Proposal for a Regulation of the European Parliament and of the Council amending Council Regulation (EEC) No 2913/92 establishing the Community Customs Code
Date: 2003-07-24
Institutions: European Commission
Subjects: EU law, administrative code, customs regulations, customs territory (EU), customs union, simplification of formalities

COMMISSION OF THE EUROPEAN COMMUNITIES

Brussels, 24.07.2003
COM(2003) 452 final

2003/0167 (COD)

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

a simple and paperless environment for Customs and Trade

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

on the role of customs in the integrated management of external borders

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)

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

a simple and paperless environment for Customs and Trade

2

CONTENT

Background.......................................................................................................................... 4

Introduction ......................................................................................................................... 5

1.

2.

2.1.

2.2.

2.3.

3.

3.1.

3.2.

4.

Putting in context .................................................................................................. 7

The challenges....................................................................................................... 8

What does business expect from customs? ........................................................... 9

What does society expect from customs? ............................................................. 9

Conclusion........................................................................................................... 10

The objectives ..................................................................................................... 10

Radically simplify and modernise legislation and procedures............................ 10

Ensure interoperability through a convergent IT framework.............................. 11

How to achieve the objectives? - Actions to be taken......................................... 12

4.1.

Simplify customs legislation, integrating security aspects.................................. 12

4.1.1.

Setting the rules: electronic declaration and electronic exchange of data........... 13

4.1.2. Reduce significantly the number of existing customs treatments ....................... 13

4.1.3. A single guarantee............................................................................................... 14

4.1.4.

Single European Authorisation ........................................................................... 14

4.1.5. Review of the customs debt provisions and the roles of frontier and inland

customs offices.................................................................................................... 14

4.1.6. Redefinition of the roles of traders and freight forwarders ................................. 15

4.1.7.

Providing a legal basis for new tools and working methods............................... 17

4.1.8.

Electronic signature, electronic documents, electronic archiving....................... 17

4.1.9.

Standardise and harmonise data requirements .................................................... 18

4.2.

Rationalise business processes through the use of modern technology .............. 18

4.2.1.

Ensure customs/customs and customs/trade interfaces ....................................... 18

4.2.2.

Ensure secure internet payment systems............................................................. 19

4.2.3.

Single automated access point to the EU for trade.............................................. 19

4.2.4.

Transparency ....................................................................................................... 19

Conclusion......................................................................................................................... 20

Annex 1:Action plan ......................................................................................................... 22

Annex 2:Main costs and benefits for traders and administrations .................................... 34

3

BACKGROUND

This  Communication  follows  on  from  the  Council  Resolution  on  the  simplification  of
customs procedures1, as well as the earlier Commission Communication on a strategy for
the  Customs  union2  and  the  related  Council  Resolution3.  It  responds  to  the  Council’s
request  to  draw  up  an  action  plan  for  the  simplification  and  rationalisation  of  customs
regulations and procedures and the use of efficient working methods such as information
technology, risk analysis and advanced auditing systems. It aims also at implementing in
the  customs  area  the  objectives  of  the  e-Europe4  and  the  better  regulation5  initiatives.
Finally, it takes account of the changing roles of border and inland customs offices after
the  forthcoming  enlargement.  Alongside,  a  Commission  Communication  on  the  role  of
customs with regard to the security at the external border6 is submitted.

1

2

3

4

5

6

OJ C 332 1996, p. 1.
COM(2001)51 final, 08.02.2001
OJ C 171 2001, p.1.
COM(2002) 263.
COM(2001)726  final  (Communication  from  the  Commission  on  simplifying  and  improving  the
regulatory environment, Brussels 05.12.2001)
COM(2003) 452 final, 24.07.2003.

4

                                                
INTRODUCTION

Globalisation and  liberalisation  of  trade,  the  increased  volume  of  trade  and  just-in-time
delivery, the sophisticated nature of products and transport services, as well as the growth
of  electronic  commerce  have  continuously  thrown  down  new  challenges  to  Customs
administrations.7

Moreover, the need of our society to be protected against dangerous or harmful products
and  the  necessity  after  the  events  of  September  11th,  2001,  to  better  integrate  security
aspects into customs procedures demonstrate the urgency to find solutions that can marry
security  concerns  and  trade  facilitation.  Although  these  seem  to  be  two  contradictory
goals,  the  use  of  information  technology  (IT)  tools  combined  with  modern  risk-
management techniques is the adequate response to such developments. However, to be
efficient, these techniques require the availability of certain import/export data at an early
moment  (wherever  possible  before  the  arrival  of  the  goods  at  the  border)  and  their
transmission  or  availability  to  customs  and  other  agencies  responsible  at  the  border
through electronic means using a single channel of communication.

In  addition,  the  level  of  customs  intervention  must  be  equivalent  throughout  the
European  customs  union,  and  risk  analysis  and  risk  assessment  must,  therefore,  be
organised  in  a  way  that  takes  into  account  the  dimension  of  the  Internal  Market.  This
aspect  is  of  particular  importance  in  the  light  of  the  forthcoming  enlargement  with  a
displacement  of  a  major  part  of  the  land  border  of  the  European  Union.  Creating  a
paperless  environment  for  the  movement  of  goods,  supplemented  by  limiting  border
controls mainly to security aspects and shifting other controls to the customs authorities
responsible  for  the  trader’s  premises,  thus  minimising  the  risk  of  fraud  and  non-
compliance will constitute a first part of an answer to that challenge.

In  the  broad  European  context,  e-Europe8  has  now  become  a  political  priority  and
governments have agreed to go on-line by the year 2005, in order to better serve citizens
and ensure better governance.

It  is  only  logical  and  in  the  spirit  of  the  customs  union,  that  customs  seizes  this
opportunity to ensure a simplified and paperless environment for trade and thus give an
example of e-government at the level of the customs union.

Sharing  the  same  legitimate  concerns,  Member  States  have  developed  their  own
individual  strategies  for  creating  an  electronic  environment  for  customs,  taking  into
account national practices and requirements. However, by definition this has resulted in
different IT solutions and perhaps different approaches to the implementation of customs
rules  and  procedures,  while  maintaining  old  barriers  and  potentially  introducing  new
ones (e.g. digital barriers)  to  the  Single  Market  and  undermining  an  equal  treatment  of
economic operators.

Traders  operating  in  more  than  one  Member  State  have  to  comply  with  different
conditions  for  electronic  access  to  customs,  generating  unnecessary  costs  and
jeopardising the functioning of the Internal Market. Even traders established in only one

7

8

See  Communication  from  the  Commission  to  the  Council,  the  European  Parliament  and  the
Economic  and  Social  Committee  concerning  a  strategy  for  a  Customs  Union,  COM(2001)  51
final, 08.02.2001.
COM (2002) 263 final, p.10.

5

                                                
Member State but importing or exporting goods through the territory of another Member
State  face  difficulties  because  of  the  lack  of  common  data  requirements  and  common
interfaces.  Electronic  communication  between  customs  administrations  is  equally
hampered  by  the  lack  of  common  standards  (apart  from  the  new  computerised  transit
system - NCTS). The forthcoming enlargement will further accentuate this situation and
create additional burdens.

In  addition,  current  customs  procedures  have  become  old  fashioned,  as  they  are  too
complicated and based on the use of paper documents. It is not cost effective to maintain
the  many  variants  of  customs  procedures  reflecting  a  paper-based  environment  and
relatively high duty rates and to develop IT solutions for procedures that can no longer be
economically justified. Furthermore, movements of goods across several Member States
cannot  be  effectively  monitored  by  customs  without  common  interfaces  and  data
elements.

As Member States alone cannot create the necessary legal and IT environment, they need
the Commission to act as a “catalyst” to ensure that the legal and operational framework
is appropriate to the creation of a simplified and paperless environment for customs and
traders  and  that  interoperability  between  existing  IT  systems  is  achieved.  Compliant
traders should be able to operate in a “business friendly “ environment in which controls
ensuring the protection of citizens and businesses are performed in the most effective and
least burdensome manner.

The  European  Commission  invites  the  Council  and  the  European  Parliament  to
endorse the following strategic goals:

(cid:1)  Customs  procedures  are  fully  revised  and  radically  simplified,  integrating  modern

techniques, including the extensive use of IT9 and of risk analysis;

(cid:1)  Customs work is organised in such a way that traders can benefit from the dimension
of the Internal Market, i.e. irrespective of the place where a customs procedure begins
and where it ends.

(cid:1)  Customs intervention must ensure that the Internal Market functions properly and that

no barriers, including those of a digital nature, are introduced or maintained.

(cid:1)  Customs  controls  are  of  equivalent  intensity  and  reliability  at  the  EU’s  external
borders, especially where the protection of our society and its security is at stake; such
controls  are  normally  based  on  pre-arrival  and  pre-departure  information;  other
controls are normally performed on the basis of periodic declarations and audits at the
trader’s premises. This requires common risk management.

(cid:1)  Customs IT systems operated by Member States offer everywhere the same facilities
to traders and are fully inter-operational, taking into account the role of the European
customs union as being at the heart of the Internal Market.10

9

10

This corresponds to a request made by the Council already in 1996 (OJ 1996 n° C 332, p. 1), and
which,  so  far,  has  been  partially  implemented  with  the  reform  of  the  customs  procedures  with
economic impact.
This corresponds to a request made by the Council in the Resolution on a strategy for the Customs
Union (OJ C 171 2001, p. 1).

6

                                                
This communication aims at seeking the political backing from both the Council and the
European  Parliament  to  implement  these  objectives;  at  the  same  time  it  explains  the
framework  and  the  milestones  for  common  action  between  the  Commission,  Member
States (current and future), and traders in order to achieve the new simplified paperless
environment for customs and traders.

1.

PUTTING IN CONTEXT

Both  at  European  level,  as  well  as  at  international  and  national  level,  efforts  are  being
made and initiatives taken to facilitate legitimate trade by using IT and by improving and
simplifying legislation.

The  Sevilla  summit  in  June  2002  has  endorsed  two  important  political  initiatives:  “e-
Europe” and “better regulation”.

The  e-Europe  2005  initiative11  aims  at  providing  a  favourable  environment  to  boost
productivity,  modernise  public  services,  create  jobs,  in  order  to  make  Europe  the  most
competitive  and  dynamic  knowledge  based  economy.  Some  of  the  key  targets  of  this
initiative are:

(cid:1)  interactive public services (e-government), accessible for all and offered on multiple
platforms. This requires an agreed interoperability framework to support the delivery
of pan-European e-government services to citizens and enterprises;

(cid:1)  a review of legislation affecting e-business.

The “better regulation” initiative, which is one of the commitments of the White Paper
on European Governance,12 aims at simplifying European legislation  in  order  to  reduce
the cost of doing business in Europe and increase legal certainty for citizens.

Customs is a key area in this context: privileging electronic transmission of harmonised
data  through  common  interfaces  will  allow  traders  to  avoid  numerous  declarations  to
different  agencies at  the borders  with  often similar or  even  the same  data.  At  the  same
time, all requirements in relation to importation and/or exportation (e.g. phyto-sanitary,
health, environment etc.) could be channelled through one single entry point/gateway.

At  international  level,  trade  facilitation  and  the  use  of  IT  for  customs  procedures  are
part of the political agenda, both in the WTO and in the WCO, as well as in the context
of bilateral agreements the Community has concluded or is currently negotiating.

Following the WTO Doha Ministerial Declaration, trade facilitation is an integral part of
the  current  WTO  work  programme.  Simplification  of  customs  rules,  use  of  modern
technology,  and  transparency  are  main  components  of  trade  facilitation.  If  the
Community wants to remain a key player in pushing for trade  facilitation worldwide, it
must itself be at the forefront of state of the art customs handling.

In  addition,  the  WCO  Customs  Data  Model  provides  a  common  understanding  on
customs information requirements. In line with the revised Kyoto Convention,13 a global

11

12

13

COM(2002) 263 final, 28.5.2002
COM (2001) 428 final, 25.7.2001
OJ L86, 2.4.2003, p. 3.

7

                                                
standard exists for the implementation of customs provisions dealing with initial reduced
electronic  data  requirements  and  subsequent  submission  of  periodic  declarations  and
supporting documents.

It is therefore essential that any initiative at Community level aiming at simplifying and
harmonising  customs  procedures  and  thus  facilitating  trade  takes  full  account  of
developments at international level.

The  current  context,  both  at  European  and  international  level,  provides  a  unique
opportunity  for  simplification  and  automation  in  the  customs  field.  It  is  therefore
important  to  seize  this  opportunity  to  set  the  objectives  and  to  identify  the  means  to
achieve  a  simpler and  paperless  environment  for  customs  in  which  economic  operators
do  not  have  to  suffer  from  the  fact  that  currently  15  and  soon  25  different  national
administrations implement Community legislation.

2.

THE CHALLENGES

Customs  administrations  nowadays  have  to  face  additional  challenges  in  carrying  out
their tasks, due to apparently conflicting new requirements by traders and society. They
have to effectively manage a greater volume of goods crossing borders, at a faster rate,
and with increasing pressure to reduce costs and delays. All this whilst dealing with an
ever larger number of serious controls issues, involving environmental, health protection
and security issues, etc.14

Traditionally,  the  most  important  role  of  customs  has  been  collecting  customs  and
agricultural duties and thus contributing to the Community budget; its involvement in the
collection of value added tax and excise duties for Member States’ budgets still remains a
major  task.  Today  customs  is  also  a  central  part  of  the  globalisation  process  and  a
catalyst to the competitiveness of countries and companies, as it plays a key role in the
monitoring and management of international trade.

Customs services are the first line of defence for screening of both passengers and freight
of third country origin, as well as for the detection of illegal importations of animals and
animal products and infringements of the veterinary rules.

