REPORT FROM THE COMMISSION TO THE COUNCIL AND THE EUROPEAN PARLIAMENT Report on Progress on the Strategy for the  Evolution of the Customs Union
Date: 2011-12-20
Institutions: European Commission
Subjects: customs cooperation, customs fraud, customs union, piracy

EUROPEAN COMMISSION 

Brussels, 20.12.2011 
COM(2011) 922 final 

REPORT FROM THE COMMISSION TO THE COUNCIL AND THE EUROPEAN 
PARLIAMENT 

Report on Progress on the Strategy for the  Evolution of the Customs Union   

 
 
 
 
  
 
TABLE OF CONTENTS 

1. 

1.1. 

1.2. 

2. 

2.1. 

2.2. 

2.3. 

Introduction .................................................................................................................. 3 

Strategy for the Evolution of the Customs Union for 2008-2013................................ 3 

An evolving context ..................................................................................................... 4 

Developments since 2008 ............................................................................................ 5 

Development of the customs union in figures.............................................................. 5 

Development of the customs union in IT..................................................................... 6 

Development of the customs union in policy and its implementation ......................... 7 

2.3.1.  Protection of the EU – implementing the security amendment ................................... 7 

2.3.2.  Further facilitating trade – the Modernised Customs Code ......................................... 8 

2.3.3.  A new context affecting policy since December 2009 – the Lisbon Treaty ................ 8 

2.3.4.  The customs union and cooperation............................................................................. 8 

3. 

3.1. 

3.2. 

3.3. 

3.4. 

3.5. 

4. 

5. 

Progress on specific projects........................................................................................ 9 

Single Window............................................................................................................. 9 

Systems Based Approach........................................................................................... 10 

Fight against counterfeiting and piracy...................................................................... 10 

Ability to react quickly to crises ................................................................................ 11 

Fight against fraud and related illegal activities ........................................................ 11 

Reflections about the operating model of the customs union .................................... 13 

Prospectives for future: How to reinforce the performance (uniformity, effectiveness 
and efficiency) of the customs union ......................................................................... 14 

5.1. 

Strategic discussions on venues to pursue ................................................................. 14 

5.1.1.  Working more closely together as a customs union................................................... 14 

5.1.2.  Seeking synergies with other policy areas ................................................................. 14 

5.1.3. 

Improving governance and working methods............................................................ 14 

5.1.4.  Measuring and improving the quality of outputs and outcomes ................................ 15 

5.2.  Way forward............................................................................................................... 15 

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1. 

INTRODUCTION 

In  the  beginning  of  the  21st  century  customs  worldwide  were  facing  a  rapidly  changing 
environment:  evolving  production  and  consumption  patterns,  increasing  international  trade, 
global  threats  such  as  terrorism,  organised  crime,  environmental  degradation  and  growing 
hazards from trade in dangerous goods. 

In order to enable administrations of the European Union (EU) customs union1 to continue to 
fulfil  their  many  responsibilities  in  this  challenging  environment,  an  ambitious  reform  was 
launched.  First,  the  Modernised  Customs  Code2  was  enacted.  Second,  the  'e-Customs 
Decision'3 set the basis for the creation of a paperless environment for customs and trade4. 

To  ensure  comprehensive  and  coherent  development  in  the  longer  term,  the  Commission, 
together with Member States, undertook a major review of the role and work of EU customs5. 
The report, adopted by the 27 Director-Generals of Customs in 20076, provided the basis for 
the 2008 Commission Communication on a Strategy for the Evolution of the Customs Union7 
('Strategy'). The Future Customs Initiative ('FCI') was born. 

1.1. 

Strategy for the Evolution of the Customs Union for 2008-2013 

The  Strategy  contains  the  strategic  objectives  of  the  customs  union.  It  provides  a  policy 
framework  to  steer  developments  and  new  initiatives  with  consistency  and  coherence.  The 
Strategy  aims  at  complementing  the  above-mentioned  reform  of  the  legal  and  IT 
environments,  and  it  explicitly  refers  to  the  importance  of  the  human  aspects  of  the  future 
development of the customs union, including resources and skills. 

The strategic objectives of the customs union are (1) protecting the EU and (2) supporting 
EU competitiveness. These objectives shall be fulfilled in a uniform and efficient manner, by 
applying  efficient  and  effective  control,  and  by  cooperating  closely  among  the  customs 
administrations, with other authorities, with business, as well as with international partners. 

