Text 4. 3. Customs warehouses

 

The Customs warehousing procedure is a procedure under which imported goods are stored under Customs control in a designated place (a Customs warehouse) without payment of Customs duties and taxes¹. It is a facility granted to those involved in external trade. Participants of foreign economic activity can place their goods temporarily in Customs

 

¹ Kyoto Convention. Specific Annex E.3 concerning Customs warehouses.

 

warehouses without the application of economic restrictions and prohibitions until the manner in which the goods are to be disposed of is finally decided.

 

The Customs warehousing procedure can be utilized to develop a country's entrepôt trade. Goods can be imported for storage in warehouses and re-exported in the same state without the payment of duties and taxes. They are normally without being subjected to import or export licensing requirements. Operations permitted in a Customs warehouse are those required to improve the packaging and marketable quality of the goods and to prepare them for shipment. Such operations include repacking, sorting and grading, breaking bulk, grouping of packages, and operations intended to keep the goods in the same state.

 

Entrepôt trade operations provide employment opportunities. Theyare also a means of earning foreign exchange when payments are received for handling and similar services rendered at these warehouses, and for other tertiary services provided, such as transport. An additional advantage is that an importer/exporter can keep his goods in the country until he can re-negotiate sales abroad on more favourable terms. This is particularly the case when persons using this warehousing facility import goods in bulk, at discounted prices, and re-export such goods in similar quantities at higher prices. Such entrepôt trade is only possible if there is exemption from the payment of duties and taxes and from import/export licensing, as it is available under the warehousing procedure.

 

In certain instances, exporters are permitted to use the warehousing facility to combine domestic goods with identical imported goods so that a single export order can be satisfied. For this purpose, firms import goods from their subsidiaries which are located abroad, or from establishments in other countries which produce or manufacture goods for them under contract. Thus, when domestic production falls short of targeted output, goods can be imported to meet contractual export obligations without incurring duty or other liabilities. This does not, however, apply in cases where the origin of goods is a consideration to satisfy quota or tariff requirements.

 

The Customs warehousing procedure can be used to promote transshipment operations; this again enables a country to earn foreign exchange for the service provided.

 

The warehousing procedure can also be used to assist manufacturers in processing goods for export.

 

EXERCISES

 

I. Answer the following questions.

 

1. What are the advantages of placing goods temporarily in Customs warehouses?

2. What operations are permitted in a Customs warehouse?

3. Are operations intended to keep the goods in the same state permitted in a Customs warehouse?

 

4. Who is interested in entrepôt trade operations?

5. What are exporters permitted to use the warehousing facility for?

6. Are exporters permitted to use the warehousing facility to combine domestic goods with imported goods?

 

7. Can warehousing procedure be used to promote transshipment operations?

 

II. Find the words/phrases in the text which follow the verbs below.

 

1. to store 7. to render

 

2. to grant 8. to negotiate

 

3. to be subjected 9. to import

 

4. to keep 10. to combine

 

5. to provide 11. to satisfy

 

6. to earn 12. to meet

 

13. to promote

 

 

 

Study the following words and word combinations from the text.

 

to encourage	поддерживать (поощрять)
entrepreneurial activities	предпринимательская деятельность
[ɒntrəprəˈnɜːrɪəl ækˈtɪvɪtɪz]
to grant relief from import	предоставлять освобождение от та-
duties and taxes	моженных пошлин и сборов
to provide concessions	идти на уступки; предоставлять
	льготы
customs-privileged facilities	благопр	ятные в таможенном отно-
	шен условия
to neutralize the cost-raising	нейт ализовать повышение стои-
effects of tariffs and other	м сти в результате введения тари-
regulatory measures	ф в и других регулирующих мер
export-related activities	деятельность, связанная с экспор-
	том
costly and cumbersome	дорогостоящие и обременительные
administrative requirements	административные требования
commercial free zone	торговая свободная зона
industrial free zone	промышленная свободная зона
packaging quality	качество упаковки
marketable quality	товарный вид
to break bulk	начинать разгрузку
to grade	сортировать
to undertake operations	осуществлять операции
loading (unloading)	погрузка (выгрузка)

transshipment перевалка, перегрузка

 

storage хранение

 

to perform operations выполнять операции

 

manufacturing производство;

 

processing переработка

 

assembly сборка

 

goods of domestic origin товары местного производства

 

to enjoy the right пользоваться правом

 

to contradict противоречить

 

TEXT 4.4. FREE ZONES

 

With a view to encouraging the development of their international commerce, governments in many countries are looking for new mechanisms of foreign investments into domestic economies. They grant relief from import duties and taxes and provide other concessions in respect of goods introduced to a part of their territory which is generally regarded as being outside the Customs territory¹. This part of the territory is referred to as a free zone. Free Economic Zones (FEZ) are territories where domestic and foreign investors can carry out entrepreneurial activities on preferential terms.

