Italy Export: Special Provisions
Free Trade Zones (FTZs)
Italy has multiple free trade zones (FTZs). They include:
- Free Zone of Trieste (Punto franco di Trieste)
- Free Zone of Venice (Punto franco di Venezia)
- Free Zone of Portovesme (Zona Franca doganale di Portovesme)
FTZs are specially designated areas within the customs territory of the European Union (EU) where goods of foreign origin can be brought in without payment of taxes or duties, as long as the material is to be used in the production or assembly of a product that is exported. Italy's FTZs are of Control Type I, meaning that they are supervised by customs and have a perimeter fence; goods placed there are automatically under the free zone regime. Some benefits of these zones include:
- Customs duties are deferred for 180 days from the time the goods leave the free trade zone to enter another EU country
- The goods may go free of any customs restraints
- A company of any nationality may employ workers of the same nationality under the country’s labor laws and social security
Customs Warehousing
Non-EU goods can be held in customs warehouses until the owner of the goods chooses to re-export them or pay the applicable duties and taxes. Only goods declared under inward processing or processing under customs control can undergo substantial processing in a customs warehouse. For all other goods, processing is limited to preservation and storage.
Institute for Insurance and Credit to Export (Istituto per i Servizi Assicurativi e il Credito all'Esportazione or SACE)
The Institute for Insurance and Credit to Export (Istituto per i Servizi Assicurativi e il Credito all'Esportazione or SACE) provides a wide range of insurance and financial products and services for exporters as well as for banks for their daily business in Italy and abroad. Through a comprehensive range of insurance, financing, and credit-management products, the SACE can guarantee more stable cash flows. In addition to credit insurance, the SACE provides integrated credit management solutions, such as the protection of investments, sureties and financial guarantees for commercial and financial transactions, as well as offering arrangements for project and structured finance.
International Road Transport (Transports Internationaux Routiers) or TIR Convention
Administered by the United Nations Economic Commission for Europe (UNECE), the International Road Transport (Transports Internationaux Routiers) or TIR Convention is a multilateral treaty created on November 14, 1975, to simplify and harmonize the administrative formalities of international road transport. The 1975 convention replaced the TIR Convention of 1959, which itself replaced the 1949 TIR Agreement. With more than 50 countries using the procedure, the TIR system is the international customs transit system with the widest geographical coverage. A handbook on using TIR Carnets is available from the UNECE at www.unece.org/DAM/tir/handbook/english/newtirhand/TIR-6Rev11e.pdf.
As with other customs transit procedures, the TIR system enables goods to move under customs control across international borders without the payment of the duties and taxes that would normally be due at importation (or exportation). A condition of the TIR procedure is that the movement of the goods must include transport by road.
Goods move from a customs office of departure in one country to a customs office of destination in another country under cover of an internationally accepted customs transit document, the TIR Carnet, which also provides a financial guarantee for the payment of the suspended duties and taxes. The guarantee system is managed by the International Road Transport Union or IRU (www.iru.org).
Although each EU member state is a contracting party to the TIR Convention, the EU is considered to be a single territory for the purposes of the TIR procedure. This means TIR can only be used in the EU for international movements (where the movement either starts or ends in a third country, or where the goods move between two or more EU member states via the territory of a third country).
The IRU's TIR-EPD (https://tirepd.iru.org) is an electronic application that enables TIR Carnet holders to submit electronic pre-declarations (EPD) to customs authorities in different countries. With TIR-EPD, customs authorities are able to confirm that the pre-declaration was submitted by an authorized TIR Carnet holder and that the TIR Carnet is valid. This exchange of advance information facilitates pre-arrival risk analysis and makes border crossings simpler, safer, and faster. A TIR-EPD user guide is available at www.iru.org/system/files/TIR-EPD%20User%20Guide%20ENG.pdf.
EU Free Circulation Principle
Under the free circulation principle, goods legally imported from a country outside the EU are allowed to circulate freely throughout the EU, as goods originating from a member state are allowed to do. This procedure changes the status of non-EU goods to EU goods and it entails the completion of all import procedures. Goods are entered for this procedure by a customs declaration.
Single Authorization
Single Authorization is permission to use the customs administration in one EU member state to process the entry of goods for other member states. Application for the single authorization is filed using the application form of the member state where the main accounts of the applicant are held. Single authorization can be used, subject to agreement between member states, in a variety of situations:
Successive Processing Operations
When successive customs processing operations will be carried out in different member states, the declarant may submit a request for single authorization in the member state where the first such operation is carried out. The application must include all particulars of the sequence of operations and the exact places where they will be carried out.
Where processing is to be carried out under a job-processing contract between two persons established in the EU, the application shall be lodged by or on behalf of the principal.
Single Authorization for Processing in Location of Applicant's Accounts
If the applicant's accounts are held in a state other than the one where goods are to be customs cleared, the applicant may request single authorization in the state where the accounts are held to have customs procedures carried out in the state where to goods are to cleared.
Same Customs Procedure in Multiple Member States
Goods from outside the EU that are imported into multiple EU member states for the same customs processing require only one authorization.
Single Authorization for Temporary Import
Application for a single authorization for temporary import can be made by means of a customs declaration, including use of an ATA (Admission Temporaire / Temporary Admission) Carnet or Carnet de Passage en Douane (CPD Carnet). If the country of first use differs from the country of entry, the declaration must be submitted to the country of first use, and the ATA or CPD carnet must be submitted to the country of entry.
Outward Processing
Outward processing applies to materials exiting the EU to be processed outside the EU for re-import into the EU When the goods re-enter the EU for free circulation, duty is paid only on the value added to the goods after processing abroad.
