MULTIANNUAL PROGRAMME FOR THE ATTAINMENT OF THE CUSTOMS UNION

INTRODUCTION

A - General remarks

This programme for the attainment of the customs union is part of the stated policy of working towards the creation of a single market in all its aspects. The measures advocated by the Commission under the programme are designed to complete and consolidate the customs union, the instruments of which do not simply express a common customs policy but at the same time make it possible to implement other common policies, thereby helping to eliminate progressively the formalities and controls in intra-Community trade. The measures which go to make up this programme should, by providing more reliable external protection for the European economy and streamlining internal trade, put the internal market on a firm footing. The programme sets out various proposals for giving practical effect to Community preference and aiding development of the free movement of goods.

Such a programme, then, is closely linked with the Community policy for the establishment of an economic and monetary union as adopted by the Community institutions, in the form of a multiannual programme to be achieved in yearly stages. The link is confirmed by the parallel nature of the priorities proposed for 1979 and the proposals on customs union put forward in the 1979 EMU programme.

programme for the attainment of the customs union is the fruit of deliberations and discussions in Community institutions and national administrations and with the trade and industrial interests affected, following the Commission communication of 15 June 1977 on the state of customs union (1)

B - Communication on the state of the customs union and the attitude of the Community institutions and interested parties

1. The Commission communication on the state of the customs union emphasized the need to improve the free movement of goods within the Community and to adopt a complete and coherent set of Community customs rules applicable in trade with non-member countries.

2. A Conference organized by the Commission in December 1977, which brought together representatives of the Community institutions, national administrations, various economic sectors and users, showed (2) the overwhelming importance attached to the Commission's guidelines.

3. In the face of the present difficulties in world trade and the need for concrete achievements capable of contributing to the success of the strategy laid down by the Community to extricate itself from the crisis, the Economic and Social Committee, in examining the Commission communication on the state of the customs union, drew attention in its opinion of 30 March 1978 (3) to the importance of problems raised and the urgent need to draw up a specific programme for the attainment of the customs union.

4. Furthermore, the political, economic and psychological importance of the measures aimed at improving the functioning of the customs union and the need to draw up a multiannual programme, to be periodically updated, were emphasized in the report presented by the European Parliament's Committee on Economic and Monetary Affairs, which was followed by the resolution on the "development of the customs union and of the internal market" adopted by the Parliament on 12 April 1978 (4).

(1) COM(77) 210 fin. (2) Record of the Conference on "The Customs Union : today and tomorrow", held on 6 and 7 December 1977. (3) Opinion, OJ No C 181, 31.7.1978. (4) Resolution, OJ No C 108, 8.5.1978. Report of the Committee on Economic and Monetary Affairs presented by Mr Nyborg (Doc. 557/77). The latter reaffirmed its position in a second resolution on 5 July 1978 (1), stressing that the unsatisfactory operation of trade in intra-Community traffic was having an adverse effect on the productivity and competitiveness of Community industry and was undermining the efforts to bring about common structural and employment policies.

5. The European Council has also stated on two occasions - in Copenhagen and Bremen - that the Community's continuing duty was to guarantee and improve the common market by continuing to eliminate trade barriers and distortions of competition.

6. Recently the Council too pledged, via its President, to give priority to the Commission proposals relating to the realization of the customs union (2) and (3).

7. In addition, the Commission attitudes have been discussed in great detail with the heads of the national customs administrations, who play a key part in the creation of the customs union since the latter, far from being solely a matter of Community legislation, requires each administration to make structural changes and adopt a new way of thinking ; henceforth customs activities must reflect solidarity among the partners.

8. The trade associations represented on the Advisory Committee on Customs Matters have stated that they too are prepared to play their part in developing the customs union.

9. On the eve of elections to the European Parliament by universal suffrage the Community ought to make renewed efforts to give greater substance to European citizenship and to promote awareness of belonging to a community. In this context, doing away with intra-Community frontiers, as places where formalities and controls must be complied with, is particularly important.

10. The prospect of further enlargement of the Community is yet another incentive to speed up the establishment of the customs union, which at present still retains many of the characteristics of a free-trade area.

