General Legal Proceedings in Customs and Foreign Trade

You will be confronted with endless provisions when dealing with customs and foreign trade. It’s not easy to keep up and then with all of the changes and amendments to the provisions, it can be overwhelming.

European customs laws are based on international law, such as parameters set by the World Trade Organization (WTO) or the treaty closed within the World Customs Organization (WCO). The latter mentioned has increasing impact on EU law.

Since May 1, 2016, the Union Customs Codex (UCC) is used for the entire EU as is the corresponding implemented act (delegated act to the UCC, UCC-DA and the implemented act to the UCC, UCC-IA). The customs laws are fully harmonized within the EU. That means that the EU parliament and council laws are mostly in the form of regulations, adopted in form by customs law and binding in all member countries.

As opposed to many other regulations, these regulations concerning customs law do not need to be first reinterpreted according the legal standards of various member countries. This is especially advantageous when changes are implemented: As these changes must be immediately implemented in all member countries as soon as the the EU publishes such changes in the Official Journal.

Prior to the introduction of the UCC on May 1, 2016, the Customs Codex (CC) was used, which was specifically accompanied by the Customs Codex-Implementation Requirements. Many references, especially those regarding legal statements and comments, come from the older laws found in the Customs Codex.

There are still many national requirements Supplementary to the European law, such as the Customs Administration Law (ZollVG) and Customs Administration (ZollV), which originate from the time prior to the use of UCC and even from before the use of the CC from back in 1992. The legal hierarchy is clear that the EU laws have authority over national requirements, so that national law is void if conflicting with EU law. Customs law has clear non-legal hierarchal legal structures as opposed to other areas such as VAT law. Additionally the AWG (Foreign Trade and Payments Act)  and the AWV (Foreign Trade and Payments Ordinance) play an important role in national regulations and procedures for export. The AWG and AWV define the specific requirements for export for dual-use goods and for general export controlling. Since these are national requirements, they are only applicable within Germany.

VAT law plays in important role here as well, since the levied customs duties is always the precursor to import taxes. VAT law is defined based on the national requirements of each member state respectively according to the Directive on the VAT System (MwStSystRl).

The VAT directives contain both mandatory as well as optional requirements. Some rules will soon have to be transferred to national law; others only have authority in those member countries accordingly required by the VAT directives. On the one hand, this makes the VAT a functioning system, i.e. in deliveries within the union, but on the other hand it leads to completely different legal implications depending on the member country.

An example of this is the fiscal representation as an optional requirement in such countries as Germany, the Netherlands, Austria, Poland and Slovenia, in other EU countries there are no procedures in place for fiscal representation in the respective national VAT law.