Commission Report 2002 (Hungary)

• Progress since the last Regular Report
• Overall assessment
• Conclusion

Chapter 25: Customs union

Progress since the last Regular Report

Hungary has achieved further progress in the customs field since the last Regular Report.

In the area of the customs acquis, the provisions on customs warehousing, temporary importation, valuation and non-commercial consignments were further aligned with the acquis in January 2002. Since January 2002, Hungary has also modified its legislation for the transport of goods under the common transit simplified rail procedure. During the reporting period, Hungary continued to strengthen the administrative and operational capacity of the Hungarian Customs and Finance Guard. Hungary has in particular taken significant steps to revitalise the development of interconnectivity enabling systems. The Hungarian IT system (VAMKER - computerised customs declaration system) contains all the information relating to customs procedures. Preparations for joining the CCN/CSI system are under way.

A National Inter-Operability Implementation Strategy was finalised in January 2002, and additional staff (40) was appointed by the Ministry of Finance for the implementation of the strategy within the next two years.

The Chemical Testing Institute was empowered to take decisions in first instance. Its laboratory facilities were improved with a mobile laboratory service, and the staff level (27) seems sufficient to implement the obligations deriving from the Binding Origin Information/Binding Tariff Information system. Hungary and the Czech and Slovak Republics signed a tri-lateral co-operation agreement between customs laboratories in January 2002. As regards border management, following their modernisation several border points were opened in 2002 on the future external frontier of the EU at Letenye on the border with Croatia (March), at Röszke on the border with Yugoslavia (April), at Záhony on the border with Ukraine (July) and at Tartand and Gyula on the border with Romania (July).

In the framework of a Memorandum of Understanding between the Hungarian Customs and Finance Guard and the General Inspectorate for Consumer Protection, two working groups, on IT and market surveillance, were set up.

Training of customs staff on interception of nuclear and radioactive materials at border crossing points was carried out in the reference period.

Overall assessment

In general, Hungary is already well advanced in this area. Hungarian legislation has already to a large extent been aligned with the acquis since 2000. Hungary should continue its efforts to complete alignment in the area of customs free zones, the number of which needs to be reduced significantly. Adaptation of the preferential rules of origin used under Hungary''s Generalised System of Preferences (GSP) to those of the Community will only take place at the time of accession.

As regards the administrative and operational capacity to implement the acquis, Hungary continued to train customs officers and to upgrade the relevant equipment. It already has experience in applying provisions and procedures that are similar and in some cases identical to those of the Community.

As with most other candidate countries, however, certain commercial policy measures will not apply until accession. This has consequences for the context in which the provisions in areas such as non-preferential origin, inward and outward processing are applied. For example, in Hungary, the Binding Origin Information system is currently only used for preferential origin, whereas in the Community it is also used for non-preferential origin. Systems like quotas, suspensions and the integrated tariff, which are not currently managed electronically in Hungary as in the Community, are being computerised.

Continuous efforts are still needed in these fields, including language training and training on the relevant areas of copyright and phyto-sanitary legislation. Concerning the further development of the IT systems, major problems remain to be addressed. However, subject to work proceeding as planned, Hungary should be in a position to meet its obligations in a relatively short term.

Conclusion

In its 1997 Opinion, the Commission concluded that Hungary was making a major effort to align its organisation and staff to the duties that have to be carried out by a modern customs organisation. The Commission added that, if Hungary reinforced its efforts, particularly in relation to project management in the computerisation area, Hungary should be ready to fulfil the responsibilities of an EU customs administration within the next few years.

Since the Opinion, Hungary has achieved steady progress in aligning with the acquis in this area has also gradually developed and reinforced the necessary administrative capacity. The alignment of the customs legislation with the acquis is now almost completed and administrative capacity is at a relatively advanced stage, although a number of issues remain to be tackled in this regard.

Negotiations on this chapter have been provisionally closed. Hungary has been granted a transitional period until the end of the third year following the date of accession or 31 December 2007, whichever is the earlier, for compliance with the Common External Tariff as regards the opening of a yearly tariff quota for aluminium, not alloyed. Hungary is generally meeting the commitments it has made in the accession negotiations in this field.

In order to complete preparations for membership, Hungary's efforts should now focus on ensuring full interconnection of its national systems with the EC customs IT systems, and on strengthening the customs services` capacity to combat fraud and economic crime, in close co-operation with other enforcement bodies. As regards the alignment with the acquis, Hungary has to take the necessary steps to prepare for the application of measures and provisions that will be introduced only at the date of accession, including in relation to free zones.

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