# EUR-Lex - 52012DC0793 - EN

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# 52012DC0793

**COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT, THE COUNCIL AND THE EUROPEAN ECONOMIC AND SOCIAL COMMITTEE on Customs Risk Management and Security of the Supply Chain /* COM/2012/0793 final */**

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TABLE OF CONTENTS

1........... Introduction............................................................................................................. 3

2........... EU customs risk management and the
security of the supply chain................ 3

2.1........ Customs' security role..................................................................................................... 3

2.2........ The EU customs risk framework..................................................................................... 4

2.3........ The risk management process......................................................................................... 4

2.4........ Gaps in the current approach.......................................................................................... 5

2.4.1..... Data quality and the role of
the economic operators................................................... 5

2.4.2..... Secure supply chains and
economic operators............................................................. 5

2.4.3..... Operational methodologies........................................................................................... 6

3........... Risk management of the supply chain —
the broad view................................... 7

3.1........ Scale of the challenge: trade growth and complexity of the supply
chain............................ 7

3.2........ Range of risks and customs interconnection with other authorities..................................... 8

3.3........ The challenge for customs risk management: a multi-layered approach.............................. 8

4........... EU customs risk management: the way
forward.............................................. 10

4.1........ Ensuring quality, availability and fusion of trade data....................................................... 10

4.1.1..... Quality of data (‘who is moving
what to whom’)....................................................... 10

4.1.2..... Data availability to all
customs authorities concerned.............................................. 10

4.2........ Engaging with economic operators................................................................................ 11

4.2.1..... The EU Authorised Economic
Operator (AEO) programme..................................... 11

4.2.2..... Cooperation with legitimate
business to target illicit traffic...................................... 11

4.3........ Addressing risk management capacity differentials......................................................... 11

4.3.1..... Member States level.................................................................................................... 11

4.3.2..... EU level...................................................................................................................... 11

4.4........ Coordinating with other authorities and agencies............................................................ 12

4.5........ Cooperating internationally............................................................................................ 12

5........... Conclusion............................................................................................................... 13

COMMUNICATION FROM THE COMMISSION TO
THE EUROPEAN PARLIAMENT, THE COUNCIL AND THE EUROPEAN ECONOMIC AND SOCIAL
COMMITTEE

on Customs Risk Management and Security of
the Supply Chain

1.           Introduction

The EU relies heavily on international
trade for its economic development and is exposed to security and safety
threats that come with this trade. Illicit international trade also undermines economic
and social welfare in the EU. Effective risk management of the movement of
goods through the international supply chain is critical for security and
safety and essential to facilitating legitimate trade and protecting the
financial and economic interest of the EU and its Member States.

Since ‘9/11’ and other terrorist attacks in
Europe and elsewhere, security has become a top priority for European customs.
The security of the EU, of the Member States and of citizens depends on each
and every single point of entry of goods into the EU. If customs failed to act
to tackle risks consistently along the EU’s external borders, the customs union
and the EU single market would become unsustainable.

Customs policy is an EU competence: the
Member States follow a common approach. The EU has the responsibility of
supervising the Union’s international trade and upholding minimum standards of
customs risk management and controls. Like many other jurisdictions and in line
with international standards, the EU has a common policy framework intended to
address risks and accelerate legitimate trade. In addition to adopting the
relevant legislation, the customs administrations throughout the EU have taken
action to overhaul control procedures, techniques and resources.

The October 2010 (Yemen) incident
demonstrated weaknesses in the security standards and procedures applying to
air cargo in the EU and worldwide. The debate ensued underlined the need to
review security procedures and requirements more broadly for all transport
modes. There are critical challenges to be tackled and these cannot be fully resolved
at Member State level but require EU action to complement and reinforce the
efforts made at national level.

The purpose of this Communication is to:

- review the implementation of customs risk
management policy;

- put forward a strategic approach for the years
ahead;

- make recommendations for action with a
focus on efficient deployment of resources.

