Outward processing is an EU special customs procedure that lets you temporarily export Union goods to have them processed, worked on, assembled or repaired outside the EU, then re-import the resulting products with total or partial relief from import duties. In general, duties apply only to the value added abroad. The procedure requires prior authorisation and a re-import deadline.
What is the procedure for?
A machine goes abroad for repair; components are sent for assembly; fabric leaves for finishing. Without a special procedure, the returning product is treated as an ordinary import.
French Customs describes outward processing as processing goods outside the EU with a view to re-importing them with total or partial relief from import duties (outward processing fact sheet). The European Commission notes that it helps businesses benefit from, for example, lower labour costs or specific technical expertise outside the EU (European Commission).
This does not mean automatic relief from every tax or a preferential tariff under a trade agreement.
Conditions for authorisation
According to French Customs, the exported Union goods must be identifiable in the processed product (the product that comes back), and granting the authorisation must not harm the essential interests of EU operators.
The European Commission adds that applicants must be established in the EU customs territory and provide assurance that operations will be properly conducted.
Authorisation and deadlines
Two periods should not be confused:
- Authorisation validity, which cannot exceed five years, and three years for goods listed in Annex 71-02 of the Delegated Act.
- The discharge period, meaning the deadline to re-import. It is set according to the time needed for processing and transport, and can be extended on a justified request, even after it has expired.
Note: if re-import happens after the deadline without an extension request, the operator loses the benefit of the procedure (French Customs).
How are duties calculated on re-import?
Except for free repairs, import duties on re-imported products are calculated only on the value resulting from the processing carried out outside the EU, according to the European Commission.
For ad valorem duties (a percentage of value), French Customs sets out the method: take the customs value of the processed products on the date the declaration is accepted, and deduct the statistical value of the temporarily exported goods. A different formula applies to specific duties (charged, for example, by weight).
Warranty repairs
Total relief from import duties must be granted when goods were exported solely to be repaired free of charge, because of a contractual obligation or a manufacturing or material defect (European Commission). A paid repair follows the value-added calculation.
Outward vs inward processing
| Outward processing | Inward processing | |
|---|---|---|
| Goods | Union | Non-Union |
| Where processing happens | Outside the EU | In the EU |
| Flow | Temporary export, then re-import | Import, then re-export or free circulation |
| Benefit | Total or partial relief from import duties on re-import | Suspension of duties, VAT and commercial policy measures |
| Authorisation | Yes | Yes |
For the opposite case, where non-Union goods are processed in Europe, see inward processing.
Prepare both legs together
Before export, identify the goods, work and provider. Plan the references that will link re-imported products to exported goods: serial numbers, lots, descriptions and repair or processing evidence. The HS code of the goods on the way out and on the way back is part of what to check.
Ask the declarant which formalities and calculation bases apply. Warranty repairs are treated differently from paid processing.
Retain the journey’s records
Keep the authorisation, export declaration, service invoice and return documents. Transport management helps teams coordinate both journeys while customs owners follow the procedure’s conditions.
Frequently asked questions
What is outward processing?
It is a customs procedure that lets you temporarily export Union goods for processing or repair outside the EU. On their return, the products benefit from total or partial relief from import duties.
How are duties calculated under outward processing?
In principle, on the value added outside the EU only. For ad valorem duties, French Customs uses the customs value of the re-imported products minus the statistical value of the exported goods.
Is a warranty repair subject to customs duties on re-import?
Not to customs duties, subject to conditions: total relief from import duties must be granted when goods were exported solely for a free repair, due to a contractual obligation or a manufacturing or material defect. Import VAT follows its own rules.
What is the re-import deadline?
It is set in the authorisation according to the time needed for processing and transport. It can be extended on a justified request; without an extension, late re-import means losing the benefit of the procedure.
What is the difference between outward and inward processing?
Outward processing covers Union goods processed outside the EU and then re-imported. Inward processing covers non-Union goods processed in the EU.