COMMISSION STAFF WORKING DOCUMENT Implementation of article 43b of Regulation 515/97 Accompanying the document REPORT FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT AND THE COUNCIL 29th Annual Report on the Protection of the European Union's financial interests - Fight against Fraud - 2017
Date: 2018-09-03
Institutions: European Anti-Fraud Office, European Commission
Subjects: EU programme, activity report, common strategy, crime, fight against crime, financial control, fraud, fraud against the EU

EN 

  EN 

   EUROPEAN COMMISSION  Brussels, 3.9.2018 SWD(2018) 385 final  COMMISSION STAFF WORKING DOCUMENT Implementation of article 43b of Regulation 515/97 Accompanying the document REPORT FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT AND THE COUNCIL 29th Annual Report on the Protection of the European Union's financial interests - Fight against Fraud - 2017 {COM(2018) 553 final} - {SWD(2018) 381 final} - {SWD(2018) 382 final} - {SWD(2018) 383 final} - {SWD(2018) 384 final} - {SWD(2018) 386 final}  
 
 
Implementation of Article 43b of Regulation 515/97 

1. Introduction 

Regulation 2015/15251 amending Regulation 515/97 on mutual assistance in customs matters 
introduced  Article  43b  requiring  the  Commission,  by  9  October  2017,  to  carry  out  an 
assessment of: 

  The necessity of extending the export data contained in the Container Status Messages 
(CSM) directory2 and Import, Export and Transit (IET) directory3, by including data 
on goods other than excisable goods ('necessity assessment'), and 

  The feasibility of extending the data contained in the transport directory, by including 
data on import, export and transit of goods by land and air ('feasibility assessment'). 

The Commission made a preliminary assessment in its annual report on the protection of the 
EU's financial interests (PIF Report) for 20164 and committed to make a more comprehensive 
analysis in the PIF Report for 2017. 

Member  States  were  regularly  associated  with  this  exercise  in  the  context  of  the  Expert 
Group on mutual assistance in customs matters. 

2. Necessity assessment 

Currently,  in  accordance  with  Article  18a(4),  point  (b),  and  Article  18d(1),  point  (c),  of 
amended Regulation 515/97, both the CSM directory and the IET directory are limited to the 
export data of specific categories of excisable goods (including alcohol, tobacco and energy 
products). 

With regard to the CSM directory, the maritime carriers currently submitting CSM data to the 
Commission  are  given  a  choice  as  to  the  preferred  method  of  transmission.  According  to 
Article  3(2)  of  Commission  Implementing  Regulation  2016/3455  the  two  options  include: 
'global  dump'  which  means  transfer  of  all  CSMs  generated,  collected  or  maintained  in  the 
carrier's  electronic  records  without  selecting  individual  CSMs  as  specified  in  amended 
Regulation  515/97,  and  'selective  reporting'  which  means,  as  the  name  suggests,  selecting 
only the CSMs as required by legislation. 

It  has  to  be  noted  that  only  three  carriers  are  selectively  restricting  the  reporting  of  export 
CSM to excisable goods. The CSM reported by these three carriers constitute a mere 6.5% of 
the  total CSM  data  volume. All  the  other  carriers report  export  CSM  independently  of  the 

1 OJ L 243 of 18.9.2015, p. 1. 
2 The CSM directory contains information on the physical movements of any container imported by a maritime 
vessel into the EU, and of exported containers containing excise goods. This information, in the form of CSMs, 
is sent by the carriers directly to OLAF. 
3  The  IET  directory  contains  data  on  goods  entering,  leaving  and  transiting  the  EU.  This  information  is 
replicated  from  the  sources  operated  by  the  Commission  on  the  basis  of  the  Union  Customs  Code,  namely 
from Surveillance (import), ECS (export) and NCTS (transit) systems. 
4 COM(2017)383 final of 20.7.2017, see section 3.1.1.2 on Implementation of Article 43b of Regulation 515/97. 
5 OJ L 65 of 11.3.2016, p. 38. 

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commodity  being  transported  by  the  containers.  This  means  that,  as  such, extending  the 
obligation  to  report CSM  export  to  all  types  of  goods, would  not  affect  significantly  the 
volume  and  completeness  of  the  current  CSM  database.  Nonetheless,  such  an  extension 
would have the benefit of simplifying the text of the reporting obligation and there would be 
no more need for the Commission to maintain a long list of excisable goods. 

As regards the export data included in the IET directory, it is copied from the Export Control 
System (ECS) managed and operated by the Commission in accordance with Article 18d(1) 
of  Regulation  515/97.  Even  though  the  data  replicated  in  the  IET  directory  are  limited  to 
excisable  goods,  the  data  contained  in  the  ECS  are  not  limited  to  excisable  goods  and, 
provided Regulation 515/97 allows it, they would be easily replicable in the IET directory. 

The Commission engaged in consultations with Member States to determine the necessity of 
an  extension  of  the  existing  directories  to  encompass  other  categories  of  goods  apart  from 
those  subject  to  excise  duties.  A  large  majority  of  Member  States  (nineteen)  as  well  as  the 
Commission  have  supported  such  an  expansion,  stressing  that  additional  information  may 
assist  the  identification  and  prevention  of  infringements  committed  in  violation  of  export 
restrictions, curb customs fraud, expose fraudulent networks and protect public health, safety 
and security. One Member State noted that the gathering of additional data may facilitate the 
recognition  of  connections  between  companies,  goods  and  supply  chains.  Similarly,  one 
Member  State  acknowledged  that  the  additional  availability  of  data  could  provide  for  a 
deeper  level  of  analysis  to  tackle  customs  related  fraud  from  a  variety  of  different 
perspectives,  whilst  another  expressed  its  appreciation  over  the  centralisation  of  additional 
data and its potential positive effect on data availability. 

