The European Union Customs Code and how it affects logistics

The logistics sector is getting ready to deal with the significant changes that will be introduced once the EU Customs Code (UCC) comes into force in May 2019. Port terminals operating as temporary storage facilities (TSFs) and total changeover to electronic documentation are two of its most ambitious objectives.

What is the UCC

The EU Customs Code  defines the legal framework for rules and customs procedures in within the EU territory. It came into force in May 2016, replacing and adapting earlier European framework regulations to meet the requirements of the Lisbon Treaty. It is still in a transitional phase, and is initially expected to be fully rolled out by 2020.

Due to being relatively new, the code is in line with current trade requirements, where simplicity, functionality and agility are its key objectives. It therefore involves providing regulation to facilitate trade and make it more fluid, while also promoting the use of technology.

What’s new in UCC for port terminals

Port terminals are vitally important in any type of transport of goods. Therefore, any change in regulation can alter the rules of the game and it very important to keep a very close eye on their implications. We have two very important pieces of news related to the change introduced by the UCC; one is how all terminals must be able to act as TSFs (temporary storage facilities) as well as the expected changeover to electronic documentation.

Port terminals as Temporary Storage facilities (TSFs)

This change provided for in the UCC is called on to put an end to one of the most ambiguous aspects in port terminals, redefining their responsibilities. As of May 2019, all terminals belonging to the EU must be authorised to operate as a temporary storage facilities. This means that the terminals must meet a series of requirements, procedures and obligations, therefore doing away with the limbo that currently exists in this matter.

Despite becoming mandatory in May, port terminals will benefit from a transitional period of approximately 6 months, although the details are yet to be specified.

So, what is involved in the TSF role that port terminals must adopt? Mainly, that goods from national and international transport (from European as well as other countries) may remain in the port terminals for a period of 90 days. Following this 3-month period, the port terminal should inform the customs office and start withdrawal procedures.

This new role as a TSF means that the terminals will be responsible for customs and tax purposes for authorising the departure of any goods that may be at its facilities, as well as for the monitoring of such goods and their safekeeping, reporting any problem or irregularity to the customs authority.

To sum up, the port terminals will become more significant and independent, taking on new responsibilities and ensuring the storage and surveillance of goods that remain in their facilities under the TSF system.

Move over to electronic documentation

One of the main purposes of the TSF is the adoption of digitised and harmonised customs documentation. This means that all information exchanged between customs authorities and companies is by e-mail.

However, it is an ambitious project and requires hard work, especially in technology. The main reason for still being in a transitional phase is due to the fact that the necessary computer systems are not yet fully operational. While the transitional period should be completed by 31 December 2020, the European Commission has proposed to extend it to 2025 to ensure that each customs process can be effectively concluded electronically.

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