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By 'Customs union', this report refers exclusively to the EU customs union and territory as defined in 
Chapter 1 of the TFEU, excluding customs unions with Turkey, Andorra and San Marino. 
Regulation (EC) 450/2008 of 23.04.2008, OJ L 145 of 4.6.2008. 
Decision 70/2008/EC of 15.01.2008, OJ L 23 of 26.01.2008, p. 21. 
Also  referred  to  informally  as  the  'E-Customs  Initiative',  it  aims  at  building  a  robust  communication 
chain between all customs offices in the EU, between customs and other public authorities involved in 
trade in goods, and between customs authorities and traders. 
Future Role of Customs (FRoC) - project 
TAXUD/1434/2007 
COM (2008)169 final 

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STRATEGIC OBJECTIVES OF THE CUSTOMS UNION
COM (169/2008) – Strategy for the Evolution of the Customs Union

 UNIFORM AND EFFICIENT CUSTOMS UNION

OBJECTIVE 1: 
PROTECT THE EU 

BALANCED DEVELOPMENT 

OBJECTIVE 2: 
SUPPORT EU COMPETITIVENESS

Protect 
society 

Protect 
against 
terrorism and 
crime 

Protect 
 EU financial 
interests 

Protect the business 
environment 

Facilitate
 trade 

Provide quality 
customs service

(By applying)  Efficient and Effective Control 

(By applying) Cooperation:
 (1) Customs to Customs (2) Customs and other authorities 
(3) Customs to Business (4) International cooperation  

Source: Illustration based on objectives expressed in COM(169/2008) 

On 14 May 2008, the ECOFIN Council endorsed the Strategy, the objectives, and the need to 
invest  in  skills,  competences,  resources  and  technologies.  On  19  June  2008,  the  European 
Parliament (EP) adopted a Resolution8, similarly supporting the Strategy and calling upon the 
Member  States  and  the  Commission  for  its  effective  implementation.  Furthermore,  a 
comprehensive  implementation  plan  was  requested,  which  has  since  been  created  in 
consultation with Member States in the Customs Policy Group (CPG)9. The Council and EP 
highlighted,  in  particular,  the  need  to  develop  Single  Window  services  and  new  control 
methods  (the  systems  based  approach),  to  reinforce  the  fight  against  counterfeiting  and 
piracy,  the  capacity  to  react  to  crises,  and  the  fight  against  fraud.  Both  institutions  also 
stressed in general the need to enhance cooperation with stakeholders and other authorities. 
The  Council  requested  a  report  on  progress  in  2011,  which  is  contained  in  the  present 
document. 

1.2. 

An evolving context 

Since  the  adoption  of  the  Strategy,  significant  developments  have  taken  place,  not  least  the 
financial and economic crisis, the globalisation of terrorist threats or a number of natural or 

8 

9 

European Parliament resolution of 19 June 2008 on the fortieth anniversary of the Customs Union. OJ 
C286 of 27.11.2009 p.20 
The FCI Implementation Plan, TAXUD/379996/2009_rev2 

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man-made  disasters.  A  new  Treaty  has  entered  into  force  and  the  EU  has  set  itself  a  new 
political  agenda  to  support  growth10  and  enhance  security11.  These  developments  are 
influencing the way the customs union operates. 

This  report  on  progress  in  particular  files  is  therefore  supplemented  with  some  broader 
explanation  of  recent  developments  and  context  and  their  resulting  effects  on  the 
implementation  of  the  customs  union  Strategy.  The  report  also  refers  to  ongoing 
implementation  work  and  reform,  external  pressures  and  the  results  of  a  recent  'self 
assessment'  of  the  structures  of  the  customs  union  and  the  various  forms  of  collaboration, 
cooperation  and  integration  between  the  28  administrations  that  implement  it  (27  Member 
States  +  Commission).  In  light  of  this  context,  the  report  therefore  also  provides  a  brief 
overview  of  the  main  constraints  and  prospects  for  successful  future  implementation  of  the 
Strategy. 

2. 

DEVELOPMENTS SINCE 2008 

The  main  developments  of  the  EU  customs  union  since  2008  can  be  summarised  in  key 
figures  (2.1),  in  development  of  IT  (2.2),  and  in  policy  development  and  implementation 
(2.3). 

2.1. 

Development of the customs union in figures 

The evolution of the total number of customs declarations submitted exhibited a growing long 
term trend between 2007 and 2011 (despite the crisis). 

Figure 1: Evolution of customs declarations (normal+simplified) submitted 2007-2010 

s
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i
t
r
a
f
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70.000.000

60.000.000

50.000.000

40.000.000

30.000.000

20.000.000

10.000.000

0

1
Q

2
Q

3
Q

4
Q

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Q

2
Q

3
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4
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2
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2007

2008

2009

Period

2010

2011

Number of articles - import

Number of articles - export

Source: MoR data  

The  impact  of  the  financial/economic  crises  was  nevertheless  reflected  in  the  number  of 
customs  declarations  submitted  to  customs  under  normal  procedures  but,  curiously,  not  in 

10 
11 

The 2020 Strategy and the Single Market Act 
The Stockholm Programme 

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simplified procedures12. In other key figures, thanks to implementation of the new Economic 
Operator  Registration  and  Identification  (EORI)13  database,  it  is  known  since  2010  that  the 
custom union serves nearly 3 million clients. Furthermore, by 25 October 2011, the customs 
union had recorded 11.867 applications for the trusted trader status of Authorised Economic 
Operator (AEO), of which 8.072 were granted as of 25 October 2011. 

While  the  workload  has  been  growing  and  continues  to  grow,  resources  have  decreased 
significantly.  Between  2007  and  2010,  the  number  of  customs  staff  in  the  EU  (i.e.  in  the 
Member State administrations) decreased by 13%, and continues to decrease. 

