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New Customs Investigation Procedure Begins for Increased Surveillance of Imported Goods

As from September this year, traders are witness to the onset of a new investigation procedure conducted by both the EU (through its European Anti-Fraud Office, known as OLAF) and its Member States which is aimed at better tracking shipments and detecting customs fraud. To this end, amended customs legislation now allows investigators to access databases which record physical movements of containers transported on maritime vessels and gather information on any goods entering, transiting and leaving the EU.

These new tools are designed to therefore strengthen the analytical capabilities of national customs authorities and OLAF in tracing fraudulent operations related to any kind of consumer goods. These could range from sunglasses to clothes, and includes toys and agricultural products.

More specifically, Hong Kong traders should be aware that on 1 September 2016, new EU Regulation 2015/1525 on mutual assistance between the administrative authorities of the Member States and their cooperation with the Commission, to ensure the correct application of the law on customs and agricultural matters, began to apply EU-wide.

This new legislation amends the provisions enshrined in EU Regulation 515/97 related to the administration of a computerised “Customs Information System” (otherwise known as the CIS) in order to allow investigators to use electronic tools to combat customs fraud in the EU more effectively.

To this end, the Regulation has prompted the creation of new IT databases, namely the “Container Status Messages” directory and the “Import, Export and Transit” directory.

While the “Container Status Messages” directory will record physical movements of containers transported on maritime vessels through the collection of messages directly provided by maritime carriers, the “Import, Export and Transit” directory will contain data registered by Member States on any goods entering, transiting and leaving the EU, ranging from sunglasses to agricultural products, and other consumer goods that may be of relevance to Hong Kong suppliers.

Information relating to exports out of the EU will, however, be limited to sensitive products, such as tobacco, alcohol and fuels.

By combining the information from both databases, the Member States’ national customs authorities and the EU (through OLAF) should be able to better detect fraud patterns.

In other words, this new legislation aims at strengthening the analytical capabilities of competent national and European authorities by fostering mutual assistance and cooperation, given the transnational nature of customs offences, such as:

  • The misdeclaration of the origin of goods;
  • The under-valuation of goods; 
  • The misdescription of imported goods.

Moreover, it should be noted that the Regulation’s scope is not limited to preventative measures. It is, indeed, foreseen that any information stemming from the framework of this new procedure may constitute admissible evidence in the same way as if it had been obtained in the Member State where any administrative or judicial proceedings take place.

Finally, traders should be informed that several provisions related to data protection were adopted, notably to prevent unauthorised access to the “Container Status Messages” and the “Import, Export and Transit” directories, and to impose a maximum retention period for the data collected. Additionally, an obligation has been imposed on Member States to provide for penalties in case carriers fail to comply with the reporting of data or provide incomplete or false data.

Please click on the following to view EU Regulation 2015/1525 and EU Regulation 515/97.

Content provided by Picture: HKTDC Research
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