Taxation (Cross-border Trade) Bill (HC Bill 128)

Part 1 Import duty

The charge to tax

1 Charge to import duty

5A duty of customs (to be known as “import duty”) is charged in accordance
with provision made by or under this Part by reference to the importation of
chargeable goods into the United Kingdom.

2 Chargeable goods

Goods are “chargeable goods” for the purposes of this Part unless they are
domestic goods.

Incurring of liability to import duty

3 5Obligation to declare goods for a Customs procedure on import

(1) Chargeable goods which are presented to Customs on import must be declared
for a Customs procedure by the making of a Customs declaration.

(2) It is the Customs procedure for which the goods are declared that determines
when a liability to import duty is incurred.

(3) 10The Customs procedures for which chargeable goods may be declared are as
follows—

(a) a procedure under which the goods are released for free circulation in
the United Kingdom (referred to in this Part as “the free-circulation
procedure”), or

(b) 15a special Customs procedure.

(4) In this Part “special Customs procedure” means—

(a) a storage procedure,

(b) a transit procedure,

(c) an inward processing procedure, or

(d) 20an authorised use procedure or temporary admission procedure.

(5) Schedule 1 makes provision about—

(a) the period within which Customs declarations are required to be made
(and associated matters),

(b) the making, amendment or withdrawal of Customs declarations,

(c) 25the acceptance of Customs declarations by HMRC,

(d) the verification of Customs declarations by HMRC officers, and

(e) the release of goods to, and the discharge of goods from, Customs
procedures.

(6) Schedule 2 makes further provision about special Customs procedures.

4 30When liability to import duty incurred

(1) If—

(a) chargeable goods are declared for the free-circulation procedure, and

(b) HMRC accept the declaration,

a liability to import duty is incurred at the time of the acceptance.

(2) 35If chargeable goods are declared for—

(a) a storage procedure,

(b) a transit procedure, or

(c) an inward processing procedure,

the general rule is that a liability to import duty is not incurred by reference to
40the importation of the goods.

(3) This rule is subject to the following two exceptions—

(a) if there is no entitlement to make the Customs declaration concerned, a
liability to import duty is incurred at the time the (purported)
declaration is made, and

(b) if there is a breach by any person of any requirement relating to the
5procedure, a liability to import duty is incurred at the time at which the
breach first occurs.

(4) In the case of goods declared for an authorised use procedure or temporary
admission procedure—

(a) a liability to import duty is incurred at the time the declaration is
10accepted by HMRC,

(b) if there is an entitlement to make the declaration for the procedure, the
rate of import duty is lower than the normal rate (see section 19(4)),

(c) if there is no such entitlement, the liability is at the normal rate, and

(d) if there is a breach of a requirement relating to the procedure, a further
15liability to import duty arises at the time of the breach at the normal rate
reduced to take account of the amount of any earlier liability.

(5) In the case of goods declared for a temporary admission procedure, see also
section 19(5).

(6) In this section any reference to the breach of a requirement relating to a special
20Customs procedure is to—

(a) a breach, occurring while the procedure has effect, of the terms of the
declaration for the procedure or of any other requirement imposed in
relation to the procedure by or under Schedule 2, or

(b) a breach, occurring at any time after the declaration was made, of any
25other requirement imposed by an HMRC officer in relation to the goods
for which the declaration was made.

(7) In this section “the normal rate” means the rate that, at the time of the
declaration or breach (as the case may be), would be applicable if section 19(4)
were ignored.

5 30Goods not presented to Customs or Customs declaration not made

(1) If chargeable goods—

(a) are imported into the United Kingdom, and

(b) are not presented to Customs on import (if so required),

the goods are liable to forfeiture (as to which, see Part 11 of CEMA 1979) at the
35time of importation.

(2) If goods are liable to forfeiture as a result of—

(a) subsection (1), or

(b) paragraph 1(5) or 3(4) of Schedule 1 (no Customs declaration made),

a liability to import duty is incurred at the time at which the goods become
40liable to forfeiture.

Person liable to import duty

6 Person liable to import duty

(1) If a Customs declaration is made in respect of any chargeable goods, the person
in whose name the declaration is made is the person liable to import duty in
5respect of the goods.

