The peculiarity of transactions with customer-supplied raw materials is the preservation of ownership of the customer for both raw materials and finished goods. The processor only provides processing services for which he receives a fee. Let's talk further about customs clearance of such transactions.
Components of the process of working with non-resident customer-supplied raw materials
The procedure for conducting transactions with customer-supplied raw materials and the customs clearance of such transactions is governed by P. 23 of the Customs Code of Ukraine (hereinafter – CCU). Given its norms, we can distinguish the following basic components of the process of working with non-resident customer-supplied raw materials:
1) obtaining the written permission of the customs authority;
2) placing the foreign raw materials in the customs regime of processing in the customs territory;
3) processing the foreign raw materials into finished products within the determined period;
4) exporting the processed products through their re-export.
Let's consider each component.
Permit on processing
To import customer-supplied raw material into the territory of Ukraine, it is necessary, first of all, to obtain the written permission of the customs authority. For this purpose the documents must be submitted according to the list defined by Art. 149 of CCU: application; a contract with the information on the mandatory output of the processed products, the specified volume of works and the time of their completion; technological schemes of processing.
The permit is issued free of charge within five working days since the date of the application registration. In case of in information discrepancies or inaccuracy, establishment of absence of proper technological equipment, premises, conditions for recording and storage of goods imported for the purpose of processing, the customs authority has the right to refuse to issue a permit. Even after the permit is issued, it may be revoked in the event of a violation.
Goods processing transactions may include both the actual processing of goods and their repair. The CCU does not limit the number of such transactions. In this case, separate transactions on behalf of the enterprise, which has been granted the processing permit, and with the consent of the customs authority may be carried out by other enterprises (Art. 150 of the CCU).
Customs processing regime in the customs territory
Such customs regime implies the processing of foreign goods without the application of non-tariff regulation of foreign economic activity, provided further re-export of processed products. In this case, placing the goods in the customs processing regime in the customs territory is subject to full conditional exemption from customs duties.
Also, it should be reminded that Resolution of the Cabinet of Ministers of Ukraine No. 295 of March 27, 2013 approved the List of goods, the placing of which in the customs processing regime in the customs territory of Ukraine is prohibited.
Processing time and control of its implementation
The processing period is set by the customs authority at the time of issuance of the permit. It depends on the duration of the goods processing and disposal of the products of their processing. In some cases, at the request of the enterprise, which has been granted a permit for goods processing, the existence of documented reasons may extend the processing time. However, the maximum processing time may not exceed 365 days.
The goods placed under the customs processing regime in the customs territory, as well as products of their processing are under customs control. The customs officers have the right to inspect business entities that have been authorized to place goods under the customs processing regime in the customs territory. The customs authorities also monitor the mandatory output of the processed products specified in the contract.
Re-export
Customs processing regime in the customs territory is completed through:
- re-export of processed products
or
- their placing in another customs regime.
During re-export, the processed products are to be declared to the customs authority with a list of Ukrainian goods used during the transaction of processing foreign goods, indicating their quantity and value. In addition, the declarant has the right to indicate in the customs declaration Ukrainian goods (except for fuel and energy) that are fully used by in the processing of imported goods.
Processed products can be re-exported in one or more lots. In addition, they do not have to be exported through the customs the goods were imported for processing.
Placing in another regime, such as import regime, is used if, under the terms of the contract, part of such goods (raw materials) is used as a payment with the processor. Such goods (raw materials) are subject to customs clearance in accordance with the customs import regime with taxation on customs payments and application of non-tariff regulation of foreign economic activity.
Another example is the sale of processed products in the customs territory of Ukraine through a registered office of a non-resident customer in Ukraine. In this case, the responsibility for declaring the processed products lies with the office, not the processor (Art. 155 of the CCU).
