Even though the EU operates as a single customs union, traders still have to deal with a patchwork of reporting regulations and national customs authorities, as each member state has its own systems in place.
However, this is scheduled to change in the coming years with significant EU customs reforms set to come into force. The project is expected to be the biggest overhaul of the customs union since its creation in 1968, so is likely to lead to new requirements for how importers and exporters manage reporting and compliance.
Why are the reforms happening?
First announced back in 2023, the proposed changes aim to make the EU customs system easier and more fit for purpose. The main goals are to modernize the system and make it fit for a digital-first future. This has been driven by issues such as growing trade volumes, increased use of digital tools and AI, and the need for greater security in customs, among others.
According to the European Commission, there are three key pillars of the changes. These are:
- Better partnerships with businesses: The plans will see the creation of a single EU Customs Data Hub that will enable companies to use a single portal for all their declarations, so they will only have to submit data once, with it being accessible by all authorities.
- Smarter customs checks: Customs authorities will be able to take a 'bird's-eye' view of supply chains and production processes, using AI to analyze data and spot problems. This should make it easier to identify any firms that are in breach of rules such as import bans or sustainability requirements.
- More modern e-commerce rules: The final pillar is more consumer-focused, while ensuring that goods sold online into the EU comply with all customs obligations. It will simplify duty calculations for lower-value imports, remove the €150 threshold for customs duties and shift the onus for ensuring compliance from buyers to sellers.
What is the expected timetable?
The moves will be an ongoing process, with key stages phased in gradually over the coming decade. Key milestones set out in the initial plans are:
2028: EU Customs Data Hub goes online for e-commerce firms
2032: All businesses able to use the hub on a voluntary basis
2038: Use of the hub to be mandatory for all firms importing to the EU
It would therefore seem that firms have plenty of time to prepare, so can have no excuse for not being ready for the changes. However, there have been suggestions that the EU will aim to speed up this process. Indeed, it has been reported that concerns over customs and VAT fraud may mean that some elements of the reforms are brought forward to as early as 2026.
What will it mean for importers and exporters?
The main benefit of the new system for importers and exporters should be much simpler processes for making declarations and ensuring they are compliant with EU customs rules.
Using a single digital platform aims to greatly reduce the amount of paperwork that is required for imports and exports. This is expected to translate directly into time and money savings for firms, with the EU estimating that companies will benefit by up to €2.7 billion a year.
The new 'trust and check' status for approved traders will strengthen the existing Authorised Economic Operator program and allow importers to release their goods into circulation to the EU without any active customs intervention.
To be eligible for this, companies will need to demonstrate their business processes and supply chains are fully transparent. It will therefore be useful for firms to start planning for this early by having the right tools and documentation in place to make certification as smooth as possible.