Preference codes
Preference codes (also called treatment codes) are used by traders to specify which of the measures available to them they would like to use. For example, they may have access to a non-preferential (WTO) quota whilst also having access to a preferential rate from a free trade agreement, and it is up to the trader to decide which to use. The current list of available preference codes is published on GOV.UK.
Preference codes are a 3-digit code written into Box 36 of the declaration form. A measure type is selected based on the preference code and declaration systems apply the treatment if it is available or return an error if it is not.
Preference codes are not specified as part of the tariff file. Instead, a separate correlation table is used that maps preference codes to the measure types that should be applied.
What preference codes do
Preference codes have three main uses.
They control when additional duties get applied
Any measure type specified against the preference code in the correlation table is “added on” to the final tariff. So in addition to the third-country duty (103) specified for preference code “100”, safeguard duties (696), representative price securities (651) and additional CIF duties (652) are also present. This means that those additional duties (if present) will also be charged. This is the means by which safeguard quotas can “switch off” the normal safeguard duty because the preference code for non-preferential quotas does not include 696-type measures.
They control requirements around presence of supporting measures
Some preference codes are only valid when two measure types are found together. For example, the preference code “323” covers preferential tariff quotas subject to end-use. There are two ways for this preference code to be activated:
- by the presence of an end-use preferential quota (146),
- by the presence of a normal preferential quota (143) and a declaration of subheading submitted to end-use provisions measure (464).
The presence of these two measure types in the same table represents an “option” because 143 and 146 both come from the same measure type series which has its combination field set to zero, so only one can apply.
They specify what regulation groups must be used
For each preference code and measure type, the correlation table can optionally specify a list of regulation groups. The measure generating regulation must then sit in one of those groups for the preference code to be applicable. For example, preference code “120” is only applicable when there is a measure with type 122 and regulation group KON. This means that any non-preferential tariff quotas must always be linked to a regulation in the correct group.
How preference code correlations are structured
Each preference code can be mapped to multiple measure types. Each mapping represents another measure type that will be “added on” when that preference code is used.
Each mapping can specify multiple measure types. If there is more than one specified, the mapping also controls whether any or all of the attached measure types must be present. If it is “all”, the mapping will only be available if a measure from each type is present. If it is “any”, the mapping will be available if a measure of any of the specified types is present.
Correlation table
The correlation table encodes a complicated decision tree of how to find the correct measure based on the preference code and when to apply additional duties and safeguards.
| Box 36 | Name | Description | Measure type | Regulation group | Condition code |
|---|---|---|---|---|---|
| 100 | Erga Omnes third-country duty rates | In these cases, a preferential Customs duty is not requested or does not exist. | 103 | ||
| 100 | Erga Omnes third-country duty rates | These cases are subject to safeguards. | 696 | ||
| 100 | Erga Omnes third-country duty rates | In these cases, a preferential Customs duty is not requested or does not exist. | 651, 652 | ||
| 110 | Erga Omnes autonomous tariff suspension | Temporary autonomous suspensions from the Customs duties are granted for certain goods of the agricultural, chemical, aeronautical and microelectronic sector. Most of them are contained in annual regulations. (The basic regulation on the autonomous suspensions is Regulation 1387/2013 which is amended twice a year to add or withdraw products from its annex). Others are shown as footnotes to certain CN codes and are applicable for an indefinite period. The normal duty rates can be suspended either totally (e.g. chapter 27) or partially (e.g. 2905 44, 3201 20 00, 3824 60 etc). | 112 | ||
| 110 | Erga Omnes autonomous tariff suspension | These cases are subject to safeguards. | 696 | ||
| 110 | Erga Omnes autonomous tariff suspension | Currently, autonomous tariff suspensions do not relieve from the additional duties. | 651, 652 | ||
| 115 | Erga Omnes autonomous tariff suspensions subject to an end-use | Application of autonomous tariff suspension under the end-use regime (Article 254 of UCC). | 115 | ||
| 115 | Erga Omnes autonomous tariff suspensions subject to an end-use | These cases are subject to safeguards. | 696 | ||
| 115 | Erga Omnes autonomous tariff suspensions subject to an end-use | Application of autonomous tariff suspension under the end-use regime (Article 254 of UCC). | 651, 652 | ||
