ANALYSIS OF STAGES AND ORGANIZATIONAL AND LEGAL FEATURES OF OBTAINING MEMBERSHIP BY THE EUROPEAN UNION IN THE WORLD CUSTOMS ORGANIZATION

РУССКИЙ

Sergei Mozer, Ph.D. (Law)

e-mail: moser@teloneum.net

Web: http://customs-academy.net/?page_id=10398

ORCID: https://orcid.org/0000-0002-3143-427X

Published: Gaps in Russian Legislation – Vol. 15,  № 6. – 2022. – pages 289-300.

© S.V. Mozer, 2022

(View original)

When using the article referance is required

The presented research material analyzes the organizational and legal features and the first two stages, within which the European Communities (EС) implemented measures to obtain membership status in the World Customs Organization (WCO).

Annotation

A task

To systematize and analyze legal and organizational features, as well as activities aimed at obtaining rights and obligations akin to those enjoyed by the WCO members for the EU in the period from 2001 to 2002.

Conclusions

The research article is devoted to the issues of the legal status of the EU in the WCO and the use of the EU precedent for the implementation of the Strategic Directions for the Development of Eurasian Economic Integration until 2025 (Strategic Directions) in terms of joint actions with Member States aimed at obtaining the Union’s membership status in the WCO.

The subject of the study is the stages, activities, organizational and legal instruments and consequences of EU membership in the WCO.

The performed analysis of stages and legal and organizational features of obtaining EU membership in the WCO can be used to develop conceptual approaches for the Eurasian Economic Union (EEU) to obtain the WCO membership status in the course of implementing the Strategic Directions.

Social Consequences

Conducting a study of the legal status of customs and economic unions in the WCO is associated with the implementation of paragraph 11.7.5. of Strategic Directions in terms of cooperation with this international organization.

Practical value

The results of the study are of interest to the customs cooperation block of the Eurasian Economic Commission (EEC) and can be used by specialists from customs and other executive authorities in the EEU member states, EEC experts to organize and implement mutually beneficial customs cooperation between the EEC and the WCO.

The article is recommended to researchers, teachers, students, graduate students and other categories of students in the Russian Customs Academy, in other universities and the WCO regional training centers in the specialties «Customs» and «Jurisprudence».

Originality/value

The research material is based on an analysis of the practical aspects of the activities of the EU, the WCO and is the result of a comprehensive study of the issue of the legal and organizational basis for obtaining the WCO member status by economic and customs unions.  

Keywords: The World Customs Organization, the WCO, the Eurasian Economic Union, EEU, the Eurasian Economic Commission, EEC, European Communities, European Union, EU, EC, customs regulation, customs administration, international customs law, customs, customs and economic union, legal instruments and tools.

 

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Introduction. As part of the development of Eurasian economic integration, an urgent issue is the development of cooperation with the World Customs Organization (hereinafter referred to as the WCO, the Organization), which can be called a modern institution for improving customs regulation and simplifying trade procedures.[1] Experts from the customs services of the WCO member states, customs and economic unions, international organizations in observer status, as well as academic circles interact with the WCO, primarily on the issue of the formation of legal instruments and tools in the field of customs regulation. In other words, international standards and approaches to the organization of customs and trade facilitation are being created.

In 2020, in the Eurasian Economic Union (hereinafter referred to as the EAEU, the Union), among the promising areas for the development of Eurasian economic integration, «carrying out joint actions with member states aimed at obtaining the Union’s WCO member status» was singled out.[2] In order to form practical steps for the implementation of this event, we conducted a scientific study on the topic «Legal and organizational basis for economic and customs unions to get the status of member of the World Customs Organization», the results of which are published in scientific journals and this article.

For example, the activities and stages passed by the European Community (hereinafter referred to as the EU)[3] within the framework of interaction with the WCO to change the legal status from an observer to a status similar to WCO membership are analyzed.[4] Special attention is paid to the organization of interaction with the WCO by authorized bodies of customs and economic unions, as well as approaches are proposed for the formation of a draft action plan (road map) of the Union for obtaining the status of a WCO member in the course of implementing the Strategic Directions for the Development of Eurasian Economic Integration until 2025 (hereinafter referred to as the Strategic Directions).[5]Along with this, an analysis was made of the legal instruments of the European Union that regulate its legal status in the WCO.[6] In other words, a comprehensive understanding of the issues of the so-called membership of customs and economic unions in the WCO has already been formed at the scientific level.

 

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At the same time, for experts whose competence is the implementation of clause 11.7.5 of the Strategic Directions, the problems of the Union’s membership in the WCO in a practical way (organizational and legal aspects) are not entirely clear. Moreover, the specifics of the EU precedent at various stages of achieving the goal of WCO membership are not known.

These circumstances determine the relevance of this research material. So, let’s analyze the stages that the EU went through to obtain rights and obligations akin to WCO membership.

A comprehensive analysis of materials on the EU membership in the WCO shows that the process of obtaining the status of the European Community «akin to membership» consisted of four stages.[7] In this article, we will analyze the first two.

FIRST STAGE. We refer to the first stage the EU application for the WCO  membership dated April 19, 2001 and its consideration at the 45th session of the WCO Policy Commission (hereinafter referred to as the PC) on June 25-27, as well as the 97-98 meeting of the Council on June 28-30 of the same of the year.

In its application, the EU proposed a draft amendment to the Convention Establishing a Customs Co-operation Council [8] (hereinafter referred to as the CCC Convention), which would allow the EU to become a contracting party to the Convention; possible means of facilitating the entry into force of such an amendment; a number of practical steps that could be taken prior to the adoption of such an amendment to improve the participation of the EU in the work of the WCO; and asked to establish a negotiating structure in the WCO to resolve this issue.

In order to organize the consideration of the issue by the WCO Secretariat, the following factual elements were analyzed: the current status of the EU in relation to the WCO; legal and practical provisions adopted in the organizations of which the EU is already a member; legal issues related to the EU request; practical arrangements for processing a request from the EU.

At the time of consideration of the EU request for WCO membership (2001), none of the provisions of the CCC Convention^[9] did not allow the EU and did not give the right to become a member of the WCO. To date, the situation has not changed. According to the same Convention, customs and economic unions can only have observer status in the WCO.

