Special destination: customs leverage for EU companies

In the complex customs landscape of the European Union, the concept of "end-use " plays a crucial role. This specific customs regime offers a unique opportunity for companies, enabling them to benefit from advantageous conditions when importing certain goods. The aim? To support and stimulate specific business sectors within the Union. In this article, we break down the concept, explore its benefits and examine how companies can take advantage of it.

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Destination particulière: What is it and what is it for?

In the European commercial landscape, the notion of "special destination" refers to a customs procedure that allows EU companies to import certain categories of goods at preferential tariffs. It's a targeted economic strategy: the EU uses this lever to encourage companies to invest in sectors deemed essential, such as green technologies, pharmaceuticals or aerospace. By reducing customs duties on imported components and raw materials, production costs are lowered, giving European companies a significant competitive edge.

The idea is to encourage economic activities that contribute directly to innovation and sustainable growth in the EU economy. For example, a company specializing in the production of solar panels can benefit from reduced tariffs when importing silicon, an essential material for the manufacture of its products. However, the company must prove that the imported silicon is indeed intended for this specific use, to avoid abuse and ensure that the tax benefits support the intended policy objectives.

Regulatory framework and obligations

The opportunities offered by the special destination do not come without trade-offs. The EU has put in place a strict regulatory framework to ensure that companies benefit from these advantages fairly and in line with defined economic objectives. Before companies can benefit from these advantageous tariff conditions, they must obtain authorization by providing a detailed plan of the intended use of the imported goods.

Once authorization has been granted, companies must put in place rigorous monitoring procedures to ensure that every item imported under this regime is used as intended. They must also keep accurate and transparent accounts, and be prepared to present documentary evidence during customs inspections. Breaches of these rules can result in the revocation of customs benefits and the imposition of penalties, underlining the need for companies to remain vigilant in their management of goods imported under this regime.

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Advantages of the special destination system

The European Union's introduction of the special destination regime aims to create a level playing field where European companies can prosper.

Open access and pricing conditions

When a European company imports goods from third countries, these goods must normally be "released for free circulation", i.e. they become EU goods after payment of customs duties + VAT and compliance with all other applicable trade policies. However, in the context of the particular destination, this process includes significant advantages: companies can access preferential tariff conditions, which translate into duty reductions or exemptions.

Let's take a concrete example: a company importing components for the production of medical equipment can benefit from reduced customs duties if these components are not produced in the European Union and are essential to the sector. This mechanism not only supports the EU healthcare sector, but also encourages research and development in innovative fields.

Dependence on customs tariffs and tariff suspensions

The end-use procedure is closely linked to the EU's Common Customs Tariff, which defines the customs duties applicable to goods imported into the EU. In certain cases, the EU may decide to temporarily suspend these customs duties for certain categories of goods through autonomous tariff suspensions. This suspension is generally granted when the Union identifies a need for goods that are not produced in sufficient quantities in the EU, and which are crucial to the operations of a particular industry.

The special destination and autonomous tariff suspensions are complementary: while tariff suspensions reduce costs for all importers of specific goods, the special destination is aimed more specifically at companies that use these goods for a specific production process. This helps to achieve strategic policy objectives, strengthening key EU industries and promoting innovation within the European economy.

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Granting the plan

Obtaining special destination status is a precise process, requiring meticulous attention and in-depth knowledge of EU customs rules.

Application and authorization procedure

To benefit from the special destination regime, companies must follow a rigorous application procedure. This begins with the submission of an application to the competent customs authorities in their member state. The application must include detailed information on the type of goods to be imported, the intended use, and how this use aligns with the objectives of the end-use.

Documentation must be precise and complete, including technical descriptions of the goods, quantities to be imported, and an explicit undertaking that the goods will be used in accordance with the scheme. Once authorization has been granted, it is valid for a period specified by the regulations in force, during which the company must comply with all the conditions of the scheme.

Responsibilities and obligations

Companies that obtain a special destination authorization assume a significant responsibility. They must ensure that imported goods are strictly assigned to the declared uses and contribute to the objectives of the scheme. Failure to meet these obligations may result in revocation of the authorization and other financial or legal penalties.

Compliance with the conditions is monitored by the customs authorities, who may require companies to provide documented proof of the appropriate use of the goods. Companies must therefore set up an efficient tracking system, which not only enables them to manage the goods, but also to respond to any requests for information or inspection from customs.

