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European Custom Law

The Customs Union is one the bases of the European Union and an essential element in the functioning of the unified market. The unified market can only function when there is a common application of common rules at its external borders. This implies that the 27 Customs administrations of the EU must act, as they were one.

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These common rules go beyond the Customs Union as such, and extend to all aspects of trade policy, such as preferential trade, health, environmental control, the protection of EU economic interests and the management of external relations.

The creation of a customs union in the European Economic Community in 1968 was implemented internally through the abolition of customs duties, quantitative restrictions and measures having equivalent effect between Member States and, on the external front, through the introduction of a common customs tariff and a common commercial policy. In fact, goods imported from third countries had to be treated in the same way by all Member States in order to circulate freely in the customs union.

But the customs union itself had to be integrated into the existing international economic order, regulated by the 1948 General Agreement on Tariffs and Trade. On the EEC Treaty the Member States declared that in creating a customs union, they intended to contribute, in accordance with the common interest, to a harmonious development of world trade, a gradual removal of restrictions to international trade and the lowering of customs barriers. The creation of the customs union has led to strong growth in intra-Community trade, but the Community has not become insolated.

Instead, it has developed into the world’s biggest importer and exporter. In addition, the rules of the GATT and the various international agreements created under their influence, formed the legal basis for the EU’s own commercial policy instruments and action, notably in the field of tariffs, the application of safeguard measures, anti-dumping and anti-subsidies actions. The European Union can introduce surveillance and safeguard measures in the framework of the common rules for imports when imports at prices viewed as normal are causing or risk causing serious injury to European producers.

In cases where the export price is lower than the normal value of a like product (dumping), the EU can take trade protection measures, notably through the application of anti-dumping duties. European rules being compatible with those of the World Trade Organization, economic operators must comply with only one set of rules for imports into the EU These rules apply automatically in the new States acceding to the EU. The Member States of the European Union no longer have an independent foreign trade policy.

More than 60% of their trade is intra-European and as such it depends on the rules of the single market that prohibit any trade protection or trade promotion measures. For the remaining 40% of their trade, the main instruments of commercial policy, the Common Customs Tariff, the common import arrangements and the common protective measures are in the hands of the organs of the EU, the Commission and the Council. Together they contribute to ensuring an even competition playing field for European businesses, giving them access to equal prices for imported raw materials and other products they need.

At the same time, the common commercial policy facilitates the work of European importers who can use a uniform import license, valid throughout the EU. Mission statement of Customs authorities:The European Commission website on its Taxation and Union section states:“Customs authorities shall be primarily responsible for supervision of the Community’s international trade, thereby contributing to fair and open trade, to implementation of the external aspects of the internal market, of the common trade policy and of the other common Community policies having a bearing on trade, and to overall supply chain security.

Customs authorities shall put in place measures aimed, in particular, at:a. Protecting the financial interests of the Community and its Member States;b. Protecting the Community from unfair and illegal trade while supporting legitimate business activity;c. Ensuring the security and safety of the Community and its residents, and protection of the environment, where appropriate in close cooperation with other authorities;d. Maintaining a proper balance between customs controls and facilitation of legitimate trade. The two faces of customsCustoms services in the EU play a dual role. Customs officers still act as collectors of customs levying import duties and taxes but increasingly they also work as “watchdogs” securing the Union’s external borders to protect citizens’ health and safety. Checks to enforce security and safety rules can only be performed at the EU’s external borders. It is inevitable that certain cargo shipments, which could pose a risk to the safety or security of the EU and its citizens, must be stopped and checked.

These checks are different from the task of levying import duties, which customs authorities can perform at a later stage along the supply chain, for example on the premises of the importer or exporter, to avoid congestion at the EU’s external borders. The watchdogBorder checks to guarantee the safety and security of European citizens are performed by customs officers in close cooperation with other border agencies, such as veterinary and product safety authorities. Two particular causes of concern for customs authorities with respect to health and safety are counterfeit goods and drug precursors.

