Business, Freight News, Logistics

Industry unimpressed as Brussels rubber-stamps new customs code

[ July 10, 2013   //   ]

The EU’s Council of Industry Ministers rubber-stamped the new Union Customs Code (UCC) on 29 May – and has finally published a timetable for its implementation. The UCC is intended to modernise the EU’s customs regulation and facilitate and support intra-EU trade through  new technology while reducing costs and improving the effectiveness of customs controls, according to Richard Bruton, Ireland’s Minister for Jobs, Enterprise and Innovation, and whose country currently holds the EU presidency.

The existing Modernised Customs Code (MCC) will continue until 1 November, when MCC will be adopted in its place. Implementing provisions are currently being worked on and the first draft is expected in February 2014 with the final draft available by May. It should be ready for final implementation by 1 May 2016.

However, the UCC is a step back from what was originally proposed, argues an unimpressed Peter MacSwiney, chairman of freight industry software firm, ASM. Originally, EU legislators planned to introduce the MCC which, he says, “mandated that all customs submissions and documentation should become electronic, and should have become law on 24 June 2013. The trade and authorities involved spent considerable time discussing the MCC, working out how it would function and it had reached a sensible point. Then the Lisbon Treaty reared its head and someone, somewhere in the EU Commission deemed that the MCC was contrary to the Treaty.”

Despite the work already done, the MCC was re-written and became the UCC.

The EU also allowed a moratorium on electronic transaction, stating only that users must demonstrate a ‘plan’ for going electronic, include dates for working towards it, but in the meantime would still be able to use paper documents. MacSwiney added: “As well as being a less authoritative document, the UCC will require every member state to rewrite its own implementing provisions, which could be a recipe for confusion as they will be different from those already agreed under the MCC.”

Under the EU’s Delegated Powers, there may be no consultation or debate on the issue, just a Commission decision,” MacSwiney says. While the European Parliament does in theory have the power to veto legislation, this is seen as the ‘nuclear option’ and is unlikely to be used.

Moreover, the Commission’s consultation process with the trade and other interested bodies is very confused, with too many different groups and organisations having an input into the process, MacSwiney considers. “It really is a case of too many cooks,” he told FBJ.

He continues: “This illustrates the problem. Whatever member states discuss, the EU Commission can use its Delegated Powers to make decisions and changes without consultation. If the EU had a record of introducing sensible legislation, inventing workable schemes and getting things right it would not be an issue. But they don’t – far from it”.

Aside from the prospect of some sort of limbo between the two codes, if the UCC becomes law in June there are currently no implementing provisions, 2so everyone will think about it and figure out what they think it means. This directive seems doomed to result in more bureaucracy and cost.”

“It must be time for EU directives that make it easy for trade to do business in Europe rather than make it increasingly difficult. And it must be time for serious consideration as to the wisdom of EU Delegated Powers.”

Meanwhile, the trade in the UK will need to consider the practical implications of the UCC, which will probably come into force in about November. “I would like to see The Joint Customs Consultative Committee generate pilot schemes based on an interpretation of the new law that will genuinely benefit trade rather than just concentrating on how to apply the law. Areas that could be considered include movement of goods in temporary storage and guarantee requirements, for example,” says MacSwiney.

There still seems to be some confusion, too, over who can do what. The UCC calls for centralised clearance, but then says there will be times when companies may be authorised to operate nationally. All authorisations – for national operation, self-assessment, and guarantees for deferment – will only be given to Authorised Economic Operators (C), which means those who have been granted a customs simplification certificate – which, says HMRC, in itself “will not be accepted under any mutual recognition agreements and holders of this status will not receive the benefits of frontier facilitation.”