REPORT FROM THE COMMISSION TO THE COUNCIL AND THE EUROPEAN PARLIAMENT on the implementation and evaluation of Council Directive 2008/118/EC of 16 December 2008 concerning the general arrangements for excise duty
Date: 2017-04-21
Institutions: Directorate-General for Taxation and Customs Union, European Commission
Subjects: application of EU law, carriage of goods, distance selling, excise duty, free movement of goods, information system, simplification of formalities, tax collection, tax exemption, tax harmonisation

EN 

   EN 

   EUROPEAN COMMISSION  Brussels, 21.4.2017  COM(2017) 184 final   REPORT FROM THE COMMISSION TO THE COUNCIL AND THE EUROPEAN PARLIAMENT on the implementation and evaluation of Council Directive 2008/118/EC of 16 December 2008 concerning the general arrangements for excise duty  {SWD(2017) 131 final}  
 
 
Table of Contents 

1. 

INTRODUCTION ....................................................................................................... 2 

2.  BACKGROUND ......................................................................................................... 3 

3.  THE  EVALUATION OF THE DIRECTIVE ............................................................ 4 

3.1.  Scope of the evaluation ..................................................................................... 4 

3.2.  Results ............................................................................................................... 5 

3.2.1.  Effectiveness and efficiency of Directive 2008/118/EC ..................... 5 

3.2.2.  Coherence of excise and customs arrangements ................................. 9 

3.2.3.  Relevance .......................................................................................... 11 

3.2.4.  EU added value .................................................................................. 12 

4. 

ISSUES WARRANTING FURTHER ATTENTION .............................................. 13 

4.1.  Authorisations .................................................................................................. 13 

4.2.  Handling of shortages, excesses, other exceptions and the fight against 

fraud ................................................................................................................. 13 

4.3.  Coordination between customs and excise procedures ................................... 15 

4.4.  Duty paid procedures aimed at Small and Medium Enterprises ..................... 15 

5.  CONCLUSIONS AND FOLLOW UP ...................................................................... 15 

1. 

INTRODUCTION 

Council Directive 2008/118/EC1 Article 45(2) states: “By 1 April 2015, the Commission 
shall submit to the European Parliament and the Council a report on the implementation 
of  this  Directive.”  To  gather  evidence  for  this  report,  the  Commission  requested  two 
external evaluation studies. The first evaluation study, on Chapter V of the Directive (i.e. 
rules on commercial movements of excise goods on which duty has already been  paid) 
was published in 20152. The second study, which concentrated on Chapters III and IV of 
the  Directive  (i.e.  provisions  on  tax  warehousing  and  electronic  control  system),  was 
published in 20163.  

1   Council  Directive  2008/118/EC  of  16.12.2008  concerning  the  general  arrangements  for  excise  duty 

and repealing Directive 92/12/EEC, OJ L 9 of 14.1.2009. 

2   http://bookshop.europa.eu/en/evaluation-of-current-arrangements-for-the-cross-border-movements-of-

excise-goods-that-have-been-released-for-consumption-pbKP0614146/ 

3   http://bookshop.europa.eu/en/evaluation-of-current-arrangements-for-the-holding-and-moving-of-

excise-goods-under-excise-duty-suspension-pbKP0215865/ 

2 

 
 
 
                                                 
Each of the above studies consisted of a question based survey to Member States and to 
traders, the results of which were compared to ensure a coherent and consistent view of 
the issues in question. For both studies a series of case studies, which went into greater 
depth, were carried out in approximately a third of Member States. The Member States 
selected  are  considered  representative,  based  on  size  of  the  country,  geographical 
location and whether the Member State is a producer or a consumer of excise goods.  

The  Commission  decided  to  carry  out  an  evaluation  of  this  regulatory  area  in  the 
framework of the  Commission’s REFIT4 programme. The detailed evaluation results are 
described  in  a  Commission  Staff  Working  Document  (SWD  (2017)  xxxx)  that 
accompanies  this  report.  Following  the  five  key  evaluation  questions,  relevance, 
coherence,  effectiveness,  efficiency  and  EU  added  value,  this  evaluation  assesses 
whether the  intervention  embodied  in  Directive  2008/118/EC  has  satisfied  the  intended 
objectives and to what extent it has achieved its expected effects.  

Building on evidence gathered through the studies this report summarizes the evaluation 
conclusions  of  the  Commission.  For  more  detailed  information,  please  consult  the 
accompanying Staff Working Document.  

2.  BACKGROUND 

Council  Directive  2008/118/EC  has  replaced  Council  Directive  92/12/EEC5.  It  defines 
the  arrangements  for  the  holding  and  movement  of  excise  goods  within  the  territory  of 
the  European  Union,  with  the  exception  of  a  small  number  of  territories,  where  its 
provisions do not apply. The Directive's objectives and the manner in which they interact 
at different levels of policy have been captured in the intervention logic diagram below: 

4   REFIT  is  a  programme  to  review  the  entire  stock  of  EU  legislation  –  to  identify  burdens, 
inconsistencies, gaps or ineffective measures and to make the necessary proposals to follow up on the 
findings of the review. 

