2. Preferential origin of incoming goods

Receipt of a nomination indicating preferential status

When sending a nomination for an inbound shipment, the customer may indicate that the product is eligible for preferential treatment upon import. This may be indicated explicitly in the nomination itself, or implicitly, by providing proof of preferential origin.

Purpose and use

Upon receipt of the goods for which preferential status is claimed by the customer, CS verifies the normally applicable import duty rate, referred to as the “MFN rate”. If the MFN rate of the product is 0%, the product is released for free circulation without claiming preferential tariff treatment, as there is no financial benefit in claiming preferential treatment for such products.

If the MFN rate exceeds 0%, CS will assess if preferential treatment can be claimed.

Reasonableness check

To assess if preferential treatment can be claimed, CS performs a reasonableness check. As part of this check, CS assesses the following:

Whether a free trade agreement or similar preferential arrangement applies between the European Union and the stated country or territory of origin;
Whether the product concerned is eligible for preferential tariff treatment under the applicable trade agreement, based on its commodity code;
Which form of proof is required under the applicable trade agreement;
Whether the proof of origin provided meets the applicable requirements; and
Whether the proof of origin can reasonably be linked to the goods concerned.

The reasonableness check is based on the information and documentation available to VTTI and does not constitute an independent audit of the production process, supply chain or originating status of the good.

The checklist for reviewing origin-related supporting documentation is available here.

Storage and registration in ERP

Where the proof of preferential origin provided by the customer is approved following the reasonableness check, CS stores the document in the Document Management System (part of VTTI's ERP) with a reference to the respective parcel. The data in the document that is needed in VTTI's business process is registered by CS in the Cargo Documents module in ERP.

Follow-up and escalation

Product eligible for preferential treatment is in principle directly brought into free circulation, as there is in principle no (financial) benefit in storing the product under the customs warehouse procedure.

Any doubt, ambiguity or apparent error identified during the reasonableness check is followed up with the customer. CS requests clarification, correction or additional supporting documentation as appropriate and does not rely on the proof of origin while material concerns remain unresolved.

Where the matter cannot be resolved by CS or requires further customs expertise, CS involves the terminal’s customs specialist. Depending on the complexity, potential financial impact or wider compliance implications of the matter, the terminal’s customs specialist may request support from CGT.

If no proof of origin is available, the proof does not appear to meet the applicable requirements or material concerns remain unresolved, preferential tariff treatment will not be claimed. The product will then in principle be stored under the customs warehouse procedure, until the customer sends a nomination to place the product under a different customs procedure.