COMMISSION STAFF WORKING DOCUMENT IMPACT ASSESSMENT Accompanying the document Proposal for a Council Directive laying down the general arrangements for excise duty (recast)
Date: 2018-05-25
Institutions: Directorate-General for Taxation and Customs Union, European Commission
Subjects: alcoholic beverage, electrical energy, energy-generating product, excise duty, free movement of goods, import (EU), suspension of customs duties, tax harmonisation, tax system, tobacco

EN 

  EN 

   EUROPEAN COMMISSION  Brussels, 25.5.2018 SWD(2018) 260 final  COMMISSION STAFF WORKING DOCUMENT  IMPACT ASSESSMENT  Accompanying the document Proposal for a Council Directive laying down the general arrangements for excise duty (recast) {COM(2018) 346 final} - {SEC(2018) 255 final} - {SWD(2018) 261 final}  
 
 
Table of Contents 

1. 

INTRODUCTION AND CONTEXT ......................................................................... 5 

1.1.  Excise duty, excise goods and fiscal risk .......................................................... 5 
1.2.  Purpose of Directive 2008/118/EC ................................................................... 5 
1.3.  Evaluation of Directive 2008/118/EC ............................................................... 6 
1.4. 
Intervention Logic ............................................................................................. 6 
1.5.  Trans-European IT systems supporting the excise policy ................................. 7 
1.6.  Volume of excise trade and fraud...................................................................... 7 
1.7.  Sources .............................................................................................................. 8 

2.  WHAT IS THE PROBLEM AND WHY IS IT A PROBLEM .................................. 9 

2.1.  Scope of this initiative ....................................................................................... 9 
2.2.  Excise – Customs interactions: Export ............................................................ 10 
2.2.1.  Overview of the current situation ...................................................... 10 
2.2.2.  Problem Analysis .............................................................................. 11 

2.3.  Excise  –  Customs  interactions:  Export  followed  by  Transit  or  using  a 

Single Transport Contract (hereafter: STC) .................................................... 13 
2.3.1.  Overview of the current situation ...................................................... 13 
2.3.2.  Problem Analysis .............................................................................. 14 
2.4.  Excise – Customs interactions: Import ............................................................ 17 
2.4.1.  Overview of the current situation ...................................................... 17 
2.4.2.  Problem Analysis .............................................................................. 17 
2.5.  Duty Paid Business-to-Business (B2B) ........................................................... 19 
2.5.1.  Overview of the current situation ...................................................... 19 
2.5.2.  Problem Analysis .............................................................................. 19 
2.6.  Low Risk Movements ..................................................................................... 21 
2.7.  Exceptional Situations ..................................................................................... 23 
2.7.1.  Overview of the current situation ...................................................... 23 
2.7.2.  Problem Analysis .............................................................................. 23 

3.  WHY SHOULD THE EU ACT ................................................................................ 25 

4.  WHAT SHOULD BE ACHIEVED .......................................................................... 27 

4.1.  General objectives ........................................................................................... 27 
4.2.  Specific objectives ........................................................................................... 27 
4.3.  Linking the objectives to the problems ........................................................... 28 
4.4.  Assessment criteria .......................................................................................... 28 
4.5.  Consistency  with  other EU  policies  and  with  the  Charter  for  fundamental 

rights ................................................................................................................ 29 

5.  WHAT ARE THE VARIOUS OPTIONS TO ACHIEVE THE OBJECTIVES ...... 30 

5.1.  Excise – Customs interactions: Export ............................................................ 30 
5.1.1.  Option 1: Do nothing (baseline) ........................................................ 30 
5.1.2.  Option 2: Data cross-check ............................................................... 30 

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5.1.3.  Option 3: Automated process synchronisation .................................. 31 
5.1.4.  Option 4: EU common list of Alternate Proofs of Exit ..................... 31 
5.2.  Excise – Customs interactions: Export followed by Transit or using STC ..... 31 
5.2.1.  Option 1: Do nothing (baseline) ........................................................ 31 
5.2.2.  Option  2:  Authorise  the  use  of  external  transit  after  the  export 

procedure for excise Union goods ..................................................... 31 
5.3.  Excise – Customs interactions: Import ............................................................ 32 
5.3.1.  Option 1: Do nothing (baseline) ........................................................ 33 
5.3.2.  Option 2: Data cross-check ............................................................... 33 
5.4.  Duty Paid Business-to-Business ...................................................................... 34 
5.4.1.  Option 1: Do nothing (baseline) ........................................................ 34 
5.4.2.  Option 2: Registration of Economic Operators ................................. 34 
5.4.3.  Option  3:  Automation  of  Duty  Paid  B2B  processes  by  extending 

EMCS ................................................................................................ 34 
5.5.  Exceptional Situations ..................................................................................... 35 
5.5.1.  Option 1: Do nothing (baseline) ........................................................ 35 
5.5.2.  Option  2:  Specify  a  common  approach  supported  by  legislation 

and guidelines .................................................................................... 35 

6.  WHAT ARE THE IMPACTS OF THE DIFFERENT POLICY OPTIONS ............ 37 

6.1.  Excise – Customs interactions: Export ............................................................ 37 
6.1.1.  Do nothing (baseline) ........................................................................ 37 
6.1.2.  Data cross-check................................................................................ 37 
6.1.3.  Automated process synchronisation .................................................. 38 
6.1.4.  EU common list of Alternate Proofs of Exit ..................................... 38 
6.2.  Excise – Customs interactions: Export followed by Transit or using STC ..... 39 
6.2.1.  Do nothing (baseline) ........................................................................ 39 
6.2.2.  Authorise the use of external transit after the export procedure for 

excise Union goods ........................................................................... 39 
6.3.  Excise – Customs interactions: Import ............................................................ 41 
6.3.1.  Do nothing (baseline) ........................................................................ 41 
6.3.2.  Data cross-check................................................................................ 41 
6.4.  Duty Paid Business-to-Business ...................................................................... 42 
6.4.1.  Do nothing (baseline) ........................................................................ 42 
6.4.2.  Registration of Economic Operators ................................................. 42 
6.4.3.  Automation of Duty Paid B2B processes by extending EMCS ........ 43 
6.5.  Exceptional Situations ..................................................................................... 44 
6.5.1.  Do nothing (baseline) ........................................................................ 44 
6.5.2.  Specify  a  common  approach  supported  by  legislation  and 

guidelines........................................................................................... 44 

7.  HOW DO THE OPTIONS COMPARE.................................................................... 47 

7.1.  Excise – Customs interactions: Export ............................................................ 48 
7.2.  Excise – Customs interactions: Export followed by Transit or using STC ..... 49 
7.3.  Excise – Customs interactions: Import ............................................................ 50 

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7.4.  Duty Paid Business-to-Business ...................................................................... 51 
7.5.  Exceptional Situations ..................................................................................... 52 

8.  THE PREFERRED OPTION .................................................................................... 54 

8.1.  Excise – Customs interactions: Export ............................................................ 54 
8.2.  Excise – Customs interactions: Export followed by Transit or using STC ..... 54 
8.3.  Excise – Customs interactions: Import ............................................................ 54 
8.4.  Duty Paid Business-to-Business ...................................................................... 55 
8.5.  Exceptional Situations ..................................................................................... 55 
8.6.  REFIT (simplification and improved efficiency) ............................................ 56 

9.  HOW WOULD ACTUAL IMPACTS BE MONITORED AND EVALUATED .... 57 

9.1.  Monitoring Indicators ...................................................................................... 58 
9.2.  Monitoring structures ...................................................................................... 59 
9.3.  Evaluation ........................................................................................................ 59 

ANNEXES ........................................................................................................................ 60 

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ABBREVIATIONS 

Automated Export System (future UCC system, successor of ECS) 
AES 
also known as 
Aka 
Alternate Proof of Exit 
APoE 
Administrative Reference Code (identifier of an e-AD) 
ARC 
B2B 
Business to Business 
CAPEX  Capital Expenditure 
CCN/CSI  Common Communication Network / Common System Interface 
e-AD 

ECS 
EMCS 
EO 
EOS 
FAD 

G€ 
IA 
ISSG 
IT 
k€ 
M€ 
MS 
n/a 
NA 
NCTS 
NGO 
OPC 
OPEX 
REFIT 
SAAD 

SEED 

electronic Administrative Document  
(excise "declaration" for moving goods under duty suspension) 
Export Control System 
Excise Movement Control System 
Economic Operator 
Economic Operator System 
Fallback Administrative Document 
(replaces an e-AD in the rare occurrence when the EMCS system is down) 
billion euros (giga euro) 
Impact Assessment 
Inter-Service Steering Group 
Information Technology 
thousand euros (kilo euro) 
million euros 
Member State 
not applicable 
National Authority 
New Computerised Transit System 
Non Governmental Organisation 
Open Public Consultation 
Operating Expenses 
Regulatory Fitness and Performance programme 
Simplified Administrative Accompanying Document 
(excise "declaration" for moving goods under duty paid business-to-business) 
System for Exchange of Excise Data  
(EU repository of authorised Excise traders) 
Small and Medium Enterprises 
Single Transport Contract 
Union Customs Code 

SME 
STC 
UCC 
UCC/IA  Union Customs Code Implementing Act 
VAT 
VIES 

Value-Added Tax 
VAT Information Exchange System 

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1. 

INTRODUCTION AND CONTEXT 

1.1.  Excise duty, excise goods and fiscal risk 

Excise duty is an indirect tax applied to certain types of goods (aka "excise goods"), which is 
collected at the time and place of release for consumption1. 

Some goods are subject to harmonised excise duty in the European  Union, i.e. common EU 
legislation  applies  to  certain  products  which  are  subject  to  excise  duty  in  all  EU  Member 
States:  alcohol  and  alcoholic  beverages,  manufactured  tobacco,  energy  products  and 
electricity. This harmonisation includes the way excise goods are held and moved in the EU 
but still allows large differences in duty rates between Member States. 

The movement of excise goods has a high inherent fiscal risk for the following reasons: 

1.  The  duty  rates  of  some  excise  products  (e.g.  cigarettes,  some  energy  products)  lead  to  a 

taxation burden that is much greater than the net value of the goods. 

2.  The  duty  rates  vary  greatly  from  one  Member  State  to  another2,  which  acts  as  a  strong 
incentive  to  fraudsters  to  divert  excise  goods  from  low-rate  Member  States  to  the  illicit 
markets of high-rate Member States. 

3.  The  total  amount  of  excise  duty  due  on  a  set  of  excise  goods  is  collected  from  one  tax 
payer at a single time and location, which makes excise duty more vulnerable to fraud than 
other types of indirect taxes3. 

4.  Excise  duty  is  in  almost  all  circumstances  due  in  the  Member  State  of  consumption  (the 
destination principle), but excise goods are often produced or imported elsewhere, giving 
rise  to  the  need  for  specific  procedures  to  defer  the  payment  of  tax,  or  cumbersome  tax 
refund arrangements. 

1.2.  Purpose of Directive 2008/118/EC 

After  the establishment of the internal market and the abolition of border controls  for  fiscal 
purposes  between  Member  States,  provisions  were  made  for  excise  goods  to  be  moved 
without first being taxed in the Member State of dispatch (i.e. excise duty is ‘suspended’) and 
to ensure the possibility of the free movement of excise goods. 

To allow the free movement of goods while at the same time ensuring that the correct tax debt 
is ultimately collected by the Member States, EU legislation (in the form of Council Directive 
2008/118/EC) sets out general arrangements for goods subject to excise duty, with particular 
emphasis on the production, storage and movement of excise goods between Member States. 
Council Directive 2008/118/EC has replaced Council Directive 92/12/EEC4. 

Most storage facilities and movements of excise goods need a guarantee, usually provided for 
by the consignor at the place of dispatch, to cover for the fiscal risk. 

1  Release for consumption occurs when goods are produced or are released from customs or excise procedures 

which suspend payment of excise duty. 

2 For instance, the excise duty of a lorry load of beer may be 25 000 € in the UK and 3 000 € in Germany. 
3  For instance, VAT is collected at each step of the supply chain and requires information reports for both sales 
and  purchases.  Moreover,  one  firm’s  revenues  are  another  firm’s  costs  and  consequently  VAT  evasion 
incentives are mutually inconsistent.  

4  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 

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Directive  2008/118/EC  defines  two  types  of  procedures  for  moving  excise  goods  between 
Member States: 

  Duty  suspension:  this  procedure  provides  relief  to  economic  operators  from  having  to 
advance excise duties on production, processing, holding or movement of excise goods not 
covered  by  a  customs  suspensive  procedure5  and  before  dispatch  of  the  goods,  thus 
improving cash flow. It also ensures that excise duty is only paid once in the Member State 
where  the  goods  will  be  released  for  consumption.  Member  States  impose  stringent 
conditions on the granting of authorisations for duty suspension. 

  Duty  Paid:  this  procedure  requires  excise  duties  to  be  paid  in  advance  at  the  place  of 
dispatch  and  then  at  destination  (at  which  point  the  excise  duty  paid  at  dispatch  may  be 
refunded).  National  registration  or  authorisation  procedures  tend  to  be  simpler  than  duty 
suspension, but there is an additional burden due to the need to process refunds. 

1.3.  Evaluation of Directive 2008/118/EC 

The Commission decided to carry out an evaluation of this regulatory area in the framework 
of  the  Commission’s  REFIT  programme  and  submitted  a  report  to  the  Council  and  the 
European  Parliament  on 
implementation  and  evaluation  of  Council  Directive 
2008/118/EC6 in April 20177. 

the 

This report was based on two external studies. The first study, on Chapter V of the Directive 
(i.e. rules on movements of excise goods on which duty has already been paid) was published 
in 2015 . The second study, which concentrated on Chapters III and IV of the Directive (i.e. 
provisions on tax warehousing and electronic control system, for duty suspension procedures), 
was published in 2016. 

The  Council  adopted  conclusions  on  this  evaluation  (see  [R6]).  Overall,  further  automation 
and harmonisation is well supported providing it can be done at reasonable cost; measures to 
enhance  the  fight  against  fraud  are  also  welcome  when  not  hampering  legitimate  trade.  All 
problems  of  this  initiative  are  mentioned  as  areas  for  improvements  in  the  Council 
conclusions. 

1.4. 

Intervention Logic 

During  its  evaluation  process  (see  section  1.3),  Directive  2008/118/EC  was  seen  by  most 
stakeholders  as  an  enormous  improvement  on  its  predecessor  Directive  92/12/EEC. 
Nevertheless,  several  areas  for  improvement  were  identified  which  constitute  the  drivers  of 
this initiative. 

This  initiative  is  part  of  the  Commission's  Regulatory  Fitness  and  Performance 
Programme (REFIT). All the selected options of this initiative (except baseline) will have 
significant  impacts  on  simplification  and  will  reduce  regulatory  costs.  Some  selected 
options will also have a positive impact on Small and Medium Enterprises (SME). 

This initiative's objectives are described in chapter 4. 

5  "Customs suspensive procedure" as defined in Article 4(6) of the Directive.  The term will be adapted to match 
the new customs term "special procedures," as used in Regulation n° (EU) 952/2013 (Union Customs Code). 
6  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. 

7 COM(2017) 184 final: https://ec.europa.eu/transparency/regdoc/rep/1/2017/EN/COM-2017-184-F1-EN-

MAIN-PART-1.PDF 

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1.5.  Trans-European IT systems supporting the excise policy 

The  procedures  related  to  excise  goods  under  duty  suspension  are  supported  by  two 
paneuropean IT systems8: 

  EMCS:  Excise Movement and Control System   

This IT system supervises the cross-border intra-EU movement and export of excise goods 
under duty suspension; each movement in EMCS must be declared to the system, before 
the  dispatch  of  the  goods,  via  an  "electronic  Administrative  Document"  (e-AD)  and  is 
uniquely identified by its "Administrative Reference Code" (ARC). 

  SEED:  System for Exchange of Excise Data 

This  IT  system  is  a  registry  of  all  Economic  Operators  authorised  to  trade  excise  goods 
under  duty  suspension;  each  Economic  Operator  is  uniquely  identified  in  SEED  by  its 
"SEED number". 

It should be noted that pan-European IT systems have a lifespan of more than 20 years; so, 
even  relatively  high  initial  investments  might  prove  worthwhile  and  pay  back  after  some 
years. 

The  procedures  related  to  excise  goods  released  for  consumption  (i.e.  for  which  duty  has 
already been paid) are all paper-based. 

1.6.  Volume of excise trade and fraud 

The amount of goods value, excise duty and estimated fraud (i.e. excise duty loss) in the EU 
per year is summarised in the following table (see ANNEX IV for further detail). Excise fraud 
is by its nature difficult to assess and is based on scarce data; consequently the fraud figures 
should be treated with caution. 

Volume of trade, duty and fraud for excise (in billion euros) 

Value 

Import 
432 

Export 
132 

Intra EU 
270 

Total 
834 

Excise Duty 

34 

0* 

57 

91 

comment 

* Exported goods are not subject to excise duty in the EU; 
should the same goods be consumed in the EU, their excise 
duty would be about EUR 14 billion  

Estimates of excise duty loss that the policies in the scope of Directive 2008/118/EC may impact 

Duty loss 

0.05 

0.03 

0.4 

0.48 

Amount of fraud on which policy options related to 
declared trade may have an impact9 

1.7.  Baseline 

The baseline for this initiative is the following set of legal texts: 

  Excise  legislation:  Decision  No  1152/2003/EC  of  the  European  Parliament  and  Council, 
Directive  2008/118/EC,  Council  Regulation  (EU) No  389/2012,  Commission  Regulation 
(EEC) No 
(EC) 684/2009, 
(EU) 612/2013 and (EU) 2016/323; 

Implementing  Regulations 

3649/92,  Commission 

8  A pan-European IT system is a set of IT applications and components at the Commission, each Member State 
and each Economic Operator, integrated with each other in order to share information between all stakeholders. 
9  Most  fraud  is  from  illicit  trade,  such  as  illicit  production  in  the  EU  or  smuggling  to  the  EU,  which  is  not 
declared in any way and cannot be fought by declaration-based measures; this is why the policy options in the 
scope directive 2008/118/EC have an effect on only a part of excise fraud. 

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  the  Union  Customs  Code  and  related  acts:  Regulation  (EU) 952/2013  of  the  European 
Parliament  and  Council,  Commission  Implementing  Regulations  (EU) 2015/2446  and 
(EU) 2015/2447; 

  the  Recovery  Directive  2010/24/EU  and  Commission 

Implementing  Regulation 

(EU) 1189/2011. 

Some  initiatives  in  Customs  (e.g.  evolutions  of  UCC  Delegated  Acts)  or  in  Excise  (e.g. 
Alcohol  duty)  are  in  progress  but  they  do  not  impact  the  "do  nothing"  option  of  this 
initiative10. In other words, no other initiative is relevant for the status quo. 

Unless explicitly stated otherwise in the impact assessment (see chapter 6), the consequences 
of the status quo are assumed to evolve in a linear way with the volume of excise movements 
or  of  economic  operators  concerned  by  the  problem.  Some  uncertainty  lies  with  this 
assumption as the volume evolution forecast is not always accurate (especially for currently 
non-optimally monitored movements) and that it is based on stakeholders' inputs and an EU-
wide extrapolation. 

1.8. 

Sources 

Various  sources  were  used  for  this  impact  assessment  and  their  references  are  provided  in 
ANNEX  V.  Unless  explicitly  stated  otherwise  in  the  text,  figures  come  from  document 
[R5]  "Study  contributing  to  an  Impact  Assessment  on  Council  Directive  2008/118/EC 
concerning the general arrangements for excise duty" . 

Reference documents used in this report are provided in ANNEX V. 

10 For instance, this initiative is about the rules and procedures for holding and moving excise goods cross-border 
while the initiative for the alcohol directive defines the goods classification, duty exemptions and duty rates. 
These topics are related but they can evolve independently of each other. 

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2.  WHAT IS THE PROBLEM AND WHY IS IT A PROBLEM 

2.1. 

Scope of this initiative 

Directive  2008/118/EC  is  seen  by  most  stakeholders  as  an  enormous  improvement  on  its 
predecessor  Directive  92/12/EEC.  Changes  related  to  the  implementation  of  Directive 
2008/118/EC,  particularly  EMCS,  have  saved  Member  States  considerable  administrative 
costs, for example between EUR 27.5 and 37 million in 2014 alone. Economic operators have 
also  expressed  their  general  satisfaction  with  the  new  arrangements.  So,  this  initiative  does 
not change the scope of Directive 2008/118/EC. 

Nevetherless,  several  areas  for  improvement  were  identified  during  the  evaluation  process 
(see section 1.3): 

  Excise – Customs interactions, which consist of three independent categories 

o  Export 
o  Export followed by Transit or the use of a Single Transport Contract (STC) 
o  Import 

  Duty Paid Business-to-Business (B2B) 

  Low risk movements 

  Exceptional situations 

Excise and customs procedures are not always aligned or synchronised, which creates issues 
when  excise  goods  are  imported  or  exported.  For  instance,  excise  and  customs  export 
procedures  and  related  IT  systems  are  not  always  synchronised.  Consequently,  when 
synchronisation  fails,  Economic  Operators  have  to  provide  extra  documents  (the  nature  and 
content  of  which  are  not  harmonised  at  EU  level  and  depend  on  each  Member  State's 
requirements) to national excise authorities who will then have to check and close manually 
the related excise or export procedures; only after that can the guarantee can be released. 

In  some  situations  the  excise  procedures  are  cumbersome  or  vary  significantly  from  one 
Member State to another. For instance some procedures are entirely paper-based. 

Moreover,  given  the  high  fiscal  risk  for  holding  and  moving  excise  goods  under  duty 
suspension,  which  imposes  constraints  (e.g.  high  guarantee,  tax  warehouse,  authorisation), 
these arrangements are mostly used by large companies. SMEs rather use duty paid business-
to-business procedures, which are more adapted to small  consignments and low numbers of 
movements  (lower  guarantee  and  simpler  authorisation  but  higher  per-movement  regulatory 
burden). 

 All this causes extra administrative and compliance cost and effort for Economic Operators 
as well as for excise and customs authorities, because some steps in the procedures have to be 
performed  manually  (which  is  time-  and  resource-consuming)  and  subject  to  requirements 
that vary from one Member State to another. Moreover, such steps are a source of tax fraud. 

Note: some areas for improvement identified in the evaluations or in the Council conclusions 
(see  [R1],  [R2]  and  [R6])  have  not  been  addressed  in  this  Impact  Assessment.  The 
justification is provided is Annex VI. 

