Workshop on C2C in the Arab Region Co-organized by UNESCWA and UNECA in

collaboration with UMA, Agadir Technical Unit, the League

of Arab States, and the European Commission

Casablanca 2-4 December, 2015

Zahouani Saadaoui, DG TAXUD Head of Sector electronic customs

Main notions of economic integration

Source: Jean-Paul Rodrigue,PhD, Hofstra University, NY, USA

A Customs Union in line with Art. XXIV GATT

A single customs territory

An external common customs tariff

Free movement of goods and identical rules of origin (no tariff or non-tariff barriers)

Beyond the GATT

The common customs tariff as a cornerstone of a common commercial policy

The free movement of goods as a basis for a single market

Border controls between members eliminated

EU Customs Union and GATT

History of the CU

• A simple and paperless environment for Customs and Trade (Official Journal C 96 of 21 April 2004)

• Security amendment to the Community Customs Code (4 May 2005):

Traders have to provide information on goods prior to import to or export from the EU

Trade facilitation measures for reliable traders (AEO status)

Uniform Community risk -selection criteria for controls, supported by computerised systems

• Union Customs Code

Recent history of the Customs Union

" The Union shall comprise a customs union which shall cover all trade in goods and which shall involve the prohibition between MS of customs duties on imports and exports and of all charges having equivalent effect, and the adoption of a common customs tariff in their relations with third countries” (Art. 28)

Customs Union and Free Movement of Goods (Art. 28 - Art. 37) Customs Cooperation (Art. 33) Common Commercial Policy (Art. 206-207)

• A single customs territory • An external common customs

tariff • An internal free movement of

goods (no tariff or non-tariff barriers)

• The common customs tariff as a cornerstone of a common commercial policy

Customs Union set at the heart of the European Community

Treaty on the Functioning of the European Union (2012/C 326/01)

Legal basis

• EU Customs Union = EU exclusive competence

• Community Customs Code + Common Customs Tariff

• CCC implementing provisions – Commission regulation

• Operational and administrative aspects, restrictions and prohibitions, regulated nationally

Legal basis

How EU laws are made

Citizens, interest groups, experts: discuss, consult

Commission: makes formal proposal

Parliament and Council of Ministers: decide jointly

National or local authorities: implement

Commission and Court of Justice: monitor implementation

• 28 acting as one

• Community AND national policies applied by national customs administrations

• Different roles, organisational structure

• European Commission supporting

Implementation

•Protect: • Financial interests

• Safety and security

• Competitiveness

• Environment

• Trade facilitation

• Future

What do customs do?

Tra

de

rs &

Tra

nsp

ort

Tra

de

rs &

Tra

nsp

ort

1973

9 MS

Automated

Customs

Systems

1986

12 MS

Automated

Customs

Systems

Time Line of Customs IT systems

15 MS

Automated

Customs

Systems

1995

1989

Community

Tariff

1999

Citiz

en

C

itiz

en

http://

europa.eu

Transit 2003

Risk

Information 2004

25 MS

Automated

Customs

Systems

2007

27 MS

Automated

Customs

Systems

(Authorized)

Econ. Operator 2009

Import

& Export

Control

2010

2013

28 MS

Automated

Customs

Systems

Source: Unit R5, TAXUD, EC

IT architecture of customs union

NA

NA

NA

NA

TradersTraders

TradersTraders TradersTraders

TradersTraders

TradersTradersTradersTraders

TradersTraders

TradersTraders

External Domain

National Domain

Common Domain

WORKLOAD FOR CUSTOMS IN EU PER 1 SECOND (2013)

Customs Union in numbers

Source: Customs Union Performance Project, EC

Enlargement: from 6 to 28 countries

1952 1973 1981 1986 1995 2004 2007 2013

Customs Union with other countries

All member states of EU and some of its neighbouring countries:

State Date

Monaco 1958

Andorra* 1991

San Marino 1991

Turkey* 1995

* Without agricultural products

How many people live in the EU?

Population in millions, 2014

507 million in total

80

.8

65

.9

64

.3

60

.8

46

.5

38

.5

19

.9

16

.8

11

.2

11

10

.5

10

.4

9.9

9.6

8.5

7.3

5.6

5.5

5.4

4.6

4.3

2.9

2.1

2

1.3

0.9

0.6

0.4

Germ

any

Fra

nce

United K

ingdom

Italy

Spain

Pola

nd

Rom

ania

Neth

erlands

Belg

ium

Gre

ece

Czech R

epublic

Port

ugal

Hungary

Sw

eden

Austr

ia

Bulg

aria

Denm

ark

Fin

land

Slo

vakia

Irela

nd

Cro

atia

Lithuania

Slo

venia

Latv

ia

Esto

nia

Cypru

s

Luxem

bourg

Malta

Customs duties and revenue

• In 2013 more than € 20 billion customs duties were collected of which € 15.4 billion was transferred into the EU budget, representing 11% of the revenue of the EU budget.

• The average customs duty rate is approximately 1.2%.

