UT Neutral citation number: [2025] UKUT 176 (TCC)
UT (Tax & Chancery) Case Number: UT/2023/000087
Upper Tribunal
(Tax and Chancery Chamber)
Hearing venue: Rolls Building
Fetter Lane
London
Heard on: 4 and 5 March 2025
Judgment date: 06 June 2025
CUSTOMS DUTIES - Union Customs Code - importation of civil aircraft - retroactive authorisation for end-use relief pursuant to Article 172 Commission Delegated Regulation (EU) 2015/2446 - FTT directing a further review of HMRC's refusal to grant authorisation - directions given by the FTT for the purposes of that review - whether the FTT erred in finding that the application was not for the renewal of an authorisation for the same kind of operation and goods - whether the FTT erred in its approach to "exceptional circumstances" - equal treatment - whether the FTT erred in failing to direct that HMRC must deal with the appellant's application consistently with end-use applications by other operators and in accordance with guidance as it stood at the time of the application.
Before
JUDGE JONATHAN CANNAN
JUDGE NICHOLAS PAINES KC
Between
DHL AIR (UK) LIMITED
Appellant
and
THE COMMISSIONERS FOR HIS MAJESTY'S
REVENUE AND CUSTOMS
Respondents
Representation:
For the Appellant: Jeremy White, counsel instructed by KPMG LLP, and Christopher Leigh of KPMG LLP
For the Respondents: Mark Fell KC, instructed by the General Counsel and Solicitor for His Majesty's Revenue and Customs
DECISION
(1) The Decision whereby end-use authorisation was refused.
(2) A subsequent post-clearance demand for the customs duty.
(3) A subsequent decision by HMRC to refuse an application by the appellant for repayment of the customs duty on the grounds of equity.
(a) there is a proven economic need;
(b) the application is not related to attempted deception;
(e) no authorisation with retroactive effect has been granted to the applicant within three years of the date on which the application was accepted;
(h) where an application concerns renewal of an authorisation for the same kind of operation and goods, the application is submitted within three years of expiry of the original authorisation.
116. In sum, although it is quite clear, as a practical matter, why HMRC never made a decision on the appellant's 2015 application to renew its end-use authorisation - both sides knew what the answer would be - HMRC's failure to do so appears to be at odds with CCC article 6. I do not therefore consider that no reasonable panel of commissioners could conclude that the circumstances were exceptional, or that such a conclusion would be "perverse". But the opposite conclusion would also be within the scope of "reasonableness"...
95. In my view the "UCC authorisation vs CCC authorisation" point turns on the meaning of the phrase, "renewal of an authorisation." I understand HMRC's essential argument to be - to renew an authorisation means to grant a new authorisation of the same kind as the old one; and UCC authorisations are different from CCC authorisations. In my view, this is the correct reading of this phrase: the requirements for end-use authorisation under the CCC were similar in many ways to, but materially different from, the requirements for end-use authorisation under the UCC. Consistent with this (and as mentioned previously), although recital (1) to the UCC refers to itself as the CCC "recast", it also states that this was as a result of a number of amendments having to be made to the CCC.
...
103. It follows that, in response to agreed issue 2c, the appellant's 2017 application for end-use authorisation did not qualify as a renewal application under article 172.3 DA.
102. Having concluded that the appellant's application did not fall within article 172.3, as it did not concern "renewal of an authorisation", it is strictly unnecessary to consider whether the 2017 application concerned the "same kind of operation and goods" as the appellant's "old" authorisation. However, as the point was argued at the hearing, my view, in brief, is that whilst the 2017 application and the "old" authorisation concerned the same kind of goods, they did not concern the same kind of operations: the geographical scope of end-use operations in the former ("Intra EU, Trans Continental (EU-USA & EU-BAH)") was materially different to that of the latter (East Midlands Airport - see [65] above).
109. The appellant submitted that the circumstances of its 2017 application for end-use authorisation were "exceptional" because of:
(1) the nature of the relief for aircraft;
(2) the changes of law in relation to the relief for aircraft;
(3) the different application of the law by different member states;
(4) the end-use authorisation application made by the appellant on 30 March 2015;
(5) HMRC's failure to make a decision on that application;
(6) the proposal made by the appellant (in its 5 May 2017 letter); and
(7) proposals made by the appellant subsequent to HMRC's decision.
110. The starting point for this analysis is that article 172.2 DA comes into play only where the customs authority has decided to grant an authorisation - in this case, the authorisation sought by the appellant on 4 April 2017 - with retroactive effect. Hence, when analysing article 172.2 DA, that has to be taken as a "given". The question is whether the retroactive effect must be granted from (no earlier than) 4 April 2017 (per article 172.1 DA), or whether it may be granted from as far back as 4 April 2016 (per article 172.2 DA). This depends on whether there are exceptional circumstances or not.
111. Items (1), (2), (3) of the appellant's list above are, like the circumstances discussed in Unipack, descriptions of customs legislation with which the appellant (like everyone else in its circumstances) was required to comply: although Unipack is not binding on me, I have had regard to it and consider it correct in finding that such things are not "exceptional circumstances" in the context of allowing a further one year of retroactive effect. As the European court said, such an interpretation would set non-compliant operators at an advantage over compliant ones.
112. I cannot see that items (4) and (6) of the appellant's list answer to the expression, "exceptional circumstance"; and item (7), even if it did, post-dates HMRC's decision.
113. Item (5) of the appellant's list is the only one capable of answering to the expression, "exceptional circumstances".
114. However, in my view, it is outside the scope of the tribunal's s16(4) FA 1994 jurisdiction for me to make a findings as to whether or not this circumstance is "exceptional" - that is a matter for HMRC's administrative discretion, subject to the tribunal's supervisory jurisdiction, if, upon a further reviewed ordered by the tribunal, HMRC were to decide to grant authorisation (and so come to consider whether it should have retroactive effect). The most I can do is decide, having made full findings of fact, whether no reasonable panel of commissioners could conclude that item (5) of the appellant's list comprises exceptional circumstances.
101. Leaving to one side the point that the immediate issue here is the interpretation of customs legislation, rather than the susceptibility of an administrative act to judicial review, it has not been shown here that HMRC have treated the appellant differently to other operators in their application of the customs legislation at issue; indeed, on the interpretation of "renewal of an authorisation" which I prefer for the reasons above, no such different treatment would seem likely, given that there was a coherent regime for transitioning from CCC authorisations to UCC authorisations.
ORDER OF THE TRIBUNAL PURSUANT TO S16(4)(B) FINANCE ACT 1994
144. HMRC are required to conduct, in accordance with the following directions, a further review of their decision on the appellant's 4 April 2017 application for end-use authorisation.
145. HMRC are directed, when conducting their further review, to have regard to relevant findings of fact and analysis of law in this decision, being:
(1) as regards findings of fact: [25-34], [35(6)], [53-55], [58-59], [61-66], [68], [70-79], [115] and [122] above; the agreed facts; and Appendix 2 below; and
(2) as regards analysis of law: [35(3)], [40-50], [80-87], [92-103] and [105-113] above.
(1) The FTT's conclusion of law at [95] and [103] that the 2017 Application did not qualify as the renewal of an authorisation.
(2) The FTT's conclusion at [102] that the 2017 Application did not concern "the same kind of operation and goods" as the expired CCC authorisation.
