EU Customs Policy Developments Supply chain security a case study

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European Commission /

Taxation and Customs Union

Manuela CabralEuropean Commission

EU Customs Policy Developments

Supply chain security a case study

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EC APPROACH ON CUSTOMS POLICYEC APPROACH ON CUSTOMS POLICY

• WHY Community approach?

– The Customs union (1968)– The Single Market (1993)– Free circulation of goods, persons, services and

capital– One external frontier supervised by 27 customs

administrations

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Aim of EU customs policyAim of EU customs policy

THE CUSTOMS UNION is a foundation of the EUo Nearly 40 yearso Single Marketo €uro

TWIN AIMS OF CUSTOMS POLICY:o To protect the EU and citizenso To facilitate legitimate trade

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Changing environment &Changing environment &New challenges for customs in generalNew challenges for customs in general

• Increasing volumes of traffic

• Increasing globalisation of trade and crime

• Increasing threat of terrorist acts

• Increasing interconnectivity and

interdependency of societies/countries

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Changing environment &Changing environment &New challenges for customs in EuropeNew challenges for customs in Europe

• Total length of external land frontier: 12.440 km• Enlargement of the European Union in 2004 and 2007

(e.g. length of the EU Eastern Land Frontier increased nearly 80%)

• About 1.600 million tonnes of seaborne cargo (annually)

• About 8 million tonnes of airborne cargo(annually)

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Changing environment &Changing environment &New challenges for customs in EuropeNew challenges for customs in Europe

• 161.000.000

custom declarations per year

• 441.000

custom declarations per day

• 306

custom declarations per minute

• 5

custom declarations per second

A OFFICE OF DISPATCH/EXPORT

2 Consignor/Exporter No

3 Forms 4 Loading lists

5 Items 6 Total packages 7 Reference number

8 Consignee No 9 Person responsible for financial settlement No

10 Country first 11 Trading 13 C.A.P.

destin. country

14 Declarant/Representative No 15 Country of dispatch/export 15 C. disp./exp. Code 17 Country destin. Code

a b a b

16 Country of origin 17 Country of destination

18 Identity and nationality of means of transport at departure 19 Ctr. 20 Delivery terms

21 Identity and nationality of active means of transport crossing the border 22 Currency and total amount invoiced 23 Exchange rate 24 Nature of

transaction

25 Mode of transport 26 Inland mode 27 Place of loading 28 Financial and banking data

at the border of transport

29 Offi ce of exit 30 Location of goods

Marks and numbers - Container No(s) - Number and kind 32 Item 33 Commodity Code

No

34 Country origin Code 35 Gross mass (kg)

a b

37 P R O C E D U R E 38 Net mass (kg) 39 Quota

40 Summary declaration/Previous document

41 Supplementary units

A.I. Code

46 Statistical value

Type Tax base Rate Amount MP 48 Deferred payment 49 Identification of warehouse

B ACCOUNTING DETAILS

Total:

50 Principal No Signature: C OFFICE OF DEPARTURE

represented by

P lace and date:

Code 53 Offi ce of destination (and country)

not valid for

Stamp: 54 P lace and date:

Result:

Seals affi xed: Number: Signature and name of declarant/representative:

identity:

D CONTROL BY OFFICE OF DEPARTURE

52 Guarantee

51 Intended

offi ces

of transit

(and

country)

31 Packages

and

description

of goods

44 Additional

information/

Documents

produced/

Certificates

and authori-

zations

47 Calculation

of taxes

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1 D E C L A R A T I O NEUROPEAN COMMUNITY

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CHANGING ROLE FOR CUSTOMSCHANGING ROLE FOR CUSTOMS

• Traditional approach: primary concern of customs

are fiscal matters and revenue collection

• New tasks and new challenges

– due to increasing concerns for safety and security

– demands of globalisation

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CHALLENGE FOR CUSTOMSCHALLENGE FOR CUSTOMS

In the light of the new tasks, customs have to ensure, among other:

• Protection of citizens and their interests while

facilitating legitimate trade

• Interoperable IT systems as a means to fight

fraud and increase security while not hindering

trade

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EU CUSTOMS POLICY DEVELOPMENTSEU CUSTOMS POLICY DEVELOPMENTS

• Electronic customs

• Modernized customs code

• Security amendments to the customs code(case study)

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EU CUSTOMS POLICY DEVELOPMENTSEU CUSTOMS POLICY DEVELOPMENTSDIFFERENT TIMEPATHSDIFFERENT TIMEPATHS

• E-CUSTOMS

Communication COM(2005)609– Decision in European Parliament and

Council•process is started•Council decision is expected shortly

– Phase implementation: 2006 - 2013

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E-CustomsE-Customs

Developing secure and interoperable electronic Developing secure and interoperable electronic customs systems for exchange of datacustoms systems for exchange of data– Facilitation of import and export procedures– Reduction of administrative costs– Reduction of clearing times– Improved conjunction between implementation of

legislation and the customs practice– Ensure the right levying of duties and taxes– Enable a smooth flow of information between the

relevant parties and re-use of data

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• Modernized Customs Code

Communication COM(2005)609– Decision in European Parliament and

Council•process is started

– Implementation: ?

