EU Customs strategy A few facts on EU customs 27 customs administrations of the EU implement a community customs code The EU is the largest

st trading space in the world - population of nearly 500 million 245 million customs declarations completed in 2011 - 8.9 every second 2.2 billion tonnes of goods with a customs value of 3300 billion EUR was handled by EU customs in 2011. The Customs Union is a foundation of the European Union and an essential element in the functioning of the single market. The single market can only function properly when there is a common application of common rules at its external borders. This implies that the 27 Customs administrations of the EU must act as though they were one. These common rules go beyond the Customs Union as such - with its common tariff - and extend to all aspects of trade policy, such as preferential trade, health and environmental controls, the common agricultural and fisheries policies, the protection of our economic interests by nontariff instruments and external relations policy measures. Today, customs are facing new challenges: they must ensure the smooth flow of trade whilst applying necessary controls on the one hand, whilst guaranteeing protecting the health and safety of the Community's citizens. To achieve the correct balance between these demands, customs procedures and control methods must be modernised and co-operation between the different services must be reinforced. For this reason, the Modernised Customs Code (Regulation (EC) No 450/2008 ) was adopted in April 2008. In order that the EU's economy can continue to compete in a global context, it is essential that customs IT systems are able to exchange electronic information and are provided with a range of interfaces with the trade, based on commonly used technology. In order to improve the interoperability between Member States' automated customs systems, the Council and the European Parliament have adopted a Decision on a paperless environment for customs and trade. What is the role of Customs today? Customs are in a unique position today to be able to facilitate trade and protect the interests of the European Union and its citizens. Customs authorities implement EU policies in almost every field connected with international trade. They are in the front line in the fight against fraud, terrorism and organised crime. Until recently, the role of the customs consisted primarily of collecting customs duties and indirect taxes at import. Numerous developments, including enlargement and the development of e-commerce and the threat of terrorist attacks and the internationalisation of organised crime, have altered the environment in which customs operate. To effectively assume these roles customs maintain a continuous dialogue with stakeholders. In this context, consultation with the business sector has been enhanced. Trade associations are regularly invited to seminars and working groups to give their input to the development of new policy and legislative initiatives. For example, the Trade Contact Group, in which all major players in the international supply chain are represented, has been established. The mission of customs is described in the Modernised Customs Code (Official Journal L 145 of 4 June 2008): Mission of customs authorities Customs authorities shall be primarily responsible for the supervision of the Community's international trade, thereby contributing to fair and open trade, to the implementation of the external aspects of the internal market, of the common trade policy and of the other common Community policies having a bearing on trade, and to overall supply chain security. Customs authorities shall put in place measures aimed, in particular, at the following: Protecting the financial interests of the Community and its Member States; Protecting the Community from unfair and illegal trade while supporting legitimate business activity;

 Ensuring the security and safety of the Community and its residents, and the protection of the environment , where appropriate in close cooperation with other authorities; Maintaining a proper balance between customs controls and facilitation of legitimate trade. A strategy for the evolution of the Customs Union Following the entry into force of the Regulation on the Modernised Customs Code, the Commission adopted a Communication on 1 April 2008 (see COM (2008) 169 (174 Kb) ) in order to develop a strategy for the evolution of the Customs Union. The Commission's strategy aims to complete the reform process, already launched with the Modernised Customs Code and the Decision on a paperless environment for customs and trade, by modernising customs working methods, developing staff competences and re-allocating resources in an efficient and effective way. The Commission proposes setting out a strategic framework for customs with common strategic objectives covering aspects such as: Protecting society and the EU's financial interests by developing effective measures against illicit, restricted and prohibited goods and developing effective risk assessment as part of the fight against terrorist and criminal activity; Supporting the competitiveness of European companies by modernising customs working methods and developing new EU standards; Facilitating legitimate trade by designing and improving control systems to reduce interference in the flow of goods, and reducing the administrative burden on businesses; Controlling and managing the supply chains used for the international movement of goods by enhancing effective and systematic sharing of risk information; Developing and enhancing cooperation between customs authorities and with other governmental agencies and the business community. The complete list of objectives can be found in the Communication on the Strategy for the evolution of the Customs Union (see COM (2008) 169 (174 Kb) ). See also press release IP/08/492. Further information related to the Strategy for the evolution of the Customs Union The Council approved the Commission Communication (ECOFIN Council Conclusions of 14 May 2008), including the strategic framework The European Parliament adopted, on the basis of the Commission Communication, a Resolution on 40th anniversary of the Customs Union in June 2008 On the occasion of the 40th anniversary of the European Customs Union, a Declaration on the future role of customs was adopted on 4 July 2008, in Paris Following a request of the Council the Commission presented a Report on Progress on the Strategy, in which the Commission also identified areas for further improvement. This report was welcomed by the Council on 10 December 2012 (see Council Conclusions ) Electronic customs General information The electronic customs project initiated by the European Commission aims to replace paper format customs procedures with EU wide electronic ones, thus creating a more efficient and modern customs environment. The project's dual objective is to enhance security at the EU's external borders and to facilitate trade. It should therefore benefit both businesses and citizens. Electronic customs is a major development for the EU's Customs Union. Its genesis is briefly described below. The following pages outline electronic customs legislation in force and proposed and individual projectsmaking up the electronic customs initiative. Genesis of the project The customs union is one of the pillars of the European Union and is at the heart of the internal market. Current legislation on customs procedures and processes is rather complex and is still based on paper declarations, and although all Member States have electronic customs systems, they are not inter-connected. The Commission considers that, with simplified customs legislation, streamlined customs processes and procedures and convergence of IT systems, traders would save

