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EU customs union

24 August 2006
by eub2 -- last modified 24 August 2006

The EU customs union, one of the EU's earliest milestones, abolished customs duties at internal borders and put in place a uniform system for taxing imports. Internal border controls subsequently disappeared. Customs officers are now found only at the EU’s external borders. They not only keep trade flowing, but help protect the environment, our cultural heritage and plenty besides.


The EU customs union is a single trading area where all goods circulate freely, whether made within the EU or imported from outside. A Swedish car can be dispatched to Hungary without paying any duty and without any customs control. Duty on a car imported from Japan is paid when the car first enters the EU, but after that there is nothing more to pay and there are no more checks. The EU completed the customs union in 1968. Customs checkpoints at borders between EU countries disappeared in 1993.

Customs activity remains very important nevertheless. Customs in the EU handle 19% of total world trade. That is more than two billion tonnes of goods per year passing through EU ports and airports. Customs process more than 120 million customs declarations each year, check more than 15 million documents and carry out 5.6 million physical customs controls.

Customs work is complex

The customs officer's job is complex. The EU sets its import tariffs and other customs rules on the basis of international agreements (mostly those negotiated within the Customs Co-operation Council and the World Trade Organization). In principle, these apply to all imports, but the EU has trade agreements offering cut-rate entry and often duty-free access for goods from neighbouring, developing and emerging economies. These include the other countries of the European Economic Area (Iceland, Liechtenstein and Norway), Switzerland, former British, French and Portuguese colonies in Africa, the Caribbean and the Pacific (the ACP countries), countries around the Mediterranean basin, including the Balkans, and countries which are candidates to join the EU. Customs officers need to understand which importer should pay how much and to spot false declarations of origin designed to claim a lower tariff than they are entitled to.

More to customs than meets the eye

Customs officers ensure compliance with EU and international rules on protection of the environment and of consumer health and safety. During environmental crises, they have been responsible for tracking dioxin-contaminated or irradiated foodstuffs and ensuring they were returned to their country of origin. Some goods, such as certainelectrical appliances, cannot be sold in the EU if they do not meet certain standards. The easiest way of checking that imported goods comply is when they clear customs.

Customs officers make sure that endangered species are protected. That means checking trade in ivory, protected animals, birds and plants. They also protect our cultural heritage by watching for smuggled art treasures. They verify the legitimacy of exports of sensitive technology which could be used to make nuclear or chemical weapons.

They are at the front line in tackling counterfeiting of goods as diverse as mobile phones and medicines, and piracy of items such as CDs and software in the interests of public health and safety, and the jobs of those who work in legitimate businesses producing these goods. This requires a keen eye for the difference between jeans or watches genuinely made by big-name fashion houses and items that are merely copies. EU customs officials seized 103 million counterfeit items in 2004, a 1000% increase since 1998. This included 41 million packets of cigarettes, 18 million audio and video products, and 18 million toys and games. The Commission is stepping up co-operation with business and other countries to stem the rise in counterfeiting and piracy.

Customs officers do a vital job in collecting statistics. Their records contribute to decisions on whether to introduce limits on goods which may not be competing fairly with EU products. They collect trade flow data which help policymakers detect economic trends. Customs officers make sure that anyone travelling with large amounts of cash or its equivalent (such as bearer bonds or cheques) is not laundering money or evading tax. They help fight illicit traffic in people, drugs, pornography and firearms. They support the work of the police and immigration services in combating organised crime.

Keeping it as simple as possible

At all times, the EU balances the goal of easy trade and travel against the need for customs officers to collect statistics and to check containers - for example, to see that they do not contain arms and are not being used for human trafficking. Automation helps. Use of container scanners improves security without holding up trade while customs officers make lengthy manual container searches.

Getting it right is vital

Customs officers play a crucial role in collecting duty on imports and value-added tax. They ensure imports are not avoiding duty by claiming to fall into a category that pays a lower tariff. They detect fraud in value-added tax declarations and payments, or the evasion of excise duties on items such as cigarettes. Without this work by customs officers, it would be all too easy for goods to disappear into the black economy rather than entering the tax system, or for unscrupulous businesspeople to report fictitious trade. On the other hand, the EU protects individuals' rights to buy goods, such as beer, wine and cars in another member state and to take them home for friends and family and not-for-profit sale without paying extra at the border.

Collecting the EUR 12 billion which is due each year is important not just for fair trade but also for the EU's budget, one quarter of which comes from money collected in customs duties, levies on agricultural imports, and value added tax. (The remainder comes from money raised through contributions from member states).

The EU is, therefore, constantly working on updating and automating procedures which will smooth trade across its internal and external borders while meeting new security threats. The EU and its member states are spending well over EUR 100 million between 2003 and 2007 on automating customs procedures. They have plans for an end to all paper-based customs operations by 2010, the target date for full electronic integration of the customs systems operations of all member states.

EU Customs web links

European Commission Customs DG
Summaries of EU Legislation in Force: Customs
Recent case-law of the Court of Justice and the Court of First Instance : EU Customs Tariff
Further information on EU Customs on Europa

Source: European Commission
Last updated: March 2006