Analysis: “The action plan for the customs union” by Darya Budova
On 28 September 2020 the European Commission adopted an Action Plan for Taking the Customs Union to the Next Level (COM(2020) 581 final). The actions outlined in this plan aim at achieving an EU Customs Union where customs authorities: operate as one to protect society, the environment and the EU economy through effective facilitation of legitimate trade and intelligent, risk-based supervision of supply chains; are proactive, working seamlessly with stakeholders, are committed to innovations and sustainability and present the reference for customs worldwide.
The different actions are grouped under four headings: risk management, managing e-commerce, the promotion of compliance and customs authorities acting as one. An important part of them refers to the way customs authorities operate, in matters such as data collection and analysis, exchange of information, the fight against fraud and so on. Other initiatives, however, appear to have a more immediate impact on economic operators. The latter actions are addressed below.
(1) The Commission proposes several initiatives to manage challenges of e-commerce also from the customs perspective, in line with the VAT e-commerce package. The Commission wants to give customs authorities access to the information collected by tax authorities for VAT purposes and explore the imposition of customs-specific reporting obligations on online marketplaces. The aim is to access the data showing entire sales chains, from the original seller, via the transactional value, to the final-end buyer, that the platforms have and would have to share. This information would supplement the information provided in customs declaration and could enhance customs and tax actions against fraudulent activities. The Commission also promises to explore simplified and online arrangements for duties collection on e-commerce imports, in line with the new VAT collection approach (Import One-Stop Shop). The time period set for these initiatives is 2020 to 2024.
(2) The Commission also wants to analyse and enhance the EU’s international systems of cooperation and mutual administrative assistance with its main trading partners. The priority in this context is to improve cooperation and mutual administrative assistance with China, given the size of bilateral trade and the exponential growth of e-commerce in particular.
(3) The Commission committed to deliver a legislative proposal for an EU Single Window environment for Customs by the end of 2020. The Single Window would allow economic operators to complete all border formalities, for customs and for other purposes such as health, environment, product and food safety and security, in one electronic action and enjoy a speedier border clearance of goods at import and export. At the same time, the system would allow collaborative processing, sharing and exchange of information and better risk assessment for the customs authorities.
(4) The Commission, in collaboration with Member States, is reviewing the EU Authorised Economic Operator (AEO) programme (that allows simplifications in customs formalities and security checks in exchange for previous background checks and further monitoring). It will possibly propose legislation imposing a more precise obligation on Member States to continuously monitor AEOs, which would most probably entail, in practice, more controls for economic operators. The Commission also commits to updating the AEO guidelines.
(5) The EU customs legislation sets very general guidelines regarding customs infringements and sanctions, such as that penalties shall be effective, proportionate and dissuasive and may take the form of pecuniary charge or revocation, suspension or amendment of authorisations (Article 42 of the Union Customs Code). With the support of Member States the Commission will draw up an updated comprehensive report on the individual systems of penalties in each Member State and establish guidelines for the application of the criteria on the effectiveness, proportionality and dissuasive nature of the penalties. These works may lead to a legislative proposal.
No doubt this is an ambitious action plan that will bring new tools for the EU customs authorities to build a stronger Customs Union, better assess risks and facilitate legitimate trade.
Darya Budova is a practising attorney in law at an international law firm, and is specialised in tax disputes and EU tax law, with expertise in taxation in international trade.