# EUR-Lex - 52012PC0464 - EN

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# 52012PC0464

**Amended proposal for a REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL establishing an action programme for customs in the European Union for the period 2014-2020 (Customs 2020) and repealing Decision N°624/2007/EC /* COM/2012/0464 final - 2011/0341/a (COD) */**

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EXPLANATORY MEMORANDUM

1.           CONTEXT OF THE PROPOSAL

On 29 June 2011, the Commission adopted a
proposal for the next Multi-Annual Financial Framework for the period 2014-2020[1]: a budget for delivering the
Europe 2020 Strategy proposing among others a new Customs programme. The
Customs 2020 programme will contribute to the Europe 2020 Strategy for
smart, sustainable and inclusive growth[2],
by strengthening the functioning of the customs union.

The customs union protects the
financial interests of the Union and its Member States collecting duties, fees
and taxes[3].
It requires that goods originating from third countries comply with Union
legislation before they can move around freely within the Union. This implies
the management of large trade volumes on a daily basis
– handling 7 customs declarations every second - requiring customs to strike a balance
between the facilitation of trade for business and the protection of citizens
against risks to their safety and security. This can only be achieved through intense operational cooperation between customs administrations of
the Member States, between them and other authorities, with trade and other
third parties.

The proposed programme will support the cooperation
mainly between the customs authorities but also with other parties
concerned. It is the successor programme of the Customs 2013 programme which
ends on 31 December 2013. The proposed programme will
support customs cooperation in the Union clustered around human networking and
competency building, on the one hand, and IT capacity building on the other
hand. The first cluster allows for the exchange of good practices and
operational knowledge amongst the Member States and incidentally other
countries participating in the programme. The latter enables the programme to
fund appropriate IT infrastructure and systems that allow customs administrations
in the Union to evolve to fully-fledged e-administrations. The main added-value
of the programme is generated by enhancing the capacity of Member States in
raising revenue and managing increasingly complex trade flows, while cutting
costs in developing the tools for these purposes.

2.           RESULTS OF CONSULTATIONS WITH THE
INTERESTED PARTIES AND IMPACT ASSESSMENTS

2.1.        Consultations and
expertise

In the context of the midterm evaluation of
the Customs 2013 programme[4],
a contractor analysed the effectiveness, efficiency, relevance and value added
of the programme. Monitoring data available from the different activities was
used and consultations with trade representatives were carried out.

Another contractor carried out a study of
the possible framework of the future Customs programme[5]: its challenges, objectives and
possible policy options, including a comprehensive analysis of future
challenges, structural problems and possible improvements to the functioning of
the customs union. For the latter, consultations were carried out with customs
experts at different levels. The findings of this study were discussed with the
representatives of the participating countries in a workshop organised in July
2011. In preparation of this workshop, a roundtable was organised in spring
2011 in the relevant programme Committee[6]
meeting where participating countries were asked to identify the main strengths
of the programme and how the efficiency of the programme could be improved.

Considering the importance of the
activities related to the exchange of information, a separate study was carried
out on the future implementation strategy for the exchange of information. This
study was presented in a workshop for Chief Information Officers of customs
administrations in June 2011.

An impact assessment was prepared analysing
the continuation of the Customs 2013 programmes and approved by the Impact
Assessment Board on 22 September 2011.

Recommendations for design and further
improvements of the programme were taken on board in the development of the
future programme proposal. The programme proposal includes new tools, notably
regarding cooperation on specific operational tasks. Measures are taken to improve
the distribution of the results of the programme activities using online
collaboration methods and to better monitor the outputs of the programme.

2.2.        Impact assessment

Considering the overall policy context and
problems ahead for customs in the next decade, a number of policy options has
been analysed and compared in the impact assessment accompanying the present
programme.

(1)
Baseline: continuing
the programme with the current objectives and design.

(2)
No continuation of the programme: the programme would be discontinued and EU funding will no longer be
provided for IT tools, joint actions or training activities supporting
cooperation in the customs area.

(3)
Increased support to EU legal obligations
such as the Modernised Customs Code (MCC): This
policy option would extend the baseline scenario tailoring the programme to the
new needs deriving from the evolving customs union environment, including the Union
Customs Code (UCC)[7].
This option covers the deployment of new IT systems as defined in EU customs
legislation, gradually introducing a shared development model for the IT
systems and modernising the underlying governance, architecture and technology.

(4)
Increased support to EU legal obligations and
financial support for technical capacity building:
Besides the components of the previous option, this option would include a
financial support scheme allowing Member States to request support to acquire
equipment to control land, sea or air borders, for instance scanners or
laboratory equipment. This would support Member States to meet the demands for
speeding up and streamlining controls in the context of evolving technologies.

(5)
Increased support to EU legal obligations with
a maximised shared IT environment: Besides the
components of option 3, this option supports EU customs to take the advantage
of full scale shared development and operation of the European IT systems to
implement EU customs legislation such as the MCC and other customs related
legislations. This option would ensure enhanced support to the public
authorities to develop and deploy all the systems necessary for a pan-European
electronic customs environment and to business to connect to those systems.

The impact assessment identified option 3
"Increased support to EU legal obligations such as the Modernised
Customs Code (MCC)" as the preferred option. It is in line with the
proposal for a new budget for Europe 2020 and scores best on acceptability by
Member States. The option "Increased support to EU legal obligations and
financial support for technical capacity building" has not been retained
since the acquisition of equipment expressed in the technical capacity building
component could be co-funded through other programmes including Regional
Structural Funds while ensuring coherence with the priorities of the proposed
Customs 2020 programme.

3.           LEGAL ELEMENTS OF THE PROPOSAL

3.1.        Legal basis

The Customs 2020 proposal is based on article
33 of the Treaty on the Functioning of the European Union (TFEU) which
calls for action by the European Union with regard to customs cooperation and
the EU customs union.

3.2.        Subsidiarity and Proportionality

Action at Union level rather than at
national level is necessary for the following reasons:

·
The customs union is an exclusive
competence of the Union. By transferring their powers to the Union, Member States ipso facto agreed that actions in the customs area will be
better implemented at Union level. However, the Union legal framework in itself
does not ensure sufficiently the proper functioning of the customs union. It
should be complemented by supporting measures as provided by the Customs programme
in order to ensure that EU customs legislation is applied in a convergent and
harmonised way.

·
Many of the activities in the customs
area are of a cross-border nature, involving and affecting all 27 Member
States, and therefore they cannot be effectively and efficiently delivered by
individual Member States. EU action is needed to underpin the European
dimension of customs work, to avoid internal market distortions and to support
the effective protection of the EU external borders.

·
In this regard, EU action is justified to ensure
the proper functioning and further development of the customs union and its
common regulatory framework, as it has been shown to be the most efficient and
effective EU response to shortcomings and challenges in implementing the EU
customs union and customs cooperation.

·
From an economic point of view, action at
EU level is much more efficient. The backbone of the customs cooperation is a
highly secured dedicated communication network. It interconnects national
customs administrations in approximately 5 000[8]
connection points. This common IT network ensures that every national
administration only needs to connect once to this common infrastructure to be
able to exchange any kind of information. If such an infrastructure were not
available, Member States would have to link 26 times to the national systems of
each of the other Member States.

The Commission shall, for the purpose of
implementing the programme, according to Article 17 TEU, exercise coordinating,
executive and management functions, as laid down in the Treaties. The Customs
2020 Programme is therefore in line with the principles of subsidiarity and
proportionality (as set out in Art. 5 of the Treaty of the European Union
(TEU).

3.3.        Instrument

In line with the conclusion of the relevant
impact assessments, EU intervention by means of a funding programme
is appropriate. Taking into account the positive feedback resulting from the
midterm evaluation of the Customs 2013 programme, a successor Customs 2020 programme
is being proposed by the Commission.

In line with the Commission legislative
policy adopted in the framework of the Multi-Annual Financial Framework, the
successor funding programme is proposed as a regulation.

4.           BUDGETARY IMPLICATION

The timing of
the review of EU funding programmes is linked to the proposal for a new
Multiannual Financial Framework, as amended on 6 July 2012[9]. In
accordance with this proposal, this Regulation on the Customs 2020 programme
contains a budgetary framework of EUR 548.080.000 (in current
prices) for the period of 2014-2020.

The Customs
2020 programme will be implemented by means of a direct central management mode
and in a priority-based manner. Work programmes are established –together with
the stakeholders- stipulating the priorities for a specific period.

5.           OPTIONAL ELEMENTS

5.1.        Annotations to specific
legal provisions

5.1.1.     Chapter I: General
Provisions

The scope of the programme is
specifically oriented towards the functioning of the EU customs union. It will
be open for participation to the Member States, Candidate Countries and
potential Candidates. In line with the overall Union policy in this respect,
countries of the European Neighbourhood Policy will also have the possibility
to take part in the programme under certain conditions. Finally, 'external
experts' might also participate in specific actions (e.g. representatives of
other authorities, trade, national and international organisations, and
possibly other experts), if required to realise the programme objectives.

The objectives of the Customs 2020 programme
address the identified problems and expected challenges for customs in the next
decade. The overarching objective of the programme is to strenghten the
internal market through an efficient and effective customs union.

