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On 7th March, CLECAT attended the 65th plenary meeting of the Trade Contact Group (TCG), which serves as a platform for consultation between DG TAXUD and representatives from the private sector on developments in customs and trade. The meeting was opened by Mathias Petschke, Director at DG TAXUD, who provided a brief update on the status of Customs Reform and the work of the European Parliament’s IMCO Committee.

The agenda included DG TAXUD presentations on the European Ports Alliance (EPA), a new initiative to combat drug smuggling, operational scenarios of the Customs Reform, the implementation challenges of Russian Sanctions, and CBAM. CLECAT expressed its ongoing support for the European Ports Alliance Public-Private Partnership project and requested the continuation of a two-way flow of information to more effectively engage the customs broker community.

In preparation for the TCG's Customs Reform agenda item, CLECAT’s Customs and Indirect Taxation Institute (CITI) met on 4th March and approved a list of questions concerning the Customs Reform. These questions, arising from a detailed analysis of the practical implications of the reform from the perspective of freight forwarders, logistics service providers, and customs agents, were sent to the Commission and the representatives of the European Council prior to the TCG Plenary. During the TCG meeting, CLECAT repeatedly expressed concerns about the Commission's overly ambitious assumption that most traders will adopt the Trust and Check (T&C) model. According to CLECAT, the heavy reliance on this assumption, one of the three foundational elements of the reform, threatens the success of its implementation and leaves SMEs unsupported.

CLECAT also highlighted that the European Parliament’s IMCO Committee's recommendation to retain the AEO status alone does not address the underlying issue. This is partly because all current facilitations in the reform are linked to the Trust and Check (T&C) model but primarily because the AEO status itself is significantly underutilized. With only 18,210 such authorizations in place across the EU customs territory in 2022, as noted in the European Court of Auditors' 2023 report, the effectiveness of the AEO status is in question. CLECAT argued that even if the AEO status remains, the entire facilitation structure requires a thorough revision, ensuring that companies without T&C status can also benefit from the reform. CLECAT concluded that advancing the Customs Reform through an unusually rapid legislative process without comprehensive business modelling could result in legislation that is impractical to implement.

During the afternoon session of the Plenary Meeting, TCG participants were briefed on the challenges of implementing the European Union's sanctions against Russia, based on a presentation by the Commission. Trade Associations within the TCG unanimously agreed that their members are fully committed to compliance and support the Commission's efforts to prevent sanction circumventions. DG TAXUD gave a presentation on the current state of CBAM implementation and the team's forthcoming plans. This was followed by CLECAT's presentation on its Membership Survey, providing participants with first hand accounts of CBAM implementation experiences from the perspectives of service providers and customs agents.

From the initial of CBAM's implementation, CLECAT observed that greater incorporation of trade input during the legislative process could improve the feasibility of future regulations, thus averting potential implementation issues. Furthermore, the diverse roles that different stakeholders have assumed in CBAM's implementation invite further contemplation on the implications for future ambitious legislative endeavours, such as the Customs Reform.