COMMISSION STAFF WORKING DOCUMENT presenting the results of the consultations of Member States and stakeholders required by Article 8(3) of Decision No 1152/2003/EC, Article 45(1) of Directive 2008/118/EC, Article 35(1) of Council Regulation (EC) No 2073/2004 and Council Regulation (EU) No 389/2012 Accompanying the document REPORT FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT AND THE COUNCIL on the functioning of the arrangements for the computerised supervision of excise movements under duty suspension and on the application of the administrative cooperation rules in the area of excise duties, in accordance with Article 8(3) of Decision No 1152/2003/EC, Article 45(1) of Directive 2008/118/EC, Article 35(1) of Council Regulation (EC) No 2073/2004 and Council Regulation (EU) No 389/2012
Date: 2013-12-03
Institutions: European Commission
Subjects: administrative cooperation, alcoholic beverage, electronic document management, energy-generating product, exchange of information, excise duty, free movement of goods, information technology applications, internal border of the EU, intra-EU trade, tobacco













EUR-Lex - 52013SC0490 - EN











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52013SC0490

COMMISSION STAFF WORKING DOCUMENT presenting the results of the consultations of Member States and stakeholders required by Article 8(3) of Decision No 1152/2003/EC, Article 45(1) of Directive 2008/118/EC, Article 35(1) of Council Regulation (EC) No 2073/2004 and Council Regulation (EU) No 389/2012 Accompanying the document REPORT FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT AND THE COUNCIL on the functioning of the arrangements for the computerised supervision of excise movements under duty suspension and on the application of the administrative cooperation rules in the area of excise duties, in accordance with Article 8(3) of Decision No 1152/2003/EC, Article 45(1) of Directive 2008/118/EC, Article 35(1) of Council Regulation (EC) No 2073/2004 and Council Regulation (EU) No 389/2012 /* SWD/2013/0490 final */









Table of Contents
1..... Summary.. 3
1.1.     Acronyms
and abbreviations. 4
2..... The
computerisation of the movement and surveillance of excisable products. 5
2.1.     Introduction
- the need for computerisation. 5
2.2.     Decision
No. 1152/2003/EC.. 6
2.3.     Excise
Movement and Control System (EMCS) 7
2.4.     Reporting
on the implementation of the Decision. 7
2.5.     The
EMCS project 8
2.5.1.       EMCS
project organization. 8
2.5.2.       Planning. 11
2.5.3.       Overview
of EMCS Components. 12
2.5.4.       Operational
Statistics. 14
2.6.     The
stakeholder survey. 17
2.6.1.       Purpose. 17
2.6.2.       Methodology. 18
2.6.3.       The
sample. 18
2.6.4.       Questions
on the achievement of the general objectives of Decision 1152/2003/EC   18
2.6.5.       General
Assessment of EMCS and its functioning. 21
2.6.6.       Criteria
and Methods – future evaluation of EMCS. 30
3..... The
printed version of the electronic administrative document or other commercial
document and arrangements for fallback (Article 45(1) of Council Directive
2008/118/EC) 32
3.1.     Introduction. 32
3.1.1.       Legal
base. 32
3.1.2.       Methodology. 32
3.1.3.       The
sample. 32
3.1.4.       The
structure. 33
3.2.     The
fallback procedure. 33
3.2.1.       Member
States. 33
3.2.2.       Traders. 34
3.2.3.       Conclusion. 36
3.3.     The
print-out of the accompanying document 36
3.3.1.       Member
States. 37
3.3.2.       Traders. 37
3.3.3.       Conclusion. 38
3.4.     General
EMCS. 38
3.4.1.       Member
States. 38
3.4.2.       Traders. 39
3.4.3.       Conclusion. 40
3.5.     General
conclusion. 40
4..... Results
of the consultation concerning arrangements for administrative cooperation in
the field of excise duty.. 41
4.1.     Introduction. 41
4.2.     Practical
implementation of the new arrangements for administrative cooperation in EMCS
Phase 3. 41
4.3.     Legal
Base for this section of the report 41
4.4.     Methodology. 42
4.5.     The
Sample. 42
4.6.     Questions
on Regulation (EU) No. 389/2012 and Changes from Regulation (EC) No. 2073/2004  42
4.6.1.       Distinction
between administrative cooperation under Regulation (EU) No. 389/2012 and the
mutual assistance arrangements under the Naples II Treaty. 42
4.6.2.       Designation
of liaison departments and competent officials in addition to the Central
Excise Liaison Department 43
4.6.3.       Article
6 Responsibilities of Central Excise Liaison Office. 43
4.6.4.       Article
7 Prior authorisation for exchange of information obtained through judicial
proceedings. 43
4.6.5.       Feedback
from requesting Member State on information provided. 43
4.6.6.       Article
11 Time limits for replies to requests for administrative cooperation  44
4.6.7.       Article
15 Automatic Exchange of Information. 46
4.6.8.       Article
16 Spontaneous Information. 46
4.6.9.       New
reporting obligations. 46
4.6.10.    Suggestions
for improvements. 46
4.6.11.    Conclusions. 47
4.7.     Experiences
with EMCS Phase 3 (Exchange of Information functions), SEED, CS/MISE (Movement
Tracking and Statistics Service) and the ELOtoELO Mailbox. 47
4.7.1.       EMCS
Phase 3 versus the previous use of e-forms for exchange of information on
request 47
4.7.2.       Register
of economic operators (SEED) 47
4.7.3.       SEED-on-Europa. 48
4.7.4.       Central
Services/Management Information Services for Excise (CS/MISE) 48
4.7.5.       Secure
E-Mail for Administrative Cooperation Purposes (ELOtoELO) 49
4.7.6.       Conclusions. 49
4.8.     Future
Requirements. 50
4.8.1.       Risk
– distribution of standard risk profiles. 50
4.8.2.       Other
Requirements. 50
4.8.3.       Conclusions. 50
5..... ANNEX:
DRAFT REPORT FROM THE COMMISSION TO THE COUNCIL AND THE EUROPEAN PARLIAMENT on
ReG. (EC) 2073/2004. 51
1.           Summary
This document comprises three sections devoted
to implementation of various aspects of excise legislation. Each section is
based on a comprehensive survey of the relevant stakeholders, as well as other
input from interested parties and the Commission’s reflections on the issues
raised. Each section begins with a summary of finding and a set of
recommendations for further action, where necessary. The purpose of this
document is complement the Commission report required by the EU excise
legislation, as quoted below, and to provide the details of the
consultation-based analysis underpinning the findings of the official report.
Section 2
reports on the implementation of Decision 1152/2003/EC of the European Parliament
and Council on the computerisation of the movement and surveillance of
excisable products. This Decision established the governance arrangements and
the central development funding for the Excise Movement and Control System
(EMCS). The Decision requires the Commission to make a report on the
implementation of the Decision and proposals for evaluating the performance of
the system. EMCS started partial operation in April 2010. Its full scope was
implemented by the Commission and the Member States on 1st January 2012.
EMCS currently supervises approximately 250 000 movements per month of excise
goods under duty suspension. The 131 stakeholders that were surveyed as part of
the preparation of this section of the report see EMCS as an improvement over
the paper based system that it replaced, both in terms of trade facilitation
and in aiding the fight against fiscal fraud. Nevertheless, the stakeholders’
surveys have made numerous useful suggestions for improvements, particularly in
the linkage of EMCS with customs applications. The Commission will take these
suggestions into account for future legal and technical work
Section 3
addresses the requirement under Article 45(1) of Directive 2008/118/EC for the Commission to provide a report to the European Parliament and
the Council concerning EMCS Fall Back Procedures, which are covered by Articles
26 and 27 of the Directive, and the print-out of the accompanying document
provided for under Article 21(6) of the Directive. The
108 stakeholders that were surveyed were generally satisfied with the
arrangements set up under Directive 2008/118/EC, but called for more
standardisation of the fallback documents to ensure that they are easily
recognisable as such by all interested parties.
Section 4
summarises the consultation of Member States concerning their first experiences
with Council Regulation (EU) No. 389/2012 on administrative cooperation in the
field of excise duties and repealing Regulation (EC) No 2073/2004. This coincided
with the introduction of EMCS Phase 3, which has incorporated exchanges of
information for administrative cooperation into EMCS, as well as updating the
arrangements for the maintenance of registers of economic operators and the
collection of operational statistics. The Commission received 24 replies,
representing 19 Member States to the survey that was run on these subjects.
Member States felt that the new arrangements for administrative cooperation
were an improvement over the previous e-forms based systems, giving better
control of workflow and a readily available archive of administrative
cooperation information. Various suggestions for improvements to EMCS
functionality were made, which the Commission will take up for inclusion in the
future evolution of EMCS and where necessary the corresponding implementing
acts. For information Section 5 contains a survey on the operation of
the repealed Regulation (EC) No. 2073/2004.
1.1.        Acronyms and abbreviations
The acronyms and abbreviations used in
the present report are listed below.
 Acronym || Definition 
 AAD || Administrative Accompanying Document 
 e-AD || Electronic Accompanying Document 
 ABV || Alcohol By Volume 
 AES || Automated Export System 
 ARC || Administrative Reference Code 
 CELO || Central Excise Liaison Office 
 CIGINFO || Cigarette Information sub-module of the Antifraud Information  System (AFIS) 
 CS/MISEE || Central Services/Management Information System for Excise 
 CMR || Convention on the Contract for the International Carriage of Goods by Road     by by Road 
 CRMS/RIFF || Customs Risk Management System/ Risk Information Form 
 CN || Combined Nomenclature 
 DDNEA || Design Document for National Excise Application 
 ECP || EMCS Computerisation Project 
 ECG || Excise Contact Group 
 ECS || Export Control System 
 ECWP || EMCS Computerisation Working Party 
 ELO || Excise Liaison Office 
 EMCS || Excise Movement and Control System 
 EWSE || Early Warning System for Excise     
 FESS || Functional Excise System Specification 
 IPM || Interactive Policy Making portal 
 MLC || Multilateral Controls 
 MCPP || Monthly Central Project Planning 
 MSA || Member State Administration 
 MVS || Movements Verification System 
 NPP || National Project Plan 
 SAD || Single Administrative Document 
 SAAD || Simplified Administrative Accompanying Document 
 SEED || System for the Exchange of Excise Data 
 SEP || Security Policy 
 SLA || Service Legal Agreement 
 TA || Test Application 
 TOC || Terms of Collaboration 
2.           The computerisation of the
movement and surveillance of excisable products
2.1.        Introduction
- the need for computerisation
With the construction of the Single Market
frontier controls of movements of goods between Member States were abolished.
Excise goods present particular risks when being moved between Member States
because:
1. The duty rates of some excise products
(cigarettes, some energy products) lead to a taxation burden that is much
greater than the net value of the goods. Therefore the risk of tax evasion is
considerably greater than for VAT.
2. The whole amount of excise duty is collected
at one single location. Therefore excise duty suffers from the same problem as
classic sales or purchase taxes, where a distinction has to be made between
mostly exempt Business to Business supplies and taxable supplies to consumers,
who carry the full liability, thus encouraging evasion based around trader status.
3. Excise duty is in almost all circumstances
due in the Member State of consumption (the destination principle). This,
coupled with the two previous differences, means that there would remain a high
risk of excise duty evasion in intra-community movements, even if the rates
were harmonised.
Given the fiscal risks inherent in the movement
it was necessary to make special arrangements for the holding and movement of
excise goods. Directive 92/12/EEC was adopted by the Council in order to take
account of these factors.
Under Directive 92/12/EEC for the movement of
excise goods under excise duty suspension economic operators made use of a
multi-part paper form (the Administrative Accompanying Document or AAD.)
Movements of excise goods under duty suspension were accompanied by multiple
copies of the AAD. When the goods were delivered the consignee would forward a
copy of the AAD to its Excise Authority for endorsement. This copy would be
returned to the consignee who would then return it to the consignor to act as a
report of receipt. The report of receipt would then serve as evidence that the
excise goods had been transferred to another economic operator and that the
consignor had thereby discharged any liability for excise duty on the goods.
The AAD document flow only involved the excise
authorities at destination and it was common for documents to be delayed or
lost.[1]
In general Member States had no information in advance of the arrival of excise
goods and so the system provided no real monitoring or control. In 1997 the
potential for excise fraud implicit in this system was highlighted by the High
Level Group Report on Fraud in the Tobacco and Alcohol Sectors.[2] The
key recommendation of this group was for the creation of a fully computerised
system for the monitoring and control of excise goods. Work on this
recommendation culminated in the adoption by the European Parliament and the
Council of a Decision to provide for the development of such a system.
2.2.        Decision No. 1152/2003/EC
Decision No 1152/2003/EC of the European
Parliament and of the Council of 16 June 2003
(hereafter referred to as “the Decision”) on
computerising the movement and surveillance of
excisable products establishes a computerised system and sets out the following
goals:
Article 1(2):
“The computerised system is intended
to:
(a) permit the electronic transmission
of the accompanying document provided for in Regulation (EEC) No 2719/92, and
the improvement of checks;
(b) improve the functioning of the
internal market, by simplifying the intra-Community movement of products under
excise duty suspension arrangements, and by affording Member States the
possibility of monitoring the flows in real time and of carrying out the
requisite checks where necessary.”
The Decision mandated the electronic
transmission of the AAD. The Decision also aimed to afford Member States the
possibility to conduct real-time monitoring of the flow of documents between
economic operators.
The Decision did not include a general revision
of Directive 92/12/EEC. Nevertheless, it was decided to also revise the general
arrangements for the holding and movement of excise goods, since there was a
need to clarify and simplify the legislation. More specifically, it was
considered that Directive 92/12/EEC did not provide an adequate basis for a
fully electronic monitoring and control system. The Commission proposed a
complete revision of Directive 92/12/EEC, which was adopted by the Council in
2008 as Directive 2008/118/EC. The new Directive provides a firm legal basis
for the complete replacement of the paper based system with an electronic
system for the movement of goods under excise duty suspension. This system is
the Excise Movement and Control System (EMCS.)
2.3.        Excise
Movement and Control System (EMCS)
EMCS caters for the computerisation and mutual
exchange of information concerning movements of excisable goods under duty
suspension and the actors involved in these movements. Well-defined procedures
combined with automated data validation contribute to the simplification of
intra-EU movements of excisable products. In addition, EMCS provides Member
States with complementary follow-up and collaboration tools.
