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Community/Common Transit and TIR Newsletter - October 2007

 

Community/Common Transit and TIR Newsletter – October 2007

Revision of the Community/common transit legislation: New Computerised Transit System (NCTS) as the regular procedure

The Customs Code Committee and EC-EFTA Joint Committee have agreed changes to the Customs Code Implementing Provisions and the Common Transit Convention to reflect that NCTS is now the regular method of declaring goods to the Community/common transit procedure. The revised legislation will not, in general, greatly affect current procedures. However the opportunity has been taken to review the current enquiry and debt recovery procedures. One other significant change resulting from the revised legislation relates to the use of individual guarantee vouchers. The revised legislation will come into force on 1 July 2008 although the revised enquiry procedure will not come into effect until 1 July 2009. Details are as follows:

Revised Enquiry Procedure

The enquiry procedure has been revised to speed up the discharge of the Community/common transit procedure and the guarantee.

The revised enquiry procedure will come into force on the 1 July 2009 and the main changes are as follows:

  • Reduction in the time limit for starting the enquiry procedure.
  • A change in the current policy of contacting the Principal first to advise that a transit movement has not been ended.
  • Reduction in the time limit after which a customs debt is deemed to have been incurred.
  • New exchange of messages on the NCTS.

Reduction in the Time Limit for Starting the Enquiry procedure

Article 365

At present, if the TAD/SAD Copy 5 is not returned to the customs authorities within 2 months of the date of acceptance of the declaration, those authorities shall inform the principal and ask him to furnish proof that the procedure has ended.

Under the new enquiry procedure, when the customs authorities of the MS of departure

  • have not received the ‘Arrival Advice’ message by the time limit within which the goods must be presented at the office of destination or
  • have not received the ‘Control Results’ message within 6 days after the ‘Arrival Advice’ message has been received,

those authorities shall consider launching the enquiry procedure in order to obtain the information required to discharge the procedure.

The enquiry procedure is started at the latest 7 days after the expiry of one of these time limits.

Where it is not possible to obtain the information needed to discharge the procedure or where this is not possible, those authorities will:

  • establish whether a customs debt has been incurred
  • identify the debtor, and
  • determine the customs authorities responsible for entry into the accounts

A change in the current policy of contacting the Principal first to advise that a transit movement has not been ended

The current law requests that the principal is informed and asked to furnish proof that the procedure is ended if the ‘Arrival Advice’ message has not been received by the time limit within which the goods must be presented to the office of destination or if under the NCTS Fallback procedure, Copy 5 of the transit declaration is not returned to the customs authorities of the MS of departure within 2 months.

Changes to the law on the enquiry procedures means that Member States may not always contact the principal first i.e. if the contents of Box 8 (Consignee Information) are sufficient, they may decide to contact the office of destination first. The UK will continue to inform the principal of any unresolved movements at an early stage.

Reduction in the Time Limit for incurrence of a Customs Debt for Community/common Transit Movements

Article 450a

Article 215(1) third indent of the Customs Code and Article 450a of the Implementing Regulations currently state that the customs debt shall be incurred at the place where the goods were either placed under the procedure or were introduced into the Community if the actual place where the events giving rise to the debt cannot be determined within ten months of the date of acceptance of the transit declaration.

Under the revised legislation, this ten month time limit will be reduced to:

  • seven months from the latest date on which the goods should have been presented at the office of destination, unless the Member State of departure has sent a request for recovery of the debt to the authorities in another Member State in which case this period is extended for a maximum of one month, or
  • one month from the expiry of the time limit referred to in Art 365(5), in case the principal has not provided sufficient or any information. (Under the new Art 365(5) the principal has 28 days in which to reply to the request, from the customs authorities of the Member State of departure, for information needed to discharge the procedure).

Notifying the guarantor that the debt has not been discharged

Article 450c

Under the current legislation, where the procedure has not been discharged, the customs authorities of the Member State of departure must notify the guarantor of this fact within 12 months of the date of acceptance of the transit declaration. Under the revised legislation customs will have to send this notification to the guarantor within nine months of the prescribed time limit for presentation of the goods at the office of destination.

New exchange of messages on the NCTS

There will be new messages built into the NCTS when the new enquiry procedures come into force which will help to speed up the enquiry procedure. They will:

  • allow an exchange of information between the office of departure and the office of destination
  • provide the Competent Authority at departure with the opportunity to transmit competency to the country/office of destination if it is established that the irregularity occurred in the country/office of destination.

These new messages will not affect transactions keyed by members of the trade when using the NCTS.

Individual guarantee vouchers

As from 1 July 2008 individual guarantee vouchers will have to be in an electronic format. Paper guarantee vouchers will, however, still be available for use under NCTS fallback only. To date the Commission has not issued detailed information regarding the use of 'electronic guarantee vouchers' but we will provide further information about this as and when it becomes available.