The main theses of the EU on obtaining the status of a WCO member are as follows:

European Union – exceptional construction (unique example);

the Community has a moral right to have its wish to join the WCO considered by this international organization;

the application of the EU, representing 15 member countries (2001), which together constitute a significant share of international trade, deserves attention;

the EU has a lot to offer to the WCO, including in terms of technical expertise given its experience in building a customs union between its member states;

EU accession will bring clarity and simplify the work of the WCO, as well as strengthen the role and importance of the WCO and enhance its authority;

full membership in the WCO will allow the EU to make an even more useful contribution to the work and goals of the Organization. Full membership will be a logical addition to the Community’s existing participation in various WCO conventions and committees;

The European Community needs to:

obtain formal membership in the WCO by amending the CCC Convention;

become a contracting party to the CCC Convention with the same status as the governments of WCO member countries;

obtain in practice rights similar to those of WCO members;

become a member of the WCO and exercise on its own behalf the rights and obligations imposed by the CCC Convention on EU member states, including the right to vote;

the Community will replace itself with its members, and this will not affect the number of votes on those matters for which it is responsible in accordance with the provisions of the European Treaties. In the field of customs, almost all competences belong to the Community;

some transitional arrangements need to be in place to allow the community to participate in WCO committees, as well as transitional arrangements for voting rights.

As part of the discussions on EU membership in the WCO, we identified the following risks:

the main texts, drawn up 50 years ago, do not allow economic entities to join the Organization;

any vote in which the Community has participated without legal status may subsequently be declared null and void;^[10]

the structure of the WCO does not allow for the formal participation of entities like the EU (various types of trade-related institutions), even though all of them have had an impact on customs policy and practice;

the question should not be considered in terms of whether the EU should be allowed to join the WCO, but more generally, whether any customs or economic union should be allowed to do so;

the question of membership of the EU or any other customs union raises complex legal and possibly some political questions; there is no conviction that EU membership is necessarily the right approach;

 

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it is unlikely that an attempt to amend the CCC Convention will actually succeed in practice, the EU request should be approached with great caution;

legal advisers advocate greater caution when considering EU membership in the WCO, as there is a risk that the legitimacy of decisions taken by the Council could be violated and questioned later if such arrangements are put into effect;

opening the CCC Convention (for revision) may trigger all sorts of other requests for amendments;

setting a precedent for other regional economic groupings;

many trade agreements are rapidly approaching a status similar to that of the EU, there is a risk that the structure of the WCO could be threatened (setting a precedent);

if the votes of a number of WCO Members were concentrated in one body, the value of the WCO would be diminished;^[11]

lowering the status of general directors of customs authorities to the status of figureheads;

many WCO members were members of regional economic groupings of this kind. If such an economic grouping, as, for example, ECOWAS in West Africa, is accepted as a member of the WCO, then, apparently, the decisions taken by ECOWAS in the context of the activities of the WCO will also be entrusted to ECOWAS members. This is seen as a potential conflict of sovereignty;

it is premature to create a working group to start the negotiation process or take temporary measures.

In the course of studying the issues of obtaining the EU’s status as a member of the WCO, the Secretariat generated a number of questions that deserve attention:

The EU must indicate the matters in respect of which competence has been transferred to it by its Member States, as well as the matters in respect of which competence is shared between it and its Member States. For all matters not so stipulated, Member States are presumed to retain their national competence;

It was necessary to study in detail the following legal issues in consultation with the depositary of the CCC Convention (Belgian Foreign Ministry) and the legal adviser of the Secretariat, who is a specialist in international contract law:

– Is the wording of the proposed amendment to Article XVIII acceptable?

– Would the insertion in the CCC Convention of this single new provision be sufficient to cover not only the membership status of the European Community, but also the changed situation of the EC Member States vis-à-vis the Organization?

– What consequent amendments would need to be made to other formal instruments such as the Council’s Rules of Procedure?

– To what extent would the formal instruments of the WCO’s various Committees and other technical bodies have to be amended in order to reflect the new status of the European Community within those bodies?^[12]

Along with this, issues of seating arrangements, voting procedures, as well as participation in the work of WCO committees were considered. The proposals form to the following theses:

Seating order at WCO meetings: The EU representative should sit next to the Member State (EU) holding the EU Presidency (EU position).

voting procedure: the representative of the EU must, if he has not been granted the right to vote on his own behalf in accordance with the Conventions, on matters within the competence of the Community, be able to exercise the right to vote on behalf of the Member States of the EU (EU position).

participation in committees: while the EU has observer status at all meetings of the WCO, with the exception of the Policy Commission and the Finance Committee. Allow the European Commission (hereinafter referred to as the EC) to participate in the PC meeting, either on its own behalf or as an observer. Do not participate in meetings of the Finance Committee until the EU has assumed a significant part of the Member States’ contribution.

In the course of researching topical issues of the legal status of the EU in the WCO, we systematized the US position on this topic. In our opinion, it deserves special attention. The main theses of the American side are as follows:

– the EU is not eligible for membership in accordance with the provisions of the CCC Convention;

– an amendment to the CCC Convention would require the consent of each contracting party, and the United States Government is currently not granting its consent;

– The United States does not agree that an amendment to the CCC (Granting EU Membership) Convention is a priority, necessary or in the best interests of the WCO and its members;^[13]

– The US government opposes:

– any proposal to draft an amendment to the Convention;

– any suggestion that there might be possible means of facilitating the entry into force of such an amendment;

– the establishment of any practical measures that would allow the European Community to, in effect, enjoy the benefits of membership prior to such an amendment; and

– any suggestion that a negotiating structure be established to allow any of these issues to be carried forward.^[14]

If the votes of a number of WCO Members were concentrated in one body, the value of the WCO would be diminished.^[15]

This entails lowering the status of general directors of customs authorities to the status of figureheads.

The issue of competence is a concern. The EU has recognized that it has only certain competences in the field of customs, while others remain with the 15 member states. The task of defining these competencies is best handled through the European Community’s own consultation mechanism and not within the WCO.

 

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The Council Convention embodies the Organization and all that it stands for. The decision to open it up for amendment should not be taken lightly, as there are many potential dangers, in particular requests for other amendments that could change the very nature of the Organization.

From a legal point of view, it was clear that economic unions, customs unions and similar bodies could not be members of the WCO. Changing this will require positive approval from all WCO Member States and will be a challenging task.