An  equally  important  role  of  customs  is  enforcement.  They  are  the  gatekeepers  tasked
with  the  responsibility  of  guarding  against  any  dangerous  or  even  illegal  activity  that
might  damage  the  well  being  of  our  society,  and  that  of  our  trading  partners.  The
enforcement  actions  of  customs  services  goes  well  beyond  the  border  inspection  posts
and cover the whole territory of the Community.

Both  business  and  society  have  important  expectations  with  regard  to  customs
administrations.

14

Commission  Communication  “towards  an  integrated  management  of  the  external  borders  of  the
member  states  of 
the  European  union”,COM(2003)  233  final,  7.5.02,and  Commission
Communication  concerning  the  security  of  the  external  frontiers,  COM(2003)  452  final,
24.07.2003.

8

                                                
2.1.

What does society expect from customs?

Notwithstanding their traditional revenue role, customs administrations play a major role
in protecting the society.

Customs  fosters  the  EU  economy  where  it  needs  protection,  for  example,  against
dumped, subsidised or counterfeit goods.

Customs  services  are  acting  not  only  for  the  protection  of  the  public  health  from
substances  dangerous  to  health  (e.g.  dioxin,  drugs,  hormones)  but  also  to  ensure  the
protection  of  the  environment  (radioactivity,  waste)  and  of  endangered  species  (CITES
Convention).

Moreover,  customs  acts  against  criminal  activities,  such  as  child  pornography,  illegal
trade  in  arms  or  dual-use  items,  money  laundering  and  the  circumvention  of
international sanctions (embargoes).

Customs is also protecting society’s economic interests by fighting fraud (in the field of
own  resources,  VAT  and  excise  duties)  and  by  ensuring  the  correct  application  of
agricultural  or  commercial  policy  instruments  (export  refunds,  antidumping  duties,
export  and  import  licences).  The  customs  declaration  is  the  key  element  for  statistics
which  allow  traders  to  elaborate  their  market  strategy  and  Member  States  and  the
Commission to prepare negotiations with their trading partners.

Finally,  customs  contributes  to  regional  integration  through  the  promotion  of
preferential trade links between countries and regions, thus enhancing their prosperity.

2.2.

What does business expect from customs?

Supply chain management and collaboration has reduced delivery times enormously with
the support of IT applications linking all actors involved. If the customs process stays out
of this circuit, it is a stumbling block to just-in-time delivery.

Against  this  new  frame  of  reference,  it  is  natural  for  the  business  sector  to  also  expect
benefits,  including  better  efficiency,  better  services  and  higher  productivity  from
customs.

Transport costs, the regulatory environment, easy access to information, the predictability
of  the  total  transaction,  including  border  controls  involving  different  agencies,  all  play
their part in creating a competitive advantage and new opportunities for business.

Strategic partnership

Customs  administrations,  being  a  critical  link  (or  obstacle)  in  the  supply  chain,  are
expected  to  facilitate  trade  transactions.  The  business  sector  has  a  vital  interest  in
forming a strategic partnership with customs.

Short and predictable release times

The  demand  for,  and  ability  to  supply,  rapid  deliveries  has  been  greatly  increased  by
multimodal  transport  and  electronic  commerce,  and  is  reflected  in  globally  integrated
just-in-time  supply  production  and  distribution  systems.  Under  these  circumstances

9

simple,  predictable  and  uniform  customs  controls  and  procedures  involving  different
agencies are an imperative.

EU wide level playing field

Traders  need  a  predictable  and  transparent  regulatory  and  operational  framework  in
which the law is interpreted in a uniform way throughout the Community and customs
practices are similar, thus putting the economic operators on an equal footing.

Moreover, business wants to avoid unexpected loss of time when launching its products
on the Single Market. A single entry point for customs declarations and other formalities
(instead  of  multiple  communication  channels  to  different  authorities/agencies)  for  all
requirements related to import/export would help to achieve this objective.

Reduction of bureaucracy; further simplification for compliant traders

The  business  community  expects  that  necessary  controls  (legitimate  and  well-founded)
do  not  result  in  cumbersome  and  complicated  procedures,  thus  increasing  costs.
Compliance  should  be  accompanied  by  further  simplification.  The  use  of  risk  analysis
techniques, applied in the same manner throughout the Community,  reduces the burden
of controls.

Coherent legislation

Importers  and  exporters  do  not  only  have  to  comply  with  customs  legislation  but  also
with  tax,  agricultural,  commercial  policy,  environmental  and  health  requirements.  The
application of such requirements needs to be  made  more  coherent,  in  order to  facilitate
trade, reduce errors, and increase compliance.

2.3.

Conclusion

Customs  authorities  are  more  than  ever  facing  the  potentially  contradictory  role  of
ensuring facilitation and enforcement. In addition, they need to adjust to new patterns of
trade and technology.

3.

THE OBJECTIVES

The  only  response  on  how  to  deal  with  the  divergent  expectations  and  of  applying  a
growing  number  of  controls  to  protect  the  Community’s  financial,  social,  security  and
business interests whilst at the same time facilitating legitimate is twofold:

3.1.

Radically simplify and modernise legislation and procedures

A re-engineering of procedures allows the use of modern tools and technology which will
promote a uniform application of the law, thus reducing costs for business and the risk of
error.

Therefore a framework needs to be created in which:

(cid:1)  the large variety of the current customs regimes and special rules is reduced to some
basic procedures, such as importation, exportation and suspensive arrangements, with

10

a maximum of common rules and data requirements, and special rules only for cases
where a strong economic justification for an exception from the general rules exists;

(cid:1)  a quick release of goods is the rule where a trader has provided before the arrival or
the  departure  of  the  goods  the  information  necessary  for  risk-based  controls  on  the
admissibility of the goods; fiscal and trade policy controls being primarily performed
by  the  customs  office  responsible  for  the  traders  premises,  where  the  customs  and
fiscal debt is normally incurred;

(cid:1)  all  transactions  between  the  trader  and  the  administration  can  and  are  normally

handled electronically;

(cid:1)  Community customs  administrations act as if they  were  a  single  administration;  this
involves  the  possibility  of  exchanging  information  between  traders  and  customs
authorities in any Member State in the same way, as well as between these authorities,
the granting of authorisations valid throughout the Community within strict deadlines,
and  the  use  of  common  procedural  rules,  interfaces,  data  requirements  and  risk
criteria;

(cid:1)  customs  administrations  are  able  to  share  data  electronically  with  other  public
authorities for the correct application of fiscal, agricultural, commercial, health, phyto
sanitary and other measures applied at importation or exportation, so that eventually a
single window solution can be achieved.

Current  customs  rules,  formalities  and  systems  do  not  yet  take  full  account  of  these
requirements. Under the new rules, and in respect of the principles of a customs union, it
should not make a difference whether a customs transaction affects only the territory of
one Member State or that of several Member States. After enlargement most imports and
exports may fall under the latter category anyway.

3.2.

Ensure interoperability through a convergent IT framework

Information  and  documentation  are  key  elements  in  the  control  of  international  cross-
border  trade.  In  an  interconnected  electronic  environment  these  controls  will  normally
include  trader-to-customs  information  exchange  prior  to  the  arrival  or  departure  of  the
goods  in  order  to  provide  the  necessary  data  for  security  checks  as  well  as  acceptable
release times.

Member  States  have  already  invested  significantly  in  the  development  of  IT  systems.
However,  because  of  the  different  existing  systems  (comparable  to  the  situation  before
harmonisation the national customs legislation) the different sets of rules and data offset
the  advantages  of  the  harmonisation  achieved  so  far,  notably  because  of  a  lack  of
interoperability.

It  is  therefore  essential  to  introduce  interfaces  between  existing  and  planned  national
systems  and  to  create  a  common  and  single  interface  towards  trade.  This  implies  the
introduction of a convergence framework and common standards and, where appropriate,
common structures.

11

4.

HOW TO ACHIEVE THE OBJECTIVES ? - ACTIONS TO BE TAKEN

This  section  sets  out  the  major  steps  of  an  action  plan  taking  into  account  that  both  a
coherent  and appropriate  legislative as  well as  an  operational  framework  is  essential  to
achieve  a  simple  and  paperless  environment  for  customs  and  trade.  Provision  must  be
made  for  the  transitional  period  in  which  electronic  and  paper-based  procedures  exist
alongside each other.

4.1.

Simplify customs legislation, integrating security aspects

The  bulk  of  the  Community  Customs  Code  and  its  implementing  provisions  were
conceived in the 80s and adopted in 1992 and  1993  respectively,  with  the  exception  of
the  rules  on  transit  and  the  customs  procedures  with  economic  impact.  Consequently,
these provisions do not reflect today’s trends and the realities of the international supply
chain, nor the reduction of duty rates.

Moreover,  the  recently  increased  focus  on  security  aspects  in  the  movement  of  goods
requires that risk–related data15 are shared in real time between customs administrations
of Member States on the one hand and customs administrations and other agencies (e. g.
police,  veterinary  authority)  on  the  other  hand.  This  will  enable  customs  authorities  to
decide on which consignments they will carry out thorough physical checks at the border.
This can mainly be done through the use of IT and the adoption of the relevant legislation
at  Community  level,  which  will  stipulate  the  use  of  IT  and  will  overcome  difficulties
linked to divergent national legislation (e.g. on data protection).

It  will  be  easier  to  streamline  customs  treatments,  veterinary  and  other  procedures  if
common procedural rules and interfaces are created.

A review of customs legislation must therefore aim at achieving the following objectives:

(cid:1)  electronic declarations (including accompanying documents), and electronic exchange

of data become the rule;

(cid:1)  the existing customs procedures and other regimes are simplified and reduced;

(cid:1)  simplified  procedures  are  aligned,  adjusted  to  the  needs  of  electronic  treatment,  and

their scope and use is extended;

(cid:1)  the roles of inland and frontier customs offices are redefined;

(cid:1)  the rights and responsibilities of traders and freight forwarders are redefined;

(cid:1)  new tools and methods are introduced in the customs legislation.

Such modernisation and simplification of customs legislation would reduce the  cost  for
business, increase legal certainty for citizens (better regulation), and allow businesses and
citizens  to  fully  benefit  from  the  possibilities  offered  by  IT  procedures  and  the  Single
Market.

15

Including  sensitive  goods  (e.g.  dangerous  chemicals)  or  high  risk  goods  (e.g.  goods  subject  to
high duties or taxes).

12

                                                
4.1.1.

Setting the rules: electronic declaration and electronic exchange of data16

Both the Community Customs Code and its implementing provisions treat the electronic
declaration and electronic exchange of data as the exception and paper-based declarations
and  the  submission  of  paper  documents  as  the  rule.  Customs  legislation  should  be
adapted  to  make  electronic  communication  the  basis  of  importation  and  exportation
transactions,  both  between  traders  and  customs  and  between  customs  administrations.
This  should  produce  an  environment  where  both  trade  and  customs  operate  a  seamless
flow  of  information  comprising  common  data  requirements  and  common  interfaces.
Paper declarations may be used under specific conditions only. Simplifications, such as
oral declarations for travellers, will of course remain.

Accompanying  documents  (invoice,  certificate  of  origin)  should,  wherever  possible,  be
provided  in  electronic  form,  through  the  single  window  approach  or  to  be  held  in  a
database  accessible  to  customs  (e.g.  import  authorisations).  Where  this  is  not  feasible,
specific conditions will have to be defined to ensure authenticity.

4.1.2.

Reduce significantly the number of existing customs treatments17

In  order  to  achieve  a  simpler  and  more  coherent  legislation  and  therefore  establish  a
common  core  of  data  whilst  reducing  compliance  costs,  it  is  suggested  to  merge  the
thirteen  existing  customs  treatments18  and  other  special  regimes  (such  as  temporary
storage,  returned  goods  and  products  of  sea-fishing).  Less  variations  mean  also  less
procedural differences between Member States.

The  current  provisions  scattered  over  the  Community  Customs  Code  could  be  grouped
under  the  following  three  types  of  customs  procedures,  with  different  variations  where
necessary and sufficiently justified:

(cid:1)  importation (covering current presentation of goods to customs, summary declaration,
temporary  storage,  release  for  free  circulation  including  end-use,  inward  processing
[drawback system], internal transit [entry of goods], returned goods, products of sea-
fishing, destruction, abandonment),

(cid:1)  exportation (covering current exportation, re-exportation, outward processing, internal

transit [exit of goods]),

(cid:1)  suspensive  arrangements  (covering  current  external  transit,  customs  warehousing,
inward processing [suspension system], processing under customs control, temporary
importation, free zones, free warehouses).

VAT  and  excise  duties  could  be  suspended  under  suspensive  customs  arrangements  in
order  to  facilitate  the  application  of  the  destination  principle  (i.e.  the  tax  is  paid  in  the
Member State where the importer or consumer is established).

16

17

18

This action is a necessary condition for the creation of a paperless environment for customs.
This  action,  although  not  a  necessary  condition  for  the  creation  of  a  paperless  environment  for
customs, would facilitate electronic treatment of customs transactions.
Art. 4 n° 15,16 CC.

13

                                                
4.1.3.

A single guarantee19

The merger of all suspensive arrangements will allow the use of a single guarantee for all
-  currently  separated  -  procedures,  provided  the  use  of  the  different  variants  has  been
authorised. This guarantee would, as currently in the case of transit, also cover VAT and
excise duties, and could be managed electronically.

4.1.4.

Single European Authorisations20

Under  the  current  customs  legislation  simplified  procedures,  the  end-use  arrangements
and customs procedures with economic impact are de facto restricted to the territory of
the  authorising  Member  State.  Though  Single  European  Authorisations  (SEA)  valid  in
several Member States are legally possible, they are hardly used in practice, because each
Member State has a veto right for transactions on its territory. As long as this veto right
exists, a widespread use of SEA will not be possible. In this context it should be noted
that  binding  tariff  and  origin  information  issued  in  one  Member  State  is  already  today
valid in all the others.

