The European Commission (“Commission”) published its proposal to recast the UCC and related legislation. In its press release the Commission described the package as “the most ambitious and comprehensive reform of the EU Customs Union since its establishment in 1968.” The Commission based its proposal to reform customs on three principles:
- increasing efficiency by simplifying and modernizing customs procedures;
- better enforcing not only the EU’s and Member States’ financial interests, but also the EU’s security, safety, health, economic or environmental interests and values; and
- future-proofing the Customs Union by focusing in particular on making the entire supply chain transparent.
The reform is based on three main pillars: a new partnership between customs and business; an updated surveillance and risk assessment model; and a more modern framework for e-commerce. In line with the envisaged new partnership among the EU customs authorities and between customs and business, the reform establishes two key enablers: the EU Customs Authority, which will assume its tasks on 1 January 2028, and the EU Customs Data Hub, which will be overseen and operated by the EU Customs Authority. The EU Customs Data Hub is scheduled to be available for use by e-commerce companies on 1 January 2028. Starting 1 January 2032 access will be expanded so that all traders will be able to use it on a voluntary basis. As of 1 January 2038 use of the EU Customs Data Hub will become mandatory for all traders.
The reform has targeted three sets of simplifications for traders:
- the reduction of formalities for all traders;
- the introduction of a new trader-status: the ‘Trust and Check trader’; and
- putting in place special rules tailor-made for e-commerce.
The Commission has identified four major simplifications for businesses and authorities:
- the creation of a single EU interface for the submission of customs data (EU Customs Data Hub);
- the establishment of a customs one-stop-shop for Trust and Check traders;
- reforming e-commerce import procedures so that they are simpler and more transparent; and
- simplifying the calculations of customs duties for low-value goods by introducing the 4-bucket duty calculation method.
The EU Customs Data Hub will act as the engine of the new system and replace the Member States’ individual IT infrastructures. It will allow traders to log all customs information pertaining to their products and supply chains into a single IT-interface, thus avoiding dealing with 27 different – and sometimes non-interoperable – national customs IT infrastructures. Each consignment will be linked to a single operator, who will be responsible for paying the duties and complying with product rules. However, transporters, warehouse operators, etc. will also enter their relevant data elements via the EU Customs Data Hub. This is in line with the Commission’s greater emphasis on the collection of first-hand data from trade and commercial systems, web platforms and other sources, correspondingly reducing reliance on third-party data. The ‘fist-hand data approach’ will be employed in customs processes generally. For traders this also means that the level of detail that importers will need to provide to customs will not increase, but rather will remain the same, according to the Commission.
If stable information on supply chains that is not expected to change in the short term is provided, that information can be reused for subsequent imports or exports. This means that the information needs to be provided only once, rather than for each consignment as is the case today; once the information has been provided, that data can be used for multiple successive consignments, provided the information has not changed. The Commission believes that this will, over time, provide a full overview of businesses’ supply chains and activities.
The creation of the EU Customs Data Hub and the simplifications offered under the reform are closely related to the shift to a new focus on the problems and risks of overall supply chains and away from process compliance of individual consignments. In other words, the new risk management approach concerns not only financial risks (customs duties not collected) but also non-financial risks, such as safety, security, product standards and the environment. The EU Customs Data Hub will therefore also be interoperable with other databases, e.g. ECHA. This interoperability and data sharing will enable links such as those between the EU Customs Single Window Certificates Exchange and the Digital Product Passport registry. From this perspective the EU Customs Data Hub will build on the EU Single Window Environment for Customs (EU CSW) and the new Import Control System (ICS 2) by enabling the joint use of data.
One major goal is to develop common risk management strategies at the EU level which are applied equally by all Member States. The information provided to the EU Customs Data Hub will be the basis for the data-driven risk management strategies and programmes. The EU Customs Authority will be responsible for issuing control recommendations to national customs authorities, which those will have to apply or justify not applying those recommendations. Thus, a common, EU-wide risk analysis will underpin control recommendations and a common risk management will be put into place, thereby leading to a more harmonized application of customs controls. Furthermore, the Commission, OLAF and EPPO will have access to the EU Customs Data Hub, thereby substantially increasing their analytical capabilities.
The Trust and Check trader status will build on and strengthen the current AEO status. This status will be open to traders who have conducted regular customs operations in the course of their business for at least 3 years and meet other strict criteria, such as having a clean legal record, a high level of control of their operations and supply chain, and financial solvency. Applicants will need to have an electronic system providing or making available to the customs authorities real-time all data on the movement of the goods and the compliance of the importer or exporter with all requirements applicable on those goods, including relating to safety and security and including where relevant sharing certain information in the EU Customs Data Hub.
Trust and Check traders will be able to move their consignments through a ‘green lane’ without formal customs interaction and free of administrative burden; customs authorities will request a control only if necessary. The customs authorities will be able to authorize Trust and Check traders to self-monitor the compliance of their goods under certain conditions and release the goods on behalf of the customs authorities for free circulation. Thus, Trust & Check traders will also be able to clear all of their imports with the customs authorities of the Member State in which they are based, no matter where the goods enter the EU. Trust and Check traders will also be permitted to pay the duties owed periodically, without submitting transaction-based customs declarations on a consignment-by-consignment basis.
The one-stop-shop for Trust and Check traders will significantly simplify customs formalities. Instead of having to deal with 27 national customs administrations, thanks to the use of the EU Customs Data Hub, Trust and Check traders will only have to deal with one single customs authority and will still be able to operate across the entire European Union. In 2035 this approach will be reviewed to see whether it can be extended to all traders when use of the EU Customs Data Hub becomes mandatory
for all traders in 2038.
The key to the Trust and Check system from the point of view of the Commission and customs authorities is the availability of real-time, high-quality, coherent and accurate information, allowing a full supply chain overview and the ability to conduct the new type of risk analysis.
The customs simplification for e-commerce and simplifications for calculating customs duties for low-value goods may be seen in tandem.
Although the exemption from VAT for imported goods having a value of not more than € 22 was eliminated in July 2021, the exemption from customs duties for low-value goods (i.e. goods not having a value exceeding € 150) has been retained. Under the new procedures, however, this exemption will be eliminated as it was for VAT and replaced by a 4-bucket system. Upon request by the importer, the customs duties for low-value goods can be calculated according to the 4-bucket system in the case of e-commerce. The ad valorem duty rates are 5 %, 8 %, 12 % and 17 %, depending on the imported good. However, this simplification will not be available for certain goods subject to excise duties, goods subject to trade remedies or goods falling within Chapters 73, 98 and 99.
Under the new rules, digital platforms will be deemed to be the importers of the goods they sell, meaning that they will be responsible for completing the customs formalities and making the payments associated with the import of the good. The digital platform will charge their customer the customs duties, import VAT, etc. at the moment of sale and pay the respective amounts to the respective Member State. EU citizens will therefore have full transparency when making their purchases and no longer have to deal with unexpected compliance fees from the postal or express operators.
Links:
EUR-Lex - 52023DC0257 - EN - EUR-Lex
EUR-Lex - 52023PC0258 - EN - EUR-Lex
EUR-Lex - 52023PC0259 - EN - EUR-Lex
EUR-Lex - 52023PC0262 - EN - EUR-Lex
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