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László Kovács

European Commissioner in charge of Taxation and Customs Union

Customs Co-operation – Facilitating trade and Promoting security in an enlarged union

Seminar of the Hungarian Customs and Finance Guard
Budapest, 25 January 2005

As Commissioner responsible for Taxation and Customs Union, I am happy to introduce to you my priorities for the next five years and my expectations in terms of co-operation with you, the customs authorities of Hungary. I know that taxation is an important area, but today I will focus on my priorities for Customs, where challenges are also high.

Before that, I would like to say a few words on enlargement and the work done by Customs. 1 May 2004 was an historic day and customs have played their role. There are more than 150 000 customs officials working in the European Union to protect the security and prosperity of more than 450 million people. Every country in the EU and in particular every customs service has to play its part and I believe Hungary and its partners have done this with credit.

Customs policy is extremely important, with clear implications for the daily operation of business and for the daily life of citizens. I think that more could be done to improve the role of Customs, particularly when it comes to the protection of the Internal Market, the citizens, the facilitation of business and the promotion of the competitiveness of Europe. This will need to occur by maximising the use of limited resources.

I see two main goals at this stage: the facilitation of trade and the promotion of security. Whereas these two goals seem contradicting each other, they can be reconciled by building on the aspects where they can be mutually supportive.

Modernising the Customs Code and introducing E-Customs :

Modernising the Community Customs Code by simplifying and harmonising customs rules and procedures across the European Community, and implementing E-Customs will serve both objectives and will be my first priority.

On the one hand, the new Customs Code shall facilitate a common application of the legislation by the customs authorities of the 25 Member States, by simplifying legislation and modernising procedures with the systematic use of information technology. On the other hand, the new Code will introduce for the first time a legal basis for a Community risk management system, which is essential for customs to work in a consistent manner around the Community.

I am pleased to say that we will begin this work in earnest with a seminar to be held in Budapest on 10 and 11 March.

Ensuring the final implementation of the new computerised transit systems and speeding work on supply chain security will also support the goal of trade facilitation and security promotion.

Fight against counterfeiting

Counterfeiting represents 5 to 7% of world trade and has implications on the competitiveness of EU companies, on jobs and on the health and security of our citizens. Customs have a vital role to play as they intercept some 70% of all the counterfeited products seized worldwide. I am pleased to see from Hungary’s customs seizures that you are getting some good results.

A successful action depends very much on collective efforts and work with other law enforcement bodies and with the private sector is essential. Moreover, cooperation with the countries of origin of counterfeited goods will also be important in this context.

Combating fraud

My third priority is to combat fraud, in particular to the Community financial interests, to protect our common budget. Possible initiatives include targeting fraud in origin to obtain unjustified customs duties reductions, by :

  • reviewing preferential rules of origin, including related customs procedures;
  • monitoring the trade with beneficiary countries to detect and prevent irregularities.

Improving security

The security and safety of European citizens are increasingly at risk due to the globalisation of criminality and to the threat of terrorism. The Community Customs Code is being revised to enhance security controls of goods crossing EU borders. Customs can play an invaluable role in the fight against cross-border crime and terrorism, including through enhanced cooperation with other law enforcement authorities in the Member States such as police forces and border guards, with European bodies such as Europol, and with the private sector.

Customs expertise in controlling goods, backed up by the use of modern IT systems and an efficient risk assessment and border control management, is vital to detect illegal goods such as drugs, explosive materials or nuclear and chemical weapons. Our new Risk information exchange system will be operational during 2005 and should enable customs at all parts of the Community to exchange risk information.

It is particularly important for the Community that countries like Hungary with important external land borders, not to mention international airports and waterways, continue to do their share of controls.

This being said, we have not forgotten customs big partner, that is legitimate business. The introduction of a special approval for Authorised Economic Operators will provide benefits to those investing in security and customs compliance.

International co-operation :

Customs cooperation with third countries, in particular with our neighbours, is important for achieving our two goals of facilitating trade and improving security. In Hungary we know this perhaps as well as anyone, and one aim for this region would be to improve traffic flows and security at the Eastern frontier. We are presently examining Hungary's request for specific EU support for customs and infrastructure improvements on the Ukrainian side of our joint border, so I do not need to tell you the importance of our relations with the Ukraine in this respect.

Promoting the use of European customs rules, procedures and good practises by countries such as Ukraine or Belarus, or cooperating on the prevention of cross-border problems such as organised crime with the Balkans are examples of initiatives which could certainly help creating a broader favourable environment for companies’ competitiveness and citizens’ security. A cross-cutting issue such as fighting corruption is also a recurring theme in our relations with future Member States and other neighbouring countries.

On the broader international scene, international customs co-operation can help to prevent crime and foster trade and we should take full advantage of this possibility. We must therefore strengthen our existing customs co-operation with countries such as the United States and China and at the same time move ahead with new co-operation arrangements with partners such as India and Japan.

Conclusion :

Putting together all these measures shows me two things : firstly, the importance of customs in the coming years, and particularly those such as the Hungarian Customs and Finance Guard with responsibilities at the Community’s important eastern border. Secondly, that we will have no shortage of work to do.

It is therefore important to strengthen our customs infrastructure, by modernising them and increasing cooperation between European customs authorities.

In the meantime, I am willing to closely cooperate with you because support and investment from national customs authorities will be essential for the success of this challenging task. I am sure that I can count on the support of the Hungarian Customs and Finance Guard.

Tomorrow (26th January) is World Customs day, so let me close by wishing you good luck in any activities you have planned for tomorrow and in your future work.

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