Customs : the EU customs union : protecting people and facilitating trade.
Date: 2014-07-18
Institutions: Directorate-General for Communication
Subjects: EU customs procedure, European Union, European integration, customs cooperation, customs harmonisation, customs territory (EU), customs union, public awareness campaign

Customs

T H E   E U R O P E A N  
U N I O N  
E X P L A I N E D

The EU 
customs union: 
protecting 
people and 
facilitating 
trade

C us to m s  s er vices   ar e  o n  t he  f ro n t   line 
agai ns t  dan ger o us  go od s,  il le gal 
t raf f ic,  f r aud,  te rr o ris m  and   o rg an ised 
c rim e   whil e  m akin g  tr ad e as  e as y  as 
p o ss ib l e

CONTENTSmatières

Why do we need  
a customs union?  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . .  3

How the EU goes about it —  
managing the customs union  .  .  .  .  .  . . 5

Customs and the citizen  .  .  .  .  .  .  .  .  .  .  . . 8

Outlook — today, tomorrow  
and beyond  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 11

Further reading  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 12

THE EUROPEAN UNION 
EXPLAINED

This publication is a part of a series that explains  
what the EU does in different policy areas,  
why the EU is involved and what the results are.

You can see online which ones are available  
and download them at:
http://europa.eu/pol/index_en.htm

How the EU works
Europe 2020: Europe’s growth strategy
The founding fathers of the EU

Agriculture
Borders and security
Budget
Climate action
Competition 
Consumers
Culture and audiovisual

Customs 

The European Union explained: Customs 

Development and cooperation
Digital agenda
Economic and monetary union and the euro 
Education, training, youth and sport
Employment and social affairs
Energy
Enlargement
Enterprise
Environment
Fight against fraud
Fisheries and maritime affairs 
Food safety
Foreign affairs and security policy
Humanitarian aid and civil protection
Internal market 
Justice, citizenship, fundamental rights
Migration and asylum
Public health
Regional policy
Research and innovation
Taxation
Trade
Transport

European Commission
Directorate-General for Communication
Publications
1049 Brussels
BELGIUM

Manuscript completed in March 2014

Cover and page 2 picture: © iStockphoto.com/Oxford

pp. 16 — 21 × 29.7 cm
ISBN 978-92-79-24277-9 
doi:10.2775/61045

Luxembourg: Publications Office of the European Union, 
2014

© European Union, 2014
Reproduction is authorised. For any use or reproduction 
of individual photos, permission must be sought directly 
from the copyright holders.

Why do we need a customs union?

3

The customs union was one of the European Union’s 
earliest achievements and remains a crucial asset in 
the global environment of the 21st century. A customs 
union means that members apply the same tariffs to 
goods imported into their territory from the rest of the 
world, and apply no tariffs internally among members. 
The EU customs union is highly sophisticated, so it 
already applies a wide set of common rules to imports 
and exports, and has completely removed all controls 
between its members. 

The EU customs union acts like the skin of the body. 
It surrounds the EU’s internal market, allowing goods 
to move freely internally by controlling their external 
import and export. In fact, the internal market, where 
businesses can sell their goods and invest in any 
Member State, would be unthinkable without the EU 
customs union.

For businesses involved in international trade and 
transport, the EU customs union means common and 
streamlined procedures across the union. Regardless of 
where in the EU the goods are declared, the same rules 
apply, and once the goods have cleared customs, they 
can circulate freely or be sold anywhere within the EU 
customs territory.

Although no longer the most important task, import 
duties collected by customs remain an important source 
of income for the EU. In 2012, they represented nearly 
13 % of the EU budget, which amounts to €16.3 billion.

The EU is the world’s largest trading block, so in 
global terms, the EU customs union is a heavyweight 
in international trade. Its negotiating position thus 
outweighs that of any single Member State acting on  
its own.

