Every day, more than 12 million packages enter the European Union – making it increasingly difficult for customs officers to check for illegal or undeclared goods or assess duties.
Many of those packages are small fry – in 2024, around 4.6 billion packages with a declared value of less than 22 Euro ($25.6) entered the EU. The Commission reported in August that only 0.0082% of all imported products were checked by customs authorities.
According to the EU court of auditors, customs checks in some member states are not rigorous enough and the uneven application of rules across the bloc makes fraud easy.
Customs Reform: What’s the plan?
Back in 2023, the European Commission presented proposals for a comprehensive reform with the aim to reduce bureaucracy and respond to challenges such as the steep rise in e-commerce.
A central point in the EU’s reform plans is how to manage this enormous flood of packages and parcels that enter the bloc from third countries, in particular China.
The EU also plans to abolish the current 150-Euro duty free limit on packages to ensure a level playing field for companies by 2028 – until then the temporary measures are to remain in force. In mid-December, the Member States also supported the introduction of a general 3-Euro-duty on low value parcels, effective from July 2026. This is also a temporary measure.
In a nutshell, the reform aims to modernize customs procedures, strengthen cooperation between member states’ customs authorities and improve checks on imports and exports. Furthermore, it promises improved collection of duties and taxes and better protection of the internal market.
To this end, there is to be a new EU Customs Data Hub which is to be overseen by the – still to be established – EU Customs Authority (EUCA).
The EUCA is intended to serve as a central hub to support national customs agencies. Once implemented, it will streamline customs procedures, improve the safety of online purchases for EU citizens, and provide national authorities with simpler, more uniform tools.
With this reform in place, a number of benefits should be realized – such as simplified reporting requirements via one single interface – which dovetails with Commission President Ursula von der Leyen’s promises to cut red tape. The EU also envisages savings of up to 2 billion Euro a year as the hub will replace customs IT infrastructure in member states.
EU Customs Authority
The EU Customs Authority is to be established from 2026, with the European Commission responsible for its launch: First access by companies to the Data Hub is scheduled by 2028, voluntary use of all businesses by 2032 and use becoming obligatory by 2038.
The first key decision will be its location. Nine member states have thrown their hats in the ring. The competitors are Belgium (Liège), Croatia (Zagreb), France (Lille), Italy (Rome), the Netherlands (The Hague), Poland (Warsaw), Portugal (Porto), Romania (Bucharest), and Spain (Málaga).
The EU executive will now assess the nine applications, seeking to ensure that the location will enable the authority to carry out its tasks and powers, recruit highly qualified and specialized staff, and offer training opportunities.
A decision is expected around February and will be made together with the member states and the EU Parliament.
The host country must offer immediately available buildings, advanced IT and security infrastructure, space for at least 250 employees, high-tech meeting rooms, and a “secure area” for the management of confidential information, among many other criteria.
Protecting EU markets
“Safer trade means a safer Europe,” said Polish Finance Minister Andrzej Domanski, explaining that a “strong and resilient” customs union guarantees the protection of the internal market, consumer safety and stable economic development.
But how to go about those joint trade and customs policies is still a bone of contention.
The customs reform is timely, as European capitals look to protect key strategic sectors against stiffening international trade headwinds.
Calls are growing in some parts for a “Made in Europe” scheme that would favor home-grown products. This position is being promoted especially by France.
The commission originally planned to publish a related EU initiative this month, but met with resistance from the Czechs, Slovaks, Irish, Swedes and Latvians and others.
The proposal has now been postponed until early next year, according to the Financial Times daily.
