European Union Customs Union
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.[a] In addition to the EUCU, the EU is in customs unions with Andorra, San Marino and Turkey (with the exceptions of certain goods),[b] through separate bilateral agreements.[2]
See also: European Union free trade agreements
European Union Customs Union
1968[1]
4,950,000 km2 (1,910,000 sq mi)
518,000,000
2021 estimate
$16.1 trillion
2021 estimate
$16.6 trillion
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[edit]
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[edit]
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[edit]
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[edit]
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]