Processing Under Customs Control
This procedure allows imported goods to be processed into products subject to a lower duty rate. The aim is to facilitate processing activities in the EU.
New Computerized Transit System (NCTS)
The New Computerized Transit System (NCTS) is a computerized transit system based on an exchange of electronic messages. The first fully computerized customs system, the NCTS is available to all EU and European Free Trade Association (EFTA) countries as well as the UK, Turkey, and North Macedonia. It replaces the various paper documents and certain formalities now required by customs offices, and will apply to both internal (EU) transit and external transit, regardless of the mode of transit (with the exception of simplified transit procedures where a commercial document serves as the transit declaration).
The NCTS tracks goods at certain points along their route including:
- Customs office of departure
- Customs office of destination
- Customs office of transit (the customs office at the point of entry or exit to or from the customs territory of the EU)
It is also noted when a change in the customs office of transit or destination is made.
Intrastat and Eurostat
In the Intrastat system, each EU member state maintains a register of intra-European Union operators (consignors and consignees). Operators with an annual trade volume of a certain value provide the required trade data; all other operators are exempt from reporting requirements. Member states are required to report this statistical information to Eurostat monthly.
Information the operator must report includes:
- Identification number allocated to the party responsible for providing information
- Reference period
- Flow (arrival, dispatch)
- Commodity, identified by the eight-digit code of the Combined Nomenclature (CN)
- Partner member state
- Value of the goods in the national currency
- Quantity of the goods in net mass (weight excluding packaging) and the supplementary unit (liter, m², number of items, etc.), if relevant
- Nature of the transaction
Excise Movement and Control System (EMCS)
Traders in alcoholic beverages, tobacco, and energy products benefit from the Excise Movement and Control System (EMCS), a computerized system for monitoring movements of excise goods under suspension of excise duty within the EU. The system simplifies procedures and provides for paperless administration and tracking of the shipment; notification of the goods' arrival at their destination is received promptly.
Economic Operator Registration and Identification (EORI)
The Economic Operator Registration and Identification (EORI) scheme assigns a unique reference number to every economic operator who interacts with the customs authorities in any European Union (EU) member state; the number is valid throughout the EU. The EORI system has two separate and distinct parts. One element is at the national, or member state, level; the other is at EU level.
National EORI System
At the national level, each customs authority assigns a unique identifying number (the EORI number) to each trader who interacts with customs. Traders are required to use this number in all customs declarations lodged by them or on their behalf, irrespective of the member state where those declarations are lodged.
Central EU EORI Database
Customs authorities are required to provide details of all those traders who are assigned an EORI number to the EU. These details are held on a central EU database maintained by the EU that also contains similar information provided by the other member states.
The central EU database has a public-facing feature that allows agents to view certain limited details of all EORI registered traders (i.e., EORI number, name, and address) on behalf of the importer. This feature allows the agent to carry out some customs activity (such as making a customs declaration) on behalf of a trader provided the EORI number is known. However, database access by the agents is allowed only when a trader has given specific and informed written consent for the publication of those details.
The website of the European Commission provides a free online training course on the EU's EORI program as well as EORI validation.
Note that the EORI, which is required for all traders, is distinct from the Authorized Economic Operator (AEO) scheme, which is a voluntary program.
Authorized Economic Operator (AEO)
Authorized Economic Operator (AEO) programs, implemented by an increasing number of customs administrations throughout the world, are based on the customs-to-business partnership introduced by the World Customs Organization or WCO (www.wcoomd.org). The voluntary AEO scheme creates customs-to-business partnerships aimed at securing the supply chain and facilitating legitimate low-risk trade. AEO are examined at the border significantly less than regular cross-border traders.
AEO status can be granted by participating countries to any established economic operator that meets criteria in the following categories: customs compliance, appropriate record-keeping, financial solvency, and where relevant, security and safety standards. AEO status granted by one EU member state is recognized by other members. AEO are allowed to make use of simplified customs procedures when importing goods to the member state granting AEO status. While the same benefits may not be available when importing to other member states, those states generally allow economic operators with AEO status to use some simplified procedures.
The application for AEO status is submitted through participating customs agencies. Economic operators can apply for AEO status to have easier access to customs simplifications and make it easier to comply with new security requirements.
Additional information on the EU's AEO program is available on the European Commission website. For details on the implementation of AEO programs worldwide, consult the WCO's AEO compendium at www.wcoomd.org/-/media/wco/public/global/pdf/topics/facilitation/instruments- and-tools / tools / safe-package / aeo-compendium.pdf.
Mutual Recognition of AEO
Mutual recognition of AEO is a key element of the WCO's Standards to Secure and Facilitate Global Trade (SAFE Framework). The 2021 version of the SAFE Framework strengthens cooperation between customs and other government agencies; promotes smart security devices to optimize customs control and effectively monitor the movement of goods in a real-time basis; and includes baseline provisions on the development of AEO programs and implementation of mutual recognition.
By mutual recognition of AEO, two customs administrations agree to:
- Recognize the AEO authorization issued under the other program
- Provide reciprocal benefits to AEO of the other program
The EU has mutual recognition of AEO programs with Norway, Switzerland, Japan, Andorra, the United States, and China. In addition, the EU and WCO are helping prepare a number of other countries to implement AEO programs.
Note: The above information is subject to change. Importers and exporters are advised to obtain the most current information from a customs broker, freight forwarder, or the local customs authorities.
Sources: European Commission (www.ec.europa.eu); US Department of State (www.state.gov); United Nations Treaty Collection (https://treaties.un.org); Italian Customs and Monopoly Agency (Agenzia Dogane e Monopoli or ADM) (www.adm.gov.it)
Article written for World Trade Press by Brielle Burt, Jennifer Goheen, and Nina Bellucci.
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