to authorise the European Commission to open negotiations for a Customs Cooperation and Mutual Administrative Assistance Agreement (CCMAA) with the Republic of Belarus

EXPLANATORY MEMORANDUM

1.CONTEXT OF THE PROPOSAL

•Reasons for and objectives of the proposal

Over the past years, there has been progress in EU-Belarus relations and EU-Belarus bilateral trade in goods has been growing steadily. The European Union is Belarus' second main trade partner with almost a one-third share in the country's overall trade. At the same time, Belarus factories account for a substantial share (estimated to exceed 15%) of the illicit tobacco products seized by customs authorities in the EU Member States. Illicit tobacco trade costs the budgets of Member States and the EU an estimated €10 billion a year in revenue. The illicit tobacco trade also undermines the EU's and national public health policies, and thus contributes to the many smoking-related deaths every year. In 2013, the EU adopted a comprehensive strategy to fight the illicit tobacco trade, which remains relevant today. A key element in that strategy is to enhance cooperation with major source and transit countries. Therefore the proposal responds to the needs of EU Member States and their businesses for a legal framework for Customs Cooperation and Mutual Administrative Assistance with Belarus.

Due to the specific historic context, Belarus is the only country in the EU Eastern neighborhood, and the only country of the Eurasian Economic Union, without a formal legal basis for customs cooperation and mutual administrative assistance with the EU. An international agreement is therefore required to provide a legal basis for customs cooperation in particular in the areas of supply chain security and trade facilitation, and for mutual administrative assistance to prevent, investigate and combat breaches of customs legislation. The agreement with Belarus will be an appropriate tool in fighting customs fraud.

As the EU's overall relations with Belarus are evolving, now is the right moment to plug this gap in the EU's external relations on customs matters in its neighborhood. This initiative is in line with the 2016 February Council Conclusions on Belarus, stating that the EU remains open to further development of EU-Belarus relations, and to taking further steps to enhance political relations and sectoral cooperation in the appropriate context. More recently, it follows up on political contacts in the context of the EU-Belarus Coordination Group meeting on 25 April 2019 and Commissioner Oettinger's visit to Minsk in February 2019. Strengthening our engagement with Belarus is also a key element in the Action Plan adopted by the Commission in December 2018 on fighting the illicit tobacco trade 2018-2022.

This initiative is not within the Regulatory Fitness Programme (REFIT).

•Consistency with existing policy provisions in the policy area

The Commission has concluded agreements including Customs cooperation and Mutual Administrative Assistance provisions with all the countries in our Eastern Neighbourhood, as well as with all other Eurasian Economic Union Member countries: Russia, Armenia, Kazakhstan and Kyrgyzstan.

•Consistency with other Union policies

The recommendation is consistent with other Union policies.

2.LEGAL BASIS, SUBSIDIARITY AND PROPORTIONALITY

•Legal basis

Article 218(3) and (4) of the Treaty on the Functioning of the European Union (TFEU) will be the procedural legal basis. The subject matter of the agreement would be part of the Union's common commercial policy, therefore the substantive legal basis of the decisions on the signature and the conclusion of the agreement will be Article 207 TFEU.

•Subsidiarity (for non-exclusive competence)

The initiative falls under the exclusive competence of the EU (common commercial policy) according to Article 207 of the Treaty on the Functioning of the European Union (TFEU). The subsidiarity principle therefore does not apply.

•Proportionality