Inward processing means that foreign goods are imported in order to be used in the customs territory in one or more processing operations, without being subject to:

1. import duty
2. other taxes
3. commercial policy measures, insofar as these measures do not prohibit the goods to be brought into or leave the customs territory.

Terms of the procedure

The Customs Service shall specify the period within which the inward processing procedure is to be discharged, in accordance with Article 286 of the Customs Code. This period shall begin as of the date when the foreign goods are placed under inward processing and shall be determined considering the length of time necessary for processing operations and discharge of the procedure, but not longer than 5 years.

The Customs Service may grant an extension, of a reasonable duration, of that period, upon justified application by the holder of the authorization.

In the event that prior exportation arrangement applies, the period shall not exceed 6 months, starting on the date of acceptance of the export declaration relating to the processed products obtained from the corresponding equivalent goods.

Upon the request of the authorization holder, the 6-month period can be extended, provided that the total period does not exceed 12 months, according to Article 327 of the Customs Code.

Authorization and conditions for placement under the procedure

The applicant shall submit a request (.doc.) for authorization based on the template form provided in Annex 27 of the Regulation on the implementation of the Customs Code, approved by Government Decision no. 95/2021.

The authorization shall be issued if the following conditions are met:

• provisions of para 5-7 Article 279 of the Customs Code are observed
• provisions of Article 325¹ of the Customs Code are observed
• compliance with the conditions defined on equivalent goods can be checked in accordance with Article 326 (3) of the Customs Code
• transaction-related reference documents (contracts, correspondence, expert reports, etc.) are duly attached.

Equivalent goods may be used under inward processing, as the case may be.

The authorization for the use of the inward processing procedure may be granted for production accessories for the purpose of processing operations, except for:

1. fuels and energy sources, other than those needed for the testing of processed products or for the detection of faults in the goods placed under the procedure needing repair
2. lubricants, other than those needed for the testing, adjusting, or withdrawing of processed products
3. equipment and tools.

The authorization for the use of the inward processing procedure shall be granted only if any of the following conditions are met:

1. after processing, the goods cannot be restored to the state as it was when they were placed under the procedure
2. the use of the procedure cannot result in circumvention of the rules concerning the origin and quantitative restrictions applicable to imported goods.

The following activities may be carried out under the inward processing procedure:

• working of goods, including their mounting, assembling, or fixing onto other goods
• processing of goods
• repair of goods, including their restoration, defect removal, adjustment
• using, in compliance with the customs regulations, of certain goods, which do not appear amongst the compensating products but enable or facilitate the manufacturing of those products, even when such are used in full or in part in the refining process.

As a result of inward processing, compensating products are obtained, including main compensating products (for the production of which the procedure was authorized), and secondary compensating products (which are necessary by-products of the processing operation).

Inward processing allows the use of foreign and domestic raw materials and can confer to the processed products the origin of the Republic of Moldova if the rules relating to preferential origin are duly met. Domestic goods can be used not only to supplement the foreign ones, but also as equivalent thereof. In this case, the foreign goods are substituted by domestic ones, and the latter are removed from the country as compensating products (equivalent compensation).

Rate of yield

The rate of yield or the method of its calculation shall be set when issuing the authorization by duly considering the production or technical information.

The rate of yield indicates the quantity or percentage of compensating product which is produced from the processing of a given quantity of goods placed under a processing procedure.

The rate of yield or the average rate of yield shall be determined based on the actual circumstances in which processing operations are, or are to be, carried out. This rate is subject to adjustment according to Article 29 of the Customs Code.

Release for free circulation

As set forth in Article 193 of the Customs Code, where the products processed and obtained from inward processing are released for free circulation, and the amount of import duties is calculated in accordance with Article 96 (4) of the Customs Code, the commercial policy measures to be applied shall be those that apply to the release for free circulation of the goods placed under inward processing.

These provisions shall not apply to waste and debris

As also set forth in Article 193 of the Customs Code, where the amount of import duties is calculated in accordance with Article 96 (1) of the Customs Code, the commercial policy measures shall apply only if the goods placed under inward processing are subject to such measures.

As set forth in Article 288 (2) of the Customs Code, the goods placed under the procedures of inward processing, temporary admission, or final destination (end-use) can circulate between different places in the customs territory without any customs formalities, provided that the location of the goods and the information about any movement thereof is entered in the records provided for in Article 285 of the Customs Code.

Warranty

According to Article 187 of the Customs Code, where placing the goods under a customs procedure gives rise to occurrence of a customs debt, the release for circulation shall de dependent upon payment of the amount of import or export duties corresponding to the customs debt or provision of a guarantee to cover this debt.

According to Article 96 of the Customs Code, where a customs debt is incurred because of processed products obtained from inward processing, the amount of import duties corresponding to this debt shall be determined, upon the declarant’s request, based on the tariff classification, the customs value, the quantity, the nature and the origin of the goods placed under inward processing at the time of acceptance of the customs declaration on these goods.

There are 2 types of guarantees:

• isolated guarantee – this is the guarantee that covers the amount of import duties corresponding to the customs debt for a single operation or customs declaration
• global guarantee – this is established, at the request of the person who is requested to create the guarantee, to cover the amount of import duties corresponding to the customs debt due, in connection with two or more operations, declarations or customs procedures.

The guarantee can be established in the form provided for in Article 101 of the Customs Code, namely:

• by depositing funds in cash or by transfer to the guarantee treasury account, made in the national currency
• by the commitment of a guarantor
• by depositing a cash deposit in the national currency, euros, or US dollars, in the case of external transit.

Under the isolated guarantee:

• the guarantee shall be provided by the applicant of the procedure (consignee)
• the guarantee shall be established upon registration of the customs declaration of inward processing. If the customs declaration fails to meet the requirements provided for in p. 356 of Government Decision 92/2023, the guarantee shall be established upon authorization.
• the guarantee shall cover the payment of import duties.

Under the global guarantee:

• the guarantee shall be provided by the holder of the authorization for the use of global guarantee and the applicant of the procedure
• the guarantee shall be established upon authorization of the global guarantee, before obtaining the authorization of the procedure
• the guarantee shall cover the payment of import duties.

Discharge of procedure

The inward processing procedure shall be discharged under the conditions specified in Article 286 of the Customs Code. Following the discharge of the inward processing procedure, the holder of the authorization must, within 30 days, submit the bill of discharge (drawn up according to the control record form) to the supervising customs office. The deadline set for the submission of the bill of discharge can be extended by up to 60 days.

Hence, the supervising customs office may grant an exemption from the obligation to submit the bill of discharge if it deems that this is not necessary (these situations are listed in p. 370-371 of the Regulation on the implementation of the Customs Code, approved by Government Decision no. 92/2023).

Legislation:

• Customs Code of the Republic of Moldova no. 95/2021; Codul Vamal al Republicii Moldova nr.95/2021;
• Government Decision no. 92/28.02.2023 regarding the implementation of Customs Code no. 95/2021; Hotărârea Guvernului nr.92/28.02.2023 cu privire la punerea în aplicare a Codului Vamal nr. 95/2021;
• Order of the Customs Service no. 541-O/2023 regarding the implementation of the customs regime of inward processing; Ordinul Serviciului Vamal nr.541-O/2023 cu privire la derularea regimului vamal de perfecționare activă;
• Order of the Customs Service no. 550-O/2023 regarding the approval of the Technical Norms for the application of guarantees, Ordinul Serviciului Vamal nr.550-O/2023 cu privire la aprobarea Normelor tehnice de aplicare a garanțiilor.