(3) The FTT's conclusions at [109] - [113] as to what matters could and could not amount to exceptional circumstances for the purposes of Article 172(2) UCC DA.
(1) In concluding at FTT [102] and [103] and in directing at FTT [145(2)] that the appellant's 2017 Application did not qualify as the "renewal of an authorisation for the same kind of operation and goods" within Article 172(3) UCC DA.
(2) In limiting the scope of what could amount to exceptional circumstances for the purposes of Article 172(2) UCC DA.
(3) In failing to direct that on the further review HMRC must treat the 2017 Application consistently with the way it treated other end use applications in 2017 and deal with it on the basis of any guidance as it stood at that time.
Article 172
1. Where the customs authorities grant an authorisation with retroactive effect in accordance with Article 211(2) of the Code, the authorisation shall take effect at the earliest on the date of acceptance of the application.
2. In exceptional circumstances, the customs authorities may allow an authorisation referred to in paragraph 1 to take effect at the earliest one year, in case of goods covered by Annex 71-02 three months, before the date of acceptance of the application.
3. If an application concerns renewal of an authorisation for the same kind of operation and goods, an authorisation may be granted with retroactive effect from the date on which the original authorisation expired...
52. ... the repayment or remission of import and export duties, which may be made only under certain conditions and in cases specifically provided for, constitutes an exception to the normal import and export procedure and, consequently, the provisions which provide for such repayment or remission are to be interpreted strictly.
45. The authorisation for the end-use procedure may only be granted under certain conditions and that procedure thus constitutes an exception to the general customs rules. As such, the rules regulating that procedure should be interpreted strictly. The granting of an authorisation with retroactive effect pursuant to Article 211(2) of the UCC and Article 172(1) of the UCC DR likewise constitutes an exception to the general rule for the granting of authorisations, which is subject to specific conditions. The granting of an authorisation with retroactive effect from the date on which the original authorisation expired pursuant to Article 211(2)(h) of the UCC and Article 172(3) of the UCC DR is a yet further exception to the general rules for authorisations with retroactive effect, which is subject to additional conditions. An expansive interpretation of the application, ratione temporis, of those rules does not, therefore, appear justified.
40. It must be observed that the inward processing procedure in the form of a system of suspension constitutes an exceptional measure intended to facilitate the carrying-out of certain economic activities. That procedure involves the presence, on the customs territory of the European Union, of non-Community goods, which carries the risk that those goods will end up forming part of the economic networks of the Member States without having been cleared through customs (see Case C-234/09 DSV Road [2010] ECR I-7333, paragraph 31).
41. Since that procedure involves obvious risks to the correct application of the customs legislation of the European Union and the resulting collection of duties, the beneficiaries of that procedure are required to comply strictly with the obligations resulting therefrom. Similarly, the consequences of non-compliance with their obligations must be strictly interpreted (see Joined Cases C-430/08 and C-431/08 Terex Equipment and Others [2010] ECR I-321, paragraph 42).
(1) Whether as a matter of principle a CCC authorisation for end-use can be the subject of a "renewal" under the UCC regime. Mr White submits that CCC authorisations can be renewed under the UCC regime and the FTT was wrong to find otherwise. Mr Fell submits that as a matter of principle, CCC authorisations cannot be "renewed" under the UCC regime because there are substantive differences between the two regimes in relation to end-use authorisation.
(2) If a CCC authorisation can be renewed under the UCC regime, whether the 2017 Application was for the same kind of operation as the appellant's previous CCC authorisation. In particular, we must consider what is meant by the term "operation" in Article 172(3). Mr White submits that the relevant operation for these purposes is the importation and end-use of civil aircraft and parts. As such, the appellant's CCC authorisation and the 2017 Application for a UCC authorisation were for the same kind of operation and the 2017 Application fell within Article 172(3). Mr Fell submits that they were not for the same kind of operation because the two authorisations differed in material respects. Those differences concerned the geographical scope of the authorisations and the subject matter of the authorisations. In the case of the CCC authorisation it was restricted to importation and use at East Midlands Airport and covered civil aircraft and parts. In contrast, the 2017 Application was for use in multiple member states and would not cover parts retroactively or for the first 12 months following the authorisation.
30. By its first to third questions, which it is appropriate to examine together, the referring court asks, in essence, whether Article 211(2) of the UCC must be interpreted as applying to an application for renewal of an authorisation with retroactive effect submitted before 1 May 2016, the date on which that article became applicable pursuant to Article 288(2) of the UCC, if the decision on that application was adopted after that date.
32 Article 211(2)(a) to (h) of the UCC lists exhaustively the conditions for the issue of an authorisation with retroactive effect required, under paragraph 1 of that article, for recourse to, inter alia, the end-use scheme. That system, provided for in Article 254 of the UCC, allows goods to be released for free circulation with under a duty exemption or at a reduced rate of duty on account of their specific use.
33 As the Advocate General observed in points 34 to 37 of his Opinion, the conditions to which such authorisation is subject, laid down in Article 211(2), are either entirely or mainly substantive conditions for the issue of an authorisation with retroactive effect. They are decisive for the existence, on the part of the applicant, of the customs debt relating to the goods in question.
34. Consequently, as is apparent from the case-law cited in paragraph 31 above, Article 211(2) of the UCC cannot, as a new substantive rule, be applied to legal situations which arose under the earlier legislation, unless it is clear from its terms, purpose or general scheme that it must apply immediately to such situations.
(h) where an application concerns renewal of an authorisation for the same kind of operation and goods, the application is submitted within three years of expiry of the original authorisation.
(1) Article 250 provides that CCC authorisations which do not have a limited period of validity shall be reassessed. We understand that authorisations without a time limit are mainly authorisations to operate as a customs warehouse.
(2) Article 251 provides that CCC authorisations which are valid on 1 May 2016 shall remain valid. Where they are valid for a limited period they are to remain valid until the end of that period or 1 May 2019, whichever is the earlier. Otherwise, they remain valid until reassessment in accordance with Article 250(1)
(3) Article 254 provides that where a CCC authorisation remains valid in accordance with Article 251, the conditions under which it is applied shall be those laid down in the UCC and the UCC DA as set out in a "table of correspondence" in Annex 90 to the UCC DA. Item 29 of Annex 90 provides for the applicable provisions in relation to end-use relief. Essentially, the conditions for an authorisation under UCC, including for example the requirement for a guarantee in Article 211(3)(c), are read into the CCC authorisation.
100.We were also referred to guidance for member states and traders published by the European Commission in a document described as SPECIAL PROCEDURES - Title VII UCC "Guidance for MSs and Trade". The guidance came with a disclaimer stating that it was not legally binding and was explanatory in nature. Mr White submitted that the guidance when published on 15 July 2016 and on 24 March 2017 supported the appellant's case. It stated:
Note: Authorisation with retroactive effect can be issued also for the time period before 1st May 2016 for which the rules of Community Customs Code apply. (Art.172 (2) DA)
101. We do not agree that the note supports the appellant's case. It references only Article 172(2) UCC DA which gives retroactive effect for up to a year where there are exceptional circumstances. It does not reference Article 172(3) which concerns renewals of an authorisation. We do not accept Mr White's suggestion that this omission can be explained on the basis that no-one imagined a CCC authorisation could not be renewed under the UCC regime.
