At the beginning of the 21st century, customs worldwide were, in the European Commission's opinion, facing a rapidly changing environment including evolving production and consumption patterns, increasing international trade, global threats such as terrorism, organised crime and environmental degradation and growing hazards from trade in dangerous goods. The Commission's response was to launch an ambitious reform programme. Paul Clarke reports.

"In a nutshell, one could say that the entire paradigm of customs in the EU has changed in the last two decades or so. Apart from the obvious global phenomena of globalisation and growth of global trade, there have been both evolutionary and revolutionary changes in the environment and expectations for EU customs." Thid was the view of EU Customs Commissioner Algirdas Šemeta speaking in September 2010 about the challenges of an evolving Customs Union. He was speaking particularly about the Future Customs Initiative (FCI), a strategic framework for improving working methods, assessing the overall functioning of the EU's Customs Union and the needs of Member States for resources, training and equipment.

Future Customs Initiative

The Modernised Customs Code was adopted by way of Regulation 450/2008 and then the e-Customs Decision (70/2008/EC) set the basis for the creation of a paperless environment for customs and trade. This second stage aimed at building a robust communication chain between all EU customs offices, between customs and other public authorities involved in trade in goods, and between customs authorities and traders.

The reform process was co-ordinated by way of the 2008 European Commission Communication on a Strategy for the Evolution of the Customs Union (http://bit.ly/zeFO0W) from 2008 to 2013, which heralded the arrival of the FCI.

Strategy

The Customs Union's strategic objectives are:

  • protecting the EU

  • supporting the Union's competitiveness.

These objectives are to be fulfilled by applying effective control, and by co-operating closely among the customs administrations and with business, as well as with international partners. Since the adoption of the Strategy in 2008, significant developments have taken place, not least the financial and economic crisis, the globalisation of terrorist threats and a number of natural and man-made disasters. The Lisbon Treaty has entered into force and the Union has set itself a new political agenda to support growth and enhance security. These developments are, the Commission suggests in its December 2011 progress report, all influencing the way the Customs Union operates.

Progress to date

The evolution of the total number of customs declarations submitted exhibited a growing long term trend between 2007 and 2011 (despite the economic crisis). Since 2010 the Custom Union has served nearly three million clients and, by 25 October 2011, it had recorded 11,867 applications for the trusted trader status of Authorised Economic Operator (AEO), of which 8072 were granted as of that date. Despite this growing workload, resources have decreased significantly. Between 2007 and 2010, the number of customs staff in the Member State administrations went down by 13%, and continues to decrease.

Partly, this reduction may be accounted for, during the period 2008 to 2011, by the fact that the rate of electronic input increased, mainly for export, due to the deployment of the trans-European Export Control System (ECS) which involved computerisation of export in all Member States. During the same period, the implementation of the "security amendment" of the Customs Code (CC) demanded significant effort from the national customs authorities. In particular it required development of new national IT systems, including the Import Control System (ICS) to receive and process the new required entry summary declarations, as well as upgrading of the New Computerised Transit System (NCTS) and ECS.

Furthermore, the amendment required the development or upgrade of national risk analysis systems in order to implement the Common Customs Risk Management Framework (CRMF), supported by the central Common Customs Risk Management System (CRMS).

Facilitating trade

The adoption of the Modernised Customs Code opened another huge project. Taking into account the lessons learned from implementing the security amendment, as well as the difficulties arising from the financial/economic crises both for Member States and traders in deploying ever larger investments (much more than for the security amendment), the need has been recognised to meticulously describe and analyse all customs business processes (and to propose their correction/amendment whenever necessary). Furthermore, it has been understood that new IT architecture has to be defined with a view to enabling the use of available new technologies that can provide savings both for Member States and traders (for example through economies of scale at EU level).

These insights, as well as the consequences of the 2010 Lisbon Treaty, led to a decision to recast the Code. This will introduce amendments that have been revealed to be necessary from the business process analysis undertaken for the drafting of implementing provisions. Pending the Code's implementation, which will be delayed by the recasting, measures such as the creation of the single authorisation for simplified procedures (SASP) were adopted.

What next for Customs Union

The Commission argues, in its progress report, that those involved must work together more closely over the closing years of the Strategy period and innovate in terms of enabling mechanisms, in particular at operational level and in areas where resources are particularly scarce (safety and security, risk management). Resolving some of the resource gaps in these areas, with a combination of enhanced EU support and pooling of specialist resources among Member States, could, it argues, enable not only more effective protection but the spread of state-of–the-art working methods that contribute also to lessening administrative burden and facilitating trade for legitimate businesses.

Overall the Commission concludes that the strategic objectives of the Customs Union as defined in 2008 are still valid and relevant. It does however want to see a broader strategic approach to cooperation with international partners in the areas of security, health, safety and the environment. It also calls for greater sharing of capacities and capabilities between Member States and between those States and the Commission itself, in order to improve efficiency, effectiveness and uniformity and realise economies of scale.

Last reviewed 17 January 2012