Proposal for a REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL amending Council Regulation (EEC) No 2913/92 establishing the Community Customs Code

(presented by the Commission)

EXPLANATORY MEMORANDUM

Point 1 (Article 4 No 14)

The purpose of this amendment is to specify

- on the one hand, that customs controls must not only ensure the correct application of customs legislation, but also of other legislation relating to the import and export of goods, and

- on the other hand, that also other authorities may be involved in such controls (e.g. veterinary, police), so that a co-ordination between theses agencies is required and a "single window" or "one stop shop" can ultimately be achieved, thus relieving importers and exporters from the requirement to have to contact different agencies for the same import or export transaction.

Point 2 (Article 4 Nos 25 - 27)

The Community Customs Code currently contains no reference to "risk", "risk management" or "authorised operator". The term 'operator' covers all parties involved in the logistical chain in international trade, including importers, exporters, transporters, and customs agents. These concepts are currently applied by all Member States, albeit using national criteria, thus creating distortions in the internal market and security loopholes. The purpose of these new provisions is to allow for the introduction of common, EU-wide criteria. These definitions complement the amended Article 13 (see point 3).

Point 3 (Article 13)

This amendment introduces an obligation of Member States to use risk analysis techniques. As long as no Community or international criteria exist, national criteria will be applied (as it is the case today). The amendment charges the Commission to establish a common risk management framework under the Committee procedure. This includes the setting up of co-ordinated and inter-linked automated support systems. The prosecution of criminal activities falling under the third pillar is not covered, as other rules apply. National risk analysis systems will continue to exist which may also use national and local criteria. Authorised operators are normally considered to be a lower risk and are therefore subjected to less controls. The possibility of performing customs controls in a third country has been introduced in case an international agreement provides for this. This would only cover exceptional situations given that, in principle, customs and other administrations should control goods on the territory for which they are competent, and exchange, where necessary and as stipulated in an international agreement, information with authorities in other countries (see point 4).

Point 4 (Article 15)

The cases in which the exchange of confidential data which the customs authorities of a Member State or the Commission have received in performing their duties under the customs legislation are currently not spelled out in Article 15, apart from the case of legal proceedings following such actions. The purpose of this amendment is to clarify that confidential data pertaining to import or export operations (including suspensive arrangements, such as transit and free zones) may be exchanged between

- the customs administrations of the Member States,

- these customs administrations and the Commission,

- the customs and the fiscal administrations of the same and different Member States (e.g. for the purposes of a VAT or excise duty refund on exportation),

- the customs and other authorities (e.g. veterinary, police) of the same or different Member States (e.g. for the purposes of advising of potentially dangerous goods),

- the customs and other administrations (e.g. security agencies) in third countries, insofar as an international agreement provides for such an exchange of information.

The provisions on data protection in force at Community and national level will, of course, apply.

Point 5 (Articles 36a and 36b)

This is the main innovation of the proposal: whereas currently the summary declaration or the customs declaration must be lodged only when the goods are presented to customs, it is proposed that a declaration must be presented before the goods arrive. This will allow for the pre-screening of cargo and an early initiation of the required level of response should the need arise. Pre-arrival declarations are already required by some Member States and some of the Community's main trading partners. Evidence from the operation of such systems indicates that the necessary shift in processes can be made by the industry and the agents involved. The main problems to be overcome are:

- the organisation of the data flows,

- the setting up of compatible IT systems,

- just-in-time deliveries without sufficient advance notice.

The Community Customs Code can therefore only provide for a general framework and must leave the practical application of pre-arrival declarations to the implementing provisions and the competent customs authorities in order to strike the right balance between increased security and trade facilitation.

It is therefore suggested that, as a basic rule, the pre-arrival declaration must be lodged 24 hours before the goods are presented to customs. Where an international agreement stipulates a different time frame, this would have to be laid down in the implementing provisions. In the implementing provisions it will be clarified that such a declaration must have a standard of detail and accuracy in the same manner as a customs declaration. Special rules would cover, inter alia,

- goods carried by travellers (exempted),

- small consignments (exempted), as long as no electronic trace and track systems and trader/customs interfaces have been introduced,

- land and air transport, as well as sea transports where the journey is shorter than 24 hours (shorter periods),

- just-in-time deliveries by authorised operators (shorter periods).

During the transitional period in which no common interface exists on a EU-wide level, or even in individual Member States, less stringent rules will have to be applied. As long as no operator/customs interface for pre-arrival information exists, Member States may waive the requirement, as long as an international agreement does not require otherwise, or request paper documents. Flexible arrangements will also be necessary for cases in which the pre-arrival declaration has been lodged at one customs office of entry, but the goods have arrived at another customs office and an interface between the two offices is still missing.

