Temporary export (code 12): what conditions apply to goods taken out for an exhibition or a lease, and what happens if they are sold abroad?

A machine tool taken to an exhibition, a crane leased out or equipment sent for warranty repair crosses the border but is not sold: it has to come back. For such goods the Customs Code has the temporary export procedure, code 12 in the declaration (Instruction on the procedure for filling in the cargo customs declaration, Annex 3).

Key points

1. Essence (Article 36). Goods in free circulation in the customs territory are taken out for temporary use abroad. They are conditionally exempt from customs duties and taxes, and economic policy measures are not applied. "Conditionally" means: if the condition is breached, the payment comes back (point 8).
2. Three conditions (Article 37). Customs can identify the goods; if the goods are under the control of authorised bodies, their permit is in the customs information system; the person placing the goods under the procedure is a legal entity or individual of Uzbekistan, or else a foreigner accredited with the authorised state bodies. Abroad the goods must remain in unchanged condition.
3. Goods that cannot be placed under the procedure (Article 37). The Code lists six groups: (1) any goods whose export from the country is prohibited; (2) waste; (3) electricity, water, oil and gas supplied by pipeline, as well as fuel; (4) goods whose export is restricted by a quota; (5) consumables and consumable samples, raw materials, semi-finished products, food, soft drinks, alcohol and tobacco; (6) items intended for single use. The Code allows goods on this list to be exported temporarily only for advertising, demonstration and scientific research, as a single item.
4. Documents (Article 38). The CCD and the accompanying documents. If the goods go out under a lease, leasing, warranty service or an investment project, the supply or transfer contract is also submitted.
5. Term (Article 39). The general term is two years from the date of placement under the procedure. It can also be completed early. Cases in which it can be extended beyond two years: goods taken out for the needs of Uzbekistan's facilities, embassies and consulates abroad; railway and air transport vehicles, their spare parts and service equipment taken out under a lease agreement (depending on the lease term); goods taken out under leasing (for the leasing term); goods taken out under an export contract for servicing and remedying defects during the warranty period (for the warranty period; except those left abroad); goods for which a longer term is set by a resolution of the Cabinet of Ministers.
6. Extension procedure (Article 39). The application is filed before the procedure's term expires, the goods are not presented to customs and no new declaration is filed. Filing the application does not suspend the term.
7. Completion (Article 41). The goods are brought back no later than the day the term expires. Or the goods stay abroad and are placed under another procedure, and in that case they are not actually presented to customs (except where the law requires the goods to be brought in). On a change to export, the customs value and quantity are taken as of the day of placement under temporary export, while the duty and tax rates are those on the day the export CCD is registered. The right of use and disposal may, until the procedure is completed, be transferred to another legal entity or individual of Uzbekistan or to an accredited foreign person, but this does not change the term (Article 40).
8. If the term is breached (Article 41). If the procedure is not completed, duties and taxes are paid, calculated from the customs value at export and the rates on the day of placement. There are two exceptions: the goods were destroyed by an accident or force majeure; the goods left the owner's possession by a decision of foreign state bodies or an act (omission) of their officials. The burden of proof lies on the person responsible for the procedure, and confirmation is given by Uzbekistan's diplomatic and consular missions or by the authorised bodies of that country.

Example: the pump on display was sold

"Fargona Nasos" LLC took a display unit of an irrigation pump it makes itself (not a consumable sample but a finished pump standing at the exhibition) to an agricultural exhibition in a neighbouring country under procedure 12. Its actual production cost is 70 000 000 soum. Since the owner does not change, there is no sale entry at export: under paragraph 139 of NAS No. 21, finished goods handed over to an exhibition are moved from 2810 to account 2820 "Finished goods on exhibition". At the exhibition a local farm wanted to buy the pump for 9 000 dollars. The company does not bring the pump back: under Article 41 it changes the procedure to export (code 10). The exchange rate is hypothetically 12 500 soum.

Gross profit: 112 500 000 − 70 000 000 = 42 500 000 soum. The customs value, however, is taken as of the day the pump went out to the exhibition (point 7), so keep a copy of that CCD together with the sale documents.