Europe Needs Smart Customs Reform to Maintain its Security and Competitiveness

Geopolitical and global economic challenges have underlined the imperative for Europe to enhance both its competitiveness and its security. With 90% of the EU’s external trade carried by sea it is vital that the reform of the Union Customs Code (UCC) facilitates: maritime transport, the smooth handling of goods and their efficient storage in EU ports. Europe’s competitiveness and security depends on the secure but seamless connection of maritime transport to hinterland logistics chains. We must choose smart customs reform.

The undersigned associations represent the EU maritime cluster. Bringing together shipping lines, ports, terminals, agents, forwarders and shippers we wish to make the following recommendations to Council as they prepare to adopt a UCC General Approach.

Temporary Storage

Maintaining an efficient temporary storage regime is critical for entire EU port ecosystems. Reducing its length from 90 days to 3 days will negatively impact the fluidity of cargo flows and undermine efficient maritime trade through the hub and spoke model. It would impose significant operational, administrative and IT costs in EU ports, while hampering shippers’ capacity to effectively manage their supply chains.

We call on the Council to retain the 90 days time limit for temporary storage as provided in the current UCC. Moreover, current processes for placing goods in, and removing goods from, Temporary Storage should be retained in full also. Increasing the administrative burdens, fiscal or non fiscal obligations for the parties involved should be avoided.

Where goods are moved between two non-EU countries via Europe, (e.g Africa to Latin America via an EU port) there is no EU importer. Imposing on a carrier or terminal - handling many tens of thousands of containers – the liabilities normally held by an importer for a specific consignment, would be ineffective. Poorly designed legislation could damage the attractiveness of EU ports for handling these cargo flows.

Finally, under the current UCC, trusted operators of temporary storage facilities (TSOs) can apply for a waiver to provide a guarantee for the goods they hold in temporary storage. The high volumes handled in ports, means this guarantee is crucial to safeguard TSO’s financial solvency. The access of trusted TSOs to a guarantee waiver should be ensured in the UCC reform, for example, by allowing this facilitation to AEO-C certified operators.

Fair Penalties and Sanctions

The Customs Union is undermined by the huge divergences in the application of sanctions, penalties and UCC enforcement across the EU. The harmonisation of customs infringements and non-criminal sanctions is vital and should be done keeping in mind the following important considerations:

• Sanctions should apply only in cases of obvious negligence or intentional infringements, avoiding strict liability, which is both unjustified and goes against the current legislation in most Member States.

• Criminal prosecution should be reserved for the most serious infringements involving negligence or intent. Some Member States prosecute all infringements criminally and impose excessive fines.

• Harmonising customs infringements must also involve harmonising procedural rules, including customs audits, decision-making, and defence rights.

• The UCC should establish clearer distinctions of liability, particularly between those who declare information which they generate in the course of their business and those that relay information on behalf of others.

Legal continuity

With the adoption of the new UCC the existing code, its secondary legislation and data annexes will be ‘repealed and replaced’. To ensure the continued functioning of core UCC IT systems and processes for the entry of cargo into the EU, the existing UCC secondary legislation and data annexes should be maintained until amended. We urge that legal certainty be provided through the adoption of sufficient transitional provisions in the UCC.

Clarity is also needed for how to apply for an authorisation to operate a temporary storage facility or for movement of goods between temporary storage facilities, a procedure necessary to allow the movement of cargo between two terminals in the same port.

Cargo Security

New powers to prevent a carrier from unloading the goods, in case of missing data could severely disrupt trade and are unnecessary in view of existing powers to prevent a carrier from loading cargo in a third country.

Presentation of Goods when Advance Cargo Data is missing

Parties other than the carrier also need to be legally required to provide missing advance cargo data once goods have arrived. This would mirror the current UCC and the ENS multiple filing requirements applicable before the cargo has arrived.

Cargo remaining on board versus cargo for discharge in a port

The UCC needs to distinguish clearly between cargo remaining on board a vessel and cargo for discharge in each EU port. The reform proposals currently require all cargo on board be placed in temporary storage or under a customs procedure at the first EU port and not where it is discharged.

Interconnection with the EU Maritime Single Window Environment (EMSWe)

The EU Customs Data Hub should enable interoperability with the EU Maritime Single Window environment to ensure it can be used for the submission of customs formalities set down in the annex of the EMSWe Regulation. In addition, to ensure greater efficiency and avoid duplication, the Data Hub should remain open to a range of data providers and platforms currently operating.

Read the full Statement from the Maritime Cluster in UCC Reform here.