Communication from the Commission to the Council, the European Parliament and the European Economic and Social Committee - Strategy for the evolution of the Customs Union
Date: 2008-04-01
Institutions: European Commission
Subjects: customs inspection, customs regulations, customs union

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COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels, 1.4.2008 
COM(2008) 169 final 

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

Strategy for the evolution of the Customs Union 

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

Strategy for the evolution of the Customs Union 

1. 

INTRODUCTION 

The Customs Union of the European Union (EU), which celebrates 40 years on 1 July 2008, 
is a foundation of the European Community. Since its creation, the Customs Union has been 
expanded both quantitatively – from 6 to 27 members, and qualitatively by becoming a Single 
Market. It has contributed to prosperity in Europe by facilitating trade both within the Union 
and with third countries.  

The Commission, together with Member States, has undertaken a major review of the role of 
customs and the findings have been discussed at a senior level with Member States' customs 
administrations. There is a broad agreement that there is a need to improve working methods 
but that overall coordination should be reinforced. It is important therefore to ensure there is 
political support for the strategy outlined in this Communication. 

Today's  Customs  are  facing  a  rapidly  changing  environment:  evolving  production  and 
consumption  patterns,  increasing  international  trade,  global  threats  such  as  terrorism, 
organised crime, climate change and new hazards like trade in dangerous goods.  

In this context, the Customs authorities of the EU play a crucial role: their mission is to ensure 
at all times the balance between protecting society and facilitating trade through the control of 
the  supply  chain,  at  the  external  border  as  well  as  within  the  EU.  Customs  services  have 
information about every movement of goods imported into or exported from the EU and they 
apply sophisticated systems and methods to control all types of goods. The volumes of goods 
movements across the external borders of the European Union are enormous. 

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3.000

2.500

2.000

1.500

1.000

500

0

-500

Extra EC/EU* Trade (1968-2007)

Billions of Ecu/euro

Balance
Imports
Exports
Trade

EC6

EC9

EC10

EC12

EU15

EU25

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2
U
E

1968 1969 1970 1971 1972 1973 1974 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007**

* Extra EC6 (1968-1972), Extra EC9 (1973-1980), Extra EC10 (1981-1985), Extra EC12 (1986-1994), Extra EU15 (1995-2003), Extra EU25 (2004-2006), Extra EU27 
(2007).
** Estimation  based on 11 months of 2007, and the share of december 2006 trade in 2006 trade.

Approximately 173 million customs declarations were handled in 20061. Only highly efficient 
customs authorities can manage such a huge volume without causing major delays or allowing 
fraudulent, undesirable or illegal movements.  

In order to allow Customs to continue to play their role in this challenging environment, an 
ambitious  reform  has  been  launched.  First,  the  legal  environment  is  being  modernised  with 
the  imminent  publication  of  the  recently  adopted  Modernised  Customs  Code2.  Second,  a 
European  Parliament  and  Council  Decision  is  being  implemented  to  create  a  pan-European 
electronic customs system3 - that is a paperless environment for customs and trade - aiming at 
building  a  robust  communication  chain  between  all  customs  offices  in  the  Community, 
between  customs  and  other  public  authorities  operating  at  the  border,  and  between  public 
authorities and traders.  

touches  upon 

The  present  Communication  aims  at  completing  the  reform  process  with  a  further  element, 
which 
the  future  organisation  and  human  dimension  of  customs 
administrations.  It  proposes  a  comprehensive  long-term  development  based  on  renewed 
strategic objectives for Customs. It suggests modernising working methods, developing staff 
competences and re-allocating resources in an efficient and effective manner.  

This  final  element  of  the  reform  process  would  enable  customs  to  evolve  in  line  with 
international trade, so as to continue to offer the protection expected by citizens, business and 
governments, whilst contributing to the economic competitiveness of the EU. 

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3 

The value of imports and exports in 2006 was over 2 500 billion EUR 
Proposal for a Regulation of the European Parliament and of the Council laying down the Community 
Customs Code (Modernized Customs Code), COM(2005)608 dated 5.12.2005 and Common position of 
the Council, OJ C298E of 11.12.2007, p. 1 
Decision 70/2008/EC of the European Parliament and of the Council, OJ L 23 of 26.1.2008, p.21. 

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2. 

CUSTOMS: A CRUCIAL ROLE 

The creation of the Single Market meant that all customs formalities at the borders between 
Member  States  were  abolished.  National  Customs  authorities  became  responsible  for  the 
protection  of  the  external  border  in  relation  to  goods,  becoming  the  only  firewall  between 
international  illicit  or  dangerous  trade  and  the  freedom  of  movement  of  within  the  Single 
Market. 

