Annex 4.3 Notes of session 1
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- Alban Bridges
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1 Annex 4.3 Notes of session 1 (1) APPLICATION PROCESS AND STATUS CODES Member States support the idea of status codes as they need to be informed about the workflow of an application. There is not enough of information on the conditions for the acceptance of an application in DA Article 11; however, there are more criteria in the application form itself. 1. Implement status codes and maintain their current number (ten) not to overcomplicate the process. 2. Clarify the application and issuing process and the associated deadlines: when all mandatory fields are filled in; when additional information is requested before the application is accepted (within 30 days of receipt of the application); when additional information is requested before a decision is issued but after the application has been accepted (30 days extension of the issuing phase to allow the trader to provide the information); when the administration will notify the trader of its refusal to issue a BTI decision. Proposal 1: Explanations of different status codes and their use will be included in the guidelines. Member States are invited to prepare a draft flowchart. Proposal 2: The guidelines will include an explanation that there is only one extension of 30 days. However, cooperation of Member States on a voluntary basis is needed with regards to the visual representation of the timelines. Annex 2 'Overview of timelines related to the BTI process' of the guidelines could serve as a basis.
2 (2) BTI SHOPPING There are cases when traders apply for BTIs for identical or similar goods (usually) to several Member States in order to receive a BTI decision with the most favourable duty rate. This illegal practice is called BTI shopping. The main concern of the Member States is: What to do when the administration realises that it has not prevented BTI shopping? 1. Create a database / use CIRCABC with a list of traders who attempted BTI shopping in order to warn other Member States. 2. Clarify the definitions of the 'same holder' and 'similar goods'. 3. Clarify whether the RtbH should or should not be applied in case the administration refuses to issue a BTI due to BTI shopping. 4. Revoke the BTI in question immediately. 5. Inform other Member States about identified BTI shopping. 6. Consider penalties for traders on the national level bearing in mind uniformity and their equal treatment in all Member States. 7. Forward the information to the Risk Analysis department of the national administration. Proposals 1 3: The proposals will be further examined. Proposals 4, 5 and 7: Member States are invited to prepare a draft text which could serve as a basis for possible inclusion in the new version of the guidelines. Proposal 6: The proposal is our of the scope of the guidelines. 2
3 (3) CASES CLOSED IN CCC Dissemination of the conclusions of the Customs Code Committee is of utmost importance and should be done in a uniform manner. The cases closed in the minutes of the CCC need to be properly archived to allow their consultation at a later stage. Member States translate the reports on the closed cases and include them in their national instructions. The main problem is absence of clear guidance on steps following the closure of a case, as well as how to make sure that concerned BTIs are revoked. Given that Committee conclusions do not have any legal value, follow-up practices in different Member States can vary. 1. Make available a compendium of already existing classification regulations, statements and CCC conclusions (in CLASS, as a suggestion). 2. In the CCC minutes, when a case is closed without measures, improve the conclusions and clearly indicate the reasons for including or excluding specific headings. At a later stage, this will help Member States to understand how the classification decision was reached and why a BTI should be revoked. 3. Update sections 'Justification for the classification', 11. 'BTI decisions that cease to be valid or are revoked (EX NUNC)' and 14. 'Checklist' of the guidelines making reference to the minutes of CCC, 4. COM should be more proactive for ensuring that conclusions of the CCC are followed. Proposal 1: DG TAXUD is already working on including the existing classification regulations, statements and CCC conclusions in CLASS, envisaged to be available from October Proposal 2: DG TAXUD agrees with this proposal and will make sure that the CCC minutes are drafted in such a way that reasons for including or excluding goods from particular tariff headings are included. Proposal 3: Sections , 11. and 14. of the guidelines will be updated stating that reasoning on including/excluding specific heading agreed upon as a result of the CCC can be included in the justification for the classification. Proposal 4: DG TAXUD agrees that efforts should be made to ensure smooth implementation of conclusions of the CCC and will reflect on the best way forward. 3
4 (4) CONSULTATION OF THE EBTI-3 DATABASE The main purpose is to identify valid BTIs issued for identical or similar products and avoid BTI shopping. 1. Use a uniform search procedure, e.g. table search with clearly determined parameters. 2. Consider an automatic message which informs the Member State where the applicant is established about the application received in another Member State and asks for its examination. 3. Consult other Member States in case other BTIs for identical or similar products are found. In case Member States do not reach an agreement, refer the matter to the European Commission (Expert Teams, as a suggestion). Proposal 1: DG TAXUD thanks Member States for the proposal and invites them to identify a more concrete solution to the problem in view of its possible inclusion in the future upgrade of the EBTI-3 database. Proposal 2: The Commission has already taken this matter into account. The proposal will be implemented in the next upgrade of the EBTI-3 system (in October 2017). Proposal 3: As this is already included in the guidelines (please see section 6. 'Dealing with different views on classification'), for further clarification Member States are invited to contribute with a draft text which may be included in the new guidelines. 4
