COMMISSION STAFF WORKING DOCUMENT EXECUTIVE SUMMARY OF THE 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

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   EUROPEAN COMMISSION  Brussels, 17.5.2023  SWD(2023) 141 final  COMMISSION STAFF WORKING DOCUMENT  EXECUTIVE SUMMARY OF THE 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) 140 final}  
 
 
Executive Summary 

Impact assessment on the revision of Union customs legislation 

A. Need for action 

What is the problem and why is it a problem at EU level? 

The current system is not satisfactory.  The EU loses revenue. Illicit and non-compliant products enter 
the EU and put at risk EU citizens’ safety and security.  

1.  Customs  struggle  in  their  mission  to  protect  the  Union  financial  interests,  and  the  ever-increasing 
non-financial  requirements  under  sectoral  policies  (product  safety,  security,  protection  of  human, 
animal,  plant  health,  of  the  environment  etc.).  Co-operation  between  customs  and  other  competent 
authorities is not sufficient. 

2. Current customs processes require traders to provide similar information on goods several times in 
the  supply  chain  to  different  authorities  via  multiple  and  not  always  interoperable  IT  systems.  This 
creates administrative burden for legitimate operators. 

3. The customs model is not fit for e-commerce - the huge rise of e-commerce has changed the nature of 
trade,  from  goods  traditionally  brought  into  the  EU  in  big  quantities  via  cargo,  to  millions  of  small 
consignments  shipped  directly  to  individual  consumers.  Customs  is  not  prepared  to  cope  with  the 
increase of volumes of goods and declarations. 

4.  Data  quality,  access  and  analysis  is  limited  -  Although  customs  processes  are  digitalised,  the  data 
needed for carrying out customs supervision, risk analysis and controls are fragmented and duplicated 
across  multiple  systems  in  a  decentralised  customs  IT  infrastructure.  This  is  costly  for  customs 
authorities, not flexible and hampers an efficient use of data. 

5.  The  operational  implementation  in  Member  States  diverges  significantly  in  control  practices  and 
methods.  There  is  no  appropriate  EU  risk  analysis  to  properly  supervise  trade  flows  and  detect  non-
compliant trade.  

What should be achieved? 

The  Commission  wants  to  take  the  Customs  Union  to  the  next  level.  The  general  objective  is  that 
customs  authorities  in  the  EU  act  as  one,  for  stopping  non-compliant  goods,  collecting  more  customs 
duties and carrying out adequate controls without putting excessive burden on authorities and traders. 

The specific objectives are: 

-  Strengthen  EU  customs  risk  management  for  financial  and  non-financial risks,  by  having  an  EU 

view and analysis of the whole supply chain in real time. 

-  Reduce  the  administrative  burden  and  simplifying  the  procedures  for  traders,  consumers,  and 

customs authorities, without jeopardising effective customs supervision. 

-  Ensure a level playing field between e-commerce and traditional trade as regards customs, in line 

with the VAT rules. 

-  Enhance  access  to  and  use  of  customs  data  for  strategic  action,  to  improve  customs  supervision 

and ensure an integrated risk management approach. 

-  Enable the Customs Union to act as one by ensuring effective EU-wide protection, irrespective of 

where the good crosses the external border. 

What is the value added of action at the EU level (subsidiarity)? 

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Action  must take place at EU level. The Customs  Union is an exclusive competence, and an essential 
component  for  the  proper  functioning  of  the  Single  Market.  National  action  would  not  effectively 
address the problem. 

B. Solutions 

What are the various options to achieve the objectives?  Is  there a preferred option or not? If 
not,    why? 

Four options are considered to address the identified problem: 

1.  A package of simpler processes: clarifying the responsibilities of the actors, removing unnecessary 
steps  in  import  procedures,  introducing  measures  for  e-commerce  and  further  benefits  for 
transparent  traders,  under  the  current  digitalisation  model  and  the  existing  customs  governance 
structure. Simplification of processes with focused responsibility will increase effectiveness. 

2.  An  EU  Customs  Authority  for  co-ordination:  in  addition  to  step  one  above,  create  a  new  EU 
Customs  Authority  to  coordinate  cooperation  between  the  Member  States  in  risk  management, 
define uniform implementation of rules, and manage customs programmes. 

3.  A  central  EU  Customs  Data  Space,  managed  by  the Commission:  Simpler  customs  processes  and 
focused responsibility on actors to be implemented in a centralised IT model. The data space would 
facilitate  collecting  information  from  different  actors,  processing  it  for  EU  customs  risk 
management and exchanging it with other competent authorities. 

4.  An EU Customs Authority for coordination and operations, managing an EU Customs Data Space: 
Simpler  customs  processes  implemented  via  the  EU  Customs  Data  Space  managed  by  an  EU 
Customs  Authority  in  charge  of  (in  addition  to  option  2)  operational  risk  management,  data 
management and delivery of simplified processes. 

