Study contributing to an impact assessment concerning a possible legislative proposal for an EU action programme for customs for the period post-2020 : final report.
Date: 2018-10-09
Institutions: Directorate-General for Taxation and Customs Union
Subjects: EU Member State, EU programme, action programme, customs, customs cooperation, customs formalities, customs regulations, customs union

Study contributing to an Impact Assessment 
concerning a possible legislative proposal for 
an EU action programme for Customs for the 
period post-2020 

Final Report 

Written by Deloitte 
March 2018 

 
 
 
 
 
 
EUROPEAN COMMISSION 

Directorate-General for Taxation and Customs union 

Directorate E — International and General Affairs 

Unit E.3 — Management of programmes & EU training 

E-mail:  taxud-unit-e3@ec.europa.eu  

European Commission 
B-1049 Brussels 

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LEGAL NOTICE 

The information and views set out in this report are those of the authors and do not necessarily reflect the 
official opinion of the Commission. The Commission does not guarantee the accuracy of the data included in this 
study. Neither the Commission nor any person acting on the Commission’s behalf may be held responsible for 
the use which may be made of the information contained therein. 

More information on the European Union is available on the Internet (http://www.europa.eu). 

Luxembourg: Publications Office of the European Union, 2018 

ISBN 978-92-79-86996-9 
doi: 10.2778/837209 

© European Union, 2018 

Reproduction is authorised provided the source is acknowledged. 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Table of Contents 

Executive summary .................................................................................................................... 8 

Problems and objectives ........................................................................................................ 8 

Policy options and their impacts ............................................................................................ 9 

Evaluation and comparison of the policy options ................................................................ 14 

Acronyms and Abbreviations ................................................................................................... 16 

1 

Introduction ...................................................................................................................... 21 

1.1  Purpose of the document ........................................................................................... 21 

1.2  Structure of the document ......................................................................................... 21 

2 

State of play of Customs 2020 ......................................................................................... 23 

2.1  Background and Funding ............................................................................................ 23 

2.2  The governance of the programme ............................................................................ 25 

2.3  Customs 2020 state of play ......................................................................................... 27 

3 

Problem assessment ........................................................................................................ 64 

3.1  General overview of the problem tree ....................................................................... 64 

3.2  Trends ......................................................................................................................... 66 

3.3  The Drivers ................................................................................................................ 112 

3.4  The problem .............................................................................................................. 150 

3.5  Effects ........................................................................................................................ 154 

4 

Policy objectives and building blocks ............................................................................. 164 

4.1  Policy objectives for the new Customs programme ................................................. 164 

4.2  Building blocks for policy options ............................................................................. 166 

5 

Policy options ................................................................................................................. 188 

5.1 

Introduction .............................................................................................................. 188 

5.2  Baseline ..................................................................................................................... 191 

5.3  Policy option 1 – Constrained scenario .................................................................... 202 

5.4  Policy option 2 – Continuity “plus” scenario ............................................................ 210 

5.5  Policy option 3 – Voluntary Structural Cooperation ................................................. 219 

5.6  Policy option 4: Integration....................................................................................... 234 

5.7  Overview of the policy options ................................................................................. 251 

5.8  Merging Fiscalis and Customs programmes ............................................................. 254 

6 

Impact assessment of the policy options ....................................................................... 257 

6.1  Overview of the approach ........................................................................................ 257 

3   

 
6.2  Social impacts ............................................................................................................ 258 

6.3  Environmental impacts ............................................................................................. 261 

6.4 

Impacts on fundamental rights ................................................................................. 263 

6.5  Economic impacts ..................................................................................................... 263 

6.6 

Impacts on simplification and administrative burden .............................................. 269 

6.7  Key findings from the impact assessment of the policy options .............................. 271 

7 

Evaluation ....................................................................................................................... 276 

7.1  Overview of the approach ........................................................................................ 276 

7.2  Coherence ................................................................................................................. 278 

7.3  Effectiveness ............................................................................................................. 283 

7.4  Efficiency ................................................................................................................... 292 

7.5  Feasibility .................................................................................................................. 300 

7.6  Relevance .................................................................................................................. 307 

7.7  EU added value ......................................................................................................... 308 

7.8  Proportionality .......................................................................................................... 316 

7.9  Comparison of the policy options ............................................................................. 320 

8 

Conclusions ..................................................................................................................... 325 

8.1  Relevant trends and problems .................................................................................. 325 

8.2  Objectives for administrative cooperation and capacity building in customs matters 
in the EU ............................................................................................................................. 328 

8.3  Policy options and related impacts ........................................................................... 330 

8.4  Evaluation and comparison of the policy options .................................................... 340 

8.5  Applicable elements from other policy options ....................................................... 344 

  References .......................................................................................................... 346 

  Case studies and fieldwork ................................................................................. 360 

Interviewee list - Fieldwork ................................................................................ 441 

Interviews list – Equipment ................................................................................ 443 

  UCC Electronic systems ...................................................................................... 444 

  Equipment note .................................................................................................. 451 

Table of Figures 

Figure 1 – Objective tree for the next Customs programme ..................................................... 9 

Figure 2 - Funding structure of Customs 2020 ......................................................................... 29 

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Figure 3 - Overview of activity type and number of participants 2016 ................................... 32 

Figure 4 - Projects related to UCC electronic system ............................................................... 38 

Figure 5 – Main building blocks of DG TAXUD IT Stacks .......................................................... 41 

Figure 6 - Projected CAPEX & OPEX for Customs IT capacity building ..................................... 51 

Figure 7 – Projected budgetary needs from a ‘Value Stack Perspective’ versus three potential 
budgetary scenarios ................................................................................................................. 54 

Figure 8 – Customs Competency Framework .......................................................................... 57 

Figure 9 – UCC e-Learning ........................................................................................................ 62 

Figure 10 - Problem tree .......................................................................................................... 65 

Figure 11 – Customs specific trends having an impact on customs administrations’ activities 
in the next 10 years .................................................................................................................. 66 

Figure 12 - Regulatory framework for customs policy ............................................................. 71 

Figure 13 - What are Digital Supply Networks (DSN)? ............................................................. 90 

Figure 14 - Physical to digital .................................................................................................... 91 

Figure 15 - World merchandise and trade in commercial services 2005 -2015 ...................... 96 

Figure 16 – Impact of challenges upon the success of the customs union as a whole ......... 113 

Figure 17 – Drivers perceived as creating a challenge on customs organisations in the coming 
10 years .................................................................................................................................. 114 

Figure 18 – EU Revenue from customs duties in 2015 in Euro million .................................. 118 

Figure 19 - EU Competency Framework for Customs ............................................................ 123 

Figure  20  –  Extent  to  which  Customs  2013  reduced  administrative  burdens  for  national 
administrations....................................................................................................................... 138 

Figure 21 – High-level overview of the Customs processes ................................................... 155 

Figure 22 – Extent to which the indirect effect have a negative impact on the functioning of 
the customs unions ................................................................................................................ 157 

Figure 23 – Importance of the effects for customs organisations in the coming 10 years ... 157 

Figure 24 - Objective tree ....................................................................................................... 165 

Figure  25  –  Visions  to  improve  capacity,  cooperate  better,  and  carry  out  effectively  and 
efficiently customs missions................................................................................................... 172 

Figure 26 - Introduction to the policy options ....................................................................... 190 

Figure 27 – Baseline ............................................................................................................... 193 

Figure 28 – Governance of the baseline ................................................................................ 198 

Figure  29  –  Estimated  budget  for  Customs  programme  under  the  baseline  option  (EUR 
million) .................................................................................................................................... 200 

Figure 30 – Policy option 1 ..................................................................................................... 203 

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Figure 31 – Governance of the policy option 1 ...................................................................... 207 

Figure  32  –  Estimated  budget  for  Customs programme  under  policy  option  1  (EUR million)
 ................................................................................................................................................ 208 

Figure 33 – Policy option 2 ..................................................................................................... 211 

Figure 34 – Governance of the policy option 2 ...................................................................... 215 

Figure  35  –  Estimated  budget  for  Customs programme  under  policy  option  2  (EUR million)
 ................................................................................................................................................ 216 

Figure 36 – Policy option 3 ..................................................................................................... 220 

Figure 37 – Governance of policy option 3 ............................................................................ 226 

Figure 38 – Estimated budget for Customs programme under policy option 3 (EUR million 229 

Figure 39 – Budgetary needs for awards under policy option 3 ............................................ 232 

Figure 40 – Policy option 4 ..................................................................................................... 235 

Figure 41 – Governance of policy option 4 ............................................................................ 242 

Figure  42  –  Estimated  budget  for  Customs programme  under  policy  option  4  (EUR million)
 ................................................................................................................................................ 244 

Figure 43 – Objective tree for the next Customs programme ............................................... 329 

Figure 44 – Introduction to the policy options ...................................................................... 331 

Table of Tables 

Table 1 – Assessment criteria and rating of the baseline scenario and the policy packages .. 14 

Table  2  -  Committed  expenses  per  year  and  main  action  categories  under  the  programme 
(thousand EUR) ......................................................................................................................... 29 

Table 3 – High-level planning of the projects in the 2017 revision of the MASP (endorsed by 
the Customs Project Group on 29 June 2017) ......................................................................... 46 

Table 4 – Projected CAPEX and OPEX for Customs IT capacity building (EUR millions per year)
 .................................................................................................................................................. 50 

Table 5 – Overview of the EU Action Plan for Customs and Taxation 2017-2020 ................... 56 

Table 6 - 2014-2018 Trainings under CLEP ............................................................................... 59 

Table 7 - Building Blocks ......................................................................................................... 168 

Table 8 - Toolbox .................................................................................................................... 176 

Table 9 – Tools and objectives ............................................................................................... 180 

Table 10 – Scope of collaboration and tools .......................................................................... 195 

Table 11 – Budgetary needs estimated for the baseline ....................................................... 200 

Table 12 – Overview of tools per type of collaboration scope under policy option 1 ........... 204 

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Table 13 – Budgetary needs estimated for policy option 1 ................................................... 208 

Table 14 – Scope and tools under policy option 2 ................................................................. 213 

Table 15: Budgetary needs estimated for policy option 1 ..................................................... 217 

Table 16 – Scope and tools under policy option 3 ................................................................. 223 

Table 17 – Scenarios for budgetary needs under policy option 3 ......................................... 228 

Table 18 – Budgetary needs for purpose-based projects in policy option 3 ......................... 231 

Table 19 – Scope and tools under policy option 4 ................................................................. 239 

Table 20 – Scenarios for budgetary needs under policy option 4 ......................................... 244 

Table 21 – Budgetary needs for the development of EIS national components in policy option 
4 .............................................................................................................................................. 247 

Table 22 – Budgetary needs for ‘sandboxes’ under policy option 4 ...................................... 249 

Table 23 – Budgetary needs for the overarching entity ........................................................ 251 

Table 24 – Summary of policy options and their variations .................................................. 252 

Table 25 – Criteria for the assessment of impacts of the policy options ............................... 257 

Table 26 – Expected social impacts of the Policy Options ..................................................... 260 

Table 27 – Expected environmental impacts of the Policy Options ...................................... 262 

Table 28 – Expected economic impacts of the Policy Options .............................................. 268 

Table  29  –  Expected  impacts  on  simplification  and  administrative  burden  of  the  Policy 
Options ................................................................................................................................... 270 

Table 30 – Criteria for evaluation of the policy options ........................................................ 276 

Table 31 – Expected impacts on coherence of the policy options......................................... 281 

Table 32 – Expected impacts on effectiveness of the policy options .................................... 290 

Table 33 – Expected impacts on efficiency of the policy options .......................................... 298 

Table 34 – Expected impacts on feasibility of the policy options .......................................... 306 

Table 35 – Expected EU added value of the policy options ................................................... 314 

Table 36 – Expected impacts on proportionality of the policy options ................................. 319 

Table 37 – Assessment criteria and rating of the baseline scenario and the policy packages
 ................................................................................................................................................ 320 

Table  38  -  Assessment  criteria  and  rating  of  the  baseline  scenario  and  the  policy  packages
 ................................................................................................................................................ 340 

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Executive summary 

This is the executive summary of the Final Report for the study “contributing to an Impact 
Assessment  concerning  a  possible  legislative  proposal  for  an  EU  action  programme  for 
Customs  for  the  period  post-2020”  carried  out  for  the  European  Commission,  Directorate 
General  Taxation  and  Custom  Union.  Starting  from  the  current  Customs  programme 
context, this study has first identified the global and Customs related trends that will occur 
in  the  coming  years  and  their  influences  on  the  Customs  administrations’  functioning.  On 
this basis, the study has identified objectives that the programme post 2020 should ideally 
target and a range of policy options that would support these objectives. The study has then 
assessed the potential impacts of the policy options on different dimensions and compared 
them  against  specific  evaluation  criteria.  Finally,  the  study  has  ranked  the  options  and 
concluded on the main elements that the future Customs programme should retain. 

Problems and objectives 

The  study  analysed  the  overall  framework  for  administrative  cooperation  in  Customs 
matters  in  the  European  context  and  its  likely  evolution  in  the  future.  The  results  of  this 
analysis  were  structured  around  the  problem  tree,  which  aims  to  identify  problems 
(including  their  drivers  and  effects),  in  which  respect  actions  can  be  taken  under  a  future 
Customs  programme.  The  following  drivers  are  identified  as  relevant  for  the  Customs 
programme:  unequal  capacity  of  customs  administrations  in  terms  of  IT  and  equipment, 
human  resources,  operational  processes),  uneven  interpretation  and  implementation  of 
legislation  (UCC  and  other)  by  customs  administrations  and  Geographical,  administrative, 
legal and strategic obstacles for cooperation.   

These  drivers  would  lead to the  main  problem for  Customs  administrations,  which  should 
be  addressed  by  the  future  Customs  programme,  which  is  their  insufficient  capacity  of 
customs administrations and insufficient cooperation of customs administrations within the 
customs union and with third countries, in order for customs administrations to be able to 
carry out effectively and efficiently their missions.  

The effects of this problem ultimately impact citizens, businesses, Customs administrations 
and  the  EU  itself.  The  fact  that  the  Customs  Union  has  not  reached  yet  its  full  potential 
(direct  effect)  would  put  at  risk  financial  interests  of  the  EU  and  budget.  It  would  also 
results  in  illicit  trade  and  fraud  in  customs  transactions,  illicit  trade  in  restricted  and 
prohibited goods, which affect the EU environment, security, safety and health, and create 
red  tape  and  more  burdensome  customs handling for  businesses  and  citizens,  limiting the 
full deployment of the EU Single Marked and the EU competitiveness (indirect effects). 

8 

 
 
 
Mirroring the problems, their drivers, and effects, the study has defined a set of objectives 
for  the  future  programme  around  an  objectives  tree.  They  set  out  the  goals  and  political 
priorities for action, and reflect the hierarchical structure of the problem tree. 

Figure 1 – Objective tree for the next Customs programme 

Source: Deloitte elaboration 

Policy options and their impacts 

In order to reach the identified objectives, the study has identified a range of policy options, 
impacts. 
embracing  different  visions  and  approaches,  and  having  different  overall 
Considering the specificities of the programme, the study has considered in particular social, 
environmental, economic impacts and impacts on simplification and administrative burden. 
The key elements and main impacts of the policy options are summarised below. 

No Customs 

In  such  Impact  Assessment  studies,  the  discontinuation  of  the  programme  needs  to  be 
taken into account. 

Key elements: 

  All  activities  of  the  programme  –  IT  systems  and  cooperation  activities  –  will  be 

stopped. 

Main expected impacts: 

The study was only able  to identify  negative social, economic, environmental impacts and 
compliance cost and administrative burden for businesses and citizens would be higher. 

Baseline Scenario 

The baseline scenario represents the situation as it is today and its known evolutions. It was 
used in the study as benchmark to compare the other policy options. 

Key elements: 

9 

 
 
 
  The situation as it is today, taking into account Brexit (i.e. budget cut of 15%); 
  A decrease of IT capacity building and cooperation;  
  Reactive instead of proactive approach ("keeping the lights on"). 

Main expected impacts: 

  Social  impacts:  it  would  undermine  the  full  implementation  of  the  IT  systems 
necessary to support the UCC and EU legislative initiatives on the customs domain, 
and  thus  the  effectiveness  and  efficiency  of  the  EU  and  of  Member  States  in  their 
implementation, increasing fragmentation. 

  Environmental impacts: it would be fairly limited. 
  Economic  impacts:  it  would  reduce  the  cost  of  the  programme  for  the  EU  budget, 
but  at  the  same  time  would  not  support  the  necessary  IT  tools  for  the  practical 
implementation of the UCC or future legislative provisions, with related increase of 
costs for Member States’ customs administrations. The weakened functioning of and 
co-functioning  of  customs  administrations  would  have  in  turn  negative  impacts  on 
the Single Market and on the competitive position of the EU. 

Policy Option 1 – Constrained scenario 

This policy option entails that the budget for the Customs post-2020 programme would be 
reduced (to the benefit of other policy areas) by 30%. 

Key elements: 

 
 

Impose scaling down the ambition of the programme thoroughly; 
IT  capacity  building  would  be  much  more  limited  after  2020  (no new  IT projects); 
only  the  continuation  of  the  UCC  2017  legacy  systems  would  be  possible,  other 
systems  development  and  operation  would  have  to  be  stopped  (which  would  also 
trigger  budgetary  side  effects,  such  as  a  write  off  of  investment  and  operational 
costs incurred under the Customs 2020 programme); 

  Only a limited budget would be available for cooperation, since the budget would – 
as  a  matter  of  priority  –  be  used  for  maintaining  as  far  as  possible  operational  IT 
systems. 

  Programme being put in “survival mode”.  

Main expected impacts: 

This option is characterised by an even larger budgetary reduction (-30% compared to the 
current programme) than the baseline scenario. Therefore, all the negative impacts describe 
for the baseline also apply to this policy option, and to a larger extent (but not as large as in 
the  case  of  discontinuation  of  the  programme).  Furthermore,  the  adverse  impacts  of  this 
option are likely to worsen in the future. 

Policy Option 2 – Continuity “Plus” 

The  vision  and  scope  of  the  current  programme  would  be  maintained,  as  is  also  the  case 
under  the  Baseline  (cf.  ‘Continuity’).  However,  in  addition,  this  policy  option  would  also 

10 

 
 
 
enable  the  programme  to  pursue  its  natural  evolution  to  more  effectively  address  the 
present and future challenges in the field of customs, including the implementation of new 
initiatives (cf. the ‘plus’ element).  

Key elements: 

  Continuation of the natural evolution of the programme; 
  Enhanced IT capacity building and cooperation in order to: 

  ensure that existing IT systems as  of 2020 can be maintained and that new IT 
(incl.  innovative)  projects  can  be  on-boarded  to  face  new  technologies  and 
trends (e.g. e-commerce, data analytics, blockchain); 

  allow  participating  countries  to  increase  their  operational  cooperation.  The 
experience  gained  through  the  expert  teams  under  the  current  Customs 
programme  would  give  way  to  an  increase  of  their  number  under  the  next 
programme  but  also  to  an  evolution  of  such  expert  teams  towards  a  more 
purpose-based approach. Groups of countries would be able to work together 
during  longer periods for  more  efficient  and  concrete  results.   Moreover,  the 
programme would further support cooperation with relevant non-EU countries 
and international organisations. 

 

Increase in budget, estimated at 136% (as compared to the current budget). 

Main expected impacts: 

Policy  option  2  maintains  and  reinforces  cooperation  activities  already  existing  under  the 
current  Customs  programme,  while  introducing  a  more  project  and  objective-oriented 
approach. 

  Customs administrations would react more quickly to evolution in criminal activities, 
overall  improving  the  EU  capability  to  fight  against  illicit  and  criminal  activities. 
Furthermore, the  largest  scope  for  administrative  capacity building  activities  would 
increase  customs  officials’  access  to  continuous  training  and  reduce  skill  gaps  that 
many  customs  administrations  are  currently  facing,  overall  having  positive  social 
impacts. 

  Limited positive  environmental  impacts as the development of IT systems for data 
exchange and online collaboration tools could compensate the possible increase of 
in-person meetings (linked to increased cooperation activities).  

  The  economic  impacts  of  the  policy  options  are  expected  to  be  positive  overall. 
While  requiring  more  resources  from  the  EU  budget  (+136%  compared  to  the 
current  programme),  this  policy  option  would  support  the  development  of  IT 
systems deemed necessary for the practical implementation of the UCC and all other 
necessary  systems  (e.g.  CRMS,  ICS2  and  international  projects)  and  for  supporting 
innovation, introduction of new common actions for customs administrations (such 
as joint operations) and more resources for cooperation. Overall, these activities are 
expected to generate efficiency and effectiveness gains, leading  to a more efficient 
and  effective  Customs  Union  in  the  medium  to  long  period,  supporting  the  fight 

11 

 
 
 
against  fraud  and  illicit  trace,  crime  and  terrorism,  and  in  turn  supporting  the 
financial interests and competitiveness of the EU as a whole. 

  Similarly,  the  increased  scope  for  administrative  cooperation  would  generate 
indirect positive impacts for businesses and citizens, as the solutions developed for 
more  effective  and  efficient  cooperation  among  customs  administrations  would  in 
turn reduce compliance costs and administrative burden. 

Policy Option 3 - Voluntary structural cooperation 

This policy option aims to reach an even higher level of cooperation than policy option 2, by 
allowing  and  supporting  voluntary  efforts  of  participants  in  this  field.  In  addition  to  the 
vision and activities under option 2, this option would mainly entail purpose-based projects 
initiated by certain participants, the creation of a vision group and an overarching steering 
group. 

Key elements: 

  Enhanced  operational  cooperation  would  evolve  toward  another  level:  groups  of 
countries that want to work more together would be able to proactively initiate and 
co-finance  longer  term  and  purpose-based  projects.  These  projects  would  be 
composed  of  different  activities towards  a  common  goal  of  the  countries  involved, 
but are also meant to have an added value for the EU as a whole. 

  Vision  group  would  allow  investigating  and  reflecting  on  future  trends  and 
challenges 
impacting  the  customs  sphere,  driving  new  ways  of  enhancing 
collaboration as well as the strategic direction of the programme. As such, the vision 
group may also lead to the initiation by countries of more purpose-based projects. 
  An  overarching  steering  group,  composed  of  representatives  of  the  Commission 
services  (DG  TAXUD)  and  participating  countries,  would  foster  common  strategic 
priorities for the programme as a whole, ensure that projects effectively lead to an 
added  value  for  the  EU  as  a  whole  and  bring  structure  to  the  management  of 
activities. 

  Budget increase of 151% (in comparison to the current budget), whereby additional 
budget would be required from those countries who want to contribute more.  

Main expected impacts: 

As policy option 3 builds on option 2, the same impacts already described for policy option 
2 apply, possibly to a greater extent.  

  The social impacts on the EU capability to fight against crime and terrorism and to 
increase  customs  officials’  access  to  continuous  training  and  improve  customs 
officials’  skills  would  be  reinforced  by  the  largest  budgetary  provisions  for  such 
activities  and  by  the  emphasis  on  knowledge  management  and  enhanced 
cooperation. In addition, the introduction of the vision group and the Steering Group 
would  affect  the  governance  of  the  programme,  providing  to  Member  States’ 
customs  administrations  a  wider  role  in  steering  the  activities.  The  vision  group  in 
particular  would  place  more  emphasis  on  innovation  and  strategic  thinking, 
providing the conditions for customs administration to start to innovate together.  

12 

 
 
 
  Environmental impacts would likely be very similar to policy option 2.  
  The  economic  impacts  of  the  policy  option  are  expected  to  be  positive  overall.  In 
addition to policy option 2, this option provides the framework for further cohesion 
among  customs  administrations  in  defining  the  direction  for  the  programme 
(through  the  vision  group  for  innovation  and  strategic  thinking)  and  in  the 
management of its activities (through the Steering Group). 

  The increased scope for administrative cooperation would generate indirect positive 
impacts  for  businesses  and  citizens,  as  the  solutions  developed  for  more  effective 
and  efficient  cooperation  among  customs  administrations  would  in  turn  reduce 
compliance costs and administrative burden, to a larger scale than in policy option 
2. 

Policy Option 4 - Integration 

level  by  supporting  further 
This  policy  option  brings  the  cooperation  to  another 
centralisation  of  the  activities  compared  to  policy  option  3  that  supports  rather  individual 
initiatives.  The  principle  governing  option  4  is  the  idea  of  working  more  together,  while 
respecting  the  subsidiarity  principle.  Participants  would  reach  a  common  ground  for 
operational  cooperation,  from  which  they  are  willing  to  govern  proactively  further 
initiatives.  

Key elements: 

  Same  elements  as  in  policy  option  3  without  the  possibility  for  participating 
countries  to  co-finance  purpose-based  projects  (which  goes  somehow  against  the 
principle of integration and unity of this option 4); 

  Creation of a centralised formal entity (i.e. an EU Customs Administration) linked to 
DG  TAXUD  to  take  over  the  tasks  of  the  overarching  steering  group  (defined  in 
option 3). This EU-level centralised formal entity would include: 

  Various  departments,  such  as  the  IT  department  and  the  Customs  Academy 
dealing with human competencies development, which would take over from 
the  national  customs  administrations  following  the  principle  of  “doing 
together”.  The  EU  customs  administration  would  also  be  in  charge  of  the 
management  of  activities,  such  as  joint  operations.  In  other  words,  those 
departments  would  draft  proposals  for  activities  they  want  to  pursue,  and 
would  be  responsible  for  the  development  and  implementation  of  such 
activities if funding is awarded. 

  A specific department within the EU Customs Administration, which would deal 

with the daily tasks involved in the running of the programme.  

  budget increase, estimated at 305% (as opposed to the current budget).  

Main expected impacts: 

Policy option 4 includes and reinforces many of the elements of policy option 3, adding an 
EU  Customs  Administration.  Therefore,  the  same  impacts  already  described  for  policy 
option 3 apply, possibly to a greater extent:  

13 

 
 
 
  Social  impacts  would  be  positive.  The  programme  will  continue  to  support  the 
implementation  of  the  customs  policy  as  in  the  other  policy  options,  with  a  much 
stronger emphasis on shared processes and procedures, and consistency of customs 
operations  throughout.  Therefore,  the  effects  on  the  EU  capability  to  fight  against 
crime and terrorism and to increase customs officials’ access to continuous training 
and improved skill levels across the EU would be further reinforced.  

  Environmental impacts would likely be very similar to policy options 2 and 3.  
  Following the same reasoning as for option 3, the  economic  impacts of this option 
are expected to be positive overall. This policy option presents the largest increase in 
EU  budget  for  the  programme  (+375%  with  respect  to  the  current  programme), 
which  is  expected  to  generate  the  largest  gains  in  efficiency  and  effectiveness  for 
customs  administrations  in  the  long  term.  In  addition,  centralising  at  EU  level  the 
development of the national components of the EIS and the implementation of the 
Customs academy are expected to generate economies of scale and learning curve 
effect while reducing the costs for Member States. The major change in governance 
and organisational structure foreseen with the creation of the EU Customs academy 
is expected to increase efficiency and effectiveness over time, even if it would likely 
require  major  organisational  change  for  national  customs  administrations,  which  is 
likely to absorb some human and financial resources.   

  Likewise,  and  even  more  than  in  policy  option  3,  the  increased  scope  for 
administrative  cooperation  would  generate  indirect  positive  impacts  for businesses 
and citizens, as it would in turn reduce compliance costs and administrative burden. 

Evaluation and comparison of the policy options 

The  study has  assessed  and  compared  the  policy  options  with  a  set  of  evaluation  criteria. 
The  aim  of  this  assessment  is  to  identify  whether  one  or  more  policy  options  stand  out 
above  the  others,  in  order  to  support  policymakers’  decisions.  The  consultation  of  a  wide 
range of stakeholders has provided inputs for the assessment and rating per criterion. 

The  table  below  provides  the  scores  allocated  to  the  different  options  concerning  the 
different  assessment  criteria.  A  negative  rating  for  the  policy  option  does  not  entail  a 
negative evaluation of the policy option altogether, but simply defines a worse outcome (for 
the programming period of post-2020 Customs) than what the current Customs programme 
provides. The same applies for the positive overall ratings. A weighting system was applied 
to the scores, giving more influence to the evaluation criteria of effectiveness, efficiency, EU 
added value and proportionality.  

Table 1 – Assessment criteria and rating of the baseline scenario and the policy packages 

Policy options   Weighting 

No 
Customs 

Baseline 

Constrained  

Continuity 
plus  

Voluntary 
Structural 
Cooperation 

Integration 

Coherence  

Effectiveness 

Efficiency  

10 

20 

20 

-3 

-3 

-3 

-2 

-2 

-2 

-2.5 

-2.5 

-2.5 

1.5 

1.5 

2 

2 

2 

1.5 

2.5 

2.5 

2 

14 

 
 
 
Feasibility  

EU added value 

Proportionality 

Overall scoring 

10 

20 

20 

Source: Deloitte 

-3 

-3 

-3 

-2 

-2 

-1 

-2.5 

-2.5 

-2 

-1 

1.5 

2 

-3.00 

-1.80 

-2.40 

1.45 

-1.5 

2 

-1 

0.95 

-2 

3 

-1.5 

1.25 

Based on the results summarised in the above table, two policy options stand out: the no EU 
intervention, and the continuity plus (policy option 2).  

The  discontinuation  of  the  programme  is  considered  the  weakest  in  every  criterion 
compared to the current situation. 

The overall rating of continuity plus allows it to positively stand out in respect to the rest of 
policy options with a score of 1.45. In addition to allow pursuing the same level of activities 
as  the  current  programme,  this  option  would  strengthen  the  enhanced  operational 
cooperation  leading  to  more  results  and  smoother  collaboration  than  in  the  current 
scenario,  improving  effectiveness.  The  ‘plus’  element  of  this  policy  option  generates  high 
returns  with  a  relatively  low  investment  (compared  to  the  policy  options  3  and  4  in 
particular  that  are  less  proportionate).  As  such,  policy  option  2  is  considered  the  most 
efficient.  Overall,  this  option  is  the  most  feasible  compared  to  the  alternatives  (although 
slightly  less  than  the  baseline).  While  the  Continuity  “Plus”  scenario  does  not  provide  the 
same  level  of  increase  and  improvement  of  administrative  cooperation  as  policy  option  4 
(Integration), it provides enough support to implement EU  legislation at different levels. It 
gives  the  possibility  to  work  on  the  coherence  and  complementary  between  EU  and 
international customs initiatives, increasing the EU added value with respect to the current 
situation.  This leads to increased EU added value compared to the current situation. 

15 

 
 
 
 
  
Acronyms and Abbreviations 

The following table provides an overview of the abbreviations and acronyms that are used 
in the context of the assignment. 

Acronym/ 
Abbreviation 

Term 

AEO 

AEOC 

AEOS 

AES 

AFA 

AI 

Art. 

Authorised Economic Operator 

Authorised Economic Operator for Customs simplification 

Authorised Economic Operator for Security and safety 

Automated Export System 

Application for Action 

Artificial Intelligence 

Article 

ASEAN 

Association of Southeast Asian Nations 

ATA 

AWP 

BCP 

Temporary Admission 

Annual Work Programme 

Border Crossing Point 

BPM L4 

Business Process Model Level 4 

BTI 

B2B 

B2C 

B2G 

Binding Tariff Information  

Business-to-Business 

Business-to-Consumer 

Business to government 

CAPEX 

Capital Expenditure 

CBC  

CCC 

CCI 

CCF 

CCN/CSI 

CFW 

CELBET 

Cross-Border Co-operation  

Community Customs Code 

Centralised Clearance for Import 

WCO Customs Cooperation Fund 

Common Communications Network - Common Systems Interface 

Competency Framework 

Customs Eastern Land Border Expert Team 

16 

 
 
 
Acronym/ 
Abbreviation 

Term 

CEPOL 

CET 

CETA 

CRMS 

CRMS2 

C2C 

DDA 

DG 

European Union Agency for Law Enforcement Training 

Common External Tariff 

EU-Canada Comprehensive Economic and Trade Agreement 

Customs Risk Management System 

Upgrade of Customs Risk Management System 

Consumer to consumer 

Doha Development Agenda 

Directorate General 

DG DIGIT 

Directorate General for Informatics 

DG HOME 

Directorate General for Migration and Home Affairs 

DG TAXUD 

Directorate General for Taxation and the Customs Union 

DSN 

EASME 

EBF 

EESC 

EFTA 

EiDR 

EIS 

Digital Supply Network 

Executive Agency for Small and Medium Enterprises 

External Borders Fund 

European Economic and Social Committee 

European Free Trade Association 

Entry in the declarants records 

European Information System 

ENISA 

European Union Agency for Network and Information Security 

ENP 

ENS 

EOS 

ERA 

ESIF 

ESF 

EU 

European Neighbourhood Policy countries 

Entry Summary Declaration 

Economic Operator Systems 

European Research Agency 

European Structural and Investment Funds 

European Structural Fund 

European Union 

EUROPOL 

European Union Agency for Law Enforcement Cooperation 

eu-LISA 

European  Agency  for  the  operational  management  of  large-scale  IT 
Systems 

FRONTEX 

European Border and Coast Guard Agency 

FTA 

Free Trade Agreement 

17 

 
 
 
Acronym/ 
Abbreviation 

Term 

GATT 

GDP 

GNI 

GUM 

G7 

G20 

HCB 

HLPG 

ICS  

ICS2 

ICT 

General Agreement on Tariffs and Trade 

Gross Domestic Product 

Gross National Income 

Guarantee Management Systems 

Group of Seven countries 

International forum for the governments and central bank governors 

Human Competency Building 

High Level Project Group 

Import Control System 

Import Control System Upgrade 

Information and Communication Technologies 

INTERPOL 

International Criminal Police Organisation 

IoT 

IPA 

IPR 

IT 

KPI 

LPI 

Internet of Things 

Instrument for Pre-Accession Assistance 

Intellectual Property Rights 

Information Technology 

Key Performance Indicator 

World Bank Logistics Performance Index 

MASP  

Multi-Annual Strategic Plan 

MCC 

MFF 

MRA 

Modernized Customs Code 

Multiannual Financial Framework 

Mutual Recognition Agreement 

NAFTA 

North American Free Trade Agreement 

NCTF 

NCTS 

NGO 

OECD 

OLAF 

OPEX 

PCG 

EU National Committee on Trade Facilitation 

New Computerised Transit System 

Non-Governmental Organisation 

Organisation for Economic Co-operation and Development 

European Anti-Fraud Office 

Operational Expenditure 

Programme Coordination Group 

18 

 
 
 
Acronym/ 
Abbreviation 

Term 

PO 

PoUS 

PPP 

QUOTA 

REACH 

RMSAP 

RTA 

SACC 

SAFE 

SMEs 

SOP 

SPS 

STI 

TARIC 

TBT 

TEU 

TES 

TFA 

TFEU 

TOR 

TPP 

TTIP 

UCC 

UCC WP 

UNESCO 

UNFCCC 

UK 

UN 

US 

VAT 

Policy Option 

Proof of Union Status 

Public Private Partnership 

Tariff Quota Consultation Database 

Registration, Evaluation, Authorisation and Restriction of Chemicals 

EU Risk Management Strategy and Action Plan  

Regional Trade Agreements 

Strategy on Adaptation to Climate Change 

WCO Standards to Secure and Facilitate Global Trade 

Small and Medium-sized Enterprises 

Standardized Operating Procedures 

Sanitary and Phytosanitary measures 

Shared Trader Interface 

Integrated Tariff of the European Union 

Technical Barriers to Trade 

Treaty of the European Union 

Trans-European Systems 

Trade Facilitation Agreement 

Treaty for the Functioning of the European Union 

EU Traditional Own Resources 

Trans-Pacific Partnership 

Transatlantic Trade and Investment Partnership 

Union Customs Code 

Union Customs Code Work Programme 

United Nations Organisation for Education, Science and Culture 

United Nations Framework Convention on Climate Change 

United Kingdom 

United Nations 

United States 

Value-Added Tax 

19 

 
 
 
Acronym/ 
Abbreviation 

Term 

WCO 

WEEE 

WTO 

World Customs Organisation 

Waste Electrical and Electronic Equipment 

World Trade Organisation 

20 

 
 
 
 
1  Introduction 

1.1 Purpose of the document 

This  is  the  Final  Report  for  the  study  “contributing  to  an  Impact  Assessment  concerning  a 
possible legislative proposal for an EU action programme for Customs for the period post-
2020” carried out for the European Commission, Directorate General Taxation and Custom 
Union (DG TAXUD).  

This  report  presents Deloitte’s  understanding  of  the  context  (state  of  play  of the  Customs 
2020  programme),  the  refined  problem  assessment,  the  policy  objectives,  building  blocks 
for policy options, the policy options, the assessment of their impacts, and a comparison of 
the policy options. In addition, an annex on equipment has been added.  

1.2 Structure of the document  

The document is structured as follows:  

  Chapter 2 illustrates the overview and state of play of the Customs 2020 programme 
(as-is situation), detailing the specific achievements, trends and results for each type 
of funded actions. 

  Chapter 3 provides an improved overview of which will be the future challenges and 
trends impacting the customs administrations in the future and therefore which are 
the customs administrations needs to take into account for future policy actions. 
  Chapter  4  describes  the  policy  objectives  identified  for  the  new  generation  of  the 
Customs programme, and describes the building blocks identified to build the policy 
options and baseline.   

  Chapter 5 presents the policy options developed based on the building blocks; 
  Chapter 6 presents the assessment of the impacts of the policy options identified; 
  Chapter  7  provides  the  evaluation  of  the  policy  options  and  gives  a  comparison  of 

the policy options; 

  Chapter 8 presents the conclusions of the study. 

In addition, the document includes the following annexes:  

  Annex A: includes the list of references; 
  Annex  B:  includes  the  case  studies  developed  based  on  the  information  collected 

during the fieldwork; 

  Annex C: provides the list of interviewees; 
  Annex D: presents the list of interviewees for the equipment assessment; 
  Annex E: description of the UCC Electronic Systems; 

21 

 
 
 
  Annex F: equipment note. 

22 

 
 
 
2 State of play of Customs 2020 

This  chapter  provides  an  overview  of  the  context  which  this  assignment  falls  within, 
including  the  current  set-up  of  the  Customs  2020  programme,  its  main  features  and 
current trends. 

2.1 Background and Funding 

The  European  Union’s  customs  union  is  based  on  the  free  movement  of  goods  and  a 
common external tariff towards third countries. This policy originated in 1968 when the six 
Founder  Member  States1 agreed  on  the  completion  of  a  customs  union.  Since  then,  the 
customs unions has pushed forward and so did the relevant legislation. 

The customs union is an exclusive competence of the European Union (EU), implying that it 
is the only body entitled to legislate and to adopt binding acts in these fields (as opposed to 
national  governments).  In  terms  of  implementation,  the  customs  union  is  managed  by 
national customs services of Member States acting if they were “one”.2 Therefore, “national 
customs  officials  work  together  with  colleagues  from  across  the  EU,  from  Portugal  in  the 
south-west to Estonia in the north-east” to carry out their daily tasks.  

The EU has adopted several programmes3 aimed to support customs administrations in the 
implementation of the European custom policy and its legal provisions. Regulation (EU) No 
1294/2013 of the European Parliament and of the Council of 11 December 2013 establishes 
the  Customs  2020  programme4,  the  current  cooperation  programme  covering  the  period 
from 1 January 2014 to 31 December 2020. With regards to the legal basis of the Customs 
2020  programme,  it  is  based  on  article  (Art.)  33  of  the  Treaty  of  the  Functioning  of  the 
European  Union  (TFEU),  which  relate  to  “measures  in  order  to  strengthen  customs 
cooperation  between  Member  States  and  between  the 
latter  and  the  European 
Commission”.5  

1 Belgium, France, Germany, Italy, Luxembourg and the Netherlands. 

2 European Commission, The EU Customs Union: protecting people and facilitating trade, The European Union 
explained, 2014, https://www.eesc.europa.eu/sites/default/files/resources/docs/customs_en-1.pdf  

3 Matthaeus  programme  (a  training  and  exchange  programme  for  customs  officials  established  in  1991  and 
running until 1995), Customs 2000 (1996 – 2000), Customs 2002 (2000 – 2002), Customs 2007 (2003 – 2007), 
and Customs 2013 (2008 – 2013). 

4 Regulation  (EU)  No  1294/2013  of  the  European  Parliament  and  of  the  Council  of  11  December  2013 
establishing  an  action  programme  for  customs  in  the  European  Union  for  the  period  2014-2020  (Customs 
2020), http://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:32013R1294&from=EN 

5 Regulation (EU) No 1294/2013. 

23 

 
 
 
                                                      
Considering  the  growing  importance  of  customs  administrations  in  border  management 
activities and the (increased) focus on safeguarding security, the legal basis of Regulation No 
1294/2013  –  only  referring  to  cooperation  in  customs  matters  –  may  restrain  the  (future) 
eligibility  for  action.  Art.  87  TFEU  for  instance  stipulates  that  the  EU  shall  establish  police 
cooperation  involving  all  the Member  States’  competent  authorities,  including  customs, in 
relation  to  the  prevention,  detection  and  investigation  of  criminal  offences.  This  provision 
serves  inter  alia  as  a  legal  basis  for  a  number  of  Regulations  providing  for  financing  of 
activities  in  the  field  of  border  security  and  management  (external  border  protection). 
Regulation No 515/2014 on the establishment of financial support for external borders and 
visa6 refers  explicitly  to  the  set-up  of  an  integrated  management  system  for  external 
borders,  in  particular  by  means  of  inter-agency  cooperation  between  border  guards, 
customs,  migration,  asylum  and  law  enforcement  authorities  of  Member  States  at  the 
external  borders.  Customs  administrations  and  the  control  of  goods  are  otherwise  left 
outside the scope of these Regulations, supervised by Directorate General for Migration and 
Home Affairs (DG HOME).  

Art. 325 TFEU on the other hand addresses the fight against fraud and stipulates that “the 
Member  States  shall  coordinate  their  action  aimed  at  protecting  the  financial  interests  of 
the  Union  against  fraud.  To  this  end  they  shall  organise,  together  with  the  European 
Commission,  close  and  regular  cooperation  between  the  competent  authorities”.7 This 
article constitutes the basis for the activities carried out by the European Anti-Fraud Office 
(OLAF) in the domain, including the actions funded under the Hercule III programme.8  

Therefore,  the  reliance  of  the  Customs  2020  programme  on  Art.  33  of  the  TFEU  only 
currently excludes from its scope a number of activities (involving customs) which are now 
covered  under  other  programmes  (e.g.  Hercule  III  managed  by  OLAF  or  the  security  fund 
managed by DG HOME).  

Besides  the  28  Member  States,  all  candidates  and  potential  candidate  countries  are  full 
members of the programme.9  

The  Customs  2020  programme  is  funded  under  the  Multiannual  Financial  Framework 
(MFF).  The  MFF,  is  a  seven-year  framework  regulating  the  annual  budget  of  the  EU.  The 

6 Regulation (EU) No 515/2014 of the European Parliament and of the Council of 16 April 2014 establishing, as 
part  of  the  Internal  Security  Fund,  the  instrument  for  financial  support  for  external  borders  and  visa  and 
repealing 
http://eur-lex.europa.eu/legal-
content/EN/TXT/?uri=celex%3A32014R0515  

574/2007/EC, 

Decision 

No 

7 Consolidated  version  of  the  Treaty  on  the  functioning  of  the  European  Union  (TFEU),  2012,  http://eur-
lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:12012E/TXT&from=FR  

8 Regulation (EU) No 250/2014 of the European Parliament and of the Council of 26 February 2014 establishing 
a  programme  to  promote  activities  in  the  field  of  the  protection  of  the  financial  interests  of  the  European 
Union  (Hercule  III  programme)  and  repealing  Decision  No  804/2004/EC,  http://eur-lex.europa.eu/legal-
content/EN/TXT/PDF/?uri=CELEX:32014R0250&from=EN  

9 Those  countries  are  Albania,  Bosnia  and  Herzegovina,  the  Former  Yugoslav  Republic  of  Macedonia, 
Montenegro, Serbia, and Turkey. 

24 

 
 
 
                                                      
framework  sets  the  maximum  amount  of  the  annual  expenditure  for  broad  policy  areas 
("headings”). The framework sets “ceilings” (i.e. annual maximum amounts) for two types of 
EU  expenditure:  commitment  appropriations10 and  payment  appropriations.11 The  current 
MFF,  covering  from  2014  to  2020,  set  a  limit  of  EUR  960  billion  for  commitment 
appropriations  and  EUR  908  billion  for  payment  appropriations.  The  Customs  2020 
programme is funded under the MFF under the policy heading “Customs, Taxation and Fight 
against Fraud”. The current framework underwent a mid-term evaluation in 2016 and it has 
been  declared  by  the  European  Commission  that  the  budget  “shall  orient  further  towards 
jobs,  growth  and  competitiveness”.12 The  detailed  orientation  of  the  MFF  after  2020  is 
currently  under  discussion  and  the  result  of  this  exercise  is  not  yet  available.  It  is 
noteworthy that third participating countries participate on a voluntary basis, and that their 
participation is subject to budgetary contribution. 

2.2  The governance of the programme 

2.2.1 Management 

The  European  Commission  has  to  ensure  the  programme’s  daily  management  and  adopts 
the  necessary  measures  for  the  implementation  of  the  programme  (i.e.  these  adopted 
measures  are  called  “implementing  measures”). The  Council  and the  European  Parliament 
have  indeed  conferred  this  implementation  power  to  the  European  Commission  through 
Art. 15 of the Customs Regulation. According to  Art. 16 of the Regulation, when exercising 
its  implementing  powers,  the  European  Commission  is  assisted  by  the  Customs  2020 
Committee,  which  is  a  “comitology  committee”13,  composed  of  delegates  from  each 
Member State. 

As described above, the implementation of the programme is under direct management of 
the European Commission, meaning that it is centrally managed by  DG TAXUD. Within DG 
TAXUD, the daily management of the Customs 2020 programme is ensured by the European 
Commission Programme Management Team. This body is the focal point of the programme 
organisation, and as such, acts as central coordinator of the programme.  

10 Commitment  appropriations  refer  to  the  “total  cost  of  legal  obligations  -  contracts,  grant  agreements  or 
decisions 
the  MFF”, 
http://www.consilium.europa.eu/en/policies/multiannual-financial-framework/   

the  EU  could  sign 

is  covered  by 

financial  year 

in  each 

that 

that 

- 

that 

11 Payment appropriations refer to “expenditure that is spent in a given year of the MFF” arising “from legal 
commitments 
in  earlier  years”, 
http://www.consilium.europa.eu/en/policies/multiannual-financial-framework/ 
12 J.C.  Juncker,  “A  new  start  for  Europe”,  https://ec.europa.eu/commission/sites/beta-political/files/juncker-
political-guidelines-speech_en.pdf  

that  same  year  and/or 

the  EU  entered 

into  either 

in 

13 Regulation  (EU)  No  182/2011  of  the  European  Parliament  and  of  the  Council  of  16  February  2011  laying 
down the rules and general principles concerning mechanisms for control by Member States of the European 
http://eur-lex.europa.eu/legal-
Commission’s 
content/EN/TXT/PDF/?uri=CELEX:32011R0182&from=EN 

implementing 

exercise 

powers, 

of 

25 

 
 
 
                                                      
The  Programme  Coordination  Group  (PCG)  is  an  internal  group  within  DG  TAXUD  bringing 
advice and support in the implementation of the programme in all its phases:  

  Programming:  they  assist  the  drafting  of  the  Annual  Work  Programme  (AWP),  and 
endorse the final draft before being shared at the DG TAXUD Management Meeting 
and with the programme Committees for approval; 
Implementation: they advise the proposals for specific activities; 

 
  Performance  measurement:  they  assist  and  provide  input  for  the  programmes’ 

progress monitoring and evaluation.   

This group is composed by all DG TAXUD Heads of Unit, and is chaired by the Head of Unit of 
the Programmes Management Unit. 

DG TAXUD Management Meeting takes place between Director-General and Directors of DG 
TAXUD.  DG  TAXUD  Management  Meeting  takes  decisions  and  orientations  relating  to  the 
functioning  of  the  programme,  such  as  identifying  the  policy  priorities  of  the  AWP14 and 
validating  the  draft  of  the  AWP  before  its  submission  to  the  other  European  Commission 
departments and to the Programme Committee. 

At national level, the national programme coordinators of the participating countries are in 
charge  of  the  coordination  of  the  programme,  as  well  as  its  implementation  in  their 
administration. They are usually supported by other members of their own administration in 
order  to  implement  their  tasks  (e.g.  event  organisation,  working  visits).  These  groups  of 
people constitute the national programme management team. 

During  the  period  of  the  Customs  2020  programme,  a  notable  development  in  the 
governance  of  the  programme  and  in  the  design  of  its  activities  is  towards  increased 
enhanced  cooperation  mechanisms,  whereby  DG  TAXUD  and  Member  States  share 
governance  responsibilities  towards  a  more  de-centralised  management  of  structured 
activities  and  monitoring  of  outputs  (limited  to  expert  group).  The  Customs  Eastern  Land 
Border  Expert  Team  (CELBET)  Expert  Team,  referred  to  further  in  this  study  is  a  good 
example of this enhanced cooperation. 

2.2.2 Implementation 

As  previously  explained,  a  comitology  committee  functioning  in  accordance  with  the 
examination procedure15 has been set up in order to assist the European Commission in the 
implementation of the programme. The basic act of the Customs 2020 programme (i.e. the 
Regulation)  provides  for  that  the  European  Commission  takes  into  account  the  opinion  of 
the committee for the adoption of the AWP. 

The AWP establishes the following dimensions of the programme: 

14 European Commission, Customs 2020 programme Implementation Guidance. 

15 Art. 5 of Regulation (EU) No 182/2011. 

26 

 
 
 
                                                      
  The actions; 
  A breakdown of the budget per type of action; 
  The co-financing rate for grants. 

After  the  DG  TAXUD  internal  approval  of  the  AWP  (i.e.  endorsement  by  the  Programme 
Coordination  Group,  validation  by  the  DG  TAXUD  Management  Meeting,  and  approval  by 
the  Programme  Committee),  the  document  is  shared  with  the  European  Commission 
(College) for its final adoption.   

Moreover,  in  more  practical  terms,  DG  TAXUD  examines  the  proposals  from  participating 
countries to carry out activities, accepts of the proposals finally selected, and monitors the 
activities. 

Finally,  the  participating  countries  (i.e.  EU  Member  States,  candidate  and  potential 
candidate  countries  and  EU  neighbourhood  policy  countries)  are  in  charge  of  the 
management of the activities they lead.   

Nevertheless, a number of activities are managed and supervised by DG TAXUD; we would 
like to differentiate them by referring to them as “programme operational activities”. These 
are studies, definition, deployment, operation and maintenance of Information Technology 
(IT)  systems,  and  communication  projects.  These  activities  are  developed  under  the 
programme  for  the  functioning  of  the  programme,  but  are  not  led  by  the  participating 
countries, although they could find themselves partaking in them.  

2.3  Customs 2020 state of play 

With a total budget of EUR 547.3 million, the Customs 2020 programme general objective is 
to  support  the  functioning  and  modernisation  of  the  customs  union  in  order  to  strengthen 
the Internal Market by means of co-operation between participating countries, their customs 
administrations and their officials and therefore to help tackling the challenges that customs 
administrations  are  currently  facing.    With  reference  to  the  long-term  agenda  of  the 
European  Commission,  the  Customs  2020  programme  intends  to  contribute  to  the 
realisation  of  the  Europe  2020  Strategy  for  smart,  sustainable  and  inclusive  growth  by 
strengthening the functioning of the Internal Market.16  

Under the current programme, there are four specific objectives identified:  

  Support customs administrations in protecting the financial and economic interests 
of  the  Union  and  of  the  Member  States,  including  the  fight  against  fraud  and  the 
protection of intellectual property rights; 

  Increase safety and security, protect citizens and the environment; 

16  European  Commission,  A  European  strategy  for  smart,  sustainable  and 
http://ec.europa.eu/eu2020/pdf/COMPLET%20EN%20BARROSO%20%20%20007%20-
%20Europe%202020%20-%20EN%20version.pdf 

inclusive  growth,  2010, 

27 

 
 
 
                                                      
  Improve the administrative capacity of the customs administrations; and 
  Strengthen the competitiveness of European businesses. 

In  the  European  Commission  Implementing  Decision  (2017)17,  it  is  confirmed  that  the 
Customs 2020 programme acknowledges the dual (or even 3-fold) nature of the challenges 
faced  by  customs  administrations:  ensuring  the  smooth  flow  of  trade,  whilst  applying 
necessary controls to protect security, health and safety of the Union's citizens, as well as 
the  security  and  the  financial  and  economic  interest  of  the  Union.  Indeed,  based  on  a 
previous  assessment  of  the  customs  administrations’  needs  and  trends,  several  attention 
points emerged and in particular: 

  “Pressure  on  customs  administrations  to  process  growing  volumes  of  trade,  and 

difficulty to apply measures to balance facilitation and control; 

  Gap  in  skills,  competencies,  resources  as  well  as  experience  and  best  working 

practices; 

  Incoherent  and  inefficient  application  of  EU  policies  in  the  context  of  safety  and 

security; 

  Shortcomings  in  the  uniform  implementation  of  EU  law  by  the  EU  customs 

administrations; 

  Difficulties in uniform implementation of interconnected IT systems; 
  Heavy  and  increasingly unsustainable burden  for  some  EU  customs  administrations 

to implement policies in the interest of the union”.18 

In  terms  of  programme  management,  and  reflecting  the  main  problems  identified,  the 
Customs 2020 programme is currently organised in the following sections (with respective 
sub-sections):  

  Functioning and Modernisation of the customs union 
  Financial and economic interest of the EU and Member States 
  Protection  of  the  citizens,  the  environment, 

increasing  safety  and  security, 

strengthening competitiveness 

  Administrative capacity of customs administrations 

It is also worth mentioning here that the adoption of the Union Customs Code (UCC) in 2013 
also added a very important aspect to the Customs 2020 programme as the adoption came 
after the programming period started and redefined priorities and expectations vis-à-vis the 
customs programme itself. Three main types of actions are eligible under the programme:  

 

Joint  actions  (such  as  seminars  and  workshops,  working  visits,  project  groups, 
working visits, monitoring activities, expert teams).  

17 European  Commission  Implementing  Decision  (EU)  of  17.2.2017  concerning  the  adoption  of  Annual  Work 
Programmes  for  2017  for  the  Customs  2020  and  Fiscalis  2020  programmes  and  on  the  financing  of  the 
programmes for expenditure to be committed by DG TAXUD from the 2017 budget lines 140201 and 140301, 
https://ec.europa.eu/taxation_customs/sites/taxation/files/financing_decision_2017_customs_fiscalis.pdf  

18 See “Customs 2020 programme – Progress Report 2016”. 

28 

 
 
 
                                                      
 

Information  Systems  (EIS)  facilitate  the 
IT  capacity  building:  the  European 
information  exchange  and  access  to  common  data  among  the  customs 
administrations  of  the  EU  Member  States,  as  well  as  with  a  number  of  third 
countries (e.g. candidate countries, Norway, Switzerland, as well as Russia for NCTS-
TIR).  

  Human  Competency  Building  (HCB):  common  training  activities  to  support  the 

necessary professional skills and knowledge relating to Customs.  

The picture below shows the spending categories under which each  of these eligible types 
of actions. 

Figure 2 - Funding structure of Customs 2020 

Source: Deloitte based on the European Commission input19 

The  largest  amount  of  the  Customs  2020  programme  budget  (up  to  90.4%  in  2015, 
according the data in the table below) is spent on IT capacity building through procurement.  
The  actions  falling  under  the  human  competency  building  (HCB)  umbrella  are  also 
developed  through  direct  procurement  while  the  joint  actions  foresee  the  attribution  of 
grants  to  Member  States,  but  also  some  (e.g.  studies  and  communication  actions)  are 
implemented  through  procurement.  The  table  below  shows  the  main  spending  categories 
and funding attributions for the last four years, according to the most recent data available.  

Table 2 - Committed expenses per year and main action categories under the programme (thousand EUR) 

2012  

2013  

2014  

2015  

2016 

19 Annexes to the European Commission Implementing Decision (EU) of 17.2.2017. 

29 

 
 
 
 
  
                                                      
Joint actions 

Expert teams 
(pilot projects) 
Training 

IT 

Studies 

TOTAL 

AWP 

EU Annual 
Budget  
Amount MFF 

2012  
7 943 

2013  
6 000 

2014  
6 523 

2015  
5 700  

1 413 

41 671 

1 970 

53 000 

53 000 

53 000 

1 365 

44 332 

1 193 

52 891 

53 000 

53 000 

1 350 

57 333 

1 083 

66 289 

66 293 

66 293 

995  

61 167  

846  

68 708  

68 801 

68 801  

2016 
5 700 

1 867 

2 646 

59 897 

1 628 

71 732 

71 733 

71 733 

59 570 

62 120 

66 293 

68 801 

71 733 

Source: Deloitte based on Customs programme Progress Reports20 

The current state of play for each of these types of activities is further detailed below.  

2.3.1 State of play of the joint actions 

The  joint  actions  described  in  Art.  7  of  the  Regulation  1294/2013  establishing  an  action 
programme  for  Customs  2020  programme  in  the  European  Union  for  the  period  2014-
202021 include several types of activities: 

  Seminars  and  workshops:  these  are  one-off  events  addressing  specific  thematic 
subjects  of  all  levels:  from  operational/practical  working  methods  to  strategic  and 
conceptual subjects. They can target all or only a group of participating countries but 
always  share  the  findings  with  all.  Seminars  normally  gather  customs  officials  from 
the different participating countries. Workshops on the other hand consist in one-off 
events  (one  or  two  days)  and  generally  involve  officials  discussing  a  very  specific 
challenge  or  theme.  They  are,  according  to  the  available  data,  the  third  most 
common activities under the Customs 2020 programme. The European Commission 
is of course involved in the preparation of both types of activities but is not always 
attending the event, due to their number and frequency.  

  Project  groups of a limited number of countries: this type of activities consists in a 
number  of  participating  countries  working  together  on  a  specific  subject.  They  are 
operational during a limited period of time to pursue a predefined objective with a 
precisely defined outcome, including coordination or benchmarking.22Project groups 
have been widely used to support the functioning of the customs union, the customs 

20 Customs 2020 programme Progress Report 2016. 

21 Regulation (EU) No 1294/2013. 

22  https://ec.europa.eu/taxation_customs/business/customs-cooperation-programmes/participating-customs-
2020_en  

30 

 
 
 
  
 
 
 
 
                                                      
administrations and to address the uniform interpretation and application of EU law. 
They,  just  like  seminars  and  workshops,  can  target  specific  legal,  technical, 
operational  subjects  or  have  a  more  strategic,  coordinative  or  steering  function 
implemented through a series of meetings, networking and online collaboration. In 
2015, they represented the most successful form of structured cooperation between 
Member States in terms of number of participants.  

  Working  visits:  corresponding  to  up  to  5%  of  the  budget  for  the  joint  actions, 
working  visits  aim  at  facilitating  the  exchange  of  knowledge  and  mutual  learning. 
They  involve  the  presence  of  customs  officials  in  another  country  for  a  limited 
amount  of  time  and  for  a  specific  reason  (e.g.  exchanging  views  or  learning  about 
best practices, developing a specific competence or topical knowledge).  

  Monitoring  activities  are  carried  out  by  joint  teams  (European  Commission  and 
Member  States)  and  aim  at  evaluating  and  monitor  specific  customs  activities  and 
emerging relevant subjects. 

  Expert  teams:  these  are  new  forms  of  structured  cooperation,  with  a  non-
permanent  or  permanent  character,  pooling  expertise  to  perform  tasks  in  specific 
domains or carry out operational activities jointly.23 More details on this type of joint 
action are provided below.  

  Capacity building: these actions aim at strengthening the processes and skills of the 
Member  States  with  more  limited  resources  in  this  respect,  in  order  to  bring  all 
customs  administrations  to  the  same  level  of  administrative  capacity.  Under  the 
current programme, the optimal use of the tool is being explored.  

The Customs 2020 programme also finances: 

  Studies  on  different  subjects,  managed  directly  by  the  European  Commission. 
According  to  the  latest  available  data,  26  studies  were  funded  in  2015  under  this 
heading.24 

  Communication actions: as defined in the Progress Report 2016, “a communication 
policy  towards  the  national  stakeholders  was  identified  as  a  potentially  beneficial 
action in this respect”.25 Therefore, the European Commission established in 2016 a 
“new communication strategy for the Customs 2020 programme, which includes the 
use of new communication tools and channels, as well as a common effort between 
the  EU  and  national  programme  teams  in  the  distribution  of  information  on  the 
programme  to  the  potential  beneficiaries”.26 Some  actions  related  to  this  plan 
already started in 2017 while others are on the pipeline.  

23  https://ec.europa.eu/taxation_customs/business/customs-cooperation-programmes/participating-customs-
2020_en 

24 European Commission, Customs 2020 programme – Progress Report 2016. 

25 Ibid. 

26 Ibid. 

31 

 
 
 
                                                      
  Any other activity27 

The  AWP  2017  attributes  EUR  5  350  000  to  all  these  different  kinds  of  activities,  funded 
through grants and, procurement (EUR 2 830 000 has been allocated to the procurements 
linked to studies and communication support).28  

Following the procedures established and in order for an activity to be organised under the 
programme,  one  of  the  programme  teams  (participating  country  or  the  European 
Commission) has to submit a proposal for this activity, with information on the background, 
objective, expected results, participants and practical information involved. The assessment 
of the proposal is carried out by DG TAXUD leading to the approval or the rejection of the 
initiative.29  

According to the progress reports of the programme (2014, 2015, 2016), “the most popular 
action type remain working visits, followed by project groups placed second and workshops 
as distant third”.30 Nonetheless, if one considers the number of participant rather than the 
number  of  joint  actions,  the  project  groups  touch  the  largest  audience  amongst  all  these 
types of activities, as shown in the graphs below. 

Figure 3 - Overview of activity type and number of participants 2016 

Joint Actions 
operational in 2016

Capacity building
Project groups
Working visits
Monitoring
Seminars
Workshops
Communication

5

9
6

28

5

116

259

Number of 
participants per action 
type in 2016

Capacity building

57

Working visits

Seminars

Communication

302

1

312
466

70

4461

Source: Customs 2020 Programme – Progress Report 2016 

As  defined  in  Art.  7  of  the  Regulation  1294/2013,  expert  teams  are  “structured  forms  of 
cooperation, with a non-permanent or permanent character, pooling expertise to perform 
tasks  in  specific  domains  or  carry  out  operational  activities,  possibly  with  the  support  of 
online  collaboration  services,  administrative  assistance  and  infrastructure  and  equipment 
facilities”.31 Expert teams are therefore a new type of a joint collaboration tool which aims 
at achieving more efficiently and quickly the intended results, with an increased degree of 

27 Art. 7 Regulation (EU) No 1294/2013. 

28 Annexes to the European Commission Implementing Decision (EU) of 17.2.2017. 

29 European Commission, Customs 2020 programme – Progress Report 2016. 

30 Ibid. 

31 Art. 7a (v), Regulation (EU) No 1294/2013. 

32 

 
 
 
     
          
 
                                                      
commitment, collaboration and EU funding. Expert teams are especially important for larger 
projects that require intensive level of co-operation and increased funding support.32  

These  expert  teams  have  an  established  duration  of  3  years  and  they  hence  represent  a 
different type of activity compared to the other joint actions funded by the Customs 2020 
programme.  Indeed,  expert  teams  do  not  merely  involve  the  organisation  of  specific 
meetings and workshops but entail a much more continuous form of collaboration amongst 
a  limited  number  of  countries  and  around  a  very  concrete  challenge  or  issue.  Currently, 
there are 3 expert teams in the domain of customs: 

  CELBET  (expert  team  on  Eastern  and  South-Eastern  land  frontiers,  gathering  11 

countries33); 

  One expert team on customs laboratory (LABO Expert team); 
  One expert team on Binding Tariff Information (BTI); 

To fully grasp the novelty and different perspective of this type of joint action with respect 
to more traditional activities, it is worth exploring the example of the CELBET expert team. 
CELBET is, at the current stage, the most mature of the expert  teams funded as it was the 
first to be established under the Customs 2020 programme. It “was created for an 18-month 
period with budget of  EUR 850.000 and with the aim to strengthen customs relations and 
enhance operational cooperation among the Members of the Team in order for the customs 
controls  performed  at  the  EU  Eastern  and  South-Eastern  land  border  to  be  more  efficient 
and uniform”.34  

More  precisely,  it  covers  six  activity  blocks:  Risk  Management,  Operational  Control, 
Equipment  and  Procurement,  Training,  Evaluation/Performance  Measurement  and 
Cooperation  with  other  law  enforcement.  Each  of  the  block  is  supervised  by  a  different 
Member  State  (e.g.  Hungary  is  leading  the  block  on  Equipment  and  Procurement)  and 
gathers  four  expert  on  the  topic,  working  on  the  deliverables.  Each  block  has  specific 
objectives  and  milestones  agreed  with  the  European  Commission  and  defined  in  the 
implementation plan. The block on Equipment and Procurement for instance is in charge of 
carrying  out  an  analysis  of  procurement  needs  at  each  Border  Crossing  Points  (BCP)  and 
producing  a  procurement  and  funding  planning.  Moreover,  the  block  will  also  draft 
procurement  guidelines.  While  each  block  leader  supervises  the  delivery  of  the  agreed 
outputs, Estonia is in charge of the overall responsibility of the Expert Team and its outputs 
as a whole.  

Although relatively new in the programme (the first expert team was established at the end 
of 2015), the expert team joint actions have proven to be particularly promising and have 

32 European Commission, Customs 2020 programme – Progress Report 2016. 

33 The  countries  participating  are:  Finland,  Estonia,  Latvia,  Lithuania,  Poland,  Hungary,  Slovakia,  Croatia, 
Romania, Bulgaria, and Greece. 

34

 https://eu-brusszel.mfa.gov.hu/eng/news/celbet-equipment-and-procurement-team-will-be-led-by-

hungarian-customs-official-lieutenant-colonel-andras-bartha  

33 

 
 
 
                                                      
raised  high  level  of  interest  amongst  the  Member  States.  To  facilitate  the  take  up  of  this 
new type of joint action, the European Commission provided to the Member States, back in 
2015, a complete guide for application, describing the steps and requirements for obtaining 
funding through the Customs 2020 programme to set up an expert team. This resulted in 3 
expert  teams  proposal  integrated  in  the  2016  Working  Programme  as  mentioned  above. 
There is one overall coordinator (one of the Member States involved) for each expert team, 
who is in charge of supervising the overall activities and results of the project and report to 
the  European  Commission.  Financially  speaking,  the  coordination  receives  the  grant  and 
redistributes it to the different partners.  

The  interest  of  this  new  type  of  joint  action  lies  in  several  particular  strengths  and 
differences with respect to the more traditional joint actions: 

  Expert Teams  allow  for a  tailored  made approach  to  structured  cooperation  across 
Member States  and entails  a  degree  of  joint  implementation  which  is  not  foreseen 
by any of the other activities funded by the programme. 

  Finally, Expert Teams cater for the need of stronger cooperation both in a thematic 
and geographical dimension, across Member States sharing common challenges and 
willing to pool resources and expertise together. 

  Expert Teams allow to finance up to 50% of the salary of the expert involved, as well 
as the renting of premises and the depreciation cost of the equipment acquired. 

For  all these  reasons  expert  teams  meet  an  increasing  success  within the  programme  and 
are  currently  considered  as  a  possible  way  forward  for  the  coordination  activities  in  the 
domain  of  Customs  in the  future. Nonetheless, it  must  be  considered  that these  tools  are 
more expensive than other types of joint actions (e.g. seminars or working visits) and also 
demands  a  lot  of  effort  and  work  on  the  European  Commission’s  side.  Therefore,  if  this 
approach is strengthened in the future, the European Commission might have to adapt not 
only the programme but also the internal work processes to be able to follow up on these 
actions and manage the workload. 

Administrative capacity building is another very important activity, deserving to be singled 
out, under the joint action label. It originates from the recognition that not all the Member 
States  have  the  same  level  of  skills,  resources  and  capacities  when  it  comes  to  the 
implementation  of  the  European  Union’s  customs  legislation.  The  activities  related  to 
capacity  building  aim  therefore  at  strengthening  the  processes  and  skills  of  the  Member 
States who may need so, especially through putting experts from other Member States at 
their disposal and mobilising quickly additional resources for providing support.  

This  type  of  activities  is  therefore  not  multilateral,  as  it  is  the  case  for  project  groups, 
workshops  or  expert  teams,  but  rather  country-focused,  targeting  one  specific  country  at 
the  time  and  its  particular  needs.  Although  being  country  specific,  it  is  very  rare  for  a 
country to request this type of support and most of the activities funded under this heading 
were  directed  towards  Member  States  which  were  implementing  structural  reform 
programmes (such as Greece and Cyprus).  On the European Commission’s side in fact there 

34 

 
 
 
is  no  coordinated  mapping  of  the  administrative  capacity  of  the  Member  States  in  the 
customs domain and therefore no automatic activation of these actions.  

To conclude this overview of the implementation of joint actions, the last few years saw  a 
stable  use  of  traditional  types  of  activities  (e.g.  workshops  and  seminars,  working  visits) 
coupled  with  an  emergence  of  new  successful  forms  of  collaboration  amongst  Member 
States, the expert teams. Although all other types of activities remain popular, the appetite 
shown  by  Member  States  for  the  expert  teams  and  for  more  structured  forms  of 
cooperation might indicate that the latter should be emphasised in the future to cater for 
new emerging needs of customs administrations.  

2.3.2 State of play of the IT capacity building 

The existing customs ecosystem in the EU is based on various regulatory procedures linked 
to goods entering, travelling through and leaving the legally defined customs territory of the 
EU  Member  States.  Customs  controls  were  traditionally  based  on  paper  declarations  and 
other  documents.  Nevertheless,  the  customs  ecosystem  has  steadily  developed  towards  a 
growing  number  of  electronic  interactions,  reflecting  the  increasing  level  of  digitalisation. 
The  customs  controls  are  now  for  instance  particularly  based  on  risk  analyses  using 
electronically provided data. The use of such electronic systems also facilitates accurate and 
effective communication among businesses and customs administrations. 

The  increasingly  electronic  character  of  customs  implies  that  DG  TAXUD  is  heavily 
dependent  on  Information  and  Communication Technology  (ICT)  to  execute  its  mission.  In 
particular,  DG  TAXUD  is  currently  providing  various  IT  services  to  national  customs 
administrations,  citizens,  economic  operators  and  staff  of  the  European  Commission.  The 
quality of these IT services is critical for sustaining the EU customs policies and objectives, 
which essentially also accounts for taxation. However, the dependency on ICT is especially 
high for customs. 

Context of Customs IT capacity building 

In  order  to  understand  the  types  and  breath  of  the  IT  capacity  building  activities  funded 
under the Customs 2020 programme, it is important to first consider the context in which 
these  activities  are  taking  place,  as  well  as  their  purposes  with  respect  to  the  legislative 
context. 

Customs IT capacity building is generally associated with the electronic customs project. This 
project,  which  was  initiated  by  the  European  Commission,  intends  to  replace  the  paper-
based  customs  procedures  with  EU-wide  electronic  ones.  In  particular,  former  customs 
procedures and processes were relatively complex and mainly based on paper declarations. 
Furthermore,  the  electronic  customs  systems  in  the  EU  Member  States  were  not 
interconnected.  Therefore,  the  European  Commission  considered  that  simplification  of 
customs  legislation,  streamlining  customs  processes  and  procedures,  and  convergence  of 
the  related  IT  systems  would  enable  traders  to  save  money  and  time  when  dealing  with 
customs. In addition, this would enhance the competitiveness of EU businesses, which could 

35 

 
 
 
boost  growth  and  jobs  in  the  EU.  Next  to  the  creation  of  a  more  efficient  and  modern 
customs ecosystem, the aforementioned changes would improve safety and security at the 
EU external borders and facilitate trade. In the end, the realisation of the electronic customs 
project would be beneficiary for both EU businesses and citizens. 

The  legislative  basis  of  the  electronic  customs  project  belongs  to  a  policy  framework 
intending  to  have  modern,  effective  and  efficient  customs  processes  and  procedures  that 
are  applied  in  a  consistent  and  seamless  way  across  the  EU.  Hence,  revenue  and  other 
regulatory goals can be protected, while facilitating legitimate trade. In concrete terms, the 
legislative basis of the electronic customs project consists of the following three key aspects: 

  The Security and Safety Amendment of the Community Customs Code (CCC) intends 
to  have  an  equivalent  level  of  protection  through  customs  controls  for  goods 
brought  into  or  out  of  the  EU’s  customs  territory.  This  amendment  provides, 
amongst others, for the entire computerisation of all procedures related to security 
and safety; 

  The  Decision  on  the  paperless  environment  for  customs  and  trade  (so-called  e-
Customs Decision)35 provides a framework for the EU-wide use of electronic customs 
systems  supporting  customs  processes  and  procedures  in  the  EU.  In  particular,  the 
act  details  the  interoperable  systems  to  be  introduced,  the  deadlines  for  their 
establishment  and  the  responsibilities  with  respect  to  human,  budgetary  and 
technical resources of the EU and the EU Member States. In concrete terms, the e-
Customs  Decision  specifies  that  the  electronic  customs  project  should  aim  to 
establish interoperable, secure electronic customs systems for the exchange of data. 
In  this  context, the e-Customs  Decision  also  provides  for  the  creation  of  the  Multi-
Annual Strategic Plan (MASP) (cf. below); 

  The  UCC  serves  as  the  new  framework  Regulation  on  the  rules  and  procedures  for 
customs throughout the entire EU. After entering into force on 30 October 2013, its 
substantive provisions entered into application on 1 May 2016. The UCC has built on 
the  previously  existing  framework  (cf.  above)  and  constitutes  a  legal  basis  for 
completing  the  computerisation  of  customs.  In  particular,  it  provides  that  all 
information  exchanges  between  customs  administrations,  and  between  the 
economic  operators  and  these  administrations,  as  well  as  the  storage  of  such 
information,  has  to  take  place  using  electronic  data  processing  techniques 36. 

35 Decision  No  70/2008/EC  of  the  European  Parliament  and  the  Council  15  January  2008  on  a  paperless 
environment 
http://eur-
lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2008:023:0021:0026:EN:PDF. 

customs 

trade, 

and 

for 

36 The ambition of the UCC to shift to only using electronic systems in customs by the end of 2020 supports the 
UCC  ambition  to  have  fully  connected  customs  processes  working  across  the  EU  with  all  national 
administrations being able to interact together seamlessly. The full benefits of the modernisation programme, 
however, can only be realised when all the UCC IT systems and, in particular, those of the Member States and 
the traders are really working. Until then, some transitional measures may apply, providing essentially for the 
continuation of existing IT and paper-based systems until new IT systems are in place (cf. the discussions on 
the Multi-Annual Strategic Plan and the UCC Work Programme). 

36 

 
 
 
                                                      
Together with its Delegating and Implementing Acts, the UCC determines processes, 
common data  requirements  and  –  in  the future  likely  – technical  arrangements  for 
developing, maintaining and utilising electronic customs systems.  

The  electronic  customs  project  and, 
in  particular,  the  new  UCC  encompass  the 
development,  deployment,  operation,  maintenance,  support  and  quality  assurance  of  an 
increasing  number  of  electronic  customs  systems  to  support  the  further  digitalisation  of 
customs procedures and processes in the EU. In concrete terms, the electronic systems that 
shall  support  the  UCC,  as  well  as  the  timing  of  their  introduction,  are  defined  in  the  UCC 
Work Programme (WP) with respect to the development and deployment of these systems. 
The first WP was adopted by European Commission Implementing Decision 2014/255/EU37. 
In  the  meantime,  this  initial  programme  has  been  replaced  and  repealed  by  European 
Commission Implementing Decision (EU) 2016/57838. 

Hence,  the  WP  provides  an  instrument  to  support  the  application  of  the  UCC,  especially 
regarding the electronic systems envisaged therein. In particular, the updated UCC WP of 11 
April 2016 has three objectives39: 

  Governing the periods for applying transitional rules pending the deployment of the 

new or upgraded systems; 

  Defining the projects and electronic customs systems for: 

  The  reengineering  of  customs  and  processes  related  to  customs  in  view  of 
enhancing  their  efficiency,  effectiveness  and  uniform  application,  as  well  as 
reducing compliance costs; 

  The  offering  of  a  wide  range  of  electronic  customs  services  to  the  economic 
operators,  enabling  them  to  interact  in  the  same  way  with  any  customs 
administration in the EU; 

  The  harmonised  information  exchange  based  on  internally  accepted  data 

models and message formats; 

  Setting an extensive plan for implementing the electronic customs systems in order 

to ensure the correct application of the UCC. 

Accordingly, the new UCC WP contains a list of electronic systems that should be prepared 
and  developed  by  the  Member  States  (i.e.  national  systems)  or  by  the  European 
Commission  in  cooperation  with  these  Member  States  (i.e.  Trans-European  Systems)  in 
order to materialise the UCC in practice. 

37 European Commission,  Implementing Decision of 29  April 2014,  establishing the Work Programme  for the 
Union Customs Code, http://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:32014D0255&from=EN 

38 European  Commission  Implementing  Decision  (EU)  2016/578  of  11  April  2016  establishing  the  Work 
Programme relating to the development and deployment of the electronic systems provided for in the Union 
Customs 
http://eur-lex.europa.eu/legal-
content/EN/TXT/PDF/?uri=CELEX:32016D0578&from=EN 

available 

Code, 

at 

39 https://ec.europa.eu/taxation_customs/business/union-customs-code/ucc-work-programme_en 

37 

 
 
 
                                                      
The EU Member States and, where appropriate, the European Commission will develop and 
deploy  the  different  electronic  customs  systems  in  line  with  the  UCC  WP.  The  necessary 
activities have to be carried out in respect of the milestones and dates specified in the UCC 
WP.  The  Member  States  need  for  instance  to  develop  and  deploy  the  systems  and/or 
components  by  the  end  of  the deployment  windows  determined  in  the  WP.  Furthermore, 
the  European  Commission  and  the  EU  Member  States  will  have  to  collaborate  with 
economic  operators  and  other  relevant  stakeholders.  The  various  economic  operators 
involved will for instance need to ensure that they are able to actually use the UCC systems 
once in place – at the latest by the end dates specified in the UCC WP or, where applicable, 
defined by the Member States in their national plans. 

The  different  projects  will  be  rolled  out  in  different  phases,  from  elaboration  to 
construction,  validation,  migration  and  operation.  Where  appropriate,  common  technical 
specifications  are  defined  by  the  European  Commission,  in  close  cooperation  with  and 
subject  to  the  review  by  the  Member  States.  Technical  specifications  that  have  to  be 
defined nationally – for national systems and/or components – need to be made available, 
at least with respect to the aspects related to the economic operators, in a timely manner to 
enable economic operators to plan and adjust their systems/interfaces accordingly. In this 
context, the EU Member States have to establish and maintain a national planning, as well 
as submit this planning to the  European Commission. The European Commission publishes 
in its turn the planning of the EU Member States on its website. 

Figure 4 - Projects related to UCC electronic system 

38 

 
 
 
 
Source: DG TAXUD – IT Governance – Vision and proposed Strategy (study) – Long-term sustainability of ICT 
operations in support of business policies (version 1.00) – ARES (2017) 0805217 

In  concrete  terms,  the  Work  Programme  entails  seventeen  projects  related  to  UCC 
electronic  systems.  The  figure  below  provides  an  overview  of  these  projects,  including  an 
indication  of  the  type  of  project  (an  update  of  an  existing  system  and/or  a  development 
from scratch). In addition, annex E gives for each of these projects a high-level description. 
Moreover, it shows the key milestones and envisaged dates of deployment as defined in the 
WP of 11 April 2016.40  

Furthermore, it should be noted that the UCC WP itself belongs to a broader IT programme 
for customs governed by the MASP, which has been introduced by the e-Customs Decision. 
In  particular,  the  MASP  concerns  the  vision,  objectives,  strategic  framework  and  planning 
for  the  projects  related  to  the  different  electronic  customs  systems41.  The  electronic 
systems in the UCC WP are for instance subject to the same project management approach, 
as well as prepared and developed as stipulated in the MASP. 

Both the UCC WP and the MASP require regular revisions to account for new developments 
(e.g. with respect to the progress in implementing the UCC). In order to ensure synchronicity 
between the UCC WP and the MASP, both should be aligned and updated at the same time. 
The  latest revision  of the  UCC  Work  Package  and  the  MASP  dates from 2016.  However,  it 
should be noted that DG TAXUD is currently processing a new 2017 revision of the MASP (cf. 
the related paragraphs below). 

In addition to electronic systems related to the UCC, the MASP includes also IT projects that 
are  not  part  of  the  UCC  WP.  The  funding  necessary  for  developing,  deploying,  operating, 
maintaining,  supporting  and  assuring  the  quality  of  the  Union  components  of  these 
additional  IT  projects  is  also  provided  by  the  Customs  2020  programme.  One  of  these  IT 
projects  is  related  to  the  upgrade  of  DG  TAXUD’s  Common  Communications  Network  / 
Common Systems Interface (CCN/CSI)42. 

40 A more detailed description of these projects can also be found in the project fiches included in  the MASP 
(i.e. annex 2 of the MASP package). 

41 The  MASP  package  consists  of  a  main  body,  as  well  as  six  annexes:  MASP  planning,  consolidated  project 
fiches, governance scheme, BPM policy, change log and IT strategy. Consequently, the MASP also provides an 
overview and background information on projects, as well as key issues and the state of play. 

42 The  mission  of  this  network,  operated  by  DG  TAXUD  itself,  is  to  provide  common  services  for  exchanging 
data  related  to  taxation,  excise  and  customs  at  a  reasonable  cost,  as  well  as  with  a  great  level  of  agility, 
security  and  continuity.  The  CCN/CSI  relies  on  the  Common  Communications  Network  (CCN),  which  is 
composed  of  physical  gateways  that  are  located  at  the  national  administrations  and  European  Commission 
premises. These gateways are interconnected securely via communications services and locally connected to 
application platforms that are provided by the local site. It also relies on the Common System Interface (CSI), 
which entails both protocols and application programming interfaces allowing the platforms to exchange data 
through the CCN backbone. Hence, it ensures the interoperability between the heterogeneous systems at the 
national level. 

39 

 
 
 
                                                      
 
IT organisation of DG TAXUD 

The extensive focus on the electronic customs systems implies that DG TAXUD is operating a 
substantial IT organisation. DG TAXUD is mostly engaged with Trans-European Systems (TES) 
spanning all Member States, serving businesses, citizens, national administrations, as well as 
the  European  Commission.  The 
IT  systems  are  supported  by  a  dedicated  data 
communications platform, two datacentres that are managed by DG TAXUD itself, as well as 
related services and infrastructure needed. . For customs, Unit A5 is tasked with procuring, 
buying  delivering,  installing  and  running  any  items  related  to  the  Customs  IT  Stack  (cf. 
below).43 

With respect to TES, DG TAXUD has to cooperate with the Member States. In this respect, 
the e-Customs Decision defined a clear split between the tasks and responsibilities of the EU 
and the EU Member States (i.e. the Union versus national components). This distinction has 
also  consequences  in  terms  of  financing.  In  particular,  the EU  financing  is  provided by the 
Customs  2020  programme.  Nevertheless,  the  collaboration  with  and  delivery  to  the 
Member States can be considered DG TAXUD’s “overwhelming target”. 

DG  TAXUD  has  gradually  developed  itself  into  a  huge  ICT  operation,  with  a  considerable 
level  of  complexity.  According  to  DG  TAXUD’s  Business  Impact  Analysis,  the  (customs  and 
taxation) systems are often mission-critical (53/93, i.e. 57%), whereas the other systems are 
considered  essential  (40/93,  i.e.  43%).  Issues  with  some  customs  IT  systems  could  for 
instance lead to the odious situation of being impossible to load and unload cargo in ports. 
Consequently,  failure  is  not  an  option.  From  a  Human  Resources  (HR)  perspective, 
approximately 66% of the people working directly or indirectly for DG TAXUD are involved in 
ICT  activities.  Approximately  750  FTEs  work  on  ICT,  whereas  382  FTEs  are  active  in  DG 
TAXUD’s  policy  areas.  Furthermore,  the  current  ratio  of  internal  to  external  staff  is  under 
15% (1/7), which should be considered very low. 

The corresponding CCN/CSI infrastructure can be split in two domains. The ‘European’ domain infrastructure is 
owned by DG TAXUD and operated by service providers. The CCN backbone and access equipment are located 
here  and  provided  by  the  network  provided.  An  operational  supplier  remains  the  only  responsible  for 
operating the CCN/CSI infrastructure deployed at the national and DG TAXUD premises. The ‘national’ domain 
components are the responsibility of the national administrations. The CCN/CSI serves all Member States, as 
well  as  Norway  and  Switzerland.  Moreover,  it  extends  to  several  third  countries  (e.g.  Russia)  via  a  separate 
system.  The provision of  CCN/CSI  services  may also extend to candidate Member  States, as  well as to other 
countries according to the evolutions of EU policies. 

43 It should be noted that Unit A5 is supported by various other colleagues of DG TAXUD, e.g. with respect to 
the business needs, business modelling, contracts management and financial management. DG TAXUD’s Unit 
A3 is for instance in charge of the UCC and Business Process Modelling (BPM) functional structure to define, in 
close cooperation with the Member States, the requirements and the business process models of the various 
UCC  IT  systems.  Furthermore,  the  Information  Technology  Steering  Committee  (ITSC)  ensures  the  high-level 
approval  and  authorisation  of  IT  projects  according  to  the  principles  of  good  management  and  financial 
governance. Unit A5 is also supported by a number of sub-contractors. 

40 

 
 
 
                                                                                                                                                                     
Moreover, the 2017 AWP of the Customs 2020 programme44 has foreseen EUR 71 800 000 
for developing, deploying, operating, supporting, maintaining, as well as assuring the quality 
of  the  different  systems.  In  general,  the  portion  of  the  Customs  2020  programme’s  total 
budget  foreseen  for  IT  capacity  building  amounts  to  82%  (i.e.  EUR  426  million  in  a  total 
budget of EUR 522 million). 

The figure below presents the main building blocks of DG TAXUD’s IT Stack. The lower part 
(in  dark  blue)  entails  the  connectivity  between  the  various  systems  of  the  European 
Commission, the Member States and third parties (e.g. economic operators). The part in the 
middle (in light blue) covers the datacentre environment, as well as the lower layers of  DG 
TAXUD’s  software  stack.  These  two  parts  constitute  the  underlying  infrastructure  for  any 
TES  and  are  considered  business-agnostic.  The  upper  building  blocks  (in  green)  entail  the 
application  software  layer,  as  well  as  the  processes  and  methodologies  to  manage  these 
systems. These parts are rather business-specific, requiring business expertise for managing 
them. 

Figure 5 – Main building blocks of DG TAXUD IT Stacks  

Source: DG TAXUD – IT Governance – Vision and proposed Strategy (study) – Long-term sustainability of ICT 
operations in support of business policies (version 1.00) – ARES (2017) 0805217 

DG  TAXUD’s  current  IT  strategy  and  delivery  model  were  established  in  cooperation  with 
the  EU  Member  States  in  2010-2011  based  on  long-established  practices  and  experience. 
This IT strategy is documented and followed up through the MASP. The operational model, 

44 European Commission Implementing Decision of 17 February 2017 concerning the adoption of Annual Work 
Programmes for 2017 for the Customs 2020 and Fiscalis 2020 programmes, as well as on the financing of the 
programmes for expenditure to be committed by DG TAXUD from the 2017 budget lines 140201 and 140301,  
https://ec.europa.eu/taxation_customs/sites/taxation/files/financing_decision_2017_customs_fiscalis.pdf 

41 

 
 
 
                                                      
however, has gradually evolved over time, following the business needs, and it is considered 
sustainable  as  long  as  it  is  used  for  its  intended  purposes.  As  this  existing  setup  has  been 
applied  for  a  number  of  years  already,  DG  TAXUD’s  IT  management  is  largely  considered 
effective and efficient – or as DG TAXUD itself puts it: the current setup delivers, is economic 
and  is  mature.  The  aforementioned  aspects  account  also  for  DG  TAXUD’s  share  in 
implementing the UCC IT systems, even though it is clear that these systems put significant 
pressure on DG TAXUD and its IT organisation. 

Challenges for DG TAXUD’s IT organisation 

The previous paragraphs clearly demonstrate that DG TAXUD has steadily developed its own 
IT organisation. Nevertheless, DG TAXUD’s existing IT delivery model is currently challenged 
by: 

  The natural growth in both running the existing/legacy systems and the development 
of  new  systems  –  The  scope  of  DG  TAXUD’s  responsibilities,  as  well  as  the 
complexity,  has  continuously  increased  over  the  past  years.  Nevertheless,  the 
resources  available  have  remained  largely  stable.  Consequently,  DG  TAXUD  is 
currently  understaffed  with  respect  to  its  IT  delivery  capacity,  with  an  insufficient 
number of people to execute its overall mission appropriately; 

  The  challenge of delivering  DG  TAXUD’s  aspects of  the  UCC  –  Although the  related 
UCC projects have been integrated into the MASP, both the scope and the scale of 
these  developments 
is  no  margin  for  error  or  additional 
assignments; 

imply  that  there 

  The creation of the future Import Control System Upgrade (ICS2) – This has a size and 

scale of a “quantum different” compared with the other systems. 

It should be noted that the first challenge considers both taxation and customs, whereas the 
latter two challenges are especially related to customs and particularly the UCC. In addition, 
the  Member  States  expect  from  the  European  Commission  to  an  increasing  extent 
assistance  in  reducing  their  IT  burden.  In  particular,  even  though  DG  TAXUD  cannot 
implement  national  UCC  system  components,  some  EU  Member  States  are  increasingly 
signalling  limitations  with  respect  to  their  capacity  and  capability.  However,  DG  TAXUD’s 
present IT strategy was never created having such support for Member States in mind. 

As a result, the challenges above impose issues with respect to the scalability and long-term 
sustainability of DG TAXUD’s IT delivery model, in particular regarding customs IT. Especially 
the implementation of national UCC components for Member States and the enormous ICS2 
project  put  substantial  pressure  on  DG  TAXUD’s  IT  delivery  model,  since  it  was  never 
designed to deal with such aspects. Adding these elements on top of all existing systems and 
projects is considered impossible due to the limited resources available. In general, there is 
not enough budget or staff for running such a major, in-house IT operation at DG TAXUD. 

42 

 
 
 
In the context of the current IT Value Chain and IT Building Blocks,  DG TAXUD established 
the following IT vision statement for the horizon 2021-202545: 

“The IT entities of DG TAXUD shall focus on those functions close to the business, 
close  to  policy-making,  leaving  the  more  day-to-day  technical  and  operational 
management aspects of Information and Communication Technologies (at least the 
network, datacentres, systems and middleware layers, as well as the development 
and maintenance of national systems) to third parties that have these as their core 
business, with high expertise in those fields, and with whom they cooperate closely 
and find synergies”. 

Based on this vision, various approaches and possible solutions for the challenges identified 
have been proposed.46 Some initial reflections resulted in the following aspects: 

  In  the  short  term  (up  to  2018),  the  preferred  strategy  would  be  continuing  DG 
TAXUD’s  operations  while  fine-tuning  the  internal  organisation47 and  continuing 
deepening the relationship with Directorate General for Informatics (DG DIGIT) (e.g. 
especially with respect to datacentre management); 

  In the medium term (up to 2020), the collaboration with DG DIGIT and the creation 
of collaboration initiatives with Member States to reduce the costs for developing as 
well  as  running  IT  systems  in  Member  States  (e.g.  fostering  the  use  of  an  external 
shared supplier48) would be pursued; 

  In  the  long  term  (2021-2025),  potential  synergies  with  existing  agencies  (e.g. 
European Agency for the operational management of large-scale IT Systems, eu-LISA) 
would be further explored. Moreover, the idea of a separate entity managing an EU 
Administrative  Cloud  or  other  multi-DG  solutions  could  be  explored  together  with 
the European Commission services that are interest to participate. 

2017 revision of the Multi-Annual Strategic Plan (MASP) 

45 This vision statement was established in ARES (2017)0805217. 

46 A description of these approaches, as well as an overview of some of their advantages and disadvantages, 
can also be consulted in ARES (2017)0805217. 

47 With  respect  to  fine-tuning  DG  TAXUD’s  IT  organisation,  Unit  A5  has  for  instance  been  divided  in  two 
separate units. In addition, DG TAXUD is currently pursuing a reinforcement of its staff (cf. below). Moreover, a 
dedicated ICS2 project team was created, mandated by DG TAXUD. The people of this ICS2 project team were 
pulled from the Units A3, A5 and B2  – covering business, legal and IT expertise. There is a dedicated project 
manager, as well as a dedicated project  plan linked to the MASP and the  UCC WP. The purpose of the ICS2 
project  team  is  to  focus  all  involved  people  on  shared  key  goals  in  order  to  successfully  deploy  this  huge 
system. 

48 A shared IT supplier entails the pooling of resources in a  way that allows a single entity to provide two or 
more  EU  Member  States  and/or  the  European  Commission  with  one  or  more  elements  of  the  systems  they 
need based on common specifications. This pooling of resources could especially happen in two ways: EU-wide 
pooling (i.e. amongst the European Commission and the Member States) and pooling at the national levels. 

43 

 
 
 
                                                      
Given the challenges that DG TAXUD’s IT organisation is presently facing (cf. above), a reality 
check has been performed in order to assess the feasibility of meeting the 2020 deadline for 
all UCC projects. In concrete terms, the limitations with respect to the available and planned 
financial  and  human  resources  for  DG  TAXUD,  as  well  as  for  the  EU  Member  States  and 
trade  were  taken  into  account.  Nevertheless,  it  was  assumed  that  the  various  Member 
States would implement the national import declaration processing systems, as well as the 
related systems by 2020. 

DG  TAXUD  has  taken  its  reality  check  into  account  during  its  2017  revision  of  the  MASP, 
which was announced at the High Level Project Group (HLPG) meeting of 31 March 2017. In 
concrete terms, the discussions with the Member States and  trade have revealed that the 
2020 deadline cannot be met. In particular, trying to implement all systems together over a 
too short time period entails a major risk of critical systems failing, hampering the smooth 
flow of goods. 

Therefore, DG TAXUD created a realistic planning for the implementation of the UCC core IT 
structure in order to ensure its operation by end 2020. Therefore, any projects that could be 
confidently  deployed  by  end  2020  and  for  which  no  major  risk  exists  were  identified  (e.g. 
the central UCC systems, as well as national declaration and related systems). The remaining 
IT  systems  primarily  consider  movements  and  messages  across  the  EU,  such  as  for  export 
(Automated  Export  System,  AES),  transit  (New  Computerised  Transit  System,  NCTS)  and 
centralised clearance at import (CCI). Furthermore, the following systems would not be fully 
implemented  by  the  end  of  2020:  ICS2,  Proof  of  Union  Status  (PoUS)  and  Guarantee 
Management  Systems  (GUM).  In  particular,  the  following  overarching  principles  were 
adopted for this year’s revision of the MASP: 

  ICS2 will be deployed according to the agreement concluded at the Customs Project 
Group meeting mid-2016. Block 1.a will be capped at EUR 16.6 million over the 2016-
2020  period.  Block  1.a  will  enter  operation  end  2020  (cf.  grey  cells  in  the  table 
below), kicking off the full transition from ICS to ICS2 over the duration foreseen for 
block 1.b and extended to be aligned with the complete operation of NCTS Phase 6. 
In addition, a dedicated ICS2 project team will ensure the successful deployment of 
this system; 

  All functional and technical specifications for the UCC AES, NCTS Phase 5 and CCI will 
be made available before the end of 2020, 18-24 months following the availability of 
the Level 4 Business Process Models (BPM L4)49 and assuming that the BPM L4 will 
be approved by the Member States by end June 2018 (cf. green cells and red dates in 
the  table  below).  The  deployment  of  the  UCC  AES,  NCTS  Phase  5  and  CCI  into  the 
business environment will take place over 2022 and 2023 at the latest; 

  The  BPM  L4  for  the  UCC  GUM,  NCTS  Phase  6  and  PoUS  will  be  approved  by  the 
various  EU  Member  States  by  end  2019  (cf.  yellow  cells  and  red  dates  in  the  table 

49 More information on the Customs Business Process Modelling (BPM)  policy can be consulted in annex 4 of 
the MASP package. 

44 

 
 
 
                                                      
below).  The  deployment  of  these  systems  into  operation  will  take  place  over  mid-
2023 until mid-2025 at the latest50. 

  The  dates  for  the  deployment  or  implementation  of  the  “lower  priority”  MASP 
projects will be postponed (beyond 2020) and will be defined later (cf. purple cells in 
the table below); 

  The  planning  for  the  upgrade  of  Customs  Risk  Management  System  (CRMS2)  and 
SSTL, as well as the EU-Russia Green Corridor Pilot project are preserved (cf. orange 
cells in the table below); 

  All  UCC  central  systems will  be delivered  by  end  2020  as  per the  current timetable 

(cf. blue cells in the table below); 

The  table  below  presents  the  high-level  planning  for  the  various  projects  (and,  in  some 
cases,  project  phases),  as  determined  in  the  2017  revision  of  the  MASP.  In  particular,  the 
updated planning as agreed during the Customs Project Group meeting of 29 June 2017 is 
shown  in  this  table.  The  planning  is  broken  down  into  some  constituent  steps  for 
implementing  the  different  projects,  from  the  early  stage  of  their  business  model  to  their 
full operation51. 

50 The planning presented for implementing NCTS Phase 6 is a worst-case option. DG TAXUD will try to ensure 
a  parallel  implementation  of  NCTS  Phases  5  and  6.  However,  the  planning  for  implementing  NCTS  Phase  5 
should never be endangered by this aspiration. 

51 It should be noted that the table comprises moments of operation for both the first EU Member State and 
all  Member  States.  This  provides  an  indication  of  the  intended  transition  period  for  each  of  these  projects. 
Most  of  the  central  systems  are  expected  to  have  a  ‘big  bang’  start  of  operation  (e.g.  EORI2),  whereas  the 
connection of the Member States to other systems would happen during a transition period (e.g. BTI). 

45 

 
 
 
                                                      
Table 3 – High-level planning of the projects in the 2017 revision of the MASP (endorsed by the Customs Project Group on 29 June 2017) 

Project/System Name 

MASP 
Fiche 
1.02  Customs Decisions Iteration 1 
1.02  Customs Decisions Iteration 2 
1.04  BTI Phase 1 – Step 1 
1.04  BTI Phase 1 – Step 2 
1.04  BTI Phase 2 
1.05  EU AEO Direct Trader Access 
1.05  EU AEO Major Enhancement 
1.06  AES 
1.06  National Export Systems Upgrade 
1.07  Transit By Use of ETD Used By Transit 
1.07  Transit System Including NCTS Phase 5 
1.07  Transit System Including NCTS Phase 6 
1.11  REX 
1.11  REX2 
1.12  COPIS AFIS 
1.12  COPIS eAFA 
1.13  EU Single Window – CHED-PP 
1.13  EU Single Window – COI 
1.13  EU Single Window – CVED/CED 
1.13  EU Single Window – FLEGT 
1.14  CLASS 
1.15  EORI2 
1.16  CRMS2 
2.01  NA, PN & TS 
2.05  GUM – Component 1 
2.05  GUM – Component 2 
2.06 
2.06  Special Procedures – Harmonisation (EXP) 
2.06  Special Procedures – Harmonisation (IMP) 
2.07  Surveillance 3 
2.08 
2.10  CCI – Phase 1 
2.10  CCI – Phase 2 

INF for Special Procedures 

ICS2 – Block 1.a 

UCC 

Business Case 

L4 BPM 

Vision Document 

Yes 
Yes 
Yes 
Yes 
Yes 
Yes 
Yes 
Yes 
Yes 
Yes 
Yes 
Yes 
Yes 

Yes 

Yes 
Yes 
Yes 
Yes 
Yes 
Yes 
Yes 
Yes 
Yes 
Yes 

13 Q2 
13 Q2 
16 Q1 
16 Q1 
16 Q2 
N/A 
N/A 
18 Q1 
N/A 
N/A 
18 Q1 
19 Q4 
13 Q3 
N/A 
N/A 
16 Q2 
17 Q1 
17 Q1 
17 Q1 
17 Q1 
14 Q3 
N/A 
16 Q4 
N/A 
19 Q4 
N/A 
15 Q4 
N/A 
N/A 
14 Q4 
17 Q2 
18 Q2 
TBP 

15 Q2 
15 Q2 
N/A 
N/A 
N/A 
17 Q1 
16 Q1 
18 Q1 
N/A 
N/A 
18 Q1 
19 Q4 
15 Q1 
N/A 
N/A 
16 Q4 
17 Q3 
17 Q2 
17 Q3 
17 Q2 
15 Q1 
N/A 
N/A 
N/A 
19 Q4 
N/A 
16 Q4 
N/A 
N/A 
15 Q2 
17 Q2 
18 Q2 
20 Q2 

13 Q2 
13 Q2 
16 Q3 
16 Q3 
16 Q4 
N/A 
N/A 
18 Q1 
N/A 
N/A 
18 Q1 
20 Q1 
14 Q2 
N/A 
16 Q1 
18 Q1 
17 Q2 
17 Q2 
17 Q2 
17 Q2 
15 Q4 
N/A 
17 Q2 
N/A 
20 Q1 
N/A 
16 Q2 
N/A 
N/A 
15 Q2 
17 Q2 
18 Q2 
20 Q4 

Application/Service 
Specifications 
15 Q1 
18 Q1 
16 Q3 
16 Q3 
17 Q4 
17 Q4 
15 Q4 
19 Q2 
N/A 
N/A 
19 Q2 
21 Q2 
15 Q1 
N/A 
16 Q4 
19 Q2 
18 Q1 
17 Q4 
18 Q1 
17 Q4 
16 Q4 
16 Q2 
18 Q2 
N/A 
21 Q2 
N/A 
17 Q2 
N/A 
N/A 
16 Q2 
18 Q2 
19 Q3 
21 Q4 

Technical System 
Specifications 
15 Q4 
18 Q2 
16 Q3 
16 Q3 
17 Q4 
17 Q4 
16 Q1 
19 Q4 
N/A 
N/A 
19 Q4 
21 Q4 
15 Q2 
N/A 
16 Q4 
19 Q2 
18 Q1 
17 Q4 
18 Q1 
17 Q4 
17 Q1 
16 Q2 
18 Q2 
N/A 
21 Q4 
N/A 
18 Q1 
N/A 
N/A 
16 Q3 
18 Q3 
20 Q1 
22 Q2 

Operation (First 
MS) 
17 Q4 
19 Q4 
17 Q1 
17 Q4 
19 Q4 
19 Q4 
18 Q1 
21 Q1 
21 Q4 
16 Q2 
21 Q1 
23 Q2 
17 Q1 
17 Q4 
17 Q4 
21 Q4 
18 Q3 
18 Q1 
18 Q3 
18 Q1 
18 Q4 
18 Q1 
19 Q4 
16 Q1 
23 Q2 
19 Q2 
20 Q2 
17 Q1 
16 Q2 
18 Q4 
20 Q4 
21 Q1 
23 Q4 

Operation (All MS) 

17 Q4 
19 Q4 
20 Q4 
20 Q4 
19 Q4 
19 Q4 
18 Q1 
23 Q4 
23 Q4 
18 Q2 
23 Q4 
25 Q2 
17 Q1 
17 Q4 
17 Q4 
21 Q4 
? 
? 
? 
? 
18 Q4 
18 Q1 
19 Q4 
20 Q4 
25 Q2 
24 Q2 
20 Q2 
20 Q1 
20 Q4 
20 Q4 
25 Q2 
23 Q4 
25 Q4 

46 

 
 
 
  
  
  
  
  
  
  
  
  
Project/System Name 

MASP 
Fiche 
2.10  National Import Systems Upgrade 
2.11  CUP-MIS Release 1 
2.11  CUP-MIS Release 2 
2.12  PoUS 
3.01  EU Implementation UNECE eTIR System 
3.02  EU Implementation eATA Carnet Project 
3.03  SSTL Component 1 (Exchanges EU/CN/HK) 
3.03  SSTL Component 2 (Exchanges MS & COM) 
3.04  Exchanging TIR movements with MD & UA 
3.05  EU-CH EXS Data Exchange 
3.06  EU-RU Green Corridor Pilot – Component 1 
3.06  EU-RU Green Corridor Pilot – Component 2 
4.01  Collaboration in National Core Systems 
4.05  CCN2 Release 1 
4.05  CCN2 Release 1.5 
4.05  CCN2 Release 2 
4.05  CCN2 Release 3 
4.06  UUM & DS Release 1 
4.06  UUM & DS Release 2 
4.07  High Availability DG TAXUD (99.6%) 
4.07  High Availability DG TAXUD (99.8%) 
4.11  CTA 

Source: MASP Revision 2017 V2.00

UCC 

Business Case 

L4 BPM 

Vision Document 

Yes 

Yes 

Yes 

N/A 
TBP 
TBP 
19 Q4 
TBP 
TBP 
17 Q2 
17 Q2 
15 Q4 
TBP 
18 Q4 
18 Q4 
N/A 
N/A 
N/A 
N/A 
N/A 
14 Q1 
N/A 
N/A 
N/A 
15 Q2 

N/A 
N/A 
N/A 
19 Q4 
TBP 
TBP 
N/A 
18 Q2 
15 Q4 
TBP 
N/A 
19 Q1 
N/A 
N/A 
N/A 
N/A 
N/A 
N/A 
N/A 
N/A 
N/A 
N/A 

N/A 
TBP 
TBP 
20 Q1 
TBP 
TBP 
18 Q3 
18 Q3 
17 Q1 
TBP 
19 Q2 
19 Q2 
N/A 
N/A 
N/A 
N/A 
N/A 
14 Q3 
18 Q2 
11 Q2 
11 Q2 
16 Q1 

Application/Service 
Specifications 
N/A 
TBP 
TBP 
21 Q2 
TBP 
TBP 
19 Q4 
19 Q4 
17 Q4 
TBP 
20 Q3 
20 Q3 
N/A 
16 Q1 
16 Q2 
16 Q4 
TBP 
15 Q1 
19 Q1 
N/A 
17 Q4 
17 Q1 

Technical System 
Specifications 
N/A 
TBP 
TBP 
21 Q4 
TBP 
TBP 
19 Q4 
19 Q4 
17 Q4 
TBP 
20 Q3 
20 Q3 
N/A 
16 Q2 
16 Q4 
17 Q2 
TBP 
15 Q3 
19 Q1 
15 Q2 
18 Q2 
17 Q1 

Operation (First 
MS) 
16 Q1 
TBP 
TBP 
23 Q2 
TBP 
TBP 
21 Q4 
21 Q4 
18 Q4 
TBP 
22 Q3 
22 Q3 
N/A 
17 Q4 
17 Q4 
20 Q3 
TBP 
17 Q4 
21 Q1 
17 Q4 
20 Q4 
17 Q4 

Operation (All MS) 

20 Q4 
TBP 
TBP 
25 Q2 
TBP 
TBP 
21 Q4 
21 Q4 
18 Q4 
TBP 
22 Q3 
22 Q3 
N/A 
17 Q4 
17 Q4 
20 Q3 
TBP 
17 Q4 
21 Q1 
17 Q4 
20 Q4 
17 Q4 

N/A: Not Applicable – TBP: To Be Planned 

47 

 
 
 
  
  
  
  
  
  
  
 
  
  
  
  
 
 
  
  
  
  
  
With  respect  to  the  UCC,  the  revised  MASP  envisages  to  enter  all  UCC  central  systems  by 
end  2020  and  to  achieve  certainty  in  terms  of  the  system  specifications  before  2020.  The 
‘legacy  to  UCC’  transition  of  AES,  ICS2  and  NCTS  is  intended  to  proceed  during  the  2021-
2025 period, whereas the remaining UCC systems (CCI, GUM and PoUS) should be deployed 
in parallel by end 2025. This revised planning is expected to result in a UCC completion rate, 
excluding the UCC projects under exclusive responsibility of the Member States, of 81% by 
end  202052.  The  remaining  19%  to  obtain  full  completion  of  the  UCC  implementation  is 
consequently expected to take until end 2025 or beyond. 

In order to ensure that the Member States have all input needed to finalise national systems 
and to prepare their work, the European Commission envisages to finalise all specifications 
as  early  as  possible.  In  concrete  terms,  the  specifications  for  the  five  UCC  projects  that 
would  be  fully  operational  only  after  2020  (AES,  CCI,  GUM,  NCTS  and  PoUS), 
notwithstanding  ICS253,  would  be  produced  in  two  waves.  The  first  wave  would  cover  the 
delivery  of  the  NCTS  Phase  5,  CCI  and  AES  BPM  by  the  second  quarter  of  2018.  Based  on 
standard project measures, this would imply full operation of these systems by all Member 
States by end 2023. The second wave would entail the delivery of the BPM for GUM, PoUS 
and (if needed) NCTS Phase 6 that covers links with ICS2 by the fourth quarter of 201954. In 
this situation, the systems considered would be fully operational by end 2025. 

In  addition  to  the  elements  mentioned  above,  a  number  of  additional  implications  of  the 
2017 MASP revision have to be considered: 

  DG  TAXUD  determined  that  an  additional  EUR  7  million  will  be  needed  under  the 
Customs  2020  to  fully  cover  the  2018-2020  period.  Reinforcements  in  terms  of 
Human  Resources  (HR)  will  also  be  required.  Four  additional  FTEs  statutory  staff 
have  already  been  guaranteed  for  Unit  A5.  Nevertheless,  this  unit  still  needs  to  be 
reinforced by 20 Intra-Muros people. DG TAXUD would in total need eleven officials 
and 30 Intra-Muros people extra; 

  The extension of the timeframe for implementing some UCC systems beyond the end 
of  2020  implies  that  the  future  Customs  programme  will  need  to  account  for 
sufficient (financial) resources to implement these systems (cf. next paragraphs); 
  The existing UCC legislation has to be amended for the projects that received a new 

end date, essentially allowing the completion of all UCC projects by end 2025. 

Budgetary needs for Customs IT capacity building until 2030 

Based on the latest version of the revised MASP and associated balance sheet,  DG TAXUD 
projected the budgetary needs for the Customs IT capacity building until 2030. In concrete 

52 The  current  UCC  completion  rate,  excluding  the  UCC  projects  under  the  exclusive  responsibility  of  the 
Member States, is estimated at 35%. 

53 The planning for ICS2 was already defined earlier (cf. above). It was for instance agreed that first operation 
of the scaled-down central repository, which will not cover all trader inputs, would be for end 2020. 

54 This assumes that there would be no simpler solutions identified for GUM and PoUS in the meantime. 

48 

 
 
                                                      
terms, the planning was aligned with the MASP proposal made to the Customs Policy Group 
in preparation of its meeting of 29-30 June 2017. Moreover, the budgetary projections for 
each  project  were  extended  until  2030  by  merely  keeping  the  2025  estimates  until  2030 
(with  only  some  exceptions  of  secondary  importance),  since  most  of  the  current  projects 
will  only  entail  Operational  Expenditures  (OPEX)  after  2025.  In  addition,  the  budget 
estimations accounted for the following aspects: 

  The  Business  Process  Modelling  (BPM)  effort  and  the  coordination  of  Member 
States,  managed  by  Unit  A3,  will  end  by  2023  and  2026  respectively  (i.e.  in 
accordance with the steps in implementing the UCC and the other MASP projects); 
  Due  to  the  significant  delay  in  migrating  CCN  to  CCN2,  it  will  only  be  possible  to 
phase out CCN in 2025 instead of 2021. Hence, the 2021 yearly costs for CCN were 
extended until 2025; 

  It is intended to speed up the Central Clearance system (Phase 2)55. 

No additional prioritizations or provisions were made. Hence, it is assumed that DG TAXUD’s 
current  IT  delivery  capacity  remains  as  today  or  that  any  change  will  be  neutral  from  a 
budget and planning perspective. 

The  yearly  budget  projection  for  each  known  project  was  split  in  Capital  Expenditures 
(CAPEX)  and  Operational  Expenditures  (OPEX),  in  line  with  the  planning  in  the  MASP 
proposal  for  the  Customs  Policy  Group  meeting  of  29-30  June  2017.  This  resulted  in  a 
‘bottom up’ estimation of the CAPEX and OPEX for the currently known projects. However, 
it  is  likely  that  the  customs  environment  will  keep  facing  new  IT  challenges  in  the  future. 
Notwithstanding ICS2, the historical CAPEX entails for instance EUR 20-30 million per year, 
implying  an  annual  increase  in  OPEX  of  EUR  5-10  million.  Taking  into  account  that  DG 
TAXUD’s IT delivery capacity will be fully used for the UCC until 2020, a CAPEX provision was 
included from 2021 onwards, starting at EUR 7 million per year and reaching EUR 20 million 
per  year  in  2026  once  ICS2  will  be  operational.  This  CAPEX  implies  the  creation  of  OPEX, 
assumed to equal 25% of the total CAPEX invested. 

The  table  below  presents  the  aggregated  results  for  Current  Projects  (CP),  split  between 
ICS2 and the remaining IT customs projects (CP-ICS2), as well as for New Projects (NP). The 
graph below visualises these figures. 

55 The implementation of the AES, NCTS and Central Clearance systems would also be sped up. Nevertheless, it 
was considered that this would not have a material impact on the balance sheet and, hence, was abstracted. 

49 

 
 
 
 
                                                      
Table 4 – Projected CAPEX and OPEX for Customs IT capacity building (EUR millions per year)56 

(M 
EUR/year) 
CAPEX 
OPEX 
Total 
CAPEX 
OPEX 
Total 
CAPEX 
OPEX 
Total 
CAPEX 
OPEX 
Total 
CAPEX 
OPEX 
Total 
(M 
EUR/year) 
CAPEX 
OPEX 
Total 
CAPEX 
OPEX 
Total 
CAPEX 
OPEX 
Total 
CAPEX 
OPEX 
Total 
CAPEX 
OPEX 
Total 

CP-ICS2 

ICS2 

CP 

NP 

CP+NP 

CP-ICS2 

ICS2 

CP 

NP 

CP+NP 

2015 

2016 

2017 

2018 

2019 

2020 

2021 

2022 

2023 

20.9 
41.8 
62.8 
0.6 
0.0 
0.6 
21.5 
41.8 
63.4 
0.0 
0.0 
0.0 
21.5 
41.8 
63.4 

29.4 
32.6 
62.0 
1.3 
0.0 
1.3 
30.7 
32.6 
63.3 
0.0 
0.0 
0.0 
30.7 
32.6 
63.3 

22.0 
44.5 
66.5 
3.5 
0.0 
3.5 
25.5 
44.5 
70.0 
0.0 
0.0 
0.0 
25.5 
44.5 
70.0 

19.4 
49.1 
68.4 
4.5 
0.0 
4.5 
23.9 
49.1 
72.9 
0.0 
0.0 
0.0 
23.9 
49.1 
72.9 

22.6 
50.6 
73.3 
4.5 
0.0 
4.5 
27.1 
50.6 
77.8 
0.0 
0.0 
0.0 
27.1 
50.6 
77.8 

17,5 
47.9 
65.4 
3.5 
0.0 
3.5 
21.0 
47.9 
68.9 
0.0 
0.0 
0.0 
21.0 
47.9 
68.9 

5.6 
12.3 
13.6 
58.5 
53.9 
58.1 
64.1 
66.2 
71.7 
49.2 
36.1 
38.5 
1.9 
0.7 
0.7 
51.0 
36.8 
39.2 
54.8 
48.4 
52.1 
58.8 
60.4 
54.6 
110.9  103.0  115.2 
10.0 
8.0 
7.0 
3.8 
1.8 
0.0 
13.8 
9.8 
7.0 
64.8 
56.4 
59.1 
64.1 
56.4 
58.8 
117.9  112,8  128.9 
2021-
2016-
20 
30 
38.4 
102.4 
0.0 
3.9 
233.9  590.9 
58.9 
60.8 
336.3  629.3 
58.9 
64.7 
123.8 
16.6 
0.0 
0.0 
309.9 
0.0 
43.8 
43.8 
16.6 
433.7 
43.8 
43.8 
119.0  162.2 
0.0 
3.9 
104.6  107.6  102.4  102.7  102.7  104.7  102.1  233.9  900.8 
108.5  110.1  103.0  102.7  102.7  104.7  102.1  352.9  1 063.0 
157.0 
20.0 
16.0 
143.5 
24.3 
6.3 
300.5 
44.3 
22.3 
19.9 
119.0  319.2 
20.0 
110.8  117.9  116.9  122.0  127.0  134.0  136.3  233.9  1 044.3 
130.7  137.3  136.5  142.0  147.0  154.0  156.3  352.9  1 363.5 

0.0 
58.9 
58.9 
0.0 
43.8 
43.8 
0.0 

0.0 
58.3 
58.3 
0.0 
43.8 
43.8 
0.0 

0.0 
60.9 
60.9 
0.0 
43.8 
43.8 
0.0 

0.6 
58.6 
59.2 
0.0 
43.8 
43.8 
0.6 

2.5 
63.8 
66.3 
0.0 
43.8 
43.8 
2.5 

20.0 
19.3 
39.3 
20.0 

19.0 
14.5 
33.5 
19.6 

20.0 
34.3 
54.3 
20.0 

20.0 
29.3 
49.3 
20.0 

17.0 
10.3 
27.3 
19.5 

0.0 
0.0 
0.0 

2026 

2027 

2028 

2029 

2030 

2025 

2024 

Source: OPEX and CAPEX of Customs IT capacity building until 2030 – ARES (2017) 3166390 

56 Figures are rounded. 

50 

 
 
 
 
                                                      
Figure 6 - Projected CAPEX & OPEX for Customs IT capacity building 

2030
2029
2028
2027
2026
2025
2024
2023
2022
2021
2020
2019
2018
2017
2016
2015

 ,00

2 0,00

4 0,00

6 0,00

8 0,00

10 0,00

12 0,00

14 0,00

16 0,00

18 0,00

Projected CAPEX & OPEX (M€/year)

OPEX CP-ICS2

CAPEX CP-ICS2

OPEX ICS2

CAPEX ICS2

OPEX NP

CAPEX NP

Source: OPEX and CAPEX of Customs IT capacity building until 2030 – ARES (2017) 3166390 

The aspects above demonstrate that three elements have to be considered: 

  The current projects without ICS2 – Following the completion of the UCC, the CAPEX 
basically dries out in 2026. For the operation of the resulting systems, a stable OPEX 
of approximately EUR 60 million per year can then be expected. In general, ensuring 
the  continuity  of  the  MASP  and  the  UCC,  excluding  ICS2,  is  projected  to  require  a 
total budget of EUR 629 million over the 2021-2030 period; 

  The  ICS2  project  –  The  CAPEX  for  ICS2  is  expected  to  vanish  in  2024,  whereas  the 
OPEX would then stabilise at approximately EUR 44 million per year57. Ensuring the 
creation  of  the  ICS2  system,  as  well  as  its  continuous  operation,  will  therefore 
require a budget of about EUR 434 million over the 2021-2030 period; 

  The new projects that are currently not known – Providing future customs IT projects 
with a “historically witnessed intensity and momentum” corresponds with CAPEX of 
EUR  20  million  per  year,  with  a  progressive  increase  from  2021  onwards.  This  also 
leads to an OPEX growth, which will get to EUR 34 million per year in 2030. Hence, 
IT  projects  can  be  pursued  as  done  before 
ensuring  that  new  customs 

57 The expected CAPEX for ICS2 can be considered atypical. The strong C APEX burst over the 2021-2024 period, 
due  to  the  current  programme’s  budget  limitations,  would  result  in  a  considerable  budgetary  need  for  the 
future Customs programme. In addition, it should be noted that this situation implies significant pressure for 
DG  TAXUD  and  the  Member  States  in  delivering  the  various  projects,  as  it  will  also  need  to  deploy  the  AES, 
NCTS and Central Clearance Import 1 systems simultaneously. 

51 

 
 
                                                      
(notwithstanding ICS2) is projected to require a total budget of EUR 301 million over 
the 2021-2030 period. 

Hence, securing the continuation of all projects currently known is estimated to require an 
IT budget of approximately EUR 1 063 million over the 2021-2030 period. On-boarding also 
new customs IT projects would increase this total budgetary need to EUR 1 364 million. 

Based on the latest version of the revised  MASP and associated balance sheet,  DG TAXUD 
also  considered  the  budgetary  needs  from  a  ‘Customs  Value  Stack’  perspective.  Such  a 
‘Customs  Value  Stack’  basically  entails  a  stack  of  the  budgetary  needs  by  system  block.  In 
addition,  the  activities  supported  by  the  programme  can  be  split  in  two  types:  activities 
related  to  the  EU  legal  obligations  and  the  activities  related  to  the  support  of  the  EU 
Member States in meeting their obligations. With respect to IT capacity building, this results 
in a differentiation between EU IT capacity building and MS IT capacity building. The former 
refers to meeting  EU  IT requirements that  serve  all  Member  States  in  sharing  and  dealing 
with data (i.e. Union components). The latter concerns the reduction of the burden on the 
Member  States  in  delivering  on  their  IT  obligations  (i.e.  national  components).  These 
aspects result in the following “Customs Value Stack”: 

  EU IT capacity building: 

  Legacy 2017 – All Customs IT projects that were operational on 1 January 2017; 
  UCC  Up  To  2020  –  The  continuous  operation  of  all  UCC  IT  systems  to  be 
operational before end 2020 (i.e. mostly all central applications, from Customs 
Decisions to INF); 
  International Projects; 
  UCC  After  2020  –  The  continuous  operation  of  all  UCC  IT  systems  (primarily 

TES) to be operational after 2020 (i.e. mostly TES, excluding ICS2); 

  ICS2 & Customs Risk Management System (CRMS) – It includes the TES aspects 

of ICS2 and its Common Repository, as well as the CRMS; 

  New  Projects  –  The  provision  for  projects  currently  not  known,  based  on 
‘historically  witnessed  intensity  and  momentum’,  notwithstanding  ICS2.  It  is 
assumed  that  the  EU  portion  corresponds  to  66%  of  delivering  new  projects, 
which is projected to account for CAPEX of EUR 20 million per year (cf. above). 

  Member States IT capacity building: 

  National Decisions and Trader Portal – This includes the National Decisions part 

of the Customs Decisions system and the Trader Portal; 

  ICS2 Opt In’s – It includes the three ICS2 Opt In’s that have been identified so 
far:  the  Shared  Trader  Interface  (STI),  Shared  Risk  Management  Support,  as 
well as the Shared e-Screening58; 

58 It  should  be  noted  that  DG  TAXUD  decided  in  June  2017  to  cover  the  costs  of  the  STI  under  the  current 
Customs 2020 programme, having DG  TAXUD as system  supplier/owner and the Member States as business 
owner. 

52 

 
 
                                                      
  New  Projects  –  The  provision  for  projects  currently  not  known,  based  on 
“historically  witnessed  intensity  and  momentum”,  notwithstanding  ICS2.  It  is 
assumed  that  the MS portion  corresponds to  34%  of delivering new projects, 
which is projected to account for CAPEX of EUR 20 million per year (cf. above). 
This reflects DG TAXUD’s ambition to strengthen the programme’s capacity to 
support the Member States in meeting the national IT obligations. In particular, 
economies  of  scale  should  be  realised  to  avoid  28  separate  developments  of 
identical national IT systems (e.g. via shared IT suppliers). 

Furthermore, it should be noted that DG TAXUD considered – for the sake of the analysis – a 
decreasing  priority  in  the  ‘Customs  Value  Stack’  based  on  its  principle  of  EU  IT  continuity 
first. 

The  figure  below  presents  the  budgetary  needs  from  a  ‘Customs  Value  Stack’  perspective 
that  were  calculated  using  the  data  underlying  the  CAPEX  and  OPEX  figures  presented 
above59.  In  addition,  the  figure  visualises  three  potential  budgetary  scenarios  that  have 
been introduced for the future Customs programme60: 

  EU27 Reference Scenario – 85% of the current IT budget (i.e. approximately EUR 52 

million per year); 

  EU27  Reference  Scenario,  minus  30%  –  70%  of  85%  of  the  current  IT  budget  (i.e. 

about EUR 36 million per year); 

  Scenario with a budget as per the needs – A budget allowing to deliver on the UCC 

and to face new IT challenges at the EU level. 

59 Compared  with  the  CAPEX  and  OPEX  figures  presented  before,  the  underlying  data  comprises  some  fine-
tuned estimations. The ICS2 budget projections have for instance been aligned with the latest version of the 
business case (version 3.1.2). This fine-tuning resulted in some changes in the total figures. 

60 The current budget for IT capacity building in the Customs 2020 programme amounts to 426 million euro for 
a seven-year period. This corresponds to an average yearly budget of about 61 million euro. 

53 

 
 
                                                      
Figure 7 – Projected budgetary needs from a ‘Value Stack Perspective’ versus three potential budgetary scenarios 

)
r
a
e
y
/
€
M

(

s
d
e
e
N
y
r
a
t
e
g
d
u
B
d
e
t
c
e
j
o
r
P

18 0,00

16 0,00

14 0,00

12 0,00

10 0,00

8 0,00

6 0,00

4 0,00

2 0,00

 ,00

2015

2016

2017

2018

2019

2020

2021

2022

2023

2024

2025

2026

2027

2028

2029

2030

MS New Projects

MS ICS2 Opt In's

,00

,00

,00

,00

,00

,00

,00

,00

2,400 3,300 4,700 7,600 9,300 1 1,400 1 3,300 1 5,00 1 6,700 1 8,400

1,00

1,200 1,200

1,00

,300

8,900 8,900 2 1,900 1 9,300 1 9,300 2 1,200 2 1,200 2 1,200 2 1,200 2 1,200

,300

,300

,400

,400

,400

,400

,400

,400

,400

,400

MS National Decisions & Trader Portal 2,100

,700

1,300

,400

,400

EU New Projects

EU ICS2 & CRMS

EU UCC After 2020

,00

,00

,00

,00

,00

,00

4,600 6,400 9,100 1 4,700 1 8,00 2 2,100 2 5,900 2 9,200 3 2,500 3 5,800

1,300

1,00

3,400 5,200 4,400 3,200 2 7,600 2 7,600 2 8,800 2 5,00 2 5,00 2 1,100 2 1,100 2 1,100 2 1,100 2 1,100

5,400 4,700 6,700 8,800 9,600 9,600 1 1,600 1 1,400 7,800

8,00

7,500

7,00

6,600 6,600 6,500 5,600

EU International Projects

,100

,100

1,100 2,200 2,300 2,400 1,500 1,300 1,400 1,400 1,400 1,500 1,500 1,500 1,500 1,500

EU UCC Up To 2020

EU Legacy 2017

Budget EU27

Budget EU27 - 30%

Budget As Per Needs

2 4,00 1 9,00 1 6,500 2 1,100 1 9,100 1 6,900 2 3,100 1 8,900 1 8,500 1 8,600 2 1,200 1 5,600 1 5,600 1 5,600 1 8,300 1 5,700

3 0,100 3 7,800 4 0,00 3 8,900 3 4,900 3 4,300 3 4,600 3 3,800 3 5,600 3 5,800 3 5,400 3 4,300 3 4,300 3 4,300 3 3,800 3 4,500

6 0,897 6 0,897 6 0,897 6 0,897 6 0,897 6 0,897 5 1,763 5 1,763 5 1,763 5 1,763 5 1,763 5 1,763 5 1,763 5 1,763 5 1,763 5 1,763

6 0,897 6 0,897 6 0,897 6 0,897 6 0,897 6 0,897 3 6,234 3 6,234 3 6,234 3 6,234 3 6,234 3 6,234 3 6,234 3 6,234 3 6,234 3 6,234

6 3,200 6 3,400 7 0,00 7 7,800 7 1,900 6 7,900 11 4,60 11 1,90 12 8,00 13 0,70 13 7,30 13 4,50 13 9,90 14 4,90 15 1,90 15 4,30

Source:  Customs  IT  capacity  building  needs  against  the  budget  scenarios  in  the  draft  concept  paper,  addendum  to  ARES  (2017)  3166390  –  ARES  (2017)  344109

54 

 
 
 
 
 
 
The  figure  enabled  DG  TAXUD  to  draw  some  clear  conclusions  with  respect  to  what 
elements  of  the  ‘Customs  Value  Stack’  could  be  financed  in  each  of  the  three  budgetary 
scenarios: 

  Under the second scenario (reduction of the reference EU27 budget with 30%), only 
the 2017 legacy systems could be continued. All other developments and operations 
would need to be stopped, resulting in an estimated write-off of EUR 165 million of 
investments  and  operational  costs  incurred  under  the  Customs  2020  programme. 
This  scenario  would  not  allow  the  deployment  of  any  UCC  system  or  international 
project, as well as leave no possibility for on-boarding new projects; 

  Under  the  first  scenario  (EU27  Reference  Scenario),  the  2017  legacy  systems,  the 
UCC systems up to 2020 and the international projects could be continued. However, 
any  developments  and  operations  related  to  the  UCC  after  2020,  the  ICS2  system 
and the new projects would need to be stopped, resulting in an estimated write-off 
of  about  EUR  61  million  of  investments  and  operational  costs  incurred  under  the 
Customs  2020  programme.  This  scenario  would  basically  not  allow the deployment 
of any UCC TES or ICS2, as well as leave no possibility for on-boarding new projects; 
  Under  the  third  scenario  (budget  as  per  needs),  all  IT  expectations  of  DG  TAXUD 

would be covered. 

According to these fine-tuned projections, the EU IT capacity building would require a total 
budget of about EUR 1 058 million over the 2021-2030 period, whereas the Member States 
IT capacity building would need approximately EUR 290 million over the same period. This 
figures  lead  to  a  total  budgetary  need  of  EUR  1  348  million  over  the  2021-2030  period, 
entailing a share of approximately 22% for assisting the Member States in reducing their IT 
burden. 

2.3.3 State of play of the Human Competency Building 

HCB is the third pillar of the Customs 2020 programme. According to Art. 7(c), this pillar is 
defined  as  “common  training  actions  to  support  the  necessary  professional  skills  and 
knowledge relating to customs”.61 

HCB  is  key  to  not  only  build  but  also  maintain  up-to-date  the  administrative  capacity  of 
customs administrations. Customs administrations are required to conduct their missions in 
a  global  context  with  a  fast  changing  nature  of  trends,  risks  and  threats  to  address.  Such 
environment  requires  hence  “a  high-performing,  connected,  agile  and  future-proof 
European community of customs […] professionals”.62 Therefore, the programme needs to 

61 Art. 7(c), Regulation (EU) No 1294/2013. 

62 European  Commission,  Boosting  customs  and  tax  performance  in  the  EU  through  training  and  staff 
http://data.consilium.europa.eu/doc/document/ST-5488-2018-REV-
development, 
1/en/pdf 

SWD(2018)34final/2, 

55 

 
 
                                                      
provide  the  necessary  education,  learning  and  staff  development  to  ensure  that  customs 
staff is well equipped to cope with their duty in such challenging environment. 

In this sense, the European Commission adopted the so-called Dublin Strategy of 2012 on “A 
Strategic  Performance  Framework  for  the  Customs  Profession  2012-2015  through  training 
and  development”63,  providing  the  basis  for  the  HCB  activities  funded  under  the  Customs 
2020 programme.  

Based on the success of the strategy, the  European Commission launched the EU Learning 
and Development Action Plan for Customs and Taxation 2017-2020.64 The goal of this action 
plan is to contribute to the optimisation of both current and future education and learning 
capacity of customs and tax administrations. In particular, the action plan targets four key 
activity  strands.  The  European  Commission,  together  with  the  Member  States  as  well  as 
other  stakeholders,  attempt  to  achieve  these  objectives  by  launching  14  initiatives  under 
the action plan. 

Table 5 – Overview of the EU Action Plan for Customs and Taxation 2017-2020 

Key Activity Areas (KAA) 

Initiatives 

Providing EU reference standards 
through European Competency 
Frameworks for the customs and tax 
professions 

Supporting common customs/tax 
educational reference programmes 
(vocational, academic, leadership) 

1.  Developing  an  EU  Tax  Competency  Framework 
(CFW) 

2. Providing for an EU Customs CFW (maintenance and 
evolution) 

3. Supporting implementation of EU CFWs for Customs 
and Tax professions 

4.  Introducing  EU  recognition  of  customs  academic 
study programmes 

Providing 

5. 
programmes (vocational/academic level) 

common 

educational 

reference 

6.  Supporting 
training (limited) 

strategic 

leadership  development 

7.  Proving 
localisation 

for  EU  e-Learning  development  and 

Fostering shared training and staff 
development 

8. Driving Learning innovation 

9.  Delivery  of  annual  Common  Learning  Event 
Programs (CLEP) 

63 See:  "The  Dublin  Strategy,  A  Strategic  Performance  Framework  for  the  Customs  Profession  2012-2015 
through 
development, 
http://ec.europa.eu/taxation_customs/sites/taxation/files/common/tenders_grants/tenders/resources/2015_
ao_01/a11_dublin_strategy.pdf  

training 

and 

64 European  Commission,  Boosting  customs  and  tax  performance  in  the  EU  through  training  and  staff 
development. 

56 

 
 
                                                      
Enhancing common training 
infrastructure, networking and 
communication 

10. Developing common educational material 

11. Providing a common learning infrastructure 

12. Fostering virtual networking 

13.  Fostering  enhanced  training  cooperation:  Public-
Private/Public-Private-Academic/with 
international 
institutions 

14.  Providing  for  communication  and  publication 
support 

Source: EU Action Plan for Customs and Taxation 2017-2020 

The European Commission allocated up to EUR 1 745 000 in the 2017 Working Programme 

to  HCB.  In  total,  all  the  activities  falling  under  this  heading  count  for  up  to  5%  of  the 

Customs  2020  programme  budget.  The  following  subsection  provide  a  more  in-detail 

overview of the four key action areas and their initiatives. 

KAA1:  Providing  EU  reference  standards  through  European  Competency  Frameworks  for 
the customs and tax professions 

In order to develop training actions, the basis must be a common understanding of what are 
the  professional  skills  needed  and  what  is  the  type  of  knowledge  customs  officials  should 
have  in  the different  domains.  For this  reason,  DG  TAXUD  developed first  a  Customs  CFW 
(both  for  the  public  and  the  private  sector)  composed  of  core  values,  common 
competencies, and some specific customs competences.  

Figure 8 – Customs Competency Framework 

Source: https://ec.europa.eu/taxation_customs/eu-training/eu-customs-competency-framework_en 

Hence,  this  CFW  represents  the  efforts  made  by  the  European  Commission  for  setting  a 
common  ground  and  understanding  of  the  skills  required  by  customs  officials  all  over 
Europe. Nonetheless, the following challenges should be considered: 

  The  Customs  CFW  was  built  in  a  good  and  sound  manner.  However,  the  Customs 
field  is  in  perpetual  evolution.  Therefore,  it  is  important  to  keep  the  Competency 

framework up-to-date to ensure its relevance and added value. 

  In addition to the abovementioned attention point, it is important to notice that the 

57 

 
 
 
adoption of the framework is not compulsory for the Member States. Some of them 

adopted  it,  entirely  or  partially,  while  some  other  did  not.  This  clearly  leads  to 

substantial differences in the competency levels of customs agents, in function of the 

Member  State, 

impacting  thus  the 

important  harmonization  and  alignment 

objectives. 

Despite  these  challenges,  the  development  of  a  common  Competency  Framework  has 
clearly  led  to  the  development  of  several  relevant  customs  curricula  covering  three  main 
areas and linked back to each existing customs functions: 

  European Customs IT systems; 
  Customs equipment; 
  Customs administration.  

The  harmonisation  of  competencies  is  key  in  order  to  establish  and  promote  operational 
staff development methods and performance in the participating counties. Although the EU 
Customs  CFW  has  already  been  developed,  further  support  is  needed  to  apply  in  some 
countries  as  noted  by  the  Action  Plan.  In  this  sense,  the  second  implementation  support 
cycle allows for systematic support provision to national administrations through EU events, 
country-specific  support,  and  CLEP  trainings.  In  addition,  the  framework  needs  to  be 
maintained and evolve in order to ensure its high quality. In this sense, an in-depth revision 
of the EU Customs CFW is foreseen (“Skills forecast 2030”).  

KAA2:  Supporting  common  customs/tax  educational  reference  programmes  (vocational, 
academic, leadership) 

In  order  to  complete  the  EU  Customs  CFW,  there  is  a  need  to  support  levelled  customs 
education  programmes  at  vocational,  academic  and  strategic  leadership  and  management 
level. 

For  this  purpose,  the  European  Commission  aims  at  elaborate  an  EU  recognition  schemes 
for customs specific training programmes (based on the EU Customs CFW). The EU Customs 
Recognition  concept  finalisation  for  BA  /  MA  study  programmes  has  been,  however, 
postponed to 2018. 

