International Arrangements and Agreements

In the previous two chapters we have looked at the basic sources of customs law created autonomously by the EU which are central to the customs union. We now turn to those sources of customs law which have been established or negotiated by the EU to govern its relationship with third countries—arrangements, agreements, and conventions which, as well as being concerned with customs law, implement the EU’s external relations policy, particularly in relation to trade and development.

The Customs Debt and Reliefs from Duty

The rules governing the customs debt constitute a point at which the practical interests of all those affected by customs duty coincide. For the Union institutions the customs debt represents own resources which it needs to survive. For the Member State the debt is a sum of money which it has a legal obligation to collect. For the trader, the debt represents simply a liability to be paid. No wonder then that the pre-consolidation legislation on customs debt said that:

Processing

Inward and outward processing are customs procedures of considerable economic importance to the EU, as can be seen from the fact that the Annexes to the original Kyoto Convention which dealt with them (E6 and E8 respectively) were amongst some of the earliest accepted by it in 1977. The EU legislation on processing is extensive, but was first considerably simplified in 2001. The process of simplification has been continued under the UCC. The concern to simplify customs law and to align customs procedures with commercial activity has led to processing under the UCC being considerably different from processing under the CCC.

Planning for the Future

The creation of a customs union ahead of schedule in 1968 was a great achievement, but over the subsequent years more work had to be done to ensure that the customs union was fully effective. Indeed, it was not until 1985 that a regulation establishing the inward processing regime was passed. The regulation governing the outward processing regime was not passed until the following year. Then in 1992 came the removal of border controls.

The Customs Union in its EU Context

Until the ratification of the Treaty of Amsterdam in 1997, the EC Treaty, as it then was, had dealt with the customs union in Articles 9 to 29 which constituted Chapter 1 of Title 1 and was devoted to free movement of goods. Many of the provisions dealt with the staged reduction of duties on imports between Member States and with the procedure by which a common customs tariff was to be established. As the customs union was created on 1 July 1968, by 1997 rationalization of the customs duty provisions in the EC Treaty was clearly long overdue. It was achieved by the Treaty of Amsterdam which ensured that the EC Treaty dealt with the main elements of the customs union in just five articles, Articles 23 to 27. These now appear in the Treaty on the Functioning of the European Union (TFEU) in Articles 28 to 32. Articles 30 to 32 constitute Chapter 1 of Title II on the free movement of goods. Article 30 provides that customs duties on imports and exports, and charges having equivalent effect, are prohibited between Member States together with customs duties of a fiscal nature. Article 31 states that the common customs

Customs Entry and Declaration

So far in this book we have looked at the legal concepts which underlie EU customs law. Now we turn to consider customs entry and the making of the customs declaration with the aim of giving some indication of the general administrative framework within which these crucial events take place. At the outset it should be noted that the customs declaration is of the greatest importance because a customs debt is incurred at the time a declaration is accepted. Administratively, handling customs declarations is a huge task. In the UK alone, HMRC processed around fifty-five million import and export customs declarations in 2015–16.

The Origin of Goods

The ability to determine the origin of goods is obviously essential for the operation of the EU’s customs union and the application of the Tariff. Indeed, it is also essential for the operation of a free trade area and other preferential arrangements, and many of the international agreements which were considered in the previous chapter contain extensive provisions dealing with the determination and proof of the origin of goods. The determination of origin is important too not just for customs matters but for many activities concerned with the regulation of markets. The Court of Justice has highlighted this, saying:

The Valuation of Goods

Customs duties, as we saw in Chapter 5 above, may be specific or imposed on an ad valorem basis. Uniformity of treatment has been achieved in relation to specific duties by use of supplementary units, units of account, and the euro. In relation to ad valorem duties, however, uniformity of treatment is ensured by establishing a uniform basis for valuing the goods in question. As the Court of Justice has put it:

Repayment and Remission, Decisions and Appeals

The repayment and remission of customs duty and appeals against decisions of customs authorities are dealt with in different chapters of the UCC just as they were in the CCC. Repayment and remission is in the UCC Title III (‘Customs Debt and Guarantees’), Chapter 3, section 3 (‘Repayment and Remission’), which includes sections 116 to 123. The sections on decisions and appeals are in Title I (‘General Provisions’), Chapter 2 (‘Rights and Obligations of Persons with regard to the Customs Legislation’), section 3 (Articles 22 to 37) and section 6 (Articles 43 to 45). In the CCC, the relevant provisions were placed more closely together in Title VII, Chapter 5 and Title VIII. The reorganization of the UCC is intended to reflect the fact that the debt arises early in the commercial process. As repayment and remission is often a matter on which decisions and appeals are made, the provisions of the UCC relating to them are, very largely, dealt with together in this chapter.

Introduction

A study of European Union (EU) customs law is, in large measure, a study of achievement. The EU’s customs union has been described as ‘one of the most successful examples of European integration and European policy. It has served as a stable foundation for economic integration and growth in Europe for over four decades.’ The success of the Community in establishing a customs union ahead of schedule, on 1 July 1968 and deepening the union subsequently, may now be overshadowed by the more far-reaching achievements and controversies surrounding the European Monetary Union (EMU) and the area of freedom, security, and justice. The fact, though, that the European project has advanced a long way in more recent times, notwithstanding the enormous difficulties following the financial crisis which emerged in 2007, should not be allowed to disguise the truths that the European Economic Community was, as the Treaty of Rome, Article 9 said, ‘based upon a customs union’ and that without a successful economic community there would have been no European Community or European Union.