Goods that enter the customs territory of the EU from outside it may be stored under the supervision of (EU) Customs. When goods are stored in this manner, no import duties or other import taxes are owed. Furthermore, certain trade and agricultural policy measures, import bans, and import restrictions are not applied. This special customs warehouse is called a bonded warehouse. The storage of goods under customs control in a bonded warehouse requires a license.

When goods are shipped to the European Union (EU) they normally need to be customs cleared. This results in paying import duties and VAT.  It is possible to store the goods in a bonded warehouse for an unlimited period. During this period o duties and VAT are due. Duties and VAT need to be paid when the goods are sold to the EU client. In case the client is located in a Non-EU country the goods can be kept in transit. This means that the goods are transported in bond from the bonded warehouse whereas only the duties and VAT are paid in the country of destination.      

The majority of the bonded warehouses are administratively controlled. This means that because of the intensive administrative control the number of physical checks is reduced dramatically.