Furthermore, it should be borne in mind that the lodging of a summary declaration (e.g. ship's manifest) or an incomplete, simplified or complete customs declaration only at the time of presenting the goods to customs following their entry into the customs territory will not lead to a rejection of the declaration. The main consequence will be that the processing of such declarations will take more time and that the goods are released later than if the deadline had been respected. An operator who systematically disrespects the deadlines or gives wrong information may also be subjected to administrative sanctions or be downgraded in his status as authorised operator (see points 2 and 3). If an operator does not know at the arrival of the goods for which purpose they have been imported (this should be an exceptional case), he can place them under temporary storage or the customs warehousing procedure on the basis of the transport data. According to the proposals to be put forward under the Communication "a simple and paperless environment for customs and trade" these two arrangements will be merged (together with the other suspensive arrangements).

Points 6 - 8 (Title III of Chapter 3, Article 40, Articles 43 - 45)

The provisions on the summary declaration (currently Articles 43 to 45) have been displaced to Articles 36a and 36b in order to allow for pre-arrival declarations. Consequently, Title III of Chapter 3 needs to be amended and Articles 43 to 45 need to be deleted.

The current wording of Article 40 privileges free zones in that in certain cases no presentation of the goods to customs and no summary declaration is required. The purpose of the amendment is to close this security loophole. Authorised operators may, however, be relieved from the requirement to present the goods to customs, provided they have lodged the declaration stipulated under Articles 36a and 36b.

Points 9 and 10 (Articles 170 (2) and 176 (2))

The addition of letter d to Article 170 (2) aligns the free zone rules on the new wording of Article 40. The amendment of Art. 176 (2) introduces an obligation for a pre-arrival and pre-departure declaration also with regard to goods directly brought into or out of a free zone, as stipulated under Articles 40, 182 a and 182 b (see points 8 and 13).

Point 11 (Article 81)

In Article 181 a reference to Title V has been added in order to cover the new Articles 182a and 182b.

Point 12 (Article 182 (3))

Given that in all cases of re-exportation a pre-departure declaration will be required (apart from the cases where this requirement has been waived), the notification currently stipulated under Article 182 (3) is no longer necessary and can, therefore, be deleted.

Point 13 (Articles 182a and 182b)

Articles 182a and 182b correspond with Articles 36a and 36b.

The main difference is the following:

- On importation, the first customs office confronted with the goods is the office of entry (i.e. the first office passed after the goods have crossed the Community frontier); this office must therefore receive the pre-arrival declaration in order to be able to decide whether security checks are necessary.

- On exportation, the first customs office confronted with the goods is the office of export (i.e. the office responsible for the place where the exporter is established or where the goods are packed or loaded for export, Art. 161 (5)). This office must therefor receive the pre-departure declaration (which is normally the incomplete, simplified or complete customs declaration) in order to be able to decide whether security checks are necessary.

Article 2 (entry into force)

This Article foresees that the amendments enter into force on the seventh day after publication in the Official Journal. This poses no problem with regard to the definitions (Art. 4), risk management as such (Art. 13), the exchange of information (Art. 15), and the extension of the normal rules to free zones (Articles 170, 176, 181). The implementation of pre-arrival and pre-departure processing systems and the setting up of automated co-ordinated and inter-linked support systems for risk management may need some time in Member States who do not operate such systems yet. It is therefore proposed that Articles 13, 36a, 36b, 182a and 182b, insofar as they require electronic systems, must be in place two years after the entry into force of this Regulation.

2003/0167 (COD)

Proposal for a REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL amending Council Regulation (EEC) No 2913/92 establishing the Community Customs Code

THE EUROPEAN PARLIAMENT AND THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty establishing the European Community, and in particular Articles 26, 95, 133 and 135 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,

Whereas:

(1) Council Regulation (EEC) No 2913/92 of 12 October 1992 establishing the Community Customs Code [3], as last amended by Regulation (EC) No 2700/2000 [4] lays down the rules for the customs treatment of goods that are imported or to be exported.

[3] OJ L 302, 19.10.1992, p. 1.

[4] OJ L 311, 12.12.2000, p. 1.

(2) It should be specified under which conditions information provided by economic operators to customs may be disclosed to other authorities in the same Member State, other Member States, to the Commission, or to authorities in third countries.

