground; waste cork

Flax, raw or processed but not spun; flax tow and waste (including pulled or garnetted rags)

True hemp (Cannabis Sativa) raw or processed but not spun; tow and waste of true hemp (including pulled or garnetted rags or ropes)

459. Which are the Non-Annex 1 goods ?

Carrageenan Glycerol and glycerol lyes (other than crude glycerol and glycerol lyes), including synthetic glycerol

Sugar confectionery, not containing cocoa (other than liquorice extract containing more than 10% by weight of sucrose but not containing other added substance)

Chocolate and other food preparations containing cocoa

Malt extract; preparations of flour, meal, starch or malt extract, of a kind used as infant food or for dietetic or culinary purposes containing less than 50% by weight of cocoa

Macaroni, spaghetti and similar products

Tapioca and sago; tapioca and sago substitutes obtained from potato or other starches

Prepared foods, obtained by the swelling or roasting of cereals or cereal products (puffed rice, corn flakes and similar products)

Bread, ships' biscuits and other ordinary bakers' wares, not containing added sugar, honey, eggs, fats, cheese or fruit; communion wafers; cachets of a kind suitable for pharmaceutical use; sealing wafers; rice paper and similar products

Pastry, biscuits, cakes and other fine bakers' wares, whether or not containing cocoa in any proportion

Extracts, essences or concentrates, of coffee, tea or maté and preparations with a basis of those extracts, essences or concentrates; roasted chicory and other roasted coffee substitutes and extracts, essences and concentrates thereof (other than roasted chicory and extracts, essences or concentrates of roasted chicory)

Sauces; mixed condiments and mixed seasonings

Soups and broths (other than "bouillions") in liquid, solid or powder form

Bakers' yeast

Inactive natural yeasts

Food preparations not elsewhere specified or included (other than flavoured or coloured sugar syrups)

Lemonade, flavoured spa waters and flavoured aerated waters, and other non-alcoholic beverages, not including fruit and vegetable juices

Beer made from malt

Vermouths and other wines of fresh grapes flavoured with aromatic extracts

Spirituous beverages (other than rum, arrack, and tafia; bourbon whiskey and the whiskies referred to in Regulation (EEC) No 1187/81; and plum, pear or cherry spirit (excluding liqueurs))

Organic chemicals

Pharmaceutical products

Organic surface-active agents; surface-active preparations and washing preparations, whether or not containing soap

Albuminoidal substances; glues; enzymes

Miscellaneous chemical products

Artificial resins and plastic materials, cellulose esters and ethers, and articles thereof

Other paper and paper board, cut to size and shape

460. Some terms and abbreviations used in cap

Additional Duty on Sugar (ADS): Variable rate fixed along with the Agricultural Component Charge. The rate only comes into operation in cases in which there is a maximum amount for duty and AC purposes shown in the Tariff.

Additional Duty on Flour (ADF): A variable charge along the same lines as ADS.

Agricultural Component (AC): The charge applicable to goods processed from certain basic agricultural products (non-Annex I goods).

Attribution: The "writing-off" on the reverse of licences and extracts of licences of the quantities imported or exported or transferred to an extract.

Basic products: Product of the soil, of stock-farming and of fisheries, shown in Annex I to the Treaty of Rome. The term also covers goods which are the result of first stage processing of certain basic products.

Common Agricultural Policy (CAP): The common agricultural policy of the European Agricultural Community.

Countervailing charge: A charge which may be imposed by the Commission either on certain goods from specified non-Community countries during some months of the year or as part of a minimum import price system.

Intervention stocks: Agricultural products which have been bought off the market as part of the Community market support arrangements.

Licence: A document issued by the competent authority, authorizing and requiring the import or export of the goods specified and/or imposing other special requirements as necessary.

Non-Annex I goods: Products which result from the processing of basic products and which, although they are not included in the products listed in Annex I to the Treaty of Rome, are eligible for refund or duty in respect of the basic products used in their manufacture.

Non-Community countries (third countries): Countries outside the customs territory of the EC. Certain areas within the national territory of member states are deemed to be outside the customs territory of the Community and are therefore non-member countries: these are the German territory of Busingen (bordering Switzerland) and the Islands of Heligoland, the Italian communes of Livigno and Campione (bordering Switzerland), the Danish territory of the Faroe Islands and Greenland, the French overseas territories, the Spanish Canary Islands and the North African enclaves of Ceuta and Melilla, and Andorra.

