European Union Customs Union

{{Short description|European Union common customs area}} {{EngvarB|date=August 2016}} {{Use dmy dates|date=August 2016}} {{Infobox Geopolitical organization | conventional_long_name = European Union Customs Union | image_map = EU Customs Union.svg | map_caption = <div style="text-align: left;">{{legend|#003399|EU member states}}{{legend|#a050ff|Non-EU states which participate in the customs union, or are in bilateral customs unions with the EU}}</div> | membership = {{collapsible list |titlestyle = text-align:left;font-weight:normal; |title = 27 EU member states |{{flaglist|Austria}} |{{flaglist|Belgium}} |{{flaglist|Bulgaria}} |{{flaglist|Croatia}} |{{flaglist|Cyprus}} |{{flaglist|Czech Republic}} |{{flaglist|Denmark}} |{{flaglist|Estonia}} |{{flaglist|Finland}} |{{flaglist|France}} |{{flaglist|Germany}} |{{flaglist|Greece}} |{{flaglist|Hungary}} |{{flaglist|Ireland}} |{{flaglist|Italy}} |{{flaglist|Latvia}} |{{flaglist|Lithuania}} |{{flaglist|Luxembourg}} |{{flaglist|Malta}} |{{flaglist|Netherlands}} |{{flaglist|Poland}} |{{flaglist|Portugal}} |{{flaglist|Romania}} |{{flaglist|Slovakia}} |{{flaglist|Slovenia}} |{{flaglist|Spain}} |{{flaglist|Sweden}} }} {{collapsible list |titlestyle = text-align:left;font-weight:normal;line-height:normal; |title = 5 states/territories with bilateral agreements |{{flaglist|Andorra}} |{{flaglist|Monaco}} |{{flaglist|San Marino}} |{{flaglist|Turkey}} |{{flaglist|Akrotiri and Dhekelia}} (United Kingdom) }} | org_type = Customs union | established = 1968<ref name="Europe Recast">{{cite book |last1=Dinan |first1=Desmond |title=Europe Recast: A History of European Union |date=2014 |publisher=Palgrave Macmillan |location=Basingstoke, New York |isbn=978-0-333-69352-0 |page=88 |edition=2nd}}</ref> | established_event1 = | established_date1 = | area_magnitude = | area_km2 = 4950000 | area_sq_mi = | percent_water = | population_estimate = {{decrease}} 518,000,000 | population_estimate_year = 2021 | population_density_km2 = | GDP_PPP = {{decrease}} $16.1 trillion | GDP_PPP_year = 2021 | GDP_PPP_per_capita = | GDP_nominal = {{decrease}} $16.6 trillion | GDP_nominal_year = 2021 | GDP_nominal_per_capita = | Gini_year = | Gini_change =  | Gini =  | Gini_ref = | Gini_rank = | HDI_year = | HDI_change =  | HDI =  | HDI_ref = | HDI_rank = | currency = | currency_code = | demonym = | area_rank = | today = }}

The '''European Union Customs Union''' ('''EUCU'''), formally known as the '''Community Customs Union''', is a customs union which consists of all the member states of the European Union (EU), Monaco, and the British Overseas Territory of Akrotiri and Dhekelia. Some detached territories of EU states do not participate in the customs union, usually as a result of their geographic separation.{{efn|For example, Büsingen am Hochrhein, an exclave of Germany within Switzerland.}} In addition to the EUCU, the EU is in customs unions with Andorra, San Marino and Turkey (with the exceptions of certain goods),{{efn|See European Union–Turkey Customs Union.}} through separate bilateral agreements.<ref name=CT&U>[http://ec.europa.eu/taxation_customs/customs/customs_duties/rules_origin/customs_unions/index_en.htm Customs unions, Taxation and Customs Union] {{Webarchive|url=https://web.archive.org/web/20160817170632/http://ec.europa.eu/taxation_customs/customs/customs_duties/rules_origin/customs_unions/index_en.htm |date=17 August 2016 }}, European Commission. Retrieved 20 August 2016.</ref>