To provide an adequate answer to the future
challenges in the customs area in the Union, the following specific objective
has been defined for the programme: to support the functioning of the customs
union, in particular through cooperation between participating countries, their
customs authorities, other competent authorities, their officials and external
experts. The programme will have the following priorities:

1.
to support the preparation, coherent application
and effective implementation of Union law, with a view of strengthening the customs
union in terms of efficiency, effectiveness and uniformity.

2.
to strengthen the competitiveness of European
businesses through the facilitation of legitimate trade, the reduction of
compliance costs and administrative burden, and the protection against unfair
competition,

3.
to support customs in protecting citizens,
safety and security and the environment.

4.
to ensure the protection of the financial and
economic interests of the European Union and the Member States;

5.
to contribute to the efficient functioning of
customs authorities by improving their administrative capacity,

6.
to fight fraud and to enhance competitiveness,
safety and security through cooperation with international organisations, third
countries, other governmental authorities, economic operators and their
organisations,

5.1.2.     Chapter II: Eligible
actions

The types of actions considered eligible
for programme funding are similar to the ones under the current programme,
namely:

·
Joint Actions pursuing the exchange of knowledge
and good practice between customs officials of the participating countries;

·
European Information Systems[10] facilitating the exchange of
information and access to common data;

·
Training activities leading to human competency
building for customs officials across Europe.

Modifications have been introduced in
certain categories of actions.

·
The Customs 2020 programme will include some new
joint action tools:

·
Expert teams are
structured forms of cooperation, pooling expertise and/or addressing specific
operational activities. They can be set up with a non-permanent or permanent
character and could receive support such as online collaboration services,
administrative assistance and infrastructure and equipment facilities to
underpin the realisation and success of an action.

·
Actions for public administration capacity
building will support customs authorities that face
particular difficulties, be it lacking knowledge, expertise, organisational or
any other deficiencies which can be overcome through tailor-made support
actions provided by fellow countries and or Commission officials.

·
Benchmarking activities and steering groups are no longer explicitly mentioned in the list of Joint Actions
since these can be considered as project groups with a particular purpose
respectively identification of best practices to reveal improvement
opportunities or the coordination and steering of programme activities in a
given area.

·
As regards the European Information Systems, the
new programme defines "Union components" as IT assets and services which
concern some or all of the Member States and are
owned or acquired by the Commission. These Union components are described in point
2 of the Annex of the proposed legal act. The "national components"
are all components which are not "Union components". They are
developed, installed and operated by Member States, and thus subject to the
funding and responsibility of Member States.

The redefinition of Union components should be
seen in the light of the changing practice of IT systems development. Currently
each Member State is responsible for the implementation of its national systems
according to common specifications, resulting in 27 developments for each
system, 27 trader interfaces, 27 schedules of development, 27 sets of project
related or operational difficulties, etc. In particular in the light of the
economic and financial crisis, the Commission considers that the development of
IT systems should be done more efficiently.

This evolution aims at improving the
consistency of data and application of rules by gradually moving towards more
shared IT development (knowledge, data, IT components). It will bring improved
working methods for instance through business process modelling, better quality
specifications but also will bring more standardisation for instance
harmonising interfaces for traders. The new approach towards Union components
will limit the risk for divergent development and deployment plans. It also
provides additional means to control the finalisation of the project as common
plans avoid that the slowest member in the development chain determines the
entry in operation of the entire project.

5.1.3.     Chapter IV: Implementation

In order to ensure uniform conditions for
the implementation of this Regulation, implementing powers should be conferred
on the Commission. As such an annual work programme will be adopted in
accordance with the examination procedure referred to in Article 5 of
Regulation (EU) No 182/2011 of the European Parliament and the Council of 16
February 2011 laying down the rules and general principles concerning
mechanisms for control by the Member States of the Commission's exercise of
implementing powers[11].

5.2.        Simplification

5.2.1.     How did the proposal
contribute to simplification?

(a)
Coherence with the financial regulation

The programme proposal is fully coherent with
the financial regulation and its implementing provisions. Grants and
procurement are the main financial instruments used to implement the programme.
The programme incorporates the simplification measures proposed in the
Commission proposal for the revision of the financial regulation, notably the
recourse to lump sums, flat rates and unit costs. In view of the importance of
the processing of subsistence and travel costs paid under the programme, the
programme will introduce simplification measures offered by the new Financial
Regulation in this area.

(b)
Coherence between the Customs and Fiscalis 2013
programmes

The management of the previous Customs and
Fiscalis programmes had been fully aligned based upon identical procurement
rules and grant models, common management guides and IT based systems. The
management model includes clear and simple procedures for organising programme
activities. The programme management team of the Commission is assisted by
programme management teams in the different customs and tax administrations
acting as facilitator and first point of contact for customs, respectively
taxation officials in Member States. The management model allows the deployment
of activities in a short time span, reacting quickly to newly emerging needs,
while at the same time guarding coherence between the different activities. The
Member States have expressed their satisfaction with the management model of
the programme in the midterm evaluation.

Considering this close alignment of both
programmes and further to the simplification objective of the proposal for the
2014 – 2020 multiannual financial framework[12], the Commission initially
proposed a single FISCUS programme as successor for the Customs and Fiscalis
2013 programmes[13].
In view of the unanimity of Member States being in favour of splitting the
proposed single programme, the Commission, while maintaining its position
against this split, proposed an amended proposal with two legislative texts for
respectively the Customs and Fiscalis 2020 programmes. Notwithstanding the
introduction of these separate legislative texts, maintaining the alignment
between both programmes will be a priority for the Commission and where
appropriate, it will be further pursued when implementing the Customs and
Fiscalis 2020 programmes.

(c)
Did the programme consider externalisation?

The possibility to implement the future programme
through an executive agency was considered. An agency could be empowered
to execute tasks such as the selection of the activities under the programme,
the administrative preparation and follow-up of the activities, monitoring of
the activities, grants and procurement of IT systems. However, such an
executive agency would add an additional layer to the governance structure, increasing
the cost of coordination and checks, complicating and lengthening decision
making by adding new administrative procedures. Also, it would have a negative
impact on the level of know-how within the Commission and increase the risk of
a fragmentation of content versus administrative aspects. This option would not
bring the expected business benefits and has therefore been discarded.

In an alternative scenario, it was also
considered to transfer all relevant IT activities to national
administrations with the exception of the CCN/CSI network and its related
services. In this scenario the risk is very high that gradually it would be necessary
to set-up more central governance structures. The resulting impact would be
similar to the effects of the discontinuation of the programmes which would put
at risk the efficiency and effectiveness of customs administrations, challenge
the uniformity of the customs union and thus the equal treatment of traders.
Considering the negative impacts on results and performance, this scenario was
also discarded.

(d)
Does the programme use common IT tools to reduce
the administrative burden on beneficiaries and contractors?

The Customs 2013 and Fiscalis 2013 programmes
already deploy tools to facilitate the management of the programme activities
and related expenditure through a common Activity Reporting Tool (ART). This
will be continued.

5.2.2.     Performance measurement of
the proposal

The performance of the programme will be
measured using a coherent set of performance, impact, result and output
indicators linked to the general and specific objectives and priorities of the
programme and building the link with the Commission Management Plan. The
detailed list of impact, result and output indicators is available in the
Impact Assessment. The Commission has identified targets for some outputs of
the programme, others will be completed through actions within the Customs 2013
programme. The targets of all outputs will be identified before the start of
the Customs 2020 programme by the Commission and presented to the programme
Committee.

5.2.3.     Is the programme proposal
coherent with overall Commission policy

The programme will contribute towards the
objectives of the Europe 2020 Strategy by strengthening the Single Market,
enhancing the productivity of the public sector and sustain technical progress
and innovation in administrations, and by promoting employment. It will support
flagships on the digital agenda for Europe[14]and
the flagship on the Agenda for New Skills and Jobs[15]. The programme will also
support the Single Market Act[16]
and promote growth and innovation by enforcing intellectual property rights
(IPR) at the border in line with the recent comprehensive IPR strategy.[17] As concerns the protection of the
financial interests of the Union and Member States, the programme will
support the collection of duties and various fees on trade, and
collaborative efforts to fight fraud[18].
The customs union is the operational arm of EU trade policy, and the programme
will therefore help implementing bilateral and multilateral trade agreements,
collecting duties, and applying trade measures (such as rules of origin), embargoes
and other restrictions in line with the EU trade strategy[19]. More recently, customs have
been entrusted a role in protecting the environment (related inter alia to
illegal waste export, chemicals, ozone depleting substances, illegal logging
and the CITES convention). Finally, customs action and cooperation between
customs, police and other enforcement authorities increasingly contribute to internal
security of the EU as reflected in the action plan for the Internal Security
Strategy[20]
and in the Stockholm Programme Action Plan.[21].

2011/0341/a (COD)

Amended proposal for a

REGULATION OF THE EUROPEAN PARLIAMENT
AND OF THE COUNCIL

establishing an action programme for
customs in the European Union for the period 2014-2020 (Customs 2020) and
repealing Decision N°624/2007/EC

THE EUROPEAN PARLIAMENT AND THE
COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty on the
Functioning of the European Union, and in particular Articles 33 thereof,

Having regard to the proposal from the
European Commission,

After transmission of the draft legislative
act to the national Parliaments,

Acting in accordance with the ordinary
legislative procedure,

Whereas:

(1)       The
multi-annual action programme for customs which applied before 2014 has
significantly contributed to facilitating and enhancing cooperation between
customs authorities within the Union. Many of the
activities in the customs area are of a cross-border nature,
involving and affecting all 27 Member States, and therefore they cannot be
effectively and efficiently delivered by individual Member States. The Customs
2020 programme, implemented by the Commission, offers Member States a Union
framework to develop these cooperation activities, which is more cost efficient
than if each Member State would set up its individual cooperation framework on
a bilateral or multilateral basis. It is therefore
appropriate to ensure the continuation of this programme by establishing a new
programme in the same area.

