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New Customs System To Tackle EU Fraud

by Ulrika Lomas, Tax-News.com, Brussels

11 September 2015


A new regulation adopted by the European Parliament and the Council will allow customs authorities to access information to track the origins and routes of cargo containers arriving in the EU to support the fight against customs fraud both at EU and national level.

The response focuses on the analyzing of electronic records on cargo container traffic.

Welcoming the new regulation, the Joint Research Centre (JRC), which played a key role in its design, said: "EU customs authorities have been long aware that information on the logistics and actual routes of cargo containers arriving in Europe is valuable for the fight against customs fraud. However, they had very limited ways to obtain such information and no means to systematically analyze cargo container traffic both for fraud investigations as well as for risk analysis. On the other hand, the ocean carriers that transport the cargo containers, as well as their partners and clients, have easy online access to the so-called Container Status Messages (CSM): electronic records which describe the logistics and the routes followed by cargo containers."

In collaboration with the European Anti-Fraud Office (OLAF), the JRC worked extensively on how to exploit CSM data for customs anti-fraud purposes. The JRC proposed techniques, developed the necessary technology, and ran long-term experiments involving hundreds of EU customs officers to validate the usefulness of using CSM data.

The results of this research led the European Commission to bring forward a legislative proposal that would enable member states and OLAF to systematically use CSM data for these anti-fraud purposes. It also served to convince member states of the value of the proposed provisions.

"The financial gains from the avoidance of duties, taxes, rates, and quantitative limits constitute an incentive to commit fraud and allow the capacity to properly investigate in cases, such as mis-declaration of the origin of imported goods," the JRC said.

"The information extracted from the CSM data can facilitate the investigation of some types of false origin-declarations. With the new legislation an importer will no longer be able to declare – without raising suspicions – country X as dispatch/origin of goods if these were transported in a cargo container that started in country Z (as indicated by the CSM data)."

The system is intended to be up and running from January 1, 2016.

TAGS: tax | marine | European Commission | value added tax (VAT) | export duty | legislation | import duty | regulation | European Union (EU) | Europe

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