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How the special plan works: the special destination

Day-to-day operation of the end-use system requires methodical, organized application of import and follow-up procedures.

Implementation and accounting follow-up

Activation of the end-use procedure begins with the filing of a customs declaration when the goods are imported. This crucial step officially triggers access to tariff benefits. Once this has been done, companies begin a rigorous monitoring process, using material accounting. The latter is a form of logbook detailing the trajectory and use of each imported item, thus guaranteeing adherence to the specified conditions of the regime.

Plan duration and discharge terms

The time allowed for goods to be assigned to their intended use is flexible; it must be realistic and adapted to the company's industrial realities. This period is determined by the operator himself, who assesses the time required according to the production or service process involved.

There are several ways of discharging the plan:

• By assigning the goods to their intended destination, thus proving that the commitment has been honored.
• If the goods are reallocated to a use different from that initially indicated, a regularization is necessary, which may involve payment of the duties normally due.
• Another possible outcome is the destruction of the goods, subject to the approval of the customs authorities, which may be an option when the goods cannot be allocated as intended or productively reallocated.

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New features and facilitations introduced by the Union Customs Code

The Union Customs Code (UCC), effective since May 1, 2016, has marked a significant step forward in simplifying customs procedures, including those related to the end-use procedure. The intention of the CDU is to make processes more efficient while guaranteeing the protection of the Union's financial interests.

Enhanced financial security

One of the major innovations introduced is the obligation to lodge a guarantee. This measure ensures that customs duties that would normally be due are secured, even if the goods temporarily benefit from an exemption or tariff reduction. This provides an additional layer of security for EU revenues, while offering companies greater flexibility in managing their cash flow.

Greater flexibility in the movement of goods

The CDU now allows companies to re-export goods even before they have been officially assigned to the particular destination. This provision offers welcome leeway for operators, enabling them to better respond to market fluctuations and optimize their supply chain.

Use of equivalent goods

The introduction of the concept of equivalent goods represents a significant step forward. Companies can now use goods similar to those imported under the special destination regime. This flexibility is particularly useful in industries where raw materials or components may be subject to variations in availability.

Simplified authorizations

Finally, the authorization process has been greatly simplified. From now on, a single authorization can cover all the operations of a particular destination regime holder, whether national or EU-wide. This unification of authorizations considerably reduces administrative complexity and costs for companies operating in several Member States.

These improvements introduced by the CDU are designed not only to lighten the administrative burden for businesses, but also to strengthen the legislative framework for better protection of EU finances. They testify to the European Union's ongoing commitment to modernizing the customs system and making it more efficient, while securing tax revenues and offering a more flexible and responsive framework for economic operators.

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Using online services to manage your plan

SOPRANO: For national requests

SOPRANO is the electronic system designed to manage applications for national customs authorizations. For companies wishing to benefit from the special destination regime, SOPRANO offers a simplified interface where they can submit their application, track its progress and communicate directly with the customs authorities. Here are the general steps to use it:

1. Account creation : Users must first create an account on the SOPRANO platform, providing all the information and documents required by the customs authorities.
2. Submitting the application: Once logged in, the user can complete the special destination plan application form online and submit it directly via the system.
3. Follow-up and correspondence: Applicants can track the status of their application and receive notifications of any further action or information required.

TP-CDS: For requests involving several member states

The TP-CDS (Trade Portal - Customs Decision System) service is used for applications involving several member states. It is particularly useful for companies operating in several EU countries, and requires authorization to ensure secure data exchange. Here's how it works:

1. Authorization: Companies must be authorized to use TP-CDS. This often involves demonstrating their ability to comply with IT security and data confidentiality standards.
2. Application management: TP-CDS manages end-use authorization applications for all Member States concerned, simplifying coordination between the various customs authorities.
3. Cross-border tracking: Users benefit from detailed tracking and can consult the status of their applications involving several EU countries.

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Special destination: A pillar of European competitiveness

Special destination is not just a customs concept: it's a concrete asset for European companies. By simplifying access to advantageous customs tariffs, this scheme directly supports key sectors of our economy, enabling them to develop and innovate. It reflects the EU's determination to build a dynamic economic environment where players can more easily face up to global competition, while remaining faithful to European standards and objectives.