Period of validity: The period within which the quantity of goods specified by a licence must be imported or exported.

Pre-financing: System permitting payment of export refund when goods for export are placed in Customs control in warehouse, or when basic products from which goods for export are to be produced are placed in Customs control at the manufacturing premises.

Paying Agency: The national organisation within the Ministry for Rural Development and the Environment responsible for issuing licences, collecting CAP export charges, and paying CAP export refunds.

Sectors: Annex I goods and non-Annex I goods split into groups by commodities eg cereals; beef and veal; milk and milk products.

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CAP EXPORTS

461. What law deals with CAP export ?

Regulations 800/99 and 1291/00 contain the main CAP provisions; and

Regulations 2913/92 and 2454/93 the rules on customs procedures.

462. Who can sign Customs export documents ?
These documents must be signed by:

an officer of the company that is exporting the goods;

a duly authorized employee of that company; or

an agent duly authorized by that company.

A digital signature may be used on electronic documents.

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EXPORT PROCEDURES: GENERAL

463. Can you explain to me the export procedures ?
CAP goods may be exported from Malta to special destinations within the European Community (those territories that are part of the customs territory of the Community but not part of the fiscal territory); to non-Community countries, sometimes called "third countries". The procedures explained in the following questions also apply to goods shipped as stores and to certain deliveries which are treated as equivalent to export for CAP purposes.

464. What are export prohibitions ?
Your goods must be declared under one of the CAP export procedures where either:

· a levy or other CAP charge applies; or

· a CAP export licence is required.

If a proper declaration is not made, the export will not be allowed. You must also provide a security for any CAP charges you are liable to pay, even if the goods attract refunds which exceed the charges. If you do not give this security, the export of your goods will be prohibited.

465. What conditions apply to exports from the community ?
Export of CAP goods from the Community may be subject to:

(a) an export levy or an export refund;
(b) a mandatory CAP export licence; and
(c) other CAP payments or charges.

In the following circumstances, CAP goods may be treated as having been exported from the Community:

deliveries within the Community to certain armed forces and international organisations;

deliveries of victualling stores to ships and aircraft and

deliveries of supplies to victualling warehouses.

With some special exceptions (special destinations) the EC is treated as one territory for the purpose of CAP charges.

466. What are Export Levies ?
Goods which are subject to an export levy or charge must be declared under one of the CAP export procedures, and security for the levy must be provided. Export levies apply to:

consignments from the Community;

deliveries regarded as equivalent to such exports;

But not to:

goods not of Community origin and not in free circulation;

goods for which an export refund has been fixed in advance;

goods already taken into Customs control under the pre-financing arrangements;

reasonable quantities of goods shipped as stores on board sea-going vessels entitled to dutyfree stores or aircraft serving on international routes; or

goods destined for the armed forces of a member state which are stationed outside the geographical territory of the Community; and

non-commercial consignments and personal luggage.

If goods liable to an export levy (on export from the Community) are consigned to a member State within the Community, a T5 will need to travel with the goods, to confirm arrival in the other Member State.

467. What are Export Refunds ?
You may be entitled to an export refund for CAP goods exported to non-Community countries and also for goods which are:

shipped as stores on sea-going vessels entitled to duty-free stores or on aircraft serving on international routes (including intra-Community routes);

supplied to drilling or extraction platforms (or work points providing support services for such platforms) situated within the EC designated area of the European continental shelf, or within the non-EC area of the European continental shelf, so long as the destination is beyond a 3-mile zone starting from the base line used to determine the width of a member State's territorial sea;

delivered to a pre-finance warehouse;

delivered to a victualling warehouse;

sent to armed forces stationed in the territory of a Member State but not coming under its flag; or

delivered to international organisations established in the Community.

468. What are the rules for obtaining export refund ?
To qualify for export refund, goods must either:

(a) leave the territory of the Community within 60 days of the date of acceptance into Customs control; or
(b) be delivered to one of the destinations in Question 467.

During the 60-day period, goods accepted into Customs control in a fresh or chilled state may be frozen before export, but they must not be altered in any other way; bulk goods may be repackaged under certain conditions, provided prior authority is obtained from Customs. The Paying Agency (MRAE) must normally receive evidence that the goods have left the geographical territory of the Community before export refund can be paid. Certain destinations may attract higher rates of export refund. If you are exporting to one of these countries, you will have to prove that goods have arrived at the country of destination before the Paying Agency will pay you the appropriate export refund. Details of export refund rates may be obtained from the Paying Agency (MRAE).