The main benefits provided by EMCS in terms of
the objectives defined in the Decision are the following:
·              
for the economic operators: a fast discharge of
the movement procedure resulting in a fast release of movement guarantees, and
a reduction of the administrative burden;
·              
for the Member State Administrations (MSAs): a
better view of on-going movements of excise goods, a decrease of the risk of
fraud and a better targeting of their controls.
EMCS was to be established within a fixed time
period:
Article 2:
“Member States and the Commission shall
establish the computerised system within six years of the entry into force of
this Decision.
Activities relating to the initiation
of application of the computerised system shall begin not later than 12 months
after the entry into force of this Decision.”
The Decision entered into force on 1 July 2003
(publication in Official Journal L 162); therefore, the deadline for the
establishment of the EMCS, as specified in Article 2 of the Decision, was 1
July 2009. The specification of the project was delayed. The revised planning
was reviewed by the Committee on Excise Duty and the of the  National Director
Generals of Customs and Deputy Generals responsible for Excise at the 25th 
meeting of the Customs Policy Group on 2nd July 2008. The EMCS Master
Plan was revised accordingly. The first stage of the project (Phase 2) was
started on 1st April 2010, with full operation of the first stage on
1st January 2011. The next stage of the project (Phase 3) was put
into operation on 1st January 2012.
2.4.        Reporting
on the implementation of the Decision
Article 8 paragraph 3 of the Decision provides
for the submission of the report by the Commission to the European Parliament
and the Council, which covers the implementation of the computerised system
(EMCS) by the Commission and the Member States, and proposes methods and
criteria to be used for evaluation of EMCS functioning:
Article 8(3):
“At the end of the six-year period
referred to in the first subparagraph of Article 2, the Commission shall
present to the European Parliament and the Council a report on the
implementation of the computerised system. The report shall set out, inter
alia, the methods and criteria to be used in the later evaluation of how the
system is functioning.”
In order to meet this obligation the Commission
has prepared this section of the document. Section 2.5 explains the
organisation of the EMCS project, which provides a structure for the
specification, development and operation of the EMCS system as well as
providing a basis for cooperation between the Commission and the Member States for the evaluation and further evolution of the system. Section 2.6 describes
the results of the stakeholder survey carried out by the Commission into the arrangements
for EMCS project, the general functioning of EMCS and possible approaches for
future evaluations of the system.
2.5.        The EMCS project
This section describes the EMCS project
governance structures, the high level planning of the project, and the
achievements of the project up until now, including some first operational
statistics
2.5.1.     EMCS project organization
For EMCS to be successful it was extremely
important to ensure that decisions made would be acted upon at the right time
by the Commission and by the Member States. It was equally important to ensure
that Trade Federations could express their views on the on-going development of
the project. Therefore a number of decision making and consultative bodies were
set up. It was also very important to establish a set of ground rules for the
collaboration between the Commission and the Member States so that each party
had a clear and common understanding of their obligations.
The following diagram shows the different
decision making and consultative bodies in the EMCS project.
Decision
Making and Consultative Bodies in EMCS
The Committee
on Excise Duty
The Committee is the principal decision making
body of the project. The Committee is chaired by the Commission and has one
voting delegate per Member States.
Article 4(1):
The Commission, acting in accordance
with the procedure provided for in Article 7(2), shall coordinate the setting
up and running of the Community and non-Community components of the
computerised system, and in particular:
(a) the infrastructure and tools needed
to guarantee the system’s internal links and overall interoperability;
(b) the development of a security
policy of the highest standard possible in order to prevent unauthorised access
to data and to guarantee the integrity of the system;
(c) the instruments for the
exploitation of data to combat fraud.
Article 7(1):
The Commission shall be assisted by the
Committee on Excise Duties[3] set up under Article 24 of Directive 92/12/EEC.
In implementing the provisions as set out in
Article 4(1) of the Decision, the Committee on Excise Duty has the following
main responsibilities:
·              
Coordination and monitoring the project at a
strategic level;
·              
Adoption of planning and system specifications;
·              
Setting business objectives, priorities and
milestones;
·              
Taking strategic decisions, on matters related
to the legal, procedural, organisational, financial and technical aspects of
the EMCS Computerisation Project.
With these responsibilities, the Committee on
Excise Duty acts as the Steering Committee for the project. Committee on Excise
Duty meetings are convened by the Chair, either on his initiative or at the
request of a simple majority of Committee members; typically, the Committee on
Excise Duty normally meets twice a year.
ECWP
The EMCS Computerisation Working Party (ECWP),
a forum for discussing functional, organisational and IT aspects of the EMCS Computerisation Project (ECP), was set
up by the Committee on Excise Duty in 2002. The main responsibilities of the
ECWP are:
·              
Contributing to and following up the production
of system specifications;
·              
Discussing the implementation of legal,
procedural, organisational and IT aspects and issue recommendations to be
submitted for adoption to the Committee on Excise Duty;
·              
Delivering an opinion on functional and
technical documents, and project deliverables;
·              
Identifying any common areas of development
which could allow economies of scale;
·              
Reporting and formulating recommendations to the
Committee on Excise Duty.
The Committee on Excise Duty is the only entity
empowered to take decisions on the basis of the Decision. Proposals made by the
ECWP are advisory.
During the specification and development of
EMCSECWP meetings were convened by the Commission approximately every 6 to 8
weeks. Now that EMCS is in operation the ECWP meets to two to three times a
year to examine operational issues and proposals for future evolution. The ECWP
has met 61 times since 2002.
Central
Project Team
The Central Project Team is the team led by Directorate-General
Taxation and Customs Union of the European Commission, consisting of business
and IT experts.
The Central Project team is in charge of the
management of the central project, including the coordination with the national
projects. This coordination consists primarily of meetings, missions,
workshops, trainings and the launch of common communication initiatives.
National
Project Teams
Within
a Member State Administration, the National Project Team is responsible for
managing the national EMCS project and participating in the coordination
initiatives of the Central Project Team.
Terms of
Collaboration (TOC) and Service Level Agreement (SLA)
The
detailed arrangements for the coordination of central and national activities
are set out in two documents, which have been revised regularly on the basis of
changing needs as the project has advanced. The Terms of Collaboration document
explains in detail the agreed structure of the national and central project
teams and their respective obligations. The Service Level Agreement describes
the obligations that the Commission Services have towards the Member States.
These services include the provision of a Help Desk, a Change Management
Service and an operational service that it responsible for operating the
central parts of EMCS and making sure that they meet the minimum level of
guaranteed service.
Excise
Contact Group
The Excise Contact Group (ECG), composed of
representatives of the European Trade Federations, of the Commission and of the
Member States Administrations, ensures bilateral communication on EMCS with the
European trade associations. The ECG meets approximately twice a year.
2.5.2.     Planning
The Decision provides for the establishment of
an EMCS Master Plan, which acts as the central planning tool for EMCS.
Article 4(2)
To achieve the aims of paragraph 1, the Commission shall conclude
the necessary contracts for setting up the Community components of the computerised
system and shall, in cooperation with the Member States meeting within the
Committee referred to in Article 7(1), draw up a master plan and management
plans required for the establishment and running of the system.
The master plan and the management plans shall specify the initial
and routine tasks which the Commission and each Member State are to perform.
The management plans shall specify the completion dates for the tasks required
for carrying out each project identified in the master plan.
The Master Plan provides a long-term
vision of the project and is used to ensure the synchronisation between all the
parties involved in the project. It identifies the activities to be performed
in order to be able to respect the deadlines specified in the EMCS legal decision.
The Master Plan describes the activities, their expected results, their target
completion date and the actor(s) responsible for them. The Master Plan also
defines all major synchronisation points between all involved parties.
As a high level plan, the Master Plan is
updated when major changes occur in the lifecycle of the project. A first
version was adopted by the Member States in 2003. The current version, which
reflects the fact that EMCS is now in production was adopted by the Committee
on Excise Duty in June 2012.
Each set of activities identified in the Master
Plan is detailed in a Management Plan. The sets cover each of the ECP
phases (phase 0, 1, 2 and 3) but also the legal and procedural framework, the co-ordination
and support activities and the accompanying information programme.
These Management Plans are not published
individually anymore, but have been consolidated since July 2005 in the Monthly
Central Project Planning (MCPP).
The MCPP combines a long-term vision of the
project (extracted from the Master Plan) and a detailed activity report
covering a window of 3 months before and 9 months after the month in review.
The MCPP also integrates the monthly input received from the Member States via
the National Project Plans (NPP).
The
EMCS system has been planned in “1+3” phases (Phase 0 and Phase 1, 2, 3).
Phase
0 encompasses the operational support,
maintenance and improvement of existing systems used in the excise field, which
pre-dated the operational phase of EMCS; Phase 0 ensured that these systems are
aligned with the overall objective of EMCS. Now that EMCS is operational, the
one remaining Phase 0 component, Movement Verification for movements not under
excise duty suspension, will be phased out in 2014, following the inclusion of
this functionality in EMCS
Phase
1 is a continuous activity, which
supports the production of the EMCS System Specifications.
Phases
2 and 3 are the development and implementation
phases, covering the detailed design of the national excise applications, the
development of the central and national applications, as well as their phased
rollout.
Phase
2 focused on the essential functionality
necessary to ensure the successful introduction of EMCS. Following a
transitional period starting in April 2010, it came fully into operation on 1st
January 2011 and completely replaced the previous paper based system.
Phase
3 incorporates administrative cooperation
into EMCS, replacing earlier arrangements based on e-forms and paper exchanges.
It was put into operation on 1st January 2012.
The
current Master Plan provides for 3 further releases of EMCS between 2013 and
2017.
·              
Release 3.1 (by end Q1 2014) introduces mainly
corrective changes
·              
Release 3.2 (by end Q3 2015) provides for
corrective changes, data improvement
·              
Release 3.3 (by end Q1 2017) improves
integration between EMCS and Export Control System (renamed the Automated
Export System – AES).
2.5.3.     Overview of EMCS Components
EMCS consists of a number of components, which
for ease of exposition can be divided into core components and support
components.
Core Components – core business and
administrative cooperation
The core components of EMCS have common
specifications, but are developed and maintained by the Member States
The core business component provides the
core processes of submission of the e-AD by the consignor, the validation of
the e-AD by the Member State of Dispatch, the submission of the report of
receipt to the Member State of Destination by the consignee and its forwarding
by the Member State of Destination to the Member State of Dispatch, thereby
discharging the movement. The core business also includes the possibility to
cancel the movement before it leaves the place of dispatch, to make a change of
destination, where the consignee has changed, or a consignee has refused goods
at arrival and the possibility to split on-going consignments to allow for
multiple consignees in the case of energy products. The core business module
also includes the functionality for interfacing with export. The details of the
interfacing with national import procedures are for the moment a national
matter. The functioning of the core business component is legally defined by
Directive 2008/118/EC and Commission Regulation (EC) No. 684/2009, as amended.
As of Phase 3 the administrative cooperation
component replaces the previous e-form based systems, EWSE and MVS, for the
exchange of administrative cooperation information. The component also includes
the possibility to share control reports and interruption reports which result
from physical control activities and to exchange event, alert and rejection
reports. The functioning of the administrative cooperation component is defined
by Council Regulation (EU) No. 389/2012. A Commission Implementing Regulation
to define the details of the business processes and data requirements for the
use of EMCS in administrative cooperation is currently in preparation.
Support Components SEED, CS/MISE and the
Test Application
SEED is developed and maintained by the
Commission and the Member States, SEED-on-Europa, CS/MISE and the Test
Application are developed and maintained by the Commission
SEED is a distributed register of the
authorisations held by excise traders who conduct business including the use of
excise duty suspension procedures. SEED holds authorisation information on
authorised warehouse keepers, registered consignors and registered consignees.
It also holds information on tax warehouses operated by authorised warehouse
keepers. The functioning of SEED is legally defined by Council Regulation (EU)
No. 389/2012 and Commission Implementing Regulation (EU) No. 612/2013
SEED-on-Europa is a central service provided by
the Commission to allow traders to confirm the validity of excise
authorisations claimed by a trading partner. Its legal base is shared with SEED.
Central Services / Management Information for
Excise (CS/MISE) is  Commission central service provided by the Commission,
which allows Member States and the Commission to check the status of open excise
movements and to generate statistical reports. The function of CS/MISE is
defined in general terms by Council Regulation (EU) No. 389/2012. A Commission
Implementing Regulation to define the details of the data to be collected for
statistical reporting is currently in preparation.
The Test Application (TA) is a Commission central
application, which can be used by Member States to test the conformance of
national applications to the EMCS specifications, and to therefore the
interoperability of their applications with those of other Member States.
2.5.4.     Operational
Statistics
Since April 2010 operational statistics have
been collected automatically by the Commission and made available to Member
States using CS/MISE.
The graph below, generated from CS/MISE, shows
numbers of movements started per quarter from 1 April 2010 when EMCS became
operational. From 1 April 2010 until 31 December 2010 EMCS was not compulsory,
giving Member States and economic operators time to gradually migrate from the
previous paper-based system. During this initial period a large number of
movements took place under the paper based system. From 1 January 2011 EMCS
became compulsory for movements of excise goods under duty suspension, hence
the rapid increase in the number of movements in first quarter of 2011.
IE801 messages sent per quarter 1/04/2010 –
30/06/2013
 Number of movements (IE801) || 7 425 318 || Number of movements with registered RoR (IE818) || 7 055 685 
 Number of movements with reminder sent (IE802) || 1 530 116 || Number of movements with destination change (IE813) || 52 765 
 Number of cancelled movements (IE810) || 96 275 || Number of rejected movements (IE819) || 6 581 
 Total of messages exchanged 01/04/2010 – 01/06/2013 || 16 166 740 
Table 1 Global statistics 01/04/2010 – 01/06/2013
Table 1 shows that only 1.3 % of movements have
been cancelled and in 0.7 % of movements the destination has been changed. The
consignor may only send a cancellation message after validation of e-AD but
before the actual dispatch of goods. Cancellation messages are sent due to
errors in data such that the e-AD does not correctly describe the consignment
or because the physical movement has been cancelled for business reasons.
