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.
“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,” said Pietro Russo, the Member of the European Court of Auditors responsible for the report.