This month we highlight recent court criticism of HMRC seeking to push forward adverse classification regulations that could cost your business significant sums.  This practice is usually shrouded in secrecy with businesses having a voice.  I would welcome any occasions when you have suffered as a result of these practices so we can seek to make some change. 

We are also reporting on a court decision that sheds light on how to classify parts and accessories.  This touches on the fundamental tension in classification between what something is made of and what it does.

HMRC Exploiting an Uneven Playing Field

The customs authorities are frequently circumventing due process and seeking to impose unfavourable classification regulations on businesses by taking disputed items to a closed Committee for decision by their peers from other Member States.

One of the corner-stones of the customs regulations is uniform application across the EU in matters of classification, origin, valuation and duty relief etc.  Important steps have been taken over the years to support the principle of uniformity and certainty, including setting up a database of classification rulings so that businesses and customs authorities across Europe can view all Legal Classification Rulings (otherwise known as BTI).

There are times when customs authorities in the various Member States hold different views on customs matters and in these cases there is a forum for them to meet and resolve these differences and formulate a unified EU response to complex classification issues.  These deliberations can eventually result in Classification Statements, amendments to the CN Explanatory Notes and Customs Regulations.  The first two are non-binding, classification regulations are binding, directly applicable law.

In principle we support the idea of consistency throughout the EU.  However, we have some grave misgivings on how this mechanism works in practice.

 Please read the full article.....