I.1. Operation of traffic

Circulation of goods

When goods enter any country or territory, customs authorities require payment of import duties and other taxes and, where appropriate, apply trade policy measures (such as anti-dumping duties).

This applies even if the goods are only going to cross (transit) the country or territory to a third party. Under certain circumstances, duties and taxes paid may be refunded when the goods leave that country or territory.

This same procedure may need to be repeated in the next country or territory, and the goods may have to complete a series of administrative procedures at each border crossing before reaching their end-use.

Operation of traffic

Transit reduces this management and the associated costs for operators. This is a customs procedure that can be used to transport goods across borders or territories without paying the duties that are usually required when goods enter (or leave) that territory. It only requires a customs formality when leaving the territory covered by the regime.

This transit mode is of particular importance for the EU, as it encompasses a single customs territory and multiple fiscal territories: Goods in transit may move from their point of entry into the Union to their end-use.

There, once the transit is complete, local customs and tax obligations are satisfied, and the goods are released for free circulation or subject to another customs suspension procedure.

A suspensive procedure may also be terminated by placing non-Union goods under the transit procedure for re-exportation from the customs territory of the Union.

Development of a regime applicable to transit

At the end of the Second World War, there was a rapid increase in trade in Europe. It soon became clear that the slow and cumbersome customs procedures in place were a major obstacle and hindrance to trade. In a context of increasing cooperation between nations and under the auspices of the United Nations Economic Commission for Europe, a series of negotiations were launched with the aim of drafting an international agreement to facilitate the movement of goods in Europe.

TIR Convention

The first agreement of this nature—the TIR Agreement—was launched in 1949. It involved the introduction of a guarantee system in several European countries that covered the risks associated with duties and other taxes to which goods circulating in Europe were subject within the framework of international trade operations.

The success of the 1949 Agreement led to the adoption, in 1959, of the TIR Convention⁽²⁾. The Convention was revised in 1975 and currently has 76 Contracting Parties (June 2019).

European Community

Aside from the general development of international trade, it was considered necessary for the European Community, which was in a phase of consolidation and expansion, to establish a specific transit regime to facilitate the movement of goods and customs procedures within its territory.

The community transit regime

The need for the European Community to establish a specific transit regime became more evident in 1968, coinciding with the adoption of the Common Customs Tariff.

The Community transit system, adopted in 1968, facilitated the movement of Community and non-Community goods within the European Community. For the first time, codes T1 were used for non-EU goods and T2 for EU goods.

Trade with EFTA countries

Due to the increase in trade flows and to facilitate the movement of goods within Europe, the Community transit regime was extended to trade with Austria and Switzerland in 1972 through the signing of two agreements. These two countries, which enjoy a privileged geographical location in Europe, were members of the European Free Trade Association (EFTA).

Common transit

The 1972 agreements were replaced in 1987 by two conventions drawn up by the European Community and all EFTA countries.

These agreements were intended to facilitate the import, export and movement of goods between the European Community and the EFTA countries, as well as between the latter.

One of the conventions (the "Convention") established a common transit regime ⁽³⁾.

The other (the " SAD Convention") introduced the simplification of the formalities applicable to import, export and transit operations through the single administrative document (SAD).⁽⁴⁾.

Visegrad countries

On 1 July 1996, the scope of the conventions was extended to the four Visegrad countries (Slovakia, Hungary, Poland and the Czech Republic) until they became members of the EU.

Other common transit countries

The scope of the Convention was also extended to other countries:

• Croatia, 1 July 2012 (until it became an EU Member State);
• Türkiye, December 1, 2012;
• North Macedonia, 1 July 2015;
• Serbia, February 1, 2016;
• the United Kingdom, on 1 January 2021.

Candidate countries

All future Contracting Parties to the Convention are considered "candidate countries".

Many countries have expressed their willingness to join the common transit regime (mainly the Western Balkans and Eastern Partnership countries, such as Albania, Armenia, Azerbaijan, Bosnia and Herzegovina, Georgia, Moldova and Ukraine).

Reform of the transit regime

The creation of the single market in 1993 and the political changes that took place in Central and Eastern Europe opened up new expectations that necessitated a review of transit regimes.

⁽²⁾ Customs Convention concerning the International Carriage of Goods under Cover of TIR Carnets (TIR Convention of 1975).^(Back)

⁽³⁾ EC-EFTA Convention of 20 May 1987 on a common transit procedure (OJ L 226, 13.8.1987), and its successive amendments.^(Back)

⁽⁴⁾ EC-EFTA Convention on the simplification of formalities relating to the trade of goods (including the introduction of a single administrative document for use in such trade) (OJ L 134, 22.5.1987), and its successive amendments. ^(Back)