The  preferred  option is  4.  Its  three  elements  (reformed  customs  processes,  implemented in  a central 
EU Customs Data Space managed by an EU Customs Authority) reinforce each  other to deliver better 
results and create synergies across the EU. This is the most efficient option, as the investment in central 
structures significantly reduces the cost for Member States and businesses. 

What are different stakeholders' views? Who supports which option? 

Stakeholders largely  agree  on customs  authorities  acting  as  one,  simpler customs  processes  with  clear 
responsibilities  attached  on  each  step,  a  more  effective  cooperation  between  customs  and  other 
authorities,  and  simplified  provision  of  data  in  an  EU-level  IT  customs  environment.  There  is  no 
significant opposition to any of the potential elements of a customs reform. 

Customs  authorities  are  mostly  favourable  to  establishing  a  renewed  partnership  with  traders  in 
exchange for better access to data, but have different views on further expenditure in IT developments 
and the governance reform. 

C. Impacts of the preferred option 

What are the benefits of the preferred options (if any, otherwise of main ones)? 

-  Customs  supervision  is  strengthened.  Improved  access  to  and  processing  of  data  via  the  EU  
Customs Data Space will make EU risk management more efficient and increase customs’ capacity 
to detect fraud by profiling risky operators acting at  EU level. It will generate additional revenues 
for  the  Union  and  its  Member  States.  Improved  access  to  data  and  better  coordination  among 
authorities  will  increase  customs  capacity  to  detect  and  stop  goods  not  complying  with  Union 
requirements to the benefit of citizens and consumers.  

-  Administrative  burden  and  compliance  costs  for  legitimate  trade  are  reduced.  The  revised 
processes are simpler, information is  collected once from the right source via a single interface in 

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the EU Customs Data Space. 

-  Centralisation of functions (IT, data and risk management) in the EU Customs Authority results 
in  significant  savings for Member  States’  customs  IT  expenditure.  The  EU  Customs  Authority 
ensures coordination between national customs administrations and other authorities.  

-  E-commerce  playing  field  is  levelled  with  traditional  trade.  The  revised  processes  allow  e-
commerce actors to provide financial and non-financial information in a simpler manner and make 
them liable for it; consumers benefit from more transparency of prices and fees, less disruption of 
supply chains for fiscal formalities, and better protection against harmful goods.  

-  The Customs Union acts as one. The revised processes are delivered in a central EU Customs Data 
Space by a central EU Customs Authority to facilitate uniform implementation in all Member States 
and avoid divergences.   

What are the costs of the preferred options (if any, otherwise of main ones)? 

The costs of the preferred option to the Union budget are due to: 

-  The  central  development  of  the  EU  Customs  Data  Space.  Over  15  years,  the  EU  services 
would invest EUR 559 million more than the baseline (higher one-off investments required in the 
first  7  years)  and  EUR  2  billion  for  maintaining  the  data  space.  Centralisation  of  costs  would 
result in significant economic savings for the Member States IT expenditure.  

-  The  creation  of  an  EU  Customs  Authority  would  require  over  the  15-year  period  additional 
EUR  230  million  in  net  Full-time  Equivalent  (FTE)  costs  at  EU  level.  The  Authority  is 
progressively formed over 8 years and stabilises in year 9 with a total estimated staff of about 250 
FTE. 

Costs are estimated at current prices, based on the timing, transition and other assumptions indicated. 

What are the impacts on SMEs and competitiveness? 

The initiative is not expected to generate any adverse effects on SMEs. Its key elements are in line with 
SMEs’ expectations and priorities and will make it easier for SMEs to participate in external trade. The 
most  significant impact  on  SMEs  will  come  from  the  reform  of  customs  processes,  which  will  bring 
simplification  benefits  for  all  traders.  SMEs  manufacturers  will  benefit  from  the  measures  aiming  at 
reducing unfair competition from imported products that do not comply with EU rules and standards. 

Will there be significant impacts on national budgets and administrations? 

Centralisation in option 4 will decrease administrative costs for Member States, both IT and staff. 

In 15 years, in total, it is estimated Member States would save in the region of  EUR 21 billion in IT and 
an additional EUR 1 billion in staff time freed from current tasks. These benefits are estimated at current 
prices, based on the timing, transition and other assumptions indicated. 

Proportionality? 

The preferred option does not exceed what is necessary to fully address the problems, given the scale 
and severity of the challenges facing the customs union. 

D. Follow up 

The  monitoring  and  evaluation  is  facilitated  by  the  EU  Customs  Data  space,  and  implemented  by  a 
reinforced Customs Union performance measurement. 

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