One of the objectives of this study is to develop a draft action plan (roadmap) for obtaining the status of a WCO member by an economic union (EEU) based on the EU precedent. The study of this issue made it possible to identify the following steps for the EU and the WCO to achieve this goal :

1. Conducting negotiations between the European Commission and the WCO Secretariat on membership in the Organization.
2. Adoption of the decision of the Council of Ministers of the EU to apply for membership in the WCO (adopted unanimously).
3. EU Council of Ministers authorizes the European Commission to submit an EU request to the WCO and, if necessary, to negotiate for WCO membership (March 2001).
4. The Council of the European Community authorizes the European Commission to negotiate an amendment to the Convention establishing the Customs Cooperation Council (decision of 19 March 2001).[16]
5. Applying for WCO membership. Letter from the European Commission to the WCO Secretariat indicating that the Council of the European Community has authorized the EC to negotiate an amendment to the СCC Convention to allow the European Community (EC) to become a member of the WCO (19 April 2001).

In its letter, the Commission on the merits:

– Proposes a draft amendment to the СCC Convention that would allow the EU to become a Contracting Party to the Convention;

– suggests possible means of facilitating the entry into force of such an amendment;

– establishes a number of practical measures that may be taken prior to the adoption of such an amendment to improve the participation of the EU in the work of the WCO; and

– asks to create a negotiating structure in the WCO to resolve this issue.

6. WCO Secretariat circulates letter from EC to all Members for information (May 2001).
7. Conducting consultations of the WCO Secretariat with:

– depositary of the Convention (Ministry of Foreign Affairs of Belgium);

– a specialist in international contract law (Legal Adviser of the WCO Secretariat);

– Commission of the European Community;

– Familiarization with various published sources of information on EU membership in some other intergovernmental organizations.

The aim is to obtain an initial position on the legal aspects of EU membership in the WCO and prepare background material to form the basis for discussions in the PC and the Council.

8. Preparation by the WCO Secretariat of background material dated 31.05.2001^[17] for the 45th PC meeting (25-27 June 2001) to provide a basis for discussions (based on consultations, see paragraph 7 above).[18]
9. Formation of position by the WCO Secretariat (31.05.2001). The Policy Commission was invited to conduct a preliminary discussion on the issues raised in the background paper and make recommendations to the Council on:

a) the principle of starting negotiations with a view to

(i) EU membership in the WCO; and

( ii ) in the short term, the introduction of measures aimed at facilitating the participation of the EU in the work of the WCO; and

(b) if this principle is to be accepted, the procedures to be put in place for the success of these negotiations.

10. Carrying out political discussions initiated by governments and the EU, seeking a political solution (since the dissemination of the information note of the WCO Secretariat dated May 31, 2002).
11. Planning for a preliminary discussion of the EC request at the PC and Council meetings in June 2001.
12. Preliminary discussion of the EC request at the 45th session of the WCO PC (25-27 June 2001)^[19] with the participation of the EC Director General responsible for taxation and the customs union.

The following actual elements are considered:

– Current status of the EU in relation to the WCO (2001).

– Legal and practical provisions adopted in the organizations of which the EU is already a member (Food and Agriculture Organization of the United Nations; World Trade Organization (WTO).

– Legal issues related to the EU request.   

13. Participation of the EC Director General responsible for taxation and the customs union in the 45th meeting of the WCO PC (25-27 June 2001) in discussions on the Secretariat’s approach to EU membership in the WCO, as well as the submission of a Community request for membership.
14. Discussion of the EC application at the 97-98 sessions of the WCO Council (28-30 June 2021). Event results:

The Chairman of the Council stated that there is no agreement in the Council and the PC on the principle of starting negotiations on EU membership in the WCO.

The Council agreed with the PC that it would be premature at this stage to set up a working group to start a negotiation process or take provisional measures.

 

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Many questions have been raised that require further study, incl. related not only to customs matters, but also to the constitutional, legal or practical aspects of the EU request.

Various national authorities will need to be consulted.

The most logical solution would be to postpone the response to the EU request (for a year – author’s note ) until the end of Council meetings in June 2002 and leave this document open in order to give WCO members more time for consultation and reflection, and also to facilitate the collection of additional information.

The Chair requested the Secretary-General, through the Vice-Chairs, to draw up a list of specific questions from Members that they considered merited further study.

15. Participation of the EU representative in the 97-98 sessions of the WCO Council (28-30 June 2021) when discussing this issue and presenting the Community request for membership, as well as explaining the motives (reasons) underlying the EU request for membership.[20]
16. Additional information for stage I (on the establishment of a negotiating structure):

Proposals from the WCO Secretariat regarding practical measures to process a request from the EU:

Acceptance of the principle of EU membership as worthy of study, the consequence is the initiation of a process of further consideration of issues leading to negotiations on an acceptable outcome.

Adoption of the principle of starting negotiations with a view to EU membership in the WCO at Council meetings.

Development and harmonization of the methodology of negotiations with the aim of EU membership in the WCO. Negotiations should be bilateral, that is, between, on the one hand, representatives of the EU, and on the other, representatives of the WCO.

Formation of two negotiating groups:

the creation of a Community negotiating group, which consists exclusively of EC officials; EU member states do not participate in the negotiations;

Establishment of a WCO negotiating group: this should be a small but representative group of members, possibly consisting of the Chair and Vice Chairs of the Council, as well as a few other members appointed as Vice Chairs to ensure the best possible regional balance. The Chairman of the Council was supposed to head this negotiating group.

In conclusion, we note that neither in the PC nor in the Council was there agreement on the principle of initiating negotiations with a view to EU membership in the WCO. At its 97th-98th sessions (28-30 June 2001), the Council decided to keep this topic open until June 2002 to give Members more time for consultation and considerations, and to facilitate the gathering of additional information.

         SECOND STAGE. We analyzed the second negotiation stage, during which the international customs community actively discussed the possibility of granting WCO member status to the EU. A feature of this stage is the formation of questions and the preparation of answers about potential EU membership (after the 97/98 Council sessions, June 28-30, 2001).

