Amended proposal for a DECISION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL on computerising the movement and monitoring of excisable products (presented by the Commission pursuant to Article 250(2) of the EC-Treaty)

EXPLANATORY MEMORANDUM

A. Principles

1. On 19 November 2001 the Commission presented a proposal for a Decision of the European Parliament and of the Council on computerising the movement and monitoring of excisable products (COM(2001) 466 final).

2. The Economic and Social Committee delivered its opinion on the proposal on 29 May 2002, with proposals similar to those contained in the Parliament's amendments, which have therefore been taken into account in the amended proposal.

3. On 24 September 2002 the European Parliament adopted the proposal for a decision at first reading, with ten amendments.

4. Discussions at the Council revealed the need for a number of other stylistic changes and clarifications. This amended proposal therefore also includes those changes.

5. On 4 June 2002, in its ECOFIN conclusions, the Council invited the working party on tax matters to continue its work on this proposal for a Decision so that a solution could be found before 1 April 2003. The Seville European Council endorsed these conclusions. These conclusions have been taken account of by the Commission and the co-legislators.

B The European Parliament's amendments

The European Parliament's amendments have been incorporated as follows:

I. Amendments accepted without change.

a. Amendments 1, 2, 3 and 4 add greater precision to the recitals stating the grounds on which the decision is based, by setting out the following principles:

Amendment 1 states the necessity of making the current project consistent with the system already in place for customs transit, saying that "(5) A computerised system for intra-Community movement of goods (EMCS) should be compatible and, if technically possible, merged with the new computerised transit system (NCTS), to strengthen action to combat fraud and to facilitate procedures for administration and trade." It is directly related to amendment 7.

The purpose of amendment 2 is to make things easier for SMEs; it introduces the principle that access to the system should be free of charge for economic operators. It runs as follows: "(8) Such a complex computerised system should not be developed and deployed at the expense of the competitiveness of the economic operators, in particular the many small and medium-sized companies active in this sector. Member States should develop a standard application for connection to the system, which should be made available free of charge." It is directly related to amendment 8.

Amendment 3 adds detail concerning areas of competence, including "responsibility for the security aspects of the system, its lawful application and the ownership and handling of commercially confidential information held thereon," and stresses that the Commission should also have the important role of coordinating, organising and managing the development and introduction of the system.

Amendment 4 states the need to improve the operation of the current system pending total computerisation, because of the time that this will take to complete. It is worded as follows: "(11) The computerised system for monitoring excisable goods will not be operational before 2007. Given the levels of fraud and red tape associated with the current paper-based system, the Commission should, after having consulted the industries concerned, propose and/or implement the necessary short-term measures to improve the functioning of the system."

The Commission's reservations about the wording of these amendments are set out in the responses to amendments 7 and 8, since the principles involved are acceptable to the Commission but the wording needs to be modified.

b. Amendments 5, 9 and 11 relate to substantive changes that do not pose a problem or where the Council position is already identical.

Amendment 5 concerns a terminological change in English: replacing the term "special reference" with the term "prime reference". It has been taken into account in the amended version.

Amendment 9 concerns data security, which is part of the system's operational specifications. Definitive decisions concerning the standards to be defined can only really be taken at the finalisation stage of the project (in 2007/2008). This amendment echoes the Commission's own concerns. More effective standards should indeed be applied to the system. However, in view of the rate of technological development it would be best to define these standards as late as possible.

The text is therefore acceptable and has been incorporated as follows: "the development of security features of the highest standard possible in order to prevent unauthorised access to data and to guarantee the integrity of the system."

Amendment 11 also echoes the Commission's own concerns. The changes introduced by the Council are identical. The text is worded as follows: "The countries that have applied for membership of the European Union shall be kept informed by the Commission of the development and deployment of the computerised system and shall be invited to take part in the tests to be carried out."

The Commission has no reservations about the wording of these amendments.

II. Amendments accepted subject to reformulation.

Amendment 6 relates to the way in which the computerised system will be set up and amends the first paragraph of Article 2 by inserting the words "in collaboration with the Commission" so that the text reads "The Member States, in collaboration with the Commission, shall establish ...."

