By Martin Ouwehand
Recently, the European Court of Auditors ("the Court") published
a special report on their website concerning the effectiveness of controls on
simplified customs procedures for imports. Simplified customs procedures for
imports are a key element of EU customs and trade policy and are widely used
throughout the EU. A recent analysis reveals that in 2008, approximately 70
percent of all imports were made using simplified procedures, meaning that
economic operators that are in possession of the relevant customs licenses can
benefit from, inter alia, accelerated customs clearance processes as a
result of reduced customs formalities/fewer controls. As a result of evolving
legislation that is ever adapting to technical, economic, and political
conditions, it is expected that this number will further increase during the coming
Given this development, it is important to have a clear
picture of whether the use of these simplified procedures is effectively being
controlled throughout the EU. In this respect, the Court analyzed the two main
customs procedures facilitating the release of goods for free circulation into
the EU: 1) the simplified declaration procedure and 2) the local clearance
procedure. For this purpose, the Court specifically designed a control model.
The audit specifically focused on the two following questions:
"(i) Has the Commission developed a sound approach for
controls on simplified procedures, taking into account international best
practices, and did it monitor the correct application of simplified procedures
and the controls thereon?
(ii) Do Member States use a sound and standardized
approach for controls on simplified procedures and are these controls
For their analysis, the Court reviewed the controls and
audit methodology that are applied in nine Member States. The results were
subsequently measured against the Court's control model. Approximately 1,000
customs declarations were checked. The results of the audit show that
simplified procedures are not (yet) effectively controlled in the majority of
the Member States that were part of the audit. As to the first question, the
Court concludes that a sound approach for controls on simplified procedures was
developed by the Commission, including a regulatory framework supported by
comprehensive guidelines, however not before the end of 2008. Aspects
relating to risk analysis and controls during processes need to be improved.
Furthermore, guidelines for ex-post audits are not complete and the Commission
did not start dedicated inspections on simplified procedures for imports until
2008. Therefore, the Court advises the Commission to improve the existing
regulatory framework and guidelines, using the Court's model as a basis, and to
adequately monitor the implementation thereof in all 27 Member States.
Regarding the second question, the Court concludes that the
Member States did not apply a standardized approach for controls/audits. The
audit has shown that the controls that were performed were ineffective/poor and
that Member States often followed their own interpretation of the rules, rather
than the guidance provided by the Commission.
According to the Court, such an absence of checks encourages
trader negligence, which may also result in financial consequences. For
example, a review of 274 declarations resulted in 49 errors, giving rise to a
€558,000 loss in duty payments, a loss that cannot be recovered as a result of
lapsed deadlines. Therefore, the Commission is advised to instruct Member
States to use a common approach for checks and audits, in line with the control
model defined by the Court, and to encourage Member States to exchange
information in order to collectively develop a set of "best practices." The
Commission's role in this regard should be to actively review the authorization
processes of the Member States and to encourage Member States to computerize
all aspects of the processing of simplified procedures for imports.
In sum, the Court's audit showed that improvements are
necessary in order to ensure proper functionality of customs simplification
regimes. As customs authorities rely on completeness and accuracy of
information provided by economic operators, it is crucial that the control
strategies filter out (potential) irregularities. This is important, not only
from a customs compliance point of view but also from a financial perspective.
One of the main objectives is that the European customs legislation, control
models and guidance tools are uniformly applied in all 27 Member States. This
will be a challenge for all parties involved.
If you have any questions on the above or would like to
receive more information about the details of the Court's report, please do not
hesitate to contact your Greenberg Traurig liaison.