EU Proposal for a Modernised Union Customs Code


EU Proposal for a Modernised Union Customs Code

What you need to know about the recent legislative initiative

The European Commission has published its proposal on the Modernised Union Customs Code. The main elements of the legislative draft and its potential business implications are discussed in more detail below.

Modernised Union Customs Code: the background

On 17 may 2023 the EU Commission has published a Proposal for a regulation of the European Parliament and of the Council establishing the Union Customs Code and the European Union Customs Authority, and repealing Regulation (EU) No 952/2013, (COM(2023)258; ‘the Proposal’ or ‘MUCC’), aiming to “take the customs union of the EU to the next level” (COM(2023) 257 final). This Proposal holds an integrated European approach to reinforce customs risk management and support effective controls by the Member States. It aims to enhance the uniform application of customs controls, and develop and implement a fully-fledged analysis and coordination capacity at EU level (see also the assessment report SWD(2023) 140 final and SWD(2023) 141 final).

With this Proposal the EU Commission is already looking at the future, even though some EU Member States, such as the Netherlands, are still in the process of implementing the digital requirements stemming from Union Customs Code (UCC), which entered into force on 1 May 2016. Looking towards the future indeed since the first provisions are designated to enter into force per 1 January 2028, other per 1 March 2032 and the last provisions should enter into force per 31 December 2037. That assumes of course that there will be no delay with getting the required digital infra structure in place.

The Proposal holds a number of new provisions and arrangements (see also correlation table of the COM(2023) 258 final Annex). It foresees not only in new and changed roles, such as the concept of ‘importer’, ‘deemed importer’, and ‘Trust and Check Trader’, but also in changes that may potentially have a profound impact procedures and internal business processes. The most notable of the changes we will address below.

1) Introduction of the concept of ‘Importer’, ‘Deemed importer’ and ‘Trust and Check Traders’

Currently the UCC does not hold a definition of ‘Importer’. In the Proposal, the ‘Importer’ is defined as a person who has the power to determine and has determined that goods from a third country are to be brought into the customs territory of the Union or a person who is considered a ‘deemed importer’.
A ‘deemed importer’ is also new in the Proposal. This is a person who is involved in the ‘distance sales’ regime for B2C transactions for VAT purposes. This regime, which is also referred to as the ‘IOSS’ (see Title XII, Chapter 6, Section 4 of Directive 2006/112/EC) applies to B2C-sales only (Article 5(47) and Article 145(5) MUCC). Where the application of the IOSS is currently limited to transactions not exceeding € 150, this threshold will be abolished (COM(2023) 262 final). Under the pending ViDA (‘VAT in the Digital Age’) Proposal the use of the IOSS will be mandatory for all distance sales (COM(2022) 701 final), irrespective of their value. Where currently the low value consignment relief for customs duties applies for consignments with an intrinsic value of less than € 150, this relief will be abolished and all shipments be subjected to import duties (COM(2023) 259 final and COM(2023) 259 final Annex). The Proposal does envisage certain simplifications, though. First of all can the ‘deemed importer’ opt for using a 5-bucket system when bringing goods into free circulation. These buckets are the following:

  1. 0% (e.g. for books, printed materials, works of art);
  2. 5% (e.g. for toys, musical instruments, metal cutlery);
  3. 8% (e.g. for silk and cotton products, ceramic products, photographic goods);
  4. 12% (e.g. for leather articles, travel bags); and
  5. 17% (e.g. for footwear, glassware).

These bucket rates are higher than the rates that would normally apply. The use of the bucket system may however lead to a reduced compliance burden. Although the HS-codes must be provided in the Advance Cargo Information (Entry Summary Declaration), for bringing the goods into free circulation the deemed importer that opted for the use of the bucket system does not have to classify the products on an 8 or more digit-level. He further does not have to prove the origin of the imported products (Article 149(4) MUCC). In addition, under this system products currently subject to a 0% erga omnes duty rate, will remain subject to that 0% duty rate. Less advantageous is also the fact that the costs of EU inland transportation cannot be backed out of the customs value when the deemed importer has opted for the bucket system (Article 156(2) MUCC).

