Interesų grupė
Stichting Onderzoek Multinationale Ondernemingen Centre for Research on Multinational Corporations KNSM-laan 17 1019 LA Amsterdam The Netherlands Tel: +31 (0)20 639 12 91 E-mail: [email protected] www.somo.nl IBAN: NL56 TRIO 0198407777 BIC-CODE: TRIONL2U VAT number: NL002954631B01 Chamber of Commerce: 412 233 08 Reform of the Union customs legislation: SOMO submission for the call for evidence for an impact assessment The Centre for Research on Multinational Corporations (SOMO), is an action oriented non-profit research organisation based in Amsterdam, the Netherlands. SOMO investigates multinationals, independent, factual, critical and with a clear goal: a fair and sustainable world, in which public interests outweigh corporate interests. SOMO welcomes the Commission’s planned reform of the Union Customs Code (UCC) and this call for evidence for an impact assessment thereof.
…planned reform of the Union Customs Code (UCC) and this call for evidence for an impact assessment thereof. SOMO advocates for amendments to the UCC that enable nonstate actor access to customs trade information, ensure that customs collect more detailed information from companies including on intra-EU trade, and make it available online. Since 2017, an EP resolutioni and several CSOii statements have pleaded in vain for such measures. The planned reform of the UCC provides a historic opportunity for the European Commission (EC) to implement these urgent and important amendments. Before presenting these recommendations in more detail we will first elaborate on the main arguments for EU customs trade information transparency, how it aligns with the EC’s agenda for the UCC and how it contributes to broader EC policy goals.
…transparency, how it aligns with the EC’s agenda for the UCC and how it contributes to broader EC policy goals. EU customs’ professional secrecy is hindering global trade transparency and sustainability Transparency in international trade allows society to investigate human rights abuses and harmful environmental practices, defend the rights of affected stakeholders, facilitate redress and remedies for victims, and hold companies accountable for violations. The need for supply chain transparency is acknowledged and enshrined in various international and national instruments to promote responsible business conduct most notably the OECD Guidelines for Multinational Enterprises and the United Nations Guiding Principles on Business and Human Rights (UNGPs). In practice, however, commercial relations are often opaque and transaction-level information is generally unavailable.
In practice, however, commercial relations are often opaque and transaction-level information is generally unavailable. Customs collect detailed supply chain information as goods are traded over international borders. However, customs information is only accessible for about one out of four countries worldwide and generally only for a hefty fee. For many leading countries in international trade of goods, including China, Germany, Netherlands, UK, and Canada, customs information on trade transaction between companies cannot be accessed at all. In the world’s largest trading bloc, it is the Union Customs Code (UCC) that blocks nonstate actor access to information with customs in all EU member states for reasons of professional secrecy.
…blocks nonstate actor access to information with customs in all EU member states for reasons of professional secrecy. Transparent customs trade information contributes to specific UCC reform objectives One of the main needs the EC identifies for UCC reforms is to address the capacity challenges customs face through their growing involvement in enforcement in areas such as ‘product safety, environmental protection, climate change, intellectual property rights, dual use goods, protection of human and animal health, firearms and smuggling’. The EC also explicitly warns that without reform, customs will not be able to cope with their role in the enforcement of new policies such as the ‘banning of forced labour products, Ref.
…be able to cope with their role in the enforcement of new policies such as the ‘banning of forced labour products, Ref. Ares(2022)6343545 - 14/09/2022 the tracing of firearms in the EU, the sustainability requirements of EU legislation, or the carbon content of imported products.’ To face these important challenges, the main policy option the EC considers is ‘enhancing the co-operation between customs and non-customs authorities’, including in information exchange.iii By making sure CSOs have access to customs information, CSOs will contribute to improved customs oversight and enforcement in a range of policy areas. They will be motivated to share insights and evidence of possible violations of EU-regulation with customs and non-custom authorities because it aligns with their agenda for change.
…violations of EU-regulation with customs and non-custom authorities because it aligns with their agenda for change. Indeed, in the USA, customs information is accessible and is used by CSOs to help custom enforcement of the country’s forced labour products baniv and sanctions,v for example.
…is used by CSOs to help custom enforcement of the country’s forced labour products baniv and sanctions,v for example. Transparent customs trade information contributes to broader EC objectives Global value chains (GVCs) and their asymmetric commercial relations are and have historically been a source of inequalities, environmental harms, and human rights violations.vi The EC recognises that adverse human rights and environmental impact occur in companies’ own operations, subsidiaries, products, and in their value chains, in particular at the level of raw material sourcing, manufacturing, or at the level of product or waste disposal.vii For decades, governments around the world have relied on voluntary and self- regulatory approaches, i.e. corporate social responsibility (CSR), to address the negative impacts of GVCs.
…and self- regulatory approaches, i.e. corporate social responsibility (CSR), to address the negative impacts of GVCs. The ineffectiveness of voluntary approaches to making GVCs more sustainable is now recognized more widely including by the ECviii. Consequently, governments around the world are increasingly addressing responsible business conduct and sustainable supply chains through regulation. EU member states, France, and Germany have made national-level corporate due diligence laws and there is EU-wide regulation for conflict minerals (3TG) and responsible timber (EUTR). EU laws for Corporate Sustainability Reporting (CSRD), Sustainable Finance Disclosure (SFRD), and Deforestation are about to be implemented.
Reporting (CSRD), Sustainable Finance Disclosure (SFRD), and Deforestation are about to be implemented. Meanwhile, the EC came up with a proposal for a Corporate Sustainability Due Diligence (CSDD) directive and announced a regulation to ban EU imports of products made by forced labour. In all these regulations supply chain transparency for improving the sustainability of international trade they aim for plays a role.ix None of these regulations, however, (yet) ensures sufficient supply chain transparency for CSOs to adequately perform their (corporate) watch dog role. Indeed, while EU regulators explicitly acknowledge the importance of third-party support for enforcing these new regulations (EUTR and 3TG) and contributing to more sustainable supply chains (CSRD), the same instruments do too little in facilitating these nonstate actor contributions.
…supply chains (CSRD), the same instruments do too little in facilitating these nonstate actor contributions. Nonstate actor access to company-specific international trade data with EU Customs could greatly contribute to supply chain transparency and EU regulation for sustainable supply chains. Transparent customs trade information will not hurt competition For 50 countries, among which important trade actors such as the US, Brazil, and India, company-specific trade information with customs is available through commercial trade intelligence firms.
…and India, company-specific trade information with customs is available through commercial trade intelligence firms. SOMO found no evidence that this has hurt competition in these countries or has affected their competitive position Stichting Onderzoek Multinationale Ondernemingen Centre for Research on Multinational Corporations KNSM-laan 17 1019 LA Amsterdam The Netherlands Tel: +31 (0)20 639 12 91 E-mail: [email protected] www.somo.nl IBAN: NL56 TRIO 0198407777 BIC-CODE: TRIONL2U VAT number: NL002954631B01 Chamber of Commerce: 412 233 08 internationally. The same is true for the EU, whose trade with these 50 countries is available in detail. However, the need to protect business sensitive information and trade secrets is the main argument used when EU customs motivate their categorical refusal to share information with nonstate actors.
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