Implications of the new Europe’s Union Customs Code for shippers

During the meeting organised by the American Chamber of Commerce in Belgium on 4 July 2023, the speakers explained the key objectives for customs modernisation, outlined the main pillars of the EU Customs Reform, and described what the new UCC would bring.

Customs modernisation aims to: 

1. Reduce administrative burden and simplify procedures.
2. Strengthen EU supply chain supervision.
3. Create a true common external border for goods.
4. Provide tailor-made customs regimes for e-commerce.

The three pillars of EU Customs Reform contain:

1. A new partnership with business
In the reformed EU Customs Union, businesses that want to bring goods into the EU will be able to log all the information on their products and supply chains into a single online environment: the new EU Customs Data Hub. This cutting-edge technology will compile the data provided by businesses and offer authorities a 360-degree overview of supply chains and the movement of goods.

2. A smarter approach to customs checks
The proposed new system will give customs authorities a bird’s-eye view of the supply chains and production processes of goods entering the EU. All Member States will have access to real-time data and will be able to pool information to respond more quickly, consistently, and effectively to risks.

3. A more modern approach to e-commerce
Today’s reform will make online platforms key actors in ensuring that goods sold online to the buyers in the EU comply with all customs obligations. This is a major departure from the current customs system, which puts the responsibility on the individual consumer and carriers. Platforms will be responsible for ensuring that customs duties and VAT are paid at purchase, so consumers will no longer be hit with hidden charges or unexpected paperwork when the parcel arrives. With online platforms as the official importers, EU consumers can be reassured that all duties have been paid and that their purchases are safe and in line with EU environmental, safety, and ethical standards.

Implications for shippers:

1. Simplified customs processes: The reform aims to simplify customs procedures for businesses, especially for trusted traders. Shipper companies will benefit from streamlined customs reporting requirements, reducing the time needed to complete import processes. This simplification can lead to faster clearance of goods at the border, reducing delays and improving supply chain efficiency.

2. Data-driven approach: The reform emphasizes a data-led approach to import supervision. Shipper companies will be required to provide comprehensive information about their products and supply chains through the new EU Customs Data Hub. Shipper companies will need to adapt their systems to provide accurate and timely data to customs authorities.

3. Trusted trader status: The reform introduces the concept of “Trust and Check” traders, which builds upon the existing Authorized Economic Operators (AEO) program. Shipper companies that demonstrate transparency in their business processes and supply chains may qualify as trusted traders. Trusted traders can benefit from simplified customs procedures and may have their goods released into circulation without active customs intervention. Shipper companies can consider applying for AEO status or meeting the criteria for trusted trader status to take advantage of these benefits.

4.Greater responsibility for online platforms: The reform places more responsibility on online platforms to ensure compliance with customs obligations for goods sold online into the EU. Platforms will be responsible for collecting and paying customs duties and VAT at the time of purchase. Shipper companies selling goods through online platforms will need to collaborate closely with the platforms to ensure compliance with customs regulations and facilitate smooth customs clearance for their shipments.

5. Removal of low-value exemption: The reform abolishes the current threshold where goods valued at less than €150 are exempt from customs duty. This exemption is often exploited by fraudsters (In the Port of Antwerp for example) . Shipper companies will need to ensure proper valuation and payment of customs duties for all goods entering the EU, regardless of their value. This change may require adjustments to pricing strategies and customs compliance processes for low-value goods.

For more information about the Union Custom Code, please see here.

For more information about the EU Customs Reform, please see here.

For the AmCham EU brochure “Adapting Europe’s Customs Union to the new reality”, please see here.