National E-Systems for Combating VAT Evasion and Intra-EU Trade. Hungary’s ‘EAKER’ and Romania’s ‘RO e-Transport’

Table of Contents: 1. Introduction. – 2. A quick look at border and other types of checks. – 3. An overview of the two systems. – 3.1. Hungary’s EKAER. The old and the new versions. – 3.2. Romania’s e-Transport. – 4. Legal challenges. – 4.1. The CMR Convention. – 4.2. Conformity with EU free movement of goods law. – 4.3. Proving intra-EU transactions for VAT purposes. – 4.4. Conformity with Regulation 1100/2008 on the elimination of internal frontier checks. – 5. Practical challenges. – 5.1. Increased costs. – 5.2. Increased bureaucracy. – 5.3. User ‘friendliness’ and technical problems. – 5.4. Fragmentation of the internal market. – 6. Ways forward. – 6.1. Is Romania and Bulgaria’s full accession to the Schengen Area enough? – 6.2. Better awareness and enforcement of EU law. – 6.3. Would an EU-wide E-System be feasible? – 6.4. A multi-filter system and cross check for checking compliance. – 7. Conclusions. – Annex 1: Questionnaire.

Abstract: The purpose of this paper is to critically look at two recent E-Systems – one introduced in Hungary (EKAER and more recently BIREG) and the other in Romania (RO e-Transport) – that apply or have until recently applied, among others, to the intra-EU transportation of goods to and from the countries in question. These E-Systems are meant to combat Value Added Tax (VAT) evasion. Whilst they pursue a worthy public goal, on a closer look they pose significant legal and practical challenges. From a legal perspective, these E-Systems and the compliance checks at the border that arise from their implementation amount to measures having an equivalent effect to quantitative restrictions, prohibited under Article 34 TFEU. Furthermore, they contravene secondary EU legislation, such as Regulation 1100/2008 on the prohibition of internal frontier checks, and the VAT Directive and its implementing regulations. The E-Systems also pose numerous practical challenges, such as increased direct and indirect costs for businesses and frequent technical problems. Furthermore, the introduction of national E-Systems increases the administrative burden that the transportation of goods entails and risks further fragmenting the Internal Market. Besides Romania and Bulgaria’s impending full accession to the Schengen Area and the need to increase awareness around EU law, a possible solution could be to set up an EU-wide E-System, managed by public authorities, for combating VAT evasion for the intra-EU transport of goods. Furthermore, instead of systematic border checks, compliance checks should be carried out in a country’s interior, using a multi-filter approach and cross-checks.

Keywords: internal market – free movement of goods – border checks – VAT evasion – EKAER – e-Transport.

1.   Introduction

Traditionally, countries and regional economic integration organizations (REIOs) impose physical checks at the border on goods and people. Checks on goods are usually carried out by a country’s customs and internal revenue authorities for the purposes of imposing customs duties/tariffs, examining the origin of products, their type, volume, and value, as well as ensuring compliance with various sanitary and phytosanitary (SPS) standards. People, on the other hand, are checked for travel documents (national IDs, passports, visas) usually by the border police.[1]

However, there are a range of ‘additional’ checks that different state authorities perform at the border, such as checks for the imposition of or compliance with rules on internal taxes and duties (VAT, excise duties), road taxes and vignettes, the driver’s documents, various permits and transport documents (e.g. waybills), as well as the weight, size, and road worthiness of lorries.[2] Whilst one might think that such additional checks are not carried out between members of the EU internal market, some EU countries impose them at their intra-EU borders, or very close to them due to border infrastructures already being in place and a longstanding habit of implementing controls, often side-stepping their obligations under EU law. Thus, such checks at intra-EU borders challenge our assumption that the EU is a borderless, single market. For some EU states, their intra EU‑borders are genuine borders that rather divide than unite.