2.2. 

Development of the customs union in IT 

During the period 2008-2011 the rate of electronic input14 increased, mainly so for export, due 
to  the  deployment  of  the  trans-European  Export  Control  System  (ECS)  which  involved 
computerisation of export in all Member States from the beginning of 200815. 

Figure 2: Development of the rate of electronic input – normal and simplified 
procedures together (27 Member States) 

100%

90%

80%

70%

60%

50%

Percentage of import declarations (articles) made electronically 

Percentage of export declarations (articles) made electronically

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

2007

2008

2009

2010

Source: MoR data  

During  the  same  period,  the  implementation  of  the  'security  amendment'  of  the  Customs 
Code16  (CC)  required  significant  effort  from  the  national  customs  authorities.  It  required 
development of brand new national IT systems, including the Import Control System (ICS) 
to receive and process the new required entry summary declarations, as well as upgrading of 

12 

13 
14 
15 
16 

The  impact  was  reflected  clearly  at  the  end  of  2008  and  beginning  2009  in  the  level  of  normal 
procedures,  but  not  in  the  level  of  the  simplified  declarations  (both  measured  at  item  (article)  level). 
There  is  no  clear-cut  customs-related  explanation  for  this  phenomenon,  but  it  could  be  that  trade 
patterns of large, regularly trading companies (those that apply simplified procedures) were, in reality, 
less affected by the crisis than trade on average. 
More about the system below. 
Both for normal and simplified procedures. 
The transition of export declarations from paper to electronic began in 2008. 
Regulation (EEC) 2913/92 was amended by Regulation (EC) 648/2005 and Regulation (EEC) 2454/93 
was amended by Regulation (EC) No 1875/2006. 

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the  New  Computerised  Transit  System  (NCTS)  and  ECS17.  Furthermore,  the  amendment 
required the development or upgrade of national risk analysis systems in order to implement 
the  Common  Customs  Risk  Management  Framework  (CRMF),  supported  by  the  central 
Common Customs Risk Management System (CRMS). Moreover, the Commission had to 
develop  the  new  central  EU  database  to  share  all  economic  operator  registration  and 
identification numbers (EORI) in order to enable the validation of these declarations, and the 
new system to deal with the authorised economic operators requests and authorisation process 
(AEO). 

Independently of developments linked to implementation of the security amendment, several 
other systems were also upgraded during 2008-2011: the TARIC to TARIC3, as well as the 
QUOTA and Surveillance 2 systems18.  

These  IT  developments  represented  a  significant  amount  costing  EU  Member  States  €  320 
million in IT investment during 2008, 2009 and 2010. 

2.3. 

Development of the customs union in policy and its implementation 

The main policy developments during the 2008-2011 period relate to the implementation of 
the  security  amendment  as  a  contribution  to  the  fight  against  terrorism,  the  establishment 
and revision of the Modernised Customs Code, and the new forms of cooperation between 
customs and other authorities, business and international partners. 

2.3.1.  Protection of the EU – implementing the security amendment 

The security amendment was a significant step in terms of better protection of the safety and 
security of the EU from risks in the global supply chain. The AEO programme was introduced 
under  which  economic  operators  voluntarily  improve  the  security  of  their  supply  chains  in 
return for additional trade facilitation benefits. Risk rules to enhance the protection of the EU 
against  security  risks  have  been  adopted  and  are  being  implemented.  Nevertheless,  the 
implementation process itself provided some important lessons for the future. A slow start and 
difficulties  in  synchronisation,  due  to  the  fact  that  the  amendment  expanded  the  traditional 
customs  area,  and  included  new  stakeholders  into  the  customs  processes,  meant  that  full 
implementation  was achieved with some  delay only  as  of  1  January  2011.  In  particular,  the 
reality  of  implementation  revealed  that  in  the  current  era  of  an  'interconnected  e-customs 
union',  the  need  to  agree  objectives,  define  processes  and  define  the  methodology  and  the 
planning for implementation with all stakeholders before legislation is adopted is absolutely 
primordial. Systematic business process modelling (BPM) has since been introduced in order 
to avoid in the future that legal texts are interpreted and implemented differently, and to avoid 
ending up with processes that are incompatible with IT developments - as well as deadlines 
that can only be achieved at considerable extra cost. 

17 

18 

All of these trans-European IT systems, although based on and developed in the 27 national systems, 
have the capacity of working together between each other due to a high level of harmonisation as well 
as interconnection rules imbedded in the systems. 
Further EU IT developments specifically for anti-fraud purposes as developed by OLAF are mentioned 
in section 3.5 below. 

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Furthermore, while the necessary IT systems are now up and running, the air cargo security 
incident at the end of 2010 and the Fukushima radiation accident in 2011 have allowed to test 
the risk management system, highlighting that there is room for improvement. 

