Opinion: Do customs agents still have a future?

Authored by: Lilian Retel

On 17 May 2023, the European Commission presented a proposal to fundamentally reform the Union Customs Code (UCC). The current code needs to be modernised to better reflect the rapidly changing world of trade, technology and security.

The planned changes are intended to streamline customs procedures, increase efficiency and improve controls, all to create a safer and more transparent trading environment within the European Union. The new UCC is scheduled to come into force between 2028 and 2037.

A notable proposal is the introduction of the Trust and Check (T&C) trader status. This offers advantages such as less frequent checks and the option to declare goods retrospectively. The T&C trader will have a higher status than the Authorised Economic Operator (AEO), but will also face stricter requirements. Although the AEO status will continue to exist, some of its advantages will disappear. The criteria for T&C status build on those of the AEO, with the main requirement being that the company provides customs authorities with real-time access to its electronic systems. This includes customs administration, accounting systems, and trade and transport administration.

Customs representation will continue to be possible under the UCC reform, both in the form of direct and indirect representation. However, to benefit from the advantages of T&C status, both the importer and the customs representative must have this status. If the importer does not have T&C status, the representative can only use indirect representation to benefit from customs simplifications. Those who wish to continue offering direct representation can only do so by not using the T&C status.

This can be disadvantageous for customs representatives. Whilst large companies usually handle their customs affairs themselves, SMEs rely on external representatives. Moreover, it is questionable whether companies are prepared to give customs authorities in the Member States real-time access to their administration and to send them the required data. Additionally, how will the various customs services guarantee the privacy of this data? Companies often find it quite difficult to meet the AEO requirements, let alone be able or willing to meet the even stricter requirements of T&C. Currently, they often rely on their representatives for this.

Therefore, when importers cannot obtain T&C status, customs representatives can only offer their customers T&C benefits through indirect representation. In these cases, the representatives assume full responsibility, including payment of customs debts and compliance with other customs-enforced regulations. This conflicts with representatives' desire to reduce their risks. Under the UCC reform, they must choose between not offering simplifications or bearing full responsibility. This choice puts considerable pressure on customs brokers' operations, which could have a significant impact on the companies relying on their services.

Source: This article was original published in the Globe magazine of the evofenedex business association