5   Council Directive 92/12/EEC of 25 February 1992 on the general arrangements for products subject to 
excise duty and on the holding, movement and monitoring of such products, OJ L 076 of 23.3.1992 

3 

 
                                                 
Figure 1: Intervention logic of Directive 2008/118/EC 

3.  THE  EVALUATION OF THE DIRECTIVE 

3.1. 

Scope of the evaluation 

The evaluation covers the entire scope of the Directive, but concentrates on Chapters III 
– V. Chapters I and II were included in the evaluation to the extent that the provisions 
touched on matters that are relevant to the effects of the provisions in Chapters III – V. 

Chapter I defines excise duty as a tax on consumption and provides common definitions 
for  concepts  such  as  “authorised  warehousekeeper”,  “tax  warehouse”.  Common 
definitions ensure that there is a common legal understanding of these terms and provide 
a clear and consistent framework.  

Chapter  II  establishes  the  time  and  place  of  chargeability,  who  is  liable,  the  effect  of 
destruction and irretrievable loss, irregularities, refunds and remissions and exemptions.  

Chapter III takes over the concept of ‘tax warehouse’ from Directive 92/12/EEC as one 
of the types of authorised locations where excise goods may be held and produced under 
excise  duty  suspension,  facilitating  checks  of  the  production  and  storage  facilities.  The 
detailed rules for authorisation are decided nationally, but the system as a whole is set out 
in  Chapter  III  of  the  Directive.  Each  tax  warehouse  is  associated  with  an  authorised 
warehouse keeper who is responsible for the management of the tax warehouse. The tax 
warehouse and the authorised warehousekeeper each receive a unique excise number.6 

6  Council  Regulation  (EU)  No  389/2012  and  Commission  Implementing  Regulation  (EU)  No  612/2013 
provide the legal base for the sharing of data between Member States concerning the authorisation and 
registration of economic operators and the authorisation of tax warehouses  

4 

 
 
                                                 
The data provided  by the SEED system (System  for Exchange  of Excise Data) permits 
validation  of  whether  an  authorisation  for  the  excise  number  exists;  and  if  it  does,  it 
states which excise products are authorised to be handled by the trader or tax warehouse. 
Both  consignor  and  consignee  are  registered  in  the  SEED  database  by  their  respective 
Member State administration. 

Chapter  IV  includes  the  major  change  introduced  by  Directive  2008/118/EC:  the 
automation  of  the  supervision  of  movements  under  excise  duty  suspension  through  the 
Excise  Movement  and  Control  System  (EMCS).  EMCS  has  been  developed  and  is 
operated jointly by the national administrations and by the Commission,  with  the latter 
playing a central coordinating role. EMCS provides real-time monitoring of movements 
of  excise  goods  under  excise  duty  suspension  between  authorised  and  registered 
locations,  and  ensures  that  goods  can  only  be  dispatched  to  such  locations.  Chapter  IV 
has also added a new type of trader associated with a particular location, the ‘registered 
consignee,’ which can receive but cannot hold goods under excise duty suspension.. The 
Chapter also defines a new type of trader, the registered consignor, which can transport 
goods under excise duty suspension from a place of importation. 

Chapter V of the Directive (Articles 33-38)7 establishes the common rules for two types 
of  intra-European  Union  commercial  movements  of  excise  goods  on  which  duty  has 
already  been  paid (i.e. released  for  consumption):  consignments  between  traders (B2B) 
and the distance selling of excise goods to a private individual in another Member State 
(B2C).  These  arrangements  are  of  particular  interest  to  SMEs  that  cannot  meet  the 
financial requirements of tax warehouse authorisations and of running EMCS. 

Articles  33  and  34  of  the  Directive  set  out  the  requirements  for  movements  between 
traders  (B2B),  and  stipulate  that  movements  are  to  be  covered  by  a  simplified 
administrative  accompanying  document  (SAAD),  the  detail  of  which  is  set  out  in 
Regulation (EEC) No 3649/92. 

Where  goods  have  been  released  for  consumption  in  one  Member  State  and  are  then 
moved to another Member State excise duty is paid in the Member State of destination, at 
the  rate  imposed  by  that  Member  State,  and  if  relevant,  the  trader  may  then  apply  for 
reimbursement of the excise duty already paid upon release for consumption. 

3.2. 

Results 

3.2.1.  Effectiveness and efficiency of Directive 2008/118/EC 

Duty suspended movements 

EMCS  replaces  a  paper-based  system  with  a  paperless  (electronic)  supervision  system, 
thereby removing administrative obstacles to the movement of excise duty goods across 
borders by minimising costs both for traders and for tax administrations, whilst providing 
better  tools  for  detecting  and  preventing  fiscal  fraud.  Since  its  introduction  between 
January 2010 and May 2015, over 13.6 million movements under duty suspension were 

7   Article 32 of Chapter V governs the arrangements for the purchase of alcohol, tobacco and mineral oils 
by  travellers  travelling  from  one  Member  State  to  another.  These  arrangements  replaced  the 
transitional  provisions  for  duty  free  allowances  for  intra-union  travel  in  Article  28  of  Directive 
92/12/EEC, which expired in 1999. Between 1999 and 2008 there were no Union-wide guide levels. 
These arrangements were not included in the scope of the evaluation studies. 

