The end-use license allows European importers to benefit from tariff preferences when importing certain goods. It is one of the five specific regimes set up in the European Union.
💡 What is the end-use license?
The end-use license regime was set up by the European Union to favor certain sectors of activity via exemptions or suspensions of customs duties.
More concretely, this system allows the importer to benefit from a reduction or even a suspension of customs duties on certain goods, as long as they are assigned to the use specified in the authorization. For example, the assembly of certain parts on specific goods may be subject to the special destination (civil aircraft, computers, etc.). It may also concern the suspension of duties and anti-dumping taxes* for goods whose entry into the EU is limited (e.g. bicycle parts made in Asia, Chinese solar glass used by the photovoltaic industry,...).
🤔 Did you know that?
The European Union applies anti-dumping and countervailing measures on certain goods to restore fair competition between products imported from third countries and those manufactured in the Union. The aim is not to penalize importers or to increase the cost of imported products but to fight against practices considered unfair by the WTO.
⚠️ The end-use is only applicable to certain goods designated by the EU. Details for each customs code are available on the EU database which allows consultation of the measures in force. Also, this scheme can only be applied for customs clearance at the customs offices specified in the importer's application and mentioned on the authorization.
💡 Why apply for an authorization as a European importer?
- To benefit from a reduction of costs and in particular the amount of duties and taxes paid.
- Reduce potential controls when importing restricted goods critical for the production.
- Benefit from the application of this regime in all EU countries included in the authorization.
- Be able to transfer their goods within the EU freely once cleared
💡 What are the requirements and implications for importers?
a) Prerequisites to apply to the customs authorities.
- be established in the customs territory of the EU
- provide the necessary information proving the implementation of operations by the importer
- provide a guarantee to cover the customs duties in question in the event that the regime rules are not respected
In order to benefit from this special regime, the importer can contact the customs office of his country. If the request concerns several European Union countries, then the request must be made on the dedicated platform: the European portal TP-CDS.
b) Implications for importers once the authorization is in place.
Once granted by the authorities, the authorization includes the nature of the goods (nomenclature and customs code), the operations that the importer intends to carry out and the quantities foreseen and authorized in this framework. It is valid for a period of 5 years.
Importers must then monitor the correct application of the regime:
- An import declaration (IMA) must be made for each shipment in order to place the goods under the regime.
- The importer is required to keep track of the accounts and the use of the scheme: this is called "bill of discharge" and is mandatory to ensure that the announced and authorized quotas are respected.
- The importer must ensure that the goods are allocated within a given timeframe, which takes into account the production process, known as the "period of discharge".
- Once the goods have been assigned to their destination, i.e. used within the scope of the authorization, the procedure is considered as "discharged".
💡 Our tips for importers looking to get started:
- Identify the relevant customs codes (known as HS codes)
- Carefully choose the European customs offices on which to place your operations
- Get in touch with local chambers of commerce to get advice to set up guarantees
- Anticipate the "bill of discharge" which is mandatory
🚲 A concrete case of application of the end-use license for European bicycle manufacturers:
- The boom in bicycle production and sales in recent years has been accompanied by an increase in imports of finished bicycles and spare parts from Asia. In order to control the entry of these parts into the market and to restore fair competition, the EU has implemented anti-dumping measures on some of these goods. However, many manufacturers were importing these parts not to resell them at low cost and flood the European market, but to assemble their bicycles and resell them on the European market or re-export them. Thanks to the end-use authorization, manufacturers can benefit from the elimination of the anti-dumping tax that applies to a certain type of parts (48.5%) as well as a suspension of customs duties on some others. This allows them to import and then produce the bicycles under so-called normal and regulated conditions.
For any questions about the end-use license, you can contact josephine@ovrsea.com.
