It is always said that customs issues are boring. Anyone who is responsible for customs duties at freight forwarders, import or export companies, has probably been transferred to this
post as a punitive measure. That is the general perception.
All wrong. That customs topics can be exciting was proven at the recent meeting in Dusseldorf, organized and orchestrated by local IT firm, Riege Software.
The meeting, titled “Inside Scope,” was not so much about spectacular cases of drug trafficking at airports uncovered by customs, nor about the illegal import of ivory, valuables, weapons, or turtle shells. It was about changes in the European customs system, which affect EU traders, transport companies and their agents, alike. First precursors have been in force since 01JUL21. Ever since then, consumers have to pay import duties for all orders from non-EU countries. Often, they do not even notice this because postal services or integrators, for example, add a service fee to their transport price, covering the additional expenses. At Deutsche Post, this has been 6 euros per shipment since summer 2021.
One basket, many chapters
A key feature in the EU's customs draft directive, is the introduction of a so-called basket where products are bundled into groups. According to Brussels, this basket is sub-divided into 5 different chapters, enabling customs officials and their inspectors to identify the goods by means of electronically transmitted code numbers. This is illustrated by Chapter 61, for example, which is titled “Clothing”. There, “Clothing” is subdivided into “wool” (611011). If the sweater has a “wool” content of at least 50% and weighs at least 600 grams, then it is listed in the customs import register under the code number 61101110000, and so on.
The nomenclature comprises 21 sections, 99 chapters, and over 5,000 subheadings. Without digital recording and data exchange between traders, transport companies and customs authorities, sheer chaos would break out at airports or seaports when large quantities of shipments arrive, needing to be inspected due to missing or false documents submitted electronically to the customs authorities prior to their landing.
The devil is in the details
Managing Director Wolfgang Schwab of the German Association of Customs Software Developers (BVZH) pointed out that the devil is in the details. For example, if a table coming from a third country is imported into the EU and its legs are made of wood, the question arises as to whether it is an illegal import of tropical wood. If this is not clear from the product code, customs could order an inspection. In this case, the consignee probably does not even know that the foreign trade law of a given EU state has been violated. Hence, penalties may be incurred if incorrect documentation is detected.
To enable customs authorities to handle the steadily growing volume of imports into the EU smoothly and promptly, the level of automation for processing customs declarations must be increased significantly. Currently, the different 27 EU customs systems lack compatibility, which requires interfaces to seamlessly transfer data and coordinate joint actions; an annoying deficit that must be overcome asap, expert Schwab demanded at the Riege gathering. First solutions are available, for instance the Atlas IMPOST Module, developed by Riege Software. This electronic tool allows for the quick clearance of low value goods, this way speeding up the flow of e-commerce consignments in particular. Riege specialists emphasized at the meeting that time consuming system changes are no longer necessary because a special interface enables instant data exchange with external platforms.
Central EU customs platform is coming
In addition, he pointed out that the pressure on the 27 EU countries to introduce a standardized central platform is growing allowing the fast identification and clearance (or inspection) of imports, However, because of the current insufficient patchwork system, Brussels has granted the EU member States very extensive transition periods to adapt to the new customs scheme.
01JAN28 is the first binding date of the new EU customs regulations for all e-commerce shipments coming from third countries. From that day on, all data must be transmitted to a central EU platform. Ten years later, i.e. from 2038 onwards, this procedure includes all imports into the block. The UK makes no exception since it exited the EU’s customs regime on 01JAN21, when Brexit came into force.
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