There are no tariffs or non-tariff barriers to trade between the members of the customs union and—unlike a free trade area—members of the customs union impose a common external tariff on all goods entering the union.<ref>{{cite journal |last=Erskine |first=Daniel H |date=2006 |title=The United States-EC Dispute Over Customs Matters: Trade Facilitation, Customs Unions, and the Meaning of WTO Obligations |journal=Florida Journal of International Law |volume=18 |pages=432–485 |ssrn=987367 }}</ref>

The European Commission negotiates for and on behalf of the Union as a whole in international trade deals, rather than each member state negotiating individually. It also represents the Union in the World Trade Organization and any trade disputes mediated through it.

==Common external tariffs== {{main|Common Customs Tariff}} The EU Customs Union sets the tariff rates for imports to the EU from other countries. These rates are detailed and depend on the specific type of product imported, and can also vary by the time of year.<ref>[https://circabc.europa.eu/faces/jsp/extension/wai/navigation/container.jsp Taric and Quota Data & Information] {{Webarchive|url=https://web.archive.org/web/20190724094042/https://circabc.europa.eu/faces/jsp/extension/wai/navigation/container.jsp |date=24 July 2019 }} – European Commission Communication and Information Resource Centre for Administrations, Businesses and Citizens.</ref> The full WTO Most Favoured Nation tariff rates apply only to those countries that do not have a Free Trade Agreement with the EU, or are not on a WTO recognised exemption scheme such as Everything but Arms (an EU support arrangement for Least Developed Countries).

==Union and common transit== Union transit, formerly called "Community transit", is a system generally applicable to the movement of non-Union goods for which customs duties and other charges due on import have not been paid, and of Union goods, which, between their point of departure and point of destination in the EU, have to pass through the territory of a third country.<ref name=ct />

The 'common' transit procedure is used for the movement of goods between the EU Member States, the EFTA countries (Iceland, Norway, Liechtenstein and Switzerland), Turkey (since 1 December 2012), North Macedonia (since 1 July 2015) and Serbia (since 1 February 2016). The operation of the common transit procedure with the UK is ensured as the UK has deposited its instrument of accession on 30 January 2019 with the Secretariat of the Council of the EU.<ref name=ct>European Union, [https://ec.europa.eu/taxation_customs/business/customs-procedures/what-is-customs-transit/common-union-transit_en Union and Common Transit] {{Webarchive|url=https://web.archive.org/web/20200809064401/https://ec.europa.eu/taxation_customs/business/customs-procedures/what-is-customs-transit/common-union-transit_en |date=9 August 2020 }}, accessed 24 December 2020 50px Text was copied from this source, which is available under a [https://creativecommons.org/licenses/by/4.0/ Creative Commons Attribution 4.0 International License] {{Webarchive|url=https://web.archive.org/web/20171016050101/https://creativecommons.org/licenses/by/4.0/ |date=16 October 2017 }}.</ref> The procedure is based on the Convention of 20 May 1987 on a common transit procedure. The rules are effectively identical to those of the Union transit.<ref name=ct />

Edward Kellett-Bowman MEP, as ''rapporteur'' for a European Parliament Committee of Inquiry, presented a report to the Parliament in February 1997 <ref>European Parliament, [http://www.europarl.europa.eu/comparl/tempcom/transit/kelletta/default_en.htm Report on the Community Transit System] {{Webarchive|url=https://web.archive.org/web/20220119134559/https://www.europarl.europa.eu/comparl/tempcom/transit/kelletta/default_en.htm |date=19 January 2022 }}, 20 February 1997, accessed 31 January 2017</ref> which identified the removal of border controls and a lack of co-operation by member states as being responsible for a rise in organised crime and smuggling.<ref name="Organised crime">Neil Buckley, "Cross-border crime loses EU billions: Inquiry blames Brussels and customs for failing to clamp down on smuggling", ''Financial Times'', 21 February 1997, p. 2.</ref> Kellett-Bowman's report led to the European Union setting up a customs investigation body and computerising transit-monitoring systems.<ref name="Transit crime">Neil Buckley, "EU plans single body against smuggling", ''Financial Times'', 13 March 1997, p. 2.</ref>