money and time in their business transactions with customs. This would enhance the competitiveness of European businesses and thereby advance the main goals of the EU strategy for growth and jobs. In addition, these changes would improve safety and security checks, which would benefit all citizens. The first step to the EU-wide electronic exchange of customs declarations was established with New Computerised Transit System started in 1997. As a contribution to the "e-government" programme, in July 2003, the Commission published its communication on a paperless environment for customs and trade (COM/2003/452 of 24/07/2003) which provided a vision of a modern customs service communicating electronically with trade. This vision was endorsed by the Council Resolution of December 5, 2003 (see Official Journal C 305) which called for a Multi-Annual Strategic Plan (see below) for the creation of a European electronic environment, consistent with the operational and legislative projects and developments already scheduled or underway in the areas of customs and indirect taxation. Subsequently, the Commission drafted a plan which sets down the vision, objectives, the strategic framework and the milestones to implement the electronic customs initiative. The MASP is also intended to provide interested parties with a short overview and background information on projects and key issues related to the evolution of the electronic customs initiative and the present state of play. Under the electronic customs decision, a consolidated report, evaluating the progress made by the Member States and the Commission in the electronic customs initiative is prepared by the Commission's Taxation and Customs Union Directorate General every year on the basis of national reports. See the report for 2010, 2009 and the one for 2008 (52 Kb) . Legislation related to the electronic customs initiative The electronic customs initiative is essentially based on the following three pieces of legislation: The Security and Safety Amendment to the Customs Code, which provides for full computerisation of all procedures related to security and safety; The Decision on the paperless environment for customs and trade (Electronic Customs Decision) which sets the basic framework and major deadlines for the electronic customs projects; The Modernised Community Customs Code which provides for the legal bases for the completion of the computerisation of customs while being currently subject to a recast as a Union Customs Code. More Electronic Customs Decision As set out in the Decision on the paperless environment for customs and trade - 'Electronic Customs Decision' (Decision N 70/2008/EC ), the electronic customs initiative aims at establishing secure, interoperable electronic customs systems for the exchange of the data to: Facilitate import and export procedures; Reduce compliance and administrative costs; Improve clearance times; Coordinate the approach to the control of goods and application of the legislation; Ensure proper collection of duties and charges; Enable a seamless flow of data between the parties involved and allow re-use of data. The Electronic Customs Decision details the interoperable systems to be introduced, deadlines for their establishment and responsibilities relating to the human, budgetary and technical resources of the Union and of the Member States. Security and Safety Amendment to the Customs Code Regulation (EC) 648/2005 and its implementing provisions requires pre-arrival and predeparture information (in the form of summary declarations lodged before the goods are brought into or out of the Union customs territory) to be filed electronically and also envisages exchange and sharing of the information between the Member States administrations, when possible. Provisions for the implementation of Council Regulation (EEC) No 2913/92 establishing the Community Customs Code which provide for the EORI system (Economic Operators' Registration and Identification system) are provided for in Regulation (EC) No 312/2009 of the Commission of 16 April 2009 .

Modernised Customs Code About the Modernised Customs Code which provides for the legal bases for the completion of the computerisation of customs while being currently subject to a recast as a Union Customs Code, you find more information on the following page. Individual Projects This section gives an overview of the major projects making up the electronic customs initiative, whose more detailed descriptions and schedules are to be found in the Multi-Annual Strategic Plan. The projects will serve the needs of businesses and/or customs administrations, complementing one another in their scope and purpose. The Automated Import System and Automated Export System together with NCTS aim to ease the customs procedures (export, import and transport), avoiding duplication at EU level. The Single Electronic Access Pointand Single Window will bring traders the benefits of the single market from a purely customs and a more general perspective respectively. The Authorised Economic Operator system will give reliable businesses a chance to benefit from simplifications in the security and safety area. The Economic Operators' Registration and Identification system will establish a unique system of registration and identification for economic operators in the EU. Single Authorisations for Simplified Procedures (if adopted) will use the European dimension to eliminate paperwork. Last but not least, the electronic customs initiative will be supported by information tools providing data in specific fields such as the EU Customs Information Portal . The Integrated Tariff Environment project, the Risk Management Framework and the Registered Exporters system will improve information availability in their respective areas. New Computerised Transit System (NCTS) - Security and Safety Aspects NCTS, being the first and currently only fully computerised and operational customs system working in all Member States (as well as in EFTA countries - Iceland, Norway, Liechtenstein, and Switzerland) is to be updated in its features as required by Regulation (EC) 648/2005 and its implementing provisions. One of the main adjustments will be the incorporation of the data elements as required by the regulation. NCTS - TIR The objective of this application (currently in the pilot phase) is to provide full control of the European leg of TIR movements and to facilitate the termination/discharge of TIR operations within the Community by replacing the return of Voucher No 2 with the sending of NCTS messages. Automated Import System The objective of the Automated Import System is to ensure that import operations started in one Member State can be completed in another Member State without re-submission of the same information. This includes the exchange of electronic messages related to the different stages of the operations amongst the various actors (customs, traders and other governmental administrations). The first phase of the implementation, Import Control System, is aimed to provide for the handling of pre-arrival declarations (under security and safety amendment Regulation (EC) 648/2005) and the link of the information with risk analysis. Automated Export System (AES) The objective of the Automated Export System is to ensure that export operations started in one Member State can be finalised in another Member State without re-submission of the same information. This includes the exchange of electronic messages related to the different stages of the operations amongst the various actors (customs, traders and other governmental administrations). This project was divided in 3 phases: Export Control System (ECS) phase 1 - exit "fiscal" control - provides for the full control of the conclusion of export operations via the electronic exchange of export/exit information between customs offices of export and customs offices of exit, in particular where different Member States are involved. This replaces the current return of paper copy No. 3 of the export declaration (to enter into operation in January 2007 with the full availability in all Member States in July 2007); ECS phase 2 - exit "security" control - provides for the electronic handling of exit summary declarations under the security amendment Regulation (EC) 648/2005 and will, inter alia, require additional information to be included in export declarations for safety and security purposes. It builds upon and keeps the functions of ECS Phase 1;