Change of destination is possible either in the normal course of the movement
(new consignee or new place of delivery) or following a refusal at delivery or
a rejection of the e-AD. The percentage of cancellations and changes of
destination compared with the total number of movements since the beginning of
EMCS is of the order of 1.4%. Or in other words 98.6% of EMCS movements
complete normally and without any change to the original consignee.
The total for the number of e-ADs validated is
slightly higher than the number of reports of receipt / report of export. This
is normal since there is a delay between the issuing of an e-AD and the
corresponding report of receipt, which should correspond to the journey time of
the movement plus the time that it takes the consignee to send a report of
receipt to the consignee. The difference in totals can be used to estimate the
average time taken to close a movement in EMCS, assuming that all movements are
eventually closed by a report of receipt. If on average there are 700 000
movements per quarter and the difference between the total number of validated
e-ADs and the total number of reports of receipt since 1st April
2010 is approximately 370 000, we can estimate that the average time between
opening a movement and the sending of a report of receipt is:
700 000 / 370 000 x 3 months = 1 ½ months
during the period that EMCS has been operating.
On the other hand the time taken for delivery
plus the time taken to issue a report of receipt is only 6.8 days according to
a statistics analysed form CS/MISE. This is an extremely good figure for a
comparative new system, but does not take into account the time taken where
movements have been closed manually. The difference is probably due to
movements which have not been closed automatically, meaning that they do not
have a matching electronic report of receipt and have been closed manually
using alternative evidence.
Such so-called manual closures still occur in
some circumstances where excise goods have been exported and where the
automatic link between EMCS and the Export Control System has not worked
correctly.
The time taken to close EMCS movements will
require further attention in future, particularly paying attention to times
taken for manual closures, This would form the basis of a useful performance
indicator.
Comparing the number of e-ADs validated (IE
801) with the number of movements where a reminder was sent (IE 802) gives
approximately 21% of movements where the estimated journey time had been
exceeded and the Member State of Dispatch had not yet received a report of
receipt within 5 days of the expected date of delivery. This figure seems
rather high and suggests that the use of the reminder message should be
investigated more closely.
 Number of control reports (IE717) || 14 948 || Number of admin coop common request (IE721) || 4 435 
 Number of interrupted movements (IE807) || 1 806 || Number of admin coop results (IE867) || 6 129 
 Number of event reports (IE840) || 1 364 || Number of history results (IE838) || N/A 
 Total of messages exchanged 01/01/2012 – 01/06/2013 || 28 682 
Table 2 Follow-up and collaboration
messages between 01/01/2012 and 1/06/2013
Table 2 provides an overview on exchange of
messages form EMCS Phase 3 for follow up and collaboration. It consists of
reports on controls carried out during movements: those are usually physical checks
(control reports, IE717) as well as of reporting of events that occurred during
the movement (event reports, IE840). Control reports are produced and shared
between administrations, whilst event reports can be produced by anyone who has
an interest in the movement. Control reports and event reports were introduced
in January 2012. The numbers are small, in comparison with all movements. Not
all Member States are using them yet, but there is definitely a growing trend.
Table 2 also shows the number of times that Members States have decided to
interrupt a movement following findings of control, or following some events,
or from any other source of information. Interruptions result in the end of a
movement and, depending on national legislations, may lead to confiscation of
the goods in question.
Table 2 also contains information on
administrative cooperation between Member States. Data gives numbers of
requests for assistance and the replies to be sent between administrations, and
the exchange of spontaneous information.
The Phase 0 EWSE Early Warning System for
Excise allowed transmission of information messages and warning messages, to indicate
to other Member States whether particular movements were considered to be high
risk, on the basis of some shared risk factors, or on the basis of risk
assessment in the Member State of Departure. EWSE messages were the only
advance indication of the impending arrival of a movement that the Member State
of Destination received before the goods actually arrived. The message was
intended to encourage the Member State of Destination to carry out
post-delivery controls.
Since the establishment of EMCS Member States
have been able to conduct their own risk assessments, as they now receive
advanced notice of all movements on the basis of the e-ADs that they receive
from the Member State of Dispatch. Therefore EWSE messages became almost
obsolete from 1st January 2011 onwards, only being used occasionally
for the signalling of a risk that would not be obvious from the e-AD data. EMCS
provides real-time, on-line information about movements and allows an
administration better application of risk analyses and performance of more
effective controls.
The Phase 0 MVS Movement Verification System
now serves an administrative tool for the verification of movements of excise
goods after their release for consumption. These movements take place outside
of EMCS, relying on a simplified version of the system based on the paper AAD
form that was used for duty suspended movements until the introduction of EMCS.
Before the introduction of EMCS MVS messages
were also used for movements under duty suspension. The number of these
messages was quite high at between 1500 and 2000 requests per quarter. After
the establishment of EMCS but during the transitional period between 1 April
2010 and 31 December 2010 we can still observe the use of those messages as
well as for duty suspension. Since the movement of excise goods under EMCS
became compulsory we can note a decrease of the exchange of MVS messages. From
2012 after introduction of new functionalities and the replacement of MVS
message for duty suspension with the EMCS Phase 3 IE721 message, the number of
MVS messages has declined steeply to about 400 messages per quarter. MVS
requests now only concern movements of goods that have been released for
consumption in one Member State that are subsequently moved to another Member State.
2.6.        The stakeholder survey
2.6.1.     Purpose
The Commission conducted a survey to gather
stakeholder views on how well the objectives of the Decision have been met,
their opinions on the current functioning of EMCS and on how the performance of
EMCS can be evaluated in the future.
2.6.2.     Methodology
The Commission conducted the survey using a
questionnaire addressed to Member States and to trade representatives.
The questionnaire was accessible through a web
link, using the online survey tool of the Commission Interactive Policy Making
portal (IPM). An invitation that included the link was sent to the Permanent
Representations of the Member States and to the Trade Federations represented
in the Excise Contact Group. The Trade Federations were asked to forward the
invitation to their National Federation and to individual companies. The
questionnaire was open from 18th of March until 12th of April 2013. The data
delivered by the questionnaire were used as input for this report.
2.6.3.     The
sample
The questionnaire received a total of 131
replies. The total sample consists of two different “sub samples:”
(1) There are 27 replies from Excise
Administrations of Member States, which represent 23 different Member States.
Some Member States filled in the questionnaire more than once. To keep the
results representative, harmonisation of the answers of the same Member State was sometimes needed. The correct sample size is indicated for each question
in this report.
(2) The other 104 replies come from
multinationals (21 replies), large companies primarily operating one Member State (23 replies), small and medium enterprises (50 replies) trader federations (8
replies) and other (2 replies). Those replies are grouped and will be hereafter
referred to as the “traders’ sample” or “trader respondents”. The traders’
sample represents 15 different Member States.
2.6.4.     Questions on the achievement
of the general objectives of Decision 1152/2003/EC
The first set of questions asked whether the
project had met each of the general objectives set out in the Decision.
2.6.4.1.            Member
States Replies
The overwhelming majority of Member States
consider that the project has met its initial objectives and that the
establishment of EMCS and electronic transmission of the e-AD in comparison
with the paper form of accompanying document (the AAD) has improved the control
of movements under duty suspension. The main advantage is the fast, safe and
secure exchange of information. Many Member States reported that on-line
information about on-going movements gives immediate and easier access to
up-to-date, real time data. This means better control of information exchanged
and easier / better control and follow-up of the movements. It also results
early awareness of incoming movements, minimization of incorrect data and
facilitation and enhancement of the intra-EU trade. Electronic transmission of
the e-AD has allowed simplification of administrative procedures, reduction of
bureaucracy and at the end paperless administration.
Most of Member States have not seen many
disadvantages with regard to introduction of computerised system. However, some
Member States reported that high costs of development and maintenance or
upgrades as a disadvantage of EMCS in comparison with the previous system.
20 out of 23 Member States (87%) state that the
delays in establishment of EMCS have not been problematic
Those
Member States who reported having problems due to the late establishment of
EMCS, said that they faced difficulties during the transitional period in 2010.
Late implementation of EMCS in some Member States forced the extended use of
the paper-based fallback system on a scale for which it was never intended in
the case of movements with those countries. For one Member State the delay put a burden to the administration due to necessity to use 2 supporting
systems. Some dishonest economic operators during that period may have used the
gaps in the paper system to execute fraudulent movements or operations.
With reference to the balance between
Community, non-Community components and trader components, the majority of
Member States report that the respective responsibilities of Member States and the Commission to specify and develop are about right. The same group state
that responsibility placed on traders to specify and develop is about right as
well. Three Member State think that too much has been left to Member States to
specify and develop, one that too little has been left to traders and two that
too little has been left to the Commission.
19 out of 23 Member States (83%) state that
EMCS has provided better integration with other customs/taxation
procedures/systems
22 out of 23 Member States (96%) think that the
central tools provided by the Commission for EMCS – as SEED, SEED-on-Europa,
Conformance test Tools, CS/MISE Message Tracking and Statistics work well
The Security Policy document (SEP) for the EMCS
Project is a commonly agreed set of policy guidelines for the Commission and
the Member States aimed at ensuring system integrity and the protection of
confidential and personal information held in EMCS. 19 out of 23 Member States
(83%) think that the EMCS security policy (as described in the SEP document) is
working correctly. One Member State suggested that it would be useful to revise
the SEP to bring it into line with the ISO/IEC 27000 series of standards, which
have a wider scope than ISO/IEC 17799 (included in the series as ISO/IEC 27002),
19 out of 23 Member States (83%) state that the current governance arrangements
for EMCS (Committee on Excise Duty and ECWP (EMCS Computerisation Working
Party) function effectively. Two Member States complained that the process was
inefficient with duplication between discussions in the ECWP and in the
Committee on Excise Duty. Discussion was sometimes repetitive and did not
always lead to clear decisions.
14 out of 23 Member States (61%) think that
Excise Contact Group (ECG) is an effective channel for input into the decision
making process for EMCS. No Member State considered the ECG to be ineffective
and there were no suggestions to improve the situation.
2.6.4.2.            Trader Replies
All traders found that the project had been a
success, with clear advantages over the previous paper based system under
Directive 92/12/EEC.
Advantages reported by traders include: faster
termination of excise suspension procedures; increased transparency and
clarity; less handling of paper documents (creation, handling, archiving);
smaller margin of errors; immediate validation of the e-AD; integration of
processing with existing computerized systems; real-time monitoring of
movements, better control; decrease of administration; awareness improvement of
each additive delivery; e-AD has a capacity to effectively decrease tax frauds
based on unpaid excise duty; EMCS more efficiently prevents fraud and loss of
tax revenues; faster release of guaranties; less risk of mistakes; system gives
better traceability and visibility of the movement; closure of movement is much
faster; speed of processing, safety information retrieval and backup for
security issues; easy to use; shearing of information between administrations
and traders.
Traders also reported some disadvantages: there
were sometime connection problems with customs systems (export / import
systems); there was no possibility to correct any mistakes after validation of
documents (only cancelation is possible); there were problems dealing with
exceptions to the normal flow of events, where the systems did not seem to be
well defined, for example in the case of shortages or excesses, different
Member States support different sets of functional possibilities such as
splitting; the management of fallback procedures differed between Member
States; in some Member States reporting of alcohol quantities is by the volume
equivalent in pure alcohol, rather than the volume and the ABV percentage; the
correct way to specify goods by CN codes was not always clear; the structure of
SEED records differs between Member States and the records are not always
replicated in each Member State in a timely way; there were complaints
concerning unavailability of the system (possible technical problems/ service
interruptions); a lack of service from ELO side; lack of knowledge about
existing procedures - customs authorities do not support the harmonisation
approach in a uniform and correct  way (discrepancy in interpretation of
applicable community law - shortages); higher costs; occasionally bad and slow
access to the applications of EMCS.
82% of the trader respondents state that the
delays in establishment of EMCS have not been problematic
Dissatisfied respondents state that the late
establishment of EMCS resulted in more emergency procedures due to an
improperly working system and delays – necessity to use paper documents or
paper and electronic at the same time. It caused additional work and confusion
in the partner countries. The delay of implementation was also time-consuming
and costly from a project management point of view.
With reference to the balance between
Community, non-Community components and trader components, the majority of
trade respondent report that responsibility of Member States and the Commission
to specify and develop is about right. The same group state that responsibility
of traders to specify and develop is about right as well. Some of them however
think that too much has been left to Member States to specify and develop, and
too little has been left to traders to specify and develop.
25% of the trade respondents think that the
Excise Contact Group (ECG) is an effective channel for input by traders into
the decision making process for EMCS, whilst 8% thought that the ECG could be
improved. 67% of the trade respondents were not aware of the ECG’s existence.
This would indicate that there is a need to publicise the activities of the
group both directly, and through the Trade Federations that are represented in
the group
9%
of trader respondents state that the meetings could take place more often, also
documents should be provided earlier enough to have possibility to consult the
member companies. A suggestion was to replace the existing set-up with a
trader–only group. Traders would like to also the Commission making more use of
questionnaires, such as the one used in this survey in order to have more
direct access to the Commission. It was claimed by one respondent that some
Member States used information produced at ECG meeting to introduce new
administrative measures. 
Conclusion
Member
 States and traders are on the whole satisfied
with establishment of EMCS. According to a large majority of both samples the
main goals set out in the Decision have been achieved. In general, the
governance arrangements are seen as satisfactory. Nevertheless, the
representative body for traders is largely unknown in the traders' community,
pointing to the need for its existence and its role to be publicised more
widely. 
2.6.5.     General Assessment of EMCS
and its functioning
2.6.5.1.  Member
States Replies – General assessment
8 out of 23 Member States (35%) think that
administrative costs of the operation of EMCS compared with the costs of
operating the previous arrangements under Directive 92/12/EEC are lower. 9 out
of 23 Member States (39%) – think that they are higher. 6 out of 23 MS (26%) –
don’t know)
21 out of 23 Member States (91%) state that
EMCS provides improved compliance by traders.
12 out of 23 Member States (51%) state that
there is less need for follow-up and exception handling than before.
13 out of 23 Member States (56%) state that
establishment of EMCS has improved revenue collection.
16 out of 23 Member States (70%) state that
EMCS has led to simplification of procedures so far.
The
examples of simplifications which were given are: elimination of paper -
paperless administration; less need for keeping paper records; all the
information being on line concerning a movement and its follow-up, it can
easily be consulted by all excise officers and the traders; faster release of
the guarantee; identification of stakeholder’s authorizations is carried out
automatically; more convenient and efficient monitoring of economic operators.