==Modernised Customs Code== The Modernised Customs Code (MCC) was adopted under Regulation (EC) No 450/2008 of the European Parliament and of the Council of 23 April 2008 laying down the '''Community Customs Code''' (Modernised Customs Code).<ref>OJ L 145, published 4 June 2008</ref> The MCC was primarily adopted to enable IT customs and trade solutions to be adopted.<ref name=delo>Deloitte Netherlands, "[https://www2.deloitte.com/content/dam/Deloitte/nl/Documents/tax/deloitte-nl-tax-in-2016-the-european-union-will-have-a-new-customs-code.pdf In 2016 the European Union will have a new Customs Code. But what’s new?]", published 17 December 2014, accessed 11 December 2023.</ref>

==Union Customs Code== The Union Customs Code (UCC), intended to further modernise customs procedures, entered into force on 1 May 2016. This superseded the MCC.<ref name=delo /> The European Commission has stated that the aims of the UCC are simplicity, service and speed.<ref>{{cite web |url=http://ec.europa.eu/taxation_customs/customs/customs_code/union_customs_code/ucc/index_en.htm |title=Union Customs Code |website=Taxation and customs union – European Commission |access-date=25 May 2016 |archive-date=17 August 2016 |archive-url=https://web.archive.org/web/20160817170628/http://ec.europa.eu/taxation_customs/customs/customs_code/union_customs_code/ucc/index_en.htm |url-status=live }}</ref> Implementation took place over a period of time and most aspects of implementation were complete by 31 December 2020, although some formalities managed by electronic systems may not be fully implemented until 31 December 2025.<ref>European Commission, "[https://ec.europa.eu/taxation_customs/business/union-customs-code/ucc-introduction_en The Union Customs Code (UCC) – Introduction]". {{Webarchive|url=https://web.archive.org/web/20190531133020/https://ec.europa.eu/taxation_customs/business/union-customs-code/ucc-introduction_en |date=31 May 2019 }}, accessed 29 March 2023.</ref>

One major goal of the UCC is to progress towards the complete use of electronic systems for interactions between businesses and customs authorities, and between customs authorities, bringing all paper-based customs processes to an end.<ref>European Commission, "[https://taxation-customs.ec.europa.eu/system/files/2018-03/amendment_ucc_20180302_en.pdf Proposal for a Regulation of the European Parliament and of the Council amending Regulation (EU) No 952/2013 to prolong the transitional use of means other than the electronic data-processing techniques provided for in the Union Customs Code]", COM(2018) 85 final, published 2 March 2018, accessed 29 March 2023. {{Webarchive|url=https://web.archive.org/web/20230605010004/https://taxation-customs.ec.europa.eu/system/files/2018-03/amendment_ucc_20180302_en.pdf |date=5 June 2023 }}.</ref>

== Customs reform == In 2023, the European Commission proposed the most comprehensive customs reform since the Customs Union's establishment in 1968.<ref>{{Cite web |title=EU Customs Reform - Taxation and Customs Union - European Commission |url=https://taxation-customs.ec.europa.eu/customs/eu-customs-reform_en |access-date=2026-03-10 |website=taxation-customs.ec.europa.eu |language=en}}</ref> Under the customs reform, the EU decided in 2025 to eliminate the €150 customs-free threshold and added a €3 customs duty for such small parcels. Furthermore, the EU plans to establish an agency for customs, the European Union Customs Authority.<ref>{{Cite web |title=EU introduces customs duties on low-value e-commerce packages |url=https://ec.europa.eu/commission/presscorner/detail/en/https:////ec.europa.eu//commission//presscorner//detail//en//ip_25_3045 |access-date=2026-03-10 |website=European Commission - European Commission}}</ref><ref>{{Cite web |title=Modernising the EU customs union |url=https://www.consilium.europa.eu/en/policies/modernising-the-eu-customs-union/ |access-date=2026-03-10 |website=Consilium |language=en}}</ref><ref>{{Cite web |title=Council gives final green light to new customs duty rules for small parcels |url=https://www.consilium.europa.eu/en/press/press-releases/2026/02/11/council-gives-final-green-light-to-new-customs-duty-rules-for-small-parcels/ |access-date=2026-03-10 |website=Consilium |language=en}}</ref>

