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3. november 2018. Customs Waste in the process of inward processing
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Customs

Waste in the process of inward processing


The process of inward processing in the disposal system is approved for foreign goods, for which customs duties are not paid, which are not subject to trade policy measures and which are intended for reexport from the customs area in the form of primary processed products. In the Regulation on Customs-Approved treatment of goods, a primary product is defined as a processed product whose production process had been approved while secondary processed products are processed products specified in the approval and which necessarily ensue in the production process. Thereby, one should bear in mind that secondary processed products are not necessarily waste and as such bound to be destroyed, but that these could have certain utility value. This is also important while answering the question-is it obligatory to file a permit for importing secondary processed products-the answer is that it is not necessary.

Considering the fact that the purpose of the inward processing process is export or reexport of primary processed products, it is possible to designate another customs-approved treatment or use for secondary processed products. In this way, secondary processed products can be returned abroad as well as the primary processed products. Moreover, they may be released for free circulation or they may be destroyed. If the choice has been made that they should stay in Serbia (either by being released for free circulation or by being destroyed in Serbia) environment protection regulations shall apply to their treatment.

It is important to bear in mind that environmental protection authorities state that if the waste ensued in the inward processing process, it is not a case of cross-border movement but that the waste ensued in the Republic of Serbia. Therefore the same regulations referring to waste management in the Republic of Serbia shall apply. This attitude further implies that in a specific case waste import permits cannot be issued but that the producer is obliged to acquire documents determined by environment protection regulations (report on waste examination, document on waste movements).


Charging compensatory interest for waste ensued in the process of inward processing

When it comes to charging compensatory interest, one should primarily have in mind that it is not charged automatically, that is whenever goods from the process of temporary import and inward processing are released for free circulation, but that Article 251, paragraph 4 of the Customs Law states that, under the conditions and circumstances determined by the Government, compensatory interest shall be charged and added to the sum of customs debt in order to prevent unfounded financial gain by changing the date of getting into debt and debt statement. While assessing whether there has been any unfounded financial gain, it is taken into consideration whether and how the holder of the customs procedure fulfilled their obligations to the customs authorities during that procedure, e.g. whether the guarantees for charging the customs debt had been laid down, whether the holder delivered the required documents in due time, etc. All of these should indicate that there was no intention of disobeying the customs regulations.

Moreover, pursuant to Article 285, paragraph 1. of the Regulation on customs-approved treatment of goods, when a customs debt has been made for processed products or imported goods in the process of inward processing or temporary import, compensatory interest shall be calculated and added to the customs debt for the given period. In paragraph 5 of the same Article, cases in which the compensatory interest shall not be charged are specified. Thereby, among other things, compensatory interest shall not be charged while releasing regulated secondary processed products for free circulation if their amount is proportional to the amount of primary processed products. Accordingly, having in mind everything aforementioned, should secondary processed products ensued in the process of inward processing be released for free circulation, and these are waste and remains, no compensatory interest shall be charged, provided that their amount is proportional to the amount of primary processed products, which is in line with the corresponding EU regulations.

 
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