National  Customs  authorities  also  share,  inter  alia,  the  responsibility  of  protecting  the 
financial  interests  of  the  Community  at  a  high  level  of  efficiency,  since  duties  charged  on 
imported products represent 15% of the total revenue of the Community’s budget (approx. 17 
bn euro/year). 

Since  the  Single  Market  was  created  in  1993,  the  international  commercial  context  has 
changed: the sourcing of goods and materials has become increasingly global, and concepts, 
such  as  just-in-time  delivery,  are  raising  the  expectations  from  economic  operators  of  less 
intrusive  customs  controls.  At  the  same  time,  terrorist  and  criminal  organisations  have 
become increasingly sophisticated in their methods.  

The  Customs  authorities  of  the  EU  have  a  pivotal  role,  in  close  cooperation  with  other 
authorities, allowing them to:  

•  Support legitimate trade and strengthen competitiveness 

•  Ensure the correct payment of duties and taxes 

•  Combat counterfeiting and piracy 

•  Support  the  fight  against  other  types  of  fraud,  organised  crime,  drugs  and  terrorism  by 
processing  information,  identifying  changes  in  trade  patterns  and  undertaking  risk 
assessment to detect fraudulent, terrorist or criminal activity 

•  Implement trade policy measures (for example, trade preferential agreements, quotas and 

anti-dumping measures) 

•  Protect the environment and citizens against all sorts of hazardous goods. 

3. 

ADAPTING TO A CHANGING AND CHALLENGING ENVIRONMENT 

Customs  authorities  today,  faced  with  this  rapidly  changing  and  challenging  environment, 
must ensure that they continue to provide a first-class service to EU citizens and companies.  

The  modernisation  and  simplification  of  the  customs  legal  and  technological  environment 
started several years ago with a major amendment to the Community Customs Code4 adopted 
in  2005,  which  gave  EU  customs  authorities  the  powers  to  implement  some  of  the  most 
advanced  security  requirements  in  the  world,  while  creating  an  environment  that  does  not 
disrupt legitimate trade. This amendment is expected to be fully implemented by mid 2009. 

4 

Regulation (EC) 648/2005 of the European Parliament and of the Council amending Council Regulation 
(EEC) No 2913/92 establishing the Community Customs Code, OJ L 117 of 4.5.2005, p.13. 

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The  Modernised  Customs  Code  will,  when  fully  implemented,  provide  the  necessary 
simplifications to make customs and trade work better, faster and cheaper.  

The  Electronic  Customs  Decision  already  provides  a  significant  step  forward  in  linking 
national  customs  Information  and  Communication  Technology  systems,  benefiting  both 
customs  and  trade.  By  meeting  the  needs  of  modern  logistics,  a  pan-European  electronic 
customs  will  increase  the  competitiveness  of  companies  doing  business  in  Europe,  reduce 
compliance costs and improve security at the EU borders. 

The proposal5 to amend the mutual administrative assistance provisions in customs matters6 
will streamline and improve the current IT systems and enhance capacity in the fight against 
fraud in the customs sector.  

These are important legal and technological steps which will better equip customs both for the 
immediate future and the medium term.  

But it is necessary to look beyond this and to set out a strategic framework to  modernise 
customs  working  methods  and,  accordingly,  properly  allocate  resources,  in  a  coordinated 
manner.  

4. 

A STRATEGIC FRAMEWORK… 

The  overarching  objective  is  to  maintain  the  pivotal  position  of  Customs  as  a  modern, 
responsive  partner  to  trade,  protecting  the  fiscal,  safety  and  security  interests  of  the 
Community  and  cooperating  with  other  government  agencies,  and  equipped  to  respond  to 
crisis  and  new  public  policy  demands.  To  do  so,  EU  customs  must  fulfil  common  strategic 
objectives. 

… with Common Strategic Objectives : 

•  Protection: To protect society and the financial interests of the Community by: 

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3. 

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ensuring the correct and efficient collection of duties and taxes; 

applying effective measures against the movement of illicit, restricted and prohibited 
goods;  

further developing effective risk assessment to contribute to the fight against terrorist 
and criminal activity, including trade in illicit drugs, counterfeited and pirated goods;  

preventing, detecting and, within national frameworks, investigating and prosecuting 
for fraud or abuse of customs legislation; 

Proposal to amend 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 
(COM(2006) 866 dated 22.12.2006) 
Mutual  administrative  assistance  provisions  in  customs  matters  concluded  between  the  EU  and  third 
countries  

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5. 

using  mutual  administrative  assistance  to  ensure  correct  application  of  the  law  in 
customs and agricultural matters.  

