Share with your friends

Trade and Customs News - Edition 4

Trade and Customs News - Edition 4

The Trade & Customs newsletter is designed to highlight changes in the global trade landscape.



Related content

shipping container

In this edition:

  • 1) Update on the Union Customs Code 
  • 2) Information Technology Agreement (ITA) extended 
  • 3) Update on the Generalized Scheme of Tariff Preferences (GSP) 
  • 4) Serbia joining the Common Transit Convention soon 
  • 5) Negotiations between the EU and Vietnam finally concluded 
  • 6) Bunkering sea-going vessels even when intermediaries are involved 
  • 7) Iran nuclear deal

1) Update on the Union Customs Code

On 23 September, the Committee on the Internal Market and Consumer Protection (IMCO) of the European Parliament will consider the final proposal of the European Commission on the Delegated Act. It is expected that in the course of October the European Parliament in its plenary session will decide whether or not to object the Commission’s proposal. In case the European Parliament and the Council do not raise objections against this proposal, the Customs Code Committee will subsequently vote on the final version of the Implementing Act of the Union Customs Code. It is expected that the Commission’s final version of the Implementing Act will be available somewhere in October.


If everything goes as planned, it is very likely that before the end of this year both the Delegated Act and the Implementing Act of the Union Customs Code will be published in the Official Journal. The Acts, along with the UCC, will be applicable as of 1 May 2016 onwards. 

2) Information Technology Agreement (ITA) extended

We refer to our Trade and Customs Newsletter – edition 3. Please find a link to the website of the WTO  (PDF 90kb) listing the new IT products which will benefit in the (near) future from a zero import duty rate.

3) Update on the Generalized Scheme of Tariff Preferences (GSP)

The European Commission proposes to remove Cameroon, Fiji, Georgia, Iraq, Marshall Islands and Tonga, as of 1 January 2017, from the list of GSP beneficiary countries. Note that this proposal will not affect Cameroon, Fiji and Georgia as these countries are already applying other preferential market access arrangements. As of 2019, Samoa will no longer qualify as a Least Developed Country (LDC) and therefore will lose its tariff and quota free access to the EU market.


The European Commission proposes to substantially increase the thresholds for the graduated product sections, as of 1 January 2015, due to the fact that China, Ecuador and Thailand have been removed from the list of GSP beneficiary countries as from that date. By doing so, the European Commission aims at maintaining proportionally the same weight of the graduated product sections. In the course of next year the European Commission will publish a list of countries and product sections which will be suspended from tariff preferences for a 3-year-period starting from 1 January 2017. It has to be seen, inter alia, whether the current graduated products sections for India and Indonesia will remain unchanged.

4) Serbia joining the Common Transit Convention soon

The European Commission tabled a proposal to allow Serbia to join the Common Transit Convention as of 1 December 2015 onwards. Please recall that the Former Yugoslavian Republic of Macedonia (FYROM) joined this Convention earlier this year. This will create new possibilities to move goods under the common transit procedure to these countries and to Greece. 

5) Negotiations Free Trade Agreement between the EU and Vietnam

After more than two years of negotiations, the EU and Vietnam have reached an accord on a comprehensive Free Trade Agreement (FTA) which eventually will lead to the scrapping of almost all EU import duties on products originating in Vietnam over a 7-year period. Vietnam will eliminate most of its import duties on EU originating products over a 10-year period. 


Now the texts will undergo legally scrubbing, will be translated in all EU languages and will eventually be put up for a vote (ratification process). It is expected that the FTA will be implemented somewhere late 2017 or early 2018. Note that by the end of this year, the EU (28 Member States) and ASEAN (10 Member States) might resume talks to reach an ambitious region-to-region FTA. 

6) VAT exemption may be applicable for bunkering sea-going vessels

The European Court of Justice (ECJ) ruled on 3 September 2015 that the VAT exemption for supply of fuel to vessels used for navigation on the high seas might, under certain conditions, be applicable in case intermediaries acting in their own name are involved in these transactions. 


In an earlier judgement the ECJ ruled that this VAT exemption is only applicable to the last stage of the commercial chain, meaning that supplies to intermediaries acting in their own name cannot benefit from the VAT exemption. This is true even if the ultimate use of these goods can already be established. 