Customs officers in the 28 Member States monitor 
goods traffic at the EU’s external borders, which means 
ports, airports and land border crossings. By so doing, 
they protect consumers from dangerous goods and 
health hazards, and animals and the environment 
against plant and animal diseases. They prevent 
accidents and provide a first line of defence against 
risks in the supply chain, including the fight against 
organised crime and terrorism. Imported goods sold 
in Europe, from toys to food and medicines, are safer 
thanks to the vigilance of customs.

Customs also keep an eye on sensitive exports such 
as cultural goods, so that European treasures are 
not smuggled out. Furthermore, as part of the EU’s 
responsibility towards the rest of the world, they also 
prevent illegal exports of waste.

Indeed, protecting the environment features among 
the many tasks performed by customs. This includes 
controlling trade in rare species of animals as well as 
exotic timber from endangered forests. It also involves 
checking that animals are properly contained and 
looked after during transport.

Customs are mainly involved with commercial traffic, 
but they also check passengers for illegal or dangerous 
goods like drugs or guns, and for goods that, for 
example, pose a risk by carrying animal diseases. 
Customs do not routinely control the movement of 
people or check their passports, which is the role of 
border guards or the police. 

‘The protection of our citizens, the 
prosperity of our businesses and the 
promotion of EU trade depend on top-class 
services provided by a seamlessly 
functioning customs union.’

Algirdas Šemeta, European commissioner 
responsible for taxation, customs, statistics, 
audit and anti-fraud

Customs operations in the EU now account for around 
16 % of world trade, handling imports and exports 
worth over €3 500 billion every year. The scale of 

Video: experience 1 minute on a normal customs day.

CUSTOMS operations for customs is daunting: every minute, 
on average, 4 000 tonnes of goods are imported or 
exported, with almost 500 customs declarations, while 
over 200 counterfeit and pirated goods are confiscated. 
As international trade grows, it is also expanding 
to cover an increasing variety of goods. EU-level 
coordination helps customs authorities keep pace with 
this proliferation.

What is a customs union?

A customs union is where a group of 
countries join together to apply the same 
rates or import duties on goods from the 
rest of the world. The countries within that 
union also agree not to apply duties 
between themselves. Essentially, once 
goods have passed customs they can move 
freely between those countries within the 
customs union.

There are customs unions in other parts of 
the world as well. For example, Mercosur 
groups several south American countries, 
while there is a union between Russia and 
a number of its neighbours.

A customs union differs from a free trade 
agreement in that a free trade agreement 
only abolishes customs duties between the 
countries concerned. There is no agreement 
to apply the same rates of duties to goods 
coming from other countries. 

Pushing back the borders — how it 
began

Belgium, Luxembourg and the Netherlands established 
the Benelux customs union in 1944 and it came into 
force in 1948. The young demonstrators pictured were 
calling for the abolition of more controls on frontiers 
and customs.

Germany, France and Italy had joined the Benelux 
countries in founding the European Coal and Steel 
Community in 1951. Its president, the former Belgian 
prime minister Paul Henri Spaak, began work on 
the idea of a broader customs union in 1955. His 
report formed a significant part of the basis for the 

4

1957 Treaty of Rome that established the European 
Community and provided for a customs union between 
all its members by the end of the next decade.

The customs union came into being 18 months ahead 
of schedule on 1 July 1968, when the remaining 
customs duties on intra-Community trade were 
abolished and the common customs tariff was 
introduced to replace national customs duties in trade 
with the rest of the world.

In 1993, customs controls at internal borders were 
abolished and long queues of commercial vehicles at 
border crossings are now a distant memory.

At each subsequent enlargement of the European 
Union, the new countries also joined the customs union, 
reconciling their national laws with the Community 
Customs Code. Monaco, a non-EU state, was already 
in a customs union with France, while Andorra and San 
Marino established agreements in 1991. The EU–Turkey 
customs union entered into force in 1995 but, like 
the agreement with Andorra, is limited to industrial 
products and processed agricultural products.