The Council made a similar amendment, which reads "The Member States and the Commission shall establish...."

Both Parliament's and the Council's amendments serve the same purpose. The Council's wording has been used in the amended version.

Amendment 7 is directly linked to the recital 5 introduced by amendment 1. It adds a new paragraph to Article 3: "The computerised system shall, if technically possible, be merged with the NCTS. Together they shall form a single integrated computer system for surveillance of the movements both of excisable goods and of excisable/dutiable third-country goods."

The Council also proposed an amendment, but in more qualified terms, and only in a statement annexed to the minutes. The wording in the amended version was based on a compromise drafted by the Commission.

Amendment 8, which is directly related to amendment 2, stipulates that a standard application should be developed in each Member State and made available to economic operators free of charge. This does not conflict with the objectives of the system as envisaged by the Commission in its preparatory work. However, the wording must be altered to make clear the exact meaning of the words "make available to economic operators", in particular as they have an impact on the cost of the deploying the system - i.e. whether they refer to free access to a standardised application open to the public in every Member State, or the provision of a standard application to each economic operator.

The new version of the proposal is amended to provide this clarification, so that the development and provision of the system does not burden the Member States and the Commission with costs beyond their control. The amended proposal incorporates the "free-of-charge" principle but confines it to free access to the application.

III. Rejected amendment

Amendment 10 relates to the excise guarantee rules and would entail amendments to Member States' tax legislation as it applies to excise goods. The proposed measure falls within the scope of application of Council Directive 92/12/EEC of 25 February 1992, and amendments to this Directive are subject to unanimity (Article 93 EC Treaty).

The proposed amendment is therefore rejected and the amended version of the proposal does not take it into account.

C. Other changes

Discussions at the Council have stressed the need to take on board a number of other editorial changes and clarifications. This amended proposal therefore also includes those changes.

The amendments proposed by the Council relate to the following points:

1. As regards content, the main changes proposed are to the timetable for implementation of the computerised system, the date of entry into force of the Decision and the management procedure for the project.

Specifically, the Council proposes the following changes:

* Timetable

Article 2: "The Member States and the Commission shall establish the computerised system within six years [instead of five years] of the date on which this Decision enters into force."

"Activities relating to the initiation of the application of the computerised system shall begin not later than twelve months [instead of nine months] after the entry into force of this Decision."

Article 12: "This Decision shall enter into force on 1 January 2003" [instead of on the twentieth day following that of its publication in the Official Journal].

* Management procedure

The Council wishes the operating procedures for the Committee responsible for managing the project to be simplified. The Excise Committee established under Article 24 of Directive 92/12/EEC would be given exclusive competence. The Council's draft decision reads as follows:

Article 7: "1. The Commission shall be assisted by the Excise Committee set up by Article 24 of Directive 92/12/EEC.

2. Where reference is made to this paragraph, Articles 4 and 7 of Decision 1999/468/EC shall apply, having regard to the provisions of Article 8 thereof. The period laid down in Article 4(3) of Decision 1999/468/EC shall be set at three months.

3. The Committee shall adopt its rules of procedure.

* Legal scope of the Decision

In order to eliminate any ambiguity regarding the legal scope and impact of the Decision on tax legislation, a further amendment has been introduced in Article 4. It is justified by the general principle voiced by the Commission during the work in Council and Parliament, namely that the proposed Decision was in no way intended to amend tax legislation on excise duties, but simply to give the Commission and the Member States the financial and human resources to develop and set up the computerised system for the monitoring and movement of excisable products, and to specify the procedures that should be used to do this.

The Council wanted changes in the wording to underline this principle, and these have been incorporated in the amended proposal. Thus, Article 4 stipulates that the computer system is intended to set up the infrastructure and tools needed to ensure the system's overall interconnection and interoperability and the instruments for the exploitation of data to combat fraud.

To confirm this approach, the text of Article 1(2)(b) and (2)(c) has, at the Commission's behest, also been amended in a similar fashion to Article 4(1)(b).

