The Customs Union, a project that began over 40 years ago, represents one of the European Union’s most successful achievements. Therefore, to secure good results, to continue working effectively and to best meet the challenges of the twenty first century, the European Commission initiated a Multi-Annual Strategic Plan, more than 15 years ago, with the main objective of modernizing and simplifying customs legislation.
The first step in the modernization of customs legislation, which included some steps towards uniformity of its implementation and the creation of a single European Customs Administration, was completed in 2008, when Regulation (EC) 450/2008 establishing the Community Customs Code (the Modernized Customs Code) entered into force. Its provisions were applied gradually and, even now have been implemented only partially. The second phase will start on 1 November 2013, when, most likely, the recast of the Modernized Customs Code (the so called Union Customs Code), which has recently been approved by the European Parliament, will come into force.
According to the European Commission’s latest estimates, the Union Customs Code is expected to be fully implemented by the end of 2019.
The modernized customs legislation introduces simplifications (the most important being electronic declaration of goods and on-line communication between companies acting as importers / exporters and the customs authorities). The aim is for it to be applied uniformly by all 28 customs administrations.
Valentin Durigu, Senior Manager in KPMG in Romania’s Indirect Tax Department recommends that “companies involved in international trade should take advantage of the respite offered by the process of reforming the Modernized Customs Code and ensure that over the next few years they take the necessary steps to upgrade their IT systems in accordance with the requirements of the e-customs concept, as well as making sure that their systems are interoperable with the IT systems of customs administrations.”
Durigu adds: “According to the Union Customs Code, the current conditions for the customs authorities to grant the status of Authorized Economic Operator (AEO) will become mandatory for any company that requires a customs authorization (e.g. authorization for the inward processing customs regime). So this is another reason why these companies should take steps to obtain AEO authorization.”
Consequently, although the full implementation of the Union Customs Code will most likely be extended to the end of 2019, several provisions will have to be observed from 1 November 2013 and we consequently recommend that companies involved in international trade should take steps now, so that they are ready for the transition to electronic customs clearance (e-customs), thus ensuring their competitiveness within the European Union.