The analysis of the WCO materials made it possible to identify 6 groups of questions on the subject of the study, which include 24 questions:

– general questions on regional economic groupings (associations);

– general questions at the request of the EU;

– competence of the EU in the WCO;

– on amendments to the CCC Convention;

– EU membership fees to the WCO;

– participation of the EU in the work of the WCO.

The classification given is as follows:

General questions on regional economic groupings (associations)

1. Should the EU request be considered in isolation, or would it be preferable to work on the assumption that other customs unions may qualify for WCO membership in the future?^[21]
2. What is the current legal status and future expectations of the various regional economic groupings to which WCO members belong?

2.1. What way these groupings are currently use and are expected to use in the future their member states  in customs affairs?

2.2. Do these regional groups consider it possible to apply for WCO membership? and

2.3. How would the Member States concerned react in such a case?

3. How are customs unions and trade groupings treated in other international organizations in terms of having observer status or full membership?

General questions at the request of the EU

4. What benefits will EU membership bring to the WCO?
5. What will be the impact on the day-to-day work of WCO technical committees when an economic union represents its members (e.g. in terms of the quality of the discussion)?
6. Has the EU applied for membership in any other intergovernmental organizations and been rejected (and if so, for what reasons), and are any organizations other than the WCO currently discussing an application for EU membership?
7. Could a proposal from the EU and possibly other customs unions of a similar status besides membership represent a better approach to the issue?
8. What is the position of the EU in relation to other international organizations?
9. Is it worth doing a study to determine the benefits of EU membership for the WCO?

Note : The only party that opposed any research on the possibility of starting negotiations with the EU on this topic was the United States.

 

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Competence of the EU in the WCO

10. Clarifications should be given on the issue of competence in order to give the WCO members a clear and complete understanding of the practical implications that may arise from the admission of the EU as a member of the WCO.
11. If the EU were to become a member of the WCO, what would be its role compared to that of the EU Member States in the activities of the Organization?
12. If the EU becomes a WCO member, in what areas of WCO activities will the European Community exercise the rights and obligations of its member states, and in what areas will EU member states continue to exercise their rights (including the right to vote) individually?
13. Can a distinction be made, for example by color coding, between agenda items for which the EU will be responsible and those that will remain the responsibility of individual EU Member States?
14. If the EU were to become a member of the WCO, what would be its role, compared to that of its member states, in the activities of the Organization?

On Amendments to the Convention Establishing the Customs Cooperation Council

15. Is the WCO really wish to accept the EU as a member and, if so, should appropriate amendments be made to the CCC Convention and other legal instruments with reference to the EU only or to customs and economic unions in general?
16. Should there be a general revision of the CCC Convention, and not just an amendment to it, given that this convention was conceived as a technical instrument fifty years ago and the needs of members have changed over time?
17. What amendments need to be made to the CCC Convention (and other WCO legal instruments) to allow the EU to become a member?
18. Can, in practice, the European Community be granted rights similar to those of members (including the right to vote) prior to actual membership?
19. Is there a need to standardize the status of the EU in the various WCO committees?

EU membership fees to the WCO

20. How will the issue of membership fees be handled?

EU participation in the work of the WCO

21. In case of accession to the WCO, will the EU (or any other customs union) participate in the governance structures of the Organization, i.e. the Finance Committee and the Policy Commission?
22. What will be the relationship between the EU (or any other customs union) and WCO regional structures?
23. About seating at sessions. If it is agreed that the WCO should start negotiations on Community membership, should there be any changes to the seating arrangements for WCO sessions and EU interventions in the meantime?

Voting right

24. What voting rights will the EU have?

In light of the foregoing, the WCO Secretariat has proposed that the following studies be carried out in the first half of 2002 to help Member States decide whether or not to start negotiations in view of EU membership in the WCO. In doing so, 6 themes were identified :

– current status/aspirations of regional groupings around the world (executor – Vice Chairs, Secretariat);

– EU relations with other intergovernmental organizations (executor – EC, Secretariat);

– relations of other regional groupings with intergovernmental organizations (executor – vice-chairmen, Secretariat);

– the benefits of EU membership in the WCO (executor – EU, Secretariat, interested members);

– the competence of the EU and the EU member states in the case of EU membership in the WCO (executor – the EU);

– the likely impact of EU membership on the day-to-day activities of WCO technical committees (executed by the Secretariat).

Answers to questions by the European Community

On 24 April 2002, the EC submitted to the WCO Secretariat its position on the three issues listed in the Secretariat’s paper on possible topics for study, namely:

– distribution of powers between the EU and its member states;

– EU relations with other international organizations; and

– why EU membership would be beneficial for the WCO.

According to the author, the answers provided by the EU to the questions posed are incomplete and do not give a clear idea, for example, of the EU’s relations with international organizations, as well as the benefits of EU membership for the WCO. The main emphasis was placed on the so-called uniqueness of the EU and its central place in the system of relations with EU member states. The EU thesis about the absence of the need to submit a declaration on the division of competence between the EU and its member states, as well as the constant development of the competence of the Community and the difficulty of developing a position (on the division of competence – author’s note) before the start of the negotiation process on obtaining the status of a WCO member. At the same time, as noted in the materials of the EU, the issue of division of competencies is the sole responsibility of the EU and its member states. In other words, there is exclusive competence, but information on the division of responsibility (competence) between the EU and its Member States cannot be provided. And this despite the fact that until today, in accordance with the CCC Convention, customs and economic unions cannot be members of the WCO, but only observers.

It is worth noting that most of the questions about the potential EU membership in the WCO, which were voiced by the WCO member countries at the sessions of the PC and the Council, were not included in the generated list of questions sent by the Secretariat to the EU and vice-chairs for the regions of the Organization. For example it were ignored the issues of EU membership fees in the WCO, the right to vote of the EU, the standardization of the status of the EU in various WCO committees, the impact on the daily work of WCO technical committees (quality of discussion), the role of the EU compared to the role of EU Member States in the activities of the WCO, areas of activity of the EU and EU member states in the WCO, relations between the EU and regional structures of the WCO, etc.