(2)       The
programme activities, i.e. the European Information Systems, the joint actions
for customs officials and the common training initiatives, are expected to
contribute to the realisation of the Europe 2020 Strategy for smart,
sustainable and inclusive growth[22].
In providing a framework for activities which strive for more efficient customs
authorities, strengthen the competitiveness of businesses, promote employment
and contribute to the protection of the Union's financial and economic
interests, the programme will actively strengthen the functioning of the
customs union.

(3)       To support
the process of accession and association by third countries, the programme should
be open for the participation of acceding and candidate countries as well as potential
candidates and partner countries of the European
Neighbourhood Policy[23]
if certain conditions are fulfilled. Considering the
increasing interconnectivity of the world economy, the programme continues to
provide the possibility to involve external experts, such as officials of third
countries, representatives of international organisations or economic operators
in certain activities. The setting up of EEAS under the
authority of the High Representative Vice-President (HRVP) may facilitate
policy coordination and coherence in an area which is a relevant component of
EU external strategies and actions, both on bilateral and multilateral basis.

(4)       The programme objectives
take into account the problems and challenges identified for customs in the
next decade. The programme should continue to play a role in vital areas like
the coherent implementation of Union customs and related law. Moreover, the focus
of the programme will be on protecting the financial and economic interests of
the Union, safeguarding safety and security, trade facilitation, among others
through collaborative efforts to fight fraud and increasing the administrative
capacity of customs authorities.

(5)       The programme tools which
applied before 2014 have proven to be adequate and have therefore been
retained. In view of the need for more structured operational cooperation, additional
tools have been added, namely expert teams composed of the Union and national
experts to perform jointly tasks in specific domains and public administration
capacity building actions which should provide specialised assistance to those
participating countries needing administrative capacity building.

(6)       The
European information systems play a vital role in reinforcing the customs systems
within the Union and should therefore continue to be financed under the
programme. In addition, it should be made possible to include in the programme new
customs related information systems established under Union legislation. European Information Systems should,
where appropriate, be based upon shared development models and IT architecture.

(7)       Human competency building in the form of common training should
also be realised through the programme. Customs officials need to build up and
update their knowledge and skills required to serve the needs of the Union. The programme should be essential to strengthen the human capacities through
enhanced training support that targets customs officials as well as economic
operators. To this end, the current common training approach of the Union which
was mainly based on central eLearning development should develop into a multi-facetted
training support programme for the Union.

(8)       The programme
should cover a period of seven years to align its duration with that of the
multiannual financial framework laid down in Council Regulation (EU) N° xxx of xxx
laying down the multiannual financial framework for the year 2014-2020[24].

(9)       For the entire duration of the programme, a financial envelope should be
laid down constituting the prime reference, within the meaning of point [17] of
the Interinstitutional Agreement of XX/YY/201Z between the European Parliament,
the Council and the Commission on cooperation in budgetary matters and on sound
financial management, for the budgetary authority during the annual budgetary
procedure.

(10)     In
line with the Commission's commitment set out in its Communication on the
Budget Review of 2010[25]
to coherence and simplification of funding programmes, resources should be
shared with other Union funding instruments if the envisaged programme
activities pursue objectives which are common to various funding instruments
excluding however double financing. Actions within this programme should ensure
coherence in the use of the Union's resources supporting the functioning of the
customs union.

(11)     The
measures necessary for the financial implementation of this Regulation shall be
adopted in accordance with Council Regulation (EC, Euratom) No xxx/20xx of xxx
on the Financial Regulation applicable to the general budget of the European
Communities, and with Commission Regulation (EC, Euratom) No xxx/20xx of xxx laying
down detailed rules for the implementation of Council Regulation (EC, Euratom)
No xxx/20xx of xxx (references of new financial regulation and implementing
act to be added).

(12)     The
financial interests of the Union should be protected through appropriate
measures throughout the expenditure cycle, including the prevention, detection
and investigation of irregularities, the recovery of funds lost, wrongly paid
or incorrectly used and, where appropriate, penalties.

(13)     In order to ensure uniform
conditions for the implementation of this Regulation,
implementing powers should be conferred on the Commission in respect of the
establishment of the annual work programmes. Those powers should be exercised in accordance
with Regulation (EU) No 182/2011 of the European Parliament and of the Council
of 16 February 2011 laying down the rules and general principles
concerning mechanisms for control by the Member States of the Commission's
exercise of implementing powers[26].

(14)     Since the objectives of the
action to be taken, namely establishing a multi-annual programme to improve the
functioning of the customs union, cannot be sufficiently achieved by the Member
States which cannot efficiently perform the cooperation and coordination
necessary to carry out the programme, the Union may adopt measures in
accordance with the principle of subsidiarity as set out in Article 5 TEU. In
accordance with the principle of proportionality, as set out in that Article,
this Regulation does not go beyond what is necessary in order to achieve those
objectives.

(15)     The Commission should be
assisted by the Customs 2020 Committee for the implementation of the programme.

(16)     Directive
95/46 of the European Parliament and of the Council of 24 October 1995 on the
protection of individuals with regard to the processing of personal data and on
the free movement of such data governs the processing of personal data carried
out in the Member States in the context of this Regulation and under the
supervision of the Member States competent authorities, in particular the
public independent authorities designated by the Member States. Regulation (EU)
No 45/2001 of the European Parliament and of the Council of 18 December 2000 on
the protection of individuals with regard to the processing of personal data by
the EU institutions and bodies and on the free movement of such data, governs
the processing of personal data carried out by Commission within the framework
of this Regulation and under the supervision of the European Data Protection
Supervisor. Any exchange or transmission of information by competent
authorities should be in accordance with the rules on the transfer of personal
data as laid down in Directive 95/46/EC and any exchange or transmission of
information by the Commission should be in accordance with the rules on the transfer of personal data as
laid down in Regulation (EC) No 45/2001.

(17)     This
Regulation should replace Decision N°624/2007/EC of the
European Parliament and the Council of 23 May 2007 establishing an action
programme for customs in the Community (Customs 2013)[27]. That Decision should
therefore be repealed,

HAVE ADOPTED THIS REGULATION:

Chapter I
General provisions

Article 1
Subject matter

1.           A multi-annual action
programme "Customs 2020" ("the programme") is hereby
established to support the functioning of the customs union.

2.           The programme shall cover
the period 1 January 2014 to 31 December 2020.

Article 2
Definitions

For the purpose of this Regulation the
following definitions shall apply:

(1)
"customs authorities" means the authorities
responsible for applying rules on customs;

(2)
"External experts" means:

(a)
representatives of governmental authorities
including from countries not participating in the programme according to
article 3(2)1 and 3(2)2;

(b)
economic operators and their organisations;

(c)
representatives of international and other
relevant organisations.

Article 3
Participation in the programme

1.           Participating countries
shall be the Member States and the countries referred to in paragraph 2
provided the conditions set out in that paragraph are met.

2.           The programme shall be
open to the participation of any of the following countries:

(1)
acceding countries, candidate countries and
potential candidates benefiting from a pre-accession strategy, in accordance
with the general principles and general terms and conditions for the
participation of those countries in Union programmes established in the
respective Framework Agreements, Association Council Decisions or similar
Agreements;

(2)
partner countries of the European Neighbourhood
Policy provided that those countries have reached a sufficient level of
approximation of the relevant legislation and administrative methods to those
of the Union. The partner countries concerned shall participate to the
programme in accordance with provisions to be determined with those countries
following the establishment of Framework Agreements concerning their
participation in Union programmes.

Article 4
Participation in the programme activities

External experts may be invited to take part in
selected activities organised under the programme wherever this is useful for
the achievement of the objectives referred to in Articles 5. These experts
shall be selected by the Commission on the basis of their skills, experience
and knowledge relevant to the specific activities.

Article 5
General objective and specific objective

1.           The general objective of
the programme shall be to strengthen the internal market through an efficient
and effective customs union.

2.           The specific objective of
the programme shall be to support the functioning of the customs union, in
particular through cooperation between participating countries, their customs
authorities, other competent authorities, their officials and external experts.

3.           The achievement of this
objective shall be measured on the basis of the following indicators:

(1)
the availability of the Common Communication
Network for the European Information Systems;

(2)
the feedback from participants in programme
actions and users of the programme.

Article 6
Priorities

The priorities of the programme shall be
the following:

(1)
to support the preparation, coherent application
and effective implementation of Union law, with a view of strengthening the customs
union in terms of efficiency, effectiveness and uniformity.

(2)
to strengthen the competitiveness of European
businesses through the facilitation of legitimate trade, the reduction of compliance
costs and administrative burden, and the protection against unfair competition,

(3)
to support customs in protecting citizens,
safety and security and the environment.

