Existing problems for airlines were highlighted and grew significantly after the unprecedented chain of events of 11 September 2001. In response, airline executives have altered cost structures; and radically refocused and restructured their operations.
Airlines are involved in international movements of passengers and goods and are faced with a vast and confusing array of customs procedures and compliance responsibilities. The consequences for an airline making errors – often without realising the consequences – are huge: considerable amounts of money can be lost and, possibly even more importantly, a working relationship with the customs authorities can be damaged, carrying implications for the speed of clearance of passengers and goods.
Chicago Convention: The customs treatment of airlines is mostly governed by Article 24 of the Chicago Convention which allows for aircraft on a flight to, from, or across the territory of another contracting State to be admitted temporarily free of duty, subject to the customs regulations of the State. Fuel, lubricating oils, spare parts, and regular equipment and aircraft stores on board an aircraft of a contracting State, on arrival in the territory of another contracting State and retained on board on leaving the territory of that State shall be exempt from customs duty, inspection fees or similar national or local duties and charges. This exemption shall not apply to any quantities or articles unloaded, except in accordance with the customs regulations of the State, which may require that they shall be kept under customs supervision.
Cabotage: There is a lot of confusion in respect of customs and cabotage for operators flying to, from and within the European Union (EU). In essence, there are well-founded concerns that Customs Administrations in different EU Member States take divergent views regarding what constitutes an internal flight; what is business and what is private use, etc. There is often uncertainty about what one can and can’t do and the customs authorisations and documentation needed to support entry and movement within the EU.
Duty-free: A key international trade matter is the global duty-free allowances available to passengers travelling worldwide. Duty-free allowances are normally only available if the goods are carried personally by the passenger. The allowances usually cover tobacco products, wines, spirits and perfume. As well as the issue of allowances there are issues in respect of stock loss and the payment of excise duty to Customs.
We offer a variety of solutions to the airline industry. We can provide:
- Training programmes for those involved in the import and export of aircraft parts;
- Details of duty-free schemes worldwide;
- Guidance on Aircraft Stores operations and bonded facilities;
- Advice on best practice and minimisation of customs duty and excise payments; and
- Assistance with customs cabotage problems.