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Problem tree: 

2.2.  Excise – Customs interactions: Export 

2.2.1.  Overview of the current situation 

When  excise  goods  under  duty  suspension  are  exported,  an  excise  movement  must  first  be 
opened  between  the  Member  States  of  Dispatch  and  of  Export;  to  do  this,  the  consignor 
declares  the  movement  to  the  national  excise  authorities  by  lodging  an  electronic 
Administrative Document (e-AD) at the Member State of Dispatch. From the Member State 
of  Export,  where  the  customs  export  declaration  is  lodged,  the  supervision  of  the  excise 
movement  under  duty  suspension  continues  in  parallel  with  customs  supervision,  until  the 
external  border  of  the  EU.  Once  the  goods  have  actually  exited  the  EU,  the  Customs 
authorities inform the Excise authorities, who close the excise movement in EMCS and end 
the excise procedure11. 

11 Two procedures are used in parallel in order to allow the maximum freedom for economic operators to modify 
logistic  arrangements  whilst  maintaining  a  secure  oversight  of  the  movement  of  excise  goods  by  the 
authorities. The arrangements allow traders to change from exporting goods to supplying a consignee within 
the European Union, and vice versa 

10 

MS and EO unclear about their responsibilityExcise-Customs complexity(organisational, technical)Excise-Customs legal bases not explicit enough or not alignedProblem 1 - Customs – Excise interactionsexportProblem 2 - Customs – Excise interactionsexport with transit or STCProblem 3 - Customs – Excise interactionsimportProblem 4 - Duty Paid Business-to-BusinessEO: - confusion & complexity- hassle and compliance costs- administrative burdenMS: - administrative burden- fraudcausesproblemsconsequencesProblem 5 - Low risk movementsProblem 6 - Exceptional situationsPaper-based proceduresLittle use by MS of multilateral simplification agreementsExcise’s legal base not explicit enough for some goods or situations 
 
                                                 
Example: a wine trading business ("the consignor") in Spain sells wine to a client business in 
Japan. The consignor has to manage an export of excise goods. He arranges for transport from 
Spain to Japan via the port of Rotterdam (the Netherlands) where the goods will exit the EU. 
He lodges accordingly an e-AD at the Spanish excise authorities and provides a guarantee for 
this  movement.  Not  familiar  with  the  customs  export  procedure,  he  uses  the  services  of  a 
customs  broker  business  ("the  customs  declarant")  who  will  manage  all  customs  formalities 
on his behalf. The customs declarant chooses to lodge the export declaration in France. In this 
example, the Member State of Dispatch is Spain, the Member State and Office of Export is 
France and the Office of Exit is the Netherlands. 

No  incident  occurs  during  the  movement  and  the  goods  leave  Rotterdam  and  the  EU.  The 
customs Offices of Exit informs the Office of Export of the exit of the goods and the export 
procedure ends.  The Office of Export informs the excise authorities in the Member State of 
Export and the excise authories inform the Member State of Dispatch, which ends the excise 
procedure and releases the guarantee. 

2.2.2.  Problem Analysis 

Firstly,  export  movements  should  be  closed  in  EMCS  based  on  an  electronic  exit  results 
message  from  the  customs  Export  Control  System  (abbreviated  as  ECS).  This  message  is 
often  not  received  from  the  customs  authorities  and  the  excise  movements  have  to  be 
examined and closed manually. 
Secondly,  even  if  the  exit  results  message  is  received,  some  exporters  do  not  provide  a 
reference  in  the  export  declaration  to  the  Administrative  Reference  Code  (ARC)  of  the 
matching excise declaration (e-AD), making it difficult or impossible for the system to apply 
the exit results to the correct e-AD.  
Thirdly,  exceptional  situations  in  the  Customs  export  procedure  (e.g.  invalidation  of  the 
export  declaration;  export declaration never lodged) are not always forwarded to  the Excise 
authorities. 

These  weaknesses  translate  into  increased  administrative  costs  for  customs  and  excise 
administrations.  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.  

Moreover,  the  lack  of  the  ARC  in  export  declarations  as  well  as  the  absence  of  systematic 
cross check between export and excise procedures is a potential source of fraud (e.g. where 
consignments of excise goods under duty suspension declared for export are actually diverted 
to the EU's illicit market). 

11 

 
 
Example: re-using the same example as in the previous section. 

If, after the goods have left the EU, no Exit Results is sent by the Office of Exit or if the exit 
is not notified to the excise authorities, then the latter have no means to know that the export 
procedure is complete. Consequently, the excise procedure remains open. At a point in time, 
the  consignor  contacts  the  Spanish  excise  authorities  and  he  is  requested  to  provide 
documents  ("alternate  proof  of  exit")  to  prove  that  the  goods  have  exited  the  EU.  The 
consignor might have to get the requested documents from his client in Japan, the transporter 
or  another  stakeholder  in  the  movement.  He  then  provides  the  documents  to  the  excise 
authorities, who end the excise procedure and release the guarantee. 

If  the  traders  happen  to  be  fraudsters,  they  may  move  the  goods  with  a  valid  e-AD  to  the 
Netherlands,  lodge  an  export  declaration  with  a  lower  quantity  than  in  the  e-AD  and  then 
fraudulently divert the difference in quantity on a vessel to a high-tax-on-wine Member State 
such  as  Ireland  or  the  UK.  If  there  is  no  data  cross-check  between  customs  and  excise,  the 
customs officers cannot know that the diverted excise goods should have actually been on a 
vessel to Japan. 

Magnitude of the problem 

Regulatory  burden:  from  the  evaluation  (see  [R1])  Member  State  authorities  and  economic 
operators  consider  the  lack  of  synchronisation  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. 
41% of traders consider 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. 

Volume:  the  following  table  summarises  the  volume  of  excise  movements  with  destination 
export. A "direct" movement in this context means a movement for which the Member State 
of Dispatch is the same as the Member State of Export (the use of EMCS is not mandatory in 
this case, although the Member State of Dispatch/Export must be in a position to transfer e-
AD data to the Office of Exit and to the competent authorities of any Member State through 
which the goods pass on request). 

12 

MS of DispatchMS of ExportOffice of ExportOffice of ExitExcise supervisionCustoms supervisionExport declaratione-ADSupervision delegatedto CustomsExcise waitingfor notifications fromCustomsExitResultsExit Resultsnot forwardedto ExciseExport declarationneversubmittedExport eventsnot forwardedto Excise(e.g. export invalidation)Exit ResultsneversubmittedNo cross-checkExcise movementclosed 
 
 
 
 
Number of movements  

direct12 

indirect13 

total (1000 / year) 

1,200 

16 

closed automatically 

< 77% 

25% 

Comment 
Member State with highest volume: 
France 24%, Germany 13%, The 
Netherlands 12%, United Kingdom 
7% 
At least 288 000 movements per 
year are closed manually 

Fraud:  the  estimate  for  the  excise  fraud  related  to  this  problem  area  is  EUR  28  million  per 
year  (see  [R5]);  however  this  figure  is  based  on  very  scarce  data  and  is  consequently  to  be 
treated with great caution (see section 1.6). 

Problem tree 

The following schema summarises the current problem. 

2.3.  Excise  –  Customs  interactions:  Export  followed  by  Transit  or  using  a  Single 
Transport Contract (hereafter: STC) 

2.3.1.  Overview of the current situation 

In  addition  to  the  combination  of  EMCS  and  ECS  other  procedures  are  sometimes  used  to 
supervise  the  export  of  excise  goods:  the  external  and  internal  transit  procedure  and  Single 
Transport  Contracts  (STC).  It  appears  that  the  use  of  these  procedures  simplify  export 
operations for economic operators because it allows them to close the export procedure at the 
start of transit or STC, and therefore completing the movement in EMCS. 

The Single Transport Contract is a multimodal contract which can be used for the export of 
goods.  Under Article 329(7) of Regulation (EU) n° 2015/2447 the export procedure is closed 
when STC starts.  As of this moment the goods may be taken over under STC by lorry, train, 
ship or plane and the mode of transport may change several times before the goods physically 

12 Source: Member State replies to stakeholders' consultation and ECS statistics (see document [R5]); all export 
movements  (23%)  that  are  closed  manually  require  also  a  manual  closure  of  the  related  excise  movements. 
More excise movements are likely closed manually due to a lack of excise-export synchronisation at national 
level but no data is available. So, 7% is the lower bond of direct movements closed manually. 

13 Source: EMCS statistics (see CIRCABC); 1300 movements with destination export are open per month, out of 

which 330 are closed by a report of export; others have to be closed manually. 

13 

MS and EO unclear about their responsibilityExcise-Export complexity(organisational, technical)Excise-Export’s legislation not explicit enoughExit results not forwarded to ExciseExport exceptions not reported to ExciseInsufficient cross-reference and data cross-checkInsufficient proof of ExitEconomic Operators: - guarantee not released- regulatory burdenMember States:- close movements manuallyMember States: fraudcausesproblemsconsequences 
 
 
                                                 
leave the Union (exception: it is not permissable to use a lorry to cross the external border of 
the  customs  territory).    Under  STC  there  is  no  further  customs  supervision  and  no  customs 
guarantee.  

The problem outlined under point 2.3.2. concerns export movements of excise goods through 
more than one Member State before exiting, i.e. the excise movement starts in one Member 
State and transits at least one more Member State before the goods exit.  If transit or STC is 
used the excise goods are not covered by EMCS which is closed when the exit is confirmed.  
In this case exit is confirmed when transit or STC starts and consequently EMCS is closed at 
that  moment,  and  not  when  the  goods  physically  leave  the  Union.    The  excise  guarantee  is 
released  in  the  Member  State  where  EMCS  is  closed.    If  the  excise  goods  thereafter  transit 
another Member State before they exit the European Union a guarantee has to cover this part 
of the movement. This is not provided for by STC arrangements and may not be usable under 
certain transit arrangements. This means that not only the budget of the Member States where 
the movement starts is concerned but as well the budget of the Member States through which 
the goods transit and the budget of the Member State of exit.   

Under  Article  329  (5)  –  (7)  of  Commission  Implementing  Regulation  (EU)  n°  2015/2447 
(Implementing  Act  of  the  Union  Customs  Code,  hereafter:  UCC/IA)  it  is  possible  to  export 
goods  by  using  the  combination  of  export  followed  by  external  or  internal  transit  or  export 
followed by STC. But the simplifications lack a legal base for excise goods in excise law. 

Under  Article  4(6)  of  Directive  2008/118/EC  external  transit  can  only  be  used  instead  of 
EMCS for non-Union goods under excise duty suspension at entry. For export of Union goods 
the use of external transit is not provided for in this article. Internal transit is not covered at all 
by Article 4(6). External and internal transit may not be used, after export, instead of EMCS, 
to move Union excise goods to the place of exit. 

Article  17(1)  (a)  (iii)  of  Directive  2008/118/EC  lacks  a  provision  to  end  a  duty  suspension 
arrangement at the Office of exit. 

Articles 20(2) and 25 of Directive 2008/118/EC require the excise movement to end and its 
guarantee to be released only when the goods have physically left the territory of the Union. 

2.3.2.  Problem Analysis 

Articles 4(6), 17(1) (a) (iii), 20(2) and 25(1) of Directive 2008/118/EC are not in line with the 
Article  329(5)-(7)  UCC/IA  as  indicated  in  point  2.3.1.  The  use  of  these  simplified  export 
procedures  may  put  the  financial  interests  of  Member  States  at  risk  if  the  guarantees  are 
released  before  the  goods  have  exited,  proofs  of  exit  are  insufficient  and  supervision  is  too 
weak. 

Under  the  Directive  the  whole  movement  of  excise  goods  must  be  secured  by  a  guarantee 
until the goods exit.  Confirmation of physical exit ends the movement and leads to the release 
of  the  excise  guarantee.    In  practice,  when  export  is  followed  by  transit  or  STC,  the 
confirmation of exit is sent by ECS before the physical exit of the goods and the guarantee is 
released too early. 

As  regards  STC  the  exit  message  is  sent  by  ECS  and  EMCS  is  closed  when  the  goods  are 
taken over by the STC in accordance with Article 333(2)(d) UCC/IA. The goods move on the 
territory  of  the  Union  without  any  excise  or  customs  supervision.  There  is  no  authorisation 

14 

 
 
 
 
 
 
 
 
requirement  for  the  use  of  STC  either.    The  supervising  responsibility  lies  with  the 
transporter. 

As  regards  internal  transit,  Article  333(2)  (c)  UCC/IA  allows  the  transmission  of  the  exit 
message before the transit procedure is discharged. Moreover, the completion of an internal 
transit  procedure  in  the  customs  territory  of  the  Union  does  not  prove  the  exit  of  goods; 
indeed,  goods  under  internal  transit  remain  Union  goods  and  customs  supervision  for  the 
Union  goods  ends  when  transit  ends.  So,  after  internal  transit  has  ended,  the  goods  might 
properly leave the territory of the Union, but they might as well stay. If they leave, they do so 
without any physical proof of exit. 

When using external transit after export the exit message is also sent when transit starts. The 
goods  move  on  the  customs  territory  of  the  Union  under  customs  supervision  and  under  a 
customs guarantee associated with the external transit procedure. Since the goods become non 
Union  goods  when  they  are  placed  under  external  transit,  customs  supervision  only  ceases 
when the goods physically exit. 

In all cases under Article 329(5) – (7) UCC/IA the excise guarantee under EMCS is released 
when  goods  are  still  moving  on  the  territory  of  the  Union.  For  external  transit  a  customs 
guarantee  also  covers  the  excise  debt  until  the  goods  exit  because  the  goods  become  non-
Union goods when placed under external transit. For internal transit a customs guarantee also 
covers the excise debt, but only until the end of transit, not until the physical exit of goods.  
For  STC  there  is  neither  an  excise  nor  a  customs  guarantee  once  the  goods  are  taken  over 
under the contract.   

For the above mentioned reasons, which clearly indicate the fiscal risk of the use of internal 
transit and STC after the export procedure for excise goods, internal transit and STC are not 
further examined. 

Magnitude of the problem 

Of the total number of export movements in 2016 99% are direct exports (the Member States 
in which the excise movements begin are the same as the Member States in which they end) 
and  are 
the  use  of 
external/internal  transit  and  STC,  where  the  goods  physically  move  through  other  Member 
States after the sending of exit results. 

therefore  of  national  responsibility.  This  percentage 

includes 

28% of all exports were carried out using the export procedure followed by external/internal 
transit and STC (14% external transit, 5 % internal transit, 9 % STC). In these cases EMCS 
was closed at the start of transit or STC. This figure also includes the possibility that EMCS 
was  not  used  at  all  where  the  excise  duty  suspension  and  the  export  control  procedures  are 
completed in the Member State of Dispatch (where excise movement begins), with only the 
following transit procedure or the STC involving more than one Member State. 

External transit 

The study shows that export followed by external transit, replacing EMCS, seems to be 
common practice (14% of all exports= 229,000 movements); but it shows as well that 
the  customs  guarantee  lodged  for  external  transit  is  sufficient  to  cover  the  fiscal  risk. 
The answers from economic operators show that external transit after export is currently 
limited to large companies. 

Internal transit 

15 

 
 
 
 
 
 
 
 
 
The  study  shows  that  export  followed  by  internal  transit,  replacing  EMCS,  seems  to 
concern  only  5%  of  all  export  movements  (80,000  movements).    Six  out  of  31 
interviewed companies used internal transit after export for more than 250 million Euro 
worth of goods.  It is primarily used by Member States having a border with a common 
transit country (e.g. Switzerland).  50% of economic operators interviewed use internal 
transit.    No  SME  declared  that  they  used  it.    The  guarantee  level  seems  sufficient  as 
long  as  the  goods  move  under  transit.    But  once  transit  ends  the  Union  goods  are  no 
longer covered by any guarantee.  There is a fiscal risk for internal transit ending in the 
EU.  

Single Transport Contract (STC) 

The  study  shows  that  export  followed  by  STC,  replacing  EMCS,  seems  to  concern 
only  9%  of  all  export  movements  (152,000  movements).    STC  presents  a  fiscal  risk 
because no excise or customs guarantee covers the movement.  The excise guarantee 
is  released  when  the  goods  are  taken  over  by  the  Single  Transport  Contract.    If  the 
growth  of  40%  in  STC  movements  in  2016  resulted  from  fraud,  it  would  mean  that 
1.5% of excise export could have been diverted to the EU market. This, in turn, would 
result  in  EUR  21  million  losses  in  excise  revenues  of  EU  MS.    12  out  of  31 
interviewed  companies  declared  the  use  of  STC  with  excise  goods.    Four  of  them 
exported yearly for more than 250 million Euro worth of goods. 

All three options under Article 329 (5)-(7) are currently used.  The estimated amount of 28% 
of  all  export  operations  (whether  direct  or  indirect)  of  excise  goods  represents  roughly 
461,000 movements.  Proportionately external transit is used the most. 

Fraud:  Fraud  in  transit  and  STC  cannot  be  observed  directly  in  statistics.    Hence,  the 
interviewed Member States and economic operators are not aware of the scale of fraud.  

16 

Use of external transit, internal transit and STC instead of EMCS, based solely on Art. 329 (5)-(7) UCC/IA - Reg. (EU) n° 2447/2015Weak evidence of excise duty  exemptionNo proof of physical exitExcise supervision ends and  EMCS guarantee is released before physical exit of goodsEconomic Operators: confusion and complexityMember States: fraud opportunitites since lack of clear guarantee provisions and no EMCS supervisioncausesproblemsconsequencesWeak supervisionLegal uncertainty 
 
 
 
 
 
 
 
 
2.4.  Excise – Customs interactions: Import 

2.4.1.  Overview of the current situation 

At  import  of  excise  goods  into  the  EU,  the  customs  declarant14  may  declare  that  the  excise 
goods  will  be  moved  to  another  Member  State  under  excise  duty  suspension  or  be  stored 
under excise duty suspension in a tax warehouse in the Member State of Importation.  

2.4.2.  Problem Analysis 

In the case of storage in a tax warehouse in the same Member State, all procedures are under 
the sole responsibility of that Member State. 

In the case of a movement to another  Member State, a cross-check between customs import 
declarations and excise electronic Administrative Documents (e-AD) or the registry of excise 
economic operators (SEED) is rarely carried out.  Therefore it is currently difficult to know if 
the goods are actually moved under duty suspension after importation. 

Moreover,  there  is  currently  no  common  list  of  requirements  for  excise  duty  exemption  at 
import. Member States have their national ones and consequently this leads to complexity and 
confusion for economic operators.  

Magnitude of the problem 

Regulatory burden: from the evaluation (see [R1]), economic operators expressed concerns over 
the  arrangements  for  importation,  with  17%  having  some  concerns,  mainly  due  to  national 
variations  in  reporting  requirements  causing  increased  administrative  and  compliance  costs.  On 
the  other  hand,  19  out  of  27  Member  States  expressed  concerns  about  the  lack  of  coherence 

14 The person who or on whose behalf the customs declaration is lodged. 

17 

Office of EntryCustoms supervisionImport declarationRelease for free circulationexemptedfromexcise dutyMS of DispatchMS of DestinationExcise supervisione-AD1) Goodsmovedto anotherMS2) Goodsstoredin sameMSTaxWarehouseNo cross-checkSEED (traders allowedto store or move excise goodsunderdutysuspension)National matterNo EU commonrequirements 
 
 
                                                 
between import procedures and the handover to EMCS, indicating that further harmonisation of 
procedures might help to alleviate administrative burden and compliance costs.  
From  the  Surveillance  database15  and  the  stakeholders'  consultation  (see  [R5]),  the  volume 
estimates are as follows: 

Volume of imports with excise goods moved under duty suspension to another 
Member State and their share in all imports of excise goods 

Import declarations 

share 

2012 
2016 
2021 

18,200 
25,860 
26,900 

+42% compared to 2012 

+4% compared to 2016 

6% 
8.3% 
9% 

Value of the 
goods16 
(billion euros) 
n/a 

36.0 
37.4 

Excise duty15 
(billion euros) 

n/a 

2.8 
2.9 

Fraud:  the  estimate  for  the  excise  fraud  related  to  this  problem  area  is  between  EUR  20 
million  (see  [R5])  and  EUR  50  million  per  year;  the  latter  figure  is  extrapolated  from  the 
assessed  intra-EU  fraud  pro-rated  to  the  volume  of  goods  moved  to  another  Member  State 
after  import17.  Both  figures  come  from  scarce  data  and  are  consequently  to  be  taken  with 
caution  (see  section  1.6).  Still,  the  significantly  higher  number  of  movements  under  duty 
suspension after import in 2016 than in 2012, which cannot be explained by economic factors, 
may be an indicator of an increase of fraudulent movements. 

Problem tree 

The following schema summarises the current problem. 

2.5.  Duty Paid Business-to-Business (B2B) 

2.5.1.  Overview of the current situation 

The  current  procedure  for  moving  goods  already  released  for  consumption  (i.e.  for  which 
excise duty has already been paid) between Member States is a paper-based procedure. B2B 
duty paid movements are covered by a paper document called the Simplified Administrative 
Accompanying Document (SAAD). It consists of three copies where the first copy is kept by 
the  Economic  Operator  that  initiates  the  movement  of  the  goods  ("the  consignor")  at  the 

15 The 

Surveillance 

database  monitors 
https://ec.europa.eu/taxation_customs/online-services/surveillance_en 

volume 

the 

of 

goods 

imported 

into 

the  EU: 

16 Assuming the value of the goods and excise duty at import (see  1.6) are proportional to the share of imports 

followed by a movement under duty suspension to another Member State. 

17 For intra-EU trade, the value of the goods and the excise duty loss in the scope of this initiative represent EUR 
270 billion and EUR 400 million per year respectively; the volume of goods moved to another Member State 
after import representing EUR 36 billion per year, the related fraud estimate is 400 * (36/270) i.e. about EUR 
50 million per year. 

18 

No common requirements for Excise duty exemptionWeak evidence ofExcise duty exemptionEconomic Operators:  - confusion and complexityMember States: fraudcausesproblemsconsequencesNo customs – excise data cross-check 
 
 
 
 
                                                 
Member State of Dispatch while the two other copies accompany the goods. At destination, 
excise duty is paid, the second copy is kept by the recipient Economic Operator and the third 
copy is returned to the Member State of Dispatch, at which point the excise duty at Dispatch 
may be refunded. 

2.5.2.  Problem Analysis 

The  procedures  for  moving  excise  goods  between  businesses  in  different  Member  States, 
where excise duties have already been paid (which should be of particular interest for small 
and medium enterprises), are out of date, unclear and burdensome. In particular, the current 
procedures are all paper-based and consequently long and inefficient. 

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.  

Magnitude of the problem 

Regulatory  burden:  from  the  evaluation  study  (see  [R2]),  it  appears  that  the  current 
arrangements  are  perceived  as  burdensome  and  inefficient  by  both  Member  States  and 
Economic Operators. 
10 out of 12 Member State administrations perceived the paper-based system as being more 
burdensome  and  time-consuming  than  automated  or  electronic  processes18.  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.  
Well over half of the B2B Economic Operators surveyed had already chosen not to move their 
products between Member States due to the current arrangements. The main reasons cited were 
high  administrative  costs  (36  Economic  Operators  out  of  44  who  replied)  and  unclear 
requirements  leading  to  legal  uncertainty  (21  Economic  Operators  out  of  44).  The  majority  of 
Economic  Operators  considered  the  duty  paid  B2B  arrangements  to  be  more  burdensome  than 
using EMCS. 

