Tuesday, 18 March 2008

EU TFEU: Customs union aims

We look at the strategic objectives of the European Union's customs union in the light of the current Treaty establishing the European Community and the Lisbon Treaty undergoing ratification in the member states.



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Article 27 of the Treaty establishing the European Community (TEC), in Chapter 1 The customs union, presents the following aims, addressed to the Commission. The latest consolidated version of the current treaties is found in OJ 29.12.2006 C 321 E/52:

Article 27 TEC

In carrying out the tasks entrusted to it under this Chapter the Commission shall be guided by:

(a) the need to promote trade between Member States and third countries;

(b) developments in conditions of competition within the Community in so far as they lead to an improvement in the competitive capacity of undertakings;

(c) the requirements of the Community as regards the supply of raw materials and semi‑finished goods; in this connection the Commission shall take care to avoid distorting conditions of competition between Member States in respect of finished goods;

(d) the need to avoid serious disturbances in the economies of Member States and to ensure rational development of production and an expansion of consumption within the Community.

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The intergovernmental conference did nothing to disturb these guidelines in the Treaty of Lisbon (ToL), so there are only a few light touches to apply to this provision to be able to read the consolidated version, as it appears in the Treaty on the Functioning of the European Union (TFEU). We bear in mind that ‘Community’ is replaced by ‘Union’, and that the final numbering of the TFEU differs from the Lisbon Treaty version:

Part Three Policies and internal actions of the Union

Title 1a (ToL), later Title II Free movement of goods

Chapter 1 (ToL and TFEU) The customs union

Article 27 TFEU (ToL), after renumbering Article 32 TFEU

In carrying out the tasks entrusted to it under this Chapter the Commission shall be guided by:

(a) the need to promote trade between Member States and third countries;

(b) developments in conditions of competition within the Union in so far as they lead to an improvement in the competitive capacity of undertakings;

(c) the requirements of the Union as regards the supply of raw materials and semi‑finished goods; in this connection the Commission shall take care to avoid distorting conditions of competition between Member States in respect of finished goods;

(d) the need to avoid serious disturbances in the economies of Member States and to ensure rational development of production and an expansion of consumption within the Union.

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The intermediary stages in the treaty reform process were almost identical to the current and Lisbon Treaty wording:

Article III-40 Draft Constitution (OJ 18.7.2003 C 169/34)

Article 151(6) Constitution (OJ 16.12.2004 C 310/65)

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The guidelines offered to the Commission are evident in part, with subparagraph (a) targeting external effects and subparagraph (b) aiming at improving competition internally.

The rise in global demand for energy, raw materials, water and food seems to outrun the resource base or the production capacity, which leads to higher prices. Scarcity increases the risk of unfair practices and serious disturbances as well as the possible need for reassessment of consumption patterns.

Like political objectives in general, the aims the Commission is ordered to follow can be contradictory in part. The real test is, as often, which guiding principles are ‘more guiding than others’.

The substantial objectives of the customs union are intrinsically linked to trade policy and internal market aims, but here we take a closer look at questions of more indirect import, focusing administrative developments of customs within the European Community (Union).

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We assume that the reader is a non-specialist, who wants to get acquainted with the basic aims of the customs union.

The Commission’s ‘Customs strategy’ pages offer an introduction. The Commission proposes legislation, and there is a common customs border, but operations are carried out by 27 national customs administrations (working to fill the EU’s till). Customs and trade policy questions are intertwined. Smooth cooperation between different authorities and a paperless customs environment are present challenges.

The Commission’s customs strategy is from 2001, and there is a joint mission statement from the EU customs administrations (2005) as well as strategic aims and key actions. There are references to key documents for further study:

http://ec.europa.eu/taxation_customs/customs/policy_issues/customs_strategy/index_en.htm

We take note of the page ‘International Customs Day 26 January 2008’ for two reasons. Customs are crucial in the fight against the trafficking of drugs and drugs precursors. In 2007 the European Community was admitted to the World Customs Organisation (WCO), on an ‘interim basis’ akin to the WCO members’ rights and obligations:

http://ec.europa.eu/taxation_customs/article_4709_en.htm

How the objectives in the customs policy area are reflected in customs legislation can be seen by looking at newish legislation in force, with the Community Customs Code and its implementing provisions highlighted as the basic legislation:

http://ec.europa.eu/taxation_customs/common/legislation/legislation/customs/index_en.htm


Proposed legislation is on offer through the page ‘Customs proposals (legislation)’:

http://ec.europa.eu/taxation_customs/common/legislation/proposals/customs/index_en.htm

Given the importance of the Community Customs Code and its implementing decisions, we are offered an explanatory framework ‘101’ by the Commission’s press release ‘Modernised Community Customs Code – Frequently Asked Questions’ (MEMO/08/101, 19 February 2008).

Then there is Decision No 624/2007/EC of the European Parliament and of the Council of 23 May 2007 establishing an action programme for customs in the Community (Customs 2013) (OJ 14.6.2007 L 154/25), which presents how the strategic goals of the European Community are pursued at the operational level of customs administrations through an action programme from the beginning of 2008 until the end of 2013 (in line with the current multiannual financial framework). The general reader is encouraged to read the recitals (‘Whereas’), setting out the priorities of the Customs 2013 Programme.


Ralf Grahn