COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT, THE COUNCIL AND THE EUROPEAN ECONOMIC AND SOCIAL COMMITTEE on the State of the Customs Union
Date: 2012-12-21
Institutions: European Commission
Subjects: customs cooperation, customs territory (EU), customs union, single market

EUROPEAN 
COMMISSION 

Brussels, 21.12.2012  
COM(2012) 791 final 

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

on the State of the Customs Union 

EN 

   EN 

 
 
 
 
  
 
TABLE OF CONTENTS 

1. 

1.1. 

1.2. 

THE EU CUSTOMS UNION...................................................................................... 3 

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

The customs union acquis: over 40 years of evolution ................................................ 4 

1.2.1.  Legislation.................................................................................................................... 4 

1.2.2.  Policy and strategic objectives ..................................................................................... 5 

1.3. 

The customs union 2012: in the service of the EU ...................................................... 5 

1.3.1.  Services to business and society .................................................................................. 5 

1.3.2.  The customs union in figures ....................................................................................... 6 

1.3.3.  A European success story............................................................................................. 7 

1.4. 

Governance and functioning ........................................................................................ 7 

1.4.1.  Activities and processes ............................................................................................... 7 

1.4.2. 

Inputs............................................................................................................................ 8 

1.4.3.  Governance .................................................................................................................. 8 

2. 

2.1. 

2.2. 

3. 

3.1. 

3.2. 

3.3. 

EVALUATION OF THE CUSTOMS UNION ........................................................... 9 

External pressures ........................................................................................................ 9 

Internal pressures ......................................................................................................... 9 

CUSTOMS UNION 2020 – THE WAY FORWARD............................................... 10 

Complete the modernisation ...................................................................................... 11 

Assessing gaps, setting priorities ............................................................................... 11 

Improve efficiency and effectiveness through reform of the governance of the 
customs union............................................................................................................. 13 

4. 

CONCLUSION .......................................................................................................... 14 

EN 

2 

   EN 

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

on the State of the Customs Union 

1. 

THE EU CUSTOMS UNION  

1.1. 

Introduction  

The  European  Union's  (EU)  customs  union1  is  one  of  the  most  successful  examples  of 
European integration and European policy. It has served as a stable foundation for economic 
integration and growth in Europe for over four decades. Its legal basis has proved robust and 
flexible in terms of both expanding geographical area and scope of tasks. It has been one of 
the frontrunners in the public sector to begin a full-scale modernisation with a view to pan-
European  e-government  services. 
rankings,  certain  EU  customs 
administrations regularly rank among the top globally.2 

international 

In 

However,  rankings  also  reveal  that  not  all  links  in  the  chain  are  performing  equally  well. 
Furthermore,  while  the  legislation  to  be  applied  is  the  same,  the  outcome  of  its 
implementation is not. Signs have emerged that the customs union is facing serious challenges 
in the way that it functions. These challenges translate into potentially dampening the overall 
effectiveness  of  the  customs  union  in  protecting  and  serving  the  EU.  They  translate  into 
inefficiencies, waste and mismatch of needs and availability of resources. They translate into 
an uneven service level and suboptimal overall protection of EU borders.  

The customs union is an exclusive EU competence3, and the responsibility for implementing 
customs legislation is primarily that of the Member States4. However, some of the challenges 
the customs union is facing clearly stem from the increasing globalisation of trade, business 
models and logistics, as well as globalisation of crime and other threats. Furthermore, while 
the benefits of the customs union are commonly shared, the cost of its implementation is not 
evenly distributed: due to reasons of history, geography and trade routes, some Member States 
carry a disproportionate share of the burden.  

The  reality  is  that  in  such  an  interconnected  world,  the  Member  States  on  their  own  and  in 
isolation from the rest of the EU are no  longer able to effectively address the challenges of 
globalisation. General observations of the EU situation5 describe well also the challenges and 

1 

2 

3 
4 
5 

By ‘EU customs union’ this communication refers to the EU customs union and territory as defined in 
Articles  30  et  seq. of  the  TFEU,  excluding  customs  unions  of  the  EU with  Turkey, Andorra  and  San 
Marino. 
transparent  world 
World  Bank  –Doing  Business  2012:  Doing  business 
(http://www.doingbusiness.org/rankings); The World Economic Forum – Global Competitiveness Index 
(http://www.weforum.org/issues/competitiveness-0/gci2012-data-platform/).  
Article 3 TFEU.  
Article 291 TFEU.  
President Barroso, SPEECH/12/596, 12/09/2012. 

in  a  more 

EN 

3 

   EN 

 
                                                 
need for response for the customs union: globalisation demands more European unity, more 
unity demands more integration and accepting that we are all "in the same boat".  

