The Future Role of Customs

Abstract

Customs agencies have some powerful tools at their disposal to supervise the international movement of goods. These tools are designed for a specific purpose: verification of ‘the nature’ of the goods at the time of border crossing. More particularly, these tools facilitate, on the one hand, the determination of the fundamentals to calculate, levy and collect the right amount of taxes and duties, and on the other, determine whether the goods are allowed to be brought into the country and if yes, to check if they are subject to any restrictions. The limited research on the effectiveness of these tools shows that they are not easily applicable for situations they were not designed for. New EU regulations and the border-related enforcement they entail, however, put increasing demands on the role of customs agencies. This raises questions if Customs, with its current set of approaches, is fit for the future. In this paper, we look at three proposed regulatory developments in the EU (regulation on fluorinated gasses, the Carbon Border Adjustment Mechanism and the Regulation to Prohibit Products made with Forced Labour) to assess the role these envisage for Customs and the application of elements from the Customs enforcement toolbox. We find that the expected roles of Customs in our three cases are quite different, and that their reliance on the standard customs tools is rather minimal. Therefore, a thorough discussion is required regarding whether Customs should be involved in new enforcement activities that demand different, enhanced or new elements in the enforcement toolbox, or that maybe another authority, at another time and place in the supply chain, should become competent. In any case, for regulations that require enforcement based on information of the entire supply chain, customs agencies need to upgrade their competencies in their role as an enforcement agency at the border. These competencies revolve, at least, around cooperation with other competent authorities, as well as the integration of system-based and transaction-based supervision.