REPORT FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT AND THE COUNCIL on the IT strategy for customs
Date: 2018-04-11
Institutions: Directorate-General for Taxation and Customs Union, European Commission
Subjects: EU financing, EU strategy, customs cooperation, customs union, exchange of information, information system, information technology, simplification of formalities

EN 

  EN 

   EUROPEAN COMMISSION  Brussels, 11.4.2018  COM(2018) 178 final  REPORT FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT AND THE COUNCIL on the IT strategy for customs  
 
 
1. 

INTRODUCTION 

its  communication  of  21  December  2016 

(the  Governance  Communication)1  
In 
the  Commission  recalled  the  fundamental  objective  of  the  Union  Customs  Code  (UCC)2  to 
create  seamless  and  efficient  customs  processes  across  the  Union  based  on  harnessing 
the  power  of  digital  tools.  Customs  is  to  become  fully  paperless.  The  aim  is  to  facilitate 
legitimate trade, and at the same time to enable customs administrations to ensure compliance. 

In the Governance Communication, the Commission also outlined the challenges facing the 
Commission and Member States in providing cost effective IT solutions across the EU in 
support of the Union's customs legislation. In response to those challenges the Commission 
suggested a review of the architecture, management and funding of IT customs networks and 
databases 
networks. 
It also proposed assessing the value added and possible long-term benefits of establishing 
a  permanent  structure  to  manage  IT  infrastructure  including  possible  synergies  with 
existing agencies in the context of preparing the next Multiannual Financial Framework. 

relationship 

other 

their 

with 

and 

EU 

This  was  taken  up  in  the  Council  during  2017  and  discussions  have  led  to  further  Council 
conclusions on 7 November 2017 in which the Commission and Member States were invited 
to implement the UCC IT Work Programme as a top priority and to explore more thoroughly 
new approaches to develop and operate Customs IT systems. 
In May 2017 however the Council had already invited the Commission to report3 by the end 
of 2017 on progress made in assessing the permanent structure issue. This specific invitation 
has  to  be  seen  in  the  context  of  the  Council's  other  invitations4  to  the  Commission  and 
Member  States  to  develop  together  a  comprehensive  strategy  for  customs  IT.  The  relevant 
Council invitations are: 

  "to  develop  a  strategy  for  the  architecture,  development  and  funding  of  Customs  IT-
Systems taking into account the responsibilities between the Commission and the Member 
States  for  the  development  of  IT  systems  required  for  the  implementation  of  the  EU 
legislation." (by end 2017) 

  "to develop a comprehensive mid and long-term strategy for customs IT systems to enable 
effective  implementation  of  the  UCC  and  to  develop  fully  digital  customs  based  on  the 
added  value  of  the  individual  systems,  including  considering  the  use  of  a  permanent 
structure  to  manage  the  IT  infrastructure,  while  taking  into  consideration  the  already 
developed or deployed IT systems." 

This report constitutes the Commission's reply to the invitation of the Council to report 
on  progress  in  relation  to  its  request  on  the  “permanent  structure”    and  includes  an 
explanation  of  the  current  delivery  approach  to  follow-up  on  implementation  of  the 

1  Communication  from  the  Commission  to  the  European  Parliament,  the  Council  and  the  European  Economic 
and Social Committee Developing the EU Customs Union and Its Governance, COM(2016)813 final 
2 Regulation (EU) no 952/2013 of the European Parliament and of the Council of 9 October 2013 (OJ L 269, 
10.10.2013, p.1) 
3  Council  Conclusions  on  Developing  the  EU  Customs  Union  and  its  Governance,  7585/1/17  UD  82 
ENFOCUSTOM 83 
4 Council Conclusions on Customs Funding, 7586/17 UD 83 ENFOCUSTOM 84 

1 

 
 
 
                                                            
UCC.  It  also  seeks  to  inform  the  debate  that  will  come  on  the  Multi-annual  Financial 
Framework  by  setting  out  how  EU  level  financing  is  relevant  to  the  development  and 
operation of customs IT systems. 

Concerning the Council's invitation for the development of a mid and long-term strategy for 
the implementation of customs IT, the Commission is finalising  the analytical work that will 
inform its proposals for the next generation of funding programmes, in particular to cover EU 
level  funding  of  customs  and  taxation  IT  activities.  This  work  will  have  an  impact  on  the 
strategy  options.  These  proposals  should  be  made  during  2018  and  will  be  presented  in  the 
context of the preparation of the next Multi-annual Financial Framework.  

2.  EU CUSTOMS FRAMEWORK 

The EU is a major trading block dependent on the free flow of goods both into and out of the 
Customs  Union  complementing  the  free  movement  of  those  goods  within  the  area  of  the 
Single Market. In 2016 combined imports and exports represented approximately 3.5 trillion 
EUR underlining the importance of trade and of a seamlessly functioning Customs Union to 
the  prosperity  of  the  EU.  This  translated  into  nearly  300  million  import  and  export 
declarations (SAD – single administrative document).  

 Time  spent  in  processing  goods  through  customs,  and  the  speed  and  reliability  of  that 
processing, are critical productivity and competitiveness factors. Indeed, studies have shown 
that a 10% reduction in transit and processing time at customs can generate between 2.5% and 
5%  growth  in  trade  underlining  the  importance  of  well-designed  and  rapid  customs  control 
processes. 5 6 

The  EU  is  already  in  a  strong  position  on  the  basis  of  common  efforts  over  the  years  to 
strengthen  and  modernise  customs  processes.  Ongoing  work  on  the  UCC  and  its 
implementation aims to further reinforce the EU's strength in this area. 