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Members of the Belgian section of the European Movement 
demonstrated against border controls in Liège in 1953.

THE EUROPEAN UNION EXPLAINED 
 
How the EU goes about it — managing  
the customs union

5

Responsibility for customs policy is at the level of the 
European Union: it is one of the few areas known as an 
exclusive competence of the EU. However, implementing 
the customs union relies on close partnerships with and 
between Member States. The European Commission 
works to ensure that the customs union is fully 
equipped with modern, effective and interconnected 
customs administrations to face both current and future 
challenges.

Behind the scenes, the Commission helps to coordinate 
the activities of customs laboratories and the 
development and implementation of IT systems and 
training materials.

Customs cooperate with relevant authorities to ensure 
the security and safety of citizens and the protection of 
the environment. Customs officers and authorities are 
a vital partner for the European Police Office, Europol, 
in battling organised crime. They also liaise with 
Eurojust, the European network of judicial authorities 
that underpins European cooperation on criminal justice 
cases, and the European Anti-Fraud Office.

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Ensuring the safety and security of citizens is increasingly a 
high-tech business.

Enshrined in law

The Treaty of Rome of 1957 initiated the customs union 
as an essential foundation of the community. Today, the 
provisions governing the free movement of goods are 
found in the Treaty on the Functioning of the European 
Union (Part 3, Title II). These prohibit customs duties on 
goods traded between EU Member States and stipulate 
that once a common customs tariff has been applied 
at the EU’s external borders, goods must be able to 
circulate freely.

One of the objectives of the European Commission 
when proposing duties is to promote trade with non-EU 
countries whilst taking the needs of Member State 
economies into account. The Council of the European 
Union decides on what duties to impose, and is 
jointly responsible with the European Parliament for 
overseeing customs cooperation between Member 
States and between Member States and the European 
Commission.

The common commercial policy, the counterpart to the 
customs union, ensures the uniform conduct of trade 
relations with non-EU countries and underpins the EU’s 
common import and export regimes.

The basis for managing customs is the Union Customs 
Code (formerly the Community Customs Code), which is 
agreed by the European Parliament and the Council of 
the European Union. As new processes are implemented 
and new challenges arise, the Commission and national 
customs authorities work together to revise the various 
implementing procedures of the code.

Working together

National customs officials work together with 
colleagues from across the EU, from Portugal in the 
south-west to Estonia in the north-east, to enable a 
smooth passage of goods from the border to their 
final destination. The EU has over 250 international 
airports and its eastern land border stretches almost 
10 000 km, with 133 commercial road and rail entry 
points. At the EU level, there is a continual effort to 
provide improved customs procedures and to ensure 
that goods entering or leaving the EU are treated the 
same regardless of the customs entry or exit point.

CUSTOMS  
 
6

Nowhere is this more evident than in the increased 
security controls of freight to counter the resurgence 
of the threat of terrorism in recent years. A particular 
concern is the use of containers to smuggle nuclear 
material or a radiological device: beyond the possibly 
devastating direct effects of an attack, international 
transport and trade would be brought to a halt, with 
huge consequences for the global economy.

Non-intrusive inspection equipment using x-ray and 
gamma-ray technologies is being deployed at border 
crossings and sea- and airports to reduce the time 
taken for examining cargo shipments: customs officers 
can obtain a visual image of a container’s content 
without unloading it.

However, in order to make the best use of scarce 
resources and avoid unreasonable delays to legitimate 
traffic, controls must be targeted to where they are 
most effective using risk management techniques. 
Using criteria established for the entire union, advanced 
risk analysis systems let customs identify a high-risk 
cargo well before it arrives at the border.

EU coordination enables the timely exchange of risk 
information, ensuring that goods refused at one point 
of entry can be detected if attempting entry at another. 
Similarly, whenever a major trend in illegal trade is 
identified, joint action by customs authorities is critical 
in combating the current wave and avoiding further 
occurrences.