102.We know from Beeren that if goods were imported without an authorisation prior to 1 May 2016, and an application for retroactive effect was made before that date, then a decision after 1 May 2016 had to be made on the basis of the CCC regime. The fact that Article 172(2) UCC DA could apply retrospectively tells one nothing about the meaning of the word "renewal" in Article 172(3). The note might also apply in a scenario where goods were imported before 1 May 2016 with an application for retroactive authorisation being made after that date. That scenario was not considered in Beeren. It may be that such an application would have been dealt with under the CCC even though the CCC had been repealed. Alternatively, it might have been dealt with under the UCC regime, applying the exceptional circumstances provision in Article 172(2). It is not necessary for us to express a view on that issue. What the note does not say or shed any light on is whether as a matter of principle a CCC authorisation could be renewed after 1 May 2016.
103.When an updated version of the Commission guidance was published on 23 January 2019 and in subsequent updates the note remained but the following passage was added:
Every application for renewal of any authorisation has to be treated under the UCC provisions. It should be noted that renewal of an authorization means that all information, conditions and references to customs rules are unchanged. Only the period of validity of the authorization is different from the previous authorization. Taking into account that the UCC and its related COM acts are very different from the Community Customs Code and its Implementing Regulation, the 'old' authorisation cannot be renewed. Therefore an application for renewal of an Inward Processing or Processing under Customs Control authorisation granted before 1st May 2016 has to be rejected. The person concerned (holder of the expired 'old' authorization) must submit a new application for an authorization.
104.Mr White submitted that this guidance was not persuasive because it was not contemporaneous. Clearly the guidance is given after the events in this appeal and it contains little reasoning as to why Article 172(3) should not be taken as permitting renewal of a CCC authorisation under the UCC regime. It does refer to the UCC regime as being very different to the CCC regime. It also expresses the view of the Commission which carries some weight. Lord Sales JSC indicated in an extra-judicial speech at the Annual Lecture of the UK Association for European Law on 20 November 2023 that the views of the Commission whilst not binding are at least influential. That was said in the context of submissions by the Commission to the Court of Justice on a reference, but there is no reason we should not treat views expressed in official guidance as having some weight, albeit with an appropriate degree of caution. In the event it has not been necessary for us to rely on this material in reaching our conclusion that a CCC authorisation cannot be renewed under the UCC regime. It does however provide us with some comfort that our interpretation is correct.
105.For all the reasons given above we are satisfied that the FTT was right to conclude that the 2017 Application could not qualify as the "renewal" of an authorisation within Article 172(3) UCC DA.
106.The second aspect of Ground 1 raises a question of whether the FTT was right to conclude at [102] that whilst the 2017 Application concerned the same kind of goods as the previous CCC authorisation, it did not concern the same kind of operation. That was because of the different geographical scope of the 2017 Application and the CCC authorisation. The geographical scope of the 2017 Application was described by the FTT at [25]:
25. The goods to be covered were civil aircraft and goods for use in civil aircraft. Their use was describe[d] as "maintenance and operation of civil aircraft". In answer to the question "Where will the goods be used?", the completed form stated: "Intra EU, Trans Continental (EU-USA & EU-BAH)".
107.The geographical scope of the CCC authorisation was described in the FTT's findings of fact at [65] and [66] as follows:
65. I find that the appellant's 2010-15 end-use authorisation was restricted to the maintenance and operation of civil aircraft and civil aircraft parts at East Midlands Airport. It was clearly the intent of HMRC, in granting the authorisation, to limit it to end-use at certain premises, and it is clear enough from the context that the premises intended were those of the appellant at East Midlands Airport. I do not accept the appellant's argument that the reference in the authorisation to premises stated in the (blank) item 1(b) of the appellant's application form meant that the authorisation was for the carrying out of operations "anywhere": it is clear from the context that HMRC
(1) intended to limit where processing operations/prescribed end-use under the authorisation could be carried out; and
(2) did not deem information about where the goods were to be assigned to their end-use, "unnecessary" in the language of CCC IP article 293.3(f) (as the authorisation indicated that there was to be a place where processing operations would be carried out).
66. This construction of the appellant's 2010-15 end-use authorisation is consistent with the relevant provisions of the CCC, which
(1) establish that customs supervision is to continue up to the point of prescribed end-use; and
(2) expressly envisage authorisation specifying the places where the goods have to be assigned to the prescribed end-use.
108.There is no challenge to the FTT's findings in relation to the geographical scope of the 2017 Application and the CCC authorisation. The issue is what is meant by the same type of "operation" in Article 172(3) and whether any difference in geographical scope meant that the authorisations were not for the same type of operation.
109.Article 211(3)(b) UCC provides that as a condition of authorisation under the UCC regime the operator must provide the necessary assurance of the proper conduct of "the operations". Following the further review directed by the FTT, HMRC have granted an authorisation pursuant to Article 211. It must therefore be accepted that the appellant has provided the necessary assurance.
110.Article 211(2)(h) provides that as a condition of retroactive effect, where the application concerns renewal of an authorisation for the same kind of "operation" it must be submitted within 3 years of the expiry of the original authorisation.
111.Mr White submitted that in these contexts, and in the context of Article 172(3) UCC DA, the reference to "operation" is simply to a customs processing operation such as storage or end-use. Operation is to be construed in this way whatever goods are imported. In relation to end-use of a civil aircraft, the operation was importing a registered aircraft or importing an unregistered aircraft and subsequently registering the aircraft with the civil aviation authority. There was no basis for the FTT to say that there were different operations involved because of the different geographical scope. The fact that the CCC authorisation was subject to a condition as to geographical scope does not mean that the 2017 Application did not concern the same type of operation. A condition applying to an authorisation does not change the nature of the operation for which authorisation is granted.
112.Mr White submitted that civil aircraft are in a low-risk category. He identified 3 classes of operation under the UCC in ascending order of risk:
(1) Release for free circulation and end-use;
(2) Procedures without economic impact such as external transit;
(3) Procedures with economic impact such as inward processing.
113.That may be true, but in our view it sheds no light on what is meant by the term "operation" in Article 172(3).
114.Mr White further submitted that in 2017 and with effect for the 2018 Tariff it was realised that customs supervision and control for end-use relief in relation to civil aircraft was unnecessary, presumably because importation of civil aircraft for end-use was relatively risk free. Hence the requirements for supervision and control were removed completely. He described the original requirement for supervision and control as "an error" and submitted that one can make sense of the error if the operation is the importation of a registered aircraft or the importation and subsequent registration of an aircraft. We do not follow Mr White's reasoning in this regard. In any event, we cannot infer that the requirement for customs supervision and control in relation to civil aircraft was an error.
115.There is no definition of the term "operation" in the UCC provisions. We agree with Mr Fell that the term must be given a strict construction because retroactive authorisation is an exception to the general customs rules. We take into account that customs supervision and control is an essential element of the UCC to facilitate trade, fight fraud and avoid errors. The location at which a civil aircraft was imported into the EU was fundamentally important to customs supervision and control. In our view it would be inconsistent with the UCC regime if the 2017 Application, which permitted importation and end-use at any airport in the EU, was treated as being for the same operation as the previous CCC authorisation where importation and end-use was restricted to East Midland's Airport. Whilst civil aircraft might pose little risk of a customs debt arising, they are also high value. Further, the provisions must be construed in the same way for all types of goods and authorisations.
