AGILE CUSTOMS & EU DEVELOPMENTSAEO CONGRESS - BARCELONA

CLECAT – JUNE 2019

About CLECAT

CLECAT represents the interests of 19.000 companies

in Freight Forwarding, Logistics and Customs Services

Multinational, medium and small companies are all

within its membership

The companies represented by CLECAT:

✓ Clear around 80% of all goods in Europe

✓ Handle 65% of cargo transported by road

✓ 95% of cargo transported by air and

✓ 65% of cargo transport by ship.

Topics

1. Customs and trade in Europe today

2. Union Customs Code (UCC)

3. New systems, procedures and the end of

the SAD

4. eCommerce

5. BREXIT

6. Future of the EU Customs Union 2040

Customs and trade in the Europe today

Most advanced Customs in the world

• Almost completely digitalised and automated

• Legislation already provides numerous simplifications

• Results can be seen every day

• We can buy any kind of product at any moment

• Top 25 of World Bank Logistics Performance Index for customs

full with European countries (Spain; 17)

However, there are several challenges

• increased safety and security threats;

• increased trade barriers,

• tax fraud and tax evasion;

• food-, health- and environmental issues;

• and, despite all of this, a continuing general growth of

international trade

These issues do not originate in customs legislation

Customs and trade in the EU today

In the meantime, trade in the Europe is changing fundamentally

• The VAT directive is being renewed (especially regarding international trade in goods)

• New legislation is being created for agricultural products (Official Controls Regulation)

• Several new trade agreements

• But also more sanctions, other restrictions and more focus on export controls

• Huge increase of eCommerce – Drastic changes in EU legislation

• Many other related initiatives often concerning digitalisation like digital transport documents (eFTI Regulation)

• BREXIT…

• And, of course, the implementation of the UCC is still ongoing

The private sector has a lot to deal with in the next few years.

AEO can provide the needed balance

Union Customs Code (UCC)

UCC implementation is ongoing process

Overall no major issues, but still requires a lot of efforts from Customs and private sector:

• Most authorisations (incl. AEO) re-assessed (final date May 2019)

• New systems, processes and new EU Customs Data Model are being implemented or will start soon

• Important legal improvements were adopted in the past year (e.g. waiver for guarantees & definition of exporter)

• (New) concepts like Centralised Clearance and (Customs) Single Window becoming reality

• New AEO Benefits and other simplifications (for Freight Forwarders) are also being implemented. • For example: possibility of declaration prior to presentation

with notification of controls

• Nonetheless still discussions on interpretation and harmonisation

New systems, procedures and the EU Customs Data Model

Article 6 of the UCC:

ALL exchanges of information, such as declarations,

applications or decisions, between customs authorities and

between economic operators and customs authorities, shall

be made using electronic data-processing techniques

• 35 pan EU projects and updates of almost all national

systems (eg import, export, storage)

• The end of the paper-based Single Administrative

Document (SAD) and introduction of the EU Customs

Data Model (EUCDM)

• New systems already introduced like Customs

Decisions, REX (Registered Exporter) and CERTEX

• Others updated like EORI and AEO database (partially

for mutual recognition)

Projects and possibilities with significant importance

Centralised Clearance

• Lodge a customs declaration at customs office where established, for

goods which are presented at another customs office in the EU

• Allows centralisation and integration of accounting, logistics and

distribution functions

• Commission proposed a distributed / decentralised approach

• Functional specifications being developed

• First implementation expected in 2021, but EU pilot already started

with Customs Broker/Freight Forwarder

Entry into the Declarants’ Records

• Provides possibility to lodge a customs declaration in your own

records

• Possible in combination with Direct Representation

• Also possibility for waiver of presentation to customs

• Commission provides quite some opportunities, but you have to

request them yourself

Projects and possibilities with significant importance

EU Advanced Cargo Information System

(ICS2.0 – PLACI)

• Anti terrorism – “finding the bomb in the box”

• Not “just an update of ICS1”.

• Large role for freight forwarders foreseen

• Possibility of multiple filing; FF can file own

(house) information

• Shared EU Trader interface being developed

• All other wishes of CLECAT included so far

• First phase implementation end of 2020, starting

with post and express pre-loading

• Air cargo “general” 2023

• Road Rail and Maritime 2024

eCommerceThe issues with eCommerce

eCommerce issues:

Imports

• Unfair competition for retailers at importation

• Exemptions partially outdated

• Large volumes of small transactions in combination with exemptions make supervision and enforcement almost impossible

• Numerous cases of fraud (although not fully visible)

• Liability issues with non-EU companies

Intra EU

• Faulty, outdated system of distance sales

• No harmonisation on thresholds

• Unfair competition between Member States

• Large volumes of small transactions in combination with exemptions make supervision and enforcement almost impossible

• Barely any cooperation between MS

eCommerce

eCommerce is growing exponentially, leading to specific customs and VAT

challenges but certainly also to opportunities

• Abolition of low value exemptions for VAT

• Electronic declaration will be required in every case from 2021

• eCommerce is moving more to “normal” logistic services

• Growth for forwarders, logistic service providers and customs brokers

• Challenge for customs to deal with high volumes – organisational and IT

• Various initiatives to ensure compliance while still enabling e-commerce

• Still possibilities for simplification proposed for customs up to €150 – super

reduced data set (but with HS code)

• After requests by CLECAT Commission recently adopted legislation which does

not limit these possibilities only to post and express.

• Will be available for all companies. No differences or special treatments for certain

industries anymore

Brexit

Main Brexit Topics

• Ensure an orderly withdrawal of the UK

• Minimise barriers and maximise opportunities in the future relationship

• Promote the role of Freight Forwarders, Customs Brokers and Logistic Service Providers

• Support Members in the Brexit process

Practical preparations

• Basic principle; deal with formalities before departure

(electronically)

• At borders/terminals; similar to e-ticket airplane (barcode)

• If not, you will be turned away from terminal

• Possibilities for exception handling at designated places

• Requires preparation in advance – IT connections,

authorisations etc, which can only be done by individual

company

• Preparations depend on transport mode (rail, ferry, air,

short sea), way of transport accompanied/unaccompanied,

type of goods and whether trade with other parts of the

world take place

NO DEAL PREPARATIONSLOCAL LEVEL

NO DEAL PREPARATIONSEUROTUNNEL

• CLECAT had multiple meetings in recent weeks with

• EU Task Force Article 50

• UK Permanent Representation to the EU (Trade Secretary)

• UK Parliament Members

• Selected to join UK Alternative Arrangements expert groups (both UK Parliament & UK

Government), The expert groups aim to:

• Break through impasse, through conclusion of Withdrawal Agreement process

• Ensure an eventual solution that enables no physical infrastructure at the Irish borders

and no related checks and controls at the border

• Limit changes for communities in the island of Ireland to a minimum

• There are difficult constraints

• Brexit is a fact

• Good Friday Agreement has to be respected

• No physical infrastructure allowed at the border

• Small traders form main part of traders between Ireland and UK

• There is no one policy proposal that will be a silver bullet to ensure a seamless border on the

Island of Ireland. There are, instead a series of different things which, working together could

be used to ensure a seamless border

• AEO and similar trusted trader programmes will be very important. However, some issues

• Small, inexperienced traders with incidental shipments

• Main issues with agricultural products – no recognition of AEO

• Companies for which AEO makes sense, are already AEO

State of PlayNEGOTIATIONS & ALTERNATIVE ARRANGEMENTS

Thank you for your attentionCLECAT – JUNE 2019willems@clecat.org