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EU-China Customs Cooperation: An ambitious path forward

European Commission - SPEECH/14/386   16/05/2014

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European Commission

[Check Against Delivery]

Algirdas Šemeta

Commissioner responsible for Taxation and Customs Union, Statistics, Audit and Anti-fraud

EU-China Customs Cooperation: An ambitious path forward

Joint Customs Cooperation Committee (JCCC)

Beijing, 13 May 2014

Minister Yu, Vice-Minister Sun, Ladies and Gentlemen,

Let me first express my gratitude for the hospitality we have received on the occasion of this visit. It is a great pleasure to be here again. This will be the last time I attend the meeting of the Joint Customs Cooperation Committee with China as European Commissioner responsible for Customs. Our cooperation has been excellent.

We are today firmly on a positive path forward. Looking back, we have made significant progress. We have achieved a lot in developing our cooperation since the signature of the Customs Cooperation and Mutual Administrative Assistance Agreement in 2004.

We have progressed step by step. We started by establishing a process of administrative assistance. Next we developed the joint pilot project on supply chain security. Then we formulated the joint Action Plan on IPR enforcement.

This was followed by the establishment of a strategic framework for enhancing EU-China customs cooperation to promote legitimate trade. We were guided by the mutually recognised need to have such a policy framework, with agreed priorities. We wanted to increase coordination and provide momentum to our increasing scope of cooperation activities.

Today, we are launching the next steps. This meeting marks the adoption of a new Strategic Framework. Four years ago, I signed the previous Framework with Minister Sheng. We were confident that it would have a substantial positive impact on our cooperation. Now we can say that our expectation was fulfilled.

While the first Strategic Framework can be deemed a success, further progress can be made. Let me briefly outline how I view the further development of our cooperation in the context of this new Framework that we adopt today.

The protection of Intellectual Property Rights is a top priority both for the EU and for China. In order to remain competitive, our economies need to rely on more innovation, supported by stronger IPR enforcement.

Customs remains a key actor for the proper enforcement of IPR. In the last years we have achieved significant progress on IPR enforcement.

Mainly through the implementation of the first two phases of the EU-China IPR Action Plan. The next, third phase is starting with the signing of the new Action Plan.

It will be a decisive step forward for the sake of the EU-China trade. This requires, inter alia, the active and responsive commitment from both sides.

The new Action Plan refers to the smooth exchange of information between EU and Chinese ports under Key Action 2. On the EU side, the Key Action 2 network has now been extended to 18 points of entry. The extension of the network reflects the high level of expectations, and the willingness of the EU and its Member States to push further our cooperation. It also addresses China Customs’ suggestion to include a larger number of relevant ports in the network.

In the last years, the EU has seen important internal reforms on IPR enforcement, including a new regulation. It enhances EU customs enforcement in many ways.

We should share our respective experiences in the field of IPR enforcement, including on drafting of new legislation. This sharing of experiences should support each other's policies.

We should also share experiences relating to the strengthening of the cooperation with other law enforcement agencies.

Our stakeholders tell us that this area is still underdeveloped. Customs authorities are doing a good job in detaining counterfeit and pirated goods at the borders. But it is necessary to look beyond customs detentions, towards investigations and actions that cut off production and roll up distribution networks.

We would very much welcome new, meaningful activities in this area. It would enable us to assess whether new initiatives should be taken on this subject.

The partnership with the industry is another key objective of our Action Plan. The EU is satisfied with our activities in this area so far. Different meetings with industry representatives have been organised in the context of the Action Plan. We now need to ensure that the conclusions from those different customs-industry sessions will be put into concrete follow-up actions by customs in the EU and in China.

Of course, all those activities stemming from the implementation of the new Action Plan should be supported and facilitated by a clear and regular communication line between us. Communication between our experts should not be limited to the moment to which key action activities are organised. It should be made easier and more regular.

Whatever resources or time constraints we are faced with, it is crucial to continue to look for solutions to present and future challenges.