Under  this  key  activity  area,  the  European  Commission  also  aims  to  provide  a  common 
educational  reference  programmes  at  vocational  and  academic  level.  This  would  refer  to 
both  development  and  maintenance.  In  addition,  the  European  Commission  would  also 
support national strategic leadership and management development training.  

KAA3: Fostering shared training and staff development 

In order to increase the collaboration and alignment between Member States, the Common 
Learning  Events  Program  (CLEP)  was  launched  in  2014.  It  aims  at  providing  a  platform 
designed to  identify  and  plan  selected  training  events  organised  by  participating  countries 
under both Customs and the Fiscalis 2020 programmes. The table below shows the types of 

58 

 
 
trainings that were organised under CLEP for the first four years of the programme, as well 
as those planned for the coming year. 

Table 6 - 2014-2018 Trainings under CLEP 

Description 

Organiser 

Date 

Title 

2018 

EUSECTRA 

Training 
handlers 

for  dog 

EU Customs CFW 

Detection  of  radioactive 
and 
nuclear 
materials  –  Basic  training 
session 

other 

and 

Other 
Tobacco 
Selected 
Substances' 
Detection  Techniques  for 
Canine Service 

to 
Support 
EU 
implementation 
Customs CFW for Beginner 
countries 

of 

Car Search 

Car Search training 

BTI 

EUSECTRA  

EUSECTRA  

Mobile 
controls/action 
tactical training 

EU Customs CFW 

EU Customs CFW 

EU Customs CFW 

seminar 

Classification 
(Chapter 84-85) 
Detection of radioactive 
and other nuclear 
materials - 

Train the trainer session 
Detection of radioactive 
and other nuclear 
materials - 

Advanced level session 

Practical  training  on  how 
to train the mobile control 
customs officers 

Support 
implementation 
CFW 
Customs 
Advanced countries 

of 

to 
EU 
for 

to 
Support 
implementation 
EU 
Customs CFW for Beginner 
countries – follow-up 

of 

Support 
implementation 
Customs 
Advanced 

of 

to 
EU 
for 
countries– 

CFW 

DG TAXUD 

19-23/03/2018 

Czech Republic 

19-22/03/2018 

DG TAXUD 

19-20/02/2018 

Finland 

Belgium 

DG TAXUD 

13-16/02/2018 

TBC 

TBC 

DG TAXUD 

TBC 

Hungary 

Q2 2018 

DG TAXUD 

Q2 2018 

DG TAXUD 

S2 2018 

DG TAXUD 

S2 2018 

59 

 
 
follow-up 

Analysis of X-ray images 

Germany 

Analysis of X-ray images 

Germany 

Tackling  avoidance  and 
transfer  pricing  -  customs 
valuation 
transfer 
and 
pricing 

Latvia 

TBC 

TBC 

TBC 

Cargo/luggage  X-
ray control 

Large-size 
scanners 
analysis 

X-ray 
images 

Tax  and  customs 
avoidance  

2017 

Passenger control 

Passenger 
directed interviews 

profiling-

Czech Republic 

22-24/03/2017  

Car Search 

Car Search training 

Finland 

Online  material 
development 

how 

Training 
to 
on 
develop  On-line  training 
material  on  the  MOODLE 
platform 

Hungary 

2016 

Train  the  EU  -  On 
line trainer 

Blended  Learning 
(BL) 2.0 

Austria 

Sweden 

for 

Methodology 
On-Line-Trainers 
webinars 

future 
in 

practice 

Best 
workshop 
methodologies 
training 
(Customs) 

on 

sharing 
BL 
and 
techniques 

From CCC to UCC 

Legislative 
changes 
following  to  the  adoption 
of the UCC 

Germany  

Fighting 
olive oil fraud  

against 

Analysis  of  samples  of 
olive oil 

Italy 

(DELIVERED) 

13-16/06/2017 

(DELIVERED) 

19-22/09/2017 

(DELIVERED) 

2-5/02/2016  

(DELIVERED) 

25-26/05/2016 

(DELIVERED) 

5+6/10/ 2016 

(DELIVERED) 

6-7/12/2016 

(CONFIRMED) 

28-29/10/2015  

(DELIVERED) 

2015 

Passenger  control 
profiling 

International 
webinar 

2014 

Blended  learning  training 
for  experienced  customs 
control staff. 

Italy 

Description  of  impact  that 
emerging 
IT  trends  can 
have on Tax & Customs  

The Netherlands  

1/09/2015  

(DELIVERED) 

60 

 
 
  
 
 
X-ray inspection 

sharing 
practice 
Best 
workshop in the field of X-
Ray screening. 

Poland 

16-18/09/2014 

(DELIVERED) 

Car search 

Car  search 
trainers  

training 

for 

Austria 

28-31/10/2014 

Source: Common Learning Events Programme (CLEP), Annual Work Plan 2018 

The  CLEP  programme  is  recognised  by  Member  States  as  very  successful  and  the  demand 
for these types of trainings is increasing steadily. 

Similarly, UCC e-Learning and e-Learning for customs officials have also known a very good 
success.  The  European  Commission  has now developed more than 40  e-Learning  available 
with a free access on the website. So far, the trainings have been developed in collaboration 
with  a  pool  of  70  customs  experts  from  national  administrations  and  the  private  sector. 
Particular  efforts  were  put  in  “further addressing  the  feedback  received  from  previous 
courses such as technical compatibility (the courses run also on IOS and mobile devices), the 
availability of a print out (a printable course summary has been added), the course length 
(the programme has been designed to cover courses from 60 to 90 minutes maximum) and 
timely  availability  (the  course  development  process  has  been  reengineered  to  reduce 
considerably the development period65”. 

There are trainings targeting the public sector and others targeting economic operators. The 
three levels of UCC e-Learning for instance target both. The 3 different levels cover different 
topics: 

  Level 1 provides an overview about what the UCC is bringing and focusses on the key 
features,  the  impact  on  customs  administrations  and  trade  and  the  transitional 
measures in place to move from CCC to the new UCC. 

  Level  2  provides  fundamental  knowledge  and  describes  the  procedures  for  each 

specific customs domain as defined by the UCC. 

  Level  3  will  provide  more  expert  knowledge  and  practical  applications  on  specific 

topics, including the use of IT systems as detailed in the MASP. 

The specific contents of levels 1 and 2 of the UCC e-Learning are shown in the picture below.  

65 European Commission, Customs 2020 programme – Progress Report 2015. 

61 

 
 
                                                      
 
Figure 9 – UCC e-Learning 

Source: End 2016 – EU Training & HCB status fiches, UCC e-Learning Programme, non-published document 

The UCC e-Learning are very popular amongst economic operators and universities and the 
Level  1  of  the  training  has  already  been  translated  in  the  21  official  EU  languages.  The  e-
Learning  modules  are  also  very  appreciated  by  customs  officials  as  they  concern  very 
specific aspects of their work, such as the newly developed UCC IT systems or border control 
procedures to be implemented.  

According to the latest available data, the most popular e-Learning courses are: Car Search 
(724  trainees  in  2017),  SAMANCTA  (639  trainees),  intellectual  property  rights  (IPR)  (468 
trainees),  and  Container  Examination  (234  trainees).66 In  total,  approximately  23  685 
officials  were  trained  in  2016  using  common  training  material  of  the  Union.67 The  overall 
feedback received by the European Commission on these different trainings is very positive, 
with a 76.2 scoring (out of 100) in average based on the Kirkpatrick training scale. 

KAA4: Enhancing common training infrastructure, networking and communication 

The  European  Commission  aims  at  providing  a  common  learning  infrastructure  to  help 
maximising  EU-wide  common  and  cross-country  training  collaboration.  Such  EU  learning 
portal would provide “the longer-term opportunity to be further developed into a full-scale 
professional customs and tax knowledge management tool (after 2020)”68. In addition, the 
European  Commission  aims  at  fostering  virtual  networking  by  promoting  the  use  of 

66 European Commission. 

67 European Commission, Customs 2020 programme – Progress Report 2016. 

68 European  Commission,  Boosting  customs  and  tax  performance  in  the  EU  through  training  and  staff 
development. 

62 

 
 
 
                                                      
technologies such as videoconferencing and other kinds of virtual interactions (e.g. Skype). 
The Action Plan also refers to enhance training cooperation with trade and academia as well 
as with international organisation institutions (such as: World Customs Organisation (WCO), 
Organisation for Economic Co-operation and Development (OECD), European Union Agency 
for  Law  Enforcement  Training  (CEPOL)).  The  European  Commission  also  recalls  the 
importance  of  communication  campaigns  to  improve  the  image  of  taxation  and  customs 
towards the public, trade, learning providers and within the public sector. 

Learning innovations 

During  the  year  2017,  the  European  Commission  has  launched  innovation  in  the  field  of 
Human Competency Building: 

  Pilot  Project  for  the  European  Parliament  on  tax  education:  this  initiative  currently 
concerns tax education for children and therefore falls in the domain of Fiscalis, but 
similar pilot initiatives can be run under the Customs 2020 programme. The material 
produced  under  this  pilot  are  8  e-Learning  modules  (4  for  teens,  and  other  4  for 
young  adults),  12  micro-learnings  (264  video  clips  in  22  EU  languages),  and  3-level 
simulation game. 

  Concept  for  EU  webinar  for  training  project:  this  project  started  in  June  2017  with 
the support of a project group of 6 participants. The main conclusions of the concept 
paper prepared by the project group 

  First  EU  eBook  project:  DG  TAXUD  has  developed  its  first  eBook  on  Authorised 
Economic Operator (AEO). This new e-Learning tool is a digital resource that can be 
used to enrich e-Learning courses and is more sophisticated than a PDF document, 
as it includes assessments, videos, flowcharts, visualisation, and links.  

  First EU Massive Open Online Courses (MOOC) project: MOOC’s for customs and tax 
training  has  been  tested  under  the  EP  pilot  project  on  “digital  tax  education”.  The 
first MOOC is already in place on the MOOC platform Iversity. 

  First social media-based communication campaign. 

63 

 
 
  
3  Problem assessment 

This chapter introduces the refined problem tree and describes the different elements it 
contains.   

3.1 General overview of the problem tree 

The problem tree aims at identifying problems (including their drivers and effects) that are 
existing in the customs domain and are expected to be of relevance in a post-2020 context. 
Taking  also  into  account  the  prioritisation  of  the  problems  identified,  the  next  Customs 
cooperation programme, with its unique set-up of objectives and actions, will be developed. 

Based  on  the  European  Commission’s  review  of  the  first  draft  interim  report  and  our 
meeting  with  the  respective team  at  DG  TAXUD on  23  August  2017,  the problem  tree has 
been  re-designed.  As  discussed,  the  tree  is  now  structured  around  four  main  horizontal 
layers. These four layers, which should be read from the bottom to the top, are: 

  The  (general  and  specific)  trends  which  are  impacting  the  customs  landscape  and 

policy making; 

  The (problem)  drivers deriving from (and fed by) those trends, which are the factors 

that directly lie at the basis of the problem; 

  The main problem to be addressed by the Customs Programme;  
  The  (direct  and  indirect)  effects  of  the  aforementioned  problem  on  citizens,  traders 

and businesses and the EU itself.  

64 

 
 
Figure 10 - Problem tree 

Source: Deloitte elaboration 

65 

 
 
 
The  following  sub-sections  present  a  detailed  description  of  the  external  factors,  drivers, 
problems and effects presented in the problem tree. 

3.2 Trends  

In  a  fast  changing  global  environment,  a  possible  future  Customs  Programme    needs  to 
depart  from  the  most  important  general  and  global  trends that  shape  the  customs union’s 
strategic and operating environment of tomorrow as a whole. Next thereto, it needs to take 
into  consideration  cooperation  between  and  requirements  of  national  customs 
administrations. Through a combined approach of fact-finding desk research and interaction 
with  relevant  stakeholders  the  team  was  able  to  identify  and  further  deepen  the  relevant 
trends that will determine the customs environment in the post-2020 period.  

Throughout the inception phase and the early stage of the data collection phase, a number 
of  key  general  and  specific  trends  were  discussed  with  a  variety  of  stakeholders,  ensuring 
the  gathering  of  a  diverse  range  of  perspectives.  Stakeholders  consulted  include  different 
units  in  DG  TAXUD  and  other  European  Commission  entities,  as  well  as  international 
organisations (WCO) and business.  

In the survey used for this study, national customs administrations have assessed the extent 
to  which  customs  specific  trends  are  expected to  have  an  impact  on  their  activities  in the 
next  ten  years.  We  note  that  for  this  purpose  a  ‘trend’  was  defined  as  a  development 
impacting customs administrations. The answers collected can be summarized as follows: 

Service and compliance approach towards…

3

Trade facilitation and single window

1

Customs crisis anticipation, management and…

5

Data and Information

0

New technologies, equipment and digital…

eCommerce

Increased flows in trade and services

1

1

1

Increase in roles and responsibilities of…

5

Implementation of the UCC

2

EU 27

EU Customs image building

13

12

8

13

7

8

8

5

5

8

10

8

10

5

10

12

2

1

1

2

1

1

1

1

4

3

3

2

7

16

14

18

10

17

10

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

To small or some extent

To a considerable extent

N=25

To a great extent

Do not know or no answer

Figure 11 – Customs specific trends having an impact on customs administrations’ activities in the next 10 years 

Source: Deloitte elaboration  

66 

 
 
 
Implementation  of  the  UCC  is  most  frequently  mentioned  by  customs  administrations  in 
their top three of the trends that will create a challenge for their organisation in the coming 
ten years. Next to that, e-Commerce and data and information have been identified as the 
second and third sources requiring attention in the future. 

As  the  problem  tree  shows,  the  category  of  external  trends  is  divided  between  general 
trends  and  specific  trends  on  the  one  hand  and  in  three  different  clusters  (EU,  Core  and 
Other)  on the other  hand.  The  general  trends,  which  will be  elaborated below,  concern  in 
particular the following: 
  Changes in the EU 
  Comprehensive policy approach 
  Digitalisation 
  Globalisation 
  Terrorism, security and safety  
  Modernisation and transparency of public administration 

These general trends in their turn are at the basis of a number of specific trends relating to 
customs,  which  can  be  grouped  under  an  “EU”  cluster,  a  “Core”  cluster  and  an  “other 
influences” cluster. 

  “EU” cluster:  

Implementation of the UCC 

 
  EU 27 
  EU Customs image building  
  changing  roles  of  and 

administrations  

  “Core” cluster 

increasing  expectations 

towards  customs 

  Data and information 
  New technologies, equipment and digital supply networks 
  e-Commerce 
 
  Customs crisis anticipation, management and resilience 

Increased flows in trade and services  

  “Other influences” cluster 

  Trade facilitation and Single Window 
  Service and compliance approach towards clients  

While  the  general  and  specific  trends  are  organized  in  clusters,  in  reality  a  number  of 
specific  trends  can  be  linked  to  more  than  one  general  trend  (e.g.  e-Commerce  relates  to 
two  general  trends:  digitalisation  and  globalization).  When  this  is  the  case,  the  link  is 
explicitly mentioned in the section describing the specific trend.  

67 

 
 
 
 
 
3.2.1 The “EU” Cluster  
The trends identified under the EU cluster encompass general and specific trends that are at 
the heart of the European Union in its capacity of a political and economic union of different 
Member States. 

As such, the EU cluster contains: 

  The most important changes witnessed within the EU (General trend) such as (specific 

trends): 

  The implementation of the UCC; 
  The changes in the EU borders and the modifications to the customs union linked 

to the possible reduction of its members;  

  EU Customs image building, that is to say the visibility of the  customs union and 
the  ongoing  trends  towards  more  transparency  and  openness  to  other 
stakeholders 

  The cross-disciplinary approach in EU policy design or comprehensive policy approach 
(General trend), entailing the use of “packages” of coherent measures to encompass 
all aspects and angles of new challenges. This entails (specific trend): 

  Increasing role and responsibilities for customs administrations in non-traditional 
customs  areas  (such  as  Intellectual  Property  protection,  environment,  migration 
and REACH). 

Changes in the EU  

The EU is not, and has never been, standing still. As a political entity, the European Union is 
subject  to  evolution  and  changes  over  time  and  this  last  decade  has  been  particularly 
intense in this respect, seeing the adoption of the Lisbon Treaty followed by the economic 
and  migration  crisis  and  the  emergence  of  Euroscepticism.  Recent  political  events  also 
confirmed that the next decade will be equally dynamic in this respect and that the EU will 
probably experience changes that are even more radical.  

The  exit  of  the  UK  from  the  EU  is  a  never  before  seen  negotiation  process  of  which  the 
outcome and consequences at this point can only be guessed, even though most involved 
parties agree that they will have a significant impact on the EU and its citizens. 

On a global level terrorism, intra state and communal violence and geopolitical tensions are 
omnipresent. This state of affairs combined with the recent suggestions by the current US 
administration that the EU should become more independent on a military level may bring 
the EU to work on a European defence.  

Next thereto, undeniably the global political stage has gradually shifted from a dynamic of 
multilateral  collaboration,  partnership  and  trade  facilitation  to  one  where  protectionist 
measures have become a reality. As one of the major global economies, the EU will need to 
take  a  position  in  this  regards,  reconciling  its  political  vision  on  global  trade  and  the 
economic  interests  of  its  members  with  the  policy  implemented  by  other  parties  on  the 
global stage.  

68 

 
 
 
Towards the end of the current Multi-annual Financial Framework in 2020 negotiations and 
competition  will  ensue  between  different  political  stakeholders  to  secure  a  maximum 
amount of budget and will set the political priorities for the EU in the coming seven years.  

The  commitments  of  the  EU  to  climate  change  mitigation  in,  amongst  other,  the  Paris 
Climate Agreement will require great efforts from Member States, economic operators and 
EU citizens. New environmental rules and norms agreed upon at the international level will 
shape  the  future  of  global  trade  and  necessarily  impact  EU’s  Common  Commercial  Policy 
and customs union. 

An important factor will be how the EU decides to tackle future issues and set out its policy 
strategies. The White Paper on the Future of the EU69 recently presented a few scenarios for 
the coming years illustrating what the EU could look like in the future. The scenarios range 
from carrying on and continuing to operate within the scope of activities carried out today 
(Scenario  1)  to  doing  much  less  more  efficiently  (Scenario  4)  or  much  more  together 
(Scenario 5).  The possibility of  a  multi-speed  Europe  in  which  “Those  Who  Want More  Do 
More70- Scenario 3” is also envisaged, together with the idea of reducing the EU activities to 
the tasks related to the Single Market only (Scenario 2). Notwithstanding the scenario and 
direction chosen, which is still to be decided, the EU will face further structural changes in 
the future which are further described below. 

Implementation of the UCC 

Next to the geopolitical developments, legislative acts are also changing the EU landscape. A 
thorough review of the existing customs legislation71 (the Community Customs Code or CCC 
and its surrounding legal package) over a period of more than 10 years was concluded with 
the introduction of the Union Customs Code and its implementing provisions. The CCC was 
based  upon  integration  of  the  customs  procedures  applied  separately  in  the  respective 
Member  States  during  the  1980s.  That  Regulation  has  been  repeatedly  and  substantially 
amended in order to address specific problems such as the protection of good faith or the 
taking into account of security requirements. The legislator did not foresee that global trade 
would  evolve  ever  more  rapidly.  A  first  attempt  to  update  the  EU’s  key  legal  customs 
instrument was the Modernized Customs Code (MCC)72. As a consequence of the important 
legal changes which have occurred at both Union and international level, such as the expiry 

69 European  Commission,  White  paper  on 
the 
https://ec.europa.eu/commission/sites/beta-political/files/white_paper_on_the_future_of_europe_en.pdf   

future  of  Europe:  The  way  ahead,  2017, 

70 Ibid., page 20.   

71 Council Regulation (EEC) 2913/92 of 12 October 1992 establishing the Community Customs Code, http://eur-
(EEC) 
lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:31992R2913:en:HTML;  Commission  Regulation 
2454/93  of  2  July  1993  laying  down  provisions  for  the  implementation  of  Council  Regulation  (EEC)  2913/92 
establishing 
http://eur-lex.europa.eu/legal-
Customs 
content/EN/TXT/PDF/?uri=CELEX:01993R2454-20150501&from=EN 

Community 

Code, 

the 

72 Regulation (EC) 450/2008 of 23 April 2008 laying down the Community Customs Code (Modernized Customs 
Code), http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2008:145:0001:0064:En:PDF  

69 

 
 
                                                      
of the Treaty establishing the European Coal and Steel Community and the entry into force 
of the 2003, 2005 and 2011 Acts of Accession, the entry into force of the Treaty of Lisbon as 
well  as  the  amendment  to  the  International  Convention  on  the  simplification  and 
harmonisation  of  customs  procedures  (the  Revised  Kyoto  Convention),  in  replacement  of 
the MCC the Union Customs Code (UCC)73 was elaborated.  

With  the  entry  into  force  of  the  UCC,  fully  applicable  since  May  2016,  a  natural  evolution 
towards  a  modern  customs  environment  is  created  for  EU  countries,  making  European 
business  more  competitive  and  advancing  the  EU  strategy  for  growth  and  jobs.  More 
specifically, the UCC serves as the new framework regulation on the rules and procedures 
for customs throughout the EU. Built on the key drivers of simplicity, service and speed, the 
UCC aims to74:  

  Modernize  customs  legislation  and  procedures and  the  use  of  customs information 
systems  to  facilitate  doing  business  with  customs  and  ensure  the  safe  and  secure 
trade of goods in the EU; 

  Take into account the evolution of policies and legislation in other fields that might 

affect customs legislation, such as safety and security in the field of transport; 

  Make  customs  business  processes  more  streamlined  and  adequate  in  terms  of 

increased clarity and coherence of customs legislation; 

  Reduce  the  administrative  burden  for  economic  operators  through  the  use  of 
electronic procedures and storage facilities that will reduce reporting formalities and 
pave  the  way 
further  modernization  and  better  coordinated  border 
management; 

for 

  Fully align EU customs rules with global standards, as well as other international and 
global  developments  (including  developments  in  the  EU  major  trading  partners), 
which will facilitate and streamline trade, thus increase export opportunities for EU 
economic operators; and 

  Protect  EU  financial  resources  and  fraud-proof  European  customs  legislation  by 
closing  loopholes,  prevent  inconsistent  interpretation  and  application  of  rules  and 
provide  electronic  access  to  relevant  information  without  creating  an  additional 
burden for trade. 

Indeed,  the  UCC  aims  for  the  facilitation  of  safe  and  legitimate  trade,  a  paperless 
environment  for  customs  and  global  trade,  harmonization  and  standardization  of  customs 
procedures and controls. 

As  an  exclusive  EU  competence  (with  the  current  legal  bases  being  Art.  28  to  32  of  the 
Treaty of the Functioning of the European Union (TFEU), the EU customs union is based on 
the free movement of goods and a common external tariff towards third countries. Whereas 

73  Regulation  (EU)  952/2013  of  9  October  2013  laying  down  the  Union  Customs  Code,  https://eur-
lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:32013R0952&from=EN  

74 http://europa.eu/rapid/press-release_IP-16-1629_en.htm 

70 

 
 
 
                                                      
the EU is the only body entitled to legislate and to adopt binding acts in the area of (most 
aspects of) customs, the responsibility for implementing the customs legislation is primarily 
that  of  the  Member  States,  as  laid  down  in  Art.  291  of  the  Treaty.  As  foreseen  in  the 
Transitional Delegated Act and the UCC Work Programme, there are detailed rules regarding 
the transitional periods for implementation between May 2016 and end of December 2020. 
For  national  Governments  and  their  customs  administrations  throughout  the  European 
Union, the implementation of the substantive provisions of the UCC  is spread out between 
May 2016 and 31 December 202075. However, the European Commission communicated in 
January  2018  that  a  number  of  electronic  systems  cannot  be  fully  implemented  by  the 
deadline  of  2020  and  an  extension  to  the  deadline  for  the  continued  use  of  transitional 
arrangements in respect of these systems is foreseen to the end of 202576.  

Clearly, the results and benefits of the UCC will depend on the level of implementation and 
the  extent  to  which  implementation  happens  in  a  harmonized  and  consistent  way 
throughout Member  States.  In  this  regard,  the UCC  Implementing  Act  serves  as  a  basis  to 
“ensure  the  existence  of  uniform  conditions  for  the  implementation  of  the  UCC  and  a 
harmonized  application  of  procedures  by  all  Member  States”77.  Only  through  a  uniform 
understanding, implementation  and  application of  the  UCC  legal  package, the  goals of  the 
UCC and the benefits linked thereto can be reached. The current legal framework governing 
the EU customs union is depicted in the picture below.  

Figure 12 - Regulatory framework for customs policy 

of 

75 Commission  Delegated  Regulation  (EU)  2015/2446  of  28  July  2015  supplementing  Regulation  (EU)  No 
952/2013  of  the  European  Parliament  and  of  the  Council  as  regards  detailed  rules  concerning  certain 
provisions 
http://eur-lex.europa.eu/legal-
Customs 
content/EN/TXT/PDF/?uri=CELEX:32015R2446&from=EN ; Commission Delegated Regulation (EU) 2016/341 of 
17 December 2015 supplementing Regulation (EU) 952/2013 of the European Parliament and of the Council as 
regards  transitional  rules  for  certain  provisions  of  the  Union  Customs  Code  where  the  relevant  electronic 
systems  are  not  yet  operational  and  amending  Delegated  Regulation  (EU)  2015/2446,  http://eur-
lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:32016R0341&from=EN 

Union 

Code, 

the 

76 European  Commission,  Report  from  the  Commission  to  the  European  Parliament  and  the  Council  on  the 
Implementation  of  the  Union  Customs  Code  and  on  the  exercise  of  the  power  to  adopt  delegated  acts 
pursuant 
39, 
https://ec.europa.eu/taxation_customs/sites/taxation/files/docs/body/22012018_report_implementation_uc
c_en.pdf 

thereunder, 

COM(2018) 

284 

Art. 

to 

77 https://ec.europa.eu/taxation_customs/business/union-customs-code/ucc-legislation_en  

71 

 
 
                                                      
Source: Deloitte 

A  modernized  customs  framework  allows  customs  administrations  to  better  face  growing 
pressure as a result of tremendous growth in trade volumes and new ways of trading over 
the past 30 years. Customs administrations, in this changing context, have gained a leading 
and catalysing role in global supply chains, conscious of their ability to drive competitiveness 
of  businesses  importing  and  exporting  from  3rd  countries  or  within  the  customs  union 
Single  Market.  Whereas  citizens  benefit  as  consumers  from  safe  and  legitimate  trade, 
businesses operating in global supply chains are important beneficiaries of the EU customs 
policy  and  UCC  legislative  framework,  offering  simple,  rapid  and  standard  customs 
procedures and processes.  

However,  whereas  customs  administrations  are  at  the  forefront  of  dealing  with  this  new 
reality,  the  uniform  understanding,  implementation  and  application  across  the  EU  of  the 
modernizations  the  UCC  brings  (i.e.  electronic  customs  procedures  and  legislation)  is  far 
from  guaranteed.  There  is  a  risk  of  uneven interpretation  and  implementation  of  the  UCC 
legislation.  This  risk  is  closely  linked  to  the  other  driver  identified  in  the  problem  tree 
(uneven institutional capacity and different strategic priorities).  

The successful implementation of the UCC legal package cannot happen without providing 
for  the  necessary  resources  to  develop,  implement  and  support  the  relevant  IT  systems, 
which are absolutely critical. 

 Further  resources  should  be  made  available  for  strengthening  customs  cooperation 
between the Member States, and between Member States and the  European Commission. 
In  this  sense,  Art.  33  of  the  Treaty  provides  for  measures  in  order  to  strengthen  customs 
cooperation. 

The future Customs Programme, and the funds foreseen thereunder will have a crucial role 
to make the above happen, especially in the resource demanding area of IT.   

Despite  the  various  speeds  of  implementation  across  the  EU,  the  UCC  paves  the  way 
towards  a  harmonized  implementation  of  EU  customs  policy  and  increased  unity amongst 
Member  States.  This  agreed  way  forward  builds  on  the  shared  vision  that  enhanced 
collaboration is essential for customs administrations placed at the forefront in a globalized 
world, where businesses trade in global supply chains that are complex and interconnected. 

EU 27 

The  announced  withdrawal  of  the  United  Kingdom  from  the  EU  (commonly  referred  to  as 
Brexit) is undoubtedly a major change for the EU which will be shaping the next decade and 
the future outlook of the customs union and far beyond.  

As  a  result of the  “Brexit”  vote,  and therefore the triggering  of  Art.  50 TFEU,  a process  of 
negotiations between the European Union and the United Kingdom has started. Currently, 
the  outcome of  this  process  looks  very uncertain.  Whereas  negotiators will  need  to find  a 

72 

 
 
solution for the United Kingdom to end its full membership in the EU Single Market (and of 
the EU customs union), the implications for companies and citizens remain far from clear78.   

From  the  perspective  of  customs  administrations,  Brexit  is  believed  to  potentially  have  a 
significant impact on two important dimensions: 

  From an EU internal trade perspective, Brexit is the first major experience in terms of 
disentanglement  of  administrations,  which  have  been  working  under  the  same 
umbrella  (the  customs  union)  for  more  than  four  decades.  The  insecurities  flowing 
from Brexit relate inter alia to the continuation of the “four freedoms” under the EU 
Single  Market,  currently  enjoyed  by  both  British  and  other  European  citizens  and 
corporations,  including  the  freedom  to  invest,  sell  their  goods,  services  and  move 
labour (i.e. mobility) in other EU Member States. 

  From  an  EU  external  trade  perspective,  Brexit  entails  a  change  in  the  EU  external 
borders  and  in  the  geographical  area  of  the  customs  union,  the  United  Kingdom 
becoming  an  important  external  trading  partner  (with  a  corresponding  important 
trade flow) for the EU and vice versa;  

Looking at the customs and trade related implications of Brexit, there are several possible 
scenarios,  and  different  degrees  of  market  harmonization  possible.  Possible  future 
differences  in  regulatory  regimes  between  the  EU  and  the  UK  could  give  rise  to  tariff  and 
“non-tariff barriers” (such as differences in certification requirements, standards or rules in 
areas such as privacy or intellectual property rights) unless rules guaranteeing access to the 
Single Market are preferred and are agreed upon. On-going negotiations will provide more 
clarity, with the date for actual exit of the United Kingdom set for 29 March 201979. 

Since  its  establishment  in  1968,  the  borders  of  the  EU  have  known  many  changes 
considering  that  “at  each  subsequent  enlargement,  the  new  countries  also  joined  the 
customs  union,  reconciling  their  national  laws  with  the  Community  Customs  Code”80. 
However, this is the first time that the customs union shrinks and that a “new” external EU 
border comes into play changing the relationship between countries with very close ties and 
having  no  experience  of  external  borders  existing  between  them  in  the  recent  years.  In 
particular,  with  the  United  Kingdom  leaving  the  Custom  Union,  the  question  of  what  will 
happen  at  the  Irish  border  is  extremely  significant.  Ireland  and  the  United  Kingdom  have 
had very close ties and the situation is further complicated by the uncertainties linked to the 
validity  of  the  Good  Friday  Agreement  once  the  United  Kingdom  will  leave  the  European 
Union.  

Moreover,  the  EU  is  the  United  Kingdom’s  first  commercial  partner:  about  44%  of  United 
Kingdom  exports  in  goods  and  services  went  to  other  countries  in  the  EU  in  2016—£240 

78 https://www.ceps.eu/publications/brexit-customs-vision-%E2%80%93-frictions-and-fictions  

79  Deloitte  Customs  &  Global  Trade,  Potential 
https://www2.deloitte.com/be/en/pages/public-sector/articles/Potential-implications-of-Brexit-customs-and-
trade.htm 

Implications  of  Brexit:  Customs  and  Trade,  2017, 

80 European Commission, The EU Customs Union: protecting people and facilitating trade, ibid. 

73 

 
 
                                                      
billion out of £550 billion total exports81. Therefore, it is uncertain at this stage what will be 
the  consequences  of  Brexit  on  the  EU  trade  balance  and  which  trade  measures  will  be 
applied  to  the  United  Kingdom  once  the  negotiation  process  of  two  years  expires, 
depending on which kind of trade agreement will be reached, if any.  

For  economic  operators,  Brexit  entails  the  need  to  prepare  for  and  anticipate  on  the 
possible changes ahead. Whereas multinational enterprises may already have the required 
processes  and  systems  in  place  for  dealing  with  these  changes,  small  and  medium-sized 
enterprises  (SMEs)  that trade  with  the  United  Kingdom  may not be  fully  prepared to  deal 
with Brexit-related challenges, a.o. in the field of customs and trade.  

The uncertainties linked with Brexit regarding borders and trade have direct consequences 
on customs administrations.  Indeed, the United Kingdom customs administration will have 
to  extricate  itself  from  the  customs  union  and  its  complex  IT  environment  in  which  it  has 
been  operating  for  the  past  40  years.  This  will  not  happen  without  (financial  and  other) 
consequences for the United Kingdom and all other customs administrations. Nonetheless, 
it  is  very  difficult  to  establish  how  the  process  will  happen  and  which  challenges  and 
opportunities it will bring at this stage.  

What  is  certain,  is  that  all  these  changes  and  uncertainties  constitute  a  political  and 
historical context which will profoundly affect customs policies and customs administrations 
in Europe.  

With the pending Brexit, the EU needs to prepare itself for an increase in trade flows from 
and to a new third country. From a general business perspective, the least attractive post-
Brexit  situation  would  be  the  re-instalment  of  hard  borders  and  customs  duties,  entailing 
customs  formalities  and  checks  for  incoming  and  outgoing  goods,  which  will  become  a 
reality  if  in  the  end  parties  do  not  agree  on  a  new  trade  between  the  EU  and  the  United 
Kingdom in the period between now and March 2019. In connection to this the burden on 
customs  officials  will  depend  on  what  arrangements  are  made  with  regard  to  regulatory 
requirements such as safety/security/health standards and regulations (e.g. REACH) as well 
as the existence of new Mutual Recognition Agreements between the two trading partners 
and  the  establishment  of  trusted  trader  programmes.  In  case  increased  border  controls 
become inevitable, technology should be used to speed up the customs processing.82  

EU Customs Image Building 

EU image building in customs is the last specific trend associated with the General trend of 
Changes in the EU. The image building relates to the awareness of governments and other 
stakeholders in the EU (in general), regarding the role, work and achievements of customs 
administrations  in  the  changing  trade  and  security  environment  that  impact  upon  border 
management and the customs union as a whole. 

81 United Kingdom Office for National Statistics, Trade Statistics. 

82 C. Elphicke, Ready on Day One: Meeting the Brexit Border Challenges, July 2017, 17-24.  

74 

 
 
                                                      
The European Commission’s Better Regulation agenda83 has opened up more opportunities 
for  stakeholders  and  citizens  to  contribute  to  EU  policy  making.    In  the  framework  of  this 
better regulation, the European Commission has for instance improved and increased public 
involving  the  European  Commission,  stakeholders  and 
consultation.  Open  dialogue 
interested  parties  helps  to  ensure  that  existing  rules  and  proposals  for  new  rules  are 
designed to  keep pace with  the  reality  of  rapid  change.  The  purpose of  this  dialogue  is to 
enable  the  European  Commission  to  respond  faster  and  more  accurately  to  the  needs  of 
business, consumers and citizens in the EU. 

Survey results indicate that Member States generally consider that the EU customs union is 
functioning  quite  well  taking  into  account  the  situation  of  having  28  different  Member 
States independently implementing and applying the EU customs policy. It would be in the 
best interest of the EU to continue to raise more awareness about the tasks of customs and 
the  positive  effect  it  has  on  the  Union.  Customs  administrations  are  expected  to  take  up 
more and more responsibilities while at the same time the public does not really seem to be 
aware of the achievements of the customs union so far or the important role it has played in 
the development of the Single Market. The lack of visibility of the customs administrations' 
work and achievements has a negative impact on their political and consequently budgetary 
support.   

Comprehensive policy approach  

In  a  globalised  and  interconnected  world,  where  businesses  operate  through  global  value 
chains / digital supply networks84, there is a growing trend towards integration of different 
policy  domains,  as  well  as  an  integration  of  markets  and  enhanced  cooperation  between  
countries.  With  customs  being  part  of  the  trade  policy,  this  trend  is  recognized  to  gain 
importance over time and will be setting the scene in policy development also after 2020. 

From a policy perspective, different areas have become more and more interconnected over 
the  past  decade,  demanding  from  governments  a  more  integrated  approach  to  tackle 
barriers  and  improve  business  environments.  Very  often,  a  specific  policy  objective  (e.g. 
ensuring the safety of products entering the Single Market) cannot be confined to the realm 
of a single policy domain as it touches upon multiple dimensions. customs administrations 
have become more and more engaged in the protection of important policies such as health 
and safety legislation, environmental policy, intellectual property protection, and consumer 
protection.  They  act  as  a  first  line  of  defence  against  influences  from  foreign  parties.  This 
also  means  that  other  public  administrations  are  involved.  The  relevance  of  customs 
(confined to the control of goods) in the broader concept of external border management – 
including  for  instance  the  protection  of  the  single  area  without  internal  border  checks 
(Schengen Area) for people coming from third countries – has become apparent in the wake 
of  the  migration  and  terrorism  related  developments  of  the  past  years,  with  integrated 

83  European  Commission,  Better  Regulation  Guidelines  and  Toolbox,  https://ec.europa.eu/info/better-
regulation-guidelines-and-toolbox_en 

84 This will be elaborated under the next trend ‘globalisation’. 

75 

 
 
                                                      
border  management  becoming  the  standard85.  Similarly,  customs  administrations  are 
increasingly involved in crisis management strategies, with the purpose of reacting quickly 
to crises posed by exceptional security situations (e.g. acts of terrorism, sanitary / veterinary 
/ phyto-sanitary / environmental incidents)86. 

No  policy  can  be  seen  in  isolation  from  other  competencies  of  the  EU  and  must  be 
considered  as  embedded  in  a  more  comprehensive  response  of  the  EU  to  wider  policy 
challenges.  Rather  than  acting  as  a  separate  administration,  the  (EU)  administrations  are 
considered  as  ‘one’  and  there  is  an  increasing  demand  to  act  as  such.  This  general  trend 
towards a comprehensive approach of customs including different EU policies also results in 
more  alignment  and  integration  between  the  customs  administrations  and  other  public 
administrations such as the Ministries of Finance, Taxation, Health, Defence, Foreign Affairs, 
Internal  Affairs,  Economy  and  Mobility  within  and  across  the  Member  States,  as  different 
skills  and  competences  are  needed  to  achieve  these  overarching  and  multi-sectoral 
objectives. 

Increase in roles and responsibilities for customs administrations 

To  showcase  to  what  extent  Customs  is  taking  a  more  comprehensive  approach  in  its 
policies  we  need  to  look  at  the  legal  framework  behind  customs  operational  activities. 
Besides  the  UCC,  about  60  pieces  of  legislation  concerning  different  topics  have  been 
introduced  at  EU  level,  expecting  from  customs  administrations  that  these  rules  are 
enforced in an equally harmonized manner throughout the EU. The rules cover (inter alia) 
the following Regulations:  

intellectual property rights (IPR) enforcement87; 

 
  cash controls88; 
  drug precursors89; 

85 As defined by the European Parliament as “National and international coordination and cooperation among 
all the relevant authorities and agencies involved in border security and trade facilitation to establish effective, 
efficient and coordinated border management, in order to reach the objective of open, but well controlled and 
secure borders”. 

https://ec.europa.eu/neighbourhood-
enlargement/sites/near/files/neighbourhood/pdf/riga/20150518_flagship_ibm.pdf  

86  In  2010,  an  EU  customs  crisis  management  network  was  set  up:  http://eur-lex.europa.eu/legal-
content/en/TXT/?uri=CELEX%3A52011DC0922  

87  Regulation (EU)  No 608/2013 of the European Parliament and of the Council  of 12 June 2013 concerning 
customs  enforcement  of  intellectual  property  rights  and  repealing  Council  Regulation  (EC)  No  1383/2003, 
http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2013:181:0015:0034:en:PDF.  The  most  recent 
data in this regard can be consulted in the recent report published by the European Commission on customs 
borders, 
enforcement 
https://ec.europa.eu/taxation_customs/sites/taxation/files/report_on_eu_customs_enforcement_of_ipr_at_t
he_border_2017.pdf  

IPR 

EU 

of 

at 

88 Regulation  (EC)  No  1889/2005  of  the  European  Parliament  and  of  the  Council  of  26 October  2005  on 
http://eur-lex.europa.eu/legal-
controls 
content/EN/TXT/PDF/?uri=CELEX:32005R1889&from=EN 

Community, 

entering 

leaving 

cash 

the 

or 

of 

76 

 
 
                                                      
  cultural goods90; 
illicit trade in wildlife91; 
 
  external trade competences. 

It is important to note here that, although customs administrations are strongly involved in 
the  negotiation,  implementation,  and  of  course  enforcement  of  these  other  policies  and 
rules, they generally do not see their resources increased92.The comprehensive approach to 
policies, which can be witnessed as a general trend, specifically leads to: 

  changing  and  broadening  of  roles  of  and  increasing  expectations  towards  customs 

administrations. 

This will be demonstrated referring to some examples of multidisciplinary topics, such as IPR 
protection,  the  illicit  trade  in  cultural  goods,  environment  and  climate  change,  external 
trade competences and digital economy. 

Intellectual property protection 

Since 2014 a new EU regulation is “setting out the conditions and procedures for action by 
the  customs  administrations  where  goods  suspected  of  infringing  an  intellectual  property 
right are, or should have been, subject to customs supervision or customs control within the 
customs  territory  of  the  Union”93. Customs  enforcement  of  intellectual  property  already 
exists  since  1986,  but  since  the  beginning  of  the  2000s  a  continuous  rise  took  place  of 
counterfeit  goods  coming  into  the  EU,  which  has  increased  the  focus  for  customs  on  this 
topic. Since 2009, applications for actions with customs against believed IPR infringements 
has increased constantly. Due to the increased enforcement, over the last few years (since 
2014)  detentions  seem  to  decrease94,  ultimately  ensuring  EU  companies’  competitiveness 

89 Regulation (EC) No 273/2004 of the European Parliament  and of the Council  of  11 February 2004 on drug 
precursors, 
http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2004:047:0001:0010:EN:PDF; 
Regulation (EC) No 111/2005 of the European Parliament and of the Council of 22 December 2004 laying down 
rules  for  the  monitoring  of  trade  between  the  Union  and  third  countries  in  drug  precursors,  https://eur-
lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:32005R0111&from=EN; 
http://ec.europa.eu/enterprise/sectors/chemicals/documents/specific-chemicals/precursors/ 

90 Council  Regulation  (EC)  No  116/2009  of  18  December  2008  on  the  export  of  cultural  goods,  http://eur-
lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2009:039:0001:0007:en:PDF; 
(EC) 
1210/2003  of  7  July  2003  concerning  specific  restrictions  on  economic  and  financial  relations  with  Iraq  and 
repealing 
http://eur-
lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2003:169:0006:0023:En:PDF;    Council  Regulation  (EU)  No 
36/2012  of  18  January  2012  concerning  restrictive  measures  in  view  of  the  situation  in  Syria  and  repealing 
Regulation 
http://eur-
lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2012:016:0001:0032:EN:PDF 

  Council  Regulation 

442/2011, 

regulation 

2465/96, 

(EU) 

(EC) 

No 

No 

91 As governed by CITES, www.cites.org  

92 This will be elaborated under the trend ‘doing more with less’. 

93 Art. 1, Regulation (EU) No 608/2013, ibid. The regulation become applicable as of 1 January 2014.  

94 European Commission, Report on EU Customs Enforcement of Intellectual Property Rights, ibid.  

77 

 
 
 
                                                                                                                                                                     
and  innovation.  In  conformity  with  this  regulation,  EU  customs  administrations  in  2016 
“made over 63 000 detentions, consisting of a total of 41.3 million articles”95. The domestic 
retail value of the detained articles represented more than EUR 672 million. 

Risk  assessments  are  followed  by  controls,  detention,  destruction,  release  or  initiation  of 
court  cases.  For  a  proper  risk  assessment,  customs  also  needs  to  work  closely  with  right-
holders  who  submit  an  application  for  action  in  which  they  ask  customs  to  protect  the 
intellectual  property  right  mentioned  in  such  request.  Customs  will  grant  or  refuse  such 
application for action96. These findings offer an understanding of the work customs have to 
undertake in the area of IPR protection. The fact that holders of an IPR can submit a Union 
application  (which  entails  a  request  by  the  holder  that  the  customs  administrations  of 
several  Member  States  take  action  in  their  respective  Member  States)  also  requires  the 
different  national  customs  administrations  to  coordinate,  cooperate  and  share  knowledge 
or  data.  In  that  behalf  the  applications  for  action  are  registered  in  the  anti-counterfeiting 
and anti-piracy information system called COPIS by which the information in the application 
is automatically shared between all Member States. The decision of the Member State that 
granted the application is then accepted by all other Member States.  

The European Commission came to the conclusion that the Regulation concerning customs 
enforcement  of  intellectual  property  rights  is  functioning  satisfactorily  in  general  and  that 
no  revisions  need  to  be  made.  Overall,  it  provides  for  a  wide  range  of  protection  and 
procedures  which  are  correctly  used  across  the  28  Member  States.  In  its  report,  the 
European  Commission  does  indicate  that  while  the  Regulation  works  well,  some  gaps  and 
insufficiencies remain. Some efforts can be made in certain Member States to improve the 
correct  application  of  information  and  procedures  in  the  Applications  for  Action  (AFA)  in 
order  to  reach  consistent  levels  of  implementation  of  the  Regulation  in  the  EU.  These 
differences are often the result of the quality or quantity of human  resources involvement 
in  a  customs  administration.  This  will  depend  on  the  level  of  priority  given  to  IPR  in  a 
Member  State,  the  number  of  AFAs  received  at  national  level  and  the  organisation  of  the 
IPR competent customs department97.  

Illicit trade in cultural goods 

95 Also in 2016, 3 040 national applications for action and 1 179 Union applications for actions were submitted 
to  customs  administrations  by  right-holders,  which  continues  the  upward  trend  of  the  last  years.  China 
remains  the  most  important  country  of  provenance  for  counterfeit  goods,  but  also  Singapore,  Hong  Kong, 
Turkey and India continue to be important and intellectual property infringements vary from trademarks and 
copy right to patents and geographical indications misuse. 

96 European Commission, Report on EU Customs Enforcement of Intellectual Property Rights, ibid.  

97 European  Commission,  Report  from  the  Commission  to  the  European  Parliament  and  the  Council  on  the 
http://eur-lex.europa.eu/legal-
(EU)  No 
Council 
implementation 
content/EN/TXT/PDF/?uri=CELEX:52017DC0233&from=EN  

Regulation 

608/2013, 

of 

78 

 
 
                                                      
 
A  new  proposal  addressing  the  import  in  the  Union  of  illicit  cultural  goods  from  third 
countries has been adopted by the European Commission on 13 July 201798. The proposal 
for a Regulation extends the scope of EU legislation on cultural goods which currently only 
covers the export of EU cultural goods (Regulation 116/2009) and the prohibition of imports 
from Iraq and Syria (Regulations 1210/2003 and 36/2012, respectively). The main features 
of the draft Regulation are the establishment of a licencing system for the import of certain 
categories  of  cultural  goods  which  are  considered  particularly  endangered  and  also  a 
potential  source  of  terrorist  financing,  and  the  submission  of  signed  statements  by 
importers  to  customs  for  the  categories  of  less  sensitive  cultural  goods.  The  new 
competences  may  require  the  development  of  an  electronic  database  system  for  the 
storage  and  exchange  of  information  between  customs  administrations  and  competent 
(cultural) administrations in the Member States and the submission of documents online by 
operators,  as  well  as  appropriate  training  for  customs  officials  to  implement  these  new 
provisions. 

Environment and climate change  

An important policy consideration that is likely to grow even more in importance after 2020 
is  the  environment  as  a  whole,  and  climate  change  more  in  particular.  Preventing 
dangerous  climate  change  is  a  key  priority  for  the  EU.  The  challenges  of  climate  change 
relate  to  ensuring  the  security  of  the  EU  citizens99.  Environmental  and  resource-efficiency 
challenges have over the past decade gained increasing attention and recognition, leading 
to an agreement of the international community100 to keep global warming below 2 degrees 
Celsius compared to the temperature in pre-industrial times in order to mitigate the impacts 
of climate change.  

According to the European Commission, it is estimated that not adapting to climate change 
would cost at least EUR 100 billion a year by 2020 and at least EUR 250 billion by 2050101. 
Adaptation102 can  reduce  costs,  save  lives  and  protect  livelihoods.  Worldwide  adaptation 
strategies  also  have  an  impact  on  trade  and  local  economies,  creating  opportunities  and 
jobs,  for  example  in  sectors  like  agricultural  technologies  or  construction103.  Within  the 

98 Proposal  Commission  for  a  Regulation  of  the  European  Parliament  and  of  the  Council  on  the  import  of 
cultural  goods,  13  July  2017,  COM(2017)  375,    https://ec.europa.eu/taxation_customs/business/customs-
controls/cultural-goods_en 

99 EU High Representative Federica Mogherini confirmed that fighting climate change is a question of security, 
not  a  luxury:  https://eeas.europa.eu/headquarters/headquarters-homepage/28379/eu-will-make-sure-paris-
agreement-climate-change-implemented_en  

100  Paris  Agreement  under 
http://unfccc.int/paris_agreement/items/9485.php 

the  United  Nations  Framework  Convention  on  Climate  Change, 

101 https://ec.europa.eu/clima/sites/clima/files/docs/factsheet_adaptation_2014_en.pdf 

102 The  policy  options  for  dealing  with  climate  change  are  generally  divided  into  two  types:  mitigation 
(targeting the causes) and adaptation (targeting the impacts). 

103

 European 

Commission, 

Factsheet 

on 

Adaptation, 

2014, 

https://ec.europa.eu/clima/sites/clima/files/docs/factsheet_adaptation_2014_en.pdf  

79 

 
 
                                                      
European  context,  the  European  Commission’s  strategy  on  adaptation  to  climate  change 
(SACC)  supports  the  need  to  anticipate  the  adverse  effects  of  climate  change  and  take 
appropriate action to prevent or minimise the damage they can cause, or take advantage of 
opportunities that may arise. Currently, the evaluation and review of the SACC is underway 
which may either confirm existing actions or propose for new, other measures. Adaptation 
strategies  are  developed  and  implemented  at  local,  regional,  national,  and  International 
levels, requiring coordination and exchange of information104. In 2017, National Adaptation 
Strategies exist in 75% of the EU Member States105.  

At  an  international  level,  the  UN  Framework  Convention  on  Climate  Change  (UNFCCC) 
brings  together  countries  that  agreed  that  adaptation  must  be  addressed  with  the  same 
level  of  priority  as  mitigation  and  set  up the  Cancun  Adaptation  Framework106 to  enhance 
action.  In  addition,  the  WCO  has  taken  up  an  active  role  in  the  enforcement  of 
environmental  policies.  The  WCO  Council  adopted  a  Recommendation  concerning  Actions 
Against  Cross-Border  Environmental  Offences  and  the  organization 
launched  the 
Environmental  Programme 
it  tries  to  broaden  partnerships  with  other 
organizations ‘working in the area of fighting against environmental crime’107.  

in  which 

Both  mitigation  and  adaptation  climate  change  policies  have  implications  for  customs 
administrations.  Environmental  and  climate  change  considerations  could  result  in  the 
enforcement  of  new  legislation  (e.g.  carbon  import  tariffs  in  the  form  of  border  tax 
adjustments108, trade facilitation of low-carbon energy technology, or enforcement against 
emission permit trading irregularities109), could  affect  trade  flows  (e.g.  shift  of  production, 
shift in transportation modes), and could change the working methods of customs (e.g. use 
of environmentally-friendly working methods). 

104 Stronger collaboration between the different levels of government is being called upon, for example in an 
opinion 
Regions 
European 
http://cor.europa.eu/en/activities/opinions/pages/opinion-
factsheet.aspx?OpinionNumber=CDR%202430/2016.  

Committee 

published 

the 

the 

by 

of 

105 Sectors  that  attract  attention  at  national  levels  are  agriculture,  water,  forestry,  human  health  and 
biodiversity.  Adaptation  strategies  prove  especially  effective  when  transcending  borders  of  individual  states 
(such  as  with  river  basins),  http://econadapt.eu/sites/default/files/2016-11/EU_Adaptation_Strategy_-
_Claus_Kondrup%5B1%5D.pdf 

106 Decision 1/CP.16 by the Conference of Parties under the United Nations Framework Convention on Climate 
Change, FCCC/CP/2010/7/Add.1, http://unfccc.int/resource/docs/2010/cop16/eng/07a01.pdf#page=4  

107

http://www.wcoomd.org/en/topics/enforcement-and-

compliance/~/link.aspx?_id=0FE801267DC14372A5782024A56B8686&_z=z 

108 Carbon  imports  tariffs  are  for  example  a  specific  area  where  Customs  administers  product  and  process 
taxes.  For  example,  Denmark  taxes  imports  of  perfluorocarbons  (PFCs),  based  on  the  Danish  CO2  tax 
correlated with the Global Warming Potential (GWP) up to a certain maximum. Necessary measures may also 
need to be taken to make agreements on trade in waste and effectively manage these. 

109 R.  Ireland,  Implications  for  Customs  of  Climate  Change  Mitigation  and  Adaptation  Policy  Options:  A 
Preliminary Examination, World Customs Journal, 2010, Issue 4(2), 21. 

80 

 
 
                                                      
Adaptation  policies  may  impact  a  customs  administration  through  customs  clearance  of 
humanitarian relief consignments or trade recovery. For example, the expanding use of low-
carbon  energy  technology  (such  as  wind,  solar,  efficient  lighting,  hydropower  …)  can  be 
linked  with  these 
attained  by  reducing  tariff  and  non-tariff  barriers  on  goods 
technologies110.  

Over  the  past  decade,  new  European  legislations  with  provisions  related  to  customs 
intervention  were  introduced  with  the  aim  of protecting health  and  the environment, e.g. 
the  Regulation  concerning  the  Registration,  Evaluation,  Authorisation  and  Restriction  of 
Chemicals  (REACH)111,  governing  the use of  chemicals  in  imported  products.  Introduced in 
2006,  REACH aims  to  improve  the  protection  of  health  and  the  environment  through 
identification  of  the  intrinsic  properties  of  chemical  substances.  While  REACH  is  an  EU 
regulation,  enforcement  is  a  national  responsibility  and  Member  States  must  ensure  a 
control  system  and  lay  down  legislation  specifying  penalties.  In  most  Member  States, 
specific national Inspectorates were created under the competency of Ministries of Health, 
Labour,  Ecology,  etc.  but  everywhere  these  bodies  liaise  with  the  national  customs 
administrations,  which  perform  inspections 112.  Other  examples  are  import  bans  and 
restrictions with a view to protect the environment, such as the ban on imports of Atlantic 
bigeye tuna from certain origins113, the banning of cat and dog fur and products containing 
such fur114. 

Illicit trade in flora and fauna 

110 In  the  context  of  WTO  negotiations,  18  participants  representing  46  WTO  members  are  engaged  in 
negotiations  on  an  Environmental  Goods  Agreement  (EGA),  seeking  to  eliminate  tariffs  on  a  number  of 
important  environment-related  products.  These  include  products  that  can  help  achieve  environmental  and 
climate  protection  goals,  such  as  generating  clean  and  renewable  energy,  improving  energy  and  resource 
efficiency,  controlling  air  pollution,  managing  waste,  treating  waste  water,  monitoring  the  quality  of  the 
environment, and combatting noise pollution; https://www.wto.org/english/tratop_e/envir_e/ega_e.htm 

111 Regulation  (EC)  No  1907/2006  of  the  European  Parliament  and  of  the  Council  of  18  December  2006  
concerning  the  Registration,  Evaluation,  Authorisation  and  Restriction  of  Chemicals  (REACH)  establishing  a 
European  Chemicals  Agency,  amending  Directive  1999/45/EC  and  repealing  Council  Regulation  (EEC)  No 
793/93 and Commission Regulation (EC) No 1488/94 as well as Council Directive 76/769/EEC and Commission 
Directives 
http://eur-
lex.europa.eu/eli/reg/2006/1907/oj/eng 

2000/21/EC, 

91/155/EEC, 

93/67/EEC, 

93/105/EC 

and 

112 https://echa.europa.eu/regulations/enforcement/national-inspectorates.  

113 Regulation  (EC)  No 249/2014  of  the  European  Parliament  and  of  the  Council  of  26  February  2014 
prohibiting  imports  of  Atlantic  bigeye  tuna  (Thunnus  obesus)  originating  in  Bolivia,  Cambodia,  Equatorial 
Guinea, Georgia and Sierra Leone and repealing Regulation (EC) No 1036/2001, http://eur-lex.europa.eu/legal-
content/EN/TXT/PDF/?uri=CELEX:32014R0249&from=EN  

114 Regulation  (EC)  No  1523/2007  of  the  European  Parliament  and  of  the  Council  ofl  11  December  2007 
banning  the  placing  on  the  market  and  import  to,  or  export  from,  the  Community  of  cat  and  dog  fur,  and 
http://eur-lex.europa.eu/legal-
containing 
products 
content/EN/TXT/PDF/?uri=CELEX:32007R1523&from=EN 

such 

fur, 

81 

 
 
                                                      
Customs  are  expected  to  monitor  trade  under  the  Convention  on  International  Trade  in 
Endangered Species of Wild Fauna and Flora (CITES), governing illegal trade in wildlife, such 
as rhino horn.   

External trade competences  

customs administrations have an important role to play in the EU trade policy, as result of 
the  connection between  the  customs  union  and the  Common  Commercial  Policy  (Art.  206 
and 207 of the TFEU). 

A trend towards far-reaching integration between trading countries at multilateral, regional 
and bilateral levels (between Member States and third countries) is visible. Whereas WTO 
Members continue to negotiate for a multilateral agreement under the Doha Development 
Agenda (DDA), the lack of prospect for an over-all agreement has contributed to a growth in 
bilateral  negotiations  for  agreements  which  include  increased  market  access  in  goods, 
services,  reductions  in  behind-the-border  constraints,  and  improvements  in  customs 
cooperation. Globally, customs administrations need to keep up with the changes in trading 
conditions, as determined by trade agreements.  

More than a third of EU trade is covered by FTAs (compared to only a quarter of EU trade 
ten  years  ago).  International  agreements  today 
include  customs  provisions,  mainly 
regarding  mutual  assistance  and  administrative  cooperation  between  the  customs 
administrations  of  countries  to  the  agreement  (EU  countries  on  the  one  hand  and  third 
countries  on  the  other  hand).  The  “external  dimension”  of  the  EU  customs  legislation 
constitutes  an  intrinsic  part  of  customs  administrations’  reference  framework.  Besides 
assistance and cooperation another important customs topic is inherent to trade policy, i.e. 
preferential origin determination. With an increase in bilateral trade agreements comes an 
increase  in  (diversified)  preferential  rules  of  origin.  For  every  single  bilateral  agreement 
which the EU concludes with a third country, specific rules need to be developed according 
to  which  a  product  can originate  from  one  of the  parties  to  the  agreement  and therefore 
benefit  from  preferential  import  treatment.    As  each  FTA  encompasses  a  unique  set  of 
preferential  rules  of  origin,  the  verification  of  preferential  conditions  requires  advanced 
skills as well as performant and updated IT systems. The main distinction needs to be made 
between  goods  that  are  wholly-obtained  in  a  country  or  if  they  are  the  product  of 
manufacturing. In the second scenario, in order to be originating, final goods need to be in 
conformity with certain conditions which can be: 

  Change in tariff heading between components and final good 
  Non-originating value content rule 
  Specific processing requirement  
  Product-specific rule  

To properly assess and apply these rules, customs needs the right tools and needs to be able 
to educate its officials on this matter. From interviews within DG TAXUD it was established 
that customs administrations have it increasingly difficult to assess preferential origin based 
on new product-specific rules in FTAs as developed by the trade negotiators. Where often 
the  rules  in  the  past  were  limited  to  tariff  shift  rules,  now  more  and  more  complex  value 

82 

 
 
rules  and  processing  rules  apply,  requiring  a  growing  emphasis  on  monitoring  whether 
conditions for preferential market access have been met. 

New EU FTAs also cover a large number of non-traditional trade topics. Those topics include 
(inter alia): intellectual property rights (IPR), consumer safety, product quality (SPS and TBT) 
and environmental issues. 

As  FTAs  lead  to  enhanced  collaboration  with  third  countries  on  safety,  health  and  other 
standards, customs are equally required to act in line with the commitments made. It seems 
today  that  improvements  could  be  made  when  it  comes  to  the  communication  and 
collaboration  between  the  customs  administrations  and  the  trade  department  and  that 
policies  are  pursued  separately,  which  is  very  inefficient.  Other  examples  of  such 
agreements  are  the  UNESCO  Convention  on  the  Means  of  Prohibiting  and  Preventing  the 
Illicit  Import,  Export  and  Transfer  of  Ownership  of  Cultural  Property  1970115,  or  mutual 
recognition of (AEO) standards. The EU has concluded and implemented Mutual Recognition 
Agreements (MRA) of AEO programmes with Norway, Switzerland116, Japan, Andorra, the US 
and  China,  and  several  MRAs  are  in  preparation,  each  with  diverging  benefits  and 
conditions. For countries with whom the EU does not have an FTA in place it would be good 
to at least improve the cooperation where it is possible.  

Digital economy 

The  digital  economy,  with  its  new  business  models,  also  brings  changes  in  consumer 
behaviour and poses a number of other challenges, affecting the role and responsibilities of 
customs administrations. The emergence of electronic means to order and pay for physical 
goods coming from across the border has amongst others resulted in a proliferation of small 
parcels which continues to pose a challenge to customs according to the WTO, for following 
reasons:  

  The minimum value of these goods; 
  The increasing volumes; 
  Potential illegal trade. 

The  phenomenon  of  e-Commerce  and  the  implementation  of  the  related  provisions  and 
regulations  are  therefore  another  example  of  extension  of  customs  responsibilities  in 
emerging  domains.  Similarly,  Cyber  Security  also  enters  in  the  competences  of  customs 
administrations in a number of countries117.  

115 UNESCO,  Convention of 14 November 1970 on the means of prohibiting and preventing the illicit  import, 
export 
property,   
ownership 
transfer 
http://unesdoc.unesco.org/images/0013/001333/133378mo.pdf 

cultural 

and 

of 

of 

116

http://ec.europa.eu/taxation_customs/general-information-customs/customs-security/authorised-

economic-operator-aeo/authorised-economic-operator-aeo_en 

117 This  is  the  case  for  the  United  States,  for  instance.  See:  https://www.cbp.gov/document/publications/us-
customs-and-border-protection-cybersecurity-strategy  

83 

 
 
                                                      
To  conclude,  going  beyond  traditional  customs  tasks  and  moving  into  these  new  or 
extended  domains,  the  EU  customs  administrations  face  an  increase  in  their  roles  and 
responsibilities  towards  EU  citizens  and  businesses.  From  safeguarding  EU  and  national 
revenues  and  ensuring  safety  and  security,  the  emphasis  of  customs  administrations  daily 
tasks  hinges  towards  safety  and  risk  management  (in  addition  to  trade  facilitation),  with 
changing  expectations from  all  actors  involved  (be  it  market  operators or  other  national  / 
EU / third country administrations). The broadening of tasks and responsibilities of customs 
administrations impacts their organizational capacity and resources, as the broadening and 
increasing  significance  of  tasks  is  not  necessarily  recognised  at  the  political  level  reflected 
also in the assignment of resources to the customs administrations. 

Whereas  additional  trainings  may 
improve  customs  administrations’  expertise,  the 
increased  complexity  of  tasks  calls  for  a  more  versatile  /  highly  specific  expertise  which  is 
difficult  to  find  and  /  or  build  by  the  Member  States,  also  depending  on  the  national 
experience, resources, etc. Additionally, strategic priorities and interests may differ between 
the national administrations when it comes to the additional policies.  

The EU moves at different speeds, with different levels of customs resources, enforcement 
and expertise. As a result of the existing national challenges regarding expertise / capacity / 
training  /  equipment  /  etc.,  customs  administrations  increasingly  rely  on and  reach  out  to 
external  resources,  such  as  dedicated  units  in  specialized  international  organisations  and 
agencies  (such  as  WCO, EUROPOL  or  OLAF).  The  existing  wealth  of  facilities  across  the  EU 
should  not  be  disregarded,  however.  The  intra-EU  collaboration  would  benefit  from 
adequate communication and data sharing between Member States. 

3.2.2 The “Core” cluster 
As part of the trends, a group of “core” trends are identified that occur at a global level and 
which  are  expected  to  have  a  crucial  influence  on  the  EU  (and  international)  customs 
landscape. The “core influences” identified constitute both general and specific trends, the 
importance of which is widely acknowledged and documented in relevant literature.  

The Core influences cluster contains: 

  Globalisation  (general  trend),  which  entails  the  exponential  increase  of  cross-border 

activities and globalised trade; 
  this entails, as specific trend, the increased trade in goods and services resulting in 
high volume of transactions (specific trend) coming from many different (emerging 
and not emerging) countries; 

  Digitalisation  (general  trend),  which entails the  increasingly rapid pace of  innovation 
and  technological  development  which  shapes  the  global  economic  context.  This 
general trend relates to the following specific trends; 
  e-Commerce  which  contributes  to  the  increase  in  trade  flows  (see  globalisation) 

and in the “parcelisation” of trade (specific trend); 

  New technologies, digital supply networks and new equipment which includes both 
the emergence of new products and tools (e.g. Blockchain and 3D printing) and the 

84 

 
 
intense  usage  of  new  technologies  such  as  real  time  sensors,  innovative  scanning 
equipment and monitoring devices (specific trend) in the customs context; 

  Increased  use  of  data  and  information  intended  as  the  large  scale  exploitation  of 
multiple  data  sources  and  data  points  (Big  Data)  and  data  analytics  for  different 
purposes (e.g. prediction of risks, ex post randomisation of controls, monitoring of 
flows) (specific trend); 

  Terrorism,  safety  and  security  threats  (general  trend),  defined  as  all  the  challenges 
emerging at the global stage and posing risks for both businesses and citizens security, 
health and safety. This involves: 
  The  increased  pressure  on  customs  administrations  in  terms  of  capacity  to 
anticipate risks and threats (e.g. migration crisis, food safety crisis), manage them 
and be resilient to change.  

Digitalisation  

Fast  technological  developments  are  disrupting  all  policy  areas  and  the  way  public 
administrations,  citizens  and  businesses  interact.  Technological  development  is  a  wide 
concept  which  can  include  a  never-ending  list  of  different  trends  such  as  digitalisation  of 
business  and  consumers,  Big  Data,  e-Commerce  and  online  platforms,  Internet  of  Things 
(IoT), Blockchain, etc. This section is not intended to illustrate in detail how these and other 
technological  trends  might  affect  the  role,  methods,  processes  and  skills  of  customs 
administrations in the future but rather to indicate that they will have such an influence and 
that they must be duly considered when thinking about the future of customs.  

e-Commerce 

As a driver of the digital economy addressed above, technological developments have also 
contributed  to  an  increase  in  trade  volumes.  The  rapid  emergence  of  e-Commerce  is 
drastically  changing  the  whole  concept  of  ‘business’  or  ‘trading’,  and  has  especially 
impacted customs administrations, challenging the facilitation as well as control tasks, and 
leaving consequences as well in terms of revenues. 

e-Commerce has made accessible a wider geographical reach for businesses and consumers. 
Eurostat  data  show  that  in  the  period  2008-2015  the  number  of  businesses  selling  online 
increased from 13% to 20% and the corresponding turnover went from 12% to 16% of total 
turnover for EU businesses, with 8% of online sales made to other EU countries in 2014118. 
Regarding  individuals,  according  to  another  Eurostat  survey119 of  2016,  two  thirds  of 
internet  users  in  the  12  months  prior  to  the  survey  made  online  purchases  in  the  same 
period.  Overall,  the  share  of  e-shoppers  in  internet  users  is  growing,  with  the  highest 
proportions being found in the 16-24 and 25-54 age groups (68 % and 69 % respectively). In 

118 http://ec.europa.eu/eurostat/statistics-explained/index.php/ECommerce_statistics 

119

Eurostat, 

findings, 
for 
http://ec.europa.eu/eurostat/statistics-explained/index.php/ECommerce_statistics_for_individuals.  

individuals,  Main 

e-Commerce 

statistical 

statistics 

2016, 

85 

 
 
 
                                                      
this  regards,  84  %  of  individuals  aged  16  to  74  in  the  EU  had  used  the  internet  in  the  12 
months  prior  to  the  survey,  of  whom  66  %  had  bought  or  ordered  goods  or  services  for 
private  use.  In  addition,  32  %  of  e-buyers  purchased  from  other  EU  Member  States, 
compared with 25 % in 2012120. 

The reasons for the relatively high impact of e-Commerce on customs performance is four-
fold,  as  agreed  by  WCO  members  in  the  context  of  the  e-Commerce  work  group 
discussions121:  

  the high volumes of packages;  
  time-sensitive clearance of goods;  
  a changing client base and lack of qualitative data; and  
  fragmented or inadequate legislative frameworks (incl. on low value parcels, refunds 

and returns.   

These  factors  pose  challenges  on  customs  administrations  because  control  and  risk 
processes  and  in  return  for  the  increased  workload,  governmental  revenue  is  close  to 
nothing.  Adequate  risk  management  is  needed,  as  (physically)  controlling  all  goods  is 
impossible.  

The  implication  of  the  changing  client  base  through  e-Commerce  is  in  the  area  of  data 
quality  and  trustworthiness  of  data  and  customers.  As  occasional  traders  join  the  e-
Commerce  international  trading  scene,  the  filling  of  forms  for  tax  and  duty  purposes  is 
increasingly subject to errors. More specifically, an important characteristic of selling goods 
over  the  internet,  is  that  other  buyers  and  sellers  are  active  than  those  traditionally 
encountered  in  the  3  types  of  commerce:  B2B  (business  to  business),  B2C  (business  to 
consumer), B2G (business to government).  

An  increasing  number  of  individuals  sell  products  through  C2C  online  platforms,  which 
provide them access to a wide network of potential customers and to the rising popularity 
of  the  sharing  economy.  Platforms  such  as  Amazon  or  eBay  currently  allow  small-volume 
traders  to  generate  global  trade  transactions  and  this  of  course  has  a  direct  impact  on 
customs administrations which find themselves facing more and more low-value shipments 
from all over the world.  

A  problematic  matter  is  here  that  platforms  such  as  Ebay,  Amazon  or  AliBaba  have  the 
relevant data for customs to improve their risk management process and profiling, but do 
currently not take a responsibility in the supply chain to share or make available these data 
for  customs  purposes.  However,  the  responsibility  of  e-Commerce  platforms  for  customs 

120 Ibid.  

121  WCO,  Working  Group  on  e-Commerce,  minutes  of  sub-group  meetings  held,  January  2017,  
http://www.wcoomd.org/-/media/wco/public/global/pdf/topics/facilitation/activities-and-
programmes/ecommerce/summary-report-of-the-subgroups-meetings-of-the-wg-on-ecommerce.pdf?la=en  

86 

 
 
 
 
                                                      
purposes is a matter of high interest to customs administrations and likely will be discussed 
in the context of WCO and DG TAXUD policy committees. 

Additionally,  no  customs  duties  are  currently  levied  on  the  provision  of  online  services, 
while  they  might  be  ‘originating’  from  third  countries.  This  could  be  a  future  form  of 
revenue.  Furthermore,  goods  are  traded  in  a  digital  environment,  triggering  important 
questions on cybersecurity and tackling cybercrime, and the role of customs in this regard.   

The breakthrough changes in traditional trade patterns (from a focus on trade in goods, to 
increased  trade  in  services  and  intangibles)  is  particularly  important  as  trade  in  services 
poses  some  key  questions  with  respect  to  customs  administrations  and  their  role  in 
facilitating and controlling trade in services. For customs to keep up with the rapid rise of e-
Commerce,  it  will  need  to  increase  its  cooperation  with  tax  administrations  (particularly 
when it comes to VAT, cf. the VAT Digital Single Market Package122). It is true the other way 
around  as  well.  Tax  administrations  have  an  interest  in  cooperation  with  customs 
administrations, e.g. to obtain information on the VAT payments of particular consignments.  

There are no  particular  provisions foreseen  in the  UCC  specifically  addressing  (non-postal) 
express  shipments,  hence  meaning  that  the  common  legal  ground  to  dealing  with  e-
commerce challenges pertaining to customs is missing. The lack of a common legal ground 
with regards to (non-postal) express shipments in the EU legal framework (UCC), stands in 
the way of uniform and efficient customs controls of e-commerce  

E-Commerce depends on data, tracing things through data. Customs will also need to adapt 
to  that  by  using  data  to  trace  consignments,  which  on  the  other  hand  will  pose  privacy 
issues. The European Commission is involved in a variety of initiatives, like the elaboration 
of  recommendations  for  e-Commerce  and  the  subsequent  communiqué  to  the  WTO. 
However, a working group with big online sales platforms such as Amazon and Ali Baba like 
the WCO does is an approach not yet taken by the EU. 

Data and information 

Data  analytics  and  Big  Data  present  more  opportunities  than  challenges  for  customs 
administrations,  on  condition  that  data  can  be  adequately  collected,  accessed  and 
processed,  which  requires  the  support  of  performant  IT  systems.  The  importance  of  legal 
requirements  to  collect  and  process  such  data  must  here  be  stressed  as  such  treatment 
often requires due account being taken of data privacy rules. Once compliant with the legal 
environment, and adequate IT solutions are operational, Data analytics and Big Data help all 
types of organisations in both public and private sector to make better, quicker, and more 
efficient  decisions  based  on  evidence  and  insights.  The  data  analytics  landscape  is 
continuously evolving, more and more data is becoming available as a consequence of the 

122 The European Commission adopted a package of proposals which will facilitate cross-border trade, combat 
VAT  fraud,  ensure  fair  competition  for  EU  businesses,  and  provide  equal  treatment  for  online  publications; 
http://ec.europa.eu/taxation_customs/business/vat/digital-single-market-modernising-vat-cross-border-
ecommerce_en  

87 

 
 
                                                      
General  trends  Globalisation  and  Comprehensive  Policy  Approaches.  The  momentum 
continues  to  grow,  moving  squarely  into  the  mainstream  of  business  decision-making 
worldwide  and  customs  could  process,  analyse  and  translate  the  available  data  for  their 
purposes.  

The impact for customs administrations is not to be underestimated. Nowadays, the task of 
verifying the customs valuation declared at customs, is frequently being complicated by the 
fact that software (or intangibles) are captured in the trade of the goods, and the question 
whether the services component is to be dealt with from a customs perspective.  

Given  the  new  opportunities  linked  to  Big  Data  and  data  analytics,  public  administrations 
are more and more looking for ways to handle vast and diverse amounts of data and exploit 
these in order to improve their performance in responding to needs in society. As such, “Big 
Data  analytics  tools  can  be  useful  in  policy  making  for  processing  huge  amounts  of 
information  and,  through  this,  for  detecting  and  predicting  patterns 123 ”.  Customs 
administrations  are  already  using  predictive  data  analytics  tools  on  a  regular  basis  and  as 
the  availability  of  data  increases  over  time  this  will  become  the  norm.  The  Estonian, 
Lithuanian  and  Irish  customs  administrations  are  amongst  administrations  that  are 
experimenting  with  these  new  technologies  to  carry  out  their  tasks  more  efficiently124.  As 
explained by some of the interviewees, the increasing availability of data will make it easier 
for  customs  administrations  to  focus  on  flows  with  the  least  data  available  and  therefore 
the  biggest  risk.  Very  often,  data  analytics  is  used  to  predict  and  detect  fraud  and  illicit 
behaviour in order to organise specific controls on certain economic operators.  

The  Single  Window  principle  is  also  a  requirement  under  the  digitalisation.  Information, 
which economic operators are providing to customs, needs to become digitalized so it can 
be properly stored, exchanged and re-used whenever necessary via on-line tools.  

Today the available data in the digital space is insufficiently utilized by the  administrations. 
customs administrations must learn to make use of data that is available on data platforms 
or  by  cooperation  with  the  private  sector.  If  customs  administrations  can  attain  access  to 
large  sets  of  data  as  major  internet  and  technology  companies  already  have  today,  it  will 
enable them to compute these and determine patterns based on the extracted information. 
Analysing  these  patterns  will  allow  customs  administrations  to  more  efficiently  manage 
trade flows, but also build more effective risk management processes.   

An  obvious  point  of  attention  resulting  from  the  development  of  new  technologies  in 
customs  is  the  knowledge  and  skills  of  customs  officials  whom  will  need  to  be  trained 
continuously.  On  top  of  that,  customs  administrations  will  need  to  be  able  to  share  data 

123 A. Delijoo, A. Janssen, M. Wimmer, Policy, Practice and Digital Science: Integrating Complex Systems, Social 
Simulation and Public Administration in Policy Research, Springer, 2015. 

124

http://www-03.ibm.com/software/businesscasestudies/au/en/corp?synkey=X941543K55207M80; 

https://www.sas.com/sv_se/customers/irish-tax-and-customers.html 

88 

 
 
                                                      
with each other to ensure the effective functioning of customs as a union. An imbalance in 
data reception between Member States would distort the Union.  

Digital supply networks and other emerging disruptive technologies 

Digitalisation  of  businesses  and  consumers,  also  in  the  context  of  the  Digital  Single 
Market125, is a key general trend to take into account. Innovative and disruptive trends are 
triggering the emergence of digital supply networks, instead of the traditional linear supply 
chain.

125 https://ec.europa.eu/commission/priorities/digital-single-market_en  

89 

 
 
                                                      
Figure 13 - What are Digital Supply Networks (DSN)? 

Source: 

Deloitte

90 

 
 
 
 
As  DSN  change  the  way  business  act  (in  particular  the  way  products  are  developed, 
transported, and traded), customs administrations will be affected by this evolution as well. 
E.g.  more  technically  difficult  questions  requiring  considerable  resources  might  arise  (e.g. 
relating to customs valuation), but also supply chain transparency might increase. DSN are 
characterised  by  the  interaction  from  physical  to  digital,  digital  to  digital,  and  digital  to 
physical. 

Figure 14 - Physical to digital 

Source: Deloitte  

Further  developments  in  the  data  analytics  capacity  of  public  administrations  and 
businesses,  and  further  reliance  on  DSN  making  tons  of  data  available,  will  also  lead  to 
increasing take up of artificial intelligence (AI) systems. In this respect, AI technologies have 
already  been  experimented  with  in  many  policy  domains126,  however  no  examples  of  AI 
systems deployed by customs administrations can be found at the present stage. Availability 
of data is also linked to the spreading of Internet of Things technologies. Internet of Things 
can be  defined  as  a  technology  allowing  everyday  physical  objects  to  be  connected  to  the 
internet  and  to  be  able  to  identify  themselves  to  other  devices127,  also  leading  to  the 
production of sensor based data. Many important logistics players already started adopting 

126 https://www.itnews.com.au/news/immigration-signs-up-for-ibms-watson-403202  

127 https://www.techopedia.com/definition/28247/internet-of-things-iot  

91 

 
 
 
                                                      
IoT technologies for managing their warehouses and trade processes128 and this trend could 
rapidly  be  extended  to  public  administrations  in  general.  IoT  could  particularly  be  helpful, 
within the customs domain, to automate processes and collect data on the physical goods 
passing  the  borders.  Ports  are,  at  the  present  stage,  one  of  the  border  control  posts  for 
which  IoT  seems  the  most  promising129.  Finally,  Blockchain  technologies,  which  is  a  new 
decentralised  and  transparent  database  or  ledger,  might  also  bring  along  interesting 
opportunities  for  policy  makers  in  different  domains,  including  customs.  In  this  specific 
domain,  “Blockchain  can  enhance  trust  in  trade  as  this  cloud-based  ledger  ensures  that 
records  can’t  be  duplicated,  manipulated  or  faked,  and  increased  visibility  in  parts  of  the 
supply chain promotes an unprecedented level of trust”130. Moreover, Blockchain is already 
being applied in trade of services, as proven by the first Blockchain based trade-finance deal 
reported by Barclays131. Blockchain can also have a direct effect on how the customs union 
IT systems are currently conceived and deployed. Therefore, there are many dimensions of 
administrative work that could be affected by this technological development. 

It  must  be  noted  here  that  technological  development  cannot  be  limited  to  the  trends 
described  in  this  section  as  new trends  emerge  every  day.  Nonetheless,  it  is  important  to 
consider  that  technological  and  especially  IT  based  developments  are  a  crucial  external 
factor affecting the future of customs administrations.  

The potential advantage of Blockchain technology needs to be taken into account during the 
development  of  new  IT  systems,  but  requires  more  budget  to  finance  these  projects. 
Allocating  funds  for  these  new  technologies  can  be  defended  as  investments  which  will 
potentially  save  lots  of  spending  in  the  future  and  create  better  functionality  of  the  IT 
systems. 

A  number  of  challenges  with  regard  to  digitalisation  is  also  linked  to  the  trend  of 
globalisation.  Modern  trade  is  becoming  digitalized  for  a  large  part  as  a  result  of  online 
services  and  service  providers.  Even  though  customs  administrations  are  also  using  more 
and more digital and electronic tools they do not seem to be able to keep up with the speed 
at  which  data  is  going  around.  If  customs  cannot  keep  track  of  data  used  by  economic 
operators, gradually they will run the risk of losing control.  

Implementation and maintenance of IT systems contained in the UCC 

National customs administrations need to be sufficiently equipped to answer the challenges 
of the UCC. 

128http://www.dhl.com/en/press/releases/releases_2015/logistics/dhl_successfully_tests_augmented_reality_
application_in_warehouse.html  

129 http://logisticsofthefuture.be/ or http://www.praxisnetwork.eu/proposal/id/1109  

130 World 
“How 
https://www.weforum.org/agenda/2017/02/blockchain-trade-trust-transparency/  

blockchain 

Economic 

restore 

Forum, 

can 

trust 

131 Ibid.   

in 

trade”, 

2017, 

92 

 
 
                                                      
In the current situation, Member States operate national IT systems, designed on a national 
level, to process national customs and security data such as national declaration processing 
systems132.  Additionally,  the  European  Commission  manages  the  implementation  and 
operation  of  central  IT  systems  used  to  exchange  European-wide  available  information. 
Finally, also hybrid IT systems exist, which are a mix of central components (used by some 
of the Member States) and national components.  

With integrated IT systems, the goal is pursued to get to a fully-fledged e-administration133. 
In respect of customs, the ‘e-Customs Decision’ was adopted already back in 2008134. This is 
the  commitment  by  the  EU  and  its  Member  States  to  increase  the  competitiveness  of 
companies  doing  business  in  Europe  by  increasing  the  efficiency  of  the  organisation  of 
customs  controls,  ensuring  the  seamless  flow  of  data  in  order  to make  customs  clearance 
more efficient, reducing administrative burdens, helping to combat fraud, organised crime 
and terrorism, serving fiscal interests, protecting intellectual property and cultural heritage, 
increasing the safety of goods and the security of international trade and enhancing health 
and  environmental  protection.  For  that  purpose,  the  provision  of  information  and 
communication technologies (ICT) for customs purposes is of crucial interest. 

The electronic customs systems should meet the following objectives135: 

 
 
 
 
 

to facilitate import and export procedures; 
to reduce compliance and administrative costs and to improve clearance times; 
to coordinate a common approach to the control of goods; 
to help ensure the proper collection of all customs duties and other charges; 
to  ensure  the  rapid provision  and  receipt of  relevant  information  with regard to the 
international supply chain; 
to  enable  the  seamless  flow  of  data  between  the  administrations  of  exporting  and 
importing  countries,  as  well  as  between  customs  administrations  and  economic 
operators, allowing data entered in the system to be re-used. 
Aforementioned objectives should be met through the following means136: 

 

 

the harmonised exchange of information on the basis of internationally accepted data 
models and message formats; 

132 Note to PG Members from the Director Customs Policy, Legislation, Tariff,  Formulating an IT Strategy  for 
customs in the EU for the long term, DG TAXUD (2016)7117155. 

133 Opinion  of  the  European  Economic  and  Social  Committee  of  23  February  2012  on  the  ‘Proposal  for  a 
Regulation of the European Parliament and of the Council establishing an action programme for customs and 
taxation in the European Union for the period 2014-20 (FISCUS) and repealing Decisions No 1482/2007/EC and 
No 
http://eur-lex.europa.eu/legal-
706 
content/EN/TXT/PDF/?uri=CELEX:52012AE0475&from=EN 

624/2007/EC’, 

COM(2011) 

final, 

134 Commission Decision 70/2008/EC of 15 January 2008 on a  paperless environment  for customs and trade, 
http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2008:023:0021:0026:EN:PDF 

135 Art. 2, 1 Decision 70/2008/EC, ibid. 

136 Art. 2, 2 Decision 70/2008/EC, ibid. 

93 

 
 
                                                      
 

 

the  re-engineering  of  customs  and  customs-related  processes  with  a  view  to 
optimising  their  efficiency  and  effectiveness,  to  their  simplification  and  to  reducing 
the costs of customs compliance; 
the  offering  to  economic  operators  of  a  wide  range  of  electronic  customs  services 
enabling  those  operators  to 
in  the  same  way  with  the  customs 
administrations of any Member State. 

interact 

The European Economic and Social Committee (EESC) has confirmed multiple times all these 
goals. It considers that it is vital and important to introduce modernisation measures such as 
simpler customs legislation and to complete interoperable computerised customs systems, 
which  will  streamline  commercial  practices  and ensure  greater  coordination  of  prevention 
and prosecution activities. The EESC strongly supports the process of centralised clearance 
with  appropriate  electronic  systems;  systematic  use  of  standardised  working  methods; 
business  process  modelling;  dissemination  of  all  initiatives  related  to  electronic  customs; 
and, as an experiment, the establishment of a European rapid reaction task force to support 
innovation.  

The  EESC  acknowledged  that  the  introduction  of  the  Union  Customs  Code  should  be 
postponed  in  order  to  allow  time  for  the  development  of  harmonised  electronic  systems 
and improvements in the organisation of customs procedures at the EU's external borders, 
and  above  all  to  properly  inform  and  train  the  workforce,  thus  spurring  on  international 
trade and the swift movement of people and goods137. 

All aforementioned objectives and means are translated in the Work Programme relating to 
the  development  and  deployment  of  the  electronic  systems  provided  for  in  the  Union 
Customs Code138.  

The  European  Commission  provides  guidance  through  a  plan  (the  Multi-Annual  Strategic 
Plan, or MASP139) which defines the vision, objectives, strategic framework and milestones 
to implement the electronic customs initiative. Whereas the MASP, as a management and 
planning  tool,  supports  Member  States  in  implementing  the  IT  projects  introduced  by  the 
UCC,  it  is  up  for  the  individual  EU  Member  State  to  determine  the  planning  in  a  national 
context.  

Clearly,  the  UCC  also  spurs  the  wider  revisiting  of  entire  IT  and  technology  systems  of 
customs  administrations  across  the  EU.  For  example,  the  Government  of  Denmark,  as  a 
result of the implementation of the UCC, has decided to introduce an entirely new IT-system 
and to re-organize the functioning and set-up of the entire customs administrations around 

137 Opinion of the European Economic and Social Committee on the Proposal for a Regulation of the European 
Parliament  and  of  the  Council  laying  down  the  Union  Customs  Code  (recast),  INT/640  EESC-2012-1297, 
http://www.eesc.europa.eu/?i=portal.en.int-opinions.22454 

138 Regulation (EU) No 952/2013, ibid. 

139  European  Commission,  Electronic  Customs  Multi-Annual  Strategic  Plan  2017  Revision,  2017, 
http://ec.europa.eu/taxation_customs/sites/taxation/files/resources/documents/customs/policy_issues/e-
customs_initiative/masp_strategic_plan_en.pdf 

94 

 
 
                                                      
this  new  IT-system.  The  costs  were  spread  over  a  period  of  5  years,  and  financed  by  the 
Ministry  of  Finance.  Especially  for  resource-constraint  customs  administrations  in  the  EU, 
the  implementation  of  advanced  technology  and  finding  the  financial  resources  required, 
appears challenging.  

Target dates under the UCC work program are set for all individual IT-systems, as shown in 
Annex  E  of  this  report.  The  timetable  was  initially  ambitious  and  most  of  the  electronic, 
systems  are  on  track  for  completion  by  the  dates  set  out  in  the  Work  Programme.  If  the 
European  Commission  has  recently  acknowledged  that  close  to  eighty  per  cent  of  trans-
European  systems  will  be  completed  by  2020,  it  seems  that  the  full  deployment  will  also 
impact the time-horizon after 2020140. At this time, the systems which look likely to require 
further work beyond 2020 are as follows: ‘the upgrades of the Import Control System (ICS), 
the New Computerised Transit System (NCTS) and the Automated Export System (AES) plus 
the  export  component  of  the  Special  Procedures  System;  and  the  introduction  of  the 
Centralised  Clearance  for  import  (CCI),  Proof  of  Union  Status  (PoUS)  and  Guarantee 
Management (GUM) Systems. 

The European Commission reported in January 2018 that complete implementation of the 
UCC will be postponed until 2025 in respect of the customs formalities that are dealt with by 
the IT systems which cannot be fully implemented by 2020. A legislative proposal amending 
transitional arrangements is therefore expected in the course of 2018.141 Delivering all the 
electronic systems is vital in order to allow customs administrations to manage financial and 
security risks while facilitating trade. 

Globalisation 

The  trend  of  globalisation  is  linked  to  the  trend  of  digitalisation;  they  are  interdependent 
and enhance each other142. The globalisation of the economy and society translated into an 
overall  increase  of  cross-border  activities  and  global  trade,  as  well  as  the  rise  of  new 
business models (e.g. in the digital economy – evolution from the bricks-and-mortar based 
economy  to  a  digitalising  environment  with  new  business  models).  Policymakers  and 
regulators  face  the  challenging  task  of  tackling  disruptive  new  issues  and  risks  without 
stifling potential beneficial innovation. Indeed, they must ensure consumer protection, and 
health  and  safety  of  products  and  services  entering  the  European  Single  Market  while 

140 European  Commission,  Report  from  the  Commission  to  the  European  Parliament  and  the  Council  on  the 
Implementation  of  the  Union  Customs  Code  and  on  the  exercise  of  the  power  to  adopt  delegated  acts 
pursuant to Art. 284 thereunder, ibid. 

141 Ibid. 

142 Because of the interdependence of globalisation and digitalisation, this section touches upon digitalisation 
already. The topic will be elaborated further under the next section, however. 

95 

 
 
 
                                                      
promoting  economic  growth  and  trade143.  For  trade,  the  trends  of  globalisation  and 
digitalisation are expected to result in the emergence of digital supply networks144. 

Increased flows in trade and services  

The  increase  in  trade  volumes,  both  because  of  the  increased  flow  of  goods  across  the 
globe  and  because  of  the  increased  shipments  of  small  parcels,  has  been  impressive  over 
the  past  decade.  Between  2005  and  2015  the  value  of  trade  in  goods  and  trade  in 
commercial  services  has  doubled145.  The  over-all  trend  of  increased  trade  flows  over  the 
past decade has put additional pressure upon  customs administrations to process flows in 
an efficient manner, whilst at the same time keeping up with safety and risk management 
standards.  

Figure 15 - World merchandise and trade in commercial services 2005 -2015 

Source: World Trade Statistical Report 2016 

Although  tremendous  growth  in trade  volumes  was  witnessed over the past 30  years,  the 
recent economic crisis has resulted in a slowdown. Following several years of minor growth 

143 Institute  for  prospective  technological  studies,  JRC  technical  reports  –  Digital  economy  working  paper, 
Issues,  2016/01, 
Scoping 
https://ec.europa.eu/jrc/sites/jrcsh/files/JRC100369.pdf.  

the  Sharing  Economy:  Origins,  Definitions, 

Impact  and  Regulatory 

144 This will be elaborated under the trend ‘digitalisation’. 

145

 World 

Trade 

Statistical 

Report 

2016,  

https://www.wto.org/english/res_e/statis_e/wts2016_e/wts16_toc_e.htm.  

96 

 
 
 
 
                                                      
(and even negative in 2014), the year 2015 showed an upward trend with a positive trade 
growth of 2.7 per cent. The slump was at least partly the result of adverse macroeconomic 
conditions,  including  limited  demand  from  emerging  economies,  the  continuation  of  high 
deflation  levels  (particularly  on  the  European  continent),  and  low  prices  for  commodities 
(e.g.  oil  and  raw  materials).  Whereas  exports  from  developing  and  emerging  economies 
show  faster  growth  (at 3.1  per  cent),  the  OECD  countries  suffer from much  slower  export 
growth rates (at 2.0 per cent) in 2015146. In 2015, Asia overtook Europe for the first time in 
terms of share of world exports (36.17 per cent compared with 36.15 for Europe). As leading 
destinations of global exports, Europe and Asia have however seen their imports drop by 13 
per  cent  and  14  per  cent  respectively  in  2015.  Global  trade  patterns  are  equally  shifting 
from the West to the East, acknowledging the important role played by emerging countries 
in global value chains. Approximately 90% of global economic growth is generated outside 
Europe147.  

Next to the growth in trade volumes, the reality in which customs administrations operate is 
impacted by the changing face of trade, underlining interdependence and connectedness, 
e.g. between trade in goods and services. Businesses operate in global value chains / digital 
supply networks, encompassing trade activities in a large number of countries, e.g. through 
global sourcing of inputs (integration of company functions). Trends towards digitization of 
businesses and consumers also result in breakthrough changes in traditional trade patterns 
(from a focus on trade in goods, to increased trade in services and intangibles). Indeed, also 
as  a  consequence  of  the  dematerialization  of  the  economy,  more  and  more  economic 
transactions concern services rather than goods148.  

New business models are based on a B2B, B2C, and increasingly on a C2C relationship. The 
OECD identified a number of those ‘new business models’149, such as e-Commerce, payment 
services,  app  stores,  online  advertising,  cloud  computing,  high  frequency  trading,  and 
participative networked platforms. These new business models affect consumer behaviour 
but also imply a number of other challenges (think e.g. about cybersecurity). 

These challenges linked to the increase in trade volumes and the changing face of trade led 
to  an  intensified  engagement  of  governments  in  international  institutions,  such  as  the 
Organisation  for  Economic  Co-operation  and  Development  (OECD),  the  World  Customs 
is 
Organisation  (WCO)  or  the  World  Trade  Organisation  (WTO).  EU  trade  policy 

146

 World 

Trade 

Report, 

WTO, 

2015, 

https://www.wto.org/english/res_e/booksp_e/world_trade_report15_e.pdf.  

147 World Trade Statistical Report 2016, ibid. 

148 Eurostat, 
explained/index.php/International_trade_in_services 

International  Trade 

in  Services  Statistics,  2017,  http://ec.europa.eu/eurostat/statistics-

149 OECD,  Addressing  the  tax  challenges  of  the  digital  economy,  BEPS  Action  1  –  2015  final  report, 
http://www.oecd-
ilibrary.org/docserver/download/2315281e.pdf?expires=1501131641&id=id&accname=guest&checksum=D4C
386D6FB15CCDDF550E623E3EB4BB2  

97 

 
 
                                                      
characterized  by  a  continued  commitment  to  the  WTO,  which  provides  a  multilateral 
legislative framework and agreed set of rules for global trade, departing from inter alia ‘non-
discrimination’ and ‘most-favoured nation’-principles.  

Globalisation  also  brought  along  the  need  for  countries  to  adopt  similar  and  compatible 
customs  approaches  in order to  remove  barriers  to  cross-border  trade and  support  global 
value  chains.  The  importance  of  effective  management  of  these  trade  flows  has  received 
heightened attention over the past years. International organisations play an important role 
in  the  development  of  common  standards  and  methods  for  customs  administrations.  The 
recent  WTO  Trade  Facilitation  Agreement  (TFA)150,  agreed  upon  in  December  2013  and 
entered 
incentive  for  customs 
into  force  on  22  February  2017,  provides  for  an 
administrations worldwide to align and comply with the agreed provisions151. 

Free  trade  agreements  (FTAs)  allow  EU  businesses  to  access  to  and  source  from  global 
markets  through  trade  of  goods  as  well  as  (increasingly),  trade  in  (digital)  services  and 
investment. According to numbers of the WTO, up till the establishment of its organization 
in 1995, a total of 124 Regional Trade Agreements (RTAs) were notified to the GATT. Since 
the  creation  of  the  WTO,  more  than  400  additional  arrangements  have  been  notified 
including arrangements related to trade in goods and services)152. Of these, the biggest are 
the  EU,  the  North  American  Free  Trade  Agreement  (NAFTA)  and  the  Association  of 
Southeast  Asian  Nations  (ASEAN),  representing  together  almost  55  per  cent  of  world 
exports  (US$  8.8  trillion)  and  58  per  cent  of  world  imports  (US$  9.6  trillion)153.  The 
provisional entry into force of the EU-Korea FTA and EU-Canada Comprehensive Economic 
and Trade Agreement (CETA) and the political consensus on the EU-Japan FTA exemplify this 
ongoing  movement.  Ongoing  and  recently  concluded  negotiations  for  trade  agreements, 
such as the Trans-Pacific Partnership (TPP) among initially 12 (now 11 after the US stepped 
out)  Pacific  Rim  countries  (together  accounting  for  36  per  cent  of  the  world’s  GDP),  may 
provide incentives for enterprises to review current trade operations and for  Governments 
(including  the  European  Commission)  to  intensify  their  own  trade  talks  to  ensure  and 
improve competitiveness of their businesses and attractiveness of business environments.  

Reflecting  the  growing  interconnectedness  and  complexity  of  global  value  chains,  the 
coverage of behind the border non-tariff issues has also increased in FTA’s. EU trade policy 

150

 WTO 

of 
https://www.wto.org/english/tratop_e/tradfa_e/tradfa_e.htm 

Agreement 

Facilitation 

Trade 

28 

November 

2014, 

WT/L/940,  

151 However,  the  difficulties  to  reach  consensus  within  the  context  of  the  WTO  Doha  Development  Round 
(DDA) has contributed to bilateral negotiations (diverging from the principle of ‘single undertaking’ as pursued 
under WTO negotiations). 

152 https://www.wto.org/english/tratop_e/region_e/regfac_e.htm  

153

 World 

Trade 

Statistical 

Review 

2016, 

WTO, 

https://www.wto.org/english/res_e/statis_e/wts2016_e/wts2016_e.pdf 

98 

 
 
                                                      
nowadays takes a holistic approach, addressing vital issues for international businesses that 
go far beyond customs duty collection as already explained under section 3.2.1 and which 
expand  the  role  of  and  expectations  on  customs  administrations.  A  pressing  issue  is 
consumer protection and who is liable for malfunctions, inadequacies or damages resulting 
from imported goods. A number of countries in the WTO have proposals on how to tackle 
these,  but  many  others  want  to  only  discuss  these  under  the  Doha  Development  Agenda 
negotiations, which have been in a deadlock for a long time now.  

The ambitious EU agenda towards enhanced global market liberalisation and integration has 
recently  been  subject  to  mounting  concerns  of  European  citizens  and  intense  debates  on 
the perceived benefits of far-reaching market opening and cooperation proposed as part of 
FTA  negotiations  (such  as  in  the  context  of  the  EU  –  US  negotiations  for  a  Transatlantic 
Trade  and  Investment  Partnership  (TTIP)).  Hence,  the  trend  towards  increased  global 
integration  is  being  revisited  in  light  of  the  need  to  listen  to  citizens  and  secure  that  EU 
decision-making is in line with public expectations.  

At the same time, protectionism is on the rise all over the globe. As recently warned by the 
WTO  “between  mid-October  of  last  year  and  Mid-May  of  2016,  G20  economies  had 
introduced  new  protectionist  trade  measures  at  the  fastest  pace  seen  since  the  2008 
financial  crisis,  rolling  out  the  equivalent  of  five  each  week”154.  Moreover,  “the  system  of 
rules and regulations that has governed world trade for decades is under threat. In both the 
US  and  Europe  it  is  facing  serious  opposition”155.  Political  opposition  to  free  trade  and 
citizens’  concern  for  its  effect  are  in  fact  influencing  politicians  around  the  world  and 
generating a new wave of protectionism. The new American administration is an example of 
such  a  trend,  being  hostile  to  multilateral  trade  agreements  and  currently  envisaging 
protectionism measures156.  The climate in which the TTIP is negotiated and the opposition 
of several parties within the European Parliament exemplifies this new political climate.  

Trade barriers continue to persist; from tariffs to non-tariff barriers, including customs and 
trade  facilitation  barriers,  ultimately  restricting  market  access.  For  economic  operators, 
doing  business  in  the  EU  in  relationship  to  certain  aspects  is  still  a  matter  of  differences 
depending  on  where  you  enter  or  exit  the  EU.  For  example,  according  to  the  World  Bank 
Doing  Business  Report  2016,  the  Slovak  Republic  currently  ranks  1st  in  the  sub-ranking  on 
Trading  across  Borders,  whereas  Ireland  ranks  47.  In  addition,  the  costs  to  trade  across 
borders differs largely within the EU. 

154 World  Trade  Organisation  Report  of  21  June  2016  on  G20  trade  measures  (mid-October  2015-mid  May 
2016), 2016, https://www.wto.org/english/news_e/news16_e/g20_wto_report_june16_e.pdf  

155

https://www.ipe.com/investment/briefing-investment/world-trade-is-protectionism-on-the-

rise/10017403.article  

156 Ibid.  

99 

 
 
                                                      
Terrorism, security and safety threats  

Ensuring the security and safety of the Union and its residents is one of the most prominent 
tasks of Customs. The increasing importance of anti-terrorism and security policies over the 
past  years  is  self-evident,  due  to  the  security  challenges  Europe  is  facing.  Over  the  last 
decade  terrorism  and  security  threats  have  been  rising  on  a  global  basis.  The  terrorist 
attacks  of  11  September  2001  have  been  the  trigger  for  war  in  the  Middle  East  and  the 
coming about of several terrorist groups active in many parts of the world. Already in 2005, 
the  WCO  adopted  the  Standards  to  Secure  and  Facilitate  Global  Trade  (SAFE)  framework 
which introduced security measures for supply chains, security risk assessment and the first 
version  of  the  AEO.  The  SAFE  Framework  has  been  updated  in  2012  and  2015;  and  is 
currently  being  reviewed  to  reflect  the  current  threats  and  measures  taken  by  customs 
administrations. 

The  EU  followed  by  updating  its  Community  Customs  Code  with  security  provisions  by 
imposing the Entry Summary Declaration prior to arrival and before departure of goods and 
including  its  own  version  of  the  AEO  concept157.  In  parallel,  the  Council  adopted  the  EU 
counter-terrorism strategy which focusses on four main pillars: prevent, protect, pursue and 
respond.  Customs  plays  an  important  role  in  the  second  pillar,  protect,  which  aims  to 
protect  citizens  and  infrastructure  and  the  reduction  of  vulnerability  to  attack.  It  includes 
the  protection  of  external  borders,  the  improvement  of  transport  security  (cross-border) 
and other cross-border infrastructure158. 

Other  recent  security  threats  have  been  the  returning  immigration  crises,  where  war  and 
famine  have  driven  many  people  to  flee  towards  Europe.  Customs  needs  to  support 
European immigration services at the external borders to fight illegal trafficking of people. 
The threat to aviation security remains topical. The EU has developed a policy which aims to 
balance  security  with  other  important  aspects  such  as  travel  convenience,  protection  of 
personal data and operational factors159.   

In 2010, the “Yemen Incident” took place where improvised explosives were detected which 
were hidden in a shipment that was going from Yemen to the US via the EU. Following the 
detention of these explosives the EU implemented a number of sweeping initiatives.  

The  EU  started  a  pilot  project  in  which  it  required  a  certain  subset  of  the  Entry  Summary 
Declaration  (ENS)  for  incoming  shipments  to  be  submitted  pre-loading  in  the  country  of 
provenance, whereas the submittal normally took place latest 4 hours pre-arrival. It proved 

157 http://ec.europa.eu/taxation_customs/general-information-customs/customs-security/general_en 

158 Council  decision  on  The  European  Union  Counter-terrorism  Strategy,  Brussels,  30  November  2005; 
http://www.consilium.europa.eu/en/policies/fight-against-terrorism/?lang=nl 

159 https://ec.europa.eu/transport/modes/air/security/aviation-security-policy_en.  

100 

 
 
                                                      
that the “7 +1” data subset of the ENS allows for customs to make an immediate assessment 
of cargo security risks and has now been fully implemented.160   

Customs, as a first line of defence plays an important role in keeping societies safe, but also 
to react adequately in the case of an imminent threat (crisis management). The smuggling of 
people with ill intentions into the Union as well as weapons, other harmful instruments and 
even money needs to be kept in check. International trade supply chains are vulnerable to 
exploitation  by  terrorist  groups.  A  disruption  of  supply  chains  by  terrorists  could  bring 
international  trade  to  a  standstill.  Organized  crime  syndicates  operate  through  fluid 
networks  and  engage  in  illegal  activities  such  as  the  evasion  and  avoidance  of  duties  and 
taxes; cross-border fiscal fraud; the smuggling of drugs, dangerous, harmful and prohibited 
goods; money laundering; and trade in counterfeit goods161. 

Customs crisis anticipation, management and resilience  

This  increasing  focus  on  security  is  currently  changing  the  expectations  towards  customs 
officials  and  the  type  of  skills  required  for  their  activities.  customs  administrations  are 
tasked  with  missions  concerning  citizens’  protection  against  security  threats:  today,  in  an 
era where terrorism and other serious crimes operate on a cross-border and trans-national 
basis,  customs  administrations  are  increasingly  called  upon  to  carry  out  non-fiscal  tasks 
aimed at improving internal EU security. The customs are thus facing new challenges: they 
must ensure the smooth flow of trade while applying necessary controls on the one hand, 
and also guarantee the protection of the safety and security of the Community's citizens on 
the  other  hand 162 .  Where  terrorism  and  enemy  forces  have  become  stateless  and 
globalized,  customs  should  also  address  them  as  such  and  work  on  further  cooperation 
among Member States and between agencies. Regular communication and sharing of data 
are necessary activities to keep up with these new sorts of security threats.  

The EU implemented various activities and initiatives which brought together governments, 
private  sectors,  international  organisations  and  trading  partners.  Security  initiatives  were 
taken on the following levels: 

  Supply chain security 
  Modes of transport: 

  Air  
  Maritime 
  Road and rail 

160

 Art. 

July 
https://ec.europa.eu/taxation_customs/general-information-customs/customs-security/security_de.  

Regulation  No 

Commission 

2015/2446 

Delegated 

106 

28 

of 

2015. 

161 World  Customs  Organization,  Customs  in  the  21st  Century,  Enhancing  Growth  and  Development  through 
Trade 
2008, 
http://www.wcoomd.org/~/media/wco/public/global/pdf/topics/key-issues/customs-in-the-21st-
century/annexes/annex_ii_en.pdf?db=web.  

Facilitation 

Security, 

Border 

and 

162 European Commission website, Taxation and Customs Union: “EU Customs Strategy”, accessed on 13 March 
2018 at http://ec.europa.eu/taxation_customs/general-information-customs/eu-customs-strategy_en.   

101 

 
 
                                                      
  Other specific trade segments163  

With regard to counter-terrorism, the Council of the European Union’s strategy document 
published in 2005164 expects effective collective EU action. This supposes from EU Member 
States and European institutions to “co-ordinate [national] policies, share information about 
responses  developed  at  national  level,  determine  good  practices  and  work  together  to 
develop new ideas”. 

Customs  are  also  responsible  for  export  controls,  which  have  as  aim  that  no  sensitive 
materials  (cultural  goods,  dual-use  goods)  end  up  in  the  hands  of  foreign  enemies  or 
criminal entities.  Political tensions between the EU and Russia have resulted in reciprocal 
embargoes  and  sanctions  on  entities  and  people.  Besides  embargos  the  EU  imposes  a 
multitude  of  targeted  sanctions  on  regimes,  companies  and  people  which  need  to  be 
enforced and monitored by customs.    

However,  according  to  Member  State  representatives  present  during  the  Customs  Project 
Group  workshop  held  in  the  framework  of  this  study,  a  well-functioning  common  EU 
approach with consistent cooperation between FRONTEX, customs administrations and DG 
HOME is not in place yet and demands more attention. Data needs to be shared between 
these  institutions  and  should  even  become  accessible  when  necessary,  cooperation 
extended  whenever  this  is  required.  The  same  goes  for  data  sharing  between  customs 
administrations.  Increased  activity  by  customs  in  times  of  heightened  risk  or  tensions  is 
expected  by  the  public  and  the  government.  This  requires  the  proper  crisis  management 
within customs and between customs administrations with the possibility to create and put 
to  work  task  forces/  joint  actions  and  mobile  units  among  Member  States.  Operational 
expert teams such as CELBET are in a position to start up cooperation with  FRONTEX given 
the right capacities and funding.  

New  and  increased  expectations  towards  customs  since  the  beginning  of  the  2000s  have 
already  resulted  in  coordinated  and  actual  actions  and  competencies  undertaken  by  the 
administrations.  The  demand  for  increased  performance  of  customs  administrations needs 
to go hand in hand with an awareness campaign about the achieved results by customs in 
this  domain  up  till  now.  The  Member  States,  institutions  and  public  will  be  able  to  trust 
customs  administrations  with  funding,  capacity  and  resources  more  easily  with  the 
knowledge of the security it already offers. 

The  political  context  of  terrorism  culminated  in  an  EU  Action  Plan  to  strengthen  the  fight 
against the financing of terrorism in 2016165. End 2016, the European Commission tabled a 
legislative proposal for a new cash controls regulation that tightens cash controls on people 

163 European  Commission  website,  Taxation  and  Customs  Union:  “Security”,  accessed  on  13  March  2018  at 
http://ec.europa.eu/taxation_customs/general-information-customs/customs-security/security_en 

164 Council of the European Union, The EU counter-terrorism strategy, Justice and Home Affairs Council 
meeting, Brussels 1 December 2005, available at 
http://www.consilium.europa.eu/uedocs/cms_Data/docs/pressdata/en/jha/87257.pdf  

165 http://europa.eu/rapid/press-release_IP-16-202_en.htm.  

102 

 
 
                                                      
entering or leaving the EU with  EUR 10 000 or more in cash166. The European Commission 
proposal extended the already existing controls on amounts of cash entering or leaving the 
Union  equal  to  or  in  excess  of  EUR  10  000.  The  extension  includes  unaccompanied  cash 
(such as through postal parcels or freight consignments) and precious commodities such as 
gold.  Customs  cooperation  and  exchange  of  information  will  also  be  improved,  as  well  as 
the  actions  by  Customs  allowed  on  amounts  lower  than  the  declaration  threshold  when 
indications of criminal activity exist167.  

Cooperation,  data  sharing  and  efficient  risk  assessments  are  still  not  enough  in  times  of 
digital crime. The EU counter-terrorism strategy mentions improvements in technology for 
the  capture  and  exchange  of  passenger  data,  the  inclusion  of  biometric  information  in 
identity and travel documents. These initiatives have been developed but with the growth 
of Big Data and data analytics, customs can and needs to employ IT safety tools which are 
more  efficient  tools  to  assess  security  risks.  As  stated  above,  this  also  requires  increased 
cross-border cooperation, new equipment and new and more skills for customs officials in 
order to operate these systems. 

3.2.3 The “Other influences” cluster 
The  “Other  influences”  cluster  identifies  the  other  (General  and  Specific)  trends  that  are 
expected  to  be main themes  in the  custom  area.    They  constitute  societal  challenges that 
will  require  responses  also  in  the  way  customs  administrations  are  organised  and  interact 
with other stakeholders.  

The Other influences cluster contains:   

  The modernisation and transparency of public administrations in general and customs 
administration  in  particular  (general  trend),  defined  as  the  increased  focus  on 
resource  optimisation  (and  doing  more  with  less)  within  the  public  sector  and  the 
changes 
in  the  expectations  of  citizens  and  businesses  towards  the  public 
administrations. This specifically entails: 

  Service and compliance approach towards clients (specific trend) defined as the 
change  in  the  relationship  between  controllers  (customs  administrations)  and 
controlees  (traders)  towards  dynamics  based  more  on  trust  and  on  horizontal 
approaches.  

  More focus on trade facilitation and Single Windows approaches (specific trend) 
intended as the increased efforts in facilitating trade through support measures 
and provide single points of contact. 

166 Commission proposal for a  regulation of the European Parliament  and of the Council on controls on cash 
entering or leaving the Union and repealing Regulation (EC) No 1889/2005 of 21 December 2016,  COM(2016) 
825 Final, 2016/0413 (COD).  

167 https://ec.europa.eu/taxation_customs/individuals/cash-controls/cash-controls-new-proposal_en.   

103 

 
 
                                                      
Modernisation and transparency of public administrations 

An additional trend also affecting customs administrations relates to the general process of 
modernisation of public administrations. This is driven by technological improvements (see 
the section Digitalisation and Big Data and societal changes such as the increasing citizens’ 
expectations towards their public administrations). Modernisation of public administrations 
means  deployment  of  e-Government  strategies  and  establishment  of  new  ways  of 
interacting  between  business  and  citizens  and  public  administrations.  The  public  sector’s 
appropriation of the once-only principle for instance or the establishment of more and more 
Single  Windows/single  point  of  contacts  for  businesses  and  citizens  are  examples  of  how 
public  administrations  try  to  efficiently  take  up  the  new  role  and  services  expected  from 
them.  The  scarcity  of  resources  is  another  driver  of  modernisation.  Public  administrations 
must do more to meet increased citizens’ expectations with fewer resources.  

In  the  customs  domain,  this  trend  translates  for  instance  in  an  evolving  relationship 
between controller and controlee. Also linked to the technological developments described 
above,  methods  for  self-declaration  for  businesses  are  rapidly  spreading  and  cooperative 
ways  of  working between  economic  operators  and  customs  administrations  are  emerging. 
This  requires  a  change  of  mentality  and  paradigm  and  not  only  a  change  in  working 
practices,  as  switching  from  a  formal  relation  to  a  trust  based  approach 
is  not 
straightforward.      Technologies  such  as  IoT,  Big  Data  and  Blockchain  are  nonetheless 
facilitating  and  supporting  these  changes  and  the  modernisation  of  public  administrations 
overall as they allow to entrust economic operators with part of the controller’s work (e.g. 
encoding data on the goods exchanged) while keeping a supervisory eye on the process (e.g. 
on  the  correctness  of  information  provided)  and  possessing  means  for  detecting  and 
predicting fraud.  

An important factor that has to be taken into account in planning the future of cooperation 
in  the  customs  domain  is  the  reduced  budget  dedicated  to  the  functioning  of  public 
administrations  in  general,  and  consequently  for  customs  administrations.  These  can  be 
best  summarised  by  a  maxim  “Do  more  with  less”168 which  also  reflects  the  discussion  on 
the increasing expectations of business and citizens towards an impoverished public sector. 
On the one hand, most of public administrations have planned or will plan to reduce their 
staff, streamline their processes and reduce their estate169. There are exceptions of course 
(see the increased amount of budget allocated to customs administrations in Denmark) but 
this  trend  is  rather  consistent  across  most  of  the  European  countries.  Moreover,  these 
dissimilarities in availability of funding is a possible obstacle for cooperation. On the other 
hand,  customs  administrations  will  move  towards  a  general  increase  of  customer  self-

168HMRC Report of 7 February 2013, ‘Progress on reducing costs, HC 889, Session 2012-13, 15; 
https://www.nao.org.uk/report/hm-revenue-and-customs-progress-on-reducing-costs/. The figure shows 
where and how different tax administrations in the EU are reducing costs.   

169 Idem. 

104 

 
 
                                                      
service,  cost-effective  communication  channels  and  collaboration  with  external  service 
providers.  

With  enough  creativity,  customs  administrations  will  be  able  to  adapt  and  continue  their 
mission  of  general  interest.  Nevertheless,  the  fulfilment  of  their  mission  has  never  been 
more challenging, as fast technological developments require significant investments in new 
tools  and  capabilities.  In  terms  of  IT  systems,  Member  States  do  not  necessarily  seek 
centralisation but rather more coordination and possibly funding for the national IT related 
components. The general preference is hence for distributed systems to co-exist. 

The UCC was introduced with the aim to increase the consistency between Member States 
with  regards  to  customs  matters,  to  create  a  fully  operational  electronic  customs  system 
and improve the balance between trade facilitation and risk assessment. The UCC contains 
some important simplified procedures which also tend to be new techniques in dealing with 
customs  formalities.  These  techniques  aim  to  provide  trustworthy  traders  with  more 
facilitations and should also reduce costs and resources for customs: 

  Self-assessment170:  This  procedure  allows  an  economic  operator  to  make  customs 
entries  in  their  records  that  currently  can  be  carried  out  only  by  the  customs 
administrations,  such  as  the  determination  of  the  amount  of  import  duties  payable 
and certain other controls under customs supervision. 

  Entry  in  the  declarants  records  (EiDR):  This  allows  businesses  to  make  customs 
declarations  by  simple  entries  in  their  own  records  instead  of  having  to  submit 
complete customs declarations each time.  

  Centralized  customs  clearance 171:  This  procedure  enables  businesses  to  submit 
customs  declarations  for  all  Member  States  from  a  single  Member  State.  Economic 
operators are allowed to declare goods electronically, irrespective of where the goods 
actually  enter  or  exit  the  EU.  This  should  result  in  supply  chain  efficiencies  and  in 
lowering the costs of a supply chain, as well as enhancing the central management of 
the supply chain. 

The underlying basis for each of these simplified procedures is a relation of trust between 
the  economic  operator  and  the  customs  administrations.  The  operator  needs  to  provide 
sufficient data about itself and its operations upfront. customs administrations also require 
access  to  all  information  necessary  at  all  times,  if  it  wishes  to  perform  controls.  The 
expectation  of  businesses  regarding  these  simplifications  are  high  and  customs 
administrations need sufficient resources to properly set these up. The self-assessment and 
EiDR are already applied on a broad base, but the centralised clearance concept is still in a 
transitional phase and customs officials need to be prepared to adapt to this methodological 
change.  

170 Art. 185 UCC 

171 Art. 179 UCC. 

105 

 
 
 
                                                      
Service and compliance approach towards clients 

The  role  of  customs  in  the  supply  chain  has  been  constantly  evolving,  reflecting  global 
trends such as the interconnectedness of global supply chains and the need for facilitating 
trade, as well as the growing call for protection and risk management. In order for customs 
to succeed in balancing these roles, the relationship with the customer must be improved.  
Whereas customs have increasingly taken up a strategic role at the forefront of trade and 
security  related  policies,  leading  to  more  responsibility;  and  budgetary  and  resource 
implications, this enhanced role of customs administration in the national policy context has 
(in most EU Member States) not translated into a renewed appreciation and/or recognition 
thereof.  As  a  result,  a  growing  discrepancy  is  visible  in  many  EU  Member  States  between 
heightened  expectations  to  perform  and  contribute  to  wider  policy  objectives  on  the  one 
hand, and on the other hand the resources allocated to customs administrations.  

Throughout the EU, customs administrations are increasingly engaging in efforts to develop 
a  more  strategic  approach  to  positioning  their  organization  within  the  broader  policy 
context, showing results and best practices, and thereby ‘selling’ their services so as to gain 
recognition  and  make  a  more  successful  pledge  for  funding.  Different  EU  Member  States 
have developed  their  national  customs  administration  strategy,  supported by  social  media 
and video messages to highlight their role in the national context.  

New  strategic  directions  are  being  reflected  upon,  whereby  different  scenarios  are  being 
explored, to reflect the changed dynamics in the customs environment. For example, as part 
of the WCO exercise on ‘Customs in the 21st Century172’, different strategic considerations 
were  reflected  upon,  such  as  the  scenario  on  the  Globally  Networked  Customs,  which 
emphasizes the  need for  collaboration between  customs  and  other  stakeholders  including 
business.  

Within the European context, the role of customs administrations is described in the UCC:  

“customs administrations shall be primarily responsible for the supervision of 
the Union's international trade, thereby contributing to fair and open trade, 
to the implementation of the external aspects of the internal market, of the 
common  trade  policy  and  of  the  other  common  Union  policies  having  a 
bearing on trade, and to overall supply chain security. 

customs administrations shall put in place measures aimed, in particular, at 
the following:  

(a) protecting the financial interests of the Union and its Member States; 

(b)  protecting  the  Union  from  unfair  and  illegal  trade  while  supporting 
legitimate business activity; 

172

 http://www.wcoomd.org/~/media/wco/public/global/pdf/topics/key-issues/customs-in-the-21st-

century/annexes/annex_ii_en.pdf?db=web  

106 

 
 
                                                      
(c)  ensuring  the  security  and  safety  of  the  Union  and  its  residents,  and  the 
protection of the environment, where appropriate in close cooperation with 
other authorities; and 

(d) maintaining a proper balance between customs controls and facilitation 
of legitimate trade. ”173  

More  than ever,  customs  administrations  are  aware  of  their  changing  role  in  the  widened 
context, and the growing expectations from different stakeholders. Economic operators are 
looking  for  secured,  simplified  and  rapid  trade  facilitation,  governments  are  seeking 
enhanced  protection  of  their  citizens  and  enforcement  of  rules,  as  well  as  other  customs 
administrations participating in and relying on exchange of information.  

These  different  realities  translate 
in  different  concerns  and  priorities  for  customs 
administrations,  reflecting  their  geographical  situation  within  the  EU  (i.e.  with  or  without 
external  land  or  maritime  border),  mirroring  higher  and  lower  levels  of  incoming  and 
outgoing  trade  flows,  their  role  in  global  supply chains,  as  well  as  the  capacity of  customs 
in  terms  of  human  skills,  IT  systems  and 
administrations  and  related 
organizational  set-up.  Over  the  past  decade,  the  majority  of  customs  administrations 
throughout the EU have experienced a more strategical positioning of their organisations at 
the  forefront  of  different  policies,  such  as  trade,  security  and  border  control,  adding  an 
additional layer of pressure to perform for customs administrations.  

institutions 

On the one hand, the increased emphasis on trade facilitation and competitiveness is visible 
in  the  customs  administrations’  evolving  roles.  The  UCC  in  itself  provides  a  stronger 
emphasis  on  customer  satisfaction  and  stakeholder  engagement,  with  specific  reference 
being made to the fact that the views of economic operators should be taken into account 
when  the  customs  legislation  is  further  modernised.  The  AEO  authorisation  is  another 
example  of  the  EU  and  customs  wanting  to  move  towards  a  relation  of  trust  and  mutual 
benefit  with  stakeholders.  With  the  broadened  context  and  heightened  expectations  for 
performance  posed  upon  customs  administrations,  a  strong  impetus  is  also  given  to  the 
revitalized  partnership  between  Member  States  and  the  European  Commission,  to  allow 
(inter  alia)  for  a  stronger  role  for  customs  in  ensuring  joined-up  border  management  and 
law enforcement, developing closer cooperation and enhanced information exchange with 
administrations  involved  in  other  relevant  policy  areas.  The  recent  focus  by  the  European 
Commission  on  developing  forward-looking  strategies, 
in  the  areas  of  governance, 
performance  management  and  IT,  is  equally  to  be  understood  against  this  background  of 
the  need  to  improve  the  performance  of  customs  administrations  everywhere  in  the  EU, 
whilst dealing with diverging issues and (financial) capacity.  

On  the  other  hand,  the  increasing  role  of  EU  customs  in  the  area  of  safety  and  security, 
calling for enhanced risk management of the supply chain is equally on the rise. This need 
for  customs  to  act  to  ensure  protection  of  citizens,  as  well  as  government  revenues 

173 Art. 3 UCC. 

107 

 
 
                                                      
(preventing  fraud  and  illicit  trade),  also  spurs  the  demand  for  improved  data  quality, 
secured supply chains and operational methodologies that support the tasks of customs in 
safety and security.  

In the context of the fast changing face and means of trade, customs administrations in the 
EU are still contemplating their changing roles, and how this should translate into renewed 
strategies,  institutional  focus  and  capabilities.  Whereas  the  legislative  framework  is 
provided by the UCC, there is a growing awareness that a forward-looking approach, based 
on  clear  strategic  objectives  as  well  as  shared  visions  between  all Member  States  and  the 
European  Commission  is  required  to  ensure  competitiveness,  safety  and  Government 
revenues in the future.  

Economic operators have voiced their need for a customs union and customs administration 
that  are  partners  to  them  in  a  role  as  service  providers  supporting  a  business-friendly 
environment. It also seems that customs has listened to the private sector and is willing to 
embrace that role. The introduction of the UCC and the entry into force of the TFA already 
are steps in that direction as they provide the legal framework for more transparency into 
the rules and decisions of customs administrations, more involvement of the private sector 
in  the  decision  making  process  and  simplifications  for  those  economic  operators  who 
properly cooperate.   

But in order to move even more towards the role of service provider or trusted partner the 
Customs  Project  Group  workshop  indicated  that  the  following  topics  require  greater 
attention: 

  Development  of  project  and  quality  management  skills:  if  customs  administrations 
need to shift to a role of service provider, its officials will need to develop the proper 
project and management skills. The existing Trade Contact Group needs to be further 
developed in order for customs to receive more insights from industry and academics, 
allowing them to stay on top of important evolutions in the business landscape. The 
reaction time will need to go up which requires flexibility from both the officials and 
the procedures.  Best practices will need to be shared among customs administration 
and to ensure the application of these in practice Erasmus type exchanges should be 
organised between the administrations of Member States.  

  Standardised  business  processes:  for  customs  administrations  to  be  service-minded 
they need to anticipate new trends and changes. Task forces or specialised think tanks 
within the administration can be appointed to stay on top of such changes and trends. 
New findings need to be translated into Standardized Operating Procedures which can 
be adopted by the administrations to efficiently adapt to new scenarios. Additionally 
these  SOPs  need  governance  as  the  right  monitoring  can  make  the  SOPs  into  best 
practices  for  customs  administrations  across  the  EU.  An  important  and  growing 
problem  among  customs  administrations  in  the  EU,  which  is  currently  hampering 
modernisation, but in the future could even severely impact the capacity is the ageing 
of the administrations and the limited succession by new, young recruits.   

108 

 
 
  Trade  facilitation  and  the  development  of  the  Single  Window:  the  strategic  role  of 
customs  in  enhancing  competiveness  is  reflected  in  the  growing  emphasis  on  trade 
facilitation. In addition, the pressure to perform and modernize, equally led  customs 
in  “e-customs”  facilities  and  more  service-oriented 
administrations  to 
approaches, such as the Single Window mechanism.  

invest 

Agreed upon in December 2013, the WTO Trade Facilitation Agreement (TFA)174 aims to cut 
red tape  and  ensure  trade  can flow  smoothly  by reducing  remaining barriers  and  spurring 
collaboration and exchanging information between customs administrations. The WTO TFA 
operates  on  the  basis  of  a  set  of  binding  commitments  to  be  implemented  by  all  WTO 
members (and more flexible arrangements for developing countries). In this sense, the WTO 
TFA  and  EU  UCC  framework  both  place  a  strong  emphasis  on  collaboration  as  a  key 
ingredient to  achieve objectives  (including trade facilitation  and  protection  of  consumers). 
As part of the institutional arrangements to be fulfilled under the WTO TFA, the  European 
Commission  presented  a  proposal  to  establish  an  EU  National  Committee  on  Trade 
Facilitation (NCTF)175. The EU and its Member States, as members of the WTO, will need to 
comply  with  the  WTO  TFA.  For  the  EU  and  its  Member  States,  the  UCC  and  EU  Customs 
acquis  comply  with the obligations  in  the  TFA  and  go beyond  most  of  the best  endeavour 
provisions. However, there might be certain implementation adjustments to be considered 
in  due  course.  In  any  case,  reinforcing  and  increasing  the  attractiveness  of  the  EU  for 
businesses will remain high on the agenda for the years to come. 

The main challenge in modern trade is to balance on the one hand trade facilitation which 
needs to lead to trade growth and increased revenue against security and risk assessment 
on  the  other  hand.  International  security  threats,  terrorism  and  elements  potentially 
harmful  to  environment  have  imposed  additional  burdens  on  Customs  to  protect  citizens. 
To strike the balance is difficult and requires the availability and use of data. Although there 
is plenty of data available for analysis, the access to these data and the processing thereof is 
currently not sufficiently exploited.  

The availability of data or information allows administrations to make proper assessments 
of  incoming  trade  flows,  whether  it  is  legal  or  illegal,  safe  or  harmful.  Based  on  data  on 
economic operators customs can identify parties, recognize them, and look into their track 
records  without  losing time.  Economic operators  and  their  consignments  could  be  divided 
into  risk  levels,  where  those  providing  the  least  data  are  subject  to  controls  and  those 
providing the most  data  benefit from  the  most facilitations.  In order  to make  use  of  data, 
customs  requires  the  appropriate  digital  tools  and  resources  (e.g.  expansion  of  Smart  and 

174

 WTO 

Facilitation 
https://www.wto.org/english/tratop_e/tradfa_e/tradfa_e.htm.  

Agreement 

Trade 

of 

28 

November 

2014, 

WT/L/940, 

175 Customs expert group – International customs matters, Minutes/summary report of the 1st meeting of the 
TAXUD/7801445/17, 
Customs 
http://ec.europa.eu/transparency/regexpert/index.cfm?do=groupDetail.groupDetailDoc&id=30248&no=3. 

February 

Brussels, 

group, 

expert 

2017, 

DG 

20 

109 

 
 
                                                      
Secure  Trade  Lanes176 and  data  mining).  Administrations  should  be  encouraged  to  share 
their  information  more  with  each  other  and  connect  to  the  private  sector  and  the  online 
platforms (data protocols) to the extent possible.  

Apart from its commitment to facilitate trade , the European Commission (under the Trade 
for  All  strategy)  has  equally  committed  to  financial  funds  promoting  trade  facilitation 
compliance in developing countries and least developed countries, and to stimulate trading 
partners to adopt trusted trader programmes to address risks in global supply chains177.  

A visible trend towards enhanced customer focus in the area of customs can be illustrated 
by the growth of trusted trader programmes, and the optimization thereof by EU Member 
States.  Trusted  trader  programmes,  such  as  the  Authorized  Economic  Operator  (AEO) 
initiative,  are  a  tool  to  strike  the  right  balance  between  trade  facilitation  and  compliance 
enforcement, allowing customs administrations to focus on “high-risk” trade.  

The AEO programme is a customs-to-business partnership. Traders who voluntarily meet a 
wide range of criteria work in close cooperation with customs administrations to assure the 
common  objective  of  supply  chain  security  are  entitled  to  enjoy  benefits  throughout  the 
EU178.    Controls  are  conducted  based  on  risk  assessments.  An  AEO  is  deemed  a  reliable 
trader, therefore gets a more favourable treatment at risk assessment which leads to fewer 
customs and security controls. This is advantageous for the economic operator and allows 
customs administrations to shift focus on incoming goods/ traders with a higher risk profile. 
Data  sharing  is  essential  and  requires  further  cooperation  among  Member  States  and 
between customs administrations and the private sector.  

In  terms  of  voluntary  compliance  and  partnership/cooperation  with  businesses,  the  AEO 
programme plays an essential role179. 

The programme, which aims to enhance international supply chain security and to facilitate 
legitimate trade, is open to all supply chain actors. It covers economic operators authorised 
for customs simplification (AEOC), security and safety (AEOS) or a combination of the two. 

176 Currently there is an ongoing pilot project between the EU and Asia on Smart and Secure Trade Lines (SSTL). 
“The  SSTL  Pilot  Project  currently  operates  (approximate)  120  trade  lanes  involving  200  economic  operators 
between 16 maritime ports and messages are exchanged via the WCO CENComm platform. Due to the data 
exchange between exporting and importing customs administrations before container stuffing and container 
loading,  the  consignments  operated  under  the  SSTL  pilot  project  should  benefit  from  the  least  possible 
customs  intervention  in  the  logistical  process.”;  http://ec.europa.eu/taxation_customs/general-information-
customs/customs-security/smart-secure-trade-lanes-pilot-sstl_en 

177 http://ec.europa.eu/trade/policy/in-focus/new-trade-strategy/  

178 Such  as  centralised  clearance  (Art.  179  UCC),  entry  in  the  declarant’s  records  with  a  presentation  waiver 
(Art. 182, 3 UCC), self-assessment (Art. 185 UCC), comprehensive guarantee with a reduced amount (Art. 95, 3 
UCC). 

179 The concept of AEO was introduced in 2005 by Regulation EP and Council (EC) 648/2005 of 13 April 2005 
amending  Council  Regulation  (EEC)  2913/92  establishing  the  Community  Customs  Code,  O.J.  L  117,    4  May 
2005. 

110 

 
 
                                                      
Audits  are  conducted  before  an  economic  operator  becomes  AEO.  To  become  AEO  (for 
customs  simplifications  and  /  or  security  and  safety)  an  economic  operator  must  comply 
with the following conditions: 

 

 

the  absence  of  any  serious  infringement  or  repeated  infringements  of  customs 
legislation  and  taxation  rules,  including  no  record  of  serious  criminal  offences 
relating to the economic activity of the applicant;  
the demonstration by the applicant of a high level of control of his or her operations 
and of the flow of goods, by means of a system of managing commercial and, where 
appropriate, transport records, which allows appropriate customs controls; 
financial  solvency,  which  shall  be  deemed  to  be  proven  where  the  applicant  has 
good financial standing, which enables him or her to fulfil his or her commitments, 
with due regard to the characteristics of the type of business activity concerned; 
  practical  standards  of  competence  or  professional  qualifications  directly  related  to 

 

the activity carried out; and 

  appropriate  security  and  safety  standards,  which  shall  be  considered  as  fulfilled 
where the applicant demonstrates that he or she maintains appropriate measures to 
ensure the security and safety of the international supply chain including in the areas 
of physical integrity and access controls, logistical processes and handling of specific 
types of goods, personnel and identification of his or her business partners180. 

The programme allows customs administrations to focus on high risk operators. The benefit 
of the programme for traders is that once the AEO status has been granted, fewer checks 
give room to more efficient trade flows.  

The  administrative  process  leading  to  AEO  authorisation  on  the  other  hand  has  led  to 
renewed responsibilities and tasks for customs administrations.  

In connection to the AEO status, the Mutual Recognition Agreements (MRA) form another 
opportunity to cooperate with third countries in the area of customs security. They form the 
legal  basis  for  AEO  recognition  of  economic  operators  from  third  countries  in  the 
agreement.  Customs  cooperation  between  the  EU  and  third  countries  goes  in  some  cases 
beyond Mutual  Recognition  Agreements,  for  example focus  on  supply  chain  security, joint 
risk  rules,  creating  joint  standards  regarding  security  controls  etc.181.  Such  intensified 
cooperation  with  third  countries  also  asks  for  more  opportunities  to  discuss  and  monitor 
these initiatives together and to try to strengthen the coordination.  

A  huge  step towards further  trade facilitation  would be the  existence  of  a  comprehensive 
Single Window mechanism for cross-border traders. The Single Window initiative is part of 
the  Multi-Annual  Strategic  Plan  (MASP)  which  aims  to  make  the  whole  customs  process 
electronic.  It  is  one  of  the  main  objectives  of  the  customs  union  and  would  be  the 

180 Regulation (EU) No 952/2013 of the European Parliament and of the Council of 9 October laying down the 
Union Customs Code, OJ L 269/1, 10.10.2013.  

181 http://ec.europa.eu/taxation_customs/general-information-customs/customs-security/security_en 

111 

 
 
                                                      
simplification with the biggest positive impact for economic operators, but the development 
of  it  is  stagnating  in  the  EU.    The  EU  Single  Window  has  as  objective  to  enable  economic 
operators to electronically submit, once and for all, all information required by customs and 
non-customs legislation for EU cross-border movements of goods. The Single Window would 
serve  as  a  database  from  which  any  data  on  an  economic  operator  can  be  extracted  by 
customs administrations whenever it is needed.  

Information only needs to be provided once and can be used by the administrations for any 
case of controls, assessments, licenses, statistics etc. This mechanism exists in the EU, but is 
being  developed  through  a  phased  approach182.  Further  development  of  equipment  and 
better  cooperation  between  Member  States  and  between  government  agencies  (data 
sharing) is required. The fact that no comprehensive Single Window mechanism is in place 
in the EU continues to place abundant administrative burdens on both economic operators 
and the administrations. With today’s high cross-border trade and import/export flows risk 
assessment simplifications such as this one are necessary to make both risk assessment and 
trade  facilitation  possible.  Some  pilot  projects  have  been  set  up  which  enable  a  Single 
Window system with automated validity checks for certain data elements (e.g. the Common 
Veterinary Entry Document and other certificates). This phased approach is not moving fast 
enough  for  a  substantial  overhaul  into  a  comprehensive  Single  Window  system  and 
resources need to be made available to fasten the development.  

3.3 The Drivers 

Following  the  previous  section  on  the  external  factors  and  specific  trends  impacting  upon 
European  customs  administrations  today,  a  number  of  drivers  have  been  identified  that 
together  constitute the major  causes for  the  over-arching problem. Data  supporting these 
drivers have been collected through the fieldwork in the Member States and the Member 
State survey.  