2. As regards form, the Council wanted to amend Articles 7 and 11 and recital 10 to take account of the general principles applicable to the drafting of legislation under the co-decision procedure. This mainly concerns the rules applicable to multiannual programmes and the corresponding budgetary control.

The stylistic improvements introduced by the Council warrant no specific remarks.

D. Conclusion

Pursuant to Article 250(2) of the EC Treaty the Commission hereby amends its proposal as set out below.

2001/0185 (COD)

Amended proposal for a DECISION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL on computerising the movement and monitoring of excisable products

THE EUROPEAN PARLIAMENT AND THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty establishing the European Community, and in particular Article 95 thereof,

Having regard to the proposal from the Commission, [1]

[1] OJ C ..., ..., p. ...

Having regard to the opinion of the European Economic and Social Committee, [2]

[2] OJ C ..., ..., p. ...

Acting in accordance with the procedure laid down in Article 251 of the Treaty, [3]

[3] European Parliament opinion of ... (OJ C ...), Council Common Position of ... (OJ C ...) and European Parliament Decision of ... ( OJ C ...). Council Decision of ... .

Whereas:

(1) Council Directive 92/12/EEC of 25 February 1992 on the general arrangements for products subject to excise duty and on the holding, movement and monitoring of such products [4] provides that products moving between Member States under excise-duty suspension arrangements must be accompanied by a document completed by the consignor.

[4] OJ L 76, 23.3.1992, p. 1. Directive last amended by Directive 2000/47/EC (OJ L 197, 29.7.2000, p. 73).

(2) Commission Regulation (EEC) No 2719/92 of 11 September 1992 on the accompanying administrative document for the movement under duty-suspension arrangements of products subject to excise duty lays down the form and content of the accompanying document provided for in the Directive 92/12/EEC. [5]

[5] OJ L 276, 19.9.1992, p. 1. Regulation as amended by Regulation (EEC) No 2225/93 (OJ L 198, 7.8.1993, p. 5).

(3) In the light of the findings and recommendations in the report delivered on 24 April 1998 by the High Level Group on fraud in the alcohol and tobacco sectors it is desirable to replace the paper-based system with an electronic system for monitoring movements of excise goods which will enable Member States to obtain real-time information on movements and carry out checks where necessary, including checks on movements under Article 15 of Directive 92/12/EEC.

(4) The move to a computerised system should also allow the excise-duty suspension arrangements for products moving within the Community to be simplified.

(5) A computerised system for the intra-Community movement and monitoring of excisable goods (EMCS) should be compatible and - if technically possible - merged with the new computerised transit system (NCTS), so as to reinforce anti-fraud action and facilitate administrative and commercial procedures.

(6) For the purposes of implementing this Decision the Commission needs to coordinate the Member States' activities to ensure the smooth operation of the internal market. (7) Because of the size and complexity of the project, it requires considerable investment of human and financial resources at both Community and Member State level. It is therefore necessary to ensure that the Commission and the Member States will make the necessary resources available for the development and deployment of the system.

(8) Such a complex computerised system should not be developed and deployed at the expense of the competitiveness of the economic operators, in particular the small and medium-sized companies active in this sector. Member States should develop a standard application for connection to the system, which should be made available free of charge.

(9) The division between the Community and national components of the computerised system should also be defined, as should the respective duties of the Commission and the Member States with regard to the system's development and deployment. Such duties should include responsibility for the security aspects of the system, its lawful application and the ownership and handling of commercially confidential information held thereon. The Commission, assisted by the relevant Committee, must play the major role in coordinating, organising and managing the system.

(10) Provision should be made for evaluating the implementation of the computerised monitoring system.

(11) The computerised system for the intra-Community movement and monitoring of excisable goods will not be operational before 2007. Given the levels of fraud and red tape associated with the current paper-based system, the Commission should first consult the sectors concerned and then consider what measures are needed to improve the system.

(12) The cost of financing the system should be shared between the Community and the Member States, the Community's share being entered in the General Budget of the European Union.

(13) This Decision provides for a sum to cover the entire period that will be needed to develop and deploy the system, and represents the prime reference within the meaning of Point 33 of the Interinstitutional Agreement of 6 May 1999 between the European Parliament, the Council and the Commission on budgetary discipline and improvement of the budgetary procedure [6].

