The UK’s exit of the European Union on 30 December 2020 has triggered a new relationship between the EU and UK and despite tariff-free trade being the headline success of the Trade and Cooperation Agreement (TCA), significant issues have already arisen for companies that previously traded seamlessly across the EU and UK.

Many companies move goods from continental EU Member States, to the UK, and onwards to another EU Member State, often the Republic of Ireland (ROI). Due to the customs border between the EU and UK, this means goods have to complete customs formalities and pay duty on goods that cross this border twice.

The issue is mitigated for exporters of originating goods that can claim preference under the TCA on the first EU to UK movement and hence pay no customs duty on this first import. However, in order for the goods to be re-imported from the UK to the EU, the goods must again meet the relevant rules of origin in order to be originating and hence be imported with zero customs tariffs.

For a vast number of companies, meeting the rule of origin for the UK to EU movement (especially the to the ROI) has not been possible due to the lack of further processing on these goods once they are in the UK. This means that a number of companies have been unable to benefit from tariff free trade between the UK and ROI, even though the goods qualified for preference under the TCA upon import from the EU to the UK.

Last week, Irish Revenue published updated guidance (see here) setting out a number of ways that this double-duty issue can be mitigated:

  1. Claiming Returned Goods Relief

For goods that have been originally exported from the EU and have not received a treatment other than (i) treatment altering their appearance or; (ii) necessary treatment to repair them, restore them to good condition or maintain them in good condition, Irish Revenue has confirmed that these goods can be re-imported to the EU (ROI) without paying customs duty and VAT again by claiming RGR.

In order to claim RGR, this must be stated on the import declaration. The importer must present the original proof of export from the EU and if the goods are re-imported by a different economic operator than the entity that completed the export formalities, import VAT is chargeable.

Specifically for goods re-imported into ROI, the following documents are required by Irish customs:

  1. Export declaration (if the first export was from ROI to the UK);
  • Returned goods information sheet (INF 3) completed by the competent authorities in the exporting EU Member State (if the first export was from another EU Member State than the ROI); and
  • Proof that the goods have not been altered (this can be satisfied through the inventory system or other means of tracking the import, storage and re-export from the UK of such goods).

Please note that the VAT relief only applies for goods re-imported into the EU by the same economic entity that originally exported the goods out of the EU. Goods subject to SPS checks will be treated as an import from a third country on re-import into the EU and hence full customs controls will apply.

2.  Using Transit and Customs Warehousing Procedures

Irish Revenue has also confirmed that another possible solution to re-mitigate tariffs would be to move the goods into the UK under the T2 transit procedure and then store them in a UK customs warehouse before re-import to the ROI.

Under the common transit rules between the EU and the UK, goods can be moved under transit from the EU to the UK and then back the ROI without duty having to be paid at both borders. Once the goods are brought into the UK, they can be stored in a UK customs warehouse to keep their EU origin before being re-imported into the ROI tariff-free. 

The EU Commission’s “Transit Manual” (see here) provides that, where EU goods have been brought into the territory of a “common transit country” (i.e., the UK) under the T2 transit procedure, the EU goods must be re-consigned under that same procedure provided the goods fulfil the following conditions:

  • the EU goods have remained under the control of the customs authorities in the UK to ensure there is no change to their identity or state;
  • the EU goods have not been placed under any other customs procedure other than transit or warehousing while in the UK (except where the goods are temporarily admitted to be shown at an exhibition or on public display);
  • the T2 or T2F declaration or any document which evidences proof of the customs status of the EU goods issued by a common transit country should contain the MRN (Movement Reference Number) of the declaration.

It should be noted that EU goods which are stored in a customs warehouse in a common transit country must be re-consigned to the EU within five years (or six months for goods referenced in Chapters 1-24 of the Harmonised System) provided that the goods were stored in special spaces and have received no further treatment except for (i) preservation to ensure they maintained their original state; or (ii) the splitting up of consignments without replacing the packaging.

Please note that there are requirements associated with this, including the need for a customs warehousing authorisation from HMRC. For any EU originating goods that are animals or animal products, they will lose their EU Sanitary and Phytosanitary (SPS) status if unloaded. To re-enter the EU, they would therefore need to meet the EU SPS import requirements and be certified by a UK Official Veterinarian.

3.  Applying for Inward Processing Relief

Companies can apply to HMRC for relief from the Inward Processing Procedure. If granted, this allows goods to be imported from the EU for processing/manufacturing under customs supervision and then be re-exported to the EU (ROI) without paying UK customs duties. Note that if the goods are released for free circulation in the UK, the UK customs duties would be payable.


Jennifer Revis is a Partner in the Firm's EU Competition and Trade Practice Group in London. She is acknowledged for her timely advice and responsiveness by the Legal 500. Jennifer focuses her practice on the public regulation of international trade, particularly in a wide range of compliance issues such as customs, trade sanctions, anti-bribery and corruption. She regularly advises clients on import and export matters, including customs valuation, rules of origin, classification, export controls and trade sanctions. She has conducted on-the-ground due diligence reviews for clients, both as part of an M&A process and as part of a general internal compliance assessment. She has worked with clients designing and implementing their compliance programs, policies, procedures and risk assessments.