A new EU ‘Single Window’ to modernize and streamline customs controls

On 28 October 2020, the European Commission forwarded to the European Parliament and the Council a proposal to amend the EU Regulation No 952/2013 in order to improve the EU Customs Union by establishing a new ‘Single Window’ to modernise and streamline customs controls and to facilitate trade. This proposal aims to harmonize the existing exchange process of electronic information that traders are demanded to submit to different national authorities involved in goods clearance. For this purpose, the Commission intends to digitalise and streamline this process, by establishing a single procedure (the so called ‘Single Window’) for traders that will ultimately no longer have to submit documents to several authorities through different portals.

The abovementioned Regulation No 952/2013 set out the general rules and procedures of the European Union Costumes Code (USS), applicable to every goods brought or taken out of the customs territory of the European Union. In accordance with article 3 UCC, each European custom authority is responsible for the implementation of the external aspects of the internal market and of common trade policies having a bearing on trade, in this way ensuring a balance between customs controls and the facilitation of legitimate trade. Given these tasks, customs authorities are also responsible of the enforcement of more than 60 EU non-customs legal acts, relating to a range of specific policies applied in various domains such as health and safety, environment protection, fisheries and agriculture, market surveillance and product compliance and cultural heritage. Overall, these acts affect around 40 million customs declaration each year, and impose additional obligations for the import, export and transit of the most sensitive goods within the EU Single Market.

On this account, the ‘Single Window’ initiative has proven to be increasingly worth as a means to streamline the border clearance process in the EU, by proposing a digital solution for the exchange of electronic information between different government authorities, and between the latter and the economic operators. The origins of this initiative date back to the 2008 Commission’s commitment to promote a European electronic customs environment, endeavouring to establish a framework of single window service. This commitment was followed in 2014 by the Venice Declaration, which proposed a progressive action plan to implement an EU Single Window Environment for Customs and to start to develop its related legal framework.

As a further step, the Commission launched a pilot project in 2015, the EU Customs Single Window-Common Veterinary Entry Document (EU CSW-CVED), jointly administered by the Directorate-General for Taxation and Customs (DG TAXUD) and the Directorate-General for Health and Food Safety (DG SANTE) to enable the automated verification by customs of three non-customs regulatory formalities submitted with the customs declaration as evidence of compliance. The pilot ultimately proved to be successful and grounded a further pilot initiative, the EU Customs Single Window Certificates Exchange System (EU CSW-CERTEX), that expanded the scope of regulatory requirements and introduced new functionalities. This additional initiative successfully addressed the need to provide a suitable digital environment for all parties involved in international trade with the EU by implementing an automated process for verifying compliance with non-customs regulatory requirements. As a result, the pilot reduced the administrative burdens on the business operators and, at the same time, assured an equal treatment of the parties involved in the goods clearance process and an efficient prevention of fraudulent activities.

Nonetheless, among the Member States that did not join the pilot, the custom authorities continued to work on fragmented basis, posing significant barriers to the development of an efficient goods clearance process. Additionally, the emergence of national single window initiatives further increased the fragmentation of the European goods clearing process, due to the resulting implementation of different modalities based on each national level of existing customs IT architectures, priorities and cost structures. Therefore, the EU action turn out to be increasingly crucial as the regulatory requirements concerned involve the movement of goods across borders. Moreover, the development of a stronger framework for the Custom Union to further facilitate the fulfilment of customs regulatory requirements will be a key step and an important achievement in the Covid-19 economic recovery plan.

The legal bases of this initiative are provided by Articles 33, 114 and 207 TFEU. The former two articles enable the European Parliament and the Council to take measures to strengthen custom cooperation among Member States and between the latter and the Commission, through the ordinary legislative procedure. In line with this provision, this initiative seeks to ensure the development and implementation of the internal market by harmonizing and improving the existing goods clearance processes. On the other hand, Article 207 TFEU grounds the EU initiative’s broader scope that extends further beyond cooperation between customs authorities to include trade facilitation and protection against illicit trade as an important aspect of the EU trade policy.

In the last years the problems affecting the goods clearance process heightened the fragmented interoperability and lack of coordination between customs and partner competent authorities. Therefore, in order to address these issues, the initiative’s objective will be threefold. First, it will define a comprehensive governance framework for boosting cooperation between economic operators and customs competent authorities and develop interoperable solutions where beneficial and appropriate. Then, the initiative will aim to improve established practices between the European customs authorities to enable more automated, electronic and integrated processes for dealing with goods clearance. Finally, a data harmonisation framework will be implemented to enable re-use of data for the fulfilment of different formalities required by customs and non-customs authorities for international trade.

The initiative will pursue these objectives on the grounds of the existing pilot project, the EU CSW-CERTEX, by making it mandatory for all the Member States. As such, information sharing between different custom agencies and administrative bodies involved in goods clearance will be enhanced and facilitated trough the progressive implementation of a framework for digital cooperation between the aforesaid authorities. As a result, the EU electronic systems will be enriched by data required for a number of mandatory regulatory formalities in the goods clearance process. The pilot, broadened in scope and scale, will be progressively incorporated in the future EU electronic system that will manage non-customs, formalities once the respective EU non-customs legislation and operational aspects will be implemented.

