Action needed now to preserve the 'first sale for export' customs duty valuation benefit

November 23, 2015


The new Union Customs Code (UCC) raises a number of fundamental issues for businesses importing goods into the EU, including the removal of first sale for export (FSFE) customs valuation, changes to the treatment of unconnected third party royalty payments, and the potential need to have Authorised Economic Operator (AEO) status in order to benefit from certain customs simplifications and reliefs

Under the new rules, effective from 1 May 2016, the EU definition of ‘transaction value’ for import will only allow ‘one sale’ (also referred to as the ‘last sale’) as the basis for establishing the customs value. This last sale is defined as ‘the sale immediately before the goods are brought into the territory of the EU’, meaning that it will no longer be possible to use a 'first sale' transaction value.

But the UCC also contains a transitional measure, (‘sunset clause’), under which a business bound by a binding contract concluded prior to 20 days following the publication of the UCC delegated acts (expected mid December 2015) can continue to use FSFE valuation until 31 December 2017. In an important recent development, the wording of this transitional provision has been amended, so that it is no longer necessary for contracts to specify a particular first or earlier sale price for the goods i.e. state a contract value per item. But, the contract must refer to an earlier sales value being used as the basis for the customs value for the goods imported into the EU. This is a welcome improvement on the original version, as contracts don’t often specify particular item pricing, therefore the revised wording should facilitate a broader application of the transitional arrangements.

Businesses importing goods into the EU may wish to understand the impact these changes will have on their customs duty costs and review their contracts now ahead of these fundamental changes. For more details contact Matthew, Jo, Haider or me. Please find the contact details below.


Matthew Clark

e: [email protected]

p: +44 (0)20 721 24143


Jo Bello

e: [email protected]

p: +44 (0)20 780 43147


Haider Hatteea

e: [email protected]

p: +44 (0)11 893 83088


Christine O'Malley

e: [email protected]

p: +44 (0)16 124 52429