circular economy,  compliance e AEO

CBAM and inwards processing relief: how to comply with

Settembre 26, 2023 /

The Union Customs Code defines the customs regime “Inward processing” as the procedure for which a good is imported into the EU for processing with suspension of import duties and VAT. After the processing operations, the processed products or the original imported goods can then be either re-exported or released for free circulation in the EU. The latter would imply the obligation to pay import duty and taxes, as well as the application of commercial policy measures. According to “Guidance document on CBAM implementation for importers of goods into the EU “ this principle is extended to the CBAM, i.e. no obligation for reporting under the CBAM arises in this case. However, if the CBAM good is released to the EU market after inward processing, either as the original good or modified, a CBAM reporting obligation arises.

For goods actually imported after having been put under inward processing, the period under which they must be included in the CBAM report starts on the date of release to the internal market (discharge from the customs procedures).

For this reason, in some cases goods may have to be reported under the CBAM although they were put under inward processing before 1 October 2023. Article 6 of the CBAM Implementing Regulation provides some special reporting requirements for goods released for free circulation after inward processing for the purposes of the quarterly CBAM reports:

  • If the good was not modified during the inward processing, the quantities of the good and the embedded emissions of those quantities put under inward processing are to be reported. The report shall also include the country of origin and the installations where the goods where produced, if those are known;
  • If the good was modified, the quantities of the original good and the embedded emissions of those quantities put under inward processing are to be reported. The report shall also include the country of origin and the installations where the goods where produced, if those are known;
  • Where the origin of the good (made in) used for inward processing cannot be defined, the embedded emissions shall be calculated on the basis of the weighted average embedded emissions of the totality of the goods placed under the inward processing procedure for the same aggregated good category.

It is clear that the AEO approach can support the correct fulfillment of the CBAM obligations.