Customs Procedure Codes, Demystified

As an importer or exporter, you’ll already know that customs procedures can be complex and confusing. One of the most crucial aspects of international trade is understanding Customs Procedure Codes (CPCs). These codes are essential for completing accurate declarations and ensuring that goods are correctly classified and cleared for circulation.

At clearBorder, we understand the importance of CPCs in international trade. As leading international trade consultants, we provide independent and expert advice to ensure our clients’ ongoing compliance with customs regulations.

In this article, we will demystify CPCs and help you understand their significance. We will define key terms, explain the different types of CPCs, and discuss the importance of accurate CPC completion.

What Exactly is a Customs Procedure Code?

Customs Procedure Codes are used in international trade to allow customs to identify the purpose for an import or export. With this information, goods are entered into (and/or removed from) an appropriate customs and/or excise regime. A CPC is a series of numbers and letters that represent which particular procedure or action is required when importing or exporting goods.

In essence, it is a way of telling customs officials what actions need to be taken with the goods that are being imported or exported.

Customs Procedure Codes are used for a range of situations, including:

• Importing goods into the UK from outside the EU
• Exporting goods from the UK to outside the EU
• Moving goods between different customs procedures (e.g., from a customs warehouse to a free zone)
• Applying for customs authorisations or approvals
• Completing customs declarations

CPCs are used to determine whether goods are eligible for duty relief and/or suspension of import duties. They also inform HMRC of how charges should be collected (where applicable).

There are many variant codes available for use, each representing a specific customs procedure or action.

Why Do CPCs Matter in Cross-Border Trading?

CPCs ensure that goods are classified correctly for customs purposes and that the correct procedures are followed. Entering the wrong CPC can result in delays, additional costs, or even seizure of goods.

It’s essential to understand which CPCs apply to your imports and exports. They must be entered correctly when completing customs declarations. Compliance with customs regulations is crucial for successful international trade, and can help to avoid costly penalties or legal issues.

The Different Types of CPCs

Customs Procedure Codes are used to provide information about the type of action being taken with respect to the goods, such as import, export, or transit.

CPC codes are also used to help determine the correct level of duty and taxes payable on the goods.

There are many variant CPC codes: for a full list, consult the UK government’s Customs Procedure Codes page. Some examples are as follows.

• 05: Free circulation with simultaneous entry under an inward processing procedure (other than those referred to under codes 02 and 51).
• 07: Free circulation with simultaneous entry of the goods under a warehouse procedure.
• 10: Permanent dispatch or export.
• 21: Temporary dispatch or export under customs outward processing procedure (other than that referred to under code 25).
• 22: Temporary dispatch or export under an outward processing procedure (other than those referred to under codes 21 or 25).
• 23: Temporary dispatch or export for return in an unaltered state.
• 31: Redispatch or re-export of goods which are not in free circulation.
• 40: Home use with simultaneous entry for free circulation.
• 41: Home use with simultaneous entry for free circulation for the inward processing procedure (drawback system).
• 42: Home use with simultaneous entry for free circulation of goods subject to a zero rated onward supply.

Source: CHIEF: Customs Procedure Codes

Note: For clarity, we’ve reproduced HM Revenue & Customs information directly. The same codes apply for CDS. If you’re interested in discussing any of the finer details, or finding out how to use these codes correctly, do not hesitate to get in touch. 

The Significance of CPCs in Import & Export

Customs Procedure Codes enable the customs authorities to determine the appropriate import/export procedures, including the amount of duties and taxes to be paid. In addition, the CPC also provides information about the goods being traded, which is important for security and safety reasons.

For importers, the correct CPC code will speed up the customs clearance process, which is crucial for timely delivery of goods. Customs must be able to establish the duties and taxes which apply before the goods will be released for delivery.

For exporters, CPCs are equally important – they help to ensure that the correct export procedures are followed, and that the goods reach their destination safely and on time.

CPCs also provide valuable information for trade statistics. This contributes to the tracking of trade patterns, analysis of market trends, and development of trade policies. Data such as this helps to inform government policy, support business decision-making, and facilitate international trade negotiations.

3 CPC Example Use Cases

Correct use of CPCs is  essential for importers and exporters who want to ensure that their goods move through UK borders quickly and without delays. Here are three example use cases that illustrate the importance of CPC codes in international trade:

1. Temporary admission: A company needs to import machinery for a limited period to complete a project. They use a CPC code for temporary admission, which allows them to avoid paying customs duty and import VAT. Once the machinery has been used for the project, it will be re-exported using a different CPC code (for export purposes).
2. Inward processing: A manufacturer imports raw materials to produce finished goods for export. They use a CPC code for inward processing, which suspends customs duty and import VAT until the finished goods are exported. This allows the manufacturer to reduce their costs and maintain competitiveness in the international market.
3. Customs warehousing: A company imports goods, but is not yet ready to pay customs duty and import VAT or release the goods into free circulation. They use a CPC code for customs warehousing, which allows them to store the goods in a customs warehouse without paying duty and VAT. The goods can be held in the warehouse for up to 90 days, giving the company time to arrange payment or arrange for the goods to be exported.

In all of these cases, using the correct CPC code can result in significant cost savings and reduced administrative burdens. It is essential to understand which CPC code to use for each specific situation (in some cases, authorisations may be required) – this is the best way to ensure smooth customs clearance and avoid any unnecessary delays or additional costs.

File Every Customs Declaration with Confidence

As we’ve seen, the procedure applied to your import or export goods can vary significantly, depending on the nature of the goods and their intended use. In order to ensure smooth and seamless processing, it’s vital to ensure you utilise the correct CPC.

But it’s not only codes that affect the success and sustainability of your cross-border operations. It might be that you’re looking to implement a training programme to mitigate trading risks and enhance your customer experience; in which case, our Border Ready Importing and Exporting course is made for you.

Alternatively, Border Ready Food and Animal Products is there to help ensure your operational teams understand exactly what is required when trading food and animal products.

Whatever the case, you can have faith in clearBorder’s expert and bespoke consultancy services, giving you access to unparalleled insight in customs and border processes, government and data. Simply contact us today to find out how we can help.