Dusseldorf Marcel Fehrmann enthuses that the EU customs reform announced in Brussels in mid-May could be a “big hit”. The head of the Lower Saxony import company Amec expects the EU customs authority planned by Commission President Ursula von der Leyen to promise significant simplifications.
“The associated uniform IT system for the whole of Europe would save a great deal of time and work when dealing with customs.” Import data is then recorded centrally and digitally.
Like many other overseas importers, Fehrmann’s company, which sells around 60 million euros a year with electronic components for smoke detectors, mobile phones and garage door motors, is still confronted with a paper chaos when it comes to import controls. “During the regular customs inspections, we have to provide the customs administration with notifications that they have created themselves,” the wholesaler says in amazement.
A lack of digitization and networking is to blame. The main customs office in Hanover, which is responsible for Amec, can only view customs documents internally, which were issued by the main customs offices there for imports via the port of Hamburg or Leipzig/Halle Airport, for example, with great effort.
“Things are even worse when it comes to customs imports via Rotterdam, for example,” reports former customs officer and business lawyer Francine Dammholz.
“To this day, German customs cannot electronically access data from the Netherlands,” says the managing director of the Braunschweig-based consulting firm Zollcoaching. In the case of customs inspections, which can still threaten up to three years later, the task then is to look for a slip of paper.
According to von der Leyen’s plans, this should be over in five years. At the behest of the EU Commission, there will be a Europe-wide customs authority that will monitor a Union-wide customs data platform. In the future, companies that import goods into the EU should feed all information about their products and supply chains into this.
Experts fear more protectionism
“Over time, the data platform will replace the existing IT infrastructure for customs in EU member states,” Brussels announced in a statement on May 17. According to the Commission, which speaks of the “most ambitious and most comprehensive reform of the EU customs union since it was founded in 1968”.
On the one hand, the long-awaited EU customs data platform is raising concerns on the other. “Brussels can easily use them to increase protectionism if necessary,” warns Francine Dammholz. “Thanks to its IT system, which is uniform throughout Europe, the EU customs authorities receive information about everything that comes in.” Reprisals against certain supplier countries or imported goods could be organized very easily in this way.
The concerns are fueled not least by the recent statement by EU Commissioner Paolo Gentiloni. The Italian responsible for economic affairs recently justified the planned Europe-wide customs data platform by saying that there were “new challenges and threats”. In relation to China in particular, the Commission officially called for a “reorientation in the most important areas”.
Companies also share the fear that Brussels could use the planned IT system to foreclose the market. “The EU thus receives a very large amount of sensitive data,” says Amec Managing Director Marcel Fehrmann. It could be tempting for the authorities, he believes, to do something with it.
In addition to the fear of a data octopus in Brussels, there has been a lack of transparency so far. “The EU Commission did not allow itself to be looked over the shoulder during the development of the platform and is now confronting us with the result,” complained Dirk Jandura, President of the Federal Association of Wholesale and Foreign Trade (BGA) in an interview with the Handelsblatt. There are still data protection concerns, he says and demands: “The balance between control and efficiency must be maintained.”
Free limits on imports are completely eliminated
In order to allay such concerns, the EU Commission has made adjustments to its plans. In certain cases, in which the business processes and supply chains are easily visible, so-called “Trust & Check” dealers should be allowed to market their imported goods throughout the EU without customs authorities having to become active.
Brussels also has something extra for online shoppers, who most recently made one billion purchases in the EU every year. According to the plans, online platforms such as Amazon or Ebay will have to ensure in future that for orders outside the EU – for example in Great Britain, China or the USA – customs duties and VAT are already paid at the time of purchase. The subsequent and often surprising collection by the postman at the front door could thus be omitted, and even less the trip to the nearest customs office.
But the EU is also thinking of itself. After it had already completely abolished the goods value exemption limit of 22 euros for import sales tax in mid-2021, the customs exemption for goods with a value of less than 150 euros is now to be dropped without replacement. The reason given by Brussels is that two out of three imported articles are currently being cheated on in terms of the actual value of the goods.
With the customs clearance of all imports without exception, it is hoped that annual additional income of one billion euros will be achieved, after just 19 billion euros came together in 2021.
A lucrative source of income for the EU: Apart from the contributions paid by the member states, the similarly high income from customs and sales tax is the most important source of income. Without them, the Union would be a quarter poorer.
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But with their forecasts, the Commission could calculate the truth. At least that’s what Customs Advisor Dammholz believes: “In view of the low staffing levels, Customs lack the necessary employees to now also check the small consignments,” she says. “The additional administrative work that results from the elimination of the tax-free limits is becoming a problem.” In addition, despite the elimination of the 150-euro limit, there will still be under-invoicing.
Many in the economy do not want to trust Ursula von der Leyen’s plan anyway. The EU Parliament and the Council of Ministers still have to agree to the simplification. The legislative proposals were first sent to the European Economic and Social Committee for consultation. As is well known, such a vote can take time.
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