Re-import (code 41): what happens if exported goods come back, and how is it recorded in the accounts?

Export does not always go all the way: the buyer returns part of the consignment as not conforming to the contract, or does not perform the contract. Then the goods have to be brought back into Uzbekistan. So as not to pay duty on them as on a new import, the Customs Code has the re-import procedure, code 41 in the declaration (Instruction on the procedure for filling in the cargo customs declaration, Annex 3).

Key points

1. The essence of the procedure (Article 58). Goods previously taken out of the customs territory are brought back without payment of duties and taxes and without application of economic policy measures. Re-imported goods are treated as goods released for free circulation, which means they can then be sold freely on the domestic market.
2. Four general conditions (part one of Article 59). When taken out, the goods must have had the status of goods in free circulation; they must be declared for re-import within the set time limit; they must be in the same condition, except for natural wear or losses under normal transport, storage and use; customs must be able to identify them.
3. Time limit (Article 59). The general time limit: three years from the moment the goods were placed under the exit procedure. For temporarily exported goods the set time limit of temporary export applies, and for the remnant of goods processed abroad, the processing term. Date of exit: the day the CCD for the exit procedure was processed; date of entry: the day the customs border was crossed.
4. Three additional conditions for goods returning from export (part three of Article 59). They must be met at the same time: the terms of the contract were not performed; the goods were not used abroad and were not repaired (except use to identify a defect or the reason for return); allowing for natural wear, the goods have not changed (except where a defect has been found).
5. Partial return is possible (part two of Article 59). Even if only part of the consignment comes back, that part is placed under re-import if the conditions are met.
6. Damaged goods (Article 58). For goods damaged or deteriorated on the way to be re-imported, it must be confirmed that the damage was caused by an accident or force majeure. Operations to keep the goods in normal condition, including minor repair and maintenance, are allowed, but not major repair or modernisation; such operations must not increase the value of the goods.
7. The money question (Article 58). Duties and taxes paid on export are refunded in the manner set in Chapter 49 of the Code for the part of the goods actually returned, if they are brought in by the person who took them out or by that person's legal successor. Conversely, amounts received on export as a result of benefits are repaid by the authorised person in the manner set by legislation.
8. Documents (Article 60). The declarant submits the CCD and the accompanying documents for the goods to customs. If there are permits, customs checks their existence independently in its own information system.

Example: a quarter of the apricots came back

"Zarafshon Quruq Meva" LLC shipped 20 tonnes of dried apricots to a buyer in Almaty: 40 000 dollars, cost 360 000 000 soum. The contract says the packaging label must be in the buyer's language, but the label on 5 tonnes turned out to be different. The buyer returned those 5 tonnes unopened and did not pay for them. The goods were not used, their condition has not changed, and the reason for return is a breach of a contract term, so the conditions of point 4 are met. Everything is hypothetical; so that the exchange difference does not distract, the return is assumed to happen in the same month with the rate unchanged (12 600 soum).

Result: net revenue 504 000 000 − 126 000 000 = 378 000 000 soum, which equals the 30 000 dollars the buyer will actually pay. The returned apricots are back in the warehouse and can be sold to another buyer with a new label.