EU Customs Reform: One Step Closer

On 27 June 2025, the Council of the European Union adopted its negotiating mandate for a major update to the Union Customs Code (UCC). This marks a decisive shift from technical discussions to formal negotiations with the European Parliament through the trilogue process.
Member States agreed on key elements such as the establishment of a new EU Customs Authority, a shared Customs Data Hub, advanced risk management tools, simplified procedures for trusted traders, duties on low-value parcels, and a handling fee for e-commerce goods.

The Origins and Scope of the EU Customs Reform

The origins of this reform lie in the Commission’s landmark proposal from 17 May 2023, aimed at modernising the EU Customs Union. Faced with a massive boom in e-commerce, rising complexity in product standards, and geopolitical pressures, the reform sets out a future-ready, data-driven approach:

• EU Customs Authority & Data Hub: Centralising customs data and risk assessment to streamline operations and reduce national system costs by approx. €2 billion/year
• Trust & Check scheme: Expanding benefits to the most reliable trader through tech-driven real-time clearances and minimised customs interventions
• E‑commerce overhaul: Making platforms responsible for VAT/duties collection at point-of-sale, abolishing the €150 de minimis threshold for customs duties, simplifying low-value duty categories

Key Measures Agreed by the Council

The Council’s mandate confirms and clarifies several pivotal measures, retains the existing Authorised Economic Operators (AEO) scheme, and introduces a handling fee for low-value distance sales.

One important clarification is that the proposed reform includes both the abolition of the €150 customs duty exemption for low-value goods and the possible introduction of a separate handling fee. These two measures are complementary, not alternatives. Removing the threshold will ensure that all goods imported into the EU are subject to customs duties, addressing widespread undervaluation practices in e-commerce. In parallel, the Commission has proposed a non-discriminatory handling fee, to be paid by online platforms or sellers, to support customs authorities in managing the vast volume of small parcels. While still under discussion, this fee is not intended to replace customs duties, but rather to reinforce enforcement capacity and help finance modernised customs operations. The exact structure and amount of this fee will be determined during upcoming trilogue negotiations.

Next Steps Towards The New Union Customs Code (UCC)

With the Council’s position secured, trilogue talks with the European Parliament will commence soon. Certain areas, such as the exact structure of the handling fee, the simplified tariff system, and the designation of the seat of the EU Customs Authority, will require further negotiation.

Implementation timelines remain aligned with the original 2023 vision: e‑commerce onboarding from 2028, expanding to all traders by 2032, with mandatory full deployment by 2038, subject to a mid-term review.

Conclusion

Although not directly tied to customs reform, the EU has simultaneously pressed ahead in trade discussions with the U.S. ahead of the July‑9 deadline on tariffs, reflecting a broader push to stabilise global trade frameworks. The customs reform continues to progress in parallel, alongside developments in related areas such as the VAT in the Digital Age (ViDA) package adopted earlier in 2025.