Publication date: January 22, 2025
Temporary admission is, due to its specific purpose, one of the categories of special procedures regulated by Regulation (EU) No 952/2013 of the European Parliament and of the Council of 9 October 2013 laying down the Union Customs Code (OJ L 269 of 10.10.2013, as amended, hereinafter referred to as the “UCC”). The temporary custom admission procedure allows for partial or total exemption from customs duties for the transport of non-Union goods intended for re-export. They are also not subject to other duties specified in other regulations and trade policy measures (unless they prohibit the introduction of goods into or exit from the customs territory of the Union). Works of art, in order to qualify for this procedure, must be: imported for a specific purpose; identifiable (except in justified cases) and re-exported within a specific period (this period is set by the relevant customs authority so as to enable the purpose of the import to be achieved).
The UCC in Article 260 exhaustively lists the conditions that must be met in order to apply this special procedure. These are:
Depending on the type of goods imported, one can apply for total or partial relief from customs duties. Total relief is granted to goods listed in Articles 208-216 and 219-235 of the Delegated Regulation to the Union Customs Code of 28 July 2015 (hereinafter referred to as “DA”). Article 235 subtly opens the catalogue, extending total relief to goods imported occasionally for a period not exceeding three months and goods imported in specific situations that do not have an economic effect in the Union.
Article 234 of the DA is particularly important for the procedure of temporary admission of works of art for auction purposes, as it exempts them from the need to pay import duties. According to the aforementioned article: “(…) Total exemption from import duties shall apply to:
In order to use the temporary admission procedure, it is necessary to obtain an appropriate authorisation from the customs authority (Article 211(1)(a) UCC). Such authorisation may be granted after meeting certain conditions, in particular: the possibility of exercising supervision by the customs authorities without the need to apply administrative measures disproportionate to the existing economic needs; appropriate use and organisation of the use of the goods; provision of security in accordance with Article 89 UCC and no negative impact on the interests of EU producers. Customs supervision during the temporary admission procedure is mandatory and lasts until its completion.
The permit may take various forms, depending on the method of submitting the application for the permit and the place of temporary import. The most formalised types of permits are the so-called full national and EU form. The full national form occurs when the permit is valid in the territory of one country, in this case Poland. The application should be sent to the head of the relevant customs and tax office. Another form, the so-called full EU form, is used for permits valid in more than one European Union Member State. In order to submit an application for the above permit, one must complete an electronic form on the EU Trade Portal and send it to the CDS system. We can also encounter an “abbreviated form”, which involves releasing goods for the procedure on the basis of a customs declaration, which is an application in a shortened form submitted to the customs and tax office competent to accept the declaration. Some goods can be declared for temporary import orally. Their list is included in art. 136 sec. 1 letter a-k of the RD. An oral application is submitted to the head of the border customs and tax office through which the goods enter the territory of the Union.
There are situations in which possession of appropriate international documents exempts from obtaining additional permission to apply temporary admission. Such documents are the ATA carnet and the CPD carnet. The ATA carnet is used for temporary transport of goods between countries that are parties to the ATA Convention or the Istanbul Convention (in Poland, ATA carnets are issued by the National Chamber of Commerce KIG). The CPD carnet concerns temporary admission of a means of transport, and is issued by PZM Travel based in Warsaw.
The last, most simplified form of declaring goods for temporary admission is, defined by art. 141 sec. 1 of the Customs Code, an action considered a customs declaration. This includes, among others, passing through the green lane or “nothing to declare” in a customs office where there is a two-lane system or placing a “nothing to declare” customs declaration sticker or plaque on the windscreen of a passenger car. The aforementioned art. 141 of the Customs Code contains a reference to articles listing goods that can be declared using this form.
In some cases, cultural goods (including works of art) are exempt from the requirement to obtain a permit for importing goods into the EU customs territory. This situation is regulated by Article 3(5) of Regulation 2019/880 on the introduction and import of cultural goods. According to the cited provision, a permit for the import of a cultural good is not required if it is to be exhibited at commercial art fairs. Under this regulation, the expression “import of cultural goods” means cultural goods subject to a special customs procedure – temporary admission.
