Does Carbon Border Adjustment Mechanism (CBAM) apply to inward processing with prior exportation (EX/IM), including when a Transfer of Rights and Obligations (TORO) is used?
No. In EX/IM, non-Union raw materials declared for inward processing are not released for free circulation, so they fall outside CBAM obligations. Using a TORO does not change that. The Commission can still check whether the operation is circumvention under Article 27 of Regulation (EU) 2023/956.
What EX/IM is
The Commission's Questions and Answers (Q&A) 7.11 describe inward processing EX/IM as the case where Union processed products are exported and an equivalent quantity of non-Union raw materials, matching those exported processed products, is declared for inward processing upon entry into the customs territory of the Union.
Why CBAM stays out
Those non-Union raw materials are declared under inward processing and are not released for free circulation. They are therefore not subject to CBAM and fall outside the CBAM obligations. The use of a TORO does not affect this assessment and is not relevant for deciding whether CBAM applies.
The limit
This does not stop the Commission from monitoring such operations and assessing whether they may be a circumvention practice, where the conditions in Article 27 of Regulation (EU) 2023/956 are met.
When goods are released after inward processing
Where CBAM goods placed under inward processing are released for free circulation, CBAM obligations apply (Q&A 7.7), and code Y422 is mandatory on the declaration (Q&A 7.23). Our pages on inward processing and on customs codes cover both.
What Senseible does here
Senseible does not file customs or CBAM declarations and does not decide origin or who the declarant is.
- Does CBAM apply to inward processing?
- Customs codes Y128 to Y137
- Tariff suspension is no exemption
- Senseible for CBAM
Last reviewed 2026-11-05. Check Q&A 7.7 and 7.11 and any Commission guidance on circumvention before relying on an EX/IM structure.