COMMISSION STAFF WORKING DOCUMENT IMPACT ASSESSMENT REPORT [ ] Accompanying the document Proposal for a Regulation of the European Parliament and of the Council establishing the Union Customs Code and the European Union Customs Authority, and repealing Regulation (EU) No 952/2013
Date: 2023-05-17
Institutions: Directorate-General for Taxation and Customs Union, European Commission
Subjects: EU office or agency, customs regulations, customs territory (EU), customs union, export (EU), import (EU), information system, operation of the Institutions

EN 

  EN 

   EUROPEAN COMMISSION  Brussels, 17.5.2023  SWD(2023) 140 final  COMMISSION STAFF WORKING DOCUMENT  IMPACT ASSESSMENT REPORT  […] Accompanying the document Proposal for a Regulation of the European Parliament and of the Council  establishing the Union Customs Code and the European Union Customs Authority, and repealing Regulation (EU) No 952/2013         {COM(2023) 258 final} - {SEC(2023) 198 final} - {SWD(2023) 141 final}  
 
 
Table of Contents 

1. Introduction ............................................................................................................................................... 6 
1.1 Political Context ....................................................................................................................................... 6 
1.2 Legal context ............................................................................................................................................ 8 
1.3 Background work that will feed the initiative ......................................................................................... 10 

2. Problem definition .................................................................................................................................. 11 
2.1 What is the problem? .............................................................................................................................. 11 
2.2 Why is it a problem? ............................................................................................................................... 16 
2.3 What are the problem drivers? ................................................................................................................ 19 
(i) The inadequacy and excessive complexity of the customs processes .......................................... 19 
(ii) Fragmented and complex customs digitalisation ........................................................................ 22 
(iii) Fragmented Customs Union governance structure .................................................................... 24 
2.4 How likely is the problem to persist? ...................................................................................................... 26 

3. Why should the EU act? ......................................................................................................................... 27 

4. Objectives: What is to be achieved? ...................................................................................................... 28 
4.1 General objective .................................................................................................................................... 28 
4.2 Specific objectives .................................................................................................................................. 28 
4.3 Intervention logic .................................................................................................................................... 29 

5. What are the available policy options? ................................................................................................. 30 
5.1 What is the baseline from which options are assessed? .......................................................................... 30 
5.2 Description of the policy options ............................................................................................................ 31 
5.2.1 Option 1: A package of simpler processes ............................................................................... 31 
5.2.2 Option 2: An EU Customs Authority for coordination ............................................................ 40 
5.2.3 Option 3: A central EU Customs Data Space, managed by the Commission .......................... 41 
5.2.4  Option  4:  An  EU  Customs  Authority  for  coordination  and  operations,  managing  an  EU 

Customs Data Space ......................................................................................................... 44 
5.3 Discarded policy options......................................................................................................................... 46 
5.3.1 Full integration into one EU customs service .......................................................................... 46 
5.3.2 Other discarded options ........................................................................................................... 46 

6. What are the impacts of the policy options? ......................................................................................... 48 
6.1 Methodology of assessment and baseline ............................................................................................... 48 

Baseline  51 

6.2 Option 1: A package of simpler processes .............................................................................................. 52 
6.3 Option 2: EU Customs Authority for coordination ................................................................................. 56 
6.4 Option 3: A central EU Customs Data Space, managed by the Commission ......................................... 58 
6.5  Option  4:  EU  Customs  Authority  for  coordination  and  operations,  managing  an  EU  Customs  Data 

Space ................................................................................................................................................. 61 
6.6 Governance view .................................................................................................................................... 64 
6.7 Impact on Small and Medium-Sized Enterprises .................................................................................... 65 

7. How do the options compare? ................................................................................................................ 66 

8. Preferred option ...................................................................................................................................... 70 
8.1 Option 4 .................................................................................................................................................. 70 
8.2 REFIT (simplification and improved efficiency) .................................................................................... 72 
8.3 Application of the ‘one in, one out’ approach ......................................................................................... 72 

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9. How will actual impacts be monitored and evaluated? ....................................................................... 73 

Annexes ........................................................................................................................................................ 77 

Annex 1 - Procedural Information ............................................................................................................ 78 

Lead DG, Decide Planning/CWP references ............................................................................................ 78 

Organisation and timing ............................................................................................................................ 78 

Consultation of the RSB ............................................................................................................................. 79 

Evidence, Sources and Quality .................................................................................................................. 86 

Annex 2  - Stakeholder Consultation (Synopsis Report) ......................................................................... 89 

1. 

2. 

Consultation strategy ...................................................................................................................... 89 

Methodology and tools for processing the data ............................................................................ 90 

Results of the consultation activities .............................................................................................. 90 
3. 
3.1 Feedback on the call for evidence ........................................................................................................... 90 
3.2 Public Consultation ................................................................................................................................. 91 
3.3 Feedback from targeted consultations ..................................................................................................... 97 
3.4 Ad hoc contributions ............................................................................................................................... 99 

4. 

Taking account of feedback received ............................................................................................ 99 

Annex 3 - Who is affected and how? ....................................................................................................... 100 

1. 
Practical implications of the initiative ......................................................................................... 100 
1.1 EU Services .......................................................................................................................................... 100 
1.2 Member States customs administrations ............................................................................................... 101 
1.3 Businesses and Trade ............................................................................................................................ 101 
1.4 SME Test – Summary of results ........................................................................................................... 103 
1.1 Citizens – Consumers ........................................................................................................................... 105 

3. 
3.1 

Summary of costs and benefits..................................................................................................... 106 
Explanatory notes ............................................................................................................................ 106 

3. Relevant Sustainable Development Goals ........................................................................................... 110 

Annex 4 - Analytical Methods .................................................................................................................. 112 

Annex 5 - Reform building block: reform of the customs processes .................................................... 113 

1. 

Understanding the baseline .......................................................................................................... 113 

2. 

The  shift  in  paradigm  proposed  in  options  1  to  4:  simpler  processes  and  a  more  efficient 
partnership with traders .............................................................................................................. 117 
2.1 A new paradigm .................................................................................................................................... 117 
2.2 Reformed customs processes: potential simplifications for all traders ................................................. 120 
2.3  Reformed  customs  processes  for  certain  reliable  traders  (Trust  and  Check  traders  building  on  the 

AEO scheme) .................................................................................................................................. 122 

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2.4 Specific customs process for low value consignments (e-commerce) .................................................. 125 
2.4.1 Removal of the threshold ....................................................................................................... 126 
2.4.2 Simplified customs duty calculation ...................................................................................... 126 
2.4.3 Liability of the platforms ....................................................................................................... 128 
2.4.4 Extension of IOSS – collection of customs duties on e-commerce goods ............................. 129 
2.5 Supply chain processes – a closer look ................................................................................................. 130 
2.5.1 Transaction phase/pre-consignment ....................................................................................... 130 
2.5.2 Pre-loading ............................................................................................................................. 131 
2.5.3 Pre-Arrival ............................................................................................................................. 131 
2.5.4 Arrival and release ................................................................................................................. 132 
2.5.5 Post-release ............................................................................................................................ 133 
2.5.6 Information environment considerations................................................................................ 133 
2.6 Customs supervision considerations – a closer look ............................................................................. 134 
2.7 Big picture: Simplification .................................................................................................................... 135 

Annex 6 - Reform of the customs union: reforming co-operation – a new framework ...................... 139 

1. 

Understanding the context and baseline ..................................................................................... 139 

Reforming co-operation – a new framework .............................................................................. 142 
2. 
2.1 Policy and law ....................................................................................................................................... 144 
2.2 Data and IT ........................................................................................................................................... 144 
2.3 Prepare a strategy for tackling each policy ........................................................................................... 145 
2.4 Deliver operational work together ........................................................................................................ 145 
2.5 Strong customs governance .................................................................................................................. 146 

Annex 7 - Reform of the customs union: description of the concept of Data Space and the operating 
model  147 

1. 

EU IT customs landscape today ................................................................................................... 147 

2. 
The new IT paradigm – Data Spaces ........................................................................................... 149 
2.1 How will the EU Customs Data Space work in practice? ..................................................................... 150 
2.2 Data management modalities, interoperability, and modes of exchange. ............................................. 151 
2.3 The EU customs Data Space in technical terms .................................................................................... 153 
2.4 Governance ........................................................................................................................................... 157 

3. 

Overview of Transition to customs Data Space .......................................................................... 157 

4. 
Impact of the reform options on EU customs IT costs ............................................................... 161 
4.1 Baseline from which options are assessed ............................................................................................ 163 
4.2 Option 1 – A package of simpler processes .......................................................................................... 167 
4.3 Option 2 – EU Customs Authority for coordination ............................................................................. 170 
4.4 Option 3 – A central EU customs Data Space, managed by the Commission ...................................... 174 
4.5 Option 4 – EU Customs Authority for cooperation and operations, managing an EU Data Space ...... 178 
4.7 Summary of the options ........................................................................................................................ 181 

5. 
Cost estimation model and method for the ICT assessment ...................................................... 183 
5.1 Estimation of Member States costs ....................................................................................................... 183 
5.2 Estimation of Commission and European Customs Authority costs .................................................... 186 
5.3 Estimation of Data Space costs ............................................................................................................. 186 
5.4 Estimation of data projects and micro-applications costs ..................................................................... 188 

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Annex 8 - Introducing an EU Customs Authority ................................................................................. 189 

1.  Why a new EU Customs Authority? ........................................................................................... 189 

2. 

3. 

Role and tasks of the commission in relation to an EU Customs Authority ............................ 189 

Different possible roles for the European Customs Authority .................................................. 191 

4. 
The tasks of the Authority ............................................................................................................ 191 
4.1 Digitalisation, Risk and Crisis management ......................................................................................... 191 
Digitalisation ................................................................................................................................... 191 
Risk management ............................................................................................................................ 193 
Crisis management .......................................................................................................................... 195 
4.2 Coordination and capacity building tasks ............................................................................................. 197 
Performance measurement .............................................................................................................. 197 
Cooperation with other authorities and law enforcement bodies .................................................... 198 
Training and human capacity framework........................................................................................ 198 
Monitoring of Customs authorities and BCPs ................................................................................. 199 
Joint controls and operations ........................................................................................................... 200 
Guidance on processes and working methods ................................................................................. 200 
Classification, valuation, and origin ................................................................................................ 201 
Authorisations ................................................................................................................................. 202 
4.3 Programme management tasks ............................................................................................................. 203 
Customs Control Equipment Instrument ......................................................................................... 203 
Customs programme ....................................................................................................................... 204 

5. 

Other Agencies .............................................................................................................................. 205 

Annex 9 - Assessment of costs and benefits ............................................................................................ 207 

Introduction and Methodology .................................................................................................... 207 
1. 
1.1 Approach taken to assessing costs per stakeholder ............................................................................... 207 
1.1.1 Public administrations (Member States and EU services) ..................................................... 207 
1.1.2 Business and trade .................................................................................................................. 207 
1.1.3 Citizens and consumers .......................................................................................................... 208 
1.2 Approach taken to assessing benefits .................................................................................................... 208 

Timing Assumptions ..................................................................................................................... 210 
2. 
2.1 Assumptions for the phased deployment of the reform ........................................................................ 210 
2.2 Customs Action Plan ............................................................................................................................ 211 

Costs ............................................................................................................................................... 212 
3. 
3.1 Public administration - EU services ...................................................................................................... 213 
3.2 Member States ...................................................................................................................................... 216 
3.2.1 Definition of function categories: .......................................................................................... 219 
3.2.2 Assumptions underlying the FTE adjustment calculation for each Option: ........................... 220 
3.3 Business and trade ................................................................................................................................ 222 
3.3.1 One-off costs – the cost of training for adapting to the new customs processes .................... 222 
3.3.2 Recurrent costs: the financial burden of complying with customs formalities ...................... 222 
3.3.3. Economic operators - IT cost perspective ............................................................................. 229 
3.4 Citizens and consumers ........................................................................................................................ 231 
Citizens and consumers – IT cost perspective ................................................................................ 231 

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4. 
Benefits: Prevention of revenue loss ............................................................................................ 233 
4.1 Understanding the baseline ................................................................................................................... 233 
4.2 Revenue losses ...................................................................................................................................... 233 
4.3 How would the options perform? ......................................................................................................... 235 
4.3.1 Option 1 ................................................................................................................................. 235 
4.3.2 Option 2 ................................................................................................................................. 236 
4.3.3 Option 3 ................................................................................................................................. 237 
4.3.4 Option 4 ................................................................................................................................. 237 

Benefits:  Single market and sustainability (protect as one) ................................................................. 238 
5.1 Toy Safety ............................................................................................................................................. 239 
5.1.1 Context and customs relevance: ............................................................................................. 239 
5.1.2 How would the options perform? ........................................................................................... 241 
5.1.3 Summary indicators ............................................................................................................... 247 
5.2 Eco-design and General Product Safety ................................................................................................ 248 
5.2.1 Context and customs relevance: ............................................................................................. 248 
5.2.2 Scenario assumptions: ............................................................................................................ 250 
5.2.3 How would the options perform? ........................................................................................... 251 
5.2.4 Summary indicators ............................................................................................................... 252 
5.2.4.1 Qualitative benefits ............................................................................................................. 252 
5.2.4.2 Quantitative benefits scenarios ........................................................................................... 254 
5.3 Bamboo ................................................................................................................................................. 255 
5.3.1 Context and customs relevance .............................................................................................. 255 
5.3.2 Understanding the baseline .................................................................................................... 255 
5.3.3 A deeper look: where the current system is falling short ....................................................... 258 
5.3.4 How would the options perform? ........................................................................................... 259 
5.3.5 Summary indicators ............................................................................................................... 262 

Benefits: Security (protection as one)...................................................................................................... 263 
6.1 Context and customs relevance ............................................................................................................. 263 
6.2 Drugs precursors ................................................................................................................................... 263 
6.3 Cigarette smuggling .............................................................................................................................. 266 
6.4 Drugs .................................................................................................................................................... 267 
6.4 The parcel traffic dimension: a growing security risk factor ................................................................ 269 
6.5 How would the options perform? ......................................................................................................... 269 
6.6 Summary indicators .............................................................................................................................. 274 
6.6.1 Qualitative benefits ................................................................................................................ 274 
6.6.2 Quantitative benefits scenarios .............................................................................................. 276 

Summary Tables: Overall comparison of the cost and benefits of the options ................................... 277 
7.1 Option 1 (quantitative) .......................................................................................................................... 278 
7.2 Option 2 (quantitative) .......................................................................................................................... 279 
7.3 Option 3 (quantitative) .......................................................................................................................... 280 
7.4 Option 4 (quantitative) .......................................................................................................................... 281 
7.5 Summary of costs and benefits – comparison of options (quantitative and qualitative) ....................... 283 

Annex 10 - Acronyms and definitions ..................................................................................................... 285 

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1. INTRODUCTION 

1.1 Political Context 

Founded in 1968, the Customs Union manages the external border of the EU by enforcing the 
rules governing the cross-border movement of goods, including by imposing a common tariff 
on  goods  imported  from  third  countries.  It  is  the  basis  and  the  guardian  of  the  EU  Single 
Market,  allowing  goods  to  move  freely  within  the  Union.  It  is  a  European  success  story  that 
shaped the early stages of European integration and today enables the prime position of the EU 
in global trade as one of the largest trading blocs in the world.  

At  its  core  are  the  exclusive  competence  of  the  Union  to  regulate,  and  a  common  legal 
framework  (the  Union  Customs  Code (1),  UCC),  which  is  implemented  by  the  customs 
authorities  of  the  Member  States.  For  ensuring  their  missions,  customs  authorities  use  an 
increasingly  complex  set  of  IT  systems  that  also  allow  the  economic  operators  to  fulfil  their 
obligations by digital means.  

Customs traditionally collect customs duties and other taxes on imports, and despite the global 
decline in tariffs, the collection of duties remains economically significant (EUR 24.8 billion in 
2021). 75% of the collected customs duties are destined to the EU budget, representing 8% of 
the Union budget for 2021.  

The role of customs has evolved over time to cover also non-financial tasks. During the last 
20  years,  non-financial  sectoral  legislation  applicable  to  goods  (so-called  ‘prohibitions  and 
restrictions’) has increased exponentially, in line with growing expectations regarding security, 
sustainability,  safety,  health  and  the  protection  of  human  rights.    In  close  cooperation  with 
other  competent  authorities,  customs  are  the  ‘first  line  of  defence’  to  protect  EU  citizens 
against  non-compliant,  dangerous,  or  counterfeited  goods  from  third  countries,  and  EU 
businesses from unfair competition. Customs further contribute to the fight against smuggling 
of illegal goods and terrorism and defend the EU values and way of life. 

Due to its strategic position at the external border, customs are directly involved in managing 
crisis  situations,  to  ensure  the  smooth  functioning  of  supply  chains  and  to  either  facilitate  or 
restrict the flow of goods. Cooperation between customs administrations of countries of export 
and of import is key for securing international trade. The withdrawal of the United Kingdom 
from the EU and the Covid-19 pandemic presented a significant challenge for businesses and 
customs.  The  trade  sanctions  in  response  to  Russia’s  invasion  of  Ukraine (2)  highlighted  the 
major contribution of customs to the security and strategic autonomy of the EU. The capacity 
to determine and enforce which goods enter and leave the Union is of strategic importance.     

Box 1 – Impact of recent events on the Customs Union 

The withdrawal of the United Kingdom effectively changed the boundaries of the EU Customs Union in 
2021  and  increased  the  realm  of  extra-EU  trade.  The  Customs  Union  had  to  adapt  in  multiple  ways  to 
handle the withdrawal by the end of the transition period on 31 December 2020 (staff increases, logistics, 
operators  registered).  All  customs  IT  systems  automatically  disconnected  UK  as  a  Member  State  on  31 
December 2020 at 23.59 and recognized it as a third country on 1 January 2021 at 00.00. The fourth largest 
Member  State  in  terms  of  imported  items  is  now  Ireland,  which  accounts  for  more  than  8%  of  all  items 

(1)  Regulation (EU) No 952/2013 of the European Parliament and of the Council laying down the Union Customs Code (OJ 

L 269, 10.10.2013, p. 1–101) and its delegated and implementing rules. 

(2)  At the time of writing, for an overall view of the EU sanctions against Russia see here; for a detailed list of the customs-

related measures see here. 

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declared  at  import.  The  combined  effect  of  the  withdrawal  of  the  United  Kingdom  and  the  surge  in  low 
value consignments result in the number of import declarations multiplied by more than 20.  

The  eruption  of  Covid-19  in  February  2020  required  adopting  urgent  measures  for  trade.  This  included 
measures  on  duty  and  tax  relief,  simplified  formalities  and  an  agreement  on  control  priorities  and  a 
common approach to risks at the border. This was vital to accelerate the delivery of urgently needed goods 
while identifying and  blocking substandard or non-compliant  goods (masks,  medicine, sanitizers etc.). (3) 
Customs  authorities  sent  950  alerts  on  fake  products.  In  2021,  the  customs  authorities  enforced  the 
mechanism  for  monitoring  the  export  of  vaccines.  The  pandemic  and  the  associated  lockdown  and 
restriction  measures  severely  affected  the  EU  external  trade  in  goods  in  2020.  The  public  consultation 
revealed  that  the  contribution  of  the  Customs  Union  in  responding  to  the  Covid-19  pandemic  and  its 
socioeconomic consequences is widely perceived as positive by the respondents to the public consultation 
(it is very, quite, or fairly positive for 63.8% of them, while it is negative for only 21%). 

The  implementation  and  enforcement  of  sanctions  the  EU  adopted  against  Russia  and  Belarus  in 
response to the war in Ukraine put a new emphasis on the security dimension of customs work, both for 
import restrictions and export controls. The humanitarian support for Ukraine, as well as the facilitation of 
grain exports demanded resolute work by the customs officers.   

As  any  individual  seaport,  airport  or  land  border  crossing  point  is  the  entrance  to  the  whole 
EU,  the  protection  provided  by  customs  in  one  Member  State  is  at  the  service  of  the  entire 
Union.  The  Customs  Union  is  only  as  strong  as  its  weakest  link.  Yet,  there  are  significant 
differences in the human and financial resources, training, risk analysis capabilities and levels 
of control of the national customs administrations.  

The Customs Union’s capacity to keep pace with modern developments is increasingly under 
pressure. New safety and security threats,  the rise of environmental and human rights-related 
concerns,  and  the  dramatic  increase  of  e-commerce  trade  flows  are  posing  a  significant 
challenge and squeeze customs authorities.  

Meanwhile  big  data,  new  technologies  and  digitalisation  are  opening  new  opportunities  for 
handling and exploiting data for the benefit of all participants in the economy. While customs 
authorities  continue  to  strive  to  develop  solutions,  the  current  completion  of  the  IT  systems 
required  by  the  UCC  will  not  be  enough  to  ensure  the  full  use  of  data  in  order  to  respond 
effectively to existing and future challenges.  

Considering  current  and  future  challenges  and  the  evolving  role  of  customs,  the  President  of 
the European Commission committed to ‘take the Customs Union to the next level, equipping 
it  with  a  stronger  framework  that  will  allow  us  to  better  protect  our  citizens  and  our  Single 
Market’  by  proposing  as  one  of  her  political  priorities (4)  ‘a  bold  package  for  an  integrated 
European  approach  to  reinforce  customs  risk  management  and  support  effective  controls  by 
the Member States’. In September 2022, the Commission laid down a Customs Action Plan (5), 
as a first step until 2025, to turn President von der Leyen’s Political Guidelines into tangible 
benefits for European citizens, businesses, and society.   

The present initiative on the revision of the Union customs legislation proposes an integrated 
European  approach  to  reinforce  customs,  looking  at  the  customs  processes,  the  data 
management and governance framework.  It builds on the Customs Action Plan and is part of 
the Commission Work Programme 2022, under the priority ‘An economy that works for the 

(3)  For an overview of the measures taken by the European Commission in the customs and tax area, see COVID-19 Taxud 

Response (europa.eu).  

(4)  A Union that strives for more - My agenda for Europe: political guidelines for the next European Commission 2019-2024. 
(5)   Communication from the Commission to the European Parliament, the Council and the European Economic and Social 

Committee, Taking the Customs Union to the Next Level: a Plan for Action (COM (2020) 581 final). 

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people’.  By  strengthening  the  EU’s  ability  to  enforce  domestic  requirements  on  imported 
goods,  thereby  ensuring  a  level  playing  field,  this  initiative  will  also  contribute  to  other 
Commission  priorities  such  as  promoting  our  European  way  of  life,  a  European  Green 
Deal, a Europe fit for the digital age and a stronger Europe in the world.  

Figure 1 illustrates the scope and relevance of the Customs Union for broader EU policies and 
the transversal importance of the Customs Union as a shared strategic asset.  

Figure 1 - Policy contribution of Customs Union - illustrative examples – source DG TAXUD 

Economy and Finance

Single Market and 
Sustainability

Security

• Tariffs 
• Quotas
• Anti-dumping
• Excise
• VAT
• Intellectual Property 

Rights

• Ecodesign
• Phytosanitary
• Waste
• Toy Safety
• F-gases
• REACH
• Forced Labour
• Deforestation

• Sanctions, export controls
• Drugs/Precursors
• New psychoactive

substances

• Counter-terrorism
• Firearms
• Explosives

There is  a close nexus between effective customs controls and the implementation of the EU 
trade  policy,  including  trade  defence  (Column  1).  Similarly,  there  is  a  strong  connection 
between  the  contribution  of  customs  to  the  Single  Market  and  the  objectives  of  the  EU 
competition policy, for ensuring a level playing field in the competition between producers in 
the EU and abroad (Column 2). Unless the Customs Union performs optimally, EU producers 
who respect all the rules and regulations applying in the Single Market are not competing on a 
level playing field necessary for securing EU jobs and growth. At the same time, traders need 
to operate smoothly,  simply,  and quickly, without  unnecessary breaks in  the supply  chain.  A 
balance must be found between customs controls and facilitation for legitimate traders. 

1.2 Legal context 

The Union Customs Code (UCC) is the main legal and IT framework for customs processes in 
the  EU  customs  territory.  The  Union  Customs  Code  is  composed  of  a  basic  act  and  a  wide 
range  of  detailed  implementing  acts  and  delegated  acts.  The  customs  authorities  must  also 
contribute  to  enforce  numerous  different  EU  policies  applicable  at  the  external  borders. (6) 
Below  are  listed  the  most  relevant  pieces  of  existing  or  proposed  legislation  to  which  this 
initiative is related: 

-  On  the  financial  side,  the  legislation  on  own  resources  for  the  EU  budget  identifies 
customs  duties  as  a  direct  source  of  revenue  for  the  Union (7),  while  another  set  of  rules 
regulate how these are made available to the Union. (8)  

(6)  The Directorate-General for Taxation and Customs Union (European Commission) published in 2021 an integrated list of 
the  EU  policies  requiring  specific  controls  on  goods  at  the  border,  including  prohibitions  and  restrictions  imposed  on 
imports, exports or goods in transit. 

(7)  Traditional Own Resources or TOR - Council Decision (EU, Euratom) 2020/2053 of 14 December 2020 on the system of 
own resources of the European Union and repealing Decision 2014/335/EU, Euratom (OJ L 424, 15.12.2020, p. 1). 
(8)  Council Regulation (EU, Euratom) No 609/2014 of 26 May 2014 on the methods and procedure for making available the 
traditional,  VAT  and  GNI-based  own  resources  and  on  the  measures  to  meet  cash  requirements  (Recast)  (OJ  L  168, 
7.6.2014, p. 39). 

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-  Also  on  the  financial  side,  the  VAT  rules  apply  on  imported  goods  and  foresee  specific 
measures  on  cross-border  business-to-consumer  (B2C)  e-commerce  sales  from  third 
countries. (9) 

-  On  the  non-financial  side,  the  Market  Surveillance  Regulation (10)  provides  the  legal 
framework  for  risk-based  controls  of  non-food  products  sold  on  the  EU  market,  in 
particular through a systematic cooperation and exchange of information  between  Market 
Surveillance  Authorities  and  customs  authorities  for  detecting  unsafe  or  non-compliant 
products entering the Single Market. Customs will also be called to implement the revised 
General  Product  Safety  Regulation (11)  and  the  new  rules  aimed  to  effectively  ban  the 
placing  on  the  Single  Market  of  products  made  wholly  or  in  part  by  forced  labour, (12) 
once the respective proposals are adopted. 

- 

In  the  field  of  environmental  legislation,  Customs  are  involved  in  the  enforcement  of 
numerous  rules  inter  alia  on  chemicals (13),  the  protection  of  species  of  wild  fauna  and 
flora (14),  the  fight  against  climate  change  by  minimising  the  use  and  emissions  of 
dangerous  substances (15)  (16).  Customs  will  also  be  called  on  to  apply  new  EU  rules  to 
curb  deforestation (17)  and  treat  waste  shipments (18).  Moreover,  the  Sustainable  Products 
Initiative (19)  proposal  calls  on  Customs  to  cross-check  the  customs  declaration  with  the 
information  on  the  imported  goods  contained  in  the  newly  created  digital  passport  for 
products, to reduce the negative life cycle environmental impacts of products placed on the 
Single Market. The proposal to establish a Carbon Border Adjustment Mechanism (20) 
will help ensure that the EU's climate objectives are not undermined by the risk of carbon 
leakage and encourage producers in non-EU countries to green their production processes. 
The mechanism applies to imported goods, and customs supports the enforcement.  

(9)  Council Directive (EU) 2017/2455 of 5 December 2017 amending Directive 2006/112/EC and Directive 2009/132/EC as 
regards certain value added tax obligations for supplies of services and distance sales of goods (OJ L 348, 29.12.2017, p. 
7). 

(10)  Regulation (EU) 2019/1020 of the European Parliament and of the Council of 20 June 2019 on market surveillance and 
compliance of products and amending Directive 2004/42/EC and Regulations (EC) No 765/2008 and (EU) No 305/2011 
(OJ L 169, 25.6.2019). 

(11)  Proposal for a Regulation of the European Parliament and of the Council on general product safety, amending Regulation 
(EU)  No  1025/2012  of  the  European  Parliament  and  of  the  Council,  and  repealing  Council  Directive  87/357/EEC  and 
Directive 2001/95/EC of the European Parliament and of the Council (COM(2021)346). 

(12)  Proposal for a Regulation of the European Parliament and of the Council on prohibiting products made with forced labour 

on the Union market (COM (2022) 453 final). 

(13)  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  91/155/EEC, 
93/67/EEC, 93/105/EC and 2000/21/EC. 

(14)  Council  Regulation  (EC)  No  338/97  of  9  December  1996  on  the  protection  of  species  of  wild  fauna  and  flora  by 

regulating trade therein (OJ L 61, 3.3.1997, p. 1). 

(15)  Regulation (EU) No 517/2014 of the European Parliament and of the Council of 16 April 2014 on fluorinated greenhouse 

gases and repealing Regulation (EC) No 842/2006 (OJ L 150, 20.5.2014, p. 195). 

(16)  Regulation (EC) No 1005/2009 of the European Parliament and of the Council of 16 September 2009 on substances that 

deplete the ozone layer (OJ L 286, 31.10.2009, p. 1). 

(17)  Proposal for a Regulation of the European Parliament and of the Council on the making available on the Union market as 
well as export from the Union of certain commodities and products associated with deforestation and forest degradation 
and repealing Regulation (EU) No 995/2010 (COM (2021) 706). 

(18)  Proposal  for  a  Regulation  of  the  European  Parliament  and  of  the  Council  on  shipments  of  waste  and  amending 

Regulations (EU) No 1257/2013 and (EU) No 2020/1056 (COM/2021/709 final). 

(19)  Proposal for a Regulation of the European Parliament and of the Council establishing a framework for setting ecodesign 

requirements for sustainable products and repealing Directive 2009/125/EC (COM/2022/142 final). 

(20)  Proposal  for  a  Regulation  of  the  European  Parliament  and  of  the  Council  establishing  a  carbon  border  adjustment 

mechanism (COM (2021) 564). 

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-  On the enforcement side, the legal basis for mutual assistance among national authorities 
and with the European Commission regarding the application of customs and agricultural 
legislation  provides  for  relevant  measures.  They  include  the  rules  for  preventing, 
investigating,  and  prosecuting  customs  fraud (21)  and  the  operational  cooperation 
framework  between  Member  States’  and  EU’s  law  enforcement  authorities  and  bodies 
aimed to ensure security inside the EU against e.g., drug and illicit firearms trafficking. (22) 

-  The new Digital Services Act sets clear obligations for digital service providers to tackle 
illegal  content,  which  results  in  strengthened  traceability  and  checks  on  traders  in  online 
marketplaces to ensure products placed on the Single Market are safe. (23)   

1.3 Background work that will feed the initiative 

A  foresight  report  published  in  2020  elaborated  four  scenarios  of  how  customs  in  the 
European Union could look in 2040, (24) resulting in a vision where in 2040 customs in the 
EU ‘fully protect society, the environment and the EU economy through effective facilitation of 
legitimate  trade,  and  intelligent,  risk-based  supervision  of  supply  chains…are  proactive, 
working  seamlessly  with  our  stakeholders  and  are  committed 
innovation  and 
sustainability… and are seen to act as one’. The foresight report recommends addressing the 
governance challenge of the Customs Union by giving preference to a joint, central structure in 
order to speak with one voice, to leverage technological advancements and to make the most 
effective  use  of  customs’  data.  Business  support  and  trade  facilitation  should  be  delivered 
through  a  fully  integrated  IT  customs  system,  the  Single  Window  Environment  for 
Customs (25) and a common EU sanctions system.  

to 

The Commission adopted the Customs Action Plan (CAP) (26) as its response to the foresight 
report and to implement the political guidelines of President von der Leyen. The plan sets out a 
series  of  actions  for  a  more  coherent  and  stronger  Customs  Union to  be completed  by  2025. 
The  actions  focus  on  four  areas  of  intervention:  risk  management,  e-commerce,  compliance, 
and the Customs Union acting as one. The CAP precedes, prepares, and announces the reform:  

-  Under  Action  7  of  the  CAP,  the  Commission  conducted  an  evaluation  of  the 

implementation of the UCC (27), which revealed a number of problems.  

-  Action 17 announces a Reflection Group ‘to consider how to make the Customs Union 
smarter,  more  agile,  more  technologically  advanced  and  more  crisis-proof’,  and  an 

(21)  Council Regulation (EC) No 515/97 of 13 March 1997 on mutual assistance between the administrative authorities of the 
Member  States  and  cooperation between  the  latter  and  the  Commission  to  ensure  the  correct  application  of  the  law  on 
customs and agricultural matters (OJ L 82, 22.3.1997, p. 1). 

(22)  More information on Operational cooperation (europa.eu) 
(23)  Regulation (EU) 2022/2065 of the European Parliament and of the Council of  19 October 2022 on a Single Market For 
Digital  Services  and  amending  Directive  2000/31/EC  (Digital  Services  Act)  (Text  with  EEA  relevance)  (OJ  L  277, 
27.10.2022, p. 1–102). 

(24)  Ghiran,  A.,  Hakami,  A.,  Bontoux,  L.  and  Scapolo,  F.,  The  Future  of  Customs  in  the  EU  2040:  EUR  30463  EN, 

Publications Office of the European Union, Luxembourg, 2020. 

(25)  Regulation  (EU)  2022/2399  of  the  European  Parliament  and  of  the  Council  of  23  November  2022  establishing  the 
European  Union  Single  Window  Environment  for  Customs  and  amending  Regulation  (EU)  No  952/2013  (OJ  L  317, 
9.12.2022, p. 1–23).   

(26)  Communication from the Commission to the European Parliament, the Council and the European Economic and Social 
Committee  “Taking  the  Customs  Union  to  the  Next  Level:  a  Plan  for  Action”,  COM/2020/581  final.  This  includes 
measures to make EU customs smarter, more innovative and more efficient and proposes steps such as improved use of 
data,  better  tools  and  equipment,  the  promotion  of  compliance,  more  cooperation  within  the  EU  and  with  customs 
authorities of partner countries and better preparation for future crises. 

(27)  Commission  staff  working  document  on  the  interim  evaluation  of  the  implementation  of  the  Union  Customs  Code 

(SWD/2022/0158 final). 

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impact assessment ‘on the pros and cons of an agency approach covering a number of 
customs domains’.  

Furthermore, the present initiative takes account of the recommendations by the Wise Persons 
Group. This independent group conducted stakeholder hearings and produced a report on the 
challenges facing the Customs Union. (28) The report concludes that ‘the Customs Union is not 
“fit  for  purpose’  and  that  ‘the  EU  Single  Market  is  at  risk’.  ‘These  shortcomings  call  for  an 
urgent structural change, which, building on the reforms already undertaken, would bring the 
Customs  Union  to  the  next  level.’  The  group  presented  ten  concrete,  inter-related 
recommendations  as  a  package:  they  address  the  need  to  use  and  cross-check  all  sources  of 
data,  to  enhance  drastically  the  cooperation  with  other  authorities,  to  provide  a  centralised 
customs  governance,  to  enhance  relationships  with  the  economic  operators  through  more 
facilitation in exchange of greater transparency and responsibility, to cope with e-commerce, to 
develop green customs, customs training, and a focus on the revenue gap.  

Finally,  the  current  initiative  also  aims  to  further  address  the  shortcomings  identified  by  the 
European  Court  of  Auditors  regarding  specific  issues  in  the  legal  framework  and 
implementation  for  import  procedures (29),  delays  in  IT  development (30),  and  insufficient 
harmonisation  in  customs  controls  that  hamper  the  EU  financial  interest (31),  beyond  the 
immediate steps already taken.  

2. PROBLEM DEFINITION 

2.1 What is the problem? 

The  current  system  is  not  satisfactory.  It  is  burdensome  for  legitimate  trade.  And  customs 
authorities  struggle  in  their  mission  to  protect  the  EU,  its  financial  interests,  citizens, 
enterprises, the Single Market, and the environment. There are five problem areas: 

(i) Customs authorities struggle in their mission to protect the EU 

Since only a small share of imports and exports can be physically controlled, customs collect 
and  analyse  relevant  information  to  identify  risks  and  to  determine  the  control  action.  This 
makes  the  risk  management  a  determining  factor  in  each  Member  State.  However,  customs 
risk  management  today  is  not  entirely  adequate  to  allow  the  customs  authorities  to  fulfil  its 
mission  at  EU  level,  because  national  risk  management  is  defined  according  to  the  national 
circumstances, priorities and IT system capabilities without an EU dimension of risks, even if 
there is a common risk framework.  

-  On  financial  risks,  the  European  Court  of  Auditors  identified  structural  challenges  on 
the risk management of financial risks: (32) the lack of uniform application of customs 
controls  and  of  harmonised  risk  management  and  analysis  hampers  EU  financial 
interests.  It  limits the correct  establishment and  collection of the customs duties.  This 

(28)  The Wise Persons Group on the challenges facing the  Customs Union was composed by 12 high-profile members  with 
experience, in the public or the private sector, of customs matters, e-commerce, risk management, the international supply 
chain,  IT  and  data  analytics  internal  market  legislation  and  international  trade  law.  The  group,  led  by  Mrs.  Arancha 
González Laya, former Minister of Foreign Affairs, European Union and Cooperation of Spain, conducted hearings with 
48 interlocutors and an open consultation. The report was published on 30 March 2022. 

(29)  ECA  special  report  No  19/2017:  Import  procedures:  shortcomings  in  the  legal  framework  and  an  ineffective 

implementation impact the financial interests of the EU 

(30)  ECA special report No 26/2018: A series of delays in Customs IT systems: what went wrong? 
(31)  ECA special report No 4/2021: Customs controls: insufficient harmonisation hampers EU financial interests  
(32)  ECA special report No 4/2021: Customs controls: insufficient harmonisation hampers EU financial interests  

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results  in  a  loss  of  revenue  to  the  EU  budget  (section  2.2)  and  fails  to  protect  EU 
production and legitimate trade from unfair competition. 

-  On  non-financial  risks,  the  current  risk  management  framework  does  not  adequately 
address the increasing number of  non-financial issues of concern for EU citizens  in  a 
globalised world (human rights, labour rights, sustainability, environmental protection, 
health, safety,  peace,  and security,  etc.).  The current  performance on prohibitions and 
restrictions is weak. For example, Member States reported very low figures of refusals 
in  the  field  of  product  compliance. (33)  As  a  result,  non-compliant  products  enter  the 
EU Single Market, some of which might entail safety and security risk with potentially 
severe  consequences. Customs  supervision  helps detect criminal  activities that  exploit 
legitimate trade flows (section 2.2).  

An additional difficulty is that customs must work with other authorities across a wide range 
of  challenges,  but  the  quality  and  effectiveness  of  this  co-operation  is  often  sub-optimal  and 
varies across the EU. The UCC interim evaluation reveals that ‘the fact that the specific rules 
are the responsibility of other authorities (European or national / regional) is considered as a 
source  of  problems  when  coordination  is  missing.’ (34)  The  boundaries  between  the  roles  of 
Customs (generalists) and the large number of sectoral  authorities (specialists) are defined in 
the sectoral legislation and are not always aligned with customs operational concepts. Customs 
is in the lead for co-ordinating controls at the border, but at EU level, there is no common risk 
management, strategy building or coordinated action with other competent authorities. Even at 
national  level,  the  performance  of  this  co-operation  is  weak.  For  example,  in  the  field  of 
product compliance, Member States report (35) a high share of cases where customs stop goods 
but  must  release  them  again  because  the  sectoral  authority  did  not  respond  within  the  legal 
deadline.  (36) 

The cooperation problems between customs and non-customs authorities are confirmed by the 
business respondents in the public consultation, who consider that a more effective sharing of 
information and data between national customs administrations and other authorities enforcing 
product  requirements  on  imported  goods  is  the  third  most  important  priority  (very  important 
for 114 (59%), quite important for 48 (25%)). Customs in the EU rely also on cooperation with 
and  information  from  countries  outside  the  EU.  The  potential  of  cooperation  with  the  EU’s 
closest  partners  could  be  exploited  more  effectively,  in  particular  through  the  exchange  of 
information leading to better risk assessment and fighting the infringement or circumvention of 
trade rules. This has become more apparent in the context of the enforcement of the sanctions 
adopted vis-à-vis Russia following its attack on Ukraine.  

(33)  Source: ‘Report on controls on products entering the Union market with regard to product compliance in 2021’ drawn up 
in accordance with Article 25(6) of Regulation (EU) 2019/1020 on market surveillance and compliance of products; This 
report  is  marked  as  sensitive  and  accordingly  not  publicly  available  in  accordance  with  the  provisions  of  Article  4  of 
Regulation (EU) 1049/2001. 

(34)  ‘The  necessary  coordination  to  ensure  that  prohibitions  and  restrictions  are  enforced  consistently  (e.g.  in  terms  of  data 
requirements,  document  formats,  digitalisation,  the  timing  and  arrangements  for  carrying  out  controls,  etc.)  between 
customs  and  the  competent  authorities  and  the  competent  authorities  for  the  sectoral  legislation  (such  as  market 
surveillance, phytosanitary requirements etc.) is limited, as it is mainly organised only via consultation activities.’ UCC 
interim evaluation  

(35)  Source: ‘Report on controls on products entering the Union market with regard to product compliance in 2021’ drawn up 
in accordance with Article 25(6) of Regulation (EU) 2019/1020 on market surveillance and compliance of products; This 
report  is  marked  as  sensitive  and  accordingly  not  publicly  available  in  accordance  with  the  provisions  of  Article  4  of 
Regulation (EU) 1049/2001. 

(36)  EU  Regulation  2019/1020,  customs  must  release  goods  it  suspended,  if  the  market  surveillance  authorities  have  not 

requested to maintain suspension or reached other conclusions. 

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(ii) Compliance with customs formalities is burdensome for legitimate trade 

For  every  consignment,  traders  and  carriers  must  collect  the  information  several  times  and 
submit it to customs through dedicated IT systems, as described in the driver (section 2.3). The 
cost of these formalities for trade was recently brought into focus by Brexit.  The Netherlands 
estimated in 2018 that the additional costs due to customs formalities between the Netherlands 
and the UK would range between EUR 387.2 million and EUR 627 million per year, and that 
simplifying  or  eliminating  some  formalities  could  reduce  this.  In  2019,  UK  priced  the 
administrative burden of completing customs declarations for its trade in goods with the EU at 
£ 7.5 billion. (37) The cost for trade is assessed in Annex 9, section 3.3.  

(iii) The customs model is not fit for e-commerce 

Today, e-commerce represents more than twice the number of traditional trade transactions for 
only  0.4 %  of  the  value. (38)  This  high  number  of  transactions  for  a  low  value  represents  a 
challenge  both  for  customs,  which  cannot  properly  supervise  them,  and  for  operators,  which 
must comply with several reporting obligations per parcel.  

Parcels valued up to EUR 150 that are directly sent from a third country to a consignee in the 
EU  are  exempt  from  customs  duties. (39)  Until  2021,  there  was  also  a  VAT  exemption  on 
imported  goods.  However,  the  Council  decided  to  eliminate  the  VAT  exemption  to  protect 
Member States' tax revenue, to create a level playing field for the businesses concerned and to 
minimise burdens on them.  (40) Accordingly, from July 2021, all imported goods are subject to 
VAT and covered by a digital customs declaration, including for goods valued up to EUR 150 
for which no customs duties are due.  

However, despite each parcel from July 2021 being reported to customs, customs authorities do 
not  have  the  information  to  efficiently  control  whether  the  imported  goods  comply  with  EU 
non-financial  requirements.  Even  checking  compliance  with  financial  requirements  is 
challenging for customs. There is evidence of the systematic abuse of the 150 EUR threshold 
through  undervaluing  and  splitting  consignments.  A  study  conducted  by  Copenhagen 
Economics in 2016 estimated that about 65% of the e-commerce consignments are undervalued 
in  terms  of  customs  duties. (41)  In  its  special  report  on  import  procedures (42),  the  European 
Court of Auditors (ECA) concluded that the current customs IT clearance systems are not able 
to  prevent  the importation of goods that are ineligible for the customs duty  relief, and this is 
not compensated for by ex-post controls and investigation plans. (43)  

(37)  HMRC impact assessment for the movement of goods if the UK leaves the EU without a deal (third edition)  - GOV.UK 

(www.gov.uk) 

(38)   From July to December 2021 – the first six months of compulsory customs declaration for all goods imported into the EU 
irrespective of their value – traditional trade in goods represented over 220 million import declarations for a value of EUR 
1 250 billion. In contrast, the Commission Surveillance system (SURV) recorded 490 million customs declarations related 
to  e-commerce  consignments,  for  a  total  declared  value  of  EUR  4.8  billion.  The  amount  of  the  value  for  e-commerce 
consignments  is  estimated  to  be higher  than  EUR 4.8 billion, because  this  only  concern  consignments  accompanied  by 
customs declarations. In fact, between July and October 2021, certain postal consignments  with a value up-to EUR150 
could be declared by any other act, i.e. without a formal customs declaration. In addition, some Member States had initial 
problems  with  the  SURV  reporting  of  the  simplified  declaration  data  for  e-commerce  consignments  (so  called  ‘H7 
declaration’). 

(39)  Article 23 of Duty Relief Regulation (Council Regulation 1186/2009 (Official Journal L 324 of 10/12/2009, p.1). 
(40)  Council Directive (EU) 2017/2455, see footnote 9. 
(41)   Copenhagen Economics (2016), E-commerce imports into Europe: VAT and Customs treatment. 
(42)   ECA  Special  Report  No.  19/2017  Import  procedures:  shortcomings  in  the  legal  framework  and  an  ineffective 

implementation impact the financial interests of the EU 

(43)   ECA Special Report no 12/2019, points 81-88. 

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Competition  is  therefore  distorted.  The  duty  exemption  favours  third  country  e-commerce 
operators  over  traditional  trade  and  EU  retailers,  which  must  pay  customs  duties  when 
importing  in  bulk,  and  encourages  the  establishment  of  e-commerce  distribution  centres 
outside the EU.  

 (iv) Limited data quality, access, and analysis  

Customs risk analysis and controls rely on data. While most exchanges today are fully digital, 
there  are  problems  with  the  collection,  analysis  and  sharing  of  data.  The  declarant  or 
representative  compiles  and  submits  information  about  a  consignment  from  different  supply 
chain  actors,  making data integration difficult  and compromising data coherence and quality.  
The  current  customs  processes  require  the  data  to  be  submitted  to  different  national  and 
common systems and the related Member States. (44) The Wise Persons Group also noted ‘the 
different IT systems are often not interconnected. Data are not transferred from a declaration 
to  another.’ (45)  The  information  requested  in  a  customs  declaration  focuses  primarily  on 
financial  risks.  Introducing  additional  information  requirements,  for  example  about  the 
manufacturer, requires significant modifications to the 27 national IT systems. Indeed, the data 
is  processed  in  separate  national  IT  systems  for  each  type  of  declaration.  Therefore,  the 
information is fragmented across different data bases and systems, making it difficult to ensure 
coherence  and data  integrity, which is  essential in  customs risk management,  particularly  for 
risk analysis at EU level. This reduces the capacity of customs to address undervaluation, non-
compliance, or security risks (section 2.3).  

Furthermore, the lack of a comprehensive legal framework in the UCC on exchange and use of 
data  hampers  its  adequate  sharing  between  national  customs  and  with  the  Commission,  with 
other  authorities,  or  with  partner  countries.  Overall,  the  UCC  IT  systems  are  designed  for 
exchanging  messages  on  a  specific  process  step.  This  leads  to  exchanges  of  data  elements 
without context which often makes them meaningless for data analysis.  

The European Court of Auditors identified several reasons for the increased cost and additional 
time necessary to build the UCC systems. (46) The UCC evaluation draws a mixed picture of 
the IT implementation, with positive aspects on the centrally developed components. (47)  

 (v) Member States diverge significantly in the application of the customs rules 

There  is  increasing  evidence  of  these  divergent  practices  in  similar  situations  and  despite 
applying  the  same  rules,  the  Union  Customs  Code  (UCC).  In  2021,  the  ECA  published  its 

(44)  For the UCC IT architecture see Commission Implementing Decision (EU) 2019/2151 of 13 December 2019 establishing 
the  work  programme  relating  to  the  development  and  deployment  of  the  electronic  systems  provided  for  in  the  Union 
Customs Code (OJ L 325, 16.12.2019, p. 168). Other customs systems exist beyond the UCC, such as in the field of risk 
management and prohibitions and restrictions.  

(45)   The  Wise  Persons  Group  therefore  recommended  a  new  approach  to  data:  rather  than  relying  principally  on  customs 
declarations, to introduce a new approach to data, focussed on obtaining better quality data based on commercial sources, 
ensuring  it  is  cross-validated  along  the  chain,  better  shared  among  administrations,  and  better  used  for  EU  risk 
management. See report of the Wise Persons Group on the reform of the EU Customs Union 

(46)  One of the aspects is the implementation approach ‘The development approach selected was mostly decentralised. This 
was despite the fact that centralised implementation was the most cost efficient option’ ECA Special Report 26/2018, A 
series of delays in Customs IT systems: what went wrong? 

(47)  ‘The  general  view  of  the  stakeholders  (especially  of  the  businesses)  consulted  in  the  context  of  the  external  study  for 
achieving the full harmonisation of customs procedures and processes would be to rely entirely on common, centralised 
trans-European IT systems and to avoid the decentralised approach, which is not seen as ideal, mainly for its complexity. 
However,  as  national  customs  systems  already  existed  before  the  UCC  with  significant  investments  from  the  Member 
States  to  cover  their  needs,  the  starting  point  for  developing  the  IT  systems  has  not  always  allowed  the  choice  of  the 
centralised approach: the transition costs would have been too high while the common solutions would not meet all needs 
and requirements as well as the existing national ones.’ UCC evaluation  

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report (48)  on  ‘Customs  controls:  insufficient  harmonisation  hampers  EU  financial  interests’ 
concluding that Member States differ significantly in the way they carry out risk management 
and  customs  controls,  warning  that  ‘This  could  allow  non-compliant  operators  to  target  EU 
points  of  entry  with  lower  levels  of  controls’.  The  same  conclusion  results  from  two  of  the 
actions  outlined  in  the  CAP,  namely  the  interim  evaluation  of  the  UCC (49)  in  2021  and  the 
Commission  report  on  the  methods  and  penalties  for  addressing  non-compliance  with  the 
customs  legislation. (50)  These  reveal  that  the  UCC  rules  on  simpler  methods  for  providing 
information  to  customs,  on  risk  management,  on  monitoring  economic  operators  considered 
trustworthy (Authorised Economic Operators, AEO) and on penalties leave the Member States 
considerable discretion so that divergent practices emerge, and infringing the same UCC rule 
may entail an administrative penalty in one Member State and constitute a criminal offence in 
another. (51)  

Businesses  confirm  the  divergent  application  of  the  UCC.  In  a  large  survey  for  an  external 
study on AEO (almost 2000 replies), 28% of the 900 trustworthy operators active in more than 
one Member State consider that some of the benefits can vary significantly from one Member 
State to another. (52) In the public consultation, business representatives regularly dealing with 
multiple customs offices found that Member States execute similar operations in different ways 
also  in  other  areas  such  as  timing  of  clearance  procedure,  approach  to  representation,  and 
interpretation of basic definitions and rules. For these business respondents, the most important 
goals  to  achieve  in  a  customs  reform  are  customs  to  act  as  one,  in  order  to  improve 
predictability for businesses, and simpler processes. 

Every national customs administration is responsible for its part of the Customs Union and the 
Customs  Union  does  not  have  structural  capabilities  with  a  mandate  to  identify  common 
priorities  and  allocate  efforts  to  pursuing  these  priorities  through  coordinated  action.  The 
voluntary cooperation and limited joint actions have not delivered a uniform approach. This is 
even  more  obvious  where  the  EU  needs  to  react  to  geopolitical  developments.  The  Customs 
Union is not sufficiently fit for the challenges posed by globalisation and digitalisation, nor has 
it been prepared for the green transition.  

The  five  problem  areas  are  related  and  limit  customs’  ability  to  fulfil  its  role,  with  negative 
consequences  (section  2.2).  Although  there  are  external  factors,  the  cause  of  these  problems 
can be found in the customs  processes, data analysis  and the  governance framework (section 
2.3 on drivers). 

(48)  ECA Special Report 04/2021, paragraph 62.  
(49)  See the conclusions of UCC evaluation, page 51 onwards. 
(50)  Commission report to be published. 
(51)  For  example,  Article  51  UCC  provides  for  the  following  infringement:  “Failure  of  an  economic  operator  to  keep  the 
documents and information related to the accomplishment of customs formalities by any accessible means for the period 
of  time  required  by  customs”.  As  penalty  to  this  violation,  12  Member  States  impose  an  administrative  sanction,  5 
Member States provide for both criminal and administrative sanctions, one Member State does not provide for a sanction 
and 9 Member States provide for criminal sanctions. 

(52)  Study  on  the  Authorised  Economic  Operator  programme,  Oxford  Research,  Ipsos,  Wavestone,  CT  Strategies  and 
Economisti  Associati,  2022.  The  final  report  is  not  yet  accepted.  Of  the  863  replies  (out  of  1973  total  replies)  to  the 
question  if  AEO  benefits  were  implemented  differently  between  Member  States,  over  half  (53%)  were  not  able  to 
respond, while for 28% benefits across Member States differed at least to some extent (for 18% there were no noticeable 
differences). 

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2.2 Why is it a problem? 

Because  of  these  problems  (i)  not  all  customs  duties  are  collected,  (ii)  dangerous,  non-
compliant  or  counterfeit  products  still  enter  or  exit  the  EU  Single  Market,  and  (iii)  illegal 
goods are smuggled into the EU. 

(i) Loss of revenue  

Customs  duties  on  imported  goods  are  a  Traditional  Own  Resource  for  the  EU  budget  and 
contributed EUR 18.6 billion in 2021. Where goods are imported without paying the full and 
correct customs duty (and VAT on import),  this undermines the financial interests of the EU 
and  its  Member  States.  This  is  often  referred  to  as  the  ‘customs  gap’. (53)  While  a  precise 
quantification  is  not  yet  available,  a  recent  example  gives  an  impression  of  the  scope. 
Investigations  by  OLAF  discovered  that  textiles  and  footwear  from  China  were  imported  on 
falsely  low  values  for  years,  including  by  abusing  the  ‘customs  procedure  42’  -  a  business 
facilitation  under  which  customs  duties  are  paid  at  importation  and  VAT  is  paid  later  in  the 
Member  State  of  destination. (54)  As  mentioned  above,  imports  are  often  undervalued. 
Furthermore, not all duties assessed are paid - the established and estimated amount of unpaid 
duties  was  EUR  523.8  million  in  2021.  Another  example  is  a  recent  pilot  reporting  exercise 
involving  20  Member  States.  During  post-release  controls,  irregularities  amounting  to  EUR 
512.6 million in duties and VAT at import in 2021 were detected. (55)  

(ii) Non-compliant and dangerous products enter the EU Single Market 

This concerns rules and standards in the EU, which also apply to goods that are imported. For 
example,  rules  on  product  safety,  chemicals,  food,  contact  materials,  and  other  health  or 
environmental considerations. There are serious weaknesses in the control of products entering 
the EU, which puts at risk the safety and security of EU citizens. Notified problems are three 
times  more  often  identified  on  imported  than  on  EU-manufactured  products. (56)  Studies  and 
enforcement  actions  on  the  EU  market  consistently  show  the  high  non-compliance  rates  of 
imported products in different manufacturing sectors, such as chemicals (57) or toys (58), with 

(53)  The  Commission  is  working  on  a  methodology  to  estimate  this  amount,  which  results  from  phenomena  such  as 

undervaluation, misdeclaration of the origin and misclassification of the goods, and smuggling. 

(54)  The largest of OLAF’s investigations concerned imports through the UK between 2013 and 2016. See European Court of 
Justice  Case  C-213/19  European  Commission  v  United  Kingdom  of  Great  Britain  and  Northern  Ireland.  The  abuse  of 
customs,  procedure  42  was  also regularly  highlighted  by  the  European  Court of  Auditors  (see  ECA,  Special  Report  no 
13/2011, Does the control of customs procedure 42 prevent and detect VAT evasion? ECA Special Report no 19/2017; 
ECA Special Report no 12/2019). 

(55)  Customs Union Performance (CUP) report 2021. 
(56)  According to data from RAPEX/Safety gate from 2011 to 2021, between 75 and 77% of the total notifications concerned 
products with an origin outside the EU/EEA. This figure seems stable over the years: from 2010 to 2016, while imported 
products represented 30% of EU consumption, 75% of them were the object of an alert in RAPEX/Safety Gate (see also: 
Commission  staff  working  document  refit  evaluation  Accompanying  the  Proposal  for  a  Regulation  of  the  European 
Parliament  and  of  the  Council  laying  down  rules  and  procedures  for  compliance  with  and  enforcement  of  Union 
harmonisation legislation on products (SWD/2017/0469). In addition to the above, more than half of respondents to public 
consultations carried out in this context have experienced non-compliance of products imported from non-EU countries 
and agree on making more controls on products entering the EU. 

(57)  Based on the latest REACH and CLP enforcement report, up to 28% of imports are not compliant with REACH and the 
Classification,  Labelling  and Packaging  (CLP)  Regulation.  The  Commission  Communication  on  chemicals  strategy  for 
sustainability towards a toxic-free environment currently states that almost 30% of the alerts on dangerous products on the 
market involve risks due to chemicals, with almost 90% of those products coming from outside the EU20. According to a 
recent CEFIC (European Chemical Industry Council) report, in 2020 80 % of non-compliant articles containing banned or 
restricted chemicals comes from outside the EU/EEA. 

(58)  Over  the  period 2016-2021,  dangerous  toys  found on  the  EU  market  represented  more  than  a  fourth  of  total  RAPEX  / 
Safety  Gate  alerts,  with  a  significant  proportion  of  unsafe  toys  originating  from  non-EU  countries  (85%  from  China 
alone).  See Impact assessment study on a possible revision of the Toy Safety Directive 2009/48/EC  – VVA, CSES and 
Asterisk Research and Analysis, September 2022. 

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particular  concerns  in  the  area  of  e-commerce. (59)  In  the  public  consultation  on  this  reform, 
128  respondents  (68%)  considered  it  easy  to  buy  non-compliant  or  counterfeit  goods 
online. (60)   

In 2019, consumers suffered financial loss of a total estimated value of EUR 19.3 billion from 
purchasing  unsafe  products  that  they  would  not  have  purchased  if  they  knew  these  products 
were unsafe and should not have been on the market in the first place; (61) this loss is expected 
to reach EUR 20.8 billion by 2025 and almost EUR 22 billion by 2034. (62) Total detriment to 
EU consumers and society from product-related injuries and premature deaths is estimated to 
be  EUR  76.6  billion  per  year;  perhaps  15%  of  accidents  could  have  been  prevented  if  the 
products  were safe  (implying preventable damage due to  product-related  accidents  of  around 
EUR 11.5 billion per year). (63)  

An  OECD  study  on  counterfeited  goods  estimates  that  for  2019,  imports  of  counterfeit  and 
pirated  products  into  the  EU  amounted  to  EUR  119  billion  –  up  to  5.8%  of  all  EU 
imports. (64)  From  2017  to  2019,  there  were  almost  230  000  seizures  of  dangerous  goods 
entering the EU. (65) The study estimates the global problem at 2.5% of world trade. About one 
third of counterfeited and pirated goods are dangerous fakes (food, medicine, cosmetics, toys, 
etc). 

Imports of counterfeit and pirated products into the EU translate into a loss of profit, jobs and 
revenues of legitimate businesses. (66) This issue is particularly relevant for small and medium 
size enterprises (SMEs): for example, an estimated 99% of the EU’s toy companies were SMEs 
as of 2020, employing about 2/3 of the sector; this industry faces persistent unfair competition 
from non-compliant toy imports. A case study on toys is included in Annex 9. 

Also, exports must comply with the rules. For example, the EU controls the export of dual-use 
items  to  prevent  the  proliferation  of  weapons (67),  waste  shipments  to  ensure  that  waste  is 
managed  in  an  environmentally  sustainable  way (68)  and,  further  to  the  Covid-19  pandemic, 
monitors the export of vaccines to third countries. (69)  

(59)  See for example BEUC, Two-thirds of 250 products bought online fail to meet safety tests, February 2020; Products from 

online marketplaces continue to fail safety tests, March 2022. 

(60)  Furthermore, only 10.4% of the respondents consider that the Customs Union has a very positive contribution in ensuring 
compliance  with  EU  standards  (animal  and  plant  health,  product  safety,  environment  protection),  and  just  3%  of  them 
think the same regarding compliance with intellectual property rights and industrial protection rules.   

(61)   Impact assessment accompanying the document ‘Proposal for a Regulation of the European Parliament and of the Council 

on general product safety’ (SWD (2021) 168 final), p.11. 

(62)   Ibid, p.31 
(63)   Ibid, p.11. 
(64)  OECD/EUIPO (2021), Global Trade in Fakes: A Worrying Threat, Illicit Trade, OECD Publishing, Paris. 
(65)  OECD/EUIPO (2022), Dangerous Fakes: Trade in Counterfeit Goods that Pose Health, Safety and Environmental Risks, 

Illicit Trade, OECD Publishing, Paris,  

(66)  The  European  Union  Intellectual  Property  Office  has  estimated  lost  sales  in  11  sectors  in  the  EU  as  a  result  of 
counterfeiting. These losses totalled more than EUR 83 billion per year during the period 2013-2017. In addition, more 
than 671 000 jobs in legitimate businesses were lost, and the Member States lost EUR 15 billion per year in tax revenue 
(European Union Intellectual Property Office, 2020 status report on IPR infringement). 

(67)  Regulation (EU) 2021/821 of the European Parliament and of the Council of 20 May 2021 setting up a Union regime for 
the control of exports, brokering, technical assistance, transit and transfer of dual-use items (recast) (OJ L 206, 11.6.2021, 
p. 1). 

(68)  Commission Regulation (EC) No 1418/2007 of 29 November 2007 concerning the export for recovery of certain waste 
listed in Annex III or IIIA to Regulation (EC) No 1013/2006 of the European Parliament and of the Council to certain 
countries to which the OECD Decision on the control of transboundary movements of wastes does not apply (OJ L 316, 
4.12.2007, p. 6). 

(69)  Commission  Implementing  Regulation  (EU)  2021/2071  of  25  November  2021  subjecting  certain  vaccines  and  active 

substances used for the manufacture of such vaccines to export surveillance (OJ L 421, 26.11.2021, p. 52). 

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(iii) Criminal activities exploit trade flows to smuggle illegal goods 

Criminal networks exploit trade flows, smuggling drugs, weapons or cultural goods. Customs 
controls detect increasing numbers of illegal goods. In 2021, a record of 592 tonnes of drugs 
were seized, and a record amount of 4.7 billion pieces of tobacco products. The 6.496 pieces of 
firearms  seized  are  an  increase  of  58%  compared  to  2020,  the  seized  ammunition  grew  by 
460%.  Other  fraud  schemes  include  infringement  on  intellectual  property,  or  undeclared 
movements of cash. E-commerce flows are also exploited by criminals. (70) Smuggling routes 
adjust to increased control activities of customs in one country. Customs risk management and 
the cooperation with law enforcement bodies are key. (71) 

These  problems  are  perceived  by  customs  administration  and  public  stakeholders.  In  the 
Reflection  Group  on  the  customs  reform,  most  Member  States  shared  the  impression  that 
customs today is squeezed, with a dramatic increase in declarations in e-commerce on the one 
hand, and a continuous increase of tasks  regarding  prohibitions and restrictions  on the other. 
Business  and  civil  society  stakeholder  expressed  their  views  on  the  current  situation  in  the 
public consultation. The feedback from 194 respondents has a good distribution across the EU 
and  includes  SMEs  (details  Annex  3).  Overall,  the  opinions  of  respondents  show  room  for 
improvement for different policy aspects.  

Figure 2 – Results of the public consultation on customs contribution to different policy objectives - Source DG 
TAXUD 

(70)  Counterfeiters have taken advantage of the new business opportunities generated by the rise of e-commerce in multiple 
ways. Distribution of counterfeit goods is done increasingly online, and although some counterfeiters use the dark web, 
the  majority  of  counterfeit  activities  happens  in  legitimate  surface  web  platforms.  IP  criminals  use  legal  business 
structures to obscure their operations. Moreover, counterfeit items are increasingly entering  the EU in the form of small 
parcels. These trends have been intensified during the COVID-19 pandemic, as criminal networks adapted to the changing 
demand  and  took  advantage  of  new  business  opportunities.  See  EUIPO  &  Europol  (2022),  Intellectual  Property  Crime 
Threat Assessment 2022, Publications Office of the European Union, Luxembourg| Europol (europa.eu) 

(71)  In  this  context,  see  the  European  Multidisciplinary  Platform  Against  Criminal  Threats  (EMPACT),  the  EU  flagship 
instrument  for  multidisciplinary  and  multiagency  operational  cooperation  to  fight  organised  crime  at  an  EU  level.  It  is 
based  on  an  integrated  approach  to  EU  internal  security,  involving  measures  that  range  from  external  border  controls, 
police,  customs  and  judicial  cooperation  to  information  management,  innovation,  training,  prevention  and  the  external 
dimension of internal security, as well as public-private partnerships where appropriate. 

Page 18 / 291 

 
 
                                                      
2.3 What are the problem drivers? 

The  key  problems  above  have  three  main  drivers:  (i)  inadequate  and  complex  customs 
processes in the UCC, (ii) a fragmented UCC digitalisation model and (iii) a fragmented  and 
inefficient  governance.  They  occur  against  a  backdrop  of  external  developments  which 
accentuate the challenges of the system: more declarations, because of the rise of e-commerce 
trade, and more tasks, because of additional prohibitions and restrictions.  

(i) The inadequacy and excessive complexity of the customs processes 

The Union Customs Code (UCC) is the main legal and IT framework for customs processes in 
the  EU  customs  territory.  In  essence,  the  UCC  defines  who  must  (or  may)  do  what  and 
when (72) and, as explained in the legal context, is the basis to apply other pieces of legislation, 
such  as  the  Duty  Relief  Regulation  and  VAT.  As  the  UCC  evaluation  highlights,  the  UCC’s 
most  innovative  feature  is  requiring  that  all  communications  between  customs  authorities, 
economic operators and the Commission be digital.  The modernisation triggered by the 2016 
UCC  reform  mostly  consisted  in  digitalising  existing  customs  processes.  This  in  turn  means 
that each step of the customs processes depends on an IT system. This section and the next will 
illustrate  how  this  feature,  while  being  positive  in  a  digital  world,  has  unintendedly  caused 
(part  of)  the  difficulties  of  customs  to  fulfil  its  mission,  the  poor  data  quality  and  the  high 
administrative compliance costs for businesses.  
As the ECA noted already in 2017, (73) the entry process of foreign goods into the Union is 
particularly  complex.  Traders  must  provide  information  to  the  customs  authorities  on  each 
consignment at five different steps: (i) before the goods are loaded for or arrive in the Union, 
(ii) when the plane or the vessel arrives, (iii) when they present the goods to customs, (iv) if the 
goods are temporarily stored and (v) when the goods are to be placed on the Union market.  

(72)  The  UCC  also  provides  rules  on  common  rules  on  the  customs  authorities’  decisions, on  how  to calculate  the  customs 

debt and on the use of guarantees. 
(73)  SR_CUSTOMS_EN.pdf (europa.eu) 

Page 19 / 291 

 
 
                                                      
Figure 3 – Illustration of current customs procedures for one consignment on import - Source DG TAXUD

Each step serves a different purpose and for that reason part of the information that the operator 
must provide for each consignment varies from one step to another. Yet, the process results in 
requirements  which  are  both  inadequate  and  excessive,  particularly  where  they  apply  to  the 
billions of e-commerce parcels:  

-  The customs duty exemption for goods valued up to EUR 150 and no VAT exemption. 
The  customs  duty  exemption  for  low-value  goods  was  enacted  in  1983  and  increased  in 
1991 and in 2008. A VAT exemption for imported goods also existed. Both were justified 
in  the  excessive  administrative  burden  for  charging  low  customs  duties  or  VAT  on  low 
value goods. The Council decided to eliminate the VAT exemption for low-value imported 
goods  and  to  provide  a  One  Stop  Shop  (IOSS)  for  e-commerce  intermediaries  selling 
foreign  goods  to  European  consumers,  allowing  them  to  collect  the  import  VAT  at  the 
moment of sale instead of collecting it when the goods enter the Union market.  To check 
whether VAT was charged at the moment of the sale or needs to be collected at the border, 
all  parcels  must  be  declared  to  customs  upon  arrival  to  the  EU.  According  to  the 
Commission  evaluation (74)  of  the  VAT  rules,  eliminating  the  VAT  exemption  for  low 
value imports has been a success. In the first 6 months, Member States collected EUR 1.9 
billion  in  VAT  and  both  the  tax  and  customs  authorities  now  have  data  on  e-commerce 
transactions.  However,  the  difference  between  VAT  and  customs  rules  on  e-commerce 
renders the system very  complex for all involved (VAT applicable on all goods, customs 
duties  applicable  from  EUR  150;  VAT  collected  and  declared  at  sale  by  platforms  but 
checked  at  arrival  when  postal  and  express  operators  declare  the  goods  to  customs). 

(74)  See Commission Staff Working Document impact assessment report accompanying the proposal for a Council directive 

amending Directive 2006/112/EC as regards VAT rules for the digital age (SWD(2022) 393 final).  

Page 20 / 291 

 
 
 
                                                      
Platforms  complain  that  VAT  is  sometimes  charged  twice.  Express  couriers  and  postal 
operators argue that they must declare goods for which they have no data because they are 
not  part  of  the  original  sale.  Consumers  often  refuse  the  goods  because  postal  operators 
charge an unexpected fee for compliance with customs formalities. (75) Customs complain 
that their IT systems cannot cope with the volume of declarations and that it is not worth to 
check  whether  the  parcels  are  artificially  undervalued  below  EUR  150  to  claim  a  very 
limited amount of duty to the consumer, or for which there is no customs duty to collect. 

-  Difficulty  to  follow  consignments  in  the  EU:  the  UCC  allows  economic  operators  to 
combine  and  replace  the  five  steps  of  the  import  process.  This  responds  to  different 
business  needs  (goods  entering  a  Union  port  just  for  transhipment  need  different 
information  than  those  being  placed  in  the  Union  market).  The  multiple  options  make  it 
very difficult for customs to follow the movement of the consignment in the Union.   

-  Unclear responsibilities: the UCC allows several actors to provide the information in each 
step. The carrier, the importer, the representative, the holder of the goods, the holder of the 
procedure  or  even  ‘any  person  able  to  provide  the  required  information’  may  submit  the 
information. No operator bears the full responsibility for the entire supply chain, making it 
difficult for customs to properly address non-compliance. Literature (76) identified the lack 
of  clarity  of  the  role  of  the  declarant,  who  assumes  responsibility  for  the  financial 
obligation,  the  customs  duties,  but  leaves  to  the  importer  the  responsibility  for  the  non-
financial requirements, in line with the non-customs legislation (77). In e-commerce, the EU 
consumers having ordered the goods online become the declarants and the importers, even 
if  in  most  cases  no  duties  are  due  because  the  goods  are  below  EUR  150.  Yet,  the  non-
customs legislation is not intended to impose compliance requirements on consumers  and 
generally the consumers are not providing the information to customs. 

-  Rigid  data  format:  By  contrast,  the  UCC  defines  in  exact  detail  in  a  unique  format  the 
information to be provided at each step for each consignment. The UCC interim evaluation 
signals the huge effort in harmonising the data requirements to facilitate the interoperability 
of  the  IT  systems  across  all  Member  States,  the  harmonised  application  of  the  rules,  and 
alignment  with  international  customs  data  models.  However,  it  also  notes  that  traders 
perceive it as an increasing burden because they need to update their systems and because 
national customs authorities still require certain additional data elements. Furthermore, that 
information  is  normally  sufficient  for  customs  to  calculate  the  customs  debt  but  not  to 
assess  compliance  with  other  requirements.  For  that  purpose,  essential  data  elements  are 
missing,  such  as  the  manufacturer  and  the  supplier  of  the  goods.  Furthermore,  the 
combined nomenclature  (CN), under which customs classify  and  identify  goods based on 
WCO international standards, is not systematically used for the definition and classification 
of manufactured products in EU sectoral legislation. It makes it difficult to identify specific 
products in customs procedures and to link CN codes with specific requirements applicable 
to these products in non-customs legislation. 

-  The ambiguous definition of the person responsible for the information, combined with the 
rigid definition of the information to be provided often results  in the poor quality of the 
data  that  customs  receive,  as  there  is  no  certainty  that  the  information  is  being  required 
from  the operator best  placed to  have it.  An example is  e-commerce,  where the postal  or 
express operator, on behalf of the consumer, informs customs about the value of the goods, 

(75)   A survey conducted by PostNord concluded that the clarity on the final price is an important factor when ordering goods 

from outside the EU e-commerce-in-europe-2020.pdf (postnord.se) 

(76)   Tom  WALSH,  European  Union  Customs  Code,  2015,  Kluwer,  p.110.  Frank  HEIJMANN,  Customs:  Inside  Anywhere, 

Insights Everywhere, Trichis, p. 358. 

(77)  Article 4 of Market Surveillance Regulation, for instance. 

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based on information that the sender has given in the origin country. However, that foreign 
sender has often not taken part in the original transaction between the European consumer 
and the EU-based e-commerce intermediary so it might provide a lower value.  

-  Finally, for some steps, the UCC does not clearly define the consequences of not providing 
the  information.  This  is  then  entirely  left  to  the  Member  State’s  legislation (78)  and 
introduces  an  important  element  of  distortion  in  the  Customs  Union.  Part  of  the  UCC 
solution  to  that  problem  is  a  “reward”  to  reliable  traders,  the  AEOs.  These  trustworthy 
traders  enter  a partnership with  customs to  have  access  to  simpler customs  procedures in 
exchange for carrying out certain tasks. However, monitoring their compliance has become 
challenging, as revealed by the UCC interim evaluation (section 2.2.). 

These  mismatches  make  the  customs  authorities’  task  to  collect  and  protect  difficult.  To 
balance  needs  and  resources,  the  UCC  requires  the  Member  States  to  base  their  controls  on 
automated  risk  management.  The  Member  States  must  therefore  carry  out  risk  management 
and decide what to control and they do so based on national systems and national data, without 
an EU-wide perspective. According to the UCC, the Commission’s role is to prepare common 
risk  criteria  in  legal  implementing  acts,  operating  some  IT  systems,  and  sharing  risk 
information. The Commission may also organise common priority control areas. 

By  contrast  to  the  entry  process,  the  UCC  exit  process  is  simpler.  It  requires  economic 
operators to  provide the  customs authorities with information  on  goods  exiting the  Union on 
only  two  steps:  (i)  the  exporters  must  provide  customs  with  certain  information  once  it  is 
known that the goods are to exit, so that customs can react if necessary and (ii) the carrier must 
inform about the exit of the goods from the Union. 

Finally, the efforts in harmonising rules have resulted in rigidity for crisis management. For 
instance, during the COVID crisis, most Member States were allowing operators to defer the 
payment of taxes without guarantees except for customs debts, because the UCC often requires 
a guarantee for referral and does not foresee any “force majeure” clause. 

(ii) Fragmented and complex customs digitalisation 

Access to all relevant data to exploit it by cross-checking using artificial intelligence is a major 
objective  pursued  in  all  domains  by  governments  and  companies,  empowering  them  to  trace 
behaviours  and  habits  and  further  adapt  their  strategies.  Big  data  is  today  driving  the  digital 
revolution.  

Customs  is  a  pioneer  in  digitalization.  From  2003, (79)    there  is  the  ambition  of  creating  a 
simple and paperless environment for customs and trade. Today 99% of traders’ information to 
customs is digital and customs systems react automatically, in less than 5 minutes for 87.3% of 
the cases.  

As  mentioned  above,  one  of  the  main  goals  of  the  UCC  is  to  complete  this  achievement  by 
requiring a fully electronic environment for the customs authorities and economic operators, to 
complete  customs  formalities  via  the  deployment  of  a  number  of  electronic  systems.  While 

(78)  According to the UCC, Member States must foresee effective, proportionate and dissuasive penalties for failure to comply 

with the customs legislation. 

(79)  The  Council  Resolution  introducing  a  paperless  environment  for  customs  already  called  on  the  Commission  to  draw  a 
multiannual  aiming  at  creating  a  European  electronic  environment.  The  same  principle  is  in  the  Decision  on  electronic 
customs in late 2008 [Decision No 70/2008/EC of the European Parliament and of the Council of 15 January 2008 on a 
paperless environment for customs and trade (OJ L 23, 26.1.2008, p.21)]. The Modernised Customs Code (MCC) also 
required  electronic  customs  (Regulation  (EC)  No  450/2008 of  the  European Parliament  and  of  the  Council  of  23  April 
2008 laying down the Community Customs Code (Modernised Customs Code) (OJ L 145, 4.6.2008, p. 1–64)]. The MCC 
was recast into the UCC to adapt it to the Lisbon Treaty. 

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originally foreseen to be completed by 2020, the date for final delivery of the UCC IT systems 
has been postponed to 2025 due to delays in implementation both at Commission and Member 
States  level,  linked  to  the  complexity  of  the  developments.  Both  the  ECA (80)  and  the 
Commission (81) found that the ambitious tasks proved more complex than initially envisaged, 
due  to  their  decentralized  nature,  the  lack  of  resources  and  the  changing  scope  in  projects. 
However,  once  implemented,  the  UCC  IT  systems  will  significantly  improve  the  customs 
electronic  environment,  particularly for economic operators active in  various  Member States. 
While  in  2022  an  economic  operator  wishing  to  complete  the  formalities  for  the 
aforementioned  entry  and  exit  processes  throughout  the  Union  needs  connection  to  national 
189 IT systems, in 2025 it will ‘only’ need 111 connections, a decrease of 41%.  

This  figure  shows  that  the  UCC  digitalization  model,  while  bringing  significant  benefits  and 
being  therefore  necessary  to  complete,  remains  complex  and  fragmented.  The  model  has 
contributed  to  the  poor  data  quality  for  customs  to  fulfil  its  mission,  to  the  divergent 
implementation of the customs rules and to high businesses’ administrative compliance costs, 
as follows:  

  The UCC foresees a specific, normally national, IT system for each step of the process that 
was illustrated in figure 1. Those national IT systems are not necessarily interconnected, 
not even within one Member State. Operators have therefore limited (if any) possibilities to 
save in compliance by reusing the data on a specific consignment for several steps. 

  Economic  operators  provide  the  information  on  several  national  IT  systems,  which  are 
similar but not identical. For  operators, there  are 27 separate  customs IT environments, 
even if there is only one Customs Union. A notable exception is the Commission-built IT 
system  to  provide  the  pre-loading  and  pre-arrival  information,  Import  Control  System  or 
ICS2, which provides a unique trader portal for the entire Union. The Commission has also 
built  a  series  of  trans-European  systems  to  connect  the  national  interfaces  to  enable 
operators  to  complete  some  formalities  from  a  single  location  (one  stop  shop).  However, 
until all national interfaces are updated in 2025, the operators will not perceive that benefit. 

  The national IT systems produce national databases. Therefore, neither the Member States 
nor  the  Commission  have  an  overview  of  the  consignments  or  the  operators  for  risk 
management  purposes.  Member  States  conduct  their  risk  analysis  based  on  national  data. 
The  Commission  has  no  access  to  those  data,  not  even  to  the  data  stored  on  the  trans-
European  systems  that  the  Commission  has  built  and  manages.  The  exceptions  are  the 
statistical  collection  of  trade  data  called  ‘surveillance’  and  a  secured  system  to  exchange 
information on specific risks (CRMS).  (82) 

  Maintaining  and  managing  these  27+1  parallel  IT  environments  is  costly  for  the  EU  and 
Member States. Any change or adaptation is lengthy, requiring a minimum of 2 years. 

  From  a  personal  data  protection  point  of  view,  the  UCC  digitalisation  model  was  in  line 
with  the  spirit  of  Directive  95/46/EC (83),  but  it  has  shown  its  limits  under  the  new 
paradigm established by the General Data Protection Regulation, where obligations for data 
controllers  and  processors  are  more  detailed,  and  the  exercise  of  data  subjects’  rights  is 
fully harmonised.  

(80)   See European Court of Auditors Special Report No 26/2018: A series of delays in Customs IT systems: what went wrong?   
(81)  Regulation (EU) 2019/632 of the European Parliament and of the Council of 17 April 2019 amending Regulation (EU) 
No 952/2013 to prolong the transitional use of means other than the electronic data-processing techniques provided for in 
the Union Customs Code (OJ L 111, 25.4.2019, p. 54). 

(82)  The data are in Annexes 23-01, 23-02 and 23-03 of the UCC Implementing Act. 
(83)  Directive 95/46/EC of the European Parliament and of the Council of 24  October 1995 on the protection of individuals 
with regards to the processing of personal data and on the free movement of such data (OJ L 281, 23.11.1995, p. 31). 

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  The  IT  systems  were  conceived  with  the  financial  role  of  customs  in  mind.  The 
information  therein  is  therefore  sufficient  to  calculate  the  customs  duties,  but  it  is  not 
adequate  for  enforcing 
the  non-financial  requirements.  The  EU  Single  Window 
Environment for Customs initiative intervenes in this area, by ensuring that certain Union 
non-customs  systems  (agriculture,  for  instance)  are  made  interoperable  with  national 
customs  systems  and  that  information  on  the  compliance  of  non-customs  formalities  is 
exchanged  between  them.  However,  such  intervention  is  strongly  dependent  on  how  the 
sectoral  policy  is  designed,  including  whether  IT  tools  exists.  In  addition,  the  EU  Single 
Window Environment for Customs does not deal with risk management and the associated 
identification of priorities of controls.  

(iii) Fragmented Customs Union governance structure  

The governance of the Customs Union is largely unchanged since its creation in 1968. There 
has been no significant  evolution  in  its  strategic and operational  management, making it  less 
able to face current and future challenges.  

The  responsibility  for  the  implementation  of  the  customs  legislation  is  shared  between  the 
Member  States  and  the  Union.  The  Lisbon  Treaty  established  that  the  Customs  Union  is  an 
exclusive  competence  of  the  EU  and  that  the  internal  market  is  a  shared  competence. 
Therefore, the EU has exercised its competences by adopting a common legal framework, the 
Union Customs Code (UCC).  

Member  States  implement  the  customs  rules  and  processes. (84)  The  Commission  is 
empowered  to  adopt,  subject  to  a  positive  opinion  from  the  Member  States  in  the  Customs 
Code  Committee, 
the 
implementation.  The  Commission  also  has  the  power  to  adopt  delegated  acts  following 
consultation  of  Member  States  in  the  expert  group  with  the  scrutiny  of  the  Council  and  the 
European Parliament.  (85) 

to  establish  more  uniform  conditions  for 

implementing  acts 

The  Customs  Policy  Group,  an  expert  group  composed  of  the  directors  general  of  national 
customs  administrations,  advises  the  Commission  on  strategic  customs  policy  issues,  and 
facilitates the exchange of views between the Commission and the Member States on customs 
policy;  it  is  not  a  decision-making  forum. (86)  In  the  Council,  the  Customs  Union  Working 
Party, beyond its legislative role, meets regularly though not systematically in the formation of 
customs directors general (the so-called ‘High-Level Working Party’ on Customs or HLWP) to 
discuss governance matters. 

The aforementioned legal and legislative process and strategic fora have proven insufficient to 
achieve a ‘real’ Customs Union in which legislation is applied uniformly by all Member States 
and risks are equally covered wherever the goods enter or leave the customs territory based on 
common,  coordinated  action.  Additional  policy  and  governance  instruments  have  therefore 
been  put  in  place  for  better  operational  coordination  and  cooperation,  and  to  support  more 
uniform implementation of the rules on the ground: 

(84)  Pursuant to Article 291 TFEU, Member States remain responsible for implementing and applying legally binding Union 
acts,  including  the  customs  legislation.  That  same  provision  allows  that  Union  acts  empower  the  Commission  to  adopt 
implementing rules where uniform conditions are needed for implementing Union legislation. This is often referred to as 
‘Comitology’. 

(85)  Register of Commission expert groups and other similar entities (europa.eu). 
(86)  See Commission Register of Expert Groups, code E00944. 

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  The Commission develops guidance and coordinates the sharing of risk information but is 
limited by the powers conferred to it in the operational domain and by the lack of ‘critical 
mass’ (87) for performing these tasks. 

  The Customs Control Equipment programme, (88) provides financing to equip the customs 
offices with detection control equipment at the border. The Commission is entrusted with 
the implementation of the programme.  

  The  Customs  programme  for  cooperation  in  the  field  of  customs (89),  also  provides 
financing  to  facilitate  and  enhance  customs  cooperation  between  national  customs 
authorities,  and  to  build  their  administrative,  human  and  information  technology  (IT) 
capacity. The Commission is entrusted with the implementation of the programme. Part of 
the  fund  is  used  to  finance  Expert  Teams,  a  structured  form  of  enhanced  operational 
cooperation  on  a  thematic  or  geographical  basis.  Participation  is  however  voluntary  and 
therefore concerns only interested Member States. Expert teams are further limited by their 
lack  of  administrative  and  legal  status  and  are  not  competent  to  take  decisions  on 
participants. Finally, the administrative and budgetary management is a significant burden 
for  Member  States.  Despite  these  limitations,  the  positive  and  tangible  results  of  several 
expert teams have shown the Customs Union would benefit from more and better organised 
operational  coordination  and  cooperation.  The  Customs  Eastern  and  South-Eastern  Land 
Border  Expert  Team  (CELBET) (90)  made  progress  on  a  common  approach  to  risk 
management,  joint  controls,  border  crossing  points’  diagnostics,  common  training  and 
centres  of  excellences,  and  cooperation  with  border  guards  and  neighbouring  countries. 
Considering  the  limitations  inherent  to  expert  teams  and  driven  by  their  positive 
experiences  within  CELBET,  the  customs  Directors  General  from  the  11  participating 
Member States unanimously called for the creation of an EU customs agency in November 
2021. 

Overall, the current governance structure is not fit for purpose. De facto, the Customs Union is 
managed by means of legislative and non-legislative tools that are not designed for that scope 
and  making  it  difficult  to  adapt  the  customs  systems  and  procedures  in  cases  of  crisis.  A 
political  prioritisation  of  areas  for  common,  coordinated  action  in  risk  management  does  not 
exist.  Priorities  are  determined  mainly  at  national  level,  according  to  national  political 
preferences,  and  not  following  a  Union  approach  required  for  a  homogenous  enforcement  of 
the  rules  and  an  appropriate  protection  of  the  Single  Market  by  Customs.  Over  time,  the 
multiplication  of  committees,  expert  groups,  project  groups  and  expert  teams  dealing  with 
customs  matters  has  resulted  in  a  major  co-ordination  challenge,  further  fragmenting  the 
governance. There are many layers of customs activity but there is no strategic coherence. The 
operational  management  of  the  Customs  Union  is  not  coordinated  and  depends  on  the 
willingness of Member States to cooperate.  

(87)  In  this  context,  critical  mass  means  sufficient  operational  experts  with  the  tools  and  mandate  to  organise  and  drive 

delivery of operational results; to bring the necessary step change in operational approach to “get things done”. 

(88)  Regulation (EU) 2021/1077 of the European Parliament and of the Council of 24 June 2021 establishing,  as part of the 
Integrated  Border  Management  Fund,  the  instrument  for  financial  support  for  customs  control  equipment  (OJ  L  234, 
2.7.2021, p. 1). 

(89)  Regulation  (EU)  2021/444  of  the  European Parliament  and  of  the  Council of  11 March  2021  establishing  the  Customs 
programme for cooperation in the field of customs and repealing Regulation (EU) No 1294/2013 (OJ L 87, 15.3.2021, p. 
1). 

(90)  https://www.celbet.eu/  

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2.4 How likely is the problem to persist? 

A  number  of  actions  foreseen  in  the  Customs  Action  Plan  will  have  a  certain  positive  effect 
towards 2025. The Union Customs Code includes a simplification for trade that is still under 
development  (centralised  clearance).  Furthermore,  the  Customs  Action  Plan  has  successfully 
implemented  the  Customs  Control  Equipment  Instrument,  the  interoperability  study  for  law-
enforcement,  and  the  EU  Single  Window  environment  for  customs.  They  all  bring  some 
improvements and are included in the dynamic baseline (section 5.1) against which the current 
initiative will be evaluated. 

However, the previous sections show that the problems derive from structural elements of the 
Customs  Union.  The  divergence  between  Member  States  has  its  roots  in  the  national 
responsibilities for parts of the Customs Union, without an EU perspective. The fragmentation 
of data is directly linked to the approach to IT systems and to the individual customs processes. 
Despite the consistent efforts to ‘act as one’, the cooperation between customs authorities has 
not  reduced the divergent  operational  implementation. The cooperation with  other authorities 
remains inefficient, and predominantly at national level. More effort in the same system does 
not bring a solution. The independent Wise Person Group similarly concluded in 2022: ‘There 
is a need for systemic change both in terms of Customs processes and in putting more Union in 
the European Customs. This is today an urgent matter of strategic sovereignty and reinforced 
resilience.’ 

The  trends  identified  in  the  foresight  report  affecting  the  work  of  customs  in  2040,  such  as 
larger trade volumes, increasingly complex non-customs regulatory environment for products, 
growing use of technology and enlarged access to, use and analysis of data implying new skills 
for customs officers, do not align with the current capacity of customs. 

The  urgency  becomes  also  visible  in  the  dramatic  increase  of  declarations.  And  while  the 
number of controls increased, the proportion of goods controlled dropped. In July 2021, a new 
customs reporting obligation on e-commerce became applicable. This made a trend visible that 
is confirmed by two different reporting systems: 

Figure 4 Evolution of customs declarations (2016-2021) – Source DG TAXUD° 

On the left hand, the statistical reporting in the ‘Surveillance 3’ system shows that the number 
of declarations (orange) surges with the new reporting obligation for low value parcels in July 
2021 from 35 million to over 100 million. It further shows this increase is not caused only by 
the  overall  increase  in  trade  (blue).  On  the  right  hand,  the  internal  reporting  of  customs 
administrations  under  the  ‘Customs  Union  performance’  project  shows  the  increase  in 
declarations  for  one  customs  officer  on  average.  The  increase  is  steadier  because  of  the 
reporting  decisions  in  each  Member  State.  For  the  year  2021,  the  blue  line  visualise  the 

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additional  challenge  e-commerce  presents  for  customs  supervision  and  compliance  with  both 
the financial and non-financial rules. The red line makes it apparent that e-commerce adds to a 
trend of an already increasingly strained customs system.  

Without  addressing  the  customs  processes,  the  IT  customs  environment  and  the  governance, 
the  current  difficulties  customs  have  in  performing  their  duties  are  thus  likely  to  increase 
significantly.  

PROBLEM TREE 

Problem tree – Source DG TAXUD 

3. WHY SHOULD THE EU ACT? 

Article 3(1) TFEU establishes that the Customs Union is an exclusive competence of the EU. 
This carries the consequence that only the Union can legislate and adopt legally binding acts. 
The Member States  can  do so only if empowered by the Union or for the implementation  of 
Union acts. In addition, the internal market is a shared competence pursuant to Article 4(2)(a) 
TFEU.  In shared competences, the Member States can adopt  legally  binding acts only where 
the  Union  has  not  exercised  its  competence.  In  the  customs  area,  rules  regulate  the  Customs 
Union (tariff, quotas and alike) and the internal market (i.e., abolition of internal frontiers and 
achievement of free movement of goods). For that reason, the Union Customs Code (UCC), is 
based  also  on  Article  114  TFEU.  In  either  case,  to  the  extent  the  EU  has  exercised  its 
competences  by  adopting  common  rules,  Member  States  are  precluded  from  adopting  their 
own customs legislation. Any revision of that framework should therefore occur at Union level.  

The  UCC  is  based  also  on  Articles  33  and  207  TFEU,  according  to  which,  the  European 
Parliament and the Council, acting in accordance with the ordinary legislative procedure, take 
measures in order to strengthen customs cooperation between Member States and between the 
latter  and  the  Commission.  In  addition,  Article  207  gives  the  European  Parliament  and  the 
Council  the  right  to  adopt  measures  defining  the  framework  for  implementing  the  common 
commercial policy. Given the broad scope of the initiative as described in the above sections, 
the revision of the UCC will include trade facilitation and supervision aspects that go beyond 
the  cooperation  between  customs  authorities,  in  accordance  with  the  applicable  international 
framework for trade policy with third countries. 

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However,  the  common  rules  and  processes  established  at  EU  level  in  the  UCC  must  be 
implemented  by  Member  States.  As  previously  detailed,  the  existing  framework  has 
encountered  problems  in  terms  of  uniform  implementation  and  harmonisation,  generating  a 
fragmentation of processes, practices and approaches that puts the Customs Union at risk. Such 
fragmentation  and  related  consequences  cannot  be  solved  at  national  level.  A  revised, 
comprehensive, and detailed set of rules ensuring that customs can act as one and implement 
the rules in the same way is necessary.  

4. OBJECTIVES: WHAT IS TO BE ACHIEVED? 

4.1 General objective 

Customs  is  the  only  comprehensive  capability  of  the  EU  to  supervise  international  supply 
chains and all goods crossing the external borders. The customs authorities supervise the flow 
of  goods  in  and  out  of  the  EU  for  ensuring  compliance  with  a  broad  range  of  requirements 
across  different  policy  domains.  Customs  authorities  are  therefore  at  the  centre  and  the 
guardians of the Single Market. After being cleared in one Member State, goods move freely 
within the Customs Union. As a result, the Customs Union is only as strong as its weakest link. 
The  proposed  reform  aims  at  ensuring  a  framework  that  better  allows  customs  authorities’ 
action  across  all  the  EU,  to  act  as  one,  to  be  effective  in  identifying  and  stopping  non-
compliant goods and customs duties avoidance and efficient in carrying out those controls with 
the lowest possible burden both for the authorities and for trade.  

The general objective captures the inherent need to achieve the right balance. Firstly, customs 
need to efficiently and effectively protect the Single Market, citizens, and values of the EU 
by ensuring compliance with a dramatically increasing series of non-financial requirements.  

Secondly, customs need to ensure proper, effective and timely collection of customs duties 
and  taxes  due.  This  includes  deterring  customs  fraud  and  undervaluation  and  thereby 
preventing the loss of revenue for both the EU budget and the Member States.  