Administrative procedures are faster and simpler.
However
procedures the handling of exceptions are sometimes more complicated because
the rules are not well defined; procedures which are related to administrative
cooperation should also be more defined.
All Member States agree that the EMCS
procedures are faster than those under Directive 92/12/EEC.
        20 out of 23 Member States (87%)
state that it takes less time to release guarantees.
8 out of 23 Member States (35%) think that the
level of user satisfaction depends on the type of interface provided.
In
most cases traders use one kind of web application/ interface module (internet)
provided by administration. User satisfaction can depend on factors other than
the type of interface provided– for example, benefits of the system, the
quickness of the system.
10 out of 23 Member State (43%) say that the
administration is faced with trade sector specific problems.
Those
Member States raised the following sector problems they have experienced:
·              
Little compliance with procedures in the wine
sector, due to zero rates in some Member States (large numbers of e-ADs are not
closed).
·              
Problems with indication of alcohol volume in
the report of receipt, which causes incorrect indication of the amount of
alcohol received, which effect on the quantity of shortages.
·              
Difficulties with the use of new documents and
new the introduction of new procedures especially in bulk operations in the oil
sector – it is required to submit a draft e-AD with quantities already filled
in and get an ARC number before the tanker/ship leaves port – but the exact quantity
is not known at this time).
·              
In energy sectors there are usually problems
with reporting shortage and excess
·              
Use of import/export procedures (problems with
synchronization with EMCS, to evaluate the correctness of data and proper
closure of movements).
·              
One Member State develops different software for
each sector, trying to give the best answer to each specific sector.
10
out of 23 Member States (43%) think that EMCS has led to the reduction of tax
evasion or tax fraud. The others do not have evidence for this.
According to the replies as a result of the
improved application of risk analysis in the field of excise duties,
administrations are able to better ensure the correct assessment of excise duty
than before. The system contains reliable information on all movements so it is
almost impossible to avoid tax in case of unfinished movements and shortages.
Also the collection of duties by Member States is improved. EMCS prevents the
unauthorized delivery of products between the operators who are not entitled to
receive the product, by refusing the validation of e-ADs, which contain
incorrect information.
22
out of 23 Member States (96%) state that EMCS provides the tools required to
improve national controls/ multi-lateral controls
21
out of 23 Member States (91%) think that EMCS provides a useful tool for risk
analysis
All
Member States state that the EU level governance process has provided enough possibilities
to influence decisions
All
Member States state that their national project management process allowed
sufficient participation by relevant stakeholders.
2.6.5.2.  Member State Replies on
Functioning of EMCS
The most common errors in EMCS messages
received by Member States originating from traders:
·    Office of Export and Office of Exit used wrongly;
·    Wrong consignee trader in cases of exportation/ direct delivery or
temporary registered consignee;
·    Wrong or missing invoice number,
·    Erroneous journey time,
·    Erroneous identity of transport units;
·    Erroneous SEED number,
·    Erroneous quantities,
·    Erroneous CN codes,
·    Incorrect destination type codes,
·    Incorrect product description;
·    Wrong data in report of receipt (date of arrival, observed shortage,
excess);
·    Incorrect tax warehouse linked to warehouse keeper;
·    The misuse of change of destination message to update details in the
e-AD, such as transport identification[4].
The most common mistakes in EMCS messages
received by Member States originating from other Member States:
·    Missing data concerning the degree of alcohol or degree Plato;
·    Missing or wrong  SEED data,
·    Erroneous CN codes,
·    Incorrect weight.
·    Errors in data format;
·    The date of the report of receipt (IE818) being before the date of
dispatch of the goods in the e-AD (IE801);
·    Misuse of change of destination messages 
·    Inaccuracies in cases of direct delivery;
·    Misuse of manual closure; varying levels of compliance with  business
and technical validation rules in MSA’s systems - different interpretation on
some rules and conditions.
14 out of 23 Member States (61%) use all the
available EMCS Phase 3 functionalities
Where Member States do not use all the
available EMCS Phase 3 functionalities in most cases those not used are:
·    The splitting message (IE825);
·    Interruption of a movement (IE807);
·    Customs rejection of e-AD (IE839);
·    Notification of accepted export (IE829);
·    In one case information on intended claims and post-delivery
processing.
Also the correct usage of the messages for
information on intended claims, control and event reports is not clear and
varies between Member States
4 out of 23 Member States (17%) think that some
of EMCS Phase 3 functionalities are redundant (for example. interruption and
information on intended claims, post-delivery processing message).
One suggestion was to provide a specified
business message for the manual closing of movements when exceptions occur and
a means of providing reasons for closing, instead of relying on a low level
technical message.
According to Member States suggestions, the
Commission could improve the content of those messages by:
·              
Specifying more precisely the conditions for the
use of various Phase 3 messages in the future Commission Implementing Regulation
based on  Regulation (EU) No. 389/2012;
·              
Creation of a correction message (for correction
of details of ARCs as well); of information on the change of transport means;
·              
Addition of alcohol volume of the received goods
in the message IE818;
·              
Improvement of the Administrative Cooperation
messages;
·              
Better synchronization between changes in the
FESS and the DDNEA specifications;
·              
An evaluation of the system on a yearly basis.
Member
States think as well that the system needs to be stabilized. New changes are
expensive, especially for Member States having a low number of national
movements.
Member States have following problems using EMCS
functionalities:
·              
Divergent interpretations of manual closure and
interruption of movements.
·              
No electronic arrival message when the goods
arrive at destination (consignee has 5 working days to introduce the report of
receipt). In practice, this means that no control at destination is possible.
·              
There is no proper e-AD correction message. A
correction message would solve problems that administrations are facing at the
moment.
·              
Integration of EMCS with other Customs systems
need to be improved and need to be implemented based on common specifications.
·              
One cannot create partial replies to requests
for assistance. A request can only be answered by one reply.
·              
A clearer claims procedure has to be developed.
·              
There is a lack of common approach for the use
of explanation messages (exactly explanation on shortage) and event reports and
control reports (mostly these are not exchanged within useful time limits or
they are not used at all in some Member States.
·              
Lack of possibility to process correctly ship
supplies and deliveries of energy products for mixing with non-Community
products.
13 out of 23 Member States (57%) state that to
deal with incorrect messages from other Member States it is better to use the
Help Desk to solve such problems. 5 of them (22%) think that it is better to
use administrative cooperation to solve such problems.
A few respondents stated that different methods
depending on different circumstances in each Member State (they use
communication with traders or sometimes informal contacts with representatives
in other Member States).
16 out of 23 Member States (70%) state that
administrative cooperation works better in EMCS Phase 3 than previously using
MVS and EWSE mailboxes.
However sometimes technical problems can affect
incoming and outgoing requests, which might be delayed. According to one Member
State it is not clear in which cases an event report and/or control report
should be introduced (in FESS it is not clearly enough described); and if no
excise duties will be collected, no specific message has been created to inform
the concerned Member State.
1.1.1.1.    
Trader
Assessment of EMCS in general
38%
of the trader responders think that administrative costs of the operation of
EMCS compare with the costs of operating the previous arrangements under
Directive 92/12/EEC are lower (24% - higher; 38% - don’t know.)
71%
of the trader responders state that EMCS facilitates compliance by traders.
55%
of the trader responders state that there less follow-up and exception handling
than before.
59%
of the trader responders state that EMCS led to simplification of procedure so
far. As examples they stated:
·               
it
is easier to follow-up movements;
·               
immediate
available reporting;
·               
there
is no paper work, which saves time and costs;
·               
elimination
of loss of documents;
·               
faster
release of guarantee for the movements;
·               
EMCS
captures and processes the information about the movement online, validates the
data entered and allows real time notification of the dispatch and receipt of
the shipment;
·               
full
picture of movements;
·               
detailed
search possibilities and comments in case of deviations;
·               
better
overview, simple trace in history, no waiting for post-delivery;
·               
better
control.
94%
of the trader responders agree that the EMCS procedures are faster than those
under Directive 92/12/EEC
80%
of the trader responders state that it takes less time to release guarantee.
63%
of the trader responders state that the web-interface provided by the
administration is user friendly.
79%
of the trader responders think that the level of user satisfaction depends on
the type of interface provided. Explaining this they stated that if the
interface is inadequate than the level of user satisfaction will be low. The
more user friendly and faster the interface is, the higher the level of user
satisfaction. The type of the interface can determine the time it takes to get
the data through the system. An easy-to-use interface has a positive influence
on the user satisfaction; easy handling and understanding. Other traders who do
not use a web interface use their own software or that of a third party
provider. These traders see the interface as less of an issue.
20%
of the trader responders state that have trade sector specific problems:
·               
Different
treatment of excise products in different MS (specially within energy
products);
·               
Differences
in excise rates between Member States (e.g. wine) 
·               
No
tolerance definition on differences regarding non-packed liquids (e.g. beer
tanks) 
·               
In
the case of energy products an e-AD can only be created after loading of the
product because before the loaded quantity is unknown 
·               
Problems
with understanding some definitions (customs office of delivery, exit) 
·               
No
link with export/ import systems;
·               
Differences
with fallback procedures in different Member States;
·               
Problems
with issuing an e-AD whenever requested change of goods destination or
cancellation;
·               
Problems
with change of destination procedure;
·               
No
data corrections in EMCS;
20%
of the trader responders state that there are problems for multi-national
companies when the systems differ from each other. According to the respondents
the problems are:
·               
Problems
with export procedure – obligation to use of both EMCS and ECS, which are not
properly linked one to another causing a significant number of error messages;
·               
Different
national SEED structures (problems in validating EMCS shipments; excise number
for authorized warehouse keeper and warehouse may differ between the Member
States);
·               
Different
fallback procedures in different countries;
·               
Different
use of EMCS functionalities resulting in technical problems, errors,
difficulties to operate a single common solution, high costs of implementation;
·               
Different
classification of some goods - non uniform product codes;
·               
Different
treatment of the same product (in some Member State aroma’s do not have to
declared as excise duty products, while in other Member States it is an
obligation to declare them as such);
·               
No
communication between administrations.
76%
of trade responders think that the EU level project process provided enough
possibilities to influence decisions. Nevertheless some traders have not found
any possibility to influence decisions. If there is an involvement in the
project process, it should be based more on a mixture of associations and
traders. Some felt that deadlines are too tight to be able to provide proper
input (e.g. questionnaires).
72%
of trade responders think that the national project management process allowed
sufficient participation
1.1.1.2.    
Trader
assessment of functioning of EMCS
The
most common mistakes in EMCS originating from traders:
·               
Wrong
product;
·               
Wrong
product code;
·               
Wrong
CN code;
·               
Wrong
quantity;
·               
Wrong
transport details;
·               
Wrong
unit of measurements;
·               
Wrong
density; 
·               
Wrong
destination type code;
·               
Wrong
trader identification, wrong dates/ time;
·               
Wrong
place of delivery/ type of destination;
·               
Wrong
name of consignee;
·               
Wrong
excise number and addresses;
·               
Given
data does not fit every time with SEED database;
·               
Typing
mistakes;
·               
Very
little communication between EMCS helpdesks or Customs on international level
The
most common mistakes in EMCS originating from other Member States:
·               
Wrong
unit of measurements (brutto, netto weight, % of alcohol);
·               
Wrong
product;
·               
Inadequate
description of the excise product;
·               
Wrong
or missing information on the Plato degree, in the case of beer movement;
·               
Wrong
CN codes;
·               
Wrong
transport details;
·               
Incorrect
delivery date;
·               
Document
not registered in the system of the country of destination;
·               
No
uniformity in free text content, leading to messages which are difficult to
understand or not properly described;
·               
Mistakes
originating from different alphabets used for  languages of different Member
States;
·               
Very
little communication between EMCS helpdesks or Customs on international level
35%
of trade responders use all the available EMCS Phase 3 functionalities. The
reason is that at the moment in a few Member States not all functionalities of
EMCS Phase 3 are available. A few trader respondents represent small companies
and handle only one product – wine, so it is not necessary to use all of the
functionality. 6% of trade responders think that some functionality is
redundant. For example the explanation on shortages message is hardly used; the
alert/reject function is not well understood by some users; truck numbers are
considered redundant, also the use of the report of receipt message referring
to excesses is not clear.
The
Commission could improve the content of messages by improving the description
of messages which should be clearer, more understandable and more detailed. A
few traders pointed out that the error messages could be designed to contain a
more detailed specification of the error and the correction options. Also the
possibility to update after validation instead of cancelation would be
desirable. Some traders would like to see all messages in one language.
Traders
experience various other problems in using EMCS:
·               
SEED-database
has limited info available (more information is needed);
·               
Some
Member States don’t close the procedures on time;
·               
No
possibilities to track and trace ARC number online between different Member
States;
·               
There
are different obvious formal mistakes in EMCS (e.g. transposed digits, wrong
fractional digits in loading volumes and density);
2.6.5.5.  General
Functioning - Conclusion
A
large majority of both the Member States’ sample and the traders’ sample state
that EMCS generally works well. In replying to the questionnaire both samples
confirmed that the establishment of EMCS led to simplification and acceleration
of procedures. They report that the system has led to improvements in tax
collection and that the release of guarantees takes less time than previously.
Also there is less follow-up and exception handling. Member States report that
EMCS provides the tools required for national or multi-lateral controls and
that is a useful tool for risk analysis.
On
the other hand they are still faced with some problems. Both Members States and traders stress the difficulties in integration with export / import systems.
Also the lack of possibilities to correct data in the e-AD after validation
causes problems to Member States and the trade. Differences in functionalities
or procedures (e.g. the fallback procedure) between Member States are seen as
disadvantages. In some cases problems with exception handling need to be
solved.
2.6.6.     Criteria and Methods – future evaluation of EMCS
2.6.6.1.  Member
States
In the future Member States would like to EMCS
be evaluated on the basis on following criteria:
·              
Number of administrative cooperation requests
still open after 3 months – 15 Member States
·              
Reduction in administrative costs – 14 Member
States
·              
Time taken to close movements – 12 Member States
·              
Percentage of error messages – 12 Member States
·              
Time to reply to administrative cooperation
requests – 12 Member States
·              
Number of alert/rejection messages – 10 Member
States
·              
Number of movements still open after 3 months – 9
Member States
·              
Number of movements still open after 4 months– 9
Member States
·              
Measurable positive contribution to enforcement
activities – 9 Member States
·              
Measurable improvement to allocation of human
resources – 9 Member States
·              
Number of administration cooperation requests
still open after 1 month – 1 Member State
Also one Member State proposed the reduction of
rejected incorrect messages because of non-compliance with EMCS specification
as a criterion for evaluation of EMCS.
