Customs Violations and Penalties in Europe: Harmonization on the Horizon?

Abstract

Customs legislation is made exclusively at the EU level, while its enforcement is exclusively a function of the Member States. Despite differences in law enforcement structures, all EU Member States have the same responsibility to enforce EU legislation. Differences may therefore arise in the treatment of customs offences and their penalties at the Member State level, which may generate extra costs for companies operating in more than one Member State. In addition, it is not only the risk of financial loss, but there is also the risk that of a loss of good standing with customs (such as status as Authorized Economic Operator (AEO), for example), resulting in imports being subject to closer scrutiny and a correspondingly slower clearance process, thus increasing the cost of doing business. At the same time, Member States are seeing less revenue from imports as a result of the downturn and may seek other ways to generate new revenue. Hence, enforcement authorities may focus on finding noncompliance with customs regulations and assess additional duties and taxes. In both cases, compliance issues are growing more important than ever. It is therefore appropriate to consider recent developments such as the modernization of customs legislation, the introduction of electronic customs, and the Lisbon Treaty to address the need to harmonize customs penalties regimes. This requires an analysis of the question of customs penalties, briefly referring to previous attempts of harmonization, taking into account the new institutional and legislative context, and finally reflecting on possibilities for action under the Lisbon Treaty to achieve the approximation of the European customs penalties regime.