Recently, the European Commission launched a guidance to the use the of the transaction value and the royalties and license fees. We will focus on the transaction value first as this is the transition that will affect most companies. To be clear about the status the EC immediately states that the guidance is not legally binding and is only of an explanatory nature. ‘The purpose is to ensure a common understanding for both customs authorities and economic operators’. ‘Moreover, the guidance is limited. Guidance on the full range of valuation topics in the UCC will follow in due course’.

There was a lot of confusion about the new customs valuation rules. It was not possible to consider that an actual sale took place when the goods are imported on consignment, or were imported by branches of the same company which are not separate legal entities, goods imported under a hire or leasing contract. Furthermore, sales which are domestic sales within the EU do not qualify as sales for export to the EU.

The first situation that is dealt with is when a sale occurs within an EU bonded warehouse. The EC states that this sale can be used as basis for the customs value when:
–          there is no sale for export occurring immediately before the goods were brought into the customs territory
–          the sale within the bonded warehouse is not a domestic sale
–          there are no restrictions as to the disposal or use of the goods by the buyer

The examples given are as follows:

Sales within EU bonded warehouse (BW)

A (non-EU) > B (EU company, sale within BW) > C (EU company, sale within BW) > EU clearance

In this situation the sale between A and B can be used to determine the customs value. The sale between B and C cannot be used as this is a domestic sale (occurring between two EU residents). It is not a sale for export.

A (non-EU) > EU bonded warehouse > EU customer
Two solutions apply:
–          when the sale between A and the EU customer occurs before clearance this sale must be used as the basis for the customs value
–          when the sale occurs after clearance, the goods are cleared in the name of A, the customs value must be determined in accordance with a secondary valuation method.

Practical examples

Sales for export (I)







Three sales are applicable:
–          from manufacturer A to dealer B
–          from B to importer C
–          from C to final customer D

The goods are directly shipped from A to C. The sale between B and C must be used to determine the customs value.

Purchase order trial







  1. Customer A orders a car with dealer B
  2. Dealer B orders the car with NL Car company C
  3. C sends the order to manufacturer D
  4. D sells the car to EU Car import company E
  5. E clears the car and sells to B after clearance
  6. B sells the car to customer A

The sale between D and E provides the basis for the application of the transaction method.

Sales for export (II)








The goods are sold by A to B while they are in temporary storage in the EU. B onward sells the goods to C, also in temporary storage. The sale between A and B must be used for the determination of the transaction value.

Sales for export (III)








In this situation there is no sale available at the time the goods enter the EU customs territory. The sale occurred while the goods are in the bonded warehouse is the basis for the determination of the transaction value.


To our relief the EC has brought some light in the darkness regarding the use of the transaction value. First and foremost, domestic sales are not considered as a sale for export following the UCC rules on the transaction value. This has a huge impact on so-called back to back orders. It basically reintroduces the first sale for export regime a little bit again. Unfortunately, the EC only focusses on sales within a bonded warehouse in this guidance. It is to be seen how it responds to other topics that pop up in the near future. It is also to be seen how customs authorities will respond in case it comes to audits and additional assessments. As for now, the guidance doesn’t have any legal status.


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