116.The 2017 Application defined not only the place at which aircraft were to be imported and put to end-use, but also made provision for aircraft parts to be put to end-use throughout Europe. This is the equivalent of what was a "single authorisation" pursuant to Article 1.13 CCC IP and which was governed by Article 292(5) of the CCC IP. However, the appellant's CCC authorisation was not a single authorisation. Again, we are satisfied that in this regard the 2017 Application involved a different operation to that in the appellant's CCC authorisation.
117.The FTT found at [32] and [33] that the 2017 Application was concerned with civil aircraft and aircraft parts for a 5 year period, subject to a proposed condition or undertaking that the appellant would not use the end-use procedure in relation to aircraft parts retrospectively or for a period of 12 months from the date authorisation was granted. Mr Fell argued that this was also a material difference between the CCC authorisation and the UCC authorisation meaning that they were not for the same kind of operation. It is not necessary for us to determine whether this in itself would have been sufficient to prevent renewal of the CCC authorisation.
118.For all these reasons we are satisfied that the FTT was right to find that the 2017 Application was not for the same kind of operation as the appellant's CCC authorisation.
119.Ground 2 is that the FTT erred in law in limiting the scope of what could amount to exceptional circumstances for the purposes of Article 172(2) UCC DA.
120.We can deal with Ground 2 relatively briefly. There is no issue as to the meaning of exceptional circumstances. However, the appellant says that the FTT erred in its approach at [113] of its decision. It was wrong to exclude from consideration of exceptional circumstances the fact that the 2015 Application had been made and if allowed would have authorised end-use. This was a factor to be considered individually and as part of the circumstances as a whole in deciding whether the circumstances were exceptional so as to justify granting authorisation with retroactive effect.
121.In this context Mr White pointed to the fact that Article 243(1) CCC made provision for a right of appeal where an operator had made an application to the customs authority but the customs authority did not provide a decision. However, the UK provisions do not provide for any such right of appeal. The parties did not make any submissions as to whether the possibility of judicial review might satisfy the requirements of Article 243(1) in this regard. In the event, it is not necessary for us to consider such arguments. We are satisfied that the FTT made no error of law.
122.The FTT set out at [109] all the circumstances relied upon by the appellant as amounting to exceptional circumstances for the purposes of Article 172(2). At [110] to [112] it discounted all those factors, including [109(4)] which was the fact that the appellant had made the 2015 Application. The one factor the FTT did not discount was [109(5)], which was the fact HMRC had failed to make a decision on the 2015 Application. As a result of that finding, the FTT directed at [145(2)] that in carrying out their further review, HMRC should take into account the FTT's analysis of law at [105] to [113].
123.The FTT referred at [111] to the decision of the CJEU in Unipack v Bulgarian Customs Authority Case C-391/19. In that case the operator had challenged the date on which a retroactive authorisation for end-use was granted on the basis that there were exceptional circumstances within Article 172(2) UCC DA. The customs authority had granted authorisation from the date on which the application was made pursuant to Article 172(1). The question referred to the CJEU was whether certain circumstances constituted exceptional circumstances for these purposes. The CJEU stated at [22] and [23]:
22. As a preliminary point, it should be recalled that the Union Customs Code is based on a system of declarations ... with the aim of keeping customs formalities and controls to a minimum while preventing fraud or irregularities that could harm the EU budget. Because of the importance of those prior declarations for the proper functioning of the customs union, the Union Customs Code, in Article 15, places an obligation on declarants to provide accurate and complete information.
23. More specifically, the end-use procedure provided for in Article 254 of the Union Customs Code allows goods to be released for free circulation with total or partial exemption from duties according to their specific use. It relies on a system of prior authorisation following the submission of an application by the operators concerned, in accordance with Articles 211 and 254 of the Union Customs Code. Under Article 172 of Delegated Regulation 2015/2446, when an authorisation is granted it takes effect at the earliest on the date of acceptance of the application. It is only by way of derogation, where there are 'exceptional circumstances', that paragraph 2 of that article provides that an authorisation may take effect earlier than the date of acceptance of the application.
124.It is clear to us that the FTT took the same approach to exceptional circumstances as the CJEU took in Unipack. In that case, the CJEU considered that the following were not exceptional circumstances: an amendment to the Tariff; the fact customs authorities did not object for 10 months; and the fact that the goods would have qualified for end-use if the importer had authorisation for end-use. At [30], the CJEU stated that none of those factors were capable of constituting exceptional circumstances:
30. It follows that none of the circumstances mentioned by the referring court is capable of constituting an 'exceptional circumstance' within the meaning of Article 172(2) of Delegated Regulation 2015/2446, without there being any need to define that concept further. The failure to comply with obligations under the Union Customs Code and measures resulting from it cannot justify more favourable treatment of the economic operator responsible for that failure.
31. In the light of all the foregoing considerations, the answer to the question referred is that Article 172(2) of Delegated Regulation 2015/2446 must be interpreted as meaning that matters such as the early expiry of the validity of a binding tariff information decision due to an amendment to the combined nomenclature, a failure by the customs authorities to take action in relation to imports bearing an incorrect code or the fact that goods have been used for a purpose exempted from anti-dumping duty cannot constitute 'exceptional circumstances' within the meaning of that provision, for the purposes of the grant under Article 254 of the Union Customs Code of a retroactive authorisation to use the end-use procedure provided for in that latter article.
125.The FTT was not saying that the fact an application for authorisation had been made in 2015 was irrelevant. Plainly that could not be the case because, as the FTT found, the fact the application had not been determined was relevant and it directed HMRC to have regard to that point in the further review. The question of exceptional circumstances would arise if HMRC decided to grant an authorisation following the further review which in the event it did. The FTT was simply saying that the mere making of the 2015 Application could not in itself amount to exceptional circumstances. That is unobjectionable.
126.The FTT correctly stated at [114] that it did not have jurisdiction to consider whether there was an exceptional circumstance:
114. However, in my view, it is outside the scope of the tribunal's s16(4) FA 1994 jurisdiction for me to make a findings as to whether or not this circumstance is "exceptional" - that is a matter for HMRC's administrative discretion, subject to the tribunal's supervisory jurisdiction, if, upon a further reviewed ordered by the tribunal, HMRC were to decide to grant authorisation (and so come to consider whether it should have retroactive effect). The most I can do is decide, having made full findings of fact, whether no reasonable panel of commissioners could conclude that item (5) of the appellant's list comprises exceptional circumstances.
127.Mr Fell accepted that the FTT was required to take into account the combination of factors in determining whether the decision on exceptional circumstances was one which was reasonably available to HMRC. We are satisfied that was what the FTT did. It referred at [114] to "having made full findings of fact". It went on to make findings of fact at [115] as to the circumstances in which HMRC never made a decision on the 2015 Application. When the FTT gave directions for the further review, it directed HMRC to have regard to its findings of fact, including its findings at [115] and at Appendix 2, which included detailed findings about the 2015 Application.
128.In the circumstances, we do not consider that Ground 2 identifies any error of law by the FTT.
129.Ground 3 is that the FTT erred in law in failing to direct that on the further review HMRC must treat the 2017 Application consistently with the way it treated other end-use applications in 2017 and deal with it on the basis of guidance as it stood at that time. In particular, the appellant says that the FTT ought to have made the following direction when it directed HMRC to conduct a further review:
HMRC must treat the 2017 End-Use Application consistently with the way in which it treated other end-use applications at the same time. It must do so in accordance with the policy and guidance (including its own and that of the Commission) as it stood at the time of the application.
