Explanatory Memorandum to COM(2012)64 - Union Customs Code

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dossier COM(2012)64 - Union Customs Code.
source COM(2012)64 EN
date 20-02-2012


1. CONTEXT OF THE PROPOSAL

Grounds for and objectives of the proposal

Regulation (EC) No 450/2008 of the European Parliament and of the Council of 23 April 2008 laying down the Community Customs Code (Modernised Customs Code)1 aimed at the adaptation of customs legislation to fit, but also to govern, the electronic environment for customs and trade. By doing so, it took the opportunity to carry out a major overhaul of the customs rules in order to make them simpler and better structured.

This Regulation entered into force on 24 June 2008, but it is not yet applicable. It shall be applicable once its implementing provisions are in force and on 24 June 2013 at the latest.

The following reasons lead to the proposal to amend Regulation (EC) No 450/2008 (Modernised Customs Code or ‘MCC’) before it becomes applicable:

- The implementation of a major part of the processes to be introduced depends on the definition and the development, by the Commission, the national customs administrations and the economic operators, of a wide range of electronic systems. This requires a complex set up of actions between the Member states, the trade community and the Commission, notably important investments in new EU wide IT systems and supporting activities as well as an unprecedented effort from the business community to operate according to new business models. It is now apparent that only a very limited number or even no new customs IT systems may be introduced in June 2013, the latest legal date for the implementation of the MCC.

- A new task which intervened after the adoption of the Regulation (EC) No 450/2008 and is linked with the entry into force of the Lisbon Treaty is the commitment made by the Commission to propose amendments to all basic acts in order to align them with the new provisions of the Lisbon Treaty concerning delegation of powers and the conferral of implementing powers before the end of the term of the Parliament. This has an impact to the foreseen implementing provisions of the MCC which now have to be 'split' between delegated acts and implementing acts in accordance with new empowerments in line with Articles 290 and 291 TFEU. Moreover, the 'Community' Customs Code (Modernised Customs Code) has now to be renamed into 'Union' Customs Code (UCC).

- Finally, the joint work on the implementing provisions with Member States experts and trade representatives has also revealed the need to adjust some provisions of the MCC which are either no longer in line with changes introduced since 2008 to current customs legislation or have revealed (e.g. regarding the temporary storage of goods or a customs declaration through an entry of data in the declarant's records) difficult to implement through sound measures and workable business processes. The objective was nevertheless to limit such adjustments to what is absolutely necessary to ensure coherence in the processes.

Consequently the Commission found it was appropriate to proceed to a recast of Regulation (EC) No 450/2008 before its currently scheduled application, due to the following technical and procedural considerations:

- the need to postpone the date of application of the MCC. That postponement shall be adopted before the ultimate deadline of 24 June 2013, currently laid down in Article 188 i of the MCC Regulation for its application. It is appropriate to give administrations and economic operators adequate time to undertake the necessary investments and ensure a phased, binding but realistic implementation of electronic processes. The Commission will continue to work with all stakeholders with a view to ensuring that the new electronic processing environment will be operational at the latest by 31 December 2020. An agreed work programme and the Commission's proposal for the future FISCUS programme2 should provide the necessary support for this process;

- the commitment to align the MCC on the requirements of the Lisbon Treaty, as regards the use by the Commission of either delegated or implementing powers to allow the MCC to be applied, in accordance with Articles 290 and 291 of the Treaty on the Functioning of the European Union and the new ‘Comitology’ Regulation (EU) No 182/2011 of the European Parliament and of the Council of 16 February 2011 laying down the rules and general principles concerning mechanisms for control by Member States of the Commission's exercise of implementing powers3;

- the need to adjust some provisions that have proved difficult to implement; the text of the MCC needs to be adapted, where appropriate, to the outcome of the work on implementing processes and provisions, where it reveals a lack of adequacy between certain provisions of the code and the actual functioning of customs procedures (e.g. temporary storage) or where it takes into account the evolution since 2008 of legislation in other policy fields (e.g. transport safety and security).

Policy objectives remain those of the Regulation to be recast.