Eight Member States, however, expressed reservation about the widening of the scope of the 
directories  to  include  export  data  on  non-excisable  goods  for  a  variety  of  reasons.  One 
Member  State  felt  that  it  had  firstly  to  ensure  that  the  CSM  directory  was  functioning 
properly and smoothly before it could consider the necessity of extending the scope to other 
non-excisable goods. Similarly, one Member State felt that the CSM and IET directories were 
too new, to conclusively determine whether the expansion of such would be in its interests.  
Another felt that the type of information to be included in the foreseen expansion had to be 
defined before it could endorse such an initiative. One Member State expressed its scepticism 
over the need or added value of an expansion of the data available at central level in CSM 
and IET directories, arguing that the current databases should be perfected before notions to 
expand them can be entertained. 

One Member State was not in a position to provide a definite reply to the question pertaining 
to the need for an extension of the existing directories beyond excisable goods. 

The outcome of this consultation will be taken into account in the next review of Regulation 
515/97. 

3. Feasibility assessment 

Currently, Article 18a(1) of Regulation 515/97 provides that the Commission shall establish a 
directory of data reported by carriers (the so-called 'transport directory'). The CSM directory, 
which is provided for by Article 18a(4) of the same Regulation, is to be considered as a sub-
set of the transport directory limited to transport of goods by maritime containers. This is the 
only part of the transport directory for which a legal obligation to report currently exists. 

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The  legal  basis  for  creating  and  managing  the  transport  directory  (covering  all  means  of 
transport) is already included in Regulation 515/97. What is lacking for the transport by land, 
including by rail, and air is the corresponding obligation to report which exists for maritime 
transport. 

In its assessment the Commission has taken into account the concerns expressed by Member 
State  Customs  Authorities  at  various  occasions  about  the  issue  of  complexity  of  reporting 
requirements to various Commission services. The Commission has ensured to avoid multiple 
reporting  and  duplication  of  efforts,  and  has  looked  for  where  data  for  land,  including  rail, 
and air transport was or would be available in the future. 

The  feasibility  assessment  therefore  focused  on  the  identification  of  potential  sources  of 
additional data for land, including rail, and air transport. In this context, the Commission will 
explore,  among  others,  the  possibility  of  re-using  ENS  data6  which  are  envisaged  to  be 
provided by the economic operators to the new Import Control System (ICS) 2 system. 

The  goal  of  the  ICS2  project  is  to  further  strengthen  the  safety  and  security  of  the  supply 
chain for all modes of transport by covering the entry of all goods into the Customs Union, 
improving  data  quality,  multi-filing,  data  availability  and  data  sharing  as  regards  the  entry 
summary declaration and related risk and control information. The project will  enable real-
time, systematic collaboration amongst Member States in the process of risk assessment. The 
ICS2  set-up  will  lead  to  a  complete  new  implementation  architecture  compared  to  the 
existing trans-European ICS system. 

The ICS2 project is currently in its inception phase and the implementation decision is still 
under  consideration  by  the  Commission  and  the  Member  States.  The  envisaged  operational 
and transition planning proposes to spread the implementation of the ICS2 system in time by 
means of three main releases. The implementation of the first release, pertaining to air postal 
and  express  pre-loading  is  scheduled  for  15  March  2021,  the  second  concerning  the 
completion  of  the  air  sector  is  set  for  1  March  2023  and  the  remaining  release,  regarding 
maritime, rail and road modes of transport is scheduled for 1 March 2024. Each release will 
be  self-contained,  provide  the  expected  business  added  value  and  allow  the  phase-out  the 
existing ICS system in a controlled way. 

It is important to note that currently the re-use of ICS2 data for the purposes as described in 
Article  18a  of  Regulation  515/97  is  not  factored  into  the  business  conditions,  the  legal 
assessment or the IT specifications of the ICS2 project. It is also important to recall that the 
ICS data is provided by economic operators to Member State Customs Authorities under the 
Union Customs Code, which governs the purpose, scope and conditions for sharing such data 
between  the  Member  States,  and  between  the  Member  States  and  the  Commission.  In  this 
context, it should be anticipated that the possibilities and conditions for re-use of data from a 
future  ICS2  system  is  to  be  assessed  with  the  Member  States  Customs  in  the  UCC 
governance  framework  in  the  first  instance  (Customs  Code  Committee/Customs  Expert 
Group, and if necessary the Customs Policy Group) before they would be considered in the 
context of a review of Regulation 515/97. 

6  The  data  contained  in  the  Entry  Summary  Declaration  (ENS)  are  defined  in  Article  127  of  Regulation 
952/2013, OJ L 269 of 10.10.2013, p. 1, and Article 183 of Commission Implementing Regulation 2015/2447, OJ 
L 343 of 29.12.2015, p. 558. 

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The  possibility  of  re-using  ENS  data  should  not  prevent  the  Commission  from  exploring 
other  options  if  there  are  indications  that  shortcomings  in  the  legal  framework  as  well  as 
ineffective  implementation  of  customs  controls  on  imports,  as  identified  by  the  European 
Court of Auditors7, persist. 

7  Special  Report  No  19/2017:  "Import  procedures:  shortcomings  in  the  legal  framework  and  an  ineffective 
implementation impact the financial interests of the EU". 

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