Quotas

How tariff quotas operate
Quota order numbers and descriptions
Types of quota
Defining and grouping quotas
How long quotas last for
How tariff quotas are introduced
Introductory periods
How the data is structured
- The quota order number table
- The quota definition table
Quota geography, associations, blocking and suspensions
Validation rules

Tariff quotas help regulate the volume of trade between countries. They allow a certain amount of specific goods to be imported at a lower rate of duty.

How tariff quotas operate

Most tariff quotas operate on a first come, first serve basis. This involves making a limited amount available to traders. Whoever claims against that amount first pays the reduced rate. Once that amount is used up, traders must pay the full (or less preferential) duty rate.

Other tariff quotas are licence based. Access to them depends on getting an import licence before importing the goods.

With the exception of safeguard quotas (which are only FCFS), all quota types can be either FCFS or licenced.

When a quota is almost used up it becomes ‘critical’. If a quota’s status is critical, security must be provided as there is no guarantee a claim will be allowed.

First come, first serve and licensed quotas are managed differently. First come, first serve quotas pass through the HMRC systems CHIEF and CDS. Licensed quotas do not pass through HMRC systems. They are handled by the Rural Payments Agency.

Read more about tariff quotas on GOV.UK.

Quota order numbers and descriptions

It is important to note the distinction between quota order numbers and quota definitions. Quota order numbers are the actual 6-digit order number that are assigned when the quota is established and remain active until it is abolished. Quota definitions deal with specific instances of the quota, listing the period for which it runs, the initial and current balances and the measurement units. E.g. a quota may be in place for several years, but within that time it will have many periods (maybe one each year running for the full year), each with their own total balance. Within the measures table the commodities included within the quota nad the in-quota duties are shown.

This graphic shows the relationship between quota order numbers and quota definitions (quotas are invented).

Imagine that a brand new regime starts on 1 January. It is a new policy with nothing preceding it.

We want all quotas to start as soon as possible (unless set to specific seasonal periods).

Types of quota

Quotas may be preferential or non-preferential.

Preferential quotas are usually made available through free trade agreements. The 2 parties agree on the quotas as part of the negotiations between them. The agreement provides both parties with mutual benefits.

In the Tariff, preferential quotas are always assigned to a specific country or to a small group of countries. Only preferential quotas can be origin quotas (i.e. tied to a geographic area, see quota geography for more detail).

Non-preferential quotas are aimed at maintaining the balance of trade flows on critical goods. They do this by opening up a specific volume of market access to all overseas nations.

In the Tariff, non-preferential quotas are usually assigned to Erga Omnes or ‘all countries (1011)’. Erga Omnes is a geographical area group, for more info see [geographical areas](Data-strucutres;-Geographical-Areas.md]

There are very few non-preferential quotas that are available to only one country.

WTO quotas

The UK declares a tariff ‘schedule of concessions’ to the WTO.

This lists the concessions the UK will give to overseas nations to allow them greater access to UK markets than they would get by adopting the most favoured nation rate alone.

In the Tariff, WTO quotas are usually assigned to Erga Omnes or ‘all countries (1011)’.

Autonomous quotas

Autonomous tariff quotas (ATQs) allow limited quantities of a product to be imported at a reduced rate for a specified period.

ATQs are shown in the Tariff as ‘non-preferential quotas’.

Read about autonomous quotas (ATQs) on GOV.UK.

Origin quotas

Origin quotas allow specific quantities of some goods to get preferential tariff treatment. The goods must meet certain conditions.

Safeguard quotas

Safeguard quotas aim to prevent dumping of products by placing a cap on the volume that can be imported. Safeguard quotas are only FCFS (note that this is empirical rather than established fact).

Read about safeguard quotas.

An example: importing lamb

The following example shows a quota associated with the import of lamb on commodity code 0204100010.

Third country duty (available to all countries) was 12% + £143.00 GBP per 100kg.

There was a non-preferential tariff quota (order number 052016) applied to the commodity code. This allowed a certain volume of goods into the UK at 0.00%. The quota ran from 1 January 2021 to 31 December 2021.

The following image shows the opening balance was 22000.0kg and the current balance was 1727.2kg.


