COMMISSION STAFF WORKING DOCUMENT IMPACT ASSESSMENT REPORT on the Single Market and Customs Programme Accompanying the document Proposal for a Regulation of the European Parliament and of the Council establishing the Single Market and Customs Programme for the period 2028-2034 and repealing Regulations (EU)2021/444, (EU)2021/690, (EU)2021/785, (EU)2021/847 and (EU) 2021/1077
Date: 2025-09-03
Institutions: Directorate-General for Internal Market, Industry, Entrepreneurship and SMEs, European Commission
Subjects: EU programme, consumer protection, customs, customs cooperation, customs union, market supervision, single market

EN 

  EN 

   EUROPEAN COMMISSION  Brussels, 3.9.2025  SWD(2025) 592 final  COMMISSION STAFF WORKING DOCUMENT  IMPACT ASSESSMENT REPORT  on the Single Market and Customs Programme Accompanying the document  Proposal for a Regulation of the European Parliament and of the Council establishing the Single Market and Customs Programme for the period 2028-2034 and repealing Regulations (EU)2021/444, (EU)2021/690, (EU)2021/785, (EU)2021/847 and (EU) 2021/1077 {COM(2025) 590 final} - {SEC(2025) 592 final} - {SWD(2025) 593 final}  
 
 
Table of contents 

1. 

INTRODUCTION: POLITICAL AND LEGAL CONTEXT ............................................................... 4 

1.1.  Political and legal context ................................................................................. 4 
1.2.  Scope of this impact assessment ........................................................................ 9 
PROBLEM DEFINITION .................................................................................................................. 11 

2. 

2.1.  What are the problems? ................................................................................... 11 
2.2.  What are the problem drivers? ........................................................................ 13 
2.3.  How likely is the problem to persist? .............................................................. 30 
3.  WHY SHOULD THE EU ACT? ........................................................................................................ 31 

3.1.  Legal basis ....................................................................................................... 31 
3.2.  Subsidiarity: Necessity of EU action ............................................................... 31 
3.3.  Subsidiarity: Added value of EU action .......................................................... 34 
4.  OBJECTIVES: WHAT IS TO BE ACHIEVED? ............................................................................... 36 

4.1.  General objectives ........................................................................................... 36 
4.2.  Specific objectives ........................................................................................... 36 
4.3.  Problem tree ..................................................................................................... 37 
5.  WHAT ARE THE AVAILABLE POLICY OPTIONS? .................................................................... 38 

5.1.  What is the baseline from which options are assessed? .................................. 38 
5.2.  Description of the policy options .................................................................... 40 
6.  WHAT ARE THE IMPACTS OF THE POLICY OPTIONS? ........................................................... 41 

6.1. 
Integrated scenario ........................................................................................... 41 
6.2.  Unified scenario ............................................................................................... 45 
7.  HOW DO THE OPTIONS COMPARE? ............................................................................................ 49 

7.1.  Effectiveness .................................................................................................... 49 
7.2.  Efficiency ........................................................................................................ 50 
7.3.  Coherence ........................................................................................................ 51 
8. 
PREFERRED OPTION ...................................................................................................................... 52 
9.  HOW WILL ACTUAL IMPACTS BE MONITORED AND EVALUATED? .................................. 54 
ANNEX 1: PROCEDURAL INFORMATION ............................................................................................ 54 
ANNEX 2: STAKEHOLDER CONSULTATION (SYNOPSIS REPORT) ................................................ 60 
ANNEX 3: WHO IS AFFECTED AND HOW? .......................................................................................... 74 
ANNEX 4: ANALYTICAL METHODS ..................................................................................................... 81 
ANNEX 5: COMPETITIVENESS CHECK ................................................................................................ 83 
ANNEX 6: SME CHECK ............................................................................................................................ 84 

ANNEX  7:  PROBLEM  DRIVERS  IN  THE  CONTEXT  OF  THE  SINGLE  MARKET,  CUSTOMS 

UNION, TAXATION AND ANTI-FRAUD POLICY DOMAINS .................................................... 86 

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Glossary 

Term or acronym  Meaning or definition 

BUDG 

CCEI 

COMP  

DG 

DIGIT 

ECFIN 

EFRAG 

ESP 

ESTAT 

EU  

 Budget 

Customs Control Equipment Instrument 

Competition 

Directorate-General 

Digital services 

Economic and Financial Affairs 

European Financial Reporting Advisory Group 

European Statistical Programme 

European Statistics 

European Union  

FISMA 

Financial Stability, Financial Services and Capital Markets Union 

GDP 

Gross Domestic Product 

GROW 

Internal Market, Industry, Entrepreneurship and SMEs 

ISSG 

JRC 

JUST  

MFF 

OLAF 

RSB 

Interservice Steering Group  

Joint Research Centre 

Justice and Consumers 

Multiannual Financial Framework  

Anti-fraud Office 

Regulatory Scrutiny Board 

SANTE 

Health and Food Safety 

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SDG 

Single Digital Gateway 

SG REFORM 

Secretariat-General Reform 

SMP 

Single Market Programme 

TAXUD 

European Commission Directorate-General for Taxation and Customs Union 

UAFP 

UCC  

Union Anti-Fraud Programme 

Union Customs Code 

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1. 

INTRODUCTION: POLITICAL AND LEGAL CONTEXT 

1.1.  Political and legal context 

The implementation of the current and previous EU programmes, as also demonstrated by the 
relevant programme evaluations, has shown that the complexity of the funding architecture is 
the major factor hindering the impact of the EU budget. Currently, many programmes may 
finance the same activities, but without the same rules and conditions and there is insufficient 
flexibility  to  respond  to  unforeseen  needs.  This  leads  to  inefficiencies  and  administrative 
burden  for  beneficiaries,  Member  States  and  the  Commission.  In  addition,  a  difficult 
budgetary situation (with the start of NextGenerationEU repayments, the increasing number 
of EU priorities and the tight fiscal situation of Member States) reinforces the need to reduce 
identified inefficiencies and administrative burden.  

The Political Guidelines acknowledge that ‘our spending is spread over too many overlapping 
programmes  –  many  of  which  fund  the  same  things  but  with  different  requirements  and 
difficulties  to  combine  funding  effectively’.  The  Guidelines  set  out  that  the  new  long-term 
budget needs to be more focused, simpler, with fewer programmes and more impactful.  

In  line  with  the  Political  Guidelines,  the  College  adopted  on  11  February  2025  the 
Communication ‘The road to  the next multiannual  financial framework’, which states that 
‘the next long-term budget will have to address the complexities, weaknesses and rigidities 
that  are  currently  present  and  maximise  the  impact  of  every  euro  it  spends’.  The 
Communication also underlines that flexibility is key in guaranteeing the budget’s ability to 
respond to a changing reality.  

In  this  political  context,  impact  assessments  for  programmes  under  the  next  multiannual 
financial framework focus on how to streamline the architecture of the EU budget, thereby 
assessing  the  most  important  policy  choices  underpinning  the  legislative  proposals  for  the 
future  EU  programmes.  Policy  aspects  are  considered  in  the  analysis  of  the  context,  the 
problem  definition  and  the  objectives,  which  inform  the  choices  on  the  programme 
architecture. Given that the architecture of the new multiannual financial framework will be 
significantly  different  from  the  current  structure,  assumptions  on  the  budget  of  each 
programme  would  be  unreliable  at  this  stage.  Therefore,  the  impact  assessment  does  not 
include funding scenarios and, consequently, only qualitative cost benefit analysis is possible.   

This reflects the specificities of this exercise, as clearly acknowledged in the Commission’s 
better regulation rules, which this impact assessment follows. Tool #9 of the better regulation 
toolbox states that ‘the special case of preparing a new multiannual financial framework is a 
unique process requiring a specific approach as regards scope and depth of analysis’. 

Against  this  background,  the  present  impact  assessment  focuses  on  the  single  market  and 
cooperation between national administrations.  

The single market was officially launched on 1 January 1993 (European Act of 19861) and is 
governed  by  the  fundamental  principles  of  free  movement  of  goods,  services,  people,  and 
capital. For nearly three decades, the single market has been at the heart of the EU, a major 
contributor to growth, competitiveness, and employment. It enables citizens to live, work and 

1 European Act, EUR-Lex - 11986U/TXT - EN - EUR-Lex. 

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travel freely within the EU, and offers enhanced consumer protection and greater choice of 
high-quality cross-border products and services at lower prices.  

The  single  market  is  the  world’s  largest  integrated  market  and  one  of  the  most  outward-
oriented economies in the world.  It is our key asset to bring prosperity to our citizens and 
businesses but also help us cope with unexpected and unforeseen challenges and crises such 
as the COVID-19 pandemic. The single market is intrinsically linked with and reinforced by 
the continuously evolving EU Customs Union, which has been safeguarding the EU’s external 
borders since 1968.  

A well-functioning and safe-guarded single market is a pre-requisite for a competitive 
European  economy.  However,  more  action  is  needed  to  complete  the  single  market, 
implement  and  enforce  EU  policies  and  close  productivity  and  innovation  gaps.  This 
applies  in  particular  to  ensuring  a  highly  performing  Customs  Union,  capable  to  adjust  to 
geopolitical  uncertainties  as  well  as  increasingly  volatile  international  trade  patterns  and 
challenges. The relevance of the single market is increasing considering the emerging political 
challenges  identified  in  the  Political  Guidelines2  and  recent  reports  from  Enrico  Letta  and 
Mario Draghi3. The Political Guidelines also highlighted the importance of developing the 
European Saving and Investment Union, including banking and capital markets, not least as 
completing the Capital Markets Union could attract an extra EUR 470 billion of investment 
per year; financing that is needed for the EU’s strategic priorities.  

The Customs Union remains the foundation of the Union and a fundamental enabler of 
the single market and other EU political priorities. It has a key function not only in view 
of  its  traditional  role  in  duty  collection  for  the  Union  budget  but  also  because  customs 
authorities hold a key role in ensuring external borders and supply chain security, contributing 
to safety and security in the European Union. In order to make the Customs Union work in 
practice,  the  Commission  and  the  customs  administrations  of  the  Member  States  need  to 
design common solutions to common problems. Over the past decades, the responsibilities of 
Member States’ customs authorities have extended beyond their traditional role in supervising 
and  facilitating  EU  trade  and  its  economic  interest  by  taking  on  an  increasing  number  of 
responsibilities in the field of safety and security with a view to protecting the public against 
threats  related  to  health,  protecting  the  environment  and  other  areas.  Given  this  broad 
mandate, the customs administrations are now effectively the lead authority for the control of 
goods at the EU's external borders4.  

In addition, Council Regulation (EC) No 515/97 provides that the Union supports the 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. As pointed out in the Letta report, EU consumers are just as vital to 
the single market as the benefits they receive from it. In 2024, household spending in the EU 
accounted for more than 50% of the EU’s GDP5. The ability to reach 450 million consumers 
with strong purchasing power offers businesses a major advantage, enabling them to scale 

2 European Commission political guidelines for 2024-2029. 
3 Draghi Report”, EU competitiveness: Looking ahead - European Commission. “Letta Report”, Enrico Letta - 
Much more than a market (April 2024). 
4 EU Customs Union: facts and figures 
5 Source: Eurostat data. 

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operations, boost sales, and generate the revenue necessary to innovate and stay competitive. 
Consumer  and  investor  protection  is  a  cornerstone  of  a  well-functioning  single  market.  It 
builds  trust,  empowers  individuals  to  make  informed  choices,  and  ensures  that  businesses 
compete  fairly  across  borders.  Strong  consumer  rights  and  effective  enforcement  prevent 
fraud, unsafe products, and misleading practices, thereby fostering confidence in cross-border 
purchases, especially in the digital and online marketplaces that are increasingly central to the 
EU economy. By safeguarding consumers, the EU not only enhances individual welfare but 
also strengthens demand, drives innovation, and contributes to market stability. 

The  priorities  for  the  2024-2029  Commission  announced  in  President  von  der  Leyen’s 
Political  Guidelines  include  the  need  to  further  deepen  the  single  market,  leading  to 
sustainable  prosperity  and  competitiveness,  and  prioritise  advancing  Europe’s  economic 
independence (security and economic statecraft). This also relates to tackling challenges with 
e-commerce platforms to ensure consumers and businesses benefit from a level playing field 
based  on  effective  customs,  tax  and  safety  controls  and  sustainability  standards.  The 
single  market  must  be  agile  and  continue  to  adapt  to  new  challenges,  including 
demographic ones, as recognised, among others, by the European Parliament in its Resolution 
on the 30th anniversary of the single market6. 

A  collective  effort  is  required  to  continue  maintaining  it,  deepening  it,  harnessing  its  full 
potential,  preserving  a  level  playing  field  both  internally  and  globally,  and  ensuring  it 
underpins the EU’s prosperity through long-term competitiveness and productivity, as 
requested by the European Council7.  

Moreover,  as  outlined  in  Letta’s  report,  the  limited  level  of  interoperability  among  public 
administrations constitutes an important limit to the free movement of goods, services and 
capital8.  Thereby,  increasing  the  capacity  of  public  administrations  to  cooperate9  and  to 
securely and seamlessly exchange data, while ensuring an effective and consistent application 
of digital-ready policymaking will be key for the proper functioning of the single market. 

The single  market  is  a common space which attracts  investments  within the EU  and from 
outside  the  EU  by  having  a  predictable  and  simple  regulatory  framework.  European 
official statistics play a pivotal role in supporting the objectives and functioning of the single 
market and the EU’s competitiveness and productivity. The European Statistical System is 
increasingly benefitting from new data sources and technologies that lead to more timely and 
relevant statistics in support of all EU political priorities10. Joint efforts are required to enforce 
existing rules, remove barriers and explore areas for further integration of the single market. 
The potential benefits are very significant: it has been estimated that removing Member State-

6  European  Parliament  resolution  of  18.1.2023  on  the  30th  anniversary  of  the  single  market:  celebrating 
achievements and looking towards future developments, P9_TA(2023)0007. 
7 European Council conclusions, 9 February 2023. 
8 Enrico Letta, Much more than a market. 
9For  example,  the Interoperable  Europe  Board,  established by  the  Interoperable  Europe  Act,  brings  together 
high-level representatives from Member States and the European Commission to cooperate on matters related 
to cross-border interoperability of public services across the EU. 
10  The  interim  evaluation  of  the  SMP  found  that  timeliness  of  statistics  has  improved  during  the  evaluation 
period,  quarterly  statistics  timeliness  improved  from  82.5  days  in  2021  to  81.7  days  in  2023,  and  monthly 
statistics from 32.5 days in 2021 to 29.2 days in 2023. These measures are based on new releases of a set of 
quarterly and monthly statistics, being calculated from the release day of the news releases published by Eurostat 
as the number of days between the last day of the statistics’ reference period and the release day of the related 
news release. 

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level barriers to the single market for goods and services alone could add EUR 713 billion to 
the economy by the end of 202911. 

EU competition law has an essential role to play in ensuring the proper functioning of 
the single market, as is recognised explicitly in the Treaties on the EU and on the Functioning 
of  the  EU  (TFEU).  The  effectiveness  of  competition  in  the  internal  market  in  turn  is  an 
essential  driver  of  EU  competitiveness.  According  to  the  Draghi  Report  ‘the  evidence  is 
overwhelming  that  competition  stimulates  productivity,  investment  and  innovation’,  while 
weak productivity harms productivity growth12. Competition enforcement will face the next 
years new or growing challenges which are likely to significantly increase competition 
risks and the complexity of enforcement. Profound changes in the economy have led to (i) 
increasing  market  and  industry  concentration,  (ii)  increasing  markups  and  profits  and  (iii) 
decreasing business dynamism. 

In the area of customs, the ever growing and rapidly evolving global trade and supply 
chain patterns requires an agile, yet robust digital customs environment. The initiatives 
to digitalise customs were at the forefront of the EU’s digital transition already in the 1990s. 
The progress over the decades reached a watershed moment with the realisation that simply 
going digital in itself is no longer the reply to the needs. The drive to gain efficiencies and 
increase the  agile use of data  has led to  the  next iteration of EU customs policy, which is 
framed by the Commission’s proposal on the Customs Union Reform.13 The proposal aims to 
advance  on  the  digitalisation  of  the  Customs  Union  by  establishing  an  EU  Customs 
Authority  which,  amongst  others,  would  develop  and  manage  an  EU  Customs  Data  Hub14 
representing this new centralised digital environment. The EU Customs Authority, and the 
Data  Hub  it  would  manage,  are  enablers  of  digital  innovation  aiming  to  increase  the 
efficiency, simplification and harmonisation of the EU customs. Until the new Data Hub 
is developed and fully deployed to take over, the almost 70 currently running central customs 
IT systems  (developed and operated by the Commission) as  the backbone of the  Customs 
Union,  in  line  with  EU  legal  obligations,  must  be  maintained  to  ensure  the  uninterrupted 
operation of the Customs Union.  

EU taxation policy is a key aspect in the enhancement of the functioning of the single market. 
Digitalisation and modernisation of taxation are now key factors inherent in the effective 
implementation  of  EU taxation  policy,  and  tax  collection  by  the  Member  States.  The 
massive  uptake  of  artificial  intelligence,  with  yet  unknown  consequences,  raises  the 
question of readjustment of ambitions and needs, as well as digitalisation and updates 
of existing digital systems and infrastructures. In addition,  the evolution  of tax policies 
forecast the need for more and more reinforced digital components and solutions that would 
complement the portfolio of close to 30 already established central tax IT systems. EU tax 
policy supports revenue collection for the EU and Member States' budgets. Coordination on 
tax matters amongst Member States improve the fight against tax fraud, tax evasion and tax 

11 Mapping the Cost of Non-Europe 2019-24, Study of the European Parliamentary Research Service, 2019. 
12 There is strong and consistent economic evidence that industries which face greater competition experience 
stronger productivity growth and that weak competition undermines productivity growth, see for example OECD 
Factsheet on how competition policy affects macro-economic outcomes (2014).  
13 Proposal for a Regulation - 52023PC0258 - EN - EUR-Lex (europa.eu), currently under negotiations. 
14 See footnote above and EU Customs Reform | European Commission (europa.eu). 

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avoidance. EU tax policy is a key element for ensuring the proper functioning of the single 
market including by avoiding taxation-based distortions to competition. For many years, tax 
laws have been tightly connected to national sovereignty because they affect national income, 
budgets,  and  policy  decisions.  Countries  have  protected  this  sovereignty  by  maintaining 
unanimity  in  decision-making  in  taxation,  allowing  any  country  to  veto  proposals. 
Consequently, the Treaties maintain the rule that the Council of the EU must reach unanimous 
agreement for any tax proposals to be adopted at the EU level. Consequently, despite their 
expected added value for EU competitiveness and ensuring a level playing field in the EU, 
not all tax related proposals get adopted or their adoption process becomes particularly long.  

Fraud, corruption and other illegal activities linked to the EU budget have an impact not 
only on the Union’s financial integrity and the efficiency spending of the EU money, but also 
on the core policies at the heart of its single market. Conversely, a high prevalence of fraud 
can stifle economic growth and undermine the well-functioning of the single market. 

Article 325 TFEU requires the Union and the Member States to counter fraud and any other 
illegal  activities  affecting  the  financial  interests  of  the  Union.  In  addition,  EU  legislation 
requires Member States to mandatory report irregularities and fraud affecting EU expenditure 
in the areas of shared and indirect (pre-accession assistance), expected to be maintained also 
for the new MFF.  

Action at Union level is necessary as it assists Member States in collectively protecting the 
financial interests of the Union and encourages the use of common Union structures in order 
to  increase  cooperation  and  information  exchange  between  competent  authorities,  while 
supporting the reporting of data on irregularities and cases of fraud. 

The far-reaching technological changes require an important, structural upgrading of the anti-
fraud  infrastructure  in  all  Member  States,  with  significant  investment  to  be  made  in 
digitalisation,  artificial  intelligence  and  IT-based  tools.  The  Union  needs  to  strengthen  its 
support  in  order  to  meet  the  Member  States’  needs  in  terms  of  upgrading  the  existing 
capacities.  

The  Union  also  needs  to  support  candidate  countries,  investing  in  their  anti-fraud 
preparedness  and  national  capacities.  Likewise,  many  neighbouring  countries  are  strategic 
partners  in  the  implementation  of  EU  policies;  therefore,  strengthening  their  anti-fraud 
capacities will further strengthen the protection of the EU budget. 

In terms of the decision-making process, the approach for action at EU level differs between 
direct and indirect taxation, primarily due to the degree of EU competence and the Member 
States as well as the perceived need for harmonisation. The EU exercises greater competence 
when it comes to indirect taxation, particularly in areas such as VAT and excise duties. This 
strong  competence  is  rooted  in  the  necessity  of  harmonising  rules  to  ensure  the  proper 
functioning  of  the  single  market.  In  contrast,  the  EU’s  competence  in  the  area  of  direct 
taxation is more restricted. Member States maintain greater autonomy, resulting in a more 
cautious approach. However, EU-level directives on administrative cooperation are having 
their influence on this domain. These directives represent a shift towards improving (digital) 
collaboration and data exchange among Member States, although at a slower pace compared 
to indirect taxation activities. 

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The political agenda has been increasingly influenced by tax competition between countries 
and tax avoidance practices by companies. Those phenomena go well beyond Member States’ 
borders and involve also third countries. Expectations for the Union to take action to fight tax 
fraud, evasion and avoidance are high, as these distort competition, jeopardise the functioning 
of the single market and undermine social fairness.  

1.2. 

Scope of this impact assessment15 

The  Member  States  and  the  Commission  share  the  responsibility  for  enforcing  EU  law, 
including ensuring that single market rules  are complied with, and that people’s rights  are 
enforced.  The  Commission’s  work  on  ensuring  compliance  combines  three  main  aspects: 
strengthening  barrier  prevention,  collaboration  with  Member  States,  and  corrective 
implementation  and  enforcement  actions.  Similarly,  protecting  the  EU  budget  is  a  shared 
responsibility between the EU and its Member States, while the European Commission plays 
leading and coordination roles for this shared responsibility. 

Under the current MFF 2021-2027, the Single Market Programme (SMP) has supported 
the  design,  implementation  and  enforcement  of  EU  legislation  underpinning  the  proper 
functioning of the single market so that it can reach its full potential. Funding opportunities 
offered  through  the  SMP  deliver  on  a  major  policy  priority  of  the  Union  which  is  the 
completion of the single market and need to be continued in the future. 

For the purposes of this impact assessment, the Single Market is defined as the EU's integrated 
market based on the four fundamental freedoms—free movement of goods, services, people, 
and capital—established since 1 January 1993. It also encompasses a broader regulatory and 
operational  framework  supporting  competitiveness,  growth,  and  the  protection  of  EU 
financial interests.  

In  this  context,  the  programme  goes  beyond  the  four  freedoms,  covering  areas  such  as 
customs,  market  surveillance,  standardisation,  public  procurement,  intellectual  property, 
crisis  management,  enforcement,  taxation,  consumer  protection,  competition,  financial 
services,  implementing  tools  for  administrative  cooperation  and  access  to  information16, 
collection of statistics, and the protection of the EU’s and Member States’ financial interests 
and anti-fraud.  

The  aim  is  to  make  the  single  market  more  effective  in  the  era  of  digitalisation  and 
globalisation and to facilitate single market access and international cooperation. The 
SMP  provides  support  to  businesses,  non-state-actors  and  to  EU  authorities  and  bodies  to 
maintain effective rulemaking, standard-setting and enforcement of EU law (for example, the 
Internal Market Information System (IMI) has further supported the exchange of information 
on rules of operating of the Single Market between public authorities. Information exchanges 
rose  from  81 980  in  2021  to  112 550  in  202317).  It  mobilises  investment  through  capital 
markets  and  banking  and  empowers  and  protects  consumers.  In  addition,  it  supports  the 
capacity-building  of  Member  States’  competent  authorities,  such  as  Market  Surveillance 

15 Programme Performance Statements - European Commission. 
16 Single Digital Gateway, Internal Market Information System, SOLVIT. 
17 Internal Market Information System (IMI) | Single Market Scoreboard. The number of policy areas covered 
by IMI increased from 17 to 20 by December 2023,  meaning that eight additional administrative cooperation 
procedures were covered by IMI, bringing the number of total procedures to 97. 

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Authorities18. Finally, it facilitates cooperation among national authorities by providing digital 
tools  or  by  organising  meetings  with  relevant  national  authorities  (for  example  through 
meetings of the European Competition Network). Funding in the area of European statistics 
supports the development, production and dissemination of high-quality, comparable, timely 
and reliable European statistics which underpin the design, monitoring and evaluation of all 
Union  policies  and  help  citizens,  policymakers,  authorities,  businesses,  academia  and  the 
media to make informed decisions and to actively participate in the democratic process.  

The Customs and Fiscalis programmes and their previous iterations accompany the customs 
and tax policies in the EU for more than three decades. Both programmes have a heavy digital 
component (see next paragraphs) and face the same challenges as mentioned above, including 
– primarily on the customs policy side – ensuring adequate funding to secure the functioning 
of a highly performing Customs Union and EU taxation to address challenges in the digital 
age.  This  in  particular  is  confirmed  by  the  findings  of  the  Customs  and  Fiscalis  2020 
programmes’ final evaluations. The cross-border nature of infrastructure and services and the 
focus on system interoperability are evident both in the area of customs and taxation.  

Approximately  95%  of  the  current  Customs  programme19  budget  is  dedicated  to  digital 
customs in the form of Commission procurement for central digital systems and solutions. 
The future is focused on an even more centralised digital Customs Union, represented by a 
central Data Hub to be developed and managed by an EU Customs Authority as set out in the 
Commission’s proposal on the Customs Union Reform.  

In addition, the Customs Control Equipment Instrument20 as part of the Integrated Border 
Management  Fund,  contributes  to  increasing  the  efficient  and  effective  customs  controls, 
essential for the facilitation of legitimate trade, while ensuring sufficient level of protection 
at the external borders, by supporting the purchase, maintenance and upgrade of state-of-the-
art customs equipment such as scanners, automated number plate detection systems, teams of 
sniffer dogs and mobile laboratories for sample analysis. 

The Fiscalis programme21 supports the development, operation and modernisation of the key 
digital  infrastructures  for  taxation  (representing  around  85%  of  the  current  programme’s 
budget, in the form of Commission procurement), as well as project-based cooperation and 
human  capacity  building  activities,  to  implement  the  EU  tax  policy  objectives  including 
enhancing the functioning of the single market. It also puts in place and operates common 
tools to  facilitate the  cooperation in  the  single  market, particularly in  the fight  against tax 
evasion and fraud.  

18 The interim evaluation of the SMP indicated that SMP funding supports the development of legally required 
digital tools, such as interfaces to facilitate the exchange of electronic data between national customs systems 
and the ICSMS, as well as between market surveillance systems and the ICSMS. Other digital tools include 
Safety Gate, the rapid alert system for dangerous non-food products. 
19  Customs  programme:  Further  details,  work  programmes  and  annual  progress  reports:  https://taxation-
customs.ec.europa.eu/about-us/eu-funding-customs-and-tax/customs-programme_en  
20  Customs  Control  Equipment  Instrument:  Further  details,  work  programmes  and  annual  progress  reports: 
https://taxation-customs.ec.europa.eu/about-us/eu-funding-customs-and-tax/customs-control-equipment-
instrument_en  
21  Fiscalis  programme:  Further  details,  work  programmes  and  annual  progress  reports:  https://taxation-
customs.ec.europa.eu/about-us/eu-funding-customs-and-tax/fiscalis-programme_en  

10 

 
 
 
As cooperation programmes, the Customs and Fiscalis programmes support and facilitate the 
engagement  and  integration  of  customs  and  taxation  administrations  from  enlargement 
countries into the broader EU customs and taxation community. This includes their digital 
onboarding  into  some  key  European  common  IT  systems,  such  as  the  New  Computerised 
Customs System.  

The  Union  Anti-Fraud  Programme  (UAFP)22  funds  actions  which  aim  to  prevent  and 
combat fraud, corruption and other illegal activities affecting the EU's financial interests. The 
programme  addresses  both  the  expenditure  and  the  revenue  components  of  anti-fraud 
activities to protect the Union’s budget. It combines the financing and implementation of three 
different,  previously  separate  EU  interventions:  1)  financial  support  to  Member  States  for 
anti-fraud  measures,  2)  the  Anti-Fraud  Information  System  (AFIS)  and  3)  the  Irregularity 
Management System (IMS). Actions eligible for funding include technical and operational 
investigation  support,  such  as  the  acquisition  of  databases  and  tools/equipment,  digital 
forensic  analysis,  specialised  anti-fraud  training  activities,  research  activities  and  the 
operation  of  AFIS  and  IMS.  Due  to  their  specific  nature  linked  to  the  Commission’s 
operational activities in support of Member States, the work within AFIS and IMS would be 
considered indispensable. The AFIS component finances operational activities, necessary for 
the  independent  investigative  mandate  of  OLAF,  while  the  IMS  component  finances  the 
maintenance, development and user support of an IT system managed by OLAF on behalf of 
the Commission.  

The  programme  is  not  perceived  as  the  discontinuation  of  existing  programmes,  nor  their 
reorientation. While the names of the programmes (e.g. Single Market Programme, Customs, 
Fiscalis  or  Union  Anti-Fraud  Programme)  are  no  longer  spelled  out  separately,  the  future 
actions supported in the relevant policy areas will continue to provide support with increased 
coordination and synergies at policy and design level. Most of the actions stem from the EU-
level legal obligations established upon the Commission and the Member States, for most of 
them, would be implemented via public procurement by the Commission.  

More information on the Single Market, Customs Union, Taxation, and  Anti-Fraud can be 
found in Annex 7.  

2.  PROBLEM DEFINITION 

2.1.  What are the problems? 

It  is  imperative  to  ensure  continuous  funding  in  the  area  of  the  single  market,  including 
cooperation between national administrations23. However, under the current framework, the 
overarching  problem  is  a  complex  funding  landscape  lacking  flexibility,  synergies,  and 
showing  shortcomings in terms  of coherence.  This  creates  barriers and hinders effective 
access to the available funds.  

22 Union Anti-Fraud Programme (UAFP) - European Commission. 

23  The  feedback  collected  during  the  public  consultation  indicated  that  ensuring  that  rulemaking,  standard-
setting, and enforcement at the EU level remain evidence-based, effective, and tailored to evolving needs (92%, 
615 out of 673) and improving cooperation, collaborative efforts, and integration among member states and the 
Commission (87%, 587 out of 672) emerged as the most widely recognised challenges. 

11 

 
 
 
Considering the identified shortcomings in the synergies between EU programmes and calls 
for simplification and rationalisation of the funding landscape as well as the importance to be 
able to react to crises, the EU programmes’ flexibility and reactiveness to new challenges is 
critical24.  

Fragmentation issues – ranging from diverse rulebooks to overlapping programmes – can lead 
to  EU  funding  not  reaching  the  right  beneficiaries  at  the  right  time  addressing  the  most 
relevant policy needs. Ultimately, this impacts not only individual, but also the EU’s overall 
economic  resilience,  social  cohesion,  and  innovative  capacity,  and  consequently  the 
competitiveness of the single market. 

In the policy fields related to the single market, customs, taxation and anti-fraud25, there is a 
need for a more flexible EU funding landscape to help streamline administrative processes, 
harmonise rules across Member States, and facilitate quicker responses to evolving challenges 
and crisis situations.  

Despite the availability of significant resources through various current programmes (e.g., the 
single market, Customs26, Fiscalis and Union Anti-Fraud programmes), a range of factors can 
hamper effective allocation and uptake: 

Complex administrative procedures 

Multiple  and  varying  application  processes,  different  programme  guidelines,  and  varying 
eligibility  criteria  create  administrative  burden  on  both  the  potential  beneficiaries  and 
managing authorities. This complexity can deter smaller organisations or first-time applicants, 
who may lack the capacity to navigate the wide range of options and overcome red tape. 80% 
(530 out of 650) of respondents to the public consultation indicated that different and complex 
fund-specific requirements and rules are an obstacle to the EU budget achieving its objectives. 

Inconsistent national and regional capacities to apply for EU funding and unequal access 
to information 

Although the EU sets overarching funding frameworks accessible to all, Member States and 
potential beneficiaries have varying capacities to tap into these funding opportunities. This 
can lead to distortion in the use of funds, as potential beneficiaries with more experience in 
and more resources for accessing EU funds are often better prepared to apply successfully, 
while others may lack the networks or know-how to identify and secure relevant grants. This 
includes the fact that often those potential beneficiaries who need the support the most, are 
not even aware of the funding opportunities. 

Overlapping funding instruments 

The EU has numerous funding instruments (e.g., grants, loans, guarantees), sometimes with 
overlapping  objectives  and  eligible  actions  (e.g.  as  it  is  in  the  cease  of  the  Customs 

24 Communication on the Road to the next multiannual financial framework, COM(2025)46 final. 
25 The public consultation demonstrated that the following intervention areas were identified as most important: 
supporting fair competition ranked highest, with 83% (546 out of 655) rating it as (very), followed by supporting 
standardisation  efforts  (81%,  550  out  of  682)  and  deploying  common  and/or  interoperable  digital  solutions, 
including portals and tools (76%, 492 out of 648). 

12 

 
 
 
 
programme,  the  Customs  Control  Equipment  Instrument  and  the  Union  Anti-Fraud 
Programme). Coordination efforts are not systematic and cannot be considered robust enough 
to  ensure  maximum  complementarities  between  various  interventions.  Equally,  potential 
applicants might be uncertain which instrument best suits their project. 

Limited synergies among programmes and policy areas in a programme 

Even  when  programmes  could  complement  one  another,  regulatory  barriers  and  varying 
rulebooks  can  make  it  difficult  to  pool  or  blend  resources.  This  siloed  approach  hampers 
larger-scale, integrated projects that span multiple beneficiaries in an integrated manner. 