5  OECD  Trade  Policy  Papers  21,  42,  118,  144  and  150  and  157  and    Djankov,  Simeon;  Freund,  Caroline  & 
Pham, Cong S.: "Trading on Time", World Bank / Doing Business, (2006 and 2008) :  Report (2008, modified in 
2010) 
6 Hummels, David (2001). Time as a Trade Barrier, Working Paper. Purdue University, USA 

2 

 
 
 
 
 
 
 
 
 
 
 
 
                                                            
EU  customs  law  is  codified  in  the  UCC  (and  related  acts  and  supported  by  an  IT  Work 
Programme7)  and  is  directly  applicable  in  the  Member  States  reflecting  the  exclusive 
competence  of  the  EU  in  this  area.  Customs  authorities  apply  the  same  basic  rules  and  all 
Member  States  are  dependent  on  the  others  to  play  their  part  in  revenue  collection  and 
regulatory protection. This interdependence requires close co-operation. 
At present, customs IT and policy in the EU is based on the "e-customs decision"8 adopted by 
the  Council  and  the  European  Parliament  in  2008  and  the  provisions  of  the  UCC.  The 
eCustoms  Decision  sets  out  the  basic  principles  under  which  Member  States  and  the 
Commission  work  together  on  the  development,  building  and  operation  of  the  systems  that 
underpin  customs  operations.  These  systems  cover  the  various  customs  processes  including 
declaration  processing,  goods  movements  and  information  flows  between  administrations. 
They also include some common databases. 

It  is  this  "e-customs"  policy  which  has  driven  the  current  state  of  development  
of customs IT and which is guiding the current finalisation of the 17 different initiatives that 
have been established in the UCC Work Programme9. It is based on the notion that the various 
IT elements are divided into Union and non-Union components which together go to make up 
the IT ecosystem. 

7    Commission  Implementing  Decision  (EU)  2016/578  of  11  April  2016  establishing  the  Work  Programme 
relating to the development and deployment of the electronic systems provided for in the Union Customs Code 
(OJ  L  99  15.4.2016  p.  6),  replacing  the  earlier  version  of  the  Work  Programme  set  out  in  Commission 
Implementing Decision (EU) 2014/255 of 29 April 2014 (OJ L 134 7.5.2014, p. 46-53)  
8  Decision  No  70/2008/EC  of  the  European  Parliament  and  of  the  Council  of  15  January  2008  on  a  paperless 
environment for customs and trade (OJ L 23, 26.1.2008, p.21) 
9 Annex 1 provides the list of IT systems of the UCC Work Programme 

3 

 
 
 
                                                            
  The Commission develops agreed  Union components, funded by the Customs  2020 
programme10  11.  These  Union  components  may  be  built  to  a  centralised  model 
operated by the Commission or used in distributed systems operated by the Member 
States. Communication between systems across the Union is provided via the Union 
network component known as the CCN/CSI. The trans-European and central systems 
operated by the Commission for the Customs Union consist of some 30 inter-related 
systems,  for  which  security  and  performance  are  key.  In  2017  some  500  million 
messages  were  exchanged  in  systems  running  on  more  than  99%  availability  at  an 
annual cost of €70 million providing support to the rapid customs processes needed to 
support trade. 

  Non-Union  components  are  developed  and  operated  by  the  Member  States  and 
funded by them. This includes natural elements of distributed systems designed at EU 
level. These components must of course be in line with the UCC legal provisions. 

Using  this  framework  a  sophisticated  IT  ecosystem  has  been  built  up  over  the  years. 
It  is  mature,  fit  for  purpose  and  it  relies  on  adequate  EU  level  resourcing  of  the  Union 
components  on  which  Member  States  depend.  It  also  depends  on  Member  states  to  finance 
their part of the ecosystem and in particular the non-Union components. 

3.  THE CHALLENGES 

Despite  the  already  substantial  use  of  IT  to  underpin  existing  customs  processes  the  UCC 
represents  a  step  change  in  integration  and  potential  efficiency  gains.  This  is  because  
of  the  simultaneous  simplification  and  digitalisation  of  processes  needed  to  support  the  full 
integration  of  customs  across  the  EU.  Moreover,  implementation  imposes  costs  and  these 
costs  need  to  be  weighed  against  the  benefits  in  deciding  on  the  optimum  delivery 
mechanisms. 

3.1. 

Governance and architecture 

The  governance  of  the  IT  work  is  based  on  a  number  of  interacting  bodies  involving  the 
Commission,  the  Member  States  and  trade  interests,  notably  the  Customs  Policy  Group 
(CPG), the Electronic Customs Coordination Group (ECCG), the Trade Contact group (TCG), 
the  Business  Policy  Group  (BCG),  the  Risk  Management  Strategy  Implementation 
Coordination group (RIMSCO) and the Customs 2020 programme committee. 

The UCC implementation has shown that the process of designing and implementing customs 
IT  systems  across  the  EU  requires  time  and  effort.  The  nature  of  the  task  is  illustrated  by  
various hybrid arrangements where some Member States either opt to deploy local versions of 
central  systems  (often  driven  by  concerns  about  interaction  with  national  systems  and 
priorities) or insist on EU development of common solutions for non-Union components to be 
applied by those Member States only (often driven by cost considerations). 

10  Regulation  (EU)  no  1294/2013  of  the  European  Parliament  and  of  the  Council  of  11  December  2013 
establishing an action programme for customs in the European Union for the period 2014-2020 (Customs 2020) 
and repealing Decision No 624/2007/EC (OJ L 347, 20.12.2013, p.209) 
11  Also the funding partly is made by the anti-fraud information system (AFIS) 

4 

 
 
                                                            
The  UCC  drive  for  an  even  greater  level  of  integration  and  interoperability  of  customs  IT 
systems including increasing standardisation of the data elements and processes for the IT 
systems  adds  to  the  challenge  of  implementation.  In  this  context,  there  is  no  structural 
mechanism to assist Member States in difficulty in their implementation efforts. 