All Member States (100%) state that as a method
for future evaluation of EMCS CS/MISE reports taken from live data should be
used.
Additionally 3 Member States would like to use
also Member State Reports for areas not covered by central collection. Those
reports could contain numbers of smuggling acts concerning movement of excise
duty products; contribution to national controls/risk analysis; opinions of
Member States on possible improvements or problems with EMCS in production
which are not related to error messages in EMCS.
11 out of 23 Member States (48%) think that the
Commission should produce statistical and evaluation reports for Member States
on yearly basis. The others think that is should be on quarterly (26%) or
monthly (17%) basis.
19 out of 23 Member Stes (83%) state that the
Commission should produce statistical and evaluation reports for ECWP/
Committee on Excise Duty yearly.One of suggestions was
to have such a report twice a year or quarterly.
22 out of 23 Member Stats (96%) think that the
Commission should produce statistical and evaluation reports for traders
yearly. One Member State thinks that it should be left to traders to express a
preference.23 out of 23 Member States (100%) think that the Commission should
produce statistical and evaluation reports for Council and Parliament every
five years.
5 out of 23 Member States (22%) would like to
see the establishment of some form of permanent Measurement of Results Group
which could steer the future direction of evaluation.
2.6.6.2.  Traders
In the future traders would like to EMCS be
evaluated on the basis on following criteria:
·              
Time taken to close movements – 68 responders/
65%
·              
Number of movements still open after 3 months -
36 responders / 35%
·              
Number of movements still open after 4 months -
32 responders / 31%
·              
Percentage of error messages - 38 responders /
37%
·              
Number of alert/rejection messages - 30
responders / 29%
·              
Reduction in compliance costs - 33 responders /
32%
·              
Measurable improvement to allocation of human
resources - 22 responders / 21%
·              
Other suggestions - 11 respondents suggested the
percentage of manual closures in case of e-AD have been submitted to
exportation. All suggested criteria would be preferable in evaluation.
2.6.6.3.  Evaluation
- Conclusion
The answers allow setting up essential criteria
which could be taken into account in future EMCS evaluation. The basic criteria
can be identified as follows:
·              
Time taken to close movements
·              
Number of movements still open after 3 months
·              
Number of movements still open after 4 months
·              
Percentage of error messages
·              
Number of alert/rejection messages
·              
Reduction in compliance costs
·              
Measurable improvement to allocation of human
resources
Additionally in evaluation could be taken into
consideration:
·              
Number of administrative cooperation requests
still open after 3 months
·              
Time to replay to administrative cooperation
requests
·              
Number of administrative cooperation requests
still open after 1 month
CS/MISE should be used as the preferred method
for monitoring of the future functioning of EMCS. The functionality offered by
CS/MISE includes the follow up the movements via their ARC, technical and
business statistics and the monitoring of system unavailability. Also Member
States’ statistics could be used as a method in EMCS evaluation.
3.           The printed version of the electronic administrative
document or other commercial document and arrangements for fallback (Article
45(1) of Council Directive 2008/118/EC)
3.1.        Introduction
3.1.1.     Legal base
The legal base of the report that this document
is underpinning is Article 45(1) of Council Directive 2008/118/EC. It states
that the Commission shall provide a report to the European Parliament and the
Council concerning EMCS fallback procedures and the print-out of the
accompanying document described under Article 21(6) of the Directive.
Article
45(1)
By 1
April 2013, the Commission shall submit to the European Parliament and the
Council a report on the implementation of the computerised system and, in
particular, on the obligations referred to in Article 21(6) and on the
procedures applicable should be the system be unavailable.
3.1.2.     Methodology
In order to build this report the Commission
opened a consultation using a questionnaire addressed to Member States and to
representatives of traders. The purpose of the questionnaire was to gather
feedback on the implementation, effectiveness and usefulness on the concerned
arrangements. Also some questions were asked about EMCS in general to provide
orientation for further research. The questionnaire was made possible through
the online survey tool of the Commission: “Interactive Policy Making” (IPM).
The questionnaire was accessible via a web link. The questionnaire was open
from Monday the 3rd of December 2012 till Friday the 11th
of January 2013. The Commission encouraged the ECG Member Trade Federations   to
forward the link of the questionnaire to national trading federations and to
individual traders, which made it possible to reach a large group of potential
respondents. The questionnaire was built in that way that respondents were only
asked to answer questions that were relevant for their status. The data
delivered by the questionnaire were used as input for this report.
3.1.3.     The sample
The questionnaire received a total of 104
replies. The total sample consists of two different “sub samples:”
(1) There are 36 replies from Excise
Administrations of Member States, which represent 24 different Member States.
Some Member States filled in the questionnaire more than once. To keep the
results representative, harmonisation of the answers of the same Member State was sometimes needed. If answers could not be harmonized, answers were not
included and so the size of the Member State sample can vary depending on the
question. The correct sample size is indicated for each question in this
report.
(2) The other 68 replies come from traders (57
replies), trader federations (9 replies) and other (2 replies). Those replies
are grouped and will be hereafter referred to as the “traders’ sample” or “trader
respondents”. The traders’ sample represents 15 different Member States.
3.1.4.     The structure
In this chapter the results on the fallback
procedure will be discussed in section 3.2 the results of the print-out of the
accompanying document in section 3.3 and the results of EMCS in general in
section 3.4. In every section each sample will be discussed separately. The chapter
ends with a set of general conclusions in section 3.5.
3.2.        The fallback procedure
3.2.1.     Member States
·              
24 out of 24 Member States (100%) state that the
current minimum level of 97% for EMCS availability in the Service Level
Agreement and the FESS is achievable.
·              
16 out of 24 Member States (66,66%) have to give
approval to the traders for the use of the fallback procedure.
·              
24 out of 24 Member States (100%) state that the
fallback procedure is clear to them.
·              
20 out of 24 Member States (83,33%) are satisfied
with the fallback procedure as it is now. Concerns about fraud were also
expressed: since the fallback document is not validated by the Member State of
Dispatch, but looks valid to the control officers, a consignment that would not
have passed e-AD validation will be delivered, since only the identity of the
consignor and the consignee can be checked in SEED, but not the movement
itself. Also consignments under fallback may not be recovered into EMCS and may
not get included in the accounting books. The fallback procedure could also be
used to avoid seizure of excise goods, for example where the trader had an
excise debt, or some other fiscal debt. One respondent proposed to add the
excise number of the consignor as a field in the fall back report of receipt.
Another proposal was to create a list of national contact points per Member State for sending and receiving the paper fallback documents, so that the Member
State of Destination (and the consignee) would be told that excise goods had
been shipped. This would require the submission of the fallback document to the
Member State of Dispatch at the time of departure.
·              
20 out of 22 Member States (90.90%) have a
standard template for fallback documents. It is interesting that two Member
States that have a standard template for fallback documents, state that it is
not compulsory use the models.
·              
15 out of 24 Member States (62.50%) state that
there is a need for a standardised fallback document across all Member States.
·              
17 out of 24 Member States (70.83%) keep a
record of all the fallback documents where traders have not yet recovered the
data into EMCS.
·              
10 out of 22 Member States (45.45%) have come
across traders that fail to recover movement data from fallback documents into
EMCS.
·              
14 out of 22 Member States (63.63%) are
convinced that the current paper based fallback system is effective in assuring
compliance.
·              
5 out of 21 Member States (23.81%) state that it
would be better to define a format for the fallback documents which does not
change with each release of EMCS. According to the Directive changes to EMCS
messages should be reflected in changes to the structure and content of the
fallback documents.
·              
Member States propose to only include the most
essential data for the identification of the movement on the fallback document,
so that changes in the fallback messages would not necessarily results in
changes in the fallback document.
·              
Member States raised the following other
problems they have experienced concerning the fallback procedure or documents:
·                     
The Report of Receipt fallback procedure is
sometimes not followed by a recovery procedure, whether due to negligence, or
attempted fraud.
·                     
Some Member States issue an ARC for a fallback
document, which causes confusion for both consignor and consignee.
·                     
Sometimes it is not clearly visible that the
paper documents are fallback documents, a unique form for all the Member States
could avoid this problem.
·                     
The fallback document should clearly carry the
title: “Fallback Accompanying Document for movements of excise goods under
suspension of duty excise,” as is required by the Directive.
·                     
Some Member States do not allow fallback
procedure in cases when it is obvious that an authorisation is correct but that
it has not been uploaded by the authorising Member States into central SEED,
leading to a failure to validate an e-AD referencing this authorisation. This
situation can cause high costs for economic operators. It is particularly
related to temporary authorisations, which are usually valid for a very short
time.
3.2.2.     Traders
·              
77.94% of the trader respondents are satisfied
with the actual minimum availability level of 97% EMCS. According to
respondents who were dissatisfied the main reason of unavailability of the
system is caused by problems with national EMCS access. Different solutions to
EMCS access problems are proposed: the central system should accept more users,
system maintenance should be performed outside working hours and a standby EMCS
implementation should be made available during maintenance. A less frequent
reason for the unavailability of the system is problems with communication
links.
·              
72.06% of the trader respondents state that
their Member State has to give them approval for using the fallback procedure.
·              
75.00% of the trader respondents use
occasionally the fallback procedure.
·              
17.05% of the trader respondents use often the
fallback procedure.
·              
7.35% of the trader respondents use almost
continuously the fallback procedure.
·              
88.24% of the traders respondents state that the
fallback procedure is clear to them.
·              
80.88% of the traders respondents are satisfied
with the fallback procedure as it is now. Dissatisfied respondents stress the
administrative burden of filling in all the data on the paper version and
subsequently re-entering the data in EMCS. There is also a problem with the
fallback procedure for export, as in some Member States it is not possible to
prepare an export declaration without the ARC number.
·              
66.18% of the traders respondents state that
their Member State have a standard template for fallback documents. 7,35% of
the traders respondents state that it varies between the Member States they are
active in. Some traders state that it is not compulsory to use the standard
templates and they design their own ones.
·              
55.88% of the traders respondents state that there
is a need for a standardised fallback document across all Member States.
·              
16.18% of the trader respondents have
experienced differences between fallback procedures specified by Member States.
Traders point out the different lay-outs of the fallback document, the
different allocation procedure of the ARC number and that the fallback document
is not accepted in all Member States.
·              
7.35% of trader respondents stated that these
different procedures lead to compliance difficulties.
·              
16.18% of the trader respondents state that the
variety of fallback documents impose problems. Traders have difficulties to
understand documents with different lay-outs and they state that it is not
always clear to see if it concerns a fallback document or a regular shipment.
·              
13.24% of the trader respondents have
experienced problems with the recovery procedure of the documents in EMCS.
According to the traders respondents the main problem is that the recovery
procedure takes too long.
·              
88.24% of the trader respondents are convinced that
the current paper based fallback system is effective in assuring compliance.
Unconvinced respondents point out that the combined use of EMCS and ECS is
unclear and complicated, there is a mismatch between the two systems.
·              
16.18% of the trader respondents state that it
would be better to define a format for the fallback documents which does not
change with each release of EMCS. According to the Directive changes to EMCS
messages should be reflected in changes to the structure and content of the
fallback documents. Traders propose standardisation of the fallback document.
·              
Trader respondents raised the following other
problems they have experienced concerning the fallback procedure or documents:
·                     
Different languages impose understanding
problems, proposal for   English as standard language for fallback documents.
·                     
Helpdesk does not meet the service standards of
the traders.
·                     
The use of EMCS in the export procedure is
unclear or an administrative burden for the traders. Export files do not get
completed automatically, even where the consignor and the exporter are the
same.
3.2.3.     Conclusion
Member States and traders have very similar opinions concerning the fallback
procedure. A large majority of the Member States’ sample and the traders’
sample are satisfied with the fallback procedure as it is now. Also a large
majority of both samples are convinced that the current paper based fallback
procedure is effective in assuring compliance, although some Member States
express concern about the possible fraudulent use of the procedure, through
failing to recover movement data into EMCS.
The majority of both samples state the need for
a standardised fallback document across all Member States with in particular a
fixed lay-out and containing only necessary data. This would resolve a lot of
problems. A minority of the two samples state that it would be better to define
a format for the fallback documents which does not change with the each release
of EMCS. Some Member States have a standard template for the fallback document,
but it is not always compulsory to use them and traders design their own
templates. This results in difficulties in recognising and understanding the
fallback documents.
Some respondent pointed out that it also
important to avoid having to use fallback by tackling the problems at the
beginning of the chain: high levels of unavailability of EMCS. Investigation
into improving access to the national EMCS system is thus of great importance.
Finally, problems between EMCS in fallback and the export procedure are quite
remarkable and should be looked into.
3.3.        The print-out of the
accompanying document
The print-out of the accompanying document can
be a printed version of the electronic administrative document or any other
commercial document including at least the unique administrative reference
code. (Art 21(6) Council Directive 2008/118/EC)
3.3.1.     Member States
·              
In 6 out of 22 Member States (27.27%) is
compulsory to use the print-out of the e-AD, including all of the printable
e-AD data, as the print-out of the accompanying document.
·              
11 out of 22 Member States (50.00%) have
standard templates (other than just specifying the necessary data) for the
print-out of the accompanying data.
·              
7 out of 24 Member States (29.16%) have
experienced problems with the print-out of the accompanying document presented
by traders during controls. The main problems are missing information on the
document, linguistic misunderstandings and illegibility.
·              
9 out of 23 Member States (39.13%) state that
there is a need for a standardised print-out of the accompanying document
adopted by all Member States.
·              
12 out of 21 Member States (57.14%) believe that
a barcode, representing the ARC number, on the print-out of the accompanying
document would help in the carrying out of controls.
·              
2 out of 23 Member States (8.70%) believe that
only a barcode, representing the ARC number, attached or printed on a
commercial document as the print-out of the accompanying document would be
sufficient.
·              
Member States raise the following other problems
they have experienced concerning the print-out of accompanying document:
·               
Sometimes excise officers are not sure about
whether a presented document is a fallback document or an accompanying
document.
·               
There are several consignments using the same
document.
