Getting accustomed to this year's changes in the customs law
This week's column looks at this year's changes to the Customs Code, and was prepared with extensive assistance from my colleague Aleksandra Kalinowska, tax manager specializing in customs and indirect taxes. Somehow I always have problems finding jokes on the subject of customs, so this week it's a bit serious again but does actually contain some useful information for a change. Some of these changes are general, but some of them have the effect of increasing the consistency and transparency of customs office interpretations which can only be a good thing.
The first change is that the finance minister is authorized to issue official interpretations of customs law. The minister is also legally bound to ensure consistent application of customs law by customs authorities, specifically by issuing official interpretations published in the Treasury Bulletin. One may still apply to customs authorities for an individual interpretation in a specific case.
Secondly, the head of the Central Customs Office will be authorized to issue a decision concerning the origin of goods, which will be binding on customs authorities and the issuing body for three years. The binding tariff information will help remove doubt as to the origin of imported and exported commodities. This will protect importers against financial penalties for any goods wrongly identified as to their origin and the potential understatement of customs and tax liabilities.
The revised law specifies new criteria for granting import quotas. Namely, quotas can also be allowed:
in proportion to the number of applicants
in proportion to the import value of an entity's given commodity
This replaces a system whereby quotas were allocated on a "first-come first-serve" basis.
The next change relates to simplified procedures. The prior requirement of carrying on regular import and export of goods for a period of over one year will be replaced with the requirement to carry on business operations for over one year, while the other conditions will remain unchanged. The change will give enterprises that have just started cross-border trade the opportunity to benefit from simplified customs procedures. Simplified procedures can also be contracted out to a customs agency.
In addition to the changes this year, the law also includes some changes to the list of customs exemptions, scheduled to take effect next year. This is modeled on European Union (EU) imports customs relief regulations. The amended law upholds the majority of the existing exemptions, but provides for more precise rules of how they should be granted.
The major change is that the exemption from customs applicable to fixed assets contributed by a foreign shareholder will be cancelled. Although the Customs Code authorizes the Council of Ministers to issue regulations with an additional list of exemptions, it is not certain if in-kind contributions will be included. So if you wish to import high-value machinery from countries with high tariff rates, it needs to be done before the end of the year.
New exemptions will be available for:
persons relocating subsequent to marriage
equipment for the disabled
low-value mail (any mail of up to O22 except for alcoholic beverages, tobacco products and perfumes as well as personal mail worth up to O45 for individuals, mailed without any extra charges for the recipient)
fixed assets of a relocating entrepreneur
As of Jan. 1, 2003, the deadline for the payment of customs duties will be extended from seven to 10 days from the date of clearance. This is also in-line with the arrangements between Poland and the EU. Whether this will happen if Poland does not join the EU on that date remains a question.
Additional to legal changes, many changes have been made to the implementing regulations, which govern procedural details.
In particular, various handling charges have been removed (e.g. for exercising customs supervision, issuing binding tariff information, confirming the origin or customs status of goods, making entries on the list of customs agents and granting licenses by customs authorities, among others).
Handling fees chargeable on the majority of permits issued by customs authorities have also been lifted. However, the same handling fees will still be charged on some things, such as bringing goods into or out of the Polish customs area through a checkpoint other than an open checkpoint, operating a customs or bonded warehouse, or destroying goods.
Other revised regulations provide for more detailed requirements concerning the temporary import of vehicles, but only if:
they are used solely for cross-border transportation
they are registered outside the Polish customs area and imported by a person based (or resident) outside the Polish customs area or in the name and for the benefit of such a person
they are re-exported immediately after transportation is finished
This new third requirement may have the effect of considerably limiting vehicle importation within the temporary procedure.
Surely the most exciting change must be the incorporating into Polish law of the Convention on Customs Treatment of Pool Containers used in International Transport. This governs the whole procedure where goods are shipped in and out in containers, ensuring that as long as the equivalent numbers of containers are imported and exported, the containers themselves are not caught by customs charges. There's a lot more to it than that, but it would take up a column on its own if I went into too much detail.
The final change is that the requirement to supply the REGON number will no longer apply to a foreign person who imports or exports goods provided that such a person has been granted the NIP number by a Polish tax office. This implies that foreign entities are now in a position to import and export commodities, as long as they have NIP numbers. This is particularly helpful for construction sites operated by foreign construction companies.
Although the prior Customs Code did not ban foreign entities from importing or exporting goods, the formal requirement to supply the REGON number on an S.A.D. (customs import document) effectively prevented foreign entities from acting as importers or exporters. The Finance Ministry had issued a letter allowing these entities to import and export commodities; however, the Central Customs Office did not share the ministry's approach, and often refused to allow import and export of goods.
Peter Ferrigno is a partner in the Warsaw office of Arthur Andersen. Aleksandra Kalinowska is a tax manager specializing in customs and indirect taxes.