Community wide decisions should be favoured by Community legislation. Consequently,
the authorisation for central, simplified clearance should be granted by the customs office
responsible  for  the  place  where  the  trader  is  established,  holds  his  main  accounts  or
performs his main economic activities (the exact criteria for determining the responsible
authorities in cases where these conditions may be met in more than one Member State
are to be determined). This ensures  efficient controls and the  granting  of  authorisations
within reasonable deadlines.

Such an  authorisation  would  be  valid  throughout  the  Community  and  the  lead  customs
administration  is  obliged  to  consult  the  partner  administrations  in  order  to  ensure  the
feasibility  and  effectiveness  of  the  envisaged  control  mechanisms.  Joint  audit  teams
would carry out an audit so that the appropriate control mechanisms can be established.
Model  authorisations  would  simplify  this  task  and  contribute  to  overcoming  linguistic
problems.

The  principle  that  a  decision  can  cover  cases  where  a  company  established  in  one
Member  State  has  legally  independent  subsidiaries  in  other  Member  States  could  be
extended to other areas, such as binding tariff and origin information.

4.1.5.

Review  of  the  customs  debt  provisions  and  the  roles  of  frontier  and  inland
customs offices21

The  implementation  of  the  Single  Market  on  1st  of  January  1993  saw  a  significant
increase in the volumes of consignments requiring a declaration at the external frontier as
well as an increased need of communication between border and inland customs offices.

19

20

21

This action is not a necessary condition for the creation of a paperless environment for customs.
However, a common guarantee for all customs regimes will be easier to handle electronically.
This action is not a necessary condition for the creation of a paperless environment for customs
but aims at simplifying the customs environment.
This action is not a necessary condition for the creation of a paperless environment for customs,
but  aims  at  improving  security  and  creating  a  more  predictable  environment  for  traders.It  is  a
prerequisite for centralised customs clearance.

14

                                                
The increased volume of trade, the speed required for the release of goods, as well as the
fact  that  commercial  import  and  export  data  are  normally  available  in  electronic  form
before the actual customs transaction make it necessary to review the roles of the frontier
and the inland customs offices.

(cid:1)  Though  complete  customs  clearance  will  still  be  possible  at  the  entry  point,  most
traders  may  prefer  not  to  use  it,  given  the  advantages  linked  to  centralised,  global
clearance  at  the  place  where  the  trader  is  established  (deferment  of  the  date  of  the
submission  of  a  complete  declaration  with  the  required  documents,  periodic
declaration, deferred payment). On exportation, clearance at the place where the trader
is established is already a reality.

(cid:1)  The  promotion  of  the  centralised  clearance  concept  frees  frontier  customs  offices  to
focus on admissibility and security checks. Inland customs offices carry out all other
controls  (and  notably  customs  duty,  fiscal  and  commercial  policy  controls,  except
where a control at the border is required) at the trader’s premises through audits and
on spot checks based on commonly developed and applied risk criteria.

(cid:1)  Under  this  system,  the  customs  (and  related  fiscal)  debt  is  normally  incurred  at  the

place where the trader is established.

(cid:1)  The  customs  environment  could  be  made  more  predictable  for  the  trader  if  non
fraudulent  lack  of  compliance  with  a  customs  rule  does  not  lead  to  a  customs  debt
where it is established that the failure had no significant effect on correct operation of
the  procedure.22  For  such  cases  administrative  sanctions  based  on  a  schedule
established at Community level could ensure better compliance for the future. Such a
solution  would  seek  to  maintain  a  level  playing  field  for  traders  throughout  the
Community, without compromising its financial interests.

4.1.6.

Redefinition of the roles of trades and freight forwarders23 .

According  to  the  current  principles  of  the  Community  Customs  Code  the  role  of  the
importer and exporter is to provide the necessary information to customs at the time the
goods  are  physically  presented  to  the  customs  authorities  in  order  to  allow  these
authorities  a  selection  of  certain  goods  for  further  examination.  The  large  increase  in
volumes  of  trade  and  the  need  to  speed  up  the  clearance  process  have  rendered  this
approach impossible in  practice, so that simplified  procedures  (such as local  clearance)
are largely used in order to reduce burdens both on traders and administrations. However,
according  to  the  Community  Customs  Code,  such  procedures  are  defined  as  an
“exception”  to  the  normal  rule.  The  time  has  now  come  to  take  account  of  recent
developments  and  to  introduce  the  general  concepts  of  an  “authorised  trader”  and  an
“authorised freight forwarder”

The authorised trader:

(cid:1)  can  declare  electronically  goods  for  import  into  the  Community,  wherever  possible
before their arrival, with a set of core data (one element being whether the goods are

22

23

Such a rule is already stipulated in Art. 204 of the Community Customs Code and Art. 859 of its
implementing provisions and could be extended to other cases.
Although this issue is not directly linked to e-customs, the use of IT will allow to better target the
profile of the authorised trader.

15

                                                
entered for import or for a suspensive arrangement); such goods may be destined for
different Member States;

(cid:1)  can declare electronically goods for export, normally before their departure, with a set
of core data; such  goods may  exit the Community  from another  Member  State  from
that where he is established;

(cid:1)  is, in principle, subject to border controls only for antismuggling and security controls;

(cid:1)  makes  complete  electronic  declarations,  assesses  duties  within  regular  periods,
ensures  that  quantitative  limits  are  respected,  and  is  regularly  audited  by  customs.
Certain simplifications (e.g. waiver of notification requirements) can be granted where
customs  has  access  to  the  relevant  data  where  this  has  been  agreed  between  the
operator and customs, taking into account the need of data security;

(cid:1)  is granted different levels of simplification according to the types of goods traded, the
volume  of  trade,  the  reliability  and  transparency  of  his  accounting  system  and  his
compliance;  the  criteria  for  granting  different  levels  of  simplified  treatment  are  the
same throughout the Community.

The authorised freight forwarder or transporter can:

(cid:1)  take  over  some  of  the  obligations  which  would  normally  be  those  of  an  authorised

trader (e.g. he could lodge a customs declaration or notification for him);

(cid:1)  produce certain evidence (e.g. on the arrival of the goods or on the exit of the goods

from the Community), and

(cid:1)  handle  consolidated  consignments  that  are  destined  to  a  multitude  of  importing  or
exporting companies (possibly in different Member States) as holder of a suspensive
arrangement on entry into the Community and by providing the necessary data at exit.

Importers and exporters who do not wish to use the authorised trader/freight forwarder,
transporter  concept or do not fulfil the conditions, will not be entitled to use simplified
procedures and would have to choose, following a pre-arrival declaration, at importation
between release for:

(cid:1)  free circulation, or

(cid:1)  a suspensive arrangement (requiring a guarantee).

At exportation, the required data would have to be provided before the goods are loaded,
in order to allow security checks.

In either case, traders could also use a customs agent (who may be an authorised freight
forwarder, transporter, so that the above-mentioned concept would be more attractive).

16

4.1.7.

Providing a legal basis for new tools and working methods24

The re-engineering of rules and processes should be accompanied by the introduction of
modern, efficient tools and methods in the Community  customs law, in order to ensure
efficiency and a similar level of control at all customs points. This includes :

(cid:1)  self-assessment and subsequent audits as the normal form of customs declaration for

authorised traders;

(cid:1)  a common methodology and common criteria for risk management;

(cid:1)  common audit and pre-audit25 standards;

(cid:1)  common accreditation standards for the granting of facilitations, based on volumes of
trade, types of procedures, risk parameters, compliance, and the results of a pre-audit
(in line with the Stairway concept);

(cid:1)  Memoranda  of  Understanding  (MOUs)26  allowing  a  certain  flexibility  in  the
relationship  between  customs  and  the  economic  operator  with  regard  to  facilitations
and control arrangements; model MOU’s could be developed;

(cid:1)  the “single window” approach for co-operation between customs authorities and other

departments or agencies on the one hand and traders on the other;

(cid:1)  the use of guidelines and explanatory notes wherever no legal provisions are required
but a harmonisation of practices is necessary, in order to guarantee transparency and
an equal treatment of economic operators.

4.1.8.

Electronic signature, electronic documents, electronic archiving27

The  use  of  information  technology  poses  the  crucial  problem  of  the  authenticity  and
soundness  of  the  data  exchanged  or  electronically  stored,  such  as  invoices28,  bills  of
lading, certificates of origin or authenticity, and licences.

By  using  electronic  signatures  it  is  possible  to  authenticate  the  person  signing  an
electronic  document.  Community  legislation  is  already  in  place  to  guarantee  the  legal
recognition of electronic signatures.

The  electronic  signature  Directive  has  been  implemented  in  almost  all  Member  States.
Consequently  electronic  signatures  are  ensured  legal  effectiveness  and  admissibility  as
evidence  for  legal  proceedings  to  the  same  extent  as  hand-written  signatures  in  the
Member States.

Consequently:

24

25

26

27

28

This action is directly linked to the creation of a paperless environment for customs.
Pre-audits are performed, where necessary, before an authorisation is granted.
Used mainly in the context of SEA and simplified procedures.
This action is a necessary condition for the creation of a paperless environment for customs.
See Directive 2001/115/EC with regard to VAT.

17

                                                
i)  Member  States  who  have  not  yet  implemented  Directive  1999/93/EC  on  electronic
signature should proceed with the implementation;

ii)  there  should  be  a  specific  provision  in  the  Community  Customs  Code  explicitly
recognising  the  legal  value  of  an  electronic  signature  and  document  for  customs
purposes, independently from the state of implementation in the different Member States;

iii)  Member  States  should  ensure  interoperability  where  a  trader  uses  an  electronic
signature recognised under the rules of the Member State where he is established.

4.1.9.

Standardise and harmonise information requirements 29

Standardised  and  harmonised  information  requirements  and  procedures  are  essential  to
establish the common understanding which allows for an effective and efficient exchange
of information between all parties involved in the international cross-border movement of
goods.

Standardisation and harmonisation of information requirements should be consistent with
the work undertaken by the G7. Initiatives to harmonise the SAD30 and the SAM31 with
regard to the optional boxes should lead to operational results.Data to be transmitted to
another Member State must necessarily be the same throughout the Community.

It is important to ensure a seamless flow of information: traders should provide data only
once (or twice where the system of an initial incomplete and a supplementary declaration
is used), one Member State’s data become another Member State’s data where necessary.

Solutions  must  also  be  found  with  regard  to  differences  caused  by  national  legal
requirements, such as fiscal regimes (e.g. reduced VAT rates, excise duties). Whilst the
Community  Customs  Code  cannot  resolve  such  divergences,  the  SAD  and  the  SAM
provide for a framework under which a standardisation is possible.

4.2.

Rationalise business processes through the use of modern technology32

Once  the  information  requirements  have  been  harmonised  or  standardised,  the  customs
interface should be presented to the trader in each Member State in the same form. This
is not only a symbol for the Community but helps also to overcome linguistic problems.

4.2.1.

Ensure customs/customs and trader/customs interfaces

In order to be able to act as if they were a single customs authority, customs offices all
over  the  EU  territory  should  be  inter-linked.  Therefore  it  is  necessary  to  ensure  the
appropriate interfaces between divergent electronic customs systems.

Traders should be able to lodge their declaration or notification directly from their own
IT system (if they wish via a clearing house or customs agent) and give all necessary data
electronically  to  customs  according  to  a  standard  interface.  Certain  notification
requirements could be waived where customs administrations are granted, on a voluntary

29

30

31

32

This action is a necessary condition for the creation of a paperless environment for customs.
Single Administrative Document.
Single Administrative Message.
This action is directly linked to the creation of a paperless environment for customs.

18

                                                
basis, electronic access to the relevant trader’s records. Also for such cases, appropriate
common  interfaces  should  be  developed.  A  customs  internet  declaration/notification
should be available for small and medium sized traders.

4.2.2.

Ensure secure internet payment systems

On  technical  security,  the  Commission’s  e-Europe  initiative33  promotes  several
solutions, including a smart card action plan and plans further work on identification and
authentication techniques.

These  developments  have  to  be  closely  followed  and  appropriate  solutions  should  be
sought.

4.2.3.

Single automated access point for trade

It is important for traders to have a single automated access point to the Community. This
means  that  from  this  entry  point  they  can  access  the  relevant  customs  clearance  and
information systems. They will have to provide data only once, independently from the
number of destination countries.

4.2.4.

Transparency

Information on customs procedures, simplifications, accreditation criteria, guidelines, etc.
should be available on the internet in a language widely understood in international trade.

33

COM(2002) 263 final, 28.5.2002

19

                                                
CONCLUSION

The  Communication  from  the  Commission  concerning  a  strategy  for  the  Customs
Union34 has highlighted the need to simplify and  rationalise  customs  legislation  to  take
into  account  changes  in  business  trends  and  to  tackle  fraud.  Emphasis  is  given  in
particular  to  promoting  modern  techniques  and  a  greater  spread  of  information  to  help
customs and economic operators apply the legislation in a consistent manner.

The Council, in its Resolution of 30 May 2001 on a strategy for the Customs Union35 has
invited  the  Commission  “to  develop  a  broad-based  programme  for  computerisation  of
customs procedures and exchange of customs information, as well as a credible strategy
for the development and use of information networks in customs activities”.

The  objective  of  a  simplified  and  paperless  environment  for  customs  and  traders,  in
which  legitimate  trade  can  operate  the  seamless  movement  of  goods  with  minimum
interference by customs, has been established and endorsed by the business community
in the Forum on electronic customs (Toledo, May 2002).