2.3.2.  Further facilitating trade – the Modernised Customs Code 

The adoption of the Modernised Customs Code in 2008 opened another huge project. Taking 
into  account  the  lessons  learned  from  implementing  the  security  amendment,  as  well  as  the 
difficulties arising from the financial/economic crises both for Member States and traders in 
deploying ever larger investments (much more than for the security amendment), the need has 
been recognised to meticulously describe and analyse all customs business processes (and to 
propose  their  correction/amendment  whenever  necessary).  Furthermore,  it  has  been 
understood  that  new  IT  architecture  has  to  be  defined  with  a  view  to  enabling  the  use  of 
available new technologies that can provide savings both for Member States and traders (for 
example through economies of scale at EU level).  

These  insights,  as  well  as  the  consequences  of  the  Lisbon  Treaty,  have  led  to  a  decision  to 
recast  the  Modernised  Customs  Code.  The  recast  of  the  regulation  will  take  account  of  the 
new  EU  institutional  framework  and  introduce  the  necessary  corrections,  and  also  some 
amendments  that  have  been  revealed  to  be  necessary  from  the  business  process  analysis 
undertaken for drafting of implementing provisions. 

Pending the implementation of the Modernised Customs Code, which will be delayed by the 
recast,  measures  such  as  the  creation  of  the  single  authorisation  for  simplified  procedures 
(SASP)  were  adopted.  Furthermore,  and  in  particular  with  reference  to  the  pivotal  role  that 
customs  authorities  play  in  securing  the  correct  and  uniform  collection  of  traditional  own 
resources (TOR), the concerns and recommendations of the Court of Auditors Special report 
on simplified procedures19 will also need to be taken account of20. 

2.3.3.  A new context affecting policy since December 2009 – the Lisbon Treaty 

The Lisbon Treaty is impacting the customs union in two ways. First, the disappearance of the 
pillars removes the formal divide between customs activities at EU level and a legal analysis 
is ongoing to reach a clear understanding of the consequences for the customs union. Second, 
certain institutional provisions regarding implementation and delegation of powers, as well as 
the new comitology rules that have been adopted, differ significantly from the status quo of 
2008.  

2.3.4.  The customs union and cooperation 

During the period 2008- 2011, developments in the customs union's cooperation mechanisms 
and  arrangements  were  affected  by  the  growing  emphasis  on  safety  and  security  measures 
implemented  by  customs.  Furthermore,  political  pressure  to  rationalise  and  integrate  border 
measures provided additional impetus to the customs union's cooperation agenda. 

19 

20 

The European Court of Auditors Special Report 1/2010 on the effectiveness of controls for simplified 
customs procedures for imports. 
In  general,  maintaining  and  improving  where  necessary  the  control  of  proper  revenue  collection  by 
customs  remains  a  key  objective  to  be  addressed  in  all  future  implementation  of  legislation  and 
initiatives, such as development of risk management and implementing the systems-based approach to 
customs control. 

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Implementing  health,  safety  and  environmental  measures  at  the  border  while  increasing  the 
efficiency  of  both  authorities  and  business  call  for  a  closer  and  better  cooperation, 
coordination  and  collaboration  between  customs  and  other  competent  authorities  (e.g. 
veterinary,  phyto-sanitary  or  market  surveillance  authorities,  police,  border  guards).  These 
drivers have motivated the work on a Single Window for the clearance of goods as well as a 
set of actions in the context of the Internal Security Strategy21, to strengthen security through 
better coordination of border management, including at national level. 

International  relations  are  also  increasingly  being  leveraged  to  enhance  the  effective 
achievement of policy objectives. On the one hand, international agreements are being put in 
place for example with key trading partners including Eastern neighbours to improve trading 
conditions,  to  enable  mutual  administrative  assistance,  to  fight  against  fraud,  IPR 
infringements or trade in dangerous goods like drug precursors. For example, since 2008, the 
EU  has  put  in  place  7  additional  agreements  or  provisions  covering  20  countries  regarding 
instruments  for  increased  and  more  efficient  mutual  administrative  assistance  with  third 
countries.  On  the  other  hand,  mutual  recognition  agreements  are  being  sought  to  facilitate 
trade for trusted EU traders; mutual recognition has already been achieved with Norway and 
Switzerland22 as well as with Japan.  

3. 

PROGRESS ON SPECIFIC PROJECTS 

The  Council  requested  a  progress  report  and  specifically  stressed  the  importance  of  five 
developments that were considered of particular importance for the strategic objectives of the 
customs  union:  the  Single  Window  project,  the systems-based  approach  to  customs  control, 
the fight against counterfeiting and piracy, the ability to react quickly to crises, and the fight 
against fraud. 

3.1. 

