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EC Proposes Common Approach To Customs Violations

by Ulrika Lomas,, Brussels

19 December 2013

The European Union's (EU) 28 member states could be forced to align their national customs infringement regulations, under new plans from the Commission.

At present, EU customs legislation is harmonized in a single act. However, the consequences of violating these common rules depend on the legal orders, administrations, and judicial traditions of individual member states. For instance, the financial threshold for deciding whether an infringement is criminal or not ranges from EUR225 (USD309.63) to EUR50,000, while national time limits for sanctioning customs offences vary from one to 30 years. Some states impose no limit at all.

The Commission claims that this creates legal uncertainty for businesses and possible competitive distortions within the internal market. In turn, it leaves revenue streams vulnerable and undermines attempts to enforce policies on consumer protection and agriculture.

Most seriously, perhaps, the Commission is concerned that this "patchwork" system raises questions about the uniformity of the customs union. Ensuring such cohesion is one of the EU's key obligations as a World Trade Organization Member.

The Commission's proposed Directive sets out which acts must be considered as infringements, along with a framework for imposing sanctions. Breaches are differentiated by the level of severity, and some take into account the involvement of intent or negligence. Examples include non-payment of customs duties, failure to declare goods, falsifying documents, removing goods from customs supervision without authorization, or failing to present proper documentation.

Penalties range from a fine of one percent of the value of the goods in question for inadvertent or administrative errors, to a fine of 30 percent of the value of goods, for the most serious offences. When applying these punishments, member states must consider the nature and circumstances of the infringement. They must also pursue cases within a set time period, and administrative procedures must be suspended if a criminal procedure is opened on the same case.

The Commissioner responsible for the customs union, Algirdas Šemeta, said of the changes: "There is no point in a solid, single set of rules if we do not also have a common approach to responding when they are broken. We must ensure that EU customs law is respected to the same high standards across the Single Market. [Our] proposal will create a more level playing field for businesses, a more secure market for citizens and a more uniformly managed customs union."

TAGS: tax | business | European Commission | law | enforcement | legislation | standards | regulation | penalties | legislation amendments | European Union (EU) | Europe | Tax | Tax Evasion

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