On Thursday 22nd February 2024, the Internal Market Committee of the European Parliament adopted its position on the EU Customs Code reform that will restructure the way customs authorities work in the EU.
The proposed reform aims to relieve customs authorities who have come under huge pressure due to the exponential growth of e-commerce and many new product standards, bans, obligations and sanctions that the EU has put in place in recent years.
MEPs endorsed the Commission’s proposal while amending it to further simplify procedures, clarify data processing and accessibility, create a platform for whistleblowers, make the new EU DataHub available earlier, facilitate trade and lessen the burden, especially for SMEs.
Right now, 65% of e-commerce shipments are deliberately undervalued, which leads to significant revenue loss. Also, up to 66% of products purchased online do not meet EU safety standards. The new regulation would oblige large platforms to submit information about goods to be shipped to the EU within one day of them being purchased. That should give customs authorities a better overview of incoming shipments and goods that might not comply with EU norms.
A new multi-level system of trusted traders would ensure that authorities do not lose time checking the same law-abiding companies all over again and focus on riskier businesses instead. Companies agreeing to go through thorough preliminary checks and vetting would benefit from a number of simplified procedures. The most trustworthy and transparent companies would get a trusted trader status that would enable them to undergo minimal checks and customs formalities.
The new law would establish an EU DataHub as the main platform for submitting information to customs authorities. This would allow a better overview of suspicious inconsistencies, potential tax fraud cases and risks related to certain companies or goods. Thanks to that, authorities would be able to focus their checks on the least trustworthy consignments and companies.
The platform would also benefit companies by replacing more than 111 separate customs-related IT systems currently used in Europe. Submitting information would become easier and this should reduce burden and costs.
MEPs want to make the EU DataHub operational earlier than proposed by the Commission (i.e. 2028) as a voluntary pilot project. In addition, they want to create a separate platform for whistleblowers so that consumers and businesses could easily report goods that do not comply with EU standards.
Parliament’s rapporteur for the file, Deirdre Clune (EPP, IE), said after the vote: “This report strengthens the essential need for the EU to ensure that goods entering the EU territory are safe and fulfil EU requirements while also guaranteeing that customs procedures are as efficient as possible for economic operators, reducing administrative burdens on businesses. With growing trade volumes, especially in e-commerce, and the increasing number of non-fiscal requirements that must be checked at the border, further harmonisation under the UCC and certain new benefits like the Customs Data Hub need to be realised much faster in order to meet these challenges.”
The draft report was adopted in the committee with 34 votes in favour to 0 against and 5 abstentions. It will now be put to a vote at an upcoming plenary session (most likely in March) and constitute Parliament’s position at first reading. The file will be followed up by the new Parliament after the European elections on 6-9 June.
The Commission presented the EU Customs Code reform proposal in May 2023. The package contains three separate legal acts: the main regulation that establishes the EU Customs Code and the EU Customs Authority, a Council regulation on simplified tariff treatment for the distance sales and elimination of the customs duty relief threshold and a Council directive on a special scheme for distance sales of goods imported from third countries and import VAT. Parliament acts as a co-legislator on the first one.
