• the placing of the goods under the relevant customs procedure or into temporary storage, and
• the discharge of that procedure or storage.

The basis for the identification of the relevant goods and the reference amounts

1. The list of Goods are verified on the basis of the Commodity codes. Wherever ITR felt, based on industry practice and experience Commodity codes were missing, these were added. The estimated quantities for these Commodity codes were extrapolated on the basis of other similar Goods;
2. The list of Goods does not include a listing per (special) customs procedure. It is industry practice that all incoming Goods are declared for Customs warehouse first. After an Inward Processing is completed, the Goods are again declared for Customs warehouse. This procedure has two consequences in the context of identifying quantities and calculation the related reference amounts:
   • Where from an entry into the Terminal point of view the Goods physically arrive once, the same quantity (molecules) can be declared for Customs warehouse and/or Inward processing multiple times. To cover this, margins are applied to calculate the reference amounts;
   • Because of the unknown if Goods will be processed or not, all quantities are deemed to be processed.
3. The quantities reported by the Customer are in Metric Tons Air (MTA). As it concerns a prognosis, these quantities are used for calculations even where the legal based for levying duties is a different Unit of Measurement (UoM) than Kilograms (KG). For example, in the event ethanol is included in the calculations, where the UoM for calculating customs duties is Hectoliters (HL) and the basis for Excise duties is L20 Celsius (L20), the MTA quantities as mentioned are used for the calculations. The same applies for mineral oils where the UoM for calculating Excise duties is L15. For the calculation of Excise duties for ethanol, the alcohol percentage is relevant. For the purpose of calculating the absolute alcohol percentage is deemed 100%;
4. The customer provided estimates in terms of customs status, where for certain Goods a percentage is included to give a prognosis on the quantities of non-Union customs status and the quantities of Union customs status. Given the volatile nature of our industry we have deemed the estimated quantities provided to reflect the non-Union customs status to be on the 'safe side'. Regardless, we will implement internal controls to monitor the quantities declared for Inward Processing to ensure that these declarations fall within scope of the license;
5. It is anticipated that Ethanol, an agricultural product falling within the scope of Annex 71-02 UCC-DA, is processed at the Terminal. This is a common process in the industry, also taking into account the sustainability objectives set out by the European Commission, whereby ethanol is added to fuels. The inclusion of ethanol in the Inward Processing license is subject to meeting economic conditions. As ITR is not the Owner of the Goods, all operations qualify as Toll manufacturing. The toll manufacturing is a service provided to a non-EU established customs. On this basis the economic conditions are deemed to be met. Please find a deeper analysis under this link. Should the validation of these standpoints lead to any potential delay in the process of obtaining the Inward Processing license, ITR will exclude the ethanol from the application to avoid any delays, as a consequence, two sets of calculations are made available:
   • A calculation including ethanol, with the result that the license period taken into account is 3 years instead of the default 5 years because of the ethanol being included;
   • A calculation excluding ethanol, with the result that the license period taken into account is the default 5 years.

Method of calculation

1. The data received from the customer lists various Goods, where multiple Goods are included that have the same Commodity code. And Goods are listed under an 8 digit Commodity code (CN) and under a 10 digit Commodity code (Taric); 
2. To prepare for making the calculations, the list of data is made consistent by listing each Good by a CN code;
3. On the basis of step 2 a Pivot table is created whereby quantities are accumulated on the basis of the CN code;
4. On the basis of step 3 all CN codes are allocated a Tariff Heading to accommodate the accumulation of quantities on that basis;
5. All quantities are accumulated on the basis of the Tariff Heading and set off against:
   • The throughput quantity based on the contract, which is a minimum of 12 throughputs of the total capacity of the terminal (i.e. 1.3 mln m3). The total estimated quantities provided by the customer per Good compared to the throughput is a factor 1,5 (roughly). Considering the contractual throughput a factor 1,5 is applied to the quantities as provided by the customer on a Goods level to include a sufficient margin;
   • An estimated price per Metric Tons based on market values available through public sources (e.g. Imarc group and Chemanalyst) to calculated an estimated value per Tariff Heading per year;
   • The highest percentage of customs duties applicable for Goods on the basis of its CN code within the Tarif Heading. For example, out of all CN codes under Tariff Heading 2710 the highest import duty percentage is 4.7% whereby this percentage is applied for the value calculated under Tariff Heading 2710;
   • The highest amount of Excise duties applicable for Goods on the basis of its CN code within the Tarif Heading. For Tariff Heading 2710 the highest Excise duties apply to the Light oils with HS code 271012. Considering taxation on Volume, where the calculations thus far are based on mass, a 'density correction' is applied on the basis of a density of 0;8 for the Tariff Headings where the excise duties are mostly calculated on the basis of volume;
     
