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Outward processing

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Outward processing is a special procedure whereby Union goods are temporarily exported from the customs territory of the Union for processing operations. The processed products obtained from those goods may be released for free circulation with total or partial relief from import duty, provided that the conditions set out in the authorisation granted by customs are fulfilled and the holder of the authorisation or another person established in the EU territory so requests with the consent of the authorisation holder.

What are goods temporarily exported for processing

These are Union goods declared for the outward processing procedure. They may be:

  • temporarily exported
  • subjected to processing operations
  • re-imported as processed products

This procedure may not be applied to:

  • goods whose exportation would give rise to repayment or remission of import duty
  • goods which, by reason of their end-use, were released for free circulation free of import duty or at a reduced rate of duty, but whose end-use purpose has not been achieved (except where repair of those goods is required)
  • goods whose exportation gives rise to export refunds
  • goods whose exportation gives rise to financial benefits other than export refunds under the common agricultural policy

What constitutes processing operations

Processing operations may be of various kinds:

  • working, including assembly, mounting and fitting to other goods
  • processing
  • destruction
  • repair, including restoration and reconditioning
  • use of goods as components in the manufacture of products, where those goods are needed to produce or facilitate the production of processed products (even if they are entirely or partially consumed in the process)

Processed products are goods resulting from the carrying out of processing operations under the processing procedure.

Yield

Customs, having assessed the information provided, determines the yield or average yield of the processing operation, or the method of determining such yield. The determined yield may be adjusted.

What are equivalent goods

Equivalent goods are non-Union goods that are processed in place of Union goods placed under the outward processing procedure.

The following situation is also possible:

  • processed products obtained from equivalent goods may be imported before the goods they replace are exported.

What is the standard exchange system

Under this system:

  • imported products (replacement products) may replace the genuine processed products, subject to certain established conditions
  • defective Union goods are repaired
  • customs may allow replacement products to be imported before the defective goods are exported

How long is allowed for the re-importation of processed products

The period is set by customs. It must be sufficient:

  • for the processing operations to be carried out, and
  • for the re-importation of the processed goods into the customs territory of the Union in order to allow them to be fully or partially relieved from import duty.

Customs may, upon a reasoned request from the authorisation holder, extend that period.

How to obtain authorisation to apply the outward processing procedure

This special customs procedure may only be applied upon obtaining authorisation from customs. The conditions of the authorisation are determined on a case-by-case basis.

The granting of authorisations is governed by the Description of the procedure for granting authorisations to apply the special procedure for end-use and processing (Order No 1B-344 of the Director General of the Customs Department of 28 April 2016) (hereinafter – the Description).

Methods of drawing up and submitting applications for authorisation:

Method I – via the Customs Decisions Management System (CDMS)

The application is drawn up in accordance with Annex A to Commission Delegated Regulation (EU) No 2015/2446, which sets out the data requirements for applications and authorisations. The application is submitted in accordance with point 11.1 of the Description.

The authorisation is considered to have been granted when a notification of the granting of the authorisation is received in the CDMS.

Method II – by drawing up and submitting an electronic export declaration

The export declaration is considered to be an application if:

  • it is submitted using the smart Customs Declaration Processing System (iMDAS)
  • it is drawn up in accordance with the Rules for completing export and re-export declarations submitted by electronic data processing means or in writing (Order No 1BE-33 of the Director General of the Customs Department of 17 January 2024)
  • the following data are entered in the data element "Additional information" (12 02 000 000):

Code

Purpose

00100Simplified authorisation
L9D31Nature of the processing of goods
L9D32Technical description of the goods and processed products and their identification
L9D33Proposed period for discharging the procedure (in months)
L9D34Proposed supervising customs office for discharging the procedure
L9D35Place of processing of goods (address)

The authorisation is considered to have been granted when the applicant receives, via the smart Customs Declaration Processing System (iMDAS), the message "Decision to release goods for export" (IE529).

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