Creative spirit breathing life into Europe’s customs union

Date: 08/10/1998

The recently appointed director-general of the European Commission department responsible for coordinating taxation policy and enforcing customs compliance talks to Rory Watson about the challenges facing his team

TO THE casual observer, changing a department's title from 'customs' to 'customs union' is hardly a radical administrative overhaul.

The name may be a little longer and fancier, but the basic nature of the work surely remains the same.

Michel vanden Abeele would beg to differ and differ very strongly. He believes adding the word 'union' to the title encapsulates a new approach and a new role for the European Commission's Directorate-General for taxation and customs union (DGXXI), more in keeping with the challenges that lie ahead than with those of the past.

"The intention was to make the political dimension of what is more than just countless rules and tariff lines on paper more evident. We are trying to create a new spirit," he explains.

When Vanden Abeele took over as director-general of DGXXI last November, he found a department well versed in the practicalities of managing the EU's complex customs arrangements. This was no surprise, given that it had accumulated some 40 years of experience in operating one of only two policy areas, along with agriculture, where the Commission had acquired total responsibility.

But, according to Vanden Abeele: "There was a lack of vision of how to manage the customs union." He and his Commissioner Mario Monti are now setting out to remedy that.

With 25 years' service in the Commission in a wide range of posts, Vanden Abeele is well equipped to wield the new broom. He has been a political adviser to several Commissioners over the years, including three stints as chef de cabinet, dealing with issues ranging from the North-South dialogue to capital markets and monetary union.

More recently, he was deputy director-general in charge of the Union's annual budget. He was then promoted to head the Directorate-General for enterprise policy, distributive trades, tourism and cooperation (DGXXIII) before taking up his current post.

Vanden Abeele has a clear vision of the challenge which lies ahead. "A customs union must show that we are a real union and should be at the service of the European Union's general policies," he says. "Up to now we have largely dealt with tariffs. But more and more, the international community is introducing new ideas such as a social clause affecting imports and perhaps, tomorrow, an environmental clause."

Indeed, he even suggests that the Union might at some point in the future insist that its concerns over the growing problem of drug abuse are reflected in its commercial ties with third countries, making any preferential treatment dependent on their readiness to clamp down on the illegal export of narcotics.

The 56-year old Belgian is not suggesting that his department is preparing to introduce such requirements. But it would be up to his staff to adjust the Union's customs procedures in line with any political decision taken by member states.

The role of his officials in implementing preferential trade agreements, which are used by the Union as a way of encouraging economic development and political stability in certain countries, will continue to be to provide the appropriate origin and cumulation rules to match wider political commitments.

A MORE imaginative approach is also being demanded by changes in the environment in which customs policy must now operate. International negotiations in the World Trade Organisation are reducing and eliminating tariffs, and the service's earlier prime function of collecting duties will soon be limited to just a few groups of goods.

But the downsizing of one task will be more than compensated for by another.

"Instead of applying tariff rates, customs will concentrate on checking compliance of the goods with all sorts of rules essential to the functioning of the internal market," explains Vanden Abeele.

Customs services will also have a growing role in the development of intergovernmental cooperation linking national police and judicial authorities in the fight against crime, drugs and illegal immigration. Vanden Abeele is reluctant to be drawn into details, but confirms that this is an area which is already looming larger in his department's work.

A more immediate priority, however, is enlargement and the preparations required for the day when the Union's external frontiers will no longer be manned by German and Austrian customs officials, but by their Hungarian and Polish counterparts.

"The customs union is at the forefront of the EU's pre-accession strategy due to its importance in protecting our external borders. Some people are afraid of what will happen when we enlarge and these borders shift to the East," he acknowledges.

Special screening talks organised by the Commission at the end of last month examined the candidate countries' ability to align their own customs legislation with the Union's and emphasised the operational changes required to put the rules into practice. These involve training trainers, ensuring newly recruited officials are sufficiently well educated and underlining the need for high standards of professional morality.

Vanden Abeele is keen that this process should lead not just to the establishment of efficient and modern customs services, but also foster the spirit of trust and partnership which, to his evident delight, he sees between Commission and national customs officials.

"It is about confidence-building. Commission and national officials meet a lot in Brussels and there is a clear willingness to work together. I want to establish the same relationship and team spirit with the candidate countries," he says.

It is not just in the applicant states that the Commission is deploying its customs skills beyond the EU's borders.

Two small teams are currently in Albania and the former Yugoslavia providing the local administrations with the necessary technical assistance to bring customs legislation and practices up to standard.

This new breeze blowing through the world of customs also involves trying to tighten up preferential trade rules so that countries benefiting from commercial concessions do not abuse them by issuing false certificates of origin.

DGXXI has an even more painstaking task on the horizon: drawing lessons from these developments and updating the code which describes different products in great detail and classifies them according to the duty to be paid.

There is now a growing recognition that the code needs to be simplified and uniformly interpreted. If this is not done, the Union will continue to face embarrassing situations where one member state may deliberately, and unfairly, apply the code in such a way that higher duties are levied on unwelcome imports.

WHILE the change in customs policy is the most marked innovation Vanden Abeele has brought to his new department, it is not the only one.

He spent his early months carrying out major internal reorganisation and drafting a new mission statement, following the decision to house both branches of taxation - direct and indirect - under the same roof in the Commission for the first time.

The discussions preceding the move of responsibility for direct taxation away from the Directorate-General for the internal market (DGXV) were remarkably free of the usual turf battles which bedevil administrative reorganisations, mainly because Monti was in charge of both departments.

It was a logical change and one which coincides with a cautious optimism that some of the log-jams which have made EU taxation policy a virtual no-go area are beginning to disappear.

"The decision has brought a new spirit to the directorate-general. I sense there is a feeling in member states that something has to be done to create better coherence and coordination - I would not say harmonisation - on taxation. We have relaunched the machinery and we are on the move again," says Vanden Abeele.

It is too early to say whether the director-general's hunch on the future of taxation policy will prove correct. But on the customs front, there is no doubting the winds of change which are already beginning to blow through his department and the Commission as a whole.

Interview with Michel van den Abeele, the new Director-General of DG XXI of the European Commission (Taxation and Customs Union).