2.           EU customs risk management and the security of the supply chain

2.1.        Customs’ security role

The role of customs in the supply chain has
been constantly evolving. From revenue collector to guardian of the internal
market and of other policy areas such as public health, consumer protection,
environment, agriculture, it has naturally expanded, following the terrorist
attacks on 11 September 2001, to become a major player in the field of
supply chain security.

This role is recognised in the mission
statement of EU customs authorities[1]:

‘Customs authorities shall be primarily
responsible for the supervision of the Community’s international trade, thereby
contributing to fair and open trade, to the implementation of the external
aspects of the internal market, of the common trade policy and of the other
common Community policies having a bearing on trade, and to overall supply
chain security.’[2]

The increasing security role of EU customs in
the last decade is in line with worldwide developments and international
standards, notably the World Customs Organisation’s (WCO) ‘SAFE’ framework of
standards.

2.2.        The EU customs risk framework

The 2005 amendment to the EU Customs Code[3] provided the legal basis for the development of a common framework
for risk management of the supply chain. This amendment and subsequent
implementing provisions introduced far-reaching changes affecting both customs
and the trade community.

This common
framework comprises: identification and control of high-risk goods movements
using common risk criteria; the contribution of Authorised Economic Operators
(AEO) in a customs-trade partnership to securing and facilitating legitimate
trade; and pre-arrival/pre-departure security risk analysis based on cargo
information submitted electronically by traders prior to arrival or departure
of goods in/from the EU.

Operationally, the framework is underpinned
by the electronic EU Customs Risk Management System (CRMS). This is the channel
for wide-ranging communication between Member States and systematic risk
information exchange. It is available to Member State risk analysis centres, to
all external border control points in the EU and to the Commission.

Because of its scope and impact, this legal
amendment required development over a number of years with full implementation
of all measures scheduled in 2011.

2.3.        The risk management process

The risk posed by cargo entering and
leaving the EU is analysed on the basis of cargo information submitted
electronically in a single declaration[4] by
operators prior to departure or arrival. For exports (Export Control System)
this is carried out by customs at the office of export. For imports (Import
Control System) risk analysis is performed by customs at the first point of
entry on all goods entering the EU regardless of destination.

Risks are assessed by means of electronic
application of common risk criteria and standards for security and safety risk
analysis. The electronic output is then assessed by customs risk analysts using
multiple sources of information, including information from other Member
States. Customs authorities at the first point of entry decide, based on the
seriousness of the risk posed, whether checks are needed and, if so, whether at
the border or at the place of unloading. If the risk analysis is positive (checks
are requested), the results are sent to customs authorities in Member States of
unloading.

2.4.        Gaps in the current approach

Following a preliminary assessment of initial
implementation of the new legislation made with the Member States’ customs authorities,
the Commission commissioned a more in-depth study of EU risk analysis and
targeting capabilities[5]. The study concluded that several issues require urgent action, including
data quality, supply chain modelling and certain aspects of the methodology applied.

2.4.1.     Data
quality and the role of the economic operators

The main goal of risk management is to
ensure the correct implementation of all legislation and avoid unwarranted
controls while focusing on areas that pose the most serious risks. Economic operators
are crucial to risk management because of the information available to them and
the measures they take to secure their supply chain.

To make full use of risk assessment
methods, one needs to know ‘who is moving what, to whom, from where’. Data on the
real parties behind the transaction and the movement of goods (buyer and seller
or owner), and on the precise goods involved, is essential
as is information on the routing of the goods throughout the supply chain

The foundation for this approach is the advance
cargo information submitted electronically by economic operators in relation to
goods movements entering and exiting the European Union. It is critically
important that this data be available as early as possible, be relevant and be of
high quality. Conversely, significant weaknesses in the standard or relevance
of the data will undermine later, electronically based risk identification and
evaluation.

Relevant, high-quality data is fundamental to
electronic data-based risk management, but the study suggests that current
input does not meet minimum requirements. Moreover, there is a systemic gap in
the provision of information on the parties behind the transaction and some
other data elements provided are of low quality. In many cases the information
available in the entry summary declaration (ENS) is not precise enough to
conduct effective risk analysis. Furthermore, valuable data available to
operators should be more fully exploited by the authorities for risk analysis
purposes.