(3) It is necessary to establish an equal level of customs controls in the Community and to ensure a harmonised application of customs controls by the Member States. It should be reminded that Member States are mainly responible for these controls. Such controls should be based on commonly agreed standards and risk criteria for the selection of goods and economic operators in order to minimise the occurrence of risks to the Community and its citizens. Member States and the Commission should therefore introduce an EU risk management framework to support a common approach so that priorities are set effectively and resources are allocated efficiently with the aim of maintaining a proper balance between customs controls and the facilitation of legitimate trade. Such a framework should also provide for common criteria and harmonised requirements for authorised operators and ensure a harmonised application of such criteria and requirements. The establishment of a risk management framework common to all Member States should not prevent them from controlling goods by spot-checks.

(4) Risk-related information on import and export goods should be shared between the competent administrations of the Member States and the Commission. The information to be exchanged will be general control information related to goods rather than operator or consignment specific information. To this end, a common, secure system should be set up, enabling the competent authorities to access, transfer and exchange this information in a timely and effective manner. Such information may also be shared with third countries where an international agreement provides for this.

(5) In order to allow for appropriate risk-based controls, it is necessary to establish the requirement of pre-arrival or pre-departure information for all goods entering into or leaving the Community customs territory, except for goods passing through by air or ship without a stop within this territory. Such information should be available before the goods enter into or leave the Community customs territory. Different timeframes and rules can be set according to types of goods, types of transport and types of economic operator. This requirement must also be introduced with regard to goods brought into or out of a free zone in order to avoid security loopholes.

(6) Regulation (EEC) No 2913/92 should therefore be amended accordingly.

HAVE ADOPTED THIS REGULATION

Article 1

Regulation (EEC) No. 2913/92 shall be amended as follows:

1. Article 4 No 14 is replaced by the following:

"(14) 'Customs controls' mean specific acts performed by the customs authorities or co-ordinated with them, in order to ensure the correct application of customs legislation and other legislation relating to the import or export of goods, such as examining goods, verifying the existence and authenticity of documents, examining the accounts of undertakings and other records, inspecting means of transport, inspecting luggage and other goods carried by or on persons and carrying out official inquiries and other similar acts with a view to ensuring that customs rules and, where appropriate, other provisions applicable to goods subject to customs supervision are observed."

2. In Article 4 the following subparagraphs shall be added:

"(25) 'Risk' means: the likelihood of an event that may occur in the international movement and trade of goods threatening the Community's security and safety, posing a risk to public health, environment and consumers, including prevention of the correct application of Community or national measures concerning the goods entering into or exiting from the Community.

(26) 'Risk management' means: the systematic identification and implementation of all measures necessary for limiting exposure of risks. This includes activities such as collecting data and information, analysing and assessing risk, prescribing and taking action and regular monitoring and review of the process and its outcomes, based on international, Community and national sources and strategies.

(27) 'Authorised economic operator means an actor in the trade supply chain authorised by the customs authorities who meets the criteria specified by the procedure of the Committee, including having an appropriate record of compliance with customs requirements, a satisfactory system of managing his commercial records and appropriate physical security measures. In this way, the authorised operator offers every guarantee necessary for the proper and secure conduct of operations and can thus benefit from certain simplifications, provided specific conditions are met. The status of the authorised economic operator will be granted for a certain period and will be periodically reviewed.'

3. In Article 13 the following subparagraph shall be added:

"Customs controls should be based on risk analysis, with the purpose of identifying and quantifying the risks and developing the necessary measures to assess the risks, on the basis of criteria developed at national and, where available, Community or international level. A common risk management framework shall be determined according to the Committee procedure, laying down the organisational framework and the procedure for establishing common criteria and priority control areas. Member States and the Commission shall set up co-ordinated and inter-linked automated support systems for the implementation of risk management. Customs controls for the purpose of the correct application of Community legislation may be carried out in a third country where an international agreement provides for this."

4. Article 15 shall be replaced by the following:

"Article 15

1. All information which is by nature confidential or which is provided on a confidential basis shall be covered by the obligation of professional secrecy. It shall not be disclosed by the competent authorities without the express permission of the person or authority providing it. The communication of information shall, however, be permitted where the competent authorities are obliged or authorised to do so pursuant to the provisions in force, particularly in respect of data protection, or in connection with legal proceedings.

2. Customs, fiscal and other competent authorities may communicate data received in the context of importation or exportation of goods between themselves, between Member States, and the Commission where this is required for the purposes of the procedure concerned, in order to protect the security of citizens and businesses, or to detect or prevent irregularities. Communication of confidential data to administrations of third countries is only admitted in the framework of an international agreement."

