The EU published a draft law to become a CBAM declaration, which is currently under consultation.
What Questions I Will Answer in this Blog
What is the process for becoming an authorised CBAM declarant?
What are the requirements for providing a financial guarantee?
How does the authorisation process ensure compliance with regulations?
Introduction
The CBAM represents a notable regulatory advancement aimed at incorporating carbon emissions into imported products. With the deadline for implementation set for 1 January 2026, it is crucial to grasp the protocols and requirements for authorising CBAM declarants. The EU is seeking input on the specific strategy to adopt and has issued a preliminary legal document and accompanying annexes. We have prepared a simplified overview of the suggested legislation. Despite the eventual specifics, it is evident that this initiative will significantly impact importers, underscoring the importance of responsibility and risk management in international trade.
“Navigating the complexities of the CBAM system requires a commitment to integrity and accountability to ensure successful compliance.” — Arne Mielken, Managing Director of Customs Manager Ltd
Abbreviations I Use in this Blog
CBAM: Carbon Border Adjustment Mechanism
EU: European Union
Please note that all information provided is based on the draft regulation published by the EU Commission. There may still be changes, and only the final law will be the authoritative version. You can download the drafts here:
What is the process for becoming an authorised CBAM declarant?
To become an authorised CBAM declarant, businesses must embark on a systematic application process outlined in the draft legislation. This process aims to simplify compliance for importers throughout the EU and beyond.
The journey begins with electronic applications submitted through the CBAM registry. This streamlined approach enhances efficiency and allows businesses to access the system more easily.
Key points to note:
Electronic Format: All applications must be submitted electronically via the CBAM registry.
Detailed Information: Each applicant is required to provide comprehensive data as specified in Article 5 of Regulation (EU) 2023/956, covering various aspects of the business operations.
Non-EU Entities: Legal entities based outside the EU must include their non-EU address and the address of establishment in the EU Member State where they apply.
Unique Reference Number: Upon submission, each application will receive a unique reference number, facilitating better tracking and management within the registry.
What are the requirements for providing a financial guarantee?
The next crucial step in the CBAM declarant process involves understanding the financial guarantee that may be required under specific conditions
1. Guarantee Registration
Once an application is approved, if a guarantee is needed, it must be registered in the CBAM registry within 15 working days.
2. Active Status
Following successful guarantee registration, the competent authority will update the authorisation status and the CBAM account to ‘active’. This change is essential as it allows the business to engage in imports under the CBAM framework, ensuring a smooth transition into compliance.
How does the authorisation process ensure compliance with regulations?
Delving deeper, the authorisation process is pivotal in maintaining regulatory compliance.
The draft legislation emphasises the importance of transparent and fair criteria for becoming an authorised CBAM declarant. While specifics are still being refined, the process must promote accountability among importers. The draft legislation also outlines clear conditions under which an authorised CBAM declarant may lose their status. These provisions ensure that all importers remain compliant with regulations, thus safeguarding the integrity of the CBAM system.
When will the system enter into force?
The rules will be fully operational from 31 December 2024.
Arne’s Takeaway
The authorised CBAM declarant system presents a comprehensive framework designed to aid importers in navigating the new carbon regulations. By embracing a streamlined application process, transparent authorisation criteria, and robust data protection measures, businesses can position themselves for success in this evolving regulatory landscape.
As you prepare for the upcoming changes, I encourage you to engage with these procedures actively. Your compliance is not just about meeting regulations; it’s about demonstrating your commitment to sustainability in international trade.
Expert Recommendations
Familiarise yourself with the CBAM application process early to ensure a smooth transition.
Ensure that your organisation is prepared to provide the required financial guarantees promptly.
Keep abreast of the evolving criteria for authorisation to maintain compliance.
Fancy a call?
I offer comprehensive support for the CBAM declarant system. I would love to talk to you about your questions and challenges with navigating these new regulations. I offer a free expert call of up to one hour, which you can book seamlessly here.
I provide public, in-house, and on-demand training tailored for customs professionals, importers, exporters, and their partners. Our membership services include weekly customs trade intelligence and updates. I also offer UK import and export customs clearance services. For more details on services, visit www.customsmanager.org.
Sources That I Base Our Information in This Blog On
To dive deeper into the CBAM declarant system and related legal frameworks, members can:
EU CBAM: Authorised CBAM Declarant (Our Law Summary)
Draft Regulation on becoming Authorised CBAM Declarant
Annex of Draft Regulation of becoming an Authorised CBAM Declarant
Subscribe to The Customs Watch – our weekly consolidation of updates to law, guidance, and policy.
Visit our Knowledge Hub Content Library and read more on www.customsmanager.info, where I have a wealth of information on the CBAM system.
Members can search our library for any topic here: Customs Manager Library.
Sources That I Base My Information on in This Blog
To dive deeper into CBAM methods and related legal frameworks, members can:
Annex of Draft Regulation of becoming an Authorised CBAM Declarant
Subscribe to The Customs Watch – our weekly consolidation of updates to law, guidance, and policy.
Visit our Knowledge Hub Content Library and read more on www.customsmanager.info, where I have a wealth of information on CBAM compliance.
Members can search our library for any topic here: https://www.customsmanager.info/search-results.
I Am New To Your Website; What Do I Do?
Welcome! Thanks for reading my content. If you found it valuable, I invite you to get STANDARD Membership to our Trade Intelligence service. This way, you will receive updates directly in your inbox, keeping you informed about customs changes—based on your preferences. STANDARD membership is free of charge. To get started, leave your e-mail address at www.customsmanager.info.
Learn With Me
I and my team offer extensive training on CBAM compliance. Please visit www.customsmanager.org/events to explore the course plan and book one of the following public courses.
About the Author
I (Arne Mielken) am a customs expert with over 20 years of experience. I have worked as an executive director for many years in Big 4 Consultancy, global trade management technology companies, and various international trade associations. I am proud to be a Freeman of the City of London and a Liveryman of the Worshipful Company of World Traders, and I am a member of many customs associations, including the Customs Practitioners Group (CPG) and the UK’s Association for International Trade (ACITA).
Connect With Me & My Team
You can learn more about me here and connect with me on LinkedIn. I also run a channel where you can get free tips and advice on customs.
Our Meeting Place in the Heart of London
Meet us face-to-face and visit our sparkling Central London Office at the German Business Hub, 42 Essex Street. When you are in London, join us for a free cup of coffee or tea for a friendly chat, or join our live training and networking in the global City of London. Just e-mail us your time and date when you will be in London, and I will gladly meet you there.
Disclaimer
The information provided in this blog post is for educational purposes only and should not be construed as legal advice. Consulting with legal professionals and specialists regarding specific compliance requirements and guidance is recommended. Book a free call with our expert at Customs Manager Ltd.
Comments