130.The appeal to the FTT against HMRC's original decision confirmed on review to refuse the 2017 Application for authorisation was brought pursuant to section 16(4) FA 1994 which provides as follows:
(4) In relation to any decision as to an ancillary matter, or any decision on the review of such a decision, the powers of an appeal tribunal on an appeal under this section shall be confined to a power, where the tribunal are satisfied that the Commissioners or other person making that decision could not reasonably have arrived at it, to do one or more of the following, that is to say —
(a) to direct that the decision, so far as it remains in force, is to cease to have effect from such time as the tribunal may direct;
(b) to require the Commissioners to conduct, in accordance with the directions of the tribunal, a review or further review as appropriate of the original decision; and
(c) in the case of a decision which has already been acted on or taken effect and cannot be remedied by a review or further review as appropriate, to declare the decision to have been unreasonable and to give directions to the Commissioners as to the steps to be taken for securing that repetitions of the unreasonableness do not occur when comparable circumstances arise in future.
131.We are concerned with the FTT's powers pursuant to section 16(4)(b). The FTT was satisfied that HMRC could not reasonably have arrived at the Decision because it failed to take into account the appellant's proposal that authorisation should be subject to a condition that it would not apply to civil aircraft parts retrospectively or for a period of 12 months from the date it was granted.
132.Mr Leigh dealt with the appellant's submissions on Ground 3. He described what we accept is a 3-stage approach required by section 16(4) FA 1994, namely:
(1) Is the tribunal satisfied that HMRC's decision could not reasonably be arrived at?
(2) If so, should the tribunal direct a further review?
(3) If so, what directions should the tribunal give for the purposes of that further review.
133.The FTT was satisfied as to stages (1) and (2). For the purposes of Ground 3 we are concerned with the directions which the FTT gave for the purposes of the further review. Mr Leigh submitted that the only limit on the FTT was that its directions must relate to the subject matter of the further review and must reflect the fact that it is a further review and not a fresh decision. We did not hear argument as to the general scope of the FTT's jurisdiction as to the directions it can give for the purposes of a further review. We were however referred to a number of authorities as to the nature of the FTT's jurisdiction pursuant to section 16(4). The jurisdiction was considered by the Court of Appeal in HM Revenue and Customs v Smart Price Midlands Ltd [2019] EWCA Civ 841 where Rose LJ, as she then was, described the supervisory nature of the test under section 16(4) and went on to consider how that jurisdiction was to be exercised:
18. The nature of the exercise carried out by the FTT in an appeal under section 16(4) of the Finance Act 1994 was considered further in Gora v Customs and Excise Comrs [2004] QB 93 ("Gora") ... The commissioners accepted in Gora that the tribunal's role would be to satisfy itself that the primary facts upon which the commissioners had based their decision were correct. The tribunal would not be limited to considering only whether there had been sufficient evidence to support the commissioners finding. The tribunal would then go on to decide whether, in the light of its findings of fact, the decision was reasonable. Counsel for HMRC in Gora submitted that the commissioners would then conduct any further review they were directed to undertake in accordance with the findings of the tribunal. Pill LJ accepted that view of the jurisdiction of the tribunal: see para 39 of his judgment with which Chadwick and Longmore LJJ agreed.
134. In Gora v HM Customs & Excise [2003] EWCA Civ 525, the Court of Appeal also considered the FTT's jurisdiction in relation to the policy applied by HM Customs & Excise in making the contested decision and endorsed the following submission of counsel for HM Customs & Excise:
38. ... The Commissioners accept:
(a) It would be open to the Appellants to contend in the Tribunal that the decision on restoration was not reasonable (within the meaning of s 16(4) of the Finance Act 1994) on the grounds that it was based upon an unreasonable policy...
(b) For the purpose of deciding whether the policy was unreasonable, it is submitted that the Tribunal should not substitute its view for that of the Commissioners as to the appropriate policy in this area of administration. It should ask itself, applying judicial review principles, whether the policy was one that could reasonably be adopted. In a context where Article 1 Protocol 1 of the ECHR was engaged, the principles of judicial review would include that of proportionality.
(c) The Appellants contend that the policy is 'unreasonable' in the above sense because it fails to take account of the alleged 'blameworthiness' of the Appellants. The Commissioners entirely accept that the Appellants are free to raise that contention in the Tribunal. If that contention were successful, the Tribunal would remit the matter to the Commissioners and impose such directions, requirements or declarations as it thought fit pursuant to s 16(4)(a)-(c) of the 1994 Act.
(d) The Commissioners would then retake the decision, in compliance with the Tribunal's ruling.
135.In Behzad Fuels (UK) Ltd v HM Revenue and Customs [2019] EWCA Civ 319 the Upper Tribunal had directed a further review to be carried out on the basis of published guidance and policy in force at the date of the original decision. The Court of Appeal rejected HMRC's submission that the Upper Tribunal ought to have directed a further review on the basis of its guidance and policy at the time of the further review. Henderson LJ stated as follows at [66] and [67]:
66 The short answer to these arguments, in my judgment, is that the Upper Tribunal only had jurisdiction to require HMRC to conduct "a further review of the original decision": see section 16(4)(b) of the 1994 Act. It did not have jurisdiction to require a fresh review to be undertaken in the light of circumstances and published guidance in force at the date when the review is carried out. The original revocation decision was made by reference to the published guidance contained in the then current form of Notice 192, from which it follows, in my view, that any review of that decision must likewise be taken by reference to the same guidance. If the question were whether the Company had complied with some statutory requirement, the original decision would obviously have had to be taken by reference to the version of the legislation then in force, and if a court or tribunal subsequently found an error of law in the decision and directed it to be reviewed, any such review would in the normal way also have to be conducted in accordance with the law in force at the date of the original decision. I can see no good reason why the position should be any different merely because we are concerned with published guidance rather than statutory requirements...
67. ... The real reason, to my mind, lies in the limited nature of the Upper Tribunal's jurisdiction under section 16(4), and the general principle that when a decision is reviewed, the review should be conducted by reference to the facts as they existed, and the law as it stood, at the date of the original decision. That is the critical distinction between the review of a previous decision, on the one hand, and the taking of an entirely fresh decision, on the other hand.
136.It is clear from these authorities that the FTT can direct a further review to be carried out on the basis of the FTT's findings of fact and its findings as to the reasonableness of a policy being applied by HMRC. In considering the reasonableness of a policy being applied by HMRC, the FTT can apply judicial review principles. Where the decision depends on the application of a policy, it is the policy applicable at the time of the original decision which should be applied and the FTT should direct accordingly. The further review should also be conducted in accordance with the law as it stood at the time of the original decision.
137.Mr Leigh submitted that the further review decision in this case would only be reasonable if it complied with public law requirements of rationality. He referred us to R (oao Gallaher Group Ltd) v Competition and Markets Authority [2018] UKSC 25, in which the Supreme Court stated that where issues of consistency in decision-making arise, they do so generally as aspects of rationality and legitimate expectation rather than under a general principle of equal treatment. There is also the EU law principle of equal treatment which would apply in the context of customs duties (see Marks & Spencer plc v Revenue and Customs Commissioners Case C-309/06).
138.We are satisfied that the FTT made no error of law in not directing HMRC to treat the appellant in the same way as other operators in 2017 or to determine the 2017 Application in accordance with policy and guidance as it stood in 2017. We have reached that conclusion for two reasons.