Funding framework rigidity reducing ability to adapt to changing priorities 

A rigid and heavily regulated funding environment means complex and lengthy, legislative, 
financial and bureaucratic processes to adjust funding priorities or rules. This blockage and 
lag can be detrimental  when urgent  new  challenges arise, requiring  a swift reallocation of 
resources. 

2.2.  What are the problem drivers? 

2.2.1.  Problem driver: Design 

Fragmentation of EU funds, scale of challenges (need to improve flexibility). The current 
funding landscape of the EU contains over 40 separate programmes with defined budget of 
various sizes and various ambitions, and often with limited, policy-specific scope. This setup 
combined with the complex financial rules of the EU create an environment where budget 
agility is heavily hindered and thus responding to new priorities and challenges in a timely 
manner is at stake. 

A majority of respondents (69%, 460 out of 662) to the public consultation estimated that a 
“lack of flexibility to adapt to new and unforeseen developments” constitutes an obstacle to 
the EU budget achieving its objectives27. 

Limited coordination of EU funding (need to reinforce synergies) 

A majority of respondents (76%, 509 out of 667) to the public consultation shared that the 
lack of coordination or synergies between programmes, while smaller majority (62%, 416 out 
of  669)  found  the  overlapping  policy  goals  between  numerous  programmes  represent 
obstacles to the EU budget achieving its objectives. 

The thematic nature (policy domain-specific) of the fragmented funding landscape means that 
in  particular horizontal aspects  (e.g. non-policy specific  elements,  such as human capacity 
building  methodology,  communication/use  of  social  media)  are  potentially  addressed  in 
several  programmes  separately,  while  bringing  these  aspects  together  would  not  only 
eliminate  overlaps  but  also  would  bring  the  policies  closer  together,  also  gaining  from 

27 Including 80% of member states authorities (76 out of 95). 

13 

 
 
 
 
economies  of  scale.  The  same  considerations  highlight  that  there  is  a  potential  for  further 
coordination at policy level, which with a more streamlined funding landscape would promote 
the  engagement  in  joint  activities  and  would  bring  the  policy  silos  closer  to  each  other 
especially  in  overlapping  policy  domains  (e.g.  customs  -  market  surveillance;  anti-fraud  - 
customs control; statistics – taxation).  

Access to EU funding is hampered by complexity (need for simplification) 

The  current,  more  than  40  programmes  create  a  complex  landscape  for  the  potential 
beneficiaries to navigate. Not only the number of the interventions and their often-unclear 
segregation in  scope and opportunities, but  the related varying  regulatory  frameworks  and 
implementation mechanisms may lead the potential beneficiaries to invest in application to 
funds where they or their proposed actions are not eligible. Mapping and engaging with the 
complexity  of  the  current  funds  create  administrative  burden  and  additional  costs  for  the 
beneficiaries.  It equally could mean missed opportunities (e.g. missing deadlines) or could 
overall discourage using the opportunities provided by the funds. Furthermore, when one fund 
is  more  easily  accessed  (e.g.  more  targeted  beneficiary  audience)  it  may  create  unequal 
opportunities for those who are not targeted by the given programme and can only access to 
more horizontal ones (e.g. targeted beneficiaries of the Customs programme are the national 
customs  authorities,  while  economic  operators  dealing  with  customs  matters  cannot  tap 
directly into the fund).   

A majority of respondents to the public consultation considered that different and complex 
fund-specific  rules  to  access  funding  and  ensure  compliance  (80%  (530  out  of  650),  and 
administrative burden  for beneficiaries, regional  and national  authorities  (85%, 555 out  of 
657) constitute an obstacle to the EU budget achieving its objectives.  

2.2.2.  Problem driver: Knowledge and data gaps, and other barriers are 
obstacles  for  citizens,  consumers,  and  businesses,  economic 
operators to access and operate in the single market. 

2.2.2.1. Problem driver description 

Citizens, consumers, economic operators and  businesses face significant challenges in 
accessing and operating within the single market, due to knowledge and data gaps and 
other  barriers28.  This  includes  access  to  and  receiving  information  and  advice  about  the 
rights and obligations, guidance and training on the functioning of the single market, customs 
and  taxation  aspects,  and  these  stakeholders’  functioning  in  the  digital  single  market. 
Businesses face barriers linked to administrative burden and the need to comply with complex 
and  different  regulatory  frameworks  despite  simplification  efforts.  In  many  areas  and  for 
diverse  stakeholders,  there  is  still  an  ongoing  lack  of  information,  communication  and/or 
awareness. Citizens and consumers, especially vulnerable consumers, may lack information 
about their rights, economic operators and businesses are not always aware of rules related to 
intra-EU,  and  external  trade,  in  particular  in  terms  of  customs  and  taxation  rules,  product 

28 Letta Report and other Commission reports. 

14 

 
 
 
compliance  and  market  surveillance  rules,  or  similarly  in  the  field  of  competition  rules29. 
Services  supported  under  the  SMP  like  Your  Europe  Advice,  IMI,  and  SOLVIT  saw  a 
growing  number  of  cases,  reflecting  these  challenges.  The  Eurobarometer  survey  further 
demonstrated an information gap, with only 6% of citizens feeling well-informed about their 
EU rights and another 36% only fairly well-informed, underscoring the need for tools and 
platforms to raise awareness30. 

These barriers affect single market participation and limit the possibility to elaborate a 
regulatory framework fit to provide a thriving environment for citizens, consumers, and 
businesses  and  economic  operators.  There  is  a  need  for  citizens,  consumers,  economic 
operators and businesses but also public administrations to receive information to understand 
their  rights,  opportunities,  and  challenges  related  to  the  single  market.  Informed  and 
empowered consumers and businesses can drive demand for fair competition, high product 
standards, and sustainable practices. Currently, products that should – but do not - comply 
with environmental standards too often find their way on to the market, negatively impacting 
consumers  and  businesses  that  do  comply.  Unjustified  barriers  arise  when  national  law 
conflicts  with  single  market  rules  or  when  those  rules  are  incompletely  or  insufficiently 
interpreted and implemented at national level, including due to differences in administrative 
practices, capacities of national authorities, fragmented cooperation between various national 
administrations/authorities  both  at  national  and  EU-level,  as  well  as  shortcomings  in 
interoperability  and  common,  EU-wide  digital  solutions.  They  hinder  the  capacity  of 
businesses to flourish, remain competitive and to harness the green and digital transition and 
also  limit  consumer  choice  and  confidence.  Some  types  of  barriers  have  proven  to  be 
persistent: 60% of the barriers that businesses report facing today are of the same type as were 
reported 20 years ago31. Many of these relate to national regulation as well as administrative 
practices,  which,  in  the  first  instance,  have  to  be  addressed  directly  by  Member  States. 
Barriers confirmed by stakeholders include the complexity of national procedures and lack of 
information  on  them,  disproportionate  national  requirements.  Many  such  barriers  are  not 
amenable to legislative harmonisation and hence reducing obstacles at national level remains 
the major objective.  

A  renewed  focus  is  needed  on  tackling  barriers  in  areas  most  relevant  for  the  whole 
economy. The single market will also have to continue to adapt to the new realities of the 
geopolitical environment, technological developments, the green and digital transitions and 
the need to boost the EU’s long-term competitiveness and productivity. Setting up, expanding, 
and  operating  across  EU  borders  and  with  third  countries  remains  a  challenge  due  to 
difficulties  in  accessing  EU  funding  as  well  as  the  necessity  of  compliance  with  different 
national  rules  in  Members  States  which  constitutes  a  complex  and  resource-intensive 

29 Initiatives such as Consumer Law Ready and Consumer PRO have successfully raised awareness of consumer 
rights among SMEs and strengthen the capacity of consumer professionals. For instance, Consumer Law Ready 
trained 1 069 people between July 2021 and March 2023, with SME trainers (i.e. multipliers) representing 49% 
and SMEs representing 51% of the total participants (SME homepage | Consumer Law Ready). 
30 Eurobarometer 430: European Union citizenship, March 2016. 
31 Single Market Strategy. 

15 

 
 
 
endeavour. The persistence of barriers creates a need for support to address these, and services 
providing tailored support to citizens, consumers and businesses are essential and relevant32. 

In an increasingly digitalised world, digital tools are essential to ensure the continuity of 
business operations and companies’ interactions with registers and authorities. In order 
to  increase  trust  and  transparency  in  the  business  environment  and  facilitate  companies’ 
operations and activities in the internal market, it is crucial that companies, authorities and 
other stakeholders have access to accurate, up-to-date and reliable company information and 
can  use  it  without  burdensome  formalities  in  a cross-border  context.  It  is  also  crucial  that 
companies  can  benefit  from  digital  tools  and  solutions  in  EU  company  law  to  simplify 
procedures and reduce administrative burdens on companies. These help companies develop 
across  the  single  market  and  enhance  competitiveness.  At  the  same  time,  barriers  remain, 
including as regards availability and accessibility of information about companies and time-
consuming  and  costly  procedures  and  requirements  that  companies  face  in  cross-border 
situations. 

Furthermore, while innovative technologies, such as AI and data driven business models 
enhance digital cross-border trade, they also raise a number of new issues and potential 
single market obstacles for various business models and assets, including free movement of 
goods, services and data. Their impacts are expected to grow in the future, as digitalisation 
progresses.  For  instance,  new  civil  law  issues  include  uncertainties  around  the  use  of 
automated  technologies  such  as  AI  in  digital  trade  (questions  of  attribution,  validity  and 
consequences of unintended AI actions and liability). In addition, the increased use of data in 
contracts and the value of data as an economic factor raises questions as to how data driven 
business  models  affect  contracting  and  the  rights  and  obligations  of  the  parties  to  such 
contracts. 

EU company law – providing a horizontal legal framework applying to 20 million limited 
liability companies and their cross-border branches and to two million partnerships – aims to 
address  these  barriers  and  burdens  and  therefore,  the  continued  funding  of 
developments in EU company law will be crucial under the next MFF. Adapting civil law 
and more specifically contract law to the needs of the digital economy will be essential to 
ensure seamless digital cross-border transactions and the development of innovative digital 
business  models.  Continued  funding  of  relevant  civil  and  contract  law  actions  will  be 
necessary to ensure the policy tools to tackle single market obstacles in this area. Continued 
financing  of  the  Business  Registers  Interconnection  System  (BRIS)  will  be  particularly 
essential as all the digital procedures and solutions in the EU company law framework rely 
on the use and the development of BRIS and as it is a key digital infrastructure that enables 
access  to  and  exchange  of  company  information  across  the  EU.  Although  it  is  difficult  to 
quantify the value of information, according to recent estimates, the value of basic company 
information (e.g. registered addresses, company numbers, dates of incorporation, nature of 
business) was estimated at approximately EUR 950 per user per year. In addition, thanks to 
the application of the once-only principle through BRIS, companies do not need to provide 
their information multiple times, which reduces reporting burdens for companies. 

32  For  example,  the  National  enforcement  authorities  within  the  Consumer  Protection  Cooperation  network 
(CPC),  are  responsible  for  the  enforcement  of  consumer  protections  laws  and  takes  action  to  address  cross-
border compliance with EU laws impacting consumers, (Consumer Protection Cooperation Network - European 
Commission). 

16 

 
 
 
The  current  Union  Customs  Code  achieved  the  digitalisation  of  customs;  however, 
economic operators still face 27 national IT environments, each consisting of multiple and 
diverse  systems  and  related  technical  requirements  and  procedural  aspects  when  declaring 
and clearing goods that enter/exit the Union, despite there being a single customs union. The 
formalities and various processes have an administrative overhead and come at a cost to trade 
and economic operators, playing a factor in their decision and opportunity to engage fully in 
the single market, and having impact on the EU competitiveness. This is evident from the 
study supporting the Commission’s proposal to the Reform of the Customs Union, as well as 
by  the  preliminary  findings  of  the  case  studies  on  four  selected  IT  systems  for  customs 
analysed by the study supporting Customs programme’s interim evaluation33.    

Over the years, taxation remained a major source of revenue for Member States’ budgets. 
However, the rapidly expanding digitalisation of the economy poses challenges to tax 
authorities  and  economic  operators.  The  emergence  of  new  business  models  and  the 
increasing  amount of data with which tax authorities and economic operators need to deal 
require  constant  adjustments.  The  European  Parliament  adopted  a  resolution34  noting  the 
potential of data and digital tools to reduce red tape and simplify various taxpayer obligations. 
Currently,  taxpayers  and  economic  operators  are  facing  complex  tax  systems  and  high 
compliance costs which further contribute to tax gaps, tax fraud and tax evasion. Furthermore, 
the single market and the freedoms forming its basis brought many new opportunities, not 
only for legitimate traders but also new possibilities for tax fraud and evasion arose. Member 
States partly addressed these newly used avenues, but the measures taken to fight tax fraud 
and evasion have had side effects, resulting in extra burdens and barriers, also for legitimate 
traders. 

The surge in e-commerce is a clear challenge for the single market due to digitalisation. 
The Commission adopted a Communication on e-commerce35 highlighting the need to address 
the challenges with e-commerce to ensure consumers and businesses benefit from competitive 
e-commerce, based on effective customs and tax policies. It is directly related to increasing 
complementarities between various national administrations and to better coordinate national 
market surveillance authorities and potentially combine EU level market surveillance powers 
with the EU customs authorities36. 

2.2.2.2. Lessons learnt from previous programmes 

There is a need for information evidenced during the interim evaluation of the SMP by the 
effectiveness and level of use of digital information tools (Your Europe, Your Europe Advice 
(YEA)) and services. The Your Europe portal has seen improvements in  functionality and 
user engagement since 2021 has remained high. In 2023, it was the most visited EU website 
with  32  million37  visitors.  The  Your  Europe  Advice  (YEA)  service  handled  up  to  25 560 

33 At the time of writing the draft impact assessment, the interim evaluation of the EU Customs programme has 
not yet been completed, therefore any findings should be considered as preliminary. The studies and the related 
Commission report and SWD can therefore be made available at a later stage.  
34  European  Parliament  resolution  of  10  March  2022  with  recommendations  to  the  Commission  on  fair  and 
simple taxation supporting the recovery strategy (P9_TA (2022)0082). 
35  Commission  Communication  on  a  comprehensive  EU  toolbox  for  safe  and  sustainable e-commerce  COM 
(2025) 37 final 
36 Single Market Strategy. 
37 In 2021, it recorded 58.3 million visits, in 2022 42 million. In 2019 35,9 million, and in 2020 32,7 million. 
DG GROW Annual Activity Reports 20219 to 2023 

17 

 
 
 
queries in 202338. The Internal Market Information System (IMI) has further supported the 
exchange of information on rules of operating of the single market between public authorities. 
Information exchanges rose from 81,980 in 2021 to 112,550 in 202339. Additional financing 
support was deemed as to ensure the capacity of the Commission to finance the improvement 
of digital information  tools  and services.  More  frequent  feedback collection  from  users of 
certain IT services (EU Taxonomy Compass) financed could help monitor user satisfaction 
and improve service delivery.  

Moreover,  money  laundering  can  undermine  the  integrity  of  financial  systems  as  well  as 
facilitate financing of terrorist and/or extremist actions. The Beneficial ownership Register 
Interconnection  systems 
forthcoming  bank  Account  Register 
the 
Interconnection System (BARIS) are important IT tools to facilitate the flow of information 
for Member States’ anti-money laundering efforts and to counter terrorist financing. 

(BORIS)  and 

The Single Digital Gateway (SDG) serves as a one-stop-shop for citizens and businesses who 
want to work, study or do business in another EU country. The interim evaluation of the SMP 
showed that significant progress is still needed, notably for making procedures accessible to 
cross-border users.  

COMPCases, a new public case search engine related to competition cases, simplifies case 
searches and the retrieval of related documents. The number of users has steadily increased 
since  its  launch  in  2023  reaching  605,535  users  in  2024.  It  is  an  essential  tool  to  ensure 
transparency  and  accessibility  for  all  stakeholders.  Many  different  tools  also  enable  the 
efficient and secure exchange of sensitive and confidential information with stakeholders in 
competition cases.  

The  European  Consumers  Centres  and  Alternative  Dispute  Resolution  bodies  assist 
consumers  in  cross-border  transactions  by  providing  free  information  and  advice  on  their 
rights and help them in resolving cross-border consumer complaints and obtaining access to 
appropriate dispute resolution40. The SMP interim evaluation showed it is crucial to continue 
focusing  on  raising  consumer  education  and  awareness,  especially  in  countries  where 
evidence suggests gaps, with specific emphasis on financial literacy and digital rights. It is 
also key to improve the visibility of ECCs, which vary across Member States, as their role 
will expand with the update of the Alternative Dispute Resolution Directive, making them 
crucial contact points for cross-border consumer disputes and to continue to raise awareness 
on  aspects  of  the  financial  services  that  affect  consumers  in  their  day-to-day  life  (e.g.  the 
increase of digitalisation and digital finance or savings and financial planning through retail 
investments).   

Businesses perceive the regulatory burden in Europe as too heavy, with 32% of EU firms 
identifying regulations as a “major obstacle” to their investment activity. An additional 34% 
of  EU  companies  see  regulation  as  a  minor  obstacle,  meaning  that  in  total  two  thirds  of 
companies consider being hindered from investing by excessive regulation. 

38 20 071 queries in 2022, and 19 002 in 2021, although slightly fewer than the 25 281 handled in 2020. 
39 Internal Market Information System (IMI) | Market Scoreboard (europa.eu) 
40 For instance, in 2024 the ECC-Net's legal experts assisted over 134,000 European consumers, facilitating the 
recovery of EUR 5.7 million through amicable settlements. 

18 

 
 
 
Information and education to consumers, sustainable production and consumption initiatives 
through information campaigns, Commission’s websites, digital tools, meetings and training. 
In this respect, improving digital tools and advanced infrastructure is essential, with further 
integration of IT platforms support implementation efforts and should improve data efficiency 
and availability in order to make informed decisions and analysis.  

Eurostat  provides  and  communicates  European  statistics  by  offering  European  official 
statistics available in the Eurostat database, publications, podcasts, news articles and releases 
and numerous other dissemination products freely accessible on the Eurostat website and its 
social  media  channels  as  well  as  Eurostat  user  support.  The  growing  interest  in  Eurostat’s 
statistical  products  and  services  among  policymakers,  media,  researchers  and  citizens 
underlines  the  key  role  of  European  statistics  in  supporting  evidence-based  policy  and 
decision making, informing the public debate and fighting foreign information manipulation 
and disinformation. There is a need to continue investing in new technologies and innovative 
data  sources,  expanding  data  coverage  and  granularity,  to  enhance  timely  statistical 
production and dissemination.  

The Customs and Fiscalis programmes target the customs and tax authorities in the Member 
States (and programme participating countries more broadly) as primary beneficiaries. In that 
sense, citizens, consumers, economic operators and businesses benefit mainly indirectly from 
these  programmes.  In  particular,  the  final  evaluation  of  the  Customs  2020  programme 
revealed that economic operators see the need to benefit from EU funding opportunities in the 
domain of customs targeted to non-state stakeholders. The feedback received from non-state 
stakeholders who benefited from specific e-learning modules41 developed under the Customs 
and Fiscalis programmes equally show that actions targeted to non-state parties are just as 
essential  as  supporting  the  national  administrations  and  authorities  in  terms  of  achieving 
higher-level objectives linked with the Customs Union and taxation in the EU.  

The  portal  TaxEdu42  designed  for  kids,  teenagers,  and  young  adults  is  a  specialised 
educational platform to help taxation and educational authorities to introduce these age groups 
to the basics of taxation, personal finance, and financial literacy in a fun and engaging way. 
Feedback on the portal and the educational materials gathered show the need to target not 
only the authorities but also the citizens and other non-state stakeholders.  

In  addition,  knowledge  gaps  filled  by  guidance  produced  with  the  support  of  the  Fiscalis 
programme on the Central Electronic System of Payment information (CESOP) proved to be 
beneficial, as confirmed by various stakeholders, to facilitate the common understanding of 
the legal provisions.  

Despite advances made in the move towards a paperless environment43, bottlenecks persist 
through a complex legislative and IT environment when dealing with the movement of goods 
over the EU’s external borders44. Many stakeholders demand more information, support and 
guidance, training and consultation opportunities45. Citizens are particularly vulnerable due to 

41 For example: eLearnings on drug-precursors, VAT rates, VAT refund or the e-commerce programme with 5 
modules about OSS/IOSS schemes. 
42 https://taxedu.campaign.europa.eu/ 
43 Union Customs Code Annual Progress Report 2023 (the report on 2024 will be soon available)  
44 SWD/2023/140 final. 
45  SWD/2023/140  final  -  For  example,  the  public  consultation  accompanying  the  Customs  Reform  Proposal 
confirmed that respondents (77%) agreed with the need to simplify how information is provided on customs and 
to reduce administrative burden and formalities. 

19 

 
 
 
the lack of simple, easy  to  understand instructions,  when ordering and  receiving packages 
from or sending to outside the EU or travelling through the external borders with goods. A 
prime example of this need is the success of the cash control communication campaign of the 
Commission financed under the Customs programme and regarding the provisions on cash 
controls46.  

2.2.3.  Problem  driver:  Capacity  building,  administrative  and 
operational  cooperation  and  integration  among  Member  States 
and  between  Member  States  and  the  European  Commission 
remains suboptimal.  

2.2.3.1. Problem driver description 

As  recently  emphasised  in  the  Letta  report47,  addressing  the  disparities  in  technical, 
operational and administrative capacities among the Member States, including by means of 
cooperation and integration, is essential for ensuring a level playing field within the single 
market. The quality of governance and of institutions also plays a role, as good governance 
reflects in agility/adaptability, impartiality and provision of quality public services.  

Low administrative capacity can also impact public authorities’ ability to access EU support 
programmes. As they may have limited means, fewer skills and less experience, may face 
higher difficulties  to go  through the application  process.  In  addition, digitisation of public 
authorities remains a substantial challenge, in particular, given that the majority of EU policies 
and  legislations  increasingly  have  a  digital  component.  Furthermore,  strengthening 
administrative capacities in  third countries enhances regulatory enforcement,  ensuring that 
consumer protection and product safety standards are effectively implemented and upheld. 
This  reduces  the  risk  of  substandard  or  unsafe  products  entering  the  single  market,  aligns 
regulations with EU standards, and prevents unfair competitive advantages for non-EU traders 
operating under weaker oversight. The enforcement and implementation of the single market 
policies  and  rules  rest  on  the  cooperation  between  national  authorities,  and  between  the 
national authorities and the Commission, which remains to be improved. Such cooperation 
exists,  as  shown  by  the  European  Union  Product  Compliance  Network  (EUPCN)  of  DG 
GROW and the Consumer Safety Network (CSN) of DG JUST both of which have played a 
pivotal role in making market surveillance more uniform and enhancing the capabilities of 
MSAs48. The European Union Testing Facilities (EUTFs) are expected to further strengthen 
market surveillance49. Yet, insufficient cooperation can result in inconsistent enforcement, 
duplication of efforts and impact the free movement of goods, people, services, and capital. 
In  addition,  it  may  also  hamper  the  achievement  of  the  Savings  and  Investments  Union. 
Despite progress,  cooperation between Members  States and with  the Commission remains 
limited and can undermine the effective implementation of EU law, the competitiveness and 
the full functioning of the single market. It can be noted that the Internal Market Information 

46 https://taxation-customs.ec.europa.eu/customs-4/prohibitions-and-restrictions/eu-cash-controls_en 
47 Enrico Letta, Much more than a market, April 2024. 
48 MSAs expressed during the interim evaluation of the SMP viewing  the European Union Testing Facilities 
(EUTF) and digital tools such as the Proactive Web Crawler (22 out of 32), Unique Identifiers (19 out of 32), 
and ICSMS (24 out of 31) as supportive of market surveillance efforts. 
49 Of the Market Surveillance Authorities (MSAs) surveyed during the interim evaluation of the SMP, 11 out of 
19 see the EUTFs as crucial for EU-level activities. 

20 

 
 
 
 
System (IMI) plays an important role in facilitating cooperation and fast exchanges between 
over 12,000 public authorities across Europe. However, delivery of user-friendly cross-border 
interoperable  public  services  by  seamless  data  among  public  administrations  remains  a 
challenge, along with access to digital solutions supporting Union’s policies. In this context, 
actions  implementing  the  Interoperable  Europe  Act,  including  the  governance  structure 
established by the latter, and additional uses of IMI could further reduce administrative burden 
and ensure greater cooperation among Member States and between Member States and the 
European Commission.  

The Customs Union founded in 1968, 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.  At  its  core  are  the  exclusive 
competence of the Union to regulate, and a common legal framework, which is implemented 
by the customs authorities of the Member States. Although the Customs Union is an area of 
exclusive competence with a high degree of harmonised EU legislation, the implementation 
of this legislation remains entirely with the individual Member States. Inconsistencies in the 
interpretation and application of EU law, uneven administrative capacities threaten the unity 
of the Customs Union: the Customs Union can only be as strong as its weakest link. This is 
in particularly highlighted in several European Court of Auditors special reports50.  

In the area of taxation, the EU and the national tax administrations suffer from insufficient 
capacity and insufficient cooperation, both within the EU as well as with third countries, to 
carry out their missions effectively and efficiently. Firstly, this is driven by the fact that there 
is a difference in capacity of the tax administrations. Some administrations are more advanced 
and agile than others to respond to trends such as green taxation (e.g. environmental tax), the 
commitment to repurpose environmentally harmful subsidies, globalisation and digitalisation. 
In connection to the latter, the national digital systems that tax administrations use are also 
unequal,  with  some  administrations  having  more  modern,  better  functioning  systems  than 
others,  resulting  in  differences  of  functioning  of  the  processes  and  operations  in  tax 
administrations.  Secondly,  the  obstacles  for  cooperation  between  tax  administrations  and 
other stakeholders are driving this problem. These obstacles can be of strategic nature such as 
different political and economic priorities, or of legal nature such as uneven interpretation of 
tax  legislation  or  of  administrative  and  operational  nature  including  for  example  different 
processes,  interoperability,  etc.  While  these  obstacles  are  partly  addressed  by  enhanced 
administrative cooperation51, there is still room for improvement and the full potential has not 

50 Special report 13/2023: Authorised Economic Operators: Solid customs programme with untapped potential 
and uneven implementation, 5 May 2023, European Court of Auditors  
Special report 04/2021: Customs controls: insufficient harmonisation hampers EU financial interests, 30 March 
2021, European Court of Auditors  
Special report 20/2019: EU information systems supporting border control: a strong tool, but more focus needed 
on timely and complete data, 11 November 2019, European Court of Auditors  
Special  report  26/2018:  A  series  of  delays  in  Customs  IT  systems:  what  went  wrong?,  10  October  2018, 
European Court of Auditors  
Special  report  19/2017:  Import  procedures:  shortcomings  in  the  legal  framework  and  an  ineffective 
implementation impact the financial interests of the EU, 5 December 2017, European Court of Auditors 
51 Council Regulation (EU) No 904/2010 of 7 October 2010 on administrative cooperation and combating fraud 
in the field of value added tax (OJ L 268, 12.10.2010, p. 1). ELI: http://data.europa.eu/eli/reg/2010/904/2021-
07-01. 

21 

 
 
 
 
been  achieved  just  yet.  As  such,  increasing  demands  for  tax  administrations  related  to 
digitalisation  and  e-commerce,  lead  to  increase  in  the  demand  for  quality  of  exchange  of 
information and administrative cooperation52. 

Moreover,  the  legislative  measures  become  only  meaningful  once  they  are  properly 
implemented,  requiring  facilitation  to  ensure  their  impact  and  accessibility  to  the  legal 
instruments for all tax authorities. At the same time, there are emerging needs for more central 
digital solutions to lift the burden that individual Member State tax authorities are facing in 
this  regard.  This  results  in  a  need  to  guarantee  a  support  to  cooperation  between  national 
authorities to ensure the well-functioning of the single market. Modern, efficient and resilient 
public authorities at national, regional, and local level, as well as specific centralised, EU-
level solutions, are a pre-requisite for a well-functioning single market and Customs Union, 
and for the achievement of Union goals. The recent crises that have affected the EU, most 
notably the COVID-19 pandemic and the consequences of Russia’s invasion of Ukraine, have 
tested the capacity of public authorities to respond to external shocks and to quickly adapt to 
pressing needs.  

As indicated by the final evaluation of the Hercule III and the interim evaluation of the UAFP, 
the  same  insufficient  capacity  and  insufficient  cooperation  exists  among  the  national 
authorities in charge of investigating and combating fraud affecting the expenditure of the 
Union  budget.  These  authorities  stringently  need  continued  EU  support  in  acquiring  the 
necessary investigative equipment, IT tools and training in order to step up their efforts, which 
is currently being addressed by the UAFP.   

Support should also be provided for platforms that facilitate the exchange of anti-fraud best 
practices and intelligence data among Member States. As a crucial element in safeguarding 
the EU’s financial interests, it is essential to maintain and enhance the tools required for the 
mandatory reporting of irregularities and fraud impacting EU expenditure in areas of shared 
and indirect management. 

In addition, the Union needs to support candidate, neighbouring and other third countries in 
their  building  and  upgrading  of  national  anti-fraud  structures  aimed  at  protecting  the  EU 
financial interests.  Similarly, the future EU interventions  in  both  Member States  and third 
countries  need  to  take  into  account  the  rapid  changing  environment  in  terms  of  the  fight 
against fraud, with new emerging fraud patterns and far-reaching technological changes. This 

L 

(OJ 

121, 

repealing 

8.5.2012, 

2073/2004 

Regulation 

(EC)  No 

Council Regulation (EU) No 389/2012 of 2 May 2012 on administrative cooperation in the field of excise duties 
and 
1). 
ELI: http://data.europa.eu/eli/reg/2012/389/2023-02-13. 
Council Directive 2011/16/EU of 15 February 2011 on administrative cooperation in the field of taxation and 
repealing Directive 77/799/EEC (OJ L 64, 11.3.2011, p. 1). ELI: http://data.europa.eu/eli/dir/2011/16/2024-01-
01. 
52 The use of different data sources for VAT compliance purposes varies between Member States. Particularities 
in  areas  such  as  the  legislative  framework,  political  organisation  and  social  structures  also  influence  the 
variation. Although all Member States exchange information and use mutual assistance agreements and third-
party  information,  only  a  minority  use  internet  platform  payment  data  or  behavioural  studies.  These  studies 
identify  the  socioeconomic  factors  (e.g.  age,  gender,  employment  status  and  educational  attainment)  and 
institutional factors (e.g. trust in government and community satisfaction with the quality of public services) that 
have an impact on a taxpayer’s motivation to comply with their VAT obligations.’ Source: VAT Administration 
in the EU - European Commission. 

p. 

22 

 
 
 
also  applies  to  taxation,  market  surveillance,  implementation  and  alignment  tools, 
competition,  standardisation,  consumer  protection,  and  statistics.  In  the  field  of  customs, 
enlargement and Eastern neighbourhood countries will become EU external border therefore 
their  onboarding  on  customs  and  taxation  digital  systems,  upgrading  of  customs  control 
performance through customs control equipment and human capacity building are of critical 
importance. 

Some governance structures (at Union, national and subnational levels) may be sub-optimal 
for effective coordination and sharing of information across policy areas and administrative 
levels, thus risking uneven and potentially more burdensome implementation. For example, 
the  presence  of  a  coordinating  body  with  a  strong  political  mandate  helps  to  facilitate  a 
strategic approach and coordinating actors across policy areas.  

The  appeal  of  accessing  a  well-functioning  single  market  enhances  the  EU’s  external 
influence. It is therefore necessary to further support Member States in efforts to harness the 
full potential of the single market, which also includes addressing persistent discrimination, 
to ensure their full participation in the single market, as also highlighted in the Letta report. 

An  uncoordinated  approach  to  data  gathering  and  processing  by  different  programmes, 
synergies, training and capacity buildings actions, awareness raising activities, cross-border 
enforcement,  products  testing,  support  to  network  of  Member  States  authorities,  IT 
development  (interoperability)  can  impact  the  uniform  application  of  rules  and  undermine 
their effectiveness. An example of effective training and capacity building is to be found in 
the interim evaluation of the SMP, which pointed out that the European Statistical Training 
Programme (ESTP) exceeded its participation targets53. Equally, the annual progress reports 
of the Customs and Fiscalis programmes record high-level interest and active participation to 
EU-level human competency building activities, together with high-level satisfaction of the 
participants54.  Better  coordination  of  policies,  including  at  EU  level,  is  also  required  to 
address the challenges affecting the EU’s competitiveness and to strengthen the EU’s strategic 
and  geopolitical  stance.  As  indicated  in  the  Draghi  report,  uncoordinated  national  policies 
often lead to duplication, incompatible standards, and failure to consider externalities55.  

2.2.3.2. Lessons learnt from previous programmes 

In  some  areas,  there  was  sub-optimal  administrative  cooperation  and  integration  between 
Member States  and between Member States  and  the Commission  that impacted  consistent 
levels of enforcement of EU policies, law and rules. To avoid the creation of de facto barriers 
to free movement, there is a need for reinforced operational and administrative cooperation 
and  integration  between  authorities,  and  between  the  national  administrations  and  the 
Commission. 

53 Source: Eurostat data. This indicates that the knowledge and skills of staff at NSIs and Eurostat, required for 
rapidly  addressing  emerging  data  demands  and  for  generating  statistics  derived  from  various  sources,  data 
sharing, and innovative methodologies, are being sufficiently developed. 
54 See also the EU’s Programme Performance Statements, where these indicators are equally featured.  
55 The future of European competitiveness – A competitive strategy for Europe. 2024. 

23 

 
 
 
Digital tools and platforms, such as the E-surveillance Web Crawler and the Proactive Web 
Crawler, Safety Gate and the document digitalisation tool, are seen as valuable resources for 
improving market surveillance by most Market Surveillance Authorities, allowing to address 
product  compliance  issues  related  to  e-commerce.  However,  some  of  them  are  still  under 
development, and further optimisations will probably be needed to enhance the interface for 
users  and  implement  additional  AI-based  functionalities.  In  terms  of  the  Customs  Union, 
digitalisation and the establishment of a modern, paperless environment started decades ago. 