[6] OJ C 172, 18.6.1999, p. 1.

(14) The measures necessary for the implementation of this Decision should be adopted in accordance with Council Decision 1999/468/EC of 28 June 1999 laying down the procedures for the exercise of implementing powers conferred on the Commission [7],

[7] OJ L 184, 17.7.1999, p. 23.

HAVE ADOPTED THIS DECISION:

Article 1

1. A system, hereafter referred to as "the computerised system", shall be set up to computerise the movement and monitoring of the excisable products referred to in Article 3(1) of Directive 92/12/CEE.

2. The purpose of the computerised system is:

a) to allow electronic transmission of the administrative accompanying document provided for in Regulation (EEC) No 2719/92 and improve checks;

b) to set up instruments for combating fraud by enabling the Member States to monitor the flow of excisable products in real time and carry out checks where necessary;

c) to set up instruments for simplifying the intra-Community movement of products under excise-duty suspension arrangements, in particular by facilitating and speeding up the discharge of such movements.

Article 2

The Member States and the Commission shall establish the computerised system within six years of the date on which this Decision enters into force.

Work on developing the system must begin within twelve months of the date on which this Decision enters into force.

The Commission and the Member States shall make available the human, budgetary and technical resources needed to establish and run the computerised system.

Article 3

The computerised system shall comprise Community and national components.

The Commission shall ensure that in work on the Community components of the computerised system every attention is paid to reusing as much of the new computerised transit system (NCTS) as possible and ensuring that the EMCS system is compatible with, and - if technically possible - integrated into, the NCTS. Together they shall form a single integrated computer system for the surveillance both of intra-Community movements of excisable goods and of movements of excisable goods and goods subject to other duties and charges coming from or going to third countries.

The Community components shall be the common specifications, the technical products, the services of the CCN/CSI network (Common Communications Network/Common Systems Interface), and the coordination services used by all the Member States; they shall not include any variant or special feature of any such component designed to meet national requirements.

The national components of the system shall be the national specifications, the national databases forming part of the system, network connections between Community and national components, any software or equipment which a Member State considers necessary to ensure full use of the system throughout its administration, as well as the standard application which each Member State must develop, access to which must be made available to economic operators in its territory free of charge.

Article 4

1. The Commission, acting in accordance with the procedure provided for in Article 7(2), shall coordinate the setting-up and running of the Community and national components of the computerised system, and in particular:

a) the infrastructure and tools needed to ensure the system's overall interconnection and interoperability;

a)a the development of security features of the highest standard possible in order to prevent unauthorised access to data and to guarantee the integrity of the system;

b) the instruments for the exploitation of data to combat fraud, .

2. To achieve the aims of paragraph 1, the Commission shall conclude the necessary contracts and shall, in cooperation with the Member States meeting within the Committee referred to in Article 7(1), draw up a master plan and management plans required for the setting-up and running of the system.

The master plan and the management plans shall specify the initial and routine tasks which the Commission and each Member State are to perform. The management plans shall specify the completion dates for the tasks required for carrying out each project identified in the master plan.

Article 5

1. The Member States shall ensure that they complete, by the date specified in the management plans mentioned in Article 4(2), the initial and routine tasks allocated to them.

They shall report to the Commission the results of each task and the date of its completion. The Commission shall in turn inform the Committee referred to in Article 7(1) thereof.

2. No Member State shall take any action relating to the setting-up or running of the computerised system that might affect its overall interconnection and interoperability or its functioning as a whole.

Any action a Member State may wish to take that might affect the overall interconnection and interoperability of the system or its functioning as a whole shall only be taken with the prior agreement of the Commission, acting in accordance with the procedure provided for in Article 7(2).

3.

Member States shall inform the Commission regularly of any measure they may have taken to enable their respective administrations to make full use of the computerised system. The Commission shall in turn inform the Committee referred to in Article 7(1) thereof.