Finally, customs should facilitate legitimate trade as this contributes to growth and prosperity 
in  the  EU.  It  is  vital  that  the  flow  of  legitimate  trade  is  not  unduly  disrupted.  Customs 
processes and rules must ensure that all traders - including SMEs – can comply with the rules 
as smoothly as possible. The framework provided by the Customs Union must achieve the right 
balance between ensuring effective controls across all the various types of risks and facilitating 
legitimate trade with as little cost and administrative burden as possible.  

4.2 Specific objectives 

The way in which the reform can help the Customs Union better achieve its overall objectives 
can be decomposed into 5 specific objectives of equal importance and weight: 

SO.1.  Strengthen  EU  customs  risk  management.  Customs  are  able  to  correctly  decide 
whether to stop a good from entering the EU when they have sufficient and timely information 
available.  The  system  must  be  able  to  build  on  its  experiences  to  stop  similar  goods  from 
entering  the  Single  Market  at  another  time  or  through  another  entry  point.  Customs 
intervention must therefore develop risk management of the whole supply chain in real time, 
with an EU perspective, through the analysis of risks and threats in a constantly updated way 
and identify the measures and controls to be performed at the border crossing points of entry 

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and exit of the EU territory.  A  solid co-operation framework with  authorities  responsible for 
other  policy  areas,  and  with  international  trading  partners  is  necessary  for  this  purpose.  This 
will  also  help  better  manage  current  and  future  crises  in  a  world  marked  by  increasing 
geopolitical tensions.  

-  For financial risks, this will allow customs  to identify  fraud and undervaluation, and 

improve duty collection.  

-  For non-financial risks, this will improve the customs contribution to enforcement of 

prohibitions and restrictions and contribute to EU safety and security.  

SO.2  Reduce  the  administrative  burden  and  simplify  the  procedures  for  traders, 
consumers, and customs authorities, without jeopardising effective customs supervision. 

SO.3  Ensure  a  level  playing  field between  e-commerce  and  traditional  trade  as  regards 
customs, in line with the VAT rules. 

SO.4  Enhance  access  and  use  of  data  for  strategic  customs  action.  Ensuring  timely  and 
flexible  data  management  will  support  better  risk  management,  better  crisis  response,  better 
measurement of the Customs Union performance and simpler rules for trade. Customs attention 
must shift from individual consignments, towards the global supply chain to identify problems 
and  risks.  Building  intelligence  from  connecting  the  supply  chain  data  will  help  strengthen 
customs  supervision  and  customs  risk  management.  A  data-driven  approach  is  needed,  to 
place  the  emphasis  more  on  the  collection  of  first-hand  data  from  commercial  systems,  web 
platforms and other sources, and to reduce reliance on third-party declared data. Customs need 
to access and tap into the wealth of data from all types of sources, in a centralised way and 
orchestrate uniformly the use of data for the Customs Union to act as one. 

SO.5  Enable  the  Customs  Union  to  act  as  one  by  ensuring  effective  EU-wide  protection, 
irrespective of where the  good crosses  the border and  adopting EU-wide  approaches that are 
more than the sum of individual national efforts. A strong, uniform mechanism and response to 
crisis needs to be established.  

4.3 Intervention logic 

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5. WHAT ARE THE AVAILABLE POLICY OPTIONS? 

This  Impact  Assessment evaluates  four  different  reform  options with  an increasing degree of 
ambition.  In  designing  policy  options,  it  is  important  to  recall  that  the  UCC  provides  a 
complete Customs Union ecosystem. It provides in detail for how the Customs Union works, 
with the rights and obligations of private and public sector stakeholders and with the processes 
that  are  needed  to  handle  and  supervise  goods  moving  to,  through  and  from  the  EU.  The 
reform objectives are inter-dependent, and the reform options must be systematically coherent.  

For these reasons, the options are mapped, identified, and assessed as viable reform packages, 
taking  account  of how the measures taken would work together. Each package addresses the 
problems, drivers and objectives identified (in a different manner and to a different extent).  

Three  major  policy  choices  will  largely  determine  the  extent  to  which  the  Customs  Union 
gets  the  desired  capacity  to  collect,  protect  and  simplify  as  one.  These  provide  the  major 
structural elements (building blocks) around which options are packaged. They are: 

-  To  what  extent  should  customs  processes  be  reformed?  The  choice  is  between 
continuing the processes in the baseline or changing them as a starting point for the rest 
of the reform. Although the principles for reforming the customs processes are similar 
in every option, the way they are implemented varies depending on the other two policy 
choices (data management and governance). The reformed customs processes can only 
be implemented to the full extent, if they are accompanied by a centralised approach to 
the collection, use and processing of data (O3, O4). In case centralisation of data is not 
implemented,  these  components  will  be  less  effective  as  explained  in  section  6  (O1, 
O2). 

-  To what extent should the customs data management approach be reformed? Data 
management addresses how information is provided, stored, analysed, and used to drive 
customs  operations.  In  the  current  decentralised  approach,  every  Member  State 
develops  its  own  IT  solutions  for  the  different  declarations,  in  line  with  common 
criteria  for  interoperability.  A  new  approach  to  customs  processes  requires  a  better 
analysis and use of customs data. An important policy choice is whether to build these 
capacities  individually  in  national  systems  (O1,  O2)  or  together  in  a  centralised  Data 
Space (O3, O4). 

-  To  what  extent  should  the  governance  of  the  Customs  Union  be  reformed? 

Different possibilities to strengthen ‘acting as one’ are considered in the reform: 
o  Strengthen the existing governance model based on cooperation (O1) 
o  Introduce an EU Authority for the Custom Union (O2, O4) 
o  Strengthen the role of the Commission (O3) 

5.1 What is the baseline from which options are assessed? 

This  impact  assessment  builds  on  a  dynamic  baseline,  which  assumes  that  both  the  ongoing 
implementation of the Union Customs Code IT systems and  all the Customs Action Plan are 
completed by 2025.  

The  Commission’s  Customs  Action  Plan  (CAP)  adopted  by  the  College  in  2020, 
acknowledges  that  despite  the  major  modernisation  of  EU  customs  legislation  in  2016  (the 
UCC),  there  is  evidence  of  problems  and  warned  that  ‘there  are  great  risks  of  losses  of 
revenues  for  the  EU  budget,  of  threats  to  the  safety  and  security  of  EU  citizens,  and  of 
excessive burdens on legitimate trade, if action is not taken to reinforce the activity of national 
customs  authorities  across  the  EU.’ (91)  The  CAP  precedes,  prepares  and  announces  the 

(91)  customs-action-plan-2020_en.pdf (europa.eu), p.1. 

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reform.  It  points  towards  the  main  areas  where  legal  change  would  be  needed  and  brings 
forward  in  parallel  some  practical  actions  within  the  current  legislative  limits  (Overview  in 
Annex 9.1). 

Indeed,  in  2025,  if  nothing  else  changes,  the  problems  and  drivers  are  likely  to  persist  (see 
section 2.4) and customs will have difficulties to perform the increasing list of tasks, in a more 
and  more  complex  world.  While  customs  managed  to  cope  in  recent  crises,  like  the  UK 
withdrawal,  the Covid-19 pandemic, or the  Russia invasion of Ukraine resulting in  sanctions 
against Russia and Belarus, it is not guaranteed that a future crisis situation can be handled.  

In  the  baseline,  Member  States  carry  out  risk  management  in  national  systems  and  with 
national  data,  without  an  EU-wide  perspective.  The  Commission  role  is  to  provide  common 
risk framework. The customs processes, data management and governance in the baseline are 
described in the drivers in section 2.3. Member States and the Commission complete the UCC 
IT  systems  and  need  to  maintain  and  constantly  update  them.  The  Member  States,  the 
Commission  and  the  economic  operators  will  therefore  continue  to  incur  in  a  series  of 
administrative costs that are further detailed in section 6. 

Box 2 – Baseline and timeline of the customs reform 

In  the  baseline,  the  UCC  IT  systems  are  completed  as  foreseen  by  2025,  and  continue  to  operate  with 
associated  costs.  The  Customs  Action  Plan  is  implemented  by  2025.  All  options  proposed  below  are 
implemented in three phases. The exact years are specified for every option in the assessment.   

5.2 Description of the policy options 

5.2.1 Option 1: A package of simpler processes  

General considerations 

The key customs process components to be considered, in view of the reform objectives, are: 

  The process steps as such, and the extent to which these could be reduced or simplified 

(see further the baseline analysis in Annex 5, section 1) 

  The roles of the different trade actors, and how they fit with compliance responsibilities 

(see further Annex 5, sections 2.5 and in an operational view, section 2.7) 

  The way data is provided and used for effective customs supervision 

  Specific process treatment for more reliable operators 

  Specific process treatment for e-commerce flows of goods 

  The way in which penalties are applied across the EU to deter non-compliance 

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An important consideration for this analysis is the interdependence of each component above. 
Any valid option has to address the elements together.   

As regards process steps, the relevance of each step was re-examined. Account was also taken 
of the commercial reality that any supply chain involves certain actors, including carriers (with 
various  level  of  subcontracting),  and  principals  (importers,  exporters),  which  have  different 
business  roles  and  possess  different  information  in  the  normal  course  of  their  business.  It  is 
also to be noted that supply chains are diverse, with different features depending on the modes 
of  transport  used  and  on  commercial  choices.  Global  postal  traffic,  for  example,  has  some 
specific  roles  for  origin  and  destination  postal  offices,  which  are  not  found  in  other  supply 
chains.  Deep-sea  maritime  traffic  has  its  own  distinctive  features,  including  layers  of 
subcontracting of transport, routings involving calling at several EU and non-EU ports, and de 
facto  integration  of  port  community  systems  in  customs  compliance.  Any  remodelling  of 
customs process needs to enable  operators to  clearly discharge their responsibilities, across a 
diversity  of  commercial  practices.  A  given  carrier  needs  to  know,  for  example,  whether  it  is 
carrying  goods  which  have  not  been  released  to  free  circulation,  and  to  know  unequivocally 
when  its  accountability  to  customs  passes  to  the  next  carrier  in  the  chain.  Customs  likewise 
need to know who is responsible for goods at a given moment. This means that the approach to 
simplifications must enable communication to some degree between customs and the different 
operators at the relevant points in the supply chain, so that  all actors can fulfil their role and 
always know who is responsible to customs until the goods are released to the market.   

As regards roles, a weakness in the current system is that the persons accountable to customs 
for  each  process  step  are  not  necessarily  the  persons  best  placed  to  fulfil  substantive 
compliance  obligations.  The  commercial  reality  is  that  the  persons  who  motivate  the  traffic 
(exporters  and  importers)  are  best  placed  to  assume  responsibility  for  financial  and  non-
financial  compliance.  Alternative  roles,  including  the  current  “declarant”  role  or  the  carrier 
role,  have  greater  difficulty  in  fulfilling  this  responsibility  in  so  far  as  they  do  not  have  full 
insight  to  the  commercial  transaction.  In  light  of  the  objectives  of  the  reform,  the  most 
appropriate  change  at  the  level  of  roles  is  to  attribute  compliance  responsibility  to  importers 
and exporters in the first instance (while providing for default responsibility for intermediaries 
in  specific  scenarios  such  as  transhipment  to  ensure  that  the  responsibility  as  such  is  always 
covered). This change would also open the door to further simplification. As the importers and 
exporters are also in possession of the information necessary for substantive compliance, and 
could  account  for  some  aspects  (such  as  duty  payment  and  certain  product  compliance 
requirements)  on  a  full  supply  chain  basis,  it  is  possible  to  consider  alternative  compliance 
approaches,  and  place  much  less  reliance  on  the  provision  of  detailed  declarations  for  all 
compliance issues at every process step. 

Regarding  the  modalities  for  provision  of  data,  the  issue  is  partly  formal  (the  regulatory 
requirement  as  such)  and  partly  operational  (commercial  practices  and  the  existing  legacy  of 
information  environments).  From  the  formal  perspective,  it  is  possible  to  provide  for  a 
rebalancing of information provision obligations, to match information requirements, in terms 
of scope and timing, better with who can and should fulfil them. It is also possible to require 
that  information,  once  submitted,  should  be  re-used  in  all  customs  processes  across  the  EU.  
The extent to which this can be offered, and the relative costs and benefits of offering it in a 
transnational  environment  where  different  national  customs  authorities  and  trade  have  to 
communicate across the flow of goods, depend strongly on the available IT systems. To give a 
concrete example, if a  carrier provides information to  the  customs office of first entry to the 
EU, that information is not going to be available to other offices and used in other processes 
unless the IT systems exist to make it so. One approach is to rely on current national systems to 

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be  developed  to  handle  this.  Another  approach  is  to  provide  for  a  single  data  entry  point  for 
traders which supports the re-use and integration of data.  

Regarding reliable operators, consideration was given to different approaches. The first key 
ingredient  in  any  future  formula  is  the  way  in  which  reliability  is  demonstrated.  Here,  the 
options are essentially to strengthen the existing system, by further clarifying the way in which 
compliance assurance is provided and enhancing monitoring, or to introduce an alternative or 
complementary approach based more on transparency and accountability. The second issue is 
the nature of the benefits which can be offered, in the areas which have a business relevance, 
i.e.  procedural  burden,  facilitation  of  controls  and  provision  of  financial  guarantees.  A  third 
aspect is the practical understanding of the existing scheme (AEO) and in particular its use as a 
badge of trust between traders and for purposes of international mutual recognition agreements, 
currently limited to ‘AEO S’ (recognition for security and safety purposes). Each option needs 
to  present  a  balanced  package.  In  addition,  each  option  needs  to  ensure  that  overall,  the 
customs supervision remains effective.  

In  that  light,  it  was  considered  whether  it  would  be  possible  to  exempt  reliable  traders  from 
providing any data in the supply chain. A complete exemption in respect of their supply chains 
would not be possible as this would open the door to their exploitation by organised smuggling 
groups  without  any  possibility  for  customs  to  target  their  controls  on  such  traffic.  The 
necessary balance on this procedural aspect could be obtained however by ensuring a minimum 
provision  of  advance  cargo  data  and  consignment  identification  as  such  by  carriers,  and 
connecting  this  with  reliable  importers.  This  would  enable  a  greater  shift  in  the  information 
provision burden of importers away from the supply chain, and should apply in all options. 

Regarding e-commerce, the essential process issue is how to include e-commerce flows in the 
scope  of  customs  duty  and  customs  supervision  measures.  Options  could  include  requiring 
consumers,  postal  operators,  carriers,  or  e-commerce  intermediaries  to  provide  additional 
information  and  take  responsibility  for  ensuring  compliance  both  financial  and  non-financial 
requirements.  Involvement  of  tens  of  millions  of  consumers  in  provision  of  customs  duty 
calculations or demonstration of compliance with product standards would be undeliverable in 
practice.  Involvement  of  transport  intermediaries  in  substantive  compliance  is  possible  in 
principle, but their access to the underlying commercial transactions in practice is insufficient 
and is demonstrated by the shortcomings inherent to the constraints of the current rules where 
customs  declaration  requirements  are  based  on  the  information  available  to  these  operators 
(notably  postal  operators  and  courier  companies).  E-commerce  intermediaries  (notably, 
platforms)  are  best  placed  to  assume  responsibility  as  they  have  both  a  substantive  role  in 
determining  what  is  imported  or  exported,  and  the  depth  of  commercial  data  necessary  to 
identify the goods for fiscal and non-fiscal compliance purposes. In so far as they act on behalf 
of  third  party  vendors,  it  is  reasonable  nonetheless  (and  consistent  with  other  EU  policy 
measures)  to  expect  that  they  would  use  the  technical  means  at  their  disposal  to  respond  to 
advice which public authorities may provide regarding non-compliant supply chains which use 
their services. E-commerce intermediaries do not always possess full supply chain information 
however  –  in  this  respect,  the  role  of  transport  intermediaries  remains  important,  both  in 
providing  supply  chain  information  to  customs,  and  handling  practical  interventions  such  as 
operational controls. Again, consideration of the commercial reality limits the practical options. 
The viable policy options need to take as a common principle that compliance responsibility is 
attributed  to  e-commerce  intermediaries,  and  that  transport  intermediaries  will  continue  to 
provide  supply  chain  data  to  customs  and  facilitate  customs  controls  and  risk  mitigation 
measures within their capacities. 

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Taking the above considerations into account, it would not be appropriate or realistic to attempt 
to  present  and assess options  for each process  element independently. The approach taken in 
this  assessment  is  to  prepare  coherent,  viable  packages  integrating  changes  in  processes,  the 
information environment and governance, taking account of interdependencies.  

A  final  consideration  is  the  approach  to  penalties  for  non-compliance  with  customs 
legislation. Variations across the EU in the approach to administrative penalties in particular 
could  undermine  in  practice  the  improvements  provided  for  in  the  revised  legislation.  For 
example, it is not realistic to expect data quality to improve systematically if there are little or 
no consequences for providing inaccurate data in some Member States and strong penalties in 
others.  Such  variations  also  risk  motivating  distortion  of  traffic  towards  enforcement 
environments  which  would  be  perceived  as  weaker.  All  options  should  therefore  be 
accompanied by a common approach to administrative penalties. 

The  first  Option  package  -  Option  1  -  envisages  a  coherent  reform  addressing  all  the  key 
elements above. Given the commercial realities, the main choices would in fact be common for   
all options, but their practical delivery would vary very significantly when they are combined 
with  additional  measures  for  the  information  environment  and  the  governance.  In  Option  1, 
they  are  implemented  within  the  existing  governance  structure  and  within  the  national  IT 
environments. 

Customs Processes 

As the reform aims to strengthen customs supervision and reduce the burden for traders, option 
1 contains a package of changes to customs processes, to solve the identified main issues in the 
customs  processes  in  the  UCC.  This  is  at  the  heart  of  customs  activities.  They  result  from 
requests put forward by the ECA, from the internal reflection and evaluation experience within 
the Commission and strategic insights provided in the Wise Persons Group report. Key ideas 
underlying the solutions  proposed were  discussed  and  welcomed  in  principle  by  the Member 
States in different discussions. The processes are explained in detail in Annex 5. 

The  first  issue  identified  is  the  multiplicity  of  steps  in  the  import  process  explained  in  the 
drivers.  This  option  proposes  to  completely  remove  some  steps  in  the  import  process  to 
make  it  more  similar  to  the  export  process.  The  importer  and  the  carriers  would  provide 
information to customs before the goods arrive to the Union. Customs perform risk analysis on 
the  basis  of  that  information  and,  once  the  goods  have  arrived,  request  a  control  only  if 
necessary.  The  operator  would  not  need  to  systematically  present  the  goods  to  customs  or 
provide  information  on  the  consignment  several  times.  Customs  would  not  need  to  accept 
every  piece  of  information  from  operators.  By  contrast,  the  obligation  to  provide  certain 
minimum pre-loading and pre-arrival information (advance cargo data) must remain.  

The  second  issue  identified  was  the  lack  of  a  single  responsible  operator  per  consignment. 
Removing  the  role  of  declarant  and  clarifying  the  role  of  the  importers  and  exporters 
addresses  this  issue.  Importers  and  exporters  motivate  the  traffic  of  the  goods  and  so  they 
become responsible for providing the information to customs, for paying the applicable duties 
and taxes, and for ensuring compliance with other requirements. One operator per consignment 
becomes  the  single  liable  person  both  for  financial  and  non-financial  risks.  The  carriers  are 
also key. They have essential information on the route, the means of transport, the loading and 
arrival times and the weight of the goods. Customs needs that information and also needs the 
carriers  to  be  gatekeepers,  to  contribute  to  ensure  that  importers  and  exporters  (and,  if  not 
them, the carriers themselves) provide data on the consignments, and to support controls. 

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Additional information that is relevant for customs to fulfil its role is used for the risk analysis. 
This  includes  cross-checking  information  with  other  competent  authorities  on  specific  risks. 
Economic  operators  are  required  to  share  more  information  about  their  supply  chains, 
including on the manufacturer and supplier. Carriers are required to share information on the 
container  status.  Specific  information  requirements  in  other  EU  legislation,  for  example  a 
digital  product  passport,  would  also  be  applied  by  customs  and  used  for  the  risk  analysis. 
Furthermore, the framework for administrative cooperation with international trading partners 
and the provision for the exchange of customs information are strengthened. 

This  links  with  the  third  identified  issue,  the  impossibility  to  link  the  import  process  steps 
and reuse the data. This option envisages that, once the importer or exporter provides data on 
a consignment, the carrier is entitled to link its own information to the pre-existing data. The 
importer or exporter would also be able to use the data on one consignment for  a similar one 
(or  even  beyond,  see  below  possibilities  for  trusted  traders).  Customs  would  then  have  the 
overview  on  the  consignment.  However,  the  implementation  of  this  possibility  depends 
strongly on the digitalisation and governance model chosen in each option. Option 1 is based 
on  a  decentralised  digitalisation  model  (see  below)  so  each  national  IT  environment  would 
provide  for  the  possibility  to  reuse  data  in  its  own  way.  The  central  level  –  in  Option  1,  the 
Commission  –  would  then  have  to  play  a  role  in  coordinating  the  interoperability  across 
Member States, very similar to the baseline. By contrast, in options where there is either digital 
centralisation  (O3  and  O4)  or  a  central  governance  structure  (O2  and  O4),  implementing  the 
reuse of data becomes easier. 

The  reuse  of  data  is  closely  linked  to  another  identified  issue,  that  the  UCC  defines  an 
excessively rigid format for data. To address this, this option proposes to remove the regulation 
of the data format from the UCC. This would open up the door to more flexible data formats, 
keeping  in  mind  that  the  data  should  be  sufficiently  structured  and  precise  to  allow  that 
customs carries out an automated risk analysis; it may be noted that ambiguous data can lead to 
inefficiencies  such  as  false  positives  (wasted  interventions)  or  false  negatives  (missed  risks). 
Again,  the  implementation  of  this  feature  depends  both  on  the  digitalisation  and  governance 
models chosen, as explained above. 

This new model of customs processes puts e-commerce intermediaries and traditional traders 
importing in bulk on a more equal footing with the following additional legal modifications: 

  The customs duty exemption for goods up to EUR 150 has been identified in section 2.2 as 
providing  a  competitive  advantage  to  foreign  retailers  as  opposed  to  EU  retailers  and  in 
section  2.3,  as  a  source  of  complexity,  uncertainty,  and  poor  data  in  the  completion  of 
customs formalities and as being prone to fraud. This option would eliminate the customs 
duty exemption for goods up to EUR 150 and to the highest possible extent would align 
the customs rules with VAT rules to address those problems.  

  When it comes to responsibilities, under the current UCC rules the consumer is considered 
the importer and therefore any customs  action against parcels,  be it for undervaluation  or 
for non-compliance of the goods with other non-financial requirements, has a very limited 
impact.  This  option  follows  the  VAT  model  and  makes  electronic  platforms  “deemed 
importers”,  requiring  them  to  charge  customs  duties  at  the  moment  of  the  sale  without 
modifying Member States’ liability for the EU budget. If customs encounters a problem in 
a parcel, customs can therefore act against the platform and investigate whether it concerns 
an isolated case or a systemic problem. In addition, customs could contribute to enforce the 
new  rules  on  responsibility  embedded  in  the  Digital  Services  Act.  The  idea  to  make 
electronic  platforms  liable  for  complying  with  customs  results  from  discussions  between 

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the  Commission  with  Member  States  and  e-commerce  platforms. (92)  Making  the  e-
commerce intermediaries “deemed importers” and having them charging the customs duties 
at  the  moment  of  the  sale  would  align  the  customs  treatment  with  the  VAT  regime  for 
distance sales. This would not change Member States’ responsibility for making available 
the Traditional Own Resources. 

Calculating  the  applicable  duty  is  a  complex  task  based  on  three  factors  of  the  good:  (i)  its 
tariff  classification  among  more  than  1  000  codes;  (ii)  its  customs  value  and  (iii)  its  origin. 
Applying  this  method  in  e-commerce  would  often  result  in  a  disproportionate  administrative 
burden and collection costs both for customs and businesses. To avoid this, option 1 proposes 
to provide e-commerce intermediaries with the possibility to apply a simpler duty calculation 
method  based  on  only  4  different  buckets (93),  each  of  them  with  a  different  duty  rate. 
Applying the bucketing system should not result in lower revenues than applying the standard 
calculation  but  would  be  easier.  To  keep  the  approach  simple,  only  goods  subject  to 
harmonised  excise  duties (94)  would  be  excluded  from  the  facilitation.  It  would  apply  higher 
duty rates than the standard ones in order to account for potential revenue losses resulting from 
commercial policy measures such as from anti-dumping duty, countervailing duty, and specific 
agricultural  duties.  In  order  to  prevent  the  misuse  of  the  approach  that  would  only  apply  in 
relation  to  goods  sold  directly  to  consumers  in  the  EU,  it  would  be  necessary  to  introduce  a 
safe-guard mechanism that would allow the Commission to intervene if a systematic abuse is 
identified.  The  bucketing  system  would  be  based  on  the  erga  omnes  duty  rates  and  does  not 
take into account the originating status of the goods. However, if the economic operator wishes 
to  benefit  from  preferential  tariff  rates  by  proving  the  originating  status  of  the  goods,  he/she 
can do so by applying the standard procedures. Canada successfully applies such a simplified 
system  since  2012 (95)  and  the  Global  Express  Association  refers  to  it  as  a  benchmark  in  its 
position  paper  on  ‘Tax/Duty  Collection  on  Imported  Low  Value  Shipments (96).  Taking  the 
above  elements  together,  the  revised  and  simplified  set  of  processes  under  this  Option,  for 
‘standard’ operators, is depicted in Figure 5 below.  

(92)  Customs 2020 Project Group on the Import and Export Customs Formalities related to Low Value Consignments and its 

Subgroup on Platforms Register of Commission expert groups and other similar entities (europa.eu). 

(93)  The  four  potential  buckets  would  be  4  buckets  with  respective ad  valorem duty  rates  of 5% (e.g.  for  toys,  games, 
houseware  articles), 8% (e.g.  for  silk  products,  carpets,  glassware), 12% (e.g.  for  cutlery,  electrical  machinery) 
and 17% (e.g. for footwear) and containing goods based on their 6-digit Harmonised System code number that remains a 
requirement  for  pre-arrival  cargo  requirements  under  the  legislative  proposal  for  revising  the  Union  Customs  Code. 
Goods having a 0% erga omnes duty rate would continue to benefit from zero duties. 

(94)  Article 1(1) of Council Directive (EU) 2020/262 of 19 December 2019 laying down the general arrangements for excise 

duty (recast) (OJ L 58, 27.2.2020, p. 4–42) 

(95)  See https://www.wto.org/english/tratop_e/msmes_e/canada_sept21_e.pdf  
(96)  See  GEA  PROPOSAL  ON  DUTY-TAX  COLLECTION  ON  IMPORTED  LOW  VALUE  SHIPMENTS.pdf  (global-

express.org) 

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Figure 5 – Illustration of simpler customs procedures for a consignment on import - Source DG 
TAXUD  

Another problem identified is the lack of penalties, which is compensated by a reward system 
to  trustworthy  operators  or  AEO.  This  system  however  has  proven  difficult  to  monitor.  To 
address this problem, the package of simplification would modify the possibilities for trusted 
traders: 

  AEO  traders  can  operate  under  a  trust  and  check  approach  if  they  have  their  electronic 
system  interacting  with  the  customs’  systems  on  a  constant  basis  and  thereby  allowing 
customs to have access to all relevant data directly from the operators’ systems. They can 
self-monitor  the  compliance  of  their  goods  and  calculate  and  pay  duties  periodically, 
without  submitting  transaction-based  customs  declarations  per  consignment.  Pre-loading 
and pre-arrival information per consignment would still be required but carriers could rely 
on the information previously submitted by these trusted importers. Customs would be able 
to perform risk analysis and check information on a continuous basis and request a control 
whenever they estimate it necessary and even under certain conditions remove the traders’ 
ability  to  “self-release”  goods.  The  quality,  coherence  and  accuracy  of  the  received 
information will allow monitoring the operator’s trustworthiness.  

 

transparency  and  system-to-system  exchange  of 

the 
In  return  for 
trusted/AEO+  operators  would  experience 
targeted  customs 
interventions  in  the  supply  chain,  when  these  are  necessary.  Furthermore,  subject  to  the 
prior  agreement  of  the  other  competent  authorities,  these  traders  could  carry  out  certain 
controls generally performed by those authorities.  

fewer  and  more 

information, 

  The existing possibilities to reduce guarantees for these traders would be enhanced.  

The last three measures in the package are also intended to render customs processes easier but 
focus on the customs authorities, as follows: 

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  The  UCC  would  be  more  precise  on  the  cooperation  between  customs  and  other 
authorities,  opening  up  the  possibility  to  agree  on  joint  management  criteria,  to  do  joint 
monitoring  of  trustworthy  operators,  to  coordinate  intervention,  to  set  up  a  time-limit  for 
reacting  to  specific  consignments,  to  address  supply  chains  as  a  whole  and  to  exchange 
data.  The  implementation  of  these  possibilities  highly  depends  on  the  digitalisation  and 
governance model chosen in each option.  

  The Commission would have proper access to data in national systems to get and process 
some data in line with its role in risk management and for anti-fraud purposes but the core 
of digitalisation rests with the Member States, as explained below.  

  The  UCC  envisages  a  mechanism  to  address  crisis  scenarios,  which  would  allow 
moderation of the effect of some rules. In this option, the Commission would be entitled to 
adopt an urgent implementing decision to explain those flexibilities. 

Many stakeholders support simpler customs processes. The public consultation confirmed that 
respondents  150  (77%)  agreed  with  the  need  to  simplify  how  information  is  provided  to 
customs and to reduce administrative burden and formalities. The majority of respondents also 
strongly agree [132 (68%)] or tend to agree [26 (13%)] with making more use of commercial 
information. ‘A new partnership with trusted traders and other competent authorities for better 
risk  management,  including  reinforced  advance  cargo  information’  was  supported  by  101 
(52%)  who  strongly  agree  and  49  (25%)  who  tend  to  agree.  Finally,  enhancing  co-operation 
between customs and non-customs  authorities (notably Market  Surveillance Authorities,  Law 
Enforcement Authorities, Tax Agencies) was among the most supported elements of the reform 
options with 106 (55%) strongly agree and 47 (24%) tend to agree. 

These measures should be accompanied by a common approach to administrative penalties, 
to  ensure  that  these  are  used  in  an  effective,  proportionate  and  dissuasive  manner  across  the 
EU.  This  should  take  the  form  of  a  framework  establishing  a  minimum  core  of  customs 
infringements and non-criminal sanctions, and include a common list of acts or omissions that 
should  constitute  customs  infringements  in  all  Member  States,  and  provide  for  minimum 
amounts  of  pecuniary  charges  as  well  as  the  possibility  of  revocation,  suspension  or 
amendment  of customs  authorisations.  It  should concern only non-criminal  sanctions without 
preventing  Member  States  for  providing  for  criminal  sanctions.  This  framework  will  help 
underpin  the  proper  implementation  of  the  revised  processes,  and  will  also  help  ensure  that 
perceived  differences  in  national  enforcement  environments  do  not  motivate  distortions  in 
traffic flows. The common framework for penalties should apply in all options as an integral 
part  –  this  description  is  therefore  not  repeated.  A  common  attempt  to  address  customs 
infringements and sanctions was considered in a proposal for a Directive in 2013 (97) but was 
finally withdrawn by the Commission (98) because it failed to be adopted by the co-legislators. 
(99)  

In  the  Reflection  Group,  Member  States  welcomed  the  exploration  of  different  customs 
processes, but asked for detailed explanations in the impact assessment. Participants converged 
on  the  importance  of  risk  management,  including  at  a  European  level.  The  structural 
cooperation  with  other  authorities  was  considered  with  interest.  The  topic  was  further 
discussed in the Customs Policy Group on 14.12.2022.  

(97)  Proposal  for  a  DIRECTIVE  OF  THE  EUROPEAN  PARLIAMENT  AND  OF  THE  COUNCIL  on  the  Union  legal 

framework for customs infringements and sanctions, COM/2013/0884 final. 

(98)  Withdrawal of Commission proposals 2020/C 321/03 (OJ C 321, 29.9.2020, p. 37–40).  
(99)  Only the European Parliament adopted a first reading position (European Parliament legislative resolution of 5 July 2017 
on the proposal for a directive of the European Parliament and of the Council on the Union legal framework for customs 
infringements and sanctions (COM(2013)0884 – C8-0033/2014 – 2013/0432(COD)) 

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The above-mentioned customs processes are also included in all subsequent options. They are 
not  repeated  below  unless  a  specific  feature  needs  to  be  signalled.  Some  elements  of  the 
processes described in option 1 will see the intervention of another actor in subsequent options 
2 and 4: the European Customs Authority. 

Data management  

Digital  and  automated  processing  of  information  is  necessary  to  handle  the  large  amount  of 
goods entering and leaving the Customs Union every hour. In option 1, the simpler processes 
as  described  above  would  require  substantial  changes  to  the  national  customs  IT 
environments.  The  advantage  of  having  national  customs  IT  environments  is  that  each 
Member State can adapt it to its specific needs, and the continuation  of established links and 
formats  for  exchanging  information  with  other  non-customs  IT  systems  within  one  Member 
State. The challenge is the interoperability of those national IT environments at EU level. The 
fragmentation  across  different  systems  and  capacities  would  continue  to  provide  a  challenge 
for the EU risk analysis. 

The national customs IT environments would need to ensure that the following functionalities 
are available:   

  submission of information by different actors in the supply chain. Capacity to connect 
the  different  elements  and  recognize  whether  the  information  was  already  provided 
elsewhere  to  overcome  the  fragmentation  of  data  across  the  individual  national 
declaration systems; 

  handling more data, as additional information on the goods, such  as its manufacturer, 

would be required to check compliance with non-financial requirements; 

  handling of information provided by e-commerce platforms;    
  be  built  around  the  data  (as  compared  to  the  declaration  process)  to  improve  the 

customs supervision and risk management; 
real-time comparison of data; 

 
  exchange  of  data  both  between  customs  administrations  and  with  other  competent 

 

authorities; 
international  exchange  of  data  with  customs  authorities  in  the  country  of  export  / 
import. 

Governance 

In  this  option,  the  coordination  of  customs  action  would  be  strengthened  within  the  existing 
governance framework with the Commission, Council and Member States as main actors.  

A  mechanism  that  would  involve  Member  States  in  deciding  on  a  regular  basis  on  non-
financial policy priorities for customs supervision and risk management would be set up. This 
common  focus  could  help  streamline  the  approach  of  Member  States  in  the  areas  of  risk 
management  and  controls.  The  operational  implementation  would  however  remain  solely  at 
national level as would operational, real-time risk analysis and risk management, leaving room 
for divergence in approaches. 

Similar  to  the  dynamic  baseline,  enhanced  collaboration  projects  and  expert  teams  would  be 
supported by the customs programme. 

Page 39 / 291 

 
 
 
 
 
 
 
Implementation timeline 

The implementation of this option would be split in three phases. Y1 is the first year of entry 
into force of the new legal framework (20 days after publication in EU Official Journal): 

-  Phase  1  (Y1-3)  –  Member  States  build  the  national  IT  solutions  for  e-commerce 

reporting 

-  Phase  2  (Y4-8)  –  E-commerce  intermediaries  start  reporting  to  national  customs  and 
Member States continue adapting their IT environment to the new customs processes 
-  Phase  3  (Y9-11)  –  traders  progressively  start  operating  in  the  new  national  IT 

environment 

From  Y12,  all  traders  operate  in  the  new  national  IT  environments  and  can  apply  the  new 
processes. 

5.2.2 Option 2: An EU Customs Authority for coordination  

In option 2, the Customs processes and data management would in essence be as described 
in option 1, but an EU Customs Authority  would coordinate their implementation, leading to 
more synergies. 

Governance  

In  addition  to  the  current actors in  the baseline  and option 1, a European Customs Authority 
(‘the Authority’) in the form of an EU agency would be introduced (Annex 8). 

Similar  to  Option  1,  non-financial  policy  priorities  for  customs  supervision  and  risk 
management  would  be  introduced.  The  implementation  of  the  priorities  would  however  be 
done  by  the  Authority  and  Member  States.  While  Member  States  would  continue  to  do  risk 
analysis  in  their  national  IT  environments,  the  Authority  would  support  and  coordinate  the 
approach of Member States in the areas of risk management and controls. The Authority would 
further  conduct  preparatory  work  for  the  Commission  for  the  prioritisation  exercise.  The 
Authority  would  prepare  crisis  response  protocols  and  procedures  that  it  would  activate  on 
political and policy demand and would support the Member States in their delivery, monitoring 
the results. The Member States would be involved in the Authority. 

The  Authority  would  coordinate  cooperation  between  the  Member  States,  define  a  common 
content of training and uniform implementation of rules, including guidance on processes and 
working  methods  and  common  interpretation  of  classification,  valuation  and  origin.  The 
Authority  would  exploit  the  legal  possibilities  of  cooperation  between  customs  and  other 
authorities. The Authority would conduct performance measurement activities for the Customs 
Union. 

In  addition,  the  Authority  would  support  the  deployment  of  the  funds  of  the  expected  future 
successors,  including  the  activities  related  to  the  maintenance  and  operation  of  the  EU  IT 
systems  connecting  the  national  customs  environments,  and  the  Customs  Control  Equipment 
Instrument (CCEI). 

It may be noted that, the tasks for the Authority in this option would be more limited than the 
operational Authority in option 4.  

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Implementation timeline 

The implementation of this option would be split in three phases. Y1 is the first year of entry 
into force of the new legal framework (20 days after publication in EU Official Journal): 

-  Phase  1  (Y1-3)  –  Member  States  build  the  national  IT  solutions  for  e-commerce 
reporting.  The  Commission  undertakes  some  preparatory  activities  to  form  the  EU 
Customs Authority. 

-  Phase  2  (Y4-8)  –  E-commerce  intermediaries  start  reporting  to  national  customs  and 
Member States continue adapting their IT environment to the new customs processes. 
The Authority progressively recruits and starts functioning. 

-  Phase  3  (Y9-11)  –  traders  progressively  start  operating  in  the  new  national  IT 

environment. The Authority is fully functional. 

From  Y12,  all  traders  operate  in  the  new  national  IT  environments  and  can  apply  the  new 
processes. The Authority is fully functional. 

5.2.3 Option 3: A central EU Customs Data Space, managed by the Commission  

The Customs processes would in essence be as described in option 1, but the introduction of 
an EU Customs Data Space facilitates their application, particularly for the trust and check. 

Data management  
In  line  with  the  overall  Commission  strategy  for  data (100),  the  Commission  would  build  and 
manage a Customs  Data Space. A  Data Space is an integrated set  of interoperable electronic 
services  for  collecting,  processing  and  exchanging  relevant  information.  It  is  secured  and 
allows data sharing by a set of stakeholders, including raw data and non-harmonised formats, 
matching  them  and  producing  results  that  can  be  used  for  different  purposes,  including  risk 
management and performance measurement. (For further details, see Annex 7 section 4.4). 

The Data Space would facilitate the collection of information from different sources along the 
supply  chain  (manufacturers,  insurers,  carriers,  importers).  It  would  use  the  information  for 
improved  customs  risk  management,  which  is  the  very  core  of  customs  supervision.  This 
engine  would  operate  24/7  in  real-time  and  be  supported  by  modern  data  analysis  tools  and 
artificial intelligence. It would facilitate the exchange of information with other relevant actors. 
It  would  allow  for  better  cooperation,  both  between  customs  administrations  and  with  other 
competent  authorities.  It  would  enable  information  exchange  and  access  between  customs 
authorities,  the  Commission  services  (including  OLAF),  economic  operators  and  other 
authorities according to their role, while respecting data protection. The real-time comparison 
of data is of particular importance for the supervision of non-financial risks.  

In practical terms, the Data Space consists of a legal framework, which clarifies access rights 
and  obligations.  A  technical  framework  that  specifies  how  different  actors  can  connect  and 
interact  with  the  Data  Space.  And  a  core,  where  the  information  is  stored,  processed,  and 
analysed.  According  to  the  evolving  needs,  so-called  micro-applications  can  use  the  relevant 
data  for  a  specific  purpose.  They  are  much  more  flexible  and  cheaper  to  develop  than  the 
current IT solutions.  

The example below shows the collection of information  (blue circle) from  different  actors in 
the supply chain of the import of a consignment of washing machines from South Korea. The 
information  from  third  country  manufacturers  and  retailers  helps  the  importer  documenting 
compliance.  For  instance,  information  on  the  product  can  be  submitted  once  and  re-used  for 

(100) See the 2020 Commission communication ‘A European strategy for data’, COM/2020/66 final. 

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different  shipments.  The  Data  Space  allows  central  risk  management  and  the  exchange  of 
information  with  competent  authorities  via  micro-applications  (green  box).  The  micro-
applications  allow  specific  authorities,  not  only  customs  authorities,  to  use  certain  –  legally 
defined – data from the Data Space, or to provide their information to the Data Space, to better 
enforce  the  growing  list  of  prohibitions  and  restrictions.  This  strengthens  the  cooperation 
between customs administrations, with specialized authorities, and with international partners. 
It  shows  how  the  Data  Space  can  support  both  the  simpler  processes  for  trade,  and  the 
strengthened capacity of customs and their cooperation with other authorities. 

Figure 6 – Illustration of a practical example in the EU Customs Data Space – Source DG TAXUD 

In  the  past,  centralised  approaches  to  IT  development  were  often  discarded,  due  to  a  certain 
path dependency. In the rigid IT systems, focused on process compliance and the exchange of 
messages, the compatibility with the existing national structure was considered more important 
than the synergies and savings from a central development. The option of a single centralised 
system is considered here because two aspects are different from previous cases. First, the size 
and ambition of the reform is significant enough to overcome the path dependency and develop 
a  better  system  instead.  And  second,  the  Data  Space  allows  consideration  of  national 
particularities in the respective micro applications. It is not a one-size-fits-all approach, but a 
common platform on which the specific solutions can be developed. 

Many  stakeholders  support  a  single  customs  IT  environment.  The  public  consultation  asked 
which policy changes should be considered in the reform. Most support was expressed for the 
‘simplified  provision  of  data’  and  ‘information  exchange  between  customs  and  other 
authorities’  with  139  highly  positive  (72%)  and  30  positive  (15%)  and  125  highly  positive 
(64%)  and  40  positive  (21%)  respectively.  Asked  about  the  impact  on  their  association,  ‘a 
single EU customs information environment’ received most support with 122 replies seeing it 
as highly positive (63%) and 43 as positive (22%).  

From the trade perspective, the Data Space modifies the delivery of the simplified processes: 

-  Traders  can  deal  with  all  customs  processes  (including  release  in  any  Member  State) 
through a single EU portal rather than through separate national systems for each MS 

-  The processes are uniform regardless of entry point 

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-  The Data Space connects data for a consignment across all steps and across the EU 
-  EU  accounts  are  offered  to  support  compliance  management  (e.g.,  for  managing 
documents or their references and guarantees, and enabling further facilitation services 
to be rolled out for sectoral policies, in addition to Single Window formalities). 
-  E-commerce platforms provide information to one environment rather than 27. 

Among Member States consulted in the Reflection Group, there was general convergence that 
data  needs  to  be  at  the  centre  of  customs’  operations  to  make  the  Customs  Union  fit  for  the 
digital  age.  Although  views  differed  whether  such  a  data-driven  approach  could  best  be 
implemented through a centralised or decentralised model, most Member States were in favour 
of  a  centralised  approach,  acknowledging  difficulties  with  the  current  IT  model  in  terms  of 
timely implementation,  data availability and data fragmentation. E-commerce  was mentioned 
as  main  priority  to  focus  on  and  start  with,  in  general,  but  also  in  this  regard.  While  a  few 
preferred  their  national  IT  environment,  most  participants  pushed  for  a  longer-term  data/IT 
vision  and  strategy  towards  more  centralisation.  Most  also  emphasized  the  need  for  an 
operational  risk  management  layer  at  EU  level  and  that  the  reform  should  ensure  optimal 
access and use of data at central level, allowing also better risk analysis at national level.  

From  the  customs  perspective,  the  Data  Space  improves  the  use  and  usefulness  of  the 
information: 

-  First, it allows for a real-time EU risk management.  
- 
It includes risks and fraud patterns previously covered by the national perspective. 
-  New  information  requirements  or  new  data  sources  can  be  integrated  and  used  for 

- 

better risk analysis. For example, integrating the container status data. 
It  gives all customs administrations an EU wide perspective on activities that concern 
them. 

-  The  collaboration  framework  with  other  authorities  is  facilitated  by  a  common  Data 

- 

- 

Space and the cross-checking of relevant information. 
Identified  risks  are  directly  visible  to  all  relevant  administrations,  to  address 
circumvention.    
It  facilitates  coordinated  action  on  a  specific  risk  across  different  Member  States  and 
supports crisis response. 

This  option  proposes  a  gradual  transition,  starting  with  the  central  implementation  by  the 
Commission.  Member  States  customs  IT  systems  are  gradually  integrated  or  phased  out,  as 
more functionalities switch to common or customised applications in the Data Space. Annex 7 
explains the Data Space in detail and outlines a transition roadmap that would take 10 years to 
the final migration of a national system.  

Governance 

From  the  governance  perspective,  this  option  would  mainly  work  like  Option  1:  The 
Commission  prepares  a  common  risk  management  approach  and  co-operation  framework  to 
help national customs and other authorities to work together for risk management and controls. 
Non-financial policy priorities for customs supervision and risk management are introduced as 
per Option 1. 

In Option 3, the role of the Commission would however be reinforced because it manages the 
EU Customs Data Space. This would enable the Commission to drive joint analytics projects 
involving  customs  and  other  authorities.  It  would  elaborate  Common  Risk  Criteria  and 
operational risk indicators for direct application on the EU data flows and would work closely 
with  the  Member  States  on  this.  The  Commission  would  arrange  for  risk  information  from 
other authorities to be integrated directly in EU-wide strategic and operational risk analysis.  

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These  factors  would  lead  to  a  significant  improvement  in  the  quality  of  risk  analysis. 
Nevertheless,  the  Commission’s  capacity  to  support  and  deliver  such  deep  operational  work, 
and to conduct the necessary operations would need to be strengthened. If not, the significant 
investment in the data management environment may be under-exploited, and the governance 
structure would lack an actor with the clear organisational mandate and critical mass to deliver 
to the full potential. 

Implementation timeline 

The implementation of this option would be split in three phases. Y1 is the first year of entry 
into force of the new legal framework (20 days after publication in EU Official Journal): 

-  Phase  1  (Y1-2)  –  the  Commission  builds  the  seed  of  a  Data  Space  for  e-commerce. 

Deploying one solution requires a year less than deploying 27 solutions. 

-  Phase  2  (Y3-5)  –  E-commerce  intermediaries  start  reporting  to  the  Commission 
Customs Data Space and the Commission continues building it for the rest of operators.  
-  Phase  3  (Y6-9)  –  traders  progressively  operate  in  the  Data  Space  and  national  IT 

systems progressively phase out  

From Y10, all traders operate in the Commission Data Space. 

5.2.4 Option 4: An EU Customs Authority for coordination and operations, managing an 
EU Customs Data Space 

Customs  processes  would  be  reformed  as  described  in  option  1.  However,  a  central  Data 
Space and an operational EU Customs Authority would implement the changes.  

Data management is built around a central Data Space, as described in option 3. In option 4, a 
European  Customs  Authority  would  however  manage  it.  (For  further  details,  see  Annex  7 
section 4.5). 

Governance 

Non-financial  policy  priorities  for  customs  supervision  and  risk  management  would  be 
introduced and implemented as per Option 2. 

The  list  of  tasks  of  the  European  Customs  Authority  would  cover  the  coordination  activities 
and  tasks  to  support  the  deployment  of  EU  funds  as  described  in  Option  2.  In  addition,  the 
Authority’s  tasks  would  be  broader  on  risk  management  and  co-operation,  data  management 
and supporting the delivery of simplified processes. The Member States would be involved in 
the Authority.  

With  the  central  Data  Space,  the  Authority  would  have  a  prominent  role  in  processing  and 
managing data for allowing its use by stakeholders according to their access rights such as the 
Commission services (including OLAF), Member States and other authorities. It would enable 
the  Authority  to  drive  joint  analytics  projects  and  conduct  real-time  operational  risk 
management for the Customs Union in support of Member States. The Authority would be able 
to directly design, test and implement operational risk indicators to be used on EU-level data 
flows  and  analyse  operational  results  to  provide  periodic  information  and  indicators  for 
performance measurement. 

The  authority  would  organise  co-operation  with  other  authorities  at  EU  level  for  all  policy 
priorities  within  a  structured  co-operation  framework  allowing  the  development  of  joint 

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supervision  strategies.  Cooperation  with  other  authorities  and  OLAF (101),  which  organises 
anti-fraud  operations,  would  be  described  in  the  relevant  legislation.  Its  investigative 
competences  would  not  be  affected.  The  Authority  prepares  crisis  response  protocols  and 
procedures that it activates on political and policy demand and supports the Member States in 
their delivery, with direct and immediate implementation of monitoring and targeting activities 
on an EU-wide basis using the EU Customs Data Space.  

In the Reflection Group, Member States expressed a clear preference that if a new additional 
EU layer is introduced, it should manage the new centralised IT environment as opposed to the 
latter  being  managed  by  the  Commission.  In  general,  they  considered  more  centralisation  in 
areas  like  data  management,  risk  management  and  training  essential  to  make  the  Customs 
Union future-proof. Other areas for increasing cooperation were suggested: (i) organising joint 
customs  controls  and  operations,  (ii)  establishing  national/regional  centres  of  excellence  that 
could execute tasks (e.g. joint training) for the benefit of all or similar Member States and (iii) 
establishing an intra-EU mobility programme for customs officers, allowing them to work in a 
different Member State for a certain period. 

Public  stakeholders  equally  see  a  role  for  the  Authority  in  managing  the  IT.  In  the  public 
consultation,  respondents  expressed  support  for  reforming  the  EU  customs  governance  to 
provide  for  an  EU  layer,  as  long  as  it  would  not  bring  additional  burden  for  economic 
operators. Asked about the specific tasks for such EU layer, respondents considered: 

-  Training of customs officers – 113 (58%) strongly agree, 42 (21%) tend to agree 

- 

IT management – 97 (50%) strongly agree, 48 (25%) tend to agree 

-  Financing of customs equipment – 85 (43%) strongly agree, 43 (22%) tend to agree 

-  EU crisis response – 79 (41%) strongly agree, 56 (29%) tend to agree 

-  EU-wide risk management – 73 strongly agree (38%), 58 (30%) tend to agree 

- 

Identification  of  risk  priorities  at  political  level  –  57  (29%)  strongly  agree,  63  (32%) 
tend to agree   

Implementation timeline 

The implementation of this option would be split in three phases. Y1 is the first year of entry 
into force of the new legal framework (20 days after publication in EU Official Journal): 

-  Phase 1 (Y1-2) – the Commission builds the seed of a Data Space for e-commerce; EU 
services prepare the set-up of the EU Customs Authority (recruitment, set-up, etc). 

-  Phase  2  (Y3-5)  –  E-commerce  intermediaries  start  reporting  and  the  EU  Customs 
Authority takes over the building and management of the Customs Data Space for the 
rest of operators.  

-  Phase  3  (Y6-9)  –  traders  progressively  operate  in  the  Data  Space  and  national  IT 

systems progressively phase out. The Authority is fully functional. 

From Y10, all traders operate in the Data Space. The Authority is fully functional. 

(101)  

The  European  Anti-Fraud  Office,  OLAF,  carries  out  independent  external  administrative  investigations  for 
strengthening the fight against fraud, corruption and any other activity adversely affecting the Union’s financial interests, 
as well as any other act or activity by operators in breach of Union provisions.  

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5.3 Discarded policy options 

5.3.1 Full integration into one EU customs service 

A first discarded option is the most ambitious one, the full integration of all national customs 
administrations  in  one,  single  EU  customs  service  in  the  form  of  an  agency.  All  national 
customs staff would be shifted to the EU level and employed by the EU customs service, which 
would decide on the allocation of the resources according to the needs of the Customs Union. 

The  service  would,  in  addition  to  the  tasks  of  the  Authority  under  Option  4,  take  over  all 
customs related tasks remaining at national level and become the sole EU Customs Authority. 
Additional  synergies  and  economies  of  scale  could  be  generated,  reducing  the  number  of 
central services, like human resources, procurement, contract management, etc. 

The EU customs service would become the single actor implementing customs legislation and 
policy.  As  it  would  also  perform  the  operational  controls  and  audits  previously  conducted  at 
national  level,  the  financial  liability  to  make  available  traditional  own  resources  would  also 
shift to the EU level. 

This  option  would  clearly  bring  significant  benefits.  The  Customs  Union  is  one,  with  one 
single  EU  external  border.  The  costs  for  the  EU  budget  would  be  very  high,  but  Member 
States’ role in collecting the customs duties would also disappear. If an EU Customs Authority 
in line with options 2 or 4 performed its tasks efficiently and effectively, it could generate spill 
over effects to other operational tasks still exercised at national level and, in the end, gradually 
lead to full integration into one EU customs service. 

However today, full integration of all national customs into a single EU customs service is not 
politically feasible because it would not be supported by a vast majority of Member States. A 
comprehensive  cost-benefit  analysis  of  all  costs  linked  to  the  full  disintegration  of  national 
customs administrations was not possible for this impact assessment. 

5.3.2 Other discarded options  

Options requiring financial investments for a central digitalisation or for an EU layer without 
reforming  the  customs  processes  are  not  analysed  in  detail  because  those  options  are 
considered inefficient. 

When analysing to what extent the processes for e-commerce need to be modified, the options 
to decrease or increase the EUR 150 customs duty exemption have been discarded. The reason 
is  that  none  of  the  identified  problems  (distortion  of  competition,  complexity,  uncertainty, 
difficulty to control and fraud) is linked to the amount exempted but to the very  existence of 
the exemption. The analysis  carried out  by PriceWaterhouseCoopers in  the framework of the 
study  on  “An  integrated  and  innovative  overhaul  of  EU  rules  governing  e-commerce 
transactions  from  third  countries  from  a  customs  and  taxation  perspective”  (running  since 
November 2021) (102). The study follows up action 9 of the Customs Action Plan whereby the 
Commission  endeavoured  to  examine  the  effects  of  e-commerce  on  customs  duty  collection 
and on the level playing field for EU operators, including possible arrangements for customs 
duty collection on the lines of the new VAT collection approach under the Import One-Stop-
Shop  (‘IOSS’).  The  study  assessed  the  possible  implications  of  changing  the  EUR  150  duty 
relief threshold and took account of the results of the exploratory consultation which ran from 
16  December  2021  until  10  March  2021  and  the  outcome  of  the  targeted  questionnaire 
addressed  to  Member  States’  customs  authorities.  In  its  assessment  of  the  three  options 
regarding possible changes to the duty relief threshold (removing, increasing to EUR 1,000, or 

(102) The final report is still being assessed at the time of writing the impact assessment. 

Page 46 / 291 

 
 
                                                      
lowering to EUR 22), the study concluded that the removal of the customs  de minimis would 
result in the largest revenue increase, and would level the playing field between foreign sellers 
and  the  domestic  market  to  the  greatest  extent.  It  would  also  remove  fraud  or  evasion  of 
customs duty payment resulting from the splitting of consignments and reduce the incentive for 
undervaluation.  Therefore,  removal  of  the  customs  de  minimis  would  result  in  the  greatest 
number of benefits. 

This conclusion was in line with the recommendations of the Wise Persons Group that claimed 
in its report that the EUR 150 threshold provides the wrong incentives both in terms of trade 
(unfair  competition)  and  of  environmental  sustainability  (higher  emissions  footprint  due  to 
splitting of consignments), and therefore proposed its removal. Another discarded possibility is 
to  have  the  consumers  declaring  to  customs  the  goods  that  they  buy  on-line,  because  it  is 
considered burdensome for them while the ones placing goods in the Union market are the e-
commerce intermediaries, not the consumers. 

When  considering  the  data  management,  a  hybrid  model  between  decentralisation  and 
centralisation,  by  which  a  Member  State  or  a  group  of  Member  States  develops  a  digital 
solution  for  the  others  has  also  been  discarded.  Previous  experience  shows  that  in  general 
Member  States  have  difficulties  to  accept  IT  solutions  developed  in  another  Member  State 
and/or that public procurement across Member States is very complex. 

In  relation  to  the  governance,  it  was  considered  whether  existing  agencies  such  as 
FRONTEX,  EUROPOL,  EU-Lisa  and  CEPOL  could  potentially  host  a  dedicated  department 
for customs, but this has been discarded because none of them covers all aspects that customs 
deal  with  and  distributing  the  customs  elements  in  several  specialized  EU  agencies  seriously 
risks further fragmentation in the Customs Union (Annex 8, section 3.4). 

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6. WHAT ARE THE IMPACTS OF THE POLICY OPTIONS? 

6.1 Methodology of assessment and baseline  

All options are assessed in the same manner against the following categories of impact: 

Quantitative: 

1 

2 

Costs - Member 
States  

Costs - EU 
Services  

3 

Costs - Business  

4 

Benefits - 
Quantitative  

Qualitative: 
5 
6 

Efficiency 
Effectiveness 

7 
8 

Coherence 
Proportionality 

Investment in new or updated IT (one-off) 

Cost of maintaining IT (recurrent) 
Customs Staff (recurrent) 
Investment in new or updated IT (one-off) 
Cost of maintaining IT (recurrent) 
Customs Staff (recurrent) 
Compliance  costs  (administrative  savings,  net  of  additional  e-
commerce  duty  costs;  recurrent;  in  practice,  in  all  options 
reductions). 
e-commerce revenue (new revenue from removing threshold) 
Cigarettes revenue (illustrative scenarios: preventing loss) 
Consumer savings from eco-design (illustrative scenarios) 

Overall efficiency 
Against the General Objective, and each specific objective. 
Protection outcomes (based on case studies in Annex 9 addressing 
single market and sustainability, security and revenue) 
Overall policy coherence, and strategic capability 
Overall proportionality 

Quantitative estimates are based on assumptions outlined in Annexes 7 (for IT) and 9, using 
current prices. As with any forecast covering a 15-year period the figures cannot be regarded as 
certain  to  materialise.  They  are  nonetheless  useful  as  indicative  measures  of  the  scale  of 
difference in outcomes that can be expected across the options based on objective differences 
in the capabilities they bring. As regard IT estimates in particular, the final costs would depend 
on outcomes of detailed specification exercises and of procurement activities. This report takes 
a  best  estimate  of  costs,  which  provides  a  good  indication  of  the  relative  position  of  the 
options,  but  for  which  the  absolute  values  cannot  be  robustly  quantified  at  this  stage  for  15 
years into the future. The timing of materialisation of estimated savings depends in part on the 
migration approaches preferred in practice by the Member States and the economic operators; 
the programming of this migration cannot be determined at impact assessment stage, but would 
be  developed  with  the  appropriate  external  consultations  only  after  the  legal  text  is  adopted. 
The figures for cigarettes revenue (prevention of loss) and consumer savings from ecodesign,  
are  illustrative  scenarios  based  on  improved  enforcement  and  are  not  included  in  the 
estimation  of  net  impact.  (Further  details  relating  to  this  analysis  are  found  in  Annex  9, 
sections 5.2.3 and 6.6.2). 

Qualitative assessment of impact is based on a score from (*) to (*****), where (*) indicates a 
low  achievement  of  the  objectives  and  (*****)  a  high  achievement.  (Detailed  analysis 
underpinning the quantitative analysis is found in Annex 9, sections 4, 5 and 6).  

Page 48 / 291 

 
 
 
 
 
Social and environmental impact is also described. This is not included in the tables, which 
are used to provide a more direct assessment of specific issues based on case studies.  (Further 
analysis  underpinning 
in  Annex  9,  section  5).  
Macroeconomic impacts are not directly estimated (this is explained further below). 

this  assessment  analysis 

is  found 

This  section  explains  the  assessed  impact  of  each  option.  It  includes  tables  for  each  option 
addressing points 1-4 above, and describes the impacts for points 5-8. To avoid duplication, the 
summary tables on points 5-8 are presented only in section 7, where options are compared. 

Approach to quantification of costs for the Member States and the Commission 

In the baseline with respect to which the impact of the options is assessed, Member States and 
the  Commission  have  two  main  cost  impacts:  (i)  the  cost  of  building  (one-off)  and 
maintaining (recurrent) the customs IT systems and (ii) staff costs.  

(i) 

Direct administrative costs - IT  

There are no reliable data on the total  IT costs of  Member States. These  differ significantly 
from one to another. To overcome that problem, a statistical approach was chosen. In 2008, the 
Commission and a group of Member States validated  the EU customs reference architecture, 
which  depicted  the  current  UCC  customs  processes,  mapped  the  IT  systems  necessary  to 
automate them and  provided input on the potential cost  by assigning a number of staff (full-
time equivalent – FTEs) to develop them. This basic architecture supports the calculations of 
the  baseline  scenario  in  this  analysis.  Informal  consultations  with  Member  States  and  the 
figures that the Member States have reported (103) to the Commission for specific IT projects 
show that the estimation is good enough as order of magnitude (without implying, of course, 
that each Member States spends exactly the same amount on IT). More details are provided in 
Annex 7, section 5.1.  

For  the  Commission,  the  2021  costs  were  considered  as  a  good  representation  of  the  UCC 
implementation and operational costs, so they are used as the basis.  

(ii) 

Direct administrative cost impact - staff  

To  convert  Member  State  FTE  numbers  to  cost  estimates,  the  Eurostat  Total  Labour  Cost 
figure for 2020 (EU 27) was used. To convert EU services FTE to cost estimates, the average 
EU costs relating to staff were used, assuming a ratio of 2:1 between establishment plan posts 
and external posts. 

Approach to quantification of costs for Economic operators 

The  complex  customs  processes  as  described  in  the  driver  in  section  2.3  result  in  an 
administrative cost for the economic operators. For this analysis, this cost has been assessed 
using  as  benchmark  the  compliance  that  both  the  UK  and  the  Netherlands  government 
calculated  for  assessing  the  impact  of  Brexit.  Therein,  the  cost  is  calculated  by  applying  an 
hourly  rate  to  the  time  spent  on  filing  declarations  for  customs  processes.  In  practice,  the 
ultimate  costs  for  each  individual  business  would  depend  on  their  internal  processes  and 
information  management  structures,  on  the  measures  that  they  take  and  the  extent  to  which 
they choose optional elements of the reform. As with IT costs, the overall estimate in this case 

(103) 2021 e-customs annual report  

https://op.europa.eu/en/publication-detail/-/publication/7727d524-fd9b-11ec-b94a-01aa75ed71a1/language-en  

Page 49 / 291 

 
 
                                                      
should also be taken as indicative of the relative position of the options, bearing in mind that 
absolute values cannot be robustly quantified at this stage for 15 years into the future. 

Consumers 

As explained in section 2.3, in the baseline, consumers are considered the importers of the third 
country goods that they buy online and are brought to the EU. This means that legally speaking 
consumers  are  responsible  for  the  compliance  of  the  goods  with  EU  legislation,  including 
customs. In practice, however, the carrier generally fulfils the customs formalities on behalf of 
the consumer and, depending on the circumstances, charges a (sometimes unexpected) fee for 
that  service.  For  this  analysis,  the  fee  for  filing  customs  declarations  that  the  consumer 
sometimes pays has been considered part of the administrative compliance costs of businesses 
because it is not possible to isolate and quantify the cases in which that cost is passed on to the 
consumer.  

Approach to consideration of macroeconomic impacts  

It would not be realistic nor credible to aim at estimating the precise macroeconomic impact of 
different options pertaining to the organisation of the Customs Union. However, it can be noted 
more generally that to the extent an option delivers on the general objective, it will also have a 
positive  impact  on  key  macroeconomic  indicators  such  as  GDP  and  employment.  This  is 
substantiated  in  this  section  which  assesses  qualitatively,  in  light  of  academic  literature,  the 
macroeconomic effects of simplified customs procedures.  

One  of  the  policy  objectives  is  to  simplify  customs  rules  and  processes.  This  objective,  if 
attained,  would  reduce  administrative  costs  of  customs  procedures.  Economic  theory  and 
empirical  research  (Frankel  and  Romer,  1999;  Dollar  and  Kraay,  2003;  Alcalá  and  Ciccone, 
2004)  suggest  that  trade  flows  positively  affect  gross  domestic  product  (GDP).  Thus, 
facilitating  trade  through  better  customs  procedures  may  have  a  positive  effect  on  GDP. 
Engman  (2005,  OECD)  evaluates  the  extent  to  which  customs  procedures’  simplification 
increases  trade  flows.  The  author  shows,  through  case  studies,  that  higher  trade  transaction 
costs reduce foreign direct investments (FDI) because of the costs per se and high risk of doing 
business. Analysing several academic papers and using case studies, the author also concludes 
that higher trade transaction costs reduce trade flows. Hornok and Koren (2015) reach similar 
conclusion using a gravity model. They find that administrative barriers reduce trade volumes.  

Trade  freedom  can  also  be  expected  to  enhance  competition,  which  increases  GDP  through 
innovation and productivity growth. Alcalá and Ciccone (2004) measure that trade flows have 
a positive impact on growth mainly through increased labour productivity. Moreover, Latorre 
et  al.  (2020)  used  a  general-equilibrium  model  to  show  that  new  trade  barriers  arising  from 
Brexit should result in GDP loss for the EU and the UK, with a stronger loss for the latter due 
to  competition  and  productivity  decrease.  The  UCC  reform  aims  at  positively  affecting  both 
imports  and  exports,  which  should  keep  the  EU  trade  balance  unaffected  making  it  unlikely 
that options would result in significant macroeconomic effect through the trade balance. 

Overall, the improvement and simplification of customs procedures increase trade flows, which 
positively  impacts  growth,  mainly  through  increased  FDI  and  enhanced  competition. 
Furthermore,  to  the  extent  that  international  trade  will  be  better  supervised  and  therefore 
customs would be in a better position to detect and stop non-compliant goods, this type of trade 
should decrease and therefore legitimate competition should be further enhanced as well as the 
level playing field between domestic and foreign production. 

Page 50 / 291 

 
 
 
 
Baseline 

The  table  below  summarises  the  estimated  administrative  costs  that  the  Member  States,  the 
Commission and businesses have in the baseline and includes a 15-year projection. These costs 
are the benchmark to assess the options. Magnitudes in the tables for options are expressed as 
additions or deductions with respect to the figures below. 

As regards IT, is estimated that even after 2026, each Member State and the Commission will 
still  incur  per  year  at  least  EUR  15  million  in  developing  new  systems  (one-off)  and  about 
EUR 85 million in maintenance. The accumulated effect in 15 years is presented below in the 
table, with a notable increase per year (lines 1, 2, 5 and 6 in the table).  

As regards staff, in 2021 Member States employed around 82 700 customs officials. Details 
on  the  costs  of  these  officials  were  not  available  for  this  assessment.  Applying  the  Eurostat 
Total Labour Cost referred to above would suggest an annual cost in the region of EUR 3 848 
million (line 3). For details, see Annex 9 – section 3.2.  

As of 2021, the Commission employs between 250 and 270 staff to work on customs  policy 
and  legislation,  to  follow  up  the  Committees,  to  produce  guidance,  to  work  on  IT 
interoperability projects, to maintain databases,  and to ensure a minimum coordination in the 
interpretation  of  customs  legislation,  including  in  the  adoption  of  binding  origin  and  tariff 
classification  decisions.  Other  Commission  services  carry  out  complementary  activities 
relevant  for  the  Customs  Union.  In  particular,  the  European  Anti-Fraud  Office,  OLAF, 
exercises  the  Commission’s  powers  to  carry  out  external  administrative  investigations.  The 
options do not affect those powers, so the costs are not included in the estimates. The relevant 
Commission annual staff cost is approximately EUR 38 million (line 7). See detail in Annex 9 
– section 3.1. 

Page 51 / 291 

Total costs million EURCOSTS Y1Y2Y3Y4Y5Y6Y7Y8Y9Y10Y11Y12Y13Y14Y15Total (15 years)1. Investment in new or updated IT (one-off)2462512562612662722772832882922973033093163224.2382. Cost of maintaining existing IT systems (recurrent)1.7841.8151.8471.8791.9111.9421.9742.0062.0382.0692.1002.1322.1642.1962.22730.0843. Customs Staff (recurrent)3.8483.8483.8483.8483.8483.8483.8483.8483.8483.8483.8483.8483.8483.8483.84857.7214. TOTAL MS costs (1+2+3)5.8785.9145.9515.9886.0256.0626.0996.1366.1746.2086.2466.2836.3216.3596.39792.0435. Investment in new or updated IT (one-off)1414141415151516161516161617172296. Cost of maintaining existing IT systems (recurrent)88909193949698991011021041051071091101.4877. Customs Staff (recurrent)3838383838383838383838383838385648. TOTAL EU costs (5+6+7)1391411431451471491511521541551571591611631652.2819. Cost of compliance with customs formalities (recurrent)27.39727.39727.39727.39727.39727.39727.39727.39727.39727.39727.39727.39727.39727.39727.397410.95510. TOTAL (4+8+9)33.41433.45233.49133.53033.56933.60833.64733.68633.72533.76033.80033.83933.87933.91933.959505.279Expected evolution of costs in a do-nothing scenarioEU services administrative costsBusiness administrative costsMember States administrative costs 
 
 
As regards economic operators, the estimated cost using the method noted above would be in 
the region of EUR 27.2 billion per year in complying with the customs formalities (line 9). In 
2021, that estimated cost of compliance would have represented about 0.59% of the total value 
of imports (EUR 2 500 billion); for export and transit, it would have been 0.24% of total value 
exports (EUR 2 938 billion). See detail in Annex 9, section 3.3. 

6.2 Option 1: A package of simpler processes  

The  table  below  summarises  the  costs  and  the  quantifiable  benefits  of  option  1  (in  essence, 
better and simpler customs processes) over a 15-year period. Overall, the option indicates that, 
while  the  costs  for  Member  States  and  the  Commission  would  increase,  the  operators  would 
reduce their administrative compliance costs. Other benefits materialise in terms of additional 
revenue  being  collected  from  the  removal  of  the  EUR  150  exemption  and  consumers 
benefitting from safer products.  

Member States administrative costs would significantly increase, both for IT and for staff:  

  The  new  processes  require  re-engineering  the  national  customs’  IT  systems.  The  impact 
for  Member  States  is  estimated  to  be  in  the  region  of  an  additional  EUR  6.7  billion  for 
adapting  their  national  IT  environments  (line  1  in  the  table)  in  the  first  9  years  and  an 
additional EUR 9.8 billion in maintaining them along the 15 years (line 2).  

  The Member States would also have to make a one-off investment in training the staff as 
the new processes are different: they are based primarily on automated risk analysis of pre-
arrival information, audits to operators and client compliance management, rather than on 
acceptance  of  declarations  and  clearance.  This  new  way  of  working  would  require  that 
national  customs  staff  increases  by  about  +1%  with  respect  to  the  baseline  because  new 
risk managers, auditors and IT experts would be needed in national administrations. This 
entails an additional cost for Member States, reflected in line 3. Detail in Annex 9, section 
3.2. 

The EU services administrative costs would increase mildly compared to the baseline.  

 

In the first years, the Commission would need to invest EUR about 67 million more than 
in the baseline to connect the national IT environments supporting the new processes (line 
5).  By  contrast,  maintaining  those  connections  is  estimated  to  be  less  costly  than 
maintaining the current UCC trans-European systems and for that reason the maintenance 
costs decrease with respect to the baseline by the end of the analysis period of 15  years, 
yielding a total increase of only EUR 29 million over the entire period (line 6).  

  For  staff,  part  of  the  existing  Commission  FTEs  could  be  redeployed  to  the  analysis  of 
national  data,  to  strengthen  the  Commission’s  role  in  risk  analysis  and  to  make  the  new 
national IT environments interoperable so the cost stays as in the baseline (line 7). 

By  contrast,  the  simpler  processes  would  bring  some  administrative  savings  to  businesses 
(see more detail in Annex 9 section 3.3), as follows (line 9):  

 

 

from year 4, once the Member States have adapted their customs IT environments to allow 
the  platforms  to  directly  report  their  transactions  to  customs,  compliance  cost  for  e-
commerce will lower, as businesses would no longer have several reporting obligations per 
consignment.  The  duties  stemming  from  the  removal  of  the  customs  duty  exemption  for 
goods  up  to  EUR  150  are  considered  as  a  cost  to  economic  operators,  reducing  their 
savings – accordingly, net figures are presented in line 9; 
from  year  10,  all  other  traders  could  gradually  operate  under  the  new  processes  and  see 
their  customs  compliance  cost  lowered  too,  so  the  estimated  gradual  reduction  in  their 
compliance cost with respect to the baseline is also reflected in line 9 from year 10.  

Page 52 / 291 

 
 
From  year 4,  removing the duty exemption for goods valued up to EUR 150 would bring 
additional  customs  duties  of  EUR  12  billion  in  15  years.  25%  of  the  additional  revenues 
accrues to the Member States while 75% of it accrues to the EU budget.  

The  calculation  of  the  revenue  collected  is  based  on  the  projection  of  e-commerce  evolution 
included  in  the  Impact  Assessment  of  the  Commission  proposal  on  the  VAT  in  the  Digital 
Age (104) where the total value of cross-border e-commerce consignments from third countries 
is projected to increase from EUR 14 billion in 2014 to EUR 37 billion in 2029. The average 
customs  duty  rate  considered  in  the  estimation  is  2.92%  according  to  Commission  data 
(Surveillance). Thus, 37 billion per 2.92% yields a collection of approximately EUR 1 billion 
per year, which is applied in all the options from the point in time when the system is in place 
to start the collection.  

The improved information from economic operators under the new processes would also allow 
to prevent the loss of revenues stemming from fraudulent practices such as undervaluation or 
misclassification  of  the  goods  (‘closure  of  customs  gap’).  However,  quantifying  this  amount 
was not possible. 

Consumers 

As explained in section 5.2.1, Option 1 (and all the options analysed) proposes to modify the 
legislation  to  make  the  e-commerce  intermediaries  deemed  importer  of  the  goods  that 
consumers order online from third countries because the intermediaries are in a better position 
to  develop  streamlined  processes  than  the  consumers.  Therefore,  these  options  benefit 
consumers,  who  would  be  relieved  from  a  formal  obligation  and  would  no  longer  face 
unexpected compliance fees from the postal or express operators. 

In  addition,  consumers  indirectly  benefit  from  the  increased  level  of  protection  and/or 
facilitation of legitimate trade (for instance because they avoid fraudulent products and because 
reduced administrative burden on businesses can be expected to be passed on to consumers to a 
certain degree). 

To illustrate the consumers’ savings in this respect, Annex 9 uses a case-study, which analyses 
how  the  different  options  in  the  reform  would  help  enforcing  EU  product  sustainability 
(Ecodesign) and general product safety policies. These policies protect consumers from a range 
of harms and generate consumer savings, for which financial estimates have been prepared in 
other studies as noted in section 5.3 of Annex 9. As a portion of the harm addressed relates to 
products imported from outside the EU, a saving for consumers attributed to better detection of 
non-compliant  imported  products  is  estimated  and  included  in  line  13  of  the  table  as  an 
illustrative scenario. 

Social and environmental impact 

This option should have a positive social and environmental impact, although this is difficult to 
quantify. The additional information that operators provide to customs should place customs in 
a  better  position  to  enforce  legislation  pursuing  social  goals,  such  as  the  legislation  banning 
forced  labour,  or  environmental  goals.  Furthermore,  the  better  enforcement  of  product 

(104)  Commission  Staff  Working  Document  Impact  Assessment  report  Accompanying  the  documents  Proposal  for  a 
COUNCIL  DIRECTIVE  amending  Directive  2006/112/EC  as  regards  VAT  rules  for  the  digital  age  Proposal  for  a 
COUNCIL  REGULATION  amending  Regulation  (EU)  No  904/2010  as  regards  the  VAT  administrative  cooperation 
arrangements  needed  for  the  digital  age  Proposal  for  a  COUNCIL  IMPLEMENTING  REGULATION  amending 
Implementing  Regulation  (EU)  No  282/2011  as  regards  information  requirements  for  certain  VAT  schemes, 
SWD/2022/393 final. 

Page 53 / 291 

 
 
                                                      
requirements  on  imported  goods  might  lead  to  a  relocation  of  production  into  the  Union. 
Finally, the removal of the EUR 150 duty exemption will put an end to the practice of splitting 
orders of a high value into several consignments lower than EUR 150 to profit from the duty 
exemption, with the consequent positive environmental effect on transport emissions. 

However, this option does not meet some of the specific objectives: 

- 

- 

- 

- 

- 

It  falls  short  in  strengthening  EU  customs  risk  management  (*).  The  national  customs 
authorities’  access  to  more  and  better  information  (including  data  from  e-commerce 
platforms) would allow them to better manage risk, supervise the traders’ flows better and 
cooperate more efficiently with other authorities. However, implementation across the EU 
would  continue  to  vary.  This  option  works  better  for  tackling  financial  risks  than  non-
financial risks.  The  reason is  that, under this option, the Commission  receives processing 
rights to Member State data, allowing analysis and identification of possible financial fraud 
trends, and shares the results with the Member States, which could then act, recalculate and 
recover unpaid duties. The Commission analysis would be carried out after the goods have 
entered the Union, not real-time stopping goods before or at the moment of entry. For non-
financial risks, national customs and market surveillance authorities would work together at 
Member State level.  

It reduces the administrative burden and simplifies the procedures  (**) but each Member 
State  would  adapt  its  IT  environment  at  its  own  pace,  with  possibility  that  certain  ‘front 
runner’  Member  States  move  quicker  than  others  leaving  operators  and  consumers  in 
laggard Member States at a disadvantage. 

It does ensure a level playing field between e-commerce and traditional trade (***). 

It  enhances  the access  to  and use of  data  (**) thanks to  the new processes.  The national 
customs authorities get access to more and better information. However, at EU level there 
is  very  limited  improvement  compared  to  the  baseline,  which  means  that  the  potential  of 
the wealth of data will not  be fully exploited.  As regards the protection of personal  data, 
this  option  would  not  differ  substantially  from  the  baseline,  as  the  decentralised 
digitalisation  model  would  bring  the  same  complexities  and  divergences  in  the  national 
implementation of the GDPR. However, the simplification of customs processes could have 
a direct, beneficial impact on the administrative burden necessary for compliance with the 
GDPR, as the number of processes and their complexity will be reduced. 

It  falls  particularly  short  in  enabling  the  Customs  Union  to  act  as  one  (*).  The  common 
prioritisation for risk management and supervision at EU level would provide a joint focus 
for  national  customs  administrations  but  the  operational  implementation  would  remain 
solely at national, meaning divergent approaches could persist. 

Note: In the tables for each Option, row 9 - “savings in compliance costs” - refers to the 
overall  aggregate  “bottom  line”  estimation  for  businesses,  after  the  increase  in  outlay  on 
customs  duty  on  e-commerce  consignments  is  netted  off  against  estimated  ongoing 
administrative savings from the Option. 

Page 54 / 291 

 
 
 
- 

55 

Increase with respect to baseline (million EUR)COSTS (quantitative)Y1Y2Y3Y4Y5Y6Y7Y8Y9Y10Y11Y12Y13Y14Y15Total1. Investment in new or updated IT (one-off)1.1011.0451.0401.0351.030433428422416413-106-112-118-124-1316.7722. Cost of maintaining IT (recurrent)-123954747049291.1471.0409268066815485455425395369.8003. Customs Staff (recurrent)1010101919191919838383838383837034. TOTAL MS costs (1+2+3)1.0991.4501.5241.7581.9771.5981.4861.3671.3061.17752551650749848817.2745. Investment in new or updated IT (one-off)3413131212-1-1-1-2-1-1-2-2-2-3676. Cost of maintaining IT (recurrent)-3102029302718102-6-15-24-24-23-22297. Customs Staff (recurrent)08. TOTAL EU costs (5+6+7)3023324242261790-7-17-26-26-25-25969. Savings in compliance costs-1.171-1.171-1.171-1.171-1.171-1.630-1.661-1.784-1.784-1.784-1.784-1.784-18.06310. TOTAL costs (4+8+9)1.1301.4731.556629849453332205-324-492-1.275-1.294-1.302-1.311-1.320-693BENEFITS (quantitative)Y1Y2Y3Y4Y5Y6Y7Y8Y9Y10Y11Y12Y13Y14Y15Total11. Revenue from removing EUR 1501.0001.0001.0001.0001.0001.0001.0001.0001.0001.0001.0001.00012.000NET COST/ BENEFITS (10-11)1.1301.4731.556-371-151-547-668-795-1.324-1.492-2.275-2.294-2.302-2.311-2.320-12.693Additional examples - illustrative scenarios not taken into account12. Revenue loss prevention  -  cigarettes 62626262626262626262626274413. Consumers' saving - Ecodesign 3223223223223223223223223223223223223.861Member States - administrative costsOPTION 1 - Phase 1 Building reporting tool for platformsOPTION 1 - Phase 2Adapting national IT environments to simpler processes OPTION 1 - Phase 3 Operators applying simpler processes progressivelyReduction of the business administrative costs, even considering the increase in duties from removing EUR 150 thresholdEU services administrative costs 
 
6.3 Option 2: EU Customs Authority for coordination  

The table below summarises part of the estimated costs and benefits of option 2 over a 15-year 
period, showing that it is very similar to option 1 but slightly more expensive.  

The estimation of Member States administrative costs would be almost identical to option 1, 
as in this option Member States adapt their IT/data environment to the new processes and have 
to invest in staff to apply them (lines 1 and 2). While Member States would continue to do real-
time  risk  analysis  in  their  national  IT  environments,  the  Authority  would  support  and 
coordinate the national approaches in the areas of risk management and controls. Therefore, the 
Member  States  would  need  slightly  fewer  national  risk  analysts  and  for  that  reason,  the 
increase in staff costs with respect to the baseline is slightly lower than in option 1 (line 3). 

The estimated EU services administrative costs would increase compared to both the baseline 
and option 1, as follows:  
  The EU services would have to invest in connecting the national IT environment EUR 102 
million  more  than  the  baseline  (line  4)  and  in  maintaining  those  connections  EUR  177 
million more than the baseline (line 5) in a 15-year period. 

  The EU Customs  Authority  would be  progressively  created  between  years 1 and 7, until 
reaching a staff of approximately 176 FTE dealing with mainly coordination activities. In 
15 years, the EU services would spend in staff EUR 141 million more than in the baseline 
(line 6) in 15 years. (Annex 9, section 3.1 for more details) 

Additional customs duties on e-commerce are about EUR12 Billion over 15 years. 

The economic operators’ administrative savings are similar to option 1 and so is the revenue 
collection from removing the EUR 150 exemption. However, a higher (non-quantifiable at this 
stage) closure of the customs gap can be expected thanks to the Authority’s coordinating role. 

Consumers  benefit  from  not  facing  unexpected  compliance  fees  from  the  postal  or  express 
operators when ordering online goods, as in option 1. In addition, consumers indirectly benefit 
from  the  increased  level  of  protection  and/or  facilitate  legitimate  trade.  The  illustrative  case 
study on Ecodesign yields a consumer saving over 15 years of EUR 7,5 billion (line 13). 

This option brings a more positive social and environmental impact than option 1 because 
the EU Customs Authority brings some uniformity in the treatment of non-financial risks in the 
Union, thereby ensuring a more similar level of impact of customs enforcement action.  

Option 2 reaches a number of objectives: 
-  The creation of the authority is a step towards strengthening EU customs risk management 
(**). The support and coordination by the EU Customs Authority would reinforce Member 
States’ risk management and controls would become more effective. 

-  Option  2  reduces  the  administrative  burden  and  simplifies  the  procedures  (**)  and  the 

Authority would ensure more uniformity across Member States.  

-  Option 2 ensures a level playing field between e-commerce and traditional trade (***). 
-  Option 2 enhances the access to and use of data at EU level (***) because the Authority 
would receive national data. This option performs as option 1 for personal data protection. 
-  Option 2 is stronger than option 1 in enabling the Customs Union to act as one (***) due to 
the coordinating role of the authority, even if the lack of direct access to the customs data 
limits its potential. Positive results on the authority’s coordinating tasks could in the future 
also  generate  spill-over  effects  that  lead  to  centralisation  in  other  areas  like  the  data 
management approach. 

56 

 
 
57 

Increase with respect to baseline (million EUR)COSTS (quantitative)Y1Y2Y3Y4Y5Y6Y7Y8Y9Y10Y11Y12Y13Y14Y15Total1. Investment in new or updated IT (one-off)1.1011.0451.0401.0351.030433428422416413-106-112-118-124-1316.7722. Cost of maintaining IT (recurrent)-123954747049291.1471.0409268066815485455425395369.8003. Customs Staff (recurrent)10101074111767676767676765764. TOTAL MS costs (1+2+3)1.0991.4501.5241.7461.9621.5801.4681.3491.2991.17051850950049148117.1475. Investment in new or updated IT (one-off)361515151421111110001026. Cost of maintaining IT (recurrent)-310233436342720136-1-9-7-4-21777. Customs Staff (recurrent)0,71,42,25,87,21313,912,112,112,112,112,112,112,112,11418. TOTAL EU costs (5+6+7)3427405457484233262012468104209. Savings in compliance costs-1.171-1.171-1.171-1.171-1.171-1.630-1.661-1.784-1.784-1.784-1.784-1.784-18.06310. TOTAL costs (4+8+9)1.1331.4781.563630849458339212-306-472-1.254-1.271-1.278-1.285-1.293-496BENEFITS (quantitative)Y1Y2Y3Y4Y5Y6Y7Y8Y9Y10Y11Y12Y13Y14Y15Total11. Revenue from removing EUR 1501.0001.0001.0001.0001.0001.0001.0001.0001.0001.0001.0001.00012.000NET COST/ BENEFITS (10-11)1.1331.4781.563-370-151-542-661-788-1.306-1.472-2.254-2.271-2.278-2.285-2.293-12.496Additional examples - illustrative scenarios not taken into account12. Revenue loss prevention  -  cigarettes 1241241241241241241241241241241241241.48813. Consumers' saving - Ecodesign 5365365365365365365365365365365365366.435Reduction of the business administrative costs, even considering the increase in duties from removing EUR 150 thresholdMember States - administrative costsOPTION 2 - Phase 1 Building reporting tool for platformsOPTION 2 - Phase 2Adapting national IT environments to simpler processes OPTION 2 - Phase 3 Operators applying simpler processes progressivelyEU services - administrative costs 
 
 
6.4 Option 3: A central EU Customs Data Space, managed by the Commission 

The table below summarises part of the costs and benefits of option 3 over a 15-year period.  

The estimated Member States administrative costs would strongly decrease compared to the 
baseline: 
 

in 15 years, the investment in new or updated IT systems would decrease by in the region 
of EUR 1 942 million with respect to the baseline (line 1) 
the  costs  of  maintaining  the  national  customs  IT  environments  over  15  years  would 
decrease,  resulting  in  a  total  of  about  EUR  16  billion  less  than  the  baseline,  even 
considering the costs of phasing-out the existing national and trans-European IT systems 
(line 2) 
the centralised digitalisation would reduce the staff costs for Member States, which see a 
reduction in FTE requirements of about 0.6%, mostly in IT-related roles (line 3).  

 

 

The  EU  Services  administrative  costs  would  be  higher  than  the  baseline,  for  building  and 
operating the EU customs data space. The total cost of building the data space is explained in 
Annex 7, section 5.3. It is based on an estimation of the cost of building the capabilities that the 
Data Space must provide, using as reference the cost of building similar capabilities in some of 
the IT systems that the Commission currently builds and manages. 
  Building the Data Space would require the Commission to invest about EUR 455 million 
in  addition  compared to the baseline in  15  years  (line 5). Most of this investment  would 
occur in the first 7 years. 

  Operating  the  Data  Space  would  require  the  Commission  to  spend  about  EUR  1  923 

million more than in the baseline in 15 years (line 6).  

  The Commission would also spend about EUR 143 million more than in the baseline on IT 

staff to be able to build the Data Space (line 7). 

The  investments  would  allow  economic  operators  to  benefit  from  administrative  savings. 
They would have to incur some one-off adaptation costs to connect to the Data Space but these 
are not expected to be significant. By contrast, having a unique IT environment to be able to 
comply  with  all  customs  formalities  across  the  EU  would  result  in  reduced  administrative 
compliance costs in 15 years with respect to the baseline, as follows (detail in Annex 9, section 
3.3):  

 

the reduction of the customs compliance cost in e-commerce despite the additional duties 
would be achieved a year earlier (reflected in line 9 from year 3) than in options 1 and 2, 
because the Commission needs less time than the 27 Member States to build the part of the 
Data Space used for e-commerce. The additional duties are netted off the savings; 

  from year 6 and progressively until year 9 (again earlier than in options 1 and 2), all other 
traders  could  operate  under  the  new  processes  and  see  their  customs  compliance  cost 
lowered too (gradually reflected in line 9) due to the advantage of operating in a single IT 
environment as opposed to 27. 

Additional  customs  duties  on e-commerce traffic are  estimated in  the region  of €13  Billion 
over 15 years, based on removing the duty exemption for goods valued up to EUR 150  from 
year 3. 

The  improved  information  from  economic  operators  under  the  new  processes  and  the 
centralisation of data in the Data Space would also allow to better prevent the loss of revenues 
stemming  from  fraudulent  practices  such  as  undervaluation  or  misclassification  of  the  goods 
(‘closure of customs gap’). However, quantifying this amount was not possible. 

58 

 
 
Consumers 

Consumers  benefit  from  not  facing  unexpected  compliance  fees  from  the  postal  or  express 
operators when ordering online goods, as in option 1. In addition, consumers indirectly benefit 
from  the  increased  level  of  protection  and/or  facilitate  legitimate  trade.  The  illustrative  case 
study  on  Ecodesign  yields  a  consumer  saving  estimate  over  15  years  of  EUR  7,6  billion, 
reflected in line 13 of the table. 

Social and environmental impact 

This option would bring a more positive social and environmental impact than options 1 and 2 
because  the  Commission  having  direct  access  to  the  customs  data  and  working  with  non-
customs authorities could result in better enforcement of the relevant social and environmental 
legislation.  

Option 3 could deliver to an extent on all the objectives. However, the governance structure 
does not involve the national customs administrations sufficiently and there is no coordination 
of Member States activities. This could lead to greater distance between the customs officer on 
the ground and the decision-making at the centre. 

-  Having the Commission building and operating the EU Customs Data Space significantly 
contributes  to  strengthening  EU  customs  risk  management  (***).  This  would  enable  the 
Commission  to  drive  joint  analytics  projects  involving  customs  and  other  authorities.  It 
would elaborate common risk criteria and operational risk indicators for direct application 
on  the  EU  data  flows  and  would  work  closely  with  the  Member  States  on  this.  The 
Commission  would  arrange  for  risk  information  from  other  authorities  to  be  integrated 
directly in  EU-wide strategic and operational  risk analysis.  These factors  would lead to  a 
significant  improvement  in  the  quality  of  risk  analysis.  The  combination  of  the  EU 
visibility with the having a single liable person for customs purposes would strengthen the 
ability  of  customs  and  market  surveillance  authorities  to  cooperate  to  act  on  the  supply 
chain and not only on individual consignments. 

-  Option  3  significantly  reduces  the  administrative  burden  and  simplifies  the  procedures 
(***). In addition, it allows a central implementation of the AEO trust and check approach, 
thanks to the Data Space. 

-  Option  3  also  ensures  a  level  playing  field  between  e-commerce  and  traditional  trade 
(****)  to  a  better  extent  than  Options  1  and  2  and  achieves  it  more  cheaply  and  quickly 
because the reporting tool for platforms is not built 27 times. 

-  Option 3 strongly enhances the access to and use of data at EU level (****). However, the 
significant investment in the Data Space may be under-exploited if the Member States are 
not involved in the use of the data wealth for the day-to-day customs operations. The Data 
Space  would  integrate  personal  data  protection  tools  and  controls,  enabling  each  data 
controller  to  ensure  data  protection  rights.  This  will  have  a  positive  impact  also  for  data 
subjects  that  would  be  able  to  exercise  their  rights  in  a  very  similar  manner  across  all 
Member States. 

-  Option 3 is stronger than option 1 in enabling the Customs Union to act as one (**) due to 
the reinforced role of the Commission but the Member States can perceive it as a top-down 
approach  in  which  their  involvement  is  very  limited  and  there  is  no  coordination  of 
Member States’ activities.  

Page 59 / 291 

 
 
60 

Increase with respect to baseline (million EUR)COSTS (quantitative)Y1Y2Y3Y4Y5Y6Y7Y8Y9Y10Y11Y12Y13Y14Y15Total1. Investment in new or updated IT (one-off)-118-123-1-6-11-144-149-155-161-164-170-176-182-188-194-1.9422. Cost of maintaining IT (recurrent)-12-169-294-445-607-774-948-1.147-1.353-1.568-1.786-1.803-1.819-1.832-1.845-16.4023. Customs Staff (recurrent)-8-24-41-41-41-22-22-22-22-22-22-22-3094. TOTAL MS costs (1+2+3)-130-292-295-459-642-959-1.138-1.343-1.535-1.754-1.978-2.001-2.023-2.042-2.061-18.6535. Investment in new or updated IT (one-off)2739908989607777776664556. Cost of maintaining IT (recurrent)2239791441631631411301321371521581551551521.9237. Customs Staff (recurrent)0369131313131313131313131438. TOTAL EU costs (5+6+7)49781722392612361611501511571721771741731702.5229. Savings in compliance costs-1.171-1.171-1.171-1.339-1.506-1.972-2.140-2.140-2.140-2.140-2.140-2.140-2.140-23.30610. TOTAL costs (4+8+9)-81-214-1.294-1.390-1.552-2.061-2.484-3.165-3.524-3.737-3.945-3.963-3.989-4.008-4.030-39.437BENEFITS (quantitative)Y1Y2Y3Y4Y5Y6Y7Y8Y9Y10Y11Y12Y13Y14Y15Total11. Revenue from removing EUR 15001.0001.0001.0001.0001.0001.0001.0001.0001.0001.0001.0001.0001.00013.000NET COST/ BENEFITS (10-11)-81-214-2.294-2.390-2.552-3.061-3.484-4.165-4.524-4.737-4.945-4.963-4.989-5.008-5.030-52.437Additional examples - illustrative scenarios not taken into account12. Revenue loss prevention  -  cigarettes 1241241241241241241241241241241241241.48813. Consumers' saving - Ecodesign 545365365365365365365365365365365365366.489Reduction of the business administrative costs, even considering the increase in duties from removing EUR 150 thresholdOPTION 3 - Phase 1Build seed of data space for e-commerceOPTION 3 - Phase 2 Build data spaceOPTION 3 - Phase 3Operators progressively operating in data space - phase out of national IT systemsMember States - administrative costsEU services - administrative costs 
 
  
6.5 Option 4: EU Customs  Authority for  coordination and operations, managing an EU 
Customs Data Space 

The table below summarises part of the costs and benefits of option 4 over a 15-year period.  

