EU customs controls: friend or foe?

Our job is to keep working for a Europe that will help businesses grow and flourish in the global economy.

Alan Johnson
Secretary of State for Trade and Industry

The UK held the presidency of the European Union (EU) for the six months ending 31 December 2005 and HM & Customs chaired, and set the agendas for, two Council of Ministers working groups.

Although seemingly opposing objectives, the UK’s focus in these groups was to help trade by simplifying customs controls and at the same time protect society by strengthening them.

Ensuring European competitiveness and growth

A comment made by Alan Johnson, Secretary of State for Trade and Industry, helped to establish the UK position on the global imperative for trade facilitation.

“Our job is to keep working for a Europe that will help businesses grow and flourish in the global economy. A Europe that doesn’t tie itself down with unnecessary rules and regulations,” he said.

Surprisingly, and despite e-commerce being a well-established principle, much customs administration is still conducted by way of a paper trail.

The modernisation of these procedures to speed up the import/export process is paramount to empower efficient trading.

A major EU-wide IT change programme is envisaged in the Multi-annual Strategic Plan for 2005-10 and the UK presidency made the dual aims of a revised customs code and an electronic customs system a priority.

Electronic system to reduce burden on business

During its EU presidency the UK advanced a programme of change for the ‘Rules of Origin’ procedure.

Currently, customs or government officials are required to certify the origin of goods leaving an exporting country – a huge burden in terms of time and expense for business and governments alike.

Introducing an electronic system allowing registered exporters to issue origin declarations will simplify the system of administration.

The business rationale being that a good reputation with customers and investors is more important to behaviour than regulation.

This will benefit importers since they will have the proof of origin documentation available electronically.

It will also help avoid the situation they can find themselves in at present whereby they may not have the necessary proof to support preference claims at the time of importation.

Or where they have to provide security for the full rate of customs duty payable while waiting for stamped documentation to arrive.

Customs controls as protectors of society

The illegal international trade in counterfeit and pirated goods presents a growing threat to the European economy and the UK presidency committed itself to strengthening the EU’s response to this problem.

The resultant European Union Action Plan for 2005/8 is being implemented.

Now the focus is on using effective risk-management techniques and increased exchanges of information about latest trends in counterfeiting and piracy to help improve targeting of risk consignments.

Similarly, brand owners and customs authorities are improving relationships by widening their links to include international trade representatives in the airline, shipping and express carrier services.

There is a limit to what can be achieved in a six-month term on matters that affect multi-jurisdictions.

However, the presidency was successful in progressing proposals and opening negotiations for the Austrian and Finnish presidencies to advance them further during 2006.