Analysis of aspects of uniform tariff classification

The Directorate-General for Taxation and Customs Union commissioned Copenhagen Economics to assess the short-comings of the current Binding Tariff Information (BTI) system, their financial and economic consequences, and possible long-term solutions.

The European BTI system is designed to provide legal certainty to traders with regard to the tariff classification of the goods they import into or export from the European Union. The value of the system depends on a number of features, including the speed with which BTI decisions are issued and the consistency of decisions issued across the EU. An assessment of these and other features of the system was desired.

We surveyed the routines of customs authorities and the experiences of traders, and combined the information with interviews of selected traders and with statistics from the so-called EBTI-3 system.

We identified the following short-comings: Divergent classifications of tradables, long decision times, divergent practices during discussions in the Customs Code Committee (CCC), and a perceived lack of information when a BTI decision is not issued, revoked, or the process is suspended due to discussions in the CCC. We discussed the financial and economic consequences, for individual traders and for the functioning of the internal market, and different solution models were offered.