In addition to AEO, the ‘Trust and Check Trader’ (TCT) will be introduced (Article 25 MUCC). Where the AEO obtains access to customs simplifications (or facilitations relating to security and safety), the TCT will have access to, in particular, the following benefits:

  • to provide part of the data on his or her goods after the release of those goods;
  • to perform certain controls and to release the goods upon receipt of those goods at the place of business of the importer, owner or consignee and/or upon delivery from the place of business of the exporter, owner or consignor (Article 61 MUCC);
  • to consider that it provides the necessary assurance of the proper conduct of the operations for the purposes of obtaining authorisations for special procedures;
  • to periodically determine the customs debt corresponding to the total amount of import or export duty relating to all the goods released by that trader; and
  • to defer the payment of the customs debt.

In case of TCT’s the customs debt will be incurred where the TCT is established and not where the import declaration is filed (Article 169(1) MUCC). It appears that the authorisations for simplified declarations, centralised clearance and entry into the declarant’s records will require the status of TCT. Existing licenses shall expire on 31 December 2037, being the date that the EU Customs Data Hub will become operational (Article 74 MUCC).

2) The EU Customs Authority and the EU Customs Data Hub

The Proposal foresees in the collection of data in the ‘EU Customs Data Hub’, which will be a giant data repository (Article 29 MUCC). The repository will be managed by the ‘EU Customs Authority’ (Title XII, Article 205-Article 238). The data is used for data analysis for the purpose of detection of fraud and non-compliance. The data in the repository can be made available to different institutions, such as OLAF, but also to the market operator. The EU Commission can determine which data elements will have to be submitted. Data is stored for a maximum of 10 years, after which it will have to be erased or anonymized. The ‘EU Customs Authority’ can also exchange data with third countries with which an agreement has been concluded that foresees in that possibility (Articles 243-244 MUCC). In addition to the coordinating role of the EU Customs Authority the Proposal holds a framework for cooperation between the customs authorities of the different EU Member States. This framework is in addition to the provisions of Regulation (EC) 515/97 on mutual assistance between the administrative authorities of the Member States and cooperation between the latter and the Commission to ensure the correct application of the law on customs and agricultural matters.

3) Urgent measures from the EU Commission

Based on Article 158 MUCC, the EU Commission will obtain the power to establish the appropriate method of customs valuation or criteria to be used for determining the customs value of goods in specific situations. It can do so on imperative grounds of urgency relating to such measures. This appears to be the legal basis for customs valuation regulations (see the proposed preamble, cons. 71). As we noted in our submission of 18 January 2023 with feedback on the binding customs valuation information (Ares(2022)8903368), such regulations will no doubt prove to be a useful tool to obtain clarity in customs valuation matters. The Commission will also get similar powers to implement for the purpose of restrictive measures and crisis management (Title XI – Article 201).

4) Non-criminal fines are introduced

Fines and penalties have been long been a political sensitive subject. In Article 42 of the UCC a basis for sanctions was introduced. In the Proposal a next step is taken in the sense that it holds an outline as regards when and how sanctions should be applied. Probably because of the sensitive nature of the subject, the Proposal qualifies the sanctions as ‘non-criminal sanctions’ (Article 245 MUCC), in matters of which the Member States have jurisdiction (Article 250 MUCC).

In Article 252 MUCC Union customs infringements are defined, such as “the provision of incomplete, inaccurate, invalid, inauthentic, false or falsified information or documents to customs”. Member States may however provide for further acts and omissions that constitute customs infringements. As regards the fines, Article 247 MUCC recognizes extenuating and mitigating circumstances, such as ‘good faith’ and Article 248 holds ‘aggravating circumstances’ such as the situation where a person responsible for the customs infringement has been sanctioned previously for a customs infringement, or has committed continuous and repeated customs infringements.