In this regard, the survey has highlighted the fact that the challenge most frequently refer to 
as having to a considerable or great extent an impact upon the success of the customs union 
as  a  whole  is  the  unequal  capacity  of  customs  administrations  in  terms  of  IT.  The  uneven 
interpretation and implementation of the legislation comes second on the list. 

182

 https://ec.europa.eu/taxation_customs/general-information-customs/electronic-customs/individual-

projects_en.  

112 

 
 
                                                      
Figure 16 – Impact of challenges upon the success of the customs union as a whole 

1

5

Strategic obstacles

9

Legal obstacles

Administrative obstacles

Geographical obstacles

Uneven interpretation & implementation

4

10

5

11

12

15

7

5

6

3

2

3

10

Unequal capacity / Equipmment

6

9

5

Unequal capacity / IT

Unequal capacity / processes and structures

Unequal capacity / skills

7

7

7

13

8

10

6

4

4

4

5

4

5

5

4

4

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

To a small or some extent

To a considerable extent

N=25

To a great extent

Do not know or no answer

Source: Deloitte 

Among these challenges, unequal capacity in terms of IT is the driver that is most frequently 
perceived as creating a challenge for customs organisations in the coming  ten years. Then 
comes  the  uneven  interpretation  and  implementation  of  the  legislation,  followed  by  the 
unequal  capacity  of  customs  administrations  in  terms  of  processes  and  structures.

113 

 
 
 
Figure 17 – Drivers perceived as creating a challenge on customs organisations in the coming 10 years 

Strategic obstacles

Legal obstacles

8

7

5

7

Administrative obstacles

5

7

Geographical obstacles

3

Uneven interpretation & implementation

8

13

Unequal capacity / Equipmment

10

Unequal capacity / IT

18

Unequal capacity / processes and structures

Unequal capacity / skills

11

12

3

4

3

3

12

11

13

14

9

11

12

10

7

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Yes

No

No answer

Source: Deloitte  

3.3.1 Driver: Unequal capacity of customs administrations (IT and 
equipment, human resources, operational processes) 

For the customs union to operate effectively and efficiently, it is of paramount importance 
that  the  key  inputs  are  available  to  carry  out  its  functions.  Besides  rules  and  guidelines, 
customs administrations require resources to physically carry out their tasks. The first driver 
is the unequal capacity of customs administrations in terms of processes and structures, IT 
and  equipment,  as  well  as  human  resources.  Due  to  the  fact  that  administrations  are  not 
able to deploy the same capacity due to their budget, structure or internal resources, there 
is a risk that weaknesses appear and impact upon the functioning of the customs union as a 
whole.  

With the need to implement, and comply with, the UCC customs administrations across the 
EU are struggling, each in their own way, with the lack of capacity and inability to improve 
and modernize systems, resources and processes.  The large discrepancies in financial and 
institutional capacity stand in the way of enhanced collaboration and complicate a uniform 
implementation of the UCC.  

The unequal capacities of customs administrations are particularly reflected in the following 
fields: 

  Unequal processes and structures  
  Unequal skills and human resources 
  Unequal IT systems  
  Unequal availability of equipment  

114 

 
 
 
Unequal processes and structures in customs administrations 

Over  the  past  decade,  customs  administrations  in  the  EU  have  been  subject  to  increased 
pressure to perform and deliver results in the daily execution of their key tasks. At the same 
time,  budgets  of  customs  administrations  have  not  (always)  been  matched  by  the 
broadening and deepening of tasks and expectations.  

Since the economic downturn that started in 2008, customs and tax administrations across 
the  world  have  been  subject  to  efficiency  enhancing  re-organizations  to  compensate  for 
revenue  losses  as  a  result  of  reduced  incomes  from  customs  duties,  VAT,  and  other  taxes 
derived from trade goods. As a result, and a finding from the fieldwork missions, is that the 
institutional  arrangements  between  customs  and  tax  administrations  have  undergone 
substantial changes over the past decade, with a trend towards joining both functions. For 
the  core  customs  functions,  the  merging  of  customs  bodies  with 
larger  taxation 
administration has different  implications, as highlighted in various academic articles183 and 
confirmed through the fieldwork undertaken for this study.  

The  fieldwork  has  provided  insights  on  how  customs  experiences  reflect  upon  the  trend 
towards  merged  administrations  of  tax  and  customs.  In  general,  customs  administrations 
experience  a  confrontation  with  a  different  business  culture  of  core  taxation 
administrations,  which  is  often  referred  to  as  more  ‘corporate’,  more  ‘client  focused’  and 
less  ‘revenue  oriented’.  On  the  other  hand,  the  merging  trend  does  not  guarantee 
streamlined  administrative  processes;  these  often  continue  to  remain  in  separate  tracks, 
unless a substantial re-organisation process is initiated. In addition, the merging trend does 
not compensate for losses of scarce human resources needed to carry out key control and 
facilitation functions. 

  In  Denmark,  The  Danish  customs  administration  used  to  be  independent,  but 
merged with the tax administration in 2002-2003. Anno 2017, the decision has been 
taken  to  split  both  organisations  again  into  7  different  departments,  implying  that 
customs will be an independent agency again (after 15 years).  
Representatives of the customs administration mentioned that: ‘When independent, 
customs  administration  used  to  have  a  very  strong  identity  (and  kept  it  even  after 
the merge). Once merged, the tax administration has tried (and kind of succeeded) 
to change the culture of the customs administration (e.g. trying to make them more 
customer  focused).  Although  this  means  a  fresh  start,  it  might  also  bring  some 
disturbances and the cooperation with the tax administration might be injured. The 
interviewee fears that with the new split, the customs administration comes back to 
what they were. There will be however new hires (“new blood”) and that it is seen as 
a great opportunity for the customs administration. 

  In one country, a representative from the customs administration explained: ‘The 
customs administration is a dying administration. Now customs & tax is split but in 

183  For  example:  http://www.wcoomd.org/-/media/wco/public/global/pdf/topics/research/research-paper-
series/revenue.pdf?la=en 

115 

 
 
                                                      
the  future  probably  customs  will  be  merged  with  tax  and  here  there  might  be  an 
opportunity for new influx of people. However, it may probably mean a smaller role 
for customs.’  

  In  another  country,  it  is  mentioned  that  ‘customs  and  taxation  are  different 
departments  in  our  country.  There  are  areas  in  which  customs  and  tax  overlap, 
especially  in  e-Commerce,  and  more  coordination  would  be  required  between  our 
departments. We are not satisfied with the coordination with tax administration in 
our country today. It should be better’.  

  In  Hungary,  Tax  and  customs  administrations  are  merged,  making  the  exchange  of 
data  easier  and  the  cooperation  very  close.  The  interviewees  however  stated  that 
the  two  administrations  continue  to  work  separately  and  the  cooperation  could 
therefore be strengthened in the future (with the criminal department as well).  The 
tax  and  customs  administrations  have  been  merged  in  2011.  The  cooperation 
between the two administrations has been therefore strengthened. However, there 
are  problems  because  the  legal  basis  differs,  and  they  do  not  share  the  same 
responsibilities (and they often have different points of view in a same problem). 

With  the  introduction  of  the  new  UCC  framework  and  comprehensive  changes  in  the  IT 
systems, customs administrations across the EU are equally forced to assess the implications 
for  operational  processes  and  wider  organizational  set-up.  Finally,  from  a  content 
perspective, the merging of customs and taxation administrations led to a more integrated 
perspective  on  both  practice  areas.  This  has  been  mentioned  as  a  positive  aspect,  in  the 
view  of  new  trade  challenges  (such  as  e-Commerce)  demanding  for  more  integrated 
treatment of customs and taxation.  

In terms of set-up and processes, the implementation of strategic plans and performance of 
customs  administrations  across  the  EU  is  to  a  large  extent  determined  by  the  budgets 
available.  

Financial  budgets  of  customs  administrations  differ  across  the  EU,  largely  reflecting  the 
volumes of incoming and outgoing trade. Whereas Member State governments are able to 
retain 20% of the customs duties collected, the disbursement of that budget is often spread 
over  different  government  entities.  customs  administrations  are  hence  competing  with 
other institutions for their budgets at a national level. 

In general, customs administrations financial budgets show a general trend towards reduced 
spending  controls.  Whereas  the  German  customs  has  a  budget  of  EUR  2.2  billion,  and 
employing  37.000  customs  officials  in  2016184 the  Estonian  Tax  and  Customs  Board  had  a 
total budget of EUR 40.1 million in 2013. Belgian customs had a budget of EUR 196 million in 

184 http://dip21.bundestag.de/dip21/btd/18/052/1805294.pdf 

116 

 
 
                                                      
2015  (compared  to  a  budget  of  EUR  208  million  in  2013  and  employing  3.750  customs 
officials).185  

Financial resources of customs administrations are generally allocated through the national 
budget,  which  is  also  partly  contributed  through  the  customs  duties  levied  on  imports, 
exports  and  transit  of  goods.  Based  on  the  2014  Own  Resources  Decision  adopted  by  the 
European  Council,  it  is  confirmed  that  EU  Member  States  keep  20  %  of  the  amounts  as 
collection costs, whereas the European Union traditional own resources (TOR) are consisting 
of  the  rest  of  customs  duties  on  imports  from  outside  the  EU  and  sugar  levies.  These 
collection  costs  amounted  to  a  total  budget  of  EUR  4.7  billion  in  2015,  available  for  EU 
Member States to complement national budgets186.  

The  differences  in  terms  of  customs  duty  collection  (and  hence  incomes  in  terms  of 
collection costs) are clearly visible in the figure on EU revenues from customs duties in 2015 
(in  EUR  million)187.  The  national  incomes  from  duty  collection  costs  are  in  most  countries 
disbursed 
for  customs 
into 
administrations.  

the  national  budget,  and  not  guaranteed 

income 

At EU level, customs administrations have proved successful in obtaining some funding from 
different EU funds, including:  

  Structural  and  Investment  Funds  (ESIF),  which  however  cannot  cover  all  investment 
funding    needs  of  EU  Member  States  Customs  and  EU  customs  union,    because 
cohesion  policy  instruments  are  directed  to  low  income  per  capita  –  regions  and 
areas188; 

  EU Neighbourhood Instrument, especially for cross-border co-operation programmes 
(CBC) for border-crossing-point modernisations and related transport investments 

  Hercule III (OLAF) funding; 
  Co-sharing  of  equipment  funded  from  EU  funding  instruments  for  external  borders 

and security, for border guards (EBF, DG HOME). 

The  results  of  the  recent  survey  on  customs  administrations  confirms  that  a  majority  of 
them  –  17  out  of  25  –  currently  recur  to  other  programmes  for  funding  equipment.  The 
most common funding programme recurred to by customs administration is Hercules, with 

185

 http://www.knack.be/nieuws/belgie/hoeveel-kost-onze-veiligheid-en-hoeveel-mag-die-kosten/article-

opinion-526991.html 

186 See: http://ec.europa.eu/budget/mff/resources/index_en.cfm 

187 See: http://ec.europa.eu/budget/figures/interactive/index_en.cfm 

188 The  Council  Conclusions  8761/3/13  of  21.5.2013  (Strengthening  the  Security  of  the  Supply  Chain  and 
Customs  Risk  Management,  UD  90  ENFOCUSTOMS  84  ENFOPOL  135)  requested  the  Commission  and  the 
Member  States  to  maximize  the  access  of  customs  to  the  relevant  EU  funding  mechanisms  (see  p.  5  of  the 
text).  

CPR Regulation (1303/2013) (OJ 347/422, 20.12.2013) makes reference that Member States shall promote the 
use  of  ESI  Funds,  where  appropriate,  for  the  creation  of  European  transport  corridors,  including  supporting 
modernisation of customs. 

117 

 
 
                                                      
11 respondents out of 25 indicating they made use of this source. Three respondents have 
also declared recurring to structural funds, of which two to ESF and one to IPA.189 

Most  of  the  respondents  declare  however  not  having  an  easy  access  to  other  sources  of 
funding.  The  main  obstacles  reported  by  the  respondents  are  related  to  complicated 
procedures  or  bureaucracy,  internal  competition  or  different  priorities.  A  respondent  also 
emphasized  that  these  funds  are  not  designed  to  support  customs  needs  or  only  very 
partially. 

With  a  widening  of  tasks,  and  reducing  budgets,  customs  administrations  face  significant 
funding  gaps,  impacting  upon  the  ability  to  strengthen  capacity  in  the  IT  and  equipment, 
human  resources  and  processes  as  well  as  to  cooperate  with  internal  and  external 
stakeholders.  

According to information gathered from Member States by DG TAXUD, the investment gap 
amounts to EUR 2.3 billion EUR over 5 years. According to DG TAXUD surveys held amongst 
Member  State  customs  administrations,  the  following  investment  funding  gaps  were 
identified  following  the  2013/2014  survey  (shown  as  percentage  of  total  customs  related 
funding gaps): 

  Customs infrastructure (37.6 %); 
  Customs equipment (29 %); 
  Customs systems (27.3 %); 
  Customs administrational capacity building (2.7 %); 
  Other needs (3.3 %). 

In absolute terms, the customs investment funding gap of 15 EU Member States amounted 
to a total of EUR 1 293 million, based on the data gathered through the 2013/2014 survey 
(based on reporting from the DG TAXUD.R / DG TAXUD.PA 2013/2014 survey). 

Figure 18 – EU Revenue from customs duties in 2015 in Euro million  

189 Replies to questions 11 and 12 of the survey. 

118 

 
 
 
                                                      
Source: EU financial budget 2015 

With  the  increase  and  broadening  in  tasks  and  responsibilities,  customs  administrations 
have  become  more  pro-active  in  identifying  potential  financial  resources  and  investments 
from national and international (EU) budgets.  

  In some instances, customs administrations need to set-up new processes, in order 
to  comply  with  the  UCC.  For  example,  whereas  all  EU  Member  States  needed  to 
introduce the guarantee management system, some EU Member States did not yet 
have relevant legal provisions to cope with guarantees in a customs context.  

  In  light  of  the  changing  realities  and  future  roles  of  customs,  some  customs 
administrations  in  the  EU  have  found  that  the  current  organizational  set-up,  the 
enterprise  architecture  and  operational  processes 
require  a  complete 
modernization. Building on a long-term vision for the role of the (national) customs 
administration,  there  is  a  visible  trend  towards  the  design  of  (agile)  new  customs 
processes and work flows. Whereas the longer-term changes in the area of customs 
may require a substantial overhaul of the operational processes and organizational 
set-up, the majority of customs administrations in the EU should focus on ensuring 
that operational processes support the changes in legislation and IT systems.  

Unequal availability of human resources and skills 

Securing a high level of skills and knowledge of customs staff is key to the performance of 
national  customs  administrations  in  implementing  the  EU  and  national  legislation,  and 
carrying out the day-to-day tasks. In reality, customs administrations find that securing the 
appropriate numbers and levels of their staff is a highly challenging aspect of their business.   

119 

 
 
 
Despite the availability of national customs training programmes, and the strong support of 
the  European  Commission  through  training  strategies,  concepts  and  tools  (under  the 
current  and past  Customs  programmes),  it  remains  crucial to  continue to  invest  in  human 
resources  capacity  to  support  entry  of  new  staff,  introduce  new  skill-sets  and  support 
broadening of expertise.  

This especially came forward in the fieldwork findings in which you can see the rise of a dual 
challenge in human skills and expertise.  

On  the  one  hand,  there  is  a  broadening  of  the  responsibilities  of  customs  officials  which 
results in the necessity of skills and expertise in a wider number of areas. Think for example 
about the rise of new types of trade and technological inventions. Today, the use of drones 
has become more frequent, for example to drop packages across the border.  

Belgium  is  a  good  example  of this.  We  see that the  customs  administrations  have  a  lot of 
responsibilities.  They  are  involved  in  73  different  policy  domains  and  their  responsibilities 
often  even  go  outside  the  pure  customs  domain.  Regarding  waste  streams,  the  customs 
officials for instance are authorised to stop a suspicious transport. Nevertheless, the officer 
still  needs  to  inform  the  environmental  inspection  before  any  further  action  can  be 
undertaken. The Belgian customs administration has even done a strategic exercise mapping 
its core responsibilities. 

On the other hand, new challenges and changing trade demand that customs officials have 
specialised  knowledge  and  skills,  including  through  on-demand  experts.  The  customs 
administrations  need  the  knowledge  to  see  where  things  are  hidden,  they  are  in  need  of 
special trainings in practice and have to be aware of the existing and applicable legislation. 

For example, in the Netherlands the fieldwork showed that the customs administrations use 
a highly specialised team of divers in order to be able to find drugs underneath vessels. This 
proves there is a need for very specifically skilled personnel in order to be able to keep up 
with changing circumstances. 

In  several  countries,  for  example  in  Hungary  and  Malta,  the  customs  administrations  use 
sniffer  dogs  in  order  to  track  drugs  and  cigarettes  more  efficiently.  Of  course,  customs 
officials are mostly trained to read the body language, but they do not have enough time to 
do  a  risk  analysis  of  each  and  every  passenger.  Therefore,  modern  technology  such  as 
scanners and sniffer dogs are so important. In Denmark, sniffer dogs are even being used in 
cooperation with the Marine. As the Danish customs administration does not have ships, it 
needs to work with the Marine. 

Thirdly, new ways of working and the ‘doing more with less’ trend results in a pressure on 
the human resources already available to obtain new skills and become more experienced. 

We see this in Malta, where the administrations are working closely together with the police 
forces. For example, the police force does not have formal responsibilities with regards to 
smuggling. However, they have combined approaches in drug smuggling and cigarettes. So 
whenever the police or the customs administrations have any information, they will inform 

120 

 
 
each  other  and  work  together.  If  needed,  the  customs  administrations  will  provide 
equipment or assets to help the police. This proves there is a close collaboration that keeps 
the  community  closely  tied.  Next  to  a  close  collaboration  with  the  police,  the 
administrations  also  work  together  with  EUROPOL  and  they  attend  several  meetings  to 
which they get invited. 

Nevertheless,  they  are  understaffed  severely  and  they  need  to  develop  their  own  human 
resources.  As  a  new  generation  is  coming  in,  they  are  experiencing  a  knowledge  drain 
because  of  the  retirement  of  highly  skilled  people.  Especially  because  of  the  increasing 
requirements under EU regulations, more subjects need to be covered at the border which 
results in a need for more human resources, but also the right people that are skilled and 
have the knowledge to do so. 

Resembling  the  situation  in  Malta,  the  Belgian  customs  administrations  also  work  closely 
together with the police. Due to the abovementioned expansive amount of responsibilities, 
human  resources  are  limited.  Data  and  its  use  are  therefore  fundamental  for  the  Belgian 
customs administration as the restricted amount of human resources require efficiency. This 
efficiency  can  be  increased  via  risk  analyses.  In  order  to  use  such  risk  analysis  in  the 
workplace, one of the departments of the Belgian customs administration is fully focused on 
risk analysis. 

Fourthly, there is an integration of tax and customs administrations. This of course results 
in shared HR services which demands for new models of training and a transfer of skills and 
knowledge. 

For  example  in  Hungary,  the  tax  and  customs  administrations  are  merged  since  2011, 
making the exchange of date easier and the cooperation very close. However, they remain 
to  work  separately  and  the  cooperation  could  therefore  be  strengthened  in  the  future.  In 
Denmark, the customs administration used to be independent. However, they have merged 
with the tax administration in 2002-2003.  

Fifthly,  the  availability  of  new  technologies  does  not  necessitate  physical  presence  at  all 
times for training.  Webinars  and  (on  demand)  video  conferences  would  allow  for  efficient 
transfer  of  skills  and  knowledge,  whereas  in  specific  case  physical  presence  is  required 
(practical trainings). 

In  some  countries,  such  as  in  Croatia,  Belgium,  Estonia  and  Italy,  it  was  mentioned  that 
webinars and web conferences save time and money as this is better than to have everyone 
travelling everywhere. It is a more efficient way of training as it can be related to a specific 
issue preparing something without having to involve a lot of people. 

On  the  demand  side,  the  complexity  of  the  problem  of  customs  human  resources  is 
especially linked to the fact that training programs are still widely divergent across the EU, 
resulting in different skills and expertise levels. This is an aspect that was confirmed in the 

121 

 
 
European Commission Study on the Evaluation of the customs union (2013)190: “A majority 
of the other authorities surveyed find that national customs administrations have sufficient 
knowledge  of  the  applicable  legislation  and  procedures  relevant  to  their  activities  in  the 
respective  domains  of  the  other  authorities  surveyed.  However,  results  from  the  desk 
research  show  that  there  is  a  need  to  create  a more  uniform  training  programme  to  align 
levels of knowledge of customs officials within the EU”191. 

In  order  to  address  this  problem,  DG  TAXUD  has  developed  the  common  training  and 
education framework for customs profession with the EU, under the Dublin Strategy, as “a 
key  step  to  achieve  improved  customs  operations  and  better  organizational  performance 
throughout  Europe”192.  Acknowledging  the  diverging  interests  across  the  EU  in  a  common 
training programme, the EU Competency Framework for Customs now fulfils in a common 
core programme, which individual organizations can use as a basis to determine and deliver 
development. 
own 

training 

and 

190 Study  on  the  Evaluation  of  the  EU  Customs  Union  (Specific  Contract  No.  13  implementing  Framework 
Contract No. DG TAXUD/2010/CC/101) 

191 Ibid. 

192 DG TAXUD, ‘The Dublin Strategy’ 

122 

 
 
                                                      
Figure 19 - EU Competency Framework for Customs 

Source: DG TAXUD 'Dublin Strategy, A Strategic Performance Framework for the Customs Profession 2012-2015 
through training and development'193 

With the widening of the customs administrations tasks and roles, covering a wide number 
of legislations outside the UCC, the demand for expertise in specific areas is equally growing. 
A  good  example  is  the  area  of  tariff  classification  or  Binding  Tariff  Information,  which  was 
found as a particular area where customs administrations are in need of expertise.  

Classification  expertise:  by  pooling  together  resources  and  expertise  in  a  Classification 
Expert  Team  under  the  Customs  2020,  the  time  required  to  solve  complex  tariff 
classification issues has been reduced from ten months in 2013 to six months in 2015 (based 
on DG TAXUD progress report 2015). Through the expert team, additional consultation and 
coordination  between  Member  States  was  equally  supported,  which  further  led  to 
improvements.  

In  a  fast  changing trade and  security environment,  the  EU  legislative  framework  is  equally 
evolving and impacting upon custom expertise. In addition, new types of trade (such as e-
Commerce)  lead  to  new  challenges  in  terms  of  expertise.  The  need  for  new  expertise  is 
directly  linked  to  new  legislation  being  introduced,  or  the  changing  face  of  trade.  New 
legislative initiatives on the EU level implicating customs are also not just limited to trade, 
but also touch upon domains that are new to customs officials. Examples are the intellectual 
property protection, environmental and health protection, technical standards etc.  

As  a  result of  the  European  Commission 2016  Action Plan  to  step up the  fight  against  the 
financing  of  terrorism,  the  recently  proposed  EU  rules  on  import  of  cultural  goods, 
prohibiting imports of cultural objects older than 250 years without a written declaration or 
import certificate, will require expertise to be made available to clarify and value complex 
cases.  

193

 See: 
https://ec.europa.eu/taxation_customs/sites/taxation/files/common/tenders_grants/tenders/resources/2015
_ao_01/a11_dublin_strategy.pdf 

123 

 
 
 
                                                      
With customs officials increasingly taking up a role in the area of border enforcement, the 
need for additional skills equally arises.  

In some Member States, careers in customs also tend to be more attractive than in others in 
terms  of  salary  conditions,  working  environment  and  even  prestige.  In  general,  customs 
seem not able to attract young talent in sufficient quantities and the customs work force is 
ageing.    

Unequal capacity to implement and modernize IT systems 

As specified in the state of play of the IT capacity building (cf. chapter 2), the digitalisation in 
the customs ecosystem has gradually increased, resulting in a growing number of electronic 
customs  interactions  and  systems.  This  increasingly  electronic  character  implies  that 
customs administrations rely largely on Information and Communication Technology (ICT) to 
execute their mission. In the EU, customs administrations use a diversity of ‘core’ electronic 
customs  systems  at  the  national  level.  The  various  customs  controls  are  nowadays  for 
instance largely based on risk analyses. Such risk management processes and tools generally 
determine  a  risk  profile regarding  customs declarations  using electronically provided  data. 
Nevertheless,  a  set  of  essential  customs  processes,  from  pre-arrival  to  arrival  and  post-
arrival,  are  supported  by  different  electronic  customs  systems  that  are  implemented  and 
managed in cooperation with the European Commission and other countries at the EU level. 
In  this  respect,  the  electronic  customs  project  and  the  Union  Customs  Code  (UCC)  in 
particular  comprise  the  development,  deployment,  operation,  maintenance,  support,  as 
well as quality assurance of some electronic customs systems. Hence, in the customs union 
and  in  the  increasingly  interconnected  global  economy,  electronic  customs  systems  and 
their interoperability are key. 

Regarding  the  capacity  and  capabilities  of  national  customs  administrations  and  the 
European  Commission  to  implement,  manage  and  modernise  electronic  customs  systems, 
four different types of implementation/modernisation have to be considered: 

  Central 

implementation  –  The  European  Commission 

full 
functionality  of  the  system.  The  EU  Member  States  may  be  affected  in  terms  of 
development, since they are often required to implement an interface to the central 
system (e.g. TARIC); 

implements  the 

  Distributed  implementation  –  The  European  Commission  designs  and  implements 
the central components of the system. The EU Member States design and implement 
the  national  components,  which  implement  the  core  functionality  of  the  system. 
Common  technical  specifications  are  developed  by  the  European  Commission  (e.g. 
NCTS); 

  Hybrid  implementation  –  The  Member  States  can  implement  some  components  in 
the  national  domain  or  use  centrally  implemented  components  (e.g.  Customs 
Decisions); 

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  National implementation – The EU Member States implement the full functionality in 
their  national  domain.  Common  technical  specifications  are  not  necessarily 
developed by the European Commission and, when available, more an outline of the 
functionality required (e.g. the system to process temporary storage declarations). 

Analogously, four types of managing the electronic customs systems should be considered: 

  Central management – The system is managed by the European Commission. In such 
cases,  the  European  Commission  also  provides  the  services  for  the  operations  and 
the use of these services. Moreover, the information management is open for users 
of the European Commission and the EU Member States (e.g. TARIC); 

  Distributed management – The European Commission manages central components 
of  the  system  and  maintains  common  technical  specifications.  The  EU  Member 
States manage the national components, implementing the core functionality of the 
system (e.g. NCTS); 

  Hybrid management – The EU Member States can manage some system components 
in  their  national  domain  or  use  the  centrally  managed  components.  Therefore, 
central components can coexist with national ones managed in Member States (e.g. 
EOS); 

  National  management  –  The  system  is  only  managed  by  the  EU  Member  States  in 

their national domain (e.g. the Import Clearance System). 

It is clear that the EU Member States have a prominent role in national and hybrid settings 
while the European Commission has a prominent role in the central and distributed settings. 
On  the  one  hand,  central  settings  may  offer  the  advantage  of  lower  costs  compared  with 
national  settings.  On  the  other  hand,  some  EU  Member  States  could  prefer  in  particular 
situations  distributed  or  hybrid  implementation,  management  and/or  modernisation  of 
some electronic customs systems. In particular, from the national perspective, the question 
is  often  where  and  how  the  governance  of  national  (components  of)  electronic  customs 
systems  can  be  organised  most  effectively  and  efficiently,  while  providing  the  highest 
guarantees in terms of their performance and security. 

The existing Customs 2020 programme offers a budget of approximately EUR 426 million for 
IT capacity building, representing 82% of the programme’s total budget. This budget funds 
the  complete  development,  deployment,  operation,  maintenance,  support,  as  well  as 
quality assurance  of  the  Union  components  of  electronic  customs  systems.  As  specified  in 
the state of play of the IT capacity building (cf. chapter 2), there is little room for error or 
new  challenges.  Hence,  the  long-term  scalability  and  sustainability  of  the  European 
Commission’s  IT-related  governance  model  is  under  pressure.  Furthermore,  the  extensive 
budget  spent  on  the  electronic  customs  systems  implies  that  there  is  limited  funding 
available for financing the other needs under the Customs 2020 programme. 

At  an  aggregated  level,  the  EU  Member  States  spend  a  significantly  greater  amount  of 
budget  on  developing,  deploying,  operating,  maintaining,  supporting  and  assuring  the 

125 

 
 
quality  of  the  national  (components  of)  electronic  customs  systems 194.  For  instance, 
according to the Belgian customs administration, ensuring the actual implementation of the 
MASP will require more than EUR 66 million between 2015 and 2020. 

From the perspective of the EU Member States, it is evident that electronic customs systems 
have a significant impact on customs administrations – both in terms of financial and human 
resources  required.  This  especially  accounts  for  the  implementation  and  modernisation  of 
the  electronic  customs  systems.  In  particular,  customs  administrations  across  the  EU  are 
currently confronted with the development, deployment, operation, maintenance, support, 
as well as quality assurance of some massive electronic customs systems related to the UCC. 
The) comprises for instance a size and scale being some ‘quantum different’ compared with 
other electronic customs systems. Consequently, different Member States are still debating 
the  ICS2  project,  although  the  legislative  basis  at  the  EU  level  already  exists.  In  concrete 
terms,  some  EU  Member  States  argue  that  the  costs  and  complexity  related  to  upgrading 
the Import Control System outweigh its potential benefits. 

Furthermore, the timing included in the UCC and the UCC Work Programme turned out to 
be  too  ambitious.  In  concrete  terms,  as  indicated  in  the  state  of  play  of  the  IT  capacity 
building (cf. chapter 2), the 2017 revision of the MASP envisions to deploy all UCC central 
systems  by  the  end  of  2020  and  to  achieve  certainty  regarding  the  system  specifications 
before  2020.  The  legacy  to  UCC  transition  of  AES,  ICS2  and  NCTS  is  intended  to  proceed 
during the 2021-2025 period, whereas the other UCC systems (CCI, GUM and PoUS) should 
be deployed in parallel by end 2025. Therefore, both the European Commission and the EU 
Member  States  will  need  to  continue  funding  and  implementing  substantial  electronic 
customs projects to ensure the further digitalisation and optimisations in this regard. 

In addition, the EU Member States are organised and equipped quite differently to develop, 
deploy,  operate,  maintain,  support  and  assure  the  quality  of  their  (components  of) 
electronic  customs  systems.  As  the  electronic  customs  systems  imply  a  relatively  similar 
burden for any EU Member State, particularly from an implementation perspective and no 
matter the size of the country195, it is clear that smaller countries are more likely to suffer 
from  challenges  related  to  their  capacity  and  capabilities  than  larger  Member  States. 
Consequently, the EU Member States have quite different concerns with respect to their IT 
infrastructure,  implementation,  management  and  modernisation.  In  particular,  some 
Member  States  have  already  indicated  that  their  capacity  and  capabilities  to  implement 
specific electronic customs systems is limited and financial support from the EU level would 
be appreciated. 

194 Communication  from  the  Commission  to  the  European  Parliament,  the  Council,  as  well  as  European 
Economic and Social Committee of 21 December 2016 on developing the Customs Union and its governance, 
COM(2016) 813 final. 

195 When the size of a country increases, it is conceivable that the load on the electronic customs systems (e.g. 
the  number  of  transactions)  will  rise.  Nevertheless,  especially  from  an  implementation  perspective,  the 
introduction  or  modernisation  of  a  system  includes  quite  similar  efforts  (e.g.  for  coding  and  testing  the 
software) across the various EU Member States, no matter their size. 

126 

 
 
                                                      
Furthermore,  it  should  be  noted  that  the  Member  States  often  need  to  implement, 
modernise  and  manage  similar  national  (components  of)  electronic  customs  systems. 
Nevertheless,  they  generally  do  not  consider  IT  collaborative  initiatives,  resulting  in 
duplications  of  systems  and  investments.  In  particular,  the  EU  Member  States  could 
collaborate  in  specific  areas  to  design  and  develop  common  national  (components  of) 
electronic  customs  systems.  These  systems  may  be  deployed  centrally  or  by  one  country 
and  shared  by  others.  Alternatively,  the  national  (components  of)  electronic  customs 
systems may be designed and developed centrally, with support of particular experts of the 
EU Member States. 

is  also  considerable  diversity 

in  the  organisational  structure  of  customs 
There 
administrations for developing, deploying, operating, maintaining, supporting and assuring 
the  quality  of  their  national  (components  of)  electronic  customs  systems.  Some  Member 
States  have  for  instance  dedicated  departments  for  implementing  and  managing  customs 
systems, whereas other EU Member States have a shared IT department for both taxation- 
and  customs-related  IT.  Some  EU  Member  States  have  many  officials  to  implement  and 
manage electronic customs systems, whereas other Member States mainly use outsourcing 
and  industry  for  these  purposes.  Such  differences  imply  unavoidable  challenges  to 
cooperate effectively and efficiently amongst the various EU Member States. 

Moreover,  with  respect  to  expertise  available,  there  is  significant  diversity  across  the 
Member States. Some EU Member States have for instance dedicated risk analysis units that 
are  staffed  by  an  extensive  group  of  top-notch  data  scientists.  Other  EU  Member  States 
have difficulties in attracting the right talent for their risk analysis units, for instance due to 
the relatively long throughput time of their hiring processes and/or the relatively low salary 
offered compared with industry. In general, the diversity in terms of amount and expertise 
of  human  resources  is  significant  across  the  EU  (cf.  unequal  capacity  in  terms  of  human 
resources). 

less’.  As 

Nevertheless,  customs  administrations  are  confronted  with  the  growing  reality  of  ‘doing 
indicated  before  the  responsibilities  of  the  Belgian  customs 
more  with 
administration  for  instance  extended  to  an  astonishing  73  policy  areas,  outside  the  pure 
customs  area.  Therefore,  electronic  customs  systems  also provide opportunities to  reduce 
costs  and  optimise  customs  processes,  enabling  higher  overall  performance  and efficiency 
of customs. 

In this respect, the visions concerning the use of electronic customs systems still vary largely 
across  the  different  EU  Member  States.  Next  to  these  different  visions,  the  EU  Member 
States sometimes have various visions regarding the use and value of data and information. 
Some  countries  focus  on  trade  facilitation  and  try  to  limit  as  many  ‘unnecessary’  physical 
customs controls as possible by using risk analysis processes and tools that leverage various 
sources of data. Such countries sometimes also consider the electronic customs project and 
the  UCC  in  particular  as  an  essential  catalyser  for  the  modernisation  of  the  complete  IT 
infrastructure  in  the  EU  and  its  Member  States,  instead  of  a  pure  legislative  obligation. 
Other  countries  apply  physical  customs  controls  more  extensively  to  manage  the  risks  of 

127 

 
 
illicit  behaviour  and  trade,  as  well  as  fraud.  Therefore,  these  countries  rely  less  on  risk 
analysis  processes  and  tools.  As  such,  next  to  the  obligations  related  to  the  electronic 
customs  project  and  the  UCC,  there  is  a  clear  difference  in  maturity  regarding  electronic 
customs systems across the EU. 

Following different visions with respect to the use and value of data and information, there 
is also significant variation in the amount and types of data collected at the national level. 
Next to the mandatory data collection for customs (e.g. through standardised data formats), 
some  EU  Member  States  collect  a  broad  diversity  of  other  data  variables.  Such  countries 
often  have  well-established  connections  with  data  sources  outside  the  pure  customs  area 
(e.g. databases of other governmental departments). In specific situations, these countries 
even experiment with innovative data technologies (e.g. machine learning). Other countries 
solely gather and have access to the bare minimum of customs-related data. Consequently, 
as  the  data  sources  vary  significantly  across  the  EU,  there  exists  a  risk  that  different 
countries do not have similar knowledge (in terms of access to data) in the field of customs. 

In general, the customs union is characterised by some vulnerabilities regarding the capacity 
and  capabilities  to  implement,  manage  and  modernise  electronic  customs  systems.  If  a 
Trans-European Systems fails or cannot be developed due to limited resources, all Member 
States  are  affected.  Moreover,  the  maturity  of  electronic  customs  systems  differs 
significantly across the EU Member States. The implementation of the various UCC systems 
happens for instance at different speeds across the EU, as can be consulted in the national 
planning  consolidation  documents 196 .  However,  an  adequate 
implementation  and 
management  of  electronic  customs  systems  is  included  in  the  electronic  customs  project 
and the UCC remains key to avoid exploitation of ‘weak’ links in the EU customs union. 

Unequal capacity for (advanced) customs control equipment 

For  customs  administrations  to  carry  out  customs  controls  at  the  external  border,  the 
availability  of  appropriate  equipment  and  technology  is  deemed  crucial  to  ensure  their 
controls  are  comparable  at  different  border  crossings  and  contribute  to  various  missions: 
protection of  financial  interests  of the  Union  and  its  Member  States, blocking  illegal  trade 
which on one hand harms the financial interest of the Union and its Member States and on 
the other hand potentially risks global and EU safety and security. In this sense, the control 
mission  of  customs  pertains  both  to 
imports  and  exports,  with  export  controls 
encompassing  the  goods  that  are  identified  on  national  control  lists  or  destined  for  third 
countries  that  are  on  sanctioned  country  lists.  Without  the  appropriate  equipment,  there 
may  be  increased  risk  that  controls  become  time-consuming  for  customs  and  resulting  in 
unnecessary  burdens  and  delays  for  economic  operators.  On  the  other  hand,  inefficient 
controls  may  also  impact  negatively  on  the  chances  that  illicit  trade  or  security  risk  is 
identified.  

196

 Available 
programme_en 

at 

https://ec.europa.eu/taxation_customs/business/union-customs-code/ucc-work-

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Customs  administrations,  especially  those  geographically  placed  at  external  and  land 
borders of the EU, are increasingly calling upon the use of advanced scanning and tracking 
equipment. The use of sophisticated and up to date equipment is necessary to enable the 
customs  administrations  to  cope  with  broadened  tasks,  as  a  result  of  the  new  roles  of 
customs  in  combating  fraud,  preventing  illicit  trade  and  other  serious  crimes  on  a  cross-
border and transnational basis.  

The  availability  of 
administrations to purchase advanced equipment.  

financial  resources 

is  however  a  pre-condition 

for  customs 

The main findings from fieldwork to 9 EU Member States showed that the availability and 
use  of  customs detection  and  control  equipment  faces  a  variety  of  challenges  (hard  and 
soft): 

  A  lack  of  quantitative  and  qualitative  data  on  the  availability  of  and  experiences 

with customs equipment throughout the EU. 

Regarding  sea  border  protection,  the  disposal  of  ships  is  also  a  concern  for  many 
Member States. For example in France, despite the high investment jointly realized with 
the European Commission for the Mediterranean marine fleet, customs administrations 
cannot  rely  on  the  availability  of  those  ships  which  are  mainly  dedicated  to  FRONTEX 
missions.  

This also implies a tight cooperation with the Marine for Member States since customs 
do  not  have  their  own  dedicated  fleet.  On  that  regard,  better  information  should  be 
available.  Since  ships  constitute  a  heavy  investment,  those  could  also  be  shared  by 
different Member States in a same region.  

Some  possible  solutions  raised  were  for  example  a  (cloud-based)  equipment  mapping  or 
monitoring tool.  

  Procurement  of  equipment  remains  a  time-consuming,  complicated  process  for 

customs administrations with a costly outcome.  

Neither  funding  for  new  equipment,  nor  maintenance,  is  provided  under  the  customs 
programme.  Instead, Member  States  use  funding  under  different programs  from  OLAF 
since on a national allocation, there is generally not enough budget.  

On the supply side, the market is dominated by three main players holding 99% of the 
market, thus limiting competition (and price lowering) in the market.  

For  example,  46%  of  BCPs  lack  scanners  for  cargo  and  vehicle  inspection  in  Poland.  In 
Croatia,  customs  made a  procurement  of  the  x-ray  system for the port of  Rijeka.  They 
estimated  a  budget  between  EUR  1.5  to  2  million  according  to  the  market  prices. 
However,  OLAF  granted  them  EUR  1.2  million  and  so  they  bought  the  cheapest 
equipment, which is believed to be of poor quality. Croatian customs pointed out that 
only  one  company  answered  to  their  public  procurement  so  they  did  not  have  the 
choice.  

129 

 
 
According  to  the  information  gathered  from  Member  States,  the  investment  gap 
amount  to  EUR  2.3  billion  over  five  years.  Depending  on  the  EU  co-funding  rate,  the 
necessary facility could range between EUR 100 million / year (25% from EU funding) to 
EUR 200 million / year (50%).  

Some  possible  solutions  were  raised  such  as  facilitation  of  joint  procurement  or  the 
organization of Equipment testing ‘fairs’. The idea would be to calculate together what the 
needs of each administration are and make one common procurement for all EU countries 
in order to exploit economies of scale. The possibility to test the equipment is also crucial to 
many Member States.  

  Maintenance  of  equipment  poses  a  financial  burden  often  overlooked.  Current 

funding for maintenance inadequate (too short period of three years). 

Dominant  market  players  also  impact  upon  maintenance  contracts  as  customs  are  not 
free to contract maintenance from another company. More competition is also needed 
for maintenance.  

Here, one of the solutions proposed was to put the maintenance on a period of ten years, to 
allow the three main companies to compete over the maintenance, thus resulting in lower 
prices.  

  The ‘soft’  equipment  inter alia relates to: human  resource  skills  to ensure optimal 
use of equipment, and human resource availability (especially due to e-Commerce). 

While cross-border trade and customs competences have been growing, the number of 
customs  officials  overall  stays  the  same  or  drop.  Even  though  the  customs  process  is 
tending to  become  more  IT  based, this  way  of working  still  requires  enough  staff  who 
can  manage  the  IT  systems.  Contextualized,  it  means  for  example  that  there  are  84 
customs officials per BCP in Poland, but only 31 in Estonia and even 20 in Croatia.  

Possible  solutions  were  raised:  for  example  control-related  trainings  which 
include 
equipment  use  (dedicated  training  grounds),  some  exchange  on  experiences  with  specific 
types of equipment. 

 

Innovative solutions and collaborations are developed and needed to respond to a 
changing trade landscape (including e-Commerce).  

There is a need to review value added by equipment in the context of new crises (such 
as  the  immigration  crisis)  and  new  types  of  trade  (digital  trade,  e-Commerce).  As  a 
result, the concept of borders and need for equipment is also changing and increasing 
the need for new types of equipment and scanning.  

For example, in Italy, customs administration has entered into cooperation with university 
to develop a new type of non-intrusive infra-red detection equipment to enable higher rate 
of  scanning  of  e-Commerce  packages  (low  value)  without  disrupting  the  supply  chain. 
Similarly  in  Belgium,  a  preliminary  study  has  been  launched  together  with  the  Catholic 
University  of  Leuven  and  particularly  with  IMEC  (Interuniversitair  Micro-Electronica 

130 

 
 
Centrum), a program focusing on microelectronics, in order to reach a 100% goods scanned 
when crossing the border (currently only 2% of the imported goods are scanned).  Member 
States are also willing to participate into a reflexion about how innovative technology (for 
example drones) could help.  

Customs  still  rely  on  traditional  customs  equipment  and  tools  to  inspect  vehicles  and/or 
trace specific materials, such as telescoping mirrors, endoscopes, metal detectors, as well as 
equipment to trace drugs or explosives (trace detector devices) and detection dogs.  

However, in order to effectively carry out day-to-day tasks including high-risk controls and 
identify  possible  illicit  trades  and/or  fraud,  there  is  a  clear  trend  towards  the  use  of 
advanced  scanning  and  tracking  equipment  especially  by  those  customs  administrations 
with  high  intensify  of  border  crossings  from  third  countries.  Examples  of  advanced 
equipment for tracking include: ultrasonic devices (for checking tires and fuel tanks), density 
meters  (determining  the  density  of  material  through  radioactive  sources),  drones  etc. 
Advanced  equipment  is  equally  on  the  rise  in  the  testing  of  samples,  such  as  chemical 
colorimetric  tests,  spectroscopy  (to  analyse  powder,  liquids  that  may  contain  drugs, 
explosives etc.) or x-ray fluorescence (to analyse metal), as well as in the use of radiation for 
scanning. Whereas some equipment is fixed, other types of equipment may be mobile (and 
hence allow for sharing).  

Clearly,  the  extent  to  which  the  availability  of  customs  control  equipment  is  problematic, 
differs per EU Member State, depending on the frequency and volumes of good crossing the 
border(s) and geographical location and international trade channels (land, sea, air) as well 
as  financial  resources  available  (to  self-finance).  There 
is  a  need  to  gain  better 
understanding  on  the  magnitude  of  the  problem  for  different  countries,  and  explore  how 
the improved availability of advanced equipment for controls may contribute to efficiency of 
border controls, and their potential impact upon customs’ missions in the area of safety and 
security as well as on the trade facilitation and government revenue.  

Until  date,  the  Customs  programmes  have  not  included  financial  support  of  customs 
equipment.  However,  over  the  past  years,  under  the  current  Customs  2020  programme, 
some  support  was  granted  to  facilitate  discussions  and  thinking  on  shared  applications  in 
the  area  of  customs  equipment  at  EU  level.  Besides  the  port,  airport  and  land  border 
contact  groups  where  the  matter  of  control  equipment  is  addressed  in  a  targeted  and 
border  crossing  point  specific  manner,  the  Detection  Technology  Network  functions  as  a 
platform  for  detection  technology  general  or  specific,  including  the  work  of  customs 
laboratories. 

In  addition,  the  creation  of  the  Customs  Eastern  Land  Border  Expert  Team  (CELBET),  is 
aimed at pooling expertise from 11 Eastern and South-Eastern land border Member States 
for  strengthening  and  improving  the  operational  co-operation  among  its  members  at  the 
Eastern  and  South-Eastern  land  border  of  the  EU.  With  tangible  results  and  positive 
experiences  and  best  practices  shared,  the  CELBET's  expert  team  covers  the  following 
aspects:  risk  management  (risk-based  selection  for  controls/facilitation),  operational 

131 

 
 
controls, equipment and procurement, training, evaluation/performance measurement and 
co-operation with border guards and neighbouring countries.197.  

Whereas the problem of lack of advanced equipment may be (partly) linked  to the lack of 
available funding, there is a need to identify possible new or additional ways to complement 
national budget constraints in this area, as well as identify possible innovative ways to meet 
EU Member State needs for customs equipment. In this context, it is worth mentioning that 
customs control equipment can potentially be financed from EU sources such as the Hercule 
programme198 (supporting operational and administrative capacity to fight fraud, corruption 
and  other  irregularities  perpetrated  against  the  Union's  financial  interests,  governed  by 
OLAF),  or  the  European  Structural  and  Investment  Funds  (ESIF)199.  However,  using  these 
tools  to  finance  customs  control  equipment  has  in  the  past  proved  subject  to  competing 
national interests and priorities, and hence not always successful. Annex F assesses, to the 
extent possible, the key challenges in relation to border equipment, which may stand in the 
way  of  efficient  and  uniform  customs  controls  at  EU  external  borders,  and  negatively 
impacting the functioning of the EU customs union as a whole. 

3.3.2 Driver: Uneven interpretation and implementation of 

legislation (UCC and other) by customs administrations 

The  need  for  harmonized  and  consistent  interpretation  and  implementation  of  customs 
related legislation is of paramount importance to the success of the customs union.  

Differences in interpretation of EU legislation, which is directly applicable in the EU Member 
States  (such  as  e.g.  the  UCC  legal  package),  affect  the  Internal  Market.  Facilitation  and 
cooperation are two of the most important goals of the action programme for customs: 

  A  common  understanding  of  customs  legislation  is  a  cornerstone  to  facilitate  and 

enhance cooperation between customs administrations within the Union; 

  Where  the  legislator  did  not  leave  room  for  different  regimes,  a  coherent  and 
consistent  approach  should  be  followed  by  the  Member  States,  both  in  their  own 
interest  (not  allowing  for  shopping)  and  in  the  interest  of  the  business  (benefiting 
from legal certainty).  

The  need  for  a  common  approach  is  also  translated  in  the  EU  law.  In  order  not  to  distort 
competition within the Internal Market, as established by the  Treaty on the Functioning of 
the European Union (TFEU), a common interpretation and implementation of legislation at 
the external border is required.  

197 Customs 2020 programme, DG TAXUD progress report 2015 

198 See: https://ec.europa.eu/anti-fraud/policy/hercule_en 

199 See: https://ec.europa.eu/info/funding-tenders/european-structural-and-investment-funds_en 

132 

 
 
                                                      
The  EU  customs  union,  which  involves  a  common  customs  tariff  and  the  prohibition 
between Member States of customs duties and charges having equivalent effect, should be 
framed  in  a  global  social  and  economic  context.  The  preamble  to  the  WTO  General 
Agreement on Tariffs and Trade (GATT) states that the contracting parties ensure that “their 
relations in the field of trade and economic endeavour should be conducted with a view to 
raising  standards  of  living,  ensuring  full  employment  and  a  large  and  steadily  growing 
volume  of  real  income  and  effective  demand’,  and  the  contracting  parties  need  to  be 
‘desirous  of  contributing  to  these  objectives  by  entering  into  reciprocal  and  mutually 
advantageous  arrangements  directed  to  the  substantial  reduction  of  tariffs  and  other 
barriers  to  trade  and  to  the  elimination  of  discriminatory  treatment  in  international 
commerce”.200 By establishing a customs union, the EU must contribute to the harmonious 
development of world trade, the progressive abolition of restrictions on international trade 
and  on  foreign  direct  investment,  and  the  lowering  of  customs  duties  and  other  barriers. 
The  Common  Commercial  Policy  shall  be  based  on  uniform  principles,  particularly  with 
regard  to  changes  in  tariff  rates,  the  conclusion  of  tariff  and  trade  agreements  relating  to 
trade  in  goods  and  services,  and  the  commercial  aspects  of  intellectual  property,  foreign 
direct investment, the achievement of uniformity in measures of liberalisation, export policy 
and  measures  to  protect  trade  such  as  those  to  be  taken  in  the  event  of  dumping  or 
subsidies.  The  Common  Commercial  Policy  shall  be  conducted  in  the  context  of  the 
principles and objectives of the Union's external action.  

The customs administrations have highlighted in the recent survey the fact that a majority 
of  them  –  17  out  of  25  –  consider  ‘insufficient  uniformity  and  efficiency’  as  being  to  a 
considerable  extent  a  problem  for  the  functioning  of  the  customs  union  as  a  whole.  The 
same proportion – 16 out of 25 – is considering that this problem should, to a considerable 
extent, be addressed through a future Customs programme in the coming ten years. It is to 
note that 2 respondents – Luxemburg and Sweden – did not consider it as being a problem 
for  the  customs  union  as  a  whole,  nor  did  they  envisage  it  to  be  addressed  by  a  future 
Customs programme. 

Figure 11 – Extent to which insufficient uniformity and efficiency is considered a problem 

200

 WTO 

General 

Agreement 

on 

Tariffs 

and 

Trade, 

1947, 

https://www.wto.org/english/docs_e/legal_e/gatt47_e.pdf.  

133 

 
 
                                                      
Insufficient uniformity and efficiency
underpinning the functioning of the
Customs Union is a problem

2

4

17

2

The problem should be addressed
through a future Customs programme

2

3

16

4

0

5

10

15

20

25

30

To a small extent

To some extent

To a considerable extent

To a great extent

Do not know or no answer

Source: Deloitte 

The European Economic and Social Committee (EESC) expressed consideration on coherent 
application of the Union Customs Code. It considers that an efficient customs union is a vital 
prerequisite for European integration in order to ensure uniform and EU-wide efficient, safe 
and  transparent  free  movement  of  goods  with  maximum  consumer  and  environmental 
protection  and  effective  combating  of  fraud  and  counterfeiting.  It  is  concerned  about  the 
possibility  of  differing  national  interpretations  of  the  EU  customs  rules,  which  would 
constitute  a  major  bureaucratic  burden  for  businesses  (especially  small  businesses),  and 
thus damage Europe's competitiveness. 

The Member States are responsible for administering the European customs legislation. In 
the  absence  of  a  Union  customs  administration,  the  Member  States’  administrations  are 
essential  to  the  functioning  of  the  customs  union.  The  significant  role  which  the  Member 
States play in relation to customs law leaves substantial policy space for Member States to 
act  individually,  standing  in  the  way  of  a  truly  unified  customs  union.  The  cooperation 
between  all  Member  States  is  crucial  to  a  properly  functioning  system.  The  basis  of  this 
seamless  cooperation  starts  obviously  with  a  coherent  and  consistent  interpretation  and 
understanding of customs legislation. 

  To illustrate the problem of uneven interpretation of the legislative framework, the 
2013 Study on the Evaluation of the EU customs union mentions concrete examples 
of  non-uniformity,  for  example:  ‘Businesses  repeatedly  highlighted  the  impact  of 
differing 
legislation  by  customs  officials  and  national 
administrations on the carrying out of documentary and physical controls. A further 
point  made  was  that  customs  officials  sometimes  interpret  and  handle  customs-
related mistakes made by businesses differently.’201 

interpretations  of  EU 

  Another  concrete  example  illustrates  the  difficulties  of  harmonized  interpretation 
since the introduction of the UCC (2016). With regards to the provisions on exporter 
of  record,  Art.  1(19)  of  the  UCC  Delegated  Act  has  caused  a  lot  of  debate  and 
uncertainty  amongst  the  business  community,  given  the  revolutionary  change 

201 Study on the evaluation of the EU Customs Union, 2013, p. 6 

134 

 
 
 
                                                      
compared  to  the  concept  of  exporter  contained  in  the  CCC  provisions.  Under  the 
new  legislative  framework,  the  concept  is  introduced  whereby  an  entity  is  to  be 
‘established  in  the  customs  territory  of  the  Union’  in  order  to  qualify  and  act  as 
Exporter.  The  change  compared  to  the  previous  legislative  framework  (Community 
Customs  Code  or  ‘CCC’)  seemed  to  excluded  non-EU  established  companies,  which 
were  previously  allowed  to  export  from  the  Union  while  being  non-EU  established 
companies (e.g. a Chinese company owning a stock in Belgium and exporting these 
goods when required).  
The text of the UCC was felt by many economic operators to be  insufficiently clear 
and  Member  States  upheld  different  interpretations  of  this  concept,  which  could 
cause burdens to trade as well as give rise to shopping. The  European Commission 
was  pushed  to  issue  guidance  on  the  interpretation  of  the  concept.  As  part  of  the 
Guidance Notes, the European Commission published a new Annex A on ‘Definition 
of Exporter’ in May 2016, clarifying the concept. As a result, it is confirmed that for 
non-EU  established  companies  wishing  to  export  goods  from  the  EU,  it  will  be 
necessary  to  appoint  an  indirect  representative202.  The  introduction  of  a  revised 
definition of exporter contained in Art. 1(19) of the UCC Delegated Act is worked on, 
but  the  risk  associated  by  diverging  interpretations  across  customs  administrations 
remains actual. 

  Centralised  clearance  is  laid  down  in  the  legislation  of  the  EU  for  quite  some  time 
now (under the UCC and before under the CCC as Single Authorisation for Simplified 
Procedures),  but  practical  examples  in  a  cross-border  context  are  scarce.  Even 
though  there  is  considerable  business  interest,  Member  States  indicating  they  are 
not  aware  of  any  precedents  in  other  Member  States  are  actively  looking  for  such 
cases before issuing authorisations. 

Member States can provide binding information with regard to the classification, origin and 
value of goods. In this regard, it is also essential that Member States interpret the rules in a 
coherent  way.  Different  interpretations  would  lead  to  shopping  and  would  potentially 
distort  competition  between  businesses,  which  goes  against  one  of  the  fundamental 
principles of the Union. 

In  this  respect,  a  study  on  the  aspects  of  uniform  classification,  notably  through  Binding 
Tariff  Information  system  (BTI)  revealed  divergent  classifications  and  divergent  practices 
between  individual  customs  administrations  with  respect  to  the  issuing  of  BTI  during 
discussions in the Customs Code Committee203. 

202 See: 
https://ec.europa.eu/taxation_customs/sites/taxation/files/resources/documents/customs/customs_code/gui
dance_definition_exporter_en.pdf 

203 European  Commission,  Analysis  of  aspects  of  uniform  tariff  classification,  Final  report,  prepared  by 
Copenhagen Economics A/S  and Deloitte Belgium, November 2014 

135 

 
 
                                                      
Furthermore, it should be stressed that legislative frameworks are not static. In a dynamic 
trade environment, new policies and laws  need to be developed. It is undisputed that the 
legal  scene  will  develop  post  2020,  preferably  taking  the  future  of  customs 
into 
consideration. 

3.3.3 Driver: Obstacles for cooperation 

In  a  globalised  economy,  customs  administrations  in  the  EU  operate  in  a  complex 
environment, with a broad range of stakeholders. More than ever, customs performance is 
dependent  on  the  exchange  of  data  and  best  practices,  especially  in  the  areas  of  risk  and 
security  management;  and  trade  facilitation.  As  a  result  of  improved  data  availability  and 
quality, exchange of information offers tremendous opportunities for customs performance. 
However,  the  condition  to  effective  and  efficient  exchange  of  information  is  that 
collaboration is developed.  

Without  a  framework  for  cooperation  between  actors  involved,  generating  the  trust  and 
confidence required, such deepened exchanges remain scarce.  

Over  the  past  decade,  the  European  customs  environment  has  developed  into  a  web  of 
interlinked  collaborative  efforts  between  different  types  of  stakeholders:  customs 
administrations, public agencies, economic operators, international organisations and third 
country governments. 

This  driver  addresses  four  dimensions  leading  to  obstacles  for  cooperation  between 
customs administrations and the other stakeholders, as follows: 

  General 
  Administrative 
  Legal  
  Strategic  

General obstacles  

Customs administrations within the EU 

Increasingly, customs administrations recognize the need to act as one, driven by the need 
to perform and live up to expectations with regard to the mission to facilitate trade, protect 
citizens and ensure government revenue.  

Realising the full potential of closer cooperation between customs administrations in the EU 
is  not  straightforward.  In  times  where  customs  administrations  are  resource-constrained 
and pushed to the maximum as result of broadening of tasks and performance expectations, 
setting up new collaborations could be perceived as a longer-term investment, which does 
not generate automatic nor direct results.  

136 

 
 
In addition, a finding of previous Customs programmes (through the 2013 Final  Evaluation 
of the Customs 2013 programme204) has been that customs administrations throughout the 
EU experience a lack of trust to cooperate, standing in the way of stepping up information 
sharing  and  establishing  administrative  partnerships  and  networks.  In  this  sense,  the 
evaluation  of  the  Customs  2013  programme  mentioned  the  need  for  improved  levels  of 
trust  as  a  success  factor  to  ‘acting  as  one’:  The  evaluation  found  that  [the  programme] 
fostered  trust  and  thereby  encouraged  the  free  sharing  of  information  and  uptake  of 
common  IT  systems  and  other  processes.  In  this  way,  the  evaluation  concluded  that  the 
created networks played an important role in attaining the programme's objective to “act as 
one  administration” 205 .  In  carrying  out  the  core  functions,  customs  administrations 
increasingly  rely  on  collaboration  and 
information  exchange  with  other  customs 
administrations.  For  example,  in  relation  to  risk  and  security  management,  customs 
administrations  across  the  EU  have  reduced  the  level  of  controls,  and  instead  target  the 
higher-risk  goods  imported  into  the  EU.  Whether  or not  an imported  good  is  identified  as 
high-risk,  is  however  dependent  on  the  risk  management  tools.  The  real  challenge  for  EU 
customs risk management is to focus and target traffic on the basis of factors that indicate 
there may be something "wrong, unusual, abnormal, uneconomic" or otherwise giving rise 
to suspicion in the trade flow or in relation to particular consignments. 

The need for EU financial and resource support has been confirmed through the evaluation 
of  the  Customs  Cooperation  programs.  The  2015  Evaluation  ‘identified  a  strong  case  for 
European  added  value  of  the  programme,  particularly  regarding  its  role  in  supporting  the 
implementation  of  EU  customs  legislation  at  national  level.  Hence,  there  is  a  need  for 
overcoming obstacles to allow for enhanced cooperation between customs administrations 
facing legislative, operational or resource capacity gaps and challenges’.   

From the survey, the Croatian customs administration confirmed that general obstacles may 
constraint their actions, e.g. in the field of working visits. These visits are very well perceived 
by  the  administration,  for  example  visits  to  the  Port  of  Rotterdam  and  exchanging  on  the 
top level of procedures. On the other hand, the Croatian administration expressed that it is 
also  good  to  stay  in  their  region  (Greece,  Italy,  and  Slovenia)  and  exchange  experiences 
between administrations with the same issues. Due to geographical obstacles, the Croatian 
administrations  only  send  top  officials  to  Rotterdam  while  other  officials  are  sent  only  to 
neighbouring countries.  

A good example is the funding of central IT systems through the programme, which led to 
reductions  in  administrative  costs  and  support  efficiency  of  customs  in  Member  States 
which would not be possible without EU intervention. Databases such as TARIC and QUOTA 
have  been  providing  Member  State  administrations  with  important  information,  allowing 

204  European  Commission 
see: 
https://ec.europa.eu/taxation_customs/sites/taxation/files/docs/body/customs_2013_final_evaluation_repor
t.pdf 

the  Customs  2013  programme’,  2015, 

‘Final  evaluation  of 

205 European Commission ‘Final evaluation of the Customs 2013 programme’, 2015, p. 7 

137 

 
 
                                                      
for  data  exchange  and  information  which  otherwise  they  would  have  needed  to  request 
from the European Commission and store at their own expenses206.  

Figure 20 – Extent to which Customs 2013 reduced administrative burdens for national administrations  

Source: European Commission final evaluation of the Customs 2013 programme, COM (2015) 64 final 

Still,  stakeholders  in  the  private  sector  mention  that  in  terms  of  cooperation  between 
customs administrations they continue to see a big lack of cooperation, for example in the 
Temporary  Admission  (ATA)  carnet  system.  The  idea  of  ATA  is  that  one  imports  a  good 
temporarily  to  afterwards  re-export  it.  Often  there  are  two  or  more  countries  involved  in 
such  operation  and  the  different  customs  offices  do  not  communicate  with  each  other.  A 
few concrete examples are:  

  Zaventem  airport  does  not  communicate  with  Schiphol  airport  (where  the  good 
arrived)  that  the  good  left.  At  the  moment,  there  is  no  IT  system  supporting 
exchange of ATA documents (as it disappeared from MASP) and there is not enough 
uniform  training  in  the  EU.  Stakeholders  see  totally  different  levels  of  practice 
despite  that  the  ATA  already  exists  for  a  long  time  and  e-Learning  programme  on 
ATA at the WCO level are provided. 

  In  Croatia,  Slovenian  and  Hungarian  police  support  the  local police departments  at 
the Croatian coast during the busy summer tourist season. The reflection was made 
whether similar joint activities cannot be done by Customs in times of crisis. Member 
States at the eastern external land border experience at times heightened pressure 
because  of  great  influxes  of  people  and  goods.  Their  local  customs  offices  cannot 
always  cope  with  these  big  increases  at  which  point  support  from  neighbouring 
Member  States  would  be  welcome,  for  example  in  the  form  of  mobile  units  of 
customs officials. This is confirmed through the fieldwork findings:  

  An official in the Danish customs administration mentioned it would be interesting to 
have  a  cooperation  with  the  other  Nordic  countries  when  it  comes  to  sea  border 
protection.  However,  there  is  an  obstacle  to  such  cooperation,  as  the  customs 
administrations  from  these  countries  do  not  have  the  same  competences.  For 
example,  the  Danes  cannot  initiate  an  investigation,  while  the  Swedish  are 
competent  to  do  so.  These  two  countries  actually  initiated  a  cooperation  project 

206 European Commission ‘Final evaluation of the Customs 2013 programme’, 2015  

138 

 
 
 
                                                      
(joint patrols), but they had to stop it due to their differences. The interviewee also 
points  out  the  problem  of  sovereignty  that  would  prevent  the  different  customs 
administrations from cooperating.  

Customs administrations and third countries  

As  a  result  of  a  strong  growth  of  incoming  and  outgoing  trade  flows  from  and  to  third 
countries,  the  need  for  exchange  of  information  and  deepened  collaboration  between 
European customs administrations and non-EU customs administrations has grown.  

The need for improved collaboration with third countries is especially apparent in those EU 
Member  States  situated  at  the  external  borders.  New  types  of  collaborations  are  being 
piloted and developed, including between customs and border agencies, often as result of 
the pressure of increased passenger vehicles and refugees crossing the borders.   

An interesting development in this regard is the recent Smart Borders Package, launched by 
the  European  Commission  in  April  2016,  which  entails  an  EU-wide  information  system 
(Entry-Exit System) that supports the Schengen area border management and customs and 
border agents to manage and control the increased flow of people and refugees. The system 
will  collect  data  (identity  and  travel  documents)  and  register  entry  and  exit  records  (date 
and place of entry and exit) to facilitate border crossing of bona fide travellers and identify 
over-stayers, as well as refusals.  

In  the  related  press  release,  the  important  role  of  customs  is  equally  acknowledged: 
‘customs  administrations  are  also  a  crucial  actor  in  the  multi-agency  cooperation  at  the 
external  borders.  They  have  various  systems  and  databases  which  contain  data  on 
movements of goods, identification of economic operators and risk-related information that 
can be used to reinforce internal security’.207   

With regards to customs administrations cooperation with third countries, the exchange of 
data has been identified as a key factor in improving security and risk management as well 
as trade facilitation. Here, the best practices are however to be further developed.  

One  area  where  customs  cooperation  with  third  countries  has  developed  over  the  past 
years,  is  the  area  of  ‘trusted  traders’  and  particularly  the  expansion  of  AEO  Mutual 
Recognition Agreements, which are arrangements between foreign customs administrations 
and DG TAXUD. Based on the WCO Safe Framework, the EU has currently negotiated AEO 
Mutual  Recognition  Agreements  with  Norway,  Switzerland,  Japan,  Andorra,  the  US  and 
China. Further negotiations are currently taking place or will be launched in the near future 
with  the  other  most  important  trading  partners208.  Continuous  support  to  3rd  country 
customs  operations  would  facilitate  the  development  and  implementation  of  new  AEO 
Mutual Recognition Agreements.  

207 See: http://europa.eu/rapid/press-release_MEMO-16-1249_en.htm 

208  See:  http://ec.europa.eu/taxation_customs/general-information-customs/customs-security/authorised-
economic-operator-aeo/authorised-economic-operator-aeo_en 

139 

 
 
                                                      
There is a need to identify other areas, including ‘low hanging fruit’, where cooperation with 
third countries on specific themes could be facilitated through development of platforms or 
cooperation  agreements.  customs  administrations  in  the  EU  are  especially  eager  to 
cooperate with third countries in specific areas of interest (such as intellectual property or 
waste trade) by making use of platforms that can facilitate the exchange of data. 

Eastern and Southern Member States of the EU already work together with their 
neighbouring third countries or have some sort of agreement in place (e.g. Croatia with 
Serbia and Montenegro, Italy with Tunisia). This is confirmed through the fieldwork findings:  

  In  Hungary,  a  representative  mentioned  that  ‘Nowadays  cooperation  with  third 
countries  is  limited.  It  is  not  possible  to  establish  effective  cooperation  with  third 
countries (Ukraine and Serbia) at the operational level due to the lack of resources. 
Example: Hungary and Ukraine agreed to build a BCP. In the Hungarian territory the 
infrastructure  is  ready,  but  the  construction  just  started  at  the  other  side.  The 
operational  cooperation  with  third  countries  does  not  work  that  well either.  There 
are some times where Hungarian  administrations do not obtain any reply from the 
third country (especially China and Singapore). For others, the information obtained 
does not match with the information required by the EU (mismatch of information)’. 

Legal and administrative obstacles  

Customs administrations and the European Commission  

Under  a  decentralised  governance  model  approach  the  cooperation  between  EU  customs 
administrations  and  the  European  Commission  continues  to  develop  in  parallel  with  the 
cooperation  between  Member  State  administrations  themselves. 
In  specific,  the 
decentralised  nature  of  the  implementation  and  management  system  that  underpins  the 
customs union continues to stand in the way of enhancing uniformity and efficiency in the 
customs union.  

Whereas a common legal basis is secured, the operational implementation falls short due to 
a 
lack  of  shared  responsibilities  among  administrations  and  sub-optimal  forms  of 
collaboration  and  working  together.  The  need  for  a  reform  of  the  governance  of  the 
customs  union  has  been  acknowledged,  to  tackle  the  cross-cutting  problem  of  the  highly 
decentralised  and  increasingly  complex  governance  of  the  implementation  of the  customs 
union209.  

  In  Malta,  it  was  mentioned  that  ‘Today,  different  opinions  exist  between  different 
local  customs  offices.  Different  views  exist  between  local  offices  and  the  central 
administration.  There  is  no  common  knowledge  in  Malta  regarding  customs  rules 
and procedures. There is a need for training of customs  officials to come to similar 
application of customs rules’. 

209 European Commission ‘Communication on the State of the Customs Union’, 2012, p. 12 

140 

 
 
                                                      
In  addition,  the  growing  links  between  customs  and  other  policy  areas  related  to  security 
and border control (inter alia) call for a more joined-up and cross-sectorial approach. In the 
European  Commission  ‘Communication  on  Developing  the  EU  customs  union  and  Its 
Governance’ (2016), it argues for a revitalized partnership between Member States and the 
European  Commission  to  tackle  major  issues,  including  resource  challenges,  challenges  of 
EU border management, and the need for a shared vision on how customs administrations 
can achieve fully effective and coherent action.  

A  concrete  example  is  given  with  regards  to  the  trend  of  customs  administrations 
contributing to border enforcement in different EU countries. Currently, border agents are 
supported and governed by (the policies set by) the Directorate General for Migration and 
Home  Affairs  (DG  HOME),  including  the  agencies  of  FRONTEX  and  EUROPOL,  whereas  the 
customs  administrations  fall  under  the  DG  TAXUD  competencies.  Increased  coordination 
is  called  upon  by  customs 
and  cooperation  between  DG  HOME  and  DG  TAXUD 
administrations, especially to optimize the use of (financial and equipment) resources.  

According  to  the  Belgian  customs  administration,  customs  should  remain  the  key  player 
with respect to border-crossing flows of goods. However, there is an obvious need for more 
and better cooperation with other policy areas and DGs. The opportunities for cooperation 
and/or synergies with these policy areas need to be identified. Regarding e-Commerce, both 
largely  similar  challenges. 
customs  and  taxation  are  for 
Furthermore, the scale and complexity of establishing a truly European Single Window will 
likely require DG TAXUD to collaborate more actively with other DGs. 

instance  confronted  with 

Under  the  current  Customs  2020  programme,  the  European  Commission  (DG  TAXUD)  has 
intensified  its  role  as  facilitator  and  paving  the  way  into  deepened  and  enhanced 
collaboration  between  itself  and  customs  administrations,  as  well  as  between  customs 
administrations.   

A  revitalized  partnership  between  Member  States  and  the  European  Commission  can  be 
inspired  by  best  practices  in  the  area  of  customs  cooperation,  showing  how  effectiveness 
and  efficiency  can  be  enhanced by pooling  of  resources,  sharing  of  information  and other 
forms of collaboration.   

There  is  a  visible  need  for  the  European  Commission  (DG  TAXUD)  to  continue  providing 
strategic guidance and support, especially in areas of innovation in the context of a changing 
global economy and further modernization of the customs union. Without the financial and 
resource support from international  organisations and  European Commission (DG TAXUD), 
as well as a modernized governance model with supporting structures, it is hard to see how 
the  European  customs  union  will  be  able  to  continue  on  its  path  towards  uniformity  and 
efficiency, in support of the wider social and economic development goals of the European 
Union and its citizens.  

  In Italy, it was mentioned that ‘The Single Window is the starting point for customs 
and security cooperation, not only for release of goods, but also for risk analysis. But 

141 

 
 
sharing  of  info  is  an  EU  problem.  DG  HOME  and  DG  TAXUD  should  work  out  this 
issue, and should provide more clarity to concretely support cooperation’. 

An  additional  obstacle  to  data  exchange  between  EU  Member  States  is  the  result  of  data 
protection  requirements  at  national  and  EU  level,  especially  Directive  95/46/EC  (and  the 
future  General  Data  Protection  Regulation  which  will  replace  this  directive).  These  legal 
obligations  will  a.o.  invoke  the  obligation  to  have  data  sharing  requests  reviewed  and 
approved.  They  may  even  block  and  prohibit  them  in  the  worst  case  scenario.  This 
legislation burdens the process of information sharing to a point where it is considered too 
difficult to implement on a structural basis.  

The  fieldwork  confirms  that  the  implementation  of  the  IT  systems  and  data  protection 
continues to be a basis for discussion and possible differing strategic interests.  

During  fieldwork,  in  one  country  it  was  mentioned  that:  ‘CS2  aims  to  facilitate  the  data 
sharing process,  but  some  questions  remain  unanswered  such  as:  Will the  shared data be 
properly secured in another Member State? The European Commission has set up new data 
mining engines,  but  Member  States  have  not  validated them,  because they  want to  know 
how these data mining engines have been set up. And: How much of the cost will Member 
States need to bear?  It means that the technology for data sharing is already present, but 
that  politically  the  EU  is  not  ready  yet.  Member  States  ask  the  European  Commission  to 
clarify first whether the legal requirements on data sharing and controls are respected and 
the  financial  consequences  are  taken  into  account.    Where  until  now  the  EU  has  tried  to 
advance with all Member States at a similar pace, experience show that in reality this is not 
happening.  Customs  traditionally  also  have  strong  bilateral  cooperation  between 
neighbouring Member States, because they experience similar issues. Therefore a number 
of  customs  administrations  indicate  their  support  for  expert  teams  such  as  CELBET,  which 
‘
follows 

approach 

regional 

regional 

shared 

issues. 

tackle 

to 

a 

142 

 
 
Customs administrations and international organisations 

As  customs  administrations are  increasingly  called  upon to  cover  a  wide  range  of  customs 
and non-customs matters, making best use of available insights, instruments, guidelines and 
best practices, international organisations increasingly play a supporting role.  

Customs administrations within the EU are stepping up their cooperation with international 
organisations for a number of reasons:  

  To  shape  and  contribute  to  new  agenda’s  and  policy  initiatives,  creating  global 

standards in international fora,  

  To support implementation of common norms amongst international trading partners, 
  To tap into relevant resources, tools, guidelines and best practices, in support of core 

customs functions, 

  To benefit from the platform-function provided by the organization, connecting with 
international  (EU  and  non-EU)  peers  in  a  structural  manner  and  acting  in  a  joint 
manner. 

In  the  field  of  international  customs  cooperation,  the  World  Customs  Organisation  (WCO) 
merits specific attention. Besides the EU Member States being individual members of WCO, 
the  European  Union  (as a  customs  union)  became  a  member  of  the  WCO  in  2007.  With  a 
forward-looking  agenda,  the  WCO  plays  an  important  role  in  promoting  international 
customs co-operation and addressing new challenges for customs and trade. It is deeply 
involved  in  designing  and  implementing  policies  worldwide  that  integrate  measures, 
which  help  ensure  supply  chain  security,  combat  counterfeiting,  promote  trade  and 
development, as well as guarantee efficient collection of customs revenues210.   

The  European  Commission  through  DG  TAXUD  engages  with  WCO  on  particular  areas  of 
interest,  whereas  EU  Member  State  customs  administrations  engage  more  pro-actively  as 
individual members on other topics.  

A particular area where cooperation between DG TAXUD and WCO could be stepped up, is 
in the strategic thinking on the customs of the future and disruptive technologies. As part of 
the Future of Customs Working Group in WCO, the impact of trends (such as global network 
customs,  3-d  printing,  drones,  e-Commerce,  transfer  pricing  and  global  value  chains, 
customs and tax, etc.) are discussed, which could prove insightful for and providing impetus 
to a renewed focus on strategy at European Commission level (DG TAXUD). 

In terms of relevant WCO tools, the WCO Data Model (already used by EU Member States) 
may  provide  enhanced  optimization  of  trade  data  exchange,  perhaps  even  in  the  process 
towards an EU Single Window Mechanism.   

With regards to capacity building, some overlap in terms of capacity building exists between 
the  Customs  2020  programme,  the  WCO  Customs  Cooperation  Fund  (CCF)  and  the  newly 

210 See: www.wcoomd.org  

143 

 
 
 
                                                      
launched  Mercator  Programme.  Improved  coordination  would  be  beneficial,  including 
discussing the beneficiary countries of different programmes and existence of overlaps, such 
as with the ENP countries.   

Amongst  the  specific  themes  where  cooperation  with  international  organisations  is  being 
stepped  up,  the  fight  against  terrorism  and  organised  crime  is  a  specific  area  of  interest. 
Intensifying the  cooperation  with  international  organisations  is one  of  the  priorities  under 
the EU Risk Management Strategy and Action Plan (RMSAP)211 . EUROPOL, for example, has 
hereunder  been  identified  as  a  priority  organization  where  more  structured  exchange  of 
information  between  the  actors  of  the  security  chain  (customs  and  police)  should  be 
established, whereby the exchange of information would directly support risk management 
functions of customs.  

A  concrete  example  where  cooperation  with  international  organisations  has  proven 
beneficial  concerns  the  matter  of  illicit  trade.  In  a  2016  Opinion  on  the  evaluation  of 
external aspects of the customs performance and management as a tool to facilitate trade 
and  fight  illicit  trade212,  the  European  Parliament  calls  for  closer  customs cooperation,  both 
within the Union and with third countries, for actions to be stepped up aimed at combating illicit 
trade at the EU’s borders and helping policymakers in the mapping of market and international 
supply  chain  vulnerabilities,  and  the  tracking  and  elimination  of  interconnections  between 
actors involved in illicit trade activities.  

In  the  area  of  combating  illicit  trade,  positive  experiences  in  enhanced  collaboration  have 
been gained over the past years, highlighting especially the important role and contribution 
of  international  organisations.  In  January  2017,  Operation  Pandora  brought  together 
customs  administrations  and 
law  enforcement  administrations  from  18  countries, 
INTERPOL, UNESCO and WCO to tackle the theft and illicit trafficking of cultural goods. The 
aim of Operation Pandora was to dismantle criminal networks involved in cultural theft and 
exploitation, and identify potential links to other criminal activities. As a result, 3561 works 
of  art  and  cultural  goods  were  seized,  75  individuals  were  arrested,  and  92  new 
investigations  were  initiated 213 .    The  role  of  INTERPOL,  WCO  and  UNESCO  proved 
indispensable  in  providing  operational  and  analytical  support  and  facilitating  information 
exchange. 

Without  the  supportive  role  of  international  organisations  and  the  European  Commission, 
the  realization  of  broader  policy  objectives,  especially 
linked  to  risk  and  security 
management  as  well  as  trade  facilitation,  are  at  stake.  There  is  a  strong  need  to  further 
develop  and  deepen  existing  partnerships,  and  build  new  partnerships  with  targeted 
international  organisations.  These  collaborative  efforts  should  have  a  clear  focus  and 

211 EU  Strategy  and  Action  Plan  for  customs  risk  management,  Commission  Communication  (COM  2014/527 
final) 

212 European Parliament opinion (2016/275(INI), 10.11.2016, p. 6  

213 https://www.europol.europa.eu/newsroom/news/3561-artefacts-seized-in-operation-pandora.  

144 

 
 
                                                      
outcomes  agreed  upon,  linked  to  the  distinctive  EU  strategies  in  support  of  the  customs 
union.  Through  fieldwork,  the 
international 
organisations or at EU-level was confirmed: 

importance  of  databases  provided  by 

  In Croatia, it was confirmed that: ‘today, we have many different databases that we 
as customs administration need to update with information on our seizures of illegal 
goods  in  all  their  forms.  These  databases  exist  on  the  level  of  international 
organisations, but also on the EU and the national level. We spend and lose a lot of 
time updating all these databases whereas it would be more efficient to update this 
on the level of the international organisations and subsequently let the international 
organisations share this information top-down’.  

Strategic obstacles  

Looking at strategic interests, customs administrations are challenged to serve the specific 
concerns  in  their  national  context,  and  at  the  same  time  contribute  to  the  strategy  to 
achieve common goals. Hence, diverging strategic interests remain a challenge to uniformity 
and efficiency of the customs union. The tensions between those individual Member States 
and  the  common  goals  under  the  wider  EU  customs  union  objectives  need  to  be 
acknowledged  and  dealt  with.  Or,  as  mentioned  in  the  2016  European  Commission 
Communication  on  ‘Developing  the  EU  customs  union  and  its  Governance’ ‘The  nature  of 
the Customs Union, creates interdependence between national administrations which must 
be  recognised  if  the  maximum  benefits  are  to  be  obtained.  The  implementation  challenge 
calls  for  equivalence  of  results  by  customs  administrations  operating 
in  different 
geographical, budgetary and organisational conditions214.’ 

The positioning of  customs administrations within the broader political setting has equally 
changed, moving to the forefront of customs and trade policy, and fulfilling a wide range of 
responsibilities in other policy areas as demonstrated in the trends section.  Throughout the 
EU,  a  noticeable  trend  is  the  tendency  towards  increased  strategic  positioning  of  customs 
administrations,  often  aligned  to  the  long-term  competitiveness  agenda  of  the  Member 
States. In this context, customs performance is seen as a success factor towards achieving 
broader goals, such as to enhance the logistics performance or general competitiveness of 
the  country.  For  example,  the  Government  of  France  launched a  logistics  strategy  in  2016 
(‘France Logistique 2025’), where logistics performance including customs clearance is to be 
seen  as  ‘a  critical factor  towards  improving  competitiveness  and  even  towards  the  energy 
transition’215.  

in  strategic  priorities  are 

Differences 
increasingly  built  on  data  and  cross-country 
benchmarks,  although  comparing  customs  performance in  the  EU  is perceived by  customs 
administrations  of  different  Member  States  as  a  ‘sensitive  exercise’.  Whereas  rankings 
generated  by  the  World  Bank  Doing  Business  Index,  or  the  World  Bank  Logistics 

214 Developing the EU Customs Union and its Governance, European Commission Communication, 2016  

215 See: https://www.economie.gouv.fr/files/files/PDF/CPFceLogistique2025_240316.pdf  

145 

 
 
                                                      
Performance  Index  are  generally  seen  as  too  generalizing  by  customs  administrations,  the 
data  collected  through  national  efforts  and  the  WCO  Time  Release  studies  are  more 
appreciated (and remain confidential).  

In this context, the ‘customs union performance’ project that the European Commission and 
Member  States  are  working  on  is  a  detailed  performance  measurement  project  with    key 
performance  indicators  which  are  based  on  the  strategic  objectives  of  the  Customs  
Union 216.  Three  major  objectives  requiring  strategic  and  coherent  action  have  been 
identified217: 

 

implementing  a  vision  of  how  customs  administrations  can  work  to  achieve  fully 
effective and coherent action; 

  creating    and    implementing    a    shared    vision    between    customs    and    other  
competent  administrations    on    the  management    of    the    EU    border  and    the  
coordination  of  their respective activities; 
tackling the major resource challenges of the customs union. 

 

Policy  makers  and  business  increasingly  depart  from  data  on  customs  performance  for 
decision-making. customs administrations are equally benefiting from enhanced availability 
of measures taken based on performance measurement outcomes (such as on corridors or 
at ports), generated as result of automation of supply chains.  

A  noticeable  implication  of  the  broadening  of  tasks  of  customs  administrations,  especially 
situated at the external border of the European Union, is an increased emphasis on border 
enforcement.  Some  Member  States  have  moved  towards  a  model  whereby  the  customs 
officials take up certain tasks normally assigned to the border enforcement agents, and vice 
versa. For example, in the case of massive events, mobile customs teams support the police 
forces.  

Strategic  interests  of  customs  administrations  differ,  depending  on  trade  intensity  and 
volumes, geographical placing and capacity. Within the EU, there are large differences in the 
volume  of  trade,  meaning  that  the  burden  of  work  varies  between  Member  States.  By 
means  of  comparison,  Eurostat  data  provide  comparative  data  on  total  imports  between 
January and May 2017 for different EU Member States218:  

  Belgium: total imports EUR 150.6 billion 

  Of which EUR 97.3 billion imports intra-EU, and EUR 53.3 billion imports extra EU 

  Germany : total imports EUR 430.3 billion 

216 COM(2008) 169 final of 1 April 2008 as confirmed by Council Conclusions on the progress on the Strategy 
for the Evolution of the Customs Union of 19.3.2013 (2013/C 80/05) 

217 Communication from the Commission to the European Parliament, the Council and the European Economic 
And Social Committee, Developing the EU Customs Union and Its Governance, COM(2016) 813 final, Brussels, 
21.12.2016 

218 See: http://trade.ec.europa.eu/doclib/docs/2013/december/tradoc_151969.pdf 

146 

 
 
                                                      
  Of which EUR 282.5 billion imports intra-EU, and EUR 147.8 billion imports extra-

EU 

  Poland : total imports EUR 81.1 billion   

  Of which EUR 57.1 billion imports intra-EU, and EUR 23.9 billion imports extra-EU 

  Croatia : total imports EUR 8.9 billion 

  Of which EUR 6.9 billion imports intra-EU, and EUR 2.0 billion imports extra EU 

Burdens  differ  depending  on  geographical  location  and  the  nature  of  the  supply  chain 
logistics (with transportation over land, waterways or by rail).  

Hence, EU Member States deal with different (magnitudes) of threats and risks, respond in 
different ways to risks and also face different challenges as a result.  

Throughout the EU, customs administrations within Member States each have their unique 
set of objectives depending on geographical location, trade intensity and characteristics of 
the (external/internal) borders.  

Clearly, the role of customs administrations continues to centre around international trade, 
in line with the mission statement included in the UCC:  “customs administrations shall be 
primarily  responsible  for  the  supervision  of  the  Union's  international  trade,  thereby 
contributing  to  fair  and  open  trade,  to  the  implementation  of  the  external  aspects  of  the 
Internal  Market,  of  the  common  trade  policy  and  of  the  other  common  Union  policies 
having  a  bearing  on  trade,  and  to  overall  supply  chain  security”219.  However,  this  role  of 
customs  administrations  is  subject  to  change,  also  driven  by  trends  towards  ‘doing  more 
with less’ and ‘broadening of tasks’.  

For example, in some EU Member States customs administrations show a specific strategic 
interest  to  take  up  border  enforcement  tasks,  and/or  cooperate  with  police  forces  and 
other  agencies  in  relation  to  the  prevention,  detection  and  investigation  of  criminal 
offences. This widening of tasks may on the one hand save resources for the Government 
(‘doing  more  with  less’),  whereas  on  the  other  hand  putting  pressure  on  customs 
administrations to perform in an area with the organization is not prepared for. 

Over  the  years,  the  changing  and  dynamic  trade  environment  of  customs  administrations 
has  resulted  in  the  emphasis  on  supply  chain  security  being  complemented  by  a  focus  on 
trade  facilitation  which  is  also  supported  by  the  entry  into  force  of  the  WTO  Trade 
Facilitation Agreement in 2016. 

Overall, the objectives and tasks of customs administrations usually focus around three key 
areas, with varying emphasis on these tasks throughout the EU:    

  Protection of financial interests; 
  Safety and security; 

219 Union Customs Code (UCC), Regulation (EU) No 952/2013, Art. 3. 

147 

 
 
 
                                                      
  Trade facilitation. 

In the area of risk and security management, customs are positioned as key players in the 
call  for  security  against  terrorism,  for 
increased  product  safety  and  supply  chain 
transparency, but also the protection of the environment, intellectual property and actions 
to  combat  criminal  activities  including  illicit  trade  and  fraud.  Especially  for  veterinary, 
sanitary, environmental controls and controls on dangerous goods Customs needs to work 
together with specialized agencies. Where cooperation with these agencies is well organized 
the  customs  processes  tend  to  be  effective  and  efficient.  But  all  too  often  data  exchange 
and cooperation are not yet on point in many of the EU Member States.   

The challenge of customs administrations, especially those placed at EU external borders, is 
increasingly  a  question  of  strategy,  prioritization  of  issues  (risks  and  opportunities),  and 
smart allocation of funds and resources (IT and human resources).  

As  mentioned  in  the  2012  European  Commission  Communication  on  Customs  Risk 
Management,  the  “analysis  of  the  Import  Control  System  data  and  risk  assessment 
resources available in Member States indicates wide variations in the workload of customs 
risk  analysis  and  targeting  officials.  In  some  instances  this  ranges  from  9  times  the  EU 
average for air cargo to over 50 times greater than the EU average for maritime traffic”.220 

For example, the illicit trade of tobacco products within the EU is more prevalent in Eastern 
Europe than in Western Europe, which may point to the practice of ‘customs shopping’ by 
traders taking advantage of more porous border crossings in Eastern Europe.221.  

EU  Member  States  are  increasingly  aware  of  the  fact  that  trade  facilitation  and  customs 
procedures are a key determinant for trade competitiveness.  

Governments  and  their  customs  administrations  within  the  EU  (and  world-wide)  are 
competing for global trade flows and revenues. Within the EU, economic operators still seek 
for the most advantageous way to import, transit, or export (or a combination of those), and 
hence  also  compare  the  28  Member  States  for  the  different  types  of  conditions  linked  to 
customs processes (such as inward and outward processing, temporary import or processing 
under  customs  control),  special  facilities  available  (such  as  Special  Economic  Zones  or 
customs warehouses) as well as the costs and time required to complete certain actions.  

A  visible  trend  is  a  more  pro-active  approach  to  trade  facilitation  by  creating  competitive 
advantages,  away  from  the  passive  approach  of  preventing  trade  barriers.  For  example 
some  EU  Member  States  have  introduced  (and  invested  into)  trade  facilitating  measures 
such  as  a  new  electronic  customs  system  (Croatia,  2015,  Portugal,  2015),  electronic 

220 Commission Communication on Customs Risk Management, 2012 

221 Deloitte study on ‘illicit trade in tobacco products’, conducted in cooperation with Copenhagen Economics 
for OLAF (forthcoming, 2017) 

148 

 
 
 
                                                      
submission  of  customs  declarations  for  imports  and  exports  (Greece,  2014),  or  a  reduced 
number of documents required for importing (Latvia, 2014.222 

Further,  the  objective  of  ensuring  government  revenues  through  customs  duties  remains 
an important task for customs administrations. Within the EU, the extent to which customs 
duties  are  contributing  to  overall  gross  domestic  product  differs,  and  so  do  strategic 
priorities linked to customs duties as a basis for securing Government revenue.  

For  example,  based  on  European  Commission  data  on  indirect  taxes223,  customs  duties 
currently  represent  13.7%  of  Estonia’s  GDP,  compared  to  8%  in  Luxembourg  and  0.3%  in 
Denmark.    In  2014,  Germany  collected  the  highest  incomes  from  customs  duties  (total 
revenue  of  EUR  22 896  million),  whereas  the  Netherlands  came  at  a  second  place  (EUR  8 
942 million). At the lower end, Slovenia welcomed a total of  EUR 53 million revenue from 
customs  duties.  Some  countries  still  rely  on  additional  taxes  on  products  for  Government 
revenue,  such  as  Hungary,  where  in  2014  a  total  of  7.3%  of  GDP  was  gained  through 
additional taxes on products (not VAT and import duties), which is the highest percentage in 
the EU.  

Despite  different  objectives  and  issues  in  Member  States,  there  is  a  need  for  enhanced 
cooperation  and  building  partnerships  around  key  issues,  also  reflecting  the  increasingly 
integrated and interconnected nature of trade, linked closely to other issues.  

A  good  example  is  the  trend  towards  integrated  management  of  customs  and  tax,  at 
company-level as well as within public administrations. The changing face of trade, including 
the rise of e-Commerce, provides a strong incentive towards approaching customs and tax 
in  a  more  coherent  manner  and  exploring  opportunities  for  optimization  in  terms  of 
management and collection of duties (for public sector), or to reduce burdens for economic 
operators.  Some  countries  have  merged  the  customs  and  tax  administrations  at  national 
level. 

Further reaching cooperation and even integration between public administrations such as 
Tax, Finance and Customs is encouraged for the above stated reasons, but lack of trust and 
meaningful  structures  stand  in  the  way  of  meaningful  progress.  Customs  officials  in  some 
Member  States  explained  that  cooperation  between  the  different  departments  meant 
“picking  up  the  phone”  when  information  was  needed  or  sharing  information  because  of 
good personal relationships with officials in other departments. These statements show the 
cooperation is not yet happening on a structural level.    

Some EU Member States (UK, Germany and Croatia) accept and use the help and guidance 
of  Chamber  of  Commerce  to  push  for  more  standardization,  with  success.  They  provide  a 
forum for traders and government to work together. Others Member States did not see the 

222 World Bank, Doing Business 2017, Regional Profile European Union (EU) 

223 See: http://ec.europa.eu/taxation_customs/business/economic-analysis-taxation/data-taxation_en 

149 

 
 
                                                      
added  value,  but  one  can  also  see  the  lack  of  sharing  and  uniformity  in  those  Member 
States.  

In  addition,  the  WCO  released  Guidelines  for  strengthening  cooperation  and  exchange  of 
information  between  customs  and  tax  administrations  at  the  national  level,  which  were 
developed 
in  cooperation  with  the  Organisation  for  Economic  Co-operation  and 
Development  (OECD)  and  the  International  Chamber  of  Commerce  (ICC).  For  customs  and 
tax  administrations  wishing  to  go  further  in  their  cooperation  and  develop  operational 
models and exchange of information ways of working, the Guidelines will support agencies 
to work together to their mutual benefit224.  

One of the main obstacles for cooperation is the lack of a unified risk analysis model. Due to 
different  priorities  and  issues,  Member  States  tend  to  set  indicators  independently.  Some 
efforts  are  being  undertaken  within  the  Customs  2020  programme  to  unify  risk 
management more because it would provide for common foundation and make cooperation 
easier.  The  solution  is  actually  already  provided  by  DG  HOME  and  FRONTEX  who  have 
created such an integrated risk analysis model to which Member States contribute. Member 
States  point  at  FRONTEX  and  the  border  guards  as  examples  for  the  future  Customs 
programme.  

3.4 The problem  

This  study  departs  from  the  idea  that  customs  administrations  play  a  determining  role  in 
implementing  the  customs  union,  in  itself  being  an  absolute  precondition  to  the  proper 
functioning  of  the  Single  Market  and,  broadly,  to  the  success  of  the  European  Union  as  a 
whole.  

Since the customs union was set up in 1968, it is considered globally as a successful model 
of  trade  integration,  illustrated  by  the  fact  that  it  still  functions  as  a  cornerstone  of  the 
European Union. The customs union also paved the way for and is an essential element in 
the  functioning  of  the  Single  Market.  Whereas  the  customs  union  as  such  is  built  on  a 
common  external  tariff  (CET),  the  common  rules  under  the  Single  Market225 (created  in 
1993) extend into a wide arena of trade related matters, often touching upon the domestic 
(national) policy sphere.  

However,  whereas  customs  administrations  are  sometimes  hampered  in  the  execution  of 
their tasks, it is worthwhile to recall their missions, as outlined in Art. 3 of the UCC226: 

  protecting the financial interests of the Union and its Member States;  

224  See:  http://www.wcoomd.org/en/media/newsroom/2016/october/wco-releases-guidelines-on-customs-
tax-cooperation.aspx 

225 The  Single  Market  encompasses  the  28  EU  Member  States  and  4  non-EU  countries,  namely:  Iceland, 
Norway, Switzerland, Liechtenstein. 

226 Regulation EP and Council (EU) 952/2013 of 9 October 2013 laying down the Union Customs Code,  O.J. L 
269, 10.10.2013. 

150 

 
 
                                                      
  protecting  the  Union  from  unfair  and  illegal  trade  while  supporting  legitimate 

business activity;  

  ensuring the security and safety of the Union and its residents, and the protection 
in  close  cooperation  with  other 

of  the  environment,  where  appropriate 
administrations; and 

  maintaining  a  proper  balance  between  customs  controls  and  facilitation  of 
legitimate  trade  to  prevent  illicit  trade  and  fraud  in  customs  transactions  and  to 
ensure customs revenue. 

As a result of global trends (highlighted in the previous section) as well as the evolution of 
the  legal  framework,  including  the  creation  of  the  Single  Market  and  the  adoption  of  the 
Union  Customs  Code,  the  customs  administrations  are  also  facing  an  evolving  set  of 
challenges  to  the  customs  union’s  functioning. Throughout this study, the challenges and 
main  drivers  for  customs  administrations  in  the  carrying  out  of  their  missions  in  the  most 
optimal  manner  have  been  deepened.  Relative  areas  for  improvement  in  performance  of 
the customs union also appeared (indirect effects), to ensure efficient customs processes as 
well as uniformly applied legislation throughout the customs union and Single Market (also 
subject  of  the  2013  European  Commission  ‘Study on the Evaluation  of the  customs  union’ 
(2012)227. 

(drivers)  experienced  by  customs  administrations, 

Based on the insights on the trends impacting upon customs administrations, as well as the 
challenges 
the  main  problem 
underpinning the functioning of the EU customs union can be found in the lack of capacity 
of  its  customs  administrations  and  underperformance  of  cooperation  between  customs 
administrations  and  their  key  stakeholders  (mainly  third  countries  as  well  as  economic 
operators and other public administrations).    

Definition of main problem: 

Insufficient capacity of customs administrations and insufficient cooperation of customs 
administrations within the customs union and with third countries, in order for customs 
administrations to be able to carry out effectively and efficiently their missions 

These challenges (or drivers) have been assessed in the previous chapter, with specific focus 
on  three  aspects:  1)  unequal  capacity  of  customs  administrations,  2)  obstacles  for 
cooperation and 3) uneven interpretation of legislation.  

Whereas  the  Union  Customs  Code  provides  for  an  improved  legislative  framework  for 
customs administrations to act ‘as one’ in a unified and harmonized manner, the realisation 
of  a  more  effective  customs  union is  especially dependent on  the  capacity at organisation 

227 Study on the Evaluation of the Customs Union, Specific Contract No. 13 implementing Framework Contract 
No. DG TAXUD/2010/CC/101, 2012, p.12 

151 

 
 
 
 
                                                      
level (customs administrations) and cooperation between customs administrations and their 
key stakeholders. This is supported by the findings from the fieldwork undertaken in 9 EU 
Member  States.  The  findings  confirm  that  customs  administrations  and  economic 
operators  (as  well  as  other  stakeholders)  believe  that  the  functioning  of  the  customs 
union requires addressing the above mentioned problem. 

 The first, insufficient capacity  of  customs  administrations, has been found to continue to 
negatively impact the uniform application of legislation and efficiency of customs handling, 
underpinning  the  functioning  of  the  customs  union  (and  Single  Market).  This  has  been 
highlighted as a major area of concern during fieldwork visits, and the survey, as shown in 
previous sections and case studies (in annex).  

First,  with  regards  to  the  insufficient  capacity  of  customs  administrations,  the  previous 
chapter has brought out the complexity and multifaceted nature of this side of the problem.  
More concretely, fieldwork interviews have often linked the drivers with the main problem 
identified, whereby the capacity and cooperation often go hand in hand.  

  With regards to capacity related to customs processes, the differences in customs risk 
management  practices  (and  IT  systems)  has  appeared  as  an  important  challenge  to 
the  functioning  of  the  customs  union.  It  is  also  a  challenge  where  Member  States 
advance with own solutions and new modes of cooperation with stakeholders (such as 
logistic service providers), which further leads to divergent practices.  
More  specifically,  the  quality  and  use  of  data  for  risk  analysis  was  mentioned,  for 
example  during  a  fieldwork  meeting  with  a  representative  from  a  company:  ‘The 
customs  clearance  time  in  this  country  is  quite  good.  Compared  with  other  EU 
Member States, they are in the middle of the pack. As a company, we experience that 
the  customs  administration  is  putting  a  lot  of  emphasis  improving  efficiently, 
especially  through  the  use  of  risk  analysis  and  data  mining.  As  a  company  in  the 
express delivery sector, we agreed with the customs administration to allow access to 
our systems and exchange data for the purpose of performing risk analyses. However, 
it is different in each EU country, and we do not benefit from an EU-wide risk analysis 
initiative for customs’. 

  With  regards  to  capacity  related  to  IT  systems  and  technology,  the  fieldwork  has 
brought out some differences in priorities with regards to seeking ‘efficiencies’ in the 
design,  development  and  operationalization  of  shared  IT  systems.  For  example,  one 
Member  State  customs  representative  mentioned:  ‘We  are  concerned  about  the 
efficiency  of  the  current  set-up  of  customs  IT-systems  management.  In  our 
perspective,  it  should  be  a  more  competent  centre,  bigger  and  stronger,  so  that  we 
can have a more efficient way of developing IT systems. We need to look at efficiency 
gains  that  can  be  realized  by  considering  other  solutions  that  can  be  in  common  or 
shared, than the less efficient domestic solutions’. 

  With regards to capacity related to  human  resources, the survey has confirmed that 
almost  half  of  respondents  find  differences  in  human  resource  capacity  between 
European customs administrations is a crucial factor in the functioning of the customs 
union as a whole 

152 

 
 
Second, with regards to insufficient cooperation between customs administrations and their 
stakeholders  (third  countries,  economic  operators,  other),  the  variety  of  obstacles  has 
equally been brought out in the previous chapter. However, improved cooperation between 
customs administrations in the EU, and outside the EU, as well as key stakeholders, is felt to 
be  key  to  the  carrying  out  of  its  tasks.  During  fieldwork  and  in  the  survey  with  Member 
States, customs administration representatives as well as stakeholders confirmed the direct 
link between capacity of customs administrations and cooperation:  

  Referring  to  the  changing  trade  patterns  (e-Commerce)  and  increasing  forms  of 
cooperation  between  customs  and  economic  operators,  a  customs  representative 
mentions:  ‘The  establishment  of  strong  collaboration  channels  with  ‘third  party’ 
organisations may contribute to a more effective and efficient ecosystem for customs. 
Nevertheless,  there  are  currently  only  a  limited  number  of  collaborative  initiatives 
taking  place  –  mainly  initiatives  at  the  national  levels,  whereas  initiatives  at  the  EU 
level are in fact as good as inexistent’. 

  Business representatives across the EU experience discrepancies in customs handling 
and support provided through facilitation, impacting upon efficient customs handling, 
as  shown  in  the  case  study  on  trade  facilitation  (see  annex).  Sometimes,  business 
experienced that a lack of ‘culture to cooperate’ amongst  customs administrations is 
standing in the way of more efficient customs handling: ‘In this country, customs don’t 
always  understand  logistics  suppliers  are  competing  with  other  countries.  Should 
become  a  more  cost  efficient  process  and  a  smoother  procedure.  Malta  is  a  transit 
point and customs should act like it. Focus is still a lot on policing / border protection. 
Customs officials don’t see themselves as partners of business community’. 

is 

The  dual  nature  of  the  main  problem  described  in  this  section  confirms  that  the  customs 
link’.  Without  sufficient  capacity  of  customs 
union 
administrations in the EU, cooperation between them and their stakeholders is hampered, 
impacted.
and  vice  versa.  Either  way,  the  functioning  of  the  customs  union 

‘as  strong  as 

its  weakest 

is 

153 

 
 
3.5 Effects 

As  shown  in  the  problem  tree,  two  types  of  effects  should  be  considered:  the  direct  and 
indirect  effects.  A  preliminary  description  of  these  effects  is  provided  below.  Further 
evidence have been collected through the fieldwork in the Member States and the Member 
States survey.  

3.5.1 Direct effects 

Whereas  the  progress  and  results  of  the  customs  union  have  been  widely  acknowledged, 
the  reality  remains  that  the  customs  union  has  not  yet  reached  its  full  potential  (direct 
effect of the drivers and problems).  

The fact that the customs union has not yet reached its full potential is a direct effect of the 
main problem identified: the lack of capacity at the level of customs administration and the 
underperforming cooperation between them (and other stakeholders). The 2013 European 
Commission  ‘Study  on  the  Evaluation  of  the  Customs  Union’  (2012)  highlighted  key  areas 
where the full potential of the customs union remains to be realised. On the one hand, the 
unrealised potential of the customs union stemming from the main problem is to be found 
in  the  lack  of  uniformity  (mainly  differences  in  application  of  customs  legislation  and 
processes). On the other hand, the Evaluation study (2012) also identifies the consequences 
of  the  problem  related  to  both  capacity  and  cooperation:  differences  in  efficiency  in 
customs handling.228 

Hence, as further explained below, the fact that the customs union has not yet reached its 
full  potential  (direct  effect)  can  be  illustrated  through  differences  in  efficiency  and  lack  of 
uniformity in customs. 

  Uniformity.  Uniformity  in  the  application  of  customs  legislation  and  processes:  With 
regards to uniformity in the application of customs legislation and processes (based on 
UCC and other legislation), the study mentions that whereas differences are allowed 
in  so  far  as  they  are  in  accordance  with  EU  law,  in  principle,  all  customs  processes 
related to  a  given  shipment  should be  the  same  in  each Member State. In  this  area, 
the  study  concluded  that  level  of  uniformity  in  a  majority  of  customs  processes  and 
procedures is not satisfactory. The success of the customs union is hence dependent 
on uniform application of common rules at its external borders. However, the fact that 
28 administrations (including their specific sub administrations) are responsible for the 
implementation  of  the  single  policy  within  their  territories  continues  to  allow  for 
discrepancies  in  the  unified  approach.  Economic  operators  and  Member  States 
acknowledge  that  logically  an  insufficient  cooperation  between  Member  State 
customs  administrations  continues  to exist  when  carrying out  their  tasks,  hampering 

228 Study on the Evaluation of the Customs Union, Specific Contract No. 13 implementing Framework Contract 
No. DG TAXUD/2010/CC/101, 2012, p.12 

154 

 
 
 
                                                      
include:  conditions  for  simplified  procedures,  the 

the  full  potential  of  the  customs  union  “as  one”.  According  to  Member  State 
representatives, the main problem is not so much the lack of cooperation, but rather 
the  unequal  treatment  of  economic  operators  by  the  different  local  customs 
administrations.  Specific  areas  for  improvement  of  customs  processes  in  terms  of 
uniformity 
interpretation  of 
provisions on the taxable basis for import duty purposes (the customs value), and the 
classification  of  goods,  as  well  as  Authorized  Economic  Operator  processes.  In 
addition, major differences in actual control, and control philosophies, exist and these 
controls were deemed insufficient to secure the interests of the EU. With regards to 
risk  management  and  analysis,  the  lack  of  an  EU  approach  and  differences  between 
Member States are hampering the success of the customs union.   

  Efficiency. In relation to customs and trade, efficiency is herewith understood to mean 
speed, simplicity, predictability and cost-effectiveness of customs processes. Whether 
or  not  these  processes  are  carried  out  in  an  efficient  (and  uniform)  manner,  impact 
upon the over-all objectives of the customs union as a whole, and the performance of 
customs administrations in individual Member States.   

Figure 21 – High-level overview of the Customs processes 

Source: Deloitte elaboration 

A  useful  source  of  information  with  regards to customs efficiency  is provided  by  the 
latest  World  Bank  Logistics  Performance  Index  (LPI)  (2016)229,  which  analyses 
countries  in  six  components  (inter  alia:  ‘the  efficiency  of  customs  and  border 
management  clearance’  and  ‘the  ability  to  track  and  trace  consignments’).  The  LPI 
offers  both  country-level  and  region-level  data.  Illustrating  the  complexity  of  the  EU 
customs  union,  the  LPI  data  reveal  two  distinct  challenges  within  the  EU  customs 
union:  differences  between  Member  States,  and  differences  between  types  of  trade 
channels  (sea,  land,  air).  First,  in  order  to  reflect  on  the  current  situation  regarding 
efficiency  in  the  EU  customs  union,  a  perspective  on  indicators  at  EU  regional  level 
need to be complemented by national level indicators. At regional level, Europe as a 
whole stands for comparatively higher efficiency when looking at different indicators, 
such  as  in  relation  to  border  procedures  and  time.  Based  on  both  perspectives,  the 
functioning  of  the  customs  union  in  terms  of  efficiency  can  be  discussed.  National 
level heterogeneity is however visible. The LPI 2016 study for example finds that some 
(but  not  all)  EU  Member  States  are  in  the  top  10  LPI  economies,  notably  Germany, 

229 World Bank Logistics Performance Index (LPI) (2016), see: https://lpi.worldbank.org/ 

155 

 
 
 
 
 
                                                      
Luxemburg, Sweden, the Netherlands, Belgium, and Austria230. Of the 28 EU Member 
States, a total of 14 countries were among the top 30 countries in the LPI Report 2016. 
Romania (ranked 56th) and Bulgaria (ranked 62nd) fall out of the top 30 countries in 
the  LPI  report  2016,  which  is  partly  a  result  of  catching  up  by  upper-middle-income 
countries (such as Malaysia and South Africa)231.  
The main area for improvement of ‘efficiency related performance’ mentioned in the 
study  is towards  e-customs  and  Single  Window mechanisms,  as  well  as coordination 
with non-customs  administrations  for  clearance.  The  study  further  recommends  ‘the 
efficiency  of  Member  States  in  implementing  the  core  principles  of  the  EU  customs 
union  be  measured,  evaluated  and  improved  through  the  development  of  common 
performance indicators (EU-level KPIs)’, an area of work which is currently underway. 
Second,  there  is  equally  a  need  to  distinguish  between  different  trade  channels; 
maritime  transport  (ports),  air  transport  (airports),  road  or  rail  transport  (land). 
According to the World Bank LPI report, median import and export lead time through 
ports and airports (around 3 days) are more advantageous than over land (around 4 
days) for the highest performing countries in the LPI Report.   

The overall finding of the Evaluation study of the customs union has been that ‘the EU as a 
whole performs relatively efficiently when compared to other countries and regions of the 
world but performance is not the same across the EU-27’ (p.7). The current situation poses 
certain risks, and impacts negatively on the objectives of the customs union as a whole, and 
the missions of customs administrations in the 28 Member States.  

These  indirect  effects  of  the  current  situation,  whereby  the  customs  union  has  not  yet 
reached its full potential, can be (preliminary) described as follows. 

230

 Logistics 

Performance 
media.s3.amazonaws.com/LPI_Report_2016.pdf 

Index 

Report,  World 

231 Idem, p.15 

Bank, 

2016, 

p.8, 

see: 

https://wb-lpi-

156 

 
 
 
 
 
 
                                                      
3.5.2 Indirect effects 

In the recent survey on customs administrations, illicit trade entering the customs union and 
fraud in the transactions have been identified by the majority of the respondents as being 
the indirect effects having the greatest negative impact on the functioning of the  customs 
union. 

Figure 22 – Extent to which the indirect effect have a negative impact on the functioning of the customs unions 

Administrative burden

5

11

3

6

Environmental, security,
health and safety

Illicit trade

1

Risk for financial interests

4

4

8

9

9

11

4

4

12

4

5

0%

20%

40%

60%

80%

100%

To some extent

To a considerable extent

To a great extent

Do not know or no answer

N=25

Source: Deloitte  

Similarly,  illicit  trade  has  been  the  most  frequently  identified  as  having  the  greatest 
importance for customs organisations in the coming ten years. 

Figure 23 – Importance of the effects for customs organisations in the coming 10 years 

Administrative burden

Environmental, security,…

Illicit trade

Risk for financial interests

3

2

2

14

10

11

13

3

10

7

13

5

2

2

3

0%

20%

40%

60%

80%

100%

Somewhat important

Important

Very important

Do not know or no answer

Source: Deloitte  

Illicit trade and fraud in customs transactions 

Customs  administrations  continue  to  fulfil  an  important  role  in  protecting  the  financial 
interests  of  their  country,  as  well  as  the  customs  union  as  a  whole.  Currently,  national 
customs  administrations  are  allowed  to  retain  20%  of  customs  duties  collected,  which 
amounts may however be negatively impacted as result of fraud and illicit trade. For the EU, 

157 

 
 
 
customs  duties  represented  in  2016  a  revenue  of  EUR  20  billion,  i.e.  14%  of  the  Union’s 
budgetary resources.232  

In  a  situation  where  the  EU  customs  union  continues  to  operate  below  its  potential,  the 
circumvention  of  laws  and  optimization  of  fragmented  approaches  to  customs  processes, 
allow for illicit trade and fraud.  The continuing and growing risks from criminal and terrorist 
networks  active  in  fraud  and  illicit  trade  impacts  –  inter  alia  -  negatively  upon  customs 
revenues (at the same time also leading to severe security threats).  

Amongst the different types of illicit trade and fraud in customs transactions, the customs 
administrations regularly perform seizures of illicitly traded goods. For example, in Croatia, 
the equipment survey reveals important seizures related to excise duty fraud: smuggling of 
cigarettes and alcohol between countries concluded in 4.6 million cigarettes seized last year. 
On the other hand there is intellectual property protection against counterfeit goods from 
China in the ports which resulted in the seizure of 100 000 pieces of IPR infringing products 
in the port of Ploče.   

In Italy, the customs administration seizures focus on:  

  Narcotics, mostly from non-EU countries and Latin America;  

  Counterfeits:  clothing,  accessories,  watches,  sunglasses,  mobile  phones,  perfumes, 
toys,  halogen  light  bulbs,  razor  blades  (large  increase  in  2017),  products  non-
compliant with the CE mark (e.g. Low Voltage Directive, chemicals, etc.); 

  Drugs and doping substances purchased via Internet (and imported via couriers and 

postal services);  

  Cigarettes:  always  important,  but  had  a  large  increase  in  2017  (938  kilos  seized  in 

2017 vs. 195 in 2016), probably linked to increase in the price for cigarettes;  

  The  last  5  years  have  seen  the  raise  of  environment-related  illicit  imports  (and 
seizures),  even  at  airports.  While these  issues used  to  be  relevant for  land borders 
mostly,  in  the  last  few  years  there  has  been  an  increase  in  the  volume  of  goods 
marked as new appliances (e.g. stoves, refrigerators, etc.) which are in fact waste to 
be  disposed  (and  whose  treatment   would  be  expensive  if  done  according  to  the 
rules). It is likely that such trend will further increase in the next years.  

  Currency: in 2017, EUR 4.43 million seized and 1 904 controls for currency and anti-
money  laundering  controls,  90%  with  respect  to  2016  (limit  of  EUR 10 000  without 
documentation);  

  Undervaluation of imported goods, i.e. invoices declaring less than the actual value 

of the goods;  

232 Based  on  EU  ‘Own  resources  system’,  as  captured  in:  http://www.europarl.europa.eu/EPRS/140790REV1-
Own-resources-of-the-European-Union-FINAL.pdf 

158 

 
 
 
                                                      
  VAT  refunds  for  visitors  to  the  EU  (purchases  by  tourists  and  visitors  from  third 
countries  subject  to  VAT  reimbursement):  Customs  offices  authorize  refunds  and 
carry out controls. Recently, controls are carried out based on the risk management 
system Otello, which defines who and what needs to be controlled.  

e-Commerce  and  the  rise  in  low  value  consignments  also  offer  opportunities  to  (often 
unidentified) sellers to falsely fix and communicate prices below the threshold of EUR 150 
which kicks in the obligation to pay customs duties. 

Insufficient  communication between  administrations  and the  unused  potential  of  Big  Data 
still  offers  opportunities  to  traders  engaged  in  illicit  trade  to  slip  through  the  cracks  and 
avoid responsibility. The lack of data-backed risk management continues to leave gaps in the 
control  mechanism  and  in  countries  where  no  clear  processes  and  structures  are  in  place 
ownership of responsibility by customs officials can lead to a lack of enforcement.     

The financial interests of the EU and budget are at risk  

In  a  situation  where  the  EU  customs  union  continues  to  operate  below  its  potential,  the 
financial interests of the EU and the Member States are at risk. The EU budget is agreed on 
long-term spending plans, under the so-called “multiannual financial framework (MFF)”. For 
the  period  2014  –  2020,  a  total  budget  of  around  EUR  1  trillion  is  available  for  the  EU  to 
invest, with Annual Budget of around EUR 155 billion. Through collecting “own resources”, 
the EU collects contributions from Member States in three different ways:  

  Customs duties levied on economic operators go directly to the EU budget. Member 

State Governments retain 20% as collection costs; 

  The VAT bases of all Member States are harmonised. A uniform rate of 0.3% is levied 

on each Member State with some exceptions. 

  The GNI own resource finances the part of the budget not covered by other revenues. 

A fixed percentage rate is levied on each Member State’s GNI. 

Looking at the evolving EU budget, around 80% of the EU budget is financed from national 
contributions  based  on  VAT  and  GNI.  In  1970,  55%  of  the  EU  budget  was  financed  by 
customs  revenues,  anno  2018  this  contribution  has  decreased  to  16%.  Collected  revenues 
from  VAT  have  also  decreased  from  29%  in  1998,  to  12%  in  2018.  In  a  recent  reflection 
paper  on  the  “Future  of  EU  finances”  (2017)233,  the  European  Commission  outlines  the 
complexities  of  the  current  budget,  including  as  result  of  adjustments  and  ‘rebates’ 
negotiated  by  some  Member  States  (including  the  United  Kingdom-rebate),  as  well  as 

233

https://ec.europa.eu/commission/sites/beta-political/files/future-eu-finances-facts-and-figures-

factsheet_en.pdf  

159 

 
 
 
 
                                                      
decreasing  incomes  from  customs  and  VAT  revenues.  The  opportunities  for  alternative 
financing of the EU budget are equally highlighted234. 

Customs  administrations  continue  to  fulfil  an  important  role  in  protecting  the  financial 
interests of their country, as well as the EU as a whole. Currently, national Governments are 
allowed  to  retain  20%  collection  fees  of  the  traditional  own  resources  under  the  form  of 
customs duties collected through their national customs administrations. Hence, the EU and 
national  Government  budgets  are  at  risk  and  negatively  impacted  as  result  of  fraud  and 
illicit  trade.  For  the  EU,  customs  duties  currently  represent  12%  of  the  Union’s  budgetary 
resources.235  

Three trends are specifically affecting the reduced customs revenues, negatively impacting 
upon the interests of EU Member States and the EU as a whole.  

First, the growth of trade through e-Commerce (often benefiting from duty-free de minimis 
imports  below  EUR  150,  which  remains  in  itself  a  source  of  fraud)    impacts  upon  the 
collection  of  customs revenues  and the  contributions  to  the  National  Government and  EU 
budgets.  

Second, the lowering of customs duties levels as result of FTA’s. 

Third, numerous steps remain to be taken at the EU level, in cooperation with the Member 
States,  to  protect  the  EU  budget  from  fraud  and  other  illegal  activities  affecting  the  EU’s 
financial  interests.  In  its  latest  annual  report,  published  in  July  2017,  the  European 
Commission received nearly 20 000 reports of fraudulent and non-fraudulent irregularities 
relating  to  the  EU  budget  in  2016236. These  reports  involved  total  sums  of  approximately 
EUR  2.97  billion,  of  which  EUR  391  million  were  alleged  instances  of  fraud237. The  vast 
majority of the reports received related to the expenditure side of the EU budget. 

 As  a  result  of  the untapped potential  remaining  to  be  realized  by  the  customs union, the 
unbridled  entry  of  illicit  trade  and  continuing  practices  of  fraud  cannot  be  tackled 
successfully, impacting negatively on the customs mission in safeguarding (parts of) EU and 
Government budgets.  

Illicit trade in restricted and prohibited goods, which impact on the EU 
environment, security, health and safety 

International  trade  brings  economic  development,  but  equally  generates  risks  of  security 
and  safety  threats.  When  these  safety  and  security  risks  are  not  properly  managed,  the 

234 https://ec.europa.eu/commission/sites/beta-political/files/reflection-paper-eu-finances_en.pdf  

235 Based  on  EU  ‘Own  resources  system’,  as  captured  in:  http://www.europarl.europa.eu/EPRS/140790REV1-
Own-resources-of-the-European-Union-FINAL.pdf 

236 Report  from  the  Commission  to  the  European  Parliament  and  the  Council,  Protection  of  the  European 
Union’s financial interests — Fight against fraud 2016 Annual Report, COM(2017) 383 final, Brussels, 20.7.2017 

237 The total EU budget for payments in 2016 was €143.9 billion. 

160 

 
 
 
                                                      
economic  and  social  welfare  in  the  EU,  and  of  its  citizens,  is  at  stake.  In  light  of  these 
intrinsic  safety  and  security  risks  of  trade,  combined  with  the  interconnected  nature  of 
trade,  the  protection  of  EU  borders  and  citizens  requires  closer  cooperation  between 
customs administrations. 

In addition, the complexity of the safety and security risks calls for an integrated approach 
to realize coherence between customs policy and other areas of security, safety and health. 
Without a coherent perspective on the risks, departing from a strong partnership between 
actors involved, customs cannot contribute to the pursuit of other Union policy objectives. 

The environmental crimes are increasingly a concern to customs administration. These can 
include  illegal  activities  that  cause  damage  to  or  harm  the  environment,  such  as  illegal 
exploitation  of  flora  and  fauna,  or  pollution  related  crimes  such  as  disposal  and  trade  of 
legislation 238 . 
waste  and  hazardous  substances 
Environmental  crimes  are  the  fourth  largest  type  of  crime,  after  drug  trafficking,  trade  in 
counterfeit goods and human trafficking239. 

in  contravention  of 

international 

Whereas customs administrations already depart from existing rules, the increasing volumes 
and  changing  face  of  illicit  trade  and  fraud  in  customs  transactions  is  increasingly 
problematic,  and  in  some  instances  not  covered  by  current  EU  or  global  regulations.  The 
need for the EU to respond to new challenges and effects of trends, is translated into new 
policy proposals. For example: 

  Responding to environmental crimes, the new EU Directive provides new  rules  on  e-
waste (i.e. waste electrical and electronic equipment, or WEEE). These give Member 
States the tools to fight illegal export of waste. Increasingly, illegal shipments of WEEE 
are  a  serious  problem  for  Member  States  and  their  customs  administrations, 
especially as they are disguised as legal shipments to circumvent EU waste treatment 
rules. The new Directive will oblige exporters to test whether equipment works or not, 
and provide documents on the nature of shipments that could be thought illegal. The 
growth of exports of waste iron, steel, copper, aluminium and nickel from EU Member 
States doubled between 1999 and 2011, as has trade in waste wood.  

  International organisations equally step up their roles in response of these effects. For 
example,  the  WCO  has  also  taken  up  an  active  role  in  the  enforcement  of 
environmental  policies.  The  WCO  Council  adopted  a  Recommendation  concerning 

238

 WCO 

Illicit 

Trade 

Report, 

2015, 

http://www.wcoomd.org/-

/media/wco/public/global/pdf/topics/enforcement-and-compliance/activities-and-programmes/illicit-trade-
report/itr-2015-en.pdf?db=web.  

239 Nellemann, C. (Editor in Chief); Henriksen, R., Kreilhuber, A., Stewart, D., Kotsovou, M., Raxter, P., Mrema, 
E.,  and  Barrat,  S.  (Eds).  2016,  “The  Rise  of  Environ  mental  Crime  –  A  Growing  Threat  To  Natural  Resources 
Peace,  Development  And  Security.  A  UNEP-INTERPOL  Rapid  Response  Assessment”,  United  Nations 
Environment  Programme  and  RHIPTO  Rapid  Response–Norwegian  Center 
for  Global  Analyses, 
http://www.cms.int/sites/default/files/document/unep_cms_mikt1_inf-
5.4.a_the_rise_of_environmental_crime.pdf.  

161 

 
 
 
                                                      
Actions  Against  Cross-Border  Environmental  Offences  and  the  organization  launched 
the  Environmental  Programme  in  which  it  tries  to  broaden  partnerships  with  other 
organizations ‘working in the area of fighting against environmental crime’240.  

including  economic  operators, 

Protection of EU borders and citizens, as well as economic operators, is at risk as result of 
illicit trade in restricted and prohibited goods. Whereas the solution lies in legislative actions 
in  order  to  ensure  the  full  protection  of  EU  borders  and  citizens  as  well  as  economic 
operators  and  cooperation  between  customs  administrations  (as  well  as  with  different 
actors 
international  organisations,  and  third  country 
governments). In this regard, the EU has shown successful legislative proposals, notably in 
cash  controls241 and  illicit  trade  of  cultural  goods242.  Moreover,  the  complex  nature  of  the 
risks call for a stepping up of collaboration that is not only general (one size fits all) but also 
covers  other  and  more  specific  enhanced  collaboration  methods,  paving  the  way  for 
integrated and innovative approaches that deliver results.’ 

Red tape and more burdensome customs handling for business and citizens, 
limiting the full deployment of the EU Single Market and the EU 
competitiveness  

As  the  first  point  of  contact  for  incoming  trade  from  third  country  businesses  and  a  last 
contact  point  for  outgoing  trade  from  the  EU,  customs  administrations  are  crucial  in  the 
protection  of  the  EU’s  (external)  trade  interests.  The  uniform  application  of  customs  and 
trade related legislation, and efficient design and implementation of customs processes, is 
especially  important  to  ensure  that  businesses  can  operate  in  an  optimal  business 
environment. A fragmented approach to customs processes and non-uniform application of 
laws  impact  negatively  on  business  competitiveness.  This  counts  for  domestic  (EU) 
businesses, as much as it does for third country businesses.  

A clear example is the practice of businesses importing in those Member States where fines 
and penalties on a certain infringement are lowest, or trading with those countries offering 
a  more  advantageous  implementation  of  a  trusted  trade  programme.  Whereas  some 
businesses  may  benefit  from  this  sub-optimal  lack  of  uniformity,  this  reality  leads  to 
differential treatment (and potential discrimination) of businesses across the EU.  

Over-all,  the  practice  of  ‘free  rides’  as  a  result  of  non-uniformity  and  diverging  levels  of 
efficiency in customs processes reduces the attractiveness of the business environment and 
impacts negatively on business competitiveness.  

240

 http://www.wcoomd.org/en/topics/enforcement-and-

compliance/~/link.aspx?_id=0FE801267DC14372A5782024A56B8686&_z=z. 

241 Regulation  (EC)  No  1889/2005  of  the  European  Parliament  and  of  the  Council  of  26  October  2005  on 
controls of cash entering or leaving the Community (OJ L 309, 25.11.2005, p. 9). 

242 Proposal for a Regulation of the European Parliament and of the Council on the import of cultural goods, 
COM(2017) 375 final, Brussels, 13.7.2017 

162 

 
 
 
 
                                                      
Beyond  the  matter  of  customs  processes,  the  expanded  control  functions  of  customs 
administrations  into  non-customs  topics  and  legal  frameworks,  mean  that  the  impact  of 
diverging  approaches  is  far-reaching.  In  this  sense,  it  is  relevant  to  mention  that  the  EU 
Common Commercial Policy aims to contribute to the progressive abolition of restrictions in 
international  trade.  Beyond  customs  duties,  the  EU  Common  Commercial  Policy  aims  to 
ensure  uniform  principles,  especially  with  regards  to  import  and  export  policies  (such  as 
standards  on  safety  and  intellectual  property),  trade  measures  (including  anti-dumping  or 
anti-subsidy)  and  the  conclusion  and  renegotiation  of  tariff  and  trade  agreements  with 
countries outside the EU.  

However, the growing unpredictability of trade (protectionist measures on the rise), and the 
broadening  of  matters  covered  in  trade  agreements  (which  include  aspects  of  shared 
competencies between the EU and national Member States) have given rise to differences 
in interpretation, lack of awareness and information gaps. Specific changes impact intra-EU 
and inter-EU trade: the entry into force of Free Trade Agreements (and subsequent changes 
in  rules  of  origin  conditions  and  duties),  elimination  or  installing  of  sanctions,  changes  of 
requirements  on  labelling,  introduction  of  import  bans  or  restrictions  (such  as  conflict 
minerals or endangered species).  

Both the lack of a uniform implementation of customs legislation among EU Member States 
and  the  expansion  of  control  functions  for  customs  administrations  obviously  also  lead  to 
more  red  tape  for  businesses.  The  different  application  of  customs  legislation  in  the 
Member States is burdensome for businesses as they are practically obliged to reassess for 
each country their employed methods and alter their approach to be in line with the local 
regulations.  

The  expansion  of  customs  controls  towards  other  non-customs  controlled  topics  leads  to 
more and longer checks and in turn results in longer waiting periods for businesses. These 
businesses  become  subject  to  more  administrative  tasks  taking  away  time  and  resources 
from actual profitable activities.    

The  need  for  enhanced  collaboration  between  customs  administrations  within  the  EU  as 
well as with third countries cannot be overstated: to exchange information, to verify origin 
and declarations, to ensure a coherent and uniform application of EU legislation as well as 
international agreements.  

In a customs union which has not yet reached its full potential, domestic and international 
business  competitiveness  may  be  impacted  negatively,  hampering  the  realization  of 
economic growth and development of the EU as a whole.  

163 

 
 
 
4  Policy objectives and building blocks 

This  chapter  presents  the  policy  objectives  identified  for  the  new  generation  of  the 
Customs  programme.  It  also  describes  the  building  blocks  for  the  design  of  the  policy 
options and the baseline scenario(s).   

4.1 Policy objectives for the new Customs programme 

The  policy  objectives  set  out  the  goals  and  political  priorities  for  action  in  the  relevant 
field.243 The definition of policy objectives is an essential step of each Impact Assessment as 
they, in accordance with the Better Regulation Guidelines, support: 

  The  definition  of  a  range  of  policy  options,  and  thus  the  creation  of  a  logical  link 

between these potential solutions and the problems identified; 

  The  clarification  of  the  relationship  between  the  specific  goals  of  the  initiative 
considered  and  the  horizontal  EU  objectives  and/or  any  other  relevant  agreed 
political goals; 

  The explanation of any trade-off between different policy objectives; 
  The criteria for comparing the different policy options (particularly necessary for the 
criterion  on  effectiveness  of  the  policy  options)  and  the  indicators  to  measure 
performance and progress towards the objectives; and 

  The  establishment  of  the  criteria  to  be  considered  as  part  of  the  proposed 

monitoring and evaluation framework for the implemented policy measure. 

Policy objectives are normally identified at the following levels: 

  Operational objectives concern deliverables or objectives of actions; 
  Specific  objectives  relate  to  the  specific  domain  and  set  out  what  the  European 

Commission wants to achieve with the intervention in detail; and  

  General objectives refer to Treaty-based goals and constitute a link with the existing 

policy setting. 

The  figure  below,  which  flows  from  bottom  to  top,  represents  the  objective  tree 
established, based on the drivers, problems and effects identified in the previous  chapter.

243 European  Commission,  Better  Regulation  Guidelines,  19  May  2015,  SWD(2015)  111  final,  pp.  21-22 
(http://ec.europa.eu/smart-regulation/guidelines/toc_guide_en.htm); 
Better 
Regulation  "Toolbox",  complementing  the  Better  Regulation  Guidelines  presented  in  in  SWD(2015)  111,  pp. 
80-81 (http://ec.europa.eu/smart-regulation/guidelines/docs/br_toolbox_en.pdf) 

Commission, 

European 

164 

 
 
 
                                                      
Figure 24 - Objective tree 

Source: Deloitte 

165 

 
 
 
 
 
 
4.2 Building blocks for policy options 

The design of the policy options is a two-stage process. The first step is the identification of 
the  different  components  of  the  policy  options  (i.e.  the  building  blocks),  and  of  the 
different elements that constitute them. The building blocks and elements are combined to 
construct the policy options, based on the needs and inputs identified in the problem tree, 
and  confirmed  by  customs  administrations  during  the  interviews  (and  on  the  additional 
inputs provided by the other stakeholders interviewed).  

The  building  blocks  are  divided  between  main  and  secondary  building  blocks,  where  the 
main  building  blocks  are  the  ones  that  drive  the  design  of  the  options  for  the  future 
Customs programme, and the secondary ones are defined as a consequence of the primary 
ones. Vision, geographical focus, activities and participants are the main blocks, while direct 
beneficiaries, governance and funding are the secondary building blocks.  

They are defined as follows and further described in this section:  

  Vision:  identifies  the  overall  aim  and  scope  of  the  programme  initiative  for  the 
future. It can be wider than the scope of the present Customs Programme or more 
limited  (e.g.  strengthen  the  EU  customs  union’s  position  in  the  world  sphere  or 
“simply” support the full implementation of the EU Customs policy); 

  Geographical  focus:  defined  as  “the  geographical  spotlight  of  the  programme”. 
Currently,  the  spotlight  for  the  Customs  programme  is  on  the  customs  union.  A 
different  (broader)  geographical  focuses  than  those  of  today  could  entail  more 
consideration of the external dimension of the programme.  

  Activities:  defined  as  the  range  of  eligible  actions  to  be  supported  under  the 

programme. This building block is divided between: 

  The toolbox: the specific tools and methodology that participating countries 

use to collaborate and work together (e.g. trainings, workshops, etc.); 

  The scope of collaboration: which refers to the general domain in which the 

activity is supposed to be performed.  

  Participants: identifies who are the participants in the activities of the programme. 
This category of players is different from the category of beneficiaries, which is put 
forward as additional (secondary) building block (see below). 

  Direct  beneficiaries:  those  players  directly  benefitting  from  the  outputs  of  the 
programme (which excludes random citizens for instance, as they are only indirectly 
benefitting  from  their  activities).  This  category  could  include  for  instance:  customs 
administrations,  other  public  administrations,  EU  and  non-EU  traders,  and 
universities. 

  Governance:  the  way  in  which  decisions  on  the  programme  are  taken  and  the 
responsibilities distributed amongst stakeholders. For instance, policy options could 
foresee centralised, hybrid or decentralised governance methods involving a smaller 
or bigger decision making role for participating countries and private stakeholders;  
  Budgetary sources: defined as the sources for the budget to finance the programme 
(e.g.  relying  on  EU  sources  only,  benefitting  from  contributions  coming  from  other 
sources, synergies with other programmes, etc.).  

166 

 
 
 
  Funding  models: this concerns the financial instruments that the programme could 
mobilise  to  finance  the  activities  falling  in  the  scope:  e.g.  grants  to  participating 
countries or other stakeholders, loans, procurement, risk capital contributions etc.  

Each of these building blocks comprises a range of possibilities, from the most restrictive to 
the  most  inclusive.  The  combination  of  one  (or  more)  elements  from  each  building  block 
constitutes the different policy options.  

The  table  below  shows  the  range  of  possibilities  identified  within  each  of  the  building 
blocks. The cells coloured in green indicate elements of the building blocks that are already 
fully covered by the current programme. The cells coloured in light blue indicate elements 
of the building block that are only partially covered by the current programme (i.e. on an ad-
hoc basis).  

167 

 
 
 
 
Source: Deloitte 

Table 7 - Building Blocks 

168 

EU Member StatesAcceding countriesCandidate and potential candidate countriesEFTA countriesCustoms administrationsNon-EU customs administrations Other non EU public administrations AcademicsCustom authoritiesEU established traders and AEOsEU civil societyCivil Society OrganisationsNon-EU based traders and EOsNon-EU civil societyGrantsGuaranteesRisk sharing instrumentsPublic Private PartnershipBuilding BlocksGovernanceFunding models Public administrationsProcurementActivities (toolbox)Direct beneficiaries (output)Possibilities Strengthen the Customs Union position in the worldAnticipate change, prepare the Customs Union for the future and enable it to address any possible crisisInterest groups and civil society associationsInternational organisationsAll other countries in the world (especially WTO / WCO countries)Economic operatorsKey trade partners (e.g. EEA etc.)SandboxVision groupJoint operationsWorkshops (incl. seminars)Expert teamsWorking visitsEU Neighborhood policy countries VisionGeographical focusParticipants in the activities Project groupsOther EU public administrations Bring all Member States at the same level and support specific Member States needsSupporting functioning of the Customs Union and protecting EU borders and  citizensSupport the full implementation of the EU Customs policyAwardsCentralised around TAXUDCentralised with the involvement of other DGsHybrid (EU agency)TechnologyTrainingsExternal providersLoansHybrid (EU Customs Administration)Reimbursement Synergistic and complementary approach to the programmesMember States contribute moreThird countries contributeEconomic operators contributeAnybody can contributeBudgetary sourcesEU budget onlyUniversities and research centersNon-EU Civil Society organisationsStudiesCommunication projectsHybrid (programme steering group)Hybrid (international agency)Hybrid (with third parties)Decentralised at participating countries' level 
 
 
 
In  addition  to  the  building  blocks  presented  above,  duration  represents  an  additional 
feature  that  is  relevant  to  the  formulation  of  a  programme.  Nonetheless,  duration  is, 
generally speaking244, directly impacted by and dependent on the MFF timeframe (currently 
set  at  seven  years).  As  such,  this  study  will  not  examine  the  possibility  and  impact  of 
shortening or extending the programme timeline. 

The mere combination of the different building blocks would result in a very high number of 
policy options. However, combining all possibilities of all building blocks is not the purpose 
of the exercise. The aim is rather to assess, based on the data collected, which are the most 
relevant and rational possibilities under each building block and which respond better to the 
needs identified through the data collection, in order to combine them in a limited number 
of policy options.  