2. The Modernised Customs Code and its impact on Transit and Community Status

Following agreement being reached on the final text of the Modernised Customs Code, discussions have now commenced to establish the corresponding Implementing Provisions (IP). Although discussions are still at a very early stage, an initial picture has started to emerge regarding the main changes that will affect the provisions relating to transit and Community status:

  • There is no provision for national simplifications within the Modernised Customs Code. However, any such simplifications (once agreed) will have to be detailed in the Implementing Provisions which means they will have to be suitable as EU-wide simplifications. HMRC has sent draft legislation to the Commission, to be considered for inclusion in the IP, in respect of three simplifications, i.e. movements via electronic port inventory systems, movements between the UK and the Channel Islands and direct exports via NES/LCP.
  • The requirement that all communications with customs must be electronic means that all paper-based simplifications will cease e.g. the air/sea level 1 and rail simplified procedures. These may be replaced by simplifications based on submission of reduced electronic data.
  • Proof of Community status will, in future, have to be provided in an electronic format replacing paper documentation such as the T2L and T2M.
  • Movements currently exempt from the requirement to provide a guarantee, e.g. movements by air or pipeline, will in future need to be covered by a guarantee or guarantee waiver.
  • The transit ‘principal’ becomes the ‘holder of the transit procedure’.
  • The comprehensive guarantee provisions for transit have been moved to the general provisions on guarantees (Article 56-65) which stipulate the conditions for a comprehensive guarantee for a reduced amount or a guarantee waiver.
  • Transit movements other than Community/Common transit (TIR, ATA, etc) will also be handled electronically. See item 3.
  • The transit operators will benefit from the ‘single-window’ (one-time data submission) and the one-stop shop (all controls at a single point).
  • The centralised clearance concept is likely to reduce the number of cases where transit within the Community will be required.

3. Changes to NCTS/TIR

The Customs Code Committee recently met in Brussels in order to finalise the amendments to the Implementing Provisions (Commission Regulation 2454/93) to establish a legal base for the use of computerised data exchange in TIR and to formally adopt the changes and agree the implementation date.

At the meeting, the implementation date of the revised procedure was agreed for the 1 January 2009. From that date the use of NCTS will be compulsory for controlling all TIR movements within the EU.

4. Revised list of high-risk goods

OLAF (the EU Commission’s anti-fraud service) have proposed to have a much shorter list (beef, dairy products, bananas and undenatured ethyl alcohol have been removed although poultry and tobacco are proposed new additions). CT principals may have to have their guarantees amended if they move goods that are to be removed from the current list or if they move goods that are new additions to the list. Full details will be made available as soon as possible after the revised list has been agreed.

5. NCTS Post Implementation Review: Summary

HMRC undertook a Post Implementation Review (PIR) of NCTS in 2006/7. The review team subsequently produced a report with detailed findings and made several recommendations covering technical and functional areas. A summary of this report is attached. The status of the individual recommendations was communicated to the trade during a recent JCCC Sub-group meeting on NCTS.

HMRC is aware of trade concerns about the high level of NCTS downtime. There is a strategy in place to drastically improve system availability. HMRC is also exploring methods to improve the level of out of hours system support to the business community.

To see the full Summary go to the ‘General Information’ section of the CT/TIR web page.

6. NCTS Sunset Project

In March 2006, the Commission announced the staged withdrawal (sun-setting) of central technical support for the NCTS software applications and the requirement for all EU countries to undertake future development and support activities for the applications. As a result from 1 July 2008 all EU countries using the NCTS software application provided by the Commission for the mandatory submission of electronic transit documentation will have to make arrangements to either support the existing application or develop their own national application.

Support of the application includes the implementation of any new software releases or upgrades as appropriate, working within very tight timescales (dictated by the EU).

This project will provide a short term (two years possibly plus one) tactical solution to deal with the Commission withdrawing support. The separate Sunrise project for NCTS will deliver a long term strategic solution.

The NCTS Sunset project has completed Value and Viability lifecycle stages where a number of options were explored and some were discarded. The project has now moved into the define stage where the preferred option will be agreed.

7. Confusion between NCTS and ECS documents

Important - It has come to the notice of the NCTS Helpdesk that some traders are trying to arrive EAD documents on the NCTS, generating unnecessary rejection messages.

With effect from the 10 September 2007, the UK acts as an Office of Exit in the Export Control System (ECS) for export consignments raised in other Member States. ECS is a message based system similar to NCTS, set up to control 'Indirect Exports' from Member States e.g. an export from DE to the USA via London, Heathrow.

The 'control document' for movements under ECS is the Export Accompanying Document (EAD) - which must travel with the goods from the Office of Export to the Office of Exit. The EAD has similar characteristics to the NCTS Transit Accompanying Document (TAD) in that both have an MRN and barcode at the top right corner.

Although the documents are similar, ECS and NCTS are separate entities and should not be confused. To clarify, an EAD should have EX in box 1 (top centre).

Authorised Consignees must not attempt an arrival message for EAD documents on NCTS channels. EADs must be forwarded to our National Hub in Salford in accordance with instructions as described in JCCC Paper (07) 32.

Links for further ECS information:

Introduction:

JCCC Paper (07) 32

JCCC Paper (07) 36:

If you have any queries please contact the NCTS/ECS Helpdesk (01255 244709 - Mon - Fri 08:00 to 16:00)

Email: ncts.helpdesk@hmrc.gsi.gov.uk

8. Project Group on Customs Seals

A Project Group has been set up by TAXUD to examine the technical requirements for Customs Seals. The group will make an informal judgement on the technical scope of the ISO seals standards in relation to the existing EC Customs legislation and will explore the need and possibilities for implementing a new seals policy within the EU. The UK has a representative on the group and we will keep the trade informed of developments.

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