Capacity building for Consumer Protection Cooperation (CPC) authorities and ADR bodies 
is  required,  backed  by  regular  needs  assessments  to  keep  pace  with  evolving  legislation. 
Upskilling of ADRs will be essential to tackle new categories of consumer disputes, making 
workshops and events for exchanging best practices essential. Enhance cooperation among 
Member  States  to  address  the  fragmented  ADR  landscape  across  EU  and  promote 
collaboration  among  sector-specific  ADR  networks.  This  will  help  reduce  administrative 
challenges by sharing resources, exchanging best practices 

Platforms such as the FIU.net (Financial Intelligence Units) contribute to the EU's efforts in 
enhancing  cross-border  collaboration  among  Member  States.  The  budgetary  contribution 
provided for the Commission to be able to take over its maintenance from Europol has allowed 
to significantly enhance its development which has amplified its effectiveness across borders 
by leveraging on EU funding to ultimately strengthen the EU's collective response to financial 
crimes. 

Consumer products circulating in the single market, whether bought online or offline, have 
become safer, and dangerous products are recalled from the single market. Tackling this issue 
requires  coordination  and  cooperation  among  Member  States  authorities.  For  instance, 
Coordinated  Activities  on  the  Safety  of  Products  (CASP)  facilitated  joint  product  testing, 
cross-border collaboration among national market surveillance authorities, and exchange of 
results  and  best  practices  that  enhanced  safety  measures  and  strengthened  consumer 
confidence in product safety within the single market. Despite progress, the problem of non-
compliant products persists, and cooperation should be strengthened. Furthermore, the shift 
to a circular economy that retains the value of materials in products and minimises waste has 
led to the adoption of new rules with a direct impact on the compliance of products entering 
the single market.56 There is also a high rate of non-compliance with environmental standards 
for imported products. For example, a European Environment Bureau analysis found that 95% 
of products sold via online marketplaces are non-compliant with chemicals laws.  

Communication  and  knowledge  sharing  between  different  stakeholders  was  assessed 
satisfactory by the interim evaluation of the SMP, nevertheless, it can be further improved.    

Support  is  needed  for  cooperation  and  training  to  equip  national  statistical  authorities  to 
further enhance the capacity of the European Statistical System to leverage new data sources 
and technologies and continue delivering high quality and timely data and statistics.  

56 Regulation (EU) 2024/1781 of 13 June 2024 ESPR -DPP 

24 

 
 
 
This  could  be  partly  addressed  via  training,  capacity-building,  exchanges  of  expertise  and 
knowledge,  joint  enforcement,  and  networks  and  platforms.  This  would  allow  to  facilitate 
cross-border  cooperation  within  Members  States  and  across  the  single  market.  Joint 
enforcement actions have been particularly effective under the SMP. 

In the absence of the outcomes of the interim evaluation of the current programme generation, 
this  impact  assessment  relies  on  the  findings  of  the  Customs  2020  and  Fiscalis  2020 
programmes’ final evaluation. Both evaluations conclude that the EU intervention over the 
past  three  decades  supporting  cooperation  in  the  field  of  customs  and  taxation  was 
instrumental in the improved functioning of the internal market and Customs Union. On the 
taxation  side,  the  appreciation  for  the  support  provided  by  the  Fiscalis  programme  to  the 
administrative  cooperation  instruments  has  become  clear,  shown  by  the  high  uptake  of 
beneficiaries.  The  results  of  Eurofisc  in  the  fight  against  VAT  fraud  has  increased 
considerably since Fiscalis funded the Transaction Network Analysis (TNA) that automated 
their data collection process  and the Expert Team  that operates the electronic system  on a 
daily base. Eurofisc has detected suspicious transactions for an amount of EUR 1.5 billion in 
2018, while in 2023, with TNA use, the amount was EUR 14.6 billion.  

However,  several  ECA  special  reports  in  the  customs  domain  highlights  that  despite  this 
decades’  long  support  to  the  Customs  Union,  whose  iterations  all  targeted  the  objective 
“Member States acting as one under the Customs Union” several discrepancies can still be 
identified in terms of establishing a uniform playing field. The shortcomings often lead back 
to the lack of centralised solutions and closer cooperation amongst the Member States, as well 
as  the  approximation  of  the  administrative  and  operational  practices.  Equally,  the  special 
reports  note  the  need  for  reinforced  administrative  and  operational  capacities  in  the 
administrations to fulfil their mandate and mission as per the Union Customs Code. Moreover, 
on  the  taxation  side  several  ECA  special  reports  concluded  that  there  is  room  for 
improvement. This includes for example the special report on e-commerce in which it became 
clear  that  many  challenges  of  collecting  VAT  and  customs  duties  remain  to  be  resolved. 
Another example can be found in the special report on tackling intra-community VAT fraud 
on which more action is needed. 

In addition, the delays in the national delivery on the Union Customs Code (UCC) national 
components  highlighted  in  the  annual  eCustoms  reports  leading  to  the  need  to  amend  the 
related milestones  set  in  the legislation, extending the deadlines show that not  all national 
customs authorities have the capacity to respond to legislative obligations in a timely manner. 
Efforts  under  the  Customs  programme  (and  its  predecessors)  to  facilitate  the  cooperation 
between national administrations and authorities to share the burden of IT development led 
to limited success, as confirmed by the assessment of the Expert Team on New Approaches 
on IT Collaboration (ETCIT) to develop and operate customs IT systems and confirmed by 
the  identified  hindering  factors  by  the  Chief  Information  Officers’  Network  (e.g.  legal 
boundaries, operation and digital limitations).  

The Technical Support Instrument (TSI) supports the capacity building of national authorities 
and administrations. The TSI provides tailor-made technical expertise to Member States to 
design  and  implement  reforms.  The  main  goal  of  the  TSI  is  to  enhance  Member  States’ 

25 

 
 
administrative capacity to deliver on reforms linked to key EU policies. The technical support 
is  provided in  a wide range of policy  areas  related to  public administration and the single 
market57,  including  but  not  limited  to  customs,  taxation  and  anti-fraud58.  TSI  support  is 
provided via expertise and technical support to all Member States to carry out reforms that 
create jobs,  inclusive societies and sustainable growth.  The TSI has a budget  of EUR 864 
million under the 2021-2027 MFF.  

According  to  the  interim  evaluation  of  the  TSI,  the  Instrument  has  proven  effective  in 
promoting cooperation and cross-border exchanges among Member States, bringing Union-
wide impacts. This was particularly achieved through multi-country projects or TSI flagships 
projects,  such  “Public  Administration  Cooperation  Exchange”,  that  was  launched  in  2023 
with  the  objective  of  creating  a  European  community  of  civil  servants  that  share  good 
practices  and  create  bilateral  contacts.  This  evaluation  underscores  the  positive  impact  of 
fostering continuous cooperation and the creation of a community of experts across Member 
States. Cooperation between National Administrations and sharing national practices at EU 
level  for  the  design,  implementation,  and  evaluation  of  reforms  makes  it  possible  to  pull 
together the best  and most  innovative elements  from  each Member State, thereby creating 
transnational  and  national  structures  that  are  competitive  worldwide,  while  preserving 
diversity at national level. 

2.2.4.  Problem driver: Rulemaking, standard-setting and enforcement at 

EU level may hamper their adaptability 

2.2.4.1. Problem driver description 

Ensuring the effectiveness of EU rulemaking, standard-setting, and harmonised enforcement 
is  a  continuous  challenge,  particularly  considering  evolving  economic,  technological,  and 
regulatory  landscapes,  including  the  increasing  digitalisation  of  markets  and  governance. 
European  standards  play  a  pivotal  role  in  fostering  harmonisation  across  the  EU  and 
supporting  key  policy  objectives.  As  highlighted  by  the  interim  evaluation  of  the  SMP 
development of European standards has notably benefited from SMP funding, resulting in a 
significant increase in the number of European standards adopted. The implementation rate 
of European standards  as national  standards increased from  71.23% in  2021 to  86.03% in 
2023,  reflecting  steady  year-on-year  improvement.  The  importance  of  funding  to  support 

57 In the area of single market, the TSI provides technical support to Member States in building competitive 
economies. The support covers a wide range of policy areas, including SMEs and entrepreneurship, growth and 
productivity  strategies,  industry  and  industrial  ecosystems,  digital  economy  and  innovation,  competition  and 
consumer policy, foreign investment and trade, licencing and inspections as well as transport and mobility. 
58  In  the  area  of  customs,  the TSI  support  encompasses  16 reforms  with  ten  Member  States.  To  address  the 
challenges  faced  by  Member  States’  customs  authorities  stemming  from  globalisation,  green  and  digital 
transition, as well as international tax competition, the TSI supports EU-wide initiatives, notably the proposal 
for the EU Customs Reform package.  
In  the  area  of  taxation,  the  TSI  support  focuses  on  increasing  tax  compliance,  improving  risk  management 
through  digitalisation,  countering  aggressive  tax  planning,  tax  fraud  and  avoidance,  strengthening  the 
administrative cooperation and exchange of information between tax administrations, as well as enhancing the 
capacity of customs authorities to improve their controls and risk management through digitalisation. The 2025 
revenue administration flagship project ‘Simplification of Revenue Administration for Business’ focussed on 
tax  simplification.  This  flagship  offered  support  to  Member  States  for  reforms  such  as  business  process 
improvement, digitalisation, and policy evaluation. 

26 

 
 
 
financial  standards  is  evidenced  in  the  field  of  international  financial  reporting,  where  the 
IFRS Accounting Standards have seen widespread application within the EU, with almost all 
standards adopted (16 out of 17 IFRS and all International Accounting Standards)59. Between 
2021 and 2023, the number of countries using IFRS Accounting Standards increased from 
140  to  16860,  reflecting  broader  international  adoption.  Stakeholders  consulted  during  the 
interim  evaluation  of  the  SMP  confirmed  the  effectiveness  of  the  work  of  the  IFRS 
Foundation: 78.2% (18 out of 23 respondents).  

Moreover, there is a pressing need to ensure that policies and legislation are future-proof and 
ready for the digital age, thereby considering digital aspects from the start of the policy cycle 
through an effective and consistent use of digital-ready policymaking becomes paramount for 
a well-functioning single market. 

New single market challenges and unforeseen crises due to geopolitical contexts or societal 
and technological change represent challenges the EU must face. There is a need to support 
the adaptability of rulemaking, standard-setting and enforcement to evolving circumstances 
to continuously adjust policies and enforcement to properly respond to unforeseen emerging 
challenges.  

New rules in the EU acquis are designed and adopted with significant input from Member 
States and their public authorities. On the ground however, the transposition and application 
of EU law and the functioning of the single market may be affected by limited administrative 
capacity. Union law provides for a level playing field, which is essential for the functioning 
of the single market. This particularly concerns the fields of single market, standardisation, 
market surveillance61, mutual recognition, conformity assessment, consumer protection and 
product safety. The level playing field also consists in rules on business, trade and financial 
services, on the production of European statistics and on the promotion of fair competition.  

To prepare and evaluate policies, support efficient standard setting and enforce EU legislation, 
the Commission relies on up to date and trustworthy data. Trust in European statistics remains 
high, with 95% of 1 675 respondents in the 2024 User Satisfaction Survey (USS)62 expressing 
confidence  in  the  impartiality  and  reliability  of  the  data.  High-quality  European  statistics 
produced by Eurostat are indispensable for EU decision-making and for the measurement of 
the  performance  and  impact  of  EU  initiatives63.  The  statistical  coverage  has  expanded 
significantly.  Eurostat  increased  the  number  of  indicators,  sub-indicators,  and  data 
breakdowns from 446 million in 2020 to 718 million in 2022. Although the figure dropped to 
705 million in 2023, the overall growth since 2020 indicates substantial progress64. 

The  fragmented  application  of  common  rules  is  due  to  a  diverse  technical  capacity, 
resources,  expertise,  and  know-how  to  deliver  their  implementation.  The  effective 

59 IFRS - View Jurisdiction. 
60 IFRS website IFRS - Why global accounting standards?. 
61  The  impact  of  AdCos  was  pointed  out  in  the  interim  evaluation  of  the  SMP  by  the  MSAs  as  indicating 
improved market surveillance at EU level (25 out of 32) and within their countries (22 out of 32). 
62 User Satisfaction Survey 2024, when asked whether the completeness of data was better or worse (comparison 
to the previous USS conducted in 2022), 52% of 1 675 respondents replied that it was the same or better, with 
only around 2% saying it was worse. 
63 Results from the USS 2024 show that users find statistics important for monitoring or formulating policy and 
for preparing legislation. 
64 Source Eurostat’s reference database. 

27 

 
 
 
 
implementation does not lie exclusively with public administrations at national level but is 
also  influenced  by  the  capacity  of  bodies  at  regional  and  local  level  or  non-state  actors 
involved in the implementation on the ground. It also leads to centralised, EU-level solutions. 
Enforcement  actions  are  confronted  with  increasingly  sophisticated  and  numerous  digital 
tools used by economic operators; an exponential increase in electronic communications; a 
rapidly  growing  use  of  algorithms,  big  data,  big  data  analytics  and  artificial  intelligence, 
which increases difficulties in detecting infringements (for example, digital tools may help 
conceal anticompetitive conduct) and collecting evidence. 

As  identified  in  the  Letta  report65,  discrepancies  in  the  way  EU  law  is  transposed  or 
implemented may result in different interpretations among national legislators and courts, 
as  each  Member  State  has  different  rules  in  the  same  policy  area.  This  contributes  to  the 
fragmentation of the single market.   

Applying  a  digital-ready  policy-making  approach,  simplifying  the  regulatory  framework, 
harmonising and uniformly implementing laws across Member States and more consistently 
enforcing  single  market  rules  are  essential  to  ensure  a  well-functioning  and  strong  single 
market.  In  the  area  of  competition,  profound  changes  in  the  economy  have  increased 
competition  risks:  the  Draghi  Report66  recommends  that  competition  authorities  should 
become more forward-looking and agile: in other words, there is a need to (i) investigate more 
complex cases and (ii) at the same time to conclude those cases faster than in the past. To 
achieve this dual objective, the Draghi report states that more resources are also needed.   

Recent crises have shown the increasing need to ensure swift reactions to address unforeseen 
events (e.g. domains of product safety, statistics). Some degree of adaptability is embedded 
in funding programmes, such as the SMP, however more flexibility will likely be required in 
light  of  potentially  numerous  upcoming  emerging  needs  (linked  with  climate  change  and 
related  natural  disasters,  unstable  geopolitical  landscape).  These  needs  may  well  concern 
consumers and businesses, Member States and the single market overall. 

Effective  rulemaking  and  enforcement  rely  on  robust  data  collection,  studies,  and 
assessments.  Gaps  in  data  collection,  production,  and  distribution  hinder  the  ability  of 
policymakers  and  enforcement  authorities  to  make  informed  decisions.  This  could  be 
addressed via data collection, production and dissemination, and analysis activities, Digital 
tools, the provision of assistance services to authorities, support to standard-setting efforts, as 
well  as  joint/coordinated  actions.  This  would  allow  to  ensure  and  enhance  authorities  and 
bodies’ ability to effectively apply tailored and agile rules produced by the EU. 

Furthermore,  in  areas  where  a  coordinated  approach  exists,  there  is  a  continued  need  to 
maintain and reinforce the coordination efforts. Where the rules are enforced by the national 
authorities, the Commission may take an active role in ensuring coherence by coordinating 
horizontally, without interfering the Member States’ sovereignty, to reduce inherent risks of 
divergent outcomes in the internal market due to incoherent enforcement. 

Enforcement of existing EU law is necessary to ensure the effective functioning of the single 
market.  Enforcers,  for  example  in  the  area  of  competition  law,  are  confronted  with 

65 Letta Report. 
66 See pages 298 and 299 of part B of the Draghi report. 

28 

 
 
 
increasingly  sophisticated  IT  tools  used  by  economic  operators  and  other  non-state 
stakeholders, an exponential increase in electronic communications, a rapidly growing use of 
algorithms  and  artificial  intelligence:  this  results  in  increasing  difficulties  in  detecting 
infringements and collecting evidence.  

The rapid digital transition is also reshaping industries, creating new challenges that demand 
agile and effective enforcement. Those challenges require the Commission to modernise its 
legislation, to make sure it remains effective and efficient. 

implemented  and  enforced.  Ensuring 

Citizens, consumers and businesses can fully benefit from the single market only when EU 
rules  are  correctly 
the  correct  day-to-day 
implementation of single market rules is the collective responsibility of the Commission and 
the Member States. In particular, a correct application of regulations relies on the work of 
national authorities to give full effect to them. There is a clear need to address the deficits 
related to transposition and implementation of EU rules, reducing administrative barriers and 
improving the business environment. Correct and timely transposition of EU law is of critical 
importance to ensure that single market legislation achieves its intended effects.  

It  will  also  be  vital  to  continue  developing,  producing  and  disseminating  relevant  official 
European statistics in an efficient manner while reducing administrative burden, in support to 
policy making in this domain. This could lead to a gradual construction of a single market for 
data, with safeguards, to the benefit of stakeholders and policymakers.  

The Customs Union is an exclusive competence of the EU and is stipulated by the UCC and 
the UCC-related EU legislative landscape. However, the Member States’ customs authorities 
are responsible for its implementation. The legislative landscape for customs and the burden 
on the national authorities both in terms of implementation and enforcement is increased by 
the fact that national customs authorities are best positioned to control the overall movement 
of goods at the external borders – also contributing to the protection of the single market by 
controlling  compliance  with  product  requirements,  monitor  drug  precursors,  enforce 
intellectual property rights, food, health and environmental rules, contribute to human rights 
and sustainability, and much more to ensure the protection of the EU’s external borders. All 
these sectoral rules to be enforced by customs at EU external borders are called “Prohibitions 
and Restrictions” (P&R). According to the latest calculations, there are more than 350 EU 
legislations, and customs authorities struggle to cope with such a wide range of specialised 
and often complex rules.   

EU tax policy supports revenue collection for the EU and Member States' budgets. While 
initially focussing on putting in place harmonising legislation mainly for indirect taxes, it has 
over the years widened its focus more on coordination on tax matters amongst Member States 
and the fight against tax fraud, tax evasion and tax avoidance. EU tax policy is a key element 
for ensuring the proper functioning of the single market, including by avoiding distortions of 
competition  through  taxation.  There  is  still  insufficient  level  flexibility  in  rulemaking  and 
enforcement. The unanimity has its drawbacks67 and limits the potential of an EU tax policy 
to support a well-functioning competitive single market by generating a rigid and non-agile 
legal environment. Slow reaction and even slower realisation have a negative impact on the 

67 Commission Communication ‘Towards a more efficient and democratic decision making in EU tax policy’ 
COM (2019) 8 final. 

29 

 
 
 
uniform playing field in the EU and reflects also negatively on the EU in the global context. 
Sovereignty reflexes  are stronger among  the Member States because tax  policy is  and has 
been used by Member States to justify protecting specific national interests or build business 
models around the concept of tax to attract certain economic activities or consumers and to 
protect certain competitive advantages. At the same time, even when EU legislation has been 
agreed,  its  effectiveness  is  not  guaranteed  due  to  its  dependence  on  the  interpretation, 
implementation  and  enforcement  on  national  level.  New  strands  of  EU  initiatives  in  the 
domain of taxation, such as behavioural taxes or the phasing out of fossil fuel subsidies, also 
require strong coordination at the earliest stages in the legislative preparations.  

2.2.4.2. Lessons learnt from previous programmes 

The  effective  development,  implementation,  and  enforcement  of  EU  competition  policy, 
which has a significant positive impact on customer savings and on the EU economy overall68, 
requires  the  Commission  to  have  the  necessary  expertise  and  digital  tools  to  support  its 
enforcement activities. The necessary expertise, such as external data to support case work, 
or studies supporting the review of guidelines, is necessary to modernise the EU's competition 
policy to ensure it supports European companies to innovate, compete and lead world-wide. 
In  addition,  digital  solutions  serve  various  purposes  such  as  case  management,  document 
review, tools that facilitate secure data exchange with stakeholders.  The potential benefits in 
strengthening the enforcement of competition rules and the impact on the single market has 
been analysed in detail69: measures aimed at limiting the market power of the most profitable 
companies  and  at  tackling  the  lack  of  competition  in  lagging  countries  each  promise  to 
increase GDP by around 4% after ten years. In order to strengthen and speed up enforcement 
of  competition  rules  (in  close  cooperation  with  the  national  competition  authorities  in  the 
Member States), the development and improvements of digital tools need to be substantially 
increased,  together  with  the  support  to  existing  infrastructure.  For  example,  the  usage  of 
Artificial Intelligence such as technology-assisted document review in competition cases can 
substantially increase the efficiency and relevance of investigations and cases analysis. 

Effective  rulemaking,  standard-setting  and  enforcement  in  the  single  market  also  requires 
other  bodies  to  be  supported,  so  that  they  can  fulfil  their  roles  and  responsibilities.  For 
example,  the  setting  of  standards  necessitates  support  for  European  Standardisation 
Organisations  (ESOs).  Harmonised  European  standards  allow  economic  operators  to 
demonstrate  compliance  with  EU  law  with  one  standard  across  the  single  market.  As 

68 Direct customer savings generated by cartel, antitrust and merger enforcement are significant (between EUR 
13.7  billion  and  EUR  23.4  billion  per  annum  over  the  period  2014-2023).  In  addition,  the  Commission’s 
competition policy interventions can lead to a medium to long-term increase in real GDP in the range of 0.6% - 
1.1% (equivalent of an uplift of EUR 80 - 150 billion in 2019 GDP), as well as a 0.3% - 0.7% reduction in the 
price level.  
See  Competition  Policy  Brief  -  Customer  savings,  a  10-year  perspective  (2022)  or  “Modelling  the 
macroeconomic impact of competition policy: 2023 update and further development”, report prepared by the 
Directorate-General for Competition, the Joint Research Centre and the Directorate General for Economic and 
Financial  Affairs,  Publications  Office  of  the  European  Union,    https://op.europa.eu/en/publication-detail/-
/publication/c086d580-2229-11ef-a251-01aa75ed71a1/language-en. 
69 See ’Protecting competition in a changing world: Evidence on the evolution of competition in the EU during 
the 
2024, 
25 
KD0924494enn_Protecting_competition_in_a_changing_world_staff_report_2024.pdf 

years’, 

June 

past 

30 

 
 
 
underpinned by the 2022 EU Standardisation Strategy70, standards play an important role for 
the digital and green transition and can give the EU a global leadership role. Standard-setting 
efforts  are  undertaken  by  European  standardisation  organisations  and  bodies  involved  in 
financial and non-financial reporting and auditing. The involvement of diverse stakeholders, 
such as businesses and consumer representatives, is essential in European standardisation 
processes. However, ensuring adequate representation and influence at the international level 
remains  a  challenge  and  still  requires  supporting  activities  ensuring  that  EU  views  and 
interests are considered. 

The  start  of  the  Russian  invasion  of  Ukraine  prompted  an  unpredictable  need  for  a  rapid 
increase  in  the  production  of  timely  European  Statistics,  in  particular,  energy-related 
following  the  evolving  priorities  of  the  EU.  European  statistics  show  a  strong  EU  added-
value, due to their impartiality, reliability, and comprehensive coverage, cost-effectiveness, 
as well as to their significantly improved comparability and harmonisation across Member 
States.  The  SMP’s  statistical  pillar,  the  European  Statistical  Programme  (ESP),  general 
objectives were well-aligned with the users’ expectations and ensuing needs of the European 
Statistical  System  (ESS)  to  adapt  to  them,  ensuring  that  the  ESP  remained  relevant  and 
responsive to changing policy priorities and data requirements. Additionally, the ESP’s ability 
to address emerging issues and crises underscored its commitment to serving the ESS and the 
broader  stakeholder  community.  Despite  the  overall  positive  alignment  with  stakeholder 
needs, data gaps remain in certain areas, highlighting the need for continuous improvement 
and innovation. 

With regards to cooperation between enforcement authorities, stronger coordination within 
customs and related enforcement actions to tackle the challenge of e-commerce has already 
been identified as a priority71. This was affirmed in the public consultation accompanying the 
Customs Reform proposal, where 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 agreeing and 47 (24%) tending to agree72.  

In the area of taxation, the need for cooperation is demonstrated by the fact that a large part 
of  the  collaborative  activities  financed  under  the  Fiscalis  programme  are  focused  on 
cooperation between tax authorities. For example, in 2024, out of the total of 171 collaborative 
actions, those aiming at fostering cooperation between tax authorities, including exchange of 
tax  information,  represented  the  most  significant  part  of  activities  with  121  actions. 
Worthwhile to mention as well is that the Advanced International Administrative Cooperation 
(EU AIAC) Community73 is year after year the community that produces the highest number 
of guidelines and recommendations in taxation. 

70 An EU Strategy on Standardisation - Setting global standards in support of a resilient, green and digital EU 
single market, COM(2022)31. 
71 COM(2025) 37 final. 
72 SWD/2023/140 final. 
73 The EU AIAC Community covers existing, new and future administrative cooperation tools. In addition, these 
cooperation tools are available for all tax areas such as Value Added Tax (VAT), excise duties, direct taxation 
and recovery of claims. The AIAC Community provides Member States with a common approach towards an 
increased  need  to  fight  against  cross border  tax  fraud  and  evasion  and  promotes  the  use  of  advanced 
administrative cooperation instruments. 

31 

 
 
 
2.3.  How likely is the problem to persist? 

In  the  absence  of  EU  action  ensuring  coordinated  funding  in  the  area  of  single  market, 
Customs Union, taxation, and anti-fraud policies, the identified issues causing the problems, 
and their roots identified would persist.   

In  an  unchanged  funding  landscape,  the  capacity  of  the  Commission  to  sustain  activities 
corresponding  to  legal  obligations  and  fully  assess  the  enforcement  of  EU  law  could  be 
limited. Efforts to further improve and complete the functioning of the single market would 
be hindered.   

As  evidenced  in  the  interim  evaluation  of  the  SMP,  legal  obligations  deriving  from  EU 
legislation and related to the single market may be difficult to fulfil without a certain level of 
resources, e.g. for the competition, internal market (goods, services and finance) or consumer 
protection policies. As an example, the Commission would not be able to deliver on its Treaty-
based obligations to effectively enforce competition policy across all instruments (e.g. risking 
the customer savings of 14-23 billion per year from interventions in competition cases and 
risking the overall positive impact on real GDP in the range of 0.6% - 1.1%).  

The Commission might have issues to maintain essential subsidies to European organisations 
or  authorities  benefitting  from  EU  funding  at  an  acceptable  level  (e.g.  consumers, 
standardisation organisations, statistics) or impact the coordination and collaboration thereof.  

It would not facilitate the Commission to adapt to new technological developments or respond 
to quickly emerging policy needs. It could remain difficult to properly face crisis situations 
or keep up with technological developments (such as in the context of artificial intelligence) 
or EU enlargement. 

3.  WHY SHOULD THE EU ACT? 

3.1.  Legal basis 

The choice of the legal basis must be supported by objective factors open to judicial review, 
which include the aim and content of the EU measure. 

Article 114 TFEU on achieving the objectives of the internal market, Article 169 TFEU and 
Article  169  (2)  (b)  TFEU  concerning  consumer  protection74,  Article  197  TFEU  on 
administrative cooperation, and Article 338 TFEU on statistics, Article 33 TFEU on customs 
cooperation in the Customs Union, Article 207 TFEU on common commercial policy, Article 
325 TFEU on protecting the financial interests of the Union constitute the legal bases.   

3.2. 

Subsidiarity: Necessity of EU action 

The EU faces global competition from other major economic blocs and needs to ensure that 
the single market remains competitive, performing, accessible and innovative and ensures a 
level playing field for stakeholders. A more flexible funding system — where programmes 

74 Regulation 254/2014, Regulation 2017/826. 

32 

 
 
 
are easier to navigate and adapt to different needs — can foster and boost the single market’s 
global competitiveness and level playing field. 

Boosting collaboration and cross-border projects 

Flexible  funding  structures  make  it  easier  for  organizations  to  collaborate  across  borders. 
Streamlined  rules  and  faster  approval  processes  can  help  consortia  form  quickly,  share 
knowledge,  and  co-develop  solutions  to  challenges  such  as  continuously  evolving  trade 
patterns, climate change, and digital transformation. 

Addressing emerging and rapidly changing needs 

The EU’s funding landscape needs to display resilience and agility to respond to emerging 
crises situations — such as recently witnessed like pandemics or energy shocks—and to be 
equipped to  adapt  to  digital transition  and rapid  technological  change.  Rigid rules  make it 
difficult to redirect funds quickly or pivot to new priorities, slowing the EU’s ability to tackle 
urgent issues. 

Today’s  challenges  require  a  collective  and  coordinated  EU  response  considering  their 
global nature and the high levels of interdependence between Member States and to avoid 
fragmentation across the Union. The high levels of interdependence of Member States and of 
economic integration in the single market mean that policy action in one Member State can 
have significant spillover effects on other Member States.  

In addition, due to the nature of the challenges, intervention at EU level provides cooperation 
and harmonisation, and offers transnational and cross-border relevant benefits and economies 
of scale for businesses, consumers and citizens, as well as national authorities. 

EU level funding is  also needed to enable the Commission to fulfil its legal obligations 
(TFEU and  related legislation)  and  address single market issues falling  in its competence. 
Although  the  Customs  Union  is  an  area  of  exclusive  competence  with  a  high  degree  of 
harmonised EU legislation, the implementation of this legislation remains entirely with the 
individual Member States. The Customs Union can therefore only be as strong as its weakest 
link.  Strong  cooperation  is  essential  to  reach  a  deeper  operational,  including  digital, 
integration and to enable customs authorities in the different Member States to act as if they 
were one, as well as to ensure correct collection of customs duties as well as import Value 
Added Tax and excise and other duties and levies.  

As the activities in the customs area are of a cross-border nature, facing global and trans-
European  challenges  directly  or  indirectly  linked  with  the  flow  of  goods  at  the  external 
customs borders, such as organised crime and terrorism, globalisation and e-commerce in an 
efficient and coherent way across Europe cannot be achieved by the Union or Member States 
individually.  Cooperation  and  operational 
integration  between  national  customs 
administrations  are  needed  to  enable  participating  countries  to  jointly  work  out  common 
solutions and best practices at operational level to deliver on these objectives and face all 
related challenges.  

Such high degree of cooperation and coordination can only be achieved with a centralised 
approach, ideally at Union level. A Union framework for cooperation as indicated by the 
Commission’s proposal on the EU Customs Reform would address the encountered problems 

33 

 
 
in  terms  of  uniform  implementation  and  harmonisation,  generating  a  fragmentation  of 
processes, practices and approaches that puts the Customs Union at risk. The resulting set-up 
is substantially more cost efficient than if each Member State were to set up its individual 
cooperation  framework  on  a  bilateral  or  multilateral  basis.  This  is  also  confirmed  by  the 
preliminary findings of the currently ongoing interim evaluation of the Customs programme, 
which  refers  to  the  Programme  “achieving  efficiencies  of  scale  and  efficiency  gains  in  IT 
capacity  building,  while  the  collaborative  activities  provide  opportunities  for  cooperation, 
communication  and  networking  across  the  EU  that  could  not  be  achieved  without  the 
involvement of the EU and are essential to ensure harmonisation 

In the tax area, a versatile and complex legal and digital landscape, efforts on harmonisation 
and approximation of tax law and administrative actions, as well as rapidly emerging needs 
prompt the demand for EU interventions, inviting for support Member States in their effort 
and  responsibility  to  implement  Union  law.  EU  intervention  via  funding  programmes  has 
assisted EU tax policy for more than three decades – with proven added value – by providing 
financial  means  to  work  out  common  and  shared  implementation  mechanisms  for  EU  tax 
legislation.  Indeed,  a  significant  part  of  the  EU  tax  legislation  requires  modern  digital 
solutions  to  be  put  in  place  for  allowing  exchanging  information  in  relation  to  taxpayers 
(citizens or businesses) or cross-border transactions. This exchange of information amongst 
Member States takes place because EU funding allows financing EU-level electronic systems, 
or their common components. Without such financial support no common electronic systems 
would be developed, and many EU legislative acts  would remain  unimplemented, or their 
implementation would suffer from important delays and technical obstacles.  

Given  that  most  policy  areas  have  a  strong  digital  dimension,  strengthened  collaboration 
between public sector organisations at EU, national, regional and local level across the EU is 
necessary to enhance interoperability and facilitate seamless data exchanges for better policy 
implementation, particularly through an effective application of digital-ready policymaking, 
and for burden reduction. 

The importance of tackling this at EU level is emphasised by the existence of Treaty-based 
obligations  incumbent  upon  the  Commission  in  competition  policy,  consumer  protection, 
standard-setting,  and  the  provision  of  European  statistics.  For  instance,  funding  activities 
linked  to  the  development  of  reporting  standards  by  the  European  Financial  Reporting 
Advisory Group (EFRAG) have been critical for EU law implementation and has contributed 
to the EU influence on global standardisation. For example, the new mandate of EFRAG has 
supported developments  in sustainability reporting. Stakeholders consulted confirmed how 
crucial  it  remains  for  the  EU  to  support  the  development  of  high-quality  standards  and  to 
ensure  that  all  relevant  interest  are  increasingly  represented  in  the  process  at  the  EU  and 
international level75. In addition, the effectiveness of competition in the internal market in turn 
is an essential driver of EU competitiveness76.  

EU level funding is required to enable the Commission to meet certain legal responsibilities 
that  cannot  be  delegated  to  Member  States,  as  well  as  by  adding  economies  of  scale.  The 
benefits for citizens, consumers and businesses could not be replicated by actions at national 

75 Interview feedback from seven representatives of the financial sector and civil society at the EU level. 
76  According  to  the  Draghi  Report  ‘the  evidence  is  overwhelming  that  competition  stimulates  productivity, 
investment and innovation’, whereas competition risks have increased. 