==Non-EU participants== Monaco and the British Overseas Territory of Akrotiri and Dhekelia are integral parts of the EU's customs territory.<ref name=CT&U /><ref name=sba2019>[https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX%3A12019W%2FTXT%2802%29#d1e32-136-1 Protocol relating to the Sovereign Base Areas of the United Kingdom of Great Britain and Northern Ireland in Cyprus] {{Webarchive|url=https://web.archive.org/web/20211011004430/https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX%3A12019W%2FTXT%2802%29#d1e32-136-1 |date=11 October 2021 }}, Agreement on the withdrawal of the United Kingdom of Great Britain and Northern Ireland from the European Union and the European Atomic Energy Community, EUR-Lex, 12 November 2019.</ref>

{| class="wikitable" |- ! State / territory ! Agreement ! Entry into force |- | {{flagdeco|Monaco}} Monaco | Franco-Monegasque Customs Convention<ref>{{cite web |url=http://ec.europa.eu/taxation_customs/common/faq/faq_1178_en.htm |title=Taxation and Customs – FAQ |publisher=European Commission |access-date=12 September 2012 |url-status=dead |archive-url=https://web.archive.org/web/20120608000239/http://ec.europa.eu/taxation_customs/common/faq/faq_1178_en.htm |archive-date=8 June 2012 |df=dmy-all}}</ref><ref>{{cite journal |url=http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:1992:302:0001:0050:EN:PDF |title=Council Regulation (EEC) No 2913/92 of 12 October 1992 establishing the Community Customs Code |journal=Official Journal of the European Union |date=19 October 1992 |access-date=12 September 2012 |archive-date=29 July 2017 |archive-url=https://web.archive.org/web/20170729113232/http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:1992:302:0001:0050:EN:PDF |url-status=live }}</ref><ref name="Agreementsinplace">{{cite web|last=|first=|date=|title=Monaco and the European Union|url=https://en.gouv.mc/Policy-Practice/Monaco-Worldwide/Monaco-and-the-European-Union|archive-url=https://web.archive.org/web/20210120213751/https://en.gouv.mc/Policy-Practice/Monaco-Worldwide/Monaco-and-the-European-Union|archive-date=20 January 2021|access-date=31 January 2021|website=|publisher=Gouvernement Princier|quote=|url-status=live}}</ref> | 1968 |- | {{flag|Akrotiri and Dhekelia}} (United Kingdom) || Treaty of Accession 2003<ref>[https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX%3A12003T%2FPRO%2F03 Protocol No. 3 on the Sovereign Base Areas of the United Kingdom of Great Britain and Northern Ireland in Cyprus] {{Webarchive|url=https://web.archive.org/web/20201113052319/https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX%3A12003T%2FPRO%2F03 |date=13 November 2020 }}, Act concerning the conditions of accession of the Czech Republic, the Republic of Estonia, the Republic of Cyprus, the Republic of Latvia, the Republic of Lithuania, the Republic of Hungary, the Republic of Malta, the Republic of Poland, the Republic of Slovenia and the Slovak Republic and the adjustments to the Treaties on which the European Union is founded, EUR-Lex, 23 September 2003.</ref><br />Brexit withdrawal agreement<ref name=sba2019/> || 1 May 2004 |}

==EU territories with opt-outs== {{Supranational European Bodies|size=400px|align=right}} While all EU member states are part of the customs union, not all of their respective territories participate. Territories of member states which have remained outside of the EU (overseas territories of the European Union) generally do not participate in the customs union.<ref name=territories>[https://ec.europa.eu/taxation_customs/business/vat/eu-vat-rules-topic/territorial-status-eu-countries-certain-territories_en Territorial status of EU countries and certain territories] {{Webarchive|url=https://web.archive.org/web/20210703170944/https://ec.europa.eu/taxation_customs/business/vat/eu-vat-rules-topic/territorial-status-eu-countries-certain-territories_en |date=3 July 2021 }}{{snd}} European Commission, retrieved 18 December 2018</ref>

