The European Commission proposes to simplify customs procedures for goods entering the European Union (EU) and to modernize the Customs Union, Paolo Gentiloni, European commissioner for trade, said here on Wednesday.
The proposed reforms will entail the development of a new partnership with businesses, a smarter approach to custom checks and a more modern approach to e-commerce.
Under the proposed reform of the Customs Union, procedures will be simplified for businesses importing goods into the EU. They will be able to log all information on their products and supply chains into a single portal, the EU Customs Data Hub, which will compile all data and provide authorities with an overview of supply chains and the movement of goods.
The Data Hub will open for e-commerce consignments in 2028, followed (on a voluntary basis) by other importers in 2032. A review in 2035 will assess whether this possibility can be extended to all traders when the hub becomes mandatory as from 2038.
The hub will ultimately replace existing customs information technology (IT) systems in EU member states and will save up to 2 billion euros (2.16 billion U.S. dollars) a year in operating costs.
A new EU Customs Authority will oversee the hub. It will pool information and expertise at the EU level and assess data provided through the hub.
By using artificial intelligence (AI), the system will allow EU customs authorities to stop illegal goods from entering the EU, and to collect duties and taxes that will be redirected towards the member states’ national budgets.
The Customs Authority will help EU member states prioritize the right risks, coordinate their checks and inspections, and improve cooperation between customs, market surveillance and law enforcement authorities at both EU and national levels.
The reform will make online platforms key actors in ensuring that goods sold online into the EU comply with all customs obligations. The current system puts the responsibility on the individual consumer and carriers. Platforms will be responsible for ensuring that customs duties and value-added tax (VAT) are paid at purchase, so consumers will no longer be hit with hidden charges or unexpected paperwork when the parcel arrives.
The proposed reform also abolishes the current threshold whereby goods valued at less than 150 euros are exempt from customs duty, which is heavily exploited by fraudsters. Today, up to 65 percent of parcels imported into the EU are undervalued.
Duty calculation for the most common low-value goods brought into the EU will also be simplified, reducing the customs duty categories from thousands to just four.
The new e-commerce regime is expected to bring in 1 billion euros a year in additional custom revenues.
The Customs Union has been in place since 1968. The Commission’s reform proposal now needs to be agreed upon by the European Parliament and the Council of the European Union, and will be sent to the European Economic and Social Committee for consultation. (1 euro= 1.08 U.S. dollar)