469. Must I provide security for export charges ?
You must provide security for any CAP charge liable on exports even if you expect to qualify for a refund exceeding the charge. Where security is required, you should arrange in advance to provide a guarantee to the Paying Agency. Customs cannot accept the declaration without the security. Export will be prohibited if security is not given.

470. When is the date of acceptance of an export declaration ?
The date of acceptance by Customs of your export declaration fixes the rates of CAP refunds or charges unless these are set in advance by an Advance Fixing Certificate (AFC). The validity of licence attributions (quantity of goods you have exported under that licence and the remaining quantity which will be covered by the licence) is also determined by the date of acceptance. The date of acceptance of the entry will normally determine the refund rate. Your declaration will be accepted when:

it is properly completed;

you hold a valid export licence or AFC, if one is required; and

the goods concerned are available for examination.

Failure to make the goods available for examination could render the goods ineligible for refund but still liable to levy.

471. What are the time limits for export ?

Once Customs accept an export declaration, then the export must be made from the Community within 60 days.

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CAP EXPORT LICENCES

472. When do I need an Export Licence ?
For certain consignments, you must have a valid export licence. If you do not have a licence or the licence is invalid, the export will be prohibited. The Paying Agency are responsible for issuing licences and they give guidance on:

the products for which licences are required;

making applications for licences; and

how to use them.

Please also note that for consignments requiring an export licence traders must lodge a security. Where separate consignments of goods are to be exported through different ports simultaneously and the original licence cannot be presented for each export, extracts may be obtained from the Paying Agency. This will not be necessary when electronic licences are issued instead of paper ones. Transfer of licences from one person to another must be authorized by the Paying Agency.

473. Which goods are exempted from licensing provisions ?
A licence is not required under certain circumstances such as the following, but check with Paying Agency for updated requirements:

products delivered for shipment as stores or to victualling warehouses; or

supplies to drilling or extraction platforms;

supplies to naval vessels on the high seas, flying the flag of a Member State;

goods sent to armed forces stationed in the territory of a Member State but not coming under its flag;

goods delivered to international organisations established in the Community; or

exports of a low value or a non-commercial nature - details of these categories can be obtained from the Paying Agency.

474. What are Advance Fixing Certificates (AFCs) ?
Under the licensing system, you can ask for the rates of standard levy or export refund to be set in advance. You do this by applying for a special licence called an advance fixing certificate (AFC) which shows the rates that have been set. The rate at which the amount of refund or levy is converted into national currency (the agricultural conversion rate) can also (subject to various provisions) be fixed in advance. AFCs can be used instead of mandatory licences. AFCs can also be obtained and used for exports of other goods for which licences are not normally required. Details about the products for which advance fixing is allowed may be obtained from the Paying Agency.

475. How do I complete Licences and AFCs ?
Entries are made on the reverse of paper licences and AFCs to record the quantity of goods you have exported under that licence and the remaining quantity which will be covered by the licence. These entries are called attributions. The date of an attribution is determined by the date of acceptance into Customs export control. When a licence or AFC is issued, the first Box 1 in Column 29 on the reverse is completed by the Paying Agency to show the gross quantity which may be exported (the quantity shown on the face of the document plus a tolerance, normally 5%). You must show in figures in the next empty sub-division 2 of Box 29 and in words in Box 30 the quantity to be attributed. Any quantity remaining must be shown in the next empty subdivision 1. Attributions must be made indelibly either in manuscript or by typewriter. Care must be taken to ensure that the figures are legible. If an error is made in attribution, the entry must be deleted by crossing out, you must not use correction fluid, and the correct figures entered on the next line. If there is insufficient space on the back of a paper licence or AFC an extension sheet, available from the Paying Agency must be used. The extension sheet must be glued to the parent document at the point indicated, must not obscure earlier entries and must bear the impression of the official Customs or the Paying Agency stamp across the join. This does not apply in the case of electronic licensing facilities.

Licences must not be altered or defaced. Licences and AFCs will be checked by our officer against other export documents. If there are any discrepancies, the consignment may not be accepted into control. If satisfied, our officer will certify the attribution and return the licence or certificate to you. We have the right to retain licences and certificates if their authenticity appears doubtful.

