Appendix ANNEX E.8 ANNEX CONCERNING TEMPORARY EXPORTATION FOR OUTWARD PROCESSING

Most States have made provision in their national legislation for total or partial exemption from import duties and taxes when goods which are re-imported after manufacturing, processing or repair abroad are declared for home use. The customs procedure which provides for this exemption is that of temporary exportation for outward processing.

The application of this procedure may be made subject to the condition that the processing operations envisaged are regarded by the competent authorities as not detrimental to national interests.

The exemption granted on the re-importation of the goods processed abroad is usually partial; however, it may be total, in particular where repairs have been carried out abroad free of charge.

For the purposes of this Annex:

1. (a)

   the term ‘temporary exportation for outward processing’ means the customs procedure under which goods which are in free circulation in a customs territory may be temporarily exported for manufacturing, processing, or repair abroad and then re-imported with total or partial exemption from import duties and taxes;

2. (b)

   the term ‘goods in free circulation’ means goods which may be disposed of without customs restriction;

3. (c)

   the term ‘import duties and taxes’ means the customs duties and all other duties, taxes, free of other charges which are collected on or in connection with the importation of goods, but not including fees and charges which are limited in amount to the approximate cost of services rendered;

4. (d)

   the term ‘compensating products’ means the products obtained abroad during or as a result of the manufacturing, processing or repair of the goods temporarily exported for outward processing;

5. (e)

   the term ‘customs control’ means the measures applied to ensure compliance with the laws and regulations which the customs are responsible for enforcing;

6. (f)

   the term ‘person’ means both natural and legal persons, unless the context otherwise requires.

Temporary exportation for outward processing shall be governed by the provisions of this Annex.

National legislation shall specify the circumstances in which temporary exportation for outward processing may be allowed and shall lay down the requirements which must be met.

The circumstances in which temporary exportation for outward processing is allowed may be set out in general terms and/or in detail.

Temporary exportation for outward processing may be made subject to the condition that the processing operations envisaged are not detrimental to national interests.

The customs authorities may require a person exporting goods temporarily for outward processing to specify the processing or manufacturing operation which the goods are to undergo abroad.

Temporary exportation for outward processing should not be refused solely on the grounds that the goods are to be processed in a given country.

Temporary exportation of goods for outward processing shall not be restricted to the owner of the goods.

Where temporary exportation for outward processing is subject to prior authority, national legislation shall specify the circumstances in which such authority is required and the authorities empowered to grant it.

Persons who carry on large-scale and continuous temporary exportation for outward processing operations involving the same type of goods should be granted a general authorization covering such operations

Where such action will facilitate a temporary exportation for outward processing operation or the competent authorities deem it necessary, these authorities should fix a rate of yield for that operation. The description, quality and quantity of the various compensating products shall be specified upon fixing that rate.

In order to fix the rate of yield, the customs authorities may take as a basis the conditions under which the operation is carried out. in so far as these are known. They may require production of the contracts with the foreign undertaking which is to carry out the processing or manufacturing. They may also take as a basis the rates of yield fixed by the customs authorities in the country in which the processing operations are to be carried out.

• relate to goods whose characteristics remain reasonably constant,

• are customarily carried out under clearly defined technical conditions, and

• give compensating products of constant quality

National legislation shall specify the conditions under which goods to be temporarily exported for outward processing shall be produced at the competent customs office and a goods declaration (outwards) shall be lodged.

Customs authorities should allow the goods declaration (outwards) form to be used for making out the declaration for the temporary exportation of goods for outward processing.

If special forms are used for making out the declaration for the temporary exportation of goods for outward processing, they should be harmonized with the form used for the goods declaration (outwards).

At the request of the declarant and for reasons deemed valid by the customs authorities, the latter should, so far as possible, allow goods that are to be temporarily exported for outward processing to be examined on private premises; the expenses entailed by such examination may be charged to the declarant.

The requirements relating to the identification of goods to be temporarily exported for outward processing shall be laid down by the customs authorities, due account being taken, for example, of the nature of the goods and of the operation to be carried out.

For the identification of goods to be temporarily exported for outward processing, the customs authorities may affix customs marks (seals, stamps, perforations, etc.), or rely on marks, numbers or other indications permanently affixed to the goods or on the description of the goods, scale plans or photographs, or take samples.

The customs authorities may also allow identification of the goods to be ensured by production, at the time of importation of the compensating products, of a written declaration by the importer concerning the identity of the goods contained in those products supported, as appropriate, by the commercial documents relating to the operation in question.

Where no other identification measure is feasible, the customs authorities should make use of an information document conforming to the model in Appendix I to this Annex provided that the processing or manufacturing is to be carried out in the customs territory of a Contracting Party that has agreed to take part in the use of information documents in accordance with the principles set out in Appendix I to this Annex.

Where customs authorities impose a time limit for temporary exportation for outward processing, this time limit shall be fixed by reference to the time necessary to complete the processing operations, up to the maximum period, if any, laid down in the national legislation.

At the request of the person concerned, and for reasons deemed valid by the customs authorities, the latter should extend the period initially fixed.

National legislation shall specify the conditions under which the compensating products shall be produced at the competent customs office and a goods declaration shall be lodged.

National legislation may prescribe that the goods declaration shall contain the particulars needed to permit discharge of the temporary exportation for outward processing declaration concerning the goods utilized.

National legislation may provide that the products obtained abroad from the treatment of goods identical in description, quality and technical characteristics to those temporarily exported for outward processing shall be deemed to be compensating products for the purposes of this Annex (setting-off with equivalent goods).

Provision should be made to permit compensating products to be imported through a competent customs office other than that through which the goods were temporarily exported for outward processing.

Provision shall be made to permit compensating products to be imported in one or more consignments.

At the request of the importer, and for reasons deemed valid by the customs authorities, the latter should, so far as possible, allow imported compensating products to be examined on private premises; the expenses entailed by such examination may be charged to the importer.

At the request of the person concerned, the competent authorities shall, under the conditions laid down by national legislation, allow goods temporarily exported for outward processing to be re-imported with total exemption from import duties and taxes if they could not undergo the manufacturing, processing or repair for which they were sent abroad and are returned to the exporter in the same state.

This exemption shall not apply to import duties and taxes which have been repaid or remitted in connection with the temporary exportation of the goods for outward processing.

Unless national legislation requires the re-importation of goods temporarily exported for outward processing, provision shall be made for terminating temporary exportation for outward processing by declaring the goods for outright exportation subject to compliance with the conditions and formalities applicable in such case.

National legislation shall specify the extent of the exemption from import duties and taxes granted when compensating products are taken into home use, and the method of calculation of that exemption.

The exemption from import duties and taxes provided for in respect of compensating products shall not apply to duties and taxes which have been repaid or remitted in connection with the temporary exportation of the goods for outward processing.

Where goods temporarily exported for outward processing have been repaired abroad free of charge, provision should be made for them to be re-imported with total exemption from import duties and taxes on the conditions laid down in national legislation.

The exemption from import duties and taxes should be granted if the compensating products were placed in a customs warehouse or a free zone before being declared for home use.

The exemption from import duties and taxes should be granted if the compensating products were placed under a temporary admission procedure before being declared for home use.

The exemption from import duties and taxes should be granted if the ownership of the compensating products is transferred before they are taken into home use, provided that they are taken into home use in the name or for the account of the person who placed the goods under the temporary exportation for outward processing procedure.

The customs authorities shall ensure that all relevant information regarding temporary exportation for outward processing is readily available to any person interested.