3.3.2.     Traders
·              
52.94% of the trader respondents state that it
is compulsory to use the print-out of the e-AD, including all of the printable
e-AD data, as the print-out of the accompanying document. 5.88% of the traders
respondents state that it varies between the Member States that they are active
in.
·              
26.47% of the trader respondents state that
their Member States have a standard template (other than just specifying the
necessary data) for the print-out of the accompanying data. 11.76% of the
traders respondents state that the template varies between the Member States
they are active in.
·              
14.71% of the trader respondents have
experienced problems with the print-out of the accompanying document of other
Member States sent to them by trading partners. The main problems are that the
document is missing and linguistic misunderstandings.
·              
38.24% of the trader respondents state that
there is a need for a standardised print-out of the accompanying document
adopted by all Member States.
·              
48.53% of the trader respondents believe that a
barcode, representing the ARC number, on the print-out of the accompanying
document would improve the usefulness of this document.
·              
30.88% of the trader respondents believe that
only a barcode, representing the ARC number, attached or printed on a commercial
document as the print-out of the accompanying document would be sufficient.
Some traders think that simply writing the ARC number on a standard CMR
consignment note[5]
should be enough in all Member States.
·              
Trader respondents raise the following other
problems they have experienced concerning the print-out of accompanying
document:
·               
If the print out is copied or faxed it is hard
to read the data. Using portable devices such as Smartphones and having the
accompanying document on there instead of a print-out could be a solution.
·               
Traders have been sometimes unable to produce
print-outs of the e-AD due to software failure while for one of the Member
States it is obligatory for the excise products to be accompanied by such
printout.
3.3.3.     Conclusion
Concerning the print-out of the accompanying
document there is a consistent demand for a standardised document between the
Member States’ sample and the traders’ sample, as almost 40% of both samples
indicated this need. Both samples also have the same opinion about adding a
barcode, representing the ARC number, to the print-out of the accompanying
document, as half of both samples supported this. Only a minority of both
samples believe that only a barcode attached or printed on a commercial
document as the print-out of the accompanying document would be sufficient. A
minority of the two samples have experienced problems with the print-out of the
accompanying document. The common problem of both samples is of a linguistic
nature. There is no agreement between the opinion of the Member States’ sample
and the traders’ sample on the obligation of using the print-out of the e-AD as
the accompanying document, nor on the use of a standard template. Unfortunately
no clear interpretation can be given to these last results. A standard template
provided with a barcode would accommodate the need for standardisation and
might resolve the linguistics problems, by allowing the data of the e-AD to be
more easily downloaded in the language of the Member State concerned.
3.4.        General EMCS
3.4.1.     Member States
·              
7 out of 24 Member States (29.16%) state that
EMCS works excellently.
·              
14 out of 24 Member States (58.33%) state that
EMCS works well.
·              
2 out of 24 Member States (8.33%) state that
EMCS does what it supposed to do.
·              
1 out of 24 Member States (4.16%) state that
EMCS is impossible to use.
·              
5 out of 22 Member States (22.72%) state that
EMCS significantly decreased the recurrent cost of ensuring compliance with
excise legislation.
·              
1 out of 17 Member States (5.88%) state that
EMCS significantly increased the recurrent cost of ensuring compliance with
excise legislation.
·              
15 out of 20 Member States (75.00%) state that
EMCS has led to improved revenue collection.
·              
Member States’ summarised feedback on things
about EMCS that are better than the previous (paper AAD) system:
·               
Monitoring of movements
·               
Better control possibilities
·               
Less paperwork results in reduction of workload
and therefore faster system
·               
Quicker release of guarantees
·               
Helping risk management
·               
More accurate and better quality data
·              
Member States’ summarised feedback on things
about EMCS that can be improved:
·               
Include more comprehensive transport
information, eg: change of transport means
·               
Correction messages to correct mistakes in e-ADs
·               
Faster update of SEED
·               
Improve administrative cooperation
3.4.2.     Traders
·              
8.82% of the trader respondents state that EMCS
works excellently.
·              
55.88% of the trader respondents state that EMCS
works well.
·              
23.53% of the traders respondents state that
EMCS does what it supposed to do.
·              
10.29% of the traders respondents state that
EMCS is difficult to use, unreliable, unfriendly. They state that breakdowns
lead to frequent use of the fallback procedure and it is not possible to change
information in the e-AD, which makes it complicated to solve irregularities.
·              
20.59% of the trader respondents state that EMCS
significantly decreased the recurrent cost of compliance with legal provisions
concerning excise movements under duty suspension.
·              
35.19% of the trader respondents state that EMCS
significantly increased the recurrent cost of compliance with legal provisions
concerning excise movements under duty suspension.
·              
Traders’ summarised feedback on things about
EMCS that can be improved:
·               
Faster & safer
·               
Quick knowledge on irregularities
·               
More transparency
·               
Quicker release of guarantees
·               
No loss of printed documents
·               
Easier control by Customs
·              
Traders’ summarised feedback on things about
EMCS that can be improved:
·               
It should be possible to correct data in the
e-AD after validation
·               
Faster update of SEED
·               
Better compatibility of EMCS with other systems,
especially with ECS
The combination of
the EMCS and the export declaration procedure is not satisfactory; it
represents an additional administrative burden because export files do not
close down automatically.
·               
Improve electronic system availability
3.4.3.     Conclusion
A large majority of both the Member States’
sample and the traders’ sample state that EMCS works well or excellently.
Concerning the costs it is remarkable that for the Member States sample the
percentage claiming a cost decrease is higher than the percentage claiming a
cost increase, which is not the case for the traders’ sample where the
percentage claiming a cost increase is higher than the percentage of claiming a
cost decrease. Traders state that the higher costs are mainly due to
additionally IT implementation and maintenance cost of EMCS, as well as
additional employment costs as extra people need to be hired and trained to
work with the system. Feedback on things better than the previous system and
things to improve from both samples are in the same trend. Actions need to be
undertaken to make it possible to correct data in the e-AD after validation and
to update the SEED database faster. Trader respondents stress the difficulties
with EMCS in the export procedure.
3.5.        General conclusion
The questionnaire has generated valuable
insights on the current fallback procedure and the print-out of the
accompanying document. The questionnaire also provides orientation for further
research on EMCS in general. The Commission recommends:
·              
The development of standardised templates for
fallback documents across all Member States with a fixed lay-out.
·              
Investigating improvements in the availability
of national EMCS systems in order to avoid having to use the fallback
procedure.
·              
For the print-out of the accompanying document a
standardised template could be proposed. This would help reduce linguistic
difficulties. The template could be based on standard commercial documents,
such as the CMR Consignment Note for Road Transport. This should be introduced
on a voluntary basis in a pilot project.
·              
The ARC number should be reproduced as a barcode
on the print-out, in order to aid road controls, and to assist traders in
identifying consignments.
·              
Investigation into the problems with EMCS in the
export procedure should also be a priority as these problems were mentioned in
the section concerning the fallback procedure and the section of the
questionnaire concerning EMCS in general. Further research will be performed on
the feedback received via the questionnaire to fine-tune the next steps.
4.           Results of the consultation concerning arrangements for
administrative cooperation in the field of excise duty
4.1.        Introduction
A new Council Regulation on administrative
cooperation in the field of excise duties, Council Regulation (EU) No.
389/2012, came into force in July 2012. The Regulation mandates the use of EMCS
for the exchange of information between excise authorities, responsible for the
correct application of excise duty law. It also provides a basis for the
automatic sharing of information about national authorisations for excise
traders for mutual recognition purposes, provides a legal basis for
establishing minimum service standards for the development, maintenance and
operation of EMCS, and clarifies certain other issues relating to
administrative cooperation.
Another major change is the extension of
automatic exchange of data to cover reports of exceptions occurring during
movements.
4.2.        Practical
implementation of the new arrangements for administrative cooperation in EMCS
Phase 3
For information on this subject please see
Section 2.5.
4.3.        Legal
Base for this section of the report
This section is an addition to the requirement
under Article 35(1) of Regulation (EC) No. 2073/2004 to produce a report on the
functioning of the Regulation every 5 years. This Regulation has since been
repealed and has been replaced by Regulation (EU) No. 389/2012.
 Every five years from the date of entry into force of this Regulation and based in particular on the information provided by the Member States, the Commission shall report to the European Parliament and to the Council on the application of this Regulation. 

Article 35(1) of Regulation (EC) No. 2073/2004
The draft of this Report is attached as an
Annex to this document. This document was not presented to the Parliament and
Council, as the arrangements under the Regulation were already obsolete at the
time that the Report was completed, and therefore is only of historical
interest.
The first report on the functioning of the new
Regulation is not due until 2017, but the Commission considers it useful to
present and analyse the first experience of Member States following the
replacement of Regulation (EC) No. 2073/2004 and at a practical level the
experience of using administrative cooperation tools that have been
incorporated into EMCS.
4.4.        Methodology
In order to build this document the Commission
opened a consultation using a questionnaire addressed to Member States, targeting EMCS Development Teams, Central Excise Liaison Offices (hereafter referred to
as CELO), designated Liaison Departments and Customs, Excise of Taxation
Control teams. The purpose of the questionnaire was to gather feedback on the
implementation, effectiveness and usefulness of Regulation (EU) No. 389/2012 and
the administrative cooperation tools that have been incorporated into EMCS. The
questionnaire was made possible through the online survey tool of the
Commission: “Interactive Policy Making” (IPM). The questionnaire was accessible
via a web link. The questionnaire was open from Monday 29th of April
2013 until Friday the 17th of May 2013. A late reply was received
from one Member State. Analysis of the responses includes feedback by Member
States on these issues given at the Workshop on “Administrative Cooperation in
Excise, first experiences with the new arrangements,” held in Poznan from 4th
to 6th June 2013.
4.5.        The
Sample
The questionnaire received a total of 24
replies from 19 Member States. As with the other surveys conducted, some Member
States answered more than once, and so the replies have been checked for a
consistent national position. The profiles of those who answered the
questionnaire were as follows: 10 members of EMCS Development Team, 6 members
of EMCS Operations teams or National Helpdesks, 18 members of Central Excise
Liaison Teams and 5 members of Customs or Excise Control Teams. The majority of
Member States prepared joint responses which explains why the total number of
roles reported exceed the number of responses.
4.6.        Questions
on Regulation (EU) No. 389/2012 and Changes from Regulation (EC) No. 2073/2004
4.6.1.     Distinction
between administrative cooperation under Regulation (EU) No. 389/2012 and the
mutual assistance arrangements under the Naples II Treaty.
The Naples II Treaty is concerned with customs
cooperation with an objective of punishment or prosecution, i.e. criminal
investigations. It is also applicable to investigations involving excise duty
issues associated with customs procedures, but also any movements of excise
goods under duty suspension, regardless of any corresponding customs
procedures. Member States were asked whether the existence of two sets of
procedures created difficulties in practice. All those who are involved in this
activity stated the distinction caused them no difficulty.
4.6.2.     Designation
of liaison departments and competent officials in addition to the Central
Excise Liaison Department
An article 4 and 5 of Regulation (EU) No.
389/2012 defines the power of the competent authority to designate liaison
departments and competent officials in addition to the CELO. This provision is
present to encourage the rapid and direct, but exchange of information, without
waiting for the intervention of the CELO. Of the 19 Member States who replied,
10 reported that they had such arrangements in place. Some Member States have
nominated individuals who have a particular liaison role. Some have nominated
EMCS operational support services, in order to allow them to handle sensitive
data as part of their role in supporting the business activities.
4.6.3.     Article
6 Responsibilities of Central Excise Liaison Office
Article 6 of Regulation (EU) No. 389/2012
clarified the role and responsibilities of the CELO, by making it clear that
most of the responsibilities under the Regulation are in the first instance the
responsibility of the CELO. This means that the Office is responsible for
ensuring exchange of information on request, automatic exchange, spontaneous
forwarding of information, the maintenance of the SEED database, and the
production and forwarding of statistics and information concerning possible
fraud schemes to the Commission. The only major exception is the organisation
of Fiscalis Multilateral Controls (MLC), which are the responsibility of the
national MLC coordinators.
Only 1 Member State reported that this
provision had led so far to organisational changes. This result is somewhat
surprising since the role of the CELO has been greatly expanded by the new
Regulation, and may warrant further discussion with the Member States.
4.6.4.     Article
7 Prior authorisation for exchange of information obtained through judicial
proceedings
Article 7 of Regulation (EU) 389/2012 allows
the possibility that information obtained through judicial proceedings may
require prior authorisation by the judicial authorities before it can be
exchanged. 6 of the 15 Member States who answered this question needed judicial
authorisation, but in no case did they report that this as representing a
problem.
4.6.5.     Feedback
from requesting Member State on information provided
Articles 8(5) and 15(2) of Regulation (EU)
No. 389/2012 provide for the possibility of feedback, where a requesting Member State can tell the requested Member State how useful the information provided was. Only
2 Member States have made use of this possibility so far but 16 would like to
make use of this possibility in the future, whilst 2 Member States did not
consider it to be useful. One Member State commented that as well as giving
positive feedback for the work carried out, the feedback information can be
used to provide the requested Member State with useful additional information
about their traders. The June 2013 workshop in Poznan indicated that the use
would be facilitated by the inclusion of feedback information in EMCS in the
form of standard messages.
4.6.6.     Article
11 Time limits for replies to requests for administrative cooperation
When a request for information is made under
Article 8 of Regulation (EU) No. 389/2012 there are two time limits according
to Article 11: a time limit of three months where information is not
already available to the CELO, and one month for information that is already
available. This is unlike the previous Regulation which laid down a common
three month limit.
Member States were asked to estimate the
percentage of requests that they sent, which were answered within the
appropriate time limit. The results were as follows:
 Replies received in time || Number of replies (Total 24) || % Replies 
 Yes - always || 0 || 0.00% 
 For more than 90% of requests || 2 || 8.33% 
 For more than 75% of requests || 10 || 41.67% 
 For more than 50% of requests || 7 || 29.17% 
 For more than 25% of requests || 1 || 0.00% 
 For less than 25% of requests || 1 || 4.17% 
 Don’t know / I am not involved in this activity || 3 || 12.50% 
When asked for their own estimates of their own
ability to reply to requests the figures were as follows:
 Replies sent in time || Number of requested records || % Requested records(23) 
 Yes - always || 1 || 4.35% 
 For more than 90% of requests || 8 || 34.78% 
 For more than 75% of requests || 6 || 26.09% 
 For more than 50% of requests || 1 || 4.35% 
 For more than 25% of requests || 2 || 8.70% 
 For less than 25% of the requests || 0 || 0.00% 
 Don’t know / I am not involved in this activity || 3 || 13.04% 
There is a certain discrepancy between the two
sets of values, but by either measure there are a relatively high number of
requests, for which replies have not been received before the time limit.
