Community transit: action plan

Outline of the Community (European Union) legislation about Community transit: action plan

Topics

These categories group together and put in context the legislative and non-legislative initiatives which deal with the same topic.

Customs

Community transit: action plan (1997)

1) Objective

To conduct a thoroughgoing, balanced and realistic reform of customs transit systems in the face of a rise in fraud.

2) Document or Iniciative

Communication from the Commission to the European Parliament and the Council: Action plan for transit in Europe – a new customs policy [COM(97) 188 final – Official Journal C 176 of 10.06.1997]

3) Summary

Customs transit is one of the cornerstones of European integration and an issue of vital interest to European businesses. It enables goods to move much more freely and makes customs clearance formalities much more accessible by providing for the temporary suspension of duties and taxes normally applied to imported goods moving inside the Community (Community transit), or between the Community and its EFTA and Visegrad partner countries (Poland, the Czech Republic, Slovakia and Hungary) under the Common Transit Convention, or among the 64 States that are (in 2003) contracting parties to the TIR Convention.

Access to the common transit system is a key component in the pre-accession strategies for Central and East European countries defined following the Europe (Association) Agreements and the Commission’s White Paper on the subject. Four Visegrad countries have already joined the system, which gives them a practical framework for preparing their future accession to the European Union. Only a reformed and computerised customs transit system can provide that assurance.

In recent years transit fraud has become a considerable drain on the Community and national budgets and has led to illegal trafficking on the European market in untaxed and totally uncontrolled goods, jeopardising not only the competitiveness of European businesses but the health and safety of our citizens.

The swift and irresistible growth of trade in recent years, particularly with Central and Eastern Europe, has drawn criminals’ attention to the profits to be made from a system which offers ease of access not matched by prevention and control measures.

The revenue lost to the Community and national budgets has been estimated by the Commission, on the basis of Member States’ reports of fraud cases to do with transit, at some ECU 1.27 billion over the seven years 1990 to 1996, including ECU 485 million in conventional own resources and 784 million in national taxes.

Fraud on this scale is not simply a fiscal problem; it causes economic damage and may even pose health threats: directly or indirectly it interferes with honest traders’ operations and the facilities they are offered, and by supplying the market illicitly it not only competes unfairly with legal products, but may jeopardise consumer health and safety.

All parties agree that the present transit systems are plagued by problems:

• failures by both administrators and users to comply with existing rules and obligations;
• the lack of concerted action by and coordination of the many administrations and offices involved and poor exploitation of existing arrangements for cooperation;
• the existence of different, ill-fitting systems, arising from the different legal frameworks and decision-making systems, which make the whole both complex and inflexible;
• failure to adapt the rules and procedures to allow them to deal swiftly, reliably and flexibly with large numbers of highly varied transit operations;
• failure to use available data, combined with a lack of complete and reliable information on the real economic and administrative impact of transit and on the operations themselves.

These weaknesses in the transit system and the various malfunctions to which they gave rise have led to mounting customs and fiscal debts.

The action plan hinges on a number of key concepts:

• a simple and coherent system, which can be easily understood and applied by operators and customs officials;
• a system run using up-to-date procedures and tools for cooperation, relying on computerisation and electronic data interchange,
• a system that can cope with a wide range of operations and situations,
• a system that incorporates coordinated fraud prevention and coverage of the sums actually at risk in its procedures;
• a system managed and evaluated with the aid of a proper reporting system, for both general and operational purposes.

This set of objectives must of course be translated into various initiatives applied not only to transit but to general customs policy and practice.

Bearing in mind that a single customs code would appear to imply a single customs service, it is important that the 15 customs administrations function as if they were one, as proposed in the Customs 2000 programme.

The Community needs a criminal policy to help it establish proof, have cases pursued in a coordinated fashion, bring serious fraud cases, particularly those involving criminal organisations, before the criminal courts, and impose effective, proportionate and deterrent penalties on the organisers. The Commission’s role should be to inform, assist, coordinate and push for action, so as to fulfil the duty given to it by Article 280 of the EC Treaty.

This would require the Member States to ratify the Convention on the protection of the European Communities’ financial interests, and the relevant protocols on combating corruption of national civil servants and judicial cooperation in criminal cases. The policy to tackle fraud should enable an appropriate Europe-wide legal framework for the protection of European financial interests to be established in the longer term.

