Outward processing

What is outward processing in customs? Definition

Outward processing is a customs procedureA customs procedure is the set of administrative steps, formalities, and obligations imposed by the customs authority fo… [+] allowing the temporary export of Union goods for processing, repair, assembly or working in a third country, and the subsequent re-importation of the resulting products with total or partial relief from customs duties.

Outward processing is the opposite of inward processing: goods leave the Union territory to be processed abroad, then return.

Outward processing operates according to a regulated process: the company temporarily exports Union goods to a third country for processing, then re-imports the processed products. To access duty relief, the exported Union goods must remain identifiable within the composition of the re-imported compensating product. The granting of the procedure is conditional on the exported goods being identifiable in the final product and the authorisation not adversely affecting the essential interests of European Union operators.

The regulatory framework for outward processing is harmonised within the European Union. The procedure requires prior authorisation from the customs authority, a detailed supporting file, a temporary export declaration, and a re-importation declaration. The validity period of the authorisation cannot exceed five years. Outward processing is intended for companies engaged in specific international processing operations.

Context of use

Outward processing applies to specific processing operations abroad:

• Repair or overhaul of complex goods (machinery, equipment) carried out in specialised third countries;
• Working or finishing of products carried out in partner countries with specific expertise;
• Mounting or assembly of partial components in third countries according to technical specifications;
• Treatment or processing of raw materials carried out in countries with specific capacities;
• Modification or improvement of finished products carried out by foreign specialised providers.

Practical challenges of outward processing in customs

The use of outward processing involves significant administrative and operational obligations:

• Mandatory prior authorisation: outward processing requires formal prior authorisation from the customs authority and a complete supporting file.
• Identification required: exported goods must remain identifiable in the re-imported processed product; any disappearance or fusion leads to loss of the procedure’s benefits.
• Fixed yield rate: the rate or method for determining the yield (quantity required for a given production) must be defined in the authorisation.
• Limited discharge period: re-importation must occur within the initially fixed period; exceeding this without an extension leads to loss of duty relief.
• Formal declarations required: mandatory temporary export declaration and re-importation declaration, with supporting documents.
• Calculation of duties on processing: if re-importation is late, duties become due on the value of the processing operation carried out.
• Holder’s responsibility: the company holding the authorisation assumes full responsibility for compliance with the conditions.

How CUSTOMS via conex™ simplifies outward processing

Our customs clearance software CUSTOMS via conex™ automates the complete management of outward processing:

• Management of authorisation requests via TP-CDS
• Monitoring of discharge periods and alerts
• Generation of temporary export and re-importation declarations
• Accurate calculation of duties based on processing costs
• Complete archiving of the authorisation file

With CUSTOMS via conex™, your outward processing is controlled and compliant. You orchestrate your foreign processing; we secure your customs clearance.

Associated terms

• Inward processing
• Special proceduresSpecial procedures are specific customs regimes that allow for the differentiated treatment of imported or exported good… [+]
• Customs authorisation
• Traceability of goods