34 

 
 
 
level,  especially  considering  the  cross-border  nature  of  services  (e.g.  coordination  among 
national  authorities,  enforcement  of  EU  law,  common  digital  tools,  services  required  to 
support the development and monitoring of EU law and financial markets, etc.).  

3.3. 

Subsidiarity: Added value of EU action 

Funding with a focus on single market activities is essential to advance EU-wide objectives 
and facilitate the implementation of EU legislation across Member States. It generates an EU 
added value that funding at national level could not achieve alone.  

To continue the support at EU level is essential to improve the functioning of the single 
market  by  enforcing  Union  law,  facilitating  market  access  and  setting  standards.  EU 
action protects and empowers citizens, consumers and businesses. It helps them to adjust to 
the  reforms  and  policy  changes  necessary  for  the  functioning  of  the  single  market  by 
providing information, advice tools and services as well as platforms to enhance co-operation 
between  civil  society  organisations,  businesses,  entrepreneurs  and  industry  bodies.  EU 
coordinated platforms are needed to ensure cooperation among Member State’s authorities 
reducing  fragmentation  and  duplication  of  efforts.  Digital  tools  reduce  administrative 
burdens and create transparency for citizens, consumers and businesses. Portals dedicated to 
single  market  topics  provide  information  or  helps  businesses  or  citizens  and  consumers 
affected by breaches of EU law to obtain out-of-court redress, enabling them to overcome 
barriers.  The  Internal  Market  Information  system  (IMI)77  connects  thousands  of  public 
administrations, facilitates cross-border administrative exchanges between them and solves 
problems. All of these tools are accessible through the EU’s Single Digital Gateway78 and 
create a true benefit of businesses and administrations alike.  

Member  States  and  the  Commission  can  co-invest  to  develop  key  digital  interoperability 
enablers  for  innovative  cross-border  digital  public  services.  The  structured  collaboration 
between  high  level  representatives  from  Member  States  through  the  Interoperable  Europe 
Act79 governance will steer  public  authorities’ digital  transformation and cross-border 
interoperability.  

The  EU  also  has  exclusive  competence  in  respect  of  establishing  of  the  competition  rules 
necessary  for  the  functioning  of  the  internal  market80.  Various  studies  have  shown  the 
macroeconomic impacts of EU competition enforcement to be significant81. Digital tools (for 
case  work,  investigations,  secure  exchange  of  information)  and  studies  are  necessary 

77 Internal Market Information System (IMI) - The EU Single Market - European Commission. 
78 Single digital gateway - European Commission. 
79 Regulation - EU - 2024/903 - EN - EUR-Lex. 
80 Protocol No 27 to both the TEU/TFEU on the Internal Market and Competition states that "the internal market 
as  set  out  in  Article  3  of  the  Treaty  on  European  Union  includes  a  system  ensuring  that  competition  is  not 
distorted". This is reinforced by Article 3(1)(b) TFEU. 
81 Direct customer savings generated by cartel, antitrust and merger enforcement are significant (between EUR 
13.7  billion  and  EUR  23.4  billion  per  annum  over  the  period  2014-2023).  In  addition,  the  Commission’s 
competition policy interventions can lead to a medium to long-term increase in real GDP in the range of 0.6% - 
1.1% (equivalent of an uplift of EUR 80 - 150 billion in 2019 GDP), as well as a 0.3% - 0.7% reduction in the 
price level.   

35 

 
 
 
conditions for effective and efficient enforcement of competition rules and therefore enable 
the macroeconomic impacts to be achieved.  

EU-level  coordination  as  regards  policies  related  to  businesses,  is  by  nature  based  on  a 
cooperation between Member States and the Commission, which could not be triggered on 
the  national  level  alone.  These  instruments  should  continue  to  address  gaps  in  financing, 
stimulate growth, enhance competitiveness across the EU and contribute to harmonising such 
approaches across the Member States. They should also continue to ensure that the interests 
of consumers, including the end users of financial services, are represented at the European 
level so that developments in the single market also respond to their needs. 

The production of standards is crucial in support to aligning standards with EU legislation 
and  ensuring  stakeholder  participation  in  international  standard-setting.  The  interim 
evaluation of the SMP has highlighted that the SMP has also supported the involvement of 
diverse  stakeholders 
in  European  standardisation  processes,  such  as  organisations 
representing SMEs, consumers, workers, and environmental interests, increasing the number 
of European standards and ensured that Europe interests and views had been considered in 
the  international  standard-setting  processes.  Standardisation  activities  allow  to  replace  27 
national standards with a harmonised standard, setting common rules across the single market.  
This harmonisation is crucial, as not all Member States share the same level of interest or are 
equally  affected  by  specific  policy  initiatives  due  to  diverse  geographical,  climate, 
environmental,  industrial,  financial  and  commercial  factors.  EFRAG,  supported  under  the 
SMP,  is  successfully  fulfilling  its  twofold  mandate  by  advising  the  Commission  on  IFRS 
Accounting  Standards  and  supporting  the  development  sustainability  reporting  82.  EU 
financing incentivises establishing standard technical and reporting rules in areas that could 
be difficult to be prioritised nationally, thereby ensuring a cohesive approach across the entire 
EU. 

Activities  in  market  surveillance  are  instrumental  in  meeting  the  objectives  of  the  single 
market Surveillance Regulation and the related legal requirements83. They aim to improve the 
cooperation  between  Member  States,  harmonisation  of  ways  of  working  and  e-commerce 
surveillance.  Market  surveillance  activities  avoid  that  the  less  resourceful  Member  States 
would become the weak links of the single market, via which all kind of dangerous product 
could enter the single market and circulate freely. This would threaten the competitiveness of 
EU businesses, but also consumer safety. Market surveillance includes financing joint testing 
of products  and  facilitates cross-border collaboration and sharing of expertise.  EU Testing 
Facilities for products are an example of initiatives that demonstrates how EU-wide approach 
minimises duplication and creates economies of scale.  

The European Consumer Centres (ECC) Network and Alternative Dispute Resolution (ADR) 
mechanisms activities provide significant EU-added value by ensuring consumers across the 
EU  have  access  to  fair,  effective,  and  cross-border  dispute  resolution.  They  contribute  to 
reducing legal costs, strengthening enforcement, and enhancing consumer confidence in the 
single  market.  The  ECC  Network  has  proven  highly  effective  in  mediating  cross-border 

82  European  Sustainability  Reporting  Standards  -  European  Commission.  These  are  the  standards  to  use  for 
companies subject to the Corporate Sustainability Reporting Directive (CSRD). 
83  Specific  Regulations  mandate  the  Commission  to  recognise  accreditation  bodies  and  support  networks 
(EUPCN, AdCos). 

36 

 
 
 
disputes. ECCs helped consumers to recover over EUR 8.8 million in 2023 (EUR 9.9 million 
in 2022) and resolve more than 120 000 inquiries per year84.  

European trans-European services and platforms enable cross-border data sharing and 
collaboration  between  national  authorities,  businesses,  and  consumers,  delivering 
benefits  that  individual  Member  States  may  have  neither  the  incentive  nor  capacity  to 
establish independently. 
A coordinated response at the EU level avoids the risk of overlapping efforts, which would 
occur if Member States would independently provide information and advisory services to 
businesses and consumers on the single market. 

4.  OBJECTIVES: WHAT IS TO BE ACHIEVED? 

4.1.  General objectives 

The general objective of the present initiative is to enhance and deepen the well-functioning 
of the single market and a strong Customs Union, to protect the financial and economic 
interests  of  the  EU  and  its  Member  States,  with  a  design  fostering  flexibility, 
simplification and synergies. 

4.2. 

Specific objectives 

The following specific objectives have been designed to achieve the general objective: 
With regards to the design: 

- 

- 

- 

to  enable  more  flexibility,  to  guarantee  the  programme’s  and  the  related  budget’s 
ability to respond to a changing reality while fully respecting the certainty needed for 
legal  commitments  established  by  EU  law,  and  to  enable  improved  allocation  of 
resources  to  meet  varying  demands/needs  across  policy  areas  and  to  increase 
efficiencies for beneficiaries. 
to foster simplification for access to and implementing EU funding and programme 
management,  which  reduces  administrative  burden 
through  simplified  and 
harmonised procedures.  
to  enhance  synergies  between  policy  areas  and  to  reinforce  joint  activities  such  as 
framework contracts, collaborative activities and digital projects. 

With regards to the policy intervention areas: 

-  To  empower  citizens,  consumers,  economic  operators  and  businesses  with 
information  and  advice  enabling  them  to  make  informed  decisions  and  access  the 
opportunities  of  the  single  market  for  goods  and  services;  to  improve  the 
understanding of the single market and its challenges by supporting data collection 
activities, analyses and tools; to provide relevant and comparable official European 
statistics.  

-  To  foster  cooperation  and  integration  between  national  administrations,  Member 
States  and  between  Member  States  and  the  Commission;  to  boost  the  operational, 
technical and administrative capacities of national administrations;  

-  To 

improve  evidence-based  and  digital-ready  policymaking,  and  digital 

implementation tools; 

84 ECC-Net Annual Reports. 

37 

 
 
 
 
-  To facilitate harmonised standard-setting and reinforce the development  of EU and 
international  standards;  to  ensure  the  effective  enforcement  of  EU  law,  including 
competition policy, company law, and harmonised rulemaking, support the design, the 
implementation  and  the  uniform  interpretation;  to  ensure  the  well-functioning  and 
participative role of representative organisations; 

-  To support the Customs Union and customs authorities working together and acting 

as one; to ensure effective market surveillance and consumer protection; 

-  To protect the Union’s and its Member States’ economic and financial interest from 
fraud; including expenditure and tax fraud, tax evasion and tax avoidance, corruption 
and other illegal activities; and to improve tax collection as well as to improve the 
Union taxation systems.  

4.3.  Problem tree 

The  objective  to  ensure  funding  in  a  complex  funding  landscape  while  fostering  more 
flexibility, simplification and synergies, is assessed in the policy areas in which the problem 
drivers have been identified. It is essential that the Programme’s structure enables enhancing 
the flexibility, simplification, and synergies,  in  line with  the priorities of the Commission. 
Bringing predecessor Programmes and budget  lines together constitutes the opportunity  to 
streamline procedures, increase commonalities, adopt an appropriate governance model, and 
use agency(ies)/authority(ies) to support the implementation,  

The  programme  should  further  improve  the  functioning  of  the  single  market,  protect  and 
empower citizens, consumers and businesses by enforcing Union law (incl. Competition law), 
facilitating  market  access,  setting  standards  whilst  pursing  the  twin  transition,  green  and 
digital, and ensuring a high level of consumer protection, as well as by enhancing cooperation 
between the competent authorities of Member States and between the competent authorities 
of  Member  States  and  the  Commission  and  the decentralised  Union  agencies.  It  allows  to 
develop,  produce  and  disseminate  high-quality,  comparable,  timely  and  reliable  European 
statistics which underpin the design, monitoring and evaluation of all Union policies and help 
citizens,  policymakers,  authorities,  businesses,  academia  and  the  media  to  make  informed 
decisions and to actively participate in the democratic process. 

-  by  addressing  knowledge  and  data  gaps  and  other  barriers  that  are  obstacles  for 
citizens, consumers, businesses and economic operators to access and operate within 
the single market,  

This  targets  the  need  for  citizens,  consumers,  economic  operators,  businesses,  and  public 
administrations to have access to and receive information and advice about the single market 
and their rights and obligations in light of the digitalisation needs. It also relates to the need 
to provide support to remove barriers, including digital, within the single market. It is also 
essential to continue developing, producing and disseminating independent, high-quality and 
comparable official European statistics.  

-  by  reinforcing  capacity  building,  administrative  and  operational  cooperation  and 
integration  among  Member  States  and  between  Member  States  and  the  European 
Commission,  

This addresses the need for reinforced cooperation and integration to ensure digitally enabled, 
seamless implementation, consistent and effective enforcement across the EU and to prevent 
barriers  and  limitations  hindering  the  proper  functioning  of  the  single  market,  such  as  a 

38 

 
 
fragmented  interoperability  landscape,  tax,  the  savings  and  investments  union,  and  other 
policies, and the Customs Union.  

-  by improving the rulemaking, standard setting, and enforcement of Union law at EU 

level that may not be able to adapt to a changing environment. 

This aims to ensure that EU authorities and bodies maintain effective rulemaking, including 
a consistent digital-ready policymaking approach, standard-setting, as well as enforcement in 
the face of changing circumstances and to ensure enforcement of restrictive measures in the 
management of EU funds. 

5.  WHAT ARE THE AVAILABLE POLICY OPTIONS? 

Each of the two policy options proposes a different design for the programme. However, the 
content of policies in the scope is common for both options.  

5.1.  What  is  the  baseline  from  which  options  are 

assessed? 

The baseline is represented by the current MFF landscape and the coverage of the MFF 2021-
2027  policy  needs.  The  MFF  2021-2027  architecture  addresses  the  single  market  under 
Heading 1 and gathers four programmes in this domain: the Single Market Programme (SMP), 
the  Customs  programme  (cooperation  in  the  field  of  customs),  the  Fiscalis  programme 
(cooperation in the field of taxation) and the EU Anti-Fraud Programme (EUAFP). The SMP 
brings together several predecessor budget lines and six predecessor programmes from the 
previous programming period (2014-2020). This baseline landscape indirectly also includes 
the Customs Control  Equipment  Instrument under Heading  4 and as part of the Integrated 
Border Management Fund.  

39 

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
 
 
As  such,  the  single  market,  customs,  taxation,  and  anti-fraud  policies  are  divided  across 
various  separate  EU  funding  programmes  and  instruments  with  their  own  individual 
legislation,  budget,  and  implementation  modalities,  as  well  as  operational  set-up  and 
rulebooks.  While  enhanced  focus  is  paid  to  coordination  among  the  programmes  to  foster 
improved horizontal consistency, synergies and complementarity across funds, expectations 
on  true  gains  from  these  efforts,  hindered  by  institutional  and  administrative  procedures, 
remain limited.  

The analysis of the baseline shows that although the current setup successfully functions with 
separate  programmes,  it  also  projects  the  need  to  improve  on  the  overall  coherence  and 
flexibility between the programmes in the single market domain.  

The  fragmented  programme  structure  with  varying  rules  and  governance  potentially 
hinders  a  unified  direction  across  the  funding  instruments,  with  the  risk  of  duplication  of 
efforts and missed opportunities to address and eliminate inefficiencies present. This is due 
to lower intensity coordination between the separately managed programmes and instruments, 
which may be working towards similar objectives and similar activities. The complexity of 
the  funding  landscape,  with  often  overlapping  objectives  and  eligible  actions  also  create 
confusion for the beneficiaries, putting at risk the optimal use of the funding opportunities. 

In the baseline, the administrative burden linked with different administrative requirements 
of different actions is limited since activities target specific policy domains and stakeholder 
groups, and most beneficiaries apply for one activity only. 

The baseline holds minimal compliance, enforcement or direct costs. Participation in, use of, 
or  engagement  with  SMP  activities  is  entirely  voluntary  or/and  in  the  case  of  national 
authorities, part of their normal responsibilities (business-as-usual). The same is true for the 
Customs, Fiscalis and Union Anti-Fraud programmes grant activities. Any possible indirect 
costs relate to difficulties of accessing fragmented services provided across different policy 
areas.  National authorities may have indirect administrative burden associated with applying 
for and receiving EU funds, as well as their implementation. 

Considering  that  the  role  of  the  concerned  programmes  is  mainly  to  support  the  related 
policies and Union law, they can generate impact only to the extent to which the wider policy 
ambition does so and proportionately to the extent to which the programmes are engaged.  

The baseline landscape provides more predictability but modest flexibility in the allocation 
of funding over the seven years of the programming period. Transfers between budget lines 
would not require budgetary authority agreement within the SMP, yet these transfers are likely 
to remain modest in size, and transfers between the different constitutive programmes would 
continue  to  require  budgetary  authority  agreement.  Driven  primarily  by  the  Commission 
corporate rules, further simplifications in programme management and administrations, as 
well as in the monitoring and reporting are very limited.  

As indicated above, the baseline is not designed to foster cross-policy synergies. Having four 
separate programmes means that the activities financed by each of the programmes and pillars 
(within  the  SMP)  are  mostly  implemented  separately  and  with  limited  regard  to  activities 
financed  by  other  programmes  and  pillars.  Joint  activities  covering  multiple  pillars  or 
programmes, for example in terms of training courses covering more than one policy area, 

40 

 
 
joint procurement actions, common purchases of databases, joint studies, Eurobarometer and 
joint framework contracts or common IT projects, are rare. 

At  the  same  time,  while  the  clearly  defined  and  policy  targeted  separate  programmes  and 
pillars  create  fragmented programme landscape, it  also  allows more and targeted visibility 
(addressed towards the narrower target groups) for the individual programmes. However, it 
also  includes  the  main  risk  to  miss  opportunities  and  exploit  potential  synergies  between 
policy areas or respond flexibly to changing circumstances. 

In conclusion, the baseline falls short of the level of ambition identified for the Commission 
Communication on ‘The road to the next Multiannual Financial Framework’, which seeks to 
promote greater coherence, flexibility and responsiveness in the EU’s financial framework.  

5.2.  Description of the policy options 

Since  the  baseline  sets  the  continuation  of  activities  financed  by  the  MFF  2021-2027,  the 
identified  two  policy  options  focus  on  maximising  the  effectiveness  and  efficiency  of  the 
funding structure to foster improved horizontal consistency and complementarity and achieve 
more flexibilities and synergies. They are built around different level of ambitions concerning 
the integration of the current funding instruments and are described primarily in comparison 
to the baseline.  

To be noted that compared to the baseline, the two options described below would witness 
the  integration  of  the  Customs  Control  Equipment  Instrument  (CCEI)  type  interventions 
within the future Customs programme, instead of a dedicated separate instrument.  

In addition, compared to the baseline, both options would witness a proportionate expansion 
due to the legal commitments of the Commission regarding the Customs Union Reform. In 
that  sense,  the  two  options  as  well  as  the  continuity  of  the  baseline  include  the  bridging 
between  the  current  Customs  programme  and  the  fully-fledged  EU  Customs  Authority, 
including the financing of the legacy digital environment, and a reduced coverage for customs 
control equipment (CCEI type interventions). 

At the same time, the policy scope covered under the two scenarios excludes the SME pillar 
as well as the “food and feed” pillar activities of the current SMP.  

5.2.1.  Option 1: Integrated scenario 

With the enhanced harmonisation of legal provisions, this scenario establishes a single, more 
streamlined  flexible  framework  but  still  maintains  a  clear  division  between  existing 
programme  domains:  Single  Market  Programme,  Customs  Programme,  Fiscalis 
Programme and Union Anti-Fraud Programme.  This scenario would mean for the Single 
Market Programme to replicate the current pillar-based approach but would also incorporate 
the new strands (customs, taxation and anti-fraud) as new pillars.  

In  that  sense,  the  integrated  scenario  creates  a  horizontal  structure  grouping  all  existing 
administrative support and budget lines in one scope with the intention to promote flexibility, 
simplification  and  more  synergies.  This  scenario  preserves  existing  policy  objectives  and 
governance models, to avoid disruptions and to ensure continuity. 

41 

 
 
The horizontal structure brings together diverse and complex activities and due to the cross-
thematic  nature,  its  coordination  and  governance  must  consider  the  specific  interests  of 
stakeholders and programmes involved.  

5.2.2.  Option 2: Unified scenario 

This scenario means a complete merger of all policy priorities under the scope delivered 
under a single common basic act with one set of legal and institutional requirements for 
all activities.  

This  scenario  aims  for  enhanced  operational  and  administrative  synergies,  stronger 
cooperation between public administrations for  enhanced interoperability across the single 
market,  increased  efficiency  and  flexibility,  reducing  the  administrative  burden  through 
simplified programme/EU funding procedures and improved digital-ready policymaking.  

This approach aims to address, in an agile manner, complex and emerging challenges. It also 
targets further reducing administrative burdens on national administrations and stakeholders 
by simplifying and streamlining programme procedures and making them faster as well as 
utilising modern technologies and digital solutions in EU programme management.  

Such simplification is intended to promote EU policies and programmes, increasing visibility 
and  recognition  among  stakeholders,  while  fostering  their  involvement  and  ensure  the 
relevance of the programme. 

6.  WHAT ARE THE IMPACTS OF THE POLICY OPTIONS? 

The ongoing implementation of the current financial framework provides some lessons on 
how to increase the EU budget’s agility and better align it with our priorities and objectives. 
Flexibility  is  key  in  guaranteeing  the  budget’s  ability  to  respond  to  a  changing  reality. 
Evolving needs and crises since 2021 have been addressed by repurposing and reallocating 
existing  funds,  in  sometimes  lengthy  procedures,  as  well  as  creating  new  ad  hoc  funds, 
programmes, or measures, further compounding the issue of scattering of EU funding. Greater 
focus and simplification are needed from the start to maximise the impact of EU funding, at 
a time of reflection on the future financial framework. 

Moreover,  experience  has  demonstrated 
that  reallocating  funds  between  different 
programmes, especially across headings, within the seven-year MFF period is challenging, 
particularly when quick reaction to unforeseen circumstances, such as emerging policy needs 
or crisis  arise. As a result,  it is essential to provide sufficient budgetary and programming 
flexibility to address emerging policy priorities or respond effectively to unexpected events.  

6.1. 

Integrated scenario  

The integrated scenario is constituted by consolidating parts of the Single Market Programme, 
the Customs (and Customs Control Equipment Instrument), the Fiscalis, and the Union Anti-
Fraud  Programmes.  The  experience  of  the  Single  Market  Programme,  which  follows  the 
format of an integrated scenario, has revealed that there are definite challenges and limits that 
cannot be ignored in such scenario. The Customs, the Fiscalis and the Anti-fraud Programmes 
indirectly assessed the advantages and the potential downsides of their stand-alone nature. 

Based  primarily  on  the  SMP  experience  and  the  findings  of  the  programme’s  interim 

42 

 
 
evaluation,  the  integrated  scenario  overall  programme  design  would  address  the  limited 
flexibility  identified  for  the  baseline  and  would  drive  towards  simplifications  and  more 
synergies.  

The main direct benefits will accrue to public authorities, including competent authorities at 
national  level  and  the  European  Commission.  This  benefit  will  largely  relate  to  better 
policymaking and law enforcement. Citizens, consumers and businesses will gain much less 
direct benefit as described below. 

The integrated scenario would offer the direct and indirect benefits for national authorities 
identified in the baseline. These materialise as an increased capacity, skills and knowledge, 
better access to facilities, expertise, increased digitalisation of public administration and law 
enforcement, enhanced co-operation with other authorities, secure and effective exchange of 
confidential  information  with  the  Commission  and  a  reduced  burden  (e.g.  better  case 
management; easier and more secure transfer of documents and exchange of information). 
Indirect benefits are seen with regards to a better implementation and enforcement of Union 
law,  a  reduced  cost  of  implementation  and  enforcement  of  Union  law,  increased  tax  and 
customs revenues and a reduction in tax fraud, evasion and avoidance. 

The integrated scenario in addition would ensure that more/better activities are implemented 
to  support  national  authorities  (to  build  capacity,  enhance  co-operation,  etc.)  thanks  to 
synergies,  flexibilities  and  simplfications  in  programme  design  and  participation  in  grant-
funded  projects  made  easier  and  more  effective  with  streamlined  conditions  (single  set  of 
requirements, Common Rulebook, etc.). 

The integrated scenario would offer the direct and indirect benefits for Commission services 
identified in the baseline. Direct benefits are increased capacity, skills and knowledge, better 
access  to  facilities,  expertise,  increased  digitalisation  of  public  administration  and  law 
enforcement as well as enhanced co-operation with other authorities. Another direct benefit 
would be the secure and effective exchange of confidential information with third parties, a 
reduced burden (e.g. better case management; easier and more secure transfer of documents 
and  exchange  of  information).  Indirectly  the  European  Commission  benefits  from  a  better 
implementation  and  enforcement  of  Union  law,  a  reduced  cost  of  implementation  and 
enforcement  of  Union  law,  increased  tax  and  customs  revenues,  a  reduction  in  tax  fraud, 
evasion and avoidance. 

The integrated scenario would offer the same type of benefits (such as resource savings) for 
Commission  services  except  where  more/better  activities  to  support  the  Commission’s 
policymaking and law enforcement role are implemented due to synergies, flexibilities and 
simplifications in programme design (e.g. joint procurement) and programme management is 
less burdensome  (harmonised, legal  provisions, common reporting templates, single set  of 
requirements, common rulebook, etc.). 

Costs would not be different from those identified in the baseline in case of the integrated 
scenario  for  citizens,  consumers,  businesses,  except  for  a  possible  reduction  in  hassle  in 
accessing services to the extent that services are less fragmented across policy areas, however 
also a possible increase in hassle, depending on need to adapt to different forms of service 
provision.  Applicants  and  beneficiaries  would  incur  an  administrative  burden  associated 
with EU grant funding, varying by pillar and action. Refinements could be intended to reduce 
the administrative burden on applicants and beneficiaries. A common rulebook may reduce 
costs, if not adopted the administrative burden for applicants and beneficiaries would remain 
similar to the one incurred under the baseline. For national authorities the same costs apply 
compared to the baseline situation, noting that for the integrated scenario administrative costs 

43 

 
 
may be reduced due to a single set of requirements and a common rulebook. 

Costs  incurred  by  national  authorities  would  be  similar  if  not  identical  to  those  incurred 
under the baseline.  

On the level of the Commission services, the direct cost for implementing the programme is 
fixed with a maximum ceiling of 5% of SMP programme budget, 2% of UAFP programme 
budget whereas the Customs and Fiscalis programmes do not include such defined ceiling.  

Indirect  costs  could  decrease  to  the  extent  that  services  are  less  fragmented  across  policy 
areas. However, administrative burden may increase depending on need to adapt to different 
forms of service provision. 

The integrated scenario would be beneficial with regards to programme management  and 
implementation of activities that could be materialized through likely, yet limited, budgetary 
flexibility, depending on the level of increased administrative burden due to a new layer of 
programme-level coordination and adaptation costs. 

Under  the  integrated  scenario,  synergies,  flexibilities  and  simplifications  in  programme 
design result in better services and enhanced higher-level effects for citizens, consumers and 
business (e.g. product safety, standards, green transition, enforcement of competition rules, 
etc.). 

The integrated scenario would offer some flexibilities in terms of increased possibilities to 
reallocate  budget  provisions.  This  would  be  potentially  related  to  the  fields  of  taxation, 
customs  and  anti-fraud,  where  the  merging  of  the  three  separate  programmes  into  the 
integrated  programme  would  create  new  possibilities  to  transfer  budget  without  budgetary 
authority agreement. However, budgetary transfers will most likely take place between budget 
lines managed by the same Commission service.  

Any simplifications in programme management and administration possible in the baseline 
are also possible under this scenario. Some additional simplifications would be possible, e.g. 
a single legal basis for the four previously separate programmes. Support from stakeholders 
having responded to the public consultation was given to “reducing the number of EU funding 
programmes” to potentially help the EU budget become more effective and efficient (46%, 
307  out  of  665).  However,  considering  the  variety  of  programmes’  beneficiaries  / 
stakeholders, it is likely that multiple committees covering different policy areas and multiple 
work programmes covering different policy areas will continue to be needed.   

There  may  be  possibilities  for  additional  synergies.  These  might  arise  primarily  in  policy 
fields  managed  by  DG  TAXUD  through  the  incorporation  of  the  Customs  Programme, 
Fiscalis Programme and relevant budget lines from the SMP into a single programme. In these 
fields, the creation of a single integrated programme might lead to training courses covering 
more than one policy area, joint procurement actions, common purchases of databases, joint 
studies, Eurobarometer and joint framework contracts or common IT projects. Beyond this, it 
is not certain that joint working between different DGs and across policy areas will be any 
greater than at present. 

The integrated scenario, compared with the baseline is likely to create additional complexities 
in  programme  management.  It  is  based  on  the  assumption  that  the  implementation  would 
engage more pillars and related Commission services. A mitigation of this risk could occur 
through  additional  programme-level  coordination  between  pillars,  or  through  helping 
beneficiaries and applicants to cover additional set-up costs in programme management. 

44 

 
 
flexibility 

(in  particular, 

The  interim  evaluation  of  the  SMP  has  demonstrated  some  positive  results  in  terms  of 
efficiency  and 
the  programme’s  budgetary 
implementation, administrative synergy and visibility (i.e. publicity about the programme). 
However,  it  has  also  been  shown  that  policy  synergies  and  flexibility  remain  the  main 
challenges, partly related to the variety of actions and activities performed, the range of co-
financing mechanisms and stakeholders covered. Although driven by a rationale highlighting 
benefits  of  combining  previous  programmes  and  budget  lines,  challenges  and  substantial 
shortcomings are to be considered while assessing this integrated policy option.  

regarding 

Findings from the interim evaluation of the SMP can serve as a basis to inform the potential 
impacts a wider integrated scenario would demonstrate. 

•  Consolidating budget lines under a single budgetary heading is intended to facilitate 
the  transfer  of  funds  between  lines,  to  improve  resource  allocation  efficiency,  and 
allow a more efficient spending of resources. This approach enables better adjustment 
to  unforeseen  needs  in  certain  budget  line.  Some  budget  lines  might  be  able  to 
anticipate unexpected additional budget needs, whereas others might have difficulties 
in consuming the whole allocated budget. 

•  Transferring budget appropriations between different policy objectives, for instance 
with the flexibility clause, can simplify and enhance the process of transferring funds 
between previously  separate programmes. Budgetary flexibility  deriving  from  such 
integration allows a degree of adaptive capacity and enables improved allocation of 
resources to meet varying demands/needs across policy areas. However, amounts of 
budgetary transfers  might  be limited, indicating the potential for flexibility has not 
been fully exploited.  

•  Merging  multiple  budget  lines  streamline  procedures  and  reduce  administrative 
complexity in view of simplifying programme management. This includes minimising 
duplications  in  costs  and  procedures  and  enabling  more  predictable  financing  for 
actions  benefiting  multiple  objectives.  Such  programme  design  features  internal 
governance opportunities such as overarching coordination mechanisms and overall 
savings in the time and efforts invested in programme management. 

•  Establishing  a  single  programme  rather  than  multiple  programmes  reduces 
duplications of costs and efforts in acquiring products and services, such as access to 
datasets,  studies,  Eurobarometer  surveys,  and  communication  campaigns,  which 
could be managed through joint actions or framework contracts. This approach could 
contribute  to  foster  synergies,  thereby  resulting  in  greater  efficiency  through  joint 
initiatives, and reduced duplications in efforts and procurement. 

However, in the light of the lessons learned from the interim evaluation of the SMP being an 
integrated programme and more than three decades of implementation  experience with the 
self-standing Customs and Fiscalis programmes the following must be noted. 

With the challenge of the diversity of policy areas, limited synergies may be materialised, 
possibly due to the underlying absence of a dedicated budget for joint activities in addition to 
“specific” budget lines.  

45 

 
 
Nevertheless, the consolidation of the Single Market Programme (except the SME, and food 
and feed pillars) with the Customs programme (including the component on customs control 
equipment), Fiscalis programme and Union Anti-Fraud Programme may result in an overall 
improved exploitation of the potential offered by an integrated scenario. 

In light of the above, possible challenges may arise. The table below provides an overview of 
the  challenges  which  may  arise  under  the  integrated  scenario  and  possible  mitigation 
measures to address these.  

Risk 

Possible mitigation measures 

the 

extent 

burden 

in 
Greater 
programme  management 
that 
to 
programme-
additional 
co-ordination 
level 
between 
is 
required 

the  pillars 

Adjustment/adaptation 
costs 
implementation bodies 

for 

programme 

The  role  and  remit  of  programme-level  co-ordination  will 
need  to  be  specified  very  clearly.  As  far  as  possible, 
responsibility for managing pillars will be delegated to the 
responsible  DGs,  so  that  only  essential  management 
functions are undertaken at programme level. 

The budget for programme management may be used in the 
early years of the programme to provide support to cover set-
up  costs  of  the  programme  to  cover  set-up  costs,  e.g. 
training,  purchase  or 
additional  staff  resource,  staff 
enhancement  of  IT  tools  and  programme  management 
systems, procurement of expertise. 

Long  list  of  standardised 
indicators  and  risk  of 
aggregated 
indicators 
being misleading 

Develop  a  credible  list  of  indicators  that  provides  a  fair 
reflection  of  the  intended  and  achieved  effects  of  the 
programme; and ii) achieve agreement amongst the relevant 
DGs. 

A clear distinction would be required between indicators that 
are specific to pillars or generic to the whole programme – 
with  the  latter  being  relatively  few  in  number  in  order  to 
make programme-level reporting meaningful. 

6.2.  Unified scenario 

By addressing challenges and barriers with a unified approach, a programme covering various 
single market areas would further unlock the potential and strengthen the Single Market and 
thereby  enhance  Europe’s  competitiveness  and  economic  security  while  deepening  the 
Customs Union.   

The  costs  for  applicants,  beneficiaries,  and  national  authorities,  is  similar  to  the  costs 
under the integrated scenario. Costs would not be different in case of the unified scenario for 
citizens, consumers, businesses, except for a possible burden reduction in accessing services 
to the extent that services are less fragmented across policy areas. A majority of respondents 
to the public consultation (90%, 588 out of 654) emphasised that that “simplifying access to 

46 

 
 
 
and  information  about  funding  for  beneficiaries”  could  help  the  EU  budget  become  more 
effective and efficient. A unified scenario could promote a more strategic and targeted use of 
resources  and  further  reduce  administrative  burdens  on  national  administrations  and 
beneficiaries,  applicants  to  grants.  As  under  the  integrated  scenario,  the  introduction  of  a 
common  rulebook  for  calls  for  proposals  across  the  programme  might  reduce  the 
administrative burden for applicants and beneficiaries. A majority of respondents to the public 
consultation (71%, 474 out of 668) said that “applying common rules, timelines and eligibility 
criteria  to  all  relevant  EU  funds”  could  help  the  EU  budget  become  more  effective  and 
efficient. The level of administrative burden will reflect the detailed design of specific actions 
or calls rather than the overall programme structure. 

