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Inward processing (IP) enables goods which are not intended for free circulation in the UK to be imported duty-free so that they may be processed by undertakings based in the UK and then re-exported¹. Inward processing arrangements are aimed at promoting exports from UK undertakings, under the international division of labour, by enabling them to import goods from without paying import duties where they are to be exported from the UK after processing, but without adversely affecting the essential interests of UK based producers. Similar principles have been settled by EC v Netherlands (Case 49/82) [1985] ECR 1195 at 1209, [1983] 2 CMLR 476 at 482, ECJ and Fabrica de Queijo Eru Portuguesa Ld v Subdirector-Geral das Alfândegas (Case C–325/96) [1997] ECR I–7249, ECJ. Beneficiaries of the inward processing procedure are required to comply strictly with their obligations under that procedure because it involves obvious risks to the correct application of the customs legislation and the collection of duties: Terex Equipment