| 115 | Erga Omnes autonomous tariff suspensions subject to an end-use | When antidumping duties (or any additional duty) are applied on a non end use position, the end use requirements apply even if the Customs duty rate is not lower on the end use position. | 112 + 464 | ||
| 118 | Erga Omnes autonomous tariff suspensions with certificate confirming the special nature of the product | Currently not applicable | |||
| 118 | Erga Omnes autonomous tariff suspensions with certificate confirming the special nature of the product | Currently not applicable. | 651, 652 | ||
| 119 | Erga Omnes autonomous tariff suspensions subject to an ‘airworthiness certificate’ | These suspensions are only granted if an airworthiness certificate has been presented. | 119 | ||
| 119 | Erga Omnes autonomous tariff suspensions subject to an ‘airworthiness certificate’ | These cases are subject to safeguards. | 696 | ||
| 119 | Erga Omnes autonomous tariff suspensions subject to an ‘airworthiness certificate’ | Currently, airworthiness tariff suspensions do not relieve from the additional duties. | 651, 652 | ||
| 120 | Non-preferential tariff quotas | Includes WTO, autonomous, Erga Omnes and origin-related tariff quotas. | 122 | KON | |
| 120 | Non-preferential tariff quotas | Full additional duties are potentially applicable. See processing rules in the applicable documents. | 651, 652 | ||
| 120 | Non-preferential tariff quotas | Non preferential quotas can relieve, even partially, from full additional duties. See processing rules in the applicable documents. | 653, 654, | KON | |
| 123 | Non-preferential tariff quotas subject to an end-use authorisation | Certain tariff quotas of code 120 are only granted if the goods obtain a specific destination, an “end-use” pursuant to Article 254 of the UCC. | 123 | ||
| 123 | Non-preferential tariff quotas subject to an end-use authorisation | Application of end use obligation due to the presence of antidumping duties (or additional duties) on the non end use line | 122 + 464 | KON | |
| 123 | Non-preferential tariff quotas subject to an end-use authorisation | Full additional duties are potentially applicable. See processing rules in the applicable documents. | 651, 652 | ||
| 123 | Non-preferential tariff quotas subject to an end-use authorisation | Non preferential end use quotas can relieve, even partially, from full additional duties. See processing rules in the applicable documents. | 653, 654 | KON | |
| 125 | Non-preferential tariff quotas subject to a special certificate | These must be other documents than origin certificates, e.g. pedigree certificates, handicraft, handlooms certificates… | 122 | KON | B, C, Q, Y |
| 125 | Non-preferential tariff quotas subject to a special certificate | Full additional duties are potentially applicable. See processing rules in the applicable documents. | 651, 652 | ||
| 125 | Non-preferential tariff quotas subject to a special certificate | These quotas can relieve, even partially, from full additional duties. See processing rules in the agpplicable documents. | 653, 654 | KON | |
| 128 | Erga Omnes tariff quotas following outward processing | Certain tariff quotas under code 128 are granted only pursuant to the EU legislation about the arrangements regarding processing. | 122 | OPQ | |
| 128 | Erga Omnes tariff quotas following outward processing | Full additional duties are potentially applicable. See processing rules in the applicable documents. | 651, 652 | ||
| 128 | Erga Omnes tariff quotas following outward processing | These quotas can relieve, even partially, from full additional duties. See processing rules in the applicable documents. | 653, 654 | KON | |
| 140 | Special end-use resulting from the Common Customs Tariff | Application of tariff suspension under the end-use regime (Article 254 of UCC). | 105 | DNC; APL | |
| 140 | Special end-use resulting from the Common Customs Tariff | The full additional duties apply systematically. | 651, 652 | ||
| 140 | Special end-use resulting from the Common Customs Tariff | Application of end use obligation due to the presence of antidumping duties (or additional duties) on the non end use line | 103 + 464 | DNC | |
| 140 | Special end-use resulting from the Common Customs Tariff | Some of the end-use cases are mentioned the Combined Nomenclature (see preliminary provisions). | 117 | SUS | |
| 140 | Special end-use resulting from the Common Customs Tariff | Application of end use obligation due to the presence of antidumping duties (or additional duties) on the non-end use line | 117 + 464 | SUS | |
| 140 | Special end-use resulting from the Common Customs Tariff | The full additional duties apply systematically. | 651, 652 | ||
| 140 | Special end-use resulting from the Common Customs Tariff | These cases are subject to safeguards. | 696 | ||
| 150 | Admission to CN codes subject to special certificates | Most of these cases and the relevant certificates are mentioned the Combined Nomenclature (see preliminary provisions). Others are mentioned as footnotes to the relevant CN codes, e.g. 0202 30 50. | 103 | ||
| 150 | Admission to CN codes subject to special certificates | These cases are subject to safeguards. | 696 | ||