A number of possible problems have been
mentioned by Member States to explain delays:
·      Messages may be lost, or may be delivered directly to a case
officer without the CELO being aware of the request and being able to supervise
the process.
·      There is no clear way in EMCS to refuse a request, whilst
providing a justification for refusal, as is required by the Regulation. So it
may be that a failure to reply within 3 months is in fact a disguised refusal.
This implies a need to re-examine the alignment of EMCS with the legislation at
some point.
·      Investigation arrangements must be in accordance with national
arrangements, and have to be fit into national planning. However the Regulation
and EMCS allow for negotiation of longer periods, so such planning requirements
should be able to be accommodated.
·      It is not clear to Member States whether the information requested
from another Member State is at hand, in which case 1 month applies, or whether
the information has to be sought elsewhere in case the limit of three months
applies. 16 Member States suggested that this should be established by
exchanges between CELOs, whilst 7 suggested specifying the categories in the
Implementing Regulation on exchange of information. Only 3 Member States would
be happy to see this information included in the Excise Vade Mecum, maintained
by the Commission for the use of the Member States.
Despite these problems, 18 Member States report
that the arrangements for negotiating deadlines works well, with only 2
reporting problems.
Legal certainty is not aided by the lack of
clear categories of information to be considered ‘at hand’ and ‘not at hand.’
The Commission will consider how to better establish the content of these
categories.
4.6.7.     Article
15 Automatic Exchange of Information
Automatic exchange concerns the regular
exchange of information, either on a periodic basis, or on the basis of an
agreed event or trigger. The Implementing Regulation which covers this
provision is still in preparation.
Nevertheless, 12 out of 24 Member States
already exchange information automatically under Article 15 of the Regulation. Of
these 10 exchange control reports, 12 exchange event reports, 4 exchange
interruption reports and 8 exchange alert or rejection reports received from
consignees. Two Member States also exchange information automatically on
intended claims and on delays, where goods have not arrived on time.
Some Member States have expressed a desire for
more clarity about the use of automatic exchange, i.e. the types of messages
and would like to see this addressed in the Implementing Regulation.
4.6.8.     Article
16 Spontaneous Information
Article 16 allows a Member States to forward
information to another Member State where the first Member State considers that the information may be useful. 20 Member States report that they make use
of this provision. Member States use this provision for a variety of purposes:
·      To inform Member States of the intention to remove an
authorisation from a trader with immediate effect;
·      To report discrepancies in documents;
·      To report suspected fraud to other Member States, whose financial
interest may be affected.
6 Member States so far have provided feedback
on the information received.
4.6.9.     New
reporting obligations
The improvement of arrangements for
administrative cooperation should not cause additional compliance burdens on
traders, due to reporting obligations. All Member States reported that the new
arrangements have not changed the reporting obligations of traders in any
significant way.
4.6.10.   Suggestions
for improvements
One Member State criticised the current
arrangements for fallback, saying that allowing the paper circuit to pass
directly between traders encouraged fraudulent movements which only appear in
EMCS if the movement is subject to a road control. The Member State would prefer that the flow of paper documents included the Member States of Dispatch and
Destination. This is an interesting contribution but is better dealt with under
a discussion about fallback arrangements. Another Member State pointed out the
Implementing Regulation for exchange of information should include a
description of the documents that should be used for fallback when EMCS is not
available. One Member State suggested creating a new message to deal with
exchanges of information where a movement of goods is detected, for which there
is no paperwork available.
The existing messages do not cater for this
situation. This subject has been raised previously and should be investigated.
4.6.11.   Conclusions
The new Regulation has not so far led to many
changes in Member State practice. A significant minority of information
requests are answered outside of the maximum time-period, or are not answered
at all.
The Commission proposes better statistical
monitoring of response times through automated data collection and matching.
This can be included in the future Implementing Regulation of Operational
Statistics. Furthermore a clarification of what information is ‘at hand’ and
not ‘at hand’ would be useful. Finally the problems of procedure and message
routing need to be addressed.
4.7.        Experiences
with EMCS Phase 3 (Exchange of Information functions), SEED, CS/MISE (Movement
Tracking and Statistics Service) and the ELOtoELO Mailbox
4.7.1.     EMCS
Phase 3 versus the previous use of e-forms for exchange of information on
request
With the exception of one Member State, all Member States reported that the use of EMCS Phase 3 represents an improvement on the
previous use of e-forms. Advantages mentioned include easy access to movement
details when constructing a request, the integrated storage of requests and
replies and improved workflow management. Also one Member State mentioned the
addition of new information exchanges concerning on-going movements, which
allow traders and control officers to report problems and share the information
with other interested Member States.
Problems mentioned include a lack of clear guidelines
concerning the procedures and workflow and misuse of the system, whereby
requests are sent as scanned letters in attachment, rather than the request
itself being completed, thus defeating the multilingual objectives of the
messages. There were also some concerns about the limited content of the
messages and that the workflow was not sufficiently rich to cover all the
different possibilities (partial answers, repeated reminder messages, the
inability to provide duly justified refusal.
It would be useful to review these issues with
Member States.
4.7.2.     Register
of economic operators (SEED)
19 Member States out of 20 were satisfied with
the operation of SEED. The other Member State was concerned that direct
delivery addresses were not recorded in SEED. The Commission considers that
where a Member State has given a direct delivery authorisation to a trader
there is no practical way to record the delivery addresses of the trader’s
customers.
As far as reliability is concerned 6 Member
States report that the data in SEED is almost always up to date, and so having
to resort to alternative means to establish the validity of a consignee’s
authorisation is almost never necessary. A larger group of Member States still
find it necessary to resort to other means from time to time. 15 Member States
ask the other Member State to confirm the authorisation, whilst 12 use the
central lookup service provided by central SEED.
It would of course be reasonable in such cases
to take such a factor into account when assessing the risk associated with such
movements.
Continuing delays in the transmission of
authorisation updates is a matter of concern. It is believed that the new
Implementing Regulation in this area, recently adopted by the Commission,
should help to reduce this problem by introducing minimum service level
obligations on Member States and the Commission.
4.7.3.     SEED-on-Europa
SEED-on-Europa is an online service provided by
the Commission, which allows excise traders to check the validity of the
authorisation claimed by a trading partner on the basis of an authorisation
number.
19 Member States out of 20 consider
SEED-on-Europa to be a useful service to their traders. Some Member States
consider that the information provided is too limited and would like to see the
information extended to include the name and address of the trader. Others have
argued in the past that providing complete details would make it easier to
generate fraudulent orders. Others have responded to this by saying that the
absence of this information makes it impossible for a consignor to check
whether the delivery address belongs to the consignee.
The Commission believes that further discussion
is warranted on this subject in order to come up with a solution which
facilitates trade, whilst not encouraging fraud.
4.7.4.     Central
Services/Management Information Services for Excise (CS/MISE)
The Commission provides Member States with a
management system which allows Member States to track the status of open EMCS
movements. The system also provides facilities for the production of
statistical reports. CS/MISE is being extended to include more business
information about the status of movements and administrative cooperation
exchanges.
13 of the respondents use CS/MISE regularly or
occasionally. 10 do not use it as part of their work, but are aware of it. Only
one respondent had not heard of the service. Nevertheless 12 respondents
consider that the service is underused and that the Commission should promote
it, whilst 8 think that its availability is sufficiently well known.
Under the previous arrangements for EWSE
and MVS the Commission collected statistics on usage from Member States. The
equivalent statistics for EMCS are now being collected automatically, using the
facilities in CS/MISE, with an extension of the coverage to be introduced later
this year.
All Member States except one, felt that
statistics should be collected centrally though the facilities available. There
was no particular request for an extension of the existing collection data
beyond what is already planned. One Member State did suggest using the
facilities to create a data warehouse of movement information which could be interrogated
by Member States for the purposes of risk analysis. This is an interesting
idea, but would involve a large-scale centralisation of Member State data. The Commission may wish to explore other means to achieve the same objective.
4.7.5.     Secure
E-Mail for Administrative Cooperation Purposes (ELOtoELO)
22 of the respondents use this service and 14
of them are completely satisfied with it. The major cause for dissatisfaction
is that the secure e-mail channel is used both for operational issues, and for
enquiries about national legislation, regulations and administrative
provisions, and sometimes for technical enquiries that should be routed to
National Helpdesks. It is suggested that the correct National Help Desk contact
details are made available more widely and that additional e-mail addresses
should be provided as standard to allow better routing of such exchanges.
One Member State suggested that the ELOtoELO
service should be kept as a fallback service for EMCS and that operational use
should be avoided. Again it was suggested that a new cooperation message should
be developed for situations where there is no documentation accompanying a
consignment.
The Commission agrees that the EMCS Phase 3
service should be used under normal circumstances with the secure e-mail
service being reserved for exceptional situations. The content of the e-mail
messages should be used as candidate material for enhancing the existing EMCS
messages or creating new messages.
4.7.6.     Conclusions
·      The replacement of e-forms by EMCS Phase 3 is very successful and
is seen as an improvement by the vast majority of Member States. Nevertheless,
the existing content and workflow should be reviewed to see if further
improvements to meet expressed business needs are possible.
·      SEED works well and is mostly reliable and up to date. Further
improvements can be expected with the bringing into force of the service level
requirements in the Implementing Provision for the Register of Economic
Operators.
·      There is a continuing disagreement concerning the scope of
information to be published on SEED concerning individual traders. During the
adoption of the Council Regulation there was a long discussion on the exact
content of the SEED database. Article 20(2) specifies that SEED-on-Europa only
provides a verification service. The Commission considers the provision of more
detailed information to traders to be a national matter.
·      CS/MISE is appreciated as a service but should be promoted as a
service for national operational services.
·      Secure e-mail should be enhanced to allow for multiple e-mail
addresses for different services. There should be an analysis of the use of the
service to see if some of its function could be taken over by enriched content
within EMCS itself.
4.8.        Future
Requirements
4.8.1.     Risk
– distribution of standard risk profiles
The initial plan for EMCS included the
production and distribution of standard risk profiles. This work was deferred,
because it was not clear what the content of such profiles would be and how
such profiles would be used.
15 respondents were in favour of the
distribution of common risk profiles, with 5 opposed to this. On the issue of a
shared database holding details of traders and infractions the respondents were
split, 8 being in favour of such a system and 8 against such a system. Various
suggestions were made concerning the reuse of existing systems. Some favoured
the extension of SEED to holder risk information on traders, whilst others
suggested extending existing customs systems such as CRMS/RIF or CIGINFO to
cover excise needs.
4.8.2.     Other
Requirements
There were few contributions on this issue. One
  Member State repeated the request for more flexible workflow in EMCS. Another
request was for an interactive service to allow informal, but secure
conversations, alongside EMCS messages and secure e-mail.
4.8.3.     Conclusions
Better support for risk analysis should be
considered as a possible extension for EMCS in the future. The possibility of
an interactive service for communication between CELOs should be considered.
5.           ANNEX: DRAFT REPORT FROM THE COMMISSION TO THE COUNCIL
AND THE EUROPEAN PARLIAMENT
On the application
of Council Regulation (EC) No 2073/2004 of 16 November 2004 on administrative
cooperation in the field of excise duties
1.               Introduction
According to Article 35(1) of Council Regulation (EC) No. 2073/2004
of 16 November 2004 on administrative cooperation in the field of excise
duties, the Commission shall present every five years from the date of entry
into force a report to the European Parliament and the Council on the
application of this Regulation. This is the first report since the Council Regulation
No 2073/2004 entered into force on 1 July 2005.
This report assesses the functioning of administrative cooperation
within the current legal framework and focuses in particular on the use that is
made of these newly introduced arrangements in order to evaluate whether these
changes have been effective, what and how can be approved and what has to be
added, changed or deleted.
The planning for the publication of this report was delayed with one
year as the initial planning for the EMCS system application (based on Decision
No 1152/2003/EC of the European Parliament and of the Council of 16 June 2003
on computerising the movement and surveillance of excisable products and with
as legal base Council Directive 2008/118/EC of 16 December 2008 concerning the
general arrangements for excise duty and repealing Directive 92/12/EEC) was
delayed with the same period on request of the Member States. As Phase 3 of
EMCS (mostly linked to the electronic method of administrative cooperation for
excise), for which the application is planned for 1 January 2012, is linked
with the revision of Regulation 2073/2004, it was considered as more opportune
to adapt the planning for the publication of this report to align it with the
review of the aforementioned Regulation.
2.               Changes
to the legal Background
Directive 77/799/EEC, had originally served to define administrative
cooperation in all areas of taxation. This Directive was generic and not
adapted to the needs of Excise Administrations in this area. Specifically it took
no account of the EMCS project and of the particular tools that were being
developed to support the so called Phase 0 of EMCS project (electronic tools to
support existing manual business processes.)
Consequently Regulation (EC) No. 2073/2004 was written and adopted
by the Council, replacing Directive 77/799/EEC in the field of excise duties.
The version adopted was intended to be provisional, waiting on the automation
of support for administrative cooperation that is contained in Phase 2 and
Phase 3 of EMCS. Accordingly, most of the text of 77/799/EEC was only slightly
modified, to clear up ambiguities. Articles concerning the use of SEED (System
of Exchange of Excise Data), EWSE (Early Warning System for Excise) and MVS
(Movement Verification System) were added to provide a legal base for the use
of these tools, alongside the existing articles on Requests for Information,
Automatic Exchange and Spontaneous Exchange. This created a two-track approach,
with some forms of exchange specified through descriptions of the tools used
and some described in a generic way, to be more closely defined later by
comitology, and national practice.
Given the transitional nature of the EMCS Phase 0 tools provided it
was considered sufficient to rely on the technical specifications and guidance
manuals for more detailed descriptions of the use of these tools. The existing
more generic articles for exchange of information have also to some extent been
used by Member States to exchange information outside of the use of SEED, EWSE
and MVS, bilaterally, or between groups of neighbouring countries, but without
any associated implementing regulations.