Customs services also watch for smuggled animals,  
birds and plants.

Customs control can help 
fight terrorism  
and organised crime. 

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Traditionally, the primary role of customs in the EU 
was collecting customs duties and indirect taxes 
at import, such as excise duties or value added tax 
(VAT). However, in recent years, they have begun to 
carry out a wide range of additional control tasks 
related to safety and security. This includes dealing 
with product safety and health risks from imported 
foodstuffs as well as compliance with environmental 
legislation and veterinary regulations. On the security 
side, the increased threat of terrorist attacks and the 
internationalisation of organised crime have added a 
considerable amount of tasks to customs’ activities. In 
addition, the enlargements of the EU in 2004, 2007 
and 2013 to include 13 new countries and their new 
borders, both on land and at sea, have also presented 
their own challenges.

Beyond verifying goods to see if they comply with 
standards, customs also check for fake goods, drug 
precursors (chemicals that could be converted into 
drugs) and illegal trade in rare and endangered species. 
Specialised laboratories provide the customs union 
with the scientific expertise needed to determine the 
authenticity and origin of products or to identify the 
nature of substances.

In addition customs officials are involved in national 
duties, for instance guarding against illegal drugs or 
pornography and supporting the work of police and 
immigration services, notably in the battle against 
organised crime. As traffic increases, so does the need 
for greater efficiency, for example through the use of 
the latest detection technology.

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THE EUROPEAN UNION EXPLAINED 
 
 
 
7

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Algirdas Šemeta, the 
commissioner responsible  
for customs, watches the 
result of an x-ray scanner 
during a visit to the 
Panemunė border inspection 
post between Lithuania and 
Russia.

Cooperation across Europe and beyond

The European Commission coordinates twinning 
programmes between established EU Member States 
and recent entrants to the customs union. This helps 
the customs administrations of the new Member States 
shoulder the extra responsibility of protecting all of 
Europe, not just their own borders. Other programmes 
help strengthen control procedures and enforcement in 
candidate and neighbouring countries.

Customs authorities of EU Member States as well as 
those of some non-EU countries regularly carry out joint 
customs operations: coordinated and targeted actions 
to combat smuggling or fraud on particular trade 
routes. The European Anti-Fraud Office supports these 
operations, notably by providing strategic analysis, 
a secure IT platform for exchanging intelligence in 
real time and deploying investigators and forensic 
examiners. Occasionally operations involve Europol, 
Interpol and the World Customs Organisation.

Wider international cooperation is also crucial in 
protecting the interests of European citizens and 
European business worldwide. Customs matters figure 
prominently when the European Union is agreeing 
bilateral trade agreements with non-EU countries with 
the aim of securing and facilitating international trade. 
The European Union has signed customs cooperation 
and mutual administrative assistance agreements with 
Canada, China, Hong Kong, India, Japan, South Korea 
and the United States. These agreements simplify and 
harmonise customs procedures, which in turn reduces 
the administrative burden and costs for European 
companies. International accords also help to enforce 
intellectual property rights and to fight against fraud.

Custom authorities also perform a vital role in collecting 
statistics. The trade flow data they collect help 
European policymakers detect economic trends, while 
information in their records contributes to decisions 
on whether to introduce limits on goods that may be 
competing unfairly with EU products.

Examining seized counterfeit products.

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CUSTOMS  
 
 
 
Customs and the citizen

Customs see what you don’t

Counterfeit products are a growing risk to public health 
and safety. Counterfeiting does not only affect luxury 
fashion goods. Customs routinely seize counterfeit 
products for daily use, such as body care articles, toys, 
electrical appliances, fake sunglasses that can damage 

8

eyesight and car parts, including brakes. Of particular 
concern are counterfeit medicines, which accounted for 
nearly a quarter of the 114 million articles confiscated 
in 2011, worth an estimated €1.2 billion.