 AES - full deployment - will build on and contain the functionalities of ECS Phases 1 and 2 and, in particular, will introduce the central clearance approach. Economic Operators' Registration and Identification system (EORI) The objective of the Economic Operators' Registration and Identification System is to establish a uniquesystem of registration and identification for economic operators in the EU as laid down in Regulation (EC) 312/2009 . The guidelines (314 Kb) to ensure uniform implementation and a common understanding of the legislation concerning EORI have been prepared. For further information related to specific EU Member States please contact the appointed contact points in the Member States (201 Kb) The previous version of the EORI Guidelines is available here (301 Kb) Authorised Economic Operator (AEO) Authorised economic operators (as defined in Regulation (EC) 648/2005) will benefit from facilitations with regard to customs controls relating to security and safety and/or from simplifications provided for in theimplementing provisions to Regulation (EC) 648/2005. The implementing provisions will also specify the criteria for granting the status which will be recognised in all Member States. The information and communication system supporting the concept of the Authorised Economic Operators will e.g. enable the national administrations of the Member States to grant AEO status (including online consultations) and will provide access to the list of the AEOs for business needs. Single Authorisations for Simplified Procedures Under the proposed legal basis, the objective is to establish a single authorisation for simplified procedures in the EU where more than one customs administration is involved in the application of such an authorisation and to create an IT system to manage the demands, decisions and information flow related to the management of the single authorisations for simplified procedures. Registered Exporters established in third countries The objective of the Registered Exporters system is to make available up to date and complete information on registered exporters established in third countries involved in the export of goods to the EU having a preferential tariff rate based upon compliance with the applicable preferential rules of origin. Registered Exporters are seen as known and trusted partners in a particular set of rules of origin. The Commission is considering setting up a system to disseminate information concerning Registered Exporters which will be available throughout the EU for authorised users. Single Electronic Access Point Single Electronic Access Points will allow traders to lodge their electronic pre-arrival/predeparture, summary and full customs declarations via one single interface of their choice which connects their system with all Member States' customs systems. The data is automatically made available to any customs office responsible for the place at which goods have been, or are to be, presented, irrespective of the Member State concerned. Integrated Tariff Environment The aim of the project is to improve interconnection between the already existing tariff related IT systems in order to achieve re-use of data and/or functionality of one system to another (e.g. descriptions of CN codes owned by the CN system are to be re-used by TARIC) and to harmonise the interfaces of the different inter-related tariff systems with the Member States without redundancy of data. Risk Management Framework (RMF) The objective of the Risk Management Framework is to provide for the rapid, direct and secure exchange of risk information to support targeting of consignments for customs controls and for the Commission to be able to disseminate information concerning Community-wide threats. The first phase of the RMF, the electronic Risk Information Form (RIF) system, was launched in April 2005. The second phase involves an upgrade of the RIF system to include new user requirements arising from the practical experience gained by the users of the system. The next phase will involve enhancing the RIF system to permit the secure electronic transmission and management of common Community risk profiles, requiring mandatory control

action by Member States. These risk profiles will relate to priority control areas as required under the new rules concerning a Community Risk Management Framework laid down in Regulation (EC) 648/2005 and the corresponding implementing provisions. EU Customs Information Portal EU Customs Information Portal will enable economic operators to access information related to import/export requirements, as well as information on the operational status of movements through a customs information portal. Such a portal would mainly contain all relevant information about rules on the movement of goods across borders, and also relevant information from domains other than pure customs (e.g. agricultural, environmental and other legislation). Links will be provided to more detailed and/or national information featuring on the customs information portals of the national customs administrations. Single Window The objective of Single Window (see below) is to enable economic operators to lodge electronically and once only all the information required by customs and non-customs legislation for EU cross-border movements of goods. The envisaged national single windows will be connected to one another and will be supported by the Single Electronic Access Point (SEAP). Single window at Community level (158 Kb) Annex I (170 Kb): Inventory of certificates listed in TARIC Annex II (111 Kb): Inventory of existing electronic systems/documents and initiatives on electronic exchange of information, under Directorate General Taxation & Customs Union's competence Annex III (109 Kb): Inventory of existing electronic systems/documents and initiatives related to customs procedures, under other Directorates General's competence Annex IV (36 Kb): Scientific projects Annex V (400 Kb): United Nations Economic Commission for Europe - The Single Window Concept Annex VI (3.4 Mb): Presentations by participants of the inter-DG co-ordination group Annex VII (1.32 Mb): Case studies: Information on Member States' and third countries' single window approach Annex VIII (381 Kb): SITPRO - Single window and potential benefits to UK business Annex IX (31 Kb) : Web links Security cooperation with third countries Agreements with Switzerland and with Norway in the field of customs security measures The agreements waive the obligation for traders to provide customs with electronic information for security purposes prior to the import and export of goods in bilateral trade between Switzerland and the EU and between Norway and the EU. The agreement with Switzerland was signed on 25 June 2009 (OJ L 199 of 31 July 2009) and the necessary amendments to EEA Protocol 10 with Norway were adopted on 30 June 2009(OJ L 232 of 3 September 2009) . Both agreements entered into force on 1 July 2009. The agreements are subject to the condition that Switzerland and Norway apply in their trade with third countries customs security measures that are equivalent to those applied by the EU. This implies mutual recognition of so-called Authorised Economic Operators (AEO) and of systems of risk analysis and management. The agreements aim at maintaining the existing smooth trade flows both between Switzerland and Norway with the EU while ensuring a high level of security of the supply chain. Agreement with the United States of America on intensified customs cooperation on container security On 22 April 2004, an agreement was signed with the United States on container security within the scope of the existing EU/US customs co-operation agreement (see also Council Decision 2004/634/EC and press release: IP/04/525 ). The agreement aim to improve security for both the EU and the US. It will also guarantee the right balance between trade facilitation and security by: Ensuring that general customs control of legitimate trade takes due account of security concerns; Creating equal levels and standards of controls for US and EU operators.