Single Window 

After  the  adoption  of  the  Strategy,  much  discussion  and  debate  has  taken  place  among 
customs  experts  and  with  trade  representatives  over  the  definition  and  design  of  the  Single 
Window concept. In 2010, the Commission launched a project group with Member State and 
candidate  country  experts,  as  well  as  representatives  of  authorities  from  other  policy  areas 
(veterinary  and  agricultural)  to  define  a  workable  and  mutually  acceptable  solution. 
Considering that the international 'Single Window' definition may carry several interpretations 
and  even  practical  implementations  (sometimes  driven  by  customs  and  sometimes  not)  in 
different countries in the EU and elsewhere, identifying a 'European standard’ and concept for 
Single  Window  was  a  major  first  success.  This  concept  involves  an  agreed  standard  for 
possible messages that are to be exchanged between customs and the other authorities. This 
standard would allow the computerisation of the communication between all authorities at the 
lowest possible cost. A proposal for a pragmatic Roadmap for Single Window23, that foresees 
a possible way to integrate the requirements of all other different policies, was supported by 
the CPG as the appropriate way forward.  

21 

22 

23 

COM(2010)673, including in the context of Objective 4 Action 4: Improve interagency cooperation at 
national level .  
In the case of NO and CH, mutual recognition of AEO is part of more extensive agreement concerning 
mainly customs security measures. 
TAXUD/359494/2011 

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3.2. 

Systems Based Approach 

In 2008, the Commission launched work on developing the systems-based approach (SBA) to 
customs control. SBA entails that for some, pre-assessed, quality assured traders, customs can 
move from the current transaction based approach of controlling each and every consignment 
into a control model based on the quality and robustness of the trader's own controls on their 
own goods and supply chain. The concept, its implications and potential benefits for business 
and customs were discussed by a dedicated project group of Member State experts in 2008, 
and a subsequent phase of work in 2009 provided deeper understanding of the conditions and 
constraints of implementing the approach. A third phase of work spanning 2010-2011 will be 
completed in December 2011, producing among others, a roadmap towards implementing the 
approach  in  a  harmonised  way  in  the  EU.  The  development  work  has  included  frequent 
contact  and  expert  input  from  the  private  sector,  in  particular  regarding  the  desirability  and 
potential benefits for traders of systems-based customs control of their compliance. While it is 
likely  that  systems-based  control  will  not  be  interesting  or  applicable  for  the  majority  of 
traders24,  it  is  expected  to  provide  significant  benefits  for  both  customs  and  trade  when 
applied  by  those  businesses  with  the  highest  trade  volumes.  If  properly  implemented, 
systems-based control will represent a thoroughly modern control model and enhance both the 
effectiveness and efficiency of customs control as well as facilitate trade - for both systems-
based controlled companies and as well as those with traditional, transaction-based control of 
their  trade  flows.  Future  implementation  steps  will  include,  among  others,  targeted  pilot 
actions  to  establish  and  test  the  appropriate  specific  requirements  mechanisms  and  working 
methods (such as details to be found in the accounts, audit standards, etc.). 

3.3. 

Fight against counterfeiting and piracy 

Customs  are  uniquely  placed  as  they  have  a  complete  overview  of  commercial  flows  at  the 
EU borders, and their IPR enforcement activity has been impressive. Since 2008, there have 
been both increasing calls for action and new initiatives in the fight against infringements of 
intellectual  property  rights  (IPR).  A  European  4-year  Action  Plan  was  adopted  in  2009  to 
strengthen the customs response to the trafficking in goods infringing IPR25. This Action Plan 
sets  the  framework  for  joint  efforts  by  the  Commission  and  the  Member  States  to  better 
enforce IPR at the border26. During the period 2008-2010, the number of detention cases has 
increased  from  around  49.000  to  almost  80.000.  This  reflects  both  the  level  of  customs 
activity but also the scale of the problem they have to address.  

In May 2011, as part of the Strategy for a Single Market for IPR, the Commission put forward 
a  proposal  for  a  new  regulation  on  the  customs  enforcement  of  IPR,  in  order  to  further 
strengthen  the  enforcement  capacity  of  customs  while  taking  into  account  the  interests  of 
legitimate operators27. In addition, the Commission and national customs have been carrying 

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27 

The expected interest of traders is not based on size or geography, but rather qualitative (e.g. quality of 
supply  chain  management  and  accounting  systems)  and  service-need  (e.g.  relative  importance  of 
international trade in company turnover) related characteristics. SMEs with a certain profile (e.g. with 
relatively  high  levels  of  customs  declarations)  may  find  the  concept  as  interesting  as  certain  large 
multinationals. 
Council Resolution of 16 March 2009 on the EU Customs Action Plan to combat IPR infringements for 
the years 2009 to 2012. 
Whereas the EU Action Plan will be evaluated next year, it is already recognised as very useful to steer 
joint developments at both EU and national levels. 
COM (2011) 285 

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out  activities  to  develop  cooperation  with  business,  raise  consumers'  and  companies' 
awareness, exchange best practices, etc28. 

International cooperation is also key to prevent that IPR infringing goods find their way to the 
EU market. The EU is engaged in cooperation with major trading partners, such as the US and 
Japan.  Closer  cooperation  with  Chinese  customs  is  being  developed,  through  a  dedicated 
action  plan  on  IPR  enforcement,  in  order  to  act  at  the  source  of  the  problem.  Customs  also 
play a prominent role  in other international initiatives,  notably the  recently  concluded Anti-
Counterfeiting  Trade  Agreement  (ACTA).  IPR  enforcement  at  the  border  also  features  in 
bilateral trade negotiations and cooperation arrangements with a wide range of third countries. 
It is too early to assess the impact of these activities on the trafficking trends, but they have 
the merit of engaging countries towards joint efforts to  protect an essential asset of modern 
economies. 

