CONTENTS

Articles
444 Beyond Turkey-EU Customs Union: Predictions for Key Regulatory Issues in a
Potential Turkey-U.S. FTA Following TTIP
Onur Bülbül & Aslı Orhon

456 2016 and the Application of an NME Methodology to Chinese Producers

in Anti-dumping Investigations
Laurent Ruessmann & Jochen Beck

463 Drawing Down Bribery Risks: Complying with the FCPA While Doing Business
in Afghanistan in 2014 and Beyond
Nate Cunningham

478 Assessing the Economic Impact of the Proposed “Indian Ocean

Rim-Association for Regional Cooperation (IOR-ARC)” Preferential Trade
Agreement
Mohammad Masudur Rahman, Qiner Jiang, Laila Arjuman Ara & Zhou Kai

Commentary
493 Gone with the Wind III: Ralls’ Historic Appeal and Lessons for Foreign Investors
Jeremy Zucker, Darshak Dholakia & Hrishikesh Hari

Interview
497 Jean Michel Grave, Head of Unit, DG Taxation and Customs Union, European
Commission
Interviewed by Eugenia Costanza Laurenza

Volume 9 October 2014 10

 INTERVIEW

Jean Michel Grave, Head of Unit, DG Taxation and

Customs Union, European Commission
Interviewed by Eugenia Costanza Laurenza*

1. Would you like to tell us about your professional amendment to the Community Customs Code and its
experience and what brought you to work on implementing provisions, as well as on the corresponding
customs matters? changes to the Common Transit Convention.
In 2001, I moved to the Rules of Origin unit where I
My decision to work on customs matters was, to some
was responsible for preferential origin rules in the pan-
extent, a matter of chance. After obtaining my law degree,
European zone and in the context of the generalized system
I passed a state competition to join the French customs
of preferences (GSP) and later on for the ACP Cotonou
administration as a customs officer. I started working in
convention and future EPAs to replace it. I worked on the
Paris, at the customs administration and in the
Commission’s Communication entitled ‘The rules of
Directorate-General responsible for customs procedures with
origin in preferential trade arrangements:
an economic impact. I participated as France’s delegate and
Orientations for the future’,2 which constituted the
expert to the committee competent for those matters. That’s
blueprint for the reform of preferential rules of origin that
where I established first contact with the service of the
started to apply in the GSP area as of 2011. I left DG
European Commission in charge of the customs union. I
TAXUD’s Rules of Origin unit in end 2006 and became
soon realized that I wanted to join that service, which held
Head of Unit in my current unit, which deals with
main responsibility for policy and law making on EU
customs legislation. When I arrived, the unit was
customs matters.
responsible for general customs legislation, infringements
I started working for the Commission in 1989 as a
procedures, legal issues and customs debt. In 2012, the unit
national expert and I have worked as the Directorate-
was reorganized against the background of the proposal for
General for Taxation and Customs Union (DG
a Union Customs Code, and infringements procedures,
TAXUD) ever since. In 1992, I passed an EU
legal issues and customs debt were replaced by customs
competition and became an EU civil servant.
procedures on import, export, transit and with an economic
Within DG TAXUD, I covered many areas. I started
impact.
in the legal unit of DG TAXUD, where I was responsible
for infringement procedures and assisting the Legal Service
2. What are the main areas of customs legislation that
in Court cases. At the end of 1995, I headed the Task
your unit is currently dealing with?
Force attached to DG TAXUD’s Transit unit, established
pursuant to the European Parliament’s Committee of There are four main projects that the unit is currently
Inquiry into the Community Transit System. The Task managing: (i) the implementation of the Union Customs
Force produced the Communication from the Code;3 (ii) the Proposal for a Directive of the
Commission to the European Parliament and the European Parliament and of the Council on the
Council containing the Action Plan for Transit in Union legal framework for customs infringements
Europe – A New Customs Policy.1 As Head of Sector and sanctions;4 (iii) the implementation and management
in DG TAXUD’s Transit unit, I worked on the of the Transports Internationaux Routiers (TIR) customs

Notes
*
Associate lawyer, FratiniVergano-European Lawyers.
1
COM(97) 188 final, 30 Apr. 1997.
2
COM(2005) 100, 16 Mar. 2005.
3
Regulation (EU) No. 952/2013 of the European Parliament and of the Council of 9 October 2013 laying down the Union Customs Code (recast), OJ L 269, 10/10/2013, p. 1.
4
COM(2013) 884 final, 13 Dec. 2013.

