The Union Customs Code (UCC) is a key element of the ongoing actions to modernise EU customs. What is the impact for EU and other businesses?
The EU has produced its interim assessment in June 2022 on the UCC. But what actually is the UCC?
On May 31, 2022, the European Commission released an interim assessment report. It offers an evaluation of the execution of UCC legislative rules and IT systems from May 1, 2016 to the end of December 2020. What is the main conclusion in our mind?
CU - going strong since 1968
It has been one of the EU's greatest success stories since 1968, and a necessary precondition for a well-functioning internal market since then. The European Union has exclusive authority for the Customs Union. The EU adopts and implements customs law, such as the Union Customs Code (UCC)1, via the customs administrations of its member states.
The primary EU legislative and IT framework for customs
The Union Customs Code, which came into effect in 2016, is the primary EU legislative and IT framework for customs agencies and trade and supply chain participants. Using 17 IT systems, the UCC will be implemented in a paperless environment using simplified and predictable rules, procedures, and processes.
While simultaneously safeguarding the financial interests of the Union and its member states and the safety and security of European residents, its long-term goal is to help European enterprises compete more effectively.
For the period from 1 May 2016 to 31 December 2020, the evaluation assesses the implementation of the UCC legislative rules and the supply of IT systems at EU and Member State levels. An extensive review of the UCC's practical implementation of rules, procedures and IT systems in all Member States as well as an in-depth analysis of the most significant provisions and changes introduced by UCC through the prism of effectiveness, efficiency, relevance, coherence and EU added value have formed the basis of the report's findings and conclusions.
Areas of examination in the interim report
Harmonised data requirements,
Rules for customs decisions,
Obtaining the AEO designation,
Risk management and controls,
Central IT systems supporting the implementation of UCC rules on customs tariff and valuation,
Temporary storage, and
According to current plan, eight systems were successfully deployed by 2020 and are operating well for stakeholders, while nine systems are expected to be implemented progressively by the end of 2025.
However, the UCC's implementation has been only partially successful.
Progress in improving the customs environment has been made, although not equally in all of the categories examined.
The United Nations Convention on Trade and Customs (UNCTAD) helped to eliminate the differences between Member States' approaches to customs laws, such as in the fields of customs decisions, prerequisites for obtaining the status of Authorized Economic Operator, and in certain specific processes.
Some aspects, such as risk management and monitoring of the AEO status, are still lacking in standardisation, and different interpretations of regulations continue to be an issue.
Expected advantages have yet to be realised
When substantial changes to the import process such as EU-level centralised clearing at arrival and associated trade facilitation are dependent on existing IT developments, many of the predicted benefits of the UCC have not yet been realised.
According to the findings, the UCC implementation failed to take advantage of Customs and related policy agencies responsible for implementing EU regulations at the national level were also found to be working in synergy and collaboration.
Rules aren't fully established, especially when it comes to things like banned or restricted products. There is a lack of cooperation in the effort to standardise criteria and standards
Digitalization is stymied and necessary simplifications are hampered because of an apparent issue with (particularly) data collection and exchange techniques.
How we can help
Customs are a fact of life for most businesses, especially for companies that ship goods overseas. To best prepare for customs and avoid costly missteps, you must understand what customs officers do and how they interpret international trade laws.
Our service and expertise is to help you get the most from your UCC. We have the experience to help you design a risk mitigation strategy specifically for your needs.
Customs Manager provides training, consulting and coaching services to businesses that need help managing their customs compliance campaigns. Don't lose time-fighting with customs; let us help your business succeed in the global marketplace!
If you have any questions about our service or if you need further information, please do not hesitate to contact us today!