Związek Przedsiębiorców i Pracodawców

Union of Entrepreneurs and Employers ul. Nowy Świat 33 00-029 Warsaw T: +48 22 826 08 31 E: [email protected] www.zpp.net.pl NIP: 522-295-88-64 Position of the Union of Entrepreneurs and Employers (ZPP) on the revision of the Union Customs Code The Union of Entrepreneurs and Employers (ZPP) welcomes the initiative of the European Commission to make customs regulations better adapted to the challenges of digital transformation and the pro- climate agenda of the European Union. The presented initiative contains several key areas to be revised in order to strengthen the current legal framework, such as e-commerce operations, risk management, data analytics capacity and the protection of the single market against non-EU compliant imports from third countries. UCC regulations can be hard to acknowledge in practice for small and medium-sized enterprises.

…from third countries. UCC regulations can be hard to acknowledge in practice for small and medium-sized enterprises. Therefore, it should be kept in mind that the proposed changes do not worsen the situation of SMEs, which, especially in the e-commerce sector, are young entities and find it more challenging to adapt to legal changes. The Union Customs Code revision is one of several pieces of legislation that will majorly impact importing products to the single market, including those sold and purchased through e-commerce. Speaking of which, the Market Surveillance Regulation entered into force in July 2022, and currently, the European Commission is working on revising the General Product Safety Directive. The above legislative changes will significantly affect both traditional and online trading.

Product Safety Directive. The above legislative changes will significantly affect both traditional and online trading. In order to ensure the possibility of further e-commerce development, it is necessary to properly assess the effects of the regulation and its impact on the trading conditions in the European Union. In addition, it is needed to ensure sufficient time for entities actively involved in trade to familiarize themselves with the proposed changes and ensure proper and equal enforcement of the adopted provisions. Based on the expertise and experience of companies associated in the ZPP, we have developed recommendations for the European legislator to revise the Union Customs Code that best meets the needs of all trade participants and stakeholders. The paragraphs below describe the most important thematic issues.

…the needs of all trade participants and stakeholders. The paragraphs below describe the most important thematic issues. Cooperation between customs authorities The biggest challenge for the European Union is establishing efficient cooperation between customs and non-customs authorities. To effectively implement and enforce the new regulations, there is a need to tighten the joint action between the Member States' customs services and the tax authorities collecting VAT. The future could lead to creating a unified customs process that could take place through a single official communication channel with the public administration. Creating a single framework for customs clearance would be very beneficial for the single market and would make international trade safer.

…for customs clearance would be very beneficial for the single market and would make international trade safer. For this reason, we consider it equitable to use data already possessed by the public authorities and foster mutual exchange between relevant administrative units. Such simplification of procedures would benefit honest merchants, whose regular and compliant business operations would be easier to conduct. It would also be easier for customs authorities to reduce the workload due to more straightforward procedures. We recommend simplifying the process for both public authorities and entrepreneurs by effectively using the collected data that has already been made available to public authorities. At the same time, Ref. Ares(2022)6472286 - 20/09/2022 Union of Entrepreneurs and Employers ul.

…to public authorities. At the same time, Ref. Ares(2022)6472286 - 20/09/2022 Union of Entrepreneurs and Employers ul. Nowy Świat 33 00-029 Warsaw T: +48 22 826 08 31 E: [email protected] www.zpp.net.pl NIP: 522-295-88-64 this will ensure an adequate level playing field and market protection against dishonest entities that may threaten consumers and entrepreneurs who conduct business honestly. Entities that trade fairly within the single market create positive added value for the European Union. Therefore, they should not be burdened with additional obligations hindering their activities. The threat that should be counteracted by the revision of customs regulations is the entities introducing products to the block, disregarding the fulfilment of tax obligations.

…customs regulations is the entities introducing products to the block, disregarding the fulfilment of tax obligations. Additionally, the products introduced by these entities may be dangerous to end consumers as they may not meet European safety standards. Given the above, we consider it appropriate to improve the efficiency of customs control by using the data already held by the office, efficient data transfer and adopting better procedures that will effectively implement cooperation between the customs services of the Member States and tax offices. We recommend considering the possibility of verifying data that are collected by customs as "data of comparable quality". The ultimate desired effect will be the unification of procedures for honest traders and increased detection of irregularities for dishonest market actors.

…the unification of procedures for honest traders and increased detection of irregularities for dishonest market actors. Trusted traders as beneficiaries of simpler rules To increase the performance of the EU Customs Union, the legislator should consider supporting well- established businesses proven to be compliant with regulations and shift the focus of the customs authorities to fraud and other risk areas. For small and medium-sized enterprises, compliance with UCC may present challenges and require drudgery to respect customs conditions to retain secure and honest trade for their clients. Paring the requirements down to the bone should consider the position of diligent merchants. UCC improvements need to concentrate on forming cohesive and performant processes and instruments for authorities as well as awareness of outcomes on business.

…forming cohesive and performant processes and instruments for authorities as well as awareness of outcomes on business. Currently, the most distinguished challenge for the European Union in terms of those processes is the collaboration between customs and non-customs authorities across the Member States. Improving cooperation between those as well as further development of mechanisms (i.e. Import One Stop Shop) in a way workflow is fully centralized will benefit all parties. The beneficiaries of these changes shall not only be Authorized Economic Operators.

…will benefit all parties. The beneficiaries of these changes shall not only be Authorized Economic Operators. Performant, simplified processes of centralized clearance and capability for reconciliation of the entries in Import One Stop Shop for legitimate business owners, as well as small and medium enterprises, self-clearance in a similar way as VAT reporting and settlement, would smoothen the trade processes and reduce actions required from customs authorities at the border. The approach to data exchange To further back customs enforcement, we need to extend the quality and quantity of currently available data. Providing a single-window system that will ease customs processes, improve risk management, and improve data input and reusing it for authorities, vendors, and consumers is a good strategy.

…risk management, and improve data input and reusing it for authorities, vendors, and consumers is a good strategy. This is the key to effectively tackle down challenges brought to the light by modern e- commerce. Union of Entrepreneurs and Employers ul. Nowy Świat 33 00-029 Warsaw T: +48 22 826 08 31 E: [email protected] www.zpp.net.pl NIP: 522-295-88-64 Nevertheless, convergent and standardized interfaces between new and existing systems shall be established to avoid redundant reporting. Platforms are already reporting VAT data for sales conducted on their marketplaces via the IOSS. Payment Service Providers will notify via the Central Electronic System of Payment Information, beginning in 2024.

Payment Service Providers will notify via the Central Electronic System of Payment Information, beginning in 2024. Data sharing, data exchange between systems, and shares of data provided by the other actors in the supply chain will surely improve the detection of fraud, non-financial risks, and undervaluation. Of course, enforcement measures and appropriate liability must exist along with the beforementioned data exchange improvements. It is worth noting that despite taking steps regarding the exchange of customs data, not all carriers are accountable for customs declarations in regard to Article 23.3 of the UPU Convention. Furthermore, the European Commission shall watch for privacy and data security issues regarding sensitive information and whether the exchange is done in secure environments unavailable to malicious third parties.

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