2.4.2.     Secure
supply chains and economic operators

Securing and
safeguarding the integrity of the supply chain is a shared interest among
citizens, business and government. It requires high levels of partnership
between customs and the trading community.

Identifying
legitimate and low-risk trade makes it easier for customs authorities to focus
on higher risks and to accelerate the movement of legitimate trade through the
supply chain.

A robust
Authorised Economic Operator (AEO) programme is now firmly established in the
EU (with more than 11 000 certificates in use in July 2012) and formally
recognised by some major trading partners. The programme is closely monitored
at EU level.

Authorised
Economic Operators take significant measures to secure their supply chain and
are formally validated by customs authorities. These measures relate to
investment in physical security and internal control systems, financial
solvency, risk assessment of the business and the reliability of business
partners. In the EU, these measures should be recognised by non-customs
authorities and regulators concerned with supply chain risk evaluation
and mitigation.

Currently,
however, similar initiatives in other public policy areas are not linked to the
AEO programme. This may lead to situations where an operator is assessed twice
for the same criteria by two different public administrations.

There is a
need for a more concerted effort to broaden formal recognition of the AEO
programme across policy areas for risk management purposes and to ensure that
the benefits accruing to compliant businesses are maximised. Aligning the
customs authorised economic operator programme with the secure trader programme
in aviation security is one example.

2.4.3.     Operational
methodologies

Putting the EU common risk management
framework into operation poses significant challenges. Significant variance in
the levels of risk analysis performed by Member States and associated
countermeasures has real and undesirable consequences.

Implementation is uneven and not as
effective as expected for several reasons:

·
Variance in capacity

A common minimum standard of automated risk
analysis for security and safety has not yet been achieved due to variance in
the development, capacity and technical capability of national electronic risk
analysis systems.

This means that the common risk criteria
are not fully implemented in all Member States and cannot be properly monitored
and evaluated for effectiveness at EU level. The absence of 24 hour/7 days a
week (24/7) capacity and support in some Member States also inhibits the
achievement of common EU standards.

This limits EU capacity to adapt and
respond to common risks and hinders innovation in risk management.

·
Differential burden

Differences in the volume of trade to be
risk-assessed means the burden of the work also varies between Member States.
This is mainly due to geographical location and to the nature of supply chain
logistics. In addition, threats may vary according to time and place.

Analysis of the Import Control System data
and risk assessment resources available in Member States indicates wide
variations in the workload of customs risk analysis and targeting officers. In
some instances this ranges from 9 times the EU average for air cargo to over 50
times greater than the EU average for maritime traffic.

·
Operational coordination and exchange of
information

As the advanced cargo information is sent
to the first point of entry in the EU, the challenge in risk assessing ‘who is
moving what, to whom, from where’ is further complicated because the proportion
of trade entering the EU that is bound for a Member State other than that of
first entry or is transiting the EU is significant[6]. Traffic arriving at first
points of entry frequently includes cargo bound for other Member States as well
as cargo transiting the EU en route to a final destination in third countries.

This means that the knowledge and
information available at national and local level in the Member State of
destination is critical for effective risk analysis and risk mitigation at points
of first entry. In addition, information on parties and their characteristics,
including vulnerabilities relating to parts of the supply chain outside the EU,
is clearly of common relevance and significance for risk analysis all along the
external border.

Systematic, real-time sharing or pooling of
information, knowledge and expertise is essential to ensure that common
equivalent minimum standards apply and that important information affecting supply
chain risk is available to those who need it. Conversely, any significant
weaknesses in information-sharing undermine the effectiveness of risk
management at different entry points and for the EU as a whole.

The available data on information-sharing
over a 12-month period suggests that not enough risk-related information is made
available under current operational methodologies and structures[7]. Since the exchange of
information between customs at first point of entry and other relevant Member
States is not working properly, information relevant to risk assessment at EU
level is being overlooked.