In the short term it is vital to boost detection, improve the exchange of information and act on it more effectively, by putting into practice new legal instruments such as Council Regulation (EC) No 515/97 on mutual assistance between the administrative authorities, Council Regulation (Euratom, EC) No 2185/96 concerning on-the-spot checks and inspections carried out by the Commission, Council Regulation (EC, Euratom) No 2988/95 on the protection of the European Communities’ financial interests, which sets out administrative measures and penalties for irregularities with regard to Community law, and the Convention on the customs information system (CIS) on using computer technology for customs purposes.

The main objectives of the action plan are as follows:

• boosting cooperation between customs administrations;
• checking that the rules are applied correctly and uniformly;
• establishing a partnership between customs and operators to respond to transit users’ needs;
• integrating European customs systems;
• ensuring that international transit systems are compatible;
• introducing a new tool which will be the key to transit reform: the new computerised transit system (NCTS).

The action plan contains a series of measures for achieving these objectives:

• management of the transit procedure to restore confidence and ensure that the facilities granted to operators and the constraints imposed on them correspond to the degree of risk attached to their operations in practice;
• supervision of transit operations, with all players in the procedures accepting their respective responsibilities; for customs administrations, that means using and developing administrative cooperation arrangements to the full;
• fraud detection, law enforcement and coordinated checks, relying on more effective security measures and a common risk management policy, targeting of checks, the setting-up of Community-wide mechanisms to detect fraud and irregularities, and the development of a legal framework conducive to stepping up law enforcement;
• sound financial management of transit, which demands appropriate guarantees for the sums at stake, tailored to the operator’s reliability and the risks of the operation, as well as effective mechanisms for recovering any sums ultimately owing, in the first instance from the persons who cause the customs or tax debts to be incurred;
• uniform application of the rules, which entails developing practical tools for training and the implementation of legislation and controls, conducting effective checks to ensure that the rules are applied, and setting up a system of administrative customs penalties;
• effective monitoring and continuous evaluation of the transit systems and their reform.

The Commission’s action plan paves the way for a thoroughgoing reform of the transit systems and establishes the terms of reference for future initiatives.

4) Implementing Measures

5) Follow-Up Work

Council Resolution of 23 November 1995 on the computerisation of customs transit systems [Official Journal C327 of 07.12.1995].

In this resolution the Council gives absolute priority to computerising the transit systems.

Council Resolution of 21.6.1999 on the reform of the customs transit systems [Official Journal C193 of 09.07.1999].

In this resolution the Council calls on the Commission to continue reform of the transit systems.

Communication from the Commission to the Council and the European Parliament: Implementation of the New Computerised Transit System (NCTS) [COM(2003) 125 – Not published in the Official Journal].

This Communication gives an overview of progress with implementing the new computerised transit system (NCTS) in the Member States of the EU, the contracting parties to the Common Transit Convention (Iceland, Norway, Switzerland, Hungary, Poland, the Czech Republic and Slovakia) and the accession candidate countries.

Convention on the use of information technology for customs purposes

Outline of the Community (European Union) legislation about Convention on the use of information technology for customs purposes

Topics

These categories group together and put in context the legislative and non-legislative initiatives which deal with the same topic.

Customs

Convention on the use of information technology for customs purposes (CIS)

Document or Iniciative

Council Act 95/C316/02 of 26 July 1995 drawing up the Convention on the use of information technology for customs purposes.

Summary

The Member State’s customs authorities will set up and maintain a joint automated information system for customs purposes, hereinafter referred to as the “Customs Information System” (CIS).

The Customs Information System will consist of a central database facility accessible via terminals in each Member State. It will contain only the data, including personal data, necessary to achieve its aim, in the following categories:

• commodities;
• means of transport;
• businesses;
• persons;
• fraud trends;
• availability of expertise.

The Member States will determine the items to be included in the Customs Information System relating to each of the three last categories to the extent that this is necessary to achieve the aim of the system. No items of personal data will be included in the last two categories.
Personal data will be confined to:

• name, maiden name, forenames and alias;
• date and place of birth;
• nationality;
• sex;
• any particular objective and permanent physical characteristics;
• reason for inclusion of data;
• suggested action;
• warning code indicating any history of being armed, violent or escaping.

Under no circumstances may personal data listed in Article 6, first sentence, of the Council of Europe Convention for the Protection of Individuals with Regard to Automatic Processing of Personal Data signed at Strasbourg on 28 January 1981 (the Strasbourg Convention) be included.