(figures for year 2013; 28 Member States; source: DG Budget and DG Taxation and Customs Union)

Processing time: • Time needed from acceptance of

declaration to release of goods (import, normal procedure)

Paperless index:

• The electronic input in the EU reached the level of 98%

AEO indicators:

• Involvement of AEO operators in the trade volume rising

• Reduced control rates for AEO for normal procedures, both for import and export (documentary and physical)

Customs Union in numbers

Source: Customs Union Performance Project, EC

Simplified procedures:

• The total number of articles presented under SP-increasing trend

• 78% of goods declared to customs for import, 71% of goods declared for export in 2013 used SP

AEO numbers

Figures from 15 January 2015:

• Requests: 17 311

• Certificates: 15 034

• Rejected: 1 808

• Withdrawn: 1 257

EU Customs Programmes supporting co-operation

• Series of co-operation Programmes in the customs area financed

from the EU budget

• Currently valid - Customs 2020 Programme

• The programme has a budget of € 547.3 million and will run for 7

years from January 2014.

General objective:

• support the functioning and modernisation of the Customs Union by

means of co-operation between participating countries, their

Customs authorities and Customs officials.

Specific objectives :

• protection of financial and economic interests (including

fight against fraud, IPR)

• increase of safety and security (protection of citizens and

environment)

• improvement of administrative capacity of Customs

• strengthening of competitiveness of EU businesses.

Type of actions:

• Seminars and workshops, working groups, working visits,

expert teams

• IT capacity building – development, maintenance and

operation of EU components of IT systems

• Human competency building – common training actions

(customs skills and knowledge)

EU Customs Programmes supporting co-operation

23

Customs IT Systems current portfolio

NCTS (New Computerised Transit System) ECS (Export Control System) ICS (Import Control System)

CENTRAL SYSTEMS

ART2 (Activity Reporting Tool)

CN (Combined Nomenclature) COPIS (anti-COunterfeit and anti-PIracy System)

CRMS (Customs Risk Management System)

CS/MIS (Central Services/Management Information System)

CS/RD (Central Services/Reference Data) DDS2 (Data Dissemination System)

EBTI3 (European Binding Tariff Information)

ECICS2 (European Customs Inventory of Chemical Substances) EOS (Economic Operator System)

ISPP (Information System for Processing Procedures) Quota2 (Tariff quota management system)

RSS (Regular Shipping Services)

SMS (Specimen Management System)

STTA (Standard Transit Test Application)

Surv2 (Surveillance monitoring system)

Susp (Tariff suspensions and autonomous quota)

TARIC3 (Tarif intégré communautaire)

TTA (Transit Testing Application)

EU MOVEMENT SYSTEMS

Source: Unit R5, TAXUD, EC

Business Area Systems

Import Control, Export Control, Transit ICS, ECS, NCTS

CS/RD, CSMIS, STTA, TTA

Agreements with partner countries NCTS-TIR-RU, EOS-MRA

Trader management EOS (EORI, AEO), RSS

Risk management CRMS

Enforcement of Intellectual Property Rights COPIS

Guarantee and debt NCTS-GMS

Goods classification and Tariff management CN, EBTI3, ECICS2, Quota2, Suspensions, Surveillance2, TARIC3

Customs information dissemination SMS, DDS2 (12 information domains)

Programme management ART2

Customs IT Systems current portfolio

Source: Unit R5, TAXUD, EC

Customs Procedures

• Release for free circulation

• Transit

• Customs Warehousing

• Inward processing

• Processing under customs control

• Temporary admission

• Outward processing

• Exportation

Single Administrative Document (SAD)

• An important step for the simplification of customs procedures was the introduction of SAD in 1988 .

• It replaced 150 separate documents previously used by the customs administrations in the Member States.

• The document uses harmonized codes to identify the countries of origin and destination, the exporter or carrier etc.

37 PROCEDURE

and

1 DECLARATION 37 PROCEDURE

and

1 DECLARATION

• CN is comprised of the Harmonized System (HS) nomenclature - run by WCO, with further Community subdivisions.

• TARIC (the integrated Tariff of the European Union) is a database containing all measures relating to EU customs tariff, commercial and agricultural legislation.

Combined Nomenclature (CN)

• TARIC is designed to show the various rules applying to specific products when imported into the EU.

• This includes the provisions of the HS and CN but also additional provisions, such as: tariff suspensions, tariff quotas and tariff preferences.

TARIC- the integrated Tariff of the EU

Infringements

• Enforcing the acquis communautaire is one of the key tasks conferred by the Treaty on the Commission.

• TAXUD performs this task in its sphere of competence, namely:

• Articles 21, 28, 29, 30, 45, 49, 56, 63, 110 and 111 of the TFEU

• secondary legislation on customs (IPR, cash controls, CITES, cultural goods, drug precursors, etc.) direct taxation and indirect taxation (VAT, excise duties, motor vehicle taxation, etc.)

• The Commission acts on its own initiative or in response to complaints.

