Notice

Customs co-operation requirements for the UK DCTS

Published 24 December 2020

1.  Introduction

This customs cooperation notice is made under regulation 16 of the Trade Preference Scheme (Developing Countries Trading Scheme) Regulations 2023 and has the force of law by virtue of that regulation.

This customs cooperation notice should be read in conjunction with:

• the Trade Preference Scheme (Developing Countries Trading Scheme) Regulations 2023 (“the DCTS Regulations”)
• the Customs (Origin of Chargeable Goods: Developing Countries Trading Scheme) Regulations 2023 (“the Origin Regulations”)
• notices made under the Origin Regulations

The Origin Regulations and the notices to be made under the Origin Regulations together set out the “DCTS Origin Rules” referred to in this customs cooperation notice.

2. Who should read this notice

This customs cooperation notice should be read by:

• the governments and customs authorities of beneficiary countries
• anyone who exports goods from a beneficiary country to the UK under the DCTS
• anyone who imports goods from a beneficiary country to the UK under the DCTS

3. Definitions

For the purpose of this customs cooperation notice:

• beneficiary country means a qualifying DCTS country which has the meaning given in regulation 6(1) of the DCTS Regulations
• beneficiary customs authority means the competent authority designated by the beneficiary country responsible for customs matters and any other authority empowered in the beneficiary country to apply and enforce customs legislation
• DCTS means the Developing Countries Trading Scheme established under regulation 5 of the DCTS Regulations
• HMRC means His Majesty’s Revenue and Customs as defined in Schedule 1 to the Interpretation Act 1978

4. DCTS Conditions

It is a condition of a beneficiary country being granted preferential rate under the DCTS that it assist HMRC in investigating contraventions of DCTS requirements by implementing and maintaining systems to ensure that:

• the beneficiary customs authority has a verification procedure to check the origin status of the goods in question
• where cumulation under regulations 17, 18, 19, 20 or 21 of the Origin Regulations is applied, arrangements are entered into with the customs authorities of other countries that the beneficiary country is permitted to cumulate with, to enable the verification of a proof of origin issued in accordance with the DCTS Origin Rules
• where a verification procedure or other information indicates the DCTS Origin Rules are being contravened, appropriate enquiries are carried out by the beneficiary country with due urgency to identify and prevent such contraventions and to take enforcement action. For this purpose, the UK may participate in the investigation

These conditions are implemented in accordance with regulation 16(2)(i) of the DCTS Regulations.

5. Verification of origin

To ensure the proper application of the DCTS Origin Rules and the accuracy of claims for preferential tariff treatment, HMRC may request verification of origin.

The beneficiary country will supply the Tariff Preference Team in HMRC or the relevant Foreign, Commonwealth and Development Office post in the beneficiary country with the contact details of the relevant official or team in the beneficiary customs authority to which verification requests should be sent.

When HMRC notifies the contact point in the beneficiary customs authority of a request to verify origin, that beneficiary customs authority must assist in the provision of any specified documentation and information included in the request as part of their verification procedure.

The beneficiary customs authority will acknowledge a request for verification of origin with a written acknowledgement of receipt. This may be sent by email or post to the Tariff Preference Team within 30 days from the date of receipt of a written request for verification of origin from HMRC. The acknowledgement must include an initial indication of the timeframe for producing a verification report. The email and postal address for the Tariff Preference Team can be found at the end of this customs cooperation notice.

Following a request for verification, the beneficiary customs authority will proceed to the origin verification and will provide the results of the verification within six months of receiving the request.

The beneficiary customs authority must provide HMRC with a written report to enable HMRC to determine whether the good is originating or not. The report must contain:

• the results of the verification with supporting rationale
• the description of the good subject to verification and the tariff classification relevant to the application of the rule of origin
• the description of the production process to show how it met the rules
• information on the manner in which the verification was conducted
• where appropriate, supporting documentation
• requested documentation where available

If the beneficiary customs authority is unable to provide a report within this six-month period, it will notify HMRC with a revised estimated timeframe for producing the verification report.

However, if the beneficiary customs authority does not provide a report within the six-month period, or if the report does not contain sufficient information to determine the origin of the goods, HMRC will contact the beneficiary customs authority giving a further period of four months from that date to provide the report or to provide additional information.

6. Result of verification

If, as a result of the verification, HMRC determines that the goods are originating, it will grant preferential tariff treatment to the goods and refund any excess duties paid or release any guarantee provided, unless the guarantee also covers other obligations which have not been discharged.

HMRC may deny preferential tariff treatment to a good if the results of verification are inconclusive or if there is reasonable doubt as to whether the good is originating.

If a verification of origin finds that the goods for which DCTS preferential tariff treatment has been claimed did not meet the conditions of the DCTS Origin Rules, HMRC will deny preferential tariff treatment to the goods.

If a beneficiary customs authority does not provide a full verification report within 10 months of receiving the verification request, HMRC may consider that a full verification report will not be provided and may deny the claim for preferential tariff treatment. HMRC will send a letter to the importer on the results of the verification, notifying them that the claim for preferential tariff treatment has been denied.

7. Record keeping requirements

Beneficiary countries or, where relevant, the beneficiary customs authorities should require:

• an exporter that has completed a proof of origin
• a producer or supplier that has provided a written statement

to keep a copy of the relevant document, as well as any supporting documents required to evidence it, for at least three years from the end of the calendar year in which the proof of origin was completed, or longer if required by its laws and regulations.

Documentation or records should be maintained in a way that allows them to be retrieved and printed.

8. Failure to comply with this customs cooperation notice

Failure to comply with the conditions specified in this customs cooperation notice may lead to HMRC denying a claim for DCTS preferential tariff treatment.

9. Suspension

Where the beneficiary country is seriously and systematically failing to comply with the conditions specified in this customs cooperation notice, this may lead to:

• the suspension of a beneficiary country from the DCTS
• the suspension of rates on specified DCTS goods
• a variation notice to vary the DCTS rate on specified DCTS goods

10. Scheme administration and management

HMRC will, where appropriate, discuss the overall operation and administration of the verification process, including forecasting of workload and discussing priorities, with the beneficiary customs authorities.

11. Contact details

Tariff Preference Team

Tariff Preference Team
His Majesty’s Revenue and Customs (HMRC)
3rd Floor
7 & 8 Wellington Place
Leeds
LS1 4AP

Email tariffpreference@hmrc.gov.uk