The most comprehensive reform of EU customs in decades!

The European Commission (EC) has proposed what it called 'the most ambitious and comprehensive reform of the EU customs union since its establishment in 1968'.

This includes a plan to introduce a new EU customs authority to oversee the EU Customs Data Centre, a single system for the entire bloc that will replace the existing customs infrastructure in the 27 EU member states.

According to Economy Commissioner Paolo Gentiloni, who presented the proposals on 17 May, EU countries could save up to €2 billion a year in operating costs, reports Euractiv.

A great moment for trade!

Director of Strategic Projects and International Development at the Institute of Export and International Trade (IOE&IT), Kevin Shakespeare, said this could be an important moment for any company trading with or within the EU.

"These reforms could have huge implications for traders and this announcement is a landmark moment in the digitalisation of trade. It will certainly have an impact on the way businesses trade with and within the EU."

"The EC's proposals have the potential to save significant costs and administrative burdens for businesses, thereby reducing costs for consumers."

"IOE&IT will be following the development of these proposals closely, informing members and the wider trading community of their implications through our newsletters, webinars and training courses."

Impact of e-commerce

The reforms will also have a significant impact on the e-commerce sector.

Bloomberg reports that under the plans, platforms including Amazon and Alibaba will have to ensure that customs duties and VAT are charged at the point of purchase on their platforms. This means that consumers "will no longer face hidden fees or unexpected paperwork when the package arrives".

It is reported that the new data centre will open for e-commerce shipments in 2028, with other importers able to start using it on a voluntary basis in 2032.

A response to growing trade

The EC said that the reforms are a response to "the current pressures that EU customs are under", citing a significant increase in trade volumes, particularly in e-commerce, as well as an increase in the number of controls that must be imposed at the union's borders.

The EC also cites 'changing geopolitical realities and crises'.

According to lawyers at Baker McKenzie, writing on legal analysis website Lexology, the proposals aim to:

"Increase customs revenue, avoid illegal and non-compliant products, adapt the current customs framework to the current e-commerce landscape [and] harmonise the operational implementation of customs in different EU member states."

Single point of entry

According to Shakespeare, the EC's plans could also have led to:

• Creation of a one-stop-shop for traders to provide customs and trade information to the EU customs union
• New 'Trust and verify' programme for the release of goods for free circulation
• Greater use of artificial intelligence and data to monitor shipment risk levels, enabling the EU to adopt a 'risk-based' approach to control