The collector of customsEvery shipment of goods, which enters the European Union, has to be declared to customs. On the basis of the customs declarations, customs officers check the shipment and levy the import duties and taxes due. In 2007, import duties totaling over €15 billion were levied, which is equivalent to 13. 2% of the revenue side of the EU budget (Garcia, 2012)Application of Common Customs Tariff:A customs union is characterized by the existence of a single external tariff applied by all Member States to imports coming from third countries.

Such imports only have to clear customs once and can then move freely within the common customs area. Reaching an agreement among the original Member States on a single external tariff required a complex striking of balances and compromises, given the different national interests, stemming from the different products that each country wished to protect. The common customs tariff (CCT) adopted by the European institutions in 1968 is, therefore, a major achievement of European integration (Article 28 TFEU, ex Article 23 TEC).

For the member countries, the CCT meant both the loss of customs revenue, which, since 1975, has been a resource of the Community/Union budget, and the option of carrying out an independent customs or trade policy. No member country can unilaterally decide on or negotiate tariff matters; all changes to the CCT are decided by the Council following negotiation (if necessary) and proposal by the Commission. All bilateral (between the EU and non-member countries) and multilateral negotiations are carried out by the Commission.

As of 1968, the Member States are not entitled to unilaterally carry out customs policy, i. e. suspend customs duties or change CCT. Only the Council can waive the normal application of CCT by means of regulations adopting various tariff measures. Such measures, whether required under agreements or introduced unilaterally, involve reductions in customs duties or zero-rating in respect of some or all imports of a given product in the territory of the European Union. They take the form of EU tariff quotas, tariff ceilings or total or partial suspension of duties.

Modernized Customs Code: Customs authorities today, faced with this rapidly changing and challenging environment, must ensure that they continue to provide a first-class service to EU citizens and companies. A central pillar of the MCC is the concept of centralized clearance, which makes it possible for authorized EU traders to declare goods electronically and pay their customs duties and value-added tax (VAT) at the place where their business is established, irrespective of the member state where the goods are presented.

Centralized clearance builds upon the current practice of Single Authorization for Simplified Procedures. The current draft of the MCCIP, however, requires that traders send the required customs clearance information to multiple member states. Basically, where the customs office designated for the lodging of customs declarations (i. e. , supervising customs office) is in a different member state than the customs office that receives the physical goods (i. e. customs office of presentation/importation), the importer must provide the entry information to the customs offices in both member states as well as the member state where the VAT is due.

The modernisation and simplification of the customs legal and technological environment started several years ago with a major amendment to the Community Customs Code adopted in 2005, which gave EU customs authorities the powers to implement some of the most advanced security requirements in the world, while creating an environment that does not disrupt legitimate trade. This amendment is expected to be fully mplemented by mid 2016. The Modernized Customs Code will, when fully implemented, provide the necessary simplifications to make customs and trade work better, faster and cheaper. The Electronic Customs Decision already provides a significant step forward in linking national customs Information and Communication Technology systems, benefiting both customs and trade. By meeting the needs of modern logistics, a pan-European electronic customs will increase the competitiveness of companies doing business in Europe, reduce compliance costs and improve security at the EU borders.

The proposal to amend the mutual administrative assistance provisions in customs matters will streamline and improve the current IT systems and enhance capacity in the fight against fraud in the customs sector. These are important legal and technological steps that will prepare European customs both for the immediate and the medium term future. Electronic Customs are a significant development for the E. U. Customs that aims to provide interoperable customs systems, accessible to economic operators throughout the Community by replacing paper-based customs procedures with similar declarations in electronic form across the entire E. U. , thus creating a more efficient, simpler and modern customs environment. The electronic office is a very important development for the E. U. Customs. Its aim is to provide interoperable customs systems, accessible to economic operators throughout the Community, in order to replace the current paper-based customs procedures, with similar declarations in electronic form throughout the entire E. U. , thus creating a more efficient, simpler and modern customs environment.

Trade facilitation and security strengthen at external E. U. borders are the twin goals of this project. Specifically, this initiative aims to * Make easier the movement and control of goods to and from the internal market through efficient import and export procedures. * Increase the competitiveness of European trade, by reducing compliance and administrative costs as well as to speed up clearance times. * Facilitate legitimate trade through a coordinated and common approach of goods control.