The unified scenario can reduce some parts of programme management and implementation 
costs (less programme-level committees), as well as administrative costs due to a single set 
of requirements and a Common Rulebook and lower administrative burden associated with 
applying for and receiving EU funds due to horizontal activities. A majority of stakeholders 
expressed  during  the  public  consultation  support  to  the  introduction  of  fewer,  clearer,  and 
simpler  rules  (89%,  599  out  of  667).  There  may  also  be  some  significant  reduction  in 
programme  management  and  administration  costs  to  the  extent  that  duplication  across 
previously  separate  programmes  is  reduced,  for  example,  in  terms  of  costs  related  to 
monitoring, evaluation, audit, reporting, supervision of executive agencies.  

On the level of the Commission services, the direct cost for implementing the programme is 
fixed with a maximum ceiling of 5% of SMP programme budget, 2% of UAFP programme 
budget whereas the Customs and Fiscalis programmes do not include such defined ceiling.  

Indirect  costs  could  decrease  to  the  extent  that  services  are  less  fragmented  across  policy 
areas. However, administrative burden may increase depending on need to adapt to different 
forms of service provision. 

On the other hand, this scenario significantly increases the scope of potential benefits.  At the 
same time, due to the diversity of activities under the scope it may be difficult to establish a 
streamlined  governance  model  that  meets  all  necessary  requirements  and  delivers 
simplification. It must be noted that where activities are a continuation of existing activities, 
most  benefits  offered  by  the  unified  scenario  would  be  the  same  as  under  the  integrated 
scenario and the baseline. As noted for the integrated scenario in 6.1, the main direct benefits 
will  accrue  to  public  authorities,  including  competent  authorities  at  national  level  and  the 
European  Commission.  This  benefit  will  largely  relate  to  better  policymaking  and  law 
enforcement. Citizens, consumers and businesses will gain much less direct benefit. 

The unified scenario would offer the direct and indirect benefits for  national authorities 
identified in the baseline. It would also include the same benefits as the integrated scenario 
with  regards  to  ensuring  that  more/better  activities  are  implemented  to  support  national 
authorities (to build capacity, enhance co-operation, etc.) thanks to synergies, flexibilities and 
simplification in programme design and participation in grant-funded projects made easier 
and  more  effective  with  streamlined  conditions  (single  set  of  requirements,  Common 
Rulebook, etc.). 

The unified scenario would offer the direct and indirect benefits for Commission services 
identified in the baseline. It would also include the same benefits as the integrated scenario 
where more/better activities to support the Commission’s policymaking and law enforcement 
role are implemented due to synergies, flexibilities and simplifications in programme design 
(e.g.,  joint  procurement)  but  with  more  potential  to  reduce  administrative  burden  in  

47 

 
 
programme management (harmonised, legal provisions, common reporting templates, single 
set of requirements, common rulebook, etc.). 

The  unified  scenario  would  offer  new  opportunities  to  offer  horizontal  activities  cutting 
across  multiple  policy  areas  to  be  implemented  to  support  national  authorities  and  the 
Commission’s  policymaking  and  law  enforcement  role  however  do  not  exclude  a  risk  of 
reduced benefit, depending on adjustment costs/time, a disruption to the implementation of 
long-established and essential activities, a low take-up or use of horizontal activities, and a 
weak relevance or inflexibility thereof as well as a duplication/confusion between horizontal 
and policy-specific activities. 

Under the unified scenario, synergies, flexibilities and simplifications in programme design 
would result in better services and enhanced higher-level effects for citizens, consumers and 
business (e.g. product safety, standards, green transition, enforcement of competition rules, 
etc.). Additional benefits deriving from the unified scenario might arise in terms of horizontal 
and  cross-policy  areas  and  topics.  The  unified  scenario  includes  horizontal  activities  that 
would not take place or not at the same level or as effectively under the other scenario nor the 
baseline situation. At the same time, policy specific existing legal commitments must take 
priority.  

Considering the unified nature of the scenario, bringing in one envelope all concerned policy 
areas,  objectives  and  expected  results  and  impacts,  the  programme  architecture  and 
implementation modalities under the unified scenario must ensure budget security for legal 
obligations as well as flexibility and adaptability to emerging needs and shifting priorities.  

Special attention is required on the central IT systems and solutions and the central Union 
digital environment for customs and taxation policies rooting in legislative commitments of 
the  Union,  such  as  the  EU  Customs  Reform  the  EU  Customs  Authority  and  the  related 
Customs Data Hub, as well as the functioning of the legacy IT systems and the platforms and 
systems required for taxation policies and emerging priorities (including possible data hub). 
On broader terms, similar attention must be given to single market digital solutions and legal 
commitments.  Similar considerations are valid for several other policy areas (e.g. statistics, 
anti-fraud). 

Overall, this option has the potential to increase efficiency, flexibility, synergies and visibility, 
but requires careful consideration of potential risks and complexities. Such new structure may 
limit  conditionalities  that  address  sector-specific  realities  or  create  a  perception  for 
stakeholders that the importance of their specific policy area is diminished. The simplification 
of  a  unified  scenario  should  help  to  promote  EU  policies  and  programmes,  increasing 
visibility and recognition among stakeholders, while fostering their involvement and ensure 
the relevance of the programme. Under this scenario, as in all other scenarios, the legal and 
governance requirements ensuring the development, production and dissemination of official 
European statistics would be respected.   

Potential  reduction  under  the  unified  scenario  in  administrative  burden  similar  to  the  one 
anticipated under the integrated scenario could be seen in the unified scenario through: 

-  simplifications, e.g. a single legislative proposal, one system for monitoring, reporting, 

evaluation and audit 

-  additional possibilities for budgetary flexibility (greater than the integrated scenarios) 
-  synergies, e.g. joint procurement, joint framework contracts. 

48 

 
 
This scenario might offer greater flexibilities in terms of increased possibilities to respond to 
changing circumstances or needs. Depending on the programme design, this would include a 
single  budgetary  envelope  (rather  than  separate  envelopes  for  four  programmes)  offering 
greater flexibility to transfer budget appropriations between different policy areas. A majority 
of  stakeholders  responding  to  the  public  consultation  indicated  that  “Introducing  more 
flexibility into resource allocation to react to crises and emerging needs” could help the EU 
budget become more effective and efficient (74%, 482 out of 652). 

Some simplifications in programme management and administration would also be possible, 
to the extent that they do not depend on the programme structure or additional simplifications 
such  as  an  easier  set-up  of  new  national  co-operation  mechanisms,  more  clarity  for 
beneficiaries, single streamlined procedures for audits, evaluation, less time/cost to develop 
basic acts and working documents through the use of common templates etc. 

The unified scenario may offer more potential for synergies than the integrated and baseline 
scenario, particularly with horizontal activities, and in relation to practical implementation. 
However,  the  potential  for  policy  synergies  may  be  limited  due  to  the  different  focus 
of/differences between the policy areas. 

However, additional costs might be incurred (compared with the other scenarios) in setting 
up new programme governance and management arrangements in the initial phase. A risk of 
increased  administrative  burden  would  exist,  depending  on  adjustment/adaptation  costs  to 
new programme design, governance and its activities. A burden could be noted related to new 
programme-level  coordination  and  management  of  horizontal  activities  but  also  due  to 
rigidities from a single legal basis, single set of programme implementation arrangements, 
etc. Considering the variety of stakeholders and beneficiaries involved, this scenario might 
risk incurring additional coordination costs at programme management level (compared with 
the more siloed approach under the integrated scenario), depending on the governance and 
management arrangements put in place. 

In light of the above, possible challenges may arise. The table below provides an overview of 
the challenges which may arise under the unified scenario and possible mitigation measures 
to address these.  

Risk 
Adjustment/adaptation 
costs  for  implementing 
bodies,  applicants  and 
beneficiaries 

to 

Disruption 
the 
implementation  of  long-
established and essential 
activities 

Possible mitigation measures 
The budget for programme management may be used in the 
early years of the programme to provide support to cover set-
up costs, e.g. additional staff resource, staff training, purchase 
or  enhancement  of  IT  tools  and  programme  management 
systems, procurement of expertise. 
The  Commission  and  Executive  Agencies  may  publish 
additional guidance, operate webinars and offer other support 
in  the  first  year(s)  of  the  programme,  as  appropriate  to  the 
needs  of  each  type  of  beneficiary  or  strand  within  the 
programme. 
The  new  programme  would  ensure 
the  continuation, 
enhancement  and  further  development  of  core  activities 
essential to the fulfilment of the Commission’s Treaty-based 
responsibilities. 
In  the  event  of  delay  to  adoption  of  the  Programme,  the 
Commission would ensure that essential activities continue to 
receive  funding  in  the  short-term  by  making  use  of 
mechanisms allowed by the Financial Regulation. 

49 

 
 
Low  take-up  or  use  of 
activities, 
horizontal 
joint 
framework 
contracts or joint actions 

Weak 
relevance 
horizontal activities 

of 

of 

Inflexibility 
horizontal activities 
Duplication/confusion, 
e.g. 
pillar-
between 
specific  activities  and 
horizontal activities 
Additional  burden  and 
transaction costs related 
programme-level 
to 
and 
coordination 
management 
of 
horizontal strands 

Inflexibilities  as  a  result 
of rigid rules or funding 
being 
not 
rates 
appropriate to all policy 
areas 
Longer  time  to  develop 
the 
adopt 
and 
programme regulation 

Horizonal activities may be designed, overseen and monitored 
by a steering group comprising all relevant DGs. The steering 
group would look to design horizontal activities in line with 
identified  priories  and  emerging  needs.  This  will  allow  the 
steering  group  to  take  remedial  action,  e.g.  related  to  the 
design or communication of opportunities. 

A steering goup comprising all relevant DGs may monitor the 
design  and  implementation  of  horizonal  activities  to  ensure 
coherence with policy-specific activities. 

The role and remit of programme-level co-ordination should 
need  to  be  specified  very  clearly.  As  far  as  possible, 
responsibility for policy-specific strands and activities will be 
delegated  to  the  responsible  DGs,  so  that  only  essential 
management functions are undertaken at programme level. 
Where appropriate, the management of horizontal strands (or 
parts  thereof)  could  be  delegated  to  one  or  more  Executive 
Agencies/Offices in order to reduce costs. 
Additional monitoring by the Commission may consider any 
effects arising from standardised rules or funding rates across 
the  programme  and,  where  necessary,  remedial  actions  to 
ensure appropriateness. 

short-term 

The  provision  of 
financing  of  essential 
continuation  of  activities  by  making  use  of  mechanisms 
allowed  by  the  Financial  Regulation  (e.g.,  provisional 
provisions,  pre-financing,  derogations,  partial  payments, 
special instruments). 

7.  HOW DO THE OPTIONS COMPARE? 

In this  section, the options are  compared and set against the  problem  and problem  drivers 
identified in the areas of the proposed programme.  This section briefly illustrates how the 
options  compare  consisting  in  the  cumulative  financing  available  under  the  existing 
programmes in the current MFF.  
The following criteria would be applied to the analysis of the different policy options. 

Criteria 

Type of benefit 

Effectiveness 

•  Overall impacts  
•  Achievement of intended effects 

Efficiency 

•  Achievement of design effects: flexibilities, synergies, simplifications 
•  Administrative costs for implementation bodies 
•  Administrative burden for applicants, beneficiaries and participants 

50 

 
 
 
 
 
 
Coherence 

•  Internal coherence between programme pillars/actions 
•  Coherence with other EU programmes 
•  Coherence with wider EU policies 

7.1.  Effectiveness 

The impact of the intervention and achievement of intended effects are in the baseline 
scenario the same as under the current programmes, albeit with incremental improvements. 

For  the  integrated  scenario,  additional  flexibilities,  synergies  and  simplifications  enable 
additional, different or enhanced activities, e.g. better response to changing circumstances, 
joint activities. 

In  the  unified  scenario,  there’s  a  potential  for  greater  impact  on  problem  drivers  and 
achievement  of  intended  effects  to  the  extent  that  additional  flexibilities,  synergies  and 
simplifications  enable  additional,  different  or  enhanced  activities  and  horizontal  activities 
prove  effective.  In  relation  to  the  knowledge  and  data  gaps  and  other  barriers  for 
authorities, consumers and businesses, the unified scenario could deliver the strongest impact 
by supplying  broad, cross-cutting  information  and advisory support spanning  every policy 
area.  Regarding  the  need  for  capacity  building,  administrative  and  operational 
cooperation and integration, it could create new opportunities to deliver overarching support 
to  national  administrations,  strengthening  capacity  across  various  policy  domains,  e.g.  via 
consistent  technical  assistance  to  networks  of  national  authorities,  or  training  to  support 
national authorities. As for the effective rulemaking, standard-setting, and enforcement, 
while the other scenario entails the risk to maintain a siloed approach, the unified scenario 
would open the possibility for new horizontal activities cutting across all policy areas.  

Although  there  is  a  challenge  to  face  the  extra  administrative  complexity  due  to  a  more 
ambitious management and governance model (see “Efficiency” below”), the unified scenario 
has the merit of a solid framework offering simplified and streamlined processes, cross policy 
synergies,  integrated  digital  tools  for  access  to  funding,  effective  and  agile  programme 
implementation and reporting for all policy areas.  

7.2.  Efficiency 

Regarding the achievement of design effects, the baseline has limited flexibilities, synergies, 
simplifications.  

As shown by the interim evaluation of the SMP, limited potential for increased flexibilities, 
synergies,  simplifications  can  be  seen  in  integrated  programme  unless  specific  budget  is 
allocated to joint activities. A risk of delays remains in adopting the financing decisions or 
gaining approval of work programmes, etc. 

The  unified  option  has  a  potential  for  increased  flexibilities,  synergies,  simplifications, 
particularly where specific budget is allocated to horizontal activities and programme design 
enables joint procurement, etc. still considering a risk of duplication/confusion, e.g. between 
policy specific activities and horizontal activities and a risk of inflexibilities if rigid rules or 
funding  rates  are  not  appropriate  to  all  policy  areas.  With  the  implementation  of  relevant 
mitigating measures to  address  these risks, this scenario would provide a highly adaptable 

51 

 
 
programme framework with a built-in capacity for change to evolving needs, establishing a 
system with cross-policy synergies and a flexible budget reallocation. 

Potential savings may be made in administrative costs for implementation bodies in both 
options, as in programme development and management costs to the extent that duplication 
across  previously  separate  programmes  is  reduced,  for  example,  through  having  a  single 
legislative procedure for the previously separate programmes and budget lines or streamlining 
arrangements  for  audit,  evaluation,  etc.  Potential  administrative  savings  might  be  made 
through joint activities financed by a dedicated budget line. However, risks are to be noted in 
the  possibility  of  additional  longer  time  to  develop  and  adopt  the  programme  regulation, 
adjustment  and  adaptation  costs  in  setting  up  new  governance  model  (programme 
management,  administration  arrangements)  to  the  extent  that  specific  coordination  and 
reporting is required within the programme and at programme level. 

The  unified  scenario  could  offer  an  opportunity  for  savings  from  common  templates  and 
streamlined requirements for work programmes, annual management plans, annual activity 
reports,  Commission  Implementing  Decisions,  etc.,  savings  from  centralised  procurement, 
however  to  be  noted  a  remaining  risk  of  considerable  adjustment  and  adaptation  costs  in 
setting up new programme governance and management arrangements, additional burden and 
additional co-ordination costs at programme level (compared with the more siloed approach 
under the other scenario), as well as a risk of additional longer time to develop and adopt the 
programme regulation. 

There  is  potential  to  lower  administrative  burden  for  applicants,  beneficiaries  and 
participants  for  incremental  improvements  compared  with  the  current  programmes  in  all 
scenarios and to further  reduce administrative burden through a Common Rulebook in the 
integrated and the unified option, bearing in mind adaptation/adjustment issues where funding 
arrangements are revised. 

7.3.  Coherence 

As  both  scenarios  bring  the  currently  separate  programmes  closer  to  each  other,  the  unity  
Under the current programmes, there is internal  coherence between programme actions 
within  the  SMP  (few  significant  overlaps  between  its  pillars  and  sub-pillars)  and  within 
Customs  programme,  Fiscalis  Programme  and  UAFP  (mixture  of  EU-level  procurement 
essential  to  the  fulfilment  of  the  Commission’s  legal  responsibilities  and  support  to  build 
capacity  of  national  authorities  and  foster  co-operation  between  them).  There  are  no 
significant overlaps between the four programmes (support for distinct areas of policy and 
legislation).  The  baseline  shows  the  potential  to  improve  synergies  between  policy  areas 
featuring  in  multiple  pillars,  notably  market  surveillance,  standardisation  and  consumer 
protection. There is also a lost opportunity for synergies in two areas of intervention: first and 
primarily, in respect of supporting of building the capacity of relevant national authorities and 
facilitating  co-operation  between  them;  second,  in  terms  of  providing  information  to 
consumers and businesses.  

The integrated scenario provides potential for increased coherence by better aligning/co-
ordinating activities currently in different pillars or programmes that serve the same policy 
areas (market surveillance, standardisation, consumer protection, company law, customs and 
taxation). In a similar manner to be noted a potential for synergies in respect of supporting of 
building  the  capacity  of relevant  national  authorities  and  facilitating  co-operation  between 

52 

 
 
them or in terms of providing information to consumers and businesses (but may require a 
dedicated budget for joint activities). However, the interim evaluation of the SMP showed 
potential  synergies  linked  with  the  use  of  framework  contracts.  DG  FISMA  introduced  a 
framework contract in collaboration with DG COMP. This contract, awarded in December 
202385, involves providing assistance in verifying the alignment of national legal frameworks 
with  EU  standards  in  financial  and  competition  policy  areas.  The  collaboration  within  the 
SMP enabled a larger financial envelope for this contract, showcasing a benefit brought by 
this joint action. Another example of a joint framework contract is between DG GROW and 
DG JUST, fostering cooperation on consumer protection and market surveillance, and was 
signed in 2022. It relates to the joint activities on the compliance of products (JACOP) and 
the coordinated activities on the safety of products (CASP) coordinated activities on the safety 
of  products.  It  allows  for  the  organisation  of  common  testing  activities  relevant  for  both 
harmonised  and  non-harmonised  products.  The  collaboration  on  the  Safety  Gate  also 
represents some degree of synergy related to dangerous products (more than hundred products 
were subject to Safety Gate notifications86, so the relevant information was shared with other 
MSAs,  consumers  and  economic  operators,  with  follow-up  actions  to  ensure  they  are 
withdrawn or recalled). 

Preliminary findings of the interim evaluation of the Fiscalis programme confirm that Fiscalis 
is  fully  coherent  with  a  range  of  other  Commission  initiatives  in  terms  of  alignment  of 
objectives  and  complementarity  of  activities  and  outputs.  However,  no  concrete  practical 
links  were  found  among  the  initiatives  and  a  solution  for  this  could  be  to  explore  further 
opportunities  and  exploit  synergies.  The  latter  could  potentially  be  achieved  through  the 
unified scenario.  

In addition, for the unified scenario, opportunities can be found for synergies in cross-cutting 
interventions,  most  notably  related  to  supporting  networks  of  national  authorities  and 
providing information and advice to consumers and businesses (assuming a dedicated budget 
for horizontal activities).  

Furthermore, greater EU added value is more likely in the unified scenario to the extent that 
more  or  more  effective  capacity-building  and  coordinated  actions  for  national  competent 
authorities are implemented87.  

For  example,  the  UAFP  and  the  CCEI  despite  belonging  to  separate  structures,  ensure 
complementarity between their the Work Programmes and implement projects providing for 
additional capabilities in terms of Intelligence, Equipment, as well IT software and hardware 
that are not eligible under the CCEI but are fully complementary to its objective to harmonise 
customs  controls  and  to  contribute  to  adequate  and  equivalent  results88.  Under  the  unified 
scenario,  this  type  of  cooperation  foreseen  in  a  more  structured  design,  would  offer  more 

85 51823-2024 - Result - TED. 
86 Safety Gate.  
87 Respondents to the public consultation shared the priority areas that would benefit most from actions at EU 
level  are  the  support  for  cross-border  and  multi-country  projects  and  cooperation  (90%,  595  out  of  659), 
strengthening the competitiveness and sustainability of EU businesses (88%, 583 out of 664) and addressing 
transnational challenges (84%, 507 out of 604). 
88 CCEI Annual Progress Report 

53 

 
 
 
 
enhanced and deepened cooperation rather than on a case by case basis on the own initiative 
of the Member States. 

As for coherence with other EU programmes/wider EU policies, there is no significant 
duplication or overlap with other EU policies or programmes  in  all scenarios. The unified 
scenario  provides  high  budget  flexibility  and  ensures  policy  coherence  across  the  fields, 
without increasing administrative burden for stakeholders. 

8.  PREFERRED OPTION 

After assessing the impacts, effectiveness and efficiency of the two policy options, primarily 
focusing on design, the unified scenario is the preferred option. It best addresses all identified 
problems and problem drivers both in terms of the programme design and the covered policy 
areas. Yet, given the innovative approach of its governance model, it demands the greatest 
focus  on  tackling  the  associated  potential  challenges  with  the  appropriate  mitigation 
measures.  

The table below provides a qualitative scoring of the options. 

Criteria 

Continuity Scenario 

Integrated Scenario 

Unified Scenario 

Effectiveness  0 

Efficiency 

Coherence 

0 

0 

added 

0 

EU 
value 

0 

Need for risk 
mitigation 
measures 

+ 

+ 

++ 

0 

- 

++ 

++ 

+++ 

+ 

-- 

Significantly better (+++), moderately better (++), slightly better (+), no change (0), slightly 
worse (-), moderately worse (--), significantly worse (---). 

Related  to  effectiveness,  the  unified  Scenario  offers  the  greatest  potential  to  address 
knowledge and data gaps, as well as other barriers, through broad, horizontal information and 
advice  services  spanning  all  policy  fields.  Under  the  continuity  and  integrated  Scenarios, 
information  and  advice  services  for  authorities,  consumers,  and  businesses  would  likely 
remain  fragmented  across  policy  areas.  The  integrated  and  unified  scenarios  could  both 
introduce a common rulebook, enabling communication across policy fields.  

Regarding  efficiency,  the  unified  scenario  offers  the  greatest  potential  for  flexibility, 
synergies, and simplification, enabled by joint and horizontal activities and by programme 
features such as joint procurement. It also allows for cost savings through the use of common 
templates  and  streamlined  procedures  for  work  programmes,  annual  management  plans, 
activity  reports,  Commission  Implementing  Decisions,  and  centralised  procurement.  The 
integrated scenario provides less potential for added flexibility, synergies, and simplification. 
Both  the  integrated  and  unified  scenarios  could  reduce  programme  development  and 

54 

 
 
management costs by limiting duplication across previously separate programmes, and could 
lower administrative burden through a Common Rulebook. All scenarios offer some potential 
for gradually reducing the administrative burden for applicants, beneficiaries, and participants 
compared to existing programmes. 

On  coherence,  the  unified  scenario  provides  the  strongest  potential,  particularly  through 
synergies in cross-cutting interventions—such as supporting networks of national authorities 
and delivering information and advice to consumers and businesses. The integrated scenario 
also enables greater coherence by aligning or coordinating activities currently spread across 
separate pillars or programmes serving the same policy areas. Both the integrated and unified 
scenarios offer scope for synergies in building the capacity of national authorities, promoting 
their cooperation, and improving information provision to consumers and businesses, though 
such  gains  may  depend  on  joint  funding  arrangements.  The  continuity  scenario  ensures 
internal coherence within individual programmes but does not enhance coherence between 
them. It must be noted that none of the scenarios show incoherence with other EU policies or 
programmes. 

Concerning the EU added-value created by the Programme, the unified scenario offers the 
highest potential, particularly where it enables more or more effective capacity-building and 
coordinated actions for national authorities. All scenarios offer EU added value by supporting 
activities  necessary  for  the  Commission  to  meet  incumbent  legal  obligations,  financing 
transnational  and  cross-border  services  and  digital  platforms,  and  supporting  capacity-
building and coordination among national authorities—initiatives that would be less feasible 
or cost-effective if undertaken at national level. 

When it comes to the need for risk mitigation measures, the unified scenario poses the most 
significant  risks,  including  in  particular  higher  adjustment  and  adaptation  costs  for 
establishing new governance and management structures, potential duplication or confusion 
between activities, and potential inflexibility where uniform rules or funding rates do not suit 
all  policy  areas.  It  may  also  lead  to  additional  burden  and  transaction  costs  related  to 
programme-level  coordination and management. Both  the integrated  and unified scenarios 
may require mitigation measures such as enhanced programme-level coordination, support 
for applicants and at the outset, and mechanisms for monitoring and adjustments. 

Flexibility is key in guaranteeing the budget’s ability to respond to a changing reality along 
with  simplification  and  synergies  while  preserving  the  certainty  needed  to  fulfil  the 
requirements  established by legal  obligations. The flexibility  offered by a unified scenario 
consolidating  five  predecessor  programmes  enables  to  better  address  in  an  agile  manner 
complex and emerging challenges while simplifying and streamlining access to EU funding. 
Ultimately, the unified scenario has the most potential to achieve the general objective of the 
programme. 

In conclusion, the concerned policy areas can be best tackled with the unified scenario by 
simplifying  and  streamlining  procedures  which  would  help  promote  EU  policies  and 
programmes  and  fostering  stakeholders’  involvement  and  the  relevance  of  activities  while 
maintaining  the  flexibility,  synergy  and  simplicity  that  the  program  aims  to  provide. 
Moreover,  the  unified  scenario  brings  enhanced  operational  and  administrative  synergies, 
increased  efficiency  and  flexibility,  reducing  the  administrative  burden  through  simplified 
programme/EU  funding  procedures  and  improved  digital-ready  and  evidence-based 
policymaking.  Through  well-developed  programme  governance  and  clear  governance 

55 

 
 
structures  and  coordination,  simplified  processes,  integrated  digital  tools,  cross-policy 
synergies,  stakeholder  engagement,  the  unified  scenario  has  the  benefit  to  offer  a  holistic 
approach that balances flexibility with efficiency while still safeguarding the programme’s 
objectives.   

9.  HOW WILL ACTUAL IMPACTS BE MONITORED AND EVALUATED? 

This  initiative  will  be  monitored  through  the  performance  framework  for  the  post-2027 
budget,  which  is  examined  in  a  separate  impact  assessment.  The  performance  framework 
provides for an implementation report during the implementation phase of the programme, as 
well  as  a  retrospective  evaluation  to  be  carried  out  in  accordance  with  Article  34(3)  of 
Regulation (EU, Euratom) 2024/2509. The evaluation shall be conducted in accordance with 
the Commission's Better Regulation Guidelines and will be based on indicators relevant to 
the objectives of the programme. 

ANNEX 1: PROCEDURAL INFORMATION 

1.  LEAD DG, DECIDE PLANNING/CWP REFERENCES 

Lead Directorates-General (DGs): DG GROW, DG TAXUD 

Decide planning and Commission Work Programme references: N/A 

2.  ORGANISATION AND TIMING   

The  Inter-Service  Steering  Group  for  this  initiative  was  chaired  by  the  SG  in  close 
coordination with DG BUDG. The ISSG was composed of DGs GROW, TAXUD, COMP, 
DIGIT,  ECFIN,  ESTAT,  FISMA,  JRC,  JUST,  OLAF,  SANTE,  SG  REFORM  and 
representatives of the LS.  

The following meetings took place: 

•  29 January 2025 – preparation of public consultation 
•  12 February 2025 – policy options and limited draft Impact Assessment (first three 

chapters) 

•  5 March 2025 – skeleton, problem tree and provisional draft IA (first five chapters) 
•  27 March 2025 – consolidated draft on first five IA chapters 
•  6 May 2025 – full draft IA 
•  20 May 2025 – written consultation of the final IA 

The  external  study  was  commissioned  and  conducted  between  March  and  May  2025 
resulting in two key deliverables: assessment of costs and benefits and comparison of options 
as well as the analysis of the Open Public Consultation. Both fed into the IA report.  

A Public Consultation (PC) was carried out between 12 February 2025 - 07 May 2025. For 
reference: Annex 2 - Synopsis report. 

56 

 
 
3.  CONSULTATION OF THE RSB 

An  upstream  meeting  was  held  with  RSB  representatives  on  28  March  2025.  During  this 
discussion Board members provided early feedback and advice on the basis of a problem tree 
for  the  impact  assessment  and  the  related  narrative.  Board  members'  feedback  did  not 
prejudge in any way the subsequent formal deliberations of the RSB. 

The RSB issued an Opinion without qualification. The feedback is summarised in the table 
below.  

RSB recommendations 

Actions 

1. On scope: 

The report should be clear about which aspects 
of the single market it covers – and those that it 
does  not  –  and  that  it  comprises  only  flanking 
measures. 

Additional  information  on  the  scope  of  the 
programme as well as on the single market and 
Customs  Union  policies  have  been included  in 
section 1. 

The  report  needs  to  demonstrate  that  the 
financial architecture is well suited to facilitate 
delivery on the policy objectives. 

cover 

report 

should 

The 
a  more 
comprehensive way different elements of single 
market  and  Customs  Union  policies  in  the 
context, problem definition and objectives. 

in 

2. On the problem definition and on the use of 
evaluations:  

The  report  should  clearly  state  the  relevant 
conclusions  reached  in  those  evaluations,  and 
how strongly the conclusions are supported by a 
reliable evidence base. 

The  report  should  provide  a  more  thorough 
in  support  of  its  arguments  and 
analysis 
adequately utilise the findings from evaluations. 

More robust evidence is needed about the gaps 
and  to  support  the  claims  of  the  perceived 
suboptimal  effectiveness  and  flexibility.  The 
report should assess the magnitude of problems, 
and  similarly  analyse  regulatory  failures  to  be 
addressed,  their  magnitude  and  their  impacts. 
The report should further assess the deficiencies 
of  current  funding  arrangements,  e.g.  in  the 
rulebooks, eligibility criteria. 

A  reference  to  Annex  7  has  been  included  in 
section 1.  

The definition of the single market used for this 
impact assessment has been included in section 
1.2.  Clarifications  on  the  coverage  of  the 
Programme is provided in this section as well.  

Clarification  on  how  the  design  aspects  of  the 
programme will provide the right framework for 
delivering on the policy objectives in section 8. 

More evidence, findings and lessons learnt from 
previous 
further 
evaluations  have  been 
incorporated 
into  section  2  –  by  adding 
dedicated  sub-sections  –  thereby  providing 
information  on 
the  gaps  and  problems 
mentioned. 

All  available  evidence  and  data  has  been  used 
for  this  impact  assessment.  Evidence  from 
previous  evluation  exercises,  as  well  as  from 
other relevant sources and a supporting study has 
been included. There are no further quantitative 
data available to give reply to the need of more 
robust  evidence.  The  main  conclusions  and 
information  are  based  on  qualitative  data  and 
assessment. A list of evidence, sources and their 
related quality is to be found in Annex 1.4. 

57 

 
 
 
 
 
 
3. On the intervention logic and objectives:  

intervention 

The 
identified problems and their drivers.  

logic  should  cover  all 

The  causal  links  between  the  intervention  and 
objectives should be more clearly established.  

The  problem  tree  in  section  4.3  is  part  of  the 
intervention logic and displays the problems, the 
problem drivers in terms of content,  the causal 
links  between  the  intervention,  its  objectives, 
and the policy options considered. 

The  report  should  describe  the  objectives  in 
S.M.A.R.T.  terms  to  define  the  success  and  to 
facilitate monitoring and evaluation. The report 
should describe what the success is expected to 
be in relation to different objectives and how this 
IA  report  is  linked  to  the  IA  report  on  the 
Performance and Monitoring Framework.  

For  further  development  for  this  IA  cannot  be 
made  at  this  stage  as  this  depends  on  the 
and  Monitoring 
upcoming 
Framework, 
the  definition  of 
indicators, and its provisions with impact on all 
impact  assessments  for  the  MFF  and  funding 
programmes. 

Performance 
including 

58 

 
 
 
 
 
4. On options:  
The report should assess the aspects which are 
central  for  reaching  the  general  and  specific 
objectives of the instrument  and  put  forward  a 
corresponding range of options. 

The  options,  particularly  the  unified  scenario, 
should  be  backed  up  by  a clear  explanation  of 
their  practicality  and  by  enough  details  to 
distinguish it from the alternative.  

The report should clarify more to what extent the 
objectives  are  achievable  within  the  options' 
framework.  

The report should also clearly explain why only 
funding 
the 
options 
architecture are exploited.  

regarding 

overall 

Defining  the  options,  the  report  should  better 
clarify  the  governance  part,  in  particular  how 
funding decisions will be taken, by whom and, 
at what stage, in each of the two options and how 
the  options  differ  in  terms  of  governance 
arrangements and decision-making processes. 

The  report  should  also  describe  what  kind  of 
activities  are  to  be  funded  and  if  different 
existing  programmes  are  intended  to  be  re-
oriented or discontinued, while keeping the legal 
obligations.  

It  should  describe  in  more  details  the  overall 
potential  for  simplification  and  administrative 
costs  reduction  for  different  actors (applicants, 
beneficiaries, authorities). 

The  options  relate  first  to  the  design  of  the 
programme  based  on  the  problems  identified. 
The  policy  areas  supported  by  the  programme 
would be identical under the baseline and both 
options.  However,  this  does  not  preclude  the 
options from leading to distinct policy impacts. 
The  latter  are  presented  in  a  table,  thereby 
highlighting the differences in costs and benefits 

Further details on the unified scenario have been 
added in section 6, 7 and 8. 

Only a qualitative assessement can be provided 
to  clarify 
to  what  extent  objectives  are 
achievable. 

The  options  exploited  respond  to  the  political 
guidance established for the future MFF calling 
for a streamlined flexible approach allowing for 
an agile EU budget SG for explanation on why 
options are only on design/architecture.  

