The modernized Community Customs Code

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The modernized Community Customs Code
Customs 2007 Seminar Budapest 10th 11th
March 2005

• Pierre-Jacques LARRIEU
• TAXUD C3
• Customs Legislation

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• Working Group 4
• Customs debt Changes under the Modernised
  Customs Code

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What are the main objectives?

• To make it clear that customs debt does not
  constitute a penalty, notably by- clearly
  defining incurrence as dependent upon objective
  circumstances- providing for consequences of
  negligence other than automatic incurrence of a
  customs debt and- extending the circumstances
  in which debt may be extinguished when failure to
  comply with rules had no significant effect on
  the correct operation of the procedure.
• At the same time, where debt is incurred through
  deliberate infringement of the customs rules, to
  give priority to recovery from the persons who
  knowingly participate in the infringement

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What are the main objectives?

• To simplify and facilitate
• - determining the place of incurrence, viz.
  where the economic operator is established
• - assessing customs duties, viz. according to
  conditions valid at the time of incurrence
  (except for inward processing suspension system,
  usual forms of handling, storage costs)
• - determining the rate of duty, viz. the rate in
  force at the time of incurrence
• - the rules on guarantee (together with a
  vocabulary change, replacing "security" with
  "guarantee" ).

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What are the main objectives?

• To rationalize the lodging and treatment of REM
  REC applications by merging the two procedures
• To harmonize further the rules for
• - charging of incidental expenses (abolished)
• - interest on arrears.

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What are the main changes proposed?

• As regards guarantees
• - Validity to be extended throughout the
  Community (in respect of specific goods/
  declaration)
• - If accredited, banks and other financial
  institutions need not be authorized by the
  customs authorities for the provision of a
  guarantee
• - Extended opportunity for reduced levels of
  guarantee (or even for the granting of a
  guarantee waiver) for potential debts.

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What are the main changes proposed?

• As regards incurrence of debt (1)
• - Merger of all provisions concerning the
  irregular incurrence of a customs debt the
  remedy of failures/extinction of the customs debt
• - In order to encourage centralized clearance,
  the customs debt will be incurred, in principle,
  at the place where the declarant/authorisation
  holder is established the incurrence of a VAT or
  excise debt, will, as today, be related to the
  physical location of the goods (the CC does not
  change the VAT and excise rules)

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What are the main changes proposed?

• As regards incurrence of debt (2)
• - Further harmonisation and strengthening of the
  rules on responsibility
• in case of incorrect declaration, by involving
  the persons having provided wrong information,
  and in case of non compliance committed through
  an incorrect declaration, specific priority
  being given to recovery of the debt from any
  person or persons who deliberately infringed the
  customs rules.

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What are the main changes proposed?

• As regards recovery and "REM/REC"
• - Harmonisation of the extended prescription
  period (10 years if the act is liable to criminal
  proceedings)
• - Merger of "REC" and "REM" procedures,
  including
• the replacement of non-entry in accounts with
  suspension of the obligation to pay
• the deletion of the redundant condition of
  "compliance with legislation on declaration
• alignment of all time-limits with the "3
  years from communication of debt" rule

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What are the main changes proposed?

• As regards extinction of the debt
• - Extinction to be possible in all cases where
  the correct operation of the procedure is
  unaffected, whatever type of failure is
  involved
• - Extension of extinction to cases currently not
  covered, notably such as "controlled
  delivery" or the physical exportation of
  litigious goods, insofar as the debtors (e.g.
  principal in transit) act in good faith.
• - Rationalisation of extinction rules in cases
  of destruction, abandonment and confiscation.

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What are the main expected results?

• A modernized tool providing for more coherent
  rules and for a better balanced relationship
  between customs and operators.
• (Present inconsistencies will be remedied for
  example, the current deadline for communication
  of debt by customs is suspended pending appeals
  (cf. Art. 221 (1)), but no symmetrical provision
  exists for the lodgement of repayment or
  remission applications by operators.)

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Persons participating in a false declaration to
be debtors

• Article 46
• Plugs a legal gap affecting the current
  provisions.
• In the case of non-compliance, committed through
  an incorrect declaration or by the submission of
  false information, which results in all or part
  of the duties owed not being collected, the
  person who provided the information required to
  draw up the declaration and who knew, or who
  ought reasonably to have known, that such
  information was false will also be considered to
  be a debtor.
• This means that a direct representative may be
  considered to be a debtor in cases where that
  person was complicit in the making of a false
  declaration, but only in those circumstances.

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Undertaking by the European Commission to the
European Parliament

• The Commission declares that, with a view to
  ensuring that business operators in the Europe
  Union are not placed at a competitive
  disadvantage to business operators outside of it,
  it will involve business representatives and
  trade federations in the legislative process
  leading to the adoption of the implementing
  provisions to the amendment of the Community
  Customs Code, by
• - publishing relevant documents and draft legal
  texts for meetings of the Customs Code Committee,
  on the Europa website, so that traders and trade
  federations can make their views known to the
  Commission and the Committee before a decision is
  taken
• - regular consultation on specific issues with
  the Trade Contact Group, already established and
  made up from representative European trade
  federations, and
• - by the involvement of representative trade
  experts in committee proceedings, in accordance
  with Article 9 of the rules for the committee
  procedure.