In  this  respect,  it  must  also  be  noted  here  that  some  of  the  building  blocks  have  strong 
logical  links  to  others.  For  instance,  the  building  block  on  stakeholder  involvement  in  the 
programme  is  linked  to  the  question  of  the  eligible  activities  under  the  programme  (e.g. 
funding  innovation  without  involving  academia  to  participate  in  the  programme  would 
probably  be  sub-optimal).  The  combination  of  building  blocks  into  policy  options  should 
therefore respect the underling logic and connections between them.  

4.2.1 Primary building blocks 

With primary building blocks we define those constitutive parts and elements of the future 
programme  that  most  shape  its  form  and  can  have  influences  on  the  secondary  building 
blocks.  There  are  four  primary  building  blocks:  vision,  geographical  focus,  activities  and 
participants. Each of them is described below.  

Vision(s) of the programme 

A first very important building block for designing the future policy options consists in the 
definition of the  overall  vision(s)  of  the  next  programme. This can be defined as the high 
level  orientation  or  spirit  of  the  Customs  programme,  encompassing  all  other  constitutive 
elements. Currently, the general vision of the Customs 2020 programme is to: “support the 
functioning  and  modernisation  of  the  customs  union  in  order  to  strengthen  the  Internal 
Market  by  means  of  cooperation  between  the  participating  countries,  their  customs 
administrations  and their  officials”.245 According to  this  vision,  the  focus  is particularly  put 

244 Exceptions  exist  for  instance  the  ISA2  programme  (interoperability  solutions  for  public  administrations) 
which consists in programming cycles of five years, https://ec.europa.eu/isa2/isa2_en  

245 See Art. 5 of the  Regulation 1294/2013 of the European Parliament and the Council of 11 December 2013 
establishing  an  action  programme  for  customs  in  the  European  Union  for  the  period  2014-2020  (Customs 
2020) 
624/2007EC, 
http://ec.europa.eu/taxation_customs/sites/taxation/files/resources/documents/taxation/tax_cooperation/fis
calis_programme/legal_texts_docs/customs_2020_regulation.pdf  

repealing 

decision 

and 

No 

169 

 
 
 
                                                      
on  the  functioning  and  modernisation  of  the  customs  union  and  on  cooperation  between 
the participating countries.  

Stakeholders’  views  on  which  should  be  the  “vision”  for  the  next  programme  are  not 
unanimous.  On  the  one  hand,  some  suggested  extending  the  vision  and  scope  of  the 
Customs  programme  to  emphasise  more  the  need  to  support  customs  administrations 
increasingly  dealing  with  non-traditional  customs  tasks  (e.g.  anti-terrorism  activities, 
cybersecurity)  or  to  strengthen  the  support  to  individual  participating  countries  having 
specific  needs.  Conversely,  a  number  of  stakeholders  advocated  for  maintaining  the  focus 
on the core functions of the EU Customs CFW in order to avoid a very dispersive approach 
and overlap with other programmes’ domains of action. At the same time, there is a general 
agreement  that  the  future  programme  should  allow  for  covering  activities  with  objectives 
addressing Art. 33, Art. 87 and Art. 325 of the TFEU, in terms of the customs functions. 

Additionally, it was mentioned that, due to the distribution of competences in the customs 
area  (policy  making  at  the  EU  level  and  implementation  at  the  national  level),  a  clear 
separation  of  competences  should  be  maintained.  The  European  Commission  should  be 
mindful not to overstep in terms of implementation of customs policies. Also based on these 
discussions, several different (but not mutually exclusive) possibilities exist in relation to the 
programme’s objectives for the future: 

  It could be decided to maintain the  same  vision  or  a  similar  as  per  Customs  2020. 
This  would  mean  keeping  the  focus  of  the  programme  on  assisting  participating 
countries  with  the  implementation  of  the  EU  Customs  policy  and,  under  Art.  33  of 
the  TFEU,  exclude other  actions falling  outside  this domain but  sometimes  also,  de 
facto,  under  the  responsibility  of  certain  EU  customs  administrations  (e.g.  border 
protection,  excise,  border  control  of  persons,  gambling,  black  labour  etc.).  This 
possibility would therefore mean a continuation of the status quo. A small number of 
stakeholders  advocate  for  this  possibility  as  they  believe  that  a  restrictive 
interpretation of the programme could help maintaining the focus on the core tasks 
of customs administrations.  

  As a second possibility, it could be envisaged to have a wider understanding of what 
falling under the Customs programme through a  more overarching support for the 
functioning  of  the  customs  union  overall,  including  more  focus  on  protection  of 
border  and  citizens  and  support  for  the  role  of  customs  in  safety  and  security  in 
relation  to  customs  control  functions,  also  including  objectives  linked  with  the 
prevention, detection and investigation of illicit activities. This scenario would also 
mean  an  extension  in  terms  of  activities  supporting  the  fight  against  fraud  and 
financial  crime  in  the  customs  domain  harming  the  EU's  financial  interest.  This 
vision could be justified by the fact that customs administrations are taking more and 
more  responsibilities  for  non-traditional  tasks  and  they  also  need  assistance  for 
these new  competences.  This  would  mean  conceiving the programme  as  a  support 
for customs administrations no matter in which domain they operate. This vision had 
the  support  of  a  considerable  number  of  stakeholders  both  in  the  Member  States 
and at the EU level.  

170 

 
 
 
  A  third  option  for  the  future  of  the  programme  could  focus  the  next  Customs 
programme  more  on  levelling  the  capacities  (human,  IT  and  operational)  of  all 
participating countries in order to ensure the same quality and standard of delivery 
in all EU countries and support specific participating countries’ needs. This objective 
would  go  beyond  mere  support  to  the  implementation  of  the  customs  union  and 
would  entail  providing  concrete  means  (e.g.  equipment,  IT  resources)  to  those 
administrations which lack them the most. In this respect, while some consider this 
strictly  necessary  to  achieve  a  well-functioning  customs  union,  others  question 
whether  the  European  Commission  should  be  involved  to  this  extent  in  the 
implementation,  as  this  responsibility  remains  in  the  hands  of  the  participating 
countries.  Supporting  specific  participating  countries’  needs  would  also  mean 
responding  to  country-specific  demands  for  support  on  a  customised  and  case  by 
case basis. This could entail adopting an à-la-carte approach for the programme and 
financing certain types of activities in one country and a completely different set in 
another, based on the different needs. For instance, the programme could support 
more  those  countries  bearing  the  highest  burden  in  terms  of  control  of  external 
borders (e.g. Eastern countries). Although some support was shown in favour of such 
a  vision,  some  stakeholders  argued  that  such  a  customised  approach  to  the 
participating  countries  could  increase  differences  within  the  customs  union  more 
than diminish them.   

  A fourth possible vision for the programme could consist in the strengthening of the 
customs  union  position  in  the  world.  In  this  respect,  the  focus  of  the  programme 
could  be  on  even  increasing  the  EU  customs  union  performance  on  a  global  scale 
through, for instance, putting the spotlight on crisis management and innovation. In 
this perspective, the objective of the programme would not be on implementation of 
the current custom legislation and framework but rather on ensuring the capacity of 
customs  to  respond  to  crisis  and  to  innovate.  This  would  mean  distinguishing 
between  routine  activities/business  (which  would  not  be  in  scope)  and  innovative 
driven or risk/emergency driven activities on which the programme would focus (e.g. 
responding to a safety crisis such as the bird flu). In this case, the scope and added 
value  of  the  programme  would  be  very  different  than  today  and  this  would 
constitute a major change for customs. 

  Finally, it could be envisaged to establish even wider and more flexible objective(s) 
for  the  programme,  including  all the  points  mentioned  above  and notably  focusing 
on anticipating change, prepare the customs union for the future and enable it to 
address any possible crisis. According to the stakeholders, in this case the width of 
the objectives could be detrimental to the focus of the programme and could entail 
some overlapping with other funding instruments of the EU, but, on the other hand, 
it could help ensure the flexibility of the tool over the next few years. The question of 
the  flexibility  (concerning  all  building  blocks  in  fact)  emerged  as  a  key  point  to 
consider for the future.   

171 

 
 
 
The range of programme objectives described above is not mutually exclusive. In fact, they 
can be combined in different ways, based on orientations and needs that have emerged as 
most relevant from the consultation process with stakeholders in Member States and with 
the European Commission. For instance, a more traditional focus on assisting  participating 
countries in implementing Customs policy can be combined with a more customised support 
based  on  ad-hoc  needs  of  participating  countries  and/or  with  a  special  focus  on  crisis 
management and innovation (possibly on a voluntary basis).   

The  vision(s)  of  the  programme  have  an  influence  on  other  building  blocks  of  the  policy 
options. For instance, if it is decided that new  objectives should be envisaged for the next 
programme,  this  might  include  establishing  new  types  of  activities  to  be  funded  and/or 
involving more stakeholders from outside customs. On the contrary, if the objective is only 
to  assist  participating  countries  in  the  implementation  of  customs  policy,  it  would  not  be 
logical  to  enlarge  the  geographical  scope  and  make  non-EU  countries  beneficiaries  of  the 
programme  as  well.  Therefore,  as  also  emerged from  the preliminary  discussions  with the 
stakeholders, the question of the objective(s) of the future  programmes provides a sort of 
framework for declining all other building blocks.  

The  survey  of  customs  administrations  has  revealed  that  the  vision  that  comes  the  most 
frequently  to the  forefront  – 23  out  of  25  respondents  –  as helping  their  organisations  to 
improve capacity, cooperation within the EU and with third countries, as well as to carry out 
effectively and efficiently their missions is “Supporting the functioning of the Customs Union 
and protecting borders and citizens”’.  

Figure 25 – Visions to improve capacity, cooperate better, and carry out effectively and efficiently customs 
missions 

Source: Deloitte 

172 

 
 
 
 
Geographical focus 

The second building block for the establishment of the future policy options consists of the 
definition of the most relevant geographical focus of the programme, i.e. on which countries 
should the programme put the spotlight. Several possibilities are applicable: 

  The  next  programme  could  put  the  spotlight  only  on  EU  Member  States:  this 
possibility would be the most restrictive and would reduce the current Custom 2020 
geographical  focus,  which  has  the  spotlight  mainly  on  the  Member  States  only.  As 
mentioned during the interviews, due to global trends and the need to work closer 
and  closer  with  other  countries  (such  as  neighbouring  countries  but  also  other 
countries),  this  option  is,  in  general,  not  considered  as  preferable  for  the  next 
Customs programme.  

  A second possibility could be to  open the geographical focus to all the EU Member 
States  plus  some  selected  third  countries  (as  it  is  currently  the  case).  This  option 
was  indicated  as  the  most  sensible  by  a  majority  of  stakeholders.  Indeed,  also 
acknowledging  the  need  for  the  EU  to  act  in  an  interconnected  and  fast  changing 
world,  it  was  mentioned  that  cooperating  with  countries  outside  the  EU,  acting 
together  when  facing  common  challenges  and  learning  from  them  is  crucial.  The 
selection of third countries to be associated to the next Customs programme (on top 
of the EU Member States) could include:  

  Countries  participating  in  the  European  Free  Trade  Association  (EFTA)246.  This 
has  been  mentioned  by  a  number  of  interviewees  as  a  rational  choice,  given 
the economic links these countries have with the EU and their integration into 
the Single Market. However, these countries are currently not included in the 
list of eligible participating countries of the programme. 

  Candidate countries (Albania, Serbia, Montenegro, Turkey and Former Yugoslav 
Republic  of  Macedonia)  and  potential  candidate  countries  (Kosovo247 and 
Bosnia  and  Herzegovina).  This  has  also  been  pointed  out  very  often  by  the 
interviewees  and  in the context  of the  Customs Project  Group  and fieldwork, 
also  considering  that  these  countries  need  to 
implement  EU  customs 
provisions in their accession agreements.  

  EU  Neighbourhood  Policy  (ENP)  countries248 (countries  participating  in  the 
European  Neighbourhood  Policy 249 ,  Euro-Mediterranean  partnership 250  or 

246 Norway, Switzerland, Iceland and Liechtenstein  

247 This  designation  is  without  prejudice  to  positions  on  status,  and  is  in  line  with  UNSC  1244  and  the  ICJ 
Opinion on the Kosovo declaration of independence. 

248 According  to  Art.  3(2)(b),  the  EU  Neighbourhood  Policy  countries  “shall  participate  in  the  programme  in 
accordance with provisions to be determined with those countries following the establishment of framework 
agreements concerning their participation in Union programmes”. 

249 Algeria,  Armenia,  Azerbaijan,  Belarus,  Egypt,  Georgia,  Israel,  Jordan,  Lebanon,  Libya,  Moldova,  Morocco, 
Palestine, Syria, Tunisia, Ukraine 

173 

 
 
 
                                                      
Eastern  Partnership251).  Most  stakeholders  agree  that  working  closely  with 
these countries is crucial as they represent the external borders of the EU. This 
was  particularly  emphasised  for  the  Eastern  Partnership  countries  (Armenia, 
Azerbaijan, Belarus, Georgia, Republic of Moldova and Ukraine252).  

  Countries  having  a  FTA  with  the  EU  (e.g.  South  Korea,  Canada).  It  was  often 
mentioned by stakeholders that cooperation with other countries (farther from 
the  EU  border)  might  be  needed  within  the  context  of  existing  or  new  Free 
Trade  Agreements  or  Trade  Facilitation  Agreements  developed  by  the  EU. 
However, as one of the interviewees pointed out that, as long as FTAs concern 
only  other  developed  countries  (e.g.  South  Korea),  the  need  for  further 
customs cooperation with them could be limited. On the other hand, customs 
cooperation  could  be  more  important  in  case  of  FTAs  signed  with  less 
developed economies  (e.g.  Indonesia)  which  might need  more  support  in  the 
customs  domain.  In  general,  however,  there  was  no  agreement  between 
stakeholders on the level of cooperation needed with FTAs partner countries.  

  All of the above  

  Building  on  the  possibility  of  focusing  the  programme’s  spotlight on  some  selected 
third countries, in addition to those listed above, the focus of the programme could 
also be on other selected third countries based on their membership in international 
organisations or groups, such as: 
  Non-EU OECD countries253 
  Non-EU countries members of the Group of Seven countries (G7)254 
  Non-EU  countries  member  of  International  forum  for  the  governments  and 

central bank governors (G20)255 

However, this idea was not supported by the majority of the interviewees who did 
not  see  a  strong  rationale  for  making  such  a  choice  at  this  stage. Moreover,  it  was 
mentioned  that  other  programmes  exist,  which  fund  cooperation  with  all  these 
categories of countries.  

  From an even wider perspective, the programme could be focused on all countries in 
the  world  and  especially  the  175  WCO256 or  164  WTO257 member  countries.  This 

250Algeria, Egypt, Israel, Jordan, Lebanon, Mauritania, Morocco, Palestine, Syria, Tunisia. 

251 Armenia, Azerbaijan, Belarus, Georgia, Moldova and Ukraine 

252 Ukraine,  Georgia  and  the  Republic  of  Moldova  are  Deep  and  Comprehensive  Free  Trade  Area  (DCFTA) 
countries as per the respective Association Agreements. 

253 See: http://www.oecd.org/about/membersandpartners/list-oecd-member-countries.htm  

254 Japan, US and Canada 

255 Argentina,  Australia,  Brazil,  Canada,  China,  India,  Indonesia,  Japan,  Mexico,  Russia,  Saudi  Arabia,  South 
Africa, South Korea and the US. 

256 See: http://www.wcoomd.org/en/about-us/wco-members.aspx  

257 See: https://www.wto.org/english/thewto_e/whatis_e/tif_e/org6_e.htm  

174 

 
 
 
                                                                                                                                                                     
could  cater  for  the  need  of  monitoring  more  and  more  integrated  supply  chains 
which  involve  both  EU  countries  and  less  developed  countries.  Once  more,  this 
approach was not considered neither desirable nor feasible by a strong majority of 
stakeholders,  also  considering  that  other  programmes  could  be  mobilised  in  the 
framework of EU relations with developing countries.  

As  for  the  vision  of  the  programme,  the  possibilities  for  the  geographical  focus  of  the 
programme  are  not  mutually  exclusive.  In  fact,  they  can  be  combined  in  different  ways, 
based  on  decisions  taken  on  the  vision  and  needs  that  emerge  as  most  relevant.  As  an 
example, a spotlight on only EU Member States could make sense for the implementation of 
Customs policy, while additional third countries could be included in crisis management and 
innovation activities (possibly on a voluntary basis).   

Logically, this building block also presents a link with the question of funding. Currently, the 
programme  is  open  to  selected  third  countries  (see  above),  which  have  to  provide  a 
financial  contribution  to  become  eligible.  This  option  remains,  in  general,  the  preferred 
choice  of  the  interviewed  stakeholders.  However,  in  the  future,  it  could  be  decided  to 
maintain  the  same  geographical focus,  but  change  the  funding  rules  for  third  countries  to 
make  them  more  similar  to  those  applicable  to  the  Member  States  (e.g.  in  terms  of 
reimbursement) and thereby further facilitate their participation.  

Activities  

A  third  main  building  block  is  the  activities  that  could  be  organised  under  the  future 
programme. Currently the activities are divided in three main groups: 

 

 

Joint  actions  (such  as  workshops,  working  visits,  project  groups,  expert  teams) 
pursuing the exchange of knowledge and best practice between customs officials of 
the participating countries.  
IT  capacity  building:  The  EIS  facilitate  the  information  exchange  and  access  to 
common data among the customs administrations of the EU Member States, as well 
as with a number of third countries (e.g. candidate countries, Norway, Switzerland, 
as well as Russia for NCTS-TIR). 

  HCB:  common  training  activities  to  support  the  necessary  professional  skills  and 

knowledge relating to customs. 

Most stakeholders were satisfied with the current activities and were in favour of continuing 
them in the future. However, it was also said that these activities led to confusion as they 
are  actually  macro  categories  that  mix  methodology  and  area  of  action,  and  they  can 
sometimes  seem  either  complementary  or  overlapping.  In  particular,  a  number  of 
interviewees were of the opinion that joint actions provided, in some cases, the means to 
reach  the  other  two  activities,  which  were  rather  considered  as  areas  of  action.  The 
European Commission also flagged this point as it makes the categorisation of the actions a 
complex and burdensome exercise. According to the results of the survey, the activities for 
the  participating  countries  the  programme  should  concentrate  on  are:  development  and 
maintenance of common EU IT systems (92% of respondents), exchange of experience, best 

175 

 
 
 
practices,  mutual  learning  and  knowledge  management  (92%);  and  training,  learning  and 
competency building activities (96%). 

Based  on  these  insights,  the  study  team decided  to  present the  activities  for  the different 
policy  options  in  a  more  straightforward  and  flexible  manner,  by  defining  them  as  a 
combination of one or more tools, a scope of collaboration and a topic. Therefore, the term 
“activities” used in the following building blocks refers to any activity regardless of its scope 
of collaboration, the tool used and the topic addressed. 

Firstly, the macro-categories were broken down into different tools and methods, part of a 
toolbox. The below table provides an overview of existing and new tools. However, please 
note  that  the  toolbox  enumeration  is  not  exhaustive  as  the  intention  is  to  be  flexible  to 
answer to the dynamic requirements of the future. 

Tool 

Description 

Table 8 - Toolbox 

Workshops(including 
seminars) 

One-off  events  of  one  day  duration  or  more,  bringing 
the 
administrations  of  all  participating  countries  together  to  discuss  or 
examine a specific topic. 

Joint operations 

Project groups 

Working visits 

Trainings  

Studies 

This tool would enable customs administrations to address cross-border 
issues  through  joint  operations  (e.g.  joint  patrols  to  control  the  drug 
trafficking routes). 

“Generally  composed  of  a  limited  number  of  countries,  operational 
during a limited period of time to pursue a predefined objective with a 
precisely described outcome” 258. 

“Organised  by  the  participating  countries  or  another  country  to enable 
officials to acquire or increase their expertise or knowledge  in customs 
matters”259. 

Actions  undertaken  to  develop  human  competencies  (instructor  led 
courses,  e-Learnings,  a  possible  Customs  Academy  or  customs 
competency centre, etc.). 

In the interest of the programme’s objectives, the European Commission 
manages  different  analyses  and  reports  on  different  subjects  through 
studies. 

External providers 

In  order  to  carry  out  certain  analyses  and  implementation  projects  on 
different  subjects,  the  European  Commission  can  require  support  from 
external providers (e.g. private contractors). 

258 Customs 2020 Progress Report 2016. 

259 Ibid. 

176 

 
 
 
                                                      
Tool 

Description 

These  projects  would  cover  initiatives  which  support  other  EU  policy 
initiatives, e.g. develop a leaflet on the UCC. These could be of different 
types  such  as  national communication  campaigns  for  the  promotion  of 
customs  administrations’ 
recruitment  and 
compliance, or to establish a platform accessible to stakeholders where 
their  experience  and  discuss  with  customs 
share 
they  can 
administrations and DG TAXUD.  

improve 

image, 

to 

An adaptive body made up out of different actors and experts (national, 
EU  and  international)  that  gathers  to  provide  ideas  and  guidance  on 
specific topics, as well as work on prospective developments.  

The vision group can use other tools to achieve their objectives. 

This  tool  includes  all  existing  and  future  technology  related  systems 
(business  agnostic  or  not).  All  existing  EIS  are  part  of  this  tool,  but 
innovative systems and technologies at EU and national level could also 
initiative,  the 
be 
evolutions  in  Blockchain  technology,  robotic  process  automation,  IoT, 
etc). 

into  (e.g.  the  CNECT’s  European  Cloud 

looked 

N.B.:  This  tool  should  not  be  mistaken  with  an  objective  in  itself.  For 
example,  developing,  deploying,  operating  and  maintaining  a  specific 
system  are  objectives,  and  they  are  attained  through  other  tools  from 
the toolbox. 

This  tool  refers  to  the  approach  that  exists  in  the  context  of  software 
development, through which a safe environment is provided to test new 
impacts  on  the  existing/”live” 
ideas  without 
environment.  This  same  approach  could  be  simulated  for  other,  not 
necessarily IT, contexts to develop pilots and experimentation projects. 

it  having  negative 

“Structured  forms  of  cooperation,  with  a  non-permanent  character, 
pooling  expertise  to  perform  tasks  in  specific  domains,  in  particular  in 
the  European  Information Systems,  possibly  with  the  support  of online 
collaboration  services,  administrative  assistance  and  infrastructure  and 
equipment facilities” 260. 

Communication 
projects 

Vision group 

Technology 

Sandbox 

Expert teams 

Source: Deloitte 

Last  but  not  least,  as  emerged  from  the  discussions  with  stakeholders,  it  could  also  be 
envisaged  to  adopt  further  a  purpose-based  approach  for  the  next  Customs  programme. 
This  concept  would  ease  the  work  of  participating  countries  wanting  to  resort  to  further 
“enhanced  cooperation”  under  the  programme  to  reach  a  specific  goal.  This  approach 
would enable those countries with common interests to work and move forward together in 
a  more  autonomous  and  swifter  manner  to  achieve  more  effective  results.  Instead  of 

260 Customs 2020 Progress Report 2016. 

177 

 
 
 
                                                      
resorting to a single tool on a one-off event basis, the purpose-based approach would set an 
umbrella for different activities with the same overall objective: the purpose-based project. 
This  approach  continues  on  the  experience  gained  through  the  expert  teams  under  the 
current Customs 2020 programme, although it is not limited in time. 

This  purpose-based  project  would  only  need  a  single  approval  for  any  activity  under  the 
project  to  take  place,  the  approval  of  the  purpose  (topic/overall  objective).  The  purpose-
based project would then be allocated a defined financial envelope for a specific period of 
time261. The participating country making the request (on behalf of a group) would become 
responsible for managing the financial envelope and dedicating appropriate amounts for the 
different  activities  to  be  developed  under  it262.  This  participating  country  could  agree  to 
manage  the  purpose-based  project  in  collaboration  with  other  countries  from  the 
geographical  focus,  but  it  would  ultimately  be  the  leader  in  terms  of  reporting.  In  the 
duration of this purpose-based project, other participating countries who were not initially 
part of the geographical focus would still be able to participate to individual activities inside 
the  project  on  a  voluntary  basis.  Furthermore,  at  least  two  conditions  would  need  to  be 
fulfilled  for  setting  up  such  purpose-based  projects:  that  the  purpose  has  an  EU  added 
value, and that the final outcome is shared with the rest of participating countries to ensure 
common development.  

Secondly, the scope of collaboration determines the degree at which participating countries 
collaborate  for  a  certain  activity,  including  the  length,  and  the  number  and  types  of  tools 
used. In order to set a certain level of objectification of all programme activities, the scope 
of collaboration will be linked to at least one programme objective (operational, specific and 
general objectives – see objective tree in section 4.1). All tools can be classified in at least 
one of the following scopes of collaboration: 

  Soft  collaboration:  activities  that  resort  to  a  tool  for  a  one-off  event  or  during  a 
limited  period  of  time,  to  achieve  a  goal  through  conceptual  discussion  and 
exchange.  The  activities  would  naturally  be  linked  to  operational  objectives  of  the 
programme. 

  Operational cooperation: which refers to activities that resort to a tool for a one-off 
event  or  during  a  limited  period  of  time,  linked  to  hands  on  collaboration.  The 
activities  would  naturally  be  linked  to  operational  and  specific  objectives  of  the 
programme, as the latter refers to the carrying out of the  customs administrations’ 
missions. 

261 The length would need to be determined, but by principle longer than an expert team and potentially with 
a maximum duration corresponding to that of the programme. 

262 For  instance,  a  Member  State  could  request  the  creation of  a  purpose  based  project  on  the  fight  against 
counterfeit goods and, once approved, could resort to several activities in the period of two years to reach this 
purpose. Such as a workshop to share experiences, a project group to devise an IT system to support solving 
part  of  the  problem,  deployment,  operation  and  maintenance  of  the  IT  system,  the  development  of  an  e-
Learning  on  the  main  causes  and  solutions  to  such  a  problem,  and  a  number  of  joint  operations  to  work 
together to practically address potential risks identified). 

178 

 
 
 
                                                      
  Enhanced  operational  cooperation:  builds  on  all  of  the  above  and  goes  a  step 
further allowing for augmented structured collaboration through the use of several 
tools,  and  limited  by  the  achievement  of  a  goal  rather  than  a  period  of  time.  The 
activities under this scope would target longer term and more strategic objectives. 

The  table  below  provides  an  overview  of  the  classification  of  the  tools  per  type  of 
collaboration scope, as well as an indication of the programme objectives that they can help 
achieve.  

179 

 
 
 
 
 
Scope  of  the 
collaboration 

Soft 
collaboration 

Operational 
cooperation 

Table 9 – Tools and objectives 

Tools 

Programme objectives 

Operational 
objectives 

Specific 
objectives 

General 
objectives 

(including 

  Workshops 
seminars) 
  Project groups 
  Working visits 
  Trainings 
  Studies  
  External providers  
  Communication projects 
  Technology  (soft  –  business 

agnostic) 

  Joint operations 
  Technology 
specific, 
network) 
  Sandbox 

(business 
IT  systems  and 

(+  Relevant  soft  collaboration 
tools as support) 

Enhanced 
operational 
cooperation 

All tools to be used in: 

  Expert teams 
  Purpose-based projects 
  Vision group 

Source: Deloitte 

When  reading  the  above  table,  it  is  important  to  note  that  some  of  the  tools  are  entirely 
transversal  (i.e.  can  be  used  in  all  scopes)  and  all  tools  can  be  part  of  the  (enhanced) 
operational  cooperation  if  deem  relevant.  Moreover,  all  tools  and  scopes  of  collaboration 
allow  the  achievement  of  the  different  levels  of  objectives,  although  to  different  extents. 
The darker green distinguishes the type of objective that can be attained to a greater extent 
through  the  specific  scope  of  collaboration.  Nevertheless,  ultimately,  the  achievement  or 
not of the different levels of objectives is dependent on different factors, especially the goal 
that is set for the activity. This last aspect links to the third component of the definition of 
an activity: its topic or goal. Each activity undertaken by the participating countries will need 
to have an aim that fits with the objectives of the programme.  

Participants in the activities 

The participation of different stakeholders to the activities is another main building block for 
the  future  of  the  Customs  programme,  and  it  was  discussed  very  frequently  during  the 
interviews  and  in  the  context  of  the  Customs  Project  Group  meeting.  Currently,  the 
programme is open to stakeholders coming, not only from customs administrations, but also 

180 

 
 
 
 
 
 
 
 
 
 
 
 
from other administrations (EU and worldwide) and/or organisations and also from customs 
administrations of third countries, based on individual expertise and upon invitation.  

Nonetheless,  it  emerged  from  the  data  collection  that  while  external  stakeholders  are  at 
times  involved  in  the  programme’s  activities  (for  instance,  as  speakers  to  workshops  and 
seminars), this involvement is not pursued in a systematic manner but rather on an ad-hoc 
basis. Different reasons have been pointed out for this, including: the fact that the different 
rules are applicable to these external experts, especially with respect to reimbursement and 
financial compensations. Moreover, due to the sensitivity of certain topics, external experts 
cannot  be  involved  obviously  in  all  activities.  According  to  a  number  of  stakeholders,  this 
makes the involvement of certain categories of experts difficult and burdensome.  

Based on these premises, the participation of non-customs administrations stakeholders in 
the  next  programme  could  be  maintained  to  the  current  level  and  subject  to  the  current 
rules;  it  could  be  limited  or  it  could  be  further  facilitated,  as  described  in  the  possibilities 
listed below:  

  Participation in the programme could be limited to customs administrations from EU 
countries: this entails restricting the participation to activities to customs officials (and 
their service suppliers, e.g. their own external experts) from the Member States only 
and applying more restrictive participation rules compared to today. In fact, external 
experts would not be involved even on an ad hoc basis. 

  Stakeholders  from  Member  States’  other  administrations  could  be  considered  as 
participants  in  the  programme’s  activities:  foresee  the  possibility  of  non-customs 
officials  of  Member  States  to  participate  in the activities,  in  addition  to the  customs 
officials.  This  is  still  more  restrictive  than  the  current  baseline  situation,  in  which 
multiple stakeholders can be associated based on expertise; however, it could ensure 
better  cooperation  with  non-customs  administrations,  which  has  often  been 
underlined as a need for the future. 

  The programme could be open for participation of  customs administrations only or 
customs and non-customs administrations of third countries: this means building on 
the  possibility  described  above  and  opening  up  participation  to  stakeholders  from 
non-EU  countries’  broader  public  sector  as  well  (only  customs  or  from  all 
administrations).  

  In  addition  to  the  inclusion  of  stakeholders  coming  from  the  public  sector,  the 
programme  could  decide  to  encourage  the  participation  of  other  specific  selected 
types  of  stakeholders  (both  from  within  and  outside  the  EU).  Categories  of 
stakeholders might include: 

  Academia (e.g. researchers, professors, experts, students);  
  Economic  operators  and  traders  (e.g. 

logistics  businesses,  e-Commerce 

companies);  

  Associations,  interest  groups  and  civil  society  organisations  (e.g.  chambers  of 

commerce, business associations, NGOs, etc.);  

  Other international organisations (e.g. WCO, WTO, OECD) 

181 

 
 
 
  The  programme  could  be  open  to  the  participation  of  any  relevant  party 
notwithstanding its category or nationality, based on expertise.  This is the baseline 
scenario  of  today,  as  the  programme  allows  for  the  participation  of  all  stakeholders 
mentioned  above  on  a  case-by-case basis.  However,  further  involvement  of  external 
stakeholders  could  be  even  more  acknowledged  in  the  next  programme’s  objectives 
and could be facilitated through the establishment of similar rules for participation of 
Member States customs and all other stakeholders in the activities.  

Overall,  interviewees  agree  on  the  need  to  maintain  the  current  level  of  stakeholder 
involvement. That is to say allowing the participation of any relevant party notwithstanding 
its category or nationality, but based on expertise. There is also an interest in facilitating the 
participation  of  non-customs  administrations  in  the  programme’s  activities  through,  for 
instance, better communication with other administrations  or encouraging exchanges with 
the private sector. Within this building block, this is therefore the preferred approach.  

It is important to highlight here that there is a link between the range of stakeholders that 
can  participate  to,  the  activities  and  the  types  of  activities  of  the  future  programme.  For 
instance, if there is an increased focus on innovation in the coming programme, it is likely 
that more involvement from academia and business will be required.  

4.2.2 Secondary building blocks 

The secondary building blocks concern other important constitutive elements for the future 
programme. Nonetheless, more than driving they are driven and determined to some extent 
by the primary building blocks explained above. In the following sections, we will illustrate 
the  secondary  building blocks  and how they  relate  to the  other  components of  the  future 
programme.  

Direct beneficiaries (in terms of output) 

This  building  block  refers  to  whose  objectives  are  directly  met  by  the  activities  of  the 
programme.  It  should  be  distinguished  from  the  previous  one  on  the  participation  of 
stakeholders  to  activities.  Even  if  one  stakeholder  participates  to  an  activity,  it  does  not 
mean  it  will  directly  benefit  from  its  output;  and,  vice-versa,  a  stakeholder  that  directly 
benefits from an output of the programme has not necessarily participated in it.  

Although the programme is currently targeted at customs administrations and the majority 
of outputs benefit directly only them, in some cases, other stakeholders can directly enjoy 
the output too. For example, some of the Customs IT systems are accessible to the public 
and enable economic operators to digitalise their customs transactions and exchange data 
with  customs  administrations.  Likewise,  some  e-Learnings  are  also  accessible  and  valuable 
to economic operators or academia, while they have not participated in the previous stages 
linked to the programme. In this vein, the current baseline is broader and includes customs 
administrations, but, occasionally, also other stakeholders. 

182 

 
 
 
From this perspective, the potential direct beneficiaries of the programme can be: 

  Customs administrations:  this  option  represents  the  minimum  direct  beneficiary 
target the programme could achieve, bearing in mind the  customs administrations’ 
fundamental role in this programme, as it is aimed primarily at them; 

  Other public administrations :  this  could  be  the  case  if  the  vision  and  objectives  of 
the programme were to align (intentionally or not), to some extent, to those of these 
other administrations;  

  EU  based  traders  and  AEOs:  same  case  as for  other public  administrations  (e.g.  by 

having access to necessary information) ; 

  Research  centres  and  Academia:  same  case  and  example  as  for  the  previous 

stakeholders;  

  Non-EU based traders and economic operators; and 
  International organisations.  

Governance 

The building block related to governance concerns the question of who should decide over 
the programme and how responsibilities should be shared amongst stakeholders. Typically, 
the  governance  of  programmes  at  EU  level  corresponds  to  a  centralised,  hybrid  or 
decentralised model with some nuances in between these categories. Therefore, there are 
several  governance  approaches  which  could  be  applicable  to  the  future  Customs 
programme: 

  Fully  centralised  approach  around  DG  TAXUD:  this  is  the  current  baseline  as  the 
decision making power over the programme is now held by DG TAXUD alone. In fact, 
DG  TAXUD  decides  upon  the  Annual  Work  Programmes263 and  the  eligibility  of  the 
proposals submitted by the participating countries. As DG TAXUD is not bound to the 
involvement  of  any  other  stakeholders  in  the  decision  making  process,  it  currently 
retains full responsibility over the programme while the role of  the Member States 
vis-a-vis the annual working programmes (or any other planning tool that might exist 
in the future) remains more limited.  

  Centralised  approach  with  the  involvement  of  other  DGs:  it  could  be  decided  to 
continue  with  a  centralised  approach  while  associating  other  DGs  to  the  decision 
making  processes  or  involving  an  executive  agency  in  the  implementation  of  the 
programme. In the first case, this could entail involving other DGs and/or European 
agencies (managing and financing activities which could present some synergies for 
customs  e.g.  DG  HOME,  OLAF,  SRSS,  DG  BUDG)  in  the  establishment  of  the  AWP 
and/or  in  the  decisions  concerning  the  proposals  coming  from  the  participating 
countries. In another approach, handing over the operational side of the programme 
to  an  executive  agency  would  mean,  for  DG  TAXUD,  retaining  the  responsibility  of 
the  overall  programme  and  overall  direction  while  delegating,  for  instance,  the 

263 DG TAXUD prepares the AWP, but the European Commission is who adopts it. 

183 

 
 
 
                                                      
selection  and  follow  up  of  the  specific  actions.  This  is  typically  the  case  of 
programmes  operationally  managed  by  executive  agencies  such  as  the  Executive 
Agency for Small and Medium Enterprises (EASME) or the European Research Agency 
(ERA).  This  approach  would  therefore  still  remain  centralised  at  European 
Commission  level,  but  would  be  more  participative  in  terms  of  involvement  of 
different European Commission stakeholders while the participating countries would 
still have a limited role. 

  EU  hybrid  approach:  the  handover  of  the  programme  to  an  EU  (regulatory)  entity 
falls within the category of the hybrid approach to governance. In fact, participating 
countries and the European Commission would sit together in the entity’s board and 
share  the  responsibility  of  the  overall  decision  making  of  the  programme.  This 
approach would therefore allow for more participation of the participating countries 
while still ensuring the involvement of DG TAXUD and the European Commission in 
general.  Alternatively,  an  EU  Customs  Administration  could  also  grant  a  similar  EU 
hybrid  governance,  but  with  a  different  structure  as  it  will  be  composed  of  all  the 
national customs administration of the Member States. 

  Hybrid  approach  with  involvement  of  third  parties:  it  could  also  be  envisaged  to 
include third countries or other stakeholders (e.g. business associations, chambers of 
commerce) in an EU agency’s board. This possibility has already been tested by some 
regulatory  agencies  (e.g.  the  European  Union  Agency  for  Network  and  Information 
Security – ENISA) and, if the geographical focus of the programme is larger than the 
EU only, it would allow to associate all relevant stakeholders to the decisions.  

  Decentralised  approach  (international  agency):  the  governance  of  the  programme 
could  also  be attributed  to  an  (external)  international  agency or body in  which  the 
European  Commission  and  the  participating  countries  could  be  members.  This 
approach  would  be  very  decentralised  from  the  European  Union’s  perspective,  as 
others  (including  participating  countries  who  decide  to  become  members)  would 
have a say on decisions and the European Commission’s influence over the decision 
making would diminish, although a certain level of control on the funding would still 
be possible, considering that the  European Commission would be a member of the 
agency.  

  Decentralised  approach:  finally,  the  European  Commission  could  decide  to 
implement  a  fully  decentralised  approach  for  the  next  Customs  programme, 
attributing  decision  making  responsibilities  to  the  participating  countries.  Following 
the  examples  of  the  Structural  Funds  or  Common  Agricultural  Policy,  the 
participating  countries  could  be  granted  a  certain  amount  of  funding  under  the 
programme  and  full  decision  making  power  on  how  to  use  this  funding,  although 
within  the  limits  set  by  the  programme  regulation.  In  this  case,  the  European 
Commission would retain an overall budgetary control over the programme but the 
responsibility for spending the financial envelop, deciding the priorities and selecting 
the specific actions would be in the hands of the participating countries.   

184 

 
 
 
Discussions  with  the  stakeholders  showed  a  preference  for  the  centralised  or  EU  hybrid 
approach,  although  this  subject  has  not  been  commented  very  frequently  during  the 
strategic  interviews.  Once  more,  the  governance  approach  should  be  coherent  with  the 
overall vision of the programme and its geographical focus (e.g. it would not be coherent to 
have  a  very  centralised  governance  approach  in  case  the  vision  of  the  programme  is  to 
support very specific participating countries’ needs). Moreover, different governances could 
apply to different type of activities. 

Budgetary sources 

The  seventh building  block  relates  to  the  budgetary  sources  of the  programme.  Currently, 
the  Customs  programme  originates  from  the  EU  budget  and  foresees  contributions  only 
from  third  countries  wanting  to  participate  in  the  programme’s  activities.  This  situation 
could change in the future as several other alternatives exist: 

  No  additional  contribution  from  participating  countries  nor  other  parties  (EU 
budget only): the first possibility would consist in relying only on the EU funding for 
all the activities of the programme. As mentioned above, the programme currently 
receives contribution from third countries, which means that this possibility is more 
restrictive  than  what  happens  under  Customs  2020.  If  contributions  are  not 
accepted, but there is still willingness to open the programme to other stakeholders, 
the EU budget will have to pay for their participation.  

  Additional  contributions  from  participating  countries:  a  second  possibility  would 
entail allowing  participating countries to further contribute to the programme (e.g. 
in case of specific actions which interest them, such as innovation pilots). Foreseeing 
the possibility for participating countries to contribute to certain activities (that are 
highly interesting for them) can help engage them even further and spare funding for 
other  types  of  actions.  This  additional  contribution  could  come  from  a  number  of 
participating  countries  that  decides  to  work  together  on  something  specifically 
beneficial for them; or from all participating countries, to further invest on a costly 
activity to reach a greater result (e.g. an IT union component). 

  Contributions from third countries: as is currently the case under the Customs 2020 
programme,  it  could  be  envisaged  to  ask  for  contributions  to  those  third  countries 
wishing to take part in the programme’s activities. The contributions could be a pre-
condition for the participation in the programme overall or they could be related to 
the  involvement  in  specific  activities  (e.g.  co-funding  of  a  particular  training  or 
workshop).  

  Contributions from economic operators: if economic operators are more involved in 
the programme (depending on their participation to activities) it could be envisaged 
to accept contributions from them, either as a condition for general participation or 
in  relation  to  co-funding  of  specific  activities  (e.g.  co-funding  of  a  pilot  project  or 
participation in specific trainings).  

185 

 
 
 
  Contributions  from  any  interested  party:  finally,  it  could  be  established  that  the 
programme  is  generally  open  to  contributions  from  interested  parties  of  any  kind, 
based on specific rules and reasoning.  

In general, stakeholders argued that third parties wanting to participate in the programme 
should  also  contribute  to  it,  and  especially  in  case  of  third  countries.  Therefore,  the  rule 
should  be  that  participation  in  the  programme  is  conditional  to  funding  it,  either  through 
membership fees or through ad-hoc contributions.  

It  is  important  to  recall  here  that  several  EU  programmes  receive  contributions  for 
participating third countries (this is the case of Horizon 2020 and Connecting Europe Facility, 
for instance). However, contributions from economic operators are more unusual (although 
they  occur  in  the  case  of  the  Joint  Research  Centre  and  the  Regulatory  Agencies,  but  in 
relation  to  specific  services  provided264).  The  budget  possibilities  cannot  be  examined 
without looking at the governance and direct beneficiaries building blocks.  

Funding models 

Another building block, directly dependent on the above general building block of budgetary 
sources, is that on funding models.  

Many  funding  models  exist  worldwide,  however,  not  all  are  compatible  with  the  aim  and 
circumstances  of  the  Customs  programme.  At  EU  level,  three  specific  funding  models  are 
traditionally  used.  However,  with  the  changing  context  the  EU  is  living,  the  European 
Commission is reflecting on new ways to leverage the EU budget through different funding 
models265.  

On this basis, the possible funding models for the future Customs programme could be: 

  Traditional  funding  models:  Grants,  public  procurement,  and  reimbursement  are 
three  of  the  European  Commission  traditional  financing  instruments,  which  are 
currently also used in the context of the Customs 2020 programme. 

  Grants are a sum of money that the European Commission agrees to give to a 
specific recipient with a concrete purpose. Grants are currently mainly used to 
finance joint action. 

  Public  Procurement  refers  to  the  purchases  made  by  the  European 
Commission of specific goods and services. In Customs, public procurement is 
used to finance some joint actions, but also IT capacity building and HCB. 

  Reimbursement: the method of choice to finance the participation of external 
in 

incurred  by  experts  to  participate 

experts  (reimbursement  of  costs 
programme activities). 

264 See the study on “Partially self-financed EU Agencies and the principle of fee setting”, European Parliament 
Study, Policy department D, Budgetary affairs, 2014.  

265

 European 

EU, 
Future 
http://ec.europa.eu/budget/mff/hlgor/library/reports-communication/hlgor-report_20170104.pdf 

Commission, 

financing 

the 

of 

2016, 

186 

 
 
 
                                                      
  The new EU financial instruments highlighted in the Reflection paper on the future 

of EU finances that could be used in the context of the programme are: 

  Loans; 
  Guarantees; and 
  Risk sharing instruments. 

  Other funding models, such as awards or Public Private Partnerships (PPPs), could be 

used to promote the participation to the programme.  

While this increased range of options  could lead to an interesting  array of funding models 
for the programme, there are several considerations to bear in mind for the new financial 
instruments. Indeed, the European Commission’s Reflection paper explains that the success 
of these new instruments is dependent on having “a clear strategy and a set of criteria to 
determine  which  tools  are  most  appropriate  for  market  needs,  beneficiaries  and  desired 
objectives”.266 

Likewise, their use is also subject to the aim of the funding. When the financing is needed 
for  the  purchase  of  services  or  goods,  these  instruments  are  not  adequate  and  Public 
procurement is the only model that can be used.  

Moreover,  the  European  Commission’s  Reflection  paper  clarifies  that  these  new  types  of 
instruments  “are  only  appropriate  for  revenue-generating  projects”  and  that,  thus,  grants 
will keep being necessary for those that do not generate revenue. This aspect makes these 
new types of financing difficult to apply to the Customs programme: while the outcome of 
some  of  the  activities  is  expected  to  be  an  increase  in  revenue  generation,  the  revenue 
arising from them is difficult to identify and measure.  

As for loans, this funding model does not have a supporting legal framework in the Treaties 
which undermines its feasibility and, therefore, its significance for the next programme. 

266 European  Commission,  Reflection  paper  on  the  future  of  EU  finances,  COM(2017)  358,  June  2017, 
https://ec.europa.eu/European Commission/sites/beta-political/files/reflection-paper-eu-finances_en.pdf 

187 

 
 
 
 
                                                      
5  Policy options 

This chapter presents the policy options identified for the new generation of the Customs 
programme, based on the building blocks presented above. 

5.1 Introduction 

From  the  list  of  building  blocks  and  their  possibilities  described  in  the  chapter  above,  the 
team has derived a number of policy options packaging the different constitutive elements 
in  different  ways.  The  construction  of  the policy  options  has  been based  primarily  on two 
aspects: 

  Within  each  of  the  building  blocks,  the  team  has  considered  which  are  the 
possibilities preferred by the stakeholders and which ones correspond better to their 
needs,  as  emerged  from  the  preliminary  data  collection  (interviews  and  Customs 
Project  Group).  The  establishment  of  the  policy  options  on  a  need  basis  follows  a 
bottom-up  approach  and  ensures  that  any  future  programme  for  customs  is 
anchored  in  the  stakeholders’  priorities  and  needs.  This  exercise  constitutes  a 
relevance analysis in some way, as policy options which are not relevant for the main 
stakeholders have not been considered267. 

  The team has assessed the logical connection between the building blocks in order 
to ensure that the policy options drafted are  internally consistent as some building 
blocks  are  strongly  interlinked.  In  that  regard,  the  team  has  first  identified  the 
principles guiding each policy option, including the vision, because it  will determine 
to  a  considerable  extent  all  building  blocks.  For  example,  if  the  future  Customs 
programme  is  called  to  specifically  support  EU  customs  administrations,  it  is  likely 
that  the  geographical  spotlight  remains  on  the  EU  countries.  In  the  same  way,  the 
activities  need  to  be  tailored  to  provide  the  necessary  support  to  the  participating 
countries  with  a  view  to  accomplish  the  vision  of  the  programme,  and  customs 
administrations  should  be  the  natural  main  participants.  The  secondary  building 
blocks  are  influenced  by  the  choice  of  primary  building  blocks,  as  explained  in 
section 4.2. For example, the contribution from third countries will not be required if 
the geographical focus is limited to the EU Member States only. 

The analysis of these logical connections has enabled the study team to identify the guiding 
principles and to build coherent policy options through the choice of specific building block 

267 It  is  worth  noting  that,  although  policy  option  1  is  not  necessarily  attractive  to  many  stakeholders,  the 
European  Commission  (also  a  stakeholder)  is  required  to  contemplate  this  option  for  all  programme  impact 
assessments. 

188 

 
 
 
                                                      
elements.  Each  policy  option  presents  an  alternative  for  the  future  of  the  Customs 
programme  and  is  introduced  by  framing  the  principles  governing  them  and  then 
emphasising in a green call out box the highlights of each. 

Finally,  each  policy  option  under  this  chapter  includes  the  budgetary  implications  linked 
thereto under a dedicated sub-section on budgetary needs. It is important to note that the 
Baseline  and  policy  option  1  have  prescriptive  approach  to  the  budget,  as  they  are 
engineered  based  on  predefined  budgetary  constraints.  Consequently,  the  section  on 
budgetary  needs  concentrates  on  which  of  the  activities  for  the  programme  can  be 
supported by  the  budget  available,  on the basis  of  existing priorities.  In  the  case  of  policy 
option  2,  policy  option  3  and  policy  option  4,  these  options  are  not  limited  by  budget 
constraint and can follow a bottom-up approach in their architecture and the estimation of 
the budget. The comparison of budgetary needs for the different policy options will be done 
both in current and in constant prices. As a basis, all options will be compared to the budget 
for  the  current  programme  as  well.  The  comparison  of  budgetary  needs  for  the  different 
policy options will be done both in current and in constant prices. As a basis, all options will 
be  compared to the budget for the  current programme  as  well.    The budgetary  needs  for 
the  policy  options  are  described  using  the  categorisation  of  the  programme’s  activities 
already in use under the Customs 2020 programme, to make comparison easier. 

On  this  basis,  and  in  order  to  facilitate  the  understanding  of  the  differences  between  the 
policy options retained, please find below a figure providing a general overview on the key 
characteristics  of  the  policy  options.  Notably,  the  figure  provides  an  overview  of  the  key 
aspects of the policy options and their budgetary implications, including the funding needs 
and the relation between EU and national contributions. 

189 

 
 
 
 
Figure 26 - Introduction to the policy options 

Source: 

Deloitte 

on 

the 

basis 

of 

European 

Commission 

input

190 

•Maintenance of IT legacy 2020 but no new systems•Frequency of other activities noticeably reduced•As PO2+ •Further enhanced cooperation•A vision group is introduced•Programme Steering Group•As PO3+•Steering Group becomes an EU Customs Administration, integrates the vision group & has an IT department in charge of EIS and EIS related national componentsBaselinePO1 -ConstrainedPO2 -Continuity plusPO3 -Voluntary structural collaborationPO4 –IntegrationKey aspectsNational fundingEU fundingFundinggap•Maintenance of IT legacy 2017, and no new systems•Frequency of other activities noticeably reduced and potentially not possible•Continuity of IT model and softer activities•Enhanced operational cooperation•Innovation+305%-30%-15%Minimum needsfor post-C2020CurrentC2020 Budget+151%+136%•Overall EU budget: EUR EUR 444.5 million over 7 years (EUR 63.5 million per year on average)•OverallEU budget: EUR 1 313.1 million over 7 years (EUR 187.6 million per year on average)•MemberStates’ co-fundingfor PBP: about EUR 13.6 million•Overall EU budget EUR 2 119.6 million over 7 years (EUR 302.8 million per year on average)Explanationfor budgetaryneeds•Overall EU budget: EUR 444.5 million over 7 years (EUR 63.5 million per year on average)•OverallEU budget: EUR 1 231.2 million over 7 years (EUR 176.01 million per year on average)+1% of overall EU-Customs budget funded by MSs+3.5% of overall EU-Customs budget funded by the EUPurpose-based projects 
 
 
5.2 Baseline 

The baseline is characterised by two main aspects: 

  It represents the situation as it is today, taking into account the withdrawal of the 

UK from the EU; 

  There is a decrease of cooperation activities, and in particular IT capacity building. 

When conducting an Impact Assessment, and based on the Better Regulation Guidelines, it 
is necessary to develop a baseline scenario. This Baseline scenario represents the situation 
as  it  is  today  and  its  known  evolutions,  and  provides  a  starting  point  for  comparison  and 
analysis.  Indeed,  in  order  to  further  elaborate  the  different  policy  options,  assess  their 
impact, identify the preferred option(s) and support policy decisions, it is necessary to have 
a  benchmark  to  compare  against.  The  baseline  scenario  is  the  benchmark  for  the 
assessment of policy options under this study.  

Chapter 2 provides a view on the “as is” situation of the Customs programme. The baseline 
scenario  is  presented  in  the  current  section  based  on  the  building  blocks  identified  in 
chapter  4  to  allow  for  an  easy  comparison  with  the  policy  options268.  Furthermore,  the 
baseline  scenario  also  reflects  possible  changes  to  the  current  programme  linked  to  the 
“natural”  course  of  events269.  In  the  context  of  this  Impact  Assessment,  one  specific 
development  in  particular  has  been  highlighted  as  having  an  effect  on  the  baseline:  the 
withdrawal of the UK from the Union. Consequently, this baseline scenario would take into 
account  the  future  EU27  context,  where  the  overall  resources  available  for  post-2020  EU 
programmes  would  be  reduced  in  proportion  of  the  UK’s  current  contribution  to  the  EU 
budget, i.e. a reduction of 15%.   

This budgetary constraint will have consequences on the breadth of the programme and the 
frequency  at  which  activities  could  be  carried  out.  Specifically,  the  reduced  financial 
envelope would make the execution of the activities at the same degree as today not viable.  

IT capacity building would be directly impacted by this as it is currently the domain for which 
most of the activities occur and to which more financial means are dedicated. In particular, 
the focus will be on “keeping the lights on”, i.e. managing and maintaining the existing and 
ongoing  systems  necessary  for  the  proper  functioning  of  the  customs  union.  The 
development  of  IT  tools  supporting  new  policy  initiatives  under  legislative  proposals  (e.g. 
ICS2) would be halted or would suffer unforeseeable delays. 

This frame would, thus, be more restrictive and would possibly entail other changes, such as 
only being able to follow a reactive approach, rather than proactive and forward looking. 

268 This is important as well, as the baseline is also one of the potential options that need to be assessed (the 
option of “changing nothing”) and, as such, should be formatted in the same way as the other policy options. 

269 Better Regulation Guidelines, p. 21. 

191 

 
 
                                                      
Specifically, the baseline scenario’s implications in terms of the building blocks are detailed 
figure:
in 

following 

the 

192 

 
 
Figure 27 – Baseline 

Source: Deloitte 

193 

 
 
 
5.2.1 Vision 

Currently,  the  general  aim  of  the  Customs  2020  programme  is  to  support  the  functioning 
and  modernisation  of  the  customs  union  in  order  to  strengthen  the  Internal  Market  by 
means  of  cooperation  between  the  participating  countries.  The  focus  is  therefore  on  two 
main points: 

  Functioning and modernisation of the customs union; 
  Cooperation between the participating countries.  

5.2.2 Geographical focus 

The baseline scenario focuses on the EU Member States plus some selected third countries. 
Currently  all  activities  undertaken  by  the  programme  are  directly  targeting  EU  Member 
States  and  aim  at  satisfying  their  needs  and  interests,  in  coherence  with  the  vision  and 
objectives of the programme.  

In addition, a second group of selected third countries can request involvement subject to 
the provisions in the Customs 2020 Regulation. Those additional selected third countries are 
the following: 

  Acceding countries; 
  Candidate and potential candidate countries; and 
  ENP countries if certain condition are fulfilled.270 

The  third  countries  currently  part  of  the  geographical  focus  of  the  Customs  2020 
programme  are:  Albania,  Bosnia  and  Herzegovina,  the  former  Yugoslav  Republic  of 
Macedonia, Montenegro, Serbia, and Turkey, that joined the Customs 2020 in 2014, except 
for Bosnia Herzegovina that joined the programme one year later.  

5.2.3 Activities 

Due to the importance of IT and for the sake of clarity, the section on activities is divided in 
two  sub-sections.  This  will  give  a  clearer  understanding  of  how  the  future  for  the  activity 
with the most budget dedicated up to now (IT) could look like in the future.  

General activities  

Currently  three  types  of  activities  are  funded  under  the  programme:  joint  actions,  IT 
capacity building, and HCB. Today, these three types of activities are divided into sub-types 
that are presented in section 2.3. For the policy option assessment, the approach has been 
taken to define the activities as building blocks. 

270 Partner countries of the ENP could take part to the programme provided that they have reached a sufficient 
level of approximation of the relevant legislation and administrative methods to those of the Union (Art. 2 (b) 
of the Customs 2020 Regulation). 

194 

 
 
                                                      
In view of this new presentation and definition, the activities of the baseline would include: 

 

In terms of scope of collaboration of the activity: 

  Soft collaboration: activities that resort to a tool for a one-off event or during a 
limited  period  of  time,  to  achieve  a  goal  through  conceptual  discussion  and 
exchange.  

  Operational  cooperation:  which  refers  to  activities  that  resort  to  a  tool  for  a 
one-off  event  or  during  a  limited  period  of  time,  linked  to  hands  on 
collaboration.  

  Enhanced operational cooperation: builds on all of the above and goes a step 
further  allowing  for  augmented  structured  collaboration  through  the  use  of 
several tools, and limited by the achievement of a goal rather than a period of 
time.  

 

In terms of the toolbox271: 

  Workshops (including seminars); 
  Project groups;  
  Working visits;  
  Trainings; 
  Studies; 
  External providers; 
  Communication projects; 
  Technologies; and 
  Expert teams. 

The table below provides an overview of the scopes and the activities: 

Table 10 – Scope of collaboration and tools 

Scope of the collaboration 

Tools 

Soft collaboration 

Operational cooperation 

  Workshops (including seminars) 
  Project groups 
  Working visits 
  Trainings 
  Studies  
  External providers  
  Communication projects 
  Technology (soft – business agnostic such as the Cloud) 

  Joint operations 
  Technology (business specific IT systems and network) 

271 For conciseness purposes, the tools have not been defined in this section. Their definition is available under 
section 4.2.1.  

195 

 
 
                                                      
Scope of the collaboration 

Tools 

Enhanced 
cooperation 

Source: Deloitte 

operational 

All tools to be used in: 

  Expert teams 

As the baseline needs to take into consideration the UK’s withdrawal from the Union and, 
thus,  an  anticipated  15%  cut  of  the  budget,  the  activities  undertaken  would,  in  practice, 
have a different breadth compared to the Customs 2020 programme. 

Indeed, the reduced financial envelope would have an impact on the programme in terms of 
the  capability  to  fulfil  the  same  amount  of  activities  during  the  entire  length  of  the 
programing  period  (2021-2027).  If  the  pace  at  which  activities  under  the  programme  are 
carried out remains as that of the Customs 2020 programme, the anticipated funding would 
be insufficient to finance all necessary activities. A constant prioritisation of activities would 
need to be implemented, with the risk of addressing the urgent before the important and a 
potential  of  neglecting  the  latter.  This  fact  would  already  be  true  at  nominal  prices,  so 
inflation  and  its  subsequent  effect  on  real  prices  would  make  the  negative  consequences 
even  more  important.  For  example,  expert  teams  (unique  tool  for  enhanced  operational 
cooperation scope at this stage) already have funding constraints today and are limited in 
number due to this. With the additional cuts, this activity, though important, would likely be 
impacted in the baseline due to more urgent short-term needs. 

Nevertheless,  resorting  to  some  of  the  tools,  such  as  technology,  available  to  pursue  new 
ways  of  working  (e.g.  video-conferencing)  might  contribute  to  enable  a  more  efficiency  in 
the way customs administrations collaborate through the programme. However, the reach 
of  this  efficiency  gain  and  the  level  to  which  it  would  compensate  for  the  anticipated 
financial impact is still uncertain. 

IT related activities 

As  specified  in  the  state  of  play  of  the  IT  capacity  building  (see  chapter  2),  the  entire 
in  particular  comprise  the  development, 
electronic  customs  project  and  the  UCC 
deployment, operation, maintenance, support and quality assurance of numerous electronic 
customs systems. In concrete terms, the electronic customs systems supporting the UCC are 
defined in the UCC WP concerning the development and deployment of these systems. The 
UCC  WP  belongs  to  a  broader  programme  for  customs  ICT,  governed  by  the  MASP.  This 
entails that there are additional electronic customs systems – outside the UCC WP – being 
developed, deployed, operated, maintained, supported and assured with respect to quality. 
The  various  electronic  customs  systems  facilitate  the  exchange  of  and  access  to  common 
data  amongst  the  customs  administrations  of  the  EU  Member  States  and  some  third 
countries.  The  existing  Customs  2020  programme  provides  financial  support  for  these 
electronic  customs  systems.  In  particular,  the  programme  funds  the  development, 

196 

 
 
deployment,  operation,  maintenance,  support  and  quality  assurance  of  the  Union 
components of customs-related TES. 

Based on an analysis of the budgetary needs from a ‘Customs Value Stack’ perspective (cf. 
the state of play of the IT capacity building), it needs to be noted that the baseline does not 
allow  the  development,  deployment,  operation,  maintenance,  support  and  quality 
assurance  of  all  electronic  customs  systems  foreseen  in  the  ‘Customs  Value  Stack’272.  The 
baseline  –  with  a  budgetary  cut  of  15%  –  would  only  allow  the  continuation  of  the  2017 
legacy  systems,  the  UCC  systems  up  to  2020  and  the  international  projects.  Any 
developments  and  operations  regarding  the  UCC  systems  after  2020,  including  ICS2  and 
CRMS  would  need  to  be  stopped273.  Therefore,  the  focus  in  this  scenario  would  be  in 
“keeping  the  lights  on”:  the  baseline  would  not  allow  the  establishment  of  any  new 
electronic customs systems or upgrades of existing systems after 2020. 

5.2.4 Participants to the activities 

In the baseline scenario, participants would be divided in two main groups:  

  Those  parties  that  can  participate  in  all  activities  at  their  discretion:  customs 

administrations of participating countries; 

  Those  who  need  to  be  invited  by  the  European  Commission  because  their 
contribution  is  considered  essential  to  achieve the  objectives  and,  thus, participate 
only  on  an  ad-hoc  basis:  other  stakeholders, 
including  other  EU  public 
administrations, non-EU customs administrations, economic operators  and 
academia. 

The  budgetary  constraint  would  potentially  have  consequences  on  the  participation  of 
various stakeholders.  The ad hoc participation of the second group is likely to be reduced 
for  two  reasons.  Firstly,  the  snowball  effect  that  would  occur  due  to  the  reduction  of 
activities. This fact would translate into an external expert that could have been valuable for 
the  specific  activity  that  was  cut,  not  being  invited  to  participate.  Secondly,  the  lack  of 
funding availability could lead to a general choice for decreasing the involvement of external 
experts invited in order to dedicate the corresponding budget to additional activities.  

Nevertheless,  the  knowledge  of  external  experts  is  valuable,  if  not  essential,  as  it  would 
typically not be available in the primary group. In addition, the cost of their involvement is 
marginal  in  comparison  to  the  one  incurred  in  relationship  to  the  primary  group.  The 
potential  budgetary  gain  that  could  be  reached  through  the  exclusion  of  the  external 
experts  would  not  be  significant  enough  to  compensate  for  the  potential  loss  of  quality. 
Therefore, a reduction in terms of participants would not be an adequate solution by itself 

272 A more detailed explanation of the ‘Customs Value Stack’ and its components can be consulted in the state 
of play of the IT capacity building (cf. chapter 2). 

273 The programme would not be able to support the development of the remaining components of the ICS2 
after 2020. 

197 

 
 
                                                      
and would need to come along with a prioritisation of the activities (see previous subsection 
on activities).  

The decrease in budget could also affect the primary group of participants by restricting the 
number of participants per activity.  

5.2.5 Direct beneficiaries of the outputs 

In  the  baseline,  the  programme  itself  targets  customs  administrations  and  therefore,  not 
surprisingly, the majority of outputs are targeted to them.  

However,  in  some  cases,  other  stakeholders  such  as  economic  operators  or  academia  can 
make  use  of  the  generated  output  too,  and  are  hence  positively  impacted  by  it.  For 
example,  some  e-Learnings  are  also  accessible  and  valuable  to  economic  operators  or 
academia, while the latter have not participated in the activities leading to the development 
thereof.  

The budget reduction and consequent decline in the number of activities would translate in 
a decrease of outputs, and thus, the overall number of beneficiaries. 

5.2.6 Governance 

Today, the governance of the programme revolves around  the European Commission. This 
fully centralised approach implies that the decision making over the programme is held by 
the  European  Commission,  who  decides  upon  the  Work  Programmes  and  the  eligibility of 
the proposals submitted.  

Next  to  the  European  Commission’s  involvement,  participating  countries  are  in  charge  of 
the management of the activities they lead. A number of tools are under the management 
and  supervision  of  DG  TAXUD:  the  programme  operational  activities  such  as  studies, 
external providers, and communication projects. 

The figure below  in  a  schematic  way  the  governance  of the  baseline  with  the  main  actors 
and responsibilities. 

Figure 28 – Governance of the baseline 

198 

 
 
Source: Deloitte  

All  in  all,  the  governance  would  continue  to  be  the  same  as  that  of  Customs  2020  so  for 
further details please refer to section 2.2. 

5.2.7 Budgetary sources 

In the baseline, the programmes’ funds mainly originate from the EU budget274 as set in the 
MFF. Nevertheless, contributions from non-EU participating countries are also foreseen on 
an  activity  basis.  Aside  from  the  amounts  dedicated  (as  potentially  influenced  by  the 
absence  of  a  future  UK  contribution),  this  building  block  would  remain  the  same  for  the 
future. 

5.2.8 Funding models 

As  for  the  funding  models,  three  different  ways  of  distributing  the  programme’s  funds 
currently exist:  

  Grants:  the  main  funding  model  use  to  finance  most  of  the  toolbox  except  for 

studies and external providers; 

  Procurement: mainly used to fund studies and external providers; 
  Reimbursement:  the  method  of  choice  to  finance  the  participation  of  external 
experts, but also to deal with part of the costs of participating countries partaking to 
activities. 

These  models  would  continue  to  exist  in  the  future  baseline.  However  their  frequency  of 
usage and potentially their amounts could decrease due to a possible budgetary cut. 

5.2.9 Budgetary needs and allocation 

The  budget  exercise  for  this  policy  option  follows  more  of  a  prescriptive  approach,  as  the 
estimation  of  the  (negative)  impact  of  the  withdrawal  of  the  UK  from  the  EU  is  given. 
Therefore,  the  budget  exercise  in  this  case  has  to  consider  which  of  the  programme’s 
activities can be supported by the budget available, on the basis of existing priorities.  

The  figure  below  provides  an  overview  of  the  estimated  budget  for  the  future  Customs 
programme.  

274 Which  is  built  of  contributions  from  Member  States,  import  duties  on  products  from  third  countries  and 
fines imposed to businesses failing to comply with EU rules. 

199 

 
 
 
 
                                                      
Figure 29 – Estimated budget for Customs programme under the baseline option (EUR million) 

Source: Deloitte 

The  table  below  provides  an  overview  of  the  budgetary  needs  estimated  for  this  policy 
option, compared to the current Customs 2020 programme.  

Table 11 – Budgetary needs estimated for the baseline 

Overall budget (EUR million) 
Per year (average) (EUR million) 
% change w.r.t. current budget 

Source: Deloitte 

Customs 2020 

Baseline 

Current prices 

Constant prices 

522.9 
74.7 
N/A 

444.5 
63.5 
-15% 

419.2 
59.9 
-23% 

The  starting  point  for  the  baseline  is  the  average  annual  budget  of  the  Customs2020 
programme  (i.e.  EUR  74.7  million),  reduced  by  15%  in  current  prices.  The  resulting 
estimations lead to an overall budget for the programme of EUR 444.5 million over 7 years, 
i.e.  EUR  63.5  million  per  year  on  average.  Overall,  this  corresponds  to  a  23%  cumulated 
reduction with respect to the overall budget of the current Customs2020 programme (21% 
reduction in constant prices275).  

The  available  budget  allows  supporting  the  basic  functioning  of  the  Customs  union, 
including  cooperation  between  participating  countries  and  modernisation  of  the  Customs 
union,  but  does  not  provide  the  resources  for  addressing  new/emerging  challenges  or  for 
including  any  activity/topic  which  is  not  essential  for  the  basic  functioning  of  the  customs 
union. 

275 Constant prices are estimated applying 2% annual inflation rate, consistently with the guidelines received 
by the Secretariat General.  

200 

89,6%10,2%;0,1%;  Competency building050100150200250300350400450IT capacity buildingJoint actionsCompetency building 
 
 
 
                                                      
is  expected  to  represent  90%  of  the  overall  programme  budget 
IT  expenditure 
(approximately EUR 398.3 million). While this figure presents an increase with respect to the 
current  programme,  it will  allow  only  to  support  the  UCC  2020  legacy,  i.e.  the  continuous 
operation  of  all  UCC  IT  systems  to  be  operational  before  end  2020  (i.e.  mostly  all  central 
applications, from Customs Decisions to INF). However, it will not be possible to fund new IT 
projects, or to have contingency funds for IT. Furthermore, it will not be possible to proceed 
with  the  development  of  the  ICS2,  leading  to  a  write-off  of  EUR  62  million  between 
investment and operation costs sustained under the current Customs 2020 programme.  

The  remaining  budget  allows  only  for  a  minimal  set  of  joint  action  and  human  capacity 
building  activities  (about  10%  of  the  budget,  or  EUR  45.5  million,  corresponding  to 
approximately EUR 6.5 million per year).  

201 

 
 
 
 
5.3 Policy option 1 – Constrained scenario 

Policy option 1 is characterised by two main aspects: 

  Scaling down the ambition of the programme; 
  Discontinuation of IT capacity building and limited cooperation.  

Bearing  in  mind  the  need  to  make  resources  available  for  new  initiatives  in  other  policy 
areas,  this  policy  option  would  consider  a  more  significant  budget  reduction  than  the 
baseline (up to -30%). On this basis, it would need to strongly reduce the ambitions of the 
programme  and  thus  determine  the  corresponding  priorities  and  levels  of  action  for  the 
post-2020 Customs programme. This would, in turn, make the continuance of certain policy 
choices difficult if not impossible. In fact, the current acquis would have to be revised as the 
programme would not be able to fund the full implementation. 

Furthermore,  as  the  approach  would  be  to  take  the  budget  constraint  of  30%  as  main 
principle  and  differentiator276,  prioritisation  would  become  a  guiding  principle  for  the 
programme under this policy option. This would be especially so in terms of the activities as 
a 30% saving would require more than a 50% cut in the activities. The criticalness of each 
activity would need to be closely evaluated to determine if they should be funded under the 
programme  or  not.  In  this  context,  IT-related  activities  would  be  dedicated  most  of  the 
funding  in  order  to  ensure  as  far  as  possible  the  survival  of  the  2020  legacy  systems. 
Regardless,  some  of  the  existing  and  ongoing  IT  systems  would  need  to  be  discontinued 
implementation  of  EU  customs  policy 
which would make the vision of aiming at the 
challenging.  

Specifically,  the  implications  in  terms  of  the  building  blocks  are  detailed  in  the  following 
figure.  Highlighted  in  blue  are  the  main  changes  in  respect  to  the  current  situation.  The 
elements stricken-through are those that are part of the current situation, but are excluded 
in the policy option. 

276 The  Secretariat  General  has  imposed  this  option  for  the  impact  assessments  of  all  European  Commission 
programmes for the next programming period. We understand that the purpose is to trigger the emergence of 
creative efficient approaches. 

202 

 
 
                                                      
Figure 30 – Policy option 1 

Source: Deloitte 

203 

 
 
 
5.3.1 Vision 

Due to the important financial pressure, policy option 1 would have an even narrower vision 
than the baseline. The policy option would limit its ambition and would support only limited 
missions of the customs administrations.  

Due to their broadening role, customs administration do no longer have one core function: 
their  functions  have  evolved,  and  from  a  certain  point  of  view  could  be  considered  as 
equally important. As recently recalled by the European Court of Auditors, the essential role 
of customs is the protection of the financial interests277. Therefore, the significant budgetary 
pressure under this policy option will prevent the programme from supporting many of the 
customs’  administrations  other  functions.  Only  a  restricted  number  of  missions  will  be 
supported by the programme, mainly focused on the protection of financial interests.   

5.3.2 Geographical focus 

The  geographical focus of policy  option  1  would  also be  narrowed down  compared  to  the 
current programme and the baseline. Only the needs and interests of the EU Member States 
would be addressed and funded by the programme.  

Some would argue that keeping the geographical spotlight as it is today would not make a 
difference in the budget, as eligible third countries contribute based on their participation. 
However,  a  broader  geographical  focus  makes  it  more  difficult  to  efficiently  manage 
resources and reach goals. 

5.3.3 Activities 

General activities  

The  table  below  provides  an  overview  of  the  classification  of  the  tools  per  type  of 
collaboration scope under policy option 1: 

Table 12 – Overview of tools per type of collaboration scope under policy option 1 

Scope of collaboration 

Soft collaboration 

Existing toolbox278 

  Workshops (including seminars) 
  Project groups 
  Working visits 
  Trainings 
  Studies  

277 European Court of Auditors, Special Report: Import procedures shortcomings in the legal framework and an 
ineffective 
2017, 
https://www.eca.europa.eu/Lists/ECADocuments/SR17_19/SR_CUSTOMS_EN.pdf 

implementation 

financial 

interest 

impact 

EU, 

the 

the 

of 

278 For conciseness purposes, the tools have not been defined in this section. Their definition is available under 
section 4.2.1.  

204 

 
 
                                                      
Scope of collaboration 

Existing toolbox278 

  External providers  
  Communication projects 
  Technology (soft – business agnostic such as the Cloud) 

  Joint operations 
  Technology (business specific IT systems and network) 

All tools to be used in: 
  Expert teams 

Operational cooperation 

Enhanced operational 
cooperation 

Source: Deloitte 

Today the programme spends almost all the budget committed to it279. In case part of the 
money  dedicated  to  a  specific  activity  is  not  spent,  this  amount  is  redirected  to  another 
activity  that  is  in  need  of  supplementary  funding  (often  these  are  IT  related  activities).  In 
this vein, a 30% budget cut makes it impossible to maintain the number and frequency of 
activities under the programme, let alone increase it.  

On this basis, although policy option 1 would maintain the same tools and scope as in the 
baseline, the amount of activities would need to be reduced to reach a 30% saving (which 
would,  in  some  particular  cases,  mean  an  even  higher  percentage  of  decrease  of  the 
activities). Participating countries would need to prioritise in their activity choices based on 
their  criticalness,  which  could  lead  to  some  tools  being  more  frequently  used,  and  others 
less or not at all. 

As  a  general  remark,  it  should  be  observed  that  the  bulk  of  the  financial  envelope  under 
policy option 1 would need to be dedicated to IT-related activities aimed at maintaining as 
far as possible the 2020 legacy systems. 

IT related activities 

In  policy  option  1,  the  future  programme  aims  continuing  to  develop,  deploy,  operate, 
maintain, support and assure the quality of the Union components of all electronic customs 
systems  introduced  under  the  Union  law  by  the  end  of  2020280.  In  terms  of  the  ‘Customs 
Value Stack’, the systems include the 2017 legacy systems, the UCC systems up to 2020, the 
international projects, the UCC systems after 2020, as well as the UCC ICS2 and CRMS. The 
systems also include any other electronic customs systems established under the Union law 
and included in the MASP by the end of 2020.  

Concretely,  based  on  an  analysis  of  the  budgetary  needs  from  a  ‘Customs  Value  Stack’ 
perspective (cf. the state of play of the IT capacity building), it should be noted that policy 

279 See section 2.1 on the state of play. 

280 European Commission, Proposal for a Regulation of the European Parliament and of the Council amending 
Regulation  (EU)  No  952/2013  to  prolong  the  transitional  use  of  means  other  than  the  electronic  data-
processing  techniques  provided  in  the  Union  for  in  the  Union  Customs  Code,  COM(2018)  85  final, 
https://ec.europa.eu/taxation_customs/sites/taxation/files/amendment_ucc_20180302_en.pdf 

205 

 
 
                                                      
option  1  does  not  allow  the  development,  deployment,  operation,  maintenance,  support 
and quality assurance of all aforementioned electronic customs systems. In essence, policy 
option 1 – presenting a budgetary cut of 30% – would only allow the continuity of the UCC 
2017 legacy systems. Any developments and operations with respect to the UCC systems up 
to 2020, the international projects, the UCC systems after 2020, as well as ICS2 and CRMS 
would need to be stopped. 

5.3.4 Participants to the activities 

Under  policy  option  1,  the  choice  of  participants  to  the  activities  would  be  limited  to 
customs administrations only. Opening the participation to other stakeholders would entail 
higher  costs  that  would not  be  justified  based on  the  vision  of  the  policy option.  Customs 
administrations  are  the  primary  group  to  target  in  order  to  work  towards  the  proper 
functioning of the customs union.  

5.3.5 Direct beneficiaries of the outputs 

Customs administrations being the sole participants would not necessarily entail that they 
will  be  the  only  beneficiaries.  However,  because  of  the  important  funding  decrease,  the 
participants would likely concentrate the goals and outputs of their activities to assure that 
they are the primary beneficiating stakeholder. –This restrictive approach would not mean 
that  the  customs  administrations’  objectives  are  not  in  line  with  the  interest  of  other 
stakeholders,  but  only  that  the  output  does  not  directly  benefit  them  (but  indirectly  they 
may do). 

The  changed  approach  under  policy  option  1  would  not  change  the  availability  of  past 
existing  outputs  and  the  direct  beneficiaries  of  these  (some  of  which  are  other 
stakeholders). Systems or  e-Learnings would continue to be accessible but they would not 
be  updated  and  could  become  obsolete  after  some  time.  The  same  accounts  for  any  IT 
systems if they do not get upgraded / updated. 

5.3.6 Governance 

The governance of the Customs programme would continue to be centralised under policy 
option  1,  mostly  around  DG  TAXUD.  However,  as  one  of  the  characteristics  of  this  policy 
option  is  the  direct  dependency  on  synergies  with  other  EU  programmes  that  do  not  fit 
completely the needs of customs administrations, some decision making could fall also on 
another Directorate General, service or agency of the European Commission.  

The  management  of  the  programme  and  of  the  activities  (including  the  programme 
operational activities) remains the same as described in the baseline above.  

The figure below illustrates in a schematic way the governance of this policy option with the 
main actors and responsibilities. 

206 

 
 
Figure 31 – Governance of the policy option 1 

Source: Deloitte  

5.3.7 Budgetary sources 

For policy option 1, contributions from what were considered as eligible third countries in 
the  baseline  would  not  be  a  funding  source.  Taking  into  account  the  fact  that  they  would 
not be able to partake in the activities of the programme, nor benefit from them (at least 
directly),  non-EU  Member  States  cannot  be  expected  to  fund  the  programme.  The  main 
funding  source  for  policy  option  1  would  therefore  be  the  EU  budget,  although  not  only 
through  the  financial  envelope  dedicated  by  the  MFF  to  Customs.  Those  programmes  or 
actions that would be identified as having actions that would be identified as supporting the 
cooperation needs of customs administrations would also, indirectly, feed into the funding 
of the customs programme.  

5.3.8 Funding models 

For  policy  option  1,  grants  and  procurement  would  continue  to  be  the  funding  models  of 
choice, depending on the type of activity to be funded. They would, however, decrease in 
frequency  and  available  amounts  due  to  the  reduced  budget  and  the  smaller  number  of 
activities taking place.  

As  for  the  reimbursements,  those  used  to  finance  the  external  experts  would  not  be 
necessary  as  they  would  not  participate 
in  the  programme.  Reimbursements  for 
participating countries would still be relevant, although a ceiling could be set to save costs 
(making the need for additional contributions potentially higher). 

5.3.9 Budgetary needs and allocation 

The budget scenario for this policy option is even more stringent than for the baseline, i.e. a 
30% reduction with respect to the current programme.  

The  figure  below  provides  an  overview  of  the  estimated  budget  for  the  future  Customs 
programme.  

207 

 
 
Figure 32 – Estimated budget for Customs programme under policy option 1 (EUR million) 

Source: Deloitte 

The  table  below  provides  an  overview  of  the  budgetary  needs  estimated  for  this  policy 
option, compared to the current Customs 2020 programme.  

Table 13 – Budgetary needs estimated for policy option 1 

Overall budget (EUR million) 
Per year (average) (EUR million) 
% change w.r.t. current budget 

Source: Deloitte 

Customs 2020 

Policy option 1 

Current prices 

Constant prices 

522.9 
74.7 
N/A 

366 
52.3 
-30% 

345.2 
49.3 
-34% 

The  starting  point  for  the  baseline  is  the  average  annual  budget  of  the  Customs2020 
programme  (i.e.  EUR  74.7  million),  reduced  by  30%  in  current  prices.  The  resulting 
estimations lead to an overall budget for the programme of EUR 366.1 million over 7 years, 
i.e. EUR 52.3 million per year on average (34% reduction in constant prices281).  

The  available  budget  allows  supporting  the  basic  functioning  of  the  Customs  union,  but 
would reduce the frequency of many activities. 

IT  expenditure 
is  expected  to  represent  88.4%  of  the  overall  programme  budget 
(approximately EUR 323.3 million). While this figure presents an increase with respect to the 
current  programme,  it will  allow  only  to  support  the  UCC  legacy  2017, i.e.  the  continuous 
operation  of  all  UCC  IT  systems  operation  by  1  January  2017.  It  will  not  be  possible  to 
develop the remaining systems foreseen by the UCC or the ICS2, with a write-off of EUR 165 
million between investment and operation costs sustained under the current Customs 2020 

281 Constant prices are estimated applying 2% annual inflation rate, consistently with the guidelines received 
by the Secretariat General.  

208 

88,4%11,7%;050100150200250300350400IT Capacity buildingJoint actions 
 
 
 
                                                      
programme.  Furthermore,  it  will  not  be  possible  to  fund  new  IT  projects,  or  to  have 
contingency funds for IT.  

The  remaining  budget  allows  only  for  a  minimal  set  of  joint  actions  focused  on  IT  system 
developed (about 12% of the budget, or EUR 42.7 corresponding to approximately EUR 6.1 
million  per  year).  Human  capacity  building  activities,  expert  teams  or  other  support 
activities will not be possible at all.   

209 

 
 
 
 
5.4 Policy option 2 – Continuity “plus” scenario 

Policy option 2 is characterised by two main aspects: 

  Continuity of the natural evolution of the current programme; 
  Enhanced IT capacity building and cooperation. 

This policy option foresees to generally maintaining the current programme, enabling it to 
pursue  its  logical  further  development.  It  would  be  built  as  the  baseline  (cf.  “Continuity”) 
and reinforced with a number of additional elements (cf. “plus”). The latter are considered 
part of its natural evolution considering the current and known coming legal obligations of 
the EU, and would allow the programme to address more effectively the present and future 
challenges in the field of customs. 

In this vein, on top of the vision of the programme that will remain the same, one additional 
important  aspect  will  characterise  this  option:  further  enhanced  operational  cooperation. 
While  enhanced  operational  cooperation  already  exists,  the  aim  of  the  post-2020 
programme under policy option 2 would be to strengthen its main tool (expert teams) and 
extend  it  with  a  new  one:  the  purpose-based  approach.  These  would  aid  stronger  and 
deeper collaboration, facilitating the work on certain domains such as IT development and 
innovation.  

Moreover, the programme would further support strategic cooperation with relevant non-
EU countries and international organisations, which added to the enrichment of enhanced 
operational cooperation would allow it to be more proactive than reactive.  

Specifically,  the  implications  in  terms  of  the  building  blocks  would  be  the  following 
in  respect  to  the  current  situation):
(highlighted 

in  blue  are  the  main  changes 

210 

 
 
Figure 33 – Policy option 2 

Source: Deloitte 

211 

 
 
 
5.4.1 Vision 

As explained in the introduction of the policy option, both the baseline and policy option 2 
are composed mostly of the same elements. In terms of the vision, these elements are the 
following: 

  Functioning and modernisation of the customs union; 
  Cooperation between the participating countries.  

5.4.2 Geographical focus 

Policy option 2 has two groups of geographical focus:  

  Primary: the countries on which the programme sets the spotlight stay the Member 

States of the European Union, as in the baseline; 

  Secondary:  the  additional  third  countries  stay  broadly  the  same  as  in  the  baseline 
(i.e.  acceding countries, candidate countries, potential candidate countries,  and  ENP 
countries)  with  the  addition  of  EFTA  countries;  in  consideration  to  the  “plus” 
element  of  the  policy  option.  The  EFTA  countries  would  need  to  put  in  place  a 
collaboration  agreement  to  allow  them to  be  part  of the  geographical focus  of  the 
programme.  

Currently  all  activities  undertaken  by  the  programme  are  directly  targeting  the  Member 
States  and  aim  at  satisfying  their  needs  and  interests,  in  coherence  with  the  vision  and 
objectives  of  the  programme.  The  other  category  of  countries  can  request  involvement  in 
specific cases and subject to the provisions in the Customs programme Regulation. 

5.4.3 Activities  

General activities 

As policy option 2 represents the continuity of the programme with a “plus” element, the 
tools  and  scope  of  the  activities  under  the  Customs  2020  programme  would  remain 
available,  and  some  additions  that  characterise  the  natural  evolution  of  the  programme 
would  be  included.  In  particular,  the  enrichments  of  this  policy  option  would  be  linked  to 
operational cooperation and enhanced operational cooperation. 

On the  one  hand, the  scope  of operational  cooperation  would  be  augmented through the 
addition of joint operations amongst the available tools. 

On  the  other  hand,  the  enhanced  operational  cooperation  would  be  further  extended 
through  two  tools.  Firstly,  the  expert  team  tools  would  be  reinforced  by  receiving  the 
necessary financial support they need to develop and thrive, as today the lack of dedicated 
funding limits their creation and the full potential of their output. Secondly, a new form of 
enhanced  operational  cooperation  would  be  created  to  augment  the  collaboration 
opportunities  between  participating  countries  with  common  interests.  This  would  allow 

212 

 
 
countries  to  move  forward  together  towards  a  specific  goal  in  a  more  autonomous  and 
swifter manner, through the introduction of so-called purpose based projects. 

The  purpose-based  project282   would  need  a  single  approval  for  any  activity  under  the 
project  to  take  place,  the  approval  of  the  purpose  (topic/overall  objective).The  purpose-
based project would then be allocated a defined financial envelope for a specific period of 
time283. There would be no deadline (i.e. limit of time) set for this purpose-based project, as 
the  end  date  would  depend  on  the  achievement  of  the  goal.  The  participating  country 
making  the  request  (on  behalf  of  a  group)  would  become  responsible  for  managing  the 
financial  envelope  and  dedicating  appropriate  amounts  for  the  different  activities  to  be 
developed under it284. Furthermore, at least two conditions would need to be met to set up 
a purpose based project: the purpose must have an EU added value, and the final outcome 
must  be  shared  with  the  rest  of  participating  countries  to  ensure  a  minimum  level  of 
common development.  

The scope and tools that could be used to pursue activities under the policy option 2 would 
include:  

Table 14 – Scope and tools under policy option 2 

Scope of collaboration 

Existing toolbox285 

New tools 

  Workshops (including seminars); 
  Studies  
  External providers; 
  Communication projects; 
  Trainings; 
  Working visits;  
  Project groups; and 
  Technologies (soft – business agnostic) 
  Technologies 
IT 

(business  specific 

systems and network) 

  Joint operations 

  Expert teams 

  Purpose-based projects 

Soft collaboration  

Operational cooperation 

Enhanced operational 
cooperation 

Source: Deloitte 

282 The complete definition is available in section 4.2.1. 

283 The length would need to be determined, but by principle longer than an expert team and potentially with 
a maximum duration corresponding to that of the programme. 

284 For  instance,  a  Member  State  could  request  the  creation of  a  purpose  based  project  on  the  fight  against 
counterfeit goods and, once approved, could resort to several activities in the period of two years to reach this 
purpose. Such as a workshop to share experiences, a project group to devise an IT system to support solving 
part  of  the  problem,  deployment,  operation  and  maintenance  of  the  IT  system,  the  development  of  an  e-
Learning on the main causes and solutions to such a problem, and a number of joint audits to work together to 
practically audit potential risks identified). 

285 For conciseness purposes, the tools have not been defined in this section. Their definition is available under 
section 4.2.1.  

213 

 
 
 
                                                      
IT related activities 

In  policy  option  2,  the  programme  would  continue  developing,  deploying,  operating, 
maintaining, supporting and assuring the quality of the Union components of  all electronic 
customs  systems  introduced  under  the  Union  law  by  the  end  of  2020286.  In  terms  of  the 
‘Customs Value Stack’, the systems include the 2017 legacy systems, the UCC systems up to 
2020,  the  international projects,  the  UCC  systems  after  2020,  as  well  as  the  UCC  ICS2  and 
CRMS. The systems also include any other electronic customs systems established under the 
Union law and included in the MASP by the end of 2020. 

In  addition,  the  future programme  intends to  develop,  deploy, operate, maintain,  support 
and  assure  the  quality  of  the  Union  components  of  any  new  electronic  customs  systems 
launched under the Union law after 2020. Hence, policy option 2 would support the normal 
evolution  of  existing  systems,  and  their  maintenance,  as  well  as  the  creation  of  new 
systems. 

Furthermore, the future programme will use its activities to investigate further innovation in 
particular  in  the  field  of  electronic  customs  systems  (e.g.  use  of  IoT  and  Blockchain).  In 
concrete  terms,  policy  option  2  would  allow  the 
investigation  of  challenges  and 
opportunities originating from new technologies and trends in the field of IT development, 
deployment, operation, maintenance, support, as well as quality assurance. 

5.4.4 Participants to the activities 

Two groups would be participants to the Customs programme under this option:  

  Those  parties  that  can  participate  in  all  activities  at  their  discretion:  customs 

administrations of participating countries; 

  Those  who  need  to  be  invited  by  the  European  Commission  and  the  participating 
countries because their contribution is considered essential to achieve the objectives 
and, thus, participate only on an ad-hoc basis: other stakeholders, including other EU 
public administrations , non-EU customs administrations, economic operators, 
academia, and international organisations. 

5.4.5 Direct beneficiaries of the outputs 

In policy option 2 the programme would focus on customs administrations with the majority 
of  outputs  being  targeted  to  them.  However,  as  already  is  the  case  today,  other 
stakeholders such as economic operators or academia, could find themselves making use of 
certain outputs too, and are hence positively impacted by them. Examples would include IT 

286 European Commission, Proposal for a Regulation of the European Parliament and of the Council amending 
Regulation  (EU)  No  952/2013  to  prolong  the  transitional  use  of  means  other  than  the  electronic  data-
processing  techniques  provided  in  the  Union  for  in  the  Union  Customs  Code,  COM(2018)  85  final, 
https://ec.europa.eu/taxation_customs/sites/taxation/files/amendment_ucc_20180302_en.pdf 

214 

 
 
                                                      
systems  that  would  make  customs  clearance  faster  for  traders,  or  e-Learnings  that  would 
instruct economic operators or serve as learning support to academia. These stakeholders 
might  not  participate  in  the  activities  leading  to  their  development,  but  could  potentially 
benefit from them.  

Specifically,  all  IT  tools  necessary  for  new  policy  initiatives  from  European  Commission 
legislative proposals launched or under preparation during Customs 2020 would be able to 
be developed under the post-2020 programme. This would mean that there would be more 
outputs to benefit customs administrations and other stakeholders. This would be the case 
of ICS2 for example. 

5.4.6 Governance 

Like  today, the  governance  of  the  programme  revolves  around  the  European  Commission. 
This fully centralised approach would  imply that the decision making over the programme 
and  its  operation  is  held  by  the  European  Commission.  In  fact,  the  European  Commission 
would  continue  to  decide  upon  the  Work  Programmes  and  the  eligibility  of  the  proposals 
submitted  

The  management  of  the  programme  and  of  the  activities  (including  the  programme 
operational activities) remains the same as described in the baseline above.  

The figure below illustrates in a schematic way the governance of this policy option with the 
main actors and responsibilities. 

Figure 34 – Governance of the policy option 2 

Source: Deloitte 

5.4.7 Budgetary sources 

In  terms  of  sources,  the  programmes’  funds  would  still  mainly  originate  from  the  EU 
budget 287 as  set  in  the  Multiannual  Financial  Framework.  Again,  as  in  the  baseline, 

287 Which is built of contributions from member countries, import duties on products from outside the EU and 
fines imposed to businesses failing to comply with EU rules. 

215 

 
 
                                                      
additional contributions would also feed into the programme’s budget. Non-EU Participating 
countries wanting and being able to be part of the geographical focus of a certain activity in 
the context of the programme would have to contribute too as is the case today. 

5.4.8 Funding models 

The  funding  models  for  policy  option  2  would  remain  as  today.  Three  different  ways  of 
distributing the programme’s funds would exist: grants, procurement, and reimbursement.  

In general, grants would be the funding model of choice for the purpose-based projects due 
to  the  need  to  allocate  a  financial  envelope  for  the  approved  project  from  the  beginning. 
Nevertheless, procurement and reimbursement could also be applicable depending on the 
tools  resorted  to  for  the  purpose-based  project,  although  these  would  be  managed  and 
allotted by the participating countries leading the project. 

5.4.9 Budgetary needs and allocation 

This  policy  option  foresees  to  generally  maintaining  the  current  programme  (cf. 
“Continuity”),  enabling  it  to  pursue  its  logical  further  development  with  a  number  of 
additional  elements  (cf. “plus”).  In particular, this  policy  option  is  characterised  by further 
enhanced operational cooperation, beyond what is included currently in Customs 2020. The 
aim  of  the  Customs  programme  under  this  policy  option  would  be  to  strengthen  its  main 
tool  (expert  teams)  and  extend  it  with  a  new  one:  the  purpose-based  approach.  These 
would aid stronger and deeper collaboration, facilitating the work on certain domains such 
as  IT  development  and  innovation.  Moreover,  the  programme  would  further  support 
strategic cooperation with relevant non-EU countries and international organisations, which 
added  to  the  enrichment  of  enhanced  operational  cooperation  would  allow  it  to  be  more 
proactive than reactive.  

All these elements are included in the estimated budget for the future Customs programme 
presented below.  

Figure 35 – Estimated budget for Customs programme under policy option 2 (EUR million) 

216 

41,7%27,7%14,5%4,9%7,1%2,6%1,2%; Competency building0,2%; General support020040060080010001200IT - UCC (no ICS2)IT - UCC (ICS2)IT - No UCC (new projects)IT - Innovation & ContingencyJ.A. - All but expert teamsJ.A. - Enhanced cooperationCompetency buildingGeneral support 
 
 
Source: Deloitte 

The  overall  budget  estimated for  this  policy  option  is  of EUR 1 231.2 million  over  7  years, 
which correspond approximately to EUR 176 million per year. This budget represents a large 
increase with respect to the current programme (+136% in current prices), as well as with 
respect to the baseline scenario (+150%).  

The  table  below  provides  an  overview  of  the  budgetary  needs  estimated  for  this  policy 
option, compared to the current Customs 2020 programme.  

Table 15: Budgetary needs estimated for policy option 1 

Overall budget (EUR million) 
Per year (average) (EUR million) 
% change w.r.t. current budget 

Source: Deloitte 

Customs 2020 

Policy option 2 

Current prices 

Constant prices 

522.9 
74.7 
N/A 

1231.8 
176 
+136% 

1161.9 
166 
+122.2% 

Below are described the different budget elements.  

As for the previous policy options, and for the current Customs2020 programme, IT capacity 
building  represents  by far  the largest  share  of  the  overall budget  (89%),  corresponding  to 
EUR 1 095.27  million,  i.e.  EUR  156.5  million  per year  on  average.  Such  budget  would then 
support four main strands of IT capacity building activities:  

  Supporting the continuity of the existing IT systems and the implementation of the 
systems  necessary  for  the  UCC  (besides  the  ICS2),  which  would  require  EUR  513.7 
million (about EUR 73.4 million per year), or 41.7% of the total programme budget;  
  Ensuring the completion of the ICS2 system and its operation, which would require a 
budget of EUR 341.8 million, corresponding to EUR 48.8 million per year on average 
(i.e. 27.7% of the total programme budget);  

  Sustaining  the  implementation  of  new  IT  systems  not  linked  to  the  UCC  would 
require a budget of EUR 179.2 million, corresponding to EUR 25.6 million (i.e. 14.5% 
of the total programme budget);  

  Supporting IT innovation and a contingency fund would require a budget of EUR 60.4 
million,  corresponding  to  EUR 8.6  million per  year  on average  (or  4.9% of the total 
programme budget).  

Overall,  joint  actions  (encompassing  both  expert  teams  and  all  other  activities  such  as 
seminars, workshops, etc.) would represent 9.6% of the total budget of the programme, or 
EUR  119.4  million,  corresponding  to  approximately  EUR  17  million  per  year  on  average. 
While still a limited share of the overall budget of the programme, the funding presented for 
these  activities  would  represent  a  140%  increase  with  respect  to  the  current  programme, 
and 162% with respect to the baseline scenario. In more details, the budget for joint actions 
would encompass the following:  

217 

 
 
 
  Joint actions except expert  team  would  require  EUR 87.1  million  (i.e.  12.4  EUR per 

year on average, representing about 7% of the total programme budget);  

  Enhanced cooperation activities (expert  teams)  would  require  EUR  32.2  million  (i.e. 
EUR  4.6  per  year  on  average,  representing  about  2.6%  of  the  total  programme 
budget). 

Similarly, human capacity building activities would represent a limited share of the overall 
budget  of  the  programme  (1.2%),  requiring  EUR  15.3  million,  corresponding  to  EUR  2.2 
million  per  year  on  average.  While  still  a  limited  share  of  the  overall  budget  of  the 
programme,  the  funding  presented  for  these  activities  would  represent  a  19%  increase 
compared to the current programme, and an entire new strand of activity with respect to 
the baseline scenario. 

Finally, this option would allow for a (limited) general support line of EUR 2.1 million (EUR 
0.3  million  per  year  on  average),  representing  less  than  0.2%  of  the  overall  budget  of  the 
programme.   

218 

 
 
 
 
5.5 Policy option 3 – Voluntary Structural Cooperation 

Policy option 3 is characterised by three main aspects in addition to policy option 2: 

  Increased  operational  cooperation, by allowing and  supporting  voluntary efforts, 
including the extension of the purpose-based projects for those who want to do 
more; 

  The addition of the Vision group as a tool; 
  The creation of a Programme Steering Group. 

This policy option would build on the previous ones but would aim to be more visionary and 
ambitious in terms of evolution of the programme, while maintaining a level of pragmatism. 

The  Voluntary  Structural  Cooperation  would  entail  a  certain  level  of  innovativeness  in  the 
approach to the programme through the choice of the building blocks and how they will be 
established. In particular, this policy option would favour, even more than in the past, the 
principle  of  enhanced  operational  cooperation  to  work  together  and  achieve  goals, 
alongside a degree of flexibility coupled with lower administrative burden.  

On  the  one  side,  a  new  tool  (the  vision  group)  would  be  developed  to  promote  strategic 
thinking, through investigating and reflecting on the future trends and challenges having an 
impact  on  the  customs  sphere.  On  the  other  side,  the  purpose-based  projects  will  be 
opened  to  the  possibility  of  co-financing  by  small  groups  who  want  to  increase  the 
resources and achieve more effective results together (that would later be shared with the 
other  countries).    This  would  help  satisfy  the  needs  of  the  future  and  those  to  come  in  a 
more agile way, and would, thus, be even more proactive. 

Moreover,  and  with  the  aim  to  facilitate  supervision  and  sharing  of  activity  results,  a 
Programme Steering Group takes over tasks from DG TAXUD to cement further the various 
programme activities.  

Specifically,  the  implications  in  terms  of  the  building  blocks  would  be  the  following 
in  respect  to  the  current  situation): 
(highlighted 

in  blue  are  the  main  changes 

219 

 
 
Figure 36 – Policy option 3 

220 

 
 
Source: Deloitte 

221 

 
 
5.5.1 Vision 

Policy option 3 is more visionary than the previous policy options. The three elements of the 
vision that characterise it are the following:  

  Functioning and modernisation of the customs union; 
  Cooperation between the participating countries.  
  Member  States  become  a  modern  administration  that  anticipates  change  and  has 

the flexibility to react when facing urgent customs issues. 

This  third  element  of  the  vision  would  offer  a  broader  perspective,  giving  the  programme 
more flexibility to innovate, respond to rising issues, and opening the door to a more client 
oriented  approach  (i.e. final user  perspective),  as  identified  amongst  the  specific  trends  in 
chapter 3. This would lead to an administration that is modern and user friendly enough to 
align with the private sector. 

5.5.2 Geographical focus 

The geographical spotlight of policy option 3 would be threefold: 

  Primary: Member States would continue to be the prime focus of all activities under 

the programme.  

  Secondary: acceding counties and candidate and potential candidate countries,  ENP 
countries, and EFTA  countries,  would  have  access  to  the  programme  on  the  same 
basis as in policy option 2. 

  Tertiary: additional key trade partners (e.g. Unites States, China, Japan) could receive 
the attention of the programme, on a case by case basis288. In order for an activity to 
concentrate  on  a  country  or  set  of  countries  from  this  group,  the  European 
Commission or countries from the primary group would need to build a case on how 
this would contribute to the objectives of the programme. 

5.5.3 Activities  

General activities  

This policy option includes the same range of tools as the Continuity “plus” scenario, with 
the addition of a ‘vision group’ tool and the development of purpose based projects already 
introduced in policy option 2. 

The aim of the vision group would be to have a permanent body to revert to for ideas and 
guidance on specific topics, as well as work on prospective developments. This body would 
be flexible in terms of working domains, thanks to its adjustable membership (with different 
backgrounds  –  including  civil  servants  and  other  stakeholders  –  and  various  levels  of 

288 Subject to a financial contribution. 

222 

 
 
                                                      
seniority) that would be called upon based on the specific needs of the situation. This tool 
would be able to provide strategic oversight for virtually any activity. 

The purpose based project will be further extended compared to policy option 2. Groups of 
participating countries would have the possibility to carry out projects with more financial 
resources  under  the  condition  they  co-finance  part  of  it.    It  would  give  the  possibility  to 
implement longer term and larger projects. 

The  scope  and  tools  that  could  be  used  to  pursue  activities  under  the  policy  option  3 
programme would include:  

Table 16 – Scope and tools under policy option 3 

Scope of collaboration 

Existing toolbox289 

New tools 

  As PO2 

  As PO2 

  As PO2 

Soft collaboration  

Operational cooperation 

Enhanced operational 
cooperation 

Source: Deloitte 

IT related activities 

  Vision group; 

  Larger 

purpose-based 

projects. 

In policy option 3, the future programme would continue developing, deploying, operating, 
maintaining, supporting and assuring the quality of the Union components of all electronic 
customs  systems  introduced  under  the  Union  law  by  the  end  of  2020290.  In  terms  of  the 
‘Customs Value Stack’, the systems include the 2017 legacy systems, the UCC systems up to 
2020,  the  international projects,  the  UCC  systems  after  2020,  as  well  as  the  UCC  ICS2  and 
CRMS. The systems also include any other electronic customs systems established under the 
Union law and included in the MASP by the end of 2020. 

In  addition,  the  future programme  intends to  develop,  deploy, operate, maintain,  support 
and  assure  the  quality  of  the  Union  components  of  any  new  electronic  customs  systems 
launched  under  the  Union  law  after  2020.  In  terms  of  the  ‘Customs  Value  Stack’,  these 
systems  include  new,  yet  to  be  developed  projects  that  may  be  expected  based  on 
witnessed  trends  and  developments.  Consequently,  policy  option  3  allows  the 
establishment  of  new  electronic  customs  systems  or  significant  upgrades  of  existing 
systems, which include specific Union components, after 2020. 

289 For conciseness purposes, the tools have not been defined in this section. Their definition is available under 
section 4.2.1.  

290 European Commission, Proposal for a Regulation of the European Parliament and of the Council amending 
Regulation  (EU)  No  952/2013  to  prolong  the  transitional  use  of  means  other  than  the  electronic  data-
processing  techniques  provided  in  the  Union  for  in  the  Union  Customs  Code,  COM(2018)  85  final, 
https://ec.europa.eu/taxation_customs/sites/taxation/files/amendment_ucc_20180302_en.pdf 

223 

 
 
 
 
                                                      
Furthermore,  the  programme  includes  activities  with  respect  to  innovation  in  the  field  of 
customs-related  EIS.  In  concrete  terms,  policy  option  3  would  allow  the  investigation  of 
potential challenges and opportunities originating from new technologies and trends in the 
area of IT development, operation and maintenance. 

Moreover, where relevant or required, the future programme in policy option 3 enables the 
European  Commission  to  support  and/or  fund  (groups  of)  participating  countries  for 
creating,  deploying,  operating,  maintaining,  supporting,  as  well  as  assuring  the  quality  of 
any  national  components  of  legacy  and  new  electronic  customs  systems.  The  activities  of 
these  (groups  of)  countries  have  the  potential  to  be  of  benefit  to  other  participating 
countries  as  well,  hence  offering  additional  value  for  the  entire  EU,  and  making  them 
eligible  for  support  and/or  funding  of  the  European  Commission  under  the  Customs 
programme.  

5.5.4 Participants to the activities 

With  the  exception  of  customs  administrations,  who  would  continue  to  be  the  main 
participants of the programme, the participation of a broad range of stakeholders would be 
advocated under this policy option. As the vision and activities will be extensive, the ad-hoc 
participation,  depending  on  the  activity  at  hand,  of  a  wider  population  with  a  diverse 
background  will  be  useful.  Some  examples  of  different  stakeholders  and  in  which  context 
they could participate are: 

  Other EU public administrations:  to  work  together  to  reach  common  goals,  find 

synergies, etc.; 

  Non-EU customs administrations:  to  share  their  knowledge  or  work  together 

towards a common goal; 

  Other non-EU public administrations:  for  knowledge  exchange or  working  together 

towards a common goal; 

  Economic operators:  to  give  their  practical  input  (as  part  of  the  vision  group  for 
example),  work  together  on  innovation  (including  IT  related),  or  to  help  in  easing 
operational cooperation; 

  Academia:  to  help  developing  countries,  and  assist  in  supporting  the  quest  for 

innovation;  

  Interest groups and civil society organisations:  to  give  practical  input  (as  part  of  the 
vision group for example), collaborate on innovation activities, share best practices, 
etc.; 

  International organisations:  to  collaborate  on  innovation,  exchange  best  practices, 

and develop common competency building material. 

5.5.5 Direct beneficiaries of the outputs 

As  one  of  the  aspirations  of  policy  option  3  is  to  be  more  client  oriented  through  seeking 
involvement  of  and  collaboration  with  a  broad  group  of  stakeholders,  the  types  of  direct 

224 

 
 
beneficiaries  can  be  expected  to  be  broader  than  today.  By  targeting  other  specific 
beneficiaries with the programme’s outputs, the  customs union’s goals will be  achieved in 
an  inclusive  manner.  Instead  of  concentrating  only  on  customs  administrations  and  their 
objectives,  the  programme  will  aim  to  produce  outputs  to  ease  the  relationship  between 
customs  administrations  and  economic  operators.  As  such,  while  customs  administrations 
will  continue  to  see  their  objectives  satisfied,  their  “counterparts”  in  the  customs  process 
will also directly benefit from the outputs of the Customs programme. For instance: 

  Public administrations could enjoy synergies to reach possible common goals such as 

combatting customs fraud, etc.;  

  Economic operators (EU based and non-EU based) could have access to new systems 
to  ease  compliance  and  benefit  from  the  same  user  experience  in  the  different 
Member States; 

  (EU and non-EU) Civil society organisations could have access to new learning tools; 
  Research centres and academia  could  have  access  to  more  means  (financial  and 

knowledge based) to develop their research. 

In  parallel,  the  fact  that  some  customs  administrations  will  work  using  an  “enhanced 
cooperation”  approach  could  also  potentially  have  an  impact  on  how  the  customs 
administrations  will  benefit  from  certain  outputs  of  the  programme.  Indeed,  although  all 
participating  countries’  customs  administrations  would  ultimately  have  access  to  the 
outputs from a specific project or activity, the participating countries directly partaking in it, 
and therefore where relevant also the economic operators active in these countries, would 
benefit first hand. Indeed it can be stated that likely Member States participating in purpose 
based projects will be the first ones to effectively roll out its achievements and benefit from 
the outputs, and consequently where of relevance so will do the economic operators active 
in these countries. 

5.5.6 Governance 

To fully benefit from the enhanced scope and breadth of activities, the governance of the 
programme would be changed compared to the current programme and the earlier options. 
While  the  governance  of  the  programme  would  remain  centralised  with  the  ultimate 
decision  making  under  the  European  Commission’s  responsibility,  the  purpose  based 
approach requires a hybrid governance. This approach needs indeed a governance involving 
both the European Commission and the participating countries’ representative to ensure a 
smooth,  efficient  and  integrated  execution.  To  ensure  this,  a  new  steering  group  (i.e.  the 
Programme Steering Group) should be created, bringing together representatives from the 
European  Commission,  the  EU  Member  States  and  the  other  participating  countries  (on  a 
voluntary basis).  

225 

 
 
 
 
Suggested approach: 

The governance and management under this policy option would be composed of three 
levels (see figure below): 

  The  first  and  higher  level  would  be  under  the  responsibility  of  the  European 
Commission.  The  European  Commission  maintains  its  power  over  all  decisions 
linked to the Work Programme (or any other tool that may exist in the future), as 
well as all those related to legislation, policy orientation, and management of the 
programme operational tools, including IT. 

  The  second  level  would  be  the  Programme  Steering  Group  and  would  be  made 
out  from  officials  from  DG  TAXUD  (and  potentially  other  European  Commission 
services), officials from Member States, as well as officials from third participating 
countries on a voluntary and ad-hoc basis. This Programme Steering Group would 
concentrate on: 

  The  management  of  the  programme  (e.g.  examination,  approval  and 

monitoring of the activities).  

operational 

  The  coordination  of  the  activities  (soft/operational  cooperation  and 
enhanced 
the 
cooperation), 
implementation  and  the  dissemination  of  the  results  of  the  enhanced 
operational cooperation activities (purpose based projects) and other types 
of activities. In this sense, the Programme Steering Group would ensure that 
all participating countries benefit from the outputs of the programme, and 
hence prevent the creation of a knowledge gap between them. 

supervising 

through 

  The  third  level  would  comprise  the  participating  countries  managing  their 
activities  and  reporting  to  the  Programme  Steering  Group.  In  particular,  those 
having chosen to engage in enhanced operational cooperation would have more 
responsibilities to manage due to the length and number of tools to manage.  

The  figure  below  illustrates  in  a  schematic  way  the  suggested  governance  of  this  policy 
option with the main actors and responsibilities. 

Figure 37 – Governance of policy option 3 

Source: Deloitte 

226 

 
 
 
5.5.7 Budgetary sources 

While the main budgetary source would continue to be the MFF’s EU budget allocation to 
the  programme,  policy  option  3  would  offer  more  flexibility  in  terms  of  other  sources  of 
contribution. Nevertheless, it is important to note that these would be on an activity basis 
or purpose driven project basis. These sources would be as follows: 

  Participating countries contribute more: this would make particularly sense in cases 
where participating countries choose to come together for an enhanced operational 
cooperation activity to reach a common goal that would partly / in first instance only 
benefit them. On top of a part of EU budget, Member States and third participating 
countries could contribute more for a specific project they want to undertake291. The 
participating  countries  collaborating  in  a  specific  purpose-based  project  would  be 
able  to  pool  further  financial  resources  for  this  project  to  invite  more  participants, 
have more tools at their disposal (which the allocated envelope would not be able to 
cover), develop new technologies at national level that would usually not be covered 
by the programme, etc. 

  Third countries contribute:  other  non-EU  participating  countries  could  be  asked  to 
contribute to a specific project or activity they are involved in. This would be linked 
to cases where the geographical focus would be broader than just the EU Member 
States.  

5.5.8 Funding models 

Policy option 3 would resort to four different funding models, being three traditional ones 
and  one  alternative  one.  The  three  traditional  models  (grants,  procurement  and 
reimbursement) would be used in the same manner as they are used in the baseline. 

The alternative model would consist of awards that would be given mainly in the context of 
soft collaboration activities (linked to innovation for example) They would offer a reward to 
stakeholders who present the most effectively meet a defined challenge of interest for DG 
TAXUD.  The  aim  is  to  stimulate  innovation  and  elaborate  solutions  to  problems,  which 
would be shared with all participating countries. 

5.5.9 Budgetary needs and allocation 

This  policy  option  embodies  a  broader  and  more  ambitious  vision  for  the  next  Customs 
programme than policy option 2, building on the following three elements: 

  Functioning and modernisation of the customs union; 
  Cooperation between the participating countries.  

291 In case Member States need to contribute more, it could be possible to foresee the allocation of the 20% of 
the customs duties collected to the projects and activities conducted under the Customs programme. 

227 

 
 
                                                      
  Member  States  become  a  modern  administration  that  anticipates  change  and  has 

the flexibility to react when facing urgent customs issues. 

This  third  element  of  the  vision  would  offer  a  broader  perspective,  giving  the  programme 
more flexibility to innovate, respond to rising issues, and opening the door to a more client 
oriented  approach  (i.e. final user  perspective),  as  identified  amongst  the  specific  trends  in 
chapter 3. This would lead to an administration that is modern and user friendly enough to 
align with the private sector. 

This  policy  option  introduces  new  activity  strands  in  the  programme  (such  as  the  vision 
group),  reinforces  existing  activities  (such  as  the  purpose-base  projects,  which  become  a 
well-established tool requiring co-funding) as well as new funding models for the activities 
(such as the awards). The quantification in monetary terms of the budgetary needs for those 
actions  would  thus  present  a  number  of  uncertainties,  concerning  the  actual  take-up  and 
funding needs for these activities and funding models.  

The estimation of the budgetary needs for policy option 3 would therefore have to reflect 
such uncertainties, and would range from EUR 1 285.1 million (corresponding to EUR 183.6 
million per year on average) to EUR 1 348.1 million (corresponding to EUR 192.6 million per 
year  on  average).  The  uncertainties  are  expressed  via  the  creation  of  scenarios,  which 
reflect more or less optimistic estimations on the take-up of the new activities and funding 
models.  The  ‘minimum’  scenario  includes  assumptions  on  lower  take-up  of  new  activities 
such as the vision group, the purpose-based projects and the awards, while the ‘maximum’ 
scenario is based on assumptions of larger take-up, and the ‘central’ scenario is somewhat 
in  the  middle.  As  a  general  remark,  the  central  scenario  is  considered  the  main  one;  the 
minimum and maximum scenarios are described when relevant.  

The  table  below  provides  an  overview  of  the  budgetary  needs  estimated  for  this  policy 
option under the different scenarios.  

Table 17 – Scenarios for budgetary needs under policy option 3  

Overall budget (EUR million) 
Average per year (EUR million) 
w.r.t. current programme 
 (current prices) 
w.r.t. current programme  
(constant prices) 

Source: Deloitte  

Minimum scenario  Central scenario  Maximum scenario 

1285.1 
183.6 

+146% 

+132% 

1 313.1 
187.6 

+151% 

+137% 

1 348.1 
192.6 

+158% 

+143% 

All these elements are included in the estimated budget for the future Customs programme 
presented below.  

228 

 
 
 
Figure 38 – Estimated budget for Customs programme under policy option 3 (EUR million 

Source: Deloitte estimations 

The  overall  budget  estimated for  this  policy  option  is  of EUR 1 313.1 million  over  7  years, 
which  correspond  approximately  to  EUR  187.6  million  per  year.  This  budget  represents  a 
large increase with respect to the current programme (+151% in current prices), as well as 
with respect to the baseline scenario (+185%), while the budget increase would be limited 
when compared to policy option 2 (7% increase).  

Below are described the different budget elements.  

As for the previous policy options, and for the current Customs2020 programme, IT capacity 
building represents by far the largest share of budget (83.4%), corresponding to EUR 1 095.3 
million,  i.e.  EUR  156.5  million  per  year  on  average,  as  in  the  PO2.  Such  budget  would 
support  four  main  strands  of  IT  capacity  building  activities,  similar  to  policy  option  2  (i.e. 
UCC systems, ICS2, new non-UCC systems and IT innovation and contingency). The budget 
related  to  these  would  not  change  compared  to  the  Continuity  “plus”  scenario,  for  this 
policy  option  representing  39.1%,  26%,  13.6%  and  4.6%  of  the  total  programme  budget, 
respectively.  

Overall,  all  forms  of  enhanced  cooperation  and  joint  actions  (encompassing  both  expert 
teams and all other activities such as seminars, workshops, etc.) would represent 17.8% of 
the  total  budget  of  the  programme,  or  EUR  234  million,  corresponding  to  approximately 
EUR 33.4 million per year on average. While still a limited share of the overall budget of the 
programme,  the  funding  presented  for  these  activities  would  represent  a  408%  increase 
compared to the current programme, a 488% increase compared to the baseline scenario, 
and a 12.5% increase when compared to policy option 2.  

The minimum’ and the ‘maximum’ scenarios slightly diverge from this quantification, due to 
different  assumptions  made  on  the  take-up  of  the  two  new/reinforced  elements  of  the 
policy option, namely the vision group (and the awards) and the purpose-based projects for 
cooperation.  In  the  minimum  scenario,  all  activities  related  to  enhanced  cooperation  and 
joint  actions  would  require  EUR  170.3  million  over  the  7  years,  or  EUR  24.3.7  million  per 

229 

 
 
 
year  on  average,  corresponding  to  about  12.6%  of  the  total  programme  budget  (a  14.1% 
reduction  compared  to  the  central  scenario).  In  the  maximum  scenario,  this  strand  of 
activities would require EUR 233.3 million, corresponding to about EUR 33.3 million EUR per 
year (a 17.6% increase compared to the central scenario).  

In more details, the budget for joint actions would encompass the following: 

  Joint actions except expert team would not lead to budgetary changes compared to 
those quantified for  policy option  2, due to  resource  availability in  Member  States. 
customs administrations already struggle with finding the human resources for such 
activities  and  wold  likely  have  similar  problems  for  additional  ones,  such  as  the 
purpose-based  projects.  Therefore,  this  line  of  activity  would  require  EUR  87.1 
million  (i.e.  12.6  EUR  per  year  on  average,  representing  about  6.7%  of  the  total 
programme budget).  

  Enhanced  operational  cooperation  activities  (including  also  joint  operations)  would 
include  both  the  expert  teams  and  the  extended  purpose-based  projects.  While 
different tools with specific procedures and rules, expert teams and purpose-based 
projects share some basic principles, such as being defined by achievement of a goal 
rather than a period of time, having more strategic objectives and combining the use 
of  several  tools.  Therefore,  the  overall  availability  of  resources  for  this  scope  of 
collaboration would see and overall increase.  

  The endowment for expert teams would be similar if not slightly lower in comparison 
with  policy  option  2,  for  similar  reasons  (i.e.  availability  of  resources  in  Member 
States  and  possibility  to  use  other  tools,  such  as  the  purpose-based  projects). 
Therefore, this line of activity would require EUR 29 million (i.e. 4.4 EUR per year on 
average, representing about 2.2% of the total programme budget, a 10% reduction 
compared to policy option 2.  

  Sustaining  the  purpose-based  projects  would  require  about  EUR  45.5  million,  i.e. 
about  EUR  6.5  million  per  year,  representing  approximately  3.2%  of  the  total 
programme  budget292.  Depending  on  the  actual  take-up  of  the  instrument,  the 
budgetary  needs  for  this  activity  could  range  from  EUR  35  million  under  the  lower 
bound  scenario  (i.e.  EUR  5  million  per  year  on  average,  or  2.5%  of  the  total 
programme  budget)  to  EUR  56  million  under  the  upper  bound  scenario  (i.e.  EUR  8 
million per year, representing 3.8% of the total programme budget). While the basis 
for the purpose-based projects would already be present in policy option 2, in policy 
option 3 enhanced operation cooperation would be further reinforced, and purpose-
based  projects  better  established  as  a  tool.  This  strand  of  activity  would  be  co-
funded by the Customs programme, in a similar way as the grants under the Horizon 

292 The budgetary needs estimated are much lower than the funding available under H2020 for the ‘Security, 
Border,  Police’  societal  challenge  (about  EUR  3.8  billion  over  7  years).  Such  lower  estimates  depends  on 
several  factors,  including  capacity  of  Member  States  to  absorb  the  funding,  capability  of  the  programme  to 
manage  so  many  (new)  activities  and  related  budget,  only  partial  overlap  of  H2020  scope  with  Customs 
functions.  

230 

 
 
                                                      
2020 programme. Therefore, a 30% co-funding by the participating organisation(s) is 
considered.  The  share  of  national  co-funding  would  still  be  quite  limited,  reaching 
about 1% of the overall programme budget (from 0.8% in the minimum scenario to 
1.3% in the maximum scenario). The table below provides an overview of the overall 
budget  for  this  strand  of  activity,  including  both  the  EU  and  co-funding,  under  the 
different take-up scenarios.   

Table 18 – Budgetary needs for purpose-based projects in policy option 3 

Lower bound 

Central scenario 

Upper bound 

35 

10.5 

EU funding 
(EUR million) 
Co-funding  
(EUR million) 
Overall funding 
(EUR million) 
Percentage 
programme budget. 
Percentage  of  national 
funding  w.r.t. 
overall 
programme budget. 
Note: percentages are calculated taking into account only the EU funding 
Source: Deloitte  

overall 

0.8% 

2.7% 

45.5 

of 

45.5 

13.6 

59.1 

3.5% 

1% 

56 

16.8 

72.8 

4.2% 

1.3% 

  Supporting the functioning and the activities of the vision group would require about 
EUR  7.7  million  overall,  corresponding  to  EUR  1.1  million  per  year  on  average  (i.e. 
about  0.6%  of  the  total  budget  programme293).  This  would  cover  the  work  of  the 
members  of  the  vision  group  for  the  time  allocated  to  these  supporting  tasks 
(estimated to be around 2.5 day/person/month), the travel and subsistence costs for 
quarterly  meetings,  and  the  specific  activities  of  this  group  (e.g.  EUR  3.5  million  for 
studies,  which  is  a  budget  similar  to  the  one  allocated  to  studies  under  the 
Customs2020 programme). In addition, the vision group would be responsible for the 
management  of  another  innovative  funding  model  for  activities  introduced  in  this 
option, i.e. awards (see textbox below). Based on the actual take-up and funding for 
the awards, the additional budget managed by the vision group would range from EUR 
10.5 million (EUR 1.5 million per year on average) to EUR 52.5 million (corresponding 
to EUR 7.5 million per year on average)294.  

Awards  

293 The  figures  are  estimated  based  on  the  following  composition  of  the  vision  group:  15  participants  from 
Member  States’  customs  administrations,  8  external  experts  and  2  participants  from  the  European 
Commission (for coordination and steering of the meetings).  

294 Such  large  variations  are  mostly  due  to  the  inherent  uncertainties  around  the  implementation  of  the 
awards.  The  detailed  overview  of  the  scenarios  and  their  underlying  assumptions  is  provided  in  the  textbox 
below. 

231 

 
 
 
                                                      
Under  policy  option  3,  awards  are  introduced  as  a  further  incentive  to  innovation.  The 
awards  for  Customs  could  be  modelled  on  the  Inducement  prizes  introduced  in  the 
Horizon  2020  model  recently295.  Such  prizes  or  awards  offer  a  cash  reward  to  whoever 
can  most  effectively  meet  a  defined  challenge.  The  aim  is  to  stimulate  innovation  and 
elaborate solutions to problems that matter to European citizens at large.  

Applying  this  concept  to  Customs  would  provide  a  further  tool  to  stimulate  innovation, 
identify  such 
using  more  of  a  top-down  approach,  as  the  vision  group  could 
challenges/key  emerging  topics  and  stimulate  customs  administrations  in  driving  the 
innovation  process.  They  could  be  used  to  drive  national  customs  administrations  in 
thinking  about  (innovative)  solutions  for  issues  linked  to  administrative  cooperation  in 
customs matters. Awards should not be linked to one topic only (e.g. only innovative IT 
solutions), but could be used to promote action in other fields, which risk being neglected 
otherwise (e.g. innovation in processes, training, skills, etc.). In addition, competition for 
awards  could  be  open  also  to  academia  and  research  institutions  and/or  to  economic 
operators,  which  could  then  not  only  become  direct  beneficiaries  of  the  Customs 
programme,  but  also  provide  different  points  of  view  and  knowledge  to  customs 
administrations.  customs  administrations  willing  to  participate  (from  one  or  more 
Member States, and together or without partners such as academia) would then submit 
their solution to the challenge identified, which would be assessed by a group of experts 
(identified  by  the  vision  group)  based  on  a  set  of  criteria  defined  at  the  launch  of  the 
award.  The  solution  selected  would then  receive  the  award  and  increase  their  visibility. 
The awards are not expected to cover the costs for developing the solution, but rather to 
provide  an  incentive  to  customs  administrations  to  have  a  more  forward-looking  and 
collaborative approach.  

So far (March 2018), 16 awards have been launched under Horizon 2020 (including those 
still  open,  those  closed  and  those  already  awarded),  under  very  different  societal 
challenges (from social innovation and health to photovoltaic to food safety). Most of the 
awards have limited amounts, ranging from EUR 1 million to EUR 3 million (higher awards 
are very rare).  

Based  on  the  (limited)  application  of  this  tool  under  the  Horizon  2020  programme,  the 
following budgetary needs have been estimated for the future generation of the Customs 
programme, taking into account different possibilities in terms of number of awards per 
year and (average) amount of the awards.  

Figure 39 – Budgetary needs for awards under policy option 3  

Lower bound 

Central scenario 

Upper bound 

Average award amount 
(EUR million) 
Number or awards per 
year 
Average cost per year 
(EUR million) 

1.5 

1 

1.5 

2 

2 

4 

295 See: https://ec.europa.eu/research/horizonprize/index.cfm?pg=about  

2.5 

3 

7.5 

232 

 
 
 
                                                      
Overall budget for the 
programme (7 years) 
(EUR million) 
Percentage 
programme budget. 

of 

overall 

10.5 

2.2% 

28 

2.1% 

52.5 

3.9% 

Source: Deloitte 

Human  capacity  building  activities  would  not  change  compared  to  policy  option  2, 
representing a limited share of the overall budget of the programme (1.2%), requiring EUR 
15.3 million, corresponding to EUR 2.2 million per year on average.   

An  addition  under  policy  option  3  would  be the  creation of  a  Programme  Steering  Group 
that would focus on the management of the programme as a whole and on the coordination 
of  the  different  activities,  particularly  the  purpose-based  projects,  in  support  of  the 
European  Commission  (see  section  1.5.6  on  governance).  The  funding  necessary  for  the 
functioning of this entity has been estimated at EUR 2.1 million overall (EUR 0.3 million per 
year on average), corresponding to 0.2% of the total budget of the programme. This funding 
would  cover  the  occasional  travel  and  subsistence  expenses  (as  physical  meetings  are 
expected  to  be  limited),  the  organisation  of  specific  activities  as  well  as  the  time  each 
member  of  the  overarching  entity  would  spend  on  individual  work  related  to  the 
management of the programme and its activities296.  

Finally, as is the case for PO2, this option would allow the existence of a (limited)  general 
support line of EUR 2.1 million (EUR 0.3 million per year on average), representing less than 
0.2% of the overall budget of the programme.  

296 Similarly with the estimation for the vision group, the budgetary needs for the overarching entity has been 
based  following  composition  of  the  vision  group:  27  participants  from  Member  States’  customs 
administrations,  and  3  participants  from  the  European  Commission  (for  coordination  and  steering  of  the 
meetings), with bi-monthly meetings.  

233 

 
 
 
                                                      
5.6 Policy option 4: Integration 

Policy option 4 is characterised by the following aspects: 

  It is the most ambitious policy option 
  An  EU  Customs  Administration  is  created,  bringing  together  all  EU  national 

customs administrations. 

  The programme supports the needs of the different units within the EU Customs 
Administration,  including  an  IT  department  in  charge  of  EIS  and  EIS  related 
national components. 

The aim of this last policy option is to be as ambitious as possible given the existing customs 
and political landscape.  This means that the proposed frame should be forward looking and 
visionary, but at the same time achievable, even if only in the longer term. It is engineered 
based on what is considered as the ‘ideal’ realistically achievable situation, which depends 
on a level of evolution that might not be mature enough at a shorter term (i.e. within the 
duration of the next Customs programme). 

The principles governing policy option 4 are flexibility, enhanced strategic oversight, and the 
concept  of  doing  (more)  together  following  a  centralised  approach  (respecting  the 
subsidiarity principle).  

This  policy  option  is  set in  a  world  where the  EU  national  customs  administrations  will be 
(partially) merged into a unique EU Customs Administration in charge of the functioning of 
the  customs  union.  This  implies  that  some  units  of  the  national  customs  administrations 
would be integrated within the EU Customs Administration. Some examples of these units 
could be the ones dealing with capacity building, or specific issues. In this sense, a Human 
Competency department within the EU Customs Administration would be in charge of the 
uniform  implementation  of  the  Customs  CFW.  For  this  purpose,  an  EU  Academy  could  be 
put in place in order to ensure the education and training of the customs officials.  

Moreover,  work  and  collaboration  are  characterised  by  a  high  level  of  automation,  which 
eases  the  relationships  and  communications  within  the  EU  Customs  Administration;  and 
between  the  national  customs  administration  on  the  one  hand  and  other  Member  State 
administrations, third country customs administrations and other stakeholders at the other 
hand. The policy option is built to ensure that the programme is able to address the widest 
possible range of general and specific trends and challenges identified. 

Specifically,  the  implications  in  terms  of  the  building  blocks  would  be  the  following 
in  respect  to  the  current  situation):
(highlighted 

in  blue  are  the  main  changes 

234 

 
 
Figure 40 – Policy option 4 

235 

 
 
Source: Deloitte 

236 

 
 
5.6.1 Vision 

This  policy  option  will  aim  to  establish  the  EU  as  an  indisputable  policy  and  operational 
practice leader in the field of customs. This would imply that the EU will continue to set the 
legislation  in  the  field  of  customs,  complemented  by  standard  customs  practices;  and 
Member  States  will follow  these  EU  standards  and practices.  This  scenario  corresponds to 
the long-term future, where an EU Customs Administration will be in charge of customs at 
the EU level. The programme will hence continue to support the implementation of the EU 
customs policy  as  in  the  other policy  options.  In  addition,  special  attention  will be paid  to 
the  wider  role  of  the  EU  Customs  Administration  on  the  ground  in  order  to  ensure  its 
capacity to respond to crisis and to innovate.  

5.6.2 Geographical focus 

The geographical focus of policy option 4 would be divided similarly to that of policy option 
3: 

  Primary:  Member  States  would  be  the  prime  focus  in  order  to  be  able  to  meet  the 
new vision. In order to have all Member States at the same level and build a strong EU 
position in the global customs sphere, all Member States need to be within the focus 
of the programme. 

  Secondary: acceding countries, candidate and potential candidate countries, 

ENP 

countries , EFTA countries. 

  Tertiary: WTO/WCO members could  take  part  in  the  programme,  on  a  case  by  case 

basis.297 

However,  the  main  difference  would  be  that  this  option  would  allow  for  countries  in  the 
tertiary  group  to  join  the  secondary  group  by  actively  pursuing  collaboration  agreements 
with them. The involvement of third countries would be necessary if the EU would aim at 
strengthening its position at a global level. Occasionally putting the focus of the programme 
on other countries would reinforce the EU’s image as a leader and guide in customs matters, 
but allowing all interested countries to have access to it on a voluntary basis would be even 
more effective. 

297 Subject to a financial contribution. 

237 

 
 
 
 
                                                      
5.6.3 Activities  

General activities  

This policy option includes the same range of tools and collaboration scopes as policy option 
3, with one new tool: the sandbox. 

As  for  the  sandbox,  this  new  tool  would  offer  the  ultimate  tool  for  collaboration  (e.g. 
between  the  EU  Customs  Administration  and  local  stakeholders)  on  innovation.  It  would 
seek to provide a safe environment to develop pilots and experimentation projects without 
it (negatively) impacting the “live” environment before it is ready. 

In computer science a sandbox is a closed testing environment designed for experimenting 
safely with web or software projects. By extension, the concept of sandbox is applied to any 
‘virtual’  or  ‘mock-up’  environment  used  to  test  new  solutions  or  programmes  without 
incurring risks to the overall system. The concept is also being used in the digital economy 
arena, to refer to regulatory sandboxes: testing grounds for new business models that are 
not protected by current regulation, or supervised by regulatory institutions.  

For  instance,  these  testing  grounds  have  been  recently  adopted  in  the  fintech  world298, 
where  there  is  a  growing  need  to  develop  regulatory  frameworks  for  emerging  business 
models. The purpose of the sandbox is to adapt compliance with strict financial regulations 
to the growth and pace of the most innovative companies, in a way that does not smother 
the fintech sector with rules, but also does not diminish consumer protection.  

A  similar  approach  could  be  used  for  Customs.  The  goal  is  to  encourage  competition  and 
innovation, controlling the risks and preventing them from affecting citizens and businesses. 
Governmental  customs  stakeholders  (potentially 
involving  other  stakeholders  from 
academia and/or private sector) make progress in the development of future processes in a 
virtual environment, complying little by little with all regulations, until they finally reach the 
end  of  the  road  and  transition  out  of  this  testing  environment  to  implement  the  new 
solution in the real world, now without a safety net and fully compliant with regulations. 

The scope and tools that could be used to pursue under the programme would include: 

298  See  for 
sandbox/  

instance  the  example 

in  UK:  https://www.bbva.com/en/first-cohort-first-fintech-regulatory-

238 

 
 
 
 
                                                      
Table 19 – Scope and tools under policy option 4 

Scope of collaboration 

Existing toolbox299 

New tools 

Soft collaboration  

Operational cooperation 

  As PO3 

  As PO3  

Enhanced 
cooperation 

Source: Deloitte 

operational 

  As PO3 

IT related activities 

  Joint operations; 
  Sandbox. 

In policy option 4, the future programme would continue developing, deploying, operating, 
maintaining, supporting and assuring the quality of the Union components of  all electronic 
customs  systems  introduced  under  the  Union  law  by  the  end  of  2020300.  In  terms  of  the 
‘Customs Value Stack’, the systems include the 2017 legacy systems, the UCC systems up to 
2020,  the  international projects,  the  UCC  systems  after  2020,  as  well  as  the  UCC  ICS2  and 
CRMS. The systems also include any other electronic customs systems established under the 
Union law and included in the MASP by the end of 2020. 

In  addition,  the  future programme  intends to  develop,  deploy, operate, maintain,  support 
and  assure  the  quality  of  the  Union  components  of  any  new  electronic  customs  systems 
launched  under  the  Union  law  after  2020.  In  terms  of  the  ‘Customs  Value  Stack’,  these 
systems  include  the  new  projects  that  are  presently  not  known  yet.  Consequently,  policy 
option  4  allows  the  establishment  of  new  electronic  customs  systems  or  significant 
upgrading of existing systems including specific Union components, after 2020. 

Furthermore, the future programme includes activities with respect to further innovation in 
the  field  of  electronic  customs  systems.  In  concrete  terms,  policy  option  4  allows  the 
investigation of challenges and opportunities originating from new technologies and trends 
in  the  field  of  IT  development,  deployment,  operation,  maintenance,  support,  as  well  as 
quality assurance. Next to Blockchain and Cloud, the programme could envisage exploring a 
diversity of new technologies that could potentially facilitate the achievement of the vision 
in policy option 4.  

Last but not least, the IT department within the EU Customs Administration will be in charge 
of  the  development,  operation  and  maintenance  of  the  currently  national  components  of 

299 For conciseness purposes, the tools have not been defined in this section. Their definition is available under 
section 4.2.1.  

300 European Commission, Proposal for a Regulation of the European Parliament and of the Council amending 
Regulation  (EU)  No  952/2013  to  prolong  the  transitional  use  of  means  other  than  the  electronic  data-
processing  techniques  provided  in  the  Union  for  in  the  Union  Customs  Code,  COM(2018)  85  final, 
https://ec.europa.eu/taxation_customs/sites/taxation/files/amendment_ucc_20180302_en.pdf 

239 

 
 
 
 
                                                      
the EIS related systems301. This will be a consequence of the centralization process enabled 
by the creation of the EU Customs Administration.  

5.6.4 Participants to the activities 

The range of potential participants will be the same as policy option 2. The main participants 
to  the  activities  will  be  the  officials  of  the  EU  Customs  Administration.  In  addition,  the 
customs administrations of third countries will also be direct participants of the programme. 
As the vision and activities will be extensive, the participation of a wider population with a 
diverse background will be useful. Some examples of additional stakeholders and in which 
context they could participate are:  

  Other  EU  and  non-EU  public  administrations,  such  as  national  tax  administrations: 

to work together to reach common goals, find synergies, etc.; 

  Other  EU  agencies:  FRONTEX  could  be  for  example  an  important  partner  as  far  as 

 

border management is concerned; 
International  organisations:  WCO,  WTO  and  UN302 will  be  invited  to  some  of  the 
activities,  in  particular  to  the  vision  group,  to  discuss  and  reflect  on  the  future 
trends having an impact on customs;  

  Economic  operators:  to  give  their  practical  input  (as  part  of  the  vision  group  for 
example), work together on innovation (including IT related, and especially in terms 
of automation of processes), or to help in easing operational cooperation; 

  Academia: to assist in the quest for innovation, or to share their expertise in an EU 

 

Customs Academy (lectures, expert panels, etc.); 
Interest groups and civil society organisations: to give practical input (as part of the 
vision group for example), share best practices, etc.; 

5.6.5 Direct beneficiaries of the outputs 

In  general  terms,  the  direct  beneficiaries  of  the  programme  will  be  the  EU  Customs 
Administration and its officials. This ambitious policy option will not, however, concentrate 
only on this administration. This programme will aim at producing outputs at a global level. 
In  this  sense,  the  customs  administrations  from  non-EU  countries  will  also  be  direct 
beneficiaries as they will be able to leverage on a close cooperation with the EU. 