Article 6

The measures necessary for the implementation of this Decision relating to the setting-up and running of the computerised system and to the matters referred to in Article 4(1) and in Article 5(2) second subparagraph shall be adopted in accordance with the management procedure set out in Article 7(2). These implementing measures shall have no impact on Community provisions governing the collection and monitoring of indirect taxes, administrative cooperation or mutual assistance in matters of indirect taxation.

Article 7

1. The Commission shall be assisted by the Excise Committee set up by Article 24 of Directive 92/12/EEC.

2. Where reference is made to this paragraph, Articles 4 and 7 of Decision 1999/468/EC shall apply, having regard to the provisions of Article 8 thereof.

The period laid down in Article 4(3) of Decision 1999/468/EC shall be set at three months.

3. The Committee shall adopt its rules of procedure.

Article 8

1. The Commission shall take whatever other steps are necessary to verify that the measures financed from the Community budget are being carried out correctly and in compliance with the provisions of this Decision.

It shall regularly, in collaboration with the Member States, meeting in the Committee provided for in Article 7(1), monitor the various development and deployment stages of the computerised system with a view to determining whether the objectives pursued have been achieved, and to issuing guidelines on how to raise the effectiveness of the activities involved in implementing the system.

2. Thirty months after the entry into force of this Decision, the Commission shall submit an interim monitoring report to the Committee referred to in Article 7(1). The report shall if necessary set out methods and criteria to be used later in evaluating the operation of the system.

3. At the end of the six-year period referred to in the first subparagraph of Article 2, the Commission shall present a report to Parliament and the Council on the implementation of the system. This report shall set out, inter alia, the methods and criteria to be used in the later evaluation of the system's operation.

Article 9

The countries that have applied for membership of the European Union shall be kept informed by the Commission of the development and deployment of the computerised system and shall be invited to take part in the tests to be carried out.

Article 10

1. The costs of setting up the computerised system shall be split between the Community and the Member States in accordance with paragraphs 2 and 3.

2. The Community shall bear the costs of the design, acquisition, installation and maintenance of the Community components of the system and the routine operating costs of Community components installed in Commission premises or the premises of a designated subcontractor.

3. The Member States shall bear the costs of setting up and operating the national components of the system and the routine operating costs of Community components installed in their premises or the premises of a designated subcontractor.

Article 11

1. The overall figure for financing the computerised system during the period defined in the first paragraph of Article 2 shall be EUR 35 000 000 insofar as the Community budget is concerned. The annual appropriations, including appropriations assigned to the use and operation of the system after the above implementation period, shall be approved by the budgetary authority subject to the financial perspective.

2. The Member States shall estimate and make available the budgets and human resources needed to meet the obligations described in Article 5. The Commission and the Member States shall provide the human, budgetary and technical resources needed to establish and run the computerised system.

Article 12

This Decision shall enter into force on 1 January 2003.

Article 13

This Decision is addressed to the Member States.

Done at Brussels,...

For the European Parliament For the Council

The President The President

FINANCIAL STATEMENT

1. TITLE OF OPERATION

Computerisation of excise operations. Setting up of a European system to computerise the movement and surveillance of excisable products (system for computerising the movement and surveillance of excisable products).

2. BUDGET HEADING [8]

[8] This indication concerns only the implementation of the system. It is not possible, at this stage, to define the budget heading that will allow to finance the running of the system.

B5-306

3. LEGAL BASIS

Article 95 of the Treaty establishing the European Community

4. DESCRIPTION OF OPERATION

4.1 General objective

To combat fraud by implementing the main recommendation of the report of the High Level Group on fraud in tobacco and alcohol products approved by the Directors-General for Customs and Indirect Taxation on 24 April 1998 and the ECOFIN Council on 19 May 1998.

To ensure the smooth operation of the internal market by simplifying the intra-Community movement of excisable products under excise-duty suspension arrangements and making such movements more secure, as provided for in Directive 92/12/EEC of 25 February 1992 on the general arrangements for products subject to excise duty and on the holding, movement and monitoring of such products.

To do so, the accompanying administrative document, the paper which currently accompanies all excisable products moving between the Member States under a suspension arrangement, must be replaced by an electronic message linking traders to each other via their respective national administrations.