 

Customs-privileged facilities afford to neutralize the cost-raising effects of tariffs and other regulatory measures in the operation of export-related activities. Free zones serve the purpose of facilitating the operation of import-dependent export activities by instituting procedures which are simpler than other temporary admission procedures, thereby significantly reducing costly and cumbersome administrative requirements.

 

Free zones are established by making formal provision in national legislation. As a rule FEZ are formed on the initiative of local authorities with the permission of the central government of the country. Free zones are generally established at seaports, river ports, airports and places with similar geographical advantages. Their main objective is to provide more favourable conditions for the development of foreign economic links.

 

 

¹ Kyoto Convention. Specific Annex F.1 concerning free zones.

 

Easy access to places of entry and exit within the country eliminates the need for goods to cross the Customs territory, thereby reducing the need to apply the usual Customs controls. However, due to the location of certain free zones it may be necessary for goods to be moved across the Customs territory when travelling to/from free zones, from/to seaports, airports or land frontiers (rail and road traffic). In such situations, goods can be permitted to move under a national or international transit procedure.

 

Free zones may cover the entire port area where several commercial activities are permitted.

Generally, a distinction is made between commercial and industrial free zones. In commercial free zones, the permitted operations are those necessary for the preservation of goods and the usual forms of handling to improve their packaging or marketable quality. Operations which prepare the goods for shipment, such as breaking bulk, grouping of packages, sorting, grading and re -packing, may be undertaken. Other operations in connection with the transport of goods, such as loading, unloading, transshipment and storage, may also be performed in commercial free zones. In industrial free zones, manufacturing, processing or assembly operations are performed with goods being imported for these purposes. Goods of domestic origin or in free circulation in the Customs territory may be allowed into free zones for manufacturing, processing and assembly. In certain countries, the commercial and industrial activities are combined in the same free zone.

 

Being an integral part of the territory of the country, a free economic zone enjoys the main right to define its social and economic policy independently if this does not contradict the rules and laws of the country. It means that the authorities of the zone can regulate export-import transactions, set the order of entry, exit and stay for foreign citizens on its territory, establish direct economic and cultural links.

The following six FEZ have been created on the territory of the Republic of Belarus: «Brest», «Vitebsk», «Gomel-Raton», «Grodnoinvest», «Mogilev» and «Minsk».

 

Apart from enhancing the development of a country's external trade and commerce, the Belarusian free zones are viewed as an effective means of attracting export-oriented industries which are expected to provide investable resources, technology and employment to our country.

 

EXERCISES

 

I. Match the words from the text with their corresponding definitions

 

1. to facilitate a. fit to be sold

2. cumbersome b. by that means, in that connection

3. relief from c. independently, leaving on one side

4. marketable d. remove, get rid of

5. apart from e. benefit

6. advantage f. complete, full

7. to eliminate g. inconvenient, clumsy

8. thereby h. help, ease

9. entire i. setting free from obligation, duty

 

II. Translate into English.

 

1. по инициативе местных 6. кисовременные достижения науки

 

властейтехн

2. с разрешения централь- 7. егул ровать экспортно-импорт-

 

ного правительстваные операции

3. обеспечить наиболее бла- 8. установить порядок въезда, вы-

гоприятные условия	езда и пребывания
4. привлекать	инос	9. установить льготные таможен-
ранные
инвестиции		ные пошлины
5. отечественное про звод-
ство

 

III. Match left to the right to make a word/phrase combination.

 

1. to establish a. relief from import duties and taxes

2. to reduce b. development

3. to grant c. technology and employment

4. to improve d. free zones

5. to enhance e. the cost-raising effects of tariffs

6. to attract f. administrative requirements

7. to provide g. marketable quality

8. to neutralize h. export-oriented industries

 

IV. Find the odd ones out.

 

A. Free zones are supposed:

 

1. to	improve the	flow of	7. to work out Customs regulations
passenger traffic
2. to	neutralize	regulatory	8. to neutralize the cost-raising effects
measures		of tariffs
3. to facilitate export activities	9. to provide accommodation
4. to impose duties and taxes	10. to introduce simpler procedures
5. to	reduce costly	administ-	11. to provide investable resources,
rative requirements		technology and employment

6. to encourage the develop- 12. to deliver goods to foreign partners ment of external trade and

international commerce

 

B. In commercial free zones, the permitted operations are:

 

1. breaking bulk 8. re-packing

2. grouping of packages 9. constructing

3. transit 10. loading

4. sorting 11. transshipment

5. checking up 12. smuggling

6. marketing 13. storage

7. grading