11. The Commission considers it desirable to redefine the key aspects of the problems of consolidating the customs union from the point of view of making the internal market more effective. It feels obliged to explain how far harmonization of the main points of the customs procedures can go towards providing the Community with a basis from which to develop the internal market, it being very important for the latter to be seen as providing Europe's economy with the positive results of an effective Community preference and allowing the scope to develop the free movement of goods.

I. THE MULTIANNUAL PROGRAMME

A. Basic objectives

1. Article 9 (1) of the Treaty provides that : "The Community shall be based upon a customs union ...". The ultimate objective of that customs union, is to create the conditions on which the fusion of the national markets into a single market and the elimination of internal frontiers depend. These conditions entail more than the mere establishment of a Common Customs Tariff and a number of basic principles governing the application of such a tariff. They must be given practical effect via the establishment of a complete, uniform and effective body of legislation, designed to ensure the homogeneity of trade arrangements between the Community and non-member countries and thereby to create the conditions required for goods to be able to move within the Community under the same conditions as within domestic markets.

2. The liberalization of intra-Community trade, while depending very much on the homogeneity of the rules in force at external frontiers and their being applied in a uniform manner - which should be facilitated by the introduction of Community procedures - is naturally linked to (1) OJ No C 182, 31.7.1978. (2) Debates of the European Parliament, 14 September 1978 (Oral Question (Doc. 283/78)). (3) Debates of the European Parliament, 8 January 1979 (Oral Question (Doc. 513/78)). progress achieved in other fields, particularly in matters of taxation, currency, transport and statistics (1).

The Commission feels, however, that even in the absence of substantial progress on these matters, customs measures may contribute greatly to the simplification of the formalities and controls applied in intra-Community trade, to greater fluidity of trade and to accentuating Community preference.

3. While it is very important that formalities and controls in intra-Community trade be eliminated, it must not be forgotten that the European citizen judges the progress achieved on integration by the controls and formalities which he sees applied when he travels within the Community or when he sends or receives non-commercial parcels.

The Commission therefore considers that a fresh impetus should be given to deal with all the problems arising in connection with relief from duty on goods carried by travellers or contained in parcels sent to individuals.

4. Full harmonization of the customs rules must be achieved before the barriers between national markets can be fully dismantled and is therefore essential for the development of economic and monetary union. The harmonized rules must be as reliable as each of the old national systems, given the new demands arising from the facts of life in a common market, and would in particular permit greater uniformity as regards establishment of the Community's own resources.

5. The only way to ensure that customs legislation is uniform and reliable is to see that binding measures are enacted which are obligatory and directly applicable within the Member States, and therefore offer legal guarantees for the individual. Particular attention must therefore be paid to the form of the legal act to be adopted for establishing this Community customs legislation.

As a result of past experience, particularly in the field of the "economic" customs procedures, the Commission is categorically in favour of Regulations. New line Directives certainly confer obligations on Member States, but normally require intermediate national legislation in order to produce legal consequences for individuals. This procedure is time-consuming ; moreover, Directives do not adequately provide the legal certainty and uniformity of Community law necessary for the proper functioning of the common market. These aims can be achieved only by the use of Regulations.

6. The establishment of a body of Community customs law inevitably raises the problem of harmonization of penalties and organization of legal protection for those liable to such penalties.

If disparities as regards penalties persist, this may not only give rise to unequal treatment or even deflection of trade, but may also seriously affect the operation of customs arrangements and procedures and jeopardize the effectiveness of common policy measures whose implementation is based on those arrangements and procedures. Similarly, the national systems currently in force should be reconsidered with a view to finding solutions appropriate to the new dimension and specific needs of the Community. Unity of legislation also makes it necessary to introduce the same level of legal protection throughout the Community.

7. Among other qualities which Community legislation must possess are clarity and transparency.

It is necessary to ensure that the desire to bring the decision-making process to a successful conclusion does not lead to the adoption of vague or ambiguous formulations, which will be bound to give rise to differences of interpretation, and hence further disparities, between Member States.

