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Weaknesses and loopholes in customs controls, say EU Auditors

06 December 2017

Important weaknesses and loopholes indicate that EU customs controls are not being applied effectively, according to a new report from the European Court of Auditors. This has an adverse effect on EU finances, say the auditors.

Goods entering EU Member States from outside the European Union are subject to customs controls before they are released for free circulation within the EU. However, importers can deliberately reduce or evade customs duty liability by, for example, undervaluing their goods, declaring a false country of origin or shifting to a product classification with a lower duty rate.

The auditors examined whether the European Commission and the Member States had designed robust controls on imports. They visited the customs authorities of five Member States: Spain, Italy, Poland, Romania and the United Kingdom.

They found serious weaknesses indicating that there are shortcomings in the legal framework, as well as ineffective implementation of customs controls on imports. This adversely affects the financial interests of the EU.

Pietro Russo, the Member of the European Court of Auditors responsible for the report, said:

Customs duties make up 14% of the EU budget, or about €20 billion. Their evasion increases the customs gap and must be compensated by higher GNI contributions by Member States. This cost is ultimately borne by European taxpayers.

There is insufficient financial incentive for Member States to apply customs controls, say the auditors. Those which do apply customs controls, but are not successful in recovering losses to the EU revenue, risk financial consequences, whereas those which do not apply such controls may face no risk. In addition, a number of loopholes exist in the Member States with regard to the control of imports.

The auditors recommend that the European Commission:

  • Produce periodic estimates of the customs gap from 2019 and use them to set customs controls targets;
  • Strengthen support for national customs services, including a review of collection costs;
  • Propose that the next EU action programmes contribute financial sustainability to the customs European Information Systems;
  • Be more precise in requests contained in Mutual Assistance communications;
  • Propose amendments to customs legislation to make the indication of consignors compulsory.

To read the full report, click here

 

As reported by the European Court of Auditors



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