compliance e AEO

CBAM, sanctions and AEO

CBAM transitional registry

The regulation draft C(2023) 5512 final “…laying down the rules for the application of Regulation (EU) 2023/956 of the European Parliament and of the Council as regards reporting obligations for the purposes of the carbon border adjustment mechanism during the transitional period…” provides with the regulations for sanctions related to CBAM transitional register regulation.

In particular, it lays down that “member States shall apply penalties in the following cases:

(a) where the reporting declarant has not taken the necessary steps to comply with the obligation to submit a CBAM report, or

(b) where the CBAM report is incorrect or incomplete in accordance with Article 13, and the reporting declarant has not taken the necessary steps to correct the CBAM report where the competent authority initiated the correction procedure…”.

In particular, according this article “…The amount of the penalty shall be between EUR 10 and EUR 50 per tonne of unreported emissions. The penalty shall increase in accordance with the European index of consumer prices…”.

According to the principle of the proportionality of sanctions, when determining the actual amount of a penalty, the competent authorities have to consider the following factors:

(a) the extent of unreported information;

(b) the unreported quantities of imported goods and the unreported emissions relating to those goods;

(c) the readiness of the reporting declarant to comply with requests for information or to correct the CBAM report;

(d) the intentional or negligent behaviour of the reporting declarant;

(e) the past behaviour of the reporting declarant as regards compliance with the reporting obligations;

(f) the level of cooperation of the reporting declarant to bring the infringement to an end;

(g) whether the reporting declarant has voluntarily taken measures to ensure that similar infringements cannot be committed in the future.

We think that these factors and rules can be fully fulfilled by adopting the AEO approach based on: a) monitoring sanctions; b) root-case analysis; c) risk assessment; d) high customs knowledge; e) internal data reporting.

In other words, CBAM:

  • Is a green customs policy which needs to be enforced by the economic operator by means of the AEO approach;
  • Requires, in case of sanctions, the full understanding of the subjective aspects of the economic operator; in this perspective, the AEO is the unique customs authorization which changes and gives the status of reliable economic operator.