Long-term solutions to address customs needs will have to take into account the drive for an 
even  broader  interoperability  across  governmental  services,  in  order  to  achieve  the  full 
benefits expected from advanced data analytics 

This increasing cross-sector perspective on future IT policy is supported by the Digital 
Agenda12, with a vision of sharing common IT services and solutions. The governance and 
architecture will also have to tackle the continuous and rapid evolution of technologies, such 
as “blockchain”, and other innovations, which may well influence considerably the shape of 
IT structures to be put in place in the long-term and the optimal delivery mechanisms.  

The  governance  processes  thus  need  to  operate  in  a  framework  of  a  clear  and  accepted 
overall architecture for the customs IT ecosystem as only this can ensure coherence across 
the whole structure. It is in this context that Member States have expressed their views on the 
future challenges in both Commission and Council working groups during 2017. This report 
reflects the input during that period and establishes the current state-of-play. 

3.2. 

Funding issues and resources 

3.2.1  EU level (Union components) 

IT  systems  can  be  expensive  to  develop  and  to  operate.    The  Commission  has  a  budget  of 
some  €380  million  for  the  period  2015  to  2020  under  the  Customs  2020  programme 
underlining the scope and ambition of the UCC IT projects as well as the investment the EU 
has  already  made  in  setting  up  and  operating  IT  systems  supporting  customs.  The 
Commission  uses  these  funds  in  a  tightly  controlled  structure  with  a  network  of  external 
contractors  and  collaboration  agreements  with  Member  States.  The  current  Commission 
model is therefore optimised and heavily capitalising on the management of teams of external 
contractors. 

These  funds  go  towards  the  development  of  new  systems  and  the  operation  of  existing 
centralised  systems  and  networks  supported  by  dedicated  data  centres  involving  the  central 
Commission  IT  service  (DG  DIGIT)  and  the  Commission's  customs  policy  service  DG 
TAXUD.  As  the  role  of  IT  in  the  implementation  of  customs  policy  progresses,  the 
importance of the central role of the Commission services grows both in running central 
systems,  which  translates  into  day-to-day  real-time  operational  responsibilities  in  the 
execution of EU law, and also in co-ordinating the work of Member States. To work well, 
this requires adequate resources and a close partnership with Member States. 

3.2.2  Member State level (non-Union components) 

From  the  point  of  view  of  the  Member  States,  a  major  concern  is  the  cost  of  their  IT 
operations. Many are concerned about national components, which are being created 28 
times, and are thus delivering poor value for the taxpayer, due to the multiplication of 

12 A Digital Agenda for Europe COM(2010)245 final 19.05.2010 and corrigendum of 26.08.2010 

5 

 
 
 
                                                            
the  costs  involved.    For  some  Member  States  the  challenge  is  exacerbated  by  their 
dependence on commercial suppliers with whom they have insufficient purchasing power to 
obtain the best prices. 

There are also different perceptions of the financing aspects since not all Member States face 
the same volumes of traffic at import and export thus undermining their cost benefit analysis, 
where  they  are  based  on  purely  national  considerations.  In  addition,  although  all  Member 
States  receive  a  proportion  of  the  customs  duties  based  own  resources  they  collect  (20%), 
trade flows in and out of the Union tend to be concentrated in a number of locations. Thus, 
nearly  80%  of  import  declarations  are  made  in  only  three  Member  States.  This  also 
influences Member States' thinking. Last but not least, many customs administrations make 
the point that they do not fully benefit from the 20% intended to cover collection costs. 

It is clear that compared to the production of central, or even distributed systems developed 
by  the  Commission  in  partnership  with  the  Member  States,  the  costs  of  separate  and  un-
coordinated activities by the Member States are likely to be significantly higher. Indeed 
studies carried out for the Commission have led to the conclusion that major savings can be 
made if Member States collaborate on development, operations and maintenance of the order 
of 
of  
53% 
ten Member States are involved13. A complicating factor is that Member States have different 
business  models  for  producing  national  components  and  are  also  in  different  positions  in 
relation  to the weight of legacy  systems. Some Member States  have  substantial in-house  IT 
expertise while others rely more on third party providers. 

minimum 

between 

where 

and 

35 

a 

3.3. 

Policy constraints 

and 

their 

as  per 

the  UCC 

architecture 

These challenges have to be seen in the context of the need to deliver now on the systems 
its  work  programme. 
and 
While the bulk of the work will be completed by 2020 a small number of new systems will 
come on line after that date as will be the case for some extensions and upgrading of existing 
systems.  To  ensure  a  complete  and  fully  integrated  structure  across  all  Member  States  and 
including all systems, this work will most likely continue up to 2025. This also underlines the 
need  for  an  evolutionary  approach  to  minimize  risks  to  customs  processes  given  the 
importance of the existing IT ecosystem to  the  day-to-day operation of the Customs Union. 
The  current  overall  situation  in  relation  to  the  implementation  of  the  UCC,  including  the 
relevant  IT  systems  and  the  timing  of  their  delivery,  is  set  out  in  the  Commission's  recent 
report on the implementation of the Union Customs Code and on the exercise of the power to 
adopt delegated acts pursuant to article 284 thereunder.14 

4. 

IT SCENARIO FOR AN INTEGRATED CUSTOMS UNION 

Discussions with the Member States have emphasised the importance of a strategy for IT for 
customs in the EU should be based on a vision of the future and of longer term goals of digital 
customs as a basis for ongoing work.  

13 Strategic Framework for the collaborative realisation of EU Customs IT Systems: March 2014 
14 COM(2018)39 final of 22.01.2018 

6 

 
 
                                                            
Reactions have underlined the need for customs authorities provide an efficient and effective 
customs  service  applying  the  agreed  rules  in  a  consistent  and  coherent  fashion  across  the 
Union. 