The agreement established a working group to develop the operational elements of expanded cooperation, such as minimum standards for CSI ports, common risk criteria and trade partnership programmes (see the Annex of the Agreement). Results of EU-US cooperation Following this 2004 agreement, two expert working groups were established with specific agendas. One group focused on furthering joint efforts in security standards, and the other focused on comparing trade partnership programmes. A series of meetings were held to identify and define programmes and activities that would achieve these objectives (see press release IP/04/1360 ). The outcome of these meetings is a list of recommendations for measures and actions that concern, amongst other things, establishing minimum standards for risk management techniques, agreed operating procedures for customs controls and CSI requirements for EU ports. For more details please have a look at this. document (1.47 Mb) . The in-depth comparison of the customs to business partnerships programmes provided a complete overview of the EU Authorised Operator Concept (AEO) and the US Customs and Trade Partnership Against Terrorism (C-TPAT) programme. It serves as a basis for further development of standards and systems for securing and facilitating legitimate trade on both sides of the Atlantic. The developments and results of EU-US customs cooperation in this field are closely monitored by other international organisations (WCO, OSCE) and will certainly have an impact on work in international fora, such as the future work in connection with the WCO Framework of Standards (SAFE) (243 Kb) . In the 7th EU-US Joint Customs Consultative Committee (JCCC) meeting in Brussels on 31 January 2006, the US Customs and Border Protection (CBP) Acting Commissioner, Ms Deborah Spero, and the European Commission Director General of DG Taxation and Customs Union, Mr Robert Verrue, endorsed the results of the working groups. They also agreed on the recommendations proposed by the working groups, e.g. merging both working groups into one Steering Group and developing activities to support the implementation of operating procedures and standards developed by the experts. In the 8th EU-US JCCC meeting on 22 January 2007 in Washington, CBP Commissioner, Mr Ralph Basham, and the European Commission Director General of DG Taxation and Customs Union, Mr Robert Verrue, endorsed the results of the second phase of the EU-US customs cooperation on transatlantic supply chain security. They also agreed on focusing - in a third phase of cooperation on three priority actions: A pilot project to test the feasibility of the CSI concept at EU feeder ports which has now concluded, Customs-Trade Partnership Initiatives and Joint Risk Rules. At the 9th meeting of the JCCC on 6 March 2008 in Brussels, CBP Deputy Commissioner, Mr Jayson Ahern, and European Commission Director General of DG Taxation and Customs Union, Mr Robert Verrue, adopted the US-EU Joint Customs Cooperation Committee Roadmap towards Mutual Recognition of Trade Partnership Programmes. Customs security programmes were introduced by the US and the EU in order to support the development and implementation of measures to enhance the security of the supply chain through improved customs controls. Traders who demonstrate compliant efforts to secure their part of the supply chain benefit from increased customs facilitation. Mutual recognition arrangements allow the companies of one supply chain security programme to receive benefits similar to those conferred on companies participating in another country's programme. For more information see the press release (76 Kb) . In January 2009 an abridged version of the roadmap was agreed with US Customs and Border Protection. The purpose of this abridged version is to provide external partners, including members of the trade community, with some background on the relevant details of the roadmap and an insight into the identified and agreed tasks that must be completed in order to meet the foreseen deadline of Mutual Recognition in 2009. For more information see the abridged version of the roadmap (49 Kb) . Cooperation on supply chain security with China The European Union concluded an Agreement on Customs Cooperation and Mutual Administrative Assistance in Customs Matters with the People's Republic of China that entered into force on 1 April 2005. On 19 September 2006, the EC and China agreed to launch a pilot project on smart and secure trade lanes, with particular emphasis on sea containers. It aims to improve

cooperation on supply chain security and to work towards mutual recognition and reciprocity of security measures. The pilot project initially involves the ports of Rotterdam (NL), Felixstowe (UK) and Shenzhen (China). For more information see IP/06/1206 . As of 19 November 2007, the customs administrations of the United Kingdom, the Netherlands and China exchange electronic information on sea containers leaving their territory through Rotterdam, Felixstowe and Shenzhen. This is an important step in our customs cooperation with China and paves the way for reciprocity and mutual recognition of security measures. This step took place in close cooperation with the European Commission in the framework of the secure and smart trade lanes pilot project. Both sides agreed to exchange experience and develop best practices in order to better understand and prepare the implementation of the WCO Framework of Standards to Secure and Facilitate Global Trade. They also agreed to pursue the objectives of reciprocity and mutual recognition of measures for security and facilitation to be implemented between the General Administration of Customs of the People's Republic of China and the customs authorities of the European Union. In the short term the Smart and Secure Trade Lane Pilot Project will allow: The testing of end-to-end supply chains from the point of packing containers, through the entire container journey, to the point of final destination; Agreement on and testing of criteria for economic operators to be granted authorised economic operator (AEO) status; Agreement on and testing of data requirements for pre-loading security clearance for "door to door" supply chains; The definition of and agreement on minimum risk rule set (profiles) and minimum control standards for customs clearance; The testing and evaluating of IT and technical solutions that enhance security and control systems while facilitating legitimate trade. Comparison of equivalent AEO legislation in order to prepare the ground for mutual AEO recognition between the EU and China. The evaluation of the first phase of the pilot project has been launched in spring 2009 and should be finalised by the end of the year. Cooperation with Japan on mutual recognition of security measures and AEO The EU-Japan Joint Customs Cooperation Committee established an expert dialogue on AEOs at its first meeting, held in Brussels on 11 February 2008. This dialogue brings together AEO experts from the EU and Japan to conduct an in-depth comparison of their respective AEO programmes. This analysis includes both legislative aspects and implementation, with the aim of preparing for an eventual mutual recognition of AEOs under the EU-Japan Customs Cooperation and Mutual Administrative Assistance Agreement. Achieving mutual recognition of AEO programmes between the EU and Japan would facilitate trade and EU exports and also increase end-to-end supply chain security. Security initiatives of non-EU Customs administrations Security initiatives of non-EU Customs administrations U.S. Initiatives Container Security Initiative In response to potential terrorist threats, US Customs authorities have issued initiatives to improve security in the international supply chain. One of these initiatives is the Container Security Initiative (CSI), which pre-selects, according to risk assessment criteria, containers destined for the US prior to loading on the ship in a foreign port. The US has also published a Regulation on advanced cargo manifest information, the so-called '24 hours rule'. This Regulation obliges carriers to provide electronic manifest data to the Bureau of Customs and Border Protection (CBP), 24 hours before loading sea containers bound for the US. For air cargo, information should be made available straight after take off. This enables CBP to select high-risk shipments via their automated system. CSI is currently operational in the following European ports: Antwerp and Zeebrugge, (Belgium); Le Havre and Marseille (France); Bremerhaven and Hamburg (Germany); Piraeus (Greece); La Spezia, Genoa, Naples, Gioia Tauro and Livorno (Italy), Rotterdam (The Netherlands);