In terms of subsidiarity, there are several reasons why this initiative should be carried out at the EU level. Complex regulatory set up and the continuous introduction of new rules governing regulatory requirements for goods clearance have led to insufficient coordination and fragmented interoperability over the European network of customs and competent authorities. Not only the Custom Union, but the entire range of EU policies related to cross-border operations are heavily undermined by the current fragmented goods clearance process. These inherently transnational issues will substantially limit the benefits of the gradual digitalisation and modernisation of processes related to the clearance of specific goods subject to EU non-customs regulatory requirements in various policy areas.

Therefore, the EU is well placed to carry out this coordinated action, given the EU institutions’ responsibilities for the implementation and improvement of the Custom Union and its related legal framework. Therefore, through this initiative, the EU will reduce administrative burdens for all affected stakeholders, generate substantial economies of scale and yield interoperable customs and non-customs domains by facilitating and fostering digital cooperation and information exchanges between national single window environments for customs and Union non-customs systems, along with the increasing digitalisation of Union non-customs formalities. EU action is also expected to confer direct benefits on regulatory formalities where quantities of authorised goods can be split across multiple customs declarations through the introduction of an automated quantity management at EU level.

Regarding the initiative conformity to the proportionality principle, the scope of this proposal is limited to non-customs regulatory formalities for which an EU electronic system is in place to store relevant information required by customs to verify compliance with the respective measures. Since the proposal will foster digital information exchanges and the interconnection of EU electronic system with national single window environments for customs, the initiative will significantly impact on the legislation that allows authorised quantities of goods to be split across multiple customs declarations that can be lodged EU-wide, or prohibits the imports or exports of goods subject to quotas after a certain threshold is reached.

While customs authorities need to verify the quantities used in the clearance of previous consignments, manual checks are both time-consuming and insufficiently accurate. These problems cannot improve without new EU action, partly because they relate to EU formalities. Furthermore, the rules provided in this proposal to harmonise the national single window environments for customs are necessary to achieve a level playing field for economic operators in the fulfilment of the regulatory requirements concerned.

Overall, the proposal is arranged in five chapters, covering general provisions, the extension of the pilot project (EU CSW-CERTEX), the coordination of the national single window environments, the digital cooperation and procedures for the implementation of this initiative (delegated acts and amendments). The Chapter I set out the EU Single Window Environment for Customs as an integrated set of interoperable electronic services delivered at EU and national level. As above-mentioned, these services are intended to help fulfil and enforce Union non-customs formalities required for placing the goods under a given customs procedure in order to facilitate trade and further protect the Custom Union. In this Chapter are also defined the general and specific objectives of the proposal and the context for regulating the electronic services that will ensure the accurate and efficient functioning of the EU Single Window environment for customs.

As a result, the initiative in expected, first of all, to set up a central EU system to interconnect the national single windows environments for customs and EU non-customs systems, enabling digital cooperation between the regulatory authorities involved in the clearance of goods. Secondly, the proposal aims to harmonize the national single window environments for customs and their functionalities and, finally, establishing specific rules for digital administrative cooperation.

Consequently, the EU CSW-CERTEX will provide a real time interface between national single window environments for customs and EU non-customs systems, covering EU non-customs formalities digitalised at EU level, for which the relevant information required by customs for clearance is provided by all partner competent authorities.

The personal data exchanged between the national single window environment for customs and EU non-customs systems will be processed in EU CSW-CERTEX without being stored, in order to facilitate information sharing among the parties involved in goods clearance processes, and to perform data transformation to run such processes seamlessly across customs and non-customs digital domains.

Furthermore, to ensure harmonised compliance and enforcement of EU non-customs regulatory requirements, each national single window environment for customs will be developed, implemented and maintained by the Member States in order to enabling customs authorities to automatically verify non-customs formalities, and allowing partner competent authorities to perform quantity management of authorised goods based on their release by customs. Additionally, to further align compliance processes and facilitate trade, the national single window environments for customs will become a single communication channel where economic operators will fulfil the relevant customs and specific EU non-customs formalities required for placing the goods under customs procedures. This facilitation mechanism will enable economic operators to submit to a single point both customs and EU non-customs data required by the multiple authorities involved in goods clearance.

Thanks to this proposal’s ambition to establish a Single Window environment for customs, The EU could significantly modernise its border controls and further advancing the Customs Union digital transformation, in order to facilitate trade, improve safety and compliance checks and reduce the administrative burdens for economic operators. As stated by the European Commissioner for Economy, Paolo Gentiloni, “[…] customs and other competent authorities must act as one, with a more holistic approach to the many checks and procedures needed for smooth and safe trade. Today’s proposal is the first step towards a fully paperless and integrated customs environment and better cooperation between all authorities at our external borders”.