Taking the EU Customs Union to the next level: innovative ideas for a modern and efficient Customs Union presented by Wise Persons Group

Taking the EU Customs Union to the next level: innovative ideas for a modern and efficient Customs Union presented by Wise Persons Group

The Wise Persons Group on Challenges Facing the Customs Union (WPG) has today presented a report that will feed into a wide, inter-institutional debate on the future of the EU Customs Union. The WPG was appointed by Commissioner Paolo Gentiloni in September last year to propose innovative solutions for the most pressing issues faced by the Customs Union.

The report concludes that the Customs Union needs to be better prepared to address forthcoming challenges, such as growing trade volumes and new trade models, technological developments, the green transition, the evolving geopolitical context and security risks.

The WPG proposed 10 sets of measures to be implemented by 2030:

  • package of reforms, relating to processes, responsibilities, liabilities, and governance of the Customs Union.
  • new approach to data aiming to diminish reliance on customs declarations, obtain better quality data from commercial sources, and provide businesses with a single data entry point for customs formalities.
  • A comprehensive framework for cooperation, enabling better data sharing across the Customs Union, with the involvement of market surveillance authorities, law enforcement bodies and tax authorities.
  • Setting up a European Customs Agency to complement the role of the Commission and support the work of Member States.
  • Reforming and expanding the Authorised Economic Operator scheme.
  • new framework of responsibility and trust, in which businesses would seek Authorised Economic Operators status to gain commercial access to the EU market. Small non-commercial consignments would continue to be sent through the usual processes, but without priority and subject to a level of control that reflects their “non-trusted” status.
  • No more customs duty exemption threshold of 150 for e-commerce, together with simplified rates for low value shipments.
  • A package of measures to green EU customs, digitalise procedures, ensure that prohibitions and restrictions related to sustainability are properly implemented on imported products, as well as possibly reform the World Customs Organization Harmonized System Nomenclature to allow for the proper classification of environmentally friendly products that the EU wants to promote in international trade.
  • Properly resourcing, upskilling and equipping customs administrations, to ensure their full capacity to fulfil their missions.
  • An annual estimate of the Customs Revenue Gap to better manage customs revenue collection.

Paolo Gentiloni, Commissioner for Economy, said: “First the pandemic and now the invasion of Ukraine have highlighted the essential role played by EU customs in crisis management. Today, customs authorities are facilitating the provision of humanitarian support and ensuring that the sanctions imposed on Russia are properly implemented. Efficient customs clearance and controls are vital to protecting EU citizens and businesses, while at the same time enabling legitimate trade, which is crucial to growth and jobs. These proposals will be of great support in making our Customs Union ready for the challenges of the future.”

Arancha González Laya, Chair of the Wise Persons’ Group said: “This report calls for an urgent structural change of the way European customs are organised and equipped. A strong Customs Union with a protective “one external border” is essential to Europe’s strategic autonomy, to its trade might and to its security and defence ambitionsStanding still would effectively mean less protection to European citizens, less competitiveness for European businesses and less security for the EU.”

The WPG’s report also identified the lack of a common list of prohibitions and restrictions legislation as a serious problem, as it leads to divergent approaches and practices across Member States. To address this issue, the Commission has today published a compilation of the existing prohibitions and restrictions at EU level. This should serve as a practical instrument for the EU institutions and national authorities, as well as other interested stakeholders.

Next steps

The recommendations of the WPG will now be discussed with the European Parliament and Member States. As announced in the 2020 Customs Action Plan, the Commission will set up a ‘Reflection Group’, involving Member States, to debate and operationalise the recommendations. Based on this input, and on broader consultations with stakeholders, the Commission will table a customs reform package by the end of the year.

Background

The Customs Union is a cornerstone of the Single Market. It keeps EU borders safe, protects our citizens from prohibited and dangerous goods such as weapons, drugs, dangerous toys and environmentally-harmful products, and facilitates business with the rest of the world. 

The EU accounts for 15% of the world trade. In 2020, the value of the EU trade with other countries amounted to €3.7 trillion. To manage this volume of international trade in 2020, more than 2,000 EU customs offices, working 24 hours a day and 365 days a year, handled the import, export or transit of over 1,069 million articles. The amount of customs duties collected in 2020 reached €24.8 billion.

The WPG is an independent, high-level group, comprised of members from politics, industry, trade and academia. It prepared the report in full independence, having spent several months examining customs from all angles and consulting with stakeholders at EU, national and international level. The full list of members is available online.

Source: EU Customs Union: report by the Wise Persons Group (europa.eu)

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