5 (5) PERIOD OF EXTENDED USE Even though requests for a period of extended use do not occur often, Member States need guidance for such instances. 1. Specify cases where a period of extended use shall be granted, not only those where it shall not. 2. Clarify the application of the UCC Article 34 (7) (b). 3. Define the monitoring process in case a period of extended use is granted, especially before the upgrade of the EBTI-3 system. 4. Share practices of those Member States who have more experience in granting a period of extended use. 5. Establish best practices and include them in the guidelines. Proposals 1 2: The proposals will be further examined. Proposal 3: Unfortunately, until the 40 data elements (including the BTI reference number) are not sent via Surveillance system, Member States can only be advised to monitor the processes internally in the most efficient way. Proposals 4 and 5: Member States are invited to share their practices on granting a period of extended use in the CIRCABC BTI Forum in view of elaborating this aspect in the guidelines. 5
6 (6) IDENTICAL AND SIMILAR PRODUCTS Whereas the term 'identical products' is clear, this is not the case for the term 'similar products'. The Commission's statement "Each case should be assessed on a case by case basis" does not provide enough information; therefore, more guidance is needed to make a clear distinction between 'identical' and 'similar' products. 1. Add reference (mentioning the name of the product concerned on p. 32, first paragraph of the guidelines) to the relevant judgments of the CJEU defining 'similar' products: C-376/07 Kamino C-130/02 Krings C-14/05 Anagram C-91/15 Kawasaki C-435/15 GoPro Hero DG TAXUD will work on the draft text to take into account how the CJEU ruled on 'similar' products in the above mentioned judgments. 6
7 (7) REPRESENTATIVE Any trader has the right to appoint a different party to represent him; however, there are certain criteria that need to be met. The main concerns of the Member States are: What information should be included in the box "representative"? What happens in a situation when a representative does not have an EORI number? PROPOSALS (When a representative does not have an EORI number): 1. Use the EORI number of the applicant/holder. 2. Change the obligatory nature of the EORI number to optional. The proposals will be further analysed in view of providing further clarification in the guidelines. 7
8 (8) RIGHT TO BE HEARD In the examination of the gaps in the guidelines most of the participants had concerns with the Right to be Heard management process. The main question during the seminar was whether RtbH should be granted in case no additional information is provided in the application phase and the customs rejects the application. 1. To make a section on the RtbH and include a summary of Q&A on the RtbH available in CIRCABC. 2. To include timelines applicable to the RtbH. 3. To clarify invalidation and revocation cases where the RtbH applies. 4. In Phase II of the upgrade of the EBTI-3 (Trader Portal), to introduce an automatic notification to the trader in those invalidation and revocation cases which entitle the trader to exercise the RtbH. 5. In the BTI issuing phase, the RtbH should not be granted when additional information is requested but not provided. Background: If a trader fails to provide the requested additional information within 30 days, the administration will notify the trader of its refusal to issue a BTI decision. This decision (refusal to issue a BTI decision) is subject to the RtbH. 6. To create a template for the RtbH process. 7. To analyse the proposal on different scenarios where the RtbH does and does not apply made by Ireland. That document could constitute a basis for the Project Group. 8. To involve Member States in the consultation process before the actual work of the Project Group starts. The Commission will examine the proposals. Member States who were working on the proposal are invited to clarify the proposal point 6. 8
9 (9) TEMPLATE FOR BILATERAL CONSULTATIONS Member States agreed that the communication process will be more uniform and clear if there is a template for bilateral consultations between Member States. 1. Create or approve the proposed template for bilateral consultations. 2. Make the template available in CIRCABC. 3. The template could consist of two parts: in case an application is received in a different Member State than the one where the applicant is established and in case of divergent BTIs. It could contain the following boxes to be filled in: Reference number of the application received Member State (sender) Member State (recipient) Reason for contact Return address as a single point of contact Deadline to reply Additional information, if any In case an application is received in a different Member State than the one where the applicant is established: Brief description Customs preliminary classification (optional) Agree/disagree to deal with the application Reasons for agreement/disagreement In case of divergent BTIs: Information from the sender, e.g. list of BTIs concerned Reasons for the classification in the reply DG TAXUD thanks the Member States who worked on the proposal for their initiative. Member States are invited to create an electronic version of the template which may be then annexed to the guidelines. 9
10 (10) TIMELINES The management and communication of deadlines can become a challenge for administrations. The main idea is to have a monitoring system before October 2019 in order to make it easier for Member States' administrations to follow timelines and ensure that they are met. 1. Make changes to the existing EBTI system so that it: Calculates the timelines Records the dates Revises dates as required Issues warning messages as the deadline is approaching 2. Convert Annex 2 'Overview of timelines related to the BTI process' of the guidelines to a table setting out different scenarios with references to the relevant legislation and the guidelines (similar to the document on the right to be heard prepared by Ireland) 3. Create template letters to traders informing them of different deadline Proposal 1: Due to the numerous UCC IT projects it is not feasible to include these features in the system, at least at this point of the development. Therefore, DG TAXUD encourages sharing of the existing practices among Member States. Proposals 2 and 3: DG TAXUD thanks Member States for the proposals and encourage them to draft the documents in view of their possible inclusion in the guidelines. 10
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