All these reasons advocating for the recast of the former MCC were discussed with all parties involved, namely the Council (letter from Commissioner Šemeta of 19 May 2011 to the Hungarian Presidency) and the European Parliament (letter from Commissioner Šemeta of 19 May 2011 to the Chairman of the Committee on the Internal Market and Consumer Protection), as well as with the economic operators in the Trade Contact Group and met their agreement. Support by the European Parliament in that respect is reflected in the Salvini Report on the modernisation of customs in the internal market4.

General context

2.

The present proposal must be seen in the context of:


a) the modernisation of customs legislation and procedures and the use of IT systems for customs clearance and procedures in view of facilitating the way of doing business with customs and ensuring safe and secure trade of goods in the European Union;

b) the requirements of the Treaty of Lisbon;

c) the evolution of policies and legislation in other fields that might impact customs legislation such as safety and security in the transport field;

d) the evolution of business processes that require clarity and coherence in the customs rules.
Existing provisions in the area of the proposal

3.

The Regulation subject to the proposal will repeal and replace the following Regulations:


- Council Regulation (EEC) No 2913/92 of 12 October 1992, establishing the Community Customs Code5;

- Council Regulation (EEC) No 3925/91 of 19 December 1991 concerning the elimination of controls and formalities applicable to the cabin and hold baggage of persons taking an intra-Community flight and the baggage of persons making an intra-Community sea crossing6;

- Council Regulation (EC) No 1207/2001 of 11 June 2001 on procedures to facilitate the issue or the making out in the Community of proofs of origin and the issue of certain approved exporter authorisations under the provisions governing preferential trade between the European Community and certain countries7;

as from the date of application of the recast Regulation;

Contents

1.

and


- Regulation (EC) N° 450/2008 of the European Parliament and of the Council of 23 April 2008 laying down the Community Customs Code (Modernised Customs Code), being the Regulation subject to recast,

as from the date of entry into force of the recast Regulation.
Consistency with the other policies and objectives of the Union

The proposal preserves the objectives of Regulation (EC) No 450/2008, which were fully in line with existing policies and objectives relevant to the trade of goods brought into and out of, from and to the customs territory of the Union.

2. RESULTS OF CONSULTATIONS WITH THE INTERESTED PARTIES AND IMPACT ASSESSMENTS

Consultation of interested parties

Consultation methods, main sectors targeted and general profile of respondents

Since the recast does not alter the substance of Regulation (EC) No 450/2008, the consultation of interested parties previously held before the adoption of that Regulation is still relevant.

Consultations on the adjustments to Regulation (EC) No 450/2008 were held with the Member States' customs administrations and the European trade federations, in a joint meeting of experts on 19 September 2011. The European Parliament was represented at that meeting.

Member States will also be involved in the preparation of the future Commission delegated acts through meetings of a group of experts and will give their opinion on draft Commission implementing acts in the Customs Code Committee.

Trade representatives will be involved through consultation on draft acts in the Trade Contact Group or in ad hoc experts meetings or invitations to joint meetings with Member States experts, where appropriate.

In accordance with the Common Understanding of the European Parliament, the Council and the Commission on the functioning of Article 290 TFEU8, the Commission, when preparing and drawing-up delegated acts, will ensure a simultaneous, timely and appropriate transmission of relevant documents to the European Parliament and Council.

Information and right of scrutiny of the European Parliament and the Council on draft Commission implementing acts will be ensured in accordance with the provisions of Regulation (EU) No 182/2011.

Impact assessment


The decision to do a full recast of the MCC before its currently scheduled application is the only comprehensive solution which will avoid changing Regulation (EC) N° 450/2008 twice at a very short notice and would as well allow introducing the adjustments necessary for a sound implementation of that new legal and procedural framework.


As the proposal for Regulation (EC) N° 450/2008 to be recast has already gone through an impact assessment and the proposed changes introduced by this Regulation are justified by technical and procedural considerations, there is no need for an Impact Assessment.