Whilst state-of-the-art electronic or E-Systems can be used to strengthen the EU’s external borders, to improve the functioning of the Internal Market, or to lower VAT evasion, some E-Systems can amount to barriers to intra-EU trade, fragmenting the EU Internal Market. Thus, the purpose of this paper is to critically look at two recent E-Systems[3] – one introduced in Hungary (‘EKAER’ and more recently ‘BIREG’) and the other in Romania (‘RO e-Transport’) – that apply or have applied until recently, among others, to the intra-EU transportation of goods, to and from the countries in question. These E-Systems are meant to combat intra-EU tax and VAT evasion. Whilst they pursue a worthy public goal, on a closer look, many issues arise following their introduction and implementation. For example, to check whether the goods were properly declared in RO e-Transport, a state like Romania carries out systematic, physical checks at its intra-EU borders with Hungary and Bulgaria. Furthermore, there is a risk of such systems spreading, since the Hungarian EKAER had an influence on the Polish and Romanian authorities to introduce similar systems.[4] Contrary to this, Austria, which neighbours Hungary and is close to Romania, does not implement systems like EKAER or e-Transport since Austrian authorities perform numerous internal checks at fixed inspection points or on-the-spot checks by the police.[5]

Given the multiple interests and objectives at play, the two E-Systems pose significant legal and practical challenges. On the one hand, one of the pillars of the EU is its Internal Market that ensures the free movement of the various factors of production, such as goods.[6] On the other hand, it is also important to bear in mind that there is a significant problem with VAT evasion resulting from intra-EU trade.[7] Thus, from a Member State’s perspective, a ‘smart’ system like EKAER or e-Transport can be used to increase tax revenue and ‘coerce’ those involved in the transportation of goods to be truthful about their transactions. Such measures, however, should be in line with the EU’s aim to create a well-functioning internal market,[8] and should take into account the interests of traders and freight hauliers, who are at the receiving end of such measures.

In light of this, following a brief discussion of border checks in Section 2 and the description of the two E-Systems in Section 3, the paper argues in Section 4 that from a legal perspective, these E-Systems and the compliance checks at the border that arise from their implementation amount to measures having an equivalent effect to quantitative restrictions, prohibited under art. 34 TFEU. Furthermore, they contravene secondary EU legislation, such as Regulation 1100/2008 on the elimination of internal frontier checks,[9] as well as the Value Added Tax (VAT) Directive[10] and its implementing measures. For the purposes of this paper, the Schengen acquis will only be touched upon tangentially because the article is primarily concerned with checks on goods and not on people. It must also be mentioned that since 1 January 2025, Romania and Bulgaria have become full members of the Schengen Area.[11]

In Section 5, the paper looks at several practical challenges, such as increased direct and indirect costs for businesses and frequent technical problems. Furthermore, the introduction of national E-Systems increases the administrative burden for the intra-EU transportation of goods and risks further fragmenting the Internal Market. In Section 6, we argue that, besides Romania and Bulgaria’s very recent full accession to the Schengen Area and the need to increase awareness around EU law, a possible solution could be an EU-wide E-System for combating VAT evasion for the intra-EU transport of goods. Furthermore, instead of systematic border checks, compliance checks should be carried out in a country’s interior, using a multi-filter approach.

The paper, thus, challenges several existing assumptions. The first one, often mentioned in EU law literature, is that the Internal Market (at least for the free movement of goods) is a ‘done deal’, ‘one of the success stories of the European project’.[12] As we shall see, new impediments to the free movement of goods (‘FMG’) continue to arise. According to the second assumption, the introduction of new E-Systems in a world of ‘smart’ technologies is necessarily beneficial. We will argue that such systems can create significant legal and practical impediments that can lead to the fragmentation of the Internal Market, if implemented at the national level, in a haphazard way, instead of pursuing some harmonised solution at the EU level.

2.   A quick look at border and other types of checks

Before presenting the two E-Systems, let us quickly discuss the types of border and other checks that exist in and around the EU. This will help frame the analysis. For this discussion, we will rely on one of the authors’ recent publications in the Journal of World Trade.[13]

The checks that states carry out at their borders can be of several types: checks on goods, checks on people, and other checks. There are further checks that can be carried out after the border, in a country’s interior. Checks at the border on goods can be carried out for several reasons. First, because goods enter or exit the domestic market. Such checks normally include checks for the imposition of customs duties/tariffs (tariff barriers), as well as checks that constitute non-tariff barriers, such as checking the origin of goods,[14] imposing quotas or other types of quantitative restrictions, and to check compliance with various regulatory standards (e.g. SPS standards).[15] These checks also require documentation and documentary evidence,[16] which – depending on how well the parties are economically integrated – can include pre-notification requirements, customs declarations, and preferential origins certificates (e.g. EUR1 and EUR-MED).[17] In the broader trade literature, authors have noted that the phasing out of tariff barriers raises concerns about the role of non-tariff measures as tariff substitutes to protect domestic production and their effects on trade.[18]