EN 

4 

   EN 

 
The objectives of this Communication are to:  

–  Highlight  the  value  added  and  fundamental  importance  of  the  services  that  the 
customs union provides as a foundation for growth, competitiveness and security of 
the Single Market and the European Union;  

–  Acknowledge  that  the  customs  union  is  facing  challenges  that  require  a  European 

response;  

–  Outline  a  course  of  action  to  counter  these  challenges  and  provide  a  more 

performing, robust and unified customs union by 2020.  

1.2. 

The customs union acquis: over 40 years of evolution  

1.2.1.  Legislation  

In  1968,  the  customs  union  first  and  foremost  abolished  customs  duties  at  national  borders 
and put in place a uniform system for taxing imports from outside the EEC. The initial setting 
up of the common customs tariff and of common rules on origin and customs valuation was 
eventually  complemented  by  directives  or  regulations  concerning  various  areas  of  customs 
legislation like customs procedures, customs formalities and controls as well as customs debt 
and guarantees. The most significant change in the acquis, in the context of the establishment 
of the Single Market in 1993 and beyond the mere removal of internal borders for goods was 
the  codification  of  those  various  pieces  of  legislation  in  a  single,  directly  applicable  legal 
basis. Although the public perceived the onset of a borderless Europe as the disappearance of 
customs,  it  in  fact  underlined  the  very  importance  of  effective  customs  supervision  at  the 
common external border.  

The centrepieces of the customs union acquis since 1993 have then been the comprehensive 
and directly applicable Community Customs Code6 and Common Customs Tariff7, and their 
successive  amendments.  Furthermore,  a  series  of  topical  legal  instruments  including 
regulations  on  intellectual  property  rights  (IPR)  enforcement8,  drug  precursors9,  cultural 
goods10,  cash  controls11,  market  surveillance12  or  pieces  of  legislation  aiming  at  protecting 
citizens  and  the  environment13  provide  a  substantial  and  directly  applicable  legal  basis  for 
enforcement of rules in those fields by customs in the EU. 

6 
7 

8 

9 
10 
11 
12 

13 

Council Regulation (EEC) No 2913/92 establishing the Community Customs Code.  
Council Regulation (EEC) No 2658/87 on the tariff and statistical nomenclature and on the Common 
Customs Tariff.  
Council  Regulation  (EC)  No  1383/2003  concerning  customs  action  against  goods  suspected  of 
infringing certain intellectual property rights and the measures to be taken against goods found to have 
infringed such rights.  
http://ec.europa.eu/enterprise/sectors/chemicals/documents/specific-chemicals/precursors/ 
Council Regulation (EC) No 116/2009 on the export of cultural goods. 
Regulation No 1889/2005 on controls of cash entering or leaving the Community. 
Regulation (EC) No 765/2008 setting out the requirements for accreditation and market surveillance 
relating to the marketing of products and repealing Regulation (EEC) No 339/93. 
E.g.  Council  Regulation  (EC)  No  338/97  on  the  protection  of  species  of  wild  fauna  and  flora  by 
regulating trade therein 

EN 

5 

   EN 

 
 
 
                                                 
1.2.2.  Policy and strategic objectives  

In  2008,  the  Strategy  for  the  Evolution  of  the  Customs  Union14  established  the  strategic 
objectives  of  the  customs  union  as  1)  protecting  the  EU  and  2)  supporting  EU 
competitiveness.  These  objectives  remain  valid  today  and  into  the  future.  These  objectives 
should  be  achieved  in  a  uniform  and  efficient  manner,  by  applying  efficient  and  effective 
control,  and  by  cooperating  closely  among  the  customs  administrations  and  with  other 
authorities, with business 15as well as with international partners.  

International cooperation is a key strategic element of EU customs policy. Multilaterally, for 
example  in  the  context  of  the  World  Customs  Organisation  and  the  World  Trade 
Organization,  the  EU  promotes  the  development  and  implementation  of  international 
standards,  notably  in  the  area  of  security,  trade  facilitation  and  customs  simplification. 
Bilaterally, the EU aim has been to work actively with the main trading partners to address the 
customs  related  challenges,  for  example  on  trade  facilitation,  rules  of  origin,  IPR 
enforcement, supply chain security and the fight against fraud.  

1.3. 

The customs union 2012: in the service of the EU 

1.3.1. 

