Press Conference by European Commissioner for Taxation and Customs. László Kovács. "A new customs environment to face globalisation challenges"

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1 Press Conference by European Commissioner for Taxation and Customs László Kovács "A new customs environment to face globalisation challenges" Brussels, Wednesday 30 November 2005 SPEECH (Slide 1) (Introduction) I am pleased to introduce to you two major proposals that the Commission has just adopted, with a view to creating a new customs environment to face the challenges posed by globalisation. These two proposals are among my core priorities for the coming years in my portfolio Taxation and Customs Union. (Context) Today, Customs are facing an increasing pressure resulting from two opposite forces. First, the rapidly increasing volumes of goods that are crossing the EU external borders, as a result of global economic integration. Companies obviously expect faster and cheaper customs procedures to run their activities efficiently. The Community expect the precise collection of revenues. But at the same time, customs have to address the security and safety threats that the movements of goods may bring to our citizens and our environment. I m thinking of terrorism, but 1

2 also of counterfeiting, which results in fraud to public budgets and endangers the lives of consumers or the environment. To address these challenges, we have to re-think the way customs are managing trade in goods at the border. This is the purpose of the two proposals that the Commission adopted today in order to create a new customs environment in Europe. (Political objectives) I am proud of these proposals because they contribute to the objectives of the Lisbon Agenda and to Better Regulation. They aim to improve the competitiveness of European companies by reducing the costs of trade transactions and the administrative burdens. They will also allow us to make e-government a reality in the field of customs and trade. And they constitute a concrete action under security objectives of this Commission. (Slide 2) (The objectives of the proposals) The proposals for a Council and European Parliament Regulation on a Modernised Customs Code and a Decision on electronic Customs lay down the foundation for the modernization of customs legislation and processes. They will create the conditions for an electronic, paperless environment in which transactions between customs, trade and other government agencies would be facilitated and more efficiently monitored. The objectives of the two proposals are : -to simplify and streamline customs procedures and processes; -to promote pan-european customs transactions; -to extend the use of information and communication technologies (ICT) 2

3 throughout the whole supply chain, both for companies and frontier control authorities. (New customs environment) What will change with the new proposals? The work of companies and public authorities will be made faster, better and cheaper. First, let me show you how they will work faster : - Electronic declarations will replace paper-based declaration as the rule. This means that companies will be able to lodge their customs declarations at any moment, without having to rely on the opening hours of the customs office. A Customs Internet system will be permanently available. (Slide 3) - One important tool will be introduced: the Single Window. It means that traders will only have to submit once all the information required by customs and other authorities (VAT, agricultural and sanitary measures, commercial policy measures, etc.). All government agencies (agricultural, sanitary, environmental, etc.) will have electronic access to this information. Common Internet portals will be developed that will give importers all necessary information on customs and other policy requirements. This is a major tool for gaining time and efficiency. - The tasks will be redistributed between customs offices (Border Offices will focus on physical checks of goods) and Inland Customs Offices will specialise in customs clearance. (Slide 4) - At the border, the One-Stop Shop concept will ensure that customs and 3

4 all other controls will be carried out at the same place at the same time by all the authorities concerned. Together with centralised clearance, this will result in gains of time. It will be possible for the goods to be delivered directly to the consumer, without passing through the premises of the trader. - Trustworthy traders and customs agents will benefit from facilitations as regards security controls and simplifications of customs procedures : they will thus also save time and money. Second, customs authorities and companies will work better (Slide 5) - Thanks to the introduction of pan-european customs IT systems, the existing Member States' systems will be made inter-operable. This means that information about all customs transactions will be accessible to any customs authority in the EU. This means more efficiency and less fraud. - Simpler legislation and streamlined procedures will facilitate compliance for companies and controls for administrations, and encourage SMEs to participate in international trade. - We will introduce EU-wide electronic risk analysis, which means that the Commission and the Member States will decide together about which controls should be made at EU borders at a given moment, and how to make them in a coordinated manner. This will enhance the protection of our citizens, of the environment and of the European Commission and Member States' financial interests. Third, customs-related activity will be cheaper : (Slide 6) - Centralised clearance will be a major facilitation for EU companies, 4

5 (Slide 7) including SMEs : authorized traders will be able to declare goods electronically and pay their taxes at the place where they are established, irrespective of the Member States through which the goods will be brought in or out of the EU customs territory or in which they will be consumed; To give you an example: A company established in France will be able to import goods from third countries through Lithuania. It will pay all the customs duties and border taxes at the customs office in France, but via electronic exchange of data between customs offices, a physical check of the goods may be carried out by the customs office of entry in Lithuania and the goods will be released by the Lithuanian office. In that case, the goods can be put into circulation into any Member State without having to be presented to the customs office in France. This will be a major facilitation for companies. - The measures proposed will also reduce the time necessary for customs clearance, thus saving a lot of money to companies and administrations. The expected benefits for companies could be up to million euros per year once the system is fully operational in This will result from a reduction of compliance costs for business, which could represent around 50% of the costs of a customs transaction. Making the work of Companies and public authorities faster, better and cheaper has a cost. The costs of the reform will be between 80 and 100 million euros per year until 2013 for the Commission and Member States. But, as I said, the benefits could be up to million euros per year 5

6 once the system is fully operational in We can also expect an increase of around 50 billion euros in international trade per year. (Slide 8) As regards the timetable, if the Council and European Parliament adopt the proposals in due time, the new Customs Code and Implementing Provisions should enter into force in The electronic systems should also be in place by 2009, except the Single Window which is planned for I am therefore pleased to present this major reform, which, when adopted by the Council and Parliament, will make a real difference in the everyday life of European companies and administrations, for the benefits of the whole Community of 25 countries 450 million citizens. 6