When it comes to the EU, the various tariff and non-tariff barriers within the EU are prohibited under Articles 28, 30, 34, and 35 of the TFEU, as well as by the Court of Justice’s case law, such as Dassonville[19] and Cassis de Dijon.[20] However, at its external borders with third countries, the EU applies all or some of these checks, depending on the preferential relationship with the third states (e.g. at the EU-Norway, the Turkey-EU, or the EU-Ukraine borders).

There can also be checks on goods at the border for other reasons and not because the goods enter/exit the domestic market, such as the payment of an internal tax (VAT and various excise duties),[21] or the payment of anti-dumping duties[22] and duties pursuant to safeguard measures.[23] In the EU’s Internal Market domestic taxes are not imposed at the intra-EU borders but in the Member States’ territory, following a complex set of rules laid down in secondary EU law.[24]

States also carry out checks at the border on people. These can be for multiple reasons, such as checks on returning citizens, checks on people who permanently want to settle in the country, checks on temporary visitors who might or might not need to hold a valid visa, checks carried out on persons carrying goods, checks on refugees and asylum seekers, etc. When it comes to the EU, one should not confuse the EU acquis on the free movement of people with the Schengen acquis. Only the latter guarantees borderless travel for people. When we started writing this article, physical checks on people were still carried out at the Hungary-Romania and Romania-Bulgaria borders. As we shall see, the presence of physical borders in the EU’s interior invites domestic authorities to carry out various checks at these crossing points.[25]

Lastly, there are a host of other checks at a country’s border that are often not mentioned in standard textbooks on EU or international trade law. International transporters of freight will often need to be checked for a waybill, one of the most frequently used one being the ‘CMR note’, based on the Convention on the Contract for the International Carriage of Goods by Road (CMR Convention).[26]

‘In addition to CMR notes there can be checks on whether the lorry driver has a special license or permit to haul commercial goods, whether the trader has notified the domestic tax authorities in order to prevent VAT fraud, whether special approvals were given for the transport of dangerous or perishable goods, whether the vehicle is roadworthy and has all the required documents (insurance, country sticker, etc), and even some checks that under EU rules should be carried out randomly and inland, but some EU countries choose to impose them at the border’.[27]

Checking compliance with the two E-Systems presented in this paper will fall in the category of other checks as they are most often carried out at or very close to the Hungary-Romania and Romania-Bulgaria, intra-EU borders. It is also important to note that the various checks are carried out by different domestic authorities (see Figure 1). Checks on goods are usually carried out by the customs and internal revenue authorities, while checks on people are mostly conducted by the border police. Other checks, such as the size and weight of lorries, is often carried out by a third type of authority, such as a domestic highway authority.

Figure 1. Border Checks in General[28]

3.   An overview of the two systems

This part provides an overview of the two E-Systems. The analysis begins with EKAER, since this system is the older of the two and its conformity with EU law has been successfully challenged. While presenting it, we shall also shortly discuss a newer Hungarian system, called BIREG, which some authors argue is just another way of reviving the old EKAER rules through the back door.[29] This is then followed by RO e-Transport.

3.1.  Hungary’s EKAER. The old and the new versions

Driven by the aim to reduce VAT fraud for freight transport, the Hungarian legislator[30] in 2015 introduced the Electronic Public Road Trade Control System (Elektronikus Közútiárúforgalom Ellenörző Rendszer, ‘EKAER’) that allows the Hungarian Tax and Customs Authority (NÁV) to control in real time the movement of freight within Hungary, to Hungary from an EU Member, and from Hungary to another EU Member State.[31]

The original system provided an obligation to notify in advance all freight transport, more specifically, details about the transport (the name and company identifiers of the sender and receiver, the number plate of the transport vehicle), the goods (weight, monetary value, customs codes, brief description), the arrival time at the pick-up address, as well any changes to the transport (see Figure 2). The information had to be uploaded via the EKAER website, and the persons required to notify, or the freight forwarder, had to obtain an EKAER number.[32] Only those who had obtained a valid EKAER number could be engaged in freight transport. Transporting goods without this number or the erroneous entry of information would be sanctioned with the imposition of fines. In the case of the latter, NÁV would be more lenient and only impose a lower fine, ‘independent of the value of the goods’.[33] However, in case of systematic errors, a fine of up to 40% of the value of the goods could be imposed, with a typical fine ranging between 4–5% of the value of the goods.[34]

