European Commission Taxation and Customs Union 1 WTO Symposium on Trade Facilitation Practical...

European Commission

Taxation and Customs Union

1

WTO

Symposium on Trade Facilitation

Practical Experience of Implementing Trade Facilitation Reforms

(8-9 November 2011)

Michael Lux,Head of Customs Procedures UnitTAXUD/A3European Commission

European Commission /


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BEST PRACTICES IN THE EU

Based on

The Convention on a Common Transit Procedure



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Some data

Geographical scope:

- 30 countries (EU 27)

Volume:

- Approx. 12+ million movements per year*

- Approx. 33+ thousand of movements in NCTS per business day*

* Community transit + common transit



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Crossing borders in transit- Best Practices



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A main characteristic of the common transit procedure

One single procedure from start to finish

Start End

Start

End

Start

End

Start

End

Start

End

Compare to the TIR Convention based on a series of standardized national transit procedures



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How does the procedure operate ?

Let us take a closer look at:

• New Computerised Transit Procedure (NCTS)

• Guarantees

• Enquiry procedure and recovery

• Simplifications



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A single Customs Union but national fiscal territories required internal facilitation : Community transit procedure

MS 1 MS 2 MS 3 MS 4

MS 5 MS 6 MS 7 MS 8

MS 9 MS 10 MS 11 MS 12

EU goods (free circulation) :

Non-EU goods:



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Extension of Community transit to neighbouring countries: common transit procedure (starting 1972)

IS MS 1 MS 2 MS 3 Third country

NO MS 5 CH (+ LI) MS 6 Third country

Third country

MS 6 MS 7 MS 8 Third country


Non-EU goods:



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EU Internal Market (1993)

IS MS 1 MS 2 MS 3 Third country

NO MS 5 CH (+ LI) MS 6 Third country

Third country

MS 6 MS 7 MS 8 Third country


Non-EU goods:



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Geographical scope today

Convention on a common transit procedure / SAD Convention applies between the EU, Iceland, Norway, Switzerland, Liechtenstein

Community transit applies in the customs territory of the EU (27 MS) + Andorra & San Marino (Customs Unions)

Note: in the territory of the EU the common transit convention follows the rules of Community transit



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Goals

- Facilitation of border crossing- Trade facilitation- Cost saving- Efficient controls- Balance between the economic interest of operators

and the interest of customs (simplified procedures, modulation of guarantee, authorised consignor/consignee, etc.)

- Alignment of legislation, formalities and procedures- Safety/Security declaration can be combined with

transit



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Accession to the Conventions- A country must be invited by the EC/EFTA Joint Committee

- Formal accession procedure is described in Articles 15.5 and 15a of the Common Transit Convention (Articles 11.5 and 11a of the SAD Convention)

- Communication (COM(2001)289 of 31.5.2001) sets out the general conditions that must be met by the EU pre-accession countries

- Communication (COM(2010)668 of 18.11.2010) sets out a strategy to prepare certain neighbouring countries for accession to the Conventions and re-confirms the conditions for accession

- Council support received (28.03.2011, 6800/2/11) - conclusions on a strategy to prepare certain neighbouring countries for accession



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General conditions for accession

• Ability to implement the whole acquis:

- adopt the legal provisions;- have the operational administrative structure in place;- a computerised transit system (NCTS);- connection to the CCN/CSI network linking all Contracting Parties (separate Convention), alternative

ways of connection are under consideration (SPEED2)



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Future accessions

• Croatia and Turkey are first in line to accede to the Conventions

• Formal process may start after positive evaluation missions and presentation of missions reports (November-December 2011)

• Council Decisions on the EU position concerning an invitation to Croatia and Turkey to accede to the conventions required (already prepared, to be discussed after the evaluation missions)

• Decision of the EC-EFTA Joint Committee (February 2012)• Deposit of the accession instruments (April 2012)• Extension of the Conventions (July 2012)



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NCTS Principles and Benefits

• For Customs:

‘Real time’ exchange of information (declaration, advance arrival information, guarantee check, etc.)