Services to business and society 

Customs  is  the  only  public  authority  having  a complete  overview  and  control  responsibility 
for all the goods passing through the external borders of the EU, which, once released for free 
circulation  by  customs  somewhere  in  the  EU,  can  move  freely  within  any  part  of  the  EU 
customs  territory.  Due  in  part  to  this  unique  positioning,  the  role  of  the  customs  union  has 
significantly evolved and its tasks increased manifold since 1968. It has become a significant 
service  provider  for  business  and  society,  and  today  EU  customs  serves  a  wide  range  of 
operational  objectives.  While  remaining  an  authority  with  revenue  collection  responsibility 
towards  the  EU  and  Member  States,  customs  is  increasingly  called  upon  in  its  role  as  law 
enforcement  authority  to  protect  the  security  and  safety  of  the  EU.  It  increasingly  acts  as  a 
guardian of the integrity of the internal market for goods, as well as enforcer of many other 
government interests at the external border.  

The customs union is the operational arm of much of the EU's commercial policy measures, 
and implements numerous international agreements in relation to the trade flows of the EU. 
Furthermore,  due  to  the  effectiveness  of  stopping  undesired  or  risky  goods  from  third 
countries before they are placed on the market in the EU, a significant and growing range of 
government  agencies  expect  customs  to  enforce  their  policies  at  the  border.  They  expect 
application  of  formalities  and  controls  at  the  external  borders  provided  for  in  customs 
legislation to also serve to control for requirements of other legislation as well16. Customs is 
therefore increasingly serving as a comprehensive "guardian of the internal market", including 
the enforcement of legislation related for example to public health, consumer protection, the 
environment and agriculture. The customs union also explicitly contributes to internal security 

14 
15 

16 

COM(2008) 169 final 
To  promote  cooperation  with  business,  most  Member  State  administrations  have  national  business-
customs  committees,  and  at  EU  level  a  consultation  mechanism,  the  Trade  Contact  Group,  provides 
active input to the preparatory work for the vast majority of new initiatives.  
For  example  the  multiannual  market  surveillance  plan.  For  more  details,  refer  to  Annex  2  to 
Commission  Staff  Working  Paper  -  Impact  Assessment  of  an  action  programme  for  customs  and 
taxation in the European Union for the period 2014-2020 (FISCUS) - SEC(2011) 1317 final 

EN 

6 

   EN 

 
                                                 
objectives17.  Table  1  illustrates  the  range  of  services  that  the  customs  union  provides  to  the 
EU in 2012.  

17 

See  e.g.  Communication  from  the  Commission  to  the  European  Parliament  and  the  Council  of 
22 November  2010 –  The  EU  Internal  Security  Strategy  in  Action:  Five  steps  towards  a  more  secure 
Europe [COM(2010) 673 final – Not published in the Official Journal]. 

EN 

7 

   EN 

 
                                                 
Table 1: services provided by the EU customs union in 2012  

Services provided to 
Governments (EU & national) 

Services provided to society 

Services provided to business 

Collection  of  revenues  for  EU 
& national governments 

Protection  against  terrorism  & 
criminal  organisations  (reduce 
money laundering, supply chain 
security) 

Protect  the  level  playing  field 
for  companies  and  goods  in 
equal situations across the EU 

customs 
Implementation 
/trade  policies  and  legislation 
(at land/sea/air) 

of 

Protection  of  health  (human  & 
animal  health, 
e.g.  drugs, 
product safety etc.) 

Minimum  necessary  physical 
intrusion  of 
and  procedural 
flows,  e.g.  simplified 
trade 
procedures, 
single  window, 
one-stop shop 

Support  to  the  competitiveness 
of  EU  companies,  e.g.  tariff 
suspensions 

Enforcement  of  respect  for  the 
rule of law 

Implementation  of  (parts  of) 
non-customs 
and 
legislation 
(e.g.  on  health, 
safety) by customs authorities 

policies 

involved 

Information  on  trade  flows  and 
for  policy-
actors 
making  purposes 
(especially 
trade in goods statistics) 

Protection of the interests of EU 
taxpayers 

Protection 
property 

of 

intellectual 

Increase economic prosperity 

Transparent,  swift  and  uniform 
information  and  guidance  on 
procedures, 
trade  measures, 
standards  &  norms,  legislation 
& jurisprudence  

Implementation  of  EU  foreign 
policy,  e.g.  enforcement  of 
trade 
non-
embargos, 
proliferation etc. 

Protection of cultural heritage 

Protection of environment 

1.3.2.  The customs union in figures 

In providing these services, EU customs handle 17% of world trade – over 2 billion tonnes of 
goods a year18 with a value of 3 300 billion EUR. Between 2004 and 2010, despite the impact 
of the financial crisis, the value of EU external trade has grown by almost 50%19. The EU is at 
the centre of global trade and supply chain logistics, and is the number one trading partner for 
the United States, China and Russia. More than 90% (8.4 billion tons of merchandise) of trade 
is  carried  by  sea,  of  which  more  than  20%  is  unloaded  in  Europe.  The  EU  has  over  250 
international airports. The eastern land border runs to almost 10.000km with 133 commercial 
road and rail entry points. Taking into account the entire EU external border (land, air, sea) 
there are in total more than 1,000 customs offices of entry. 