301 Please  note  that  once  these  currently  national  components  are  taken  under  the  (EU)  central  level  in  the 
Overarching entity, they would not be referred to as national components anymore, but would also be central 
components. Nevertheless, this report will continue to refer to this components as national components of the 
EIS in order to differentiate them from the current central components and understand the implications of the 
inclusion of the currently national components under the programme.  

302 Additional UN Agencies other than the WCO that could participate in the programme could be for example: 
the Economic European Commission for Europe, and the Conference for Trade and Development. 

240 

 
 
                                                      
On  a  second  level,  other  public  administrations  (both  EU  and  non-EU),  such  as  tax 
administrations, will enjoy synergies to reach common goals. Traders (EU based and non-EU 
based) will benefit from a lighter and centralised EU Customs Administration and a network 
of  customs  administrations  working  as  one  at  global  level,  reducing  red  tape  to  the 
minimum. Research centres and academia could  have  access  to  more  means  (financial  and 
knowledge based) and centralised data to develop their research and present their findings 
to the customs community.  

5.6.6 Governance 

Taking  into  account  the  more  ambitious  approach,  we  believe  that  under  this  option  the 
governance  model  for  this  policy  option  should  be  further  strengthened  as  compared  to 
policy option 3. A centralised approach, with a strong and independent body (such as the EU 
Customs  Administration)  would  ensure  the  accomplishment  of  the  objectives  of  the 
programme.  In  this  case,  it  is  especially  relevant  to  include  an  IT  department  to  develop, 
operate,  and  maintain  not  only  the  EU  components,  but  also  the  national  ones,  to  the 
extent still existing. 

Suggested approach: 

The governance of policy option 4 entails three main levels of governance: 

  The European Commission would continue to be the first and higher level. It would 
continue to be in charge of the programme governance, including decisions on the 
Work Programme, as well as all those related to legislation and policy orientation.  
  At a second level, the EU Customs Administration would be in charge of a wild array 

of tasks described below: 

  The  different departments  of  the  EU  Customs Administration,  such  as the  IT 
department or the Human Competency department would take over from the 
national customs administrations following the principle of “doing together”. 
These  units  would  be  also  in  charge  of  the  management  of  the  activities 
related  to  their  area.  In  other  words,  those  units  will  be  the  ones  drafting 
proposals  for  activities  they  want  to  pursue,  and  will  be  responsible  for  the 
development and implementation of such activities if funding is awarded. 
  A specific department within the EU Customs Administration would deal with 
the daily tasks involved in the running of the programme. Those tasks include 
for  example  the  studying  and  approving  of  proposals,  monitoring, 
communicating, disseminating, etc. The same unit would also be in charge of 
the  programme  operational  tools  (i.e.  studies  and  external  providers, 
communication  projects,  etc.),  which  were  in  DG  TAXUD’s  hands  in  the 
previous policy option.   

  Lastly,  the  participating  countries  would  keep  their  management  responsibilities 

concerning the activities remaining at the national level. 

241 

 
 
 
 
 
The  figure  below  illustrates  in  a  schematic  way  the  suggested  governance  of  this  policy 
option with the main actors and responsibilities. 

Figure 41 – Governance of policy option 4 

Source: Deloitte 

5.6.7 Budgetary sources 

The budgetary sources of policy option 4 would be aligned with those of the baseline, with 
one major variation: the potential contribution of economic operators on an activity basis.  

The  main  budgetary  source  would  continue  to  be  the  MFF’s  EU  budget  allocation  to  the 
programme, supplemented by contributions from non-EU participating countries for specific 
activities to which they would participate; however, economic operators would also be able 
to  co-finance  (through  PPPs,  further  explained  below  under  funding  models)  certain 
activities. 

This  new  kind  of  contribution  could  be  a  complex  option  due  to  the  implications  it  could 
have (private funding might come with demands, or it could put one economic operator in 
an  advantageous  position  over  others).  This  budgetary  source  (PPPs)  would  mainly 
(although not exclusively) be useful for enhanced operational cooperation activities with a 
goal that could also benefit the contributor’s commercial interests in some way (e.g. being 
able to commercialise the result later on), for instance, developing IT systems. In fact, it is 
important to highlight that this source will not be (solely) linked to the participation of EOs 
to a certain activity, but to the possibility of them getting partial ownership/preferential use 
of  the  output  thereof  during  a  certain  period  of  time  (to  be  agreed  beforehand).  For  this 
reason,  this  type  of  financing  source  would  need  to  be  requested  and  managed  by  the 
Member State leading the activity, and approved and closely supervised by the EU Customs 
Administration. 

242 

 
 
5.6.8 Funding models 

The funding models of policy option 4 would be the same as covered in policy option 3, with 
the addition of PPPs (i.e. the possibility for economic operators to contribute).  

Grants,  procurement  and  reimbursement  would  be  used  in  the  same  manner  as  they  are 
used  in  policy  option  3.  Awards  would  be  given  mainly  for  soft  collaboration  activities 
(linked  to  innovation for  example) to  stakeholders  who  present  research  projects  that  are 
deemed  of  interest  by  the  EU  Customs  Administration.  The  award  does  not  require  any 
progress reporting from the successful stakeholder, but it calls for a sharing of knowledge at 
the end of the research period. 

As  for  PPPs,  this  would  be  the  funding  model  of  choice  for  the  contribution  of  economic 
operators.  Building  on  the  explanation  under  the  previous  section  on  budgetary  sources, 
after  approval  of  the  EU  Customs  Administration,  participating  countries  would  take  on 
board private bodies to work together on a subject and contribute to its financing. Once the 
final  result  of  the  project  becomes  available  (e.g.  a  new  IT  system  is  developed),  the 
economic  operators  involved  would  have  the  right  to  use  it  (under  certain  conditions 
previously agreed upon), as would the participating countries. Reporting obligations would 
depend  on  the  managing  participating  country,  and  would  include  an  additional  layer 
imposed  by  the  EU  Customs  Administration  for  the  proper  supervision  and  to  ensure  a 
balanced  funding  between  private  contributions  and  contribution  coming  from  the 
programme directly. 

5.6.9 Budgetary needs and allocation  

Policy option 4 has at its core the principles of flexibility, enhanced strategic oversight, and 
the  concept  of  doing  (more)  together  following  a  centralised  approach  (respecting  the 
subsidiarity  principle).  It  introduces  a  new  form  of  governance,  where  the  EU  Customs 
Administration would be in charge of the programme management and the coordination of 
the  activities  (soft  collaboration,  operational  cooperation  and  enhanced  operational 
cooperation).  The  EU  Customs  Administration  will  have  different  units  in  charge  of  the 
management  of  the  activities  (e.g.  Human  Competency  department  and  IT  department  in 
charge of the IT systems, including the development of the currently national components 
development,  operation  and  maintenance  of  the  national  components  of  the  EIS  related 
systems).  Work  and  collaboration  are  characterised  by  a  high  level  of  automation,  which 
eases  the  relationships  and  communications  within  the  EU  Customs  Administration;  and 
between  the  EU  Customs  Administration  on  the  one  hand  and  other  Member  State 
administrations, third country customs administrations and other stakeholders at the other 
hand. In addition to the creation of the EU Customs Administration, this option includes new 
activity  tools  (such  as  the  sandbox),  maintains  a  strong  emphasis  on  enhanced 
administrative  cooperation  (with  expert  teams  and  purpose-based  projects)  and  funding 
models  introduced  with  previous  options  (such  as  the  awards).  The  quantification  in 
monetary terms of the budgetary needs for many of the elements introduced in this policy 

243 

 
 
option  would  thus  present  a  number  of  uncertainties,  concerting  the  actual  take-up  and 
funding needs.  

The estimation of the budgetary needs for policy option 4 would therefore have to reflect 
such  uncertainties,  and  would  range  from  EUR  1888.2  million  (corresponding  to  EUR 
269.7million  per  year  on  average)  to  EUR  2 332.8  million  (corresponding  to  EUR  333.3 
million per year on average). As for policy option 3, the uncertainties are expressed via the 
creation  of  scenarios,  which  reflect  more  or  less  optimistic  estimations  on  the  take-up  of 
the new activities and funding models, and on the IT-related tasks performed at central or 
national  level.  The  ‘minimum’  scenario  includes  assumptions  on  lower  take-up  of  new 
activities and funding models such as the sandbox and the awards, and on less centralisation 
of development and operation of national component of the EIS-related IT systems via the 
overarching  entity,  which  in  turn  are  likely  to  generate  lower  economies  of  scale.  The 
‘maximum’ scenario on the contrary is based on assumptions of more take-up of activities 
centralisation  and  of  more  development  and  operation  of  national  component  of  the  EIS-
related  IT  systems  by  the  overarching  entity,  which  in  turn  is  likely  to  generate  higher 
economies of  scale.  Finally, the  ‘central’  scenario  is  somewhat  in the  middle.  As  a  general 
remark,  the  central  scenario  is  considered  the  main  one;  the  minimum  and  maximum 
scenarios are described when relevant.   

The  table  below  provides  an  overview  of  the  budgetary  needs  estimated  for  this  policy 
option under the different scenarios.  

Table 20 – Scenarios for budgetary needs under policy option 4  

Overall budget (EUR million) 
Average per year (EUR million) 
w.r.t. current programme  
(current prices) 
w.r.t. current programme  
(constant prices) 

Source: Deloitte 

Minimum scenario  Central scenario  Maximum scenario 

1 888.2 
269.7 

+261% 

+241% 

2 119.6 
302.8 

+305% 

+282% 

2 332.8 
333.3 

+346% 

+321% 

All  the  elements  of  the  policy  option  are  included  in  the  estimated  budget  for  the  future 
Customs programme presented below (for the central scenario): 

Figure 42 – Estimated budget for Customs programme under policy option 4 (EUR million)  

244 

 
 
 
Source: Deloitte  

The  overall  budget  estimated  for  this  policy  option  under  the  central  scenario  is  of  EUR 
2 111.9 million over 7 years, which correspond approximately to EUR 301.7 million per year. 
This budget represents an increase with respect to the previous option (61% increase), and 
a whole new order of magnitude for the programme with respect to the current programme 
and the baseline scenario (+304% and +375% respectively).  

Below are described the different budget elements.  

As for the previous policy options, and for the current Customs2020 programme, IT capacity 
building  represents  by  far  the  largest  share  of  budget  (81.1%),  corresponding  to  EUR 
1719.2million, i.e. EUR 245.6million per year on average.  

  Such  budget  would  support  four  main  strands  of  IT  capacity  building  activities, 
similar to policy option 2 and policy option 3 activities (i.e. UCC systems, ICS2, new 
non-UCC systems and IT innovation and contingency). The budget dedicated to these 
activities  would  amount  to  about  EUR  513.7  million,  EUR  341.8  million,  EUR  179.2 
million  and  EUR  63.5  million  respectively,  which  means  it  does  not  differ  notably 
compared to the Continuity “plus” scenario in absolute terms. The endowment for IT 
innovation  and  contingency  would  be  the  one  with  the  larger  increase  (+5% 
compared  to  the  previous  policy  option),  in  order  to  support  and  integrate 
innovation in customs and the new actions in the field of crisis management.  

  The  development  of  the  national  components  for  the  EIS-related  IT  systems  would 
represent  not  only  a  major  organisational  change  linked  to  the  changes  in 
governance  and  the  creation  of  the  EU  Customs  Administration),  but  also  a  major 
budget item under this scenario  ,  as  well  as  the  one  with the  highest  uncertainties 
for quantification. Indeed, while the budgetary needs for the EU component of the IT 
systems have been quantified already for policy option 2, the same exercise has not 
been  done  for  the  national  components.  The  European  Commission  has  estimated 
that each EUR spent at EU level for the development of a common IT infrastructure 
equals  EUR  5  invested  at  national  level.  However,  economic  theory  suggests  that 
centralisation  of  activities  is  likely  to  produce  an  overall  reduction  in  costs,  due  to 

245 

24,2%16,1%8,5%3,0%29,3%3,5%3,7%; J.A. -Enhanced cooperation0,4%; JA -Sandbox1,4%; Competency building0,1%; General support8,0%; EU Customs Administration0500100015002000IT - UCC (no ICS2)IT - UCC (ICS2)IT - No UCC (new projects)IT - Innovation & ContingencyIT - national componentJ.A. - All but expert teamsJ.A. - Enhanced cooperationJA - SandboxJA - Vision groupCompetency buildingGeneral supportEU Customs Administration 
 
 
economies  of  scale  and  learning  curve  effects,  partially  counterbalanced  by  lower 
flexibility,  among  others,  which  provides  the  argument  for  maintaining  some 
activities at local level. The quantification of such effects in a domain as vast as that 
of IT systems related to the EIS is clearly very challenging, also considering the time 
horizon  for  the  analysis  and  the  hypotheses  related  to  technological  evolution  and 
needs for IT systems related to the EIS for customs matters. Therefore, as for other 
budgetary  elements  presenting  uncertainties,  three  possible  scenarios  were 
elaborated, based on different assumptions on the degree of central management of 
national  components  and  on  the  degree  of  economies  of  scale  and  learning  curve 
effect  (and  the  related  reduction  of  flexibility  and  adaptability) 303.  The  three 
scenarios are represented in the table below.  

303 McLinden  G,  Widdowson  D.  and  Doyle  T.  (2010)  Border  Management  Modernization,  World  Bank 
Publication 

246 

 
 
 
 
                                                      
Table 21 – Budgetary needs for the development of EIS national components in policy option 4 

Budgetary needs EU IT 
components  
(EUR million) 
Budgetary needs 
national components 
(EUR million) 
Degree of central 
management of 
national components 
Economies of scale 
&learning curve effect 
Budgetary needs 
national IT components  
(EUR million) 

w.r.t. programme 
budget 

Source: Deloitte  

Minimum scenario 

Central scenario 

Maximum scenario 

1 034.8 

1 034.8 

1 034.8 

5 174.1 

5 174.1 

5 174.1 

50% 

15% 

439.8 

23.3% 

75% 

20% 

620.9 

29.3% 

100% 

25% 

776.1 

33.3% 

As  mentioned  earlier,  the  three  scenarios  are  based  on  different  assumptions  on  the 
centralisation  of  IT-related  tasks  for  national  components  of  IT  systems  linked  to  the  EIS, 
and on different levels of economies of scale and learning curve effect. 

The  three  scenarios  developed  can  be  related  to  different  assumptions  on  the  share  of 
(new) national components of EIS-related IT systems developed and operated by the future 
programme, where it could be considered more effective for some IT systems to leave larger 
share of the development and operation tasks to participating countries, even if it translates 
into lower economies of scale.  

The minimum scenario considers that a limited number of tasks related to the development 
and operation of national components linked to the EIS will be performed in a centralised 
manner,  or  a  limited  number  of  national  IT  components  will  be  developed/operated 
centrally  via  the  EU  Customs  Administration  and  its  IT  unit.  In  this  way,  it  is  expected  to 
achieve less economies of scale, but to have more flexibility. On the contrary, the maximum 
scenario considers that a larger share (potentially even up to 100%) of tasks related to the 
development  and  operation  of  national  components  linked  to  the  EIS  will  be  performed 
directly in a centralised manner, and/or that a large number of national IT components will 
be developed/operated centrally via the EU Customs Administration. Under this scenario it 
is thus expected to have more economies of scale, reducing flexibility and adaptability.   

Finally,  it  has  to  be  recalled  that  these  estimations  were  carried  out  based  on  the  IT 
development plans and estimates available at the time (‘Customs Value Stack304’). However, 
new  needs  could  emerge  over  time,  related  to  major  technological  developments  and/or 

304 A more detailed explanation of the ‘Customs Value Stack’ and its components can be consulted in the state 
of play of the IT capacity building (cf. chapter 2). 

247 

 
 
 
                                                      
new  EU  legislation  which  were  not  included  in  such  plan.  The  budget  allocation  for  ‘IT 
innovation  and  contingency’  should  respond  to  those  needs.  However,  should  major  IT 
developments be needed, it is possible that this allocation would not be sufficient (both for 
the  EU  and  the  national  components).  Therefore,  the  parameters  used  to  express  the 
degree  of  central  management  of  national  components  in  the  three  scenarios  above  (i.e. 
from 50% to 100%) and the related level of economies of scale (i.e. from 15%  to 25%) are 
purely  speculative.  Refinements  would  be  needed  in the future,  when  the  future  IT  needs 
will be clearer.  

Overall, all forms of enhanced  cooperation  and joint  actions would represent 9.3% of the 
total budget of the programme, or EUR 198.3 million, corresponding to approximately EUR 
28.3 million per year on average. The budgetary needs for enhanced cooperation and joint 
actions under policy option 4 could vary, depending on take-up and costs of the new activity 
tool introduced under this policy option (such as the sandbox), for which different scenarios 
were  elaborated  below.  Overall,  budgetary  needs  for  enhanced  cooperation  and  joint 
actions  under  this  policy  option  are  expected  to  range  from  EUR  175.9  million  (i.e.  about 
EUR  25.1  million  per  year  on  average)  to  EUR  128.4  million  (i.e.  32.6  million  per  year  on 
average),  representing  from  9.3%  to  9.8%  of  the  overall  budget  for  the  programme. 
Enhanced  cooperation  and  joint  actions  would  have  lower  budgetary  needs  under  policy 
option  4  as  compared  to  policy  option  3.  It  is  expected  that  the  central  EU  Customs 
Administration will enforce common ways of working and take over certain national tasks. 
Expert teams and purpose-based projects could play a role similar to current internal expert 
groups at national administration level.  

In more details, the budget for joint actions would encompass the following: 

  Joint  actions  except  expert  team  would  require  EUR  74.9  million  (i.e.  EUR  10.7  per 
year  on  average,  representing  about  3.5%  of  the  total  programme  budget,  and  15% 
reduction  compared  with  policy  option  3).  As  mentioned  earlier,  beside  absorption 
capacity  in  participating  countries,  it  is  expected  a  larger  uniformity  in  the  ways  of 
working of national administrations under this option, requiring less joint actions.  
  Enhanced cooperation activities (expert teams and purpose-based projects, including 
also  joint  operations)  would  require  EUR  79.3  million  (i.e.  approximately  EUR  11.3 
million per year on average, representing about 3.7% of the total programme budget). 
Policy option 4 maintains a strong emphasis on enhanced cooperation. However, as an 
effect  of  the  new  governance  model  and  of  the  higher  centralisation  of  many  tasks 
compared to policy option 3, the difference between expert teams and purpose-based 
projects would be reduced. The national co-funding for purpose-based project would 
not  be  required  anymore,  as  the  vision  for  the  policy  option  based  the  concept  of 
doing  (more)  together would  not be  compatible  with nation  co-funding.  Overall,  the 
estimated budgetary needs for enhanced cooperation activities under policy option 4 
would  be  similar  to  the  aggregate  budget  for  expert  teams  and  purpose-based 
projects under policy option 3.  

  Under this policy  option,  ‘sandboxes’  are  introduced  as  a  way  to  support  innovation 
and  to  induce  customs  administrations  and  other  stakeholders  (such  as  interested 

248 

 
 
economic operators) to develop new and creative approaches to emerging challenges 
in  an  environment  similar  to  real  one.  As  this  is  a  new  line  of  activity  for  the 
programme  and  a  different  approach  for  many  of  the  users,  it  is  unsure  how  far  it 
would  be  possible  to  go  in  its  implementation.  Furthermore,  experience  at  EU  level 
with  this  type  of  approach  is  fairly  limited  as  well305.  Different  scenarios  have 
therefore  been  developed,  based  on  more  or  less  ambitious  assumptions  on  the 
number of sandboxes launched on a yearly basis (on average) and on the average cost 
of each sandbox. As in previous case, the minimum scenario assumes a limited take-up 
and lower cost of  this tool, while the maximum scenario is based on assumptions of 
higher take-up and higher costs. The budgetary scenarios estimated are presented in 
the table below:  

Table 22 – Budgetary needs for ‘sandboxes’ under policy option 4 

Minimum scenario  Central scenario  Maximum scenario 

No per year 
Average individual cost 
(EUR thousands) 
Cost per year  
(EUR million) 
Budgetary needs for he 
programme  
(EUR million) 
% of overall programme 
budget. 
Source: Deloitte  

10 

50 

0.5 

3.5 

15 

80 

1.2 

8.4 

0.2% 

0.4% 

20 

100 

2.0 

14.0 

0.7% 

  Supporting the functioning and the activities of the vision group would require about 
EUR  7.7  million  overall,  corresponding  to  EUR  1.1  million  per  year  on  average  (i.e. 
about 0.8% of the total budget programme306), same as in policy option 3. As in policy 
option 3, the vision group would be responsible for the management of the awards. 
The  definition  of  the  budgetary  needs  for  the  awards  would  rest  on  the  same 
uncertainties on the take-up and amount of such financial instrument (for these, the 
same assumptions and parameters described for policy option 3 were adopted307).  

Human  capacity  building  activities  (academy  with  all  its  roles,  initial  and  professional 
training,  etc.308)  would  represent  a  limited  share  of  the  overall  budget  of  the  programme 

305 The  regulatory  sandbox  implemented  in  the  Fintech  sector  represents  probably  the  most  pertinent 
example. 
Authority: 
https://www.eba.europa.eu/documents/10180/807776/BSG+Paper+on+Regulatory+Sandboxes_20+July+2017
.pdf  

European 

proposal 

Banking 

from 

See 

the 

a 

306 A  more  detailed  description  of  the  vision  group  and  its  main  cost  components  is  provided  under  policy 
option 3 (section5.5.9).  

307 A more detailed description of the awards and the scenarios and underlying assumptions used is provided 
under policy option 3 (section 5.5.9). 

308 A description of the Customs Academy is provided in section 5.6.3 on governance.  

249 

 
 
 
                                                      
(1.4%),  requiring  EUR  29.1  million,  corresponding  to  EUR  2.2  million  per  year  on  average. 
While  still  a  very  limited  share  of  the  overall  budget  of  the  programme,  the  funding 
presented for these activities would represent a 90% increase compared to policy option 3 
and  an  entire  new  strand  of  activity  compared  to  the  baseline  scenario.  This  significant 
increase is made necessary by the training activities needed to support the new governance 
model and the implementation of the new ways of working determined by the EU Customs 
Administration.  

Policy option 4 is set in a world where the EU Customs Administration will take over some 
of  the  tasks  currently  performed  by  national  customs  administrations.  The  EU  Customs 
Administration would be in charge of the programme management and the coordination of 
the activities. This implies that this entity will deal with the daily tasks related to running the 
programme,  such  as  the  study  and  approval  of  proposals,  monitoring,  communicating, 
disseminating,  etc.  The  EU  Customs  Administration  would  also  be  in  charge  of  the 
programme’s operational activities (i.e. Studies, Deployment, operation and maintenance of 
IT  systems  and  Communication  projects),  its  dedicated  IT  department  will  be  in  charge  of 
the  IT  systems,  while  the  Human  Competency  department  will  implement  the  Customs 
Academy, for instance.  

The  definition  of  the  exact  legal  and  organisational  structure  of  the  EU  Customs 
Administration  is  outside  the  scope  of  this  study,  and  would  require  further  analysis.  It 
would  for  instance  be  possible  to  look  at  existing  EU  agencies  (both  Executive  and 
Implementation  ones)  to  define  possible  dimensions  and  budgetary  needs  for  such 
organisation to function. Reference can be made to existing agencies that carry out activities 
related  (to  different  extent)  to  those  of  customs  administrations  and  of  this  future  EU 
Customs Administration body, such as FRONTEX, eu-LISA, EMSA, Europol. Considering their 
staff (ranging from 137 of eu-LISA to 900 of Europol) and the budgets (ranging from EUR 55 
million to EUR 250 million), it is possible to envisage a basic structure for the EU Customs 
Administration. In addition, reference can be made to the Structural Reform Support Service 
(SRSS)309,  for  different  reasons:  it  provides  and  coordinates  technical  support  to  Member 
States  in  a  number  of  areas  (including  governance  and  public  administrative,  revenue 
administration  and  public  financial  management)  via  the  Structural  Reform  Support 
Programme  (SRSP),  while  being  part  of  the  European  Commission’s  services.  Therefore,  it 
could  provide  a  relevant  example  for  EU  Customs  Administration.  However,  as  the  EU 
Customs  Administration  would  represent  a  new  structure  in  the  programme,  it  presents 
some uncertainties for the quantification of the budgetary needs.  

Different  scenarios  have  therefore  been  developed,  based  on  more  or  less  ambitious 
assumptions on the organisational needs for the overarching entity. As in previous case, the 
minimum  scenario  assumes  lower  staff  needs  (i.e.  about  250  FTEs),  while  the  maximum 
scenario is based on assumptions of higher organisational needs (i.e. about 350 FTEs). The 
central  scenario  is  based  on  average  assumptions  on  the  organisational  needs  for  the  EU 

309 See: https://ec.europa.eu/info/mission-statement-structural-reform-support-service_en  

250 

 
 
                                                      
Customs  Administration  (about  300  FTEs)310.  In  all  scenarios,  organisational  costs  include 
logistics (to cover the costs for travels and meetings, which are expected to be limited) and 
for fees of external experts required ad-hoc).  

The table below provides an overview of the scenarios defined for  the budgetary needs of 
the overarching entity.  

Table 23 – Budgetary needs for the overarching entity 

Minimum scenario 

Central scenario  Maximum scenario 

142.7 

6.7% 

170.6 

8.0% 

198.5 

9.4% 

Organisational costs  
(EUR million) 
% of overall programme 
budget. 

Source: Deloitte  

Finally,  this  option  would  allow  still  for  a  (limited)  general  support  line  of  EUR  2.3  million 
(EUR  0.3  million  per  year  on  average),  representing  0.1%  of  the  overall  budget  of  the 
programme, and a 10% increase with respect to the previous policy option.  

5.7 Overview of the policy options 

The table below provides an overview summarising the highlights of each policy option and 
the variations between them. Please note that this is a very concise summary and as such 
should  be  used  to  accompany  the  reading  and  comprehension  of  the  previous  sections 
under  this  chapter,  not  instead  of.  Not  all  information  is  captured  in  the  table  as  it  is  not 
meant  to  be  comprehensive,  but  to  give  a  concise  overview  to  the  reader  of  this  report. 
Moreover, each policy option includes an illustration of its components also with this same 
aim, but should be regarded equally as complementary to the text and not in substitution of 
it. 

310 As a reference, the SRSS currently has about 160 staff, based in Brussels and in some Member States (see: 
https://ec.europa.eu/European Commission/sites/beta-political/files/srss-factsheet_en.pdf). It was considered 
that the overarching entity would likely require less staff, considering the different roles and responsibilities, 
as well as its action limited to tax matters.  

251 

 
 
 
 
                                                      
Baseline scenario 

Policy option 1 –  
Constrained scenario 

Policy option 2 –  
Continuity “plus” scenario 

Policy option 3 –  
Voluntary Structural Cooperation 

Policy option 4 –  
Integration 

Table 24 – Summary of policy options and their variations 

  Functioning  and  modernisation  of  the 

customs union 

  Cooperation  between  the  participating 

  Supporting  a 

restricted  number  of 
functions of the customs administrations’: 
the protection of the financial interest 

As the Baseline  

As PO2  

As PO3 

PLUS  -  Member  States  become  a  modern 
administration  that  anticipates  change  and 
has  the  flexibility  to  react  when  facing 
urgent customs issues  

PLUS  -  Prepare  the  customs  union  for  the 
future and enable it to address any possible 
crisis 

PLUS  -  The  EU's  position  in  the  global 
customs sphere is strengthened 

Building 
Blocks 

Vision 

countries 

Primary: 
  EU Member States 

Geographical 
focus 

Secondary: 
  Participating  countries  from  candidate 

and potential candidate countries 
  EU Neighbourhood Policy countries 

Activities 

 Scope of collaboration: 
  Soft collaboration; 
  Operational collaboration; 
  Enhanced operational cooperation. 

 Toolbox: 

  Workshops (including seminars); 
  Project groups; 
  Working visits; 
  Trainings; 
  Studies  
  External providers; 
  Communication projects; 
  Technology; 
  Expert teams. 

–  Activities  are  undertaken  with 
frequency due to the budget constraints. 

less 

At their discretion:  
  Customs  administrations  of  participating 

countries; 

Participants in 
the activities  

Ad-hoc: 
  Other EU public administrations,  
  Other customs administrations,  
  Economic operators, and  
  Academia. 

MINUS - The latter group would have some 
restraints due to the decrease in budget in 

311 Subject to a financial contribution and when possible. 

As the Baseline  

As the Baseline  

As PO2  

As PO3 

MINUS - Secondary: 
  Participating  countries  from  candidate 

and potential candidate countries 
  EU Neighbourhood Policy countries 

PLUS - Secondary: 
  other  EFTA  countries 
collaboration agreement 

subject 

to  a 

PLUS - Tertiary on a case by case basis311: 
  Additional  key  trade  partners  (e.g.  USA, 

Japan, China)  

PLUS  -  Tertiary  but  can  potentially  join  the 
secondary group subject to the signature of 
a collaboration agreement: 
  WTO/WCO countries  

 Maintain  the  same  activities  as  in  the 
baseline,  although  their 
is 
reduced to reach a  30%  saving (evenly or 
some more than others, depending on the 
participants’ 
and 
priority/criticalness of the activity);  

preference 

frequency 

As the Baseline 

As PO2 

As PO3 

PLUS  -  Development  of  the  enhanced 
operational  cooperation  approach  through 
an  increase  of  expert  team-like  approach 
(expert teams and purpose-based projects) 

PLUS 
-  Evolution  of  purposed-based 
approach  for  those  who  want  to  do  more, 
so  they  can  co-finance  larger  and  longer 
projects. 

MINUS  -  No  co-financed  purpose-based 
projects 

PLUS -  Sandbox 

 IT  2017  legacy  systems  are  kept  running 

PLUS - Toolbox: 

but without updates. 

 

Joint operations 

PLUS - Toolbox: 

  Vision group 

As the Baseline  

As the Baseline 

As PO2 

MINUS - Ad-hoc: 
  Other EU public administrations,  
  Other non-EU customs administrations,  
  Economic operators, and  
  Academia. 

PLUS - No restraints to participation 

PLUS - Ad-hoc: 
  Other non-EU public administration 
  Interest 

groups 

civil 

and 

society 

organisations 

  International organisations 

As PO3 

PLUS - Ad-hoc: 
  EU agencies 

252 

 
 
                                                      
 
 
 
 
 
comparison to today. 

Mainly: 
  Customs 

administrations 

from 

participating countries 

Occasionally: 
  Other stakeholders 

  Fully  centralised  approach  around  the 

European Commission 

Direct 
beneficiaries 
(output) 

Governance 

Mainly: 
  EU budget 

Budgetary 
sources  

On an activity base: 
  Contributions  from  non-EU  participating 

countries 

As the Baseline  

MINUS - Occasionally: 

Other stakeholders 

As the Baseline  

As PO2 

As PO3 

PLUS - The emphasis on other stakeholders 
increases due to the “client” approach (part 
of the modern administration vision) 

As the Baseline 

As the Baseline 

PLUS  -  governance  dependant  on  other 
services  and  directorate  generals  from  the 
European 
to 
Commission 
dependencies  on    other  programmes  and 
initiatives) 

(due 

As the Baseline  

As the Baseline  

MINUS - Occasionally: 
  Contributions  from  non-EU  participating 

countries 

  Hybrid: 

  Programme 
Commission 

governance: 

European 

  Programme  management:  European 
Commission  (DG  TAXUD)  assisted  by 
Programme Steering Group for purpose-
based projects and activities 

  Activity  and  purpose  based  project 
management:  participating  countries, 
owner of the project 

As PO3 
  The  Programme  Steering  Group  becomes 

an EU Customs Administration 

  The  programme  operational  activity 
management  goes  to  the  EU  Customs 
Administration 

PLUS  -  The  EU  Customs  Administration 
gains a role of further guidance to approach 
activities 

  Programme 

management: 
Commission 

As PO2 

operational 
the 

activity 
European 

PLUS  - 
Customs Administration 

IT  department  within  the  EU 

As PO3 

PLUS - Member States contribute more 

PLUS - Economic operators contribute 

PLUS - Somewhat: 
  EU 

dedicated 

budget 
programmes  and 
Customs programme will be dependent 

other 
to 
initiatives  on  which 

As the Baseline  

As the Baseline  

As PO2 

As PO3 

Funding 
models 

  Grants 
  Procurement 
  Reimbursement 

(for 
participating countries) 

experts 

and 

MINUS - Reimbursement (for experts) 

  Reduction of EU budget (-15%) 
  Write  off  of  current  investments  in  IT 

  Reduction of EU budget (-30%); 
  Write  off  of  current  investments  in  IT 

  Increase in EU budget (+136%) 
  Support to innovation and mutual learning 

development (EUR 61 million) 

development (EUR 165 million) 

Budgetary 
needs 

PLUS - Occasionally: 
  Awards 
  Increase in EU budget (+137%)  
  National  co-funding  (30%)  of  purpose-
based  projects  (EUR  13.6  million  from 
participating countries)  

  Limited costs for organisational  change in 
Member  States  to  create  and  run  the 
Programme  Steering  Group 
(EUR  2.1 
million) 

PLUS - Occasionally: 
   PPPs 
  Large Increase in EU budget (+305%)  
  Economies  of  scale  and  learning  curve 
centralised 
IT 

expected 

national 

from 

from 

effect 
development 
components 

  Large  costs  for  organisational  change  in 
Member  States  to  create  and  run  the  EU 
Customs  Administration  and  adapt  ways 
of working 

Source: 
Deloitt
e 

253 

 
 
 
5.8 Merging Fiscalis and Customs programmes 

The  merger  of  both  Fiscalis  and  Customs  programmes  has  already been  considered  in  the 
past when the European Commission proposed the creation of FISCUS in November 2011312. 
FISCUS would have been the successor to the Customs 2013 and Fiscalis 2013 programmes 
supporting  “cooperation  between  the  customs  and  tax  administrations  and  other  parties 
through  networking  and  knowledge-sharing,  and  by  funding  state  of  the  art  I.T.”313.  The 
Council  and  the  Parliament,  however,  estimated  that  there  should  be  two  separate  legal 
instruments. 

The study team has thoroughly assessed the pros and cons of this option before deciding to 
disregard this possibility.  

On the one hand, merging the two programmes might present some  benefits. Having one 
programme would increase the synergies between the relevant objectives while taking into 
account the clear parallels between the two policy areas. In addition, a unique programme 
for both tax and customs administrations would foster the cooperation between these two 
bodies at national level and EU level. Such programme would better respond to the need of 
cross-border  cooperation  between  the  two  different  bodies.  National  customs  and  tax 
administrations  could  thus  cooperate  and  participate  in  different  activities  together.  This 
would  lead  to  efficiency  gains,  economies  of  scale,  and  the  development  of  common 
approaches. Therefore, a better functioning and coordination of the Internal Market could 
be facilitated.  

Nonetheless,  on  the  other  hand,  there  are  five  main  reasons  that  led  the  study  team  to 
decide not to consider the merger as a relevant policy option to assess. 

Firstly,  the  two  programmes  support  the  implementation  of  different  policies  having 
different legal Treaty bases. Customs policy is an area of exclusive EU competence, where 
the  ultimate  objective  is  that  customs  administrations  act  as  if  they  were  one.  Subject  to 
unanimity  rules,  taxation  policy  remains  an  area  of  national  sovereignty  and  competence 
where the EU is mostly entitled to take measures for ensuring the proper functioning of the 
Internal  Market.  This  distinction  is  reflected  at  the  level  of  the  programmes:  customs  is 
based  on  Art.  33  TFUE  and  aims  at  supporting  the  functioning  and  modernisation  of  the 
customs union, while Fiscalis is based on Art. 114 and 197 TFUE and aims at improving the 
proper functioning of the taxation systems in the Internal Market.  

312 European  Commission,  Proposal  for  a  Regulation  of  the  European  Parliament  and  of  the  Council 
establishing an action programme for customs and taxation in the European Union for the period 2014-2020 
(FISCUS)  and  repealing  Decisions  N°1482/2007/EC  and  N°624/2007/EC,  COM(2011)706  final,  http://eur-
lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:52011PC0706&from=EN 

313 European  Commission,  Press  Release  “Q&A:  FISCUS  programme  for  taxation  and  customs  2014-20”,  9 
November 2011, MEMO/11/167, http://europa.eu/rapid/press-release_MEMO-11-767_en.htm?locale=en 

254 

 
 
 
 
                                                      
Secondly, the differences in underlying policies of the  two programmes are translated in 
different objectives.  

  As  far  as  the  current  general  objectives  are  concerned,  the  programmes  differ 
significantly. The Customs programme is a supporting tool that aims at contributing 
to  ensure  that  customs  administrations  act  as  one,  thus  contributing  to  the 
achievement  of  the  full  potential  of  the  customs  union,  while  Fiscalis  targets  the 
proper  functioning  of  the  taxation  systems  in  the  Internal  Market  by  enhancing 
cooperation  between participating  countries. The  ambition  of both  programmes to 
this respect differs substantially. Merging those together in common objectives will 
raise  problems  and  not  go  without  watering  down  the  ambition  level  of  the  policy 
areas covered. 

  The  current  specific  objectives  are  also  different.  Customs  aims  at  contributing  to 
protect  the  financial  and  economic  interests  of  the  Union  and  Member  States,  to 
increase safety and security, to protect citizens and the environment, to improve the 
administrative  capacity  of  customs  administrations,  and  to  strengthen  the 
competitiveness  of  European  businesses  (as  stated  in  Art.  5  of  the  Customs  2020 
Regulation). On the other hand, Fiscalis contributes to the fight against tax fraud, tax 
evasion and aggressive tax planning and the implementation of Union law.  

  The  operational  objectives  of  the  two  programmes  are  similar  to  some  extent  as 
they both aim to develop, improve, operate and support the EIS; reinforce the skills 
and competences of tax/customs officials; to identify, develop, share and apply best 
working practices and administrative procedures. 

As far as the future programmes are concerned, their general and operational objectives as 
identified in our problem trees differ to some extent:  

  Regarding the general objectives, the future Customs programme would still aiming 
to contribute achieving the full potential of the  customs union, while Fiscalis would 
contribute to the adequate functioning of tax systems in the EU. 

  The future programmes would share similar specific objectives, as they would each 
of them aim to contribute to equal capacity and cooperation between customs and 
tax administration respectively. Nevertheless, the future Customs programme would 
also target a balanced interpretation and implementation, a strategic objective that 
would  be  missing  on  Fiscalis’  side  as  it  would  not  target  the  uniformity  of  tax 
legislation. 

  As  illustrated  in  the  objective  trees,  the  two  programmes  share  to  some  extent 
similar  operational  objectives.  However,  it  is  noteworthy  to  mention  that  the 
Customs  programme 
coherent  application  and  effective 
implementation  of  Union  law  and  policy  in  the  field  of  customs.  This  operational 
objective  of  Customs  aims  to  create  the  same  customs  experience  across  the 

supports 

the 

255 

 
 
different participating countries. The equivalent operational objective in Fiscalis does 
not go that far, as this programme does not seek the uniformity of tax legislation314.  

Thirdly, the geographical focus of the two programmes is slightly different. Although the 
two  programmes  are  open  to  the  participation  of  acceding  and  candidate  and  potential 
candidate  countries,  and  partner  countries  of  the  ENP,  there  is  a  difference  to  take  into 
account.  Fiscalis  is  indeed  open  to  those  countries,  but  the  participation  of  the  last  group 
(i.e.  partner  countries  of  the  ENP)  is  restricted  to  those  activities  under  the  programme 
aiming at fighting tax fraud and tax evasion, and addressing aggressive tax planning.  

Fourthly, the  merger of the two programmes would only bring limited benefits. The two 
programmes  already  have  a  common  management  and  shared  processes,  put  in  place  by 
the same unit within DG TAXUD. In addition, the two programmes mostly present the same 
type  of  eligible  actions,  which  facilitates  considerably  their  management  both  at  EU  and 
often  also  at  national  level  as  in  some  Member  States,  such  as  Hungary,  the  two 
programmes are managed by the same entity. This mirroring of actions also facilitates cross-
fertilisation  between  customs  and  tax  administrations  already  today.  Therefore,  as  the 
organisational and management synergies already exist between the two programmes, it is 
unlikely that the merger would bring significant economies of scale from this point of view.  

Fifthly,  although  a  unique  programme  could  be  perceived  as  a  promising  tool  to  improve 
the cooperation between tax and customs administrations, it could also neglect the specific 
needs  of  each  body.  During  our  fieldwork  in  Slovakia,  for  example,  tax  administrations 
explained to us that the difference between the needs of tax and customs administrations is 
actually the main reason against merging the programmes. In addition, a single programme 
could also hamper the visibility of one body compared to the other. It could be possible that 
in some cases one of the two is considered more significant than the other according to the 
strategic priorities of the country or due to pure outnumbering of one category of officials 
compared to the other. This scenario is currently avoided as the two programmes are set up 
to respond to the specific needs of each body, and ensure their visibility. 

It  is  noteworthy  to  mention  that  these  reasons,  when  considered  separately,  are  not 
significant  enough  to  discard  the  merger  of  the  Fiscalis  and  Customs  programmes.  The 
combination of all of them indicates that the merger is not as interesting as foreseen at first 
sight. The study team therefore deemed that the  merger between the two programmes is 
neither  a desirable  nor a  politically feasible  option  for  the  future  of  the  programmes,  and 
therefore disregarded this possibility. 

314 N.B.: Notwithstanding, in some specific cases the programme may support provisions for the harmonisation 
of Member States' rules in the area of indirect taxation, and, for other taxes, directives for the approximation 
of  such  laws,  regulations  or  administrative  provisions  of  the  Member  States  that  directly  affect  the 
establishment or functioning of the internal market. 

256 

 
 
                                                      
6  Impact assessment of the policy options  

This  chapter  presents  the  assessment  of  the  policy  options  designed  for  the  next 
generation of  the  Customs  programme.  It  takes  into  consideration impacts  on the  social 
dimension, on the environment, on fundamental rights, on economy and on simplification 
and administrative burden.  

6.1 Overview of the approach 

This  chapter  focuses  on  the  assessment  of  the  impacts  of  the  policy  options  for  the  next 
generation  of  the  Customs  programme  as  described  in  chapter  5.  The  approach  in  this 
chapter  is  based  on the  Better  Regulation  Guidelines  for  Impact  Assessment,  according to 
which  (preliminary)  policy  options  should  subject  to  a  preliminary  assessment  of  their 
impacts,  in  order  to  proceed  with  further  analysis  and  evaluation.  The  evaluation  of  the 
policy options for the next generation of the Customs programme, based on the evaluation 
criteria, is presented in chapter 7.  

The table below provides the list of the criteria for the impact assessment.  

Table 25 – Criteria for the assessment of impacts of the policy options 

Qualitative assessment  

Quantitative assessment 

Social impacts  

Economic impacts 

Environmental impacts (if any)  

Impacts on fundamental rights (if any)  

Impacts  on  simplification  and 
administrative burden 

Source: Deloitte 

With  respect  to  any  legal  impacts  of  the  policy  options;  these  are  included  in  chapter  7, 
under the (legal) feasibility evaluation of the policy options (see section 7.5).  

The  qualitative  assessment  is  based  on  several  data  sources,  including  contributions  from 
stakeholders (both at EU level and in Member States) collected via interviews, inputs from 
the  European  Commission,  and  expert  assessments  of  the  study  team.  The  assessments 
derived from these sources were discussed and validated  by the Commission and relevant 
stakeholders  (e.g.  during  meetings  of  a  project  group  and  in  discussions  with  experts, 
including TAXUD s), and – where possible – checked in relevant literature.  

The quantitative  assessment focuses in particular on the economic and budgetary  impacts 
and  on  the  impacts  on  simplification  and  administrative  burden.  It  is  based  on  the 

257 

 
 
 
stakeholders’ inputs and on expert assessment, and uses the current  Customs programme 
and the baseline scenario as a basis.  

In addition to the baseline and policy options discussed in detail in chapter 5, we will also 
assess the option of discontinuing the programme (i.e. no more EU intervention). Although 
this  option  was  not  detailed  in  chapter  5,  what  would  happen  if  the  Customs  2020 
programme  would  not  be  continued,  is  something  that  needs  to  be  taken  into  account  in 
this assessment of policy options. 

6.2 Social impacts 

Introduction 

Social impacts relate to a wide range of effects, from employment to income distribution to 
impacts on third countries and international relations315. The social impacts more relevant 
to the new generation of the Customs programme are the following:  

  Governance  and  good  administration:  e.g.  effects  of  the  policy  options  on  issues  of 
governance as defined for in the Treaty, better government standards and effects on 
public bodies’ responsibilities;  

  Crime,  terrorism  and  security:  e.g.  effects  of  the  policy  options  on  improving  or 
hindering security, crime or terrorism risks, on the chances of detecting criminal acts 
in general and/or specific types of crimes (e.g. money laundering, illicit production and 
trafficking,  cybercrime,  etc.),  and,  linked  to  that,  on  the  preservation  of  cultural 
heritage  (both  for  EU  Member  States  and  third  countries),  as  cultural  goods  can  be 
illicitly imported or exported to finance crime or terrorism;  

  Education  and  training  systems:  e.g.  effects  on  access  of  customs  officials  (and 
potentially  of  officials  from  other  public  administration  bodies)  to  continuous  and 
vocational training.  

Each policy option is assessed below based on those dimensions of the social impacts.  

Assessment 

The  discontinuation  of  the  Customs  programme  for  the  future  (i.e.  no  EU  intervention) 
would  not  require  any  EU  funding  for  supporting  training  programmes  for  officials  from 
customs  administrations,  which  however  could  be  requested  from  other  EU  programmes 
(such  as  the  ESF).  This  would  likely  lead  to  a  widening  of  the  differences  among 
competences  and  skills  of  customs  officials  across  Member  States,  and  to  the 
discontinuation  de  facto  of  the  customs  competency  framework  which  would  not  evolve 
anymore; in addition,  Member States willing to adopt it would be left without guidance and 
support.  More  importantly,  the  absence  of  a  framework  actively  supporting  operational 
integration of customs would hinder the capacity to respond quickly to crime, terrorism and 

315 European Commission (2017), Better Regulation Toolbox, ibid. pp. 129-130.  

258 

 
 
                                                      
security  challenges.  Differences  in  capacities,  operations  and  processes  among  customs 
would leave the EU territory more permeable to crime and terrorism.   

The baseline scenario would undermine the full implementation of the IT systems necessary 
for  the  full  implementation  of  the  UCC,  as  it  would  only  allow  the  continuity  of  the  UCC 
2017  legacy  systems.  The  limitation  of  cooperation  activities  (from  training  to  enhanced 
cooperation)  to  the  sole  design  and  development  of  IT  would  leave  national  customs 
administration  to  design  procedures  autonomously,  thus  increasing  fragmentation.  This 
policy option has no scope for innovation (on IT or other issues), which in turn would leave 
customs  administrations  less  prepared  to  detect  early  and  react  quickly  to  evolution  in 
criminal  and  terrorist  activities  (for  instance,  new  technologies  needed  to  detect  illicit 
imports, new smuggling paths, etc.). The combination of such effects would likely leave the 
EU territory more permeable to crime and terrorism. Finally, the absence of activities (and 
related funding) for training (-95 % compared to the current programme) would reduce the 
opportunity for customs official to benefit from continuous and vocational training (as this 
activity  would  be  left  to  national  customs  administrations,  which  already  struggle  with 
resources  for  training,  as  described  in  section  3.1.1),  and  widen  the  gaps  of  customs 
competences and skills across the EU.  

Policy  option 1 (i.e. the Constrained scenario) would only support the maintenance of the 
‘legacy  2017’  systems,  undermining  even  more  than  the  baseline  scenario  the 
communication  and  data  exchange  systems  supporting  risk  management  and  profiling. 
Similarly,  the  absence  of  scope  for  innovation  would  have  the  effect  of  leaving  the  EU 
territory more permeable to crime and terrorism. Finally, the further reduction of training 
would widen even more the gaps of Customs competences and skills across the EU.  

The design of policy  option  2 (i.e. the Continuity  “plus”  scenario) would allow for the full 
implementation of the IT systems provided for by the UCC, assisting the communication and 
data  exchange  systems  supporting  risk  management  and  profiling.  These  lines  of  activity 
would support customs administration in reaching a uniform interpretation of the legislation 
an in implementing it in a consistent way. This policy option provides resources to support 
innovation (4.9% of the budget) and more joint actions and enhanced cooperation than the 
current programme (9.7%% of the programme budget). The combined effect of better data 
and  communication  and  more  support  to  innovation  would  help  customs  to  detect  and 
react  more  quickly  to  evolution  in  criminal  and  terrorist  activities  (for  instance,  new 
technologies needed to detect illicit imports, new smuggling paths, etc.), overall improving 
the  EU  capability  to  fight  against  crime  and  terrorism,  while  supporting  citizens  and 
businesses  and  EU  competitiveness.  Furthermore,  the  largest  scope  for  human  capacity 
building activities (1.2% of the programme budget) would increase customs officials’ access 
to  continuous  and  vocational  training  and  reduce  the  gaps  of  customs  competences  and 
skills across the EU.  

Policy option 3 (i.e. structural voluntary cooperation) builds on option 2, adding a broader 
vision,  encompassing  the  vision  of  levelling  up  all  participating  countries’  capacities 
(including human, IT and operational capacities and processes). The positive effects already 

259 

 
 
described for policy option 2 (on the EU capability to fight against crime and terrorism, to 
increase customs officials’ access to continuous and vocational training and reduce the gaps 
of  customs  competencies  and  skills  across  the  EU)  would  be  reinforced  by  the  largest 
budgetary  provisions  for  such  activities  and  by  the  emphasis  on  knowledge  management 
and  enhanced  cooperation.  Furthermore,  the  introduction  of  organisational  changes  (i.e. 
the  vision  group and the  Steering  Group) would  affect the  governance of  the  programme, 
providing to Member States’ customs administrations a wider role in steering the activities 
for  the  programme  and  in  the  management  of  the  programme  and  of  the  individual 
activities.  The  vision  group  in  particular  would  place  more  emphasis  on  innovation  and 
strategic thinking, providing the conditions for customs administrations to start to innovate 
together,  enhancing  the  image  building  of  the  customs  administrations  in  Member  States 
and of the c customs union more in general.  

Policy  option  4  (i.e.  the  integration  scenario)  broadens  the  vision  of  policy  option  3. 
Therefore,  the  effects  already  described  for  policy  option  3  would  be  reinforced  by  the 
largest  budgetary  provisions  for  such  activities  and  by  the  emphasis  on  knowledge 
management  and  enhanced  cooperation.  In  addition, this  policy  option  establishes the  EU 
Customs  Administration,  directly  responsible  for  some  activities  (such  as  human 
competency  building  and  IT  development,  operation  and  maintenance,  including  the 
national  components  of  the  EIS-related  IT  systems)  and  in  charge  of  the  programme 
management  and  the  coordination  of  the  activities  (soft  collaboration,  operational 
cooperation  and  enhanced  operational  cooperation).  The  more  centralised  approach  will 
hence  strengthen  the  implementation  of  the  EU  customs  policy  compared  to  the  other 
policy  options,  with  a  much  stronger  emphasis  on  shared  processes  and  procedures,  and 
consistency of customs operations across the EU. Therefore, the effects on the EU capability 
to fight against crime and terrorism and to increase customs officials’ access to continuous 
training, competences and convergence of skills across the EU would be further reinforced. 
In  addition,  the 
introduction  of  a  new  governance  model  with  the  EU  Customs 
Administration  realises  a  shift  of  competences  at  EU  level  for  customs  operations  and 
processes, modifying the role of national customs administrations. 

Conclusion 

The table below summarises the positive impacts (advantages) and remaining shortcomings 
(disadvantages) related to the implementation of one policy option versus another in a clear 
and concise manner: 

Table 26 – Expected social impacts of the Policy Options 

Advantages 

No 
Customs 

Disadvantages 
  Hindered capacity to react quickly to 

evolution in criminal and terrorist activities 
(e.g. illicit imports, smuggling, etc.);  

  Widened gap among competencies and skills 
of customs officials and very limited access to 
continuous 
customs 
training 
administration officials.  

for 

260 

 
 
 
 
Advantages 

Baseline     No 

changes 
administration;  

in 

governance 

and 

Disadvantages 
  Lower  capacity  to  react  quickly  to  evolution 

in criminal and terrorist activities;  

  Wider  gap  among  competences  and  skills  of 
to 

lower  access 

customs  officials  and 
continuous training overall;  

PO1 

PO2 

PO3 

PO4 

  Same impact as above 

  Same  impacts  as  above,  made  stronger  by 

more limited IT systems  

  Higher  capacity  to  react  quickly  to  evolution 

in criminal and terrorist activities;  

  Reduced  gap  among  competencies  and  skills 
of  customs  officials  and  lower  access  to 
continuous training overall; 

  Same impacts as above, made stronger by full 
implementation of IT systems supporting UCC 
and increased access to training;  

  Stronger  role  of  Member  States’  customs 
administrations in steering innovation and in 
managing  the  programme  and 
individual 
activities. 

  Same impacts as above, made stronger by full 
implementation of IT systems supporting UCC 
and increased access to training;  
  Stronger  role  of  programme 

in  steering 

innovation (vision group);  

  EU competences for customs operations and 
processes,  and  convergence  of  Customs 
competences and skills.  

Source: Deloitte  

6.3 Environmental impacts 

Introduction 

Environmental  impacts  relate  to  a  wide  range  of  effects, from  climate  and  efficient  use  of 
resources to waste production316. 

The  Customs  programme  has  limited  impacts  on  those  dimensions.  On  the  one  hand,  by 
supporting digitalisation of customs procedures and IT data exchange via trans-European IT 
system  and  online  collaboration  among  customs  official  and  experts,  the  programme 
supports the reduction of carbon footprint of customs-related activities. On the other hand, 
travels and meetings organised as part of the programme activities (for trainings, seminars, 
project  groups,  expert  teams  and  cooperation  activities  in  general)  increase  the  carbon 
footprint  of  the  programme  and  have  negative  effects  on  the  environment.  While 

316 European Commission (2017), Better Regulation Toolbox, ibid. p. 131.  

261 

 
 
 
 
 
 
 
                                                      
automated  data  exchange  and  online  collaboration  tools  can  reduce  the  need  for face-to-
face  meetings,  the  termination  of  physical  meetings  within  the  programme  is  neither 
expected nor advocated, as they are crucial to build networks and to establish efficient and 
effective administrative cooperation.  

Assessment 

The  discontinuation  of  the  Customs  programme  for  the  future  would  prevent  the 
development  of  more  IT  systems  for  data  exchange  and  online  collaboration  tools.  There 
would be no face-to-face meetings (and related travels) for cooperation activities under the 
programme,  which  would  have  positive  environmental  impacts.  However,  it  is  likely  that 
meetings  would  be  organised  at  any  rate,  as  part  of  bilateral  or  multi-lateral  frameworks, 
having the same if not bigger adverse effect on carbon footprint as the programme. 

The different policy options have increasingly positive environmental impacts (albeit overall 
very  limited)  the  more  IT  systems  for  data  exchange  are  implemented.  Conversely,  more 
and more frequent face-to-face meetings increase the carbon footprint of the programme 
and generate negative (if overall very limited) environmental impacts. Policy options 3 and 
4,  which  have  the  highest  degree  of  interaction,  would  therefore  have  the  largest 
environmental impact. These options are also likely to benefit from improved data exchange 
and communication channels, reducing the need for in-persons meetings.   

Conclusion 

The table below summarises the positive impacts (advantages) and remaining shortcomings 
(disadvantages) related to the implementation of one policy option versus another in a clear 
and concise manner: 

Table 27 – Expected environmental impacts of the Policy Options  

Advantages 

Disadvantages 

No 
Customs 

 No face-to-face meetings and related travels 

for cooperation activities under the 
programme.  

  Meetings  likely  to  be  organised  as  part  of 
bi-lateral  or  multi-lateral  frameworks,  with 
the  same  or  bigger  negative  impacts  on 
carbon footprint.  

Baseline 

  Decrease  of 

face-to-face  meetings  and 
related  travels  for  cooperation  activities 
under the programme.  

PO1 

  Further  decrease  of  face-to-face  meetings 
cooperation 
travels 

and 
activities under the programme.  

related 

for 

 No use or development of IT systems for 

data exchange;  

 No use of online collaboration tools.  

 Limited development of IT systems for data 

exchange;  

 Limited use of online collaboration tools for 

topics other than IT.  
 Same  as  above,  made 

larger  by  more 

limited development of IT systems.  

262 

 
 
 
Advantages 

Disadvantages 

PO2 

  Development of IT systems for data 

exchange;  

  Environment supporting the use of online 

collaboration tools.  

PO3 

  Same as above, made larger by the support 

of innovative collaboration tools and 
modalities. 

PO4 

  Same as above, made larger by the 

centralisation of many tasks (IT and beyond) 
in the EU Customs Administration. 

Source: Deloitte  

  Possible limited increase of face-to-face 

meetings and related travels for 
cooperation activities under the 
programme. 

  Same as above, possibly slightly larger.  

  Same as above, possibly slightly larger.  

6.4 Impacts on fundamental rights 

Impacts  on  fundamental  rights  relate  to  a  wide  range  of  effects,  from  general  rights  and 
dignity to freedom of expression to equality of treatment and opportunities317.  

None of the policy options defined for the future Customs programme has an impact (even 
indirect)  on  those  dimensions.  Therefore,  the  assessment  of  the  policy  options  on 
fundamental rights is not pertinent.  

6.5 Economic impacts 

Introduction  

Economic impacts relate to dimensions such as trade and investment flows, functioning of 
the  internal  market,  innovation  and  research,  public  authorities318.  The  economic  impacts 
more relevant to the new generation of the Customs programme are the following319:  

  Functioning  of  the  internal  market  and  competition:  e.g.  impact  on  the  free 

movement of goods, services, capital and workers, competitiveness of the EU;  

  Public  authorities:  e.g.  budgetary  consequences  for  public  authorities  at  different 
levels  of  government  (e.g.  EU  own  resources,  national,  regional,  local),  additional 
governmental burden, creation or restructuring of existing public authorities.  

317 European Commission (2017), Better Regulation Toolbox, ibid. pp. 132.  

318 European Commission (2017), Better Regulation Toolbox, ibid. pp. 127-128 

319 Impacts  on  operating  costs  and  conduct  of  business  and  on  administrative  burden  on  businesses  are 
assessed separately (see section Error! Reference source not found.).  

263 

 
 
 
 
 
                                                      
While  the  Customs  programme  affects  to  some  extent  each  of  those  dimensions,  the 
inherent difficulty in the assessment lays in tracing a direct link between the activities (and 
the  expenditure)  of  the  programme  and  any  change  in  those  dimensions.  As  the  Customs 
programme focuses on providing a framework for operational cooperation among Member 
States’  customs  administrations,  its  role  in  any  improvement  of  customs  operations  (e.g. 
lower  waiting  time  for  clearance  operations,  more  consistent  interpretation  of  legislation 
and therefore lower costs for businesses) is indirect only.  

As depicted by the objective three (see section 4.1), the programme specific objective is “to 
contribute to equal capacity, balanced interpretation and implementation, and cooperation 
between customs administrations in the customs union and with third countries to carry out 
effectively  and  efficiently  their  missions”.  Objectives  such  as  protection  of  the  financial 
interests  of  the  customs  union,  protection  from  illicit  trade,  proper  functioning  of  the 
Internal  Market  and  fostering  EU  competitiveness  are  general  objectives.  The  Customs 
programme  influences  the  way  customs  administrations  cooperate,  while  the  dimensions 
identified above are only indirect effects (see section 3.5.2). 

For  instance,  studies  have  estimated  a  relationship  between  trade  facilitation  measures 
(which include custom clearance, among others) and tariffs, finding that each day saved in 
shipping  time  (due  in  part  to  faster  customs  clearance)  is  worth  a  0.5  percentage  point 
reduction  of  ad  valorem  tariffs  for  an  economic  operator320”.In  other  words,  a  faster 
customs  clearance  has  the  same  impact  on  the  economic  operator’s  costs  as  a  0.5% 
reduction  of  the  ad  valorem  tariffs  imposed  on  their  goods.  However,  it  is  virtually 
impossible  to  quantify  the  role  that  Customs  programme  has  had  in  Customs  national 
administration achieving this performance objective or other Key Performance Indicators, as 
many  other  factors  are  likely  to  play  a  role  (e.g.  internal  organisational  changes, 
technological advancements, inter alia).  

Each policy option is assessed below based on those dimensions of the economic impacts. 
The  assessment  is  based  on  the  combination  of  qualitative  data  from  discussions  with  a 
project group, interviews with customs administrations and economic operators, and from 
quantitative information when available.  

Assessment 

The discontinuation of the programme would not generate any cost for the EU budget, and 
the corresponding resources could be made available for other programmes or instruments. 
The  Customs  programme  provides  an  environment  for  cooperation  and  coordination  of 
national actions, which would otherwise require a series of actions and activities on bilateral 
or multi-lateral basis, with higher costs and more coordination issues. The discontinuation of 
the programme would entail a write-off of all the funding provided so far for administrative 
cooperation in customs matters, as not only the existing IT tools would not be maintained 

320 Wilson,  Mann,  Otsuki  (2005),  (2003),  Trade  Facilitation  and  Economic  Development:  A  new  Approach  to 
Measuring the Impact, World Bank Economic Review.  

264 

 
 
                                                      
and  developments  stopped,  but  also  the  existing  frameworks  would  cease  to  exist.  This 
would  undermine  the  practical  implementation of  the  UCC  (and therefore  the  compliance 
with  legal  obligations  in  the  customs  area),  as  well  as  the  very  basis  for  administrative 
cooperation, and therefore the smooth cooperation and co-functioning of the EU customs 
administrations  in  the  customs  union.  In  turn,  this  would  negatively  impact  the  overall 
functioning  of  the  customs  union  (for  instance,  making  more  complex  international 
economic activities) and would undermine the competitive position of the EU.  

Both the baseline scenario and policy option 1 reduce the cost of the programme for the EU 
budget (-15% and -30% respectively), which however would have to face write-offs (EUR 61 
million  and  EUR  165  million  respectively)  from  investments  already  made  for  the 
implementation  of  IT  systems  during  the  current  customs  programme.  Member  States’ 
customs  administrations  would  thus  have  to  find  the  resources  to  implement  IT  solutions 
(still  necessary  for the  UCC) and develop  and/or  improve  existing  activities  and processes. 
Such decentralisation is likely to lead to overall increase in costs, as it would not be possible 
to  achieve  economies  of  scale  and  mutual  learning  would  be  severely  hindered.  Such 
negative  economic  impacts  would  be  more  severe  for  PO1  than  for  the  baseline,  but  still 
notable,  as  they  would  have  consequences  in  the  longer  term.  Once  the  environment  for 
cooperation is disrupted, reinstituting the earlier mind-set and procedures for cooperation 
would  require  effort.  The  adverse  impacts  on  the  overall  administrative  cooperation  and 
their  consequences  on  the  smooth  cooperation  and  co-functioning  of  EU  customs 
administrations  in  the  customs  union  and  in  turn  on  the  competitive  position  of  the  EU 
would remain, but at a lower level then in the scenario of discontinuation of the programme 
(the impacts under policy option 1 would be bigger than for the baseline).  

for  operational  cooperation  and  new  common  actions 

Policy  option  2  is  defined  by  a  framework  for  customs  cooperation  that  includes  the 
development of all the IT systems deemed necessary for the UCC and the functioning of the 
customs union, active support to innovation (in IT and other domains), introduction of more 
resources 
for  customs 
administrations  (such  as  joint operations)  This  leads  to  an  increase of  EU  budget  (+136%), 
with  no  write-off  of  investments  under  the  current  programme.  The  investment  in  IT 
systems for customs is expected to generate efficiency gains in the medium-term, once the 
EU  and  national  components  of  the  systems  are  deployed  and  fully  functional,  and  data 
exchange  among  customs  administration  can  take  place  in  a  secure  environment.  The 
increased  EU  budgetary  resources  for  operational  cooperation  (including  expert  teams) 
would also require resources from customs administrations, financial but especially human 
resources  that  can  take  part  to  such  activities  in  addition  to  their  daily  tasks,  and 
disseminate  the  results  achieved.  This  could  represent  a  challenge  for  national  customs 
administration, which already face challenges related to the availability of human resources 
(see section 3.3.1.). Finally, by providing financial resources and an environment supporting 
innovation,  this  policy  options  also  supports  the  dissemination  of  new  solutions  and 
products  developed  thanks  to  the  Customs  programme  (from  an 
improved  risk 
management software to innovative scanner technology  to optimised clearance process).  

265 

 
 
Policy options 3 and 4 share with policy option 2 the basic elements of the assessment, i.e. 
increase in the overall EU budget, expected to lead to a more efficient and effective customs 
union in the medium to long period, supporting the EU capability to fight against crime and 
terrorism,  illicit  imports  and  fraud,  in  turn  supporting  the  financial  interest  of  Member 
States and of the EU as a while. The smooth cooperation and cooperation of the EU customs 
administrations  in  the  customs  union  are  expected  to  support  businesses  and  citizens  in 
their international economic activities, and to strengthen the Single Market. In turn, better 
working and better cooperation customs administrations are expected to impact positively 
the competitive position of the EU, making it more attractive for trade.  

In  policy  option  3  national  customs  administrations  are  expected  to  co-finance  (30%  co-
funding,  i.e.  about  EUR  13.6  million  over  7  years)  some  of  the  activities  (such  as  the 
purpose-based  projects),  in  addition  to  finding  the  human  resources  necessary  to  take 
advantage  of  the  opportunities  provided.  This  option  modifies  to  some  extent  the 
governance of the programme, reducing the steering role of the Commission and providing 
the framework for further cohesion among national customs administrations in defining the 
direction for the programme (through the vision group for innovation and strategic thinking) 
and in the management of its activities (through the Steering group).  

Policy option 4 presents the largest increase in EU budget for the programme (+375% with 
respect  to  the  current  programme),  which  is  expected  to  generate  the  largest  gains  in 
efficiency and effectiveness for customs administrations in the long term. Centralising at EU 
level the development of the national components of the EIS-related IT systems is expected 
to generate economies of scale and learning curve effect. The same principle can be applied 
to  the  creation  of  the  centralised  Customs  Academy,  which  is  expected  to  lead  to  the 
converge of customs competencies and skills over time, to better access to continuous and 
vocational  training,  and  therefore  to  better  skilled  and  trained  customs  officers,  while 
generating economies of scale and learning curve effect (compared to the scenario in which 
each  Member  State  has  to  implement  the  customs  CFW  individually).  Correspondingly, 
Member States are likely to experience a reduction of the funding necessary (even if some 
limited  co-funding  could  still  be  necessary,  at  least  initially).  The  major  change  in 
governance  and  organisational  structure  foreseen  with  the  creation  of  the  EU  Customs 
Administration  is  expected  to  increase  efficiency  and  effectiveness  over  time.  Its  running 
costs  (e.g.  staff,  budget,  equipment  needed)  are  uncertain  at  the  moment,  as  much  will 
depend on the number of functions it will have, which could change over time321. However, 
national customs administrations would have to go through a major organisational change, 
which  is  likely  to  absorb  a  vast  amount  of  human  and financial  resources.  For  instance,  in 
order  to  implement  such  change,  agreements  will  have  to  be  reached  on  the  legal  and 
organisational structure of this organisation and its tasks; procedures will have to be agreed, 
inter alia. Such costs are likely to be large in early phases, and to lower over time, until the 
full operational level is reached. 

321 See section 5.6 

266 

 
 
                                                      
267 

 
 
 
 
Conclusion 

The table below summarises the positive impacts (advantages) and remaining shortcomings 
(disadvantages) related to the implementation of one policy option versus another in a clear 
and concise manner: 

Table 28 – Expected economic impacts of the Policy Options  

Advantages 

No 
Customs 

  No costs for the EU budget.  

Baseline 

  Reduction of EU budget (-15%).  

PO1 

PO2 

  As above (-30% reduction).  

  Efficiency and effectiveness gains;  
  Support to innovation and mutual learning.  

PO3 

  As  above  (expected  larger  efficiency  and 

effectiveness gains). 

PO4 

  As  above  (expected  larger  efficiency  and 

effectiveness gains).  

Source: Deloitte  

Disadvantages 
  Write-offs of IT investments sustained so 

far; 

  No environment for administrative 

cooperation and coordination of national 
actions for implementation of the customs 
union (and practical implementation of the 
UCC);  

  Weakened smooth cooperation and co-

functioning of EU customs administrations 
in the customs union; 

  Deteriorated competitive position of the EU 

(e.g. to attract trade).  
  Write  off  of  current 

investments 

in 

IT 

development (EUR 61 million) 

  Larger use of national resources, with loss of 
learning  curve 

economies  of  scale  and 
effect;  

  Hindered  practical  implementation  of  the 

UCC.  

  Same  as  above,  to  a  larger  scale  (EUR  165 

million write-off of IT investments) 

  Increase in EU budget (+136%);  
  Possible  difficulties  of  national  customs 
administration in finding staff for innovation 
and cooperation.  

  Same as above (151% budget increase);  
  Limited  costs  for  organisational  change  in 
Member  States  to  create  and  run  the 
Steering Group (EUR 2.1 million).  

  Same as above (+375% budget increase); 
  Large organisational costs in Member States 
the  EU  Customs 
run 

to  create  and 
Administration  

268 

 
 
 
 
6.6 Impacts on simplification and administrative burden 

Introduction 

Impacts  on  simplification  and  administrative  burden  include  elements  such  as  additional 
compliance  and  transactional  costs  and 
information  obligations  on  businesses  and 
citizens322.  They  relate  to  the  broadest  category  of  economic  impacts323,  and  therefore 
share  the  same  problems  in  tracing  back  a  direct  link  between  the  activities  (and  the 
expenditure)  of  the  programme  and  any  change  in  those  dimensions.  As  the  rest  of  the 
economic  impacts,  those  on  simplifications  and  administrative  burden  are  only  indirect 
effects  of  the  problems  in  the  cooperation  among  customs  administrations  that  the 
programme supports addressing (see section 3.5.2.). 

The policy options are therefore assessed based on a combination of qualitative data from a 
project  group,  interviews  with  the  customs  administrations  and  economic  operators,  and 
quantitative information when available.  

Assessment 

As  a  general  principle,  operational  cooperation  in  customs  matters  is  expected  to  lead  to 
common  ways  of  working  across  the  EU,  development  of  IT  tools  for  automated  data 
exchange and of communication tools, more consistent interpretation and implementation 
procedures  for  EU  legislation,  more  and  better  skilled  customs  officials,  and  possibly  the 
development  of  shared  solutions  to  common  challenges.  These  shared  solutions  in  turn 
support  the  proper  functioning  of  the  internal  market  (e.g.  reducing  fiscal  and  customs 
competition  among  Member  States).  While  the  activities  of  the  programme  focus  on  the 
customs  administrations’  processes,  they  are  expected  to  have  positive  impacts  on  the 
compliance  costs  and  administrative  burden  of  businesses  and  citizens,  even  if  indirectly. 
Common ways of working across the EU are also expected to impact positively businesses 
and  citizens,  who  will  face  less  discrepancy  as  to  interpretation  of  legislation,  procedures 
and  processes.  In  turn,  this  will  reduce  their  compliance  costs  and  administrative  burden, 
and will ultimately improve EU competitive position.  

The  discontinuation  of  the  programme  would  deprive  Member  States  of  an  environment 
for  cooperation  and  coordination  of  national  actions,  which  would  otherwise  require  a 
series of actions and activities on bilateral or multi-lateral basis, with higher costs and more 
coordination issues. More consistent interpretation and implementation procedures for EU 
legislation  would  be  therefore  undermined,  as  well  as  the  development  of  IT  tools  and 
procedures.  This  would  eliminate  the  actions  that  indirectly  reduce  compliance  costs  and 
administrative burden for businesses and citizens.  

322 European Commission (2017), Better Regulation Toolbox, ibid. pp. 127 

323 European Commission (2017), ibid. 

269 

 
 
                                                      
The  baseline  and  Policy  Option  1  impact  negatively  businesses  and  citizens,  as  those 
options limit the administrative cooperation among customs administrations and therefore 
the possibility to develop tools and ways of working that generate positive impacts on the 
administrative  burden  and  compliance  costs that  businesses  and  citizens  face.  In  addition, 
by limiting the functioning of the UCC systems, these options might reduce the current level 
of  automation  procedure,  worsening  the  current 
level  of  compliance  costs  and 
administrative burden.  

On  the  contrary,  strengthened  cooperation  (on  IT,  but  also  processes  and  operations, 
trainings  and  innovation)  supported  increasingly  under  policy  options  2,  3  and  4,  would 
impact  positively  (albeit  indirectly)  the  administrative  burden  and  compliance  costs  for 
businesses and citizens.  

Conclusion 

The table below summarises the positive impacts (advantages) and remaining shortcomings 
(disadvantages) related to the implementation of one policy option versus another in a clear 
and concise manner:  

Table 29 – Expected impacts on simplification and administrative burden of the Policy Options  

Advantages 

No 
Customs 

Baseline 

PO1 

PO2 

  Development  of 

IT  systems 

for  data 

exchange;  

  Environment  supporting  common  ways  of 
working,  reducing  administrative  burden 
and compliance costs for businesses.  

  Same as above, made larger by the stronger 
centralised coordination of activities via the 
Steering Group 

  Same  as  above,  made 
larger  by  the 
(IT  and 
centralisation  of  many 
tasks 
beyond) in the EU Customs Administration.  

PO3 

PO4 

Disadvantages 
 No 

for 

framework 

administrative 
cooperation,  hence  no  room  for  operating 
and  developing 
tools  and  operations 
indirectly  improving  compliance  costs  and 
administrative  burden  for  businesses  and 
citizens. 
 Limited 

functioning 

and 

no 
new 
for  data 

development  of 
exchange;  

IT  systems 

 No  place  for  reduction  of  administrative 
for 

compliance 

costs 

and 

burden 
businesses.  

 Same  as  above,  made  bigger  by  more 

limited functionalities of IT systems.   

270 

 
 
 
 
 
 
 
 
 
Source: Deloitte  

6.7 Key findings from the impact assessment of the policy 

options 

Out of the five main categories of impacts assessed for the policy options designed for the 
future  generation  of  the  Customs  programme,  only  four  apply.  The  key  findings  for  the 
other dimensions are summarised separately per policy option.  

The  discontinuation  of  the  Customs  programme  for  the  future  (i.e.  no  EU  intervention) 
would have adverse impacts on all the dimensions considered.  

  This policy option would not provide any support for training programmes for customs 
officers  or  for  a  framework  actively  supporting  administrative  cooperation  in  the 
customs policy domain. This would hinder the capacity to respond quickly to new and 
existing challenges in the field of crime, terrorism and security challenges. This would 
hinder the financial interests of Member States and of the EU as a whole and leave the 
EU  territory  more  permeable  to  crime  and  terrorism.  All  these  elements  would 
generate negative social impacts.  

  Environmental impacts would likely be fairly limited. Whilst the discontinuation of the 
programme  would  terminate  face-to-face  meetings  (and  related  travels)  for 
cooperation  activities  under  the  programme,  it  is  likely  that  meetings  would  be 
organised at any rate, as part of bilateral or multi-lateral frameworks, having the same 
if not bigger adverse effect on carbon footprint as the programme.  

  Concerning  the  economic  impacts,  the  discontinuation  of  the  programme  would 
mean  that  no  cost  is  incurred  by the  EU  budget.  However,  the  Customs  programme 
provides an environment for cooperation and coordination of national actions, which 
would  otherwise  require  a  series  of  bilateral  or  multi-lateral  basis,  with  higher  costs 
and more coordination issues. The discontinuation of the programme would entail a 
write-off of all the funding provided so far for administrative cooperation in customs 
matters,  as  not  only  the  existing  IT  tools  would  not  be  maintained,  but  also  the 
existing  frameworks  would  cease  to  exist.  This  would  undermine  the  practical 
implementation of the UCC (and therefore the compliance with legal obligations in the 
customs  area),  as  well  as  very  basis  for  administrative  cooperation,  with  negative 
impacts  on  the  overall  functioning  of  the  customs  union  (for  instance,  making  more 
complex international economic activities) and the competitive position of the EU. In 
the  absence  of  the  programme,  consistent  interpretation  and  implementation 
procedures  for  EU  legislation  would  be  undermined,  as  well  as  the  operation  and 
development  of  IT  tools  and  common  ways  of  working.  This  would  mean  that  the 
benefits  of  such  cooperation,  which 
indirectly  reduces  compliance  costs  and 
administrative burden for businesses and citizens, would be lost. 

The baseline scenario would also have adverse impacts on the dimensions considered, even 
if to a smaller extent than the discontinuation of the programme.  

271 

 
 
  Concerning  the  social  impacts,  the  baseline  scenario  would  undermine  the  full 
implementation  of  the  IT  systems  necessary  to  support  the  UCC  (as  it  would  only 
continuity of the UCC 2017 legacy systems), hindering the practical implementation of 
the  UCC  and  of  future  EU  legislative  initiatives  in  the  customs  domain,  and  the 
efficiency  of  Member  States  in  their  implementation,  increasing  fragmentation.  This 
policy option has no scope for innovation (on IT or other issues), which in turn would 
leave  customs  administrations  less  prepared  to  detect  early  and  react  quickly  to 
evolution in criminal and terrorist activities (for instance, new technologies needed to 
detect illicit imports, new smuggling paths, etc.). Finally, the absence of activities (and 
related  funding)  for  training  would  reduce  the  opportunity  for  customs  officers  to 
benefit  from  continuous  and  vocational  training,  and  widen  the  gaps  of  customs 
competences and skills across the EU.  

  Environmental impacts would be fairly limited. This option would limit the functioning 
and  development  of  IT  systems  for  communication  and  data  exchange  in  the  future 
while reducing the resources for face-to-face meetings (and related travels) under the 
programme. However, it is likely that meetings would be organised as part of bi-lateral 
or  multi-lateral  frameworks,  having  the  same  if  not  bigger  adverse  effect  on  carbon 
footprint as the programme.  

  With  regard  to  the  economic  impacts,  the  baseline  would  reduce  the  cost  of  the 
programme  for  the  EU  budget  (-15%),  but  at  the  same  time  would  not  support  the 
necessary  IT  tools  for  the  practical  implementation  of  the  UCC  or  future  legislative 
for  Member  States’  customs 
provisions,  with 
administrations.  The  weakened  functioning  of  and  co-functioning  of  customs 
administrations would have in turn negative impacts on the Single Market and on the 
competitive position of the EU.  

increased  of  costs 

related 

  Similarly,  the  baseline  scenario  impacts  negatively  businesses  and  citizens,  as  it 
reduces administrative cooperation among customs administrations and therefore the 
impacts  on 
possibility  to  develop  tools  and  ways  of  working  with  positive 
administrative burden and compliance costs for businesses and citizens.  

Policy option  1 is characterised by an even larger budgetary reduction (-30% compared to 
the  current  programme)  than  the  baseline  scenario.  Therefore,  all  the  negative  impacts 
describe for the baseline also apply to this policy option and to a larger extent (but not as 
large  as  in  the  case  of  discontinuation  of  the  programme).  Furthermore,  the  adverse 
impacts of this option are likely to worsen in the future.  

Policy  option  2  maintains  and  reinforces  cooperation  activities  already  existing  under  the 
current  Customs  programme,  while  introducing  a  more  project  and  objective-oriented 
approach  via  strengthening  the  role  of  enhanced  cooperation  and  further  supporting 
innovation. These elements are likely to have positive effects on the dimensions considered 
for the assessment.  

  The  combined  effect  of  better  data  and  communication  and  more  support  to 
innovation  would  help  customs  administrations  to  detect  and  react  more  quickly  to 

272 

 
 
evolution  in  illicit  and  criminal  activities  overall  improving  the  EU  capability  to  fight 
against  crime  and  terrorism.  Furthermore,  the  largest  scope  for  administrative 
capacity building activities would increase customs officers’ access to continuous and 
vocational  training  and  reducing  the  gaps  of  Customs  competences  and  skills  across 
the EU, overall having positive social impacts.  

  Limited  positive  environmental  impacts  are  also  likely,  as  the  development  of  IT 
systems  for  data  exchange  and  online  collaboration  tools  could  compensate  the 
possible increase of face-to-face meetings (linked to increased cooperation activities).  

  The economic impacts of the policy options are expected to be positive overall. While 
requiring  more  resources  from  the  EU  budget  (+136%  compared  to  the  current 
programme), this policy option would support the development of IT systems deemed 
necessary for the practical implementation of the UCC and all other necessary systems 
(e.g.  CRMS,  ICS2  and  international  projects)  and  for  supporting  innovation;  it  would 
also  support  the  introduction  of  new  joint  operations  for  customs  administrations 
(such  as  joint  operations)  and  would  bring  more  resources  for  cooperation.  Overall, 
these activities are expected to generate efficiency and effectiveness gains, leading to 
a more efficient and effective customs union in the medium to long period, supporting 
the fight against fraud and illicit trace, crime and terrorism, and in turn supporting the 
financial interests and competitiveness of the EU as a whole. 

  Similarly, the increased scope for administrative cooperation would generate indirect 
positive  impacts  for  businesses  and  citizens,  as  the  solutions  developed  for  more 
effective  and  efficient  cooperation  among  customs  administrations  would  in  turn 
reduce compliance costs and administrative burden.  

Policy options 3 and 4 share the same basic principle of policy option 2, i.e. that increased in 
the EU resources available for administrative cooperation in customs matters would in turn 
generate  efficiency  and  effectiveness  gains,  leading  to  a  more  efficient  and  effective 
customs union in the medium to long period. The smooth cooperation and co-functioning of 
the customs administrations in the customs union are expected to support businesses and 
citizens  in  their  international  economic  activities,  and  to  strengthen  the  Single  Market.  In 
turn,  better  working  and  better  cooperating  customs  administrations  are  expected  to 
impact positively the competitive position of the EU, making it more attractive for trade and 
investments. 

Policy option 3 builds on option 2, Therefore, the same impacts already described for policy 
option 2 apply, possibly to a greater extent.  

  The  social  impacts  on  the  EU  capability  to  fight  against  crime  and  terrorism  and  to 
increase  customs  officials’  access  to  continuous  training  and  improve  customs 
officials’  skills  would  be  reinforced  by  the  largest  budgetary  provisions  for  such 
activities and by the emphasis on knowledge management and enhanced cooperation. 
In addition, the introduction of the vision group and the Steering Group would affect 
the  governance  of  the  programme,  providing  to  Member  States’  customs 
administrations  a  wider  role  in  steering  the  activities  for  the  programme  and  in  the 

273 

 
 
management  of  the  programme  and  of  the  individual  activities.  The  vision  group  in 
particular would place more emphasis on innovation and strategic thinking, providing 
the conditions for customs administration to start to innovate together.  

  Environmental impacts would likely be very similar to policy option 2;  

  The economic  impacts of the policy options are expected to be positive overall. The 
same  reasoning  described  for  policy  option  2  applies,  to  a  broader  scale  (the 
programme would require a 151% increase of the budget with respect to the current 
programme,  in addition to  limited  national  co-funding  of  purpose-based projects for 
those  participating  countries  interested).  In  addition,  this  option  provides  the 
framework  for  further  cohesion  among  customs  administrations  in  defining  the 
direction  for  the  programme  (through  the  vision  group  for  innovation  and  strategic 
thinking) and in the management of its activities (through the Steering Group).  

  The  increased  scope  for  administrative  cooperation  would  generate  indirect  positive 
impacts for businesses and citizens, as the solutions developed for more effective and 
in  turn  reduce 
efficient  cooperation  among  customs  administrations  would 
compliance costs and administrative burden, to a larger scale than in policy option 2. 

Finally, policy option 4 includes and reinforces many of the elements of policy option 3. In 
addition, this policy option establishes the EU Customs Administration, directly responsible 
for some activities (such as human competency building and IT development, operation and 
maintenance,  including  the  national  components  of  the  EIS-related  IT  systems)  and  in 
charge  of  the  programme  management  and  the  coordination  of  the  activities  (soft 
collaboration, operational  cooperation  and  enhanced  operational  cooperation).  Therefore, 
the same impacts already described for policy option 3 apply, possibly to a greater extent:  

  The more centralised approach will strengthen the implementation of the EU customs 
policy,  with  a  much  stronger  emphasis  on  shared  processes  and  procedures,  and 
consistency  of  customs  operations  throughout,  with  positive  effects  on  the  EU 
capability to fight against crime and terrorism. This policy option will increase Customs 
officers’ access to continuous training and convergence of Customs competencies and 
skills across the EU, with overall positive social benefits.  

  Environmental impacts would likely be very similar to policy options 2 and 3;  

  The economic  impacts of the policy options are expected to be positive overall. The 
same reasoning described for policy option 3 applies. This policy option presents the 
largest increase in EU budget for the programme (+375% with respect to the current 
programme),  which  is  expected  to  generate  the  largest  gains  in  efficiency  and 
effectiveness for customs administrations in the long term. Centralising at EU level the 
development  of  the  national  components  of  the  EIS-related  IT  systems  and  the 
implementation of the Customs Academy is expected to generate economies of scale 
and  learning  curve  effect  while  reducing  the  costs  for  Member  States.  The  major 
change in governance and organisational structure foreseen with the creation of the 
EU Customs Academy is expected to increase efficiency and effectiveness over time, 

274 

 
 
even  if  it  would  likely  require  major  organisational  change  for  national  customs 
administrations,  which  is  likely  to  absorb  a  vast  amount  of  human  and  financial 
resources.  

  Likewise,  and  even  more  than 

in  policy  option  3,  the 

increased  scope  for 
administrative  cooperation  and  the  centralisation  of  some  activities  would  generate 
indirect  positive  impacts  for  businesses  and  citizens,  as  the  solutions  developed  for 
more  effective  and  efficient  cooperation  in  the  customs  union  would  in  turn  reduce 
compliance costs and administrative burden. 

275 

 
 
7  Evaluation 

This chapter presents the assessment and comparison of the policy options designed for 
the next generation of the Customs programme. 

7.1 Overview of the approach 

This chapter focuses on the evaluation and comparison of the policy options (as described in 
chapter  5).  The  approach  in  this  chapter  is  based  on  the  Better  Regulation  Guidelines  for 
Impact Assessment.  

The table below provides the list of the criteria for the evaluation. 

Table 30 – Criteria for evaluation of the policy options 

Qualitative assessment  

Quantitative assessment 

Efficiency  

Coherence 

Effectiveness 

Feasibility  

Relevance 

EU added value 

Proportionality  

Source: Deloitte 

The  qualitative  assessment  is  based  on  several  data  sources.  These  include  contributions 
from stakeholders (both at EU level and in Member States) collected via the interviews and 
survey, inputs from the European Commission, and expert assessments of the study team. 
The evaluations and assessments derived from these sources were discussed and validated 
by  the  European  Commission  and  relevant  stakeholders  (e.g.  during  the  Customs  Project 
Group  meetings  and  with  other  experts),  and  –  where  needed  –  checked  in  relevant 
literature.  

The  quantitative  assessment  focuses  in  particular  on  the  impacts  on  simplification  and 
administrative  burden.  It  is  based  on  the  stakeholders’  inputs  and  on  expert  assessment, 
and uses the current Customs 2020 programme and the baseline scenario as a basis.  

As regards the scoring system used in this chapter to present the comparison of the options: 
it consists of scores that range from -3 to +3, with 0 as the central point. In particular: 

276 

 
 
 
 

0  represents  the  current  situation,  i.e.  the  current  Customs  2020  programme,  and 
serves as the base for comparative measurement of the policy options; 

  The scale from -3 to +3 is used to demonstrate whether the effects of the different 
policy  options  represent  a  worsening  or  an  improvement  in  comparison  to  the 
current situation324.  

In principle, for an evaluation of the policy options, each of the policy options needs to be 
assessed  against  the  baseline  scenario,  which  usually  enables  a  clear  starting  point  for 
comparison and analysis. The baseline is: 

  The current situation, i.e. in this case Customs 2020, taking account of national and 
EU policies in place and reflecting possible developments of these in the absence of 
new EU-level action. In this regard, in chapter 2 we have described the state of play 
of the programme, and in the chapter 3 we have identified the trends that are likely 
to occur during the next programing period; 

  Another significant variable to be taken into account is the UK’s withdrawal from the 
Union.  Because  the  UK’s  withdrawal  from  the  Union  will  most  likely  happen,  it 
should be included in the baseline scenario. As such, the baseline scenario will entail 
a  reduction  of  the  overall  resources  available  in  proportion  to  the  current  UK 
contribution  to the  EU  budget  (i.e.  approximately a  decrease  of  15%).  However,  as 
the  UK’s  withdrawal  is  an  unprecedented  circumstance  that  will  take  place  in  the 
future, its effect on the programme and its activities (type, number, frequency, and 
prioritisation) is largely unknown and based on assumptions. 

Because of the latter point, the baseline scenario is rather an additional potential scenario 
that  would  need  to  be  evaluated  as  an  option  in  the  framework  of  this  study.  This 
assessment  is  only  possible  against  what  we  know:  Customs  2020  as  current  situation. 
Comparing  the  other  policy  options  only  against  this  hypothetical  baseline  scenario would 
make  the  exercise  highly  hypothetical  as  we  would  compare  assumptions  from  the  policy 
options against an unknown situation.  

In this study, we will therefore compare the policy options (including the baseline situation) 
against  the  current  situation.  The  reason  for  this  approach  is  that  the  contributions  from 
stakeholders  and  expert  input  mainly  provided  the  perspective  of  changes  to  the  current 
situation.  Also,  as  the  decrease  of  15%  on  the  budget  for  Customs  programme  is  not  an 
absolute  certainty,  it  is  appropriate  for  evaluation  purposes  to  treat  it  as  an  additional 
potential scenario that needs to be assessed.  

324 Hence, a negative score does not imply that a policy option does not (at all) meet a criterion; it shows that 
the policy option does not meet a criterion to the same extent as the current situation. In the same manner, a 
positive score means that the policy option is stronger in meeting a certain criterion than the current situation. 
Please note that the evaluation is done on the basis of the next programming period; shorter or longer term 
impacts are not taken into account. 

277 

 
 
                                                      
 
In addition to the baseline and policy options discussed in detail in  chapter 5, we will also 
evaluate  the  option  of  discontinuing  the  programme  (i.e.  no  more  EU  intervention). 
Although not detailed in chapter 5, the consequences of the discontinuation of the Customs 
2020 programme need to be taken into account in this evaluation.  

7.2 Coherence 

Introduction 

It  is  essential  that  the  policy  options  are  integrated  and  interact  with  EU  priorities  and 
objectives.  In  accordance,  the  coherence  criterion  considers  to  what  extent  the  policy 
options  are  complementary  with  -supportive  to  -  or  might  overlap  with  existing  priorities, 
initiatives and systems that are relevant within the context of this study. 

Assessment 

As  discussed  in  chapter  5,  the  baseline  scenario  entails  the  vision  and  structure  of  the 
current  Customs  programme,  but  with  a  budgetary  cut  of  approximately  15%  due  to  the 
UK’s  withdrawal  from  the  European  Union.  This  budgetary  cut  would  have  important 
consequences for IT capacity building and cooperation activities. This would entail that the 
programme would not be able to give the full support needed to reach its objectives, and 
more  generally,  it  would  not  provide  the  measures  to  strengthen  customs  cooperation 
between Member States and with the Commission included in Art. 33 of the Treaty on the 
Functioning of the European Union (hereafter, TFEU). For example, investments in IT tools, 
supporting the new policy initiatives related to legislative proposals pushed by the European 
Commission  (such  as 
ICS2)  would  be  stopped,  which  would  make  these  policy 
initiatives/objectives obsolete.  

These  shortcomings  would  be  even  greater  under  policy  option  1,  given  the  higher 
budgetary cut (of 30%). However, from a coherence perspective, policy option 1 would also 
have the advantage of being linked to / having to depend on other existing EU programmes 
such as those of the SRSS, DG HOME, DG REGIO and OLAF. This dependence would of course 
also entail an additional effort to align the actions of the programmes involved and ensure 
that no overlaps exist amongst them. 

The impacts on coherence for policy options 2, 3 and 4 differ noticeably from the baseline 
and policy option 1. As such: 

  Contrary  to  the  baseline  scenario  and  policy  option  1,  these  policy  options  would 
each be coherent with programme objectives identified in the objective tree, as well 
as the objective set in Art. 33 of the TFEU. Likewise, programmes would continue to 
be able to complement other programmes like in the present.  

 

Further  to  the  above,  it  is  reminded  that  customs  policy  supports  several  of  the 
European  Commission  2015-2019  priorities325 (cf.  also  chapter  3  on  the  general 

325 10 European Commission priorities for 2015-2019, https://ec.europa.eu/commission/priorities_en 

278 

 
 
                                                      
trends). The implementation of a strong Customs programme, through which a wide 
array  of  activities  on  topics  of  high  importance  can  be  undertaken,  may  thus 
complement  and  contribute  to  the  EU  priorities.  As  such,  the  evolution  of  the 
programme  under  policy  option  2,  3  and  4  may  for  instance  result  in  a  higher 
coherence with policies/priorities regarding:  

  Trade  policy:  customs  and  trade  policies  are  closely  interlinked  by  nature. 
customs  administrations  conduct  risk  assessments  not  only  with  a  view  to 
ensuring  security  but  also  to  facilitate  trade  (e.g.  the  single  window  approach) 
and allow business enter markets and/or source from markets.  

  The  Internal  Market:  customs  policy  should  help  improve  and  not  create 
obstacles against the Internal Market. In particular, customs policy contribute to 
the proper functioning of the Internal Market as it ensures that goods from third 
countries entering the EU are treated the same way. 

Further to the above, policy option 3 and 4 add a degree of coherence in comparison to 
option 2. As such: 

  Under policy option 3 and 4, the coherence of customs with other policies, would be 
supported  by  a  vision  group,  which  would  strengthen  the  programme’s  potential  to 
look forward and predict future needs (as explained in chapter 5).;  

 

The  broader  geographical  focus  of  policy  option  3  and  4  will  offer  the  potential  to 
increase coherence with customs-related actions and initiatives at international level 
(in particular in the context of the WCO/WTO). The extent to which this potential for 
enhanced  coherence  is  utilised  will  however  depend  on  the  coordination  and 
partnership with the relevant institutions. As such: 

  Currently,  the  WCO  and  the  EU  engage  in  customs-related  initiatives  and  can 
find themselves developing overlapping instruments and tools, such as trainings, 
workshops,  and  others.  Fostering  common  actions  could  potentially  lead  to 
more coherence, and decrease such overlaps; 

  The  increasing  globalisation  worldwide  and  the  importance  of  the  extra-EU 
context  to  tackle  fraud  and  illegal  activities  (e.g.  illicit  tobacco  trade)  require 
increased external action to achieve the EU objectives. 76% of the participating 
countries  that  responded  to  the  survey  considered  that 
international 
organisations  should  be  involved  either  on  a  permanent  or  ad  hoc  basis.  Of 
course, a broader geographical focus enabling the participation of international 
organisations would bring more coherence to address these possible risks. 

Finally, policy option 4 would offer an additional level of coherence in comparison to policy 
option 3, taking into account the following European Commission priorities: 

  A  stronger  global  actor:  by  putting  all  participating  countries  at  the  same  level  (in 
terms of human, IT and operational capacities) and strengthening the EU’s position in 
the  global  customs  sphere,  the  programme  would  contribute  to  this  priority. 

279 

 
 
Becoming a model to follow and broadening the geographical focus could support the 
development of other countries, while promoting EU values;  

  Digital  Single  Market:  by  enlarging  the  IT  scope  to  include  the  EIS-related  national 
components, the programme would be able to bring down existing national and cross-
border  barriers,  promoting  e-government,  and  ensuring  that  Europe’s  economy  and 
society  can  take  full  advantage  of  what  digitalisation  has  to  offer  in  the  customs 
sphere.  

As  a  final  remark,  based  on  what  has  been  assessed  for  the  other  policy  options, 
discontinuing the programme would be very little coherent. Indeed, the advantages rising 
from policy options 2, 3 and 4 would not be applicable in this case, and the disadvantages of 
the baseline and policy option 1 (i.e. the programme not being able to fully support the EU 
objectives  and  initiatives)  would  be  relevant  to  this  option.  Moreover,  not  having  a 
programme could also entail an atomisation of programmes at national and bilateral level. 
This,  in  turn,  could  translate  in  less  coherence  due  to  the  difficulty  of  aligning  actions 
without a central component (at EU level) that ensures that the initiatives do not overlap or 
contradict with other existing ones. 

280 

 
 
Conclusion 

The table below summarises the advantages and disadvantages during the next programming period of each policy option compared to the 
current  situation  with  respect  to  the  evaluation  criterion  “coherence”.  This  table  allows  for  a  clear  and  concise  overview  of  the  detailed 
assessment carried out above. 

Table 31 – Expected impacts on coherence of the policy options 

Advantages 

Disadvantages 

Rating 

No  
Customs 
(NC) 

BS 

PO1 
PO2 

  Compelled to use the same funding to serve different policies. 
  Coherent with the European Commission’s priorities on: 

 Trade policy; 
 A deeper and fairer Internal Market. 

  Coherence between customs initiatives at EU and international 

level.  

PO3 

  As PO2, but to a greater extent. 

  Not coherent with the TFEU’s objective on providing the 
measures to strengthen customs cooperation between 
Member States and with the Commission (Art. 33); 

  Not coherent with European Commission’s priorities on: 

 Trade policy; 
 A deeper and fairer Internal Market; 
 Becoming a stronger global actor; 
 The Digital Single Market; 
  Atomisation of programmes 
  Not coherent with the TFEU’s objective on providing the 
measures to strengthen customs cooperation between 
Member States and with the Commission (Art. 33); 

  As the BS, but to a greater extent. 

-3 

-2 

-2.5 
1.5 

2 

281 

 
 
 
 
 
 
 
Advantages 

Disadvantages 

PO4 

  As PO3; 
  Coherent with the European Commission’s priorities on: 

 Becoming a stronger global actor; 
 The Digital Single Market (bringing down barriers to unlock online 

opportunities). 

Source: 

Rating 
2.5 

Deloitte 

282 

 
 
 
 
7.3 Effectiveness 

Introduction 

This  section  aims  to  present  the  assessment  of  the  effectiveness  of  each  policy  option, 
meaning  it  will  be  evaluated  to  what  extent  the  different  options  would  achieve  the 
programme’s objectives. This chapter, which is of a qualitative nature, will feed into section 
7.4 on efficiency as the latter considers the benefits versus the costs (effectiveness). 

As is also the case for the other sections of this chapter, the evaluation of the effectiveness 
criterion  was  made  based  on  stakeholder  consultation  of  economic  operators,  customs 
administrations and associations, as well as desk research and the expert judgement of the 
study team. 

The assessment of the effectiveness of the policy options was carried out with reference to 
the policy objectives identified in chapter 4, taking into account the findings of the problem 
assessment. These objectives are the following: 

  General objectives: achieving the full potential of the customs union: 
  To ensure EU financial interests and safeguard the budget 
  To prevent illicit trade and fraud in customs transactions 
  To  prevent  illicit  trade  in  restricted  and  prohibited  goods  threatening  EU 

security, environment, health and safety 

  To exploit the full potential of the Single Market and foster EU competitiveness 

  Specific objective: 

  To  contribute  to  equal  capacity,  balanced  interpretation  and  implementation, 
and  cooperation  between  customs  administrations  in  the  customs  union  and 
with third countries to carry out effectively and efficiently their missions 

  Operational objectives: 

  Contribute  to  more  coherence  of  human,  IT  and  operational  capacities  of 

customs and help ensuring a standard customs experience 

  Contribute  ensuring  equal  interpretation  and  equivalent  implementation  of 

customs and non-customs legislation  

  Help  removing  obstacles  for  cooperation  between  customs  and  with  other 

stakeholders 
  Geographical 
  Legal and administrative 
  Strategic 

All the objectives are derived from the problem assessment presented in chapter 3 and are 
interconnected between the levels of objectives, meaning that an improvement in one has 
the potential to contribute to an improvement in the other. For example, reducing the legal 
and  administrative  obstacles  to  the  cooperation  between  customs  administrations  would 
help them carry out more effectively and efficiently their mission, which could help prevent 
illicit trade and fraud in customs transactions. 

283 

 
 
The programme has the potential to impact all of the above objectives, but only operational 
objectives can be addressed directly (and attained to the greatest extent) through the three 
scopes  of  collaboration 326.  In  addition,  the  causality  between  the  activities  and  the 
attainment of the operational objectives is more easily identifiable than for the specific and 
general  objectives.  For  these  reasons,  this  section  will  make  a  particular  emphasis  on  the 
impacts  on  operational  objectives,  keeping  in  mind  that  they  will  in  turn  enable  the 
achievement of the specific objective and facilitate the fulfilment of the general objectives. 

Finally, it is worth reminding that a significant part of the impacts linked to the programme 
depend  on  the  topics  chosen  for  the  different  activities.  This  aspect  will  not  be  studied 
under  this  impact  assessment  as  it  is  dependent  on  the  interest  and  choice  of  the 
participating  countries.  However,  some  topics  of  interest  were  discussed  during  the 
interviews  conducted  during  the  fieldwork,  the  conclusions  of  which  (including  some 
expected  impacts)  are  available  in  the  case  studies  in  annex  B.  The  case  studies  provide 
concrete examples on “how” and “why” tackling specific customs issues with specific tools 
of the programme will benefit the programme’s objectives. For these concrete examples we 
further refer to annex B. 

Assessment 

In  general,  regardless  of  the  implementation  of  the  identified  policy  options,  the  existing 
problems  have  a  tendency  to  naturally  improve.  Indeed,  general  pressure  arising  from 
international organisations, society, its values, and circumstances like crises (e.g. the bird flu 
and the horse meat crisis) demand improvements regardless of the support provided at EU 
level. In this vein, even if the programme was discontinued, the objectives could be partially 
met.  However,  this  would  be  achieved  to  a  lower  extent  and  at  a  much  longer  term,  and 
likely not during the next programming period (2021-2027). Amongst other reasons, would 
the programme be discontinued, IT-systems developed at EU level would become obsolete 
and inoperative in the short-medium term (due to the lack of maintenance support that is 
currently provided by the programme) and would thus no longer reach the desired level of 
effectiveness.  

Also  under  the  baseline  scenario,  the  lower  funding  for  the  programme  would  have 
negative  impacts  on  effectiveness.  With  less  money  to  finance  the  programme  activities, 
activities  would  be  fewer  and  organised  less  frequently,  leading  to  less  opportunities  to 
obtain results that could support the achievement of the different objectives. Furthermore, 
the  decrease  of  the  financial  envelope  would  lead  to  a  change  in  how  activities  are 
undertaken and a need to prioritise. As such: 

 

Instead  of  promoting  face-to-face  interactions,  the  programme  could  shift  towards 
encouraging  online  exchanges.  This  would,  however,  go  against  one  of  the  main 
benefits  of  the  programme  (as  highlighted  by  several  interviewees):  the  opportunity 

326 These three scopes are soft collaboration, operational cooperation, and enhanced operational cooperation. 
For more information see the definition of the activities’ building block in section 4.2. 

284 

 
 
                                                      
to network and create ties. Although officials would still have the chance to interact, 
the  effectiveness  would  be  lost  due  to  people  not  feeling  as  engaged  and  willing  to 
collaborate  as  when  exchanging  in  person.  Moreover,  this  type  of  approach  might 
prove  to  be  burdensome,  as  it  requires  a  level  of  digitalisation  and  interoperability 
that  not  all  countries possess,  and  not  all  programme  tools  are  compatible  with  this 
type of approach.  

  A general prioritisation of activities would have consequences on the topics addressed 
through the activities, including the funding of IT systems. The available funding would 
be  limited  to  the  maintenance  of  existing  systems,  making  it  impossible  to  develop 
other  systems  necessary  for  the  effective  implementation  of  UCC.  This  would  also 
have an impact on the IT capacity needed to carry out effectively and efficiently the 
missions of customs administrations.  

All  the  listed  negative  impacts  would  also  be  pertinent  for  policy  option  1  in  a  more 
enhanced manner (due to the more important budget reduction): 

 

 

 

In  particular,  the  most  affected  would  be  the  IT  capacity,  as  there  would  not  be 
enough  budget  to  maintain  all  systems.  Hence,  some  would  become  obsolete  and 
useless to achieve their goal and the objectives of the next programme.  

In addition, there is a potential negative impact attached to the dependence on other 
programmes and the need to pool resources. While collaboration with other European 
Commission  services  naturally  lead  to  achieving  in  a  more  optimal  way  certain 
objectives  (as  shown  by  lessons  learnt),  being  dependent  on  other  services  can 
potentially also be detrimental.  

Further,  as  customs  administrations  would  be  the  only  participants  and  direct 
beneficiaries, the programme might create a larger gap for the cooperation with other 
stakeholders.  Indeed,  only  taking  into  account  the  views  of  one  side  (customs 
administrations)  would  potentially  increase  the  strategic  obstacles  for  cooperation 
with the other (stakeholders) (cf. the driver discussed in  chapter 3, section 3.3.3). In 
addition, not allowing the participation of other stakeholders, including experts, would 
result in a more limited knowledge base to address the (operational) objectives of the 
programme.  

Alike  in  the  coherence  section,  policy  options  2,  3  and  4  hold  common  pros  and  cons  in 
respect  to  their  effectiveness  due  to  their  shared  building  block  elements  (common 
effectiveness  considerations  are  thus  described,  and  policy  option-specific  elements  are 
added as relevant).  

As  such,  two  negative  impacts  on  effectiveness  can  in  particular  be  identified  for  policy 
options 2, 3 and 4: 

  An  added  complexity  for  cooperation.  Indeed,  the  broadening  of  the  geographical 
focus  to  include  all  EFTA  members  would  increase  the  strategic,  legal,  geographical 
and  administrative  obstacles  to  achieve  more  and  better  cooperation  amongst  the 
participating  countries.  The  inclusion  of  new  countries  could  lead  to  geographical 

285 

 
 
obstacles such as more regionalisation. In the same line, legal and strategic obstacles 
could  increase,  due  to  new  potentially  conflicting  positions  to  align  with  to  work 
together.  Reasonably,  each  (participating)  country  has 
legal 
framework, administrative procedures and strategy. The larger the geographical focus, 
the  more  complex  it  is to  reach  consensus  in  these  matters  to facilitate  cooperation 
between customs administrations and with other stakeholders; and 

its  own  existing 

  The  continued  uneven  playing  field  in  terms  of  IT.  The  multiplicity  of  national  IT 
systems  and  their  different  level  of  development  would  continue  to  be  a  burden 
limiting the achievement of the different objectives. Possessing sufficient budget to 
finance IT systems could improve this shortcoming and would bring more coherence 
amongst participating countries. However, being able to finance EIS-related national 
components  as  well,  as  in  policy  option  4,  would  be  more  beneficial  than  only 
financing the central components. 

Apart  from  the  potential  negative  impacts  mentioned  above,  policy  options  2,  3  and  4 
would contribute significantly to the achievement of the identified objectives by  removing 
barriers  at  an  operational  level.  Specifically,  regarding  obstacles  for  cooperation  between 
customs  administrations  and  with  other  stakeholders  (a  driver  discussed  in  chapter  3,  see 
section  3.3.2  above),  the  changes  common  to  all  three  policy  options  provide  their  own 
added value: 

 

 

For instance, by introducing joint operations the programme would help diminish both 
strategic  and  administrative  obstacles.  The  participating  countries  would  be  able  to 
identify  similar  or  complementary  priorities  and  strategic  goals,  and  would  further 
cooperate  to  achieve  them.  In  addition,  working  together  through  these  joint 
operations  would  enable  them  to  learn  from  each  other,  potentially  aligning 
administrative  procedures  and  contributing  to  a  more  coherent  level  of  human  and 
operational capacity of these countries. In general, being able to work more and closer 
together by at least affording to pursue the same level of activities, and strengthening 
the  scope  of  enhanced  operational  cooperation  would  also  benefit  the  operational 
objectives.  Working  closer  together  could  lead  to  easier  identification  of  common 
priorities, including common legislation, making  the divergence in these matters less 
of an obstacle.  

Likewise,  more  opportunities  for  customs  administrations  to  discuss  face-to-face 
would  create  a  better  understanding  of  what  they  can  gain  from  a  broader 
in  the 
collaboration,  and  would  reduce  geographical  obstacles, 
framework  of  a  purpose-based  approach.  The  following  comments  can  however  be 
made in this respect: 

in  particular 

 

In  the  short  term,  the  purpose-based  approach  could  trigger  gaps  between 
participating countries, as those who want to do more can  (and are encouraged 
to) do more. This might lead to the establishment of new obstacles to cooperation 
frameworks  and 
and/or 
administrative procedures would be approximated amongst a reduced number of 

reinforcement.  Strategic  priorities, 

their 

legal 

286 

 
 
 

countries,  promoting  geographical  silos,  and  widening  the  gap  with  the  other 
participating  countries.  In  particular,  for  those  participating  countries  that  are 
known for being more keen on regional collaboration (vs. EU level) this purpose-
based  approach  might  encourage  their  tendency. Nonetheless,  this  should  be 
mitigated by the prior assessment of the EU added-value of the projects for their 
selection,  and  the  sharing  of  results  after.  This  would  ensure  that  the  activity 
initiated  could  be  interesting  for  other  participating  countries,  and  that  they 
would have access to the results once it is concluded.  

Introducing  a  purpose-based  approach  allows  for  a  flexible  and  swift  way  of 
targeting  common  priorities  and  obstacles,  further  developing  human,  IT  and 
operational capacities too. This would be even more the case in policy option 3 as 
the participating countries would be able to co-finance activities, allowing for an 
increase in resources to achieve more. Although this approach may only benefit in 
the  short  term  the  participants  directly  involved,  it  would  benefit  all  countries 
participating to the programme in the medium term. This would happen because 
the  body  in  charge  of  the  approval  and  monitoring  of  the  activities  would  be 
responsible  for  sharing  the  results  of  the  purpose-based  work  done  (this 
responsible  body  will  be  DG  TAXUD  in  policy  option  2,  the  Programme  Steering 
Group  in  policy  option  3  and  the  EU  Customs  Administration  in  policy  option  4). 
This  difference 
in  the  responsible  party  sharing  the  outputs  might  have 
consequences  in  terms  of  the  speed  of  dispatch  of  the  outputs  amongst  the 
participating  countries.  In  particular,  laying  this  responsibility  with  DG  TAXUD 
(under policy option 2), on top of its multiple existing responsibilities, could lead 
to some delay in sharing the results if no additional resources are allocated to this 
task.   

  Moreover,  encouraging  the  participation  of 

international  organisations  would 
contribute  to  diminishing  existing  legal  and  strategic  obstacles  and  improving 
cooperation, as explained in the coherence section.  

On top of the above impacts, policy options 3 and 4 have additional shared characteristics 
that entail  common  effects.  In  terms  of  the impacts  shared  by  policy  options  3  and  4,  the 
most noteworthy are the favourable ones brought about by the new common building block 
elements: 

 

facilitate 

cooperation  between 

Firstly,  the  broadening  of  the  vision  towards  becoming  a  more  modern  and  client-
customs 
based  administration  would 
administrations  and  the  different  levels  of  stakeholders.  This  aspect,  ideally  coupled 
with  an  increase  of  activities  aimed  at  communication  and  awareness  (which  would 
also  help  with  recruitment  of  new  and  better  skills,  when  relevant),  would  clearly 
entail  improvements  in  the  specific  and  general  objectives.  It  would  facilitate 
exchanges, ease the burden linked to compliance, and improve the latter also due to 
better  understanding  of  tasks  and  obligations.  The  case  study  on  the  “Trade 
facilitation,  Single  Window  and  centralised  clearance”  provides  a  more  detailed 
illustration of this (see annex B).  

the 

287 

 
 
 

 

 

Secondly, in the same line, the involvement of civil society and interest groups would 
improve  the  image  of  customs  administrations  and  would  build  on  the  alignment  of 
priorities.  All  stakeholders  would  become  beneficiaries  and  this  would  boost 
cooperation between customs administrations and other stakeholders.  

Thirdly,  the  development  of  a  vision  group  with  representatives  of  the  different 
participating  countries  and  other  experts  would  create  closer  ties  and  common 
priorities.  This  would  lead  to  a  reduction  of  different  obstacles  to  cooperation, 
including  geographical  obstacles,  as  participating  countries  would  be  encouraged  to 
work  all  together  and  would  have  the  opportunity  of  learning  first-hand  from  their 
peers. 

Lastly,  the  introduction  of  awards  as  funding  models  to  distribute  the  programme’s 
budget would open the door to more innovation. This could help close the gap linked 
to  cooperation  obstacles  such  as  strategic  and,  potentially,  legal.  It  would  entail  the 
identification  of  new  common  objectives  and  priorities,  which  could  also  in  new 
common  legislation.  In  general,  it  would  improve  the  potential  of  finding  better 
solutions for customs matters due to increased involvement of stakeholders, meaning 
deeper and better collaboration. 

The  highlights  of  policy  option  4  in  terms  of  effectiveness  are  characterised  by  several 
changes to the programme: 

 

In the first place, the introduction of two new visions for the programme will guide its 
aspirations and work: 

  Preparing the customs union for the future and enable it to address any possible 
crisis would require more coherence of human, IT and operational capacities of 
all  the  units  within  the  EU  Customs  Administration.  This  vision  would  thus 
contribute to this operational objective. 

  Pursuing a strengthened position of the EU in the global customs sphere entails 
that  the  EU  would  lead  and,  consequently,  would  define  the  strategies  at  a 
global level. To do so, the primary concern will be to align its internal strategic 
priorities,  administrative  procedures  and,  to  the  extent  possible, 
legal 
frameworks,  as  well  as  remove  any  internal  geographical  obstacles  in  order  to 
ensure a coherence to be promoted at international level.  

These visions might be complex to achieve, especially with the increase of the participating 
countries of the programme, which will bring about higher obstacles, as explained before. 
However,  this  policy  option  is  intended  for  the  longer  term,  to  facilitate  and  ease  the 
introduction of such a spectrum.  

  Moreover,  this  would  also  be assisted  and  simplified  by the  enhancement of the  EU 
Customs  Administration  (before  only  a  Programme  Steering  Group).  The  thematic 
departments  would  provide  further  guidance  on  activities,  so  these  could  be  more 
targeted  and  effective  in  reaching  the  necessary  objectives.  For  instance,  the 
establishment  of  an  IT  department  inside  the  EU  Customs  Administration  would 

288 

 
 
ensure a more coherent IT capacity at EU level, especially because EIS-related national 
components could be integrated in the programme under this department. 

  In addition, the implementation of the sandbox under policy option 4 would support 
improvement  in  several  customs  domains  (such  as  risk  management,  collection  of 
duties).  This  type  of  activity  would  make  it  easier  to  find  and  test  solutions  to  the 
problems  to  reach  the  specific  and  general  objectives,  mitigating  potential  negative 
ones, as it will be done in a safe environment. 

  Finally,  the  possibility  for  economic  operators  to  contribute,  and  the  corresponding 
PPP  funding  model,  would  also 
impact  the  effectiveness  of  the  programme. 
Specifically, in terms of negative impacts, the contribution of economic operators and 
consequent  PPP  funding  model  are  a  delicate  and  potentially  detrimental  matter. 
Introducing this approach might allow more budgetary flexibility for specific activities, 
but this also grants a voice and a vote to an additional party. This could be beneficial 
to  ensure  alignment  between  private  and  public  priorities,  but  it  is  more  likely  to 
cause  discrepancies  in  the  decision-making,  led  by  the  individual  priorities  of  the 
funding  enterprise,  potentially  not  in  line  with  the  strategic  priorities  of  customs 
administrations.  This  is  also  in  line  with  the  statements  of  stakeholders  consulted. 
Both  customs  administrations  and  economic  operators  interviewed  considered  this 
approach could bring about conflict; and 20% of respondents to the survey deemed it 
option.
a 

potential 

289 

 
 
NC 

BS 

Conclusion 

The table below summarises the advantages and disadvantages during the next programming period of each policy option compared to the 
current  situation  with  respect to the  evaluation criterion  “effectiveness”.  This table  allows for a clear  and  concise  overview of the  detailed 
evaluation carried out above. 

Table 32 – Expected impacts on effectiveness of the policy options 

Advantages 

Disadvantages 

  The  existing  problems  would  not 

improve  during  the  next 

programming period; 

Rating 
-3 

  Regulatory  costs  would  increase  as  EIS  would  quickly  become 
obsolete and would not support the compliance with specific customs 
legislation that requires it. 

  Less  money  would  entail  less  frequency  and  number  of  activities, 

-1 

which would lead to less results to achieve the objectives; 

  The  decrease  in  face-to-face  activities  could  lead  to  a  loss  in 

engagement and effectiveness. 
  As BS, but to a greater extent; 
  No  involvement  of  other  stakeholders  would  increase  barriers  to 

-2 

PO1    The  geographical,  legal and  strategic obstacles  could  improve 

due to less participating countries; 

  Dependencies  on  other  programmes  could  still  enable  the 

cooperation with them; 

achievement of some objectives. 

PO2    Joint  operations  would  contribute 

reducing 

strategic, 

  Regulatory  costs  would  increase  as  certain  EIS  would  eventually 
become obsolete and would not support the compliance with specific 
customs legislation that requires it; 

  Reduced expertise to reach results to satisfy objectives. 
  A  broader  geographical  focus  would  lead  to  more  difficulty  in 

1.5 

administrative and geographical obstacles; 

reaching the operational objectives; 

  Strengthening  the  enhanced  operational  cooperation  scope 
and 

administrative 

would 
legal, 
geographical obstacles to cooperation; 

strategic, 

improve 

  The purpose based approach would enable a flexible and swift 
approach  to  target  common  priorities  and  obstacles,  further 

  The  purpose  based  approach  could  contribute  to  creating  gaps 

between participating countries in the short to medium term. 

290 

 
 
 
 
 
 
 
Advantages 

Disadvantages 

Rating 

developing human, IT and operational capacities; 

  Participation  of  international  organisations  would  improve 

existing strategic and legal obstacles. 

PO3    As PO2, to a greater extent; 

  The  Programme  Steering  Group  would  ensure  sharing  of 

results, thus, contributing to a level playing field; 

  The vision group would promote closer ties and the search for 

priorities of common interest; 

  A  client  based  approach  would  improve  compliance  as  tasks 

and obligations are clearer; 

  Awards  would 

foster 

innovation  and 

improvements 

in 

different domains and objectives. 

PO4    As PO3; 

  The  IT  department  inside  the  EU  Customs  Administration 
would  ensure  a  more  coherent  IT  capacity  at  EU  level 
(including EIS-related national components); 

  As the EU Customs Administration would further guidance for 
the activities, they would reach more effectively the identified 
objectives; 

  The  sandbox  would  promote 

improvements 

in  several 

domains, and collaboration in general. 

Source: 

  As PO2. 

2 

  As PO3; 
  Contribution  from  economic  operators  and  the  PPPs  models  would 
entail a voice and a vote to an additional party, which could lead to 
discrepancies in decision making, leading to more obstacles. 

2.5 

Deloitte 

291 

 
 
 
7.4 Efficiency 

Introduction 

The efficiency criterion is composed of two main elements: 

  Costs of the option; 
  Benefits  of  the  option,  including  reductions  in  some  of  the  costs  as  well  as  other 

positive effects on (part of) the stakeholders. 

In the context of this assignment, the following costs are especially relevant:  

  Costs  related  to  the  legislative  framework,  e.g.  changes  to  national  legislation  and 
the development of guidance for public administrations and economic operators; 
  Transaction  costs,  e.g.  communication  with  stakeholders,  training,  monitoring  and 

enforcement of legislation; and 

  Costs  related 

technical 
to 
development of hard- and software.  

the 

implementation,  e.g.  procurement  and/or 

As far as the benefits are concerned, we will mainly focus on potential savings in resources 
(financial  and  other),  as  well  as  potential  for  simplification  and  decrease  in  administrative 
burden. 

Due  to  a  lack  of  comprehensive  quantitative  data,  the  focus  is  on  qualitative  information 
gathered  during  the  Customs  project  group,  interviews  with  the  customs  administrations 
and economic operators. Quantitative information is provided as much as possible. 

Assessment 

The  discontinuation  of  the  programme  (i.e.  non-EU  intervention)  could  potentially  entail 
savings  for  the  European  Commission.  In  fact,  the  budget  foreseen  for  Customs  2020 
(currently € 547.3 million) could potentially be used for other purposes. On the other hand, 
the budget  saved  may  equally become available  for Member  States to  organise their  own 
programme to support customs cooperation and/or customs performance at national level.  

However, there are two shortcomings to this scenario:  

  Regardless  of  the  discontinuation  of  the  programme,  most  participating  countries,  if 
not  all,  would  continue  to  do  efforts  on  their  own.  This  would  cause  participating 
countries  to  incur  additional  (financial  and  time-related)  costs  to  reach  the  outputs 
they  could  have  achieved  through  Customs.  In  particular,  this  would  imply  that 
countries  would  have  to  conclude  a  number  of  bi-  and  multi-lateral  agreements  for 
administrative 
(including  possible 
inconsistencies that might occur from such a patchwork framework) and related costs, 
in particular: 

cooperation,  with 

complexity 

increased 

  Budgetary  costs:  the  participating  countries  would  need  to  invest  their  own 

national resources to achieve the objectives; 

  Allocation  of  human  resources:  additional  man-hours  would  need  to  be 
allocated to compensate the lack of support from the programme. As a matter 

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of  fact,  according  to  the  results  of  our  survey,  68%  of  the  respondents 
acknowledged  the  impact  of  the  programme  on  the  need  for  lower  resources 
(human and/or financial) to perform a certain task;  

  Training  and  operational  costs:  the  participating  countries  would  take  the 
development  and  deployment  of  all  trainings  for  their  officers  at  their  own 
expense;  

  Time  related  costs:  without  the  support  of  the  programme  the  participating 
countries  would  likely  need  more  time  to  achieve  an  objective.  For  instance, 
68% of respondents to the survey pointed out that the programme does indeed 
support them to complete tasks swiftly; 

  Substitution costs: the participating countries would need to adapt any existing 
IT systems depending on EU components, and would have to develop their own 
IT  systems.  In  addition,  the  participating  countries  might  find  themselves 
working  in  parallel  to  develop  their  own  systems,  without  valuable  input  from 
others. In other words, the lack of communication and coordination (facilitated 
so far by the programme), could lead to a duplication of efforts and investments, 
as well as developing systems that are not interoperable. Participating countries 
would invest their resources to design and develop their IT systems individually, 
instead  of  adopting  a  cooperative  approach  (whereby  resources  are  pooled, 
with an added value for all).  

  Previous investments made under Customs 2020 particularly on IT will be lost. In fact, 
the  systems  developed  at  EU  level  would  become  obsolete  and  inoperative  in  the 
short-medium  term  due  to  the  lack  of  maintenance  support  by  the  programme. 
Therefore,  the  efforts  made  so  far  in  the  design,  development,  operation  and 
maintenance of those systems would be lost investments. 

  The  lack  of  support  from  the  programme  could  also  lead  to  a  loss  of  collection  of 
import  duties,  as  customs  officials  would  not  receive  the  necessary  support  to  dully 
carry out their tasks.  

The above comments would, to some extent, also be relevant for the baseline scenario, in 
which  the  budget  for  IT  capacity  building  and  cooperation  would  be  drastically  cut. 
Nevertheless,  on  the  positive  side,  this  budgetary  cut  under  the  baseline  scenario  could 
force  the  programme  to  discover  new  flexible  working  methods  which  may  still  result  in 
relative efficiency of the programme. For instance:  

  The  use  of  new  technologies  such  as  videoconferences  to  replace  face-to-face 

meetings. 

However,  whereas  these  actions  would  save  costs  in  the  framework  of  programme  (e.g. 
related to accommodation, travel, daily allowance and the organisation of events), it may be 
to the detriment of the effectiveness that goes accompanied with meetings in person. 

As  regards  policy  option  1  (under  which,  due  to  the  budgetary  cut  of  30%,  some  of  the 
existing  and  ongoing  systems  would  have  to  be  stopped  leading  to  a  write-off  of 

293 

 
 
approximately EUR 165 million (ISC2 included) of investment and operational costs incurred 
under  Customs  2020,  and  cooperation  would  be  limited),  the  comments  –  especially  as 
regards IT – made above with respect to the discontinuation scenario, are equally applicable 
(cf.  the  substitution  costs  and  lost  investments).  In  addition,  also  under  this  option  the 
programme would need to be more creative in order to compensate the budget constraint: 

  For example, the programme would need to identify other programmes to rely on in 
order to outsource part of the support usually provided to the participating countries, 
or  pool  resources  with  such  programmes  to  provide  the  most  complete  support 
possible.  The  dependencies  could  lead,  however,  to  a  loss  in  efficiency,  as  the 
objectives met would be narrower and dependent also on the priorities of the other 
partners.  

  On the other hand, the limitation on the participants (i.e. in policy option 1 only the 
EU Member States would be able to partake in the activities of the programme) would 
have negative consequences on the efficiency of time dedicated to reaching a specific 
solution.  In  fact,  it  is  likely  that  the  participants  would  spend  more  time  to  solve 
problems and identify solutions as the knowledge base would be reduced (i.e. experts 
on a specific topic would not be invited to the activities, even on an ad-hoc basis). 

As  for  policy  option  2,  this  policy  option  represents  the  natural  evolution  of  the  current 
programme, but with more efficiency (and a budget increase of 136% in comparison to the 
current  budget).  This  would  enable  the  programme  to  organise  the  activities  required  to 
duly support the participating countries’ needs: 

  The new tool joint operations would enable the countries to pool resources to conduct 
thorough and agile actions. Participating countries would, in this sense, not only save 
economic resources but also time. In this sense, this tool would bring improvement to 
processes  and  general  savings,  leading  to  more  efficiency  overall.  Nevertheless,  the 
launch  and  organisation  of  joint  operations  would  likely  to  entail  some  initial 
investments. 

 

In  addition,  the  enhanced  operational  cooperation  would  be  further  augmented 
through two specific tools:  

  First, expert teams would be reinforced in policy option 2 as they would receive 
the  necessary  financial  support  to  develop  themselves.  The  lack  of  allocated 
funding to this tool would not limit their creation nor the full potential of their 
output.  Such  efficiency  gain  would  actually  increase  in  policy  option  3,  where 
expert teams would benefit from a larger financial envelope.  

  Second,  policy  option  2  introduces  a  purpose-based  approach  to  conduct  one 
activity,  combining  different  tools,  which  would  lead  to  several  potential 
efficiency gains. On the one hand, participating countries adopting this approach 
would  need  a  single  approval  of  the  purpose  (i.e.  topic/overall  objective  to 
pursue)  to  implement  different  activities  with  the  same  purpose.  This  would 
translate  in  a  time-gain  and  a  reduction  of  the  administrative  burden.  The 

294 

 
 
processes  under  the  programme  would  hence  be  more  agile  and  efficient. 
Moreover, the participating countries in charge of a project would tend towards 
an  efficient  allocation  of  the  resources.  Indeed,  having  only  one  financial 
envelope  at  their  disposal  to  implement  the  different  activities  to  reach  the 
purpose of the project would force them to be more conscious in their spending. 
There  would  be,  however,  a  risk  that  the  task  is  not  carried  out  appropriately 
and  the  resources  would,  hence,  be  allocated  inappropriately  amongst  the 
different activities part of the project. TAXUD would be monitoring the projects 
to make sure that this risk of inefficiency is low (this risk also would exist under 
policy option 3 and policy option 4, but would be controlled by the Programme 
Steering Group and the EU Customs Administration respectively).  

  The possibility to invite a higher number of participants would imply both positive and 
negative  impacts  in  terms  of  efficiency.  On  the  one  hand,  an  increased  number  of 
participants  could  potentially  reduce  the  time  dedicated  to  identify  the  solutions  to 
the problems. On the other hand, the involvement of additional stakeholders, such as 
international  organisations,  could  entail  higher  costs  for  the  programme  (i.e. 
reimbursement  of  the  experts).  In  particular,  the  participation  of  international 
organisations  would  also  enable  efficiency  gains  as  the  outputs  created  at  EU  level 
would  be  aligned  with  international  frameworks,  avoiding  conflicting  or  duplicate 
policies originating from the EU and the international sphere.  

Those impacts concerning the participants are also applicable for policy options 3 (and 4). In 
particular,  the  ad-hoc  participation  of  interest  groups  and  civil  society  organisations  as  of 
policy option 3 could contribute to the acceptance by the wider public of the outputs from 
the  programme.  This  could,  for  example  reduce  the  communication  costs,  as  those 
stakeholders  would  act  as  multipliers  disseminating  the  outputs  of  the  programme  across 
the society. 

Further, in policy option 3: 

  The  participating  countries  would  be  able  to  benefit  from  larger  resources  for  their 

purpose-based projects as they would be able to co-finance them. 

  The  Programme  Steering  Group  would  bring  advantages  in  terms  of  efficiency.  This 
entity  would  be  in  charge  of  the  management  of  the  purpose-based  projects  and 
ensure the sharing of the outputs amongst all participating countries.  

 

In terms of the broader geographical scope under this policy option, this would enable 
higher contributions to the budget for specific activities, partially counter-balanced by 
marginally higher management costs (i.e. the management of the programme will be 
slower  as  a  larger  number  of  participating  countries  will be  involved  in the decision-
making).  The  time  spent  on  management  could,  however,  be  compensated  by  the 
increased efficiency provided by the Programme Steering Group.  

In  addition,  policy  option  3  would  bring  major  changes  in  comparison  to  the  current 
programme, and would therefore have considerable impacts: 

295 

 
 
  This policy option aims to support Member States to become a modern administration 
that  anticipates  change  and  has  the  flexibility  to  react  when  facing  urgent  customs 
issues. If achieved, this vision would enable a swift and less costly achievement of the 
results in the long-term. Nevertheless, to reach that point, significant economic efforts 
would be required (185% budget increase compared to the baseline, 151% increase in 
current prices compared to the current programme).  

 

In addition, in terms of activities, policy option 3 introduces innovative tools such as a 
vision  group  (also  part  of  policy  option  4).  The  main  aim  of  this  group  would  be  to 
foresee  future  trends,  challenges  or  problems  having  an  impact  on  customs.  In 
essence,  the  group  could  present  solutions  to  the  issues  identified,  solving  them 
before they occur, or at least, mitigating their consequences, ensuring savings in terms 
of  time  and  economic  resources.  Setting  up  this  vision  group  would  entail 
expenditures in terms of salaries and human capacity, which however are expected to 
be rather limited (EUR 7.7 million over 7 years)327.  

  Lastly,  one  new  funding  model  would  be  introduced  (also  being  relevant  in  policy 
option  4):  awards.  This  alternative  funding  model  would  be  given  mainly  under  the 
context  of  the  vision  group,  linked  to  innovation  for  example.  This  funding  model 
could  bring  efficiency  gains  as  the  output  would  benefit  the  participating  countries, 
without spending their monetary or time-related resources.  

The impacts of policy option 4 in terms of efficiency are quite close to those of policy option 
3,  as  previously  explained.  Nevertheless,  this  policy  option  introduces  a  few  changes  in 
comparison to the rest:  

  Notably, the efficiency gains achieved through the EU Customs Administration would be 
increased,  as  it  would  enable  a  central  implementation  of  the  EU  customs  policy, 
including  the  management  programme.  In  particular,  its  IT  department  would  ensure 
the  central  development  of  the  necessary  IT  components,  including  the  EIS-related 
national ones. This would lead to monetary savings due to economies of scale and the 
learning  curve effect,  as  well  as  because  the  interoperability of  the  systems  would be 
ensured.  In  fact,  the  savings  are  estimated  between  15%  and  25%  of  the  amount  it 
would take to develop the components in a decentralised approach.  

  Likewise, the sandbox, a new activity under this policy option, would avoid the possible 
negative consequences of testing solutions. This new activity type would provide a safe 
environment to test innovative solutions, ensuring an efficient and positive result when 
the solution is ready to deploy.  

  As  for  the  funding  models,  economic  operators  would  be  able  to  contribute  to  the 
programme  through  PPPs.  This  would  entail  that  the  budget  available  for  certain 
activities  and/or  projects  would  increase.  At  the  same  time,  this  new  funding  model 

327 The vision group is composed of representatives of the participating countries, and additional stakeholders 
invited on an ad-hoc basis. 

296 

 
 
                                                      
would  slow  down  the  decision  making  process  as  the  point  of  view  of  the  economic 
account. 
operators 

contributing  would 

taken 

need 

into 

be 

to 

297 

 
 
Conclusion 

The table below summarises the advantages and disadvantages during the next programming period of each policy option compared to the 
current  situation  with  respect  to  the  evaluation  criterion  “efficiency”.  This  table  allows  for  a  clear  and  concise  overview  of  the  detailed 
evaluation carried out above. 

Table 33 – Expected impacts on efficiency of the policy options 

Advantages 

Disadvantages 

NC 

  Efficient and innovative working methods. 

BS 
PO1    As BS; 

  Focus of resources in the main target group: customs 

administrations. 

  Loss of investments made for all EIS; 
  Additional costs for the participating countries to compensate. 
  Legacy systems risk potentially becoming obsolete in the long run. 
  Write off of a minimum of EUR 165 million of investment and 
operational costs incurred under Customs 2020 programme; 

  Legacy systems would become obsolete quickly; 
  Narrower achievement of objectives ; 
  No external expertise could increase the time needed to reach 

solutions. 

Rating 
-3 

-2 
-2.5 

PO2    Increased number of participants would reduce the time to find 
solutions, increase the acceptance of outputs amongst 
stakeholders, and ensure that the outputs are aligned with the 
international frameworks; 

  More enhanced operational cooperation would reduce the 
administrative burden and enable participating countries to 
conduct an activity swiftly. 

PO3    As PO2; 

  The vision group would identify trends and challenges as well as 

possible solutions, ensuring savings in terms of time and 
economic resources; 

  A broader geographical focus would entail costs in terms of time 

2 

(longer decision-making processes); 

  Risk of inefficient management of the financial envelope for the 

purpose based approach; 

  An increased number of participants could entail higher costs (i.e. 

reimbursement of external experts). 

  As PO2; 
  Setting up the vision group would entail investments in terms of 

1.5 

salaries and human capacity; 

  The creation of the Programme Steering Group would entail 

  The creation of the Programme Steering Group would enable an 

significant financial, human and time related costs; 

efficient management of the programme; 

  The handover of the programme management from TAXUD to the 

  Awards would make the programme more efficient. 

Programme Steering Group might create overlaps at first.  

298 

 
 
 
 
Advantages 

Disadvantages 

PO4    The sandbox would avoid possible negative impacts, ensuring an 
efficient and positive result when the tested solutions are 
deployed; 

  PPPs might slow down the decision making process; 
  The creation of the EU Customs Administration would entail 

significant financial, human and time related costs. 

  The EU Customs Administration would enable an efficient 

management; 

  The IT department would lead to monetary and time savings. 

Source: 

Rating 
2 

Deloitte 

299 

 
 
 
7.5 Feasibility 

Introduction 

The assessment of the feasibility of the policy options is key to determine which obstacles 
will be faced in the implementation of the policy options identified. According to the Better 
Regulation Toolbox, we will take into account the following three dimensions of feasibility: 

  Technical  feasibility:  technological  and  technical  constraints  may  not  allow  for  the 

implementation, monitoring and/or enforcement of theoretical options. 

  Political  feasibility:  options  that  would  clearly  fail  to  gather  the  necessary  political 
support for legislative adoption and/or implementation could also be discarded.  

  Legal feasibility: the policy options should respect the principle of conferral, as well as 
the  EU  Treaties  (and  relevant  international  agreements)  and  ensure  respect  of 
fundamental rights. The legal obligations stemming from both primary and secondary 
EU legislation should also be taken into account. 

Overall, it should be highlighted that all cases are feasible, although the level of work and 
investment might be higher in respect to specific changes. In fact, the below description will 
mainly  highlight  the  potentially  delicate  matters  that  will  require  more  attention,  even 
though  they  will  be  feasible  one  way  or  another.  Moreover,  keep  in  mind  that  the 
assessment  and  consequent  scores  of  the  options  are  based  on  a  comparison  with  the 
current situation. In this line, the feasibility of all options will generally be lower than that of 
the current situation (scored 0 as per the Better Regulation Guidelines) as it entails changes 
to the status quo. 