497
 Global Trade and Customs Journal
transit system; and (iv) the so-called Blue belt package
(i.e., a set of measures intended to relax customs formalities
for EU goods shipped within EU waters). Blue Belt
initiative includes establishing an ‘eManifest’, a tool
conceived together with the Commission’s Directorate-
General for Mobility and Transport (DG MOVE) to
facilitate movements of EU goods by sea within the
internal market. Once introduced, it will consist in a
harmonized electronic cargo manifest that will facilitate
recognition of status of EU goods carried by vessels that
have left the EU’s customs territory, thus making them
benefit more easily from free movement.
The job of my unit within the Commission also includes
assisting Member States, other Directorates-General
(notably, the Directorate-General for Trade, hereinafter
‘DG TRADE’) or private sector in solving practical
problems concerning the implementation of customs rules.
This may take place through the issuance of interpretative
guidelines or by proposing amendments to existing
legislation, aimed at simplifying procedures and adapting
customs rules to the reality of commercial relations. An
example is the amendment to the implementing provisions of
the Customs Code, adopted in October 2013, simplifying
the granting of total relief from import duties for portable
musical instruments temporarily imported into the EU for
purposes of utilization as professional equipment.
3. The union customs code contains measures to
complement the transition by customs to a paperless
environment, it strengthens benefits for authorized
economic operators and brings about changes in EU
customs procedures. This new instrument is a recast
of the modernized customs code adopted in 2008.
why this recast and what are the objectives of this
new framework?
The biggest challenge of the Modernized Customs Code5
was related to computerization. The instrument required
the Commission, national customs administrations in
Member States’ and economic operators to engage in a
complex set of actions to define and develop a wide range of
electronic systems. This called for substantial investments to
be made on information technology (IT) systems and
supporting activities. Considerable efforts were requested
from all stakeholders, including from the business
community, which had to adapt to operate according to new
business models.
Although, as you said, the Modernized Customs Code
entered into force on 24 June 2008, it was only due to be
applicable once all its implementing provisions were in
force, which was set to occur by no later than 24 June
2013. However, and contrary to what was originally
Notes
5
Regulation (EC) No. 450/2008 of the European Parliament and of the Council of 23 April 2008 laying down the Community Customs Code (Modernised Customs Code), OJ L 145, 4 Jun.
2008, p. 1.
498
foreseen, it became evident that expected computerization
would not be achieved by the June 2013 deadline.
In order to remedy this, the recast effected through the
Union Customs Code caters for a progressive phasing-in of
computerization to start on the date of application of the
Union Customs Code (1 May 2016) and to be completed
by 31 December 2020 (at the latest). Transitional periods
are foreseen for the provisions related to the use of electronic
data-processing techniques and electronic systems, which
will not be applicable until such systems are available. The
recast, therefore, preserves the objectives of the Modernized
Customs Code, which were fully in line with existing
policies and objectives on trade in goods through the EU’s
customs territory, while adopting a new IT work
programme, together with the necessary legal act to ensure
the transition.
Additional reasons for the recast are connected to the
fact that the Modernized Customs Code needed to be
adapted to the new institutional framework set up by the
Treaty of Lisbon, as well as to all regulatory changes
introduced since 2008.
4 The customs union is the foundation of the EU. a
borderless europe has been paramount to the creation
of a single market and the perception of the eu as a
trading partner in the global scene. Customs
legislation has played a fundamental role in the
establishment and enforcement of the customs union.
What are the main challenges that the EU currently
faces with respect to the union customs code?
One of the main challenges of the Union Customs Code
framework is governance. We are currently dealing with
twenty-nine IT systems (i.e., those of the twenty-eight
Member States plus that of the Commission). The system
envisaged by the Union Customs Code will result in greater
harmonization that would deserve increased centralization,
which has given rise to concerns linked to the possible loss of
control over national procedures and systems by Member
States. The challenge is, therefore, to keep Member States
actively involved in the definition on how the new systems
will operate while, at the same time, building and
achieving economies of scale and providing traders with a
harmonized platform for their customs operations.
Furthermore, it cannot be forgotten that national customs
administrations deal with EU and non-EU matters at the
same time. On a technical and management level, it is
difficult for customs administrations to operate according to
