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Can My Imported Goods Preserve Their Preferential Status When Stored in a Customs Warehouse? If so, What Do I Need to Do?

Updated: Jul 18

Using a customs warehouse opens many benefits for exporters and importers including delaying or waiving the payment of duties and taxes. Another key advantage is the preservation of the goods’ preferential origin status.  


When goods are imported into the UK as a Standard Import, and released into free circulation, they lose any preferential status they previously held. Consequently, when re-exporting these goods, even to a country with an agreement for goods of that origin, they are treated as “3rd country” goods, subject to the full rate of duty and tax. One way to avoid that, is to import and store these in a customs warehouse until the re-export to the destination. 


For example, if you import products of Turkish preferential origin into your Customs Warehouse in the UK and re-export them to the EU – how would you claim the reduced rate of duty from the Turkey-EU trade agreement?  


1. Do your goods qualify as preferential origin? 

First, you need to ensure that the goods qualify as preferential Turkish origin under the agreement with the EU. Please note that there may be slight differences in the Rules of Origin for the UK and the EU. Second, when shipping your goods to the EU, you must provide the appropriate supporting evidence, which may also vary between countries. For example, the UK only requires an invoice declaration for goods from Turkey. However, a European Country would require an ATR Form so you would need to ask the exporter in Turkey to provide you with this document for your re-export.  


2. What else do I need to provide for smooth import into the EU?  

You will need to instruct the customs agent/customer in the EU (in our scenario) that your goods were stored into a customs warehouse and therefore they should be able to claim preferential rates on this shipment.  


To do that, you’ll need to provide the agent with: 

  • Evidence the goods were in a Customs Warehouse (a copy of the import declaration and re-export declaration showing relevant CPC codes); 

  • The relevant preferential form.  

 

3. What is the non-manipulation rule? 


The non-manipulation rule refers to the requirement that goods stored in a customs warehouse must remain unchanged and not undergo any processing or alteration that would change their condition or characteristic. This rule ensures that the goods retain their original status and preferential origin while in the warehouse.  


In most FTAs, the non-manipulation rule is deemed to have been met so not additional document or evidence is required. If the customs authority of the importing country has reason to suspect that those requirements have not been complied with, you might need to provide other evidence to demonstrate compliance with the rule such as a Certificate of Non-Manipulation certified by HMRC.  


How can we help? 


  • Our next Chambers Trade Academy Session on 10th July 2024 will focus on Customs Special Procedures including Customs Warehousing. Book your place here

  • Our team of International Trade & Customs Advisors are on hand to support you with your queries. Please email international@gmchamber.co.uk to arrange a catch-up with one of the team.  


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