Another, most important milestone today, is the adoption by the JCCC of the Decision on the mutual recognition of our respective Authorised Economic Operator programmes. Mutual recognition will play a pivotal role in enhancing end-to-end supply chain security. At the same time, it will facilitate trade for trusted traders who have invested in compliance and security protocols. Mutual recognition creates an additional benefit for trusted traders in both regions. It also creates incentive for more businesses to sign up.

Of course, supply chain security, hand in hand with trade facilitation, is a key pillar of our cooperation. The EU welcomes the progress of the Smart and Secure Trade Lanes (SSTL) project. The pilot project tests specific safety and security related recommendations of the WCO SAFE Framework of Standards (FoS). It is also identified as a suitable proof-of-concept pilot project for WCO Globally Networked Customs (GNC) and the further elaboration of the GNC Control Mutual Recognition Utility Block.

It is thus becoming a global standard for end-to-end supply chain security related information exchange.

The next steps, a more robust IT tool and extension to more complex trade lanes and new transport modes, are ambitious. But they are necessary, considering today's global trade patterns.

The EU is pleased with the commitment that China customs is showing to this project. This will bring concrete results in facilitating and securing the supply chain. It will also contribute to our joint efforts in IPR enforcement and in controlling potentially hazardous traffic such as waste.

Indeed, our customs cooperation is again being extended to new areas, such as illicit movements of waste. Much progress has been achieved in a short time in this area. Allowing now for its inclusion in the new Strategic Framework. This is a very good example of the results that our cooperation can achieve at its best. It can serve as a good example for our work in other areas. Such as the enforcement of intellectual property rights.

We should also not forget that our cooperation takes place in an evolving international environment. I had the privilege to participate in the WTO Ministerial in Bali last December, which resulted in the Agreement on Trade Facilitation. The ATF is not only about new rules: we agreed on proactive action to make trade flows between us simpler, faster and cheaper. The ATF means less ‘red tape’ at the border and lower costs for traders. It means more transparency and greater certainty. As major global trading powers, the EU and China need to ensure that the formal adoption in June 2014 is quickly followed by early ratification by a majority of Members. Our expectation is that China, like the EU, decides to class all of its commitments under category A, for immediate implementation.

In the context of our mutual interest in trade facilitation, we must engage more proactively in reviewing how we fare in practice. We must address the difficulties encountered by economic operators.

The Commission appreciates the intensive and fruitful co-operation with China on combatting fraud and irregularities, based on the EU-China Agreement on cooperation and mutual administrative assistance in customs matters.

We appreciate the preparatory work and discussions of the 3rd meeting of the Anti-fraud Working Group on 13 February in Beijing. A detailed report of the meeting was already agreed at technical level. The Commission would welcome the formal adoption of the meeting report in the framework of today's JCCC meeting.

The Commission also highly appreciated the participation of China Customs in the JCO REPLICA and JCO SNAKE. We are reassured that these common projects will lead to successful results. In this respect, the Commission is looking forward to strengthening the cooperation with China in the fight against the illicit trade in tobacco products, possibly including a JCO.

We very much welcome the regular exchange of customs information between China and the EU. However, we have seen that the quality of co-operation and assistance could be improved and the exchange of information accelerated. Some requests on both sides apparently remain unanswered.

Let us continue to work together to improve these exchanges and ensure swift and efficient ways of communication. The Commission is looking forward to further enhancing the good cooperation between China and the EU, particularly regarding customs investigations.

OLAF Director General will visit Beijing in June this year, which could provide the basis to discuss concrete steps.

With regard to the closure of the EU liaison office in May 2012, let me reassure you that the Commission is currently working on securing the resources for re-opening the office in Beijing.

Finally, we are strongly committed to statistical cooperation between GACC and the EU Statistical Office. We have a mutual interest in basing policy decision-making on reliable, accurate and timely statistics. Hence we look forward to the identification of the reasons for the data discrepancies on both side and possible solutions.

Minister, vice-minister, ladies and gentlemen. I am very optimistic about the future of EU-China customs cooperation. We are set on an ambitious path forward. Our joint efforts will allow us to achieve significant further progress in the years to come. For the benefit of our mutual trade, our people and our economies. Thank you.


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