To achieve this, customs controls will need to be based on a better harnessing of the power 
of  digitalisation  and  data  flows,  thus  creating  even  more  effective  risk  based  controls. 
This  can  allow  customs  authorities  to  focus  their  resources  and  if  applied  intelligently 
reduce the administrative burden for and rationalise inputs from legitimate trade. 

The pivotal role of customs for other policies that also have a border-crossing element can 
be  levered to  produce  positive  synergies  for  overall  regulatory  control,  in  a  future based  on 
high  degrees  of  interoperability  and  interconnectivity  between  IT  systems  and  co-
ordinated control approaches. 

A  logical  ultimate  goal  would  be  a  single  window  environment  guaranteeing  as  far  as 
possible a single coherent relationship with the various government actors, supported by 
a coherent regulatory control structure behind it. 

Such an environment supposes a high degree of data, information and intelligence sharing 
between  customs  authorities  and  between  those  other  authorities  and  other  regulatory 
agencies and departments. It also requires the systematic use of advanced data analytics 
and possibly other innovative technologies to support integrated control approaches that are 
largely  risk  based  and  built  on  wide  knowledge  of  the  risks  and  capacities  of  the  main 
commercial actors. 

Member  States  input  suggests,  that  the  role  of  customs  IT  systems  will  be  primordial  in 
ensuring successful policy outcomes and that they will be cost-effective, robust and reliable. 
This means being able to adapt to changing technology and business models. It will also be 
important to reap synergies with relevant already existing Pan-European IT systems. 

It  is  also  clear,  that  it  will  require  a  close  partnership  between  the  Commission  and 
Member States to ensure the best use of expertise and resources to deliver cost-effective IT 
solutions, be it in development or in systems operation. 

5.  POSSIBLE OPTIONS FOR A PERMANENT STRUCTURE 

Any change in business model beyond refining the current model will take time, in particular 
if this requires the setting up of new structures. A radical change in the current processes risks 
undermining delivery of the short and medium-term UCC IT projects. This would be highly 
undesirable and not in keeping with the Council's clear statement, that priority should be 
given  to  implementation  of  the  UCC.  This  reinforces  the  idea  that  the  current  reflection 
should concentrate on the longer-term. 

In the short term, the Commission will therefore need to continue to operate under the rules 
set  out  in  the  eCustoms  Decision  and  the  UCC,  and  in  line  with  the  Customs  2020 
programme.  With  this  in  mind,  it  has  strengthened  its  services  dealing  with  Customs  IT  to 
tackle the major activities that are the UCC IT projects and annual EU expenditure is running 
at  some  €70  million.  This  strengthening  includes  staff  reinforcement  for  DG  TAXUD  and 
new  arrangements  with  DG  DIGIT  to  optimise  synergies  between  the  services.  However 
further  development  on  this  basis  beyond  2020  will  depend  on  decisions  to  be  taken  in 

7 

 
 
 
relation to the successor programme to Customs 2020. A tentative timeline for this exercise of 
defining  a  new  model  and  its  components  is  set  out  in  annex  2  without  prejudice  to  future 
decisions on funding. 

If  the  current  model  is  to  change,  discussions  to  date  suggest  the  most  promising  avenue 
would  likely  involve  a  “shared  IT  supplier”  approach  through  an  entity/agency  or  other 
methods of collaboration. 

Any  such  approach  however  needs  to  recognise  the  reality  of  existing  IT  operations.  
In principle, such a supplier could develop full systems to hand over to Member States or the 
Commission or certain layers of IT development or operations, or indeed could be responsible 
for  full  development  and  operations.  To  illustrate  this  issue  of  the  so-called  "layers"  the 
diagram below sets out the main building blocks of the Commission (DG TAXUD) IT stack. 
It  is  clear  that  with  the  complexity  and  interdependence  of  the  component  parts  of  the  IT 
ecosystem assessing possible activities or parts of such activities for attribution to a shared IT 
supplier is a difficult process. It is also clear that the activities divide into a business agnostic 
part (below in orange) and a business specific part (below in green) which may influence the 
solutions to be applied particularly in considering potential cross-policy area synergies. 

5.1.  Shared IT supplier 

Various options have been examined without at this stage attempting a detailed  cost-benefit 
analysis; given the need to scope further the eventual coverage of any option in the light of 
reactions 
taken  place  
to-date, most notably in the High-Level Seminar in Tallinn on 28/29 September 2017 and the 
Council conclusions of 7 November 201715. 

from  Member  States 

the  discussions 

that  have 

in 

In all likely scenarios, the development and operation of IT systems would require a shared 
their  respective 
responsibility  between 
competences  for  legislation  at  EU  level  and  for  implementation  of  that  legislation 

the  Commission  and  Member  States  given 

15  See  agenda  of  the  ECOFIN  meeting of  7 Nov 2017  n° 13623/17  and the  A  Item  Note  n°13556/17 UD  240 
regarding the adoption of the Council conclusions. 

8 

Conception  layer –Management of Stakeholders, Business Needs, Modelling, User Experience, Documentation,TrainingApplication Software Layer –Development of New Information SystemsApplication Software Layer  -Operations and Maintenance of Existing Information SystemsSoftware Layer –Database and Middleware, Monitoring and Alerts Handling ToolsServers and Storage Layer –Servers, Storage Boxes, Operating SystemsData Centre Infrastructure Layer –Rooms, Power, Cooling, Racks, Cabling, Access SecurityNetwork  Infrastructure Layer –WAN  &  LANCommission (DG TAXUD)  IT  Stack  layersOverall Coordination, Quality Assurance, Quality Control Management, Support ServicesSecurity 
 
 
 
                                                            
respectively. While it could be possible to envisage changing the balance between Union and 
non-Union components, this would not solve the underlying issues unless all systems became 
Union  components.  Even  then,  there  would  be  questions  about  what  would  be  the  best 
structure  to  deliver  them  and  how  it  would  interact  with  national  customs  services  and 
national law. 

