Passive Refinement

Outward processing is a customs procedure that allows goods to be temporarily exported from the European Union (EU) in order to be processed, repaired or further processed abroad. Once the work has been completed, the processed goods can be re-imported into the EU. The major advantage of this procedure is that when the goods are re-imported into the EU, customs duties and taxes are only levied on the value of the processing or repairs carried out, but not on the total value of the goods. The procedure is often used in industry when it is more cost-effective to carry out certain production steps abroad, such as repairs or finishing of semi-finished products.