(2) If a liability to import duty is incurred as a result of section 5 in respect of any
chargeable goods, any person who is in possession or control of the goods
when they enter the United Kingdom is liable to import duty in respect of the
goods.

(3) 10In addition to any person liable as a result of subsection (1) or (2), each of the
following persons is liable to import duty—

(a) a person on whose behalf a Customs declaration is made,

(b) a person liable as a result of provision made by section 21(6) (Customs
agents),

(c) 15a person liable as a result of provision made under paragraph 21 of
Schedule 2 (special Customs procedures), and

(d) a person otherwise involved in a breach of a relevant Customs
obligation.

(4) For this purpose a person is otherwise involved in a breach of a relevant
20Customs obligation if—

(a) the person provides false information in connection with a chargeable
Customs declaration and the person knew, or ought reasonably to have
known, that the information was false,

(b) the person (“A”) acted (whether as a Customs agent or otherwise) on
25behalf of another person who breached a relevant Customs obligation
and A knew, or ought reasonably to have known, of the breach by that
other person,

(c) the person participated in, or was otherwise involved in, a breach of a
relevant Customs obligation and knew, or ought reasonably to have
30known, of the breach, or

(d) the person possesses or controls the goods at a time when there has
been a breach of a relevant Customs obligation and the person knew, or
ought reasonably to have known, of the breach.

(5) For the purposes of subsection (4)(a) a person (“P”) provides “false information
35in connection with a chargeable Customs declaration” if—

(a) P provides information to another person to enable that other person to
make a Customs declaration,

(b) that other person makes the declaration, and

(c) the information provided by P is false.

(6) 40For the purposes of subsection (4) there is “a breach of a relevant Customs
obligation” if—

(a) there is a breach of a requirement imposed on any person that results
in a liability to import duty, or

(b) circumstances otherwise arise that result in a liability to import duty,

45and, in a case within paragraph (b) of this subsection, references to knowledge
of the breach are to knowledge of those circumstances.

(7) If two or more persons are liable to import duty in any case, those persons are
jointly and severally liable to import duty in that case.

Amount of import duty: the customs tariff, preferences, safeguarding etc

7 Amount of duty: introduction

(1) 5The amount of import duty applicable to any goods is to be determined in
accordance with the customs tariff (see section 8), as amended or adjusted by
provision made under any of the following sections—

(a) section 9 (preferential rates: arrangements with countries or territories
outside UK),

(b) 10section 10 (preferential rates given unilaterally),

(c) section 11 (quotas),

(d) section 12 (tariff suspension),

(e) section 13 (dumping of goods, foreign subsidies and increases in
imports),

(f) 15section 14 (increases in imports or changes in price of agricultural
goods), and

(g) section 15 (international disputes etc).

(2) See also—

(a) sections 16 to 18 (which deal with the valuation of goods, their place of
20origin and cases where amounts are expressed in a foreign currency),
and

(b) section 19 (which enables provision to be made for full or partial relief
from import duty).

8 The customs tariff

(1) 25The Treasury must make regulations establishing, and maintaining in force, a
system which—

(a) classifies goods according to their nature, origin or any other factor,

(b) gives codes to the goods as so classified,

(c) specifies the rate of import duty applicable to goods falling within
30those codes (whether by a formula or otherwise), and

(d) contains rules for determining the amount of import duty applicable to
those goods.

(2) This system is referred to in this Part as the customs tariff.

(3) The customs tariff may provide for the amount of any import duty applicable
35to any goods falling within any code to be determined by reference to either or
both of the following—

(a) the value of the goods, and

(b) the weight or volume of the goods or any other measure of their
quantity or size.

(4) 40The customs tariff may include provision as to the meaning of any expression
used in it.

(5) In considering the rate of import duty that ought to apply to any goods in a
standard case, the Treasury must have regard to—

(a) the interests of consumers in the United Kingdom,

(b) the desirability of maintaining and promoting the external trade of the
United Kingdom,

(c) the desirability of maintaining and promoting productivity in the
5United Kingdom, and

(d) the extent to which the goods concerned are subject to competition.