The  report  cannnot  elaborate  on  the  future 
governance  arrangements  and  decision  making 
processess  of  the  new  unified  scenario  as  this 
will be decided at a political level at a later stage. 

the  discontinuation  of 

As revised in section 1: The new initiative is not 
perceived  as 
the 
programmes,  nor  their  reorientation.  Policy 
needs  addressed  by  the  previous  programmes 
remain relevant and can be better addressed by 
merging the four incumbent programmes under 
a unified scenario.    

Reference  to  next  point  below  on  impact  for 
stakeholders.  

5. On comparison of options and cost-benefit 
analysis:  
The  report  should  provide further  explanations 
of  and  evidence 
the  estimates  and 
for 
assumptions  at  the  basis  of  the  costs  and 
benefits, and their potential evolution, including 
as regards Member States participation.  

In terms of costs and benefits, option 2 (unified 
scenario)  is  claimed  to  have  ‘potential  for 
increased flexibilities, synergies, simplification’ 
but  the  report  does  not  provide  sufficient 

Mitigating  measures  associated  with  the  risks 
evoked in relation to option 1 and 2 have been 
introduced  in  section  6  (tables  on  mitigation 
measures). 

A table of impacts has been included in Annex 
3.1 showing the costs and benefits of options for 
the three main groups of stakeholders. 

We have illustrated better the comparison of the 
two  options  by  establishing  a  ranking  of  the 
options in a scoring table in section 8. 

59 

 
 
 
analysis of administrative costs and the benefits 
to businesses and administrations respectively. 

Where the public administrations are the direct 
recipients of intended funding specific effects on 
businesses and consumers should be assessed.  

Beyond  listing  the  challenges  in  implementing 
the unified scenario, the report should provide an 
analysis of the mitigation measures.  

The  comparison  of  options  should  present  a 
impacts  on  main  categories  of 
table  of 
stakeholders. 

6. On governance and on coherence:  

The  report  should  clarify  the  principles  of 
governance of the programme. 

Governance  principles  guiding  the  Programme 
implementation will be decided upon at a later 
stage. 

7. On future monitoring and evaluation:  

report 

should 

outline 

to  monitor 

The 
appropriate 
monitoring and evaluation arrangements which 
would  allow 
the  progress  on 
achieving  the  objectives.  The  report  should 
include  a  requirement  for  the  data  plan  which 
would  ensure  that  different  types  of  data  are 
available for the evaluation. 

The  monitoring  and  evaluation  arrangements, 
including  indicators,  have  been  described  in 
section  9, 
the  performance 
framework for the post-2027 budget, discussed 
in parallel with this programme. 

referring 

to 

The  report  should  be  clear  how  specific 
indicators  relevant  to  the  objectives  of  the 
instrument  will  be  identified  and  used  in  the 
performance monitoring. 

4.  EVIDENCE, SOURCES AND QUALITY 

This impact assessment is based on theinterim evaluation of the Single Market Programme 
and experiences of the individual programmes of the MFF 2021-2027 budget period. This list 
of programmes is presented in section 1.2. Scope of this impact assessment. The lessons learnt 
from the experience with the programmes are summarised in Annex 7 sections 1.4., 2.5 and 
3.4.  This  impact  assessment  was  also  supported  by  public  consultations,  which  are 
summarised in  Annex 2.  All  available information and data has been used for this  impact 
assessment. The available data was limited due to certain evaluations not being yet available, 
and when available the difficulty to attribute impacts to interventions. The impact assessments 
draws from the sources listed below. 

•  Draghi,  M.  (2024).  The  future  of  European  competitiveness.  Part  A  – 

60 

 
 
 
 
 
 
 
 
 
 
A  competitiveness strategy for Europe. 

•  Letta, E (2024). Much  more than a market Enrico Letta - Much more than a 

market (April 2024) 

•  Heitor, M (2024) Align, Act, Accelerate Research, technology and innovation to 

boost European Competitiveness 

•  European Commission (2025) - EU Compass to regain competitiveness - January 

2025 

•  European  Commission  (2025)  -  Communication  on  the  road  to  the  next 

multiannual financial framework - February 2025 

•  European Commission (2024). Europe´s Choice. Political guidelines for the next 
European Commission 2024-2029; EUCO Conclusions 12/24 18 April;  EUCO 
15/24 June 2024. 

•  European Commission (2024). Science, Research and Innovation Performance of 

the EU: A Competitive Europe for a Sustainable Future. 

•  European  Commission  (2024).  -  Ex-post  evaluation  of  Horizon  2020,  the  EU 

Framework Programme for Research and Innovation 

•  European  Commission  (2025;  forthcoming).  –  Interim  evaluation  of  Horizon 

Europe 

•  European  Commission  (2025;  forthcoming)  –  Interim  evaluation  of  Customs 

programme (2021-2027) 

•  European Commission (2025; forthcoming) Interim evaluation of Fiscalis (2021-

2027) 

•  Customs Control Equipment Instrument Annual Progress Report 2022, SWD(2023) 

251 final,  

•  Bergeaud,  A.  (2024).  Monetary  policy  in  an  era  of  transformation.  The  past, 

present and future of European productivity. European Central Bank. 

•  European  Commission:    Directorate-General  for  Research  and Innovation 
(2024).  Align,  act,  accelerate  –  Research,  technology  and  innovation  to  boost 
European competitiveness, Publications Office of the European Union. 

•  Szarowská, I. (2017). Does public R&I expenditure matter for economic growth? 

GMM approach. Journal of International Studies (2071-8330), 10(2). 

•  Ciriaci, D., Moncada-Paternò-Castello, P., & Voigt, P. (2016). Innovation and job 

creation: a sustainable relation? Eurasian Business Review, 6, 189-213. 

•  Boeing, P., Eberle, J., & Howell, A. (2022). The impact of China's R&I subsidies 
technological  upgrading  and  economic  growth. 

on  R&I 
Technological Forecasting and Social Change, 174, 121212. 

investment, 

•  Steeman, J. T., Di Girolamo, V., Mitra, A., Peiffer-Smadja, O., Ravet, J., Hobza, 
A., & Canton, E. C. (2024). Why investing in research and innovation matters for 
a competitive, green, and fair Europe: A rationale for public and private action. 
R&I Working Paper Series RTD 

•  European Commission (2017), The economic rationale for public R&I funding 

and its impact, Policy Brief Series, p. 23. 

•  European Commission, Directorate-General for Research and Innovation (2021). 
EU research and innovation in action against the coronavirus – Funding, results 
and impact. 

•  European  Commission,  Mugabushaka,  A.,  Rakonczay,  Z.  (2022).  Informing 
global  climate  action  –  Contribution  of  the  Framework  Programmes  (FP7  and 

61 

 
 
H2020) to the knowledge base of recent IPCC reports based on openly available 
data. 

•  European Commission (2023). Strategic Foresight Report 2023. 
•  Communication  from the Commission on Customs reform: Taking the Customs 

Union to the next level, 17 May 2023, COM (2023) 257 final 

•  Communication  from  the  Commission  to  the  Council  and  the  European 
Parliament,  First  Biennial  Report  on  Progress  in  Developing  the  EU  Customs 
Union and its Governance, 5 July 2018 COM/2018/524 final 

•  Commission  Staff  Working  Document 

Impact  Assessment  Report 
accompanying  the  document  Proposal  for  a  Regulation  of  the  European 
Parliament  establishing  the  Union  Customs  Code  and  the  European  Union 
Customs Authority, and repealing Regulation (EU) No 952/2013, 17 May 2023, 
SWD (2023) 140 Final 

- 

•  Commission  Staff  Working  Document  accompanying  the  Report  from  the 
Commission  to  the  European  Parliament  and  the  Council  pursuant  to  Article 
278(a)  of  the  Union  Customs  Code,  on  progress  in  developing  the  electronic 
systems provided for under the Code, 10 February 2023, SWD(2023) 29 final 

•  VAT GAP in the EU 2024 report 
•  Annual Report on Taxation - European Commission, 2024 
•  2023 e Customs annual progress report 
•  Proposal for a COUNCIL DIRECTIVE amending Directive 2006/112/EC as 

regards VAT rules for the digital age (COM/2022/701 final) 
• 
Impact Assessment VAT in the Digital (SWD/2022/393 final) 
•  Directive on Administrative Cooperation (DAC) (DAC1-DAC8). 

ANNEX 2: STAKEHOLDER CONSULTATION (SYNOPSIS REPORT) 

1.  Introduction 

In the framework of preparing for the next Multiannual Financial Framework (MFF) starting 
in 2028, the European Commission conducted a public consultation to gather views on EU 
funding for the single market, and cooperation between national authorities. The consultation 
targeted  a  wide  range  of  stakeholders,  including  citizens,  businesses,  SMEs,  public 
authorities, recipients of EU funding, civil society organisations, academia, and international 
stakeholders. 

This  synopsis  report  summarises  the  results  of  the  consultation  and  informed  the  impact 
assessment process for the next MFF. 

The public consultation was conducted over a 12-week period, from 12 February 2025 to 7 
May 2025. It included an online questionnaire and the option to submit position papers. The 
questionnaire covered both general aspects of the EU single market and more technical issues 
related to specific challenges and measures. It consisted mainly of closed-ended questions, 
with several open-ended questions allowing respondents to elaborate on their views. In total, 
747 survey responses and 161 position papers were received.  

Contributions received in the context of the public consultation published on the ‘Have Your 
Say’ portal do not represent the official position of the Commission or its services and thus 
do  not  bind  the  Commission,  nor  do  they  constitute  a  representative  sample  of  the  EU 

62 

 
 
population. 

2.  Methodology 

This  section  outlines  the  approach  used  to  analyse  the  public  consultation  responses  and 
position papers received. It also provides an overview of identified campaign submissions. 

Quantitative analysis of closed questions 

The  statistical  analysis  of  closed  consultation  questions  combined  high-level  aggregation 
with disaggregated insights by stakeholder group. Cross-tabulations were used to explore 
variations in responses by stakeholder type. This enabled the identification of emerging trends 
within particular groups and helped contextualise broader patterns across the responses. While 
all  stakeholder  group  breakdowns  were  systematically  reviewed  and  collected,  this  report 
focuses on the most relevant divergences and trends for each question, in order to ensure a 
focused and concise presentation of findings. 

Qualitative analysis of open-ended responses and position papers 

The  analysis  of  open-ended  responses  and  position  papers  followed  a  hybrid  approach, 
combining Large Language Model (LLM)-driven topic modelling with expert human 
validation. This ensured a structured, consistent, and robust synthesis of stakeholder input. 
To support multilingual responses, the Commission’s eTranslation tool was used to process 
non-English contributions. 

Responses  were  mapped  according  to  a  set  of  key  issue  areas  defined  in  the  analytical 
framework developed during the inception phase. These categories were initially based on 
inception phase discussions with the Commission and a review of relevant documentation. 
The framework was operationalised, tested on a sample of responses, and iteratively adjusted 
to ensure accuracy and consistency. 

To enhance the reliability and nuance of the analysis, the study applied a layered validation 
process. Contributions were first mapped to issue areas using LLM-driven topic modelling. 
The initial classifications were tested against a human-coded sample, which showed a high 
level  of  alignment.  A  second  model  was  then  used  to  cross-check  the  outputs,  with  any 
discrepancies manually reviewed. Following categorisation, the study analysed responses to 
identify stakeholder perspectives, particularly regarding the challenges to EU single market 
integration and cooperation, their underlying causes, and proposed measures. The choice of 
methodology  and  approach  was  discussed  and  validated  with  the  European  Commission’s 
Joint Research Centre, which supported the robustness and credibility of the analysis. 

As the consultation relied on self-selected respondents who were not required to comment on 
every  issue  area,  the  qualitative  analysis  is  not  statistically  representative.  Instead,  it 
complements the quantitative results by illustrating stakeholder perspectives through specific 
examples and identifying recurring themes across position papers and open-text responses. 

Information on organised campaigns 

Submissions have been reviewed to identify organised campaigns among position papers and 
open-ended  responses.  In  total,  seven  campaigns  with  at  least  five  contributions  were 
identified. These account for 117 responses overall, representing approximately 16% of all 
submissions. The table below provides an overview of the number of responses per campaign, 
the stakeholder groups involved, their positions and their countries of origin. 

63 

 
 
 
Table 1. Preliminary overview of identified campaigns 

Countries of origin 

Positions 

Campaig
n 
number 

Number 
of 
response
s 

#1 

45 

#2 

15 

#3 

15 

Stakeholder 
types 

Standards 
organisations, 
public 
authorities, 
corporations 

society 

Civil 
and 
development 
NGOs 

Transport  and 
infrastructure 
companies  and 
authorities 

Various  EU  member 
states 

Czechia, 

Austria, 
Netherlands, 
Hungary, 
Romania, Slovenia 

Italy, 

Belgium, 
Austria, 
France,  Germany, 
Italy, Spain 

#4 

12 

Non-profit 
welfare 
organisations 

Germany 

#5 

11 

Cinema 
organisations 

France,  Germany, 
Netherlands, 
Slovenia 

#6 

10 

Film industry 

Austria, 
Germany 

Bulgaria, 

#7 

9 

and 
Local 
regional  public 
authorities 

Netherlands 

3.  Analysis of public consultation results 

Promote 
high-quality 
corporate  reporting  and 
strengthen Europe’s role 
in 
international 
standard-setting 

Strengthen  EU  DEAR 
programme and funding 
for  global  citizenship 
education 

Strengthen 
EU-level 
funding and cooperation 
for  transport  to  support 
sustainable, 
resilient 
infrastructure 

Strengthen 
cohesion 
policy  and  structural 
funds  to  ensure  equal 
living  conditions  across 
the EU 

Strengthen  the  Creative 
MEDIA 
Europe 
and 
programme 
arthouse 
cinema 
funding 

Strengthen  the  Creative 
Europe 
MEDIA 
programme and support 
the audiovisual sector 

funding  and 
Flexible 
balanced  performance 
criteria 
regional 
for 
innovation 

The following sections present the analysis of key findings from the public consultation. The 
analysis combines both quantitative and qualitative findings, covering responses to closed and 

64 

 
 
open-ended questions as well as submitted position papers. It highlights key trends, patterns, 
and divergences across stakeholder groups, providing an overview of stakeholder views most 
relevant to the impact assessment. 

3.1 Background of respondents 

The  public  consultation  was  primarily  answered  by  EU  citizens,  who  accounted  for  26% 
(191)  of  respondents  (N=747)  (see  figure  below).  Non-governmental  organisations 
represented  18%  (131)  of  responses,  followed  by  public  authorities  at  15%  (114), 
companies/businesses  at  11%  (82)  and  business  associations  at  10%  (76).  ‘Other’ 
stakeholder types (9%, 69) primarily encompassed government bodies, banking institutions, 
chambers  of  commerce,  financial  and  accounting  bodies,  civil  society,  and  sector-specific 
networks and associations. 

Figure 1. Number of replies per stakeholder types (N=747) 

200

191

150

100

50

0

131

114

82

76

69

57

9

8

8

2

EU Citizen

NGO (Non-governmental organisation)

Public authority

Company/business

Business Association

Other

Academic/Research Institution

Non-EU Citizen

Trade Union

Consumer Organisation

Environmental Organisation

The public consultation gathered responses predominantly from European countries (95%, 
710), with Germany leading with the highest number of respondents (125). Belgium followed 
with 122 respondents, and Italy with 57. Participation from non-EU countries was notably 
limited, with a total of 37 responses. 

3.2  Challenges  and  measures  to  support  the  single  market  and  cooperation  between 
national authorities 

The following sections combine findings from closed questions, open-ended responses, and 
position  papers to  present  key trends across the  main issue areas related  to single market 
integration  and  cooperation  between  national  authorities.  For  each  area,  the  analysis 
explores stakeholder perspectives, underlying causes, and proposed measures. 

As  shown  in  the  figure  below,  ensuring  that  rulemaking,  standard-setting,  and 
enforcement at the EU level remain evidence-based, effective, and tailored to evolving 
needs  (92%,  615  out  of  673)  and  improving  cooperation,  collaborative  efforts,  and 
integration among member states and the Commission (87%, 587 out of 672) emerged as 
the  most  widely  recognised  challenges.  Overall,  all  identified  challenges  were  considered 
(very) important by respondents, with at least 69% rating each challenge as (very) important. 

Figure 2. Importance of identified challenges 

65 

 
 
Q3. The Commission has identified relevant challenges linked to a well-
functioning single market and cooperation between national authorities. How 
important are these challenges?

Ensuring evidence-based rulemaking, standard-
setting and enforcement at EU level (N=673)

Improving collaboration and integration among
Member States and Commission (N=672)

Addressing regulatory fragmentation (N=660)

Empowering stakeholders by addressing knowledge
and data gaps (N=667)

Addressing differences in the interpretation of EU
law (N=651)

Addressing a fragmented and complex digital
environment (N=652)

Optimising technical and administrative capacities
for Member States (N=663)

Harmonising Member States’ approach in 
addressing gaps in financing (N=652)

Addressing disparities in the digitalisation of public
administration (N=651)

Challenges related to the effective protection of EU
funds against illegal activity (N=656)

92%

87%

82%

81%

80%

79%

77%

71%

70%

69%

0%

20%

40%

60%

80%

100%

Note: The figure shows the combined share of respondents  who selected ‘Important’ or 
‘Very important’. 

The most frequently cited additional challenges identified by respondents in an open-ended 
follow-up  question  include  excessive  bureaucracy  and  regulatory  fragmentation,  uneven 
enforcement of EU rules across member states, and a need for greater harmonisation in areas 
such as taxation, accounting, environmental standards, and digital regulation. 

Considering the extent to which current policies address the aforementioned challenges, the 
following ranked highest: improving cooperation, collaborative efforts, and integration 
(65%, 422 out of 654), empowering stakeholders by addressing knowledge and data gaps 
and  overcoming  barriers  (65%,  422  out  of  655),  and  ensuring  evidence-based  and 
adaptive EU rulemaking and enforcement (63%, 408 out of 649) – based on the combined 
share  of  respondents  answering  ‘To  a  large  extent’  or  ‘Somewhat’.  All  remaining  areas 
received somewhat more moderate scores in comparison. 

Figure 3. Role of the current policies 

66 

 
 
Q4. To what extent do the current policies address these challenges?

Improving cooperation among Member States and
with the Commission (N=654)
Empowering stakeholders by addressing
knowledge and data gaps (N=655)
Ensuring evidence-based and adaptive EU
rulemaking and enforcement (N=649)

14%

11%

14%

51%

54%

49%

18%

16%

20%

14%

23%

12%

Addressing regulatory fragmentation (N=644)

10%

39%

30%

6%

14%

Addressing a fragmented and complex digital
environment in the EU (N=642)

Strengthening the digitalisation of public
administration (N=634)

Optimising technical and administrative capacities
among the Member States (N=636)
Harmonising Member States’ approach in 
addressing gaps in financing (N=637)

Addressing differences in the interpretation of EU
law (N=644)

9%

9%

9%

39%

37%

28%

5%

19%

27%

4%

23%

32%

34%

5%

20%

7%

34%

30%

3%

26%

10%

31%

32%

5%

23%

0%

20%

40%

60%

80%

100%

To a large extent

Somewhat

Very little

Not at all

Don't know/not applicable

Need  for  enhanced  coordination  and  adaptability  of  EU-level  action,  rulemaking,  and 
enforcement 

Respondents  broadly  recognised  the  importance  of  addressing  issues  related  to  EU-level 
rulemaking, enforcement, and coordination in the single market. Ensuring that rulemaking, 
standard-setting, and enforcement remained evidence-based, effective, and responsive 
to evolving needs was considered particularly important across all stakeholder groups. This 
was the highest-rated challenge overall, with 92% of respondents (615 out of 673) rating it as 
(very)  important.  Addressing  regulatory  fragmentation  (82%,  543  out  of  660)  and 
addressing differences in the interpretation of EU law (80%, 521 out of 651) also received 
strong  levels  of  support.  Both  areas  were  seen  as  particularly  important  by  member  state 
authorities (92% and 87% respectively, N=94). 

Respondents’  views  were  more  mixed  when  asked  whether  current  policies  sufficiently 
addressed these challenges. For instance, while 63% of respondents (408 out of 649) felt that 
current policies addressed the challenge of ensuring evidence-based, effective, and adaptive 
rulemaking to some or a large extent, 41% (264 out of 644) believed that existing policies 
adequately addressed differences in  the interpretation of EU law. Open-text responses and 
position  papers  linked  to  this  issue  area  frequently  highlighted  fragmentation  in  EU 
rulemaking and enforcement as a barrier to a well-functioning single market. Contributions 
pointed  to  divergent  national  regulations,  uneven  implementation,  and  limited  EU-level 
oversight  as  key  challenges.  Harmonisation  of  standards,  particularly  in  sustainability 
reporting,  digital  regulation,  and  energy,  was  frequently  mentioned  among  respondents 
representing standard-setting or regulatory bodies, who underlined the role of relevant EU-
level bodies for fostering consistency and enhancing accountability across the single market. 
Some respondents also stressed the need for more responsive, transparent, and streamlined 
EU  decision-making,  particularly  in  areas  involving  cross-border  coordination  or  new 
challenges. Others pointed to a growing complexity in regulatory obligations as a barrier for 
businesses,  calling  for  clearer  guidance,  more  stable  rules,  and  greater  coherence  in 
interpretation across member states. 

Knowledge and data gaps 

67 

 
 
Empowering  national  authorities,  citizens,  consumers,  and  businesses  by  addressing 
knowledge  and  data  gaps  and  overcoming  barriers  was  widely  recognised  among 
respondents,  with  81%  rating  this  issue  as  (very)  important  (537  out  of  667).  Academic 
institutions (90%, 51 out of 57) and member state authorities (85%, 81 out of 95) considered 
it especially relevant. At the same time, 63% of respondents (316 out of 501) felt that current 
EU policies addressed the challenge somewhat or to a large extent, suggesting comparatively 
higher satisfaction with existing efforts in this area than for other issues. 

In  open-text  responses  and  position  papers,  respondents  frequently  emphasised  the 
importance of reliable data, transparent reporting, and enhanced knowledge-sharing as 
key enablers of evidence-based policymaking and a well-functioning single market. Public 
authorities  in  particular  frequently  highlighted  the  need  to  strengthen  EU-wide  data 
infrastructures,  improve  information  accessibility  for  consumers  and  SMEs,  and  support 
national statistical and data governance capacities. . In this context, several respondents from 
public authorities underlined the need for flexible and forward-looking statistical capacity, 
particularly  to  respond  to  emerging  challenges  like  AI,  digitalisation  and  sustainability, 
demographic shifts, and geopolitical instability.  Others emphasised that timely, accessible, 
and  comparable  information  is  essential  to  support  effective  monitoring,  reduce  regional 
disparities,  and  guide  structural  reforms.  Some  respondents  also  advocated  for  more 
accessible,  citizen-oriented  public  reporting  formats  to  enhance  accountability,  while 
others pointed to the need for interoperable data infrastructures to better support cross-
sectoral innovation and policymaking. 

Capacity gaps in national administrations 

Challenges related to capacity gaps in national administrations were viewed as moderately 
important relative to other issues. Optimising technical and administrative capacities to 
ensure  a  level  playing  field  was  rated  as  (very)  important  by  77%  (508  out  of  663)  of 
respondents, while 70% (456 out of 651) identified disparities in the digitalisation of public 
administration  as  a  (very)  important  challenge.  Member  state  authorities  placed  greater 
emphasis  on  both  issues  than  other  stakeholders  –  79%  (75  out  of  95)  rated  optimising 
capacities and 82% (76 out of 93) rated digitalisation gaps as (very) important. 

Respondents  expressed  comparatively  lower  confidence  in  the  effectiveness  of  current 
policies in this area. Only 41% (261 out of 636) felt that efforts to optimise administrative 
capacities across member states were effective to some or a large extent, while 48% (308 out 
of 642) said the same for policies addressing a fragmented and complex digital environment. 
While only few respondents commented on this area in open-text responses or position papers, 
those that did noted the importance of improving administrative and technical capacities – 
particularly at local and regional level – to ensure effective implementation of EU rules and 
manage funding processes more efficiently. 

To  explore  potential  solutions,  respondents  were  asked  to  rank  the  three  most  important 
aspects  of  providing  support  to  improve  the  administrative  and  institutional  capacity  of 
national  authorities  in  member  states  (see  figure  below).  The  most  frequently  prioritised 
aspects were predictability of programming associated with investments financed by the 
EU and focus on key EU priorities where they bring more EU added value. 

Sustainability of actions over time and flexibility to address a variety of needs received 
moderate support, while assisting member states in identifying areas where technical support 
would  be  more  impactful  and  the  possibility  to  support  a  wide  variety  of  beneficiaries  in 
public administrations at different levels was consistently ranked lowest across all stakeholder 
groups. 

68 

 
 
Figure 4. Ranking of key aspects for improving administrative and institutional capacity 
in Member States (based on overall score) 

1. Predictability of the programming associated with
investments financed by the EU

2. Focus on key EU priorities where they bring more
EU added value

3. Sustainability of actions over time

4. Flexibility to address a wide variety of needs from
Member States

639

631

473

451

5. Assist Member States in identifying the areas where
technical support would be more impactful, taking…

286

6. Possibility to support a wide variety of beneficiaries
in public administrations at different levels

130

0

100

200

300

400

500

600

700

Note:  Based  on  Question  9:  ‘In  your  opinion,  which  of  the  following  aspects  is  the  most 
important  in  providing support to  improve the administrative  and institutional  capacity of 
national authorities in Member States? Please rank the three preferred options:’ (N=435). 
Scores were calculated using a weighted ranking method. 

While  these  overall  preferences  were  broadly  consistent  across  stakeholder  groups,  some 
variations emerged: 

EU citizens and consumers (N=170) placed stronger emphasis  on focusing  key EU-level 
strategic priorities. 

Member  state  authorities  (N=88)  prioritised  predictability  followed  by  flexibility,  likely 
reflecting practical considerations for implementation and planning. 

Among business stakeholders, SMEs (N=43) ranked predictability and sustainability highest, 
while business associations (N=55) and large companies (N=23) favoured focusing key EU-
level strategic ahead of predictability. 

Divergent national approaches and need for enhanced cooperation 

Improving cooperation, collaborative efforts, and integration among member states and 
with the Commission was one of the most widely recognised challenges, with 87% (587 out 
of  672)  of  respondents  rating  it  as  (very)  important.  Related  issues  were  also  viewed  as 
important  (though  to  a  somewhat  lesser  extent),  including  regulatory  fragmentation  (82%, 
543 out of 660) the complexity of the digital environment (79%, 512 out of 652), and differing 
national approaches to financing support, particularly for SMEs (71%, 463 out of 652). In all 
cases,  member  state  authorities  (N=54)  and  academic  and  research  institutions  (N=46) 
expressed  higher  levels  of  importance  than  other  stakeholder  groups,  while  businesses,  in 
particular  SMEs  (N=45)  and  business  associations  (N=63),  placed  strong  emphasis  on 
divergent approaches to financing. 

Respondents  expressed  mixed  confidence  in  the  effectiveness  of  current  policies  in 
addressing these challenges. While 65% (422 out of 654) considered that cooperation and 
collaboration was being improved to some or a large extent, only 49% (319 out of 644) felt 
that regulatory fragmentation was being adequately addressed, and 41% (259 out of 637) said 

69 

 
 
the same for efforts to harmonise national approaches to SME financing  – the latter being 
among the lowest-rated areas. 

Respondents who addressed this issue in open-ended responses and position papers frequently 
pointed  to  fragmentation  and  a  lack  of  cross-border  coordination  in  regulatory 
frameworks.  They  frequently  emphasised  that  greater  alignment  of  rules  and  closer 
cooperation between member states is necessary to reduce barriers to cross-border activities, 
particularly  in  areas  such  as  transport,  digital  services,  SME  support,  and  research 
infrastructure.  To  address  these  challenges,  respondents  frequently  proposed  stronger 
coordination  mechanisms,  harmonised  regulatory  standards,  and  enhanced  EU-level 
oversight. Some also underlined the importance of involving local and regional authorities in 
shaping and implementing EU policy to strengthen delivery and accountability. A few noted 
that fragmented approaches and differences in administrative practices limit the coherence of 
single market policies and called for a clearer and more integrated European approach. 

3.3 Challenges and measures to enhance the EU budget 

The following sections combine findings from closed and open-ended questions, as well as 
position  papers,  to  summarise  stakeholder  perspectives  on  the  main  structural  and 
procedural barriers limiting the effectiveness of the EU budget. 

Among all obstacles assessed, administrative burdens and fragmented and complex rules 
were identified by respondents as the most relevant challenges to the EU budget achieving its 
objectives. 

Figure 5. Role of budget obstacles 

Q5. To what extent do you see the following as obstacles to the EU budget 
achieving its objectives?

Administrative burden for beneficiaries, regional…

Different and often complex fund-specific rules on…

Administrative capacity at national, regional and…

Lack of coordination or synergies between…

Lack of flexibility to adapt to new and unforeseen…

54%

54%

38%

36%

33%

31%

7%

7%

26%

11%

8%

39%

40%

9%

4%

10%

10%

5%

8%

36%

19%

4%

7%

Too many programmes with overlapping policy…

17%

45%

19%

10%

9%

Focus is on reimbursing costs rather than on…

26%

35%

17%

9%

13%

National regulatory environment makes EU…

22%

35%

16%

6%

21%

Insufficient alignment with national policies (N=654)

Fraud, corruption and other illegal activities …

15%

15%

38%

20%

11%

16%

26%

24%

8%

26%

To a large extent

Somewhat

Very little

Not at all

Don't know/not applicable

0%

20%

40%

60%

80%

100%

Respondents’ concerns regarding obstacles to the EU budget achieving its objectives were 
closely reflected in their views on possible measures. Stakeholders showed broad support for 
simplifying procedures  and improving the design of funding instruments. The highest 
levels of support were expressed for clearer, fewer and simpler rules and simplifying access 
to and information about funding for beneficiaries.  

Figure 6. Impact of possible measures 

70 

 
 
Q6. To what extent do you agree that the following options could help the EU 
budget become more effective and efficient?

Simplifying access to and information about funding
for beneficiaries (N=654)

Fewer, clearer and simpler rules (N=667)

Applying common rules, timelines and eligibility
criteria to all relevant EU funds (N=668)

Use funds to promote both reforms and investments
(N=653)

Introduce more flexibility into resource allocation to
react to crises and emerging needs (N=652)

Place greater focus on achieving results, incl. via
performance-based funding (N=651)

Reducing the number of EU funding programmes
(N=664)

64%

73%

26%

6%

16%

6%

46%

31%

9%

8%

6%

39%

36%

41%

34%

12%

6%

9%

37%

15%

5%

7%

31%

13%

7%

8%

15%

31%

22%

24%

8%

To a large extent

Somewhat

0%
Very little

20%

40%

60%

80%

100%

Not at all

Don't know/not applicable

Complexity to access, mobilise and implement EU funding for beneficiaries 

Complexity  related  to  accessing,  mobilising,  and  implementing  EU  funding  was 
identified as the most significant obstacle to the EU budget achieving its objectives. Among 
all  challenges  assessed,  the  two  issues  linked  to  this  area  received  the  highest  levels  of 
agreement.  Administrative  burdens  for  beneficiaries  and  authorities  were  seen  as  an 
obstacle  to  some  or  a  large  extent  by  85%  of  respondents  (555  out  of  657),  with  strong 
alignment across stakeholder groups. Similarly, 80% (530 out of 650) identified the existence 
of different and complex fund-specific rules on access and compliance as a key concern. 
This view was particularly pronounced among member state authorities, with 87% (82 out of 
94) expressing this concern. 

Stakeholders also expressed clear support for targeted solutions to address this complexity. 
The most widely supported measures were the simplification of access to and information 
about funding (90%, 585 out of 654) and the introduction of fewer, clearer, and simpler 
rules (89%, 599 out of 667) based on the share of respondents who selected ‘Somewhat’ or 
‘To a large extent’. Notably, 64% and 73% respectively selected ‘To a large extent’ – by far 
the highest levels across all options. 

Respondents who addressed this issue in open-text responses and position papers frequently 
highlighted  administrative  burden,  procedural  complexity,  and  lack  of  clarity  as  key 
barriers to accessing EU funding. Stakeholders across sectors pointed to fragmented rules 
and requirements across programmes as a source of confusion and inefficiency. Several 
noted that complex procedures and excessive reporting obligations discouraged participation, 
particularly among SMEs. In this context, contributions also noted that complex procedures 
and  excessive  reporting  obligations  discouraged  participation,  particularly  among  SMEs. 
Some respondents also highlighted the need for clearer definitions and guidance within calls 
for proposals to ensure relevance and accessibility. 

Fragmentation of EU funds 

Stakeholders identified several structural issues related to how EU funds are designed and 
implemented, which may limit their effectiveness. One of the most commonly cited obstacles 
was the lack of coordination or synergies between programmes, identified by 76% (509 

71 

 
 
 
out  of  667)  of  respondents  to  some  or  a  large  extent,  in  particular  among  academic  and 
research institutions (93%, 50 out of 54). This was followed by the lack of flexibility to adapt 
to new and unforeseen developments, cited by 69% overall (460 out of 662), and by 80% 
(76 out of 95) of member state authorities. 

Other concerns included too many programmes with overlapping policy goals (62%, 416 out 
of 669) and an overemphasis on reimbursing costs rather than delivering results (61%, 403 
out of 653) – a view that was more prominent among member state authorities (71%, 66 out 
of 93). Limited alignment with national policies was the least frequently identified challenge 
in this area, cited by 53% of respondents overall (347 out of 654), though this share rose to 
72% (39 out of 54) among academic/research institutions. These results suggest that public 
authorities, in particular, are more likely to view fragmentation and rigidity as key obstacles 
to  effective  policy  delivery.  When  asked  about  possible  solutions,  respondents  broadly 
supported greater flexibility and stronger focus on outcomes. The most widely endorsed 
options  included  introducing  more  flexible  resource  allocation  to  respond  to  crises  and 
changing priorities (73%, 479 out of 652) and using EU funds to promote both reforms 
and investments (73%, 476 out of 653). There was also support for placing greater emphasis 
on achieving results, such as  through performance-based funding (72%,  465 out  of 651), 
while a smaller proportion (46%, 307 out of 665) believed that reducing the number of EU 
funding programmes could help improve efficiency. 

