compliance e AEO

Italian customs reform: a short update

Maggio 6, 2024 /

The reform of the Italian customs system is proceeding  as indicated by the press release no. 75 of the Italian Goverment issued on 26 March 2024. The draft of decree that will abolish the TULD (Presidential Decree no. 43 of 1973 together with other legislative provisions dating back to the second half of the 19th century) will have to be approved and verified by parliamentary commissions.

As will be seen later, as regards the customs sector, the main areas of innovation are:

 

  • Sanctions and new regulation of smuggling;
  • Telematization of customs activities;
  • Harmonization and adaptation of the national system with the European regulatory framework;
  • Synergy between the Customs Agency and the Financial/tax Police (guardia di finanza);
  • New regulation of assessment, collection and guarantees;
  • New definitions of institutions linked to customs operations.

 

The process to be followed for the issuing of the definitive act that will redesign the regulatory framework of Italian customs consists of the following steps: the draft decrees, such as that for excise duties, direct taxes and the customs sector, must be drawn up together with a explanatory report, then they are transmitted to the Chambers for the expression of opinions by the parliamentary commissions.

It is regulated by the aforementioned framework:

 

  • Enabling law 9 August 2023 n.111 whereby in article 1 “…The Government is delegated to adopt… one or more legislative decrees containing the revision of the tax system…” and again “…The legislative decrees referred to in this article are adopted, in compliance with constitutional principles as well as the legal system of the European Union and international law, on the basis of the general directive principles and criteria referred to in articles 2 and 3 and the specific directive principles and criteria referred to in articles 4 to 20 …”
  • Council of Ministers n.75 Press release from the Council of Ministers n. 75 26 March 2024 on:

“to. Review of current [domestic] customs regulations

  • To harmonize Italian legislation with that of the European Union, the Consolidated Law on legislative provisions on customs matters is repealed (Decree of the President of the Republic of 23 January 1973, no. 43) and the provisions contained therein are updated and reduced. In particular:

in compliance with the regulations dictated by the European Union customs code (Regulation (EU) no. 952/2013), the telematicisation of customs procedures is implemented and control and verification activities are strengthened, also through coordination with the customs of the the EU and foreign ones, and the single customs desk (SUDOCO);

the procedures for the settlement, assessment and collection of customs duties are redefined and the institution of customs disputes is revised and the structure of the offices and services is reorganised;

the sanctioning regulations are reviewed, with particular regard to smuggling.

  • Customs broker

 The regulations for obtaining the customs broker’s license are updated, with the reduction to one year, from three years, of the frequency with which the Customs and Monopolies Agency will have to announce the exams and the regulations for customs assistance centers are aligned (CAD) to that of the EU, providing for the possibility for freight forwarders to set up joint-stock companies to carry out the functions specific to the category.

 

  • Review of the sanctioning system regarding customs, excise duties and tobacco

 Intervention is made on the criminal and administrative sanctioning system established to protect the assessment and payment of taxes on production and consumption, providing for:

     the introduction of a new crime of evasion of the assessment or payment of excise duty on manufactured tobacco and of a new administrative offense of selling manufactured tobacco without authorization or purchasing from persons not authorized to sell;

     the application of extended confiscation also in relation to the most serious crimes relating to excise duties;

     the decriminalization of some less serious cases.

  • Discipline of the administrative responsibility of entities

 

The liability of entities for administrative offenses arising from the crime referred to in Legislative Decree 231 of 2001 also extends to the crimes referred to in the consolidated excise duty text; it is envisaged, in relation to the aggravated hypothesis of offense depending on smuggling crimes and excise crimes, the application of the interdiction from the exercise of the activity and the suspension or revocation of authorisations, licenses or concessions functional to the commission of the offence; the regulatory reference relating to the competence of the District Attorney’s Office for carrying out preliminary investigations relating to the crime of criminal association aimed at smuggling manufactured tobacco is updated.

 

  • VAT regulations for import operations into an EU country of goods intended to be transferred to another EU country

Specific rules are foreseen on the documentation suitable to prove the actual transfer of the same assets to another member state of the European Union and the provision of certain securities…”

 

Going into specifics, the draft decree on which the Italian customs system will be based provides, among others, the following changes:

 

  1. with a view to harmonizing and adapting Italian legislation, the following regulatory provisions will no longer be applicable: consolidated text of the legislative provisions on customs matters (TULD), approved with the aforementioned decree of the President of the Republic no. 43 of 1973; legislative decree 8 November 1990, n. 374; royal decree 13 February 1896, n. 65.
  2. In case of insufficient staff of the Customs Agency, the controls can be entrusted to the Financial Police.
  3. Import VAT is a border tax and not an internal tax. Therefore, border duties include import and export duties provided for by EU legislation, levies and other charges on import or export, monopoly rights, excise duties, value added tax and any other consumption tax due upon importation to the State.
  4. Strengthening of the SU.DO.CO (customs one-stop shop) also through funding from the PNRR (Mission 3, reform 2.1. entitled «Simplification of import/export transactions through the effective implementation of the One-Stop Control Desk» of the National Recovery Plan and Resilience).
  5. Subsequent verification. The Customs Agency and the Financial Police will be able to:

 

  1. Ask operators and other subjects involved in customs operations, indicating the reason and setting a deadline of no less than 15 days, to provide information and documents relating to the goods subject to customs operations;
  2. In compliance with current legislation, access the places used for the exercise of production and commercial activities and other places where the records and documentation relating to the goods subject to customs operations must be kept, in order to proceed with any inspection of such goods and the verification of the relevant documentation;
  3. The checks on the customs declaration will become more complete: not only on the symptomatic elements of the customs debt but also on other aspects. If a violation of specific regulations is detected, the customs administration must proceed with the involvement of the competent administrations.
  4. Article 214 TULD which regulates temporary import and temporary export will be replaced with a rule which provides only for temporary export but for specific uses.
  5. Smuggling for unfaithful declaration and smuggling for failure to declare with penalties ranging from 100% to 200% of the fees evaded. Cases of exemptions from liability charges are also established;
  6. the application of the administrative sanction linked to the refusal to show documentation, release information or assistance to the Agency and the Financial Police. Reorganization of the sanctioning procedure and provision of new cases such as: failure to comply with a provision relating to the application of customs legislation; the provision of inaccurate or invalid information or documents to the Agency and the Financial Police; failure to conserve documents and information relating to the completion of customs formalities, as well as incorrect keeping of the records required for customs purposes; tampering with and alteration of customs seals.
  7. Administrative sanctions will consist of the payment of a fine of 100% to 200%, subject to the provision of exemptions and exceptions. Criminal sanctions require the presence of a sum of evaded duties exceeding 10,000 euros and other aggravating circumstances.

Finally, it is worth adding that it is necessary to follow the developments of this reform with particular attention as the impacts on AEO compliance and the management system provided for by Legislative Decree 231/2001 will be very important.