(4)
to ensure the protection of the financial and
economic interests of the European Union and the Member States;

(5)
to contribute to the efficient functioning of
customs authorities by improving their administrative capacity,

(6)
to fight fraud and to enhance competitiveness,
safety and security by enhancing cooperation with international organisations,
third countries, other governmental authorities, economic operators and their
organisations.

Chapter II
Eligible actions

Article 7
Eligible actions

The programme shall provide, under the
conditions set out in the annual work programme referred to in Article 14,
financial support for the following types of action:

(1)
Joint actions:

(a)
seminars and workshops;

(b)
project groups, generally composed of a limited
number of countries, operational during a limited period of time to pursue a
predefined objective with a precisely described outcome;

(c)
working visits organised by the participating
countries or a third country to enable officials to acquire or increase their
expertise or knowledge in customs matters; for working visits organised within
third countries only travel and subsistence (accommodation and daily allowance)
costs are eligible under the programme;

(d)
monitoring activities carried out by joint teams
made up of Commission officials and officials of the Participating Countries to
analyse customs practices, identify any difficulties in implementing rules and,
where appropriate, make suggestions for the adaptation of union rules and
working methods;

(e)
expert teams, which are structured forms of
cooperation, with a non-permanent or permanent character, pooling expertise to
perform tasks in specific domains or carry out operational activities, possibly
with support of online collaboration services, administrative assistance and
infrastructure and equipment facilities;

(f)
public administration capacity building and
supporting actions;

(g)
studies;

(h)
communication projects;

(i)
any other activity in support of the specific objective
and priorities set out in Articles 5 and 6

(2)
IT capacity building: development, maintenance,
operation and quality control of Union components of European Information Systems
set out in point 1 of the Annex and new European Information Systems established
under Union legislation

(3)
Human competency building: common training
actions to support the necessary professional skills and knowledge relating to customs.

Article 8
Specific implementation provisions for joint actions

1.           Participating countries
shall ensure that officials with the adequate profile and qualifications are
nominated to participate in the joint actions.

2.           Participating countries
shall take the necessary measures for the implementation of the joint actions,
in particular by raising awareness on those actions and by ensuring an optimal
use is made of the outputs generated.

Article 9
Specific implementation provisions
for the European Information Systems

1.           The Commission and the
participating countries shall ensure that the European Information Systems
referred to in point 1 of the Annex are developed, operated and appropriately
maintained.

2.           The Commission shall
coordinate, in cooperation with the participating countries, those aspects of
the establishment and functioning of the Union and non-Union components of the
systems and infrastructure referred to in points 1 and 2 of the Annex which are
necessary to ensure their operability, interconnectivity and continuous
improvement.

Article 10
Specific implementation provisions for common training

1.           Participating countries
shall, where appropriate, integrate jointly developed training content,
including e-learning modules, training programmes and commonly agreed training
standards in their national training programmes.

2.           Participating countries
shall ensure that their officials receive the initial and continuing training
necessary to acquire common professional skills and knowledge in accordance
with the training programmes.

3.           Participating countries
shall provide the linguistic training necessary for officials to ascertain a
sufficient level of linguistic competence for participation in the programme.

Chapter III
Financial Framework

Article 11
Financial framework

1.           The financial envelope for
the implementation of the programme shall be EUR 548.080.000 (in current
prices).

2.           The financial allocation
for the programme may also cover expenses pertaining to preparatory,
monitoring, control, audit and evaluation activities which are required for the
management of the programme and the achievement of its objectives; in
particular, studies, meetings of experts, information and communication
actions, including corporate communication of the political priorities of the
European Union as far as they are related to the objectives of this Regulation, expenses linked to IT networks
focusing on information processing and exchange, together with all other
technical and administrative assistance expenses incurred by the Commission for
the management of the programme.

Article 12
Types of intervention

1.           The Commission shall
implement the programme in accordance with the Financial Regulation.

2.           Union financial support
for activities provided for in Article 7 shall take the form of:

(1)
grants;

(2)
public procurement contracts;

(3)
reimbursement of costs incurred by external
experts referred to in Article 4

3.           The co-financing rate for grants
shall be up to 100 % of the eligible costs where the latter are travel and
accommodation costs, costs linked to organisation of events and daily
allowances. That rate shall apply to all eligible actions with the exception of
expert teams. For this category of eligible actions, the annual work programmes
will specify the applicable co-financing rate when these actions require the
awarding of grants.

Article 13
Protection of the financial interests of the Union

1.           The Commission shall take
appropriate measures ensuring that, when actions financed under this Regulation
are implemented, the financial interests of the Union are protected by the
application of preventive measures against fraud, corruption and any other
illegal activities, by effective checks and, if irregularities are detected, by
the recovery of the amounts wrongly paid and, where appropriate, by effective,
proportionate and dissuasive administrative and financial penalties.

2.           The Commission or its
representatives and the Court of Auditors shall have the power of audit, on the
basis of documents and on the spot, over all grant beneficiaries, contractors
and subcontractors who have received Union funds under this programme.

3.           The European Anti-fraud
Office (OLAF) may carry out investigations, including on-the-spot checks and
inspections, in accordance with the provisions and procedures laid down in
Regulation (EC) No 1073/1999 of the European Parliament and of the Council of
25 May 1999 and Council Regulation (Euraton, EC) No 2185/1996 of 11 November
1996 concerning on-the-spot checks and inspections carried out by the
Commission in order to protect the European Communities' financial interests
against fraud and other irregularities[28]
with a view to establishing whether there has been fraud, corruption or any
other illegal activity affecting the financial interests of the European Union
in connection with a grant agreement or grant decision or a contract concerning
Union funding.

Chapter IV
Implementing powers

Article 14
Work programme

1.           In order to implement the
programme the Commission shall adopt annual work programmes which shall set out
the objectives pursued, the expected results, the method of implementation and
their total amount. They shall also contain a description of the actions to be
financed, an indication of the amount allocated to each action type and an
indicative implementation timetable. The work programmes shall include for
grants the priorities, the essential evaluation criteria and the maximum rate
of co-financing. This implementing act shall be adopted in accordance with the
examination procedure referred to in Article 14(2).

2.           In preparing the annual
work programme, the Commission shall take into account the common approach
regarding the customs policy. That approach shall regulary be reviewed and
established in a partnership between the Commission and the Member States in
the Customs Policy Group, composed of the heads of customs administrations from
the Member States or their representatives and the Commission.

The Commission shall keep the Customs Policy
Group regularly informed of measures relating to the implementation of the
programme.

Article 15
Committee procedure

1.           The Commission shall be
assisted by a committee. That committee shall be a committee within the meaning
of Regulation (EU) No 182/2011.

2.           Where reference is made to
this paragraph, Article 5 of Regulation (EU) No 182/2011 shall apply.

Chapter V
Monitoring and Evaluation

Article 16
Monitoring of programme actions

The Commission shall, in cooperation with
the participating countries, monitor the programme and its actions in order to
follow the implementation of actions carried out.

Article 17
Evaluation

1.           The Commission shall
ensure a midterm and final evaluation of the programme, regarding the aspects
referred to in paragraph 2 and 3. The results shall be integrated into
decisions on possible renewal, modification or suspension of subsequent
programmes. An independent external evaluator shall carry out these
evaluations.

2.           The Commission shall establish
a mid-term evaluation report on the achievement of the objectives of the
programme actions, the efficiency of the use of resources and the European
added value of the programme no later than mid 2018. This report shall
additionally address the simplification, the continued relevance of the
objectives, as well as the contribution of the programme to the Union
priorities of smart, sustainable and inclusive growth.

3.           The Commission shall
establish a final evaluation report on the aspects referred to in paragraph 2
as well as on the long term impact and the sustainability of effects of the
programme no later than end 2021.

4.           The participating
countries shall provide, on request of the Commission, all data and information
relevant for the purpose of contributing to the mid term and final evaluation
reports of the Commission.

Chapter VI
Final Provisions

Article 18
Repeal

Decision No 624/2007/EC is repealed with
effect from 1 January 2014.

However, financial obligations related to
actions pursued under this Decision shall continue to be governed by this Decision
until their completion.

Article 19
Entry into force

This Regulation
shall enter into force on the twentieth day following that of its publication
in the Official Journal of the European Union.

It shall apply from 1 January 2014.

This Regulation shall be binding
in its entirety and directly applicable in all Member States.