This is the only way to avoid further diversion from the internal market and an increase
of  bilateral  arrangements  (as  it  happens  with  SEA).  Only  standardisation  and
simplification  of  customs  procedures  will  prevent  business  from  authorisation
“shopping”,  resulting  in  substantial  economic  consequences  for  certain  Member  States,
leading  ultimately  to  distortion  of  competition.  Only  uniform  integrated  customs
processes can avoid high administrative costs and a serious competitive disadvantages for
European companies.

Moreover, the proposed approach ensures that security, public health and environmental
protection will not be  compromised. This way  less “secure”  entry points  and territories
within  the  European  Union  and  the  abandonment  of  certain  regions  and  ports  can  be
avoided.

There is no other alternative than ensuring optimal conditions for the tasks that have to be
carried out by customs authorities and traders.

Existing legislation, systems and processes will have to be reviewed and simplified and a
paperless environment be created. Where technical and legal gaps exist, they will have to
be  filled  in  order  to  obtain  an  integrated  legal  and  technical  framework.  Improvements
will  ensure  that  Community’s  regulatory  infrastructure  keeps  pace  with  the  latest
developments in  commercial  logistic  practices,  the  reduction  of  customs  duties  and  the
forthcoming enlargement.

Customs controls will lose their cumbersome nature for trade and will become a part of
the trade transaction, with optimised efficiency.

Key  players  and  their  respective  roles  have  been  identified.  An  action  plan  has  been
proposed.  Public  authorities  (Commission  and  customs  and  other  administrations)  and
the private sector (traders)  will  have  to  discuss  and  this  action  plan  and  carry  out  their
specific tasks in partnership and continuous transparency and consultation.

34

35

COM(2001)51 final, 8.2.2001
OJ C 171,p. 1

20

                                                
The success of the strategy for a simplified and paperless environment for customs and
trade will highly depend on key players’ commitment to its implementation.

Annex 1 sets out a first action plan and Annex 2 gives an overview of costs and benefits
for traders and administrations.

21

ANNEX 1

PROPOSAL FOR ACTIONS UNDER E-CUSTOMS

1

1. What type of action is proposed?

Legal

Propose  amendment  of  the  Community  Customs  Code  (modification  of  Council
Regulation N° 2913/92)

2. Subject/Content (main issues:)

Adjust the  Customs Code to the  principle  that electronic declarations  and  messages
are the rule and paper-based declarations the exception.

Define the conditions of a digital environment for customs

Rationalise  customs  (normal  and  simplified)  procedures  and  treatments  (from  13  to
3) reducing divergences to a minimum and defining a common core of data

Redefine the roles and responsibilities of inland and border customs offices

Use of a single guarantee for all customs treatments

Favour extensive use of central clearance

Provide legal basis for new tools and methods (e.g. risk analysis model and data base)

3. Importance of the action: High

4. Expected results of the proposed action:

Proposal of new Council and Parliament regulation amending the CC

5. Measurement of the results achieved:

Adoption of the proposal

Implementation by Member States

6. Cost and benefits36 for the main stakeholders:

6.1. Commission

Costs: A slight increase of the budget for missions (analysing the situation in MS for
the feasibility study) and meetings. Temporary need of at least two A officials (one is
currently working on the file) and 1 man/year technical consultants.

36

A preliminary feasibility study is currently under preparation including the cost/benefit analysis. Until the final
results of the study only assumptions on the basis of contacts with MS and traders can be made.

22

                                                
legislation,  easier 

Benefits:  Simpler 
improved
enforcement  of  customs  law  via  significant  improvements  in  detection  of  fraud.
Improved  collection  of  revenues  (own  resources)  as  direct  result  of  the  preceding
(fraud detection) as well as via likely improved compliance rates in declarations

implementation  by  MS  and 

6.2. Member States (MS)

Costs: Preparatory legal work should not involve extra costs (apart from participation
in some additional meetings and seminars) at least for current MS because it is part of
anticipating  change  and  progress.  Concerning  new  MS,  these  costs  are  already
planned and budgeted for the implementation of the “acquis”.

Benefits:  Same  as  for  Commission.  More  efficient  allocation  of  human  and  other
resources deriving from the re-engineering of customs processes and procedures and
removal  of  activities  and  controls  duplicated  between  MS.More  efficient  use  of
NCTS investment/infrastructure, even though external borders have moved and there
are  less  transit  movements.  Maintain  customs  offices  in  the  current  MS  with  no
external border. Improved security and compliance.

6.3. Traders

Costs:  Investments  necessary  to  access  the  services  (including  client  software  and
training, network/telecommunications costs and possible security measures. Costs of
providing and maintaining common interface to customs (only one for all MS).

Benefits:  Numerous  and  recurring.  Improvement  in  customs  clearance  and  release
time. Simplification and streamlining of compliance obligations and procedures (e.g.
SEA,  single  guarantee  for  all  customs  treatments).  Increased  transparency,  co-
operation  and  uniformity  in  interactions  with  customs.  Reduction  of  costs  via  the
automation of customs procedures. Availability of a single automated entry point to
the EU. Increased flexibility in co-operation structure with customs administrations.

7. When is the action planned to take place?

After preparatory technical discussions within the Customs Code Committee (started
in  2002,  until  end  2003)  the  formal  proposal  is  expected  to  be  transmitted  to  the
Council and the E.P in 2004 (provided resources are available).

8. Duration of action:

+/-1,5 year until submission of a proposal (depending on resources).

9. Resource implications (for Commission)

At least 2 A officials (full time) and 1 external consultants 1 year.

23

PROPOSAL FOR ACTIONS UNDER E-CUSTOMS

2

1. What type of action is proposed?

Legal

Propose  amendment  of  the  Community  Customs  Code  implementing  provisions
(Commission regulation)

2. Subject/Content (main issues:)

The same as for table 1, but at more “technical” level (= a guide to the application
of the CC)

Adjust  the  provisions  to  the  principle  that  electronic  declarations  and  messages  are  the
rule and paper-based declarations the exception.

Define the conditions of a digital environment for customs

Rationalise  customs  (normal  and  simplified  )  procedures  and  treatments  (from  13  to  3)
reducing divergences to a minimum and defining a common core of data

Redefine the roles and responsibilities of inland and border customs offices

Use of a single guarantee for all customs treatments

Favour extensive use of central clearance

Provide legal basis for new tools and methods (e.g. risk analysis model and data base)

3. Importance of the action: High

4. Expected results of the proposed action:

Proposal of new Commission regulation amending the CCIP

5. Measurement of the results achieved:

Adoption of the proposal

Implementation by MS

6. Cost and benefits37 for the main stakeholders: (same as for fiche 1 namely)

6.1. Commission

Costs: A slight increase of the budget for missions (analysing the situation in MS for the

37

A preliminary feasibility study is currently under preparation, including the cost/benefit analysis. Until the final results
of the study only assumptions on the basis of contacts with MS and traders can be made.

24

                                                
feasibility  study)  and  meetings.  Temporary  need  of  at  least  two  A  officials  (one  is
currently working on the file) and a 1 man/year technical consultants.

Benefits: Simpler legislation, easier implementation by MS and improved enforcement of
customs  law  via significant  improvements  in  detection  of  fraud.  Improved  collection  of
revenues (own resources) as direct result of the preceding (fraud detection) as well as via
likely improved compliance rates in declarations

6.2. Member States (MS)

Costs: Preparatory legal work should not involve extra costs (apart from participation in
some  additional  meetings  and  seminars)  at  least  for  current  MS  because  it  is  part  of
anticipating  change  and  progress.  Concerning  new  MS,  these  costs  are  already  planned
and budgeted for the implementation of the “acquis”.

Benefits:  Same  as  for  Commission.  More  efficient  allocation  of  human  and  other
resources  deriving  from  the  re-engineering  of  customs  processes  and  procedures  and
removal  of  activities  and  controls  duplicated  between  MS.More  efficient  use  of  NCTS
investment/infrastructure,  even  though  external  borders  have  moved  and  there  are  less
transit movements. Maintain customs offices in the current MS with no external border.
Improved security and compliance.

6.3. Traders

Costs:  Investments  necessary  to  access  the  services  (including  client  software  and
training,  network/telecommunications  costs  and  possible  security  measures.  Costs  of
providing and maintaining common interface to customs (only one for all MS).

Benefits:  Numerous  and  recurring.  Improvement  in  customs  and  release  clearance  time.
Simplification  and  streamlining  of  compliance  obligations  and  procedures  (e.g.  SEA,
single  guarantee  for  all  customs  treatments).  Increased  transparency,  co-operation  and
uniformity  in  interactions  with  Customs.  Reduction  of  costs  via  the  automation  of
customs procedures. Availability of a single automated entry point to the EU. Increased
flexibility in co-operation structure with customs administrations.

7. When is the action planned to take place?

Prior to and following adoption of the new Council and E.P Regulation modifying
the  Customs  Code,  preparatory  technical  discussions  within  the  Customs  Code
Committee  are  expected  to  start  once  the  proposal  for  the  amendment  in  the
Customs Code has been submitted and to end one year after its adoption.

8. Duration of action:
1-2  years  (depending  on  resources  and  progress  in  the  Council  and  the
Parliament).

9. Resource implications (for Commission)
same as for table 1.

25

PROPOSAL FOR ACTIONS UNDER E-CUSTOMS

3

1. What type of action is proposed?
Operational (co-operation between some MS)
Pilot project on automated exportation

2. Subject/Content (main issues:)

The  pilot  project  would  cover  indirect  exportation  towards  a  third  country
involving at least 2 MS (in the first is situated the office of exportation and in the
second the office of exit).

During  the  Finland  seminar  in  December  2002,  three  MS  volunteered  to
participate  to  the  pilot  project  (PP),  namely  DE,  IT  and  BE.  Traders  expressed
interest to participate through selected companies.

3. Importance of the action: High

4. Expected results of the proposed action:
Ensure (in  a  computerised  customs  environment)  that  goods  declared  for  export,
outward  processing  or  re-exportation  have  left  the  customs  territory  towards  a
third country, after a control of the admissibility of the export has taken place.
Integrate third countries data requirements relating to security aspects (and define
common data elements required for exportation to third countries)  in  the flow  of
data between the customs office of departure and the customs office of exit.
Ensure optimal co-operation between customs offices of the MS involved
Identify bottlenecks and problems to solve
Share the experience and results with other current and future MS and traders, and
serve as a model for the automated export procedure to be applied throughout the
Community, and as a first tangible result of the electronic customs initiative after
the implementation of the new computerised transit system (NCTS). Organisation
of a seminar with all interested parties.

5. Measurement of the results achieved:

Evaluation of the results by MS and Commission (report), implementation by the
Member States concerned.

6. Cost and benefits for the main stakeholders:

6.1. Commission

Costs:  Costs  will  be  covered  by  Customs  2007  under  “electronic  customs”  and  by  the
Internal Market budget (seminar).

Benefits:  Identify  problems  (legal  and  technical),  including  security  aspects  before
changing the legislation (as exportation is already a two step procedure no major changes
to the Customs Code are needed, but mainly to the implementing provisions) and before

26

defining interfaces.
Having a concrete view on other countries requirements (such as CSI38), serve as a model
for export automation in MS.

6.2. Member States

Costs: Some technical adaptation of NCTS infrastructure may be needed.

Benefits: Same as for Commission.

Use  of  NCTS  investment/infrastructure,  even  though  external  borders  have  moved  and
transit  movements  have  been  reduced.  Maintain  customs  offices  in  the  old  MS  with  no
external border. Improved security and compliance.

6.3. Traders

Costs: Possible technical adaptations to electronic interface with customs

Benefits:  Improvement  in  customs  clearance  and  release  time.Better  proof  of  export  for
tax  purposes.  Simplification  and  streamlining  of  compliance  obligations  (including
foreign countries requirements in the CSI context) and procedures

7. When is the action planned to take place?

During 2003 and throughout 2004. Preparatory meetings have already taken place.

8. Duration of action:

+/-1 to 2 years (depending on resources).

9. Resource implications (for Commission)

same as for table 1.

38

CSI: Container Security Initiative.

27

                                                
PROPOSAL FOR ACTIONS UNDER E-CUSTOMS

4

1. What type of action is proposed?

Technical

Evaluate  current  IT  environment  for  the  creation  of  a  convergence  framework
between MS

2. Subject/Content (main issues:)

Achieve  a  convergence  framework  among  MS  (who  currently  run  different
electronic  systems  for  customs  and  related  purposes)  in  view  of  ensuring
interoperability, a technical evaluation is needed.

3. Importance of the action: High

4. Expected results of the proposed action:

Identify problems and propose solutions in order to ensure interoperability between
the MS IT systems

Define technical specifications for convergence

Produce and publish a report based on the information given by MS

5. Measurement of the results achieved:

Evaluation of the results by MS  and  Commission, endorsement of a  convergence
roadmap.

6. Cost and benefits for the main stakeholders:

6.1. Commission

Costs: The work will be carried out by MS (with the assistance of the Commission) in the
Customs 2007 framework. Costs for meetings will be covered by C2007 under “electronic
customs”.

Benefits:  If  a  convergence  framework  between  different  systems  allows  interoperability,
the financial and human resources required for a centrally run Commission system can be
avoided.

6.2. Member States

Costs: Travel costs will be covered by C 2007.Human resources : 1 per MS

Benefits:  Member  States  invested  already  significant  money  and  resources  in  their  IT
systems.  Making  use  of  them  (instead  of  introducing  a  new  system)  through  technical
adaptations, will allow them to save public money and human resources (no new training
needed)

6.3. Traders

Costs: Some technical adaptations, insofar as current interfaces change.

