On 26 March 2026, the European Parliament and the Council reached an agreement on the most comprehensive and ambitious reform of EU Customs Law since 1968. The agreement finalizes negotiations after three years since the European Commission published its draft proposal in 2023 (see our prior blog post here). The agreement sets the course for a fundamental transformation of the EU customs framework from a declaration-based system to a data-driven, risk-focused and highly digitized model.
The reform will repeal the current Union Customs Code (Regulation (EU) No. 952/2013) and replace it with a new Regulation establishing a new Union Customs Code (“nUCC”). The nUCC establishes the EU Customs Authority, creates the EU Customs Data Hub and significantly reshapes the treatment of e-commerce and low-value imports. This post highlights the key elements of the agreement and what they mean for importers, exporters, platforms and other operators operating globally.
- Establishment of the EU Customs Authority
A central element of the nUCC is the establishment of the EU Customs Authority, a dedicated operational body designed to strengthen the coordinated governance of the EU Customs Union. The EU Customs Authority will be headquartered in Lille, France.
The EU Customs Authority will not replace national customs administrations, which will remain responsible for day‑to‑day controls and enforcement. Instead, it will operate at Union level, with a mandate to enhance consistency and effectiveness across EU Member States. Its tasks include developing and performing EU‑wide risk analysis, issuing control recommendations to national customs authorities, and carrying out periodic threat assessments. The EU Customs Authority will also play a central role in coordinating customs‑related crisis management, supporting the implementation of restrictive measures (sanctions), and developing training content for customs officers across the EU by pooling expertise and best practices. Overall, this represents a structural shift towards more centralized governance and more harmonized enforcement within the EU customs framework.
- The EU Customs Data Hub
The reform further introduces the EU Customs Data Hub, a central trader interface for the collection, processing, and exchange of data relevant to the application of EU customs legislation. The EU Customs Data Hub is intended to replace the current fragmented landscape of (at least 111) national customs IT systems with a single EU‑level point of data submission and control. Under the new system, importers and exporters will provide real‑time data to the EU Customs Data Hub, rather than filing transaction‑by‑transaction customs declarations across multiple Member States. Managed by the EU Customs Authority, the Data Hub aims to significantly enhance the ability of customs authorities to supervise and control goods entering and leaving the EU, while enabling a more consistent and coordinated EU‑wide risk management approach.
The agreed text provides for a phased implementation of the EU Customs Data Hub:
- From 1 July 2028, importers for distance sales and persons using the Import One‑Stop Shop (IOSS) scheme will be required to provide or make available data via the EU Customs Data Hub when placing goods under the customs warehouse procedure in a customs warehouse for distance sales or under release for free circulation.
- From 1 March 2031, economic operators will be able to use the EU Customs Data Hub on a voluntary basis.
- By 1 March 2034, the EU Customs Data Hub is expected to be fully operational, at which point its use will become mandatory for all economic operators.
- New Trust and Check Trader status
The reform introduces a new “Trust and Check” trader status, which builds on the existing Authorised Economic Operator (AEO) framework. Trust and Check traders will be required to grant customs authorities access to their electronic systems containing records of compliance and goods movements, reflecting a significantly higher level of transparency and compliance. In return, this enhanced transparency is rewarded with tangible benefits, including maximum procedural simplifications, fewer physical controls, and, in some cases, the ability to release goods themselves under customs supervision.
These advantages create strong incentives for eligible businesses to reassess their customs governance, internal controls and data capabilities at an early stage. At the same time, the existing AEO program will remain in place, ensuring that trusted‑trader status continues to be accessible to small and medium‑sized economic operators that may not meet the requirements of the Trust and Check regime.
- New e-commerce framework:
Under the nUCC, a fundamental shift takes place in the way e‑commerce goods are treated under the EU customs framework. The reform responds to the exponential growth of direct‑to‑consumer imports into the EU, with millions of low‑value parcels entering the Union each day. This development has placed EU customs authorities under significant strain, as the sheer volume of consignments makes effective supervision increasingly difficult. At the same time, the surge in e‑commerce imports has been accompanied by elevated compliance and safety risks, as a substantial share of goods placed on the EU market fail to meet product safety, environmental, or other regulatory requirements. To address these challenges, the customs reform introduces a package of structural measures aimed at improving enforceability, reallocating compliance responsibilities within the supply chain, and ensuring that customs authorities are adequately resourced to manage e‑commerce flows. Many of these new measures are tied to the VAT concept of distance sales, further aligning VAT rules with the customs framework.
