The Council of the EU and the European Parliament have reached a political agreement on the most far-reaching overhaul of the bloc’s customs framework in nearly six decades, with Finance Minister Makis Keravnos describing it as the biggest reform since the creation of the Customs Union in 1968. 

Speaking on behalf of the Cyprus Presidency, Keravnos said the deal would help the EU respond to new geopolitical realities while safeguarding economic security.  

He added that the new EU customs code would provide a modern set of tools to facilitate trade, ensure the proper collection of customs duties and offer the legal certainty required by businesses and authorities alike. 

The reform marks a major shake-up of one of the EU’s oldest and most important integration projects.  

Set up in 1968, the EU Customs Union applies a common tariff to goods entering the bloc from outside, while allowing goods that have cleared customs to move freely within the EU without further tariffs or border checks.  

The current union customs code came into force in 2016. 

However, the system has come under growing strain in recent years. Customs authorities have had to cope with a sharp rise in e-commerce, tougher checks linked to product safety, environmental and firearms rules, and the need to react more quickly to sanctions, geopolitical tensions and crises such as the Covid-19 pandemic. 

According to the European Commission, around 5.9 billion low-value items entered the EU in 2025, with more than 90 per cent coming from China, adding to pressure on customs systems across the bloc. 

At present, importers must deal with 27 national customs administrations, more than 111 separate IT systems and interfaces, and a structure which still lacks a central EU customs database or full EU-wide supply chain supervision.  

Brussels has warned that this fragmented model leaves the bloc exposed to risks ranging from lost public revenues and financial fraud to drug trafficking, criminal activity and dangerous products reaching the market. 

European Commissioner for Trade and Economic Security, Interinstitutional Relations and Transparency Maros Sefcovic welcomed the agreement, saying it opened “a new chapter” for the customs union. 

He said the reform marked a transformative step towards a more integrated and modern customs system, allowing the EU customs union to operate more effectively as a single system.  

By creating a central data management platform and improving coordination among member states, he added, the bloc would be better placed to protect the single market, strengthen competitiveness and reinforce economic security. 

At the centre of the package is a new EU customs data hub, which will act as a single entry point for customs information across the bloc.  

Instead of submitting the same information repeatedly to different national systems, businesses will be able to follow a submit-once-only principle, reducing paperwork and cutting compliance costs. 

The Commission says the reform is designed to digitalise, simplify and lower the cost of customs processes, while making better use of data to improve supervision and risk analysis.  

In practice, customs authorities would have access to real-time information on goods entering the EU and would be able to step in before loading, at the border, during transport or at the final destination. 

The package also introduces simplified procedures for trusted traders under a “trust and check” model, meaning transparent and compliant supply chains would face fewer formalities and less direct intervention.  

Duties could also be paid periodically rather than at import, while a review after the hub becomes operational will examine whether some of those simplifications can be extended more widely. 

A major institutional change is the creation of a new European customs authority, which will be based in Lille, France, after the European Parliament and the Council selected the city on March 25, 2026. The authority will be central to the reform, bringing together expertise and resources from member states and the Commission. 

Its job will be to develop, operate and maintain the EU customs data hub, coordinate EU-level risk management, support cooperation among national customs administrations and help customs authorities work more closely together by sharing knowledge, analysing trade flows, identifying threats and coordinating checks in real time. 

National customs authorities will still carry out their own risk analysis, but Brussels says the authority, together with the hub, will significantly improve intelligence and help tackle “border shopping”, where traders exploit weaker points along the EU’s external border to get goods into the single market. 

Particular attention is being paid to e-commerce, which has become one of the customs system’s biggest pressure points. Under the new regime, online platforms and sellers will become “importers for distance sales”, making them responsible for ensuring that customs duties and VAT are paid at the point of purchase and that products comply with EU rules. 

That would mark a significant shift from the current system, under which individual consumers often end up carrying the responsibility when they buy goods online from third countries. 

Member states had already agreed in December 2025 to scrap the customs duty relief threshold for goods worth less than €150, which currently allows such items to enter the EU duty-free.  

From July 1, 2026, a temporary €3 customs duty is due to apply to items in these small parcels, most of them entering through e-commerce channels. 

Alongside that, a handling fee is due to apply by November 2026 at the latest, reflecting the growing cost customs authorities face in processing these imports, including data checks, risk analysis and documentary or physical controls where needed.  

From 2028, where the importer operates a customs warehouse, that fee is expected to be lower because checks will be easier to carry out. 

The agreement also aims to improve consumer protection by giving customs a clearer and earlier picture of what is being sold online into the EU.  

Once distance sellers begin logging sales into the customs data hub, authorities will be able to assess risks before goods even arrive at the border. 

For businesses more broadly, Brussels says the new system should cut both the time and cost involved in clearing goods through customs.  

The Commission estimates that the reform could reduce business compliance costs by €2.7 billion a year, while member states could save more than €2 billion annually in IT development and maintenance costs as the centralised infrastructure gradually replaces national systems. 

The rollout will happen in stages. The Commission will begin building the EU customs data hub for e-commerce, which is expected to become operational in 2028.  

The hub will then open to other businesses in 2031, before expanding to all traders in 2034, when it is due to become the single mandatory EU customs entry point. 

The legislation will now move to the finalisation of technical details and formal approval by the co-legislators.

Once published in the Official Journal of the European Union, it will enter fully into force 12 months later.