5 

 
                                                 
recorded, 98.1% of which were completed without incident or requiring further manual 
intervention. 

Member States  are convinced that EMCS has  reduced costs by reducing the amount of 
time needed to administer documents, as evidenced below in Table 1. 

Table 1: Time taken to process a typical movement before (paper based system) and 
after the introduction of EMCS during 2014 (computerised system)8 

Member 

State 

Time per movement (paper-based 
procedure) 

Time per movement (EMCS) 

No data 

30 min. 

6 min. 

120 min 

30 min. 

20 min. 

5 min. 

10 min. 
09 

6 min. 

9 min. (0.15 hrs) 

No data 

3-5  hrs  (for  alcohol);  0.5  hr  (for  other 
goods) 

3-5 hrs (for alcohol); 0.25 hrs (for other 
goods) 

No data 

3 min. 

SK 
Source: Duty suspension evaluation 2015, Ramboll 

60 min 

0 

1 min. 

10 min. 

BG 

CZ 

FI 

HU 

LT 

LV 

PL 

RO 

SI 

As a result of the reduction in time required to process movement information EMCS has 
reduced the overall administrative costs for many Member States.10   

Extrapolating from the collected data and applying the EU Standard Cost Model, in 2014 
alone, EMCS has resulted in annual savings of between EUR 27.5 million and EUR 37 
million  (depending  of  the  job  profiles  of  the  persons  involved).11  Member  States  have 
also reported that the elimination of paper and the associated increase in efficiency have 
freed  up  resources  to  focus  on  higher-risk  movements,  and  improve  control  of 
movements. 

The main benefits for traders are a reduction of time needed to process excise documents, 
the  ability  to  follow  up  movements  (for  both  consignor  and  consignee),  and  the 
facilitation of auditing and control through more efficient  and higher-quality movement 
documentation. The study did not quantify these benefits. 

8 With the exception of Finland none of the Member States from before the 2004 enlargement were able to 
provide  comparison  data.  The  newer  Member  States  set  up  the  paper  based  system  in  the  years 
immediately before 2004 and therefore have relatively recent estimates available. There is no reason to 
assume that the results would be significantly different for the pre-2004 Member States 

9 0 here means that the process is normally completed automatically. 

10  The  average  time  saved  in  hours  per  movement  was  reported  to  be  35  minutes  (0.59  hours).  In  2014 
alone,  the  EMCS  is  estimated  to  have  saved  more  than  1  267  026  hours  (about  720  full-time 
individuals,  assuming  8  working  hours  per  working  day  and  220  working  days  per  year)  for  those 
administrations of the Member States which reported a positive change.   

11  For  more  details please see:  Evaluation  of  current  arrangements  for  the  holding  and moving  of  excise 

goods under excise duty suspension, p. 53, or the accompanying Staff Working Document 

6 

 
                                                 
Both  large  and  small  businesses  benefit  from  EMCS,  although  for  large  businesses  the 
economies  of  scale  associated  with  the  electronic  system  were  more  advantageous. 
Traders  were  divided  on  whether  EMCS  reduced  costs  (41%),  increased  costs  (30%), 
made no difference (18%), or did not know (11%). These results are very similar to the 
results  of  an  earlier  survey  of  traders  reported  to  the  European  Parliament  and  the 
Council  in  2013,12  and  may  indicate  that  larger  operators  have  benefitted  more  from 
automation. 

Figure  2:  The  cost  impact  of  EMCS  compared  to  the  previous  paper-based 
arrangements (Number of respondents=228) 

Source: Duty suspension evaluation 2015, Ramboll 

Business to business duty paid movements 

In contrast, evidence suggests that the current Chapter V 'duty paid' arrangements impose 
a  substantial  burden  on  businesses  and  are  not  compatible  with  the  objective  of 
encouraging the free movement of goods within the single market, due to the continued 
use  of  paper-based  procedures,  and  variation  in  the  approaches  taken  by  Member 
States13.  Traders  who  used  the  duty  paid  arrangements  reported  a  mean  time  of  221 
minutes per movement taken up by compliance formalities14   

In the study on 'duty paid' arrangements administrations were asked to identify the most 
resource-consuming aspects of the administration of duty paid movements. 10 out of 12 
Member  State  administrations  perceived  the  paper-based  system  as  being  more 
burdensome and time-consuming than automated or electronic processes, the other 2 did 

12 COM (2013) 850 and SWD (2013) 490. 

13 See point 4.4 

14  Source:  Table  19,  Duty  paid  evaluation  2015,  Ramboll.  The  majority  of  traders  reported  that  dealing 
with  formalities  required  less  than  1  hour  per  movement.  However,  the  data  shows  a  number  of 
extremely high figures for time, probably caused by a lack of common procedures. 

7 

 
 
                                                 
not  express  an  opinion.    Three  Member  States  were  able  to  provide  some  approximate 
estimates  on  time  spent  to  handle  one  average  business-to-business  (B2B)  movement. 
Average  processing  time  varied  between  4  and  8  hours  depending  on  the  nature  of  the 
consignment.  This compares with a few minutes on average for the administration of an 
EMCS movement. 

