By Jung-ui Sul, Sidley Austin LLP
The EU’s modernized customs rules came into effect in May 2016. We reported on the key changes in the new rules in the March 2016 issue of the Crucible. Now that the new rules are in place, have companies noticed any benefits? Or have there been only problems? Trade associations representing exporters, importers, transporters and forwarders came together in a conference in Brussels on 7 September 2016 to take stock of the changes. The European Commission also attended the conference to respond to industry’s concerns and to give the regulator’s perspective.
Moving in the right direction
Overall, the conference speakers agreed that the new Union Customs Code (UCC) had taken the EU in the right direction for modernizing customs. They did not raise any serious problems in making the transition to the new rules. However, they also recognized that there was a long way to go until the EU would have a truly efficient customs clearance system that would work efficiently across all Member States.
Trade facilitation vs. Security & Safety
From the trade associations’ perspective, the UCC simply did not go far enough in facilitating trade. They pointed to several ways in which the UCC could have done better: for example, by raising the threshold for small-value shipments that are exempt from customs liabilities, by expanding the scope for small and medium-sized enterprises to self-assess their customs liabilities, and by reducing the administrative burden for companies that have ‘trusted trader’ status (called Authorized Economic Operators or AEOs).
Countering the trade associations’ criticisms, the European Commission pointed to customs’ role in ensuring security and safety of products in the EU. Trade facilitation is an important objective for customs, they acknowledged, but it is not necessarily
the most important one. They emphasized that customs controls also serve food safety, counter-terrorism, intellectual property protection, and a host of other public objectives. Nevertheless, they were keen to move ahead in modernizing and facilitating customs in the EU.
Issues to watch out for in the new UCC
This conference kept to a high-level discussion and did not delve into specific issues that companies are dealing with. In other forums, companies have been raising plenty of specific concerns with the new UCC. For example, companies are struggling with how various Member States interpret the rules on inward processing, temporary storage, guarantees, repayment of import duties and VAT, transit of excise goods, and the potential liability of transporters.
The European Commission and national customs authorities are open to resolving problems that may have arisen from the new UCC. Such problems may be obvious to the company involved, but may not be so visible to the regulators. If a MMTA member is experiencing difficulties, we suggest that they contact their national customs authority to take this up.
The views expressed in this article are exclusively those of the author and do not necessarily reflect those of Sidley Austin LLP and its partners. This article has been prepared for informational purposes only and does not constitute legal advice. This information is not intended to create, and receipt of it does not constitute, a lawyer-client relationship. Readers should not act upon this without seeking advice from professional advisers.