The Contracting Parties may, by mutual agreement, extend the scope of the Agreement to complement the areas of cooperation in certain areas: the European Community has formally extended the Customs Cooperation Agreement with the United States by introducing efficient and effective control measures to improve the security of transatlantic container transport. The extension of the Agreement of 22 April 2004 to cooperation on Csian and related matters, which aims to strike the right balance between security and facilitation, shows that the possibility of extending the scope of the Agreement is indeed necessary, given that the field of customs cooperation and the role of customs are constantly evolving. Article 6 of the Convention requires the competent authorities of the Contracting Parties to the Convention to agree on the scope of the automatic exchange of information and the procedure to be followed. In this context, the Multilateral Competent Authority Agreement on the Exchange of CbC Reports (hereinafter referred to as “MCAA CbC”) for the automatic exchange of country-by-country reports and the Multilateral Competent Authority Agreement on the Automatic Exchange of Financial Account Information (MCAA CRS) for the automatic exchange of financial account information in accordance with the Common Reporting Standard have been developed. The Convention on Mutual Administrative Assistance in Tax Matters (`the Convention`) is a separate multilateral convention aimed at promoting international cooperation with a view to improving the application of national tax law while respecting the fundamental rights of taxpayers. Articles 19 and 21 of the 1988 Convention contain limitations on the obligation of a requested Party to provide assistance to a requesting Party. The revised Convention generally maintains these limitations, with relatively minor changes to the following two rules: first, the rule that a requesting party exhausts all domestic means of obtaining information before requesting assistance under the Convention, unless the cost of such measures causes “disproportionate hardship”; and, on the other hand, the rule that a requested party may refuse to provide assistance if the administrative burden in question is “manifestly disproportionate” to the benefits to be derived by the requesting State. The Convention on Mutual Administrative Assistance in Tax Matters is an agreement to facilitate the conclusion of bilateral agreements on the exchange of tax information between States parties. The convention was drawn up by the OECD and the Council of Europe and was published on 25 September.
It was opened for signature by members of both organizations in January 1988 and entered into force in 1995. Existing customs cooperation agreements also provide for the possibility that such agreements form part of the European Community`s strategy towards third countries in the field of customs cooperation. They shall focus on strengthening cooperation between customs authorities with a view to exchanging information on technical assistance to third countries in order to improve these measures. The agreements also stipulate that both sides will seek to simplify and harmonize customs procedures, taking into account the work of international organizations such as the World Customs Organization (WCO) and the World Trade Organization (WTO). They provide for the two parties to cooperate in the computerization of customs procedures and formalities in order to facilitate trade between them. More importantly, Article 21 of the revised Convention contains two new provisions implementing the new “global standard” for the scope of obligations in the area of mutual assistance: in accordance with this policy, Customs cooperation and mutual assistance agreements allow the parties to provide the necessary instruments for customs cooperation. For the benefit of world trade and international assistance in the fight against customs fraud, the European Union has signed agreements on customs cooperation and mutual administrative assistance (Canada, Korea, Hong Kong, India, China, Japan and the United States). Each Agreement establishes a Joint Customs Cooperation Committee composed of representatives of the customs authorities of the Contracting Parties, i.e.
representatives of the competent services of third parties (i.e. .B. the Canadian Border Services Agency), the European Commission and the customs authorities of the Member States. The substantive provisions of the 1988 Convention specify the circumstances in which a Party to the Convention (the requesting Party) may obtain administrative assistance in tax matters from another Party to the Convention (the requested Party). Under Article 5, a Party may request another Party to provide certain tax information relating to identified taxpayers and the requested Party is required to do so, subject to the exceptions set out in the Convention. The following articles deal with assistance authorized by the Convention but not strictly required strictly speaking: automatic exchange of information by agreement between the two parties (Article 6); spontaneous transmission of information from one party to another (Article 7); simultaneous tax audits by agreement of both parties (Article 8); and tax audits carried out by one Party in the territory of the other Party with the consent of the other Party (Article 9). The Convention provides for all possible forms of administrative cooperation between the Parties in the assessment and collection of taxes, in particular with a view to combating tax evasion and evasion. Existing bilateral agreements may be maintained as long as they do not conflict with the Powers of the Community and the Customs Cooperation and Mutual Assistance Agreements. The latter shall prevail over the provisions of bilateral agreements on customs cooperation and mutual assistance concluded or likely to be concluded between the various Member States and the Contracting Party in so far as the provisions of the Contracting Parties are incompatible with those of those agreements.
An immediate benefit of the revised agreement is that it removes a major obstacle to the implementation of the Foreign Account Tax Compliance Act (FATCA). .