In the aftermath of the Yemen incident, the
High Level Working Group Report on strengthening air cargo security also
addressed EU coordination and exchange of information:

‘An adequate response to the terrorist
threats must involve streamlined coordination and cooperation at EU level
between the transport and the Justice and Home Affairs sector and different
government agencies as well as a rapid exchange of information between the
authorities of the EU Member States. This principle goes beyond the specific
threat giving rise to this Report, and is part of the broader reflection on how
the EU should be able to respond to incidents which could also occur in other
areas.’

However, exchanges of information between
customs and other authorities vary significantly at national level and are
sometimes lacking at EU level (e.g. during the Fukushima crisis). The current
situation is unsatisfactory and requires remedial action[8].

3.           Risk management of the supply chain — the broad view

Risk management is a continuous process that
involves identifying threats and risk, evaluating and analysing them and devising
appropriate counter-measures. It is time-constrained and characterised
by the need for knowledge of logistics and supply chains and the management and
integration of multiple information and intelligence flows. It requires
assessment of the quality and reliability of information, including an
appreciation of the risk that data may be compromised by misinformation,
manipulation or falsification. Its effectiveness lies in its flexibility,
adaptability and responsiveness to the potential occurrence not only of
events with knowable consequences but of those with less calculable effects.
Dealing with the consequences and aftermath of risks that materialise is also
of vital importance.

3.1.        The scale of the challenge: trade growth and the complexity of the
supply chain

The scale of the challenge can be gauged by
considering the volume and rate of trade movements and the profile of modern-day
logistics. This needs to be balanced with the constraints on the control
environment both in terms of resource capability and the need to avoid
unwarranted disruption of the legitimate supply chain.

Between 2004 and 2010, despite the impact
of the financial crisis, the value of EU external trade grew by almost 50 %[9]. The EU is at the centre of
global trade and supply chain logistics. It is the number one trading partner
for the United States, China and Russia. More than 90 % of global trade
(8.4 billion tons of merchandise) is carried annually by sea along more than 25 800
global trade lanes. More than 20 % of this seaborne trade is unloaded in
Europe. There are 25 400 transport nodes world-wide for cargo and
passengers moved by air, a substantial proportion of which are linked to more
than 250 international airports in the EU. The numerous parties involved in the
management of these trade lanes add to the complexity of supply chain
logistics. The eastern land border runs to 9 890 km, with 133 commercial
road and rail entry points. Along the entire EU external border there are more
than 1 000 customs offices of entry.

In 2011, EU customs processed 36 million
pre-arrival cargo declarations (entry summary declarations), 140 million import
declarations, 96 million export declarations and 9 million transit
declarations. These figures represent an average of 8.9 declarations per second
handled by the Member States’ customs administrations.

Although the bulk of trade is lawful, a
recent study by the World Economic Forum estimates illicit trade at between 7 %
and 10 % of the global economy[10].

3.2.        Range of risks and customs interconnection with other authorities

The policies and role of agencies and
authorities other than customs are also a core concern. The need to align and
ensure complementarity between measures taken by different authorities with due
regard for their respective powers is a constant and vital feature of supply
chain security management. Measures to enhance transport security, for
instance, are clearly relevant to risk assessment of goods movements, most
obviously in relation to cargo moved by air, a mode of transport now considered
to be at high risk of terrorist acts. Equally, security measures required to
safeguard transport of dangerous goods are significant factors to be taken
account of.

More generally, when customs acts in
conjunction with, or on behalf of, other authorities systematic communication
and exchange of risk-related information is required[11]. In
matters posing serious risks to public health and the environment or to the
security and safety of citizens such communication is vital to ensure timely
intervention by the appropriate authority to mitigate and control risk. This is
especially important where there are likely to be attempts to conceal or
misrepresent such goods when they enter the EU. The objective should be to
ensure that key information residing with different agencies at national and EU
level is incorporated in risk assessment to improve its efficiency.

3.3.        The challenge for customs risk management: a multi-layered approach

The current risk management framework is
not sufficient to address security and safety risks uniformly at the external
border. Action to fill in the existing gaps is required and a new approach to
EU risk management is needed.