Whilst the system was and still is operated by NÁV, the latter also cooperates with other authorities, such as the National Food Safety Office, the office in charge of operating the road camera system, and the HU–GO road toll system.[35] For risky products (see below), a guarantee/deposit of at least 15% of the net value of the risky goods still needs to be paid, unless the taxpayers qualify as ‘reliable’.[36] Furthermore, NÁV officers can carry out both on-the-ground inspections, for e.g. at the site of unloading, and ex-post audits for up to five years.[37]

The original version of EKAER has received both praise and criticism. Varga, writing from the perspective of ensuring a more efficient VAT collection and ‘cleaning’ up the underground economy, concludes that for the period of 2015-2020, the system, albeit not perfect, had functioned well and decreased the VAT gap in the five-year period by 12 percentage points.[38] Furthermore, compliance with the system was ensured via tens of thousands of actual, on-the-ground checks and a considerable amount of money collected by the Hungarian authorities as fines. However, Varga also notes that the original system did have several issues, such as the inability of users to amend the information after introducing it into the system.[39] Thus, simple clerical errors resulted in fines.

According to Lik, whilst the system had a positive influence on VAT revenue and met the requirements of a modern system of tax administration, significant criticism came from members of the freight and transport industries. Among others, stakeholders and transport organisations argued that the introduction of the system had caused chaos in the transport industry, had a negative impact on the logistics industry, imposed new administrative burdens that resulted in additional costs (new IT systems, new employees needed to operate the systems), and the sanctions imposed were disproportionate.[40]

Figure 2. Example of an EKAER number[41]

Commentators, such as Pajor, also argued that the system gave extensive powers to NÁV officials to carry out on-site investigations, which de facto resulted in ‘police and law enforcement’ powers granted to customs and tax officials.[42] Having spoken to several freight hauliers[43] between Romania and Hungary, we were told that the Hungarian authorities would check the EKAER numbers right after the border-crossing between the two countries, on the Hungarian side of the border.

The original EKAER soon came under scrutiny, and significant amendments followed once the EU institutions and the Hungarian judiciary got involved. Firstly, in 2017 the Commission began the administrative stage of infringement proceedings against Hungary and in a Letter of Formal Notice (LFN) – followed by a complementary LFN in 2019 – called upon Hungary to change EKAER. According to the Commission, the system did not comply with Council Directive 2006/112/EC (the VAT Directive). ‘Moreover, the Commission consider[ed] that the Hungarian legislation breache[d] the principles of neutrality and proportionality, as well as the freedom to conduct a business guaranteed by the Charter of Fundamental Rights of the EU’.[44]

Secondly, on 6 November 2020, the Hungarian Supreme Court (Kúria) sent a preliminary reference to the Court of Justice in Eurochem Agro Hungary Kft v. NÁV on whether the penalty system envisaged by EKAER was in line with several provisions of the VAT Directive, with the principle of proportionality, and Article 26(2) TFEU.[45] The Court in its Order of 21 October 2021 only focused on the first two questions and held that EKAER’s penalty system contravened the VAT Directive and the principle of proportionality.[46]

Following these legal challenges, EKAER was amended in 2021 and now only applies in a very narrow set of circumstance. Thus, since 1 January 2021 ‘only those products must be reported, which are listed in the Schedule to the Decree 51/2014 of the Minister for the National Economy on the determination of risky products in association with the operation of the Electronic Public Road Transportation Control System’.[47] The term ‘risky products’ (kockázatos termékek) is not defined in the Decree. Instead, it includes a limited list of products with their customs codes, including – besides the more obvious chemicals and pesticides – various frozen food products, as well as men and women’s garments and other clothing products.[48] Thus, it seems that the Hungarian legislator uses a broad understanding of ‘risky products’ to include products which one might consider ‘hazardous’, as well as those which are at a higher risk of VAT avoidance, such as clothing items and garments. Furthermore, since 17 April 2023, most probably due to the pushback of several Central & Eastern EU Member States against the importation of various grains from Ukraine,[49] the following products have also been added to the list: wheat, rye, barley, maise, rapeseed, and sunflower seeds.[50]