Articles 253-254 MUCC holds minimum non-criminal sanctions that must be applied within the limitation period of Article 249 MUCC (5-10 years). The minimum sanctions are 100%-200% of the underpaid customs duties in case of intent and otherwise between 30%-100%. In case the fines cannot be calculated on the basis of the underpaid import duties, these percentages shall be applied to the customs value of the goods. In addition, customs decisions held by the person concerned can be revoked, suspended or amendment of customs decisions, when such decision is affected by the infringement and the confiscation of the goods and means of transport can be confiscated.

5) Miscellaneous

Proposals like this always hold a trove of smaller changes that may have an impact on the customs practice. We have found the following nuggets:

  • Article 60(3) MUCC makes the release of the goods conditional to the fulfillment of the conditions for placing the goods under a procedure, including the submission of accurate data. The release can also be suspended. There will be a special procedure for the release of goods for a TCT. Submitting the required data will also become a requirement for accepting goods in storage in a customs warehouse. If that information has been provided by the importer or the carrier, the operator shall link its own additional information to that minimum information;
  • Another rather inconspicuous nugget that could have a considerable impact on the day-to-day customs operation is that on the basis of Article 62 MUCC the importer and the exporter can be instructed by the customs authority to amend one or more particulars of the data provided for placing the goods under a customs procedure. In addition, the importer and the exporter shall invalidate the data provided for placing goods under a customs procedure as soon as it comes to their knowledge that the goods will not be brought into or will not be taken out of the customs territory of the Union;
  • Article 94 MUCC: exit out of the EU only after pre-departure information has been provided or made available. Otherwise will the goods have to be presented to the customs authorities of the office of exit (Article 98 MUCC). The carrier will confirm the exit. The carriers will also have to provide or make available the Advance Cargo Information. Until 31 December 2037 the Entry Summary Declaration will serve as such (Article 80 MUCC);
  • From the Proposal it appears that it will no longer be necessary to file a declaration for placement of goods in temporary storage. Instead, non-Union goods shall be considered in temporary storage after the carrier has notified the arrival of the goods in the customs territory (Article 86(1) MUCC); and
  • In order to bring goods in free circulation, goods must not only comply with the customs legislation, but also with the relevant other legislation applied by the customs authorities in the sense of Article 5(3) MUCC. In that regard is according to Article 88(2) MUCC the release for free circulation in itself not be considered ‘proof of conformity’.


The legislative draft of the Modernised Union Customs Code (MUCC) envisages the proposal to become applicable in several steps. The first step is per 1 January 2028 and refers to the setting up of the ‘EU Customs Authority’. Per 1 March 2028 the low value consignment relief will be abolished and the ‘distance sales’ regime, which includes the ‘deemed importer’ and the tariff treatment for such sales, will enter into force. Ecomic operators and in particular TCT’s, may start fulfilling their reporting obligations using the EU Customs Data Hub from 1 March 2032. This Hub will be fully operational by 31 December 2037.

Impact on business

The MUCC-proposal impacts in particular the roles and processes in the customs functions, but broader than the traditional actors like the declarant or the exporter will impact on all market operators part of a supply chain is foreseen. Considering the nature of the changes proposed in the proposal, it is likely that these changes will have a profound impact on your business. Although this is a first draft and the actual impact may depend on the implementing regulations that will in the future become applicable, importers are well adviced to prepare early and assess the potential impact of this proposal and future amendments on their customs processes. We will of course monitor the developments in the legislative process and will keep you updated.

How we can help

Deloitte’s Global Trade Advisory specialists are part of a global network of professionals who provide specialised assistance in global trade and customs matters. If you would like to know more about the draft proposal of the Modernised Union Customs Code (MUCC) or discuss its impact on your business, please do not hesitate to contact one of our experts.

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