
On Wednesday, 17 May 2023, the European Commission published a proposal to reform the customs setup of the European Union. This represents the most ambitious and comprehensive reform of the European customs union since its inception in 1968. In doing so, the European Commission has particularly focused on three key ambitions:
These ambitions are supported by a comprehensive revision of the Union Customs Code (UCC) and associated provisions on how the European customs union will operate in the future.
We have summarised the key structural updates as follows:
1) Centralisation of the EU’s Customs function and greater uniformity in the application of rules to ensure a more consistent experience for traders via:
2) An overhaul of customs legislation to ensure e-commerce is dealt with in a simplified manner via:
3) Streamlining customs formalities and the introduction of the EU Customs Data Hub:
PwC has a dedicated team of customs specialists who possess extensive knowledge and experience in the legal, technical, and operational aspects of customs. Consequently, we have been selected by the European Commission to assist them in the development of the Proposal (through the study "An integrated and innovative review of the EU rules governing e-commerce transactions from third countries from a customs and tax perspective", as referenced in the Proposal).
This has given us a profound understanding of the background and intention behind the proposal. It places us in an extremely favourable position to assess the implications of the EU Customs Reform for businesses and to assist in taking the appropriate measures to comply with the proposed legislation, as well as to capitalise on the opportunities it presents.
Of course, we do this in collaboration with our network of experts in other areas, such as VAT, Transfer Pricing, digitalisation, sustainability, and security, who can provide cross-sectoral and multidisciplinary perspectives on customs issues.
In addition to the proposed structural changes outlined above, a number of key legal changes have been proposed which may alter the ways in which traders interact with the customs process:
Stemming from the ambition to have a more modern approach to e-commerce, the Commission has determined that the current customs duty relief, known as Low Value Consignment Relief, which is applicable to specific goods (excluding tobacco, alcohol and perfume or toilet waters) with an intrinsic value not greater than €150, is to be removed.
In line with the removal of this relief, the current VAT simplification mechanisms have also been updated and enhanced as follows:
The proposed recasting of the UCC is a significant step towards modernising the EU Customs Union to account for the developments in data analysis and e-commerce and to create a more consistent, streamlined customs experience. While the timeline for implementation is still some way in the distance, all parties involved in importing into the EU should consider how the proposed changes will affect them.
The implementation of the “deemed importer” provision will place more responsibility on e-commerce suppliers but should offer a better customer experience as fully landed costs are displayed at purchase and customs controls are eased.
Introduction of the “Trust and Check” authorisation and the associated customs clearance benefits shows real progress by the Commission and an understanding and willingness to enhance the relationship between trusted traders and customs authorities
A significant point within the implementation timeline will be the publishing of the Implementing and Delegated Acts which will contain the detailed steps on how the new proposals will be implemented. It is expected that these legislative texts will not be published until 2024 at the earliest. Further to this, the following key timelines should be noted in respect to the proposed new UCC:
Claudia Buysing Damsté
Partner, International Trade, Customs, Sustainable supply chains, PwC Netherlands
Tel: +31 (0)65 103 04 63
Suzanne Bras
Senior Manager Customs & International Trade, PwC Netherlands
Tel: +31 (0)65 395 86 76
Ekaterina Rassadkina
Senior Manager, Customs & International Trade, PwC Switzerland
Tel: +41 58 792 00 44