An airworthiness certificate (AWC) allows the duty free importation of parts and components used in the maintenance and construction of civil aircraft. Until now, UK Customs has taken the position that an AWC must only be used for direct imports, however, from 1 June 2013, it will be permissible to use an AWC for removals from a customs warehouse.
Typically, suppliers of aircraft parts need to hold large stocks in order to facilitate minimum aircraft ‘downtime’. Relief from Customs Duty has, until now, depended on the physical availability of the AWC at the time of importation, and has not been applicable where goods have been shipped without an AWC. Consequently, aircraft parts suppliers have been faced with either payment of customs duty at the point of entry, or where applicable, claiming end-use relief. As end-use relief is only available for certain aircraft parts, and is subject to rigorous conditions, which in themselves have presented compliance challenges for importers, this change of approach will be welcome news for the aviation industry.
The change will enable aircraft parts suppliers operating a customs warehouse to benefit from AWC’s obtained after the importation of the goods and will either remove the necessity for payment of Duty or remove the need to use end-use relief with all of the related compliance requirements.
This affects all products which are the subject of an AWC, of a kind to be incorporated in or used in the manufacture, repair, maintenance, rebuilding, modification or conversion of civil aircraft.
Importers of these products now have an opportunity to extend the benefit of AWCs to products removed from a customs warehouse.
Aircraft parts suppliers should consider implementing customs warehousing. The benefits of operating a customs warehouse are many including the fact that goods entered to such a warehouse are not deemed to be imported until such time as they are removed from the warehouse and entered to free circulation. Not only can this facility assist with cash flow, suppliers of aircraft parts can now remove the onerous compliance requirements of operating under the end-use relief regime.
Aircraft parts suppliers already operating a customs warehouse should ensure that AWC’s are available at the time of removal if duty payments are to be avoided.