The establishment of uniform rules which, by their nature, will have to undergo frequent amendments, inevitably gives rise to the problem of their codification, without which it will be difficult to consult the provisions. The codification must initially take the form of recasting into a basic Regulation and a single implementing Regulation the provisions relating to a given sector which are to be found scattered (1) It should be remembered that simplified procedures could be introduced in the field of taxation as announced by the Commission in its programme for 1975 (Doc. COM(75) 391 fin.). Some progress in this area is possible following the adoption of the Sixth Directive on VAT. The same will be true for currency matters, following the entry into force of the European monetary system. in different numbers of the Official Journal. The next step is to undertake codification proper, entailing a basic text of a general nature (customs code) dealing systematically and on the basis of uniform formulations and concepts with all customs arrangements and procedures, this basic text being supplemented where necessary by implementing provisions.

8. The establishment of the customs union inevitably brings the national customs administrations face to face with the problem of adapting their structures, just as it poses the problem of the Community machinery needed for such a union to operate properly. While the national administrations are still giving thought to these matters, it can be stated here and now that action in the customs field is no longer motivated solely by national considerations but is increasingly taken with due consideration for the interests of partner States or Community interests proper.

Strengthening the Community element in customs matters raises not only the problem of teaching Community law in the framework of vocational training but also that of wide-ranging cooperation between national administrations and the Commission's departments. The development of this cooperation at all levels must be one of the major concerns in the years ahead.

While there is already some cooperation between the Member States, cooperation between the Commission departments. and national administrations is still only in its early stages. The experience of the past few months regarding the measures adopted concerning textile products and steel, however, shows how much the effectiveness of a measure and its homogeneous implementation throughout the Community depends on close cooperation between the Commission and the Member States' authorities. The regular contacts introduced in this context between the Commission's departments and national customs experts have turned out to be extremely fruitful and have already enabled a fair number of practical problems to be resolved. These encouraging examples undoubtedly deserve to be applied on a wider scale beyond the strictly sectoral framework to which they are still confined at present.

With regard to the institutional structure of the customs union, the cumbersome nature of the procedures is a serious impediment to the rapid adaptation of existing instruments which is required to meet unforeseen situations. A solution to these problems can be found only in making wider use of the delegation of powers, as provided for in Article 155 of the Treaty. The powers which the Commission already has in this respect must be extended to other matters, including temporary derogations from the application of Common Customs Tariff duties. While the main objective of such tariff measures is to enable the Community to react to unforeseen shortages, the procedures for giving effect to such measures generally take more than six months before final publication in the Official Journal of the European Communities.

9. It is also necessary to make the most of the Community's weight and size in order to strengthen its image in international meetings dealing with customs matters. To this end, Community participation in international organizations must be improved and common positions be worked out more rapidly and more effectively.

B. Commitment procedure

1. The Commission wondered whether it would be possible to draw up in advance a detailed timetable for implementing the multiannual programme, but thought it better, on reflection, to reject this idea so that it would have some flexibility in selecting its priorities - the latter being likely to change with economic developments - so that it would be able to adjust periodically the measures aimed at unifying internal markets in the light of progress made in the meantime in areas other than customs matters.

2. This is why the Commission has chosen to establish by year a coherent set of priorities designed to advance the creation for the construction of a true customs union.

3. The Commission proposes to take stock in November of each year of the results obtained and efforts made during the previous year as regards achievement of the overall objectives and to present the priorities for the following year, with specific commitments.

4. The Commission will not, however, confine itself solely to the priorities set out under the above procedure, since it will be continuing its activities in those areas where it is competent either under the provisions of the Treaty or by virtue of powers delegated by the Council, for instance with regard to administration and negotiation.

The bulk of these measures will be incorporated each year in the list of priorities to be presented. This also applies to certain executive measures which the Commission intends to introduce in conjunction with the national authorities and which are needed in order to strengthen the inter cohesion of the customs union and improve trading conditions on the basis of increased mutual trust.

5. The priorities for 1979 are set out in Part II of this communication. The work of establishing these priorities was done by the Commission and the heads of the customs administrations of the Member States in close collaboration.