The number of shipments suspected of violating 
intellectual property rights continues to rise, with nearly 
three quarters of confiscated articles originating in 
China. A critical factor is the expansion of e-commerce: 
the bulk of the 15 % increase in registered cases in 
2011 over 2010 involved seizures of articles being 
shipped by air, express or postal services.

Consumers can also help the EU crack down on piracy 
by not buying fakes. By making such purchases, buyers 
are in effect complicit in the theft of intellectual 
property, which is not a victimless crime. Trade in 
counterfeit and pirated goods deprives the producers of 
genuine products of their legitimate profits, discourages 
innovation and creativity and results in job losses. It 
may also indirectly fund organised crime.

Customs authorities also protect public health by 
keeping a close watch on drug precursors. These are 
chemical substances used in the legal manufacture 
of, for example, pharmaceutical products, perfumes, 
cosmetics, fertilisers and oils. However, they can be 
extremely dangerous when diverted by criminals into 
the illicit manufacture of drugs such as heroin, cocaine, 
ecstasy or amphetamines. Trade in drug precursors 

NUMBER OF REGISTERED CASES AND ARTICLES SEIZED BY THE EU CUSTOMS SERVICES BETWEEN 1999 AND 2011

Number of registered cases

Number of articles seized

100 000

90 000

80 000

70 000

60 000

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50 000

40 000

30 000

20 000

10 000

0

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

200 000 000

180 000 000

160 000 000

140 000 000

120 000 000

100 000 000

80 000 000

60 000 000

40 000 000

20 000 000

0

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THE EUROPEAN UNION EXPLAINED9

Making life easier for business

In recent years the European Commission has enhanced 
dialogue with the business community. This helps 
achieve effective simplification and harmonisation of 
international trade procedures, notably in streamlining 
the practices and formalities involved in collecting, 
presenting, communicating and processing the data 
required for import and export procedures. Trade 
organisations are regularly invited to seminars and 
working groups to contribute to the development of new 
policy and legislative initiatives.

To avoid customs having to process goods at each 
stage of their journey, the customs union harmonises 
procedures for customs transit. This allows the 
temporary suspension of duties, taxes and commercial 
policy measures that are applicable at import so that 
customs clearance formalities need only take place at 
the destination rather than at the point of entry.

Similarly, the European Commission offers advice on 
customs warehousing that allows the owner to hold 
imported goods before either paying duty on import 
or re-exporting them. In some cases, it is possible to 
process goods under customs control into products that 
are subject to a lower import duty before they are put 
into free circulation: savings contribute to creating or 
maintaining processing activities on these premises.

The European Commission is constantly working on 
updating and automating procedures, helping customs 
make the step from paper forms to fully integrated 
electronic networks and provide a one-stop shop for 
traders.

As well as introducing proper security controls to 
ensure the protection of the internal market, the EU 
customs security programme cooperates closely with 
global trading partners to secure international supply 
chains. Reliable traders that make the required efforts 
to secure their part of the supply chain may apply for 
certification as ‘authorised economic operators’ and 
benefit from simpler procedures.

cannot be prohibited, but is monitored both within the 
EU and under international frameworks, with controls 
supported by documentation and labelling measures 
and licensing and registration of operators.

Crossing borders with alcohol and 
tobacco

With the exception of new vehicles and 
very large sums in cash, there are no limits 
on what people can take with them when 
travelling between EU countries, so long as 
any purchased products are for personal 
use and not for resale. However, special 
rules apply to alcohol and tobacco.

Some countries allow you to carry more 
than the personal-use thresholds 
established under EU law and you can 
check with national authorities what they 
allow. But to be sure you will not have to 
pay any duties or fines, you are advised to 
carry fewer than:

 — 800 cigarettes
 — 400 cigarillos
 — 200 cigars
 — 1 kilo of tobacco
 — 10 litres of spirits
 — 20 litres of fortified wine
 — 90 litres of wine (including a maximum 

of 60 litres of sparkling wines)

 — 110 litres of beer.

