The European Customs Union
All member states of the European Union (EU), including Germany, form a customs territory (the European Customs Union) in which unified customs arrangements apply. Goods imported into the EU are subject to EU-wide import regulations, customs tariffs and customs procedures.
This means that customs duties are only levied when the goods are imported into the EU. No further customs duties must be paid within the customs territory once goods have been imported into the EU - even in cases where the goods cross internal borders of member states.
A new European Union Customs Code (UCC) has been legally effective across all EU member states as of May 1, 2016. It is complemented by implementing and delegated acts. The UCC replaces the European Community Customs Code (CC) of 1992. Transitional provisions (e.g. regarding IT procedures) exist in some instances - these will be effective until December 31, 2020.
The European Customs Union in Practice
A German product may be shipped to Hungary without paying any duty and without any customs control.
Conversely, a Japanese product imported into the European Customs Union is subject to customs duties only when and where it first enters the EU, for example, Germany.
Subsequent to entry and initial customs clearance, no further customs procedures and duties are necessary. The product can circulate freely within the European single market.
Through the Agreement on the European Economic Area (EEA), Norway, Iceland and Liechtenstein also comply with most of these European Community regulations. The EU has also concluded customs unions with Andorra, San Marino and Turkey. Trade agreements allowing the duty-free import of certain goods or preferential tariff import agreements exist with many other countries.
Please see the EU-website for an overview of existing free trade agreements between the EU and third countries.
Common Customs Tariff in the EU
Import duty is stipulated by the Common Customs Tariff (CCT) and import duty tariffs are the same for all member states. The applicable tariff rate can be found online at the at the EU’s TARIC (Integrated Tariff of the European Union) database.
The nomenclature of the EU customs tariff is based on the Harmonized Commodity Description and Coding System (HS) of the World Customs Organisation (WCO). Through the regulations defined in the system, every single commodity can be classified according to the nomenclature and allocated a commodity number (“goods code”).
The vast majority of tariff rates are stated as ad valorem values. The basis for their calculation is the customs value of the goods. Its primary basis is the transaction value, i.e. the price actually paid or payable for the goods, adjusted where necessary, when sold for export to the customs territory of the EU. This price can be supplemented by certain factors, e.g. cost of packaging or cost of transportation and insurance prior to entering the EU territory. Other specified factors must not be included when determining the customs value, e.g. import duties payable in the EU.
EORI Number and AEO
It is necessary to have, among other things, an EORI number in order to participate in customs procedures. The EORI number (“Economic Operators Registration and Identification” number) is a number unique throughout the EU that is assigned by the designated authority in the European Union in order to identify economic operators and, where applicable, other persons to the customs authority. An economic operator requires to a person who, in the course of their business, is involved in activities covered by customs legislation. An EORI number is generally granted to economic operators established in the EU. An EORI number can only be granted to economic operators from other countries for very limited activities, e.g. lodging an entry summary declaration.
All companies registered in the EU can apply for certification as an Authorized Economic Operator (AEO) from the respective Head Customs Office. Certified companies are considered as being particularly trustworthy within the member states of the European Union and are able to take advantage of certain easements in customs clearance. Their risk assessment is also looked upon more favorably, meaning that they are not as frequently affected by customs controls. This may lead to a self assessment for certain customs formalities according to the new UCC.
Goods in the customs territory of the EU are accorded either „Union“ goods (i.e. goods manufactured or obtained in the EU or „goods released for free circulation“) have the status of Community goods (goods manufactured or obtained in the EU or „goods released for free circulation“) or „non-Union“ goods (i.e. all goods which do not comply with the criteria of Union goods). Importers may only be in possession of a limited amount of non-Union goods, or in some cases none at all, according to the amounts permitted by the customs administration.
Different customs procedures apply subject to the reasons why goods are imported. Where eight customs procedures previously applied, the new Union Customs Code stipulates just three major groups of customs procedures:
• relaease for free circulation
• taking goods out of the customs territory of the Union, and
• special procedures
However, the special customs procedures comprise most of the procedures formerly regulated on their own:
• Transit (external and internal transit)
• Specific use (temporary admission and end-use)
• Processing (inward processing and outward processing)
• Storage in customs warehouses and free zones
In Germany, a free zone exist in the free port of Bremerhaven
Presentation of Goods to Customs
There are uniform regulations for the registration of trade in goods, and these are implemented according to a defined model. In order to be able to be placed in a customs procedure, the non-Union goods must be presented to customs.
„Presentation of goods to customs“ refers to the notification of the customs authorities of the arrival of goods at the customs office or at any other place designated by the customs authorities and the availability of those goods for customs controls.
An entry summary declaration usually has to be lodged - within specific time-limits - prior to the entry of goods into the EU territory and the presentation of goods to the customs. The purpose of this is to enable the customs authorities to carry out prearrival risk analysis.
The presented goods are then declared for a customs procedure. A customs declaration must be submitted in order for this to take place. This is regularly submitted electronically using the ATLAS system for electronic customs clearance, and will be until such time as a uniform IT system for the whole of the European Union is in place.
Declaration formalities must be carried out by a company registered in the EU. Submission of the customs declaration by a representative, such as a forwarding agent, is permitted. Companies from non-EU countries are allowed to submit a customs declaration only in very limited cases.
Information about the electronic customs clearance procedure can be found at the website of the German Customs Administration.
It is possible to benefit from simplified customs declaration procedure where certain details can be skipped (subject to permission by the customs authorities). These details must be submitted in the form of a supplementary declaration within a period of 10 days.
Some goods may only be marketed in Germany if they comply with certain conditions regarding ingredients, materials or technical specifications. The TARIC database shows whether any limitations or restrictions exist. Actual import bans only apply to a miniscule number of goods.
Different authorities are responsible for the granting of approvals or licences, depending on the nature of the goods. Please refer to the responsible institution websites, for instance: