EUROPEAN COMMISSION

Brussels, 20.10.2020

COM(2020) 655 final

2020/0294(NLE)

Proposal for a

COUNCIL DECISION

on the position to be taken on behalf of the European Union in the EU-Canada Joint Customs Cooperation Committee as regards the adoption of the decision concerning the mutual recognition of the Partners in Protection Programme of Canada and the Authorised Economic Operators Programme of the European Union

EXPLANATORY MEMORANDUM

1.Subject matter of the proposal

This proposal concerns the decision establishing the position to be taken on the Union's behalf in the EU-Canada Joint Customs Cooperation Committee in connection with the envisaged adoption of a decision concerning the mutual recognition of the Partners in Protection Programme of Canada and the Authorised Economic Operator Programme of the European Union.

2.Context of the proposal

2.1.The Agreement between the European Union and Canada on Customs Cooperation and Mutual Assistance in Customs Matters and the Agreement between the European Union and Canada on customs cooperation with respect to matters related to supply-chain security

The Agreement between the European Community and Canada on Customs Cooperation and Mutual Assistance in Customs Matters (‘CMAA’) aims to develop bilateral customs cooperation covering all matters relating to the application of customs legislation and to provide legal basis for mutual administrative assistance. The CMAA entered into force in 1998.

2.2.The Agreement between the European Union and Canada on customs cooperation with respect to matters related to supply-chain security

The Agreement between the European Union and Canada on customs cooperation with respect to matters related to supply-chain security (‘SCSA’) aims to enhance supply-chain security practices that would increase customs related efficiencies to ensure end-to-end supply-chain security and facilitate legitimate bilateral trade. The SCSA entered into force in 2014.

2.3.The Joint Customs Cooperation Committee

The Joint Customs Cooperation Committee (‘JCCC’), established under Article 20 of the CMAA, consists of representatives of the customs authorities of the EU and Canada. Under Article 5 of the SCSA, the JCCC is empowered to adopt decisions on mutual recognition of risk management techniques, risk standards, security controls and trade partnership programmes.

2.4.The envisaged act of the Joint Customs Cooperation Committee

During its fifth meeting, which is foreseen in the fall of 2020, the JCCC is to adopt a decision concerning the mutual recognition of the Partners in Protection Programme of Canada and the Authorised Economic Operator Programme of the European Union (‘the envisaged act’).

The purpose of the envisaged act is to strengthen end-to-end security of international supply chains by allowing customs authorities to implement more effective border controls while facilitating legitimate trade.

The envisaged act will become binding on the parties in accordance with Article 5 of the SCSA in conjunction with Article 20 of the CMAA.

3.Position to be taken on the Union's behalf

EU legislation on the Authorised Economic Operator (AEO) was introduced by an amendment to the European Union's Community Customs Code (Regulation 648/2005 adopted in April 2005). The current legal framework for the AEO Programme is contained in the Union Customs Code and its Implementing Provisions (Regulation (EU) No 952/2013 of the European Parliament and of the Council of 9 October 2013; Commission Implementing Regulation (EU) 2015/2447 of 24 November 2015; Commission Delegated Regulation (EU) 2015/2446 of 28 July 2015) and it is supplemented by AEO Guidelines that have been adopted and are regularly updated within the Customs Expert Group. The objective of trade partnership programmes such as the AEO is to provide facilitation to traders, which demonstrate compliant efforts to secure their part of the international supply chain. According to the Database of EU Authorised Economic Operators, by the end of 2019 more than 9000 EU companies received AEO authorisations for security and safety.

Mutual recognition of trade partnership programmes enhances end-to-end supply chain security and facilitates trade. It consolidates the approach agreed in the World Customs Organization (WCO) Framework of Standards to Secure and Facilitate Trade ('SAFE Framework'). It addresses the demand of the business community in the EU and around the world that standards be implemented in the same way and to avoid proliferation of country-specific requirements and practices.

The mutual recognition of the EU and Canadian trade partnership programmes is a longstanding bilateral customs cooperation project, which is supported by EU companies involved in transatlantic trade with Canada as well as by EU Member States and Canada. The work on the mutual recognition was launched by the Commission and the Canadian Border Services Agency (CBSA) in 2014 with the entry into force of the SCSA. An in-depth comparison of both the Partners in Protection Programme of Canada and the Authorised Economic Operator Programme of the European Union was carried out including several joint validation visits in the EU and in Canada. The assessment of the equivalence of Canada’s partners in Protection Programme to the EU’s Authorised Economic Operator programme was completed in 2015 and the conclusions about the equivalence of the programmes were re-confirmed in 2019 when both sides updated each other about recent developments in their trade partnership programmes.

The EU-Canada Summit Joint Declaration of 17-18 July 2019 stated that the EU and Canada were pleased with the progress of negotiations towards the mutual recognition of our Authorised Economic Operator programmes, that they were committed to concluding mutual recognition expeditiously. It further stated that the mutual recognition would simplify border processes and enhance the security of the supply chain for registered Canadian and European businesses and will work hand-in-hand with the EU-Canada Comprehensive Economic and Trade Agreement to further facilitate two-way trade across the Atlantic.

4.Legal basis

4.1.Procedural legal basis

4.1.1.Principles

Article 218(9) of the Treaty on the Functioning of the European Union (TFEU) provides for decisions establishing ‘the positions to be adopted on the Union’s behalf in a body set up by an agreement, when that body is called upon to adopt acts having legal effects, with the exception of acts supplementing or amending the institutional framework of the agreement.’

The concept of ‘acts having legal effects’ includes acts that have legal effects by virtue of the rules of international law governing the body in question. It also includes instruments that do not have a binding effect under international law, but that are ‘capable of decisively influencing the content of the legislation adopted by the EU legislature’ 1 .

4.1.2.Application to the present case

The JCCC is a body set up by an agreement, namely the CMAA.

The act which the JCCC is called upon to adopt constitutes an act having legal effects.

The envisaged act will be binding under international law in accordance with Article 5 of the SCSA in conjunction with Article 20 of the CMAA.

The envisaged act does not supplement or amend the institutional framework of the CMAA.

Therefore, the procedural legal basis for the proposed decision is Article 218(9) TFEU.

4.2.Substantive legal basis

4.2.1.Principles

The substantive legal basis for a decision under Article 218(9) TFEU depends primarily on the objective and content of the envisaged act in respect of which a position is taken on the Union's behalf. If the envisaged act pursues two aims or has two components and if one of those aims or components is identifiable as the main one, whereas the other is merely incidental, the decision under Article 218(9) TFEU must be founded on a single substantive legal basis, namely that required by the main or predominant aim or component.

4.2.2.Application to the present case

The main objective and content of the envisaged act relate to the common commercial policy.

Therefore, the substantive legal basis of the proposed decision is Article 207 TFEU, in particular the first subparagraph of Article 207(4).

4.3.Conclusion

The legal basis of the proposed decision should be Article 207 TFEU, in particular the first subparagraph of Article 207(4), in conjunction with Article 218(9) TFEU.

2020/0294 (NLE)

Proposal for a

COUNCIL DECISION

on the position to be taken on behalf of the European Union in the EU-Canada Joint Customs Cooperation Committee as regards the adoption of the decision concerning the mutual recognition of the Partners in Protection Programme of Canada and the Authorised Economic Operators Programme of the European Union

THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty on the Functioning of the European Union, and in particular the first subparagraph of Article 207(4), in conjunction with Article 218(9) thereof,

Having regard to the proposal from the European Commission,

Whereas:

(1)The Agreement between the European Community and Canada on Customs Cooperation and Mutual Assistance in Customs Matters(‘CMAA’) was concluded by the Union by Council Decision 98/18/EC of 27 November 1997 2 and entered into force on 1 January 1998.

(2)Article 2 of the CMAA calls on customs authorities to develop customs cooperation of the widest possible scope.

(3)Pursuant to Article 20 of the CMAA, the Joint Customs Cooperation Committee (‘JCCC’) is established and may take the measures necessary for customs cooperation.

(4)The Agreement between the European Union and Canada on customs cooperation with respect to matters related to supply-chain security (‘SCSA’) was concluded by the Union by Council Decision 2014/941/EU of 27 June 2013 and entered into force in 2014.

(5)Pursuant to Article 5 of the SCSA, the JCCC is empowered to adopt decisions on mutual recognition of risk management techniques, risk standards, security controls and trade partnership programmes.

(6)It is proposed that the JCCC, should adopt the decision concerning the mutual recognition of the Partners in Protection Programme of Canada and the Authorised Economic Operators Programme of the European Union during its fifth meeting.

(7)It is appropriate to establish the position to be taken on the Union's behalf in the JCCC, as the decision concerning the mutual recognition of the Partners in Protection Programme of Canada and the Authorised Economic Operators Programme of the European Union will have legal effects,

HAS ADOPTED THIS DECISION:

Article 1

The position to be taken on the Union's behalf in the meeting of the Joint Customs Cooperation Committee established by the Agreement between the European Community and Canada on Customs Cooperation and Mutual Assistance in Customs Matters with regard to the mutual recognition of the Partners in Protection Programme of Canada and the Authorised Economic Operators Programme of the European Union shall be based on the attached draft decision of the Joint Customs Cooperation Committee.