3.4. 

Ability to react quickly to crises  

The ability of the customs union to react quickly to crises relates to the management of risks 
posed  by  exceptional  dangerous/security  situations  such  as  acts  of  terrorism,  sanitary, 
veterinary and phyto-sanitary incidents or environmental incidents. At the end of 2010 an EU 
customs crisis management network was set up. This network is made up of central contact 
points in all Member States and uses the Customs Risk Management System (CRMS) as the 
main platform of communication. The network was used for the first time in March 2011 in 
the  context  of  the  Fukushima  crisis.  It  has  proven  to  be  an  essential  element  of  the  risk 
management framework and a key tool to link Member States in a crisis situation. Following 
this first exercise, some adjustments will be made to the customs crisis management process 
in order to strengthen "live" communication during a crisis. 

Upstream, it is necessary to improve the capacity of EU customs services to react quickly to 
crises in the same way. This entails improving access to the information related to those crisis 
affecting  international  trade,  and  to  the  measures  adopted  by  the  competent  authorities  to 
address these. Control measures should be compatible with customs procedures and working 
methods. A better structured coordination between the different competent authorities both at 
EU and national level is indispensable. 

3.5. 

Fight against fraud and related illegal activities 

Mutual  administrative  assistance  among  Customs  is  a  key  element  in  defending  EU 
finances and combating fraud and fraudsters. To improve this fight against fraud, the EU has 
developed significant legislative, operational and strategic activities since the adoption of the 
2008  Strategy.  These  include,  inter  alia,  amending  Council  Regulation  (EC)  515/97  of  13 
March  199729  on  mutual  assistance30,  which  extended  exchange  of  information  regarding 
suspected  frauds  to  a  systematic  communication  of  pre-defined  commercial  information, 
extended  the  scope  of  the  Customs  Information  System  (CIS)  for  strategic  and  operational 
analysis  as  well  as  for  reporting  seizures  and  established  the  Customs  Files  Identification 

28 

29 

30 

EN 

For  example,  an  expert  group  has  just  been  created  to  address  the  huge  challenge  posed  by  small 
consignments of IPR infringing goods sent by post as a result of internet sales. 
OJ L 82, 22.3.1997, p. 1 

Regulation (EU) 766/2008, OJ L 218 of 13.8.2008, p. 48 

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Database  (“FIDE”)31.  Since  2008,  significant  evolution  has  happened  in  the  tools  and 
operational  activities  such  as  joint  operations  (of  which  9  have  been  coordinated  by  OLAF 
since  2009).  In  the  future,  further  reflection  shall  take  place  in  order  to  develop  a  more 
permanent structure in close relations with Member States, OLAF and all bodies concerned, 
including Europol and Interpol. 

In terms of exchange of information between competent authorities, which plays a key role 
in improving the efficiency in the fight against fraud, the Commission has developed a policy 
facilitating access to information for the relevant authorities both at EU and at national level. 
Since 1 January 2011 the EU Financial Intelligence Units (anti money laundering authorities) 
are  connected  to  the  AFIS  Portal  for  the  exchange  of  information  regarding  established  or 
suspected illicit movements of cash32. 

In order to detect abnormal patterns in the transit movement and diversion of destination, an 
Administrative  Arrangement  on  Anti  Fraud  Transit  Information  System  (ATIS)  has  been 
adopted in July 2011 to allow full access for the Commission to the transit data. 

OLAF  has  also  developed  considerable  expertise  to  assist  the  national  authorities  in  the 
coordination of customs investigations related to the contraband of genuine and counterfeit 
cigarettes.  Such  an  expertise  has  proved  particularly  useful  where  there  are  suspicions  of 
international  fraud  networks  behind  the  smuggling  and  focussing  on  specific  counterfeit 
products,  notably  the  dangerous  goods  (e.g.  medicine,  fertilizer,  auto  spare  parts,  electric 
equipment, etc.) 

In  2011,  the  Commission  adopted  a  Communication  on  the  protection  of  EU  financial 
interests  by  criminal  law  and  by  administrative  investigations33,  as  well  as  a  new  Anti-
Fraud  Strategy34  to  update  and  modernise  its  policies  to  fight  against  fraud  and  related 
crime,  including  a  set  of  measures  to  ensure  that  at  all  levels  and  in  all  sectors  the  best 
possible  tools  are  available  to  prevent,  detect  and  fight  fraud  and  other  illegal  activities 
affecting  the  EU  budget.  The  new  Anti-Fraud  Strategy  covers  the  whole  "anti-fraud  cycle", 
i.e. from the prevention and detection of fraud at an early stage to investigations, sanctioning 
and  recovery  of  misused  funds.  In  this  context  an  EU  Action  Plan  to  fight  against 
smuggling of cigarettes and alcohol35 along the EU Eastern border accompanies the strategy 
particularly  for  implementation  by  EU  customs.  This  initiative  can  provide  major  steps 
forward in the fight against fraud, as it is estimated that the EU and its Member States loose 
up to €10 billion in tax and customs revenue  due to smuggling of tobacco and alcohol. 