139.Firstly, the FTT made a finding at [101] that the appellant had not shown that HMRC had treated it differently to other operators in applying the customs legislation. The appellant says that there was no burden on it to establish that other operators were treated differently. It had not asserted that the original decision was unreasonable because of inconsistent treatment. However, having found that the decision was unreasonable and having directed a further review it was open to the FTT to make the direction sought. HMRC's argument that the 2017 Application could not be treated as the renewal of a CCC authorisation and their reliance on Commission guidance were raised for the first time in HMRC's skeleton argument shortly before the FTT hearing. The appellant had raised the question of unequal treatment in response to that argument. That may be the case, but in our view it does not remove the burden on the appellant of establishing at least some real possibility of HMRC breaching its obligation to treat the appellant consistently with other operators. In our view there was nothing in the FTT's findings that required the FTT to make the direction sought.
140.Secondly, the guidance which the appellant says the FTT ought to have referred to in its directions for the further review was that in existence in 2017. As we have found, the note referred to in that guidance does not say that a CCC authorisation could be renewed under the UCC regime. In any event, the FTT correctly found as a matter of law that a CCC authorisation could not be renewed under the UCC regime. As the Court of Appeal stated in Behzad, the further review must be conducted by reference to the law as it stood at the time of the original decision. That was a matter of law, and not a matter of policy or guidance.
141.The FTT was entitled not to make the direction sought. If it had done, it would simply have been directing HMRC to comply with their existing public law obligations in circumstances where there was no evidence that they would fail to comply with those obligations. In the circumstances, it is not necessary for us to consider on this appeal how HMRC should approach its further review in order to comply with domestic law requirements of rationality or the EU law principle of equal treatment. Any challenge to the approach of HMRC on the further review can only be made on the appeal against the further review decision. We make no observations as to whether any such challenge would have merit.
142.For the reasons given above we are satisfied that there were no errors of law in the FTT's decision and we dismiss the appeal.
APPENDIX
EU Provisions
COMMUNITY CUSTOMS CODE
Council Regulation (EEC) No 2913/92
Article 4
For the purposes of this Code, the following definitions shall apply:
13) 'Supervision by the customs authorities' means action taken in general by those authorities with a view to ensuring that customs rules and, where appropriate, other provisions applicable to goods subject to customs supervision are observed.
(14) 'Customs controls' means specific acts performed by the customs authorities in order to ensure the correct application of customs rules and other legislation governing the entry, exit, transit, transfer and end-use of goods moved between the customs territory of the Community and third countries and the presence of goods that do not have Community status; such acts may include examining goods, verifying declaration data and the existence and authenticity of electronic or written documents, examining the accounts of undertakings and other records, inspecting means of transport, inspecting luggage and other goods carried by or on persons and carrying out official inquiries and other similar acts.
(16) 'Customs procedure' means:
(a) release for free circulation;
(b) transit;
(c) customs warehousing;
(d) inward processing;
(e) processing under customs control;
(f) temporary admission;
(g) outward processing;
(h) exportation.
Section 2
Decisions relating to the application of customs rules
Article 6
1. Where a person requests that the customs authorities take a decision relating to the application of customs rules that person shall supply all the information and documents required by those authorities in order to take a decision.
2. Such decision shall be taken and notified to the applicant at the earliest opportunity. Where a request for a decision is made in writing, the decision shall be made within a period laid down in accordance with the existing provisions, starting on the date on which the said request is received by the customs authorities. Such a decision must be notified in writing to the
applicant.
However, that period may be exceeded where the customs authorities are unable to comply with it. In that case, those authorities shall so inform the applicant before the expiry of the abovementioned period, stating the grounds which justify exceeding it and indicating the further period of time which they consider necessary in order to give a ruling on the request.
Article 21
1. The favourable tariff treatment from which certain goods may benefit by reason of their nature or end-use shall be subject to conditions laid down in accordance with the committee procedure. Where an authorization is required Articles 86 and 87 shall apply.
2. For the purposes of paragraph 1, the expression 'favourable tariff treatment' means a reduction in or suspension of an import duty as referred to in Article 4 (10), even within the framework of a tariff quota.
Section 3
Suspensive arrangements and customs procedures with economic
Impact
A. Provisions common to several procedures
Article 84
1. In Articles 85 to 90:
(a) where the term 'procedure' is used, it is understood as applying, in the case of non-Community goods, to the following arrangements:
— external transit;
— customs warehousing;
— inward processing in the form of a system of suspension;
— processing under customs control;
— temporary importation;
(b) where the term 'customs procedure with economic impact' is used, it is understood as applying to the following arrangements:
— customs warehousing;
— inward processing;
— processing under customs control;
— temporary importation;
— outward processing.
Article 85
The use of any customs procedure with economic impact shall be conditional upon authorization being issued by the customs authorities.
Article 86
Without prejudice to the additional special conditions governing the procedure in question, the authorization referred to in Article 85 and that referred to in Article 100 (1) shall be granted only:
— to persons who offer every guarantee necessary for the proper conduct of the operations;
— where the customs authorities can supervise and monitor the procedure without having to introduce administrative arrangements disproportionate to the economic needs involved.
Article 87
1. The conditions under which the procedure in question is used shall be set out in the authorization.
2. The holder of the authorization shall notify the customs authorities of all factors arising after the authorization was granted which may influence its continuation or content.
Article 88
The customs authorities may make the placing of goods under a suspensive arrangement conditional upon the provision of security in order to ensure that any customs debt which may be incurred in respect of those goods will be paid.
Special provisions concerning the provision of security may be laid down in the context of a specific suspensive arrangement.
TITLE VIII
Appeals
Article 243
1. Any person shall have the right to appeal against decisions taken by the customs authorities which relate to the application of customs legislation, and which concern him directly and individually.
Any person who has applied to the customs authorities for a decision relating to the application of customs legislation and has not obtained a ruling on that request within the period referred to in Article 6 (2) shall also be entitled to exercise the right of appeal.
The appeal must be lodged in the Member State where the decision has been taken or applied for.
2. The right of appeal may be exercised:
(a) initially, before the customs authorities designated for that purpose by the Member States;
(b) subsequently, before an independent body, which may be a judicial authority or an equivalent specialized body, according to the provisions in force in the Member States.
COMMUNITY CUSTOMS CODE IMPLEMENTING PROVISIONS
Commission Regulation (EEC) No 2454/93
CHAPTER 1
Definitions
Article 1
For the purposes of this Regulation
...
13. Single authorisation means: an authorisation involving customs administrations in more than one Member State for one of the following procedures: —
...
— end-use pursuant to Article 21(1) of the Code;
CHAPTER 2
End-use
Article 291
1. This chapter applies where it is provided that goods released for free circulation with a favourable tariff treatment or at a reduced or zero rate of duty on account of their end-use are subject to end-use customs supervision.
Article 292
1. The granting of a favourable tariff treatment in accordance with Article 21 of the Code shall, where it is provided that goods are subject to end-use customs supervisions, be subject to a written authorisation.
...
2. Applications shall be made in writing using the model set out in Annex 67. The customs authorities may permit renewal or modification to be applied for by simple written request.
...