Lisbon (Portugal); Algeciras (Spain); Gothenburg (Sweden); Felixstowe, Liverpool, Thamesport, Tilbury, and Southampton (United Kingdom). For more information see the US Customs page on the CSI initiative. 100% scanning of maritime containers US legislation adopted in 2007 foresees 100% scanning at foreign ports of all US-bound maritime containers by 1 July 2012. The Commission, Member States, port operators and the trade community are concerned about this legislation, in particular with respect to the lack of proven security benefits, the potential costs of the scanning requirement, its possible effects on competitiveness and its negative impact on transatlantic trade flows. In 2008 the Commission carried out a preliminary impact assessment of 100% scanning based on Member States' contributions. These comments (130 Kb) were taken into account by the US Department of Homeland Security and annexed when reporting to the US Congress in June 2008. To back the EU position with empirical data the Commission has analysed the impact of the legislation on the security of the supply chain, on maritime transport and on trade. The main findings of these studies, along with the EU's alternative approach to supply-chain security, are presented in a Commission staff working paper (SEC/2010/131 (551 Kb) ) adopted in February 2010. The studies confirm that the 100% scanning legislation would create a disproportionate economic burden without proven benefits for security. The EU advocates an alternative approach based on multilayered risk management. See the studies commissioned by the European Commission's Directorates General for Taxation and Customs Union (1.48 Mb), Transport and Energy , and Trade . Canada The Free and Secure Trade (FAST) program is a joint Canada-US initiative involving the Canada Border Services Agency, Citizenship and Immigration Canada, the United States Bureau of Customs and Border Protection (CBP). FAST supports moving pre-approved eligible goods across the border quickly and verifying trade compliance away from the border. It is a harmonised commercial process offered to pre-approved importers, carriers, and registered drivers. Shipments for approved companies and transported by approved carriers using registered drivers, will be cleared into either country with greater speed and certainty, and at a reduced cost of compliance. The EU and Canada envisage strengthening their cooperation on supply chain security and AEO. For more information see the Canada Border Services Agency. Australia Frontline is a cooperation programme between customs and industry groups involved in international trade and transport. The programme draws on the knowledge and expertise of people in the industry to help prevent illegal activities. For more information see the website of the Australian Customs Service. New Zealand The Customs Service is working with business on improving export security. Is it important that exporters keep up to date with developments. An overview is contained in the publication Securing New Zealand's Exports. The latest information is contained in the publication Secure Exports Partnership (SEP) - Important Information for Applicants. New Zealand is cooperating with the US on mutual recognition of their SEP and the US Customs and Trade Partnership against Terrorism (C-TPAT). Security initiatives in international fora Since 2001/2002, the World Customs Organization (WCO) has been working on developing globally applicable measures to increase supply chain security while facilitating legitimate trade. In June 2002, the WCO Council adopted a Resolution on Security and Facilitation of the International Trade Supply Chain. Based on the Resolution, a Task Force was established to assist the Secretary General in the development and implementation of the measures outlined in the Resolution. In June 2004, the Council adopted a second resolution (9 Kb) resolving a High Level Strategic Group (HLSG), to build on the work of the Task Force. It was comprised of Director Generals, and its goal was to provide leadership and guidance on security and facilitation matters.

At its Council Session on 24 June 2005, the World Customs Organization (WCO) adopted the Framework ofStandards to Secure and Facilitate Global Trade (243 Kb) . This text - now called "SAFE Framework of Standards" - provides a structured framework for customs and their business partners to secure the international supply chain and facilitate the movement of legitimate goods (see press release). The framework also aims to strengthen networking arrangements between customs administrations. This will improve their capability to detect high-risk consignments and establish formal arrangements for cooperation between customs and the business community. The 17 standards that form an part of the framework are balanced between security and trade facilitation measures. They should also help to improve the collection of customs duties, particularly in developing countries. WCO members agreed to establish a dedicated fund to finance capacity building initiatives, such as diagnostic studies to determine the abilities of WCO members to implement the Framework of Standards. They have also agreed to help each member country committed to the framework to increase its ability to meet the standards that have been set. International Customs Co-operation and Mutual Administrative Assistance Agreements Introduction For the policy of the European Community, cooperation at international level between the custom authorities is an important tool for providing a balance between the necessary trade liberalisation and the increasing international trade with the world's large trading partners. This cooperation should help customs authorities to use new instruments or increase the efficiency in existing tools for the control of the trade flows and the fight against fraud and illegal activities. In coherence with this policy, the Customs Cooperation and Mutual Administrative Assistance Agreements, allow the parties to put the necessary tools for customs cooperation in place. For the benefit of world trade and international assistance to fight against customs fraud, the European Union has signed customs cooperation and mutual administrative assistance agreements (Korea, Canada, Hong Kong, US, India, China and Japan). The European Union also has Partnership and Co-operation Agreements with a number of countries, including Russia and Ukraine, which cover customs co-operation and include a protocol on mutual administrative assistance. What is in the Agreements on customs co-operation and mutual assistance in customs matters? The agreements are part of the European Community's strategy vis--vis third countries as regards customs co-operation. They focus on strengthened co-operation of customs authorities with a view to creating a level playing field for economic operators and to exchanging information on customs legislation and customs rules as early as possible. They provide also for the possibility to exchange information on technical assistance granted to third countries with a view to improving these actions. The agreements specify also that both sides shall strive for simplification and harmonisation of customs procedures, taking into account the work done by international organisations like for example the World Customs Organisation (WCO) and the World Trade Organisation (WTO). They stipulate that both sides shall cooperate as regards the computerisation of customs procedures and formalities with the aim of facilitating trade between them. The agreements contain also a chapter on mutual assistance in customs matters, which lay down under which circumstances and how customs authorities can exchange data relating to breaches of customs legislation and fraud cases. The rules have to be strictly applied. Moreover, data protection rules have to be applied and the confidentiality of information has to be respected. The existing Customs Cooperation agreements provide also for the possibility to expand their scope and to increase the levels of customs co-operation. The Contracting Parties may enlarge the scope of the Agreement by mutual consent in order to supplement the areas of cooperation on specific areas: The European Community has formally expanded the customs co-operation agreement with the United States by introducing efficient and effective control measures to improve the security of transatlantic maritime transport of containers. The expansion of the agreement on 22 April 2004 to cover co-operation on CSI and