The assessment of the nature of the risk
and the likely impact should the risk materialise should drive decisions on
whether action is considered appropriate and, if so, the location, type and
timing of the checks or countermeasures to be taken.

Different risks require different
responses: trade between identifiably secure traders is considered to pose a
lesser risk than other trade; certain goods movements are readily identifiable
as high risk. For this reason the EU does not support 100 % scanning or
control but considers control measures should be commensurate with the risk
assessment.

The Yemen incident illustrated very clearly
several key points to be considered in formulating EU customs supply chain
security policy. These include the time-sensitive nature of risk mitigation
measures, the simultaneous involvement of several Member States in a single
transaction and their interdependence, the multi-agency and international
dimension to the issue and the core interest of industry and stakeholders in
the international trading and supply chain system. These interlinked elements
underline the need for a proactive, interconnected approach to risk management
involving multiple actors.

Addressing the risk of an explosive device
being loaded with air cargo requires action prior to loading in a third country,
whereas other risks, including those with security and financial implications such
as illicit trade used to fund criminal or terrorist purposes, may be subject to
control further on in the supply chain. Yet other risks may well be dealt with
more efficiently and with the least disruption at traders’ premises. Many
financial and commercial policy risks will continue to be controlled more
effectively at the time of customs clearance and by means of post-clearance
audits when more detailed data and documentation is available. Effective risk analysis
is essential for targeting such controls.

Conducting early risk assessment is key to
identifying the type and level of risk and the range of possible responses.
Assessing the risks in advance of the arrival (and even the loading) of the
goods enables customs and other enforcement authorities to implement a
multi-layered response to risks, allowing them to decide where best in the
logistics chain to deal with the risk without jeopardising the security of EU
Member States and citizens. This optimal vision of risk management is
illustrated below.

Figure 2: Optimal risk management process:

Assess in advance — intervene
where required

This pro-active risk management requires 24/7 surveillance of the
supply chain in real time 365 days of the year. It requires all actors with a
shared interest in safeguarding the integrity of the supply chain to play their
part and a framework for the process. Legitimate business interests must provide
relevant supply chain information for risk analysis. A structure may be
envisaged to cater for the multi-agency coordination and information sharing
required in the EU. Ways of taking information from third countries into
account must also be considered.

Such an approach underlines the need for
much greater convergence in the use of the information, data sources, tools and
methods used by customs to pinpoint risks and analyse commercial supply chain
movements. Distinctions, e.g. between risk management to protect citizens from
security and safety risks and more general anti-fraud concerns including goods smuggling,
seem counterproductive and inefficient.

The lack of a uniform approach hampers planning
and targeted use of limited resources and represents an EU-level vulnerability.

4.           EU customs risk management: the way forward

The effectiveness and efficiency of risk
management of the movement of goods across EU borders are of critical
importance for the security, health and well-being of citizens as well as for the
trade, economic and financial interests of the EU and its Member States. Multiple
challenges require multiple and integrated solutions to the gaps identified in
the current approach.

4.1.        Ensuring quality, availability and fusion of trade data

Provision by
traders of quality data and its availability to the authorities involved in
risk management at the appropriate level is a major priority.

4.1.1.     Quality
of data (‘who is moving what to whom’)

Based on work carried out by a high level working
group on strengthening air cargo security, EU legislation and advance cargo
information systems should be adapted to ensure that the data required for
effective risk analysis is made available.

This includes details of the real parties behind
transactions and goods movements and an adequate description of the goods for the
purposes of identification and electronic risk analysis; the introduction of a
mandatory HS code is needed at least for commercial consignments.

The filing arrangements required to obtain
this range of data from carriers and other parties must be put in place as a
matter of urgency. Some degree of differentiation to take account of different
trade business models is called for (e.g. maritime container shipping; air
express cargo; post). Rule-making by the EU should consider the administrative
burden on economic operators and small and medium enterprises. It also must
take account of the need to develop and promote international standards.

