What is a customs regime: what «status» do goods get when they cross the border, and how are the 16 regimes grouped?

Q: Why can the same goods pass under different regimes?

Because it is not the goods but the purpose that determines the regime. At Mansur's company within one month this is what happened (everything is hypothetical, the figures were compiled by the author): Totals by direction: inbound 8,400 + 12,500 + 3,100 = 24,000, outbound 5,600 + 2,300 = 7,900, transit 20,000 dollars, in total 51,900 dollars. An important point: the value in the table does not affect the choice of regime, the purpose determines it. In the first and second rows both concern machine tools, but one stays at the company (40) and the other leaves after the exhibition (42), so the regimes are different.

Mansur is the head of Polat Detal LLC. The company makes metal parts on machine tools. Within one month the company dealt with six different consignments: parts for components were bought for one, a machine tool arrived for an exhibition for another, and yet another was sent to a customer. Each time the customs officer asked the same question: "Which regime?" When Mansur heard this word for the first time, he fell silent. Let us work it out together.

What is a customs regime?

In the first lesson we saw goods crossing the border in foreign trade. For customs, not only the crossing itself matters but also for what purpose the goods are moving. Goods may enter the country for good, may come and go temporarily, may just pass through "on the way", or may wait in a warehouse. Each case is governed by its own rules.

In the Customs Code a customs regime is defined as: "a set of rules determining, for customs purposes, the status of goods and vehicles moved across the customs border". In plain words: it is the "status" or "waybill" given to the goods. From the status, customs knows which rules apply to the goods.

The regime is chosen by the party the Code calls the "authorised person", and the chosen regime is shown in the customs declaration by a code. The person declaring the goods (or the person on whose behalf the goods are declared) is called the declarant.

Why can the same goods pass under different regimes?

Because it is not the goods but the purpose that determines the regime. At Mansur's company within one month this is what happened (everything is hypothetical, the figures were compiled by the author):

No.	What happened	Regime code	Direction of goods	Contract value (US dollars)
1	Parts for a machine tool were bought and stay at the company	40	inbound	8,400
2	A sample machine tool was brought in for an exhibition and is taken out after the exhibition	42	inbound	12,500
3	Finished parts were sold to a foreign customer	10	outbound	5,600
4	A machine tool previously taken abroad came back into the country	41	inbound	3,100
5	A batch of parts brought in earlier but found to be defective was sent back abroad	11	outbound	2,300
6	A partner firm's cargo passed through the territory of Uzbekistan to a third country, and Polat Detal prepared the documents for this cargo	80	transit	20,000

Totals by direction: inbound 8,400 + 12,500 + 3,100 = 24,000, outbound 5,600 + 2,300 = 7,900, transit 20,000 dollars, in total 51,900 dollars.

An important point: the value in the table does not affect the choice of regime, the purpose determines it. In the first and second rows both concern machine tools, but one stays at the company (40) and the other leaves after the exhibition (42), so the regimes are different.

How are the 16 regimes grouped?

The "Classifier of Customs Regimes" in Annex 3 to the instruction on completing the declaration lists 16 regimes. The list by codes:

Code	Regime	Short meaning (based on the Customs Code, in our own words)
10	Export	Goods of Uzbekistan are taken abroad without an obligation to bring them back
11	Re-export	Goods previously brought into the country are taken back abroad
12	Temporary export	Goods in free circulation are taken out for temporary use abroad
40	Release for free circulation (import)	Goods brought in remain in free circulation in the country without an obligation to take them back out
41	Re-import	Goods previously taken out are brought back into the country
42	Temporary import	Goods are brought in for a set period and used temporarily
51	Processing within the customs territory	Goods are brought in to be processed in the country and taken out as products
61	Processing outside the customs territory	Goods of Uzbekistan are taken out for processing, and the product is then brought in
70	Temporary storage	Goods brought in may be kept under control from presentation to customs until release under the chosen regime
71	Free customs zone	Goods are placed in designated places and territories and used that way
72	Duty-free trade	Goods stay under control in places designated by customs and are sold
73	Free warehouse	Goods are placed in designated places and territories
74	Customs warehouse	Goods brought in and intended for taking out are stored in designated premises under customs control
75	Abandonment in favour of the state	The owner gives up the goods and hands them over free of charge into state ownership
76	Destruction	Foreign goods are destroyed under customs control
80	Customs transit	Goods are carried under control from the customs office of departure to the customs office of destination

To memorise them, for study purposes it is convenient to split the regimes into six groups by direction. The official classifier has no such grouping, it is our study arrangement:

Going out: 10 export, 11 re-export, 12 temporary export.
Coming in or coming back: 40 import, 41 re-import, 42 temporary import.
Processing: 51 (processed here) and 61 (processed abroad).
Storage and special place: 70 temporary storage, 71 free customs zone, 72 duty-free trade, 73 free warehouse, 74 customs warehouse.
Fate of the goods: 75 abandonment in favour of the state, 76 destruction.
Only passing through: 80 customs transit.

Count: 3 + 3 + 2 + 5 + 2 + 1 = 16. The list is complete.

Notice the pairs: 10 and 40 (out and in), 12 and 42 (temporary out and temporary in), 11 and 41 (back out and back in), 51 and 61 (processing here and abroad). When you spot a pair, you will remember the meaning of the regime together with the code.

How do you tell which regime is needed?

According to Article 26 of the Customs Code, the chosen regime is declared in the declaration, so before choosing ask yourself three questions:

Where are the goods going? Going out, coming in, or just passing through?
Do they come back? Do they need to be taken back out or brought back in, or do the goods stay in place entirely?
What is the purpose? Sale, temporary use, processing, storage or destruction?

Take Mansur's exhibition machine tool: the machine has to go back, the purpose is a temporary show. So not 40 but 42.

Practical advice

In the contract, state the purpose of the goods clearly: "for an exhibition", "for processing", "for sale". Choosing the regime becomes easier.
The regime code is shown in the cargo customs declaration, so an accountant opening the declaration can see at once under which regime the goods passed.
Temporary regimes (for example 42) have a completion: according to Article 69 of the Customs Code, when the period ends the goods must be taken out or placed under another regime, that is, the regime must be completed. In other words, the word "temporary" means a period, and the goods must not be allowed out of control. For exact periods, open the relevant article of the Code or the current document.
Each regime has its own conditions: they are deliberately not given in this lesson. The documents and articles required for each regime are in a separate table on the site (the link is at the end of the page).
Check the code not from memory but against the official list: the list is in Annex 3 to the instruction.

In the next lesson

In the third lesson we will get to know the main terms of import and export: the declarant, customs value, the goods code and the customs payment.