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EU UCC – Developments and Trade Facilitation

Fredrik MogrenLegislative officer

for Philip Kermode, European Commission Director Customs

DG TAXUD

29 March 2019Rotterdam School of Management

Erasmus University

Role of customs

• Protecting the financial interests of the EU & Member States • Protecting the EU from unfair and illegal trade (e.g. counterfeit,

firearms, smuggled cultural goods, endangered species) while supporting legitimate business activity

• Ensuring the security and safety of the EU, and protection of the environment, where appropriate in close cooperation with other agencies (e.g. phytosanitary, environment, agriculture)

• Balancing customs controls with trade facilitation

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EU customs and trade facilitation• Over 2000 EU customs offices, many operating 24

hours per day and 365 days a year • 9 customs declarations and over 100,000 EUR of value

handled per second in EU• 99% of customs declarations now made electronically• Even customs declarations submitted under standard

procedure (i.e. where no simplified procedures are availed of) generally cleared within 1 hour (93% in 2016).

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UCC – some key elements for trade Full automation/total shift to paperless via 17 new/ upgraded IT systems (14 trans-European; 3 national) More simplification, efficiency and speed EU wide common implementation Fit for purpose customs rules Reinforce AEO status: benefits for obligations WTO Trade Facilitation Agreement fully reflected

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Why did we decide to adopt the UCC?

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Some reasons• Adapt regulation to trade realities and modern

reporting and communication tools• Strengthen legal certainty and predictability• Protect financial interests of EU and Member States• Join up customs across the EU and implement the

same way • Adaptation of customs rules to Lisbon Treaty

requirements (Delegated Acts and Implementing Acts)

UCC Legal Architecture

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Implementing Act and Work Programme –

“how”

Delegated Acts-

“what”

Basic Act –UCC-

Core principlesCOM Proposal

Co-decision byEP and Council

Discussed in theCustoms Expert

GroupCOM adopts EP/Council may

object adoption

Customs CodeCommitte votes COM adopts

EP/Council "general" right of

scrutiny

UCC Calendar

• 9/10/2013: Adoption of the UCC• 29/04/2014: Adoption of the Work Programme (IT)• 1/5/2016: Application of the Code and beginning of work of

developing electronic systems for the application of the procedures which depend on IT systems

• 1/5/2019: Deadline for reassessment of authorisations under the old Code

• 31/12/2020 (soon 2025): Deadline for implementation of IT systems and end of the transitional period

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IT transition• UCC Work Programme foresees 17 new or

updated IT systems for the completion of customs formalities

• Transitional rules apply while the IT systems are not yet operational: these allow continued use of existing versions of IT systems (e.g. transit) and some paper-based systems

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Proposals to modify the UCC

• In April 2018, the Commission proposed to amend the UCC to postpone from 2020 to 2025 the deadline for completion of 7 of the UCC trans-European electronic systems

• Compromise agreed by EP and Council allows until 2022 for 3 national systems plus annual progress report

• Adopted by EP on 13 March and expected adoption by Council on 9 April

• Signature, publication and adoption to follow9

Reasons for needing more time• 2020 was always an ambitious date, linked to the MFF

2014-2020. Both trade and MS expressed wish for a longer/more orderly introduction of the systems.

• Delay in adopting legal rules for the design of the IT systems (UCC Delegated & Implementing Acts)

• Data harmonisation difficulties: introducing new data elements requires a full reprogramming of existing IT systems

• Sequencing: the systems are closely interlinked and need to be introduced in the right order

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New UCC IT planning until 2025

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2025

8. PoUS

9. NCTS (update) (Phase 5 & Phase 6)

10. AES (update)

12. Special Procedures

13. NA, PN, TS

14. Nat. Import System

16. GUM

17. ICS 2 (update)

1. REX

2. BTI

3. Customs Decisions4. Digital Signature

5. AEO

6. EORI 2

7. SURV 3

11. INF

2017 2018 2019 2020 2021 2022 2023 2024

15. CCI Phase 1 & Phase 2

No major negative impact on the customs union• Continued use of the existing version of some IT systems (e.g. transit) and of some paper based procedures • Progressive introduction of elements of postponed systems: Harmonisation of entry summary declarations by 2021

& export and transit declarations by 2023 Automated monitoring of the use of comprehensive

guarantees by 2024 Automated Centralised Clearance will progressively be

possible between 2021 and 202512

Implications of the postponement

Other UCC package amendments • Amendment to the UCC to bring Campione d’Italia into the

EU customs territory and to make some other technical amendments – to enter into force shortly

• Amendment to UCC Delegated Act to synchronise obligation to declare low value consignments with the new VAT rules for E-commerce to be implemented from 1/1/2021 – adopted by COM and now with EP and Council for scrutiny

• Amendments to UCC Implementing Act – to implement customs reporting obligations required under the new VAT rules for e-commerce and rules to prevent abuse of Customs Procedure 42/62 – under preparation13

i) UCC benefits for trade - AEO specific• Customs simplifications (e.g. Centralised Clearance,

EIDR, Self-Assessment, Guarantee waivers/reductions)• Fewer physical and document based controls• Prior notification of controls, priority in the carrying out of

controls and choice of place of controls• Recognition in other countries under mutual recognition

agreements • Customs representatives with AEO status can provide

their services in all Member States14

ii) UCC benefits for trade (contd.)• EIDR (Entry into Declarants' Records): for reliable

traders, customs may accept company records for declarations

• Reductions of guarantees if some AEO criteria fulfilled• IT changes (particularly Centralised Clearance)• More uniform application by MS of customs rules• Simplified rules on use of customs procedures (inward

processing, outward processing etc.) • Requirement for customs to maintain regular dialogue

with economic operators and take views into account15

International cooperation

• EU very active at international level to ensureinternational agreement on balancing trade facilitationwith customs controls

• Common international standards, agreed atorganisations such as the WTO, WCO, UPU and ICAO,will help lower costs/burdens for genuine economicoperators

• Work is ongoing on enlarging the network of agreementson customs cooperation and mutual assistance withother countries 16

Upcoming work to facilitate trade

• E-manifest pilot – work with "DG MOVE" colleagues in COM on harmonisation of all maritime reporting formalities including customs

• Creation of a Single Window environment

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The challenges ahead (1)

• Gearing up the IT challenge both in Trade, MS and COM

• Delivering common implementation in all MS• Fleshing out the new simplifications while

guaranteeing control effectiveness• Ensuring the continuing label of quality that is AEO

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The challenges ahead (2)

• Continuing and reinforcing co-operation between all

stakeholders• Strengthening synergy between tax and customs• Focussing on governance of the Customs

Union to make for seamless interaction and co-operation

• Interacting with the wider world to ensure moreeffectiveness in customs processes across the

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Conclusion• Consultation is key – trade representatives at

meetings with MS where updates to UCC package discussed contribute significantly to good solutions

• Cooperation with AEOs and trusted traders key to helping customs manage EU’s borders – win-win arrangement

• Need to be flexible and re-assess in the light of new developments - tackle problems quickly

• Importance of guidance, on which trade also consulted, help common interpretation/implementation

• Transparency applies in EU customs! 20

Thank you

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