Respondents who addressed this issue in open-text responses or position papers frequently 
pointed to the fragmentation of funding instruments and the need for better coordination 
across  programmes  and  levels  of  governance.  They  highlighted  that  fragmented  funding 
structures undermine coherence, dilute impact, and create inefficiencies. In this context, some 
respondents  also  further  highlighted  the  perceived  complexity  and  overlap  of  reporting 
requirements across EU and national systems, which may limit participation in multi-country 
projects. 

At the same time, other contributions emphasised the importance of maintaining dedicated 
funding  lines  for  specific  sectors,  and  noted  that  improved  integration  across  funding 
instruments  should  not  result  in  excessive  centralisation  at  national  level,  which  some 
respondents viewed as potentially reducing the responsiveness of support to local and regional 
needs.  In  this  context,  several  contributions  also  underlined  the  importance  of  preserving 
place-based  approaches  to  ensure  that  funding  structures  remain  responsive  to  regional 
capacities and priorities. 

In  addition,  public  authorities  in  particular  frequently  underlined  the  need  for  greater 
flexibility to reallocate resources in response to emerging needs, using existing structures 
where  possible.  Others  cautioned  that  overly  rigid,  performance-based  approaches  could 
discourage innovation or limit long-term impact. 

3.4 Intervention areas for EU-level action 

In the context of the EU budget’s support for the single market, customs union, and related 
measures,  respondents  identified  fairness,  security,  and  integration  as  the  top  intervention 
areas (see figure below). Supporting fair competition ranked highest, with 83% (546 out of 
655) rating it as (very) important and strong alignment across stakeholder groups. This was 
followed by supporting standardisation efforts (81%, 550 out of 682). While support was 
high across all stakeholder groups, some differences in emphasis emerged: 

Member  state  authorities  placed  higher  importance  than  other  groups  on  several  areas, 
including deploying common and/or interoperable digital solutions (85%, 77 out of 91), and 

72 

 
 
supporting EU economic security (80%, 73 out of 91). 

EU citizens and consumers expressed particularly high support for fair competition (92%, 
163 out of 176), protection and empowerment of EU consumers (87%, 152 out of 175) and 
fair taxation (84%, 147 out of 176). 

Businesses,  including  SMEs,  overall  showed  more  moderate  support  across  most  areas 
compared  to  other  stakeholder  groups  but  placed  strong  emphasis  on  strengthening 
competitiveness  by  supporting  businesses  (87%,  123  out  of  142)  and  supporting  fair 
competition (86%, 123 out of 144). 

When asked about other potential strategic areas to be covered by a well-functioning single 
market, some respondents emphasised the need for harmonised tax and customs rules, reduced 
administrative  burdens  –  especially  for  SMEs  –  and  stronger  digital  infrastructure  and 
cybersecurity across the EU. 

Figure 7. Support for intervention areas 

Q7. The Commission has identified the following intervention areas. How 
important are these to you?

Supporting fair competition (N=655)

Supporting standardisation efforts (i.e. development of
common standards) (N=682)

Supporting capacity building, supervision and joint
enforcement of EU rules (N=647)
Ensuring a high level of health and safety for people,
animals and plants (N=652)

Deploying common and/or interoperable digital solutions,
including portals and tools (N=648)

Supporting the protection and empowerment of EU
consumers (N=650)

Supporting businesses to strengthen competitiveness in a
fast-changing business environment (N=660)
Supporting the prevention and combating of fraud,
corruption and other illegal activities (N=647)

Supporting fair taxation and reducing the tax gap (N=641)

Supporting EU economic security through a customs union
acting as one (N=641)

Supporting the development, production and
dissemination of European data (N=646)

Upgrading EU customs with common governance and
powerful central digital solutions (N=639)

47%

50%

36%

31%

7%

8%

12%

6%

37%

39%

14%

9%

53%

23%

6%

16%

43%

43%

46%

42%

38%

39%

33%

32%

28%

14%

8%

13%

11%

15%

9%

30%

33%

14%

13%

12%

14%

29%

12%

19%

31%

27%

36%

22%

9%

31%

16%

23%

Very important

Important

Moderately important

Not at all important

Don't know/not applicable

0%

20%

40%

60%

80%

100%

3.5 Added value of EU-level action 

Respondents identified several areas where EU-level action is seen as particularly valuable. 
The  top  priorities  included  support  for  cross-border  and  multi-country  projects  and 
cooperation (90%, 595 out of 659), strengthening the competitiveness and sustainability 
of EU businesses (88%, 583 out of 664) – based on the share of respondents who selected 
‘Somewhat’ or ‘To a large extent’. 

Perceived  added  value  of  EU-level  action  varied  more  across  stakeholder  groups  than  by 
specific intervention area: 

Member  state  authorities  overall  showed  consistent  support  across  most  areas,  with 
particularly high support for cross-border projects (97%, 92 out of 95). 

73 

 
 
 
EU citizens and consumers expressed relatively high support across most areas, particularly 
for ensuring consumer protection  (94%, 164 out  of 174), preventing unsafe/non-compliant 
products (91%, 159 out of 176), strengthening competitiveness and sustainability (90%, 160 
out of 176) and removing internal market obstacles (92%, 163 out of 177). 

Business stakeholders overall showed more moderate support across most areas compared 
to other stakeholder groups, but placed strong emphasis on competitiveness and sustainability 
(94%,  132  out  of  140).  Among  this  group,  SMEs  showed  highest  support  for  access  to 
funding, and capacity building. 

Figure 8. Support for actions at EU level 

Q8. To what extent do you believe that actions at EU level would bring added 
value compared to actions at national level?

Support cross-border/multi-country projects and
cross-border cooperation (N=659)

Strengthen the competitiveness and sustainability of
EU businesses (N=664)

Removedisproportionate obstacles to free
movement in the single market (N=662)

Prevent unsafe or non-compliant products and
services available in the single market (N=654)

67%

23%

3%

6%

57%

55%

52%

31%

3%

8%

29%

4%

11%

32%

4%

11%

Ensure a high level of consumer protection (N=655)

48%

36%

5%

11%

Address transnational challenges (N=604)

59%

25%

4%

11%

Increase EU-level coordination to streamline capacity
building efforts across the EU (N=647)

Prevent and combat fraud and any other illegal
activities affecting the EU budget (N=639)
Improve access to funding for SMEs and other
beneficiaries (N=644)

Ensure a high level of health and safety related to
people, plants, animals, food, feed (N=649)

49%

44%

43%

34%

6%

11%

34%

35%

7%

14%

8%

12%

53%

25%

5%

17%

To a large extent

Somewhat

Very little

Not at all

Don't know/not applicable

0%

20%

40%

60%

80%

100%

Note: The figure shows the 10 response options with the highest number of combined ‘To a 
large extent’ and ‘Somewhat’ ratings. 

SPECIFIC INFORMATION for CUSTOMS and FISCALIS 

In  parallel,  the  study  supporting  the  interim  evaluations  of  the  Customs  and  Fiscalis 
programmes,  even  though  the  work  is  not  yet  finalised,  carried  several  consultations  with 
direct (national authorities) and indirect beneficiaries (e.g. citizens and economic operators) 
via  the  case  studies,  targeted  surveys  and  interviews.  This  extensive  consultation  shows 
evidence of large satisfaction of the participants in actions that are linked to capacity building, 
cooperation  and  integration  between  authorities.  In  addition,  preliminary  findings  on  case 
studies covering selected European electronic systems show that the central digital solutions 
for  both  customs  and  taxation  are  rather  efficient  and  effective  creating  EU  added  value 
(compared to the scenario of absence of centrally managed electronic systems which would 
have  been  replaced  by  numerous  individual  systems  managed  by  Member  States).  Early 
consultations with the direct beneficiaries of the Customs and Fiscalis programmes (customs 
and tax authorities) took place in a form a dedicated agenda point in the national programme 

74 

 
 
 
coordinators’ workshops in 202489. In this session, the Commission invited the participants to 
take a critical  look  at  the functioning  and benefits  of the collaborative activities under the 
general collaboration actions grant and the expert team grants. The breakout groups were to 
address the following specific questions: 

•  What  would  be  the  consequences  (direct  and  indirect)  of  a  scenario  where  is  only 
limited  or  even  no  budget  available  for  collaborative  activities?  What  rational  and 
tangible  policy  and  political  defensives  are  there  to  justify  securing  the  budget  for 
collaboration? 

•  What  shortcomings  (vulnerabilities)  are  there  regarding  collaboration  that  may 
undermine  the  securing  of  the  budget  and  play  into  the  court  of  those  who  would 
advocate for eliminating/reducing collaboration actions? 

•  What would be the criteria for selecting priority actions? General collaboration action 
grant – flexibility: advantages and downsides. How to address the negative aspects 
and how much we can sacrifice flexibility? 

•  What if only national administrations can initiate and lead collaborative actions? What 
kind  of  actions  you  would  imagine  that  would  take  place?  What  kind  of  activities 
would stop or reduce significantly? Why? 

In their feedback the participants noted that many collaborative activities are implemented 
with online collaboration and online meetings, not having a budgetary impact. This however 
reduces the effective and efficient sharing of good practices. Further reduction of the budget 
would reduce further the physical meetings. 

The participants emphasised that the collaborative activities and the networking generated by 
the physical meetings reinforce trust between the participating countries. This is especially 
relevant  for  the  candidate  countries  and  potential  candidates,  which  is  essential  for  their 
integration.  The  participants  identified  the  following  criteria  for  selecting  priority  actions: 
efficiency, effectiveness, coherence, relevance, and EU added value – following the principles 
used by the better regulation concept. The feedback also highlighted the need to align priority 
actions with the flagship policies of the EU (digital transition, green considerations, etc.). The 
current  flexibility  is  highly  appreciated  under  the  general  collaboration  action  grant,  as  it 
allows agility in  adapting to  emerging  needs.  At the same time, this  agility and flexibility 
hampers predictability and budgetary planning, which may result in running out of the grant 
budget  towards  the  end  of  grant  cycle  or  on  the  contrary,  underconsumption,  as  the 
beneficiaries  would  save  up  to  unexpected  activities  which  may  never  take  place.  The 
participants  also  questioned  what  kind  of  collaboration  actions  would  be  still  required, 
following the potential establishment of the EU Customs Authority. The breakout discussions 
acknowledged that the outcomes and results of collaborative activities are often obscured (not 
tangible, not measurable, not visible) or lack quality. In addition, the participants noted that 
green  considerations  impacted  by  air  travel,  in  particular,  could  further  reduce  physical 
meetings  and  induce  prioritisation  in  terms  of  physical  meetings.  At  the  same  time,  the 
participants remarked that to compensate for physical meetings, the quality of online meetings 
and interactions must be improved. The feedback also concluded that expert teams’ potential 
is  not  fully  used.  The  outcomes  of  the  discussions  also  emphasised  the  need  for  careful 
considerations for EU added value: one may question the EU added value of working visits 

89 Customs programme management expert group E03788 and Fiscalis programme management expert group 
E03789 

75 

 
 
 
especially in comparison with other activities (such as EU-level, conceptual or operational 
activities). Finally, the feedback expressed some critical views on programme groups, which 
often  lack  planning,  sound  project  implementation,  reporting  and  general  management. 
Participants in activities should take an active role, and reduced number of participants would 
potentially also contribute to increased efficiency. 

ANNEX 3: WHO IS AFFECTED AND HOW? 

1.  PRACTICAL IMPLICATIONS OF THE INITIATIVE 

There are implications for costs and benefits for three main groups of stakeholders. 

•  Citizens and consumers have direct access or participate in supported activities (e.g. 
advice  and  support  services)  or  they  are  indirectly  affected,  e.g.  by  activities  that 
support  competent  authorities  in  different  policy  fields  (e.g.,  competition,  market 
surveillance). 

•  Businesses, including entrepreneurs and investors: have direct access or participate in 
supported  activities  or  they  are    indirectly  affected,  e.g.  by  activities  that  support 
competent authorities in different policy fields. 

•  Public authorities:  have two distinct roles: implementing the programme (or actions 
therein); participating in or benefiting (directly/indirectly) from supported activities. 
Public authorities include national authorities, European Commission, and EU-level 
or international bodies (e.g., standardisation bodies). 

The following table summarises the costs and benefits in qualitative terms anticipated in the 
continuity, integrated and unified scenario, for the three main groups of stakeholders. 

 Scenario  Costs for citizens, consumers, businesses 

Continuit
y 
(baseline) 

No compliance or enforcement costs 

No direct costs (participation in, use of, or engagement with programme activities is 
entirely voluntary and imposes no costs on citizens, consumers or businesses) 

Possible indirect costs relating to “hassle” of accessing fragmented services provided 
across different policy areas. 

Integrate
d 

No different from Continuity Scenario, except: 

-       possible reduction in hassle in accessing services to the extent that services are 
less fragmented across policy areas 

-        possible  increase  in  hassle,  depending  on  need  to  adapt  to  different  forms  of 
service provision. 

Unified 

No different from Continuity Scenario, except: 

-       possible reduction in hassle in accessing services to the extent that services are 
less fragmented across policy areas 

-        possible  increase  in  hassle,  depending  on  need  to  adapt  to  different  forms  of 

76 

 
 
Continuit
y 
(baseline) 

service provision. 

Costs for public authorities 

No compliance or enforcement costs 

No direct costs (participation in, use of, or engagement with programme activities is 
either voluntary or part of their normal responsibilities, thus any costs are business-as-
usual) 

Indirect administrative burden associated with applying for and receiving EU funds. 

Possible  indirect  costs relating  to  hassle  of accessing  fragmented services  provided 
across different policy areas. 

Integrate
d 

No different from Continuity Scenario, except: 

-       possible reduction in administrative costs due to a single set of requirements and 
a Common Rulebook 

-       possible reduction in indirect costs to the extent that services are less fragmented 
across policy areas 

-        possible  increase  in  hassle,  depending  on  need  to  adapt  to  different  forms  of 
service provision. 

Unified 

No different from Continuity Scenario, except: 

-        possible  reduction  in  programme  management  costs,  if  programme-level 
committees are no longer needed 

-       possible reduction in administrative costs due to a single set of requirements and 
a Common Rulebook 

-        possible  reduction  in  administrative  burden  associated  with  applying  for  and 
receiving EU funds due to horizontal activities 

-       possible reduction in hassle associated with participating in EU-level activities 
due to horizontal activities 

-       possible reduction in indirect costs to the extent that services are less fragmented 
across policy areas 

-        possible  increase  in  hassle,  depending  on  need  to  adapt  to  different  forms  of 
service provision. 

Costs for the European Commission 

Continuit
y 
(baseline) 

Direct  cost  associated  with  implementing  the  programme  (5%  of  SMP  programme 
budget, 2% of UAFP programme budget; to be determined for Customs and Fiscalis 
Programmes) 

Integrate Direct cost associated with implementing the programme (5% of programme budget) 

77 

 
 
  
  
d 

Potential reduction in administrative burden associated with programme management 
and implementation of activities through: 

-       additional possibilities for budgetary flexibility (but likely to be limited) 

Risk of increased administrative burden depending on: 

-       New layer of programme-level co-ordination; 

-       Adaptation/adjustment costs 

Unified 

Potential reduction in administrative burden associated with programme management 
and implementation of activities through: 

-        simplifications,  e.g.  single  legislative  proposal,  single  system  for  monitoring, 
reporting, evaluation and audit 

-        additional  possibilities  for  budgetary  flexibility  (greater  than  Continuity  and 
Integrated Scenarios) 

-       synergies, e.g. joint procurement, joint framework contracts. 

Risk of increased administrative burden depending on: 

-       adjustment/adaptation to new programme design, governance and activities 

-        burden  and  transaction  costs  related  to  programme-level  coordination  and 
management of horizontal activities 

-        any  inflexibilities  from  a  single  legal  basis,  single  set  of  programme 
implementation arrangements, etc.. 

Benefits for citizens, consumers and businesses 

-       Access to information and services 

-       Better services related to consumer rights, e.g. ADRs 

Continuit
y 
(baseline) 

-       Better representation in policymaking and standardisation processes, e.g. ANEC, 
ETUC, Better Finance, Finance Watch 

-       Increased consumer health and safety (product safety, standards, etc.) 

-       Customer benefits from better enforcement of competition rules (cartels, mergers, 
trusts) 

Integrate
d 

As  under  the  Continuity  Scenario,  except  where  synergies,  flexibilities  and 
simplifications in programme design result in: 

-       better services for citizens, consumers and businesses 

-       enhancement of higher-level effects (product safety, standards, enforcement of 
competition rules, etc.) 

78 

 
 
  
Unified 

No different from Continuity Scenario, except where better services are provided to 
citizens, consumers and businesses or higher-level effects are enhanced due to: 

-       synergies, flexibilities and simplifications in programme design 

-        horizontal  activities  that  would  not  take  place  (or  not  at  the  same  level  or  as 
effectively) under other scenarios 

Continuit
y 
(baseline) 

Benefits for public authorities 

Direct benefits:  

-       Increased capacity, skills and knowledge 

-       Better access to facilities, expertise, etc. 

-       Increased digitalisation of public administration and law enforcement 

-       Enhanced co-operation with other authorities 

-       Secure and effective exchange of confidential information with the Commission 

-       Reduced burden (e.g. better case management; easier and more secure transfer of 
documents and exchange of information) 

Indirect benefits: 

-       Better implementation and enforcement of Union law 

-       Reduced cost of implementation and enforcement of Union law 

-       Increased tax and customs revenues 

-       Reduction in tax fraud, evasion and avoidance 

Integrate
d 

As under the Continuity Scenario, except where: 

-       more/better activities are implemented to support national authorities (to build 
capacity, enhance co-operation, etc.) due to synergies, flexibilities and simplifications 
in programme design 

-        participation  in  grant-funded  projects  is  easier  and  more  effective  due  to 
streamlined conditions (single set of requirements, Common Rulebook, etc.) 

Unified 

As under the Continuity Scenario, except where: 

-       more/better activities are implemented to support national authorities (to build 
capacity, enhance co-operation, etc.) due to synergies, flexibilities and simplifications 
in programme design 

-        participation  in  grant-funded  projects  is  easier  and  more  effective  due  to 
streamlined conditions (single set of requirements, Common Rulebook, etc.) 

79 

 
 
  
-       more effective/relevant horizontal activities are implemented to support national 
authorities (to build capacity, enhance co-operation, etc.) 

But risks of reduced benefit, depending on: 

-       Adjustment/adaptation costs/time 

-       Disruption to the implementation of long-established and essential activities 

-       Low take-up or use of horizontal activities 

-       Weak relevance of horizontal activities 

-       Inflexibility of horizontal activities 

-       Duplication/confusion betwee horizontal and policy-specific activities 

Continuit
y 
(baseline) 

Benefits for the European Commission 

Direct benefits:  

-       Increased capacity, skills and knowledge 

-       Better access to facilities, expertise, etc. 

-       Increased digitalisation of public administration and law enforcement 

-       Enhanced co-operation with other authorities 

-       Secure and effective exchange of confidential information with 3rd parties 

-       Reduced burden (e.g. better case management; easier and more secure transfer of 
documents and exchange of information) 

Indirect benefits: 

-       Better implementation and enforcement of Union law 

-       Reduced cost of implementation and enforcement of Union law 

-       Increased tax and customs revenues 

-       Reduction in tax fraud, evasion and avoidance 

Integrate
d 

As under the Continuity Scenario, except where: 

-        more/better  activities  to  support  the  Commission’s  policymaking  and  law 
enforcement role are implemented due to synergies, flexibilities and simplifications in 
programme design (e.g., joint procurement) 

-        programme  management  is  less  burdensome  (harmonised,  legal  provisions, 
common reporting templates, single set of requirements, Common Rulebook, etc.) 

80 

 
 
  
Unified 

As under the Continuity Scenario, except where: 

-        more/better  activities  to  support  the  Commission’s  policymaking  and  law 
enforcement role are implemented due to synergies, flexibilities and simplifications in 
programme design 

-        programme  management  is  less  burdensome  (harmonised,  legal  provisions, 
common reporting templates, single set of requirements, Common Rulebook, etc.) 

-        more  effective/relevant  horizontal  activities  are  implemented  to  support  the 
Commission’s policymaking and law enforcement role 

But risks of reduced benefit, depending on: 

-       Adjustment/adaptation costs/time 

-       Disruption to the implementation of long-established and essential activities 

-       Low take-up or use of horizontal activities 

-       Weak relevance of horizontal activities 

-       Inflexibility of horizontal activities 

-       Duplication/confusion between horizontal and policy-specific activities 

2.  SUMMARY OF COSTS AND BENEFITS 

Unfortunately costs and benefits quantification was not available, due to the difficulties 
to estimate as the result of the programme character focusing on the support for the well-
functioning  single market. The qualitative appreciations reflect  the  evidence gathered 
through the evaluations and the analysis.  

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

Description 

Amount 

Direct benefits 

Comments 

Compliance cost reductions  Reduced costs for the Commission through joint 
procurement  for  product  and  services  (i.e., 
database, Eurobarometer, survey, communication 
campaign, etc..). 
Costs  savings  from  single  legislative  procedure 
(including  Commission  decision)  and  budget 
line;  streamline  audit,  evaluations  and  other 
process 
Administrative  costs  savings  deriving  from 
common  templates;  streamline  requirements  for 
work  programme,  annual  management  plans, 
annual activities reports,  

81 

 
 
 
 
 
 
Improve  the  efficiency  of 
resources allocations  

Administrative  costs  saving  for  beneficiaries 
from common rules and procedures  

-The  flexibility  to  allocate  resources  where 
necessary will improve the overall efficiency of 
resource allocation. 
-  Costs  saving  for  Joint  activities  financed  by  a 
dedicated budget line.  

Indirect benefits 

(1) Estimates are gross values relative to the baseline for the preferred option as a whole (i.e. the impact of 
individual  actions/obligations  of  the  preferred  option  are  aggregated  together);  (2)  Please  indicate  in  the 
comments column which stakeholder group is the main recipient of the benefit;(3) For reductions in regulatory 
costs,  please  describe  in  the  comments  column  the  details  as  to  how  the  saving  arises  (e.g.  reductions  in 
adjustment costs, administrative costs, regulatory charges, enforcement costs, etc.;);.  

II. Overview of costs – Preferred option 

Citizens/Consumers 

Businesses 

Administrations 

One-off 

Recurrent 

One-off 

Recurrent 

One-off 

Recurrent 

Direct 
administrative 
costs 

Action (a)   

Direct regulatory 
fees and charges 

Direct 
enforcement costs 

Direct adjustment 
costs 

None 

None 

None 

None 

None 

None 

None 

None 

5%  of  SMP 
programme 
for 
2% 
UAFP 

to 
to 
forms 
service 

Need 
adapt 
new 
of 
provisions 

None 

None 

None 

None 

None 

None 

None 

None 

None 

None 

Indirect costs 

None 

None 

None 

None 

None 

None 

None 

None 

None 

None 

(1)  Estimates (gross values) to be provided with respect to the baseline; (2) costs are provided for each 
identifiable  action/obligation  of  the  preferred  option  otherwise  for  all  retained  options  when  no 
preferred  option  is  specified;  (3)  If  relevant  and  available,  please  present  information  on  costs 
according to the standard typology of costs (adjustment costs, administrative costs, regulatory charges, 
enforcement costs, indirect costs;).  

III. Application of the ‘one in, one out’ approach – Preferred option(s) 

One-off 

Recurrent 

Total 

[M€] 

(annualised total net present 
value over the relevant period) 

(nominal values per year) 

82 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Businesses 

New administrative 
burdens (INs) 

None 

Removed administrative 
burdens (OUTs) 

common 
and 
Simplified 
procedure across programme - 
potential indirect cost savings 

Overall cost savings 

Net administrative 
burdens* 

Adjustment costs** 

Citizens 

New administrative 
burdens (INs) 

None 

Removed administrative 
burdens (OUTs) 

Net administrative 
burdens* 

Adjustment costs** 

Total administrative 
burdens*** 

Simplified 
common 
and 
procedure  across  programme 
from  the  Common  Rulebook- 
potential indirect cost savings 

Overall cost savings  

Overall costs saving  

(*) Net administrative burdens = INs – OUTs;  
(**) Adjustment costs falling under the scope of the OIOO approach are the same as reported in Table 2 above. Non-
annualised values;  
(***)  Total  administrative  burdens  =  Net  administrative  burdens  for  businesses  +  net  administrative  burdens  for 
citizens. 

3.  RELEVANT SUSTAINABLE DEVELOPMENT GOALS 

IV. Overview of relevant Sustainable Development Goals – Preferred Option(s) 
Relevant SDG 

Expected progress towards the Goal 

Comments 

inclusive 

e.g.  SDG  no.  8  –  Promote 
and 
sustained, 
sustainable 
economic 
growth,  full  and  productive 
employment and decent work  

e.g.  SDG  no.  9  –  Build 
infrastructure, 
resilient 
promote 
and 
sustainable  industrialization 
and foster innovation  

inclusive 

83 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
e.g.  SDG  no.  16  –  Promote 
inclusive 
and 
peaceful 
societies 
sustainable 
for 
development, provide access 
to  justice  for  all  and  build 
effective,  accountable  and 
inclusive  institutions  at  all 
levels 

ANNEX 4: ANALYTICAL METHODS 

The impact assessment was facilitated by a study executed by a consortium led by the Centre 
for Strategy & Evaluation Services (CSES) with the following consortium members Centro 
Studi Industria Leggera (CSIL), PPMI Group, and Prognos.  

The interim evaluation of the SMP and the UAFP fed significantly in the analysis carried out 
for the purposes of this impact assessment. In addition, the preliminary findings of the studies 
supporting the interim evaluation of the Customs and Fiscalis programmes were taken into 
consideration90. The evaluations extensively build on specific case studies, surveys, targeted 
interviews and large-scale desk research. 

The  points  regarding  the  customs  domain  are  driven  by  the  impact  assessment  and  the 
associated Commission proposal on the EU Customs Reform.  

In  addition,  the  customs  and  taxation  aspects  are  assessed  based  on  the  indicators  of  the 
Customs  and  Fiscalis  programmes  and  the  related  annual  progress  reports  on  years  2021-
2024.  

90 At the time of drafting the impact assessment, the interim evaluation supporting studies for the Customs and 
Fiscalis programmes have not yet been finalised, therefore any findings should be considered as preliminary. 

84 

 
 
 
 
 
 
 
 
 
ANNEX 5: COMPETITIVENESS CHECK 

1.  OVERVIEW OF IMPACTS ON COMPETITIVENESS  

Dimensions of 
Competitiveness 

Impact of the initiative 
(++ / + / 0 / - / -- / n.a.) 

References to sub-sections of the 
main report or annexes 

Cost and price competitiveness  0/+ 

International competitiveness  

Capacity to innovate 

SME competitiveness 

0/+ 

0/+ 

0/+ 

2.  SYNTHETIC ASSESSMENT  

Sections 6.2 and 7.1 of the IA 

Sections 6.2 and 7.1 of the IA 

Sections 6.2 and 7.1 of the IA 

Annex 6 

The  proposed  intervention  indirectly  targets  improving  the  EU  competitiveness  by 
facilitating a well-functioning and strong single market, which is a pre-requisite for EU 
competitiveness and prosperity. 

Cost  and  price  competitiveness:  The  preferred  policy  option  does  not  directly  target 
businesses.  However, better policymaking and law enforcement in the single market could 
have a positive impact on cost and price competitiveness of EU companies, especially by 
reducing administrative complexity, streamlining and simplifying procedures. 

International  competitiveness:  a  better  functioning  and  stronger  single  market  would 
have a positive impact on international competitiveness fostering a level playing field with 
efficient market surveillance and customs to fight against imported products which are not 
compliant with EU legislation.  

Capacity  to  innovate:  the  proposed  intervention  will  positively  impact  capacities  of 
Member States and national authorities, supporting a well-functioning single market which 
adapts to new technological challenges (e.g. adapting contract law, standardisation to the 
needs  of  the  digital  economy).  This  is  essential  to  ensure  seamless  digital  cross-border 
transactions and could help in the development of innovative digital business model.  

SME competitiveness: similar effects expected for SMEs as compared to large companies 
for  all  competitiveness  dimensions.  SMEs  will  benefit  significantly  from  a  unified  and 
simplified  funding  environment  with  harmonised  procedures  lowering  barriers  and 
administrative burden.  

3.  COMPETITIVE POSITION OF THE MOST AFFECTED SECTORS 

The proposed intervention is  horizontal  and affect  large parts of the economy.  It is  not 
possible to identify the most affected sector  affected by the preferred policy option and 
analyse their competitive position. 

85 

 
 
 
ANNEX 6: SME CHECK 

Relevance for SMEs  

The proposed intervention is relevant for SMEs. Although, the initiative is not targeting 
SMEs specifically, but other stakeholders such as national authorities, standardisation 
organisation, representative organisations, or the Commission itself.  

(1) 

Identification of affected businesses and assessment of relevance 

Are SMEs directly affected? (Yes/No) In which sectors? 

The main direct impact identified for SMEs would result from the voluntary use of tools, 
platforms,  and  services  financed  by  the  proposed  intervention  (Your  Europe,  Your 
Europe Advice, Eurostat, EU Taxonomy Compass). A very small number of SMEs could 
for instance benefit from training as direct beneficiaries. This is dependent on SMEs’ 
choice to make use of these, hence assessing the benefits derived from this use could 
only be too broadly estimated. 

Estimated number of directly affected SMEs 

The proposed intervention is of horizontal nature and affect large parts of the economy, 
potentially 24.3 million SMEs in the EU. 

Estimated number of employees in directly affected SMEs 

According te the European Commission, Europe has 24.3 million SMEs, providing jobs 
to more than 85 million European citizens, i.e. with a ratio of about 3.5 jobs per SME.  

Are  SMEs  indirectly  affected?  YES.  In  which  sectors?  What  is  the  estimated 
number of indirectly affected SMEs and employees? 

SMEs  will  be  indirectly  affected  by  the  initiative.  SMEs  will  be  eligible  as  direct 
beneficiaries under calls for proposals. SMEs may benefit from the activities financed 
under the programme. Based on current data the following estimates related to digital 
tools used by businesses such as SMEs may be expected during 2028-2034, but it must 
be noted that the figures do not distinguish between SMEs and other stakeholders:  

•  Your Europe: 300 million visits 
•  Your Europe Advice: 150 000 queries addressed 
•  Eurostat: 28 million database sessions 
•  EU Taxonomy compass: 1 million visitors, 2.2 million visits 
•  Consumer professionals trained: 2100. 

The following sectors are relevant to the intervention and therefore SMEs operating in 
these  might  be  indirectly  affected  by  the  programme:  competition,  standardisation, 
market surveillance, taxation, customs, anti-fraud.  

86 

 
 
 
 
(2) Consultation of SME stakeholders 

How has the input from the SME community been taken into consideration? 

The  Commission  collected  input  from  SMEs  via  a  public  consultation  open  to  all 
respondents focusing on the EU funding for the single market, and cooperation between 
national authorities which ran from 12 February to 6 May 2025. No call for evidence was 
run for this impact assessment. 

12 companies and three business associations provided contributions; this represents less 
than 10% of all respondents.  This  shows a somewhat  low participation  of  businesses, 
proportional to the relevance of the proposed programme to SMEs. The input provided 
was therefore not substantial to draw any conclusions on views of SMEs, rendering the 
usefulness  of this  evidence for  the  cost-benefit analysis  limited, yet  the feedback was 
taken into consideration. 

Are SMEs’ views different from those of large businesses?  YES  

SMEs are likely to be more affected by the challenge mentioned above, i.e. the differing 
national approaches to financing support, than larger businesses. Excessive complexity 
to access, mobilise, and implement EU funding for beneficiaries is also likely affecting 
SMEs more than larger businesses; discouraging participation. The fragmentation of EU 
funds,  and  the  subsequent  inefficiencies  created  by  overlapping  programmes  and 
inconsistent  rules  across  funding  streams  also  likely  affects  SMEs  more  than  larger 
companies.  However,  given  the  limited  number  of  respondents,  it  is  not  possible  to 
differentiate the views of SMEs from those of large businesses. 

(2) ASSESSMENT OF IMPACTS ON SMES91 

What are the estimated direct costs for SMEs of the preferred policy option? (Fill 
in only if step 1 flags direct impacts) 

Qualitative assessment 

No direct costs for SMEs, only  voluntary use of  tools  and platforms financed by the 
intervention. 

Quantitative assessment 

N.A. 

What  are  the  estimated  direct  benefits/cost  savings  for  SMEs  of  the  preferred 
policy option92? 

Qualitative assessment 

91 The costs and benefits data in this annex are consistent with the data in annex 3. The preferred option 
includes the mitigating measures listed in section 4.  
92 The direct benefits for SMEs can also be cost savings. 

87 

 
 
 
Direct benefits from using services financed by the programme materialise as increased 
information and awareness of SMEs of their rights, responsibilities, and opportunities. 
Easier access to information via EU portals and tools generates time savings and ensures 
its reliability.  

Quantitative assessment 

Benefits only assessed qualitatively. 

What are the indirect impacts of this initiative on SMEs? (Fill in only if step 1 flags 
indirect impacts) 

The support to IT tools and platforms fostering more secure and effective exchange of 
confidential information with competent authorities (competition, taxation, customs…) 
would indirectly benefit SMEs. SMEs will benefit indirectly from better representation 
in policymaking, standardisation, and legislative processes. Small Business Standards 
(SBS) is an example of a representative organisations supported by the programme that 
defends  the  interest  of  SMEs  in  standards  development  both  at  EU  and  international 
level.  They  will  also  indirectly  benefit  from  the  support  of  the  programme  to  better 
policymaking and legislation, particularly in terms of fair competition, harmonisation, 
as well as better EU statistics, and better standards. With better market access, enhanced 
consumer  confidence,  and  a 
less  fragmented  regulatory  framework,  SMEs’ 
competitiveness is expected to be strengthened. 