As summarised in the table here below, the duty paid B2B procedures are much less used than the 
duty  suspension  ones.  Indeed,  economic  operators  and  movements  represent  about  3%  of  the 
number  of  excise  Economic  Operator  and  movements  that  use  the  duty  suspension  procedures. 
Duty  Paid  B2B  procedures  are  mostly  used  for  alcohol  products  and  represent  an  even  smaller 
part of the total value of excise goods moved cross-border within the EU. 

Number 

% 

Comment 

18 the other 2 did not express an opinion 

19 

 
 
 
 
                                                 
Number of Economic 
Operators 

Number of 
Movements / y 

Goods value (million 
euros / y) 

6350 

3.0% 

100,000 

3.0% 

SME use mostly outbound movements  
Large companies use both in- and outbound movements 
2021 forecast: +6% compared to 2016 
Member State with highest volume: France 7%, The 
Netherlands 7%, Germany 5% 

200 

0.1%  90% of Duty Paid B2B movements are with Alcohol 

Fraud: the available data on excise fraud via Duty Paid B2B come from scarce Member State 
inputs and is assessed at EUR 20 million per year (see section 1.6 and ANNEX IV). This is 
much higher than for duty suspension procedures, proportionally to the value of the goods. 

Problem tree 

The following schema summarises the current problem. 

2.6.  Low Risk Movements 

All  current  procedures  for  moving  excise  goods  between  businesses  in  different  Member 
States  have  some  significant  cost(s)  and  effort  overhead.  They  may  also  take  some  time 
during which the goods cannot be moved or released, and the guarantee is immobilised. These 
procedures apply to all movements of goods, even  the ones for which the amount  of  excise 
duty  and  the  fiscal  risk  are  low.  In  particular,  certain  goods,  such  as  completely  denatured 
alcohol or certain energy products, are either exempt from excise duty, are taxed at very low 
rates or are sold in quantities where the excise duty charged is small in comparison with the 
economic value of the goods. 
Moreover,  Member  States  currently  seem  to  make  little  use  of  Article  3119,  because  of  the 
difficulties of negotiating bilateral or multilateral schemes. 

Low risk movements are defined for the purpose of this option as consignments whose excise 
duty is less than 1000€ or than 20% of the net value of the goods. 

However, the study contributing to the impact assessment highlighted that: 

  the definition of "low risk" generated confusion in the Member States; 

  the magnitude of the problem was uncertain as two analysis led to very different results; 

19 Simplifications via bilateral or multilateral agreements between some Member States 

20 

Paper-based proceduresWeak evidence ofduty payment at destinationEconomic Operators: - long refund, burdensomeMember States: fraudcausesproblemsconsequencesManual and long proceduresMember States:  burden- process & store papersMovements poorly monitored 
 
  
                                                 
  several  Member  States  reckoned  the  fiscal  risk  was  far  from  negligible  and  are  very 

reluctant to allow simplifications for these movements. 

Definition of low risk products 

The  vast  majority  of  respondents,  especially  those  from  MSAs,  had  significant  problems 
estimating  both  the  number  of  low-risk  movements  and  the  excise  duty  concerned.  In  fact, 
only  six  out  of  the  19  MS  that  responded  to  the  question  were  able  to  provide  any  kind  of 
answer. The most important obstacles were the lack of clarity as to what kind of movements 
should  be  classified  as  “low  risk”  or  the  belief  that  no  movement  of  goods  could  be 
considered “low risk” (Latvia explicitly reported 0 movements of the type). 

The  analysis  of  the  answers  provided  by  the  MSAs  suggests  that  despite  the  fact  that  a 
definition of “low-risk movements” was provided in the questionnaire, the understanding of 
what  constitutes  a  “low-risk  product”  is  not  clear  (for  instance,  the  Netherlands  does  not 
consider beer a low-risk good, nor does Poland consider denatured alcohol a low-risk good). 
In  fact,  “low-risk  movements”  vary  from  country  to  country,  and  the  term  is  in  itself  very 
controversial. 

The data provided by Economic Operators in questionnaires suggest that, on average, low-risk 
movements  constituted  between  1.6%  and  2.2%  of  all  their  movements.  In  terms  of  excise 
duty, its value within Economic Operator’s low-risk movements fell between 0.4% and 2.4% 
of the value of excise on all movements performed by Economic Operators. 

Furthermore, economic operators did not believe that there would be any substantial growth 
in the number of low risk movements in the next five years. 

Some Economic Operators supported this simplification but others mentioned its optionality 
and the fact that it introduced another type of arrangement for moving excise goods between 
Member States did not make it very attractive. 

To test the approach a VAT-like arrangement for goods was suggested where the excise duty 
due  was  less  than  or  equivalent  to  20%  (used as  a  proxy  for  the  VAT  rate).  Using  Intrastat 
data, the  contractor  was  able to  estimate  that  in  2015,  the  value  of  the  low-risk intra-Union 
supply of goods  such as wine and beer (CN2203, CN2204, CN2205, CN2206)—that  is, the 
supply  of  goods  between  countries  in  which  the  value  of  excise  duty  on  these  goods  was 
below the 20% threshold—amounted to approximately 46.1% of the value of the total intra-
Union supply of alcoholic beverages20. The value of the low-risk intra-Union  acquisition of 
these  goods  was  estimated  to  amount  to  approximately  23.3%  of  the  value  of  entire  intra-
Union  supply  of  alcoholic  beverages.  However,  these  estimates  are  based  on  a  comparison 
between the excise duty due in the Member State of supply compared with the VAT burden, 
but not on the excide duty rates of the Member State where the products are consumed, nor 
the excise rates for these products for Member States though which these goods are moved on 
their way to their destination. Therefore the high percentage of the volume of these products 
is  more  a  result  of  the  analysis  method,  than  a  real  estimate  of  the  possible  usefulness  of 
simplifying procedures associated with these goods. 

Still, it appears that the perception of low risk is dependent on excise duty rates. For example, 
there is a strong correlation between being a wine producing Member State and having a low 
or  zero  excise  duty  rate  on  wine.  Conversely  there  is  also  a  strong  correlation  between  not 
being a producer Member State or being a consumer Member State and having a high rate of 
duty  on  wine,  e.g.  Finland  has  an  excise  duty  rate  of  EUR 3.39  per  litre  of  still  wine,  and 

20 The same analysis for energy products and tobacco showed that the value of goods moved that fell into the 

same analysis category were negligible. 

21 

 
                                                 
Ireland has a rate of EUR 4.24 per litre. This makes such a simplification popular in producer 
Member States and very unpopular in non-producer, consumer Member States.  

The option for low risk movements was however not supported by several Member States due 
to the difficulty to unambiguously define "low risk," as the excise duty rate and consequently 
the fiscal risk varies greatly from one Member State to another. Moreover, under the existing 
arrangements it is still open to neighbouring low risk countries to make bilateral agreements. 

Therefore despite the initial attractiveness of an arrangement for low value or low risk goods 
there appears to be little justification in exploring this particular option further. 

2.7.  Exceptional Situations 

2.7.1.  Overview of the current situation 

Exceptional  situations  may  occur  during  the  movement  of  excise  goods  under  duty 
suspension: 

  Shortage:  the  quantity  of  goods  that  arrived  at  destination  is  lower  than  the  quantity 
declared at dispatch (e.g. due to part of the goods being diverted during the transport or due 
to natural evaporation of volatile goods); 

  Excess: the quantity of goods that arrived at destination is higher than the quantity declared 

at dispatch (e.g. due to an input error when declaring the goods at Dispatch);  

  Rejection:  the  consignee  informed  the  National  Authorities  and  the  consignor  that  he 

refuses to take any responsibility for the goods (e.g. because he did not order them); 

  Interruption:  a  National  Authority  cancelled  the  movement  of  excise  goods  (e.g.  after  a 

control or a total destruction of the goods). 

Moreover  a  significant  quantity  of  some  type  of  goods  might  evaporate  during  transport  or 
storage  (e.g.  evaporation  losses  in  petrol  tanks),  which  causes  a  "natural  shortage"  or  a 
"natural loss". 

These  situations  are  not  all  described  in  detail  in  the  legislation,  which  leads  to  different 
procedures and rules being used in different Member States and consequently to complexity 
and  confusion  for  Economic  Operators.  For  instance,  different  Member  States  may  have 
different ways to assess shortages and excesses and different thresholds for allowable natural 
losses.  They  may  also  have  different  ways  of  dealing  with  rejections,  interruptions  or  in  a 
review of a public authority's decision (i.e. when an organisation disagrees with a decision of 
a public authority, aka "right to be heard"). 

2.7.2.  Problem Analysis 

Uncommon, exceptional situations represent a high regulatory burden to Economic Operators. 
Depending  on  the  country,  exceptional  situations  may  lead  to  irregularities,  duty  claims, 
penalties or seizure of the goods. 

The current ambiguities in exceptional situations have the following consequences: 

  Dispute: the  details  of  an  electronic  administrative  document  (e-AD)  cannot  be  amended 
once  the  latter  has  been  accepted  by  the  Member  State  of  Dispatch,  leading  to  disputes 
about quantities and excise duty payable. While national jurisdictions usually provide some 
recourse  ("right  to  be  heard")  when  adverse  decisions  are  made,  the  ease  of  challenging 
such decisions in the field of excise seems to vary greatly. 

22 

 
 
 
  Recovery: claims against economic operators may make use of the provisions of Directive 
2010/24/EU  (the  Recovery  Directive)  if  other  requests  for  payment  of  excise  duty  are 
unsuccessful.  The  use  of  the  instruments  provided  by  the  Recovery  Directive  among 
Member States varies. In some cases they are not used at all. Moreover, there is no clear 
basis  for  linking  recovery  instruments  with  a  previous  establishment  of  an  excise  duty 
liability. 

  Follow Up: once an exceptional situation has occurred, it is unclear what follow up actions 
(e.g. return rejected goods to the location of dispatch) must or shoud be undertaken by the 
consignor or other stakeholder involved in the movement.  

Magnitude of the problem 

Regulatory  burden:  even  though  exceptional  situations  represent  a  small  part  of  all 
movements of excise goods, the related administrative burden and compliance or hassle costs 
are quite significant as illustrated in the table below. 

Movements 
Number  % 

Value of goods 

M€ 

% 

Comment 

Current volume / year 

Interruptions 
Rejections 
Excesses/Shortages 

3,400 
600 
240,000 

0.11 
0.02 
821 

Source: EMCS statistics 

54  0.02 

Source: [R5]; amount of shortages 

2021 forecast 

Member States 
Economic Operators 

+5% 
stable 

+13 to 29% 
stable 

Compared to 2016 

Note:  Member  State  expect  a  significant  increase  of  exceptional  situations  in  the  next  five 
years while Economic Operators consider they will remain at a similar level as currently. 

Cross-border  recovery  issues  are  mostly  due  to  lack  of  guarantee  on  a  disputed  movement, 
lack of familiarity with recovery tools or language22; no data from Member States is available 
on  the  volume  of  the  recovery  issues  for  excise,  such  as  the  amount  of  excise  duty  to  be 
recovered in another member State. 

21 Member States and Economic Operators report 4.6% and from 6.2 to 11.4% respectively, of their movements 

with a shortage or excess; this leads to an average of about 8%. 

22 The cost of an official translation may be higher than the debt to be recovered 

23 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                 
3.  WHY SHOULD THE EU ACT 

The EU’s right to act in the area of excise duties is established in Article 113 of the Treaty on 
the Functioning of the European Union, which permits the EU to lay down harmonised rules 
in order to ensure the proper functioning of the internal market. 

For  many  years  the  Commission  has  worked  with  Member  States  in  harmonising  and 
simplifying  customs  and  tax  administrative  procedures,  because  there  is  a  common 
understanding  that  such  initiatives  are  both  useful  and  necessary  to  the  functioning  of  the 
Single Market.  

The Commission's work in the area of excise harmonisation  has been facilitated by financial 
instruments agreed by the European Parliament and the Council. Up until 2014 the financial 
instrument in use was Fiscalis 201323. The use of this instrument was  evaluated and a Report 
from the Commission to the European Parliament, the Council, the European Economic and 
Social Committee and the Committee of the Regions.24  

The  evaluation  concluded  that  the  Fiscalis  2013  programme  contributed  to  reducing 
regulatory costs in three ways: (i) through standardising the exchange of information between 
tax  administration  (e.g.  through  e-forms),  (ii)  by  providing  platforms  for  secured  exchange 
(i.e.  the  interoperability  platform  with  all  IT  applications  therein  anchored),  and  (iii)  by 
providing common IT systems to be used directly by the tax administrations (e.g. the EMCS 
or the VIES25). The stakeholders consulted within the evaluation were not able to identify any 
national  or  international  alternatives  to  the  close  collaboration  facilitated  by  Fiscalis  2013, 
which  could  have  delivered  a  similar  or  higher  reduction  of  regulatory  cost  to  national 
administrations and economic operators. 

The scenario of achieving similar levels of cooperation acting bilaterally or multilaterally with 
EU involvement was considered inconceivable by stakeholders. The Commission’s role of a 
coordinator and facilitator was also recognised by stakeholders and it was recommended that 
it should be continued. 

Similar conclusions were reached by stakeholders in relation to IT systems:  many  of the IT 
systems are not just a ‘nice-to-haves’ but they are actually underpinning legislation (e.g. the 
EMCS  or  the  requirements  of  the  legislation  on  administrative  cooperation)  and  their 
discontinuance would put a strain on the compliance with the EU tax acquis. 

In  this  impact  assessment,  70  to  83%  of  the  respondents  in  the  stakeholders'  consultation 
consider  an  EU  action  is  useful  or  necessary  (see  also  ANNEX  II),  which  reinforces  the 
general conclusions from the evaluation of Fiscalis 201326. 

The general conclusions from the Fiscalis 2013 evaluation concerning the need for EU action 
can be applied to the specific policy options being examined here. 

23 Decision No 1482/2007/EC of the European Parliament and of the Council of 11 December 2007 establishing 
a Community programme to improve the operation of taxation systems in the internal market (Fiscalis 2013) 
and repealing Decision No 2235/2002/EC; 

24 COM(2014) 745 final 
25 VAT Information Exchange System 
26  Fiscalis  2013  has  been  superseded  by  the  Fiscalis  2020  program,  which  now  funds  excise  automation 
activities. Legal act: Regulation (EU) No 1286/2013 of the European Parliament and of the Council of 11 
December  2013  establishing  an  action  programme  to  improve  the  operation  of  taxation  systems  in  the 
European Union for the period 2014-2020 (Fiscalis 2020) and repealing Decision No 1482/2007/EC. 

24 

 
                                                 
Alignment with Customs Procedures 

Customs  and  excise  legislation  should  be  aligned.  Legal  certainty  at  EU  level  reduces 
administrative  burden  and  compliance  costs  for  economic  operators  and  Member  States 
authorities and reduces the fiscal risk.  

An  absence  of  action  at  EU  level  will  basically  leave  the  situation  as-is,  where  different 
Member State implement different rules, which creates confusion to economic operators and 
increases their costs. Currently there are no EU wide arrangements in place which allow for 
the the hand-of between customs and excise procedures. This leads to a lack of legal certainty 
and  inevitably  increased  costs,  both  for  economic  operators  and  for  competent  authorities. 
Individual  national  solutions  are  possible,  but  confront  economic  operators  with  different 
national requirements, thereby distorthing the Single Market. 

Duty Paid B2B 

The current paper-based procedures for the Duty Paid B2B movements share the weaknesses 
of the previous paper-based system for the movement of excise goods under duty suspension 
(i.e.  no  real  time  monitoring,  unclear  reporting  requirements,  vulnerability  to  fraud  and 
frequent  delays  in  the  release  of  guarantees  as  well  as  in  the  refund  process)  have  to  be 
improved  and  simplified.  National  improvements,  such  as  national  registration  of  economic 
operators and national  automation  of  movement control are of little use since the goods are 
already  released  for  consumptions  when  they  are  dispatched.  Only  improved  EU-wide 
coordination of arrangements has anadded value due to the need to share common data and to 
use common interoperability standards betten data from different Member States.  

Exceptional Situations 

Lack of a common action at EU level increases costs to both national authorities when dealing 
with  situation  that  involve  more  than  one  Member  State  and  also  to  economic  operators 
because of the use of different national rules.  

25 

 
4.  WHAT SHOULD BE ACHIEVED 

4.1.  General objectives 

The general objectives of the initiative are: 

  To  ensure  the  proper  functioning  of  the  internal  market  –  by  reducing  obstacles  to 

intra-EU cross-border trade. 

  To  safeguard  the  financial  interests  of  the  Member  States  –  by  ensuring  that  excise 

duty due are properly collected to feed national budgets. 

In  pursuing  these  objectives,  the  initiative  seeks  to  keep  a  balance  between  the  need  to 
facilitate cross-border trade and the need to ensure that effective controls are in place in order 
to  monitor  the  holding  and  movement  of  excise  goods,  and  ultimately  to  ensure  the  excise 
debt is collected (owing to the risk inherent in cross-border movements of excise goods; see 
section 1.1). 

4.2. 

Specific objectives 

The specific objectives of the initiative are: 

  To reduce tax obstacles by minimising costs for businesses and administrations 

Tax  obstacles  can  be  removed  and  administrative  and  hassle  costs  for  business  and 
administration  can  be  reduced  by  simplifying  the  current  procedures  and  by  automation 
(e.g.  duty  paid  business  to  business  procedures),  which  increases  productivity  of  staff, 
makes processing faster and immobilises guarantees for a shorter period of time. 

  To establish a clear and consistent framework for free movement of goods 

A clear and consistent framework for the free movement of excise goods can be achieved 
by  synchronising  better  excise  and  customs  procedures,  harmonizing  current  movement 
and  holding  procedures  and  defining  common  rules  at  EU  level.  This  shall  reduce 
confusion and complexity for Member States and economic operators; 

  To ensure equal treatment for businesses (neutral competition) 

Equal treatment ensures that each Member State does not directly or indirectly discriminate 
against  Economic  Operators  from  other  Member  States  by  treating  them  differently.  The 
only  example  within  the  scope  of  Directive  2008/118/EC  is  the  national  obligation  to 
appoint  a  fiscal  representative  for  distance  selling,  which  is  not  within  the  scope  of  this 
initiative; 

  To allow the proper monitoring of movements of excise goods 

The monitoring of the movement and holding of excise goods can be improved by further 
automation (e.g. automation of duty paid business to business procedures); 

  To reduce illicit trade, evasion and abuse (fraud) 

The  proper  monitoring  of  the  movement  and  holding  of  excise  goods,  more  data  cross-
checks  and  increasing  data  quality  and  consistency  contribute  to  the  reduction  of  fraud. 
Even  though  the  amount  of  excise  duty  fraud  in  the  scope  of  this  initiative,  estimated  to 
about EUR 480 million per year (see 1.6), represents only a fraction of the excise duty, it is 
still a significant amount in absolute value, worth reducing. 

26 

 
The following schema illustrates which specific objectives meet which general objectives. 

4.3.  Linking the objectives to the problems 

Table 1: Links objectives-problems 

Specific objectives 

Link to the problems  

reduce 

To 
tax  obstacles  by 
minimising  costs  for  businesses 
and administrations 
To establish a clear and consistent 
framework for free movement of 
goods 
To allow the proper monitoring of 
movements of excise goods 

Addresses the problems of excise-export interactions, duty 
paid  business-to-business  and  exceptional  situations  (see 
2.2, 2.5 and 2.7) 
Addresses all problems described in this initiative 

Addresses the problems of excise - customs interactions27, 
duty paid business-to-business (see 2.2 to 2.5) 

To reduce illicit trade, evasion 
and abuse (fraud) 

Addresses  the  problems  of  excise  –  customs  interactions 
and of duty paid business-to-business (see 2.2 to 2.5) 

4.4.  Assessment criteria 

All  solutions  (policy  options)  envisaged  to  fix  the  problems  are  assessed  based  on  the 
following criteria: 

  Regulatory costs and benefits – 

benefits can be direct benefits or cost savings; in most cases, the costs and benefits are 
quantified;  in  the  rare  cases  where  not  enough  data  is  available,  a  qualitative* 
assessment is used for comparing policy options. The following split of regulatory costs 
and benefits is available in this report: 

o  Administrative costs and benefits for Member States 
o  Enforcement costs and benefits for Member States 
o  Regulatory costs and benefits for Economic Operators 

27 For the excise-customs interactions, the problem addressed is to ensure there are no breaks in the monitoring of 

movements between the excise supervision and the customs one. 

27 

Reduce tax obstacles by minimising costs for businesses and administrationsEstablish a clear and consistent framework for free movement of goodsAllow the proper monitoring of movements of excise goodsReduce illicit trade, evasion and abuse(fraud)Ensure the proper functioning of the internal marketSafeguard the financial interests of the Member StatesGeneral ObjectivesSpecific ObjectivesEnsure equal treatment for business (neutral competition)** this specific objective is not targeted by this initiative 
 
 
 
 
 
                                                 
This  criterion  is  used  for  assessing  if  specific  objectives  "reduce  tax  obstacles  by 
minimising costs" and "establish a clear and consistent framework for free movement of 
goods" are reached. 

  Market  and SMEs  –  this  criterion assesses  the  impact  on the  market  of trading  excise 
goods  and  on  the  excise  business  of  Small  &  Medium  Enterprises;  a  qualitative* 
assessment is used for comparing policy options. 
This  criterion  is  used  for  assessing  if  specific  objectives  "reduce  tax  obstacles  by 
minimising costs" and "establish a clear and consistent framework for free movement of 
goods" are reached. 

   Fraud – this criterion assesses the impact on the fight against excise fraud; some figures 
are provided in the impact assessment text of chapter 8; however these figures are based 
on scarce data and are treated with caution; hence when comparing policy options, only 
a qualitative* assessment is used.  
This  criterion  is  used  for  assessing  if  specific  objectives  "reduce  illicit  trade,  evasion 
and  abuse"  and  "allow  the  proper  monitoring  of  movements  of  excise  goods"  are 
reached. 

  Effectiveness and Efficiency – these criteria assess how cost-effective policy options are 
and  how  well  they  would  actually  address  the  problem;  a  qualitative*  assessment  is 
made,  actually  consolidating  the  assessment  of  the  previous  criteria  (regulatory  costs 
and benefits, market & SMEs, fraud).  
These criteria are used for all specific objectives. 

*  Qualitative assessments use a series of '-' minus (for negative impact) and '+' plus signs (for 
positive impact). A higher number of '+' or '-' means that, within a given problem area, an 
option has a more positive or negative impact respectively than others. 

4.5.  Consistency with other EU policies and with the Charter for fundamental rights 

The main objectives of the initiative are lowering regulatory costs for Member States and for 
Economic  Operators  trading  excise  goods  across  the  EU  and  reducing  cross-border  excise 
fraud. 

