EMCS: Get rid of paper documentation!
The EMCS system, you are probably familiar with it if you work with excise goods. Since January 2012, the system has been fully operational. But what preceded all this and what are the actual advantages of using the EMCS?
What does EMCS stand for?
EMCS stands for Excise Movement and Control System (EMCS). This is the automation system to move excise goods under an excise duty suspension arrangement. Movement under an excise duty suspension arrangement can only take place between licensees.
The EMCS system only registers the movement of excise goods (alcohol, tobacco and energy products).
How is the EMCS being used?
The EMCS is currently used for the movement of excise goods under excise duty suspension. The main element of the EMCS is the electronic Administrative Document (e-AD), which is prepared by the consignor. After validation, the e-AD is given a unique reference code known as the ARC (Administrative Reference Code). This is automatically returned to the shipper, who can ship the goods after receiving this code.
Upon arrival of the goods, the consignee prepares a notice of receipt to submit to the Member State of destination.
A following release will allow the EMCS to also be used for the movement of excise goods that have been released for consumption in the territory of a Member State and are moved to another Member State for commercial purposes.
The history of the EMCS system
Since January 2012, the EMCS is complete and all functions within it are fully operational. However, several years preceded to get everything arranged.
It all started on January 1, 1993. From that moment on, goods could circulate freely within the EU. A common regime was needed for the control and movement of excise goods under suspension of excise duty to prevent fraud and ensure the payment of excise duty in the Member State of destination. The goods had to be accompanied by a paper document – the administrative accompanying document (AAD).
In May 1998, approval came from the ministry of Economics and Finance (Ecofin) to establish a computerized link between traders through Member State administrations. This was due to the high incidence of fraud in the movement of excise goods within the EU. This computerized link would later become the EMCS.
In the years following the approval, the system was tested in feasibility studies. In May 2005, the Commission published the EMCS Functional Excise System Specification (FESS), which outlines the EMCS business processes.
The EMCS became operational in 2010. Market participants gradually joined the EMCS, and all Member States had to be able to clear the new computerized electronic record (eAD). In January 2011, the EMCS became mandatory and the AAD could no longer be used. All excise goods transported under duty suspension had to be registered with the eAD.
The purpose of the EMCS
Now that you know a little more about the history of the EMCS system, it’s time to look at its purpose. Some of the goals are:
– Fighting tax fraud with real-time information and checks on goods moving under excise duty suspension
– Safe movement of excise goods for which excise duty is still due by checking traders prior to shipment
– Simplification of procedures for traders with an EU-wide standardized electronic system
– A faster release of the securities upon arrival of the goods at the concerning destination
– The establishment of a paperless administration
Benefits of the EMCS system
The EMCS has many economic benefits. We have listed these below:
– Immediate validation of the e-AD (electronic administrative document), guaranteeing that the addressee may receive the goods and minimizing the risk of incorrect data;
– No more handling of paper documents (drafting, processing, archiving);
– Possible integration of processing with existing automated systems (e.g. with ERP software);
– Faster release of securities thanks to the timely clearance of the movement of goods;
– Secure exchange of data between all parties (operators and government departments).
– Improves the quality of the operator’s database as the updates performed at national level are transmitted twice a day to the other Member States.