EU Customs Policy Developments: Supply Chain Security - A Case Study by Manuela Cabral

1. EU Customs Policy DevelopmentsSupply chain security a case study Manuela CabralEuropean Commission

2. EC APPROACH ON CUSTOMS POLICY • WHY Community approach? • The Customs union (1968) • The Single Market (1993) • Free circulation of goods, persons, services and capital • One external frontier supervised by 27 customs administrations

3. Aim of EU customs policy THE CUSTOMS UNION is a foundation of the EU • Nearly 40 years • Single Market • €uro TWIN AIMS OF CUSTOMS POLICY: • To protect the EU and citizens • To facilitate legitimate trade

4. Changing environment &New challenges for customs in general • Increasing volumes of traffic • Increasing globalisation of trade and crime • Increasing threat of terrorist acts • Increasing interconnectivity andinterdependency of societies/countries

5. Changing environment &New challenges for customs in Europe • Total length of external land frontier: 12.440 km • Enlargement of the European Union in 2004 and 2007 (e.g. length of the EU Eastern Land Frontier increased nearly 80%) • About 1.600 million tonnes of seaborne cargo (annually) • About 8 million tonnes of airborne cargo(annually)

6. Changing environment &New challenges for customs in Europe • 161.000.000custom declarations per year • 441.000custom declarations per day • 306 custom declarations per minute • 5 custom declarations per second

7. CHANGING ROLE FOR CUSTOMS • Traditional approach: primary concern of customs are fiscal matters and revenue collection • New tasks and new challenges • due to increasing concerns for safety and security • demands of globalisation

8. CHALLENGE FOR CUSTOMS In the light of the new tasks, customs have to ensure, among other: • Protection of citizens and their interests while facilitating legitimate trade • Interoperable IT systems as a means to fight fraud and increase security while not hindering trade

9. EU CUSTOMS POLICY DEVELOPMENTS • Electronic customs • Modernized customs code • Security amendments to the customs code(case study)

10. EU CUSTOMS POLICY DEVELOPMENTSDIFFERENT TIMEPATHS • E-CUSTOMS  Communication COM(2005)609 • Decision in European Parliament and Council • process is started • Council decision is expected shortly • Phase implementation: 2006 - 2013

11. E-Customs Developing secure and interoperable electronic customs systems for exchange of data • Facilitation of import and export procedures • Reduction of administrative costs • Reduction of clearing times • Improved conjunction between implementation of legislation and the customs practice • Ensure the right levying of duties and taxes • Enable a smooth flow of information between the relevant parties and re-use of data

12. EU CUSTOMS POLICY DEVELOPMENTSDIFFERENT TIMEPATHS • Modernized Customs Code  Communication COM(2005)609 • Decision in European Parliament and Council • process is started • Implementation: ?

13. MODERNIZED CUSTOMS CODE • Simplification of the structure – reduction of articles • Revision of the customs procedures – centralised clearance • Improving the system for customs guarantees • Expansion of the use of authorizations for the whole EU

14. EU CUSTOMS POLICY DEVELOPMENTSDIFFERENT TIMEPATHS • SECURITY AMENDMENTS TO THE CUSTOMS CODE  Regulation (EC) No. 648/2005  Implementing reg. (EC) No. 1875/2006 Implementation: AEO 1/1/2008 Pre-arrival /Pre-departure 1/7/2009

15. EU CUSTOMS APPROACH ON SECURITY Integration of security aspects in customs controls and authorisations for traders • ensure that responsibilities are specified integration of security aspects in import and export controls • increased emphasis on export controls • ensure that data can be electronically exchanged • integration of security aspects in authorisations for operators

16. EU Customs Security Initiatives Security amendments to the Community Customs Code • require traders to provide customs authorities with information on goods prior to import to or export from the European Union • provide reliable traders with trade facilitation measures (AEO-concept) • introduce a mechanism for setting uniform Community risk-selection criteria for controls, supported by computerised systems

17. Import Control System – When is it necessary? • First port of entry - Entry Summary Declarations (ESD) for all goods on board (24h (b/loading)-4h-2h) • If vessels sharing arrangements Pre-Arrival Notification (PAN) necessary (24h(b/arrival)-4h-2h) • Manifest for goods to be unloaded • Subsequent ports: • ESD for goods to be unloaded – no time limit + manifest for movement between Community points • Between Community ports: • Regular shipping line: no ESD only manifest • Non regular shipping line: ESD for goods to be unloaded + manifest for movement between Community ports

18. Import Control System (Draft FSS)

19. Export Control System - When is it necessary? For all goods leaving the Community • Normal situation: export, re-export or transit declaration (24h (b/loading)-4h-2h) • Freight remaining on board or transhipped at the place of unload – no declaration (ESD fills the role) • Others: exit summary declaration

20. Export Control System (Draft FSS)

21. EC Security Initiatives Result : A secure end-to-end supply chain with secure trading partners and without weak links !

22. THANK YOUFOR YOUR ATTENTION For up-to-date information about the Customs Developments visit our website: http://europa.eu.int/comm/taxation_customs/index_en.htm