The estimated Member States’ administrative costs would strongly decrease with respect to 
the baseline, even to a higher extent than in option 3:  
 

In  15  years,  the  Member  States  investment  in  new  IT  would  decrease  by  EUR  3  090 
million compared to the baseline (line 1). 
In  15  years,  the  recurrent  cost  in  maintaining  the  national  customs  IT  environments 
decreases even more, EUR 18 billion less than the baseline (line 2). The higher saving than 
in  option  3  is  because  the  involvement  of  the  Member  States  allows  a  more  ambitious 
centralisation so there would be less residual Member States IT activity. 

 

  The economies  of scale  in  centralised digitalisation would  also  impact  the staff costs for 
Member  States.  They  would  see  a  reduction  in  FTE  required  of  about  2.4%,  mostly  in 
relation  to  the  IT-related  and  risk  management  roles,  where  the  EU  Customs  Authority 
would also play an operational role (line 3).  

The  savings  for  the  Member  States  derive  from  the  additional  EU  Services  administrative 
costs, as follows: 
  Over 15 years, the EU services would invest additional EUR 559 million compared to the 
baseline  in  building  the  Data  Space.  This  cost  is  unevenly  distributed  along  the  period: 
higher one-off investments are required in the first 7 years to build the Data Space (line 5). 
This cost is higher than in option 3 because the Commission’s customs systems have to be 
disentangled from the tax systems and transferred to the Authority. 

  Maintaining the Data Space requires an additional EUR 2 billion in the 15 years (line 6). It 

is more expensive than in option 3 because of the higher level of centralisation. 

  During  the  15-year  period,  the  EU  services  must  also  provide  an  additional  EUR  229 
million  for  the  Authority,  which  is  progressively  formed  over  a  period  of  8  years  and 
stabilises in year 9 with a total estimated staff of about 250 FTE performing IT, data and 
risk  management  tasks,  apart  from  the  training,  cooperation  and  some  operational 
activities (line 7).  

These investments would allow economic operators to benefit from administrative savings. 
They would incur some one-off adaptation costs to connect to the Data Space but these are not 
expected to be significant. By contrast, having a unique IT environment to be able to comply 
with  all  customs  formalities  across  the  EU  will  result  in  reduced  customs  administrative 
compliance costs estimated in 15 years with respect to the baseline, as follows:  

 

 

the customs compliance cost in e-commerce will lower as in option 3, even if the additional 
duties decrease the savings (line 9); 
from year 6 and progressively until year 9 (again earlier than in options 1 and 2 as reflected 
in line 9), all other traders could gradually operate under the new processes and gradually 
see their customs compliance cost lowered too. The savings are higher than in other options 
due  to  the  advantage  of  operating  in  a  single  IT  environment  as  opposed  to  27  and  to 
having a central operational authority in close link with the national customs on the ground, 
ensuring consistent treatment to operators across the EU. 

Additional  customs  duties  on e-commerce traffic are  estimated in  the region  of €13  Billion 
over  15  years,  as  in  option  3.  The  improved  information  from  economic  operators  under  the 
new  processes,  the  centralisation  of  data  in  the  Data  Space  and  the  operational  role  of  the 
Authority would also allow a significant prevention of lost revenues stemming from fraudulent 

61 

 
 
practices such as undervaluation or misclassification of the goods (‘closure of customs gap’). 
However, quantifying this amount was not possible. 

Consumers 

Consumers  benefit  from  not  facing  unexpected  compliance  fees  from  the  postal  or  express 
operators when ordering online goods, as in option 1. 

In  addition,  consumers  indirectly  benefit  from  the  increased  level  of  protection  and/or 
facilitation  of  legitimate  trade  thanks  to  the  centralised  data  and  operational  capacity  in  the 
Authority.  The  illustrative  case  study  on  Ecodesign  would  yield  a  consumer  saving  over  15 
years of EUR 18 billion, reflected in line 13 of the table. 

Social and environmental impact 

This option brings a more positive social and environmental impact than option 3 because the 
direct  access  to  the  customs  data  and  the  better  cooperation  at  EU  level  between  the  EU 
Customs Authority  and  other non-customs authorities  should allow customs  to  enforce better 
the pieces of legislation that pursue social and environmental goals. 

 Option 4 successfully reaches all the objectives: 

-  Having  the  authority  building  and  operating  the  EU  Customs  Data  Space  and  playing  an 
essential role in operational, real-time risk management in cooperation with Member States 
will significantly strengthen EU customs risk management (****).  

-  Option 4 significantly reduces operator’s administrative burden (****) because it allows a 
central  implementation  of  the  trust  and  check  approach  for  AEOs  in  the  EU  and  has  the 
critical  mass  to  coordinate  Member  States  activities  to  ensure  uniform  approaches  at 
national level. The envisaged EU Customs Authority would not bring additional ‘red tape’ 
for  trade  as  it  would  operate  in  the  background  and  not  have  direct  interaction  with  the 
traders. Traders would continue to deal with the national customs authorities and for some 
purposes,  the  trader  could  deal  with  only  one  national  customs  authority  for  all  its  EU 
operations.  

-  Option  4  also  ensures  a  level  playing  field  between  e-commerce  and  traditional  trade 
(****)  and  achieves  it  cheaper  and  in  a  shorter  period  because  the  reporting  tool  for 
platforms is not built 27 times. The analysis and use of that information is also done by the 
Authority. 

-  Option  4  definitively  enhances  the  access  and  use  of  data  at  EU  level  (****).  The 
significant  investment  in  the  Data  Space  can  be  fully  exploited  because  the  EU  Customs 
Authority, the Commission and the Member States could work with the wealth of data in 
real-time  for  the  day-to-day  customs  operations.  The  same  personal  data  protection 
considerations as in option 3 apply. 

-  Option 4 is also much stronger than options 1 to 3 in enabling the Customs Union to act as 
one (****), as it not only would have the central management of the EU Customs dataspace 
and  allow  real-time  EU  data  analytics  and  risk  management,  it  would  also  coordinate 
Member States activities in many other areas. 

Page 62 / 291 

 
 
63 

Increase with respect to baseline (million EUR)COSTS (quantitative)Y1Y2Y3Y4Y5Y6Y7Y8Y9Y10Y11Y12Y13Y14Y15Total1. Investment in new or updated IT (one-off)-182-187-128-133-139-208-213-219-224-228-234-240-246-252-258-3.0902. Cost of maintaining IT (recurrent)-12-179-333-503-683-870-1.063-1.272-1.487-1.711-1.939-1.965-1.992-2.014-2.036-18.0563. Customs Staff (recurrent)-29-57-86-86-86-94-94-94-94-94-94-94-1.0024. TOTAL MS costs (1+2+3)-194-366-461-665-879-1.163-1.362-1.576-1.805-2.033-2.267-2.299-2.331-2.360-2.388-22.1495. Investment in new or updated IT (one-off)3146102115115629889881413135596. Cost of maintaining IT (recurrent)2241831501701721501391411461631701691671662.0487. Customs Staff (recurrent)11269131620232323232323232308. TOTAL EU costs (5+6+7)54881872702932461741681721781942012062032022.8379. Savings in compliance costs-1.171-1.171-1.171-1.436-1.701-2.323-2.589-2.589-2.589-2.589-2.589-2.589-2.589-27.09410. TOTAL costs (4+8+9)-140-278-1.444-1.565-1.756-2.353-2.889-3.732-4.222-4.444-4.661-4.686-4.714-4.745-4.775-46.406BENEFITS (quantitative)Y1Y2Y3Y4Y5Y6Y7Y8Y9Y10Y11Y12Y13Y14Y15Total11. Revenue from removing EUR 1501.0001.0001.0001.0001.0001.0001.0001.0001.0001.0001.0001.0001.00013.000NET COST/ BENEFITS (10-11)-140-278-2.444-2.565-2.756-3.353-3.889-4.732-5.222-5.444-5.661-5.686-5.714-5.745-5.775-59.406Additional examples - illustrative scenarios not taken into account12. Revenue loss prevention  -  cigarettes 248248248248248248248248248248248248297613. Consumers' saving - Ecodesign 1.2871.2871.2871.2871.2871.2871.2871.2871.2871.2871.2871.28715.444Reduction of the business administrative costs, even considering the increase in duties from removing EUR 150 thresholdOPTION 4 - Phase 1Build seed of data OPTION 4 - Phase 2 Build data spaceOPTION 4 - Phase 3Operators progressively operating in data space - phase out of national IT systemsMember States - administrative costsEU services - administrative costs 
 
 
 
6.6 Governance view 

The impact of governance structures (in terms of costs and benefits) is not assessed separately 
because  a  reform  of  the  governance  alone  would  not  sufficiently  address  the  reform 
objectives. Viable reform options need to integrate governance elements with measures linked 
to the other key policy choices, mainly customs processes and data management. 

The  table  below  nevertheless  summarizes  the  estimated  impact  of  the  different  options  by 
2034  on  the  staff  required  by  the  three  governance  actors  -  the  Commission,  the  national 
customs administrations, and the EU Customs Authority (where relevant) – for performing the 
tasks  assigned  to  them.  The  year  2034  is  chosen  because  this  is  the  year  at  which  the 
Authority  would  reach  cruising  speed  and  the  estimated  impact  on  staffing  levels  would  be 
stabilised. 

COM 

Authority 

Baseline 

Option 1 

Option 2 

Option 3 

Option 4 

250-270 

250-270 

168 

347 

170 

146-176 

225-250 

Member 
States 

82 699 

84 459 

84 318 

82 232 

80 706 

In Option  1, improvements  would be done with  the current  governance,  however the actors 
involved  would  remain  the  same  as  in  the  baseline:  the  Commission  and  national  customs 
administrations.  Due  to  the  need  to  implement  the  revised  data  management  approach  and 
customs  processes  at  national  level,  more  resources  would  be  needed  than  in  the  baseline 
scenario. 

The potential for reducing staff at national level in option 4 is due to the economies of scale 
that  would  come  with  introducing  an  EU  Customs  authority  that  can  pool  resources  and 
coordinate  operational  cooperation  between  national  customs  authorities  and,  in  addition 
manage  the  EU  customs  data  space  and  perform  real-time  risk  analysis  at  EU  level  to 
streamline  and  complement  national  risk  management  approaches.  It  does  not  imply  or 
require that Member States would decide to reduce customs numbers accordingly, it shows it 
could help them function more resource-efficiently and effectively. The Authority would have 
the staff needed to perform the tasks assigned to it according to the description of the option. 
A  similar  shift  in  staff  needs  would  happen  in  the  Commission,  as  the  Agency  would  take 
over and expand some Commission tasks. 

Option  2  also  introduced  an  EU  Customs  Authority.  However,  as  the  revised  customs 
processes and data management approaches mainly need to be implemented at national level, 
more staff is needed at national level. The Authority’s tasks would be more limited in scope, 
focusing  on  supporting  and  coordinating  activities  for  risk  management  (no  real-time  risk 
analysis) and operational cooperation. 

In  Option  3,  an  EU  Customs  Data  Space  would  be  developed  and  operated  by  the 
Commission,  which  would  also  assume  some  risk  management  activities.  This  requires 

64 

 
 
 
 
 
 
 
increasing  the  Commission  staff  assigned  to  risk  management-related  activities  in  the 
baseline. The Commission staff for IT must also increase, to manage the budget to build the 
Data  Space  and  to  develop  the  data  projects.  The  investment  at  the  Commission  should 
however  have  the  opposite  effect  on  the  Member  States,  which  should  see  their  IT 
administration staff requirement decreasing. 

6.7 Impact on Small and Medium-Sized Enterprises 

The  reform  is  not  expected  to  generate  any  adverse  effects  on  SMEs  (further  details  are 
presented in Annex 3). The key elements of the reform are in line with SMEs’ expectations 
and  priorities,  as  respondents  from  this  category  have  predominantly  stated  that  their  needs 
are  (i)  more  similar  application  of  the  rules  by  national  customs  authorities,  (ii)  simpler 
customs  processes  and  (iii)  more  effective  data  sharing  among  authorities.  The  most 
significant change with impact on SMEs will be the reform of customs procedures, which will 
bring benefits in the form of simplification for economic operators who opt for the Trust and 
Check scheme.  

It is expected that current AEO can qualify for this model to benefit from simpler procedures. 
They may have a transition advantage as they already comply with strict requirements. In that 
respect, it is worth noting that 60 to 70% of current AEO are micro, small or medium sized 
companies and that on average 75% of international trade is handled through AEOs. 

For non-AEO who would not opt for Trust and Check, the reform of the customs  processes 
should  not  result  in  a  disadvantage.  In  the  worst-case  scenario,  their  operations  would  be 
similar to the baseline and in the best-case scenario they could get more efficient assistance by 
intermediaries, because the simpler processes make the customs agents’ services easier. 

EU SMEs producing in the Union also have an interest in a well-performing and improving 
Customs  Union  to  help  tackle  the  unfair  competition  represented  by  goods  not  complying 
with EU rules and standards being imported to the EU market (see for example the Toy Safety 
case  in  Annex  9,  in  an  industry  where  an  estimated  99%  of  the  EU’s  toy  companies  were 
SMEs as of 2020, employing about 2/3 of the sector, and facing persistent unfair competition 
from non-compliant toy imports). 

65 

 
 
 
 
 
 
 
 
 
 
 
7. HOW DO THE OPTIONS COMPARE? 

Efficiency 

The table shows the costs per analyzed option.  

Cost of the Customs Union per option in 15 years 

Baseline 

Option 1 – A package of simpler processes 

MS (line 
4) 

92.043 

17.274 

Costs 

EU 
services 
(line 8) 

Business  
(line 9) 

Total 

Relative 
change 

2.281 

410.955 

505.279 

96 

-18.063 

504.585 

-0,1% 

-0,1% 

-7,8% 

-9,2% 

Option 2 – EU Customs Authority for coordination 

17.147 

420 

-18.063 

504.783 

Option 3 – A Commission EU customs data space 

-18.653 

2.522 

-23.306 

465.842 

Option 4 - EU Customs Authority data space 

-22.149 

2.837 

-27.094 

458.873 

The  baseline  costs  estimate  how  much  Member  States,  EU  services  and  businesses  would 
spend in implementing the current processes, digitalization model and governance in the next 
15 years in a do-nothing scenario. Options 1 and 2 require both the Member States and the EU 
services to spend more. It shows that the package of simplifications in option 1 reduces the 
burden for economic operators and levels the playing field for international trade but it comes 
with a very high cost, particularly for the Member States, which must adapt their national IT 
environments. Option 2, by introducing the EU Customs Authority to coordinate the Member 
States’ action, comes with a higher overall cost than option 1; the EU budget would absorb 
the Authority cost.  The investment  at  the centre  however  results in  a better performance on 
the reform objectives (below).  

By  contrast,  options  3  and  4  are  efficient.  The  increased  expenditure  by  the  EU  services 
results in very significant estimated savings for the Member States and business, particularly 
in  option  4,  which  results  in  a  total  decrease  of  costs  of  9%.  This  is  mainly  because,  by 
centralising  the  data  management  through  the  creation  of  the  Data  Space  show  important 
economies of scale.  

As to the benefits, all options increase to a higher or lesser extent the revenue collected, the 
protection  of  the  EU  businesses,  values  and  standards  and  reduce  administrative  burden  for 
businesses but option 4 is the option bringing the highest benefits. 

Quantifiable benefits per                                                   

Collection 
(lines 9) 

Protection 
(revenue - 
cigarettes scenario 
- line 12) 

Benefits 

Protection - 
ecodesign scenario - 
consumer saving - 
line 13) 

Simplification 
(savings line 
9) 

Total 

option in 15 years 

Option 1 - A package of 
simpler processes 

Option 2 - EU Customs 
Authority for coordination 

Option 3 - A Commission EU 
customs data space 

Option 4 - EU Customs 
Authority data space 

12.000 

744 

3.861 

18.063 

34.688 

12.000 

1.488 

6.435 

18.063 

37.986 

13.000 

1.488 

6.489 

23.306 

44.283 

13.000 

2.976 

15.444 

27.094 

58.514 

66 

 
 
  
 
 
Effectiveness 

Section 6 has shown that while all options achieve the objectives to a certain extent, Option 1 
falls  short  on  building  a  risk  management  at  EU  level,  on  the  use  of  data  and  on  customs 
authorities acting as one. Option 2 reached better those objectives, particularly acting as one, 
but still not as effectively as options 3 and 4. Both options 3 and 4 are effective but integrating 
the Member States in the operational risk management at EU level through the EU Customs 
Authority  brings  better  results.  Yet,  the  analysis  shows  that  option  3,  while  being  effective 
and  reaching  all  the  objectives,  relies  on  the  Commission,  which  cannot  fully  exploit  the 
capabilities of the Data Space because Member States are not directly involved in running it, 
while they conduct the controls and the operations on the ground.  

By  contrast,  option  4  fully  taps  into  the  potential  of  the  Data  Space  by  introducing  a  new 
governance actor that brings together the work of the Commission and the Member States, the 
EU Customs Authority. Option 4 is therefore the most efficient and the most effective option. 

Effectiveness 
Overall (General Objective) 
SO 1 – Strengthen EU customs risk management  
SO 2 – Reduce burden and simplify procedures 
SO 3 – Level playing field - e-commerce  
SO 4 – Data access/use for strategic customs  
            action 

SO 5 – Enable the Customs Union to act as one 

Option 1  Option 2  Option 3 
*** 
** 
*** 
** 
*** 
** 
**** 
*** 

* 
* 
** 
*** 

Option 4 
**** 
**** 
**** 
**** 

** 

* 

*** 

*** 

**** 

***** 

** 

**** 

Coherence 

A  practical  examination  of  how  each  option  would  perform  in  connection  with  major  EU 
policies  connected  with  trade  in  goods,  and  in  particular  those  with  Single  Market, 
sustainability,  or  security  dimensions,  was  carried  out  through  the  use  cases  included  in 
Annex 9 (sections 4-6). As all options promote structured co-operation between customs and 
sectoral policies in order to improve their outcomes from customs action at the border, and all 
options align customs and VAT rules, all options are coherent as such.  

Where the options differ is in their strategic capability to enable the customs union to support 
delivery of the Union’s acquis to the broadest extent possible at the external border. Option 1 
would bring additional attention to a small number of priorities but does not create any new 
operational co-operation capabilities compared with the baseline and does not provide a basis 
for  systematic  co-operation.  In  Option  2,  the  co-operation  framework  with  certain  policies 
would benefit  from  the  mandate and co-ordination of the  EU Customs Authority but would 
still lack the tools to align customs and sectoral efforts consistently across the external border. 
Option 3 provides a better basis for co-operation, including EU visibility – the Data Space is a 
major  new  capability,  but  its  common  policy  exploitation  would  be  limited  by  governance 
constraints in practice (the Commission would not have the relevant operational mandate or 
capacity).  In  Option  4,  the  EU  Customs  Authority  would  be  able  to  use  the  Data  Space  to 
organise and drive a much more systematic co-operation with a much wider range of sectoral 
policies. This Option brings a step change in which the Customs Union can be positioned and 
managed as a strategic capability of the Union with the critical mass and EU-wide operational 
view and toolset to support many related policy priorities at once and translate joint strategies 
into consistent action. Option 4 provides the highest level of coherence. 

67 

 
 
 
 
 
 
 
Proportionality 

The  reform  addresses  problems  which  Member  States  cannot  solve  on  their  own.  Action  at 
Union  level  is  essential  to  reform  Customs  Union  processes,  data  management  and 
governance  to  address  the  problems  identified.  The  choice  of  instrument  (Regulation)  is 
essential  because  the  Customs  Union  must  provide  legal  certainty  for  trade  and  public 
authorities,  to  ensure  the  smooth  flow  of  legitimate  trade  and  at  the  same  time  provide  for 
effective, risk-based intervention by public authorities to implement major elements of the EU 
acquis, notably in the areas of the Single Market, security and own resources.  

No option goes further than is necessary to achieve the objectives. Option 1 places a higher 
burden on national administrations to develop and deploy simplified processes but lacks the 
governance  framework  and  data  management  elements  which  are  important  in  enabling 
effective  uniform  implementation.  Option  2  addresses  the  governance  framework  but  is 
constrained by the legacy information environment. Option 3 brings the relevant information 
environment but lacks the governance structure needed to get the full return on investment in 
terms of policy delivery. Option 4 provides most balanced set of measures, combining reform 
of customs processes with a common data management environment and an EU governance 
layer.  These  elements  are  mutually  reinforcing,  which  enables  Option  4  to  provide  also  the 
largest reduction of burden on both public authorities and private sector operators. All options 
support  continued  national  decision-making,  with  Option  4  providing  the  highest  quality 
support from EU measures.  

Relevant findings from public consultation 
In the public consultation, the participating stakeholders considered the impact of the policy 
measures  proposed  in  the  questionnaire  as  overwhelmingly  positive:  Providing  for  a  single 
EU  customs  information  environment,  building  partnership  with  reliable  and  trusted  traders 
that  can  use  commercial  information,  better  cooperation  of  customs  and  non-customs 
authorities and reforming the EU customs governance were all considered highly positive for 
their  organisation  by  55-60%  of  the  respondents  (122,  118  and  111  out  of  194  replies 
respectively) and as positive by additional 20% (43, 41, 47 respectively). No more than 10% 
of respondents (between 3 and 14 replies) considered any of the measures as limited or high 
negative for their organisation. (Annex 2) 

The table below summarises how the options compare relative to the baseline scenario, using 
the score assigned in the analysis of the impacts. 

68 

 
 
 
 
 
 
 
Million EUR – change compared to baseline 

Option 1 

Option 2 

Option 3 

Option 4 

QUANTITATIVE COSTS/BENEFITS (€M/15yrs) 
EU Services – direct implementation administrative costs 

Information Technology                         
5. One-off 
6. Recurrent 
Other costs (staff) 
7. Recurrent 
Member States – direct implementation administrative costs 

67 
29 

baseline 

102 
177 

141 

455 
1 923 

559 
2 048 

143 

230 

Information Technology              
1. One-off 

2. Recurrent 
Other costs (staff) 
3.Recurrent 
Business/Trade      

9. Recurrent (net of additional e-commerce duty 
costs) 
Revenue collection      

6 772 

9 800 

6 772 

9 800 

-1 942 

-3 090 

-16 402 

-18 056 

703 

576 

- 309 

- 1002 

-18 063 

-18 063 

- 23 306 

-27 094 

11. Revenue collection removing EUR 150 exemption 

12 000 

12 000 

13 000 

NET BENEFITS 

12 693 

12 496 

52 437 

Additional benefits scenarios - illustrative (not taken into account): 

12. Cigarettes (revenue loss prevention scenario) 
13. Ecodesign example - consumer saving  
QUALITATIVE BENEFITS 
Effectiveness 
Overall (General Objective) 
SO 1 – Strengthen EU customs risk management  
SO 2 – Reduce burden and simplify procedures 
SO 3 – Level playing field - e-commerce  
SO 4 – Data access/use for strategic customs action 
SO 5 – Enable the Customs Union to act as one 
Protection outcomes (case studies) 
      Single Market and Sustainability 
      Security 
      Revenue  
Efficiency 
Overall efficiency 
Proportionality 
Overall proportionality  
Coherence  
Overall policy coherence 
Strategic capability 

744 
3 861 

1 488 
6 435 

1 488 
6 489 

** 
** 

** 
*** 
*** 
*** 

** 
** 
** 

** 

** 

** 
** 

*** 
*** 

*** 
**** 
**** 
** 

** 
** 
*** 

** 

*** 

*** 
*** 

* 
* 

** 
*** 
** 
* 

* 
* 
* 

* 

** 

* 
* 

69 

13 000 

59 406 

2 976 
15 444 

**** 
**** 

**** 
**** 
***** 
**** 

**** 
**** 
**** 

**** 

**** 

***** 
***** 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
8. PREFERRED OPTION 

8.1 Option 4  

Option 4 is the preferred option: a reform of the customs processes, implemented in a central 
EU  Customs  Data  Space  that  is  managed  by  a  new  EU  Customs  Authority.  The  three 
components  reinforce  each  other  to  deliver  better  results,  and  lead  to  synergies  across  the 
Customs Union. The impact assessment and comparison in chapter 7 conclude that this option 
is  most  efficient.  The  investment  in  central  structures  significantly  reduces  the  cost  for 
Member States and businesses. It also concludes that it is most effective option to achieve the 
specific objectives: 

1.  The  supervision  capacity  of  customs  is  strengthened.  The  revised  processes  give  a 
better visibility on the supply chain of goods in and out the EU. The EU Customs Data 
Space  enables  real-time  EU  risk  management  on  financial  and  in  particular  non-
financial risks, where the cooperation with specialised authorities can take place. The 
EU Customs Authority brings the critical mass to work with the Data Space to its full 
potential. It ensures the customs authorities act as one and on common priorities and 
facilitates cooperation with other authorities at EU level.  

2.  The  administrative  burden  for  legitimate  trade  is  significantly  reduced.  The  revised 
processes are simple and flexible. The information is collected from the right source. 
The  EU  Customs  Data  Space  delivers  this  in  a  single  system  for  trade.  One  system, 
instead of the projected 111 in the dynamic baseline, is a cost saving for trade and key 
demand for the reform. The EU Customs Authority delivers on the request for better 
coordination  between  national  customs  administrations  and  with  other  competent 
authorities. 

3.  E-commerce  playing  field  is  levelled  with  traditional  trade.  The  rules  no  longer 
mismatch  the  VAT  provisions.  The  revised  processes  allow  e-commerce  actors  to 
provide their information in a simple and adequate manner. The option for simplified 
classification  and  valuation  in  buckets  makes  the  duty  calculation  more  accessible. 
The  EU  Customs  Data  Space  facilitates  the  interaction  between  e-commerce  actors 
and customs, at EU level. The Authority ensures the uniform implementation and can 
address weak spots of the Customs Union.  

4.  The  access  and  use  of  data  for  strategic  customs  action  is  improved.  The  revised 
processes  allow  operators  to  provide  better  data  quality  and  more  supply-chain 
information.  Thanks  to  the  EU  Customs  Data  Space,  the  customs  data  is  not 
fragmented across different national systems. It is designed and built around the data 
analytics  capacity.  It  allows  other  partners  to  contribute  and  cross-check  their  data, 
facilitated at EU level by the EU Customs Authority.  

5.  The Customs Union acts as one. The revised processes are delivered in a central EU 
Customs  Data  Space,  and  by  a  central  actor  in  the  EU  Customs  Authority.  This 
facilitates the uniform implementation in all Member States and addresses the problem 
of divergent application. The Authority has access to real-time information in the Data 
Space  and  can  operationally  manage  the  Customs  Union  together  with  the  Member 
States. 

The  risks  and  challenges  are  diverse  across  the  Customs  Union  and  different  land,  air  or 
maritime borders. Importantly the centralisation in option 4 is not a ‘one size fits all approach’ 
but strengthens the capacity of customs across the EU with common tools. The EU Customs 

70 

 
 
Data Space allows for EU and national risk management, for cooperation at EU and national 
level.  It  can  take  additional  information  into  account  (digital  product  passports,  certificates, 
etc.) to check compliance with new and future requirements.  

The option addresses the challenges identified by the wise persons group and is future proof, 
in line with the foresight report.  

The  capacity  to  act  together  as  a  Customs  Union  strengthens  the  strategic  autonomy  and 
resilience of the EU. The EU Customs Authority brings together the EU  and Member State 
level.  The  political  prioritisation  in  the  Council  allows  customs  to  act  as  one,  on  the  same 
objectives. 

Overall,  this  option  puts  customs  in  a  better  position  to  fulfil  its  mandate  and  to  cooperate 
with  partners  across  the  relevant  policy  areas  to  protect  the  Single  Market:  security,  health, 
environment, climate, etc. It strengthens the revenue collection and capacity to fight EU wide 
fraud patterns. 

Risks 

The  implementation  of  the  central  components  in  the  EU  Customs  Data  Space  and  the  EU 
Customs Authority require investment from the EU budget. Resources to initiate the work in 
phase  one  should  be  available  right  after  the  co-legislators  adopt  the  Commission  proposal. 
As soon as the first phase is completed and the duties from removing the EUR 150 exemption 
accrue  to  the  EU  budget,  the  Data  Space  for  the  other  operators  would  be  built.  The  full 
financial  benefits,  with  better  revenue  collection  and  reduced  collection  costs  for  Member 
States  will  be  fully  perceived  after  9  years.  The  anticipated  implementation  is  split  in  three 
phases: 

-  Phase 1 (Y1-2) – the Commission builds the seed of a Data Space for e-commerce and 

undertakes some preparatory activities to form the EU Customs Authority. 

-  Phase  2  (Y3-5)  –  E-commerce  intermediaries  start  reporting  and  the  EU  Customs 
Authority takes over the building and management of the Customs Data Space for the 
rest of operators.  

-  Phase  3  (Y6-9)  –  traders  progressively  operate  in  the  Data  Space  and  national  IT 

systems progressively phase out. The Authority is fully functional. 

-  From Y10 – all traders operate in the Data Space. The Authority is fully functional. 

As of 2028, the Data Space and the EU Customs Authority would need to be funded under the 
next  MFF,  as  well  as  the  maintenance  and  operations  of  the  current  IT  system.  The  risk  of 
insufficient  funding  allocated  under  the  next  MFF  would  delay  the  implementation  of  the 
reform,  including  the  improved  revenue  collection  and  e-commerce  revenue,  as  well  as  the 
significant  cost  savings  for  Member  States.  The  mitigation  measure  to  use  the  customs 
programme funding the operation and maintenance of the current IT system to build the Data 
Space,  comes  with  performance  risks.  There  is  no  mitigation  measure  for  funding  the  EU 
Customs Authority.  

The recent political agreement in negotiations between the European Parliament, Council and 
Commission  on  a  Carbon  Border  Adjustment  Mechanism  (CBAM)  opens  up  possible 
synergies with an EU Customs Authority. 

71 

 
 
8.2 REFIT (simplification and improved efficiency) 

The  preferred  option  significantly  simplifies  customs  processes  via  a  better  interaction 
between customs and economic operators  focused on operators and supply chains instead of 
the  multiple  formalities  needed  to  carry  out  the  individual  transactions  as  they  are  foreseen 
today.  Both  platforms  and  traditional  traders  offering  customs  visibility  over  their  supply 
chains  will  enjoy  simpler  and  faster  procedures,  by  providing  customs  with  access  to  their 
commercial  data.  The  simplification  and  centralisation  of  functions  at  several  levels  are 
expected to result in cutting red tape and simplifying processes and procedures for operators. 
Therefore, the preferred option has the potential to greatly reduce administrative compliance 
costs for economic operators.  

8.3 Application of the ‘one in, one out’ approach 

As  noted  above,  the  preferred  option  has  the  potential  to  significantly  simplify  customs 
processes  and  to  reduce  administrative  burden  and  administrative  compliance  costs  for 
economic  operators.  Estimated  savings  identified  could  amount  to  EUR  40  billion  over  15 
years  (which  would  represent  net  savings,  once  offset  against  increased  customs  duty 
payments on e-commerce parcels, of €27 billion). These savings relate primarily to an overall 
aggregate reduction in the time needed to complete import processes, and to a lesser extent to 
a  removal  of  current  formalities  for  those  who  choose  to  use  duty-suspensive  movements 
from  Member  State  of  entry  to  destination  Member  State  (see  Annexes  3  and  9  for  more 
details) 

The main direct one-off administrative costs for companies would relate to the investment in 
preparing adaptations to their IT systems software to communicate with the new EU Customs 
Data  Space.  Unfortunately,  precise  data  on  these  costs  are  not  available  However,  it  is 
considered that the net impact for economic operators would be highly positive, because the 
one-off  costs  involve  adapting  to  interface  with  a  single  EU  customs  data  environment  in 
place  of  one  customs  IT  environment  per  Member  State  of  operations.  The  number  of  data 
provision points is reduced and the data is provided to one single EU interface. Data can be 
provided  in  advance  and  re-used  (instead  of  being  repeatedly  provided).  The  data 
requirements  are  rebalanced  to  better  fit  commercial  practices  (data  is  in  principle  required 
from  those  who  are  best  place  to  give  it,  data  is  accepted  in  multiple  formats,  and  the 
declarant  role  is  removed).  The  overall  IT  effort  required  across  economic  operators  is 
reduced  on  a  permanent  basis.  While  no  specific  data  is  available  on  these  costs,  recent 
experience with the reform of the Import Control System supports this view – businesses were 
strongly in favour of the shift of paradigm from multiple national interfaces and processes to a 
single shared interface and process, on grounds of reduction of cost and complexity. One-off 
development  IT costs to connect to Data Space are expected to be counteracted by a lower-
cost  IT  model  for  the  future.  In  this  regard,  the  joint  industry  statement  issued  on  7th  June 
2018 (105) stated as follows: 

‘These legal provisions  and in particular the ‘multiple filing’ requirements make the 
principles and proposed elements underpinning  ICS 2 essential. Economic operators 
need a unified and coherent EU system with a common set of processes and a shared 

(105) STATEMENT OF INDUSTRY SUPPORT FOR THE ICS 2 SYSTEM. Supported by: Airlines for Europe (A4E); the 
European  Association  for  Forwarding;  Transport,  Logistics  and  Customs  Services  (CLECAT);  the  Community  of 
European  Railways  (CER);  the  European  Express  Association  (EEA);  EurTradeNet  (ETN);  the  European  Shippers 
Council (ESC), the International Air Transport Association (IATA) and the World Shipping Council (WSC). 

72 

 
 
                                                      
IT  architecture.  The  proposed  Common  Repository,  the  Shared  Trader  Interface  / 
Harmonised Trader Interface with the same specifications, and the single access and 
identity  management  system  are  imperative  to  implementing  the  UCC  without 
disrupting trade. These systems features are the logical and necessary consequence of 
the UCC and IA/DA provisions. The alternative of a fragmented Member State based 
ICS  2  system  would  be  incoherent  and  inefficient,  and  would  impose  insupportable 
costs on both Member States and economic operators.’   

Minor  indirect  one-off  administrative  costs  for  companies  would  relate  to  training. 
Quantification of training costs was also not possible. These would concern a shift to  in focus 
of  training  towards  simpler  customs  processes,  implemented  uniformly  through  a  single 
interface  instead  of  through  multiple  national  environments.  This  would  particularly  benefit 
those which deal with different national processes and environments. As with IT, this would 
reduce  the  overall  training  effort  required  across  economic  operators  on  a  permanent  basis. 
Consequently, the net impact should be positive. 

9. HOW WILL ACTUAL IMPACTS BE MONITORED AND EVALUATED? 

The  baseline  Customs  Union  Performance  programme  annually  collects,  and  analyses 
aggregated  information  provided  by  the  Member  States  about  customs  activity,  trends,  and 
performance  in  the  EU  to  support  evidence-based  policy.  One  of  the  main  outcomes  of  the 
analysis is the Customs Union Performance Annual Report, addressed to the Member States 
only,  which  provides  conclusions  and  recommendations  on  main  developments  in  the 
Customs  Union,  based  on  the  analysis  of  Key  Performance  Indicators  linked  to  the  EU 
strategic  objectives:  protection,  competitiveness,  facilitation,  control,  and  cooperation.  The 
CUP indicators address several types of activities, ranging from the amount of customs duties 
collected, the use of simplifications, the role of the AEOs in customs processes, to actions in 
the field of customs controls and detection of illicit trade. 

The collection of CUP data is currently voluntary, which raises questions about data quality, 
completeness, and consistency, as well as issues regarding data ownership and confidentiality. 
The UCC reform would further develop the CUP programme to support the monitoring and 
evaluation  of  the  present  initiative,  improving  indicators  in  the  area  of  risk  analysis  and 
control  inputs  and  outputs,  and  protection,  collection,  and  simplification  outcomes.  In  the 
preferred  options,  the  EU  customs  Data  Space  would  enable  policy  impact  to  be  monitored 
and  measured  based  on  EU-wide  operational  data.  This  would  significantly  improve 
performance  measurement,  linking  EU  policy  priorities  directly  to  the  Customs  Union’s 
inputs,  outputs,  and  outcomes  at  the  operational  and  strategic  levels,  providing  accurate, 
timely information for operational decision-making and policy management.  

As  part  of  this  reform,  the  CUP  would  receive  a  legal  basis,  allowing  the  publication  of  an 
annual  report  on  the  performance  of  the  Customs  Union  at  Border  Crossing  Point  level, 
leveraging  the  current  implementation  of  the  Customs  Control  Equipment  Instrument.  This 
will  address  the  lack  of  effective  tools  for  oversight  at  the  Commission’s  disposal,  as 
indicated in the UCC evaluation. In the preferred option 4 where a more central digitalisation 
model is foreseen with an operational EU Customs Authority, the data for monitoring would 
be  directly  accessible.  The  Commission  could  include  some  of  the  following  success 
indicators in the annual CUP reports. 

73 

 
 
 
Objective 

Indicator 

Improve revenue collection 
via operational risk 
management at EU level 

Improve detection of non-
compliant imported products 
via operational risk 
management at EU level 

Make trade flows smoother 
for trusted operators 

Collect revenue from e-
commerce  

Exploit data for strategic 
customs action 

Enhance uniform 
implementation and practices 
(‘avoid port shopping') 

Empower customs authorities 
to act in the same way 

Revenue collection on goods valued above EUR 150 
Rate of unpaid duties 
Number of risk management strategies with other authorities 
(in charge of e.g. tax and antifraud)  
Seizures 
Number of supervision strategies with other authorities (in 
charge of e.g. antifraud, market surveillance, food, animal and 
health protection, product safety) 
Seizures 

Number of Trust and Check traders  
Percentage  of  trade  handled  by  Trust  and  Check  traders 
Number of processes required to trade goods  
Number of audits carried out on Trust and Check traders 
Number of Trust and Check traders authorisations suspended  
Revenue collection on consignments valued up to EUR 150 
Number of consignments valued up to EUR 150 

Volume and type of data available 
Number of data errors and interventions 
Interoperability with additional data sources (time and scope) 
Number and feedback on controls 
Minimum standards for risk management  
Number  of  EU  risk  signals,  risk  analysis  results,  control 
recommendations and control results 
Number of control recommendations 
Number and quality of trainings 
Number of joint activities, projects, workshop 

The  Commission  would  monitor  the  implementation  of  the  reform  on  a  regular  basis.  An 
evaluation of the initiative would be performed in 2035 and every five years thereafter. 

74 

 
 
 
 
 
 
 
 
75 

 
 
 
 
 
76 

 
 
 
Annexes 

77 

 
 
 
 
Annex 1 - Procedural Information 

LEAD DG, DECIDE PLANNING/CWP REFERENCES 

The  initiative  on  the  Reform  of  the  Union  Customs  Legislation  was  carried  out  under  the 
leadership  of  the  Directorate-General  for  Taxation  and  Customs  Union  (DG  TAXUD).  The 
agenda  planning  is  PLAN/2021/12806.  The  initiative  is  included  in  the  Commission  Work 
Programme 2022, Annex II on REFIT initiatives (n°19). (106) 

ORGANISATION AND TIMING 

The  main  framework  for  customs  legislation  in  the  EU  is  the  Union  Customs  Code 
(UCC)   (107),  which  was  adopted  in  2013  and  applicable  since  1st  May  2016.  DG  TAXUD 
started gathering feedback for the impact assessment on a reform of this framework in March 
2022, after the publication of a report by the Wise Persons Group on ‘Putting more union in 
the  European  Customs  –  Ten  proposals  to  make  the  EU  Customs  Union  for  a  Geopolitical 
Europe’. (108) 

An  Inter  Service  Steering  Group,  chaired  by  the  Secretariat  General  (SG)  of  the  European 
Commission, was convened three times between June and September 2022 (see table below) 
to support the steering of the project and to integrate views of other Commission services. The 
inter  service  group  included:  Directorate-General  for  Budget  (DG  BUDG),  Directorate-
General  for  Human  Resources  (DG  HR),  the  Directorate-General  for  Informatics  (DG 
DIGIT),  European  Anti-Fraud  Office  (OLAF),  the  Directorate-General  for  Internal  Market, 
Industry,  Entrepreneurship  and  Small  and  Medium-sized  Enterprises  (DG  GROW), 
Directorate-General for Agriculture and Rural Development (DG AGRI), Directorate-General 
for  Mobility  and  Transport  (DG  MOVE),  Directorate-General  for  Energy  (DG  ENER), 
Directorate-General  for  Environment  (DG  ENV),  Directorate-General  for  Climate  Action 
(DG  CLIMA),  Directorate-General  for  Communication  Networks,  Content  and  Technology 
(DG  CNECT),  Directorate-General  for  Maritime  Affairs  and  Fisheries  (DG  MARE), 
Directorate-General  for  Financial  Stability,  Financial  Services  and  Capital  Markets  Union 
(DG  FISMA),  the  Directorate-General  for  Health  and  Food  Safety  (DG  SANTE),  the 
Directorate-General  for  Migration  and  Home  (DG  HOME),  Directorate-General  for  Justice 
and  Consumers  (DG  JUST),  Directorate-General  for  Trade  (DG  TRADE),  Directorate-
General  for  European  Neighbourhood  Policy  and  Enlargement  Negotiations  (DG  NEAR), 
Directorate-General  for  Eurostat  (DG  ESTAT),  European  External  Action  Service  (EEAS), 
Legal Service (SJ). 

A  brief  chronology  of  significant  milestones  leading  to  the  adoption  of  the  draft  impact 
assessment is provided below. 

(106)  
(107)  

2022 Commission Work Programme – key documents | European Commission (europa.eu) 
Regulation (EU) N° 952/2013 of the European Parliament and of the Council of 9 October 2013 laying 

down the Union Customs Code (OJ L 269 of 10.10.2013) 

(108)  

PUTTING MORE UNION IN THE EUROPEAN CUSTOMS: Ten proposals to make the EU Customs 
Union fit for a Geopolitical Europe, Report by the Wise Persons Group on the Reform of the EU Customs 
Union – Brussels March 2022. 

78 

 
 
                                                      
Table 1: Chronology of the initiative 

Date 

16/12/2021 

31/03/2022 

28-29/04/2022 

09/06/2022 

30/6/2022 

20/07/2022 

Activity 

Political validation of the initiative  

Presentation of the Wise Persons Group’s 
Report 

High  Level  Seminar  of  European  Customs 
Directors General  on the Wise Persons  Group 
(WPG) report conclusions 

1st meeting of the inter service steering group 

2nd  meeting of the inter service steering group 

Publication of the Call for Evidence  

20/07/2022 - 19/09/2022 

Period of the public consultation (8 weeks) 

14/09/2022 

28/09/2022  

26/10/2022  

28/10/2022 

27/01/2023 

Third meeting of the inter service group  

Submission to Regulatory Scrutiny Board 

Presentation to Regulatory Scrutiny Board 

Opinion of the Regulatory Scrutiny Board 

2nd Opinion of the Regulatory Scrutiny Board 

CONSULTATION OF THE RSB 

The draft impact assessment report was submitted to the Commission’s Regulatory Scrutiny 
Board  (RSB)  on  30  September  2022.  Following  the  meeting  on  26  October  2022,  the  RSB 
issued  a  negative  opinion  on  28  October  2022,  suggesting  several  areas  for  further 
improvement. The revised report was resubmitted on 21 December 2022. The Board issued a 
positive opinion with reservations on 27 January 2023. The RSB recommendations along with 
the changes introduced in the text are summarised below:  

Table 2: Consultation of the Regulatory Scrutiny Board (1st and 2nd opinions): 

1st RSB Opinion  

Changes introduced in the revised version 

(B) Summary of findings 

(1)  The  report  does  not  sufficiently  explain  the 
coherence with other policy initiatives. It does 
not 
in 
implementing the Customs Action Plan in the 
dynamic  baseline.  It  does  not  present  a  clear 
and fully developed intervention logic.  

progress 

clearly 

reflect 

the 

to  explain 

the 
The  original  report  failed 
difference between the dynamic baseline (where 
the CAP and the UCC had been completed) with 
option  1,  which  proposed  small  adjustments  to 
the existing legislation.  

In the revised report, option 1 has been removed 
integrate  all  customs 
and 

the  option 

to 

79 

 
 
 
 
administrations into  an  EU  service  is  discarded. 
It  is  clearly  explained  that  the  customs  action 
plan  is  considered  a  part  of  the  dynamic 
baseline. The connection to recent initiatives like 
the  EU  single  window  for  customs  is  better 
explained.  A  new  intervention  logic  links  more 
clearly  the  three  drivers,  processes,  data  and 
governance,  and  the  key  policy  choices  in  the 
options. 

The  original  report  presented  three  governance 
alternatives:  the  Commission,  a  Board  and  an 
agency. And it opened the door to a combination 
of  those  alternatives  but  that  combination  was 
not assessed.  

The revised report will present two alternatives: 
the Commission and an Authority that takes the 
form of an agency, with more or less tasks. The 
possibility to combine options is no longer there 
and this facilitates the rest of the assessment and 
the comparison.  

The  revised  report  also  includes  a  preferred 
option. 

implementation  pace  of 

As to the related funding risks, the revised report 
proposes  an 
the 
measures  which  takes  into  account  that  the 
reform  generates  additional  revenues,  from  e-
commerce trade and better enforcement of duties 
and  related  VAT.  The  central  customs  Data 
Space  would  bring  significant  savings 
to 
Member  States,  but  requires  investments  under 
the  EU  budget,  as  would  an  EU  Customs 
Authority.  The  funding  risks  of  the  preferred 
option are clearly signalled. 

The new approach to both data management and 
governance  framework  has  a  direct  cost  to  the 
EU  budget.  The  costs  are  presented  over  a  15-
year  timeframe,  to  account  for  the  phase-in  of 
staff,  or  the  peak  in  IT  investment.  This 
approach  has  improved  the  presentation  and 
comparability.  

(2)  The  report  does  not  identify,  assess  and 
compare  the  options  (or  their  most  relevant 
combinations) in a consistent way that brings 
out clearly the key policy choices. It does not 
sufficiently  consider  the  feasibility  of  the 
options and the related funding risks.  

(3)  The 

impact  analysis 

is  not  sufficiently 
comprehensive  and  does  not  clearly  present 
the costs and benefits of the options (or their 
combinations). 

impact  assessment,  and  across 

The above-mentioned changes are integrated in a 
the 
revised 
technical  annexes  with  the  detailed  assessment. 
The 
impact 
formulations 
assessment were revised. 

technical 

the 

in 

(C) What to improve  

(1)  The report should better justify the urgency 
and rationale to act now. It should establish 
clearer links to the evidence from the interim 
evaluation and European Court of Auditors 

The  urgency  to  act  now  is  demonstrated  in 
chapter  2.4  on  “how  likely  is  the  problem  to 
persist”,  notably  by 
the  drastic 
increase  in  declarations  due  to  e-commerce  and 

illustrating 

80 

 
 
recommendations. The report should better 
describe the coherence of the UCC revision 
with other non-customs policy initiatives and 
policy areas. 

(2)  The report  should  provide a  more  robust  and 
dynamic  baseline.  In  particular,  it  should 
clarify  how  the  changes  coming  from  the 
2016  UCC  reform,  related  work  in  non-
customs  policy  areas  and  implementation  of 
the  Customs  Action  Plan  are  reflected  in  the 
baseline  analysis  and  why  they  will  not  be 
sufficient  to  address  the  identified  problems. 
the 
It  should  clearly  delineate  whether 
initiative  is  a  continuation  of  the  Plan  or  a 
shift in the paradigm. 

for 

tasks 

enforcing 
growing 
prohibitions/restrictions  stemming  from  sectoral 
legislation  (most  recent  examples  deforestation, 
forced labour).  

customs 

The  revised  version  reflects  more  prominently 
the  evidence  found  by  ECA  and  in  the  UCC 
evaluation,  both  pointing  to  substantial  reform 
needs, despite and in parallel to ongoing reform 
efforts (see also point 2). The role of customs in 
non-customs  files  is  key  to  this  initiative;  this 
aspect is more prominently explained. 

In  the  revised  version, the introduction  explains 
better  how  the  customs  action  plan  is  a  first 
follow-up to the foresight report. Its activities are 
set  to  take  place  until  2025.  Moreover,  the 
dynamic baseline was entirely redrafted to better 
include  the  Customs  Action  Plan  (CAP).  The 
CAP,  as  a  first  follow-up  to  the  2040  foresight 
report,  assessed  that  the  2016  UCC  reform  is 
needed  but  insufficient  for  addressing  current 
and  emerging  challenges,  pointing  to  the  need 
for  substantial  reform.  This  is  also  explained  in 
the section 2.3 on the drivers.  

(3)  The 

a 

report 

problems, 

objectives 

clearer 
should  present 
intervention  logic  by  better  connecting  the 
drivers, 
and 
options/measures.  It  should  clarify  whether 
the  identified  specific  objectives  have  the 
same  weight  and  whether there  is  an implicit 
revenue  generation  objective.  The  rationale 
should  be  clearer  on  how  the  revision  would 
contribute 
the  Green  Deal 
objectives. 

fulfilling 

to 

Most  of  the  CAP  actions  are  of  preparatory 
nature,  paving  the  way  for  the  reform,  others 
(e.g.  Action  17  on  governance  reform)  are 
subject  of  this  impact  assessment.  The  reform 
proposal 
in 
continuation  of  the  CAP.  The  revised  dynamic 
baseline  takes  into  account  both  completion  of 
the 2016 UCC reform and, to the extent that the 
initiatives  announced  therein  are  not  subject  of 
this Impact Assessment, also the CAP by 2025. 

consistent 

therefore 

and 

is 

strands: 

‘customs  processes’, 

The  revised  intervention  logic  works  out  the 
‘data 
three 
management’ and ‘governance framework’. The 
drivers  are  identified  as  the  causes  of  the 
problems  and  it  is  explained  how  the  solutions 
provided in the options are linked to the drivers.   

collection 

the  protection, 

The general objective has been redrafted, clearly 
separating 
and 
simplification as one.  The collection of revenue 
is  part  of  the  general  objective.  Although  the 
reform  will  generate  additional  revenue,  in 
particular 
the  e-commerce 
removing 
exemption below 150 €, it is not an objective as 
such. The level playing-field and alignment with 
VAT  rules  are  the  main  political  considerations 
on  e-commerce.  The  Green  deal  objective  has 
the  protection  general 
been  subsumed 
objective. 

from 

in 

The  revised  text  clarifies  that  the  five  specific 

81 

 
 
(4)  The  report  should  better  explain  how  the 
options were mapped, identified and designed. 
It  should  clearly  outline  how  each  option 
would  work  in practice.  It  should  present the 
options (and their combinations) in a way that 
brings out clearly the available policy choices. 
The  option  descriptions  should  be  much 
clearer on the extent to which the options and 
measures  are  cumulative  or  exclusive.  The 
combination of options that are considered the 
most  relevant  ones  (also  in  view  of  the 
legislative  discussions)  should  be  identified 
upfront and subsequently assessed. 

objectives  are  equally  important:  (i)  strengthen  
EU risk management both for financial and non-
financial  risks;  (ii)  reduce  the  administrative 
burden;  (iii)  level  the  playing  field  on  e-
commerce;  (iv)  enhance  access  to  and  use  of 
data; (v) act as one. 

The new, improved intervention logic by drivers 
provides  a  much  clearer  picture  of  the  options. 
The revised report clearly explains that there are 
three main policy choices to make:  

-  To  what  extent  do  we  reform  the  customs 
processes? The question there is how far we 
simplify  the  rules.  It  proposes  a  series  of 
technical options.  

-  To  what  extent  do  we 

reform 

the 
management  of  customs  data? The  question 
is  whether  to  implement  the  new  customs 
IT 
processes 
in  a 
environments  (O1+2)  or 
centralised Data Space (O3+4). 

in  national 
together 

individually 

-  To what extent do we reform the governance 
of the customs union? Different possibilities 
to  strengthen  ‘acting  as  one’  are  considered 
in the reform. In broad terms, the key policy 
choices are: 

o  strengthen 

the 

current 

cooperation 

approach (O1) 

o  create a customs agency for coordination 

(O2) 

o  strengthen  the  role  of  the  Commission 

(O3) 

o  create  a  customs  agency  for  operations 

(O4)  

the  approach 

The  revised  report  assesses  all  relevant  options 
and indicate a preferred option. It now considers 
four  policy  options,  without  sub-options.  All 
four  options  aim  to  simplify  customs  processes, 
but  the  level  and  impact  will  depend  to  some 
extent  on 
taken  on  data 
management  and  governance.  Option  1  will 
focus  on  the  reform  of  processes  without 
ambitious  changes  of  data  management  and 
governance.  Option  2  will  complement  the 
process  simplification  with  an  EU  Customs 
Authority 
the  management  of 
community programmes and operational support 
(coordinating authority) without centralising data 
management.  Option  3  combines  the  process 
simplification  from  Option  1  with  a  central  EU 
the 
Customs  Data  Space,  managed  by 
Commission.  Option  4  tasks  an  EU  Customs 
Authority  with  the  management  of  the  central 

tasked  with 

82 

 
 
(5)  The  report  should elaborate  on  the feasibility 
of  the  options,  including  by  assessing  more 
thoroughly the related funding risks. It should 
clarify  which  mitigating  measures  and 
alternative funding solutions, including staged 
policy  approaches,  have  been  considered  to 
minimise such risks. 

(6)  Based  on  a  clear  presentation  of  a  consistent 
set of options the report should provide a cost 
benefit  analysis  that  informs  the  decision-
making  process.  It  should  clearly  present  the 
costs and benefits and the net impacts of each 
option and/or the most relevant combinations 
thereof.  It  should  consistently  use  them  (and 
the 
relevant  qualitative  analysis)  when 
comparing  the  effectiveness,  efficiency  and 
proportionality of the options 

(7)  The 

impact  analysis  should  be 

further 
developed. The  report  should provide  a  more 
detailed  assessment  of  the  effectiveness  and 
efficiency  of 
the  proposed  governance 
structures. It should better explain the impacts 
on consumers in terms of the likely cost pass 
through  and  on  Member  States  in  terms  of 
(customs)  revenues  and  (collection)  costs.  It 
assumptions 
should  better 
underpinning the analysis of the IT costs and 
the costs and benefits to businesses. It should 
also better reflect macro-economic impacts of 
the initiative. 

explain 

the 

EU customs Data Space and carry out risk, crisis 
and  data  management/data  analytics.  It  would 
also  manage  community  programmes  and 
provide 
(operational 
authority).  

operational 

support 

The  report  clearly  explains  the  funding  risks  of 
the preferred option.  

The  revised  report  proposes  an  implementation 
pace  of  the  measures  which  takes  into  account 
that 
the  reform  should  generate  additional 
revenues,  from  e-commerce  trade  and  by  better 
tackling  customs  fraud.  The  central  customs 
Data Space would require investments under the 
EU budget, as would an EU Customs Authority. 
The  funding  risks  of  the  preferred  option  are 
nevertheless clearly signalled.   

In  the  revised  report,  the  options  are  presented 
along  three  strands,  as  per  revised  intervention 
logic: customs processes, data, governance. The 
main report includes a table per option with the 
cost-benefits  over  a  period  of  15  years  which 
also includes a net calculation. As rightly noted, 
some benefits are not quantifiable so a consistent 
qualitative  analysis  is  provided  per  option, 
supported by the use cases in Annex 9, sections 
4, 5 and 6. The effectiveness analysis is linked to 
the objectives. 

A  summary  table  on  cost  and  benefits  is  added 
under each option. 

The redefinition of the policy options makes the 
assessment of the effectiveness and efficiency of 
the  proposed  governance 
structures  more 
straight-forward. 

The  analysis  clarifies  that  the  current  customs 
compliance  obligations  for  e-commerce  are 
currently  so  burdensome  that,  even  if  the  EUR 
150  duty  exemption  is  removed,  the  operators’ 
compliance  cost  will  be  reduced  and  therefore 
there  should  not  be  any  negative  impact  on 
consumers. 

It is difficult to provide a big picture on macro-
economic  impacts.  The  revised  report  takes  a 
measured  approach,  providing  examples  where 
available. 

Assumptions 
improved in Annex 7.  

in 

the  analysis  of  IT  costs 

The  detailed  assessment  of  the  governance 
structures is improved in Annex 8. 

Costs  and  benefits  to  businesses  and  impact  on 
consumers  on  e-commerce  are  better  explained 

83 

 
 
 
(8)  Report  should  better  present  the  views  of 
including 
different  stakeholder  categories, 
affected  non-customs  authorities  of 
the 
Member  States  as  well  as  those  of  other 
relevant EU actors. 

in Annex 9. 

distinguished, 

including  where 

In the revised version, the stakeholder views are 
better 
it 
corresponds  to  a  non-customs  authority.  The 
Wise  Persons  Group  extensively  consulted  the 
non-customs  authorities  their  findings  are  also 
included therein. DG TAXUD has not conducted 
any  direct  consultation  with  non-customs 
authorities. 

(9)  The 

report 

should  clearly  present 

the 
monitoring  and  evaluation  arrangements.  It 
should  be  clear  how  the  success  of  the 
initiative would look like and how it would be 
measured. 

The  revised  report  includes  a  preferred  option, 
which  allowed  the  indication  of  the  monitoring 
and  evaluation  arrangements.  These  are  now 
included in the revised version in chapter 8. The 
more 
operational 
objectives  will  also  facilitate  measurement  of 
success.  

tangible/output 

oriented 

2nd RSB Opinion  

Changes introduced in the revised version 

(B) Summary of findings 

(1)  The  report  does  not  describe  the  options  in 
sufficient detail.  

See below (What to improve, item 1) 

(2) The analysis for the One In, One Out approach 
does not have a sufficiently level of granularity. 

See below (What to improve, item 3) 

(3) The report does not provide a clear picture of 
the  net  impacts  of  the  initiative,  in  particular 
regarding the impacts of the proposed government 
structures. 

(C) What to improve  

See below (What to improve, items 4 and 5) 

(1)  The  description  of  the  options  needs  further 
clarification.  The  report  should  provide  more 
information on the options content and how would 
they  work  in  practice.  In  particular,  the  report 
should  better  explain  where  the set  of  options  on 
customs  processes  comes  from,  and  how  the 
individual measures were identified. As the option 
is presented to be a pre-requisite for the following 
reform  of 
the  data  space  management  and 
governance, the report should clarify the available 
policy  choices  within  this  block.  The  report 
should also better explain the origin and rationale 
for 
the  Authorised 
Economic Operator ‘trusted trader’ arrangements.  

the  measures  related 

to 

Implemented, primarily through substantial 
improvements in section 5.2 

84 

 
 
  
 
 
Implemented, primarily through substantial 
improvements in section 5.2.1 and 5.3.2 

on 

e-commerce  were 

(2)  The  report  should  elaborate  on  how  the 
options 
identified, 
particularly what the reasoning for the removal of 
the  EUR  150  exemption  is.  Making  electronic 
platforms ‘deemed importers’ and introduction of 
a  ‘bucketing  system’  for  duty  calculation  also 
require more explanation, especially regarding the 
the 
range  of  policy  choices  available 
Commission.  

to 

(3)  The  report  should  better  explain  the  analysis 
for  the  One  In,  One  Out  approach.  It  should 
distinguish between adjustment and administrative 
costs  and  clearly  present  cost  savings  (including 
in  Annex  3)  and  further  explain  how  they  were 
calculated. 

(4) The overall presentation of the impact analysis 
should be clarified. The delineation between costs 
and  benefits  should  be  clearer  (including  non-
quantifiable)  to  give  a  better  picture  of  net 
impacts. The report should be clear what estimates 
were calculated for illustrative purposes only and 
they  should  not  be  included  in  the  total  figures. 
The assumptions underpinning the analysis of the 
IT costs (including robustness of expected savings 
for  Member  States)  and  costs  for  businesses  still 
need  a  better  explanation. The report  should  also 
ensure the analytical consistency throughout. 

(5)  The  report  should  provide  a  more  detailed 
impact  analysis  of  the  proposed  governance 
solutions  by  bringing  in  the  key  elements  of  the 
analysis from the Annexes.  

(6) The impacts on the customers still need to be 
clarified.  In  particular,  regarding  the  removal  of 
the  EUR  150  duty  exemption,  the  report  should 
better  describe  the  benefits  and  explain  who 
exactly  will  pay  the  extra custom  duties that  will 
provide significant revenues to the Member States 
and EU budget. 

Implemented, through substantial improvements 
in section  8 and Annex 3 

Implemented,  through  substantial  improvements 
in sections 6 and 7, and corresponding Tables in 
Annex  9  (including  re-structuring  to  provide 
analytical consistency throughout). 

Implemented,  through  substantial  improvements 
in sections 5.2 to clarify the basis of assessment 
of  the  options,  and  how  governance  is  assessed 
in  that  context,  and  a  new  section  6.6.  directly 
addressing governance data. 

Implemented,  primarily 
improvements in section 5.2.1 and 5.3.2 

through  substantial 

(7)  The  report  should  also  explain  when  an  ex-
post evaluation is planned to assess the success of 
the initiative. The Board notes the estimated costs 
and  benefits  of  the  preferred  option(s)  in  this 
initiative,  as 
the  attached 
quantification tables. 

summarised 

in 

Implemented, in section 9 

85 

 
 
 
 
 
 
 
 
 
 
EVIDENCE, SOURCES AND QUALITY 

Evidence  was  gathered  from  existing  documentary  sources  including  legislation  and  other 
policy  documents,  customs  and  trade  statistics,  evaluations  and  reports  on  relevant  policies 
and information on related initiatives. The documents listed below were particularly relevant 
as they were based on extensive consultations and analysis about the situation existing before 
the present initiative, and thereby provide context and evidence for the initiative’s underlying 
rationale. 

  Communication on the governance of the customs union (109); 

  Customs Action Plan (110); 

  Foresight report on the future of Customs in 2040 (111); 

  Wise Persons Group report  (112); 

  Evaluation of the UCC implementation  (113); 

  E-customs reports 2017-2021 (114);  

  European Court of Auditors (ECA) Special Reports 19/2017, 12/2019 and 4/2021 (115); 

 

Impact assessments carried out by the European Commission on the following initiatives: 

  Establishment of the EU Single Window Environment for Customs (116); 

  Setting eco-design requirements for sustainable products (117); 

  Proposal for a regulation on general product safety (118) ; 

(109)  

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/2016/0813 
final). 

(110)  

Communication  from  the  Commission  to  the  European  Parliament,  the  Council  and  the  European 
Economic  and  Social  Committee  Taking  the  Customs  Union  to  the  Next  Level:  a  Plan  for  Action 
(COM(2020) 581 final). 

(111)  

Ghiran,  A.,  Hakami,  A.,  Bontoux,  L.  and  Scapolo,  F.,  The  Future  of  Customs  in  the  EU  2040, 
Publications  Office  of  the  European  Union,  Luxembourg,  2020,  The  Future  of  Customs  in  the  EU  2040 
(JRC121859). 

(112)  
(113)  

See footnote 3. 
Commission  Staff  Working  Document  on  the  interim  evaluation  of  the  implementation  of  the  Union 

Customs Code (SWD/2022/0158 final/2). 

(114)  

European  Commission,  Directorate-General  for  Taxation  and  Customs  Union,  E-customs  annual 

progress reports 2017 2018 2019 2020 2021. 

(115)  

ECA  special  report  No  19/2017:  Import  procedures:  shortcomings  in  the  legal  framework  and  an 
ineffective  implementation  impact  the  financial  interests  of  the  EU;  ECA  special  report  No  26/2018:  A 
series  of  delays  in  Customs  IT  systems:  what  went  wrong?;  ECA  special  report  No  4/2021:  Customs 
controls: insufficient harmonisation hampers EU financial interests. 

(116)  

COMMISSION  STAFF  WORKING  DOCUMENT  IMPACT  ASSESSMENT  Accompanying  the 
Proposal for a Regulation of the European Parliament and of the Council establishing the European Union 
Single Window Environment for Customs and amending Regulation (EU) No 952/2013 (COM(2020) 673 
final,  SWD(2020) 238 final). 

(117)  

COMMISSION  STAFF  WORKING  DOCUMENT  IMPACT  ASSESSMENT  Accompanying  the 
document  Proposal  for  a  Regulation  of  the  European  Parliament  and  of  the  Council  establishing  a 
framework for setting ecodesign requirements for sustainable products and repealing Directive 2009/125/EC 
(COM(2022) 142 final, SWD(2022) 82 final). 

(118)  

COMMISSION  STAFF  WORKING  DOCUMENT  IMPACT  ASSESSMENT  Accompanying  the 
document  Proposal  for  a  Regulation  of  the  European  Parliament  and  of  the  Council  on  general  product 

86 

 
 
                                                      
 
  European Monitoring Centre for Drugs and Drug Addiction European Drug Report 2021: 

Trends and Developments (119); 

  Serious Organised Crime Threat Assessment (SOCTA) – Europol; 

  Drug precursor developments in the European Union 2019 report (120); 

  Enforcement report of the EU chemical regulations REACH and CLP (121); 

  Organisation  for  Economic  Co-operation  and  Development  and  European  Union 

Intellectual Property Office, Global Trade in Fakes: A worrying threat, 2021 (122); 

  European Union Intellectual Property Office, 2020 status report on IPR infringement (123); 

  Eurostat Labour Cost Survey 2020; 

  Ecodesign impact accounting annual report 2021 (124). 

Additional evidence was gathered through the following activities: 

a)  Consultation  of  Member  States  customs  administrations  in  a  Reflection  Group (125) 
composed of the Directors Generals of national customs authorities, specifically set-up 
to  look  at  the  various  building  blocks  of  the  reform  package  in  three  dedicated 
meetings  (15/06,  6/07  and  21/09/2022).  This  Reflection  Group  was  preceded  by  a 
High-Level  Seminar that took place in  France on 28 and 29 April 2022 to  exchange 
views on the Wise Persons Group report. 

b)  Consultation of trade associations members of the Trade Contact Group in one ad-hoc 
meeting on 12/07/2022, (126) followed by an invitation to submit written comments.   

c)  Commission  officials  in  several  DGs  working  with  various  regulatory  requirements 
applicable  at  the  borders;  continuous  exchange  of  expertise  and  best  practices  took 
place  among  affected  Commission  DGs  on  dedicated  topics  to  build  the  internal 
expertise needed for this impact assessment. In particular, such collaboration allowed 
building use cases in the various environments of fiscal and non-fiscal legislations that 
customs  have  to  implement  in  liaison  with  other  authorities  (Market  Surveillance 
Authorities, Law Enforcement Bodies, Tax Agencies) for assessing the impact of the 
options (see Annexes 6 and 9). 

safety,  amending  Regulation  (EU)  No  1025/2012  of  the  European  Parliament  and  of  the  Council,  and 
repealing Council Directive 87/357/EEC and Directive 2001/95/EC of the European Parliament and of the 
Council (COM(2021) 346 final, SWD(2021)168 final).  

(119)  

European Monitoring Centre for Drugs and Drug Addiction,  European Drug Report 2021: Trends and 

Developments, June 2021. 

(120)  

European  Monitoring  Centre  for  Drugs  and  Drug  Addiction,  Drug  precursor  developments  in  the 

European Union, November 2019. 

(121)  
(122)  
(123)  

https://op.europa.eu/en/publication-detail/-/publication/199c348e-00e9-11ec-8f47-01aa75ed71a1  
https://www.oecd.org/publications/global-trade-in-fakes-74c81154-en.htm  
European Union Intellectual Property Office, 2020 Status report on IPR infringements - Why IP Rights 

are important, IPR infringement, and the fight against counterfeiting and piracy, June 2020. 

(124) European Commission, Directorate-General for Energy, Ecodesign impact accounting annual report 2021 : 
overview and status report, Publications Office of the European Union, 2022 Ecodesign impact accounting 
annual report 2021 - Publications Office of the EU (europa.eu) 

(125)  

The  Customs  Reflection  Group  is  a  subgroup  of  the  Commission  Customs  Policy  Expert  Group.  See 

Commission Register of Expert Groups, code E00944. 

(126)  

The  composition of the group and the  meetings  minutes of the 60th and 61st plenary  meetings of the 

Trade Contact Group are available in the Commission Register of Expert Group, code E02134. 

87 

 
 
                                                                                                                                                                      
d)  External expertise used for the impact assessment: 

(i)  A  study  on  the  interim  evaluation  of  the  implementation  of  the  UCC  was 
conducted  by  a  consortium  led  by  Economisti  Associati  for  supporting  the 
Commission  interim  evaluation  of  the  UCC.  It  comprised  of  an  implementation 
review of legal and IT aspects of the UCC followed by an evaluation drawing on 
stakeholder interviews, a public consultation and desk research. (127) 

(ii) A  study  on  the  Authorised  Economic  Operator  (AEO)  programme,  the  EU’s 
‘trusted trader’ scheme that seeks to establish customs-to-business partnership to 
strengthen the security of supply chains. The study aims to assess the programme 
in  terms  of  effectiveness,  efficiency,  relevance,  coherence  and  EU  added  value, 
and 
through 
strengthening  the  link  between  the  AEO  programme  and  processes  and  systems 
for customs risk management. (128) 

to  explore  options  for 

its  quality,  particularly 

improving 

(iii)  A  study  on  e-commerce  was  conducted  by  Price  Waterhouse  Coopers  to 
explore and assess, from a holistic perspective, options for an innovative overhaul 
of the customs and taxation rules applicable to e-commerce goods imported into 
the EU. (129)  

The diagram below illustrates the methods used to provide evidence for the preparation 
of the impact assessment.  
Figure 1: visualisation of the inputs for the impact assessment (130) 

Institutional 
documentary 
review and 
collaboration

Impact 
assessment

Evaluations, 
studies, case 
studies

Member States 
consultation 
Reflection group 
and High Level 
Seminar

Public 
consultation

Trade 
consultation

(127)  

Study  to  support  the  interim  evaluation  of  the  implementation  of  the  Union  Customs  Code,  Oxford 

Research, Ipsos, CASE, Wavestone and Economisti Associati, 2021. 

(128)  

Study  on  the  Authorised  Economic  Operator  programme,  Oxford  Research,  Ipsos,  Wavestone,  CT 
Strategies  and  Economisti  Associati,  2022.  The  requests  for  services  to  produce  this  study  is  not  yet 
finalised and the final report is not yet accepted.   

(129)  

Study on an integrated and innovative  overhaul of EU rules governing e-commerce transactions  from 
third countries from a customs and taxation perspective, Pricewaterhouse Coopers EU Services, 2022. The 
requests for services to produce this study is not yet finalised and the draft final report are not yet accepted.   

(130)   Where not otherwise specified, figures and tables were produced by DG TAXUD. 

88 

 
 
 
 
 
                                                      
Annex 2  - Stakeholder Consultation (Synopsis 
Report) 

This synopsis report provides a summary of the stakeholder consultation activities carried out 
in  the  scope  of  the  impact  assessment.  It  serves  both  to  present  the  outcome  of  the 
consultation activities and to show how the input has been taken into account.  

1.  CONSULTATION STRATEGY 

The  consultation  strategy  was  included  in  the  call  for  evidence  published  on  20  July 
2022. (131) It was designed in order to gather views from a broad range of stakeholders on the 
problems that the reform of customs legislation aims to tackle, the potential policy options to 
be  covered,  as  well  as  the  scope  and  technicalities  attached  to  each  alternative.  The  views 
collected  through  the  consultation  activities  were  used  to  inform  the  present  impact 
assessment. 

The  strategy  acknowledged  the  importance  of  feedback  from  public  authorities,  trade 
stakeholders and the wider public. On this basis, it defined the groups to be consulted via the 
following methods: 

  Targeted  consultations  with  national  customs  authorities  in  the  Reflection  Group, 

created within the Customs Policy Group (see infra); 

  Targeted  consultation  with  trade  representatives  of  the  Trade  Contact  Group  (see 

infra); 

  An open public consultation (see infra). 

Overall, feedback was sought and collected from the following stakeholders:  

a)  Member States’ customs authorities; 

b)  Other Member States’ public authorities that rely on customs to control or implement 
their policies at the border (e.g. market surveillance, antifraud, data protection, health 
and safety compliance, sectoral regulatory bodies); 

c)  Economic  operators  dealing  with  cross-border  goods  movement,  both  in  terms  of 
individual  companies  and  as  represented  by  national,  European  and/or  international 
trade and business associations. They can be grouped as follows: 

  Large, medium, small and micro companies that import or export goods into and 

from the EU; 

  Professionals  in  the  trade  supply  chain:  shipping  and  transport  companies  that 
organise and take care of the physical movement of goods, or arrange commercial 
transportation  (freight  forwarders  and  logistics  companies);  customs  and  other 

(131) 

https://ec.europa.eu/info/law/better-regulation/have-your-say/initiatives/13316-Revision-of-the-Union-

Customs-Code_en  

89 

 
 
                                                      
intermediaries, who are involved in the fulfilment of customs procedures on behalf 
of clients; port and airport operators, terminal handlers, warehouse operators; 

  Manufacturers,  retailers  and  wholesalers  who  are  active  in  the  business  of 

purchasing and/or selling goods from third country;  

d)  Other  interested  groups  such  as  academics/researchers,  professional  consultants  and 

interested citizens. 

2.  METHODOLOGY AND TOOLS FOR PROCESSING THE DATA  

The  consultation  activities  allowed  for  the  collection  of  qualitative  and  quantitative 
information  and  data,  which  were  processed  and  analysed  systematically  using  appropriate 
techniques.  Qualitative  data  (including  from  submissions  and  contributions  sent  to  the 
Commission) was coded according to key themes, then reviewed and analysed from different 
angles  and  presented  in  narrative  form.  Quantitative  data  (survey  responses)  was  processed 
using  Excel  and  Commission’s  public  consultation  dashboard  tool  and  analysed  using 
statistical methods such as frequency counts, cross-tabulations and simple trends. Results are 
presented in terms of tables, charts and graphs. 

3.  RESULTS OF THE CONSULTATION ACTIVITIES 

3.1 Feedback on the call for evidence 

The call for evidence aimed to outline the context of the problem, introduce policy options for 
targeted EU level intervention, the potential impact of the initiative on other policy areas, and 
the  main  features  of  the  consultation  strategy.  Stakeholders  were  able  to  provide  feedback 
until 19 September 2022. In total 86 contributions were received on the call for evidence, one 
of  which  was  duplicated.  Most  of  the  feedback  was  provided  by  business  associations 
(45.3%),  companies  (38.4%)  and  non-governmental  organisations  (8.14%).  The  other 
contributions came from two academic and research institutions, two EU citizens, as well as 
one  public  authority  and  a  consumer  organisation.  Two  contributions  from  two  different 
countries  from  seemingly  the  same  association  are  identical.  Out  of  13  contributions  from 
Denmark, 10 contributions came from a single company; the rest of the responses came from 
Belgium  (26),  Poland  (16,  one  of  which  duplicated)),  Germany  (11),  United  Kingdom  (7), 
France (5), Netherlands (2), Hungary (2) Finland (2), Latvia (1) and Italy (1).  

Among the contributions that did not provide feedback specifically on the call for evidence, it 
is worth mentioning there were twenty requests for amending specific provisions of the UCC 
in the following areas: special procedures, customs representation, guarantees, formalities on 
the exit of goods in relation to road and rail transport, inclusion of freight and insurance costs 
in  customs  clearance,  currency  conversion,  allocation  of  and  possibility  to  modify  freight 
costs  post-acceptance  of  customs  declarations,  creation  of  a  master  data  system  for  the 
importer  and  exporter,  customs  debt  in  relation  to  temporary  storage  and  warehousing, 
invalidation of the customs declaration. Five of twenty requests, submitted by NGOs, concern 
the  revision  of  Article  12  UCC  to  allow  for  public  disclosure  of  customs  data  in  order  to 
ensure accountability for possible human rights and environmental harm. Moreover, two PhD 
thesis were submitted, respectively on reforming the enforcement of Union customs law and 
on the management of e-commerce. 

The main problems more frequently expressed by the contributors largely correspond to the 
elements  included  in  the  call  for  evidence.  Mainly  large  companies  indicated  the 

90 

 
 
administrative  burden  on  traders  that  results  from  the  current  customs  legislation 
architecture; this includes, for example, the requirements to provide several times for different 
purposes the same or similar information about customs operations and multiple reporting in 
tax-customs  related  matters  such  as  for  IOSS  and  for  the  Central  Electronic  System  of 
Payment (CESOP). (132) Contributors also pointed in significant numbers to the non-uniform 
approach taken by the customs authorities in the same or across different Member States in 
applying  customs  legislation  (different  implementation  and  interpretation  of  the  same  rules; 
differences in control procedures, and different application of sanctions for non-compliance). 
Contributors  having  the  AEO  status  frequently  complained  about  the  insufficient  concrete 
benefits  granted  to  them.  Among  both,  large  and  small  size  contributors,  there  were  shared 
concerns  about  the  challenges  of  e-commerce  flows,  including  the  increasing  volume  of 
goods traded online but also the increasing illicit trade for buying online counterfeit goods. 

Regarding  potential  policy  measures  indicated  in  the  call  for  evidence  as  part  of  a  customs 
reform,  the  contributors  supported  in  particular  the  concept  of  a  centralised  model  for  the 
digitalisation  of  customs  processes  and  requirements  and  for  data  harmonisation.  Many 
contributors supported the idea of measures to achieve the EU Green Deal’s objectives also in 
the customs area, for example by way of fiscal measures to tax road transport, by introducing 
customs requirements for recycled or re-usable products within supply chain and by using the 
Harmonised System  for  applying more favourable customs duties to  sustainable or  recycled 
products  imported  from  third  countries.  A  better  cooperation  with  market  surveillance  and 
other  non-customs  authorities  involved  in  customs  movements  is  also  viewed  as  a  positive 
development,  in  particular  if  a  clearer  and  more  efficient  information  sharing  is  foreseen. 
There  was  support  for  solutions  addressing  the  problems  resulting  from  the  e-commerce 
transactions and the lack of appropriate resources of customs authorities to properly carry out 
their  tasks,  as  well  as  considering  moving  from  the  current  transaction-based  model  to  a 
system-based approach for reliable economic operators. 

3.2 Public Consultation 

The  public  consultation  was  launched  on  20  July  until  19  September  2022,  simultaneously 
with the call for evidence. It remained open for a total of eight weeks and 5 days. The shorter 
period  compared  to  the  standard  12-week  duration  was  justified  by  the  limited  time  frame 
within  which  the  initiative  has  to  be  finalised  due  to  its  politically  sensitive  character  and 
relative urgency.  

A questionnaire was available online in  all official EU languages and promoted via internet 
and  social  media  among  the  members  of  trade  associations,  relevant  national  authorities, 
citizens and other stakeholders. It consisted of 38 questions, divided into five sections. These 
focused on respondents’ profiles, their interactions with customs, views on the customs union, 
on  the  issues  at  stake  and  on  the  potential  policy  options  and  related  impacts.  A  factual 
summary report will be published on Have Your Say and DG TAXUD website. 

The  survey  received  192  responses.  The  majority  (80.4%)  of  respondents  to  the  survey 
(30.9%, 
represented  business 
associations),  predominantly  in  the  following  sectors:  industrial  production,  customs 
representation,  logistics/carriers,  import/export  of  goods.  Most  replies  were  given  by  large 
organisations  (34.5%),  followed  by  micro  (25.3),  medium  (14.9%)  and  small  (14.4) 

(49.5%,  companies)  or 

interests,  directly 

indirectly 

(132) Central Electronic System of Payment (CESOP) (europa.eu) 

91 

 
 
                                                      
enterprises.  EU  citizens  represented  10.3%  of  respondents,  while  organised  civil  society 
(NGOs,  consumer  organisations,  trade  union)  represented  4.6%  of  respondents.  Only  one 
public authority at regional level and one non-EU citizen participated to the consultation. The 
countries of origin can be seen in the chart below.  

Figure 1: country of origin of the respondents to the public consultation 

General results 

Interactions  with  customs:    77.2%  of  respondents  are  involved  in  customs  operations  or 
procedures daily or almost daily; among them, a vast majority of respondents (76.7%), largely 
business associations or companies, deal regularly with multiple customs offices or Member 
States.  They  find  that  Member  States  execute  similar  operations  in  different  ways,  for 
example on customs valuation, frequency and level of controls, timing of clearance procedure, 
approach  to  representation  and  to  facilitations,  interpretation  of  basic  definitions  and 
application  of  UCC  simplifications.  The  customs  issues  that  create  most  administrative 
burden to the respondents are: classification of goods (62.4%), determining their origin (58.7), 
adapting to  IT environment to manage customs processes  (51.3%), determining the value of 
goods (50.2%), getting or handling supporting documents for import or export (44.9%). 

Overall  views  on  the  customs  union:  respondents  were  asked  how  well  customs  is 
contributing  to  achieving  a  set  of  objectives,  most  of  which  corresponding  to  its  mission. 
Results presented in  the chart below show that customs are doing overall well but  there are 
certain  areas  in  which  the  perception  is  negative,  such  as  for  customs  not  keeping-up  with 
new business models and technologies, not combatting pollution, not ensuring supply chain 
due  diligence  and  promoting  EU  values  internationally  (e.g.  human  rights,  environmental 
protection),  and  relatedly  not  combatting  enough  child/forced  labour  or  inhuman  working 
conditions in the international supply chain. 

92 

 
 
 
 
Figure 2: contribution of the customs union to achieving a set of relevant objectives 

How well is customs contributing to achieving the following objectives?

Ensuring the protection of the EU’s financial interests (collection of 
duties and taxes)

Ensuring compliance with intellectual/industrial protection rules 
(IPR, counterfeiting…)

Ensuring compliance with EU product rules (animal and plant
health, product safety, environment protection, etc

Enforcing sanctions and export restriction for dual use goods (use
for civilian and military purposes) following the Russian invasion…
Coping with the consequences of the withdrawal of the UK from the
EU (Brexit)
Responding to the Covid-19 pandemic and its social and economic
consequences

Preventing the financing of criminal activities (e.g. terrorism)

Combatting smuggling
Ensuring supply chain due diligence and promoting EU values
internationally

Combatting forced labour, child labour and working conditions in
international supply chains

Combatting global pollution (e.g. plastic waste)

Keeping up-to-date with new business models and technologies

Supporting circular economy and the sustainable use of resources
Coping with global geopolitical developments (e.g. new trade
agreements, commercial disputes, punitive tariffs, etc.)
Protecting EU industrial production and employment from
competition of unfair trading practices

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

very well

quite well

fairly well

not very well

not well at all

don't know

no answer

As  for  the  needs  and  priorities  of  respondents  regarding  a  possible  reform  of  the  customs 
union,  customs  acting  as  one  is  largely  seen  at  the  most  important  (79.58%  of  replies), 
followed  by  simpler  rules  for  simpler  processes  (64.92%)  and  more  effective  protection 
against non-financial risks (better enforcement of EU safety, environmental and IPR rules on 
imported goods, for 59.69%).  

Views  on  the  issues  at  stake:  respondents  were  asked  about  specific  issues  that  could  be 
addressed by a customs reform to solve current challenges: 

-  Reduce administrative burden: a very large majority of respondents (almost 80%) replied 
that they see the need to simplify how information is provided to customs so as to reduce 
their administrative burden and formalities.  

-  Customs’ role in enforcing prohibitions and restrictions: a large majority (68.1%) finds it 
easy to buy online non-compliant goods from third countries. More respondents (46.8%) 
face competition from imported goods that do not respect EU rules than those who do not 
face such competition (41.5%). Probably for this reason, 68.1% see the  need for a more 
efficient framework for cooperation between customs and other authorities responsible for 
market surveillance, law enforcement, anti-fraud, for sharing data on the products entering 

93 

 
 
or  exiting  the  EU.  However,  56.9%  think  that  no  additional  information  on  imported 
goods  should  be  required  by  customs,  although  this  may  be  necessary  to  better  tackle 
illicit trade. 

-  Customs’  contribution  to  green  agenda:  93  respondents  replied  to  the  open  question 
asking  about  potential  measures  for  customs  to  contribute  to  reaching  the  EU  Green 
Deal’s objectives. These include reduction/elimination of import VAT and customs duties 
on  sustainable  or  recycled  goods,  creation  of  specific  CN  codes  to  identify  such  goods, 
full  digitalisation  for  reducing  the  use  of  paper  documents,  implementation  of  CBAM, 
facilitations for operators  that voluntarily  reduce their carbon footprint in  their activities 
(in 
favouring  multimodal 
infrastructure  and  reducing  waiting  times  at  customs  control  points  to  reduce  fuel 
consumption and emissions), priority to tackling wildlife trafficking. 

this  concerns  phasing-out 

transport, 

transport, 

road 

Views on the potential policy options and related impacts: among the policy changes and 
mechanisms  that  could  be  included  in  a  reform  of  the  customs  union,  respondents  strongly 
agree to include the following, in order of preference: 

1.  Simplifying customs formalities for reliable and trusted traders established in the EU 

(69.47%); 

2.  Enhancing  co-operation  between  customs  and  non-customs  authorities  (55.79%),  in 
information  exchange  (65.97%),  operational  coordination 

particular  regarding 
(59.47%) and improved enforcement of prohibitions and restrictions (47.37%); 

3.  A new partnership with trusted traders and other competent authorities for better risk 

management, including reinforced advance cargo information (53.16%); 

4.  Providing  for  an  EU-level  customs  information  environment  (54.21%),  in  which  the 
most  favoured  features  would  be  a  simplified  provision  of  data  (enabling  re-use  of 
data, avoiding duplications, etc.) for 73,16% of replies, data management capabilities 
(64.21%)  and  the  concept  of  ‘single  window’  for  the  handling  of  non-customs 
formalities (63.16%); 

5.  Adapting  customs 

for  example  by 
to  e-commerce 
strengthening  supervision  of  business-to-consumer  flows  and  liability  of  involved 
actors for all fiscal and non-fiscal rules (52.11%); 

transactions, 

legislation 

6.  35.79% strongly agree about reforming the EU customs governance to provide for an 
EU layer (with another 23% that tend to agree, about 4.5% disagree, the rest did not 
provide an opinion); but if such EU layer would exist, it should be tasked in particular 
with  the  training  of  customs  officers  (59.47%),  IT  management  (51%),  financing  of 
customs equipment (44.74%) and EU crisis response (41.5%); 

7.  Integrating  the  green  agenda  in  the  customs  agenda  should  absolutely  be  part  of  a 

reform only for 31%, while 27.8% tend to agree to this and 6.31% disagree. 

The following chart shows the impacts of such potential policy measures as perceived by the 
respondents. 

94 

 
 
 
Figure 3: perceived impacts of the policy measures proposed 

Perceived impacts of the policy measures proposed  

Providing for a single EU customs information environment

Partnership with reliable and trusted traders

Better cooperation of customs and non-customs authorities

Reforming the EU customs governance to provide for an EU
layer

Adapting customs legislation to e-commerce transactions

Integrating the green agenda in the customs agenda and
traders behaviours

0%

20%

40%

60%

80%

100%

High positive impact

Limited positive impact

No impact

Limited negative impact

High negative impact

No answer

Results by main stakeholder category 

a)  Business associations, organisations and companies (156 respondents) 

The most important needs identified by the business respondents regarding a possible reform 
of the customs union are for customs authorities acting as one (very important for 80.6% of 
respondents),  for  having  simpler  rules  for  simpler  customs  processes  together  with  more 
effective sharing of information and data between national customs administrations and other 
authorities  (both,  very  important  or  quite  important  for  almost  85%).  Regarding  the  latter, 
however,  almost  59%  of  them  are  against  including  additional  information  on  specific 
products  or  EU  standards  in  customs  processes.  Better  adaptation  of  customs  to  global, 
commercial or political developments and crisis is also a very important need for almost 46%, 
quite important for 41.2%.  

Business  respondents  consider  that  customs  authorities  are  contributing  overall  well  to 
achieving most of the objectives related to its mission. However, in their opinion customs is 
not  doing  very  well  or  not  well  at  all  in  keeping  up  to  date  with  new  business  models  and 
technologies (63%), in supporting circular economy and sustainable use of resources (40%), 
and also in promoting EU values internationally in the supply chains and in combatting forced 
labour, child labour and working conditions therein (both areas 36%). 

There  is  no  significant  opposition  to  any  of  the  policy  measures  proposed  as  potential 
elements of a customs reform. Several measures received a very large support among business 
respondents: i) simplifying customs formalities for reliable and trusted traders established in 
the EU (75 % strongly agree); ii) enhancing co-operation between customs and non-customs 
authorities  via  information  exchange  (67.5%  strongly  agree)  and  operational  coordination 
(61.7%  strongly  agree);  iii)  providing  for  an  EU-level  IT  customs  environment,  based  on 

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simplified  provision  of  data  (79.2%  strongly  agree),  data  management  capabilities  (69.4% 
strongly agree), single window concept for handling non-customs formalities (67.5% strongly 
agree; iv) a new partnerships with trusted traders (strongly agree 53.9%, tend to agree 26.6%); 
v) an EU layer in customs governance dealing in particular with training of customs officers 
(strongly  agree  60.3%)  and  IT  management  (strongly  agree  54.5%,  tend  to  agree  23.3%). 
Despite  their  opinion  that  customs  is  not  doing  enough  in  the  environmental  area,  the  least 
strong support was for integrating the green policies objectives in the customs agenda (only 
around 28% strongly agree to this, 30% tend to agree and 21% are neutral). 

The  impacts  of  the  policy  measures  proposed  would  have  overall  a  positive  effect.  The 
highest positive impacts for business respondents would come from  a single EU customs IT 
environment (67.5% of replies), the new partnership with reliable and trusted traders (65.6%) 
and better cooperation with other authorities (61.7%). 

b)  EU citizens and consumers (21 respondents) 

The most important needs of EU citizens and consumers regarding a possible reform of the 
customs union are customs authorities acting as one (very important for 81% of respondents), 
more effective sharing of information and data between national customs administrations and 
other authorities enforcing product requirements on imported goods (very important for 76%), 
simpler  rules  for  simpler  customs  processes  (very  important  for  71%),  more  effective 
protection  against  non-financial  risks,  e.g.  better  enforcement  of  EU  safety,  health, 
environmental  and  IPR  rules  on  imported  goods  (very  important  for  66.6%)  and  more 
effective tools to tackle smuggling, illicit or fraudulent trade (very important for 62%). 

Overall,  citizens  and  consumers  think  that  customs  is  contributing  well  to  achieving  its 
objectives.  Similarly  to  business  respondents,  citizens  consider  that  the  less  positive 
contribution of customs is in keeping up-to-date with new business models and technologies 
(overall  not  well  for  almost  43%),  in  supporting  circular  economy  and  sustainable  use  of 
resources and in combatting forced labour, child labour and working conditions therein (both 
areas overall not well for 38%), in promoting EU values internationally in the supply chains 
(overall  not  well  for  28.5%)  and  in  ensuring  compliance  with  EU  specific  requirement  on 
products (overall not well for around 28%). 

There  is  no  significant  opposition  to  any  of  the  policy  measures  proposed  as  potential 
elements  of  a  customs  reform.  Citizens  and  consumers  expressed  large  support  for  the 
following measures  (strongly agree to  include): adapting customs legislation  to  e-commerce 
flows  (81%),  enhancing  co-operation  between  customs  and  non-customs  authorities  via 
improved  enforcement  of  prohibitions  and  restrictions  and  information  exchange  (both 
71.4%),  operational  coordination  (61.9%),  simplified  provision  of  data  (71.4%)  and  single 
window  concept  for  handling  non-customs  formalities  (61.9%)  in  the  new  EU  customs  IT 
environment, a new partnerships with trusted traders (66.6%). Finally, if a new EU layer for 
customs  governance  introduced,  this  category  of  respondents  think  it  should  be  tasked 
primarily  with  providing  training  of  customs  officers  (66.6%),  financing  of  customs 
equipment (52,4%) and EU-level risk management (47,6%). 

The impacts of the policy measures proposed would have overall a positive effect on citizens 
and  consumers.  The  highest  positive  impacts  for  them  would  result  from  better  cooperation 
with  other  authorities  and  the  adaptation  of  customs  legislation  to  e-commerce  flows, 
followed by a new customs governance based on an EU layer tasked with a broader mandate.  

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The least positive effect would come from integrating the green agenda in customs rules and 
policy. 

3.3 Feedback from targeted consultations 

In  addition  to  the  feedback  on  the  call  for  evidence  and  the  public  consultation,  a  range  of 
targeted consultation  activities were organised during the work on the impact  assessment to 
gather views of expert stakeholders This included discussions in the context of the Reflection 
Group and of the Trade Contact Group. (133) 

a)  The Reflection Group, composed by the directors general of the Member States customs 
administrations  and  steered  by  the  Commission,  held  three  meetings  to  discuss  specific 
topics related to a customs reform. 

The first meeting (15/6/2022) was dedicated to discussing two topics. On the first (a new 
partnership  with  the  economic  operators/possibility  of  introducing  a  system-based 
approach  for  customs  processes),  most  Member  States  were  in  favour  of  some  kind  of 
action in this area and to alleviate the burden of data provision, in particular for reliable 
traders,  while  signalling  the  need  for  standardisation  and  legal  certainty.  Many  Member 
States saw the system-based approach option as an evolution of the AEO programme and 
of  current  simplifications,  but  some  of  them  doubted  its  practical  feasibility.  There  was 
general  support  for  increasing  responsibility  and  liability  of  e-commerce  platforms  and 
obtaining data from them to better identify consignments for controls. On the second topic 
(strengthening customs supervision and risk management), there was general support for 
introducing an EU layer of risk analysis, including via a specific EU body, as well as for 
achieving the full implementation and use of ICS2. The use of e-commerce data was seen 
as a key element for improving risk analysis, as well as the need for data to be processable 
in real time by customs (not only viewable). 