Such a system would provide Member States with real-time information on current movements and allow them to carry out whatever pre-movement, wayside and/or post-clearance checks they deem necessary.

Traders who were consulted have shown great interest in the system since, on the whole, they recognise that doing away with paper - as this system would - would simplify formalities, make trade more secure and release guarantees more quickly. This is because a consignor would immediately receive notice of the arrival of his goods at their destination, a notice which would have the same effect as the current copy 3 of the accompanying administrative document whose return means that the consignor's guarantee is released and he is also discharged of all further responsibility.

Alcatel TITN Answare carried out a feasibility study in 1999 and concluded that such a system was technically possible. The study provided all the details required for developing and deploying such a system. This study was officially approved by the Commission departments on 17 March 2000.

4.2 Period covered and arrangements for renewal or extension

Multiannual project, 2003-2008 , i.e. six full years from start-up.

5. CLASSIFICATION OF EXPENDITURE OR REVENUE

5.1 Compulsory/non-compulsory expenditure

Non-compulsory expenditure

5.2 Differentiated/non-differentiated appropriations

Differentiated appropriations

5.3 Type of revenue involved

None

6. TYPE OF EXPENDITURE

- Subsidy to be combined with funding from other public or private sector sources

The Community will finance that part of the system which links the national administrations with each other. The Member States will finance the part which links their respective administrations with their traders.

The operating expenditure to be borne by the Community will include mainly:

- legal and procedural measures;

- management tasks (organisation, planning, issuing calls for tender, selecting consultants, monitoring contracts, budget and administrative matters);

- quality control of the products developed and installed;

- coordination (particularly with the Member States and professional associations and between the various development and deployment contracts; the costs for this item will include meetings and missions relating to coordination);

- the equipment covered by the definition of the Community components of the system set out in Article 3(1) of the draft decision;

- the operating and technical specifications for the system (definition of all the features of the system in terms of operating and technical modules);

- the precise definition and configuration of the interfaces;

- the development of the common central system;

- the deployment and monitoring of, and support services for, the common system;

- the definition of a common information policy;

- the setting up of a common training programme;

- operations to test the common system;

- the contingency plan (backup for the system);

Should the operation prove an economic success, is there provision for all or part of the Community contribution to be reimbursed? No.

Will the proposed operation cause any change in the level of revenue? If so what sort of change and what type of revenue is involved? No.

7. FINANCIAL INCIDENCE

7.1 Method of calculating total costs of operation (definition of unit costs)

The costs of meetings and missions relating to coordination tasks will be calculated on the basis of the cost of travel and accommodation.

All other costs relating to activities described in the Table below will be calculated on the basis of experience gained from similar projects.

The tables mentioned below at points 7.2 and 7.3 concern the development and deployment phases of the system, as set out in article 2, 1st sub-paragraph of the proposal for decision.

However, the proposal for decision also covers operating costs and use of the system, after its implementation, which are provisionally estimated to be 4M EUR.

7.2 Breakdown by elements of the action in the development and deployment phase ( 6 years)

>TABLE POSITION>

million EUR (current prices)

>TABLE POSITION>

7.3 Indicative table of the commitments and payments during the development and deployment phase.

EC in Millions of EUR (current prices)

>TABLE POSITION>

>TABLE POSITION>

8. FRAUD PREVENTION MEASURES

The Commission will pay travel expenses and costs relating to the holding of Community-level information and consultation seminars directly to Member State officials, officials of other countries (particularly those from applicant countries) and representatives of external bodies. Anti-fraud clauses will be added to all contracts concerned.

The Commission will check all subsidies paid, all services provided and all studies delivered before making any payments and will do so in the light of contractual requirements and the principles of thrift and good financial and/or general management. Fraud prevention provisions (e.g. checks, requirements to deliver reports) will be included in all agreements and contracts between the Commission and those receiving payments.