Challenges with the Customs Union

• Legislation

• Implementation by 28 customs administrations

• Monitoring

• Uniformity

• Closer cooperation

• Performance measurement

• Financing

• Operational management

ELECTRONIC CUSTOMS Introducing paperless processes

31

Electronic Customs

• 99% of Customs processes in the EU are electronic

• The challenge lies in harmonizing the 28 Member States’ systems and procedures

32

Aims & means

• Harmonization and paperless processes

• Transitioning towards paperless customs by 2020: efficiency and transparency

• Requirements: Electronic systems + legal frameworks

• Electronic Customs on EU level = creating European Interoperability Systems, which aim to:

• Be secure, integrated, interoperable, accessible

• Facilitate customs processes of movements of goods

• Reduce risks & threats to safety and security of citizens

• Minimizing differences between MS customs processes

• Setting up supporting European e-Government services

• Efficient, effective, interoperable information & communication systems

• Information exchange between public administrations (front and back office)

• Exchange and process public sector information across Europe

33

LEGAL BASES & STRATEGY FOR E-CUSTOMS

Transparency between Legal, Business and IT

34

Key documents

• “E-Customs decision” (Decision No 70/2008/EC on a paperless environment for Customs and trade) sets key objectives

- The e-Customs decision was evaluated in the course of 2014 (see report)

- Link to related legislation: http://ec.europa.eu/taxation_customs/customs/policy_issues/electronic_customs_initiative/electronic_customs_legislation/index_en.htm

• Union Customs Code (UCC) provides legal base for e-Customs as well

• DG TAXUD’s Multi-Annual Strategic Plan (MASP) provides a framework & timeline for creating systems, up to 2024.

• - Strategic Framework

• - Supports e-Customs decision

• - Contains milestones, description of projects and requirements

35

MASP Review Cycle

• Publicly available on the Europa Website

• MASP is updated on a yearly basis

• DG TAXUD provides a revision for review to the ECCG (Member States and Trade), who accept the document

36

Deliverable CreationInternal Review Cycle

DG TAXUD updates MASP MS & TCG review MASPImple-

mentation

Q1 – Q2 Q3 – Q4

MASP is sent for review ECCGEnd of review

(deadline for comments)Positions are

providedECCG

(Review

Meeting)

MASP is

sent for

Implemen-

tation ver i-

fication

ECCG

(Accep

tance)

Internal

Consultations

Implementation

verification

CPG

(Endorsement)

PublicationMASP is

sent for

Accep-

tance

T0 T1 T2 T3

Deliverable AcceptanceExternal Review Cycle

(end)

Which purposes does MASP serve?

The creation of a coherent and interoperable electronic customs environment for the Community

Common understanding of the EU projects related to electronic customs and their dependencies (such as legal deadlines, business analysis and process clarifications)

Coherence between these EU projects (business scope, IT technical strategies)

Cooperation between all stakeholders (legal, business, IT, trade representatives at EU and national level)

Implementation of the projects according to an agreed planning → eCustoms Progress Reports

37

What does MASP amount to?

38

C2020: 547.3 million €

programme

Support between customs

authorities

Avoid mismatches in work, efficiency

gains

Meeting future challenges

Roll-out of approximately 30 systems by 2024

Adaptations to national systems

in 28 MS

How systems come together

39

Legal Business Projects

IT

System

Business Process Models

40

Receive Surveillance Data Manage Surveillance Data

Develop Surveillance Data Report

Provide Surveillance Information

Amend and Correct the Created Logical

Entries

L4-SUR-01-01

L4-SUR-01-02

L4-SUR-01-06

L4-SUR-01-04

Generate Surveillance Report/ Data Set

L4-SUR-01-03

L4-SUR-01-05

Case Study: Registered Exporter System (REX)

41

Scenario A: export from GSP BC to EU MS / consignment value above threshold

42

MS CDPS

Optional Required

Solution A1: validation of the REX number of BC exporter

REX V1.0

Validation

• A phased approached • Customs oriented and managed – goods ‘only’

• Based on international standards

• Not one single window for the EU: National interoperable Single Windows

• European Commission intervenes at Community level for harmonisation and coordination

• Deadline not set in legislation • No shift of competences between authorities

• Standardised tool for customs controls

Customs Single Window in the EU

• To enable economic operators to lodge electronically and once only all information required by customs and non-customs legislation for EU cross-border movements of goods

• Development of interoperable national Single Window systems in all Member States: • 28 national customs administrations

• Community AND national policies applied by national customs administrations

• National Single Window systems and EU centrally-managed systems interoperable

Customs Single Window in the EU

EU veterinary system TRACES now connected to the EU Single Window since January 2014

• Reusability

• Show case, define generally useable (technical) solution

• Strong involvement at COM level

Further projects to be considered

Way forward

Thank you for your attention!

Any questions?

Contact: zahouani.saadaoui@ec.europa.eu

More info at:

http://ec.europa.eu/taxation_customs/customs/policy_issues/electronic_customs_initiative/index_en.htm