different sets of systems, depending on the nature of the issue
at stake. Nonetheless, the Commission believes that technical
solutions exist and that they are available to assist national
authorities overcome this sort of difficulties. In particular,
 Jean Michel Grave, Head of Unit, DG Taxation and Customs Union, European Commission
the new framework allows for long implementation periods,
as well as technical assistance and training for national
customs authorities.
5 Let’s talk about implementation. there are a number
of legal acts that the commission needs to prepare
and adopt for the union customs code to be
operational
The Union Customs Code was adopted on 9 October 2013
6 The proposal for a directive of the european
and entered into force on 30 October 2013, following
publication in the Official Journal. Whereas the
substantive provisions will only apply as of 1 May 2016,
the provisions containing the delegation of power or
conferring implementing powers to the Commission apply as
of the date of entry into force of the Code. These provisions
constitute the legal empowerments for the Commission to
adopt all the necessary delegated and implementing acts
before the substantive provisions become applicable. My unit
is currently coordinating this process. I expect that we will
finalize the preparation of delegated and implementing acts
necessary to supplement and implement the Union Customs
Code by the end of the year to allow for their adoption and
entry into force by May 2015, then leaving about one year
to stakeholders to be prepared for their actual application as
from 1 May 2016.
More specifically, there are three separate acts that are
required for the initial application of the Union Customs
Code: (i) a ‘final’ delegated act; (ii) a ‘general’
implementing act; and (iii) a ‘transitional’ delegated act.
While the ‘final’ delegated act and the ‘general’
implementing act will describe the provisions to be fully
applied at the latest on 1 January 2021, at the end of the
IT transitional periods as standard rules of the Union
Customs Code, the ‘transitional’ delegated act will cater to
transitional periods and measures. We also foresee that, in
addition to these three acts, other separate implementing acts
may need to be developed and adopted for specific or
individual purposes while not being absolutely required to
be adopted before 1 May 2016. For example, implementing
acts may be needed to allow Member States to derogate from
the obligation to exchange information on the basis of
electronic data-processing techniques and electronic systems,
as well as to allow beneficiary countries derogations from
preferential rules of origin that apply under the EU’s GSP.
The implementing and delegated acts are prepared by the
Commission not only in consultation with Member States,
respectively, in the Customs Code Committee and the
Customs Code Expert Group but also with the business
community represented in the Trade Contact Group. At the
end of that process, the Commission will adopt those acts,
taking into consideration that the Customs Code Committee
will have to provide its prior opinion on the draft
implementing acts and that the European Parliament and
the Council have a right to oppose the adopted delegated acts
and thus prevent their publication and entry into force.
499
Thus far, we have covered between one-third and half of
the process to achieve modernization of customs rules. We
have a solid legal basis and a clear set of objectives for the
adoption of implementing and delegated acts. The process is
informed by transparency and guided by milestones and the
undertaking of binding commitments within clear
timeframes. Of course, the real test will take place once the
rules will be applied.
parliament and of the council on the union legal
framework for customs infringements and sanctions
was transmitted in december 2013. The objective
was to lay down a set of uniform rules on the
application of infringements and sanctions for
violations of the union customs code
The proposal foresees a set of common rules for the treatment
of customs infringements and sanctions, that is to say, it
lays down the list of non-compliant behaviours resulting in
a violation of the Union Customs Code and associates to
each a scale of sanctions within which the competent
authorities of the Member States will apply the penalties.
We believe that harmonization of customs infringements and
the approximation of related sanctions is necessary given
that customs legislation enforcement currently falls within
the scope of Member States’ national laws, and is regulated
according to twenty-eight different sets of legal rules and
different administrative or legal traditions. The resulting
disparity of enforcement mechanisms has raised concerns as
to the EU’s compliance with its WTO obligations, and poses
enormous difficulties in the effective management of the
customs union, undermining the level playing field that
economic operators expect.
Similar attempts were made in the past without reaching
the level of maturity of a legislative proposal, but
considering the evolution of the customs union and the
situation described previously, it was time to take action. In
addition, the establishment of a framework for
infringements and related sanctions is not new in the EU,
as it exists in other areas of EU law.
