Customs warehouse

The Union Customs Code, Regulation (EU) No 952/2013, lists customs warehousing among the special procedures: non-Union goods are stored there without paying customs duty or import VAT, as long as they do not leave for release for free circulation. The warehouse is public or private, run by an authorized warehousekeeper, and the authorization requires a guarantee, the customs bond, which covers the suspended duties. On the day a truckload of phones vanishes from the warehouse, two losses arise. The first is the goods themselves, covered by the owner's cargo insurance or stock throughput policy. The second is customs: goods removed from supervision give rise to the debt, and the holder of the procedure or the warehousekeeper may owe duty and VAT on property it no longer has. The code provides for the debt to be extinguished on irretrievable loss, but customs authorities and the courts are reluctant to treat theft as such a loss, since the goods still exist somewhere. For the underwriter these are two separate risks. A property policy pays the insured value of the goods; unless expressly extended, it does not pay a tax debt owed to the state. Some warehousekeeper or freight forwarder policies carry cover for duties and taxes that have become payable, and the customs bond is the guarantor's commitment to customs, which then seeks recovery from the warehousekeeper. Not to be confused with a freeport, a free zone where art is often kept for years, nor with customs transit, which suspends duties while goods are moving.