04/03/08 - All Export Traders - No. 15/08
1. This notice is to inform you of:
- a new regulatory requirement to state the rate of export refunds on export declarations and T5s; and
- changes to the rules concerning physical controls and substitution checks carried out by Customs.
2. These changes will come into effect from 1 April 2008.
3. To assist Customs with the selection of declarations for physical and substitution checks, Customs need to be aware of the rate of export refund at stake. Article 8 of Commission Regulation (EC) No. 800/1999 has been amended and will require exporters to state the rate of export refunds on their export declaration and control copy T5. Member States can exempt exporters from this requirement where a system is already in operation which provides Customs with the same information. To encourage traders to provide accurate information, a new penalty will be introduced into Article 51 of Commission Regulation (EC) No. 800/1999.
4. The UK is able to exempt exporters from the requirement to state the rate of refund on their export declaration because an electronic system is in operation which enables UK Customs to establish a rate for the goods concerned. However this information is unlikely to be available to customs authorities in other Member States. Therefore, if you are exporting via another Member State, you must state the rate of export refund in euros per unit (100kgs) of products or goods in box 106 of the control copy T5 (or its equivalent). If there is insufficient space in box 106 of the T5, you must attach a line by line breakdown of the applicable rates to your T5. If you are using a T5 continuation (bis) form, you should state the rate of refund in box 104.
5. If you have advance fixed the refund rate on your export licence, advance fixing certificate or refund certificate, this is the rate to declare. If the export refund is not advance fixed, you can use information on previous refund payments within the last 12 months for the same products or goods. It is advisable, however, to declare the correct current rate as this could differ significantly from a historical one.
6. If your export is covered by more than one advance fixing certificate you must give the breakdown of the rate against each advance fixing certificate.
7. When stating the rate for Annex I processed products (for example jam), you must state the adjusted rate taking into account the % of the ingredient in the product for which refund is being claimed. Please see the following example.
CN code exported: 2007 9110 -9000-0000
Quantity of product: 5202 kgs
Quantity of ingredient: 1872 kgs
Ingredient code | Percentage of sucrose per 100kg
(from SD code) | Rate in €/1% sucrose x 100kg of net product |
1702 9095 9900 | 66.57 | 0.2458 |
Step 1: calculate the adjusted rate
0.2458 x 66.57 = 16.36
Step 2: calculate the % of the ingredient within the product
1872 ÷ 5202 x 100 = 35.99 %
Step 3: calculate the % of the rate
16.36 x 35.99% = 5.89
Therefore the rate you must state on your T5 is
5.89
8. When stating the rate for non Annex I goods, you must state the total calculated rate per unit (100kgs) of the
final good. Please see the following example:
Recipe code: 123456
Net weight: 13440 kg
Ingredient code | Percentage of ingredient per 100kg | Rate in € per 100 kg | Rate of ingredient in € per 100 kg |
17019910-00 | 44.72 | 18.13 | 8.11 |
04022119-00 | 12.75 | 00.00 | 0.00 |
04050000-02 | 2.33 | 86.40 | 2.01 |
The calculated rate of the final good is 8.11 + 0.00 + 2.01 = 10.12
Therefore the rate you must state on your T5 is
10.12
The rates should be itemised line by line to match your export declaration.
9. Where the amount of refund applicable is less than 1,000 euros you do not need to state the export refund rate. In this case you must put the following statement in box 106 of your T5:
“Refunds less than EUR 1,000”
10. If your goods are exiting the Community via Customs authorities in other Member States, you must declare the rate of refund or the statement “Refunds less than EUR 1,000” on your T5 or equivalent, irrespective of whether you are exporting to an entitled destination.
11.
If you do not state the rate of export refund on your T5 then the rate will be deemed to be zero when considering the application of a penalty.
12. In cases where you have declared the statement “Refunds less than EUR 1,000” and the actual amount of refund due is higher than 1,000 euros, the rate will again be deemed to be zero when considering the application of a penalty.
13. If the amount of export refund calculated using the rate you have given is found to be less than the actual amount applicable, your export refund will be reduced depending on the amount of the difference, as follows:
– 10% of the difference between the calculated refund and that applicable to the actual export if the difference is more than 1,000 euros;
– 100% of the difference between the calculated refund and that applicable to the actual export if you indicated that the refund would be less than 1,000 euros and the actual refund is more than 10,000 euros;
– 200% of the difference between the calculated refund and that applicable where you intentionally provide false information.
14. These penalties will not apply if you can prove that the difference was due to force majeure, obvious error, or is based on correct previous payment information (but see paragraph 5 above).
15. To avoid ‘double jeopardy’ these penalties will not apply where an administrative penalty under Article 51 (1) of Commission Regulation (EC) No. 800/1999 is applied to the same transaction.
16. Changes have been made to Commission Regulations (EC) No 800/1999 and (EC) No 2090/2002 concerning the physical controls and substitution checks carried out by Customs on export products for which an export refund is claimed.
17. Article 5, paragraph 7 of Regulation 800/99 states that when products which are subject to a claim for export refunds are exported, Customs must be able to make physical checks on goods for transport to the office of exit from the customs territory of the community. A new requirement has been introduced which requires the products concerned to be identified before the indicated time for the commencement of loading. It is not envisaged that this change will affect activities in the UK as this has been a long standing requirement.
18. Depending on local conditions, it may be necessary for Customs to apply a seal to your containers. Before affixing seals, Customs may need to carry out a visual conformity check between your products and the export declaration. In the UK, this is only likely to affect exports of goods which will transit the Community for exit via another Member State.
19. At the customs office of exit from the community the seal on your export consignment may be checked and/or a substitution check carried out. In certain circumstances the substitution check may require partial or full unloading of the goods.
20. You will find details of these changes in Commission Regulation (EC) No. 159/2008 published in Official Journal L48. Copies may be obtained from Stationery Office bookshops and accredited agents, or ordered from the Stationery Office website
(www.tso.co.uk). You can also access Official Journals electronically by visiting the Commission’s website at (
http://eur-lex.europa.eu/en/index.htm).
Please note that the Rural Payments Agency cannot provide any warranty as to the accuracy or completeness of the Europa website. Whilst every care has been taken in producing this guidance, the regulation as published is definitive.
21. If you have any enquiries concerning section A of this notice, please contact Trader Scheme Operations Policy section of the Rural Payments Agency Newcastle on the following:
| Suzanne Ridley | 0191 226 5249 |
| Julia Murch | 0191 226 5238 |
22. If you have any enquiries concerning section B of this notice, please contact Mike Davies at HM Revenue and Customs on the following:
Note: Please ensure your queries are directed to the relevant organisation.
Page published: 14 July 2011