4.1.2.     Data
availability to all customs authorities concerned

The sooner risk assessment of supply chain
goods movements can be undertaken, the better control requirements can be
tailored to the type of risk identified and adapted to fit the logistics
process. Trade data must be recorded as soon as possible in a way that
facilitates effective risk analysis and management.

Data need to be accessible at the same time
to multiple Member States to support flexible use, management and exploitation.
The change in filing arrangements can allow data from different parties
obtained in more than one Member State to be fused. Cost-effective methods of
achieving this should be explored.

4.2.        Engaging with economic operators

Securing and safeguarding the integrity of
the supply chain is a shared interest among business interests and government
authorities.

4.2.1.     The
EU Authorised Economic Operator (AEO) programme

Successful implementation of the Authorised
Economic Operators (AEO) programme in the EU is vital to recognise the
investment made by these operators and ensure that significant benefits accrue.

Recognition of AEO status within the EU by
other non-customs authorities and regulators concerned with supply chain risk
evaluation and mitigation could be an important source of economies and
benefits for operators. Likewise, customs recognition (full or partial) of
similar EU status in other spheres (e.g. regulated agent in the air transport
legislation) could improve the effectiveness of risk targeting.

Broadening the benefits accruing to EU AEOs
internationally and mutual recognition of similar programmes established by
third countries should also be a priority.

4.2.2.     Cooperation
with legitimate business to target illicit traffic

Full engagement with economic operators
offers the prospect of further significant benefits to risk management through
raising trade awareness of the importance of the quality of data to be supplied
and increasing knowledge of the supply chain in order to better identify
vulnerabilities and threats.

Valuable data available to operators should
be exploited by authorities for risk analysis purposes.

4.3.        Addressing risk management capacity differentials

There is a need to overcome not only
differences in capacity to analyse information but also the varying levels of information
in different Member States. A combination of action at Member State and EU
level must be considered.

4.3.1.     Member
State level

It is necessary to build up capacity to
address the gaps existing in each Member State. This involves adjusting national
electronic risk engines to common technical specifications in order to ensure
implementation of the required standards. It also involves committing adequate
resources for 24/7 risk management and ensuring high-quality expertise in
targeting and risk mitigation (e.g. through training).

4.3.2.     EU
level

Member State action can help overcome gaps in
risk analysis capacity at national level. However, this alone is insufficient
to deal with collective, EU-wide risk management issues associated with fragmentation
in information flows due to geographic location and the nature of international
logistics chains.

At EU level, better pooling of the capacity
and resources of Member States is required to achieve EU risk management
objectives more effectively at all point of the external border. While
recognising and respecting specific local, regional and national risk
management characteristics, additional EU-level capacity would provide a dynamic
cost-effective complement to national action. This could comprise deployment in
real time of an electronic risk engine to supplement national technical capacity
and the development of a resource capability to address threats and risks that
are common to Member States. More specifically, a capability organised at EU
level would:

·
enable suitable common risk criteria or EU-level
risk profiles to be applied directly to EU-level data, rather than via 27
national systems, in crisis and other situations;

·
strengthen the capacity to identify common risks
and ensure they are treated in the same way across the external border.

·
increase the visibility of international supply
chains and ensure that important risk information is not overlooked at external
border level;

·
improve the capacity to identify more rapidly
illegal trade networks that operate beyond national boundaries and address the
risks of diversion and port shopping more systematically.

·
permit more effective external border data
quality management, risk evaluation and review;

·
create a platform for information-sharing with
other authorities and with third countries.

The opportunities arising from the
forthcoming Customs 2020 programme, for example the stationing of Member State
experts at a permanent location in the form of expert groups, should be fully
exploited. Pooling such resources at EU level would help to address the fragmentation
of information flows, overcome difficulties associated with differences in risk
management capacity between Member States and guarantee a uniform standard of
electronic risk analysis and management.

