From the Accession date, both customs authorities and importers/exporters in Romania will need to conform to the EU customs legislation. The removal of customs barriers will create opportunities for quicker transportation of goods, new logistics planning and cash flow savings. Customs barriers will be replaced by additional administrative barriers, mainly in the area of indirect taxes. In particular, the VAT treatment of supplies of goods and services between different Member States will change significantly. |
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| Many importers in Romania who are currently utilizing various customs procedures will have to radically rethink their customs planning and structuring from the Accession date. Companies who use Inward Processing Relief (IPR), Customs Warehousing and other temporary customs regimes, will find that these procedures will be replaced by new EU customs procedures and legislation. Therefore, in order to continue using these regimes, the importers/exporters have to be authorized under the new rules and regulations. |
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| As the EU forms a Customs Union applying common customs regulations, significant changes are expected with regard to the level of duties applicable. For the majority of those still importing products and materials from outside the EU after accession, the demise of the national customs facilities is a challenge. While for part of goods duties may decrease, for other goods duty rates may increase by the application of the EU tariff. This only makes it more important to plan ahead in order to minimize the impact that Accession will have on each business. |
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| In order to maximize the opportunities for customs duty planning upon Romania 's accession to EU, it is essential to identify the particular areas which will affect your business. We have identified such key areas and we briefly detailed some of them below: |
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| Preferential origin |
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| Where origin certificates have been incorrectly issued, the EU authorities can demand recovery of the full rate of customs duty applicable to such goods from importers for up to three years retrospectively. In some cases, importers have faced large penalties despite them not being to blame for the error. Until recently, defenses against imposition of duty and penalties for the EU importers were limited. The importer bears sole responsibility for any errors in cases the mistakes are due to the other parties. Therefore observing the rules of origin will be a critical issue for companies in the enlarged EU. One of the tools to be used will be applying for the binding EU customs origin decisions (BOIs) in respect of their transactions across borders; |
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| Free trade agreements |
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| All free trade agreements between Romania and third countries (e.g. CEFTA, Moldova , Serbia & Muntenegro etc.) will be terminated on the Accession date and will be replaced with the standard agreements signed by the EU with third countries. This may create an increased cost in trading with some third countries, or may generate opportunities depending on the origin and the level of duties of the products subject to transactions; |
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| Tariff classification |
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| If certain goods may be classified under several tariff codes having different duty impact, importers may need to determine which is the correct tariff code to be used. Such a tool may be the application of Binding Tariff Information, through which importers can obtain rulings from the customs authorities on the correct customs classification of goods. Another important aspect related to BTIs is that once a BTI obtained in one Member State , it can be invoked for the purpose of declaring goods in the other Member States. |
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| Temporary regimes |
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| Some of the temporary customs regimes will cease to exist as of the Accession date. Companies need to plan for their discharging or replacement by EU compatible customs arrangements. Some of the Inward and Outward Processing Relief Schemes arrangements (i.e. those with partners located into EU countries) will become obsolete. Consequently, they will need to be replaced by appropriate customs planning tools, such as Processing under Customs Control; |
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| Free warehousing |
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| Free warehousing is a flexible procedure that can be used by companies in order to improve cash flow, whereby imported goods can remain in a customs warehouse for months/years, without creating a liability for customs duty or import VAT. It is also possible to revalue goods already in a customs warehouse as long as there is a commercial justification. Depending on the economic justification, importers may legitimately reduce the duty liability. |
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| Single European Authorisation |
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| It has recently become possible in the EU to secure what are called “Single European Authorisations” (SEA) to complete all customs formalities relating to import and exports into and out of the EU at a single site within the EU. One example of an SEA is to obtain a licence for a cross border free warehouse. Goods can then be stored at several EU locations and declarations and reporting made to one customs authority for all bonded warehouse activity. The trade-off for this increased flexibility does not have to be overlooked: an increased level of auditing by the Customs authorities to ensure compliance. |
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| How we can help you? |
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| It is important for all companies trading in Romania to analyze the customs regulations and procedures that will come into force on Accession date, so that they are able to take immediate advantage of the enlarged single market after this date. |
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| In response to the need to prepare companies operating in accession coun tries for changes relating to EU integration, w e, at PricewaterhouseCoopers, are committed to assist our clients in the preparing process so that they would be able to take immediate advantage of the new environment within the context of the single market after the Accession date. |
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| Our services will cover, but they will not be limited to the following: |
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Customs–driven business re-structuring; |
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Assistance in discharging/replacing of customs procedures initiated before Accession; |
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Compliance services; |
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Assistance in obtaining Single European Authorisation |
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Assistance in obtaining BTI's and BOI's; |
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Accession impact analysis (transitional and permanent measures); |
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Assistance in obtaining tariff suspensions (quotas, ceilings); |
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Assistance in the litigation process with the customs authorities; |
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Advice on specific accession issues (pre-accession, transitional, post-accession measures); |
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Specialised training for your staff, ensuring that your personnel in Romania are fully trained on |
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EU legislation. |
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| For further information please contact one of our experts in the enclosed listing or your usual PricewaterhouseCoopers representative. |
