1. What is Inward Processing Relief procedure?
Inward Processing Relief (IP), is a customs special procedure which allows non-Union goods to be used in the customs territory of the Union in one or more processing operations without such goods being subject to import duties, other charges (e.g. VAT, excise duties) and commercial policy measures (insofar as those measures do not prohibit the entry or exit of goods into or from the EU). Those products resulting from those operations are called ‘processed products’ may be:
a. re-exported from the customs territory of the Union or
'Processing operations' means the following:
b. released for free circulation by paying the appropriate import duty on the basis of either the imported goods or the processed products or
c. other ways stated in Article 215 of Reg. (EU) no. 952/2013.
IP procedure may also be used for any of the following goods:
- the working of goods, including erecting or assembling them or fitting them to other goods,
- the processing of goods,
- the destruction of goods,
- the repair of goods, including restoring them and putting them in order,
- the use of certain goods, which are not to be found in the processed products, but which allow or facilitate the production of those products, even if they are entirely or partially used up in the process (production accessories) (see exceptions in paragraph 4)
2. What are the benefits when using IP procedure?
- intended to undergo operations to ensure their compliance with technical requirements for their release for free circulation,
- which have to undergo usual forms of handling intended to preserve them, improve their appearance or marketable quality or prepare them for distribution or resale.
The purpose of this procedure is to foster and promote exports to third countries and to improve the competitiveness of the Union processing industry on an international trade level by allowing the partial or total relief from or suspension of customs duties on non-union goods which undergo operations and are re-exported or placed in free circulation in EU accordingly. This enables manufactures to gain advantage from the use of low cost materials to manufacture competitive products and to create new jobs and increase the level of employment.
It also allows union goods called 'equivalent goods' (e.g. sugar) to be processed instead of the non-union goods placed under the IP procedure and export the processed products (e.g. biscuits) before or after the importation of non-union goods they are replacing under specific provisions.
3. Which is the legal basis for IP Procedure?
- Regulation (ΕU) no 952/2013 (UCC) laying down the Union Customs Code (main common provisions: Articles: 22-30, 55, 79, 82, 85-86, 89-90 specific: Articles:210-225, 241, 255-258)
- Regulation (ΕU) no 2015/2446 (DA) Delegated Acts (main common provisions: Articles: 72-76, 98-99, 100-103, specific: Articles: 161-183, 241, 248, 250, 254 and Annexes Α, Β: 33-06, 71-02 up to 71-06, 32-03)
- Regulation (ΕU) no 2015/2447 (IA) Implementing Acts (main common provisions: Articles: 10-15, 147-158, specific: 259-269, 271, 324-325 and Annexes Α, Β)
- Regulation (ΕU) no 2016/341 (DTA) Delegated Acts for transitional rules (main common provisions: Articles:2-3, specific: 14-23, final provisions: 55 and Annexes Ι, D1, 12-application & authorisation forms, 13-INF)
- The Customs Code Law of 2004, L. 94(I)/2004 (Articles: 54-57)·
- The Excise Duties Law of 2004, L. 91(I)/2004·
- The V.A.T. Law, L. 95(I)/2000, as it has been amended.
4. What type of goods may be placed under the IP Procedure?
All goods may be placed under IP procedure except those:
IP authorisation cannot be granted for the following production accessories:
(a) where the goods placed under the procedure cannot be identified in the processed products (in cases other than repair, destruction and goods used as production accessories)·
(b) the goods cannot be economically restored after processing to their description or state as it was when they were placed under the IP procedure,
(c) the use of IP procedure cannot result in circumvention of he rules concerning origin and of quantitative restrictions applicable to the imported goods.
- fuels and energy sources other than those needed for the testing of processed products or for the detection of fults in the goods placed under the procedure needing repair,
- lubricants other than those needed for the testing, adjustment or withdrawal of processed products,
- equipment and tools.
5. How goods are placed under the IP Procedure?
The entitlement to the use of the IP procedure is conditional upon the issue of an authorisation by the Customs & Excise Department, following the submission of:
The electronic application must include all the required information. Where the application concerns the import of agricultural goods, such as sugar, olive oil, milk or milk products mentioned in Annex 71-02 DA [ex Annex 73-Reg. (EEC) No 2454/93], the submission of additional information is required in order to facilitate the examination of the economic conditions.
a. an electronic application which must be submitted through Customs Decision System (CDS) to the customs authorities designated for the place where the goods to be declared for temporary exportation are located (supervising office) and/or where the applicant’s main accounts for customs purposes are held or are accessible. Information about the CDS can be found here. Economic operators can be registered through https://customs.ec.europa.eu/tpui-cdms-web/. The guidance for applying for an IP authorisation can be found here (in greek only), or
b. a customs declaration in any of the cases referred to in Article 163(1) - Reg. (ΕU) no 2015/2446 (DA), except those of paragraph 2 of the same article, such as:
- goods listed in Annex 71-02 DA,
- when more than one member state is involved,
- where the use of equivalent goods is applied for
- where an examination of economic conditions is required.