Done at Brussels,

For the European Parliament                       For
the Council

The President                                                 The
President

ANNEX

European Information Systems and their
Union components

1.           The European Information
Systems are the following:

(1)
the common communications network/common systems
interface (CCN/CSI – CCN2), CCN mail3, the CSI bridge,
the http bridge, CCN LDAP and related tools, CCN web portal, CCN monitoring;

(2)
supporting systems, in particular the application
configuration tool for CCN,, the activity reporting tool (ART2), Taxud
electronic management of project online (TEMPO), service management tool (SMT),
the user management system (UM), the BPM system, the availability dashboard and
AvDB, IT service management portal, directory and user access management;

(3)
Programme' information and communication space
(PICS);

(4)
the customs movement systems, in particular the
(New) Computerised Transit System ((N)CTS), NCTS TIR for Russia, the Export Control System (ECS) and the Import Control system (ICS). The following
applications/components are supporting these systems: the system to exchange
data with third countries (SPEED bridge), the SPEED Edifact Converter Node (SPEED-ECN),
the Standard SPEED Test Application (SSTA), the Standard Transit Test
Application (STTA), the Transit Test Application (TTA), the Central
Services/Reference Data (CSRD2), the Central Services/Management Information
System (CS/MIS);

(5)
the Community Risk Management System (CRMS)
covering the Risk Information Forms (RIF) and the Common Profiles CPCA
functional domains;

(6)
the Economic Operators System (EOS) covering the
Economic Operator Registration and Identification (EORI), the Authorised
Economic Operators (AEO), the Regular Shipping Services (RSS) and the mutual
recognition with partner countries functional domains. The Generic Web Service
is a support component for this system;

(7)
the tariff system (TARIC3) which is a reference
data system for other applications such as the quota management system
(QUOTA2), the surveillance management and monitoring system (SURV2), the
European Binding Tariff Information system (EBTI3) the European Customs
Inventory of Chemical Substances (ECICS2). The Combined Nomenclature (CN) and
the suspensions (Suspensions) applications are managing legal information with
a direct link to the tariff system;

(8)
the applications for control purposes, in
particular the Specimen Management System (SMS) and the Information System for
Processing Procedures (ISPP);

(9)
the anti-COunterfeit and anti-PIracy System
(COPIS);

(10)
the Data Dissemination System (DDS2) managing all
information which is accessible to the public via Internet;

(11)
the Anti-Fraud Information System (AFIS);

2.           The Union components of the
European Information Systems are:

(1)
IT assets such as the hardware, the software and
the network connections of the systems including the associated data
infrastructure;

(2)
IT services necessary to support the development,
the maintenance, the improvement and the operation of the systems;

(3)
and any other elements which, for reasons of
efficiency, security and rationalisation, are identified by the Commission as
common to participating countries.

LEGISLATIVE FINANCIAL STATEMENT

1.           FRAMEWORK OF THE PROPOSAL/INITIATIVE

1.1.    Title of the proposal/initiative

1.2.    Policy
area(s) concerned in the ABM/ABB structure

1.3.    Nature
of the proposal/initiative

1.4.    Objective(s)

1.5.    Grounds
for the proposal/initiative

1.6.    Duration
and financial impact

1.7.    Management
method(s) envisaged

2.           MANAGEMENT MEASURES

2.1.    Monitoring
and reporting rules

2.2.    Management
and control system

2.3.    Measures
to prevent fraud and irregularities

3.           ESTIMATED FINANCIAL IMPACT OF THE
PROPOSAL/INITIATIVE

3.1.    Heading(s)
of the multiannual financial framework and expenditure budget line(s) affected

3.2.    Estimated
impact on expenditure

3.2.1. Summary of estimated impact on expenditure

3.2.2. Estimated
impact on operational appropriations

3.2.3. Estimated
impact on appropriations of an administrative nature

3.2.4. Compatibility
with the current multiannual financial framework

3.2.5. Third-party
participation in financing

3.3.    Estimated impact on revenue

LEGISLATIVE FINANCIAL STATEMENT FOR PROPOSALS

1.           FRAMEWORK OF THE PROPOSAL/INITIATIVE

1.1.        Title of the
proposal/initiative

Proposal for a Regulation
of the European Parliament and of the Council establishing an action programme
for customs in the European Union for the period 2014-2020 (Customs 2020) and
repealing Decision N°624/2007/EC.

1.2.        Policy area(s) concerned
in the ABM/ABB structure[29]

1404 Customs Policy

1.3.        Nature of the
proposal/initiative

 ̈ The
proposal/initiative relates to a new action

 ̈ The
proposal/initiative relates to a new action following a pilot
project/preparatory action[30]

X The
proposal/initiative relates to the extension of an existing action

 ̈ The
proposal/initiative relates to an action redirected towards a new action

1.4.        Objectives

1.4.1.     The Commission's
multiannual strategic objective(s) targeted by the proposal/initiative

The proposed
programme will contribute to the Europe 2020 Strategy for smart,
sustainable and inclusive growth[31]
by (1) strengthening the functioning of the Single Market, (2) providing a
framework to support activities enhancing productivity of the public sector and
(3) pushing technical progress and innovation in national and European customs administrations.

The customs union is
fundamental to the internal market. The borderless internal market for
goods requires goods originating from third countries to comply with
formalities and other requirements upon entry or when released into
circulation; after this, they can move around freely within the external
borders of the EU. Customs supports the development of fair, competitive internal
market conditions by uniform application of common rules and regulations. It supports
growth and innovation within the internal market for instance by enforcing
intellectual property rights (IPR) at the border (see also the European
anti-counterfeiting and anti-piracy plan[32]
and the new strategy for IPR in the Single Market as recently
adopted by the Commission). Responses to a recent public consultation[33] on the future of the internal market
suggest high expectations among industry federations regarding further EU
action against counterfeiting and piracy. Customs has a fundamental role in
effective enforcement of IPR, as confirmed by statistics on IPR customs
activities.[34]In
addition the programme will support a large variety of policy measures in the
framework of the customs union. For instance, the protection of the financial
interests of the EU and Member States through the collection of
duties and various fees and taxes on trade, and collaborative efforts to fight
fraud. In 2010, approximately 12.3 % (15.7 billion euro) of the EU budget
corresponded to traditional own resources.[35]
The customs union is the operational arm of EU Trade Policy,
implementing bilateral and multilateral trade agreements, collecting duties,
and applying trade measures (such as rules of origin), embargoes and other
restrictions. The discussion paper Trade, Growth and World Affairs: Trade
policy as a core component of the EU's 2020 Strategy[36] published in November 2010,
highlights the agenda for international customs cooperation in the framework of
bilateral agreements and in the World Customs Organization. It emphasises that
efficient customs procedures reduce compliance costs for traders, facilitate
legitimate trade, and help to address rising security, safety and IPR risks.

The role of the
customs union in contributing to internal security of the EU has become
increasingly prominent, and will continue to grow, as reflected in the action
plan for the Internal Security Strategy[37]
and in the Stockholm Programme Action Plan.[38] Furthermore, customs action
and cooperation between customs, police and other enforcement authorities
contribute to global security objectives such as the fight against money
laundering, organised cross-border crime, and terrorism.

1.4.2.     Specific objective(s) and
ABM/ABB activity(ies) concerned

Specific objectives and ABM/ABB activity(ies) concerned

The ABB activity concerned is Customs Policy (1404).The specific
objective of the programme will be the following:

to support the functioning of the customs union,
in particular through cooperation between participating countries, their
customs authorities, other competent authorities, their officials and external
experts.

1.4.3.     Expected result(s) and
impact

Specify the effects
which the proposal/initiative should have on the beneficiaries/groups targeted.

From customs point of view, Member States, by transferring their
powers to the EU – the customs union being an exclusive competence of the EU – ipso
facto agreed that actions in the customs area will be better applied at EU
level. However, the EU legal framework in itself does not ensure proper
functioning of the customs union. Flanking support measures as provided by the
Customs programme are required to ensure that EU customs
legislation is applied in a convergent and harmonised way, so that treatment of
traders, fraud prevention, and legal obligations do not vary.

Moreover, many of the activities in the
customs area are of a cross-border nature, involving and affecting all 27
Member States and therefore they cannot be effectively and efficiently
delivered by individual Member States. EU action is needed to underpin the
European dimension of customs work, to avoid internal market distortions and to
support the effective protection of the EU borders.

Solidarity and responsibility sharing are the principles underlying
funding for the customs union. Situations where the need for effective measures
exceeds the ability of particular Member States to supply them are detrimental
to the union as a whole. EU intervention is required to preserve the EU
public good where EU demand (e.g. for security) cannot be adequately
serviced by the supply of particular Member States. In such cases, EU action
translates into jointly funding technical capacity building to
meet the demand for effective control despite the limited supply capability of
specific Member States.

1.4.4.     Indicators of results and
impact

Specify the
indicators for monitoring implementation of the proposal/initiative.

Monitoring of the programme's activities will be carried out in
order to ensure that the rules and procedures for the implementation of the
programme have been applied properly and to verify if the programme is
successful in achieving its objectives. A monitoring framework will be put in place,
including: an intervention logic, a comprehensive set
of indicators, measurement methods, a data collection plan, a clear and
structured reporting and monitoring process and midterm and final evaluations.

The performance of the programme will be measured using a coherent
set of performance, impact, result and output indicators linked to the general
and specific objectives and prioritiesof the programme and building the link
with the Commission Management Plan. The detailed list of impact, result and
output indicators is available in the Impact Assessment. DG TAXUD has
identified targets for some outputs of the programme. For some others though
this is not yet feasible at this point in time. The targets of those outputs will
be identified before the start of the Customs 2020 programme by DG TAXUD and
presented to the Programme Committee for endorsement in the framework of the
Annual Work programme procedure.

The general andspecific objectives will be measured among
others as the availability of the Common Communication Network for the European
Information systems and will have as target a 97% availability.

1.5.        Grounds for the
proposal/initiative

1.5.1.     Requirement(s) to be met in
the short or long term

The proposal contributes to the Europe 2020 strategy and the
implementation of various other Union legislations as elaborated under chapter
1.4.1

1.5.2.     Added value of EU
involvement

It is more beneficial to initiate actions at the Union level than at
the level of 27 Member States as described in detail in chapter 3.2 of the
explanatory memorandum.