Other  practical  problems  reported  were  variations  between  national  requirements  (e.g. 
documentary  requirements  for  reimbursement)  as  well  as  a  lack  of  clear  information 
about national procedures, leading to discriminatory situations for businesses. 

Well  over  half  of  the  B2B  traders  surveyed  had  already  chosen  not  to  move  their 
products  between  Member  States  due  to  the  current  arrangements.  The  main  reasons 
cited  were  high  administrative  burden  and  associated  costs  (36  traders  out  of  44  who 
replied) and unclear requirements leading to legal uncertainty (21 traders out of 44).The 
majority of traders considered the B2B duty paid arrangements to be more burdensome 
than using EMCS.  

Duty paid distance selling (business to consumer) 

For  distance  selling  traders  report  that  the  costs  associated  with  using  a  tax 
representative,  required  by  most  Member  States,  are  a  significant  barrier  to  market 
access. The fees charged for such tax representation services can in some cases exceed 
the  charges  raised  by  postal  and  express  courier  services  for  customs  clearance  of 
packages  from  third  countries.  A  number  of  traders  reported  that  in  some  cases  it  was 
easier  to  sell  products  to  third  countries  than  to  distance  sell  to  consumers  in  other 
Member States. 

It is almost impossible to distance sell alcohol into some Member States at a reasonable 
cost,  comparable  with  the  distance  selling  of  other  goods.  Tax  representative  services 
were generally only offered by large shipping companies who were ill-equipped to deal 
with  small  consignments  (typically  6  or  12  bottles),  and  would  either  refuse  to  offer  a 
service, or charge an unfeasibly high fee, as indicated below in Table 2. 

Table 2: Costs of tax representatives for distance selling 

Country  of  dispatch  – 
country of destination  

Reported average cost of tax representative (excluding 
duties and cost of wine, except where indicated) 

FR to NL 

FR to BE 

FR to BE 

FR to UK 

BE to UK 

30-100 EUR per declaration, excluding transport 

20-40  EUR  per  consignment  (service  company  including 
and transport; minimum 12 bottles) 

40-70 EUR per consignment 

60 EUR per consignment (for an order of 12 bottles) 

100 GBP per declaration (excluding transport) 

Source: Duty paid evaluation 2015, Ramboll 

8 

 
 
3.2.2. Coherence of excise and customs arrangements 

By value one third of all excise goods produced in the European Union are exported15. 
Nevertheless,  the  indirect  exportation  of  excise  goods  is  confronted  with  a  number  of 
technical and legal problems. 

The evaluation assessed the coherence of the current arrangements for the movement of 
goods  under  excise  duty  suspension  with 
the  corresponding  customs  export 
arrangements.  It  can  be  concluded  that  there  is  scope  to  optimise  the  harmonisation  of 
procedures.  Overall,  both  Member  State  authorities  and  traders  agreed  that  problems 
exist with the exportation of excise goods. The procedures for importing excise products 
were also a concern to Member States, but were shown to create less practical issues for 
traders.  Despite  this  both  traders  and  the  Member  State  authorities  stressed  that  the 
introduction  of  EMCS  had  facilitated  coordination  between  excise  and  customs 
procedures.  Compared  with  the  previous  paper  based  systems,  EMCS  had  improved 
coordination. 

Export:16  Member  State  authorities  and  traders  recognise  the  absence  of  coherence 
between the excise and export procedures as being problematic. 22 of 27 Member States 
(80%)  were  of  the  opinion  that  the  current  arrangements  for  the  movement  of  excise 
goods  under  suspension  were  not  coherent  with  the  arrangements,  obligations  and 
procedures  applicable  to  customs  operations  and  export.  Firstly,  export  movements 
should be closed in EMCS based on an electronic exit message from the customs Export 
Control System (abbreviated as ECS).  This message is often not received from customs 
and  the  movements  has  to  be  examined  and  closed  manually.    Secondly,  even  if  the 
message is received, some exporters do not provide a reference in the export declaration 
to the Administrative Reference Code (ARC) of the matching e-AD, making it difficult 
or  impossible  for  the  system  to  apply  the  exit  results  to  the  correct  e-AD.  These 
weaknesses translate into increased administrative costs,. Consequently the advantages of 
process automation are lost, because movements have to be closed manually by matching  
exit results from ECS to e-ADs from EMCS. Where there is no match the consignor has 
to be asked to provide an alternative proof of exit, or risk losing the movement guarantee. 
In 2014 France reported that they had to close 12 000 export movements manually. 41% 
of traders recognise the absence of coherence between the excise and export procedures 
as being a problem. The respondents stated they were not satisfied with the coordination 
between excise and customs procedures.  

15  The  estimate  above  is based on  Eurostat statistics  on  the  export  of  excise  goods.  The statistics  do  not 
distinguish between direct (only involving one country) and indirect export (where goods travel over 
the  territory  of  more  than  one  Member  State  before  exiting  Union  territory).  The  Directive  is 
principally  concerned  with  export  supervision  involving  more  than  one  Member  State.  For  direct 
export  the  detailed  arrangements  are  a  national  matter  and  the  use  of  EMCS  and  ECS  is  not 
compulsory. Because there is no Union consignee, the indirect export of excise goods moving under 
Chapter V duty paid arrangements is not provided for.  