9. ELEMENTS OF COST-EFFECTIVE ANALYSIS

9.1 Specific and quantified objectives, target population

- Specific objectives

With a view to achieving the general objective of preventing fraud and simplifying the intra-Community system for moving goods under excise-suspension arrangements, the computerising of the movement and surveillance of such products has its own specific objectives:

First, the purpose of the system is so to link traders with each other and via their respective Member State administrations as to permit automatic checking of the data on an authorised warehouse keeper and his consignee before any excisable goods are consigned under the excise-suspension arrangements. The system will discharge movements by the same route and automatically track losses from or shortfalls in consignments. Each Member State's SEED [9] database (containing the registration details for authorised warehousekeepers, registered operators and warehouses) will be stored in the computerised system so that it will no longer be necessary to exchange data between Member States by diskette as at present.

[9] System for the Exchange of Excise Data.

Secondly, computerisation would make it possible to establish a surveillance system that enables Member States' administrations to exchange information on movements. This could be used:

- to store all data on a given movement that are required for surveillance purposes;

- as an early warning system;

- to allow checks, including wayside checks, to be carried out or planned in real time;

- to carry out automatic risk analyses based on risk indicators agreed at Community and national level;

- for exchanging data between Member States.

- Target population:

Officials of the competent administrations of the Member States and applicant countries, members of professional circles involved in excise products, consumers.

9.2 Grounds for the operation

- Need for a Community budget allocation, particularly in the light of the principle of subsidiarity

A contribution from the Community budget will be needed since the Member States will not be able, on their own, to establish the kind of data system involved which must be capable of fully harmonised, consistent and simultaneous operation in all Member States. To guarantee full compliance with this essential condition, the Community must therefore finance all that part of the project which involves setting up the data link between the Member States themselves.

The system could also use the Common Communications Network/Common Systems Interface (CCN/CSI) whose purpose is to provide a common platform which allows voluminous amounts of data to be transferred quickly and economically between the Member States' customs and tax administrations and between Member States and the Commission whilst guaranteeing maximum security. Using this system would reduce costs and prevent delays in putting into operation new systems such as the one for computerising the movement and surveillance of excisable products. It should be noted that the CCN/CSI platform is itself financed under the Customs 2002 and Fiscalis programmes.

- Ways and means to be used

* analysis of any similar projects carried out at Community or national level

A similar project is currently under way to computerise external Community transit (NCTS/NSTI). [10] This project aims to computerise the transmission of customs transit documents between Community customs offices. The Community is funding the data link established between the Member States whilst the latter are funding their national applications. It should also be pointed out that some basic tools would be shared by the NCTS/NSTI and the computerised system for the movement and surveillance of excisable products. With a little adaptation, it would be possible to use the list of customs offices, the thesaurus of terms and the list of codes, which would mean a substantial saving.

[10] New Computerised Transit System/Nouveau Système de Transit Informatisé.

* spin-off and multiplier effects expected

The computerised excise system would help stem a large proportion of the fraud committed under the present system based on the paper version of the accompanying administrative document. It would do so by eliminating the kinds of fraud in which forged seals are used or consignments are re-routed to a trader other than the one entered on the document - and often established in the same Member State as the consigning trader.

It would also considerably simplify the formalities to be completed by traders by ensuring the rapid and risk-free release of their guarantees because the message giving notice of the arrival of their goods at destination would be transmitted electronically.

- Main uncertainties which could affect the specific outcomes of the project

The main uncertainty factor is the human and financial resources the Member States must marshal to carry out that share of the development and deployment of the project which falls to them. However, the specific purpose of the proposal for a Council Decision to which this financial statement is to be attached is to require the Member States to give a formal undertaking in this regard.

The second factor is the purely technical aspect. To provide the expected advantages, the system must be fully available round the clock and 365 days a year and, in the event of breakdown, recovery time must be very short if trade is not to be hindered. The Member States therefore have to make every effort to comply with this requirement in respect of the part of the project for which they are responsible. The feasibility study carried out in 1999 gives the specifications with which Member States must comply.

9.3 Monitoring and evaluation of the operation

- Monitoring indicators

* for measuring completed activities:

(a) number of contracts concluded with computer companies with a view to developing and deploying the system;

(b) number of meetings held with the Member States and applicant countries;

(c) number of information and consultation seminars held, particularly with European traders' federations;

(d) number of leaflets, manuals and other tools created to help implement the information and training policy;

(e) number of documents translated.

