Main takeaways
EU competitiveness risks being undermined by the proposed customs reform, as it would introduce unworkable burdens for companies
As it stands today, the new Customs Code creates a parallel system that directly conflicts with the EU’s existing legal framework for product safety and liability
The reform of the Customs Union ignores recently enacted legislation – such as DSA, GPSR, and PLD – creating a muddled legal environment that discourages investment
The Single Market is the backbone of the European Union’s economic strength, built on the free movement of goods, services, capital, and people. As its external frontier, the Customs Union plays a pivotal role – ensuring trade with the rest of the world flows smoothly.
Yet a proposed sweeping reform of the EU’s customs framework has raised serious concerns. While the stated goal is to help authorities supervise and control goods entering the EU, the current proposal would just create more chaos.
As interinstitutional negotiations between the European Parliament and the Council move forward, the reform threatens to backfire. Instead of streamlining processes, some of the proposed changes would ironically erode the efficiency of customs authorities and create new barriers instead of predictable trade rules.
The current draft risks running counter to the key priorities that top the EU’s agenda at the moment: boosting competitiveness and cutting red tape. The question now is, will EU policymakers have the courage to correct course before lasting damage is done?
1. How the customs proposal threatens EU competitiveness
Instead of delivering the simplification that was promised, the reform would impose two major – potentially unworkable – burdens on businesses.
First, it would make online marketplaces directly liable for products sold by third-party sellers on their platforms. In practice, this would mean a marketplace could be held responsible for compliance with EU legislation, including product safety rules, even if it did not manufacture or handle the product itself. This liability shift is not only disproportionate, but also unrealistic to implement.
Because it would put online marketplaces in an impossible position: either assume full liability for millions of products whose manufacturing and compliance they cannot control, or block non-EU sellers from accessing the Single Market altogether. The first represents an unmanageable risk, while the latter would drastically reduce consumer choice and stifle competition.
Second, the challenges are even more pronounced for non-EU sellers. The current text would force them to appoint a representative with Authorised Economic Operator (AEO) status for the EU market. But obtaining AEO status is a complex, resource-heavy process. Companies must, among other things: demonstrate full compliance with customs and tax legislation, maintain sophisticated records, prove financial solvency, employ staff with customs qualifications, and implement stringent security and safety measures.
The goal of ensuring that sellers trading in the EU are reliable and safe is indeed valid. However, the proposed blanket requirement is a disproportionate, one-size-fits-all approach. Instead of targeting a narrow category of high-risk sellers, it would create unnecessary barriers for a broad range of legitimate global businesses – including independent creators, specialised manufacturers, and innovative start-ups.
The negative impact would be felt across the EU. Excluding legitimate companies that play by the rules of the EU market, simply because they have a non-European passport, would greatly limit consumer choice. This would deprive Europeans of unique and specialised goods, and consolidate the market around a few incumbents. It reduces competition, stifles innovation, and drives up prices. The requirement for professional customs qualifications, in particular, would inherently favour those with more resources and in-house experience.
2. Reform contradicts established EU liability rules
Beyond its many practical flaws, the current draft is also unworkable from a legal standpoint. A cornerstone of any sound regulatory framework is certainty – giving businesses the predictability that allows them to invest, innovate, and grow. This proposal, however, would create a parallel system that directly clashes with the EU’s existing rules on product safety and liability.
Indeed, the EU already has a sophisticated legal framework in this regard, consisting of the Digital Services Act (DSA), the General Product Safety Regulation (GPSR), and the Product Liability Directive (PLD). Together, these carefully crafted regulations assign liability across the supply chain based on the roles of different economic actors – ensuring that there is always a responsible party for products entering the EU.
The Digital Services Act (DSA) governs online content. It is concerned with the information on a product listing, such as its description, for example. Under the DSA, online marketplaces must make best efforts to prevent unsafe or counterfeit goods from being listed. At the same time, the DSA does not hold marketplaces liable for third-party listings until they are notified of a problem and fail to act swiftly.
Likewise, product liability is extensively covered by the PLD and the GPSR. The PLD introduces a clear cascade of liability for unsafe products, starting with the manufacturer and then moving to EU-based importers or authorised representatives for the EU. The GPSR, on the other hand, involves online marketplaces only as a last resort. For example, to help authorities with recalls or warnings if no other EU-based operator can be held responsible.
With this comprehensive framework already in place, a responsible party is always accountable. Introducing a conflicting liability regime via the Customs Code would thus only create confusion – and the timing is particularly baffling. The revised PLD still needs to be transposed into national law by most EU Member States, and the GPSR only came into effect as recently as December last year. Businesses and authorities alike have not yet had the chance to adapt, let alone to evaluate the effectiveness of these new frameworks.
Conclusion
Creating or revising legislation in isolation is a recipe for poor outcomes. And the ongoing EU customs reform is no exception to that rule. It threatens to dismantle the carefully constructed EU product liability framework that we have today – replacing coherence with contradiction.
As the European Parliament and the Council enter the final stages of negotiations, they now stand at a critical juncture. For this reform to succeed, co-legislators must urgently remove the new, conflicting liability provisions, and instead align the Customs Union reform with the frameworks already established under the DSA, GPSR, and PLD.
A smarter system would impose strict requirements, such as AEO status, only on high-risk sellers – ensuring the market remains accessible and competitive for legitimate businesses. The goal should be to promote cohesion and reward companies that play by the rules, not to create chaos.