PRE-ARRIVAL CUSTOMS PROCEDURES

Halil Osman KORAL
Customs Consultant

In the fast-paced world of global trade, delays caused by customs clearance and burdensome inspection procedures are not just inconveniences, they are barriers to progress. To support modern trade and transport procedures such as e-commerce and just-in-time operations, these delays must be minimized or eliminated. Governments all over the world recognize this need and are mobilizing to address it. Modernizing Customs Procedures is a crucial trade facilitation tool that can accelerate the process of starting and completing customs procedures, paving the way for a more efficient and dynamic global trade landscape.

Pre-arrival customs procedures, GATT 1994 VIII. It is a trade facilitation measure related to the Article (Fees and Formalities Connected with Importation and Exportation). Paragraph 1 (c) is particularly relevant: "The Contracting Parties also recognize the need to minimize the burden and complexity of import and export formalities and to reduce and simplify import and export documentation requirements."

The International Convention on the Simplification and Harmonization of Customs Procedures of the World Customs Organization (Revised Kyoto Convention), signed by our country in 2006, states in the 25th Standard of the General Annex 3 Section that "National legislation requires the issuance and registration or control of customs declaration and supporting documents before the arrival of the goods." A legal basis has been provided for pre-arrival customs clearance operations.

Pre-arrival customs procedures can be initiated by those who carry out foreign trade transactions, with a structure that ensures that the information required to complete the customs procedures is processed in advance and transmitted to the customs for completion immediately after the goods arrive in the country.

By launching a series of modernization initiatives in customs procedures, including pre-arrival customs clearance, from 1991 to 2006, Japan reduced the average release time for sea cargo from seven days to 2.7 and for air cargo from 2.2 days to 0.6, reducing overall customs clearance time by nearly two-thirds. Has reduced. Pre-Arrival Examination System in Japan, PAPS (Pre-Arrival Processing System) in the United States, and CHIEF (Customs Handling of Import and Export Freight) in the UK are examples of "Pre-Arrival Customs Procedures" practices.

In Turkey, we are on the cusp of a significant change. The first steps to start customs procedures before the arrival of the goods to the Turkish Customs Territory were taken with the 2018-2022 Strategic Plan of the Ministry of Commerce. With this plan, we aim to "make the risk analysis more comprehensive by concentrating the declaration and post-control stages by implementing the pre-arrival processing system". This is a promising step towards a more efficient and streamlined customs process in our country.

As of 23 April 2019, the Customs General Communiqué (Pre-Arrival Customs Procedures) (Serial No: 1) has come into effect. This means that goods coming to the Turkish Customs Territory via sea container transportation, within the scope of the Inland Processing Regime, are subject to Turkish Customs. The procedures and principles have been established to initiate the process before the goods arrive in the region.

By implementing this new customs procedure, we aim to bring forward the process of submitting customs declarations, prevent delays caused by the customs administration, and accelerate customs transaction processes. This is a significant step in compensating our exporters for time losses in foreign trade processes, particularly in the import of raw materials and intermediate goods. Additionally, it helps to mitigate additional costs that may arise, such as transportation, storage, terminal, and demurrage expenses. Ultimately, this initiative is designed to support production and exports, providing tangible benefits for your business.

When the regulation is examined, it is seen that goods arriving in our country via sea container transportation can benefit from this facility, while goods arriving in bulk by other means (such as land, air, and railway) or by sea cannot benefit from this facility. Another critical issue is that the goods that will benefit from this communiqué must be raw materials and intermediate products that can be used as inputs in domestic production in the GTIP list determined by the General Directorate of Customs. The application is limited to the Entry to Free Circulation and Inland Processing Regime, and as an exception, a declaration can be registered within the scope of pre-arrival customs clearance for goods subject to the Temporary Import Regime for the transportation or packaging of goods within the scope of the permit.

Authorized Economic Operator Status (AEO) holders can directly benefit from this application without needing any application. At the same time, companies that do not have AEO can apply to the nearest Customs and Foreign Trade Regional Directorate as they are registered in the trade registry.

As a result of the application, listed in the 1st paragraph of Article 4 of the notification,

• Being resident in the Turkish Customs Territory,
• Members of the Board of Directors, real persons who own more than ten percent of the capital, and employees who have the authority to represent them in customs and foreign trade transactions must not have a penalty or conviction for the crimes specified in the relevant article or for opposing the Laws specified in the relevant article,
• Ensuring conditions regarding irregularities and tax penalties,
• Submission of the sworn financial advisor report concluded with a positive opinion,
• Having achieved actual exports of at least five million FOB/US dollars per year within three years retrospectively,
• Giving a commitment that the goods imported within the scope of the permit will be used in production and/or manufacturing

Industrialists who meet the conditions are given permission to benefit from the provisions of the Pre-Arrival Customs Procedures Communiqué, valid until the last day of the third year following the calendar year following the year in which the permit was granted.