Reducing  administrative  burdens,  particularly  for  SMEs,  is  also  an  important  objective 
highlighted in the EU’s growth strategy for the coming decade (Europe 2020 – A strategy for 
smart, sustainable and inclusive growth28). 

As  excise  duty  and  VAT  are  usually  collected  at  the  same  time  and  location,  the  policy 
options of this initiative propose a similar approach to VAT, wherever applicable and possible 
given the inherent fiscal risk of excise goods. 
It would also be consistent with the EU objectives under REFIT29. 

The objectives envisaged do not affect fundamental rights. 

28 http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=COM:2010:2020:FIN:EN:PDF 
29 Regulatory Fitness and Performance programme: 

http://ec.europa.eu/info/law/law-making-process/overview-law-making-process/evaluating-and-improving-
existing-laws/reducing-burdens-and-simplifying-law/refit-making-eu-law-simpler-and-less-costly_en 

28 

 
                                                 
 
5.  WHAT ARE THE VARIOUS OPTIONS TO ACHIEVE THE OBJECTIVES 

5.1.  Excise – Customs interactions: Export 

Several policy options are envisaged:  

  Option 1: Do nothing (baseline) 

  Option 2: Data cross-check 

  Option 3: Automated process synchronisation 

  Option 4: EU common list of Alternate Proofs of Exit 

They are summarised in the figure here below and detailed here after. 

5.1.1.  Option 1: Do nothing (baseline) 

This policy option leaves the current situation as-is. 

5.1.2.  Option 2: Data cross-check 

This  policy  option  is  a  systematic  cross-check  of  data  between  the  customs  export 
declarations and the excise declarations (e-AD), which aims at reducing fraud. The data cross-
check may be automated or manual, up to each Member State's decision30. This option would 
be  mandatory  for  indirect31  movements  of  excise  goods  with  destination  export  and 
recommended for direct movements. 
This  policy  option  would  oblige  the  declarant32  to  provide  the  reference  of  the  excise 
movement (aka Administrative Reference Code) and of its consignor (aka SEED number) in 
the export declaration. 

Two types of data cross-checks are proposed and assessed. The first one verifies that the ARC 
and SEED  numbers referred to  in  the export  declaration exist in the excise  systems and are 
valid33, on a per-export-declaration basis. The second type would be a more thorough cross-

30 For  instance,  Member  States  with  a  low  volume  of  export  movements  of  excise  goods  may  assess  that  the 

automation of data cross-check is not worth the IT costs associated with automation. 

31 see section 2.2.2 for the definition of "direct" and "indirect" movements 
32 The person lodging the customs export declaration 
33 For instance, that the excise movement related to the export declaration is in state "being exported" and the end 

date of the SEED number has not expired 

29 

 
 
                                                 
check,  which,  in  addition  to  the  above,  would  also  verify  on  a  per-export-declaration  basis 
that the goods descriptions in the export declaration and in the excise e-AD are consistent. 

The  consequences  of  a  mismatch,  such  as  encouraging  the  export  declarant  to  correct 
mistakes  (if  any),  refusing  the  export  release  or  claiming  excise  duty,  would  be  up  to  each 
Member State according to their national policy and risk analysis. 

5.1.3.  Option 3: Automated process synchronisation 

This  policy  option  automates  the  synchronisation  of  the  movements'  status  between  excise 
and customs IT systems34, which aims at reducing the administrative burden of movements' 
manual closures, as well as the duration of an excise movement with export.  

This  automated  synchronisation  would  automatically  close  EMCS  movements  (and  release 
the excise guarantee) when positive exit results are provided by the Customs Office of Exit. It 
would also allow to take EMCS corrective action (e.g. change of destination) when the export 
declaration is invalidated or is never lodged. 

This  option  would  be  mandatory  for  indirect31  movements  of  excise  goods  with  destination 
export and recommended for direct movements. 

5.1.4.  Option 4: EU common list of Alternate Proofs of Exit 

This  policy  option  would  legally  establish  a  common  list  of  documents  that  would  be 
accepted as  an  alternate proof of  exit  of goods by the national excise authorities. Given the 
high fiscal risk related to excise goods, this list would be a subset of the one accepted by the 
Customs authorities (see UCC Implementing Act (EU) 2015/2447 Article 335(4)). 

5.2.  Excise – Customs interactions: Export followed by Transit or using STC 

The following policy options are envisaged:  

   Option 1: Do nothing (baseline) 

  Option  2:  Authorise  the  use  of  external  transit  after  the  export  procedure  for    Union 

excise goods 

5.2.1.  Option 1: Do nothing (baseline) 

This policy option leaves the current situation as-is. 

5.2.2.  Option 2: Authorise the use of external transit after the export procedure for excise 

Union goods  

This policy option allows economic operators to use a simplified way to export excise goods 
by using the external transit procedure after export instead of using EMCS until the external 
border.  This policy option would provide adequate guarantee management and would prevent 
goods from disappearing at destination, as the goods, which have become non-Union goods 
with the start of external transit, would be under customs supervision until the goods exit the 
customs  territory.    The  transit  guarantee  covers  the  excise  debt  under  Article  226(1)  (b)  of 
Regulation  (EU) n° 952/2013.   However, this option would imply  an amendment  to  Article 
189 of Commission Delegated Regulation (EU) 2015/2446 in order to include the possibility 

34 EMCS (see section Error! Reference source not found.) for excise and AES (Automated Export System) for 

customs 

30 

 
 
                                                 
to place Union excise goods under external transit. Articles 4(6), 17(1)(a)(iii), 20(2) and 25(1) 
of  Directive  2008/118/EC  would  need  to  be  amended  in  order  to  allow  the  use  of  external 
transit instead of EMCS to move the goods until the external border.   

5.2.3.  Discarded options 

Internal transit and the Single Transport contract (STC) do not present an option because they 
are inherently too risky. Whereas economic operators may use external transit, internal transit 
and STC after the export procedure to take the goods out of the customs territory of the Union 
under  Article  329(5)-(7)  or  Reg.  (EU)  n°  2015/2447,  only  external  transit  would  be 
considered a fiscally safe solution for excise goods. 

Goods placed under internal transit, in accordance with Article 329(6) of Regulation (EU) n° 
2015/2447, do not have this fiscal security. The excise guarantee would be released at the start 
of transit by the Office of Exit which is at the same time the Office of Departure for transit 
and not when the goods leave the EU. Goods remain Union goods. Where the internal transit 
procedure  ends  in  the  customs  territory  of  the  Union,  the  customs  supervision  ends  and  no 
physical proof of exit exists. If goods disappear after the end of the transit procedure it will be 
difficult  to  recover  the  excise  debt.  Where  the  internal  transit  ends  in  a  common  transit 
country the New Computerized Transit System (NCTS) confirms arrival in that country, but 
exit is certified at the start of transit by the office of exit which is at the same time the office 
of departure for transit. 

For  goods  placed  under  STC,  in  accordance  with  Article  329(7)  of  Regulation  (EU)  n° 
2015/2447, the excise guarantee would be released when the goods are taken over under this 
contract because this is the moment when exit is confirmed.  The goods would move through 
the  EU  without  customs  supervision  and  no  customs  guarantee.  Since  it  is  a  multimodal 
contract,  it  is  even  common  that  modes  of  transport  change  whilst  the  goods  transit  several 
Member States before leaving the EU.  If goods disappear before they leave the EU it will be 
difficult to recover the excise debt. 

Excise goods placed under external transit, where authorised by customs law, would become 
non Union goods and would be under customs supervision. The customs guarantee ensures as 
well the excise duties. 

Changing the general rules for the use of internal transit and STC after export only for excise 
goods in order to render these procedures fiscally safe would be unproportioned. 

However, in order to allow the use of external transit after export for excise goods only one 
Article in the customs legislation (Article 189 of Regulation (EC) n° 2015/2448) needs to be 
modified. A legal proposal to change this article is currently in Inter-service Consultation at 
the Commission.  

5.3.  Excise – Customs interactions: Import 

The following policy options are envisaged:  

  Option 1: Do nothing (baseline) 

  Option 2: Data cross-check 

5.3.1.  Option 1: Do nothing (baseline) 

This policy option leaves the current situation as-is. 

31 

 
 
5.3.2.  Option 2: Data cross-check 

In  order  to  help  reduce  fraud,  this  policy  option  envisages  the  mandatory  addition  of  a  few 
data items (SEED numbers and ARC) at import and to systematically cross-check some data 
between  the  customs  import  declarations  and  the  excise  e-AD.  Three  types  of  cross-checks 
are being considered.  
The  first,  an  data  cross-check,  would  require  SEED  numbers  of  the  consignor  and  of  the 
consignee35  to  be  included  in  the  import  declaration  and  would  cross-check  their  existence 
and validity automatically on a per-import-declaration basis.  
The  second  data  cross  check  is  in  addition  to  the  one  above,  would  require  the  EMCS 
movement's Administrative Reference  Code  (ARC)  to  be included in the import declaration 
and  would  cross-check  its  existence  and  validity  automatically  on  a  per-import-declaration 
basis;  this  requires  new  interactions  between  the  national  import  system  and  the  national 
excise application of EMCS.  
The  third  and  most  advanced  data  cross-check,  in  addition  to  the  two  above,  would  also 
verify, on a per-import-declaration basis, that the goods description in the import declaration 
and in the excise e-AD is consistent. 

The data cross-checks may be automated or manual, up to each Member State's decision36. 

This policy option would also establish common requirements for moving excise goods under 
duty  suspension  after  import;  these  requirements  would  be  similar  to  the  ones  used  for 
importing goods under VAT exemption37. 

35 The  consignor  and  consignee  are  the  Economic  Operators  which,  after  import,  dispatch  and  receive  excise 

goods respectively. 

36 For instance, Member States with a low volume of movements of excise goods after import may assess that the 

automation of data cross-check is not worth the IT implementation and recurring costs. 

37 Directive 2006/112/EC (the " VAT directive") article 143 (2) specifies that the following information must be 
provided for VAT exemption at import: VAT identification numbers of the person liable for VAT at the MS of 
Importation  and  of  the  customer  as  well  as  an  evidence  of  transport  or  dispatch  to  another  Member  State 
(Member States may provide that the latter be indicated to the competent authorities only upon request). 

32 

Office of EntryCustoms supervisionImport declarationRelease for free circulationexemptedfromexcise dutyMS of DispatchMS of DestinationExcise supervisione-AD1) Goodsmovedto anotherMScross-checkSEED (EO allowedto store or move excise goodsunderdutysuspension)a) SEED numbersb) a + ARC   (requiresimport –excise processesinteractions)c) b + goodsdescription   (more complexdata cross-check)EU VAT-likecommonrequirements 
 
 
 
 
                                                 
5.4.  Duty Paid Business-to-Business 

The following policy options are envisaged:  

  Option 1: Do nothing (baseline) 

  Option 2: Registration of Economic Operators 

  Option 3: Automation of Duty Paid B2B processes by extending EMCS 

5.4.1.  Option 1: Do nothing (baseline) 

This policy option leaves the current situation as-is. 

5.4.2.  Option 2: Registration of Economic Operators 

Under this policy option the duty paid B2B economic operators will be registered in a central 
register. The registration of the duty paid B2B movement will be available via  extension of 
SEED  –  System  for  the  Exchange  of  Excise  Data  currently  used  for  the  registration  and 
authorisation  data  of  duty  suspension  movements,  by  adding  new  economic  operators 
involved in a duty paid procedure. It is assumed that the registration process will be lighter, 
such  as  a  VAT-number-based  registration.  It  will  be the  responsibility  of  the  Member  State 
Administration  to  register  in  the  central  register  all  traders  that,  after  the  fulfilment  of 
necessary  conditions,  are  allowed  to  use  duty  paid  B2B  procedures.  The  creation  of  a 
common  registration  system  will  allow  Member  States  other  than  the  Member  State  of 
Registration  to  check  information  about  the  economic  operator  in  question  and  therefore 
facilitate  controls  and  administrative  cooperation.  In  an  automated  environment  the 
registration number is necessary to identify the economic operator in the computerised system 
unambiguously. 

5.4.3.  Option 3: Automation of Duty Paid B2B processes by extending EMCS 

This  option,  in  addition  to  the  previous  one  (registration  of  economic  operators  in  a  central 
register), would automate the B2B duty paid procedures, EU-wide. In other words, the current 
paper-based procedures would be replaced by computer-based ones,  by extending EMCS to 
B2B duty paid movements, processes, data and rules. More specifically, to enable the proper 
operation  of  the  enhancement  EMCS,  SEED  must  contain  the  information  about  duty  paid 
B2B Economic Operators. 

5.5.  Exceptional Situations 

The following policy options are envisaged:  

  Option 1:  Do nothing (baseline) 

  Option 2:  Specify a common approach supported by legislation and guidelines 

5.5.1.  Option 1: Do nothing (baseline) 

This policy option leaves the current situation as-is. 

A number of issues regarding exceptional situations (estimated to occur during approximately 
4.6%  excise  movements)  currently  exist,  causing  increased  risk  of  fraud,  administrative 
burden  for  Member  States,  and  uncertainty  and  risk  of  penalties  (as  well  as  certain 
administrative costs) for the Economic Operators.  

33 

 
Finally,  related  to  the  issue  of  exceptional  situations  is  the  uncertainty  regarding  the 
processing  of  recovering  duties  from  an  Economic  Operator  residing  in  another  Member 
State. This was considered a problem by a number of Member States, although they were not 
able to provide any numerical values regarding the costs borne. 

5.5.2.  Option 2: Specify a common approach supported by legislation and guidelines 

Description 

This policy option is a set of changes, which would  

  enhance the current excise IT systems and support them with a more detailed legal base via 

amendments to Directive 2008/118/EC or to implementing regulations; or 

  provide guidance and better inform Member States and economic operators of the existing 

EU legislation on metrology. 

Quantitative  assessment  for  shortages  and  excesses:  the  Commission  would  provide 
information  on  the  applicability  of  EU  metrology  directives  and  of  the  necessity  of  using 
certified equipment when measuring quantities of excise goods: the metrology directives are 
there  to  ensure  quantities  are  measured  in  a  common  way  in  all  Member  States  and  are 
already in force; consequently there is no need for any legislation action. 

Introduction  of  compulsory  reports  in  case  of  destructions,  losses,  and/or  thefts  during 
movements:  this  option  would  require  Economic  Operators  to  inform  their  national  excise 
authorities when such an event occurs; it would make a contribution towards the fight against 
fraud.  

Allowable losses: a set of standardised allowable loss thresholds would be developed for each 
type of excisable good. The rules would recognise that different tolerance thresholds may be 
needed not only depending on the nature of the good itself, but also on the way in which it is 
moved as well as atmospheric conditions in the country/countries at the time when the goods 
in question are under transport (e.g. humidity and air temperature)38. 

Right to be heard: the concept of the ‘Right to be Heard’, similar to the one written into the 
Union Customs Code39, would be introduced in Directive 2008/118/EC. The Union Customs 
Code  (Art.  22(6)),  Delegated  Regulation  (EU)  2015/2446  (Articles  8  and  10)  and 
Implementing  Regulation  (EU)  2015/2447  (Articles  8  and  9)  state  that  a  person  (or  an 
economic  operator)  has  a  right  to  be  heard  whenever  customs  authorities  “intend  to  take  a 
decision—following an application or not—that would adversely affect the person to whom 
the decision is addressed” and establishes time limits and exemptions from the requirement, 
and  the  procedures  to  be  followed  in  implementing  this  requirement.  There  is  currently  no 
equivalent in the Directive 2008/118/EC. Most importantly, the ease of making representation 
or  challenging  adverse  decisions  in  the  field  of  excise  seems  to  vary  greatly  between 
individual national jurisdictions. The introduction of a common “right to be heard” in cases of 
suspected shortages or excesses, uniform across the EU, was, therefore, suggested to reduce 
uncertainty for economic operators and administrative burdens for Member States. In terms of 
benefits  expected  from  the  introduction  of  the  standard  right  to  be  heard,  EOs  mentioned 
legal  certainty, 
“consistency  across  MS  when  dealing  with 
transparency,  and  uniformity  of  legal  procedures  throughout  the  EU,  more  opportunities  to 
explain themselves in case of a dispute, and decreased administrative burden. 

intra-EU  movements”, 

38 An empowerment would be introduced in the revised Directive, authorising the definition of thresholds in an 

implementing regulation, and the basis for such calculations 

39 (EU) 952/2013   article 22(6) 

34 

 
                                                 
Enhanced EMCS procedures to support the right to be heard: as part of the implementation of 
the right to be heard the current  processes in  the excise IT systems would  be enhanced and 
given  a  legal  base  by  the  above.  EMCS  currently  provides  optional  support  for 
communication with economic operators about discrepancies reported on the receipt of excise 
goods.  An  implementing  or  delegated  provision,  based  on  Directive  2008/118/EC,  would 
support  the  exchange  of  data  relevant  to  exceptions  between  concerned  Member  States  and 
economic operators, thereby supporting the right to be heard. It would also provide a basis for 
collecting agreed  data relevant  to  potential  claims, which could also be used  as  information 
for notification and recovery instruments under the Recovery Directive.40  

40 The  level  of  recourse  to  the  Recovery  Directive  varies  between  Member  States,  partly  because  of  differing 
national practices concerning guarantee management. Some Member States will immobilise part of a guarantee 
until  any  discrepancies  and  potential  claims  that  arise  from  them  are  resolved.    Others  treat  guarantees  as  a 
source of payment of last resort where requests for payments have been unsuccessful. Since practice varies so 
widely, it was decided to restrict the policy option to harmonising claim information, which could then be used 
for requests for payment and for potential claims under the Recovery Directory. 

35 

 
 
                                                 
6.  WHAT ARE THE IMPACTS OF THE DIFFERENT POLICY OPTIONS 

6.1.  Excise – Customs interactions: Export 

6.1.1.  Do nothing (baseline) 

Over the next five years both Member States and Economic Operators expect a total increase 
of 2% of the number of manually closed excise movements with destination export. The share 
of manually closed movements is expected to decrease slightly (from 23% in 2016 to 21% in 
2021). 

Consequently,  the  problem  will  slightly  worsen  as  Member  States'  administrative  costs, 
Economic Operators' hassle costs and fraud are expected to increase by 2% in absolute value 
over the next five years. 

No significant changes in the market structure are envisaged over the next five years. 

6.1.2.  Data cross-check 

This  option  would  require  Economic  Operators  to  provide  extra  information  (references  to 
excise documents, i.e. ARC for the declaration of the excise movement and SEED numbers 
for the authorisations of moving excise goods) in each export declaration. This increases the 
compliance  costs  to  an  EU-wide  amount  assessed  at  6.61 million  over  5  years,  i.e.  at  about 
EUR  1.32  million  per  year.  Out  of  18  Economic  Operators  in  the  targeted  stakeholders' 
consultation that replied to the question, 18 and 9 considered a data cross check of references 
and of goods desription should be introduced respectively. In the Open Public Consultation, 
68%  of  the  respondents  who  provided  an  anwer  considered  data  cross-check  useful  or  very 
useful. 

This option would also require an evolution of Member States customs and excise IT systems 
to  implement  the  data  cross-checks,  which  increases  their  enforcement  costs.  Based  on  an 
analysis of impacted IT tasks and messages (see Annex IV) and on replies from three Member 
States  in  the  stakeholders'  consultation,  the  total  cost  of  the  IT  systems  over  five  years  is 
assessed  EU-wide  at  EUR  8.68  and  33.6  million  for  the  checking  of  references  (ARC  and 
SEED numbers) and of goods description respectively. 
On  the  other  hand,  extrapolating  EU-wide  the  replies  from  five  Member  States  in  the 
stakeholders'  consultation,  the  automation  of  data  cross-checks  would  reduce  the  customs 
authorities' administrative costs by EUR 725,000 per year. 

As highlighted by Member States replies to the stakeholders' consultation, data cross-checks 
would help reduce fraud, with the more advanced cross-check having a more positive impact 
on fraud reduction. This impact is difficult to quantify however as very few MS provided an 
opinion41. Out of 18 Member States that replied to the question, 17 and 15 considered a data 
cross check of references and of goods desription should be introduced respectively. 

This option is not expected to have any impact on the market or on SMEs, as most Economic 
Operators involved in export are large companies. 

Even though they may vary significantly depending on each member State's IT architecture, 
legacy systems, etc. the enforcement costs are still quite uniformly distributed among Member 
States  as  the  requirements  and  IT  implementation  effort  are  similar.  However,  the  benefits 

41 One  MS  stated  it  could  decrease  fraud  by  50%  and  two  other  MS  that  it  would  definitely  have  a  positive 

impact 

36 

 
                                                 
will be higher for Member States with high excise duty rates (i.e. which have a higher risk of 
excise fraud) or a high volume of movements. 

6.1.3.  Automated process synchronisation 

This  option  requires  an  evolution  of  Member  States'  customs  and  excise  IT  systems  to 
synchronise  processes  between  excise  and  export  applications,  which  increases  their 
enforcement costs. Based on an analysis of impacted IT tasks and messages (see Annex IV), 
the total cost of the IT systems over five years is assessed EU-wide at EUR 67.2 million. This 
high cost is due to a quite high number of IT processes, tasks and messages that have to be 
modified on both excise and export IT systems.  

It reduces administrative  costs for Member States and hassle costs for Economic Operators. 
Extrapolating the replies in the stakeholders' consultation, the yearly cost savings are assessed 
EU-wide  at  EUR  2.64  million  for  Member  States  and  EUR  2.57  million  for  Economic 
Operators. 

This option is not expected to have any impact on the market or on SMEs. 

The  enforcement  costs  are  distributed  quite  uniformly  among  Member  States  as  the 
requirements and IT implementation effort are similar. However, the benefits will be higher 
for Member States with a high volume of movements. 

It must be noted that the automated synchronisation of the excise and export processes brings 
benefits  only  if  exit  results  are  sent  by  the  Office  of  Exit,  which  is  not  at  all  the  case 
currently42. Otherwise, both export and excise procedures will remain open anyway, waiting 
for the exit of the goods to be notified.  

Out  of  17  Member  States  and  21  Economic  Operators  in  the  targeted  stakeholders' 
consultation,  16  and  21  respectively  considered  the  automation  of  process  synchronisation 
should be introduced. 

6.1.4.  EU common list of Alternate Proofs of Exit 

This option has a negligible cost and provides great benefits by reducing legal uncertainty and 
process complexity, for Economic Operators and Member States alike. Based on the replies 
from  the  stakeholders'  consultation,  the  administrative  cost  savings  for  Member  States  is 
assessed  EU-wide  at  about  EUR  870,000  per  year  and  the  compliance  cost  savings  for 
Economic Operators at EUR 1.31 million per year. For the latter this represents a cost saving 
of about EUR 4.9 per movement. 