16 For more details on how EMCS and the Export Control System are supposed to coordinate please see: 
“Evaluation  of  current  arrangements  for  the  holding  and  moving  of  excise  goods  under  excise  duty 
suspension” pp 116-117 

9 

 
 
                                                 
Figure  3:  Main  issues  with  coordination  between  excise  and  customs  export 
procedures (Number of respondents=64 ) 
0%

100%

20%

40%

60%

80%

92% 

70% 

41% 

Non-closure of the excise movement increases
risk of tax liability (N= 59 )

Non acceptance of alternative proofs of exit
increases compliance costs (N= 45 )

Variation in national “workarounds” increases 
compliance costs (N= 26 ) 

Uncertainty in the case of fall-back arrangements
increases compliance costs (N= 11 )

17% 

The variation between national procedures
increases the risk of fraud (N= 5 )

8% 

Other  (N= 8 )

13% 

Don’t know / not applicable (N= 1 ) 

2% 

Source: Duty suspension evaluation 2015, Ramboll 

 Importation:  Importation  for  excise  purposes  occurs  when  goods  which  have  entered 
the  European  Union  from  a  third  country  are  not  placed  under  a  customs  special 
procedure or external transit, or are released from customs supervision. This entails the 
payment of customs duty, but also the payment of excise duty and VAT, unless the goods 
are  immediately  put  under  an  excise  duty  suspension  arrangement  (holding  in  a  tax 
warehouse or dispatched from the place of importation under excise duty suspension). If 
the final consignee is in another Member State a movement under excise duty suspension 
must take place under the supervision of EMCS.  

Traders  expressed  fewer  concerns  over  the  arrangements  for  importation,  with  17% 
having  some  concerns,  mainly  due  to  national  variations  in  reporting  requirements 
causing  increased  costs.  On  the  other  hand,  19  out  of  27  Member  States  expressed 
concerns  about  the  lack  of  coherence  between  import  procedures  and  the  handover  to 
EMCS,  indicating  that  further  harmonisation  of  procedures  might  help  to  alleviate 
administrative burden and compliance costs. 

Customs transit after export17 

Some operators prefer to avoid having excise and customs procedures for indirect exports 
running in parallel by using transit procedures to replace them before the goods leave. In 
such a case, the export procedure is closed by the transit procedure, which starts at the 
Office of Exit18, doubling as a transit Office of Departure, which is not located at or near 

17 Transit is a customs special procedure which allows the computerised supervision of the  movement of 
goods using NCTS from one place (departure) to another (destination) within the customs territory of 
the  union.  Transit  is  normally  used  to  move  non-union  goods  from  a  place  where  goods  enter  the 
European  Union  to  a  place  where  it  is  more  convenient  to  clear  the  goods  for  free  circulation.  This 
possibility is covered by excise legislation. Additionally, in practice the export of goods is sometimes 
ended  before  the  goods  leave  the  EU  and  supervision  is  handed  over  to  transit.  Customs  special 
procedures  were  previously  called  ‘customs  suspensive  procedures  or  arrangements’  in  the 
Community Customs Code 

18 The customs office of exit is normally the location of a customs authority at or near a frontier, seaport, or 
airport,  which  certifies  that  goods  have  left  the  customs  territory  of  the  European  Union  and  that 
therefore  the  export  of  the  goods  has  been  completed.  Article  329  of  the  UCC  Implementing  Act 

10 

 
                                                 
the physical place where the goods leave the Union. The goods are then moved under the 
supervision of the NCTS transit system to the place of exit. The transit is discharged as a 
result  of  a  transit  results  message  set  from  the  Office  of  Destination  to  the  Office  of 
Departure.  This is considered to be a trade facilitation because it allows for the transport 
of goods to a central hub under the export procedure, the closure of this procedure and 
subsequent regrouping and export under the transit procedure. 

However,  the  aggregated  stakeholder  perceptions  show  that  this  is  not  a  satisfactory 
solution. Furthermore, there is no clear legal basis in excise legislation for the use of a 
transit procedure following an export procedure, and goods transported in such a way are 
from  a  legal  point  of  view  released  for  consumption  irregularly  if  the  corresponding 
export  procedure  is  closed  when  the  transit  procedure  starts,  i.e.  before  the  goods 
physically leave the European Union customs territory. 

Of 27 Member States, 11 reported that the combination of an export procedure followed 
by a transit procedure caused problems. Such a procedure either requires manual closure 
of the EMCS movement or in some Member States the closure of the export  procedure 
and  subsequently  EMCS  is  automatically  triggered  once  the  transit  starts,  even  though 
the  goods  are  still  moving  within  the  European Union  under  the transit  procedure. The 
information  in  the  EMCS  is  no  longer  accurate,  as  the  goods  only  actually  leave  the 
European Union once the transit procedure is completed.  

40%  of  the  respondents  who  exported  excise  duty  goods  reported  using  this  procedure 
(45% did not, and 15% did not know if this procedure was used). They listed advantages 
with  regard  to  the  time  and  costs  saved,  and  to  an  improved  ability  to  monitor 
movements. But they also noted that there were problems in terms of the coordination of 
information across the excise and transit procedures. Procedures that combined an export 
procedure with a transit procedure for the export of excise products caused problems for 
26% of respondents that used them. 