5. Under Chapter I (Entry of goods into the customs territory) the following Articles shall be inserted:

"Article 36a

1. Before goods are brought into the customs territory of the Community, a summary declaration must be lodged at the customs office of entry. The lodging of a notification and access to the summary declaration data in the operator's electronic system may replace the lodging of a summary declaration, notwithstanding the legal obligation of the declarant to lodge a customs declaration.ere another customs office than the customs office of entry receives such a declaration, it communicates it without delay and electronically to the customs office of entry.

2. Where a customs declaration is required following the entry of the goods into the customs territory of the Community, the electronic customs declaration replaces the summary declaration, provided it is lodged within the timeframe stipulated for the summary declaration. Where an incomplete or simplified declaration is used, it must contain the necessary data.

3. The normal deadline for lodging a summary declaration is 24 hours before the goods are presented to customs, except where transport time is shorter or where an international agreement provides for a different timeframe. The procedure of the Committee shall be used to determine

- a common data set and format of the summary declaration, using wherever possible international standards,

- special deadlines for certain types of traffic and economic operators, and

- the conditions under which such requirement may be waived, notably with regard to authorised economic operators.

4. The goods cannot be released before the summary declaration or the customs declaration has been presented.

Article 36b

1. The summary declaration shall be made in electronic form according to the specification determined under the procedure of the Committee. Commercial, port or transport information may be used, provided it contains the required data. Customs authorities may accept paper-based summary declarations in exceptional circumstances and only within a period of two years after the entry into force of the present regulation.

2. The summary declaration shall be lodged by

(a) the person who brings the goods into the customs territory of the Community or by any person who assumes responsibility for carriage of the goods following such entry; or

(b) the person in whose name the persons referred to in subparagraph (a) act; or

(c) a representative within the meaning of Article 5 of one of the persons referred to in subparagraphs (a) and (b)."

6. Title III of Chapter 3 shall be changed to "Unloading of goods presented to customs".

7. Article 40 shall be replaced by the following:

"Article 40

Goods entering into the customs territory of the Community shall be presented to customs by the person who brought them into that territory or, if appropriate, by the person who assumes responsibility for carriage of the goods following such entry, with the exception of means of transport only passing through the territorial waters or the airspace of the customs territory without a stop within this territory. Authorised economic operators can be relieved from the requirement to present goods to customs, provided they have lodged a summary declaration or a customs declaration in accordance with Articles 36a and 36b."

8. Articles 43 to 45 shall be deleted

9. Article 170 (2) shall be replaced by the following:

"2 Goods shall be presented to the customs authorities and undergo the prescribed customs formalities where:

(a) they have been placed under a customs procedure which is discharged when they enter a free zone or free warehouse; however, where the customs procedure in question permits exemption from the obligation to present goods, such presentation shall not be required;

(b) they have been placed in a free zone or free warehouse on the basis of a decision to grant repayment or remission of import duties;

(c) they qualify for the measures referred to in Article 166 (b);

(d) they enter into a free zone or free warehouse directly from outside the Community customs territory, except where an operator has been authorised not to present the goods and has lodged a summary declaration or a customs declaration in accordance with Articles 36a and 36b."

10. Article 176 (2) shall be replaced by the following:

"2. Where goods are transhipped within a free zone, the documents relating to the operation shall be kept at the disposal of the customs authorities. The short-term storage of goods in connection with such transhipment shall be considered to be an integral part of the operation.

For goods brought into a free zone directly from outside the Community customs territory or out of a free zone directly leaving the Community customs territory, a summary declaration must be lodged in accordance with Articles 36a and 36b or 182a and 182b."

11. Article 181 shall be replaced by the following:

"Article 181

The customs authorities shall satisfy themselves that the rules governing exportation or re-exportation as well as the provisions of Title V are respected where goods are exported or re-exported from a free zone or free warehouse."

12. In Article 182 (3) first sentence the words "re-exportation or" are deleted.

13. Under Title V (Goods leaving the customs territory of the Community) the following Articles shall be inserted:

"Article 182a

1. Before goods are brought out of the customs territory of the Community, a summary declaration must be lodged at the customs office of export 24 hours before the goods are presented at the customs office of export, except where an international agreement provides for a different timeframe. The lodging of a notification and access to the summary declaration data on the economic operator's electronic system may replace the lodging of a summary declaration, notwithstanding the legal obligation of the declarant to lodge a customs declaration.

2. Where a customs declaration is required for the export or re-export of goods, the electronic customs declaration replaces the summary declaration, provided it is lodged within the timeframe stipulated for the summary declaration. Where an incomplete or simplified declaration is used, it must contain the necessary data.

