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Duty suspensions for unfinished products

Companies that import certain unfinished products can benefit from duty suspensions because certain listed goods are sometimes not produced in the European Union or are produced in insufficient quantities. As a result, the needs of industries using the goods could not be adequately met. For example, in 2013 the European Commission adopted Regulation (EU) No. 1387/2013 on Customs suspension in respect of certain agricultural and industrial products This includes certain unfinished goods.

Often the product concerned is shipped to the EU from non-European countries such as China and is then further processed by the European producer into the final product. This process is characteristic of so-called semi-finished products.

In view of the changed economic conditions and changes with regard to the description of goods, classification, customs duties or the requirement of an end use, the regulation was amended and supplemented accordingly by the new Regulation (EU) 2016/2390.

Tariff concession for semi-finished goods in the context of end-use

The prerequisite for a semi-finished product is always that it has the same essential characteristics as the finished or finished end product. This is then classified with the corresponding marking in the same customs tariff number as the finished product.

Regardless of raw materials or due to lack of capacity in the EU, semi-finished goods can be exempted from customs duties. Here it may be disputed under certain circumstances whether or not it is a semi-finished product and whether the conditions for this are fulfilled.

It is important to note that, as a rule, semi-finished products are only granted duty exemption if the customs procedure of the end use is used. In the end-use procedure, customs checks whether the goods are actually processed further. If this authorization is not available, the company cannot benefit from the duty exemption. The end-use must be formally applied for and approved by Customs.

Examples of unfinished products and duty suspension are digital video recorders of tariff heading 8521 90 00 20, which are listed in the 2016 Regulation and benefit from duty suspension. The following goods fall under customs tariff number 8521 90 00 20:

Digital video recorder for use in the manufacture of CCTV surveillance systems

  • without hard disk,
  • with or without a DVD-RW drive,
  • with motion detector or motion detection function by IP-connectivity via LAN-Connector
  • with or without serial USB interface

Thus, the product is expressly defined here as a digital video recorder without a hard disk. In this respect, it is a semi-finished product.

However, for these digital video recorders without a hard disk, the duty suspension regulation explicitly requires that an end-use authorisation is available at the time of the import declaration. Otherwise a customs concession is not possible.

Attorney Dr. Tristan Wegner

Ihr Ansprechpartner

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