However, some territories within the EU do ''not'' participate in the customs union for tax and/or geographical reasons: * Büsingen am Hochrhein (German exclave within Switzerland, part of the Swiss Customs Area)<ref name="Directive 2006/112/EC">Article 6 of [http://eur-lex.europa.eu/legal-content/EN/ALL/?uri=celex%3A32006L0112 Council Directive 2006/112/EC] {{Webarchive|url=https://web.archive.org/web/20190629071431/http://eur-lex.europa.eu/legal-content/EN/ALL/?uri=celex%3A32006L0112 |date=29 June 2019 }}, 28 November 2006</ref><ref name="952/2013">{{cite web |url=https://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:32013R0952&rid=1 |title=REGULATION (EU) No 952/2013 OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL of 9 October 2013 laying down the Union Customs Code, Article 4 |page=11 |format=PDF |publisher=EURLEX |date=October 2013 |access-date=2018-12-17 |archive-date=14 August 2019 |archive-url=https://web.archive.org/web/20190814205125/https://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:32013R0952&rid=1 |url-status=live }}</ref> * Heligoland (small German archipelago in the North Sea with VAT free status)<ref name="Directive 2006/112/EC" /><ref name=territories /> * Livigno (remote Alpine town in Italy with VAT free status)<ref name="Directive 2006/112/EC" /><ref name="952/2013" /> * Ceuta and Melilla (Spanish territories in Africa with VAT free status).<ref name="Directive 2006/112/EC" /><ref name="952/2013" />

===Historical opt outs=== The following territories were excluded until the end of 2019: * Campione d'Italia (an exclave of Italy surrounded by Swiss territory) * the Italian waters of Lake Lugano

==Bilateral customs unions== Andorra, San Marino and Turkey are each in a customs union with the EU.<ref name=CT&U />

{| class="wikitable" |- ! State ! Agreement ! Entry into force ! Notes |- | {{nowrap|{{flagdeco|Andorra}} Andorra}} | Agreement in the form of an Exchange of Letters between the European Economic Community and the Principality of Andorra – Joint Declarations<ref>{{cite web |title=Andorra: Customs Unions and preferential arrangements |url=http://ec.europa.eu/taxation_customs/customs/customs_duties/rules_origin/customs_unions/article_412_en.htm |url-status=dead |archive-url=https://web.archive.org/web/20121026034312/http://ec.europa.eu/taxation_customs/customs/customs_duties/rules_origin/customs_unions/article_412_en.htm |archive-date=26 October 2012 |access-date=12 September 2012 |publisher=European Commission}}</ref> | 1 January 1991 | Excludes agricultural produce |- | {{nowrap|{{flagdeco|San Marino}} San Marino}} | Agreement on Cooperation and Customs Union between the European Economic Community and the Republic of San Marino<ref>{{cite web |url=http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2002:084:0043:0052:EN:PDF |title=Agreement on Cooperation and Customs Union between the European Economic Community and the Republic of San Marino |access-date=15 July 2015 |archive-date=7 April 2013 |archive-url=https://web.archive.org/web/20130407210654/http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2002:084:0043:0052:EN:PDF |url-status=live }}</ref> | 1 April 2002 | |- | {{flagdeco|Turkey}} Turkey | Decision No 1/95 of the EC-Turkey Association Council of 22 December 1995 on implementing the final phase of the Customs Union<ref>{{cite web |url=http://www.avrupa.info.tr/fileadmin/Content/Downloads/PDF/Custom_Union_des_ENG.pdf |title=Decision No 1/95 of the EC-Turkey Association Council of 22 December 1995 on implementing the final phase of the Customs Union |archive-url=https://web.archive.org/web/20130319041259/http://www.avrupa.info.tr/fileadmin/Content/Downloads/PDF/Custom_Union_des_ENG.pdf |archive-date=19 March 2013 |url-status=live }}</ref> | 31 December 1995 | Excludes agricultural produce |- |}

==Special arrangements concerning territories of the United Kingdom== The United Kingdom of Great Britain and Northern Ireland left the European Union on 31 January 2020 and transition arrangements ended on 31 December 2020. Special arrangements have been made for those parts of the United Kingdom and its territories that share a land border with an EU member state.