Assessment 

Technical feasibility 

The discontinuation of support from the programme (i.e. no EU intervention) would heavily 
impact  the  IT  capacity  building.  The  development,  maintenance,  support,  and  quality 
control of the existing components of the EIS strongly depend on the programme’s budget. 
Hence, a discontinuation of the programme would make it technically infeasible to continue 
with  the  existing  IT-systems  in  the  long  run.  Indeed,  since  there  would  no  longer  be  a 
maintenance  support  by  the  programme,  the  IT-systems  developed  at  EU  level  would 
become obsolete and inoperative. 

These  impacts  also  apply  to  the  baseline  scenario  and  policy  option  1  where  the  limited 
budget will make the operation and maintenance of some of the IT systems challenging in 
the short term and impossible in long run.  

As regards policy option 2: 

  The  introduction  of  joint  operations  (also  relevant  for  policy  option  3  and  4),  might 
raise  some  technical  feasibility  issues.  In  order  to  implement  this  activity,  the 

300 

 
 
participating  countries  concerned  would  need  to  make  an  effort  in  order  to  pool 
resources and work together.  

  Moreover,  policy  option  2  reinforces  the  expert  teams  and  introduces  the  purpose 
based  approach.  The  implementation  of  this  approach  is  not  expected  to  raise 
technical  issues.  It  implies  that  a  group of  countries  would  work  together  (similar to 
expert  teams).  Participating  countries  are  already  familiar  with  this  kind  of 
cooperation (e.g. through the expert teams), and would likely implement this new tool 
without  any  major  issues.  If  anything,  the  organisation  for  assigning  the  financial 
envelopes  for  different  projects  will  need  some  reflection.  In  particular,  it  would  be 
extremely  important  to  establish  the  objective  criteria  to  grant  the  projects.  Taking 
into account the significant financial envelope for these projects (32.2 million EUR), an 
objective selection process would be essential in order to avoid any possible tension 
amongst  the  participating  countries.  Likewise,  this  approach  would  require  clear 
guidelines  to  ensure  financial  coordination  between  the  participating  country  in 
charge of the management of the envelope and the rest of countries. 

With respect to policy option 3, the creation of the vision group would be feasible, although 
its  management  would  raise  some  concerns  due  to  the  large  number  of  representatives 
involved, as it would include one representative of each participating country.  

While  the  awards  introduced  under  policy  option  3  (also  of  relevance  for  policy  option  4) 
would not raise major issues, the new funding model under policy option 4, the PPPs, would 
likely  be  problematic.  For  the  implementation  of  the  PPPs,  an  agreement  amongst  the 
participating countries and the private sector would be needed. Such agreement would be 
technically possible but challenging as the two parties would need to agree on the terms of 
the partnership.  

Finally, in terms of governance, the setting of the EU Customs Administration (policy option 
4)  would  be  more  complex  and  less  feasible  in  the  short term.  The Member  States  would 
need  to  agree  on  the  need  for  such  new  body  and  find  a  legal  framework  to  support  its 
creation. 

Political feasibility 

The Customs Regulation is adopted through ordinary legislative procedure. This means that 
it  requires  the  approval  of  both  the  European  Parliament  and  the  Council  and,  thus,  the 
political implications are an important aspect in terms of the policy option’s feasibility. Due 
to  the  fact  that  the  Council  is  currently  composed  of  the  representatives  of  the  28  EU 
Member  States,  the  political  feasibility  is  dependent  on  support  not  only  at  European 
Commission  level,  but  equally  member  state  level.  With  a  view  to  the  fact  that  Member 
States  maintain  shared  but  also  different  strategic  priorities  in  customs  cooperation,  the 
future Customs programme needs to ensure that there is “something in it for everyone” in 
order to be politically feasible. The political feasibility of each option will hence also depend 
on the extent to which the strategic priorities are addressed in the programme. The political 
feasibility  would  thus  depend  on  the  support  from  the  three  institutions:  European 
Commission, European Parliament, and Council. 

301 

 
 
Overall, the  baseline  scenario  should  not  present  many  constraints  a  political  level  as  it  is 
built on the same basis as the current programme. Nonetheless, the budgetary cut, and the 
cut in the number and frequency of  activities as a result thereof, raises concerns as it will 
make the collaboration less effective (see section 7.3 above), therefore it may be perceived 
as less interesting. 

The latter would also be the case for policy option 1, although to an even greater extent as 
the budget decrease would be more significant (30%). Moreover, policy option 1 could also 
be  negatively  impacted  by  the  decrease  of  the  geographical  focus.  Although  the  decision 
makers  would  still  be  able  to  partake  in  the  programme,  excluding  a  part  of  the  current 
participating  countries  may  create  unwanted  tensions.  This  might  make  option  1  less 
politically feasible, since Member States may want to avoid such a tension. 

Broadening the geographical focus, which is the case under policy option 2, 3, and 4, may 
however  not  be  evident  from  a  political  view  either  since  this  would  require  the  political 
support  of  all  Member  States.  However,  as  the opening to  other  third  countries  would  be 
dependent  on  a  collaboration  agreement  and  not  automatically,  allowing  for  all  Member 
States to have sufficient time for thought and negotiations, this could be less controversial. 
Nonetheless,  this  aspect  would  entail  a  long  and  burdensome  process  still  making  its 
feasibility complex 

Policy options 2, 3 and 4 might also encounter political resistance to the further enhanced 
operational  cooperation  and,  in  particular,  the  purpose-based  projects.  Some  countries 
might  be  more  involved  in  these  and  dedicate  more  efforts  (especially  in  policy  option  3 
through the co-financing) to the production of outputs, while others would not and would 
still receive the results. This could be perceived as an unfair approach and might be difficult 
to accept at a political level. Likewise, the difference in the financial envelope allocated to 
the  diverse  purpose-based  projects  could  also  create  tensions  between  participating 
countries. However, we consider that these circumstances have a low level of probability to 
happen, and they would mitigate each other. 

Further, in particular as regards policy option 4, two aspects could raise political concerns: 

  Taking  on PPPs  which  could entail  giving  a  voice  or  a  specific  right  over  outputs  to 
private stakeholders would be politically sensitive, as shown by the low support from 
respondents to the survey (20%). 

  The creation of the EU Customs Administration could be the most politically difficult 
change.  As  illustrated  in  the  results  of  the  survey,  there  is  no  governance  fully 
supported by all participating countries. The respondents considered the governance 
fully  centralised  at  TAXUD  level  and  hybrid  (European  Commission  and  Member 
States) as equally facilitating the functioning of the programme. 

Finally,  the  discontinuation  of  the  programme  would  raise  controversy.  Based  on  the 
consultation of the participating countries, the majority of them stated being satisfied with 
the  programme.  All  the  participating  countries  that  replied  to  the  survey  said  that  the 
programme responded to their cooperation needs with the other  customs administrations 

302 

 
 
to a considerable extent. Consequently, terminating the programme would go against their 
needs and would require them to make additional efforts (financial and other) to fulfil them 
on their own. This would likely have negative impacts at a political level. 

Legal feasibility 

The legal basis under which the Union Customs Code was adopted is Art. 33, Art. 114 and 
Art.  207  of  the  TFEU.  These  articles  deal  with  customs  cooperation,  functioning  of  the 
Internal Market and common commercial policy. 

The  current  Customs  2020  programme  covering  the  period  2014  to  2020  is  based  on  the 
sole  Art.  33  of  the  TFEU,  which  relates  to  ‘measures  in  order  to  strengthen  customs 
cooperation  between  Member  States  and  between  the 
latter  and  the  European 
Commission’. 

The  other  legal  bases  of  the  UCC,  i.e.  Art.  114  and  207  could  also  relevant  for  the  future 
Customs programme: 

  Art. 114 TFEU as regards ‘measures for the approximation of the provisions laid down 
by  law,  regulation  or  administrative  action  in  Member  States  which  have  as  their 
object the establishment and functioning of the Internal Market’ ; 

  Art.  207  TFEU  as  regards  ‘agreements  with  one  or  more  third  countries  or 

international organisations’. 

It is noteworthy to mention that customs administrations also benefit from the support of 
other  programmes  to  carry  out  their  tasks.  Those  programmes  are  based  on  other  legal 
basis: 

  Hercule  III  programme  which  is  based  on  Art.  325  TFEU  and  managed  by  OLAF 
supports actions aimed at countering fraud, corruption and other illegal activities are 
carried on under; 
Internal  Security  Fund  which  is  based  on  Art.  77  TFEU  and  managed  by  DG  HOME 
supports activities related to border checks. 

 

With  regards  to  the  development  of  the  Customs  programme  beyond  2020,  the  legal 
feasibility  analysis  looks  at  whether  the  future  scope  of  proposed  options  fall  within  or 
beyond  the  understanding  of  “customs  cooperation”  within  the  meaning  of  this  Art.  33 
TFEU.  Where  proposed  policy  options  would  entail  a  scope  or  actions  that  go  beyond  the 
Art. 33 TFEU, the legal feasibility within the other articles (114 and 207) of the TFEU will be 
assessed. 

Both baseline  and  Constrained  (policy  option  1)  scenarios  would  presumably  continue  to 
be based on the legal basis on which the current programme relies, which is Art. 33 TFEU. 
This  legal  basis  supports  the  current  activities  of  the  programme  and  will  continue  to 
support them under the baseline and Constrained policy option. 

Under the Continuity “plus” (policy option 2) scenario, is more ambitious than the previous 
ones  and  new  components  of  the  programme  (cf.  the  “plus”  element)  may  question  the 

303 

 
 
legal  basis.  The  increase  in  budget  would  allow  for  new  activities  built  on  the  current  IT 
model  and  oriented  towards  future  needs  (UCC  and  ICS2)  and  emerging  challenges  and 
trends  in  customs  (new  technologies)  with  expert  teams  being  reinforced  and  a  room  for 
innovation. The “plus” element may result in activities that go beyond customs cooperation 
as understood within the meaning of Art. 33 TFEU. For instance, initiatives at the crossroads 
of customs and e-Commerce, data analytics and Blockchain may call for an additional legal 
basis on Art. 114 TFEU.  

In  addition,  the  geographical  focus  of  this  policy  option  would  be  broader,  and  thus, 
collaboration  agreements  with  EFTA  countries  would  be  negotiated  and  signed, 
necessitating the use of Art. 207 TFEU. 

Whereas main activities of the programme would still be based on Art. 33 TFEU, depending 
on  the  extent  to  which  the  activities  proposed  under  the  purpose-driven  approach  and 
expert  groups  go  beyond  this  legal  basis,  this  may  result  in  challenges  to  implement 
priorities identified. However, with a view to the limited room to manoeuvre into new areas 
of  cooperation  the  need  to  broaden  the  legal  basis  upfront  (beyond  Art.  33  TFEU)  is  not 
deemed necessary.  

In  the  voluntary  operational  cooperation  (policy  option  3)  scenario,  the  chances  that 
future  activities  go  beyond the  meaning  of  Art. 33  TFEU  are  considerable,  as  result  of  the 
emphasis  on  enhanced  operational  cooperation328,  purpose-based  projects  and  voluntary 
decentralised  contributions  from  Member  States.  Purpose-based  projects  initiated  by 
certain Member States cannot yet be reasonably foreseen, but a Programme Steering Group 
will ensure that these project are aligned with common strategic priorities. In case Member 
States  chose  to  cooperate  on  customs-related  activities  or  projects  that  go  beyond  the 
scope of Art. 33 TFEU, a broader legal basis may be needed to accommodate such demands. 
Just as in the case of Option 2, initiatives at the crossroads of customs and other policy fields 
(new technologies) may necessitate to reconsider the legal basis provided by  Art.  33 TFEU 
and to extend it to Art. 114 TFEU.  

With regard to the geographical scope policy option 3, collaboration agreements with EFTA 
and key trade partners (e.g. USA, Japan, and China) would have to be negotiated and signed, 
necessitating the use of Art. 207 TFEU. 

Finally,  under  the  Integration  (policy  option  4)  scenario,  the  legal  basis  would  require  a 
thorough  review  for  many  reasons.  First,  this  policy  option  leads  to  a  centralised  EU 
Customs  Administration  for  managing  the  programme  and  providing  support  to  the 
participating  countries  in  different  customs  issues  and  cooperation  activities,  including  IT. 
Whereas  the  legal  basis  of  Art.  33  TFEU  remains  valid  at  first  sight  for  the  content  of  the 
activities  carried  on,  the  centralised  management  will  need  to  be  carefully  assessed  in 

328 In the context of this policy option, ‘enhanced operational cooperation’ should however 
not be understood as ‘enhanced cooperation’ in the meaning of Art. 20 TEU. 

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accordance with Art. 5 TEU. Under this principle, “the content and form of Union action shall 
not  exceed  what  is  necessary  to  achieve  the  objectives  of  the  Treaties”.  The  exclusive 
competence  conferred  by  the  Treaties  to  the  Union  for  the  purpose  of  establishing  a 
customs union does not guarantee that the proportionality requirement will be met. 

Second, the proposed central administration will be responsible for specific customs issues 
in the fields of risk management, digital economy, Single Window, fight against counterfeit 
goods, and joint operations. The scope of these activities are also calling for a broadening of 
the  legal  basis,  from  Art.  114  TFEU  for  new  technologies  to  Art.  207  TFEU  for  the  fight 
against counterfeit goods. 

Finally, the fact that the EU Customs Administration would be entitled to represent the EU 
for  specific  cooperation  with  third  countries  and  international  organisations  (WTO  and 
WCO) on Customs matters would have to follow the procedure set out in Art. 207 TFEU. 

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Conclusion 

The table below summarises the issues THAT the options will trigger in terms of feasibility compared to the current situation. This table allows 
for  a  clear  and  concise  overview  of  the  detailed  evaluation  carried  out  above.  The  rating  are  all  negative  because  all  options  will  need  for 
changes. 

Table 34 – Expected impacts on feasibility of the policy options 

Disadvantages 

Rating 

NC 

BS 

PO1 

PO2 

PO3 

  Could be very politically controversial 

  As no EU intervention. 
  The prioritisation of activities might create some tensions between the participating countries. 

  As BS 
  The decrease of the geographical focus could raise political concerns 

  The purpose based approach might raise some issues from a technical point of view 
  The purpose-based projects and the broadening of the geographical focus could be politically controversial 
  Purpose based approach may result in activities that demand wider legal basis (to be checked) 

  As PO2 
  The creation of the vision group could entail some issues in terms of human resources and management 
  The awards might raise some technical issues 
  Purpose based approach may result in activities that demand wider legal basis (to be checked) 

PO4 

  As PO3 
  The creation of the EU Customs Administration might raise some political discrepancies amongst the 

participating countries 

  Legal basis of Art. 33 TFEU may not be sufficient from legal feasibility perspective 
  The PPPs could raise concerns at a political level 
  Legal feasibility to be reviewed, with regards to legal basis as well as subsidiarity and proportionality principles 

Source: 

-3 

-2 

-2.5 

-1 

-1.5 

-2 

Deloitte 

306 

 
 
 
7.6 Relevance 

As  per  the  Better  Regulation  guidelines,  “Relevance  looks  at  the  relationship  between  the 
needs and problems in society and the objectives of the intervention”329. Typically, relevance 
is a criterion used in the context of evaluations, as we are in a dynamic context and we need 
to ensure constant pertinence of EU actions. Indeed, certain objectives identified in the past 
to satisfy the needs and problems of that time can become irrelevant due to the evolution 
of things.  

As new needs and problems arise, it is important that EU intervention stays aligned to these. 
Accordingly  objectives  and  options  have  to  be  designed  to  respond  to  the  problems  and 
needs  for  the  future  programming  period  (2021-2027).  By  design,  each  of  the  proposed 
options is built to meet the programme objectives (chapter 4), based on what the problems 
and  needs  are  expected  to  be  in  the  period  2021  to  2027  (chapter  3)330.  Consequently  all 
policy options proposed are considered as being relevant). 

Although the programme is only intended to satisfy the needs of customs administrations, 
this in turn provides customs administrations with the tools to satisfy the needs of traders 
and  society  as  a  whole. This approach  is  in  line with that  of the  effectiveness assessment. 
Operational objectives and specific objectives are directly linked to customs administration’s 
needs,  while  general  objectives  tackle  the  wider  needs  of  society331.  Therefore,  as  the 
objectives of the intervention are based on the needs of society, and the options  are built 
taking into account these objectives, it should be noted that all policy options are relevant 
by principle.  

The only exception could arise if, due to the important budgetary constraints, the European 
Commission  would  have  to  adapt  the  objectives  of  the  programme  to  make  them  more 
feasible. In this case, the programme would not aim to fully achieve the needs and problems 
in society and, thus, would not be relevant. 

In line with this explanation, the study team considers that no further evaluation is needed 
for this criterion under the impact assessment of the post-2020 Customs programme. 

329 European  Commission  Staff  Working  Document,  Better  Regulation  Guidelines,  Chapter  VI  Guidelines  on 
evaluation  (including  fitness  checks),  SWD  (2017)  350,  https://ec.europa.eu/info/sites/info/files/better-
regulation-guidelines.pdf 

330 N.B.:  these  needs  have  been  identified  through  interviews  conducted  with  customs  administrations  and 
other  stakeholders,  discussions  with  experts  during  Customs  Project  Groups,  and  surveys  addressed  to  all 
current participating countries. 

331 As  previously  presented,  the  general  objectives  are:  to  contribute  achieving  the  full  potential  of  the 
customs union, to ensure EU financial interests and safeguard the budget, to prevent illicit trade and fraud in 
customs  transactions,  to  prevent  illicit  trade  in  restricted  and  prohibited  goods  threatening  EU  security, 
environment,  health  and  safety,  to  exploit  the  full  potential  of  the  Single  Market  and  foster  EU 
competitiveness. 

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7.7 EU added value 

Introduction 

The notion of EU added value refers to effects for which it can reasonably be argued that 
these  are  due  to  EU  intervention,  over  and  above  what  could  reasonably  have  been 
expected from national actions by Member States.  

The  evaluation  of  EU  added  value  builds  on  the  findings  from  other  evaluation  criteria; 
effectiveness and efficiency in particular332:  

  As  discussed  under  section  7.4  on  efficiency  above,  the  mere  existence  of  a 
programme for administrative cooperation on customs matters at EU level provides 
a  useful  environment  for  cooperation  and  coordination  of  national  actions,  which 
would otherwise require bilateral or multi-lateral interactions, with higher costs and 
more  coordination  issues.  The  customs  environment  supports  building  of  trust 
among  national  customs  administrations  and  creates  networks  among  customs 
officials across the EU, which are crucial for a smooth functioning of customs union; 

  The Customs programme focuses the EU intervention on setting up the mechanisms 
and  IT  tools  for  administrative  cooperation,  which  in  turn  supports  national 
administrations  in  preventing  illicit  trade  and  fraud  in  customs  transactions.  The 
implementation of new proposed EU customs legislation and of any future customs 
legislation  in  this  field  will  strongly  depend  on  the  Customs  programme  for  the 
development,  operation  and  maintenance  of  IT  tools  but  also  for  developing 
common ways of working.  

In addition, the EU added value also considers the element of synergy, i.e. where EU action 
is  necessary  to  complement,  stimulate  and  leverage  action  to  reduce  disparities,  raise 
standards and create synergies333. Synergies are defined as “the interaction or cooperation 
of  two  or  more  organisations,  substances  or  other  agents  to  produce  a  combined  effect 
greater than the sum of the separate effects334”. In the context of the Customs programme, 
this  concept  translates  into  coordination  of  actions,  organisation  of  possible  common 
activities and/or  development of  topics  and  tools  for  intervention  with other programmes 
and instruments.  

In  particular,  synergies  for  the  Customs  programme  have  to  be  researched  with  other  EU 
programmes and instruments primarily, and first and foremost with those managed by DG 
TAXUD. In this respect: 

  The  Fiscalis  programme  is  the  most  obvious  example  of  a  programme  presenting 
synergies  with  Customs.  The  two  programmes  already  in  the  current  programming 

332 Better Regulation Toolbox, p. 353 

333 Better Regulation Toolbox, p. 353 

334 See: https://en.oxforddictionaries.com/definition/synergy 

308 

 
 
                                                      
period share the same management and procedural approach, as well as the same 
type  of  joint  actions  and  a  similar approach to training  and  administrative  capacity 
building.  Furthermore,  the  two  programmes  have  joint  funding  of  common  IT 
components  (such  as  the  Common  Communication  Network)  and  the  same  IT 
management approach and common horizontal support mechanisms. In the future, 
these  elements  are  likely  to  stay  and  be  reinforced  (such  as  the  development  of 
common IT components), while thematic areas for shared actions between the two 
programmes are already emerging (e.g. in relation to the implementation of the new 
e-Commerce VAT package) and may further increase in the future (e.g. on taxation of 
energy products for environmental policy objectives).  

  Customs  matters  are  also  in  the  scope  of  action  of  the  SRSS  (Structural  Reform 
Support Service), which already activates regularly the Customs programme to fund 
technical assistance projects, and is likely to continue to have the same need in the 
next  programming  period.  The  Customs  programme  can  thus  be  leveraged  to 
support 
in  customs 
administrations in those Member States that request intervention.  

the  development  of  administrative  capacity 

further 

  Additional synergies at operational level could be exploited with other programmes 
and  policy  areas  related  to  security  and  border  control.  Such  effort  can  include 
synergies and interoperability between information systems (e.g. access to customs 
data  stored  by  DG  TAXUD  by the  future  office  of  the  European  Public  Prosecutor’s 
Office335.  It  can  also  entail  a  shared  security  and  safety  agenda  and  coordinated 
border  management  at  operational  level  across  DGs  (e.g.  DG  HOME,  DG  SANTE, 
OLAF,  etc.),  which  would  allow  exploiting  closer  cooperation  between  customs 
administrations  and  other  agencies  and  authorities,  including  law  enforcement 
authorities,  supporting  the  progressive  broadening  of  the  missions  and  tasks  of 
customs administrations (as described in chapter 3) 

instruments,  the 

In  addition  to  EU  programmes  and 
international  dimension  of 
administrative  cooperation  in  customs  matters  should  be  taken  into  consideration.  As 
described  under  section  7.2  on  coherence,  currently  both  the  EU  and  other  international 
organisations (mostly the WCO, WTO,  but also third countries with free trade agreements 
with  the  EU)  have  to  be  considered  in  the  framework  of  in  customs-related  initiatives 
(including  administrative  cooperation  and  administrative  capacity  building).  The 
implementation of orientations or decisions taken is better addressed at EU level, especially 
to  allow  for  swift  solutions.  In  this  context, the  Customs  programme  can  be  leveraged  for 
facilitating the exchange of data between the EU (and Member States’) and third countries’ 
IT  systems  and  to  develop  operational  cooperation,  supporting  the  protection  of  the  EU’s 
financial  interests.  In  addition,  the  Customs  programme  (especially  if  defined  by  a  strong 
international dimension) could provide the framework for the EU to steer the global scene 

335  See:  http://www.europarl.europa.eu/legislative-train/theme-area-of-justice-and-fundamental-rights/file-
european-public-prosecutor-s-office  

309 

 
 
                                                      
and  to  guarantee  the  interoperability  of  the  EU  (and  Member  States’)  IT  systems  for 
customs  with  those  of  third  countries.  This  could  also  lead  to  more  efficiency.  Such 
coherence and effectiveness could hardly be achieved by individual Member States alone.  

Assessment 

By definition, the discontinuation of the programme would bring no EU added value, entail 
additional  costs  for  participating  countries  in  terms  of  human  and  financial  resources, 
development of expertise, and more fragmentation of customs systems across the EU. This 
would undermine the very basis for administrative cooperation, and therefore the smooth 
cooperation and co-functioning of the customs union. Furthermore, no synergies with other 
programmes  and  instruments,  nor  with  the  activities  of  other  international  organisations 
could be pursued.  

The baseline scenario, by maintaining EU action in the field of administrative cooperation in 
customs-related  matters,  would  preserve  the  environment  and  framework  for  such 
cooperation  but  would  have  a  reduced  EU  added  value  compared  to  the  current 
programme:  

  A  definition  of  priorities  for  action  to  compensate  the  budgetary  cuts  would 
characterise  the  baseline  scenario,  as  identified  in  the  analysis  of  efficiency  and 
effectiveness. Hence, the baseline scenario would not allow the full implementation 
of the  IT  systems  necessary  to  support  the  implementation  of  recent  EU  legislative 
actions  (as  it  will  only  guarantee  the  continuation  of  the  2017  legacy  systems,  the 
UCC systems up to 2020 and the international projects while any developments and 
operations  regarding the  UCC  systems  after 2020,  as  well  as  ICS2  and CRMS  would 
need  to  be  stopped),  which  would  negatively  impact  the  fulfilment  of  the  legal 
requirements for  the full  implementation of  the  UCC  and the    smooth  cooperation 
and co-functioning of the EU customs administrations to achieve the full potential of 
the customs union.  

  Possible  synergies  with other programmes  and  instruments  would be  reduced.  The 
interaction  with  the  Fiscalis  programme  would  probably  remain,  as  the  Fiscalis 
programme  might  become  more  dependent  on  Customs  for  the  development  and 
IT  components.  However,  potential  synergies  and 
maintenance  of  common 
interactions with other programmes and services (such as the SRSS and other policy 
areas  and  organisations  involved  in  border  management)  for  developing  common 
ways of working and building administrative capacity would be weakened following 
the budgetary cuts under this policy option.  

  Similarly, the international dimension of the programme would be reduced, and so 
would  the  possibility  to  decrease  overlaps  and  promote  coherence  and 
complementarity of actions at international level.  

The same considerations are pertinent to policy option 1, which is characterised by an even 
larger  budgetary  reduction,  which  would  put  at  risk  even  the  maintenance  of  existing  IT 
systems,  hindering  existing  functionalities.  This  policy  option  would  only  allow  the 

310 

 
 
continuity  of  the  UCC  2017  legacy  systems,  while  any  developments  and  operations  with 
respect  to  the  UCC  systems  up  to  2020,  the  international  projects,  the  UCC  systems  after 
2020, as well as ICS2 and CRMS would need to be stopped). 

  The  main  added  value  of  this  programme  (i.e.  the  provision  of  a  framework, 
mechanisms  and  budget  for  customs  administrations  to  protect  the  EU  financial 
interest, to prevent illicit trade and fraud while supporting the Single Market and EU 
competiveness)  would  be  hindered  by  the  drastic  reduction  of  budget  and 
environment for soft cooperation (from expert teams to trainings and workshops).  

  Synergies  with  other  programmes  and  instruments  at  EU  level  would  be  seriously 
undermined, as well as the possibility to support the implementation of the UCC and 
any  new  EU  legislation  in  the  customs  field,  with  negative  consequences  for  the 
smooth  cooperation  and  co-functioning  of  the  EU  customs  administrations  in  the 
customs union.  

  Finally, the budgetary cuts would lead to a drastic reduction (if not discontinuation) 
of  international  activities,  and  the  related  possibility  to  decrease  overlaps  and 
promote coherence and complementarity of actions at international level.  

Conversely, the framework created by policy option 2 would support to a large extent the 
implementation of EU actions in the customs domain and Member States in their consistent 
implementation,  and  would  thus  increase  EU  added  value  as  opposed  to  the  programme 
today. As such: 

  The increased support for cooperation (from simple exchange of best practices and 
trainings  to  enhanced  cooperation  such  as  expert  teams  and  purpose-based 
projects)  are  likely  to  promote  alignment  of  customs  policy  implementation  and 
procedures across the EU. 

  The  introduction  of  new  tools  such  as  joint  operations  would  further  promote 
alignment of customs practices, which would be difficult to achieve otherwise. This 
would  support  Member  States  in  fighting  against  illicit  trade  and  fraud  and  in 
protecting the EU financial interest. 

  Policy  option  2  provides  resources  for  development  and  maintenance  of  all  UCC-
related  systems,  as  well  as  ICS2  and  CRMS,  but  also  for  the  investigation  of 
challenges  and  opportunities  originating  from  new  technologies  and  trends  in  the 
field  of  IT  development,  deployment,  operation,  maintenance,  support,  as  well  as 
quality assurance.  

  Furthermore,  it  provides  resources  and  a  framework  for  advancing  enhanced 
cooperation  and  administrative  capacity  building  (especially  if  compared  with  the 
two  previous  policy  options).  These  elements  strengthen  the  creation  and 
exploitation of synergies with other EU programmes and instruments, which would 
not be possible to achieve otherwise. Interactions with the Fiscalis programme could 
go  beyond  the  development  of  common  IT  components,  and  include  common 

311 

 
 
actions  and  training  (e-Commerce  could  be  an  initial  field  to  develop  this  type  of 
interaction, to be expanded in the future).  

  Similarly, resources available under this policy option would make it possible for the 
SRSS to activate the programme support further the development of administrative 
capacity 
in  those  Member  States  that  request 
intervention.  Collaboration  with  other  programmes  and  instruments  (such  as  DG 
HOME or the EPPO) would have to be decided based on respective needs.  

in  customs  administrations 

  Finally,  this  policy  option  supports  strategic  cooperation  with  relevant  non-EU 
countries and international organisations, which would then foster synergies in the 
international dimension.  

In  addition,  policy  option  3  gives  the  programme  more  flexibility  to  innovate,  respond  to 
rising issues, and opening the door to a more client-oriented approach. It fosters even more 
the principle of enhanced operational cooperation, via expert teams and co-funded purpose-
base projects. In addition, the vision group would be dedicated to strategic thinking, helping 
customs  administrations  to  have  a  more  proactive  and  forward-looking  approach.  Finally, 
the  creation  of  a  Programme  Steering  Group  would  further  support  the  sharing  of  results 
achieved. All these elements reinforce the environment and the framework for cooperation 
and coordination of national actions (which are at the core of the Customs programme).  

As such, policy option 3 would further increase the EU added value of the programme, in 
particular through following features: 

  Synergies with other EU programmes and instruments could be enhanced under this 
policy  option.  Interactions  with the  Fiscalis  programme  could  be  similar to  the one 
already described for the previous policy option (i.e. going beyond the development 
of common IT components), and include common actions and training (for instance 
on e-Commerce) or include a larger share of common activities. Similarly, resources 
available under this policy option would make it easier for the SRSS to activate the 
programme support further the development of administrative capacity in customs 
administrations  in  those  Member  States  that  request  intervention.  Collaboration 
with  other  programmes  and  instruments  (such  as  DG  HOME,  OLAF  or  the  EPPO) 
would  have  to  be  decided  based  on  respective  needs.  This  policy  option  also 
supports  strategic  cooperation  with  relevant  non-EU  countries  and  international 
organisations, which would then foster synergies in the international dimension.  

  The  introduction  of  a  stronger  focus  on  innovation  (via  the  vision  group  and  the 
awards)  not  only  encourages  customs  administrations  to  pursue  and  develop 
innovative solutions and tools and to learn from each other, but also to innovate in a 
more  coordinated  way  (for 
instance,  customs  administrations  for  different 
participating countries could submit a common solution to the challenge identified). 
This  type  of  cross-border  cooperation  is  not  very  common,  and  the  framework 
provided by Customs under this policy option could increase cross-border activities, 
which could hardly be developed without a well-established EU framework.  

312 

 
 
  The  Programme  Steering  Group  (while  requiring  some  time  and  costs  for  the 
implementation of the change in governance) entails a stronger role of participating 
countries  in  the  management  of  the  programme  and  in  the  coordination  and 
leveraging  of  activities  (soft  /  operational  cooperation  and  enhanced  operational 
cooperation).  This  would  likely  translated  into  a  more  participative  approach, 
meaning  higher  legitimacy  and  more  co-responsibility  for  cooperation  and  shared 
ways  of  working  developed  under  the  programme.  Ultimately,  this  could  lead  to 
stronger  trust  and  tighter  networks  among  national  customs  administrations  and 
with the European Commission, which are crucial for a smooth cooperation and co-
functioning  of  EU  customs  administrations  in  the  customs  union  and  could  be 
difficult to achieve otherwise.  

Finally, policy  option  4 includes and reinforces many of the elements of policy option 3. It 
strengthens  administrative  capacity  building,  by  increasing  the  amount  of  resources 
intended  for  this,  and  introduces  new  tools  supporting  the  implementation  of  innovative 
solutions  such  as the  sandbox.  Therefore,  the  same  arguments on  the EU  added  value for 
enhanced  cooperation,  capacity  building  and  the  potential  for  joint  innovation  for  policy 
option 3 apply:  

  A  similar  type  and  level  of  synergies  (possibly  even  higher)  with  other  EU 
programmes  and  instruments  as  in  policy  option  3  could  be  achieved,  as  the 
programme  provides  resources  and  mechanisms  to  define  and  implement  actions 
that leverage on shared scope and interests with those programmes.  

  The increased geographical scope and more vision to strengthen the EU’s position in 
the global customs sphere would create more synergies at international level (with 
OECD, other third countries and possibly other international organisations).  

  This policy option introduces a new form of governance with the creation of the EU 
Customs  Administration.  This  entity  is  directly  responsible  for  carrying  out  some 
implementation  of  the  EU  Customs  Academy  and  the 
activities  (e.g.  the 
development and maintenance of both central and national EIS-related components 
of IT systems). It is a major governance change, likely to require major time and costs 
(both at EU and at Member States’ level) to implement, but also large benefits. For 
instance, the development of the EIS-related national components at EU level via the 
EU Customs Administration is expected to produce economies of scale and learning 
curve effects (estimated between 15% and 25%) as well as increased interoperability 
of  systems,  which  could  hardly  be  achieved  otherwise.  In  addition,  the  creation  of 
the  Customs  Academy  is  expected  to  consolidate  the  curricula  and  to  align  the 
competencies and skills of Customs officers across the EU and to strengthen access 
to continuous training.  

313 

 
 
 
  
Conclusion 

The table below summarises the advantages and disadvantages during the next programming period of each policy option compared to the 
current situation with respect to the evaluation criterion “EU added value”. This table allows for a clear and concise overview of the detailed 
evaluation carried out above. 

Table 35 – Expected EU added value of the policy options 

NC 

BS 

Advantages 

Disadvantages 

  No environment for cooperation and coordination of 

national actions for implementation of EU  

Rating 
-3 

  Preserving environment for cooperation and coordination of national 

  Stop to development of UCC systems after 2020, ICS2 and 

-2 

actions for implementation of EU;  

CRMS;  

  Continuation of the 2017 legacy systems, the UCC systems up to 2020 

  Limited resources to support new EU legislation (for IT and 

and of international projects.  

all other types of actions);  

  Limited synergies with other EU programmes and 

instruments;  

  No synergies and coordination with international 

organisations.  

PO1    Continuity of UCC 2017 legacy systems only;  

  As BS, made stronger by less IT capacity (stop to 

Less resources than in the baseline for enhanced cooperation and 
administrative capacity building.  

developments and operations of UCC systems up to 2020, 
international projects, UCC systems after 2020, ICS2 and 
CRMS).  

-2.5 

1.5 

PO2    Availability of resources to support the implementation of new EU 

legislation (IT systems, ways of working, human capacity and training);  

  Synergies with other EU programmes and instruments;  
  Possibility to promote coherence and complementarity with actions at 

international level.  

PO3    As PO2;  

  Even stronger administrative cooperation;  
  Stronger: 

  Time and efforts needed for implementing the new 

2 

governance model.  

314 

 
 
 
 
 
 
Advantages 

Disadvantages 

Rating 

   focus on innovation and potential for common/shared innovation;  
  potential for EU synergies at EU and international level.  

PO4    As PO3, even stronger;  

  As PO3, but to a greater extent (larger organisational 

3 

  Vision to strengthen EU’s position in global customs sphere, producing 

costs). 

more synergies;  

  Stronger alignment of customs IT systems (at national level), HR skills 

and competences, operations and processes across the EU. 

Source: Deloitte  

315 

 
 
 
 
 
7.8 Proportionality 

Introduction 

The  aim  of  the  proportionality  criterion  is  to  assess  the  extent  to  which  each  option  is 
“limited  to  what  is  necessary  to  achieve  the  objectives  of  the  Treaties”.  This  is  typically  a 
principle  introduced to  “regulate the  exercise  of  powers”  and  to  ensure  that  “the  content 
and form of the action is in keeping with the aim pursued”.336 In the context of this study, 
the  expert  judgement  of  the  team  has  deemed  that  the  proportionality  of  the  options  is 
best assessed against the objectives of the programme, as they are more concrete to satisfy 
the current needs.  

As per the Better Regulation Guidelines, the proportionality of the options is evaluated on 
the basis of the compliance with the following three questions: 

  Whether the option goes beyond what is necessary to achieve the objectives of the 

programme satisfactorily; 

  Whether  the  scope  of  the  option  is  limited  to  those  aspects  that  Member  States 

cannot achieve satisfactorily on their own, and where the Union can do better; 

  Whether  costs  for  the  Union,  national  governments,  regional  or  local  authorities, 
economic  operators  or  citizens,  are  minimised  in  relation  to  the  objective  to  be 
achieved; 

  Whether  the  form  of  action  (choice  of  instrument)  is  as  simple  as  possible,  and 
coherent with satisfactory achievement of the objective and effective enforcement. 

From these four questions, two  are  already  addressed  by  other  criteria in this  assessment 
and will therefore not be dealt with in this section. Question number two is treated through 
the  EU  added-value  criterion,  and  question  three  is  considered  under  the  Efficiency 
criterion. Consequently, this section will look into whether the option goes beyond what is 
necessary to achieve the objectives satisfactorily, and whether it does so with a design that 
is as simple as possible.  

Concretely,  the  procedure  to  determine  if  the  options  are  proportional  will  involve  the 
following steps: 

  Establish if the option is sufficiently effective: as presented in section 7.3., all options 
are  effective  to  a  certain  extent.  However,  the aim  is  to  ensure that  the  objectives 
are achieved to a satisfactory level.  

  Determine if it goes beyond the objectives to be met: some of the options could go 

the extra mile, which can be beneficial, but not always required. 

  Estimate if the option is as simple as possible to achieve the objectives: this aspect 
will  need  to  be  done  after  the  prior  two  points  have  been  assessed  for  all  the 

336 See: https://eur-lex.europa.eu/summary/glossary/proportionality.html  

316 

 
 
                                                      
options,  as  it  will  require  comparing  those  options  that  have  complied  with  the 
previous two aspects, to identify the most simple one. 

Assessment 

Despite potentially being effective in the long-run, the discontinuation  of  the  programme 
would most likely not be so during the next programming period. The natural evolution of 
things leading to the achievement of the goals set takes time and has a level of uncertainty 
in terms of the degree to which the objectives can be satisfied. In this vein, the option of no 
intervention would be regarded as not proportional. 

The baseline and policy option 1 are designed on the basis of the current situation. As such, 
one  could  consider  them  proportional.  However,  the  budgetary  cuts  to  which  they  are 
submitted limits their level of effectiveness. Both would see the frequency of the activities 
reduced, limiting the attainment of results, and would have difficulties in maintaining the IT 
systems  necessary  to  support  the  implementation  of  customs  policy.  As  explained  in  the 
effectiveness  section,  these  aspects  would  entail  a  longer  time  span  to  reach  the  desired 
objectives  and,  in  case  of  IT  shortcomings,  could  even  go  against  the  general  objectives. 
Therefore, the baseline and policy option 1 would not be considered as proportional. 

Policy  options  2,  3  and  4  would  be  sufficiently  effective  to  reach  the  objectives  of  the 
programme and would, thus, be more proportional than the previous ones. However, only 
policy option 2 would be considered the most compliant with the proportionality criterion 
as it does not go beyond what is required to fully maintain the current programming scope 
and is the simplest of all options. 

Policy  option  2  represents  the  continuity  of  the  current  programme,  which  de  facto 
suggests  that  the  option  is  proportional.  Moreover,  the  “plus”  elements  are  relevant  to 
achieve more effectively and efficiently the objectives of the programme: 

 

illicit  trade 

Joint  operations  are  a  useful  tool  in  the  fight  illicit  trade  and  fraud  in  customs 
in  restricted  and  prohibited  goods 
transaction,  and  to  prevent 
threatening  EU  security,  environment,  health  and  safety.  Including  this  tool  inside 
the  programme  would  facilitate  the  coordination  to  put  them  in  place.  Not 
introducing this tool in the programme could limit the participating countries’ access 
to  it  and  could,  thus,  limit  the  achievement  of  the  general  objective  it  aims  to 
promote. 

  Enlarging  the  geographical  focus  to  include  EFTA  countries  could  be  argued  as 
necessary  to  achieve  two  of  the  general  objectives  of  the  programme.  On  the  one 
side,  these  countries  are  partially  involved  in  the  Single  Market,  which  means  that 
they should be part of the geographical focus in order to support the achievement of 
its full potential. On the other hand, their engagement in the fight against illicit trade 
and fraud in customs transaction is key to reduce these risks. 

  Finally,  the  purpose-based  projects  suggested  under  this  option  do  not  entail  a 
significant change in respect to the current expert teams. They can be considered as 
a simple change as they will be developed on the basis of the lessons learnt from the 

317 

 
 
expert teams, but  they allow  for  a  swifter  and more  effective  way  of  targeting the 
programme  objectives.  The  same  cannot  be  said  for  this  approach  under  policy 
option 3 as it entails a co-financing from Member States. 

As for the changes included in policy option 3  and 4, they could contribute to achieve the 
objectives of the programme. However, these go beyond what is necessary to achieve the 
objectives  satisfactorily  and  the  actions,  are  not  as  simple  as  those  introduced  as  part  of 
policy option 2. Specifically: 

  The  vision  group  would  provide  a  new  tool  to  foresee  future  needs  and  risks  in 
relation to the objectives. However useful and beneficial, this could also be reached 
through other tools and activities, and might not be simple to implement.  

  The Programme Steering Group would enable a clear division of the tasks, and thus 
an efficient management of the programme. This would imply that the needs of the 
participating countries are addressed promptly through the swift implementation of 
the  activities.  Nevertheless,  the  creation  of  this  body  would  require  additional 
efforts,  without  being  necessary  to  achieve  the  objectives.  This  aspect  is  also 
applicable  to  the  EU  Customs  Administration,  bearing  in  mind  that  the  efforts  and 
resources to put it in place would be significantly more important. 

  Awards  would  promote  further  involvement  from  external  parties  to  aid  the 
achievement of the objectives in a swifter manner. Nonetheless, their involvement is 
already  foreseen  through  their  participation  to  activities  on  an  ad-hoc  basis  and 
resorting to awards would require dedicating more funds. 

  While the inclusion of EFTA countries could be considered as proportional, enlarging 
in  policy  option  4  could  be  considered  as 

the  focus  to  all  third  countries 
disproportionate. 

  Opening  the  budget  to  contributions  from  the  private  sector  (i.e.  PPPs)  could  be 
considered  as  disproportionate  as  the  EU  budget  of  this  policy  option  should  be 
sufficient by itself to achieve the objectives. Moreover, the consequent inclusion of 
their point of view to the decision making for the activities in which they are involved 
would create an unnecessary level of complexity. 

  The sandbox would provide a useful level of certainty in achieving the set objectives 
as the results would only be deployed when the outputs would be certain, avoiding 
negative impacts. However, this tool would be complex to implement and the results 
would go beyond the scope of the objectives. 

  Finally,  the  integration  of  EIS  related  national  IT  components  in  the  programme 
would  ensure  a  level  of  interoperability  and  functioning  of  the  general  EIS  that  is 
difficult  to  meet  outside  of  the  programme.  However,  this  change  could  be 
considered  as  going  beyond  the  necessary  changes  to  achieve  the  objectives  as 
Member  States  are  currently  able  to  develop  them  without  the  need  for  the 
internally. 
programme 

them 

take 

on 

to 

318 

 
 
Conclusion 

The table below summarises the advantages and disadvantages during the next programming period of each policy option compared to the 
current situation with respect to the evaluation criterion “proportionality”. This table allows for a clear and concise overview of the detailed 
evaluation carried out above. 

Table 36 – Expected impacts on proportionality of the policy options 

Advantages 

Disadvantages 

Rating 

NC 

BS 

PO1 

PO2 

PO3 

PO4 

Source: 

  The “continuity” component of the policy option 

entails its proportionality; 

  The “plus” elements feed into the needs and 

objectives, in a proportional manner. 

  Not proportional during the programming period at hand. 

  Because of the budgetary cut, the programme would not provide the 

necessary support to be proportional. 

  As BS. 

  This policy option would not be proportional because it includes 
changes (sometimes complex) that go beyond satisfying the 
objectives of the programme. 

-3 

-1 

-2 

2 

-1 

  As PO3, but to a greater extent because of inclusion of additional 

-1.5 

elements. 

Deloitte 

319 

 
 
 
 
 
 
 
 
 
7.9 Comparison of the policy options 

The aim of this section is to identify whether one policy option (or several) stands out above 
the others.  

Each of the criteria presented in the previous sections is concluded with a table summarising 
the strengths and weaknesses, and a resulting score for the option in the specific criteria. As 
explained in the introduction of this chapter, the assessment per criterion has been done on 
the basis of input received from the consultation of a wide range of stakeholders.337 These 
results  combined  with  the  expert  judgement  of  the  Customs  Project  Group  and  the  study 
team have led to the ratings. 

The table below provides the concrete scores allocated to the different options with regards 
to  the  different  assessment  criteria.  As  explained  in  the  introduction  of  the  chapter,  a 
negative rating for the overall policy option does not entail a negative impact altogether of 
the  programme  under  that  option,  but  a  worse  outcome  (for  the  programming  period  of 
post-2020  Customs)  than  what  the  current  situation  provides.  The  same  applies  for  the 
positive overall ratings. 

This clear arrangement of the main conclusions per option allows the study team to provide 
an overview for policy makers to support their decision in favour of a preferred option.  

Table 37 – Assessment criteria and rating of the baseline scenario and the policy packages 

Policy options   Weighting 

No 
Customs 

Baseline 

Constrained  

Continuity 
plus  

10 
20 
20 
10 

20 

20 

Coherence  
Effectiveness 
Efficiency  
Feasibility  
Relevance 
EU added 
value 
Proportionality 
Overall scoring 

Source: Deloitte 

-3 
-3 
-3 
-3 

-3 

-2 
-2 
-2 
-2 

-2 

-3 
-3.00 

-1 
-1.80 

-2.5 
-2.5 
-2.5 
-2.5 

-2.5 

-2 
-2.40 

1.5 
1.5 
2 
-1 

1.5 

2 
1.45 

Voluntary 
Structural 
Cooperation 
2 
2 
1.5 
-1.5 

2 

-1 
0.95 

Integration 

2.5 
2.5 
2 
-2 

3 

-1.5 
1.25 

As  can  be  seen  from  the  table  above,  the  assessment  criteria  have  not  been  weighted 
equally. Based on discussions with the European Commission, four criteria emerged as the 
most  critical  and  were  thus  given  a  higher  weight.  These  criteria  are  effectiveness, 
efficiency, EU added- value and proportionality criterion. With a rating  of 20 means, these 
criteria are estimated twice more important than coherence and feasibility (with a rating of 
10).  As  for  the  criterion  on  relevance,  the  assessment  has  shown  that  all  options  are 

337 Please see Annex C 

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relevant, thus, the inclusion of an equal rating for all would not bring an added value to the 
comparison. Therefore, they have been omitted from the overview table. 

Based  on  the  results  summarised  in  the  above  table,  two  policy  options  stand  out:  the 
(policy  option  2).  The 
discontinuation  of  Customs,  and  the  Continuity  “plus” 
discontinuation  of  the  programme is considered the weakest in every criterion compared 
to the current situation, while the overall rating of  Continuity “plus” allows it to positively 
stand out in respect to the rest of policy options with a score of 1.45.  

The decision to not resume Customs for the next programming period came out as the least 
interesting.  In  fact,  the  option  scored  the  lowest  in  all  the  criteria  compared  to  the 
alternatives, as it was considered as fulfilling the least the criteria compared to the current 
scenario. Concretely, the option: 

  Would  not  provide  the  support  needed  to  be  coherent  with  EU  priorities  and 

objectives; 

  Would  not  aid  the  achievement  of  the  programme’s  objectives,  at  least  in  the 
next  programming  period  translating  in  a  significant  loss  of  effectiveness 
compared to the current situation; 

  Would  entail  write  offs  of  investments  made,  and  would  require  additional 

efforts to reach the same results, making it the least efficient; 

  Would  have  noteworthy  technological,  political  and  legal  impacts  that  would 
make its feasibility much more difficult than continuing the current programme; 
  Would, by nature, not have an EU added value do to the absence of EU support; 
  Would  not  be  proportional  as  it  would  not  allow  to  reach  the  programme 

objectives satisfactorily. 

In the same line, the Constrained scenario (policy option 1) also falls short. The significant 
budgetary  cut  (-30%)  leads  to  a  snowball  effect  that  impacts  the  way  the  programme  is 
currently built and the potential good it can achieve. In this line: 

  Policy  option  1  would  be  even  less  able  to  be  coherent  (-2.5)  with  the  European 
Commission  priorities  and  Art.  33  TFEU,  but  its  dependence  on  other  programmes 
would force Customs to align with these other programmes; 
In addition to the constraints in carrying out the same amount of activities as in the 
present,  and  regardless  of  the  prioritisation  of  IT-related  activities,  the  programme 
would be unable to maintain the EIS, making it even more difficult (-2.5) to achieve 
the full potential of the customs union; 

 

  Despite the savings from using the budget of other programmes to carry out certain 
activities, this option  would entail  great  write-offs  in  IT  investments  and  high  costs 
for stakeholders to reach less effective results than today, making it less efficient (-
2.5); 

  The technical, political and legal concerns make this scenario much less feasible than 

the current scenario (-2.5); 

321 | P a g e  

 
  The negative effects of the baseline scenario would be increased, and the continuity 
of  existing  IT  systems  put  at  risk,  hindering  the  current  functioning  of  the  customs 
union and the EU added value compared to the current scenario (-2.5); 
In line with the baseline, policy option 3 would not be considered proportional (-2) 
due to its less than satisfactory performance towards its objectives. 

 

Although  the  baseline  and  the  current  scenario  are,  in  principle,  the  most  similar  to  each 
other, the budgetary pressure (-15%) makes it fall short in almost all criteria in comparison 
to the current situation: 

  Based on the priorities the European Commission has today, the baseline would be 

less capable of being coherent with them, as well as with Art. 33 TFEU (-2); 

  The  potential  shift  towards  online  exchanges  and  the  need  to  prioritise  would 
negatively impact the effectiveness of the programme in comparison to the current 
situation, making it less effective (-2); 

  While  the  baseline  would  entail  a  lower  investment  from  the  programme  and  still 
some  effectiveness  in  reaching  the  results,  this  option  would  be  less  efficient  than 
the  current  situation  (-2)  because  it  would  entail  lesser  outputs  than  today  and 
additional  investments  needed  from  the  customs  administrations  to  reduced 
support; 

 

  The baseline would be less feasible than the current situation (-2) as it would entail 
some significant IT reshuffling and it could have negative political impacts due to the 
reduced budget; 
It will preserve a certain environment for cooperation and coordination of national 
actions  for  implementation  of  EU,  but  with  limited  resources  to  support  new  EU 
legislation, limiting the EU added-value (-2); 
In terms of proportionality, as  the  baseline  would  not  be  able  to  contribute 
significantly to the achievement of the objectives of the programme, it would not be 
considered proportional (-1). 

 

Policy option 4 (the Integration scenario) builds on the characteristics identified for policy 
option  3,  which  leads  to  a  reinforcement  of  the  ratings  in  comparison  to  the  latter.  The 
Integration  scenario  ranks  the  highest  in  criteria  such  as  coherence  and  effectiveness; 
however,  its  low  feasibility  and  non-proportionality  puts  it  in  a  disadvantage  in  respect  to 
policy option 2 and 3. More concretely: 

  The  high  ambition  of  this  option  allows  it  to  reach  the  most  coherence  with  the 

priorities of the European Commission (+2.5); 

  Through  the  sandbox  and,  in  particular,  the  inclusion  of  EIS-related  national 
components,  this  option  builds  on  policy  option  3  and  is  able  to  achieve  the  most 
effectiveness (+2.5); 
In  this  option,  the  EU  Customs  Administration  would  be  in  charge,  amongst  other, 
with  some  tasks  from  TAXUD,  aiding  a  more  efficient  approach  to  management, 
foreseeing  and  circumventing  potential  risks,  and  ensuring  a  more  efficient 
distribution  of  resources  in  terms  of  the  EIS  (central  and  national  components). 

 

322 | P a g e  

 
However,  it  would  bring  about  significant  financial,  human  and  time  related  costs 
linked to its implementation, which would lead, in the short term, to a less efficient 
scenario compared to others, although still more than the current situation (+2); 
  The constraints at technical, political and legal level would make this option the least 

feasible of all (-2); 

  The  EU  added-value  of  this  option  is  the  highest  (+3)  compared  to  the  rest  of  the 
alternatives.  Indeed,  the  comprehensiveness  of  the  programme  feeds  into  the 
positive  impacts  of  the  previous  options  and  leads  to  a  stronger  alignment  of 
customs policies and procedures across the EU; 

  Due to the number of additional elements brought into the programme, this option 
would  go  considerably  beyond  a  satisfactory  achievement  of  the  objectives  and 
would not be as simple as possible. Therefore, it would not be proportional (-1.5). 

The way the Voluntary structural cooperation scenario (policy option 3) is built, generates 
very  good  ratings  in  several  of  the  criteria,  and  in  particular  three  of  the  four  most 
important  ones.  However,  these  are  not  sufficient  to  compensate  for  its  weaknesses. 
Specifically, the characteristics of this option in terms of criteria are: 

  Policy  option  3  would  be  noticeably  more  coherent  as  it  would  be  able  to  achieve 
more priorities of the European Commission compared to the current situation (+2); 
  Thanks to the strengthened enhanced operational cooperation with an optional co-
financing  of  the  purpose-based  projects,  and  the  creation  of  a  vision  group  that 
allows for further strategic oversight, this option would be more effective (+2); 

  Despite  that  the  investment  needed  for  this  policy  option  would  be  higher,  the 
results would be even more important and would, thus,  more than compensate. In 
addition  to  further  outputs,  the  programme  would  be  more  efficient  (+1.5)  in  the 
allocation  of  resources  with  enhanced  operational  cooperation,  and  the  results 
would  be  reached  sooner  and  shared  amongst  all  participating  countries  thanks  to 
the Programme Steering Group; 

  The  broadening  of  the  geographical  focus  in  this  option,  and  the  strengthening  of 
enhanced operational cooperation, could create some political resistance, making it 
less feasible than other alternatives and the current situation(-1.5); 

  The programme under this scenario strengthens administrative cooperation and the 

potential trust shared networks, increasing the EU added value (+2); 

  Although  this  option  achieves  the  objectives  to  a  satisfactory  level,  some  of  its 
components  could  be  considered  as  going  beyond  what  is  necessary  for  the  goal, 
which would make it not proportional (-1). 

Finally, even though policy option 2 (Continuity “plus” scenario) might not rank the highest 
in all criteria, overall, it would be the most balanced and beneficial based on the criteria set 
in this chapter. Specifically: 

  This  option  would  go  a  step  further  than  the  current  situation  to  achieve  more 
coherence  (+1.5)  with  the  European  Commission’s  priorities  and  Art.  197  of  the 
TFEU; 

323 | P a g e  

 
 

In  addition  to  being  able  to  pursue  the  same  level  of  activities  as  the  current 
programme,  this  option  would  strengthen  the  enhanced  operational  cooperation 
leading  to  more  results  and  smoother  collaboration  than  in  the  current  scenario, 
improving effectiveness (+1.5); 

  The “plus” element of this policy option generates high returns with a relatively low 
investment (compared to the one required in other options). As such, it is considered 
the most efficient (+2); 

  All in all, this option is the most feasible compared to the alternatives (-1); 
  While  the  Continuity  “plus”  scenario  does  not  provide  the  same 

level  of 
improvement  as  the  policy  option  4,  it  provides  enough  support  to  implement  EU 
legislation at different levels and gives the possibility to work on the coherence and 
complementary between EU and international customs initiatives, increasing the EU 
added value with respect to the current situation (+1.5); 

  The  Continuity  “plus”  scenario  would  achieve  the  objectives  satisfactorily  without 
going  beyond,  and  would  be  designed  in  a  simple  manner  to  do  so,  making  it  the 
most proportional option amongst those defined (+2). 

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8  Conclusions  

This chapter presents the key findings of the study. First, it describes the main trends and 
drivers identified, which lead to the central problem for customs capacity and cooperation 
in  the  EU  context  and  its  direct  and  indirect  effects.  It  subsequently  defines  the  policy 
objectives  for  the  next  Customs  programme.  Then,  it  describes  the  policy  options 
designed for the next Customs programme and the initial assessment of their impacts.  

Based on the aforementioned steps, the policy options are evaluated and rated based on 
a  set  of  evaluation  criteria,  allowing  to  identify  the  preferred  option.  Apart  from  the 
selection of the preferred option, suggestions are also made for other elements that could 
be included in the final design of the future Customs programme.  

8.1 Relevant trends and problems  

The  study  analysed  the  overall  framework  for  administrative  cooperation  in  customs 
matters in the European context and its likely evolution in the future.  

Through the assessment undertaken, this study has confirmed that the  customs union still 
has not reached its full potential due to capacity constraints of customs administrations and 
insufficient  cooperation  within  the  EU  and  with  external  trading  partners.  Apart  from 
capacity  and  cooperation  challenges,  this  study  equally  deepened  the  key  trade  related 
trends  and  problems  that  impact  upon  customs  administrations  performance;  from  e-
commerce and security threats to changing customer expectations.  

This  chapter provides  an  overview  of the relevant trends  and  problems  that underpin  our 
recommendations  towards  objectives  of  a  potential  future  customs  programme  that  may 
support customs administrations to effectively and efficiently carry out their missions.  

The results of this analysis were structured around the problem tree, which aims to identify 
problems (including their drivers and effects), in which respect actions can be taken under a 
future Customs programme.  

The problem tree is structured around four main horizontal layers:  

  the  (general  and  specific)  trends  which  are  impacting  the  customs  landscape  and 

policy making; 

  the (problem) drivers deriving from (and fed by) those trends, which are the factors 

that directly lie at the basis of the problem ; 

  the main problem to be addressed by the Customs programme ;  
  the  (direct  and  indirect)  effects  of  the  aforementioned  problem  on  citizens, 

businesses, customs administrations and the EU itself.  

The general and specific trends can be clustered around three main topics: 

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  The  “EU”  cluster,  which  identifies  trends  that  are  strictly  related  to  the  EU  as  a 

political and economic Union of different Member States.   

  The “Core influences” cluster, which identifies trends with a core influence on the 
EU (and international) customs landscape, such as globalisation and digitalisation.  
  The  “Other  influences”  cluster,  which  identifies  other  main  trends  that  are 

expected to be main themes the customs area.   

The trends identified under the “EU” cluster encompass General and Specific trends that are 
at  the  heart  of  the  European  Union  being  a  political  and  economic  union  of  different 
Member  States.  As  such,  this  cluster  entails  the  most  important  changes  in  the  EU  policy 
with regard to the customs domain, such as the implementation of the UCC, the changes in 
the EU borders and the modifications to the customs union linked to the possible reduction 
of  its  members  (e.g.  the  UK  withdrawal  from  the  Union)  and  EU  Customs  image  building, 
that  is  to  say  the  visibility  of  the  customs  union  and  the  ongoing  trends  towards  more 
transparency and openness to other stakeholders. The “EU” cluster includes also the  cross-
disciplinary approach in EU policy design or comprehensive policy approach (General trend), 
entailing the use of “packages” of coherent measures to encompass all aspects and angles 
of new challenges. This general trend manifests in the Increasing role and responsibilities for 
Customs  authorities 
in  non-traditional  customs  areas  (such  as  Intellectual  Property 
protection, environment, migration and REACH) (Specific trend). 

A group of “core” trends are identified that occur at a global level and which are expected 
to have a crucial influence on the EU (and international) customs landscape. Three general 
“core  influences”  trends  have  been  identified:  globalisation,  digitalisation  and  terrorism, 
safety and security threats.  

The  globalisation  general  trend  entails  the  exponential  increase  of  cross-border  activities 
and  globalised  trade  and  as  specific  trend,  the  increased  trade  in  goods  and  services 
resulting  in  high  volume  of  transactions  coming  from  many  different  (emerging  and  not 
emerging) countries.  

The  digitalisation  (general  trend)  captures  the  increasingly  rapid  pace  of  innovation  and 
technological  development  which  shapes  the  global  economic  context.  This  general  trend 
relates to several specific trends:  

  e-Commerce,  which  contributes  to  the  increase  in  trade  flows  and  in  the 

“parcelisation” of trade (Specific trend); 

  New technologies, digital supply networks and new equipment which includes both 
the emergence of new products and tools (e.g. Blockchain and 3D printing) and the 
intense  usage  of  new  technologies  such  as  real  time  sensors,  innovative  scanning 
equipment and monitoring devices (Specific trend) in the customs context; 

  Increased  use  of  data  and  information  intended  as  the  large  scale  exploitation  of 
multiple  data  sources  and  data  points  (Big  Data),  and  data  analytics  for  different 
purposes (e.g. prediction of risks, ex-post randomisation of controls, monitoring of 
flows) (Specific trend); 

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The  third  main  “core”  trend  identified  encompasses  terrorism,  safety  and  security  threats 
(General trend), defined as all the challenges emerging at the global stage and posing risks 
for  both  businesses  and  citizens  security,  health  and  safety.  This  involves  the  increased 
pressure  on  Customs  administrations  in  terms  of  capacity  to  anticipate  risks  and  threats 
(e.g. migration crisis, food safety crisis), manage them and be resilient to change.  

Finally, the “Other influences” cluster identifies the other (General and Specific) trends that 
are expected to be main themes in the custom area. They constitute societal challenges that 
will  require  responses  also  in  the  way  customs  administrations  are  organised  and  interact 
with  other  stakeholders.  The  modernisation  and  transparency  of  public  administrations  in 
general  and  customs  administration  (General  trend),  defined  as  the  increased  focus  on 
resource optimisation (and doing better with less) within the public sector and the changes 
in  the  expectations  of  citizens  and  businesses  towards  the  public  administrations,  is  the 
main  theme  identified.  This  general  trend  manifests  in  the  specific  trend  of  service  and 
compliance  approach  towards  client,  defined  as  the  change  in  the  relationship  between 
controllers  (customs  administrations)  and  controlees  (traders)  towards  dynamics  based 
more on trust and horizontal approaches. This general trend also entails an increased focus 
on  trade  facilitation  and  single  windows  approaches  (Specific  trend)  intended  as  the 
increased efforts in facilitating trade through support measures and provide single points of 
contact. 

The  general  framework  shaped  by  the  general  and  specific  trends  leads  to  drivers,  i.e. 
obstacles that the customs administration will face given these trends. The following drivers 
are identified as relevant for the Customs programme: 

  unequal capacity of customs administrations in terms of IT and equipment, human 

resources, operational processes;  

  uneven  interpretation  and  implementation  of  legislation  (UCC  and  other)  by 

customs administrations; and  

  geographical, administrative, legal and strategic obstacles for cooperation.  

These drivers are at the basis of the main problem, which should be addressed by the future 
Customs  programme,  which  is  the  Insufficient  capacity  of  customs  administrations  and 
insufficient cooperation of customs administrations within the customs union and with third 
countries,  in  order  for  customs  administrations  to  be  able  to  carry  out  effectively  and 
efficiently their missions. 

These drivers would lead to the main problem for customs administrations, which should be 
addressed by the future Customs programme, which is their insufficient capacity of customs 
administrations and insufficient cooperation of customs administrations within the customs 
union and with third countries, in order for customs administrations to be able to carry out 
effectively and efficiently their missions.  

The effects of this problem ultimately impact citizens, businesses, customs administrations 
and  the  EU  itself.  The  fact  that  the  customs  union  has  not  reached  yet  its  full  potential 
(direct  effect)  would  put  at  risk  financial  interests  of  the  EU  and  budget.  It  would  also 
results  in  illicit  trade  and  fraud  in  customs  transactions,  illicit  trade  in  restricted  and 

327 | P a g e  

 
prohibited goods, which affect the EU environment, security, safety and health, and create 
red  tape  and  more  burdensome  customs handling for  businesses  and  citizens,  limiting the 
full deployment of the EU Single Marked and the EU competitiveness (indirect effects). 

8.2 Objectives for administrative cooperation and capacity 

building in customs matters in the EU 

 Mirroring the problems, their drivers, and effects, the study has defined a set of objectives 
for  the  future  programme  around  an  objectives  tree.  They  set  out  the  goals  and  political 
priorities for action, and reflect the hierarchical structure of the problem tree:  

  General  objectives  refer  to  Treaty-based  goals  and  constitute  a  link  with  the 

existing policy setting;  

  Specific objectives relate to the specific domain and set out what the Commission 

wants to achieve with the intervention in detail; and 

  Operational  objectives  concern  deliverables  or  objectives  of  actions  under  the 

Customs programme.  

The  figure  below,  which  flows  from  bottom  to  top,  represents  the  objective  tree 
established,  based  on  the  drivers,  problem  and  effects  defined  for  the  future  Customs 
programme. 

328 | P a g e  

 
 
Figure 43 – Objective tree for the next Customs programme 

Source: Deloitte elaboration 

329 | P a g e  

 
 
 
8.3 Policy options and related impacts  

Whereas this  study has proven  clear  indications  about  the problems  and  key  trends  to  be 
addressed  through  a  future  Customs  programme,  decisions  will  need  to  be  taken  with 
regards to the scope, objectives and set-up of a possible programme. Through our study, a 
number of policy options for administrative cooperation and capacity building were defined, 
embracing different visions and approaches, and having different overall impacts.  

With  uncertainty  on  the  available  budget  (and  other  differentiators)  for  a  future  Customs 
programme, the  policy options provide  guidance  and aim to  facilitate the decision-making 
process ahead.   

Based on the Better Regulation Guidelines, the following impacts have been considered:  

  Social impacts;  
  Environmental impacts;  
  Economic impacts;  
  Impacts on simplification and administrative burden.  

Impacts on fundamental rights were discarded, as the policy options do not have an impact 
(not  even  an  indirect  one)  on  elements  such  as  general  rights  and  dignity,  freedom  of 
impacts  on 
expression  and  equality  of  treatment  and  opportunities  which  define 
fundamental rights.  

The  key  elements  and  main  impacts  of  the  policy  options  are  in  the  table  and  in  the  text 
summarised below.  

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Figure 44 – Introduction to the policy options 

Source: Deloitte on the basis of Commission input 

331 | P a g e  

•Maintenance of IT legacy 2020 but no new systems•Frequency of other activities noticeably reduced•As PO2+ •Further enhanced cooperation•A vision group is introduced•Programme Steering Group•As PO3+•Steering Group becomes an EU Customs Administration, integrates the vision group & has an IT department in charge of EIS and EIS related national componentsBaselinePO1 -ConstrainedPO2 -Continuity plusPO3 -Voluntary structural collaborationPO4 –IntegrationKey aspectsNational fundingEU fundingFundinggap•Maintenance of IT legacy 2017, and no new systems•Frequency of other activities noticeably reduced and potentially not possible•Continuity of IT model and softer activities•Enhanced operational cooperation•Innovation+305%-30%-15%Minimum needsfor post-C2020CurrentC2020 Budget+151%+136%•Overall EU budget: EUR EUR 444.5 million over 7 years (EUR 63.5 million per year on average)•OverallEU budget: EUR 1 313.1 million over 7 years (EUR 187.6 million per year on average)•MemberStates’ co-fundingfor PBP: about EUR 13.6 million•Overall EU budget EUR 2 119.6 million over 7 years (EUR 302.8 million per year on average)Explanationfor budgetaryneeds•Overall EU budget: EUR 444.5 million over 7 years (EUR 63.5 million per year on average)•OverallEU budget: EUR 1 231.2 million over 7 years (EUR 176.01 million per year on average)+1% of overall EU-Customs budget funded by MSs+3.5% of overall EU-Customs budget funded by the EUPurpose-based projects 
 
8.3.1  No Customs programme 

Key elements 

In  such  Impact  Assessment  studies,  the  discontinuation  of  the  programme  needs  to  be 
taken into account. 

Main impacts 

The  discontinuation  of  the  Customs  programme  for  the  future  (i.e.  no  EU  intervention) 
would have adverse impacts on all the dimensions considered.  

  This  policy  option  would  not  provide  any  support  for  training  programmes  for 
Customs officers or for a framework actively supporting administrative cooperation in 
the Customs policy domain. This would hinder the capacity to respond quickly to new 
and  existing  challenges  in  the  field  of  crime,  terrorism  and  security  challenges.  This 
would hinder the financial interests of Member States and of the EU as a whole and 
leave  the  EU  territory  more  permeable  to  crime  and  terrorism.  All  these  elements 
would generate negative social impacts.  

  Environmental impacts would likely be fairly limited. Whilst the discontinuation of the 
programme would terminate in-person meetings (and related travels) for cooperation 
activities  under  the  programme,  it  is  likely  that  meetings  would be  organised  at  any 
rate,  as  part  of  bilateral  or  multi-lateral  frameworks,  having  the  same  if  not  bigger 
adverse effect on carbon footprint as the programme.  

  Concerning  the  economic  impacts,  the  discontinuation  of  the  programme  would 
mean  that  no  cost  is  incurred  by the  EU  budget.  However,  the  Customs  programme 
provides an environment for cooperation and coordination of national actions, which 
would  otherwise  require  a  series  of  bilateral  or  multi-lateral  basis,  with  higher  costs 
and more coordination issues. The discontinuation of the programme would entail a 
write-off of all the funding provided so far for administrative cooperation in customs 
matters,  as  not  only  the  existing  IT  tools  would  not  be  maintained,  but  also  the 
existing  frameworks  would  cease  to  exist.  This  would  undermine  the  practical 
implementation of the UCC (and therefore the compliance with legal obligations in the 
Customs  area),  as  well  as  very  basis  for  administrative  cooperation,  with  negative 
impacts  on  the  overall  functioning  of  the  customs  union  (for  instance,  making 
international  economic  activities  more  complex) and  the  competitive position of the 
EU. In the absence of the programme, consistent interpretation and implementation 
procedures  for  EU  legislation  would  be  undermined,  as  well  as  the  operation  and 
development  of  IT  tools  and  common  ways  of  working.  This  would  mean  that  the 
indirectly  reduces  compliance  costs  and 
benefits  of  such  cooperation,  which 
administrative burden for businesses and citizens, would be lost. 

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8.3.2  Baseline scenario 

Key elements 

The situation as it is today, taking into account Brexit 

The Baseline scenario (BS) represents the situation as it is today and its known evolutions: 

  it  entails  the  structure  and  characteristics  of  the  (current)  Customs  2020 

programme, projected on the period post-2020; 

  it  reflects  the  developments  linked  to  the  ‘natural’  course  of  events,  in  particular 
the  UK’s  withdrawal  from  the  EU.  This  will  result  in  an  overall  budget-reduction 
available for a post-2020 Customs programme of around 15% (i.e. the proportion of 
the current UK contribution to the budget).  

A decrease of IT capacity building and cooperation  

The  budgetary  constraint  will  naturally  influence  the  breadth  of  the  programme,  and  the 
frequency of activities. Concretely, under the baseline: 

  the  budget  for  IT  capacity  building  would  require  to  focus  on  the  continuity  and 
maintenance  of  existing  and  ongoing  of  UCC  2020  legacy  systems,  vital  to  ensure 
the proper functioning of the customs union. This entails a write-off, ICS2 (Import 
Control System) would need to be stopped, and no new customs IT project could be 
launched. 

  Cooperation  activities  would  continue  to  be  financed  by  the  programme. 
Nevertheless, the availability of the activities would be different in practice. Indeed, 
the reduced financial envelope would have an impact on the programme in terms 
of the capability to fulfil the different activities. If the pace at which activities under 
the programme are carried out remains as that of the  Customs 2020 programme, 
the funding will be insufficient. 

The baseline thus entails that the programme would continue to follow a reactive approach, 
rather  than  being  proactive  and  forward  looking.  The  baseline  would  thus  only  allow 
‘keeping the lights on’. 

A benchmark to compare other policy options  

The  baseline  provides  a  starting  point  for  comparison  and  analysis.  Indeed,  in  order  to 
further  elaborate  on  the  different  policy  options,  assess  their  impact  and  identify  the 
preferred  option(s)  and  support  policy  decisions,  it  is  necessary  to  have  a  benchmark  to 
compare against.  

Main impacts 

The baseline scenario would also have adverse impacts on the dimensions considered, even 
if to a smaller extent than the discontinuation of the programme.  

  Concerning  the  social  impacts,  the  baseline  scenario  would  undermine  the  full 
implementation  of  the  IT  systems  necessary  to  support  the  UCC  (as  it  would  only 

333 

 
 
legacy  systems),  hindering  the  practical 
ensure  continuity  of  the  UCC  2017 
implementation  of  the  UCC  and  of  future  EU  legislative  initiatives  on  the  customs 
domain,  and  the  efficiency  of  Member  States  in  their  implementation,  increasing 
fragmentation. This policy option has no scope for innovation (on IT or other issues), 
which in turn would leave customs administrations less prepared to detect early and 
react  quickly  to  evolution  in  criminal  and  terrorist  activities  (for  instance,  new 
technologies  needed to detect  illicit  imports, new  smuggling  paths,  etc.).  Finally,  the 
absence of activities (and related funding) for training would reduce the opportunity 
for customs officers to benefit from continuous and vocational training, and widen the 
gaps of Customs competencies and skills across the EU.  

  Environmental impacts would be fairly limited. This option would limit the functioning 
and  development  of  IT  systems  for  communication  and  data  exchange  in  the  future 
while  reducing  the  resources  for  in-person  meetings  (and  related  travels)  under  the 
programme. However, it is likely that meetings would be organised as part of bi-lateral 
or  multi-lateral  frameworks,  having  the  same  if  not  bigger  adverse  effect  on  carbon 
footprint as the programme.  

  With  regard  to  the  economic  impacts,  the  baseline  would  reduce  the  cost  of  the 
programme  for  the  EU  budget  (-15%),  but  at  the  same  time  would  not  support  the 
necessary  IT  tools  for  the  practical  implementation  of  the  UCC  or  future  legislative 
provisions, with related increase of costs for Member States’ customs administrations. 
The  weakened  functioning  of  and  co-functioning  of  customs  administrations  would 
have in turn negative impacts on the Single Market and on the competitive position of 
the EU.  

  Similarly,  the  baseline  scenario  impacts  negatively  businesses  and  citizens,  as  it 
reduces administrative cooperation among customs administrations and therefore the 
possibility  to  develop  tools  and  ways  of  working  with  positive 
impacts  on 
administrative burden and compliance costs for businesses and citizens.  

8.3.3  Policy option 1 – Constrained scenario 

Key elements 

Scale down ambition  

This policy option entails that the budget for the Customs post-2020 programme would be 
reduced  (to  the  benefit  of  other  policy  areas)  by  30%.  In  accordance,  this  policy  option 
would: 

  impose scaling down the ambition of the programme thoroughly; 
  not allow continuing with the current policy choices made. The current acquis and 
relevant  legislation  in  place  would  have  to  be  reviewed,  as  the  budget  for  the 
programme would not allow financing its full implementation. 

334 

 
 
 
 
Discontinuation of IT capacity building and limited cooperation 

In  comparison  to  the  BS,  this  policy  option  would  entail  not  merely  a  reduction,  but  a 
significant cut in the programme’s activities: 

  IT capacity building would be much more limited after 2020: only the continuation 
of  the  UCC  2017  legacy  systems  would  be  possible.  Other  systems  development 
and operation would have to be stopped (which would also trigger budgetary side 
effects, such as a write off of investment and operational costs incurred under the 
Customs 2020 programme). Innovation would be impossible and no new IT projects 
(to support new customs initiatives) would be launched (including ICS2); 

  only a limited budget would be available for cooperation, since the budget would – 
as  a  matter  of  priority  –  be  used  for  maintaining  as  far  as  possible  operational  IT 
systems. 

Thus, policy option 1 may be considered as the programme being put in ‘survival mode’.  

Main impacts 

Policy option  1 is characterised by an even larger budgetary reduction (-30% compared to 
the  current  programme)  than  the  baseline  scenario.  Therefore,  all  the  negative  impacts 
describe for the baseline also apply to this policy option and to a larger extent (but not as 
large  as  in  the  case  of  discontinuation  of  the  programme).  Furthermore,  the  adverse 
impacts of this option are likely to worsen in the future.  

8.3.4  Policy option 2 – Continuity “plus” scenario 

Key elements 

Continuity with increased effectiveness  

Under policy option 2, the vision and scope of the current programme would be maintained, 
as  is  also  the  case  under  the  baseline  (cf.  “Continuity”).  However,  in  addition,  this  policy 
option would also enable the programme to pursue its natural evolution to more effectively 
address  the  present  and  future  challenges 
including  the 
implementation of new initiatives (cf. the ‘plus’ element). In particular by: 

in  the  field  of  customs, 

  reinforcing  the  effectiveness  of  the  tools  to  address  identified  problems  in  the 

framework of the programme; 

  allowing  the  programme  to  be  an  enabler  for  modern  and  efficient  national 
customs  administrations  which  interact  and  perform  in  a  digital  environment  and 
deal with emerging challenges and trends (cf. innovation). 

This would unavoidably require an increase in budget, estimated at 136% (as compared to 
the current budget).  

Enhanced IT capacity building and cooperation  

335 

 
 
In  comparison  to  the  baseline,  this  policy  option  would  entail  an  increase  in  (IT)  capacity 
building and cooperation activities in order to: 

  ensure that existing IT systems as of 2020 can be maintained and that foreseeable 
and  new  IT  projects  can  be  on-boarded  and  specifically  tackle  innovation  and  IT 
contingency in order to face new technologies and trends (e.g. e-commerce, data 
analytics, Blockchain); 

  allow  participating  countries  to  increase  their  operational  cooperation.  The 
experience  gained  through  the  expert  teams  under  the  current  Customs 
programme  would  give  way  to  an  increase  of  their  number  under  the  next 
programme but also to an evolution of such expert teams towards a more purpose-
based approach. Groups of countries would be able to work together during longer 
periods  for  more efficient  and  concrete results.  Moreover, the  programme  would 
further  support  strategic  cooperation  with  relevant  non-EU  countries  and 
international organisations. 

Main impacts 

Policy  option  2  maintains  and  reinforces  cooperation  activities  already  existing  under  the 
current  Customs  programme,  while  introducing  a  more  project  and  objective-oriented 
approach  via  strengthening  the  role  of  enhanced  cooperation  and  further  supporting 
innovation. These elements are likely to have positive effects on the dimensions considered 
for the assessment.  

  The  combined  effect  of  better  data  and  communication,  and  more  support  to 
innovation  would  help  customs  administrations  to  detect  and  react  more  quickly  to 
evolution  in  illicit  and  criminal  activities  overall  improving  the  EU  capability  to  fight 
against  crime  and  terrorism.  Furthermore,  the  largest  scope  for  administrative 
capacity building activities would increase customs officers’ access to continuous and 
vocational  training  and  reducing  the  gaps  of  Customs  competences  and  skills  across 
the EU, overall having positive social impacts.  

  Limited  positive  environmental  impacts  are  also  likely,  as  the  development  of  IT 
systems  for  data  exchange  and  online  collaboration  tools  could  compensate  the 
possible increase of in-person meetings (linked to increased cooperation activities).  

  The economic impacts of the policy options are expected to be positive overall. While 
requiring  more  resources  from  the  EU  budget  (+136%  compared  to  the  current 
programme), this policy option would support the development of IT systems deemed 
necessary for the practical implementation of the UCC and all other necessary systems 
(e.g.  CRMS, 
innovation, 
introduction  of  new  common  actions  for  customs  administrations  (such  as  joint 
operations) and more resources for cooperation. Overall, these activities are expected 
to  generate  efficiency  and  effectiveness  gains,  leading  to  a  more  efficient  and 
effective  customs  union  in  the  medium  to  long  period,  supporting  the  fight  against 

international  projects)  and  for  supporting 

ICS2  and 

336 

 
 
fraud  and  illicit  trace,  crime  and  terrorism,  and  in  turn  supporting  the  financial 
interests and competitiveness of the EU as a whole. 

  Similarly, the increased scope for administrative cooperation would generate indirect 
positive  impacts  for  businesses  and  citizens,  as  the  solutions  developed  for  more 
effective  and  efficient  cooperation  among  customs  administrations  would  in  turn 
reduce compliance costs and administrative burden.  

8.3.5  Policy option 3 – Voluntary structural cooperation  

Key elements 

Increased operational cooperation, by allowing and supporting voluntary efforts 

This policy option aims to reach an even higher level of operational cooperation than policy 
option  2,  by  allowing  and  supporting  voluntary  efforts  of  participants  for  increasing 
operational cooperation. This option would entail a budget increase of 151% (in comparison 
to  the  current  programme),  whereby  additional  budget  would  be  required  from  those 
countries who want to contribute more.  

In  addition  to  the  vision  and  activities  under  option  2,  this  option  would  mainly  entail 
purpose-based projects initiated by certain participants, the creation of a vision group and a 
Programme Steering Group.  

Purpose-based projects 

The  enhanced  operational  cooperation  would  evolve  toward  another  level:  groups  of 
countries  that  want  to  work  more  together  would  be  able  to  proactively  initiate  and  co-
finance  longer  term  and  purposed-based  projects.  These  projects  would  be  composed  of 
different activities towards a common goal of the countries involved, but are also meant to 
have an added value for the EU as whole. 

Vision group 

A  vision  group  would  allow  investigating  and  reflecting  on  future  trends  and  challenges 
impacting the customs sphere, driving new ways of enhancing collaboration as well as the 
strategic  direction  of  the  programme.  As  such,  the  vision  group  may  also  lead  to  the 
initiation by countries of more purpose-based projects.  

Programme Steering Group 

Considering  the  number  and  size  of  programme  activities  and  the  tendency  to 
decentralisation  (cf.  the  purpose-based  projects 
initiated  by  certain  countries),  an 
overarching  Programme  Steering  Group,  composed  of  representatives  of  the  Commission 
services  (DG  TAXUD) and  participating  countries,  would foster  common strategic priorities 
for the programme as a whole and bring structure to the management of activities. As such, 
the  Commission  would  remain  in  charge  of  the  programme  governance,  while  the 
Programme  Steering  Group  would  supervise  programme  activities  and  follow  up  on  the 

337 

 
 
results  from  purposed-based  projects  co-financed  to  ensure  that  these  results  effectively 
lead to an added value for the EU as whole. 

Main impacts 

Policy option 3 builds on option 2, Therefore, the same impacts already described for policy 
option 2 apply, possibly to a greater extent.  

  The  social  impacts  on  the  EU  capability  to  fight  against  crime  and  terrorism  and  to 
increase  customs  officials’  access  to  continuous  training  and  improve  customs 
officials’  skills  would  be  reinforced  by  the  largest  budgetary  provisions  for  such 
activities and by the emphasis on knowledge management and enhanced cooperation. 
In  addition, the  introduction  of  the  vision  group and  the  Programme  Steering  Group 
would affect the governance of the programme, providing to Member States’ customs 
administrations  a  wider  role  in  steering  the  activities  for  the  programme  and  in  the 
management  of  the  programme  and  of  the  individual  activities.  The  vision  group  in 
particular would place more emphasis on innovation and strategic thinking, providing 
the conditions for customs administration to start to innovate together.  

  Environmental impacts would likely be very similar to policy option 2;  

  The economic  impacts of the policy options are expected to be positive overall. The 
same  reasoning  described  for  policy  option  2  applies,  to  a  broader  scale  (the 
programme would require a 151% increase of the budget with respect to the current 
programme,  in addition to  limited  national  co-funding  of  purpose-based projects for 
those  participating  countries  interested).  In  addition,  this  option  provides  the 
framework  for  further  cohesion  among  customs  administrations  in  defining  the 
direction  for  the  programme  (through  the  vision  group  for  innovation  and  strategic 
thinking)  and  in  the  management  of  its  activities  (through  the  Programme  Steering 
Group).  

  The  increased  scope  for  administrative  cooperation  would  generate  indirect  positive 
impacts for businesses and citizens, as the solutions developed for more effective and 
efficient  cooperation  among  customs  administrations  would 
in  turn  reduce 
compliance costs and administrative burden, to a larger scale than in policy option 2. 

8.3.6  Policy option 4 – Integration  

Key elements 

Most ambitious policy option 

The  supplementary  principle  governing  option  4  is  the  idea  of  working  as  one,  while 
respecting  the  subsidiarity  principle.  Participants  would  reach  a  common  ground  for 
operational  cooperation,  from  which  they  are  willing  to  govern  proactively  further 
initiatives. This option would logically result in a substantial  budget  increase, estimated at 
305% (as opposed to the current programme).  

338 

 
 
A  centralised  EU  Customs  Administration  for  managing  the  programme  and  providing 
support to the participating countries 

In  policy  option  4,  EU  national  customs  administrations  will  be  merged  into  a  unique  EU 
Customs  Administration  in  charge  of  a  wild  array  of  tasks.  .  The  programme  would 
therefore  not  target  the  Member  States  as  such,  but  the  needs  of  this  new  EU  Customs 
Administration composed with central and local operational units. This EU-level centralised 
formal entity would include: 

  The  various  departments  of  the  EU  Customs  Administration,  such  as  the  IT 
department  or  the  Customs  Academy  dealing  with  human  competencies 
development,  which  would  take  over  from  the  national  customs  administrations 
following the principle of “doing together”. The EU Customs Administration would 
also be in charge of the management of activities, such as joint operations. In other 
words, those departments would draft proposals for activities they want to pursue, 
and  would  be  responsible  for  the  development  and  implementation  of  such 
activities if funding is awarded. 

  A specific department within the EU Customs Administration which would deal with 

the daily tasks involved in the running of the programme.  

Main impacts 

Finally, policy option 4 includes and reinforces many of the elements of policy option 3. In 
addition, this policy option establishes the EU Customs Administration, directly responsible 
for some activities (such as human competency building and IT development, operation and 
maintenance,  including  the  national  components  of  the  EIS-related  IT  systems)  and  in 
charge  of  the  programme  management  and  the  coordination  of  the  activities  (soft 
collaboration, operational  cooperation  and  enhanced  operational  cooperation).  Therefore, 
the same impacts already described for policy option 3 apply, possibly to a greater extent:  

  The more centralised approach will strengthen the implementation of the EU customs 
policy,  with  a  much  stronger  emphasis  on  shared  processes  and  procedures,  and 
consistency  of  Customs  operations  throughout,  with  positive  effects  on  the  EU 
capability to fight against crime and terrorism. This policy option will increase Customs 
officers’  access  to  continuous  training  and  convergence  of  Customs  curricula  across 
the EU, with overall positive social benefits.  

  Environmental impacts would likely be very similar to policy options 2 and 3;  

  The economic  impacts of the policy options are expected to be positive overall. The 
same reasoning described for policy option 3 applies. This policy option presents the 
largest increase in EU budget for the programme (+375% with respect to the current 
programme),  which  is  expected  to  generate  the  largest  gains  in  efficiency  and 
effectiveness for customs administrations in the long term. Centralising at EU level the 
development  of  the  national  components  of  the  EIS-related  IT  systems  and  the 
implementation of the Customs Academy is expected to generate economies of scale 
and  learning  curve  effect  while  reducing  the  costs  for  Member  States.  The  major 

339 

 
 
change in governance and organisational structure foreseen with the creation of the 
EU Customs Academy is expected to increase efficiency and effectiveness over time, 
even  if  it  would  likely  require  major  organisational  change  for  national  customs 
administrations,  which  is  likely  to  absorb  a  vast  amount  of  human  and  financial 
resources.  

  Likewise,  and  even  more  than 

in  policy  option  3,  the 

increased  scope  for 
administrative  cooperation  and  the  centralisation  of  some  activities  would  generate 
indirect  positive  impacts  for  businesses  and  citizens,  as  the  solutions  developed  for 
more  effective  and  efficient  cooperation  in  the  customs  union  would  in  turn  reduce 
compliance costs and administrative burden. 

8.4 Evaluation and comparison of the policy options  

The policy options defined for the future Customs programme were assessed and compared 
on the basis of a set of evaluation criteria, consistently with the Better Regulation Guidelines 
for Impact Assessment.  

The  assessment  per  criterion  has  been  done  on  the  basis  of  inputs  received  from  the 
consultation  of  a  wide  range  of  stakeholders338.  These  results  combined  with  the  expert 
judgement of the project group and the study team have led to the ratings.  

The  aim  of  this  assessment  is  to  identify  whether  one  or  more  policy  options  stand  out 
above the others, in order to support policymakers’ decisions.  

The table below provides the scores allocated to the different options with regards to the 
different  assessment  criteria.  A  negative  rating  for  the  policy  option  does  not  entail  a 
negative evaluation of the policy option altogether, but simply defines a worse outcome (for 
the programming period of post-2020 Customs) than what the current Customs programme 
provides. The same applies for the positive overall ratings. A weighting system was applied 
to the scores, giving more influence to the evaluation criteria of effectiveness, efficiency, EU 
added value and proportionality.  

Table 38 - Assessment criteria and rating of the baseline scenario and the policy packages 

Policy options  

Weighting 

No Customs 

Baseline 

Constrained  

Continuity 
“plus”  

Voluntary 
Structural 
Cooperation 

Integration 

Coherence  

Effectiveness 

Efficiency  

Feasibility  

EU added value 

Proportionality 

10 

20 

20 

10 

20 

20 

-3 

-3 

-3 

-3 

-3 

-3 

-2 

-2 

-2 

-2 

-2 

-1 

-2.5 

-2.5 

-2.5 

-2.5 

-2.5 

-2 

1.5 

1.5 

2 

-1 

1.5 

2 

2 

2 

1.5 

-1.5 

2 

-1 

338 Please see Annex C 

2.5 

2.5 

2 

-2 

3 

-1.5 

340 

 
 
                                                      
Overall scoring 

-3.00 

-1.80 

-2.40 

1.45 

0.95 

1.25 

Source: Deloitte elaboration 

Based  on  the  results  summarised  in  the  above  table,  two  policy  options  stand  out:  the 
discontinuation  of  Customs,  and  the  Continuity  “plus” 
(policy  option  2).  The 
discontinuation  of  the  programme is considered the weakest in every criterion compared 
to the current situation, while the overall rating of  Continuity “plus” allows it to positively 
stand out in respect to the rest of policy options with a score of 1.45.  

The decision to not resume Customs for the next programming period came out as the least 
interesting.  In  fact,  the  option  scored  the  lowest  in  all  the  criteria  compared  to  the 
alternatives, as it was considered as fulfilling the least the criteria compared to the current 
scenario. Concretely, the option: 

  Would  not  provide  the  support  needed  to  be  coherent  with  EU  priorities  and 

objectives; 

  Would  not  aid  the  achievement  of  the  programme’s  objectives,  at  least  in  the 
next  programming  period  translating  in  a  significant  loss  of  effectiveness 
compared to the current situation; 

  Would  entail  write  offs  of  investments  made,  and  would  require  additional 

efforts to reach the same results, making it the least efficient; 

  Would  have  noteworthy  technological,  political  and  legal  impacts  that  would 
make its feasibility much more difficult than continuing the current programme; 
  Would, by nature, not have an EU added value do to the absence of EU support; 
  Would  not  be  proportional  as  it  would  not  allow  reaching  the  programme 

objectives satisfactorily. 

In the same line, the Constrained scenario (policy option 1) also falls short. The significant 
budgetary  cut  (-30%)  leads  to  a  snowball  effect  that  impacts  the  way  the  programme  is 
currently built and the potential good it can achieve. In this line: 

  Policy  option  1  would  be  even  less  able  to  be  coherent  with  the  European 
Commission  priorities  and  Art.  33  TFEU,  but  its  dependence  on  other  programmes 
would force Customs to align with these other programmes; 
In addition to the constraints in carrying out the same amount of activities as in the 
present,  and  regardless  of  the  prioritisation  of  IT-related  activities,  the  programme 
would be unable to maintain the EIS, making it even more difficult to achieve the full 
potential of the customs union; 

 

  Despite the savings from using the budget of other programmes to carry out certain 
activities, this option  would entail  great  write-offs  in  IT  investments  and  high  costs 
for stakeholders to reach less effective results than today, making it less efficient; 
  The technical, political and legal concerns make this scenario much less feasible than 

the current scenario; 

341 

 
 
  
  The negative effects of the baseline scenario would be increased, and the continuity 
of  existing  IT  systems  put  at  risk,  hindering  the  current  functioning  of  the  customs 
union and the EU added value compared to the current scenario; 
In line with the baseline, policy option 3 would not  be considered proportional due 
to its less than satisfactory performance towards its objectives. 

 

Although  the  baseline  and  the  current  scenario  are,  in  principle,  the  most  similar  to  each 
other, the budgetary pressure (-15%) makes it fall short in almost all criteria in comparison 
to the current situation: 

  Based on the priorities the European Commission has today, the baseline would be 

less capable of being coherent with them, as well as with Art. 33 TFEU; 

  The  potential  shift  towards  online  exchanges  and  the  need  to  prioritise  would 
negatively impact the effectiveness of the programme in comparison to the current 
situation, making it less effective ; 

  While  the  baseline  would  entail  a  lower  investment  from  the  programme  and  still 
some  effectiveness  in  reaching  the  results,  this  option  would  be  less  efficient  than 
the  current  situation  (-2)  because  it  would  entail  lesser  outputs  than  today  and 
additional  investments  needed  from  the  customs  administrations  to  reduced 
support; 

 

  The baseline would be less feasible than the current situation as it would entail some 
significant  IT  reshuffling  and  it  could  have  negative  political  impacts  due  to  the 
reduced budget; 
It will preserve a certain environment for cooperation and coordination of national 
actions  for  implementation  of  EU,  but  with  limited  resources  to  support  new  EU 
legislation, limiting the EU added-value; 
In terms of proportionality, as  the  baseline  would  not  be  able  to  contribute 
significantly to the achievement of the objectives of the programme, it would not be 
considered proportional. 

 

Policy option 4 (the Integration scenario) builds on the characteristics identified for policy 
option  3,  which  leads  to  a  reinforcement  of  the  ratings  in  comparison  to  the  latter.  The 
Integration  scenario  ranks  the  highest  in  criteria  such  as  coherence  and  effectiveness; 
however,  its  low  feasibility  and  non-proportionality  puts  it  in  a  disadvantage  in  respect  to 
policy option 2 and 3. More concretely: 

  The  high  ambition  of  this  option  allows  it  to  reach  the  most  coherence  with  the 

priorities of the European Commission; 

  Through  the  sandbox  and,  in  particular,  the  inclusion  of  EIS-related  national 
components,  this  option  builds  on  policy  option  3  and  is  able  to  achieve  the  most 
effectiveness; 
In  this  option,  the  EU  Customs  Administration  would  be  in  charge,  amongst  other, 
with  some  tasks  from  TAXUD,  aiding  a  more  efficient  approach  to  management, 
foreseeing  and  circumventing  potential  risks,  and  ensuring  a  more  efficient 
distribution  of  resources  in  terms  of  the  EIS  (central  and  national  components). 

 

342 

 
 
However,  it  would  bring  about  significant  financial,  human  and  time  related  costs 
linked to its implementation, which would lead, in the short term, to a less efficient 
scenario compared to others, although still more than the current situation (+2); 
  The constraints at technical, political and legal level would make this option the least 

feasible of all; 

  The EU added-value of this option is the highest compared to the rest of alternatives. 
Indeed, the comprehensiveness of the programme feeds into the positive impacts of 
the  previous  options  and  leads  to  a  stronger  alignment  of  customs  policies  and 
procedures across the EU; 

  Due to the number of additional elements brought into the programme, this option 
would  go  considerably  beyond  a  satisfactory  achievement  of  the  objectives  and 
would not be as simple as possible. Therefore, it would not be proportional. 

The way the Voluntary structural cooperation scenario (policy option 3) is built, generates 
very  good  ratings  in  several  of  the  criteria,  and  in  particular  three  of  the  four  most 
important  ones.  However,  these  are  not  sufficient  to  compensate  for  its  weaknesses. 
Specifically, the characteristics of this option in terms of criteria are: 

  Policy  option  3  would  be  noticeably  more  coherent  as  it  would  be  able  to  achieve 
more priorities of the European Commission compared to the current situation; 
  Thanks to the strengthened enhanced operational cooperation with an optional co-
financing  of  the  purpose-based  projects,  and  the  creation  of  a  vision  group  that 
allows for further strategic oversight, this option would be more effective; 

  Despite  that  the  investment  needed  for  this  policy  option  would  be  higher,  the 
results would be even more important and would, thus,  more than compensate. In 
addition to further outputs, the programme would be more efficient in the allocation 
of  resources  with  enhanced  operational  cooperation,  and  the  results  would  be 
reached  sooner  and  shared  amongst  all  participating  countries  thanks  to  the 
Programme Steering Group; 

  The  broadening  of  the  geographical  focus  in  this  option,  and  the  strengthening  of 
enhanced operational cooperation, could create some political resistance, making it 
less feasible than other alternatives and the current situation; 

  The programme under this scenario strengthens administrative cooperation and the 

potential trust shared networks, increasing the EU added value; 

  Although  this  option  achieves  the  objectives  to  a  satisfactory  level,  some  of  its 
components  could  be  considered  as  going  beyond  what  is  necessary  for  the  goal, 
which would make it not proportional. 

Finally, even though policy option 2 (Continuity “plus” scenario) might not rank the highest 
in all criteria, overall, it would be the most balanced and beneficial based on the criteria set 
in this chapter. Specifically: 

  This  option  would  go  a  step  further  than  the  current  situation  to  achieve  more 
coherence with the European Commission’s priorities and Art. 197 of the TFEU; 

343 

 
 
 

In  addition  to  being  able  to  pursue  the  same  level  of  activities  as  the  current 
programme,  this  option  would  strengthen  the  enhanced  operational  cooperation 
leading  to  more  results  and  smoother  collaboration  than  in  the  current  scenario, 
improving effectiveness; 

  The “plus” element of this policy option generates high returns with a relatively low 
investment (compared to the one required in other options). As such, it is considered 
the most efficient; 

  All in all, this option is the most feasible compared to the alternatives; 
  While  the  Continuity  “plus”  scenario  does  not  provide  the  same 

level  of 
improvement  as  the  policy  option  4,  it  provides  enough  support  to  implement  EU 
legislation at different levels and gives the possibility to work on the coherence and 
complementary between EU and international customs initiatives, increasing the EU 
added value with respect to the current situation; 

  The  Continuity  “plus”  scenario  would  achieve  the  objectives  satisfactorily  without 
going  beyond,  and  would  be  designed  in  a  simple  manner  to  do  so,  making  it  the 
most proportional option amongst those defined. 

The design of the next generation of the Customs programme could then be based on the 
elements  of  the  Continuity  “plus”  scenario,  which  could  be  complemented  with  other 
features.  

8.5 Applicable elements from other policy options  

The  assessment  and  ratings  of  the  policy  options  serves  the  purpose  of  identifying  the 
preferred option.  However, the design  of the preferred  option  is not  a  linear  process.  Key 
elements from other policy options could be introduced in the preferred one, even if other 
components of those options are discarded.  

The  policy  option  which  obtained  the  best  score  overall  was  policy  option  2,  i.e.  the 
Continuity “plus” scenario. This result does not prevent taking into consideration elements 
coming from other policy options in the design of the next Customs programme.  

Based  on  the  assessment, the  following  elements  from  some  of the  policy  options for  the 
future Customs programme could be included on the final preferred option:  

  Strengthened  enhanced  cooperation  and  purpose-based  projects  (from  policy 

option 3); and 

  Vision group (from policy option 3).  

Enhanced  cooperation  is  present  already  in  the  current  Customs  programme,  even  if  to  a 
limited  extent,  and  is  supported  further  in  policy  option  2.  Purpose-based  projects 
represent an evolution of the current expert teams, to which they add a longer and more 
stable  time  horizon,  and  better  defined  mission  and  working  methods.  In  the  paradigm 
introduced  by  policy  option  3,  enhanced  operational  cooperation  would  evolve  towards 
another  level:  groups  of  countries  that  want  to  work  more  together  would  be  able  to 
proactively initiate and co-finance longer term and purpose-based projects. These projects 

344 

 
 
would  be  composed  of  different  activities  aiming  at  a  common  goal  of  the  countries 
involved, but are also meant to have an added value for the EU as a whole. The introduction 
of purpose-based projects as those defined in policy option 3 would increase the EU added 
value of such activities, as activities would be coordinated and results made available to all 
participating countries via the Programme Steering Group. 

The  Programme  Steering  Group  is  a  key  element  in  the  architecture  of  policy  option  3, 
securing better shared governance, better coordination of activities and mutual learning. As 
such, it brings EU added value to the programme. A structure like the Programme Steering 
Group could be useful already in the next generation of the Customs programme (as defined 
by  the  preferred  option),  to  support  the  Commission  in  the  operational  management  and 
coordination  of  enhanced  cooperation  activities.  Considering  the  organisational  changes 
that  setting  up  a  Programme  Steering  Group  brings,  and  the  reduced  size  of  enhanced 
cooperation under the Continuity “plus” scenario (representing only about 0.2% of the total 
programme budget), a two-step approach could be considered: the next generation of the 
Customs  programme  can  be  used  to  prepare  for  such  a  governance  and  organisational 
change, to be fully implemented in the following generation of the programme. 

Introduced  in  policy  option  3  as  well,  the  vision  group  has  the  role  of  investigating  and 
reflecting on future trends and challenges impacting the customs sphere, driving new ways 
of enhancing collaboration as well as the strategic direction of the programme. As such, it 
may also lead to the initiation by countries of more purpose-based projects. A vision group, 
composed  of  representatives  of  Member  States  and  a  limited  number  of  external  experts 
could be introduced anyway  in  the  future  Customs  programme.  The  need  for  customs 
administrations  to  have a  more  strategic  and forward-looking  approach  towards  emerging 
(technological  and  other)  trends  has  been  expressed  by  many  of  the  stakeholders 
interviewed. The vision group would answer this need. In addition, it could help creating an 
environment encouraging Member States to start developing innovative tools and processes 
jointly.  

345 

 
 
 
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This Annex contains the indicative list of references and sources used for the assignment. 

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Consolidated 
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346 

 
 
 
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355 

 
 
 
 
 
 
 
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356 

 
 
 
 
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357 

 
 
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358 

 
 
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359 

 
 
 
 
 Case studies and fieldwork 

Table of Contents 

Annex B.1 - Data and information .......................................................................................... 362 

Introduction.................................................................................................................... 362 

Background ..................................................................................................................... 363 

Key issues for customs administrations ......................................................................... 369 

Demands to the new Customs programme ................................................................... 374 

Conclusions..................................................................................................................... 381 

Annex B.2 -  Trade facilitation, single window and centralised clearance ......................... 383 

Introduction.................................................................................................................... 383 

Background ..................................................................................................................... 384 

Key issues for customs administrations ......................................................................... 384 

Demands to the new Customs programme ................................................................... 388 

Conclusions..................................................................................................................... 389 

Annex B.3 - e-Commerce and digital trade ............................................................................ 390 

Introduction.................................................................................................................... 390 

Background ..................................................................................................................... 390 

Key issues for customs administrations ......................................................................... 394 

Demands to the new Customs programme ................................................................... 405 

Conclusions..................................................................................................................... 406 

Annex B.4 - External border protection: land border, sea border and air border ................. 407 

Introduction: a customs perspective on land, sea and air border management in the EU
 ........................................................................................................................................ 407 

Case study: Land border protection ............................................................................... 410 

Case study: Air border protection .................................................................................. 424 

Case study: Sea border protection ................................................................................. 432 

Concluding remarks on land, sea, air border protection ............................................... 439 

360 

 
 
 
This  annex  presents  the  case  studies  prepared  for  the  study.  The  purpose  of  such  case 
studies  is  to provide  concrete  insights  on Member  States  current  and  future  problems  or 
challenges  that  the  Customs  2020  programme  is  already  helping  to  address  or  could  help 
address in the future. These problems/challenges can be derived from both the general and 
specific trends identified in the preliminary problem tree and linked with one or more fields 
of  customs  competencies.  Coherently  with  this  approach,  we  put  six  case  studies  (three 
together  on  border  protection),  covering  several  trends  and  emerging  issues.  The  case 
studies focus on the following topics:  

  Data and Information;  
  Trade facilitation, single window and centralised clearance;  
  E-Commerce  and  digital  trade:  customs  challenges  in  balancing  trade  facilitation, 

safety / security and revenue collection;  

  External border protection: land border, sea border and air border. 

For each of the case studies, the following structure is presented:  

  Introduction: introducing the topic, the approach and sources used;  
  Background: describing the current trend/situation with regard to the topic object of 

the case study;  

  Key  issues  for  customs  administrations:  focusing  on how does the topic  of the  case 

study affect customs administrations;  

  Demands  to  the  new  Customs  programme:  presenting  which  solutions  or  tools  the 
Customs  programme  is  already  implementing  or  could  put  in  place  in  the  next 
generation to address the challenges and impacts of the topic of the case study;  

  Conclusions: summarising the key messages from the case study.  

References  to  the  documental  sources  consulted  for  each  case  study  are  provided 
throughout the document.  

361 

 
 
 
 
Annex B.1 - Data and information 

Introduction 

This  case  study  aims  to  deepen  the  insights  on  how  customs  administrations  and  the 
Customs Union in general are affected by and can deal with the challenges/issues related to 
data  and  information.  The  thematically  oriented  case  study  is  directly  associated  with  the 
general  trend  on  globalisation,  which  results  in  the  customs-specific  trend  on  data  and 
information (cf. the problem tree identified in this study). 

Nevertheless,  it  should  be  noted  that  data  and  information  are  also  closely  related  to 
various  other  general  and  specific  trends  identified.  Globalisation  results  for  instance  in 
higher trade and service flows, which in their turn result in the availability of an increasing 
amount  of  data  that  can  be  used.  Furthermore,  new  technologies,  equipment  and  digital 
supply  networks  are  often data-driven  by  definition.  In  this  respect, the  UCC  constitutes a 
legal  basis  for  continuing  the  computerisation  of  customs,  since  it  provides  that  all 
information  exchanges  between  the  customs  administrations  and  between  economic 
operators and these authorities, as well as the storage of such information, has to happen 
via  electronic  data  processing  techniques.  Moreover,  in  the  context  of  the  modernisation 
and transparency of administrations, data are an enabler for trade facilitation and the Single 
Window.  Furthermore,  the  use  of  data  to  support  decision-making  can  help  customs 
administrations to do more with less, although their roles and responsibilities increase. 

Although this case study primarily intends to increase the understanding of specific (current 
and future) challenges concerning data and information to emphasise associated issues that 
necessitate  particular  attention  in  terms  of  capacity  or  collaboration,  it  also  includes 
possible  solutions  and  activities  that  the  future  Customs  programme  could  support  and 
promote.  Hence,  on  the  one  hand,  this  case  study  aims  to  provide  insights  on  the 
importance and implications of data and information for customs administrations, as well as 
for  the  functioning  of the  entire  Customs  Union in  general.  It  also  emphasises  needs  with 
respect  to  data  and  information  in  terms  of  cooperation  between  national  customs 
administrations  and  their  capacity.  On  the  other  hand,  this  case  study  intends  to  identify 
whether  and  how  data  and  information  could  be  positioned  within  a  future  Customs 
programme. Therefore, it considers potential solutions to address the main challenges and 
issues identified, as well as the potential role of the future Customs programme. 

In  order  to  ensure  that  this  case  study  results  in  a  solid  understanding  of  data  and 
information  for  customs,  a  combined  approach of  desk research  and  fieldwork  in  selected 
Member States was used for the collection of the data needed. Based on desk research, it 
was identified what data and information mean for customs and trade in general, as well as 
what the implications are for customs administrations and the EU Customs Union in general. 

362 

 
 
In  this  context,  results  of  academic  research,  as  well  as  research  studies  of  the  EU  or  any 
other  relevant  organisations  have  been  used.  Furthermore,  where  possible  and  relevant, 
statistic data originating from the national and EU level have been acquired.  

Subsequently,  the  initial  insights  were  broadened  and  deepened  through  interviews  with 
relevant  stakeholders  in  six  Member  States:  Belgium,  Croatia,  Denmark,  Estonia,  France 
and Hungary. The stakeholders interviewed included some relevant persons in the customs 
administrations of the EU Member States selected (e.g. heads of the risk analysis units), as 
well  as  representatives of  third  party  organisations  (e.g. software  integrators  active  in  the 
field  of  customs,  customs  brokers,  etc.).  The  entire  list  of  interviewees  at  the  EU  and 
national level can be consulted in the Annex C to the Second Interim report. 

Moreover,  even  though  the  case  study  mainly  considers  national  perspectives,  it  also 
includes various links with the functioning of the complete EU Customs Union. Furthermore, 
the case study embraces forward-looking and/or innovative views and ideas to ensure the 
relevance of the programme in the post-2020 period.  

Background 

Customs  controls  were  traditionally  based  on  paper-based  declarations  and  a  variety  of 
other  paper-based  documents.  However,  the  customs  ecosystem  has  steadily  developed 
towards  a  growing  number  of  electronic  interactions,  reflecting  the  increasing  level  of 
digitalisation. The customs controls are now for instance often based on risk analyses that 
leverage electronically provided data. The use of such electronic interactions also facilitates 
an accurate and effective communication among businesses and customs administrations. 

The  growth  in  electronic  customs  interactions  is  largely  associated  with  the  electronic 
customs project. This project, which was initiated by the European Commission, intends to 
replace  the  paper-based  customs  procedures  with  EU-wide  electronic  procedures.  The 
legislative basis  of this electronic  customs  project  belongs  to  a policy  framework  fostering 
modern,  effective  and  efficient  customs  processes  and  procedures  that  are  applied  in  a 
consistent and seamless way across the EU. Hence, customs revenue and other regulatory 
customs  goals  can be  protected,  while facilitating  any legitimate  trade.  In  concrete  terms, 
the legislative basis of the electronic customs project consists of the following key aspects: 

  The  Security  and  Safety  Amendment  of  the  Community  Customs  Code  intends  to 
have an equivalent level of protection through customs controls for goods brought 
into or out of the customs territory. This amendment provides, amongst others, for 
the entire computerisation of all procedures related to security and safety; 

  The  Decision  on  the  paperless  environment  for  customs  and  trade  (so-called  e-
Customs Decision)339 offers a framework for the EU-wide use of electronic customs 

339 Decision  No  70/2008/EC  of  the  European  Parliament  and  the  Council  on  a  paperless  environment  for 
customs and trade, http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2008:023:0021:0026:EN:PDF. 

363 

 
 
                                                      
systems  that  support  customs  processes  and  procedures  in  the  EU.  In  concrete 
terms,  the  e-Customs  Decision  specifies  that  the  electronic  customs  project  should 
generally aim to establish interoperable, secure electronic customs systems for the 
exchange of data; 

  The UCC340 serves as the new framework Regulation on the rules and procedures for 
customs  throughout  the  EU.  The  UCC  was  based  on  the  previously  existing 
framework  and  constitutes  a  legal  basis  for  completing  the  computerisation  of 
customs.  In  particular,  it  provides  that  all  information  exchanges  between  the 
customs  administrations  and  between  the  economic  operators  and  these 
authorities,  as  well  as  the  storage  of  such  information,  has  to  take  place  through 
electronic  data  processing 
its  Delegating  and 
Implementing  Acts,  the  UCC  determines  concrete  processes,  common  data 
requirements  and  –  in  the  future  likely  –  technical  arrangements  to  develop, 
maintain  and  utilise  electronic  customs  systems  supporting  the  UCC’s  ambition  to 
have fully connected customs processes. 

techniques.  Together  with 

in  particular,  the  new  UCC  encompass  the 
The  electronic  customs  project  and, 
development,  deployment,  operation,  maintenance,  support  and  quality  assurance  of  an 
increasing  number  of  electronic  customs  systems  to  support  the  further  digitalisation  of 
customs procedures and processes in the EU. In concrete terms, the electronic systems that 
shall support the UCC, as well as the timing of their introduction, are specified in the UCC 
Work  Programme  (WP)  with  respect  to  the  development  and  deployment  of  these 
systems341.  Amongst  others,  the  UCC  WP  also  defines  the  projects  and  electronic  customs 
systems  for  harmonised  data  exchange  based  on  internally  accepted  data  models  and 
message formats342. 

The growth in electronic interactions implies that effective and efficient customs procedures 
and  processes  require  to  an  ever-increasing  extent  the  availability  and  correctness  of 
relevant  data.  In  this  context,  the  analysis  of  such  data  increasingly  assists  all  types  of 

340 Regulation (EU) No 952/2013 of the European Parliament and of the Council of 9 October 2013 laying down 
the Union Customs Code: http://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:32013R0952&rid=1. 

the 

341 The  first  UCC  WP  was  adopted  by  the  European  Commission  Implementing  Decision  of  29  April  2014, 
establishing 
(http://eur-lex.europa.eu/legal-
the 
content/EN/TXT/PDF/?uri=CELEX:32014D0255&from=EN).  This  first  WP  has  already  been  replaced  and 
repealed by the European Commission Implementing Decision (EU) 2016/578 of 11 April 2016, establishing the 
WP relating to the development and deployment of the electronic systems provided for in the UCC (http://eur-
lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:32016D0578&from=EN). 

UCC 

WP 

for 

342 At  the  international  level,  the  World  Customs  Organisation  (WCO)  Data  Model  offers  a  set  of  carefully 
combined  and  mutually  supportive  data  requirements.  The  WCO  Data  Model  is  updated  regularly  to  meet 
procedural  and  legal  needs  of  cross-border  regulatory  agencies  such  as  customs.  It  is  also  consistent  with 
different international standards, e.g. the United Nations Trade Data Elements Directory (UNTDED). The WCO 
Data  Model  contains  the  context  of  information  exchange  (business  process  models),  the  content  of 
information exchange (datasets and code lists), the structures of information exchange (information models) 
and technical solutions for information exchange (UN/EDIFACT and XML message design). 

364 

 
 
                                                      
organisations to make better, more efficient decisions based on actual information, offering 
evidence,  insights  and  predictions.  In  essence,  data  analytics  concerns  the  inspection, 
cleaning,  transformation  and  modelling  of  data  to  find  relevant  information  that  can 
support decision-making. 

DATA ANALYTICS 

Data  analytics  denotes  in  essence  a  process  of  collecting  raw  data  and  thoughtfully  converting 
these data into information and eventually knowledge useful for decision-making (cf. figure below). 
Hence, it concerns the extraction of value from data. Data can be collected and analysed in order to 
answer questions, test hypotheses or challenge theories. 

Figure 45 – Relationship between environment, data, information and knowledge 

Source: Deloitte 

Data analytics includes descriptive statistics, confirmatory data analysis (confirming or falsifying any 
existing  hypothesis)  and  exploratory  data  analysis  (discovering  new  elements).  In  addition, 
predictive  analytics  concern  data  analytics  used  for  predictive  rather  than  descriptive  purposes. 
Data mining is for instance a technique focusing on predictive modelling and knowledge discovery. 

A  proper  data  analytics  exercise  covers  different  phases  (cf.  the  figure  and  description  below). 
These phases may be iterative, since results of later phases may imply additional work on earlier 
phases. 

365 

 
 
 
Figure 46 – Data analytics process343 

Source: Deloitte based on data science process flowchart in Schutt, R. & O’Neil, C. 

Data needs 
Based  on  the  purpose  of  the  data  analytics  exercise  (e.g.  information  required  for  making  a 
decision),  the  data  needed  as  input  are  specified.  In  concrete  terms,  specific  variables  (e.g.  the 
monetary value, the country of origin, the goods code, etc.) to be collected per experimental unit 
(e.g.  a  container,  a  package,  etc.)  are  defined.  The  data  may  be  numerical,  categorical  or  a 
combination (i.e. ordinal). 

Data collection 
Data may be collected from a broad variety of sources. Through desk research, relevant data can 
for  instance  be  gathered  from  databases,  online  sources  and  documentation.  Data  can  also  be 
obtained using interviews with relevant individuals. In the context of customs, data collected from 
the  physical  environment  via  devices  (e.g.  cameras,  sensors,  scanners,  etc.)  may  be  particularly 
interesting. 

Data processing 
The data initially acquired is often unstructured and, hence, requires processing before any analysis 
can  be  conducted.  This  may  for  instance  involve  structuring  data  into  a  table  with  rows  and 
columns, e.g. using a spreadsheet. 

Data cleaning 
Once  processed  and  properly  organised,  the  data  may  still  contain  various  anomalies  (e.g. 
duplicates,  errors,  incompleteness,  etc.).  Data  cleaning  refers  to  the  correction  and  (ideally) 
prevention  of  such  anomalies.  This  involves  deduplication,  data  quality  assessments,  identifying 
identified  using  various  analytical  techniques  (e.g. 
outliers,  etc.  Anomalies  can  often  be 
quantitative data methods to identify outliers in datasets). 

Exploratory data analysis 
Once  cleaned,  the  data  can  be  analysed.  In  order  to  obtain  an  initial  understanding  of  the 
information contained in the data, exploratory data analysis techniques may be used.  Descriptive 

343 This  figure  is  inspired  by  the  data  science  process  flowchart  in  Schutt,  R.  &  O’Neil,  C.  (2013).  Doing  data 
science: Straight talk from the frontline. O’Reilly Media, Inc. 

366 

 
 
 
                                                      
statistics  (e.g.  averages)  and  visualisations  (e.g.  graphs)  may  for  instance  be  used  to  acquire  an 
initial understanding of the  messages  contained in the  data. Moreover, exploratory data analysis 
may result in additional data needs or data cleaning (cf. the iterative character of the data analytics 
phases). 

Data models and algorithms 
In order to deepen the understanding of the information contained in the data attained, formulas 
or  algorithms  may  be  applied  to  the  data.  This  enables  to  identify  relationships  among  various 
variables, e.g. a correlation or causality. In particular, models for evaluating the dependence of one 
variable on  another  variable may  be  developed. Regression  analysis may  for  instance  be  used  to 
model whether the size of a package (independent variable X) explains the understatement of such 
a package’s value (dependent variable Y). This may be described as Y = aX + b + error, where the 
model should result in values for a and b that minimise the error when predicting Y for values of X. 

Data product 
A  data  product  denotes  an  application  that  takes  data  input  and  generates  output,  which  is  fed 
back  into the  environment. It may  be  based on a mathematical model or algorithm. It would for 
instance  be  possible  to  determine  the  likelihood  of  goods  to  involve  a  customs-related 
infringement based on their country of origin. 

Communication 
Once the data has been analysed, the results have to be communicated effectively and efficiently. 
In  this  respect,  different  reporting  formats  (e.g.  tables,  graphs,  etc.)  can  be  used.  Moreover, 
feedback  from  this  phase  may  result  in  a  need  for  additional  work  on  earlier  phases  (cf.  the 
iterative character of the data analysis phases). 

The  data  analytics  landscape  is  continuously  evolving.  The  amount  and  complexity  of  the 
data available is for instance gradually increasing. Datasets that are so big and/or complex 
that  the  traditional  data  analysis  techniques  get  inadequate  are  often  referred  to  as  big 
data. Big Data entails for instance challenges with respect to data collection, data storage, 
data sharing, data transfer, etc. Furthermore, the momentum of data analytics continues to 
grow.  Consequently,  data  analytics  is  gradually  moving  into  the  mainstream  of  customs 
decision-making. 

BIG DATA 

Big  Data  usually  involves  datasets  that  are  characterised  by  sizes  beyond  the  ability  of  the 
traditional  data  analysis  tools  to  collect,  manage  and  process  data  within  a  tolerable  timeframe. 
The size of big data has been and is likely to continue being a growing number, currently ranging 
from  terabytes  to  some  petabytes  and  exabytes.  The  global  technological  capacity  per  capita  to 
store  information  has  for  instance  roughly  doubled  every  forty  months  since  the  1980s 344. 
Furthermore, data is increasingly gathered using numerous devices (e.g. cameras, mobile devices, 
software logs, etc.). 

According to Gartner, “big data is high-volume, high-velocity and/or high-variety information assets 
that demand cost-effective, innovative forms of information processing enabling enhanced insight, 
decision-making and process automation”345. Consensually, one could say that big data “represents 

344 This  was  derived  from  Hilbert,  M.  &  López,  P.  (2011).  The  world’s  technological  capacity  to  store, 
communicate, and compute information. Science, 332(6025), 60-65 

345 This definition was derived from the Gartner IT glossary. 

367 

 
 
                                                      
the information assets characterised by such a high volume, velocity and variety to require specific 
technology  and  analytical  methods  for  its  transformation  into  value”346.  In  general,  one  could 
describe big data using the following characteristics: 

  Variety – The type, nature and source of data generated, stored and processed; 

  Veracity – The great variety in quality of data generated, stored and processed; 

  Variability – The inconsistency of data generated, stored and processed; 

  Velocity – The speed at which data is generated, stored and processed; 

  Volume – The amount of data generated, stored and processed. 

Lately, the term big data is sometimes used to refer to the use of advanced data analytics tools that 
can extract value from data (e.g. predictive analytics). 

In  the  particular  context  of  customs,  a  substantial  number  of  diverse  data  sources  is 
available  for  customs  administrations.  The  largest  sources  of  data  are  most  likely  customs 
declarations,  e.g.  import  and  export  declarations.  The  Estonian  legislation  defines  for 
instance  the  variables  to  be  included  in  customs  declarations  (e.g.  name,  value,  currency, 
pieces,  weight,  goods  code,  etc.).  In  addition,  some  customs  administrations  can  also 
leverage  data  owned  by  other  public  administrations.  In  Croatia  and  France,  the  customs 
administration exchanges for instance on a frequent basis data with the tax administration. 
In Hungary, the customs administration also exchanges data with the police, and they even 
share  a  common  system  containing  data.  The  customs  administrations  across  the  EU 
sometimes  also  exchange  data  with public  administrations  of other  countries  according  to 
Council  Regulation  (EC)  No  515/97347.  Furthermore,  the  results  of  actual  customs  checks 
present  another  important  data  source  for  many  customs  administrations.  In  Estonia, 
customs  officers  need  for  instance  to  provide  feedback  to  the  risk  analysis  system  when 
infringements were found. The Estonian customs officers can even enrich their data sources 
with  relevant  information  (e.g.  places  for  hiding  goods  in  particular  cars,  rumours,  etc.). 
Finally,  some  customs  administrations  acquire  data  from  external  sources.  The  French 
customs administrations buys for instance particular databases from an analytics companies 
(e.g. Bureau Van Dijk). 

Given  the  opportunities  linked  with  data  analytics  and  big  data,  public  authorities  are 
steadily looking for ways to handle vast and diverse amounts of data, as well as to exploit 
these  data  in  order  to  improve  their  performance  in  responding  to  the  societal  needs.  As 
such, “big data analytics tools can be useful in policy-making for processing huge amounts of 

346 De  Mauro,  A.,  Greco,  M.  &  Grimaldi,  M.  (2016).  A  formal  definition  of  big  data  based  on  its  essential 
features. Library Review, 65(3), 122-135 

347 Council  Regulation  (EC)  515/97  of  13  March  1997  on  mutual  assistance  between  the  administrative 
authorities of the Member States and cooperation between the latter and the European Commission to ensure 
the  correct  application  of  the  law  on  customs  and  agricultural  matters,  https://eur-lex.europa.eu/legal-
content/EN/TXT/PDF/?uri=CELEX:31997R0515&from=EN 

368 

 
 
                                                      
information  and,  through  this,  for  detecting  and  predicting  patterns”348.  In  particular, 
customs  administrations  are  often  using  data  and  data  analytics.  Since  data  is  becoming 
increasingly  available,  this  use  is  likely  to  expand  over  time.  The  Lithuanian,  Estonian  and 
Irish  customs  administrations  are  for  instance  amongst  different  administrations  that 
experiment with new data analytics tools with a view on carrying out their activities more 
efficiently349. 

is  evident  that  data  analytics  and  big  data  present  opportunities  for  customs 
It 
administrations  to  carry  out  their  risk  management  activities  effectively and  efficiently,  as 
well  as  to  facilitate  smooth  trade  flows.  This  is  particularly  important  when  considering 
other specific and general trends (e.g. increase in roles and responsibilities, implementation 
of  the  UCC,  modernisation  and  transparency  of  public  administrations,  new  technologies, 
increased flows in services and trade, etc.). Nevertheless, this implies that there is a distinct 
need  for  customs  administrations  to  be  capable  of  using  data  in  their  processes  and 
procedures. 

Key issues for customs administrations 

Based on the considerations above, it is clear that data and their use are fundamental for 
the  customs  administrations  across  the  EU.  Furthermore,  the  importance  of  data  and 
information for customs is likely to increase in the future. 

Although  data  and  information  have  already  shown  their  extensive  value  to  different 
customs  administrations  via  effective  results,  there  is  still  considerable  diversity  in  the 
digital  maturity  of  these  administrations.  Some  customs  administrations  have  no 
established vision on how to use data. Other customs administrations continue using mainly 
manual  procedures,  although  computerised  tools  are  regularly  available.  The  Hungarian 
customs  administration  requires  for  instance  hard  copies  of  various  documents.  Such 
requirements render the customs processes slower and burdensome, which decreases their 
effectiveness and increases their costs. 

In  general,  customs  administrations  across  the  EU  are  confronted  with  a  variety  of 
challenges  and  needs  regarding  data  and  information.  These  challenges  and  issues  are 
detailed below. 

Capacity in terms of operational processes and structures 

Customs administrations often use data and data analytics for risk management purposes. 
In  concrete  terms,  risk  analyses  enable  customs  administrations  to  concentrate  on  goods 

348 M.  Janssen,  M.A.  Wimmer,  &  A.  Deljoo,  Policy  practice  and  digital  science:  Integrating  complex  systems, 
social simulation and public administration in policy research, 2015, Springer. 

349 Lithuanian  customs  is  for  instance  using  predictive  analytics  to  help  detect  smuggling  and  other  illegal 
(http://www-03.ibm.com/software/businesscasestudies/au/en/corp?synkey=X941543K55207M80), 
activities 
fraud 
Irish 
while 
(https://www.sas.com/sv_se/customers/irish-tax-and-customers.html). 

currently 

customs 

utilising 

predict 

mining 

data 

to 

is 

369 

 
 
                                                      
bearing the highest risks based on data available. Hence, data and data analytics can provide 
customs administrations with crucial information to target their controls particularly on the 
most risky goods or on goods lacking particular information. 

Risk  analyses  enable  customs  administrations  to  facilitate  trade.  In  case  goods  seem  to 
comply  with  customs  regulations  based  on  data  available,  there  is  for  instance  no  direct 
need  to  bother  the  trader  with  additional  customs  controls.  Furthermore,  risk  analyses 
increase  the  efficiency  of  customs  controls,  which  is  favourable  in  an  environment  where 
administrations are regularly required to “do more with less”. In addition, the UCC defines in 
any  event  that  all  information  exchanges  between  customs  administrations  and  between 
economic operators and these administrations, as well as the storage of such information, 
have  to  happen  through  electronic  data  processing  techniques.  In  this  context,  various 
customs  administrations  across  the  EU  also  use  data  to  pre-fill  different  customs-related 
forms for traders. 

The  acquisition  of  actual  information  and  knowledge  based  on  the  data  available 
necessitates a well-established approach regarding data analytics (cf. the considerations in 
the  background  section  above).  Nevertheless,  several  customs  administrations  are  still 
struggling with treating data and information properly – which should be considered a key 
competence of any modern customs administration. 

The  challenges  concerning  the  operational  processes  and  structures  are  mostly  related  to 
the management  and  processing  of large  quantities  of  often  complex  data,  as well  as to 
level  of  data  quality.  As  the  data  sources  of  customs 
assuring  an  appropriate 
administrations are often diverse and dispersed (cf. above), the collection of relevant data 
requires in many cases efforts with respect to interoperability, centralisation and structure 
of data. Moreover, the uniformity of data across the EU is generally limited. Therefore, the 
quality of data needs to be governed appropriately. Otherwise, customs administrations risk 
basing  some  decisions  on  inadequate  information,  which  may  hamper  the  effective 
fulfilment of their responsibilities. 

With  respect  to  data  quality,  it  should  be  noted  that  customs  administrations  tend  to 
consider that the costs of performing quality checks and improvements do not outweigh the 
potential benefits in many situations. Therefore, the data is commonly taken as it is. In this 
context, the Estonian customs administration also particularly emphasised that the quality 
of the data can be considered generally good. 

Next  to  the  operational  use  of  data  and  information  in  the  form  of  risk  analyses  and  pre-
filling forms, customs administrations often leverage data to compute various statistics. The 
Danish  customs  administration  uses  data  for  instance  for  such  analytical  purposes.  It  is 
currently  even  experimenting  with  tools  to  construct  status  reports  automatically.  In 
general,  data  and  their  associated  statistics  are  used  to  support  and  evaluate  decisions  in 
many countries. 

In  addition,  data  and/or  their  associated  statistics  are  sometimes  shared  with  businesses 
and  citizens.  This  increases  transparency,  which  is  in  many  cases  noticeably  appreciated. 

370 

 
 
Customs administrations  can  share  statistics  concerning  individual traders  online,  enabling 
for instance brokers to make better informed decisions in the context of their partnerships. 

Capacity in terms of IT systems and infrastructure 

Having  data  does  not  necessarily  mean  having  actual 
information  or  knowledge. 
Furthermore,  the  amount  and  complexity  of  the  data  available  is  often  large,  which  is 
expected  to  continue  increasing  in  the  coming  years  (cf.  the  considerations  in  the 
background  section).  This  implies  that  human  beings  are  in  many  cases  not  capable  of 
analysing  data  in  a  sufficiently  adequate  and  accurate  way.  In  that  sense,  data  and  data 
analytics  require  to  an  ever-increasing  extent  the  use  of  proper  IT  systems  and 
infrastructure350. 

The  electronic  customs  project  and, 
in  particular,  the  new  UCC  encompass  the 
development,  deployment,  operation,  maintenance,  support  and  quality  assurance  of  an 
increasing  number  of  electronic  customs  systems  to  support  the  further  digitalisation  of 
customs  procedures  and  processes  in  the  EU.  Nevertheless,  the  maturity  of  the  various 
countries with respect to these systems is diverse. The Danish customs administration is for 
instance  currently trying  to  create  the  UCC  systems.  However,  it  is  aware that  compliance 
with the deadlines set by the European Commission is very challenging, since major delays 
in implementing the UCC systems have been incurred compared with the other EU Member 
States.  The  project  regarding  the  Customs  Decisions  system  was  for  instance  recently 
initiated,  whereas  this  project  was  already  finished 
in  Sweden.  Consequently,  the 
implementation of the systems envisaged within the electronic customs project is generally 
not uniform. 

This lack of uniformity in the implementation of electronic customs systems is also related 
to an issue perceived regarding the common customs IT strategy at the EU level. In essence, 
this  strategy  only  concerns  electronic  customs  systems.  However,  these  systems  are  also 
required  to  interact  with  different  national  systems  that  are  not  necessarily  specific  to 
customs.  In  this  respect,  the  harmonisation  of  electronic  customs  systems  at  the  EU  level 
often  confronts  the  Member  States  with  issues  to  connect  these  systems  with  systems  at 
the national level. 

Although the electronic customs project and, in particular the UCC, envisage harmonisations 
regarding IT systems and infrastructure across the EU, there are still a substantial number of 
national systems. Hence, despite the common legislation, these different national systems 

350  Although  data  analytics  tools  are  considered  indispensable  in  a  big  data  environment,  customs 
administrations  emphasised  that  the  reliance  on  such  tools  and  data  in  general  should  not  be  absolute.  If 
customs officers would rely too much on data, they may only follow the results of data analytics tools. As it is 
unlikely  that  illicit  trade  or  behaviour  can  be  completely  tracked  through  data,  customs  officers  and  their 
expertise should still be considered valuable. Therefore, customs officers should remain capable of identifying 
customs-related  risks  without  data.  In  this  respect,  data  cannot  entirely  replace  the  expertise  of  a  customs 
officer  and  customs  controls  in  general.  The  French  customs  administration  explicitly  considers  the  result  of 
data analytics for instance merely an operational support for its customs officers. 

371 

 
 
                                                      
and  practices  still  have  to  be  considered.  In  this  respect,  the  maturity  of  the  various 
countries is also diverse. The Danish customs administration acknowledged for instance that 
its legacy systems are relatively old and require significant modernisation. On the contrary, 
the  Estonian  customs  administration  highlighted  that  it  considers  itself  quite  advanced  in 
terms of national IT systems and infrastructure. 

The  diversity  of  customs  administrations  regarding  their  national 
IT  systems  and 
infrastructure  implies  that  data  analytics  tools  in  the  field  of  customs  vary  considerably 
across the EU. Hence, it is conceivable that the data analytics tool in one country triggers a 
detailed  customs  control,  whereas  this  would  not  be  the  case  in  another  country.  Such 
instigating  the  potential 
situations  hamper  the  uniformity  of  the  Customs  Union, 
exploitation of “weak spots”. 

Furthermore,  customs  administrations  are  often  confronted  with  several  systems  that 
require  similar  data.  There  are  for  instance  closely  related  systems  of  OLAF,  DG  TAXUD, 
WCO, etc. In many cases, customs administrations perceive that there is insufficient or even 
no interoperability between these systems. 

Capacity in terms of human resources 

Although  data  are  mostly  treated  in  a  computerised  way,  human  intervention  is  still 
required for different purposes (e.g. for creating algorithms or integrations with databases). 
In Estonia, a team of more than 70 persons is for instance working in the central intelligence 
department of the Estonian Tax and Customs Board (ETCB). However, the number of people 
dedicated to working with data is perceived insufficient in various countries. In Croatia, only 
seven persons are for instance working on data analyses. 

The  ability  to  interpret  and  use  data  requires  also  people  with  the  right  knowledge  and 
skills,  e.g.  data  scientists.  However,  customs  administrations  across  the  EU  struggle  with 
hiring such people for a variety of reasons. In particular, the number of suitable persons is 
already 
in  any  case.  Furthermore,  the  competitive  position  of  customs 
administrations  on  the  labour  market  is  often  restricted  (e.g.  due  to  relatively  long  hiring 
processes, the rather unattractive image of customs, the relatively modest salary offered). 

limited 

Obstacles for cooperation regarding data 

In  general,  the  entire  EU  can  benefit  from  active  data  sharing  between  the  EU  Member 
States  and  between  public  administrations.  For  customs,  this  can  avoid  opportunities  for 
traders  and  citizens  to  exploit  particular  “weak  spots”  in  the  Customs  Union.  In  concrete 
terms,  customs  administrations  could  for  instance  use  data  with  respect  to  companies 
established in other EU Member States to take more informed decisions concerning these 
companies.  Without  these  data,  it  might  happen  that  some  traders  can  easily  ship  illicit 
goods without being detected in particular countries, even though they are considered risky 
traders in other countries. Hence, collaboration in terms of data exchange and sharing with 
other countries and administrations will likely be key for the future of the Customs Union. 

372 

 
 
Nevertheless,  the  exchange  of  data  with  other  public  administrations  and  other  countries 
(EU or non-EU countries) is limited. In Croatia, the customs administration has for instance 
no  real-time  data  exchange  with  the  Czech  Republic  concerning  Croats  establishing  a 
company in this country. The Croatian customs administration has also limited to no access 
to data owned by other Croatian public administrations. The police is for instance reluctant 
to  share  its  data  with  the  customs  administration.  However,  customs  and  border  guards 
could  for  instance  benefit  from  direct  access  to  data  owned  by  the  other  party.  This  may 
even result in more integrated border management for the EU in general. 

In  essence,  the  exchange  of  data  with  other  public  administrations  and  other  countries  is 
often restricted by specific regulations. Especially restrictions regarding data protection and 
privacy are regularly limiting the possibilities for exchanging data. Even at the national level, 
it is often difficult to exchange data between public administrations. In France, this requires 
for  instance  the  authorisation  by  the  National  Commission  on  Informatics  and  Liberty. 
Consequently,  it  is  plausible  that data  exchanges  at  the  EU  level  are  even  more  restricted 
and complicated, since the associated rules of all EU Member States have to be taken into 
account. 

In  addition, the  cooperation  with third  countries  is  often not effective.  In particular,  there 
are  for  instance  clear  issues  regarding  incorrect  labels  on  packages  (e.g.  understating  the 
value of the goods, mentioning an incorrect description of the goods). This is particularly the 
case  for  many  packages  coming  from  China.  In  such  situations,  customs  administrations 
across  the  EU  were  for  instance  not  able  to  acquire  any  additional  information  from  the 
third countries involved. Even when additional information was provided, it was often not 
possible to match it with the information required by the EU. 

Furthermore,  it  should  be  noted  that  there  are  currently  only  a  small  number  of 
collaborative  initiatives  with  third  party  organisations.  The  existing  initiatives  mainly 
consider  collaborations  at  the  national  level.  The  Belgian  customs  administrations  worked 
for instance with Antwerp University on a risk model for customs. Collaborative initiatives at 
the EU level are essentially as good as inexistent in the field of data and information. 

Status in the Customs 2020 programme 

As  data  and  information  are  important  for  any  modern  customs  administrations,  the 
Customs  2020  programme  already  provides  some  support  in  this  field.  Even  though  this 
support  intends  to  address  some  challenges  and  issues  described  above,  it  needs  to  be 
noted  that  the  existing  initiatives  do  not  enable  to  overcome  all  challenges  and  issues. 
Hence,  there  remains  a  strong  need  for  the  programme  to  provide  further  support 
regarding data and information. 

