European Union Customs Union

Last updated

European Union Customs Union
EU Customs Union.svg
   EU member states
  Non-EU states which participate in the customs union, or are in bilateral customs unions with the EU
Type Customs union
Membership
27 EU member states
5 states/territories with bilateral agreements
Establishment1968 [1]
Area
• Total
4,950,000 km2 (1,910,000 sq mi)
Population
• 2021 estimate
Decrease2.svg 518,000,000
GDP  (PPP)2021 estimate
• Total
Decrease2.svg $16.1 trillion
GDP  (nominal)2021 estimate
• Total
Decrease2.svg $16.6 trillion

The European Union Customs Union (EUCU), formally known as the Community Customs Union, is a customs union which consists of all the member states of the European Union (EU), Monaco, and the British Overseas Territory of Akrotiri and Dhekelia. Some detached territories of EU states do not participate in the customs union, usually as a result of their geographic separation. [lower-alpha 1] In addition to the EUCU, the EU is in customs unions with Andorra, San Marino and Turkey (with the exceptions of certain goods), [lower-alpha 2] through separate bilateral agreements. [2]

Contents

There are no tariffs or non-tariff barriers to trade between the members of the customs union and – unlike a free-trade area  – members of the customs union impose a common external tariff on all goods entering the union. [3]

The European Commission negotiates for and on behalf of the Union as a whole in international trade deals, rather than each member state negotiating individually. It also represents the Union in the World Trade Organization and any trade disputes mediated through it.

Common external tariffs

The EU Customs Union sets the tariff rates for imports to the EU from other countries. These rates are detailed and depend on the specific type of product imported, and can also vary by the time of year. [4] The full WTO Most Favoured Nation tariff rates apply only to those countries that do not have a Free Trade Agreement with the EU, or are not on a WTO recognised exemption scheme such as Everything but Arms (an EU support arrangement for Least Developed Countries).

Union and common transit

Union transit, formerly called "Community transit", is a system generally applicable to the movement of non-Union goods for which customs duties and other charges due on import have not been paid, and of Union goods, which, between their point of departure and point of destination in the EU, have to pass through the territory of a third country. [5]

The 'common' transit procedure is used for the movement of goods between the EU Member States, the EFTA countries (Iceland, Norway, Liechtenstein and Switzerland), Turkey (since 1 December 2012), the Republic of North Macedonia (since 1 July 2015) and Serbia (since 1 February 2016). The operation of the common transit procedure with the UK is ensured as the UK has deposited its instrument of accession on 30 January 2019 with the Secretariat of the Council of the EU. [5] The procedure is based on the Convention of 20 May 1987 on a common transit procedure. The rules are effectively identical to those of the Union transit. [5]

Edward Kellett-Bowman MEP, as rapporteur for a European Parliament Committee of Inquiry, presented a report to the Parliament in February 1997 [6] which identified the removal of border controls and a lack of co-operation by member states as being responsible for a rise in organised crime and smuggling. [7] Kellett-Bowman's report led to the European Union setting up a customs investigation body and computerising transit-monitoring systems. [8]

Modernised Customs Code

The Modernised Customs Code (MCC) was adopted under 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). [9] The MCC was primarily adopted to enable IT customs and trade solutions to be adopted. [10]

Union Customs Code

The Union Customs Code (UCC), intended to further modernise customs procedures, entered into force on 1 May 2016. This superseded the MCC. [10] The European Commission has stated that the aims of the UCC are simplicity, service and speed. [11] Implementation took place over a period of time and most aspects of implementation were complete by 31 December 2020, although some formalities managed by electronic systems may not be fully implemented until 2025. [12]

One major goal of the UCC is to progress towards the complete use of electronic systems for interactions between businesses and customs authorities, and between customs authorities, bringing all paper-based customs processes to an end. [13]

Non-EU participants

Monaco and the British Overseas Territory of Akrotiri and Dhekelia are integral parts of the EU's customs territory. [2] [14]