However, in this case the ECJ ruled that the VAT exemption might be applied in the earlier stage(s) of the commercial chain in case the bunkering company directly pumps the fuel in the fuel tanks of the vessel and subsequently invoices the supplied quantities to the intermediary. It follows that the operator of the vessel is immediately entitled to dispose of the fuel whereas the intermediary has at no time been in a position to dispose of the fuel. As such, the supply of the bunkering company to the intermediary cannot be regarded as a supply to the intermediary but should be regarded as a direct supply to the operator of the vessel instead.


Depending on the factual circumstances, this judgement might have a positive impact on both bunkering companies and intermediaries involved in these transactions. 


Also for intermediaries in the aviation sector this might be an important judgement given the fact that a similar VAT exemption exists for airlines operating for reward chiefly on international routes.

7) Iran nuclear deal

In July 14, 2015, the E3/EU+3 (United States, United Kingdom, Germany, France, Russia and China) and Iran reached agreement on the final text of a Joint Comprehensive Plan of Action (JCPOA), which will ensure that Iran’s nuclear program will be exclusively peaceful. The JCPOA will produce the comprehensive lifting of all worldwide sanctions related to Iran’s nuclear program including steps on access in areas of trade, technology, finance and energy.


Under the JCPOA, the sanctions against Iran will be lifted in a phased approach. The milestones in this regard are as follows:

  1. Adoption day: is set for 90 days after the endorsement of the JCPOA by the UN Security Council. Beginning on that date, JCPOA participants will make arrangements and preparations for the implementation of their JCPOA commitments.
  2. Implementation day: is set for the day that the International Atomic Energy Agency (IAEA) has verified that Iran has taken all of the key nuclear-related steps stipulated in the JCPOA. This will result in the following:
    1. The EU will adopt a Regulation lifting most of its Iranian nuclear sanctions (e.g. assets freezes, restrictions on banking, restrictions in trade in oil etc.)
    2. The US will cease the application of (most) of their nuclear-related sanctions.
    3. The UN Security Council will pass a resolution that will nullify previous resolutions imposing sanctions on Iran.
  3. Transition day: is set for eight years from Adoption day (or earlier if the IAEA reaches the broader conclusion that all nuclear material in Iran remains in peaceful activities).
    1. EU: will lift any remaining sanctions
    2. US: will lift or modify their remaining sanctions.
  4. Termination day: is set for 10 years from Adoption day (provided that no UN sanctions have been reinstated). The UN will no longer be seized of the Iran nuclear issue.

With regard to the above, it is important to note that if at any time Iran fails to fulfill its obligations under the JCPOA, the sanctions will ‘snap’ back into place.


At this stage, it is unclear when ‘Implementation day’ will be. There are many factors that can influence this, such as the time needed by the IAEA to verify whether Iran has taken all of the key nuclear-related steps stipulated in the JCPOA, and the time needed to overcome any legislative hurdles (i.e. the US Congress). For this reason, it is unclear when the lifting of the sanctions will take effect. According to unconfirmed statements by EU officials, this will be in five to 10 months.


Until that time, the EU and US sanctions will remain in place, with the exception of the limited sanction relief agreed by the E3/EU+3 and Iran in the Joint Plan of Action (JPA). One of the more interesting examples of relief included in the JPA is the suspension of the prohibition on the import, purchase or transport of Iranian petrochemical products including related services (e.g. financing and insurance).


Companies can, in the meantime, consider what future opportunities may open up on the Iranian market. It is important to note that even once sanctions have been lifted, certain goods will remain subject to EU and/or US export control regulations and therefore will still require prior export authorization from the relevant authorities (Military and Dual-Use items). Companies should bear this is mind and take the necessary export control compliance measures.




© 2020 KPMG Tax and Legal Advisers, a Belgian Civil Cooperative Company with Limited Liability (burg. CVBA/SCRL civile) and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.

KPMG International Cooperative (“KPMG International”) is a Swiss entity.  Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm.

Connect with us


Want to do business with KPMG?


loading image Request for proposal