In particular, there already exists a Data Mining Project Group. This project group focuses on 
the  mutual  exchange  of  best  practices  concerning  data  and  information  between  the 
different national customs administrations. Nevertheless, different customs administrations 
consider  a  need  for  smaller  and  more  targeted  groups  to  exchange  particular  knowledge 
and experiences regarding data and information. 

373 

 
 
There also exists a Trade Contact Group (TCG) at the EU level, which intends to strengthen 
the  contact  between  customs  and  traders.  Nevertheless,  various  stakeholders  highlighted 
that the TCG is often less efficient compared with collaborative efforts at the national level. 
The  TCG  is  considered  too  big  for  effective  and  efficient  contact  between  customs  and 
trade. Moreover, various TCG participants indicated that the European Commission seems 
not to take the issues raised sufficiently into account. 

In  addition,  the  Customs  2020  programme  funds  several  platforms  for  exchanging 
information  between  participating  countries.  Tools  such  as  the  Programmes  Information 
and  Collaboration  Space  (PICS)  and  the  Communication  and  Information  Resource  Centre 
for Administrations, Businesses and Citizens (CIRCABC) facilitate collaboration between the 
different programme participants. However, some participants indicated that there are too 
many different tools for collaboration. 

Moreover,  the  Customs  2020  programme  supports  the  establishment  of  all  electronic 
customs systems envisaged in the electronic customs project. In particular, the programme 
funds  the  development,  deployment,  operation,  maintenance,  support,  as  well  as  quality 
assurance of the Union components of these systems under its IT Capacity Building activity. 
In  addition,  the  programme  includes  different  project  groups  that  enable  customs 
administrations to discuss and decide on specific aspects of the various electronic customs 
systems  (e.g.  business  cases,  specifications,  data  models,  etc.).  The  Customs  2020 
programme  funds  for  instance  the  ICS2  Functional  Requirements/Specifications  and 
Transition Feasibility Project Group. This project group aims to contribute to the delivery of 
the  Level  4  Business  Process  Models  and  business  requirements/specifications  for  the  so-
called  ICS2  Block  1.  This  project  group  also  contributes  with  expertise  in  drafting  a 
document concerning the feasibility of the ICS1/ICS2 transition. 

Demands to the new Customs programme 

The considerations in the previous section clearly demonstrate that customs administrations 
are  confronted  with  different  challenges  and  needs  regarding  data  and  information. 
Although  various  countries  have  already  undertaken  concrete  initiatives  to  address  their 
challenges  and  needs,  it  is  generally  acknowledged  that  the  programme  should  continue 
and also strengthen its support in the field of data and information. 

As  customs  administrations  across  the  EU  have  similar  needs  regarding  data  and 
information, the programme may be more efficient in addressing these needs (e.g. avoiding 
the  duplication  of  similar  efforts).  In  addition,  initiatives  coordinated  at  the  EU  level  may 
result in an increased level of harmonisation. As described before, this should avoid “weak 
spots” in the Customs Union and their exploitation by traders. 

Next to  an  overview  of existing  initiatives  to  address  challenges  and needs  regarding data 
and  information,  the  paragraphs  below  specify  some  ways  for  the  programme  to  support 
customs administrations in the field of data and information.  

Capacity in terms of operational processes and structures 

374 

 
 
Since  the  current  programme  focuses  extensively  on  IT  Capacity  Building,  several  EU 
Member States are fairly sceptical regarding this support for the development, deployment, 
operation,  maintenance,  operation,  as  well  as  quality  assurance  of  electronic  customs 
systems.  Various  customs  administrations  even  believe  that  the  programme  should  focus 
more  on  the  customs  processes  (i.e.  how  customs  administrations  work)  and  their 
alignment.  Although  the  current  programme  invests  heavily  in  IT  Capacity  Building,  these 
customs  administrations  emphasise  that  the  programme  should  first  concentrate  on 
common  customs  processes,  which  later  can  be  operationalised  through  common  data 
models and systems. 

However,  customs  administrations  across  the  EU  have  to  be  capable  of  collecting  high-
quality data in a structured way. Hence, they need to manage and process large quantities 
of  regularly  complex  data.  In  this  respect,  customs  administrations  typically  use  the 
standard  data  formats  defined  at  the  national,  EU  and/or  international  level.  Such  data 
formats enable transparency and uniformity with respect to data and their exact meaning. 
In  concrete  terms,  the  WCO  Data  Model  is  well-established  in  this  field.  In  addition,  the 
various  electronic  customs  systems  that  are  envisaged  in  the  UCC  and  the  electronic 
customs  project  in  general  also  include  standard  data  formats  at  the  EU  level.  Several 
countries also have a number of nationally defined data formats for purposes that are for 
instance not covered at the international or EU level. 

Nevertheless,  the  uniformity  of  data  across  the  EU  is  generally  considered  limited. 
Therefore, the programme should continue defining EU-wide data formats where needed or 
relevant.  In  this  respect,  particular  attention  should  be  paid  to  avoiding  ambiguity  due  to 
inconsistencies  or  overlaps  with  existing  standards.  Hence,  when  defining  data  formats, 
synergies with current data formats should be sought and materialised. Where needed, the 
programme  should  also  consider  the  rationalisation  of  data  formats  at  the  EU  level. 
Furthermore,  the  programme  can  also  provide  initiatives  that  enforce  the  actual  use  of 
standard data formats. 

Moreover,  the  quality  of  data  originating  from  third  countries  is  often  low.  In  particular, 
there are for instance frequent issues with incorrect information on packages coming from 
outside the EU (e.g. understatement of the value, incorrect description of the goods, etc.). 
Therefore,  the  programme  should  also  focus  on  strengthening  the  cooperation  and 
interaction with third countries. This should for instance ensure that EU Member States can 
easily  request  additional  information  to  third  countries  and  that  the  information  matches 
the associated requirements in the EU. In this context, standardised labels for e-Commerce 
packages  could  be  adequate  in  improving  the  quality  of  data  originating  from  third 
countries. 

In  addition,  the  programme  should  pursue  relevant  innovations  that  may  benefit  overall 
data  quality.  The  impact  and  challenges  presented  by  new  technologies  (e.g.  artificial 
intelligence) may be investigated at the EU level (e.g. in project groups). In this context, the 
French  customs  administration  can  for  instance  leverage  a  dedicated  innovation  team, 
which  investigates  the  general  aspects  that  the  customs  administration  is  likely  to  be 

375 

 
 
confronted  with  in  the  coming  five  years.  Furthermore,  the  well-established  system  with 
both  import  and  export  declarations  may  be  questioned  and  assessed.  Together  with 
Switzerland  and  France,  Austria  is  for  instance  currently  experimenting  how  export  data 
could be used directly for import declarations. 

Capacity in terms of IT systems and infrastructure 

is  already  responsible 

In  order  to  instigate  the  timely  and  uniform  implementation  of  the  electronic  customs 
systems  within  the  electronic  customs  project,  the  European  Commission  should  continue 
supporting  the  EU  Member  States  under  the  Customs  programme.  The  European 
for  the  development,  deployment,  operation, 
Commission 
maintenance,  support  as  well  as  the  quality  assurance  for  the  Union  components  of  the 
electronic  customs  systems.  The  customs  administrations  are  responsible  for  developing, 
deploying,  operating,  maintaining,  supporting  and  assuring  the  quality  of  the  national 
components of these electronic customs systems. In order to increase the efficiency and the 
delivery capacity at the national level, the European Commission may for instance promote 
IT-related  expert  teams  to  identify  and  operationalise  synergies  with  respect  to  similar 
needs  in  different  countries.  Furthermore,  the  possibilities  of  working  with  shared  IT 
suppliers may be explored. 

In general, the European Commission should always assume an exemplary and guiding role 
in the field of electronic customs systems. In this respect, it should for instance be avoided 
that new systems at the EU level require the duplication of data that is already captured by 
existing  systems  of  other  organisations  (e.g.  WCO).  As  such,  the  European  Commission 
should  aim  to  enforce  the  only-once  principle  under  the  programme.  If  relevant,  the 
European Commission may also instigate interoperability of systems. 

The  European  Commission  may  also  lead  the  way  in  the  application  of  new  technologies 
such  as  artificial  intelligence  or  distributed  ledger  technologies,  which  should  mainly 
stimulate  the  debate  and  raise  the  attention  in  the  EU  Member  States.  New  technologies 
should for instance be considered when establishing new systems, as well as when existing 
systems at the national or EU level have to be modernised and upgraded. 

RADIO-FREQUENCY IDENTIFICATION (RFID) IN CUSTOMS 

In  order  to  capture  data  more  efficiently,  the  use  of  Radio-Frequency  Identification  (RFID) 
technology  may  be  interesting.  In  concrete  terms,  an  RFID  chip  containing  relevant  information 
(e.g. goods code, exporter, country of destination, country of origin, etc.) could be attached to each 
box  included  in  a  container.  When  passing  through  an  RFID  gate,  customs  administrations  could 
read  the  information  regarding  all  goods  included  in  the container.  Hence,  without  interfering  in 
the flow of goods, it may be possible to extract data from packages that are not necessarily visible 
for a scanner. 

Regarding  data  analytics  in  particular,  there  are  already  several  tools  available  for  the 
customs  administrations  to  process  data  effectively  and  efficiently.  Without  being 
exhaustive, the tools at the international level include for instance the WCO Data Model (cf. 
above)  and  the  WCO  Customs  Enforcement  Network  (a  network  gathering  data  and 

376 

 
 
information, as well as being a central depository for enforcement-related information). In 
addition, customs administrations generally have national risk analysis systems for customs. 

RISK ANALYSIS IN BELGIUM 

The  Belgian  customs  administration  includes  a  dedicated  risk  analysis  unit.  This  unit  performs 
various  risk  analyses  both  at  the  central  and  local  level.  Its  use  and  interpretation  of  data  is 
especially based on SAS® tools. 

Based on the data available, the data analytics tools create risk profiles to determine what goods 
and declarations should be checked more thoroughly. In concrete terms, critical limits have been 
defined  for  all  data  variables.  Such  limits  enable  the  data  analytics  tools  to  determine  whether 
certain  goods  or  declarations  present  a  risk  based  on  a  particular  variable.  Therefore,  each  data 
variable can raise some kind of flag. If an import declaration contains a particular goods code, it is 
for  instance  possible  to  create  an  automatic  warning.  In  addition,  specific  data  variables  can  be 
combined to acquire more ‘integrated’ insights. 

The  risk  profiles  can  result  in  three  possible  outcomes.  A  ‘red  light’  implies  that  a  customs 
verification is required. This verification can happen through a physical or documentary check. An 
‘orange  light’  represents  a  warning.  In  this  case,  a  customs  verification  is  possible  (but  not 
required).  A  ‘green  light’  implies  that  the  goods  can  be  cleared  automatically  or  manually.  It  is 
possible to upgrade outcomes of the risk analysis tools (e.g. an ‘orange light’ can be upgraded to a 
‘red light’ in case customs-related infringements are suspected). Nevertheless, outcomes can never 
be downgraded. 

In  addition  to  the  goods  and  declarations  selected  based  on  the  data  available,  a  number  of 
customs declarations and goods is selected randomly. The results of random selections and checks 
enable the Belgian customs administration to refine its data analytics algorithms and systems. 

If  particular  goods or  customs  declarations  present potential  risks  based on their  risk  profile  (i.e. 
‘red light’) or were selected randomly, the on-site customs office is informed through the system 
that  an  additional  customs  check  needs  to  be  done.  In  case  of  an  ‘orange  light’,  the  on-site 
selection  team  is  responsible  to  decide  whether  an  additional  check  has  to  happen.  In  such 
situations,  customs  officers  can  consult  the  reason  for  suspecting  a  particular  cargo,  enabling  a 
more targeted check. 

In  case  infringements  are  found,  the  responsible  customs  officer  needs  to  provide  relevant 
feedback directly in the risk management system. This enables the Belgian customs administration 
to continue fine-tuning its systems and algorithms based on actual results of customs checks. 

Customs  administrations  across  the  EU  generally  have  national  risk  management  systems. 
As  the  creation  of  a  single  data  analytics  platform  for  the  EU  is  unlikely  (e.g.  due  to 
restrictions in the field of data protection), the future programme should mainly support EU 
Member  States  in  exchanging  best  practices  on  risk  management.  The  best  practices  may 
provide  accelerators for other  countries  that  want  to  modernise  or upgrade  their  national 
data  analytics  tools.  The  exchange  of  best  practices  can  for  instance  take  place  via  work 
visits or project groups.  

Capacity in terms of human resources 

In order to acquire sufficient people with the knowledge and skills necessary to work with 
data  and  information,  customs  administrations  across  the  EU  typically  rely  on  in-house 
training. As such, it is generally more important to hire profiles with relevant data science 

377 

 
 
knowledge  and  skills  than  profiles  with  customs-specific  knowledge  and  skills.  Customs 
administrations  have  typically  acquired  extensive  expertise  in  training  various  types  of 
profiles in customs-specific aspects, since there is often no education dedicated to preparing 
students  for  the  profession  of  customs  officer.  In  Denmark,  the  board  of  the  newly 
established  Implementation  Centre  for  Customs  (ICT)  is  for  instance  composed  of  the 
Deputy Director and five heads of offices. These heads of offices were hired from the private 
sector, where they acquired significant expertise in digitalisation and IT. However, they did 
not have specific knowledge in the field of customs or other public administrations. 

As  customs  administrations  cannot  always  find  sufficient  people  with  the  required 
knowledge and skills in-house, they sometimes also collaborate with third parties or other 
countries. The French customs administration still considers its competences in the field of 
data  analytics  for  instance  insufficiently  mature.  Therefore,  a  part  of  the  data  analytics 
conducted is outsourced to a contractor that can access a clustered data lake. As Denmark is 
currently  working  on  the  Customs  Decisions  system  and  Sweden  has  already  finished  this 
system, 
the  Swedish  customs 
administration in this respect (e.g. in order to identify best practices or components that can 
be reused). 

the  Danish  customs  administration 

is  consulting 

ESTONIAN OUTSOURCING IN THE FIELD OF IT SYSTEMS AND INFRASTRUCTURE 

The  Estonian  Tax  and  Customs  Board  (ETCB)  is  supported  by  a  system  integrator  from  the  IT 
systems  and  infrastructure  perspective.  This  organisation  provides  the  Customs  Engine  product, 
according to the MASP. This product includes modules concerning import, export, transit, manifest, 
etc. Following registration, everyone can use these modules for free. For efficiency purposes, the 
Customs Engine product also includes machine-to-machine interfaces – enabling for instance solid 
integrations with existing systems such as Enterprise Resource Planning (ERP) systems. 

In this context, the European Commission may also provide a “centre of excellence” under 
the  future  programme.  Such  “centre  of  excellence”  would  be  able  to  perform  customs 
intelligence  work  at  the  EU  level,  centralising  efforts  and  experience  with  respect  to  data 
and  information  in  customs.  In  particular,  this  would  allow  the  European  Commission  to 
provide guidelines or even (human) support regarding data analytics and risk management. 
In this context, relevant other parties (e.g. research institutes) should also be involved. 

In order to strengthen the data-related knowledge and skills of customs officers across the 
EU, the programme could also provide increased support for education and training in the 
field of data and information. As there exist almost no educational programmes preparing 
people  for  the  profession  of  customs  official,  the  programme  could  for  instance  support 
universities  and  other  schools  in  establishing  customs-specific  courses  in  data  science.  In 
this context, lectures of experienced customs official may be funded by the programme. The 
European  Commission  could  even  create  some  kind  of  dedicated  and  centralised  EU 
Customs University or Academy. As customs administrations across the EU consist of many 
experienced customs officers, there is already extensive knowledge available in the various 
EU Member States. Hence, experienced officers could be leveraged to share their particular 
knowledge and skills through trainings at such EU Customs University or Academy. One of 
the topics included in such centrally organised customs curriculum may be data science. 

378 

 
 
Obstacles for cooperation regarding data 

Even though the exchange of customs-related data between countries is fairly limited and 
not organised at the EU level, there are some initiatives in this field taking place. In concrete 
terms, different countries are exchanging data on a bilateral basis. Hungary has for instance 
bilateral  agreements  with  a  number  of  EU  Member  States  (Slovenia,  Slovakia,  Romania, 
Poland,  Croatia  and  the  Czech  Republic).  In  this  context,  Council  Regulation  (EC)  515/97 
constitutes a basis for mutual assistance between administrative authorities of the Member 
States  and  cooperation  between  the  latter  and  the  European  Commission  to  ensure  the 
correct  application  of  the  law  on  customs  and  agricultural  matters.  In  some  cases,  the 
exchange of data can even exceed the EU territory. Croatia exchanges for instance data with 
Serbia and Bosnia & Herzegovina on an ad-hoc basis. 

Nevertheless, bilateral agreements will probably not be sufficient in a future characterised 
by  an  increasing  importance  of  data.  The  programme  should  in  this  context  support  the 
creation  of  well-established  data  exchanges  between  countries,  as  well  as  between  their 
various public administrations. In this respect, the electronic systems within the electronic 
customs  project  and,  in  particular,  the  UCC  represent  essential  enablers  for  more 
harmonised  data  exchanges  between  customs  administrations  and  traders  in  the  EU. 
Moreover,  the  European  Commission  could  try  to  establish  additional  common  databases 
and  services  that  offer  as  much  customs-related  data  as  possible.  These  databases  and 
services  would  provide  some  kind  of  centralised  data  source,  consultable  by  the  customs 
administrations of all participating countries. 

As the establishment of one centralised data source for the Customs Union is unlikely (e.g. 
due to  restrictions  in the  field  of data  protection), the programme  should  also  strengthen 
and support the mutual data exchange between countries and their public administrations. 
In this context, there is for instance a need for strong leadership in the creation of EU-wide 
standard data formats for customs (cf. above). 

At  the  national  level,  customs  administrations  also  use  sometimes  data  owned  by  some 
other public administrations. In Croatia and France, the customs administration exchanges 
regularly  data  with  for 
instance  the  tax  administration.  In  Hungary,  the  customs 
administration  can  also  exchange  data  with  the  police.  In  fact,  the  Hungarian  customs 
administrations and police even share a common system containing data. In Estonia, border 
guards and customs also exchange data actively. They even share a joint risk management 
tool. 

In  order  to 
instigate  more  structured  data  exchanges  between  different  public 
administrations  at  the  national  level, the programme  could  primarily ‘lead by example’.  In 
concrete  terms,  the  programme  should  identify  and  operationalise  as  many  synergies  as 
possible with other policy areas and their respective programmes. In the particular context 
of  police  and  border  guards,  the  INTERPOL  and  the  FRONTEX  are  particularly  relevant.  In 
concrete terms,  the  programme  may for  instance  support  the  construction of  shared  data 
warehouses. The increased cooperation and interaction between customs and other policy 
areas at the EU level should prompt structured data exchanges between these areas. 

379 

 
 
There  are  often  also  ad-hoc  data  exchanges  between  colleagues  in  different  countries.  In 
this context, however, it is important to know what data can be obtained in what country 
and  from  whom.  Therefore,  the  programme  could  for  instance  support  the  mapping  of 
where particular expertise and data can be found in the EU. 

In addition, customs administrations often try to strengthen the cooperation and interaction 
with  third  party  organisations.  In  Croatia,  the  customs  administration  for  instance 
succeeded in acquiring access to some systems of the Port of Rijeka, enabling more effective 
and  efficient  tracking  of  containers.  Furthermore,  the  Croatian  customs  administration  is 
working  with  the  Croatian  Post  on  automated  systems  allowing  customs  to  access  data 
contained in the postal systems. In this particular context, an expert of the Universal Postal 
Union (UPU) support both organisations in introducing such advanced systems. 

COOPERATION WITH THIRD PARTY ORGANISATIONS IN BELGIUM 

In  Belgium,  there  is  an  excellent  framework  to  discuss  technical  and  practical  customs-related 
issues, i.e. the National Forum (NAFORNA). This is a well-organised body between the private and 
the public stakeholders of customs-related aspects. 

At  the  Belgian  seaports,  there  are  also  some  initiatives  ensuring  efficient  cooperation  and 
interaction  between  the  customs  administration  and  some  private  stakeholders.  At  the  Port  of 
Antwerp,  NxtPort  offers  for  instance  a  community  data  platform,  co-created  and  co-financed  by 
the private and public sector. In addition, the Belgian customs administration is currently working 
on  the  connection  of  the  different  port  community  systems,  intensifying  the  collaboration  and 
interaction between customs and the Belgian seaports. 

Furthermore, the Belgian customs administration has direct access to the systems of DHL, offering 
a significant increase in the effectiveness and efficiency of tracking goods. 

In  order  to  strengthen  the  cooperation  and  interaction  of  customs  administrations  with 
third  party  organisations  with  respect  to  data  and  information,  the  programme  could 
improve  the  functioning  of  the  TCG.  Instead  of  having  one  big  group  of  stakeholders,  the 
TCG could for instance encompass a subgroup focusing on data sharing. 

As described above, the entire EU could benefit from active data sharing between countries, 
their  public  administrations  and  third  party  organisations.  Nevertheless,  actual  data 
exchange  and  sharing  is  often  restricted  and  complicated  by  restrictions  concerning  data 
the  programme  should  also  guide  customs 
protection  and  privacy.  Therefore, 
administrations  in  dealing  with  such  restrictions.  In  concrete  terms,  the  programme  could 
for instance intend to identify and operationalise alternative forms for accessing and using 
data  owned  by  other  parties.  For  data  that  is  stored  elsewhere  and  cannot  be  shared  as 
such,  cryptographic  solutions  could  provide  adequate  solutions.  In  particular,  it  could  be 
possible to analyse data owned by other parties using such cryptographic solutions, without 
actually disclosing the data. Only the results of the data analyses would be provided. 

Relationship with other customs case studies 

It  should  be  clear  that  this  case  study  on  data  and  information  is  closely  related  with  the 
topics considered in the other customs case studies. In general, the effective and efficient 
use  of  data  and  data  analytics  should  be  considered  a  key  enabler  for  addressing  the 

380 

 
 
challenges and needs related to these topics. As described above, data enables to facilitate 
trade  better.  Moreover,  the  exchange  of  data  between  various  policy  areas  will  be  a 
cornerstone for the establishment of a Single Window. Furthermore, data enable to address 
some  challenges  related  to  external  border  protection  (e.g.  through  risk  analyses).  In 
addition,  the  active  exchange and  sharing  of data  between  customs  and  traders are often 
considered key to address some challenges and needs with respect to e-Commerce. 

Consequently,  it  may  be  expected  that  initiatives  addressing  challenges  and  needs 
concerning  data  and  information  will  also  support  the  customs  administrations  across  the 
EU to overcome their challenges and needs regarding the above-mentioned topics. 

Conclusions 

This  case  study  concerns  challenges  and  needs  of  customs  administrations  across  the  EU 
with  respect  to  data  and  information.  In  addition,  it  provides  potential  ways  for  the 
programme to support customs administrations in addressing these challenges and needs. 

In terms of operational processes and structures, the programme should increase its focus 
on  customs  processes  and  their  alignment.  Since  the  uniformity  of  data  across  the  EU  is 
regularly  limited,  the programme  should  also  support  customs  administrations  in  ensuring 
appropriate levels of data quality. In this respect, the programme should continue defining 
and enforcing standard data formats. However, synergies with existing data formats should 
be  duly  sought  and  materialised.  Where  relevant,  experimentation  with  innovations  that 
may benefit overall data quality should be promoted. 

In  terms  of  IT  systems  and  infrastructure,  the  programme  should  keep  supporting  the 
uniform  implementation  of  the  various  electronic  customs  systems  included  in  the 
in  particular,  the  UCC.  Next  to  assisting  customs 
electronic  customs  project  and, 
administrations  in  implementing  these  systems, the  programme  should  leverage emerging 
technologies.  As  the  maturity  of  the  national  systems  is  often  diverse,  the  programme 
should  also  promote  the  exchange  of  best  practices  –  especially  on  risk  analyses. 
Furthermore,  the  programme  should  enforce  the  only-once  principle  by  avoiding 
overlapping systems or by increasing system interoperability. 

In terms of human resources, customs administrations generally lack an adequate amount 
of  people  with  the  right  knowledge  and  skills  to  deal  with  data  and  information.  In  this 
particular  context,  the  programme  may  support  a  “centre  of  excellence”  performing 
customs  intelligence  work  at  the  EU  level.  Moreover,  the  programme  could  support 
universities  and  other  schools  in  establishing  and  delivering  customs-specific  courses  on 
data  science.  Such  courses  may  be  included  in  a  dedicated  EU  Customs  University  or 
Academy funded under the programme. 

In  terms  of  cooperation,  the  programme  should  continue  supporting  data  exchanges 
between  countries  and  their  public  administrations.  Where  relevant,  common  databases 
and services containing as much customs-related data as possible might be established. In 
this  respect,  the  programme  could  support  the  mapping  of  where  particular  data  can  be 

381 

 
 
found.  Furthermore,  it  is  essential  that  the  programme  identifies  and  operationalises  as 
many  synergies  as  possible  with  other  policy  areas  and  their  respective  programmes.  In 
order  to  increase  the  cooperation  and  interaction  between  customs  and  third  party 
organisations at the EU level, the functioning of the TCG should also be improved. Finally, 
the  programme  may  offer  guidance  to  customs  administrations  in  dealing  with  aspects 
restricting  the  data  exchange  and  sharing  between  customs  administrations,  other  public 
administrations, as well as third party organisations. 

382 

 
 
Annex B.2 -Trade facilitation, single window 
and centralised clearance 

Introduction 

This case study provides insight in the growing importance of trade facilitation for customs 
administrations  and  the  need  for  intensified  collaboration  between  stakeholders  (public 
and  private).  On  the  basis  of  the  analysis  of  the  data  gathered  in  the  Member  States  and 
from desk  research,  this  case  study intends to  identify whether  and how  trade  facilitation 
could be positioned within a future Customs programme. The case study will embrace any 
forward-looking and/or innovative views and ideas in order to ensure the relevance of the 
programme in a post-2020 period. 

This  case  study  was  carried  out  through  fieldwork  in  Belgium,  Croatia,  France,  Malta  and 
Poland.  Gathering  data  on  the  trade  facilitation  initiatives,  we  have  focused  on  the 
implementation in the EU Member States of the following concepts: 

  centralised clearance (Article 179-181 UCC); 
  self-assessment (Article 185 UCC); 
  single 

window.

383 

 
 
Background 
In  a  global  trading  environment,  where  businesses  rely  on  smooth  crossing  of  borders  to 
ensure competitiveness, the privileged role of customs as a facilitator of trade is generally 
recognised.  Through  trade  facilitation  – 
i.e.  the  simplification,  modernization  and 
harmonization  of  import  and  export  processes  –  customs  can  support  business  success, 
whilst ensuring that risks are managed. Processes and procedures of international trade are 
made  as  simple  and  efficient  as  possible  for  traders,  concerned  public  authorities  and 
governments.  

The  WTO  Trade  Facilitation  Agreement  (TFA),  concluded  at  the  2013  Bali  Ministerial 
Conference and entering into force on 22 February 2017, aims to reduce burdens for moving 
goods across borders. Estimates show that the full implementation of the TFA would reduce 
global trade costs, which are among the fundamental factors shaping the evolution of trade, 
by  an  average  of  14.3%.  Over  the  2015-2030  horizon,  the  TFA  implementation  would  add 
more than half a per cent per year to world GDP growth. The EU promotes trade facilitation 
and  commits  to  play  a  leading  role,  actively  cooperating  with  the  WTO  and  the  WCO  and 
striving for simple, modern and harmonized customs procedures.  

The  UCC  legal  package  serves  as  an  EU  framework  to  further  play  a  forerunner  role  on 
facilitating  trade  and  supporting  a  customer  oriented  approach  and  service  delivery  by 
customs. But also prior to the implementation of the UCC, numerous initiatives to facilitate 
trade  were  introduced.  In  this  case  study,  the  Member  State  implementation  and 
development  of  both  old  (Single  Window)  and  new  trade  facilitation  measures 
(simplification measures such as centralised clearance and self-assessment) are analysed. 

Considering the  inclusion of  trade facilitation  in the  WTO Doha negotiation  round  and the 
commitments  expressed  by the  EU  to  continue  enhancing  trade  facilitation  measures,  the 
continuous  efforts  to  facilitate  trade  will  be  high  on  the  agenda  of  customs  for  years  to 
come, particularly considering: 

  the trend of changes in the EU, calling for continuous efforts to implement the UCC; 
  the  core  influencing  trend  of  globalisation,  causing  increasing  flows  in  goods  and 

services; and 

  the 

influencing 

trend  of  modernisation  and 

transparency  of 

the  public 

administration, resulting in efforts of customs to facilitate trade. 

Customs face the difficult task of balancing risk management and trade facilitation. In order 
to ensure competitiveness, economic operators call upon the authorities to close loopholes 
allowing for tax avoidance and ask for increased efforts to combat tax evasion and fraud, at 
the same time expecting increased investments to facilitate trade. 

Key issues for customs administrations 

Across the Member States visited, there is a confirmation of the  ongoing  trend  of  moving 
towards  facilitation  of  trade.  For  competitive  reasons  and  in  the  interest  of  business, 

384 

 
 
Member States are trying to make most out of the opportunities brought by the UCC, both 
in terms of simplifications and paperless customs.  

This  is  e.g.  confirmed  by  the  shift  toward  a  system-based  approach  (SBA)  for 
monitoring purposes, eventually resulting in a considerable drop in shipments checked 
without affecting the risk management function of customs. An effective and efficient 
SBA requires IT support and new, specialised profiles at government level, something 
which is currently lacking, as expressed by several economic operators. 

Cross-border  centralised  clearance  provides  for  the  facility  for  businesses  to  lodge  a 
customs  declaration  in  the  country  of  establishment,  even  when  goods  are  presented  at 
another  customs  office.  Only  holders  of  an  AEO-C  certificate  could  apply  for  an 
authorization  to  benefit  from  the  simplified  procedure  if  more  than  one  Member  State  is 
involved.  When  making  use  of  the  procedure,  the  customs  office  of  declaration  will  be 
different from the customs office of presenting the goods, with the offices not located in the 
same  Member  State.  The  supervising  customs  office  and  the  presentation  customs  office 
will  have  shared  and  different  roles  and  responsibilities.  Ultimately,  the  goods  will  be 
released by the customs office of declaration taking into account the controls carried out by 
the two customs offices. 

E.g. the offices share the responsibility to exchange the information necessary for the 
verification of the customs declaration and for the release of the goods. 

E.g.  the  supervision  customs  office  has  the  responsibility  to  carry  out  the  customs 
controls  for  the  verification  of  the  customs  declaration,  whereas  the  presentation 
customs  office  will  carry  out  the  customs  controls  requested  by  the  office  of 
declaration. 

Until the dates of deployment of the UCC Centralised Clearance for Import (CCI) system and 
the Automated Export System (AES), the UCC Transitional Delegated Act stipulates that the 
customs  administrations  involved  in  a  Centralised  Clearance  authorisation  shall  cooperate 
to  set  out  arrangements  to  be  compliant  with  the  UCC  requirements.  Moreover,  until  the 
introduction  of  the  CCI  system  and  AES,  the  customs  administration  competent  to  take  a 
decision  may  reject  applications  where  the  authorisation  would  create  a  disproportionate 
administrative burden. In case of an authorisation granted for release of the goods for free 
circulation, an arrangement is needed between the Member State involved in order to share 
the national collection costs. 

Even  though  the  UCC  legal  package  provides  for  the  legal  framework  for  centralised 
clearance  and  despite  the  interest  of  business  as  confirmed  by  both  customs  and  the 
economic  operators,  Member  States  are  reluctant  to 
issue  authorisations  for  this 
simplification measure. Only in April 2017, the first authorisation was provided to a customs 
agent active in Belgium.  

This  authorisation  issued  in  the  wake  of  a  pilot  project  applies  in  a  bilateral  context 
between  Belgium  and  the  Netherlands  and  applies  to  the  goods  flow  of  one  single 
customer  (located  in  Rotterdam)  of  the  customs  agent  (established  in  Belgium)  only. 

385 

 
 
Upon  declaration  by  the  customs  agent,  the  Belgian  customs  administration  send  a 
message to the Dutch administration either for selection for control or for release into 
free circulation. The customs administrations involved will exchange electronic data on 
the verification and / or possible controls carried out. 

Poland has a system of centralised clearance on national level in place, which is frequently 
used.  The  cross-border  self-assessment  authorisation  faces  considerable  difficulties,  and 
when such authorisation is requested a case-by-case solution is sought for. France reports 
to be the sole Member State having introduced a system of centralised clearance, despite 
the different signals received in the interviews with other Member States’  administrations 
(e.g. Belgium and Poland, as described above), showing a current lack of knowledge on the 
other  Member  States’  progress.  Despite  the  introduction  of  centralised  clearance,  France 
invokes  a  transitional  phase  until  2019  to  make  the  authorities  acquainted  with  the  new 
legislation, but also to ensure that the required technology is implemented.   

Challenges  with  regard to  the  implementation  of  cross-border  centralised  clearance relate 
to: 

  The  exchange  of  data  between  the  customs  administrations  involved,  which  make 
use of different national IT systems (which may cause difficulties on interoperability 
of  those  systems,  resulting  in  most  communication  currently  done  on  an  ad  hoc 
basis) and possibly different languages; 

  On  the  basis  of  the  current  legislation  the  VAT  is  still  due  at  the  place  of  supply. 
Hence,  VAT  is  to  be  collected  in  the  country  where  the  goods  are  presented,  not 
where the goods are declared; 

  The need for the deployment of EU IT systems (CCI in particular, the first version was 
launched  in  August  2017)  in  order  to  allow  for  the  application  of  centralised 
clearance on a large scale. 

  The  dissociation  of  controls  between  the  customs  office  of  declaration  and  the 
customs office where the goods are presented requires the means to pass on correct 
information to the customs office where the goods are located in real time between 
countries. Today,  the  network  between Member  States  is  not  strong  enough  to do 
that.  

Upon application, customs may delegate some of its tasks to the economic operator, which 
is known as self-assessment. The economic operator carries out certain customs formalities 
which  are  to  be  carried  out  by  the  customs  administrations,  determines  the  amount  of 
import  and  export  duty  payable,  or  performs  certain  controls  under  customs  supervision. 
Only  holders  of  an  AEO-C  certificate  could  apply  for  an  authorization  to  benefit  from  the 
simplified procedure. Self-Assessment encompasses two types of delegation, one regarding 
customs  formalities  (the  economic  operator  determines  the  duty  payable)  and  one 
regarding  customs  controls  (the  economic  operator  performs  certain  controls  under 
customs supervision on prohibitions and restrictions). 

Even though the UCC provides for the possibility to issue authorisations for self-assessment 
and  despite  the  considerable  interest  from  businesses,  Member  States report  not  to  have 

386 

 
 
any experience  in this  regard. The  Member  States  report following  reasons for  the  lack  of 
current practical implementation: 

  Guidance and clarity by the EU for Member States or cooperation between Member 
States  to  understand  the  practical  implementation  of  the  simplification  of  self-
assessment is lacking; 

  Legal blocking factors at national level, e.g. the involvement of other governmental 
agencies  exclusively  in  charge  of  conducting  controls  or  imposing  restrictions  (such 
as veterinary inspection services); 

  Practical  blocking  factors  at  national  level,  e.g.  the  need  for  direct  access  by  the 
authorities  to  the  records  of  the  beneficiary  of  the  authorisation,  data  sensitivity 
issues, and the need for a technical interface; 

  The need for investments in systems and human capacity. 

It is explicitly recognised by the Polish administrations that next to having the possibility to 
apply  for  simplifications,  businesses  should  also  be  trained  in  the  application  and  the 
possibilities of those simplifications. 

The  French  authorities  esteem  that  the  EU  is  overlooking  the  financial  implication  for 
customs due to the self-assessment. On average a customs declaration in France costs EUR 
40  and  with  about  15  million  declarations  per  year  a  huge  amount  of  money  for  customs 
may disappear.  

The WTO Trade Facilitation imposes on its contracting parties to endeavour to establish or 
maintain  a  Single  Window,  enabling  traders  to  submit  documentation  and  /  or  data 
requirements for importation, exportation, or transit of goods through a single entry point 
to the participating authorities or agencies.  

The  development  of  the  Single  Window  concept  is  very  different  across  the  EU  Member 
States and has evolved over time. The level of integration varies, eventually extending to a 
full  Single  Window  covering  all  governmental  agencies  involved  in  border  clearance.  At 
national level, the biggest reported challenge is to build interfaces between those agencies. 
At  EU  level,  integrating  the  national  systems  whilst  allowing  the  national  authorities  to 
develop the interfaces poses the most challenges. Moreover, in order to also benefit from 
the  risk  management  possibilities  featured  by  the  Single  Window,  an  adequate  risk 
detection system should be in place. 

During the fieldwork, the Member States report a need for: 

Involving all relevant DGs to ensure full integration of all relevant checks; 

 
  Financing  to  develop  overarching  EU  systems  to  ensure  interaction  between  the 

national Single Windows; 

  Gathering of experience from third countries, which have proven to be successful in 

developing a Single Window (e.g. Georgia); 

  Continuity in the development of the Single Window projects currently ongoing. 

387 

 
 
The  interaction  between  national  Single  Windows  is  currently  lacking,  often  resulting  in  a 
considerable  burden  for  both  the  authorities  and  the  economic  operators.  This  is  in 
particular  the  case  when  documents  provided  through  the  Single  Window  cannot  be 
consulted through the system or when they require processing in paper. 

Some  Member  States  (e.g.  Croatia  and  Malta)  are  nowhere  near  having  even  a  national 
Single Window.  

Demands to the new Customs programme 

it  follows  that  the  conclusions  on  the  development  and 
From  this  case  study 
implementation of a Single Window are to be distinguished from the conclusions related to 
the new concepts of centralised clearance and self-assessment.  

The  UCC  legal  package  provides  for  a  number  of  progressive  trade  facilitation  measures, 
which  are  backed  by  a  considerable  interest  from  business.  The  implementation  of  these 
new  concepts  suffers  from  a  number  of  legal  and  practical  burdens,  such  as  the  current 
regulatory  constraints  (e.g.  VAT  collection  for  centralised  clearance),  the  adaption  to  new 
working methods and the need for new profiles (human capacity building), and adequate IT 
support.  

Trade  facilitation  measures  require  substantial  efforts  from  both  the  economic  operators 
and national customs to adapt their processes and procedures to new methods of working. 
Intervention  from  the  European  Commission  is  asked  for,  as  Member  States  indicate  that 
the current legal texts do not allow for the required practical understanding of the concepts 
(particularly  when 
it  comes  to  self-assessment).  The  European  Commission  cannot 
completely put the execution on the shoulders of the Member States alone. It needs to take 
up  responsibility  and  work  out  further  concrete  steps  for  the  deployment  of  these 
measures.  

Member  States  are  also  actively  looking  for  examples  /  best  practices  in  other  Member 
States. This is particularly the case when UCC measures were pushed for by the one or the 
other  Member  State.  However,  the  knowledge  of  the  existing  solutions  in  other  Member 
States  is  often  lacking,  in  the  end  not  allowing  to  benefit  from  successful  Member  States’ 
prior  experiences.  The  continued  investment  in  IT  systems  allowing  the  use  of  the  trade 
facilitation  measures  is  required.  More  transparency  in  the  development  process  is  asked 
for by both the Member States and economic operators. 

The development of new concepts through pilot projects – allowing for experimentation – is 
generally considered a good approach by the Member States and the economic operators. 
However, such pilot projects could also result in competitive (dis)advantages for economic 
operators  (not)  involved  in  the  project,  something  which  could  be  a  strategic  obstacle  for 
cooperation.  If  the  measure  is  in  their  interest  as  well  –  such  as  trade  facilitation  – 
businesses showed willingness to (co-)invest in such projects. 

The Single Window concept is well-known by the authorities for quite some time (with the 
first steps toward a Single Window in Sweden and Singapore dating back approximately 30 

388 

 
 
years now). Member States adhere to different models. Considering the engagements in the 
context of the WTO TFA and the current state of play regarding the national development of 
the Single Windows, the Single Window remains high on the agenda. At the EU level, people 
are currently working on the scoping of a European Single Window in a project group. While 
this  will  require  significant  efforts  and  alignment,  the  work  is  definitely  useful  to  prepare 
Member States for this concept.  

As one Single Window for the entire EU is unlikely it must be possible for all Member States 
to create a national Single Window and to create an overarching system to connect them.  
The next Customs programme could play an important role when it comes to the interaction 
between the different national Single Windows. But to come to national Single Windows in 
all Member States more pressure needs to be exercised on the Member States, for example 
through the imposition of a Regulation (as has been done for the maritime Single Window. 
Member  States  call for the  involvement  of  third countries to  allow  for  the  sharing  of best 
practices and for more IT budget.  

Conclusions 

The  case  study  shows  that  the  Customs  financing  programme  could  be  supportive  of  the 
smooth  and  efficient  move  towards  more  trade  facilitation  without  giving  in  to  risk 
management  obligations,  a  trend  which  is  recognized  by  Member  States  and  economic 
operators. The UCC legal package provides ample tools to make life easier for business, such 
as  self-assessment  and  centralised  clearance.  At the  same time,  commitments  were  made 
on  the  implementation  of  a  single  window  with  the  entry  into  force  of  the  WTO  Trade 
Facilitation Agreement. 

Both Member States and economic operators require practical support in the application of 
the new trade facilitation concepts brought by the EU. In the first place such support should 
come  from  the  European  Commission,  guiding  Member  States  and  the  market  in  the 
implementation of the UCC. Also the sharing of best practices is very much welcomed by the 
administrations, both within the EU and with forerunning third countries. In the benefit of 
business, an even interpretation and implementation of legislation by customs is important, 
something  which  is  even  more  the  case  when  it  comes  to  trade  facilitation  concepts  that 
encounter an intra-EU application, such as centralized clearance. 

Considering the new UCC trade facilitating concepts, Member States have to deal with new 
working  methods,  processes  and  procedures.  Such  change  requires  new,  highly  skilled 
profiles  which  can  adequately  deal  with  those  evolutions.  Such  change  requires  also 
adequate  IT  tools,  in  order  to  communicate  with  (i)  other  agencies  at  national  level  (e.g. 
information  through  the  single  window)  and  (ii)  the 
food  safety  agency  sharing 
administrations of other Member States (e.g. in the context of centralised clearance and of 
single window). 

389 

 
 
 
 
Annex B.3 - e-Commerce and digital trade 

Introduction 

The focus of this case study is how the evolving nature of trade, in specific e-Commerce and 
digital  trade,  impact  upon  the  performance  of  customs  administrations  and  the  Customs 
Union  as  a  whole. More  specifically,  the  case  study  provides  in-depth  perspectives  on  the 
growth  of  e-Commerce  and  the  consequences  thereof  for  the  capacity  of  customs 
administrations (human resources, IT technology, equipment and processes), as well as the 
need  for  intensified  collaboration  with  stakeholders.  Reference  is  also  made  to  the 
legislative  frameworks  currently 
in  place  that  complicate  the  handling  of  customs 
administrations at the border.  

Apart from desk research undertaken, the insights presented in this case study draws on the 
findings from fieldwork  undertaken  in  six  different  countries:  Hungary,  Estonia,  Denmark, 
France,  Italy  and  Poland.  The  illustrated  matters  presented  will  serve  as  basis  to  identify 
whether  and  how  a future  Customs programme could  respond to  the  growing  trend  of  e-
Commerce and digital trade. 

Gathering  data  on  e-Commerce  and  digital  trade,  we  have  focused  on  the  following  key 
aspects: 

  Facilitation of e-Commerce;  
  Control and enforcement in the context of e-Commerce;  
 

Innovative public private collaboration. 

Background  

In  order  to  understand  the  sudden  growth,  and  wide  impact  of  e-Commerce  on  customs 
administrations  in  the  EU,  data  on  this  trend  are  telling.  In  2016,  total  European  e-
Commerce  turnover  was  estimated  at  EUR  530  billion,  an  increase  of  15%  since  2015. 
According  to  the  annual  e-Commerce  Europe  report  (2017)351,  this  amount  is  expected  to 
rise to over EUR 600 billion in 2017. To understand the impact of e-Commerce on customs 
administrations,  and  the  differences  across  the  EU,  it  is  useful  to  look  at  the  changing 
consumer  behaviour. There  is  wide  variation  of use of  e-Commerce  in  EU  Member  States, 
which is a proof that the EU digital Single Market is far from being completed.  

351 European e-Commerce report 2017, www.ecommerce-europe.eu  

390 

 
 
                                                      
  Nowadays,  around  6%  of  shoppers  in  the  EU  shop  online  every  day,  whereas 
approximately  18%  of  enterprises  in  the  EU  sell  online  according  to  Eurostat  data 
(2016).352  

  Overall,  the  share  of  e-shoppers  in  internet  users  is  growing,  with  the  highest 
proportions  being  found  in  the  16-24  and  25-54  age  groups  (68  %  and  69  % 
respectively).  

  In this regard, 84 % of individuals aged 16 to 74 in the EU had used the internet in the 
12 months prior to the survey, of whom 66 % had bought or ordered goods or services 
for private use. In addition, 32 % of e-buyers purchased from other EU Member States, 
compared with 25 % in 2012.353 

  In 2016, EU consumers still purchased more from non-EU e-Commerce providers (47% 
of consumers) than they do from EU e-Commerce providers (17% of consumers).  

As  trade  patterns  are  evolving,  customs  administrations  are  trying  to  make  sense  of  the 
nature  and  consequences  of  the  global  trend  towards  increased  e-Commerce  and  digital 
trade.  Nowadays,  the  internet  facilitates  transactions  in  (digital)  goods  and  services, 
movement  of  people  as  well  as  transfer  data,  all  together  captured  under  the  wider 
definition of digital trade.  

e-Commerce,  part  of  the  wider  digital  trade  trend,  has  over  the  past  years  especially 
impacted customs administrations, challenging the facilitation as well as control tasks, and 
leaving consequences as well in terms of revenues. 

The reasons for the relatively high impact of e-Commerce on customs performance is four-
fold,  as  agreed  by  WCO  members  in  the  context  of  the  e-Commerce  work  group 
discussions354:  

  the high volumes of packages;  
  time-sensitive clearance of goods;  
  a changing client base and lack of qualitative data; and  
  fragmented or inadequate legislative frameworks (incl. on low value parcels, refunds 

and returns.   

The  implication  of  the  changing  client  base  through  e-Commerce  is  in  the  area  of  data 
quality  and  trustworthiness  of  data  and  customers.  As  occasional  traders  join  the  e-
Commerce  international  trading  scene,  the  filling  of  forms  for  tax  and  duty  purposes  is 
increasingly subject to errors. With regard to trustworthiness: can these parties be trusted 
to declare the right customs value of an item, and/or to check the legitimacy of the client? 
Against  the  trend  towards  “secured  trader  programs”,  customs  administrations  are 

352 See: www.ecommerce-europe.eu.  

353 Ibid.  

354  WCO  Working  Group  on  e-Commerce,  minutes  of  sub-group  meetings  held,  January  2017.  See: 
http://www.wcoomd.org/-/media/wco/public/global/pdf/topics/facilitation/activities-and-
programmes/ecommerce/summary-report-of-the-subgroups-meetings-of-the-wg-on-ecommerce.pdf?la=en  

391 

 
 
                                                      
increasingly dealing with unknown traders, and partnering with 3PL companies to minimize 
risks.  

An  important  characteristic  of  selling  goods  over  the  internet,  is  that  other  buyers  and 
sellers  are  active  than  those  traditionally  encountered  in  the  3  types  of  commerce:  B2B 
(business to business), B2C (business to consumer), B2G (business to government).  

Whereas  the  B2C  sales  of  goods  and  services  over  internet  is  dominant,  an  increasing 
number of individuals sell products through C2C (consumer to consumer) online platforms. 
Platforms such as Amazon or eBay currently allow small-volume traders to generate global 
trade transactions and this of course has a direct impact on customs administrations which 
find  themselves  facing  more  and  more  low-value  shipments  from  all  over  the  world,  and 
non-traditional  clients  (private  customers,  logistics  providers)  taking  over  the  role  from 
traditional businesses lodging declarations. 

Additionally,  and  considering  that  no  customs  duties  can  be  levied  on  the  provision  of 
online  services,  while  they  might  be  ‘originating’  from  third  countries,  a  new  form  of 
taxation in this regard could be a future form of revenue.  

Country-specific data are however showing the differences in e-Commerce penetration and 
growth rates across the EU. The highest rates of e-Commerce penetration are visible in the 
UK,  where  87%  of  shoppers  has  bought  goods  or  services  online  in  the  past  12  months, 
compared  to  54%  of  e-Commerce  shoppers  in  Spain,  41%  in  Italy,  and  only  18%  in 
Romania355. Similarly, Eurostat data from 2015 show that the average of 20% of enterprises 
in the EU conduct e-Commerce sales, which hides the fact that this is around 30% in Ireland 
and Denmark, compared to around 7% in Romania (see figure below).  

In those countries where e-Commerce trends are lagging behind, such as in Italy, mention 
has  been  made  of  the  digital  divide  and  the  incomplete  functioning  of  the  Digital  Single 
Market356. 

Figure 47: Online sales as % of enterprises 

355 Eurostat, 2017, http://ec.europa.eu/eurostat/statistics-explained/index.php/E-commerce_statistics 

356 Interviews with Italian Customs administrations 

392 

 
 
 
                                                      
Source: Eurostat 

From  a  customs  perspective,  the  incoming  e-Commerce  trade  flows  in  different  countries 
reflect the differences in e-Commerce sale volumes and e-Commerce shopper patterns. 

In  Belgium,  in  2015,  a  growth  of  43%  was  visible  in  the  number  of  Entry  Summary 
Declarations (ENS) made. This growth appears mainly a result of the growing e-Commerce 
facilities invested in by TNT Express which has established it’s ‘Euro Hub’ since 1998 in Liege, 
where  all  air  freight  consignments  within  Europe  are  processed  and  through  which 
hundreds of destinations in Europe are connected by road. Around 40 aircrafts converging 
to Liege every night357.  

Third, the challenges posed by e-Commerce have led customs administrations across the EU 
to develop new ways of dealing with the changing client-base which is increasingly also the 
individual consumer, as result of C2C and B2C e-Commerce.  

Figure 48: Customs declaration platform for individual 
persons with e-Residence  in Estonia 

In  Estonia,  private  persons  can  use  the  E-
Tax/e-Customs  platform  of  Estonia  Tax 
and Customs Board to declare themselves 
the  parcel,  based  on  the  notice  received 
from  a  courier  company  or  Estonian  Post 
and  a  certificate  that  proves  the  value  of 
the  goods  (invoice,  payment order,  order, 
etc.)358 

357

 See: 

http://www.tnt.com/corporate/en/data/press/2014/03/tnt-express-to-invest-in-operations-and-

safety-at-liege-euro-hub.html 

358 See:  https://www.emta.ee/eng/private-client/travelling-postal-consignments/postal-consignments/parcel-
declaration-options  

393 

 
 
 
 
 
                                                      
Apart  from  e-Commerce,  the  trend  towards  de-materialised  or  digital  trade,  poses 
additional challenges for customs administrations. Nowadays, the declared value of a good 
may or may not include the intangible value of software (such as in a car). Hence, customs 
are  increasingly  challenged  to  reflect  on  the  linkages  and  interconnected  nature  between 
goods  and  services.  A  concrete  example  of  digital  trade  challenges  for  customs 
administrations 
include  amongst  others  the  classification  and  valuation  of  goods 
encompassing services and data (such as software and 3D printers). 

3D printing raises challenges on determining origin, especially with regard to the substantial 
transformation  criteria.  How  to  determine  where  the  first  substantial  transformation  took 
place? 

During  fieldwork,  customs  administrations  have  not  made  note  of  many  specific  cases  on 
digital trade.  

In a recent report by ING359, it is mentioned that “3D for now has very little effect on cross-
border trade”. This will change once high speed 3D printing makes mass production with 3D 
printers economically viable. The first technical steps have already been taken. 3D printing 
will lead to less trade growth because 3D printers use far less labour, reducing the need to 
import intermediate and final goods from low wage countries. Some experts expect a share 
of  50%  in  manufacturing  over  the  next  two  decades.  Tentative  calculations  show  that,  if 
the current growth of investment in 3D printers continues, 50% of manufactured goods will 
be printed in 2060 in scenario I, with this figure possibly being achieved as early as 2040 in 
scenario  II  in  which  investment  doubles  every  five  years.  According  to  the  report, 
automotive,  industrial  machinery  and  consumer  products  are  the  industries  that,  as  a 
result of 3D printing, will take the lead in suppressing cross border trade. 

Key issues for customs administrations  

Security and risk analysis  

The  over-all  strong  growth  rates  of  e-Commerce,  means  that  all  customs  administrations 
across  the  EU  experience  a  growth  in  volumes  of  low-value  packages  coming  in,  and  are 
seeking  the  right  way  to  respond  to  the  related  challenges  to  ensure  fast  clearance 
(facilitation), at the same time conducting risk management and controls. This is highlighted 
in the following section. While security is a traditional and primary task for customs, the e-
Commerce trend has placed customs administrations in a difficult position to carry out their 
tasks and prevent dangerous goods from entering the Union or leaving the Customs Union. 

In general, customs administrations feel that in the context of e-Commerce they are lacking 
the  people  to  perform  on  a  constant  basis  heightened  and  more  thorough  controls. 
Detection  of  certain  dangerous  goods  (nuclear  materials  for  example)  also  requires 

359

 ING, 

printing: 
https://think.ing.com/uploads/reports/3D_printing_DEF_270917.pdf 

threat 

3D 

a 

to 

global 

trade, 

2017, 

394 

 
 
                                                      
specialized equipment to scan low-value goods in high volumes; these equipment tools are 
not currently have in hands and which is expensive.  

Whereas  the  sheer  volume  of  e-Commerce  incoming  trade  flows  is  perceived  as  an 
overwhelming new reality in many countries of the EU, the combined pressure to perform 
risk analysis and controls in an even more speedy manner exercises additional pressure on 
customs administrations.  

  In  most  countries  visited  during  fieldwork,  representatives  of  the  customs 
administrations  expressed  their  concern  with  regard  to  the  low  percentage  of  e-
Commerce packages being controlled, letting through potentially undervalued, unsafe 
products and/or illegally trade goods.  

To  a  certain  extent,  the  fieldwork  findings  point  towards  a  generally  supportive  stance  of 
customs  administrations  towards  ensuring  timely  clearance  (trade  facilitation).  The 
meetings with economic operators active in the e-Commerce business support this finding; 
they are generally experiencing a high level of satisfaction in the cooperation with customs 
administrations across the EU in the dealing with e-Commerce in-coming (or in transit) trade 
flows.  As  mentioned  by  one  of  the  logistics  providers:  “We  are  generally  very  satisfied  in 
terms  of  cooperation  and  exchange  of  information  with  the  customs  administration.  They 
are very easy to contact, and are open and pro-active to discuss new solutions”.360 

A  second  finding  from  the  fieldwork,  however,  is  that  this  response  is  perceived  as  sub-
optimal (at least in some countries). All customs administrations consulted in the context of 
the  fieldwork  expressed  the  wish  for  improved  risk  management  processes  and  increased 
levels of controls of the e-Commerce in-coming trade flows. In particular, the unavailability 
of quality data as well as sufficient human and (innovative) equipment related capacity are 
the  reason  for  the  dissatisfaction  at  the  side  of  customs  administrations  with  regard  to 
limited controls exercised. 

Despite  the  increased  reliance  on  pre-arrival  data,  especially  employed  for  e-Commerce 
purposes,  the  lacking  quality  thereof  is  complicating  the  risk  management  process  and 
profiling. Customs administrations in the EU rely on the pre-arrival exchange of information 
to  allow  for  the  efficient  clearance  of  shipments.  A  problematic  matter  is  here  that 
platforms such as Ebay, Amazon or AliBaba have the relevant data, but do currently not take 
a  responsibility  in  the  supply  chain  to  share  or  make  available  these  data  for  customs 
purposes. However, the responsibility of e-Commerce platforms for customs purposes is a 
matter of high interest to customs administrations and likely will be discussed in WCO and 
DG TAXUD policy committees, so as to support the control function through improved risk 
analysis and profiling of (low value) e-Commerce packages. 

360 Source: interview with TNT, Estonia fieldwork. 

395 

 
 
                                                      
In  addition,  different  ways  are  employed  by  customs  administrations  across  the  EU  to 
support  the  timely  clearance  of  goods  sold  over  the  internet  (and  hence  optimize  further 
towards a seamless e-Commerce customs handling). 

  In Belgium, the airport of Brussels has installed a dedicated team  responsible for the 
analysis of pre-arrival data provided for incoming e-Commerce packages. This task is 
facilitated  partly  by  the  (unique)  access  provided  to  the  data  systems  of  logistics 
service providers, including DHL. Specific focus is placed during analysis on counterfeit 
and illicit traded goods.  

Third,  with  regard  to  the  enforcement  functions,  customs  administrations  in  the  EU  are 
assessing  risks  on  incoming  e-Commerce  goods  especially  for  counterfeit  and  illicit  trade 
goods. However, even when suspected counterfeits are confiscated by customs, the brand 
representatives  are  often  not  in  the  position  to  come  to  decide  if  the  goods  can  pass,  as 
indicated by several representatives of customs administrations in the EU.  

  In  Belgium,  the  partnership  between  Belgian  customs  administration  and  DHL  was 
especially set-up to establish a shared responsibility for risk-assessment between the 
two parties with a view to counterfeit goods.  

As  the  frequency  of  customs  controls  has  reduced  across  the  EU  (in  some  countries  to  as 
low as 1-2% of transactions), the question is raised whether the risks related to e-Commerce 
should  mean  that  controls  should  be  increased  again?  During  fieldwork,  some  countries 
voiced  the  wish  to  develop  new  types  of  equipment  to  be  able  to  push  up  the  levels  of 
controls  to  over  20%  or  even  50%  of  e-Commerce  packages  without  raising  barriers  for 
trade.  

Capacity of customs administrations: IT and data 

The  growth  of  e-Commerce  trade  flows  from  within  and  outside  EU,  has  emphasized  the 
need  for  customs  administrations  to  have  access  to  relevant  and  reliable  (minimum)  data 
sets  as  early  as  possible,  to  be  transmitted  through  inter-operable  IT  systems.  Currently, 
however, customs administrations are forced to operate on the basis of often unreliable 
information and inadequate quality of data: about the price paid for the good (determining 
customs value), and about the (reliability of the) platform used.   

  As  mentioned  in  meetings  with  one  Member  State  customs  administration:  “Due  to 
the  high  volumes  of  low-value  packages,  we  need  to  prioritize.  One  way  we  try  to 
distinguish high-risk from low-risk is by looking at platforms or web-shops and looking 
at the performance with regard to illicit trade, IPR infringements etc. However, in level 
of  trustworthiness,  it  is  difficult  to  assess.  We  need  to  know  more  about  which 
platform  is  used.  One  suggestion  may  be  that  information  is  to  be  provided  on  the 
origin of the e-Commerce platform and perhaps a certification mechanism. The MOSS 
system may be useful to show identify”. 

During  fieldwork,  customs  administrations  expressed  the  importance  of  improved  data 
quality  of  packages  sent  via  e-Commerce  through  the  operators’  manifests.  The 

396 

 
 
complications are further exacerbated by the fact that the content and format of operators 
manifests  used  by  key  logistics  providers  as  well  as  national  postal  operators  are  not 
standardized and hence differ. Without substantial checking on the validity of information 
provided  (such  as  on  the  price  paid  for  the  goods,  as  a  basis  for  the  customs  value),  the 
likeliness of false or inaccurate information continues to be high.  

In  this  respect,  it  was  mentioned  that  standardization  of  operators’  manifests  would  be 
useful,  including  (possibly)  with  additional  roles  and  responsibilities  for  platforms  and 
logistics service providers to double-check on the information provided.  

Due to the highly complicating factor of unreliable data for the risk management processes, 
customs  administrations  across  the  EU  are  finding  different  responses  to  ‘mitigate  risks’ 
(see:  “obstacles  for  cooperation”).  From  an  interoperability  perspective,  the  fact  that 
majority  of  e-Commerce  packages  arrive  in  a  different  country  of  final  destination,  means 
that customs administrations rely on exchange of data sets as a basis for carrying out their 
risk management processes.  

One way to mitigate risks, is by entering into innovative collaborations with express delivery 
services, which manage the e-Commerce supply chain end-to-end. For example, the French 
customs  administration  has  developed  a  shared  IT  application  (“Delta  X”),  which  is 
dedicated entirely to providing an interface between customs and express delivery services. 
Express  delivery  services  can  enter  the  necessary  data,  for  customs  to  access  these  as  a 
basis for risk analysis.  

  As  mentioned  by the  French  customs:  “Today, we  count  more than  5 million  import 
declarations  and  more  than  9  million  export  declarations  per  month  [through  e-
Commerce]. This means that e-Commerce declarations has outgrown traditional trade 
in terms of declarations”. 

The  UCC  foresees  relevant  changes  in  terms  of  legislative  framework  and  IT  technological 
developments under the UCC Work Programme361, which would certainly support customs 
administrations to deal with e-Commerce from a control perspective.  

  In this context, it is important to mention that through the full implementation of the 
UCC,  the  air  and  maritime  mode  of  transport  will  allow  for  “multiple  filing”  (i.e. 
lodgement  of  ENS  by  means  of  submission  of  different  data  sets  by  the  same  or 
different persons). In addition, full UCC implementation will allow for new risk analysis 
processes to be applicable per mode of transport (UCC IA Article 186), as well as new 
time-limits for air cargo where the ENS must be lodged. 

  Whereas  the  current  ICS  does  not  allow  for  multiple  filing,  this  would  be  possible 
under the future ICS2, hence supporting customs to deal with e-Commerce. Instead of 
an  ENS,  the  ICS2  would  also  provide  the  possibility  to  lodge  a  customs,  transit  or 

361 Annex to the European Commission Implementing Decision (EU) No 255/2014 

397 

 
 
                                                      
temporary storage declaration (instead of an ENS).  In 2015, approximately 41 million 
movements were lodged in the EU.  

  In  addition,  innovative  approaches  towards  an  improved  ICS  and  additional  shared 
services, such as e-Screening and Shared Trade Interface, have been explored as part 
of  the  Customs  2020  Project  Group.362 These  innovative  approaches  would  support 
facilitation and control of e-Commerce trade flows.  

Until  then,  customs  administrations  are  operating  under  a  “transitional  phase”  with  sub-
optimal  IT  infrastructure,  whereas  full  implementation  of  the  UCC  Work  Programme  is 
foreseen  after  2021  (with  the  end  of  the  current  transition  period,  as  stipulated  by  the 
Transitional Delegated Act or TDA).  

The deployment of new IT systems under the UCC Work Programme is guiding the changes 
in respect of formalities at entry and import into the EU. 

With  a  view  to  the  relative  importance  of  air  cargo  in  the  case  of  e-Commerce,  the  full 
implementation  of  the  UCC  would  result  in  new  data  sets  for  all  modes  of  transport. 
Especially  relevant  for  the  large  amounts  of  e-Commerce  entering  the  Customs  Union 
through  the  air  mode,  a  “minimum  pre-loading  set”  for  the  lodging  of  an  ENS  in  the  air 
mode will apply.  

Capacity of customs administrations: equipment 

As a result of the strong influx of high volume but (mostly) low value packages sold through 
the  internet,  customs  administrations  across  the  EU  are  pushed  to  re-invent  their  risk 
management processes and adjust control instruments (to the extent possible).  

Our fieldwork pointed to the fact that most customs administrations have so far chosen to 
rely on the traditional customs technical equipment for the control of e-Commerce: using X-
ray  scanners,  radiation  portal,  sniffer  dogs,  and  random  selection  for  the  examination  (to 
combat  illicit  trade).  The  use  of  X-ray  machines  is  particularly  used  for  incoming  goods 
shipped by express cargo operators and postal authorities. 

A  wide  variation  is  visible  in  terms  of  responses,  characterising  the  level  of  innovative 
equipment approaches:  

  the over-whelmed passive “by-standing” approach (mainly small and least capacitated 
countries; relying 100% on data and controls exercised by logistics service providers); 

  the active facilitator approach (high-volume, trade channel optimization countries); 
  the  active  re-inventor  (medium-volume,  illicit  trade  combatting  countries,  moving 

away from too much reliance on 3PL for controls). 

A noteworthy trend amongst those countries that are concerned by the growth of risks in 
illicit  trade  as  well  as  reduced  government  revenues  as  result  of  e-Commerce,  is  the 
determination to re-invent new types of equipment that could help combat and/or mitigate 

362 Customs 2020 Project Group “IT project for objectives 1 and 2 of the Risk Management Strategy” 

398 

 
 
                                                      
the  risks.  Fieldwork  findings  show  a  determination  for  adaptation  towards  more 
technologically  advanced  systems  that  could  allow  for  more  accurate  risk  management  of 
low-value shipments in the postal, express and cargo streams.  

  In  Italy  and  Belgium,  through  collaboration  with  selected  tech  universities,  the 
customs  administrations  are  developing  innovative  customs  control  and  equipment 
solutions,  including  using  infra-red  scanning  that  would  allow  for  increased  control 
levels on low-value shipments without causing additional delays.  

Capacity of customs administrations: HR and skills 

The  availability  of  sufficient  people  on  the  ground  is  perceived  key  to  undertaking 
appropriate risk management in e-Commerce. In general, customs feel that in the context of 
e-Commerce  they  are  lacking  the  people  to  perform  on  a  constant  basis  heightened  and 
more thorough controls. Customs administrations indicated during the fieldwork that it is a 
challenging  task  to  conduct  risk  management  properly.  Whereas  declarations  for  e-
Commerce  goods  often  do  not  entail  correct  or  complete  information,  the  checking  of 
valuation  of  low-value  e-Commerce  shipments  demand  sufficient  customs  agents  to  be 
dedicated. This is currently a high challenge.   

  As  mentioned  in  one  Member  State  (Denmark):  “Our  customs  administrations  is 
poorly equipped, and understaffed to deal with e-Commerce growth. For example, the 
customs  administrations  are  not  able  to  open  their  office  24/7.  The  business 
community  is  currently  in  dialogue  with  the  customs  administrations  to  change  this, 
because the companies requested to have a customs administration available all the 
time”. 

On  the  other  hand,  it  is  mentioned  that  customs  administrations  are  challenged  by  e-
Commerce  in  the  sense  that  they  need  to  provide  new  interpretations  and  bridge  the 
customs and taxation areas of work.  

  As  mentioned  by  representatives  at  the  French  customs  administration:  “Le  e-
Commerce  pose  un  double  problème  qui  a  un  volet  fiscal  et  un  volet  sureté. 
Fiscalement, l’enjeu majeur concerne la TVA. Pour ce qui concerne le dédouanement, le 
défi c’est plutôt dans la procédure et dans des questions très concrètes. Par exemple, 
que  se  passe-t-il  en  cas  de  remboursement  de  la  TVA  à  cause  de  retour  de 
marchandise ?  Bien évidemment, il y a aussi des questions liées au contrôle du coli et à 
l’informatique et IT. Il s’agit en effet de comprendre la question de flux postal”. 

Uneven  interpretation  and  implementation  of  legislation  (UCC  and  other)  by  customs 
administrations 

With  regard  to  digital  trade,  customs  administrations  are  specifically  challenged  from  a 
legislative  perspective,  where  existing  definitions  and  regulatory  frameworks  appear 
insufficient  or  lacking  clarity  to  guide  customs  in  their  decision-making.  Two  particular 

399 

 
 
 
aspects  are  worth  mentioning:  the  regulatory  framework  relating  to  de  minimis  regimes, 
and the definitions relating to importer of record. 

The de minimis regimes allows for e-Commerce packages under a certain value thresholds 
to enter into the EU without payment of VAT and customs duties. Packages may also enter 
the  EU  based  on  incomplete  declaration  forms  (incomplete  ENS),  meaning  that  the  pre-
arrival information is most often insufficient to conduct proper risk management process.  

In  the  EU,  de  minimis  customs  exemptions  for  both  customs  duty  and  VAT  for  low  value 
parcels below a certain threshold are available, as determined by WCO. The de minimis rule 
for e-Commerce (WCO Kyoto Convention Chapter 4.13) determines if a company is liable to 
pay  duties  and  taxes  or  whether  it  is  exempted  (below  a  certain  threshold).363 Under  the 
WCO  Kyoto  Convention,  all  parties  are  to  specify  a  minimum  value  and/or  a  minimum 
amount of duties and taxes below which no duties and taxes will be collected. For the EU, 
this is harmonized and set at EUR 150 for customs duties. There are globally wide variations, 
and  de  minimis  regimes  are  currently  debated.  In  Argentina  de  minimis  value  of  “no 
duty/tax collection” is USD 25, whereas in the US it is USD 800.  

From  a  customs  perspective,  the  risk  related  to  de  minimis  regimes  is  related  to  customs 
valuation,  i.e.  that  packages  do  not  contain  the  said  value  (but  a  higher  value,  hence  not 
qualifying for de minimis treatment).  

During fieldwork, customs administrations expressed two types of concerns in relation to de 
minimis  regimes.  First,  the  consequences  for  the  revenue  collection.  e-Commerce  has 
contributed to the so-called “customs- and VAT gap” of EU Governments. The exemptions of 
customs  duties  and  VAT  for 
increasingly 
controversial,  and  there  is  a  need  to  balance  between  the  need  for  appropriate  revenue 
protection and avoidance of distortions of competition. Within the indirect tax context, the 
new EU VAT e-Commerce directive addressed some of the frustrations (incl. discrimination 
of foreign suppliers)364. 

indeed  become 

imports  have 

low  value 

Second, a more substantial layer of frustration is added by the fact that the  majority of e-
Commerce  packages  appear  in  effect  unrightfully  declared  under  de  minimis  customs 
value, as the declared value is in reality not reflecting the actually price paid. Some customs 
administrations have entered into new collaborations with express couriers (such as TNT or 
DHL) to reduce the problem of under-valuation. Partly this may be explained by the fact that 
low value packages are sent by occasional traders, which may not be aware of the rules and 

363

See: 
tools/conventions/pf_revised_kyoto_conv.aspx 

http://www.wcoomd.org/en/topics/facilitation/instrument-and-

364364 The e-Commerce package – a directive and two regulations – was adopted by the Economic and Financial 
Affairs  Council  of  5  December  2017  in  Brussels,  after  the  European  Parliament  gave  its  opinion  on 
https://ec.europa.eu/taxation_customs/business/vat/digital-single-market-
30 November 
modernising-vat-cross-border-ecommerce_en  

2017. 

See: 

400 

 
 
                                                      
regulations,  and  hence  the  increased  chance  of  non-compliance.365 On  the  other  hand, 
customs administrations find structural cases of under-valuation.  

During fieldwork, it became clear that customs administrations are employing collaborative 
efforts  to  support  risk  analysis  and  gain  access  to  data  (where  possible),  to  detect  the 
undervaluation of e-Commerce (inter alia).  

  As  mentioned  in  one  country:  “This  phenomenon  needs  addressing  and  strong 
cooperation.  If  de  minimis  regime  prescribes  EUR  22  euros  for  declaration,  people 
declare EUR  21.  We  cooperate  with  express  couriers,  to  analyse data  under  EUR 22, 
and  fine tune  what  we  like  to  see.  We  also  cooperate  with the  National  Post,  which 
collects  all  packages  under  EUR  22 
into  a  special  warehouse.  However,  the 
multiplication  of  low  value  goods  in  volumes, now  necessitates  a new warehouse  to 
manage  these  goods.  Additional  customs officers  need  to  be  assigned  to  scan  goods 
inside  the  warehouse  of  the  national  post  to  try  to  detect  under-valuation,  IPR 
infringements and other illicit trades”. 

  In different EU countries, cooperation with express couriers is being explored and put 
into  place  as  a  way  to  identify  risks  of  under-valuation,  IPR  infringement,  or  illicit 
trade. The main instrument of cooperation is exchange of data and/or access to risk 
management systems, and to agree on a (partial) increased role of express couriers in 
the risk analysis of data received. Hence, European Express Association has developed 
improved procedures to improve detection of counterfeits in small consignments. (See 
‘cooperation between customs administrations and their stakeholders’)  

e-Commerce  also  pushes  for  an  integrated  approach  of  customs  and  taxation  (VAT).  The 
recent  e-Commerce  package  introduces  a  set  of  new  provisions  that  modify  the  legal 
framework.366 Whereas  customs  are  keen  to  support  trade  facilitation,  the  challenge  of 
ensuring security and safety (use of non-intrusive inspection systems), preventing revenue 
losses, and making sure parcels are processed efficiently by making use of the appropriate 
equipment  remains  a  challenge.  Besides  health  and  safety  issues  (e.g.  sale  of  looted  or 
stolen cultural goods, drugs and medicines or other types of illicit trade that can be sent in 
small  packages)  small  value  consignments  increase  pressure  on  tax  revenues,  as  it  is 
estimated  that  Member  States  are  losing  at  least  EUR  5  billion  annually  in  VAT  revenues, 
expected to increase up to EU 7 billion by 2021.367 The likely changes to the legal framework 
push increasingly for an integrated approach of fiscal and customs administrations.  

A  second  challenge  relating  to  the  legislative  framework  governing  e-Commerce,  is  the 
disappearance  of  the  traditional  trader,  being  replaced  by  occasional  and  even  ‘faceless 

365 WCO Study Report on Cross-Border e-Commerce, WCO, 2017. 

366 See the Case study on e-Commerce for the Fiscalis programme.  

367 This includes EUR 1 billion VAT foregone due to the VAT exemption and EUR 4 billion from non-compliance. 
See: https://ec.europa.eu/taxation_customs/business/vat/digital-single-market-modernising-vat-cross-border-
ecommerce_en  

401 

 
 
                                                      
traders’.  The  traditional  importer  of  record  (“business”)  is  increasingly  replaced  by 
individuals and express delivery services (such as DHL or FedEx)368.   

A  specific  question  for  customs  is  to  find  out  ‘who  they  are  dealing  with’:  who  is  the 
importer  of  record? Most often, e-Commerce shipments and distribution of goods bought 
on  the  internet,  on  e-Commerce  platforms  such  as  Amazon  or  Ebay  or  Alibaba,  are 
completed by the 3PL company. Express delivery services are responsible for the duty and 
tax payable and filing of forms. Instead of customs dealing with the recipient of the goods 
being  the  importer  of  record,  increasingly  customs  deal  with  ‘faceless  traders’  taking 
responsibility for someone else’s duty and tax.  

The  changing  client  base  as  result  of  e-Commerce  also  resonates  in  the  UCC,  which 
recognizes that individuals may take up a role as importer of record.  

  Example:  The  general  requirement  of  requesting  an  EORI  number  for  importers  of 
record,  is  an  exception  for  individuals  as  stated  in  the  UCC  Delegated  Act.  For 
example,  the  German  customs  mentions:  ‘Private  individuals  (persons  other  than 
economic  operators)  need  not  have  an  EORI  number  if  they  only  occasionally  lodge 
customs  declarations  (Article  6  of  the  European  Commission  Delegated  Regulation 
supplementing the UZK - Delegated Act (Delegierte Verordnung zum UZK  - DA)). The 
term "occasionally" here refers to less than ten customs declarations a year369.’ The 
interpretation of ‘occasionally’ may be interpreted differently by customs in different 
countries.  

Cooperation between customs administrations and their stakeholders  

If  there  is  one  aspect  exemplified  by  e-Commerce,  that  is  the  fact  that  customs 
administrations do not operate in a vacuum when managing in-coming, out-going or stored 
trade flows. Indeed, e-Commerce has resulted in a more complex network of stakeholders, 
each  taking  up  their  role  in  the  supply  chain  and  ensuring  end-to-end  reliability  from 
purchase to timely delivery.  

In specific, the important role of express couriers as result of the e-Commerce trend is to be 
acknowledged.  During  fieldwork,  an  express  courier  representative  reflected  on  the  e-
Commerce trend: “e-Commerce was not especially relevant 5 years ago. However, this year, 
e-Commerce is the most important trend by far in this country, and even our company was 
caught  by  surprise.  This  trend  has  significantly  affected  the  volume  of  trade,  also  due  to 
thousands of shipments are returned because customers are not satisfied with the product. 
90% of the goods are coming from China. Our company developed a closer cooperation with 
the customs administration in this country to provide data.’ 

368 See the Case study on e-Commerce for the Fiscalis programme. The role of platform and marketplaces, as 
well as intermediaries such as couriers, is still under debate.  

369

 See: 

http://www.zoll.de/EN/Businesses/Movement-of-goods/Import/Duties-and-taxes/EORI-

number/Questions-and-answers/_functions/frage_5.html 

402 

 
 
                                                      
The  digital  trade  and  e-Commerce  trend  has  pushed  customs  administrations  towards  a 
more  customer-focus  and  pro-active  solution-seeking  approach,  especially  with  regard  to 
intermediary parties. In addition, customs administrations are employing innovative ways to 
position more competitively vis-à-vis other EU Member States in the area of e-Commerce. 

  For  example  in  the  Netherlands,  simplified  declaration  forms  can  be  used  by  e-
Commerce  companies  importing  consignments  with  a  value  of  less  than  22  Euros 
(Venue).  This  facility  will  be  allowed  throughout  the  transitional  period  of  the  UCC 
(until January 2021), allowing companies to make an incomplete advanced declaration 
in a set format370. 

Customs  administrations,  from  their  side,  are  responding  in  different  ways.  However,  a 
trend is visible towards more collaborative and pro-active partnering, in order to clarify the 
roles  and  responsibilities  in  complex  supply  chains,  benefit  from  shared  capacity  and 
improved  issue-solving.  In  the  context  of  e-Commerce,  customs  enter  into  innovative 
partnerships and more in-depth discussions with a variety of stakeholders, including:  

  Individual or business sellers (exporters);  
  Individual or business buyers (importers):;  
  e-Commerce platforms (such as Amazon, Alibaba or Ebay);   
  Logistic service providers (such as DHL, UPS); and  
  (National) postal services;  
  Other EU and non-EU customs administrations 
  (International) organisations, including:  
  WCO: e-Commerce working-groups 
  WTO:  multilateral 

framework  developing  new  rules  on  e-Commerce  and 

‘moratorium on e-Commerce products’ 

Some  examples  of  cooperation  mechanisms  developed  between  customs  administrations 
and express couriers include:  

  In  Italy,  a  cooperation  between  the  customs  administration  and  express  couriers 
supports the risk analysis process by gathering data for every consignment above the 
threshold  of  EUR  22  for  which  an  official  customs  declaration  is  to  be  submitted. 
Customs also gained access to a shared database with express couriers. “As a result of 
this  cooperation  with  express  couriers,  we  have  improved  information.  We  can 
finetune the risk profile and use it, although undervaluation remains problematic”. 
  In  Denmark,  the  cooperation  with  inter  alia  focuses  on  valuation:  “Our  company 
[express  courier]  performs  its  controls  by  asking  to  the  customer  the  value  of  the 
goods they ordered. If the value happens to be different from the one declared, our 
company has to modify it by adding a new document to be shared with customs”. The 

370

 See: 
https://download.belastingdienst.nl/douane/docs/venue_simplified_dec_e_commerce_goods_do641z3fdeng.
pdf  

403 

 
 
                                                      
Danish  Customs  and  Tax  Administration  (SKAT)  is  also  actively  targeting  illegal 
consignments  of  narcotics,  weapons  and  drugs,  through  a  collaborative  effort  with 
relevant organisations resulting in common control activities.  

On the other hand, the cooperation with national postal services has proved more 
complicating, especially hampered by regulatory aspects.  

  As  mentioned  by  the  French  customs  administration :  “La  poste  c’est  un  univers 
diffèrent par rapport à DHL et compagnie. Ils sont soumis aux règles de déclaration de 
l’Union  Postal  Universel.  Cette  organisation  travaille  sur  une  convergence  du 
traitement des opérateurs postaux à l’horizon 2025. Le problème pour nous c’est qu’il y 
a très peu de données sur les flux postaux dans nos systems”. 

Effects  of  the  trend  and  problems  on  the  functioning  of  the  customs  union:  trade  and 
fraud, financial interests (budget), safety, competitiveness  

Whereas customs are keen to support trade facilitation, e-Commerce is a challenge when it 
comes to ensuring security and safety (use of non-intrusive inspection systems), preventing 
revenue  losses,  and  making  sure  parcels  are  processed  efficiently  by  making  use  of  the 
appropriate equipment.  

In  terms  of  protecting  the  supply  chains  and  consumers,  customs  administrations  are 
especially struggling with the risk of low value parcels containing dangerous or counterfeit 
products. The aspect of the ‘faceless trader’ raises questions in terms of risk management, 
as  low  value  parcels  often  benefit  from  swift  declaration  methods  and  logistic  service 
providers act as exporter of record.   

More specifically, the risks in terms of illicit trade are also exposed to customs, specifically 
for goods coming from  third countries into the EU. The role of e-Commerce platforms has 
been proven manifold times in facilitating the sale of looted or stolen cultural goods, drugs 
and  medicines  or  other  types  of  illicit  trade  that  can  be  sent  in  small  packages.  Customs 
administrations are challenged in managing the risks of e-Commerce and (fraud with regard 
to declaring) low value goods, with regard to consumer protection, and safety of products 
and  of  services  entering  the  European  Single  Market.  Furthermore,  goods  are  traded  in  a 
important  questions  on  cybersecurity  and  tackling 
digital  environment,  triggering 
cybercrime, and raising the debate about the role of customs in this regard.   

Apart from illicit trade, the matter of IPR infringements received particular attention during 
fieldwork, especially raised by economic operators as a negative effect from the growth in e-
Commerce. IPR infringing goods originate most frequently in the Asia-Pacific region, and are 
often distributed through criminal business models.  

  As  part  of  a  pilot  project  between  express  couriers  (European  Express  Association), 
OLAF  and  selected  economic  operators,  the 
infringement 
shipments  has  been  targeted.  With  participation  of  DHL  Express,  a  joint  profiling 
scheme was developed, which achieved 100% success rate on shipments suspecting of 
infringing  IPR  using  advance  electronic  shipment  information.  Selected  shipments 

interception  of  IPR 

404 

 
 
have been intercepted by DHL Express operators before customs clearance, allowing 
customs to contact right holders. However, right holders do not always decide to take 
action (less than 20% of instances) once informed of infringing shipments (high value 
thresholds)371.  

In terms of competitiveness of businesses, it is worth mentioning that intra-EU e-Commerce 
potential remains underutilized  according  to  BusinessEurope.  This  is partly  due  to the fact 
that the EU market for e-Commerce remains fragmented in 28 different countries.  

Under  the Digital  Single  Market  Strategy  for  Europe,  launched  in  2015,  one  priority  is  to 
boost  e-Commerce  in  the  EU.  This  priority  area  includes  actions  related  to  making  cross-
border parcel delivery more affordable and efficient and promoting customer trust through 
better protection and enforcement. 

Meanwhile, remaining trade barriers for companies in the e-Commerce business in the EU 
inter alia include372:  

  Differences in customs handling (including obstacles to cross-border parcel delivery);  
  Differences in national VAT regimes;  
  The obligation to have physical presence in certain EU states to obtain a national top-

level domain name (such as .de or .fi) 

  Barriers  on  payment  (preferential  treatment  to  e-traders  offering  local  payment 

facilities); 

  Differences  in  national  consumer  rules  (right  of  withdrawal),  such  as  labelling 

requirements and national VAT regimes 

Demands to the new Customs programme 

This  case-study  highlighted  how  customs  administrations  and  stakeholders  have  been 
‘caught  by  surprise’  as  result  of  the  fast  and  grand  appearance  of  the  e-Commerce  trend. 
Regarding the demands for a future customs programme, the fieldwork recommendations 
comprise inter alia the following interests expressed by customs administrations:  

  Support  collaborations  with  3rd  parties,  especially  express  courier  services,  building 
on best practices in the EU and including through structural dialogues and joint actions 
to target illicit trade and (under-valuation) fraud through e-Commerce; 

  Strategic  reflections  on  improved  partnerships  with  third  countries  and  platforms 
(such as Ebay etc) and regulatory frameworks to support improved risk analysis for e-
Commerce.  

371

about 

 Information 

this 
https://euipo.europa.eu/tunnel-
web/secure/webdav/guest/document_library/observatory/documents/meetings/Enforcement-Working-
Group_3%20march/Summary_Enforcement_WG_March_2016_en.pdf  

accessed 

through 

project 

pilot 

also 

can 

IPR 

be 

EUIPO: 

372 Kommerskollegium,  Online  trade,  offline  rules,  a  review  of  barriers  to  e-Commerce  in  the  EU,  2015, 
https://www.kommers.se/Documents/dokumentarkiv/publikationer/2015/Publ-online-trade-offline-rules.pdf 

405 

 
 
                                                      
  Enhance quality of data through innovative partnerships (with platforms such as Ebay 
and Amazon) under the customs programme with e-Commerce platforms or as result 
of new legislation; 

  To facilitate a pilot  of  collaboration  around  e-Commerce that  provides an  integrated 
tax/customs  perspective  and  facilitates  solving  of  complex  matters  related  to  both 
customs and VAT matters in the context of e-Commerce and digital trade;  

  Leveraging  on  WCO  discussions,  to  take  place  as  part  of  strategic  think-tank  or  in 
working group on new trends in trade such as e-Commerce and possible solutions in 
an  integrated  manner;  regulatory  framework  (de  minimis)  as  well  as  capacity  and 
cooperation;  

  Supporting  innovations  and  financing  new  types  of  equipment  that  allow  higher 
control-percentages  without  raising  trade  barriers  (including  the  involvement  of 
universities). 

Conclusions 

Customs  administrations  across  the  EU  are  attempting  in  different  ways  to  deal  with  the 
sudden  growth  of  e-Commerce  trade  flows.  Whereas  the  general  approach  seems  to 
“surrender”  to  the need  to facilitate  trade, there  is  a  general  sense  of dissatisfaction  with 
the limited means (data) and tools (regulatory frameworks and equipment) to carry out the 
control function in an appropriate manner. Consequently, illicit trade, counterfeit goods and 
potentially unsafe goods can now enter into the EU as result of the incapability of customs 
administrations to take appropriate action.  

This  case  study  on  e-Commerce  (and  digital  trade)  has  especially  brought  to  the  fore  the 
need to address the fragmented and inadequate legislative framework on e-Commerce, the 
importance of quality data to be improved, the relevance of interoperability of IT systems in 
the EU, as well as matters related to revenue collection and security. There is a strong sense 
across customs administrations as well as economic operators (especially express couriers, 
and  in the  future  perhaps  platforms  on  e-Commerce)  to  work  in  collaboration  towards  an 
improved  situation.  The  role  for  a  future  customs  cooperation  programme  could  be  to 
facilitate this ambition. Alignment with existing international organisation efforts, such as in 
context of WCO, is key to realize results.  

406 

 
 
Annex B.4 - External border protection: land 
border, sea border and air border 

Introduction:  a  customs  perspective  on  land,  sea  and  air  border 
management in the EU 

The case studies on the external border management in the EU serve to deeper investigate 
the main problem for customs administrations and the functioning of the Customs Union as 
a whole.   

On the one hand, this case study aims to provide a broader perspective on the importance 
of the topic of external land, sea and air border protection for Customs administrations, as 
well as the need for cooperation among these administrations. On the other hand, the case 
study  intends  to  identify  whether  and  how  this  topic  could  be  positioned  within  a  future 
Customs programme.  

The  findings  from  this  case  study  help  us  link  the  identified  problems  and  drivers  to  the 
needs  of  customs  administrations  (common  and  differentiated).  Furthermore,  the  case 
study  will  embrace  any  forward-looking  and/or  innovative  views  and  ideas  in  order  to 
ensure  the  relevance  of  the  programme  in  a  post-2020  period  (e.g.  how  should  Member 
States deal with the concepts of external border protection for Customs administrations). In 
accordance with our findings we are able to work out options to define the future policy and 
programme.  

The  geographical  scope  of  this  case  study  depends  on  the  specific  topic.  For  each  of  the 
different borders a number of Member States have been selected  

  External land border protection: Croatia, Estonia and Poland; 
  External Sea border protection: Belgium, Denmark, France, Italy and Malta; 
  Air border protection: Belgium, Hungary, France, Italy and Malta; 

The  full  list  of  the  interviewees  in  each  Member  State  can  be  found  in  Annex  C  to  the 
Second Interim Report.  

Risk management for border protection 

Customs are positioned strategically to protect the borders of the Single Market. For those 
customs  administrations  that  are  placed  at  an  external  land  or  sea  border,  heightened 
performance pressure is placed in the area of customs control. In this shared role, however, 
the geographical positioning of customs administrations across the EU (managing trade at a 
land, sea or air border) impacts upon the organizational capacity and requirements. 

407 

 
 
Control of goods when entering into or leaving the Customs Union is for different reasons of 
structural importance; to protect the EU's ensure safety and security, to facilitate trade and 
support  competitiveness,  and  to  ensure  financial  revenues  for  the  EU  and  its  member 
states.  Both  the  internal  dimension  (free  movement)  and  external  dimension  (customs 
control  and  facilitation)  of  the  EU  single  area  comes  under  pressure  due  to  a  number  of 
existing  and  future  trends.  The  challenge  of  doing  more  –  often  with  less  resources  – 
requires  the  revision  of  European  border  management  policy  and  the  investigation  of 
solutions supporting controls at the external borders, including those non-customs control 
functions to be performed by customs administrations in many of the Member States which 
originate from the strategic and geographical positioning of customs services at the external 
borders.  

To picture the importance of EU border protection, the data with regards to trade flows are 
telling: between 2004 and 2010, the value of EU external trade grew by almost 50%. In the 
context  of  growing  and  changing  trade  flows,  the 
importance  of  functioning  risk 
management  framework  for  customs  purposes  and  for  the  safety  and  competitiveness  of 
the  EU  and  their  citizens  and  businesses,  has  been  acknowledged  by  the  European 
Commission.373 

More  than  90%  of  global  trade  is  carried  annually  by  sea  whereas  more  than  20%  of  this 
sea-borne  trade  is  unloaded  in  Europe.  Half  of  EU  trade  in  goods  is  carried  by  sea  with 
Rotterdam  being  the  busiest  port  for  handling  goods.  A  substantial  part  of  air  cargo  and 
passengers  transport  is  linked  to  more  than  250  airports  in  the  EU.  Along  the  entire  EU 
external border, there are more than 1000 customs offices of entry while the sole eastern 
land border is 9 890 km long, with 133 commercial road and rail entry points.  

Border protection is intrinsically linked to risk management as the latter is the first step to 
ensure a smooth and safe trade flow in the EU, which is of capital importance both for the 
economic growth of the EU and for the security and safety of its residents. The EU requires 
customs to tackle risks consistently. Customs administrations at the first point of entry will 
decide, based in the seriousness of the risk posed, whether checks are needed and where. 
In that regard, it is important to take into account other competent authorities involved in 
supply chain movements for complementarity.  

Indeed,  the  corner  stone  of  risk  management  is  the  receipt  of  high  quality  data  to  be 
processed  and  exchanged  through  up  to  date  and  inter-operable  IT  systems,  which  then 
entitles  a  proper  exploitation  for  the  risk  assessment  to  support  the  movements  intra-EU 
and extra-EU of goods movements. The foundation of risk assessment is the advance cargo 
in  relation  to  goods 
information  submitted  electronically  by  economic  operators 

373 COM (2012) 793 final – Communication from the European Commission to the European Parliament, the Council and 
the European Economic and Social Committee on Customs Risk Management and Security of the Supply Chain.  

408 

 
 
                                                      
movements entering and exiting the EU, however, the information available is in general not 
precise enough to conduct effective analysis.374  

In parallel, a Common Customs Risk Management Framework (CRMF) is covered by article 
46 UCC. This framework recognizes the need for an equivalent level of protection in customs 
control  through  a  harmonized  approach.  It  seeks  to  find  the  proper  balance  between 
customs  controls  and  the  facilitation  of  legitimate  trade.  Customs  controls  need  to  take 
place based on common risk assessment criteria and real-time exchange of risk information. 
Furthermore,  priority  must  be  given  to  specific  areas  with  increased  levels  of  risk.  The 
purpose  of  the  mechanism  is  to  ensure  that  proper  information  about  identified  risks  is 
distributed  as  quickly  as  possible  to  operational  customs  office  in  all  Member  States.  The 
sooner  risk  assessment  of  supply  chain  goods  movement  can  be  undertaken,  the  better 
control requirements can be tailored to the risk identified.375  

Second, customs administrations also require customs scanning and control equipment, to 
efficiently  protect  borders  and  manage  risks.  The  use  of  sophisticated  and  up  to  date 
equipment  is  necessary  to  enable  the  customs  administrations  to  cope  with  broadened 
tasks, as result of the new roles of customs in controlling of goods crossing the EU's external 
borders  in  order  to  combat  fraud  and  prevent  illicit  trade  linked  to  safety  and  security 
aspects. 

The extent to which the (un)availability of customs control equipment is problematic, differs 
per EU Member State, depending on the volumes of goods crossing the external border(s) 
and  geographical  location  and  international  trade  channels  (land,  sea/waterways,  air)  as 
well  as  financial  resources  available  (to  self-finance).  Through  this  case  study,  improved 
understanding  is  sought  on  the  magnitude  of  the  problem  for  different  countries,  and 
explore how the improved availability of (advanced) equipment for controls may contribute 
to efficiency of customs controls, and their potential impact upon customs’ missions in the 
area of safety and security, financial interests as well as on trade facilitation. 

Some  recent  best  practices  under  Customs  2020  will  be  taken  into  account,  especially 
related to Member States in the eastern and south-eastern land border which engaged into 
a reinforced cooperation including exploring the (shared) use of equipment, by the setting 
up of a Customs Eastern and South-Eastern Land Border Expert Team (CELBET). 

374 COM (2014) 527 final - Communication from the European Commission to the European Parliament, the Council and the 
European Economic and Social Committee on the EU Strategy and Action Plan for customs risk management: tackling risks, 
strengthening supply chain security and facilitating trade, Brussels, 21st of August 2014.  

375 The  measures:  Customs  Risk  Management  Framework  (CRMF)  on:  https://ec.europa.eu/taxation_customs/general-
information-customs/customs-risk-management/measures-customs-risk-management-framework-crmf_en 

409 

 
 
 
                                                      
 
 
Case study: Land border protection 

This  case  study  aims  to  provide  a  broader  perspective  on  the  importance  of  the  topic  of 
external  land  border  protection  for  Customs  administrations,  as  well  as  the  need  for 
cooperation  among  these  administrations.  On  the  other  hand,  the  case  study  intends  to 
identify how this topic could be developed within a future Customs programme.  

The fieldwork for this case study was conducted in Croatia, Estonia and Poland. 

Background 

Customs  are  strategically  positioned  to protect the  borders of  the  Single Market.  Customs 
administrations  that  are  placed  at  an  external  land  border experience  higher  performance 
pressure  when  it  comes  to  customs  control,  given  the  many  possible  entry  points.  The 
geographical positioning of these customs administrations on the border of the EU heavily 
impacts their organizational capacity and requirements. 

  About  72%  of  cross-border  activity  at  the  land  border  is  road  traffic,  25%  is  railway 

traffic.376  

The  external  border  of  the  EU  is  also  the  access  point  to  the  Single  Market  where  free 
movement of goods between Member States is guaranteed. Control of goods when entering 
into or leaving the Union via land is for this reason of structural importance  to protect the 
EU's financial interest. Art. 28 TFEU and the UCC identify Customs to ensure that obligatory 
duties are paid upon entrance to the Single market. 

  For  the  EU,  customs  duties  currently  represent  12%  of  the  Union’s  budgetary 
resources.377 Customs  duties  levied  on  economic  operators  go  directly  to  the  EU 
budget. Member States Governments retain 20% as collection costs378; 

Beyond  revenue  purposes,  customs  also  plays  an  important  role  in  relation  to  the 
prevention,  detection  and  investigation  of  fraud  and  illegal  trade  of  goods.  The  Internal 
Market of the EU is at risk because of smuggling, counterfeits and goods which can harm the 

376 CELBET Equipment & Procurement team study, February 2017. 

377  European  Parliamentary  Research  Service,  Own 
http://www.europarl.europa.eu/EPRS/140790REV1-Own-resources-of-the-European-Union-FINAL.pdf 

resources  of 

the  European  Union,  2014, 

378 Ibid. 

410 

 
 
 
 
 
 
 
                                                      
EU  market  or  its  citizens.  By  detecting  and  countering  illegal  trade  at  the  border  /  upon 
entry into the EU, Customs can protect the EU’s domestic industries and its citizens.  

Customs is also the first line of defence for the protection of the environmental, technical, 
safety,  sanitary  and  veterinary  standards  which  are  set  by  the  EU  institutions.  These 
additional  tasks  were  assigned  to  customs  in  about  60  pieces  of  EU  legislation  (mostly 
Regulations) which can be found back in the problem assessment section. Here below are 
some facts and figures that illustrate the impact of these tasks on customs functioning.  

  According  to  the  European  Commission,  it  is  estimated  that  not  adapting  to  climate 
change would cost at least EUR 100 billion a year by 2020 and at least EUR 250 billion 
by 2050379. Adaptation380 can reduce costs, save lives and protect livelihoods. Part of 
that adaptation is to make sure that goods and traders which do not fall in line with 
these initiatives do not enter the EU.  

  EU  customs  administrations  in  2016  “made  over  63 000  detentions,  consisting  of  a 
total of 41.3 million articles”381 as a result of their enforcement of intellectual property 
legislation382. The domestic retail value of the detained articles represented more than 
EUR 672 million.  

Art.  87  TFEU  establishes  that  customs  is  part  of  an  integrated  cooperation  with 
immigration  services  and  police  to  consistently  protect  EU  citizens  against  criminals  and 
illegal goods entering from third countries. 

Land  border  protection  is  also  important  from  an  export  point  of  view.  On  the  exporting 
side, customs must ensure that no goods leave the EU to countries or entities which intend 
on using these goods against the interest of EU citizens or jeopardizing their security. Export 
controls have gained in importance over the last years under the influence of international 
terrorism and intensifying political developments between countries.  

As customs has received an increasingly important role in protecting the EU’s non-financial 
policies and security has become an imminent topic, the tasks and responsibilities that come 
with  these  roles  will  continue  to  grow.  In  order  to  adequately  reconcile  customs  role  to 
protect the EU’s financial, industry and security interests with that other EU objective, trade 

379

Commission, 
https://ec.europa.eu/clima/sites/clima/files/docs/factsheet_adaptation_2014_en.pdf 

Adaptation 

European 

to 

climate 

change, 

380 The  policy  options  for  dealing  with  climate  change  are  generally  divided  into  two  types:  mitigation 
(targeting the causes) and adaptation (targeting the impacts). 

381 Also in 2016, 3 040 national applications for action and 1 179 Union applications for actions were submitted 
to  customs  administrations  by  right-holders,  which  continues  the  upward  trend  of  the  last  years.  China 
remains  the  most  important  country  of  provenance  for  counterfeit  goods,  but  also  Singapore,  Hong  Kong, 
Turkey and India continue to be important and intellectual property infringements vary from trademarks and 
copy right to patents and geographical indications misuse. 

382 Art. 1, Regulation Council and European Parliament (EU) No 608/2013 of 12 June 2013 concerning customs 
enforcement  of  intellectual  property  rights  and  repealing  Council  Regulation  (EC)  No  1383/2003,  OJ  L  181, 
29.6.2013. 

411 

 
 
                                                      
  
facilitation  and  liberalization,  Member  States  must  handle  efficient  risk  management 
systems.  Other  important  elements  which  can  help  succeed  the  broadened  objectives  of 
customs are adequate equipment and human resources.  

The case study of external land border protection makes a link with the direct and indirect 
effects  of  the  problem  tree.  Appropriate  solutions  need  to  be  formulated  to  answer  the 
drivers  which  today  and  tomorrow  cause  the  remaining  gaps  in  uniformity  and  efficiency 
among customs administration leading to the mentioned effects.  

Key issues for customs administrations 

Security and risk analysis  

While security is a traditional and primary task for customs, developments in recent years 
such  as  immigration  crises  and  terrorism  as  well  as  the  broadening  of  tasks  into  security-
related  responsibilities  of  customs,  have  brought  additional  pressure  on  the  customs 
administrations.  In  terms  of  managing  the  facilitation  and  control  functions  at  the  land 
border,  customs  administrations  are  challenged  first  and  foremost  in  the  processing  of 
available data to perform risk analysis, as a basis to stopping dangerous goods from entering 
the Union or leaving the Union.  

Whereas the quality and exchange of data is crucial to the protection function of customs 
agents at the  border,  this  remains  challenging  in  the  case  of  land-border  protection  when 
data are provided at the same time the goods in trucks, or cars and people, are presented at 
the border. In the case of trains arriving over railway, customs administrations are working 
to advance the risk analysis and demand for pre-arrival notification.  

The  importance  and  complexities  surrounding  risk  analysis  processes  are  supported  in 
fieldwork findings.  

Member  States  indicated  that  a  service  organized  at  the  EU  level  which  centralizes 
intelligence  on  risk,  security and  border  strategy  would be  a  welcome  addition  where  it  is 
missing now. The current gap leads to the differences in the application of border protection 
between  Member  States.  The  RIF  database  is  a  good  start,  but  more  is  needed.  The  RIF 
database  facilitates  the  exchange  of  risk  data  between  Member  States,  but  it  would  be 
welcomed if the programme could create a group doing intelligence at the EU level. In such 
an  environment  testing  could  become  possible  and  innovation  would  be  supported.  As 
customs administrations are lacking manpower they are still using their personal knowledge 
and experience to detect companies. 

  E.g.  Croatia:  The  general  trend  in  customs  is  going  towards  data  centred  risk 
management, but the higher management in Croatia does not always understand this 
approach.  Customs  administrations  are  using  data  to  detect  companies  on  fraud 
(based on IP addresses and locations) but they are not aligned with the mobile units. 
There  is  no  data  sharing  for  IPR  with  other  officers  for  risk  of  leakages.  Many 
departments also do not yet make use of the data we provide. Data sharing with other 
Member States happens on a personal relationship level, but not structurally.  

412 

 
 
Different  databases  exist  among  international  organizations  to  report  in  seizures  of  illegal 
trade, which are used for analysis and reporting. However these inputs need to be put in 4 
different databases (in terms of alcohol, cigarettes, money, IPR) without any interoperability 
between the systems at all. Now there are too many separate EU and international systems 
and on top of that national databases.  

Customs  is  lacking  the  people  to  perform  on  a  constant  basis  heightened  and  more 
thorough  controls.  Detection  of  certain  dangerous  goods  (nuclear  materials  for  example) 
also  requires  specialized  equipment  which  is  expensive  and  which  Border  Crossing  Points 
(BCPs) do not always have in hands.  

Equipment, IT and human resources   

All selected Member States for the land border protection case study raised the issue about 
insufficient  equipment  at their  BCPs.  Equipment  refers  in the  first  place to  scanners,  both 
fixed and mobile ones to detect certain dangerous or illegal materials. For the land border 
protection, there are 3 main types of equipment used: search tools, equipment for analysis, 
detection and using of radiation for scanning.  

Overall there is an increase in traffic from third countries into the EU from the East over the 
last  decade.  With  the  development  of  China’s  new  Silk  Road  (One  Road,  One  Belt)  land 
traffic  and  specifically  rail  way  traffic  continues  to  show  a  growing  trend.  The  Eastern 
European  countries  of  the  EU  (with  in  first  place  Croatia)  are  facing  an  increase  in  illegal 
cross-border activity. The CELBET expert team under the Customs programme has as a goal 
to “provide protection guarantee for the whole EU by providing highest quality of customs 
control at the EU external land border.”  

To  exercise  both  a  facilitation  and  protection  function,  the  customs  control  and  detection 
equipment  is  key  for  the  functioning  of  customs  at  the  BCPs  situated  on  the  outside  land 
borders of the EU. Here, the fieldwork brought out the differences in Member State capacity 
in terms of equipment, and possible risks as a result: 

One representative in an Eastern member state mentioned: ‘The situation is different from 
country  to  country  but  if  you  do  not  have  the  same  level  of  equipment  and  human 
resources trafficking will go to those BCPs where smuggling or trafficking is less controlled.  
Our (EU) external border is only as strong as its weakest link. It does not make sense for the 
EU to invest a lot in good equipment in one place, if other places along the external border 
are not sufficiently protected’. 

To this end, Member States have stated during fieldwork that there is a need for improved 
insights into the availability of and need for equipment, and –linked to that- the investment 
gap to finance the equipment purchases. As part of the CELBET Equipment and Procurement 
team  made  a  gap-analysis  of the  actual equipment  resources  at  the eastern  and  southern 
border versus the necessities and came to the conclusion that the gap was substantial.  

E.g. High detection rates of smuggling on the Balkan route. 

Number of BCPs per Member State: 

413 

 
 
  Croatia: 41 
  Poland: 32 
  Estonia: 5383 

The  equipment  to  control  goods  is  disproportionately  low  in  relation  to  the  volume  of 
incoming  trade  and  as  a  result  customs  is  left  with  no  option  than  to  minimize  controls. 
Necessary  equipment  investment  gaps  are  analysed  as  part  of  the  CELBET  expert  team 
activities, providing relevant insights into the availability of (see figure below) and the needs 
for equipment funding.  

  Fieldwork visits confirmed the findings from 11 EU Member States facing external land 

borders (CELBET):  

  53  %  of  the  BCPs  lack  of  automated  number  plate/container  number  recognition 

systems (ANPRS); 

  46 % of BCPs lack scanners for cargo and vehicle inspection of trucks and wagons; 
  Personal hand tools are not available in 51 % of BCPs384.  

Figure 49: Scanner use in CELBET: Personal radioactivity detector for detection of ionizing radiation 

Source: CELBET 3.1 Making of inventory of currently deployed control and detection equipment, February 2017 

The fieldwork findings point towards the fact that the important role of equipment played in 
customs control and facilitation is shared by all EU member states. However, the fieldwork 
has  also  confirmed  that  equipment  investments  are  disproportionally  weighing  on  those 

383 CELBET, 3.1 Making of inventory of currently deployed control and detection equipment, February 2017. 

384 CELBET, 3.1 Making of inventory of currently deployed control and detection equipment, February 2017. 

414 

 
 
 
 
                                                      
countries  geographically  placed  at  the  external  (land)  border  of  the  EU.  This  leads  to  a 
disturbed  balance  with  regards  to  the  financial  investments  required  (equipment)  to  fulfil 
the  responsibilities  of  some  member  states  (with  border  crossing  points  through  land, air, 
sea) in order to protect all EU countries from illicit, counterfeit or unsafe incoming goods. 
Differences  in  Equipment  quality and  availability  leads  to  potential  shopping  by traffickers 
and criminal networks. 

The  new  control  tasks  for  customs  officers  in  non-traditional  customs  topics  (veterinary, 
sanitary, chemicals, etc.) demand for more specialized materials and laboratories which are 
now not present or to a minimal extent.   

With  regards  to  the  procurement  of  equipment,  the  fieldwork  findings  point  towards  the 
need  for  integrated  perspective  on  both  the  financing  of  ‘hard’  and  ‘soft’  equipment. 
Member States expressed they carry too little expertise to make well informed purchases of 
equipment that fits the specific needs of BCPs. In addition, currently no possibility exists to 
test equipment nor is there a facility that  stimulates equipment sharing between Member 
States. Furthermore, most of the equipment at the external land border is of significant age 
and  requires  maintenance.  Neither  funding  for  new  equipment,  nor  maintenance  is 
provided  under  the  Customs  programme.  Instead  the  Member  States  use  funding  under 
different  programs  from  OLAF,  since  on  a  national  level  there  is  not  enough  budget.  This 
funding  however  only  partially  covers  the  cost  and  on  top  of  that  OLAF  imposes  Member 
states to choose the cheapest equipment available.  

On top of that the market for customs equipment is dominated by 3 main players keeping 
the  prices  high,  although  newcomers  on  the  equipment  market  (notably  from  China)  may 
change  this  in  the  near  future.  On  a  national  level  Customs  needs  to  defend  its  high 
expenses and competes with other financing needs in a budget climate that is still austerity 
driven. Therefore procurement of new equipment remains a difficult assignment. 

Those Member States at the external borders indicated during fieldwork that the funding of 
purchasing and maintenance of their equipment with national budgets are not possible, and 
that equipment funding for external land border protection should actually be a combined 
effort within the EU and not just for the countries situated at the external border.   

The  funding  for  IT  tools  happens  for  a  big  part  through  several  EU  programs  such  as  the 
European Social Fund, Hercule and the Internal Security Fund, but Member States indicated 
that  it  is burdensome  to  retrieve budget for  customs  purposes  and  often  unclear  on both 
sides  to  what  extent  budget  is  reserved  for  customs.  What  ensues  is  a  battle  with  other 
governmental agencies such as immigration for a part of the available budget.   

What  is  considered  to  be  a  big  plus  about  this  Customs  programme  is  that  customs 
administrations have a portal for collaboration. However, with CIRCA, PICs, there are many 
different  tools  and  it  would  be  better  to  just  have  one  general  one.  The  main  message 
would be to keep these groups as they are but to upgrade them a bit. 

Customs  administrations  overall  complain  that  they  have  insufficient  human  resources. 
While  cross-border  trade  and  customs  competences  have  been  growing,  the  number  of 

415 

 
 
customs officials overall stays the same or drops. Now that a lot of processes are becoming 
IT  based  this  should  not  necessarily  be  a  problem,  but  this  way  of  working  does  require 
enough staff who can manage the IT systems. The programme needs to ensure the skills to 
take  on  the  appointed  responsibilities  and  capacity  to  use  equipment.  Trainings  can  and 
must keep customs officers motivated.  

Number of customs officers: 

  Poland: 2016 or average of 84 per BCP 
  Croatia: 767 or average of 20 per BCP  
  Estonia: 154 or 31 per BCP385 

New legislative initiatives on the EU level have resulted in additional enforcement tasks for 
customs in the fields of cash controls, intellectual property protection, sanitary, veterinary, 
chemical and environmental requirements.  

At the  same  time  most systems,  processes  and databases  in  customs have  become  or  are 
becoming fully technology-based.  

These developments require new skills for customs officers. Senior officers struggle with the 
new  changes  and  it  is  difficult  to  find  the  right  profiles  of  young  professionals  with  IT 
knowledge  and  customs  interest.  The  new  policies  that  need  to  be  enforced  also  require 
knowledge of the distinctive legal frameworks and complimentary processes and products. 
It makes it very difficult for customs officers to keep up and in reality they are not trained to 
properly  apply  all  of  these  policies.  Sometimes  customs  officers  lack  the  necessary 
knowledge to apply these policies at all.  

At  the  same  time,  customs  officers  are  losing  their  status  as  experts,  because  they  are 
forced  to  master  a  broad  array  of  services  which  takes  away  from  the  possibility  to 
specialize in the customs-technical domain. Increasingly customs officers will need to rely on 
automated  systems  and  SOPs,  but  the  difference  is  that  where  10  years  ago  a  customs 
officer  could  perfectly  apply  the  HS  system  and  classification  rules,  the  new  generation  is 
not able to do so. 

Cooperation and data sharing  

All  selected  Member  States  answered that  data sharing  is  a  problem for  customs, but  the 
issues  take  on  different  forms  depending  on  the  Member  State  as  is  explained  further 
below.  

The difference in capabilities and infrastructure between countries (both in the EU and with 
third countries) is a barrier to better cooperation and management of the border. Language 
barriers  prevent  better  cooperation  between  Customs  administrations  of  different 
countries.  

385 CELBET Equipment & Procurement team study, February 2017. 

416 

 
 
                                                      
There  is  a  clear  split  in  responsibilities  between  customs  and  border  protection  with  as  a 
result  that  not  enough  communication  takes  place  between  the  departments.  There  is  a 
need in the future to link the different IT systems and exchange information: 

  between administrations (on national level) 
  between Member States 
  between existing systems 

While  there  is  more  collaboration  with  police  &  border  protection,  the  required  levels  of 
trust and close working relationships are in most countries not optimal. However, the trend 
towards integrated border management is very actual in the land border management, and 
creating  enhanced  synergies  between  border  protection  and  customs  management. 
Member states capitalize on these synergies created through the increased sharing of tasks 
and responsibilities. As a result of customs taking up roles in the area of security, including 
as result of the migration crisis and rising terrorism threats, additional equipment is equally 
required to fulfil protection related tasks.  

  In France, customs agents have unique and far-reaching responsibilities in the controls 
of  persons  including  touching  upon  immigration  crisis  and  terrorism  crisis.  After  the 
terrorist attacks, customs agents have been equipped with additional small arm pistols 
and  bullet-proof  vests  (in  line  with  French  Code  des  Douanes,  art  56)  to  strengthen 
their role in safety and security. In addition, new detection scanners and materials will 
be purchased. During the period 2016-2017, a total value of 45 million euros will be 
spent on new customs related equipment and detection materials386.  

Whereas customs and border administrations increasingly work towards joint procurement 
and  shared  use  of  customs  control  and  detection  equipment,  the  fieldwork  findings  point 
towards the need for additional financing needs for equipment in different Member States, 
which  demand  for  a  solution  to  be  found.  What  should  be  taken  into  account  is  that 
customs  administrations  along  the  external  border  are  also  impacted  by  their  regional 
environment,  the  direct  and  indirect  neighbourhood.  There  are  quite  different  challenges 
facing customs administrations at the external border: 

  Russia  neighbouring  countries.  (e.g.  strategic  security  threats,  political  pressure, 

unstable cooperation approach) 

  Ukraine/Moldova neighbouring countries (e.g. intensive cooperation supporting their 
  Approach  to  EU  standards,  mutual  trade  facilitation  procedures,  joint  border 

initiatives, rapidly increasing border traffic) 

  South-eastern countries (e.g. irregular immigration influx, foreign fighters) 

Data sharing inevitably raises the issue of data protection. When sharing the data with other 
governments  it  is  unknown  how  the  data  may  be  shared  afterwards.  In  terms  of  market 

386 See also: http://www.douane.gouv.fr/articles/a12879-les-armes-et-les-moyens-de-detection-de-la-douane 

417 

 
 
                                                      
security  and  border  protection  it  can  be  considered  a  risk.  No  convention  exists  which 
ensures that data being sent to other countries will only be used for customs purposes. 

In terms of cooperation, developments in trade are equally to be kept in mind, which may 
impact upon the management of our external (land) borders. One such trend that has been 
mentioned constitutes the development of e-Commerce packages from China are nowadays 
entering the EU not only any more through airplanes, but also through train, as a result of 
the Silk Road initiative (One Belt, One Road).  

  During an interview with the customs administration in one country, the concerns of 
not  keeping  up  with  these  challenges  were  mentioned:  “Currently,  80%  of  e-
Commerce coming from China arrives through a renovated railway under the China’s 
‘One  Belt,  One  Road’  project.    As  customs  administrations,  our  operations  are 
impacted and we would like to see an improved cooperation with a country like China, 
in  order  to  develop  potential  ways  to  facilitate  trade,  such  as  under  Mutual 
Recognition Agreements (MRA) or other”.  

Demands to the new Customs programme 

Below  is  an  overview  of  suggested  solutions  by the  Member  States  to  some  of  the  issues 
they experience in the field of customs and raised during our fieldwork. Where possible, the 
study provides options on how the Customs programme could contribute to these solutions. 
Member  states  and  Deloitte  also  make  the  link  with  some  successful  actions  that  are 
already in place under the current programme.  

Equipment and IT  

A  possible  solution  for  the  budgetary  problems  with  regard  to  the  procurement  of  much 
needed  equipment  and  IT  tools  is  joint  procurement  to  divide  the  purchase  price  and  the 
cost of maintenance. 

Member  States  stated  that  it  would  be  easier  and  more  efficient  to  provide  for  one  main 
budget  under  the  Customs  programme  including  equipment  and  IT  instead  of  having 
funding  under  different  sorts  of  programs.  Member  States  would  be  able  to  deal  directly 
with the budget instead of having to acquire funding under many different programmes in 
competition  with  different  ministries  and  departments.  Such  a  general  budget  would  also 
require cooperation of programmes between DG TAXUD and DG Home. 

An initiative under the Customs programme to work on more centrally developed IT systems 
could  limit  the  costs  for  Member  States  to  implement  systems  imposed  by  the  EU.  In  the 
first  place  many  member  States  wish  to  continue  working  with  their  own  developed 
systems,  but  as  oftentimes  the  integration  with  EU  systems  is  not  possible  a  compromise 
would be to adopt the same systems.  

418 

 
 
The  current  customs  program  foresees  the  ECG  meetings  (Electronic  Customs  Group). 
This meeting is considered helpful for IT purposes by the selected Member States. It is 
an  overview  of  all  UCC  program  application  (NCTS,  BTI,  customs  decision)  and  these 
topics are being discussed during meetings. Meetings often lead to crucial information 
exchange about all these IT topics  

Very useful group on UMDNS (Universal Medical Device Nomenclature System) in which 
Member States gained familiarity of the system at the very beginning which was ought 
to be extremely helpful. The group included a pilot project before deployment. 

Human resources and training  

The Customs program needs to foresee specific trainings and guidelines on the enforcement 
of  new  policies  and  IT  trainings.  The  demand  is  to  also  foresee  budget  for  this  on  the  EU 
level.   

In the new areas, customs services need to be put back to basics. Especially the new control 
tasks  on  veterinary,  sanitary  matters  are  very  complicated.  Even  the  experts  in  these 
domains struggle with it. DG SANCO organised a good training on this and they helped write 
the instructions for the customs officials. The Customs programme should definitely provide 
some framework here. Sometimes customs officials are confronted with specific legislation 
that they have no knowledge of (example where they could actually not let certain chicken 
transit for some veterinary requirements that were not met in a regulation). 

People within the Croatian customs administrations brought up the idea to hire young staff 
straight  out  of  university  for  customs  jobs.  In  Croatia,  the  administration  is  still  quite 
attractive due to a high level of unemployment in this country and young graduates could 
immediately be formed on the job.  

Cooperation and data sharing  

Some  Member  States  propose  to  include  third  countries  to  some  extent  in  the  Customs 
programme  and  to  also  develop  cooperation  in  some  other  forms  with  the  purpose  to 
strengthen  data  sharing  with  neighbouring  countries  as  they  are  the  main  source  of 
incoming traffic. Making them part of project groups, work visits and other activities could 
build a trust relationship and allow for more standardisation. It could also be the first phase 
towards the conclusion of Mutual Recognition Agreements.  

419 

 
 
 
 
 
A  reciprocal  system  to exchange  data  with third  countries  under  the  Customs  programme 
with  an  agreement  and  conditions  may  be  a  benefit  to  all  parties  for  risk  assessment 
purposes. 

A  Croatian  official had  the  idea to  set up  a  shared  database for  different  kinds  of  seizures 
and other information on customs controls on alcohol, cigarettes, IPR and money instead of 
having to bring in the information in different databases of different organizations which do 
not  work  interoperable.  Member  States  could  work  out  this  model  under  the  Customs 
programme.  

Member States are pushing a few proposals to address the issue of geographical threats to 
the border: 

The  development  of  the  expert  teams  would  be  beneficial  to  further  both  EU-wide  and 
regional  cooperation  between  national  customs  administrations  where groups  of Member 
States may be facing problems that are not faced by all Member States (CELBET  - Customs 
Eastern and South-Eastern Land Border Expert Team could be taken as a successful example 
of this approach). 

The  EU  should  also  think  about  a  regional  approach  in  the  European  border  management 
policy (e.g. border strip cooperation by unifying approaches of the EU members to the same 
neighbouring 3rd country or group of countries with similar characteristics).  

The  establishment  of  joint  training  centres  in  Member  States  can  enhance  regional 
cooperation  and  focus  on  regional  specifics  (if  located  in  border  area  they  could  enhance 
bilateral  cooperation  with  3'd  countries  and  address  their  competency  gaps  which 
negatively influence EU BPCs. 

The  establishment  of  the  Customs  focal  points  at  the  hot  spots  located  at  the  EU  land 
borders  can  offer  longer-term  exchanges  of  specialised  expertise,  address  local/regional 
challenges  and  create  a  network  supporting  BCPs  management  and  cooperation  between 
Member States. 

420 

 
 
The best practices on cooperation between customs and Border Guards are included in 
the  Guidelines  for  the  cooperation  between  Customs  Administrations  and  Border 
Guards  (Guidelines)  were  prepared  by  the  European  Commission  in  cooperation  with 
Member States.  

These guidelines were presented at the meeting of the Customs Policy Group - Deputies 
in  2013  (47th  meeting  of  the  CPG  -  D  of  25  April  2013)  and  also  in  the  Strategic 
Committee on lmmigration, Frontier and Asylum (SCIFA) of the Council of the EU on 9-L0 
April 2013. 

ln February 2015 the European Commission initiated the first step of evaluating of the 
Guidelines. Member States were asked to complete a questionnaire which was based on 
the structure of the Guidelines. The evaluation process continued with on-the-spot visits 
in  Member  States  organised  in  co-operation  among  the  Customs  Administrations, 
Border  Guards  and  the  European  Commission.  The  selection  of  MS  for  the  evaluation 
visits  took  on  board  criteria  such  as  different  border  types,  geographical  balance  and 
possible identification of best practices. 

The following MS were visited: Finland, Bulgaria, Poland, Spain and the Netherlands. An 
interim  report  summarising  the  results  of  the  questionnaires,  presented  to  Member 
States at the CPG of July 2015 (TAXUD/4L/D(2015)30L0735 of 25 June) and reports from 
the  study  visits  include  detailed  analysis  of  the  level  of  cooperation  between  Customs 
and Border Guards in EU Member States. 

The  CELBET  cooperation  team  delivered  a  number  of  recommendations  for  better 
cooperation between customs administrations and border guards.  

421 

 
 
 
 
CELBET Cooperation Team recommendations 

1)  Analysis to select best practices of synchronized checks, 28 February 2017 

- 

implementing of One-Stop and shared competences principle, where one 
trained  and  competent  authority  carries  out  the  first  line  control  on 
behalf of the other at the selected types of BCP 

-  providing  mutual  training  of  each  other's  (Customs  and  Border  Guard) 

competencies 
relevant adjustment of the BCP's infrastructure and lT systems 

- 

2)  Recommendations  to  improve  exchange  of  information  between  Customs 
Administrations (CA) and Border Guards (BG) at the BCPs during the work shifts, 
28 February 2017 

-  providing training of communication skills and team building activities 
-  establishment of the joint operational centers at BCP's 
- 
-  promoting common CA and BG goal of protection of borders and society, 

implementing access to each other's databases on mutual mode 

- 

which could prevent the competitive approach 
implementing  the  idea  of  CA  and  BG  common/joint  online  information 
system "single point" for customers 

Risk management 

Croatia  raises  the  need  for  a  mobile  task  force  to  help  when  there  is  a  (immigration, 
terrorism, other…) crisis and need for elevated controls.  

Regional  task  forces  based  on  the  expert  team  initiative  can  be  formed  which  can  react 
within  one  or  two  hours  (e.g.  support  from  Austrian,  Hungarian  or  Czech  customs  task 
forces  to  support  creation  customs  officers).  The  regional  dimension  should  be  taken  into 
account:  e.g.  Hungary  has  more  experience  with  Serbian  companies  so  they  can  help  out 
with such activities.  

For  proper  risk  management  are  needed  more  human  resources,  more  equipment  and 
faster  IT  systems  and  more  exploitation  of  existing  specialisations.  If  someone  is  familiar 
with the drug business let this person focus on this matter.  

The other idea is to benchmark best practices in other countries. Those Member States that 
have SOPs or practices in place which are effective and can easily be modelled after should 
showcase these during meetings of the Customs programme or through working visits.  

422 

 
 
 
 
 
 
More  and  better  cooperation  with  organizations  such  as  Interpol  and  Frontex  via  the 
Customs programme.  

Mapping of key obstacles and risk criteria. 

Under the current Customs programme a sub-group of Member States already meets to 
work  on  common  financial  risk  criteria.  The  sub-group  produced  a  decision  to  be  put 
forwards  certain  financial  risk  criteria  and  started  working  on  guidance  on  how  to 
implement  them.  The  subgroup  consists  of  13  delegates  plus  DG  TAXUD  and  will  be 
presented  to  other  DGs  for  comments.  Within  the  group  there  is  a  lot  of  information 
and practices exchange. Participants consider this to be a very useful group. All Member 
States  own  risk  management  and  especially  in  the  field  of  financial  risk.  DG  BUDGET 
wants to collect the same levy from all Member States and therefore there is an interest 
in  having  the  same  risk  criteria.  There  are  also  common  safety  and  security  rules. 
Because the role of customs is financial on the one hand and safety and security on the 
other. This sort of working group should continue for the future. In developing common 
financial  risk  criteria  Member  States  can  prevent  that  traders  will  cherry  pick  their 
import destination and move towards a more uniform customs environment.  

Conclusions (land border protection) 

When it comes to the protection of the external land border, the concerned Member States 
seem  to  experience  very  similar  issues,  albeit  in  different  shapes  and  forms,  which  are 
generally the result of the same overarching trends.  

The  increased  influx of people  and  goods into the EU  via  land due to  growth  in  trade  and 
immigration  has  put  customs  under  pressure  and  without  sufficient  means  to  expand  its 
own operations in proportion to the growing influx. IT systems, specialized equipment and 
qualified staff are adequate solutions to counter this issue, but for all three customs cannot 
meet budgetary nor quality requirements.  

Political developments with regard to security, the environment and market protection have 
increased customs tasks beyond its core competences. Customs is struggling to prepare its 
people  to  follow  through  with  these  measures  in  the  field  leaving  a  gap  between  legal 
theory and practical application of the law.  

It  is  clear  that  with  the  huge  amount  of  trade  flows,  customs  cannot  perform  all  controls 
and everyone agrees that good border protection depends on an effective risk management 
system.  Trusted  traders  must  be  left  alone  and  rewarded  and  customs  should  focus  its 
control based on risk criteria which will identify suspicious traders. However, such a system 
is not yet a consistency along the external border. Far too much controls are still based on 
the suspicions or experiences of customs officers, whereas the benefits of data analytics and 

423 

 
 
 
 
strategy-induced  control  criteria  are  often  still  neglected.  Where  such  standardized 
practices  are  effectively  being  applied  they  are  not  introduced  as  a  best  practice  in  other 
places.   

That lack of (data and practice) sharing demonstrates the downside of state implementation 
of an exclusive EU legal competence. Different interpretations and applications of customs 
by  Member  States  and  even  by  customs  administrations  within  the  same  Member  State 
have prevented EU customs policy from harmonizing. Cooperation and information sharing 
between  Member  States  is  also  limited due to other  legal  barriers  (data  protection), trust 
issues and the absence of a structural and supportive framework.  

Far  too  often  the  task  of  border  protection  is  left  to  the  discretion  of  Member  States 
geographically  lying  at  that border.  These Member  States  very  truly  point  out  that border 
protection  is  not  just  in  their  interest,  but  in  that  of  all  member  States  since  the  EU  is  a 
single market without internal borders. Since a border is only as strong as its weakest link, 
the rest of the EU should also see this as an incentive to help with strategy and resources.  

Case study: Air border protection 

Introduction 

This case study specifically analyses the fieldwork for external air border protection, which 
was  conducted  in  Belgium,  Hungary,  France,  Italy  and  Malta.  The  sources  for  this  case 
study  are  the  desk  research  which  was  used  to  do  the  problem  assessment  and  the 
fieldwork performed in the different Member States.  

The fieldwork visits, carried out between June and August 2017, consisted of interviews with 
different departments in the Customs administrations, interviews with stakeholders such as 
business associations and economic operators and our reports of actual field visits at Border 
Crossing Points. A full list of interviewees at EU and Member State level can be found in the 
annex to the report.  

Key issues for customs administrations 

The air border protection is facing specific key issues deriving from the national political and 
economic trends, from intrinsic specificities of air navigation, and from external influencing 
factors. 

Security and Risk analysis 

With  the  increase  of  e-Commerce  and  thus  the  booming  volume  of  parcels  entering  the 
countries  via  the  airports,  the  processing  of  available  data  to  perform  risk  analysis  is 
becoming more and more instrumental. 

In this regard, the development of e-Commerce gives rise to some difficulties in terms of risk 
analysis. The explosion of the success of e-Commerce has had a direct consequence on the 
workload of customs officers active in airports, considering the growing number of packages 

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imported via airplanes. Indeed, the characteristics of e-Commerce are the increased number 
of packages, but from lower value. 

Some  of  these  new  challenges  are  only  related  to  parcels  shipped  via  air  through  postal 
services.  As  a  matter  of  fact,  postal  services  are  imposed  less  strict  conditions  in  term  of 
data gathering and data sharing, and have less information on the entire movement of the 
good,. A concrete example is the fact that postal services are not allowed to customs-clear 
the goods, since this would incur additional costs that are incompatible with the notion of a 
public  service.    Additionally,  and  unlike  what  express  couriers  do,  postal  services  cannot 
refuse to  serve  some  consignors that  would have  been  involved  in fraudulous  activities  in 
the past. From the perspective of customs administrations responsible for guaranteeing the 
border protection, these elements represent a breach in the security processes in place. 

Another problem arising from the e-Commerce phenomenon is the absence of interlocutor. 
In  the  traditional  trade  of  goods,  the  interlocutor  is  easily  identifiable  –  it  is  the  company 
shipping  or  receiving  the  goods  –,  and  customs  administrations  can  easily  define  the 
respective 
fiscal  responsibilities.  With  e-Commerce,  this  direct  and 
straightforward link disappears. Instead, there are an outnumbered individuals to  tax, and 
the  responsibilities  are  spread  among  the  consignor,  the  e-platform,  the  courier  and  the 
recipient. As an example, the customs value is declared by the vendor, while from a fiscal 
point of view, it is the recipient who is responsible for that declared value. 

formal  and 

Linked  with  the  above  finding,  there  is  also  a  data  quality  aspect  that  is  worrying,  and 
notably the under-evaluation of the customs value. Since the respective responsibilities are 
so diffuse all along the chain and knowing that it is practically impossible to verify each and 
every  parcel,  vendors  do  not  hesitate  to  declare  lower  customs  values.  Since  vendors  are 
competing to offer the best price conditions, honest economic operators will be penalised. 

It results from previous paragraphs that with the increase of e-Commerce, it is the security 
and safety from the citizens that are at stake. The risk analysis becomes really complicated 
to  perform  effectively,  because  of  the  poor  quality  of  the  data  received.  Physical 
verifications  are  not  sufficient  to  efficiently  tackle  the  issue,  considering  the  enormous 
amount of parcels imported and exported. It can consequently be expected that smuggling 
activities  and  counterfeiting  goods  are  developing,  which  is  an  issue  for  the  safety  of  the 
consumers, for the economic wellbeing of EU based companies and for the Member States 
revenues. 

The  fieldwork  visits  have  pointed  towards  specific  challenges  in  relation  to  risk  analysis  at 
the air border: 

  When it comes to data gathering for customs, an additional difficulty in France and in 
Malta is that customs officer should also check the persons travelling via airports. This 
require  the  gathering  of  even  more  data,  as  passenger  lists  should  be  scrutinized  as 
well.  Customs  administrations  are  well-aware  of  these  challenges.  Belgian  customs 
administrations  stressed  the  importance  to  invest  in  risk  analysis  tools.  They  hired  a 
team of data  scientists to  establish  and  operate an  effective  risk  analysis  process.  In 

425 

 
 
France, further research is carried out to find out how new technologies as block-chain 
could  be  used,  in  particular  for  improving  the  quality  of  the  data  all  along  the 
movement of goods transported via airplanes. 

Equipment, IT and human resources  

The  importance  of  air  border  protection  is  not  disputed,  and  it  is  even  expected  that  this 
affirmation will become even more valid in the coming years. For customs administrations, 
this is reflecting in the growing tasks and responsibilities that are assigned to them. 

  For example, the Belgian customs administration emphasised that it is involved in 73 
different policy domains, where their attributed responsibilities often fall far beyond 
from 
the  pure  customs  domain.  These  additional 
environmental inspections to the verification of technical standards and to combatting 
the illegal traffic of cultural goods. In France and in Malta, the responsibilities assigned 
to customs officers go even further, with the endorsement of specific roles and tasks 
in  the  fields  of  immigration  and  the  fight  against  terrorism,  which  concretely  entails 
the checking of persons in the airports. 

responsibilities  expand 

Given the ever-growing responsibilities and the expanding volume of parcels, the need for 
more  human  resources  in the  customs  administration  is  a  common  trend for the Member 
States. 

Depending on the national context, the human resources aspects related to customs can be 
more or less problematic.  

  In  Malta,  a  specific  challenge  to  overcome  in  the  coming  years  will  be  the  wave  of 
retirement form older customs officer, as it will mean a lack of human resources, but 
also a knowledge drain.  

  In  Belgium,  approximately  250  customs  officials  are  protection  the  Belgian  land,  sea 
and  air  borders,  which  corresponds  to  less  than  25%  of  the  entire  Belgian  customs 
workforce. The Belgian customs administration succeeded in obtaining a 1 to 1 ratio 
for  the  number  of  hires  per  number  of  persons  leaving.  For  them,  this  observation 
illustrates  the  awareness  that  their  tasks  deserve  the  necessary  attention,  even  in  a 
context of squeezing the national budget and reducing the public workforce. 

Furthermore, data is collected, maintained, and processed via national IT systems. These IT 
systems should therefore be strong enough to support the amount of information treated, 
and allow for exchange and mutualize information with other EU Member States. 

The  quality  of  systems  is  among  others  dependent  on  frequent  updates  and  on  an  open 
dialogue and cooperation with the other national actors responsible for IT systems, be it in 
the  domain  of  justice,  police,  taxation,  etc.  The  different  administration  admitted  that 
further  progress  could  be  achieved  in  this  regard,  which  can  partially  be  explained  by  the 
difference in structure of the systems. 

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Concerning  the  exchange  of  information  Member  States  emphasized  their  preference  to 
keep  the  national-based  system,  while  ensure  a  good  interoperability  of  these  systems. 
Keeping  a  segmentation  between  systems  has  also  a  security  reason:  the  crash  of  one 
system will not impact the others. 

With regard to the impact of the  withdrawal of the UK from the Union on the different IT 
systems,  it  will  likely  be limited  in terms of  adaptations  required, but  an  issue  in  terms  of 
performance is expected by the interviewed customs administrations.  

  At the airports in France and Belgium for example, the number of customs declaration 
would increase with more than 50% compared with the current situation, which cause 
problems  for  the  system  in  place  to  process  the  entries  with  a  sufficient  level  of 
performance.  

Border protection requires dedicated equipment enabling the customs agents to effectively 
perform  their  tasks.  With  the  increase  of  air  traffic,  comprising  both  cargo  and  passenger 
flights,  and  taken  into  account  the  current  strive  for  enhanced  security,  the  authorities 
interviewed  acknowledged  the  need  not  only  for  more  equipment,  but  also  for  more 
advanced (i.e. using new technologies) equipment. On that latter element, it was indicated 
that  the  use  of  new  technologies  still  receives  pushback,  especially  coming  from  customs 
officials still preferring and used to paper based channels. 

In the long term, it is considered useful to engage with other Member States in the field of 
equipment, to secure economies of scales in the procurement, while guaranteeing the use 
of the equipment where it is the most needed. 

  The Belgian customs administration indicated that only 2% of the imported goods are 
scanned.  In  order  to  move  towards  an  increased  proportion  of  scanned  goods,  a 
preliminary study has been launched together with the Catholic University of Leuven 
to  assess  the  potential  of  microelectronics  in  this  regard.  Next  thereto,  Belgian 
customs is currently benefitting from a national ‘safety envelope’, that provides funds 
to acquire new equipment. 

Cooperation and data sharing  

Internally,  customs  administrations  unanimously  confirmed  that  the  collaboration  is  the 
strongest with police services. It can be explained by the similarity, and sometimes even the 
superposition, of the tasks performed by both bodies. Indeed, when it comes to addressing 
terrorism threats  by  controlling passengers  and their  luggage, or fighting  drugs  smuggling, 
customs  and police  are called  to  work  together.  Both policy  areas  also have  their own  EU 
programme, namely the Customs programme for Customs and FRONTEX for border guards. 
With the checking of flight passengers entering into the tasks entrusted to customs officers 
in France and Malta, this cooperation with the police is stretched to a further limit. There, 
common training also take place. 

427 

 
 
Next to the police services, airport authorities also remarked that there is more and more 
cooperation with other national agencies from a diversity of domains with which customs is 
confronted, as the agency responsible for food security for instance. 

Specifically for Belgium, and when it comes to the collaboration in airports of customs with 
other  governmental  departments,  the  customs  administration  indicated  that  a  struggling 
difference is observed compared to what is happening in seaports. Where the exchange of 
information  is  well-formalized  in  the  case  of  seaports  with  different  communication 
channels, none of this exists in airports. As pointed out earlier, the collaboration with other 
governmental  departments  is  a  necessity,  also  in  terms  of  ensuring  an  exchange  and 
mutualisation  of  data  contained  in  the  different  IT  systems.  Customs  administration 
indicated however that the  difficulty here  is  to speak  a  common  language.  As  a  matter  of 
fact, the different administrations have different interest and are consequently prioritizing 
information differently. 