| 150 | Admission to CN codes subject to special certificates | The full additional duties apply systematically. | 651, 652 | ||
| 200 | GSP duty rate without conditions or limits | The basic regulation applying the Union scheme of generalised tariff preferences is Council Regulation (EC) No 980/2005 of 27 June 2005. The same Regulation also establishes special incentives for sustainable development and good governance and grants a further tariff reduction to countries abiding by the rules of these arrangements (currently this is the case for several countries - Bolivia, Moldova, etc. See Commission Decision 2005/924/EC). | 142 | SPG | |
| 200 | GSP duty rate without conditions or limits | The basic regulation applying the Union scheme of generalised tariff preferences is Council Regulation (EC) No 980/2005 of 27 June 2005. The same Regulation also establishes special incentives for sustainable development and good governance and grants a further tariff reduction to countries abiding by the rules of these arrangements (currently this is the case for several countries - Bolivia, Moldova, etc. See Commission Decision 2005/924/EC). | 142 | SPG | Q |
| 200 | GSP duty rate without conditions or limits | 696 | |||
| 200 | GSP duty rate without conditions or limits | Full additional duties are potentially applicable. See processing rules in the applicable documents. | 651, 652 | ||
| 200 | GSP duty rate without conditions or limits | These preferences can relieve, even partially, from full additional duties. | 657, 658 | SPG | |
| 218 | GSP suspensions with certificate confirming the special nature of the product | Currently not applicable | |||
| 220 | GSP tariff quotas | Certain tariff quotas under code 220 are granted only pursuant to the EU legislation on the GSP. | 143 | SPG | |
| 220 | GSP tariff quotas | These quotas can relieve, even partially, from full additional duties. See processing rules in the applicable documents. | 653, 654 | SPG | |
| 223 | GSP tariff quota subject to an end-use | Certain GSP tariff quotas are granted only if the goods are put to a specific ‘end-use’ pursuant to Article 254 of UCC.. | 146 | SPG | |
| 223 | GSP tariff quota subject to an end-use | Application of end use obligation due to the presence of antidumping duties (or additional duties) on the non end use line | 143 + 464 | SPG | |
| 223 | GSP tariff quota subject to an end-use | These quotas can relieve, even partially, from full additional duties. See processing rules in the applicable documents. | 653, 654 | SPG | |
| 225 | GSP tariff quotas subject to a special certificate | These must be documents other than certificates of origin, form A (or invoice declarations), e.g. an import licence. | 143 | SPG | B, C, Q, Y |
| 225 | GSP tariff quotas subject to a special certificate | 653, 654 | SPG | ||
| 240 | GSP preferential duty rates subject to an end-use | Certain GSP preferences are granted only if the goods are put to a specific ‘end-use’ pursuant to Article 254 of UCC. | 145 | SPG | |
| 240 | GSP preferential duty rates subject to an end-use | These cases are subject to safeguards. | 696 | ||
| 240 | GSP preferential duty rates subject to an end-use | Application of end use obligation due to the presence of antidumping duties (or additional duties) on the non end use line. | 142 + 464 | SPG | |
| 240 | GSP preferential duty rates subject to an end-use | These preferences can relieve, even partially, from full additional duties. See processing rules in the applicable documents. | 657, 658 | SPG | |
| 250 | Admission to CN codes with special GSP rates subject to a special certificate | Currently not applicable. | |||
| 300 | Preferential duty rate without conditions or limits (including ceilings) | Application of the preferential duty rates under the relevant agreement. | 142, 144 | FTA, PRF, RDR | |
| 300 | Preferential duty rate without conditions or limits (including ceilings) | These cases are subject to safeguards. | 696 | ||
| 300 | Preferential duty rate without conditions or limits (including ceilings) | These preferences can relieve, even partially, from full additional duties. See processing rules in the applicable documents. | 657, 658 | FTA, PRF | |
| 310 | Preferential agreements: tariff suspensions | Example of the legal basis for this kind of tariff suspension: Council Regulation (EC) No 1140/2004 of 21 June 2004 suspending the autonomous Common Customs Tariff duties on certain fishery products originating in Ceuta and Melilla. | 141 | FTA, PRF, RDR | |
| 310 | Preferential agreements: tariff suspensions | These cases are subject to safeguards. | 696 | ||
| 315 | Preferential suspension subject to an end-use | Preferential suspensions are granted only if the goods are put to a specific ‘end-use’ pursuant to Article 254 of UCC. Currently not applicable. | |||
| 315 | Preferential suspension subject to an end-use | Application of end use obligation due to the presence of antidumping duties (or additional duties) on the non end use line. | 141 + 464 | ||
| 318 | Preferential suspensions with certificate confirming the special nature of the product | Currently not applicable | |||