related matters, striving for the right balance between security and facilitation, shows the possibility for an expansion of the scope of the agreement is indeed necessary as the area of customs co-operation and the role of customs are constantly evolving. There is a possibility to maintain pre existing bilateral agreements as long as they are not in contradiction with Community competences and the Customs Cooperation and Mutual Administrative Assistance Agreements. The provisions of the latter, shall take precedence over the provisions of any bilateral agreement on customs cooperation and mutual administrative assistance which have been or may be concluded between individual Member States and the contracting party insofar as the provisions of the latter are incompatible with those of these Agreements. How are the Agreements on customs co-operation and mutual assistance in customs matters implemented? Each agreement establishes a Joint Customs Co-operation Committee which consists of representatives of the customs authorities of the Contracting Parties, i.e. representatives of the third party competent services (i.e. the Canadian Border Services Agency), the European Commission and of the customs authorities of Member States. The Joint Committee has to ensure that the agreement is correctly applied and has examined all questions arising from its application, for example all issues relating to problems concerning the application of customs rules in trade (classification of goods, origin problems etc) or concerning future developments of customs legislation (computerisation; changes to the Customs Code). It serves also as a forum to discuss and prepare meetings relating to international organisations like the WCO. The Joint Committee can adopt decisions and recommendations to strengthen co-operation or to strive for the solution of problems encountered in the application of customs rules. The formal Joint Customs Co-operation Committee meetings are mostly used to enshrine joint positions and to formally agree a common approach. In between the meetings, both sides cooperate closely through informal channels and also in the margins of the many international meetings. A high-level International Customs Conference EU-China took place on 1 and 2 September 2010 in Shanghai. See the details. ASEAN In May 1997 the Council authorised the Commission to negotiate customs cooperation agreements on behalf of the Community with regard to the ASEAN countries, taking into account the 1996 Commission Communication which encourages the reinforcement of cooperation in key areas of trade and economic development, inter alia in the customs field. In 2003, the Council of Ministers has endorsed the priority of intensifying some policy areas with the ASEAN countries (Brunei, Indonesia, Malaysia, Philippines, Singapore, Thailand and Vietnam) and stated its support to the Commission's call for rebalancing the overall relationship with South-East Asia by offering the possibility of bilateral agreements with interested countries whilst confirming the strong EU commitment to support the process of ASEAN integration. Accordingly, the Commission is ready to start consultations with interested countries of the region in view of the negotiation of bilateral Customs Cooperation Agreements, hoping that this will open up to the other members of ASEAN. The cooperation should help custom authorities to develop new instruments for the control of the trade flows and the fight against fraud and illegal activities. From a customs' point of view, the main objectives of the relation between EC and ASEAN are to establish customs co-operation between the parties as well as to provide a legal basis for mutual administrative assistance. The mandate of the Council allows for the possibility to exchange information on customs legislation, procedures, and control methods, exchange of officials, joint training exercises, simplification, harmonisation and computerisation of procedures. Canada On 4 March 2013 the EU and Canada agreed to cooperate more closely to ensure the security of their supply chains. An agreement was signed, which builds on the existing customs cooperation agreement with Canada and extends it to include supply chain security and related risk management matters.

It will allow closer cooperation between the two parties, with a view to ensuring a high level of security while facilitating legitimate trade between the EU and Canada. Cooperation will include work towards mutual recognition of risk management techniques, risk standards, security controls, and trade partnership programmes (the EU Authorised Economic Operator (AEO) and Canada's Partners in Protection (PIP)). The agreement will be concluded after the ratification process in the EU and Canada, which is expected to take place in the coming months, is completed. Background Cooperation between the European Union and Canada in the area of customs is based on the agreement on customs cooperation and mutual assistance in customs matters that entered into force on 1 January 1998 (see Official Journal L 7 of 13/01/1998 , page 37). The new agreement complements the customs cooperation agreement. It expands this cooperation by covering supply chain security and risk management. China EU - China Customs cooperation In 2004, the Agreement between the European Union and the Government of the People's Republic of China on cooperation and mutual administrative assistance in customs matters was signed in The Hague (seeOfficial Journal L375 of 23 December 2004, p.20). This agreement provides for a framework for customs cooperation and mutual administrative assistance between the EU and China and establishes the EU-ChinaJoint Customs Cooperation Committee (JCCC), which oversees the proper functioning of the agreement. The JCCC normally meets annually, alternately in the EU and in China. The 6th meeting took place on 25 June 2012 in Brussels. The agreement provides for an effective communication and cooperation mechanism between the customs authorities in the EU and China. It allows them to assist one another to ensure the proper application of customs legislation and to prevent, investigate and combat any breaches. For example, European officials may, under certain conditions, be present at enquiries into smuggling activities carried out in China and vice versa. On the basis of this agreement European and Chinese customs authorities work together in a number of fields, such as the fight against counterfeits and piracy, supply chain security & trade facilitation, and the prevention of diversion of drug precursors. Promoting legitimate trade In 2010 Commissioner emeta and Chinese Minister of Customs Sheng signed the Strategic Framework for Cooperation Enhancing EU-China Customs Cooperation to Promote Legitimate Trade. The aim of this Framework is to increase coherence in the different fields of cooperation and to bring them under a single management structure. It also determines clear priorities and objectives for the period up until end of 2012. The main fields of cooperation are: Combating counterfeit and piracy The 2009 EU-China Action Plan on Intellectual Property Rights Customs Enforcement was extended until the end of 2012 by Commissioner emeta and Chinese Customs Minister Sheng in the margins of the 3rd EU-China High-Level Economic and Trade Dialogue (December 2010, Beijing.) The Action Plan entails: exchange and analysis of information on seizures, trends and general risks creation of a network of ports and airports to target high-risk consignments better cooperation with other law enforcement authorities establishment of joint partnerships between business communities in China and the EU. Supply-chain security and trade facilitation