(3) MINIMISING NEGATIVE IMPACTS ON SMES 

Are SMEs disproportionately affected compared to large companies? (Yes/No) 

If yes, are there any specific subgroups of SMEs more exposed than others? 

No negative impacts on companies and in particular SMEs identified. 

Have  mitigating  measures  been  included  in  the  preferred  option/proposal? 
(Yes/No)  

No  mitigating  measures  were  included  in  the  preferred  option  and  proposal,  as  the 
programme  will  have  limited  relevance  to  SMEs,  with  the  very  few  direct  and  only 
positive impacts.  

CONTRIBUTION TO THE 35% BURDEN REDUCTION TARGET FOR SMES 

Are there any administrative cost savings relevant for the 35% burden reduction 
target for SMEs? 

N.A. 

88 

 
 
 
 
ANNEX 7: BACKGROUND INFORMATION ON PROBLEM DRIVERS 
AND SCOPE IN THE CONTEXT OF THE SINGLE MARKET, 
CUSTOMS UNION, TAXATION AND ANTI-FRAUD POLICY 
DOMAINS 

1.  KNOWLEDGE AND DATA GAPS, AND OTHER BARRIERS ARE OBSTACLES FOR 
CITIZENS, CONSUMERS, AND BUSINESSES, ECONOMIC OPERATORS TO ACCESS 
AND OPERATE IN THE SINGLE MARKET 

1.1. 

Single market 

Digital services and tools for information, advice, and communication are designed to 
assist  consumers,  citizens  and  businesses  in  understanding  and  making  the  most  of 
opportunities  within  the  single  market.  Internal  Market  governance  tools  and  platforms 
such  as  the  Single  Digital  Gateway  (SDG)  integrates  networks  and  services  providing 
support for cross-border activities at national and EU level. Your Europe, Your Europe 
Advice,  IMI,  and  SOLVIT  make  available  and  accessible  free  information,  advice  and 
guidance  to  consumers  and  businesses  about  their  rights  and  administrative  procedures 
within the single market. It helps them navigate EU rules, and seek redress when buying, 
selling, or investing across borders. 

Tools  are  in  place  that  focus  on  actions  like  product  safety,  consumer  protection,  and 
enhance the participation of consumers and end-users in financial services policy making. 
Platforms assist consumers in cross-border transactions by providing free information and 
advice on their rights, help them in resolving cross-border consumer complaints and obtain 
access to appropriate dispute resolution.  

In addition, consumer organisations play a crucial role in providing independent advice, 
raising awareness, and supporting consumers in understanding and exercising their rights. 
The  impact  of  these  activities  shows  the  crucial  role  of  EU  funding  in  that  regard  and 
underscores the increasing need for more support. 

Grants and contribution agreements for organisations representing consumers, businesses, 
consumers and end-users of financial services, workers, and other interests, in European 
and international Standardisation to have a voice at the EU level in decision-making and 
policy processes. 

Economic operators report difficulties related to accessing information and accomplishing 
administrative  formalities  online.  According  to  recent  surveys,  key  problems  include 
difficulty  to  access  information  on  rules  and  requirements  and  overly  complex 
administrative procedures. To address this issue, digital tools can facilitate access and 
reduce administrative burden. Support services are provided for advice, cooperation and 
in mentoring platforms for businesses and entrepreneurs. This aims to empower businesses 
by enhancing their skills and access to effective entrepreneurial networks and helping them 
to capitalise on opportunities within the single market.  

Collection of data, research, studies and evaluation activities improve the understanding 
of the single market and its challenges. For consumer policy, this improves the evidence 

89 

 
 
base on consumer conditions in the single market, provides a basis to identify problematic 
areas.  Research  work  on  important  financial  services  topics  contributes  to  the  sector's 
policymaking  and  promotes  awareness  raising.  Studies  ensure  that  competition 
enforcement  continues  to  be  evidence-based  and  remains  relevant  to  address  the  ever-
changing market dynamics: technical expertise and specific datasets are also necessary to 
support enforcement actions in specific competition cases. Information and education are 
provided to consumers through information campaigns, meetings and trainings. 

Comprehensive studies and statistical reports provide and reinforce public awareness, the 
understanding  of  the  single  market  and  ensure  access  to  trustworthy  information  for 
stakeholders across the EU as well as reducing barriers to operating in the single market 
and  fostering  a  closer  co-operation  between  authorities  and  better  and  more  consistent 
enforcement. High-quality European statistics are produced and disseminated to provide 
valuable  insights  and  address  knowledge  gaps,  allowing  citizens,  consumers,  and 
businesses to benefit fully from the single market.  

1.2. 

 Customs Union 

Economic operators and extra-EU, international trade benefit currently from the common 
components of the nearly 70 central digital systems managed by the Commission, which 
digitalise  customs  procedures  and  lead  to  a  paperless  customs/trade  environment.  The 
digital systems mandated by the Union Customs Code (UCC)93, aim to, inter alia, create a 
fully  electronic  environment  for  the  customs  authorities  and  economic  operators  and 
citizens, to  complete  customs  formalities  via  the  deployment  of  several electronic 
systems. However, analysis demonstrate the vulnerability in delivering and operating 27 
national  (+1  central)  customs  IT  environments94.  Nonetheless,  once  implemented, the 
UCC  digital  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  entry  and  exit  processes 
throughout the Union needed connection to around 190 national IT systems, after 2025 this 
is  intended  to  be  reduced  to  111  connections,  a  decrease  of  41%95.  Whilst  certainly  an 
improvement,  111  separate  systems  still  cannot  be  considered  optimal.  Such  diverse 
systems  create  an  administrative  burden  for traders and carriers who  must  collect  the 
information several times and submit it to customs through dedicated IT systems96. 

today  e-commerce 

Equally, 
the  number  of 
represents  more 
traditional trade transactions  for  only  0.4 %  of  the  value97. This  high  number  of 
transactions  for  a  low  value  represents  a challenge for  economic  operators,  who  must 
comply with several reporting obligations per parcel98.  

twice 

than 

In  2024,  4.6  billion  low-value  items  were  imported  into  the  EU  –  equalling  12  million 
parcels per day. In addition, 17.5 million counterfeit articles were detained at the EU border 

93  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) 
94 SWD/2023/140 final 
95 SWD/2023/140 final 
96 SWD/2023/140 final 
97 Data from year 2022. 
98 SWD/2023/140 final 

90 

 
 
 
(in  2023)99.  The  growth  in  e-commerce  imports  directly  shipped  to  consumers  has 
increased competition, including between EU sellers and those located outside of the EU 
and targeting their offer at consumers in the EU. However, this competition can become 
unfair and hinder the level playing field for legitimate businesses.  

The  rapid  increase  of  e-commerce  also  raises  significant  challenges  for  citizens,  in 
particular  where  imported  products  may  be  non-compliant  with  EU  law.  For  example, 
around half of the fake products seized at EU borders that infringed intellectual property 
rights were purchased online. Even responsible consumers can give in the temptation of 
low  prices.  Education  on  the  downside  of  these  low-priced  goods  imported  must  be 
reinforced, as a surging volume of products that are unsafe, counterfeit or otherwise non-
compliant  leads  to  serious  safety  and  health  risks  for  consumers,  has  an  unsustainable 
impact on the environment, and fuels unfair competition for legitimate businesses, with a 
significant impact on EU competitiveness in different sectors.  

If  some  sellers  do  not  comply  with  EU  product  safety  and  consumer  protection 
requirements, they avoid costs for ensuring the necessary quality, safety of materials and 
proper record-keeping and reporting. This is also true for businesses that do not apply EU 
environmental  standards  or  circumvent  contributing  to  waste  management.  Compliant 
sellers, however, incur these costs from a comprehensive legal environment and are placed 
at an economic disadvantage compared to traders that do not follow the rules. 

1.3.  Taxation 

The complexity of dealing with 27 different tax systems in the EU hinder business growth 
and competitiveness by imposing significant compliance costs and administrative burdens 
on  companies,  particularly  small  and  medium-sized  enterprises,  which  may  struggle  to 
navigate  intricate  EU  and  national  regulations.  Variations  and  inconsistencies  in  tax 
policies across Member States can create uncertainty for businesses, discouraging cross-
border trade and investment, and ultimately affecting the region's overall competitiveness 
in  the  global  market.  This  context  may  lead  businesses  to  engage  in  tax  optimisation 
strategies that may divert resources away from innovation and productive activities. 

Over  the  recent  years,  the  political  agenda  has  been  increasingly  influenced  by  tax 
competition  between  countries  and  tax  avoidance  practices.  Those  phenomena  go  well 
beyond Member States’ borders and involve also third countries. It is expected from the 
Union to take action to fight tax fraud, evasion and avoidance as they distort competition, 
jeopardise the functioning of the single market and undermine social fairness. Moreover, 
tax  scandals  like  the  Cum/Ex  and  Cum/Cum100  have  shown  that  refund  procedures  in 
taxation can be abused101 & 102. Complexity of tax systems for economic operators lead to 

99 Fact sheet on the e-commerce communication - https://digital-strategy.ec.europa.eu/en/library/factsheet-
e-commerce-communication-february-2025 
100  European  Parliament  resolution  of  29  November  2018  on  the  cum-ex  scandal:  financial  crime  and 
loopholes in the current legal framework 
101These types of fraud were estimated to have led to €150 billion in losses between the years 2000 and 2020 
for a certain group of Member States. SWD (2023)216 final  
102   European Commission: Directorate-General for Taxation and Customs Union, Bonch-Osmolovskiy, M., 
Poniatowski, G., Braniff, L., Harrison, G. et al., VAT gap in the EU – 2024 report, Poniatowski, G.(editor), 
Publications Office of the European Union, 2024, https://data.europa.eu/doi/10.2778/2476549 

91 

 
 
 
 
administrative  burden  during  refund  procedures  which  are  often  lengthy,  costly  and 
cumbersome,  causing  frustration  for  investors  and  discourage  cross-border  investment 
within and into the EU. Tax procedures applied in each Member State can be very different, 
leading  to  different  forms  across  the  EU,  most  of  which  are  only  available  in  national 
languages.  

A  fragmented  regulatory  framework  has  failed  to  keep  pace  with  new  business  models 
leveraging technical opportunities and thus creating excessive administrative burden and 
compliance costs resulting in missed opportunities for the economic operators, linked with 
the IT systems, business automation and digitalisation. 

2.  CAPACITY  BUILDING,  ADMINISTRATIVE  AND  OPERATIONAL  COOPERATION 
AND  INTEGRATION  AMONG  MEMBER  STATES  AND  BETWEEN  MEMBER 
STATES AND THE EUROPEAN COMMISSION REMAINS SUBOPTIMAL.  

2.1. 

Single market 

To  foster  the  reinforcement  of  administrative  cooperation  and  integration,  training  and 
capacity-building  activities  are  conducted,  as  well  as  exchanges  of  expertise  and 
knowledge  for  EU-level  or  national  authorities.  Capacity  building  is  also  essential  to 
ensure the achievement of the Saving and Investments Union by providing support and 
training to Member States and local authorities. 

This involves capacity-building actions, promoting the share and re-use of solutions and 
trainings to businesses which benefit from support via public procurement actions and skill 
development.  For  example,  in  the  areas  of  single  market,  consumer  protection  training 
activities related to product safety, or on verification of compliance could benefit from a 
common core and branding. It also includes training for judges on competition law and 
anti-money  laundering,  businesses  peer  reviews  and  mutual  visits  for  product  Market 
Surveillance Authorities. 

Support  is  provided  to  organisations  in  charge  of  the  enforcement  of  EU  consumer 
protection laws, and the coordination of actions, while allowing exchange of expertise on 
product safety.  

Cooperation and partnerships within the European Statistical System allow to further 
enhance  its  capacity  and  deliver  high  quality  and  timely  statistics,  leveraging  new  data 
sources and technologies.  

Networks and platforms also facilitate cooperation between Member States and with the 
Commission. This includes networks in the field of competition (such as the European 
Competition  Network  and  the  International  Competition  Network),  market  surveillance 
and financial services to enable secured data exchange. As regards market surveillance, 
this also includes joint inspection actions fostering cooperation between authorities. The 
Internal  Market  Information  System  also  supports  administrative  cooperation  aimed  to 
implement EU rules in 20 policy areas of the single market. In addition, the Interoperable 
Europe Act and its governance aim to strengthen cooperation on improving cross-border 

European Commission: Directorate-General for Taxation and Customs Union, Poniatowski, G., Śmietanka, 
A. and Skowronek, A., VAT compliance gap due to Missing Trader Intra-Community (MTIC) fraud – Final 
report. 
2024, 
Publications 
https://data.europa.eu/doi/10.2778/6433841 

European 

Union, 

Office 

Phase 

the 

II, 

of 

92 

 
 
 
through 

services 

interoperability.  The  Beneficial  Ownership  Register 
public 
Interconnection  system  (BORIS)  and 
the  forthcoming  Bank  Account  Register 
Interconnection System (BARIS) are important tools to facilitate the flow of information 
for Member States’ anti-money laundering efforts and to counter terrorist financing.  

The  European  Consumer  Centres  Network  (ECC-Net),  in  addition  to  providing 
information, assists consumers in cross-border transactions, ADR bodies ensure access to 
efficient redress, while the Consumer Protection Cooperation (CPC) network and Safety 
Gate  enhance  cooperation  to  enable  effective  enforcement  of  consumer  law  and  single 
market surveillance.  

Various  digital  systems  are  used  for  the  cooperation  among  national  competent 
interoperable  or implemented 
authorities  and  with 
independently  due  to  different  legal  basis.  The  delivery  of  user-friendly  cross-border 
interoperable public services by seamless and secure data exchange [sharing] needs further 
development, along with access to digital solutions supporting Union’s policies.   

the  Commission,  often  not 

2.2.  Customs Union 

Sub-optimal  functioning  of  the  Customs  Union:  the  Customs  Union  and  the  customs 
authorities struggle in their mission to protect the EU and the internal market. 

•  Fragmented Customs Union governance structure  

The current governance structure is not fit for purpose. There are many layers of customs 
activity with  no strategic coherence between them.  The operational  management of the 
Customs Union is not coordinated, and its performance depends on the will of Member 
States to cooperate in addition to their implementation of the EU customs rules. 

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  Commission.  The  Lisbon  Treaty  established  that  the  Customs 
Union  is  an  exclusive  competence  of  the  EU  and  that  the  single  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.103  

The existing 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 

(103) 
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’. 

93 

 
 
 
been  put  in  place  for  better  operational  coordination  and  cooperation,  and  to  support 
more uniform implementation of the rules on the ground104. 

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.  

•  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  digitalisation.  From  2003,  there  is  the 
ambition of creating a simple and paperless environment for customs and trade105. 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.  

The figures show that the UCC digitalisation model, while bringing significant benefits 
and being therefore necessary to complete, remains complex and fragmented. The model 
provides  poor  data  quality  for  customs  hindering  the  accomplishment  of  its  mission, 
leading  to  divergent  implementation  of  the  customs  rules  and  high  administrative 
compliance costs for businesses as follows: 

−  The Union Customs Code sets a specific, normally national, IT system for each step of 
the process. 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. 

104 
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’   for performing 
these tasks. The Customs Control Equipment Instrument   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, also provides financing to 
facilitate  and  enhance  customs  cooperation  between  national  customs  authorities,  and  to  build  their 
administrative, human and information technology (IT) capacity.  
105 
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. 

94 

 
 
 
−  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)106. 

−  Maintaining  and  managing  these  parallel  IT  environments  is  costly  for  the  EU  and 
Member  States.  Any  change  or  adaptation  is  lengthy,  requiring  a  minimum  of  two 
years. 

−  From a personal data protection point of view, the UCC digitalisation model requires 
further reflection to ensure alignment with  the General Data Protection Regulation, 
where obligations for data controllers and processors are detailed, and the exercise of 
data subjects’ rights is fully harmonised.  

•  Member States diverge significantly in the application of the customs rules 

While the Customs Union exists for more than 50 years and is backed up by harmonised 
EU  legislation,  and  while  EU  funding  has  been  supporting  the  Customs Union  and  the 
national customs authorities to harmonise interpretation and unified results throughout the 
EU  (“acting  as  one”),  there  are  still  significant  variations  and  shortcomings  in  the 
interpretation  and  uniform  implementation  of  EU  law,  leading  to  market  distortion, 
hampering the EU’s financial interests, and allowing non-compliant operators to target EU 
points of entry with lower levels of controls. 

The  identified  problems  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 

106 

The data are in Annexes 23-01, 23-02 and 23-03 of the UCC Implementing Act. 

95 

 
 
 
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 response, on 17 May 2023 the Commission presented a proposal for an ambitious and 
comprehensive reform of the Customs Union. The aim is to simplify customs processes 
and  make  them  smarter  and  safer,  including  by  means  of  an  increased  use  of  artificial 
intelligence, a new EU Customs Authority, that would also manage the new the EU Data 
Hub.  

The EU funding is needed to support the functioning of the Customs Union including the 
development and operation of electronic systems and digital solutions and tools, the work 
of the customs authorities and the transition to the renewed EU Customs Union, on the 
basis of the agreement to be reached by the co-legislators on the Commission’s proposal 
on the Customs Union Reform. 

2.3.  Taxation 

Sub-optimal  functioning  of  the  internal  market:  national  tax  authorities  and  the  EU 
demonstrate inefficiency in their function to protect the financial and economic interests 
of the EU and its Member States and specifically to address tax fraud, tax evasion and tax 
avoidance, and to improve tax collection.   

•  Distortion of competition and lower revenues of Member States and the EU 

Businesses and citizens not paying their fair share results in lower revenues of Member 
States  and  the  EU.  It  also  leads  to  obstacles  in  the  single  market  and  distortion  of 
competition. In the context of the discussions and negotiations about the Commission’s 
proposal to revise the multiannual financial framework, the urgency for securing additional 
funding became clear, making it even more important to narrow tax gaps, fight fraud and 
ensure  optimal  revenue  collection.  Efficient  cooperation  and  exchange  of  tax  related 
information through secure digital systems are important elements to prevent and fight tax 
fraud and evasion, thereby protecting the financial interest of the Member States and the 
EU while ensuring an equal level playing field. 

The  number  of  tax  European  electronic  systems  (EES)  to  be  designed,  developed,  and 
operated is continuously increasing. Currently, there are around 30 operational EU-level 
digital tax systems including new commitments to reinforce fair taxation and to better fight 
fraud  in  the  single  market.    Work  to  deliver  software  architecture  templates  for  major 
systems in the field of direct and indirect taxation is ongoing. 

•  Obstacles in the functioning of the single market 

In the taxation domain, obstacles in the single market are often driven by differences in 
interpretation of EU taxation law and fragmented national tax systems. Despite years of 
work and progress made, differences in interpretation and fragmentations continue to arise. 
Ensuring  operational  and  administrative  cooperation  and  collaboration  between  tax 
authorities are important elements to ensure a common interpretation of EU tax law and 
find solutions for fragmented national tax systems in cross border situations. 

96 

 
 
The  challenges  of  legislative  fragmentation  and  different  interpretation  are  especially 
visible and urgent to address in implementation of legislation in VAT107, crypto currency 
assets108, withholding tax on dividend109, energy and environmental taxation110. 

• 

Insufficient capacity and insufficient cooperation of tax administrations and the EU 
The  EU  and  the  national  tax  administrations  suffer  from  insufficient  capacity  and 
insufficient cooperation, both within the EU as well as with third countries, to carry out 
their missions effectively and efficiently.  

The effect of an inadequate functioning of tax systems in the EU, which in turn jeopardises 
the functioning of the single market and the 4 freedoms, undermines social fairness and 
affects EU competitiveness because of its indirect effects: negative effect on tax bases (tax 
fraud,  erosion,  avoidance,  etc.)  and  subsequently  EU  and  national  budgets.  Existing, 
administrative  burden  falling  on  citizens  and  businesses  has  a  negative  impact  on 
competitive  positioning  of  EU,  leading  to  less  EU  companies  operating  across  external 
borders  and  foreign  companies are discouraged from entering and operating on the EU 
market. In addition, country operators may be unduly advantaged by the possibilities to 
avoid  for  example  VAT,  created  by  insufficient  cooperation  between  EU  tax 
administrations. 

In a globally  interconnected and digital transition  context, the need for cooperation has 
only grown stronger. This has also been demonstrated by the several legal instruments111 
for cooperation in different taxation areas in the EU. Contact on a (semi-) permanent basis 
allows Member States  to  see the full pictures of  cases which helps  to  prevent  disputes, 
double  taxation  and  provides  certainty  at  an  early  stage.  Some  examples  of  the  legal 
instruments  for  advanced  administrative  cooperations  available  to  Member  States  are 
multilateral  controls  and  presence  in  administrative  offices  and  participating  in 
administrative enquiries.  

The EU funding is needed to continue addressing above mentioned challenges and provide 
EU level solutions.  

107 VIDA Impact assessment SWD (2022) 393 final 
108 Council Directive (EU) 2023/2226 of 17 October 2023 amending Directive 2011/16/EU on administrative 
cooperation in the field of taxation (DAC8) 
109 Council Directive (EU) 2025/50 of 10 December 2024 on faster and safer relief of excess withholding 
taxes 
110 Proposal for a COUNCIL DIRECTIVE restructuring the  Union framework for the taxation of energy 
products and electricity (recast) COM/2021/563 final 
111 Council Regulation (EU) No 904/2010 of 7 October 2010 on administrative cooperation and combating 
fraud 
1).  ELI: 
tax 
http://data.europa.eu/eli/reg/2010/904/2021-07-01  
Council Regulation (EU) No 389/2012 of 2 May 2012 on administrative cooperation in the field of excise 
duties 
(OJ  L  121,  8.5.2012,  p.  1). 
(EC)  No  2073/2004 
repealing  Regulation 
ELI: http://data.europa.eu/eli/reg/2012/389/2023-02-13 
Council Directive 2011/16/EU of 15 February 2011 on administrative cooperation in the field of taxation 
and 
1). 
ELI: http://data.europa.eu/eli/dir/2011/16/2024-01-01 

77/799/EEC 

12.10.2010, 

11.3.2011, 

Directive 

repealing 

(OJ  L 

added 

value 

field 

268, 

(OJ 

and 

64, 

the 

of 

in 

p. 

p. 

L 

97 

 
 
 
2.4. 

 Union Anti-fraud   

The  current  programme  supports  anti-fraud  activities  of  Member  States  on  both  the 
expenditure and the revenue components of the Union budget. It combines the financing 
and  implementation  of  three  different,  previously  separated  activities  implemented  by 
OLAF: 1) the “Hercule” funding part (financial support to Member States for anti-fraud 
measures),  2)  the  Anti-Fraud  Information  System  (AFIS)  and  3)  the  Irregularity 
Management System (IMS). 

Due to their specific nature linked to the Commission’s operational activities in support of 
Member States, the work within AFIS and IMS would be considered indispensable. The 
AFIS component finances operational activities, necessary for independent investigation, 
while the IMS component finances the maintenance, development and user support of a 
system under the Commission.  

In addition, the fraud landscape is rapidly evolving, affecting both the expenditure and the 
revenue  components  of  the  Union  budget.  The  EU  should  continue  and  enhance  its 
financial support to Member States in developing and strengthening effective anti-fraud 
capacities, ensuring a sound and safe-guarded single market. 

3.  RULEMAKING, STANDARD-SETTING AND ENFORCEMENT AT EU LEVEL MAY 

HAMPER THEIR ADAPTABILITY 

3.1. 

Single market 

The effective functioning of the single market can be ensured through standardisation 
processes  for  which  support  is  to  be  provided.  This  concerns  notably  standard-setting 
efforts by European and international standardisation organisations and bodies involved in 
financial  and  non-financial  reporting  and  auditing,  or  statistical  standards  but  also  the 
contribution to the development of international standards. Ensuring that the EU continues 
to  be  a  global  standard-setter  in  terms  of  consumer  protection  and  product  safety  is 
essential.  The  development  of  new  standards  should  lead  to  a  more  efficient  and  well-
functioning single market supported by high-quality standards that are coherent with EU 
priorities, interests, and legislation. 

Authorities and bodies benefit from the financing of the development and maintenance 
of  facilities  and  Digital  tools  serving  supporting  rulemaking  and  enforcement.  It 
facilitates  case  management,  investigations,  and  document  storage  and  analysis,  as 
facilitate interaction among Member States. It facilitates the enforcement of EU law by 
providing  standardised  workflows  and  information  exchange  forms  for  authorities  in 
different scenarios where cross border cooperation is required, thus ensuring the rules are 
applied in a same way by all participants. In terms of enforcement of competition rules, 
forensic  IT  capacity  is  increasingly  crucial  in  gathering  potential  evidence  during 
inspections. Proof of anticompetitive conduct is by now predominantly found in electronic 
format and kept in places and maintained in a form which may facilitate that the proof is 
concealed. AI tools will also be crucial in the process of ensuring efficient discovery and 
the treatment of large bodies of evidence. The development of digital business solutions 
dedicated  to  modernising  case  management  and  the  secure  exchange  of  confidential 
information  will  continue  to  be  necessary  to  effectively  conduct  competition  cases. 

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Increasing the investigative capacity of the Commission112 in competition enforcement is 
thus necessary considering the increased complexity of competition cases.  The financing 
of  coordinated  actions  by  national  authorities  such  as  joint  enforcement  by  market 
surveillance authorities in case of unsafe/non-compliant products or supports joint actions 
of national consumer protection authorities in investigation and enforcement actions result 
in a decrease of unsafe products, disease outbreaks and respectively tackles widespread 
breaches  of  EU  consumer  laws.  In  the  field  of  consumer  protection,  the  CPC  Network 
facilitates  cooperation  and  information  sharing  between  national  consumer  protection 
authorities, enabling them to jointly address violations of consumer rights, including unfair 
practices, unsafe products, and fraud that affect consumers in multiple Member States113. 
It  plays  a  critical  part  in  enhancing  consumer  confidence  and  promoting  a  safer,  fairer 
market for all. 

Data  collection,  studies,  assessments,  and  evaluations  enable  data  gathering,  market 
analysis, and information dissemination activities, such as annual surveys, ad hoc projects 
and market reviews are necessary to support legislative revisions to the functioning of the 
single market. 

This is relevant for diverse policy areas regarding the single market, including consumer 
policy, consumer enforcement and redress and product safety.   

Flexibility is required in areas where standardisation is used to implement legislation, for 
instance, the absence of common budget lines for standardisation and food safety lead to a 
three-year delay in developing necessary standards following the entry into force of the 
Regulation on the placing on the market and use of feed. 

Through  financing  of  the  EU-coordinated  actions,  including  the  development  and 
modernisation of standards and methodologies, the European Statistical System (ESS) is 
inform 
strengthened,  gaining  further  efficiencies  and  high-quality  evidence 
policymaking is available. 

to 

Provision  of  services  and  expert  consultations  to  assist  enforcement  authorities  in  their 
duties on regular or occasional basis further increase the support of standards or conformity 
assessments and help to monitor the enforcement of EU law by Member States. This results 
in  improved  enforcement  capabilities  of  authorities  to  ensure  they  fulfil  their  duty 
associated  with  their  roles,  deriving  from  such  advice  and  expertise  or  membership  of 
international bodies. 

3.2.  Customs Union 

The effective implementation of customs legislation depends on Member States’ customs 
authorities  and  their  ability  to  overcome  challenges  related  to  risk  management  and 
cooperation with market surveillance authorities, law-enforcement authorities and bodies, 

112  And  through  reinforcement  of  the  Commission,  also  the  overall  reinforcement  of  the  European 
Competition Network, as resources can be pooled when it comes to using technology for better competition 
enforcement. 

113 The interim evaluation of the SMP found that during the period from 2020 to 2023, the CPC authorities 
cooperated on 752 mutual requests including 514 which required enforcement measures and issued 182 alerts 
of suspected business practices suspected to breach of consumer law. Furthermore, between 2021-2023 the 
CPC authorities, carried out over 20 joint enforcement actions against leading market players (e.g. Airbnb, 
Booking, WhatsApp, Google, TikTok, Amazon etc.) which have been successfully finalised and agreements 
on improvements reached with companies 

99 

 
 
 
tax  authorities and  other  partners.  Furthermore,  lack  of  effective  implementation  of 
customs legislations could result in the administrative burden for trade, difficulties in the 
performing  of  controls  on  e-commerce,  limited  data  quality  and  access,  as  well  as 
divergences of implementation between Member States114. 

The European Court of Auditors identified structural challenges on the risk management 
of financial risks115:  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.  

to 

risks 

where 

extends 

non-financial 

This 
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 
compliance116. 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. 

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.  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  report117 a  high  share  of  cases  where  customs stop goods 
but must release them again because the sectoral authority did not respond within the legal 
deadline118.   

Law  enforcement  in  these  circumstances  is  increasingly  challenging.  One  may  also 
question the fundamental flaw in the concept: Member States who are less strict in their 
controls and sanctioning may attract trade flows in their direction, potentially increasing 
the national revenues. At the same time, stronger controls and more severe sanctions and 
law enforcement measures may penalise even legitimate trade (e.g. slow down, additional 
administrative burden). 

114 COM(2023) 258 final 
115  ECA  special  report  No  4/2021 :  Customs  controls:  insufficient  harmonisation  hampers  EU  financial 
interests 
116 ‘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 
117 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 
118  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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3.3.  Taxation 

The fundamentals of tax systems and legislation in the Union had been conceptualised and 
introduced in and inherited from a pre-single market era. Their evolution faces resistance 
from the Member States who maintain their sovereignty and challenge any attempts for a 
more harmonised or streamlined approach. The approximation of tax law would support a 
more even level playing field in the Union and its enforcement could benefit from more 
coordinated cross-border control and audit opportunities.   

The table below offers an overview of the constitutive predecessor programmes.  

Programme/ 
Budget line  

Current 
MFF  

(EUR in 
million)  

Description  

The Single Market Programme (SMP) supports the well-
functioning  of  the  single  market  and  helps  protect  and 
empower citizens, consumers and businesses, including 
small and medium-sized enterprises (24% of the budget 
relates to SMEs). It assists the digitalisation of services 
and businesses and facilitates single market access and 
international  cooperation,  especially  in  the  areas  of 
company  law,  contract  and  extra-contractual  law,  anti-
money  laundering,  free  movement  of  capital,  financial 
services  and  competition,  consumer  protection  and 
product  safety.    It  also  contributes  to  a  high  level  of 
health  and  safety  for  humans,  animals  and  plants,  and 
supports  the  improvement  of  animal  welfare,  the  fight 
against antimicrobial resistance and the development of 
sustainable food production and consumption (the major 
share with 40% of the SMP budget).  

Contributing to all pillars, the programme supports the 
development, production and dissemination of European 
statistics on all EU policies (13% share). 

The Customs programme supports the development and 
operation of central EU information technology systems 
for  customs.  It  facilitates  collaborative  activities 
between  customs  officials,  including  the  exchange  of 
good practices and knowledge in customs policy and law 
and  their  practical  implementation.  The  programme  is 
restricted  to  customs  authorities  in  the  EU  and  in  the 
eligible  non-EU  countries.  The  programme  facilitates 
the  work  of  customs  administrations  in  dealing  with 
increasing 
trends  and 
trade  flows  and  emerging 
technologies,  such  as  e-commerce  and  blockchain.  It 

Single  market 
Programme 

4350119 

Customs 
programme 

950 

119 This figure represents the total budget of the SMP including SMEs, and Food and Feed pillars. 

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Customs 
Control 
Equipment 
Instrument 

1006 

Fiscalis 
programme 

269 

Anti-

Union 
Fraud 
Programme 

181 

Total   

6756 

provides  for  better  response  to  security  threats  and 
contributes to the financial and economic interests of the 
European Union and its Member States. 

The  Customs  Control  Equipment  Instrument  (CCEI) 
supports  Member  States  to  reinforce  their  customs 
control capacities with state-of-the-art equipment with a 
view to contributing to adequate and equivalent results 
of  customs  controls.  The  CCEI  specifically  provides 
financial support to the customs authorities of European 
Union  Member  States  for  the  transparent  purchase, 
maintenance and upgrade of customs control equipment.  

The  Fiscalis  programme  focuses  on  supporting  tax 
authorities  in  order  to  enhance  the  functioning  of  the 
single market, to foster the competitiveness of the Union 
and  fair  competition  in  the  Union  and  to  protect  the 
financial  and  economic  interests  of  the  Union  and  its 
Member States, including protecting those interests from 
tax fraud, tax evasion and tax avoidance, and to improve 
tax collection. 

It supports the development and operation of central EU 
information  technology  systems  for  taxation.  It  also 
supports  the  relevant  authorities  in  the  implementation 
of  the  EU  taxation  law  by  ensuring  exchange  of 
information,  supporting  administrative  and  project-
based cooperation as well as human capacity building, 
and helping to  reduce the administrative burden  of tax 
authorities  and  compliance  costs  for  taxpayers  when 
needed. 

The  Union  Anti-Fraud  programme  supports 
the 
prevention of and the combat against fraud, corruption 
and  any  other  illegal  activities  affecting  the  financial 
interests of the EU. It addressed both the expenditure and 
the  revenue  components  of  the  fight  against  fraud 
affecting the Union’s budget. Through its three strands, 
it  helps  Member  States  and  beneficiaries  fight  fraud 
through  financial  support  for  advanced  operational 
equipment  and 
tools  and  by  organising  mutual 
administrative  assistance  and  cooperation  in  customs 
and  agricultural  matters,  notably  via  the  Anti-Fraud 
Information  System 
Irregularity 
Management System (IMS). 

(AFIS)  and 

the 

102