Study Guide

6. Depots and Warehouses

6.2. Bonded Warehouses

Importers do not always know, at the time of importation, how their goods will finally be disposed of (for example, new motor vehicles). The bonded warehouse procedure gives importers a way to hold goods under Customs control while that decision is made, or while other conditions (such as obtaining a required permit) are met.

The scope of this procedure may not cover only imported goods. For example, some administrations allow goods that are liable to, or have been subject to, internal duties and taxes to be stored in a customs warehouse so that they may qualify for exemption from or repayment of those internal duties and taxes. Some administrations provide additional facilitation to the trade through a simplified warehousing procedure for special categories of goods, for example aircraft spare parts in the UK.

What Is a bonded warehouse?

Legal status of goods inside

• A licensed and regulated facility, operated by either the government or the private sector.

• Goods may be stored for a period after importation without immediate payment of duty.

• Both imported goods and domestic goods destined for export may be placed in a bonded warehouse.

✔ Imported into the country

✘ Not yet released from Customs

Goods are legally imported but remain under Customs control until formally released for home consumption or re-exported.

Placing goods in customs warehouses generally holds significant benefits for importers, such as:

Defer duty & tax Payment

Duties and taxes are assessed but not paid at the time goods enter the warehouse. Payment is deferred until goods are released for domestic consumption or exported.

Defer marking & labelling compliance

Compliance with certain requirements, such as marking and labelling, can also be deferred, continuing until the goods are released.

Manage uncertain disposal

When the final use or destination of goods is not yet known at importation (e.g. new motor vehicles), the warehouse allows time to make that decision.

Meet permit conditions

Goods can be held in a warehouse until the importer can meet the conditions relating to a required permit before release into home consumption.

Where a decision is made to place imported goods into a bonded warehouse, the importer or their representative is required to present to Customs a special import declaration for warehousing, along with relevant documents. The duties and taxes liable on the goods are assessed but not required to be paid. Prohibited goods, or restricted goods without required permits, are not permitted in a bonded warehouse.

The goods are then moved to the warehouse, where they are usually stored under strict guidelines prescribed in the warehouse license. To gain a warehouse license, an applicant must demonstrate a high level of security, good accounting processes, and provide a suitable level of financial security or bond. Customs will also conduct regular audits of bonded warehouses to ensure that the owners have properly accounted for all goods leaving the premises.

How the process works

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✔

Special declaration lodged

Importer or representative presents a special import declaration for warehousing plus relevant documents to Customs.

Duties assessed (not paid)

Customs assesses the duties and taxes payable, but payment is not required at this stage.

Goods moved to warehouse

Goods are transported to the licensed bonded warehouse and stored under strict guidelines in the warehouse license.

Release decision made

Importer decides: release into home consumption (duties paid), re-export (no duty), or continue storage.

What cannot be stored and how Customs oversee

✘ What Cannot Be Stored

• Prohibited goods; regardless of circumstances

• Restricted goods that do not have the required permits

✔ Customs Oversight

• Customs conducts regular audits of bonded warehouses

• Audits verify that owners have properly accounted for all goods leaving the premises

• Goods must be stored under strict guidelines in the warehouse license

Restrictions are also placed on the activities that can be carried out in bonded warehouses. These may include some of the following:

Allowed activities in a bonded warehouse

01 Cleaning	02 Sorting
03 Disassembling and reassembling	04 Inspecting and testing
05 Marking and labeling	06 Packing and packaging
07 Sample removal for orders

Goods can only be removed from the bonded warehouse when the correct duties and taxes have been paid or they are exported.

Reading 5: Revised Kyoto Convention, Specific Annexes D – Customs Warehouses and Free Zones

To view, please click on the following link: Text of the Revised Kyoto Agreement