476. Why are Licences and AFCs so important ?
The loss of a licence or certificate, or failure to comply with the requirements, may delay shipment of the goods and result in financial loss. Financial loss can occur either because entitlement to a favourable AFC cannot be established or because the security covering the licence is forfeit. Paper licences are now generally to be retained by the exporter, but must always be held available for our officers to examine and stamp when post-export checks are carried out.

477. Are licences issued in other member states acceptable ?
Licences and AFCs issued in other member States are acceptable for exports from Malta. If you use a licence or AFC issued in another member State, you must present a control copy T5 with your other documents. The security held by the authority that issued the licence will only be released on presentation of the control copy T5 certified in the "Control of use and/or destination" box by Customs at the port of final export from the Community. An AFC which includes an advance fixed agricultural conversion rate is valid only in a Member State nominated by the applicant, either:

for the period of validity of the certificate; or

the month in which the application for the certificate was made plus the next three calendar months, whichever is the shorter. The certificate can be used in any Member State after this period.

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EXPORT PROCEDURE

478. Can you give me some more information on export declarations and refund claims ?
A Customs entry is required. This must reach us in time for the goods to be examined before shipment. Any claim to export refund is made as part of this declaration under the export procedures (the Paying Agency Claim Reference and Type, and the Paying Agency Registration and Guarantee Numbers, are all required). Also required are any registered Recipe Code, as well as any relevant Paying Agency Licence details, the Customs Procedure Code (CPC) to be used for all CAP refund declarations should be entered in Box 37. The same details will be required where any export charges may be payable on your goods, and these charges must be paid or security provided at the time of export. In that case, payment arrangements will be made outside the export procedure.

479. What documents will be required ?
An electronic declaration or licence is still referred to as a "document". The details of any paper licence you hold must be given on the electronic export declaration, and it must be held available for inspection.

Other documents and information:

(a) For goods exported via another member State a copy 3 of the SAD must travel with the goods and be presented to Customs at the office of exit (the last Customs office before the goods finally leave the Community)

(b) Community Transit documentation for transit across EFTA and VISEGRAD countries.

(c) Control Copy T5. This will be needed according to requirements at the time of exportation, in particular when you are claiming export refund on goods which will cross another member State before export to a non-Community country; or which are going to a special destination within the Community.

(d) A CAP export licence.

(e) Certificates issued by the Paying Agency and certified by MRAE for certain exports of beef.

(f) A national transit document (SAD copies 1, 4 and 5), if the goods are being exported direct from Malta but are being first presented to us at a place inland.

Further advice must be obtained from the Paying Agency.

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ADDITIONAL REQUIREMENTS

480. What are the community transit procedures ?
Exports of goods with Community status through other member States, or movements of such goods to destinations within the
Community, for the most part, no longer need any Community
Transit documentation. However, if the goods are:

moving to or through an EFTA or VISEGRAD country;

moving to or transiting one of the "special territories" of the Community (those territories that are part of the Customs territory of the Community but not part of the fiscal territory); or

are not in free circulation,

they must move under one of the following procedures:

the Community Transit procedure; or

the TIR procedure.

481. Is proof of export needed ?
Yes. Before paying export refund, the Paying Agency need proof that the goods have:

left the Community; or

reached one of the specified destinations

This proof will normally be a control copy T5 which Customs certify at the destination or frontier of exit from the Community. A control copy T5 is not required for goods which are transhipped in a Member State port, provided certain conditions are met (details can be obtained from the Paying Agency).

482. Do CAP goods under community transit have to be sealed ?
Yes. We must seal all exports of CAP goods under Community control. This applies to both full and part loads. Sealing can be dispensed with when bulk loads such as grain are involved, provided they can be check weighed prior to export from the Community.

483. When are supplementary declarations required ?
For some goods you must make a supplementary declaration, for example that they conform to particular quality standards or contain particular products. Kindly consult with the Paying Agency for more details. Failure to comply with these requirements could prejudice your claim for CAP payments and lead to other action.

484. How do I claim refund on imported basic products exported in the same State ?
If you import goods which you export from the Community in an unaltered state, support the refund claim with a declaration of the rate of levy paid at import. Give this declaration either as:

(a) a copy of the import entry you endorse with a declaration identifying the products for export; or
(b) written notice using your business headed paper, stating:

the place of import;

the import entry number and date (or if it applies, the name of the warehouse and the number and date of the removal entry); and

the quantity of products imported and the rate of levy paid.

