Goods that are placed under a customs warehousing procedure can be re-exported at a later time without import duties being levied beforehand. The use of this procedure is especially advisable when it is uncertain whether the goods should remain in the Union. Goods can be repackaged in a customs warehouse and shipped to other customs territories. Import duties are only incurred if the goods are released from the customs warehouse into the Union. The customs warehouse is also suitable as a temporary storage facility for non-Union goods before they are placed under another customs procedure (e.g., processing).

Customs warehousing procedure

The customs warehousing procedure provides the possibility to defer the incurrence of import duties and the application of trade policy measures until the end of the storage period (Art. 237 para. 1 UCC). The procedure is therefore particularly applied when non-Union goods are brought into the customs territory of the Union and it is not yet clear at the time of import what will happen with them.

The customs declaration and the presentation of the goods must take place at a customs office specified in the authorization. If this customs office raises no objections during the inspection, the goods are released for the customs warehousing procedure and must be transported directly to the customs warehouse. There, the goods must be recorded in the inventory records. Throughout the entire storage period, the goods are under customs supervision. As long as the goods are in the customs warehouse, they may generally not be changed, except for treatments customary for storage. A definitive list of such activities is contained in Annex 71-03 UCC-DA (Art. 220 UCC in connection with Art. 180 UCC-DA). If the goods are to undergo active processing in the customs warehouse (Art. 241 UCC) or be temporarily removed from the warehouse (Art. 240 para. 3 UCC), authorization must be obtained.

In principle, the goods can be stored in the customs warehouse for an unlimited period, Art. 238 para. 1 UCC. In special cases, customs authorities may limit the storage time, for example, if longer storage would pose a danger to living beings or the environment, Art. 238 para. 2 UCC. If the goods are released from the customs warehousing procedure for free circulation, the customs debt arises at the time the customs declaration is accepted, Art. 77 para. 1 lit. a) UCC.

Removal from the customs warehouse without the appropriate customs declaration or authorization also leads to the incurrence of import duties according to Art. 79 para. 1 lit. a) UCC.

The customs warehousing procedure ends as soon as the goods are placed under another customs procedure (e.g., declaration for release for free circulation or re-export).

Locality of a customs warehouse

A customs warehouse is any physical facility or other designated area authorized by the customs authorities where the warehouse keeper, usually the authorized person or for the authorized person, can store non-Union goods. The holder, also known as the licensee, needs authorization to operate such a customs warehouse. The goods stored in the customs warehouse are under customs supervision throughout the entire storage period.

The types of customs warehouses are as follows:

1.    Public customs warehouse
a.    Public customs warehouse type I
b.    Public customs warehouse type II
c.    Public customs warehouse type III
2.    Private customs warehouse

1.   Public Customs Warehouse

a.    Public Customs Warehouse type I

A public customs warehouse of type I (cf. Art. 203 lit. a) UCC-DA) can be used by anyone. The licensee (for the operation of a public customs warehouse) is jointly responsible with the procedure holder (declarant of the goods in the customs declaration) for the proper implementation of warehousing (cf. Art. 242 para. 1 UCC, Art. 1 no. 32 UCC-DA). In Germany, it is not possible to transfer responsibilities to the procedure holder (cf. Art. 242 para. 2 UCC, DV VSF Z 0514, para. 3270, p. 1).

The responsibilities include the duty to prevent goods from being removed from customs supervision. Furthermore, compliance with the obligations arising from the storage of goods under the customs warehousing procedure must be ensured (Art. 242 para. 1 UCC). These mainly include the proper storage and the keeping of inventory records. Inventory records are a core component for enabling customs supervision (Art. 5 no. 27 UCC, Art. 178 UCC-DA). They must be kept in accordance with proper accounting principles (DV VSF Z 0514 para. 3270).

b.    Public Customs Warehouse type II

Public customs warehouse type II differs from type I in that the obligations lie solely with the holder of the procedure.

c.    Public Customs Warehouse type III

In public customs warehouse type III, responsibilities lie neither with the licensee nor with the holder of the procedure. This warehouse is operated by the customs authorities. They are also responsible. This type of warehouse can also be used by anyone.

2.    Private Customs Warehouse

In contrast, in a private customs warehouse, it is not possible for just anyone to store goods. Only the licensee may use the warehouse. The licensee must therefore always also be the holder of the customs procedure (Art. 242 para. 1 UCC). The status of procedure holder is independent of the right of disposal and the ownership of the stored goods. The procedure holder is the person obliged by the customs declaration to place the goods under the customs warehousing procedure (Art. 5 No. 35 UCC). After authorization, the private customs warehouse can be managed by a third party (Art. 218 UCC).

3.    Authorization Procedure

The authorization procedure and requirements are identical for all types of warehouses, except for public customs warehouses type III.

a.    Formal Requirements

The authorization must be applied for in writing according to Art. 211 para. 1 lit. b) UCC. As part of the application process, comprehensive information on the premises, storage, and inventory management must be provided. The authorization is only granted if the applicant can guarantee compliance with customs obligations. Granting of the authorization depends on the provision of a security by the applicant (Art. 211 para. 3 lit. c) UCC).
The main customs office where the applicant's main accounting for customs purposes is kept is responsible for granting the authorization (Art. 22 para. 1 subpara. 3 UCC in conjunction with sec. 24 para. 4 of the Germany Customs Directive).

b.    Material Requirements

• Residency: First, the applicant must be established in the customs territory of the Union (Art. 211 para. 3 lit. a) UCC).

• Provision of the necessary guarantees: The applicant must also guarantee the proper conduct of the operations (Art. 211 para. 3 lit. b) UCC). This is the case if customs and tax regulations are complied with, and an appropriate accounting system as well as practical or professional competence for operating a customs warehouse are available (Art. 39 lit. a), b), and d) UCC).

• Economic Need: The applicant must demonstrate an economic need (Art. 211 para. 6 UCC). This need is regularly present if there is an intention for VAT optimization.

• Customs Feasibility: Moreover, the necessary monitoring and control measures must be feasible (Art. 211 para. 4 lit. a) UCC). Customs feasibility is ensured by precisely defining the content of inventory records (Art. 178 para. 1 lit. e) UCC-DA, Art. 214 para. 1 UCC; DV VSF Z 0514 para. 3521).

• Proportionality of Administrative Effort: Furthermore, the administrative effort associated with the supervision must not be disproportionate to the economic need for storage (Art. 211 para. 4 lit. a) UCC).