Direct access to data included in the Customs Information System is reserved exclusively for the national authorities designated by each Member State. These national authorities will be customs administrations, but may also include other authorities competent under the laws, regulations and procedures of the Member State in question to act in order to achieve the aim of the Convention.

Member States may only use data from the Customs Information System to achieve the Convention’s aim; however, they may use it for administrative or other purposes with the prior authorisation of and subject to any conditions imposed by the Member State which entered it in the system. Such use must be in accordance with the laws, regulations and procedures of the Member State which seeks to use it and must take into account Principle 5.5 of Recommendation R (87) 15 of the Committee of Ministers of the Council of Europe dated 17 September 1987.

Inclusion of data in the Customs Information System will be governed by the laws, regulations and procedures of the supplying Member State except where the Convention lays down more stringent provisions.

Each Member State will designate a competent customs administration to have national responsibility for the Customs Information System.

That administration will be responsible for the correct operation of the System within the Member State and will take the measures necessary to ensure compliance with the provisions of the Convention.

Only the supplying Member State will have the right to amend, supplement, correct or delete data which it has included in the Customs Information System.

Data entered in the Customs Information System will be kept only for the time necessary to achieve the purpose for which it was entered. The need for its retention will be reviewed at least once a year by the supplying Member State.

Each Member State intending to receive personal data from the Customs Information System or include it in the system must adopt national legislation sufficient to achieve a level of protection of personal data at least equivalent to that resulting from the principles of the 1981 Strasbourg Convention by the time the CIS Convention enters into force.

The rights of persons with regard to personal data in the Customs Information System, in particular their right of access, will be exercised in accordance with the laws, regulations and procedures of the Member States in which such rights are invoked.

A committee consisting of representatives from the Member State’s customs administrations will be set up. It will adopt its rules of procedure unanimously.

Each Member State will designate a national supervisory authority or authorities responsible for personal data protection to carry out independent supervision of such data entered in the Customs Information System.

A Joint Supervisory Authority will be set up. It will comprise two representatives from each Member State drawn from the respective independent national supervisory authority or authorities.

All administrative measures necessary to maintain security will be taken either by the Member States’ authorities or by the committee referred to in point 12, respectively for the terminals installed in the Member States and for the Customs Information System and the terminals located on the same premises as the System.

Each Member State will be responsible for the accuracy, currency and lawfulness of data it has entered in the Customs Information System. It will also be responsible for complying with Article 5 of the 1981 Strasbourg Convention.

The CIS convention will be adopted by Member States in accordance with their respective constitutional requirements.

Member States will notify the Secretary-General of the Council of the European Union (EU) of the completion of their constitutional requirements for adopting the Convention.

The Secretary-General of the Council of the EU will act as depository for the convention.

References

Act	Entry into force	Deadline for transposition in the Member States	Official Journal
Council Act, 95/C 316/02	After ratification	–	OJ C 316 of 27.11.1995

Related Acts

Agreement on provisional application between certain Member States of the European Union of the Convention drawn up on the basis of Article K.3 of the Treaty on European Union on the use of information technology for customs purposes [Official Journal C 316 of 27.11.1995]

Council Decision of 17 October 2000 establishing a secretariat for the joint supervisory data-protection bodies set up by the Convention on the Establishment of a European Police Office (Europol Convention), the Convention on the Use of Information Technology for Customs Purposes and the Convention implementing the Schengen Agreement on the gradual abolition of checks at the common borders (Schengen Convention)[Official Journal L 271 of 24.10.2000]

Council Decision of 17 October 2000 establishing a secretariat for the joint supervisory data-protection bodies set up by the Convention on the Use of Information Technology for Customs Purposes [Official Journal L 271 of 24.10.2000]

Protocol drawn up on the basis of Article K.3 of the Treaty on European Union, on the interpretation, by way of preliminary rulings, by the Court of Justice of the European Communities of the Convention on the use of information technology for customs purposes – Declaration concerning the simultaneous adoption of the Convention on the use of information technology for customs purposes and the Protocol on the interpretation by way of preliminary rulings, by the Court of Justice of the European Communities, of that Convention – Declaration made pursuant to Article 2 [Official Journal C 151 of 20.05.1997]

On 29 November 1996 the Council adopted an act drawing up, on the basis of Article K.3 (now Article 31) of the Treaty of the European Union, the Protocol on the interpretation, by way of preliminary rulings, by the Court of Justice to the European Communities of the Convention on the use of information technology for customs purposes.

