CUSTOMS LABORATORIES IN THE EUROPEAN EXCISE DUTY LANDSCAPE

June 23, 2022

Article by Athanassios Pantazis
Customs Practitioner (Greece)
Founding member of E.E.A.

HISTORY – REVIEW

From Rome (EEC 1957), to Maastricht on European Union (EC 1993) and later Lisbon (EU 2009), the administrations of member states, made several efforts, to adopt and implement a harmonized framework of indirect taxes, including excise duties and VAT.

The common ground for such taxes, was set with the implementation of certain council directives, but primarily with the introduction of Directive 2008/118/EC which became a dominant piece of legislation, the main pilar for the production, processing, holding, movement of excise duty products and forerunner of EMCS system.

Although excise duties appeared in Pan European level systematically and through different chronological phases, customs laboratories emerged as an auxiliary branch of customs authorities since the late 18th Century.
The dramatic increase of alcohol imports into Europe (for industrial use or human consumption), new alcohol taxes raised by certain European countries during 1880s and higher volumes of imported petrol, oils and asphalt, led to the creation of the first European customs laboratories, providing technical support and chemical analyses to local national customs agencies.

Typical examples of such customs laboratories with significant historical value are:

• The Italian customs laboratory (Laboratorio Chimico delle Gabelle) set in 1886.  

• The Spanish customs laboratory (Laboratorio central de analisis quimico) established in 1888.

In 1999, European customs laboratories became established as an EU group. While in 2014 it was named Customs Laboratories European Network (CLEN), in order to act as an advisory body of DG TAXUD.

​

ROLE & PRACTICE

The European customs laboratories, act as supporting mechanism for local customs authorities. With combined knowledge in several disciplines including testing, chemical analyses, customs legislation and modern industrial processing & manufacturing of goods, they provide their technical expertise for a diverse range of products.

According to statistical figures provided by CLEN (Customs Laboratories European Network), 32% of their total activity is dedicated to excise, energy, taxations and other taxes, while an additional 30% is allocated to customs tariff nomenclature.

Especially in the case and works related to excise duty products, produced, held, or processed within tax warehouses and moved within EU under suspension with e-ADs with the CN code of goods, the full TARIC classification becomes of essential importance, considering that the national per member state tariffs (co-efficients) of excise duties and VAT appear in the last four numbers of the 22 figured TARIC code.

Besides using the traditional sampling method and in order to expedite the testing process, customs laboratories may request from the trader, the declarant, or his customs representative to provide prior to examination, product specification files, labeling information, analyses and test results from accredited organizations and sources.

Although practices differ from one EU member state to another, some uniform tools, resources and databases are available across EU within CLEN.

• The Samancta sampling manual contains instructions and principles related to the procedure of obtaining samples with relevant standards.

• The EU Inter Laboratory Inventory of Analytical Determination (ILIADe) is a tool directory providing the methodology (in analytical form), that laboratories are required to use for customs purposes, but not only.

CONSIDERATIONS & REFLECTIONS

While EU member states retain only 25% of the collected import customs duties (third country imports), they retain 100% of the collected excise duties set in national level.

​

The correct classification and application of the appropriate excise duties becomes a motive to ensure diligent collection of amounts due.

​

Besides their contribution in national revenue collection and their impact in excise combat fraud, customs laboratories face successive challenges especially in the sector of alcoholic beverages.

The ready to drink or ready-made cocktail beverages have seen much product innovation and sales development in recent years. Such products share common characteristics both of fermented (2206 heading) and spirituous (2208 heading) alcoholic beverages. The classification of these products has become a difficult exercise for customs laboratories and authorities, due to the fact that the harmonized classification system and the relevant explanatory notes, cannot provide guidance and support on these cases, while the different level of excise duties and economic impact among the two headings 2206 & 2208 appear in all member states.

​

Are we going to see a larger volume of new “excisable” products being released and marketed in the future or will just be that excise duties and or local consumption taxes will be imposed in existing products as a result of geopolitical conditions and protectionism?

​

Could it be that it will go in both directions? Will just have to wait and see.

REFERENCES

1. José Rijo. Customs Law in the European Union.
1st edition, Alphen aan den Rijn, The Netherlands
Kluwer Law International BV, 2022 (p. 150-155)

2. WCO News, World Customs Organization, vol 77, June 2015
Focus on Customs Laboratories, available resources, assistance and networking possibilities (p. 29-33)
Link: http://www.wcoomd.org/-/media/wco/public/global/pdf/media/wco-news-magazines/wco_news_77_2.pdf

3. Ignacio Suay-Matallana Postdoctoral Fellow, Chemical Heritage Foundation, Philadelphia, United States
WCO News, World Customs Organization, vol 77, June 2015 (p.34-35)
Link: http://www.wcoomd.org/-/media/wco/public/global/pdf/media/wco-news-magazines/wco_news_77_2.pdf

4. Official website of Dogana Customs.
Customs controls – Customs Laboratory.
The European Network of Customs Laboratories (General overview).
Link: https://dogana.gov.al/english/d/185/264/0/186/the-european-network-of-customs-laboratories-general-overview

5. Official website of the European Union, European Commission, Taxation and Customs Union, European Customs Laboratories, Role of Customs Laboratories, the Customs Laboratories European network, History of Customs Laboratories, the European Customs Laboratories in figures.
Link: https://ec.europa.eu/taxation_customs/business/customs-controls/customs-laboratories_el

6. Official website of the State Laboratory.
An tSaotharlaan Stait, Ireland.
Link: https://www.statelab.ie/customs.html

7. Official website of the European Commission. Taxation and Customs Union, Samancta databases.
Link: https://ec.europa.eu/taxation_customs/dds2/SAMANCTA/EN/index_EN.htm

8. Official website of the European Union, Brussels, 22 December 2021.
The next generation of EU own resources: Questions and answers (Press corner).
Link: https://ec.europa.eu/commission/presscorner/detail/en/qanda_21_7026

9. Official Government Gazette, Issue (2), report 3256, 6 December 2012.
Ministerial Decree concerning procedures on the issuance of chemical analysis notes (p. 48655-48666).

10. Classification of alcoholic products in EU.
Dr. David Savage, Editorial board member.
Customs Compliance & Risk Management journal.
CCRM Journal for Practitioners in Europe, Issue 1, March 2020.