Article 2

This Decision is addressed to the Commission.

Done at Brussels,

(1)    Judgment of the Court of Justice of 7 October 2014, Germany v Council, C-399/12, ECLI:EU:C:2014:2258, paragraphs 61 to 64.

(2)    OJ L 7, 13.1.1998, p. 37.

EUROPEAN COMMISSION

Brussels, 20.10.2020

COM(2020) 655 final

ANNEX

to the

Proposal for a Council Decision

on the position to be taken on behalf of the European Union in the EU-Canada Joint Customs Cooperation Committee as regards the adoption of the decision concerning the mutual recognition of the Partners in Protection Programme of Canada and the Authorised Economic Operators Programme of the European Union

DRAFT

DECISION No […/2020] OF THE CANADA-EUROPEAN UNION JOINT CUSTOMS COOPERATION COMMITTEE CONCERNING THE MUTUAL RECOGNITION OF THE PARTNERS IN PROTECTION PROGRAMME OF CANADA AND THE AUTHORISED ECONOMIC OPERATOR PROGRAMME OF THE EUROPEAN UNION

THE JOINT CUSTOMS COOPERATION COMMITTEE (“JCCC”),

Having regard to the Agreement between the European Community and Canada on Customs Cooperation and Mutual Assistance in Customs Matters, done at Ottawa on 4 December 1997, (“CMAA”), and in particular Article 20 thereof that establishes the JCCC, consisting of representatives of the Customs Authorities of the Contracting Parties to the CMAA;

Having regard to the Agreement between the European Union and Canada on Customs Cooperation with Respect to Matters Related to Supply-Chain Security, done at Brussels on 4 March 2013, (“SCSA”), and in particular Article 5 and the provisions relating to the mutual recognition of supply-chain security programmes and its relevant information and data exchange in Article 4 (c), (d) and (f);

Recognising that the European Union (“EU”) and Canada (the “Contracting Parties”) are committed to strengthening their customs cooperation in accordance with the CMAA and SCSA;

Affirming the commitment of the Contracting Parties to facilitate trade and increase supply-chain security through trade partnership programmes;

Affirming that security and safety, and the facilitation of the international trade supply chain, can be significantly enhanced through mutual recognition of the respective trade partnership programmes, namely the Partners in Protection programme (“PIP”) in Canada and the Authorised Economic Operator programme (“AEO”) in the EU;

Affirming that the AEO and PIP programmes are based on internationally recognised security standards advocated by the SAFE Framework of Standards to Secure and Facilitate Global Trade adopted by the World Customs Organization in June 2005;

Considering that site visits and a joint evaluation of the AEO programme in the EU and the PIP programme in Canada have revealed that their qualification standards for security and safety purposes are compatible and lead to equivalent results;

Considering that mutual recognition allows the Contracting Parties to provide facilitative benefits to economic operators who have invested in supply chain security and have been authorised under their respective programmes;

HAS DECIDED AS FOLLOWS:

Article 1

Definitions

For the purposes of this decision,

“Customs Authority” means Customs Authority as defined in Article 1 of the SCSA, hereinafter referred to collectively as “Customs Authorities” and individually as “Customs Authority”;

“Economic operator” means a party involved in the international movement of goods;

“Personal data” means any information relating to an identified or identifiable individual;

“Programme” means:

(a) in the EU: the AEO programme covering the AEO-Security and Safety (authorisation) and the combined AEO-Customs Simplifications/Security and Safety (AEOC/AEOS) (authorisation);

(b) in Canada: the PIP programme; and

“Programme Members” means economic operators holding AEO membership status in the EU and PIP membership status in Canada as described in the definition of “Programme” when referred to collectively.

Article 2

Mutual Recognition and Implementation of the Decision

1. Each Contracting Party shall, through its Customs Authority, recognise the Programme of the other Contracting Party as compatible and equivalent to its Programme and treat Programme Members of the other Contracting Party’s Programme in a manner consistent with Article 4.

2. The Contracting Parties shall implement this Decision through their respective Customs Authorities.

Article 3

Compatibility

The Customs Authorities shall cooperate to maintain the compatibility and equivalence between their Programmes, in particular with respect to the following matters:

(a) the application process for granting membership;

(b) the assessment of applications; and

(c) the granting of membership and managing of membership status.

Article 4

Benefits

1. Each Customs Authority shall provide benefits to Programme Members of the other Customs Authority that are comparable to the benefits that it provides to its Programme Members.