| 320 | Preferential tariff quotas | The preferential duty rates are only applicable within the limits of quotas. They can be managed on a “first come - first served”- basis or by licences. | 143 | FTA, PRF, RDR | |
| 320 | Preferential tariff quotas | These quotas can relieve, even partially, from full additional duties. See processing rules in the applicable documents. | 653, 654 | FTA, PRF | |
| 323 | Preferential tariff quotas subject to an end-use | Certain quotas under code 320 apply only if the goods are put to a specific ‘end-use’ pursuant to Article 254 of UCC. | 146 | FTA, PRF, RDR | |
| 323 | Preferential tariff quotas subject to an end-use | Application of end use obligation due to the presence of antidumping duties (or additional duties) on the non end use line. | 143 + 464 | FTA, PRF, RDR | |
| 323 | Preferential tariff quotas subject to an end-use | These quotas can relieve, even partially, from full additional duties. See processing rules in the applicable documents. | 653, 654 | FTA, PRF | |
| 325 | Preferential tariff quotas subject to a special certificate | These special certificates must be documents other than EUR.1 movement certificates (or invoice declarations), e.g. an import licence. | 143 | FTA, PRF, RDR | B, C, Q, Y |
| 325 | Preferential tariff quotas subject to a special certificate | These quotas can relieve, even partially, from full additional duties. See processing rules in the applicable documents. | 653, 654 | FTA, PRF | |
| 340 | Preferential duty rates subject to an end-use | Preferences are granted only if the goods are put to a specific ‘end-use’ pursuant to Article 254 of UCC. | 145 | FTA, PRF, RDR | |
| 340 | Preferential duty rates subject to an end-use | Preferences are granted only if the goods are put to a specific ‘end-use’ pursuant to Article 254 of UCC.. | 696 | ||
| 340 | Preferential duty rates subject to an end-use | Application of end use obligation due to the presence of antidumping duties (or additional duties) on the non end use line. | 142 + 464 | FTA, PRF | |
| 340 | Preferential duty rates subject to an end-use | These preferences can relieve, even partially, from full additional duties. See processing rules in the applicable documents. | 657, 658 | FTA, PRF | |
| 350 | Admission to CN codes with special preferential rates subject to a special certificate | Currently, not applicable | |||
| 400 | Customs duties under customs union agreements concluded by the Union | This code is used when customs duties are imposed in the framework of customs union agreements with Andorra, San Marino and Turkey. | 106 | ||
| 400 | Customs duties under customs union agreements concluded by the Union | These cases are subject to safeguards. | 696 | ||
| 400 | Customs duties under customs union agreements concluded by the Union | Full additional duties are potentially applicable. See processing rules in the applicable documents. | 651, 652 | ||
| 400 | Customs duties under customs union agreements concluded by the Union | These measures can relieve, even partially, from full additional duties. See processing rules in the applicable documents. | 657, 658 | CUN | |
| 420 | Customs Union Quota | 147 | |||
| 420 | Customs Union Quota | These quotas can relieve, even partially, from full additional duties. See processing rules in the applicable documents. | 653, 654 | CUN |
Worked example
Preference code 223 in the table above demonstrates some of the complexity around preference codes.
If a trader uses preference code “223”, they are specifying that their preferred treatment is to use a Generalised System of Preferences (GSP) tariff quota, with products subject to end-use relief. The following is must be true:
- If there is a “preferential tariff quota under end use (146)” measure, it will be used.
- If there is a “preferential tariff quota (143)” measure, it will be used if there is also a “declaration of subheading submitted to authorised use provisions (464)” measure which specifies that the entire commodity code is subject to authorised use.
- Whichever is used, the quota measures must be from a regulation in the group “SPG”.
- There is partial relief from security deposits – any measures of type “Security based on representative price, reduced under the benefit of a tariff quota (653)” or “Additional duty based on CIF price, reduced under the benefit of a tariff quota (654)”, if they exist, will be added on. This is on contrast to measures of type 651 and 652 specified against the non-quota preference code “200”, which would hold the full duty.
- Note that measure type “Additional duties (safeguard) (696)” is not present, so use of a GSP quota relives traders from safeguard duties.
The correlation must still be used in conjunction with the measure type series table – because measure types 143 and 146 are both from the “Applicable duty ©” series from which only 1 measure must be used, the presence of both measure types in the table specifies an “option” – only one of those mappings will apply. But because the 653 and 654 are from a difference measure type series, they will be applied in addition to whichever quota measure is used.
There is no mechanism that requires duty to be paid, but typically any import declaration that fails to use a measure from the “applicable duties” series will fail.