The second  meeting (6/7/2022) focused  firstly  on discussing an  enhanced cooperation 
framework  between  customs  and  other  authorities,  in  a  context  where  customs 
authorities  deal  with  a  large  and  increasing  range  of  prohibitions,  restrictions  and 
regulatory  compliance  issues  derived  from  non-customs  legislation.  The  participants 
emphasised  the  central  position  of  customs  in  goods  supervision  in  relation  to  the 
increased importance of non-fiscal tasks, on one side, and citizen’s expectations for more 
protection,  on  the  other.  Many  suggested  the  need  to  integrate  customs  aspects  and 
concerns in the early making of sectoral legislation and for better co-ordination among the 
EU actors involved, to avoid e.g. problems of interpretation when different formalities and 
definitions  are  formulated  in  different  pieces  of  legislation.  Regarding  data,  some 
participants stressed the need for an EU model for control of prohibitions and restrictions, 
since current experiences in data sharing with authorities such as market surveillance and 
law  enforcement  only  exist  at  national  level.  It  was  suggested  that  by  putting  together 
available  customs  data  (ICS2,  Surveillance,  H7  declarations  etc.)  it  could  be  possible  to 
perform centralised risk management (common risk analysis, joint analytics capabilities) 
so as to support Member States and to facilitate appropriate sharing and co-operation with 
other agencies for operations. 

(133) See Annex 1 section 4. 

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During this meeting, possibilities to evolve towards ‘green customs’ were also discussed. 
Regarding the possibility to reduce the environmental impact of customs processes, it was 
suggested  by  some  participants  to  impose  environmental  obligations  on  traders  (for 
example by introducing a pre-certification model for trusted traders to foster compliance 
with  prohibitions  and  restrictions).  Other  suggestions  related  to:  i)  the  assessment  by 
customs  of  the  environmental  impact  of  some  procedures,  such  as  inward  and  outward 
processing,  re-exportation  and  destruction  of  goods,  ii)  abolishing  the  customs  duties 
threshold  in  e-commerce  to  avoid  multiple  consignments,  iii)  exploiting  free  trade 
agreements and lower duty rates for green products to support the green transition, while 
avoiding protectionist measures. 

The third meeting of the Reflection Group (21/09/2022) focused on ‘a shift in the data 
paradigm’ and ‘governance’. There was convergence that data needs to be at the centre 
of  customs’  operations  to  make  the  customs  union  fit  for  the  digital  age.  All  Member 
States  also  recognized  the  need  to  fully  implement  the  UCC  IT  systems.  Most  Member 
States preferred a centralised over a decentralised model for implementing a potential new 
data-driven approach. For those Member States, the preferred option would be for a new 
EU layer to manage the central IT environment rather than the Commission. E-commerce 
was  mentioned  by  all  Member  States  as  main  priority  to  focus  on  in  this  regard.  Most 
participants  emphasized  an  additional,  operational  risk  management  layer  at  EU  level  is 
needed and argued it should have optimal access to and availability of data to be efficient 
and effective. If Member States get  access to these data, their national risk management 
would also be enriched.  

Many Member States considered more centralisation in areas like data management, risk 
management and training important. Broad support was also expressed for organising and 
coordinating joint customs operations and controls at EU level, creating national/regional 
centres  of  excellence,  and  exploring  possibilities  for  intra-EU  mobility  programmes  for 
customs  staff.  While  acknowledging  the  customs  union  needs  to  ‘act  as  one’  and 
legislation  needs  to  be  implemented  in  a  harmonized  way,  several  Member  States 
highlighted  that  the  desired  more  centralised  approach  in  several  areas  should  have  the 
necessary  granularity  that  allows  for  some  operational  flexibility  to  deal  with  specific 
circumstances. 

Based  on  the  very  good  results  of  the  CELBET  expert  team,  focused  on  enhanced 
operational  cooperation  between  Member  States  at  the  eastern  EU  land  border,  several 
Member  States  considered  it  useful  to  expand  this  type  of  cooperation  to  other  border 
types and transport modes. Member States participating in CELBET however emphasized 
the  high  administrative  burden  that  comes  with  coordinating  and  managing  the  expert 
team is not sustainable in the long run and a more permanent structure would be needed to 
host CELBET activities. While a relatively small number of Member States were sceptical 
about  the  need  to  create  a  new,  operational  EU  layer  in  the  form  of  an  agency  between 
Member  States  and  the  Commission,  many  others  clearly  expressed  support  for  such  an 
approach. 

b)  The Trade Contact Group met on 12 July 2022 to discuss the positions and suggestions 
of  the  trade  associations  and  organisations  regarding  potential  avenues  for  reforming 
customs legislation. Following a presentation of the recommendations issued by the Wise 
Persons Group, the Commission presented the main elements for a potential reform of the 
customs  legislation  (a  new  approach  to  data  for  better  customs  supervision,  a  system-
based  approach  to  customs  operations  for  trusted  traders,  reinforced  risk  management 

98 

 
 
including in cooperation with non-customs authorities, a new governance for the customs 
union). The main outcome of the discussion can be summarised as follows: 

  General  support  for  the  introduction  of  a  system-based  approach  for  trusted  traders, 

with one suggestion to build it on an improved AEO programme.  

  Positive views on the new approach on data management, since the rapid expansion of 
e-commerce  and  increase  in  transactions  is  not  manageable  with  current  customs 
model.  Concerns  about  the  new  approach  relate  to  i)  the  need  for  a  link with  the  IT 
systems of economic operators and with the customs declarations system, which is not 
always  possible,  ii)  ensuring  the  quality  of  information  provided  by  the  different 
traders involved in the supply chain in the absence of a single source that has all the 
requested data, iii) need to align customs rules for data provision with those in other 
legislation, e.g. maritime law. 

  Governance: mixed views on the creation of an EU layer/agency, which for some trade 
representatives  can  turn  into  an  additional  administrative  burden  and  create 
duplications  with  the national  authorities, while for other an agency should focus on 
the harmonisation of legislation. 

  Other topics: the current UCC does not allow for flexible solutions in case of crisis or 

emergency situations. 

3.4 Ad hoc contributions 

Further to the meeting of the Trade Contact Group on 12 July 2022, 10 of its members sent 
individual  ad-hoc  contributions  on  this  initiative,  while  a  wide  majority  also  participated  to 
the  public  consultation  and  call  for  evidence.  These  are  EU-level  stakeholders  representing 
the  following  interests:  national  industry  and  employers'  organizations,  customs  logistics 
operators,  express  couriers,  customs  representatives  and  brokers,  alcohol  traders,  tobacco 
manufacturers,  retail  and  wholesale  sector  companies,  national  chambers  of  industry  and 
commerce,  ship  brokers  and  agents,  semi-conductor  industry,  a  consumers’  association. 
Contributions include positions and reactions to the ten recommendations issued by the Wise 
Persons Group, which are linked to the present initiative but not exactly corresponding to the 
scope and content of the proposal for a customs reform.  

4.  TAKING ACCOUNT OF FEEDBACK RECEIVED 

A concerted effort was  made to ensure that the views and concerns of affected stakeholders 
were  carefully  considered  throughout  the  impact  assessment  exercise.  This  was  particularly 
the  case  for  the  analysis  of  the  problem  and  the  development  and  analysis  of  the  policy 
options,  where  the  arguments  presented  in  the  impact  assessment  are  broadly  in  line  with 
stakeholder views. Regarding potential solutions proposed by stakeholders, namely in the call 
for  evidence  and  the  public  consultation,  only  those  falling  into  the  scope  of  the  customs 
legislation were considered as relevant in the analysis of this impact assessment. 

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Annex 3 - Who is affected and how? 

Note: this section provides summary information in the format required by Better Regulation 
standards. Please note this relies on more detailed information on specific topics contained in 
Annexes 5-10. Annex 9 in particular provides a detailed cost-benefit analysis. 

1.  PRACTICAL IMPLICATIONS OF THE INITIATIVE 

1.1 EU Services 

As part of reform,  there  would be a significant  change on how the European Commission’s 
customs  IT  is  handled.  The  Authority  would  build,  implement  and  manage  the  new  EU 
Customs  Data  Space.  It  would  take  care  of  technical  development,  application  and  service 
delivery,  user  support,  data  governance  and  security  and  business  continuity.  It  would  take 
over from the Commission the bulk of development and business operation of existing trans-
EU IT systems.   

The  Commission’s  current  role  in  supporting  customs  to  customs  and  cross-authority  co-
operation, operational support and co-ordination and operational  capacity-building would be 
largely replaced and deepened by the Authority. The Commission would retain its policy and 
legislative  roles  and  its competences  under  the  Treaties.  It  would  continue  to  bring  forward 
legal  measures  where  needed  to  enable  the  sharing  of  data,  to  support  a  co-operation 
framework  with  other  policies,  to  establish  some  common  risk  criteria,  to  monitor  the 
implementation  of  the  legislation,  and  to  take  necessary  technical  measures  (for  example, 
classification  regulations  and  TARIC  measures).  The  Authority  would  help  to  develop  and 
streamline (cross-authority) strategies , including building intelligence, innovating, preparing 
for crisis and supervising together. EU analytics and synchronised operations improve policy 
performance for all co-operating services. 

The Authority would use the new Data Space to deepen and broaden the EU-level effort on 
key  activities  including  risk  management,  training,  performance  monitoring  and  evaluation 
(bringing  its  critical  mass,  focus  and  organisational/co-ordination  mandate  to  the  key  tasks 
that  need  to  be  performed  ‘as  one’).  The  Authority  would  also  monitor  the  common 
implementation  of  simplifications  for  traders,  including  those  granted  the  Trust  and  Check 
approach,  and  prepare  mini-applications  to  support  trade  facilitation  services,  as  well  as 
managing  the  overall  trade  interface  with  the  customs  union.  Certain  activities  within  these 
fields are currently not carried out at all or only to a very limited extent.  

The  Authority  would  thus  play  a  key  (and  deeper)  role  in  achieving  a  more  effective  and 
uniform implementation of the customs rules and processes. It would bring a genuine strategic 
capability.  This  would  help  deliver  EU  protections  and  facilitations  systematically  to  the 
benefit of citizens, businesses and all EU policies and services concerned. The EU would in 
addition benefit from better prevention of revenue loss (a significant reduction in the custom 
gap),  and  from  the  increased  collection  of  customs  duties  arising  from  the  removal  of  the 
EUR 150 threshold. 

100 

 
 
1.2 Member States customs administrations 

The  Authority  would  take  over  the  biggest  part  of  the  IT  development,  maintenance  and 
management of the EU Customs Data Space. Therefore, the customs IT workload in Member 
States would significantly decrease over the years, as they would only keep national specific 
developments.  

Customs data analytics and risk analysis would be performed at central level in the Authority. 
National  analysis would  continue to  contribute to common analysis  including  in  the area of 
security  screening.  The  central  capacities  could  also  be  used  to  apply  national  targeting 
routines. Data exchange between the national environments and the EU Customs Data Space 
would ensure the link with operations in the field is maintained and that Member States would 
be  able  to  re-use  data  relating  to  their  customs  operations  in  their  national  processes  if 
necessary. A long-term data strategy for customs could be better organised and pursued.  

Member States would gain from a reduction in full-time-equivalent staff requirements due to 
common execution of tasks in the Authority, particularly in the areas of risk management, IT 
and overall customs management functions. This does not require a reduction in numbers as 
such - national customs administrations would be able to use their resources more efficiently. 
In  the  case  of  AEO  traders  the  emphasis  would  shift  more  towards  client  management  and 
auditing  rather  than  physical  border  controls  and  customs  declaration  processing  (with 
additional programme management support from the Authority and facilitated on an EU basis 
through  functionality  in  the  EU  Customs  Data  Space).  As  the  Authority  would  provide 
operational  support  and  coordination  and  would  invest  in  operational  capacity  building, 
training, equipment and working methods would require less investments at national level. 

Member States would benefit from the better delivery of customs and EU policy value. The 
shared interests in protection of citizens, consumers, trade and business reflected in common 
policies  on  product  standards,  security,  safety,  health,  etc.  would  be  achieved  more 
effectively, efficiently and systematically across all points of entry, reducing the possibilities 
for  illicit  trade  to  circumvent  enforcement  in  one  Member  State  by  finding  entry  through 
another external border.  

The  Member  States  would  also  benefit  from  better  prevention  of  revenue  loss  (a  greater 
reduction in the custom gap) and from the increased collection of customs duties arising from 
the removal of the EUR 150 threshold.  

1.3  Businesses and Trade 

Operators  would  benefit  significantly  from  a  fundamental  change  in  the  customs  processes, 
which would be delivered directly through the EU customs Data Space. 

All traders would benefit from simplification and rationalisation of the steps in the customs 
processes.  The  number  of  data  provision  points  is  reduced  and  the  data  is  provided  to  one 
single  EU  interface  instead  of  through  27  national  interfaces  and  processes.  Data  can  be 
provided  in  advance  and  re-used  (instead  of  being  repeatedly  provided).  The  data 
requirements  are  rebalanced  to  better  fit  commercial  practices  (data  is  in  principle  required 
from  those  who  are  best  place  to  give  it,  data  is  accepted  in  multiple  formats,  and  the 
declarant  role is  removed). The Authority  reinforces cooperation among  customs  authorities 
also  at  the  border,  on  the  ground,  and  supports  the  uniform  implementation  of  simpler 
processes. 

101 

 
 
Some  additional  information  would  be  provided  (notably  the  manufacturer  of  the  goods). 
However the effort required to  provide additional information  is more than compensated by 
the simplification and reduction in customs processes. 

Improvements in customs targeting would improve protection of legitimate businesses against 
non-compliant supply chains and supply chain security threats, and reduce unfair competition, 
through  better  enforcement  of  regulatory  measures.  This  improves  protection  of  jobs, 
innovation, and investment. Moreover, the resilience of supply chains in crisis scenarios (such 
as disease outbreaks or security incidents) would be strengthened significantly by providing 
for immediate, specific and uniform targeting of risky flows while minimising the scope and 
scale of disruption, and by maintaining crisis-readiness on a 24/7/365 basis, underpinned by 
long-term co-operation with other relevant authorities.  

Trusted  Traders  would  benefit  from  an  improved  partnership  with  customs.  These  traders 
would  meet  conditions  similar  to  current  AEO  requirements  and  would  also  provide 
additional transparency by systematically making data available to customs systems. This data 
could  be  re-used  by  carriers  in  advance  cargo  information  processes,  and  the  goods  flows 
could  be  ‘self-released’  on  arrival  (in  principle  the  goods  would  keep  moving,  with  the 
advance cargo processes providing the means for customs to intervene if that were to become 
necessary).  Trusted  traders  would  benefit  from  fewer  and  more  targeted  customs  controls, 
would generally receive advance warnings and as far as possible have checks and formalities 
deferred  to  convenient  locations.  In  so  far  as  agreed  with  other  authorities,  some  non-fiscal 
checks  could  also  be  moved  away  from  the  border  and  performed  by  the  Trusted  Trader. 
Guarantee  requirements  would  be  reduced.  While  these  Traders  will  provide  more  direct 
information  to  customs,  this  will  be  curated  from  their  own  commercial  records  and  will 
simplify their overall compliance task compared with the baseline in terms of time spent on 
declarations (and also in terms of supply chain interventions and controls by customs). 

For  e-commerce  the  removal  of  the  customs  duty  exemption  threshold  would  mean  more 
customs  information  would  have  to  be  provided  –  although  data  is  already  provided  on  all 
imported  goods  according  to  the  new  VAT  e-commerce  rules  as  from  July  2021.  However, 
experience shows that the vast majority of e-commerce imports (around 90% of declarations) 
is declared with a reduced dataset that supports primarily basic VAT needs. This data set is 
narrow in scope and is not sufficient to support a full risk analysis for all relevant risks. The 
EU  Customs  Data  Space  would  provide  a  single  interface  that  would  facilitate  both  the 
provision  of  information  from  the  e-commerce  intermediaries  and  the  processing  of  that 
information for customs authorities.  

Compared with the baseline for e-commerce, postal operators and couriers would benefit from 
a reduced administrative burden. As regards e-commerce intermediaries, these may already be 
indirectly bearing at least part of the carriers’ cost for filing customs declarations. By directly 
dealing with customs compliance, the platforms will benefit from the fact that they will offer 
a final price to their clients and will most likely see a reduction in the complaints and returns 
motivated  by  unexpected  customs  administrative  costs  at  the  border,  reducing  the  friction 
currently  experienced  in  their  supply  chains.  Overall,  the  preferred  option  should  result  in 
lower  administrative  costs  for  economic  operators,  particularly  at  import.  It  would  almost 
eliminate  the  need  for  launching  the  current  “internal  transit”  procedure  and  the  associated 
declarations in cases where goods are moved from the Member State of entry to the Member 
State of release.  

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1.4 SME Test – Summary of results 

Specific attention was given to the potential impact on Small and Medium-sized Enterprises 
(SMEs) (see also section 6.8 of the Impact Assessment report): 

(1) Preliminary assessment of businesses likely to be affected  

Economic  operators  of  all  sizes  can  be  in  contact  with  customs  and  are  in  theory  thus 
impacted by a reform of the customs union. 

As  an  indication,  only  among  the  companies  having  applied  for  the  Authorised  Economic 
Operator  (AEO)  scheme,  69.8%  identify  as  either  micro-,  small  or  medium-sized  enterprise 
(SME).  In  addition,  those  SMEs  operators  not  benefitting  from  the  AEO  scheme,  would 
nevertheless enjoy the simplification measures applicable to all traders, such as pre-release of 
goods, single submission of data and data re-use. 

(2) Consultation with SMEs representatives 

In the public consultation, the Commission has received more than 50 replies from SMEs and 
business associations representing SMEs. The questionnaire provided was the same across the 
different  group of business respondents, regardless the size.  Additionally, a large number of 
contributions  from  such  entities  has  been  received  in  the  context  of  the  Call  for  Evidence. 
About 29% of the respondents identify as AEOs.  

A large part of the respondents report daily or almost daily interaction with customs (80.4%). 
Many (78.4%) are also in the situation of dealing regularly with more than one customs office 
or  Member  State.  As  most  important  issues  causing  administrative  burden  for  SMEs,  the 
following were identified: 

  classification of goods, determining the origin, valuation of goods; 

  getting or handling documents for import or export (certificates, supporting 

documents, permissions, etc.); 

  adapting to IT environment to manage customs processes. 

As  most  important  needs  and  priorities  regarding  a  possible  reform  of  the  customs  union, 
respondents mentioned: 

1.  Customs  authorities  in  EU27  acting  as  one  (uniform  application  of  rules  and  of 

customs controls, no divergences, no weak border points): 84.3%. 

2.  Simpler rules for simpler customs processes, less formalities (including for goods sold 

online): 74.5%. 

3.  More  effective  sharing  of 

information  and  data  between  national  customs 
administrations  and  other  authorities  enforcing  product  requirements  on  imported 
goods: 62.7%. 

A  large  majority  (82.4%)  agreed  to  the  need  to  simplify  how  information  is  provided  to 
customs and to reduce administrative burden and formalities. 

 Policy measures that received the highest support rates from SME respondents were: 

1.  Simplifying customs formalities for reliable and trusted traders established in the EU by 

103 

 
 
making  more  use  of  commercial  information  rather  than  of  burdensome  administrative 
requirements (72.6%) 

2.  Enhance  co-operation  between  customs  and  non-customs  authorities  (notably  Market 
Surveillance  Authorities,  Law  Enforcement  Authorities,  Tax  Agencies)  (overall  56.8%) 
through for example: 

  information exchange (68.6%); 

  operational coordination (62.7%). 

3.  Providing for a fully-fledged EU customs information environment, (overall 52.9%) with 

emphasis on, for example: 

  simplified  provision  of  data  (enabling  re-use  of  data,  avoiding  duplications, 

etc.) (76.4%); 

  streamlined handling of non- customs formalities (single window) (64.7%); 

  data management capabilities (62.7%). 

(3) Measurement of the impact on SMEs 

The  reform  of  the  customs  union  is  not  expected  to  generate  any  adverse  effects  on  SMEs. 
The key  elements  of the reform are in  line with  SMEs expectations and priorities, as stated 
under (2), in particular the emphasis on simpler processes.  

The  most  significant  change  will  be  the  reform  of  customs  procedures,  which  will  bring 
benefits  in  form  of  simplification  for  all  economic  operators,  such  as  pre-release  of  goods 
under  certain  circumstances,  clearer  attribution  of  responsibilities,  rebalanced  data 
requirements based on the role of the operator in the supply chain, or single submission and 
data re-use. Moreover, AEO traders having an electronic system interacting with the customs’ 
systems  on  a  constant  basis  (offering  full  visibility  over  their  supply  chain  and  commercial 
records)  will  be  able  to  self-release  their  goods  and  calculate  and  pay  duties  periodically, 
without submitting transaction-based customs declarations per consignment.  

In more general terms, it needs to be underlined that many EU businesses, independently of 
their  size,  have  an  interest  in  a  well-performing  and  improving  customs  union,  as  they  are 
confronted with unfair competition from outside the EU, when goods not complying with EU 
rules  and  standards  are  imported  and  enter  the  EU  market.  The  use  case  on  toy  safety, 
presented  in  Annex  9,  provides  a  very  relevant  example,  as  the  vast  majority  of  economic 
operators in that sector are SMEs. 

The reform is thus expected to have a positive impact on businesses, including SMEs, not to 
create  additional  administrative  burden.    SMEs  would  benefit  from  the  overall  cost  savings 
estimated  in  this  assessment  either  directly,  where  they  complete  customs  formalities 
themselves, or indirectly, where their customs formality service providers are able to offer a 
lower-cost service. As figures were not available for the allocation of customs formality costs 
between SMEs and non-SMEs, it was not possible to quantify the specific impact on SMEs. 
Subject  to  the  availability  of  relevant  indicator  data,  SME  participation  in  the  reformed  customs 
processes would be analysed through the Data Space. 

4) Assess alternative options and mitigating measures 

n/a, as no particular adverse impact on SMEs could be identified. 

104 

 
 
 
1.1 Citizens – Consumers 

The  removal  of  the  EUR150  customs  duty  threshold  may  create  a  slight  upwards  price 
pressure  for  consumers  of  goods  worth  below  that  amount.  Despite  that  the  liability  for  the 
collection  and  payment  of  customs  duties  will  in  most  case (134)  lie  with  the  e-commerce 
intermediaries  as  ‘deemed  importers’,  the  additional  costs  might  be  passed  on  to  the 
consumers.  However,  the  evidence  collected  suggests  that  this  would  not  necessarily 
discourage consumers from buying third country goods on line. Consumers’ replies made in 
the framework of the exploratory consultation (135) carried out in the framework of the study 
on  ‘an  integrated  and  innovative  overhaul  of  EU  rules  governing  e-commerce  transactions 
from third countries from a customs and taxation perspective’ suggest that for about 40% of 
the  respondents  a  price  increase  of  about  5%  will  not  at  all  change  their  incentive  to  order 
online from outside the EU, provided that the increase in the price can be paid at  checkout. 
Nevertheless, in case the increase would be collected separately, for example at the delivery 
of  the  parcel,  92%  of  the  respondents  stated  that  they  would  purchase  less  from  foreign 
platforms, among them 40% would even stop ordering goods from a foreign platform.  

On  the  other  hand,  simplification  and  stabilisation  of  processes  will  increase  supply  chain 
efficiency,  and  the  impact  on  costs  and  prices  will  be  determined  by  competitive  factors. 
Citizens and consumers will benefit from more  transparent and predictable processes for 
e-commerce purchases from outside the EU and fewer surprise requests for duty payment and 
for logistics services charges for handling these as well as visits to post-offices compared with 
the  baseline,  alleviating  the  current  experience  of  surprise  charges  and  delays.  This  is 
important  because  longer  delivery  times,  problems  related  to  the  return  of  goods,  high 
shipping costs and potential additional costs arising after the purchase of the goods were the 
main  concerns  expressed  by  consumers  in  the  framework  of  the  exploratory  consultation 
carried  out  in  the  framework  of  the  study  on  ‘an  integrated  and  innovative  overhaul  of  EU 
rules  governing  e-commerce  transactions  from  third  countries  from  a  customs  and  taxation 
perspective’. 

For  the  share  of  consumers  that  operate  in  several  jurisdictions  (cross-border  workers,  for 
instance), the simplification of processes will be supported by a central system. 

Citizens  and  consumers  will  benefit  significantly  from  better  and  more  visible  protection 
under EU policies from the consequences of harmful and fraudulent products (as illustrated in 
the use case on Ecodesign) because of a systematic EU-wide improvement in the detection of 
harmful supply chains.  

(134) Currently  the  use  of  the  VAT  Import-One-Stop-Shop  (IOSS)  is  voluntary,  however  the  experience  shows 
that all major e-commerce stakeholders have signed up to use it. Besides, based on the information available 
in Surveillance, the e-commerce imports are  focused on eight big players  that facilitate  over 90% of total 
IOSS  imports.  The  mandatory  use  of  IOSS  is  part  as  proposed  under  the  VAT  Digital  Age  would  further 
expand the use of the IOSS vis-à-vis other VAT collection methods as regards e-commerce imports. 

(135) Customs consultations (europa.eu) 

105 

 
 
 
 
                                                      
3.  SUMMARY OF COSTS AND BENEFITS  

3.1 Explanatory notes 

The assessment of  costs and benefits  is  prepared  in  detail  in  Annex 9 (supported by further 
detail on specific topics in Annexes  5, 6, 7, and 8). This section summarises the position in 
relation  to  the preferred option. Full detailed tables  on costs and benefits, quantitative and 
qualitative,  for  each  option,  are  presented  in  Annexes  7  and  Annex  9  along  with  the 
methodology applied. 

As regards benefits, the figure for sample use case relates to one illustrative case study. The 
overall benefits  across all  the practical  use cases  would of course be  much  more significant 
but  a  full  quantification  of  all  benefits  is  not  possible,  given  that  customs  are  involved  in 
delivering  more  than  350  regulatory  policies  in  addition  to  broader  safety,  security  and 
revenue collection tasks. 

All figures are relative to the baseline (+ or -) and cumulative totals for a 15-year period. 
Figure 7 in the Impact Assessment text outlines the baseline for 15 years as follows: 

106 

COSTS Y1Y2Y3Y4Y5Y6Y7Y8Y9Y10Y11Y12Y13Y14Y15Total (15 years)1. Investment in new or updated IT (one-off)2462512562612662722772832882922973033093163224.2382. Cost of maintaining existing IT systems (recurrent)1.7841.8151.8471.8791.9111.9421.9742.0062.0382.0692.1002.1322.1642.1962.22730.0843. Customs Staff (recurrent)3.8483.8483.8483.8483.8483.8483.8483.8483.8483.8483.8483.8483.8483.8483.84857.7214. TOTAL MS costs (1+2+3)5.8785.9145.9515.9886.0256.0626.0996.1366.1746.2086.2466.2836.3216.3596.39792.0435. Investment in new or updated IT (one-off)1414141415151516161516161617172296. Cost of maintaining existing IT systems (recurrent)88909193949698991011021041051071091101.4877. Customs Staff (recurrent)3838383838383838383838383838385648. TOTAL EU costs (5+6+7)1391411431451471491511521541551571591611631652.2819. Cost of compliance with customs formalities (recurrent)27.39727.39727.39727.39727.39727.39727.39727.39727.39727.39727.39727.39727.39727.39727.397410.95510. TOTAL (4+8+9)33.41433.45233.49133.53033.56933.60833.64733.68633.72533.76033.80033.83933.87933.91933.959505.279EU services administrative costsBusiness administrative costsMember States administrative costs 
 
 
 
 
I. Overview of Benefits (total for all provisions)  

Description 

Amount 

Comments 

Better tackling of revenue loss 

Direct benefits 

closure of 
customs gap 

Customs duties 

Removal of €150 threshold 

€13 Billion 

See Annex 9 

Single market and sustainability 

Security 

Crisis 

Strategic capability 

++++ 

++++ 

++++ 

+++++ 

Sample  use  case  –  Ecodesign  example  -  
illustrative scenario of €15.444 Billion 

Next  level:  Customs  union  managed/acts 
as one, fit for future 

Compliance cost reductions for economic operators  

€40 Billion  Duties  are  considered  below  a  regulatory 
fee  and  reducing  savings  in  Annex  9 
section 3.3 

Implementation cost reductions for national customs 
administrations  

2.4% 

See Annex 9 section 3.2 

Indirect benefits – not applicable 
Administrative cost savings related to the ‘one in, one out’ approach* 

Reduction in recurrent costs for economic operators 

€40 Billion 
(cumulative 
net saving over 
15 years) 

 See Annex 9 section 3.3.  
Average  €2.67  billion  per  year  over  15 
years.  Not  including  savings  in  IT  costs, 
which  were  not  quantifiable  for 
this 
assessment. 

II. Overview of costs  

Citizens/Consumers 

Businesses 

Administrations 

One-off  Recurrent 

One-off 

Recurrent 

One-off 

Recurrent 

Direct 
administrative 
costs (IT) 

neutral 

neutral 

Cost of Connection 
to 1 EU customs 
Data Space 
(compensated by 
lower future one-
off costs – see 
explanation below) 

See explanation 
below. Savings.   

EU services 
+ €0.559 
Billion.  
Member 
States 
saving 
€3.090 
Billion 

Direct 
administrative 
costs (other) 

neutral 

neutral 

Not applicable 

Not applicable 

EU services 
+ €2.048 
Billion.  
Member 
States 
saving 
€18.056 
Billion 

EU services 
+ €0.230 
Billion. 
Member 
States 
saving €1 
Billion 

Indirect 
administrative 

Not 
applicable 

Not 
applicable 

One-off training 
costs to shift to 

Not applicable 

Not 
applicable 

Not 
applicable 

107 

 
 
 
 
 
 
 
 
 
costs (other) 

Indirect 
adjustment 
costs 

Direct 
regulatory 
fees and 
charges  

Direct 
enforcement 
costs 

Indirect costs 

Total 

Direct 
adjustment 
costs  

Indirect 
adjustment 
costs 

Administrativ
e costs (for 
offsetting) 

operating under 
common and 
simplified EU 
customs processes 
and systems, offset 
by permanently 
reduced training 
effort across 
economic operators 

neutral 

neutral 

Not applicable 

Not applicable 

Not 
applicable 

Not 
applicable 

Not 
applicable 

Not 
applicable 

Not applicable  

€13 Billion (e-
commerce 
platforms) (€1 
Billion 
annually)  

Not 
applicable 

Not 
applicable 

Not 
applicable 

Not 
applicable 

Not 
applicable 

Not 
applicable 

Not applicable 

Not applicable 

Not applicable 

Not applicable 

Included in Direct 
administrative costs 

Not 
applicable 

Not 
applicable 

Costs related to the ‘one in, one out’ approach 

Not applicable 

Not applicable  

As  above:  Cost  of 
Connection 
to  1 
EU  customs  Data 
Space,  and  shift  in 
training  effort 
to 
reformed 
processes,  will  be 
compensated 
by 
lower  future  one-
off  costs  –  see 
explanation below 

The  reference  to  compliance  and  administrative  costs  (and  cost  savings)  in  this  Assessment 
addresses only administrative costs. In the case of economic operators, the focus in particular 
is on ongoing unit declaration costs, which is a suitable proxy and for which relevant data is 
available in calculating the cost of doing business in the context of other relevant analyses. 

As regards direct one-off administrative costs, these relate essentially to the development of 
IT connections to the Data Space. However, this is expected to be more than compensated for 
by the move to a permanently lower cost IT model and reduction of ongoing IT costs, and a 

108 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
lower cost of adaptation and adjustment to any future policy changes. For example, if a new 
data  requirement  or  formality  were  to  be  introduced,  traders  would  handle  it  through  one 
interface adjustment instead of up to 27 interface adjustments. It was not possible to quantify 
the IT costs or benefits in this assessment, but as the benefits will quite obviously outweigh 
the costs over time, the omission is conservative and tends to understate rather than overstate 
the benefits of the initiative. 

Regarding  indirect  one-off  administrative  costs,  it  was  also  not  possible  to  provide  a 
quantitative estimate. These are considered to be relatively very small. Some training would 
be needed to  get used to the new customs processes. However, training is an ongoing need, 
and the traders’ investment in this adjustment would again be more than compensated for by 
the permanently reduced training effort which would follow from simpler customs processes, 
implemented  uniformly  through  a  single  interface  instead  of  through  multiple  national 
environments. 

It is worth noting that trade is always in favour of simplifications of the nature included in the 
preferred  option  (single  EU  interface  for  customs).  It  is  useful  to  recall  the  joint  industry 
statement  issued  on  7th  June  2018 ([1])    in  the  context  of  the  new  Import  Control  System 
(ICS2):   

‘These legal provisions  and in particular the ‘multiple filing’ requirements make the 
principles and proposed elements underpinning  ICS 2 essential. Economic operators 
need a unified and coherent EU system with a common set of processes and a shared 
IT  architecture.  The  proposed  Common  Repository,  the  Shared  Trader  Interface  / 
Harmonised Trader Interface with the same specifications, and the single access and 
identity  management  system  are  imperative  to  implementing  the  UCC  without 
disrupting  trade  […]  The  alternative  of  a  fragmented  Member  State  based  ICS  2 
system would be incoherent and inefficient, and would impose insupportable costs on 
both Member States and economic operators.’     

([1])    STATEMENT OF INDUSTRY SUPPORT FOR THE ICS 2 SYSTEM. Supported by: Airlines for Europe (A4E); the 
European  Association  for  Forwarding;  Transport,  Logistics  and  Customs  Services  (CLECAT);  the  Community  of 
European  Railways  (CER);  the  European  Express  Association  (EEA);  EurTradeNet  (ETN);  the  European  Shippers 
Council (ESC), the International Air Transport Association (IATA) and the World Shipping Council (WSC). 

109 

 
 
 
 
 
 
 
 
 
 
 
 
                                                      
3. RELEVANT SUSTAINABLE DEVELOPMENT GOALS 

III. Overview of relevant Sustainable Development Goals – Preferred Option(s) 

Relevant SDG 

Expected progress towards the Goal 

Comments 

economy 
to  ensure 
towards 

The European Green Deal 
placed  the  transition  to  a 
as 
circular 
the 
critical 
a 
transition 
digital,  greener  and  more 
resilient 
industry.  The 
Commission  adopted  the 
new  Circular  Economy 
Action  Plan  for  a  cleaner 
and  more 
competitive 
Europe to mobilise the EU 
industry  into  achieving  a 
climate  neutral  and  more 
efficient 
resource 
economy by 2050. 

The  EU 
strategy  on 
artificial intelligence  aims 
to  build  an  ecosystem  of 
excellence 
an 
ecosystem of trust to boost 
development  and  uptake 
of AI within the EU. 

and 

Goal  8  (Promote 
sustained,  inclusive 
and 
sustainable 
economic  growth, 
full  and  productive 
and 
employment 
decent  work 
for 
all), 

The 
thorough 
reform  of 
the  customs 
the  support  of  a  more 
processes  with 
centralised digitalisation model is expected to 
contribute  to  the  trade  facilitation  and  in 
consequence  to  the  economic  growth.  The 
multiplier  effect  from  combining  the  better 
EU-level  data  flows  with  the  organisational 
capability leads to a systematic improvement 
in  the  detection  of  harmful  supply  chains. 
This  strengthen 
level  playing  field, 
because illegal trade (e.g., counterfeit, unsafe 
products) is better detected and the legal trade 
(and  by  extension 
investments  and 
its 
employment) is protected.  

the 

(Build 

9 

Goal 
resilient 
infrastructure, 
promote 
and 
industrialization 
and 
innovation), 

inclusive 
sustainable 

foster 

The  reformed  customs  processes  including 
potential new requirements on environmental 
transition 
compliance  could 
towards a green economy and investments in 
the circular economy. 

foster 

the 

The EU customs Data Space would offer the 
Commission  and  the  Member  States  greater 
data management possibilities and enlarge the 
use of artificial intelligence at EU level. 

the 

foster 

The  reformed  customs  processes  including 
potential new requirements on environmental 
compliance  could 
transition 
towards a green economy and investments in 
the  circular  economy,  such  as  making 
transport  infrastructure  networks  sustainable 
so  as  to  drastically  reduce  greenhouse  gas 
emissions  and  reduce  the  dependency  of  the 
transport sector on fossil fuels. 
supply 
Improved 
and 
tools,  combined  with  better 
analytical 
further 
organisational 

chain  visibility 

capacity, 

could 

110 

 
 
 
 
 
(Ensure 

Goal  12 
sustainable 
consumption 
production 
patterns) 

halt 

Goal 
(…sustainably 
manage 
(…), 
reverse 
degradation 
halt 
loss) 

forests, 
and 
land 
and 
biodiversity 

and 

15 

Several EU policies would 
benefit from the improved 
customs 
supervision 
Circular  economy  action 
the 
(europa.eu), 
plan 
proposal on the Ecodesign 
Regulation for Sustainable 
Products,  the  proposal  on 
the  Waste 
Shipment 
Regulation,  the  REACH 
Regulation. 

Several EU policies would 
benefit from the improved 
supervision 
customs 
including  the  proposal  for 
the 
on 
Regulation 
Deforestation  and  Forest 
Degradation,  and  the  EU 
Biodiversity  Strategy  for 
2030 

improve  supply  chain  resilience  in  crisis 
scenarios. 

The EU customs Data Space and the new EU 
actor  in  the  governance  structure,  an  EU 
Authority  for  customs,  deepen  co-operation 
between  national  customs  administrations 
and  drive  the  consistent  and  timely  delivery 
of  customs  policies.  The  Authority  would 
ensure operational coordination and real-time 
of  EU-wide 
supervision 
transactions, 
the  fully-fledged  EU  data 
supported  by 
analytics  and 
targeting  capability.  The 
benefits  for  the  implementation  of  the  EU 
policy  are  significantly  higher  due  to  these 
improvements.  

The EU customs Data Space and the new EU 
actor  could  contribute  to  the  development  of 
sustainable  trade  patterns  (e.g.  on  waste,  re-
use  and  recycling)  and  support  sustainable 
consumption 
the 
REACH regulation). 

(e.g.  enforcement  of 

The EU customs Data Space and the new EU 
actor  in  the  governance  structure,  an  EU 
Authority  for  customs,  deepen  co-operation 
between  national  customs  administrations 
and  drive  the  consistent  and  timely  delivery 
of  customs  policies.  The  Authority  would 
ensure operational coordination and real-time 
supervision 
transactions, 
of  EU-wide 
supported  by  an  EU  data  analytics  and 
targeting  capability.  The  benefits  for  the 
the  EU  policy  are 
implementation  of 
significantly 
these 
improvements.  

higher 

due 

to 

the 
The  EU  customs  Data  Space  and 
Authority  could  contribute  to  the  protection 
on 
of 
(e.g. 
deforestation) 
enforcement of CITES). 

biodiversity 

ecosystems 

terrestrial 

(e.g. 

and 

111 

 
 
Annex 4 - Analytical Methods 

The methods used are described in detail in various parts of this document as follows:  

  Stakeholder  consultation:  extensive  public  and  targeted  consultation  activities  were 
carried out, with the data analysed in different ways and fed into the impact assessment. 
The activities and analytical methods are described in Annex 2: stakeholder consultation. 

  The cost estimation and model for IT assessment is based on a statistical approach, using 
a  structure  previously  validated  by  the  Member  States  and  some  indirect  input.  It  is 
explained in detail in Annex 7, section 5.  

  The cost estimation for the EU Customs Authority staff composition in Annex 8 is based 
on the average costs for  estimates of ‘Human Resources’ in legislative financial sheets 
elaborated by DG BUDGET. 

  The  implications  of  the  different  options  for  national  customs  administrations  are 
expressed  in  variation  percentages  with  respect  to  the  data  that  they  have  themselves 
provided. More details are available in section 3.2 of Annex 9. 

  For  a  theoretical  approximation  of  the  different  options’  potential  to  prevent  revenue 
losses (to close the customs gap), a ‘scoring’ mechanism based on some indicators was 
used as described in section 4 of Annex 9. 

  To  illustrate  the  benefits  deriving  from  the  options,  a  series  of  case  studies  have  been 

developed in sections 4, 5 and 6 of Annex 9. 

112 

 
 
 
Annex 5 - Reform building block: reform of the 
customs processes 

Foreword: Annexes 5 to 8 contain the description of the building blocks of the reform. 

1.  UNDERSTANDING THE BASELINE 

The  customs  procedural  requirements  regulated  in  the  Union  Customs  Code  (UCC)  and  its 
delegated and implementing rules have developed over many decades, influenced by  Union, 
national and international provisions as well as industry and supply chain practices and local 
customs infrastructure and management in different points of entry.  

The  resulting  configuration  of  procedures  has  become  complex.  The  customs  procedural 
handling points along the lifecycle of a goods movement through the supply chain typically 
involve some form of ‘declaration’ which ensure continuity in supervision and accountability 
until the point of release.  

Releasing goods for free circulation (i.e. importing) might require submitting five forms of 
declarations,  which  are  to  be  filed  by  more  or  less  defined  actors.  Some  of  the  information 
required in these declarations is similar and therefore is often provided more than once by the 
person  submitting  them.  The  consequences  of  not  filing  those  declarations  are  not  always 
specified in the UCC, which provides that Member State must foresee effective, proportionate 
and  dissuasive  penalties  for  failure  to  comply  with  the  customs  legislation,  introducing  an 
important element of divergent application of the customs legislation. In more detail:  

  Before arriving to the Union, the carrier, the importer, the consignee, a person acting on 
their name or their behalf, or anyone able to present the goods or have them presented to 
customs  must  file  an  entry  summary  declaration  (ENS).  This  includes  postal  and 
express  parcels.  The  UCC  does  not  specify  the  consequences  of  failure  to  file  an  ENS, 
even  if  in  principle  goods  may  be  released  only  after  risk  assessment.  By  2025 (136),  a 
Union-wide  system  will  have  been  fully  deployed  for  filing  ENS  -  the  Import  Control 
System 2 (ICS2) - which provides a single trader portal instead of 27 national interfaces. 
The  data  set  collected  in  ICS2  is  designed  for  safety  and  security  risk  analysis  in  the 
supply  chain,  before  import,  and  does  not  therefore  include  all  the  customs  data  which 
will  eventually  be  provided  for  the  shipment.  Detailed  information  on  classification, 
valuation or origin, for example, is provided later in customs declarations in the national 
systems, typically on behalf of the person clearing the goods rather than the carriers, not 
via ICS2.  

(136) Report from  the Commission to the European Parliament  and the Council pursuant to  Article 278a of the 
Union  Customs  Code,  on  the  progress  in  developing  the  electronic  systems  provided  for  under  the  Code 
SWD(2021)382 final. Originally, the deployment of ICS2 release 3 was supposed to take place in Q4 2024, 
however  due  to  the  interlinkages  with  the  NCTS  system  and  the  delays  faced  in  phase  6  of  that  project, 
release 3 of ICS2 has been extended to end of Q1 2025. 

Page 113 / 291 

 
 
                                                      
  On  arrival  in  the  Union,  the  carrier  must  notify the  arrival  of  a  vessel  or  aircraft.  This 
notification does not  apply to  goods arriving by rail or road.  The UCC does not  specify 
the  consequences  of  failure  to  notify.  In  practice,  port  community  and  airport  systems 
require  that  notification  for  other  purposes.  By  2025,  all  the  Member  States  will  have 
deployed the national system for notification of arrival. 

  Once arrived, the carrier, the importer, a person acting on his name or his behalf (customs 
representative),  or  a  subsequent  carrier  must  file  a  presentation  notification  and/or  a 
temporary  storage  declaration  if  the  goods  are  not  to  be  immediately  placed  under 
customs procedure. However, this does not apply if the goods are in transit. By 2025, all 
the Member States will have deployed the national systems for presentation notifications 
and temporary storage (either as one system, or as two separate systems). Failure to file 
the temporary storage declaration means incurring a customs debt, pursuant to Article 79 
UCC. 

 

If the  goods are to  be placed under a  customs procedure  (import, export, transit and the 
special  procedures  except  free  zones  –  see  below)  a  customs  declaration  and  a 
presentation  to  customs  are  required.  Both  transit  and  release  for  free  circulation  are 
customs procedures, so, where the goods enter the Union through a point that is not their 
final destination, often two customs declarations are necessary. By 2025, all the Member 
States  will  have  updated  the  national  declaration  systems  to  the  UCC  requirements  and 
have deployed the national interfaces for transit.  

Any person able to provide the required information may file the customs declaration as long 
as  this  person  is  established  in  the  customs  territory  of  the  Union  (with  some  exceptions). 
These  are  the  declarants.  The  postal  and  express  operators  declare  many  of  the  goods  that 
they carry (mostly e-commerce goods), normally on behalf and in the name of the importers. 
Customs representatives can also be declarants.  

However, non-customs legislation imposes compliance obligations on importers (Article 4 of 
Market Surveillance Regulation, for instance). The UCC also uses the term importer but the 
definition is to be found in Annex B of the UCC implementing act as ‘Party who makes, or on 
whose  behalf  a  customs  clearing  agent  or  other  authorised  person  makes  an  import 
declaration.  This  may  include  a  person  who  has  possession  of  the  goods  or  to  whom  the 
goods  are  consigned’.  In  essence,  the  importer  is  whoever  the  declaration  says  it  is  and 
therefore,  in  e-commerce,  the  EU  consumers  who  ordered  the  goods  on  line  become  the 
importers,  even  if  in  principle  the  non-customs  legislation  is  not  intended  to  impose  the 
compliance requirements on them. 

This  makes  the  customs  authorities’  task  difficult,  particularly  but  not  only  in  relation  to  e-
commerce.  According  to  the  UCC,  before  releasing  the  goods  for  free  circulation, 
‘restrictions’  –  which  is  the  term  used  to  refer  to  non-financial  requirements  –  must  be 
enforced,  even  if  the  customs  declaration  does  not  contain  information  to  check  many  of 
them.  Yet,  the  release  for  free  circulation  is  conceived  in  the  UCC  as  a  guarantee  of 
compliance.  

The  EU  Single  Window  Environment  for  Customs  initiative  intervenes  in  this  area,  by 
ensuring  that  certain  Union  non-customs  systems  are  made  interoperable  with  national 
customs  systems  and  that  information  on  the  compliance  of  non-customs  formalities  is 
exchanged  between  them.  Thereby,  it  contributes  to  aligning  a  number  of  non-customs 
policies with customs processes on the operational level, by making sure that what is decided 

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by  non-customs  authorities  is  correctly  translated  in  customs  interventions.  This  supports  a 
consistent approach by customs. However, such interventions are strongly dependent on how 
the  sectoral  policy  is  designed,  including  whether  IT  tools  exists,  and  in  the  resulting 
complexity in interacting with customs. In addition, the EU Single Window Environment for 
Customs does not deal with issues such as risk management and the associated identification 
of  priorities  of  controls.  Moreover,  in  some  areas,  the  Single  Window  Environment  for 
Customs  does  not  fit.  For  example,  non-customs  requirements  may  apply  in  relation  to 
‘manufacturers’,  but  the  manufacturer  is  not  a  compulsory  data  element  in  a  customs 
declaration.  Although  Member  States  can  already  connect  to  the  EU  Single  Window  –  and 
some  already  are  connected  –  the  legal  deadline  is  set  for  March  2025  for  the  Union  non-
customs  formalities  present  in  Part  A  of  the  Annex  to  the  EU  Single  Window  Regulation 
(Regulation (EU) No 2022/2399). Moreover, in 2031 it will be possible for the Commission 
to identify which, among the non-customs formalities listed in the Annex, can be subject to 
the  “additional  digital  cooperation”:  this  cooperation  is  also  known  as  “Business-to-
Government” and it will make it possible for economic operators to submit an integrated data 
directly  at  national  level,  which  includes  the  data  necessary  for  customs  and  non-customs 
purposes. 

The reform builds on the EU Single Window and its capacity to facilitate the exchanges 
between  customs  and  non-customs  systems.  In  fact,  despite  not  using  the  name  “Data 
Space”, the EU Single Window behaves exactly like a Data Space: it details the rules for the 
exchange  of  data  between  different  systems,  and  mechanism  by  which  more  systems  can 
participate  to  these  exchanges.  Therefore,  insofar  as  the  reform  will  modify  the  customs 
processes, these changes will have a practical impact on the EU Single Window, because its 
functioning  relies  on  the  current  customs  procedures.  However,  such  changes  will  not  alter 
the idea behind  it. Moreover, the centralisation aspects  of the EU Customs  Data Space will 
improve the EU Single Window in two areas: 

  on  the  Government-to-Government  exchanges  (those  that  will  become  mandatory  from 
2025),  it  would  cut  the  need  for  Member  States  to  adapt  their  own  national  systems  to 
retrieve  data  from  Union  non-customs  systems.  Today,  in  average,  two  years  are 
necessary for the Commission to analyse and put in place the interconnection between the 
EU  Single  Window  and  the  Union  non-customs  systems,  and  another  two  years  are 
required by Member States to adapt their systems. The centralisation brought by the Data 
Space would de facto allow to cut the two years necessary for Member States and  halve 
the time to market of Single Window solutions; 

  on  the  Business-to-Government  aspects,  a  form  of  centralisation  called  “harmonised 
trader portal” was already analysed in the EU Single Window Impact Assessment (Option 
5, page 29), but it was discarded due to its ambitiousness and the will not to change the 
UCC. The centralisation brought by the Data Space is an extension of that option. 

Failure to file the customs declaration means incurring a customs debt, pursuant to Article 79 
UCC, but the consequences of the goods not complying with non-financial requirements are 
not  entirely  clear.  The  UCC  entitles  the  customs  authorities  to  take  some  actions 
(confiscation,  sale,  destruction)  but  these  are  for  a  narrow  range  of  cases.  The  Market 
Surveillance Regulation foresees a series of possibilities where doubts about the compliance 
of the goods with non-financial requirements arise, which are not reflected in the UCC.  

The  UCC  provides  a  series  of  simplifications 
the  customs  declaration 
(simplified/supplementary declaration, entry into the declarant’s records, centralised clearance 

lodge 

to 

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and  self-assessment)  to  trustworthy  traders  that  have  been  granted  the  status  of  Authorised 
Economic Operators (AEO). However,  as the UCC interim evaluation  shows, the impact  of 
the simplifications varies depending on existing customs practices in the Member States prior 
to the UCC and the benefits are still limited.  (137) Other difficulties have also been noted. For 
instance, customs cannot pull data from the declarants’ records for risk analysis. This makes 
customs  supervision  very  difficult,  particularly  where  the  obligation  to  present  goods  to 
customs is waived. (138) 

In  the  big  picture,  one  key  feature  of  the  baseline  is  that  the  handling  points  sometimes 
involve  repeated  submissions  of  similar  data  by  the  same  or  different  players.  The  most 
obvious example is the obligation for postal operators to submit an entry summary declaration 
data subset into  ICS2  and a customs declaration  in  the national  import system in  respect  of 
low  value  postal  parcels.  The  dataset  is  almost  identical  for  both  declarations  and  the  same 
Member State is responsible for risk management in most cases. Another key feature is that 
the operators which  actually  generate the traffic and  which have the underlying commercial 
information  (buyers, sellers, importers, manufacturers)  are not  the ones  making the  customs 
filings.  This  impacts  the  availability  and  quality  of  data,  and  also  the  effectiveness  and 
efficiency of the enforcement of non-customs obligations where the person dealing directly 
with  customs  is not  in a position to  account  for the regulatory requirements  associated with 
the  goods  or  the  supply  themselves.  In  the  case  of  e-commerce,  the  distance  between  the 
transaction  and  the  customs  declaration  increases  further:  European  postal  or  express 
operators (carriers) declare goods sold by third country vendors to EU consumers, often via a 
web platform.  

Export  is  in  practice  much  more  streamlined,  requiring  just  an  export  declaration  and  a 
confirmation  of  exit  of  the  goods.  However,  the  UCC  provisions  dealing  with  the  pre-
departure declaration, the export declaration and the exit summary declaration have given rise 
to  some  difficulties  of  interpretation  in  the  cases  of  export  followed  by  transit.  Although 
export  declarations  are  to  be  filed  in  the  national  declaration  systems,  synchronisation 
between  the  customs  declaration  and  the  exit  of  the  goods  is  achieved  through  a  trans-
European IT system, the Automated Export System. The UCC does not provide any specific 
consequence for failure to submit the export declaration because in practice no good is subject 
to export duty.  

The  UCC  also  provides  for  special  procedures  (schemes  authorised  by  customs  through 
which traders can move or process goods with suspension of, or relief from, customs duties):  

  Transit  is  very  streamlined,  works  at  international  level  and  a  trans-European  system 
ensures the links among the national declaration systems where filings are done. Transit 
procedures often rely on authorised operators (consignors and consignees). 

  Inward  and  outward  processing,  warehousing,  free  zones  and  temporary  admission 
sometimes rely for their supervision on the operator’s commercial data, and sometimes on 
customs declarations. As mentioned above, placing goods in free zones does not require a 
customs declaration, and neither does the release for free circulation of certain goods after 
the inward processing, or the placement in temporary admission with an ATA carnet, for 

(137) The  UCC  evaluation  (p.20)  reflects  that  ‘Economic  operators  considered  the  simplifications  unattractive, 

partly because of the non-harmonised approaches being taken across Member States.’ 
(138) This difficulty motivated the amendment to Article 234(3) UCC IA in September 2019. 

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instance.  In  these  cases,  it  is  considered  that  the  operator’s  data  contain  enough 
information for customs to supervise the goods through different means. Moreover, goods 
placed  under  outward  processing  may  move  within  the  Union  without  requiring  the 
customs  transit procedure. However, these procedures often require  a  guarantee because 
they  entail  a duty suspension. The UCC interim evaluation  and other questionnaires run 
by  the  Commission  services  among  the  Member  States  show  that  the  provision  of  the 
guarantee  and  moreover  its    monitoring  (automated  or  not)  is  an  area  where  significant 
differences exist among the Member States. However, the Commission  does not  receive 
data on the extent to which in practice Member States resort to the guarantees to collect 
unpaid duties.  

In general, the Commission has no access to the data in customs IT systems (apart from the 
data  collected  in  the  Surveillance  system)  and  is  not  explicitly  allowed  to  complement  the 
work  of  Member  States  in  risk  management  (with  limited  exceptions  for  ICS2  analytics 
projects). 

During  the  public  consultation,  submissions  received  from  traders  drew  attention  to  a 
number of challenges experienced by traders in connection with the customs processes. These 
included the time and complexity involved in dealing with customs duty calculation elements, 
the  need  for  early  notification  of  data  and  formats  for  customs  systems  developments,  and 
accountability challenges for intermediaries (notably, a lack of power of attorney for dealing 
with  customs  for  e-commerce  clients,  and  the  problems  arising  where  importers  outsource 
their  declarations  but  do  not  provide  required  documentation).  Also  raised  were  the 
requirements for guarantees for temporary storage, the challenge to have clear information on 
customs procedures, a non-unified approach by customs, and some duplication of information 
provision  as  well  as  difficulties  for  some  operators  to  obtain  some  data.  One  submission 
suggested  that  the  UCC  reform  should  oblige  customs  to  accept  re-usable  master  data  from 
customs  covering  certain  details  where  stable  such  as  insurance  aspects,  certificates, 
classifications,  valuation points, freight  costs, currency used). Another suggested mandatory 
fields  for  completion  of  the  value  elements  in  customs  declarations.  The  request  to  further 
facilitate trade by trusted traders and provide more benefits for AEO (such as self-clearance) 
was  also  made.  The  idea  of  a  digital  transition  allowing  for  a  simplified  and  more  efficient 
customs environment for traders and authorities was also raised, alongside a fully-fledged EU 
customs information environment (or as another respondent put it, ‘no customs union without 
an IT union’).  Increased harmonization and standardization of customs processes, especially 
for P&R and for the approach to sanctions policy for non-compliance, was also called for. 

2.  THE  SHIFT  IN  PARADIGM  PROPOSED  IN  OPTIONS  1  TO  4:  SIMPLER  PROCESSES 

AND A MORE EFFICIENT PARTNERSHIP WITH TRADERS 

2.1 A new paradigm  

The baseline as described above points towards two fundamental issues: how to improve the 
quality of information with which customs work, and how to reduce complexity in the trading 
environment (particularly for traders which can provide high compliance assurance). 

For  customs  supervision  to  be  effective  and  efficient,  a  shift  in  paradigm  of  customs 
information  towards  a  data-driven  approach  is  needed.  Putting  the  emphasis  on  the 
collection  of  first-hand  data  on  consignments  from  the  operators’  systems,  online  platforms 
and other sources would reduce reliance on third-party declared data and therefore  improve 

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the  availability  and  quality  of  that  information,  on  one  side,  and  reduce  complexity  in 
customs processes in general, on the other side. 

A data-driven approach for customs information would include the following elements: 

  Customs  needs  to  collect  data  as  early  in  the  supply  chain  ideally  in  the  importer  or 
exporter’s  records  (contracts,  commercial  documentation,  data  on  e.g.  producers, 
manufacturers  and  exporters  in  third  countries)  as  possible  so  that  risk  analysis  can  be 
carried  out  and  customs  interventions  arranged  in  advance.  This  would  build  on  and 
expand the UCC entry into declarants’ record concept. It is also important to provide for 
effective  sharing  and  use  of  the  data  in  harmonised  processes,  in  particular,  linking  all 
data available on a specific consignment.  

  Consignments  need  to  be  systematically  screened  for  security  threats  before  loading.  In 
considering  process  reforms,  it  is  useful  also  to  keep  in  mind  that  serious  safety  and 
security  threats  often  involve  exploitation/hijacking  of  legitimate  trade.  This  means  that 
all consignments  need some level  of risk analysis to  detect  risks which may arise in  the 
supply chain rather than from a specific operator.  

  Customs  shares  these  data  with  other  competent  authorities  at  the  early  stages  of  the 
movement  of  the  goods,  to  allow  more  effective  action  on  prohibitions  and  restrictions; 
this includes getting data on products from other authorities in order to be able to analyse 
their composition and complexity for carrying out meaningful risk analysis on the supply 
chains  before  the  arrival  or  the  departure  of  the  goods.  This  aspect  builds  on  the  EU 
Single Window Environment for Customs, but goes beyond its scope to allow exchanges 
with  more  areas  of  non-customs  legislation  which  are  today  not  compatible  with  the 
Single Window. 

In terms of responsibilities, the new paradigm assigns specific roles to the five main groups of 
players in customs processes: 

  The  importer/exporter  is  responsible  for  compliance  with  financial  and  non-financial 
requirements  and  data  provision.  The  importer  (i)  is  established  in  the  Union  customs 
territory  or  provides  a  guarantee  otherwise,  (ii)  has  the  power  to  determine  that  goods 
from a third country are to be brought into or that Union goods are to be taken out of the 
Union customs territory and (iii) is the one releasing the goods for free circulation, or if a 
formulation closer to the Market Surveillance act is used, the one that places the goods on 
the Union market or for export.  The principle could also be enacted that goods may be 
released, or in some cases even enter/exit the Union customs territory, only if there is an 
importer or exporter responsible for their compliance with  applicable financial and non-
financial  requirements.  The  new  approach  does  not  preclude  the  use  of  intermediaries, 
such as customs representatives, by the importer to assist in their information provision. 
The  current  notion  of  ‘declarant’  disappears.  The  importer  must  know  the  requirements 
applicable to the products and ensure that financial and non-financial information (be this 
tests, 
certificates  or 
manufacturer’s details or other) is available for customs to check. 

the  customs  Single  Window, 

to  be  validated 

licenses 

in 

To  ensure  that  e-commerce  intermediaries  become  importers,  a  notion  of  deemed 
importer should be introduced, in line with the VAT legislation and the recently adopted 
Digital Services Act (see section 2.4.3 below).  

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  The  transport  layer  (carriers  and  other  intermediaries)  bring  consignments  across  the 
borders,  provide  some  data,  and  generally  handle  customs  supervision  actions  in  the 
supply chain. Transporters could be trusted with the obligation to check that the importer 
or  exporter  has  provided  customs  with  the  information  on  the  goods  and  to  link  that 
information  with  their  own  information  on  the  specific  consignment  (see  more  details 
below). 

  Customs authorities would have access to the data provided by importers/exporters and 
carriers, as mentioned above. In the options where a central Data Space is foreseen, access 
to  the  data  in  the  Data  Space  would  be  clearly  regulated  (and  ideally  monitored  by  the 
Authority  in  Option  4).  National  customs  authorities  would  have  access  to  all  data 
necessary  for  their  customs  supervision  role  (for  example,  the  EU  data  of  operators 
established in their territory, the data on goods entering and/or exiting the Union through 
their  borders  and  the  data  on  goods  having  as  final  destination  or  origin  point  in  their 
territory).  

  EU-level  access  (by the  Commission  and/or a new operational  EU layer) would also  be 
necessary for certain purposes, such as EU risk management support. The role of the EU 
layer is described further in the Options where present; in any event, access to data would 
comply with data protection requirements and of course be proportionate and for clearly 
defined purposes only).  

  Other authorities that co-operate with customs under different perspectives:  

  Market surveillance authorities: Customs should receive information ex-ante from 
their side on the products that require special attention at entry into and exit out of the 
EU,  in  order  to  become  familiar  with  these  products  and  the  points  of  attention. 
Customs in turn would provide information on the supply chain and in particular the 
traders  importing  or  exporting  such  goods.  It  would  allow  both  customs  authorities 
and  Market  Surveillance  Authorities  to  do  joint  risk  analysis  and  target  suspicious 
supply chains ahead of imports and exports. 

  Security and other Law Enforcement bodies, which co-operate  with  customs and 
rely to an extent on customs processes. Customs should be able to receive information 
from  them  and  to  prepare  joint  surveillance  strategies,  taking  into  account  the  risk 
priorities set out at political level. 

  Tax authorities: customs and tax administrations need to operate jointly to ensure the 

correct collection of customs duties, VAT and excise duties when applicable. 

At the same time, the proposed shift in paradigm of customs information would open the door 
for  effective  simplifications  at  several  levels  in  the  customs  processes  to  the  benefit  of  the 
economic operators in the customs chain. The availability of more and better data on customs 
operations  would  allow  customs  authorities  to  ensure  more  effective  supervision,  better 
targeting the movement of goods or operators that pose risks, while letting the compliant trade 
cross the border smoothly. The data-driven approach would enable (i) simpler processes for 
all  traders;  (ii)  further  simplifications  for  certain  reliable  traders  (Trust  and  Check 
traders  building  on  the  AEO  scheme),  and  (iii)  specific  processes  for  e-commerce 
traders. 

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The  different  policy  options  presented  in  this  impact  assessment,  and  in  particular  their 
respective  elements  on  IT  implementation  and  governance,  will  affect  the  efficiency  and 
effectiveness of the practical implementation of the new paradigm outlined in this annex. The 
purpose  of  this  Annex  is  not  to  analyse  or  compare  those  options,  but  to  describe  the  basic 
features of the reform from the customs process and responsibilities point of view, which will 
be essentially the same across Options 1-4. 

2.2 Reformed customs processes: potential simplifications for all traders 

With a better access to and use of customs data, significant simplifications can be foreseen for 
all economic operators.  

  Simplification and rationalisation of the steps in customs processes. Before arrival, the 
importer  would  provide  to  customs  the  adequate  amount  of  advance  cargo  information 
required to allow a financial and non-financial risk analysis of the goods. If goods are not 
stopped before leaving the third country (e.g. for serious risks to safety or security), they 
will be transported to the EU. Customs would then receive an electronic signal informing 
them of the arrival of the goods  at the border, without  the need of an additional, formal 
arrival notification as foreseen today. Such electronic signal  would  make the link to the 
previously submitted information concerning the goods transported.  In this  scenario, the 
goods  could  even  be  automatically  released  within  a  given  period  after  receipt  the  pre-
arrival signal if customs does not intend to see and control the goods because they do not 
pose particular risks.  If the presentation  of  goods would not  be systematically necessary 
for  the  operator,  customs  would  always  retain  the  possibility  to  require  it,  if  the  risk 
analysis point to that direction.  

  Rationalisation  and  clarification  of  the  responsibilities  of  the  actors  in  the  supply 

chain according to their business role:  

  The  importer/exporter  would  be  ultimately  responsible  for  complying  with  the 
financial and non-financial requirements and for providing customs with the necessary 
data on the goods.  

  The  carriers  and  other  intermediaries  who  bring  consignments  across  the  borders 
would  provide  their  own  data  relating  to  the  transport,  ideally  linking  them  to  those 
submitted by the importer/exporter (see below). 

  With  their  responsibilities  clarified,  each  actor  provides  the  kind  of  data  they 
normally  have  for  their  business,  thereby  reducing  the  time  and  error  cost  that  comes 
with sourcing, sharing, interpreting, and compiling data for customs. 

  Importers/exporters provide data on the goods, their values, their tariff classification, 
their origin, their manufacturer, the non-customs legislation applicable on those goods, 
at  consignment  level.  The  incentive  to  do  so  at  the  earliest  stages  of  the  movement, 
when it is known that the goods are meant to enter/exit the EU, is the possibility of a 
smoother  movement  of  their  consignments  following  an  earlier  risk  analysis  by 
customs.  

  Carriers rely on the data submitted previously submitted by the importer (if any) and 
add  the  transport  data  (such  as  route,  arrival  information,  means  of  transport 
information) when submitting the advanced cargo information per consignment. If the 

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importer/exporter  has  not  submitted  the  minimum  advanced  cargo  information,  the 
carrier will have to provide it in order to be able to move the goods.  

  The legislation should contain a general principle stating that any person who brings 
goods into, or takes good out of, the customs territory of the Union must make, keep, 
and  provide  or  make  available  [to  the  Data  Space  or  relevant  IT  environment],  for 
examination  and  inspection,  information  on  that  activity.  The  information  should  be 
sufficient for customs (i) to ascertain the correctness of any movement of goods; (ii) to 
determine the liability of any  person for duty,  fees  and taxes that may be due in  the 
Union and (iii) for ensuring compliance with Union or national legislation applicable 
on the goods. 

The  information  that  customs  need  to  be  able  to  check  the  aforementioned  three 
aspects could be further developed and more specific data requirements could also be 
included in delegated rules. The required information would be based on the existing 
Annex  B  of  UCC  delegated  and  implementing  acts,  enriched  with  some  key  data 
elements,  such  as  the  manufacturer  of  the  goods.  However,  the  formulation  on 
information  requirements  for  checking  compliance  with  non-financial  regulations 
should  be  flexible  enough  to  be  able  to  accommodate  changing  information 
requirements  in  non-customs  legislation  without  the  need  to  modify  the  customs 
legislation. 

  The relevant customs data is submitted once by the players involved and re-used for 
different purposes, therefore removing current duplications in the data provision. For 
instance,  the  tariff  classification  of  the  goods  is  a  piece  of  information  necessary  for 
several  declarations  in  the  movement  of  the  same  consignment  (advanced  cargo 
information,  temporary  storage,  transit  declaration,  customs  declaration)  or  valid  for 
several  consignments  of  the  same  type  of  goods.  The  customs  IT  environment  should 
ensure that once this information has been provided to customs on a given consignment, it 
is  possible  to  re-use  it  for  several  declarations  on  the  same  consignment  and  for 
declarations  of  different  consignments  of  the  same  type  of  goods.  The  possibility  to 
(re)use the information for several consignments is enhanced for trusted traders that have 
their systems connected to customs (see next section). 

  The  data  can  be  submitted  in  more  than  one  format.  The  format  for  providing  the 
information  would  be  made  more  flexible  thanks  to  two  elements.  Firstly,  the 
simplifications of the customs processes would reduce the amount of data required and its 
use. Secondly, where a central Data Space is used, the UCC would not need to regulate a 
unique format to provide the information relevant for customs operations but would define 
the data requirements in a semantic way, making possible both for customs and operators 
to  use  different  technical  possibilities  and  models  to  provide  that  information.  The  two 
elements,  alone or combined would provide the necessary  flexibility and the capacity to 
adapt  to  new  technological  developments  and  requirements.  A  flexible  approach  to  the 
provision  of  data  to  customs  by  economic  operators  would  allow  that  new  information 
requirements (digital product passports, other goods taxonomies, licences, certificates) are 
more  easily  supervised  and  cross-checked  by  customs.  Customs  IT  tools  would  ensure 
that  different  formats  are  translated  into  usable  information  for  supervision  of 
international trade. 

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2.3  Reformed  customs  processes  for  certain  reliable  traders  (Trust  and  Check  traders 
building on the AEO scheme) 

The  paradigm  change  in  customs  information  should  allow  to  establish  an  improved 
partnership  between  customs  authorities  and  the  operators  that  are  already  recognised  as 
reliable, such  as  holders of the Authorised Economic Operator  (AEO) status.  In the reform, 
the  AEO  programme  would  be  strengthened  with  a  Trust  and  Check  approach  that  would 
make trustworthy operators benefit from simpler processes than those that could be granted to 
all traders (see 2.2) in exchange for their becoming transparent vis-à-vis customs authorities, 
which is by sharing/giving access to their commercial information, and their IT systems. 

These traders would benefit from a wider set of customs simplifications based on an approach 
integrating and expanding the current  UCC simplifications and the concept  of system-based 
approach  as  recommended  by  the  Wise  Persons  Group.  Trust  and  Check  operators  would 
share  their  commercial  information  in  a  system-to-system  logic  with  customs,  which  would 
be  empowered  for  more  effective  supervision  by  having  access  to  real-time  data  on  goods 
movements.  In exchange, these operators would be allowed to perform part of the functions 
that customs perform today for ensuring compliance with the customs processes (collection of 
duties, letting goods move across the border, carrying out controls), which translates for them 
in not having to comply with burdensome formalities (lodging several types of declarations, 
placing guarantees) and in their goods not being stopped at entry or exit of the EU. The Trust 
and  Check  approach  would  also  apply  to  SMEs  that  can  offer  transparent  data  to  customs. 
Section  2.5  below  offers  a  more  detailed  view  of  the  functioning  of  the  proposed  new 
approach. 

Conditions to obtain the status of the Trust and Check AEO trader 

The Trust and Check approach can deploy its benefits only for the importers, exporters and 
carriers  that  meet  the  strict  requirements  to  become  AEO.  Current  AEOs  would  therefore 
have a transitional advantage to become Trust and Check traders. This includes the more than 
11 000 SMEs (out of 18 000) that currently hold AEO status in the EU. 

taxation  rules  (lack  of 

The AEO criteria require an operator (i) to  have a solid record of compliance with  customs 
infringements),  (ii)  appropriate  professional 
legislation  and 
qualifications, (iii) financial solvency (if the operator requests some financial advantage such 
as periodic payments)  and, above  all, (iv) a high  level  of  controls  of the operations and the 
flow of goods, by way of  a system managing commercial and, where appropriate, transport 
records, which allows appropriate customs controls.  

In addition to the current AEO criteria, the Trust and Check approach would also require the 
operator  (v)  to  have  an  electronic  system  that  can  interact  with  the  customs’  systems  for 
exchanging information  on a  constant  basis. This  system-to-system connection  would allow 
customs to have access to all relevant data on a given movement of goods directly from the 
operators’ systems and to regularly extract and cross-check automated data on that movement. 
The Trust and Check approach is therefore intended to go a step further than the entry into the 
declarant’s records, because it takes the information from the operator’s system and converts 
it  into  usable  information  for  customs  real-time  work,  thus  giving  full  visibility  over  the 
operators’ customs flows. 

Even assuming that most of these operators would already have reduced guarantees because 
they are already AEO, a more efficient monitoring of the guarantees (with or without a Data 

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Space) could reduce further the need for Trust and Check traders to provide guarantees, to the 
extent possible within international rules and taking into account Member States’ liability vis-
à-vis the EU budget. For instance, the operator of a temporary storage facility storing goods 
of a Trust and Check operator could rely on the latter’s guarantee without the need to provide 
its  own.  Operators  that  arrange  for  providing  customs  automated  real-time  data  on  their 
consignments would not need to place them in internal transit and would therefore not need a 
transit  guarantee.  Trust  and  Check  operators  would  be  accountable  if  anything  needs  to  be 
corrected (e.g. errors in calculation of customs duties). Trust and Check treatment would only 
be available in respect of the trade flows of accountable persons who can deliver compliance. 
This  will  address  a  weakness  in  the  current  structure,  identified  by  the  European  Court  of 
Auditors whereby simplified procedures may be used by AEOs for trade flows for which they 
do not have direct commercial knowledge (meaning de facto an unreliable trader can leverage 
the trusted status of a transport intermediary by proxy). 

Under the Trust and Check importer’s/exporter’s responsibility, other commercial parties may 
also be delegated the possibility of providing required transaction-related information such as 
Digital  Product  Passports,  manufacturer  and  commercial  or  transport  references.  In  this 
context, there is also a role for the customs agents, who should be able to assist and provide 
the right support for clients not having IT tools. 

Simplifications for Trust and Check AEO traders 

This  section  describes  the  key  innovations  of  the  Trust  and  Check  approach  and  related 
simplifications  for  trusted  traders.  Section  2.5  will  detail  how  the  process  would  work  in 
practice along the supply chain.  

Having complied with the requirement of having a system-to-system connection to customs, 
the  Trust  and  Check  traders  share  with  customs  details  from  commercial  transaction 
records such as transaction values, buyers, sellers, consignees, classifications, manufacturers, 
product  related  information  (prohibition  and  restriction)  and  commercial  or  transport 
references.  Therefore,  there  is  automated  provision  of  information  from  the  operator  to 
customs that allows to latter to monitor the flows started by the former. 

This  information  might  be  relevant  for  several  consignments  but  traders  will  upload  it  in 
their  system  and  provide  it  or  make  it  available  to  customs  (and  ideally  other 
authorities)  only  once.  The  operator  will  share  it  as  early  as  possible  in  the  supply  chain, 
ideally before arrival or exit, for use in connection with the arriving or leaving consignments, 
respectively.  This  commercial  information,  which  may  be  sensitive,  would  be  provided 
directly  to  authorities  (limiting  therefore  its  external  handling).  The  information  (or  a  great 
part of it) becomes part of the overarching system under which each individual transaction is 
assessed. As regards products and transactions, the data received should for that reason be of 
better quality than what is received in current customs declarations. 

Before arrival  or  exit, the carrier will have on these traders’  goods pre-existing information 
that  will  make  its  own  filing  of  the  advanced/pre-departure  cargo  information  easier  and 
quicker and would allow at arrival to the border to move these traders’ goods unless customs 
instructs otherwise, without the need of any additional declaration. 

As  a  result  of  the  automated  provision  of  information,  the  operator  would  be  authorised  to 
self-release  the  goods,  calculate  and  pay  the  customs  duties  periodically  and  monitor 
compliance  with  non-fiscal  requirements,  rather  than  on  submitting  transaction-based 

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customs  declarations  per  consignment.  Only  the  advance  cargo  information  will  still  be 
required per consignment.  

For the release of the goods, the UCC would only  establish the  minimum information for 
the importer or exporter or carrier to submit to show compliance with fiscal and non-
fiscal  requirements.  This  minimum  information  would  be  based  on  the  existing  Annex  B, 
enriched with some key data elements, such as the manufacturer of the goods. However, the 
operator could choose to provide further information to customs, particularly the information 
necessary  to  show  compliance  with  non-fiscal  requirements  for  a  series  of  consignments, 
without the need of a separate declaration (and acceptance) for each of them. 

The  flexible  approach  to  the  provision  of  data  to  customs  by  trusted  economic  operators 
would  allow  them  to  provide  customs  the  information  in  several  formats  and  not  just  a 
predetermined  one.  Since  the  operator’s  IT  system  is  known  and  connected  to  customs 
because  it  is  a  reliable  trader,  the  possibility  to  use  different  formats  for  the  information 
provision is enhanced compared to non-Trust and Check traders (as mentioned in section 2.2). 

In return for transparency and system-to-system exchange of information, the trusted operator 
would experience far fewer and more targeted customs interventions in the supply chain, 
when  these  are  necessary.  According  to  the  case,  they  would  generally  receive  advance 
warnings for controls and/or deferral of checks and formalities to convenient locations. They 
would  comply  with  financial  (and  to  the  greatest  extent  possible,  non-financial)  obligations 
away  from  the  physical  border  crossing  points,  based  on  commercial  records  and  business 
controls rather than based on customs clearance formalities. Thus, if controls are needed, the 
customs authorities could move them away from the border to the operator’s premises or final 
destination  of  the  goods.  As  a  result,  their  supply  chains  would  benefit  from  greater 
predictability  and  lower  friction  (this  would  reduce  their  non-regulatory  costs  related  to 
storage, demurrage, etc.). 

Furthermore, some authorised importers/exporters subject to the prior agreement of the other 
competent authorities, also could carry out not only some customs controls, but also certain 
other  ones  generally  performed  by  the  other  competent  authorities.  These  control  activities 
would be organised by the importer /exporter itself avoiding waiting for any of the authorities, 
meaning  that  also  the  flow  of  goods  subject  to  prohibitions  and  restrictions  would  be  more 
fluent and predictable. 

Although  the  traders  would  by  default  be  allowed  to  release  their  goods  in  their  systems, 
without waiting for a formal acceptance by customs, the customs authorities would always 
retain  the  possibility  to  select  goods  for  a  control  and  could  under  certain  conditions 
remove the traders’ ability to ‘self-release’ goods. This would be reflected in an immediate 
customs’ action that would prevent the trader from continuing self-releasing the goods. 

By  contrast,  operators  that  would  not  be  eligible  to  the  Trust  and  Check  approach  (i.e. 
those  that  do  not  offer  customs  visibility  over  their  supply  chain  via  the  system-to-system 
exchange of information) would not benefit from the above-mentioned smoother flows. They 
would  be  obliged  to  continue  operating  on  a  transaction-based  approach  and  would  have  to 
provide information for importing or exporting goods for each and every consignment.  

Hence, they would not be able to enter, exit or place the goods in a customs procedure until 
customs  authorities  have  been  provided  the  required  information.  On  the  consignment  non-
transparent  traders  would  have  to  lodge  comprehensive  guarantees  without  reduction  and 

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would  undergo  more  controls,  at  the  border  or  a  posteriori.  Trade  flows  of  non-transparent 
operators would therefore be slower, more cumbersome and arguably more expensive.  

Table  1:  summary  of  the  differences  between  the  Trust  and  Check  operators  and  other 
operators. 

Trust and Check 

Not Trust and Check 

Share part of the data in advance 
with customs (via Data Space in 
options 3 and 4). Account 
payment. 
Data re-used, including across 
different consignments 

Give all details per consignment 
(single filing: via Data Space in 
options 3 and 4). 
Data re-used for the 
consignment. 

Account-based 
(fed if applicable by SW) 

Give all docs per consignment  
(also fed if applicable by SW) 

Data for duties 

Data and docs for 
non-fiscal 
formalities 

Control planning 

Pre-warned where possible. 
Agreements to carry out some 
controls elsewhere if needed. 

Signal only on arrival 

More common (according to 
risk) 

Control at border 

Rare (e.g. hijacked consignment) 

Release inbound 

Transfer between 
Member States 
pre-release 

Typically automated (no flag, no 
pause) 

Also automated (more friction to 
extent more data, docs, risk) 

Carrier handles the status 
messages 

Trader needs to be covered by 
‘transit’/guarantee 

Guarantee level 

Lower 

Higher 

2.4 Specific customs process for low value consignments (e-commerce) 

As described in chapter 2 of the report, the current challenges faced by customs authorities are 
particularly  acute  as  regards  e-commerce  supplies,  i.e.  low  value  consignments  sent  from 
third countries to private individuals/consumers in the EU. 

The customs reform could bring solutions to these challenges by adapting the process to take 
into  account  the  specific  features  of  B2C  e-commerce  flows,  as  described  in  the  sections 
below. 

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2.4.1 Removal of the threshold 

In 2017, in the Council decided to eliminate the VAT exemption for imported goods valued 
up to EUR22 as from 2021. The reason was the need to adapt the VAT rules to the evolution 
deriving from the completion of the internal market, globalisation, and technological changes, 
which resulted in an explosive growth of electronic commerce and therefore of distance sales 
of  goods.  Such  adaptation  in  the  VAT  field  aims  to  protect  Member  States'  tax  revenue,  to 
create  a  level  playing  field  for  the  businesses  concerned  and  to  minimise  burdens  on  them. 
Accordingly, from July 2021, all imported goods are subject to VAT and covered by a digital 
customs declaration, including for goods valued up to EUR 150 for which no customs duties 
are due. 

However, the customs duty exemption for goods below EUR 150 has been maintained, but 
left  the  door  open  for  the  systematic  abuse  of  that  threshold  through  undervaluing  and 
splitting consignments. A study conducted by Copenhagen Economics in 2016 estimated that 
about 65% of the e-commerce consignments are undervalued in terms of customs duties. (139) 
Furthermore, as noted by the Wise Persons Group report, by pushing exporters to the EU to 
break consignments down into smaller packages the EUR 150 threshold provides the wrong 
incentives  both  in  terms  of  trade  (unfair  competition)  and  of  environmental  sustainability 
(higher emissions footprint). 

At the same time, in a digitalised customs environment where electronic data are available for 
all imported goods  regardless of their value, keeping a duty exemption which was based on 
the disproportionate administrative burden does not  seem  justified any longer. Therefore, in 
the reform of the customs processes, the customs duty exemption for goods up to the value 
of EUR 150 would be removed.  

Consumers  would  greatly  benefit  from  more  clarity  on  the  final  price  when  buying  goods 
from outside the EU. Today, they are often confronted with high postal or courier fees upon 
delivery  of  the  goods  that  are  not  known  at  the  time  of  purchase,  which  diminishes 
consumers’  satisfaction.  Considering  that  the  average  duty  rate  is  relatively  low (140),  the 
removal  of  the  customs  duty  relief  threshold  is  not  expected  to  significantly  increase  prices 
but,  by  contrast,  it  will  increase  their  transparency.  As  confirmed  in  a  survey  conducted  by 
PostNord, (141)  the  clarity  on  the  final  price  is  an  important  factor  for  consumers  when 
ordering goods from outside the EU. 

2.4.2 Simplified customs duty calculation  

The removal of the EUR 150 duty relief threshold would need to be replaced by a mechanism  
to ensure the collection of customs duties on all imported goods, regardless their value, could 
be  offset  by  adequate  simplifications.  Under  the  current  UCC  rules,  the  EU  consumer  (the 
buyer  of  the  goods)  is  the  importer  and  therefore  in  principle  the  one  responsible  for 
complying with  all customs  formalities. However,  this legal  scheme does not  correspond to 

(139) Copenhagen Economics (2016), E-commerce imports into Europe: VAT and Customs treatment. 
(140) The most typical goods purchased online with the average EU customs tariff rate are the following: 
- 
- 
- 
- 
- 
(141) e-commerce-in-europe-2020.pdf (postnord.se) 

electronics (2,20% or 0%),  
clothes (12%) and footwear (5,11% );  
toys (2,70%),  
food, groceries (~24,5% ),  
books (0%). 

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the reality where the platforms, sellers or other intermediaries (transporters, postal operators 
etc.) carry out the customs formalities for e-commerce goods on behalf of the importers.  

The second measure considered in the reform is therefore to make platforms liable for the 
collection of customs duties by having them charged at the moment of the sale. This would 
align the customs treatment of low value consignments with the applicable VAT regime for 
online  sales.  Member  States’  responsibility  for  making  available  the  Traditional  Own 
Resources would not change. 

The  calculation  of  customs  duty  is  a  complex  task  based  on  three  factors:  (i)  the  tariff 
classification and the related duty rate; (ii) the customs value and (iii) the originating status of 
the goods. Applying the standard rules for duty calculation in e-commerce transaction would 
result  in  many  cases  in  a  disproportionate  administrative  burden  both  for  the  customs 
administrations and businesses in particular in respect of the revenues.  

In order to facilitate the role of the e-commerce intermediaries/platforms, a simpler method to 
calculate the customs duties could be introduced.  

The use of the simpler method will be optional: the importer would have the possibility to opt 
for  the  new  method,  or  use  the  standard  rules,  even  on  a  case-by-case  basis  (e.g.  to  benefit 
from more favourable tariff rates due to the preferential origin of the goods).  

The simplified rules will apply to low value consignments up-to a total value of EUR 1 000, 
in accordance with the statistical threshold for extra-EU trade (142). The simplification would 
be primarily, but not exclusively used in relation to e-commerce goods. For example, citizens 
could also benefit from it if the value of the gift they receive from abroad exceeds the EUR 45 
duty  and  VAT-free  threshold,  or  SMEs  importing  low  value  goods  for  their  business 
activities. 

Simplified duty rate system (‘bucketing system’) 

The concept of the simplified duty rate system, the so-called ‘duty bucketing system’ is based 
on a Canadian model that is in place since 2012 in  relation to goods destined to private use 
(business-to-consumer or consumer-to-consumer goods) with a value up-to CAD500 (around 
EUR 340). (143) According to the approach there are a limited number of ‘duty buckets’ each 
of  them  including  clearly  specified  categories  of  goods  with  a  fixed  duty  rate.  Within  the 
bucketing  system,  the  applicable  duty  rates  for  individual  products  may  be  slightly  higher 
compared to the applicable rate based on the full commodity code.  

The  reform  could  foresee  4  buckets  with  respective  ad  valorem  duty  rates  of  5%  (e.g.  for 
toys,  games,  houseware  articles),  8%  (e.g.  for  silk  products,  carpets,  glassware),  12%  (e.g. 
for cutlery, electrical machinery) and 17% (e.g. for footwear) and containing goods based on 
their  6-digit  Harmonised  System  code  number  that  remains  a  requirement  for  pre-arrival 
cargo  requirements.  Goods  having  a  0%  erga  omnes  duty  rate  currently  will  continue  to 
benefit  from  zero  duties.  The  bucketing  system  would  also  account  for  potential  revenue 

(142) Regulation (EC) No 471/2009 of the European Parliament and of the Council of 6 May 2009 on Community 
statistics  relating  to  external  trade  with  non-member  countries  and  repealing  Council  Regulation  (EC)  No 
1172/95 (OJ L 152, 16.6.2009, pp. 23-29) 

(143)  

 Canada’s Low-Value Shipments Policy Regarding the Application of Customs Duties, WTO Working 

Group on Micro, Small and Medium-sized Enterprises September 2021. 

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losses,  for  example  from  anti-dumping  duty,  countervailing  duty,  and  specific  agricultural 
duty elements. Effectively, applying the bucketing system should not result in revenue losses 
for the EU and the Member States, but it would ease the compliance burden for operators (at a 
- potentially - slightly higher customs duty cost).  

The bucketing system is based on the  erga omnes duty rates and does not take into account 
the originating status of the goods. However, if the (deemed) importer wishes to benefit from 
preferential  tariff  rates  by  proving  the  originating  status  of  the  goods,  he/she  can  do  so  by 
applying the standard procedures. 

This  simplification relates to  the calculation of  customs duties.  It  does  not  remove the need 
for classification of products for non-fiscal purposes and to enable effective risk management.  

Simplified customs valuation rules 

With the removal of the EUR 150 threshold, the notion of intrinsic value (144) will disappear 
and  the  valuation  rules  based  on  the  WTO  Customs  Valuation  Agreement  will  apply  to  all 
goods. In the baseline scenario, customs value is based on the transaction value and includes 
the costs of transport and insurance (practically often referred to as ‘Cost, Insurance, Freight 
(CIF)-based’) up-to the EU border and the UCC specifies the elements that have to be added 
or can be deducted from the customs value.  

Under the simplified rules, the transaction value will still be considered  as the basis for the 
customs  value;  however,  there  would  be  no  possibility  of  additions  or  deductions  regarding 
transport  and  insurance  costs.  Therefore,  the  customs  value  will  be  the  net  checkout  price 
without  duties  and  taxes  but  including  transport  and  insurance  costs  up-to  the  destination. 
Consequently,  arbitrary  and  theoretical  ways  of  determining  the  customs  value  would  be 
excluded. In case of successive sales, the price paid by the EU consumer should be decisive 
for  determining  the  customs  value.  This  price  is  easier  to  verify,  as  it  can  for  example  be 
checked  against  the  invoice  or  sales  confirmation  as  provided  to  the  consumer  or  against 
information available from payment service providers. 

2.4.3 Liability of the platforms 

As  briefly  mentioned  above,  the  reform  would  introduce  stronger  responsibility  of  the  e-
commerce  intermediaries  in  relation  to  the  customs  formalities  on  the  goods  sold  by  them. 
The  online  platforms  would  need  to  provide  or  make  available  to  customs  the 
information  on  the  goods,  calculate  and  collect  the  applicable  duties  at  the  moment  of 
sale, as under the VAT  scheme of the  Import  One Stop  Shop (IOSS). This  would align the 
customs and VAT rules for the same type of transaction, bringing clarity and simplifications 
for both traders and customs authorities. 

To  ensure  that  e-commerce  intermediaries  become  importers,  a  notion  of  deemed 
importer should be introduced, and the definition should be aligned with the VAT legislation 
and the recently adopted Digital Services Act, particularly as regards the existing mechanism 
for registration and the  criteria for  considering establishment in  the Union. Periodically, the 
platform would pay the duties to the Member State of registration, which would make them 

(144) The intrinsic value is the actual value of the good and, contrary to the customs value, in principle it does not 
include any other costs such as transport, insurance and freight. The EUR 150 threshold for duty exemption 
is measured on the intrinsic value of goods. 

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available to the EU budget. The concept of ‘deemed importer’, however, would go beyond the 
financial liability for the collection of customs duties and VAT and would also cover  non-
financial aspects, within the limitations of the Digital Services Act. 

As for the transport layer, the carriers would file advanced cargo information and notify the 
arrival of the goods. The information on arrival would be linked to the information previously 
provided at the moment of sale, moving compliance away from the border while empowering 
customs  to  intervene  where  necessary  too.  This  possibility  to  link  platform  and  carrier 
information is available today for any consumer buying goods online so customs should also 
be able to see it and benefit from it. 

If  such  simplifications  are  implemented  in  a  Data  Space  (Options  3  and  4),  there  would  be 
solutions  for  EU  wide  supervision  of  both  individual  consignments  for  which  information 
have been given by the traders and movements of thousands of similar shipments across the 
EU to identify trends and patterns. With this overall view of the trade flows, customs action 
could impact all similar goods, in case of misapplication of the applicable rules, and reduce 
room  for  fraud  such  as  in  case  of  wrong  classification  or  undervaluation.  In  addition,  as 
mentioned  in  the  conclusions  of  the  high-level  seminar  organised  under  the  Slovenian 
Presidency of the Council, there is the need of ‘fostering cooperation and sharing of data with 
other  authorities,  including  market  surveillance  and  other  law  enforcement  authorities  in 
order to strengthen compliance with non-financial risks’, which would be greatly facilitated 
by a central digital solution for e-commerce. 

2.4.4 Extension of IOSS – collection of customs duties on e-commerce goods 

The  removal  of  the  EUR  150  de  minimis  threshold  and  the  shifting  of  the  liability  to  the 
platforms to collect the customs duty is a common element in all options. Such liability (the 
so-called ‘deemed supplier’ status) would be based on the current concept of the VAT Import-
One-Stop-Shop (‘IOSS’), a concept that has already proven to have a positive impact on the 
administrative  burden  for  businesses,  increase  the  efficiency  and  effectiveness  of  collecting 
the VAT due on the distance sales of imported low-value goods by reducing undervaluation 
following the experience gained during its first year of implementation. 

The extension of the scheme to cover the collection of customs duties would not change the 
current rules for the registration of traders; they would need to register only once for IOSS 
and this would cover VAT and customs purposes. 

Customs duty and VAT would both be charged at the moment of placing an order using the 
VAT rate of the Member State of the consumer and the simplified rules for the calculation of 
import duty. 

Upon arrival to the EU of such e-commerce goods, there would be no need to pay VAT and 
customs  duties,  if  valid  EU-IOSS  number  is  provided,  customs  can  verify  the  payment  of 
import duties and taxes prior to the release of the goods in the EU. 

The  platforms  will  be  obliged  to  send  commercial  data  to  customs  on  a  regular  (e.g.  daily) 
basis,  but  in  any  case  prior  to  the  arrival  of  the  goods  into  the  EU  and,  ideally  before  the 
lodgement  of  the  entry  summary  declaration  by  the  carrier  so  that  the  information  could  be 
used in risk analysis and the carrier would not have to obtain the commercial data in another 
manner. To maintain the possibility to import IOSS goods in any Member State regardless of 
the final destination of the goods, it is essential that the platform send the transactional data 

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into  a  central  system.  By  accessing  the  data  in  the  central  system  may  allow  the  customs 
authorities  at  destination  to  perform  risk  analysis  on  national  prohibitions  and  restrictions 
prior to the arrival of the goods. 

The payment of customs duties will be made to the customs authorities of the Member States. 
The obligation to carry out post-release controls would lie with the Member States. 

2.5 Supply chain processes – a closer look 

The new paradigm is best understood by mapping the activities of the groups of players 
involved in the main events across the supply chain, as per the illustrative diagram below.; 

Figure 1: visualisation of the events and of the customs-related activities of the players 
involved in the supply chain 

‘T&C’ = Trust and Check. ACI = Advance Cargo Information. MS = Member State. 

2.5.1 Transaction phase/pre-consignment 

Trust and Check traders share with customs details from commercial transaction records 
(transaction values, buyers, sellers, consignees, classifications, manufacturers, product related 
information/prohibition  and  restriction)  and  commercial  or  transport  references.  This 
information  might  be  relevant  for  several  consignments  but  traders  will  upload  it  in  their 
system and provide it or make it available to customs only once. They will share it as early as 
possible,  ideally  before  arrival/exit,  for  use  in  connection  with  the  arriving  or  leaving 
consignments.  

Other  authorities  might  also  have  a  role  in  Trust  and  Check  traders’  supervision.  Customs 
and other authorities may agree on a supervision approach which pushes some non-financial 
product  checks  or  documentation  checks  away  from  the  border,  for  example  if  a  Trust  and 
Check  trader  is  going  to  import  the  same  kind  of  goods  hundreds  of  times  from  the  same 

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supplier. The extent to which this arises in practice would be determined through progress on 
co-operation  frameworks  (see  Annex  6).  This  is  a  significant  change  compared  with  the 
current  AEO  programme  by  providing  additional  benefits  in  relation  to  non-financial 
compliance obligations. 

2.5.2 Pre-loading 

Before  the  goods  leave  the  third  country,  the  carrier  should  submit  the  advance  cargo 
information that is necessary for the customs to carry out risk analysis for safety and security 
purpose. This  is  an obligation for all consignments  to  be brought  into the customs territory, 
regardless of whether the importer is a Trust and Check operator or not. 