Benefits:  Traders  who  already  do  customs  transactions  electronically,  are  accustomed  to
the IT system of the MS in which they are established. No further training and technical
investment is needed, if MS system can be maintained.

28

7. When is the action planned to take place?

Throughout 2003 and 2004.

8. Duration of action:

+/- 2 years

9. Resource implications (for Comission)

same as for table 1 +1 informatics specialist

29

PROPOSAL FOR ACTIONS UNDER E-CUSTOMS

5

1. What type of action is proposed?

Technical

Define appropriate interfaces in order to ensure interoperability

2. Subject/Content (main issues:)

In  order  to  ensure  interoperability  among  MS  (who  currently  run  different
electronic  systems  for  customs  purposes)  it  is  important  to  define  appropriate
technical interfaces:

Customs to Customs

Customs to other administrations (one stop shop)

Customs to traders/traders to customs

3. Importance of the action: High

4. Expected results of the proposed action:
Identify problems and solutions in order to ensure interoperability between the MS
systems
Define technical specifications for convergence
Produce and publish a report based on the information given by MS

5. Measurement of the results achieved:

Evaluation  of  the  results  by  MS  and  Commission.Produce  and  endorse  interface
specifications.
6. Cost and benefits for the main stakeholders:
6.1. Commission
Costs: The work will be carried out by MS (with the assistance of the Commission) in the
Customs 2007 framework. Costs for meetings will be covered by C2007 under “electronic
customs”
Benefits: If  a  convergence  framework  between  different  systems  allows interoperability,
financial  and  human  resources  required  for  a  centrally  run  Commission  system  can  be
avoided.
6.2. Member States
Costs: Additional software updating costs, but these costs are similar to those that would
normally be incurred during the maintenance and evolution cycle of their software.
Benefits: MS  invested already  a lot  of  money  and  resources in their  IT  system.  Making
use  of  them  (instead  of  using  a  new  system)  through  appropriate  interfaces,  will  allow
them to save public money.
6.3. Traders
Costs: Investment necessary to access the services, including client software and training.
Benefits: General reduction in the costs of doing business in the EU by having one single
interface  to  all  EU  customs  administrations  (currently  15  and  soon  25  different
interfaces).

30

7. When is the action planned to take place?
Throughout 2004 and 2005.

8. Duration of action:

+/- 2 years

9. Resource implications (for Commission)

same as for table1 + 1 informatics specialist

31

PROPOSAL FOR ACTIONS UNDER E-CUSTOMS

6

1. What type of action is proposed?

Technical

Define common standards for common data requirements

2. Subject/Content (main issues:)

In  order  to  ensure  interoperability  among  MS  (who  currently  run  different
electronic  systems  for  customs  purposes)  it  is  important  to  define  common
standards for the exchange of data from:

Customs to customs

Customs to other administrations (one stop shop)

Customs to traders/traders to customs

Moreover, it is important to agree on a minimum common core of data (as under
NCTS) which will be exchanged between them and will allow electronic handling
of the goods flow.

3. Importance of the action: High

4. Expected results of the proposed action:

Identify a common core set of data and standards

5. Measurement of the results achieved:

Produce and endorse list of core data and standards.

6. Cost and benefits for the main stakeholders:

6.1. Commission

Costs: The work will be carried out by MS (and the Commission) in the Customs Code
Committee and in the Customs  2007 framework.  Costs  for  meetings  will, in the  second
case, be covered by C2007 under “electronic customs”.

Benefits:  A  common  standardised  set  of  data  will  facilitate  exchange  of  information
between stakeholders.

6.2. Member States

Costs: Travel costs + 1 person per MS.

Benefits: Same as for Commission.

32

6.3. Traders

Costs: Cost of adaptation of existing data structure and codes.

Benefits:  General  reduction  in  the  costs  of  doing  business  in  the  EU  by  having
standardised and common data at Community level.

7. When is the action planned to take place?

Throughout 2003 and 2004.

8. Duration of action:

+/-2 years.

9. Resource implications (for Commission)

same as for table 1 + 1 Informatics specialist.

33

ANNEX 2

Main costs and benefits for traders and administrations

Benefits

Costs

Investments  necessary  to  access  the  services,  including  client  software  and  training,
network/telecommunications costs, and any possible imposed security measures/obligations

Increased responsibility for traders who are granted facilitations on a EU-wide level

(cid:1) 

(cid:1) 

(cid:1) 

Increased responsiveness of the customs administrations, particularly regarding  reductions
in the overall elapse time required to obtain customs clearance

Simplification and streamlining  of  compliance  obligations  and  procedures  to  be  followed,
deriving  specifically  from  the  simplification  and  reduction  of  customs  procedures,  the
Single European Authorization, and the possibility to use global guarantees

(cid:1) 

(cid:1) 

Increased  transparency,  predictability,  co-operation  and  uniformity  in  interactions  with
customs administrations and systems

s
r
e
d
a
r
T

(cid:1)  General reduction in the costs of doing business in the European Union via the automation

of procedures and consequent replacement of paper-based procedures

(cid:1)  Availability  of  a  single  automated  entry  point  to  the  EU  administrations,  including  the

single window/one-stop-shop for customs and other agencies

(cid:1)  Availability  of  lower  cost  customs  software  via  the  creation  of  an  EU-wide  market  for  a
customs software following a unique set of specifications instead of 15 (or 25) markets of
country-specific software

(cid:1)  New business opportunities for customs agents and clearing houses in the area of bridging
EU  interfaces  to  private  companies’  systems  interfaces,  and  for  representing  traders
established outside the Community regarding declaration and payment obligations

(cid:1) 

Increased flexibility in  co-operation  structures  with  customs  administrations  via  expanded
use of MOUs (Memoranda of Understanding)

34

The national customs administrations and the European Commission (EC) will be better able to
fulfill their tasks as follows:

(cid:1) 

Legal  adaptations  including  both  harmonization  as  well  as  some  specifically  all  needed
modifications (MS + EC)

(cid:1) 

(cid:1) 

(cid:1) 

Improved enforcement of existing laws and improved security via significant improvements
in detection of fraud, especially when several Member States are involved in an import or
export  transaction,  and  also  via  the  significant  improvements  in  the  application  of  other
controls because of an integrated approach (environment, health, security, etc.)

Improved collection of revenues as a direct result of the preceding (better control of goods’
movements) as well as via likely improved compliance rates in declarations

Improved  (i.e.,  more  efficient)  allocation  of  human  and other  resources  deriving  from  the
systematic re-engineering and simplification of customs processes and procedures

(cid:1)  Reduction in costs for each process automated in the quest for the paperless environment in

which all customs transactions are done electronically

s
n
o
i
t
a
r
t
s
i
n
i
m
d
A

(cid:1)  Adoption of/convergence towards common/uniform risk analysis models, but which are of

course customizable/adaptable to local conditions (MS + EC)

(cid:1)  Adoption of common interoperability model (MS + EC)

(cid:1) 

(cid:1) 

Implementation  of  permanent  co-ordination  efforts  to  create  and  maintain  common
functional specifications, data models, etc. for EU-wide customs systems (MS+EC)

Investments  in  infrastructure  (but  based  on  extensions  of  existing  facilities  such  as  CCN,
those used by NCTS, etc, including PKI/digital signatures, etc. (MS +EC)

(cid:1)  Attaining and maintaining coherence with other (non-customs) agencies and administrative

bodies (MS+EC)

(cid:1) 

Planning  and  conducting  prototyping  and  pilot  phases  for  new  automated  systems  (MS  +
EC)

(cid:1)  Conduction of feasibility study and creation of implementation and migration plans (EC)

(cid:1)  Human resource  adjustments,  including  hiring  additional  staff  and  training programs  (MS

mostly + some by EC)

(cid:1)  Necessary  re-organization  of  administrative  bodies  and  agencies  associated  with  the

business process, re-engineering of customs processes and procedures (MS+EC)

(cid:1)  Additional software updating costs associated with convergence of IT strategy (MS+EC)

(cid:1)  Main phasing-in costs associated with the execution of all the plans (MS+EC)

(cid:1)  Development  and  other  implementation  costs  associated  with  new  software  systems  and

infrastructure (MS+EC)

(cid:1)  Miscellaneous phasing-in costs which are immeasurable, intangible, exist in small units, are
widespread, but which are significant in total (costs largely born by MS, e-Europe already
allows a share of these costs)

35

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

on the role of customs in the integrated management of external borders

36

This  Communication  is  a  sequel  to  that  presented  by  the  Commission  in  May  2002  on  the
integrated management of the external borders of the Member States of the European Union.39

It also takes account of the Commission Communication of February 2001 on a strategy for
the Customs Union40 and the related Council Resolution of June 2001.41 The strategy for the
Customs Union must be adapted and extended to take account of growing security concerns.
Although customs is primarily responsible for the control of goods, it will have an important
role to play in combating the new threats linked to goods crossing Community borders. The
Community must have the resources to guarantee its citizens’ safety and security against the
risks from trafficking, health or environmental hazards or terrorism.

This  Communication  proposes  to  rationalise  the  management  of  customs  controls  via  a
common  strategy  for  goods-linked  risks  to  be  defined  in  close  cooperation  with  all  the
authorities  involved  in  a  common  framework.  Its  aim  is  to  give  customs  and  the  other
authorities responsible for managing goods at the external border the resources they need to
combat any risk  to  the Community’s safety  and  security in  a coordinated manner. To attain
this  objective  it  proposes  priority-setting  for  customs  controls,  the  introduction  of  a
Community risk management system and identification of the resources and equipment which
will be needed.

It  concludes  that  the  border  guards,  who  bear  primary  responsibility  for  checks  on  persons,
and the customs authorities, responsible for controls on goods, have the common objective of
ensuring a high level of protection for citizens within an area offering freedom, security and
justice. The complementary and closely intertwined nature of their tasks makes it desirable to
enhance  the  synergies  between  them,  exploiting  their  different  strengths  and  providing
mechanisms guaranteeing greater effective cooperation.

39

40

41

COM (2002) 233 final, 7.5.2002.
COM (2001) 51 final, 8.2.2001.
OJ C 171, 15.6.2001, p.1.

37

                                                
CONTENTS

1.

2.

3.

4.

4.1

4.2

4.3

5

5.1

5.2

5.3

5.4

5.5

5.6

6

INTRODUCTION ..................................................................................................... 39

CUSTOMS AND SAFETY PROVISIONS: A FIRST OFFICIAL REPORT .......... 40

THE MAIN THREATS TO THE COMMUNITY'S SAFETY ................................. 41

CUSTOMS CAN IMPROVE SAFETY OF GOODS ............................................... 42

The central role of the customs for the control of goods ........................................... 42

Rationalise the customs controls at the external borders ........................................... 43

Give customs safety functions a legislative and financial framework....................... 44

DESIRABLE IMPROVEMENTS ............................................................................. 46

A common approach to risks ..................................................................................... 46

Guarantee an appropriate level of human resources and equipment.......................... 48

Facilitate trade without compromising the safety and security of the EC ................. 49

Study the possibility of sharing responsibilities ........................................................ 49

Strengthen cooperation with the third countries ........................................................ 50

Support measures for enlargement............................................................................. 50

CONCLUSIONS AND RECOMMENDATIONS .................................................... 51

38

1.

1.1.

1.2.

1.3.

1.4.

INTRODUCTION

In  December  2001,  the  Laeken  European  Council  asked  “the  Council  and  the
Commission to work out arrangements for cooperation between services responsible
for external border control and to examine the conditions in which a mechanism or
common services to control external borders could be created”.42 In response to this
request,  the  Commission  drew  up  an  integrated  European  strategy  for  the
management  of  external  borders  reflecting  the  multidimensional  nature  of  the  task.
The  principal  aim  of  this  strategy  is  to  improve  security  and  other  controls  carried
out  at  the  external  border  and  to  facilitate  bona  fide  movements  of  travellers  and
legitimate trade.

the  Commission  presented  a  Communication  on 

In  May  2002, 
integrated
management of the external borders of the Member States of the European Union.43
This  dealt  primarily  with  checks  on  persons  and  stressed  that  effective  common
management of the European Union’s external borders would  enhance security  and
the  feeling  among  its  citizens  of  belonging  to  a  common  area  and  sharing  a
common destiny. The Communication announced that there would be a second
contribution dealing with goods. This takes the form of this Communication which
suggests  ways  of  improving  the  integrated  management  of  controls  of  goods  and
their means of transport (luggage included) and makes other proposals in areas where
customs can provide  support  for checks of persons  carried  out by  other authorities.
Both Communications are complementary and constitute the first stages in the
overall  strategy  that  the  Commission  is  proposing  for  integrated  and  effective
management  of  external  borders,  the  aim  being  to  achieve  a  coherent
framework for joint action at EU level.

To comply  with the  European  Council’s  request  it  is  essential  to  consider  not  only
how  to  improve  controls  through  increased  cooperation  between  authorities
responsible for external border controls, but also whether current controls sufficiently
guarantee the security of the Community and its citizens. The term security is used in
the widest sense here. It covers not only threats to public security in the movement of
goods  (criminal,  terrorist  or  other  trafficking  or  illegal  trade  in  firearms,  biological
products or explosives, for example), but also the threats  to society’s security  from
trade  in  goods which  pose  a  risk  to  public  health,  the  environment  and  consumers.
Irrespective of whether they come under the first or third pillar, these measures are
complementary and have the same objectives. They must all help create the area of
freedom, safety and justice established by the Treaty of Amsterdam.