Quota order number	52016
Current balance	1727.2 Kilogram (kg)
Opening balance	22000.0 kilogram (kg)
Status	Critical
Start and end dates	1st January 2021 and 31st December 2021
Last allocation date	17th January 2021
Suspension period	n/a
Blocking period	n/a

Defining and grouping quotas

The following diagram shows the relationships between the different types of quotas.

How long quotas last for

There are no limits on how long quotas can last for.

In the Tariff, you will find the following types of quota:

annual full year quota from 1 January to 31 December and repeating every year
annual full year quota from another start date, such as 1 July to 30 June, and repeating every year
part year quota from any date to any other date, such as 14 February to 31 May, and repeating between the same dates every year
quarterly quota starting on 1 January and repeating in that pattern every year
quarterly quota starting from another date, lasting 12 months and repeating in that pattern every year
part year quota split into monthly sections and repeating every year

How tariff quotas are introduced

Usually tariff quotas are brought in over time by a process called ‘staging’.

Introductory periods

Sometimes quotas are set up with an introductory period. For example, the UK may sign a new trade agreement with another country which contains a quota period.

If the start of the quota period and the implementation of the trade agreement are not the same, an introductory period would be needed.

During the introductory period, only a proportion of the total quota balance is available to traders.

How the data is structured

There are more data objects for first come, first serve quotas than for licensed quotas.

Licensed quotas essentially use just measures not any of the other quota related tables. That is because all the other tables are set up uniquely to manage the set up and decrementing of quota balances. Note that while quotas themselves are managed by DBT, quota balances are managed and updated by HMRC.

The quota order number table

The quota order number table’s quota order number ID is linked to the measures table via the measures table’s quota order number SID field (one of many examples where common field names do not match in TARIC).

Field	Notes
`quota_order_number_sid`	A unique sequential numeric (internal) identifier for the quota. There may be more than one instance of a quota order number ID in the quota order number table, with different IDs
`quota_order_number_id`	6-digit numerical field, e.g. ‘091234’. In all current cases, the quota order number begins with the 2 digits ‘05’. If the third digit is ‘4’, then the quota must be a licensed quota. Quota order numbers are not a unique key: it it possible, and is frequently the case that an order number is set up for a given period of time, then terminated, and restarted again at a later date, either to reuse the order number for other purposes or because the policy returns after an intermission. Additionally, quota order numbers are terminated then restarted when the origins or origin exclusions change When a quota order number is used on multiple occasions, a new record with a unique quota_order_number_sid is created.
`Validity start`	The date on which a quota is first set up for use. A quota will then have multiple periods either in-year or across multiple years, potentially with introductory custom periods before the regular cadence commences
`Validity end`	The date on which the quota order number record terminates – this should, in nearly every circumstance, be left blank – see pages on origins and origin exclusions below for the exceptions

The quota definition table

The quota definition table is the table which defines the cadence of the quota and the volume of the goods that can be imported at reduced rates during each period.