On  this  basis,  the  notion  of  a  "shared  IT  supplier"  which  could  in  principle  supply 
development and even operations and maintenance services to both the Commission and 
to Member States has been discussed. The idea would be to assign responsibilities to a third 
party, which could deliver services on the basis of funding provided by Member States  and 
the  Commission.  This  would  ensure  coherence  across  the  range  of  IT  systems  and  should 
deliver cost savings. Moreover, this would leave the option open for the Commission or even 
Member States to assign certain operational tasks and activities to the third party, depending 
on the legal construction used. 

The  likely  value-added  of  such  an  option  would  derive  from  the  lower  costs  of  single 
development, operation and maintenance compared to multiple costs when all Member States 
act individually. However, the real effects of this principle would depend on the scope of such 
“shared  IT  supplier”  activities,  and  the  extent  to  which  national  adaptations  could  be 
minimised  in  the  interest  of  standardising  the  approach.  Given  the  need  for  full  real-time 
availability  for  operations  and  maintenance,  any  structure  would  have  to  give  business 
continuity  guarantees  that  would  apply  to  all  Member  States  involved,  if  it  was  to  take  on 
such activities. 

Indeed a major issue is the extent to which systems, or parts of systems, could be taken on by 
a third party and their relationship with other parts of the IT ecosystem.  

In principle, a “shared IT supplier” could be a structure operating at  EU level. In case 
such  a  structure  would  take  the  form  of  a  joint  undertaking,  the  specific  tasks  and 
governance would be substantially different. It could also be a form of joint procurement body 
perhaps  established  through  an  arrangement  such  as  a  European  Grouping  of  Territorial 
Cooperation16. 

5.2.  A structure operating at EU level 

A possible approach to such a challenge would be set up a structure at EU level to take 
on specific responsibilities. Although the option of, for example, a new agency, has been 
raised  in  Member  State  discussions,  there  is  insufficient  support  for  such  an  idea 
amongst  the  Member  States  at  present.  This  is  complicated  in  addition  by  considerable 
uncertainty  over  future  EU  funding  possibilities,  as  well  as  concerns  about  taking  
this route without a clear idea of the relationship between an entity’s activities  and those of 
Member States, where the customs processes are so integrated across the EU. 

Another possibility would be to seek to transfer Commission operations to an existing EU 
agency.17  
structure, 
At present there is only one such agency with a mandate covering large scale IT systems in 

existing 

such 

EU 

an 

as 

16  See  Regulation  1082/2006  of  the  European  Parliament  and  of  the  Council  of  5  July  2006  on  a  European 
grouping of territorial cooperation (EGTC) (OJ L 210, 31.7.2006, p. 19) 
17 OLAF is already operating Pan-European customs IT systems, supporting Customs authorities in their work to 
fight fraud in the customs area. OLAF, however, has neither the mandate nor the resources to operate large 
scale IT systems outside the fraud area. 

9 

 
 
                                                            
the area of justice and home affairs. This is EU-LISA. However, its mandate does not cover 
customs  and  it  is  fully  occupied  at  present  in  delivery  of  systems  within  its  mandate.  Any 
potential  synergies  with  this  agency  would  require  detailed  due  diligence,  in  particular 
because  of  the  high  number,  complexity  and  degree  of  maturity  of  existing  customs  IT 
systems.  The  risk  to  existing  customs  operations  would  be  too  great  for  it  to  be 
considered as a viable option in the short or medium term. Moreover, with the finalisation 
of the remaining UCC projects, such risks will become more important. 

At this stage in the development of thinking around the use of a permanent structure therefore, 
the Member States have not agreed on a clear orientation on the use of a new structure to take 
over some of the development and/or operation/maintenance of customs IT systems. Member 
States  are  very  much  concentrated  on  delivery  of  the  complex  web  of  projects  that  are 
provided for in the UCC and see little chance of major changes in the way they carry out their 
activities for this purpose. More clarity is needed on many different elements, which justifies 
further work on due diligence. 

5.3.  Collaboration solutions for the Member States 

is 

further  option 

A 
idea  
of  deeper  collaboration  between  the  Member  States.  Considerable  research  has  been 
undertaken  on  this  and  new  initiatives  in  both  the  customs  and  taxation  fields  suggest  that 
there is scope for genuine value-added. 

to  generate  new  momentum  around 

to  attempt 

the 

The  collaboration  “solution”  is  based  on  the  idea  that  Member  States  collectively  act 
together to tackle non-Union component design, development and operations. It implies a 
structure that is more open and less centralised in its governance and operation than an agency 
type solution. It also implies that costs are mainly born by the Member States directly and not 
by the EU budget, as should be the case for non-Union components. This presupposes a clear 
view  of  where  the  work  to  be  done  fits  in  the  customs  IT  ecosystem.  Here  the  UCC  Work 
Programme (and the Multi Annual Strategic Plan – MASP – as provided for in the eCustoms 
Decision) provides a framework. 

The  challenges  of  collaboration  are  essentially  around  ensuring  governance  of  the  action 
(outside the tight framework in place for the work on Union components) involving some or 
all  Member  States,  ensuring  that  the  legal  and  practical  matters  around  procurement  are 
adequately addressed and ensuring agreed and workable rules on IT architecture. 

