The full New Computerised Transit System (NCTS) is the rule since 1 July
The electronic declarations in the new European computerised transit system (NCTS) are now obligatory from 1 July 2005. Before 1 July, it was still possible in some Member States to submit paper based transit declarations besides the new electronic declarations.
The passage to a paperless regime has been and still is a rather painful step on the long process towards the reform and modernisation of the customs regimes. NCTS is a precursor of the further transformation of customs in the EU towards a paperless environment.
The concept of NCTS has seen the light in the mid 90’s as the Commission’s response to the European Parliament’s report about the substantial transit fraud cases. The report revealed that in particular the paper based transit system was vulnerable to customs fraud. The European Parliament suggested to turn the paper based transit system into an automated electronic system. From that moment on, the Commission deployed an ambitious plan to reform the transit system and to implement a ‘New Computerised Transit System’.
Although the ambitions of the Commission with NCTS were praiseworthy, from the outset, the Commission faced some major obstacles. First of all, from an IT technical point of view it was impossible to impose a fully-fledged and centralised system for all Member States and the economic operators. The reason is that he development of an IT system for customs clearance belonged to the national competence of the Member States. Customs legislation provided the Member States the ‘space’ to create their own customs clearance systems. At the time when the development of NCTS started, almost all of the Member States had already own developed customs clearance systems to submit customs declarations, resulting in a patchwork of as many customs systems in the EC as there are customs administrations. The solution was to set up a uniform communication between the Member States’ customs administration and the Commission and to provide the Member States with the software that could be implemented in their own customs clearance systems. The consequence was that companies had to develop and install as many NCTS software as the number of Member States where they were operating. Also the software for the Member States proved to be of suspicious quality.
Another obstacle was the lack of experience both with the Commission as with the Member States to develop and implement such a radical change in the customs compliance process. The Commission did make efforts to communicate with the economic operators through a contact group of interested economic operators (transit contact group). Some Member States however apparently considered the NCTS project as top secret and did not communicate at all, nor with economic operators, nor with customs officers in the field. Also, in many Member States NCTS was considered as a pure IT technical project without any serious attention to effects from an operation point of view. As a result, software developers were only informed at last instance about technical specifications before the actual implementation, there was hardly no possibility for testing the reliability of the systems, there was in some Member States a complete underestimation of the massive numbers of electronic messages the NCTS was creating leading to crashing systems. Also the IT infrastructure of certain Member States was not up to date.
Gradually the growing pains are solved and NCTS should now result in faster discharge of the transit procedure and less possibilities to fraud. To my opinion, however, the most important achievement is that from the mistakes and successes lessons could be learnt for the even more ambitious project of the Commission to change all customs procedures in a full paperless environment.
All in all, after a long implementation period, the results are impressive: the 10 millionth international transit operation since December 2001 took place in June 2005. On average, NCTS handles 600.000 operations per month, totalling more than 7.000.000 operations per year.
Customs transit is one of the cornerstones of European integration. It temporarily suspends duties and taxes that are applicable to goods imported into the European Union or between the European Union and the European Free Trade Association (EFTA). As such, in the current customs environment it facilitates the movement of goods and simplifies customs clearance formalities by allowing traders the possibility to move the goods in a secure way to a more convenient location. It was estimated, previous to the last enlargement, that more than 18 million transit documents were issued in Europe every year, representing billions of euros in duties and charges.