* development and deployment objectives to be achieved:

(a) Group I activities: pre-requisites:

- reference lists drawn up;

- list of listed traders updated and incorporated;

- methods for the management and consultation of guarantees established;

- methods for the management and consultation of excise duty rates established.

(b) Group II activities: AAD electronic routing system:

- operating system specification: description of how the system is to operate in terms of function and interface modules;

- technical system specification: description of how the system is to operate in terms of technical modules and their interfaces;

- development of technical acceptance scenarios: description of the configuration of the data bases, related day-to-day handling and the expected results;

- development of validation tools: software which will allow validation of all interfaces created on the basis of the technical systems specification;

- technical acceptance of the system: using validation tools to validate the operational acceptance of the application in the Member States;

- operational acceptance of the system: using the application modules validated earlier and the acceptance scenarios to validate the results of the technical acceptance of the system;

- adoption of a new legal text applying the details of the data circuit and the content of the messages to be exchanged.

(c) Group III activities: downstream functions:

- design "wayside checks" function;

- design application for automatic risk evaluation;

- design "warnings management" function;

- design "automatic reminder" function;

- design "statistics" function;

- design "movement verification and mutual assistance" function;

- design "free-text messages" function.

- Details and frequency of planned evaluations

The computerisation project will be monitored constantly - by the Excise Committee as regards the legal aspects, by the Computerisation Subcommittee as regards the technical aspects and by the SCAC as regards the budget side.

Upon completion of the Group I activities described in the Annex to the proposal for a Decision to which this Financial Statement is attached and in the previous paragraph, i.e. two and a half years after start-up of development work, there will also be an interim report on the monitoring of the development and deployment activities. If possible, this report should already include the kind of information that would be helpful in determining the methods and criteria to be used in evaluating the functioning of the system itself.

As required by Article 8(2) of the proposal for a Decision to which this Financial Statement is attached, the final evaluation report will be presented to Parliament and the Council once work on developing and deploying the system has been completed. This report must include the method to be used for evaluating the functioning of the system.

10. ADMINISTRATIVE EXPENDITURE (SECTION III PART A OF THE GENERAL BUDGET)

10.1 Human resources

The necessary administrative resources will actually be mobilised in the light of the Commission's annual decision on allocating resources and, in particular, in the light of any additional staff and funds granted by the budget authority.

10.2 Incidence on the number of posts

(a) during the start-up stage: 2003

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(b) during the operational stage: 2004-2008

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Description of posts required for the operational stage

Title // Job description

Head of project // Grade A. Will have responsibility for managing the work of the team and in particular for coordinating organisation, planning, contractual and budget matters, the technical verification of applications and all support activities. Must be familiar with internal Commission procedures, particularly those for tenders and the budget. Must be a computer scientist.

Deputy Head of project // Grade A. Must be able to deputise for the Head of Project. As above.

Excise expert // Grade A. Will have responsibility for coordinating all matters relating to excise duties that arise in connection with the setting up and development of the computerised system, and particularly for all legal matters relating to its development and deployment. Must be an Excise specialist.

Technical expert // Grade B. Will be involved in the functional analysis tasks and will assist the national administrations with their practical application of the system.

Technical expert // Grade B. Will be involved in defining interfaces and will assist the administrations with their national applications thereof.

Technical expert // Grade B. Will assist in the development of the common technical products.

Technical expert // Grade B. Will have responsibility for coordination with national administrations.

Technical expert // Grade B. Will have responsibility for coordination with national administrations.

Secretary // Grade C. Will organise meetings with national administrations and prepare the requisite documents.

10.3 Overall financial incidence of the additional staff

(a) during the start-up stage: 2003

(EUR)

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These amounts reflect the total costs of the extra posts for 2003 .

(b) during the operational stage: 2004 - 2008

(EUR)

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These amounts reflect the total costs of the extra posts for the period 2004 - 2008 .

10.4 Increase in any other operating expenditure arising out of the project, in particular costs of committee and expert group meetings

(EUR)

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These amounts represent the total expenditure on the project for the period 2003 - 2008 .