This option might have a slightly positive impact on SMEs and on the market by reducing the 
learning  curve  on  documents  to  be  accepted  across  the  EU  and  consequently  making  the 
processing of manually closed excise movements easier and faster. 

Out  of  19  Member  States  and  23  Economic  Operators  in  the  targeted  stakeholders' 
consultation,  16  and  20  respectively  considered  a  common  list  of  Alternate  Proofs  of  Exit 
should be introduced. 

42 Currently,  almost  all  excise  movements  that  are  closed  manually  are  closed  so  because  exit  results  are  not 

submitted (see section 2.2). 

37 

 
                                                 
6.2.  Excise – Customs interactions: Export followed by Transit or using STC 

6.2.1.  Do nothing (baseline) 

Financial impact: 

-  Administrative  costs  for  Member  States'  administrations  (+13.1%  in  absolute 

terms over 5 years): 

  Administrative  costs  will  grow  in  line  with  the  number  of  movements.    The 
number of external transit movements is expected to increase by 28.9%, internal 
transit to decrease by 7% and STC movements will stay roughly unchanged. 

-  Enforcement costs for Member States' administrations (0): 
  No substantial enforcement costs are envisaged. 

-   Administrative,  compliance  and  hassle  costs  for  economic  operators  (+13.1%  in 

absolute terms over 5 years): 

  Costs borne by economic operators will grow proportionally with the number of 
movements.  The number of external transit movements is expected to increase by 
28.9%, internal transit to decrease by 7%, whereas the number of STC movements 
will stay roughly unchanged. 

-  Impact on fraud (0): 

If internal and external transit and STC continue to be used after export, fraudsters 
will continue abusing the system.  Using STC in Member States where guarantees 
were not lodged for STC may cost Member States EUR 21 million per year. 

-  Market effects on SMEs Efficiency (0): 
  No changes in the market structure over the next five years are envisaged. 

Impact of missing legal alignment of excise and customs legislation: 

Some  Member  States  would  continue  to  allow  the  use  of  external  and/or  internal 
transit and/or STC without having a legal base in excise law, others would not.  The 
"do nothing" option would contribute to the lack of legal and procedural certainty for 
Economic Operators.  

6.2.2.  Authorise  the  use  of  external  transit  after  the  export  procedure  for  excise  Union 

goods  

Financial impact 

-  Administrative  costs  for  Member  States'  administrations  (+14,  2%  in  absolute 

terms over 5 years): 

  Administrative  costs  will  grow  in  line  with  the  number  of  movements  (the 
administrative costs being similar for internal and external transit and STC).  The 
number  of  external  transit  movements  is  expected  to  be  14.2%  higher  than  the 
number of internal and external transit and STC today. 

-  Enforcement costs for Member States' administrations (0): 
  No  substantial  enforcement  costs  are  envisaged.  Directive  2008/118/EC  and  its 
implementing regulations and in the UCC/IA and UCC/DA need to be modified. 

38 

 
 
 
No changes in the existing excise and transit systems, are needed.  However the 
prohibition  of  the  use  of  internal  transit  and  STC  for  excise  goods  need  to  be 
reflected in the national export systems; no data is available and it is expected to 
lead to very limited costs. 

-  Administrative, compliance and hassle costs for economic operators (+): 

In  general, the costs borne by economic operators will  grow proportionally with 
the number of movements.  The number of external transit movements is expected 
to  be  14.2%  higher  than  the  number  of  internal  and  external  transit  and  STC 
today.  However, due to increased legal certainty, hassle costs will go down, and 
so  will  be  the  per  movement  burden  on  economic  operators.    For  Economic 
Operators this option would not entail learning costs since most of them, also the 
ones using internal transit and STC, use external transit already. 

-  Impact on fraud (++): 
  Covering  with  sufficient  guarantee  all  movements  with  destination  export  will 
substantially reduce fraud especially in Member States, where guarantees are not 
lodged  for  STC.      Compared  with  dynamic  baseline  scenario,  gains  of  EUR  21 
million  per  year  could  be  envisaged.    Since  there  are  no  large  enforcement  cost 
envisaged,  eliminating  fraud  by  the  analyzed  policy  option  would  be  cost-
effective. 

-  Market effects on SMEs Efficiency (0): 
  No  direct  impact  envisaged.    Indirect  impact  on  market  price  through  fraud 

reduction could be expected. 

Impact  of  legal  alignment  of  excise  and  customs  legislation  by  allowing  the  use  of 
export followed by external transit 

The  possibility  to  use  external  transit  instead  of  EMCS  will  facilitate  trade    whilst 
securing  the  excise  debt.    Currently  already  14%  of  all  exports  are  carried  out  by 
using external transit.   

Customs legislation, i.e. Article 189 UCC/DA, has to be modified in order to  allow 
excise Union goods to be placed under external transit. 

Excise legislation, i.e. Articles 4(6), 17(1)(a)(iii), 20(2) and 25(1) has to be modified 
in order to allow the use of external transit at export, to allow for the office of exit to 
become an excise destination and in order to convey the responsibility to secure the 
excise debt to the external transit procedure. 

The alignment of the two legislations would create legal certainty for the traders.  It 
would as well allow for uniform application of law. 

The  option  would  constitute  a  choice.  The  Economic  Operators  would  be  able  to 
chose between the use of export followed by external transit and the normal export 
procedure without the use of external transit.  

39 

 
 
 
6.3.  Excise – Customs interactions: Import 

6.3.1.  Do nothing (baseline) 

The number of movements of excise goods under duty suspension after import is expected to 
increase by 4% from 2016 to 2021 and their share in all imports to increase from 8.3% to 9% 
(see section 2.2). 

Consequently,  the  problem  will  slightly  worsen  as  Member  States'  administrative  costs, 
Economic Operators' hassle costs and fraud are expected to increase over the next five years 
in the same proportion as the number of movements. 

No changes in the market structure are envisaged over the next five years. 

6.3.2.  Data cross-check 

This  option  would  require  Economic  Operators  to  provide  extra  information  (references  to 
excise documents, i.e. ARC for the declaration of the excise movement and SEED numbers 
for  the  authorisations  of  moving  excise  goods)  in  each  import  declaration.  Based  on  the 
replies  to  the  stakeholders'  consultation,  this  increases  the  compliance  costs  to  an  EU-wide 
amount  assessed  at  EUR  260,000  per  year.  It  is  assumed  that  the  compliance  costs  for 
providing  only  SEED  numbers  would  be  half  of  it,  i.e.  EUR  130,000  per  year.  Out  of  16 
Economic Operators that replied to the question, 14, 13 and 4 considered a data cross check of 
SEED numbers, of ARC and of goods desription should be introduced respectively. 
Though  it  is  expected  that  common  EU  requirements  on  moving  excise  goods  under  duty 
suspension  after  import  would  reduce  hassle  costs  of  Economic  Operators  by  reducing  the 
complexity of provisions across different Member States, no specific data is available on the 
amount of such hassle cost savings. 

This option would also require an evolution of Member States customs and excise IT systems 
to  implement  the  data  cross-checks,  which  increases  their  enforcement  costs.  Based  on  an 
analysis of impacted IT tasks and messages (see ANNEX IV), the total cost of the IT systems 
over five years is assessed EU-wide at EUR 6.8, 9.6 and 12 million for the checking of SEED 
numbers, of ARC and of goods description respectively. Replies from the only two Member 
States that provided a quantified cost assessment in the stakeholders' consultation were both 
below these figures, which suggests that they are upper bonds. 

As highlighted by Member States replies to the stakeholders' consultation, data cross-checks 
would help reduce fraud, with the most advanced cross-check having a more positive impact 
on fraud reduction. This impact is difficult to quantify however as very few MS provided an 
opinion43.  According  to  Member  States'  replies  to  the  stakeholdeholders'  consultation,  the 
"medium" cross-check (SEED numbers and ARC) would not reduce fraud compared to cross-
checking  only  SEED  numbers.  Out  of  18  Member  States,  18,  17  and  13  considered  a  data 
cross  check  of  SEED  numbers,  of  ARC  and  of  goods  desription  should  be  introduced 
respectively. 

This option is not expected to have any impact on the market or on SMEs, as most Economic 
Operators involved in import are large companies. 

43 One Member State stated it could decrease fraud by 50% and two other Member States that it would definitely 

have a positive impact. 

40 

 
 
                                                 
Even though they may vary significantly depending on each member State's IT architecture, 
legacy systems, etc. the enforcement costs are still quite uniformly distributed among Member 
States  as  the  requirements  and  IT  implementation  effort  are  similar.  However,  the  benefits 
will be higher for Member States with high excise duty rates (i.e. which have a higher risk of 
excise  fraud)  or  a  high  volume  of  movements  of  excise  goods  under  duty  suspension  after 
import. 

6.4.  Duty Paid Business-to-Business 

6.4.1.  Do nothing (baseline) 

From  the  stakeholders'  consultation  (see  [R5]),  the  number  of  duty  paid  B2B  movements  is 
expected  to  grow  by  about  6%  over  the  next  five  years.  The  current  issues  (e.g.  regulatory 
burden) are assumed to grow in the same proportion. 

If the B2B duty paid procedure is not automated, the B2B duty paid movements will continue 
to  be  covered  by  the  existing  paper-based  system  meaning    that  the  movements  of  excise 
goods  will  continue  to  be  accompanied  by  multiple  copies  of  the  SAAD  (defined  in  the 
Commission  Regulation  (EC)  No  3649/92).  This  would  mean  that  none  of  the  existing 
problem will be  resolved. The complicated and non-harmonized paper-based procedure will 
continue to be used. The usage of that procedure will not allow access to movements detailed 
and information about the economic operators taking part in duty paid movements. It will not 
be  possible  to  have  a  real  time  monitoring  or  control  of  those  movements  by  the  Member 
State Administrations. Economic operators will struggle with high administrative burden and 
costs  associated  with  the  procedure  (e.g.  preparation  of  SAAD)  and  suffer  from  frequent 
delays  in  the  release  of  guarantees  as  well  as  in  the  refund  process.  The  current  duty  paid 
procedure presents limited capacity to  perform risk  analysis necessary to prevent  fraudulent 
abuse of the paper-based procedure. 

Consequently,  the  problem  will  slightly  worsen  as  Member  States'  administrative  costs, 
Economic Operators' hassle costs and fraud are expected to increase over the next five years 
in the same proportion as the number of movements. 

No changes in the market structure are envisaged over the next five years. 

6.4.2.  Registration of Economic Operators 

This  option  increases  enforcement  costs  for  both  Member  States  as  it  requires  some  IT 
investment and yearly operations (SEED extension), which is assessed at EUR 1.2 million and 
EUR 240,000 respectively.  
It also increases administrative costs for Member States and compliance costs for Economic 
Operators  in  order  to  perform  the  registration  themselves  (provide  information  and 
documents, process applications, etc.). The first registration of economic operators would cost 
Member  States  EUR  2.4  million,  assuming  that  it  will  occur  in  the  first  year  of  the 
implementation  of  the  system.  Yearly  administrative  cost  of  renewing  these  registrations 
would  amount  to  EUR  0.5  million.  The  compliance  costs  for  Economic  Operators  are 
assessed  at  EUR  7.20  and  1.44  million  for  the  first-time  registrations  and  yearly  renewals 
respectively. 
The  investments  costs  and  yearly  operating  expenses  are  assessed  at  EUR  1.2  million  and 
EUR 0.24 million respectively. The enforcement costs for Member States is deduced from the 
stakeholders'  consultation  and  from  an  IT  cost  assessment  (seeAnnex  IV).  The  compliance 

41 

 
 
costs  for  Economic  Operators  is  assumed  to  be  half  of  the  one  for  duty  suspension  (see 
evaluation report [R1]) as the duty paid B2B registration procedures are expected to be much 
simpler; this leads to an effort of 6 and 1 man*days to get a first-time registration and a yearly 
renewal respectively. 

It should have a positive impact on the fight against fraud, as registrations and authorisations 
always do (however difficult to quantify).  

The  registration  and  electronic  storage  by  Member  States  of  certain  information  regarding 
economic  operators  dealing  with  duty  paid  B2B  movements  will  be  indispensable  for  the 
proper  function  of excise  duty  system and the fight against fraud. At the  moment there is  a 
lack of data concerning duty paid movements and traders dealing with those operations. The 
movements  are  covered  by  paper  documents  exchanged  between  traders;  often  without  any 
intervention of Member State administration.   

The  registration  will  ensure  storage  of  up  to  date  accurate  data  about  these  economic 
operators.  In  case  of  any  irregularities  it  will  allow  a  rapid  exchange  of  those  data between 
Member States and automated access to information. Making use of the information contained 
in  registers,  through  a  risk  analysis,  will  result  in  better  detection  of  suspicious  movements 
and hence in reduction of fraud. 

This option does not provide direct benefits to the Economic Operators. So, it is expected to 
have  a  slightly  negative  impact  on  the  market  and  in  particular  on  SMEs  as  the  latter  are 
relatively more sensitive to compliance costs. 

6.4.3.  Automation of Duty Paid B2B processes by extending EMCS 

This option requires significantly higher IT investment from Member States, which leads to 
higher  enforcement  costs  too;  initial  investment  and  yearly  operating  expenses  are  assessed 
EU-wide at EUR 7.5 and 1.5 million respectively. The enforcement costs for Member States 
are deducted from the stakeholders' consultation. 

Economic Operators will update their own IT systems if they deem worth it; otherwise they 
will fill in on-line forms provided by Member States. Based on the replies to the stakeholders' 
consultation,  the  regulatory  costs  for  Economic  Operators  are  assessed  EU-wide  at  EUR 
14.50 and 2.90 million for initial one-off costs and for yearly operations respectively. 

This  option  also  reduces  administrative  burden  for  both  Member  States  and  Economic 
Operators (productivity gains, faster processing, guarantee release and refund). Extrapolated 
from  the  replies  to  the  stakeholders'  consultation,  the  yearly  cost  savings  are  assessed  EU-
wide at EUR 5.8 and 12.20 million for Member States and Economic Operators respectively. 

This option will have a definitely positive impact on the fight against fraud as the monitoring 
of movements would be much more efficient. This is however difficult to quantify. 

Based  on  the  stakeholders'  consultation,  the  benefits/costs ratio  is  expected to  be more  than 
twice  higher  for  SMEs  than  for  large  companies,  likely  because  their  structure  is  more 
adaptable to changes in procedures or in IT systems. 

Even though they may vary significantly depending on each member State's IT architecture, 
legacy systems, etc. the enforcement costs are still quite uniformly distributed among Member 
States  as  the  requirements  and  IT  implementation  effort  are  similar.  However,  the  benefits 
will be higher for Member States with high excise duty rates (i.e. which have a higher risk of 
excise fraud) or a high volume of duty paid business-to-business movements. 

42 

 
Out of 19 Member States and 24 Economic Operators that provided an opinion in the targeted 
stakeholders'  consultation,  18  and  21  respectively  considered  the  automation  of  duty  paid 
B2B  procedures  should  be  introduced.  From  the  Open  Public  Consultation,  87%  of 
respondent Economic Operators and Trade Associations considered this option useful or very 
useful. 

6.5.  Exceptional Situations 

6.5.1.  Do nothing (baseline) 

Doing  nothing  will  cost  economic  operators  EUR  13.49  million  and  Administrations  EUR 
8.13 million additional costs over the next 5 years if nothing is changed 

No  obligation  on  economic  operators  to  report  destructions,  losses,  and/or  thefts  during 
movements  or  to  add  storage  capacity  of  a  tax  warehouse  would  generate  no  new  costs  or 
benefits either for Economic Operators or for Member States, and would leave related fraud 
unaffected.  Lack  of  standardization  of  procedures  and  equipment  used  in  order  to 
estimate/calculate  shortages/excesses  in  turn,  apart  from  causing  uncertainty  for  Economic 
Operators,  will  cost  Member  States  ca.  EUR  7.64  million  over  the  course  of  the  next  five 
years.  Nonexistence  of  standard  allowable  losses  threshold,  again  causing  uncertainty  to 
Economic Operators, also costs Member States an estimated EUR 0.29 million annually. Lack 
of a standard right to be heard in turn, considered to be at least to some extent burdensome by 
80% of Economic Operators, generates cost of approximately EUR 13.5 million annually.  

No changes in the level of fraud or in the market structure are envisaged over the next five 
years. 

6.5.2. 

Specify a common approach supported by legislation and guidelines 

This option is not expected to have any significant impact on the market or on SMEs. 

Quantity  assessment  for  shortages  and  excesses:  the  legal  requirement  to  follow  the  EU 
metrology acquis, particularly the use of certified measuring equipment, and their use would 
be  encouraged  through  guidance  and  workshops.  Metrology  directives  ensure  quantities  are 
measured in a common way in all Member States and are already in force; consequently there 
is  no  need  for  any  legislation  amendment  but  only  to  make  national  authorities  involved  in 
excise procedures more aware of these directives. 

and 

equipment  used 

standardization  of  procedures 

estimate/calculate 
The 
shortages/excesses  is  supported  by  both  Member  States  (69%)  and  Economic  Operators 
(76%)–is  expected  to  generate  benefits  of  approximately  EUR  17.2  million  in  lower 
administrative  costs  for  Member  States  and  approximately  EUR  93  million  for  Economic 
Operators  in  forgone  administrative,  compliance  and  hassle  costs.  Additionally,  the 
introduction  of  this  policy  option  has  a  potential  to  moderately  reduce  the  risk  of  fraud  for 
Member  States.  The  benefit  of  this  option  would  outweigh  its  costs  within  one  year  of  its 
implementation.  

to 

Introduction  of  compulsory  reports  in  case  of  destructions,  losses,  and/or  thefts  during 
movements would generate a cost of approximately EUR 35 million for EOs over 5 years. At 
the  same  time,  MSAs  believed  it  had  a  potential  to  moderately  limit  the  risk  of  fraud. 
Unsurprisingly, then, this policy option was more popular among the latter (66.6%) than the 
former  (45%).  It  is  difficult  to  evaluate  benefits  to  the  MS  in  terms  of  scale  of  the  fraud 

43 

 
reduction so it is difficult to assess whether (and when) the costs borne by the EOs would be 
offset by fraud reduction. 

Allowable  losses:  standardized  allowable  losses  thresholds  (tolerance  thresholds)  would  be 
introduced  and  their  values  defined  in  the  legislation.  83.3%  of  Member  States  expect  this 
would not only significantly reduce risk of fraud, but also result in lowering Member States’ 
administrative costs. Basing on per diem rates in each Member State, and data provided by the 
stakeholders' consultation, using the same method as in case of the cost of the lack of unified 
tolerance  threshold,  it  is  estimated  that  the  EU-wide  gain  from  the  introduction  of  the 
tolerance  threshold  at  approximately  EUR  11.7  million  over  the  next  five  years.  86.4%  of 
Economic  Operators  expect  significant  regulatory  cost  savings  but  the  latter  could  not  be 
quantified. 

Right to be heard: the concept of the ‘Right to be Heard,’ similar to the one written into the 
Union  Customs  Code,  would  be  introduced  in  Directive  2008/118/EC.  Introduction  of  a 
standard right to be heard was supported by the vast majority of both Member States (80%) 
and  Economic  Operators  (100%),  although  a  number  of  the  former  believe  their  existing 
national  legal  systems  provide  Economic  Operators  with  sufficient  opportunity  to  defend 
themselves.  The  annual  administrative  costs  of  introduction  of  a  standard  legal  right  to  be 
heard for Member States would amount to roughly EUR 0.36 million. The current situation is 
assessed to cost Economic Operators EUR 67 million in the next five years; though the cost 
savings  due  to  the introduction  of  a  standard  right  to  be  heard  could  not  be  quantified,  it  is 
expected to be very significant. 

Enhanced  procedures  to  support  a  right  to  be  heard:  limited  evidence  (an  extrapolated 
estimate from one Member State) indicates moderate enforcement costs for this option, but an 
administrative cost saving of approximately EUR 5.23 million over the next five years if all 
Member  States  implemented  the  current  optional  processes  in  the  excise  IT  systems  for 
optional  support  for  communication  with  Economic  Operators  about  discrepancies  reported 
on the receipt of excise goods. A legal base would facilitate the exchange of data relevant to 
exceptions between concerned Member States and economic operators and would provide a 
means for exchanging and collecting data to support for the Right to be Heard. It would also 
be relevant to the collection of potential claims under the Recovery Directive. 

44 

 
7.  HOW DO THE OPTIONS COMPARE 

All figures in the comparison tables of this chapter are relative to the "Do nothing" (dynamic 
baseline) option. 

When quantified, costs and benefits are expressed in million euros (M€). Costs are split into 
the  initial  one-off  costs  and  yearly  recurring  costs.  To  illustrate  better  what  a  given  policy 
option  would  bring  (positively  or  negatively),  the  comparison  tables  also  provide  costs  and 
benefits over five years, which sum the initial one-off costs (where applicable) and the costs 
& benefits of the first five years of operations. 

Negative  figures  are  highlighted  in  red  characters  and  represent  costs  or  a  negative  impact. 
Positive figures are highlighted in green characters and represent benefits, costs savings or a 
positive impact. 

45 

 
7.1.  Excise – Customs interactions: Export 

The table here below summarises the impact presented in section 6.1. 

Do 
nothing 

5 years: 
+2% 

0 
5 years: 
+2% 
0 
0 
0 

0 

MS administrative costs & 
benefits (M€) 
MS enforcement costs & 
benefits (M€) 
EO regulatory costs & 
benefits (M€) 
Impact on fraud 
Impact on market and SME 
Efficiency 

Effectiveness 

Data cross-check 

ARC and SEED numbers 
Yearly 
Initial 
recurring 
one-off 
cost/benefit 
costs 

5 years 

Goods description 
Yearly 
recurring 
cost/benefit 

Initial 
one-off 
costs 

5 years 

Automated Process 
Synchronisation 
Yearly 
recurring 
cost/benefit 

Initial 
one-off 
costs 

5 years 

EU common list of Alternate 
Proofs of Exit 
Yearly 
recurring 
cost/benefit 

Initial one-
off costs 

5 years 

0 

0.77 

3.84 

0 

0.77 

3.84 

0 

2.69 

13.44 

-4.34 

-0.87 

-8.68 

-16.80 

-3.36 

-33.60 

-33.60 

-6.72 

-67.20 

0 

-1.32 

-6.61 

0 

-1.32 

-6.61 

0 

1.46 

7.30 

0 

0 

0 

0.88 

4.39 

0.00 

0.00 

1.33 

6.66 

+ 
0 
+ 

+ 

++ 
0 
- 

++ 

0 
+ 
-- 
+++ if if exit results are sent by 
the Office of Exit; 0 otherwise44 

0 
+ 
++ 

++ 

Quite  expectedly,  the  more  advanced  data  cross-check  is  more  costly  and  provide  more  benefits  to  the  fight  against  fraud.  The  regulatory  costs  to 
Economic Operators for providing extra excise information in the export declarations are limited and would be compensated by the introduction of an EU 
common list of alternate proofs of exit. However, the enforcement costs for Member States (mostly IT systems) are high for the cross-check of the goods 
description and very high for the automated process synchronisation. The latter is significantly higher than the benefits it would bring to all stakeholders. 