State / territoryAgreementEntry into force
Flag of Monaco.svg Monaco Franco-Monegasque Customs Convention [15] [16] [17] 1968
Flag of the United Kingdom.svg  Akrotiri and Dhekelia (United Kingdom) Treaty of Accession 2003 [18]
Brexit withdrawal agreement [14] 		1 May 2004

EU territories with opt-outs

While all EU member states are part of the customs union, not all of their respective territories participate. Territories of member states which have remained outside of the EU (overseas territories of the European Union) generally do not participate in the customs union. [19]

However, some territories within the EU do not participate in the customs union for tax and/or geographical reasons:

Historical opt outs

The following territories were excluded until the end of 2019:

Bilateral customs unions

Andorra, San Marino and Turkey are each in a customs union with the EU. [2]

StateAgreementEntry into forceNotes
Flag of Andorra.svg Andorra Agreement in the form of an Exchange of Letters between the European Economic Community and the Principality of Andorra – Joint Declarations [22] 1 January 1991Excludes agricultural produce
Flag of San Marino.svg San Marino Agreement on Cooperation and Customs Union between the European Economic Community and the Republic of San Marino [23] 1 April 2002
Flag of Turkey.svg Turkey Decision No 1/95 of the EC-Turkey Association Council of 22 December 1995 on implementing the final phase of the Customs Union [24] 31 December 1995Excludes agricultural produce

Special arrangements concerning territories of the United Kingdom

The United Kingdom of Great Britain and Northern Ireland left the European Union on 31 January 2020 and transition arrangements ended on 31 December 2020. Special arrangements have been made for those parts of the United Kingdom and its territories that share a land border with an EU member state.

Northern Ireland

The UK (including Northern Ireland) is no longer a member of the European Union Customs Union. However there are special arrangements in place for Northern Ireland: its trade with Great Britain and its trade with the European Union are each now regulated by the Brexit withdrawal agreement (specifically the Northern Ireland Protocol and the Windsor Framework), the EU–UK Trade and Cooperation Agreement, the European Union (Future Relationship) Act 2020, the United Kingdom Internal Market Act 2020. These include special provisions for trade in goods between Northern Ireland and the EU which for many purposes are similar to those that apply within the Customs Union, although Northern Ireland remains part of United Kingdom Customs territory.

Gibraltar

Gibraltar left the EU concurrently with the United Kingdom. When part of the EU, it was one of the EU territories with opt-outs and had not been part of the Customs Union. An agreement in principle has been reached between the EU, the United Kingdom, and Gibraltar to negotiate a treaty which would include provisions for trade on goods between the EU and Gibraltar. [25] These would be "substantially similar" to those within the Customs Union. As of April 2024 the agreement has not yet been concluded.

Akrotiri and Dhekelia

As already noted above, the British Overseas Territory of Akrotiri and Dhekelia on the island of Cyprus are integral parts of the EU's customs territory.

See also

Explanatory footnotes

  1. ↑ For example, the one exclave of Germany within Switzerland.
  2. ↑ See European Union–Turkey Customs Union.

Related Research Articles

<span class="mw-page-title-main">European Free Trade Association</span> Regional trade organization and free trade area

The European Free Trade Association (EFTA) is a regional trade organization and free trade area consisting of four European states: Iceland, Liechtenstein, Norway and Switzerland. The organization operates in parallel with the European Union (EU), and all four member states participate in the European Single Market and are part of the Schengen Area. They are not, however, party to the European Union Customs Union.