II. PRIORITIES FOR 1979

In accordance with the commitment procedure outlined above, the Commission, in line with the memorandum annexed to the 1979 programme address, sets out in the following pages a list of priority measures for 1979, which fall into three distinct categories: A. Proposals already examined or in the final stages of examination and which could therefore be adopted in the first half of 1979;

B. Proposals not yet examined, or in the early stages of examination, but which should be adopted by 1 January 1980;

C. Proposals to be transmitted to the Council in 1979.

In addition, further measures representing either a continuation of current activities, particularly as regards the administration of existing Regulations, or overall activities which the Commission wishes to undertake with the aim of strengthening the customs union, are indicated in section D of this chapter, to give a coherent picture of all the Community's activities in the customs field.

A. Proposals already examined or in the final stages of examination and which could therefore be adopted in the first half of 1979

A.1. Proposals for a Regulation on processing prior to customs clearance ("Umwandlungsverkehr")

COM(72) 1623 fin.;

Transmitted to the Council on 29 December 1972;

Opinion of the European Parliament, sitting of 9 May 1973;

Opinion of the Economic and Social Committee, meeting of 23 January 1973.

In the case of certain categories of goods, the fact that they have undergone processing entails the reduction of the customs charge which would have been imposed upon such goods had they not been processed.

A.2. Proposal for a Regulation on the refund or remission of import and export duties

Doc. COM(75) 685 of 23 December 1975;

Transmitted to the Council on 30 December 1975;

Opinion of the European Parliament, sitting of 14 May 1976;

Opinion of the Economic and Social Committee of 25 May 1976.

This is a matter of defining the cases in which refund or remission of import and export duties may be granted to the party concerned (uniformity in the application of the CCT and of the common agricultural policy) and of establishing the conditions, in particular the time limits, to be observed in granting this refund or remission.

A.3. Proposals for a Regulation laying down conditions for post-clearance collection

Doc. COM(77) 192 fin. of 24 May 1977;

Transmitted to the Council on 27 May 1977;

Opinion of the European Parliament, sitting of 17 January 1978;

Opinion of the Economic and Social Committee of 23 November 1977.

This is a matter of defining those cases where the customs authority may collect retroactively import or export duties which were not levied at the time when they were due and of laying down the conditions (in particular the time limits) under which action may be initiated in order to recover those duties.

A.4. Proposal for a Regulation on mutual assistance between the competent authorities of Member States and between them and the Commission to ensure the correct application of Community rules regarding customs and agriculture

COM(73) 538 fin.;

Transmitted to the Council on 25 April 1973;

Opinion of the European Parliament, sitting of 11 December 1973;

The object of this proposal is to ensure uniformity of customs procedures as regards both the application of common policies and measures to combat fraud.

A.5. Proposal for a Directive on the harmonization of procedures for the release of goods for free circulation

COM(73) 2137 fin.;

Transmitted to the Council on 21 December 1973;

Opinion of the European Parliament, sitting of 27 June 1974;

Opinion of the Economic and Social Committee, meeting of 17 July 1974;

Here it is a matter of establishing uniform rules for the release of goods for free circulation irrespective of the Member State in which the goods are entered for this procedure and therefore to eliminate differences in the way Community firms are treated.

Since this procedure is the legal framework within which each Member State applies any commercial policy or other measure applicable to imports, it is essential for the proper operation of the customs union and at the same time in order to permit genuine liberalization of intra-Community trade that this procedure be placed on a Community basis.

A.6. Proposal for a Directive on customs debt

Transmitted to the Council on 8 April 1976 (OJ No C 128, 10.6.1976);

Opinion of the European Parliament, sitting of 17 September 1976 (OJ No C 238, 11.10. 1976);

Opinion of the Economic and Social Committee of 27 October 1976;

Amended by COM(76) 596 fin. of 12 November 1976;

Transmitted to the Council on 17 November 1976 (OJ No C 279, 25.11.1976).

This proposal is aimed at defining the conditions for the establishment and termination of the obligation of persons liable to pay duties on imports or exports.

A.7. Proposal for a Regulation amending Council Regulation (EEC) No 1798/75 on the importation free of Common Customs Tariff duties of educational, scientific and cultural materials

COM(78) 349 fin.;

Transmitted to the Council on 26 July 1978;

Opinion of the European Parliament, sitting of 21 October 1978.

