Germany: 256. Reform of EU Customs Law

Last Updated: 29 May 2002

Nicole Looks, KPMG Frankfurt

Monika Zitzmann, KPMG Hamburg

Jochen Schmidt, KPMG Düsseldorf

For editorial cut-off date, disclaimer, and notice of copyright see end of this article.

1. Customs law reform in general

The most fundamental reform of European Community customs law since the enactment of a general Customs Code for all EU member states went into effect on 1 July 2001. The new provisions take account of the changes resulting in particular from the European internal market and the World Trade Organisation (WTO) negotiations on the liberalisation of international trade.

The reforms focus on customs procedures of major economic significance, by means of which customs duties can be reduced or even avoided entirely on goods imported from third countries. The procedures in question are those for

  • customs warehousing
  • inward processing
  • processing under customs control
  • temporary importation and
  • outward processing.

This article describes the basic changes in the above procedures, which involve amendments to Regulation (EEC) No. 2913/92 (Community Customs Code) and Regulation (EEC) No. 2454/93 (Customs Code Implementing Rules) pursuant to Regulation (EC) No. 2700/2000 (Official Journal EC L 311/17) and Regulation (EC) No. 993/2001 (Official Journal EC L 141).

All procedural rules for the major customs procedures, notably the rules governing application for and approval of such procedures, have now been standardised and consolidated, thereby making the procedures considerably easier to use in practice. In keeping with the concepts of progressive European integration and above all a common internal market, the revised rules provide that, for most economically significant procedures, a single approval (grant) can be issued that permits the procedure to be used in several member states. The changes made in the specific procedures are described below.

2. Customs warehousing

In Type E customs warehousing procedures, which involve no fixed warehouses and are accordingly almost exclusively monitored by computerised means, it is now possible to select the time the goods become subject to the customs warehousing procedure (time of storage), instead of the time of their removal, as controlling for payment of customs duty (as it is under the Type D customs warehousing procedures commonly employed in Germany). Above all, the applicable customs value is then determined as of the time of storage. Determining the customs value of goods at the time of storage is advantageous when their value rises while in a customs warehouse due to actions taken with respect to the goods or due to their resale.

3. Inward processing

Previously, inward processing could only be approved when the economic conditions were met for processing duty free goods inside the EU with the intent of re-exporting the processed products thereby created. The generally time-consuming and complicated procedures for verifying fulfilment of the economic conditions were intended to ensure that the legitimate interests of other EU manufacturers would not be harmed by allowing processing operations in the EU. The Regulation has now been amended to provide that the economic conditions are always deemed to be fulfilled for all goods except agricultural products, thus obviating time-consuming checks.

4. Processing under customs control

Processing under customs control permits goods from third countries to be subjected to a transformation process in the EU prior to the payment of customs duty so as to transform the goods into a product subject to lower import duty than the goods originally imported. Here as well, verification of the economic conditions has now been done away with in many cases, i.e. for all goods and types of processing listed in the appropriate appendix to the Community Customs Code Implementing Rules. Moreover, processing under customs control is no longer limited to a certain group of goods or certain processing operations.

5. Temporary importation

The temporary importation procedure permits goods from third countries to be used in the EU duty-free or at reduced rates for specifically defined purposes (e.g. for exhibition, for test purposes, or as professional equipment) during a limited period of time. The sometimes confusing rules have now been reorganised according to a clear system. The scope of application of the procedure has also been extended. Particularly noteworthy is the fact that temporary use with a partial exemption from customs duties will be granted in the future for goods owned by persons resident in the EU. The previous restriction to goods owned by a person resident outside the EU has been dropped. Whereas previously no change was permitted in the condition of goods subject to temporary importation arrangements, this restriction has now been relaxed in that repair and maintenance of the goods are specifically authorised.

6. Outward processing

The outward processing rules permit the temporary exportation of Community goods for processing purposes. After completion of processing in a third country, the resulting products qualify for partial exemptions from import duty upon their re-importation into the EU. Previously, the customs duty owing on the re-imported processed goods was almost without exception determined by the so-called "differential charge". Under this system, the duty otherwise owing on the processed goods was reduced by the duty that would be payable on import into the EU of goods of the same sort as originally exported for purposes of outward processing. In the future, customs may upon request be paid on a so-called "value-added" basis in many cases. On re-import of the processed goods, customs is paid only on the processing costs incurred in the third country and the value of third country materials added. The duty rate is that of the processed goods. In many cases, the value-added system leads to lower customs duties.

7. Concluding remarks

We trust that this short summary of essential changes in the Implementing Rules of the Community Customs Code will assist you in determining whether the changes in EU customs legislation may have an impact on your handling of customs transactions.

Editorial cut-off date: 20 March 2002

Disclaimer and notice of copyright

This article treats the subjects covered in condensed form. It is intended to provide a general guide to the subject matter and should not be relied on as a basis for business decisions. Specialist advice must be sought with respect to your individual circumstances. KPMG Germany in particular insists that the tax law and other sources on which the article is based be consulted in the original, whether or not such sources are named in the article. Please note that the article is current only through its editorial cut-off date shown immediately above (not to be confused with the later date as of which the article was placed online – the date appearing at the article's outset). Related developments subsequent to the editorial cut-off are not necessarily reported on in later articles. Please note as well that later versions of this article or other articles on related topics may have since appeared on this database or elsewhere and should also be searched for and consulted. While KPMG Germany's articles are carefully reviewed, it can accept no responsibility in the event of any inaccuracy or omission. Any claims nevertheless raised against KPMG Germany on the basis of this article are subject to German substantive law and, to the extent permissible thereunder, to the exclusive jurisdiction of the courts in Frankfurt am Main, Germany. This article is the intellectual property of KPMG Germany (KPMG Deutsche Treuhand-Gesellschaft AG). No use of or quotation from the article is permitted without full attribution to KPMG Germany and the article's stated author(s), if any. Distribution to third persons is prohibited without the express written consent of KPMG Germany in advance.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Mondaq Advice Centre (MACs)
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.