In 2006, the EU and China launched the Smart and Secure Trade Lanes (SSTL) pilot project to strengthen end-to-end supply chain security based on multi-layered risk management. Controls performed at export allow customs to better target dangerous traffic at the beginning of the supply chain. Thus trade-facilitation benefits can be provided to legitimate trade. The operational phase began in 2007 with the customs administrations of China, the Netherlands and the United Kingdom exchanging electronic information on sea containers (see press release ). This first phase involved the shipment of over 5,000 containers. In 2011 the number of participating ports increased from 3 to 9. In the EU, the ports of Antwerp, Genoa, Hamburg and Le Havre joined Felixstowe and Rotterdam. In China, Chongqing and Shanghai joined Shenzhen. The scope broadened to cover non-Authorised Economic Operator (AEO) companies, as well as transhipped and consolidated containers. (see press release ). The EU and China are also working together towards the mutual recognition of each other's Authorised Economic Operators (AEO) programmes. This would offer both sides benefits by facilitating trade between certified trustworthy traders. It also enables customs authorities to focus attention on high-risk traders. Drug precursors Drug precursors are chemical substances frequently used to manufacture illicit drugs such as ecstasy or amphetamines. The 2009 EU-China Agreement on drug precursors (see page 8) and substances frequently used in the illicit manufacture of narcotic drugs or psychotropic substances provides for cooperation in trade monitoring and mutual administrative assistance on drug precursors. Hong Kong EU Hong Kong Customs cooperation The volume of trade between Hong Kong and the EU makes cooperation between their customs authorities very important to the facilitation of legitimate trade flows and the preservation of supply chain security. On 13 May 1999, the then European Community and Hong Kong, China signed an Agreement on Cooperation and Mutual Administrative Assistance in Customs Matters (CCMAA). See Official Journal L 151/21 of 18 June 1999 for the text of the agreement. The CCMAA, which entered into force on the 1 June 1999, was the territory's first binding agreement on customs cooperation after the handover to the People's Republic of China in 1997. What the CCMAA covers It provides a legal framework to promote supply-chain security and trade facilitation It also aims to improve the fight against fraud Seeks to improve cooperation on the protection of intellectual property rights (IPR) The Joint Customs Cooperation Committee (JCCC), meeting every two years since 2002, oversees the implementation of the CCMAA. Customs representatives and experts from the EU and Hong Kong discuss practical ways of working together to best implement the agreement. EU-Hong Kong JCCC meetings Latest (9th) JCCC Hong Kong, 22 November 2012 Chaired by Antonis Kastrissianakis, Director, DG Taxation and Customs Union, European Commission and David T. W. Fong, Assistant-Commissioner, Hong Kong Customs. Issues discussed The EU shared experiences of its supply chain security policies, particularly the EU-China Smart and Secure Trade Lanes (SSTL) Pilot Project, which is being prepared for phase III of the project; further, its air cargo security action plan. The Parties exchanged information on their respective authorised economic operator (AEO) programmes and Hong Kong explained its Intermodal Transhipment Facilitation Scheme.

 The EU stressed the importance it places on IPR enforcement and international cooperation towards this end, updating Hong Kong on its IPR action plan with China. Hong Kong further briefed the EU on its own holistic IPR enforcement strategy and the mechanisms in place for sharing information with third parties. The meeting included a site visit to Antwerp Port, allowing the delegations a valuable opportunity to see the practical experiences of private business and Belgium Customs in applying the SSTL pilot project to their customs procedures. (8th) JCCC Hong Kong, 6 September 2010 Chaired by Richard M F Yuen, Commissioner of Hong Kong Customs, and Walter Deffaa, Director-General for Taxation and Customs Union at the European Commission. Issues discussed Supply chain security and trade facilitation the EU delegation presented the EU's supply chain security policy. This included international matters, particularly the EU-China Smart and Secure Trade Lanes (SSTL) Pilot Project, the first phase of which had been successfully completed. The Hong Kong delegation also explained their own supply chain security developments, in particular their implementation of an authorised economic operator (AEO) pilot project. The EU promoted its efforts in the field of IPR enforcement, which included its IPR action plan with China. Hong Kong also presented their own actions, highlighting their establishment of a special IPR task force. The meeting included a site visit to the Kwai Chung Container Terminals, allowing the delegations a valuable opportunity to see customs procedures in action. Previous JCCC meetings: 7th JCCC Brussels, 30 January 2008 6th JCCC Hong Kong, 18 November 2005 Developments in Hong Kong The current Commissioner of Hong Kong Customs and Excise is Mr Clement Cheung. Mr Cheung was appointed in September 2011. Free Trade Agreement with EFTA Hong Kong signed a comprehensive free trade agreement with the four members of the European Free Trade Association (EFTA) in 2011, covering issues such as trade facilitation and IPR enforcement. See also: World Customs Organisation Hong-Kong Customs Security cooperation between EU and non-EU countries European External Action Service - Hong Kong DG Trade Hong Kong statistics EU Commissioner emeta's 2010 Hong Kong visit India An agreement with India on customs co-operation and mutual administrative assistance in customs matters was signed in Brussels on 28 April 2004 . The priority areas are: simplification of customs procedures including exchanges on the difficulties encountered by the economic operators and sharing experience and expertise to develop procedures and modern control methods compatible with international standards and with the party's concerns. In this context, the role of the customs within the framework of the fight against piracy and counterfeiting and to facilitate trade is a priority for the EU. Another area of focus is the discussions on the respective approaches of India and the Community to reconcile the facilitation of trade and the security of the international logistical chain to face terrorism threats.

Finally, the agreement puts into operation a mutual administrative assistance mechanism that covers information regarding activities detected or planned which are or could be operations in breach of customs legislation. This includes information regarding activities that may result in offences within the territory of the other Party, such as incorrect customs valuation, classification or declarations and certificates of origin, invoices, or other documents known to be, or suspected of being, incorrect or falsified. The Commission has negotiated the agreement with India on behalf of the European Community on the basis of the mandate it received from the EU's Council of Ministers on 28 January 2003 . The agreement, which is very close to other agreements concluded by the EC with its major trading partners, has been published in the Official Journal L 304 of 30 September 2004. The first meeting of the Indian Joint Customs Co-operation Committee took place on 22 and 23 March in New Delhi and the second meeting took place on 4 December 2006 in Chenna. Japan Given the importance of trade between the EU and Japan, it is vital that their customs authorities work together to facilitate legitimate trade flows and increase the efficiency of controls. On 30 January 2008, the then European Community and the Government of Japan signed an Agreement on Cooperation and Mutual Administrative Assistance in Customs Matters (CCMAA) See on pages 23-24. The CCMAA, which entered into force on 1 February 2008, provides a legal framework to promote security of the supply chain andfacilitate trade for reliable traders. It also aims to improve the fight against fraud and to enhance cooperation on the protection of intellectual property rights (IPR). To oversee implementation of the CCMAA, a Joint Customs Cooperation Committee (JCCC) meets once a year. These meetings bring together customs representatives and experts from both the EU and Japan to discuss practical ways of working together to best implement the agreement. Latest news: 5th EC-Japan Joint Customs Cooperation Committee (JCCC) Brussels, 27 June 2012 (press release) (86 Kb) The 5th JCCC was co-chaired by Director-General Heinz Zourek, head of the European Commissions Directorate-General for Taxation and Customs Union, and Director-General Atsuo Shibota, head of the Customs and Tariff Bureau at Japans Ministry of Finance. Discussions were wide-ranging and constructive, reflecting the close cooperation between the EU and Japan on customs matters. Delegations appraised the implementation of mutual recognition of Advanced Economic Operators, first implemented in May 2011, which helps to enhance supply chain security and facilitate trade. The good EU-Japan cooperation in the field of border enforcement of intellectual property rights, to enhance the protection of EU and Japanese citizens from counterfeit goods, was among the other issues discussed, as was the continuing work on risk management. Mutual recognition of authorised economic operators Following the signature of the decision on the mutual recognition of AEOs between the EU and Japan on 24 June 2010 (Signature of the mutual recognition of AEOs ), the implementation of the mutual recognition of authorised economic operators (AEOs) started on 24 May 2011. Since then, both EU and Japanese AEOs have enjoyed trade facilitation benefits in the partner countries (see AEO communiqu ). This was preceded by the adoption of the 'specific adequacy decision ' by the European Commission on Japanese data protection on 29 March 2011, which made the data exchange possible. Previous developments: 4th EC-Japan Joint Customs Cooperation Committee (JCCC) (40 Kb) - See also the press release Signature of the mutual recognition of AEOs, 2010 (149 Kb) 3rd EC-Japan Joint Customs Cooperation Committee (JCCC), 2010 (12 Kb)

