Since the entry of the Slovak Republic into the European Union, the customs system has had to adapt to constant changes in the economic and in social conditions. Customs issues in the EU and, by implication, also in the Slovak Republic have seen significant changes as the traditional fiscal role of customs is gradually replaced by a greater emphasis on security and the protection of citizens.
In recent years, the Slovak customs authorities have been greatly influenced by the increased need for reliable fulfilment of customs supervision tasks and the enforcement of customs offenses, and efforts to improve the administration of excise duties are still ongoing. Since the entry of the Slovak Republic into the EU on 1st May 2004, the customs authorities have also been the exclusive administrator of all excise duties (duty on mineral oil, duty on alcoholic beverages, duty on tobacco products, and duties on electricity, coal and natural gas); prior to this date, the customs authorities were only responsible for the administration of duties on mineral oil. The customs authorities are also responsible for the administration of value added tax on goods imported into the EU from third-party states.
The Customs Section of the Financial Administration of the Slovak Republic performs a number of roles related to Slovakia’s participation in the single customs area of the EU and also in connection with the fact that the Slovak-Ukrainian border forms an external border of the EU with five border crossing points. In the field of customs administration, the customs authorities carry out the following roles:
- Securing the economic interests of both the Slovak Republic and the EU,
- Fiscal activities in the field of fulfilling the revenue and expenditure elements of the public budgets of both the Slovak Republic and the EU,
- Prevention of infringements of customs and tax regulations,
- Administration of value added tax on imported goods and of excise duties,
- Protecting the well-being of citizens,
- Combating illegal activities in cross-border trade.
Customs union
The legislation of customs has been fundamentally changed since the entry of the Slovak Republic into the EU, as this field is regulated to a considerable degree by EU legislation.
This is a consequence of the fact that the EU forms a customs union which includes:
- The prohibition of customs duties on the import and export of goods between Member States,
- The prohibition of all charges which have the same effect as customs duties,
- The prohibition of all duties of a fiscal character,
- The adoption of common customs tariffs with respect to third-party states.
The customs union also includes a common customs system for goods traded with third-party countries (i.e. non-EU countries) and the abolition of regular checks at internal border crossing (i.e. borders between individual EU Member States).
The EU-wide customs union ensures a unified trade policy, the protection of the internal market, citizens and territories, and the safeguarding of the fiscal interests of both the EU and its Member States. The following instruments are used to ensure that all of these goals are met:
- Customs procedures, i.e. procedures and activities of customs authorities and relevant parties involved in import and export,
- Tariff measures – customs duties,
- Trade policy.
Customs law
The basic legal provisions of EU customs law and the customs legislation of EU Member States in the field of customs can be found in Regulation (EU) 952/2013 of 9th October 2013 establishing the Customs Code of the European Union (hereinafter referred to as ‘the Customs Code’), which came into effect on 1st May 2016. This Regulation replaced Council Regulation (EEC) No 2913/1992 of 12th October 1992 establishing the Community Customs Code which had taken effect from 1st January 1994. Together with the Customs Code, the provisions of Commission Delegated Regulation (EU) 2015/2446 and Commission Implementing Regulation (EU) 2015/2447 lay down detailed rules for the practical implementation of the Customs Code. These legislative acts, which form the core of EU customs law, were harmonized into Slovak law with the introduction of Law No. 199/2004 Coll. The Customs Act and the Amendment of Certain Laws as Amended (hereinafter referred to as the “Customs Act”).
The customs tariff schedule for 2017 is governed by Commission Implementing Regulation (EU) No. Amending Regulation (EEC) No 2016/1821 amending Annex I to Council Regulation (EEC) No 2658/87 on the tariff and statistical nomenclature and on the Common Customs Tariff.
Regulation (EC) 638/2004 of the European Parliament and of the Council of 31 March 2004 on Community statistics relating to the trading of goods between Member States provides for a system of statistical monitoring (INTRASTAT) which allows the collection, processing and provision of data on goods which are the subject of trade activities between Member States.
Union Customs Code
The updated Union Customs Code has introduced a number of changes, mainly in the field of customs special procedures. The term ‘customs special procedures’ is a new concept and covers the following customs procedures:
- Customs Warehousing,
- Free Zones,
- Inward Processing,
- Outward Processing,
- Transit,
- Temporary Admission,
- End Use.
Related to these changes is the fact that the application of any customs special regime is conditional upon the provision of a guarantee for a customs debt and the customs authorities will not be able to waive the guarantee after the verification of the entity, regardless of whther the subject is reliable.
Under the Customs Warehousing procedure, non-EU goods may be stored under customs control in premises or other locations approved for such use by the customs authorities. Customs warehouses may be available for the customs warehousing of goods for anyone (i.e. a public warehouse) or for the storage of goods by the holder of a customs warehousing permit (i.e. a private customs warehouse).
A Member State may designate parts of the EU customs territory as Free Zones by defining its territory and identifying entry and exit points. Both EU and non-EU goods can be stored in Free Zones for unlimited periods.
The modernized Customs Code introduced significant changes for the system of Inward Processing. This system had previously offered two options, the return system and the conditional procedure, but as of 1st May 2016, the return procedure no longer applies. The conditional procedure has been merged with the customs clearance procedure under customs supervision, which implies that the Inward Processing procedure can be terminated by re-exports of refined products but also by release for free circulation.
The Outward Processing procedure allows EU goods to be temporarily exported from the customs territory for the purpose of undergoing processing operations. Goods which have been issued authorization for Outward Processing may be re-imported by the person who exported the goods or by other individuals with the consent of the authorization holder. Such goods may be subject to partial or total relief from import duties upon re-importation.
The basic procedures of Transit at the point of despatch and receipt remain unchanged, with only a list of sensitive goods being dropped. Customs seals are mandatory and must meet all safety criteria. The customs office of the departure location may specify prescribed routes for all types of goods if that customs office or the holder of the procedure considers it necessary.
Non-EU goods to be re-exported may be subject to the Temporary Admission procedure if they are the subject of a specific use within the customs area of the EU. This may relate to goods with total or partial relief from import duties.
Under the End Use procedure, goods may be released for free circulation with relief or reduced duty on the basis of their specific use. The authorization holder is obliged to use the goods for the purposes set out in the application for relief or a reduced rate of duty or to transfer that duty to another person under the conditions laid down in the authorization issued by the relevant customs authorities.
Customs supervision
The concept of customs supervision is defined in Art. 5 (27) of the Customs Code as an activity carried out in general by the customs authorities in order to ensure compliance with the customs rules and, where appropriate, with other provisions applicable to goods subject to such activity. Non-EU goods are under customs control upon entry into the customs territory and remain so until their customs status changes. Therefore, customs supervision is a complex legal regime to which all goods imported into or via the territory of the Slovak Republic are subject. It also forms a combination of several traditional customs activities which are mutually complementary.
A wide range of activities relating to customs supervision are used by the Financial Administration of the Slovak Republic to regulate customs law. According to customs law, goods transported across the customs border of the EU and also across the borders of the free zones within the territory of the Slovak Republic are subject to customs supervision, while the decisive legal moment of the legal commencement of the customs supervision regime is the point at which goods cross the external border of the EU.
In terms of customs law, customs supervision is carried out through:
- Customs procedures,
- Customs checks including post-release checks,
- Other customs procedures in line with customs legislation.
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