Some business-relevant highlights from the 6th Customs Practitioners' Conference

In June 2022, the 6^th Customs Practitioners Conference took place in Lithuania. The importance of customs in the context of the war in Ukraine, challenges for business and the role of customs professionals in helping top-level managers to make strategic decisions and ensure compliance with them, as well as related liability issues, were emphasised. We invite you to familiarise yourself with what was discussed and pointed out by several speakers. 

‘The new EU customs framework: how operators have switched constraints into opportunities?‘ by Christophe Pereira, Customs and Supply Chain Manager, La Poste Groupe, France

Christophe focused on the European customs regulations of 2021 and their influence on the evolution of customs in business strategy development. 

The development of e-commerce since the early 2000s has fundamentally changed the international landscape. Customs authorities did not stay aside from this process. According to Christophe, to meet e-commerce challenges customs authorities in different countries focused on the following purposes:

• security and safety;
• taxes.

The EU has already implemented a new international framework for security as well as for tax and customs regulations, which cover:

• safety/ security component - Import Control System 2;
• obligation for economic operators to declare electronically all imported goods, including low-value consignments;
• VAT e-commerce package, which obliges consumers to pay VAT on all imported goods regardless of their value;
• embargoes and denied parties with obligation for economic operators to build up a system that allows preventing transactions with non-authorised companies/ persons and countries; to comply with these regulations economic operators must create a new IT architecture.

All regulations mentioned above have caused huge changes in logistics operators’ activities. Christophe highlighted the main aspects of them:

• the possibility for logistics operators worldwide to intensify the use of electronic messages for customs purposes (mainly for electronic declaration);
• consequences of lack of data or poor quality data may lead to delays in customs clearance and release of goods and damage the reputation of the operator.

New regulations caused a change in the role of customs experts. Christophe believes that for a couple of years, customs experts have been a key element for their companies to get compliant with those rules. Moreover, they will be able to implement new strategies and switch constraints into opportunities. The experts have to foresee the development of e-commerce and cross-border issues due to understanding new trends of e-consumers and e-sellers. They also need to understand new schemes of importation and build closer relationships with supply chain stakeholders. Customs experts should be awarded and use new technologies (AI, blockchain).

Customs experts help top management make the right decisions.

‘Responsibilities in customs law - what does the UCC say about this?’ by Dr Talke Ovie, Attorney at Law, HARNISCHMACHER LÖER WENSING Rechtsanwälte PartG mbB, Germany

The Union Customs Code (the UCC) mentions many subjects involved in customs activity. Among them are the economic operator, holder of the procedure, consignor, owner, operator, etc. Accordingly, these entities have obligations to customs (payment of customs debt, presentation of goods, submission of customs declaration, etc.) under customs legislation. Sometimes such obligations are not clearly matched with the persons responsible for their fulfilment. In other words, the UCC addresses these obligations to any persons involved (e.g. Articles 15, 170, etc.). In this regard, several questions arise: who is responsible for fulfilling the obligations, and who specifically must do something to comply with the provisions of customs regulations? The UCC does not answer these questions. At the same time, the UCC does not say anything about cases of violation of the law.

In every case, each person and economic operator who is a part of a supply chain should find out his/her specific obligations and responsibility.  

‘Customs Analytics Tool - big data serving optimisation and compliance’ by Marcin Majewski, Senior Manager in the Indirect Tax team, PwC Poland

Marcin presented an innovative approach to customs data analysis and audit in his presentation 'Customs Analytics Tool'. The world is changing very quickly, and we can see new dynamics in the complex macro-economic environment. There are new challenges, e.g. rising costs of materials and components as well as new fields of mandatory compliance (sanctions against Russia and Belarus), etc. In such conditions, a traditional audit is no longer sufficient. So, the special customs analytics tool mentioned above can help to meet these challenges. It allows the processing of big data received from a company's internal system and customs brokers as well as customs and tax authorities. This data analysis can detect areas that may lead to the risk of non-compliance with customs provisions or loss of profit, for example, incorrect customs classification, missing preferential origin, risk exposure within transfer pricing policy, etc.

Based on the analysis with this tool, fifteen reports for different companies were prepared. As a result, fourteen million euro has already been saved. The amount of potential savings detected is twenty-six million euros. These digits indicate the significant role of customs in international trade and the need to pay great attention to it on the part of economic operators. However, sometimes this is one of the most difficult tasks to convince trader that customs is important.