<span class="mw-page-title-main">European Economic Area</span> European free trade zone established in 1994

The European Economic Area (EEA) was established via the Agreement on the European Economic Area, an international agreement which enables the extension of the European Union's single market to member states of the European Free Trade Association. The EEA links the EU member states and three of the four EFTA states into an internal market governed by the same basic rules. These rules aim to enable free movement of persons, goods, services, and capital within the European single market, including the freedom to choose residence in any country within this area. The EEA was established on 1 January 1994 upon entry into force of the EEA Agreement. The contracting parties are the EU, its member states, and Iceland, Liechtenstein, and Norway. New members of EFTA would not automatically become party to the EEA Agreement, as each EFTA State decides on its own whether it applies to be party to the EEA Agreement or not. According to Article 128 of the EEA Agreement, "any European State becoming a member of the Community shall, and the Swiss Confederation or any European State becoming a member of EFTA may, apply to become a party to this Agreement. It shall address its application to the EEA Council." EFTA does not envisage political integration. It does not issue legislation, nor does it establish a customs union. Schengen is not a part of the EEA Agreement. However, all of the four EFTA States participate in Schengen and Dublin through bilateral agreements. They all apply the provisions of the relevant Acquis.

<span class="mw-page-title-main">Special territories of members of the European Economic Area</span> Territories of EEA members with special status

The special territories of members of the European Economic Area (EEA) are the 32 special territories of EU member states and EFTA member states which, for historical, geographical, or political reasons, enjoy special status within or outside the European Union and the European Free Trade Association.

The European Union has a number of relationships with foreign states. According to the European Union's official site, and a statement by Commissioner Günter Verheugen, the aim is to have a ring of countries, sharing EU's democratic ideals and joining them in further integration without necessarily becoming full member states.

European integration is the process of industrial, economic, political, legal, social, and cultural integration of states wholly or partially in Europe, or nearby. European integration has primarily but not exclusively come about through the European Union and its policies.

<span class="mw-page-title-main">Free trade areas in Europe</span> EU, EFTA, CEFTA, CISFTA, GUAM, BAFTA

At present, there are six multi-lateral free trade areas in Europe, and one former free trade area in recent history. Note that there are also a number of bilateral free trade agreements between states and between trade blocks; and that some states participate in more than one free trade area.

<span class="mw-page-title-main">Andorra–European Union relations</span> Bilateral relations

A customs union is the principal area of robust formal agreement between the Principality of Andorra and the European Union (EU). Andorra borders two EU member states: France and Spain.

Council Regulation (EEC) No 2658/87 of 23 July 1987, creates the goods nomenclature called the Combined Nomenclature, or in abbreviated form 'CN', established to meet, at one and the same time, the requirements both of the Common Customs Tariff and of the external trade statistics of the European Union. It is closely related to the Harmonized Tariff Schedule of the United States.

<span class="mw-page-title-main">Microstates and the European Union</span> Relationship overview

Currently, all of the European microstates have some form of relations with the European Union (EU).

<span class="mw-page-title-main">European Union value added tax</span> EU-wide goods and services tax policy

The European Union value-added tax is a value added tax on goods and services within the European Union (EU). The EU's institutions do not collect the tax, but EU member states are each required to adopt in national legislation a value added tax that complies with the EU VAT code. Different rates of VAT apply in different EU member states, ranging from 17% in Luxembourg to 27% in Hungary. The total VAT collected by member states is used as part of the calculation to determine what each state contributes to the EU's budget.

The European Customs Information Portal (ECIP) is an importing and exporting service provided by the EU for business operators of the member states of the European Union.

<span class="mw-page-title-main">Customs Union of the Eurasian Economic Union</span> Former customs union

The Customs Union of the Eurasian Economic Union or EAEU Customs Union is a customs union of 5 post-Soviet states consisting of all the member states of the Eurasian Economic Union which initially became effective on January 1, 2010 at the date of implementation of the common external tariff (CET) as the Customs Union of the Eurasian Economic Community or Customs Union of Russia, Belarus and Kazakhstan. It was inherited from the Eurasian Economic Community and is now regulated by Part Two of the Treaty on the Eurasian Economic Union, EAEU Customs Code, other international agreements and by decisions of supranational bodies as Supreme Eurasian Economic Council, Intergovernmental Council and Eurasian Economic Commission.