(6) In considering the rate of import duty that ought to apply to any goods in a
standard case, the Treasury must also have regard to any recommendation
about the rate made to them by the Secretary of State.

(7) 10In considering what recommendation to make, the Secretary of State must have
regard to the matters set out in subsection (5)(a) to (d).

(8) In this section “a standard case” means a case other than one to which any of
sections 9 to 15 or 19(4) apply (preferential rates, quotas, tariff suspension,
safeguarding, etc).

9 15Preferential rates: arrangements with countries or territories outside UK

(1) If—

(a) Her Majesty’s government in the United Kingdom makes
arrangements with the government of a country or territory outside the
United Kingdom, and

(b) 20the arrangements contain provision for the rate of import duty
applicable to goods, or any description of goods, originating from the
country or territory to be lower than the applicable rate in the customs
tariff in its standard form,

the Treasury may make regulations to give effect to the provision made by the
25arrangements (whether by amending the customs tariff or otherwise).

(2) The reference here to the customs tariff in its standard form is to the tariff as it
has effect without regard to any provision made under any of sections 10 to 15
or section 19(4).

(3) The power of the Treasury to make regulations under this section is exercisable
30only on the recommendation of the Secretary of State.

10 Preferential rates given unilaterally

(1) The Secretary of State may by regulations establish a scheme (“a trade
preference scheme”) under which the rate of import duty applicable to goods,
or any description of goods, originating from an eligible developing country is
35lower than the applicable rate in the customs tariff in its standard form.

(2) A trade preference scheme may—

(a) apply to one or more eligible developing countries,

(b) provide for the application of the lower rates to be subject to the
meeting of specified conditions, and

(c) 40make provision about the variation, suspension and withdrawal of the
application of the lower rates.

(3) If a trade preference scheme is established under subsection (1), regulations
under subsection (1)—

(a) must provide for a nil rate of import duty to be applicable to all goods
originating from a least developed country, except arms and
ammunition, and

(b) may make provision about the suspension and withdrawal of the
5application of the nil rate.

(4) In subsection (3)—

(a) “arms and ammunition” has the meaning specified in regulations made
by the Secretary of State, and

(b) “suspension” and “withdrawal” may include the application of another
10rate that is lower than the applicable rate in the customs tariff in its
standard form.

(5) The references in this section to the customs tariff in its standard form are to
the tariff as it has effect without regard to any provision made under any of
section 9, sections 11 to 15 or section 19(4).

(6) 15In Schedule 3—

(a) Part 1 defines “eligible developing country” and “least developed
country” for the purposes of this section,

(b) Parts 2 and 3 contain lists for the purpose of those definitions, and

(c) Part 4 confers power to amend those lists.

11 20Quotas

(1) Regulations may make provision for determining the amount of import duty
applicable to any goods that are subject to a quota.

(2) Goods are subject to a quota for the purposes of this section if—

(a) Her Majesty’s government in the United Kingdom makes
25arrangements with the government of a country or territory outside the
United Kingdom and the arrangements contain provision for the goods
concerned to be subject to a quota, or

(b) the Treasury otherwise consider that it is appropriate for the goods
concerned to be subject to a quota.

(3) 30Regulations may make any provision that the person making them considers
appropriate for the purposes of this section, including (for example)—

(a) provision specifying the factors by reference to which a quota is to be
determined,

(b) provision imposing conditions subject to which a quota has effect,

(c) 35provision for a quota in respect of specified goods to be subject to a
licensing or allocation system (see also subsection (4)), and

(d) any other provision in relation to the administration of a quota.

(4) Regulations made under subsection (3) which make provision for a quota in
respect of specified goods to be subject to a licensing or allocation system may
40include—

(a) provision authorising any public body to grant licences or determine a
system for allocating the quotas,

(b) provision specifying the cases in which a person is eligible to make use
of a quota,

(c) provision specifying the conditions subject to which any person may
make use of a quota (including provision for the giving of a guarantee
of a specified amount),

(d) provision authorising the conditions to be imposed by a licence or other
5document,

(e) provision requiring the payment of fees by any person in connection
with any application for a licence or an allocation, and

(f) provision generally in relation to the administration of the licensing or
allocation system.