The  current  methods  used  by  customs  for  controls  of  goods  do  not  adequately
address increasing security concerns. This is why this Communication recommends
fundamental  changes  in  the  way  threats  to  security  are  combated  without  creating
obstacles  to  legitimate  trade.  The  strategy  proposed  combines  rationalisation  of
customs controls with a common definition, worked out in cooperation with the other
authorities  concerned,  of  the  methods  and  means  used  to  more  effectively  check
goods.  The  aim  of  the  recommendations  is  to  maximise  the  combined  impact  of
controls carried out by different authorities and make more resources and equipment

42

43

Conclusion No 42 of the Laeken European Council of 14 and 15 December 2001, p. 12.
COM(2002) 233 final, 7.5.2002.

39

                                                
1.5.

1.6.

1.7.

available. Once these proposals are implemented, they will improve public security
and  have  a  positive  impact  on  trade,  investment,  growth,  and  consequently,  on
employment within the Community.

The  Communication  also  proposes  all  the  improvements  needed  in  Community
frontier controls to improve security, while embracing the new Member States, who
will  be  required  from  accession  to  ensure  that  no  dangerous  or  illegal  goods
compromise  the  security  of  the  other  Member  States  or  of  the  Community.  In  this
connection it should be borne in mind  that the majority of  security  controls,  unlike
some of the financial controls, have to be carried out at the Community border.

This  Communication  forms  part  of  the  guidelines  laid  down  in  the  Commission
Communication of February 2001 concerning a strategy for the Customs Union44 and
of the related Council Resolution of June 2001.45 It takes these proposals further to
take greater account of security aspects.

It  is  not  the  purpose  of  this  Communication  to  call  in  question  the  guidelines  or
priority  measures  laid  down  as  part  of  the  overall  strategic  approach  for  protecting
the  Community's  financial  interests  or  fighting  fraud,  as  set  out  in  Commission
Communication  COM(2000)  358  final  of  28  June  2000,  nor  customs  mutual
assistance  operations  under  either  Regulation  (EC)  No  515/9746  or  the  mutual
assistance protocols or agreements with third countries.

The  Commission  calls  on  the  Council,  Parliament  and  the  European  Economic  and
Social  Committee  to  discuss  these  proposals  and  to  endorse  the  measures  described  in
Section 6  of  this  Communication  so  that  concrete  proposals  can  be  presented  for  their
implementation.

2.

CUSTOMS AND SECURITY: AN INITIAL CONCLUSION

Customs  work  in  the  Community  has  typically  evolved  in  the  context  of  financial  and
commercial controls. Broadly speaking, the fight against fraud has traditionally been seen as
part  of  the  task  of  supervising  the  flow  of  goods.  More  recently,  the  focus  has  been  on  the
threat to public security from dangerous or hazardous goods. Work has been organised on this
basis and Community instruments such as the customs modernisation programmes have been
used to identify best practice for financial and commercial controls.

In the light of the growing  threats  from  dangerous goods,  organised crime or  terrorist
organisations, it has to be asked whether this approach provides adequate protection for
the Community and its citizens at all points along the external border.

The Commission considers that it does not.

Present controls do ensure the financial interests of the Community and its Member States are
protected, particularly as any problems arising once goods have entered the Community can

44

45

46

COM(2001) 51 final, 8.2.2001.
OJ No C 171, 15.6.2001, p. 1.
Council Regulation (EC) No 515/97 of 13 March 1997 on mutual assistance between the administrative
authorities of the Member States and cooperation between the latter and the Commission to ensure the
correct application of the law on customs and agricultural matters (OJ L 82, 22.3.1997, p. 1).

40

                                                
be  rectified  through  post-clearance  audits.  But  they  do  not  adequately  counter  or  prevent
terrorist action and they are no longer able to guarantee a high level of protection for citizens
against the risks from dangerous or defective goods.

All the Member States are active in these areas, but measures and priorities and investment in
equipment and resources differ from one Member State to another. At Community level, there
is no uniformity or harmonisation of security controls which are sometimes slow to respond to
new threats. This results in varying levels of performance in these areas at different points in
the  customs  territory.  In  some  places  computerised  risk  management  systems  have  been
introduced with the requisite human resources and equipment, whereas in others controls are
less effective owing to a lack of investment and modern systems.

In  security  terms,  this  means  that  the  chances  of  seizing  explosive  devices,  biological
weapons or dangerous goods in time depend upon where at the Community’s external border
these  goods  enter.  The  risk  of  diversified  treatment  will  only  increase  after  enlargement.
There  is  consequently  a  real  need  to  coordinate  these  individual  approaches  so  that  best
national practice becomes the Community standard.

This Communication applies to all the Community's external frontiers, land borders, ports and
airports, and takes into account the importance of the fifth enlargement.

To  ensure  the  efficient  integrated  management  of  the  EU's  external  frontiers,  we  need
pragmatic solutions, underpinned by a firm financial and political commitment, otherwise the
Community will run the risk of becoming an easy target for fraud and terrorists.

Current security checks on goods must be improved to ensure a high and identical level
of protection at all points along the Community’s external border.

This  Communication  discusses  ways  of  improving  the  safety  of  goods.  It  lists  the  principal
threats  to  be  countered,  the  weaknesses  in  current  systems  and  highlights  the  specific  areas
which  require  close  attention.  It  indicates  what  customs  should  do  to  improve  the  situation
and  how  to  strengthen  cooperation  with  the  other  authorities  responsible  for  the  safety  of
goods.

3.

THE PRINCIPAL THREATS TO SECURITY

There  are  many  different  threats  to  the  Community’s  safety  and  security.  They  can  be
classified in a number of categories:

41

(cid:1)  Criminal or terrorist threats:

–  direct  threats:  a  deliberate  intention  to  introduce  prohibited  goods  such  as  explosives,  or

nuclear, biological or chemical weapons;

– 

indirect  threats:  smuggling  or  trafficking  in  illegal  goods  (drugs,  cigarettes,  alcohol,
counterfeit  goods)  to supply  or  finance terrorist  or  organised  criminal  organisations  (money
laundering).

(cid:1)  Health and safety risks to consumers:

Health risks: these are concerns linked to bio-safety threats, e.g., as a result of non-authorised
imports  of  contaminated  products  (the  spread  of  some  cases  of  mad  cow  disease  has  been
attributed  to  the  import  of  contaminated  meat)  or  products  arising  from  new  scientific
developments such as GMOs. In terms of consumption, narcotics, anabolic substances or other
doping agents can also be classed in this category.

Risks linked to dangerous products: these cover certain counterfeit goods or goods which
do not meet Community safety standards, e.g., medicines, food products or utensils (lighters,
spare parts, etc.).

(cid:1)  Environmental and health risks: these include the illegal introduction of fauna and flora species

in danger of extinction, radioactive material or sick animals.

Risks to public security: trafficking in illegal arms or drugs.

To combat the increasing threat of deliberate attacks or risks to the safety and security
of Community society there must be a greater focus on controls of goods.

To  counter  threats  to  security,  improvements  have  already  been  proposed  for  the  checks  of
persons  which  are  mainly  carried  out  by  border  guards,  often  in  close  co-operation  with
customs.  However  other  aspects  must  also  be  addressed  to  combat  crime,  terrorism  or  any
other security  threat  effectively.  The risks linked to the introduction  into  the Community  of
weapons,  radioactive  substances  or  explosives  or  contaminated  meat  or  sub-standard
medicines  usually  concern  movements  of  goods  at  Community  borders.  The  100 000  or  so
customs  officers  in  the  European  Union47  have  a  vital  role  to  play  by  strengthening
coordination at  European  level  and  working  in  closer  cooperation  with  other  border  control
authorities, and the police in particular.

4.

4.1

IMPROVING THE SAFETY OF GOODS

The traditional role of customs in the control of goods

Customs  sometimes  assist  the  authorities  which  are  primarily  responsible  for  checking
persons at borders. The information they gather in routine checks of travellers and vehicles, or
simply through a physical presence at borders, can often be used to detect international crime,
sometimes in close cooperation with the other security authorities.

However,  only  customs  has  sufficiently  broad  and  detailed  expertise  to  carry  appropriate
safety controls on goods.

47

This  may  seem  to  be  a  very  significant  figure  but  it  covers  all  customs  work  which  varies  from  one
Member State to another (tax, customs management and specific national duties).

42

                                                
Customs has long experience in the control of legitimate trade and has been able to establish
close contact networks with traders and  acquire a detailed knowledge of goods.  Through its
expertise  and  networks,  customs  has  access  to  information  which  it  can  use  to  better  target
and combat illegal  or  high-risk  trafficking.  In  addition  to its  special  contacts  it  has  customs
offices at all border posts including international ports  and  airports, and sometimes  even  on
traders’  premises.  It  is  therefore  the  only  organisation  which  is  able  to  track  movements  of
goods into or out of, or even within, the Community. Customs monitors movements of goods
by land, sea or air at border crossing and customs clearance points. These advantages should
be exploited to improve the safety of goods.

Customs plays a central role in the control of legal goods and hence the detection of  illegal
goods. Its presence on the borders mean it is well placed to detect illicit traffic not presented
for clearance by the normal channels. It must therefore have the necessary resources to ensure
close  and  effective  cooperation  and  coordination  with  the  other  border  security  authorities.
Customs administrations have certain types of information and have developed assistance and
co-operation  machinery;48  the  police  and  other  authorities  also  have  their  own  systems  and
sources  of  information  (e.g.,  intelligence  systems  to  detect  suspect  persons  or  criminals).
Greater sharing of all this information will play a key role in improving the detection of crime
of  whatever  origin,  while  ensuring  that  each  authority  retains  its  own  powers.  It  will  also
increase synergies between authorities.

If  customs  is  to  undertake  this  role,  customs  work  will  have  to  be  reorganised  in  order  to
rationalise external border controls. This is crucial, particularly after enlargement, as the new
Member  States  will  be  required  to  apply  Community  customs  legislation  immediately.  The
Schengen  rules  will  also  apply  from  accession  but  a  Council  decision  will  be  needed  to
remove controls at internal frontiers with the new Member States.

4.2

Rationalise customs controls at external borders

As a rule, Member States apply customs controls in accordance with Community legislation,
but it is often national interests that dictate the selection of control priorities. This inevitably
leads to different  levels and degrees of protection  from one point  to  another  in  the  customs
territory, in particular in relation to security controls that are not  yet necessarily designed at
Community level. This encourages illicit trafficking at border points where controls are weak.
This  gap  has  to  be  plugged.  The  level  of  protection  at  external  borders  must  be  made  as
uniform  as  possible  by  identifying  security  controls  common  to  all  Member  States,
particularly as, in future, many controls will have to be carried out by the new Member States
and they too have their own national priorities.

The  Member  States  responsible  for  management  of  the  external  border  are  also  responsible
for the security of the Community as a whole and not only for that of their own country. It is
therefore in the Community interest to ensure that the principal security risks are addressed in
a timely and harmonised manner at each point on the external border.

48

Council Regulation (EC) No 515/97 of 13 March 1997 on mutual assistance between the administrative
authorities of the Member States and cooperation between the latter and the Commission to ensure the
correct application of the law on customs and agricultural matters (see footnote 8); Convention drawn
up on the basis of Article K.3 of the Treaty on European Union, on mutual assistance and cooperation
between customs administrations (OJ C 24 , 23.1.1998).

43

                                                
That will mean that customs operations will have to be reorganised to make the controls
as effective as possible through a process of rationalisation involving priority setting and
combining effective security and optimum management of resources.

Customs will play two distinct roles:

– 

a  tax  and  commercial  role  to  protect  Community  and  national  economic  and
financial interests;

– 

a safety and security role to protect European society.

The risks involved in these two roles will  have  to  be  weighed  in  order  to  identify  the  main
risks necessitating controls to be undertaken at external borders. For other, equally important,
risks, controls could be undertaken elsewhere, provided that this does not lead to any increase
in  fraud.  The  objective  will  be  to  focus  at  border  posts  controls  of  the  greatest  risks,  i.e.,
controls  which  could  have  irreparable  consequences  if  they  are  not  carried  out  when  goods
cross borders.

Controls  undertaken  under  customs’  tax  and  commercial  policy  role  could,  in  many  cases,
easily  be  carried  out  in  places  other  than  border  posts.  By  simplifying  and  modernising
customs procedures as envisaged in  the Communication  on  electronic  customs,  control  data
could  increasingly  be  transmitted  electronically  in  a  way  that  ensures  a  high  level  of
protection for Community and national interests and does not increase the risk of fraud. In the
process we could define more clearly which tax and commercial policy controls still have to
be  carried  out  at  border  posts.  Such  rationalisation  could  reduce  the  long  queues  at  border
posts.

On the other hand, many of the controls necessary for the Community’s safety and  security
can only be undertaken at border posts: it is essential to ensure that explosives, contaminated
food  or  radioactive  substances  do  not  cross  Community  borders  without  being  checked  or
seized.  Controls  which  would  not  provide  sufficient  guarantees  if  they  were  carried  out  at
customs offices inside the Community must be identified and confined to border posts.

Prioritising  of  risks  and,  hence,  of  controls  to  be  carried  out  at  border  posts  requires  the
unequivocal  endorsement  of  the  political  authorities.  Customs  must  also  be  given  the
legislative, regulatory and financial resources to implement this strategy.

4.3

Provide customs with the legislative and financial framework it requires

Before  an  overall  strategy  to  improve  the  effectiveness  of  integrated  external  border
management  can  be  introduced  we  must  look  at  controls  as  a  whole,  whether  they  be
Community  or  national.  The  arbitrary  distinction  drawn  at  Community  level  between  those
that come under the first pillar and those that come under the third pillar is incompatible with
the  objectives  of  ensuring  high-level  protection  at  all  points  on  the  external  border  without
creating  obstacles  to  legitimate  trade.  In  the  longer  term  such  a  distinction  might  well  be
abolished. Work on the European Convention  already seems to be moving in this direction.
However,  without  prejudging  the  outcome  of  the  Convention  discussions,  we  must  use
existing instruments to enhance customs’ security role.