At this stage, the potential of this approach needs to be tested by a real life case. In this 
respect  the  ongoing  UCC  project  on  notification  of  arrival,  presentation  notification  and 
temporary storage is a valuable experiment and the Commission will continue to support it, 
with expertise and with funding for certain administrative aspects where this is possible under 
the Customs 2020 programme. This  project, led by Belgium, has  real potential to provide a 
template  for  further  similar  projects  as  well  as  providing  a  more  cost-effective  solution  for 
those Member States currently seeking to finalise their national systems for the UCC. It has 
the potential to go beyond development aspects and can benefit from existing experience on 
projects  in  the  tax  world,  which  has  been  faced  with  similar  challenges.  Discussions  in  the 
High  Level  Working  Party  in  the  Council  on  11  October  2017,  based  on  the  output  of  the 
Tallinn seminar of 28/29 September, have demonstrated a convergence of views around the 
importance of advancing on the issue of collaboration. 

10 

 
 
Depending on the results of this experience and those other similar actions that are ongoing in 
the area of taxation, this form of co-operative working may indeed develop to occupy an 
important part of the development (and maybe even in certain cases operations) of parts 
of  the  customs  IT ecosystem.  This  could  be  part  of  a  "blended"  solution  that provides 
for different solutions for parts of the IT ecosystem.  

6.  ASPECTS TO BE FURTHER EXPLORED 

Further reflections will be needed in the context of the work of the “catalyst group” foreseen 
by  the  discussions  in  the  Council  in  October  2017.  They  should  cover  both  the  possible 
development  of  “collaboration”  type  solutions  and  innovative  structures  to  bring  Member 
States  together,  as  well  as  more  detailed  examination  of  the  use  of  more  traditional  agency 
type  structures  including  synergies  with  existing  agencies  and  future  initiatives.  The  high-
level objectives for the group should include at least the following: 

  Further development of  the vision of digital customs; 
  Definition of a stable governance relationship with business needs and the 
related legal framework to recognise the challenge of IT delivery in a 
dynamic policy environment; 

  Factor in technological innovation into the process of decision; 
  Scope the wider interaction under the Digital Agenda with other policy 

 

areas; 
Integrate the lessons of ongoing “collaboration” initiatives and analyse their 
effectiveness; 

  Outline an appropriate IT architecture; 
  Establish the future delivery model(s) based on cost/benefit considerations 

with an eye to “blended” solutions. 

7.  CONCLUSIONS 

Since  the  launch  of  the  debate  by  the  Commission  at  the  end  of  2016,  there  has  been  
a  wide  ranging  discussion  on  the  longer-term  future  for  EU  customs  IT  delivery  and 
operation. 

The  challenges  as  well  as  the  achievements  to  date  of  the  current  IT  delivery  model  are 
widely  recognised.  There  is  a  clear  consensus  on  the  need  to  continue  with  the  current 
structures  to  complete  the  ambitious  UCC  IT  work  programme.  Within  the  current 
structures,  it  is  possible  to  build  on  existing  collaboration  initiatives  to  help  interested 
Member States to deliver parts of the UCC systems they need to put in place. This is an 
area  where  the  current  experiences  will  bring  valuable  input  to  the  debate  on  the  future 
potential and development of the collaboration concept. 

11 

 
 
 
 
 
Progress  has  been  made  in  identifying  potential  avenues  for  more  effective  and  efficient 
development and operation of customs IT systems. However, work needs to be carried on 
along  the  two-track  approach  of  continuing  and  refining  the  existing  collaboration 
approach as well as establishing more clearly alternative delivery models. The appetite of 
Member  States  for  innovative  solutions  in  this  area  should  also  be  attended  to.  Both  tracks 
need  to  factor  in  the  Digital  Agenda  and  the  general  orientations  towards  the  sharing  of  IT 
services and solutions across sectors. 

Given  the  complexity  and  critical  nature  of  the  IT  ecosystem  for  customs  operations,  both 
within Member States and between them, it seems that any major change would have to be 
evolutionary  in  nature  and  that  in  all  probability  there  will  be  a  need  for  “blended” 
solutions rather than a single overarching one. As discussed with Member States, the next 
step  in  the  process  should  be  the  creation  of  a  “catalyst  group”  of  interested  Member 
States  and  the  Commission  to  explore  the  specific  issues  set  out  in  this  document  and  to 
follow-up  the  Council  conclusions  of  7  November  2017.  The  objective  of  this  "catalyst 
group" would be to establish a feasible scenario for the longer-term and a path to get there, 
including potentially further “pilot-projects” and due diligence work on synergies with other 
actors, as well as appropriate legal analyses and cost/benefit exercises. 

The  EU  funding  implications  of  future  actions  going  beyond  the  financing  envelope  of  the 
Customs  2020  programme  will  have  to  be  considered  in  the  context  of  the  preparation  and 
negotiation of the next generation customs programme. 

In all the work to be done there will be a need to take into account the possible evolution of 
the  legal  basis  and  the  potential  impact  of  Brexit,  the  increasing  pressure  to  ensure  cross-
sector  solutions  in  terms  of  interoperability,  sharing  of  solutions  and  exploitation  of  data  as 
well as the implications of technological innovations over the coming years. 

