EU proposes large overhaul of customs system

By Agnes Szucs

BRUSSELS - The European Commission on Wednesday proposed the greatest overhaul of its customs union in its history, aiming to simplify procedures and adapt better to e-commerce.

This is the "most ambitions and comprehensive reform since the start of the customs union which was in 1968," EU Commissioner for Economy Paolo Gentiloni told a news conference.

The reform seeks to put an end to the complicated customs system in which traders have to deal with the requirements of 27 different national authorities although the EU is a customs union.

According to the draft, the EU will set up a new authority in charge of customs and a common data center to harmonize information from member states.

The newly established EU Customs Authority will coordinate with member states and businesses to enforce better compliance with EU standards, including the recently adopted requirements excluding products made with forced labor or environmental damage.

The Customs Data Hub will harmonize information coming from between national systems and inform them about the movement of goods.

The common EU data center will gradually “replace the existing customs IT infrastructure in EU Member States, saving them up to €2 billion ($2.16 billion) a year in operating costs,” the EU executive body explained in a statement.

The reform is meant to be beneficial for traders, and they will also be able to use one single platform for declarations.

First, the e-commerce platforms will get access to the common platform as of 2028, while it opens for all trader companies from 2032.

The European Commission estimates that the simplified procedures will save up to €2.7 billion for businesses each year.

The draft also seeks to set a “more modern framework for e-commerce,” the European Commission said.

It proposes to abolish the current €150 ($162) threshold under which goods are exempt from customs duty.

The EU executive body claims that the current system is “heavily exploited by fraudsters” because sellers undervalue up to 65% of parcels sent to the EU are currently to avoid import duties.

The new rules will also impose heavier requirements on e-sellers to prove their products meet EU safety and sustainability standards, as well as customs duties.

In 2021, the bloc's trade with other countries amounted to €4.3 trillion, accounting for 14% of world commerce and providing in total €80 billion customs revenue.