A new procedure description has been developed for declaration of split shipments applicable to both import and export. The value of split shipments shall be determined and classified as they appear on import/export. The end product of the split shipment shall appear in column 44.
|Note: An update of this article is pending. Please note that some terms and/or references may differ from the Movement of Goods Act and the Customs Duty Act that enters into force from the 1st of January 2023.|
On 1 January 2020, Norwegian Customs is introducing a new procedure description to be used when declaring split shipments.
Split shipments shall be declared in accordance with the following options:
1. Split shipments are declared as they appear:
- This means that the value of the goods shall be determined, cf. the Norwegian Customs Act Section 7-10 to 7-18 and classified in accordance with the HS Convention, as they appear on import/export. When declaring, a pro forma invoice with reference to agreement/contract of sale may be submitted.
- The end product made up of the split shipments and the agreement/contract number shall be stated in column 44 under the code DEL, cf. the Norwegian Customs Regulations Sections 4-20-1 (4) and 4-23-1 (2).
- Possible adjustments in customs value, HS number, procedures etc. in accordance with agreement/contract shall be corrected by the declarant/goods owner. This can be done by way of electronic recalculation in TVINN and shall be approved by Norwegian Customs. It is the goods owner's duty to ensure that all split shipments are correctly cleared for free circulation in accordance with the applicable regulatory framework.
2. For split shipments where the customs value has not been finally determined:
- The declarant/goods owner may apply with Norwegian Customs in advance for a deferral of final determination of value, cf. the Norwegian Customs Act Section 7-20. In cases where Norwegian Customs approves such an application, the split shipments may be imported with estimated values in accordance with submitted pro forma invoices and classified as they appear on import.
- The end product made up of split shipments, agreement/contract number and possible case number shall be stated in column 44 under the code DEL, cf. the Norwegian Customs Regulations Sections 4-20-1 (4).
Detailed description of customs value in split shipments
Split shipments means consignments that arrive in multiple consignments even though they are part of the same transaction/agreement between the buyer and seller. This means that the consignments cannot be declared in a single consignment and must instead be imported/exported in split or subsequent shipments, either via the same customs office or via different customs offices. This may be for reasons relating to e.g. delivery, transport or payment.
The Norwegian Customs Act Section 7-10 stipulates that the customs value shall constitute the transaction value, meaning the price actually paid or payable for the goods when sold for export to Norway. This shall also form the basis for determination of customs value for split shipments. It is not permitted under customs legislation to use fictitious values (e.g. NOK 1). It is a pre-requisite that the other conditions in the Norwegian Customs Act Section 7-10 are met. Commentary 6.1 from the Committee on Customs Valuation in the WCO is relevant (Treatment of Split Shipments under Article 1 of the Agreement).
Provided the conditions in legislation are met, the customs value for each consignment shall be based on the price that is actually paid or is payable, cf. the Norwegian Customs Act Section 7-10. This means an appropriate share of the total payment in accordance with the agreement entered into by the parties. Should the split shipment be subject to a separate invoice, this must be added and deducted from items pursuant to the Norwegian Customs Act Sections 7-18 and 7-18, appropriately distributed in relation to the total transaction.
For imports of large machines or machinery in split shipments, it may be difficult to determine the final customs value on the date of importation due to costs for construction work or clauses pertaining to price adjustment (e.g. in case of transfer pricing). An application for deferral of final determination of value may be submitted pursuant to the Norwegian Customs Act Section 7-20. The provisional determination can be recalculated when the customs value has been finally determined.
In most cases, goods imported in split shipments can be placed in one of the following three categories:
1. Splitting of machines and machinery: The goods constitute a complete industrial plant, or a machine, but are divided into multiple shipments because the parts derive from different sources, it is impossible to import them in one consignment or because the consignments must be in accordance with the plans for construction of the plant.
2. Splitting due to the amount of goods makes it impossible or impractical to import all goods in one consignment. It is a prerequisite that this relates to an amount of identical goods to be sold at an agreed price per item. The delivery date may be agreed in advance or be left to the parties at their convenience.
3. Splitting due to geographical distribution. In such cases, a sales agreement is entered into for the purchase of an amount of goods to be shipped in separate split shipments to two or more ports/airports/customs offices or to two or more countries.
Detailed description of classification in split shipments
Pursuant to the Norwegian Customs Act Section 1-7, "customs duty shall be payable in accordance with the customs duty rate that applies on the date a fully completed declaration is received by the customs authorities." In order for this to be possible, the classification of the goods must also be determined at the same time. The main rule for classification of goods is found in the Customs Tariff's General Rule of Interpretation 1. This rule refers to the rules that follow when classification cannot be deferred according to Rule 1.
General Rule of Interpretation 2 stipulates that if the goods being cleared by customs appear as a specific product, including if it is incomplete or not assembled, it shall be classified as that product. If the goods being cleared by customs appear as specified above, they shall be declared as what they actually are, e.g. parts for the machine or construction in question.