1.5.3.     Lessons learned from
similar experiences in the past

From an economic point of view, action at EU level is much more
efficient. The backbone of the customs cooperation is a highly secured
dedicated communication network which is operational since the first customs
cooperation programmes in the early 90's. It interconnects national customs
administrations in approximately 5.000[39]
connection points. This common IT network ensures that every national
administration only needs to connect once to this common infrastructure to be
able to exchange any kind of information. If such an infrastructure were not
available customs administrations in the Member States would have to link 26
times to the national systems of each of the other Member States.

Other cornerstones of the programme are activities that bring customs
officials together with the purpose of exchanging best practices, to learn from
each other, analyse a problem or draft a guide, for instance. If Member States
would have had to learn from each other by developing their own activities
outside the programme umbrella, they would all have developed their own set of
tools and ways of work. Synergies between activities would have been lost and
common activities would not have been implemented systematically at the level
of 27 Member States. It is much more efficient to have, with the support of the
programme, the Commission acting as activity broker between the
participating countries.

Another important value added is one of an intangible nature. The
programme has been instrumental in creating a sense of common interest,
stimulating mutual trust and generating a cooperation spirit between Member States and Member States and the Commission in the area of customs.

1.5.4.     Coherence and possible
synergy with other relevant instruments

The management of the Fiscalis 2020 and Customs 2020 programmes will
be aligned whenever possible. The programmes share a common network for the
implementation of European IT Systems, a common platform for online
collaboration (PICS) and a common tool for the Activity Reporting (ART2).
Methodologies applied for the Human Capacity Building are also shared between
the two programmes.

One of the policy scenarios worked out for the customs area foresees
to financially support Member States' customs authorities for acquiring
equipment and build up their technical capacity. Rather than working out a
financing scheme for this purpose under the Customs 2020 programme, Member
States may call on other programmes, including Regional Structural Funds for
supporting this need.

The Midterm evaluation of the DG HOME programmes on Prevention of
and Fight against Crime (ISEC) and Prevention, Preparedness and Consequence
Management of Terrorism & other Security Related Risks (CIPS)[40] considers the Customs and
Fiscalis 2013 programme management model "offers the most promising
prospects for improving the management of ISEC/CIPS as it allows to promptly
and flexibly respond to operational needs".

The backbone for trans-European IT systems is the CCN/CSI network,
also being used by OLAF for the exchange (and storage) of information on
irregularities and fraud. For this purpose both DGs benefit from economies of
scale.

1.6.        Duration and financial
impact

X Proposal/initiative of limited
duration

–
 ̈  Proposal/initiative in effect from 01/01/2014 to 31/12/2020

–
X  Financial
impact 2014 to 2023 (from 2021 to 2023 only for payment appropriations)

 ̈ Proposal/initiative of unlimited
duration

–
Implementation with a start-up period from YYYY
to YYYY,

–
followed by full-scale operation.

1.7.        Management mode(s)
envisaged[41]

X Centralised direct management by the
Commission

 ̈ Centralised indirect management with the delegation of implementation tasks to:

 ̈         executive agencies

 ̈         bodies set up by the Communities[42]

 ̈         national public-sector bodies/bodies with public-service
mission

 ̈         persons entrusted with the implementation of specific
actions pursuant to Title V of the Treaty on European Union and identified in
the relevant basic act within the meaning of Article 49 of the Financial
Regulation

 ̈ Shared management with the Member States

 ̈ Decentralised management with third countries

 ̈ Joint management with international organisations (to be specified)

If more than one
management mode is indicated, please provide details in the
"Comments" section.

Comments

/

2.           MANAGEMENT MEASURES

2.1.        Monitoring and reporting
rules

Specify frequency
and conditions.

Monitoring of the programme's activities
will be carried out in order to ensure that the rules and procedures for the
implementation of the programme have been applied properly (audit function. The
proposals for joint action activities are monitored on a permanent basis
through an online database, Activity Reporting Tool (ART2), which contains the
proposals and their corresponding activities. The same tool allows the
beneficiaries of the grants issued under the programme, namely the Member
States customs administrations, to report online the expenses financed from the
grant to participate in the joint action activities. Annually Member States
have to sent a financial report to the Commission which using the Activity
Reporting Tool.

For the IT and Training Capacity Building activities that are
financed through procurement, the standard reporting and monitoring rules
apply.

The programme will be evaluated twice. The results of the midterm evaluation
will be available by mid-2018 and those of the final evaluation of the
programme towards the end of 2021. Member States, as main beneficiaries of the
programme will do an important part of the data collection either by providing
information at the level of the individual tools (mainly through ART2) or on
the wider impact of the programme (either by participating in perception
measuring exercises or through the issuing of reports).

Up to now, evaluation exercises of the existing programmes, predominantly
addressed primary stakeholders of the programme, namely customs authorities and
their experts which are the target audience of the programme. Considering the
importance of consulting also stakeholders that are external to the programme
(i.e. economic operators) on the impacts the programme has on them and to what
extent they benefit for instance from better cooperation between customs
administrations, this dimension of indirect impacts will be included in future
programme evaluations.

2.2.        Management and control
system

2.2.1.     Risk(s) identified

The potential risks for the implementation of the grants are related
to:

–
Incorrect implementation of the grant agreement
signed with the consortium of the Member States and Candidate Countries. The
level of risk is considered low, since the beneficiaries are public
administrations of the participating countries

–
Member States declare expenses for an activity
that is not approved under the programme

–
Member States declare twice the same expenses

The potential risks for the implementation of the procurement
contracts concluded under the umbrella of the programme are related to :

–
Non-respect of procurement rules

–
Payment of an invoice for a non-existing
deliverable

2.2.2.     Control method(s) envisaged

The main elements of the control strategy applied are:

1. Financial controls common for all expenditure areas:

Ex-ante verification of commitments:

All commitments in DG TAXUD are verified by the head of the HR and
Finances Unit. Consequently, 100% of the committed amounts are covered by the
ex-ante verification. This procedure gives a high level of assurance as to the
legality and regularity of transactions.

Ex-ante verification of payments:

All payments are ex-ante verified according to financial regulations
and established procedures. This in-depth control is performed by a financial
verificator and an authorizing officer.

In addition at least one payment (from all categories of
expenditures) per week is randomly selected for ex-ante in-depth verification
performed by the head of the HR and Finances Unit. There is no target
concerning the coverage, as the purpose of this verification is to check
payments "randomly" in order to verify that all payments were
prepared in line with the requirements. The remaining payments are processed
according to the rules in force on a daily basis.

Declarations of the AOSD:

All the Authorising Officers by Sub-Delegations sign declarations supporting
the Annual Activity Report for the year concerned. These declarations cover the
operations under the programme. The AOSD declare that the operations connected
with the implementation of the budget have been executed in accordance with the
principles of the sound financial management, that the management and control
systems in place provided satisfactory assurance concerning the legality and
regularity of the transactions and that the risks associated to these
operations have been properly identified, reported and that mitigating actions
have been implemented.

2. Additional controls for procurement contracts:

The control procedures for procurement defined in the Financial
Regulation are applied. Any procurement contract is
established following the established procedure of verification by the services
of the Commission for payment, taking into account contractual obligations and
sound financial and general management. Anti-fraud measures (controls, reports,
etc.) are foreseen in all contracts concluded between the Commission and the
beneficiaries. Detailed terms of reference are drafted and form the basis of
each specific contract. The acceptance process follows strictly the TAXUD TEMPO
methodology: deliverables are reviewed, amended if necessary and finally
explicitly accepted (or rejected). No invoice can be paid without an
"acceptance letter".

The procedure of ordering and accepting deliverables covers also
assets management. Each asset is ordered and consequently accepted and encoded into corporate IT tool of the European Commission (ABAC
assets) in its acquisition value. The depreciation is automatic based on
accounting rules of the Commission.

Technical verification for procurement

DG TAXUD performs controls of deliverables and supervises operations
and services carried out by contractors. It also conducts quality and security
audits of their contractors on a regular basis. Quality audits verify the
compliance of the contractors' actual processes against the rules and
procedures defined in their quality plans. Security audits focus on the
specific processes, procedures and set-up.

Ex-post administrative control on both operational and financial
side

At the end of each contract, the whole file is verified by both
operational and financial units before it is formally closed.

3. Additional controls for grants

The grant agreement signed by the beneficiaries of the programme (customs
administrations in Member States and Candidate Countries) defines conditions
applying to the financing of activities resorting under the grant, including a
chapter on control methods. All participating administrations engaged
themselves to respect Commission's financial and administrative rules on
expenses.

The activities for which grant beneficiaries can finance participation
from the grants are identified in an online database (ART2 – Activity Reporting
Tool). The Member States report their spending in the same database which has a
number of built in controls to reduce errors. For instance, Member States can
only report expenses for activities to which they were invited and can only do
so once.

In addition to the controls that are built-in in the reporting
system, DG TAXUD performs paper controls and on the spot checks on a sample
basis. These controls are performed ex-post and based on risk-based sampling.

This control strategy allows keeping the administrative burden on
the grant beneficiaries as limited as possible and proportionate to the budget
allocated and risks perceived.