2nd EC-Japan Joint Customs Cooperation Committee (JCCC), 2009 (112 Kb) 1st EC-Japan Joint Customs Cooperation Committee (JCCC), 2008 (38 Kb) Useful links: World Customs Organisation Japan Customs Taxation and Customs Union Directorate-General Security cooperation with third countries EEAS Japan Korea Based on a Recommendation of the Commission for a Council Decision concerning the negotiation of customs cooperation agreements with the Community's main trading partners of 14 October 1992 (SEC (92)1857 final), the Council decided on 5 April 1993 to authorise the Commission to start negotiations with our main trading partners, including Korea. After four years of negotiation Korea was the first country in Asia to conclude a customs cooperation agreement with the European Community. The agreement was signed on 10 April 1997 (Official Journal L 121, p. 14 of 13.05.1997). The discussions during the EC-Korea Joint Customs Co-operation Committee meetings focus on customs related trade barriers, the enforcement of intellectual property rights and possibilities for establishing an exchange of officials, border measures for IPR protection, policy coordination in international organisations or projects for the exchange of personnel and common training. United States of America The European Community and the United States concluded in 1997 an agreement on customs co-operation and mutual assistance in customs matters. The agreement provides the framework for customs co-operation and establishes the EC-US Joint Customs Co-operation Committee (JCCC). The Joint Committee can adopt decisions and recommendations to strengthen co-operation or to strive for the solution of problems encountered in the application of customs rules to transatlantic trade. On 22 April 2004, the European Community and the United States expanded the scope of the 1997 co-operation agreement by concluding an agreement (22 Kb) to include transport security co-operation, and in particular co-operation as regards the US Container Security Initiative (CSI) within the scope of the EU/US customs co-operation and relations (see IP/04/525 ). The Council Decision related to the above-mentioned agreement has been published in the Official Journal L 304 of 30 September 2004. Bilaterally the work is carried out in the Joint Customs Cooperation Committee and an expert group. Our aim is achieving equivalence between the EU Authorised Economic Operator provisions and the U.S. Customs-Trade Partnership against Terrorism. EU and U.S. customs authorities are working on simultaneous risk analysis on identical data to facilitate exchange of information between customs administrations on the results of risk analysis, and to promote co-operation on enforcement and prevention of incidents. As part of container security co-operation, minimum requirements and control standards for feeder ports have been agreed and are currently being implemented. Counterfeiting is a growing problem affecting the competitiveness and innovation of business on both side of the Atlantic. The EU-US Joint Customs Co-operation Agreement is an essential tool in the fight against counterfeit and piracy. There is close cooperation between theEuropean Commission's Taxation and Customs Union Directorate General and the United States' CBP in enforcement of anti-counterfeiting. The customs enforcement forms an integral part of the EU-US Action Strategy for the Enforcement of Intellectual Property Rights which was endorsed by the EUUS Summit of 21 June 2006. This strategy aims at promoting strong and effective enforcement in third countries, strengthening co-operation to reduce global piracy and counterfeiting, and fostering public private partnerships to protect intellectual property.

Joint operation INFRASTRUCTURE, targeting counterfeit semiconductors (integrated circuits) and computer networking equipment implemented the "joint IPR border enforcement action" portion of the strategy as agreed to by the EU and US. These products were selected for the joint operation because they present safety and security risks in addition to IPR infringement risk. Operation INFRASTRUCTURE resulted in the seizure of over 360,000 counterfeit integrated circuits bearing over 40 different trademarks. It was the first Intellectual property Rights (IPR) enforcement operation undertaken by the European Union and the United States' Customs and Border Protection. For more information see the press release (68 Kb) . Bilateral agreements between Member States and the United States Many Member States have had concluded agreements on customs co-operation and mutual assistance with the United States before the 1997 agreement between the European Community and the United States has been concluded. The 1997 agreement provides therefore for the possibility to maintain these bilateral agreements as long as they are not in contradiction with Community competencies and the 1997 agreement. Insofar as existing bilateral agreements were incompatible with the 1997 agreement, the latter took precedence over these provisions. The agreement expanding the 1997 agreement that entered into force on 22 April 2004 establishes a consultation procedure in respect of further bilateral arrangements and agreements, Member States will conclude with the United States as regards the inclusion of Community ports in the US Container Security Initiative. This is necessary as the Community agreement cannot address issues like the stationing of US Customs Officials in individual Community ports. The arrangements have in any case to be in conformity with the Treaty establishing the European Community and the expanded agreement. The purpose of the consultations between Member States and the Commission in respect of bilateral arrangements and agreements is the facilitation of the exchange of information and consistency with the Community approach. It shall ensure that any arrangement is consistent with the Treaty and with Community policies, in particular the common framework of cooperation with the USA as set out in the expanded agreement. The consultation procedure is obviously without prejudice to the respective competencies of Member States and Community.