Everything considered, the Regulation was nevertheless an important
first step for the improvement of the legal framework for administrative
cooperation and an important and improved tool in the fight against excise
fraud. In particular, the Regulation introduced improvements relating to:
§
   A fixed structure of official services and
clearer and binding rules governing cooperation between Member States.
§
   The possibility for more direct contacts
between services with a view to making cooperation more efficient and faster.
§
   The possibility for more automatic or
spontaneous exchanges of information between Member States in order to combat
fraud more effectively.
3.               Sources
of information used for the evaluation of the application of Regulation
2073/2004.
As foreseen in Article 35(1) of Regulation 2073/2004, the evaluation
of the application of the Regulation could only be done on the basis of substantial
input from the Member States.
Therefore, the Commission was of the opinion that the information
required for a comprehensive assessment of administrative cooperation under the
new Regulation was best collected by way of a questionnaire sent to the Member
States.
The questionnaire consisted of a series of objective questions
concerning the numbers of actions undertaken, grouped by Article number in the
Regulation. Member States were also given the opportunity to elaborate on
certain replies given in the questionnaire and, more generally, to share their
views on the functioning of Excise administrative cooperation and in particular
on the possibilities they saw for its further improvement.
24 Member States replied to the questionnaire concerned, covering
the activities during the period 2006 till the end of 2009.
A detailed analysis of the replies was carried out, which laid the
basis for this report and for the proposal for a new Regulation on
administrative cooperation in the field of excise duties, to replace Regulation
2073/2004, which was presented to and discussed in the meeting of Working Group
n° 2 on 4 March 2011.
Interesting sources of information are also the EMCS Monthly
Statistics Reports, composed by the Commission and containing
figures concerning messages sent and received within the application of
Regulation 2073/2004, used communication channels and the evolution of
authorised products, economic operators and operations within the general
arrangements for excise duty.
4.               Main
findings
4.1.            Practical
functioning
The following analysis considers separately each “active” article of
the Regulation concerned, i.e. those articles giving the possibility for an “action”
by Member States’ tax administrations. .
4.1.1.        Exchange
of information upon request
Article 4(1) which gives the possibility
to refuse to provide information when the authorities concerned are acting with
the authorisation or at the request of the judicial authority was only used by
one Member State but without detailed statistics on the number of cases.
Article 4(2) giving the possibility to
exchange the information mentioned in Article 4(1) in accordance with the
national law was used by two Member States. Only once by the first Member State (concerning a discharge of an AAD of high value) and several times by the
other (on criminal proceedings with excisable goods).
Article 5(1) creating the legal base for
the cooperation on request was used during the period considered in total 7 879
times, excluding requests covered under the Movement Verification System (MVS)
covered under Article 24.
The most common reasons for making these requests were related to
investigations where other systems like for example MVS did not give or did not
give enough accurate or complete information or was not replied to, suspicion
that excise products may have been diverted, doubts about documentation
authenticity and exchange of information about the specificities of national
legislation (like oil markings).
In general all the Member States were very positive on the results
of these exchanges Minor remarks concerned incomplete answers and the lack of
adding proves to some statements.
Besides some isolated and individual cases (for example, lack of the
necessary data/documentation to prosecute investigations), no major problems
were mentioned by the Member States in dealing with these requests.
Article 8 describes the maximum delay to
reply on the requests.
On the question if other Member States respected the deadline of 3
months to reply, 19 Member States answered “YES” and 5 answered “NO”.
On the question if Member States, as requested authority, were able
to respect the deadline themselves, 20 answered “YES” and 4 answered “NO”.
The main reasons for not respecting the deadline were the lack of
human and material resources, the complexity of some cases and the need to
contact several different external entities.
The biggest inconvenience that was seen when not respecting the time
limit was the lost energy and time to produce reminders. In some cases when the
problem took big proportions, bilateral contacts were made to solve the
problem.
Article 9 permits that in certain cases
the time limit of Article 8 can be different within an agreement between the
requested and the requesting authorities.
On the question if Member States made use of this provision, 11
Member States answered “YES” and 13 answered “NO”.
Only exceptionally was there a request made for a shorter deadline
(for example when the period to collect the excise duty was ending), but mostly
it concerned requests to extend the deadline due to the complexity of the case,
when the operator refused to cooperate or was not available. Another reason to
extend was the time taken to locate the sought for supporting evidence.
4.1.2.        Presence
in administrative offices and participation in administrative enquiries
Article 11(1) allows officials of the
requesting authority to be present in the offices of the requested Member State.
This possibility was only used by 2 Member States (each 5 times).
The Member States concerned gave none or only a brief answer on the
question to evaluate these presences, but without negative conclusions.
Article 11(2) allows officials of the
requested authority to be present in the requesting Member State.
This possibility was used by 6 Member States (respectively 2, 5, 1,
8, 1 and 1 time).
The Member States concerned gave none or only a brief answer on the
question to evaluate these presences, but without negative conclusions.
4.1.3.        Simultaneous
controls
Article 12 and Article 13(4) foresee
simultaneous controls within different Member States whenever such controls
would appear more effective than controls carried out by only one Member State and the possible feed-back.
For the period considered, 8 Member States participated in total in
34 simultaneous controls.
These controls were experienced as important, useful and successful.
In the case of companies operating throughout Europe, simultaneous
controls are an effective means of checking the facts of cases across borders.
They enable the facts of cases regarding excise duty legislation to be fully
and completely understood. In particular with regard to mail order selling,
there are no other ways of checking. Simultaneous controls stay useful and
important even if the results in financial terms are often minimal. They also
show companies clearly that cross-border operations are also subject to
controls in the area of excise duty.
This system surely helps for the operational collaboration between
Member States, but the contrasting results on the combat of fraud show that
there is a need to develop a system to exchange information within a network,
considering the profiles and the techniques of fraud, the identification of
criminal organisations and on the techniques used by the Member States to
combat fraud (only 1 Member State gave some feed-back after a simultaneous
control on the basis of Article 13(4)).
4.1.4.        Requests
for notification of administrative decisions and measures
Article 14 foresees the notification of
administrative decisions and measures.
For the period considered, there are in total 204 messages sent (to
remark that 1 Member State sent 160 messages).
On the question to the Member States if problems were encountered in
applying this provision, the answer was negative.
4.1.5.        Exchange
of information without prior request
Articles 17 and 19 are the legal base
for occasional automatic and regular automatic exchange of information.
For the period concerned, there are in total 5 351 messages sent.
7 Member States put also regular automatic exchanges in place on
this basis.
11 Member States made also use of Article 19 within this frame.
The reasons to send this information was based on risk analyses,
possible illegal trade, potential fraud situations to avoid any possible excise
duty evasion and to inform about irregularities which occurred quite often or
regularly.
This information was considered as very useful in most cases.
The main reason to create regular automatic exchanges was the big
difference in excise duties between Member States, giving a permanent danger
for fraud.
Article 19 was also used to inform other Member States about
important changes in national legislations with direct practical consequences
(like the change of fiscal marks).
4.1.6.        Storage
and exchange of information specific to intra-community transactions
Article 22 established a legal basis for
an electronic database called “System for Exchange of Excise Data” (SEED),
containing data about operators in the excise field and the related
authorisations. Before its establishment Member States exchanged data on a
monthly basis with each other by e-mail concerning their trader authorisations.
This meant that the information was often incomplete and out of date.
At this moment 245 497 operators are registered in SEED.
This system allows operators to check the validity of excise
authorisations and allowed excise products for these authorisations via
national databases or via the central database of the Commission “SEED-on-Europa”.
For the period concerned, there were 4 766 329 consultations of the
central database. Currently approximately 450 000 checks per month are carried
out to check on the validity of excise authorisations. This represents a large
increase in the number of consultations on SEED-on-Europa since 1 January 2011,
from which time all movements of excise under duty suspension have been
monitored by EMCS. Since the start of EMCS Phase 2, the
SEED database has been integrated with EMCS national applications, thereby
allowing for an automatic check of the aforementioned data and thus assuring
better adherence to excise law.
Article 23 put in place an Early
Warning System (EWSE) related to starting movements of excise goods on the
basis of a risk analysis based on the Accompanying Administrative Document (AAD
– Commission Regulation (EEC) N° 2719/92 of 11 September 1992), in order to
allow the authorities of the Member State of destination to organise in due
time a control on this movement in their country.
For the period concerned, there are in total 130 802 messages
sent.
The statistics show that within that same period 660 of these
messages were leading to the discovery of infractions or irregularities.
The most important of these infractions or irregularities were:
incorrect completion of the AAD, illegal alcohol, false movements, movements
not reaching their official destination or a different destination, losses or
excesses, invalid excise authorisation numbers, other goods transported than
those mentioned on the AAD, exceeding the allowed transportation time and a
different office of exit than mentioned on the AAD.
Concerning the use of the risk analysis, besides a guideline from
the Commission concerning some common criteria based on value, and whether
there had been a change of destination, there was no other uniform system in
use between the Member States during the reporting period.
So the criteria used to select a movement for sending a message
within EWSE have varied widely from Member State to Member State.
In addition to the Commission criteria the most used criteria for
this purpose were: a too long travel period mentioned on the AAD, a new
consignee, suspect consignee or transporter, invalid excise authorisation
number mentioned, big difference in tax levels between the Member States
concerned, goods with high excise duties, the quantity of the goods,
transactions with inactive declared operators, first movement of a new
consignor.
Article 24(1) installed a Movement
Verification System (MVS) to allow Member States to get information during
a movement of excise goods or do a control after the completion of a movement
on the basis of a risk analysis based on the AAD or the SAAD (Simplified
Accompanying Administrative Document used for the movement of excise goods for
which the duty is already paid – Commission Regulation (EEC) N° 3649/92 of 17
December 1992).
For the period concerned, there are in total 25 903 messages
sent.
There are no statistics to show how many of these messages were
directly leading to the discovery of infractions or irregularities, but it was
shown that the use of the system concerned was very useful and successful for
control purposes. Anecdotal evidence suggests that MVS controls revealed a
higher percentage of infractions or irregularities than EWSE. This would be
expected, since the primary function of EWSE was to act as a deterrent to
certain groups of traders.
The most important control results were linked to shortages, false
stamps, goods not arrived at destination, not authorised excise goods, lack of
the necessary authorisation, invalid authorisations, misuse of traders’ data
information, unpaid taxes in the Member State of destination, movements not
registered in the traders’ records and change of data on the accompanying
documents after departure.
The most common reasons for making an MVS request are: copy 3 of the
accompanying document not returned to the consignor, spot checks, doubts on the
stamps or signatures, no visa of the Member State of destination on the
document about the arrival of the goods, other doubts about the arrival of the
goods or about the exit of the goods out of the EU, doubts about a regular end
of the movement, to control the inscription in the records, crossed data in the
documents, possible fictive movements, first transactions, hold of an appropriate
excise number, unknown excise authorisation and payment/reimbursement of excise
duty.
Article 24(3) allows the Member State in which the consignor of excise goods is established to grant him assistance
via MVS, especially to prove the discharge of an excise movement in certain
circumstances.
18 member States confirmed using this provision to assist the
consignor.
In general, Member States considered this system as useful, not
presenting always a clear and final answer to discharge the movement on that base,
but to help them in making a final decision on this discharge by presenting
some additional elements.
Article 25(1) prescribes that Member
States shall keep the information concerning this regulation for at least 3
years. On the question of the Commission if this period is sufficient, a
majority of 18 Member States confirmed that this period was sufficient for
them.
4.1.7.        Relations
with third countries
Article 27 (1) and (2) allows the
exchange with third countries in certain circumstances.
None of the Member States had made use of one or both of these
provisions.
It could be assumed that in these cases the custom instruments on
administrative cooperation are used.
Nevertheless, the Commission is still convinced that in the longer
term an approach coordinated at EU level to cooperation with third countries in
the area of excise is the appropriate way forward.
4.1.8.        Conditions
covering the exchange of information
Article 30 (1), (2), (3), (4) and (5) defines
certain conditions which must be fulfilled to be able to exchange the
information.
From the replies from the Member States it can be concluded that the
provisions to restrict exchange of information were rarely if ever used
virtually non-.
Article 30 (1) was used once by two Member States, and Article 30(3)
and (5) each once by 1 Member State (a reason was that it was impossible to
collect the documents concerned as a result of a bankruptcy).
Article 31(3) allows the forwarding of
information received from one Member State to another Member State.
6 Member States made use of this provision.
The most important reason was to share information about risks and
modus operandi of fraud mechanisms.
2 of the Member States concerned require prior consent.
4.2.            General
and final provisions
Article 36 allows Member States to conclude bilateral matters
covered by the Regulation.
8 Member States concluded such matters, especially to intensify the
assistance between these countries.
5.               Conclusion
The Member States consider that the Regulation has improved
administrative cooperation in the field of excise. In general, the legal
framework provides the competent authorities with a solid basis for exchanging
information and for working together using the different instruments available
to obtain valuable information to combat fraud.
In relation with the planned revision of Regulation 2073/2004 (due
to Phase 3 of EMCS as already mentioned in the introduction) the general
opinion of the Member States was, beside the necessary real changes related to
EMCS, to keep the existing functions and possibilities unchanged as far as
possible.
Nevertheless, the Commission analysed all the information and
remarks received and took these into account where possible in the proposal for
the recast of Regulation 2073/2004 that is prepared.
The pure fact that, as of 1 January 2012, the administrative
cooperation messages will be structured and carried electronically (also
replacing EWSE and MVS for movements under suspension of excise duty) will
improve the global working in this area (fast communication, better feed back,
better statistics…..).
Furthermore, for any subject where it seems useful or necessary, the
Commission will take initiative to improve or intensify the actions (trainings,
information and motivation, simultaneous controls, relations with third
countries….).
[1]       Some Member States required the presentation of an additional
copy of the AAD by the consignor before dispatch of the goods but this was by
no means universal and when applied imposed an additional burden on economic operators.
[2]       High Level Group on Fraud in the Alcohol and Tobacco Sectors
– Report to Directors General for Customs and Indirect Taxation
[3]       The Committee was renamed ‘Committee on Excise Duty’ in
Directive 2008/118/EC
[4] Some Member States think that such details should be updated using
a newly specified EMCS message. Others think that this is not necessary.
[5]       Standard carriage document specified
by the International Road Hauliers Union (IRU/CMR)