Council Act of 12 March 1999 drawing up, on the basis of Article K.3 of the Treaty on European Union, the Protocol on the scope of the laundering of proceeds in the Convention on the use of information technology for customs purposes and the inclusion of the registration number of the means of transport in the Convention [Official Journal C 91 of 31.03.1999]

On 12 March 1999 the Council adopted a second Protocol on the scope of the laundering of proceeds in the Convention on the use of information technology for customs purposes and the inclusion of the registration number of the means of transport in the Convention.
The aim is to widen the concept of the laundering of proceeds and add the data category “registration number of the means of transport” to the Customs Information System.

Protocol on the customs files identification database: Council act of 8 May 2003 drawing up a Protocol amending, as regards the creation of a customs files identification database, the Convention on the use of information technology for customs purposes [Official Journal C 139 of 13.06.2003]

Implementing the conclusions of the Tampere European Council of 15 and 16 October 1999 and in accordance with the 2001 strategy for the customs union, this protocol provides for the creation of a special database called the “customs files identification database”, which will enable Member State authorities responsible for customs investigations to exchange information on investigations carried out on persons or businesses in other Member States.

Convention on mutual assistance and cooperation between customs administrations

Outline of the Community (European Union) legislation about Convention on mutual assistance and cooperation between customs administrations

Topics

These categories group together and put in context the legislative and non-legislative initiatives which deal with the same topic.

Customs

Convention on mutual assistance and cooperation between customs administrations (Naples II)

To regulate particular forms of cooperation involving cross-border actions for the prevention, investigation and prosecution of certain infringements of both the national legislation of Member States and Community customs regulations.

2) Document or Iniciative

Council Act 98/C 24/01 of 18 December 1997 drawing up, on the basis of Article K3 of the Treaty on European Union, the Convention on mutual assistance and cooperation between customs administrations [Official Journal C 24 of 23.01.1998].

3) Summary

The Member States of the European Union will provide each other with mutual assistance and will cooperate with one another through their customs administrations, with a view to (Art.1):

• preventing and detecting infringements of national customs provisions, and
• prosecuting and punishing infringements of Community and national customs provisions.

The Convention does not affect the provisions applicable regarding mutual assistance in criminal matters between judicial authorities, or more favourable provisions in bilateral or multilateral agreements between Member States governing customs cooperation.

The customs authorities will apply the Convention within the limits of the powers conferred upon them under national provisions (Art. 2).

Definitions (Art. 4)

• national customs provisions;
• Community customs provisions;
• infringements;
• mutual assistance;
• applicant authority;
• requested authority;
• customs administrations;
• personal data;
• cross-border cooperation.

Member States will appoint in their customs authorities a central unit (coordinating unit). It will be responsible for receiving all applications for mutual assistance under the Convention and for coordinating mutual assistance (Art. 5).

Member States may make agreements between themselves on the exchange of liaison officers for limited or unlimited periods, and on mutually-agreed conditions (Art. 6).

In order to provide the assistance required under this Agreement, the requested authority or the competent authority which it has addressed will proceed as though it were acting on its own account or at the request of another authority in its own Member State.

The requested authority will extend this assistance to all circumstances of the infringement which have any recognisable bearing on the subject of the request for assistance without this requiring any additional request (Art. 8).

Requests for assistance must always be made in writing and include the following information:

• the applicant authority making the request;
• the measure requested;
• the object of, and the reason for, the request;
• the laws, rules and other legal provisions involved;
• indications as exact and comprehensive as possible on the natural or legal persons being the target of the investigations;
• a summary of the relevant facts (Art. 9).

At the request of the applicant authority, the requested authority will communicate to it all information which may enable it to prevent, detect and prosecute infringements (Art. 10).

The requested authority will at the request of the applicant authority carry out, or arrange to have carried out, appropriate enquiries concerning operations which constitute, or appear to the applicant authority to constitute, infringements (Art. 12).

The competent authorities of each Member State will, as laid down in the Convention, subject to any limitations imposed by national law, provide assistance to the competent authorities of the other Member States without prior request (Art. 15).

Customs administrations will engage in cross-border cooperation in accordance with the Convention. They will provide each other with the necessary assistance in terms of staff and organisational support. Requests for cooperation will, as a rule, take the form of requests for assistance in accordance with paragraph 7 (Art. 19).