At  this  moment,  the  carrier  will  be  required  to  check  in  the  customs  systems  whether  the 
importer  (or  the  exporter)  has  already  provided  information  on  the  goods  in  the  transaction 
phase. If so, the carrier will link its own information on transport (route, arrival information, 
means of transport details) to what has already been provided, and will have to provide any 
missing advance cargo information in order to be able to move the goods. If no information 
was previously filed, the carrier will have to submit the required advance cargo information 
(this is also the case for non-Trust and Check operators). 

The consignment is created and is security-screened (to assist in detection of security threats 
such as an improvised  explosive device concealed in  air cargo). The importer will typically 
rely on the carrier to  give customs the advance cargo data (which launches the consignment 
for  customs  purposes).  Customs  perform  risk  management  and  tell  the  carrier  if  there  is  a 
problem.  

Up  to  this  point,  the  process  is  the  same  as  the  baseline;  what  changes  is  that  if  any  pre-
consignment  data  was  provided  at  the  transaction  stage,  this  will  also  be  connected,  to  the 
consignment to allow better risk analysis. If a security question arises from the risk analysis, 
customs  will  interact  with  carriers  on  it.  Security  authorities  may  help  with  targeting.  Any 
future  interoperability  between  security  and  customs  systems  would  have  an  operational 
application in this process. 

2.5.3 Pre-Arrival 

In the new paradigm, all risks should be assessed as far as possible before arrival. This will be 
the case for Trust and Check traders which will have provided more transparency already (in 
the context of their authorisation and the ongoing sharing of data).  

The  carriers  complete  the  minimum  advance  cargo  information  filing  (similar  to  baseline, 
supplementing what was provided on the consignment before loading).  

Customs risk analysis will identify possible controls (if any) and they are planned.  

Other  authorities  may  contribute  to  targeting  (for  example,  a  market  surveillance  authority 
might share details of non-compliant toy suppliers).  

Interoperability  between  customs  and  other  systems  would  also  have  an  operational 
application at this point in the processes. The Single Window Environment for Customs could 
be used to cover consignment formalities, such as certificates, licences or other. 

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2.5.4 Arrival and release 

Customs  must  continue  to  be  informed  that  the  goods  have  arrived  to  the  Union.  In 
principle  that  obligation  would  continue  to  be  fulfilled  by  the  carrier  in  the  customs  IT 
systems. However, another possibility would be to integrate in the customs IT environments 
signals from port or airport community systems or, at land borders, connections to railways or 
motorways control systems to learn about the arrival of the goods.  

It  may  further  be  noted  that  in  practical  terms,  modern  trade  often  involves  subcontracting, 
groupage,  etc  and  that  a  given  arriving  means  of  transport  might  involve  more  than  one 
‘carrier’ in commercial terms (where some of the space on the truck or vessel has been hired 
by a ‘carrier’ who has the relationship with the importer, for example). The transport operator 
will  always  notify  arrival  of  the  means  of  transport  and  the  consignments  for  which  it  is 
carrier;  it  may  be  necessary  to  cater  for  supplementary  linked  notifications  by  additional 
‘carriers’. 

In  the  case  of  Trust  and  Check  traders,  the  practical  implication  is  that  goods  can  be 
released in most cases without provision of information on arrival – the transport notification, 
when  connected  with  the  importer’s  parameters  in  the  customs  system,  will  typically  be 
sufficient to allow the goods to keep on moving. The Trust and Check trader’s account in the 
customs system should hold connected transaction data, documents and reference data which 
provide sufficient assurance regarding compliance and accountability without the operational 
provision of additional documentation in the ports. 

The  importer  or  exporter,  in  its  records  provided  to  customs  real  time,  will  also  be  able  to 
determine  the  status  of  the  goods  after  arrival,  whether  they  are  union  or  non-union  goods 
(and for the later whether they are  in temporary storage or in transit). As the information is 
provided  in  advance,  the  desired  status  on  arrival  can  also  be  indicated  by  the  importer  in 
advance, opening the way to instant release. By default (absent any indicator by the importer), 
they will be considered non-Union goods in temporary storage.  

When  an  importer  releases  the  goods  into  free  circulation,  it  must  pay  the  customs  debt,  in 
principle  immediately.  However,  Trust  and  Check  traders  would  be  allowed  to  pay  them 
periodically, under certain conditions, including a guarantee if necessary.  

The carrier will receive status information automatically from the customs systems so that it 
knows immediately if there is any requirement to stop or control the goods.  

There  are  two  primary  reasons  for  which  customs  interventions  are  not  fully  ruled  out  for 
Trust  and  Check  traders  (even  though  they  are  greatly  reduced).  Firstly,  it  can  happen  that 
supply  chains  or  transports  are  exploited  (hi-jacked)  by  criminal  operators  (which  have 
nothing  to  do  with  the  Trust  and  Check  trader  itself  –  well-known  examples  include  the 
addition  of  cocaine  to  banana  containers  destined  for  major  retailers).  Secondly,  some  non-
customs  formalities  need  to  be  applied  routinely  based  (again)  on  supply  chain  conditions 
rather than the operator’s behaviour. While it is true that the EU Single Window Environment 
for Customs will streamline the provision and use of non-customs formalities by customs, it 
will not cover those non-customs formalities which have not been digitalised (at least partly) 
by the EU. In fact, for some categories of goods, the manual supply of documentation by the 
economic  operator  may  continue  to  be  required;  this  depends  in  part  on  the  cost/benefit 
assessment  that  the  digitalisation  of  a  non-customs  formality  brings  (e.g.  Kimberly 
certification scheme for diamonds) and the extent to such digitalisation can be achieved by the 

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Union, or it should be achieved by Member States. The latter consideration prompts also the 
question on whether the cooperation between customs and non-customs authorities at national 
level is fully digitalised, thus bringing more facilitations for traders. 

If  the  importer  is  not  a  Trust  and  Check  trader  or  has  not  provided  information  at  the 
earlier stages, it provides all the data and documentation required for the arrival of the goods 
and for their release, as  well as a guarantee. This person needs to wait for customs reaction 
before letting the goods arrive into the EU customs territory and release them.   

If a control is needed, customs can arrange it. Other authorities could be involved (they might 
have given signals or need to react to signals identified on arrival). The Single Window is also 
used to cover consignment formalities at this point.  

Both  for  Trust  and  Check  and  other  traders,  the  legal  principle  could  be  established  that, 
under specific circumstances, the release for free circulation of the goods is not deemed to 
be  proof  of  conformity  with  Union  law.  Accordingly,  if  there  is  cause  to  believe  that  the 
goods do not comply with the Union law applicable to them or that they present a serious risk 
to  health,  safety,  the  environment  or  any  other  public  interest,  Customs  may  inform  the 
operator  and  suspend  the  release  of  goods  for  free  circulation  during  a  maximum  period  of 
time.  The  IT  environment  should  allow  for  that  possibility.  Where  more  time  is  needed  to 
assess whether the good comply or not with Union legislation, the operator could be allowed 
to release the goods for free circulation on the condition that it provides customs records of 
the subsequent distribution of those goods within the Union market. 

2.5.5 Post-release 

The  importer  remains  liable  for  the  customs  debt  (which  the  importer  has  guaranteed)  and 
may  be  subject  to  post-release  controls  or  audits.  If  the  goods  have  been  released  for  free 
circulation  on  the  condition  that  information  on  subsequent  distribution  is  provided,  the 
importer will have to provide it. 

The  Member  State  customs  has  established  the  customs  debt  and  is  accountable  for  this  in 
terms  of  Traditional  Own  Resources,  and  customs  carry  out  audits,  investigations  etc.  as 
needed (as per baseline). This position is not affected by any support which may have been 
provided at the EU level in any of the Options. 

In cases where controls have resulted in detections, other authorities may also take follow-up 
actions.  For  example  if  one  bad  toy  is  found  by  customs,  a  Market  Surveillance  Authority 
might take action in relation to the supply chain, including interaction with the e-commerce 
platform  (if  relevant)  on  its  responsibilities.  The  extent  to  which  systematic  follow-up  is 
facilitated will vary with the Options, depending on the presence of a Data Space or not. 

2.5.6 Information environment considerations 

The  practical  implementation  of  the  new  approach  (including  the  scope  and  modalities  for 
sharing, using and re-using data) will depend on the information environment.  

In Options 3 and 4, the EU customs Data Space would allow for a single interface and for use 
of  the  data  in  the  trader’s  customs  processes  EU-wide.  It  would  also  allow  for  account 
configurations  for  each  importer  (storing,  using  and  re-using  relevant  details  such  as 
guarantee  levels,  compliance  documentation  applicable  to  product  flows,  Trust  and  Check 
authorisation details, duty calculations, etc.). It would allow trade players to give the data that 

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they are best placed to give and to give it once. The linking of data provided by importers and 
carriers  across  different  states  of  the  supply  chain  and  different  Member  States  would  be 
orchestrated in the Data Space. 

Figure 2: visualisation of an operational scenario for e-commerce, with Data Space. 

Source: Study on an integrated and innovative overhaul of EU rules governing e-commerce  transactions from 
third countries from a customs and taxation perspective (PriceWaterhouseCoopers, 24-09-2022) 

In  Options  1  and  2,  the  implementation  of  the  new  paradigm  would  require  substantial 
changes  to  the  national  customs  IT  environments  and  simultaneous  development  of  the 
necessary IT capabilities within and between all Member States and the Commission. 

2.6 Customs supervision considerations – a closer look 

When reforming the customs process model, it is important to consider the structural impact 
of  the  change  on  the  ability  of  customs  to  effectively  identify  and  supervise  trade,  to  select 
consignments  for  control  at  suitable  intervention  points,  to  ensure  effective  accountability, 
and to avoid unintended consequences (loopholes).  

None of the options under consideration introduce any structural weaknesses compared with 
the  baseline.  All  the  options  improve  the  structure  and  overall  supervision  capability,  to 
different extents, with the following relevant features: 

  All  consignments  coming  to  or  through  the  customs  territory  of  the  EU  must  be 
identified  to  customs  with  minimum  common  standardised  data  requirements. 
Customs retain the right to carry out controls under the UCC, as currently. 

  All  consignments  entering  the  EU  do  so  under  the  responsibility  (and  financial 
guarantee)  of  an  importer  established  in  the  EU  (or  not  established  but  having  an 
appropriate guarantee).  

  Online  platforms  and  marketplaces  will  provide  commercial  information  (details  of 
goods  and transaction values) which  will be available in  time to  use in  customs risk 
analysis  on  consignment  flows,  and  also  for  strategic  risk  analysis.  This  will 
strengthen supervision  of e-commerce consignments  substantially compared with  the 
baseline.  These  additional  data  flows  may  not  be  available  for  every  e-commerce 
consignment (e.g. direct web sales from smaller platforms which might choose not to 
engage  with  Trust  and  Check,  dark  web,  etc.)  –  however  the  overall  capacity  to 
identify filter  e-commerce flows into more  and less risky  will substantially improve, 

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and  the  financial  liability  and  accountability  of  the  major  flows  will  be  significantly 
strengthened, compared with the baseline. 

  Any  alleviation  of  the  minimum  data  requirements  is  conditioned  on  ex  ante 

demonstration of reliability through Trust and Check status.  

From  the  perspective  of  national  customs  administrations,  their  involvement  in  customs 
risk management continues to be supported by real-time data flows, and they continue to be in 
a  position  to  identify  consignments  for  intervention  at  border  crossing  points  or  at  other 
locations.  Goods  continue  to  remain  under  customs  supervision  (with  clear  commercial 
accountability) until the status ‘released’ is applied. In Options 3 and 4, the information would 
be created and processed at central level but can also be distributed to national environments 
to  the  extent  necessary  for  common  business  processes  (e.g.  security  screening  of  national 
data  flows  in  co-operation  with  national  security  services)  or  national  processes  (e.g.  local 
copies and processing for national formalities). 

From  the  perspective  of  the  EU  services,  their  capacity  to  perform  within  their  existing 
competences in the customs union is supported in all options. The investigative competences 
of OLAF would not be affected. The roles of the Commission and the Member States as per 
the Making Available Regulation (145) would not be affected. 

Another key feature of this reform is that advance cargo information and clearance-oriented 
information are merged, enabling risk management for both financial and non-financial risks 
to be rationalised and carried out as far in advance of arrival as possible. Economic operators 
which  are  not  Trust  and  Check  will  still  have  an  interest  in  providing  fuller  information  in 
advance, as this increases the likelihood of instant release on arrival. 

Overall, customs authorities would be empowered to better supervise the goods entering 
and  exiting  the  Union  customs  territory.  Not  having  to  react  to  declarations,  even  if  this 
task is today highly automated, should liberate resources in customs to concentrate on a better 
and  EU  based  risk  management.  Indeed,  a  meaningful  and  efficient  customs  reform  would 
bring  significant  improvements  to  the  existing  risk  management  in  the  EU.  In  the  new 
model, the customs authorities would at any moment be able to verify the importer’s records, 
including by putting in place automated  compliance checks. The new process structure does 
not in itself affect the responsibilities of customs for granting and supervising authorisations. 
That said, with Options 3 and, 4, the information environment and/or governance context for 
streamlining the granting and supervision of authorisations in a uniform across the EU would 
improve. 

2.7 Big picture: Simplification 

The  baseline  involves  some  repetitive  creation,  exchange  and  declaration  of  data  across 
commercial players, transport intermediaries, and customs.  

The charts which follow illustrate the difference, in one specific maritime transport scenario, 
between  the  baseline  processes  and  the  reformed  processes.  It  is  slightly  simplified.  The 

(145) Council Regulation (EU, Euratom) No 609/2014 of 26 May 2014 on the methods and procedure for making 
available the traditional, VAT and GNI-based own resources and on the measures to meet cash requirements 
(Recast). 

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commercial flow is what happens on the business side. Goods are sold, they move to a port 
(by carrier 1), they get loaded on a ship (carrier 2), they arrive in an EU port and are handled, 
picked up by carrier 3, move on to another Member State by truck), and they are put on the 
market (by the importer).  

Exporters and importers have to provide data and documents to their contracted carriers in the 
normal  course  of  their  business  (irrespective  of  customs).  These  are  typically  used  by  the 
carriers to  prepare some of the customs formalities  (notably, the advance cargo information 
cycle, which supports pre-loading and pre-arrival risk assessment, as well as presentation and 
arrival  notifications).  Importers  often  use  customs  clearance  agents  to  make  customs 
(including transit) declarations, and have to make sure their agents (and transit carriers) have 
transport  and  commercial  data  needed  to  carry  out  these  processes.  The  importer  may  be 
dealing with one agent handling the port of entry (perhaps linked to the carrier 3) and another 
(assumed in this scenario) in the Member State where the goods are released. 

The baseline diagram gives an idea of the extent to which different exchanges of information 
have to be supported to implement the customs processes in the scenario. 

What is immediately clear in the simplified customs processes scenarios is that the number of 
information  transmission  points  is  very  significantly  reduced,  and  the  nature  of  the 
information to be provided is directly aligned with the roles and capacities of the players. In 
the Data Space scenario (Options 3 and 4) a single EU portal integrates and re-uses the data, 
maximising  the  simplification.  Without  the  Data  Space,  the  third  diagram  show  that  some 
national  submission  points  are  retained,  and  there  is  a  more  complex  integration  task  to  be 
managed between national customs administrations.  

In Trust and Check, customs connect the data and enable it to be re-used (by carriers and by 
other  customs  offices).  Transporters  give  transport  notifications.  Guarantees  are  reduced  or 
waived. Customs duty and non-fiscal compliance formalities are handled as far as possible in 
the background. Interventions are minimal– in general, goods move. 

In  the  non-Trust  and  Check,  the  importer  is  responsible  for  providing  full  information  on 
arrival  in  a  single  custom  filing  if  not  already  provided,  per  consignment,  and  providing 
guarantees. Carriers provide full advance cargo information, with a multiple filing approach. 
The importer or carrier would also have to provide a transit filing (covered also by guarantee). 
Even in non-Trust and Check scenarios, the customs union business is substantially simplified 
(procedural steps and their associated declaration requirements are removed, and in the Data 
Space scenarios, handled more efficiently across the EU). 

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Figure 3: visualisation of customs processes today (baseline) 

Figure 4: visualisation of the simplified customs processes in options 3 and 4 (with Data Space) 

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Figure 5: visualisation of the simplified customs processes in options 1 and 2 (no Data Space) 

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Annex 6 - Reform of the customs union: reforming 
co-operation – a new framework  

Introductory notes – understanding this Annex 

The subject of co-operation, by definition, addresses relationships between the customs union 
(covered by the reform proposal) and other functions, policies and authorities (not governed 
by customs legislation and of course not covered by the reform proposal).   

As co-operation is  also  by definition between independent  parties, it is  not  possible to  fully 
define the outcomes of the framework in this impact assessment – clearly, the extent to which 
objectives  are  mutually  agreed  will  depend  on  the  engagement  and  the  decisions  of  both 
customs and non-customs partners. The customs  reform can prepare the  ground for a better 
co-operation but cannot deliver it on its own.  

The purpose of this Annex therefore is to identify the critical nexus points between customs 
and other authorities, and to  provide a coherent  structure (or framework) through which the 
handling of these relationships can be managed to the best strategic effect.   

Where possible, key concepts (for example, ‘supervision strategies’ information sharing, and 
working  together  to  develop  risk  indicators)  are  referred  to  in  other  parts  of  the  impact 
assessment, including the use cases. Other concepts (e.g. embedding customs union concepts 
in  other legislation) of course cannot  be covered more directly in  this  impact  assessment  as 
reform of other legislation is not the subject. 

1.  UNDERSTANDING THE CONTEXT AND BASELINE 

Under the UCC, customs must systematically supervise the goods crossing the borders and 
has the competences, procedures  and infrastructure to  intervene where needed in  the supply 
chain.  De  jure  and  de  facto,  this  is  the  EU’s  only  comprehensive  supply  chain  supervision 
capability.  Customs  is  a  major  actor  in  the  success  of  the  Single  Market,  created  with  the 
abolition of Member States internal frontiers on 01.01.1993.  

The mission of modern customs has evolved over the years to go beyond its original task of 
collecting  duties.  Nowadays  customs  should  be  considered  the  guardians  of  the  external 
dimension of the internal  market,  and  an  essential pillar in  protection of the public interest. 
Customs has to be the first efficient line of defence to ensure that products entering or leaving 
the  EU  are  compliant  with  the  EU  rules,  safe  and  secure  for  each  citizen,  while  creating  a 
level playing field for EU producers against non-EU ones. Customs capacities are of interest 
to all authorities which would like to ensure compliance with Union law and to intercept non-
compliant,  dangerous  or  counterfeited  goods  at  or  before  arrival.  Other  authorities  have  an 
interest in working with customs for example to  identify terrorist threats  in real time before 
goods  are  loaded  for  transport,  to  implement  trade  policy  or  sanctions,  to  respond  to 
international  security  or  health  crisis  situations,  or  simply  to  improve  their  overall  policy 
intelligence.  Customs  services  are  equally  of  interest  to  those  who  want  to  make  trade  run 
smoothly,  lighten  the  administrative  load  for  citizens  and  businesses,  including  SMEs, 

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promote economic growth, and collect taxes efficiently and fairly. Working with customs is 
therefore essential for the realisation of much of the value provided by many EU policies, and 
for certain policy areas it represents a fundamental driver.  

INFO BOX 1: What are prohibitions and restrictions? 

Customs  is  entrusted  with  a  broad  mission  going  beyond  the  traditional  task  of  revenue 
collection. These additional tasks are usually detailed not in customs legislation but in sectoral 
laws.  Customs  authorities  have  to  deal  with  safety  and  security  threats  and  control  product 
compliance  requirements,  food,  health  and  environmental  rules,  counterfeits,  cultural  goods 
and much more. The core of this non-fiscal role is commonly referred to as the enforcement of 
prohibitions and restrictions (P&R). More than 350 prohibitions and restrictions under EU 
laws  have  been  identified  in  connection  with  controls  to  carry  out  at  the  EU  external 
borders (146). In order to meet this extended obligation, increased by the growing complexity 
and  the  expanding  volume  related  to  e-commerce, a  high  degree  of  cooperation  with  Market 
surveillance, law enforcement and other relevant authorities is fundamental. 

In  order  to  ensure  the  enforcement  of  prohibitions  and  restrictions  and  the  same  level  of 
protection throughout the EU, both the policy design and the cooperation on cross-border 
issues need to have a strong operational dimension. This means ensuring that controls should 
be  capable  both  legally  and  practically  to  cover  the  entire  lifecycle  of  goods  entering  or 
leaving the EU. 

In  order  to  ensure  that  goods  comply  with  Union  legislation,  customs  interact  with  the 
sectoral authorities, who are responsible for the legislation and have the specific expertise to 
judge  the  compliance  of  those  goods.  In  practice,  the  interactions  between  the  customs 
union  and  sectoral  policies  are  not  yet  optimised.  While  customs  tasks  are  generally 
identified  for  major  policies,  they  have  tended  to  be  added  incrementally  under  different 
sectoral regulations, sometimes based on different operation logic depending on the nature of 
the  goods  and  the  applicable  prohibitions  and  restrictions.  For  example,  customs    and  other 
authorities play different roles when it comes to live animals by contrast with the case of toy 
safety.  The  limited  customs  involvement  in  policy  making  also  means  that  the  tasks  of 
customs  may  be  very  well  designed  against  a  specific  sectoral  policy  objective,  without 
considering  the  whole  range  of  tasks  that  customs  have  to  perform  also  in  other  policy 
domains.  Responsibilities  have  been  introduced  without  a  strong  strategic  connection  to  the 
actual capacities of customs, and without taking account of the full range of tasks allocated to 
customs or of ensuring a consistent, proportionate balance in procedures between what should 
be done at the border and what might be handled outside the real-time supply chain flow.  

Customs  authorities  have  to  control  the  wide  range  of  risks  (financial,  health,  security, 
environmental  or  other).  However,  today  there  is  no  prioritisation  of  these  risks  at  Union 
level, despite the fact that obviously not all risks should be tackled in the same manner. It also 
must  not  be  ignored  that  customs  can  perform  only  a  certain  number  of  controls  especially 
when it comes to physical checks.  

A further key area is IT systems and data. Overall, the lack of proper tools, integrated across 
the  different  customs  processes,  prevents  cooperation  for  an  effective  and  efficient 

(146) https://op.europa.eu/en/publication-detail/-/publication/d2f48d8b-b0a4-11ec-83e1-01aa75ed71a1/language-

en 

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enforcement of sectoral measures. Sectoral IT systems also exist only in a limited number of 
cases and, where they are in place, they have been developed for specific purposes relating to 
goods,  based  on  sectoral  operating  structures,  product  categorisations  and  administrative 
competences. The EU Single Window Environment for Customs initiative intervenes in this 
area,  by  ensuring  that  Union  non-customs  systems  are  made  interoperable  with  national 
customs  systems.  In  this  way  it  contributes  to  align  non-customs  policies  with  customs 
policies  on  the  operational  level,  by  making  sure  that  what  is  decided  by  non-customs 
authorities  is  correctly  translated  in  customs  interventions.  This  supports  a  consistent 
approach  and  intervention  logic  by  customs.  However,  such  intervention  is  strongly 
dependent  on  how  the  sectoral  policy  is  designed,  and  on  the  resulting  complexity  in 
interacting  with  customs.  Also,  the  EU  Single  Window  Environment  for  Customs  does  not 
deal  with  issues  such  as  risk  management  and  the  associated  identification  of  priorities  of 
controls.  

In  many  instances,  customs  do  not  have  the  necessary  information  about  the  features  or 
composition of products and on the supply chain to be able to enforce sectoral requirements. 
The identification of the goods using the information available in the customs declaration that 
was developed to cater mainly for financial risks (customs classification, origin, etc.) is not fit 
for  purpose  when  it  comes  to  enforcing  health  or  environment  legislation.  An  additional 
complexity  is  that  sectoral  authorities  developed  their  own  sectoral  product  categorisations 
that are not aligned with customs classification. The full potential of customs as a common 
asset,  and  especially  of  the  sharing  of  available  sectoral  policy  intelligence  for  risk 
management purposes by customs, is not being reached. As things stand, the incremental 
development  of  co-operation  has  indeed  resulted  overall  in  an  uneven  engagement  between 
customs and other policies and authorities. This lack of strategic co-ordination is costly when 
faced against the challenge of persistent and rapidly adaptable flows of illicit trade, which has 
been  further  amplified  by  the  explosion  in  traffic  volumes  and  trade  actors  in  e-commerce. 
Regulatory enforcement and security are much harder to ensure in vast parcel  flows. In this 
context it is useful to note that most market surveillance authorities do not have an effective 
mechanism for intercepting direct flows from outside the EU to consumers – the potential to 
leverage  customs  unique  supervision  capacity  in  a  proportionate  way  for  these  flows  is 
valuable.  

The current UCC lays down a common risk management framework for customs controls as 
such  including  some  baseline  features  on  co-operation,  where  the  same  goods  have  to  be 
controlled  by  customs  and  non-customs  authorities  (Article  47),  In  addition,  it  provides  a 
limited, general, optional provision for sharing information between the Commission, the 
Member  States  customs  authorities  and  other  authorities.  However,  the  practical  conditions 
for using this Article limit its usefulness in supporting systematic inter-authority co-operation 
and it is rather difficult to get a comprehensive overview on any given consignment because 
the  data  can  be  fragmented  over  different  systems,  or  used  only  in  certain  procedures.  For 
traders, similar information must be submitted multiple times to multiple authorities (customs 
and others).  

At  the  level  of  the  EU,  the  existing  (structured  and  ad  hoc)  cooperation  forms  are  rather 
limited  in  scope,  duration  or  participation.  For  instance:  the  Commission  organises  some 
UCC  framed  actions  (notably  common  priority  control  areas,  crisis  response  and  risk 
information  sharing);  the  customs  programme  supports  piloting  new  forms  of  co-operation 
(e.g.  CELBET)  and  OLAF  organises  anti-fraud  operations.  At  Council,  the  Customs  Co-
operation  Working  Party  (CCWP,  now  absorbed  in  Law  Enforcement  Working  Party) 
facilitates  ad-hoc  time-limited  operations,  involving  a  small  number  of  Member  States. 

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(Europol and Frontex are associated to some of the actions). In addition, there are occasional 
joint high-level events for Border Guards, police chiefs and/or customs Directors General. 

The explained challenges were echoed in the public consultation, as enhancing co-operation 
between customs and non-customs authorities was among the most supported elements. 

2.  REFORMING CO-OPERATION – A NEW FRAMEWORK 

In the perspective of the evolution of the Single Market towards a smooth functioning, with 
the  increase  of  legislation  guaranteeing  the  EU  way  of  life  and  values,  it  is  more  and  more 
essential that customs authorities cooperate constantly with the Market surveillance and other 
relevant  authorities  in  real  time  and  benefit  each  other  from  their  respective  knowledge, 
specificities and skills. This is crucial to enabling effective enforcement of common policies 
and  a  key  dimension  in  taking  the  customs  union  to  the  next  level,  as  a  key  partner  of  the 
Single Market.   

The same level of protection in the EU cannot be reached without a solid cross-border and 
cross-authority co-operation framework, built on clear strategic principles, such as: 

  The  contribution  of  customs  in  EU  policies  should  be  rationalised  and  streamlined. 
Common  policy  actors  should  see  clearly  what  customs  can  offer  under  a  figurative 
customs  ‘menu’  and  ‘ordering’  from  the  available  options  rather  than  preparing  ad-hoc 
provisions. 

  Customs remains in the driving seat for supervision of goods, and the customs information 
environment  (which  is  the  only  comprehensive  system  for  supervising  the  movement  of 
goods  crossing  the  EU  external  borders)  should  be  the  central  hub  to  which  sectoral 
systems connect, either by drawing information entirely from it, or by supplementing the 
information already present therein.  

It is also useful to clearly segment the market from the customs perspective, and consider the 
three broad underlying streams of customs added value, as follows: 

  Customs  helps  enforce  the  single  market  and  sustainability  –  ensuring  protection 
against  non-compliant  goods  and  supply  chains  in  co-operation  with  a  range  of  sectoral 
authorities;  this  is  a  growing  area  and  critical  both  to  European  way  of  life  and  global 
sustainability. There is a need to rationalise the customs role and the service level offered 
at, versus away from, the border. 

  Customs  contributes  to  security  (law  enforcement  and  combatting  organised  crime 
trafficking in goods, and crisis management). This domain has special features in terms of 
operating  conditions,  partners  (Europol/police,  Frontex/border  guards,  counter-terrorism 
etc.)  and  sensitivities  around  operational  data  (which  will  never  be  fully  centralised).  It 
implies  24/7/365  supervision  of  supply  chains,  which  can  quickly  convert  to  crisis 
management support where needed. 

  Customs helps to join up and facilitate processes for citizens and businesses. It’s not just 
about managing risks to policy delivery – it’s also about managing the burden placed on 
law-abiding  players.  The  addition  of  formalities  to  the  customs  process  needs  to  be 
managed.  

It is useful to briefly illustrate the paradigm change envisaged (taking account of specific 
detections of non-compliant products and considering also future consignments). 

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INFO BOX 2: the role of Market Surveillance Authorities 

A Market Surveillance Authority identifies a specific dangerous product on the market, which is 
non-compliant with EU requirements. The product is manufactured in series outside of the EU, 
thus all products of the same series are likely to share the same problem. 

Based  on  all  the  available  information,  supplemented  by  the  Market  Surveillance  Authority, 
Customs  is  able  to  map  the  supply  chains,  and  have  an  overview  of  how  many  of  these  faulty 
products have already entered the whole Single Market, regardless of where the non-compliance 
was identified. 

Customs could also use the intelligence from the Market Surveillance Authorities to fine-tune the 
risk management, improve the targeting and prevent those faulty products from entering into the 
EU market in the future. 

In  this  way  Customs  and  Market  Surveillance  Authorities  could  work  in  synergy  to  ensure,  in 
their respective competences that  all  trade  flows  used  to  sell the  faulty product  are  adequately 
policed, and prevent harm to EU consumers or businesses. 

Taking  these  considerations  into  account,  the  co-operation  framework  should  be  active  in  
four areas as indicated in the figure below, supplemented by a fifth element – governance – 
which will have a major influence on effectiveness of data/IT, operations and strategy. Even if 
all  options  proposed  include  measures  to  increase  cooperation  with  other  authorities  in  the 
four areas, the implementation of these possibilities highly depends on the digitalisation and 
governance model chosen in each option. 

The collaboration framework with other authorities would be largely facilitated by a common 
Data  Space  (option  3  and  4)  and  the  options  that  include  an  element  reinforcing  the 
governance are expected to achieve the best results, as strong governance implies rationalised 
across policy priorities (option 2 and 4). 

Figure 1: cooperation framework between customs and non-customs authorities 

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2.1 Policy and law 

  Customs should have a more prominent role in policy/legal design of sectoral legislation 
when  it  comes  to  its  application  at  the  EU  external  borders.  Customs  and  sectoral 
legislation should be jointly innovated, taking into account the whole range of tasks that 
customs have to perform to minimise burdens for good citizens and to have a realistic use 
of customs supervision tools. 

  The UCC would provide a menu of services which customs can offer (modular approach). 
Each sectoral policy should be designed by selecting the most appropriate services from 
customs,  e.g.  target,  control,  hold  the  goods  until  the  sectoral  authority  checks,  etc.  It 
should reserve the possibility for customs to base their controls on risk management, tap 
into the intelligence built by sectoral authorities, choose the less possible intrusive type of 
control, and decide on how to balance supervision tools at or away from the border.  

  Empower  customs  in  sectoral  legislation.  A  recent  example  is  the  change  in  Aviation 
Security  regulations  to  give  a  customs  request  for  screening  or  a  customs  ‘do-not-load’ 
instruction a legal meaning in that legislation too, not only in customs. In future, it should 
be considered how to maximise the return on a customs action or decision for the benefit 
of another policy. For example, if a clear breach of sectoral legislation is found, consider 
the possibility to allow that finding to be used across related supply chains and in all MS. 

  Provide  for  data  to  be  shared  and  used,  and  address  GDPR  issues  at  the  outset.  A 
related issue is to improve the data and ensure its interoperability – so that it supports 
for  example  effective  and  efficient  prohibitions  and  restrictions  enforcement.  Customs 
should  be  able  to  tap  into  the  data  and  intelligence  built  by  sectoral  authorities,  and 
sectoral  authorities  should  be  able  to  do  the  same  with  the  customs  intelligence,  as 
opposed  to  today,  where  each  authority  may  work  in  its  own  domain,  and  where 
information is rarely shared and cross-checked across different domains.  

2.2 Data and IT 

  As regards prohibitions  and restrictions, it is paramount to  equip  customs with  adequate 
data and data management capabilities.  Today, the EU Customs Data Model does not 
have  elements  necessary  to  enforce  sectoral  requirements.  Customs  needs  more  data  on 
products  and on the supply chain  from  various  sources, e.g.  from  trade,  Member States, 
other authorities, partner countries, and others. It is option 3 and 4, where the Data Space 
is  foreseen,  where  all  the  information  could  be    processed  most  efficiently,  24/7, 
supported by artificial intelligence. These processed data can be cross-checked against a 
wide range of sectoral requirements and with the help of data analysis, usable information 
could  be  extracted  for  numerous  purposes,  e.g.  risk  management,  crisis  management, 
statistical  and  other  purposes.  The  Data  Space  should  be  used  to  enable  the  sharing, 
interoperation and use of structured, useable data, and to implement EU analytics (raising 
common capabilities for all). 

  The  customs  information  environment  is  the  EU  hub  for  goods  traffic.  The  relevant 
authorities  can  contribute  directly,  facilitating  the  work  on  prohibitions  and  restrictions. 
On the other hand the customs data could be opened to sectoral authorities to allow them 
to both use and supplement customs data.  

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  The Data Space is  also  intended to  enable the information  exchanges between Customs, 
Economic Operators and Non-Customs authorities and to facilitate the evolution of these 
exchanges in a faster and more cost-efficient manner.  

The final stage of the reform is also foreseen to bring the integration with the other authorities 
to its full value, including policy areas which are not suitable to be integrated in the EU Single 
Window  Environment  for  Customs,  thus  fully  enabling  the  collaboration  with  other 
authorities described in the reform.  

2.3 Prepare a strategy for tackling each policy 

  A  political  prioritisation  should  identify  areas  for  EU  coordinated  action.  In  these 
areas,  the  control  and  enforcement  action  should  be  intensified  and  operationally 
coordinated.  At  the  same  time,  the  political  prioritisation  should  be  complemented  by  a 
certain risk appetite for other areas. 

  The customs supervision / intervention strategy should be interlinked with the sectoral 
and international strategies, addressing how the available intervention tools will be used, 
and  how  results  will  be  monitored.  Use  the  common  data  picture  in  the  customs 
information  environment  to  improve  understanding  of  flows,  risks,  what  kind  of 
operations should be planned, etc.  

  Rationalise  and  streamline  customs  services,  providing 

tailored  services  and 
proportionate, least operationally disruptive controls reflecting the different type and level 
of risks. 

  Work together to find new ways of doing things. For example, consider whether for very 
reliable  operators,  some  of  the  controls  that  would  otherwise  have  happened  in  a  port 
could  be  handled  through  self-assessment.  Consider  how  formalities  (e.g.  documents) 
could be dealt with by use of data submitted for other purposes and cross-validation.  

  Prepare for crises (primarily related to health and security). These are unpredictable, but 
advance investment in sectoral-specific preparations with key partners would be necessary 
if customs capabilities are to be effectively deployed on an urgent basis.  

2.4  Deliver operational work together 

  Customs and other authorities should work together on risk management, in particular on 
sharing  information  that  helps  building  analytics  coordinating  and  better  targeting 
controls. 

  This could involve creating multidisciplinary teams, not necessarily on a permanent basis. 
Shared  data  is  rarely  ‘perfect’  for  customs  action  –  it  is  a  challenge  to  convert  it  to 
targeting  elements,  and  it  is  important  to  have  the  minimum  necessary  structured 
information on events to do analysis. 

  Depending  on  the  service  level,  operations  may  create  intelligence,  operational  signals 

(‘here’s what’s coming, here’s a risk’), and specific interventions or controls.  

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  The  supervision  strategy  should  have  prepared  the  ground  for  maximising  impact  and 
follow-up  on  cases;  in  general,  the  aim  should  be  for  a  systematic  EU  response  to  bad 
supply chains, not just cases or individual consignments. In other words, the EU reaction 
should be on a system base, rather than on a transaction base. It should also prepare the 
ground  for  alleviating  certain  formalities  at  the  border  or  automate  them  as  much  as 
possible. 

  Customs  and  other  authorities  should  provide  for  pooling  of  resources,  analytics  and 
training so that controls that address similar problems are not repeated, and the expertise 
of each authority is used with maximum efficiency. 

2.5 Strong customs governance 

As an overarching requirement, this framework needs a strong customs governance. When 
referring to customs governance there are two main underlying issues:  

  Political prioritisation: that is, effectively preparing the supervision strategies, determining 
at  any  given  time  which  threats  and  problems  receive  prioritisation,  with  a  consequent 
focus on resources; 

  Operational  prioritisation  and  delivery  governance:  that  is,  setting  and  rationalising  the 
level of service which customs will provide from the UCC menu, organising operations, 
driving  joint  teams,  pursuing  data  sharing  and  integration,  organising  pooling  of 
equipment,  training,  measuring  and  adapting  performance,  research  and  innovation.  In 
short, all the management of the day-to-day operations. 

A European Customs Authority would exploit the legal possibilities of cooperation  between 
customs  and  other  authorities,  including  preparation  the  ground  of  common  non-financial 
priorities  for  customs  supervision  and  risk  management  (option  2).  Under  option  4,  the 
Authority  would  have  an  even  more  prominent  role,  organising  co-operation  with  other 
authorities  at  EU  level  for  all  policy  priorities  within  a  structured  co-operation  framework 
centred on data exchanges. 

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Annex 7 - Reform of the customs union: description 
of the concept of Data Space and the operating 
model 

This annex provides a focused view on the IT implications of the initiative aimed at reforming 
the EU customs legislation. It covers the following content:  

a)  EU  IT  customs  landscape  today:  Introduction  to  the  current  EU  IT  customs 

landscape and their characteristics and perceived limitations. 

b)  The new IT Paradigm (Data Spaces): Description of the proposed new IT paradigm 

proposed as part of some of the reform policy options (Data Spaces). 

c)  Data  Spaces  Transition  Roadmap:  Description  of  a  tentative  roadmap  for  the 

transition from the current landscape to an EU Customs Data Space. 

d)  Reform options impact on EU customs IT: Description of the impact on IT of each 

of the 6 options of the reform.  

e)  Cost  estimation  model  and  method:  describing  the  approach  assumptions  and 

references used to estimate the IT costs of the different options.  

It should be noted that all along this annex, the impact and costs assessment are focused only 
on  IT  programs,  services,  operations  and  infrastructure  and  do  not  include  other 
administrative costs, which are covered in annex 9. 

1.  EU IT CUSTOMS LANDSCAPE TODAY 

The EU is a heavyweight in international trade. Every minute, 4693 tonnes of goods enter or 
leave the customs union on average. To supervise these flows, customs rely on an elaborate 
set of IT systems and automated checks: they are the engine room of the customs union. 

The UCC aims at digitalising customs processes and achieving a high degree of automation, 
but it did not alter the design of those processes, which have their origins in the processing of 
paper declaration forms. Each customs process is automated individually by each Member 
State,  in  nationally  developed  IT  systems.  These  national  systems  implement  the  same 
Union  customs  procedures,  alongside  national  ones.  To  ensure  that  national  systems  of  a 
Member  State  could  exchange  data  with  the  national  systems  of  another  Member  State,  the 
Commission developed the trans-European systems. On top of these trans-European systems, 
the  Commission  developed  some  centralised  systems  as  well  to  provide  core  support 
functionalities related to data management. This architecture is naturally fragmented.  

Customs  IT  systems  in  the  UCC  are  developed  taking  into  account  processes  and 
transactions related to: 

  Trader  interfaces:  through  which  economic  operators  can  submit  customs  declarations 
and  receive  related  information.  With  very  few  exceptions  (such  as  the  Import  Control 
System  version  2,  (‘ICS2’),  these  interfaces  are  entirely  under  the  responsibility  of 
Member States.    

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  Customs process systems: that automate customs procedures and orchestrate the related 
exchanges  of  information.  Also  these  systems  are  under  the  responsibility  of  Member 
States, with the trans-European layer ensuring the orchestration when customs procedures 
affect several Member States. 

  Customs  central  systems:  that  provide  supporting  functionalities  to  manage  horizontal 
issues. A good example of these systems is the TARIC system, the multilingual database 
run  by  the  Commission  that  integrates  all  measures  relating  to  EU  customs  tariff, 
commercial and agricultural legislation. 

In parallel to the IT systems that share the three elements described above, the ICS2 and the 
EU Single Window Environment for customs further complement the UCC IT scenario. 

ICS2  implements  a  central  Shared  Trader  Interface  and  central  Common  Repository 
developed by the Commission, which store all data related to the Customs Entry Process, thus 
behaving like a centralised system.  However, for its  other functions  ICS2  functions like  the 
other  trans-European  systems  in  some  respects.  It  orchestrates  the  implementation  and 
operation of entry processes and risk analysis processes, which are primarily implemented in 
national systems; a shared analytics layer (“ICS2 Safety and Security Analytics”) will support 
the advance cargo risk analysis process in ICS2 from Release 2.  

The EU Single Window Environment for Customs, aims at simplifying the interconnection of 
national  customs  systems  with  the  Union  non-customs  systems  developed  centrally  by  the 
Commission. The goal of the Single Window is to allow national customs systems to retrieve 
and send relevant data to Union non-customs systems developed by the Commission. In doing 
so,  the  Single  Window  reaches  two  results:  first,  to  avoid  each  Member  State  having  to 
interconnect  its  own  systems  directly  with  the  Union  non-customs  systems;  and,  second,  to 
avoid  that  each  Union  non-customs  system  has  to  be  interconnected  with  potentially  27 
different  customs  systems.  However,  the  Single  Window  pays  its  dividends  only  when 
sectorial policies have a centralised system, or a central repository where information can be 
fetched and distributed: other cases are outside of its scope of application.  

The  UCC  IT  architecture  has  the  advantage  of  allowing  national  administrations  to  tailor 
customs systems to their national needs and specificities. However, on the other hand, these 
divergences have an impact  in  the  IT implementation of EU  customs legislation, and in  the 
costs borne by Member States. From the Commission’s perspective, national implementations 
call for complex governance and technical solutions to ensure that the trans-European systems 
can be effective at connecting the national customs systems.  

The issues with the current IT paradigm in EU customs can be summarised as follows: 

 

IT  implementation  is  centred  on  process  automation,  which  means  that  each  system 
design  is  based  on  the  automation  of  a  single  ‘business  designed’  customs  process. 
Moreover,  those  processes  are  not  natively  digital:  they  often  represent  the  digitalised 
version of paper-processes, which are automatized by digital means. 

 

Interoperability of processes was considered often as an afterthought. Also, there are still 
limitations in the harmonization of processes (147).  

(147) For  instance,  the  various  processes  supported  by  the  Customs  Decisions  Management  Systems  are  all 
variants related to management of authorizations. Whilst the UCC already made a big step by moving from 
27  different  national  processes  for  each  of  the  22  decisions  to  EU  harmonised  processes,  there  are  still 

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  EU  customs  IT  is  highly  distributed  with  an  almost  non-existent  level  of  reusability 
between  Member  States  and  very  small  ratio  of  centralised  implementations.  Hence,  for 
most  of  the  IT  systems  created  to  implement  customs  processes,  development  and 
operational  costs  are  multiplied  by  27,  plus  the  costs  borne  by  the  Commission  for  the 
trans-European part. 

  The  various  systems  have  many  interdependencies.  Changes  to  one  system  lead  to  a 

waterfall of consequences on other interdependent systems. 

As  a  result  of  the  above,  the  implementation  of  large  changes  in  a  customs  process  or  data 
elements  at  EU level  in line with  what  the UCC allows for,  imply projects  of up to 7  years 
duration and very large overall costs.  

2.  THE NEW IT PARADIGM – DATA SPACES 

The consideration of a new information management paradigm focuses on two aspects: first, 
on  the  objective  of  enabling  a  real  partnership  with  the  economic  operators,  based  on  a 
commonly  structured,  secured  and  less  burdensome  information  exchange;  second,  on 
alleviating the IT management difficulties of the existing model.  

The  reform  proposes  a  new  approach  to  access  and  use  the  wealth  of  existing  data,  which 
builds on the reformed customs processes and maximizes their efficiency and effectiveness. It 
consists  in  giving  the  customs  union  the  possibility  to  use  all  existing  information  from  all 
sources with state-of-the-art technology, to analyse it and to use for customs purposes.  

The concept is called Data Space. It can be defined as a platform (a combination of systems 
and services) that connects and analyses data in whatever format from all types of sources in a 
push or pull mode. Data sources are trade, Member States, other authorities, partner countries, 
open  sources  and  others,  and  are  processed  in  an  ‘engine’  functioning  24/7  supported  by 
artificial  intelligence.  From  this  processing  and  with  the  help  of  data  analysts,  usable 
information is extracted for risk management, crisis management, performance measurement, 
statistical and other purposes. Information is accessed on a need-to-know basis. Access rights 
to data are predefined to ensure the confidentiality of personal and commercial information. 
Data  is  flagged  already  at  the  input,  thus  allowing  the  identification  of  personal  data  or 
sensitive information, which would prompt the application of special handling procedures. 

There are a few key benefits that will be brought by this new architecture when compared to 
implementing 27 IT systems for UCC processes: 

1.  It will provide a structured and easily accessible way to store and manage data, making it 

easier to find, retrieve, and manipulate. It will improve data management. 

2.  It  will  support  data  sharing  and  interoperability,  allowing  different  systems  and 
applications  to  access  and  use  the  same  data.  It  will  increase  data  accessibility  and 
interoperability. 

3.  It  will  support  data-intensive  operations  and  decision-making,  providing  the  necessary 
infrastructure  to  support  complex  data  analysis  and  data-driven  decision-making.  It  will 
enhance decision-making and data analytics. 

different processes for what is fundamentally the same need, leading to enhanced complexity. This affects 
both the training of Member States and traders, and the automation of such processes. 

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4.  It will be scalable and flexible, allowing customs to adapt their data management systems 

to support changing business needs. 

5.  It will reduce data duplication and inconsistencies, as it will provide a single, centralized 
repository for data that can be accessed and updated by multiple systems and applications. 

Data  Spaces  and  data-driven  architectures  differ  from  traditional  IT  systems  and  process-
oriented architectures in a few key concepts. 

First,  Data  Spaces  and  data-driven  architectures  are  focused  on  the  organization  and 
management  of  data,  whereas  traditional  IT  systems  and  process-oriented  architectures 
address individual processes and systems. Data Spaces and data-driven architectures provide a 
structured  way  to  store,  access,  and  manipulate  data,  whereas  traditional  IT  systems  and 
process-oriented architectures focus on execution of individual business processes. 

Second,  Data  Spaces  and  data-driven  architectures  are  designed  to  support  data-intensive 
operations  and  decision-making,  whereas  traditional  IT  systems  and  process-oriented 
architectures are designed to support specific information processing and business operations. 
Data Spaces and data-driven architectures can handle large volumes of data and complex data 
relationships, whereas traditional IT systems and process-oriented architectures may struggle 
to handle the same levels of complexity and scale. 

Third,  Data  Spaces  and  data-driven  architectures  rely  on  distributed  and  decentralized 
components, whereas traditional IT systems are typically monolithic and hierarchical. 

In  practice,  having  a  Data  Space  does  not  translate  into  the  absence  of  IT  systems,  on  the 
contrary. Each UCC IT system has been developed with the purpose of fulfilling a customs 
process  in  its  entirety.  What  the  use  of  a  Data  Space  do,  instead,  is  regulate  how  the 
information flows, and allow for the creation of very small and modular IT systems, that fulfil 
very  specific  parts  of  an  overall  customs  process.  The  small  IT  applications  allow  for  a 
simplified compliance with several requirements such as the GDPR, while remaining highly 
scalable. 

2.1 How will the EU Customs Data Space work in practice? 

The  Data  Space  can  collect  the  relevant  information  in  a  flexible  manner.  In  the  example 
below,  information  is  provided  from  different  actors  involved  in  the  supply  chain.  The 
importer (in red) is responsible for declaring the import of goods, in case the information was 
not made available beforehand. 

In  the  Data  Space,  the  information  is  stored  and  made  available  across  the  platform  for 
authorised  users  and  procedures.  The  system  connects  the  dots  for  a  specific  consignment. 
Systems developed for risk analysis can use the available information and benefits from the 
higher data quality. EU wide risks, circumvention or re-routing of goods become visible. The 
risk analysis can take more contextual information into account and build trade intelligence. 

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Figure 1 – Data Space practical example 

Small modular applications and data processing components can build on the available data, 
for  example  for  national  risk  analysis.  The  same  approach  can  enable  other  authorities,  or 
international partners and take their information into account. The data can be cross-checked 
against a wide range of criteria and requirements. In the example, no problem is detected, and 
the import can go ahead without any customs intervention. 

To highlight some of the significant benefits: The relevant authorities can contribute directly 
in  the  background,  facilitating  the  work  on  prohibitions  and  restrictions.  The  supply  chain 
information  provides  a  meaningful  structure,  facilitating  the  supervision  of  low-value 
consignments  or  e-commerce.  The  system  is  future  proof  for  upcoming  developments.  For 
example,  should  a  digital  product  passport  become  obligatory  for  certain  products,  this 
information  can  be  collected,  used  and  shared,  without  the  need  to  develop  a  dedicated  IT 
system, or to write legislation for the IT technical aspects. 

2.2 Data management modalities, interoperability, and modes of exchange. 

The architecture of the  customs  Data Space is based on the principles of  a  data-driven, and 
event-based  architecture.  Data-driven  means  that  data  is  at  the  center  and  processes  are 
specifically  designed  to  exploit  such  data.  Event-based  means  that  processes  are  defined  by 
considering the change of status of certain data. The difference with the current IT paradigm 
is that processes are fully designed upfront: those processes are meant to generate events, the 
events generate data, which is then consumed for several purposes. In this paradigm, the event 
is  generated  artificially,  to  trigger  other  processes.  In  the  data  driven,  event-based 
architecture, the  events  are real-world  events  that are tracked  and from  which processes are 
triggered. 

Customs  declarations  exist  to  ensure  that  customs  are  formally  notified  by  a  declarant  of  a 
customs’ formality. Such declarations include the description of the consignment as  well as 
other  information.  Customs  are  automatically  alerted  about  a  consignment  arriving  because 
the Data Space is notified by a ‘change of status’ of the goods in the logistic chain. The Data 

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Space  contains  the  consignment  information  as  required  in  legal  terms,  which  is  submitted 
only once. 

A  data  driven  architecture  is  agnostic:  it  is  not  based  on  a  specific  protocol,  format  or 
commercial  product.  This  approach  will  allow  business  needs  and  applications  to  evolve 
through time without being locked-in or limited by the underlying services. This architecture 
will  natively  include  some  horizontal  features  such  as  interoperability,  security,  usage  of 
standard  protocols,  meta-data  management,  data  streaming,  event  management  and 
scalability. It will be aligned with existing initiatives of the European Commission such as the 
European Data Governance Act (148) and the principles of Interoperable Europe (149).  

The following example addresses the concerns on how the European and the national levels 
could operate in practice. 

In future customs operations data is managed centrally. Yet, national customs authorities may 
still  have  to  enforce  national  legislation.  To  do  so,  they  will  access  all  the  relevant 
information directly from the EU customs Data Space, according to their rights. This access 
can  be  ensured  using  a  user-to-system  interaction:  concretely,  the  national  customs  officers 
use an application to read such data. However, the same result can be achieved with a system-
to-system approach: the EU customs Data Space will have secure data services that are open 
for the different actors. The actor is identified at the moment of connection, and in case it has 
the  rights  to  see  the  data  required,  it  will  be  able  to  do  so.  This  access  could  be  further 
extended  in  a  tailored  manner,  to  other  non-customs  authorities  that  also  need  access  to 
specific customs data. 

Artificial  Intelligence  and  machine  learning  processes  require  large  datasets  and/or  large 
sequence  of  recorded  events.  Without  these,  machine  learning  processes  cannot  be  applied, 
and no added value can be retrieved using Artificial Intelligence mechanisms. The creation of 
the  customs  Data  Space  is  the  first  seed  for  applying  frontier  technologies  in  the  customs 
domain.  

This is  in line with  other European Commission  initiatives, such as the coordinated plan on 
Artificial Intelligence (150) that is quoted below:  

‘Further developments in AI require a well-functioning data ecosystem built on trust, data availability 
and infrastructure. The General Data Protection Regulation (GDPR) 32 is the anchor of trust in the 
single market for data. It has established a new global standard with a strong focus on the rights of 
individuals, reflecting European values, and is an important element of ensuring trust in AI. This trust 
is especially important when it comes to the processing of healthcare data for applications driven by 
AI.  The  Commission  would  like  to  encourage  the  European  Data  Protection  Board  to  develop 
guidelines on the issue of the processing of personal data in the context of research. This will facilitate 
the development of large cross-country research datasets that can be used for AI. 

AI needs vast amounts of data to be developed. Machine learning, a type of AI, works by identifying 
patterns  in  available  data and  then  applying  the  knowledge to  new  data.  The  larger  a  data  set,  the 
better  AI  can  learn  and  discover  even  subtle  relations  in  the  data.  Once  trained,  algorithms  can 
correctly  classify  objects  that  they  have  never  seen,  in  more  and  more  cases  with  accuracies  that 

(148) https://digital-strategy.ec.europa.eu/en/policies/data-governance-act 
(149) https://ec.europa.eu/info/publications/interoperable-europe-act-proposal_en 
(150) https://digital-strategy.ec.europa.eu/en/library/coordinated-plan-artificial-intelligence 

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exceed  those  of  humans.  Hence,  access  to  data  is  a  key  ingredient  for  a  competitive  AI  landscape, 
which the EU should facilitate in full respect of personal data protection rules.’ 

The technological innovation cannot be looked at independently from the governance aspects 
that  the  reform  will  bring.  The  strategic  management  of  the  customs  union  will  include 
aspects  that  will  govern  IT  domains  such  as  interoperability,  data  semantics,  service 
provisioning,  security,  APIs  (Application  Programming  Interface),  access  rights,  etc.  This 
governance  layer  is  a  key  point  to  consider  and  is  a  central  part  of  the  reform  described 
thoroughly in the impact assessment. Not only it will address the pure IT questions but also 
will  orchestrate  and  integrate  processes,  co-operation  with  other  authorities,  and  customs 
actors, defining data requirements, data exchanges, roles and responsibilities. 

2.3 The EU customs Data Space in technical terms 

The following diagram depicts a high-level view of a potential customs Data Space. 

Figure 2 - Overview of a possible customs Data Space implementation 

In the context of EU customs, the Data Space is intended to enable the information exchanges 
between  customs,  economic  operators  and  non-customs  authorities  and  to  facilitate  the 
evolution of these exchanges in a faster and more cost-efficient manner.  

The Data Space has a systemic approach to information exchanges and processing. This can 
affect  the  way  operators  provide  information  to  customs.  Today,  customs  declarations  have 
three functions:  

  They provide a set of information pertaining to a process or a physical item;  

  They serve as a procedural trigger for certain processes;  

  They constitute an undertaking of responsibility for the declarant. 

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The Data Space deals with all the three aspects above, in a different manner. The information 
related to a physical item does not necessarily have to be embedded in a form, the procedural 
triggers  for  certain  processes  are  based  on  real-world  events,  and  the  undertaking  of 
responsibility  can  be  more  fine-tuned  to  the  actual  information  provided  and  the  bearer  of 
such information. 

This approach allows the re-use of data and its consumption by different customs processes. 
A natural consequence would also be the significant reduction (if not even elimination) of 
multiple  submission  of  the  same  data:  if  data  is  available/retrievable,  there  is  no  point  in 
submitting it again. 

The key factor in achieving these results lies in the establishment of a horizontal data platform 
that  provides  data  management  capabilities  (interfaces,  streaming,  event  management, 
storage, meta-data management, etc.). Data processes and applications are built on top of this 
platform. In other terms, instead of dealing with large monolithic IT systems, the reform aims 
at de-compiling bigger systems into smaller, scalable applications.  

Concerning  the  interactions  with  external  stakeholders,  these  will  be  achieved  through 
services for technical message exchanges, data virtualisation or service interfaces. These bring 
interoperability  features  that  are  open  to  the  stakeholders  participating,  so  that  each 
stakeholder can integrate the technical message exchanges in its own system depending on its 
size  or  technical  capacity  (individuals,  SMEs  or  large  traders).  Its  actual  modes  will  be 
implemented  using  open  standards,  and  technologies  such  as  those  defined  for  example  by 
Interoperable Europe.(151) 

In practice, a large retailer based in the EU, could connect its own warehousing system with 
the  EU  customs  Data  Space.  Whenever  goods  are  moved  between  a  warehouse  outside  the 
EU  to  one  inside  the  EU  (or  vice-versa),  the  relevant  events  will  be  captured,  and  customs 
will be informed accordingly. 

Customs IT systems design will be centred on information needs around which the procedures 
can be built and managed. The processes for handling the data can then be designed  so that 
the  provision  of  data  is  correctly  matched  with  whom  effectively  holds  such  data  (e.g.  the 
provision of different data elements by different actors in the supply chain of data at different 
times,  which  is  more  in  line  with  the  timeliness  of  the  information  availability  and  the 
respective responsibilities of these actors). 

A Data Space requires a solid layer of standardisation for common data structures alongside a 
strong  information  governance.  This  means  defining  both  the  actual  basic  data  model 
covering the information obligations, alongside the subject of those obligations.  Stakeholders 
would then provide the information according to this data model using meta-data techniques 
which allow for traceability of data sources and personal data together with more flexibility 
on the modalities used to retrieve or receive such information. 

In practice, instead of defining the name of an importer as a set of 72 alphanumeric characters 
(including its definition on the text of law), it would be enough to identify semantically what 

(151)  

Proposal for a Regulation of the European Parliament and of the Council laying down measures for a 
high  level  of  public  sector  interoperability  across  the  Union  (Interoperable  Europe  Act),  COM(2022)  720 
final. 

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an  importer  is  and  ensure  that  the  data  elements  bear  the  necessary  meta-data  highlighting 
e.g., if the name of the importer has to be considered personal data or not. 

The  Data  Space  provides  services  through  a  catalogue.  For  instance,  persons  bearing  an 
obligation  of  information  (traders,  customs/non-customs  authorities)  could  pick  from  the 
catalogue the most convenient mode to make the data available to the Data Space. Moreover, 
providing  data  following  a  specific  meta-data/metamodel  (e.g.  using  contextual  information 
and linking attributes), allows the stakeholders to provide the data according to their own data 
model: the stakeholder’s data model will have an attached meta-model in the background that 
allows the Data Space to correctly interpret the information provided. Functionally, this is a 
big  advantage  because  it  does  not  force  the  entire  re-development  of  existing  stakeholder’s 
systems.  Furthermore,  this  entails  that  stakeholders  do  not  have  to  modify  their  entire  data 
structure if a new element is added to the Data Space. Yet, if a new data element is required, 
the stakeholder responsible for providing it will have to add it to its data model. 

The  data  available  in  the  Data  Space  according  to  the  data  model  can  then  be  used  for  the 
intended purpose as defined in the legal provisions. All data exchange and usage needs to be 
authorized, monitored and auditable to  ensure  the respect  of the data  governance  provisions 
and, at the same time, to ensure non-repudiation of the data provided and received, given the 
potential liabilities linked to  the  information  exchange. The data becomes accessible only  if 
all the above conditions are fulfilled. 

There are two main types of usage for the data services: 

  Data  projects:  The  ‘raw  data’  received  from  the  sources  may  need  to  be  restructured, 
aggregated, analysed or  prepared  for the  direct  policy needs  such  as  risk  analysis,  value 
calculation, crisis management, or to feed a secondary data store for other purposes (EO 
management, statistical analysis, guarantee management…). 

  Micro-applications:  The  raw  or  processed  data  can  be  made  available  to  specific 
applications implementing small functions or procedures serving the operational activities 
of  customs,  other  competent  authorities,  or  the  traders  themselves  and  providing  user 
interfaces  and  portal  functionalities.  Micro-applications (152)  can  be  implemented  in  an 
agile and flexible way. 

If  the  changes  are  in  procedures  or  functionalities,  those  are  applied  on  the  corresponding 
micro-applications,  which  are  decoupled  from  the  ‘raw  data’  and  do  not  affect  the  whole 
system  or the data model.  In practice, and differently from  today’s system,  a change in  one 
micro-application would not trigger a chain of changes in all the other micro-applications. In 
case  multiple  micro-applications  are  affected,  this  approach  improves  the  granularity  of  the 
changes, making it easier to identify the consequences of a data model change. 

Data  services  can  be  centralised  and  made  available  to  all  relevant  users.  They  are 
customisable,  to  allow  local  specificities,  or  complemented  with  customs  development  by 
some individual users to fulfil unique needs that are not shared by other users. A collaborative 
development and deployment platform would provide a high added value for this purpose.  

(152) Micro-application refers to IT components implementing a limited number of user interface and workflow 
functionalities.  The  small  size  of  the  applications  allows  for  a  more  dynamic  and  agile  IT  environment 
serving  Customs  policies  and  operational  procedures.  Examples:  an  application  implementing  customs 
authorisation workflow or an application allowing customs officers to register controls results. 

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In a Data Space context, existing systems will necessarily have to evolve, to be able to use the 
common data and the event management capabilities. The approach intends to propose a more 
flexible and modular way to implement those systems and processes allowing on the one hand 
to  manage  the  complexity  in  a  more  agile  manner  and  on  the  other  hand  ensure  that  data 
interoperability is applied by design, hence avoiding formation of silos.    

One of the key goals of the reform is to address the fragmentation of customs, together with 
the  ever-increasing  complexity  created  by  the  prohibitions  and  restrictions.  A  customs  Data 
Space would coherently address both questions, something that cannot be achieved at national 
level with the same degree of effectiveness.  

The  majority  of  items  in  the  prohibitions  and  restrictions  relate  to  product  requirements 
which, from a data perspective, are completely invisible to customs: this happens because the 
EU customs data model does not take into account elements such as the energy consumption 
of a fridge, or the noise produced by an engine. Integrating such requirements in the current 
UCC  systems  is  very  cumbersome:  it  requires  creating  a  specific  TARIC  measure,  and 
adapting the entire UCC data model, with the result that adding a couple of descriptors to a 
product  could  take  several  years.  The  Data  Space  bypasses  this  problem  in  two  different 
ways: 

  First,  the  flexibility  in  the  management  of  the  data  model,  allows  to  create  specific 

metadata for the required descriptors of a good rather swiftly; 

  Second, the possibility to analyse at EU level all the imports of those goods, considering 
new  descriptors,  would  enable  a  much  more  efficient  targeting  of  consignments  by 
customs. 

For those prohibitions and restrictions that are not pure product requirements, and for which a 
Union non-customs formality exists, the EU Single Window can be used. However, the Single 
Window  does  not  deal  with  risk  management,  but  with  the  facilitation  of  exchanges  of 
information between customs and non-customs authorities. Therefore, it does not increase or 
decrease the detection capabilities of customs: it adds a layer before that detection, for which 
the goods are identified (and assessed) from the perspective of non-customs authorities for the 
purposes of specific formalities. Customs is then presented with the outcome of this process, 
and it can take its own decisions accordingly. For instance, EU Single Window is used for the 
phytosanitary  domain:  however,  such  use  does  not  allow  customs  to  differentiate  between 
certain species of seeds which are, on the contrary, very well identified by EU phytosanitary 
measures because they pose exponentially different risks. The Data Space could help as well 
on  this  front,  by  increasing  the  identification  capabilities  of  customs  to  spot  those 
consignments where products are falsely declared to escape the non-customs authorities’ nets. 

Traders  interacting  with  the  customs  Data  Space  will  experience  simplification.  They  will 
have a uniform approach to the European  customs Data Space, instead of having to interact 
with multiple national authorities and multiple IT systems. For SMEs dealing with trade, the 
interaction  with  the Data Space will ensure better scalability of their business  and access  to 
customs  controls  in  a  uniform  manner,  as  opposed  to  today’s  interaction  with  27  different 
customs  systems.  This  takes  the  ICS2  and  EU  Single-Window  Business-to-Government 
concepts  further  and  is  in  line  with  the  principle  of  once-only,  reducing  the  administrative 
burden on citizens and businesses. 

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2.4 Governance 

The  governance  of  the  customs  Data  Space  is  logically  inherited  from  the  governance  of 
European customs authorities themselves and represents its singular most critical aspect for its 
successful implementation. Therefore, the governance should cover the policy side as well as 
the IT implementation. In particular, it should: 

  Define  the  Data  Space  participating  roles  and  responsibilities,  specifying  the  rights 

and obligations of the stakeholders. 

  Define the types of data, the level of granularity and rights to access it. 

 

Implement and monitor traceability and audit capabilities of all Data Space activities. 

  Manage  the  customs  data  model  and  ensure  its  alignment  with  EU  legislation  and 

international agreements. 

  Determine rules and conditions for the processing of data in the Data Space. 

  Define the metamodel that must be embedded in the data exchanged in the Data Space 
(e.g.:  personal  data  identifiers,  data  ownership,  processing  limitations,  sources  and 
objective of the data, data quality qualifiers…) 

  Ensure non-repudiation of all data received and processed. 

  Define and enforce the archiving policy for preserving historical data.  

  Act and report on governance non-compliance. 

Moreover,  for  the  aspects  not  already  addressed  in  the  legislative  text  of  the  reform,  the 
governance  layer  should  further  define  and  govern  key  questions  regarding  the  Data  Space 
security  plan,  SLA  requirements,  GDPR  compliance,  data  sovereignty,  stakeholder 
management and support to all connected activities. 

3.  OVERVIEW OF TRANSITION TO CUSTOMS DATA SPACE 

The  UCC  systems  represented  a  large  investment  for  both  the  Member  States  and  the 
Commission.  It  is  only  logic  that  these  should  not  be  decommissioned  immediately  after 
implementation. It is not what is proposed by the reform. 

The  creation  of  the  customs  Data  Space  is  subject  to  a  transition  period,  during  which, 
existing  UCC  Systems  will  coexist  with  the  Data  Space.  This  entails  a  double  cost  of 
maintaining  two  models  in  parallel  and  is  rooted  in  the  fact  that  the  reformed  customs 
processes  will  not  be  in  force  immediately.  This  double  existence  is  necessary  to  ensure 
continuity and will bring the benefits of the new model gradually without disrupting customs 
operations.  Eventually  bringing  technical  simplifications,  faster  development  processes  and 
improved  efficiency  to  customs  IT.  The  transition  period  spans  over  12  years,  which  are 
enough to ensure a return on investments in IT investment for the UCC systems. 

The technical approach for the transition would be based on an incremental use of the current 
customs  systems  for  the  data  management  capabilities  of  the  Data  Space.  For  example, 
current  systems  databases  could  be  integrated  in  the  Data  Space  to  allow  data  availability 
while the systems process is being adapted. 

In a ‘do nothing’ scenario the UCC systems would still have to be upgraded for technological 
evolutions  and  changed  to  accommodate  policy  changes  which  are  steadily  increasing  in 

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number and complexity. The same is applicable to trans-European platforms and systems. The 
cost of these changes is high and takes a lot of time. 

To  answer  this  question,  a  tentative  roadmap  has  been  laid  down  to  illustrate  the  essential 
steps  that  a  transition  would  entail.  This  is  a  draft  overview  that  will  require  further 
assessments and planning to define and detail a full-fledged roadmap.  

Figure 3 - Draft overview of a Data Space transition roadmap 

The  above  roadmap  starts  in  2025,  once  the  UCC  implementation  is  complete  and  the  IT 
projects on Member State’s customs administrations are over; however, the transition period 
would  be  shifted  right  depending  on  the  year  of  adoption  of  the  reform  package.  The 
transition  would  begin  with  a  central  implementation  activity  by  the  Commission,  followed 
by  a  gradual  implementation  and  transition  by  the  Member  States.  A  constant,  synergic 
consultation with the Member States will be key to identify which services and processes can 
be migrated, the priorities and sequence of action. 

Before  adoption  a  forerunner  project  could  be  launched  to  address  the  issues  related  to  e-
commerce.  This  inception  period  would  assess  in  detail  and  in  practical  terms  the  best 
technical  options for the implementation  of an EU customs Data Space, defining a business 
case and performing a market analysis for suitable technologies.  

2025-2028 – Data Space foundation 

The  core  embryo  of  the  Data  Space  capabilities  would  take  stock  of  a  forerunner  project, 
which may  not be  necessarily  linked to  the reform,  but  that requires  and makes  use of  data 
interoperability.  E-commerce  could  be  considered  a  good  candidate,  but  others  can  be 
considered  as  well,  in  areas  such  as  interoperability  with  other  systems  in  the  Justice  and 
Home Affairs area, or integration with the Digital Product Passport initiative. 

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This period should be used to start the analysis of dependencies and preconditions for customs 
systems to be integrated in the Data Space, so that a migration strategy can be defined.  

During  this  period,  the  data  governance  and  core  data  model  to  be  used  in  the  future  Data 
Space  for  customs  will  be  defined,  analysing  the  gaps  and  re-usability  of  the  existing  EU 
customs data model. A pilot could be implemented to ensure that a solid model is in place. 

2028-2030 – Data Space first steps 

This  period  starts  with  a  Data  Space  at  its  core,  capable  of  providing  some  basic 
functionalities. The key objectives of this initial phase fall along three important lanes: 

a)  Scaling and consolidating the Data Space services, including a solid infrastructure and 
operational model with the appropriate security conditions. This should also allow for 
self-service provisioning of data services, data projects and applications integration. 

b)  Implementation of specific functional services for stakeholders: portal, interfaces and 
applications  integrated  in  the  Data  Space  and  allowing  a  use  of  the  Data  Space  for 
customs according to the new policy model defined in the reform. 

c)  Implementation  of  the  newly  defined  customs  data  model  in  the  form  of  data  and 
meta-data  structures,  data  processing  and  data  engineering,  making  use  of  the  data 
model  for  integrating  data  on  economic  operators  on  the  one  hand  and  enabling  the 
use of this data by customs authorities, on the other hand.  

The three lanes above should go in  parallel  using iterative and  agile mechanisms that  allow 
ensuring consistency between the solution provided and the needs, and to establish a culture 
of agile development on the Data Space governance, development, and operations.  

Systems  such  as  ICS2,  EU  CSW-CERTEX,  customs  decisions  or  other  centralised  systems 
are  good  candidates  to  be  migrated  to  the  Data  Space.  This  could  be  done  with  little  or  no 
impact to the processes themselves or their actual interfaces as the Data Space will reuse and 
improve these interfaces (STI, EUCTP). 

The term migration is not to be understood technically (as an IT system being migrated from 
one  platform  to  another),  but  it  implies  a  potential  rebuild  from  the  ground  up  of  an  IT 
system; this issue is taken into account in the costing assumptions. 

Other central support systems will be required to migrate as they provide essential reference 
data to the Data Space. These systems include, for example, TARIC, EOS and CS/RD.  

Some  Member  States  systems  and  economic  operators  might  want  to  launch  initial  pilot 
projects  to  start  using the  Data Space or to  enable their migrations strategies. At the  end of 
this  phase,  it  is  expected  that  all  Member  States  have  defined  their  migration  strategy  and 
planning.    

2030-2035 – Initial migration stage  

The migration phase implies the actual integration of customs systems into the Data Space to 
adapt  to  the  new  legislation.  There  are  different  possibilities  to  approach  the  migrations 
depending on the existing systems’ architecture on each Member States.  

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The  key  intention  is  to  separate  process  from  data  implementation  in  IT  systems.  In  many 
cases this is already a reality in Member States customs systems, and in those cases the effort 
will be mainly twofold: integrating the data within the Data Space (exposing data views using 
the Data Space services) and adapting the systems processes and functions to the new policy 
legislation.  For  cases  where  the  current  implementation  is  a  monolithic  system  (such  as  for 
example  customs  declaration  management  systems)  the  separation  of  data  and  processes 
might be more complex; consequently the best choice might be to first bring the system’s data 
onto the Data Space and then gradually transform and migrate the processes by creating new 
components or re-using common components. 

A migration strategy does not entail IT activities only: it impacts the  customs actors and the 
operations themselves. Thus, the main pillar of the migration strategy for each Member State 
and for an EU authority should be to minimise this impact.   

The following migrations approaches are indicative and not necessarily feasible or applicable 
for all Member States. It is important to envisage different strategies (or a mix of them) where 
each specific situation is evaluated to ensure the lowest impact and the smoothest transition. 
The  decision  on  the  correct  approach  should  be  taken  after  thorough  analysis  and  when  the 
implementation of the Data Space takes place.   

  Outside-In  Approach:  having  implemented  in  the  previous  phase  the  core  Data  Space 
capabilities  (data  intake  and  processing,  data  model  structures,  risk  analysis,  customs 
officials  basic  interfaces,  etc.),  economic  operators  could  be  allowed  to  start  at  their 
convenience to supply information to customs using the Data Space; at the start probably 
trusted  EOs  would  pave  the  way,  but  then  other  economic  operators  could  join  into  the 
Data Space, taking into consideration the implementation of the Trust and Check scheme.  

This  will  imply  a  learning  process  requiring  an  agile  approach  of  implementation  and 
evolutive maintenance, to ensure a correct adaptation of the system to the different needs 
of the Member States. The self-service data projects, and application platform are the key 
elements to enable this evolution.  

Another  important  aspect  is  that  national  system  are  always  allowed  to  integrate  their 
functions  and/or  data  with  the  Data  Space,  thus  enabling  a  temporary  or  long-term 
national implementation to coexists with the Data Space approach itself. For example, it 
could be foreseen that the guarantee management system of a Member State consumes or 
provides data on guarantees data within or outside the Data Space.  

  Inside-Out  Approach:  This  approach  follows  a  reverse  process.  In  this  case  national 
systems start integrating with the Data Space to feed information received from economic 
operators and other national processes. This means allowing the Data Space to view data 
from national systems and creating data processes in the Data Space that make use of that 
data,  according  to  the  newly  defined  customs  data  model.  This  way  a  national  system 
could feed the Data Space and benefit from the integration with other EU data.  

Once  the  process  is  established,  Member  States  could  start  migrating  users  (customs 
officials  and  other  users)  to  this  new  process  and  consume  data  through  micro-
applications.  

This  would  open  the  way  for  a  second  phase,  where  also  the  economic  operators  can 
switch  to  the  Data  Space  interfaces,  benefiting  from  more  mature  customs  applications, 
adapted to the new customs model. 

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  Domain  approach:  this  approach  consists  of  a  sequential  migration  of  the  different 
systems  or  domains  from  the  less  critical  to  the  most  critical  ones.  Depending  on  the 
domain,  this  can  be  done  following  any  of  the  two  approaches  presented  above.  This 
allows gaining experience on the adaptations necessary for the Data Space integration and 
addressing  the  most  critical  ones  with  the  acquired  experience.  For  example,  a  Member 
States  might  decide  to  migrate  the  Temporary  Storage  process,  or  the  entry  system 
followed by the transit process and finally the export and import ones. 

During this stage the key centralised trans-European systems become capable of exchanging 
data according to  the  Data Space paradigm  while the trans-European systems  that rely on a 
distributed model will be adapted to the new paradigm via data processes and rules.  

Also,  several  use  cases  for  integration  with  other  authorities  with  high  value  and  low 
dependencies  should  be  already  implemented  and  integrated  with  customs  activities  in  the 
Data Space. 

At the end of this stage, the Data Space has reached its full capacity and implements most of 
the reformed customs policy.  

2035-2037 – Final migration stage  

Some  residual  processes  and  customs  activities  (mostly  supported  by  legacy  systems  and 
involving national integrations with other functions) will be more difficult to migrate onto the 
Data  Space.  This  final  stage  is  envisaged  to  allow  for  these  exceptions  to  complete  the 
migration.  

The  final  stage  is  also  foreseen  to  bring  the  integration  with  the  other  authorities  to  its  full 
value, including policy areas which are not suitable to be integrated in the EU Single Window 
Environment  for  Customs,  thus  fully  enabling  the  collaboration  with  other  authorities 
described in the reform.  

4.  IMPACT OF THE REFORM OPTIONS ON EU CUSTOMS IT COSTS 

The  following  sections  describe  the  impact  of  the  options  on  the  IT  aspects  of  EU  customs 
both for Member States, the Commission or an authority, depending on the assessed option, 
on a timeframe of 15 years. 

Using  the  above  architecture  as  the  future  implementation  of  the  Data  Space,  the  cost 
estimations were performed considering two types of costs: 

a)  the cost of central systems developed and operated by the European Commission; and, 

b)  the cost of national systems developed and operated by Member States. 

The  information  available  for  estimating  a)  is  more  accurate  when  compared  to  the  one 
available for b).  

Central systems’ operational and development costs are based on actual IT costs borne by DG 
TAXUD  in  the  last  5  years.  Data  Space  cost  are  based  on  the  cost  of  IT  systems  having 
similar  capabilities  implemented  by  TAXUD,  such  as:  Shared  Trade  Interface  (STI),  Safety 
and Security Analytics (SSA), EU Common Trader Portal (EUCTP), Serv4Dev development 
services. The relevance of the aforementioned IT Systems comes from the fact that they make 
the shift to central EU customs processes in these areas, and give a practical experience with 

Page 161 / 291 

 
 
some  very  relevant  issues  (common  validation,  orchestration  of  processes  across  different 
Member State users, giving trade a single EU communication point and supporting that, links 
to national customs environments, the nature of analytics tools and working methods needed 
to enable multi-disciplinary exploitation of data, etc.) 

National systems costs were estimated through a methodology used in the past to estimate IT 
development  costs  together  with  9  Member  States.  This  estimation  was  validated  by  this 
group  of  Member  States,  and  it  considers  the  workload  required  to  develop  a  new  customs 
system. It is very difficult to provide exact figures on Member State’s customs IT spending. 
In fact, these figures depend on a wide range of factors such as interdependencies with other 
IT systems  within each Member State, structure  of the overall customs systems and type  of 
delivery (in-house, outsourced, or mixed).  

The analysis is also based on the management of projects of DG TAXUD in developing the 
large trans-European IT systems, which spans from building and delivering the infrastructure, 
up to the actual coding of those systems, without neglecting the legislative and non-legislative 
aspects.  However,  such  an  approach  presents  some  limitations:  a)  the  specificities  of  each 
Member State  and the lack of  IT  cost  data entail a certain  degree of  estimation; b)  IT is  an 
ever-changing  domain,  with  costs  quickly  changing  (licencing,  infrastructure,  equipment, 
labour force): therefore, any estimation provided in this report has to be understood in today’s 
economic terms. 

Creating  this  approach  using  a  decentralised  model  (options  1  and  2)  will  require  an  extra 
complexity of having 27 implementations that are interoperable, sharing a common calendar 
and requiring the alignment on development definitions. 

There  are  a  few  caveats  which  concern  the  robustness  of  the  assessment  results.  The  first 
concerns  the  long  period  covered.  In  fact,  technology  is  changing  fast,  and  this  key  factor 
strongly  influences  IT  implementations  and  costs.  However  large  organisations  are  usually 
rather slow on adopting new technologies and hence it is taken as an assumption in all options 
and  scenarios  that  the  technological  basis  of  implementation  will  not  change  drastically. 
Nevertheless,  it  is  considered  likely  that  the  technology  advances  will  rather  facilitate  the 
implementation of data driven systems. (153) 

Another  important  aspect  to  consider  is  that  the  cost  estimation  assumes  a  certain  political 
stability during that period. For example, it is possible that the EU might be expanded beyond 
27 Member States in the 15-year period considered; this would quantitatively affect the global 
cost estimation.  

The  estimations  of  the  different  options’  IT  costs  took  into  consideration  the  same 
assumptions  in  terms  of  effort,  time,  organisation,  and  technology.  For  that  reason,  more 
important than the total cost of each option is the relative comparison of each of the options. 
With  a  good  level  of  confidence,  we  can  say  if  one  option  is  more  costly  than  or  equally 
costly as another option. The assumptions made within each option and how they vary from 
one to the other are stated in the corresponding chapter.  

It is finally considered in some of the options that the Commission and some national customs 
administrations  are  close  to  saturation  of  their  administrative  capacity  for  IT  management. 

(153) Data processing and analytics technologies could be argued to be the most rapidly advancing ones in terms 

of practical implementations.   

Page 162 / 291 

 
 
                                                      
Those scenarios where the IT responsibilities for the Commission increase significantly either 
in  the  medium  or  long  term  might  not  be  feasible  without  an  increase  of  administrative 
capacity. 

For the EU baseline and the options not implying a paradigm change the estimations assumed 
a  continuity  and  could  be  extrapolated  from  the  IT  expenditures  of  the  last  5  years  (2017-
2021).  

For the options envisaging the EU customs Data Space, the costs were calculated based on the 
costs  of  existing  trans-European  systems  (costs  entirely  borne  by  DG  TAXUD  from 
infrastructure  to  software  and  maintenance)  and  were  adjusted  to  envisage  the  necessary 
adaptation  for  those  systems  to  operate  within  a  Data  Space  in  terms  of  complexity  and 
volumetrics.  

The yearly costs were calculated by lines of activity based on gradual implementation of Data 
Space  capabilities  while  phasing  out  of  traditional  systems  and  implementing  the  central 
functionalities via data and application projects. 

The  creation  of  the  customs  Data  Space  is  subject  to  a  transition  period,  during  which, 
existing  UCC  Systems  will  coexist  in  a  complementary  manner  for  the  reasons  explained 
earlier.  

4.1 Baseline from which options are assessed 

The baseline is presented to allow comparisons and implies no significant changes from the 
policy  perspective  and  the  completions  and  continuation  of  the  current  programs  with  no 
change on the IT governance and approaches. 

In  terms  of  program  roadmap,  the  scenario  assumes  the  completion  of  the  UCC  systems 
implementation in 2025.  

For this baseline we considered two types of costs:  

  Operational  Expenditure  (OPEX)  for  the  day-to-day  operations  and  maintenance  of  IT 

systems. These relate to recurrent costs.  

  Capital  Expenditure  (CAPEX)  for  developing,  creating  and  implementing  IT  Systems. 

These relate to one-off investments. 

In  this  baseline,  OPEX  and  CAPEX  were  estimated  assuming  continuity  of  existing  UCC 
systems – including ICS2 -, trans-European systems and some post-UCC projects required in 
any case after 2025. The costs are extrapolated from the current costs estimated as described 
in  the  previous  chapter  and  are  considered  to  be  borne  by  the  commission  and  by  Member 
States as the distributed approach would be continued.  

The  following  diagram  provides  a  very  simplified  view  of  the  IT  architecture  if  the  current 
model  is  to  be  maintained.  As  depicted  in  the  figure,  the  weight  of  customs  processes 
automation and trader interfaces implementation stays in the Member States. (154)  

(154) This excludes the current interfaces to trade offered by EC as ICS2 Shared Trader Portal, the EU Customs 

Trader Portal used for Customs Decisions, INF, BTI, etc. 

Page 163 / 291 

 
 
 
                                                      
Figure 4-Overview of baseline customs systems implementation 

For  each  of  the  options,  some  assumptions  had  to  be  made  regarding  OPEX  and  CAPEX 
expenditures both for the Commission, the Member States or the EU Customs Authority. The 
policy  options  naturally  have  consequences  in  terms  of  the  IT  Systems  required  and  these 
changed the assumptions taken for each option.  

As  said  earlier,  the  objective  is  to  obtain  comparable  results  and  an  understanding  of  the 
costs’ order of magnitude when comparing different options to each other.  

The  list  of  assumptions  considered  for  each  option  will  be  presented  at  each  point.  For  the 
baseline the assumptions are the following: 

  Member States CAPEX (one-off investments) 

  UCC end of implementation in 2025 when investments will be ½ of current ones; 
from  adoption  year onwards annual  investments  of about  1/3 of  current  ones are 
assumed for future programs with a 2% annual increase. 

  Same assumptions apply to trans-European systems development costs. 

  Member States OPEX (recurrent maintenance costs) 

  UCC operational activity (maintenance and operations) with a 2% annual increase. 
  Future  programs  maintenance  and  operations  annual  OPEX  estimated  at  30%  of 

their CAPEX. 
  Commission CAPEX 

  UCC  end  of  implementation  2025;  in  the  last  year  (2025)  1/2  investment 

considered. 

  Future programs start 2025, roofed at 1/3 of current CAPEX. 

  Commission OPEX  

  UCC OPEX continues (maintenance and operations) + 2% yearly. 
  Future programs OPEX 30% of their CAPEX. 

The  results  according  to  the  aforementioned  assumptions  are  represented  in  the  tables  and 
graphs below. 

Page 164 / 291 

 
 
 
 
 
 
 
The  tables  mark  in  green  the  adoption  year  for  the  customs  reform  to  facilitate  comparison 
with  the  options.  Years  marked  in  dark  orange  to  identify  reference  initial  years  of  the 
following MFFs.  

The following graph and table depict the baseline annual IT costs in million EUR for all 27 
Member States based on the above assumptions. 

Figure 5 - Baseline Member States costs 

Table 1 - Baseline Member States costs 

Similarly, the following graph and table provide the baseline IT annual costs affecting the EU 
Budget. 

Page 165 / 291 

COST TYPEADOPTIONA+2A+3A+4A+5A+6A+7A+8A+9A+10A+11A+12A+13A+14A+15TOTALCAPEX2462512562612662722772832882922973033093163224.238OPEX1.7841.8151.8471.8791.9111.9421.9742.0062.0382.0692.1002.1322.1642.1962.22730.084TOTAL2.0302.0662.1032.1402.1772.2142.2512.2882.3262.3602.3982.4352.4732.5112.54934.322 
 
 
 
 
 
 
 
 
 
 
 
 
 
Figure 6 - Baseline Commission costs 

Table 2 - Baseline Commission costs 

The baseline annual cost evolution for IT both for Member States and EU budget a reduction 
on investments from 2025 onwards parallel to stable slowing increasing of operational costs. 

The total number provided in the table consider the whole period including the years before 
adoption. The comparison of the baseline figures to the options’ figures depend on the actual 
date of adoption. 

The  15  years  estimated  considered  would  amount  to  a  total  of  34  Billion  EUR  for  the  27 
Member States and 1.7 Billion EUR for the EU Budget. 

The table below presents the total figures using the same period as is used further down in the 
options, to facilitate comparison: 

Table 3 – Baseline Member States and Commission costs 

Page 166 / 291 

COST TYPEADOPTIONA+2A+3A+4A+5A+6A+7A+8A+9A+10A+11A+12A+13A+14A+15TOTALCAPEX141414141515151616151616161717229OPEX88909193949698991011021041051071091101,487TOTAL1021031051071091111131151171181191211231251271,717MS/EUCOST TYPEADOPTIONA+2A+3A+4A+5A+6A+7A+8A+9A+10A+11A+12A+13A+14A+15TOTAL27 MSTOTAL2,0302,0662,1032,1402,1772,2142,2512,2882,3262,3602,3982,4352,4732,5112,54934,322EU budgetTOTAL1021031051071091111131151171181191211231251271,717 
 
  
 
 
 
 
 
 
4.2 Option 1 – A package of simpler processes 

This  option  contains  a  package  of  changes  to  customs  processes,  to  propose  a  series  of 
solutions to the identified main issues in the customs processes in the UCC. The processes are 
explained  in  detail  in  Annex  5.  It  brings  a  change  on  the  information  paradigm  and  the 
customs processes in relation with the economic operators. This option is different from the 
baseline as it considers there is a paradigm change on how data is used in customs processes.  

The existing systems are considerably impacted by this change. As the policy approach taken 
is  a decentralised one,  it is  assumed the changes are to  be applied by the  Member States in 
their  own  systems.  Additionally,  it  also  impacts  Commission  systems  as  they  will  have  to 
adapt on their side to the new paradigm. In practice a decentralised implementation of Data 
Space platforms has to be put in place by 27 + 1 (Member States + Commission).  

The costs estimations are based on the following considerations: 

  UCC systems development costs (CAPEX) for both Member States and Commission will 
be discontinued already on the adoption year. There is nevertheless need for a gradually 
decreasing  OPEX  (10  %  yearly  during  10  years)  for  these  systems  during  the  transition 
period. 

 

 

In  the  adoption  year  new  projects  will  be  launched  based  on  the  new  architecture.  This 
will  require  an  investment  as  assumed  in  the  traditional  trans-European  implementation 
for both Member States and Commission. On Member States, there is an additional effort 
on the implementation of national Data Spaces. This is assumed to take 5 years. 

In  the  adoption  year  the  transition  period  is  launched  for  Member  States  declaration 
systems mainly which will involve the gradual implementation of all data and associated 
application projects.  

  The current systems will have to be operated in parallel to the new  ones, so their OPEX 
stays  for  another  5  years.  During  this  period,  it  is  considered  that  OPEX  is  required  for 
both  legacy  and  new  systems.  The  larger  operational  costs  will  be  at  Data  Spaces 
(platforms) level while the operational costs of applications will be reduced. 

  Operational costs at Commission level will stay similar to current levels with the creation 

and migration to new interoperability mechanisms with Member States.  

For the cost estimations, the assumptions considered for option 1 were the following: 

  Member States CAPEX  

  UCC  end  of  implementation  in  2025  and  no  more  UCC  investments  in  adoption 

year onward.  

  UCC  TES  systems  development  stops  in  2025  however  an  additional  year  of 

investment is considered for evolutive maintenance. 

  National Data Spaces implemented in 5 years, starting in the adoption year. 
  Transformation  program  (legacy  to  Data  Space  systems)  implies  implementation 
of about 38 application projects and 40 data projects per year for 10 years starting 
on adoption date.   

  New  programs  as  eCommerce,  Single  Window,  etc.  imply  15  each  of  EU  data 

projects and applications projects per year. 

Page 167 / 291 

 
 
 
 
  Member States OPEX 

  UCC decreasing during the phase out period, as existing IT systems are  replaced 
by  Data  Space  applications,  over  a  period  of  10  years  starting  on  adoption  year. 
Same for TES system maintenance.   

  Data  Spaces  and  new  programs  applications  and  data  projects  maintenance  and 
operations  costs  accumulate  along  the  years  as  they  are  implemented  (annual 
OPEX assumed 15% of CAPEX per project). 

  Commission CAPEX  

  UCC  TES  end  of  implementation  2026;  in  the  last  year  (2026)  ½  investment 

considered. 

  10 data projects and 10 application projects per year in the long term to cover the 

transformation effort. 

  20 data projects and 20 application projects/year for a period of 5 years starting in 

the adoption year form implementing new programs. 

  Commission OPEX 

  UCC  OPEX  continues,  gradual  reduction  as  migration  occurs.  20%  is  left  for 

residual central IT systems. 

  Development  by Commission  of 10  Commission data processes  and  applications 

per year in Member States Data Spaces. 

The  graphs  and  table  below  provide  the  results  on  the  annual  costs  based  on  the  above 
assumptions  considering  15  years  from  the  date  of  adoption  of  the  reform.  The  green  and 
orange  markers  in  the  tables  are  identifiers  of  the  date  of  adoption  in  order  to  facilitate 
comparison with the baseline.  

Figure 7 – Option 1 Member States costs 

Table 4 - Option 1 Member States costs 

Page 168 / 291 

COST TYPEADOPTIONA+2A+3A+4A+5A+6A+7A+8A+9A+10A+11A+12A+13A+14A+15TOTALCAPEX1,3471,2961,2961,2961,29670470470470470419119119119119111,010OPEX1,7722,2112,3212,5832,8393,0893,0142,9322,8442,7492,6482,6772,7062,7342,76339,883TOTAL3,1193,5073,6173,8794,1353,7933,7183,6373,5483,4542,8402,8682,8972,9262,95450,893 
 
 
 
Figure 8 - Option 1 Commission costs 

Table 5 - Option 1 Commission costs 

The consequences of this option on IT costs are a notable increase for Member States globally 
given the effort required to implement and migrate to each of their Data Spaces and a relative 
stability  for  the  EU  budget  as  the  effort  involved  in  integrating  national  Customs  Systems 
(trans-European  interoperability)  would  decrease  as  National  Data  Spaces  would  mostly 
assume this task. 

The following two graphs provide the delta between this option and the baseline for Member 
States and for the EU budget. 

Figure 9 - Option 1 Member States costs comparison to baseline 

Page 169 / 291 

COST TYPEADOPTIONA+2A+3A+4A+5A+6A+7A+8A+9A+10A+11A+12A+13A+14A+15TOTALCAPEX472727272714141414141414141414296OPEX851001111221241231161101039689818486881,516TOTAL13212613814915113713012411711010395981001031,812 
 
 
 
 
Compared to the baseline this option would imply additional expenses for all the 27 Member 
States  for  a  total  of  16  571  million  EUR.  The  main  differences  in  annual  costs  would  be 
during the first 10 years after adoption considering the Data Spaces implementation and the 
transformation effort.  

Figure 10 - Option 1 Commission costs comparison to baseline 

For the EU budget the initial years after adoption will require an increase as compared to the 
baseline  in  order  to  cover  the  integration  of  Commission  systems  with  the  Member  States 
Data Spaces and in  the longer term  a reduction of costs compared to  the baseline. This  is a 
reflection that the core effort in this option is assumed by the Member States and the central 
coordination and interoperability effort is reduced. Nevertheless, in total the overall cost for 
the 15 years is 96 million EUR more than in the baseline. 

4.3 Option 2 – EU Customs Authority for coordination 

This option brings a change on the information paradigm as in option 1. It differentiates from 
the baseline in the same way as option 1, the major difference being the introduction of an EU 
Customs Authority in the form of an agency 

As in option 1, existing IT systems are considerably impacted by this change. As the policy 
approach  taken  is  a  decentralised  one,  it  is  assumed  the  changes  are  to  be  applied  by  the 
Member  States  in  their  own  systems.  Additionally,  it  also  impacts  Commission  systems  as 
they  will  have  to  adapt  on  their  side  to  the  new  paradigm.  In  practice  a  decentralised 
implementation of Data Space platforms has to be put in place by 27 + 1 (Member States plus 
Commission). 