If the products to be exported were imported originally from a non-Community country into free circulation in another member State and then consigned from that Member State into Malta, give details of both transactions. If certain imported goods are later exported in an unaltered state, no export refund can be paid. More information can be obtained from the Paying Agency.

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REFUNDS PAID IN ADVANCE:: BEFORE SHIPMENT

485. May I demand payment of export refund before shipment ?
You can ask to be paid the export refund as soon as your export declaration is made and:

before shipment has occurred;

after shipment from Malta but before exit from the Community; or

before proof of arrival is received for premium rated goods,

as long as you supply the guarantee required.

You should enter: "ADVANCE PAYMENT OF REFUND UNDER ARTICLES 24 and 25 OF REGULATION (EEC) 800/99" in Box 44

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REFUNDS PAID IN ADVANCE:: BEFORE COMPLETION OF EXPORT FORMALITIES

486. What are pre-financing arrangements ?
Pre-financing allows export refunds to be paid:

(a) when goods intended for export to non-Community countries are placed in a Customs warehouse specifically approved for storing such goods; or
(b) when basic products are taken into Customs control for processing into products for export to non-Community countries.

Not all goods are eligible for pre-finance. You should firstly check with the Paying Agency whether your goods qualify or not. For goods deposited into warehouse, the export refund payable is the amount due for the goods placed into control on the day they enter the warehouse. When basic products are placed into control for processing, the export refund payable varies according to the type of product involved. The Paying Agency will either pay the refund on the processed product, or on the basic product before processing. In all cases, in assessing the amount of the export refund, account is taken of the intended destination of the goods. The Paying Agency require a financial guarantee to cover the amount of export refund advanced increased by 15%. The guarantee will be forfeit, in whole or in part, if the due quantity of products is not exported within the time allowed.

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REFUNDS PAID IN ADVANCE:: PRE--FINANCE WAREHOUSES

NOTE: not all Customs warehouses are approved for pre-financing. Customs will advise you if a warehouse is approved.

487. How do I deposit goods into Pre-Finance Warehouses ?
To deposit goods in the warehouse, use a pre- export declaration, but entering the Paying Agency Claim and using the correct CPC. Each form must show goods of only one product sector. Customs will accept the goods into control when they are in the warehouse and the pre-export declaration has been made, and any paper export licence or AFC is available. As the date of acceptance is important, be sure that the declaration reaches us on the date you wish. Once we accept your declaration, ensure you lodge securities with the Paying Agency within the period allowed.

488. What operations are allowed in Pre-Finance Warehouses ?
The only operations in warehouses which are allowed on pre-financed goods are:

(a) stock-taking;
(b) the affixing to the products themselves or to their packings of marks, seals, labels or other similar distinguishing signs, provided there is no risk of giving the products an apparent origin different from their real one;
(c) altering the marks and numbers on the packages, provided there is no risk of giving the products an apparent origin different from their real one;
(d) packing, unpacking, change of packing or repair of packing;
(e) airing;
(f) chilling; and
(g) freezing.

Restrictions might apply for certain qualities of beef as any operations must take place under Customs and MRAE supervision.

489. What are the warehousing time limits ?
Goods may usually stay in the warehouse for 6 months, but other periods apply for some goods. Ask the Paying Agency about this, because you may have to pay penalties if you do not remove your goods from the warehouse within the time limit. If you have approval, you may remove goods for delivery to other pre-finance warehouses during the allowed storage period. If excise duty applies to the goods, our warehouse officer will tell you what documents to use. The removal documents must show the number of the original declaration, the date of expiry of the allowed warehousing period and the number of any CAP licence, and your Paying Agency Registered number.

490. How are goods removed for export ?
Goods removed from warehousing control must be placed under Customs export control at the pre-finance warehouse premises. An export declaration must be made, which details the location of the goods, as well as the intended port of export from Malta. Details of the declaration which entered the goods to the Pre-finance Warehouse, and the licence must be entered in Box 44, where the EC Regulation number must also be entered. Goods removed from warehousing control must leave the geographical territory of the Community within 60 days.

