Article 73 of the Union Customs Code (“UCC”) provides an easement for determining the customs value of goods, where elements of the transaction value are not quantifiable at the moment of importation. The simplification has been proven particularly useful for declaring additions to value such as assists (e.g. certain R&D related costs), royalties and license fees. Subject to an authorization from the competent customs authorities, the simplification allows for the value of these elements to incorporated into the customs values of imports on the basis of an agreed calculation method and for the customs value to be treated as final at the time of import (i.e. no later reconciliation is required). Although it is not yet possible to obtain an EU-wide valuation ruling (please see our blog here for latest developments in this area), it is possible to obtain an EU-wide simplification authorization or a simplification authorization limited to certain EU Member States.
The European Commission recently released guidance on the simplification. The guidance aims to enhance clarity and consistency in customs valuation practices across the EU by providing practical instructions for applicants, specifying the responsibilities of authorization holders and offering answers to 13 practical questions related to the application of Article 73 of the UCC.
The guidance covers a variety of topics in relation to the simplification, including (i) the conditions for obtaining and maintaining an Article 73 authorization, (ii) the EU’s internal consultation procedure, (iii) customs representation and (iv) practical considerations such as monitoring the use of the authorization, (temporal and geographical) validity and the relevance of AEO-related provisions. Interestingly, the question whether transfer pricing adjustments can also be accounted for via an Article 73 authorization was not addressed in the guidance. In our experience, some Member States permit the use an Article 73 Authorization for such use and sometimes even encourage this. Others aren’t as flexible, thus guidance on this particular issue could have enhanced closer harmonization of customs practices within the EU.