 

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Here are the main theses from the EU’s responses to the questions posed:

1. The EU is more than a customs union. It constitutes an economic union that has achieved a unique level of integration at the international level.^[22]
2. There is no need for a declaration on competence sharing the responsibility between the EU and its Member States. In addition, Community competencies are in a permanent state of evolution. It would be very difficult to establish such a position before the negotiating process started. In addition, the question of the sharing of competencies is solely the responsibility of the EC and its’ Member States.^[23]
3. EU member states^[24] have built much more between themselves than a free trade area or a simple customs union. They act in commercial and customs affairs as if they formed one country in which internal borders between states have been abolished.
4. The EU customs union is based on common legislation adopted by a qualified majority, not unanimously. This legislation no longer falls within the legal competence of the EU Member States, which, by the Treaty of Rome, have transferred decision-making power on this matter to specific common institutions.
5. Customs legislation is adopted according to a decision-making process where, in certain cases, the European Parliament plays an essential role; and this Parliament, made up of Members elected directly by European citizens, is the expression of genuine European sovereignty.^[25]
6. The Customs Code which is common to all 15 Member States of the EC, is directly applicable in each, and constitutes a unified customs territory.[26]
7. The adoption of customs legislation falls to common Institutions, created by the Treaty of Rome, the Council of the European Union, the European Parliament and, as regards the measures of implementation and control of Community law, the European Commission, which replaced the national authorities of the Member States. In addition a Court of Justice was created to interpret Community law. This customs union constitutes a unique example of developed integration, for customs as well as for political, legal, economic and monetary aspects.^[27]
8. In this Community architecture, the European Commission occupies a central place.
9. The European Commission is guarantor of application of the Community customs law, which ensures equivalent results throughout the customs territory of the EC. In fact, the European Commission is at the center of this process of co-ordination of actions of these administrations, ensuring that the latter act as if they formed only one administration.[28]
10. All the fields in which the scope of the WTO and the WCO overlap fall within the exclusive competence of the EC (customs value, origin, tariff measures, counterfeits, facilitation of trade, etc).
11. Competence shared with competencies of Member States – training, money laundering, nuclear products.
12. Some customs matters connected with measures aiming to ensure the respect of law and order still fall within the exclusive competence of the Member States of the EC.[29]
13. It is indispensable for the proper functioning of the EC that the sharing of competencies between the EC and its Member States be extended at external level, within the framework of EC participation in the work of international organizations such as the WTO or the WCO.
14. The vast majority of issues dealt with by the WCO fall within the exclusive competence of the EU.
15. At the legal level, the Member States no longer have the power to take almost all decisions taken on customs matters.
16. The accession of the EU to the WCO will clarify the situation in the interests of both this organization and its members, and at the same time satisfy the internal legal reality of the EU.
17. The fact that the EU can only act through its member states creates an undoubted confusion that is detrimental to the normal functioning of the WCO itself. The EU cannot fully participate in the work of the two main bodies, the WCO Council and the Permanent Technical Committee, as it can in other WCO bodies.

In our opinion, the main incident is that when forming a new status of the EU in the WCO, within the framework of the international customs organization, an attempt is made to transfer the competences of the European group of WCO member countries to an entity (EU) with observer status, which, by virtue of WCO law, cannot be a member this organization. According to the EU, the Community has exclusive competence in matters of customs regulation within the framework of European institutions and a similar situation should be for it in the WCO. And for these purposes, little is needed – to change the status of an observer to the status of a WCO member. In this case, the status of the customs administrations of the EU member states becomes nominal, since decisions will be made for one or another customs administration in Brussels.

 

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Measures to obtain the status of a WCO member

The analysis of the second stage of obtaining EU status in the WCO made it possible to identify several more activities that were necessary to fulfill the EU application:

1. The President of the WCO Council requests the Secretariat, with the participation of the Vice-Presidents, to compile a list of specific issues deserving further study (97-98 sessions of the WCO Council (28-30 June 2021).
2. Formation by the Secretariat of a list of questions on the issues of EU membership in the WCO (after the 97/98 Council sessions, June 28-30, 2001).
3. Preparation by the Secretariat of a list of questions on the issues of EU membership in the WCO to the Policy Commission.
4. The WCO Secretariat considered it premature to consider the questions that had been formed, although there was no doubt that they were of great importance in the negotiations on EU membership in the WCO (voiced on November 6, 2001).
5. With the consent of the PC, studies on the identified issues are planned to be submitted to the Policy Commission and the Council.[30]
6. Contacting the Secretariat in writing to the Vice-Presidents to see if members in their respective regions wish to propose any aspects of the EU membership request that should be further explored (following the 97/98th sessions of the Council, which took place on 28 – 30 June 2001).
7. Received by the Secretariat a response from the Vice-Chair, Delegate of the United Kingdom representing the European Region, with a list of possible topics for study identified by Members in the European Region (22 October 2001).
8. Presenting to survey participants a list of possible topics for study, which have been previously identified by member countries of the European Region.
9. Holding consultations at the regional level by Vice-Chairs with WCO members. The goal is to get an opinion on the consequences for the WCO of the emergence of free trade areas and agreements, customs unions and other similar phenomena.
10. Formation by November 2001 by the WCO Secretariat of the questionnaire. The aim is to assist member countries in deciding whether to start negotiations given the EU’s membership in the WCO. Areas of study (6 questions):

– current status/aspirations of regional groupings around the world (executor – Vice Chairs, Secretariat);

– EU relations with other intergovernmental organizations (executor – EC, Secretariat);

– relations of other regional groupings with intergovernmental organizations (executor – vice-chairmen, Secretariat);

– the benefits of EU membership in the WCO (executor – EU, Secretariat, interested members);

– the competence of the EU and the EU member states in the case of EU membership in the WCO (executor – the EU);

– the likely impact of EU membership on the day-to-day activities of WCO technical committees (executed by the Secretariat).

Note: These questions were identified (agreed) by the PC at its 46th session in December 2001 and were requested by the PC, the Secretary General and WCO Members for a fact-based decision.

11. By the 46th session of the PC, December 10-12, 2001, the WCO Secretariat formed the following positions:

In order to examine the issue of EU competence, it is necessary to send copies of the agendas of all meetings of the working bodies of the WCO in the last 12 months to the EC with a request to distinguish – for example, by color coding – between agenda items of the meeting for which the European Community will be responsible and those for which will remain the responsibility of individual members (in fact, the proposal has not been implemented – author’s note);

it is proposed that the WCO Secretariat assess the possible impact of EU membership on the day-to-day work of WCO technical committees by comparing the degree of participation of EU Member States and the European Commission in (i) a committee of which the EU is a member (e.g. the HS Committee), and (ii) a committee, in which the EU participates as an observer (for example, the Law Enforcement Committee) (the proposal was not implemented – author’s note).

