On 17 May 2023, the European Commission published its proposals to reform and modernise the Union Customs Code. These proposals follow years of discussions and calls for a structural change to the Union Customs Code, which was no longer adequate to meet new challenges and contained weaknesses that led to the emergence of obstacles to the proper functioning of the Customs Union and the internal market. The proposals intend to simplify the Union Customs Code, reduce the administrative burden on operators, strengthened customs supervision, centralise IT and data functions, level e-commerce with traditional trade and facilitate a uniform implementation of customs rules in all member states.
In short, the reform aims to “take the Customs Union to the next level” and prepare the Customs Union for the future. To tackle these current (and future) issues, the proposals implement the following three pillars: (i) a new partnership with business; (ii) a smarter approach to customs checks; and (iii) a more modern approach to e-commerce.
We highlight below 10 key features of these proposals that support these three pillars:
- The creation of a European Union (EU) Customs Authority
- The creation of an EU Customs Data Hub (a single EU interface) that will mark (the beginning of) the end of a system based on customs declarations
- A supply chain-focused approach by customs, imposing additional responsibilities and information requirements on different actors throughout the supply chain
- The addition of definitions in the Union Customs Code (e.g., ‘importer’, ‘exporter’ and “prohibitions and restrictions”)
- The introduction of the ‘deemed importer’ for distance sales, making online platforms key actors in customs compliance
- The introduction of ‘trust and check traders’ (in addition to the AEO status)
- For low-value goods (€150 or less), the removal of the duty exemption and the simplification of customs duty calculation (the ‘4-bucket method’ – reducing the customs duty categories down to only four)
- The harmonisation of infringements and minimum sanctions on an EU level
- The conferral of additional powers upon the European Commission regarding the evidence of the customs representatives’ empowerment
- The inclusion of all binding information decisions (BTI, BOI and BVI) in the same legal act (the Union Customs Code), subject to the same procedure and rules
Altogether, this European Commission proposal would make EU Customs fit for a greener, more digital era and contribute to a safer and more competitive single market, according to EU President von der Leyen.
Now that this proposal has been officially published, the European Council and Parliament need to adopt their positions so that an agreement is reached by both co-legislators on the final legal text under the brokerage of the European Commission (a process known as a trilogue). This is expected in the second half of 2024 or early 2025. Much could change in the final text, and the coming months and years will be rich in opportunities for stakeholders to make their views and concerns known.
You can view all proposals and related documents.
If you have any questions about this reform, our international trade law team is here to help.