The proposal is based on Article 33 of the Treaty on the
Functioning of the European Union, requiring the
European Parliament and the Council to adopt measures to
strengthen customs cooperation between Member States and
between the latter and the Commission. As you will have
noted, the instrument the Commission has chosen for
achieving approximation of Member States’ customs
enforcement legislation is that of a directive, which will
have to be transposed by each Member State into domestic
legislation. The proposal sets forth the substantive elements
to ensure enforcement of customs infringements, leaving to
Member States the means to achieve the expected results.
 Global Trade and Customs Journal
7 Would you like to describe the main features of the
proposal?
The main elements of the proposal include: (i) a common list of
infringements linked directly to the obligations stemming from
9 What do you see as the biggest challenges in getting
the Union Customs Code; (ii) a common scale of sanctions for
each infringement; and (iii) a minimum set of procedural
provisions. The proposal foresees three categories of
infringements to the Union Customs Code. The first type is
based on strict liability, the second refers to acts committed by
negligence and the third to acts committed with intent.
Concerning the scale of sanctions, the proposal lays down
minimum and maximum limits, thus ensuring that the
sanctions imposed are effective, proportionate and dissuasive.
Lastly, the draft directive includes a few procedural rules that
limit the time period during which proceedings may be
initiated, provide for the suspension of ongoing administrative
proceedings if criminal proceedings are opened, and determine
which Member State has jurisdiction to examine each case.
8 What are member states’ main concerns with respect
to this proposal?
The concerns of Member States in relation to this proposal
are twofold. First, there is an element of suspicion vis-à-vis
an instrument setting mandatory sanctions for customs
infringements, an area that has traditionally remained
10 You have been responsible for a number of
within Member States’ prerogatives. Second, the
approximation of laws will necessarily require changes and
adjustments to Member States’ legal systems. In some
Member States, customs infringements give rise to a mixed
system of criminal and non-criminal sanctions, in other
Member States only to non-criminal, and there are also a
few Member States where only criminal sanctions apply.
Therefore, with the adoption and transposition of the
proposal, most of the Member States will need to adapt to
the new EU regime.
The Commission considers these concerns as a question of
legal choice, to be dealt with in the context of
implementation, once an agreement is reached and the
proposal has been approved. Naturally, implementation
gives rise to a different kind of disagreements, for example
on how to implement the provisions on strict liability in
Member States where this concept may be unknown or even
unconstitutional. At that stage, however, engaging in
transparent discussions with Member States is key. It is
important that the Commission has the trust of the twenty-
500
eight Member States, so that any necessary arrangements
can be made in order to accommodate Member States’
concerns into a harmonized legal system.
customs legislation passed?
In line with the challenges that the Commission is currently
facing within the context of the proposal we were talking
about, in general, in the area of customs legislation there is
some perceived degree of lack of trust in EU Institutions and
the fear that actions and initiatives taken at the EU level
may encompass a ‘hidden’ agenda affecting Member States’
prerogatives. However, in addition to managing legislation
related to the Union Customs Code and the proposal on
customs infringements and sanctions, the bulk of the work of
my unit is to support and assist in the daily implementation
of customs legislation, and at this level discussions are
centred on clarity and transparency and are, I hope,
informed by search for the greatest degree of cooperation and
mutual understanding between the Commission and
Member States. We are all expected to serve through the
customs union, at our respective levels of responsibility and
action and in the best way, the EU, its economy and its
citizens.
landmark reforms of EU customs legislation. What
is the achievement that you are most proud of and
why?
All the three reforms I have been involved in were crucial
at the time they had to be engaged and regarding their
impact in the customs areas concerned. I am therefore proud
of having had the chance to contribute to all of them.
On the other hand, if being proud must be understood as
praising my own personal input and results, none of those
reforms – the more recent one, the Union Customs Code,
not being even completed – can be attributed to one single
person. Moreover, they were often initiated by a group of
people, continued by another group and completed by a
third one.
The only project I was part of almost from A to Z was
the reform of transit. It will probably remain my
favourite, maybe also because it was the first chance I was
offered building and managing a project with a team and
a particularly challenging one in institutional terms.