12. Consideration of the issue of EU membership in the WCO at the 46th session of the PC (10 – 12 December 2001). Decisions taken:

– The WCO Secretariat has identified possible areas of study and fulfilled its mandate;

– issues in the working paper that are of direct relevance to the EU and its application for WCO accession will be referred to the EU for further comments, inputs and research;

– at the regional level, the Vice-Chairs will consult with WCO members to seek their views on the implications for the WCO of free trade areas and agreements, customs unions and other such phenomena;

– The PC will return to this issue in June 2002 based on inputs (positions) to be received from the EU and the Vice Chairs.[31]

13. In December 2001, the PC instructs the Secretary General of the WCO to receive answers to the questions asked in accordance with the questionnaire developed by the Secretariat.
14. The Secretariat in December 2001 invited the EC to provide preliminary information:

– about the relations that customs and economic groupings in the European Region maintain with various intergovernmental organizations;

– about the benefits of EU membership for the WCO;

– on the competence, practical consequences that may arise as a result of the EU’s admission as a member of the WCO.

The Secretariat’s formal letter of response was sent to the EU on 7 February 2002.

15. Presentation by the European Community on April 24, 2002 to the WCO Secretariat of materials (positions) on those research issues that are directly related to it:

– distribution of powers between the EU and its member states;

– EU relations with other international organizations;

– why EU membership would be beneficial for the WCO.

16. Provision by Vice-Presidents of the views of WCO members by region on the implications for the WCO of the emergence of free trade areas and agreements, customs unions, etc.

– 26.04.2002 – Deputy Chairman of the Asia-Pacific region.

– 06.05.2002 – Deputy Chairman from the region of North Africa, the Near and Middle East.

– May 17, 2002 – Deputy Chairman of the European Region of the WCO.

17. By the 47^th session of the PC, June 24-26, 2002, the WCO Secretariat formed the following positions:

It has become obvious to the WCO Secretariat and it would be inappropriate to take a stand on what is essentially a matter of national policy. In these circumstances, the Secretariat limited itself to indicating that the options open to the PC could include the following:

– to recommend to the Council to start negotiations with a view to EU membership, while the Secretariat will be instructed to prepare a draft terms of reference for negotiations (the event has not been implemented – author’s note );

– recommend to the Council to defer consideration of this issue until WCO priorities allow it to allocate the necessary time and resources;

– recommend to the Council to reject the EU’s request for negotiations;

– to recommend to the Council not to take a decision on the EU request for the time being, pending further consideration at the national level and/or provision of additional information (to be determined by the Policy Commission).

18. 47th session of the WCO Policy Commission (24 – 26 June 2002). The WCO Secretariat no longer saw the need for the PC to undertake any further studies at this stage. The Head of the WCO Secretariat undertook to keep the PC and Council informed of any developments that could be reported to him in the course of political discussions.

In turn, the PC took note of the Secretary General’s comments and agreed with him that this issue should be left open. The Secretary General was requested to monitor the situation and report to the PC and the Council when events occur that need to be brought to their attention.[32]

19. 99/100 Sessions of the WCO Council (27-29 June 2002). The issue of EU membership in the WCO was considered. The Council took note of the following information: the Chairperson of the Council explained that the Secretary General had informed the Policy Commission that the issue of EU membership in the WCO was currently the subject of political discussions initiated by governments and the EU, and suggested that it be left open until found a political solution. The PC requested the Secretary General to monitor the situation and keep the PC and Council informed of developments that need to be brought to their attention.

On the risks associated with obtaining the status of a WCO member

Above, we systematized the risks that, in the opinion of WCO members, could arise in connection with granting the EU the status of a WCO member. The list below contains additional risks that the Secretariat and WCO Members have voiced in the framework of the formation of questions and preparation of answers on the legal status of the EU:

– the amendment of the CCC Convention (in terms of granting EU membership – author’s note) is not a priority, necessary or in the interests of the WCO;^[33]

– the competence of the EU and its member countries will not be clearly defined in all cases dealt with by the WCO. This, in turn, will increase uncertainty in customs facilitation and enforcement efforts and place a greater burden on the WCO;

– it is necessary to conduct a study to determine the benefits of EU membership for the WCO. According to the WCO Secretariat, this could be a key issue for member countries as they seek to determine their national position with regard to the EC membership request;^[34]

– the question of whether to revise the CCC Convention as a whole, rather than simply amending it to allow EU membership, will not arise unless the principle of negotiating such membership is accepted. Therefore, it is premature to consider this issue;^[35]

– the limited resources of the Secretariat should not be spent on studying the issue of EU membership in the WCO, especially in the light of the discussions on the need to prioritize the work of the Organization and meet the requirements of members as a whole;

 

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– opening the CCC Convention for amendments will require extremely large resources and time. This will divert attention from the work of the already limited resources of the Organization;

– the process may take years to complete and the results are uncertain ;

– the resources of the Secretariat have been exhausted to carry out the work of priority for its members, as indicated in the Strategic Plan;^[36]

– Some WCO Members do not want the resources of the Secretariat to be used to resolve the issue of EU membership, as other more important priorities must be resolved within the Strategic Plan.

The next element that we traditionally single out in the conclusions based on the results of the study of the issue is the position of the United States. Within the framework of the analyzed stage it is as follows:

The United States Government, after internal deliberations, gave the most careful consideration to the EC’s request for WCO membership, as well as the possibility of conducting a study on the request for EU membership. It studied the implications of amending the Convention and considered the resources that would be required to do so.

As stated at the June PC and Council meetings, the United States does not believe that amending the Convention as requested would be in the Organization’s best interest.