The purpose of this proposal is to adapt the present provisions of Regulation (EEC) No 1798/75 to those of the Protocol to the Florence Agreement signed in Nairobi in November 1976.

A.8. Proposal for a Regulation on the importation free of Common Customs Tariff duties of materials specially designed for the education, employment and social advancement of the handicapped

COM(78) 348 fin.;

Transmitted to the Council on 21 July 1978;

Opinion of the European Parliament, sitting of 21 October 1978.

This proposal is aimed at transposing to Community level the provisions concerning the physically or mentally handicapped contained in the Protocol to the Florence Agreement signed in Nairobi in November 1976.

B. Proposals not yet examined or in the early stages of examination, but which should be adopted by 1 January 1980

B.1. Proposal for a Regulation defining the conditions under which natural or legal persons may be allowed to enter goods for customs purposes

Doc. COM(78) 724;

Transmitted to the Council on 12 December 1978.

The establishment of Community provisions in this matter is urgently required in order to facilitate adoption of the Directive on the release of goods for free circulation and, more generally, in order to eliminate differences in the treatment to which Community firms are currently subject depending on the Member State in which they carry on their activities.

B.2. Proposal for a Regulation on the procedure applicable to the stores of vessels, aircraft and international trains

COM(78) 76 fin. of 1 March 1978;

Transmitted to the Council on 8 March 1978 (OJ No C 73, 23.3.1978);

Opinion of the European Parliament, sitting of 16 June 1978;

Opinion of the Economic and Social Committee - meeting of 17 May 1978.

The adoption of a Community procedure will meet the need to ensure that the conditions for supplying Community firms engaged in international transport are uniform and to prevent distortion of competition between the latter and their foreign counterparts, the necessary precautions being taken against abuses.

B.3. Proposals for the rationalization of the preferential origin rules

COM(78) 745 fin.;

COM(78) 746 fin.;

Transmitted to the Council on 11 January 1979.

With regard to the agreements concluded with the EFTA countries, provision must be made for more rational rules on cumulative treatment and the origin criteria for Chapters 84 to 92 of the CCC nomenclature, thereby producing a saving in administrative costs for firms when they have to provide customs with evidence of the origin of goods.

C. Proposals to be transmitted to the Council in 1979

C.1. Proposal for a Directive on the harmonization of export procedures for goods

The aim is to establish uniform export procedures irrespective of the Member State in which the goods are entered for this procedure and therefore to eliminate differences in the way Community firms are treated.

Since this procedure is the legal framework within which each Member State applies any commercial policy or other measures applicable to exports, it is essential for the proper operation of the customs union that it be placed on a Community basis.

C.2. Proposal for a Regulation laying down the condition governing the issue of information by the customs authorities and the legal significance of such information

This Regulation will define the conditions under which an individual may request information on customs matters from the authorities and makes distinctions according to whether it is a question of provisions laid down by law, regulation or administrative action and between information of a general nature and that concerning the tariff classification of goods.

C.3. Proposals on the adoption of rules concerning the valuation of goods for customs purposes following the GATT negotiations

If the GATT negotiations on the valuation of goods for customs purposes lead to the adoption of a new code the Commission will make appropriate proposals to bring the new system into force by the date agreed in GATT.

C.4. Proposal on the settlement of disputes

Over and above the fact that disparities in this field could distort the conditions of competition within the Community and lead to deflections of trade, it is necessary to extend legal protection to firms in a manner which is both equitable and effective.

C.5. Proposal for a Council Regulation setting up a Community system of reliefs from customs duty

This Regulation will make it possible to grant exemption from customs duties or agricultural levies in respect of imports of certain goods in specific circumstances.

The Council has already adopted a number of Regulations dealing with duty-free arrangements, but a full, unified system of duty-free arrangements would be desirable.

As regard relief from duties on military equipment, the Commission, which is continually in contact with the Member States under the arrangements established by common accord, considers that progress in this field will depend partly on the results obtained under the multilateral trade negotiations (MTNs) on the dismantling of tariffs on aircraft.