The EU common list of alternate proofs of exit has negligle regulatory costs and provide substantial benefits to all stakeholders. 

44 the automated process synchronisation would be efficient only if exit results are sent by the Office of Exit, which is not at all the case currently (see section 6.1.3). In other words, the 
benefits of  an automated  excise-export  process  synchronisation  would  appear only  if  customs  officers  would  send many  more  exit  results  than currently; measures  to be  taken  to 
increase the ratio of exit results is entirely in the customs export area and consequently outside the scope of this excise initiative. 

46 

 
 
 
 
  
 
                                                 
7.2.  Excise – Customs interactions: Export followed by Transit or using STC 

The table here below summarises the impact presented in section 7.2.2. 

Do nothing 

MS  administrative  costs  & 
benefits over 5 years 

+14,2% 

MS enforcement costs  

0 

hassle 

Administrative  compliance 
and 
for 
economic  operators  over  5 
years 

costs 

+14,2% 

Impact on fraud 

0 

Impact on market and SME  0 

Efficiency 

Effectiveness 

0 

0 

Allow  the  use  of  external 
transit 
export 
after 
instead of EMCS 

+14,2% 

0 

+ 

++ 

0 

0 

++ 

The above shows that the option of using external transit after export instead of EMCS 
until the external border ("no nothing") is cost neutral and has a better impact on fraud. 

Compared  to  the  "do  nothing"  option  the  use  of  external  transit  after  export  instead  of 
EMCS  would  facilitate  trade  because  it  would  be  possible  for  traders  to  regroup  a 
number  of  export  movements  at  the  place  where  the  office of  exit  is  located inside  the 
customs territory and then dispatch the goods from the office of exit, which would be at 
the same time the office of departure for transit, to the external border, from where they 
would  physically  exit.    Until  the  goods  physically  exit  they  are  under  customs 
supervision  because  the  goods  become  non-Union  goods  when  placed  under  external 
transit.  This would even bear the advantage that the guarantor will be the declarant of the 
transit  procedure  who  is  much  closer  to  the  goods  in  question  than  the  registered 
consignor or authorised warehousekeeper who was the guarantor under EMCS.  The use 
of  the  external  transit  procedure  would  provide  the  same  fiscal  security  as  the  use  of 
EMCS until the external border under the "do nothing" option. 

47 

 
 
 
 
7.3.  Excise – Customs interactions: Import 

The table here below summarises the impact presented in section 6.3. 

Do nothing 

SEED numbers 

SEED numbers and ARC 

Data cross-check 

Initial 
one-off 
costs 

n/a 

costs +4% in 
2021 vs 2016 

Yearly 
recurring 
cost/benefit 

5 years 

Initial 
one-off 
costs 

Yearly 
recurring 
cost/benefit 

5 years 

SEED numbers, ARC and 
Goods description 
Yearly 
recurring 
cost/benefit 

Initial 
one-off 
costs 

5 years 

0.29 

1.44 

n/a 

0.29 

1.44 

n/a 

0.29 

1.44 

0 

-3.40 

-0.68 

-6.80 

-4.80 

-0.96 

-9.60 

-6.00 

-1.20 

-12.00 

costs +4% in 
2021 vs 2016 

0 
0 
0 
0 

n/a 

-0.13 

-0.66 

n/a 

-0.27 

-1.33 

n/a 

-0.27 

-1.33 

+ 
+ 
0 
+ 
+ 

+ 
+ 
0 
- 
+ 

+ 
++ 
0 
- 
+ 

MS administrative costs & 
benefits (M€) 
MS enforcement costs & 
benefits (M€) 

EO regulatory costs (M€) 

EO regulatory benefits 
Impact on fraud 
Impact on market and SME 
Efficiency 
Effectiveness 

Quite expectedly, the most advanced data cross-check is more costly and provide more benefits to the fight against fraud. However cross-checking SEED 
numbers and ARC, while significantly more costly, brings limited or no added value compared to cross-checking only SEED numbers. 

The regulatory costs to Economic Operators for providing extra excise information in the import declarations are limited and likely partly compensated 
by the benefits (hassle cost savings) brought by the common EU requirements for moving excise goods under duty suspension after import. 

48 

 
 
 
 
 
 
 
 
7.4.  Duty Paid Business-to-Business 

The table here below summarises the impact presented in section6.4. 

Do nothing 

Registration of Economic 
Operators 
Yearly 
recurring 
costs/benefits 

Initial 
one-off 
costs 

5 years 

Automation of Duty Paid B2B 
processes by extending EMCS 
Yearly 
recurring 
costs/benefits 

Initial one-off 
costs 

5 years 

MS administrative costs 
(M€) 
MS administrative benefits 
(M€) 
MS enforcement costs & 
benefits (M€) 
EO regulatory costs (M€) 
EO regulatory benefits (M€) 
Fraud 
Impact on market and SME 
Efficiency 
Effectiveness 

5 years: +6% 

-2.39 

-0.48 

-4.30 

-2.39 

-0.48 

-4.30 

5 years: +6% 

-1.20 

-7.20 

-0.24 

-2.40 

-7.50 

-1.50 

-15.00 

-1.44 

-14.40 

-14.50 
0.00 

-2.90 
12.20 

-29.00 
61.00 

5.8 

29.00 

+ 
- 
+ 
- 

++ 
++ 
++ 
++ 

Though more expensive to implement, in particular in terms of initial one-off costs, the automation of the duty paid B2B processes brings much higher 
benefits, in particular for SMEs. 

The  complete  automation  of  B2B  movements  compared  with  one  step  approach,  a  registration  of  traders,  will  be  more  costly  especially  in  terms  of 
investments and regulatory cost for economic operators. However savings will be only achieved in case of automation, by both MS administrations as 
well as by economic operators. The current arrangement for B2B movements which are paper based with a poor supervision of movements and operators 
create opportunities for fraud in MS with excise rate differentials. The automation would eliminate those loopholes and fraud creating losses.  

49 

 
  
  
  
  
 
 
 
 
 
 
 
 
  
 
 
 
 
 
  
 
7.5.  Exceptional Situations 

Do nothing 

Quantitative assessment for 
shortages and excesses 

Initial 
one-off 
costs 

Yearly 
recurring 
costs/benefits 

5 years 

Compulsory reports in case of 
destructions, losses, and/or 
thefts during movements 
Yearly 
recurring 
costs/benefits 

Initial one-off 
costs 

5 years 

MS administrative costs & 
benefits(M€) 
MS enforcement costs & 
benefits (M€) 
EO regulatory costs & 
benefits (M€) 
Fraud 
Impact on market and SME 
Efficiency 
Effectiveness 

45 

0 

0 

0 

3.4 

17.2 

0 

18.6 

0 

93 

0 

0 

0 

0 

0 

-7 

0 

0 

-35 

+ 
0 
++ 
++ 

+ 
0 
+ 
-- 

Allowable losses 

Initial one-
off costs 

Yearly 
recurring 
costs/benefits 

5 years 

0 

0 

2.34 

11.7 

0 

0 

+246 

0 
0 
+ 
+ 

45 The Member States administrative costs of the current lack of standardisation of procedures and equipment used to calculate shortages or excesses is assessed at 7.64 million euros 

over the next five years 

46 This impact could not be quantified but is assessed to be significantly positive to Economic Operators. 

50 

 
 
  
  
  
  
 
 
 
 
 
 
 
 
 
  
 
 
 
                                                 
Do nothing 

Right to be Heard 

Initial 
one-off 
costs 

Yearly 
recurring 
costs/benefits 

5 years 

Enhanced Procedures 
Yearly 
recurring 
costs/benefits 

Initial one-off 
costs 

5 years 

All Measures 

Initial 
one-off 
costs 

Yearly 
recurring 
costs/benefits 

5 years 

MS administrative costs & 
benefits (M€) 
MS enforcement costs & 
benefits (M€) 
EO regulatory costs & 
benefits (M€) 
Fraud 
Impact on market and SME 
Efficiency 
Effectiveness 

43 

-0.36 

-1.8 

0 

0 

0 

0 

0 

1.04 

5.2 

6.42 

32.1 

0 

0 

0 

0 

0 

+247 

+ 
++ 
+ 
- 

0 
0 
+ 
+ 

11.648 

58.044 

+ 

47 If nothing is done, the current lack of Right to be Heard would cost Economic Operators 67 million euros in the next five years. The impact of introducing a Right to be Heard could 

not be quantified but is assessed to be significantly positive to Economic Operators and would save a significant amount of the current costs. 

48 These figures are lower bonds as some policy options (e.g. Right to be Heard) bring benefits that are not quantified. 

51 

 
  
  
  
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  
 
 
                                                 
8.  THE PREFERRED OPTION 

8.1.  Excise – Customs interactions: Export 

Given the high enforcement costs (mostly evolutions of IT systems) and the lack of obvious 
return at EU level (in particular due to  the scarcity of data on fraud and to  the fact that the 
benefits are not  uniformly  distributed across  Member States),  the  data cross-check of goods 
description and the automated process synchronisation are deemed too expensive compared to 
their benefits to be proposed at EU level. 
On  the  other  hand  the  data  cross-check  of  excise  references  (SEED  numbers  and  ARC)  in 
export declarations provides significant benefits to the fight against fraud at a relatively low 
cost for Member States and Economic Operators; consequently this option is preferred at EU-
level. Moreover, it will also allow, but not oblige, some Member States to do more (e.g. data 
cross-check  of  goods  description  and/or  automated  process  synchronisation)  should  they 
assess  it  worthwhile  at  national  level.  To  facilitate  the  task  of  Member  States  willing  to 
implement  these  options,  the  Commission  will  specify  detailed  recommendations  for  a 
solution. 

Given  the  high  administrative  benefits  and  negligible  regulatory  costs  highlighted  by  all 
stakeholders,  a  legislative  measure  to  specify  a  common  list  of  documents  that  shall  be 
accepted as an alternate proof of exit for excise goods is to be proposed at EU-level. 

8.2.  Excise – Customs interactions: Export followed by Transit or using STC 

The  objective  of  legal  clarity  and provision  of  sufficient  guarantees  for  all  movements  with 
destination export would be fully achieved when opting for the possibility to use of external 
transit after the export procedure for excise Union goods. 

Given  the  clear  benefits  for  trade  to  be  able  to  use  external  transit  after  export  instead  of 
EMCS and the negligible enforcement costs, this is the preferred option. 

8.3.  Excise – Customs interactions: Import 

Given the high enforcement costs (mostly evolutions of IT systems) and the lack of obvious 
return at EU level (in particular due to  the scarcity of data on fraud and to  the  fact that the 
benefits are not  uniformly  distributed across  Member States),  the data cross-check of goods 
description is deemed too expensive compared to their benefits to be proposed at EU level. 

On  the  other  hand  the  data  cross-check  of  excise  references  (SEED  numbers  and  ARC)  in 
export declarations provides some benefits to the fight against fraud at a relatively low cost 
for  Member  States  and  Economic  Operators;  consequently  this  option  is  preferred  at  EU-
level. Moreover, it will also allow, but not oblige, some Member State to do more (e.g. data 
cross-check of goods description) should they assess it worthwhile at national level. 

In order to reduce the regulatory costs for Economic Operators and to be consistent with the 
VAT approach of the problem (see section 5.3.2 and footnote 33), it is also proposed to allow 
Member States to require ARC only upon request. 

52 

 
 
8.4.  Duty Paid Business-to-Business 

An overwhelming number of respondent Member States (18 out of 19) and a large majority of 
respondent Economic Operators (21 out of 24) are in favour of an automation of the duty paid 
B2B  procedures49.  The  quantitative  analysis  shows  also  an  overall  benefit  as  the 
administrative cost savings overweight the enforcements and compliance costs after two years 
of operations. 

Moreover,  the  automation  is  expected  to  benefit  significantly  to  SMEs.  It  will  reduce 
bureaucracy  and  administrative  burden  by  eliminating  paper-based  procedure  for  Member 
State  and  Economic  Operators.  It  may  in  particular  increase  competitiveness  of  SME's. 
Immediate and easier acces to online, up-to-date and real time data will enable better visibility 
and  more  efficent  follow-up  of  on-going  movements  for  the  Member  State  administrations 
and a better targeting of their controls. It will reduce sensitivity to fraud and fiscal risks.  

Consequently the preferred option is the automation of the duty paid B2B procedures. 

A  drawback  is  that  this  preferred  option  imposes  enforcement  (IT)  costs  to  some  Member 
States which will get a limited return due to the low number of duty paid B2B movements in 
their country 

8.5.  Exceptional Situations 

With the exception of the compulsory reporting in case of destructions, losses, and/or thefts 
during movements, all other policy options for the handling of exceptional situations show a 
strong net positive benefit to both Member States and economic operators 

The quantification of shortages and excesses merely requires better application of the existing 
acquis and should be covered by guidance and workshops. Standardisation of allowable losses 
would be of benefit to both Member States and to economic operators, although the benefits 
to  economic  operators  are  not  quantifiable;  this  measure  calls  for  a  common  legislative 
proposal.  

Whilst the right to be heard may involve a very small cost to Member States the benefits to 
economic operators are large. It is therefore recommended to include provisions for this in a 
common legislative proposal. 

Finally  enhanced  procedures  in  EMCS  show  a  small  cost  reduction  for  Member  States,  but 
some  benefit  to  economic  operators.  It  is  therefore  recommended  that  this  option should  be 
included in the legal base. 

8.6.  REFIT (simplification and improved efficiency) 

The following table summarises the REFIT cost savings, which are regulatory cost savings for 
Member States and Economic Operators.  

REFIT Cost Savings (in million euros, per year) – Preferred Option(s) 

49 This option includes the registration of economic operators, as it is a pre-requisite to automation (see section 

5.4.3). 

53 

 
                                                 
Description 

Amount for 
Member 
States 

Amount for 
Economic 
Operators 

Comments 

Excise-customs interactions 

export data cross-check of 
references 
export common list of alternate 
proofs of exit 
import data cross-check 

Duty  Paid  Business-to-Business 
automation 

Exceptional situations 
certified equipment 
standardized allowable losses 
thresholds 
enhanced procedures 

TOTAL 

0.77 

088 

.29 

0 

1.33 

.13 

5.80 

12.20 

3.44 

2.34 

1.04 

14.55 

18.60 

n/a (1) 

0 

32.27 

Productivity 
processing, 
immobilised 
period of time 

gains, 

faster 
guarantee 
for  a  shorter 

(1) significant regulatory cost savings are expected for Economic Operators but limited or no data is available 

Cost savings for Member States are mostly administrative ones as  the preferred options will 
save time and effort spent on disputes, challenges of decisions and processing of documents. 
The  positive  impact  on  fraud  reduction  is  not  included  in  this  table  as  it  could  not  be 
quantified due to the scarcity of available data. 

Cost savings for Economic Operators are mostly administrative ones as the preferred options 
will  save  time  and  effort  spent  on  disputes,  challenges  of  decisions  and  processing  of 
documents.  The  automation  of  duty  paid  business-to-business  procedures  will  also  reduce 
hassle  costs  by  decreasing  the  time  period  during  which  the  movement  guarantee  is 
immobilised and by fastening the refund process. 

8.7. 

Impact on other policies, Coherence and Proportionality 

The preferred policy options only enhance existing procedures and are not expected to cause 
the  Member  States 
any  significant  consumption 
administrations were consulted (see Annex II section 2). No social or environmental impact 
has been identified for any option.  

increase.  The  Health  services  of 

A few policy options have a positive impact on trade or on SME (e.g. automation of duty paid 
B2B). It is not expected however to have macroeconomic impacts on intra-EU trade, exports 
or imports, or to drastically improve the competitiveness of SMEs.  

All  preferred  policy  options  are  consistent  with  customs  or  VAT  policies:  data  cross-check 
aligned  with  customs  data  model,  alternate  proofs  of  exit  similar  to  customs,  export 

54 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
facilitation  by  allowing  external  transit  for  excise  goods,  common  requirements  for  duty 
exemption at import similar to VAT, right to be heard similar to customs. 

All  preferred  policy  options  are  proportionate  as  their  overall  benefits  outweigh  their  costs, 
the latter being reasonably low. The set of preferred policy options also reach a right balance 
between the fight against fraud and the facilitation of legitimate trade. 

8.8. 

Stakeholders' opinions on preferred options 

The following table summarises the stakeholders' opinion on the preferred options, among the 
respondents to the related questions. The percentage indicates the ratio50 of stakeholders that 
consider a given option useful or very useful. 

Option 
Export 
  Data cross-check of references 
  Common list of alternate proofs of exit 
Export followed by external transit 
Import – data cross-check of SEED numbers 
Duty Paid B2B - automation 
Exceptional situations 
  Assessment for shortages and excesses 
  Allowable losses  
  Right to be heard and related procedures 

Targeted Consultation 

Member 
States 

Economic 
Operators 

Open Public 
Consultation 
Economic 
Operators or 
Trade 
Associations 

94% 
84% 
n/a 
90% 
94% 

69% 
83% 
80% 

100% 
87% 
n/a 
87% 
87% 

76% 
86% 
100% 

68% 
n/a 
n/a 
n/a 
87% 

84% 
n/a 
90% 

50 Each ratio is based on the number of respondents that provided an answer to a given question; in other words, 

"no answer" replies are not taken into account for the calculation of the ratio. 

55 

 
 
                                                 
9.  HOW WOULD ACTUAL IMPACTS BE MONITORED AND EVALUATED 

9.1.  Monitoring Indicators 

The following table below gives an overview of the main policy objectives, the indicators to 
measure  whether  they  will  be  achieved,  the  tool  for  measuring  these  and  the  operational 
objectives. 

Specific objectives  
(see 4.2) 

Indicator  

Measurement tool  

Excise fraud 
- number of audits 
- number of controls 
- reported fraud 
- suspected fraud 

Enforcement costs 
for excise and 
customs authorities 

Administrative costs 
for excise and 
customs authorities  

Compliance costs for 
Economic Operators 

Average duration of 
an excise duty paid 
B2B movement 

Size of Economic 
Operators that use 
excise procedures 

Number of 
movements of excise 
goods 

Reduce illicit trade, 
evasion and abuse 
(fraud) 

Reduce tax obstacles by 
minimising costs for 
businesses and 
administrations 

Establish a clear and 
consistent framework for 
free movement of the 
goods 

Volume 

Operational 
objectives  
Substantial decrease  of 
excise fraud at export, 
import and duty paid 
B2B 

Reduction of 
administrative costs in 
excise-export51 and duty 
paid B2B intra-EU cross-
border procedures. 

Reduction of compliance 
costs in duty paid B2B 
intra-EU cross-border 
procedures 

Reduction of compliance 
costs for the handling of 
shortages and excesses 

EU excise evaluation 
study 

Data and feedback 
provided by the Member 
States 

EU excise evaluation 
study 

Data and feedback 
provided by the Member 
States 
EU excise evaluation 
study 

Data and feedback 
provided by the 
Economic Operators 
(ECG, TCG and 
stakeholders' 
consultation in 
evaluation study) 

Regular reports in EMCS  Reduction of the duration 

during which an excise 
movement in duty paid 
B2B intra-EU cross-
border procedures is 
open. 
Increase in number of 
SMEs and in number of 
movements for duty paid 
B2B procedures 

Increase in number of 
movements under 
external transit  after 
export 

EU excise evaluation 
study . 
Regular reports in 
EMCS, AES and NCTS 

Data and feedback 
provided by the 
Economic Operators 
and/or the Member 
States 

51 For excise movements with destination export which require an alternate proof of exit 

56 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                 
Specific objectives  
(see 4.2) 

Indicator  

Measurement tool  

Operational 
objectives  

Allow the proper 
monitoring of 
movements of excise 
goods 

Number of 
movements 

Regular reports in EMCS 
and SEED  

Number of Economic 
Operators  

Net value of the 
goods (€) 

Excise duty (€) 

Data provided by the 
Member States 

Analysis of market or 
consumption databases 

More accurate data for 
exports, imports and duty 
paid business-to-business 

9.2.  Monitoring structures 

The  Committee  on  Excise  Duty,  an  advisory  committee  on  excise  issues  in  which 
representatives of all Member States participate and which is chaired by Commission officials 
from  DG TAXUD,  will  monitor  the  implementation  of  the  evolutions  of  Directive 
2008/118/EC  and  discuss  and  clarify  possible  interpretation  issues  between  Member  States 
regarding the new legislation. In case new legislative developments are required, the Indirect 
Taxation Expert Group might be further consulted.  

9.3.  Evaluation 

Member  States  and  the  Commission  shall  examine  and  evaluate  the  functioning  of  the 
evolutions  provided  for  in  the  new  legislation.  To  that  purpose,  Member  States  shall 
communicate  to  the  Commission  any  relevant  information  as  regards  the  level  and  the 
evolution  of  the  administrative  costs,  excise  fraud  and  number  of  Economic  Operators 
authorised  to  use  excise  procedures,  necessary  for  the  evaluation  of  the  effectiveness, 
efficiency,  coherence  with  other  interventions  with  similar  objectives,  and  continued 
relevance  of  the  new  legislation.  The  evaluation  should  also  seek  to  collect  input  from  all 
relevant business stakeholders as regards the level and the evolution of their compliance costs.  
The  Commission  will  prepare  a  retrospective  evaluation  of  the  functioning  of  the  new 
legislation five years after its entry into force. 

57 

 
 
 
 
 
 
 
ANNEXES 

ANNEX I 

Procedural Information 

1. 

Lead DG, Decide Planning/CWP references 

The lead DG is DG TAXUD. 

This initiative got the following political agreements: 
-  Agenda  Planning:  General  arrangements  for  excise  duty  –  harmonisation  and 

simplification. (2018/TAXUD/003) 

-  Inception Impact Assessment: General arrangements for excise duty  – harmonisation and 

simplification (Ares(2017)1497481) 

-  Commission Work Programme  2017 Annex II initiative 6 

2.  Organisation and timing 

The following  DG were  invited to the  Inter-Service Steering Group (ISSG): AGRI, BUDG, 
COMP, GROW, MOVE, OLAF, SANTE, SG, SJ, TRADE. DG AGRI and BUDG attendted 
the first ISSG meeting. DG OLAF, SANTE, SG, SJ attended all ISSG meetings and involved 
themselves in all steps of the Impact Assessment. 

An independent contractor (CASE) performed a study contributing to this impact assessment, 
which  provided  most  of  the  data  and  inputs  in  this  impact  assessment  report.  The  final 
deliverable of this study is document [R5]. 