The most important e-commerce changes are mentioned below:
Removal of the low-value consignment relief
One of the most impactful changes concerns the removal of the customs duty exemption for low‑value consignments. Under the current framework, goods with an intrinsic value not exceeding EUR 150 benefit from a customs duty relief. As part of the broader EU customs reform, this low‑value consignment relief will be removed, meaning that customs duties will apply regardless of the value of the goods. In order to bridge the period leading up to the full abolition, a temporary mechanism will be introduced as of 1 July 2026. From that date, a flat customs duty of EUR 3 per item will be levied on all IOSS packages. Once the EU Customs Data Hub is operational (July 2028), the interim duty will be replaced by the MFN duties.
The importer for distance sales
Under the agreed text, for distance sales, either the person supplying or the person facilitating the distance sale (as opposed to the customer) is considered the importer. This so-called importer for distance sales assumes all corresponding responsibilities, including responsibility for the customs debt, compliance with all relevant product compliance regulations and providing, keeping and making available records of such compliance.
Customs valuation for distance sales
The nUCC also introduces targeted changes to the customs valuation framework for distance sales. Under the agreed text, the transaction value for goods purchased in distance sales shall be determined on the basis of that sale. This means that the customs value will be determined on the basis of the price paid by the customer.
The Union handling fee
The nUCC establishes a Union handling fee for every item sold in distance sales. This Union handling fee should cover the costs of checking data, risk-analysis and the relevant infrastructure and control (including the services rendered by the EU Customs Authority). The fee applies per item, which is defined as “one or more goods in a consignment sharing the same tariff classification, description and, if provided in accordance with the data requirements applicable to the relevant customs declaration or to the data to be provided or made available to the customs authorities, origin.”
The Union handling fee should be paid by the importer for distance sales or, where those provisions not yet apply (before July 2028), the declarant. This would typically be the person entitled to use IOSS. The amount of the fee will be set by the European Commission in a Delegated Act. The reform introduces a new type of customs warehouse specifically for distance sales for which a lower Union handling fee would apply. A customs warehouse for distance sales should incentivize bulk packaging, making the flow of parcels more manageable for the customs authorities. This warehouse option is only available to economic operators with Trust and Check status.
The Union handling fee will apply 10 days after entry into force of the European Commission’s Delegated Act establishing the amount of the fee. The Delegated Act shall be adopted 10 days after the publication of the nUCC in the EU Official Journal.
- Harmonized penalties framework
The reform establishes a minimum list of customs infringements and introduces a harmonized, non‑criminal penalty framework for certain customs violations. By aligning penalties for non‑compliance across the European Union, the reform seeks to discourage so‑called “border shopping” by economic operators. For systematic non‑compliance in case of distance sales, the framework provides progressively escalating sanctions. These may include the suspension of the release for free circulation of all goods imported by the non‑compliant operator and, in specific circumstances, the temporary suspension of access to the operator’s online interface. In addition, the importer concerned will be classified as a high‑risk operator in the EU Customs Data Hub, resulting in the loss of any trusted status and facilitations.
At the same time, the nUCC does not harmonize national procedural rules governing administrative penalties, nor does it prescribe which authorities are responsible for imposing such penalties, leaving these aspects to the individual EU Member State.
- Timeline
The reform will be implemented on a phased basis. Most provisions will apply 12 months after publication in the Official Journal. The majority of the e‑commerce–specific measures, as well as the establishment of the EU Customs Authority and the EU Customs Data Hub, are expected to take effect as of July 2028. The Union handling fee will apply earlier (10 days after entry into force of the European Commission’s Delegated Act establishing the amount of the fee). Formal adoption of the reform by the co‑legislators, the European Parliament and EU Council, is currently anticipated after this summer.
The Baker McKenzie global customs and trade team will continue monitoring developments with respect to the EU customs reform and will report on significant updates. Should you wish to discuss the implications of the reform for your operations, please do not hesitate to contact a member of our team.