A customs territory is a geographic territory with uniform customs regulations and there are no internal customs or similar taxes within the territory. Customs territories may fall into several types:

<span class="mw-page-title-main">Monaco–European Union relations</span> Bilateral relations

Relations between the Principality of Monaco and the European Union (EU) are primarily conducted through France. Through that relationship Monaco directly participates in certain EU policies. Monaco is an integral part of the EU customs territory and VAT area, and therefore applies most measures on excise duties and VAT. Monaco borders one EU member state: France. However this relationship does not extend to external trade. Preferential trade agreements between the EU and third countries apply only to goods originating from the customs territory – Monaco may not claim EU origin in this respect.

<span class="mw-page-title-main">Post-Brexit United Kingdom relations with the European Union</span> Bilateral relations

The United Kingdom's post-Brexit relationship with the European Union and its members is governed by the Brexit withdrawal agreement and the EU–UK Trade and Cooperation Agreement. The latter was negotiated in 2020 and has applied since January 2021.

<span class="mw-page-title-main">Borders of Akrotiri and Dhekelia</span>

The borders of Akrotiri and Dhekelia refer to the international boundary between the Sovereign Base Areas of Akrotiri and Dhekelia and the republic of Cyprus.

<span class="mw-page-title-main">Brexit and the Irish border</span> Effect on Irelands UK/EU border

The impact of Brexit on the Irish border and its adjacent polities involves changes in trade, customs, immigration checks, local economies, services, recognition of qualifications, medical cooperation, and other matters, now that it is the only land border between the United Kingdom and the European Union.

<span class="mw-page-title-main">Brexit withdrawal agreement</span> 2020 EU–UK agreement for implementing Brexit

The Brexit withdrawal agreement, officially titled Agreement on the withdrawal of the United Kingdom of Great Britain and Northern Ireland from the European Union and the European Atomic Energy Community, is a treaty between the European Union (EU), Euratom, and the United Kingdom (UK), signed on 24 January 2020, setting the terms of the withdrawal of the UK from the EU and Euratom. The text of the treaty was published on 17 October 2019, and is a renegotiated version of an agreement published half a year earlier. The earlier version of the withdrawal agreement was rejected by the House of Commons on three occasions, leading to the resignation of Theresa May as Prime Minister and the appointment of Boris Johnson as the new prime minister on 24 July 2019.

<span class="mw-page-title-main">United Kingdom–Crown Dependencies Customs Union</span> Free trade area

The United Kingdom–Crown Dependencies Customs Union or customs arrangements with the Crown Dependencies is a customs union that covers the British Islands. It eliminates all tariff and non-tariff barriers to trade between those islands, and creates a common external tariff with other countries.