The costs estimations are based on the following considerations: 

  Development costs (CAPEX) for both Member States and Commission will be continued 
until  2025  to  complete  the  UCC  implementation.  In  2025,  only  1/2  investment  is 
considered  and  then  no  more  development  on  current  systems.  There  is  nevertheless  a 
need for OPEX during the transition period. 

 

In 2026 new projects will be launched based on the new architecture. This will require an 
investment as assumed in the traditional trans-European implementation for both Member 

Page 170 / 291 

 
 
 
States  and  Commission.  On  Member  States,  there  is  an  additional  effort  on  the 
implementation of national Data Spaces. This is assumed to take 5 years. 

 

In adoption year the transition period is launched for Member States declaration systems 
mainly  which  will  involve  the  gradual  implementation  of  all  data  and  associated 
application projects.  

  The current systems will have to be operated in parallel to the new ones, so their OPEX 
stays  for  another  5  years.  During  this  period,  it  is  considered  that  OPEX  is  required  for 
both  legacy  and  new  systems.  The  larger  operational  costs  will  be  at  Data  Spaces 
(platforms) level while the operational costs of applications will be reduced. 

  Operational  Costs at  the level  of the EU  services will stay similar to  current  levels  with 
the creation and migration to new interoperability mechanisms with Member States.  

For the cost estimations, the relevant assumptions considered for option 2 were the following: 

  Member States CAPEX 

  UCC end of implementation in 2025 and no more UCC investments in 2026. 
  UCC TES systems development (UCC) end in 2026. 
  National Data Spaces implemented in 5 years, starting from the adoption year. 
  EU data projects and application projects/year: 15 of each per year. 

  Member States OPEX 

  UCC  OPEX  decreasing  during  the  phase  out  period,  as  existing  IT  systems  are 

replaced by Data Space applications, over a period of 10 years. 

  UCC  TES  systems  maintenance  experience  a  gradual  reduction  as  national  Data 

Space take over, over a period of 10 years. 

  Commission CAPEX 

  UCC  end  of  implementation  2025;  in  the  last  year  (2025)  1/2  investment 

considered.  

  Commission  implementing  5  data  and  application  projects  and  applications  per 

year. 
  Commission  OPEX 

  UCC  OPEX  continues,  gradual  reduction  as  migration  occurs.  20%  is  left  for 

residual central IT Systems. 

  Authority CAPEX 

  20 data projects and 20 application projects/year for a period of 5 years starting in 

the adoption year. 

  Development of 10 EC data processes and applications per year in Member States 

Data Spaces. 

  Authority OPEX 

  Authority operates & maintains the created data and application projects. 

The  graphs  and  tables  below  provide  the  results  on  the  annual  costs  based  on  the  above 
assumptions  considering  15  years  from  the  date  of  adoption  of  the  reform.  The  green  and 
orange  markers  in  the  tables  are  identifiers  of  the  date  of  adoption  in  order  to  facilitate 
comparison with the baseline.  

Page 171 / 291 

 
 
 
Figure 11 – Option 2 Member States costs 

Table 6 – Option 2 Member States costs 

For Member States  this option results on costs basically identical  to  Option 1;  a continuous 
investment  effort  that  reduces  in  the  long  term  with  an  overall  yearly  cost  stabilising  a  bit 
below current values in the long term.  

Figure 12 – Option 2 EU services’ costs 

Page 172 / 291 

COST TYPEADOPTIONA+2A+3A+4A+5A+6A+7A+8A+9A+10A+11A+12A+13A+14A+15TOTALCAPEX1,3471,2961,2961,2961,29670470470470470419119119119119111,010OPEX1,7722,2112,3212,5832,8393,0893,0142,9322,8442,7492,6482,6772,7062,7342,76339,883TOTAL3,1193,5073,6173,8794,1353,7933,7183,6373,5483,4542,8402,8682,8972,9262,95450,893 
 
 
 
 
 
 
 
 
Table 7 - Option 2 EU services’ costs 

For the EU budget this option is similar to option 1 with a fundamental difference  related to 
the costs of setting systems for the EU Customs Authority. 

Figure 13 - Option 2 Member State costs compared to baseline 

Compared to the baseline this option would imply additional expenses for all the 27 Member 
States  for  a  total  of  16  571  million  EUR.  The  main  differences  in  annual  costs  would  be 
during the first 10 years after adoption considering the Data Spaces implementation and the 
transformation effort.  

Figure 14 - Option 2 EU services’ costs compared to baseline. 

Page 173 / 291 

COST TYPEADOPTIONA+2A+3A+4A+5A+6A+7A+8A+9A+10A+11A+12A+13A+14A+15TOTALCAPEX502929292917171717171717171717331OPEX85100114127130130124119114109103971011041081,664TOTAL1341291431561591461411361311251191131171211251,995 
 
 
 
 
As in  option 1 for the EU budget  the initial  years after  adoption will require an increase as 
compared to the baseline in order to cover the integration of central systems with the Member 
States Data Spaces and in the longer term a reduction of costs compared to the baseline. This 
is  a  reflection  that  the  core  effort  in  this  option  is  assumed  by  the  Member  States  and  the 
central  coordination  and  interoperability  effort  is  reduced.  Nevertheless,  in  total  the  overall 
cost for the 15 years is 279 million EUR more than in the baseline. 

4.4 Option 3 – A central EU customs Data Space, managed by the Commission 

This option, as options 1 and 2, changes the information paradigm, the customs processes and 
the  relations  with  economic  operators.  It  differs  from  options  1  and  2  by  making  the 
implementation  central,  by  the  European  Commission,  instead  of  having  a  distributed 
implementation by 27 Member States.  

The costs estimations are based on the following considerations: 

  The Member States development effort is severely reduced throughout the implementation 

period and considered zero after 12 years.  

  Data Space implementation by Commission is assumed to cost 100% more to cover cross-
EU  specificities  (languages,  users  trainings,  etc.)  and  integration  needs.  The  Data  Space 
OPEX is assumed to cost 150% more to cover increase capacity and support needs. 

  The implementation  as  in  the  previous  scenarios is  gradual  starting with  the e-commerce 
and  single  window  from  the  adoption  year  and  incorporating  all  other  programs 
sequentially from adoption year. 

  Development costs (CAPEX) for both Member States and Commission will end in 2025 to 

complete the UCC implementation. 

  In the adoption year new projects will be launched centrally based on the new architecture 
which  will  require  an  investment  as  assumed  in  the  traditional  implementation  for  both 
Member  States  and  Commission  with  the  addition  at  Commission  side  of  the 
implementation of an EU Data Space. This is assumed to take 5 years. 

  Two  years  after  adoption  year  the  transition  period  is  launched  for  Member  States 
declaration  systems.  It  is  assumed  will  involve  a  large  reduction  in  CAPEX  for  Member 
States as compared to the baseline given the reinforced centralisation element. This brings 
larger Commission CAPEX and OPEX costs estimated at 3 times the current ones. 

  The current  systems  will have to  be operated in  parallel  to  the new  ones, so their OPEX 
stays  for  another  10  years  adding  to  the  OPEX  of  the  new  ones.  The  larger  operational 
costs will be at Data Space (platform) level while the operational costs of applications will 
be reduced. 

  Operational  costs  at  Commission  level  will  notably  increase  compared  to  current  levels 

with the migration to new interoperability mechanisms with Member States systems. 

For the cost estimations, the relevant assumptions considered for option 3 were the following: 

  Member States CAPEX 

  UCC end of implementation in 2025 and no more UCC investments in 2026. 
  UCC TES systems development (UCC) end in 2026. 

Page 174 / 291 

 
 
  EU Data Space 5 years implementation starting on the adoption year (2x factor for 
implementation).  First  two  years  after  adoption  gradual  embryonic  start  of  Data 
Space as part of e-commerce.  

  Member  State  implementation  of  new  programs  using  EU  Data  Space:  10  new 

data projects and 10 app projects/year per Member State for 5 years. 

  Member States transition starting 2 years after adoption date for a duration of 12 

years assuming 10 data and application projects per year. 

  Member States OPEX 

  UCC  OPEX  decreasing  during  the  phase  out  period,  as  existing  IT  systems  are 

replaced by Data Space applications, over a period of 10 years. 

  UCC TES systems maintenance experience a gradual reduction as the Data Space 
takes  over,  over  a  period  of  10  years.  Residual  OPEX  costs  for  specific  national 
components participating to the Data Space. 

  Commission CAPEX 

  UCC  end  of  implementation  2025;  in  the  last  year  (2025)  1/2  investment 

considered. 

  Development of 50 data and application projects (155)/year for a period of 5 years 

starting in 2026 to implement new programs. 

  Development of all core data processes and application in 10 years. 

  Commission OPEX 

  UCC  OPEX  continues,  gradual  reduction  as  migration  occurs.  20%  is  left  for 

residual central IT Systems. 

  Build  of  all  data  processes  and  application  in  10  years.  After  that  period,  it  is 

considered that 40 projects per year will be implemented centrally. 

The  graphs  and  tables  below  provide  the  results  on  the  annual  costs  based  on  the  above 
assumptions  considering  15  years  from  the  date  of  adoption  of  the  reform.  The  green  and 
orange markers in the tables are placed in order to facilitate comparison with the baseline.  

(155) Please refer to section  for a definition of Data and Application projects. 

Page 175 / 291 

 
 
 
 
 
 
 
 
 
 
 
 
                                                      
Figure 15 - Option 3 Member States costs 

Table 8 - Option 3 Member States costs 

As can be seen this option implies a large reduction of IT costs for the Member States; this is 
the  natural  consequence  of  the  centralisation  of  systems.  There  are  of  course  certain 
investment to be made to cover the transition activity and participate in mid-term projects.  

Figure 16 - Option 3 Commission costs 

Page 176 / 291 

COST TYPEADOPTIONA+2A+3A+4A+5A+6A+7A+8A+9A+10A+11A+12A+13A+14A+15TOTALCAPEX1281282552552551281281281281281281281281281282,296OPEX1,7721,6471,5531,4341,3041,1681,02685968550131432934436338313,682TOTAL1,9001,7741,8081,6891,5591,2961,15498681262844245747249151015,978 
 
 
 
 
 
Table 9 - Option 3 Commission costs 

For the EU budget this option implies a significant increase on annual IT costs most specially 
in  the  first  years  after  adoption  in  order  to  cover  the  implementation  of  the  Data  Space 
infrastructure  and  the  initial  years  of  the  transition  where  data  projects  and  application 
projects  will  need  to  be  implemented  centrally  gradually  replacing  the  Member  States 
systems. 

The  following  two  graphs  depict  the  delta  of  this  option  as  compare  with  the  baseline  for 
Member States and for the EU budget respectively. 

Figure 17 - Option 3 Member State costs compared to baseline 

For Member States this option leads to saving of over 2 000 million EUR in IT costs annually 
for the 27 Member States. In total the savings for the considered period as compared to the 
baseline are of up to 18 billion euros. 

Page 177 / 291 

COST TYPEADOPTIONA+2A+3A+4A+5A+6A+7A+8A+9A+10A+11A+12A+13A+14A+15TOTALCAPEX405310410410475232323232323232323685OPEX1101291712372572592392302332392562632622632623,410TOTAL1511812743413613352622522562622792862852862854,095 
 
 
 
 
 
 
 
 
 
 
 
Figure 18 - Option 3 Commission costs compared to baseline 

The situation for the EU budget is inversed, as in this case the effort increases specially in the 
mid-term  where  higher  investments  are  required  than  in  the  baseline  to  implement  the 
infrastructure of the central  Data Space.  In the long term this scenario implies an additional 
150  million  EUR  annual  IT  cost  for  the  EU  budget  compared  to  the  baseline  on  the  same 
years. 

4.5 Option 4 – EU Customs Authority for cooperation and operations, managing an EU 
Data Space 

This  option  is  comparable  to  option  3.  However,  the  digital  implementation  is  at  EU  level, 
implemented  by  an  EU  Customs  Authority.  It  differentiates  from  option  3  by  making  the 
implementation central, instead of being implemented by the Commission.  

It follows the same assumptions as in option 3 above, with following differences: 

  Slightly  more  ambitious  centralisation,  more  central  projects,  and  less  residual  Member 

States activity. 

  Data Space implementation is gradual as in Option 3 but implemented by the EU Customs 

Authority in 2026 (no fundamental changes in costs). 

For the cost estimations, the assumptions considered for Option 4 were the following: 

  Member States CAPEX 

  UCC end of implementation in 2025 and no more UCC investments in 2026. 
  5 data projects and 5 application projects per year. Considering the first two years 

for e-commerce and then a gradual increase. 

  Member  States  self/local  implementation  in  EU  Data  Space:  5  new  data  projects 

and 5 application projects/year per Member State. 

  Member States OPEX 

  UCC  OPEX  decreasing  during  the  phase  out  period,  as  existing  IT  systems  are 

replaced by Data Space applications, over a period of 10 years. 

Page 178 / 291 

 
 
 
 
  Commission CAPEX 

  UCC TES systems development ends in 2026. 

  Commission OPEX 

  UCC TES systems maintenance experience a gradual reduction as the Data Space 

takes over, over a period of 10 years. 

  UCC  OPEX  continues,  gradual  reduction  as  migration  occurs.  20%  is  left  for 

residual central IT systems. 
  EU Customs Authority CAPEX 

  EU Data Space implemented in 5 years, starting on adoption year. The period from 
2026-2027  used  for  embryonic  start  of  Data  Space  with  a  forerunner  project:  e-
commerce. Implementation of 10 projects per year. 

  70 data projects and 20 application projects/year for a period of 5 years starting in 

2026. 

  Build  of  all  data  processes  and  application  in  10  years.  After  that  period,  it  is 

considered that 50 projects per year will be implemented centrally. 

The  graphs  and  tables  below  provide  the  results  on  the  annual  costs  based  on  the  above 
assumptions  considering  15  years  from  the  date  of  adoption  of  the  reform.  The  green  and 
orange markers in the tables are identifiers to facilitate comparison with the baseline.  

Figure 19 - Option 4 Member States costs 

Table 10 - Option 4 Member States costs 

For  Member  States  the  reduction  of  costs  in  the  long  term  is  even  larger  than  for  Option  3 
given that the centralisation is assumed to be even greater than in option 3. Nevertheless for 
Member States the scenario and savings are very similar.   

Page 179 / 291 

COST TYPEADOPTIONA+2A+3A+4A+5A+6A+7A+8A+9A+10A+11A+12A+13A+14A+15TOTALCAPEX6464128128128646464646464646464641,148OPEX1,7721,6371,5151,3761,2281,07391173455135716116717218219112,027TOTAL1,8361,7011,6421,5041,3551,13697579861542122523023624625513,175 
 
 
 
 
Figure 20 - Option 4 European Union costs (Commission and EU Customs Authority) 

Table 11 - Option 4 European Union costs (Commission and EU Customs Authority) 

For  the  EU  budget  this  option  implies  as  in  Option  3  a  strong  investment  for  the 
implementation of the Data Space infrastructure and a long-term stabilisation on the yearly IT 
costs in about 300 million EUR. 

The  difference  to  the  baseline  is  represented  in  the  two  graphs  below,  the  first  for  Member 
States and the second for the EU budget.  

Figure 21 - Option 4 Member States costs compared to baseline 

Page 180 / 291 

COST TYPEADOPTIONA+2A+3A+4A+5A+6A+7A+8A+9A+10A+11A+12A+13A+14A+15TOTALCAPEX446011612912977242424242424303030788OPEX1101311742422642682482382422482672762762762763,536TOTAL1551902903723943442722622662722903003063053064,324 
 
 
 
 
For  all  27  Member  States,  as  seen  above,  the  yearly  savings  increase  gradually  reaching  a 
value  of  almost  2.3  billion  euros  per  year.  The  total  saving  for  the  total  15-year  period  is 
estimated at about 21 billion euros.  

Figure 22 - Option 4 European Union costs (Commission and EU Customs Authority) 

For  the  case  of  the  EU  budget  (Commission  and  EU  Customs  Authority)  the  estimations 
results are again very similar to option 3 but with a slight increase that covers the additions 
effort  to  set  the  base  EU  Customs  Authority’s  infrastructure  and  systems  and  pay  for  the 
administrative systems. 

4.7 Summary of the options 

The  following  diagram  shows  a  comparative  evolution  of  yearly  costs  for  all  27  Member 
States of each option relative to the baseline. 

Figure 23 - Overview of Member States costs on all options and baseline 

Page 181 / 291 

 
 
 
 
As can be seen the impact of the options in Member States IT costs is either: 

  Options  1  and  2:  a  temporary  increase  of  costs  to  implement  the  Data  Spaces  in  the 

Member States with a long-term stabilisation just over the baseline estimation, or  

  Option 3 and 4: a drastic decrease in IT costs in the long term as compared to the baseline.  

Figure 24 - Overview of European Union costs on all options and baseline 

For the EU budget the options also show two distinct scenarios:  

  Options 1 and 2 leading to rather similar or slightly lower costs than the baseline and  

  Option 3 and 4 leading to correspond greater increases in central budget.  

The costs impacts can be seen in the following table comparing  IT costs at global, Member 
States  and  central  levels  on  the  baseline  and  the  different  options  for  the  15-year  period 
considered. 

Table 12 Overall IT costs compared per option and stakeholder 

Cost in million 
EUR 

Baseline  Option 1  Option 2   Option 3   Option 4 

27 Member States 

34 322 

50 893 

50 893 

15 978 

13 175 

Average per MS  

Central EU  

1 271 

1 717 

1 884 

1 812 

1 884 

1 995 

591 

4 095 

487 

4 324 

It  could be argued that technology and or methodology evolutions  would allow in the long-
term  reduction  of  overall  costs  as  per  estimated  here.  For  example,  the  use  of  cloud 
technologies,  information  management  innovations,  application  development  solutions  etc. 
will  without  doubt  appear  in  the  market  and  enable  easier  and/or  faster  and/or  cheaper  IT 
systems,  affecting  the  overall  cost  estimations.  Nevertheless,  these  new  technologies  would 
affect similarly all scenarios and the relative comparison would be similar.   

More  importantly,  the  assessment  provided  herein  should  be  considered  in  context  of  the 
overall policy options themselves to weigh them in agreement with the overall policy benefits. 
No  doubt,  IT  costs  and  dependency  on  information  technology  is  a  fundamental  factor  to 

Page 182 / 291 

 
 
 
weight in and affect greatly the overall picture but while its footprint can be minimised it can 
only  be  done  to  limit.  IT  is  the  fundamental  tool  of EU  customs  today  and  investments 
are necessary for it to become most effective.  

5.  COST ESTIMATION MODEL AND METHOD FOR THE ICT ASSESSMENT 

The purpose of this  chapter is  to  explain the logical  reasoning, assumptions and  calculation 
that lead to the cost estimations provided above.  

5.1 Estimation of Member States costs 

This  analysis  was  confronted  with  a  lack  of  baseline  data  to  use  for  the Member  States’  IT 
costs.  This  adds  to  the  fact  that  the  IT  costs  in  Member  States  are  very  different,  and  any 
calculation would be clearly off with respect to the real situation in many of them.   

For this reason a statistical approach was made based on indirect input and using a structure 
previously  validated  by  the  Member  States.  That  structure  is  the  EU  customs  reference 
architecture defined by a working group with the participation of 9  Member States and later 
validated by the ECG. (156)  

The  customs  reference  architecture  is  based  on  a  matrix  representation  of  EU  customs 
functions  and  data  groups  versus  customs  processes;  it  depicts  the  current  procedural 
approach of EU customs and it enabled to map IT systems automating any customs capability. 

(156) Published to the ECG in CIRCABC on April 2012 and presented in the ECG226 meeting on EU Customs 
(https://circabc.europa.eu/ui/group/74357351-7c61-4729-8f4b-

Reference  Architecture  on  16/07/2012 
cd92c213ba34/library/b5b3a3ad-f81b-4a08-8c98-4af0f6650ded/details). 

Page 183 / 291 

 
 
                                                      
Figure 25 - EU Customs reference architecture 

184 

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ResourcesNLFIPLEENLFIPLEENLFIPLEENLFIPLEENLFIPLEENLFIPLEEFIPLEEFIPLEENLPLNLPLPLNLPLNLPLNLFIPLIENLPLIENLPLNLFIPLIENLFIPLIENLPLNLPLNLPLEENLPLSEITNLFISEITPLIEDKEENLFISEITPLIEDKEESEITIEDKNLFISEITPLIEDKEENLFIITPLDKEEFISEITPLIEDKEEFISEITPLIEDKEEFIIEFIITIEFIIEFISEITPLIEDKNLFIITIEDKFIITIEFIITIEEENLFISEITIEEENLFISEITIEEEITPLDKPLIEDKNLFISEITPLIEDKEEFIPLIEDKNLFISEITPLDKEEFISEDKEEPLIEFIITIEFIITPLIEDKNLFIITIEDKFIITIEFIITEENLFIEENLFIEEPLDKNLFIITIEEENLFIITPLIEEENLFIITPLIEEENLFIITIEEEFIITIEEEFIITPLIEEEFIITPLIEEEFIITPLIEEEFIITIEFIITFIITPLIENLFIITIEFIITIEFIITIEEENLFIITIEEENLFIITIEEEPLNLITPLEENLFISEITPLIEEENLFISEITPLIEEENLFIITPLIEEENLFIITPLIEEENLFIPLIEEEFIPLIEEEFIPLIEEEFIITFIITNLFIITFIITFIITEENLFIEENLFIEEPLPLFISEITPLEESEITPLNLFISEITPLIEDKEEFIITPLIEEEFIITPLIEEEFIITIEEEFIITIEFISEITPLIEDKEEFIITITITFIITEEFIITEEFIITEENLFIITPLITFISEITPLIEDKEESEITPLITITITPLEEFIITPLEEIEFIITFIITPLEEFIITPLIEITFIITFIITEEFIITEEFIITEENLFISEITPLDKEEITPLNLFISEITPLIEDKEENLFISEITPLIEDKEENLFISEITPLIEDKEENLFIITPLDKEENLFIITPLIEDKEENLFIITPLDKEEFISEITPLDKEEFISEITPLDKEEIEFIITIEFIITNLFISEITPLIEDKEENLFISEITPLIEEENLFISEITPLIEFIEENLFISEITIEEENLFISEITIEEEPLFISEITPLIEDKEENLFISEITPLIEDKEENLFISEITPLIEDKEEFISEITPLIEDKEENLFISEITPLIEDKEEFIITPLDKEEFISEITPLIEDKEEFISEITPLIEDKEEFIITIEFIITFIITIEFIITIEFIITIEFIIEEEFIIEEEFIIEEENLFISEITPLIEDKEEITIENLFISEITPLIEEENLFISEITPLIEEENLFISEITPLIEEENLFISEITPLIEEENLFISEITPLIEEENLFIITPLEEFISEITPLEEFISEITPLEENLFISENLFISEITNLFISEITNLFISEITPLIENLFIITNLFIITNLFIIEEEFIIEEEFIPLIEEENLPLNLFISEITIEDKEEDKNLFIITIEDKEENLFIITIEDKEENLFIITIEDKEENLFIITIEDKEENLFIITIEDKEENLFIITDKEEFIITDKEEFIITDKEENLNLITNLITFIITPLIENLFIITNLFIITNLFIITPLEEFIPLEEFIPLEENLFIPLEENLPLEENLFISEITPLDKNLFISEITPLIEDKNLFISEITPLIEDKEENLFISEITPLIEDKEENLFISEITPLIEDKEENLFISEITPLIEDKNLFIITPLIEDKEEFISEITPLIEDKEEFISEITPLIEDKEESEITPLIEDKNLFISEITPLIEEEEEFIITIEFISEITIENLFIITIEFIITNLFIITIEEENLFISEITIEEENLFIITIEEEITPLNLSEFIITPLIEDKEENLSEFIITPLIEDKEENLSEFIITPLIEDKEENLSEFIITPLIEDKEENLSEFIITPLIEDKEENLFIITPLIEDKEEFISEITPLIEDKEEFISEITPLIEDKEENLFISEITPLIEDKEENLFISEITPLIENLFIITIENLFISEITPLIEDKNLFIITNLFIITNLFIITIEEENLFISEITIEEENLFIITIEEENLFIITPLPLDKFunctionsCommunication FunctionsClearance FunctionsSupport FunctionsData AreasCustoms DeclarationsSafety & Security DeclarationsSupporting DocumentsNotificationsDecisions & Authorisations and Customs DocumentsEconomic OperatorsGuarantee DataPayment DataRisk DataTariff & CN DataReference & Specimen DataBusiness Statistics & Reports 
 
 
The mapping was done by the Member States participating in the project and the result is in 
the colouring of the chart. The intensity of the colour in a cell relates to how many  Member 
States  have  systems  automating  that  function  and  is  assumed  to  relate  to  the  complexity  or 
functional weight of the capability in question. A similar action was done considering the data 
groups involved in the development.  

This allows to measure the relative complexity of each vertical process and use it as reference 
point for relative costs of implementing or maintaining each process automation system.  

During the modernised customs code cost assessment exercise, Member States provided input 
on the potential cost expressed in FTEs involved in fully redeveloping some of the processes 
above.  

Assigning  the  different  inputs  as  minimum  and  maximum  for  those  processes  and 
extrapolating  on  its  relative  complexity,  we  could  calculate  an  estimate  of  minimum  and 
maximum total CAPEX costs of (re-)development of the different customs system processes. 

Adding  a  range  of  maintenance  and  operational  costs;  between  15%  and  25%  of  the  total 
implementation  cost  is  assumed  to  be  the  yearly  costs  of  operations  for  a  system  (OPEX). 
Yearly CAPEX cost was assessed based on an average of 5 years of implementation of any of 
the customs process automation systems. 

The  result  drove  to  a  rough  estimation  of  about  82  million  EUR  of  IT  costs  in  average  per 
Member State. Informal consultations and assessments lead to similar figures, which  in turn 
allowed  to  conclude  that  the  estimation  is  good  enough  in  order  of  magnitude,  when 
compared to the current effort of UCC implementation and operation.  

The above baseline estimation of Member States costs is used for the calculations of the costs 
of the options whenever traditional implementations were considered. In general, a 2% yearly 
increase of costs was added both for annual OPEX and CAPEX.   

The eCustoms costs have been covered in the estimations based on the eCustoms reports of 
2017  to  2020.  An  average  has  been  made  of  those  years  together  with  an  adjustment  to  27 
Member States given that the number of Member States costs reported is not constant along 
the  years.  The  eCustoms  covers  the  budget  involved  in  the  development  and  maintenance 
effort to update the existing customs systems to the UCC requirements but does not show the 
complete IT costs of Member States in other systems nor operations, infrastructure, or other 
IT service management activities.  

A rough assessment of the cost of future programs was done by comparing to a fraction of the 
current  UCC  implementation  costs  as  estimated  above.  As  mentioned  in  the  previous 
chapters, future programs are assumed to be less ambitious than the current UCC which has a 
rather large impact in IT customs in general. In the worst-case scenario, it is assumed to have 
3/4 of UCC eCustoms budget  and in less ambitious scenario 1/3 of that. These assumptions 
affect the longer-term costs of implementations and related operations. 

Finally,  variations  due  to  legacy  phase-out,  updates  and  renovation  of  systems  were 
embedded in the operational and maintenance costs. In some cases, these renovations would 
clearly require temporary additional budget, which were not considered in the estimations. 

185 

 
 
5.2 Estimation of Commission and European Customs Authority costs 

In the case of Commission IT spending, the cost information is available.  

The  Commission  customs  IT  costs  (TAXUD  not  including  administrative  costs)  for  2021 
were considered as a good representation of the UCC implementation and operational costs. 
The  values  in  the  estimation  were  extrapolated  from  there.  As  done  with  Member  States 
estimations, a 2% yearly increase was incorporated in the extrapolation.  

The application of the estimations followed the same logic and principles, as for the Member 
States  costs  in  the  different  options.  These  were  applied  in  the  options  where  traditional 
implementations are considered.  

In  the  options  where  an  EU  Customs  Authority  is  foreseen,  a  25%  increase  of  operational 
costs  is  added  to  the  total  budget,  for  a  duration  of  2  years.  These  and  the  total  costs  are 
the 
shared  by 
handover/takeover  exercise.  This  is  the  worst-case  scenario  on  costs  but  set  in  a  best-case 
scenario  in  timing.  In  fact,  a  two-year  period  for  the  take-over  of  IT  responsibility  is 
considered a minimum.  

the  EU  Customs  Authority, 

the  Commission  and 

to  cope  with 

5.3 Estimation of Data Space costs 

The  estimation  of  the  Data  Space  implementation  cost  both  for  a  central  version  and  a 
Member  States  implementation  have  been  estimated  based  on  the  capabilities  considered 
necessary  for  its  implementation  and,  when  possible,  extrapolation  form  existing  systems 
providing that capability in the Commission.  

The following figure summarizes the different capabilities and the estimated costs for each; in 
each case the CAPEX is the total cost of implementation while the OPEX is the yearly cost of 
operating and maintenance. 

Page 186 / 291 

 
 
 
 
 
 
 
 
 
 
 
 
 
Figure 26 - Customs Data Space costs estimation 

following  diagram 

The 
the  six  major  capabilities  considered  where 
implementations  exists  and  the  extrapolation  factor (157)  used  to  assess  the  Data  Space 
implementation cost (CAPEX) and operational and maintenance costs (OPEX). 

represents 

(157) The  extrapolation  factor  here  implies  the  multiplication  factor  in  terms  of  sizing  and  complexity  (and 

therefore in costs) for the CAPEX and/or OPEX of the systems implementing that capability.  

Page 187 / 291 

Data Entry ChannelsCAPEX13.2CAPEX14.93OPEX2.9OPEX9.3Data Space CoreCAPEXOPEXCAPEXOPEXCAPEX24.96CAPEX12.48OPEX11.5OPEX5.75Funtional Applications (APP Store)CAPEX9CAPEX10OPEX3OPEX156.24Data CatalogueVirtualisation platform Governing direct data sharing & storage18.728.625Data PipeData Streaming & Event ManagementmicroApplication development platform (inc. common apps)App FactorymicroApplication deployment platform2.875Data LabData Projects design & implementaitonApp LabData Projects ExecutionAsynchronous ChannelData PortalMessaging channel governning data exchnagesAccess Portal governing synchronous exchanges Data Factory 
 
 
 
 
 
 
 
 
                                                      
Table 13 - Capabilities considered for Data Space estimations 

5.4 Estimation of data projects and micro-applications costs 

The costs and sizing of data projects and micro-applications were done again based upon the 
EU  customs  reference  architecture.  In  both  cases  (data  and  applications  projects)  it  was 
assumed  that  one  data  project  corresponds  to  5  data  complexity  units  in  the  EU  Customs 
Reference  Architecture  chart  (Figure  25  -  EU  Customs  reference  architecture);  similarly  for 
micro-applications which would correspond to 5 functional complexity units in the chart.  

This would imply a total of 388 data projects and 416 application projects to cover the whole 
customs chart. In general terms this is equivalent to the automation of customs processes and 
functions covered in the Customs Reference Architecture chart. Application projects represent 
the  automation  of  the  processes  and  user  interactions  while  the  data  projects  represent  the 
automation of data processing.    

The  profiles  and  man-days  of  each  profile  for  the  implementation  of  a  data  project  and  a   
micro-application were estimated as follows. 

Table 14 - Person-days estimations for project and applications implementation 

The average values were used for  all calculations.  It  is  assumed that  the same type of team 
will  cover  the  project  maintenance  (introduced  as  OPEX)  at  a  ratio  of  yearly  effort  of  15% 
from the implementation effort.  

Page 188 / 291 

Reference CostsCAPEXOPEXCAPABILITYPortionSTI+TAPAS6.61.45CAPEXOPEX13.22.9Asynch Channel22-EUCTP1.4930.9314.939.3Data Portal1010-SSA31.25.7518.728.625Data catalogue250.36.242.875Data Pipe250.124.9611.5Data Lab250.412.485.75Data Factory250.2Extrapolation FactorminmaxminmaxminmaxminmaxminmaxBusines Analyst51051027510510Data Analyst102051051010201030Data Scientist5105105105102030Data Engineer102010205101020510Total Man Days30602550173730604080Average Man DaysData Processing37.5274560Data Sources45MAN Days for Data Project Implementation  within 1 yearROLESData Model / OutcomeData ServicesData StreamingminmaxminmaxminmaxminmaxminmaxBusines Analyst5105105102525UI Specialist13102051551013IT Analyst/Developer51052010202060515Operations Expert21051025510515Infra Expert51025251020510Total Man Days184327652455421051848Average Man Days30.546IT Implementation39.573.5ROLESMAN Days for Project Implementation within 1 yearData SourcesUser Interface FunctionsDeploy & Operate33 
 
 
 
 
 
 
 
Annex 8 - Introducing an EU Customs Authority  

1.  WHY A NEW EU CUSTOMS AUTHORITY? 

A new EU Customs Authority would: 

  Strengthen the uniform implementation of customs legislation, to create a level playing 
field  and  protect  the  EU  economy  and  revenues,  legitimate  trade,  the  single  market, 
citizens and the planet. 

  Empower  customs  to  enforce  an  increasing  number  of  provisions  for  health,  safety, 
climate and other standards, and in the context of an increasing atomisation of trading 
in small consignments. 

  Coordinate and supervise operational cooperation to increase efficiency and delivery of 

results. 

  Pool  and provide technical  expertise  and data analysis to  national  customs  with  clear 

risk signals. 

  Facilitate  decision-making  on  political  priorities  at  Union  level  based  on  sound 

knowledge of and data on the customs union. 

In the current situation, there are: 

  Areas  at  Commission  level  of recurrent,  technical  and operational  nature for which it 
has  neither  the  mandate  nor  the  critical  mass  necessary  to  arrange  delivery  of  the 
customs  union  contribution  and  resolve  the  divergence  and  fragmentation  in 
implementation on the ground,  

  Areas  at  national  customs  administration  level,  which  would  benefit  from  pooling 

expertise and resources,  

  New areas that currently lack central operational support. 

2.  ROLE  AND  TASKS  OF  THE  COMMISSION  IN  RELATION  TO  AN  EU  CUSTOMS 

AUTHORITY 

In the customs domain, which is an exclusive competence, the Treaties already equip the EU 
(i.e.  the  Council,  the  European  Parliament  and  the  Commission),  with  sufficient  regulatory 
powers to establish the legal framework. The Commission would keep the powers conferred 
to  it  by  the  Treaties,  retaining  its  current  power  of  initiative  (to  propose  legislation)  and  its 
role in monitoring its effective implementation (leading to potential infringement procedures).  

The implementation would have to be carried out by the Authority on the one hand and the 
Member States customs authorities on the other hand. So far, such tasks are shared between 
the  Commission  (which  contributes  in  some  areas  to  implementation  and  provides  a  very 
detailed level of guidance and practical actions aimed at a common understanding, also using 
the  Customs  programme  and  the  Customs  Control  Equipment  Instrument)  and  the  Member 
States (which implement the legislation and its guidance).  

Page 189 / 291 

 
 
With  the  setting-up  of  an  Authority,  the  Commission  could  concentrate  on  its  core  tasks, 
which  is  to  design  the  law  and  policy  and  ensure  its  implementation  as  guardian  of  the 
Treaties.   

More particularly, the Commission would ensure the following tasks:  

a)  Strategy/Policy/Legislation. It would entail the following activities:  

  Prepare,  propose  and  table  legal  acts  for  customs  legislation  –  currently  the  Union 
Customs  Code  and  its  subsequent  modifications  as  well  as  implementing  and 
delegated acts. 

 

Identify on a yearly basis the strategic orientation of the customs policy. Such a task 
could be made in collaboration with the Member States at high level.  

  Follow closely the establishment of the annual and multiannual work programmes of 

the Authority and provide formal opinions on them.  

  Monitor  on  a  yearly  basis  the  work  done  by  the  Authority.  The  Commission  could 
participate to monitoring activities performed by the Authority in the Member States. 
In any case, the Court of Auditors would have the competence to audit Member States 
customs authorities, as well as the Authority.  

  Prepare  and  table  the  annual/multiannual  work  programmes  of  the  financing 
programmes under the MFF (CCEI, Customs and Fiscalis, this latter for excise duties 
and VAT aspects) and control their implementation by the Authority.  

  Conduct infringement procedures. 

  Ensure the overall communication about the customs union. 

  Ensure the continuity of the process by preparing the MFFs. 

b)  Own  resources:  the  Commission  would  follow  up  on  the  collection  of  traditional  own 
resources and would also keep the possibility of doing budgetary missions in the Member 
States as well as keeping its anti-fraud investigations powers. 

c)  Prohibitions  and  restrictions:  the  Commission  would  ensure  that  collaboration  with 
Market  Surveillance  Authorities  is  set  up  in  particular  at  the  stage  of  preparation  of 
legislation implying action and supervision by customs authorities. 

d)  Security  and  safety:  the  Commission  would  ensure  that  its  services  work  towards  an 
effective collaboration between customs and other areas of law enforcement. The Agency 
should then include EU Law Enforcement Agencies, such as Frontex and Europol, in the 
cooperation framework it should set up and maintain with other authorities. 

e)  International relations: the Commission would remain, as per today, in charge of: 

 

 

 

the  negotiation  and  the  implementation  of  the  customs  aspects  of  the  Free  Trade 
Agreements  

the negotiation and the implementation of partnership agreements  

the preparation of common positions for negotiations of international agreements and 
in international organizations 

  overall, political and policy discussions with the customs authorities of third countries.  

Page 190 / 291 

 
 
3.  DIFFERENT POSSIBLE ROLES FOR THE EUROPEAN CUSTOMS AUTHORITY 

Options  2  and  4  include  the  creation  of  an EU  Customs  Authority.  In  both  options,  the 
Authority would be an  agency, involve Member  States, and the implementation  of the  non-
financial policy priorities for customs supervision and risk management would be done by the 
Authority and Member States.  

The Authority would perform tasks related to coordination and capacity building (see 4.2) and 
the  management  of  community  programmes  (see  4.3)  in  both  options.  However  the  role  of 
the Authority is different in options 2 and 4 regarding the data management approach 
and, building on that, how the Authority would fulfil its role in EU data analytics risk and 
crisis management: 

  In  option  2,  the  current  decentralized  digitalisation  model  would  be  continued.  The 
Authority  would  maintain,  and  upgrade  the  current  common  components  of  the 
current  IT  architecture  and  legacy.  Member  States  would  continue  to  implement  the 
national  components  and  to  run  the  current  IT  systems.  In  parallel,  they  would  also 
move  towards  a  data-centred  approach,  by  implementing  national  Data  Space 
solutions.  The  Authority  would  get  (ex-post)  access  to  national  data  for  risk 
management  purposes.  This  additional  EU layer  of  risk  analysis  would  reinforce  the 
coordinated action and would help streamlining the approach of Member States in the 
areas  of  risk  management  and  controls.  The  main,  real-time  risk  analysis  would 
however  continue  to  be  carried  out  by  Member  States  in  national  IT  environments. 
The European Customs Authority would use the improved access to data at EU level 
to prepare the ground for the Commission to propose priorities. 

  In option 4, the national IT environments are replaced by an EU common dataspace. 
This  allows  the  Authority  to,  in  addition  to  the  coordination  and  capacity  building 
activities,  performs  operational  activities  consisting  in  developing  and  managing  the 
central  Data  Space,  exploiting  and  analyzing  the  data,  and  performing  real-time  risk 
analysis  in  support  of  Member  States.  The  centralization  of  the  data  at  EU  level 
enables  the  Authority  to  optimally  exploit  them  to  prepare  trends  assessments  and 
prepare the ground for the Commission’s proposal on priorities for risk management. 

4.  THE TASKS OF THE AUTHORITY  

4.1 Digitalisation, Risk and Crisis management 

Digitalisation 

Under option 4, the Authority would be in charge of developing and managing the central EU 
customs Data Space as described in Annex 7. More precisely: 

  Direct  developments,  management  and  maintenance  would  be  managed  by  the 
Authority,  (supported  by  procurement  of  required  framework  contracts),  including 
data  projects  and  applications  development,  data  management  capabilities  and 
business  support  services,  according  to  and  in  alignment  with  the  policy  definition, 
business  needs  and  operational  decisions.  This  would  include  providing  design, 
development  and  maintenance  of  data  services  and  processes,  algorithms,  user 
interfaces,  system  interfaces,  workflow  capabilities,  inter  alia.  This  activity  further 

Page 191 / 291 

 
 
 
includes  architecture,  programme  and  project  management,  business  support  and 
governance coordination including the data governance.  

 

In particular, the Authority would manage the systems implementing the single entry 
point and the related data and applications projects.  

  These  technical  activities  and  the  associated  funds,  likely  provided  by  a  future 
Customs  programme,  would  be  delegated  to  the  Authority  by  the  Commission  via  a 
contribution agreement. 

The  existing  Member  States  applications  would  be  gradually  integrated  to  be  eventually 
included in the proposed Data Space approach. The model would entail a severe reduction of 
Member States activities and budget while there would be a smaller increase of central costs 
managed  by  the  Authority.  A  residual  number  of  activities  at  Member  States  can  still  take 
place which are estimated to be no larger than 10% of today’s needs. 

Under  Option  2,  the  current  decentralized  digitalisation  model  would  be  continued.  The 
Authority  would  maintain,  and  upgrade  the  current  common  components  of  the  current  IT 
architecture  and  legacy.  Member  States  would  continue  to  implement  the  national 
components  and  to  run the  current  IT systems.  In parallel,  they would also  move towards a 
data-centred approach, by implementing national Data Space solutions. 

Timing 

Option 4: 

The  existing  TAXUD  applications  and  support  would  be  handed  over  to  the  Authority. 
During a migration period of about 12 years from the entry into force of the new regulation, 
the existing IT architecture and legacy would be operated, while the EU Data Space would be 
implemented in parallel.  

The end-goal would allow for the phasing out of the IT systems, i.e. after a maximum of 12 
years,  after  which  customs  processes  would  be  run  based  on  data  management  via  the 
portal/platform rather than based on multiple parallel IT systems. During the 12 years period 
of transformation, Member States would operate the national IT Systems not yet transitioned 
to the Data Space. 

Related necessary procurement activities to support the development of the Data Space should 
start as soon as the Authority is established and staffed. IT procurement processes are likely to 
take 1 to 2 years. 

Option 2: 

The existing TAXUD applications and support would be handed over to the  Authority. This 
should be done gradually over approximately 2 years. 

Resources 

Option 4: 

Compared to  the baseline scenario, the Authority under option 4 would manage  the setting-
up, the functioning and the maintenance of the EU Data Space. This would be achieved partly 

Page 192 / 291 

 
 
 
with in-house resources and partly by relying on outsourcing work to contractors, in various 
framework and specific contracts. The focus would be on the tasks related to data projects and 
data  management.  A  significant  part  of  the  work  would  constitute  in  contract  management 
tasks (procurement, administration, technical follow-up). An overview of staff per option is in 
Annex 9.3.  

Risk management 

Non-financial  policy  priorities  for  customs  supervision  and  risk  management  would  be 
introduced.  The Authority’s involvement in the prioritization exercise is threefold: 

  The Authority will conduct trend analysis and assessments feeding into the Commission’ 

proposal for policy priorities for risk management. 

  Afterwards,  the  Authority  will  do  preparatory  work  for  the  implementing  provisions 

(Common Risk Criteria etc.) to be adopted through comitology.  

  Finally it would have responsibility for implementation of the risk management priorities 
and  implementing  provisions  (CRCs)  into  operational  risk  profiles,  risk  signals,  etc., 
either in a coordinating (Option 2) or day-to-day operational capacity (Option 4). 

For this particular aspect of risk management, there is a crucial difference between option 2 
and option 4, determined by the policy choice on Data management (see 3. Different possible 
roles for the European Customs Authority) 

Effective real-time EU risk management can only be achieved with the introduction of an EU 
Customs  Data  Space  that  can  provide  the  information  necessary  for  the  Authority’s  risk 
management  on  a  constant  basis.  Such  effective  real-time  capabilities  with  a  Data  Space 
would  also  have  beneficial  consequences  for  the  cooperation  framework  with  the  non-
customs authorities for fiscal and non-fiscal risks.  

This Data Space is not envisaged under Option 2. In Option 2, the authority will only get (ex-
post) access to national data for risk management purposes. This additional EU layer of risk 
analysis would reinforce the coordinated action and would help streamlining the approach of 
Member  States  in  the  areas  of  risk  management  and  controls.  The  main,  real-time  risk 
analysis  would  however  continue  to  be  carried  out  by  Member  States  in  national  IT 
environments.  

In  Option  4,  both  the  Authority  and  national  Customs  administrations  would  apply  the 
operational risk management tools in real-time in the EU Customs Data Space.  Under Option 
4, the Authority will be responsible for preparing the integration/linking of all available data 
on each transaction/consignment entering/leaving the Union with all relevant information for 
risk assessment. This entails the full overview and traceability of all consignments entering or 
leaving the Union customs territory.  

This section may be read in conjunction with sections 4-6 of Annex 9 which provide a more 
detailed, practical illustration of how Options 2 and 4 would be expected to perform. 

Options 2 and 4 – Risk management co-ordination 

The Authority would: 

  Develop common methodologies for assessing risks to support national risk management. 

Page 193 / 291 

 
 
  Provide draft regulatory technical standards on common risk criteria and priority control 
areas; identify priority control areas and recommend customs authorities to perform more 
intense controls for a specific period; the priority risk areas would include both financial 
and non-financial aspects as well as security risks.  

  Analyse data (ex-post) on all EU and national/local risk profiles and the associated control 

results to ensure a comprehensive overview on all risk information available.  

 

Issue  manuals  on  harmonized  standards  of  inspections  and  develop  guidance  material 
reflecting best practice in relation to customs controls; elaborate operational risk indicator 
materials to support the national implementation of the criteria. 

  Perform  research  and  innovation  activities  (new  technologies  etc.)  in  the  areas  of  data 

analytics and risk management. 

  Liaise  with  other  EU  agencies/law  enforcement  authorities  for  intelligence  and 
information sharing which would contribute to tackling supply chain risk enforced by the 
various  authorities  involved.  It  would  set  up  operational  cooperation  with  the  other  EU 
agencies  with  a  view  to  efficiently  address  emerging  and  identified  risks,  improve  risk 
profiling  and  carry  out  joint  audits/control  actions  (with  Europol,  Frontex,  inter  alia). 
Cooperation  with  other  non-customs  authorities  could  also  serve  the  Authority  to  create 
new EU level risk signals, e.g. based on chemicals assessments developed by ECHA. The 
Authority  would  be  in  charge  of  managing  the  non-financial  risks  (cf.  Annex  6  of  this 
Impact  Assessment)  and  therefore  strengthen  the  overall  risk  analysis  capabilities  by 
translating the complexity of prohibitions and restrictions into operational risk signals. 

Option 4: Real-time risk operational management 

The Authority would: 

  Organise  joint  analytical  projects  involving  both  customs  and  partner  authorities,  to 
bring  together  sectoral  knowledge  (in  for  example,  market  surveillance  or  security 
domains)  and  use  the  EU  Customs  Data  Space  to  analyse  EU  imports  (including  e-
commerce  flows)  to  identify  good  and  bad  supply  chains.  The  analysis  would 
systematically include data from all customs processes, risk information, risk analysis and 
control results.  

  Directly design, test and implement  operational indicators to be used on EU-level data 
flows, including for the implementation of EU common risk criteria and common priority 
control  areas.  It  would  where  appropriate create risk profiles ( (158)); issue risk warnings 
and  control  recommendations  to  the  Member  States.  It  would  arrange  signals  to  be 
available  at  the  right  time  for  action  (including  if  necessary  before  loading,  potentially 
saving transport and control efforts) and also for a more systematic, consistent EU-wide 
intervention across supply chains. With the richer operational data picture in this option, 
which  it  manages  at  EU  level,  the  Authority  would  be  able  to  significantly  improve  the 
discovery of bad supply chains. 

  Take  a  continuous  improvement  approach  to  indicators,  working  with  Member  States 
and  partner  authorities  to  understand  which  indicators  are  working  well,  less  well,  and 
why.  It  would  take  adapt  them  immediately  to  new  trends  or  modus  operandi.  It  would 

(158) The  expression  ‘risk  profiles’  is  used  in  this  case  to  refer  to  the  range  of  indicators,  profiles  and  other 
algorithms created using modern analytics methods for application on the common flow of data to identify 
potentially risky movements or supply chains. 

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also  be  able  to  prepare  deeper  EU  risk  indicators  to  better  detect  non-compliant  or 
dangerous supply chains.  

 

In  the  case  of  an  urgent  priority  targeting  operation,  the  Authority  would  arrange  for 
immediate deployment of customs targeting, pan-EU, and rapid delivery of sample cases 
for  enforcement  (indicator  would  be  prepared  in  hours  or  days  rather  than  months  or 
years). 

  Directly  arrange  the  integration  of  valuable  new  data  sources.  In  particular,  as  e-
commerce platform information would be available in the dataspace, the Authority would 
systematically integrate it at consignment level and operator (importer) account level.  

Timing 

The Authority could start its risk management activities upon its creation.  

Option 4 

In  Option  4,  it  would  increase  in  speed  and  efficiency  alongside  the  development  of  the 
Customs  Data  Space  estimated  to  be  fully  in  place  12  years  after  adoption  if  this  option  is 
retained. 

Resources 

It is estimated that: 

 

in  option  4,  risk  management  will  be  performed  in  the  Authority  by  an  increased 
number of FTEs (50), as compared to the baseline. The risk analysts will work initially 
on  national  data  shared  by  the  Member  States  customs,  and  later  directly  on  the 
information from the EU Customs Data Space. This will necessarily improve the risk 
management.  The  costs  of  increasing  the  staff  would  be  partially  mitigated  by  the 
transfer of some FTEs from COM, while a small number of staff members will remain 
at  the  Commission  in  order  to  maintain  in-house  expertise  to  follow  the  Authority’s 
work and to ensure the preparation of political priority setting. These options will also 
entail a decrease of staff needed at Member States level, as an important proportion of 
risk  management  work  would  be  carried  out  for  common  benefit  at  Authority  level, 
reducing  duplication  of  national  efforts  on  (e.g.)  establishing  and  deploying  risk 
profiles across EU data flows. 

 

In option 2, most resources dealing with risk management will be transferred from the 
Commission  to  the  Authority.  However,  without  a  Data  Space,  the  ambition  and 
capacities in this area would not be significantly higher than in the baseline, and the 
human resources allocated to this area would increase only slightly.)  

Crisis management 

  The Commission would, through comitology, adopt the implementing provisions defining 
the  criteria  for  considering  that  a  crisis  exists  and  the  procedures  and  protocols  to  be 
applied.  The  legislation  would  define  the  criteria  for  activating  the  ‘crisis  management 
mode’, including an empowerment for the Commission to adopt an implementing decision 
that  would  define  the  framework  applicable  in  case  of  crisis  (derogations,  exceptions, 
conditions) and empower the Authority to act in  coordination with  the national  customs 
authorities. 

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  The Authority would: 

  analyse and understand potential crisis scenarios and impacts on an ongoing basis. It 
would  prepare  for  effective  and  efficient  protection  against  any  specific  threat, 
including:  

  Mitigation of threat as such (speed, precision, comprehensiveness). 

  Supply chain resilience (e.g. avoiding panic shutdowns of transport infrastructure 

and flows, where it is possible to better target and filter the risk factors). 

  Collection  and  evaluation  of  all  relevant  information  and  identification  of  the 
options  available  to  prevent,  eliminate  or  reduce  the  risk  as  rapidly  as  possible 
and  make  a  proposal  to  the  Commission,  for  the  Commission  to  take  the  final 
decision. 

  define the procedures and protocols to be applied when a crisis occurs,  whatever its 
nature  is  (inter  alia  sanitary,  terrorist,  climatic,  political,  war),  within  the  said 
framework,  in  cooperation  with  Member  States,  traders  and  other  involved 
authorities; 

 

trigger,  organize  and  supervise  the  implementation  of  the  protocols  and  procedures, 
when  such  crises  occur.  It  would  receive  the  results  of  the  activation  of  these 
protocols  and  procedures  applied  by  customs  authorities.  For  example,  customs 
officials from one Member State could be sent to another one for helping in a specific 
situation and for a given time span; 

  manage the relevant systems; 

  monitor  the  application  of  relevant  measures,  analyze  the  responses  of  national 
customs and economic operators, ensure the follow up, and report to the Commission 
for further action at policy/political level. 

Under Option 4, the Authority would in addition: 

  Directly  implement  customs  crisis  risk  analytics  on  the  operational  supply  chain  data 
flows using the tools in the Data Space, based on the pre-defined protocols and based on 
close co-operation with Member States and other relevant authorities; the Authority would 
co-ordinate  the  operational  targeting  effort  to  ensure  that  crisis-relevant  information  is 
collected  and  deployed  immediately  and  consistently  in  EU-wide  trade  filtering 
(identifying high-risk consignments for possible intervention while helping to ensure that 
low-risk traffic can continue to flow); 

  Directly monitor and adapt operational targeting as the situation develops, on a 24/7/365 

basis, and host on-site multidisciplinary teams where necessary in the crisis context 

  Use the Data Space to prepare and test crisis response routines with partner authorities in  
high-priority domains (notably aviation and other transport security and health events) 

Timing  

The elaboration of protocols  and procedures could start  as  soon as  the  Authority is  formed. 
Before that time, the current crisis management system could be continued. 

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Resources 

In  the  baseline  scenario,  crisis  management  is  done  by  the  Commission,  by  temporarily 
freeing resources usually assigned to other tasks. A team could do this in a more structured 
way in an Authority.  

Under options 2 and 4, the Authority would devote part of its staff to the crisis management 
cell in order to fulfill the above-mentioned tasks. If appropriate staff is provided to serve for 
24/7/365 risk management support, part of it could be diverted to crisis mode on demand. 

4.2 Coordination and capacity building tasks 

This heading presents a series of tasks that  an Authority would perform under the preferred 
option 4 but also under option 2. 

Performance measurement 

The  Authority  will  carry  out  the  measurement  and  follow-up  of  the  customs  union’s 
performance (including Member States customs authorities and BCPs). It would build on the 
work done today in the Commission but would leverage additional strategic and operational 
information.  

The performance measurement system would rely on the collection of data from the Member 
States  (and  other  sources)  on  a  compulsory  and  predefined  basis.  The  results  of  the 
performance  measurement  exercise  will  be  presented  to  the  Member  States  and  the 
Commission. This should allow the Commission to take informed policy decisions on which 
domains  or  sectors  would  require  more  attention  (virtuous  circle)  and  enable  the  Authority 
and Member States to identify in which areas operational follow-up is needed. For the latter, 
the Authority  could  set  up  a dedicated performance  review of  (a) specific Member State(s), 
for example under a business review process. 

The Authority would also conduct statistical analysis for different purposes. 

Under  Option  4,  the  Authority  would  in  addition  use  the  Data  Space  for  the  systematic, 
granular  evaluation  of  policy  delivery  for  customs  risk  management  operations,  for  the 
implementation  of  customs  processes  including  Trust  and  Check  and  for  the  collection  of 
customs  revenues.  The  Agency  would  use  the  Data  Space  to  prepare  relevant  statistical, 
strategic and operational evaluation information for stakeholders on a pan-EU basis, including 
for a Customs Union contribution to sectoral strategies and threat assessments. 

Timing 

This activity should take place as of the setting up of the Authority.  It would logically see an 
enhancement  if  and  when  the  envisaged  Data  Space  would  become  operational.  Before  the 
creation of the Authority, the Commission could continue its current activities in this field. 

Resources 

The  Commission  allocates  few  resources  today  to  measure  customs  performance  based  on 
data voluntarily provided by the Member States.  

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Making  it  compulsory  and  ensuring  consistent  measurement  in  all  the  Member  States  and 
border crossing points (BCPs), the Authority would take over some of these resources. A few 
resources should however remain at the Commission to assess the performance measurement 
results and to take informed policy decisions based on the results. 

Cooperation with other authorities and law enforcement bodies 

The  Authority  should  cooperate  on  the  ground  with  other  authorities  and  law 
enforcement  bodies  such  as  Europol,  Frontex,  the  EPPO,  Tax  authorities,  Market 
Surveillance  Authorities,  customs  authorities  and  law  enforcement  bodies  of  third  countries 
with a view to performing joint audits, joint operations and investigations, joint training, and 
for the sharing of equipment. To support sectoral EU policies, the Authority should cooperate 
with  other  competent  authorities  and  with  other  EU  agencies  (e.g.,  ECHA),  for  example  to 
translate  a  new  chemicals  priority  list  developed  by  ECHA  into  customs  operational  risk 
signals,  in  a  structured  way.  It  would  act  as  an  interlocutor  facilitating  dialogue  and 
operational  cooperation  with  these  bodies  and  could  pool  expertise  to  enable  more  efficient 
and effective customs supervision and risk management for financial and non-financial risks. 

The Authority could support work on international cooperation, helping neighboring countries 
to  adopt  EU  acquis,  share  expertise  and  facilitate  a  structural  exchange  of  information  with 
selected trading partners, within the framework created by the co-legislators. 

Timing 

This activity should take place as of the setting up of the Authority.  

Resources 

In the baseline scenario, this activity is performed only to a limited extent. Resources at the 
Authority should be sensibly increased in comparison. 

Training and human capacity framework 

The Authority would be in charge of defining the content of the training and the human 
capacity framework for both the customs officials of the MS and for the trade. For that, 
the Authority should use, update, complete and maintain the existing tools already developed 
by  the  Commission  and  some  Member  States  and  define  a  common  core  of  training  to  be 
translated into all EU languages; it would also imply a common basic training in English.  

It would imply a large work of compiling and defining the content of an ideal training upon 
recruitment and professional training over the career. This is important not only to attract and 
keep talented staff and to raise the level of knowledge of customs officials to the highest and 
most  harmonized  level,  but  also  to  adequately  train  traders  often  in  charge  of  complex 
procedures  without  knowing  the  basics  of  a  complex  customs  legislation.  To  this  end, 
partnership with the academic world would be useful. (159) 

In  particular,  the  Commission  already  developed  and  implemented,  on  a  voluntary  basis,  in 
some Member States: 

(159)  

To  be  noted  that  some  Universities  are  now  launching  the  concept  of  a  European  Training  Law 
Academy  by  putting  together  the  programmes  of  series  of  universities  across  the  EU  for  giving  adequate 
training to customs brokers and trade. 

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  The Human Competency Framework for customs officials 

  The Human Competency Framework for trade 

  E-learnings on UCC and IT systems 

  E-books 

  CLEP: Common Learning Education Programme and Centres of excellences (e.g. PL 

for Xray training, SK and CZ for dogs, FI for car search and others to come). 

  EU recognition system for universities, giving them an EU label if the content of their 
training  is  sufficiently  compliant  with  the  EU  customs  law.  Launched  in  2018  in  a 
pilot mode, it allowed so far a number of universities to obtain it. 

Some  Member  States  have  very  detailed  training  programmes,  for  example  in  specialized 
customs schools or university programmes, which  should also  be compiled and used by the 
Authority for defining the common programme. 

The content of the common programme would be prepared by the Authority. When ready and 
in  order  to  make  it  compulsory,  it  would  have  to  be  adopted  by  the  Commission.  It  would 
then be implemented by Member States in their own language(s) and organisations (national 
schools  or  universities  or  other).  The  Authority  would  monitor  the  implementation  of  the 
common  programme.  The  same  approach  would  be  followed  for  the  Human  Competency 
Framework. 

The  Authority  would  maintain  and  further  develop  e-learnings  and  e-books  and  maintain  a 
platform  on  which  these  e-tools  could  be  retrieved  and  completed  over  time.  An  existing 
platform, the Customs and Tax EU Learning portal, could be considered. It could be divided 
in 2 different platforms, one for Customs and another for Taxation. 

A  common  network  of  international  trainers  could  organize  trainings  for  other  Member 
States,  using  the  CLEP  programme.  To  allow  pooling  of  expertise,  the  Authority  could 
consider putting in place and monitor centres of expertise for training, that would be located 
and  operated  in  a  Member  State  but  would  be  accessible  by  officials  of  fall  EU  customs 
administrations. 

Timing 

Such activities could be transferred to the Authority as soon as it is created. 

Resources 

In the baseline scenario the Commission allocates limited resources to the customs voluntary 
training  programme.  A  more  comprehensive  activity  coordinating  training  and  ensuring 
similar implementation in all the Member States, could be implemented in the Authority with 
slightly more resources. 

Monitoring of Customs authorities and BCPs 

The  Authority  should  proceed  to  monitoring  Member  States  customs  authorities  and 
BCPs.  The  monitoring  started  in  1994  by  the  Commission  accompanied  by  several  MS  to 
share best practices, check whether the implementation of the legislation presented issues and 
help  for  finding  solutions.  But  it  became  very  limited  over  time  and  almost  stopped  in  the 

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2010s,  due  to  lack  of  time/resources.  Monitoring  should  resume  and  would  allow  Member 
States  and  Border  Crossing  Points  diagnostic  (based  the  pilot  project  under  CELBET) 
allowing a close knowledge of their situation and sharing of information/best practices.  

It  should  be  done  by  the  Authority  together  with  Member  States  (peer  reviews).  Reports 
should  be  compiled  by  the  Authority,  communicated  to  the  Commission  and  to  the 
department managing data. All Member States and Border Crossing Points should be visited 
and checked regularly  against a blueprint measuring their capacity building and formulating 
recommendations. 

In agreement with the Commission, the Authority would define the methodology to apply and 
the areas to cover. 

Timing 

This activity should take place as of the setting up of the Authority. 

Resources 

In the baseline scenario, this activity is not performed.  

Joint controls and operations 

The  Authority  could,  sometimes  in  cooperation  with  other  authorities/agencies,  coordinate, 
plan,  support  and  evaluate  joint  controls  and  operations  to  address  a  specific  risk  for  a 
short,  dedicated  time  period  and  manage  the  necessary  links  and  coordination  with  relevant 
anti-fraud  activities  and  customs  investigations.  The  joint  controls  and  operations  would  be 
performed by the Member States customs authorities.  

The feedback results should be given to the Authority for its evaluation. The Authority should 
coordinate  the  implementation  of  Priority  Control  Areas  and  maintain  the  overall 
coordination, planning and support for external border risk-based customs controls activities 
among  Member  States  including  participation  in  joint  operations  and  multidisciplinary 
actions.  It  could  align  and  integrate  the  interaction  between  the  risk-based  customs  control 
regime and customs antifraud activities including liaison with OLAF and EPPO as applicable. 

Timing 

The activity can start immediately from the set-up of the Authority. 

Resources 

In the baseline scenario, this activity is not performed, and would thus require new resources 
at the Authority. 

Guidance on processes and working methods 

The  UCC  has  harmonized  the  provisions  in  several  areas  of  customs  legislation.  When  the 
implementation  of  these  rules  raises  questions  by  Member  States  and  trade  representatives, 
the  Commission  drafts  guidance  documents  on  the  interpretation  of  the  legislation, 
solutions to practical problems and manuals.  

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The Commission should keep the competence for drafting interpretative guideline documents 
on customs legislation, in cooperation with the Member States, trade representatives and other 
authorities.  

The  Authority  should  be  in  charge  of  preparing  operational  guidance  or  explanatory 
documents and manuals on the practical application of customs processes and formalities, and 
on the working methods to be used by MS, for example in order to ensure the same approach 
in conducting physical and documentary controls. Such preparation can take place in project 
groups managed by the Authority. The Authority could also develop common standards. 

Timing  

This  activity  could  start  as  part  of  an  embryo  of  the  Authority  that  would  be  located  in  the 
Commission. 

Resources 

Due to the fact that one of the goals of the reform is to make the customs procedures simpler, 
it is estimated that the Authority would require less resources to develop and update guidance 
than currently allocated in the Commission. Furthermore, they would not be dealing with this 
activity on a permanent basis, but project related.  

Some complementary activity in this field, especially when more legislation-related issues are 
concerned, should remain at the Commission. 

In  Member  States,  having  a  central  capability  might  eliminate  the  need  for  most  national 
guidance but the need to translate the documents into all languages would remain. 

Classification, valuation, and origin 

The  Authority  could  proceed  to  the  elaboration  of  common  interpretation  of  classification, 
valuation  and  origin  cases,  thus  taking  the  role  initiated  by  the  Binding  Tariff  Information 
Expert Team, pooling Member States’ expertise to resolve complex cases of divergent tariff 
classification and pursuing the same approach for valuation and origin cases.  

However,  the  Commission  keeps  its  legislative  and  non-legislative  powers  as  per  TFEU:  it 
prepares and adopts the annual updates to the CN regulation and the amendments to the legal 
acts  in  respect  of  valuation  and  origin  issues.  The  Commission  would therefore  continue  to 
adopt  the  implementing  decisions  on  the  tariff  classification  of  goods  and  on  the  origin  of 
specific  goods.  The  Authority  would  prepare  the  ground  for  the  Commission’s  mission. 
Member  States  would  issue  Binding  Origin  Information  (BOI),  Binding  Tariff  Information 
(BTI) and the future Binding Valuation Information (BVI). 

The  Authority  could  play  an  important  role  in  the  monitoring  of  the  issued  decisions,  to 
ensure  no  contradicting  decisions  are  issued  in  different  Member  States.  The  customs 
authorities of Member States are competent to implement these common rules. The Authority 
could  ensure  the  analysis,  monitoring  and  reporting  to  the  Commission  of  BTI,  BOI  and 
future  BVI  decisions,  under  the  supervision  of  the  Commission  who  would  do  the  policy 
analysis of those results.  

The Authority could manage operational activities now carried out by Member States, such as 
administrative cooperation for the verification of preferential origin (digitalisation,  exchange 

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of info, inter alia), also on behalf of Member States. The Authority could update and manage 
the TARIC, REX databases (for REX, including the related administrative cooperation with 
third countries) and the electronic proof of origin (not established yet).  

The  Authority  could  be  competent  for  defining  the  unit  prices  on  perishable  goods  (a 
procedure which the Commission defines every year such prices based on the market prices of 
two reference Member States). The current  procedure is  heavy, its automation difficult,  and 
Member States not always cooperative, while an Authority could have a more efficient role. 

The  Authority  may  also  take  over  the  coordination  of  the  Customs  Laboratories  European 
Network (CLEN), which includes the laboratories providing the scientific expertise needed to 
enforce customs legislation. 

The possibility that the Authority issues these decisions centrally has been discarded because 
of the amount of staff needed to do so. However, under option 6, the Authority would issue 
BOI and BTI decisions (and BVI in the future), which are now issued by the Member States. 
This  would  ensure  full  harmonization  of  these  decisions  across  the  EU,  by  removing  any 
possible divergence in the assessment of the relevant binding information, but would require a 
very  staff-strong  Authority  (see  numbers  of  decisions  below).  If  the  Authority  would  issue 
such  decisions,  it  should  be  decided  which  entity  would  monitor  them  and  to  which  entity 
appeals would be done. 

Timing 

This activity could start as an embryo of the Authority. 

Resources 

Of the resources currently employed in the Commission some should remain for the adoption 
of  the  relevant  implementing  decisions,  while  a  large  part  could  be  transferred  to  the 
Authority.  

Authorisations 

Currently Member States grant all authorizations, while the Commission’s role is to monitor 
the  compliance  of  Member  States  with  EU  law  and  the  IT  management  of  central 
applications.  

The Commission would keep the power to define in legislation the criteria to become trusted 
trader and to monitor the compliance of Member States with EU law.  

The  applications  would  be  addressed  to  Member  States,  but  filed  in  a  central  application 
managed  by  the  Authority.  In  terms  of  support  to  the  Member  States,  the  Authority  would 
manage and centralize the list of Trust and Check scheme applicable to trusted importers and 
exporters in line with the requirements of full commercial transparency.  

The Authority would also manage and centralize the list of the operators that do not comply 
with  the  scheme.  The  delivery  of  this  approach  would  depend  on  the  development  of  the 
relevant  functionalities  in  the  customs  Data  Space,  enabling  the  Authority  and/or  national 
customs to configure the scope of the Trust and Check scheme to financial accounting and to 
certain  pre-defined  routine  controls  for  each  operator  and  to  manage  them  operationally. 
Therefore, such a modification in the approach – if decided – should be developed at the same 

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path  as  the  move  to  a  data  management  of  the  supply  chain.  Possibly  there,  the  Authority 
should have a phase in/phase out role to play.  

In  a  more  advanced  scenario,  other  authorities’  authorizations  could  also  be  centralized  to 
some  extent.  A  first  step  could  be  a  single  economic  operator  account  where  at  least  some 
data  could  be  automatically  reused  during  the  authorization  processes.  The  benefit  for  the 
economic operators is that the same data would be submitted only once. 

Member  States  would  perform  the  audit  of  applicants,  which  can  be  more  or  less  resource-
consuming depending on the final criteria to become trusted trader but would require some IT 
audit and the Authority could support the Member States on that.  

The  Authority  could  coordinate  the  consultation  procedure  among  the  involved  Member 
State.  Member  States  would  prepare  the  final  report  and  adopt  a  decision.  A  possibility  of 
appeal by operators could also be envisaged so that the Authority makes arbitrages in case of 
controversy (not grant/further evidence needed).  

As  to  monitoring  of  authorizations,  Member  State  would  continue  to  perform  the  physical 
checks  on  operators,  but  the  Authority  could  configure  the  scope  of  the  Trust  and  Check 
approach to financial accounting and to certain pre-defined routine controls for each operator.  

Timing 

This  activity implies  that the  Authority has  established its procedures and working methods 
with the Commission and the Member States and most notably its access to the necessary IT 
infrastructure.  

It could start as of the setting-up of the Authority but would take full speed over time. 

Resources 

Only  part  of  this  task  related  to  authorizations  is  carried  out  in  the  baseline.  When  an 
Authority  is  created,  a  few  resources  should  remain  at  the  Commission  for  the  adoption  of 
legal acts, including negotiation of agreements with third countries.  

4.3 Programme management tasks 

This heading presents a series of tasks that  an Authority would perform under the preferred 
option 4 and under option 2. 

Customs Control Equipment Instrument 

The  Commission  could  delegate  the  tasks  to  manage  the  implementation  of  the  Customs 
Control  Equipment  Instrument  to  the  Authority.  Based  on  the  work  programme  adopted  by 
the  Commission  for  customs  control  equipment,  the  Authority  would  be  in  charge  of  the 
needs assessment, the evaluation of the proposals by the Member States, the signature of the 
grant agreements, the guidance and the implementation of joint procurement equipment and 
the verifications of the use of the equipment.  

It  would  also  measure  the  performance  realized  with  the  use  of  the  equipment  that  would 
nourish the collection of data described above. This is in the current settings of the Customs 
Control Equipment Instrument regulation (CCEI).  

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The  preparation,  drafting  and  process  for  adoption  of  the  legislative  basis  and  work 
programmes would remain within the Commission, while their implementation would be the 
responsibility of the Authority.  

The Authority could as well coordinate equipment-related studies to be carried out by other 
economic  operators,  through  the  drafting  of  the  Terms  of  Reference,  desk  research  work, 
evaluating tenders, etc. 

Potential further evolution 

Having legal personality, the Authority could later go one step further and be given the power 
to buy equipment and to ensure that it is used according to the needs in each Border Crossing 
Point (BCP). For identifying such needs, the Authority would have at its disposal information 
on each BCP updated regularly by all information stemming from all sources, and processed 
using artificial intelligence (see above). In such a new setting, the equipment would be really 
common to the Customs Union and could be even shared between BCPs according to needs 
on a temporary basis (e.g. mobile equipment, easy to move).   

The Authority would coordinate the efficient use of the equipment, including support for the 
joint  procurement,  co-sharing  and 
use  of 
interoperability of customs control equipment. 

the  equipment  (training),  maintenance, 

Such an extended role would require additional human resources as considerable coordination 
and logistic efforts would be needed. 

Timing 

The activity could in principle start from the inception of the Authority, but current on-going 
activities should not be disrupted. 

Resources 

The resources currently allocated to this task in the Commission would be transferred to the 
Authority.  

Customs programme 

The  Commission  could  delegate  the  tasks  to  manage  the  implementation  of  the  future 
Customs Programme to the Authority. 

An Authority could work to implement the Regulation, the Multi-annual Work Programmes 
and  policy  directives/guidance  adopted  and  defined  by  the  Commission  for  the  cooperation 
activities, relating to the organisation and management of such activities. It would comprise 
the organisation of meetings and similar events, of project-based structure collaboration, and 
support actions such as studies and any other actions provided for in the work programme and 
necessary for its due implementation. It would also contemplate the monitoring, reporting and 
evaluation of the activities. 

The  Commission  would  remain  responsible  for  the  legal  basis  (Customs  Regulation)  and 
would prepare and adopt the Multiannual Work Programme. The Commission could make the 
selection of studies needed. 

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The Authority would manage the implementation of the Multiannual Work Programmes and 
proceed to the monitoring, reporting and evaluation of the activities. Programmes will usually 
have  the  Responsible  Authorising  Officer  and  Authorising  Officer  by  Sub-Delegation 
responsibilities  also  move  to  the  Authority’s  Head.  On  studies,  the  Authority’s  tasks  could 
include drafting the Terms of Reference, desk research work, evaluating tenders; overall, the 
customs Authority would be responsible for following up on them. 

The Member States would participate to cooperation activities. 

Timing 

The activity could in principle start from the inception of the Authority, but current on-going 
activities should not be disrupted. 

Resources 

The  posts  allocated  to  this  task  in  the  Commission  in  the  baseline  scenario  would  be 
transferred to the Authority. 

5.  OTHER AGENCIES 

In relation to the governance structure aspect in particular, it was considered whether existing 
agencies  such  as  FRONTEX,  EUROPOL,  EU-Lisa  and  CEPOL  could  potentially  host  a 
dedicated department for customs but this has been discarded because none of them covers all 
aspects  that  customs  deal  with  and  distributing  the  customs  elements  in  specialized  EU 
agencies seriously risks further fragmentation in the customs union. 

  FRONTEX.  FRONTEX  operates  at  the  border  and  has  certain  functions  (risk  analysis 
research  and  innovation,  training)  for  which  best  practices  and  information  could  be 
shared  with  customs.  However,  the  integration  of  customs  into  an  existing  agency  with 
different  competences  like  FRONTEX  could  cause  loss  of  customs’  identity  and  make 
customs’  activities  subordinate  to  established  activities  like  border  control,  return 
operations  etc.  Another  big  obstacle  is  the  current  regulatory  framework  of  FRONTEX 
that  does  not  allow  the  Agency  to  'govern'  fiscal  customs  tasks,  such  as  customs  and 
excise  duties.  The  different  legal  basis  in  the  EU  treaties  would  be  a  challenge,  with 
FRONTEX based on the chapter on border checks, asylum and immigration  (TFEU  Art 
77,  79)  and  the  Schengen  acquis;  and  the  Union  Customs  Code  as  area  of  exclusive 
competence  (TFEU  Art  33,  114,  207).  The  feasibility  study  of  CELBET  concluded 
against this option.  

  EUROPOL, the ‘EU Agency for Law Enforcement Cooperation’. Many  Member States 
customs  authorities  already  collaborate  with  and/or  participate  in  EUROPOL  (e.g.  via 
liaison officers). At policy level, the European Union Serious and Organised Crime Threat 
Assessment (EU SOCTA) by Europol with contribution from customs authorities updates 
EU  law  enforcement  community  and  decision-makers  on  developments  in  serious  and 
organised  crime  and  the  threats  it  poses  to  the  EU.  The  EU  SOCTA  is  very  useful  to 
customs too. Providing customs access to EUROPOL data and analysis results (and vice 
versa)  and  ensuring  interoperability  of  IT  systems  is  key  to  efficiently  tackle  organised 
crime  in  areas  of  mutual  concern.  EUROPOL’s  sole  focus  on  enforcement  and  fighting 
organised crime would however make it difficult to reconcile with one of the key elements 
of  the  mission  of  customs  authorities:  finding  the  right  balance  between  facilitating 

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compliant trade and customs controls and enforcement. Europol’s Regulation is based on 
Article 88 TFEU, which limits the cooperation to the prevention and detection of crime. 
By contrast, the fight against crime is only one of the roles of customs authorities and this 
is also recognised in the TFEU, as the legal basis for customs cooperation in general is in 
Article  33  TFEU,  within  the  chapter  on  internal  market,  as  part  of  the  one  of  the 
fundamental  freedoms  in  the  internal  market,  the  free  movement  of  goods.  Creating  a 
customs department in Europol would therefore necessitate a thorough amendment to the 
existing  Europol  Regulation,  which  has  only  recently  been  agreed  and,  which  will 
strengthen  the  capability  of  Europol  to  carry  out  research,  operational  co-operation  and 
analytics  and  should  increase  the  potential  value  added  from  customs-Europol  co-
operation.  

Besides  multidisciplinary  agencies  described  above  specialised  agencies  like  EU-Lisa  and 
CEPOL could also be considered for more EU integration in specific customs domains.  

  EU-Lisa,  the  European  Union  Agency  for  the  Operational  Management  of  Large-
Scale  IT  Systems  in  the  Area  of  Freedom,  Security  and  Justice,  manages  the  large-
scale  IT  systems  that  are  essential  instruments  in  the  implementation  of  the  asylum, 
border management and migration policies of the EU. In this regard, and similarly to 
the case of FRONTEX and EUROPOL, the legal base of EU-Lisa is based on Title V 
of  the  TFEU  and  in  particular  on  the  fact  that  the  Council  can  adopt  measures  to 
ensure  administrative  cooperation  between  the  relevant  departments  of  the  Member 
States as well as between those and the Commission in the areas of freedom, security 
and  justice.  The  customs  union  is  a  different  area  of  competence  and  that  puts  in 
question the legal feasibility of such an option. In addition to this limitation, EU-Lisa 
is exclusively focused on providing IT services and solutions and could thus only host 
the development and operational management of the EU customs Data Space and not 
the  analytical  capabilities  that  would  be  required  at  EU  level  to  improve  the 
performance  of  the  customs  union.  In  this  regard,  an  option  that  disaggregates 
exclusively  the  IT  services  assigning  them  to  a  specialised  IT  agency,  could  be 
questioned  both  from  the  efficiency  and  relevance  perspective  compared  to  two 
alternative  options  that  are  already  considered  and  analysed  in  detail  in  this  impact 
assessment (Option 3 where both the development of the EU customs Data Space and 
the  improved  governance  capabilities  are  located  at  the  Commission  or  Option  4 
assigning them to an agency).  

  CEPOL  (European  Union  Agency  for  law  enforcement  training)  already  provides 
support with customs-related training but could not assume any of the other essential 
tasks.  

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Annex 9 - Assessment of costs and benefits 

1.  INTRODUCTION AND METHODOLOGY 

This  section  evaluates  the  costs  and  benefits  of  each  policy  option,  at  current  prices,  per 
stakeholder group. It supports Sections 6 and 7 of the Impact Assessment as well as Annex 3. 

The affected stakeholder groups are:  

  Public administrations - EU services; 

  Public administrations - Member States customs authorities; 

  Businesses and trade; 

  Citizens and consumers. 

1.1 Approach taken to assessing costs per stakeholder 

As customs processes are data-driven, the main compliance and implementation costs arising 
from the policy Options stem from:  

 

information technology costs to build and run systems; 

  effort or service cost to prepare and exchange information and to handle formalities. 

1.1.1 Public administrations (Member States and EU services)  

The estimation of IT costs is detailed in Annex 7, and the figures are re-used here. 

Other costs are expressed in terms of the change in Full-Time Equivalent (FTE) staff.  

One-off costs relate mainly to training on new processes. These are also covered in the FTE 
numbers.  The  training  functions  would  exist  in  any  event  and  the  portfolio  would  be 
rebalanced from old processes to new processes. The full FTE change is therefore reported in 
the recurrent costs line. No separate one-off costs line is prepared. 

1.1.2 Business and trade  

Specific  cost  information  is  not  systematically  available  for  business  and  trade  compliance. 
Consideration was  given to  surveying  all trade stakeholders to  develop  estimates. However, 
the  representativeness  and  robustness  of  an  industry  survey  on  overall  administrative  costs 
would  be  doubtful  given  the  cost  and  activity  structure  for  customs  processes  in  modern 
supply chains. Some players carry out formalities themselves, some hire intermediaries, some 
pay ‘all-in’ cargo or goods prices and do not have transparency on customs specific costs.  

For  these  reasons,  the  approach  taken  to  estimating  costs  focused  on  extrapolation  from 
existing aggregate estimates for customs administrative costs as described in section 3.3. For 
avoidance of confusion, this assessment addresses ongoing administrative costs (which might 

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be referred to by trade as “compliance costs”). It does not address one-off adjustment costs, 
which primarily relate to IT adaptation and training. As explained in the text, these would be 
more than compensated by reductions in the cost structure for both IT (single interface instead 
of 27) and training (the adaptation is to simpler, more uniform customs processes). 

1.1.3 Citizens and consumers 

With the advent of online business-to-consumer sales in particular, citizens and consumers 
are  also  increasingly  participating  in  the  customs  processes  which  are  in  the  scope  of  the 
reform  through  their  time,  and  through  non-regulatory  charges  which  they  pay  to 
intermediaries. Since 1 July 2021 in particular, consumers have been confronted with the high 
fees  that  (notably)  postal  operators  in  some  cases  charge  for  completing  the  customs 
formalities  on  those  goods  at  the  moment  of  delivery.  These  formalities  are  completed  as  a 
result  of  the  removal  of  the  VAT  threshold,  because  the  customs  processes  serve  to  check 
whether VAT was charged at the moment of sale or needs to be collected upon arrival of the 
goods, even if there is no customs duty. These fees are very often not known by consumers 
when buying goods online from third countries, and may be as high as EUR 35. They are not 
regulatory charges. 

A robust quantification of the baseline is not possible in this domain as the commercial charge 
data  is  not  published.  Nonetheless,  in  all  of  the  options  assessed,  all  changes  brought  to 
existing  customs  formalities  in  the  options  simplify  the  processes  and  reduce  supply  chain 
costs. Consequently no specific cost estimate is prepared for citizens and consumers.  This is 
further explained in section 3.4. 

1.2 Approach taken to assessing benefits  

The benefits of each policy option will differ in terms of:  

  effective and efficient delivery of the General and Specific Objectives as such  

 

the outcomes enabled in terms of  

  better collection of revenue; 

  better  protection  for  EU  citizens  and  businesses  envisaged  by  EU  policies  which 
depend  to  an  extent  on  customs  enforcement  work,  including  prohibitions  and 
restrictions, the Single Market and security; 

  reduction in administrative burden; and  

  overall  policy  coherence  and  strategic  capability  (including  adaptability  and  time  to 

market). 

A  qualitative  assessment  is  made  on  the  efficiency  and  effectiveness  of  each  option  for  the 
general and specific objectives. The evidence gathered for the outcomes enabled – both the 
quantitative data and the more practical illustration of the key enabling factors in each option 
- is helpful in that context.  

As regards better collection outcomes, a dedicated section 4.2 in this Annex shows how each 
option  would  improve  the  situation  compared  to  the  baseline.  This  concerns  both  the 
improvement  in  the  prevention  of  revenue  loss  (assessed  qualitatively),  and  the  specific 
revenue collection arising from the removal of the €150 customs duty threshold.  

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For  better  protection,  a  small  representative  sample  of  use  cases  is  used  to  evaluate  how 
each reform option would perform. This does not fully quantify the benefits, but is sufficient 
for comparison of the options. The cases in section 5 focus on the customs role in enforcing 
important EU policies applied to and through trade in goods, under a heading ‘Single Market 
and  Sustainability’.  The  cases  in  section  6  look  at  how  customs  tackles  the  exploitation  of 
supply  chains  by  organised  crime  and  terrorism  under  the  heading  ‘Security’.  Quantitative 
scenarios are prepared where the available data, including data from domain-specific impact 
assessments, allows an estimate to be made of the degree to which the harm countered by the 
policy in question relates to imports.  

The  impact  of  savings  from  reform  of  customs  processes  is  addressed  in  section  3.3.  The 
savings come primarily from simplification of processes. Further savings would arise from a 
reduction in the time taken for customs to process consignments for release, or in a reduction 
of unnecessary controls  due to better targeting; however these are not quantified because as 
things  stand,  the  vast  majority  of  goods  are  released  very  quickly.  95.7%  of  import 
declarations  are  cleared  within  one  hour  under  the  standard  procedure  (see:  Customs  are 
business friendly (europa.eu).  The procedural reforms themselves are described in Annex 5. 

For policy coherence, a qualitative assessment is made of how the options are coherent with 
other EU policy objectives as relevant. The case studies in sections 5 and 6 in particular look 
directly at the role of the reform in supporting other EU policies.  

For overall strategic capability, a qualitative assessment is made on how the reform would 
enable the Customs Union to be managed ‘as one’ as a strategic policy capability. This gives 
a  single  overall  rating,  taking  account  of  how  each  option  improves  on  the  baseline,  on  the 
following key dimensions: 

  capability to prepare and deliver a co-operation framework with other policies to support 

their delivery in border operations; 

  capability to make strategic plans for priorities and organise their delivery ‘as one’; 

  capability to see the EU-wide trade flows (visibility) in operational detail; 

  capability to see EU-wide policy performance and have a granular view on how controls 

and simplifications are being applied); 

  capability to adapt to future needs and changing business models (notably, the readiness 
of the customs union information environment to integrate different information sources, 
and support flexible action against risks; time to market); 

  critical mass - to handle many priorities in parallel and prepare for crisis.  

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2.  TIMING ASSUMPTIONS  

2.1 Assumptions for the phased deployment of the reform 

The timing for deployment of the elements included in the Options described in Chapter 5 of 
the impact assessment affects timing of costs and benefits. Highlights:  

  Simplifications are available on an EU basis from Year 9 (Y9) in Options 1 and 2, with a 
gradual migration window from Y6. They are available from Y6 in Options 3 and 4. The 
EU-wide build of E-commerce processes takes a year longer in Options 1 and 2.  

  As from Y4, Authority activities begin to enable some freeing up of Member State FTE 

resources. The scenarios are noted in section 2.2. [‘RM’ = risk management]. 

The assumptions, based on experience in trans-European customs change management, do not 
imply confirmed timelines, but do illustrate major anticipated differences. 

Option 2 

Option 3 

Option 1 

e-commerce build 
(national). 

e-commerce completed 
in all MS- Y3. 
Simplifications build 
(national). 

COM support RM 
processes (JAC using 
SURV and ICS2 
systems).  

Simpler processes 
(build and trans-
European 
interconnection 
continues) start to be 
phased in. Pilots. 
Migration window to 
basic level across full 
EU Y9 (national 
support). COM supports 
RM for additional 
risks over time (JAC). 

Phase 1 
Y1-Y2 

Phase 2 

(Y3-8 for 
Options 
1-2;  

Y3-Y5 for 
Options 
3-4) 

Phase 3 

(Y9-15 
for 
Options 
1-2;  

Y6-15 for 
Options 
3-4) 

e-commerce build 
(national). 
Authority preparation 
for Risk management 
(RM) and crisis 
management tasks. 

e-commerce 
completed in all MS- 
Y3. Simplifications 
build (national). 
Authority preparation 
for simplifications 
support. Authority as 
RM and crisis support 
(using SURV and 
ICS2 systems). 

Simpler processes 
(build and trans-
European 
interconnection 
continues) start to be 
phased in. 
Pilots. Migration to 
basic level across full 
EU Y9 (national 
support). 
Authority supports 
RM for additional 
risks over time. 

e-commerce 
completed with 
dataspace. 
Preparatory work 
for a year before 
UCC adoption [in 
Options 3 and 4]. 

Simplifications 
build (Data 
Space). Pilots. 
COM support RM 
processes (JAC 
using commerce 
data, SURV, ICS2) 
and COM prepares 
for Data Space.  

Option 4 
e-commerce completed 
with dataspace.  
Authority preparation 
for all tasks except 
simplifications support.  

Simplifications build 
(Data Space). Pilots. 
Authority preparation 
for simplifications 
support. Authority 
builds dataspace and 
does RM, crisis, 
performance 
monitoring, CCEI, 
Customs Programme. 

Common EU 
simpler processes 
deployed in 
dataspace Y6 
(advanced – 
trusted model) 
(national support). 
COM support 
builds up on RM 
processes on Data 
Space (JAC). 

Common EU Simpler 
processes  deployed in 
dataspace Y6 
+ Authority  supports 
delivery. 
Authority role on all 
tasks is broader and 
deeper (all customs 
processes integrated, all 
priority risks 
addressed). 

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2.2 Customs Action Plan 

The Commission’s Customs Action Plan (CAP) adopted by the College in 2020 identified a 
series of measures that are considered as “a first step towards achieving the vision generated 
in  the  foresight  exercise”.  The  CAP  is  preparatory  to  the  customs  reform  covered  in  this 
impact assessment. An interim evaluation of the UCC was carried out under Action 7, and the 
assessment of a Customs Agency (Action 17) is addressed in this assessment. The actions in the 
Customs  Action  Plan  are  scheduled  for  completion  by  2025.  Their  status  and  relevance  is 
summarised in the table below.  

The  assessment  of  costs  and  benefits  takes  full  account  of  the  CAP.  The  baseline  assumes 
implementation  of all non-legislative  actions.  In  so far as the CAP  actions point to  possible 
legislative actions, those are all addressed in the policy options (the CAP is not a legislation 
programme and does not in itself produce legal changes in the baseline). 

No 

1 

3 

4 

5 

6 

7 

8 

9 

10 

11 

Activity 

Link with the customs reform 

EU Joint Analytics Capabilities 
(JAC) 

2 

Revised risk management strategy 

Using VAT data for customs 
purposes 

Revisit role and obligations of e-
commerce actors 

The JAC carries out specific projects, within the limits of 
the  baseline  legislation,  data  and  governance.  These 
projects are useful learning experiences  which will assist 
with the practical preparation of risk management in each 
Option. 

The  risk  management  strategy  includes  short-term  and 
long-term  actions.  The  long-term  actions  are  part  of  the 
customs reform 

Specific risk management project that illustrates the kind 
of  outcome  that  a  more  structured  cooperation  between 
customs  and  other  authorities  could  bring  in  a  reformed 
customs union 

The  legislative  and  digital  changes  needed  to  reinforce 
the  role  of  certain  e-commerce  actors  are  part  of  the 
customs reform 

Stepping up the AEO programme 

The  legislative  changes  needed  to  reinforce  the  AEO 
programme are part of the customs reform.  

EU Single Window environment 
for Customs 

Parliament  and  Council  adopted  the  proposal  on  23 
November 2022. The implementation of the SW is part of 
the dynamic baseline considered for the reform 

Union Customs Code evaluation 

Published  on  31  May  2022.  It  feeds 
assessment for the customs reform 

the 

impact 

Common system of customs 
sanctions 

The report summarizing the findings of the expert group 
is to be published and feeds the customs reform 

Legal framework to combat 
customs fraud 

Regulation  515/97  will  not  be  reviewed  but  one  of  the 
objectives  of  the  customs  reform  is  to  better  combat 
customs fraud 

Import of non-compliant and 
dangerous products 

The improvement on the baseline  brought by the  reform 
is described in the use cases in Section 6 

Monitor the functioning of 
preferential trade arrangements 

Not directly linked to the customs reform  

Page 211 / 291 

 
 
 
 
12 

13 

International cooperation in 
customs matters, in particular 
China 

Not directly linked to the customs reform [the legislative 
changes  needed  to  allow  an  automated  exchange  of 
information  with  third  countries  will  be  part  of  the 
customs reform] 

IT cooperation with security and 
border management authorities 

14 

Customs Union Performance 

Increasing  cooperation  and  exchange  of  information 
between  customs  and  non-customs  authorities  is  one  of 
the goals of the customs reform 

legislative  changes  needed 

for  an  effective 
The 
measurement of the customs  union performance are part 
of the customs reform 

15 

16 

17 

Modern and reliable customs 
control equipment (CCEI) 

The  CCEI  could  be  the  embryo  of  an  EU  wide  customs 
equipment capability in a reformed customs union 

Cooperation under the Customs 
programme (MFF 2021-2027) 

The  Customs  programme  funds  the  expert  teams  that 
serve as inspiration for a strengthened cooperation among 
the Member States in a reformed customs union 

Smarter management of the 
customs union – assessing the 
possibility of an agency 

The wise persons group delivered its report on 31 March 
2022  and  the  Reflection  Group  with  the  Member  States 
was launched thereafter to feed the customs reform  

3.  COSTS 

This  section  analyses  the  incremental  cost  compared  to  baseline  for  each  option,  for  the 
affected stakeholders: 

  Public administrations – EU services; 

  Public administrations – Member States customs authorities; 

  Businesses and trade; 

  Citizens and consumers. 

Page 212 / 291 

 
 
 
 
 
 
 
 
 
 
 
3.1 Public administration - EU services 

Total EU staff 
for Customs 
Union 

Baseline 

Option 
1 

COM 

COM 

COM 

Number of FTEs 
at COM and EU 
Authority if 
applicable 

250-270  250-270 

168 

Option 2 

Option 3 

Option 4 

35 
5 
5 
60 

19 

Authority 
risk management 

crisis management 

cooperation 

data management 

Training & common 
processes 

22 
0-30 

horizontal services 

operational coordination 

146-176 

total 

COM 

COM 

347 

170 

Authority 
risk management 

crisis management 

cooperation 

data management 

Training & common 
processes 

horizontal services 

operational coordination 

50 
9 
10 
115 

19 

22 
0-25 

225-250 

total 

Total estimated 
administrative 
cost, assuming 
2/3 temporary 
agents and 1/3 
contract agents 
(current prices, 
Million 
EUR/year) 

37.6 

37.6 

24.3 

25.4 

50.2 

24.6 

36.2 

Total Option 2 
49.7 

Total Option 4 
60.7 

213 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Explanatory notes: 

 

 

 

 

In Option 1, improvements would be done with the current governance. The staffing at the Commission would therefore be stable as compared to 
the baseline.  

In Option 2, an Authority in the form of an agency would be created. The Authority would be in charge of risk management (preparing decisions 
on  risk  priorities  and implementation  of  risk  management  provisions)  and  crisis  management  activities  and  would  take  over  other  activities  as 
explained in Annex 8. However, under this option no EU Customs Data Space would be created. As a result, less staff would be required for IT 
and  Data  management,  than  in  Options  3  and  4.  On  the  other  hand,  certain  activities  would  then  have  to  be  less  ambitious  due  to  less  data 
availability and would consequently require less resources. 