2. The benefits referred to in paragraph 1 include:

(a) taking the authorised status of a Programme Member of the other Customs Authority into account favourably in its risk assessment, which may result in reducing inspections or controls and, when available, in other security and safety-related measures;

(b) taking the authorised status of a Programme Member of the other Customs Authority into account favourably when assessing the business partners requirements for applicants under its own Programme;

(c) endeavouring to take the authorised status of a Programme Member of the other Customs Authority into account in ensuring priority treatment for Programme Members and their shipments, as deemed appropriate by the Customs Authority providing the benefits, which may include examination priority, expedited processing, and expedited release of the shipments related to Programme Members; and

(d) endeavouring to establish a business continuity mechanism to provide expedited clearance to Programme Members and their shipments, as deemed appropriate by the Customs Authority providing the benefits, upon restoration of services following an event of disruption to international trade due to increases in security alert levels, border closures or natural disasters, hazardous emergencies or other major incidents.

3. Following the review process referred to in Article 7(2), the Customs Authorities of each Contracting Party may provide, in cooperation with other government authorities in its territory, further facilitation benefits, which may include streamlining processes and increasing the predictability of movement at the border, to the extent possible.

4. Each Customs Authority:

(a) may suspend the benefits provided to Programme Members of the other Customs Authority under this Decision;

(b) shall, within a reasonable time, communicate the suspension described under subparagraph (a) and the reasons for the suspension to the other Customs Authority; and

(c) may only proceed to a suspension pursuant to subparagraph (a) for reasons equivalent to those for which it would suspend the Programme Members from its Programme.

5. Each Customs Authority shall, when it deems appropriate, report irregularities involving Programme Members of the other Customs Authority’s Programme to that Customs Authority for the purpose of ensuring immediate analysis of the appropriateness of the benefits and status granted by the other Customs Authority.

6. For greater certainty, this Decision does not limit a Contracting Party or a Customs Authority from requesting information pursuant to the CMAA or other applicable instrument between the Contracting Parties, or between the Customs Authorities.

Article 5

Exchange of Information and Communication

1. The Customs Authorities shall enhance their communication in order to implement this Decision effectively by:

(a) providing each other with the details on their Programme Members as per Article 5(3);

(b) providing each other with updates on operation and development of their Programmes in a timely manner;

(c) exchanging information regarding supply chain security policy and trends; and

(d) ensuring effective communication between the competent services of the European Commission and the customs authority of Canada to enhance risk management practices with respect to supply chain security.

2. Exchange of information and communication in the framework of this Decision shall occur between the competent services of the European Commission and the customs authority of Canada unless otherwise mutually decided in advance of an exchange or communication.

3. Upon receiving consent from its Programme Member, each Customs Authority shall send to the other Customs Authority strictly the following details about that Programme Member:

(a) name;

(b) address;

(c) membership status, namely authorised, suspended, revoked or cancelled;

(d) validation or authorisation date when available;

(e) unique identification number (for example: PIP, EORI or AEO numbers); and

(f) other details that may be mutually determined between the Customs Authorities, subject, when applicable, to any necessary safeguards.

For greater certainty, details in subparagraph (c) do not include the reasons for suspension, revocation or cancellation.

4. The Customs Authorities shall exchange the information referred to in paragraph 3 in a systematic manner by electronic means.

Article 6

Treatment of information

1. Each Customs Authority shall:

(a) unless otherwise provided in this Decision, use any information, including any personal data, received under this Decision for the sole purpose of its implementation, including monitoring and reporting; and

(b) notwithstanding subparagraph (a), obtain the prior written approval from the Customs Authority that sent the information to use the information for other purposes. Such use is then subject to any restrictions laid down by that authority.

2. Each Customs Authority shall:

(a) treat information received under this Decision as confidential; and

(b) provide at least the same level of protection to information received under this Decision as it provides to information received from Programme Members of its Programme.

3. Notwithstanding paragraph 1(a), a Customs Authority may use the information received under this Decision in any judicial or administrative proceedings instituted for failure to comply with the customs law of its Contracting Party, including in its records of evidence, reports and testimonies. The Customs Authority that has received the information shall notify the Customs Authority that has sent that information prior to such use.

4. Each Customs Authority shall:

(a) only disclose information received under this Decision for the purpose for which it was received; and

(b) notwithstanding subparagraph (a), when a Customs Authority is required to disclose information in judicial or administrative proceedings or when required by the law of its Contracting Party, inform the sending Customs Authority in advance and in writing of the disclosure unless prevented to do so by law or due to an ongoing investigation. In that case, it shall inform the sending Customs Authority as soon as possible after the disclosure.