491. How do I apply for approval for process pre-financing ?
Only processors authorized by Customs may claim pre-financed export refunds for products used in manufacture. Apply in writing to our CAP Unit stating:
(a) the basic products on which export refund is claimed (including the trade description and the Paying Agency product code);
(b) the goods for export which are to be processed from the basic products for which export refund is claimed;
(c) the date when processing is intended to start;
(d) the quantity of each basic product likely to be put into control annually and the frequency of operations; and
(e) that the processor undertakes to meet the conditions.

If Customs approve the application, the Customs CAP Unit will issue a letter of authorization.

492. What records are to be maintained by authorized processors ?
You must keep a stock account showing:

(a) the serial number and date of acceptance by Customs of the payment declaration;
(b) the quantity, nature, value, Combined Nomenclature code and Paying Agency export refund code of the basic products placed into control;
(c) the expected quantity of processed products to be exported and the basis of yields;
(d) the time limit by which the processed goods must be placed into export control;
(e) the actual quantities of processed products manufactured, their Combined Nomenclature code, Paying Agency export refund code and recipe code if applicable;
(f) the reference number and the date of acceptance by Customs of the export declaration; and
(g) the date of export.

Each consignment of basic products placed into control is to be identified throughout by reference to the serial number of the declaration which placed the goods into pre-finance control.

493. How are goods placed into control ?
Everyone must make a declaration under the export procedure to place goods into control. You must:

enter: "PRE-FINANCING SYSTEM REGULATION 800/99" in Box 44. Include in each declaration, goods of only one product sector

declare the quantities and description of the basic products in terms of the Paying Agency refund code.

You must also declare the nature and quantity of the manufactured goods which you will produce and export. If the yield is uncertain, insert the words "provisional yield" in Box 44 of the declaration.

494. How is the export procedure carried out ?
When you remove the goods from process control, you must enter them directly into export control, and export them from the geographical territory of the Community within 60 days. Declare your exports under the export procedure, using the correct CPC (Customs Procedure Code) to identify the goods as coming from a Pre finance regime. Always remember to cross reference your export declaration to the pre-export declaration in Box 44.

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VICTUALLING: SHIPS AND AIRCRAFT

495. What procedure must be followed for Shipment of Stores (CAP goods) in Malta ?
CAP goods supplied as victualling stores in Malta to:

sea-going vessels; or

aircraft serving on international, including intra-Community routes,

for consumption on board are treated as exports from the Community for export refund purposes, as long as the vessel or aircraft is eligible to ship duty-free stores. For these supplies export levies apply only if the quantity of stores shipped exceeds that:

reasonably required for consumption on board; and

export licences are not required and must not be presented but AFCs may be used.

496. What procedure must be followed for export of goods for use as stores in other member states ?
For stores exported to other member States for:

delivery to ships or aircraft; or

deposit in a victualling warehouse,

the same procedures apply as for deliveries in Malta except:

a customs export declaration is required; and

a T5 is required with Box 104 completed with either "Deposit in warehouse; compulsory supply for victualling. Article 40 of Regulation (EEC) 800/99" or "Supply for victualling Regulation (EEC) 800/99" if the supply is direct to a ship or aircraft.

497. What procedure must be followed for export of goods for use as stores in third countries ?
For stores exported for:

delivery to ships or aircraft located in a non-EC country; or

deposit in a victualling warehouse,

the same rules apply as for deliveries to other member States except that:

T5s are required only where the export is via another member State; and

proof of disposal as stores is required.

498. Which ships and aircraft are entitled to duty-free stores ?
Only ships and aircraft which the operator has declared to be departing on a voyage or flight to a country outside Malta are entitled to ship duty-free stores. Customs also allow duty-free stores to be shipped on vessels which are going to certain destinations in open water. You must find out whether the ship or aircraft you supply is allowed to ship duty-free stores.

499. Are supplies to ships' shops permitted ?
Supplies to ships' shops on vessels sailing to:

· to non-Community countries either directly or via a port in another member State are treated in the same way as ships' stores; but

· on intra-Community routes are not treated as ships' stores. They are treated as normal intra-Community consignments and are not eligible for export refund. If you make supplies of this type, your commercial documentation must be endorsed with the statement that: "The goods are for stock in ships' shops and are not for landing abroad except as personal effects after bona fide retail sale on board ship".