12 

 
 
 
 
Annex 1 

List of 17 projects defined by the UCC Work Programme – Overview 

1  UCC Registered Exporter System (REX) 
2  UCC Binding Tariff Information (BTI) 
3  UCC Customs Decisions (CD) 
4  UCC Uniform User Management & Digital Signature (UUM&DS) 
5  UCC Authorised Economic Operators (AEO) 
6  UCC Economic Operator Registration and Identification System (EORI2) 
7  UCC Surveillance 3 
8  UCC Proof of Union Status (PoUS) 
9  UCC New Computerised Transit System (NCTS) 
10  UCC Automated Export System (AES) 
11  UCC Information Sheets (INF) for Special Procedures 
12  UCC Special Procedures 
13  UCC Notification of Arrival, Presentation Notification and Temporary Storage 
14  UCC National Import Systems 
15  UCC Centralised Clearance for Import (CCI) 
16  UCC Guarantee Management (GUM) 
17  UCC Import Control System (ICS 2) 

List of 17 projects defined by the UCC Work Programme – Descriptions 

1. UCC Registered Exporter System (REX)  

The  project  aims  to  make  available  up-to-date  information  on  Registered  Exporters 
established  in  GSP  countries  exporting  goods  to  the  Union.  The  system  will  be  a  trans-
European  system  and  also  include  data  about  EU  economic  operators  for  the  purpose  of 
supporting  exports  to  GSP  countries.  The  required  data  has  be  inserted  in  the  system  in  a 
gradual manner until 31 December 2017. 

2. UCC Binding Tariff  Information (BTI) 

The project aims at providing an upgrade of the existing trans-European EBTI-3 system and 
Surveillance 2 system to ensure the following: 

(a) alignment of the EBTI-3 system to the UCC requirements; 
(b) extension of under-surveillance-required declaration data; 

13 

 
 
 
 
(c) monitoring of the compulsory BTI usage; 
(d) monitoring and management of BTI extended usage. 

The project will be implemented in two phases. 

The first phase will, firstly, provide the functionality to receive the UCC required declaration 
dataset (i.e. step 1) as of 1 March 2017 in a gradual manner until the implementation of the 
projects  listed  in  points  10  and  14  hereof  (and  at  the  latest  by  31  December  2020),  and, 
secondly,  fulfil  the  obligation  of  BTI  usage  control  on  the  basis  of  the  newly  required 
declaration dataset and the alignment to the customs decisions process (i.e. step 2). 

The second phase will implement the electronic form of the BTI application and decision and 
provide  for  the  economic  operators  an  EU  harmonised  trader  interface  to  submit  the  BTI 
application and receive the BTI decision electronically. 

3. UCC Customs Decisions  

The  project  aims  at  harmonising  the  processes  related  to  the  application  for  a  customs 
decision,  the  decision-taking  and  the  decision  management  through  standardisation  and 
electronic management of application and decision/authorisation  data  across the Union. The 
project  relates  to  national  and  multi-Member  State  decisions  defined  by  the  Code  and  will 
cover  system  components  developed  centrally  at  Union  level  and  cover  integration  with 
national  components  where  opted  for  by  Member  States.  This  trans-European  system  will 
facilitate  consultations  during  the  decision  taking  period  and  the  management  of  the 
authorisations process. 

This trans-European system consists of an EU trader portal, a customs decisions management 
system and a customer reference system. 

4.  Direct  trader  access  to  the  European  Information  Systems  (Uniform  User 
Management & Digital Signature) 

The goal of this project is to provide working solutions for a direct and EU-harmonised trader 
access  as  a  service  for  user-to-system  interfaces  to  be  integrated  in  the  electronic  customs 
systems as defined in the specific UCC projects. The Uniform User Management and Digital 
Signature will be integrated in the portals of the concerned systems and includes support for 
identity, access and user management compliant with the necessary security policies. 

The  first  deployment  is  foreseen  together  with  the  UCC  Customs  Decisions  system. 
Afterwards,  this  technical  enabler  for  authentication  and  user  management  will  be  made 
available  for  usage  in  other  UCC  projects  such  as  the  UCC  BTI,  UCC  AEO  upgrade  UCC 
Proof  of  Union  Status  system  and  potentially  also  the  UCC  Information  Sheets  (INF)  for 
Special Procedures system. See the different projects for the dates of deployment. 

5. UCC Authorised Economic Operators (AEO) upgrade 

The  project  aims  to  improve  the  business  processes  related  to  AEO  applications  and 
authorisations taking into account the changes of the legal provisions of the UCC. 

14 

 
 
 
 
 
In  the  first  phase,  the  project  aims  at  implementing  the  major  enhancements  to  the  AEO 
system in view of the harmonisation to the customs decision taking procedure. 

In  the  second  phase, the  project  will  implement  the  electronic  form  of  the  AEO  application 
and  decision  and  provide  for  the  economic  operators an  EU  harmonised  interface  to  submit 
the AEO application and receive the AEO decision electronically. 

6.  UCC  Economic  Operator  Registration  and  Identification  System  upgrade 
(EORI 2) 

This project aims at providing a minor upgrade of the existing trans-European EORI system 
that enables the registration and identification of economic operators of the Union and third 
country  operators  and  persons  other  than  economic  operators  that  are  active  on  customs 
matters in the Union. 

7. UCC Surveillance 3 

This  project  aims  at  providing  an  upgrade  of  the  Surveillance  2+  system  to  ensure  its 
alignment  to  the  UCC  requirements  such  as  the  standard  exchange  of  information  by 
electronic  data-processing  techniques  and  the  establishment  of  adequate  functionalities 
needed  for  processing  and  analysing  the  full  surveillance  dataset  obtained  from  Member 
States. 

Therefore, it will include further data mining capabilities and reporting formalities to be made 
available to Commission and Member States. 

8. UCC Proof of Union Status (PoUS) 

The project aims at the creation of a new trans-European system to store, manage and retrieve 
the  following  electronic  Proofs  of  Union  Status:  T2L/F  and  the  customs  goods  manifest 
(issued by a non-authorised issuer). 

9. UCC New Computerised Transit System (NCTS) upgrade  

The aim of this project is to align the existing trans-European NCTS system to the new UCC 
requirements  such  as  the  registration  of  "en  route"  events  and  the  alignment  of  information 
exchanges  to  UCC  data  requirements  and  the  upgrade  and  development  of  interfaces  with 
other systems. 