Implementing Regulation 2021/1079 laying down detailed rules for the implementation of certain provisions of Regulation (EU) 2019/880 of the European Parliament and of the Council introduced certain requirements that commercial art fairs must meet in order to benefit from this exemption. This is motivated by the desire to avoid abuses by permanent sales outlets such as auction houses, antique shops or galleries. In connection with the above, Article 5 of Implementing Regulation 2021/1079 imposes on commercial art fairs the obligation to meet all of the following conditions:
The implementing regulation directly mentions a public auction as an entity that is not entitled to an exemption from obtaining a permit for the import of cultural goods, and therefore an auction house wishing to import a given work into the customs territory of the European Union must apply for a temporary admission permit in one of the traditional ways mentioned above.
Despite the complete exemption from customs duties, the transport of works of art in the territory of the Republic of Poland is not, as it might seem, free of costs. Article 77 paragraph 1 letter b of the UCC charges non-Union goods covered by the temporary admission procedure with exemption from import duties with a customs debt arising at the time of making the customs declaration. The debtor is the person making the declaration and also the person in whose name the declaration is made. In addition, the debtor is also the person who provided the data on the basis of which the exemption from customs duties was granted and knew or should have known that the information provided was not true. If there are several debtors, they are jointly and severally liable for the customs debt (Article 84 DA).
In order to ensure an appropriate level of security and fairness of the transport of non-EU goods, including works of art, the institution of security is used. Interestingly, it is not only the customs debt that has already been incurred that is secured, the security also covers the potential customs debt that may arise. And it arises, for example, in the event of failure to fulfil one of the obligations/conditions provided for in the customs law provisions concerning the temporary admission procedure contained, among others, in the aforementioned Article 260 UCC (Article 79 paragraph 1 letter a UCC), as well as in the event of providing false information to the customs authority in order to obtain an exemption from transport charges (79 paragraph 2 letter b UCC).
The costs incurred for the security are of course reimbursed after the correct completion of temporary import, but for the entire period of its duration, they remain frozen under the customs authorities monitoring them. The amount of the security is calculated on the basis of potential customs and tax liabilities that would have to be paid if the goods or work of art were introduced into circulation in the European Union. In order to properly determine the amount of the security, it is necessary to calculate the customs value of the work of art. The methods for calculating such a value are described in the UCC in Article 69 and subsequent articles. The most popular valuation method is the transaction method, which assumes that the customs value is equal to the price actually paid or payable for the goods when they were sold for export to the customs territory of the Union. Various costs related to the transport and sale of the goods, such as license fees, brokerage costs, etc. can also be added to this value. Importantly, transport costs incurred after the goods being transported have been introduced into the customs territory of the European Union cannot be included in the customs value. The purchase commission is also not included in the customs value.
The remaining methods of determining the customs value are described in Article 74 of the UCC. They should be applied if it is impossible to apply the transaction method in the order in which they are included in the provision. These are: the transaction value method of identical goods; the transaction value method of similar goods; the unit price method in the customs territory of the Union and the calculated value method. At the request of the declaring party, the last two methods may be swapped in order.
Due to the method of calculating customs value constructed in this way, despite the exemption from customs duties, importing works of art into the EU customs territory seems expensive. Due to their nature and artistic and cultural value, works of art enjoy recognition among people and constitute a kind of luxury good that increases the status of the owner. This and many other factors affect the high price of works submitted to auction. Since the work is only just going to auction, it means that its actual price is not yet known, which makes it impossible to use the transaction method of determining the customs value and one of the other methods should be applied. Such valuation can be based on the transaction value method of identical goods, for example by referring to other works by the same author sold on similar terms. In the case of using the transaction value method of similar goods, the price of works with similar features, quality and period of creation can be taken into account. The unit price method assumes taking into account the prices of similar works in circulation in the EU customs territory, excluding entities with connections to the current seller. Calculating customs value based on calculated value assumes including the costs of producing the work, transport, and costs that are usually included in the selling price of goods of the same kind or type. Much therefore depends on expert opinions and the estimated market value of a specific work of art.