3. LEGAL ELEMENTS OF THE PROPOSAL

The proposed Recast Regulation adjusts some provisions of Regulation (EC) N° 450/2008 to the evolution of customs and other relevant legislation, aligns it to procedural requirements resulting from the Treaty of Lisbon and postpones its application.

Most of the provisions of the Regulation to be recast are affected by changes, because either of the impact of the alignment on the Treaty of Lisbon or of the need for adjustments because of the further evolution of relevant EU legislation.

4.

The overall structure of the Regulation remains the same and the modifications foreseen can be classified as follows:


3.1. The adjustments to the text are targeted to comply with the following criteria:

- editorial changes to the wording of the MCC such as typing errors or omissions in the published text, incorrect references, incorrect location of provisions, inconsistent use of terms, editorial alignments required by the Lisbon Treaty, e.g. Union instead of Community;

- alignment to the evolution of EU legislation following the entry into force of the MCC (and within the deadline for the new draft MCC);

- alignment to current customs legislation, e.g. Article 184g CCIP, as amended by Reg. 312/2009, instead of Article 88 i MCC (arrival notification); Article 186 CCIP, as amended by Reg. 312/2009, instead of Article 151 i MCC (disconnection of entry summary declaration and declaration for temporary storage);

- alignment to (possible) future amendments of the Code, in anticipation of developments in other relevant policy fields e.g. related to aviation security;

- alignment to other legislative acts, e.g. update of references in the MCC to other legislative acts;

- alignment to the results of the work carried out regarding the preliminary drafting of the implementing provisions of the Modernised Customs Code (MCCIP) and the establishment of Business Process Modelling tool (BPM), e.g. adjustment of provisions on temporary storage or introduction of a basic provision for invalidation of entry and exit summary declarations. Those adjustments are limited to what is absolutely necessary to streamline and ensure consistency between customs legislation and efficient and workable processes.

3.2. Alignment of the empowering provisions of the MCC on the requirements of Articles 290 and 291 of the Treaty on the Functioning of the European Union (TFEU).

5.

That alignment was made in accordance with the procedural requirements resulting in particular from the following texts:


- Articles 290 and 291 of the Treaty on the Functioning of the European Union (TFEU);

- The Communication from the Commission to the European Parliament and the Council on the implementation of Article 290 TFEU9;

- The Common Understanding of the European Parliament, the Council and the Commission on the functioning of Article 290 TFEU;

- Regulation (EU) No 182/2011 of the European Parliament and of the Council of 16 February 2011 laying down the rules and general principles concerning mechanisms for control by Member States of the Commission's exercise of implementing powers.

It has been based on a prior inventory of the existing empowering provisions in Regulation (EC) No 450/2008 and of the need for additional empowerments in order to preserve the capacity for the Commission to adopt measures as already laid down in the implementing provisions of the current Community Customs Code (CCIP of Regulation (EEC) No 2913/92) or identified in the process of preparation of the implementing provisions of the Modernised Customs Code (MCCIP of Regulation (EC) No 450/2008).

Once properly identified, those empowerments took the form of either a delegation of power or a conferral of implementing powers, in accordance with Articles 290 and 291 TFEU. In the context of conferral of implementing powers a choice between the advisory and the examination procedure was made in accordance with the criteria of Article 2 of Regulation (EU) No 182/2011 and exceptions duly justified. Justifications were also provided where the urgency procedure of Article 8 of Regulation (EU) No 182/2011 was introduced in relation to certain implementing acts.

Where appropriate, new provisions had to be introduced in Articles of the Regulation to serve as legal references for the corresponding empowering provisions.

In some cases, it was also considered appropriate to transfer some provisions initially intended to be laid down in Commission acts to the basic act, in order to avoid empowerments of a very limited scope.

Those requirements related to the alignment explain why the number of Articles in the proposal for the recast Regulation is higher (59 more) than in the original one to be recast.

Chapter 1 of Title IX of the recast Regulation (Articles 243 and 244 on ‘delegation of power and committee procedure’) reflects the new procedural context.

The recitals of the Regulation have been adjusted to reflect those changes.