3. The procedure of the Committee shall be used to determine

- a common data set and format of the summary declaration, using wherever possible international standards,

- special deadlines for certain types of traffic and authorised economic operators, and

- the conditions under which it must be lodged, and the conditions under which such requirement may be waived, notably with regard to authorised economic operators.

Article 182b

1. The summary declaration shall be made in electronic form according to the specifications determined under the procedure of the Committee. Customs authorities may accept paper based summary declarations in exceptional circumstances and only within a period of two years after the entry into force of the present regulation. Commercial port or transport data including access to the operator's electronic system may be used provided it contains the required data.

2. Where no customs declaration is made, a summary declaration shall be lodged by:

(a) the person who brings the goods out of the customs territory of the Community or by any person who assumes responsibility for carriage of the goods; or

(b) the person in whose name the persons referred to in subparagraph (a) act; or

(c) a representative of one of the persons referred to in subparagraphs (a) and (b)."

Article 2

This Regulation shall enter into force on the seventh day following that of its publication in the Official Journal of the European Union. Electronic declaration and automated support systems for the implementation of risk management, as stipulated in Articles 13, 36a, 36b, 182a and 182b, as well as implementing provisions to the present regulation must be in place two years after the entry into force of this Regulation.

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

Done at Brussels,

For the European Parliament For the Council

The President The President

>TABLE POSITION>

IMPACT ASSESSMENT FORM THE IMPACT OF THE PROPOSAL ON BUSINESS WITH SPECIAL REFERENCE TO SMALL AND MEDIUM-SIZED ENTERPRISES( SMEs)

Title of proposal

Proposal for a REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL amending Council Regulation (EEC) No 2913/92 establishing the Community Customs Code (presented by the Commission)

Document reference number

The proposal

1. The Commission has exclusive competence for the proper functioning of the customs Union. Given the current political situation and the threat of terrorism accompanied by enhanced security requirements as far as world trade is concerned, as well as the opportunity to negotiate a satisfactory agreement with the US on the CSI dossier, it is necessary to introduce new legal obligations for traders in the Customs Code. This will also have the side effect of providing a credible basis for the negotiations with the US, in the context of the Container Security initiative.

Although the Comission envisages a complete review of the Customs Code following the communication on the electronic customs initiative, there is a need to urgently take several types of measures to address security requirements, given the current world political situation (and risk of terrorist attacks). This will also enable the Commission to have a legal basis for elaborating a risk management system at Community level in order to ensure an equal level of controls in the Member States.

Taking such measures, already necessary today, is even more crucial in view of enlargement, as the security controls in big ports like Antwerp and Rotterdam depend also on the quality and efficiency of the customs controls in the Member States where the export formalities are completed. If we do not act, security in trade might be compromised with negative effects for traders and citizens inside and outside the Community.

The impact on business

2. Who will be affected by the proposal?

Companies who import and export goods from and to third countries;

- which sectors of business? importers, exporters, freight forwarders, customs agents.

- which sizes of business (what is the concentration of small and medium-sized firms)? it is estimated that more than 30% of SMEs have international business transactions.

- are there particular geographical areas of the Community where these businesses are found? in every Member State.

3. What will business have to do to comply with the proposal?

Give pre-arrival (pre-departure) information to customs before importation on exportation of goods within a certain deadline.

4. What economic effects is the proposal likely to have?

- on employment : none

- on investment and the creation of new businesses: none

- on the competitiveness of businesses

It will ensure faster release of goods for authorised traders and thus reduce time take up by customs formalities. On the other hand, it would require more accurate data from the trader before importation/exportation and this may notably create an extra burden. Therefore, a transitional phase is foreseen.

5. Does the proposal contain measures to take account of the specific situation of small and medium-sized firms (reduced or different requirements etc)?

Facilitations will depend on the level of compliance, SME can use service providers.

Consultation

6. List the organisations, which have been consulted about the proposal and outline their main views.

Through the Trade Contact Group set up for consultation purposes, the following associations have been consulted:

- FTA (Foreign Trade Association)

- UNICE

- EUROCOMMERCE

- EUROCHAMBERS

- EUROPEAN SMALL BUSINESS ALLIANCE

- CLECAT

- OCEAN (organisation des Communautés Européenne des Avitailleurs de Navires)

- US Chamber of Commerce

- Airlines representatives.

Although they were not absolutely negative to the principle, they are worried about the pre-arrival and pre-departure deadlines and asked for waivers for certain types of transport and certain types of traders. Discussion is ongoing and exceptions will be foreseen at the level of the Customs Code implementing provision.