   • VAT 21%. The reference amount is to be calculated in relation the the import duties, including customs duties, excise duties and VAT.
6. The sum of Customs duties, Excise duties and VAT results in the reference amounts per Tariff Heading;
7. Considering the likelihood of Goods being declared for a customs procedure multiple times, a factor 2 is applied;
8. All Tariffs applied are the taxes applicable at the moment of making the calculation.

1. For Customs warehouse the reference amount is recalculated under the Column Reference amount (Non-Union customs status %), based on the % of non-Union versus Union customs status as indicated by the customer (Tab, 1 - Input Trafi (qty conv). The period of discharge applied for Customs warehouse is 13 weeks.
2. For Inward processing (3 year duration license) the reference amount is multiplied by 3 to cover the period of the license. In the column Reference amount (Non-Union customs status %) the % of non-Union versus Union customs status is applied, as indicated by the customer (Tab, 1 - Input Trafi (qty conv). The period of discharge applied for Inward processing is 4 weeks.
3. For Inward processing (5 year duration excluding ethanol) the reference amount (excluding ethanol) is multiplied by 5 to cover the period of the license. In the column Reference amount (Non-Union customs status %) the % of non-Union versus Union customs status is applied, as inidicated by the customer (Tab, 1 - Input Trafi (qty conv). The period of discharge applied for Inward Processing is 4 weeks.
4. For Release for free circulation EIDR the Reference amount is based on market experience of 1% of the Customs warehouse quantity being customs cleared, considering a period of 6 weeks in which any debts are assumed to be settled. In the column Reference amount (Non-Union customs status %) the % of non-Union versus Union customs status is applied, as indicated by the customer (Tab, 1 - Input Trafi (qty conv). The period of discharge applied for Release for free circulation EIDR is 6  weeks.
5. For Release for free circulation Normal Procedure the Reference amount is based on market experience of 1% of the Customs warehouse quantity being customs cleared, considering a period of 6 weeks in which any debts are assumed to be settled. In the column Reference amount (Non-Union customs status %), the % of non-Union versus Union customs status is applied, as indicated by the customer (Tab, 1 - Input Trafi (qty conv). The period of discharge applied for Release for free circulation Normal Procedure is 6  weeks.
6. For Transit the Reference amount is based on market experience of 2% of the Customs warehouse being loaded under Transit, considering a period of 6 weeks  in which the transit movements will have ended. In the column Reference amount (Non-Union customs status %), the % of non-Union versus Union customs status is applied, as indicated by the customer (Tab, 1 - Input Trafi (qty conv). The period of discharge applied for Transit is 6  weeks.
7. For the Excise warehouse the Reference amount is calculated in the tab Excise warehouse Lic appl. Since the reference amount, after the maximum reduction of 95% stil exceeds the cap of EUR 9mln, the guaranteed amount is based on the cap.
8. In the column Guarantee amount after reduction the amounts are calculated applying the maximum reduction possible based on the AEO-C license, resulting in the actual amounts that are expected to have to be set as guarantee.