EU Advances Customs Reform with New Authority and Duties

EU Customs Overhaul: Tackling the E-commerce Tsunami

The European Union is embarking on its most ambitious customs reform since the creation of the Customs Union in 1968, responding to an unprecedented flood of e-commerce packages that has overwhelmed traditional border controls. With more than 12 million packages entering the EU daily and only 0.0082% of imported products being checked, according to European Commission data from August 2024, the system is clearly struggling to keep pace with modern trade patterns.

The Reform Package: New Duties and Digital Transformation

In a landmark decision on December 12, 2025, EU member states approved a temporary €3 customs duty on low-value e-commerce parcels valued below €150, effective from July 2026. This measure, announced by the European Commission, aims to level the playing field between traditional EU retailers and foreign online platforms, particularly those from China that have benefited from the current duty-free threshold.

The reform represents a comprehensive approach to modernizing the European Union Customs Union. Key elements include:

• A €2 handling fee for packages under €150 starting in April 2026
• Complete abolition of the €150 duty-free limit by 2028
• Establishment of a new EU Customs Authority (EUCA) from 2026
• Creation of an EU Customs Data Hub to replace fragmented national IT systems

'Safer trade means a safer Europe,' declared Polish Finance Minister Andrzej Domański, emphasizing that a 'strong and resilient customs union guarantees the protection of the internal market, consumer safety, and stable economic development.'

The EU Customs Authority: Nine Cities Compete for Headquarters

The centerpiece of the reform is the new EU Customs Authority, which will serve as a central hub supporting national customs agencies. According to the European Commission's selection process, nine member states have submitted applications to host the authority by the November 27, 2025 deadline:

Belgium (Liège): 'Liège is a strategic choice for Europe, a major logistics hub with its cargo airport, its river port and its multimodal connectivity, at the heart of trade flows,' said Wallonia's Economy Minister Pierre-Yves Jeholet. The city's airport handles high volumes of small parcels, providing practical insights into e-commerce challenges.

France (Lille): Located just 30 minutes from Brussels, Lille offers proximity to EU institutions. 'Located at the crossroads of major European logistics and international trade routes,' noted Minister of Public Accounts Amélie de Montchalin.

Italy (Rome): Italy emphasizes its strategic Mediterranean position and the advanced digitization of its Customs and Monopolies Agency.

Netherlands (The Hague): With its strong international profile and proximity to Schiphol Airport and Rotterdam Port, The Hague offers existing infrastructure and collaboration opportunities with organizations like Europol.

Poland (Warsaw): 'Warsaw is ready, very ready, to take on the task of hosting the headquarters,' assured Finance Minister Andrzej Domański, citing Poland's border management experience and existing cooperation with Frontex.

Other candidates include Croatia (Zagreb), Portugal (Porto), Romania (Bucharest), and Spain (Málaga). The Commission will evaluate applications based on operational readiness, accessibility, training opportunities, and geographical balance, with a decision expected around February 2026.

Implementation Timeline and Expected Benefits

The reform follows a phased implementation schedule:

• 2026: EU Customs Authority established
• 2026: Temporary €2 handling fee and €3 duty introduced
• 2028: EU Customs Data Hub becomes accessible to companies
• 2028: €150 duty-free limit abolished
• 2032: Voluntary use of Data Hub by all businesses
• 2038: Mandatory use of new system

The European Commission estimates the reforms will save up to €2 billion annually by replacing 27 different national customs IT systems with a single EU-wide platform. The Data Hub will streamline reporting requirements through a single interface, fulfilling Commission President Ursula von der Leyen's promise to cut red tape.

Member State Divisions and Future Challenges

Despite broad agreement on the need for reform, divisions remain among member states. The Czech Republic, Slovakia, Ireland, Sweden, and Latvia have resisted French-led proposals for 'Made in Europe' purchasing preferences, arguing they could undermine the single market's openness.

'Europe should protect certain strategic sectors, such as the steel industry, but at the same time remain open to high value-added investments from other countries,' said outgoing Czech Industry Minister Lukáš Vlček after talks with EU counterparts in Brussels.

The European Court of Auditors has warned that uneven application of customs rules across the bloc makes fraud easy, highlighting the urgent need for the harmonized approach the EUCA promises to deliver.

As the EU prepares to implement these sweeping changes, the customs reform represents a critical test of Europe's ability to adapt its institutions to the digital age while maintaining fair competition and protecting its internal market from the challenges of global e-commerce.