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MODERNIZED CUSTOMS CODEMODERNIZED CUSTOMS CODE

• Simplification of the structure – reduction of articles

• Revision of the customs procedures – centralised clearance

• Improving the system for customs guarantees

• Expansion of the use of authorizations for the whole EU

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• SECURITY AMENDMENTS TO THE CUSTOMS CODE

Regulation (EC) No. 648/2005

Implementing reg. (EC) No. 1875/2006

Implementation:AEO

1/1/2008Pre-arrival /Pre-departure 1/7/2009

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EU CUSTOMS APPROACH ON SECURITYEU CUSTOMS APPROACH ON SECURITY

Integration of security aspects in customs Integration of security aspects in customs controls and authorisations for traderscontrols and authorisations for traders

• ensure that responsibilities are specified integration of security aspects in import and export controls• increased emphasis on export controls• ensure that data can be electronically exchanged • integration of security aspects in authorisations for operators

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EU Customs Security InitiativesEU Customs Security Initiatives

Security amendments to the Security amendments to the Community Customs CodeCommunity Customs Code

1) require traders to provide customs authorities with information on goods prior to import to or export from the European Union

2) provide reliable traders with trade facilitation measures (AEO-concept)

3) introduce a mechanism for setting uniform Community risk-selection criteria for controls, supported by computerised systems

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Import Control System – When is it necessary?

• First port of entry - Entry Summary Declarations (ESD) for all goods on board (24h (b/loading)-4h-2h)– If vessels sharing arrangements Pre-Arrival Notification

(PAN) necessary (24h(b/arrival)-4h-2h)– Manifest for goods to be unloaded

• Subsequent ports:– ESD for goods to be unloaded – no time limit + manifest

for movement between Community points

• Between Community ports:– Regular shipping line: no ESD only manifest– Non regular shipping line: ESD for goods to be unloaded +

manifest for movement between Community ports

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Import Control System (Draft FSS)

E_Person lodging the Entry summary declaration

Office of Lodgement

R_MRN communicated to Person lodging the Entry summary declaration

Person lodging the Entry summary

declaration

Register declaration+ perform risk

analysis

Office of first Entry Office(s)of subsequent Entry

Process received declaration + full risk

analysis for safety and securityRepresentative /

Trader at Entry (Carrier)

E_Trader at Entry presenting goods at Actual Office of first Entry

Process manifest at Actual Office of first

Entry

R_Presentation registered at Actual Office of first Entry

Entire Entry summary declaration + Risk analysis results


Register risk analysis results

If risk is identified:Send Entry summary declaration

+ Risk analysis results to all subsequent Offices involved

R_Preventive/prohibitive measures/controls notified to Representative /Trader at Entry

Decide to control

R_Goods allowed for Entry

R_Trader at Entry notified of a control

R_Goods allowed for Entry

R_Trader at Entry notified of a control

Decide to control

R_“Summary declaration“ available for subsequent customs procedure

R_“Summary declaration“ available for subsequent customs procedure

E_Trader Pre-Arrival presenting Pre-Arrival notification

Process Pre-Arrival notification

Request/provide Entry summary

declaration

Trader Pre-Arrival


R_Pre-Arrival notification registered at Office of first Entry

E_Trader at Entry presenting goods at Actual Office of subsequent Entry

Process manifest at Actual Office of

subsequent Entry

R_Presentation registered at Actual Office of subsequent Entry

Request/provide Entry summary declaration

Request/provide Entry summary

declaration

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Export Control System - When is it necessary?

For all goods leaving the Community• Normal situation: export, re-export or transit declaration

(24h (b/loading)-4h-2h)• Freight remaining on board or transhipped at the place

of unload – no declaration (ESD fills the role)• Others: exit summary declaration

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Export Control System (Draft FSS)

Prepare consignment &

declaration

E_Exporter/Declarant initiate export operation

Office of ExitOffice of Export

R_EAD Accompanying Document printed

Premises of the Trader at the point of Export

Process export

Finalise Export operation

Export operation finalized

Present goods at office of exit

Process exit of goods

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EC Security InitiativesEC Security InitiativesResult :Result :

A secure end-to-end supply chain A secure end-to-end supply chain with secure trading partners and with secure trading partners and

without weak links !without weak links !

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THANK YOUTHANK YOUFOR YOUR ATTENTIONFOR YOUR ATTENTION

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Customs DevelopmentsCustoms Developments

visit our website:visit our website:

http://europa.eu.int/comm/taxation_customs/index_en.htmhttp://europa.eu.int/comm/taxation_customs/index_en.htm