All  in  all,  the  customs  union's  efforts  in  the  fight  against  fraud  have  been  improved  and  a 
more  strategic  approach  adopted  at  EU  level.  Nevertheless,  key  progress  must  be  made  in 
implementing the new Action Plan. 

31 

32 
33 
34 
35 

FIDE  enables  the  national  authorities  responsible  for  carrying  out  customs  investigations  to  identify 
competent authorities of other Member States which are investigating or have investigated on the same 
persons or businesses in order to coordinate their work. 
Art. 6 of the Regulation (EC) 1889/2005 (OJ L 309 of 25.11.2005, p. 9-12) 
COM(2011)293 
COM(2011)376 
SEC(2011)791 

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4. 

REFLECTIONS ABOUT THE OPERATING MODEL OF THE CUSTOMS UNION  

The  changing  environment,  recent  experiences  (both  positive  and  negative)  of  the 
implementation of the security amendment and other projects, the reflection and preparatory 
work for the future implementation of the Modernised Customs Code as well as the need to 
follow-up on the findings of the Court of Auditors in terms of proper collection of TOR have 
contributed  to  a  number  of  strategic  discussions  between  the  heads  of  the  EU  Customs 
services  regarding  how  to  improve  the  performance  of  EU  customs  (in  terms  of 
effectiveness and uniformity), while at the same time trying to economise on resources, limit 
necessary investments and cut operating costs (efficiency). 

Indeed,  in  light  of  the  threats,  the  risks  to  the  financial  interests  of  the  EU  and  its  Member 
States,  the  functioning  of  the  Internal  Market  as  well  as,  and  in  particular,  to  security  and 
safety of the EU that may result from insufficient, inadequate or miss-allocated resources for 
the  customs  union  to  carry  out  the  tasks  of  managing  trade  while  protecting  the  EU  are 
increasingly  raised in the public by the media. These risks have also been acknowledged in 
recent dialogues in the European Parliament36. The harsh reality of modernisation is that the 
necessary IT systems, as well as the capacity and new skills needed to apply new procedures 
and improved risk analysis still require considerable investment in both human and physical 
capital.  From  the  EU  side,  the  main  support  mechanism  is  mobilised  through  development 
work in DG TAXUD and through the Customs 2013 Programme37. In the future, EU support 
in both tools and funding and will have to be strengthened and further developed under the 
proposed  FISCUS38  programme  in  order  to  improve  the  overall  efficiency  of  the  customs 
union. 

Also  more  structural  issues  will  need  to  be  addressed.  In  order  to  have  a  complete  and 
systematic  analysis  of  the  current  operating  model,  DG  TAXUD  commissioned  a  study  on 
the  Business  Architecture  of  the  EU  Customs  Union39.  In  addition  to  a  SWOT-type 
analysis  of  the  operating  structures  of  the  customs  union,  which  identified  some  key  pain 
points  to  be  addressed,  the  study  also  evaluated  a  number  of  options  for  improving  the 
functioning  of  the  customs  union.  These  options  and  their  potential  implementation  and 
follow-up have been under examination and discussion in a first instance among the internal 
stakeholders, the Commission and Member State customs administrations. 

In  particular  and  in  tandem  with  internal  structural  developments,  it  has  been  widely 
recognised  in  discussions  between  Member  State  administrations  and  the  Commission  that 
even more efforts need to be allocated, in particular, to further development of the customs 
union's  risk  management  and  data  management  concepts  and  mechanisms,  to  improve 
the  customs  union's  ability  and  agility  to  react  to  crises,  as  well  as  to  building  better 
cooperation with other authorities and international partners in the future. 

36 

37 

38 
39 

European  Parliament  resolution  of  1  December  2011  on  modernisation  of  customs  (2011/2083(INI)); 
P7_TA(2011)0546. 
Decision  624/2007/EC  of  23  May  2007  establishing  an  action  programme  for  customs  in  the 
Community (Customs 2013) 
COM(2011)706 
Future  business  architecture  for  the  Customs  Union  and  cooperative  model  in  the  taxation  area  in 
Europe (May 2011). TAXUD D(2010) 433216 

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5. 

PROSPECTIVES  FOR  FUTURE:  HOW  TO  REINFORCE  THE  PERFORMANCE 
(UNIFORMITY, EFFECTIVENESS AND EFFICIENCY) OF THE CUSTOMS UNION 

5.1. 