The customs declaration to be registered within the scope of the permit must cover all the goods in the relevant line of the summary declaration and the container containing the goods must contain only goods belonging to the same buyer. The declaration control type (line notification) of the processed customs declarations is not notified to the taxpayers until the arrival notification approval. The control of the declaration is carried out in terms of the accuracy and compatibility of the declaration and annexes of the goods (Yellow Line) or without being subject to document control (Green Line). It is possible for the customs declarations in question to be directed to physical examination (Red Line) by the Customs administration for any reason until the approval of the arrival notification, and the goods for which it is learned that the control type of the declaration is red line together with the approval of the arrival notification are not evaluated within the scope of the permit.

Containers can be exited from the field without recording the temporary storage entry and exit of goods within the scope of the declaration, which are processed on the yellow and green lines and become "closed" in the Free Circulation Regime and "closeable" status in the Inward Processing Regime, and the goods in the containers are not allowed to be unloaded within the port area.

As a result, with the application of "Pre-Arrival Customs Procedures", the time spent by goods under customs supervision will be reduced compared to traditional customs control, risk criteria can be determined more effectively by transmitting the necessary data to customs administrations, and customs administrations will increase the effectiveness of customs controls by planning in advance. From the perspective of foreign traders, it will provide a significant advantage in terms of international competitiveness due to time and cost savings.

SOURCE

• World Customs Organization, “International Convention on Simplification and Harmonization of Customs Procedures/WCO Revised Kyoto Convention” (http://www.wcoomd.org/en/Topics/Facilitation/Instrument and Tools/Conventions/pf_revised_kyoto_conv/Kyoto_New)
• Letter of the General Directorate of Customs dated 05/08/2019 and numbered 46373109
• Official Gazette, (January 23, 2019), “Customs General Communiqué (Pre-Arrival Customs Procedures) (Serial No: 1)”, Number: 30664.
• C. Ministry of Commerce General Directorate of Customs, (08 April 2019), “Pre-Arrival Customs Procedures Circular”, Issue: 2019/12
• C. Ministry of Commerce General Directorate of Customs Import and Origin Department, (2019), “Pre-Arrival Customs Procedures Guide Vers.02”.
• UNCTAD, (2006), “Trade Facilitation Handbook Part II Technical Notes on Essential Trade Facilitation Measures”, United Nations, New York and Geneva.
• UNCTAD, (2011), “Technical Note: Pre-arrival Customs Processing”, (TN/TF/15) 3. (https://unctad.org/en/Docs/TN15_PreArrivalClearance.pdf)
• Web1: https://ticaret.gov.tr/duyurular/varis-oncesi-gumruk-islemlerini-ekecek-gtipler
• Ministry of Commerce 2018-2022 Strategic Plan
• Web2: http://strateji.gtb.gov.tr/data/51ed4387487c8e119845533a/Stratejik Plan Web.pdf
• Web3: https://www.shipafreight.com/knowledge-series/customs-processing/

QUESTIONS AND ANSWERS

Question 1. Can the taxes paid be refunded if the summary declaration to which the closed status customs declaration is based is canceled or changed, processed within the scope of the pre-arrival customs clearance permit?

Answer: If the summary declaration in question is canceled or amended, the declaration in closed status can be canceled, and an application for return can be made within the framework of the relevant article provisions of the Customs Law and Customs Regulation.

Question 2. Within the pre-arrival customs clearance permit scope, can the declaration be registered only within the scope of the Free Circulation and Inward Processing Regime? What procedure will be followed when a temporary import permit is obtained for the goods used in the transportation or packaging of the goods together with the goods within the scope of the license?

Answer: With Circular No. 2019/12, it is possible to register a declaration within the scope of the Pre-Arrival Customs Procedures Communiqué for the goods subject to the temporary import regime for the transportation or packaging of the goods within the scope of the permit, and the temporary import goods in question should not be directed to the red line just for the reason of identification.

Question 3. Can the goods in the incoming container be unloaded within the port area within the scope of Pre-Arrival Customs Clearance?

Answer: According to the letter of the General Directorate of Customs dated 05.08.2019 and numbered 46373109, the goods contained in the containers subject to the customs declaration processed within the scope of Pre-Arrival Customs Clearance (BS-18) are not allowed to be unloaded within the port area.

Question 4. Where can you apply for a Pre-Arrival Customs Clearance permit?

Answer: Authorized Economic Operator Status holders can directly benefit from this application without needing any application. At the same time, companies that do not have AEO can apply to the nearest Customs and Foreign Trade Regional Directorate as long as they are registered in the trade registry.

Question 5. What are the items that will benefit from Pre-Arrival Customs Clearance?

Answer: The list of goods that will benefit from the said application is determined by the General Directorate of Customs and announced on the Ministry of Commerce's website.