C.6. Proposals for converting certain Directives on economic customs procedures into Regulations

This is aimed at implementing the principle invoked earlier in the section on basic objectives, to establish customs legislation which is reliable and offers full legal security.

C.7. Improving the Community transit system

A proposal aimed at simplifying certain aspects of the Community transit procedure was laid before the Council on 11 August 1975 (OJ No C 204, 6.9.1975).

It has not yet been possible to adopt this proposal. In the light of experience the Commission has decided progressively to improve the operation of this system by adopting or proposing in a balanced fashion measures to streamline the system where possible, and to prevent or sanction irregularities.

As part of this approach, which concerns both goods and passenger traffic, the Commission will shortly be laying before the Council a new proposal designed to replace the 1975 one.

C.8. Simplification of temporary movement in Member States of Community goods sent from another Member State

The intention is to ensure that goods in free circulation which are used temporarily in one or more other Member States can move freely by replacing national procedures (temporary export, transit, temporary admission, re- export, transit, re-import) by a Community procedure in order to alleviate existing formalities.

The Commission will base its proposals on the relevant provisions of the Treaty as well as on the Sixth Directive on VAT which provides for the laying down of Community tax rules for the application of the exemptions concerned.

D. Other measures

D.1. Measures which already fall within the responsibility of the Committees on Rules

This involves the provisions for implementing current Regulations and Directives.

These measures will be taken within the framework of the Committees on Rules in so far as they to be necessary in order to ensure that customs law is uniformly applied.

D.2. Preparation of common positions at international meetings

The extent of the customs matters dealt with in international meetings and the realities of the customs union mean that the Community often participates actively in work undertaken in this field. The Commission intends to increase, within the framework of existing procedures, its activities in this area in order to facilitate further the working out of common positions. Such measures will contribute to the strengthening of the Community's position in the world.

D.3. Work on customs matters in the framework of agreements or conventions

This work will be carried out, for instance, within the framework of renewal of the Lomé Convention and the agreement with Yugoslavia and in order to permit the accession of new Member States. It will also involve continuing the harmonization of Lists A and B for various agreements.

D.4. Measures for the elimination of obstacles to the free movement of goods

The Commission will continue to act systematically, where need be by making use of the procedure laid down in Article 169 of the Treaty, against measures having equivalent effect to quantitative restrictions such as requirements of automatic licences, technical endorsements, certificates of origin, national stipulations imposing maximum or minimum prices for certain products as well as charges having equivalent effect to customs duties.

D.5. Establishment of the integrated tariff of the European Communities

At present there is no Community instrument which brings together in a single, integrated nomenclature all the statistical and tariff subheadings referred to in numerous Regulations.

In the context of the customs union, this situation creates serious difficulties. In order to counter those difficulties an integrated customs tariff of the European Communities ("TARIC") must be prepared and implemented to enable the Community's Common Customs Tariff and import-export statistics to be administered more effectively.

In addition, it will be necessary to meet the needs of international commerce by providing a method of classification for chemical products in which there is substantial trade, both in the customs and statistical nomenclatures, which will overcome difficulties related to chemical names and their related linguistic problems.

D.6. Sectoral measures already initiated in certain sensitive areas

The measure will be continued by the Commission in close cooperation with the customs administrations. They have proved to be very useful and effective, for instance, for dealing with operational problems in the textiles and iron and steel sectors. In addition, in the field of the textiles agreements, the Commission intends to publish a "compendium" to facilitate the tasks of administrations and users.

D.7. Measures at the level of implementation

These measures, which will be taken in close cooperation with the Member States' customs administrations, will serve to strengthen the homogeneity of application of the customs law. In this context, the Commission intends to call on high-level experts to monitor the functioning of customs regulations in the Member States, without prejudice to the exercise of the Commission's own responsibilities in this field. It will also encourage exchanges between officials of Member States in order to enable professional knowledge to be acquired and to make it possible to work in cooperation with the customs officials visited by becoming familiar with their practical problems.

D.8. Training

The mere existence of customs legislation at Community level does not mean that such legislation will be applied in the same spirit and manner throughout the Community. The Commission makes an appropriate contribution to the training of officials responsible for teaching Community matters in each Member States.