Strategic discussions on venues to pursue 

Considering the progress since 2008, the future risks, as well as the contextual and structural 
difficulties experienced in the practical implementation of a number of measures, a number of 
strategic  discussions  between  administrations  have  taken  place,  rotating  around  several 
possible  venues  to  ensure  better  future  implementation.  The  following  subjects  have  been 
discussed: 

5.1.1.  Working more closely together as a customs union 

As  confirmed  by  several  external  studies  and  evaluations40  on  the  customs  union's  working 
structures,  actors  in  the  customs  union41  must  work  together  more  closely  and  innovate  in 
terms of enabling mechanisms, in particular at operational level and in areas where resources 
are particularly scarce (safety and security, risk management). Resolving some of the resource 
gaps  in  these  areas,  with  a  combination  of  enhanced  EU  support  and  pooling  of  specialist 
resources  among  Member  States,  could  enable  not  only  more  effective  protection  but  the 
spread  of  modern  and  state-of–the-art  working  methods  that  contribute  also  to  lessening 
administrative  burden  and  facilitating  trade  for  legitimate  businesses.  Working  increasingly 
closely together is above all driven by the potential of lowering operating costs and improving 
efficiency at EU level (economies of scale, especially in IT). Closer cooperation in the area of 
training  should  be  prioritised  especially  in  priority  areas,  and  where  the  'human  input'  is 
especially important for uniform outcomes across the EU. 

5.1.2. 

Seeking synergies with other policy areas 

Due to the growing number of policy areas and authorities interacting with customs work, a 
strategic  approach  needs  to  be  adopted  to  ensure  that  legal  requirements,  working  methods 
and business processes fit together and produce synergies, while where possible saving costs 
for public and private stakeholders. Furthermore, similar tools and collaboration mechanisms 
considered for  the cooperation  between customs could  be  used to  enhance cooperation with 
other  authorities,  including,  among  others,  statistical  authorities  (as  the  data  on  imports  and 
exports  from  customs  are  the  primary  data  source  for  European  trade  statistics),  veterinary 
fishery, and market surveillance authorities, as well as the various transport authorities.  

5.1.3. 

Improving governance and working methods 

In an increasingly complex and comprehensive customs union, governance mechanisms need 
to be updated and improved in general – revision work should focus on identified pain points 
in  the  existing  complex  coordination  and  governance  structure,  including  both  within  and 
between  institutions  at  EU  level.  Governance  improvements  should  include  the  operational 
activities,  where  coordination  suffers  from  dispersity  and  ineffectiveness  in  the  new 
institutional environment. 

40 

41 

Study on the Business Architecture of the Customs Union (2011); Midterm evaluation of the Customs 
2003 Programme (2011) 
Referring to the Member States administrations and the Commission 

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Improvements in governance can take the form of new 'upstream' working methods such as 
business  process  modelling  (BPM)  and  business  case  methodology  to  improve  the  impact 
assessment  of  both  strategic  and  operational  decisions.  Down  the  line,  process  management 
and measurement of the performance of processes of the customs union could provide a more 
solid basis for future development of initiatives, working methods and resource allocation. 

5.1.4.  Measuring and improving the quality of outputs and outcomes 

Improving the quality of outputs and outcomes in the EU customs union requires setting up a 
system for measuring, assessing and identifying weaknesses and lags, and (in a second stage), 
managing the performance of the customs union. DG TAXUD has set up a project group of 
Member States experts to develop a coherent system of performance management within the 
customs union. 

5.2.  Way forward 

In  light  of  the  evolution  since  2008,  recent  studies  and  discussions,  the  forward-looking 
conclusions are that: 

(1)  The  strategic  objectives  of  the  customs  union  as  defined  in  2008  are  still  valid  and 
relevant. 

(2)  In  addition  to  the  lines  of  action  already  undertaken  in  implementing  the  customs 
union Strategy, there is a crucial need for the customs union to evolve on the following 
axes: 

– 

– 

– 

– 

A broader strategic approach to cooperation with other agencies and international 
partners in the areas of security, health, safety and the environment. 

Improving  and  updating  governance,  both  in  terms  of  structures  and  working 
methods,  notably  by  evolving  towards  a  more  business-oriented  approach  to  the 
customs  union  processes.  In  addition  to  addressing  governance  structures  and 
institutional  questions,  and  the  streamlining  of  day-to-day  steering,  this  would 
include  adopting  the  systematic  use  of  robust,  standardised  working  methods  for 
better  definition  of  business  cases  and  detailed  business  process  modelling  for  all 
initiatives.  This  will  allow  not  only  a  better  prior  understanding  of  the  potential 
implementability,  effects  and  outcomes  of  initiatives,  but  allow  better  prioritisation 
of initiatives and a more streamlined utilisation of scarce resources. 

Sharing  and  pooling  of  capacities  and  capabilities  between  Member  States  and 
between  the  Member  States  and  the  Commission,  in  order  to  improve  efficiency, 
effectiveness and uniformity and realise economies of scale. This could be achieved 
through the strengthening and adding of new mechanisms under the future FISCUS 
programme. 

Defining  a  basis  for  measuring  and  assessing  performance  (outcomes  as  well  as 
outputs) to ensure that the customs union is fulfilling its objectives, and/or to identify 
the  lags  or  gaps.  This  will  be  a  particularly  challenging  task,  as  it  requires  the 
identification  or  creation  of  indicators  that  are  relevant  at  customs  union  level,  and 
that can be based on available, reliable source data.  

EN 

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