In Option 3, an EU Customs Data Space would be developed and operated by the Commission, which would also assume some risk management 
activities.  This  requires  increasing  the  Commission  staff  assigned  to  risk  management-related  activities  in  the  baseline  (analytics  connected  to 
ICS2 and Surveillance, and the management of the exchange of risk information between the Commission and the Member States using existing 
IT systems) by at least 50%. The Commission staff for IT must also increase, to manage the budget to build the dataspace and to develop the data 
projects.  It is  assumed that the Commission FTEs dealing with UCC implementation in the baseline (+/- 57) are re-assigned to developing the 
Data  Space.  However,  that  number  of  FTEs  must  at  least  double  for  an  effective  management  of  the  different  data  projects  necessary  to 
implement the customs functions in the Data Space. The investment at the Commission should however have the opposite effect on the Member 
States, which should see their IT administration staff requirement decreasing by 50% (an estimated decrease of 1065 FTE, as explained below in 
section 3.2).   

In Option 4, an Authority in the form of an agency would be created. The Authority would be in charge of risk management (preparing decisions 
on  risk  priorities  and implementation  of  risk  management  provisions)  and  crisis  management  activities  and  would  take  over  other  activities  as 
explained  in  Annex  8.  A  minimum  of  250  staff  members  would  be  required  for  providing  continuous  support  to  the  Member  States  on  risk 
management,  the  Data  Space  and  a  minimum  of  training  and  operational  activities  that  would  allow  a  uniform  implementation  of  the  simpler 
customs processes and cooperation. In the case of higher ambitions, a higher staffing need could also be envisaged. However, the creation of an 
Authority  would allow the Commission to reduce its staff considerably (about  -36.8%).  It  would also  allow the Member States to  reduce their 
staff  requirement  compared  with  baseline  by  about  1  993  FTEs,  notably  due  to  the  Customs  Authority  providing  risk  management  and  IT 
development activities (see below section 3.2).  

Page 214 / 291 

 
 
 
Annualised cost estimate: 

Phase 1 

All values are 
estimates, relative to 
baseline. 
COSTS (quantitative) 
EU Services   - direct implementation costs 
Recurrent (staff) 

Y1 

Y2 

Phase 2 

Phase 3 

Y3 

Y4 

Y5 

Y6 

Y7 

Y8 

Y9 

Y10 

Y11 

Y12 

Y13 

Y14 

Y15 

Total 

Change in FTE level 
from baseline 
Option 1  
Option 2  
Option 3 
Option 4  

Cost estimate  

Option 1 
Option 2 
Option 3 
Option 4 

0 
5 
0 
5 

0 
0,7 
0 
0,7 

0 
10 
0 
10 

0 
1,4 
0 
1,4 

0 
15 
20 
15 

0 
2,2 
2,9 
2,2 

0 
40 
40 
40 

0 
5,8 
5,8 
5,8 

0 
50 
60 
60 

0 
7,2 
8,7 
8,7 

0 
90 
87 
90 

0 
96 
87 
110 

0 
84 
87 
140 

0 
13 
12,6 
13 

0 
13,9 
12,6 
15,9 

0 
12,1 
12,6 
20,2 

0 
84 
87 
160 

0 
12,1 
12,6 
23,1 

0 
84 
87 
160 

0 
12,1 
12,6 
23,1 

0 
84 
87 
160 

0 
12,1 
12,6 
23,1 

0 
84 
87 
160 

0 
12,1 
12,6 
23,1 

0 
84 
87 
160 

0 
12,1 
12,6 
23,1 

0 
84 
87 
160 

0 
12,1 
12,6 
23,1 

0 
84 
87 
160 

0 
12,1 
12,6 
23,1 

0 
141 
143,4 
229,6 

Page 215 / 291 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
3.2 Member States  

This section addresses the non-IT costs for the EU Member States, based on the change 
in  Full-Time  Equivalent  (FTE)  staff  from  the  baseline.  The  IT  costs  are  quantified 
separately in Section 7. 

The  FTE  calculation  for  the  baseline  uses  the  aggregated  EU  27  figures  for  national 
customs authorities’ staff taken from the 2021 data on Customs Union Performance.  

The tables below shows  the estimated FTE impact of all policy options, in the relevant 
function  categories  needed  by  customs  authorities.  As  explained  in  section  3.2.1,  these 
function  categories  are  used  by  the  Member  States  and  the  Commission  in  the  annual 
Customs Union Performance exercise – as such, they represent a common understanding. 

IT  staff  might  in  some  cases  be  part  of  horizontal  services  in  the  Ministry  rather  than 
within national customs administrations. In the Customs Union performance information 
collection, Member States were asked in this case to include the staff which executes the 
tasks on customs’ behalf in these figures. For this exercise it is assumed that 15% of the 
staff in the function category ‘Management & Administration’ is IT staff. 

The  figures  are  intended  to  represent  the  aggregated  change  in  requirement  for  FTE 
required  or  enabled  by  the  options.  It  should  be  emphasised,  that  where  the  Authority 
models  indicate  a  reduction  in  FTE,  this  means  that  compared  with  the  baseline  the 
Member  States  would  need  to  expend  lower  efforts  on  the  tasks  concerned  due  to 
economies  of  scale.  It  does  not  imply  or  require  that  Member  States  would  decide  to 
reduce  customs  numbers  accordingly.  Indeed,  as  the  consultation  shows,  national 
customs  administrations  are  struggling  to  deal  with  the  challenges  and  increasing 
workload they have to face with limited resources, meaning an important consideration in 
reform  is  the  extent  to  which  it  helps  customs  function  more  resource-efficiently  and 
effectively. Increase or decrease of FTE staff numbers per se is not a reform objective.  

It  may  also  be  noted  that  national  customs  authorities  do  not  all  have  the  same 
organisational structure,  or operational  conditions,  meaning the options would not  have 
the  same  effect  in  every  administration.  How  the  number  of  staff  would  evolve  in 
practice  is  a  matter  of  national  administrative  competence,  taking  account  of  national 
responsibilities  for  effective  implementation  of  the  agreed  common  policies  and 
legislation. 

216 

 
 
 
Estimated impact of all policy options on staff (FTEs) in different function categories needed by MS customs authorities compared to baseline  
This table provides the estimated position based on full scale implementation. (Source of baseline figures = CUP Annual report 2021 data). 

Function 
categories 

Baseline 

Option 1 

Option 2 

Option 3 

Option 4  

Phasing assumptions 

These  are  based  on  section  2  for 
timing  of  changes  to  baseline  and 
are also used to prepare annualised 
estimate in next table. 

IT  management  from  Y1  (+213) 
Risk  assessment  from  Y4  (+191) 
Full scale activities from Y9  

IT  management  from  Y1  (+213) 
Risk  assessment  Y4,  Y5,  Y6  
(-191,  1/3  change  per  year).  
Full scale activities from Y9 

Risk  assessment  from  Y4  (+191)  
IT  Management  from  Y4  (-1065, 
1/3 per year) 

Total 
staff 

Risk 
assessment 

Audits 

Customs 
clearance 
activities 

Other 
customs 
control 
activities 

Customs 
policy  and 
procedures 

Management/ 

Management/ 

Admin.  

– IT part 

Admin 

Non-IT 

Other 
Post-
Release 
Control 
(O-
PRC) 

82 699 

3 812 

19 432 

1 877 

3 024 

31 311 

9 039 

84 459 

4 003 

9 716 

4 693 

3 326 

37 909 

10 395 

2131 

2 344 

(+2.1%) 

(+5%) 

(-50%) 

(+150%) 

(+10%) 

(+21%) 

(+15%) 

(+10%) 

84 318 

(+2%) 

3621 

(-5%) 

9 716 

4 693 

3 326 

37 909 

10 395 

2 344 

(-50%) 

(+150%) 

(+10%) 

(+21%) 

(+15%) 

(+10%) 

82 232 

4 003 

9 716 

4 693 

3 326 

37 909 

9 446 

1066 

Full  scale  activities 
(end of transition window) 

from  Y9        

(-0.6%) 

(+5%) 

(-50%) 

(+150%) 

(+10%) 

(+21%) 

(+4,5%) 

(-50%) 

Risk assessment Y4, Y5, Y6 (-762, 
1/3 change per year) 

IT  management  from  Y4  (-1065, 
1/3 per year) 

80 706 

3 050 

9 716 

4 693 

3 326 

37 909 

9 378 

1066 

(-2.4%) 

(-20%) 

(-50%) 

(+150%) 

(+10%) 

(+21%) 

(+3.8%) 

(-50%) 

Full  scale  activities 
(end of transition window) 

from  Y9        

12 073 

12 073 

12 314 

(+2%) 

12 073 

11 568 

(-4.2%) 

217 

 
 
 
 
Annualised cost estimate: 

Phase 1 

All values are 
estimates, relative to 
baseline. 
COSTS (quantitative) 
Member States       - direct implementation costs 
Recurrent (staff) 

Y1 

Y2 

Y3 

Phase 2 

Phase 3 

Y4 

Y5 

Y6 

Y7 

Y8 

Y9 

Y10 

Y11 

Y12 

Y13 

Y14 

Y15 

Total 

Change in FTE level 
from baseline 
Option 1  
Option 2  
Option 3 
Option 4 

Cost estimate  
Option 1 
Option 2 
Option 3 
Option 4 

213 
213 

213 
213 

213 
213 

10 
10 

10 
10 

10 
10 

404 
149 
-164 
- 609 
17 

19 
7 
-8 
-29 

404 
85 
-519 
-1218 

404 
22 
- 874 
-1827 

404 
22 
-467 
-1827 

404 
22 
-467 
-1827 

1760 
1619 
-467 
-1993 

1760 
1619 
-467 
-1993 

1760 
1619 
-467 
-1993 

1760 
1619 
-467 
-1993 

1760 
1619 
-467 
-1993 

1760 
1619 
-467 
-1993 

1760 
1619 
-467 
-1993 

14 979 
12 272 
-6 574 
- 21 159 

19 
4 
-24 
- 57 

19 
1 
-41 
-86 

19 
1 
-41 
-86 

19 
1 
-41 
-86 

83 
76 
-22 
-94 

83 
76 
-22 
-94 

83 
76 
-22 
-94 

83 
76 
-22 
-94 

83 
76 
-22 
-94 

83 
76 
-22 
-94 

83 
76 
-22 
-94 

703 
576 
- 309 
- 1002 

For  conversion  of  FTE  numbers  to  cost  estimates,  the  most  recent  Eurostat Total  Labour  Cost  figure  of  €46,928  was  used  (2020  figure for  EU 27). The  statistical 
classification  label  is  Public  administration  and  defence;  compulsory  social  security;  education;  human  health  and  social  work  activities;  arts,  entertainment  and 
recreation; other service activities. Source: Statistics | Eurostat (europa.eu) 

Eurostat  explanatory  notes  extract:  Labour  Costs  refer  to  the  total  expenditure  borne  by  employers  for  the  purpose  of  employing  staff.  They  include  employee 
compensation, which is mainly comprised of gross wages and salaries in cash and in kind and employers' social security contributions, vocational training costs, other 
expenditure, such as recruitment costs and spending on working clothes, and employment taxes regarded as labour costs minus subsidies received. These labour cost 
components and their elements are defined in Commission Regulation (EC) No 1737/2005 of 21 October 2005, implementing Council Regulation (EC) No 530/1999 
concerning structural statistics on earnings and labour costs as regards the definition and transmission of information on labour costs.  See Labour costs survey  - 
NACE Rev. 2 activity (lcs_r2) (europa.eu). 

Page 218 / 291 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
3.2.1 Definition of function categories: 

This  section  is  based  on  the  Customs  Union  Performance  programme  (CUP),  which 
provides  a  common  framework  for  analysing  customs  staff  levels  across  all  Member 
State.  The  labels  in  the  table  are  based  on  the  functional  definitions  used  in  the  CUP 
Guidance. Their meaning is briefly explained below.  

Risk  assessment:  risk  assessment  and  pre-selection  of  customs  and  entry/exit  summary 
declarations. 

Customs clearance activities include: 

  handling of (customs) declarations: entry/exit summary, import, export, warehousing, 

transit, etc. 

  documentary controls of (customs) declarations 

  physical control of goods 

  handling declarations in passenger traffic 

Audits: 

 

 

for the baseline, this includes Post-release audits  

in all Options the task of audits for the Trust and Check approach is added 

Other Post-Release Control activities 

 

 

for the baseline, this includes other specific controls after goods are released  

in all Options this activity also takes place to support the Trust and Check approach 
including  controls  for  other  policy  reasons  where  provided  for  in  a  co-operation 
framework 

Other control activities include: 

  mobile controls, surveillance controls - border and internal traffic  

 

investigation  and  preparing  prosecution  or  penalties  in  relation  to  offences  against 
customs laws 

  customs  control  of  external  border  crossing  (e.g.  baggage  controls,  x-ray,  detection 

portals, customs dogs, etc.)  

Customs policy and procedures: policy development and advice, legislative management 
and subsequent internal instructions to the customs offices 

Client management, including: 

  authorisations for different procedures, including pre-audits 

  appeals or opinions on the application of the customs procedures 

  client information service(s) 

 

facilitation/ consultation 

  Other, such as: 

  customs laboratories 
  origin, customs valuation, customs tariff (BTI/BOI) 

219 

 
 
 
Customs management and administrative support: 

  Management, such as: 

  organization (all levels incl. DG) 

  staffing management 

 

information  management  (e.g.  planning;  IT-projects,  management  data  and 
analysis)  

 

training management 

  staff health & safety issues 

  Other, such as: 
 
training 

 

logistics 

  archiving 

 

treasury or financial administration 

  procurement  

  equipment and IT systems maintenance 

  public relations 

  co-ordination of business plans and budgets 

  accounting 

  statistics 

Additional note: 

Overall  customs  staff  numbers  also  handle  issues  such  as  information  verification  and 
requests  and  physical  control  of  means  of  transport  in  the  supply  chain,  as  well  as 
physical/documentary  controls  triggered  through  advance  cargo  information  (ACI) 
processing, which are not separately quantified. 

3.2.2 Assumptions underlying the FTE adjustment calculation for each Option: 

The  phasing  of  the  impact  on  each  activity  is  addressed  directly  on  the  table.  This 
describes the substantive changes in so far as they  tend to either require increased FTE 
effort or free up FTE efforts for the Member States. IT costs are addressed in Annex 7. 

Option 1: 

An  increased  role  for  Commission  in  risk  management  will  also  imply  in  this  option 
more staff in ‘risk assessment’ and control activities. However, since customs processes 
are reformed via implementation of the Trust and Check model: 

  A  big  shift  in  staff  from  ‘Customs  clearance  activities’  to  ‘Other  customs  control 
activities’  (which  include  operational  controls  triggered  through  advance  cargo 
information  processing)  and  ‘Audits’  and  ‘Other  post-release  controls’  (which 
include audits and other checks to assess, implement and follow up on the Trust and 
Check model). The net effect of this shift is neutral. 

  A substantial further increase for staff in ‘Customs policy and procedures’ for client 
management  (not  only  in  e-commerce  but  in  general  to  assist  operators  in 

Page 220 / 291 

 
 
implementing the Trust and Check approach) and to follow-up on legal work linked 
to risk management, ‘trust and check’ model, drafting national instructions etc. 

  More staff in ‘Management and administration – IT part’ to deal with IT systems that 
allow that information is submitted only once and re-used for different purposes and 
analysis by the customs authorities. 

Option 2: 

From  the  perspective  of  national  customs,  this  option  has  a  similar  impact  on  staff 
compared to Option 1 in general. However, the activity of the Authority in common risk 
management  would  free  up  time  in  the  risk  assessment  category,  estimated  at  5%, 
primarily  for  co-ordination  of  common  approaches,  co-operation  frameworks  and 
organisation of analytics on available common systems (SURV, ICS2).  

Option 3: 

An  increased  role  for  Commission  in  risk  management  will  also  imply  in  this  option 
more staff in ‘risk assessment’ and control activities.  

Customs  processes  are  reformed  via  implementation  of  the  Trust  and  Check  model, 
implying  the  impact  described  for  Option  1.  A  further  change  in  Option  3  is  the 
introduction  of  a  new  common  customs  information  environment  (EU  Customs  Data 
Space) to support implementation. This Data Space is implemented and managed by the 
Commission. It is assumed that national customs administrations would carry out further 
specific  IT  implementations  (not  relevant  for  this  section  of  the  analysis)  and  that  the 
Data  Space  would  be  gradually  extended  and  integrate  evolved  versions  of  the  current 
central interfaces and systems. Most Member States’ IT systems will be gradually phased 
out  as  more  functionalities  switch  to  common  or  customised  applications  in  the  Data 
Space.  The Staff needed in ‘Management and administration – IT part’ would therefore 
significantly decrease. 

The  increase  in  staff  required  for  ‘Customs  policy  and  procedures’  is  assumed  to  be  at 
about  30%  of  the  level  required  in  Option  1,  as  the  Data  Space  significantly  eases 
administration. 

Option 4: 

This option combines a reform of the customs processes with reform of the digitalisation 
model,  which  would  become  more  centralised.  In  addition,  a  new  EU  actor  in  the 
governance  structure,  an  EU  Customs  Authority  is  introduced.  The  Authority  would 
develop  and  manage  the  EU  Customs  Data  Space,  deepen  co-operation  and  drive  the 
consistent  and timely delivery of customs policies. The main difference  with  respect  to 
the  previous  option  is  that  the  Authority  would  take  over  the  role  of  developing  and 
managing the Data Space that will progressively replace the Member States IT systems. 
Room  will  remain  for  Members  State  implementations  if  necessary  but  these  are 
expected to be lighter and built using existing functions and services established by the 
Data Space managed by the Authority. 

  A big shift in staff is needed from ‘Customs clearance activities’ to ‘Other customs 
control  activities’  (which  include  operational  controls  triggered  through  advance 
cargo  information  -  ACI  -  processing)  and  Audits  and  other  post-release  controls 
(which  include  audits  and  other  checks  to  assess,  implement  and  follow  up  on  the 
Trust and Check model). Again, as with Option 1 the net effect of this shift is neutral. 

Page 221 / 291 

 
 
  A significantly lower number of staff compared with baseline would be required for 
‘risk  assessment’  as  a  significant  part  of  this  work  would  shift  to  the  Authority, 
complementing the national risk management. 

  A decrease in the staff for ‘management and administration’ as training would largely 
be taken on by the Authority at EU level. Assumption: training staff is at average 30 
FTE per MS implying an EU total of 810 in the baseline (included in ‘management 
and admin – rest’). Considering the Authority could take over these tasks partially we 
could expect a decrease by 50% (405 FTEs).  

 

If  the  Authority  takes  over  additional  tasks,  such  as  drafting  guidance,  instructions, 
etc, less staff at national level would be required for this but the table above does not 
show that development yet.   

The  increase  in  staff  required  for  ‘Customs  policy  and  procedures’  is  assumed  to  be  at 
about  25%  of  the  level  required  in  Option  1,  as  the  Data  Space  significantly  eases 
administration and the Authority further streamlines operation of the processes. 

3.3 Business and trade 

3.3.1 One-off costs – the cost of training for adapting to the new customs processes 

The cost for training businesses and traders on the new processes is considered negligible 
and does not necessarily need to be borne by the traders themselves. To take an indicator, 
the budget  for training at  the Commission  for producing  customs on-line courses in  all 
languages, which were seen by a total of almost 3 million economic operators between 
2016 and 2021, amounts to EUR 12 578 300.  

The  downside  of  these  courses  is  that  they  cannot  take  into  account  the  national 
particularities.  However,  having  more  uniform  and  simpler  customs  processes  would 
allow  to  produce  courses  valid  for  all  Member  States.  Moreover,  if  an  Authority  could 
prepare and distribute them, the cost for operators would be zero.   

3.3.2 Recurrent costs: the financial burden of complying with customs formalities 

Complying with customs formalities entails a financial burden for business and traders, 
and  under  certain  circumstances  also  for  consumers  (notably  certain  e-commerce 
transactions, see below section 3.4).  

Specific  cost  information  is  not  systematically  available  for  business  and  trade 
compliance  activities.  The  cost  of  complying  with  all  the  customs  formalities  (i.e. 
declarations) needed for a specific import process may be borne by a single operator or 
by  several,  depending  on  the  private  arrangements  among  them.  Transport  operators 
traditionally comply with the customs formalities directly while importers and exporters 
might  pay  a transport or cargo price that includes compliance with  customs  formalities 
(without  necessarily having full transparency on  the customs business  elements), might 
carry out some formalities directly, or might hire the services of intermediaries (customs 
agents) to act on their behalf.  

Page 222 / 291 

 
 
 
 
 
 
With these overlaps and variables, the approach taken to estimate the costs of complying 
with  customs formalities is  based on  the estimated time (160) needed to  comply with  all 
the  formalities  for  import  and  export,  and  monetise  that  time,  without  distinguishing 
between  types  of  actors  (carriers,  importers  or  representatives).  The  cost  per  customs 
process is multiplied by the number of annual import and export declarations in the EU, 
thereby  getting  a  proxy  of  the  overall  business  cost  for  complying  with  customs 
formalities  in  the  EU.  The  cost  of  having  to  provide  guarantees  to  secure  certain  duty-
suspensive procedures is not considered as this is difficult to estimate globally because it 
is linked to the financial situation of the operator, its volume of operations etc. (161) 

The estimations herein combine data from three studies, which provide a certain cost per 
declaration,  based  on  the  time  needed  to  compile  the  information  and  fill  it  in,  and  a 
certain hourly rate, as follows:  

a)  The  2008  US  government  study  supporting  the  introduction  of  the  mandatory 
filing  of  safety  and  security  declarations (162).  It  considers  that  each  shipment 
costs between $4 and $390. This study does not consider how automation has in 
general  decreased  compliance  costs  all  over  the  world  so  no  specific  figure  has 
been taken from it;  

b)  The 2018 Dutch government study assessing the customs impact of Brexit in the 
Netherlands. Based on a very detailed analysis of the UCC processes as described 
in Annex 5, it calculates a  total cost per shipment between €78.20 and €126.70, 
where  both  the  export  and  import  formalities  are  considered.  The  report 
distinguishes between import and export, insourced declarations and declarations 
outsourced  to  customs  agents.  It  also  takes  into  account  the  effect  of 
simplifications  to  file  the  declarations.  The  calculations  were  prepared  by  an 
external  contractor  and  have  been  audited.  For  their  similarity  with  the  present 
analysis  and  their  reliability,  the  figures  of  this  study  are  taken  as  basis  for  the 
estimations below; and  

c)  The  2019  UK  government  study  assessing  the  customs  impact  of  Brexit  in 
UK (163) follows a very similar methodology to the Dutch study but considers one 
customs  formality  (the  customs  declaration)  and  not  the  whole  processes.  It 
results  in  a  cost  per  declaration  between  £15  and  £56,  £15  being  the  estimated 
price for customs declarations for e-commerce. That price is the only available to 
calculate the cost of customs formalities for e-commerce.  

(160)  The  World  Bank  series  Trading  across  Borders  -  Doing  Business  -  World  Bank  Group  measures 
certain  customs  performance  indicators  such  as  the  border  compliance  and  documentary  compliance,  in 
terms  of  time  spent  to  complete  them.  However,  in  a  global  context,  the  indicators  for  most  of  the 
European  Union  Member  States  are  so  good  that  they  cannot  be  used  to  estimate  an  improvement  in 
customs  performance.  Other  examples  focusing  on  customs  costs  exclusively  are  from  2001.  See  for 
instance  Dynamic  Effects  of  the  ‘New  Age’  Free  Trade  Agreement  between  Japan  and  Singapore 
(purdue.edu) 
(161)     The scale of this cost would also be relatively very small compared with the aggregate estimates. 
(162)  
(163)  

E8-27048.pdf (govinfo.gov) 
Customs  Costs  Post-Brexit.  Long  Version  -  Briefings  For  Brexit  (briefingsforbritain.co.uk). 
https://www.gov.uk/government/publications/hmrc-impact-assessment-for-the-movement-of-goods-if-
the-uk-leaves-the-eu-without-a-deal/hmrc-impact-assessment-for-the-movement-of-goods-if-the-uk-
leaves-the-eu-without-a-deal-third-edition#section-c  and  Impact  of  non-tariff  measures  as  a  result  of 
Brexit. KPMG Report sponsored by Ministry of Economic Affairs and Climate Policy and Ministry of 
Agriculture, Nature and Food Quality, The Netherlands, 2018 

Page 223 / 291 

 
 
 
                                                      
NTB Step  NTB cost range  Average 

NTB Step 

NTB cost range  Average 

Entry 
summary 
declaration 

Import 
declaration 

4,2 

7,7 

5,95  Export 

30,5 

47 

38,75 

40 

65 

52,5 

declaration 
Outward 
clearance 
declaration 

3,5 

7 

5,25 

TOTALS 

44,2 

72,7 

58,45 

TOTALS 

34 

54 

44 

The  costs  per  declarations  provided  in  the  studies  have  been  applied  to  the  baseline 
scenario as follows:  

 

 

 

 

For standard import, export and transit procedures: the average of Dutch cost for 
import and export outsourced declarations (EUR 58.5 and EUR 44) is multiplied 
by the number of standard import declarations in 2021. 

For  import  and  export  simplified  procedures:  the  lowest  Dutch  cost  for  import 
and  export  (EUR  44.2  and  EUR  34)  is  multiplied  by  the  number  of  simplified 
import declarations in 2021. 

For import e-commerce: UK standard cost for parcel declarations converted into 
EUR (EUR 15) is multiplied by the fraction of H7 declarations without indicating 
the VAT number for Import One Stop Shop (IOSS) from July 2021 to June 2022 
(as there was no obligation to declare goods up to EUR 150 before July 2021).  

For import e-commerce IOSS declarations: 1/3 of the UK standard cost for parcel 
declarations  converted  into  EUR  (EUR  5)  is  multiplied  by  the  fraction  of  H7 
declarations indicating the VAT number for Import One Stop Shop (IOSS). The 
cost of filing parcels declarations under IOSS is reduced by 2/3, because carriers 
charge a lower fee for declaring those goods as there is no need to collect VAT on 
them. 

The  table  below  summarises  the  calculations  and  shows  the  estimated  impact  of  the 
policy measures proposed in the 4 options over a 15-year period, as follows: 

 

In the baseline, economic operators’ cost for complying with customs formalities in 
the EU amounts to  EUR  27.4 billion per  year. For import, the cost  of  compliance 
represents 0.59% of the total value of imported goods (which is EUR 2 507 billion). 
For  export  and  transit,  the  cost  of  compliance  represents  0.21%  of  total  value  of 
exported goods (which is EUR 2 938 billion). 

  In  options  1  and  2,  the  customs  processes  are  fundamentally  modified  to  ensure 
that  the  information  submitted  by  operators  is  reused,  starting  by  e-commerce. 
However, the IT implementation of the new processes remains national (even if  at 
least to a certain extent interoperable). As a consequence, in these options: 

o  Even if the additional customs duties are factored in as an additional cost for 
businesses,  e-commerce  operators  benefit  from  a  reduction  of  their 
administrative  costs  from  the  year  in  which  the  different  national  customs 

Page 224 / 291 

 
 
 
 
reporting  tool  for  intermediaries  (platforms)  are  operating,  which  is 
estimated in year 4 after the adoption of the proposal. The most significant 
savings  will  be  for  the  flows  that  are  currently  not  using  the  Import  One 
Stop  Shop  (IOSS)  to  collect  VAT,  because  these  are  the  ones  currently 
experiencing extremely high compliance fees, particularly in relation to the 
declared value of the goods. For that reason, the savings are very significant. 

o  The compliance savings derived from the simplifications for other operators 
(both AEO and non AEO) are noticeable only after a significant number of 
Member States have deployed their  IT solutions  for the new processes and 
this,  given  the  27  different  implementations,  is  estimated  to  happen 
progressively  between  Y9  and  Y11.  The  savings  for  these  operators  are 
considered  moderate  (2%-3%)  because  there  would  still  be  27  IT 
environments.  The savings would only affect  the  import processes because 
the  export  process  is  already  sufficiently  streamlined  and  coordinated  and 
can only be improved marginally. 

o  By Y15, the overall saving amounts to EUR 1.78 billion per year. 

  In option 3, operators may interact with the customs (and other) authorities through 
a  single  EU  Customs  Data  Space,  built  by  the  Commission.  Building  a  single 
central digital instead than 27 makes the savings accrue earlier than in options 1 and 
2: 

o  The benefits for e-commerce operators are considered but they accrue a year 

earlier, in Y3. 

o  The savings for other operators start being available from Y6, when a certain 
number  of  operators  could  start  interacting  with  customs  through  the  Data 
Space,  until  Y9,  when  most  operators  should  be  integrated.  Due  to  the 
advantage of operating EU-wide through a single customs IT environment, 
the savings are considered higher than in options 1 and 2: about 5% less of 
the  time  needed  to  complete  the  import  process  even  if  more  data  is 
requested. As to transit, the possibility to safely follow the movement of the 
goods in the EU through the Data Space should importantly reduce the need 
for transit declarations, with a saving of 50%. 

o  It  is  therefore estimated  that this option result in  an annual  cost  saving  for 

the operators trading with the EU of EUR 2.13 billion. 

  In option 4, the customs processes are fundamentally modified, and the operators 
submit  information  once  in  the  EU  Customs  Data  Space  managed  by  the 
Authority.  As  a  consequence,  in  these  options,  the  increase  in  cost  due  to  the 
additional  information  required  is  not  only  compensated  by  a  single  method  to 
provide  the  information  across  the  EU  but  also  by  the  existence  of  a  central 
operational  entity  that  reinforces  cooperation  among  customs  authorities  also  at 
the border, on the ground. This scenario, which has the same timeline as option 3, 
should however result in lower administrative costs for economic operators than 
in option 3, estimated as follows:  

o  A reduction of 5%-8% of the time to complete the import process, including 

some physical controls for traditional/AEO traders, respectively.  

o  The  possibility  to  safely  follow  the  movement  of  the  goods  in  the  EU 
through  the  Data  Space  under  the  Authority  coordination  should  further 
reduce the need for transit declarations, with a saving of 60%. 

Page 225 / 291 

 
 
o  It is therefore estimated that these options result in an annual cost saving for 
economic  operators  of  EUR  2.58  billion  per  year  with  respect  to  the 
baseline.  

Page 226 / 291 

 
 
227 

OPTIONProcedure# Decl. Average costCompliance costsY3Y4Y5Y6Y7Y8Y9Y10Y11Y12Y13Y14Y15IM standard 99.955.389585.842.392IM simplified206.697.268449.136.019IM eCommerce (no IOSS)58.440.00015888.821IM eCommerce  (IOSS)915.560.00054.641.622EX standard 73.973.885443.254.851EX simplified89.368.201343.038.519TRA standard 17.500.00034595.00027.397.22527.397.22527.397.22527.397.22527.397.22527.397.22527.397.22527.397.22527.397.22527.397.22527.397.22527.397.22527.397.22527.397.225ProcedureEstimated savingAverage costCompliance costsY3Y4Y5Y6Y7Y8Y9Y10Y11Y12Y13Y14Y15IM standard -2%575.725.545-87.636-93.478-116.848-116.848-116.848-116.848-116.848IM AEO+-3%428.639.946-372.055-396.859-496.073-496.073-496.073-496.073-496.073IM eCommerce (no IOSS)-66%5296.274-592.548-592.548-592.548-592.548-592.548-592.548-592.548-592.548-592.548-592.548-592.548-592.548IM eCommerce  (IOSS)-33%33.063.471-1.578.152-1.578.152-1.578.152-1.578.152-1.578.152-1.578.152-1.578.152-1.578.152-1.578.152-1.578.152-1.578.152-1.578.152IM customs duties1.000.0001.000.0001.000.0001.000.0001.000.0001.000.0001.000.0001.000.0001.000.0001.000.0001.000.0001.000.0001.000.000Total (no changes in EX/transit)24.613.6050-1.170.699-1.170.699-1.170.699-1.170.699-1.170.699-1.630.390-1.661.036-1.783.620-1.783.620-1.783.620-1.783.620-1.783.620ProcedureEstimated savingAverage costCompliance costsY3Y4Y5Y6Y7Y8Y9Y10Y11Y12Y13Y14Y15IM standard -3%575.667.121-43.818-87.636-131.454-175.272-175.272-175.272-175.272-175.272-175.272-175.272IM AEO+-5%428.639.946-124.018-248.037-372.055-496.073-496.073-496.073-496.073-496.073-496.073-496.073IM eCommerce (no IOSS)-66%5296.274-592.548-592.548-592.548-592.548-592.548-592.548-592.548-592.548-592.548-592.548-592.548-592.548-592.548IM eCommerce  (IOSS)-33%33.063.471-1.578.152-1.578.152-1.578.152-1.578.152-1.578.152-1.578.152-1.578.152-1.578.152-1.578.152-1.578.152-1.578.152-1.578.152-1.578.152IM customs duties1.000.0001.000.0001.000.0001.000.0001.000.0001.000.0001.000.0001.000.0001.000.0001.000.0001.000.0001.000.0001.000.000TRA standard -50%17297.500-297.500-297.500-297.500-297.500-297.500-297.500-297.500-297.500TOTAL (no changes in export)24.257.681-1.170.699-1.170.699-1.170.699-1.338.535-1.506.372-1.971.708-2.139.544-2.139.544-2.139.544-2.139.544-2.139.544-2.139.544-2.139.544IMPORTEstimated savingAverage costCompliance costsY3Y4Y5Y6Y7Y8Y9Y10Y11Y12Y13Y14Y15IM standard -5%565.550.273-73.030-146.060-219.090-292.120-292.120-292.120-292.120-292.120-292.120-292.120IM AEO+-8%408.367.105-192.228-384.457-576.685-768.914-768.914-768.914-768.914-768.914-768.914-768.914IM eCommerce (no IOSS)-66%5296.274-592.548-592.548-592.548-592.548-592.548-592.548-592.548-592.548-592.548-592.548-592.548-592.548-592.548IM eCommerce  (IOSS)-33%33.063.471-1.578.152-1.578.152-1.578.152-1.578.152-1.578.152-1.578.152-1.578.152-1.578.152-1.578.152-1.578.152-1.578.152-1.578.152-1.578.152IM customs duties1.000.0001.000.0001.000.0001.000.0001.000.0001.000.0001.000.0001.000.0001.000.0001.000.0001.000.0001.000.0001.000.000Standard -60%14238.000-357.000-357.000-357.000-357.000-357.000-357.000-357.000-357.000TOTAL (no changes in export)23.808.4931.170.699-  1.170.699-  1.170.699-  1.435.957-  1.701.216-  2.323.474-  2.588.733-  2.588.733-  2.588.733-  2.588.733-  2.588.733-  2.588.733-  -2.588.733Option 3Option 4Impact on compliance costs along implementation timeline (thousand EUR)Yearly costs of declarations (thousand EUR)BaselineTOTALOptions 1 and 2 
 
  
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3.3.3. 

Economic operators - IT cost perspective 

Depending on each of the different  options, the connectivity, and ways to  interact  with 
the Customs  will  be different.  In the existing model  and option 1, the interactions with 
Customs  Administrations  vary  in  terms  of  interfaces,  national  administration,  and  IT 
systems.  ICS2  is  the  notable  exception  with  a  single  trans-European  interface  to  which 
operators must connect independently of the Member State or border crossing. 

Sections 3.3.1 and 3.3.2 provide an overall quantitative total cost of business estimate, 
without  distinguishing  between  IT  and  non-IT  costs.  This  impact  assessment  does  not 
attempt  a  breakdown  of  business  costs  between  IT  and  other  costs,  as  it  would  not  be 
possible to build the estimate robustly from survey data (as explained in section 1.1.2). 

The discussion presented below provides a qualitative comparison between each option 
and  the  expected  complexity  for  economic  operators.  This  comparison  shows  how 
options compare between themselves in terms of expected complexity of implementation 
for  economic  operators.  It  is  not  a  full  IT  cost  assessment  based  on  assumptions  and 
scenarios, as it was performed in annex 7. 

From  a  trade  perspective  this  is  what  can  be  expected  when  comparing  the  different 
options: 

a)  Options 1 and 2 would mean a system-based approach, without customs declarations 
but using national implementations. During a transition period, the current IT systems 
would  be  operated  and  maintained  but,  after  this  transition  period,  Economic 
Operators  would  have  to  adapt  and  modernize  their  IT  Systems  to  the  new  reality. 
Given that this architecture is based in national implementations, there would not be a 
single  European  access  point 
for  economic  operators.  The  number  of 
implementations required will be proportional to the number of Member States with 
whom there would be interactions. 

b)  Options 3 and 4 would mean a single centralized implementation, without requiring 
individual  customs  declarations.  In  this  case,  it  would  only  be  required  to  have  a 
single implementation to a Europe-wide dataspace. As in the previous option, during 
a transition period, the current  IT systems would be operated and maintained. After 
this  transition  period,  Economic  operators  would  have  to  gradually  adapt  and 
modernize  their  IT  Systems  to  the  new  reality.  Given  that  this  would  be  a  single 
implementation, compared to at least 27 potential interfaces on the options 1 and 2, 
the investment required would be smaller. 

When  considering  options  1  and  2,  alternative  entry  points  and  interfaces  are  made 
available  for  the  traders  wishing  to  switch  according  to  their  calendar  and  preferences. 
Traditional traders will keep using the current technical interfaces in the mid-term, while 
new traders, wanting to invest in new systems could connect immediately to the national 
dataspaces. 

In options 3 and 4, there is a single Data Space platform with EU wide interfaces for the 
Economic Operators. This interface would be put in place for forerunner projects (e.g., e-
commerce)  which  will  use  the  new  paradigm.  On  a  second  phase,  other  Economic 
Operators will be given the option to use the new interface for all Customs interactions; 
National  Declaration  Interfaces  will  stay  alive  for  several  years  to  allow  smooth 
transition but will eventually be phased out. Development costs will certainly be required 
in order to participate in the dataspace. The dataspace will be based in industry standard 

229 

 
 
technologies  and  with  normalised  dataspace  platform  services.  These  services,  together 
with  software  libraries  and  generic  sample  software  can  be  made  available  to  Member 
States and Trade to build their own applications.  

In options 3 and 4 it is considered that the net impact for economic operators would be 
highly positive, because the adjustments involve adapting to interface with a single EU 
customs data environment in place of one customs IT environment per Member State of 
operations.  The  number  of  data  provision  points  is  reduced  and  the  data  is  provided  to 
one single EU interface. Data can be provided in advance and re-used (instead of being 
repeatedly  provided).  The  data  requirements  are  rebalanced  to  better  fit  commercial 
practices (data is  in  principle required  from  those who are best place to  give it, data is 
accepted  in  multiple  formats,  and  the  declarant  role  is  removed).  The  overall  IT  effort 
required across economic operators is  reduced on a permanent  basis. While no specific 
data is available on these costs, recent experience with the reform of the Import Control 
System supports this view – businesses were strongly in favour of the shift of paradigm 
from multiple national interfaces and processes to a single shared interface and process, 
on grounds of reduction of cost and complexity. One-off development IT costs to connect 
to Data Space are expected to be counteracted by a lower-cost IT model for the future. In 
this regard, the joint industry statement issued on 7th June 2018 (164) stated as follows: 

‘These legal provisions and in particular the ‘multiple filing’ requirements make 
the  principles  and  proposed  elements  underpinning  ICS  2  essential.  Economic 
operators need a unified and coherent EU system with a common set of processes 
and  a  shared  IT  architecture.  The  proposed  Common  Repository,  the  Shared 
Trader Interface / Harmonised Trader Interface with the same specifications, and 
the single access and identity management system are imperative to implementing 
the  UCC  without  disrupting  trade.  These  systems  features  are  the  logical  and 
necessary  consequence  of  the  UCC  and  IA/DA  provisions.  The  alternative  of  a 
fragmented  Member  State  based  ICS  2  system  would  be  incoherent  and 
inefficient,  and  would  impose  insupportable  costs  on  both  Member  States  and 
economic operators.’   

It should be noted that this investment will not be only about connectivity. In a Trust and 
Check model, traders will have to prepare and arrange the data elements in their internal 
systems  and  provide  it  according  to  their  obligations  in  different  steps  of  the  logistical 
chain.  These  will  require  new  developments  with  an  expected  IT  impact  for  traders 
which choose to join Trust and Check. 

In  summary,  from  trade  perspective,  options  3  and  4  and  will  require  changes  and 
adaptations  as  part  of  the  landscape  change  introduced  by  the  new  EU  customs  Data 
Space.  For  options  1  and  2,  given  that  there  will  be  27  national  implementations,  the 
complexity and costs associated will be similar when operating in a single Member State 
but larger when dealing with multiple ones. 

The different options are compared in order of magnitude when compared to the baseline 
in the table further below. 

(164) Statement  of  industry  sopport  fro  the  ICS  2  system.  Supported  by:  Airlines  for  Europe  (A4E);  the 
European  Association  for  Forwarding;  Transport,  Logistics  and  Customs  Services  (CLECAT);  the 
Community  of  European  Railways  (CER);  the  European  Express  Association  (EEA);  EurTradeNet 
(ETN); the European Shippers Council (ESC), the International Air Transport Association (IATA) and 
the World Shipping Council (WSC). 

Page 230 / 291 

 
 
                                                      
Information Technology (IT) costs – qualitative view 

For business/trade  

One-off 

Recurrent 

++ 

≈ 

++ 

≈ 

+ 

- 

+ 

- 

1 

2 

3 

4 

3.4 Citizens and consumers 

A robust quantification of the baseline is not possible in this domain as the charges are 
not systematically published, and the underlying patterns have been temporarily distorted 
by  the  COVID  19  pandemic.  Consequently,  no  specific  cost  estimate  is  prepared  for 
citizens  and  consumers.  However,  no  option  involves  increasing  consumer  and  citizen 
compliance and implementation costs from the baseline. 

Citizens and consumers – IT cost perspective 

As in previous section, the discussion presented below provides a qualitative comparison 
of the impacts  of each option and the expected  complexity for  citizens and consumers. 
This comparison shows how options compare between themselves in terms of expected 
complexity of implementation for economic operators. It is not a full IT cost assessment 
based on assumptions and scenarios, as it was performed in annex 7. 

Both citizens and consumers are not expected to develop their own IT systems to interact 
with  the  Customs  administrations.  For  such  actors,  Customs  will  have  to  provide  the 
portals  to  deal  with  the  formalities  in  a  seamless  and  transparent  manner.  Today,  such 
interaction  is  managed  by  freight  forwarders,  private  customs  agents  and/or  postal 
operators. The Customs administrations are not interacting directly with the recipient of 
the  goods  (although  the  intermediaries  sometimes  require  end  customers  to  provide 
information and payment online).  

It  is  considered  that  all  options,  from  IT  perspective  alone,  are  comparable  to  the 
baseline.  Citizens  rely  on  service  providers/customs  representatives.  As  such  the  IT 
impact of the policy option is for the service provider, not for the consumer. The impacts 
for  the  service  provider  fall  in  the  category  of  economic  operators,  addressed  in  the 
previous subchapter. 

Nevertheless, the IT changes introduced are expected to bring improvements. All options 
would create customs portals available for citizens and consumers, allowing them to have 
a  view  on  the  information  required  during  the  different  stages  of  the  import  process. 
Likewise,  the  customs  administrations  would  share  transparently  the  status  and 
information available at any moment of the process. Options 3 and 4 bring an additional 
improvement  when  compared  to  the  baseline  and  to  national  implementations.  In  these 
Options,  customs  would  offer  a  single  user-experience  for  any  interaction  with  any 
customs administrations and EU-wide view on individual customs activities for citizens, 
independently of the language, member-state, or border control point. 

The scale of the impacts is summarized below using scores that compare each option to 
the baseline.  

Page 231 / 291 

 
 
 
 
Information Technology (IT) costs – qualitative view 

For citizens/consumers  

One-off 

Recurrent 

1 

2 

3 

4 

≈ 

≈ 

≈ 

≈ 

≈ 

≈ 

≈ 

≈ 

Page 232 / 291 

 
 
 
 
 
 
 
4.  BENEFITS: PREVENTION OF REVENUE LOSS 

4.1 Understanding the baseline 

The total collected customs duties for the 27 Member States in 2021 is EUR 24.8 billion, 
8% higher than the amounts collected pre-Covid in 2019 and around 15% higher than the 
amounts collected in 2020 by the same Member States. After the deduction of the 25% 
retention rate, this resulted in the transfer to the EU budget of around EUR 18.6 billion as 
traditional  own  resources  (TOR),  to  which  the  contribution  of  the  UK  (EUR  460 
million), related to previous years, is added.  

Customs duties make up 8% of the total 2021 EU budget (including the budget for 
Next  Generation EU) and amounted to 12% of  own resources for 2021.  The average 
rate  of  customs  duties  was  1.23%  in  2021  (value  for  EU27).  If  the  effect  of  the 
products that entered the Union market at zero duty is not considered, the average rate on 
dutiable products is 5.5%. 

Table15:  Average  value  (EUR)  and  average  rate  of  collected  customs  duties  per 
imported item (EU/EU27+UK, 2011-2021) 

Note: 2020*: EU27 + UK considered together 
Source: DG BUDG and CUP-Network data. 

The goods imported in 2021 can be segregated into 3 groups, depending on the amount 
of duty applied. This shows that 7.6% of the goods (measured by value) account for 63% 
of the duties.  

This section analyses the effect on revenue (traditional own resource or TOR) collection 
of  the  different  options,  distinguishing  two  separate  effects:  (1)  prevention  of  revenue 
losses, that is, the potential of the options to reduce the losses that arise when duties are 
incorrectly declared on imports, including e-commerce imports above EUR 150, and (2) 
duties collected as a result of the removal of the EUR 150 duty relief threshold. For the 
revenue losses, the calculation is explained below. 

4.2 Revenue losses  

There is  no  reliable estimation  of the revenue losses, the so-called  customs gap which 
would  be  relevant  starting  point  for  the  baseline  case.  The  Commission  services  are 
working on a methodology to estimate the customs gap, but this work is not yet finished. 
It  may  be  noted  that  a  definitive  figure  would  not  be  available  as  evasion  of  customs 
duties 
is  by  nature  concealed  and  sometimes  well-organised;  modus  operandi 
continuously evolve. 

In  the  absence  of  a  reliable  estimate,  some  elements  of  the  customs  gap  can  be 
considered to assess the potential for the reform options to reduce the loss of revenues in 
imports to the EU. For that purpose, four main contributors to lower payment of customs 
duties and the consequent loss of revenues are considered, namely:  

  Undervaluation:  declaring  the  goods  below  their  correct  customs  value  so  that  the 
basis  on  which  customs  duties  and  VAT  is  applied  is  lower.  Undervaluation  is 
considered more relevant in the categories of goods where duties apply. However,  a 
study conducted by Copenhagen Economics in 2016 estimated that about 65% of the 

Page 233 / 291 

Customs duties2011201220132014201520162017201820192020*2020 (EU27)2021 (EU27)EUR / item93.286.675.067.166.870.167.362.257.935.834.735.5average rate (%)1.28%1.20%1.21%1.22%1.34%1.46%1.37%1.28%1.30%1.39%1.26%1.21% 
 
e-commerce consignments are undervalued for VAT purposes, regardless of the duty 
exemption. (165)   There have also  been cases of systematic undervaluation of certain 
categories  of  goods,  resulting  in  important  revenue  losses  in  customs  duties. (166) 
Fighting  this  phenomenon  requires  EU-wide  analysis  of  declared  imports,  better 
quality  data  (access  to  the  source  of  the  information,  such  as  contracts)  and  the 
possibility  cross  check  different  sources  of  information  (value  given  for  customs 
purposes with value provided for insurance purposes). It requires EU-wide visibility 
and a systematic customs response to tackle supply chains which adapt to detection, 
change modus operandi, shift entry points, etc.  

  Misdeclaration of origin:  declaring  a wrong origin  of  the  goods,  to  benefit from  a 
to  avoid  antidumping  or  countervailing  duties.  OLAF 
preferential  rate  or 
investigations indicate that misdeclaration of origin is particularly relevant (i) in the 
area  of  trade  defence  measures,  because  they  are  country  specific  and  the  anti-
dumping  duties  are  very  high  and,  to  a  lesser  extent,  (ii)  in  imports  from  countries 
with  preferential  tariffs.  Although  the  joint  monitoring  action  of  trade  defence 
measures  by  the  complainant  Union  industry  and  the  relevant  Commission  services 
(OLAF and DG TRADE) helps reducing the fraud in that area, there are indications 
that  fraud  persists.  An  experimental  pilot  project  run  by  OLAF  and  JRC,  using  the 
ConTraffic system (currently Container Status Messages – CSM)  (167) estimated that 
‘there must have been in 2011, for EU27, more than 1 500 cases of false declarations 
of origin which resulted in loss of revenue for the EU for the total value of at least 25 
Mio € and likely to exceed 100 Mio €’.  

  Misclassification of the goods: wrongly classifying the goods to benefit from a lower 
duty  rate  happens  predominantly  in  the  ‘Duty  free  imports’  category,  which 
represents 78% of total imports. A very large number of operators, in order to ensure 
legal certainty on the classification of their imports, apply and obtain Binding Tariff 
Information (BTI) decisions. The valid BTI decisions in 2021 were around 130 000. 
BTI  decisions  are  binding  both  for  the  economic  operator  and  for  the  customs 
authorities. The Commission does not currently have sufficient data to check whether 
operators  do  apply  the  BTI  decisions  upon  import,  but  this  is  expected  to  improve 
within the baseline scenario timeline. Economic operators or other interested parties 
may  consult  currently  valid  BTI  decisions  via  the  EBTI-3  system.  This  public 
database is by far the most viewed of customs systems with a number of annual hits 
exceeding 50 million. 

  Contraband  or  smuggling:  introduction  of  goods  without  declaring  them  to 
customs. This phenomenon is not considered in the calculations below as no general 
method has been found to estimate it. 

(165) Copenhagen Economics (2016) E-commerce imports into Europe: VAT and Customs treatment. 
(166) The largest of OLAF’s investigations concerned imports through the UK between 2013 and 2016. See 
European Court of Justice Case C-213/19 European Commission v United Kingdom of Great Britain 
and Northern Ireland. 

(167)   To tackle this fraud the Commission has developed initially the ConTraffic research prototype and 
later the Container Status Messages (CSM) module of the Anti-Fraud Information System. These tools 
provide information on container routes as well as risk assessment services to customs authorities. The 
systems are used in a pilot exercise to generate  fraud signals  which are sent to the relevant Member 
States based on detected mismatches between the country of origin/dispatch declared by the importer 
and the identified container route. 

Page 234 / 291 

 
 
 
                                                      
4.3 How would the options perform?  

The  core  issue  in  this  case  is  the  improvement  of  EU-wide  customs  financial  risk 
management. In the case of customs duties, the customs declaration currently contains in 
principle  all  the  elements  necessary  for  calculation  of  the  duties.  Data  is  declared  in 
relation  to  each  of  the  main  elements  which  contribute  to  the  duty  calculation  (notably 
currencies, valuation elements, product classifications and origins). The duties have to be 
either  paid  or  guaranteed  before  goods  are  released  and  the  responsible  person  is 
identified in the declaration. Risk management for customs duty risks is more developed 
than  for  non-financial  risks,  although  still  needs  deep  improvement  according  to  the 
European Court of Auditors.  These features lead to specific considerations for financial 
risk management, by contrast with the management of non-financial risks. 

The purely theoretical assessment of the impact of each option on tackling revenue losses 
assigns  the  options  a  score  against  three  elements  that  are  considered  necessary  to 
improve 
the 
aforementioned  phenomena  of  undervaluation,  misclassification  and  wrong  declaration 
of  origin.  The  analysis  focuses  on  three  key  elements  that  would  be  of  very  high 
relevance in improving the situation: 

the  customs  controls  and 

the  effectiveness  of 

tackling 

thereby 

  EU profiling, that is, the possibility to use EU data, as opposed to the baseline where 
mostly national data are considered for calculating reference prices, for instance; 

  Better  quality  data,  that  is,  the  collection  of  more  and  better  quality  data  on  the 
transactions/goods  from  the  operators,  which  can  be  cross-checked  to  detect 
inconsistencies;  the  capacity  to  systematically  integrate  and  cross-reference  other 
relevant data sources (risk information, container status messaging, basic information 
on the history of economic operators, etc) is also relevant. 

  Coordinated action, that is, the possibility to act against fraud at more than national 

level (‘act as one’). 

4.3.1 Option 1  

Under  this  option,  the  Commission  receives  processing  rights  to  Member  State  data, 
allowing analysis and identification of possible fraud trends, and shares the results with 
the  Member  States.  This  analysis  would  be  carried  out  essentially  ‘off-line’,  by  the 
Commission’s  analytics  capabilities.  The  Commission  would  not  participate  directly  in 
operational targeting, which takes place in national systems, but would be able to provide 
EU  risk  profiles  on  economic  operators  for  use  by  the  Member  States.  For  that  reason 
detections of irregularities could increase by 10%. In other words, it could be reasonably 
assumed  that  having  access  to  Union-wide  data  for  risk  management  purposes  would 
allow detecting 1 every 10 fraudulent transactions. 

As  the  risk  analysis  would  be  based  on  the  reformed  customs  processes  and  more 
efficient  and  complete  information  flows  from  economic  operators,  national  customs 
authorities would have more visibility on operators’ customs dealings. The data quality 
would  improve  and  consequently  the  rate  of  detection  should  also  improve.  Given  that 
the new processes focus on the supply chain rather than on specific transactions only, it 
can be reasonable estimated that the detection rate at national level doubles compared to 
option 1, because customs action can serve to detect at least two fraudulent transactions 
from the same operator. 

Page 235 / 291 

 
 
 
The Commission could obtain more feedback on results of the follow-up but would not 
have operational visibility as only the Member States would have access to the granular 
operational  data  (risk  analysis,  hits,  control  decisions,  results)  and  therefore  the 
improvement  delivered  from  central  support  would  be  limited.  Neither  the  ability  to 
detect  gaps  and inconsistencies across  the Member States,  nor the ability to  understand 
performance, would significantly advance (the Commission would know the results but 
not  why  they  occurred,  how  selectivity  was  applied,  what  other  factors  influenced 
operational  decisions,  etc.).  Experience  in  the  development  of  Common  Risk  Criteria 
under the UCC suggests that development of common indicators would continue to take 
approximately a year (non-binding guidance) and approximately 2 years (if formalised as 
an  amendment  to  the  Commission  Implementing  Decision  on  financial  risk  criteria 
minimum harmonisation by the MS).  

Effectiveness and efficiency of implementation across the EU would continue to vary. A 
consistent response across the Member States even to identified fraudulent supply chains 
would  not  be  achieved,  and  detections  would  not  keep  pace  with  adaptation  of  non-
compliant sources (changing of routes, etc.).  

4.3.2 Option 2  

Under this option, the EU Customs Authority receives processing rights to Member State 
data, allowing analysis and identification of possible fraud trends, and shares the results 
with the Member States.  

This analysis would be carried out essentially ‘off-line’, by the Authority, which would 
not  participate  directly  in  operational  targeting,  which  takes  place  in  national  systems, 
but  would  be  able  to  provide  EU  risk  profiles  on  economic  operators  for  use  by  the 
Member  States.  For  that  reason  detections  of  irregularities  could  increase  by  10%.  In 
other words,  it could  be reasonably assumed that having access  to  Union-wide data for 
risk management purposes would allow detecting 1 every 10 fraudulent transactions. 

As  the  risk  analysis  would  be  based  on  the  reformed  customs  processes  and  more 
efficient  and  complete  information  flows  from  economic  operators,  national  customs 
authorities  would  have  more  visibility  on  operators’  customs  dealings,  because  these 
would  operate  under  the  trust  and  check  principle  with  national  IT  systems.  The  data 
quality would improve and consequently the rate of detection should also improve. Given 
that the new processes focus on the supply chain rather than on specific transactions only, 
it can be reasonable estimated that the detection rate at national level doubles compared 
to  option  1,  because  customs  action  can  serve  to  detect  at  least  two  fraudulent 
transactions from the same operator. 

As the risk analysis would be based on the reformed customs processes, the data quality 
and  filtering  of  legitimate  trade  would  improve  and  consequently  the  rate  of  detection 
would also rise by an additional 10%. 

The Authority would centrally coordinate at strategic level joint analyses of intelligence 
and identify Union-wide risks and trends and thereby significantly increase the detection 
of fraud cases. However the effectiveness of this would be limited by the extent to which 
MS  would  agree  to  share  information  received  from  trusted  operators  and  from  e-
commerce platforms, as well as operational risk analysis and control results connected at 
consignment  level.  Thus,  the  effectiveness  and  efficiency  of  implementation  across  the 
EU  would  continue  to  vary,  but  to  a  lesser  extent,  increasing  by  a  further  5%  the 
detection/action against irregularities. 

Page 236 / 291 

 
 
4.3.3 Option 3   

Compared with  Options  1 and 2, this  option improves the information environment for 
the  Commission,  which  would  have  access  to  the  data  in  the  EU  Data  Space  and  this 
would allow a better EU risk profiling on economic operators. For that reason, detections 
of  irregularities  increase  more  than  in  the  previous  options,  by  15%.  Effectiveness  and 
efficiency of implementation across the EU would continue to vary.  

As the risk analysis would be based on the reformed customs processes, the data quality 
would  improve  and  consequently  the  rate  of  detection  would  also  rise  by  an  additional 
15%.  However,  the  possibility  to  have  coordinated  action  at  more  than  national  level 
remains residual. 

In  essence,  it  is  estimated  that  having  a  central  IT  environment  with  Union-wide  data 
would allow detecting three every 10 fraudulent transactions, or three transactions of the 
same fraudulent operator, thereby preventing the loss of revenues. 

4.3.4 Option 4  

Under  this  option,  the  Authority  would  use  the  EU  customs  Data  Space  to  create 
analytics,  designing  operational  targeting  indicators  and  performance  feedback  to  be 
applied to inbound traffic and would provide control recommendations and under certain 
circumstances  even  control  instructions    to  the  Member  States.  These  would  result  in 
high-impact  controls  across  the  Member  States,  and  distribution  of  actions  to  suitable 
intervention  points  (such  as  the  destination  Member  State  according  to  customs 
information) and support convergence of enforcement. It would support mutual training.  
The  scope  of  the  targeting  would  include  all  supply  chain  steps,  as  the  customs 
information environment would have information on all customs processes up to release.  

The  Authority  would  analyse  operational  results  to  provide  periodic  information  and 
indicators for performance of this EU policy (outcomes from customs supervision). This 
information  would  be  systematic  and  granular,  showing  where  actions  had  been  taken 
and the results of EU-supported action. 

The Authority could further improve targeting through a structured collaboration (based 
on  exchange  of  information,  generation  of  intelligence  and  co-operative  operational 
planning) with tax authorities, Europol and OLAF and through participation on behalf of 
EU customs in relevant policy actions, either on the initiative of the Authority, or on the 
initiative of Europol or OLAF. Co-operation between the Authority, Europol and OLAF 
would be described in the relevant legislation. 

Outcomes  under  this  option  would  therefore  be  improved  compared  with  Options  1-3. 
The  combination  of  capabilities  (EU  profiling,  better  data  and  EU  co-ordination) 
reinforce each other. Option 4 combines the speed, focus and critical mass advantage of 
the  operational  Customs  Authority  setting  with  direct  management  of  the  customs 
information  environment  and  therefore  leads  to  a  better  result  in  terms  of  revenue 
collection. 15% increase in the detection rate due to EU risk profiling would add to the 
15%  increase  due  to  better  quality  data  and  10%  increase  in  effectiveness  due  to 
coordinated action. 

Page 237 / 291 

 
 
 
BENEFITS:  SINGLE MARKET AND SUSTAINABILITY (PROTECT AS ONE) 

The customs reform options would contribute in different ways to supporting delivery of major 
EU policies in the area of the Single Market and sustainability.  

This covers a wide range of specific initiatives, prohibitions and restrictions. As there are more 
than 350 pieces of legislation of relevance for customs border activities, and it is not possible 
(or necessary) to assess each individually. In this Annex, the approach taken is to review the 
impact of the options for three different cases in detail.  

  The Toy Safety case shows why the reform options have an impact as such 

  The Ecodesign case builds on this illustration to show how the reform options would 
work  against  a  broader  range  of  product  compliance  priorities  and  includes  some 
quantification scenarios based on the availability of relevant information in this case.  

  The  Bamboo  case  takes  a  deeper  dive  into  one  very  specific  product  issue  to  give  a 
more  comprehensive  illustration  of  how  customs  and  non-customs  issues  interact  and 
looks more closely at specific dimensions including the information quality challenge, 
and at what specifically happened operationally in this case. 

The  analysis  is  based  on  the  features  of  each  reform  option  as  described  in  Chapter  5  of  the 
Impact Assessment body and Annexes 7 and 8, taking account of how they are integrated and 
work  together  in  each  specific  option.  As  these  cases  are  mainly  about  better  protection,  the 
emphasis is on how the features enable better detection, through progress on specific objectives 
1, 4 and 5 respectively (enabling better risk management, in a better information environment, 
‘as one’ wherever goods enter the EU). The descriptions are not replicated here.  

The  examples  selected  could  equally  have  been  replaced  with  other  important  areas  such  as 
REACH, forced labour, waste shipments, F-gas, Intellectual property rights, commercial 
policy,  cultural  goods,  or  deforestation.  Further  examples  would  highlight 
the 
comprehensive value of customs reform, but would not change the relative assessment of the 
policy options.   

As  different  stakeholders  will  have  interests  in  different  cases,  each  case  is  described  in  a 
manner that it can be read independently. This involves some repetition of key themes as the 
principles of reform apply in essentially the same way across each case.  

In practice the customs union needs to support many cases at once. Looking across the range of 
cases  (each  of  which  needs  specific  expertise  and  co-operation  approaches),  it  is  possible  to 
better understand the relevance of critical mass.  

The  summary  indicators  presented  after  each  use  case  are  used  to  compile  the  tables  in 
Chapters 6 and 7 in the Impact Assessment. The qualitative scoring system rates the additional 
benefit on a scale from * to ***** as follows: 

Qualitative rating  Benefit impact (additional benefits compared with baseline) 

* 
** 
*** 
**** 
***** 

low 
low-moderate 
moderate 
moderate-high 
high 

238 

 
 
 
5.1 Toy Safety 

5.1.1 Context and customs relevance: 

The Toy Safety Directive (2009/48/EC) lays down the safety and other requirements that toys 
must  meet  before  they  can  be  placed  on  the  market  in  the  EU  (irrespective  of  whether  they 
were produced inside or outside the EU). Market surveillance is carried out in accordance with 
Regulation 2019/1020.  

Customs  controls  are  carried  out  under  the  Union  Custom  Code  before  products  enter  the 
Union market. This means that Customs is the only barrier against entry of non-compliant toys 
produced outside the EU, and customs reform has clear potential to complement and reinforce 
the practical implementation of toy safety policy.  (168)   

The safety risks in question are very significant. Researchers have estimated that exposure, for 
instance  to  endocrine  disruptors  can  lead  to  serious  developmental  harm  even  with  very  low 
doses,  and  to  substantial  health-related  societal  costs  in  the  EU  between  EUR  46  and  288 
billion per year (169). Risks are often only visible long term. Parents are generally unaware of 
these risks in toys or of their severity. The importance of preventing them entering the supply 
chain in the first place is clear. 

As  regards  non-compliance,  data  from  the  EU  Rapid  alert  system  (Safety  Gate/RAPEX) 
consistently shows toys as one of the top categories of dangerous products reported as found on 
the EU market. Over 2016-2021, toys represented 27.4% of total Safety Gate alerts. Most alerts 
were serious risks (mainly chemical and choking).  

Imports are a serious part of the problem. In the period mentioned above, 85.6% of reported 
dangerous  toys  originated  from  China.  An  earlier  analysis  indicated  that  imported  products 
represent  30%  of  EU  consumption  but  75%  of  products  presenting  serious  risks (170)  as 
reported  in  RAPEX  /  Safety  Gate  from  2010  to  2016.  Furthermore,  the  Commission 
Communication on Chemicals Strategy for Sustainability Towards a Toxic-Free Environment 
notes that almost 30% of alerts on dangerous products (not only Toys) on the market involve 
risks  due  to  chemicals.  Of  these,  almost  90%  of  those  products  coming  from  outside  the 
EU. (171) 

Online sales of toys are increasing and reach over 25% in some EU countries. (172) Consumers 
and  business  alike  have  called  for  better  control  of  online  shops. (173)    In  February  2021,  the 
European consumer organisation BEUC found that in its sample online purchases, 66% of 250 

(168)  

The  upcoming  proposal  for  a  Toy  Regulation  (TR)  will  aim  to  further  strengthen  the  protection  of 
children against possible risks in toys, and further complete the Single Market for toys. See TSD evaluation . 
See  also:  Binder  E.  and  Huemer  M.-A.  (2021).  The  EU  Toy  Safety  Directive,  Briefing  by  the  European 
Parliamentary Research Service . 

(169)  

As mentioned in the Toy Regulation impact assessment – see  I. Rijk, M. van Duursen, and M. van den 
Berg, Health cost that may be associated with Endocrine Disrupting Chemicals  — An inventory, evaluation 
and way forward to assess the potential health impact of EDC-associated health effects in the EU, Institute for 
Risk Assessment Sciences, University of Utrecht, 2016. 

(170)  
(171)  

Commission Staff Working Document Refit Evaluation SWD(2017)469 final, p. 41. 
Communication from the Commission to the European Parliament, the Council, the European Economic 
and  Social  Committee  and  the  Committee  of  the  Regions  Chemicals  Strategy  for  Sustainability  Towards  a 
Toxic-Free Environment, COM(2020) 667 final. 

(172)  
(173)  

See for instance https://www.spring-gds.com/support/market-insights/toys-market-insights/) 
The CLP Impact Assessment concluded that 23% of the toys assessed in online sales were non-compliant 
(Draft  of  Technical  Support  to  the  Commissions  Impact  Assessment  for  the  Revision  of  the  Regulation  on 
Classification, Labelling and Packaging of Substances and Mixtures (CLP), page 113).  

Page 239 / 291 

 
 
                                                      
tested  products  were  unsafe. (174)    As  EU  companies  sell  a  significant  amount  via  their  own 
websites  it  is  likely  that  compliance  in  online  sales  from  outside  the  EU  is  significantly 
lower.  

The SME  relevance  of the EU toy industry is  notable:  in  2020, 99% of the companies were 
SMEs,  employing  around  two  thirds  of  employees  in  the  sector. (175)  This  adds  a  clear  SME 
dimension to the benefits of reducing unfair competition from non-compliant imports through 
better enforcement.  

Other relevant features of the Toy Safety policy domain include the need to respond quickly 
to  new  risks  (short-term  demand  ‘hype’  can  mean  that  non-compliant  toys  flood  the  market 
quickly);  the  need  to  ensure  effective  controls  at  the  external  borders  of  all  Member  States 
and  the  resource  pressures  faced  by  national  market  surveillance  authorities.  Consumer 
associations  and  business  both  call  for  better  collaboration  between  enforcement  authorities, 
including customs and MSAs, across Member States. (176) 

The  introduction  of  a  digital  product  passport  embedding  the  declaration  of  conformity 
(available to customs and required for release to free circulation) for Toys should help deepen 
this  collaboration  and  make  it  easier  for  MSAs  and  customs  authorities  to  determine  which 
products  are  non-compliant.  The  product  passport  could  be  issued  only  if  it  contains  a 
declaration  of  conformity  and  other  required  documents;  customs  would  be  able  to  check 
during import procedures whether products are accompanied by a valid passport. Beyond these 
automated  checks,  risk-based  physical  controls  by  customs  will  remain  necessary  to  identify 
non-compliant toys in cooperation with the competent market surveillance authorities. 

Of  particular  relevance  in  this  case  is  the  complementary  impact  expected  from  other 
regulatory initiatives. Under Article 4 of the Market Surveillance Regulation (177) toys - as 
products  with  a  high  risk  of  non-compliance  -  can  only  be  placed  on  the  EU  market  by  an 
economic  operator  established  in  the  EU  (e.g.  manufacturer,  importer  or  authorised 
representative  of  these  toys).  Economic  operators  without  an  establishment  in  the  EU,  thus 
have  to  appoint  someone  to  handle  MSR  compliance.  Fulfilment  service  providers  can  also 
have  obligations  for  toys  as  an  established  operator  of  last  resort  (if  none  of  the  others  is 
present  in  the  EU)  (Article  4  (2)  d)).  The  proposed  General  Product  Safety  Regulation 
(GPSR)   (178)  and  the  Digital  Services  Act  (DSA) (179)  envisage  a  further  strengthening  of  the 
compliance environment and of the responsibilities on inter alia e-commerce intermediaries to 
take measures to prevent online sale of non-compliant products.    

(174)  

See https://www.beuc.eu/publications/beuc-x-2021-

004_is_it_safe_to_shop_on_online_marketplaces.pdf) 

(175)  
https://globaltoynews.com/2021/02/05/the-european-toy-market-2020-and-digital-trends-2021/ 
(176)   most  recently,  in  the  Trade  Contact  Group  of  July  12th,  2022,  the  European  Consumer  Association 

BEUC suggested that a customs Agency should co-ordinate customs and market surveillance checks 

(177)  

Regulation (EU) 2019/1020 of the European Parliament and of the Council of 20 June 2019 on market 
surveillance  and  compliance  of  products  and  amending  Directive  2004/42/EC  and  Regulations  (EC)  No 
765/2008 and (EU) No 305/2011, OJ L 169 of 25.06.2019. 

(178) European Commission (2021). Proposal for a Regulation of the European Parliament and of the Council on 
general  product  safety,  amending  Regulation  (EU)  No  1025/2012  of  the  European  Parliament  and  of  the 
Council, and repealing Council Directive 87/357/EEC and Directive 2001/95/EC of the European Parliament 
and of the Council, COM(2021) 346 final of 30.06.2021. 

(179) Regulation (EU) 2022/2065 of the European Parliament and of the Council of 19 October 2022 on a Single 

Market For Digital Services and amending Directive 2000/31/EC (Digital Services Act)  

Page 240 / 291 

 
 
 
                                                      
 
In this context, this case study looks at how customs reform policy options would improve 
the contribution of risk-based import supply chain supervision to reducing the number of 
non-compliant  and  unsafe  toys  entering  the  EU  market,  including  via  online  sales,  and  more 
generally supporting the functioning of the internal market for toys and the competitiveness of 
EU industry including SMEs.  

In  relation  to  online B2C consignments, in  particular, it is  important  to  note that these pass 
directly from the non-EU vendor to the consumer. The only available intervention channel 
for detection of specific cases is de facto the customs system (national  market surveillance 
authorities are not able to intervene in third countries and presumably would not visit private 
EU homes to consider the compliance of an online to purchase by an individual). Any efforts to 
tackle these B2C flows systematically will depend in part on the capacity to identify samples in 
the customs data flows and intercept them en route. 

A  final  relevant  point  of  context:  non-compliant  suppliers  will  continuously  adapt  to 
detection  by  changing  their  supply  chains  and  entry  points.  Systematic  detection  of  serious 
players is not simple. It demands sustained, adaptive targeting using all available information 
sources in cross-analysis.  

5.1.2 How would the options perform? 

This comparison is based on the features of each reform option as described in Chapter 5 of the 
Impact Assessment body and Annexes 7 and 8. The descriptions are not replicated here. This 
section shows why the features have an impact.  

It  is  assumed  in  all  options  that  Toy  Safety  is  selected  as  a  policy  priority  for  customs 
supervision and risk management, proposed by the Commission and adopted at Council level.  

Option 1 

The Commission  (with the support of its  analytics capabilities per the baseline,  and with  the 
new  political  mandate  above)  prepares  a  common  risk  management  approach  and  co-
operation  framework  to  help  national  customs  and  market  surveillance  authorities  to  work 
together. Market surveillance authorities are encouraged to share risk information with customs 
for targeting. Common targeting indicators are prepared, taking approximately a year for non-
binding guidance and approximately 2 years if the indicators are formalised as a Commission 
Implementing Decision for binding implementation to provide for minimum harmonisation by 
the Member States. The start date for this activity would depend on available resources. Option 
1  does  not  create  a  new  operating  capacity  on  the  customs  side,  and  does  not  increase  the 
number of priorities which can be pursued in parallel. For the purposes of this assessment it is 
presumed  to  start  operationally  in  Y3  (the  third  year  after  adoption  –  see  section  2  for 
Assumptions for phased deployment of the reform).  

Most targeting would continue to be done in national customs declaration systems on the same 
basis as today, with some strategic support from the Commission’s analytics capabilities. In the 
specific  case  of  advance  cargo  information  flows,  the  shared  ICS2  system  could  help 
improve  the  identification  of  potentially  non-compliant  supply  chains  before  consignments 
arrive  at  the  border.  However,  the  contribution  of  ICS2  would  be  limited  by  its  data  scope 
(classification information – essential in the identification of product types - is limited to HS6 
codes  and  is  not  obligatory  for  certain  flows,  meaning  not  all  toy  flows  or  toy  passport 
scenarios would be identifiable). It would also be limited by the data governance context (the 
scope and scale of national participation and in data integration in this analytics project would 
be voluntary). Additional data on manufacturers would not be available in ICS2. 

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New and better data would be provided from e-commerce platforms and customs could use 
this  to  improve  controls  (assuming  this  data  is  available  as  from  Year  4).  However,  each 
national  customs  authority  would  continue  to  carry  out  risk  analysis  based  on  its  own 
capabilities, and the data would remain fragmented across MS rather than exploited as a full 
EU supply chain picture. The extent to which the new e-commerce data would be integrated in 
national processes would vary.  

Improved  transparency  from  traders  participating  in  a  Trust  and Check  procedure  could  help 
with filtering out reliable traders, thereby reducing the need for interventions on those traders 
at  the  border.  However,  the  new  processes  enabling  these  facilitations  would  be  run  only  in 
national environments and the timing and scope of their delivery would vary. The development 
of Trust and Check facilitations themselves are assumed to be phased in over Years 6-9 – see 
section  2.  In  practice,  the  conditions  in  this  option  would  not  enable  a  significant  systematic 
shift in how trusted traders are handled across the EU for such non-financial formalities within 
the  assessment  period  (it  limits  the  progress  which  might  be  possible  under  the  co-operation 
framework with a more joined-up approach).  

This option would not give a strong basis for a more systematic EU follow-up at the border. It 
would not be possible to ensure a ‘block’ (or ‘do-not-transport’) on future consignments for the 
full  external  border  in  the  customs  systems  as  the  advance  cargo  information  would  not  be 
systematically  enriched  with  the  more  detailed  data  which  is  handled  in  the  national 
environments.  

Overall, a small improvement in detection of specific consignments and supply chains would 
nonetheless  be  delivered.  Effectiveness  and  efficiency  of  controls  across  the  EU  would 
continue  to  vary,  and  detections  would  not  keep  pace  with  adaptation  of  non-compliant 
sources. Customs would not be in a position to organise quick, co-ordinated pan-EU responses 
to  rapidly  emerging  (new  ‘hype’)  threats.  The  national  investments  in  the  new  information 
flows would be under-exploited, and the ability of MS to protect each other and the full single 
market  in  common  customs  supervision  would  not  significantly  increase  compared  with  the 
baseline.  

Option 2 

In this option, the main difference from Option 1 is that a common risk management approach 
is developed and co-ordinated by the Authority.  

The Authority would work with market surveillance authorities on the development of the co-
operation  framework.  It  would  host  multi-disciplinary  events  and  ongoing  processes  to 
engage both customs and market surveillance authorities in developing a common co-operative 
supervision strategy for toy safety issues. It would arrange joint analytical projects involving 
both  customs  and  market  surveillance  authorities,  to  analyse  all  available  information  using 
available capabilities (primarily the tools developed for the analytics capabilities, notably those 
in  ICS2  analytics  and  Surveillance).  It  would  promote  the  central  sharing  by  market 
surveillance authorities of risk information for common use in this context.  

The  Authority  would  use  this  work  to  prepare  inputs  to  be  used  by  the  Commission  in  its 
proposal for common risk criteria (as an Implementing Act under the UCC). Once the criteria 
are adopted (following a vote by the Member States) the Authority would elaborate operational 
risk  indicator  materials  to  support  the  national  implementation  of  the  criteria.  It  would  also 
configure  operational  indicators  to  be  used  in  ICS2  analytics.  The  Commission  would  make 

Page 242 / 291 

 
 
 
any necessary proposals for implementing acts to support information sharing and processing 
in this context.  

The  effectiveness  and  efficiency  of  this  would  be  limited  by  the  extent  to  which  MS  would 
agree  to  share  information  which  they  received  directly  in  their  national  environments  from 
trusted  operators  and  from  e-commerce  platforms.  Progress  would  also  be  limited  by  the 
division  of  responsibilities  for  data  governance  in  this  mode.  Data  protection  arrangements 
would  need  to  be  agreed  across  the  different  systems  and  the  process  for  Member  States 
customs (as data controllers) agree to include their flows in the scope of a targeting project for 
toys  would  be  lengthy  and  duplicative.  The  Authority  would  not  have  the  full  EU  customs 
picture  in  terms  of  data  provided  to  customs  or  in  terms  of  risk  analysis  or  control  results 
arising. Outside of the advance cargo information, the Authority would not be in a position to 
prepare,  test  or  implement  common  indicators  directly  on  the  real-time  flow  of  customs 
operations.  As  with  Option  1,  it  would  not  be  possible  to  ensure  a  ‘block’  on  future 
consignments across the border in the customs systems  

Nonetheless,  as  compared  with  Option  1,  the  Authority  would  be  able  to  co-ordinate  an 
important  step  forward  in  common  understanding  and  approach  by  working  closely  with 
Member States customs authorities and benefiting from the political prioritisation of this work. 
The involvement of all Member States directly in the structure of the Authority, coupled with 
the political mandate from the Council, would improve ‘buy-in’ to the Authority’s support role. 
Effectiveness  and  efficiency  would  also  be  improved  by  enabling  the  Authority  to  flag 
problems to platforms as an EU actor.  

Option 3 

From  the  governance  perspective,  this  option  would  work  like  Option  1:  The  Commission 
(with the support of its Joint Analytics Capabilities per the baseline, and with the new political 
mandate) prepares a  common risk management approach and co-operation framework to 
help national customs and market surveillance authorities to work together. 

Compared  with  Option  1,  Option  3  has  however  a  much  better  data  management 
environment for policy action. This would enable several important changes: 

  The  Commission  would  arrange  joint  analytical  projects  involving  both  customs  and 
market surveillance authorities, to analyse the full EU picture for all relevant supply chains. 
This  picture  would  systematically  include  data  from  all  customs  processes,  risk 
information,  risk  analysis  and  control  results.  It  would  be  able  to  systematically  include 
such  other  information  as  may  be  made  available  from  the  central  register  of  Digital 
Product Passports for toys.  

  The Commission would use this work in preparing its proposal for Common Risk Criteria 
in an Implementing Act under the UCC. Once the criteria are adopted (following a vote by 
the Member States) the Commission would elaborate operational risk indicators for direct 
application on the EU data flows. It would work closely with the Member States on this. 

  The Commission would arrange for risk information from Market Surveillance authorities 
(for example – non-compliant manufacturers whose toys were detected on the market) to be 
integrated directly in EU-wide strategic and operational risk analysis. This would enable a 
systematic  approach  to  be  taken  to  tackling  these  supply  chains  wherever  they  enter.  It 
would  also  enable  detection  of  related  non-compliant  supply  chains  (identifying  sources, 
different customers, and other potentially non-compliant cases not yet discovered).  

Page 243 / 291 

 
 
 
These factors would lead to a significant improvement in the quality of risk analysis, and the 
combination  of  the  EU  visibility  with  the  assignment  of  liability  to  the  importer  role  would 
strengthen the systematic value of intervention  – customs and market surveillance authorities 
would both get a better return from their controls and inspections.  

However  this  option  has  some  limitations  derived  from  the  governance  model.  The 
Commission’s capacity to support and deliver such deep operational work, and to conduct the 
necessary  data  governance  operations  and  agreements  with  the  Member  States,  is  limited.  It 
would  not  be  in  a  position  to  take  on  a  full  operational  co-ordination  mandate  without  a 
significant expansion in staff numbers. This would equally be an issue in the development and 
implementation  of  the  co-operation  framework  and  supervision  strategy  for  toy  safety  issues 
with Market Surveillance authorities – the Commission could host a limited number of multi-
disciplinary  events  but  would  not  have  the  capacity  to  support  a  sustained  operational  co-
operation.  The  significant  investment  in  the  data  management  environment  may  be  under-
exploited,  and  the  governance  structure  would  lack  an  actor  with  the  clear  organisational 
mandate  and  critical  mass  needed  to  organise  a  timely  EU  adaptation  to  adaptive  non-
compliant suppliers. 

Option 4 

This  option  combines  the  governance  reform  of  Option  2  (Authority)  with  the  data 
management reform of Option  3 (dataspace). These elements  are mutually  reinforcing in  this 
context, as the Authority would have the organisational mandate and operational critical mass 
needed to ‘drive’ a sustained, systematic approach to targeting non-compliant toy imports. 

The Authority would work with market surveillance authorities on the development of the co-
operation  framework  and  would  assign  a  file-manager  for  this  purpose.  It  would  host 
sustained  multi-disciplinary  processes  to  engage  both  customs  and  market  surveillance 
authorities  in  developing  a  supervision  strategy  for  toy  safety  issues.  It  would  arrange  rapid 
mutual  training of  experts  on concepts  and on the shared EU customs tools.  The supervision 
strategy  would  clarify  the  situations  in  which  a  control  would  be  appropriate,  designed  for 
maximum  impact  so  that  control  results  produce  actionable  cases  for  known,  and  newly 
discovered,  supply  chains.  This  would  also  provide  for  structured  sampling  in  e-commerce 
flows  (a  major  gap  area  currently),  and  distribution  of  actions  to  suitable  intervention  points 
(such  as  the  destination  Member  State  according  to  customs  information)  to  support 
convergence  of  enforcement  across  the  EU.  It  would  provide  for  scenarios  where  a  direct 
operational  ‘do-not-transport’  signal  in  the  risk  analysis  systems  would  be  justified.  The 
Authority  would  also  promote  the  central  sharing  by  market  surveillance  authorities  of  risk 
information and take care of its integration in operational analysis.  

It would underpin this work with joint analytical projects involving both customs and market 
surveillance  authorities,  to  bring  together  market  surveillance  knowledge  and  customs 
knowledge and analyse all EU imports (including e-commerce flows) to initially identify good 
and bad supply chains (starting point). The analysis would systematically include data from all 
customs processes, risk information, risk analysis and control results.  

The Authority would be able to directly design, test and implement operational indicators to 
be used on EU-level data flows. With the richer operational data picture in this option, which it 
manages at EU level, the Authority would be able to significantly improve the discovery of bad 
supply chains. It would arrange signals to be available at the right time for action (including if 
necessary before loading, potentially saving transport and control efforts). 

Page 244 / 291 

 
 
The Authority would analyse operational results to provide periodic information and indicators 
for  performance  of  EU  Toy  Safety  policy  (outcomes  from  customs  supervision).  This 
information  would  be  systematic  and  granular,  showing  where  actions  had  been  taken  for  a 
given  product  and  highlighting  the  added  value  of  EU  action  in  protecting  EU  business  and 
consumers  from  harmful  toy  traffic.  It  would  support  the  Commission  in  its  evaluation  of 
performance and policy delivery and adapting the Authority work plan. 

The  Authority  would  take  a  continuous  improvement  approach  to  indicators,  working  with 
Member States and Market Surveillance authorities to understand which indicators are working 
well,  less  well,  and  why.  It  would  take  adapt  them  immediately  to  new  trends  or  modus 
operandi.  It  would  also  be  able  to  prepare  deeper  EU  risk  indicators  to  better  detect  non-
compliant toys (it could organise projects for example to detect cases where a toy passport is 
present but its content or its context suggests a high risk that it was not properly issued, based 
on advanced data analytics methods and deeper datasets than available to it under option 2, and 
the necessary critical mass in terms of data science expertise).  

In  the  case  of  an  urgent  Toy  safety  priority  targeting  operation  (e.g.  seasonal  ‘hype’),  the 
Authority  would  arrange  for  immediate  deployment  of  customs  targeting,  pan-EU,  and  rapid 
delivery of sample cases for enforcement (indicator would be prepared in hours or days rather 
than months or years). 

This option would also help reduce the delays or blockages which would arise in other options 
from  data  fragmentation  and  data  governance  issues.  As  the  Authority  would  be  directly 
managing  the  data,  it  would  able  to  get  it  used  much  more  quickly,  comprehensively  and 
efficiently  than  would  be  the  case  in  Options  1-3.  The  Authority  would  have  the  relevant 
operational  mandate  and  controller  role  needed  to  initiate  and  manage  processing  operations 
within  well-defined  legal  parameters.  This  would  reduce  the  need  for  multiple  duplicative 
assessments and agreements on the same processing operation.  

In this Option, it would also be easier for the Authority to arrange the integration of valuable 
new data sources. In particular, as e-commerce platform information would be available in the 
dataspace in  this option, the Authority would systematically integrate it at  consignment level 
and  operator  (importer)  account  level.  The  Authority  would  also  rapidly  prepare  an 
interoperability ‘mini-app’ to better exploit Toy passport data obtained via the single window 
(going  beyond  presence/absence  of  passport)  in  all  relevant  data  flows.  Economic  Operators 
would also be able to include Toy Passport information and product identifiers in their central 
customs accounts, removing the need for transactional checks for trusted operators and freeing 
market surveillance and customs resources.  

If  necessary,  the  Authority  could  bring  forward  inputs  to  be  used  by  the  Commission  in  a 
proposal  for  common  risk  criteria  as  an  Implementing  Act  under  the  UCC.  However  given 
the direct uniform implementation of indicators, the granular performance visibility, it may be 
that  this  step  would  not  be  necessary  in  this  specific  case.  The  agile  the  use  of  common 
indicators  by  the  Authority  may  be  sufficient.  As  with  Option  2,  the  involvement  of  all 
Member  States  directly  in  the  structure  of  the  Authority  would,  coupled  with  the  political 
mandate from the Council, would improve ‘buy-in’ to the Authority’s operational support role.   

Overall,  outcomes  under  this  option  would  be  significantly  improved  compared  with  1-3.  It 
enables a larger step forward in the common detection of non-compliant toy supply chains, a 
more  systematic  approach  to  be  taken  to  tackling  these  wherever  they  enter  the  EU,  and  a 
better  detection  of  related  non-compliant  supply  chains  (identifying  sources,  different 
customers, and other potentially non-compliant cases not yet discovered).  

Page 245 / 291 

 
 
This would further strengthen the systematic value of intervention and the return that customs 
and market surveillance authorities would get from their controls and inspections. The impact-
per-inspection for market surveillance authorities would be increased and the number of wasted 
inspections  (which  produce  no  systemic  impact)  would  be  reduced.  The  very  limited  MSA 
resources  would  be  better  targeted  and  re-oriented  towards  meaningful  supply  chain 
enforcement  covering  more  supply  chains  more  intelligently  even  if  only  with  the  same 
number of checks. Any follow-up action, including requests for removal of suppliers from e-
commerce  platform,  product  recalls  or  market  alerts,  investigations,  penalties  or  denials  of 
authorisation to load or import for persistent offenders would be based on the richer EU-wide 
data  picture,  and  the  importer  liability  provisions.  This  would  help  overcome  differences  in 
visibility of import supply chains across different national MSAs. It would also enable a better 
return on investment in the data management environment. 

Compared with Options 1-3, this option will also reduce the duration of exposure to this harm 
for children and its impact and increase the likelihood that some demand will shift to compliant 
products (including legitimate EU SMEs). 

Page 246 / 291 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
5.1.3  Summary indicators 

The indicators below assess the benefits qualitatively in terms of the degree of improvement on 
the baseline (structure as signalled in section 1.2). The overall baseline assumption is that non-
compliance continues to be an important issue (new sources continue to emerge). 

BENEFITS (Qualitative) 

Effectiveness  

Overall (General Objective) 

SO 1 – Strengthen EU customs risk management 

SO 4 – Data access/use for strategic customs action 

SO 5 – Enable the Customs Union to act as one 

Protection outcomes - Single Market and Sustainability: 

Consumers:  Reduced child health risk  

Consumers:  Reduced non-compliant e-commerce imports 

Business and Trade: Reduce unfair competition for EU 
industry and SME (reduced imports of non-compliant toys) 

Efficiency 

Avoided unnecessary inspections and controls; transfer of 
effort to higher impact interventions 

Coherence with other EU policy objectives 

Toy Safety  

Market Surveillance Regulation 

Digital Services Act 
Chemicals Strategy (a Toxic-Free Environment) 

Fundamental rights (detection of toys with privacy risks) 

Strategic capability 

Co-operation framework support 

Strategic planning support 

EU-wide trade flow visibility 

EU-wide performance visibility 

Adaptability (time to market) 

1
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o
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O

* 

* 

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** 

** 

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2
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** 

** 

*** 

** 

** 

** 

3
n
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p
O

4
n
o
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p
O

*** 

**** 

*** 

** 

**** 

**** 

** 

** 

** 

**** 

**** 

**** 

** 

*** 

**** 

*** 

*** 

*** 

* 

* 

*** 

** 

** 

** 

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***** 

**** 

**** 

***** 

***** 

* 

* 

** 

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**** 

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***** 

***** 

**** 

**** 

*** 

***** 

Page 247 / 291 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
5.2 Eco-design and General Product Safety 

5.2.1 Context and customs relevance: 

This use case concerns policies in two groups: Ecodesign and General Product Safety. 

improve 

The Commission's proposal  for an  Ecodesign for Sustainable Products Regulation aims  to 
significantly 
the  circularity,  energy  performance  and  other  environmental 
sustainability  aspects  of  products.  It  enables  performance  and  information  requirements  for 
almost all categories of physical goods placed on the EU market. This is a much wider range of 
products,  compared  to  the  current  Directive  on  energy-related  products.  The  problem  it 
addresses is that consumption and production are not sustainable and not adequately addressed 
by existing EU product and internal market rules. Non-compliance remains a significant issue.  

The Regulation would improve the information environment for the policy. The digital product 
passport  would  store  relevant  sustainability  information,  with  a  central  register  as  back-up 
(indexing  rather  than  directly  storing  the  data).  It  would  also  improve  implementation 
governance  by  enabling  prioritisation  and  grouping  of  products  for  development  of  product-
specific  measures  based  on  EU  added  value  (product  by  product,  not  all  at  once).  It  would 
provide  for  core  indicators  and  for  monitoring  of  results.  Member  States  would  implement 
biennial plans for their priorities.  

The relevance of imports to the problem has not been directly quantified.  However, evidence 
shows  for  example  that  a  large  amount  of  imported  goods  are  not  compliant  with  chemical 
legislation. (180)  More  broadly,  the  Commission’s  Impact  Assessment  for  the  Sustainable 
Products  Regulation  proposal  highlighted  how  ‘the  EU  is  a  net  importer  of  embedded 
environmental impacts in traded goods’. (181) It is clear from that assessment that import flows 
are highly relevant to the Ecodesign objectives. 

The  General  Product  Safety  Directive  defines  EU  Rules  on  product  safety.  It  applies  to 
consumer products when there are no specific provisions with the same objective in the rules of 
EU  Law  governing  the  safety  of  the  products  concerned.  Currently,  the  proposed  General 
Product Safety Regulation (GPSR), in line with the New Consumer Agenda of 2020, aims to 
update and modernise the general framework for the safety of non-food consumer products, to 
preserve its role as a safety net for consumers, to adapt the provisions to challenges posed by 
new technologies and online selling; and to ensure a level playing field for businesses.  

The impact assessment for the proposed GSPR shows that online sales increased steadily since 
the current Directive’s adoption (182). Parcel traffic imports to the EU has risen very rapidly – 

(180) Commission  Staff  Working  Document  –  Impact  Assessment  accompanying  the  document  Proposal  for  a 
Regulation  of  the  European  Parliament  and  of  the  Council  establishing  a  framework  for  setting  ecodesign 
requirements  for  sustainable  products  and  repealing  Directive  2009/125/EC,  SWD(2022)  82  final,  part  3/4, 
page 164: REACH and CLP enforcement report: up to 28% of imports are not compliant with REACH and 
the  Classification,  Labelling  and  Packaging  (CLP)  Regulation,  CEFIC  (European  Chemical  Industry 
Council) report 2020: 80 % of non-compliant articles, containing banned or restricted chemicals comes from 
outside  the  EU/EEA  ,  Commission  Communication  on  Chemicals  Strategy  for  Sustainability  Towards  a 
Toxic-Free Environment : almost 30% of the alert. 

(181) Ibid, p 166. 
(182)  

In  2002  only  9%  of  Europeans  purchased  online,  while  over  70%  of  them  shop  online  at  the  time  of 
publication. In the EU-27, retail sales via mail order houses or the Internet in April 2020 increased by 30% 
compared to April 2019, while total retail sales decreased by 17.9%. 

Page 248 / 291 

 
 
 
                                                      
from an estimated 150 million low value parcels imports in 2015 to an estimated EUR 2 billion 
in  2021.  There  are  particularly  important  challenge  relating  to  these  sales. (183)  Market 
surveillance authorities have difficulties in sampling and testing (due to lack of physical access 
to products) and in finding and contacting traders selling through online marketplaces. Product 
data in online listings is sometimes insufficient (no images of labels, bad quality pictures, and 
no technical data). Moreover, even where Member States have taken measures to recall unsafe 
products, investigations show that recalled products often continue to be sold or to reappear on 
the market in online sales channels.  

The  key  issue  to  consider  in  this  context  (which  is  quite  similar  to  the  Toy  Safety  case  in 
principle)  is  how  a  customs  union  reform  might  work  in  synergy  for  the  delivery  of  these 
policies  by  helping  to  better  identify  products  before  they  are  placed  on  the  market,  and  in 
particular to better identify and more consistently tackle non-compliant e-commerce supplies.  

The harm, and potential savings, addressed by these policies are significant. To take just 
one  example,  many  dangerous  COVID-19  related  products  (e.g.  dangerous  masks,  hand 
sanitisers)  were  found  online  -  by  22  October  2020  they  represented  16%  of  all  COVID-19 
notifications in Safety Gate/RAPEX from the beginning of the COVID-19 crisis.(184)  

In this case, some relevant quantitative information is available for both policy groups. 