500. What provisions apply to tray-type aircraft meals ?
Meals for consumption on aircraft serving on international (including intra-Community) routes are treated for export refund purposes as having been prepared on board the aircraft. Export refund is payable on the basic products used in preparing the meals. Payment of export refund will depend on your being able to produce proof of the quantity, nature and characteristics of the basic products used, demonstrate that you have used the products in the preparation of the meal and being able to support your claim by an audit trail from receipt of the product to delivery on board the aircraft. The date of acceptance of the export declaration for meals placed on board the entitled aircraft will normally determine the rate of export refund payable. Tray-type aircraft meals may also be prepared in, and supplied from a victualling warehouse. The date for determining the rate of export refund in that case will be the date the basic products are taken into Customs control in the warehouse.

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VICTUALLING WAREHOUSES

501. What are victualling warehouse arrangements ?
Goods eligible for export refund qualify for payment when they are placed under Customs control in premises specifically approved under Article 38 of Regulation (EEC) 3665/87 to store goods intended for:

(a) the victualling within the Community of sea-going vessels or aircraft serving on international (including intra-Community) routes;
(b) delivery to drilling or extraction rigs, or
(c) the victualling of vessels or aircraft outside the EEC (direct victualling only).

These premises are known as "victualling warehouses" but not all premises we approve as Customs warehouses enjoy approval as victualling warehouses. Before depositing goods, claimants must check whether the warehouse is so approved. If you seek approval of your own premises as a victualling warehouse, ask the Customs CAP Unit. Payment of export refund on goods placed in a victualling warehouse needs no financial guarantee and there is no limit to the time the goods may stay in the warehouse. The warehousekeeper will, however, be penalised if the goods are not disposed of in a manner Customs approve. Normally, only goods entitled to export refunds can enter the victualling warehouse procedure but, if they can be kept separate, you can store other goods in the warehouse. Some goods bought from intervention stocks for export may be stored under the victualling warehouse procedure even if they are not eligible to export refund.

502. What are the provisions which apply for the deposit of goods into victualling warehouses ?
Goods deposited into a Victualling Warehouse must be declared using the supplementary export declaration with the appropriate CPC and Claim Type. Where refund has already been claimed in another member State, this will be shown on the customs entry documents and the control copy T5 with the goods. Such goods must not have further refund claim made on them in Malta.

503. What operations are allowed in victualling warehouses ?
For warehouses supplying tray-type aircraft meals, there is no limit to the operations allowed. Otherwise, only the operations mentioned in Question 488 are allowed. Losses due to natural wastage during a permitted operation will not be penalised.

504. What removals from victualling warehouses are permitted ?
These removals must be for one of the following purposes and be made under the control for documents explained in Customs warehousing:

(a) for loading in Malta as victualling stores for consumption on a ship or aircraft entitled to duty-free stores;
(b) for loading within another member State as victualling stores for consumption on a ship or aircraft entitled to duty-free stores;
(c) for shipment to drilling or extraction platforms, or workpoints providing support services for such platforms, situated within the EC designated area of the European Continental shelf, or within the non-EC area of the European Continental Shelf so long as the destination is more than 3 miles from the base line used by any member State to define the width of its territorial waters;
(d) for delivery to another victualling warehouse within the Community;
(e) for delivery to a ship or aircraft as stores at a place outside the Community but not to a victualling warehouse outside the Community.

If it is found that product has not reached, or is no longer in a condition to be sent to one of the above destinations, a penalty is payable by the warehousekeeper at the warehouse of last deposit. The penalty is worked out by reference to the import charges applicable to identical products on the date of diversion or the date from which the product was no longer in a condition to be delivered, increased by 20%. However, if the warehousekeeper can demonstrate that the net refund advanced on the goods was less than the amount of import charges, the penalty will be based on the amount advanced plus 20% (or 40% if the amount was advanced in another member State). Whether or not you, as warehousekeeper, received the refund, you are liable to these penalties.

505. When is a Customs export declaration required ?
Customs export declaration are required for exports to:

an entitled vessel or aircraft in another member State;

oil rigs situated outside the Maltese designated area of the European Continental Shelf;

a victualling warehouse in another member State; and

a vessel or aircraft outside the Community.

For export to member States, a control copy T5 is required with Box 104 completed with either:

"Deposit in warehouse, compulsory supply for victualling Article 40 of Regulation (EEC) No 800/99" or

"Supply for victualling - Regulation (EEC) No 800/99" if the supply is direct to a vessel in another member State.

For supplies as stores outside the Community, we need proof of disposal as stores. Note that