However, as EKAER was narrowed down on 1 January 2021 to apply only to ‘risky products’, a new electronic system was introduced on the same day, the so-called Prior Electronic Permission registration System (BIREG) operated by the transportation authority.[51] Whilst very similar to EKAER, the objective of BIREG is not to tackle VAT fraud, but to tackle freight transports that do not use the proper permits (whether bilateral or pursuant to the European Conference of Transport Ministers, the so-called CEMT/ECTM permits). In its original form, BIREG applied to cabotage[52] within Hungary, and to intra and extra-EU trade when one of the off loadings happened in Hungary. It did not apply to intra-EU transits (for e.g. when goods would be sent from Romania to Austria, via Hungary).

However, in early 2021, the original rules were narrowed down. Thus, the new BIREG rules only apply to vehicles above 3.5 tonnes, carrying out freight transport with third states. The system does not apply to intra-EU transports operating under a Community/EU license, unless carrying out cabotage operations within Hungary.[53] The types of events that must be recorded include: the entering of the territory of Hungary, unloading and loading in the territory of Hungary, and leaving the territory of Hungary.[54]

3.2.  Romania’s e-Transport

The recent RO e-Transport system has its origins in several prior attempts by the Romanian authorities to supervise intra-EU trade and transport, following Romania’s accession to the EU. Thus, in 2010, three years after Romania’s accession, at the initiative of the Romanian National Agency for Fiscal Administration (ANAF), the Register for Intra-Community Operators (ROI) was introduced.[55] This was a register for companies, legal entities and private individuals who had a VAT number and made sales to or procured goods from other EU Member States.[56]

However, in 2016, Government Emergency Ordinance No 84/2016 repealed the ROI ‘[i]n order to reduce the administrative burdens on economic operators […] given that there [were] other more effective levers for preventing tax evasion, including for intra-Community operations’.[57] Then, in 2020, Government Decision[58] No 497/2020[59] introduced the SUMAL system, which is meant to supervise the transport of wooden materials within Romania and also the transport of such materials from Romania to the EU. However, this system does not cover the transport of wooden materials from the rest of the EU to Romania. SUMAL also supervises the import and export of wooden materials from and to Romania from outside the EU. The system became operational in 2021.[60]

In 2022, Government Emergency Ordinance No 41/2022 introduced RO e-Transport, an E‑System which, in its original form, was meant to supervise the transport of ‘high fiscal risk’ goods, regardless of whether the transaction happened in Romania, between Romania and the rest of the EU, or with non-EU countries. Similarly to the Hungarian Decree No 51/2014, the legal text implementing RO e-Transport contains no definition of ‘high fiscal risk goods’. Furthermore, the guide[61] issued by the Romanian Minister of Finance also does not provide any definition. Instead, there is a list approved by ANAF that stipulates the goods that are classified as being of a high fiscal risk, such as vegetables, plants, edible fruit, beverages, salt, clothing and clothing accessories, footwear, cast iron, iron and steel.[62] This is not a definitive list, and the Romanian State can change it whenever necessary. Just as in the case of the Hungarian measures, it seems that the Romanian legislator chose a wide understanding of goods with a ‘high fiscal risk’, to include goods which can easily perish (fruits, vegetables) and goods which are at an increased risk of VAT avoidance (clothing and clothing accessories).

From 2024, however, the scope of RO e-Transport was significantly broadened. For transactions within Romania, it continues to only apply to high fiscal risk goods. However, for all other transactions, whether the intra-EU supply and acquisition of goods or transactions (import and export) with third countries, the system now applies to all goods, not just to those of a high fiscal risk, with several small exceptions, such as goods destined for consular/diplomatic missions, and NATO’s armed forced, among others.[63]