The conditions under which the IP procedure is to be used shall be set out in the authorisation issued by customs through the CDS and sent to the applicant together with a covering letter.
6. What conditions must be fulfilled in order to use an IP procedure?
The authorisation shall be granted only to persons (natural, legal) who fulfilled the following conditions:
It shall be noted that for the implementation of the Directive 2006/123/EC of the European Parliament and of the Council of 12 December 2006 on services in the internal market and the harmonised legislation (Law 76(I)/2010 concerning Freedom of Establishment of Service Providers and the Free Movement of Services- only in greek), the Department of Customs & Excise for the purpose of simplifying the procedures and administrative cooperation required for the evaluation of the above application, may, through the IMI system, request and obtain information concerning the applicant from the competent authority of another Member State, in which the applicant has declared that is a registered member.
(a)are established in the Union (persons established outside the Union can use the regime exceptionally under conditions of Article 161-DA),·
(b) provide the necessary assurance of the proper conduct of the operations,
(c) provide a guarantee where a customs debt or other charges may be incurred in respect of goods placed under the IP procedure will be paid. The form to be used for this purpose is a General Bond, Form C.124,
(d) they carry out processing operations on the goods or arrange for them to be carried out,
Moreover, the following conditions must be met:
(e)where the customs authorities can supervise and monitor the procedure without having to introduce administrative arrangements disproportionate to the economic needs involved,
(f) where the essential interests of Union producers are not adversely affected (economic conditions),
(g) the goods cannot be economically restored after processing to their description or state as it was when they were placed under the procedure,
(h) the use of the procedure cannot result in circumvention of the rules concerning origin and of quantitative restrictions applicable to the imported goods,
(i) where the import goods can be identified in the processed products·
For any further information concerning IMI system you may visit the website http://ec.europa.eu/imi-net or obtain access through the website of the Ministry of Commerce, Industry and Tourism.
7. When is an IP authorisation involving more than one member state granted?
This multi-national authorisation is applied when the authorisation involves customs administrations in more than one Member State e.g. non-union goods are imported in member state A and undergo under processing operations then are transfer to member state B for further processing and re-exportation.
In this case, the electronic application shall be submitted through the CDS to the customs authorities designated for the place where at least part of the processing operations to be covered by the authorisation are conducted and where the applicant's main accounts are held facilitating audit-based controls. Where the customs authorities cannot be determined, the application shall be submitted to the customs authorities designated for the place where the applicant's main accounts are held. Such kind of authorisation is granted after the prior agreement of the customs authorities involved.
Moreover, in order to communicate information on non-union goods to other customs offices involved in the authorisation, the information sheet INF1, INF5, INF9 may be issued, at the request of the person concerned or on the initiative of the customs authorities.
8. How does an IP procedure operates?
The IP authorisation specifies the period of validity of the authorisation (up to 3 years for goods of Annex 71-02DA and up to 5 years for other goods) and the period of discharge (meaning the time needed for the goods to entrer in the procedure and transfer to the place for re-exportation ,plus the time for the processing operations needed). Both periods may be extended after a written request.
Entering of goods under IP procedure IM/EX and EX/IM is made in accordance with the provisions laid down for import/export accordingly.
The holder of the authorisation is requested to keep records as provided for in article 178 of the Reg. (EU) 2015/2446 which will contain all necessary information for non-union goods and the processed products e.g. particulars of the declarations (import-export), rate of yield, nature of the processing operations, commercial or technical descriptions necessary to identify the goods etc. as in Annex 71-06 of the Reg. (EU) 2015/2446.
9. When is IP procedure discharged?
IP procedure is discharged, according to Article 215-UCC, when the goods placed under the procedure or the processed products have been:
Goods are release for free circulation by paying the appropriate import duty on the basis of either:
a) assigned a new customs procedure (release for free circulation, special procedure, export),
c) destroyed with no waste remaining or,
d) abandoned to the state.
(i) the imported goods or
(ii) the processed products
under the conditions laid down in articles 85-86 of Reg. (EU) no. 952/2013 and articles 166-168 of Reg. (EU) no. 2015/2446.
After the expiration of the period of discharge and within 30 days a bill of discharge must be submitted to the supervising office with the date as in Annex 71-06 of the Reg. (EU) 2015/2446.
Guidance for Member States and Trade -European Commission TAXUDA2/SPE/MRe (20171) 6411367 (english)
Guidance for bussiness and trade (only in greek) -March 2018
For more information, you may write to the following address.