In 2011, EU customs processed 36 million pre-arrival cargo declarations, 140 million import 
declarations,  96  million  export  declarations  and  9 million  transit  declarations.  These  figures 
represent an average of 8.9 declarations per second handled by the Member States' customs 

18 
19 

EU webpage – Customs policy area 
External and intra EU trade, A statistical yearbook, data 1958-2010, p16 

EN 

8 

   EN 

 
 
 
 
 
 
 
 
 
 
 
 
                                                 
administrations. They collected customs duties that contributed an estimated 16.6 billion EUR 
to the EU budget, i.e. approximately 13% of the EU budget20.  

1.3.3.  A European success story 

The  success  of  the  EU  as  the  world's  largest  trading  block  and  global  competitor,  growing 
volumes and speed of trade can all arguably be considered indicators of the continued success 
of  the  EU  customs  union.  It  has  supported  trade  and  economic  growth  and  protected  the 
safety, security, the health and the environment of the 500 million EU citizens. For the past 
four  decades,  the  customs  union  has  carried  out  the  responsibilities  successfully,  constantly 
adapting to new tasks, new geographical dimensions and changing global conditions. 

In  the  last  decade,  it  has  also  successfully  implemented  interconnected  IT  systems  and 
processes  that  require  collaboration  and  coordination  across  the  EU.  Today  the  27  national 
administrations  who  share  the  burden  are  expected  by  their  stakeholders  to  manage  the 
customs union and implement its rules as if they were truly 'a single entity'.  

1.4. 

Governance and functioning  

Based  on  common  legislation  and  policy,  yet  implemented  by  27  administrations  EU-wide, 
the  operational  functioning  of  the  customs  union  is  complex.  It  has  evolved  into  a  set  of 
activities and processes, making use of a mix of human, technical and financial inputs from 
the EU and Member States.  

1.4.1.  Activities and processes  

In  a  bird's  eye  view,  to  carry  out  its  functions  as  set  out  in  the  legislation,  it  can  be 
summarised that the customs union's main processes involve the following activities: 

(1) 

administering the clearance of goods, including: 

• 

• 

• 

• 

• 

supervision  of  entry  and  exit  of  goods  through  the  processing  of  pre-
arrival/pre-departure declarations, 

processing of customs declarations and management of customs procedures, 

application of trade measures and restrictions,  

calculation  and  collection  of  customs  duties,  other  levies  and  management  of 
guarantees, 

application of other relevant rules;  

(2) 

control, including: 

• 

• 

• 

risk profiling and targeting of controls, 

documentary and physical controls, 

post-clearance controls, 

20 

Budget 2011 in figures 

EN 

9 

   EN 

 
                                                 
• 

• 

carrying out official enquiries, 

pre-and post-audits of traders in relation to different types of authorisations;  

(3) 

enforcement, including: 

• 

• 

criminal/administrative investigations and prosecutions, 

imposing penalties. 

The main horizontal processes that support each of these involve:  

(1) 

(2) 

data management, including managing and processing enormous amounts of trade 
and trader data; 

trader  management,  managing  above  3  million  'clients'  involved  in  trade,21 
including: 

(1) 

identification and registration,  

(2)  providing information, 

(3)  providing various authorisations;  

(3) 

risk  management,  including  identifying,  assessing,  analysing  and  mitigating  the 
countless  different  types  and  levels  of  risks  associated  with  international  trade  in 
goods.  

1.4.2. 

Inputs 

The  key  inputs  for  the  customs  union  to  carry  out  its  functions,  implementing  these 
interlinked processes, involve rules (e.g. legislation) to be applied, practical guidelines and 
procedures as to how to apply them in practice, and resources to physically carry them out 
(financial, human, IT, equipment).  
Even  a  very  superficial  taxonomy  of  these  inputs22  reveals  these  are  in  reality  a  complex 
mixture of international agreements23 such as GATT rules, EU law, guidelines, and resources 
(e.g. supporting IT infrastructure and applications) and national rules24, guidelines, processes 
and  resources.  While  EU  customs  law  and  EU  guidelines  are  common,  and  for  example 
certain  supporting  databases  shared,  the  national  inputs  and  in  particular  the  human  and 
financial resources available to the different customs administrations vary significantly among 
Member States, as do the national processes and national domains of the IT infrastructure and 
applications.  

21 
22 

23 

24 

EORI database  
Draft  Final  Report,  Framework  contract  DIGIT/R2/PO/2009/027  ABC  II  -  Feasibility  study  on  the 
evaluation of the state of the EU Customs Union 
Many international agreements and conventions, such as the (WCO) Revised Kyoto Convention are in 
fact codified into EU law.  
EU customs law is common but there remains a margin of national rules.  