The  latest  Ecodesign  Impact  Accounting  Annual  Report  (EIAR  2021,  for  all  products 
regulated under Ecodesign, Energy Labelling, ENERGY STAR* and Tyre Labelling) provides 
the following data: (185)  

  The  combined  measures  entail  an  estimated  EUR  63  billion  (5%)  saving  in  2020  on 
consumer expenditure (EUR 80 billion energy cost saving, EUR 7 billion consumables 
saved, net of EUR 25 billion extra acquisition costs).   
In  2030  this  increases  to  EUR  125  billion  (8%).  The  consumer’s  monetary  saving  is 
estimated to be 0.4% (in 2020) and 0.9% (in 2030) of the GDP of the European Union 
(13 300 billion in 2020). 

 

 

  As regards the competitiveness impact on EU industry, the report suggests that business 
revenues  increase  by  EUR  22  billion  in  2020  and  EUR  31  billion  in  2030  (5-6%), 
implying an increase of 323 000 direct jobs in 2020 and 433 000 in 2030.  
[The  2020  EIAR  indicated  an  average  household  saving  of  EUR  210  in  user 
expenditure in 2020, expected to increase to EUR 350 per year in 2030 compared to a 
scenario  without  Ecodesign  and  Labelling  measures.  This  considers  only  the  direct 
savings  for  products  used  in  households.  Additional  financial  benefits  for  households 
might  arrive  from  the  savings  in  the  tertiary  and  industry  sectors,  if  translated  into 
lower tariffs, lower product prices, or higher wages.] 

As  regards  the  General  Product  Safety  Directive  (which  has  a  narrower  scope  in  terms  of 
products  than  the  current  Regulation,  and  as  such  provides  a  very  conservative  basis),  the 
Commission’s Impact Assessment refers to the following: 

(183)  

The impact assessment on the General Product Safety Regulation provides additional perspective on the 
problem  of  enforcement  of  that  Directive  for  products  sold  online.  The  lack  of  availability  of  responsible 
economic operators  measures could be effectively addressed to in case products are directly imported from 
outside the EU is a major issue 

(184)  

SWD(2021) 168 final: Impact assessment accompanying the document ‘Proposal for a Regulation of the 
European  Parliament  and  of  the  Council  on  general  product  safety’  (Annex  5:  Evaluation)  LexUriServ.do 
(europa.eu) 

(185)  

 European  Commission,  Directorate-General  for  Energy, Ecodesign  impact  accounting  annual  report 
2021  :  overview  and  status  report,  Publications  Office  of  the  European  Union,  2022,    Ecodesign  impact 
accounting annual report 2021 - Publications Office of the EU (europa.eu) 

Page 249 / 291 

 
 
                                                      
  Preventable damage to consumers: an estimated 15% of accidents would be preventable if 

products complied – monetised estimate of EUR 11.5 billion per annum (186). 

  Ongoing health harm: product-related injuries and premature death – EUR 76.6 billion per 

annum. (187) 

  Financial  loss  to  consumers  -  products  they  would  not  have  bought  if  they  knew  these 
products  were  unsafe  (‘consumer  detriment  linked  to  the  value  of  unsafe  products’)  - 
estimated  at  EUR  19.3  billion  in  2019. (188)    This  consumer  detriment  due  to  the  loss  of 
value of unsafe products was expected to reach EUR 20.8 billion by 2025 and almost EUR 
22 billion by 2034 in the baseline scenario.   

5.2.2 Scenario assumptions: 

The figures  above from  the EIAR report and the GSPR  Impact  Assessment  can  be used in  a 
scenario to estimate the potential impact of the customs reform on this policy area.  

The table below takes the figures from those reports and applies a very conservative scenario 
by  ignoring  over  70%  of  the  monetised  harm.  It  assumes  that  imports  account  for  25%  of 
consumption and are harmful at the same rate as EU production (although they are less likely 
to comply than EU production). This scenario yields an annual estimate of the  import-related 
consumer cost of non-compliance of €10.725 billion. The issue for assessment then is to what 
extent reform could contribute to reducing this non-compliance cost, as a single indicator – that 
is considered in the sections which follow.  

Harm category 

Product Safety 

Preventable 
Consumers 
(accidents 
compliant) 

Time 
period 

Estimate 

Import 
attribution 

detriment 
and 
avoidable 

to 
society 
if 

Annual 

€ 11.5 B. 

(GSPR Impact Assessment) 

€ 2.875 B  

€ 19 B 

Consumer Financial cost (would 
not have bought product if knew 
not compliant) 

Annual 

(low  2019  figure  -  2020  was 
€23 B) 

€ 4.75 B. 

(GSPR Impact Assessment) 

Health  harm 
injuries and premature death) 

(product-related 

Annual 

€ 76.6 B 

(GSPR Impact Assessment) 

Not  taken 
into 
account 

(186) GSPR Impact Assessment p. 11 
(187) GSPR Impact Assessment p. 58  
(188) GSPR Impact Assessment p. 10 

Page 250 / 291 

 
 
 
 
 
 
                                                      
Ecodesign 
measures 

and 

Labelling 

Health  harm 
injuries and premature death) 

(product-related 

Annual 

€ 76.6 B 

(GSPR Impact Assessment) 

Business revenue gain 

Annual 

€21  B  (low  2020  figure  – 
estimated €29 B 2030 

Jobs gain 

Persistent 

433  000  Estimate  in  EAIR  for 
2030 

€125  Billion  consumer  savings 
Estimate  in  EAIR  for  2030 
(Consumables 
and  Energy 
Costs  net  of  extra  acquisition 
costs) 

Assumption of 10% loss due to 
non-compliance 
(this 
assumption  is  used  in  EIAR 
report  albeit  with  a  strong 
qualification) 

€12.5 Billion 

Consumer 
compliance 

loss  due 

to  non-

Annual 

Total  consumer  cost  from  non-
compliant  products  taken  into 
account for indicators 

Annual  

5.2.3 How would the options perform? 

Not  taken 
into 
account 

Not  taken 
into 
account  

Not  taken 
into 
account  

€ 3.1 
Billion 

€  10.725 
Billion 

The  operational  logic  for  contribution  of  the  options  in  this  case,  as  well  as  the  timing 
assumptions for the start of benefits, are the same as in the Toy Safety case. These have been 
fully explained in section 5.1.3 and are not repeated here. The main distinction in this case is 
that the options address co-operation between customs and experts across a range of different 
product sectors (not just ‘Toys’). This brings more into evidence the ‘critical mass’ issue, and 
the  relevance  of  the  shift  in  capability  which  comes  with  Option  4  in  handling  multiple 
priorities and multi-disciplinary co-operations systematically and simultaneously. 

Option 1 brings a small improvement in detection of specific non-compliant supply chains and 
positive filtering of transparent operators. It does not support a sustained, systematic EU-wide 
action on non-compliant supply chains as such, nor on the full range of products in scope. It is 
not  capable  of  fully  exploiting  the  wealth  of  data  that  the  Eco-design  reform  will  bring. 
Platform  liability  means  enforcement  improves  –  assuming  platforms  act  on  flags.  For  the 
purposes of this scenario, a reduction of import-related harm of 3% is attributed. Data quality 
problems will make it difficult for detection in this area in this option to reach the levels in the 
financial case. 

Page 251 / 291 

 
 
 
 
 
 
 
Option  2  brings  an  improvement  compared  with  Option  1,  based  on  a  more  effective  co-
ordination  mechanism  working  in  essentially  the  same  data  management  and  process 
environment.  Efficiency  gain  rather  than  major  operational  scope  expansion.  Scenario 
assumption of 5% increase in detection. 

Option  3  brings  a  further  improvement  in  detection  based  on  a  better  data  management 
environment  and  higher  quality  EU  indicators,  but  otherwise  faces  the  same  governance 
constraints  as  in  Option  1.  Efficiency  gain  rather  than  major  operational  scope  expansion. 
Scenario assumption of 5% increase in detection. 

Option 4 combines the governance reform of Option 2 (Authority) with the data management 
reform  of Option  3 (Data Space). These elements  are mutually reinforcing in  this  context,  as 
the Authority would have the organisational mandate and operational  critical  mass needed to 
‘drive’  a  sustained,  systematic  approach  to  targeting  non-compliant  imports.  Authority  staff 
will  be  able  to  prepare  more  precise  targeting  routines,  more  quickly,  and  to  benefit  from 
granular operational feedback, enabling more effective adaptation to changing modus operandi 
and to less efficient targeting indicators. It allows a deeper analysis of supply chain information 
both to better identify legitimate trade and to identify trans-European networks and connections 
which are not  identifiable in  national  data flows alone.  It  can make better use of intelligence 
and of co-operation framework tasks. The combination of enablers in this option significantly 
increases  detection  compared  with  options  1-3,  deepening  the  focus  on  higher-impact 
enforcement  actions.  Authority  monitoring  of  compliance  level  and  DPP  use  (and  risk  of 
misuse)  based  on  operational  data  should  further  improve  the  compliance  picture  and 
management.  The  primary  limitation  would  be  data  quality  and  the  capacity  of  national 
authorities  to  carry  out  enforcement  actions  on  a  wide  range  of  products  in  a  short  space  of 
time.  It  is  assumed  that  economic  benefits  in  terms  of  jobs  and  competitiveness  are  not 
significant  without  the  dataspace  which  comes  in  options  3  and  4  and  which  gives  a 
sufficiently  systematic  view  to  enable  some  supply  chains  to  be  more  systematically  shut 
down. By contrast with the Toy Safety example, the dilution of efforts across a broader range 
of product priorities may dilute the impact of some options in this case further (as the efforts 
are  not  focused  to  the  same  extent  on  one  issue).  Scenario  assumption  of  12%  increase  in 
detection. 

5.2.4 Summary indicators 

5.2.4.1 Qualitative benefits 

BENEFITS (Qualitative) 

Effectiveness 

Overall (General Objective) 

SO 1 – Strengthen EU customs risk management 

SO 4 – Data access/use for strategic customs action 

SO 5 – Enable the Customs Union to act as one 

Protection outcomes - Single Market and Sustainability: 

Consumers:  Cost saving  

Business and Trade: Jobs 

Business and Trade: Competitiveness 

1
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2
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3
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4
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** 

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** 

** 

** 

** 

**** 

**** 

**** 

**** 

*** 

*** 

Page 252 / 291 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Efficiency 

Avoided unnecessary inspections and controls; transfer of effort 
to higher impact interventions 
Coherence with other EU policy objectives 
Ecodesign Directive and proposed Ecodesign for Sustainable 
Products Regulation) 

Market Surveillance Regulation 

General Product Safety (proposal) 

Digital Services Act 

Environmental policies (consumer emissions - EU Green Deal)  

Strategic capability 

Co-operation framework support 

Strategic planning support 

EU-wide trade flow visibility 

EU-wide performance visibility 

Adaptability (time to market) 

* 

** 

*** 

**** 

** 

*** 

**** 

***** 

** 

** 

** 

* 

* 

* 

* 

* 

* 

*** 

**** 

***** 

*** 

**** 

***** 

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* 

* 

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**** 

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***** 

Page 253 / 291 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
5.2.4.2 Quantitative benefits scenarios 

The harm-reduction scenario percentages suggested in section 5.3.2 are applied to the consumer cost for non-compliant products identified in the table in 
section 5.2.2. The harm reduction attributed to each option is then annualised in the table below. 

All values are estimates, relative to baseline. 
In €Million. 

Phase 1 

Phase 2 

Phase 3 

BENEFITS (consumer cost saving) 

Y1 

Y2 

Y3 

Y4 

Y5 

Y6 

Y7 

Y8 

Y9 

Y10 

Y11 

Y12 

Y13 

Y14 

Y15 

Total 

Option 1 

3% harm reduction from imports 

Option 2  
5% harm reduction from imports 
Option 3  
5% harm reduction from imports 
Option 4 
12% harm reduction from imports 

322 

322 

322 

322 

322 

322 

322 

322 

322 

322 

322 

322 

3 861 

536 

536 

536 

536 

536 

536 

536 

536 

536 

536 

536 

536 

6 435 

54 

536 

536 

536 

536 

536 

536 

536 

536 

536 

536 

536 

536 

6 489 

1287  1287  1287  1287  1287  1287  1287  1287  1287  1287  1287  1287  15 444 

For timing assumptions, see section 2.   Key elements for this table: 

 

 

 

In Option 1 savings start in Y4.  The e-commerce build is completed in Y3 

In Options 2 and 4 savings start in Y4, assuming the Authority’s first tasks include this priority 

In Option 3, savings start in Y3 as the e-commerce build is completed in Y2. Scenario for this table is 10% of full-year savings attributed to Y3 
based on initial targeting in e-commerce during second half of Y3. 

The overall baseline assumption is that non-compliance continues to be an important issue (new sources continue to emerge). 

These  scenarios  are  not  forecasts.  They  illustrate  how  significant  capability  differences  between  the  options  could  be  reflected  in  performance 
differences, taking account of small relative improvements and taking account of a small proportion of the potential benefit. 

254 

 
 
 
  
  
  
  
  
  
  
  
  
  
  
 
5.3 Bamboo 

5.3.1 Context and customs relevance  

In the context of the Single Use Plastic (SUP) Directive adopted in July 2019, consumers and 
businesses had an increased interest in sustainable alternatives to plastic.  

This also affected food contact materials such as tableware articles that started being produced 
with plant-based materials. However, in  contrast  with tableware made entirely of plant-based 
material, some products are the result of a combination of plant-based powder or fibres (used 
as fillers to give volume to the product) and plastic resin that holds the ingredients together and 
gives them firmness and hardness.  

Tableware  is  a  food  contact  material;  thus,  the  use  of  additives  is  possible  only  where  an 
authorisation  is  in  place (189).  This  is  for  a  good  reason:  the  additives  may  either  present  a 
public  health  risk  per  se  or  alter  the  final  properties  of  the  product,  making  it  dangerous  for 
human  health.  This  is  the  case  for  bamboo-based  products  mixed  with  plastic:  the  bamboo 
deteriorates 
the  host  plastic  (oftentimes  melamine  and 
formaldehyde), causing its premature deterioration and migration in the food the product it is in 
contact with. 

the  migration  properties  of 

With  the  internal  market  and  free  movement  of  goods  in  the  EU,  and  the  fact  that  many 
products  were  imported  (mainly  from  China)  and/or  sold  through  e-Commerce,  individual 
actions from Member States proved to be inefficient, showing also that although EU legislation 
on  food  safety  is  very  strict,  these  kind  of  products  managed  to  slip  through  the  controls  of 
both  customs  and  market  authorities.  Since  2019,  there  has  been  a  significant  number  of 
notifications  (65)  in  the  Rapid  Alert  System  for  Food  and  Feed  (RASFF)   (190)  concerning 
bamboo-melamine food contact materials.  

5.3.2 Understanding the baseline  

As opposed to food, feed, animals and plants, food contact materials (FCM) are not subject to 
official  controls  at  Border  Control  Posts,  except  for  the  import  of  polyamide  and  melamine 
plastic kitchenware originating in or consigned from the People’s Republic of China and Hong 
Kong  Special  Administrative  Region,  China  (CN  code  3924100011,  with  6.5%  customs 
duties). For the latter, each consignment must be accompanied by a declaration of compliance 
and a laboratory report and be checked at Border Control Posts. Therefore, operators may be 
tempted  to  declare  illegal  FCM  made  with  non-authorised  ground  bamboo  filler  as  FCM,  as 
entirely  made  of  bamboo,  under  customs  code  44191900  (0%  customs  duties).  This  would 
allow  evasion  of  sanitary  controls  at  borders,  and  of  customs  duties.  This  is  all  the  more 

(189)  

Regulation (EC) No 1935/2004 lays down the  general principles as regards food contact materials, and 
establishes an authorisation procedure for  substances to be used in food contact  materials. Ground bamboo, 
bamboo flour and similar substances are not listed in Annex I to that Regulation, hence their safety has not 
been  assessed.  As  a  consequence,  placing  food  contact  materials  produced  with  bamboo  powder  in  the  EU 
market  is  illegal.  Despite  the  lack  of  assessment  in  accordance  with  Regulation  (EC)  No  1935/2004,  the 
European Food Safety Agency noted that when used as fillers in plastic, migration of the additive components 
may be higher than if the source material is used as bulk material and, in particular, when the additive is used 
at  high  levels,  it  may  8influence  the  migration  properties  of  the  host  plastic  (scientific  opinion 
10.2093/J.efsa.20195902 adopted by EFSA on 24 October 2019). 

(190)  

The  Rapid  Alert  System  for  Food  and  Feed  (RASFF)  is  the  key  tool  of  the  European  Union  to  enable 
swift reaction when risks to public health are detected in the food chain RASFF - food and feed safety alerts 
(europa.eu). 

255 

 
 
                                                      
significant because in the absence of sanitary controls, customs controls are the only barrier 
preventing dangerous FCM from entering the EU market. 

From May 2021 until April 2022, the Commission together with 21 Member States launched a 
year-long  coordinated  enforcement  action  named  ‘Bamboo-zling’,  aimed  at  controlling 
bamboo-based  kitchenware  present  in  the  internal  market  in  breach  of  food  safety  standards. 
The Commission issued a Risk  Information Form to alert customs through the Customs Risk 
Management System (CRMS), which was used by Member States to update their risk profiles 
used in customs controls. 

A total of 716 cases of plastic FCM containing unauthorised bamboo powder were notified by 
the participants in the course of the year-long action. 612 cases related to products found on the 
market,  while  104  were  goods  rejected  at  the  border.  Of  the  total,  551  cases  presented  an  e-
commerce aspect, out of which only in 3 cases goods were rejected at the border. 

Page 256 / 291 

 
 
 
 
 
 
Table: 16outcome of the Bamboo-zling EU Coordinated Case. Source: IMSOC system  

(each row indicates the number of consignments of faulty products identified during controls 
performed  by  a  specific  Member  State  on  the  market  or  at  the  border.  Member  States  have 
been anonymised) 

Bamboo 

Notification basis 

On the market 

Border control 

27 

24 

7 

168 

35 

27 

62 

38 

38 

- 

99 

- 

1 

1 

19 

- 

3 

- 

23 

- 

40 

612 

- 

2 

- 

- 

- 

- 

52 

- 

- 

- 

- 

5 

- 

- 

- 

40 

- 

3 

1 

1 

- 

104 

716 

Page 257 / 291 

 
 
 
 
 
 
Intelligence from the coordinated case 

One  consignment  of  13422  units  of  tableware  was  wrongly  declared  under  code  CN 44191900, 
indicating food contact materials made entirely of bamboo. The description of the goods provided by 
the consignee showed that the product was made of melamine as structural material and vegetal fibres 
only used as filler/additive. With the wrong code, it avoided both tax duties and controls imposed on 
melamine/polyamide  products  originating  from  China.  SANTE  informed  OLAF  on  25/06/2021, 
proposing  them  to  contact  the  national  authorities for  follow-up.  On  29/11/2021,  the  national  contact 
point  informed  the  Commission  that  the  consignment  had  been  destroyed  and  OLAF  informed 
accordingly. 

5.3.3 A deeper look: where the current system is falling short 

A first issue is represented by the fact that from an operational perspective, customs do not act 
as  one  –  this  is  the  default  position  unless  a  specific  initiative  is  created  under  the  UCC 
common  risk  management  framework.  Although  the  coordinated  action  on  bamboo  is  not 
based on Article 108 of the Official Controls Regulation (191), the majority of Member States 
took part in it as such, but with quite different levels of control outcomes from the market and 
customs authority sides. By contrast with market authorities operating under the framework of 
the  Official  Controls  Regulation,  customs  do  not  have  a  legal  base  to  start  a  coordinated 
enforcement  action,  nor  has  the  Commission  the  power  to  impose  it.  While  the  UCC  does 
provide for the establishment of common priority control areas and common risk criteria, this 
involves  the  proposal  and  negotiation  of  implementing  acts.  These  co-ordinated  customs 
actions  are  applied  exceptionally  rather  than  by  default  and  did  not  apply  in  this  case.  This 
means there was no ‘EU’ customs action corresponding to that of the market authorities, partly 
explaining the lower level of detections at the border).  

A  (related)  second  issue  is  the  ‘time  to  market’  of  the  (even  partial)  solution.  From  the 
moment  where  authorities  in  the  Union  (including  the  Commission)  became  aware  of  the 
problem,  more  than  a  year  passed  before  the  coordinated  action  was  launched.  Within  the 
current legal framework and the COVID-19 pandemic this reaction time is remarkable, yet it is 
still  very  long.  Moreover,  that  result  was  achieved  with  long  and  intense  ‘manual’ 
coordination, as the example in the box above shows: to destroy one, individual consignment 
of 13422 units (read: tableware items) and ensure that all actors along the enforcement chain 
were informed, it was necessary to activate several administrative entities during the course of 
five  months.  This  action  did  not  involve  creating  any  specific  binding  customs  common  risk 
criteria for the customs side, but if it had, the lead time for their establishment would have been 
around two years.  

A  third  issue  is  the  information  that  customs  can  use  to  identify  specific  products.  The 
kitchenware  presenting  the  bamboo  problem  is  identified  through  TARIC  codes  3924100011 
(tableware  and  kitchenware  containing  polyamide  or  melamine,  consignment  from  CN/HK), 
392410019  (tableware  and  kitchenware  containing  polyamide  or  melamine,  other), 
3924100020 or 3924100090 (tableware and kitchenware of plastics other). These codes are far 
too broad to allow proper customs identification of non-financial risks, thus resulting in these 
products being practically invisible to customs. In addition, wrong usage of TARIC codes is a 
well-known mechanism for attempting to evade the correct customs duties. 

(191)  

The coordinated assistance and follow-up by the Commission foresees that where competent authorities 
in the Member States concerned are unable to agree on appropriate action to address a non-compliance, the 
Commission shall coordinate the measures and actions undertaken by competent authorities. 

Page 258 / 291 

 
 
 
                                                      
A fourth issue is the overall coherence of the system, for which the enforcement actions taken 
on the market have a different efficiency than the ones taken at the border and there is no co-
operation framework to ensure co-ordinated delivery by customs and market authorities at the 
same time. 

Finally, neither customs nor market authorities were equipped to target specific manufacturers 
and  operators  in  a  structured  way  across  all  supply  points  for  the  EU.  Evidence  from  the 
coordinated action shows that information about operators was flowing between customs and 
market  authorities,  yet  this  information  had  to  be  assessed  manually,  despite  the  products 
concerned being very standardised in nature, and notwithstanding the fact that a positive hit on 
the market could have been immediately used to feed customs intelligence and target the same 
products  in  customs  risk  analysis  (in  so  far  as  the  declared  data  and  the  analytics  techniques 
would support detection of consignments in customs flows).  

5.3.4 How would the options perform? 

The  operational  logic  for  contribution  of  the  options  in  this  case,  as  well  as  the  timing 
assumptions for the start of benefits, are the same as in the Toy Safety case. These have been 
fully explained in section 5.1.3 and are not repeated here. The main distinction in this case is 
that  the  analysis  takes  account  on  the  specific  details  emerging  from  a  historic  enforcement 
action. 

Option 1  

The Commission (with the support of its Joint Analytics Capabilities per the baseline, and with 
the  new  political  mandate  above)  prepares  a  common  risk  management  approach  and  co-
operation  framework  to  help  national  customs  and  market  surveillance  authorities  to  work 
together.  

This Option brings a small improvement in detection of specific non-compliant supply chains 
and  positive  filtering  of  transparent  operators  (Trust  and  Check  importers  of  bamboo).  New 
data from e-commerce platforms could also be used by national customs to help with targeting 
(additional contextual information may help identify risky streams within TARIC codes which 
cover both compliant and non-compliant products). 

However it does not support a sustained, systematic EU-wide action on non-compliant supply 
chains  however.  While  this  option  would  bring  more  coherence  on  the  Commission  side,  it 
would  not  significantly  improve  coherence  in  implementation  on  the  ground.  The 
Commission’s role under the UCC would not be equivalent to its role under Article 108 of the 
Official  Controls  Regulation  (it  does  not  have  such  a  direct  role  in  relation  to  controls).  In 
practice, outcomes on the customs side would be similar to the Toy Safety case – in this case, 
this  option  would  not  ensure  that  market  detections  were  translated  into  systematic 
identification of non-EU bamboo supply chains or their consistent targeting across the external 
border. It would not alter substantially how Member States operate on the ground and the tools 
used to detect bamboo-related products, and it would only facilitate an ex-post evaluation. 

Introducing the concept of ‘deemed importer’ for the e-commerce platforms would bring added 
value,  as  the  platform  would  be  liable  for  the  non-financial  risks  posed  by  the  products  they 
sell  under  the  Digital  Services  Acts.  However,  the  liability  alone  would  not  be  a  sufficient 
driver  to  address  the  problem  of  bamboo:  platforms  would  still  base  their  reactions  on  the 
detections  by  the  market  authorities  in  the  internal  market,  with  the  risk  of  large  volumes  of 
bamboo kitchenware remaining in circulation undetected.  

Page 259 / 291 

 
 
Option  2  brings  an  improvement  compared  with  Option  1,  based  on  a  more  effective  co-
ordination  mechanism  working  in  essentially  the  same  data  management  and  process 
environment. Efficiency gain rather than major operational scope expansion.  

Option  3  brings  a  further  improvement  in  detection  based  on  a  better  data  management 
environment  and  higher  quality  EU  indicators,  but  otherwise  faces  the  same  governance 
constraints as in Option 1. Efficiency gain rather than major operational scope expansion.  

The cooperation between customs and non-customs authorities will take place through the EU 
Data Space and will be enhanced by the use of AI. Commission officials and national experts 
would  work  together  on  assessing  data  in  common  targeting  projects.  Market  surveillance 
authorities would be encouraged to share risk information for use in common targeting projects 
(not limited to one MS). This would allow tackling and identifying specific trade flows on non-
authorised bamboo products, and flagging specific economic operators. 

The Commission would be able to deploy ad-hoc features to tackle the issue of bamboo in  a 
shorter amount of time, as compared to the decentralised digital model, however the analysis to 
define such features would  still require time as the Commission  will not have an operational 
role and would still need to consult Member States on these new features. The EU Data Space 
could be interoperated with the other platforms used by the Commission to coordinate controls 
in the food safety domain, such as RASFF, and re-use and cross-check such information, thus 
exponentially increase the intelligence upon which customs would then act on the ground. 

In  this  option,  the  Commission  will  maintain  an  overall  coordination  role  which  will  be 
constantly fed by first-hand information. The Commission could arrange for preparation of EU 
indicators  and  evaluate  them,  based  on  visibility  of  the  customs  data  flows.  However,  the 
actions  on  the  ground  would  still  remain  up  to  each  Member  State  and  subject  to  diverging 
practices. 

The  single  advance  cargo  information  layer  would  allow  tracking  consignments  of  bamboo-
related products,  and matching it with  internal  market  controls  without manual  interventions, 
thus facilitating the action of the market authorities in the internal market. These supply chain 
flows could also be analysed across the EU to give a better picture of the size of the problem. 

Overall, effectiveness and efficiency of implementation across the EU would continue to vary. 
The  practical  improvement  would  remain  limited  by  the  governance  constraints  (notably  the 
extent to which each MS agrees to include their flows in the targeting work). This means the 
technical  investment  in  the  information  environment  would  be  under-exploited.  The  same 
governance  constraints  would  limit  the  scope  and  speed  of  EU  customs  adaptation  to  illicit 
trade. 

Option 4 combines the governance reform of Option 2 (Authority) with the data management 
reform of Option 3 (dataspace). These elements are mutually reinforcing in this context, as the 
Authority  would  have  the  organisational  mandate  and  operational  critical  mass  needed  to 
‘drive’ a sustained, systematic approach to targeting non-compliant imports.  

The Authority would prepare the EU supply chain supervision strategy. It would arrange rapid 
mutual  training of experts on concepts  and on the EU customs tools.  It  would bring together 
bamboo  and  customs  experts  and  analyse  all  EU  imports  (including  e-commerce  flows)  to 
initially  identify  good  and  bad  supply  chains  (starting  point).  The  co-operation  with  bamboo 
experts  would  be  supported  on  a  more  systematic  basis  than  under  Options  3  or  4  as  the 
Authority would have a file manager for co-operation.  

Page 260 / 291 

 
 
The Authority would make better use of intelligence and of co-operation framework tasks. The 
Authority  would  use  the  EU  customs  information  environment  directly  to  create  a  virtual 
analytics  project  involving  bamboo  and  customs  experts,  to  design  operational  targeting 
indicators  and  performance  feedback  to  be  applied  to  inbound  traffic.    The  availability  of 
additional  information  from  operators  including  e-commerce  platforms  would  enable  the 
Authority to prepare common analytics tools aimed at identifying risky streams within TARIC 
codes  which  cover  both  compliant  and  non-compliant  products.  This  ability  to  apply  more 
advanced  analytics  techniques  quickly  and  in  a  common  operational  manner  is  a  major 
advantage in the context of the data quality problem described for this specific bamboo case in 
the baseline. The training function of the Authority would support the development of common 
technical  understanding  between  customs  and  bamboo  experts  (important  in  supporting  the 
effective and proportionate use of advanced analytics). 

The synergies between customs, data science and bamboo experts and the management of the 
Data Space would enable these projects  to  deliver higher-impact  controls  across the Member 
States,  including  structured  sampling  in  e-commerce  flows  (a  major  gap  area  currently),  and 
distribution  of  actions  to  suitable  intervention  points  (such  as  the  destination  Member  State 
according to customs information) and support convergence of enforcement across the EU. 

This option significantly improves the ‘time to market’ to deliver effective enforcement against 
unauthorised bamboo products. This option would be more adaptive – benefiting from granular 
operational  feedback  and  insights  on  less  efficient  targeting  indicators,  and  insights  on 
changing modus operandi This will ensure that the problem of bamboo can be swiftly tackled 
in  a  consistent  manner  at  operational  level  through  the  Authority,  without  prejudice  to 
additional, specific actions that both the Commission and the Member States could carry out. 

Similarly to option 3, the Authority could add features to the EU Data Space, with the added 
value  of  integrating  operational  experience  and  having  an  operational  mandate,  thus 
significantly  cutting  the  time  required  to  analyse  new  features  of  the  EU  Data  Space,  and 
implement them. 

The  combination  of  enablers  in  this  option  significantly  increases  detection  compared  with 
options  1-3.  A  deeper  analysis  of  supply  chain  information  and  complementary  data  would 
enable  better  identification  both  of  legitimate  trade  and  of  trans-European  networks  and 
connections which are not identifiable in national data flows alone, shifting the focus to higher-
impact enforcement actions. 

Page 261 / 291 

 
 
 
 
 
 
 
 
 
5.3.5 Summary indicators 

The overall baseline assumption is that non-compliance continues to be an important issue 
(new sources continue to emerge). 

BENEFITS (Qualitative) 

Effectiveness 

Overall (General Objective) 

SO 1 – Strengthen EU customs risk management 

SO 4 – Data access/use for strategic customs action 

SO 5 – Enable the Customs Union to act as one 

Protection outcomes - Single Market and 
Sustainability: 
Consumers:  Reduced health risk  

Consumers:  Reduced non-compliant e-commerce 
imports 

Efficiency 

Avoided unnecessary inspections and controls; 
transfer of effort to higher impact interventions 
Coherence with other EU policy objectives 
Single Use Plastic Directive  

Environmental policies (persistent chemicals) 

Strategic capability 

Co-operation framework support 

Strategic planning support 

EU-wide trade flow visibility 

EU-wide performance visibility 

Adaptability (time to market) 

1
n
o
i
t
p
O

* 

* 

* 

* 

* 

* 

** 

* 

* 

* 

* 

* 

* 

2
n
o
i
t
p
O

** 

** 

*** 

** 

** 

3
n
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Page 262 / 291 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
BENEFITS: SECURITY (PROTECTION AS ONE) 

6.1 Context and customs relevance  

Following the events of September 2001, the Security Amendment to the Community Customs 
Code in 2005 brought about an important shift in operational emphasis in the implementation 
of the customs union in order to better protect the safety and security of the EU and its citizens.  

Under  the  Union  Customs  Code,  customs  authorities  have  the  right  to  comprehensive 
information on all goods coming to or through the EU, and are obliged to carry out risk-based 
customs  controls  in  an  EU  customs  common  risk  management  framework.  The  broad 
definitions  of  the  mission  of  customs  and  the  concepts  of  customs  risk  and  controls  enable 
customs  authorities  to  play  an  important  role  managing  potential  security  risks,  and  put 
customs  in  the  front  line  in  particular  for  detecting  or  preventing  the  exploitation  of  goods 
supply chains by organised criminal or terrorist groups. Specific EU common risk criteria and 
standards  for  safety  and  security  in  general  and  aviation  security  in  particular  have  already 
been established. 

It  is  useful  in  this  context  to  recall  that  customs  risk  analysis  and  control  measures  are 
operationally  broad,  ranging  from  requests  for  additional  information  or  screening  and 
verification through various kinds of physical intervention and ultimately to detention of goods 
or  transport  or  instructions  not  to  load  goods  in  the  first  place.  These  control  measures  and 
actions taken by customs are directly regulated by the Union Customs Code and are clearly a 
vital  element  in  any  multi-layered  strategy  for  tackling  these  phenomena.  Law  enforcement 
processes often happen in parallel or in follow-up to customs control processes. It is clear that 
the  complex,  diverse  and  specialised  nature  of  these  threats  means  that  the  greater  the  co-
operation  between  customs  and  other  authorities  (particularly  in  the  security  and  law 
enforcement domains), the more effective the EU’s response can be. A key consideration for 
customs  reform  options  therefore  is  the  extent  to  which  they  can  underpin  better  and  more 
systematic data-driven co-operation with other security actors. 

Before  considering  the  options,  this  section  presents  a  small  number  of  specific  organised 
crime examples (drugs precursors, cigarettes and narcotics), followed by a broader outline of 
some  of  the  more  horizontal  challenges  connected  with  the  growth  of  small  parcel  traffic 
(including  the  counter-terrorism  aspects  for  air  cargo  security  and  further  organised  crime 
issues with firearms and new psychoactive substances). These brief contextual orientations will 
allow for a clearer strategic assessment of how the options may be expected to perform in the 
security domain. 

6.2 Drugs precursors 

The production of drugs such as heroin, cocaine and amphetamine type stimulants requires the 
use of chemicals, which are referred to as drug precursors.  

Drugs  precursors  supply  chains  have  a  number  of  key  features  in  terms  of  technical 
sophistication  and  rapid  evolution  of  the  products  concerned  and  the  transnational  scope  and 
adaptability  of  organised  criminal  groups,  which  make  them  a  particularly  difficult  threat  to 
manage  without  a  comprehensive  picture  of  supply  chain  flows  and  a  multidisciplinary 
approach to targeting. 

Traditionally, drug precursors have had varied legitimate uses, for example, in the production 
of  pharmaceuticals,  cosmetics,  plastics,  perfumes  and  cleaning  products  and  were  traded  in 

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significant  volumes.  To  prevent  the  misuse  of  these  precursors  to  produce  drugs,  a  specific 
regulatory  framework  has  been  set  up  both  at  international  and  at  EU  level.   (192)    This 
essentially  focuses  on  monitoring  (by  companies  and  authorities)  of  legitimate  use  to  try  to 
prevent ‘diversion’ to illicit channels.  

Drug  precursors  may  be  scheduled  substances  (listed  in  the  Annexes  to  the  EU  Regulations, 
with  the  list  being  changed  over  time)  or  non-scheduled  substances  (all  the  other  substances 
identified as being used in the illicit production of drugs). Scheduled substances are subject to 
clear control measures (licenses/authorisations).  

Organised  crime  groups  have  always  tried  to  circumvent  the  controls  implemented  for 
scheduled substances, by substituting them with non-scheduled substances (in the case of going 
a step backwards in the production process these are sometimes called ‘pre-precursors’). Until 
about 2010 also these non-scheduled substances had primarily only legal uses.  

In 2019 an EMCDDA report analysed drug precursor developments in the EU. It found that in 
the  past,  a  reduction  in  the  availability  of  a  particular  precursor  was  sufficient  to  have  an 
impact  on  the  production  of  an  illicit  drug.  Hence  the  significant  reduction  in  the  supply  of 
MDMA at the end of the last decade; this coincided with a reduction in the availability of PMK 
and safrole around 2008 due to global precursor restriction efforts. The success of this supply 
reduction effort, however, led criminals to look for other ways to get their chemicals. 

In  the  last  decade  so-called  ‘designer-precursors’  have  emerged;  these  are  close  chemical 
relatives  of  scheduled  drug  precursors  that  are  purpose-made  to  circumvent  controls  by  the 
authorities and do not have any known legitimate use. The tools of traditional drug precursor 
control such as licences and registrations, import and export authorisations and the requirement 
to  notify  suspicious  transactions  are  largely  ineffective  to  counter  designer-precursors  since 
these  substances  are  never  part  of  the  licit  supply  chain/  channels.  The  modus  operandi 
involves  designer-precursors  being  misclassified  as  another  product/chemical,  packages  are 
mislabelled, fake addresses and names of legal companies are used, etc. 

There  are  hardly  any  limitations  for  developing  new  designer-precursors.  Each  time  a  new 
substance is identified and subsequently scheduled, organised crime groups seem to be able to 
slightly  alter  the  molecular  structure  and  come  up  with  a  new  designer-precursor.  The  time 
needed  for  this  is  very  short  and  in  any  case  shorter  than  the  period  needed  to  schedule  a 
substance.  Within  the  existing  legislative  framework  which  is  based  on  a  time-consuming 
‘substance-by-substance  scheduling’  the  authorities  seem  to  be  unable  to  keep  up  with  the 
speed of innovation of the organised crime groups. 

Crucially,  though  the  2019  analysis  found  that  the  traditional  tools  for  tackling  precursor 
control are not effective to counter the use of alternative chemicals in illicit drug manufacture, 
the key underlying message is the capability of illicit producers and traffickers to react quickly 
to circumvent controls and other measures. Recent evidence indicates that illegal trade in acetic 
anhydride, the main precursor substance used in the production of heroin and widely used in 
the legal chemical industry in the EU, has also increased. (SOCTA 2021). This underscores the 
adaptability  of  criminal  organisations  to  respond  to  supply  reduction  measures  and  the 

(192) At  international  level  the  1988  United  Nations  Convention  against  Illicit  Traffic  in  Narcotic  Drugs  and 
Psychotropic  Substances,  in  particular  Article  12  thereof,  establishes  a  number  of  general  control  and 
monitoring  measures  and  obligations.  The  EU  is  Party  to  this  Convention  and  two  EU  Regulations,  one 
focussing on external trade and another one on intra-EU trade, implement these  international obligations at 
EU level. 

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requirement  for  control  and  enforcement  measures  that  are  comprehensive  and  sufficient  in 
scope and agility to maximise effectiveness. 

The  European  Union  has  also  become  a  significant  producer  of  some  drugs,  both  for 
domestic  consumption  and  for  the  global  market  (EMCDDA  2022).  This  is  indicated  by  the 
dismantling of over 350 drug production facilities in the European Union in 2020. The scale of 
these operations  is  also  changing. While methamphetamine production  in  Europe historically 
has  been  characterised  by  small-scale  local  ‘kitchen’  laboratories  using  precursor  chemicals 
extracted  from  medicines  (ephedrine  and  pseudoephedrine),  large-scale  sites  using  different 
production methods have now been detected in the Netherlands and Belgium. This area is also 
the main location for amphetamine and MDMA manufacturing using similar processes. Recent 
information  showed  the  involvement  and  collaboration  of  Mexican  cartels  to  produce  large 
quantities  of  methamphetamine.  This  is  raising  concerns  that  Europe  is  now  playing  a  more 
significant role in global supply of synthetic drugs. 

Increasing  diversity  in  the  drug  market  is  also  signalled  by  the  availability  and  use  of  non-
controlled  synthetic  cathinones,  sold  as  alternatives  to  controlled  stimulants.  Seizures  of 
cathinones  increased  to  3.3  tonnes  in  2020,  up  from  0.75  tonnes  in  2019,  and  large  seizures 
have  continued  to  be  reported  in  2021  and  2022.   (193)  Most  bulk  quantities  of  synthetic 
cathinones seized in 2020 originated in India, where large-scale production of these substances 
appears  to  be  a  relatively  new  development.  Prior  to  2020,  the  origin  of  comparable 
consignments, where established, was China. (194)  The latest data may indicate a more general 
shift  to  the  greater  involvement  of  other  countries,  with  capacity  within  their  chemical  or 
pharmaceutical  industries,  in  the  supply  of  new  psychoactive  substances  and  possibly 
precursors to Europe. If so, it could have important implications for future drug control efforts. 
(EMCDDA 2022) 

Methamphetamine produced in Mexico and Africa is also trafficked to Europe. The quantities 
trafficked range from small amounts in postal packages connected to darknet market purchases, 
to multi-tonne consignments imported from Mexico (sometimes for the EU market, sometimes 
for transhipment) (EMCDDA 2022). Changes in methamphetamine production and trafficking 
have created the potential for the drug to become more available in Europe. Given the harms 
associated with this drug and the major role it plays in drug problems internationally, Europe 
needs to be better prepared to identify and respond rapidly to any signs of further diffusion in 
production or use (EMCDDA 2022). 

As  of  2019  the  EU  retail  synthetic  drugs  market  was  estimated  to  be  valued  at  more  than 
EUR  1.5  billion.  (EMCDDA  and  Europol,  2019).  There  is  a  record  high  production  of 
synthetic drugs in the EU and it is estimated that 90% of the synthetic drugs produced in the 
EU  resort  to  the  use  of  designer  precursors.  (Ad-hoc  group  report).  To  date,  there  is  no 
evidence  that  the  actual  production  of  these  designer-precursors  takes  place  in  the  EU.  All 
designer  precursors  are  originating  in  third  countries  mainly  in  China;  but  there  are  reports 
indicating India as well.   

(193)  

This increase was largely driven by a small number of large-scale seizures of N-ethylhexedrone and two 
substances,  3-MMC  and  3-CMC,  which  are  structurally  similar  to  the  internationally  controlled  drugs  4-
MMC (mephedrone) and 4-CMC (clephedrone). While 3-MMC and 3-CMC have been available on Europe’s 
drugs market for several years, their availability seems to have increased around 2020. 

(194)  

However, in recent years, China has introduced legal controls for various substances, including 3-MMC 
and  3-CMC.  As  China  has  historically  been  a  major  source  of  new  psychoactive  substances  detected  in 
Europe 

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As indicated above, illicit producers  and traffickers do adapt  and react  quickly to  changes in 
the  control  environment  in  order  to  circumvent  controls  and  other  measures.  It  is  clear  that 
monitoring  of  the  trade  in  drug  precursors  for  legitimate  use  must  continue  to  enable 
authorities  and  economic  operators  to  prevent  their  ‘diversion’  from  licit  to  illicit  channels. 
There  is  a  need  to  address  the  issue  of  non-scheduled  substances,  in  particular  designer-
precursors.  (195)  

For  the  purposes  of  this  case  study,  they  key  issue  is  that  because  designer-precursors  are 
illegally  imported  or  smuggled  in  from  third  countries,  customs  authorities,  as  the 
gatekeeper at the EU external borders have an important role to play to stop their entry. 
DG TAXUD created an ad-hoc group with the aim to support the Commission in analysing the 
issue in-depth from an interdisciplinary array of backgrounds to assess possible policy avenues 
on how the matter should be tackled. Among the areas for action identified are strengthening 
customs risk management and to improve detection capabilities of Customs administrations.  

In  operational  practice,  seizures  of  designer  precursors  show  that  the  entry  points  are 
scattered all over the EU, and then transported by road, perhaps to other Member States, to be 
used  for  drug  manufacturing.  In  general,  organised  crime  groups  seek  to  find  an  entry-point 
where controls are less strict and/or where penalties are low. If an occasional seizure happens, 
organised crime groups will look for another entry point.  

Tackling  this  phenomenon  needs  a  more  joined-up  and  agile  capacity  for  customs  risk 
management and cooperation with other law enforcement authorities and experts in the field. 
The  systematic  analysis  of  EU  wide  and  global  data  is  a  pre-requisite  to  respond  quickly  to 
new trends and modus operandi; and for appropriate control responses throughout the external 
border and overall results in better targeting of the consignments of designer precursors.  

6.3 Cigarette smuggling 

Compared  with  drugs  precursors,  this  phenomenon  is  easier  to  understand,  but  nonetheless 
remains difficult to effectively tackle.  

Cigarette  smuggling  has  been  a  major  concern  in  Europe  for  some  time.  Although  customs 
seize billions of cigarettes every year, the presence of illicit imported cigarettes on the market 
has tended to persist, driven by the continued market demand for cigarettes and the high price 
difference  between  licit  and  illicit  traffic  (in  effect,  illicit  trade  makes  cigarettes  available 
below the price levels set to discourage smoking).  

Tobacco  smuggling  causes  heavy  yearly  losses  to  the  budgets  of  EU  countries  and  the  EU 
institutions  in  lost  customs  duties  and  taxes.  It  also  undermines  public  health  campaigns  and 
violates  the  strict  rules  that  the  EU  and  its  member  countries  have  on  manufacturing, 
distribution  and  sale  (typically  not  complying  with  product  regulation  such  as  labelling)  and 
presents  specific  risks  for  consumers.  Furthermore,  it  is  a  source  of  revenue  for  organised 
criminal groups from Europe and beyond, and there are indications that in some instances it is 
also linked to financing terrorism 

The  annual  report  prepared  by  KPMG  (commissioned  by  PMI)  suggests  that  counterfeit  and 
contraband cigarettes tends to be around 7%-8% of total cigarette consumption in the EU. The 

(195)  

On  30  November  2020  the  European  Commission  adopted  a  Report  on  the  evaluation  of  the  EU  drug 
precursors legislation. The main conclusion of the evaluation was that there is a need to address the issue of 
non-scheduled substances, in particular designer-precursors. 

Page 266 / 291 

 
 
                                                      
report  suggests  a  possibly  COVID-related  decline  in  absolute  numbers  (and  in  particular 
connected with  reduction in  sea freight,  an important  smuggling mode).  Nonetheless,  KPMG 
suggests that for 2020 the estimate was still of the order of 34 Billion pieces for the EU27 and 
that  ‘Had  these  cigarettes  been  legally  purchased  in  the  countries  in  which  they  were 
identified, an additional c. €8.5bn in taxes would have been raised in the EU27’. (196)   

Precise  figures  are  not  available  for  non-EU  contraband  (as  origin  country  is  not  always 
marked), but the figures for 2020 suggest a range of 12.4-17.7 Billion pieces (this conservative 
range does not include any counterfeit cigarettes, of which some will certainly also have come 
from outside the EU). If the KPMG figures above are taken as an indication of the overall tax 
gap, a very conservative figure for the import tax gap might be taken in the order of EUR 8.5 
billion x 12.4/34, i.e. EUR 3.1 billion. 

When this figure is compared with the reported 3.6 Billion seizures in CUP figures for 2020, it 
may  indicate  that  at  least  70-80%  of  cigarette  smuggling  was  not  detected  that  year  and  that 
there  is  significant  potential  for  further  reducing  the  harm  (health  damage  and  revenue  loss) 
caused by cigarette smuggling through better detection.  

6.4 Drugs 

The  trade  in  illicit  drugs  remains  the  largest  criminal  market  in  the  EU,  estimated  at  a 
minimum  retail  value  of  EUR  30  billion  per  year  in  the  EU  (Security  Union  strategy).  The 
overall assessment of EMCDDA (2022 report) is that drug availability and use remain at high 
levels across the European Union, although considerable differences exist between countries. It 
summarises its analysis of drug trends in 2022 as ‘Everywhere, Everything, Everyone’.  

Direct impacts are seen in those who develop problems and need treatment or other services. 
Within  the  European  Union,  drug  problems  complicate  other  important  issues  such  as 
homelessness, the management of psychiatric disorders and reducing youth criminality. Greater 
levels  of  violence  and  corruption  driven  by  the  drug  market  have  been  observed  in  some 
countries. 

The indirect consequences may be more hidden but are equally important. They include: 

  vulnerable young people being recruited into criminality, 

 

 

increased strain on health budgets, and 

the  costs  to  society  of  communities  that  feel  unsafe  or  where  institutions  are 
undermined by corruption and criminality. 

An important part of the wider response needed to tackle this complex challenge is interdiction 
of supply of illicit drugs. Underlying the drug problems in Europe is the continuing innovation 
in  the drug market,  which has led to  the overall high availability of an increasing number of 
different substances, often of high potency or purity. The 2022 report describes reducing both 
the importation of drugs into the European Union and production within the European Union 
as  key  policy  challenges.  Regarding  importation  into  the  EU,  a  matter  of  direct  concern  to 
customs supervision of the external border, the report finds that large shipments continue to 

(196)  

See also Report from the Commission to the Council and the European Parliament Progress report on the 
implementation  of  the  Commission  Communication  Stepping  up  the  fight  against  cigarette  smuggling  and 
other  forms  of  illicit  trade  in  tobacco  products  -  a  comprehensive  EU  strategy  (COM  (2013)  324  final  of 
6.6.2013) [COM/2017/0235 final]. OLAF had suggested that if all cigarettes sold on the black market were 
sold legally, the budget of the EU and its Member States would receive above EUR 10 billion annually. 

Page 267 / 291 

 
 
                                                      
be  detected  that  are  transported  using  methods  that  often  exploit  commercial 
infrastructure,  particularly  intermodal  container  shipments.  This  has  been  accompanied 
by  innovation  in  respect  to  new  trafficking  routes,  methods  for  concealment  and  new 
production processes. 

The  situation  is  dynamic  as  ‘developments  in  Afghanistan  could  change  drug  flows  in  ways 
that may have important future implications, and how the humanitarian crisis arising from the 
war on Ukraine could create new challenges for European drug services’.  

Along with the North American market, it is believed that the European market for cocaine 
is among the largest in the world. This development has been attributed to the potential for 
further growth in the consumption of cocaine, higher prices for cocaine compared to the North 
American market as well as lower risks of interdiction and seizure. (197) 

Most  of  the  cocaine  seized  in  the  EU  is  transported  by  ship,  primarily  in  maritime 
shipping containers. Cocaine is trafficked to the EU directly from the producing countries as 
well as from neighbouring countries of departure in South America. Cocaine trafficking affects 
all Member States.  After arrival at  the  main EU distribution hubs,  cocaine shipments  are 
primarily trafficked by road transport in passenger vehicles and lorries to local markets (ref: 
EU SOCTA 2021). 

The Balkan routes remain the main entry routes for heroin trafficked to the EU. For the most 
part, heroin is trafficked along these routes in lorries hidden among legal freight and cover 
loads or in concealed compartments (EU SOCTA 2021). 

In some Member States, synthetic opioids, such as fentanyl and its analogues, may be partially 
replacing  heroin  as  the  preferred  substance  due  to  its  greater  potency  and  cheaper  price  (EU 
SOCTA 2021). 

Customs seize significant amounts of drugs every year. Aggregated figures for 2018-2020 are 
as follows: 

Seizures  in  2021  (592  tonnes,  up  15%  from  2020)  are  by  far  the  largest  reported  since  2012 
(CUP 2021). 

Organised criminal modus operandi in this area typically involve manipulation of legitimate 
or apparently legitimate traffic (as is seen in the occasional discovery of large quantities 
of cocaine in major supermarket chains in Europe) and rapid adaptation to detection in 
any one port or Member State. In this context, improvement of detection in the supply chain 
implies comprehensive, sophisticated analytical methods with the full data EU traffic picture in 
view  and  with  the  capacity  to  systematically  integrate  complementary  data  sources  (not  only 
the  declaration  data)  and  to  bring  intelligence  from  partner  authorities  to  bear  in  analytical 

(197)  

Global Initiative Against Transnational Organized Crime 2021, The cocaine pipeline to Europe. 

Page 268 / 291 

 
 
 
 
                                                      
processes  at  the  relevant  levels  (national  and  common,  as  operationally  appropriate).  The 
concept  of  supervision  strategy  is  equally  important  in  this  area  as  in  an  others,  to  ensure  a 
joined-up approach to the development and improvement of intelligence on organised criminal 
chains, the identification of risky consignments, and the appropriate use of customs controls. 

6.4 The parcel traffic dimension: a growing security risk factor 

Parcel traffic in postal and express consignments presents a unique set of security challenges 
for  the  citizens,  businesses  and  transport  supply  chains.  The  sheer  volume  of  small 
consignments  moving  across  the  borders  (billions  annually)  and  the  prevalence  of  direct 
shipments  to  private  persons  from  outside  they  EU  (which  were  not  covered  by  electronic 
data  requirements  at  all  before  2021)  make  it  very  difficult  to  pick  out  risky  parcels  for 
intervention. This problem is relevant for all the security threats referred to above, and indeed 
for the internal market and sustainability examples mentioned earlier.  

In this case, it us useful to illustrate this horizontal issue through some further short examples, 
namely aviation security, firearms, and new psychoactive substances. 

The  risk  of  an  improvised  explosive  or  incendiary  device  in  air  cargo  continues  to  be  of 
concern  for  counter-terrorism  stakeholders.  Following  the  Yemen  incident  of  (in  which  a 
viable explosive device travelled in an express consignment from Yemen towards Chicago via 
Frankfurt),  terrorist  groups  have  maintained  their  interest  in  exploiting  this  method.  As  of 
March  2021,  with  the  introduction  of  the  first  release  of  the  reformed  import  control  system 
(ICS2), customs now provides a comprehensive pre-loading security risk analysis operation 
for  all  postal  and  express  consignment  destined  for  the  EU.  This  complements  the  existing 
Aviation  Security  Regulations,  which  were  amended  in  parallel  to  provide  that  a  customs 
request  for  additional  screening  or  ‘do  not  load’  notification  under  the  UCC  now  triggers  an 
obligation on air transport operators and goods handlers to act under the AVSEC Regulations 
directly. The customs security screening operation is a complementary layer supplementing the 
AVSEC  regime  and  involves  close  co-operation  between  customs,  counter-terrorism  and 
AVSEC  authorities,  and  underpinning  an  urgent  multidisciplinary  crisis  response  in  case  of 
incident.  

Another emerging area of concern is the trafficking of firearms and their components through 
postal and express courier movements, and of new psychoactive substances. 

Customs  Union  Performance  data  indicates  that  in  2021,  EU  customs  authorities  seized  6 
496 pieces of firearms (across all modes of transport), a 58% increase in 2020 (4 105 pieces), 
due to an especially important seizure in one Member State (Germany). This was the highest 
figure  ever  reported  in  CUP.  The  amount  of  seized  ammunition  also  grew,  up  460%  from 
2020, due to two large seizures in the Netherlands.  

6.5 How would the options perform? 

The  operational  logic  for  contribution  of  the  options  in  this  case,  as  well  as  the  timing 
assumptions  for  the  start  of  benefits,  are  in  general  the  same  as  in  the  Toy  Safety  case,  as 
explained in section 5.1.3. There are some important distinctions however, which imply some 
nuance in the assessment, notably: 

 

the nature of the co-operation relationships required and the general operational sensitivity; 
some  security  or  criminal  intelligence  may  need  to  be  applied  in  national  environments 

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(partner  authorities  are  less  likely  to  make  details  widely  available  for  obvious  reasons, 
whether within their own organisations or with third party authorities);  

 

the  possibility  that  law  enforcement  actions  other  than  customs  control  may  be  taken  in 
certain circumstances (e.g. controlled deliveries based on national arrangements)  

  greater  sophistication  in  concealment  and  other  elements  of  modus  operandi  in  this  area; 

greater difficulty of detection (more ‘needle in a haystack’ aspects) 

 

 

 

the need  for intervention before loading in  the  case of serious security threats  such  as an 
explosive device, or on arrival or unloading for other threats in general 

the  law  enforcement  and  security  domain  naturally  focuses  more  on  co-operation  in 
combating  general  serious 
than  detailed 
harmonising legal acts typical of single market and sustainability policies. 

trans-national  offence  categories  rather 

there  is  more  customs  experience  with  common  risk  criteria  for  safety  and  security  in 
general,  and  for  aviation  security  in  particular  –  these  are  being  implemented  by  the 
Member  States,  and  an  EU  ‘do-not-load’  procedure  is  supported  for  aviation  security 
through ICS2 

  At the EU level, specific Agencies (such as Europol or Frontex) and Council fora (COSI, 
and the Law Enforcement Working Party – Customs section) are active in related areas. 

Option 1 

The  examples  described  several  instances  of  security  threat  (and  of  course  more  could  have 
been listed) – drugs precursors, drug trafficking in containers, cigarettes, aviation security, and 
firearms, as well as the broader aspect of traffic in small parcels.  

The use of  ICS2 Safety  and Security analytics  could  improve targeting and improvements in 
detection of specific consignments and supply chains would be delivered, limited however by 
the  legal  and  governance  context  for  the  (fragmented)  information  environment  which  will 
continue  to  impede  the  sharing  and  integration  of  additional  reference  data  in  support  of 
targeting. The pace of delivery of projects would not match the pace of adaptation of security 
threats  (a  particularly  acute  problem  in  this  domain,  where  the  concealment  efforts  are 
relatively  sophisticated).  Individual  successes  would  not  be  converted  to  any  significant, 
consistent improvement EU-wide interdiction. Effectiveness and efficiency of security controls 
across the EU would continue to  vary largely as today. With this option customs would lack 
the framework/capacity to deliver and maintain up to date, agile, responsive EU level common 
risk management. Customs could continue with the current EU common Priority Control Area 
(PCA) approach in the security domain - it may be noted however that since the inception of 
the PCA concept  in  2006, there have been a total  of 6 PCAs, averaging  one every two-three 
years.  

Option  1  does  not  provide  a  basis  for  a  significant  improvement  in  outcomes  in  this  case.  It 
may  support  limited  progress  in  certain  areas  (such  as  promoting  greater  voluntary 
collaboration  between  security  and  customs  for  intelligence-based  targeting  in  the  aviation 
security area, and supporting voluntary limited-scale pilot actions aimed at improving mutual 
co-operation  between  customs  and  other  authorities).  New  data  would  be  provided  from  e-
commerce  platforms  and  MS  could  use  this  to  improve  their  understanding  of  parcel  trade 
flows and to narrow somewhat the filter for flows which may involve security risks. However 
the ability of MS to protect each other in common customs supervision would not significantly 
increase compared with the baseline, taking account of the adaptation of illicit traffic. 

Page 270 / 291 

 
 
The Trust and check procedure is much less relevant for security threats. An important modus 
operandi  for  organised  crime  is  to  ‘hijack’  legitimate  supply  chains  (see  –  cocaine  found  in 
supermarket warehouses). 

Option 2 

In this option, the main difference from Option 1 is that a common risk management approach 
is developed and co-ordinated by the Authority.  

The Authority would work with other EU Agencies and services and national authorities on the 
development  of  the  co-operation  framework  on  a  risk-by-risk  basis.  It  would  host  multi-
disciplinary  events  and  ongoing  processes  to  engage  both  customs  and  partner  authorities  in 
developing operations and co-operation. It would arrange joint analytical projects involving 
both  customs  and  partner  authorities,  to  analyse  all  available  information  using  available 
capabilities (primarily the tools developed for the Joint Analytics Capabilities, notably those in 
ICS2 analytics and Surveillance). It would promote the central sharing by partner authorities of 
risk information for common use in this context.  

The  effectiveness  and  efficiency  of  this  would  be  limited  by  the  extent  to  which  MS  would 
agree  to  share  information  which  they  received  directly  in  their  national  environments  from 
trusted  operators  and  from  e-commerce  platforms.  Progress  would  also  be  limited  by  the 
division  of  responsibilities  for  data  governance  in  this  mode.  Data  protection  arrangements 
would  need  to  be  agreed  across  the  different  systems  and  the  process  for  Member  States 
customs (as data controllers) agree to include their flows in the scope of a targeting project for 
toys  would  be  lengthy  and  duplicative.  The  Authority  would  not  have  the  full  EU  customs 
picture  in  terms  of  data  provided  to  customs  or  in  terms  of  risk  analysis  or  control  results 
arising. Outside of the advance cargo information, the Authority would not be in a position to 
prepare,  test  or  implement  common  indicators  directly  on  the  real-time  flow  of  customs 
operations.  

Nonetheless,  as  compared  with  Option  1,  the  Authority  would  be  able  to  co-ordinate  an 
important  step  forward  in  common  understanding  and  approach  by  working  closely  with 
Member States customs authorities and benefiting from the political prioritisation of this work. 
The involvement of all Member States directly in the structure of the Authority would, coupled 
with  the  political  mandate  from  the  Council,  improve  ‘buy-in’  to  the  Authority’s  operational 
support role.  

Option 3 

This  would  deliver  a  better  information  environment  for  policy  action.  It  would  enable 
Commission  officials  and  national  experts  to  work  together  on  assessing  data  in  common 
targeting projects  to  the extent that MS customs agree.  Based on current  resource limitations 
and working methods, security and law enforcement partners could be encouraged to share risk 
information with national authorities for use in common targeting projects (not limited to one 
MS). Domain specialists (enforcement and technical) in the areas of cigarette smuggling, drugs 
precursors,  new  psychoactive  substances,  firearms,  aviation  security  and  narcotics  could  be 
invited to support the relevant projects with additional data and expert perspectives, within the 
limits of the Commission and Member States capacities to organise and support the necessary 
multidisciplinary projects. 

Development  of  non-binding  common  indicators  could  be  accelerated  (covering  the  cases 
mentioned over 1-2 years). Interoperability, to include non-customs data in processing could be 
delivered more quickly than the baseline but its practical deployment would be affected by the 

Page 271 / 291 

 
 
governance aspects (timing and scope of agreement of use of the data in connection with which 
MS flows). 

Effectiveness  and  efficiency  of  implementation  across  the  EU  would  continue  to  vary. 
However, as compared with options 1 and 2, the tools for detection of specific consignments 
would be better and targeting actions could be prepared more quickly.  

The  practical  exploitation  of  the  improved  information  environment  and  tools  would  be 
constrained by the extent to which Member States customs agree to include their flows in the 
scope  of  a  targeting  project  in  each  of  the  cases.  The  legal  and  governance  context  for  the 
information  environment  would  likely  continue  to  impede  the  sharing  and  integration  of 
additional  reference  data  in  support  of  targeting,  due  to  the  decision-making  structure  which 
would still depend on voluntary agreement across MS (as controllers) to share data and the lack 
of an actor with a mandate to drive the setting up of analytics operations.  

The  technical  improvement  in  the  information  environment  would  likely  be  under-exploited 
and  the  return  on  investment  would  be  reduced.  Adaptation  speed  in  practice  would  not 
increase  significantly  due  to  the  governance  constraints.  In  so  far  as  some  Member  States 
would  significantly  increase  their  national  detection,  the  illicit  supply  chains  may  re-route 
quickly to those MS which do not, and the overall EU ability to detect such changes may have 
gaps  (related  to  scope  of  projects)  or  delays  (related  to  the  time  at  which  the  common 
performance picture can be effectively analysed and shared). 

Option 4 

With this  option, the Authority  critical  mass would allow for all  six cases to  be addressed in 
parallel rather than in batches in sequence.  

The Authority would prepare the EU supply chain supervision strategy for each case. As part 
of  this  process  it  would  bring  together  domain  knowledge  (technical  and  enforcement)  and 
customs  knowledge  and  analyse  all  EU  consignments  (including  e-commerce  flows).  The 
Authority would arrange rapid mutual training of experts on concepts and on the EU customs 
tools.  The  supervision  strategy  would  clarify  the  situations  in  which  a  control  would  be 
appropriate. This would take account of operational needs (for example, in the security domain, 
there may be cases where a controlled delivery, ‘do-not-load’ or other non-intrusive action is 
appropriate). 

The  Authority  would  use  the  dataspace  directly  to  create  virtual  analytics  projects  for  each 
case,  bringing  customs  and  security  domain  experts  together,  to  design  operational  targeting 
indicators  and  performance  feedback  to  be  applied  to  inbound  traffic.  The  scope  of  the 
targeting would include all supply chain steps, as the customs information environment would 
have information on all customs processes up to release.  

The  Authority  could  further  improve  targeting  through  a  more  structured,  data-driven 
collaboration  (based  on  exchange  of  information,  generation  of  intelligence  and  co-operative 
operational planning for operations with EU-wide customs supervision impact) with Europol, 
OLAF  (cigarettes)  or  Frontex.  The  Authority  could  participate  on  behalf  of  EU  customs  in 
relevant  EU  security  and  law  enforcement  policy  actions,  and  could  initiate  customs  actions 
and invite the EU services to participate in them.  

The  Authority  will  organise  the  development  of  the  co-operation  framework  and  support 
connections  and  mutual  training  between  customs  experts  and  the  domain  specialists.  This 
concerns both enforcement and also technical specialists, as some domains, such as precursors, 

Page 272 / 291 

 
 
demand  very  specific  technical  knowledge.  The  Authority  would  develop  and  sustain  the 
relevant networks across the EU (it would have file leaders for risk management and horizontal 
co-operation in each case). 

The  Authority  would  look  after  data  governance  and  role  issues  using  pre-defined  project 
definition tools with built-in data protection compliance working methods and system controls, 
enabling  the  data  to  be  used  on  an  EU-wide  basis  for  common  risk  management,  using  EU 
customs data from all processes and linked data from other sources. It would work with partner 
services and authorities on specific issues relating to information security. 

As a complementary measure, the Authority would rapidly prepare interoperability ‘mini-apps’ 
to connect customs data to data from each partner authority (as controller of the customs data, 
the  Authority  would  be  able  to  take  the  operational  decision  to  carry  out  this  processing 
operation).  Constraints  for  interoperability  would  therefore  be  primarily  on  the  partner 
authority side. The Authority could also ensure the systematic integration in real-time customs 
risk analysis of complementary data sources  regarding supply  chain  movement  (for example, 
container  movement  histories,  commercial  reference  databases,  etc.)  which  would  assist  in 
identifying legitimate supply chains at risk of exploitation by organised criminal groups.  

As  e-commerce  platform  information  would  be  available  in  the  customs  information 
environment in this option, the Authority would systematically integrate it at consignment level 
and operator (importer) account level, further enriching analysis – improving the discovery of 
bad supply chains and the operational targeting.  

The Authority would create more effective and efficient targeting indicators based on advanced 
contextual data analytics methods and deeper datasets as the Authority would have the critical 
mass – combination of data scientists and management of the EU Customs Data Space. This is 
particularly  important  in  the  context  of  security  threats,  which  tend  to  use  sophisticated 
concealment  methods,  and  where  one  standard  source  of  data  may  not  be  sufficiently 
informative. 

The Authority would analyse operational results to provide periodic information and indicators 
for  performance  of  this  EU  policy  (outcomes  from  customs  supervision).  This  information 
would be systematic and granular, showing where actions had been and highlighting the added 
value of EU action. 

This  activity  would  be  a  mix  of  continuous  high-quality  targeting,  intense  short-term  urgent 
actions  (responding  to  emerging  risks),  and  a  strategic  analysis/review  cycle  with  sustained, 
multidisciplinary attention to the six threat areas. 

Outcomes  under  this  option  would  be  significantly  improved  compared  with  1-3.  Security 
threats  and  their  full  EU  scope  would  be  much  better  identified,  including  for  e-commerce 
supplies [this visibility is not currently available to any authority].  

In the case of an urgent priority targeting operation, the Authority would arrange for immediate 
deployment of customs targeting, pan-EU (indicators would be prepared in hours or days rather 
than months or years). The Authority would provide 24/7/365 support. 

Compared  with  the  baseline  and  Options  1-3,  this  option  will  also  reduce  the  duration  of 
exposure to this harm and its impact from a given supply chain. 

Customs and trade control resources would be used more efficiently (fewer wasted checks). 

Page 273 / 291 

 
 
6.6 Summary indicators 

6.6.1 Qualitative benefits 

Regarding consumer health protection: the effectiveness score lower in these examples than for 
Toy  safety  or  in  the  prevention  of  revenue  loss  case,  because  of  the  differences  in  terms  of 
consumption habits and risk tolerance. 

BENEFITS (Qualitative) 

Effectiveness 

Overall (General Objective) 

SO 1 – Strengthen EU customs risk management 

SO 4 – Data access/use for strategic customs action 

SO 5 – Enable the Customs Union to act as one 

Protection outcomes - Security: 

Consumers:  Reduced health risk (cigarettes, narcotics, NPS) 

Protection outcomes – Financial – revenue loss (cigarettes) 

Efficiency 

Avoided unnecessary inspections and controls; transfer of 
effort to higher impact interventions 
Coherence with other EU policy objectives 
EU Serious and Organised Crime Threat Assessment 
(SOCTA) 

Drugs precursors ( (198)) 
Civil Aviation Security  ( (199)) 

Tobacco smuggling 

Strategic capability 

Co-operation framework support 

Strategic planning support 

EU-wide trade flow visibility 

EU-wide performance visibility 

Adaptability (time to market) 

1
n
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2
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3
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o
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4
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t
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O

* 

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* 

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* 

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**** 

**** 

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** 

** 

** 

** 

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* 

* 

* 

* 

* 

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(198) Council Regulation (EC) No 111/2005 of 22 December 2004 laying down rules for the monitoring of trade 

between the Community and third countries in drug precursors (OJ L 22, 26.1.2005, p. 1). 

(199) Regulation (EC) No 300/2008 of the European Parliament and of the Council of 11 March 2008 on common 
rules in the field of civil aviation security and repealing Regulation (EC) No 2320/2002 (OJ L 97, 9.4.2008, p. 
72). 

Page 274 / 291 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                      
This  also  contributes  to  the  EU’s  activity  relating  to  international  instruments  such  as  the 
1988 UN  Convention  against  Illicit  Traffic  in  Narcotic  Drugs  and  Psychotropic  Substances, 
and bilateral agreements with 3rd countries  to prevent drug precursors' diversion by monitoring 
licit  trade,  and  the  WHO  Convention  on  Tobacco    Control  (see  further  Illegal  tobacco 
(europa.eu)).  

Page 275 / 291 

 
 
6.6.2 Quantitative benefits scenarios 

The overall baseline assumption is that cigarette smuggling continues to be an important issue as it has for the last decade and that concealment of large 
quantities in commercial transport continues to be an important modus operandi.  If a similar approach is taken to the quantification in Ecodesign, and 
conservative (small) improvements in detection were to be attributed to the options according to their different effectiveness, impact scenarios might be 
identified as follows: 

Baseline   EUR 3.1B 

Revenue loss prevention 

Direct annual gain 

Option 1 

Option 2 

Option 3 

Option 4 

 +2% 

+4% 

+4% 

+8% 

EUR 62 m 

EUR 124 m 

EUR 124 m 

EUR 248 m 

The scenario is annualised in the table below. For timing assumptions, see section 2.  In this case it is assumed that savings start from Y4 and this is a 
Council priority.  

All values are estimates, relative 
to baseline. In €Million. 
BENEFITS (consumer cost saving) 
Option 1 
Option 2 
Option 3 
Option 4 

Phase 1 

Phase 2 

Phase 3 

Y1 

Y2 

Y3 

Y4 
62 
124 
124 
248 

Y5 
62 
124 
124 
248 

Y6 
62 
124 
124 
248 

Y7 
62 
124 
124 
248 

Y8 
62 
124 
124 
248 

Y9 
62 
124 
124 
248 

Y10 
62 
124 
124 
248 

Y11 
62 
124 
124 
248 

Y12 
62 
124 
124 
248 

Y13 
62 
124 
124 
248 

Y14 
62 
124 
124 
248 

Y15 
62 
124 
124 
248 

Total 
744 
1 488 
1 488 
2 976 

These  scenarios  are  not  forecasts.  They  illustrate  how  significant  capability  differences  between  the  options  could  be  reflected  in  performance 
differences, taking account of small relative improvements and taking account of a small proportion of the potential benefits. 

276 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
SUMMARY TABLES: OVERALL COMPARISON OF THE COST AND BENEFITS OF THE OPTIONS 

In the tables in this section, the expression “savings in compliance costs” refers to the overall aggregate “bottom line”, industry-wide, after the increase in outlay on  
customs duty on e-commerce parcel consignments is netted off against the ongoing administrative savings which come from the reform. 

277 

 
 
 
 
 
7.1 Option 1 (quantitative) 

Page 278 / 291 

 
 
 
7.2 Option 2 (quantitative) 

Page 279 / 291 

Increase with respect to baseline (million EUR)COSTS (quantitative)Y1Y2Y3Y4Y5Y6Y7Y8Y9Y10Y11Y12Y13Y14Y15Total1. Investment in new or updated IT (one-off)1.1011.0451.0401.0351.030433428422416413-106-112-118-124-1316.7722. Cost of maintaining IT (recurrent)-123954747049291.1471.0409268066815485455425395369.8003. Customs Staff (recurrent)10101074111767676767676765764. TOTAL MS costs (1+2+3)1.0991.4501.5241.7461.9621.5801.4681.3491.2991.17051850950049148117.1475. Investment in new or updated IT (one-off)361515151421111110001026. Cost of maintaining IT (recurrent)-310233436342720136-1-9-7-4-21777. Customs Staff (recurrent)0,71,42,25,87,21313,912,112,112,112,112,112,112,112,11418. TOTAL EU costs (5+6+7)3427405457484233262012468104209. Savings in compliance costs-1.171-1.171-1.171-1.171-1.171-1.630-1.661-1.784-1.784-1.784-1.784-1.784-18.06310. TOTAL costs (4+8+9)1.1331.4781.563630849458339212-306-472-1.254-1.271-1.278-1.285-1.293-496BENEFITS (quantitative)Y1Y2Y3Y4Y5Y6Y7Y8Y9Y10Y11Y12Y13Y14Y15Total11. Revenue from removing EUR 1501.0001.0001.0001.0001.0001.0001.0001.0001.0001.0001.0001.00012.000NET COST/ BENEFITS (10-11)1.1331.4781.563-370-151-542-661-788-1.306-1.472-2.254-2.271-2.278-2.285-2.293-12.496Additional examples - illustrative scenarios not taken into account12. Revenue loss prevention  -  cigarettes 1241241241241241241241241241241241241.48813. Consumers' saving - Ecodesign 5365365365365365365365365365365365366.435Reduction of the business administrative costs, even considering the increase in duties from removing EUR 150 thresholdMember States - administrative costsOPTION 2 - Phase 1 Building reporting tool for platformsOPTION 2 - Phase 2Adapting national IT environments to simpler processes OPTION 2 - Phase 3 Operators applying simpler processes progressivelyEU services - administrative costs 
 
 
7.3 Option 3 (quantitative) 

Page 280 / 291 

Increase with respect to baseline (million EUR)COSTS (quantitative)Y1Y2Y3Y4Y5Y6Y7Y8Y9Y10Y11Y12Y13Y14Y15Total1. Investment in new or updated IT (one-off)-118-123-1-6-11-144-149-155-161-164-170-176-182-188-194-1.9422. Cost of maintaining IT (recurrent)-12-169-294-445-607-774-948-1.147-1.353-1.568-1.786-1.803-1.819-1.832-1.845-16.4023. Customs Staff (recurrent)-8-24-41-41-41-22-22-22-22-22-22-22-3094. TOTAL MS costs (1+2+3)-130-292-295-459-642-959-1.138-1.343-1.535-1.754-1.978-2.001-2.023-2.042-2.061-18.6535. Investment in new or updated IT (one-off)2739908989607777776664556. Cost of maintaining IT (recurrent)2239791441631631411301321371521581551551521.9237. Customs Staff (recurrent)0369131313131313131313131438. TOTAL EU costs (5+6+7)49781722392612361611501511571721771741731702.5229. Savings in compliance costs-1.171-1.171-1.171-1.339-1.506-1.972-2.140-2.140-2.140-2.140-2.140-2.140-2.140-23.30610. TOTAL costs (4+8+9)-81-214-1.294-1.390-1.552-2.061-2.484-3.165-3.524-3.737-3.945-3.963-3.989-4.008-4.030-39.437BENEFITS (quantitative)Y1Y2Y3Y4Y5Y6Y7Y8Y9Y10Y11Y12Y13Y14Y15Total11. Revenue from removing EUR 15001.0001.0001.0001.0001.0001.0001.0001.0001.0001.0001.0001.0001.00013.000NET COST/ BENEFITS (10-11)-81-214-2.294-2.390-2.552-3.061-3.484-4.165-4.524-4.737-4.945-4.963-4.989-5.008-5.030-52.437Additional examples - illustrative scenarios not taken into account12. Revenue loss prevention  -  cigarettes 1241241241241241241241241241241241241.48813. Consumers' saving - Ecodesign 545365365365365365365365365365365365366.489Reduction of the business administrative costs, even considering the increase in duties from removing EUR 150 thresholdOPTION 3 - Phase 1Build seed of data space for e-commerceOPTION 3 - Phase 2 Build data spaceOPTION 3 - Phase 3Operators progressively operating in data space - phase out of national IT systemsMember States - administrative costsEU services - administrative costs 
 
 
 
 
7.4 Option 4 (quantitative) 

Page 281 / 291 

Increase with respect to baseline (million EUR)COSTS (quantitative)Y1Y2Y3Y4Y5Y6Y7Y8Y9Y10Y11Y12Y13Y14Y15Total1. Investment in new or updated IT (one-off)-182-187-128-133-139-208-213-219-224-228-234-240-246-252-258-3.0902. Cost of maintaining IT (recurrent)-12-179-333-503-683-870-1.063-1.272-1.487-1.711-1.939-1.965-1.992-2.014-2.036-18.0563. Customs Staff (recurrent)-29-57-86-86-86-94-94-94-94-94-94-94-1.0024. TOTAL MS costs (1+2+3)-194-366-461-665-879-1.163-1.362-1.576-1.805-2.033-2.267-2.299-2.331-2.360-2.388-22.1495. Investment in new or updated IT (one-off)3146102115115629889881413135596. Cost of maintaining IT (recurrent)2241831501701721501391411461631701691671662.0487. Customs Staff (recurrent)11269131620232323232323232308. TOTAL EU costs (5+6+7)54881872702932461741681721781942012062032022.8379. Savings in compliance costs-1.171-1.171-1.171-1.436-1.701-2.323-2.589-2.589-2.589-2.589-2.589-2.589-2.589-27.09410. TOTAL costs (4+8+9)-140-278-1.444-1.565-1.756-2.353-2.889-3.732-4.222-4.444-4.661-4.686-4.714-4.745-4.775-46.406BENEFITS (quantitative)Y1Y2Y3Y4Y5Y6Y7Y8Y9Y10Y11Y12Y13Y14Y15Total11. Revenue from removing EUR 1501.0001.0001.0001.0001.0001.0001.0001.0001.0001.0001.0001.0001.00013.000NET COST/ BENEFITS (10-11)-140-278-2.444-2.565-2.756-3.353-3.889-4.732-5.222-5.444-5.661-5.686-5.714-5.745-5.775-59.406Additional examples - illustrative scenarios not taken into account12. Revenue loss prevention  -  cigarettes 248248248248248248248248248248248248297613. Consumers' saving - Ecodesign 1.2871.2871.2871.2871.2871.2871.2871.2871.2871.2871.2871.28715.444Reduction of the business administrative costs, even considering the increase in duties from removing EUR 150 thresholdOPTION 4 - Phase 1Build seed of data OPTION 4 - Phase 2 Build data spaceOPTION 4 - Phase 3Operators progressively operating in data space - phase out of national IT systemsMember States - administrative costsEU services - administrative costs 
 
 
 
 
Page 282 / 291 

 
 
 
7.5 Summary of costs and benefits – comparison of options (quantitative and qualitative) 

Million EUR – change compared to baseline 

Option 1 

Option 2 

Option 3 

Option 4 

QUANTITATIVE COSTS/BENEFITS (€M/15yrs) 
EU Services – direct implementation administrative costs 

Information Technology                         
5. One-off 
6. Recurrent 
Other costs (staff) 
7. Recurrent 
Member States – direct implementation administrative costs 

67 
29 

baseline 

102 
177 

141 

455 
1 923 

559 
2 048 

143 

230 

Information Technology              
1. One-off 

2. Recurrent 
Other costs (staff_      
3.Recurrent 
Business/Trade      

9. Recurrent (net of additional e-commerce duty 
costs) 
Revenue collection      

6 772 

9 800 

6 772 

9 800 

-1 942 

-3 090 

-16 402 

-18 056 

703 

576 

- 309 

- 1002 

-18 063 

-18 063 

- 23 306 

-27 094 

11. Revenue collection removing EUR 150 exemption 

12 000 

12 000 

13 000 

NET BENEFITS 

12 693 

12 496 

52 437 

Additional benefits scenarios - illustrative (not taken into account): 

12. Cigarettes (revenue loss prevention scenario) 
13. Ecodesign example - consumer saving  
QUALITATIVE BENEFITS 
Effectiveness 
Overall (General Objective) 
SO 1 – Strengthen EU customs risk management  
SO 2 – Reduce burden and simplify procedures 
SO 3 – Level playing field - e-commerce  
SO 4 – Data access/use for strategic customs action 
SO 5 – Enable the Customs Union to act as one 
Protection outcomes (case studies) 
      Single Market and Sustainability 
      Security 
      Revenue  
Efficiency 
Overall efficiency 
Proportionality 
Overall proportionality  
Coherence  
Overall policy coherence 
Strategic capability 

744 
3 861 

1 488 
6 435 

1 488 
6 489 

* 
* 

** 
*** 
** 
* 

* 
* 
* 

* 

** 

* 
* 

** 
** 

** 
*** 
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*** 

** 
** 
** 

** 

** 

** 
** 

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**** 
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13 000 

59 406 

2 976 
15 444 

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283 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
284 

 
 
 
 
 
Annex 10 - Acronyms and definitions 

Acronym 

Explanation 

AEO 

BCP 

B2C 

CAPEX 

CCEI 

CCI 

CELBET 

CEPOL 

CN  

CPG 

CRMS 

CUP 

Authorised  Economic  Operator:  EU  trusted  traders 
programme.  Traders  that  meet  certain  criteria  are 
entitled to enjoy benefits across the EU and can work 
in close cooperation with customs authorities to assure 
the common objective of supply chain security. 

Border Crossing Point: Any crossing point authorised 
by  the  competent  authorities  for  the  crossing  of 
external EU borders. 

Business  to  Consumer:  sale  of  goods  or  services 
directly to customers for their own use, rather than to 
businesses. 

Capital  Expenditures:  money  that  is  spent  to  acquire, 
repair, update, or improve a fixed company asset, such 
as  a  building,  business,  or  equipment.  It  is  different 
from  an  everyday  business,  which  falls  under  the 
operating expense category (OPEX) 

Customs Control Equipment Instrument 

Centralised  Clearance  at  Import:  simplification  that 
allows  economic  operators  to  declare  goods  in  one 
Member  State  (Supervising  Customs  Office)  and 
present them in a different Member State (Presentation 
Customs  Office).  This  allows  economic  operators  to 
centralise  the  accounting  and  payment  of  customs 
duties  for  all  their  customs  transactions  in  the 
Supervising Customs Office 

Customs  Eastern  and  South-Eastern  Land  Border 
Expert Team 

European  Union  Agency  for  Law  Enforcement 
Training 

Combined Nomenclature 

Customs Policy Group 

Customs Risk Management System 

Customs Union Performance 

Customs Declaration 

The act  whereby  a person indicates, in  the prescribed 
form and manner, a wish to place goods under a given 

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Customs Authorities 

Customs Controls 

Customs formalities 

Customs fraud 

Customs legislation 

Customs procedure 

Customs Union 

customs  procedure,  with  an 
indication,  where 
appropriate, of any specific arrangements to be applied 
(as  defined  in  Article  5(12)  of  Regulation  (EU) 
952/2013). 

the  Member  States 
Customs  administrations  of 
responsible  for  applying  the  customs  legislation  and 
any other authorities empowered under national law to 
apply certain customs legislation (as defined in Article 
5(1) of Regulation (EU) 952/2013).  

to  ensure  compliance  with 

Specific  acts  performed  by  the  customs  authorities  in 
the  customs 
order 
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 (as defined in Article 5(3) 
of Regulation (EU) 952/2013). 

All operations carried out by an economic operator or 
customs 
customs 
legislation. 

comply  with 

authorities 

to 

Any  act,  which  a  person  deceives,  or  attempts  to 
deceive,  the  customs  and  thus  evades,  or  attempts  to 
evade,  wholly  or  partly,  the  payment  of  import  or 
export  duties  and 
the  application  of 
taxes  or 
prohibitions or restrictions laid down by the regulatory 
provisions  enforced  or  administered  by  the  customs 
administrations. 

The  body  of  legislation  made  up  of  all  of  the 
following:  
(a)  the  Code  and  the  provisions  supplementing  or 
implementing it adopted at Union or national level;  
(b) the Common Customs Tariff;  
(c) the legislation setting up a Union system of reliefs 
from customs duty;  
international  agreements  containing  customs 
(d) 
provisions, insofar as they are applicable in the Union 
(as  defined  in  Article  5(2)  of  Regulation  (EU) 
952/2013). 

Any  of  the  procedures  (release  for  free  circulation, 
special procedures, export) under which goods may be 
placed in accordance with the Union Customs Code. 
The  merger  of  two  or  more  customs  territories  with 
the  effect  that  (Art.  XXIV  GATT  and  Art.  23  EC 
Treaty) 

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CWP 

DA 

Data model 

Digitalisation 

DS 

DSA 

EBTI 

ECA 

ECDC 

ECHA 

EEA 

EMCDDA 

ENS 

EO 

Economies of scale 

Export 

Exclusive competence 

ETCIT 

EU 

EU-LISA 

  customs  duties  and  non-tariff  barriers  are 
eliminated  between  the  members  of  the  union  for 
substantially all trade, and  

  a  common  customs  tariff  and  common  rules  for 
non-tariff  barriers  are  introduced  for  substantially 
all trade with non-member countries. 

Commission Working Programme 

Delegated Act 

The process of defining how the logical structure of a 
database  is  modelled,  using  text  and  symbols  to 
represent the way data needs to flow. 

The  method,  practice,  or  process  of  converting 
(usually analog) information into a digital form, which 
is computer-readable. 

Data Space 

Digital Services Act 

European Binding Tariff Information 

European Court of Auditors 

European Centre for Disease Prevention and Control 

European Chemicals Agency 

European Environmental Agency 

European  Monitoring  Centre  for  Drugs  and  Drug 
Addiction 

Entry Summary Declaration 

Economic Operator: a person who, in the course of his 
or her business, is involved in activities covered by the 
customs  legislation  (as  defined  in  Article  5(5)  of 
Regulation (EU) 952/2013). 

A proportionate saving in costs gained by an increased 
level of production. 

The customs procedure for taking Union goods out of 
the  customs  territory  of  the  Union  (as  defined  in 
Article 269 of Regulation (EU) 952/2013). 

Areas  in  which  the  EU  alone  is  able  to  legislate  and 
adopt  binding  acts  (Article  3  of  the  Treaty  on  the 
Functioning of the European Union - TFEU). 

Expert Team for Centralised IT customs applications 

European Union 

European  Agency  for  the  operational  management  of 
large-scale IT systems in the area of freedom, security 

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EUROPOL 

EU SWE-C 

FCM 

FGAS 

FLEGT 

FTE 

and justice 

European  Union  Agency  for  Law  Enforcement 
Cooperation  

EU Single Window Environment for Customs  

Food Contact Materials 

Fluorinated Gases 

Forest Law Enforcement, Governance and Trade 

Full Time Equivalent 

FRONTEX 

European Border and Coast Guard Agency 

GDPR 

GHGs 

GPSR 

IA 

ICS / ICS2 

Import 

Improved compliance 

ICSMS 

IOSS 

IPR 

JAC 

JCO 

JRC 

Labour costs 

General Data Protection Regulation 

Greenhouse Gases 

General Product Safety Regulation 

Implementing Act 

Import Control System 

The act of bringing or causing any goods to be brought 
into a customs territory. 

The  principle  of  seeking  to  continually  improve  the 
level  of  voluntary 
customs 
legislation. 

compliance  with 

Information  and  Communication  System  for  Market 
Surveillance  

Import One Stop Shop: the electronic portal to comply 
with  the  VAT  e-commerce  obligations  on  distance 
sales  of  imported  goods  from  third  countries  since  1 
July 2021. It allows suppliers and electronic interfaces 
selling imported goods to buyers in the EU to collect, 
declare and pay the VAT to the tax authorities, instead 
of making the buyer pay the VAT  at  the moment  the 
goods  are  imported  into  the  EU  as  it  was  previously 
the case (for products over 22 EUR). 

Intellectual Property Rights 

Joint Analytic Capabilities 

Joint Customs Operations 

Joint Research Centre 

Sum  of  all  wages  paid  to  employees,  as  well  as  the 
cost of employee benefits and payroll taxes paid by an 
employer. 

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Level playing field 

Multi-Annual  Strategic  Plan 
Customs (MASP-C) 

for 

A  set  of  common  rules  and  standards  that  prevent 
businesses  in  one  Member  State    undercutting  their 
rivals and gaining a competitive advantage over those 
operating in other Member States. 

Overall  project  management  tool  prepared  by  the  EU 
Commission  in  partnership  with  Member  States  to 
ensure operational planning and implementation of all 
e-Customs IT projects. 

One-off cost 

A cost that is paid once and not repeated. 

NCTS 

NGO 

NPS 

ODS 

OECD  

OPEX 

One-stop shop 

Partner competent authority 

Phased implementation 

Phytosanitary 

P&R 

New Computerised Transit System 

Non-Governmental Organisations 

New Psychoactive Substances 

Ozone Depleting Substances 

Organisation 
Development 

for  Economic  Co-operation 

and 

Operational  Costs:  money  a  company  spends  on  an 
ongoing, day-to-day basis in order to run a business or 
system.  Depending  upon  the  industry,  these  expenses 
can range from the ink used to print documents to the 
wages paid to employees. 

Set  of  services  provided  by  customs  authorities  in 
close  cooperation  with  partner  competent  authorities 
whereby  in  respect  of  the  same  goods,  customs  and 
non-customs  controls  are  performed  at  the  same  time 
and  place,  as  referred  to  in  Article  47  of  Regulation 
(EU) 952/2013. 

Any  Member  State  authority  or  Commission  services 
that  have  the  legally  delegated  power  to  perform  a 
designated function in relation to the fulfilment of the 
relevant Union non-customs formalities. 

A  process  of  transition  from  an  existing  system  to  a 
new one that takes place in stages. 

Relating to the health of plants, especially with respect 
to the requirements of international trade. 

Prohibitions  and  Restrictions:  A  limited  range  of 
goods  prohibited  or  restricted  at  import  and  export, 
including  live  or  dead  animals  or  plants,  foodstuff, 
illegal  or  dangerous  goods,  products  of  endangered 
species,  protected  items  of  international  heritage, 
firearms, weapons or explosives, medicines, etc. 

Quota 

Any  pre-set  quantity,  authorised  for  importation  or 

Page 289  

 
 
 
RAPEX 

RASFF 

REACH 

Recurrent costs 

Release of goods 

Risk 

Risk management 

Sectorial legislation 

exportation of given goods, during a specified period, 
beyond  which  no  additional  quantity  of  these  goods 
can be imported or exported. (WCO) 

EU Rapid Alert System 

Rapid Alert System for Food and Feed 

Registration, 
Restriction of Chemicals 

Evaluation, 

Authorisation 

and 

The  costs  of  maintaining  and  operating  a  given 
programme  once  the  initial,  one-off  investment  has 
been completed. 

Act  whereby  the  customs  authorities  make  goods 
available  for  the  purposes  specified  for  the  customs 
procedure under which they  are placed (as  defined in 
Article 5(26) of Regulation (EU) 952/2013). 

The  likelihood  and  the  impact  of  an  event  occurring, 
with  regard  to  the  entry,  exit,  transit,  movement  or 
end-use  of  goods  moved  into  or  out  of  the  customs 
territory of the Union and to the presence within it of 
non-Union goods, which would a) prevent the correct 
application  of  Union  or  national  measures,  b) 
compromise the financial interests of the Union and its 
Member States, or c) pose a threat to the security and 
safety of the Union and its residents, to human, animal 
or plant health, to the environment or to consumers(as 
defined in Article 5(7) of Regulation (EU) 952/2013). 

Systematic  identification  of  risk,  including  through 
random  checks,  and 
implementation  of  all 
the 
measures  necessary  for  limiting  exposure  to  risk  (as 
defined 
(EU) 
in  Article  5(25)  of  Regulation 
952/2013). 

Body of legislation aiming at the protection of health, 
safety,  security,  environment,  cultural  goods  or 
imposing sanctions in the framework of the Common 
Foreign  and  Security  Policy  (CFSP)  affecting  the 
international  movement  of  goods.  Linked 
to 
prohibitions and restrictions. 

SDG 

Sustainable Development Goals 

Single window (concept) 

A  facility  that  allows  parties  involved  in  trade  and 
transport 
information  and 
documents  with  a  single-entry  point  to  fulfil  all 
regulatory 
import, 

lodge  standardized 

transit-related 

export, 

and 

to 

Page 290  

 
 
 
 
M-SME 

Supply chain 

Supporting documents 

SURV 

TARIC 

TCG 

TOR 

TS 

UCC 

VAT  

WTO  

WCO  

requirements (UNECE Recommendation No 33). 

Micro, Small and Medium Enterprise 

A  logistical  management  system  that  integrates  the 
sequence  of  activities  from  delivery  of  raw  materials 
to  delivery  of  the  finished  product  into  measurable 
components.    

Certificates,  attestations,  licences  and  permits  issued 
the 
by  partner  competent  authorities 
fulfilment of Union non-customs formalities. 

to  certify 

Surveillance IT system 

Tariff of the Community 

Trade  Contact  Group:  Commission  expert  group  that 
provides  a  platform  for  consultations  at  Union  level 
between  the  Commission  and  trade  representatives 
(business  associations,  organisations  and  federations, 
companies)  on  the  development  and  implementation 
of  customs  related 
issues  and  developments  of 
customs policy. 

Traditional Own Resource 

Temporary Storage 

Union  Customs  Code:  the  legal  package  that  defines 
the legal framework for customs rules and procedures 
in  the  EU  customs  territory.  The  UCC  legal  package 
entered  into  force  on  1  May  2016,  repealing  and 
for  customs 
replacing 
legislation,  contained  in  the  Community  Customs 
Code (Council Regulation (EEC) No 2913/92. 

the  previous 

framework 

Value Added Tax 

World Trade Organization 

World Customs Organization 

Page 291