Officially, RO e-Transport was introduced to increase the collection of taxes and to fight against the illicit trade in goods. Thus, it was deemed necessary to have an E-System which would supervise the transport of goods and could be interconnected with other Romanian E-Systems (existing or planned). The system contains a database where ‘subjects’ (companies/natural persons) need to register in advance before the goods leave the warehouse from Romania or enter Romania. They need to declare the name, characteristics, quantity and value of the goods transported, the places of loading and unloading, details of the means of transport used, and the Unique Identification Transport (UIT) number generated.[64] The latter number identifies the goods that are delivered. Furthermore, the carrier is required to share their location while making the transport.[65]

It is also planned that road cameras will be used to further help supervise the transport of goods. Thus, the Romanian authorities aim to have a real-time electronic system for transporting goods on Romanian territory. Whether this will be achieved is still a matter of debate, since e-Transport is plagued by many technical problems. A social media group has already been created in which professionals, accountants, and other stakeholders post images and information about ANAF’s various E‑Systems not working.[66] As Figure 3 illustrates, on 17 December 2024, when one of the authors tried to access the e-Transport system, the website was not operational.

Figure 3. Errors message on ANAF’s RO e-Transport website (17 December 2024).

The law on RO e-Transport is also meant to regulate situations when the online system fails to work.[67] In such cases, the transport can proceed and the obligation to register in e-Transport will be suspended until the system is once again functional. In practice, this requires the subjects to continuously monitor ANAF’s website until the website is operational; otherwise, they risk the payment of fines and the confiscation of the transported products (see Case Study 2 in the Annex).

Before we move on to the legal challenges posed by the two E-Systems, we should highlight some of the key differences between them. Firstly, the current version of EKAER only applies to risky products transported within Hungary or from the EU to Hungary, and vice versa. Thus, it has a narrower scope than its original version, which covered all goods. Contrary to this, the new RO e-Transport has a much wider scope than the original one. For intra-EU transactions and transactions with third states it covers all goods, with minor exceptions, while transactions within Romania are only covered if they present a high fiscal risk. Secondly, e‑Transport will require the carriers to share their location while making the transport.

4.   Legal challenges

In this Part we will assess the two E-Systems’ conformity with international and EU law, more specifically the UN Convention on the Contract for the International Carriage of Goods by Road (‘CMR Convention’), and three areas of EU law, including EU free movement of goods law, EU VAT law, and some provisions adopted pursuant to the EU’s Common Transport Policy. Part of the assessment for e-Transport is based on one of the authors’ prior publications in the Romanian language.[68]

4.1.  The CMR Convention

International freight hauliers are usually checked for a waybill.[69] One of the most frequently used ones is the CMR note, based on the CMR Convention[70] to which 58 States (including all EU Member States) are a party.[71] A CMR note is a standard contract which ‘confirms that the haulage company has received the goods and has a contract from the supplier to carry them’.[72]

Pursuant to Article 1(1) of the CMR Convention, the latter applies to ‘every contract for the carriage of goods by road in vehicles for reward, when the place of taking over of the goods and the place designated for delivery, as specified in the contract, are situated in two different countries, of which at least one is a Contracting country’. Since all EU Member States are also parties to the CMR Convention, a CMR consignment note is used in all intra-EU supply of goods by road. The CMR note is ‘made out in three original copies signed by the sender and by the carrier’ and needs to include the following information: the date and place at which the CMR note is made out; the identifying information of the sender, the carrier, and the consignee; the place designated for the delivery; the description of the goods, their quantity and weight; and the charges relating to the carriage.[73]

If we look at the information that needs/needed to be introduced in the old and new versions of EKAER and RO e‑Transport, we notice a significant overlap between CMR notes and the two E-Systems. Thus, instead of these systems helping the smooth operation of the intra-EU carriage of goods, based on the provisions of an international agreement concluded by all EU Member States, in practice they require the multiplication of information. Whilst one could argue that the added benefit of EKAER and e-Transport is the availability of information in electronic format, currently, 34 countries (including 20 EU Members) have acceded to a protocol to the CMR Convention that allows for the usage of electronic CMRs. Such e-CMRs have the added benefit of reducing costs, faster invoicing, and real-time access to information.[74]

Furthermore, pursuant to Article 12 of the Convention, until the second copy of the CMR note is handed to the consignee ‘[t]he sender has the right to dispose of the goods, in particular by asking the carrier to stop the goods in transit, to change the place at which delivery is to take place or to deliver the goods to a consignee other than the consignee indicated in the consignment note (emphasis added)’. In other words, the sender can change the transport of the goods before they reach the acquirer. Contrary to this, neither the old and new EKAER systems, nor RO e-Transport allow for modifications to be entered into the system following the original entry. Moreover, they impose fines even in cases when clerical errors occur. Thus, the two E-Systems not only duplicate information, but they also create restrictions for the sender, which are clearly incompatible with the CMR Convention.