4.4.        Coordinating with other authorities and agencies

The need to have more structured and
systematic cooperation and coordination between customs and other authorities,
especially in situations where the risk can be better handled at the EU level,
is one of the main conclusions drawn from the Yemen case. In particular:

·
There is a need to streamline risk information and
intelligence from specific agencies on serious threats related to cargo
movements, make it available and have it acted upon immediately using the
advance cargo information system. The type of information, and procedures for
its transmission in a way that optimises the results for common risk management,
depends on the structure and organisational setting of the relevant authorities
(including customs) and needs to be determined and agreed together with those
authorities.

·
Customs should participate in EU-level supply
chain security threat and risk assessment and ensure its integration in customs
risk management.

The added value of such arrangements would
be magnified if such information were applied uniformly and instantly at EU
level in real time, as this would ensure the earliest possible reaction to
common threats and risks and overcome the gaps identified above.

4.5.        Cooperating internationally

Effective risk management also depends on
strong international cooperation, both bilaterally and multilaterally. Close
cooperation with our main trading partners will expand knowledge and
information. It will also contribute to spreading knowledge of risk management
methods and techniques internationally.

The EU should pursue initiatives to develop information exchange with major trading partners and neighbouring
countries, promote mutual recognition of trade partnership programmes and
support joint training of staff through exchanges of officials and developing
common standards; it should complete on-going work on a common framework for
risk management with partners participating in the EU customs security area;
finally, it should continue to support international work on standards (e.g. under
‘SAFE’) in multilateral organisations such the WCO, ICAO, IMO and UPU with
regard to risk management and supply chain security, including pre-departure
information for all cargo, exchanges of information, trade partnership
programmes and detection technologies.

5.           Conclusion

Traders, Member States and citizens in the
EU all have an interest in effective risk management. Closer engagement with
economic operators is required to attain the desired standards of data for risk
analysis, facilitate the efficient movement of legitimate trade and better
combat illicit trade. This, together with more systematic exchange of risk
information and coordination between customs and other authorities or agencies and
closer international cooperation, will reinforce the security and integrity of
the supply chain.

Before taking concrete initiatives for
action to reinforce customs risk management the Commission invites the Council,
the European Parliament and the Economic and Social Committee to consider the approach
set out in this communication.

[1]               Council Regulation (EC) No
450/2008 of 23 April 2008 laying down the Community Customs Code (Modernised
Customs Code), Article 2.

[2]               Accordingly,
the strategy for the evolution of the Customs Union adopted by the Council in
2008 calls on EU customs to fulfil the objective of protecting society and the
financial interests of the EU by ‘applying effective measures against the
movement of illicit, restricted and prohibited goods’ — Communication from
the Commission to the Council, the European Parliament, the Economic and Social
Committee and the Committee of the Regions of 1 April 2008 entitled Strategy
for the evolution of the Customs Union [COM(2008) 169 final, p.5.

[3]               Council Regulation (EC) No 648/2005
of 13 April 2005.

[4]               ENS:
Entry Summary Declaration.

[5]               Study on possible ways to
enhance EU-level capabilities for customs risk analysis and targeting,
PricewaterhouseCoopers, 31 May 2012.

[6]               E.g.
more than 50 % of goods entering via Rotterdam — a major sea hub —are bound
for another Member State.

[7]               Over
36 million ENS were lodged but the number of requests from EU first points of
entry for information from other Member States was 382. This is not consistent
with proactive risk assessment and credible risk analysis and mitigation for
goods crossing the external border.

[8]               On this subject the PWC study
concluded ‘...there is room for improvement in the exchange of intelligence and
information at all levels (between organisations at the national level, between
the national and the EU level and between organisations at the EU level).’

[9]               External
and intra-EU trade: A statistical yearbook — Data 1958-2010, p16.

[10]             World Economic Forum, New
Models for Addressing Supply Chain and Transport Risk, An initiative of the
Risk Response Network, 2012. P9.

[11]             ‘The term security is used in
the widest sense here. It covers not only threats to public security in the
movement of goods (criminal, terrorist or other trafficking or illegal trade in
firearms, biological products or explosives, for example), but also the threats
to society’s security from trade in goods which pose a risk to public health,
the environment and consumers.’ The role of customs in the integrated
management of external borders, COM(2003) 452. .