Association des Constructeurs Européens d'Automobiles

Internal November 2023 Comments UCC Review Ref. Ares(2023)7547637 - 07/11/2023 www.acea.auto 1 ACEA COMMENTS ON THE EUROPEAN COMMISSION’S PROPSOAL FOR A REVIEW OF THE UNION CUSTOMS CODE INTRODUCTION The European Automobile Manufacturers Association (ACEA) has taken note of the proposal of the European Commission for a review of the Union Customs Code. We welcome the review as an opportunity to deliver a much-needed modernisation of the European customs legal framework as well as its infrastructure and processes. We recognise the need for transformation created by rapid developments in the nature of the work and responsibilities borne by European customs authorities. The increase in the volume of traded goods and the exponential growth in different trading channels have created new challenges and risks that need to be addressed in an updated legal framework.

…trading channels have created new challenges and risks that need to be addressed in an updated legal framework. The possibilities that new technology and digitalisation can offer customs in dealing with these new challenges should be harnessed not just for the benefit of European and national authorities but also for the benefit of economic operators too. Many of the potential benefits of the existing UCC have not been realised in the decade since it came into operation. Schemes like the Authorised Economic Operator have not yet been exploited to their full potential and this is a frustration for sectors like the automobile industry, with our reliance on global supply chains and the import of goods from all over the world for use in manufacturing here in Europe.

…on global supply chains and the import of goods from all over the world for use in manufacturing here in Europe. The possibility to be able to transform how customs processes are undertaken and to facilitate more rapid and predictable movements of goods in and out of the EU is appealing, even if the timeline proposed by the Commission for achieving that change is extremely long. While there are many elements of the UCC revision that will be welcome by our industry in principle, there is clearly a lot of important detail that is being left to implementing and delegated acts. Until the complete legislative architecture for the revision of the UCC is published the full assessment of the potential impact on operators will remain uncertain.

…the revision of the UCC is published the full assessment of the potential impact on operators will remain uncertain. www.acea.auto 2 EU CUSTOMS AUTHORITY & CUSTOMS DATA HUB ACEA welcomes the establishment of an EU customs authority and the creation of the customs data hub. In principle, this should allow for a more centralised and digitalised approach to customs processes and risk management by customs authorities, while in parallel providing greater scope to streamline processes for economic operators, in particular Trust and Check Traders. While the greater use of electronic methods to streamline processes was promised under the UCC, it never fully materialised into real efficiency gains for economic operators.

…processes was promised under the UCC, it never fully materialised into real efficiency gains for economic operators. If the creation of the Authority and the Data Hub can avoid adding additional levels of bureaucracy, while delivering on the promised efficiency gains, then this can only be well received by European traders. Recommendations: • It is hard for business to assess whether the exceptionally long timelines involved in the creation of the Customs Authority and the Data Hub are unambitious or just a realistic approach to an extremely complex undertaking. Certainly, the ultimate target date for full implementation of 2038 seems very distant.

…extremely complex undertaking. Certainly, the ultimate target date for full implementation of 2038 seems very distant. It would be interesting to know which elements of the proposal could be deployed in advance of that date and would encourage the Commission to explore BusinessEurope’s proposal that could allow an “opt-in” option for businesses willing to use Data Hub facilities earlier than 2038 as part of a transitional introductory phase for the new system. • Actual real-time reporting of data might not be realistic. ACEA advises that the target should be a more realistic near-real time objective. To facilitate this the delivery of data to the datahub should be reserved to essential data only, allowed for by interfaces / API’s with a company’s ERP system, avoiding the manual input of any data into the Data Hub.

…for by interfaces / API’s with a company’s ERP system, avoiding the manual input of any data into the Data Hub. • The abuse of genuine trade for fraudulent and criminal activity is already a major issue for economic operators. The availability of highly valuable real- time data required in the Data Hub gives rise to concerns about cyber security and the need to ensure that no unauthorised access can be gained to that information. Businesses should be involved in the design of the processes on how company data will be accessed and, in due course, know who accessed their data and for what purpose. www.acea.auto 3 TRUST AND CHECK TRADER It has been a major failure of the UCC that the AEO has not delivered fully on its promise to make trade easier for certified economic operators.

…of the UCC that the AEO has not delivered fully on its promise to make trade easier for certified economic operators. While benefits do exist, not all of the simplifications originally foreseen have been implemented, and there is a disparity in how the system is applied between different member states. The promise of a revised UCC to deliver a more process-oriented approach to customs procedures through the Trust and Check Trader scheme is welcome, but its success will be judged on the delivery of tangible positive outcomes for AEOs. Similarly to other aspects of the UCC revision, the timeline for delivering on the TCT is extremely long. It is disappointing to industry that, while the need for reform has been identified, that the first benefits of that process will not be seen for almost a decade and its full operation not realised until 2038.

…the first benefits of that process will not be seen for almost a decade and its full operation not realised until 2038. Recommendations • ACEA would like to see an ambitious approach to delivering real benefits under the Trust and Check Trade scheme. We recognise the trade-off between providing data to customs in return for efficiency benefits as long as there is a genuine equilibrium between responsibilities and rights. In addition, the detailed nature of the real-time data provided by TCTs raises the same concerns and need for effective cybersecurity restrictions, as mentioned above. • In particular, for our members, the ability for operators to apply self- assessment procedures and the possibility to allow exemptions for the issuance of transit documents should be high priority objectives for early implementation under the TCT.

…for the issuance of transit documents should be high priority objectives for early implementation under the TCT. • While clearly outside of the scope of the UCC revision, reform of how VAT rules apply to TCTs should be considered. Processing value added tax claims is a major burden for multi-jurisdiction operators like automobile manufacturers and it could provide a platform for providing a major simplification of harmonising of how value added tax rules apply to such operators (e.g. one-stop-shops, etc.). • ACEA also supports BusinessEurope’s call for the consideration of the creation of a single authorisation for special procedures. www.acea.auto 4 TEMPORARY STORAGE The automotive supply chain is a frequent user of temporary storage rights, in particular for non-standard, non-preannounced shipments like prototypes, for example.

…of temporary storage rights, in particular for non-standard, non-preannounced shipments like prototypes, for example. The reduction of temporary storage from 90 to a maximum of either 3 or 6 days will lead to a dramatic change in the way such facilities are used in the future. In particular, traders will struggle to obtain the required data in time to clear goods before the deadlines expires, forcing them to put those goods under a customs procedure. ACEA understands that the intention of reducing the time allowance for temporary storage is in order to effectively merge this facility with customs warehousing procedures, for which no time limits are in place but which would require a guarantee to be paid on the goods.

…for which no time limits are in place but which would require a guarantee to be paid on the goods. We are concerned about the impact this will have on our supply chain, bearing in mind the quantity of different items that container / car terminals will have to deal with in such a limited period. We are also concerned with regard to the additional data that would be required of operators to enter into a warehousing procedure as opposed to keeping the goods in storage and the impact of guarantee payments.

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