5. Where a single authorisation is applied for, the prior agreement of the authorities shall be necessary according to the following procedure
The application shall be submitted to the customs authorities designated for the place
- where the applicant's main accounts are kept facilitating audit-based controls, and where at least part of the operations to be covered by the authorisation are carried out; or
- otherwise, where the applicant's main accounts are held facilitating audit-based controls of the arrangements.
These customs authorities shall communicate the application and the draft authorisation to the other customs authorities concerned, which shall acknowledge the date of receipt within 15 days.
The other customs authorities concerned shall notify any objections within 30 days of the date on which the draft authorisation was received. Where objections are notified within the above period and no agreement is reached, the application shall be rejected to the extent to which objections were raised.
The customs authorities may issue the authorisation if they have received no objections to the draft authorisation within the 30 days.
The customs authorities issuing the authorisation shall send a copy to all customs authorities concerned.
6. Where the criteria and conditions for the granting of a single authorisation are generally agreed on between two or more customs administrations, the said administrations may also agree to replace prior consultation by simple notification. Such notification shall always be sufficient where a single authorisation is renewed or revoked.
7. The applicant shall be informed of the decision to issue an authorisation, or of the reasons why the application was rejected, within thirty days of the date on which the application was lodged or of the date on which any outstanding or additional information requested was received by the customs authorities.
That period shall not apply in the case of a single authorisation unless it is issued under paragraph 6.
Article 293
1. An authorisation using the model set out in Annex 67 shall be granted to persons established in the customs territory of the Community, provided that the following conditions are met:
(a) the activities envisaged are consistent with the prescribed end-use and with the provisions for the transfer of goods in accordance with Article 296 and the proper conduct of operations is ensured;
(b) the applicant offers every guarantee necessary for the proper conduct of operations to be carried out and will undertake the obligations:
- to whole or partly assign the goods to the prescribed end-use or to transfer them and to provide evidence of their assignment or transfer in accordance with the provisions in force,
- not to take actions incompatible with the intended purpose of the prescribed end-use,
- to notify all factors which may affect the authorisation to the competent customs authorities;
(c) efficient customs supervision is ensured and the administrative arrangements to be taken by the customs authorities are not disproportionate to the economic needs involved;
(d) adequate records are kept and retained;
(e) security is provided where the customs authorities consider this necessary.
Article 294
1. The customs authorities may issue a retroactive authorisation.
Without prejudice to paragraphs 2 and 3, a retroactive authorisation shall take effect on the date the application was submitted.
2. If an application concerns renewal of an authorisation for the same kind of operation and goods, an authorisation may be granted with retroactive effect from the date the original authorisation expired.
3. In exceptional circumstances, the retroactive effect of an authorisation may be extended further, but not more than one year before the date the application was submitted, provided a proven economic need exists and:
(a) the application is not related to attempted deception or to obvious negligence;
(b) the applicant's accounts confirm that all the requirements of the arrangements can be regarded as having been met and, where appropriate, in order to avoid substitution the goods can be identified for the period involved, and such accounts allow the arrangements to be verified;
(c) all the formalities necessary to regularise the situation of the goods can be carried out, including, where necessary, the invalidation of the declaration.
...
Article 300
1. The goods referred to in Article 291(1) shall remain under customs supervision and liable to import duties until they are:
(a) first assigned to the prescribed end-use;
Council Regulation (EC) No 1147/2002
Article 1
The autonomous Common Customs Tariff duties shall be suspended for parts, components and other goods of a kind to be incorporated in or used for civil aircraft and falling within Chapters 25 to 97 of the Common Customs Tariff and in respect of which an airworthiness certificate has been issued by a party authorised by aviation authorities within the Community or in a third country.
UNIFORM CUSTOMS CODE
Regulation (EU) No 952/2013
Recitals:
(12) Council Regulation (EEC) No 2913/92 of 12 October 1992 establishing the Community Customs Code was based upon integration of the customs procedures applied separately in the respective Member States during the 1980s. That Regulation has been repeatedly and substantially amended since its introduction, in order to address specific problems such as the protection of good faith or the taking into account of security requirements. Further amendments to that Regulation were introduced ... as a consequence of the important legal changes which have occurred in recent years, at both Union and international level ...
(15) The facilitation of legitimate trade and the fight against fraud require simple, rapid and standard customs procedures and processes. It is therefore appropriate ... to simplify customs legislation, to allow the use of modern tools and technology and to promote further the uniform application of customs legislation and modernised approaches to customs control, thus helping to ensure the basis for efficient and simple clearance procedures. Customs procedures should be merged or aligned and the number of procedures reduced to those that are economically justified, with a view to increasing the competitiveness of business.
(34) The rules for special procedures should allow for the use of a single guarantee for all categories of special procedures and for that guarantee to be comprehensive, covering a number of transactions.
(47) It is appropriate to lay down common and simple rules for the special procedures, supplemented by a small set of rules for each category of special procedure, in order to make it simple for the operator to choose the right procedure, to avoid errors and to reduce the number of post-release recoveries and repayments.
(48) The granting of authorisations for several special procedures with a single guarantee and a single supervising customs office should be facilitated and there should be simple rules on the incurrence of a customs debt in these cases. The basic principle should be that goods placed under a special procedure, or the products made from them, are to be assessed at the time when the customs debt is incurred. However, it should also be possible, where economically justified, to assess the goods at the time when they were placed under a special procedure. The same principles should apply to usual forms of handling.
(51) In order to supplement the rules on special procedures and ensure equal treatment of the persons concerned, the power to adopt delegated acts in accordance with Article 290 TFEU should be delegated to the Commission in respect of the rules relating to cases where goods are placed under special procedures, movements, usual forms of handling and equivalence of those goods and discharge of those procedures.
Article 5
Definitions
"customs procedure" means any of the following procedures under which goods may be placed in accordance with the Code:
(a) release for free circulation;
(b) special procedures;
(c) export;
CHAPTER 2
Guarantee for a potential or existing customs debt
Article 89
General provisions
1. This Chapter shall apply to guarantees both for customs debts which have been incurred and for those which may be incurred, unless otherwise specified.
...
Article 90
Compulsory guarantee
1. Where it is compulsory for a guarantee to be provided, the customs authorities shall fix the amount of such guarantee at a level equal to the precise amount of import or export duty corresponding to the customs debt and of other charges where that amount can be established with certainty at the time when the guarantee is required.
Where it is not possible to establish the precise amount, the guarantee shall be fixed at the maximum amount, as estimated by the customs authorities, of import or export duty corresponding to the customs debt and of other charges which have been or may be incurred.
TITLE VII
SPECIAL PROCEDURES
CHAPTER 1
General provisions
Article 210
Scope
Goods may be placed under any of the following categories of special procedures:
(a) transit, which shall comprise external and internal transit;
(b) storage, which shall comprise customs warehousing and free zones;
(c) specific use, which shall comprise temporary admission and end-use;
(d) processing, which shall comprise inward and outward processing.
Article 211
Authorisation
1. An authorisation from the customs authorities shall be required for the following:
(a) the use of the inward or outward processing procedure, the temporary admission procedure or the end-use procedure;
(b) the operation of storage facilities for the customs warehousing of goods, except where the storage facility operator is the customs authority itself.
The conditions under which the use of one or more of the procedures referred to in the first subparagraph or the operation of storage facilities is permitted shall be set out in the authorisation.
