Outward processing. Customs procedure with special features

Outward processing means that goods from the European Union (Community products) are exported temporarily from the European Community into a third country, where they are processed or worked up or restored (finished) and afterwards reimported again.

Outward processing, therefore, is the economic counterpart of inward processing. Outward processing is contributing towards the international division of labour. Not only manufacturing methods in countries with low income level are used in this connection, but also foreign know-how is shared to favourable customs conditions.

When declaring the (re-)imported goods, you have to take into account that they are containing products that have their origin in the European Union. On account of this the goods are put into free circulation with a complete or part tax exemption on import duties.

There are two methods to calculate the import tax in this connection:

  • Differential method: In this case the fictitious import duties for the goods that were temporarily exported are deducted from the import duties for the processed product. The differential amount is the customs tariff to be raised.
  • Value added method of taxation: In this case the customs tariff is calculated on basis of the processing costs. The materials that have their origin in the EU are left out of consideration.

Many disputes can arise for the question of outward processing: disputes on finding the correct basis for the assessment of the import duties to be raised, on the classification of the imported goods or on approving the used method or not. Assessments issued by the authorities should be verified in case of doubt and objections should be addressed to the principal customs office.

Our lawyers specialized in customs law from Hamburg are happy to assist you.