EN 

10 

   EN 

 
                                                 
1.4.3.  Governance 

Governance  of  the  customs  union  has  evolved  organically  over  time.  The  formal  legislator 
structure  involves  the  Council,  European  Parliament  and,  in  the  case  of  implementing 
legislation,  a  host  of  comitology  committees.  The  implementation  of  the  customs  union  is 
further  supported  by  a  less  formal  policy  coordination  structure,  at  the  core  of  which  is  the 
Customs Policy Group (CPG), which is chaired by the Commission, and is comprised of the 
Directors General of the 27 national administrations. It reviews issues brought to its attention 
and generates  orientations for the  further development of the policies of the customs  union. 
The CPG has provided a joint platform for the administrations since the signature of the Rome 
Treaty  (1958).  It  is  today  the  overall  policy  coordination  group  of  a  wide  set  of  steering 
groups,  project  groups  and  actions,  the  functioning  of  many  of  which  is  managed  by  the 
Commission and funded under the Customs 2013 programme25. 

2. 

EVALUATION OF THE CUSTOMS UNION  

Despite the success of its 40-year history, the last years have proved increasingly challenging 
for the customs union. In 2005, following a 2003 Communication26 on paperless customs, the 
Commission proposed a legislative package to modernise EU customs, in particular through 
an extended use of electronic data-processing techniques. The package was adopted in 200827, 
launching the full modernisation of EU customs legislation and procedures.  

Since 2010 the Commission and Member States have undertaken to evaluate the functioning 
of the customs union. It is clear that external pressures have contributed to a need for change, 
but a key finding is that some fundamental aspects of the old operating model and  how the 
participants in the customs union work together, which have not been reformed, may now also 
need to be revised.  

2.1. 

External pressures  

The external environment has put growing pressure on the customs union's performance in the 
last  decades.  Constantly  growing  trade  flows,  new  and  increasingly  complex  supply  chains 
and business models (such e-commerce), as well as new logistics and competitive pressures 
imply  larger  volumes,  a  faster  pace  and  an  increasingly  complicated  environment.  Risks 
inherent  in  the  international  supply  chains  have  also  increased  due  to  the  globalisation  of 
crime  and  terrorist  activity.  Furthermore,  pressure  from  a  rapidly  growing  number  of  tasks 
and  expectations  from  stakeholders  has  added  to  the  scope  of  customs  activities  and 
intensified the need for additional skills, tools and resources. Customs are currently delegated 
control responsibilities in more than 60 legal acts28. The effects of the economic crisis have on 
the  other  hand  intensified  the  resource  pressure  –  the  need  to  do  increasingly  more  with 
increasingly  less.  The  timing  of  the  crisis  was  poignant  for  customs  administrations  - 

25 

26 
27 

28 

Decision No 624/2007/EC of the European Parliament and of the Council of 23 May 2007 establishing 
an action programme for customs in the Community 
COM(2003)452 final of 24.07.2003. 
Regulation  (EC-No  450/2008)  of  the  European  Parliament  and  of  the  Council  laying  down  the 
Community  Customs  Code  (Modernised  Customs  Code),  OJ  L  145,  4.6.2008,  p.1,  and  Decision 
70/2008/EC  of  the  European  Parliament  and  of  the  Council  of  15  January  2008  on  a  paperless 
environment for customs and trade, OJ L 23, 26.1.2008, p. 21. 
Annex 2 to Commission Staff Working Paper - Impact Assessment of an action programme for customs 
and taxation in the European Union for the period 2014-2020 (FISCUS) - SEC(2011) 1317 final 

EN 

11 

   EN 

 
                                                 
implementing  significant  legal  reforms  meant  investing  in  major  IT  projects  at  a  time  of 
extreme budget and resource cuts.  

2.2. 

Internal pressures  

The Commission and Member States have also acknowledged that the functioning model per 
se of the customs union has inherent weaknesses. The modernisation towards a pan-European 
electronic  customs  environment  with  real  time  exchanges  of  information  between  the  27 
Member  States  means  applying  new,  cross-EU  processes,  more  investment  in  IT,  and  new 
skills for staff. This is making many of the current weaknesses, such as the inefficiency costs 
of duplication of efforts, more obvious.  

In 2010, an introspective assessment was launched to identify the internal pain points of the 
customs union. A "self-assessment" study29 identified a number of problem areas that would 
need  to  be  addressed.  It  also  generated  a  number  of  ideas  for  developing  responses  in  the 
future.  
Drawing on the study, in its report to the Council in 201130, the Commission identified a set 
of areas where the customs union needed to improve its functioning.  