References

  1. ↑ Dinan, Desmond (2014). Europe Recast: A History of European Union (2nd ed.). Basingstoke, New York: Palgrave Macmillan. p. 88. ISBN   978-0-333-69352-0.
  2. 1 2 3 Customs unions, Taxation and Customs Union Archived 17 August 2016 at the Wayback Machine , European Commission. Retrieved 20 August 2016.
  3. ↑ Erskine, Daniel H (2006). "The United States-EC Dispute Over Customs Matters: Trade Facilitation, Customs Unions, and the Meaning of WTO Obligations". Florida Journal of International Law. 18: 432–485. SSRN   987367.
  4. ↑ Taric and Quota Data & Information Archived 24 July 2019 at the Wayback Machine – European Commission Communication and Information Resource Centre for Administrations, Businesses and Citizens.
  5. 1 2 3 European Union, Union and Common Transit Archived 9 August 2020 at the Wayback Machine , accessed 24 December 2020 CC-BY icon.svg Text was copied from this source, which is available under a Creative Commons Attribution 4.0 International License Archived 16 October 2017 at the Wayback Machine .
  6. ↑ European Parliament, Report on the Community Transit System Archived 19 January 2022 at the Wayback Machine , 20 February 1997, accessed 31 January 2017
  7. ↑ Neil Buckley, "Cross-border crime loses EU billions: Inquiry blames Brussels and customs for failing to clamp down on smuggling", Financial Times, 21 February 1997, p. 2.
  8. ↑ Neil Buckley, "EU plans single body against smuggling", Financial Times, 13 March 1997, p. 2.
  9. ↑ OJ L 145, published 4 June 2008
  10. 1 2 Deloitte Netherlands, "In 2016 the European Union will have a new Customs Code. But what’s new?", published 17 December 2014, accessed 11 December 2023.
  11. ↑ "Union Customs Code". Taxation and customs union – European Commission. Archived from the original on 17 August 2016. Retrieved 25 May 2016.
  12. ↑ European Commission, "The Union Customs Code (UCC) – Introduction". Archived 31 May 2019 at the Wayback Machine , accessed 29 March 2023.
  13. ↑ European Commission, "Proposal for a Regulation of the European Parliament and of the Council amending Regulation (EU) No 952/2013 to prolong the transitional use of means other than the electronic data-processing techniques provided for in the Union Customs Code", COM(2018) 85 final, published 2 March 2018, accessed 29 March 2023. Archived 5 June 2023 at the Wayback Machine .
  14. 1 2 Protocol relating to the Sovereign Base Areas of the United Kingdom of Great Britain and Northern Ireland in Cyprus Archived 11 October 2021 at the Wayback Machine , Agreement on the withdrawal of the United Kingdom of Great Britain and Northern Ireland from the European Union and the European Atomic Energy Community, EUR-Lex, 12 November 2019.
  15. ↑ "Taxation and Customs – FAQ". European Commission. Archived from the original on 8 June 2012. Retrieved 12 September 2012.
  16. ↑ "Council Regulation (EEC) No 2913/92 of 12 October 1992 establishing the Community Customs Code". Official Journal of the European Union . 19 October 1992. Archived from the original on 29 July 2017. Retrieved 12 September 2012.
  17. ↑ "Monaco and the European Union". Gouvernement Princier. Archived from the original on 20 January 2021. Retrieved 31 January 2021.
  18. ↑ Protocol No. 3 on the Sovereign Base Areas of the United Kingdom of Great Britain and Northern Ireland in Cyprus Archived 13 November 2020 at the Wayback Machine , Act concerning the conditions of accession of the Czech Republic, the Republic of Estonia, the Republic of Cyprus, the Republic of Latvia, the Republic of Lithuania, the Republic of Hungary, the Republic of Malta, the Republic of Poland, the Republic of Slovenia and the Slovak Republic and the adjustments to the Treaties on which the European Union is founded, EUR-Lex, 23 September 2003.
  19. 1 2 Territorial status of EU countries and certain territories Archived 3 July 2021 at the Wayback Machine  – European Commission, retrieved 18 December 2018
  20. 1 2 3 4 Article 6 of Council Directive 2006/112/EC Archived 29 June 2019 at the Wayback Machine , 28 November 2006
  21. 1 2 3 "REGULATION (EU) No 952/2013 OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL of 9 October 2013 laying down the Union Customs Code, Article 4" (PDF). EURLEX. October 2013. p. 11. Archived from the original on 14 August 2019. Retrieved 17 December 2018.
  22. ↑ "Andorra: Customs Unions and preferential arrangements". European Commission. Archived from the original on 26 October 2012. Retrieved 12 September 2012.
  23. ↑ "Agreement on Cooperation and Customs Union between the European Economic Community and the Republic of San Marino". Archived from the original on 7 April 2013. Retrieved 15 July 2015.
  24. ↑ "Decision No 1/95 of the EC-Turkey Association Council of 22 December 1995 on implementing the final phase of the Customs Union" (PDF). Archived (PDF) from the original on 19 March 2013.
  25. ↑ Martin, Maria; González, Miguel (11 January 2021). "Deal between Spain and UK plans to eliminate Gibraltar border checkpoint". El Pais . Madrid. Archived from the original on 25 May 2023. Retrieved 29 January 2021.
This page is based on this Wikipedia article
Text is available under the CC BY-SA 4.0 license; additional terms may apply.
Images, videos and audio are available under their respective licenses.