Customs warehouse
Also known as: warehouse, bonded warehouse
A customs warehouse is an authorised storage place where non-Union goods can lie without import duties and VAT being due. The levy is deferred until the moment the goods leave the warehouse for free circulation.
What does a warehouse give you?
The main advantage is liquidity: you pay the duties and the VAT only when the goods are actually sold and exited, not on arrival. At high stocks that saves working capital at once. A shipment that lies three months before it is delivered costs no levy in that period. In addition goods can be re-exported from a warehouse without duties ever having been paid. For distribution centres that supply both inside and outside the EU that is the whole reason the procedure exists. Half a container to the UK, half to Germany: only the German half becomes IMA, the British half is re-export. The procedure is not an exemption, it is deferral under supervision. Customs can check the stock at any moment, and a difference that is not explained is a customs debt over the missing goods. The advantage exists only as long as the records close.
Which kinds of warehouse are there?
The public warehouse type I and II is meant for storage of goods of third parties; the private warehouse is for own goods of the authorisation holder. Under type I the responsibility for the goods sits with the authorisation holder, under type II with the person who places the goods. That distinction decides who is liable if stock does not match. A logistics provider who stores for several principals sits in the public variant. An importer with own stock in their own warehouse sits in the private. The authorisation, the guarantee and the records requirements are heavy in both cases, but the liability at a difference points to a different party. The authorisation hangs on the EORI number. On a merger or a new company it does not travel of its own accord. Declarations for placement under a number that no longer carries the authorisation are refused. Check the authorisation as often as the EORI number, not only at the application.
What records does Customs ask for?
The stock records must at any moment match the physical stock, per declaration for placement and per exit. Every movement must be traceable to a declaration. A difference that cannot be explained leads to a customs debt over the missing goods. A closing link between the WMS and the customs records is therefore not a luxury but an authorisation condition. Customs looks at that match at a control. Stock movements that only sit in the warehouse system and not in the customs records, or the other way around, are a finding. At structural differences the authorisation comes into question. A manual monthly reconciliation rarely meets that requirement. Every placement is an STO, every exit to free circulation an IMA, every re-export a re-export declaration, every transport to another member state a T1. The records are the sum of those declarations plus the physical stock. Anyone who only keeps the WMS has no customs records.
What can you do with the goods in a warehouse?
Usual forms of handling are allowed: repacking, sorting, labelling, taking samples, mixing similar goods and treatments that keep the goods in being. The list stands in annex 71-03 to the implementing regulation. What is not on that list is not allowed under the warehouse authorisation. Genuine processing, assembling or working is not allowed. For that the inward processing procedure exists, which has other conditions and another guarantee. An assembly of parts into an appliance in the warehouse is not labelling, it is processing, and without that authorisation a removal from supervision. Changing the destination is allowed. Goods that lie in the warehouse can still go to free circulation, to another member state under T1, or back to a third country as re-export. That flexibility is besides the deferral of payment the second reason distribution centres use the procedure.
What does Customs ask at a control?
At a control on a warehouse the stock records are laid against the physical stock. Every declaration for placement must be findable, and every exit must have a declaration. Customs counts, weighs or scans, and asks for the movements around it: what came in yesterday, what went out this morning. Customs also looks at the match with the WMS. Stock movements that only sit in the warehouse system and not in the customs records, or the other way around, are a finding. At structural differences the authorisation comes into question. A one-off count difference that is explained is something other than a system that does not close. The practical requirement is therefore a closing link between warehouse and customs, in which every movement is traceable to a declaration and every difference is explained. Anyone who only builds that link when the notice of the control is there, builds too late.
How do you enter and leave the warehouse?
Placement goes with an STO, the declaration for placement in the warehouse. The goods stay under suspension; nothing is levied. Exit to free circulation goes with an IMA, in which the duties and the VAT are established over the goods that actually go out, at the tariffs and the value of that moment. Exit to another member state goes with a T1. Re-export to a third country goes with a re-export declaration, and if inland transport is still needed, with a T1 behind it. Each direction has its own declaration. Goods that leave the warehouse without one of those three have been removed from supervision. The unloading permission or the permission to unload is on arrival under T1 the start of the placement. Without that permission unloading is not allowed, and without an STO after it the T1 is not discharged. The chain is T1, unloading, STO, stock. Skip a link and the previous one stays open.
Which guarantee and authorisation conditions belong with it?
You apply for the customs warehouse authorisation at Customs, with a description of the location, the records and the goods flows, plus a guarantee that covers the outstanding risk. Customs assesses whether you can handle the records, not only whether the building can be locked. The guarantee is usually a comprehensive guarantee. The amount follows from the average stock under suspension, not from the peak of one container. If the stock rises without the guarantee following, there is a shortfall. That shortfall is at a control a finding, and at a removal a gap Customs recovers from the holder. In principle goods may lie in the warehouse without a time limit. Customs can set a period in special cases, but the procedure has no standard maximum duration. What does have a time limit is the T1 with which the goods arrive: that must be discharged by the STO within the days set. A warehouse is no excuse for an open T1.