Field	Notes
`quota_definition_sid`	A unique sequential numeric (internal) identifier for the quota definition. There may be more than one instance of a quota order number ID in the quota order number table, with different IDs
`quota_order_number_id`	Foreign key linking to the quota order numbers table
`validity_start`	The start date of the definition period – this, along with the end date (below) is the critical date in defining the active period of the quota definitions, against which the trader can draw down. The quota definition periods should run alongside the equivalent measures, however: The measures and definition periods are obviously separate tables and provision must be made by the application programmer to ensure that the measures and the quota definition periods run concurrently to the same start dates and end dates The quota will not operate without the measure or the definition period
`validity_end`	End date of the period – see above
`quota_order_number_sid`	Foreign key to the SID of the quota order number
`volume`	The current volume of the quota definition – when DIT first set the volume, it should be set to the initial volume.
`initial_volume`	The initial volume of the quota – this remains constant in the border systems post-initiation of the definition period. We set the volume and initial volume to the same figure Only the volume decrements in border systems Volume is dependent of the units (see next slide)
`measurement_unit_code`	The primary unit in which the quota volume is measured Usually this will be kilogrammes, sometimes it is litres, of number of items In terms of operationalising a quota, it is preferable to use a smaller unit rather than a large one – i.e. a unit of KGM rather than TNE (tonne), as this allows traders to bring in smaller amounts and account for them accurately. The legislation will often refer to tonnes
`measurement_unit_qualifier_code`	If the measurement unit needs further definition, then the measurement unit qualifier code can be used to provide that additional definition: it is used sparingly. See the document on measure components for more info, as the concept for quota definitions is the same.
`maximum_precision`	This is always set to 3 for current quotas. It determines the number of decimal places that a trader can enter into their declaration form requesting an allocation (allows for grams of goods to be imported against a quota measured in kilos)
`critical_state`	The critical state determines if a trader needs to pay securities (essentially a deposit) when utilising the quota. There are two states: Yes or No. If the state is set to Yes, then securities are required; if set to No, then securities are not required.
`critical_threshold`	The criticality threshold determines the point at which a quota definition / account slips into being critical. Almost without exception on the entire tariff an without exception in the last 5 years, the criticality threshold is set to 90. This means that once 90% of the quota volume has been used up, the quota will be automatically changed to ‘Critical’ See below for more information on quota definition states and criticality threshold.
`monetary_unit_code`	In the tariff, there are a few quotas that are measured according to the total value of the goods coming into the bloc rather than weight / volume etc. The first of these are silk or fine materials: presumably they are so gossamer thin that weight is irrelevant and only monetary value is of interest It is an oddity of Taric that, even though there are values in the measurement unit table that look like they could be used for this purpose, they are not used in this way (EURO - Euro – for statistic purposes is a valid measurement unit)
`description`	This field has little overt value and no way of exposing it to the trading public, however it is of value to populate the field to provide an ‘at a glance’ view of the nature of the definition. It is a weakness of the Taric data structure that there is no way of defining a ‘description’ of the quota as a whole.

The definition table does not contain any information about:

the commodity codes that are impacted (this is referenced by the measure)
the geographical areas from which goods can be imported (this is referenced by the measure or quota order origin)
the in quota duties that apply (this is referenced by the measure)

Quota geography, associations, blocking and suspensions

Quota geography, quota associations and quota blocking and suspensions all have their own pages which go into detail on these aspects of quotas.

Validation rules

Code	Description
CertificateValidityPeriodMustSpanQuotaOrderNumber	Validity contained rule requiring that the validity period of the required certificates must span that of the quota order number.
CertificatesMustExist	Mandatory subrecord rule that referenced certificates must exist.
ON1	Uniqueness rule for fields `quota order number id` and `start date`.
ON10	Validity contained rule for when quota order numbers are referenced in a measure, their validity period must contain that of the measure.
ON11	Deletion while in use rule for quota order numbers that are used in measures.
ON12	Deletion while in use rule for quota order number origins that are used in measures.
ON2	Validity overlaps with self rule stating there may be no overlap in time of two quota order numbers with the same quota order number id.
ON8	Validity contained rule that the validity period of the quota order number must span the validity period of the referencing quota definition.
ON9	Validity contained rule for when a quota order number is referenced in a measue, the validity period of the former must span the validity period of the latter.
OverlappingQuotaDefinition	There may be no overlap in time of two quota definitions with the same quota order number id.
PreventDeletingLinkedQuotaDefinitions	A deleted Quota Definition must not be referred to by a non-deleted relation.
PreventQuotaDefinitionDeletion	A Quota Definition cannot be deleted once the start date is in the past. The Quota Definition may be end-dated instead.
QD1	Uniqueness rule for quota order number id and start date.
QD10	Validity contained rule that the validity period measurement unit code must span the validity period of the quota definition.
QD11	Validity contained rule that the validity period measurement unit qualifier code must span the validity period of the quota definition.
QD7	Validity contained rule that the validity period of the quota definition must be spanned by one of the validity periods of the referenced quota order number.
QD8	Validity contained rule that the validity period of the monetary unit code must span the validity period of the quota definition.
VolumeAndInitialVolumeMustMatch	Unless it is the main quota in a quota association, a definition’s volume and initial_volume values should always be the same. The exception is when we are updating quotas in the current period, these can have differing volume and initial volume.