5. Each Customs Authority shall:

(a) ensure that the information it sends is accurate and regularly updated;

(b) adopt or maintain appropriate deletion procedures;

(c) promptly notify the other Customs Authority if it determines that information it has sent to the other Customs Authority is inaccurate, incomplete, unreliable, or if its receipt or further use contravenes this Decision;

(d) take all measures it deems appropriate, including supplementation, deletion, or correction of information referred to in subparagraph (c), to safeguard against erroneous reliance on such information; and

(e) only retain information received under this Decision as long as necessary for the purposes of implementing this Decision, except when otherwise required by the law of its Contracting Party, or for the purposes of judicial or administrative proceedings.

6. Further to paragraphs 4 and 5, each Customs Authority shall ensure in particular that:

(a) security safeguards are in place (including electronic safeguards) that control, on a need-to-know basis, access to information received from the other Customs Authority under this Decision;

(b) information received from the other Customs Authority under this Decision is protected from unauthorised access, dissemination, alteration, deletion or destruction;

(c) information received from the other Customs Authority under this Decision is not disclosed to any private person or party, any State or international body that is non-party to the CMAA or SCSA, or to any other public authority of the EU or Canada, except when required in judicial or administrative proceedings, or when required by the law of its Contracting Party; and

(d) information received from the other Customs Authority under this Decision is stored at all times in secure electronic or paper storage systems, and that logs or documentation are kept on all access, disclosure and use of information received from the other Customs Authority.

7. Each Customs Authority shall:

(a) ensure the personal data of a Programme Member of the other Customs Authority, as it relates to its access, correction and timing thereof, or temporary suspension of use, is treated in a manner at least equivalent to the personal data of its Programme Member; and

(b) publish information to inform its Programme Members about the applicable process for requests referred to in subparagraph (a) under the law of its Contracting Party.

8. Each Customs Authority shall provide that Programme Members have access, as it relates to their personal data, to administrative redress or judicial review regardless of their nationality or country of residence.

9. The Customs Authorities shall publish information to inform Programme Members of their options of seeking administrative redress or judicial review.

10. Compliance with the provisions in Article 6 by each Customs Authority is subject to review by their respective relevant authority, which ensures that complaints relating to non-compliance in the treatment of information are received, investigated, responded to, and appropriately redressed. These authorities are:

(a) in the EU: the European Data Protection Supervisor or its successor, and the EU Member States' data protection authorities;

(b) in Canada: the Recourse Directorate or its successor within the customs authority of Canada.

Article 7

Consultation and review

1. The Customs Authorities shall resolve any issues related to the implementation of this Decision through consultations under the auspices of the JCCC.

2. The JCCC shall review the implementation of this Decision regularly. This review process may include, in particular:

(a) joint verifications to identify strengths and weaknesses in the mutual recognition;

(b) exchanges of views on details exchanged and benefits granted to Programme Members, including any future details or benefits, in accordance with Article 4;

(c) exchanges of views on security provisions such as protocols to be followed during and after a serious security incident (business resumption) or when conditions merit suspension of mutual recognition;

(d) examination of the suspension of the benefits referred to in Article 4; and

(e) review of the implementation of Article 6.

Article 8

General Acknowledgements

This Decision solely creates rights and obligations between Canada and the EU under public international law.

Article 9

Final Dispositions

1. This Decision shall enter into force upon the first day of the month following the date on which Canada has notified the EU of the completion of the procedures necessary for its entry into force.

2. The JCCC may amend this Decision. The amendment shall enter into force in accordance with the procedure described in paragraph 1.

3. A Customs Authority may suspend cooperation under this Decision at any time by providing the other Customs Authority with a thirty (30) days written notice. Such notice is provided to or by the competent services of the European Commission and the customs authority of Canada, respectively. Notwithstanding the suspension of this Decision, the Customs Authorities shall continue to comply with Articles 6(1), 6(2), and 6(4) to 6(6) to ensure the protection of information.

4. A Contracting Party may terminate this Decision at any time by notifying the other Contracting Party through diplomatic channels. The Decision shall terminate thirty (30) days after the written notification is received by the other Contracting Party. Notwithstanding the termination of this Decision, the Customs Authorities shall continue to comply with Articles 6(2), 6(4), and 6(6) to ensure the protection of information.

Done in duplicate at …, on this … day of …, 20.., in the English and French languages, each version being equally authentic.

By the CANADA-EU JOINT CUSTOMS COOPERATION COMMITTEE

On behalf of the EU                            On behalf of Canada

(The Co-Chairs)