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European Commission Extends Temporary Suspension of Duties on Goods to be Incorporated in or Used for Aircraft

On 18 April 2018, Council Regulation 2018/581 was published in the EU’s Official Journal. It will likely be of interest to Hong Kong traders as it temporarily suspends the autonomous Common Customs Tariff duties on certain goods of a kind to be incorporated in or used for aircraft.

While the new Regulation extends the temporary suspension currently in place under Regulation 1147/2002 it also updates, simplifies and modernises the existing provisions which should assist Hong Kong traders involved in the industry.

The Commission is of the view that the temporary suspension remains necessary in order to alleviate the administrative burden for both the economic operators in the aircraft sector and for the customs authorities of the EU Member States. In this regard the Commission considered that importations under special procedures with customs supervision such as end-use, inward-processing or customs warehousing would be too burdensome.

The temporary suspension applies to duties on parts, components and other goods of a kind to be incorporated in or used for aircraft in the course of their manufacture, repair, maintenance, rebuilding, modification or conversion.

Notably, the former regulation specified “civil aircraft” and this led to a situation where certain EU Member States considered that parts could be used equally in civil and military aircraft, while other EU Member States were of the view that parts could only be used exclusively for civil aircrafts in order to benefit from a duty suspension. For simplification and uniform application, the new Regulation allows parts intended for military aircraft to also benefit from the duty suspension as long as they are accompanied by the so-called authorised release certificate.

The Regulation requires the Commission to establish a list of the headings, subheadings and CN codes under which goods eligible for the suspension are classified. This list will provide Hong Kong traders with the specific products which will benefit from the suspension. The Commission is given until 31 December 2018 to create this list.

The suspension of customs duties is conditional on the making of an authorised release certificate EASA Form 1 or, in the case of repair or maintenance of goods that have lost their airworthiness status, on the availability of a previous authorised release certificate.

The new Regulation is in line with the Union policy in the field of aviation and builds on the process of mutual recognition of authorised release certificates between the EU and third countries. In this regard, equivalent certificates issued by third countries, such as Hong Kong, and certificates which were issued in the framework of bilateral aviation safety agreements with the Union before the establishment of the European Aviation Safety Agency should also be accepted as an alternative to the authorised release certificate.

Again, the Commission is required to establish a list of certificates which are deemed to be equivalent and is given until 31 December 2018 to do so.

Content provided by Picture: HKTDC Research
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