The effect of simplification measures, such as replacing real costs
by lump sums, is likely to be marginal in terms of budgetary gains. Its main
benefit will be at the level of efficiency gains and reduced administraive
burden both in Member States and at the Commission.

4. Cost and benefits of the controls

The controls established enable DG TAXUD to have sufficient
assurance of the quality and regularity of the expenditure and reduce the risk
of non-compliance. The depth of the assessment reaches level three[43] for Joint Actions and level
four[44]
for the procurement contracts. The benefit of the above control strategy
measures is the reduction of the potential risks below 2% of the overall budget
and it reaches all beneficiaries Any additional measures for further risk
reduction would result in disproportionate high costs and are therefore not
envisaged. DG TAXUD considers there are no variations between the present and
current programme from control point of view and will apply the same control
strategy for the 2020 programme. The costs entailed to implement the above
control strategy are limited to 2,60 %[45]
of the budget and is expected to remain at the same ratio.

The programme control strategy is deemed efficient to limit the risk
of non-compliance to below 2% and proportionate with the risks entailed.

2.3.        Measures to prevent fraud
and irregularities

Specify existing or
envisaged prevention and protection measures.

In addition to the application of all regulatory control mechanisms,
the DG will devise an anti-fraud strategy in line with the Commission's new
anti-fraud strategy (CAFS) adopted on 24 June 2011 in order to ensure inter
alia that its internal anti-fraud related controls are fully aligned with
the CAFS and that its fraud risk management approach is geared to identify
fraud risk areas and adequate responses. Where necessary, networking groups and
adequate IT tools dedicated to analysing fraud cases related to the Customs
2020 programme will be set up.

3.           ESTIMATED FINANCIAL IMPACT OF THE
PROPOSAL/INITIATIVE

3.1.        Heading(s) of the
multiannual financial framework and expenditure budget line(s) affected

· Existing expenditure budget lines

In order of
multiannual financial framework headings and budget lines.

Heading of multiannual financial framework || Budget line || Type of expenditure || Contribution

Number [Description........................................] || Diff./non-diff. ([46]) || from EFTA[47] countries || from candidate countries[48] || from third countries || within the meaning of Article 18(1)(aa) of the Financial Regulation

|| || || || || ||

· New budget lines requested

In order of multiannual financial framework
headings and budget lines.

Heading of multiannual financial framework || Budget line || Type of expenditure || Contribution

Number [Heading............................................] || Diff./non-diff. || from EFTA countries || from candidate countries || from third countries || within the meaning of Article 18(1)(aa) of the Financial Regulation

1 || 14.04.03 – Customs 2020 || Diff. || NO || YES || NO || NO

|| || || || || ||

1 || 14.01.04.05 Customs 2020 – Expenditure on administrative management || Non-diff || NO || NO || NO || NO

3.2.        Estimated impact on
expenditure[49]

3.2.1.     Summary of estimated impact
on expenditure

EUR million (to 3 decimal places)

Heading of multiannual financial framework: || 1 || Smart and Inclusive Growth

DG: TAXUD || || || Year 2014 || Year 2015 || Year 2016 || Year 2017 || Year 2018 || Year 2019 || Year 2020 || Year 2021-2023 || TOTAL

Ÿ Operational appropriations || ||

14.0403 – Customs 2020 || Commitments || (1) || 71.740 || 73.860 || 75.970 || 78.080 || 80.300 || 82.610 || 84.820 || || 547.380

Payments || (2) || 14.348 || 47.055 || 62.779 || 68.162 || 70.083 || 72.072 || 74.103 || 138.778 || 547.380

Appropriations of an administrative nature financed  from the envelope for specific programmes[50] || ||

14.010405 || || (3) || 0.100 || 0.100 || 0.100 || 0.100 || 0.100 || 0.100 || 0.100 || || 0.700

TOTAL appropriations for DG TAXUD || Commitments || =1+1(a)+3 || 71.840 || 73.960 || 76.070 || 78.180 || 80.400 || 82.710 || 84.920 || || 548.080

Payments || =2+2(a)+3 || 14.448 || 47.155 || 62.879 || 68.262 || 70.183 || 72.172 || 74.203 || 138.778 || 548.080

Ÿ TOTAL operational appropriations || Commitments || (4) || 71.740 || 73.860 || 75.970 || 78.080 || 80.300 || 82.610 || 84.820 || || 547.380

Payments || (5) || 14.348 || 47.055 || 62.779 || 68.162 || 70.083 || 72.072 || 74.103 || 138.778 || 547.380

Ÿ TOTAL appropriations of an administrative nature financed from the envelope for specific programmes || (6) || 0.100 || 0.100 || 0.100 || 0.100 || 0.100 || 0.100 || 0.100 || || 0.700

TOTAL appropriations under HEADING 1 of the multiannual financial framework || Commitments || =4+ 6 || 71.840 || 73.960 || 76.070 || 78.180 || 80.400 || 82.710 || 84.920 || || 548.080

Payments || =5+ 6 || 14.448 || 47.155 || 62.879 || 68.262 || 70.183 || 72.172 || 74.203 || 138.778 || 548.080

Heading of multiannual financial framework: || 5 || " Administrative expenditure "

EUR million (to 3 decimal places)

|| || || Year 2014 || Year 2015 || Year 2016 || Year 2017 || Year 2018 || Year 2019 || Year 2020 || TOTAL

DG: TAXUD ||

Ÿ Human resources || 10.096 || 10.096 || 10.096 || 10.096 || 10.096 || 10.096 || 10.096 || 70.672

Ÿ Other administrative expenditure || 0.390 || 0.390 || 0.390 || 0.390 || 0.390 || 0.390 || 0.390 || 2.730

TOTAL DG TAXUD || || 10.486 || 10.486 || 10.486 || 10.486 || 10.486 || 10.486 || 10.486 || 73.402

TOTAL appropriations under HEADING 5 of the multiannual financial framework || || 10.486 || 10.486 || 10.486 || 10.486 || 10.486 || 10.486 || 10.486 || 73.402

|| || || Year 2014 || Year 2015 || Year 2016 || Year 2017 || Year 2018 || Year 2019 || Year 2020 || Year 2021-2023 || TOTAL

TOTAL appropriations under HEADINGS 1 to 5 of the multiannual financial framework || Commitments || 82.326 || 84.446 || 86.556 || 88.666 || 90.886 || 93.196 || 95.406 || || 621.482

Payments || 24.934 || 57.641 || 73.365 || 78.748 || 80.669 || 82.658 || 84.689 || 138.778 || 621.482

Estimated
impact on operational appropriations

–
The proposal requires the use of operational
appropriations, as explained below:

Commitment appropriations in EUR million (to 3 decimal
places)

Indicate objectives and outputs ò || || || 2014 || 2015 || 2016 || 2017 ||  2018 || 2019 || 2020 || TOTAL

OUTPUTS ||

Type of output[51] || Average cost of the output || Number of outputs || Cost || Number of outputs || Cost || Number of outputs || Cost || Number of outputs || Cost || Number of outputs || Cost || Number of outputs || Cost || Number of outputs || Cost || Total number of outputs || Total cost ||

Specific Objective: To support the fucntioning of the customs union, in particular through cooperation between participating countries, their customs administrations, their officials and external experts

|| || || || || || || || || || || || || || || ||

IT Capacity Building || Number of IT Contracts || || Around 30 ||  57.360 || || 59.470 || || 61.580 || || 63.700 || || 65.910 || || 68.220 || || 70.440 || ||  446.680

Joint Actions || Number of events organised || || Around 450 ||  11.570 || || 11.570 || || 11.570 || || 11.570 || || 11.570 || || 11.570 || || 11.570 || ||  80.990

Human Capacity Building || Number of trainings || || Tbc || 2.810 || ||  2.820 || ||  2.820 || ||  2.810 || ||  2.820 || ||  2.820 || ||  2.810 || ||  19.710

|| || || || || || || || || || || || || || || ||

TOTAL COST || || || ||  71.740 104.400 || || 73.860 || || 75.970 || || 78.080 || || 80.300 || || 82.610 || || 84.820 || || 547.380

3.2.2.     Estimated impact on
appropriations of an administrative nature

3.2.2.1.  Summary

–
The proposal requires the use of administrative
appropriations, as explained below:

EUR million (to 3
decimal places)

|| Year 2014 || Year 2015 || Year 2016 || Year 2017 || Year 2018 || Year 2019 || Year 2020 || TOTAL

HEADING 5 of the multiannual financial framework || || || || || || || ||

Human resources || 10.096 || 10.096 || 10.096 || 10.096 || 10.096 || 10.096 || 10.096 || 70.672

Other administrative expenditure || 0.390 || 0.390 || 0.390 || 0.390 || 0.390 || 0.390 || 0.390 || 2.730

Subtotal HEADING 5 of the multiannual financial framework || 10.486 || 10.486 || 10.486 || 10.486 || 10.486 || 10.486 || 10.486 || 73.402

Outside HEADING 5[52] of the multiannual financial framework || || || || || || || ||

Human resources || p.m. || p.m. || p.m. || p.m. || p.m. || p.m. || p.m. || p.m.

Other expenditure of an administrative nature || p.m. || p.m. || p.m. || p.m. || p.m. || p.m. || p.m. || p.m.

Subtotal outside HEADING 5 of the multiannual financial framework || p.m. || p.m. || p.m. || p.m. || p.m. || p.m. || p.m. || p.m.