3.3. Postponement of the date of application of the Modernised Customs Code.

Article 245 of the recast Regulation, replacing Article 186 MCC, provides for the repeal of Regulation (EC) No 450/2008 on the date of its entry into force.

Article 246 of the recast Regulation regulates its entry into force, which shall occur on the 20th day following its publication.

6.

Article 247 fixes new dates for the application of the recast Regulation:


- all empowering provisions shall apply from the date of entry into force of the recast Regulation (Article 247(1));

- it shall be the same for Article 46 on ‘charges and costs’, which shall replace from that date of entry into force Article 30 of Regulation (EC) No 450/2008, that already applies since 1 January 2011;

- all the other provisions shall apply from the first day of the first month after 18 months following the entry into force of the recast Regulation; that time period should allow the Commission to adopt the required delegated or implementing acts (including the time for the legislator to react) and prepare, through non legal instruments (guidelines, information, training) and in cooperation with Member States and trade representatives, the application of the complete new legal package.

In practice, the application of the provisions of the Regulation which depend on the use of electronic data-processing techniques and electronic systems may be suspended on the basis of empowering provisions allowing the Commission to adopt delegated acts providing for transitional measures for the periods pending the availability of such systems (Articles 6(2)(c) and 7 of the recast Regulation). However such transitional periods and measures should not go beyond 31 December 2020 and, based on the financial assumptions reflected in the Commission's proposal for the future FISCUS programme, a full implementation of the IT-related parts of the Regulation should therefore be ensured for that date, at the latest.

Moreover, to support that full implementation and govern the setting up of transitional periods, the Commission should produce, within 6 months of the entry into force of the recast Regulation and through a conferral of implementing powers for that purpose in Article 17 i of the recast Regulation, a work programme related to the development and deployment of all electronic systems required for the implementation of the Regulation. Full coherence shall be ensured between that IT work programme specific to the implementation of the recast Regulation and the multi-annual strategic plan referred to in Article 8 i of Decision No 70/2008/EC of the European Parliament and of the Council of 15 January 2008 on a paperless environment for customs and trade10 on the one hand and the annual work programme referred to in Article 6 of Decision No 624/2007/EC establishing an action programme for customs in the Community (Customs 2013)11, on the other hand.

Summary of the proposed action

The proposed action is to replace Regulation (EC) No 450/2008 (Modernised Customs Code) with a recast Regulation which aligns it to the Treaty of Lisbon, adjusts it to the practical aspects and developments in customs legislation and in other policy fields relevant to the movement of goods between the EU and third countries and allows sufficient time for the development of supporting IT systems.

Legal basis

Articles 33, 114 and 207 of the Treaty on the Functioning of the European Union.

Article 31 TFEU cannot serve any longer as a legal basis for a legislative act like the recast Regulation.

Subsidiarity principle

Since the proposal falls under the exclusive competence of the Union, the subsidiarity principle does not apply.

Proportionality principle

Since the proposal does not entail any new policy developments compared to the initial proposal and resulting legislative act, it does not imply reassessing compliance.

4. BUDGETARY IMPLICATION

Budgetary implications are the same as the ones of Regulation (EC) No 450/2008 being recast. Commission, Member States and traders will have to invest in accessible, inter-operable customs clearance systems. The financial implications concerning the EU share of IT developments for that purpose are set out in the proposal for the FISCUS programme.

5. OPTIONAL ELEMENTS

Simplification
The recast of Regulation (EC) No 450/2008 provides for better adequacy of legislation with business practices, supported by an optimal architecture and planning for IT developments, while encompassing all the advantages of the Regulation subject to the recast proposal, namely the simplification of administrative procedures for public authorities (EU or national) and private parties.
The recast of Regulation (EC) No 450/2008 will be supported by updated business process modelling (BPM) and supplemented by the future Commission delegated and implementing acts, as well as explanatory notes and guidelines. That will further ensure consistent interpretation and application of the customs rules by Member States, which will be of great benefit to economic operators.

Repeal of existing legislation

The adoption of the proposal will lead to the repeal of existing legislation (see point 1).


🡻 450/2008 (adapted)