These rules do not apply to travellers who 
are under 17 years old, who are not 
allowed to carry alcohol or tobacco in any 
amounts. There is no duty-free shopping 
for travellers going from one EU country to 
another.

CUSTOMS This programme has been operating since 2008. 
Member States can grant the status to traders 
meeting strict criteria related to customs compliance, 
appropriate record-keeping, financial solvency and, 
where relevant, appropriate security and safety 
standards. Though the status does not automatically 
allow traders to benefit from simplifications provided 
for in the customs rules of the other Member States, 
they can be granted the use of simplifications if 
they meet specific requirements and without further 
examination of criteria that have been already checked, 
thus avoiding duplication.

10

Contributing to the European Union 
budget

Despite the fact that currently almost three quarters 
of imports into the EU pay no, or reduced, duties and 
the average rate is just 1.2 %, over €22 billion in 
customs duties was raised in 2012. Member States 
retain 25 % to cover costs of collection, but €16.3 
billion was passed on to the EU, nearly 13 % of the 
overall EU budget, forming a significant part of the EU’s 
‘traditional’ own resources, alongside agricultural and 
sugar production levies.

As this income results directly from the application of 
common policies, it is considered as pure EU revenue 
rather than as ‘national contributions’. This is important 
as whoever pays the customs duty is not always a 
resident of the Member State collecting it, making it 
hard to collect equably on a national basis.

The EU is continuing to establish bilateral free trade 
agreements with major partners, possibly expanding 
them to cover the greater part of EU trade. However, as 
global trade continues to rise, customs duties will no 
doubt continue to make a significant contribution to the 
EU budget.

THE EUROPEAN UNION EXPLAINED11

Outlook — today, tomorrow and beyond

The European Union is one of the world’s most 
outward-oriented economies and intends to remain 
so. Trade with the rest of the world doubled between 
1999 and 2010 and the EU is now the primary trading 
partner for 80 countries, four times as many as for the 
United States. As a major market, the EU imports more 
agricultural products from developing countries than 
Australia, Canada, Japan, New Zealand and the United 
States combined. Its customs union needs to keep up.

Differences in history, geography and trade routes 
mean some Member States carry a disproportionate 
share of the burden, but none can address the 
challenges of globalisation effectively in isolation. In 
2013, the Commission outlined plans for establishing a 
more robust and unified service by 2020 by completing 
the modernisation process, addressing gaps and 
reforming the governance and management structures 
of the customs union.

Launched in 2003, the modernisation of the customs 
union towards a paperless environment is well under 
way and some EU customs administrations regularly 
rank among the best in the world. More than 98 % 
of customs declarations submitted in the EU are 
electronic. Continuous efforts are necessary to meet 
future challenges. Customs are facing an increasing 
globalisation of trade, business models and logistics, as 
well as of crime and terrorism.

Central to this further evolution will be the customs 
2020 programme, following on from similar initiatives 
for the 2007–13 period. Starting in 2014 for 7 years, 
and with a budget of more than €500 million, it will 
support cooperation between customs authorities, 
facilitating networking, joint actions and training among 
customs personnel, while also funding IT systems 
to support the development of a fully pan-European 
electronic customs environment with real-time 
exchanges of information.

CUSTOMS 12

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Further reading

 X A fuller guide to the customs union: http://europa.eu/legislation_summaries/customs/index_en.htm
 X Facts and figures: http://ec.europa.eu/taxation_customs/customs/policy_issues/facts_and_figures/index_en.htm
 X Further information on the common commercial policy: 

http://europa.eu/legislation_summaries/glossary/commercial_policy_en.htm 
http://ec.europa.eu/trade/policy/policy-making/

 X Questions about the European Union? Europe Direct can help: 00 800 6 7 8 9 10 11 —  

http://europedirect.europa.eu

ISBN 978-92-79-24277-9 
doi:10.2775/61045

THE EUROPEAN UNION EXPLAINED