Preferential trade deal between the EU and The Republic of Singapore (CIP16/2019)

Find out about the EU and The Republic of Singapore free trade agreement and the preferential arrangements.

Introduction

This Customs Information Paper (CIP) introduces the EU and The Republic of Singapore free trade agreement, specifically the preferential arrangements. The agreement comes into force on 21 November 2019 refer to Official Journal L293 14 November 2019.

An outline of the preferential arrangements is included in this CIP together with details on how to declare preferential imports on the Customs Handling of Import and Export Freight (CHIEF) system.

Full details on the preferential arrangements can be found within the Official Journal L294 14 November 2019. The rules of origin and origin procedures are set down in Protocol I to the agreement (page 659). All page numbers shown in this CIP refer to this document.

Background

As part of this agreement certain goods, either originating in The Republic of Singapore for import into the EU or originating in the EU for export to The Republic of Singapore, may be eligible for preferential duty rates in the importing party if the required conditions are met, the details are explained in this CIP.

The agreement has now been ratified by The Republic of Singapore government and the EU.

Elimination and reduction schedules for imports to the EU and exports to The Republic of Singapore

The elimination and reduction schedules for duties on goods imported to the EU and exported to The Republic of Singapore are contained in Annex 2-A of the Official Journal L293 14 November 2019 beginning on page 129.

‘Party’ means a signatory to the agreement such as the EU or The Republic of Singapore.

 

Elimination of Customs Duties

1. Pursuant to Article 2.6 (Reduction or Elimination of Customs Duties on Imports), each party shall eliminate all Customs Duties imposed on goods originating in the other party as from the date of the entry into force of this Agreement, except as otherwise provided in the respective party’s Schedules included in this annex.
2. The following staging categories apply to the elimination of Customs Duties by each party pursuant to Article 2.6 (Reduction or Elimination of Customs Duties on Imports) for those Customs Duties not eliminated at the entry into force of this Agreement:
2a Customs duties on originating goods provided for in the items in staging category ‘3’ in a party’s Schedule shall be removed in 4 equal annual stages beginning on the date this Agreement enters into force, and such goods shall thereafter be free of any Customs Duty.
2b Customs Duties on originating goods provided for in the items in staging category ‘5’ in a party’s Schedule shall be removed in 6 equal stages beginning on the date this Agreement enters into force, and such goods shall thereafter be free of any Customs Duty.
2c No obligations under this Agreement regarding Customs Duties shall apply with respect to items in staging category ‘X’.
3. In relation to goods under a particular tariff code, the base rate of the Customs Duty and the staging category for determining the interim rate of the Customs Duty at each stage of reduction are indicated for that tariff code in each party’s Schedule.
4. For the purposes of paragraph 2, rates of Customs Duties in the interim stages shall be rounded down, at least to the nearest tenth of a percentage point or, in the case of the Union, to the nearest euro cent, where applicable.
5. For the purposes of this Annex and a party’s Schedule, each annual reduction shall take effect on the first day of the relevant year as defined in paragraph 6 of this Annex.
6. For the purposes of this Annex:
6a ‘Year one’ means the 12-month period beginning on the date this Agreement enters into force.
6b ‘Year two’ means the 12-month period beginning on the first anniversary of the entry into force of this Agreement.
6c ‘Year three’ means the 12-month period beginning on the second anniversary of the entry into force of this Agreement.
6d ‘Year four’ means the 12-month period beginning on the third anniversary of the entry into force of this Agreement.
6e ‘Year five’ means the 12-month period beginning on the fourth anniversary of the entry into force of this Agreement.

The schedule for imports to the EU are shown in Appendix 2-A-1 of the Official Journal L293 14 November 2019 (page 130).

The schedule for exports to The Republic of Singapore are shown in Appendix 2-A-2 of the Official Journal L293 14 November 2019 (page 240).

For example, the schedule for the Union states natural honey commodity code 0409 0000 is in staging category 3. This means the duty rate will be reduced in four equal annual stages beginning on the day the agreement comes into force, after which the good will be free of duty.

The base rate of natural honey is 17.3% so from 21 November 2019 (year one) the rate will be 12.97%, from 21 November 2020 (year two) 8.65%, from 21 November 2021 (year three) 4.32% from 21 November 2022 (year four) nil.

These duties will apply from the date this agreement comes into force to consignments that satisfy all of the conditions to qualify for preference, details of which are shown further on.

Rules of origin

In order to claim preferential duty under this agreement a product must be deemed as originating in the territory of the exporting party, in accordance with the rules of origin and origin procedures which are defined in Protocol I ‘concerning the definition of the concept of ‘originating products’ and methods of administrative co-operation’ (page 659). The introductory notes to product specific rules of origin can be found in Annex A (page 675) and the rules in Annex B (page 681) of the Official Journal L293 14 November 2019.

Proof of origin

Entitlement to preference duty shall be based on an origin declaration that the product is originating made out by the exporter.

The text for an origin declaration is in Annex E to Protocol I of the Official Journal L293 14 November 2019 on page 746.

The origin declaration must be provided on an invoice, or any other commercial document (excluding a Bill of Lading), describing the originating product in sufficient detail to enable its identification. It is valid for 12 months from the date it was made out.

Origin declaration for exports to The Republic of Singapore

Only approved EU exporters may issue origin declarations for consignments with a value exceeding €6,000 and they must include their approved exporter number (as the exporter reference number) in the origin declaration. As required by EU Regulation 2015/2447 Article 67(4).

Any EU exporter may issue origin declarations for consignments with a value not exceeding €6,000.

Approved exporters

To apply to become an approved exporter you’ll need to apply for approved exporter status.

If you are already an approved exporter you should contact the HMRC office that issued your authorisation requesting it be extended to enable export to The Republic of Singapore.

Origin declarations for imports from The Republic of Singapore

All origin declaration made out by an exporter in The Republic of Singapore must include their Unique Entity Number (UEN) regardless of the value.

UEN’s can be checked on the Singapore Customs Authority website.

For origin declarations for consignments with a value exceeding €6,000 in Single Administrative Document (SAD) box 44 enter document code N864 (invoice declaration or origin declaration made out by any exporter on the invoice or any other commercial document (excluding the Bill of Lading) for originating goods where the harmonised declarations for total value exceeds €6,000).

For origin declarations for consignments with a value not exceeding €6,000 in SAD box 44 enter document code U162 (invoice declaration or origin declaration made out on invoice by any exporter or any other commercial document (excluding the Bill of Lading) neither in the framework of Generalised Scheme of Preference (GSP) nor EUR-MED for a total value of originating harmonised declarations for products not exceeding €6,000).

Status codes are defined in the UK Tariff Appendix C10 and document codes in appendix C11.

CHIEF

The preferential rates provided for within the agreement will be available on the CHIEF system on 1 December 2019.

Payment and repayment of duty

The EU TARICUK Online Trade Tariff and CHIEF can be used to check the most up to date duty rates. In the meantime, there’s a risk you could overpay duty on products eligible for preference under the new arrangements.

If you imported and released to free circulation goods eligible for preferential duty on or after 21 November 2019 and paid the full duty rate shown in the tariff then you may make a claim for repayment by filling in the online form C285 import and export: application for repayment or remission.

Imports released to free circulation which are not eligible to preferential duty must pay the full duty and will be subject to post clearance action.

Contact details

Any questions regarding the implementation of these preferential arrangements in the UK should be emailed to: dutyliability.policy@hmrc.gov.uk.

Issued on the date 18 November 2019 by Customer Strategy and Tax Design, Customs Directorate, HMRC.


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