The United States valued the continued involvement of the EC in the WCO as an observer. According to the US, the EC had an ability to represent its views fully; through its Member States it had the ability to join or block consensus in areas of its competence. The United States did not believe that an amendment to the Council Convention was a priority, was a necessity, or was in the best interest of the WCO. Opening the Convention to amendment would be extremely resource and time intensive. It would detract from the Organization’s already limited resources and would divert attention from work prioritized by the Members in the Strategic Plan. The process could take years to complete, with uncertain results. The WCO’s limited resources should instead be used to advance Customs facilitation measures that addressed the needs of the trading community and administrations’ respectivelaw enforcement responsibilities.[37]

EC-divided competency would not be clear-cut in all cases dealt with by the WCO, and this in turn would increase uncertainty in efforts on Customs facilitation and law enforcement. This would impose greater burdens on the WCO.[38]

Therefore, the United States did not favour amending the Convention. In fact, the Convention already contained membership criteria that the European Commission could utilize when it met them. The United States also recommended against the Secretariat undertaking any studies regarding the possibility of opening negotiations with the EC on this topic. The United States felt that the Secretariat’s resources were stretched to capacity in conducting the work prioritized by its Members as outlined in the Strategic Plan.[39]

On the merits of the issue of amending the Convention of the Customs Cooperation Council, 2 theses can be distinguished:

– the admission of the European Community as a member of the WCO would require amendments to the Council Convention; and

– an amendment to the Convention will require the express written consent of all Contracting Parties to the Convention.

         Conclusions. The study allowed us to identify 4 stages in which the EU has made efforts to obtain a status similar  (akin to) to WCO membership. This article analyzes the organizational and legal features and the first two stages on the EU’s path to WCO «membership».

The author systematizes the main theses of the EU on obtaining the status of a WCO member, highlights the risks associated with such membership, and also formed a number of issues that deserve attention (6 groups on the subject of study). Moreover, the research article analyzes the position of the EU on the issues voiced, and also highlights measures to obtain the status of the WCO member).

According to the author, the EU does not have the status of a WCO member (member of the Council), since, in accordance with the CCC Convention, such status is granted only to states (members of the Council are the government of any separate customs territory). Customs and economic unions as international organizations are entitled to receive only observer status. The thesis about the exclusive role of the EU, the presence of some moral right to membership in the WCO, is contrary to the norms of the CCC Convention, has no legal consequences.

The results of the study are proposed to be used within the framework of the expert activities of the EEU, in particular, the working group on interaction with the World Customs Organization, established on March 29, 2022 by order of the EEC Board № 55.[40]

  

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 USED SOURCES:

 

1. Kadyrkulov M.A., Mozer Sergei, Lipatova N.G. The World Customs Organization as a Modern Institute of Improvement of Customs Regulation and Trade Facilitation: a monograph. Lyubertsy: Publishing house of the Russian Customs Academy, 2017. URL: http://customs-academy.net/wp-content/uploads/2018/11/Мон.-ВТамО_Кадыркулов_Мозер_Липатова_.pdf
2. Mozer S.V. Organizational and legal aspects of the membership of the European Communities in the World Customs Organization as a precedent for customs and economic unions // Socio-political sciences. – № 4. – 2022. URL: https://www.urvak.ru/articles/sotsia-4366-vypusk-4-organizatsionno-pravovye-aspe/
3. Mozer S.V. On the issue of organizing effective legal relations with the World Customs Organization: recommendations for customs and economic unions // Problems of Economics and Legal Practice. – № 4. – 2022. URL: https://www.urvak.ru/articles/probl-8028-vypusk-4-k-voprosu-ob-organizatsii-effe/
4. Mozer S.V. Analysis of the legal instruments of the European Union governing its legal status in the World Customs Organization. // Socio-political sciences. – № 5. – 2022
5. The EEC creates a legal framework for effective coordination of the actions of the EEU customs services with the WCO. 08.06.2022. URL: http://customs-academy.net/?p=14390
6. A road map for development of cooperation with the World Customs Organization/ EEC News. 27.09.2022. URL: http://customs-academy.net/?p=14524
7. Strategic Directions for the Development of Eurasian Economic Integration until 2025. Approved by the Decision of the Supreme Eurasian Economic Council dated December 11, 2020 № 12. URL: https://docs.eaeunion.org/docs/ru-ru/01428320/scd_12012021_12
8. International Convention on the Simplification and Harmonization of Customs Procedures of May 18, 1973 as amended by the Protocol on Amendments to the International Convention on the Simplification and Harmonization of Customs Procedures of June 26, 1999. Electronic fund of legal and normative-technical documents «Consortium Code». URL: https://docs.cntd.ru/document/1901082
9. Membership Request from the European Community. (Item X on the Agenda – Other business). Policy Commission. 45th Session. SP0071E1. Brussels, 31 May 2001.
10. Report of the Policy Commission. 45th Session. SP0075E2. Brussels, 27 June 2001.
11. Membership Request from the European Community. Item XI on the Agenda. Policy Commission. 46th Session. SP0085E1. Brussels, 6 November 2001.
12. Report of the Policy Commission. 46th Session. SP0090E1. Brussels, 29 January 2002.
13. Membership Request from the European Community. Policy Commission. SP0102E1. 47th Session. Brussels, 31 May 2002.

 

 

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[1] Kadyrkulov M.A., Moer S.V., Lipatova N.G. The World Customs Organization as a Modern Institute for Improving Customs Administration and Facilitating Trade Procedures: monograph. Lyubertsy: RIO of the Russian Customs Academy, 2017. – 173 p. http://customs-academy.net/wp-content/uploads/2018/11/Mon.-VTamO_Kadyrkulov_Moser_Lipatova_.pdf

[2]Clause 11.7.5. Strategic directions for the development of Eurasian economic integration until 2025. Approved by the Decision of the Supreme Eurasian Economic Council dated December 11, 2020 № 12. URL : https :// docs . eaeunion . org / docs / ru – ru /01428320/ scd _12012021_12    

[3]On December 1, 2009, after the entry into force of the Treaty of Lisbon, the successor of the European Community became the European Union (therefore, the concept of the European Community has not been used since).