===Northern Ireland=== {{further|Brexit and the Irish border}} The UK (including Northern Ireland) is no longer a member of the European Union Customs Union. However, there are special arrangements in place for Northern Ireland: its trade with Great Britain and its trade with the European Union are each now regulated by the Brexit withdrawal agreement (specifically the Northern Ireland Protocol and the Windsor Framework), the EU–UK Trade and Cooperation Agreement, the European Union (Future Relationship) Act 2020, the United Kingdom Internal Market Act 2020. These include special provisions for trade in goods between Northern Ireland and the EU which for many purposes are similar to those that apply within the Customs Union, although Northern Ireland remains part of United Kingdom Customs territory.

===Gibraltar=== {{Main|Effect of Brexit on Gibraltar}}

Gibraltar left the EU concurrently with the United Kingdom. When part of the EU, it was one of the EU territories with opt-outs and had not been part of the Customs Union. An agreement in principle has been reached between the EU, the United Kingdom, and Gibraltar to negotiate a treaty which would include provisions for trade on goods between the EU and Gibraltar.<ref>{{cite news |url=https://english.elpais.com/brexit/2021-01-11/deal-between-spain-and-uk-plans-to-eliminate-gibraltar-border-checkpoint.html |title=Deal between Spain and UK plans to eliminate Gibraltar border checkpoint |first1=Maria |last1=Martin |first2=Miguel |last2=González |work=El País |location=Madrid |date=11 January 2021 |access-date=29 January 2021 |archive-date=25 May 2023 |archive-url=https://web.archive.org/web/20230525210222/https://english.elpais.com/brexit/2021-01-11/deal-between-spain-and-uk-plans-to-eliminate-gibraltar-border-checkpoint.html |url-status=live }}</ref> These would be "substantially similar" to those within the Customs Union. {{as of|April 2024}}, the agreement has not yet been concluded.

===Akrotiri and Dhekelia=== As already noted above, the British Overseas Territory of Akrotiri and Dhekelia on the island of Cyprus are integral parts of the EU's customs territory (and remained so after Brexit).

==See also== * {{Annotated link |Community preference}} * {{Annotated link |European Union value added tax}} ** EU VAT area * {{Annotated link |European Customs Information Portal}} * European Economic Area (EU and EFTA except Switzerland) * European Free Trade Association (EFTA) * {{Annotated link |European integration}} * {{Annotated link |European Single Market}} * {{Annotated link |European Union–Turkey Customs Union}} * {{annotated link|Free trade agreements of the European Union}} * {{Annotated link |Free trade areas in Europe}} * {{Annotated link |Free-trade area}} * {{Annotated link |Market access}} * {{Annotated link |Non-tariff barriers to trade}} * {{Annotated link |Rules of origin}} * {{Annotated link |Tariff}}

==Explanatory footnotes== {{notelist}}

==References== {{reflist}}

==External links== * [http://ec.europa.eu/taxation_customs/dds2/taric/taric_consultation.jsp TARIC database enquiry system], gives current tariff rates applicable by exporting country and season{{snd}}European Commission: Communication and Information Resource Centre for Administrations, Businesses and Citizens. * [https://circabc.europa.eu/faces/jsp/extension/wai/navigation/container.jsp TARIC and Quota Data & Information]: user guides for the TARIC database above{{snd}}European Commission: Communication and Information Resource Centre for Administrations, Businesses and Citizens. * [https://www.ft.com/content/b4458652-f42d-11e6-8758-6876151821a6 "Turkey border gridlock hints at pain to come for Brexit Britain"]. ''Financial Times'', February 16, 2017

Category:European Union Customs Union Category:Customs treaties Category:European Union law Customs Category:Treaties of Andorra Category:Treaties of Monaco Category:Treaties of San Marino