Insights from the 65th Plenary Trade Contact Group Meeting of DG TAXUD of the European Commission
Main Outcomes
1. Welcome and Adoption of Agenda
The chair welcomed the participants and adopted the agenda.
2. European Ports Alliance
The EU presented the Commission's Public-Private Partnership proposal for the Action Plan to tackle drug trafficking. On 24 January, the European Commission and the Belgian Presidency of the EU Council launched the European Ports Alliance and its Public-Private Partnership to strengthen the battle against narcotics and organised crime. This partnership brings together all essential stakeholders to develop port protection solutions. The EU Commission claims criminals transport illegal goods into the EU via ports. Drug trafficking is one of Europe's top security threats. Criminal networks use violence, corruption, and intimidation to make money. EU Customs seized 500 tonnes of drugs in 2022. Cocaine was above 50%.
The European Ports Alliance intends to safeguard all EU ports.
After commencement, the Public-Private Partnership will meet annually at the ministerial level to address concerns, set goals, and review progress.
Find out more: https://home-affairs.ec.europa.eu/news/european-ports-alliance-fight-drug-trafficking-and-organised-crime-2024-01-24_en
3. Customs Reform
a. State of play
b. Operational scenarios
The EU Commission presented the state of EU Custom Reform and delivered a detailed presentation on feedback received.
The Commission presented the EU Customs Code reform proposal in May 2023. The package contains three separate legal acts: the primary regulation that establishes the EU Customs Code and the EU Customs Authority, a Council regulation on simplified tariff treatment for distance sales and elimination of the customs duty relief threshold and a Council directive on a unique scheme for distance sales of goods imported from third countries and import VAT. Parliament acts as a co-legislator on the first one.
Are you ready for "Trust & Check"?
Trust & Check traders will also be able to clear all of their imports with the Member State's customs authorities, no matter where the goods enter the EU.
EU Data Hub
Under the new rule, an EU DataHub would become the primary portal for information submission to customs for ship suppliers. This would allow authorities to see suspicious anomalies, possible examples of tax fraud, and dangers associated with certain products or businesses more clearly. As a result, authorities could concentrate their investigations on the least reliable shipments and enterprises.
Businesses would also gain from the platform's replacement of the more than 111 distinct IT systems now in operation in Europe connected to customs. Information submission would become more straightforward, which should lessen strain and expenses.
MEPs want to launch the EU DataHub as a voluntary pilot project sooner than the Commission has suggested—that is, in 2028. Furthermore, they would like to establish a distinct portal for whistleblowers, enabling consumers and companies to report products that fail to meet EU regulations effortlessly.
The EU Commission explained that the European Parliament is considering the law and has voted on amendments already. The EU Commission reported that MEPs endorsed the Commission's proposal while amending it to simplify procedures further, clarify data processing and accessibility, create a platform for whistleblowers, make the new EU DataHub available earlier, facilitate trade, and lessen the burden, especially for SMEs.
Discussion was ensured, and many trade associations expressed their views on the state of play of the reform.
What the video on EU Customs Reform.
4. Sanctions
The EU Commission made a presentation on EU Sanctions against Russia. The Commission said the EU focuses on circumvention efforts and critical goods on the battlefield. The Commission said that they had published a guidance note addressed to European operators to help them identify, assess, and understand the possible risks of sanctions circumvention – and how to avoid it. Download here
5. CBAM
There was a detailed presentation on CBAM.
The EU Commission explained that the EU uses its Carbon Border Adjustment Mechanism (CBAM) to price carbon emissions from carbon-intensive items entering the EU and promote cleaner industrial output in non-EU nations.
The EU Commission explained that CBAM transitional phase began on 1 October 2023, with the first reporting period for importers ending 31 January 2024. The Head of Unit for CBAM explained that the transitional period aims to serve as a pilot and learning period for stakeholders, collecting useful information on embedded emissions.
The Commission explained that they are learning a lot. More guidance is produced and translated into all EU languages for importers and exporters (Arabic, Chinese, Japanese, Hindi, and Ukrainian). The Commission is aware of the administrative burden on businesses. The EU Commission is doing much outreach and travelling internationally to explain CBAM.
The Head of Unit of the EU Commission pointed to the flexibilities that currently exist and that they may be used. He said, in particular, the CBAM Implementing Regulation provides flexibility in reporting requirements and methodology, with the EU method being accepted until July 2024.
CLECAT presented based on a survey of their freight forwarders (intermediaries). Some screenshots summarise the feedback they have received. It was about:
• Registration functionality
• Challenges in CBAM Reporting
• Overall feedback
CLECAT provided further details on the challenges provided
A discussion incurred and the EU Commission took good note of the issues raised by trade representatives.
6. UCC IT Implementation and Proof of Union Status
EEA made an intervention and called for improvements to the current UCC IT system. To find out about the challenges with ICS, watch my interview with Walter Van de Meiren from UPS here: https://www.youtube.com/watch?v=vC8MkQbJBJM&t=254s
Our ICS 2 briefing is here: https://www.customsmanager.info/post/eu-ics
New EU system for union status certificates T2L and T2LF
The EU Commission informed participants that from 1 March 2024, businesses must apply for T2L and T2LF union status certificates in the new EU Proof of Union Status system. They do this in the EU Customs Trader Portal. Proof of Union Status (PoUS) is a European information system that allows union status certificates to be issued and checks issued union status certificates. Customs is currently working on introducing the system, which will be done in two phases:
• Phase 1: replacement of the paper T2L and T2LF document..
• Phase 2: introduction of the electronic Customs Goods Manifesto. This allows you to request and check union status certificates for multiple shipments and goods. This phase will be completed in the third quarter of 2025.
Each union status certificate applied for in the new system will have a Movement Reference Number (MRN). The issued certificates are stored in a central database, making them available in all Member States. When importing union goods, you must report the MRN of the union status certificate to the relevant Customs.
To use the new system, you must be able to log in to the EU Customs Trader Portal.
7. Closure
The Chair closed the meeting after a final round of questions, thanking the participants.
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