[4]Mozer S.V. Organizational and legal aspects of the membership of the European Communities in the World Customs Organization as a precedent for customs and economic unions // Socio-political sciences. – No. 4. – 2022 URL: https://www.urvak.ru/articles/sotsia-4366-vypusk-4-organizatsionno-pravovye-aspe/

[5]Mozer S.V. On the issue of organizing effective legal relations with the World Customs Organization: recommendations for customs and economic unions // Problems of Economics and Legal Practice. – № 4. – 2022 URL: https://www.urvak.ru/articles/probl-8028-vypusk-4-k-voprosu-ob-organizatsii-effe/    

[6]Mozer S.V. Analysis of the legal instruments of the European Union governing its legal status in the World Customs Organization. // Socio-political sciences. – № 5. – 2022

[7]The systematization of all stages and activities implemented by the EU are analyzed in the article by Mozer S.V. Organizational and legal aspects of the membership of the European Communities in the World Customs Organization as a precedent for customs and economic unions // Socio-political sciences. – № 4. – 2022 . URL: https://www.urvak.ru/articles/sotsia-4366-vypusk-4-organizatsionno-pravovye-aspe/

[8]Convention Establishing a Customs Co-operation Council. WCO. URL:  https://www.wcoomd.org/en/about-us/legal-instruments/~/media/7E31EB9C9DC24D7984C217508F05D9E8.ashx    

[9] Convention Establishing a Customs Co-operation Council. WCO. URL:  https://www.wcoomd.org/en/about-us/legal-instruments/~/media/7E31EB9C9DC24D7984C217508F05D9E8.ashx

[10] Point 38. Membership Request from the European Community. (Item X on the Agenda – Other business). Policy Commission. 45th session . SP0071E1. Brussels, 31 May 2001. – P.8.

[11] Point 91. Report of the Policy Commission.  45th session. SP0075E2. Brussels, 27 June 2001. – P.14.

[12] Point 31. Membership Request from the European Community. (Item X on the Agenda – Other business). Policy Commission. 45th session . SP0071E1. Brussels, 31 May 2001. – P.7.

[13] Point 89. Report of the Policy Commission.  45th session. SP0075E2. Brussels, 27 June 2001. – P.14.

[14] Point 101.Ibid. – P.15.

[15] Point 91. Ibid. – P.14.

[16] On basis unanimous solutions Council European Communities March 19 , 2001  (Decision by the Council of the European Communities of 19 March 2001).

[17]Information is provided on the current status of the European Community in relation to the WCO, the provisions adopted in the two organizations (FAO and WTO) of which the European Community was a member at that time, as well as on the legal issues raised in the request for European Community membership.

[18]Moser S.V. Organizational and legal aspects of the membership of the European Communities in the World Customs Organization as a precedent for customs and economic unions // Socio-political sciences. – № 4. – 2022 URL: https://www.urvak.ru/articles/sotsia-4366-vypusk-4-organizatsionno-pravovye-aspe/

[19]With the participation of the Director General of the European Commission, responsible for taxation and the customs union.

[20]Mozer S.V. Organizational and legal aspects of the membership of the European Communities in the World Customs Organization as a precedent for customs and economic unions // Socio-political sciences. – №  4. – 2022 URL: https://www.urvak.ru/articles/sotsia-4366-vypusk-4-organizatsionno-pravovye-aspe/

[21]The most frequently raised issue during the discussions.

[22] Point 2.1. Annex V to doc. SP0102E1. Membership Request from the European Community. Policy Commission. SP0102E1. 47th session. Brussels, 31 May 2002. – P.V/1.

[23] Point 2.1. Annex V to doc. SP0102E1. Membership Request from the European Community. Policy Commission. SP0102E1. 47th session. Brussels, 31 May 2002. – P. V/1.

[24]Germany, Austria, Belgium, Denmark, Spain, Finland, France, Greece, Ireland, Italy, Luxembourg, Netherlands, Portugal, United Kingdom of Great Britain and Northern Ireland, Sweden. Ongoing accession negotiations with Bulgaria, Cyprus, Estonia, Hungary, Latvia, Lithuania, Malta, Poland, Czech Republic, Romania, Slovakia, Slovenia foresee a union of 27 member states in the near future (Turkey is also a candidate country) // Germany . Austria , Belgium , Denmark , Spain , Finland , France , Greece , Ireland , Italy , Luxembourg , the Netherlands , Portugal , the United Kingdom of Great Britain and of Northern Ireland , Sweden . The current accession negotiations with Bulgaria, Cyprus, Estonia, Hungary, Latvia, Lithuania, Malta, Poland, the Czech Republic, Romania, Slovakia, Slovenia allow to foresee, in the near future, a union of 27 Member States (Turkey is also a candidate country).

[25] Point 2.9. Annex V to doc. SP0102E1. Membership Request from the European Community. Policy Commission. SP0102E1. 47th session. Brussels, 31 May 2002. – P. V/4.

[26] Ibid.

[27] Point 2.11. Annex V to doc. SP0102E1. Membership Request from the European Community. Policy commission . SP 0102 E 1.47th _ session . Brussels , May 31 , 2002. – P. V /5.

[28] Ibid. Point 2.12.

[29] Ibid. Point 2.13.

[30]Moser S.V. Organizational and legal aspects of the membership of the European Communities in the World Customs Organization as a precedent for customs and economic unions // Socio-political sciences. – № 4. – 2022 URL: https://www.urvak.ru/articles/sotsia-4366-vypusk-4-organizatsionno-pravovye-aspe/

[31]Mozer S.V. Organizational and legal aspects of the membership of the European Communities in the World Customs Organization as a precedent for customs and economic unions // Socio-political sciences. – №  4. – 2022 URL: https://www.urvak.ru/articles/sotsia-4366-vypusk-4-organizatsionno-pravovye-aspe/

[32]Mozer S.V. Organizational and legal aspects of the membership of the European Communities in the World Customs Organization as a precedent for customs and economic unions // Socio-political sciences. – № 4. – 2022 URL: https://www.urvak.ru/articles/sotsia-4366-vypusk-4-organizatsionno-pravovye-aspe/

[33] USA position.

[34] Point 20. Membership Request from the European Community. Item XI on the Agenda. Policy Commission. 46th session. SP0085E1. Brussels, 6 November 2001. – P.4.

[35]Position of the WCO Secretariat.

[36]US position.

[37] Point 107. Report of the Policy Commission. 46th session. SP0090E1. Brussels, 29 January 2002. – P.20.

[38] Ibid.

[39] Ibid.

[40]The EEC creates a legal framework for effective coordination of the actions of the customs services of the EAEU countries with the WCO. June 8, 2022 URL: http://customs-academy.net/?p=14387 ; The EEC considered approaches to the formation of an action plan for organizing cooperation with the WCO// EEC News, 09/27/2022. URL: http://customs-academy.net/?p=14516