The Commission report identified that:  

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

–  The  governance  of  implementation  of  the  customs  union  needs  to  be  updated  and 
improved,  both  in  terms  of  structures  and  working  methods,  also  to  enable  better 
prioritisation of initiatives and a more streamlined utilisation of scarce resources.  

–  To  improve  efficiency,  effectiveness  and  uniformity  and  realise  economies  of  scale, 
more sharing and pooling of capacities and capabilities between Member States and 
between the Member States and the Commission is needed.  

–  A  mechanism  of  measuring  and  assessing  performance  of  the  customs  union  is  the 

first and foremost prerequisite for further evolution of the customs union.  

Further  detailed  assessments  have  recently  been  carried  out  on  critical  areas  such  as  risk 
management31,  IPR  enforcement32  and  cash  controls.  Furthermore,  in  2012  the  Commission 
launched a wide-scoping external evaluation to complete the assessment from the viewpoint 
of stakeholders.  

The outcomes of these studies are set to provide the basis for a wider reflection in 2013 
about concrete priorities for the evolution of the customs union.  

29 

30 
31 

32 

Future  Business  Architecture  for  the  Customs  Union  and  Cooperative Model  in  the  Taxation  Area  in 
Europe, TAXUD/R3/VDL D(2010) 433216, Framework contract DIGIT/R2/PO/2009/027 ABC II 
COM (2011)922 
Study  on  the  on  possible  ways  to  enhance  EU-level  capabilities  for  risk  analysis  and  targeting, 
PricewaterhouseCoopers, 31 May 2012. 
Commission Staff Working Paper - Impact assessment of regulation of the European Parliament and of 
the  Council  concerning  customs  enforcement  of  intellectual  property  rights  -  SEC(2011)597  and 
SEC(2011)598  and  Commission  Staff Working  Document  -  Report  on  the  Implementation  of  the  EU 
Customs Action Plan to Combat Intellectual Property Right Infringements for the Years 2009 to 2012 – 
SWD(2012)356 

EN 

12 

   EN 

 
                                                 
3. 

CUSTOMS UNION 2020 – THE WAY FORWARD  

The operational objective of this Communication is to outline a course of action to counter the 
challenges and provide a more performing, robust and unified customs union that provides the 
same high quality of services across the EU by 2020. In response to the Commission's 2011 
report, in its conclusions of 10 December 2012, the Council stressed that "the customs union 
should  continue  to  evolve,  thus  being  able  to  meet  its  objectives  in  supporting  the  EU's 
competitiveness by protecting the business environment, facilitating trade, and offering high 
quality service to stakeholders"'33.  

To  ensure  this  evolution,  completing  the  legal  and  procedural  modernisation  is  of  utmost 
urgency.  Furthermore,  the  crucial  processes  of  identifying  the  challenges  have  been 
undertaken, and the gap analyses are well under way, and some individual gaps are already 
being addressed. Finally, the structural issues must be explicitly addressed.  

Thus  a  consistent  and  comprehensive  way  forward  for  the  evolution  of  the  customs  union 
requires three key elements:  

(1) 

(2) 

(3) 

Completing the modernisation started in 2003,  

Completing the gap analyses, and identifying the priorities to be tackled, and  

Reviewing and reforming the governance and management structures of the customs 
union.  

These  elements  must  obviously  be  carried  out  in  a  consistent  and  planned  manner  to  avoid 
disruption to day-to-day business of managing the EU's international trade flows.  

3.1. 

Complete the modernisation  

In  2003,  an  extensive  modernisation  of  customs  legislation  and  procedures  was  launched, 
covering an enhanced role of customs in securing the external borders, rationalisation of the 
legal  framework,  greater  standardisation  of  customs  rules  and  their  implementation, 
simplification  of  customs  procedures  and  computerisation  of  all  declarations  and  data 
exchange. 

The first major development in this modernisation was the adoption in 2005 of the safety and 
security amendment of the Community Customs Code34 paving the way for the introduction 
in  2011  of  systematic  automatic  risk  analysis  on  the  basis  of  electronically  submitted  data 
from trade in advance to the entry and exit of goods. 

As a general trend due to the new opportunities offered by the development of IT, all national 
customs  authorities  now  offer 
the  customs  declarations 
electronically.  Today,  above  90%  of  all  customs  declarations  in  the  EU  are  made 
electronically. Modernisation is well on its way. IT is providing significant productivity gains 
for the customs union.  

the  possibility 

to  submit 

The  key  drivers  of  the  further  and  more  comprehensive  developments  in  the  modernisation 
process  included  the  adoption  in  2008  of  the  Modernised  Customs  Code  (MCC)  and  of  the 
Decision  on  a  paperless  environment  for  customs  and  trade.  However,  the  MCC  is  not  yet 

33 
34 

Ref 
Regulation  (EC)  No  648/2005  of  the  European  Parliament  and  of  the  Council  of  13 April  2005 
amending Council Regulation (EEC) No 2913/92 establishing the Community Customs Code 

EN 

13 

   EN 

 
                                                 
applicable  and  is  subject  to  a  proposal  for  its  recast35.  The  decision  on  a  paperless 
environment also needs to be revised. 