10. UCC Automated Export System (AES) 

This project aims to implement the UCC requirements for export and exit. 

Component 1 - "Trans-European AES": 

The  aim  of  the  project  is  to  further  develop  the  existing  trans-European  Export  Control 
System  in  order  to  implement  a  full  AES  that  would  cover  the  business  requirements  for 
processes  and  data  brought  about  by  the  UCC,  inter  alia  the  coverage  of  simplified 

15 

 
 
 
 
 
 
 
procedures, split exit consignments and centralised clearance for export. It is also envisaged to 
cover the development of harmonised interfaces with Excise Movement System (EMCS) and 
NCTS.  As  such,  AES  will  enable  the  full  automation  of  export  procedures  and  exit 
formalities. AES covers parts to be developed centrally and nationally. 

Component 2 – "National Export Systems upgrade": 

In addition, not being part of the scope of AES but closely linked, separate national systems 
are to be upgraded for specific national elements related to export and/or exit formalities.  As 
far  as  these  elements  do  not  have  an  impact  on  the  common  domain  for  AES,  they  can  be 
covered under this component. 

11. UCC Information Sheets (INF) for Special Procedures  

The aim of this project is to develop a new trans-European system to support and streamline 
the processes of INF data management and the electronic handling of INF data in the domain 
of Special Procedures. 

12. UCC Special Procedures  

This project aims at accelerating, facilitating and harmonising Special Procedures across the 
Union  by  means  of  providing  common  business  process  models.  The  national  systems  will 
implement  all  UCC  changes  required  for  customs  warehousing,  end-use,  temporary 
admission, inward and outward processing. 

This project will be implemented in two parts. 

Component 1 - "National SP EXP": provide the required national electronic solutions for the 
export related special procedures activities. 

Component 2 - "National SP IMP": provide the required national electronic solutions for the 
import related special procedures activities. 

The implementation of these projects will occur through the projects listed in points 10 and 14 
hereof. 

13.  UCC  Notification  of  Arrival,  Presentation  Notification  and  Temporary 
Storage  

The goal of this project is to define the processes for Notification of Arrival of the means of 
transport,  Presentation  of  the  goods  (Presentation  Notification)  and  Declaration  for 
Temporary  Storage  as  described  in  the  UCC  and  to  support  harmonisation  in  this  respect 
across the Member States as regards the data exchange between trade and customs. 

The project covers the automation of processes at national level. 

14. UCC National Import Systems upgrade 

The project aims at implementing all process and data requirements deriving from the UCC 
which  relate  to  the  import  domain  (and  which  are  not  covered  by  one  of  the  other  projects 

16 

 
 
 
 
 
 
defined  in  the  Work  Programme).  It  relates  mainly  to  the  changes  for  the  "Release  for  free 
circulation"  procedure  (standard  procedure  +  simplifications),  but  covers  also  the  impact 
arising  from  other  system  migrations.  This  project  relates  to  the  national  import  domain 
covering the national customs declarations processing systems as well as other systems such 
as national accountancy and payment systems. 

15. UCC Centralised Clearance for Import (CCI) 

This project aims to allow for goods to be placed under a customs procedure using centralised 
clearance, allowing economic operators to centralise their business from a customs viewpoint. 
The  processing  of  the  customs  declaration  and  the  physical  release  of  the  goods  should  be 
coordinated  between  the  related  customs  offices.  It  concerns  a  trans-European  system 
containing components developed centrally and nationally. 

16. UCC Guarantee Management (GUM) 

This  project  aims  to  assure  the  effective  and  efficient  management  of  the  different  types  of 
guarantees. 

Component  1  –  "GUM":  The  trans-European  system  will  cover  the  management  of  the 
comprehensive  guarantees  that  may  be  used  in  more  than  one  Member  State  and  the 
monitoring of the reference amount for each customs declaration, supplementary declaration 
or  an  appropriate  information  of  the  particulars  needed  for the  entry  in the  accounts  for  the 
existing  customs  debts  for  all  customs  procedures  as  provided  for  in  the  Union  Customs 
Code, except Transit which is handled as part of the NCTS project. 

Component  2  –  "National  Guarantee  Management":  In  addition,  the  electronic  systems 
existing  at  national  level  to  manage  the  guarantees  valid  in  one  Member  State  are  to  be 
upgraded. 

17. UCC Import Control System upgrade (ICS 2) 

The  goal  of  this  project  is  to  strengthen  the  safety  and  security  of  the  supply  chain  for  all 
modes of transport and especially air cargo, by means of improving data quality, data filing, 
data  availability  and  data  sharing  as  regards  the  entry  summary  declaration  and  related  risk 
and control information (ENS+ lifecycle). 

The project will also facilitate the collaboration amongst Member States in the process of risk 
analysis.  It  will  lead  to  a  complete  new  architecture  of  the  existing  trans-European  ICS 
system. 

17 

 
 
 
 
 
Annex 2 

Note: The figures of UCC percentage done concern only the work to be performed by the Commission, not the work to be performed by the 
Member States. 

18 

IT Strategy for Customs –Tentative timeline1201720182019-20202021-20232024-2025C2020C202xTime•Common work•Collaboration –one UCC project•Collaboration triggered14532•Collaboration in development and operation (UCC NA, PN, TS)•Common development and operation (other projects)•Collaboration pilotFurther synergies in common componentsPilot project –UCC NA, PN, TSDue diligence –"Catalyst group"Set-up new delivery modelCommon componentsNational componentsTransition to new delivery modelNew delivery model80% UCC delivered90% UCC deliveredUCC delivered•Collaboration in development and operation (possibly other UCC projects)•Collaboration –more UCC projects•Collaboration –other projects•Collaboration in development           (UCC NA, PN, TS)•Collaboration in specs      (UCC NA, PN, TS)