How to understand Customs Jargon Part 1

                                     How to understand Custom Jargon

                                                            PART 1

                                             Chamber International 

HM Customs uses a form of terminology by traders. This is guide seeks to explain 16 of the most commonly used terms.

1.Ad Valorem  - The term ( from the Latin ) means " According to value " . It refers to import duty liabilities, which are always expressed as a percentage and are based on the total import value of the consignment on a CIF ( Cost  Insurance Freight ) basis.

2.A.TR   - ATR  is the term used to refer to the document used for preferential free trade between the EU and Turkey. It specifically refers to the A.TR  movement certificate, which enables importers in both the EU and Turkey to import consignments on a duty-free basis from each other as long as the goods are in free circulation in either bloc.

3.CPC - CUSTOMS PROCEDURE CODE  - The Customs procedure code ( CPC ) is the 7-digit code found in box 37 of both import and export customs declarations which refers to the status of the consignment being exported or imported, 

and whether it is treated as being in free circulation ( duty paid ) or under duty suspension and therefore customs control , such as under Inward processing at both import and export stages to ensure that the correct status of the goods under such circumstances is declared correctly.

4.Deferment - This is the process whereby import duty and VAT are not paid at the time of importation of a consignment, but will be defferred until a fixed date the following month and paid by direct debit directly to the HMRC account in the bank of England.

Frequent importers may apply to HMRC for a duty deferment account to avoid payment of import duty and VAT every time a consignment arrives in the UK. This means that import.

This means that import duty and VAT is removed automattically from their account every month by direct debit as an accumulated total for all imports made during the previous month, as payment is made in the month following that during which the imports were actually made.

5.Drawback   -  Drawback  is a technique used to reclaim import duty paid on an imported consignment which is subsequently re-exported out of the EU.  The importer must be authorised to use this facility by HMRC prior to carrying out such activities.

6.End use Relief  -  This is an import duty relief facility used for the import of materials which are destined for a specific and prescribed use, namely inclusion in products destined for the following sector uses:  

- Ship building and repair (shipwork) ,  - Aviation ,  - Military , - Continental Shelf (offshore oil & gas).

7.EUR 1  -  EUR 1  refers to the movement certificate used in the free trade preferential system which allows the importer to import good duty  free  ( in most cases) from countries engaged in free trade with the European Union.  The Certificate is known as the EUR 1.

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