SPE13690 - Standardised exchange of information using the EU Trader Portal for use with prior export equivalence – scenarios(NI ONLY)

Note: This manual is under review following Brexit and is likely to be withdrawn. If there is anything within this manual you use regularly, please email hmrcmanualsteam@hmrc.gov.uk to let us know. Please check the other guidance available on GOV.UK from HMRC.

https://www.gov.uk/guidance/using-customs-special-procedures

The following scenarios for when standardised exchange of information should be used have been taken from an EU discussion paper.

See also SPE13315 on prior export equivalence and movements involving another Member State (EX/IM).

Scenario 1 - PEE no movements involving another Member State - no standardised exchange of information required

Company A processes EU sugar (as equivalent goods) into jam and caramel within its IP authorisation. Products are exported under IP EX/IM. Company A subsequently imports third country sugar under the equivalence system.

No standardised exchange of information is required as the same company is exporting Union sugar and importing non-union sugar to replace it.

Scenario 2 - PEE and movements involving another Member State - Standardised exchange of information required

Company A processes EU sugar (as equivalent goods) into jam and caramel within its IP authorisation. Products are exported under IP EX/IM.

Company A subsequently imports non-union sugar under the equivalence system (or may transfer the rights and obligations to another company named on its IP authorisation (see below)).

Company B (a sugar dealer) is named on Company A’s IP authorisation. He wishes to import third country sugar under the equivalence system and sell the imported sugar with exemption from duties under EX/IM on the EU market. Company B does no processing for Company A but he lodges the customs import declaration, so, if an INF was raised naming him, then he can operate by importing the replacement third country goods and then sell them on the EU market with no duties payable as an equivalent amount of EU goods has already been exported by Company A.

Standardised exchange of information is required to transfer the rights and obligations from Company A to Company B.

Each IP authorisation holder may be restricted in the amount of sugar it can import to IP. However, it is possible for a number of IP authorised companies to transfer the rights and obligations for their quota of the replacement sugar to one sugar dealer, so long as he is named on all the authorisations and is specifically named in the standardised exchange of information.

Scenario 3 - this scenario looks at which company should be authorised for PEE and movements involving another Member State when three companies performing different tasks are involved/linked

Company A holds an IP authorisation with the use of standard equivalence only granted. Prior Export equivalence is not authorised.

Company A imports raw cane sugar (CN Code 1701 13 90) under IP.

Company B on behalf of Company A processes the raw cane sugar into white sugar (CN Code 1701 99 10).

Company C in another Member State is also linked to Company A. Company C exports refined, white sugar (CN Code 1701 99 10) via another MS which has been manufactured from EU sugar beet (eg, not from the imported raw cane sugar).

Rules on sugar equivalence:

Raw cane sugar (CN 1701 13 09 and 1701 14 90) can be equivalent to sugar beet (CN 1212 91 80) so long as the processed product produced is CN1701 99 10 (eg, the goods that are exported by Company C in this scenario).

In the scenario above where Company A holds the authorisation in the first Member State - the white sugar in the first Member State is not ‘assigned a customs approved treatment or use’ so IP is not discharged correctly and a customs debt incurred. The operations are not in line with Council Regulation (EU) 952/2013, Article 223 and Commission Delegated Regulation (EU) 2015/2446, Annex 71-04.

However, an alternative would be that an IP authorisation with prior export equivalence could be granted in the Member State where the refined sugar (CN 1701 99 10) made from EU sugar beet is exported. Company C could then export the white sugar under Inward Processing (EX/IM) and Company A could import replacement duty free cane sugar. Company A would need to be named in the standardised exchange of information raised in the other Member State.

Note - Northern Ireland (NI) Customs Authorisations will continue to fall within the provisions of the Union Customs Code (UCC), as retained by the European Union (Withdrawal) Act 2018 and CEMA 1979