Customs authorities are linked electronically More effective customs control (risk analysis,

guarantee, discharge)StatisticsSafety/security data combined with transit



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NCTS Principles and Benefits -2

• For business:

Fast administrative process Faster release of guarantee More information available (e.g. movement status

info) Faster discharge (less open movements and

enquiries) Safety/security data combined with transit



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NCTS System Architecture

• 27 EU Member StatesNO IS CH

& LI

Traders

Customs offices

Common Communications Network and Interface

(CCN/CSI)

NCTS system architecture

AND

SM

International domain

National domain

External domain



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Guarantee

Individual guarantee:

- Covers a single operation

- By cash deposit, by guarantor or by voucher (€ 7000)

- Covers the full amount of potential customs debt

Comprehensive guarantee (simplification):

- Covers several operations

- Calculated as the potential debt of one week’s operations (reference amount)

- Guarantee level 100% of potential debt or reduced to 50% or 30% or guarantee waiver (depending on meeting specific criteria)

- Guarantee furnished by guarantor (third party established in a Contracting Party)



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Enquiry procedure

• Objective is to determine how the debt incurred, identify the debtor(s) and determine the authorities for recovering the debt

• Fast electronic procedure based on exchange of messages via NCTS

• Starts at the latest one week after the goods should have been presented at the office of destination

• Recovery of customs debt starts seven months from the date the goods should have been presented at destination (shorter period in case the operator provides no or insufficient information)



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Recovery procedure

• Customs debt covers import and export duties and other charges

• There can be more than one debtor (joint and several liability)

• If there is a guarantor he is liable for the debt incurred by the principal (holder of the procedure)

• Customs debt must be notified to guarantor within specific time-limits in order to maintain his liability

• Recovery is carried out in accordance with the country’s own regulations



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Customs may authorise simplifications to operators meeting general and specific conditions

- Use of comprehensive guarantee/waiver

- Status of authorised consignor/consignee

- Use of seals of a special model

- Exemption of prescribed itinerary

- Simplified transit procedures (rail, air, sea, pipeline)

- National/bilateral/multilateral simplifications



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Example: Authorised consignor/consigneeAuthorisation stipulates how and when to inform customs / measures of

identification / categories of goods

Authorised consignor:• Places goods under transit from authorised premises without presentation to

customs

• Must hold a comprehensive guarantee / guarantee waiver

• Electronic communication with supervising customs office

Authorised consignee:• Receives goods placed under transit at authorised premises without presentation

to customs

• Electronic communication with supervising customs office



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TIR Convention

Objectives:• allow the movement of goods between and through

different customs territories (68 Contracting Parties) under customs seals under relief from import duties and taxes and without application of economic commercial policy measures

• Provide an international system replacing national procedures (including documentations, guarantee) but providing the same guarantees for the national revenue



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Weakness of the current paper TIR system

• Paper format• Formalities for holders at every border crossing• No risk management prior to physical presentation of goods • Movements in the EU monitored on the basis of information

exchange on paper• Prolonged time limits for enquiry• Fraud fighting mainly at national level• No automatic guarantee checks• Statistics collected and available only from Contracting

Parties



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Computerization of the TIR procedure

• The eTIR project– Discussed since 1997 by the Contracting Parties to the TIR

Convention– Aims to progressively computerise the TIR procedure

between all Contracting Parties

• NCTS/TIR– Computerization of the TIR procedure within the European

Union- as of 1st January 2009



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What we want to avoid



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IDEAL SITUATIONTransit should be trouble free



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Follow EU transit operations on line

• Transit map • http://ec.europa.eu/taxation_customs/dds2/tra/

transit_emap.jsp?Lang=en



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Thank you

Website:

http://ec.europa.eu/taxation_customs/customs/procedural_aspects/transit/common_community/index_en.htm

- Legislation

- Transit Manual

- Brochure

Name: Michael LUX

Telephone: +32-2-29 54 257

E-mail: [email protected]

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