2. The customs authorities shall grant an authorisation with retroactive effect, where all of the following conditions are fulfilled:
(a) there is a proven economic need;
(b) the application is not related to attempted deception;
(c) the applicant has proven on the basis of accounts or records that:
(i) all the requirements of the procedure are met;
(ii) where appropriate, the goods can be identified for the period involved;
(iii) such accounts or records allow the procedure to be controlled;
(d) all the formalities necessary to regularise the situation of the goods can be carried out, including, where necessary, the invalidation of the customs declarations concerned;
(e) no authorisation with retroactive effect has been granted to the applicant within three years of the date on which the application was accepted;
(f) an examination of the economic conditions is not required, except where an application concerns renewal of an authorisation for the same kind of operation and goods;
(g) the application does not concern the operation of storage facilities for the customs warehousing of goods;
(h) where an application concerns renewal of an authorisation for the same kind of operation and goods, the application is submitted within three years of expiry of the original authorisation.
Customs authorities may grant an authorisation with retroactive effect also where the goods which were placed under a customs procedure are no longer available at the time when the application for such authorisation was accepted.
3. Except where otherwise provided, the authorisation referred to in paragraph 1 shall be granted only to persons who satisfy all of the following conditions:
(a) they are established in the customs territory of the Union;
(b) they provide the necessary assurance of the proper conduct of the operations; an authorised economic operator for customs simplifications shall be deemed to fulfil this condition, insofar as the activity pertaining to the special procedure concerned is taken into account in the authorisation referred to in point (a) of Article 38(2);
(c) where a customs debt or other charges may be incurred for goods placed under a special procedure, they provide a guarantee in accordance with Article 89;
(d) in the case of the temporary admission or inward processing procedure, they use the goods or arrange for their use or they carry out processing operations on the goods or arrange for them to be carried out, respectively.
Chapter IV
Specific Use
Section 2
End-use
Article 254
End-use procedure
1. Under the end-use procedure, goods may be released for free circulation under a duty exemption or at a reduced rate of duty on account of their specific use.
...
4. Customs supervision under the end-use procedure shall end in any of the following cases:
(a) where the goods have been used for the purposes laid down for the application of the duty exemption or reduced rate of duty;
(b) where the goods have been taken out of the customs territory of the Union, destroyed or abandoned to the State;
(c) where the goods have been used for purposes other than those laid down for the application of the duty exemption or reduced duty rate and the applicable import duty has been paid.
1....
2. Regulation (EEC) No 3925/91, Regulation (EEC) No 2913/92 and Regulation (EC) No 1207/2001 are repealed from the date referred to in Article 288(2).
3. References to the repealed Regulations shall be construed as references to this Regulation and shall be read in accordance with the correlation tables set out in the Annex.
UNIFORM CUSTOMS CODE DELEGATED ACT
Commission Delegated Regulation (EU) 2015/2446
Recitals:
(56) In order to safeguard the legitimate interests of economic operators and ensure the continued validity of decisions taken and authorisations granted by customs authorities on the basis of the provisions of the Code and or on the basis of Council Regulation (EEC) No 2913/92 and Regulation (EEC) No 2454/93, it is necessary to establish transitional provisions in order to allow for the adaptation of those decisions and authorisations to the new legal rules.
Article 172
Retroactive effect
(Article 22(4) of the Code)
1. Where the customs authorities grant an authorisation with retroactive effect in accordance with Article 211(2) of the Code, the authorisation shall take effect at the earliest on the date of acceptance of the application.
2. In exceptional circumstances, the customs authorities may allow an authorisation referred to in paragraph 1 to take effect at the earliest one year, in case of goods covered by Annex 71-02 three months, before the date of acceptance of the application.
3. If an application concerns renewal of an authorisation for the same kind of operation and goods, an authorisation may be granted with retroactive effect from the date on which the original authorisation expired....
Title IX
Final Provisions
Article 250
Re-assessment of authorisations already in force on 1 May 2016
1. Authorisations granted on the basis of Regulation (EEC) No 2913/92 or Regulation (EEC) No 2454/93 which are valid on 1 May 2016 and which do not have a limited period of validity shall be re-assessed...
Article 251
Validity of authorisations already in force on 1 May 2016
1. Authorisations granted on the basis of Regulation (EEC) No 2913/92 or Regulation (EEC) No 2454/93 which are valid on 1 May 2016 shall remain valid as follows:
(a) for authorisations having a limited period of validity, until the end of that period or 1 May 2019, whichever is the earlier;
(b) for all other authorisations, until the authorisation is reassessed in accordance with Article 250(1).
Article 254
Where a decision or an authorisation remains valid after 1 May 2016 in accordance with Articles 251 to 253, the conditions under which that decision or authorisation is applied shall, from 1 May 2016, be those laid down in the corresponding provisions of the Code, Commission Implementing Regulation 2015/2447 of 24 November 2015 laying down detailed rules for implementing certain provisions of Regulation (EU) No 925/2013 and this Regulation as set out in the table of correspondence laid down in Annex 90.
Annex 90
29. Authorisation for end-use
Applicable provisions under [the CCC]
(Articles 21 and 82 of [CCC] and Articles 291 to 300 of [CCC IP])
Applicable provisions under [the UCC]:
(Articles 210 to 225, 254 of the [UCC] and Articles 161 to 164, 169, 171 to 175, 178, 179, 239 of [the UCC DA] and Articles 260 to 269 of Implementing Regulation (EU) 2015/2447)
COMMON CUSTOMS TARIFF
2016
Annex 1, Part One Section II
B Civil aircraft and goods for use in civil aircraft
1. Relief from customs duty is provided for:
— civil aircraft,
— certain goods for use in civil aircraft and for incorporation therein in the course of their manufacture, repair, maintenance, rebuilding, modification or conversion,
— ground flying-trainers and their parts, for civil use.
These goods are covered by headings and subheadings listed in tables in paragraph 5.
2. For the purposes of paragraph 1, first and second indent, 'civil aircraft' means aircraft other than aircraft used in military or similar services in the Member States which carry a military or non-civil registration.
...
4. Relief from customs duties shall be subject to the conditions laid down in the relevant provisions of the European Union with a view to customs control of the use of such goods (see Articles 291 to 300 of [the CCC IP])
COMMON CUSTOMS TARIFF
2017
[End-use relief was described in the same terms as 2016, save that paragraph 4 cross-referenced Article 254 of the UCC.]
COMMON CUSTOMS TARIFF
2018
[Amendment to the 2018 Tariff provided for by Commission Implementing Regulation (EU) 2017/1925]:
Recital:
(5) In order to reduce administrative burden, it is appropriate, in cases where a civil aircraft has been registered as such and declared for free circulation, to abolish the requirement of the end-use procedure. The aircraft's registration certificate is considered sufficient proof of the aircraft's civil character. The presence of that certificate on board of each aircraft is mandatory in accordance with the Convention on international civil aviation signed at Chicago on 7 December 1944. The preliminary provisions of the CN should therefore be amended.
Annex 1, Part One Section II
B Civil aircraft and goods for use in civil aircraft
...
4. Relief from customs duties shall be subject to the conditions laid down in the relevant provisions of the European Union with a view to customs control of the use of such goods (see Article 254 of [the UCC]).
However, these conditions shall not apply in cases where civil aircraft falling under subheadings .... 8802 40 have been duly entered on a register of a Member State or a third country in accordance with the Convention on International Civil Aviation dated 7 December 1944 and reference is made in the customs declaration for release for free circulation to the relevant certificate of registration.