3.2.3.  Relevance 

Chapter III and IV of Directive 2008/118/EC: 

19 Member  States  believed (agreeing or  strongly agreeing)  that  there is still a need for 
EMCS in their country, despite the evolution in certain types of fraud. Only one Member 
State  disagreed,  while  the  rest  of  the  respondents  did  not  know,  or  neither  agreed  nor 
disagreed. The need for the EMCS is confirmed by Member States and traders that call 
for widening the scope of the EMCS to include lubricating oils and raw tobacco in order 
to  avoid  fraud.    Member  States  expressed  the  need  for  analysing  the  functional 
specifications  of  EMCS  and  to  continue  its  development  which  would  include  the 
automation  of  “duty-paid  movements”.    They  noted  that  the  evolution  in  the  types  of 
fraud does not reduce the need for the EMCS but that EMCS needs to be strengthened. It 
was recognised that whatever EMCS changes are proposed, they need to strike a balance 
between “fraud prevention and trade facilitation”, so as to maximise the benefits of the 
EMCS. 

allows  other  locations  within  the  territory  to  be  treated  as  an  office  of  exit,  thereby  completing  the 
export before the goods physically exit the territory. This may or may not close EMCS automatically, 
depending on the Member State. 

11 

 
                                                                                                                                                 
16 Member States out of 27 agreed that similar results relating to the fight against fraud 
could  not  have  been  achieved  without  EU  action  (i.e.  through  a  national,  bilateral  or 
international initiative). 

Chapter V of Directive 2008/118/EC 

The Commission believes that there is a continuing need for a Union wide framework for 
the  movement  of  goods  between  businesses  under  the  duty  paid  procedure,  in  order  to 
avoid  double  taxation.  However,  the  Commission  supports  the  conclusion  of  Member 
States  and  traders  that  the  duty  paid  arrangements  in  Chapter  V  are  not  sufficiently 
effective and efficient, 

3.2.4.  EU added value 

For  the  traders,  the  main  benefits  of  a  common  EMCS  system  relate  to  a  reduction  of 
time  needed  to  process excise  documents  the  ability  to  follow  up  movements  (for  both 
consignor  and  consignee),  and  the  facilitation  of  auditing  and  control  through  more 
efficient and higher-quality movement documentation. 

Overall,  the  current  arrangements  provide  a  clear  and  consistent  framework  for  the 
holding  and  movement  of  excise  goods.  There  are  a  limited  number  of  areas  where 
differing interpretations by Member States lead to variations in national rules and create 
uncertainty for traders. For example, the rules on liability for excise duty in the event of 
shortages  are  currently  a  source  of  confusion  and  need  to  be  clarified.  The 
communication  mechanisms  available  between  traders  and  competent  authorities  when 
exceptional  situations  occur  need  to  be  improved,  either  through  the  use  of  an  existing 
functionality or the development of new functionality. 

Uniform rules for EMCS are essential for the proper functioning of the internal market. 
Harmonising  the  access  to  EMCS  by  providing  common  definitions  for  the  operators 
authorised  to  hold  and  move  goods  under  excise  duty  suspension  further  contributes  to 
this.  The  arrangements  have  generally  ensured  that  the  scope  for  discriminatory 
conditions  in  different  Member  States  has  been  limited.  Even  if  the  competence  to 
authorise  traders  to  hold  and  move  excise  goods  remains  a  national  one  there  is  little 
evidence of any significant barriers to market access.  

Traders reported that the main benefits of EMCS are related to the ability to follow up 
movements  (for  both  consignor  and  consignee),  thereby  making  it  easier  to  audit  their 
own activities, and to monitor the effectiveness and efficiency of their own arrangements 
in meeting fiscal obligations. 

In  general,  administrations  and  traders  felt  that  the  advantages  of  common  action  at  a 
European  level  concerning  business  to  business  transactions  (B2B)  were  limited  by  a 
lack of legal and technical clarity and national variations. In the case of distance selling 
the  current  arrangements  had  little  or  no  EU  added  value  because  of  the  lack  of 
harmonisation. Some traders reported that the arrangements were as burdensome, or even 
more burdensome than arrangements for the export of goods to third countries. 

Areas where further harmonisation might be useful are covered in Section 4 

12 

 
4. 

ISSUES WARRANTING FURTHER ATTENTION 

The  suggested  improvements  may  be  achieved  by  the  planned  amendment  to  Directive 
2008/118/EC  and  its  implementing  regulations  as  foreseen  in  the  Commission  Work 
Programme. 

4.1. 

Authorisations 

Directive 2008/118/EC establishes common EU-level definitions of the different types of 
trader  authorised  to  hold  and  move  excise  goods  under  duty  suspension.  These 
definitions contribute to a clear and consistent framework for the holding and movement 
of excise goods, and ensure an equal treatment of businesses. 