The ISSG reviewed and approved the following documents  
-  all ISSG meetings' minutes 
-  questionnaires (OPC, Member State, Economic Operator) for the stakeholders' consultation 
- 
-  final report of the independent contractor's study 
-  Commission's Impact Assessment Report (this document) 

inception report52 of the independent contractor's study 

Two external economists, proposed by the independent contractor, reviewed the study's draft 
final report: 
-  Dr A. Renda (Senior Research Fellow at Duke University and an Adjunct Professor of Law 

and Economics at Duke School of Law) 

-  Dr R. Bird (Professor Emeritus of Economics, Rotman School of Management, and Senior 
Fellow  of  the  Institute  for  Municipal  Governance  and  Finance,  Munk  School  of  Global 
Affairs, University of Toronto) 

52 Intermediate deliverable, describing the problems, options, methodology and approach of the study 

58 

 
                                                 
The chronology of the main events is as follow: 

kick-off of the study contributing to the Impact Assessment 
first ISSG meeting 
approval of the forms for the stakeholders' consultation 

16/01/2017 
27/02/2017 
31/03/2017 
Apr-Jul 2017  stakeholders' consultation, including OPC in all EU languages 
28/08-08/09 
13/09/2017 
09/10/2017, 24/10/2017 and 16/11/2017 

ISSG review of the study's draft final report 
ISSG meeting on the study's draft final report 

27/11/2017 

ISSG meetings on Commission's Impact Assessment Report 
approval of the study's final report 

3.  Consultation of the RSB 

The RSB was consulted on 24/01/2018 and provided, via written procedure, a positive 
opinion on 26/01/2018. 

59 

 
 
 
 
ANNEX II  Synopsis Report 

1. 

Background to the initiative 

Excise  duties  are  indirect  taxes  on  the  sale  or  use  of  specific  products.  They  are  usually 
applied as an amount per quantity of the product e.g. per kg / per hl /per degree alcohol / per 
1000 pieces etc. All revenue from excise duties goes entirely to the Member States. In the EU, 
Member States must apply excise duties to alcohol, tobacco, and energy. 
Directive  2008/118/EC53  sets  out  the  general  arrangements  for  the  holding  of  excise  goods 
and  their  movements  between  Member  States.  It  explains  the  arrangements  for  deferring 
payment of excise duty available to authorised traders who hold excise goods or move excise 
goods between Member States. 
The current initiative intends to harmonise and simplify provisions for the export, import and 
transit  of  excise  goods.  It  aims  support  the  automation  of  movement  control  procedures  - 
mainly  used  by  small  and  medium  enterprises  -  in  order  to  harmonise  and  simplify  these 
arrangements. 

2. 

Summary of consultation activities carried out 

The consultation strategy has focused on three main groups of stakeholders: Member States' 
administrations,  economic  operators  and  citizens.  This  in-depth  consultation  programme 
aimed to gain a better understanding of the overall functioning of the mechanisms established 
by the Directive, the logic underlying intervention, details of the issues at stake, the number 
and  type  stakeholders  involved  and  their  roles,  and  the  Directive’s  connection  to  other 
relevant EU policies. In addition, the objective of the consultation activities was to gather the 
views  of  the  main  stakeholders  on  a  set  of  possible  options  for  the  revision  of  Directive 
200/118/EC.  

The main consultation activities that were carried out were: 

  A written questionnaire for all Member States authorities complemented by series of 
interviews  to  selected  Member  State,  taking  into  account  geography  and  volume  of 
excise  trade.  More  specifically,  this  consultation  targeted  customs,  excise  and  health 
National Authorities. 

  The economic operators' consultation included a series of interviews, as well as a 

detailed questionnaire sent to the most relevant stakeholders (e.g. EU customs' trade 
contact group, Excise Contact Group).  

  An  open  public  consultation  was  conducted  to  gather  the  views  of  citizens,  non-
government  organisations,  economic  operators  and  other  stakeholders  on  a  set  of 
possible options for the revision of the Directive. Each economic operator responding 
to  this consultation was offered to  get the detailed Economic Operator  questionnaire 
(see  above)  upon  request.  The  consultation  lasted  3  months  and  was  available  in  all 
EU languages. 

All consultation activities took place between April and July 2017. 

53  Council  Directive  2008/118/EC  of  16  December  2008  concerning  the  general  arrangements  for  excise  duty 

and repealing Directive 92/12/EEC OJ L9/12 14.1.2009 

60 

 
 
 
                                                 
Member States' authorities 

interviews 

replies to questionnaire 

Economic Operators 

interviews 

replies to questionnaire 
Open Public Consultation 

Table 1. Overview of respondents  

Nb 

Comments 

7 

21 
20 

41 

31 

Belgium, Czecz Republic, Germany, France, 
Ireland, the Netherlands, Poland 
For a total of 85 informants interviewed 
Customs & Excise 
MS replies to the questions related to health 

Same countries as Member State plus Italy 
with more than one informant per interview 
Including 10 with less than 50 employees 

Including 38 Economic Operators (out of which, 
10 with less than 50 employees) and 48 Trade 
Associations 

replies to questionnaire 

151 

documents uploaded 

38 

3.  Results of consultation activities  

Member States' consultation 

The major source of information for estimating the magnitude of problems and for forecasting 
the  counterfactual  effects  of  implementing  particular  policy  options  were  answers  to  the 
detailed  technical  questionnaires  and  in-depth  consultations  with  stakeholders  in  selected 
Member States.  

The  questionnaires  were  designed  to  gather  quantitative  information  on  the  current  state  of 
affairs,  such  as  the  number  of  specific  types  of  excise  movements  and  the  economic  costs 
related  to  the  current  arrangements.  Since  some  MS  already  apply  on  their  own  specific 
measures or arrangements that are planned to be implemented on an EU-wide basis, the data 
gathered  in  these  Member  States  was  utilised  not  only  to  estimate  the  magnitude  of  the 
problems  but  also  to  extrapolate  the  costs  and  benefits  from  implementing  specific  policy 
options.  In  addition,  for  each  analysed  policy  option,  opinion  questions  and  questions 
regarding suspected costs and benefits were included in the questionnaire.  

To accurately address the different types of problems faced by the Member States' authorities 
and economic operators, two versions of the questionnaire were created. The questionnaire for 
authorities focused on administrative costs, enforcement costs, and suspected values of fraud. 
It contained 82 open-ended questions that required the cooperation of various services within 
and between the excise, customs, and health authorities.  

In  addition  to the questionnaire, an in-depth  consultation  programme  was conducted. It was 
limited  to  eight  Member  States—namely,  Belgium,  the  Czech  Republic,  France,  Germany, 
Ireland, Italy, the Netherlands, and Poland,—and aimed to gain a better understanding of the 
overall  functioning  of  the  mechanisms  established  by  the  Directive,  the  underlying 
intervention logic, the magnitude of problems experienced, and the effects of potential policy 
options, as well as the nature of the issues at stake, the stakeholders involved and their roles, 
and,  finally,  the  Directive’s  connection  to  other  relevant  EU  policies.  The  selection  of 

61 

 
 
 
 
 
 
countries for case studies was based on the criterion of having a representative distribution of 
geographical-, market-, and excise tax-related factors within the EU. 

The  interview  programme  was  conducted  over  12  weeks.  Overall,  authorities  from  25 
Member States provided their answers to the detailed technical questionnaire. The questions 
to  the  problem  area  of  excise  and  customs  were  answered  by  representatives  from  21 
countries,  whereas  the  questions  to  the  problem  area  of  the  private  acquisition  of  alcoholic 
beverages and tobacco products by individuals were answered by health authorities from 20 
countries. 

Economic operators' consultation 

The questionnaire for economic operators was designed for: 

1.  both large economic operators and small and medium enterprises (SMEs);  
2.  players  engaged  in  movements  of  different  excise  products  (manufactured  tobacco, 

energy products, and alcoholic beverages); and 

3.  operators in different stages of the value chain (producers, wholesalers, retailers, and 

logistics companies). 

The  questionnaire  focused  on  compliance  and  hassle  costs.  To  maximise  the  response  rate, 
which  could  have  been  limited  by  information  privacy,  all  50  questions  included  in  the 
questionnaire for economic operators were closed-ended, with pre-defined ranges for answers 
to the questions that asked for specific numerical values.  

A  summary  of  the  responses  from  economic  operators  by  size  of  company,  origin,  and 
specialisation is depicted in Table 2 below.  

Table 2.Response summary to the detailed technical questionnaire for economic operators 
Country of Origin  No. of Respondents 

Italy 
Germany 
France 
United Kingdom 
Belgium 
Netherlands 
Poland 
Ireland 
Romania 
Luxembourg 

Total 

10 
6 
3 
3 
2 
2 
2 
1 
1 
1 

31 

Main Economic 
Activities 
Alcohols and 
alcoholic 
beverages 
Manufactured 
tobacco products 

Energy products 

Other 

Total 

No. of 
Respondents 

15 

12 

4 

1 

32 

Open public consultation 

The  questionnaire  for  the  open  public  consultation  included  30  questions  divided  into  six 
thematic  sections,  as  well  as  11  identification  questions.  The  questions  focused  on  the 
respondents’  level  of  satisfaction  with  the  current  arrangements  and  their  perceptions  on 
whether  specific  actions  should  be  taken  at  the  EU  or  Member  State  level  within  specific 

62 

 
 
 
  
  
  
  
 
problem areas. Importantly, the questionnaire also asked economic operators for the magnitude 
of efforts currently borne by them.  

Table 3 gives a summary of the responses to the open public consultation by size of company, 
origin, respondent type and specialisation.  

Table 3. Response summary to the open public consultation 

Country of origin 
Sweden 
Belgium 
Germany 
Italy 
France 
Spain 
Finland 
United Kingdom 
Austria 
Netherlands 
Poland 
Total 

No. of respondents  Country of origin  No. of respondents 
Estonia 
Czech Republic 
Denmark 
Hungary 
Luxembourg 
Portugal 
Greece 
Ireland 
Slovenia 
Other 
No answer 

4 
3 
3 
3 
3 
3 
2 
1 
1 
4 
1 

45 
13 
11 
10 
8 
8 
7 
6 
5 
5 
5 
151 

Respondent type 

Private citizen 
Economic Operators  

No. of 
respondents 
49 
34  

(out of which: SMEs) 
Trade, business and 
professional associations 

Public authority (national, 
regional, local) 
Non-government 
organisation 
Other  
No answer 
Total 

(16) 

48 

0 
16 
4 
0 
151 

Main economic activities 

Alcohols and alcoholic 
beverages 
Manufactured tobacco 
products 

Energy products 

Other 
No answer 

Total 

No. of 
respondents 
19 

10 

6 

1 
117 

151 

Responses  to  the  questionnaire  were  an  important  source  of  information  that  was  often 
combined with the responses to the detailed technical questionnaire. The following sub sections 
briefly presents the results of the most important parts of the open public consultations: 

A.  Excise-Customs Interactions 

The  first  section  of  the  questionnaire  was  on  excise-customs  interactions  and  addressed  five 
questions  to  economic  operators  and  stakeholders  with  knowledge  on  import  or  export 
procedures. Answers of the 36 economic operators and 48 associations cover engagement in the 
export or import of excise goods, their perception of the current procedure, and the assessment 
of potential improvement. 

63 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Table 4 and 5 below present the level of satisfaction with the current procedures for exporting 
goods and for importing goods, respectively. 

Table 4. Level of satisfaction with current procedures for exporting goods 

Table 5. Level of satisfaction with current procedures for importing goods 

In the case of export procedures, the level of dissatisfaction (41 respondents) is higher than the 
level of satisfaction (22 respondents), pointing out that there is room for improvement of these 
procedures.  In  the  case  of  imports,  the  situation  is  different,  with  more  respondents  satisfied 
with the current procedures (44), as opposed to dissatisfied respondents (only 10).   

Table 5. Level of agreement with the option to cross-check data between customs 
declarations and excise electronic administrative documents 

64 

 
 
 
 
 
 
 
The final question related to the level of agreement of respondents to the option for improving 
the  current  situation.  Most  respondents  (73  or  48%)  agreed  with  the  option,  with  only  4 
respondents disagreeing.   

B.  Duty-Paid Business-to-Business procedures (B2B) 

Table 6. Level of satisfaction with current duty paid business-to-business procedures 

As  can  be  seen  from  Table  6,  most  of  the  respondents  that  answered  the  question  were 
dissatisfied or very dissatisfied with the current procedures (49 respondents or 32%) and only 5 
respondents  (3%)  were  satisfied  with  them,  pointing  out  to  a  need  to  further  improve  these 
procedures. 

When asked what is the most adequate level to take action, 45% (68 respondents) indicated the 
EU level, while only 4% (6 respondents) thought that the national level is appropriate. 

There respondents were then presented the option for improvement of the current situation by 
automating  the  duty  paid  B2B  procedures,  EU-wide.  They  were  then  asked  two  further 
questions:  one  on  the  effort  needed  to  comply  with  the  new  requirements  and  one  on  the 
usefulness of such a change.  

As regards the efforts to register as an excise operator and to change the internal process of the 
organization in order and to switch to computer based procedures, most respondents estimated 
them to  be low or  very low (49 respondents  for  the registration as an excise operator and 38 

65 

 
 
 
 
respondents for the change of internal processed respectively) while only 6 respondents (for the 
registration  as  an  excise  operator)  and  8  respondents  (for  the  change  of  internal  processed 
respectively) estimated them to be high or very high. This indicates a low potential burden of 
the changes on the concerned organizations.  

Table 7. Usefulness of switching to computer-based procedures  

 As can be seen from the table above, most respondents (68 or 45%) believe the option would 
be useful for their organizations, with only 3 respondents (or 2%) disagreeing. 

C.  Low Risk Movements 

Table 8. Level of satisfaction with current low risk movements (under 1 000€ or 20% of 
the value of the goods) 

As  can  be  seen  from  Table  8,  most  of  the  respondents  that  answered  the  question  were 
dissatisfied  or  very  dissatisfied  with  the  current  procedures  for  low  risk  movements  (48 
respondents or 32%) and only 6 respondents (4%) were satisfied with them, pointing out to a 
need to further improve these procedures.  

When asked what is the most appropriate level for improving the current procedures, 48% (72 
respondents) indicated the EU level while 3% (5 respondents) indicated the national level. One 
association  commented  that the solution is “EMCS exemption  for low  value  movements (…) 
harmonised within EU and applicable to all excisable goods.” 

The respondents were presented the option to improve the current situation which would be to 
replace the current movement control by a monthly return, similar to a VAT monthly return. In 
that case, there would not be a supervision of the movements by the national authority on a per-
movement basis anymore.  

66 

 
   
 
The majority of respondents rated the suggestion positively: 60 of them (or 40%) believing the 
impact of the option to be beneficial or very beneficial and only 4 respondents (or 3%) believing 
this would be detrimental or very detrimental.    

Table 9. Impact of using monthly returns for your organization, compared to the current 
procedures 

.  

Thus,  it  can  be  concluded  that  there  is  a  relatively  important  level  of  support  for  this  option 
from the side of the respondents that have taken part in the open public consultation.  

D.  Exceptional Situations such as Shortages, Excesses, Rejections or Interruptions 

Currently,  strategies  to  face  exceptional  situations  vary  between  EU  Member  States.  These 
strategies include means, processes, and methodologies, address shortages, excesses, rejections, 
or  interruptions  of  movements.  Determined  by  the  national  approach,  these  exceptional 
situations may cause irregularities, duty claims, penalties, or seizure of goods. For this chapter, 
the  respondents  evaluated  the  current  frequency  of  exceptional  situations,  expressed  their 
expectations  for  improvements,  and  rated  various  options  for  enhancements  that  would 
harmonise the approach across the EU.  
As  in  the  previous  sections,  most  of  the  respondents  supported  action  at  EU  level  (68 
respondents  or  45%)  with  only  a  small  minority  of  2%  (3  respondents)  indicating  that  they 
would rather see action at national level. 
The  survey  described  the  options  considered  by  the  European  Commission  to  improve  the 
current  situation:  to  harmonise  at  EU  level  the  methodology  for  assessing  shortages  and 
excesses as well as to ensure a right to be heard exists in each Member State for the exceptional 
situations  and  related  public  authorities'  decisions  that  can  occur  during  the  movements  and 
holding of excise goods. It also described the option to harmonise at EU level the consequences 
(duty claims, penalties or seizure of the goods) of exceptional situations. 
Then the respondents were asked to rate how useful each of the 3 options would be for them:  

  Level of necessity of an EU harmonization of methodologies for assessing shortages and 
excesses: 68 respondents ( 45%) found this useful, as opposed to 2 respondents (1%) 
who did not find it useful; 

  Level of necessity of an EU harmonised right to be heard: 74 respondents ( 49%) found 

this useful, as opposed to only 1 respondent (1%) who did not find it useful; 

67 

 
 
  Level of necessity of an EU harmonization of the consequence of exceptional situations: 
66 respondents ( 44%) found this useful, as opposed to 2 respondents (1%) who did not 
find it useful; 

 Thus, it can be concluded that the level of support for these changes clearly outweighted the 
opposition to such changes. 

E.  Risk Analysis  

At  times,  national  public  authorities  lack  the  necessary  data  to  analyse  the  fiscal  risk  of 
movements  of  excise  goods.  To counteract this  deficiency, economic operators could provide 
additional information about their business and their movements of goods. 

As  for  the  sectors  the  businesses  operate  in,  it  is  remarkable  that  the  majority  of  economic 
operators  that  move  manufactured  tobacco  products  expect  a  low  effort  for  the  report  of 
requests and renewals of warehouse capacity (60%). On the other side, operators in the area of 
alcohols and alcoholic beverages expect the highest effort, reporting only very high, high, and 
moderate  efforts  to  equal  shares  (23.5%).  The  effort  estimated  by  businesses  from  energy 
products  may  be  found  in  the  middle,  between  the  two  extremes.  Table  10  summarises  these 
responses. 

Table 10. Effort for request/renewals of warehouse capacity by sector (in percent) 

Manufactured tobacco products

20,0 

10,0 

60,0 

10,0 

Energy products

33,3 

33,3 

16,7 

16,7 

Alcohols and alcoholic beverages

23,5 

23,5 

23,5 

29,4 

0%

20%

40%

60%

80%

100%

Very high

High

Moderate

Low

Very low

Don't know

F.  Acquisition by private individuals 

The Council Conclusions54 call on the Commission to explore the possibilities for revising the 
provisions on guide-levels for intended own use of alcohol (and tobacco), set out in Article 32 
of  the  Directive.  Furthermore,  the  Council  Conclusions  on  "Cross-border  aspects  in  alcohol 
policy — tackling the harmful use of alcohol"55 also invite Member States and the Commission 
to  tackle  the  issue  of  the  cross-border  purchases  of  alcoholic  beverages  to  support  the 
effectiveness of national alcohol and health policies. 

In the last section of the open public consultation as well as in a separate targeted questionnaire 
to national health authorities, the respondents were asked several questions related to the effects 
of the Directive on public health, especially those related to guide level thresholds for personal 
consumption.  According  to  the  Directive  individuals  can  transport  excise  goods  (such  as 
cigarettes or alcohol) to another EU country without paying any excise taxes, provided they are 

54 Council Conclusions on Commission report on Council Directive 2008/118/EC (adopted on 5/12/2017) 
55 http://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:52017XG1222(01)&from=EN  

68 

 
 
 
 
 
                                                 
for  personal  use56.  However,  it  should  be  noted  that  any  changes  related  to  these  issues  was 
outside  the  scope  of  the  current  proposal,  and  these  questions  were  of  an  exploratory  nature 
only.  This  topic  triggered  high  interest  in  the  open  public  consultation  (especially  from 
respondents in one particular Member State), as well as in the Member States' consultation.  

Most respondents to the open public consultation  (64 respondents or 42%) were not aware of 
negative impacts of the Directive on public health related to tobacco or alcohol consumption, 
but  there  was  a  relatively  high  number  of  respondents  that  was  aware  of  such  effects  (55  or 
36%), as it is shown in Table 11.  

Table 11. Open public consultation - awareness of any negative impact of Directive 
2008/118/EC on public health related to tobacco or alcohol consumption? 

Respondents  to  the  open  public  consultation  were  asked  to  assess  four  different  measures  to 
possibly alleviate the negative impact on health. The results can be seen in the table below. 

Table 12. Open public consultation57 - possible measures to alleviate the negative impacts 
on health (absolute number of respondents and percentage) 

Useful 

Neutral  Not useful  Don't know/no 

Lower the EU minimum thresholds of 
the guide levels in the Directive 

60  

8 

28 

(40%) 

(5%) 

(19%) 

61 

9 

25 

(40%) 

(6%) 

(17%) 

Allow national adjustments of the 
guide levels to prevent 
disproportionate negative effects on 
excise tax collection 

Allow national adjustments of the 
guide levels to prevent 
disproportionate negative effects on 

64 

8 

25 

(42%) 

(5%) 

(17%) 

54 

(36%) 

answer 

55 

(36%) 

56 

(37%) 

56 The current thresholds are 800 cigarettes, 110 l of beer, 90 l of wine or 10 l of spirits.,   

57  Views  of  economic  operators,  NGOs  and  private  individuals  have  been  collected.  While  most  of  economic 
operators  were  not  in  favour  of  adjusting  the  guide  levels,  about  80%  NGOs  and  private  individuals 
supported this option. 

69 

 
 
 
 
 
 
 
 
 
                                                 
public health 

Allow national adjustments of the 
guide levels by removing the EU 
minimum thresholds 

56 

8 

31 

(37%) 

(5%) 

(21%) 

56 

(37%) 

When it comes to the results for the targeted questionnaire that was addressed to the national 
health authorities, 9 national authorities indicated that they are aware of negative impacts of 
the  Directive  on  public  health,  while  7  were  not  aware  of  such  negative  impacts.  The 
remaining 12 national authorities did not reply to the survey or did not know.    

The  respondents  to  the  national  health  authorities'  targeted  questionnaire  were  also  asked  to 
assess four different measures to possibly alleviate the negative impact on health: 

Table 13. Targeted questionnaire to national authorities - possible measures to alleviate 
the negative impacts on health (absolute number of authorities) 

Useful 

Neutral  Not useful  Don't know/no 

answer 

Lower the EU minimum thresholds of 
the guide levels in the Directive 

Allow national adjustments of the 
guide levels to prevent 
disproportionate negative effects on 
excise tax collection 

Allow national adjustments of the 
guide levels to prevent 
disproportionate negative effects on 
public health 

Allow national adjustments of the 
guide levels by removing the EU 
minimum thresholds 

12 

13 

13 

7 

1 

3 

3 

2 

5 

1 

1 

7 

10 

11 

11 

12 

Thus, it can be concluded that there is an interest in more flexibility on the guide levels, both 
among the citizens as well as the national health authorities.   

70 

 
 
 
 
 
 
 
 
 
ANNEX III  Who is affected by the initiative and how 

1. 

Practical implications of the initiative 

National  excise  and  customs  authorities  are  affected  by  this  initiative,  which  reduces  their 
administrative burden and improves their capacity in fighting fraud at the (enforcement) cost 
of evolutions in their IT systems and their business processes. 

