Under the UCC there will be some circumstances where the provision of a guarantee is mandatory.
Introduction of mandatory guarantees
Businesses may continue to operate certain regimes or procedures after 1 May 2016 without providing a guarantee until they are changed to a new UCC authorisation and approval. The regimes and procedures concerned are:
- IP
- Outward Processing (OP) with prior importation or under the Standard Exchange System
- Temporary admissions (TA) where the UCC doesn’t provide for an outright guarantee exemption
- end use
- TS
- customs warehousing
Under the UCC you’ll need a guarantee after authorisation or approval of these regimes and procedures. Businesses can apply for a reduction in the level of guarantee required (if eligible a 0{e68217344b855fcd608ed2c4c41f83644da7cd41ea524fbfa2ad06c632d3255d} guarantee or waiver may be granted).
Any new authorisations or approvals granted on or after 1 May 2016 will need to provide a guarantee immediately.
When a guarantee isn’t mandatory
A guarantee will be needed for any actual and potential debts. The only exceptions are for:
- goods imported using a TA oral declaration
- OP (unless prior importation or the Standard Exchange System is used)
- IP prior export equivalence
Guarantee Levels
The guarantees against a customs authorisation or approval (eg customs warehouse) must be enough to cover the maximum amount of customs duty applicable to the goods held in the regime or procedure at any in time.
Waivers and reductions
There’s no waiver or reduction available to businesses using individual guarantees (transaction specific guarantees).
Businesses that would like to benefit from a guarantee waiver or reduction will need to apply for a comprehensive guarantee.
Customs will assess the business eligibility for a waiver or reduction. If successful the guarantee requirement may be reduced to 50{e68217344b855fcd608ed2c4c41f83644da7cd41ea524fbfa2ad06c632d3255d}, 30{e68217344b855fcd608ed2c4c41f83644da7cd41ea524fbfa2ad06c632d3255d} or a waiver for potential debts. The customs duty deferment guarantee may be reduced to 30{e68217344b855fcd608ed2c4c41f83644da7cd41ea524fbfa2ad06c632d3255d} for AEOC businesses.
If you hold an AEOC certificate you’ll be eligible to benefit from a 0{e68217344b855fcd608ed2c4c41f83644da7cd41ea524fbfa2ad06c632d3255d} guarantee for potential debts and a reduction to 30{e68217344b855fcd608ed2c4c41f83644da7cd41ea524fbfa2ad06c632d3255d} guarantee for the deferment account.
Becoming an AEO to obtain a guarantee reduction or waiver
You’ll need an AEOC authorisation to reduce the guarantee to cover the payment of actual debts (eg reduce the level of deferment guarantee). An AEOC authorisation isn’t necessary to benefit from a waiver or reduction in the level of the guarantee for potential debts (eg goods held in duty suspension). However certain AEO criteria will still have to be met.