Cross-border cooperation may be permitted for the prevention, investigation and prosecution of infringements in the following cases (Art. 19):

• illicit traffic in drugs and psychotropic substances (external aspects, internal aspects), weapons, munitions, explosive materials, cultural goods, dangerous and toxic waste, nuclear material or materials or equipment intended for the manufacture of atomic, biological and/or chemical weapons (prohibited goods);
• trade in substances listed in Tables I and II of the United Nations Convention against illicit traffic in narcotic drugs and psychotropic substances and intended for the illegal manufacture of drugs (precursor substances);
• illegal cross-border commercial trade in taxable goods to evade tax or to obtain unauthorised State payments in connection with the import or export of goods, where the extent of the trade and the related risk to taxes and subsidies is such that the potential financial cost to the budget of the European Communities or the Member States is considerable (combating fraud);
• any other trade in goods prohibited by Community or national rules.

Officers of the customs administration of one of the Member States pursuing in their country an individual observed in the act of committing one of the infringements referred to in Article 19(2) which could give rise to extradition, or participating in such an infringement, will be authorised to continue pursuit in the territory of another Member State without prior authorisation where, given the particular urgency of the situation, it was not possible to notify the competent authorities of the other Member State prior to entry into that territory or where these authorities have been unable to reach the scene in time to take the pursuit.

The pursuing officers will, not later than when they cross the border, contact the competent authorities of the Member State in whose territory the pursuit is to take place. The pursuit will cease as soon as the Member State in whose territory the pursuit is taking place so requests.

The pursuit will be carried out in accordance with the procedures defined in the Convention (Art. 20).

Officers of the customs administration of one of the Member States who are keeping under observation in their country persons in respect of whom there are serious grounds for believing that they are involved in one of the infringements referred to in paragraph 11 (Article 19(2) of the Convention) will be authorised to continue their observation in the territory of another Member State where the latter has authorised cross-border observation in response to a request for assistance which has previously been submitted. Conditions may be attached to the authorisation (Art. 21).

Each Member State will undertake to ensure that, at the request of another Member State, controlled deliveries may be permitted on its territory in the framework of criminal investigations into extraditable offences (Art. 22).

By mutual agreement, the authorities of several Member States may set up a joint special investigation team based in a Member State and comprising officers with the relevant specialisations who will have the following tasks (Art. 24):

• implementation of difficult and demanding investigations;
• coordination of joint activities.

Joint special investigation teams will operate under the general conditions laid down in the Convention (Art. 24).

When information is exchanged, the customs administrations will take into account in each specific case the requirements for the protection of personal data. They will respect the relevant provisions of the Convention of the Council of Europe of 28 January 1981 for the protection of individuals with regard to automatic processing of personal data and the provisions of the Convention concerning the use of information technology for customs purposes (Art. 25).

The Court of Justice of the European Communities will have jurisdiction:

• to rule on any dispute between Member States regarding the interpretation or the application of the Convention whenever it has proved impossible for the dispute to be settled by the Council within six months of its being referred to the Council by one of its members;
• to rule on any dispute between Member States and the Commission concerning the interpretation or application of the Convention which it has proved impossible to settle through negotiation;
• to give preliminary rulings on the interpretation of the Convention (Art. 26).

The customs administrations will take account, in each specific case of exchange of information, of the requirements of investigation secrecy (Art. 27).

The Convention will apply to the territories of the Member States as referred to in Article 3(1) of Council Regulation (EEC) No 2913/92 of 12 October 1992 establishing the Community Customs Code and Regulation (EC) No 82/97 amending Regulation (EEC) 2913/92 (Art. 31).

The Convention will be open to accession by any State that becomes a Member State of the European Union.

The Secretary-General of the Council of the European Union will act as depository of the Convention (Art. 35).

The Convention will enter into force 90 days after the notification of the completion of the constitutional procedures for its adoption by all the Member States of the European Union. Any Member State may declare that this Convention will apply to its relations with Member States that have made the same declaration (Art. 32). From its entry into force, the Naples II Convention repeals the Naples Convention of 1967.

4) Implementing Measures

To date, the following Member States have ratified the Naples II Convention: Denmark, France, Germany, Ireland, Luxembourg, the Netherlands, Spain, Sweden and the United Kingdom.

France, Germany, the Netherlands, Spain, Sweden and the United Kingdom have already decided to implement the Convention in their relations with Member States that have made the same declaration.

5) Follow-Up Work

Explanatory Report on the Convention drawn up on the basis of Article K.3 of the Treaty on European Union, on mutual assistance and cooperation between customs administrations [Official Journal C 189 of 17.06.1998].

On 28 May 1998 the Council approved an Explanatory Report on the Convention drawn up with comment on every article.