Vulcan Insight | European Commission Proposes the Creation of a New EU Customs Authority

This week, the European Commission presented a comprehensive reform of the EU Customs Union which will harmonise how customs operate across the EU. Executive Vice President of the European Commission, Valdis Dombrovskis, welcomed the proposed reform describing it as part of the Commission’s “plan to strengthen the EU’s open strategic autonomy”. Commissioner Dombrovskis explained that the reform would “enable EU customs to better defend our financial and economic interest, while ensuring the safety and security of goods entering the EU”.

According to the Commission, the proposed reform responds to the pressures under which EU Customs is currently operating such as the huge increase in trade volumes, particularly in e-commerce, a fast-growing number of EU standards that must be checked at borders and the ever-changing global geopolitical context and crises. The new measures will make the customs framework fit for a greener, more digital future and ensure the protection of a safer more competitive EU Single Market.

The proposed reform seeks to harmonise how customs operate across all 27 EU Member States (MS) by creating a new EU-wide customs authority. Once established, the so-called EU Customs Authority will oversee an EU Customs Data Hub which will act as the “engine” of the new system. The Data Hub will eventually replace the existing customs IT infrastructure in EU MS. The Commission estimates that this development will save MS up to €2 billion a year in operating costs.

Under the new EU Customs Union, businesses that want to import goods into the EU will be able to log all the information of their products and supply chains into the EU Customs Data Hub, which will compile all data provided and provide authorities with a 360 degree overview of supply chains and the movement of goods. Under this system, businesses will only need to interact one single online portal, reducing administrative burdens for EU businesses. The Commission believes that this reform will lead to the creation of a more streamlined, accessible system with MS able to access data in real-time and pool information easily. This will permit national authorities to respond more quickly, consistently and effectively to risks.

Under the Commission’s proposal, the Data Hub will open for e-commerce consignments in 2028 and will be followed by other importers in 2032. This is expected to lead to immediate benefits and simplifications.

Under this proposal, the Commission has also proposed to abolish the current threshold whereby goods valued at less than €150 are exempt from customs duty, which is heavily exploited by fraudsters. According to the Commission, currently, up to 65% of such parcels entering the EU are undervalued in an attempt to avoid customs duties on import.

The proposals put forward this week by the Commission will now be submitted to the European Parliament and Council of the EU for negotiation and agreement. Once approved and adopted by both institutions, the new system will be put into force.

Compliments of Vulcan Consulting – a member of the EACCNY.