Customs  uses  two  strategies  to  track  movements  of  goods:  a  control  strategy  based  on
customs procedures and an investigative strategy designed to prevent or combat fraud which
can  also  serve  as  input  either  into  the  control  selection  process  or  for  detecting  risks  not
identified in controls. Each of these strategies needs to be improved.

44

Community rules, including restrictions and prohibitions laid down by Community law, must
be  uniformly  applied.  Controls  based  on  national  measures  must  be  harmonised,  as
differences  in  implementation  from  one  Member  State  to  another  may  have  a  deleterious
impact on the Community’s security. A  common Community strategy for  controls and  their
treatment will enhance security performance throughout the Community. Such a strategy does
not  mean  that  national  risk  priorities  cannot  be  maintained  provided  that  basic  security
controls  by  all  Member  States  are  weighted  and  applied  in  the  same  way  at  all  points  on
external borders.

Customs’ investigative powers vary widely from one Member State to another. Such powers
are  a  logical  adjunct  to  customs  controls  and  essential  to  the  effective  combating  of  fraud
from its investigation to detection. A common strategy  on Member  States’  customs powers,
duties and roles is needed here. There must also be greater synergy with the police. Customs’
role in “policing”  goods must be more clearly defined. Customs must  play an  active role in
police investigations to identify or find perpetrators of fraud as their objectives are the same.
Fraud will be more effectively investigated, identified and detected by comparing police and
customs data, which is often complementary, and pooling their expertise and resources.

The Community must also encourage increasingly closer cooperation between the authorities
concerned,  harmonisation  of  working  methods,  pooling  of  relevant  information  and  the
setting of interdisciplinary networks. This will also require the development, introduction or
greater use of secure (existing or future) systems  for  the storage, processing or  exchange of
information.

The  existing  legal  framework  will  have  to  be  extended  and  adapted  to  make  these
improvements.  The  scope  of  legislation  must  be  extended  to  cover  customs  powers  and
duties. Existing customs law must also be amended to take account of  security criteria.  The
Customs Code is an example. It is primarily based on the tax and commercial policy aspects
of  customs’  role  and  pays  much  less  attention  to  “security”  aspects.  It  will  have  to  be
amended  so  that  instruments  such  as  risk  management  and  trade  facilitation  measures  take
greater account of security aspects.

Finally, it has to be said that there is still no real Community policy on the provision of the
material resources needed for such controls. This problem is likely to become more acute in
an enlarged Community. We must therefore consider appropriate financial solutions49 and
explore the possibilities offered by Community (structural or other) funds, while taking care
to avoid duplication of effort.

This  safety  and  security  dimension  must  form  an  integral  part  of  all  legal,  budgetary  and
customs instruments and working methods. The Commission can play an important role here.
It will not act in the place of the Member States, but will, in accordance with the principle of
subsidiarity and through increased coordination, encourage them to work together to achieve
common goals.

49

Including  the  possibility  of  using  the  25%  withheld  by  Member  States  as  the  cost  of  collecting
traditional  own  resources  to  finance  the  fight  against  fraud  and  the  protection  of  the  Communities'
financial  interests,  applicable  since  the  entry  into  force  of  Council  Decision  No  2000/597  of  29
September 2000.

45

                                                
5.

NECESSARY IMPROVEMENTS

5.1.

A common risk strategy

Rationalisation  of  the  risk  management  strategy  and  methods  is  an  essential  starting  point.
This  will  involve,  initially,  identifying  those  controls  which  can  be  moved  without
encouraging a proliferation of the risks that they address and those which have to be carried
out  at  border  posts.  The  objective  is  to  ensure  that  priority  is  given  to  what  is  strictly
necessary for the Community’s security and that controls are carried out where they are most
effective.

On this basis, a common risk strategy at the external border bust be:

(cid:1)  common;

(cid:1)  rationalised;

(cid:1)  computerised;

(cid:1)  complete;

Common

The controls which must be maintained at border posts for reasons of safety and security have
to be weighed in order of priority. All the authorities concerned (customs, police, consumer;
health,  environmental  and  other  authorities)  must  work  together  to  establish  these  priorities
and to define the relevant common risk profiles. The profiles established must then be used to
select from the data made available by all the agencies concerned that which will be the most
useful  for  risk  analysis.  Although  some  progress  has  already  been  made  in  the  Community
there  is  a  lack  of  coordination.  There  is  an  increasing  need  for  a  single  organisational
framework for all these authorities to coordinate efforts and to identify any improvements or
innovations which may be necessary.
The Commission Communication of May 2002 proposed the setting up of a common external
border practitioners unit  comprising  the  heads  of all the authorities responsible for safety at
external borders to oversee and plan operations.50

Within this authority  (assuming  it  turns  out  to  be  multi-disciplinary)  or  some  other  form  of
organisation to be defined, customs would be responsible for all matters relating to the control
of  legally  and  illegally  traded  goods,  in  cooperation  with  the  other  authorities.  Customs
guidelines could then be discussed in the light of the policies adopted at Community level by
the Customs Policy Group and in synergy with the work of other groups. The unit’s activities
could  then  if  necessary  be  extended  beyond  those  under  Article  66,  as  proposed  in  the
previous Communication, and not confined to aspects connected with the  free movement of
persons.

50

This unit would act as a “head” of the common policy of management of the external boarders to carry
out  common  and  integrated  risk  analysis;  act  as  a  “leader”  coordinating  and  controlling  operational
projects on the ground, in particular in crisis situations; act as manager and strategist to ensure greater
convergence  between  the  national  policies  in  the  field  of  personnel  and  equipment;  exercise  a  form
power  of  inspection,  in  particular  in  the  event  of  crisis  or  if  risk  evaluation  demands  it”.
COM(2002) 233, p. 14.

46

                                                
Rationalised

All goods-related data should be sent by traders to customs for an initial risk selection to be
carried  out  on  the  basis  of  common  profiles.  Certain  information  would  be  required  before
goods actually arrived. This would enable customs to centralise the requisite data and reduce
the number of channels currently used. Customs’ expertise in goods and trade could thus be
made  available  to  other  authorities  without  encroaching  on  their  respective  areas  of
responsibility.  Customs  would  immediately  forward  to  the  relevant  authorities  the  risk
information they collect which was of relevance to them, so that they could follow it up.

This  will  mean  establishing  a  single  channel  for  transmission  and  subsequent  processing  of
information on the basis of profiles established by all the authorities concerned. This approach
will have the dual advantage of clarifying the organisational framework required to guarantee
the safety of the Union’s future border and of simplifying the administrative formalities which
have  to  be  fulfilled  by  traders,  e.g.  obviating  the  need  to  send  two  or  three  copies  of  data
common to several authorities or introducing a standard format for information transmission.

Effective  and  rapid  systems  for  information  transmission  between  customs  and  the  other
relevant authorities will have to be set up. COM(2002) 233 proposed the introduction by the
external frontier practitioners unit of a security procedure (PROSECUR) for the rapid transfer
of  information  between  the  authorities  responsible  for  the  security  of  the  external  border.
Customs and other authorities responsible for implementing customs regulations represented
within  this  unit  would  be  responsible  for  overseeing  these  procedures  for  the  exchange  of
information on goods, based on suitably adapted versions of the existing information systems
(Taric, the anti-fraud information system AFIS, or the customs information system CIS).51
This  work  would  form  an  integral  part  of  an  overall  approach  deploying  all  resources,
according  to  the  nature  of  information  and  the  risks  identified,  to  establish  direct  links  and
exchanges between the relevant authorities.

Computerised

Availability  of  data  is  not  the  only  important  aspect;  data  must  also  be  delivered  in  an
appropriate form at the right time and at the right place. Data must be accessible in electronic
format for a rapid evaluation of the risks involved in highly significant movements of goods.
At  present,  data  is  not  always  sent  to  the  customs  in  this  form.  In  some  Member  States,
information on customs declarations exists in electronic form, but it is not always possible to
transfer it quickly to where it would be most useful; in other Member States, information (in
particular  export  data)  is  only  transmitted  manually.  Other  sources  of  data  such  as  bills  of
lading,  which  are  essential  for  early  risk  evaluation,  are  even  less  often  accessible  in
electronic form.

Transmission of data by electronic means should become standard practice to ensure that it is
rapidly  and  effectively  processed.  That  will  mean  traders  will  have  to  use  the  electronic
format  but  there  must  be  a  margin  of  flexibility  for  SMEs  and  private  individuals.  The
requisite  customs  databases  will  also  have  to  be  introduced  at  Community  and/or  national
level.

51

Council Regulation (EC) No 515/97 of 13 March 1997, OJ L 82, 22.3.1997; Convention on the use of
information technology for customs purposes, OJ C 316, 27.11.1995.

47

                                                
Complete

A  common  approach  to  risk  management  will  be  useful  only  if  it  is  accompanied  by  a
common  approach  to  the  controls  needed  to  detect  hazardous  goods.  That  will  mean  the
nature  and  type  of  control  required  must  be  defined  and  control  standards  must  be  set  to
determine  where  and  by  whom  controls  should  be  carried  out  and  with  what  type  of
specialised equipment.

A common rationalised, computerised and complete  risk-based approach will help make the
Community a safer place as it will enable basic risks to be prioritised and treated in the same
way along its external border. But there will always be some risk and means will have to be
taken to correct what customs fails to detect. Customs’ experience in identifying and tracking
flows  of  goods  must  be  exploited  everywhere  (at  border  and  internal  customs  posts)  in  all
areas or sectors where it can benefit the Community’s  security.  Customs’  role in  “policing”
goods must be clarified here. Customs must be able to take part in investigations undertaken
to  detect  or  identify  perpetrators  of  fraud.  Greater  synergy  between  customs  and  the  police
will also help to more effectively identify and prevent fraud.

5.2.

Guarantee an adequate level of human resources and equipment

It is essential to ensure there is an adequate level of human resources and equipment to carry
out the controls which are required. It is in the Community’s interests to ensure a sufficient
level  of  resources  and  equipment  at  external  borders.  The  external  borders  do  not  only
concern  the  country  geographically  involved,  they  concern  all  the  Community’s  Member
States.  It  is  therefore  essential  that  national  and  Community  parameters  be  used  to  identify
practical needs. There are two immediate concerns:

(cid:1)  Availability  of  the  minimum  level  of  equipment  required  (e.g.  scanners,  radiation
detectors, etc.) at each control point must be ensured. An inventory of necessary/existing
equipment  could  be  used  to  determine  the  equipment  level  to  be  attained.  To  avoid
disproportionate costs, some border posts should specialise in controlling certain types of
goods where this involves special and expensive equipment. This would make it possible
to spread equipment costs more equitably and to concentrate the specific expertise required
at these points. Care must be taken, however, to see that this does not result in additional
non-tariff  barriers  being  placed  in  the  way  of  legitimate  trade,  e.g.  the  extra  cost  of
presenting goods at designated specialist customs posts remote from their destination.

(cid:1)  The  possibility  of  setting  up  rapid  response  teams  to  deal  with  unexpected  risks
should be explored. To ensure a high level of safety and security at every point along the
external  border  quickly  it  must  be  possible  to  provide  a  rapid  response  to  unforeseen
dangers or risks wherever they occur. The constitution of a “European reserve unit”, which
could  be  mobilised  at  any  given  time  and  anywhere  would  be  a  way  of  doing  so.  The
possibility  of  mobilising  highly  specialised  expertise  units  would  make  it  possible  to
harmonise the levels and types of controls carried out at any point on the external border.

It  should  be  noted  that  the  Member  States  are  responsible  for  the  use  and  financing  of
resources  but  the  Commission  can  encourage  coordination  between  Member  States  and
identification  of  the  most  appropriate  means  and  Community  solutions  where  desirable  and
possible.

48

5.3.

Facilitate trade without compromising safety and security

The aim of this Communication is to rethink and strengthen customs’ security role. That does
not, however, mean its other functions should be considered to be less important.

Customs  in  particular  plays  a  vital  economic  role:  it  contributes  to  the  smooth  flow  of
legitimate  trade.  If  administrative  formalities  and  customs  procedures  are  slow,  if  every
consignment  of  goods  which  crosses  borders  has  to  be  physically  checked,  customs  would
become  an  obstacle  to  trade  with  the  Community.  This  is  neither  its  aim,  nor  its  function.
Customs must have a positive economic impact. It is for this reason that numerous measures
have  been  taken  to  facilitate  trade  by  speeding  up  and  simplifying  customs  procedures  and
controls concerning legitimate trade. Instruments such as the February 2001 Communication
on a strategy for the Customs Union, the 2002 Customs programme and customs cooperation
projects  with  non-Community  countries  have  made  a  strong  contribution.  This
Communication underlines the importance of these measures and the need to continue them
while  ensuring  an  appropriate  trade-off  between  protection  of  the  Community  and  its
citizens and facilitation of legitimate trade.

By  way  of  example,  trade  facilitation  measures  include  the  simplification  of  customs
formalities.  But  up  to  now  facilities  have  been  granted  mainly  in  the  light  of  tax  and
commercial risks.

Consequently  we  also  need  to  consider  the  question  of  security  in  the  transport  sector.
Facilities are generally granted to traders, importers or exporters who are sufficiently known
to customs or who have provided the necessary guarantees. But, except in the case of transit,
there  is  not  yet  any  guarantee  in  respect  of  intermediaries  (carriers,  etc.).  Authorising
producers will not enhance security unless carriers are also equally reliable.

The whole of the current “facilitation” strategy must therefore be reviewed as the granting of
facilities must also be conditional on safety and security criteria. This will of course mean that
the entire supply logistics chain must be made more secure. The World Customs Organisation
is also looking at these issues, so we need to keep track of each other's work with a view to
coordinated implementation.