The first priorities in the way forward are the finalisation and adoption of the legislation 
by the European Parliament and the Council, the adoption of the respective Commission 
acts, and the expedient implementation by Member States.  

3.2. 

Assessing gaps, setting priorities  

Several gap analyses have recently been or are being carried out, most notably in the areas of 
risk  management  and  supply  chain  security,  IPR,  market  surveillance,  health,  safety  and 
environment and crisis management.  

In  the  area  of  IPR  enforcement,  the  Commission  identified  challenges  and  took  action  by 
proposing a revised IPR customs regulation in 201136. Furthermore, on 10 December 2012 the 
Council  adopted  a  new  Action  Plan  for  2013-2017,  and  cooperation  with  international 
partners is being reinforced to strengthen the protection of IPR all along the supply chain.  

In  the  areas  of  health,  safety  and  the  environment,  there  is  a  clear  need  to  facilitate  the 
enforcement  by  customs  of  laws  imposing  prohibitions  and  restrictions  on  imported  and 
exported goods. To make the requirements contained in these laws compatible with customs 
procedures and processes, the Commission will produce a tool box of standard procedures to 
be  included  in  future  laws.  Restrictions  and  prohibitions  will  be  further  integrated  into  the 
TARIC and a blueprint for a Single Window for customs clearance is being prepared. Further 
guidelines, training, and capacity-building instruments  to support customs in enforcing non-
fiscal legislations are being  developed, as well as  are common control approaches  based on 
risk analysis. Furthermore,  the knowledge gap on the results of the customs enforcement of 
legislations  needs  to  be  addressed  to  enhance  policy  making  and  evaluation  of  these 
legislations. Developing measurement tools and statistics of customs control results in areas 
such as product safety and compliance is critically important. All these actions should be put 
together  into  a  strategy  for  a  joint  effort  by  the  Commission  and  the  Member  States  to 
facilitate  the  work  of  customs  in  enforcing  non-fiscal  legislations.  The  Commission  has 
already  created  an  expert  group  with  customs  and  the  authorities  in  charge  of  non-fiscal 
legislations dedicated developing the above-mentioned activities. 

Following the detection of explosives in air cargo ("Yemen incident") and in the framework 
of  the  High  Level  Working  Group  report  on  strengthening  the  Air  Cargo  security,  the 
Commission in close collaboration with the different stakeholders, business and international 
partners,  has  been  examining  the  ways  to  improve  supply  chain  security  and  contribute  to 
the  development  of  international  standards.  A  full  assessment  of  the  gaps  and  needs  in  the 
area of risk management and supply chain security is to be presented in a Communication 
of  the  Commission  on  Risk  Management  and  Supply  Chain  Security37.  Research  and 
international projects in this area are also being undertaken in the EU Framework Programme 
(FP7). 

35 

36 

37 

Proposal  for  a  regulation  of  the  European  Parliament  and  of  the  Council  laying  down  the  Union 
Customs Code (COM(2012)64 of 20.02.2012). 
Proposal  for  a  Regulation  of  the  European  Parliament  and  of  the  Council  concerning  customs 
enforcement of intellectual property rights - COM(2011)285 
To be published in early 2013. 

EN 

14 

   EN 

 
 
                                                 
Future measures should also be designed for improvement of customs risk management and 
control measures at the EU level for better protection of the financial interests of the EU and 
its Member States.38  

The  Commission  has  also  identified  serious  problems  arising  from  different  approaches  to 
infringements of EU customs legislation and the application of sanctions, which should be 
addressed in a proposal in 2013. Furthermore, following the nuclear accident in Fukushima, 
an action plan39 has been put in place to improve crisis management by customs. The tariff 
suspensions/quota rules are also being reviewed by launching a study in 2013, which may 
reveal the need for revision of these rules.  

In the customs union's international dimension, the bilateral work with trading partners and 
work in multilateral fora to develop tools and conditions for supply chain security and trade 
facilitation  need  to  continue  to  be  prioritised,  focussing  on  the  promotion  of  customs 
simplification, mutual recognition of authorised economic operators, and sharing information 
with  third  countries  on  end-to-end  management  of  the  supply  chain.  Action  to  combat 
smuggling of illicit goods, IPR infringements and the fight against fraud will continue to be 
given  a  high  profile  in  international  agreements  such  as  bilateral  trade  agreements,  and 
emphasis should be added on modernising the rules of origin contained in such agreements. 