TOTAL || 10.486 || 10.486 || 10.486 || 10.486 || 10.486 || 10.486 || 10.486 || 73.402

3.2.2.2.  Estimated requirements of
human resources

–
The proposal requires the use of human
resources, as explained below:

Estimate to be expressed in full amounts
(or at most to one decimal place)

|| Year 2014 || Year 2015 || Year 2016 || Year 2017 || Year 2018 || Year 2019 || Year 2020

Ÿ Establishment plan posts (officials and temporary agents)

14 01 01 01 (Headquarters and Commission’s Representation Offices) || 65 || 65 || 65 || 65 || 65 || 65 || 65

14 01 01 02 (Delegations) || p.m. || p.m. || p.m. || p.m. || p.m. || p.m. || p.m.

14 01 05 01 (Indirect research) || p.m. || p.m. || p.m. || p.m. || p.m. || p.m. || p.m.

10 01 05 01 (Direct research) || p.m. || p.m. || p.m. || p.m. || p.m. || p.m. || p.m.

Ÿ External personnel (in Full Time Equivalent unit: FTE)[53]

14 01 02 01 (CA, INT, TA, SNE from the "global envelope") || 17 || 17 || 17 || 17 || 17 || 17 || 17

14 01 02 02 (CA, INT, JED, LA and SNE in the delegations) || p.m. || p.m. || p.m. || p.m. || p.m. || p.m. || p.m.

14 01 04 05 [54] || - at Headquarters[55] || p.m. || p.m. || p.m. || p.m. || p.m. || p.m. || p.m.

- in delegations || p.m. || p.m. || p.m. || p.m. || p.m. || p.m. || p.m.

14 01 05 02 (CA, INT, SNE - Indirect research) || p.m. || p.m. || p.m. || p.m. || p.m. || p.m. || p.m.

10 01 05 02 (CA, INT, SNE - Direct research) || p.m. || p.m. || p.m. || p.m. || p.m. || p.m. || p.m.

Other budget lines (specify) || p.m. || p.m. || p.m. || p.m. || p.m. || p.m. || p.m.

TOTAL || 82 || 82 || 82 || 82 || 82 || 82 || 82

14 is the policy area or budget title
concerned.

The human resources required
will be met by staff from the DG who are already assigned to management of the action
and/or have been redeployed within the DG, together if necessary with any
additional allocation which may be granted to the managing DG under the annual
allocation procedure and in the light of budgetary constraints.

Description of
tasks to be carried out:

Officials and temporary agents || Programme management activities, stricto senso[56], and programme implementation activities such as studies, development, maintenance and operation of European IT systems

External personnel || Assistance to programme implementation activities such as studies, development, maintenance and operation of European IT systems

3.2.3.     Compatibility with the
current multiannual financial framework

–
The proposal is compatible with the 2020 multiannual
financial framework.

3.2.4.     Third-party contributions

–
The proposal does not provide for co-financing
by third parties

3.2.5.     Estimated impact on revenue

–
The proposal has potentially financial impact on
revenue:

·
The impact of the programme may indirectly
affect the revenue of the EU as improved and more efficient customs are
expected to lead, amongst others, to more customs duties being collected. Such
effect is however not quantifiable.

·
In case the penalties (mentioned in article 13)
are applied, these will be budgeted as general revenue for the EU budget

[1]               COM(2011)500 Final of 29 June 2011, A budget for
Europe 2020.

[2]               COM(2010) 2020 final of 3 March 2010: A strategy
for smart, sustainable and inclusive growth.

[3]               In 2010, approximately 12.3 % (15.7 billion
euro) of the EU budget was derived from traditional own resources. Directorate
General for Budget, Thematic Report on the customs control strategy in the
Member States — Control of traditional own resources, p3.

[4]              
Customs 2013 midterm evaluation: http://ec.europa.eu/taxation_customs/resources/documents/common/publications/studies/customs2013_mid_term_report_en.pdf

[5]               DELOITTE,
The future business architecture for the Customs Union and Cooperative Model in
the Taxation Area in Europe.

[6]               Minutes
of the 9th Customs Committee meeting on 11 April 2011.

[7]               Proposal for a regulation laying down the Union
Customs Code, COM(2012)64 of 20 February 2012.

[8]               Customs and taxation connection points taken together

[9]               COM(2012) 388 final

[10]             Previously called Trans European IT Systems

[11]             OJ L 55, 28.2.2011, p 13.

[12]             COM(2011), 398 Final of 29 June 2011.

[13]             COM(2011), 706 Final of 9 November 2011.

[14]             COM(2010) 245 Final/2, A Digital Agenda for Europe.

[15]             COM(2010) 682 of 23 November 2010, An Agenda for new
skills and jobs.

[16]             COM(2011) 0206 final.

[17]             COM (2011) 287, A Single Market for Intellectual
Property Rights – Boosting creativity and innovation to provide economic
growth, high quality jobs and first class products and services in Europe

[18]             This programme will be complementary to the Hercule III
programme (2014-2020) Commission(2011)914 final, a programme specifically
dedicated to fighting fraud, corruption and other illegal activities affecting
the financial interests of the Union.

[19]             COM (2010)612. Trade, Growth and World Affairs: Trade
policy as a core component of the EU's 2020 Strategy

[20]             COM(2010) 673 final, Brussels, 22.11.2010,
Communication from the Commission to the European Parliament and the Council — the EU Internal Security Strategy in Action: Five steps towards a
more secure Europe.

[21]             COM(2010) 171 final, Brussels, 20.4.2010, Communication From the Commission to the European Parliament, the
Council, the European Economic and Social Committee and the Committee of the
Regions: Delivering an area of freedom, security and justice for Europe's
citizens — Action Plan Implementing the Stockholm Programme.

[22]             COM(2010) 2020.

[23]             COM(2004)373

[24]             To be completed

[25]             COM(2010)700

[26]             OJ 28.2.2011
L 55-13

[27]             OJ L 154, 14.6.2007, p. 25

[28]             OJ L 292, 15.11.1996, p. 2.

[29]             ABM: Activity-Based Management – ABB: Activity-Based
Budgeting.

[30]             As referred to in Article 49(6)(a) or (b) of the
Financial Regulation.

[31]             COM(2010) 2020 final of 3 March 2010: A strategy
for smart, sustainable and inclusive growth.

[32]             Adopted by Council in 2008 (2008/C 253/01).

[33]             SEC(2011) 467 final, 13.4.2011. Overview of responses
to the public consultation on the Communication "Towards a Single Market
Act".

[34]             http://ec.europa.eu/taxation_customs/resources/documents/customs/customs_controls/counterfeit_piracy/
statistics/statistics_2010.pdf.

[35]             Directorate General for Budget, Thematic Report on the
customs control strategy in the Member States — Control of traditional own
resources, p3.

[36]             COM (2010)612, Trade, Growth and World Affairs, page 12.

[37]             COM(2010) 673 final, Brussels, 22.11.2010,
Communication from the Commission to the European Parliament and the Council — the EU Internal Security Strategy in Action: Five steps towards a
more secure Europe.

[38]             COM(2010) 171 final, Brussels, 20.4.2010, Communication From the Commission to the European Parliament, the
Council, the European Economic and Social Committee and the Committee of the
Regions: Delivering an area of freedom, security and justice for Europe's
citizens — Action Plan Implementing the Stockholm Programme.

[39]             Customs and Taxation connection points taken together.

[40]             COM(2005) 124 of 6 April 2005 has a budget of 745
million euro in the 2007-2013 financial framework.

[41]             Details of management modes and references to the
Financial Regulation may be found on the BudgWeb site: http://www.cc.cec/budg/man/budgmanag/budgmanag_en.html

[42]             As referred to in Article 185 of the Financial
Regulation.

[43]             Depth of controls – level three: control with reference
to fully independent corroborative information

[44]             Depth of controls – level four: control with reference
to and including access to the underlying documentation that is available at
the stage of the process in question.

[45]             The cost comprises the number of FTE performing the
controls multiplied by average staff cost; expenditure linked to external
audits, expenditure linked to maintenance of ART system.

[46]             Diff. = Differentiated appropriations / Non-diff. =
Non-Differentiated Appropriations

[47]             EFTA: European Free Trade Association.

[48]             Candidate countries and, where applicable, potential
candidate countries from the Western Balkans.

[49]             Expenditure is expressed in current prices.

[50]             Technical and/or administrative assistance and
expenditure in support of the implementation of EU programmes and/or actions
(former "BA" lines), indirect research, direct research.

[51]             Outputs are products and services to be supplied (e.g.:
number of student exchanges financed, number of km of roads built, etc.).

[52]             Technical and/or administrative assistance and
expenditure in support of the implementation of EU programmes and/or actions
(former "BA" lines), indirect research, direct research.

[53]             CA= Contract Agent; INT= agency staff ("Intérimaire");
JED= "Jeune Expert en Délégation" (Young Experts in
Delegations); LA= Local Agent; SNE= Seconded National Expert;

[54]             Under
the ceiling for external personnel from operational
appropriations (former "BA" lines).

[55]             Essentially for Structural Funds, European Agricultural
Fund for Rural Development (EAFRD) and European Fisheries Fund (EFF).

[56]             The number of posts involved in programme management
activities strictu senso is limited to 18.