The  requirements  for  authorisations  to  hold  and  move  excise  goods  and  for 
simplifications  vary  between  Member  States.  The  requirements  for  authorisations  are 
complex.  This  can  create  obstacles  for  traders  and  make  the  application  process  more 
time-consuming  than  necessary.  For  example,  when  traders  were  asked  about  the  rules 
for  calculating  authorisation  guarantees19,  many  operators  said  that  they  did  not  know 
what they were (24%). Analysed by Member State the data showed that operators from 
the  same  countries,  operating  in  the  same  sector  were  sometimes  given  contradictory 
information.  For  example,  operators  active  in  Germany  (the  Member  State  with  the 
highest participation in the survey) stated that their warehouse guarantees were calculated 
on  the  basis  of  annual  turnover  (34%),  monthly  turnover  (3%),  annual  excise  liability 
(16%)  and monthly  excise  liability (21%).  This suggests  that some of the requirements 
and provisions are highly complex. 

The complexity of accessing and understanding the provisions was also underlined in the 
case  studies.  Stakeholders  from  four  Member  States  reported  that  traders  often  did  not 
submit  complete  applications,  which  required  additional  unnecessary  work  for  the 
competent authorities. 

In most Member States, operators have to lodge both a movement guarantee in order to 
secure  the  excise  debt  for  the  movement  and  an  authorisation  guarantee  to  cover  the 
activities of the tax warehouse or the registered consignors and consignees.  Guarantees 
are  handled  nationally.  Traders  considered  these  to  be  significant  burdens,  despite  the 
fact that reductions and waivers of guarantees are widely implemented in order to support 
smaller  operators,  particular  products  and  tax-compliant  operators.    Waivers  are  only 
allowed in specific circumstances laid down in Directive 2008/118/EC. 

4.2. 
fraud20  

Handling  of  shortages,  excesses,  other  exceptions  and  the  fight  against 

Since the evaluation study was completed the European Court of Justice has rendered a 
judgement on Articles 10 and 20 of the Directive which clarifies, amongst other things, 

19 Guarantees, if requested,  have to cover the risk inherent in the production, processing and holding of the 

excise goods.  They are handled nationally. 

20  For  more  details please  see:  Evaluation  of  current  arrangements  for  the  holding  and moving  of  excise 

goods under excise duty suspension, p. 75 – 87. 

13 

 
                                                 
when  a  movement  has  ended.21  The  provisions  of  Article  20(2)  of  the  Directive,  by 
stating when the movement of excise goods under a duty suspension arrangement ends, 
seeks  to  define  the  time  at  which  those  goods  are  deemed  to  have  been  released  for 
consumption  and  to  determine  when  duty  on  those  goods  becomes  chargeable.  This  is 
even  more  important  in  cases  of  finding  of  shortages  on  delivery  of  excise  goods. 
Nevertheless  the  procedure  for  making  claims  for  shortages  is  unclear.  Claims  against 
traders  are  covered  by  the  provisions  of  Directive  2010/24/EU22  (the  Recovery 
Directive),  but  the  use  of  the  instruments  provided  by  the  Recovery  Directive  among 
between Member States varies. In some cases they are not used at all. There is no clear 
basis  for  linking  recovery  instruments  with  a  previous  establishment  of  an  excise  duty 
liability.  The  EMCS  specifications  23provide  a  means  of  communication  between 
Member States and traders to establish what liabilities there might be but this facility is 
little  used.   EMCS also  provides  a message  for claiming duty  that  should  be sent from 
claiming  Member  States  to  the  Member  State  of  Dispatch  that  is  responsible  for 
guarantee management, but this message is as well rarely if ever used. 

Some traders complained that they cannot amend details of the electronic administrative 
document (e-AD) once it had been accepted by the Member State of Dispatch, leading to 
disputes  about  quantities  and  excise  duty  payable.  The  consignor  can  send  an  EMCS 
event  report  to  the  Member  State  of  Dispatch  indicating  the  mistake.  The  primary 
purpose  of  the  event  report,  however,  is  to  allow  traders  to  report  major  incidents  that 
occur during a movement and little use is currently made of this possibility. In 2014 only 
1 160 event reports were sent between Member States, or in approximately 0.04% of the 
2.95  million  EMCS  movements  made  in  that  year.  However there is no legal reporting 
obligation. 

Change  of  destination  following  the  rejection  or  refusal24  of  a  consignment:  Member 
States  have  agreed  in  an  expert  group  that,  when  goods  are  rejected  or  refused,  the 
consignor should issue a change of destination to have the consignment returned to the 
place  of  dispatch  or  to  a  new  consignee..  This  should  become  a  legal  obligation.    A 
further improvement would be if the consignor was obliged to take follow up action in 
the event that a rejection or refusal message is sent.  Two suggestions were submitted for 
reducing  these  problems:  firstly  the  specifications  should  be  supported  by  a  legal 
obligation  to  send  rejection  and  refusal  messages  and  secondly  a  legal  base  should  be 
created  so  that  a  refusal  or  rejection  message  is  automatically  followed  by  a  change  of 
destination back to the consignor. 

21 Judgment of the Court (Sixth Chamber) of 28 January 2016 (request for a preliminary ruling from the 
Bundesfinanzhof — Germany) — BP Europa SE v Hauptzollamt Hamburg-Stadt (Case C-64/15) OJ 
2016/C 106/11. 