In  the  domain  of  air  border  protection,  another  privileged  counterpart  are  the  postal 
operators  and  freight  forwarders.  Given  the  central  position  of  parcels  in  air  cargo,  the 
sharing  of  information  between  airport  customs,  postal  operators  and  express  couriers  is 
crucial.  It  is  a  constant  in  the  Member  States  interviewed  in  the  framework  of  this  case 
study that  regular  meeting  involving  all  the  stakeholders  active  in  the transport  of parcels 
are  taking  place.  Nevertheless,  airport  and  customs  administrations  wanted  to  raise 
awareness on what differentiate postal operators and express couriers. Postal operators are 
subject to the rules of the Universal Postal Union, which impose very few obligation in terms 
of data gathering concerning the postal flows. On the contrary, express couriers master the 
information chain from end to end. They gather information on the parcel from the initial 
consignor and have a tracking system in place, which the recipient can use until he receives 
his  package.  This  is  the  reason  why  Airports  in  some  Member  States,  as  is  the  case  for 
Belgian  and  French  airports,  even  decided  to  grant  direct  access  to  their  data  system  to 
express couriers. 

When  it  comes  to  EU  border  protection,  it  should  be  considered  that  the  quality  of  the 
system  should  be  based  on  the  criteria  of  the  weakest  link.  As  such,  having  the  most 
advanced  national  border  protection  in  place  is  not  sufficient.  Cooperation  with  other 
Member  States  must  be  at  the  forefront  of  an  effective  border  protection  strategy.  The 
cooperation can take the form of investment in shared equipment or of consensual policy 
decisions. 

There is a strong tradition in customs matters to work on a bilateral basis. Hungary could for 
example confirm that the flow of information with the neighbouring countries was fluid. 

But they agree that the bilateral approach should be in fact shifted to a multilateral one. In 
this  regard,  CELBET  is  seen  as  a  good  example  of  a  cooperation  between  Member  States 
that goes beyond the mere bilateral arrangements, what has been. 

Although the priorities and the focus can be different, there is often a close link with other 
(indirect) tax  units.  In the  majority of Member  States  interviewed,  this  link  materialises  at 

428 

 
 
the organisational level, as customs administration are part of the national tax department. 
There is a close cooperation, which could be pushed even further. 

A unanimous remark is the lack of interaction between different programmes existing at the 
EU-level,  and  in  particular  between  the  Customs  programme  and  the  Fiscalis  programme. 
Some  topics  are  nonetheless  relevant  for  both  programmes,  as  is  the  case  of  a  reflexion 
about the consequences of the growing e-Commerce. Synergies between programmes are 
thus not exploited yet to the best extent. 

Demands to the new Customs programme 

Below  is  an  overview  of  suggested  solutions  by the  Member  States  to  some  of  the  issues 
they experience in the field of customs and raised during our fieldwork. Where possible, the 
study provides options on how the Customs programme could contribute to these solutions. 
Member  states  and  Deloitte  also  make  the  link  with  some  successful  actions  that  are 
already in place under the current programme. 

Equipment and IT  

A  possible  solution  for  the  budgetary  problems  with  regard  to  the  procurement  of  much 
needed  equipment  and  IT  tools  is  joint  procurement  to  divide  the  purchase  price  and  the 
cost of maintenance. 

Member  States  stated  that  it  would  be  easier  and  more  efficient  to  provide  for  one  main 
budget  under  the  Customs  programme  including  equipment  and  IT  instead  of  having 
funding  under  different  sorts  of  programs.  Member  States  would  be  able  to  deal  directly 
with the budget instead of having to acquire funding under many different programmes in 
competition  with  different  ministries  and  departments.  Such  a  general  budget  would  also 
require cooperation of programmes between DG TAXUD and DG HOME. 

In  terms  of  equipment,  there  is  a  need  for  more  and  better  scanners.  But  next  thereto, 
Member  States  are  also  willing  to  participate  in  a  reflexion  about  how  innovative 
technology, for example drones, can help.  

An  initiative  under  the  Customs  programme  should  work  on  the  interoperability  of  IT 
systems.  In  the  first  place  many  member  States  wish  to  continue  working  with  their  own 
developed  systems,  but  as  oftentimes  the  integration  with  EU  systems  is  not  possible  a 
compromise would be to adopt the same systems.  

Human resources and training 

Due to the gradual expansion in the responsibilities of customs, there exists a clear need to 
train  customs  officers.  Demands  towards  the  Customs  programme  vary.  Some  Member 
States  rely  on  the  Customs  programme  to  have  access  to  trainings.  As  an  illustration,  in 
Malta, because of the ageing workforce and the retirement wave, they are experiencing a 
knowledge  drain.  Where  the  knowledge  was  spread  on  the  job,  by  learning  from  more 
senior staff, no academic courses exist in the country. Customs administrations in Hungary 

429 

 
 
 
also notice that knowledge and experience are currently missing. In other Member States, 
training  is  seen  as  less  important  under  the  programme.  In  France  for  instance,  the 
formation to become customs officer is long and demanding, and their focus is rather on the 
exchange of good practices.  

Cooperation and data sharing   

In order to gain visibility of what others are doing and with a view to improving the national 
frameworks, a certain interest has been shown for more exchange of good practices under 
the Customs programme. Some Member States are renowned for their expertise in specific 
domains, and it could be enriching to share that expertise. 

Expert teams are a valuable tool to share the knowledge and know-how. 

The Customs programme should support pilot projects, on condition that they are detailed 
enough and that they pursue clear objectives. Member States wanted to voice explicitly the 
conditions linked with the launch of pilot projects, as to their experience, such project can 
easily capture significant budgets. 

Not  only  the  administration  linked  with  the  launch  of  an  initiative  under  the  Customs 
programme  has  been  pin-pointed  as  really  burdensome,  but  also  the 
logistic 
implementation of such an initiative. In particular, Hungary voiced the difficulty to conduct 
each and every meeting in person, and suggested the further promotion of teleconference 
under  the  programme.  From  an  organizational  point  of  view,  this  would  also  save  an 
amount  of  budget  dedicated.  Interviewees  pointed  out  that  activities  requiring  a  physical 
presence should not be always taking place in Brussels. 

Moreover,  it  was  stressed  that  the  dissemination  of  the  results  of  programme  activities 
should be improved to ensure the national benefits. 

The Customs programme is obviously also a forum for exchanging views and experiences on 
customs-related  questions.  But  other  EU-wide  programmes  exist  in  fields  of  competences 
that are closely related to the work customs administrations have to perform. In particular, 
and  given  the  many  synergies,  the  wish  is  to  see  both  the  Customs  and  the  Fiscalis 
programmes cooperate and exchange more intensively. 

FRONTEX, the EU programme for border guards, or Europol are others of these programmes 
and agencies. Nevertheless, there are differences between those different programmes and 
their maturity. Therefore, the Customs programme could find inspiration to further develop 
itself in the other EU programme. For example, and to the contrary of what happens under 
FRONTEX,  the  Customs  programme  does  not  comprise  mutual  recognition  of  customs 
checks  across  countries.  Another  illustration  is  that,  within  FRONTEX,  there  exists  a 
possibility  to  exchange  border  guards  among  EU  Member  States  when  circumstances 
require  so,  notably  in  case  of  crises.  Adding  this  possibility  to  the  future  Customs 
programme  could  be  envisage.  Note  in  this  regard  that  Belgian  customs  administration  is 
not in favour of exchanging customs officers, as crises are typically related to some kind of 
human component, and customs does by definition not consider the traffic of people. 

430 

 
 
The  future  Customs  programme  should  not  just  inspire  itself  from  what  is  happening  in 
other EU bodies, but should also enter in contact and focus on exchanging views and best 
practices of the respective policy areas. 

The collaboration between customs officers and border guards should be intensified, both 
at  the  operational  and  policy  level.  In  this  context,  the  Member  States  authorities 
interviewed  were  of  the  opinion  that  more  data  should  be  exchanged  between  border 
guards  and  customs  officers.  At  the  moment,  the  databases  of  both  parties  are  hardly 
linked. 

The  Customs  programme  should  further  support  and  provide  a  forum  for  the  data 
exchanges  among  EU  Member  States  as  well.  The  exchange  of  information  is  currently 
organised on an ad-hoc, bilateral basis, and it is not centrally governed at the EU level. 

At  last,  in  terms  of  cooperation  with  third  countries,  the  development  of  Mutual 
Recognition Agreements with customs administrations of third countries would be deemed 
very interesting for the Member States interviewed. Hungary also noted the importance of 
strengthening the capacity building in third countries. 

Conclusions (air border protection) 

The  case  study  on  the  air  border  management,  has  provided  valuable  insights  into  the 
functioning of the Customs Union. Looking at the management of the external air borders, 
the concerned Member States experience very similar issues, albeit in different shapes and 
forms,  which  are  generally  the  result  of  the  same  overarching  trends.  This  case  study  has 
also  shown  that  a  variety  of  aspects  impact  upon  the  optimal  (uniform  and  efficient) 
management  of  the  external  air  borders  in  the  Customs  Union,  including  as  a  result  of: 
fragmented legal frameworks (specifically in the area of e-Commerce), lack of quality data, 
and differences in capacity. 

The  increased  influx  of  passengers  and  parcels  into  the  EU  via  land  due  to  growth  in  e-
Commerce and immigration has put customs under pressure and without sufficient means 
to  expand  its  own  operations  in  proportion  to  the  growing  influx.  IT  systems,  specialized 
equipment and qualified staff are adequate solutions to counter this issue, but for all three 
customs cannot meet budgetary nor quality requirements.  

Political developments with regard to security, the environment and market protection have 
increased customs tasks beyond its core competences. Customs is struggling to prepare its 
people  to  follow  through  with  these  measures  in  the  field  leaving  a  gap  between  legal 
theory and practical application of the law.  

It  is  clear  that  with  the  huge  amount  of  trade  flows,  customs  cannot  perform  all  controls 
and everyone agrees that good border protection depends on an effective risk management 
system.  Trusted  traders  must  be  left  alone  and  rewarded  and  customs  should  focus  its 
control based on risk criteria which will identify suspicious traders. However, such a system 
is not yet a consistency along the external border. Far too much controls are still based on 
the suspicions or experiences of customs officers, whereas the benefits of data analytics and 

431 

 
 
strategy-induced  control  criteria  are  often  still  neglected.  Where  such  standardized 
practices  are  effectively  being  applied  they  are  not  introduced  as  a  best  practice  in  other 
places.   

That lack of (data & practice) sharing demonstrates the downside of state implementation 
of an exclusive EU legal competence. Different interpretations and applications of customs 
by  Member  States  and  even  by  customs  administrations  within  the  same  Member  State 
have prevented EU customs policy from harmonizing. Cooperation and information sharing 
between  Member  States  is  also  limited due to other  legal  barriers  (data  protection), trust 
issues and the absence of a structural and supportive framework.  

Far  too  often  the  task  of  border  protection  is  left  to  the  discretion  of  Member  States 
geographically  lying  at  that border.  These Member  States  very  truly  point  out  that border 
protection  is  not  just  in  their  interest,  but  in  that  of  all  member  States  since  the  EU  is  a 
single market without internal borders. Since a border is only as strong as its weakest link, 
the rest of the EU should also see this as an incentive to help with strategy and resources.  

Case study: Sea border protection 

Introduction 

This case study specifically analyses the fieldwork for external sea border protection, which 
was conducted in Belgium, France, Denmark, Italy and Malta.  

The  sources  for  this  case  study  are  the  desk  research  which  was  used  to  do  the  problem 
assessment  and  the  fieldwork  performed  in  the  different  Member  States.  The  fieldwork 
consists of interviews with different departments in the customs administrations, interviews 
with stakeholders such as business associations and economic operators and our reports of 
actual  field  visits  at  Border  Crossing  Points.  A  full  list  of  interviewees  at  EU  and  Member 
State level can be found in the annex to the report.  

The  case  study  of  external  border  protection  directly  links  with  the  direct  and  indirect 
effects  of  the  problem  tree  (highlighted  here  above).  Appropriate  solutions  need  to  be 
formulated  to  answer the  drivers  which today and tomorrow  cause  the  remaining  gaps  in 
uniformity and efficiency among Customs administration leading to the mentioned effects.  

Key issues for customs administrations 

According to the different point of views collected in several Member States, it is possible to 
name  some  shared  and  repeated  issues  concerning  sea  external  border  protection  in  the 
EU. The main encompassing issue is the lack of means to tackle new challenges brought by 
the increased pressure on EU borders due to terrorism threats and migratory crisis but also 
due to the perpetual increase of cross-borders flow of goods.  This results in demands for 
equipment,  human  resources  and  the  need  to  cooperate  on  a  global  level  to  release 
pressure on border countries particularly involved in the external sea border protection.  

Security and risk analysis  

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Although  external  border  protection  has  always  been  important,  it  can  be  expected  to 
further increase due to the current threats raised by terrorism and the withdrawal of the UK 
from  the  Union.  This  will  especially  trigger  a  bigger  cooperation  between  customs 
administrations  and  the  police.  The  actual  situation  is  increasing  the  pressure  on  the 
borders  as  customs  administrations  need  to  comply  with  higher  security  standards,  as  for 
example regularly check UN and US terror lists.  

This contributes to the need of additional resources needed to deal with those challenges. 
Furthermore, although terrorism is a global issue, the withdrawal of the UK from the will, at 
least at the beginning, put more pressure on bordering countries. This should be taken into 
account while allocating budget and resources.  

The  fieldwork  visits  proved  valuable  to  gather  in-depth  insights  into  the  sea  border 
protection across the EU. 

  In terms of security, there is a lot of disparity between the different ports of Denmark 
as the country does not invest in sea border protection as much as it should, especially 
since there exists an important drug transit issue. Sweden needs to put a lot of efforts 
into  stopping  the  drugs  from  entering  to  Denmark  as  they  are  aware  of  the  lack  of 
action from the Danes. Sea border protection is obviously not a priority for Denmark. 
This is also reflected by the fact customs administrations don’t have ships, implying a 
necessary  cooperation  with  the  Marine.  But  no  investment  is  foreseen,  despite  the 
fact Denmark is composed of five hundreds kilometres of sea cost.  

What  should  be  taken  into  account  is  that  customs  administrations  along  the  external 
border  are  also 
indirect 
neighbourhood. There are quite different challenges facing customs administrations at the 
external border.  

impacted  by  their  regional  environment,  the  direct  and 

Mediterranean Member States facing Libya/Northern Africa/Iran situation may be affected 
specifically. For example, Malta and France have invested more heavily in cooperation with 
FRONTEX in that regard.  

  As a consequence of the withdrawal of the UK from the: France, the Netherlands and 
Belgium  will  be  in  front  line  to  cope  with  the  new  challenges.  France  is  for  example 
asking for good practice sharing platform in that regard and feared the consequences 
regarding  the  port  of  Calais  to  be  more  important  than  anywhere  else  concerning 
passengers flows.  

Equipment, IT and human resources   

All  Member  States  interrogated  in  the  scope  of  this  external  sea  border  case  study  raised 
the issue of lack of equipment. This refers to scanning devices necessary to detect certain 
dangerous and illegal goods which number is insufficient in certain Member States while in 
others,  it  is  a  matter  of  falling  into  disuse  where  equipment  are  no  longer  appropriate  to 
effectively detecting the actual threats facing by the authorities.  

433 

 
 
The financing of equipment needs has been raised as a particular challenge during fieldwork 
visits by all countries visited in context of this case study. 

  For example, Belgian Customs Administration is currently benefiting from the national 
“safety  envelope”  which  is  sufficient  to  acquire  new  equipment  for  the  moment. 
However,  they  pointed  out  the  necessity  to  develop  joint  acquisition  of  equipment 
and technologies with other Member States in order to ensure lower acquisition and 
selection costs in the long term.  

But equipment also refers, and this is particularly relevant regarding the scope of this case 
study  on  the  protection  of  external  sea  border,  to  the  insufficient  number  of  ships  at 
disposal of the relevant customs administrations. The interviewees pointed out the need to 
increase and develop national fleets and further proposed a joint investment on this matter. 
The lack of ship has as a consequence the need to collaborate with the marine which is not 
always done smoothly. In other member states, there is rather an issue on the allocation of 
the fleet resources than a lack of ships strictly speaking.  

  In France, despite the important investment of  EUR 12 million realised jointly by the 
European  Commission  and  France  for  the  Mediterranean  fleet,  French  customs 
administrations  don’t  have  enough  ships  at  their  disposal  to  perform  sea  border 
protection.  Indeed,  they  particularly  pointed  out  the  lack  of  disposal  of  these  ships 
which  are  mainly  used  by  FRONTEX387 due  to  the  migratory  crisis.  Correlatively, 
interviewees  also  observed  that  French  customs  officials  were  assigned  to  FRONTEX 
missions  but  whose  costs  and  formation  was  not  supported  by  FRONTEX.  French 
interviewees  were  lamenting  on  the  bad  coordination  between  FRONTEX  and  the 
authorities, both from a fleet and from a human resources perspective.   

As regards to IT, Member States stressed the importance to further develop and use IT but 
also  the  lack  of  interoperability  between  customs  administrations  and  the  different  ports. 
Although  the  majority  of  the  interviewees  acknowledged  the  necessity  to  use  new 
technologies  in  the  customs  processes,  this  is  also  in  correlation  with  human  resources 
management  as  many  customs  agents  remain  in  favour  of  an  “old  school”  paper  system 
while the new generation is trained for the changes coming in the matter.  

Member  States  indeed  pointed  out  the  insufficient  human  resources  at  their  disposal  to 
cover  the  constantly  increasing  cross-border  trade  and  customs  competences.  In  Belgium, 
only 250 customs officials are protecting the Belgian border, which correspond to less than 

387 The  European  Border  and  Coast  Guard  Agency  (the  former  FRONTEX  agency  with  expanded  tasks).  The 
former FRONTEX agency has been expanded to become the European Border and Coast Guard (EBCG) Agency 
under the European Border and Coast  Guard Regulation. The EBCG’s  main role is to help provide integrated 
border  management  at  the  external  borders.  Its  tasks  are  also  to  ensure  the  effective  management  of 
migration flows and to provide a high level of security for the EU. 

434 

 
 
                                                      
 
25% of the Belgian customs workforce. As a result, only 2% of the goods are scanned by the 
Belgian Customs Administration. 

While at some point the use of new technologies should decrease the pressure on the need 
to  hire  more  customs  agents,  this  requires,  as  already  mentioned  above,  a  staff  who  is 
indeed able to handle the IT system. Also, while new technologies may help on a detection 
of  the  threats  perspective,  those  can  only  provide  data  which  will  eventually  need  to  be 
processed  by  customs  officers.  The  same  goes  when  physical  checks  are  needed  where 
scanning devices were insufficient to clear the risks.  

In that regard, interviewees bring the attention on the importance of trainings but also on 
redefining  the  scope  and  the  purpose  of  today’s  customs  as  there  is  a  need  to  change 
customs officers’ mentality and to attract new profiles. Customs officers, by dealing with an 
increased  amount  of  services,  are  then  losing  their  status  of  experts  in  the  customs-
technical domain.   

The need for continuous and pro-active keeping up to date with new (illicit) trade trends has 
been  highlighted  during  most  fieldwork  visits.  In  specific,  it  was  mentioned  that  new 
methods of smugglers also push for new working (control) methods at the authorities. 

  The  Netherlands  dispose  of  a  skilled  team  of  divers  which  is  able  to  track  drug 
packages attached to ships entering the port. This team was relied upon by the Port of 
Antwerp, as Belgium does not dispose of such skilled team. 

Cooperation and data sharing  

Several Member States interrogated pointed out that even though customs are a key player 
to  deal  with  border  crossing  flows  of  goods,  more  collaboration  with  the  DGs  and  other 
policy areas was crucially needed. There is also a need to enhance communications between 
customs,  ports,  and  airports  facilities.  Some  interviewees  firmly  encourage  to  put  every 
stakeholders  around  the  same  table  in  order  to  find  solutions  and  build  a  transversal 
dialogue.  

Furthermore,  interviewees  proposed  also  a  tighter  cooperation  with  the  police  and  the 
marine  in  order  to  deal  efficiently  with  the  threats  coming  from  terrorism  or  to  deal  with 
the challenges arising from withdrawal of the UK from the Union.  

Customs  administrations  are  generally  keen  to  enhance  further  collaboration  between 
customs and the police. Nevertheless, as it is the case in some countries, it should be noted 
that it may be a politically sensitive topic. Indeed, it should not be interpreted as customs 
officers taking over some responsibilities of the police.    

  The  Danish  interviewees  mentioned  it  would  be  interesting  to  have  cooperation 
between the Nordic countries regarding sea border protection to bring together like-
minded  countries.  In  this  instance,  the  CELBET  best  practice  experience  was 
mentioned  in  the  context  of  the  land  border  protection.  However,  the  lack  of 
harmonization  in  their  competences  makes  it  hard  to  take  place  in  practice.  The 
problem of sovereignty is also precluding this idea to be further developed.  

435 

 
 
Demands to the new Customs programme 

Below  is  an  overview  of  suggested  solutions  by the  Member  States  to  some  of  the  issues 
they experience in the field of customs and raised during our fieldwork. Where possible, the 
study provides options on how the Customs programme could contribute to these solutions. 
Member  states  and  Deloitte  also  make  the  link  with  some  successful  actions  that  are 
already in place under the current programme.  

Equipment and IT  

One of the envisaged solution by Member States was the joint procurement of equipment 
and IT tools to divide the purchase price and the cost of maintenance. Some also stated that 
it  would  be  useful  to  establish  a  global  competency  centre  scanning  the  market  for 
technologies.  

Also,  as  the  biggest  investment  in  terms  of  sea  border  protection  are  ships,  it  would  be 
necessary  to  enhance  a  collaboration  between  marine,  national  customs  administrations 
and  also  organisms  such  as  FRONTEX  in  order  to  better  allocate  the  fleet  resources  and 

The  current  Customs  programme  foresees  the  ECG  meetings  (Electronic  Customs 
Group).  This  meeting  is  considered  helpful  for  IT  purposes  by  the  selected  Member 
States. It is an overview of all UCC programme application (NCTS, BTI, customs decision) 
and  these  topics  are  being  discussed  during  meetings.  Meetings  often  lead  to  crucial 
information exchange about all these IT topics.  

IMEC 

In  Belgium, 
focusing  on 
microelectronics)  is  performing  a  preliminary  study  in  order  to  reach  a  100%  goods 
scanned when crossing the border. This could be similarly developed at EU level.  

(Interuniversitair  Micro-Electronica  Centrum, 

PERSEUS is also a good example of the kind of shared initiative needed to enhance 
control over sea borders. It contributes to Europe’s efforts to monitor illegal migration 
and combat related crime and goods smuggling by proposing a large scale 
demonstration of a EU Maritime surveillance System of Systems, on the basis of existing 
national systems and platforms, enhancing them with innovative capabilities and 
addressing key challenges:  supporting the network created by National Contact Centres, 
FRONTEX and EMSA through increased cap.  

invest consequently.  

Human resources and training  

All Member States in scope said the key focus of Customs 2020 programme in the matter 
should  be  the  trainings.  Different  proposals  were  discussed  such  as  business  trainings  for 
customs  officers  with  a  greater  focus  on  global  security  issues,  a  creation  of  a  “Customs 

436 

 
 
 
 
Academy”, an EU certification of the profession or the introduction of a course on customs 
in Universities.  

This, in view of developing and increasing human resources for  customs administrations in 
the  EU  which  are  crucially  needed  to deal  with both  the  increasing flow  of  goods  crossing 
borders  and the growing pressure due to facing threats of migratory crisis and terrorism.  

Cooperation and Data Sharing  

Some Member States proposed that as customs are closely related to different policy areas 
(i.e.  border  guarding,  police,  FRONTEX,  etc.)  the  future  Customs  Program  should  focus  on 
exchanging  views  and  best  practices  between  them.  In  that  regard,  more  data  should  be 
exchanged which could be done by establishing a reciprocal system to exchange data, going 
beyond sole member states.  

In addition to this shared database, transversal dialogue needs to be encouraged in order to 
improve  risk  management,  allocation  of  resources  (human  and  material)  and  decision 
taking.  

Currently,  MAOC-EN  in  Lisbon  is  a  multi-countries  platform  concerning  activities  and 
missions  in  the  ocean.  Only  a  few  Member  States  are  active  in  the  high  sea  (Spain, 
France and Ireland). Member States implicated in this cooperation find bilateral action 
and mutual trust as capital importance.  

The  European  Border  and  Coast  Guard  Agency  was  launched  in  October  2016.  Its 
purpose is to closely monitor the EU's external borders and work together with member 
states to quickly identify and address any potential security threats to the EU's external 
borders. Made  up  of  1  500  officers  committed  by  EU  member  states  and  Schengen 
associated countries, it can be deployed within five working days in a crisis situation. 

The Common Information Sharing Environment (CISE) for maritime surveillance has been 
developed.  It  integrates  existing  surveillance  systems  and  networks  to  give  the 
authorities access to the information needed for missions at sea.  

Member  States  are  also  pushing  a  few  proposals  to  address  the  issue  of  geographical 
threats to the border.  

The  development  of  the  expert  teams  would  be  beneficial  to  further  both  EU-wide  and 
regional  cooperation  between  national  customs  administrations  where groups  of Member 
States  may  be  facing  problems  that  are  not  faced  by  all  Member  States  (Mediterranean 
countries,  bordering  countries  of  the  UK  for  new  issues  arising  from  its  withdrawal  of  the 
Union).  

437 

 
 
 
 
 
 
 
The  EU  should  also  think  about  a  regional  approach  in  the  European  border  management 
policy (e.g. border strip cooperation by unifying approaches of the EU members to the same 
neighbouring third country or group of countries with similar characteristics).  

The  establishment  of  joint  training  centres  in  Member  States  can  enhance  regional 
cooperation and focus on regional specifics. 

Conclusions (sea border protection) 

When it comes to the protection of the external land border, the concerned Member States 
seem  to  experience  very  similar  issues,  albeit  in  different  shapes  and  forms,  which  are 
generally the result of the same overarching trends.  

The  increased  influx of people  and  goods into the EU  via  land due to  growth  in  trade  and 
immigration  has  put  customs  under  pressure  and  without  sufficient  means  to  expand  its 
own operations in proportion to the growing influx. IT systems, specialized equipment and 
qualified staff are adequate solutions to counter this issue, but for all three customs cannot 
meet budgetary nor quality requirements.  

Political developments with regard to security, the environment and market protection have 
increased customs tasks beyond its core competences. Customs is struggling to prepare its 
people  to  follow  through  with  these  measures  in  the  field  leaving  a  gap  between  legal 
theory and practical application of the law.  

It  is  clear  that  with  the  huge  amount  of  trade  flows,  customs  cannot  perform  all  controls 
and everyone agrees that good border protection depends on an effective risk management 
system.  Trusted  traders  must  be  left  alone  and  rewarded  and  customs  should  focus  its 
control based on risk criteria which will identify suspicious traders. However, such a system 
is not yet a consistency along the external border. Far too much controls are still based on 
the suspicions or experiences of customs officers, whereas the benefits of data analytics and 
strategy-induced  control  criteria  are  often  still  neglected.  Where  such  standardized 
practices  are  effectively  being  applied  they  are  not  introduced  as  a  best  practice  in  other 
places.   

That lack of (data & practice) sharing demonstrates the downside of state implementation 
of an exclusive EU legal competence. Different interpretations and applications of customs 
by  Member  States  and  even  by  customs  administrations  within  the  same  Member  State 
have prevented EU customs policy from harmonizing. Cooperation and information sharing 
between  Member  States  is  also  limited due to other  legal  barriers  (data  protection), trust 
issues and the absence of a structural and supportive framework.  

Far  too  often  the  task  of  border  protection  is  left  to  the  discretion  of  Member  States 
geographically  lying  at  that border.  These Member  States  very  truly  point  out  that border 
protection  is  not  just  in  their  interest,  but  in  that  of  all  member  States  since  the  EU  is  a 
single market without internal borders. Since a border is only as strong as its weakest link, 
the rest of the EU should also see this as an incentive to help with strategy and resources.   

438 

 
 
Concluding remarks on land, sea, air border protection 

Through  the  in-depth  perspectives  provided  on  the  management  of  the  EU’s  sea,  air  and 
land  borders,  the  case  studies  have  provided  distinct  as  well  as  shared  features  of  border 
management in the EU.  

Overall,  it  can  be  said  that  the  case  studies  have  proved  a  valuable  tool  in  supporting  an 
integrated  and  in-depth  understanding  of  the  key  ingredients  impacting  upon  customs 
performance  across  the  EU,  and  upon  the  functioning  of  the  Customs  Union  as  a  whole. 
Through  the  thematic  analysis  of  border  protection  of  sea,  air  and  land,  the  case  studies 
pointed towards more similarities (than differences) between Member States.  

The case studies have confirmed that the efficiency of border protection and facilitation at 
the  sea,  air  or  land  borders,  differs  across  Member  States,  as  a  result  of  differences  in 
organisational  capacity,  strategic  priorities,  and  (innovative)  collaborations.  Fulfilling  a  key 
role  in  the  control  and  facilitation  role  at  the  different  borders,  the  risk  management 
processes  and  availability,  quality  and  exchange  of  data  through  up  to  date  and  inter-
operable  IT  systems  have  proved  crucial  capacities  required  to  ensure  uniformity  and 
efficiency  of  border  management.  The  current  situation,  where  risk  profiling  remains  a 
member  state  driven  exercise  across  the  EU,  continues  to  pose  risks  for  the  security  and 
protection function at the borders. 

With  regards  to  equipment,  the  case  studies  on  external  border  management  in  the  EU 
have also pointed towards a diverse of challenges faced by the customs administrations in 
different EU member states. These challenges range from the financing of ‘hard’ equipment, 
to  the  lack  of  data  on  availability  or  experience  with  equipment,  the  procurement, 
maintenance as well as (shared) use of equipment. The case studies have shown that whilst 
equipment  needs  in  the  context  of  CELBET  (land  facing  countries  in  Eastern  Europe) 
supported the insights into equipment, there is a need for additional comprehensive study 
to provide insights on the size of the equipment related problems for other member states 
and/or  sea  and  air  border  specific  perspectives.  The  changing  trade  landscape  especially 
demands  for  a  continuous  monitoring  of  equipment  availability,  also  to  respond  to  new 
types  of  crises  and  threats,  and  support  the  broadening  of  roles  and  responsibilities  of 
customs (into the security area).  

With a view to cooperation, the case studies on external border protection of land, sea and 
air,  have  pointed  to  development  of  new  ways  of  collaboration.  In-country,  customs 
administrations  are  increasingly  taking  over  tasks  and  responsibilities  with  border  agents, 
mainly in the context of land and sea border management. Reflecting the challenging new 
trade  patterns  (notably  e-Commerce),  customs  administrations  also  enter  into  innovative 
collaborations  with  economic  operators  (express  delivery  services),  sharing  sometimes 
equipment  and  exchanging  data,  to  mitigate  risks  related  to  their  control  function.    In 
addition,  customs  and  universities  are  teaming  up  to  develop  new  types  of  innovative 
equipment solutions. 

Finally, the case studies on external border management have equally pointed towards the 
importance of agile organisations, strategically focused and future-oriented perspectives, 

439 

 
 
in  order  to  prevent  crisis  situations  at  the  border  where  the  control  function  cannot  be 
carried out in an optimal manner. With a view to the fast-changing trade patterns, as well as 
logistics  and  transport  developments  linked  to  that,  a  pro-active  and  strategic  stance  is 
required  by  customs  administrations  in  order  to  secure  investments  are  done  in  the  right 
fields. An example is the fact that customs administrations have expressed that as a result of 
e-Commerce ‘they have been somewhat caught by surprise’, and do not currently avail over 
the relevant equipment tools to carry out control functions. At the same time, e-Commerce 
continues to impact mainly the air border, which may also change as result of new railway-
roads from China taking over the transport of e-Commerce packages.  

440 

 
 
 
 Interviewee list - Fieldwork 

This annex provides an overview of the different stakeholders interviewed during the fieldwork. 

Customs administrations 

Other administrations (e.g. 
agencies, etc.) 

Economic operators 

Organisations & Associations 

National 

Belgium 

5 interviewees, including onsite 
visit to the Port of Antwerpen (1 
interviewee) and Brussels Airport 
(1 interviewee) 

Croatia 

11 departments (15 
interviewees) 

Customs 2020 National Contact 
Point (1 interviewee) 
Customs 2020 Committee (1 
interviewee) 
Ministry of Economy, 
Entrepreneurship and Crafts (1 
interviewee) 

Courier and postal services (1 
interviewee) 
Freight logistics service 
provider (1 interviewee) 
Pharmaceutical company (1 
interviewee) 

Denmark 

4 departments (4 interviewees) 

Implementation Center for Customs 
(2 interviewees) 

Shipping sector (2 
interviewees) 

Estonia 

5 departments, since we do not 
have the full details regarding 
the departments covered (12 
interviewees) 

Police and border guard (1 
interviewee) 
Ministry of Finance (3 interviewees) 

Logistics service provider (2 
interviewees) 
Customs broker (1 interviewee) 
Customs IT company (1 
interviewee) 

1 Chamber of Commerce 
1 association 

1 association (1 interviewee) 

1 Chamber of Commerce (1 
interviewee) 
5 organisations/associations (6 
interviewees) 

441 

 
 
 
 
 
 
 
France 

16 departments (21 
interviewees) 

Hungary 

4 departments (8 interviewees) 

Italy 

4 departments (15 interviewees) 

Malta 

Poland 

7 departments (15 interviewees), 
including onsite visit to the 
airport 

Civil aviation department of 
Transport Malta 
Police  
Armed Forces 

7 units/departments (20 
interviewees), including onsite 
visit to two border crossing 
points 

Permanent Representation of 
Poland to the EU 

Manufacturer (1 interviewee) 
Shipping services (1 
interviewee) 

Courier and postal services (6 
interviewees) 
Transport sector (1 
interviewee) 
IT sector (3 interviewees) 

1 law firm (1 interviewee) 
Logistics service provider (1 
interviewee) 

Courier and postal service (3 
interviewees) 
Freight logistics service 
provider (2 interviewees) 

Courier and postal service (1 
interviewee) 
Logistics company (1 
interviewee) 

2 associations (2 interviewee) 

2 associations (3 interviewees) 

2 associations (3 interviewees) 

1 Chamber of Commerce (2 
interviewees) 

2 associations (5 interviewees) 

442 

 
 
 
 
 
 
 
Interviews list – Equipment 

This  annex  provides  an  overview  of  the  different  stakeholders  interviewed  for  the 
equipment assessment. 

Country 

Airport/sea port 

Status 

Airports  France 

Charles de Gaulle – Roissy 
airport 

Conducted 15/12/17 

Fort de France airport 

Under scheduling 

Italy 

Fiumicino airport 

Conducted: 19/01/18 

Malpensa airport 

Conducted: 17/01/18 

Belgium 

Brussels airport 

Conducted 22/12/17 

Liège airport 

Estonia 

Tallinn airport 

Conducted 12/01/18 

Tartu airport 

Sea 
ports 

Netherlands  Port of Amsterdam 

Conducted: 16/01/17 

Port of Rotterdam 

France 

Port of Le Havre 

Conducted 11/12/17 

Port of Marseille 

Under scheduling 

Croatia 

Port of Rijeka 

Conducted: 16/01/18 

Port of Split 

Denmark 

Port of Aarhus 

443 

 
 
 
 
 
 
 
 UCC Electronic systems 

European  Commission  Implementing  Decision  (EU)  2016/578,  which  establishes  the  Work 
Programme relating to the development and deployment of electronic systems provided for 
in  the  Union  Customs  Code  (UCC),  comprises  a  list  of  seventeen  projects  related  to  this 
development and deployment of electronic systems required for the application of the UCC. 
In accordance with the aforementioned Implementing Decision, this annex presents a high-
level  description  for  each  of  the  projects.  Furthermore,  the  key  milestones  and  envisaged 
dates of deployment are provided. 

Description of the UCC electronic systems projects 

The following paragraphs present a high-level description for each of the seventeen projects 
related to the development and deployment of the electronic systems that are required for 
the application of the Union Customs Code (UCC). 

1. UCC Registered Exporter System (REX) 

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

2. UCC Binding Tariff Information (BTI) 

The aim of this project is to provide an upgrade of the existing trans-European Binding Tariff 
Information (EBTI)-3 system and Surveillance 2 system to ensure the alignment of the EBTI-3 
system  with  the  UCC  requirements,  the  extension  of  under-surveillance-required 
declaration data, the monitoring of the compulsory BTI usage, as well as the monitoring and 
management of the BTI extended usage. The project will be implemented in two phases. 

The first phase will provide the functionality to receive the UCC required declaration dataset 
(i.e.  step  1)  as  of  1  March  2017  in  a  gradual  manner  until  the  implementation  of  the 
National  Import  Systems  upgrade  and  the  AES  project  (and  at  the  latest  by  31  December 
2020). In addition, the first phase will fulfil the obligation of BTI usage control on the basis of 
the  newly  required  declaration  dataset  and  the  alignment  with  the  customs  decisions 
process (i.e. step 2). 

The  second  phase  will  entail  the  implementation  of  the  electronic  form  for  the  BTI 
application  and  decision,  as  well  as  provide  for  economic  operators  an  EU-harmonised 
trader interface to submit the BTI application and receive the BTI decision electronically. 

444 

 
 
 
3. UCC Customs Decisions 

The  project  aims  to  harmonise  the  processes  related  to  the  application  for  a  customs 
decision, the decision-taking and the decision management through the standardisation and 
electronic  management  of  application  and  decision/authorisation  data  across  the  Union. 
This  project  is  related  to  national  and  multi-Member  State  decisions  defined  by  the  Code 
and will cover the system components developed centrally at EU level and cover integration 
with some national components (where the EU Member States opted for them). This trans-
European  system  will  facilitate  consultations  during  the  decision-taking  period,  as  well  as 
the management of the authorisation process. In particular, the system will consist of an EU 
trader portal, a customs decisions management system and a customer reference system. 

4. Direct trader access to the EIS (Uniform User Management and Digital Signature) 

The aim of this project is to provide working solutions for a direct and EU-harmonised trader 
access  as  a  service  for  the  user-to-system  interfaces  to  be  integrated  in  the  electronic 
customs systems as defined in the concrete UCC projects. The Uniform User Management 
and Digital Signature will be integrated in the portals of the concerned systems and includes 
support  for  identity,  access  and  user  management  compliant  with  the  necessary  security 
policies.  A  first  deployment  is  foreseen  together  with  the  UCC  Customs  Decisions  system. 
Afterwards, it will be made available for usage in other UCC projects, such as the UCC BTI, 
the  UCC  AEO  upgrade,  the  UCC  PoUS  system  and  potentially  also  the  UCC  Information 
Sheets for Special Procedures system. 

5. UCC Authorised Economic Operators (AEO) upgrade 

This project aims to improve business processes concerning Authorised Economic Operators 
(AEO) applications and authorisations taking into account the changes of the legal provisions 
of  the  UCC.  In  the first phase, the project  aims to  implement  major  enhancements  to the 
AEO system in view of the harmonisation to the customs decision taking procedure. In the 
second  phase,  the  project  will  introduce  the  electronic  form  of  AEO  applications  and 
decisions as well as provide for economic operators an EU-harmonised interface to submit 
the AEO application and receive the AEO decision electronically. 

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

This project aims to provide a minor upgrade of the existing Economic Operator Registration 
and Identification (EORI) system that enables the registration and identification of economic 
operators of the Union, as well as third country operators and persons other than economic 
operators that are active on customs matters in the Union. 

7. UCC Surveillance 3 

This  project  aims  to  provide  an  upgrade  of  the  Surveillance  2+  system  to  ensure  its 
alignment  with  the  UCC  requirements,  such  as  the  standard  exchange  of  information  by 
electronic  data  processing  techniques  or  the  establishment  of  adequate  functionalities 
needed  for  processing  and  analysing  the  full  surveillance  dataset  obtained  from  Member 
States.  Hence,  the  upgrade  will  include  further  data  mining  capabilities  and  reporting 

445 

 
 
functionalities,  which  will  be  made  available  to  the  European  Commission  and  the  EU 
Member States. 

8. UCC Proof of Union Status (PoUS) 

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

9. UCC New Computerised Transit System (NCTS) upgrade 

The aim of this project is to align the existing New Computerised Transit System (NCTS) with 
the new UCC requirements, such as the registration of “en route” events and the alignment 
of information exchanges with UCC data requirements, and the upgrade and development 
of interfaces with other systems. 

10. UCC Automated Export System (AES) 

This project aims to implement the UCC requirements for export and exit. It encompasses 
two  components:  the  trans-European  AES  (component  1)  and  a  national  Export  Systems 
upgrade (component 2). 

The purpose of the first component is to further develop the existing trans-European Export 
Control System in order to implement a full AES that will cover the business requirements 
for processes and data brought by the UCC, e.g. the coverage of simplified procedures, split 
exit  consignments  and  centralised  clearance  for  export.  It  is  also  envisaged  to  cover  the 
creation  of  harmonised  interfaces  with  the  Excise  Movement  and  Control  System  (EMCS) 
and  the  New  Computerised  Transit  System  (NCTS).  As  such,  the  AES  will  enable  the  full 
automation  of  the  export  procedures  and  exit  formalities.  The  AES  covers  parts  to  be 
developed both at central and national level. 

In  addition,  even  though  not  being  part  of  the  AES  scope,  but  closely  linked,  separate 
national  systems  have to be  upgraded  for  specific national  elements  related to  the  export 
and/or exit formalities (i.e. component 2). As far as these elements do not have an impact 
on the common domain for the AES, they can be covered under the second component. 

11. UCC Information Sheets (INF) for Special Procedures 

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

12. UCC Special Procedures 

This  project  aims  to  accelerate,  facilitate  and  harmonise  Special  Procedures  across  the 
Union  by  means  of  providing  common  business  process  models.  National  systems  will 
implement all UCC changes that are required for customs warehousing, end-use, temporary 
admission,  as  well  as  inward  and  outward  processing. This  project  will be  implemented  in 
two parts. A first component (national SP EXP) will provide the required national electronic 

446 

 
 
solutions for export related special procedures activities. A second component (national SP 
IMP)  will  provide  the  required  national  electronic  solutions  for  import  related  special 
procedures  activities.  Actual  implementation  of  these  projects  will  occur  through  the  UCC 
Automated Export System and the UCC National Import Systems upgrade. 

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

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

14. UCC National Import Systems upgrade 

This  project  aims  to  implement  all  process  and  data  requirements  deriving  from  the  UCC 
that relate to the import domain (and which are not covered by one of the other projects 
defined in the Work Programme). It mainly concerns the changes for the “release for free 
circulation”  procedure  (standard  procedure  +  simplifications),  but  also  covers  the  impact 
arising from the other system migrations. The project relates to the national import domain, 
covering  national  customs  declarations  processing  systems  and  other  systems  such  as 
national accountancy and payment systems. 

15. UCC Centralised Clearance for Import (CCI) 

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

16. UCC Guarantee Management (GUM) 

This project aims to assure the effective and efficient management of the different types of 
guarantees.  The  project  encompasses  two  components.  The  trans-European  system  will 
cover  the  management  of  the  comprehensive  guarantees  that  may  be  used  in  more  than 
one  EU  Member  State  and  the  monitoring  of  reference  amounts  for  each  single  customs 
declaration,  supplementary  declaration  or  an  appropriate  information  of  the  particulars 
needed  for  the  entry  in  the  accounts  for  the  existing  customs  debts  for  all  customs 
procedures  as provided for  in  the  UCC,  except  Transit that  is  handled  as  part of the  NCTS 
project  (component  1).  The  second  component  (National  Guarantee  Management)  covers 
the  upgrade  of  the  electronic  systems  existing  at  the  national  level  to  manage  the 
guarantees valid in one Member State. 

17. UCC ICS2 

The purpose of this project is to strengthen the safety and security of the supply chain for all 
modes  of  transport  (especially  air  cargo)  by  means  of  improving  data  quality,  data  filing, 

447 

 
 
data  availability  and  data  sharing  as  regards  the  entry  summary  declaration,  as  well  as 
related risk and control information (ENS+ lifecycle). The ICS2 project will also facilitate the 
collaboration amongst Member States in the process of risk analysis. It will result in a new 
architecture of the existing trans-European ICS. 

Key milestones and envisaged deployment dates 

Next to identifying the UCC electronic systems and their legal basis, the Work Programme 
has  to  determine  the  key  milestones  and  the  envisaged  dates  for  starting  operations.  In 
particular, the Work Programme is essential for establishing transitional measures related to 
electronic  systems  that  were  not  operational  by  the  date  of  the  UCC’s  application  (1  May 
2016),  as  well  as  for  defining  the  time  limits  for  deploying  these  systems.  Therefore,  the 
Work  Programme  is  necessary  to  establish  the  transitional  periods  for  the  electronic 
systems  laid  down  in  the  European  Commission  Delegated  Regulation  (EU)  2015/2446, 
European  Commission  Delegated  Regulation  (EU)  2016/341    and  European  Commission 
Implementing  Regulation  (EU)  2015/2447  .  The  time  limits  for  deploying  trans-European 
systems  should be  established  either by  means of  specific  dates  or,  where required, using 
time windows – allowing Member States to decide within those time windows when to start 
and  end  the  migration  of  their  systems  and  when  economic  operators  have  to  use  and 
connect to the new systems. 

the 

The  table  below  presents  the  key  milestones  and the  envisaged deployment  dates  for the 
seventeen projects  related  to the  development and  deployment  of the electronic  systems 
required  for  the  application  of  the  UCC.  The  key  milestone  denotes  the  date  by  which  a 
stable  version  of 
technical  specifications  shall  be  available.  For  national 
systems/components, this date will be communicated as part of the national planning. The 
date  for  starting  the  deployment  window  of  the  electronic  systems  refers  to  the  earliest 
date  for  Member  States  to  commence  the  operations  of  a  system.  The  end  date  for  the 
deployment window covers the latest date by which a system should be fully deployed and 
used by all EU Member States and economic operators. Where applicable, the end date will 
be  established  by  the  individual  countries  and  equals  the  end  of  the  transitional  period’s 
validity. In any event, this date should not be later than 31 December 2020. 

UCC electronic systems 
projects 

1. UCC Registered 
Exporter System (REX) 

2. UCC Binding Tariff 
Information (BTI) 

Key milestone 

Date for starting the 
deployment window 

Date for ending the 
deployment window 

Target date of the 
technical specifications 
= Q1 2015 

Target date of the 
technical specifications 
= Q2 2016 
(phase 1) 

Target date of the 
technical specifications 
= Q3 2016 
(phase 2) 

01/01/2017 

01/01/2017 

01/03/2017 
(phase 1 – step 1) 
01/10/2017 
(phase 1 – step 2) 

01/03/2017 
(phase 1 – step 1) 
01/10/2017 
(phase 1 – step 2) 

01/10/2018 
(phase 2) 

01/10/2018 
(phase 2) 

448 

 
 
 
 
 
UCC electronic systems 
projects 

Key milestone 

Date for starting the 
deployment window 

Date for ending the 
deployment window 

3. UCC Customs 
Decisions 

Target date of the 
technical specifications 
= Q4 2015 

02/10/2017 

02/10/2017 

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

5. UCC Authorised 
Economic Operators 
System (AEO) upgrade 

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

7. UCC Surveillance 3 

8. UCC Proof of Union 
Status (PoUS) 

Target date of the 
technical specifications 
= Q4 2015 

Target date of the 
technical specifications 
= Q1 2016 
(phase 1) 

Target date of the 
technical specifications 
= Q3 2017 
(phase 2) 

Target date of the 
technical specifications 
= Q2 2016 

Target date of the 
technical specifications 
= Q3 2016 

Target date of the 
technical specifications 
= Q1 2017 

9. UCC New 
Computerised Transit 
System (NCTS) upgrade 

Target date of the 
technical specifications 
= Q3 2017 

10. UCC Automated 
Export System (AES) 

Target date of the 
technical specifications 
= Q3 2017 
(component 1) 

Target date of the 
technical specifications 
= to be defined by MS 
(component 2) 

02/10/2017 

02/10/2017 

01/03/2018 
(phase 1) 

01/03/2018 
(phase 1) 

01/10/2019 
(phase 2) 

01/10/2019 
(phase 2) 

01/03/2018 

01/03/2018 

01/10/2018 

01/10/2018 

01/03/2019 

01/10/2019 

01/10/2019 

02/03/2020 

01/10/2019 
(component 1) 

02/03/2020 
(component 1) 

01/03/2017 
(component 2) 

02/03/2020 
(component 2) 

11. UCC Information 
Sheets (INF) for Special 
Procedures 

Target date of the 
technical specifications 
= Q1 2018 

02/03/2020 

02/03/2020 

12. UCC Special 
Procedures 

Target date of the 
technical specifications 

01/03/2017 
(component 1) 

02/03/2020 
(component 1) 

449 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
UCC electronic systems 
projects 

Key milestone 

Date for starting the 
deployment window 

Date for ending the 
deployment window 

= To be defined by MS 
(component 1 & 2) 

To be defined by MS as 
part of the national 
plan 
(component 2) 

To be defined by MS as 
part of the national 
plan 
(component 2) 

13. UCC Notification of 
arrival, presentation 
notification and 
temporary storage 

Target date of the 
technical specifications 
= To be defined by MS 

To be defined by MS as 
part of the national 
plan 

To be defined by MS as 
part of the national 
plan 

14. UCC National 
Import Systems 
upgrade 

Target date of the 
technical specifications 
= To be defined by MS 

To be defined by MS as 
part of the national 
plan 

To be defined by MS as 
part of the national 
plan 

15. UCC Centralised 
Clearance for Import 
(CCI) 

Target date of the 
technical specifications 
= Q2 2018 

01/10/2020 

Roll-out plan to be 
defined as part of the 
CCI project 
documentation 

16. UCC Guarantee 
Management (GUM) 

Target date of the 
technical specifications 
= Q2 2018 
(component 1) 

01/10/2020 
(component 1) 

01/10/2020 
(component 1) 

Target date of the 
technical specifications 
= To be defined by MS 
(component 2) 

To be defined by MS as 
part of the national 
plan 
(component 2) 

To be defined by MS as 
part of the national 
plan 
(component 2) 

17. UCC ICS 2 

Target date of the 
technical specifications 
= Q2 2018 

01/10/2020 

Roll-out plan to be 
defined as part of the 
ICS 2 project 
documentation 

450 

 
 
 
 
 
 
 
 
 
 
 
 Equipment note 

1. 

Table of Contents 

1. 

Introduction ........................................................................................................................ 453 

2.  Function of customs equipment in the functioning of the EU Customs Union .................. 458 

3.  Our approach and methodology ......................................................................................... 460 

1.1 

Selection of countries ................................................................................................... 460 

1.2  Needs assessment ........................................................................................................ 462 

1.3 

Extrapolation of the needs ........................................................................................... 463 

4.  Relevant trends impacting upon customs equipment ....................................................... 468 

5.  Problem assessment and findings: challenges faced in customs equipment .................... 472 

1.4  Diversity in customs risk management approaches .................................................... 474 

1.5  Baseline, data and insights on customs equipment at EU borders ............................. 477 

1.6  Human  and  organisation  resources  to  ensure  procurement  and  use  of  the  customs 
equipment ............................................................................................................................... 478 

1.7 

Financial resources to purchase and maintain equipment .......................................... 480 

1.8  Research, innovation and collaboration ...................................................................... 485 

6.  Conclusions ......................................................................................................................... 488 

Annex A - In focus: Budget for equipment and equipment needs for 2021-2028 ..................... 491 

Annex B – Interviews overview ................................................................................................... 498 

Annex C – Clusters of countries .................................................................................................. 499 

451 

 
 
 
  
 
 
Table of Figures 

Figure 1: Our approach .......................................................................................................... 460 

Figure 2: Clustering of EU Member States based on traffic by air and sea (in tonnes) 

 in 2016 ................................................................................................................................... 465 

Figure 3: To what extent customs equipment poses a challenge? ....................................... 472 

Figure 4: EU budget revenue from customs duties (100%), 2016 (EUR million) ................... 483 

Figure 5 – Funding gap for equipment in the EU for the period 2021-2015 (EUR million) ... 493 

Figure  6:  Overview  of  the  budget  allocated  to  equipment  and  additional  budget  needed  (on 
average, per clusters of countries) ........................................................................................ 496 

Table of Tables 

Table 1: Sample of countries ................................................................................................. 461 

Table 2: Equipment categories .............................................................................................. 462 

Table 3: Budget allocated to equipment on average per cluster of countries (2021-2028) (in EUR 
million) ................................................................................................................................... 492 

Table 4: Additional budget needed for customs equipment on average per cluster of countries 
(2021-2028) (in million EUR) .................................................................................................. 493 

Table 5: Status of Interviews for collecting information on equipment needs ..................... 498 

452 

 
 
 
 
 
 
1.Introduction 

Customs  border  services  are  positioned  strategically  and  geographically  to 
facilitate trade and protect the borders of the Single Market.  In the context 
of  global  trade  developments,  including  risks  associated  with  it,  the  past 
years  have  shown  increased  emphasis  on  securing  performing  customs 
controls  at  the  external  land,  sea  and  air  borders.  Customs  administrations 
are  called  upon  to  employ  their  resources  to,  inter  alia,  combat  fraud  and 
illicit trade (e.g. tobacco smuggling), manage migration challenges (e.g. visa 
control)  and  protect  citizens  from  threats  (e.g.  terrorism  or  risks  to  health 
and safety).  

The  European  Commission  has  acknowledged  that  the  importance  of  a 
functioning  customs  risk  management  framework  relies  on  data  analysis 
through  (IT)  technology  and  risk  verification  through  modern  customs 
control equipment.388  

Customs  controls  are  defined  as  “Specific  acts  performed  by  the  customs 
authorities  in  order  to  ensure  compliance  with  the  customs  legislation  and 
other  legislation  governing  the  entry,  exit,  transit,  movement,  storage  and 
end-use  of  goods  moved  between  the  customs  territory  of  the  Union  and 
countries  or  territories  outside  that  territory,  and  the  presence  and 
movement within the customs territory of the Union of non-Union goods and 
goods  placed  under  the  end-use  procedure”389.  Customs  control  equipment 
consists  of  a  set  technical  tools  and  related  technology  allowing  detection 
and control of goods or substances crossing the external borders of the EU.  

An important constraint that stands in the way of realising that ambition are 
the resources, capacity and cooperation needed by Member States to ensure 
customs controls through availability and appropriate use of customs border 
equipment. 

The purpose of this note is as follows: 

388 COM (2012) 793 final  – Communication from the Commission to the European Parliament, the  Council and the European 
Economic and Social Committee on Customs Risk Management and Security of the Supply Chain.  

389 European  Court  of  Auditors,  Special  Report  n°  2017-19  :  Import  procedures:  shortcomings  in  the  legal 
framework and an ineffective implementation impact the financial interests of the EU, Luxembourg, 2017. 

453 

 
 
                                                      
To identify and assess, to the extent possible, the key challenges 
of  customs  administrations  in  EU  Member  States  in  relation  to 
border  equipment,  which  may  stand  in  the  way  of  efficient  and 
uniform  customs  controls  at  EU  external  borders,  negatively 
impacting  upon  the  functioning  of  the  EU  Customs  Union  as  a 
whole. 

A  direct  effect  of  the  above  capacity  and  cooperation  challenges  related  to 
border  equipment  is  that  customs  administrations  are  not  able  to  carry  out 
their  customs  risk  management  processes  in  an  optimal  way.  Whereas  this 
affects  directly  upon  the  performance  at  organisation  level,  the  challenges 
around  border  equipment  equally  affect  negatively  upon  broader  EU  and 
Government  policy  objectives  in  the  area  of  financial  budget  collection, 
citizen protection and business competitiveness.   

Customs  administrations  require  equipment  to  scan  cargo  and  carry  out 
physical checks in the process of customs control (or ‘border equipment’), as 
part  of  their  broader  risk  management  process  and  in  order  to  enforce 
Customs Union rules.  

The  use  of  sophisticated  and  up  to  date  equipment  is  necessary  to  enable 
the  customs  administrations  to  ensure  safety  and  security  of  EU  citizens, 
protect  financial  budgets  of  the  EU  and  national  governments,  and  support 
competitive business environments. Hence, border equipment is an essential 
instrument  for  customs  administrations  to  fulfil  their  strategic  function  at 
national and EU-levels, and fulfil their broadened package of tasks. With the 
trend towards integrated  border  management, especially relevant in the 
management  of  land  (and  air  and  sea)  border,  increased  sharing  of  tasks 
and  responsibilities  equally  means  a  wider  area  of  work  for  customs.  As  a 
result,  customs  are  frequently  taking  up  roles  in  the  area  of  security, 
including as result of the migration crisis and rising terrorism threats.  

In  this  context,  it  is  important  to  emphasize  that  border  equipment  is 
essentially  an  instrument  in  the  key  processes  underpinning  customs 
administrations:  customs 
legislative 
perspective,  the  Common  Customs  Risk  Management  Framework  (CRMF)  is 
covered by article 46 UCC, which recognises the need for an equivalent level 
of protection in customs control through a harmonised approach. It seeks to 
find  the  proper  balance  between  customs  controls  and  the  facilitation  of 
legitimate trade. Customs controls need to take place based on common risk 

risk  management.  From  a 

454 

 
 
 
assessment criteria and real-time exchange of risk information. Furthermore, 
priority  must  be  given  to  specific  areas  with  increased  levels  of  risk.  The 
purpose  of  the  mechanism  is  to  ensure  that  proper  information  about 
identified  risks  is  distributed  as  quickly  as  possible  to  operational  customs 
office  in  all  Member  States.  The  sooner  risk  assessment  of  supply  chain 
goods movement can be undertaken, the better control requirements can be 
tailored to the risk identified.390  

In  itself  subject  to  on-going  discussions  towards  harmonization  and 
improved capacity, customs risk management relies on high quality data to 
be  processed  and  exchanged  through  up  to  date  and  interoperable  IT 
systems, which then entitles a proper exploitation for the risk assessment to 
support the intra-EU and extra-EU of goods movements.  

With a view to the essential role of equipment in customs risk management 
processes,  and  the  fast  changing  nature  of  risks  and  threats  managed  by 
customs,  the  optimal  use  and  availability  of  border  equipment  by  customs 
administrations in the EU is essential for customs to carry out their tasks and 
support the functioning of the EU as a whole. 

Across the EU, customs administrations present unequal capacities, including 
in  terms  of  equipment  (see  first  driver  presented  in  the  problem  tree  – 
chapter  3  of  the  main  body  of  the  report).  Consequently,  customs 
administrations  are  fulfilling  their  tasks  at  national  level  in  different  ways, 
preventing the Customs Union from reaching its full potential. 

The challenge of unequal capacity among Customs administrations in term of 
equipment  has  additional  causes,  beside  the  capacity  of  Member  States  to 
finance the procurement of equipment. Equipment fulfils an essential role in 
effective  border  risk  management,  but  it  comes  towards  the  end  of  the 
process.  Human  resources,  (risk  management)  processes,  innovation  and 
data  analysis,  inter  alia,  also  play  a  crucial  role  in  effective  border 
management in the Customs Union.  

In order to identify the main capacity needs of Member States in the area of 
border  equipment,  Deloitte  was  requested  to  provide  insights  through  a 
focused  equipment  assessment.  The  outcomes  of  the  combined  desk 
research, interviews and surveys with Member States can serve as valuable 
inputs  for  a  discussion  amongst  the  European  Commission  and  Member 

390  The  measures:  Customs  Risk  Management  Framework  (CRMF)  on:  https://ec.europa.eu/taxation_customs/general-
information-customs/customs-risk-management/measures-customs-risk-management-framework-crmf_en 

455 

 
 
                                                      
States  with  a  view  to  considering  possible  EU  level  financial  support  in  the 
area of border equipment.  

Whereas  insights  into  land-related  border  equipment  had  been  captured  as 
result  of  the  CELBET  expert  team  the  Commission  requested  Deloitte  to 
focus its analysis on the financial needs for equipment in the context of sea 
and air borders.  

The  CELBET  expert  group  was  established  for  an  18-month  period  with  a 
budget  of  EUR  850  000.  Its  aim  is  to  strengthen  customs  relations  and 
enhance operational cooperation amongst the countries part of the group in 
order to perform more efficient and uniform controls at the EU  Eastern and 
South-Eastern land border. One of the topics covered by this expert group is 
equipment and procurement. The group has conducted a thorough inventory 
and  mapping  of  available  and  currently  deployed  control  and  detection 
equipment  in  the  eleven  Member  States  part  of  the  group 391.  The  expert 
group notably concluded to a lack of technical customs control equipment at 
some external EU border crossing points.  

Based on a risks and threats analysis of EU Eastern and South-Eastern land 
borders,  CELBET  expert  group  concluded  that  the  border  crossing  points 
should be equipped with tailored set of technical appliances amounting to an 
estimated  EUR  182  to  213  million,  in  the  minimal  and  optimal  scenarios 
respectively.  These  figures  represent  only  the  investment  gap  necessary  to 
provide the border crossing points at the Eastern and Southern-Eastern land 
border  of  the  EU  with  the  necessary  equipment.  Maintenance  and 
replacement costs are not included in the estimation. 

Due  to  the  scope  of  an  impact  assessment  as  well  as  time  and  budget 
constraints,  the  study  team  has  not  conducted  such  a  full  gap  analysis  for 
the  sea  and  air  borders.  Nevertheless,  we  conducted  a  robust  analysis  on 
the  equipment  needs  on  these  borders  based  on  the  data  collected  during 
our  project  (desk  research,  survey,  case  studies),  and  additional  data 
collection activities (phone interviews focusing on equipment).  

The  following  subsection  presents  our  approach  to  find  and  present  robust 
findings on  the challenges faced by EU Member States in  relation to border 
equipment  at  their  sea  and  air  borders.  Departing  from  a  shared 
understanding  on  the  definition  and  role  of  customs  equipment  in  the  EU, 

391 The  participant  Member  States  are:  Bulgaria,  Croatia,  Estonia,  Finland,  Greece,  Hungary,  Latvia,  Lithuania, 
Poland, Romania, and Slovakia. 

456 

 
 
                                                      
key trends impacting upon the availability and use of customs equipment are 
explored.  This  chapter  then  provides  a  more  in-depth  assessment  of  the 
challenges faced by customs administrations, assessing thereby the findings 
from  our  methodological  approach  containing  strategic  interviews,  desk 
research and a survey held. The conclusions offer recommendations towards 
possible  EU 
customs 
administrations in customs controls and specifically customs equipment.  

support  programme 

(financial) 

support 

to 

457 

 
 
2. Function of customs equipment in the 
functioning of the EU Customs Union 

Considering  ‘Customs  Cooperation’,  the  fact  that  customs  administrations 
differ  in  financial  and  institutional  capacity  to  perform,  has  resulted  in  the 
situation  whereby  the  functioning  of  the  EU  Customs  Union  and  Single 
Market is not optimal. Border equipment used for customs purposes are an 
customs 
important  aspect  determining 
administrations  as  essential  instruments  of  customs  risk  management 
processes.  Modernization  of  the  customs  controls  function  demands 
investments  in  the  customs  risk  management  process  as  a  whole,  whilst 
placing specific emphasis on data analysis and equipment.  

the  performance  of 

the 

In  this  context,  Member  States  and  economic  operators  expressed  their 
concern  that  (differences  in)  the  availability  and  use  of  customs  scanning 
and  control  equipment  in  EU  Member  States  contributes  to  the  lack  of 
uniformity and efficiency in customs processes.  

When  referring  to  customs  equipment,  the  following  categorisation  is 
used392:  

  Radiation Detection and nuclide identification equipment; 
  Equipment for field analysis of samples; 
  Non-intrusive inspection technologies; 
  Technologies indicating hidden objects on humans; 
  Handheld Search tools. 

As  mentioned  in  interviews  with  Member  States:  ‘When  customs  checks  at 
imports  are  lacking  due  to  outdated  equipment  materials,  or  lacking  post-
clearance  controls,  businesses  may  exploit  the  weakest  link  and  seek 
opportunities  to  avoid  controls  so  as  to  import  illicit  tobacco  or  counterfeit 
products or get customs or valuation fraud pass through customs unnoticed’.  

392 Categorization based on inputs received from European Commission (DG TAXUDd) and based on Customs2020 
programme outputs (CELBET) 

458 

 
 
                                                      
Due  to  the  challenges  faced,  indirect  effects,  such  as  illicit  trade  and  tax 
fraud, pose risks to citizens, impact negatively on business competitiveness 
and have harmful impacts on Government and EU budgets.  

459 

 
 
 
3.Our approach and methodology 

Our approach to assess the current situation at the EU borders (sea and air) 
as well as the financial needs of the Member States as far as light equipment 
at  border  crossing  points  is  concerned  consists  of  three  main  steps  as 
illustrated in the figure below. 

Figure 50: Our approach 

Source: Deloitte 

1.1 Selection of countries 
The extent to which the (un)availability of customs control equipment differs 
per EU Member State is linked to the volumes of goods crossing the external 
border(s)  and  geographical  location  and  international  trade  channels  (land, 
sea/waterways,  air)  as  well  as  financial  resources  available.  While  volume 
and types of goods are not the only drivers for equipment needs, we based 
our  assessment  on  primary  data  collected  from  a  selected  number  of 
Member  States  (see  below)  and  complemented  with  Eurostat  statistics  on 
trade and volume of goods to allow extrapolation of data at EU level.  

For  time  and  budget  reasons,  it  was  not  possible  to  assess  all  the  EU  28 
countries. Therefore, we based our analysis on a  sample  of  EU  countries 
thoroughly  selected  in  accordance  with  the  Commission.  We  selected  our 
sample based on the following criteria: 

  Geographical balance; 
  Number of harbours and airports; 
  Flows of commercial goods.  

460 

 
 
The  final  list  of  countries  and  entry  points  selected  for  our  assessment  is 
provided below: 

Member State 

Air 

France 

Italy  

Belgium 

Estonia 

Sea 

Netherlands 

France 

Croatia 

Denmark 

Source: Deloitte  

Table 39: Sample of countries 

Entry points 
  Charles de Gaulle airport 
  Fort de France airport 
  Fiumicino airport 
  Malpensa airport 

  Brussels airport 
  Liège airport 

  Tallinn airport 
  Tartu airport 

  Port of Rotterdam 
  Port of Amsterdam 

  Port of Le Havre 
  Port of Marseille 
  Port of Rijeka 
  Port of Split 

  Port of Esbjerg  
  Port of Copenhagen 

We hence targeted seven countries in total. We assessed up to two airports 
and  two  ports  in  the  countries  selected.  The  final  selection  of  airports  and 
ports was decided in collaboration with TAXUD and the contact person from 
the customs administrations in each of the countries. 

It  is  noteworthy  to  mention  that  Denmark  allocates  the  equipment  to  its 
different  seaports  and  airports  on  a  need  basis  (i.e.  based  on  their 
assessment,  Danish  customs  administration  foresee  the  workload  of  its 
border crossing points, and allocates the necessary equipment to cope with 
it).  Therefore,  the  data  provided  during  the  interviews  referred  to  the 
national level, and not to a seaport in particular. 

It was not possible to conduct the interviews with Fort de France and Port de 
Marseille due to a lack of response by the officers in charge of equipment in 
the two emplacements concerned. 

461 

 
 
 
 
1.2 Needs assessment 
Based  on  the  CELBET  study  as  well  as  in  the  Commission’s  expertise  and 
validation,  we  have  identified  the  five  equipment  groups  listed  below  on 
which to focus our analysis.  

Table 40: Equipment categories 

Subcategory 
Radiological and 
Nuclear Detection 

Category 

Radiation 
Detection and 
nuclide 
identification 
equipment 

Non-intrusive 
inspection 
technologies 

X-Ray scanners  with 
High energy  

Examples 

  Personal Radiation 

Monitor/detector (PRM) 

  Handheld Radiation detector  
Isotope Identification Device 
 
(RIID) 

  Radiation Portal Monitor 

(RPM) 

  Spectrometric Portal Monitor 
for isotope identification 
(SPM) 

  Containers, trucks, rail 

wagons 

X-ray scanner  with 
low energy  

X-ray backscatter 

Trace detection 
based on Ion 
Mobility 
Spectrometry (IMS) 

Canine trace 
detection 
Analysis of Samples 
mainly to identify  
organic  materials, 
metals and alloys 
X-ray backscatter 
portal 
Body scanner based 
on  terahertz or  
millimetre wave 
Personal hand tools 

Devices 

  Pallets,boxes and parcels 
  Passenger baggage  

  Containers, trucks, vehicles  
  Portable equipment to 

screen for traces of specific 
threat materials 

  Applied to a range of risks 
on small and larger objects 

Infrared  spectroscopy 

  Chemical colorimetric tests 
  Raman spectroscopy 
 
  X-ray fluorescence 
  Mainly used in airports to 
detect  hidden objects on 
humans (drugs, explosives, 
cash)     

  Pocket tools 
  Mechanics tool kit 
  Telescoping mirror 
  Endoscope 

Equipment for  
field analysis of 
samples 

Technologies 
indicating  
hidden objects 
on humans 

Handheld Search 
tools 

462 

 
 
 
 
 
 
 
 
 
 
 
Category 

Subcategory 

Examples 

  Stationary or handed metal 

detector 

  Cameras to checking the 
under-side of vehicles 

  Ultrasonic device 
  Density meter 
  Underwater search (divers) 
  Other 

Other 

Source: European Commission 

We  identified  the  equipment  available  for  each  of  these  categories  in  the 
ports and airports  of each of the countries selected in our sample. In order 
to gather these data, we conducted a detailed desk research. We completed 
our  research  with  two  surveys  targeting  the  customs  administrations,  case 
studies, and additional phone interviews with airports and ports in a selected 
number of countries. We identified the relevant person to interview through 
the  contact  person  for  our  fieldwork.  We  prepared  for  those  interviews  an 
interview guide including specific questions targeting our data needs.  

Building  up  on  the  data  collected  during  our  fieldwork  in  these  Member 
States  and  subsequently  presented  in  our  case  studies,  we  identified  the 
data  gap  in  the  information  collected.  In  this  sense,  we  singled  out  those 
Member  States  where  we  were  still  lacking  the  necessary  information  to 
perform our assessment on equipment. 

For this purpose, we summarised for each country the following data points 
(where available):  

  Current  equipment  available  at  the  air  and  sea  borders  based  on  the 

categorisation provided above; 

  Estimated  costs  of  the  acquisition  and  maintenance  for  existing 

equipment; 

  Additional  equipment  needed  at  the  air  and  sea  border  (i.e.  the 

necessary equipment to reach an optimal situation); 

  Estimated  costs  for  the  acquisition  and  maintenance  of  additional 

equipment to reach an optimal scenario (on a yearly basis). 

1.3 Extrapolation of the needs 
Once concluded the data collection, we had a good overview of the needs of 
the selected ports and airports. The next step consisted on the extrapolation 
of the needs at EU level. The exercise is a crucial step in our methodology, 
and is divided in the three following phases: 

463 

 
 
Phase 1: Clustering of the Member States 

After  a  preliminary  assessment  of  the  data  collected  through  the  data 
collection activities and desk research, the study team identified the missing 
data.  It  was  noticed  that  not  all  Member  States  provided  accurate  data 
during  the  interviews  focusing  on  equipment 393 .  In  addition,  the  surveys 
provided  interesting  insights  of  some  countries,  but  failed  to  bring  an 
overview on all Member States394. 

As a solution, the study team worked with clusters of countries based on the 
flows of goods handled both by air and by sea395. At its core, cluster analysis 
(also  called  segmentation  analysis  or  taxonomy  analysis)  tries  to  identify 
homogenous groups of cases if the grouping is not previously known. In this 
case, this approach enabled us to group Member States (and available data 
points) to extrapolate subsequently the data collected for one Member State 
in particular to the rest of the countries part of its cluster. 

Due  to  a  lack  of  more  accurate  and  comparable  data  (i.e.  for  both  air  and 
sea traffic), the study team decided to use available statistics on the overall 
volume  of  goods  handled  by  the  Member  States.  Although  customs 
administrations  do  not  process  all  of  the  goods  included  in  those  statistics, 
we  assumed  that  there  is  a  correlation  between  the  total  volume  of  goods 
handled  by  a  country  and  the  proportion  of  goods  requiring  a  customs 
intervention.  

The figure below provides a visual representation of the clustering used. 

393 For a complete overview on the interviews conducted, please see Annex F.2. 

394 We received 25 replies for the general survey, and 23 for the equipment-related survey.  

395 See Eurostat data :  

Air: http://ec.europa.eu/eurostat/statistics-explained/index.php/Air_transport_statistics 

Sea:http://ec.europa.eu/eurostat/statistics-explained/index.php/Maritime_transport_statistics_-
_short_sea_shipping_of_goods 

464 

 
 
                                                      
Figure 51: Clustering of EU Member States based on traffic by air and sea (in tonnes) in 2016 

Source: Deloitte estimations from Eurostat statistics 

.

465 

GermanyFranceUnited KingdomNetherlandsBelgiumItalyLuxembourgSpainAustriaDenmarkFinlandSwedenIrelandPortugalPolandCzech RepublicHungaryGreeceRomaniaBulgariaCyprusSlovakiaLatviaMaltaLithuaniaEstoniaSloveniaCroatia0100 000200 000300 000400 000500 000600 0001101001 000Traffic by air (tonnes)Traffic by sea (tonnes) 
 
 
 
The  table  with  the  detailed  statistics  used  for  the  clustering  is  provided  in 
Annex F.3.  

It  is  noteworthy  to  mention  that  the  data  provided  by  Eurostat  was  not 
always  complete.  In  particular,  the  amount  of  goods  handled  by  sea  by 
Denmark  and  Greece  in  2016  was  not  available.  The  study  team  therefore 
calculated the projection for that year for the two countries mentioned based 
on the goods handled during the previous years. 

its 

Despite 
limitation,  the  clustering  presented  above  allowed  the 
identification  of  four  main  groups  of  countries,  which  were  used  for 
extrapolation  of  results  at  EU  level.  The  first  group  of  countries  includes 
those  Member  States  with  higher  volumes  of  goods  processed  both  for  air 
and  sea  traffic  (i.e.  those  countries  in  the  upper  left  area  of  the  figure). 
Cluster 1 is thus composed by: Belgium, France, Germany, Italy, Spain, the 
Netherlands  and  the  United  Kingdom 396.  The  second  group  includes  those 
Member  States  with  volume  of  goods  via  sea  traffic  below  200 000  tonnes 
per  years  and/or  volume  of  goods  via  air  traffic  below  1  000  tonnes  per 
year.  Cluster  2  is  thus  composed  by:  Austria,  Denmark,  Finland,  Ireland, 
Luxembourg, Poland, Portugal and Sweden. The third cluster includes those 
Member  States  volume  of  goods  via  sea  traffic  below  200 000  tonnes  per 
years  and/or  volume  of  goods  via  air  traffic  below  100  tonnes  per  year. 
Cluster  3  is  thus  composed  by:  Bulgaria,  Cyprus,  Czech  Republic,  Estonia, 
Greece,  Hungary,  Latvia,  Lithuania,  Malta,  Romania  and  Slovakia.  Finally, 
the fourth cluster includes those Member States with very limited volumes of 
goods  via  air  and  sea  traffic  per  year  (less  than  100 000  tonnes  and  10 
tonnes  per  year  respectively).  Cluster  4  is  thus  composed  by:  Croatia  and 
Slovenia.  

Phase 2: Budget allocated to equipment and equipment needs 

Based  on  our  phone  interviews  and  the  results  from  the  survey,  we  first 
estimated  the  budget  allocated  to  the  different  categories  of  equipment 
described above. In addition, we also invited Member States to share with us 
the  lifecycle  of  their  equipment.  Lifecycle  has  an  impact  on  the  budget,  as 
the equipment, once used and obsolete, needs to be renovated. According to 
the  results  of  the  survey,  the  lifecycle  estimated  for  the  five  categories  of 
equipment  ranges  from  2  to  5  years  depending  on  the  category,  up  to  10 
years for some elements, such as X-Ray scanners 

396 While  included  in  the  cluster  composition,  the  UK  is  not  used  to  elaborate  the  parameters  for  estimation  of 
equipment needs.  

466 

 
 
                                                      
Combining the data from our interviews with the results from the survey, we 
managed  to  have  an  overview  on  the  costs  of  the  acquisition  and 
maintenance of the equipment in 16 Member States. Nevertheless, the data 
collected  was  not  always  accurate  as  the  Member  States  provided 
themselves estimations or ranges. 

In  addition,  we  also  required  Member  States  to  provide  us  with  an 
estimation  of  the  budget  needed  to  purchase  additional  equipment  that 
would be necessary in an optimal scenario. These amounts would represent 
the  additional  budget  necessary  to  reach  an  optimal  or  anyway  improved 
situation. 

We also mapped the main trends having an impact on equipment as well as 
the future needs of the Member States of equipment. This second set of data 
enabled us to foresee how the budget allocated to equipment would be used 
in the coming years.  

Lastly,  we  calculated  the  projections  for  both  the  budget  allocated  to 
equipment  as  well  as  the  additional  budget  for  equipment  necessary  to 
respond  to  the  needs  of  the  Member  States  for  the  coming  years  (i.e.  the 
period 2021-2025). 

Phase 3: Extrapolation  

Once identified the costs of equipment, we extrapolated the data obtained to 
the  rest  of  countries  belonging  to  the  same  cluster.  In  this  case,  we 
presumed  that  the  countries  handling  a  similar  range  of  goods,  would 
allocate  a  comparable  amount  of  budget  to  equipment.  Nevertheless, 
although  a  group  of  countries  handle  similar  amounts  of  goods,  they  still 
remain different. We therefore ensured that the extrapolation was conducted 
taking into account the specific characteristics of the countries within a given 
cluster. 

467 

 
 
4. Relevant trends impacting upon customs 

equipment 

risk  patterns  put 

Looking at the external trends, our assessment confirmed that global trends 
increased  pressure  on  customs 
and  changing 
administrations  to  conduct  efficient  and  uniform  customs  controls  including 
through  use  of  high-quality 
the 
professionalization  of  customs  risk  management  processes,  as  result  of 
technological and data-analysis developments, increasingly calls for renewed 
perspectives  on  the  role  of  equipment  in  customs  controls  functions;  from 
general risk-verification tools, to specific risk-verification instruments.  

customs  equipment.  Second, 

The above can be illustrated through the following specific trends: 

The principle  ‘Assess in advance,  control where  required’, underpinning the EU Strategy and 
Action  Plan  on  Customs  Risk  Management  describes  well  the  changing  function  of  customs 
equipment397.  The  principle  underlines  the  fact  that  customs  controls  and  the  use  of  border 
equipment are the last step of a risk assessment process that is increasingly about identifying 
risks  as  early  as  possible  in  the  customs  risk  management  process.  Here,  the  trend  towards 
employment of equipment for ‘specific’ risks identified, rather than for general risk detention is 
visible (see chapter on ‘challenges faced’). 

Indeed, the corner stone of risk management is the receipt of high quality data to be processed 
and exchanged through up to date and inter-operable IT systems, which then entitles a proper 
exploitation for the risk assessment to support the intra-EU and extra-EU of goods movements. 
Based  on  availability  of  data,  customs  administrations  increasingly  employ  equipment  for 
targeted  detection  interventions.  This,  in  turn,  demands  for  more  and  more  customised 
equipment,  whereby  providers  of  customs  equipment  are  challenged  through  specified 
procurement conditions. However, one limitation there  is that the detection technologies can 
only be used in compliance with data protection frameworks, such as the new EU General Data 
Protection Regulation (GDPR). 

For  customs  administrations,  the  challenge  of  doing  more  –  often  with  less  resources  has  a 
dual  effect  on  customs  equipment;  on  the  one  hand  this  raises  financial  capacity  challenges 

397 EU Strategy and Action Plan on Customs Risk Management  (COM/2014 (527) 

468 

 
 
                                                      
(see explained below), on the other hand the trend demands the investigation into innovative 
and  collaborative  solutions  supporting  controls  at  the  external  borders.  As  a  result,  customs 
equipment  needs  to  be  increasingly  multi-usable  and  mobile;  Member  States  are  seeking 
efficiency  enhancing  models  to  share  the  available  equipment  across  the  country  and  across 
functions (border police, customs etc.).  

  For  example,  in  The  Netherlands,  border  equipment  is  increasingly 
made  available  for  multi-purpose  and  on-demand  use  by  different 
institutions.  The  mobility  function  of  equipment  is  supported  through 
‘facilitating sites’ across the country398. 

  For  example,  Italian  customs  confirmed  that  ‘there  is  a  tendency 
towards  having  mobile  detection  equipment,  which  can  be  moved 
easily  from  one  airport  to  the  other  in  the  same  region  (e.g.  from 
Malpensa to Orio al Serio) in case of need, such as in the case of fast-
cash readers’399. 

Increasing  external  risks  and  security  threats,  also  pressure  on  customs  administrations 
(financial, human and organization) resources to secure appropriate customs equipment, at the 
same  time  serving  as  a push factor  towards  innovation  of  customs  equipment.  As  the role to 
perform  in  a  more  strategic  (security  supporting) function  has  grown,  Member  State  customs 
administrations face increasing pressure to secure high-quality customs control and supporting 
equipment. For instance, in France and Malta customs officers are mandated with the checking 
of persons at the airports. 

Migration and terrorism are two trends that illustrate this dual impact: pressuring on resources 
on  the one hand,  while demanding  collaborative  and  innovative  solutions  on the other hand. 
increasing the need to exchange data and perform higher risk management. 

As  result  of  the  terrorism  threat,  customs  equipment  need  to  be  up  to  quality  to  detect 
possibly  harmful  gasses,  liquids  or  weapons  as  result of  risk  management processes.  As  such, 
this  trend  pressures  on  capacity  and  resources,  whilst  on  the  other  hand  demanding 
innovations  and  modernization  to  deliver  quality  customs  controls  and  employment  of 
equipment.  

Clearly,  new  customs  equipment  innovations  to  detect  terrorist  threats  however  come  at  a 
price; not all EU Member States are able to find financial resources and hence ‘weakest link’ in 
customs  controls  may  be  used  by  terrorists  to  gain  incomes  from  customs  or  tax  fraud,  or 
import harmful products into the EU. 

398 Interview, Netherlands Customs Administration 

399 Interview, Italian Customs Administration 

469 

 
 
                                                      
The changing face of trade equally poses new risks and challenges on customs equipment, such 
as the growth in (low value) e-Commerce from third countries. In general, customs authorities 
feel  that  in the  context of  e-Commerce they  are  lacking the people  to perform  on  a  constant 
basis  heightened  and  more thorough  controls. Detection  of  certain  dangerous  goods  (nuclear 
materials  for  example)  also  requires  specialized  equipment  to  scan  low-value  goods  in  high 
volumes;  these  equipment  tools  are  expensive.  As  a  response,  Member  States  are  trying 
different approaches; the sheer volume of e-commerce however means that without improved 
quality and analysis of data, specific risks cannot be checked by customs equipment. In absence 
of  these  quality  data,  some  administrations  invest  in  100%  scanning  equipment.  This  is 
illustrated through the following examples:  

  In  France,  further  research  is  carried  out  to  find  out  how  new 
technologies  as  blockchain  could  be  used,  in  particular  for  improving 
the  quality  of  the  data  all  along  the  movement  of  goods  transported 
via airplanes.  

  In  Italy,  the  customs  administration  has  entered  into  a  cooperation 
with  university  to  develop  a  new  type  of  non-intrusive  infrared 
detection equipment to enable higher rate of scanning of e-commerce 
packages (low value) without disrupting the supply chain (see section 
1.8).  Similarly    in  Belgium,  a  preliminary  study  has  been  launched 
together  with  the  Catholic  University  of  Leuven  and  particularly  with 
IMEC  (Interuniversitair  Micro-Electronica  Centrum),  a  program 
focusing on microelectronics, in order to reach a 100% goods scanned 
when  crossing  the  border  (currently  only  2%  of  the  imported  goods 
are  scanned).    Member  states  are  also  willing  to  participate  into  a 
reasoning about how innovative technology (for example drones) could 
help.  

Lastly,  Brexit  developments  will  trigger  an  increased  pressure  on  customs  administrations  to 
purchase  additional  customs  equipment  to  control  the  increased  volumes  of  third  countries’ 
trade to and from the UK. France, the Netherlands and Belgium will be in front line to cope with 
the  new challenges  in the  event  the  United  Kingdom  will become a  third  country  as  result of 
Brexit negotiations.  

  France  is  for  example  asking  for  good  practices  sharing  platform  in 
that regard, and feared the consequences regarding the port of Calais 
to be more important than anywhere else concerning customs control 

470 

 
 
functions and customs equipment needed to detect and verify risks in 
goods and passengers flows400. 

400 Interview on equipment with French customs administration 

471 

 
 
                                                      
5. Problem assessment and findings: challenges 

faced in customs equipment 

This  section  gives  an  overview  of  the  findings  from  our  different  data 
collection activities. 

Disclaimer 

The  data  provided  under  this  section    is  the  result  of  combining  the 
outputs  collected  through  phone 
interviews,  surveys,  and  desk 
research.  Due  to  a  lack  of  data  available,  the  study  team  has  worked 
with  projections,  estimations,  and  extrapolations.  Therefore,  the 
assessment provided here only reflects to some extent the reality of the 
Member States.  

Our assessment underlying this Note on Equipment provided more in-depth 
understanding  on  the  needs  faced  by  customs  administrations  in  the  EU  in 
relation to customs equipment.   

At  a  general  level,  the  survey  to  customs  administrations  confirmed  that 
customs  equipment  poses  a  challenge.  Out  of  the  25  respondents,  60% 
consider  that  the  question  of  equipment  is  to  a  considerable  or  to  a  great 
extent a challenge for their organisation as illustrated in the figure below.  

Figure 52: To what extent customs equipment poses a challenge? 

472 

 
 
 
s
e

i
l

p
e
r
5
2

0%

20%

40%

60%

80%

100%

To a small extent

To some extent

To a considerable extent

To a great extent

Do not know or no answer

Source: Survey to Member States; N=23 

Indeed,  in  the  context  of  trends  and  developments  mentioned,  customs 
administrations  need  not  only  to  perform  more  accurate  data  analysis  and 
profiling  based  on  IT  systems  and  technology,  but  equally  have  availability 
over  and  use  of  up-to-date  border  equipment  that  supports  customs 
administrations  to  carry  out  efficient  and  effective  customs  control  function 
in  a  changing  context.  The  latter  will  ensure  that  the  physical  controls  are 
the most accurate possible.  

At a more specific level these challenges can essentially be categorised into 
three  types  of  capacity-related  challenges  that  are  specific  to  EU  Member 
States:  

  Human  and  organisation  resources  to ensure  procurement  and  use  of 

the customs equipment  

  Financial resources to purchase and maintain equipment;  
  Facilitating  research,  innovation  and  collaboration  that  allow  for 
(collaborative)  solutions  and  a  more  efficient  and  modernized 
employability of the equipment  

In  addition,  a  fourth  and  fifth  challenge  have  been  identified  that  are  EU 
over-arching  challenges  pertaining  to  data 
insights,  monitoring  and 
collaboration in relation to customs equipment. Here, the underlying concept 
for EU-level challenges identified is the idea that upgrading the weakest link 
is key to improving customs control efficiency and uniformity in the EU and 
between EU Member States:  

473 

 
 
 
 
 
  Diversity  in  customs  risk  management  processes  (and  profiling 

approaches)  

  Baseline, data and insights on customs equipment at EU borders. 

This challenge relates to  

o  the lack of an agreed (customs) technical equipment  standard 
setting  an  ‘acceptable  bar  for  availability,  quality  and 
use’, and  

o  allowing  to  identify  and  continuously  monitor  ‘weakest  link’ 

and/or (crisis) situations  

o  where (lack of such) equipment would impact the efficiency and 
uniformity  of  EU  (customs)  control  functions  to  secure  EU 
protection of citizens, budgets and facilitate trade.  

In  absence  of  comparative  data  and  a  (customs)  equipment 
vulnerability  assessment  –this  challenge  also  relates  to  lack  of 
reliable data and insights into the equipment status of the EU customs 
union and Member States.  

1.4 Diversity in customs risk management approaches 
As noticed during our fieldwork, the approach to customs  risk management 
varies across EU Member States. The differences in approach are visible by 
the  fact  that  some  countries  impose  Government  control  ‘objectives’  to  be 
achieved, whereas other countries do not have a particular control rate (but 
prefer  to  employ  customs  equipment  at  the  condition  of  the  risks  identified 
based on data analysis of risk management processes).  

Our  assessment  found  exemplary  differences;  whereas  in  Italy  ‘national 
guidelines require that 5% of goods are controlled (whilst effective controls 
at  selected  airport  reaches  3.5%  of  goods),  in  Belgium  the    customs 
administration  indicated  that  2%  of  the  imported  goods  are  scanned, 
whereas  the  Dutch  customs  administration  does  not  maintain  a  target 
control rate as such.  

As noticed during our fieldwork, the approach to customs  risk management 
varies across EU Member States, specifically in the way and extent to which 
customs  collect,  interpret  and  analyse  data  based  on  the  information 
received.  

On the one hand, some countries (such as Belgium and the Netherlands) risk 
management processes are highly centralized, and focus on trade facilitation 
and  enhancing  competitiveness,  by  trying  to  limit  as  many  ‘unnecessary’ 
physical  customs  controls  as  possible.  In  this  case,  risk  analysis  processes 

474 

 
 
and  tools  strongly  leverage  on  (advanced)  data  analytics,  as  early  as 
possible:  emphasis  on  data  collection  pre-arrival  of  goods.  Clearly,  the  size 
and  volumes  of  goods  handled  at  a  specific  air  or  seaport  is  of  relevance 
here;  the  higher  the  volumes,  the  more  advanced  risk  management 
processes are developed and employed.  

On  the  other  hand,  some  countries,  such  as  Hungary  or  Croatia,  rely  more 
extensively  on  decentralized  and  physical  customs  controls  and  general 
assessment of risks through customs equipment to manage the risks of illicit 
behaviour  and  trade,  as  well  as  fraud.  Less  emphasis  is  placed  on  the 
collection and processing (and exchanging) of high quality data as basis for 
exploiting  risk  assessment,  for  example  through  advance  cargo  information 
submitted  electronically.  These  countries  continue  to  rely  on  customs 
equipment  for  general  risk  analysis  (more  apparent  at  land  borders), 
recognizing the potential benefits of investing in more professionalized data 
analysis.  Here,  misalignment  between  outcomes  of  risk  management 
process data analysis and customs equipment is an example of the lack of a 
clear strategic approach towards customs risk management. 

 

‘Our  higher  management  in  our  country  does  not  always  understand 
this  trend  towards  centralized  risk  management.  Customs  authorities 
are  using  data  to  detect  companies  on  fraud  (based  on  IP  addresses 
and locations) but they are not aligned with the mobile units. There is 
no  data  sharing  for  IPR  with  other  officers  for  risk  of  leakages.  Many 
departments  also  do  not  yet  make  use  of  the  data  we  provide.  Data 
sharing with other  Member States happens on a personal relationship 
level, but not structurally’ . 

Our assessment pointed towards the fact that most customs administrations 
across the EU agree with and realize that customs equipment is increasingly 
employed  as  result  of  centralized  risk  management  of  data.  Customs 
equipment  is  then  employed  as  ‘risk-specific  verification  tools’  (rather  than 
general  risk-assessment  tools).  However,  the  extent  to  which  the  trend 
applies  differs  across  EU  Member  States;  only  the  ‘frontrunner’  Member 
States  employ  equipment  on  pure  conditional  basis  (‘if  –  then’)  ,  as  and 
when  specific  risks  are  identified  as  result  of  data  analysis  based  on  pre-
arrival assessment (i.e. preliminary import declarations) and even approved 
trader status (AEO programmes).  

  A  good  example  here  is  the  innovation  trend  towards  auto-detection. 
Whereas  auto-detection  of  risks  is  currently  limited  to  radiation 
detection, the future may hold 100% controls based on auto-detection 

475 

 
 
technology.  To  this  end,  algorithms  are  under  development  to  allow 
automatized  detection  to  be  employed  by  X-Ray  scanners.  The  auto-
detection would mean that customs equipment could be employed on 
a non-intrusive basis and potentially reach full control function. 

Clearly,  in  the  situation  where  customs  administrations  do  not  have  the 
required  equipment  to  be  employed  for  verification  of  these  general  and/or 
specific  risks,  the  efficiency  and  uniformity  of  customs  control  processes  in 
the  EU  is  potentially  undermined.  Even  if  some  frontrunners  would  employ 
advanced  customs  detection  technology  and  equipment,  this  would  not  be 
sufficient to raise the overall quality of customs control in the EU.  

In  this  sense,  there  is  a  visible  trend  towards  requiring  systematic  digital 
submission of advance information on cargo across the EU, albeit in different 
graduations.  Under  the  new  Union  Customs  Code,  this  trend  will  further  be 
reinforced,  especially  with  the  development  and  application  of  the  new 
Import  Control  System  (ICS2).  The 
findings  confirm  that  customs 
administrations throughout the EU are more and more focused on detecting 
illicit  goods and fraud, which may  impact upon  health, environment  as well 
as safety and security. Hence, the automated control functions built into the 
electronic  documentary  checks,  together  with  reinforced  risk  management 
functions will further enable customs administrations towards reaching their 
objectives.  

Relevant  findings  from  Deloitte  Case  studies  on  external  border 
management 

  In  a  land  border  context,  border  equipment  needs  to  serve 
customs administrations often to conduct and complete ‘on arrival’ 
risk  management  process,  based  on  documentation  capturing 
data presented (slightly before), during or even after the customs 
control.  Frontrunner  countries,  such  as  Estonia,  experiment  with 
the  pre-arrival  collection  of  data,  such  as  through  mobile 
applications  to  be  used  by  individuals  or  trucks  wishing  to  cross 
the land border from Russia into the EU.  

  In a sea and air border context, border equipment is increasingly 
used  as  a  high-risk  instrument,  to  be  activated  when  and  where 
risk  management  processes  point  towards  inefficiencies  or  risks 
that need to be checked.  

  All  Member  States  interrogated  in  the  scope  of  this  external  sea 
border  case  study  raised  the  issue  of  lack  of  equipment.  This 
refers  to  scanning  devices  necessary  to  detect  certain  dangerous 
and  illegal  goods  which  number  is  insufficient  in  certain  Member 

476 

 
 
States  while  in  others,  it  is  a  matter  of  falling  into  disuse  where 
equipment  are  no  longer  appropriate  to  effectively  detecting  the 
actual threats facing by the authorities.  

1.5 Baseline, data and insights on customs equipment at EU 

borders 

Our  assessment  has  confirmed  that  there  is  general  agreement  between 
Member  States  and  European  Commission  that  capacity  gaps  in  customs 
controls,  and  more  specifically  customs  equipment,  poses  a  risk  to  the 
functioning  of  the  EU  Customs  Union.    Existence  of  ‘weakest  links’  in 
customs  risk  management  at  EU’s  external  sea,  air  and  land  borders  in  EU 
Member  States  may  allow  for  illicit  trade  and  fraud  to  happen  unnoticed, 
impacting upon the Customs Union performance as a whole.  

Two  factors  complicate  the  assessment  and  addressing  of  these  capacity 
gaps in customs controls, and more specifically customs equipment.  

The  first  is  the  absence  of  an  agreed  understanding  on  what  constitutes 
appropriate  customs  control  capacity,  and  more  specifically  in  customs 
‘minimum  customs 
equipment.  Without  such  a  baseline  agreed  on 
equipment  capacity’,  measured  against  a  number  of 
indicators  (ie 
combination  of 
trade  volumes,  number  of  customs  declarations, 
persons/road-, railway-, sea- transport passing through borders per day), it 
is not possible to draw conclusions on the extent to which a specific situation 
at  a  Border  Crossing  Point  (BCP)  is  acceptable  or  not.  In  absence  of  an 
agreed  baseline  understanding  on  customs  controls  (or  more  specifically; 
customs  equipment),  the  country-specific  data  collected  on  the  availability 
and use of customs equipment is difficult to assess. 

Second,  the  European  Commission  and  its  member  states  do  not  have 
access  to  comparative  insights  and  systematic  monitoring  into  the  capacity 
weaknesses  and  strengths  in  EU  customs  control  (and  customs  equipment 
especially).  Where  are  the  key  weaknesses  at  the  EU  borders  in  terms  of 
customs  equipment?  Valuable  insights  were  generated  through  the  CELBET 
Expert Group, as well as through this specific assessment for land- and sea- 
borders,  but  no  systematic  monitoring  is  taking  place.    Although  the 
situation  of  border  management  in  the  context  of  Frontex  is  very  different, 
the best practices gathered in identification of weaknesses at the EU external 

477 

 
 
 
 
borders  through  vulnerability  assessments  on  Member  States’  capacity  can 
provide  a  good  point  of  departure  for  consideration  in  the  context  of 
improving  data  and  insights  on  EU  customs  control  (and  customs 
equipment)  situation.  In  a  centralized  role,  Frontex’  task  in  this  context  is 
to:  ‘monitor  and  assess  the  availability  of  the  Member  States’  technical 
equipment,  systems,  capabilities,  resources,  infrastructure  and  adequately 
skilled  and  trained  staff  necessary  for  border  control.  The  scope  of  the 
vulnerability  assessment  is  broad  and  allows  for  potential  vulnerabilities  to 
be  identified  in  a  wide  range  of  areas  related  to  border  management 
capacities.  The  vulnerability  assessment  methodology  is  structured  around 
one  single  overall  process  resulting  in  annual  baseline  assessments.  These 
assessments are complemented with specific assessments stimulated by the 
identification  of  upcoming  challenges,  the  monitoring  of  the  situation  along 
the external borders and the assessment of Member States’ contributions to 
the rapid reaction pool.401’ 

1.6 Human and organisation resources to ensure procurement 

and use of the customs equipment  

Our  assessment  pointed  to  the  fact  that  the  efficient  use  of  customs 
equipment, especially with a view to the constantly changing trends in illicit 
trade  and  innovations  in  detection  technology,  necessitates  investment  in 
human  resource  skills.  Three  aspects  are  of  relevance  here:  availability  of 
staff to employ customs equipment, the skills and expertise needed to make 
use  of  customs  equipment,  and  the  human  resource  capacity 
for 
procurement of customs equipment. 

First,  in  order  to  employ  customs  equipment  needed  to  check  on  risks 
identified,  an  often  heard  complaint  is  the  lack  of  available  staff  (human 
resource  availability)  to  use  the  customs  equipment,  especially  in 
relation  to  huge  volumes  of  incoming  e-commerce  that  lack  data  to 
sufficiently analysis risks. As result of changing use of customs equipment in 
relation  to  data,  customs  officers  often  prefer  ‘old’  ways  of  working  and 
limited staff is available that can manage both customs equipment as well as 
IT systems. Contextualized, it means for example that there are 84 customs 
officers per  BCP in  Poland, but only 31 in Estonia and even 20 in Croatia  – 
calling for customs officers to take up multiple tasks.  

401 https://frontex.europa.eu/intelligence/vulnerability-assessment/ 

478 

 
 
                                                      
Second, it is noteworthy to mention that it is essential to take into account 
the knowledge  and  skills dimension in the context of customs equipment. 
Some  Member  States  stressed  the  importance  of  the  learning  and 
collaboration  dimension;  customs  officers  need  to  be  trained  in  order  to  be 
able  to  use  the  new  technology  acquired  and  share  experiences  and  best 
practices.  As  Belgium  pointed  out,  customs  officers  are  still  traditional  and 
they  are  not  therefore  yet  familiarised  with  the  use  of  new  technologies  in 
their  daily  work.  In  addition  to  the  budget  foreseen  for  the  acquisition  and 
maintenance of equipment, it is therefore key to allocate budget to address 
the  French  customs 
the  human  capacity  aspect. 
administration in Le Havre highlighted the challenges posed by the continued 
adaptation  of  customs  officers  to  the  new  tools,  especially  IT  tools.  This 
changing environment requires substantial efforts from customs officers and 
affects the recruitment criteria of future officers. 

Interviews  with 

Already  Member  States  engage  in  collaborative  exchange  of  insights  and 
expertise.  For  instance,  the  German  and  French  customs  administrations 
exchanged their experience to detect counterfeit banknotes using detectors. 
German officers had substantial experience with this type of equipment while 
their  French  colleagues  had  none.  When  French  officers  came  back,  they 
implemented  a  pilot  project  using  this  equipment  for  one  year.  After  a 
successful experimental stage, this technology is operational in France.   

Collaboration  between  Member  States  is  often  centered  on  technical 
cooperation.  

An  EU  equipment  programme  could  ensure  the  support  to  the  human 
capacity building in terms of equipment centrally. Such support could consist 
of  not  only  trainings,  but  also  exchange  of  trainings,  exchange  of  best 
practices in terms of customs equipment. 

Possible solutions to enhance human resource skills for the use of customs 
equipment  were  also  raised:  for  example  control-related  trainings  which 
include  equipment  use  (dedicated  training  grounds),  some  exchange  on 
experiences  with  specific  (innovative  or  newly  purchased)  types  of 
equipment,  webinars  on  risk  detection  for  specific  types  of  seizures  (illicit 
tobacco, environmental waste, IPR infringements, etc.). In addition, the best 
practices  in  the  context  of  Frontex  were  mentioned  in  the  area  of  the 
increasing  flow  of  goods  crossing  borders  and  the  growing  pressure  due  to 
facing threats of migratory crisis and terrorism.  

Third,  the  procurement  of  customs  equipment  has  been  highlighted  as  a 
challenging  area  from  a  human  resource  perspective,  where  knowledge 

479 

 
 
about  the  advantages  and  disadvantages  of  equipment,  in  the  context  of 
changing threats, is needed. Here, a key limitation is that testing of customs 
equipment  is  time-consuming  and  requires  reaching  out  to  each  provider 
(seller) separately.  

A  visible  trend  in  procurement  is  also  the  demand  for  more  customised 
equipment  by  some  Member  States,  which  requires  advance  determination 
of  key  aspects  and  functions  the  equipment  would  need  to  fulfil.  Those 
countries  where  limited  financial  resources  is  available  to  invest  into  new 
equipment seem to rely more on ‘off the shelf’ standard customs equipment 
offered by providers.  

Some  customs  administrations  invested  into  testing  of  customs  equipment, 
and  this  came  up  as  a  possible  area  for  collaboration  to  ease  and  improve 
procurement process: 

For  example,  the  Austrian  Customs  ‘organised  test  series  in  which,  after 
initial information of the companies, their devices had been tested for some 
weeks  in  life  operation.  There  has  been  a  variety  of  suggestions  for 
improvement  and  modification  to  adapt  the  devices  to  the  requirements  of 
customs  controls’402.  The  Polish  Customs  Administration  equally  partnered 
with  a  third  party  to  ‘develop  and  present  technical  specifications  (user 
requirements) prior to tender’403.  

In  order  to  address  the  capacity  challenges  in  relevant  procurement 
content, knowledge and skills needed, and enhance over-all efficiency of the 
results of tender processes, possible collaborative solutions were raised: 
knowledge-exchange  about  customs  equipment  (testing  results,  user 
experiences  etc),  joint  testing  of  materials,  development  of  technical 
specifications  and/or  tender  related  content  on  customs  equipment 
conditions.  

1.7 Financial resources to purchase and maintain equipment 
Our assessment finds that most, but not all, customs administrations across 
the EU experience financial constraints to purchase and/or maintain customs 
equipment to support efficient and uniform customs controls function. Annex 
F.1 provides the results of the quantitative analysis undertaken with regard 

402 Contribution from Austrian Customs Administration through Customs Equipment Survey 

403 Contribution from Polish Customs Administration through Customs Equipment Survey 

480 

 
 
                                                      
to estimated financial needs to fund equipment purchasing and maintenance 
in EU Member States. 

According  to  DG  TAXUD  survey  amongst  Member  States,  the  overall 
investment funding gap for border equipment for customs purposes amounts 
to  29%  of  total  funding  gap  (with  customs  systems  at  27.3%  and  customs 
infrastructure  at  27.6%),  which  were  identified  following  the  2013/2014 
survey.  In  absolute  terms,  the  customs  investment  gap  of  15  EU  Member 
States amounted to a total of EUR 1 293 million, based on the data gathered 
through the same survey404. 

The survey conducted on customs authorities indicates that a majority of the 
respondents  -  18  out  of  25  customs  administrations  -  consider  that 
equipment should be funded under a future Customs programme, to support 
improved controls at the sea, air and land borders of the Customs Union. 

On the one hand, there are Member States that avail over limited capacity to 
execute  customs  controls  as  result  of  lacking  financial  resources  to  ensure 
appropriate  customs  equipment  needed  to  complete  quality  customs  risk 
management  process.  Their  interest  is  in  enhancing  the  quality  of  their 
customs  risk  management  processes,  through  securing  necessary  financial 
resources to invest in data analysis, technology and customs equipment. 

At the other end of the spectrum is a group of Member States, mostly those 
receiving large trade volumes, which do not experience a financial resource 
gap  to  ensure  high-quality  customs  risk  management  processes  and  invest 
in  quality  technology  and  equipment.  Their  direct  interest  is  in  innovation 
and  R&D  to  ‘upgrade’  the  already  effective  and  efficient  customs  control 
processes with advanced and innovative equipment tools remain necessary, 
that  can  be  employed  when  specific  risk  indicators  are  met.  However,  the 
‘self-funding’  countries  all  recognize  the  need  to  ensure  an  acceptable 
customs  control  performance  across  the  EU,  and  that  customs  equipment 
plays a crucial role (as part of the broader risk management process).  

Our  assessment  has  equally  provided  some  clarity  into  the  reasons  for 
financial  capacity  constraints  to  fund  customs  equipment  purchase  and 
maintenance.  These  reasons  are  mainly  to  be  found  in  national  budgets, 
sometimes linked to domestic priorities, as well as in available EU funds.  

404 Survey  DG  TAXUD,  based  on  reporting  from  the  DG  TAXUD.R  /  DG  TAXUD.PA  2013/2014 
survey 

481 

 
 
                                                      
At Member  State level, a first reason for financial capacity constraints that 
limit funding for customs equipment may be found in the unequal spreading 
of  gains  from  customs  collection  duties  across  the  EU  Member  States. 
With  a  view  to  the  fact  that  border  equipment  directly  supports  the  EU 
Customs  Union  objectives,  Governments  are  expected  to  support  such 
expenses  through  the  collection  costs  available  to  Member  States 
(constituting  20%  of  total  incomes  from  customs  duties  and  sugar  levies 
since  2014).  However,  the  incomes  derived  from  collection  costs  are 
disproportionally higher in countries having higher trade intensity from third 
countries, allowing these countries (such as Germany or Netherlands) to use 
funds for customs equipment financing (inter alia).  

In 2016, the EU Member States jointly collected EUR 25 billion from import 
duties,  of  which  they  retained  EUR  5  billion  (and  EUR  20  billion  was 
transferred  to  the  EU  budget) 405 .  Whereas  the  figure  below  shows  the 
revenues  for  the  EU  budget  from  customs  duties,  each  country  retained  a 
same  proportion  of  20%  of  collection  costs  contributing  to  their  national 
budgets  (potentially  a  source  to  fund  border  equipment).  Whereas  sea-
bordered country Malta received 20% from EUR 15.1 million Euros, Belgium 
was  the  fourth  biggest  receiver  from  collection  costs  with  20%  from  EUR  2 
579.5 million.  

Overall,  a  large  discrepancy  between  customs  collection  costs  retained  is  a 
fact between EU Member States: 

  High customs collection cost retaining countries: Belgium, Germany, Spain, France, Italy, 
Netherlands,  and  United  Kingdom  benefit  from  around  or  more  than  EUR  2 000.00 
million customs duties collection costs (retaining 20%). 

  Low  customs  collection  cost  retaining  countries:  all  remaining  countries  collect  an 
amount well below EUR 500 million (with Sweden and Poland slightly above that).  

405 https://ec.europa.eu/taxation_customs/facts-figures/customs-duties-mean-revenue_en 

482 

 
 
 
 
 
                                                      
Figure 53: EU budget revenue from customs duties (100%), 2016 (EUR million) 

- 

Source: https://ec.europa.eu/taxation_customs/facts-figures/customs-duties-mean-revenue_en  

Looking  at  the  role  played  by  EU  support,  our  assessment  equally  found 
reasons for and provided insights  into the (limited) use of EU funds as well 
as  specific  funds  targeting  key  seizures  (such  as  cigarettes).  Particularly, 
68% of the respondents to our survey stated that they are recurring to other 
available  EU  funds.  Half  of  the  respondents  (52%)  have  used  Hercules  III. 
Malta,  for  instance,  has  used  it  for  K-9  (i.e.  canine  trace  detection),  while 
Denmark recur to it to fund a mobile scanner. ISF (24%), Structural Funds 
(16%), and Instrument then follow this fund for Pre-accession Funds (12%). 
The participating countries use other EU instruments such as ENI CBC406, but 

406 The  ENI  CBC  “Mediterranean  Sea  Basin”  Programme  was  adopted  by  the  European  Commission  on  17 
December  2015,  with  four  main  objectives:  business  and  SMEs  development;  support  to  education,  research, 
technological  development  and  innovation;  promotion  of  social  inclusion  and  fight  against  poverty;  and 
environmental protection, climate change adaptation and mitigation. 

483 

 
 
 
 
                                                      
also  international  ones  such  as  Philip  Morris  International  funding 407  and 
other donors programme.  

The respondents agreed on the difficulty to access the EU sources mentioned 
for purchasing Customs equipment, as only 5% of the respondents state to 
have easily access to them. The participating countries mentioned they face 
different  type  of  obstacles  when  applying  to  these  programmes.  First,  the 
procedures  of  the  programmes  were  described  as  overcomplicated  and 
burdensome. Second, the customs administrations are in direct competition 
with  other  departments  of  their  government  and  are  therefore  not  always 
considered as a priority. Lastly, these funds are not specifically designed to 
support customs needs, and can only support them to some extent.   

For  those  countries  experiencing  limited  resources  to  fund  equipment 
purchase,  an  additional  challenge  is  the  maintenance  of  equipment  at  the 
external border. As the Customs programme does not provide for funding for 
new equipment nor maintenance, Member States use funding under different 
programs  from  OLAF  for  maintenance,  when  national  level  there  is  not 
enough  budget.  This  funding  however  only  partially  covers  the  cost  and  up 
to a certain period of time.  

Whereas  equipment  procurement  demands  substantial  time  and  human 
resources,  the  fact  that  the  customs  equipment  market  was  dominated  by 
three  main  players  was  keeping  the  prices  high  over  the  past  years.  In 
recent  periods,  newcomers  on  the  equipment  market  (notably  from  China) 
may change this in the near future.  

Those Member States at the external borders indicated during fieldwork that 
the funding of purchasing and maintenance of their equipment with national 
budgets  are  not  possible,  and  that  equipment  funding  for  external  land 
border protection should actually be a combined effort within the EU and not 
just for the countries situated at the external border.   

Based  on  the  above,  there  is  a  clear  opportunity  for  an  EU  intervention  in 
the field of equipment in order to support the participating countries in terms 
of financing the purchase and/or maintenance costs for customs equipment. 
In  particular,  if  risk  to  the  shared  EU  customs  union  objectives  can  be 
proven, such EU funded support for customs equipment would be in interest 
of all countries.  

407 Philip  Morris  International  funding  is  an  initiative  supporting  projects  dedicated  to  fighting  illegal  trade  and 
related crimes such as corruption, money laundering and organized crime. 

484 

 
 
                                                      
Actually,  72%  of  the  respondents  to  the  survey  consider  that  equipment 
should be funded under a future Customs programme. This refers not only to 
the  acquisition  and  maintenance  of  equipment,  but  also  to  promoting  a 
shared  usage  of  equipment,  research  and  development  for  new  and 
innovative  equipment  usage  and  design,  and  supporting  improved  human 
resource (transfer of) skills on equipment use. 

The  following  subsections  provide  more  in-depth  information  on  the 
equipment needs at the air and sea borders. 

1.8 Research, innovation and collaboration 
Amongst the needs areas related to equipment (i.e. financing of equipment, 
human  capacity  building,  and  exchange  of  best  practices),  research  and 
innovation were an outstanding point mentioned during our data collection 
activities.  Our  assessment  pointed  towards  the  current  ad  hoc  approach  of 
individual  member  states  to  invest  in  innovation-driven  research  and/or 
partnerships with universities and research centres on the theme of customs 
control and equipment. For example:  

In  Belgium,  a  preliminary  study  has  been  launched  together  with  the 
Catholic  University  of  Leuven  to  assess  the  potential  of  micro-
electronics in this regard, to assess possibility of increasing the control 
rate without disturbing trade facilitation. 

In  particular,  some  Member  States  such  as  Belgium,  Denmark  and  the 
Netherlands  shared  their  willingness  or  interest  to  exchange  not  only  the 
best  practices  but  also  the  innovative  solutions  to  perform  controls  at  the 
different  borders.  This  dialogue  would  enable  to  trigger  some  reflections 
amongst the participating countries and maybe lead to the adoption of new 
technologies in the borders controls. 

In  addition,  there  are  examples  of  customs  administrations  participating  in 
research  and  innovation  projects  developing  new  inspection  techniques  and 
equipment,  more  respondent  to  the  needs  of  customs  administrations  to 
process  large  volumes  of  goods  in  a  timely  and  effective  manner.  This 
equally  fits  within  the  trend  of  (some  Member  States)  wishing  to  procure 
more customized customs equipment.  

For instance, some Member States pointed out how the use of drones could 
bring  benefits  to  perform  more  efficient  controls.  Denmark  is  already 
performing some tests to use underwater drones in their controls. Therefore, 
a  discussion  on  the  use  of  this  technology  could  promote  the  inclusion  of 

485 

 
 
new equipment in the border controls. In the Netherlands, a partnership with 
universities  led  to  development  of  several  customs  equipment  innovations 
such  as  ‘prototype  product  for  trace  visualization  X-ray  image  recognition 
algorithms, sniffer equipment and a clever combination of new and existing 
technology’408. 

Finally,  our  assessment  also  pointed  towards  the  wish  of  Member  States  to 
develop  more  collaborative  approaches  to  leverage  on  available  customs 
equipment and develop or innovate into new solutions. 

Looking at available equipment, Member States equally called for employing 
best-practice and efficiency-enhancing  solutions for customs equipment, for 
example,  to  support  shared  use  or  mobile  equipment.  In  this  context, 
reference  was  made  to  the  Frontex  approach  and  solutions,  such  as  the 
technical  equipment  pool for  deployment  in  joint  operations,  rapid  border 
interventions  and  in  the  framework  of  certain  migration  challenges.  In 
addition,  some  Member  States  already  employ  equipment  from  a  multi-
functional  and  cross-institutional  perspective,  with  a  dedicated  site  to 
facilitate ‘mobile equipment’ use and exchange between different institutions 
(as in the Netherlands). 

towards 

trend  of  establishing 
Some  Member  States  pointed 
partnerships  with  the  private  sector to combat illicit trade and improve 
customs  controls  and  employ  customs  equipment  in  more  targeted  cases 
based  on  data  analysis.  As  Hungarian  customs  administration  pointed  out: 
‘We  maintain  a  good  scientific  (not  financial)  relation  with  tobacco,  alcohol 
and oil industry in Hungary. We can collaborate with them in criminal cases 
and their experts often help our work.’409 

the 

Effective container inspection: the C-Board project 

Funded  via  the  H2020  programme,  the  C-Board  project  (Effective 
Container  Inspection  at  Border  Control  Points[1])  is  developing  and 
testing  a  combination  of  Non-Intrusive  Inspection  (NII)  technology 
solutions  for  the  generalised  inspection  of  container  and  large-volume 
freight.  The  toolbox  under  developed  will  be  able  to  cope  with  a  large 

408 Contribution from Customs Administration in Netherlands through Customs Equipment Survey 

409 Contribution from Customs Administration in Hungary through Customs Equipment Survey. 

[1] See: http://www.cbord-h2020.eu/  

486 

 
 
 
                                                      
range  of  targets,  including  explosives,  chemical  warfare  agents,  illicit 
drugs,  tobacco,  stowaways  and  Special  Nuclear  Material  (SNM),  which 
currently cannot be verified by one inspection NII technology.  

By  developing,  combining,  trialling  and  assessing  complementary  NII 
technologies  in  a  comprehensive  cost-effective  solution,  C-BORD 
pursues four aims: 

  Increase the efficiency in container non-intrusive inspection (NII). 
  Reduce false negative and false positive alarms. 
  Maximise effectiveness and reduce safety risks for custom agents 

when opening containers for inspection. 

  Lay  the  groundwork  for  the  standardisation  of  requirements  and 
test  procedures  for  evaporation  based  detection  systems  used  to 
inspect large volume freight. 

The  C-BORD  Framework  will  help  customs  analyse  their  needs,  design 
integrated solutions, and optimise the container inspection chain; it will 
address detection levels, false alarm levels, throughput, health & safety 
and logistics needs in a cost-effective manner. 

C-BORD  involves  stakeholders  from  eight  Member  States,  including 
customs administrations from Netherlands, Hungary, Italy and Slovakia, 
working on users’ requirements. In addition, integrated solutions will be 
trialed on three customs sites, respectively addressing the needs of big 
seaports, small seaports and mobile land-borders.  

487 

 
 
 
6. Conclusions 

Customs  equipment  is  a  crucial  step  in  the  risk  management  process  for 
border  control.  The  use  of  sophisticated  and  up-to  date  equipment  enables 
customs administrations to ensure the correct implementation of their tasks.  

In  relation  to  customs  equipment,  our  assessment  confirms  that  customs 
equipment  poses  a  challenge  to  Member  States,  with  a  key  finding  being 
that  these  shortcomings  stand  in  the  way  of  efficient  and  uniform  customs 
control at the EU external borders. 

The  problem  assessment  has  pointed  towards  the  dual  nature  of  customs 
controls.  On  the  one  hand,  the  problem  assessment  confirmed  that  the 
efficient  and  uniform  use  of  available  equipment  in  customs  controls  is 
dependent  on  cooperation  between  Member  States  and  the  European 
Commission.  Two  aspects  were  deepened,  providing  suggestions  towards 
continued  investments  on  the  side  of  EU  and  Member  States  to  address 
current limitations in cooperation that may address these shortcomings:   

  the diversity in customs risk management approaches; and   
  baseline, data and insights on customs equipment at EU borders.  

On  the  other  hand,  our  problem  assessment  confirmed  that  capacity-
challenges  at  the  level  of  Member  States  are  unequal,  with  three  specific 
matters outstanding:  

  Human  and  organisation  resources  to ensure  procurement  and  use  of 

the customs equipment;  

  Financial resources to purchase and maintain equipment; 
  Research, innovation, collaboration. 

Looking at the EU as a whole, capacity and strategic approaches to customs 
risk  management  differ,  much  linked  to  their  unique  role  in  facilitating 
(different  types  of)  trade  flows  and  connecting  through  different  modes  of 
transport  (sea  ports  connecting  waterways,  airports  connecting  air  traffic, 
land  border  crossing  points  connecting  inland  roads  and  railways).  In 
connection to this, equipment related needs also vary across Member States. 
However,  in  absence  of  comparative  (and  EU-level)  insights  into  key 
vulnerabilities in customs equipment at EU external borders, and an agreed 

488 

 
 
standard  of  (minimum)  customs  equipment  use  and  availability,  a  solid 
vulnerability  assessment  is  required  to  establish  a  comparative  perspective 
and baseline for customs equipment. This may serve as a basis to develop a 
‘minimum’  or  ‘acceptable’  standard  on  customs  equipment,  that  would 
facilitate  also  the  request  for  financing  equipment  purchases  at  member 
state level in the event EU were to establish a dedicated fund.    

The  lacking  financial  capacity  of  some  Member  States  to  purchase  and 
maintain  customs  equipment  is  a  significant  issue  to  be  tackled  by  the 
European  Commission  and  EU  Member  States  due  to  the  potential  risk  on 
securing acceptable customs control across the EU. The extent to which this 
is  the  case,  would  require  further  research.  Although  financial  support  for 
purchase and maintenance of customs equipment is essential to ensure the 
most  accurate  physical  controls,  it  can  only  function  when  matched  by 
appropriate  customs  equipment  related  human  resources  skills  and 
availability,  data  exchange  and  analysis  in  (risk  management)  processes, 
innovation and collaboration.  

Amongst  the  several  needs  arising  from  the  assessment  conducted  on 
customs  equipment,  the  assessment  pointed  to  potential  ideas  for  more 
specific follow-up through deepened assessment:   

  Facilitate  EU  funding  of  equipment  purchasing  and  maintenance  for 

those BCP’s that pose a risk to EU Customs Union objectives; 

  Invest in development of a ‘baseline’ acceptable situation for customs 

equipment, as well as improved insights;  

  Invest in continuous monitoring and analysis of data on vulnerabilities 
(‘weakest  links’)  of  customs  controls  (and  customs  equipment)  at  the 
EU external borders; 

  Support human resource capacity building: 

o  practical and targeted customs equipment trainings on location; 
o 

live and/or downloadable webinars on key customs control risks 
and seizure types. 

  Support efficient and effective procurement processes: 

o  knowledge-exchange  about  customs  equipment  (testing  results, 

user experiences etc), joint testing of materials; 

o  development  of  technical  specifications  and/or  tender  related 

content on customs equipment conditions; 
o  collaborative testing of customs equipment. 

  Research, innovation and collaboration: 

o  support 

customs 
collaborations 
administrations  and  academia,  as  well  as  private  sector,  in  the 

innovative 

between 

489 

 
 
area of customs equipment innovation that could benefit EU as a 
whole; 

o  Support  partnership  with  private  sector  to  employ  customs 
equipment  in  more  targeted  way  for  specific  types  of  seizures 
(tobacco, counterfeit, under-valuation etc.);  

o  Support collaboration and mobility of customs equipment:  

  dedicated equipment pool; and/or  
  sharing Member State available (second hand) equipment. 

This assessment on customs equipment challenges in the EU confirmed that 
existence  of  a  ‘weakest  link’  in  customs  equipment  stands  in  the  way  of 
collectively  improving  the  efficiency  and  effectiveness  of  protection  and 
facilitation at the EU external land, sea and air borders. Our assessment and 
suggested  solutions  could  provide  a  good  starting  point  for  the  European 
Commission, both DG TAXUD and other entities, as well as Member State to 
deepen  discussion  on  possible  actions  to  address  these  challenges  in  a 
collective and mutually satisfactory manner.  

490 

 
 
Annex F.1 - In focus: Budget for equipment 
and equipment needs for 2021-2028 

Basic equipment needs for the 2021-2018 period  

As  explained  in  the  methodology  section,  the  study  team  has  estimated 
the  amounts  Member  States  would  allocate  for  customs  equipment.  The 
table below provides an overview of the budget allocated on average per 
cluster of countries for the period 2021-2028.  

As  mentioned  earlier,  these  estimates  build  on  limited  primary  data 
collected via surveys and interviews, and on extrapolations at EU level for 
the  period  2021-2018  using  clusters.  Therefore,  assumptions  were  used 
to fill the data gaps; for instance, it was assumed that Member States in 
the  same  cluster  would  have  similar  budgetary  needs  in  terms  of 
equipment).  Furthermore,  it  was  considered  that  expenditure  would  be 
constant over time (i.e. no major changes from year to another).  

In  order  to  check  the  validity  of  these  assumptions  and  to  account  for 
uncertainties in estimates due to data gaps410, the study team elaborated 
three different scenarios. The central scenario is the main one, elaborated 
directly  from  the  primary  data  collected,  while  the  minimum  and 
maximum  scenarios  account  for  possible  over-  or  under-estimations  in 
the  central  one.  Therefore,  the  minimum  scenario  includes  a  10% 
reduction  of  the  main  parameters  used  for  extrapolating  data  for  all 
Member  States  from  the  cluster  analysis411,  in  case  the  central  scenario 
over-estimated  some  elements.  On  the  opposite,  the  maximum  scenario 
includes  a  10%  increase  of  the  main  parameters  used  for  extrapolating 
data for all Member States from the cluster analysis412, in case the central 
scenario under-estimated some elements. 

410 As mentioned earlier, only 23 Member States replied to the survey, and not all replies were complete with 
all  the  data  points  requested.  Furthermore,  only  data  for  2016  were  requested,  which  are  not  necessarily 
representative of the average expenditure.  

411 As the cluster 1 presented more data gaps than the other clusters, a 20% variation was used for estimates 
of equipment needs of Member States belonging to this cluster, to account for higher uncertainties.  

412 As the cluster 1 presented more data gaps than the other clusters, a 20% variation was used for estimates 
of equipment needs of Member States belonging to this cluster, to account for higher uncertainties.  

491 

 
 
 
                                                      
Table 41 - Budget allocated to equipment procurement on average per cluster of 
countries (2021-2028) (in EUR million) 

Cluster
s 

Cluster 
1 

Cluster 
2 

Cluster 
3 

Cluster 
4 

Total 

Minimum scenario 

Central scenario 

Maximum scenario 

52.1 

4.1 

4.3 

1.7  

62.2 

65.2 

4.5 

4.8 

1.8 

76.4 

78.2 

5.0 

5.3 

2.0 

90.5 

Source: Deloitte elaboration 

Concerning the different needs for acquisition and maintenance, based on 
the limited data available from the survey and interviews, it is possible to 
identify  the  share  of  budget  destined  to  maintenance  as  ranging  from 
20%  to  40%.  In  a  very  limited  number  of  cases,  maintenance  costs 
represent  about  50%  of  the  overall  yearly  equipment  budget.  The 
maintenance costs have thus to be added to the figures presented in the 
table above.  

Equipment needs for the 2021-2018 period for ‘optimal’ situation 

Member  States  were  also  asked  to  define  their  budgetary  needs  for  the 
acquisition and maintenance of additional equipment to reach an optimal 
or anyway improved scenario.  This means that, in addition to the budget 
estimated in the previous table (which is essentially needed to substitute 
the equipment currently available based on the normal average lifecycle), 
Member  States  would  need  further  budget  in  order  to  reach  an  optimal 
situation  in  terms  of  customs  equipment.  The  table  below  provides  an 
overview of the additional equipment needs per cluster of countries.  

Next  thereto,  Belgian  customs  is  currently  benefitting  from  a  national 
‘safety envelope’, that provides funds to acquire new equipment. 

The same estimation approach and cluster grouping explained earlier was 
used  for  this  part  of  the  exercise,  with  the  same  limitations  in  terms  of 
data  gaps  and  extrapolations.  Therefore,  additional  scenarios  were 
elaborated to account for possible under- or over-estimations. The results 
are presented in the table below. 

492 

 
 
 
Table 42: Additional budget needed for customs equipment on average per cluster of 
countries (2021-2028) (in million EUR) 

Clusters  Minimum scenario 

Central scenario 

Maximum scenario 

Cluster 
1 

Cluster 
2 

Cluster 
3 

Cluster 
4 

Total 

6.5 

6.1 

5.7 

5.1 

8.1 

6.8 

6.3 

5.6 

9.8 

8.1 

7.6 

6.7 

23.4 

26.9 

32.3 

Source: Deloitte elaboration 

As for the figures on the budget allocated for the procurement of customs 
equipment,  maintenance  costs  (usually  ranging  from  20%  to  40%,  with 
peaks of 50% in limited cases).  

The  investment  gap  estimated  for  the  four  cluster  of  countries  has  been 
used  to  determine  the  overall  investment  and  maintenance  funds 
necessary  to  respond  to  the  needs  of  the  Member  States  for  the  coming 
years (i.e. the period 2021-2025). 

As  in  the  previous  steps,  three  scenarios  were  elaborated  to  account  for 
the uncertainties inherent to the data gaps and the clustering techniques. 
These  scenarios  aim  to  define  the  overall  investment  gap  for  customs 
equipment  in  the  EU  for  the  period  2021-2025.  In  the  central  scenario, 
the  average  funding  gap  for  each  cluster  (showed  in  the  previous  table) 
was  used  to  define  the  funding  gap  for  each  of  the  Member  States 
included  in  the  cluster,  together  with  the  average  maintenance  rate 
(35%). The minimum scenario adopts the minimum scenario estimate for 
the  finding  gap  and  a  lower  average  rate  for  the  maintenance  costs 
(25%). Finally, the maximum scenario is based on the largest estimate on 
the  investment  gap  (i.e.  the  maximum  scenario  described  in  the  table 
above), and a highest rate for the maintenance costs (40%). For the land 
border, the CELBET data was used. Finally, the estimates presented below 
are  in  current  prices.  For  the  current  prices,  a  2%  inflation  rate  was 
adopted.  

Figure 54 – Funding gap for equipment in the EU for the period 2021-2015 (EUR million) 

Minimum scenario 
Purchase  Maintenance 

Land border 
Sea border 

182.0 
300.9 

182.0 
300.9 

Maximum scenario 

Central scenario 
Purchase  Maintenance  Purchase  Maintenance 
342.4 
651.4 

299.6 
476.0 

214.0 
407.1 

209.3 
354.0 

493 

 
 
 
 
263.5 

746.4 

Air border 
Tot.  
(current prices) 
Overall  
funding gap 
(current prices) 
Overall  
funding gap 
(current prices 

Source: Deloitte estimates 

259.6 

742.5 

1 489 

1 457 

310.0 

873.3 

392.0 

356.5 

570.4 

1 167.6 

977.6 

1 564.2 

2 041 

1 988 

2 542 

2 467 

Overall,  the  investment  gap  for  customs  equipment  in  the  EU  for  the 
period  2021-2025  is  estimated  between  EUR  1 157  and  2 467  million, 
with the central scenario of EUR 2 041 million.  

Categories of light equipment needed  

When  considering  in  more  detail  the  needs  expressed  based  on  the 
equipment  categories  defined  in  Table  40,  respondents  to  the  survey 
expressed different needs for equipment for air and sea traffic (i.e. ports 
and airports).  

Based  on  the  results  of  our  survey,  73%  of  the  respondents  expressed 
the need to increase at their airports the following types of equipment: 

  Technologies  indicating  hidden  objects  on  humans,  which  includes 
X-ray  backscatter  portal,  body  scanner  based  on    terahertz  or  
millimetre wave; and  

  Non-intrusive inspection technologies, such as X-Ray scanners with 

high energy, X-ray scanner with low energy, X-ray backscatter. 

These  were  followed  by  the  category  of  equipment  for  field  analysis  of 
samples  (60%),  i.e.  trace  detection  based  on  Ion  Mobility  Spectrometry 
(IMS),  Canine  trace  detection,  Analysis  of  Samples  mainly  to  identify 
organic materials, metals and alloys.  

As far as the seaports are concerned, the needs are slightly different. At 
this crossing border  point,  the equipment most needed are non-intrusive 
inspection technologies (as stated by 65% of respondents) together with 
radiation  detection  and  nuclide  identification  equipment  (as  stated  by 
56% of respondents). 

Overall,  most  of  the  responses  to  the  survey  and  the  interviews  carried 
out  expressed  the  increasing  needs  for  mobile  equipment,  which  can  be 
moved easily from one border crossing point to another based on needs.  

‘basic’ vs ‘optimal’ budgetary needs for equipment  

494 

 
 
 
The  visual  below  illustrates  the  proportion  of  the  budget  allocated  to 
equipment  as  well  as  the  budget  needed  on  top  in  order  to  reach  an 
optimal  situation.  The  data  is  provided  on  average  per  clusters  of 
countries. 

495 

 
 
 
 
Figure 55: Overview of the budget allocated to equipment and additional budget needed 
(on average, per clusters of countries) 

100%

90%

80%

70%

60%

50%

40%

30%

20%

10%

0%

Cluster 1

Cluster 2

Cluster 3

Cluster 4

Additional budget needed for equipment

Budget allocated to equiment

Source: Deloitte elaboration 

The first cluster of countries would need less budget to reach  an optimal 
situation. The countries within cluster 1 are actually those Member States 
handling  the  highest  volume  of  goods.  These  countries  are  used  to 
allocate  significant  amounts  of  budget  to  customs  equipment  in  order  to 
cope with the significant amount of goods they need to control. Therefore, 
their  gap  need  is  less  important  than  for  the  rest  of  countries.  On  the 
contrary,  countries  in  the  other  clusters  expressed  needs  for  additional 
budget  and  additional  equipment  in  order  to  reach  a  better  (even  if  not 
optimal)  situation.  These  clusters  are  composed  by  smaller  countries, 
which process lower volumes of goods than those in cluster 1, and include 
all Member States at the land frontier of the EU.  

Based on our estimates, the investment gap for customs equipment in the 
EU for the period 2021-2025 is calculated between EUR 1 157 and 2 467 
million,  with  the  central  scenario  of  EUR  2 041  million.  Of  these, 
procurement  costs  are  estimated  between  EUR  746.4  million  and  EUR 
977.6 million, with the central scenario of EUR 873.3 million. Maintenance 
costs are estimated between EUR 742.5 million and  1 564.2 million, with 
the central scenario of EUR 1 167.6 million 

All Member States consulted expressed the need not only for funding for 
equipment, but also, if not more, for more  and more frequent training on 
how to use  equipment. Even those countries that have less difficulties in 
accessing  funding  for  acquiring  and  maintaining  equipment,  highlighted 
how  crucial  it  is  and  will  be  in  the  future  for  customs  administrations  to 
stay up to date with the more recent technological developments, also in 
case  of  new  technologies  and/or  technological  applications  for  more 

496 

 
 
effective  and  less  intrusive  scanning.  The  role  of  the  EU  and  of  the 
Commission  is  answering  the  need  for  training  was  recognised  as  key. 
Furthermore, many customs administration pointed out how they are not 
aware  of  what  others  customs  administrations  are  doing  in  the  field  of 
innovation  (technological,  but  also  concerning  processes).  A  stronger 
knowledge  sharing  and  coordination  role  for  the  Commission  (and  DG 
TAXUD in particular) was also envisaged.  

497 

 
 
 
 
Annex F.2 – Interviews overview 

The  table  below  gives  an  overview  of  the  additional  interviews 
conducted  in  order  to  assess  the  equipment  at  sea  and  air 
borders. 

Table 43: Status of Interviews for collecting information on equipment needs 

Country 

Airport/sea port 

Status 

Airports  France 

Charles  de  Gaulle  –  Roissy 
airport 

Conducted 15/12/17 

Fort de France airport 

Canceled 

Italy 

Fiumicino airport 

Scheduled: 19/01/18 

Malpensa airport 

Conducted: 17/01/18 

Belgium 

Brussels airport 

Conducted 22/12/17 

Liège airport 

Estonia 

Tallinn airport 

Conducted 12/01/18 

Tartu airport 

Sea 
ports 

Netherlands  Port of Amsterdam 

Conducted: 16/01/17 

Port of Rotterdam 

France 

Port of Le Havre 

Conducted 11/12/17 

Port of Marseille 

Canceled 

Croatia 

Port of Rijeka 

Conducted: 16/01/18 

Port of Split 

Conducted 
17/01/2018 

Denmark 

Port of Aarhus 

Conducted: 11/01/18 

498 

 
 
 
Annex F.3 – Clusters of countries 

The  table below  provides  the  detailed  overview of  the  division  of  countries  in  clusters for 
the purpose of the analysis.  

Cluster 

Country 

Air traffic 

Sea traffic 

Netherlands 
United Kingdom 
Italy 
Spain 
Germany 
France  
Belgium 
Luxembourg 
Sweden 
Finland 
Denmark 
Portugal 
Poland 
Ireland 
Austria 
Greece 
Czech Republic 
Hungary 
Romania 
Bulgaria 
Cyprus 
Slovakia 
Latvia 
Lithuania 
Estonia 
Malta 
Slovenia 
Croatia 

1 

2 

3 

4 

Source: Deloitte elaboration based on Eurostat data 

1 831.8 
2 511.0 
977.9 
639.2 
4 467.0 
2 515.5 
1 088.7 
801.1 
147.2 
186.5 
200.1 
136.6 
107.9 
145.8 
223.4 
69.9 
77.7 
77.5 
37.5 
33.0 
28.4 
23.0 
17.9 
14.2 
13.9 
15.7 
9.0 
7.7 

588 772.0 
484 048.0 
461 990.0 
451 255.0 
297 137.0 
292 160.0 
252 666.0 
0.0 
171 324.0 
105 887.0 
95 515.3 
91 344.0 
72 926.0 
50 758.0 
0.0 
165 600.9 
0.0 
0.0 
46 295.0 
28 685.0 
9 478.0 
0.0 
60 962.0 
46 236.0 
33 596.0 
3 788.0 
21 171.0 
18 551.0 

499 

 
 
 
  
 
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•  via EU Bookshop (http://bookshop.europa.eu). 

Priced subscriptions: 

•  via one of the sales agents of the Publications Office of the European Union 

(http://publications.europa.eu/others/agents/index_en.htm). 

500 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
K
P
-
0
1
-
1
8
-
6
3
2
-
E
N
-
N

doi: 10.2778/837209