Economic Operators involved in the holding and movement (including imports and exports) 
of excise goods are affected by this inititave. It reduces the regulatory burden at the cost of 
providing a few extra data items to their National Authorities and of some evolutions in their 
IT systems. 
Most  of  Economic  Operators  affected  by  this  initiative  are  large  companies.  However  the 
automation  of  the  duty  paid  business-to-business  procedures  is  expected  to  benefit to  Small 
and Medium Entreprises. 

Cost and Benefit figures are provided in each chapter for each problem area (e.g. "customs – 
excise interactions: export", "duty paid business-to-business"). 

2. 

Summary of costs and benefits 

The  tables  here  below  summarise  the  costs  and  benefits  (in  million  euros)  for  all  preferred 
options together. 
Note 1: none of the options provide benefits or induce costs to citizens or consumers. 
Note 2: no indirect costs have been identified during the impact assessment 

I. Overview of Benefits (total for all provisions) – Preferred Options 

Description 

Member States 

Amount 
per year 

Direct benefits 

Comments 

administrative cost savings 

14.55 

impact on fraud 

+ 

Economic Operators 

●  EU  common  requirements  for  alternate 
proof  of  exit  and  exceptional  situations  will 
reduce the time spent on processing files and 
disputes 
●  the  automation  of  the  current  paper-based 
duty  paid  B2B  procedures  will  increase  staff 
productivity 
●  data  cross-check  between  excise  and 
customs  will 
increase  data  quality  and 
consistency,  making  fraud  more  difficult  at 
import and export 
●  automation  of  duty  paid  B2B  procedures 
will  improve  the  monitoring  of  cross-border 
movements of excise goods 

71 

 
 
 
 
 
regulatory cost savings 

32.27 (1) 

the 

time 

●  EU  common  requirements  for  alternate 
proof  of  exit  and  exceptional  situations  will 
reduce 
disputes 
●  automation  of  duty  paid  B2B  procedures 
will  make  processing  faster,  which  will 
immobilise  the  movements'  guarantee  for  a 
shorter period of time  

spent 

on 

Economic Operators 

Indirect benefits 

impact on market and SMEs 

+ 

than 

●  from  the  stakeholders'  consultation,  it 
appears that the automation of duty paid B2B 
procedures will reduce regulatory costs more 
to  SMEs 
companies 
to 
●  EU  common  requirements  for  alternate 
proof  of  exit  and  exceptional  situations  will 
reduce  the  overhead  of  disputes  with  other 
Member States than the one of establishment 
and may increase competitiveness of SMEs 

large 

(1) This figure is lower bonds as some preferred options (Allowable losses thresholds, Right 
to be Heard; see section 7.5) bring benefits that are not quantified. 

II. Overview of costs (million euros) – Preferred options 

Businesses 

Administrations 

Excise-export data cross-check 

EU  common  list  of  alternate 
proofs of exit 

Direct costs 
Indirect costs 

Direct costs 

Indirect costs 

One-off  Recurrent  One-off  Recurrent 
0.87 (1) 

1.32 (4) 

4.34 (1) 

0.00 

0.00 

Excise-export 
external transit 

followed 

by 

Direct costs 

Excise-import data cross-check 

paid 
of 
Automation 
business-to-business procedures 

duty 

EU  common  requirements  for 
exceptional situations 

TOTAL 

Indirect costs 

Direct costs 

Indirect costs 

0.13 (4) 

3.40 (1) 

0.68 (1) 

Direct costs 

14.50 (2) 

2.90 (2) 

9.89 (3) 

1.98 (3) 

Indirect costs 
Direct costs 

Indirect costs 

0.00 

0.36 

Direct costs 

14.50 

4.35 

17.63 

3.89 

Indirect costs 

(1) enforcement costs, mostly for the evolutions of IT systems 

72 

 
 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(2)  compliance  and  hassle  costs  to  register  as  a  duty  paid  B2B  economic  operators  and 
enforcement costs for the evolution of IT systems 
(3)  administrative  costs  to  register  and  authorise  duty  paid  B2B  economic  operators  and 
enforcement costs for the evolution of IT systems 
(4)  administrative  costs  to  provide  excise  references  in  the  customs  export  and  import 
declarations 

ANNEX IV  Analytical Models used in preparing the Impact Assessment 

Volume of Trade and Fraud for excise goods. 

Document [R1] provides overall figures on the goods value and excise duty of excise goods 
imported to the EU, exported from the EU and moved cross-border intra-EU. It also assesses 
that  the  fraud  on  excise  goods  amounts  to  about  EUR  5.2  billion  per  year  for  17  Member 
State, which is extrapolated to EUR 8.6 billion per year for 28 Member State. 

Document [R3] states that, for tobacco alone, the EU VAT and duty gap is about 10 billion 
euro per year58, including an excise duty loss of about EUR 7 billion per year. Document [R4] 
assesses the excise duty gap in the UK alone at GBP 2.8 billion (EUR 3 billion) in 2015. 

From  the  documents  quoted  here  above,  the  overall  EU  excise  fraud  is  assessed  at  EUR 10 
billion per year; the EU excise fraud per area (import, export, intra-EU) is extrapolated at the 
prorata of the goods value59. 

However, the bulk of the excise fraud comes from patterns such as smuggling into the EU or 
illicit production in the EU, which do not involve any declared movement whatsoever. So, the 
amount of fraud on which the Directive can act upon is only a part of the overall EU excise 
fraud and this part corresponds to the trade of excise goods which is declared at least partly 
(e.g. declared at the Member State of Dispatch or at the Member State of Destination). Based 
on an analysis of discrepancies in the declared volume of trade in IntraStats between acquirers 
and providers, document [R5] provides an estimate of this amount of fraud for  the Intra EU 
trade between EUR 174 and 636 million per year, i.e. an average of about 400 million euros 
per year. Extrapolated at the prorata of the goods value, the fraud on which the Directive can 
act  upon  at  import  and  export  are  assessed  at  648  million  euros  and  198  million  euros 
respectively. 

The  stakeholders'  consultation  provided  also  some  inputs  on  suspected  fraud  related  to 
problems  and  options  in  the  scope  of  this  initiative.  Extrapolated  EU-wide  based  on  the 
volume of trade, these inputs leads to a suspected excise revenue loss of EUR 28 million for 
export,  21  million  for  export  using  Single  Transport  Contract  and  20  million  for  duty  paid 
B2B. 

IT Cost Model for member States 

To  assess  the  cost  of  IT  systems  evolutions  for  member  States,  the  independent  contractor 
chose to re-use a model established in 2012 for the cost assessment of the IT systems required 
by  the  Modernised  Customs  Code  (now  Union  Customs  Code).  This  IT  cost  model  was 
deemed  valid  for  this  initiative  as  the  excise  trans-European  IT  systems  are  close  to  the 
customs' ones in many aspects (architecture, organisation, etc.)60. 

58 Europol, quoting KPMG, reports 11 billion euros of tax & duty loss related to tobacco fraud in 2015. 
59 For instance, the excise fraud at import is extrapolated to 10 * (432/834) = 5.2 billion euros per year 
60 For instance, EMCS and SEED are close to customs' IT systems New Computerised Transit System (NCTS) 

and Economic Operator System (EOS) respectively. 

73 

 
 
                                                 
The principle of this model is to first assess the IT development cost based on indicators of 
the  required  evolutions  (e.g.  number  of  impacted  tasks,  processes,  messages)  and  then  to 
extrapolate  the  other  IT  costs  (e.g.  quality  assurance,  deployment,  operations)  from  the  IT 
development ones. 

This description of the 2012 IT cost model is copied here below. 

The basis for the estimation method resides in the analysis of business process models for the 
implementation of evolutions and on using specific customs process areas that were modelled 
in  detail  and  precisely  estimated.  These  facts  allow  to  build  an  estimation  model  based  on 
counting sizing parameters (number of processes, number of unique tasks in those processes, 
number  of  new  information  exchanges,  number  of  interfaces  to  existing  IT  systems),  and 
calibrate  it  using  the  precisely  estimated  projects,  counting  the  same  sizing  parameters  on 
these IT projects. 

Moreover,  the  model  has  been  adapted  to  reflect  the  diversity  of  current  IT  systems  for 
Customs  in  the  MS,  in  terms  of  technology,  architecture  and  status.  The  model  uses  three 
types of IT situations for a MS that will introduce additional parameters in the effort and the 
cost  for  the  implementation  of  an  IT  project  to  improve  the  accuracy  of  these  estimations, 
using the available information for these IT projects. 

  Type  1:  The  existing  IT  system  has  been  built  using  flexible/modular  architecture 
such  as  Service  Oriented  Architecture  and  it  will  be  upgraded  to  support  the  new 
functionality; 

  Type 2: The existing IT system has been built using older technology (monolithic not 

modular structure) and it will be upgraded to support the new functionality; 

  Type 3: A new system will be implemented to accommodate the changes brought by 
the  project  using  new  flexible/modular  architecture  such  as  Service  Oriented 
Architecture.  

The estimation method is detailed hereafter. 

The  Basic  assumption  for  the  effort  and  cost  estimation  concerns  the  activities  and  related 
costs that are included in the estimation and the ones that are excluded. 

The implementation tasks that are included in the estimations are the following: 

  Functional and technical systems specifications (FSS, TSS); 

  System Design, Build and Testing activities (DBT); 

  Deployment, Roll-out and Conformance tests activities; 

  Project management and Quality assurance activities. 

Yearly  recurring  costs  for  infrastructure,  maintenance,  support  and  operations  costs  are 
estimated at 20% of the implementation costs. 

Also the model is built on the following assumptions 

  All processes are in average of equivalent size/complexity; 

  Level of granularity in L3 BPM's is coherent in all BPM's inspected; 

  Updates in Tasks and in messages lead to the same implementation effort; 

74 

 
  All  tasks  in  L3  BPMs  inspected  are  assumed  to  be  automated  tasks  (i.e.  to  be 

implemented by an IT system); 

  Type  1/2/3  Member  States  are  assumed  to  have  type  1/2/3  applying  for  ALL  the 

options of this initiative. 

The generic algorithm used to estimate Member State project implementation effort takes into 
account the following steps and parameters: 

1. For each project, the existing applicable BPMs are used to count: 

  The total number of processes in scope (# processes); 

  The number of processes where a change is occurring (# of changed processes); 

  The total number of unique tasks in those processes (# of tasks); 

  The number of tasks where a change is occurring (# of changed tasks); 

  The number of new or updated information exchanges (messages) in these processes 

(# of messages); 

 

In  addition,  for  each  project,  the  number  of  new  or  updated  interfaces  with  other 
(existing)  systems  (or  other  process  areas)  (#  of  impacted  interfaces),  and  the  total 
number of interfaces (# of interfaces). 

3. The different project activities are assumed to be dependent on one or many of the above 
parameters, as follows: 

  Functional System Specifications (FSS): 

o  The  total  number  of  processes  determines  the  effort  for  Functional  System 
Specifications  activities  (it  is  assumed  all  the  processes  will  need  to  be 
specified, even if no change); 

o  The effort is computed as follows:  

total FSS effort = # processes × effort for 1 process FSS; 

  Technical System Specifications (TSS): 

o  The  number  of  processes  only  where  a  change  is  occurring,  determines  the 

effort for the Technical System Specifications activities; 

o  The effort is computed as follows:  

total TSS effort = # of changed processes × effort for 1 changed process TSS; 

  Design, Build and Test (DBT): 

o  The  number  of  tasks  where  a  change  is  occurring  and  the  number  of  new  or 
updated information exchanges (messages) determine the effort for the Design-
Build-Test activities; 

o  The  number  of  interfaces  to  other  (existing)  systems  (or  other  process  areas) 

adds an effort percentage to Design-Build-Test activity; 

o  For  estimating  the  Design-Build-Test  effort  for  each  project,  the  Member 
States are assumed to have be in one of the three following categories for each 
project: 

75 

 
 
  Type  1:  The  existing  IT  system  has  been  built  using  flexible/modular 
architecture  such  as  Service  Oriented  Architecture  and  it  will  be 
upgraded to support the new functionality. 
In that case the DBT estimation is done as follows: the number of new 
tasks added to the number of new messages, multiplied by the effort for 
one  task  and  message.  The  Design-Build-Test  effort  (DBT)  effort  is 
also increased by an additional 3% per changed interface to an existing 
system (e.g. if the project needs to change for instance 3 interfaces to 
other systems, the effort is increased by 9%): 

total DBT effort = (# of changed tasks × effort for 1 task + # of 
messages × effort for 1 message) × (1 + # of impacted interfaces × 
0.03); 

  Type 2: The existing IT system has been built using older technology 
(monolithic  not  modular  structure)  and  it  will  be  upgraded  to  support 
the new functionality. 
To  reflect  the  old  technology  stack  that  is  more  costly  to  change,  an 
additional  40%  DBT  effort  of  is  estimated  with  regard  to  the 
flexible/modular  architecture.  The  DBT  effort  is  increased  by  an 
additional  5%  per  changed  interface  to  an  existing  system  instead  of 
3% that was applied for the flexible/modular architecture type 1 (e.g. if 
the project needs to change  for instance  3 interfaces  to other systems, 
the effort is increased by 15%): 

total DBT effort = (# of changed tasks × effort for 1 task + # of 
messages × effort for 1 message) × 1.4 × (1 + # of impacted interfaces 
× 0.05); 

  Type  3:  A  new  system  will  be  implemented  to  accommodate  the 
changes brought by the project using new flexible/modular architecture 
such as Service Oriented Architecture.  
In  this  case,  the  total  number  of  tasks  parameters  drives  the  Design-
Build-Test  (DBT)  effort,  increased  by  3%  per  interface  to  an  existing 
system, and counting here all the interfaces to other systems. For some 
projects  a  multiplication  factor  (factor  2  applied  to  Entry  and  Import 
and Centralised Clearance projects; factor 4 for NCTS) is applied to the 
number of tasks, to reflect the fact that most processes not changed by 
legislation are not modelled and so do not enter in the counting, and in 
addition, some specific national (sub-)processes might also need to be 
included (i.e. related to excise, VAT, ...): 

total DBT effort = (# of tasks × effort for 1 task + # of messages × 
effort for 1 message) × (1 + # of interfaces × 0.03). 

For an EU-wide cost estimate of the options in this initiative, it is assumed that all 
Member  States  are  of  Type  1.  This  is  because  excise  IT  systems  (EMCS  and 
SEED) are recent and the customs IT systems to be interfaced with them are being 
modernised due to the implementation of the Union Customs Code. 

76 

 
4. The other project activities are assumed to be a percentage of the previous activities efforts, 
as follows: 

  The  Deploy-Rollout-Conformance  Tests  activities  are  assumed  to  be  20%  of  the 

Design-Build-Test;  

  The  Project  Management  activities  are  assumed  to  be  15%  of  all  the  previous 

activities; and 

  The Quality Assurance activities are assumed to be 20% of all the previous activities 

(including PM). 

In addition, the effort and cost method for MS take also into account the following variations: 

  For  Project  management  and  Quality  assurance  (PM  and  QA)  Member  States 
efforts presented above are merged in a single multiplication factor, assumed to be 
equal to 38% of Design-Build-Test and Deploy/Roll-out efforts. 

5. To calibrate the model, the RSS (Regular Shipping Service authorisation) and the COPIS 
projects that have accurate estimates and parameters, are used to count the same parameters, 
and come to effort values for the parameters (for FSS, TSS and DBT): 

  The currently derived value for 1 process: around 50 Man-days; 

  The currently derived value for 1 process with change: around 50 Man-days; 

  The currently derived value for 1 task with change: around 35 Man-days; 

  The currently derived value for 1 message exchange: around 35 Man-days. 

When no sufficientlty detailed business process models were available for a given option, the 
IT cost was extrapolated from the Member States' inputs from the stakeholders' consultation. 

IT cost for Economic Operators: no IT cost model was available for Economic Operators. So, 
this  cost  was  extrapolated  from  the  Economic  Operators'  inputs  from  the  stakeholders' 
consultation61. 

Man*day cost 

Two  profiles  apply  to  the  cost  models  used  in  this  impact  assessment,  in  order  to  translate 
efforts into financial values. 

For IT cost, the same man*day rate was used as the 2012 IT cost model referred to here above 
(the EU-average value was 500€ in 2012), with an overhead equal to the growth of labour cost 
for IT specialists between 2012 and 2016, leading to 559€ per man*day in 2016. 

For  other  costs  (e.g. administrative  cost),  the Commission's  2017  Standard  Cost Model  was 
used,  with  profile  ISCO3  "Technicians  and  associate  professionals"  (see  document  [R5] 
Annex E). 

61 For instance, if an option has an impact on each movement of excise goods and if Economic Operators, whose 
trade  volume  represent  10%  of  the  EU  number  of  excise  movements,  indicated  in  their  replies  to  the 
stakeholders' consultation a total cost of EUR 100,000, then the EU-wide IT cost for Economic Operators for 
this option is extrapolated to EUR 1 million. 

77 

 
 
 
                                                 
ANNEX V  Reference Documents 

[R1]  "Evaluation of current arrangements for the holding and moving of excise goods under 

excise duty suspension" (2016) 

[R2]  "Evaluation  of  current  arrangements  for  the  cross  border  movements  of  excise  goods 

that have been released for consumption" (2015) 

[R3]  "COMMUNICATION  FROM  THE  COMMISSION  TO  THE  COUNCIL  AND  THE 
EUROPEAN  PARLIAMENT  -  Stepping  up  the  fight  against  cigarette  smuggling  and 
other  forms  of  illicit  trade  in  tobacco  products  -  A  comprehensive  EU  Strategy" 
(COM(2013) 324 final) 

[R4]  Measuring Tax Gap in the UK – 2016 edition 

[R5]  "Study  contributing  to  an  Impact  Assessment  on  Council  Directive  2008/118/EC 
concerning the general arrangements for excise duty"   27/11/2017 [yet to be published] 

[R6]  "Council  Conclusions  on  Commission  Report  on  Council  Directive  2008/118/EC" 

adopted on 05/12/2017 

ANNEX VI  areas for improvement identified in the evaluations and not addressed  

Some areas for improvement identified in the evaluations and/or in the Council conclusions 
(see  [R1],  [R2]  and  [R6])  have  not  been  addressed  in  this  Impact  Assessment  for  the 
following reasons.  

a) Guarantees and obstacles to obtaining economic operator authorisations: These issues were 
not  considered  further  as  there  were  no  clear  conclusions  from  evaluations  about  the  way 
forward.  The  evaluation  studies  did  not  reflect  the  issue  of  guarantees  as  a  major  cause  of 
concern  to  economic  operators,  and  the  evaluation  studies  did  not  indicate  any  major 
obstacles to economic operators joining the schemes. Therefore this area did not indicate clear 
options that could have been explored in the Impact Assessment. 

b)  Distance  selling:  A  real  simplification  for  distance  selling  of  excise  goods  can  only  be 
achieved if the requirement of having a tax representative is abolished, the payment of excise 
duties in the Member State of consumption is simplified but secured and the seller does not 
need a VAT number in the Member State of consumption. This was as well the conclusion of 
a  project  group  with  Member  States  in  2015.  Distance  selling  (together  with  acquisition  by 
private  individuals)  is  also  an  area  with  potential  public  health  impact    which  may 
compromise Member States policies to reduce alcohol related harm. The Commission decided 
to  postpone  the  examination  of  distance  selling  of  excise  goods  until  a  One  Stop  Shop  for 
VAT  was  adopted.  The  VAT  e-commerce  Directive  was  adopted  by  the  Council  on  5 
December 2017 and a study will be launched by the Commission in 2018. Once the outcome 
of  the  study  will  be  known,  the  appropriateness  of  presenting  a  legislative  proposal  on  this 
topic will be assessed. 

c)  Acquisition  by  private  individuals:  until  2016,  no  stakeholder  (European  Commission, 
Member  State  or  Economic  Operator)  showed  any  particular  interest  in  the  guide  levels 
specified  in  Article  32  of  Directive  2008/118/EC.  Early  2017,  some  Member  States  (e.g. 
Estonia,  Finland,  Sweden)  and  DG  SANTE    proposed  to  include  the  issue  of  cross  border 
purchases of alcohol and tobacco for personal use into the evaluation process of the Directive 
2008/118/EC  to  support  health  policies.  However  this  is  a  potentially  sensitive  topic  for 

78 

 
 
 
citizens,  which  had  not  been  previously  evaluated  and  was  not  supported  by  some  other 
Member  States  (e.g.  Germany,  Luxembourg).  The  Commission  will  conduct  a  joint  excise 
and health back-to-back evaluation and impact assessment in 2018-2019, supported by a study 
performed by an external contractor, which is fully compliant with the Council Conclusions. 
Once the outcome of the study will be known, the appropriateness of presenting a legislative 
proposal on this topic will be assessed. 

d) Journey time limits restrict the maximum journey time estimate that can be entered on an 
electronic administrative document (e-AD). The previous situation, which existed during the 
evaluation,  was  that  any  estimated  journey  time  could  be  entered  of  up  to  92 days,  which 
made the journey time estimate useless from a control point of view. In the meantime this has 
been  addressed  by  an  amendment  of  the  Excise  Movement  Control  System  (EMCS) 
Implementing  Act  (Regulation  (EC)  684/2009)  to  introduce  more  reasonable  maximum 
journey times. These changes were implemented in EMCS in February 2018. 

e) Direct delivery definitions were not raised as an issue by stakeholders during the evaluation 
studies, nor in the open public consultation. 

f)  The  procedures  for  the  supervision  of  the  movement  of  ships  and  aircraft’s  stores  were 
discussed  with  Member  States  in  the  Excise  Committee,  acting  as  an  expert  group  in  2010. 
Article  41  allows  Member  States  to  choose  whether  to  exempt  ship  stores  from  VAT  and 
excise duty, but previously there was no commonly accepted way of supervising such goods 
from  a  place  of  dispatch  onto  the  ship.  The  conclusion  was  that  such  stores,  where  the 
Member  State  of  loading  agreed  that  such  goods  should  be  exempt  from  VAT  and  excise 
duty, should be subject to export formalities, but not the export procedure. So, in the case of 
an  indirect  movement,  the  Export  Control  System  (ECS)  would  deliver  an  exit  result  to 
confirm  loading  of  the  goods,  but  this  would  not  otherwise  be  treated  as  an  export.  This 
conclusion was further discussed during the drafting of the Union Customs Code and is now 
legally reflected in Article 269 (2) (c) of the Union Customs Code.  

g) EU risk analysis system: the potential enhancement to EMCS was mentioned in the 2015 
evaluation study report for duty suspension; in meetings with Member States. The suggestion 
was  to  add  information  to  electronic  administrative  documents  and  the  development  of  IT 
tools,  which  could  be  used  for  enhanced  risk  analysis  by  Member  States.  However, 
difficulties arose in reaching any common agreement about how to define specific options for 
data  and  for  tools.  This  idea  of  enhancement  was  eventually  not  part  of  the  Council 
Conclusions. 

79