22  Council  Directive  2010/24/EU  of  16  March  2010  concerning  mutual  assistance  for  the  recovery  of 
claims  relating  to  taxes,  duties  and  other  measures,  Official  Journal  of  the  European  Union  L  84/1,  
31.3.2010 

23 EMCS specifications are documents which describe the requirements for the EMCS system centrally and 
nationally and how those requirements are met at a high level (the so called Functional Excise Systems 
Specifications or FESS) and more detailed description contained in a number of different documents. 

24  In  this  context  ‘rejection’  of  a  consignment  refers  to  a  decision  by  the  consignee  to  not  accept  a 
consignment  of  goods  that  are  at  the  place  of  dispatch,  or  are  moving  from  the  place  of  dispatch. 
‘Refusal’ refers to a decision not to accept goods that have arrived at a place of destination. 

14 

 
                                                 
EMCS  is  generally  believed  to  have  reduced  fraud.  The  major  problems  identified  by 
Member States were the entry of excessively long journey times by traders and a lack of 
certain data in the e-AD, such as the ownership of the goods at dispatch and destination, 
which could assist in risk analysis 

4.3. 

Coordination between customs and excise procedures 

As  mentioned  above  the  large  numbers  of  unclosed  movements  in  the  case  of  indirect 
export of excise goods continues to be a matter of concern. A clear legal base for transit 
and  better  harmonisation  of  the  rules  for  the  treatment  of  imported  excise  goods  might 
also be useful 

4.4. 

Duty paid procedures aimed at Small and Medium Enterprises  

The arrangements for duty paid movements between companies, of particular interest to 
small  and  medium  enterprises,  do  not  function well,  and  are  a source  of  administrative 
burden  and  high  trader  compliance  cost  as  well  as  a  potential  source  of  fraud.    Paper 
based  documents  have  to  be  sent  back  to  the  Member  State  of  dispatch.    Only  upon 
arrival of this document a refund in the Member State of dispatch may take place.  Paper 
based documents may potentially be used fraudulently several times because there is no 
legal time limit to send them back.  

The  arrangements  for  the  distance  selling  of  excise  goods  are  even  worse,  with  the 
generalised use  of tax representatives  making legitimate commercial  business unviable.  
However, the Commission proposes to solve the problem only when the VAT One stop 
shop  for  distance  selling  will  be  agreed  upon.    The  abolition  of  the  only  tax 
representative would not reduce the burden for traders since they need as well to register 
for VAT in the Member State of consumption. 

5.  CONCLUSIONS AND FOLLOW UP 

In the light of the findings of the two studies and of the evaluation SWD(2017)xxx, the 
Commission draws the following conclusions: 

Arrangements  for  the  holding  and  movement  of  excise  goods  should  not  distort 
competition,  hinder  the  free  movement  of  such  goods  within  the  EU,  nor  should  such 
arrangements hinder tax collection or facilitate fiscal fraud.  

Overall, the current arrangements for the holding and movement of excise goods under 
excise duty suspension work in an effective and efficient way, and in a way which could 
not  be  achieved  without  Union-wide  action.  There  are  nevertheless  some  issues  which 
still need to be resolved, particularly the coordination of excise and customs procedures, 
where  there  are  significant  levels  of  legal  uncertainty  and  considerable  scope  for 
improving  the  coordination  of  technical  procedures.  Finally,  while  the  introduction  of 
EMCS for the supervision of movements of excise goods under duty suspension helps to 
improve the collection of excise duty, there are a number of possible legal and technical 
changes that would further reduce evasion and fraud. 

The  arrangements  for  moving  goods  already  released  for  consumption  to  another 
Member  State  are  much  less  satisfactory:  current  arrangements  are  inefficient, 
insufficient to provide for the free movement of excise goods and potentially open to tax 
evasion  and  fraud.  This  is  a  particular  issue  for  Small  and  Medium  Enterprises,  who 

15 

 
make  the most use of these arrangements.   The use  of EMCS for duty  paid procedures 
would  streamline  this  type  of  trade,  render  rules  more  transparent  and  clear  and  would 
enable  traders  to  recover  easily  and  quickly  the  duty  paid  in  the  Member  State  of 
dispatch. 

Follow up: 

(1) 

(2) 

(3) 

(4) 

(5) 

The Commission will examine possible legal and technical improvements to the 
treatment of irregularities and the handling of claims by Member States 

The  Commission  will  explore  whether  it  would  be  useful  to  propose  a  less 
burdensome regime than either EMCS or the SAAD system for the movement of 
excise goods of low fiscal risk, such as denatured alcohol, flavourings, perfumes 
and certain energy products 

The  Commission  will  examine  legal  and  technical  changes  to  the  arrangements 
used for the supervision of the import, export and transit of excise goods 

The Commission will analyse the partial or full automation of the duty paid B2B 
arrangements with a view to reducing administrative burden and compliance costs 
on traders and Member States 

The Commission will look for a way forward for improving the arrangements for 
the cross border distance selling of excise goods. 

The Commission will take these conclusions into account in its preparations to revise the 
Directive as set out in the Commission Work Programme 2017 (COM(2016) 710 final, 
ANNEX 2). Such a revision will involve carrying out an open public consultation and an 
Impact Assessment. 

16