Identified priorities in 2013 include: 

–  A  Communication  of  the  Commission  on  Risk  Management  and  Supply  Chain 

Security. 

–  A strategy for a joint effort by the Commission and the Member States to facilitate 

the work of customs in enforcing non-fiscal legislations.  

–  A  proposal  to  address  different  approaches  to  infringements  of  EU  customs 

legislation and the application of sanctions.  

–  Implementing the action plan to improve crisis management by customs.  

–  Examining and (consequently) possibly revising tariff suspensions and quota rules.  

–  Prioritising tools and conditions for trade facilitation, supply chain security and IPR 

enforcement in bilateral and multilateral international agreements. 

–  Completing  the  gap  analyses  and  prioritisation,  in  particular  by  following-up  the 

evaluation of the customs union in 2013. 

3.3. 

Improve  efficiency  and  effectiveness  through  reform  of  the  governance  of  the 
customs union  

The  current  decentralised  system  of  implementation  and  management  at  national  level  of  a 
common  core  of  responsibilities,  tasks  and  increasingly  common  processes  and  IT  systems 
has,  for  many  reasons,  reached  the  limits  of  effectiveness  and  efficiency.  These  reasons 
include  duplication,  inconsistency,  problems  of  interoperability  and  mismatch  of  resources 

38 

39 

Court  of  Auditors  -  Special  Report  No  1/2010  –  Are  simplified  customs  procedures  for  imports 
effectively controlled?  
TAXUD/B2/061/2011 

EN 

15 

   EN 

 
  
                                                 
with needs across the EU. Recent experiences in applying pan-European processes and IT in 
the implementation of the security amendment of the Community Customs Code, and in the 
application of certain EU-wide authorisations confirm these problems. Furthermore, economic 
operators  have  reported  of  different  treatment  across  the  EU  and  complained  of  the 
uncertainty  and  costs  that  arise  from  different  service  levels  and  practical  requirements  that 
they encounter across the EU.  

As the legal basis is common, it is apparent that it is the operational implementation that falls 
short  in  this  respect.  The  long  unchanged  system  of  implementation  and  management  at 
national level need to give way to a closer form of working together and joint responsibility 
among  the  administrations  implementing  the  customs  union.  Reforms  of  legislation  and 
working  methods,  and  resolving  specific  issues  will  contribute  to  this.  However,  a  cross-
cutting problem remains in the highly decentralised and increasingly complex governance of 
the implementation of the customs union.  

A reform of the governance of the customs union needs to be undertaken, not least to enable 
more  efficiency  gains  (such  as  economies  of  scale  from  pooling  of  resources)  and 
effectiveness  (such  as  risk  management  on  the  basis  of  pooled  risk  information).  Above  all 
reform of governance should aim to ensure to the provision of a consistently high quality of 
service across the EU.  

To ensure the efficient and effective provision of high quality service across the EU, the 
reform of the governance should entail improvements in:  

–  Defining  operational  objectives/quality  of  service  for  the  EU  and  a  joint  system  of 

monitoring thereof; 

–  Increasing operational coordination and joint action where it is needed; 

–  A  mechanism  for  identifying  needs,  priorities  and  transferring/supporting  capacity 

to where it is needed.  

EN 

16 

   EN 

 
 
4. 

CONCLUSION  

The  customs  union  provides  a  clear  and  uncontested  value-added  to  EU  society  and 
businesses.  Still  a  considerable  collector  of  revenue  for  the  EU  and  Member  States,  it  is  in 
many ways a guardian of the internal market, an indispensable support for the smooth flow of 
EU  trade,  all  the  while  providing  valuable  protection  to  the  EU's  businesses,  societies  and 
environment from various threats from international goods trade.  

In  recent  years  the  customs  union  has  taken  on  considerable  reform  and  modernisation  of 
legislation,  procedures  and  working  methods.  Nevertheless,  the  reforms  need  to  be  fully 
implemented. Furthermore, reform must extend to its internal structures, the governance of its 
operational functioning.  

The Commission calls on the Council and the European Parliament to: 

–  Complete the modernisation without delays;  

–  Engage in dialogue with relevant stakeholders, taking account of the results of recent 
evaluations and gap analyses, including the 2012 evaluation of the customs union, to 
establish the priorities;  

–  Reform the governance and the roles and responsibilities of Member States and the 
Commission  regarding  the  overall  operational  management  of  the  customs  union. 
The next steps should involve a blueprint for the reform by 2014.  

EN 

17 

   EN