5.4.

Study the possibility of responsibility-sharing

A  number  of  initiatives  have  introduced  the  concept  of  sharing  responsibility  for  controls
between trading partners. The latest, an American initiative on container safety, proposes the
sharing of data on goods which move from one country to another so that high-risk traffic can
be  more  effectively  identified.  This  approach  is  interesting  from  the  viewpoint  of  greater
international security, but at European level, it will not produce the anticipated effects unless
it is introduced at Community level and is based on close cooperation between Member States
and any third countries concerned.

At European level, the principal component of this approach would have to be retained: it is
usually  easier  to  carry  out  checks  in  the  exporting  country  than  at  entry  points.  If  this
approach is put into practice it will enable information to be transferred from the point where
it  can  be  most  easily  located  and  is  most  complete  to  speed  up  customs  procedures  for
legitimate trade without compromising safety. This will save time and increase efficiency.

49

The Community should promote this principle of shared responsibility, in particular with the
countries  with  which  it  shares  an  external  frontier  and  with  its  main  airborne  or  seaborne
trading partners.

Of course, the principle of shared responsibility also applies to the Community which must,
for  example,  assume  its  own  responsibilities  for  controlling  exports.  To  date  Community
controls  have  focused  on  imports  and  export  controls  are  comparatively  weak.  The
Community is an important trading area and must therefore protect not only itself but also the
rest  of  the  world,  in  particular  the  most  vulnerable  developing  countries,  against  fraudulent
and  criminal  intentions  (e.g.  illegal  exports  of  banned  or  dangerous  chemicals).  Export
controls are an important security aspect that must not be neglected. If certain export control
duties  were  assigned  to  internal  customs  posts,  the  Community  would  be  better  able  to
discharge  its  responsibility  without  overloading  controls  at  external  borders.  Computerised
transmission of the necessary data would make it possible to check instantaneously at border
posts  whether  the  necessary  controls  had  actually  been  carried  out.  However,  individual
controls requiring special or expensive equipment have to be carried out at specialised border
posts.

5.5.

Strengthen cooperation with non-Community countries

Effective  integrated  management  of  the  external  border  will  require  an  overall  cooperation
policy with non-Community countries.

Close co-operation with neighbouring countries is essential to ensure effective surveillance of
common  borders.  We  need  to  continue  and  build  on  regional  initiatives.52  The  recent
Commission  Communication  "Wider  Europe  -  Neighbourhood:  A  New  Framework  for
Relations  with  our  Eastern  and  Southern  Neighbours"53  likewise  emphasises  that  frontier
offices  are  primarily  crossing  points  and  that  to  preserve  that  function  while  providing  the
necessary security, greater cross-border cooperation is crucial.

Cooperation  with  non-Community  countries  must  also  be  strengthened  through  agreements
tailored  to  the  mutual  needs  of  each  country  or  geographical  area  and  the  Community.  We
have already been made considerable efforts in this direction. These will have to be continued
and adapted to any new needs which arise.

5.6.

Support measures for enlargement

The accession of the new Member States at a time when new countries are joining the WTO
will lead to an increase in trade but also create greater opportunities for criminals. .

Additional  special  measures  could  be  envisaged  to  support  the  new  Member  States  in  the
run-up to accession, giving them the benefit of the best existing customs practice for example
by  setting  up  joint  teams  of  customs  officers  from  the  Member  States  and  the  applicant
countries  to  deal  with  specific  technical  questions,  at  the  latter's  own  request.  The  Customs
2007 modernisation programme could be used here.

52

53

Such  as  the  Imatra  process  launched  in  1999  and  measures  taken  by  the  Baltic  Customs  Conference,
within the framework of the Baltic Council.
COM(2003) 104 final, 11.03.2003

50

                                                
6.

CONCLUSIONS AND RECOMMENDATIONS

As enlargement approaches and in view of increasing security concerns it is essential that the
Community place the resources at its external borders to guarantee the safety and security of
its  citizens.  Customs  bear  prime  responsibility  for  controls  of  goods  to  safeguard  the
Community’s  security  and  economic  development.  Customs  controls  and  working
methods must be redesigned to protect the Community and its citizens against criminals
or  terrorists.  This  will  have  to  be  undertaken  within  a  general  and  integrated
framework  for  the  management  of  external  borders  and  will  require  not  only  new
organisational  structures  but  also  mechanisms  for  close  cooperation  and  coordination
between the authorities involved.

For such a strategy to be successful, the Commission must act as a catalyst for change and as
a dynamic coordinating force. Any action undertaken will only be useful if it is implemented
throughout the Community. This will require financial commitments at Community level.

The  Commission  calls  on  the  Council,  European  Parliament  and  the  European
Economic and Social Committee to discuss the guidelines  proposed  and to support  the
measures described above so that proposals for their implementation can be presented
without delay.

To this end, the following guidelines are recommended:

I.

RATIONALISE THE NUMBER OF CUSTOMS CONTROLS AT CUSTOMS BORDER POSTS

1.1.

Spread customs workload between border and internal posts:

– 

– 

by identifying and selecting the priority risks to be addressed;

by developing appropriate control methods (e.g., based on a coordinated post-
clearance audit strategy);

– 

by adapting trade fluctuations to take account of safety and security criteria.

1.2.

.Make  the  goods  supply  logistics  chain  secure  by  developing  and  improving
techniques to track goods and their means of transport:

II. INTRODUCE A COMMON APPROACH TO GOODS-LINKED RISKS AND IMPLEMENT IT USING A

COMMON COLLABORATION AND COOPERATION MECHANISM

2.1

The  customs authorities, in cooperation with other relevant authorities,  must  guide,
monitor and adapt the handling of risks linked to goods at external borders. This will
involve:

– 

– 

defining, identifying and weighing at Community level common priority risks;

setting up a future organisational structure for common risk profiles which can
be regularly adapted in the light of results;

51

– 

defining  at  Community  level  what  controls  are  carried  out  when  risks  have
been defined and developing control standards.

2.2

All  risk  information  relating  to  goods  required  for  common  risk  profiles  must  be
provided by traders to Community customs authorities through a single transmission
channel.

– 

– 

data must be sent electronically;

certain selected data must be sent before the arrival of goods by a time limit to
be agreed.

2.3

A data base and systems must be set up (and/or existing systems suitably meshed to
allow  cross-referencing)  for  the  storage,  processing  and  exchange  of  the  requisite
data:

– 

the data base, whether centralised at Commission level or decentralised in the
Member States, must be accessible to all national customs authorities;

–  Member  States  must  undertake  to  introduce  computerised  risk  selection
systems  into  which  risk  profiles  identified  at  Community  level  can  be  fed  to
supplement national profiles;

– 

information on goods gathered by customs must be sent quickly and efficiently
to other authorities and systems must be introduced (or existing systems cross-
linked) to exchange targeted information between all these authorities.

III.

3.1

GUARANTEE  AN  ADEQUATE  LEVEL  OF  HUMAN  RESOURCES  AND  EQUIPMENT  AT
EXTERNAL BORDERS

Ensure  that  the  resources  required  to  guarantee  a  high  level  of  security  at  external
borders are made available. For this purpose:

–  Member  States  must  provide  and  train  the  customs  officers  needed  (the

Customs 2007 programme could be used if necessary);

– 

– 

– 

the  minimum  equipment  needed  must  be  defined  (at  Community  level)  and
made available (at national level);

consideration must be  given  to  possible ways of using Community  budgetary
resources to finance equipment costs, insofar as the Treaties allow;

we should identify the scope for greater synergy with other border authorities
or concentration of expensive customs equipment at specialised border posts to
produce economies of scale.

3.2

Consider specific measures in the run-up to accession to give acceding countries the
benefit of the best existing customs practice, for example by setting up joint teams of
customs  officers  from  present  and  future  Member  States  to  deal  with  specific
questions, at the latter's own request.

52

3.3

3.4

3.5

IV.

4.1

4.2

4.3

4.4

V.

5.1

5.2

5.3

Consider  setting  up  rapid-reaction  teams  to  deal  with  unexpected  risks.  This  could
take  the  form  of  a  list  of  contact  points  for  each  Member  State  and  specialised
reservists who could be quickly mobilised at the request of one or other State. This
should  not  involve  any  disproportionate  budgetary  or  legislative  costs.  At  a  later
date, the formation of interdisciplinary and specialised teams to deal with particular
risks  could  be  put  on  a  more  formal  footing  as  part  of  the  discussions  on  the
formation of a European border guard unit.

Identify best working practices for security at external borders and develop and apply
these at Community level on the basis of national and Community experience.

Devise  common  training  measures  and  an  organisational  framework  for  training  in
the management of external borders for goods controls.

A LEGAL AND REGULATORY FRAMEWORK INTEGRATING THE SECURITY DIMENSION
OF CUSTOMS WORK SHOULD BE SET UP

Extend the scope of legislation to cover customs powers and duties.

Amend  legislation  and  regulations,  in  particular  the  Customs  Code  and  its
Implementing  Provisions,  to  incorporate  developments  in  risk  management,  take
account  of  safety  and  security  criteria  in  authorising  trade  facilitation,  and  ensure
better  surveillance  of  the  logistics  chain,  while  ensuring  that  the  new  measures
comply  with  relevant  international  norms,  do  not  restrict  trade  and  are  not
disproportionate to their ends.

interests  with
Promote  responsibility-sharing  agreements  based  on  mutual 
neighbouring  countries  and  the  Community’s  main  seaborne  and  airborne  trade
partners.  This  will  also  involve  identifying  high-risk  trade  flows  at  source  in
non-Community  countries  or  territories,  enabling  us  to  plan  controls  which  should
save time, money and infrastructure and also promote cross-border cooperation.

Continue or step up cooperation with non-Community countries.

CLOSER  COOPERATION  WITH  THE  POLICE,  BORDER  GUARDS  AND  OTHER
AUTHORITIES AT EXTERNAL BORDERS

Strengthen operational cooperation and exchange of information at Community and
national  level  between  external  frontier  surveillance  authorities  (border  guards,
health,  veterinary  and  environmental  authorities  and  others)  where  their  duties  and
responsibilities overlap.

Establish  cooperation/coordination  structures  between  these  authorities  at  the  most
important border posts.

The  information  in  the  possession  of  customs  and  police  is  interlinked  and
complementary. Their synergies should be enhanced by allowing customs to play an
active  part  in  police  investigations  to  detect,  identify  and  prosecute  criminals
involved  in  trafficking  (and  vice  versa),  introducing  common  data  exchange  and
comparison systems to help identify emerging frauds and perpetrators of fraud, and
ensuring systematic cooperation between customs and the police.

53

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

(presented by the Commission)

54

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

55

– 

– 

– 

– 

– 

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).

56

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.

57

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.

58

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 Commission54,

Having regard to the opinion of the European Economic and Social Committee55,

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

Whereas:

(1)

(2)

(3)

Council  Regulation  (EEC)  No  2913/92  of  12  October  1992  establishing  the
Community  Customs  Code56,  as  last  amended  by  Regulation  (EC)  No  2700/200057
lays  down  the  rules  for  the  customs  treatment  of  goods  that  are  imported  or  to  be
exported.

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.

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

54

55

56

57

OJ C […] […], p. […]
OJ C […] […], p. […]
OJ L 302, 19.10.1992, p. 1.
OJ L 311, 12.12.2000, p. 1.

59

                                                
(4)

(5)

common  to  all  Member  States  should  not  prevent  them  from  controlling  goods  by
spot-checks.

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.

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,

60

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.

2.

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.

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

61

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)

(b)

(c)

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

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

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

62

6.

7.

8.

9.

Title  III  of  Chapter  3  shall  be  changed  to  “Unloading  of  goods  presented  to
customs”.

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.”

Articles 43 to 45 shall be deleted

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.”

63

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.

13.

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

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.

64

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

by:

(a)

(b)

(c)

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

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

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
The President

For the Council
The President

65

1.

2.

3.

4.

5.

5.0

5.1

FINANCIAL STATEMENT

BUDGET HEADING: B 5307

DATE:
APPROPRIATIONS:

TITLE:
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)
LEGAL BASIS:
Articles 26, 95, 133, 135 EC Treaty
AIMS:
Take into account security requirements
FINANCIAL IMPLICATIONS

12 MONTH
PERIOD

CURRENT
FINANCIAL
YEAR
[n]
(EUR million)
1,47

FOLLOWING
FINANCIAL
YEAR
[n+1]
(EUR million)
2,04

(EUR million)
0,3

CHARGED TO THE EC BUDGET

NATIONAL AUTHORITIES
OTHER

EXPENDITURE
-
(REFUNDS/INTERVENTIONS)
-
-
REVENUE
-
(LEVIES/CUSTOMS DUTIES)
NATIONAL
-

OWN RESOURCES OF THE EC

5.0.1 ESTIMATED EXPENDITURE
5.1.1 ESTIMATED REVENUE
5.2 METHOD OF CALCULATION: IT project cost estimate

[n+2]
2,34

[n+3]
1,99

[n+4]

[n+5]

6.0

6.1

CAN THE PROJECT BE FINANCED FROM APPROPRIATIONS ENTERED IN THE
RELEVANT CHAPTER OF THE CURRENT BUDGET?
CAN TRANSFER BETWEEN CHAPTERS OF THE CURRENT BUDGET FINANCE
THE PROJECT?

6.2 WILL A SUPPLEMENTARY BUDGET BE NECESSARY?
6.3 WILL APPROPRIATIONS NEED TO BE ENTERED IN FUTURE BUDGETS?
OBSERVATIONS:
Financial implications are linked to the setting up of an automated system for risk management

YES

NO
NO
NO

66

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.

67

– 

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.

68