(5) 10Any fees payable as a result of provision made under subsection (4)(e) must be
paid into the Consolidated Fund.

(6) The power to make regulations under this section providing for a quota in
respect of specified goods to be subject to a licensing or allocation system is
exercisable by the Secretary of State.

(7) 15The power to make regulations under this section containing any other
provision is exercisable by the Treasury; and, in considering what provision to
include in the regulations, the Treasury must have regard to any
recommendation made to them by the Secretary of State.

12 Tariff suspension

(1) 20The Treasury may by regulations make provision securing that, for a specified
period, the rate of import duty applicable to specified goods is to be lower than
the applicable rate in the customs tariff in its standard form.

(2) The regulations must provide that (subject to any exceptions) the Secretary of
State is obliged—

(a) 25to consider a request made by any person for goods to be specified
goods for the purposes of the regulations, and

(b) to make recommendations to the Treasury about the request.

(3) The regulations may—

(a) make provision for extending the specified period (including by means
30of a notice),

(b) impose conditions on the application of the lower rate, and

(c) make further provision about requests made to the Secretary of State
(including provision about the form and contents of a request and the
manner, and date by which, a request is to be made).

(4) 35In this section the reference to the customs tariff in its standard form is to the
tariff as it has effect without regard to any provision made under any of
sections 9 to 11, sections 13 to 15 or section 19(4).

(5) In considering what provision to include in any regulations under this section,
the Treasury must have regard to any recommendation made to them by the
40Secretary of State.

13 Dumping of goods, foreign subsidies and increases in imports

(1) Functions relating to import duty are conferred on the Trade Remedies
Authority (“the TRA”) by—

(a) Schedule 4 (dumping and foreign subsidies causing injury to UK
45industry), and

(b) Schedule 5 (increased imports causing serious injury to UK producers).

(2) If the Secretary of State accepts a recommendation by the TRA under provision
made by or under Schedule 4 or 5 that an additional amount of import duty
should be applicable to goods, the Secretary of State must by public notice
5make provision giving effect to the recommendation.

(3) If the Secretary of State accepts a recommendation by the TRA under provision
made by or under Schedule 5 that goods should be subject to a tariff rate quota,
the Secretary of State must by public notice make provision for determining the
amount of import duty applicable to the goods in order to give effect to the
10recommendation.

(4) If the Secretary of State accepts a recommendation by the TRA under provision
made by or under Schedule 4 or 5 that—

(a) the application of an additional amount of import duty to goods under
this section should be suspended, varied or revoked, or

(b) 15the application of a quota to which goods are subject under this section
should be suspended, varied or revoked,

the Secretary of State must by public notice make provision giving effect to the
recommendation.

(5) The Secretary of State may make regulations containing any provision that the
20Secretary of State considers appropriate for the purposes of subsections (3) and
(4)(b); and section 11(3)(a) to (d), (4) and (5) apply to regulations under this
subsection as they apply to regulations under section 11(3).

14 Increases in imports or changes in price of agricultural goods

(1) The Treasury may by regulations make provision for an additional amount of
25import duty to be applicable to specified agricultural goods, or a specified
description of agricultural goods, if—

(a) the volume of imports of the specified goods, or goods of the specified
description, into the United Kingdom during a specified period
exceeds a specified trigger level, or

(b) 30the import price of the goods has fallen below a specified trigger price.

(2) The regulations may (among other things) make provision—

(a) limiting the period for which an additional amount of import duty is
applicable;

(b) for the suspension of the application of an additional amount of import
35duty;

(c) requiring the giving of a guarantee in respect of an additional amount
of import duty which is potentially applicable to goods, where the
representative price for the goods has fallen below the specified trigger
price and the import price of the goods is higher than that
40representative price;

(d) specifying the representative price for goods or a description of goods,
(whether by a formula or otherwise) and providing for representative
prices to be adjusted (whether by a formula or otherwise).

(3) The power of the Treasury to make regulations under this section is exercisable
45only on the recommendation of the Secretary of State.