•  Competitiveness: To support the competitiveness of European companies by : 

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2. 

3. 

modernising  the  environment  and  the  working  methods  of  customs  (e.g.  by 
foreseeing  the  use  of  systems-based  approaches,  increased  harmonised  working 
methods, etc.);  

implementing the paperless customs environment (electronic customs) and 

adopting  a  pro-active  approach  towards  standards,  by  endorsing  international 
standards  such  as  those  developed  by  the  World  Customs  Organization,  where 
appropriate, and developing new EU standards, which could serve as a model world-
wide. 

•  Facilitation: To further facilitate legitimate trade by: 

1. 

2. 

designing and  improving control systems which reduce the interference in the flow 
of goods as well as the administrative burden to the minimum necessary to achieve 
other public policy objectives such as security requirements and by 

providing  facilitations  to  legitimate  economic  operators  with  a  view  to  reducing 
compliance costs. 

•  Control: To control and manage the supply chains used for the international movement of 

goods by: 

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2. 

3. 

4. 

improving  and  strengthening  effective  checks  at  their  optimum  location  (border  or 
inland) in the supply chain;  

correctly and consistently implementing Community and national legislation relating 
to the control and movement of goods;  

enhancing effective and systematic sharing of risk information;  

giving  consideration  to  the  possibilities  for  sharing  information  with  major  trading 
partners in order to establish end-to-end control and management of the supply chain. 

•  Cooperation:  to  maintain,  develop  and  enhance  good  quality  cooperation  between  the 
customs  authorities  of  the  Member  States,  between  customs  and  other  governmental 
agencies, and between customs and the business community by : 

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3. 

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deepening existing customs cooperation;  

coordinating action aimed at protecting the financial interest of the Community 

taking  the  lead  in  developing  mechanisms  to  co-ordinate  with  other  border-related 
agencies as seamlessly as possible (Single Window);  

improving the mechanisms for business co-operation and consultation. 

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5. 

reinforcing  international  cooperation  or  mutual  administrative  assistance  on 
customs  issues  through  appropriate  agreements  with  third  countries  and  extend 
participation in international fora responsible for international law or decisions (such 
as embargoes, environmental agreements, IPR agreements, etc). 

•  …and a common approach to develop new working methods and competences : 

In  order  to  meet  these  strategic  objectives,  an  approach  must  be  developed  to  further  adapt 
and improve the common working methods for customs. Only continuous development and 
strategic  investment  in  skills,  competences  and  resources  can  maintain  customs 
efficiency and effectiveness. The strategy outlined in this Communication offers a structured 
approach  which  will  permit  developments  to  be  made  in  a  synchronised  and  harmonised 
way throughout the 27 Member States. 

5. 

NEED FOR A STRATEGIC FRAMEWORK  

To achieve all this, political support from Member States is of paramount importance. Before 
preparing  a  strategic  plan  (which  will  set  out  the  strategy  in  general  terms)  and  a 
comprehensive implementation plan (which will provide a detailed planning tool covering all 
the  actions  and  projects  necessary  to  achieve  the  strategic  plan),  in  close  cooperation  with 
Member States, the Commission needs to ensure that the Council shares the common strategic 
objectives and the development of the common approach, as set out above.  

Based  on  the  experience  acquired  with  the  implementation  of  the  Electronic  Customs 
Decision,  where  a  multi-annual  strategic  plan  provides  a  basis  for  all  actors  (Commission, 
Member States and economic operators) to make their own resource planning, it is proposed 
to  develop  a  similar  strategy  to  ensure  a  coordinated  and  common  implementation  of  the 
common strategic objectives listed above. 

6. 

CONCLUSION 

The Commission invites the Council to: 

–  approve the above strategic framework  

–  support  the  efforts  aimed  at  ensuring  that  all  systems  of  data  exchange  and  databases, 
including  those  dedicated  to  the  fight  against  fraud  will  be  interoperable  and  operated 
complementarily 

–  request  the  Commission  to  prepare  the  corresponding  strategic  plan  and  comprehensive 
implementation plan in partnership with the Member States in the Customs Policy Group 
and 

–  note  that  the  strategy  set  out,  complementing  current  initiatives,  should  provide  a  clear 

orientation for customs in the timeframe 2013 to 2019. 

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