A Paperless Trade and Customs Environment in Europe: Turning Vision into Reality

A paperless trade and Customs environment brings real benefits for both business and governments. Increasing internationalisation of business and supply chain security considerations increase pressure for the automation of trade and customs procedures. The European Commission has recently developed a vision for a paperless trade and Customs environment. It argues that implementing this vision, although a major task, would finalise the historic move towards a fully integrated Customs Union. The challenge of implementing the vision requires a high degree of coordination between the Commission, Member State governments and business stakeholders. The economic prize of modernisation through trade facilitation and requirements for more effective security controls should drive both business and political initiatives. Success requires a detailed understanding of strategic and operational issues at both business and government level. This paper examines how that vision can be turned into a reality. Introduction The establishment of the European Union has been an unprecedented achievement, securing peace and prosperity for its members. The free movement of goods within its common customs territory has been one of the cornerstones of its success. Yet, a significant element of the economic prize that a Customs Union offers is compromised by the fragmentation of trade and Customs systems. Despite common legislation, differences in practical control and enforcement procedures between Member States cause avoidable additional transaction costs. In an international business environment, such waste harms the competitiveness of European based businesses. Modernisation of the trade and Customs system would enhance the efficiency and effectiveness of the supply chain, thereby improving both its performance and its security, an issue that has achieved practical and policy prominence in the light of recent terrorist threats. The debate on reducing regulatory transaction cost in international trade is nothing new and broadly falls under the term Trade Facilitation. In spite of the relative sophistication of its administrative apparatus, there is significant scope for reducing the burden on Europe’s international trade of frontier-related procedures. The European Commission has recognised this challenge by producing an ambitious 1 COM (2003) 452 2 Andrew Grainger, SITPRO, 76 Oxford Street, London W1D 1BS, United Kingdom; [email protected] 3 SITPRO (Simplifying International Trade) www.sitpro.org.uk; EFA (Europäisches Forum Für Aussenwirtschaft, Verbrauchersteuern und Zoll e.V.) http://www.efa-muenster.de; ODASCE (Office de Développement par l'Automatisation et la Simplification du Commerce Extérieur) http://www.odasce.asso.fr 4 Article 23 of the Treaty establishing the European Community (consolidated version 1997)