Security for customs debt can take various forms, the most popular of which are a cash deposit and an obligation made by a guarantor. Other forms of security include, among others, the establishment of a mortgage, land debt, utility pledge; assignment of receivables, establishment of a pledge, combined or not combined with loss of possession, on goods, securities, receivables, a bank savings book or an entry in the state register of debtors.
It is worth emphasizing that the entire security amount is returned at the time of completion of the temporary import procedure. If the imported work of art is not purchased at the organized auction, the seller will recover the amount paid, provided that he does not violate any of the applicable regulations allowing him to use this customs procedure.
An exception to the requirement to pay security is the provision exempting public benefit institutions from this obligation (Article 89, paragraph 7, UCC). According to this provision, states, local and regional authorities and other public law bodies acting as public bodies do not have to provide security. The customs authority may also decide to waive the security if the amount of the obligation would not exceed the equivalent of EUR 1,000.
Deadline for application of temporary custom admission
The period for exporting goods, including works of art intended for auction, covered by temporary custom admission from the territory of the Union or placing them under a subsequent customs procedure shall be set by the customs authority in such a way that the purpose of import can be achieved (e.g. organisation and holding of an auction, organisation and the entire opening time of an exhibition). In principle, the maximum period for placing goods under temporary admission is 24 months, however, in exceptional circumstances, at the request of the person who obtained the authorisation, the customs authority may extend this period. The total period for placing goods under temporary admission may not exceed 10 years. (Article 251 UCC).
Closing of the temporary custom admission procedure
The temporary import procedure can be ended in several ways, namely: re-export of goods outside the EU customs territory, placing them under another customs procedure (e.g. inward processing) or regulating their situation in another way. The procedure is closed by re-export in the same form in which the goods were declared for placing under the procedure. If the original declaration was in written form, the declaration of closing the procedure should also maintain this form.
Customs regulations do not provide for a special method of settling customs clearance. Closing the procedure by declaring for another customs procedure does not require submitting additional settlements to the authorities. However, the customs office that granted the authorization and supervised the procedure throughout its duration also coordinates all control tasks aimed at determining whether it was closed correctly.
Failure to report the import of works of art to customs authorities
Failure to fulfil customs obligations is regulated both in the internationally binding UCC and in the Polish Fiscal Penal Code of 10 September 1999 (Journal of Laws 1999 No. 83 item 930).
The UCC establishes a general obligation to declare goods entering the customs territory of the Union. Goods from outside the customs territory of the Union must be presented to the relevant customs authorities immediately after their arrival in that territory by the persons obliged to do so. According to Article 139(1) of the UCC, those subject to this obligation include: the person introducing the goods into the customs territory of the Union; the person in whose name or on whose behalf the person introducing the goods into the customs territory of the Union acts; the person who has assumed responsibility for the carriage of the goods after they have entered the customs territory of the Union. The Union Customs Code itself does not regulate the penalties for breach of the obligation to declare non-Union goods into the customs territory of the Union, it only imposes an obligation on all Member States to regulate this issue (Article 42 of the UCC). Therefore, the penalties applied in different EU countries may differ. The UCC lists as examples of possible administrative penalties a pecuniary penalty and the possibility of modifying the permits held by the person committing the irregularity. It emphasises that the sanctions imposed should be effective, proportionate and dissuasive.
The Fiscal Penal Code is an act in force in the Republic of Poland penalizing fiscal crimes and misdemeanors. In accordance with the guidelines set out by the UCC, it contains provisions penalizing failure to report the import of goods into the customs territory of the European Union through the territory of Poland. Art. 86 § 1 of the Fiscal Penal Code states that anyone who fails to fulfill a customs obligation consisting, among others, in importing goods from abroad without presenting them to the appropriate customs authorities is subject to a penalty. The sanctions provided for by the Fiscal Penal Code are: a fine (up to 720 daily rates) and imprisonment. They may be applied individually or jointly.