In outward processing, goods from the European Union (Community goods) are temporarily exported from the European Union to a third country, worked on or processed or repaired there and subsequently re-imported.
This makes outward processing the economic counterpart to inward processing. Outward processing contributes to the international division of labour. Thus, not only manufacturing processes in countries with lower incomes, but also foreign know-how are often used at favourable customs tariffs.
Customs clearance of (re-)imported goods should take sufficient account of the fact that they contain products originating in the European Union. Therefore, the goods are released for free circulation under total or partial relief from import duties.
Import duties can be calculated using two methods:
- Differential customs clearance: The fictitious import duties for the temporarily exported product are deducted from the import duties for the processed product. The difference represents the duty to be levied.
- Value-added customs clearance: Customs clearance is based on the processing costs. Materials from the EU are not considered.
In the context of outward processing, many disputes may arise as to the basis of assessment of the import duties to be levied, the classification of the imported goods or the authorisations for the procedure. If the customs authorities issue a customs notice, the calculation must be verified if necessary and an objection must be lodged with the main customs office.
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