The two E-Systems create a third burden for intra-EU traders. According to Article 9(1) of the Convention, the CMR note ‘shall be prima facie evidence of the making of the contract of carriage, the conditions of the contract and the receipt of the goods by the carrier’. Thus, the existence of the CMR note in the three copies required by the Convention or the e-CMR should be sufficient prima facie evidence for the existence of the transportation of goods, without the need to enter the transaction into an E-System. According to a 2021 report of Romania’s ANAF, the monitoring of intra-EU transport of goods, through the scanning of waybills and transport documents, such as CMR notes, has already been taking place at 12 border crossings.[75] Thus, if Romanian authorities had already been scanning CMR notes at Romania’s intra-EU borders prior to the establishment of RO e‑Transport, why was there a need to set up an E-System, requiring roughly the same information?

In conclusion, the universal usage of the CMR note in the Member States and the possibility to use e-CMRs makes the existence of EKAER and e-Transport superfluous, and results in the duplication of information.

4.2.  Conformity with EU free movement of goods law

One of the core achievements of the EU is the creation of an internal market in which all factors of production, including goods, people, services, and capital can move freely in an area ‘without internal frontiers’.[76] This latter phrase is problematic as in practice it is the Schengen Area that guarantees truly ‘borderless’ movement without ‘internal frontiers’. EU free movement law removes the various market access barriers and ensures non-discrimination when it comes to the movement of the various factors of production. However, it does not fully guarantee borderless movement.

When it comes to the free movement of goods (FMG), it is well known that Article 28 TFEU creates a customs union in which all customs duties on imports and exports, as well as charges having an equivalent effect, are prohibited. The customs union was gradually set up in the decade following the entry into force of the Rome Treaty (1958),[77] and the EU uses a common customs tariff (CCT) with third countries.[78] These provisions are reiterated and strengthened in Article 30 TFEU. However, because fiscal barriers can also be of an internal nature, the drafters of the Rome Treaty (inspired by Article III of the General Agreement on Tariffs and Trade 1947)[79] have also included provisions (currently enshrined in Article 110 TFEU) setting out the conditions under which Member States can impose internal taxes on domestic goods and products coming from other EU countries. However, internal charges cannot be imposed at the EU’s internal borders. Instead, they have to be imposed internally following the rules laid down in EU secondary law.[80]

For the purposes of our discussion, Article 34 TFEU prohibits quantitative restrictions and measures having an equivalent effect to quantitative restrictions (MEEQRs). This provision applies ‘where a given product is not covered by EU harmonising legislation or is only partially covered’.[81] Article 34 TFEU is addressed to the Members States, including the local and regional authorities[82] as well as to private law certification bodies, vested with de facto regulatory powers.[83] It covers both actions and inactions, such as in the Spanish Strawberries case when the French authorities failed to protect products arriving from Spain against the actions of protesting French farmers.[84] Furthermore, Article 34 TFEU requires a cross-border element to be present and does not apply to wholly internal situations.

As many other important terms, MEEQRs were not defined in the Treaty of Rome, the Court of Justice famously defining them in Dassonville as ‘[a]ll trading rules enacted by Member States which are capable of hindering, directly or indirectly, actually or potentially, intra-Community trade’.[85] As Schütze argues, while according to conventional wisdom, Dassonville represents the substantive equivalent to Van Gend en Loos and it shows a Court that was driven by the ideal to create a transnational market place that is identical to a national market-place, in reality Dassonville represents an effort from the Court to create a doctrinal bridge between the FMG and competition law.[86]

In later years the Dassonville definition was expanded to include ‘all rules’ enacted by Member States and not just trading rules,[87] and is not limited to any legal measure.[88] Very importantly, there is no need for a discriminatory element to be proven for Article 34 to apply.[89] It applies to both distinctly and indistinctly applicable measures, and the Court favours a market access reading of Article 34 TFEU, ‘rather than a discrimination approach’.[90] In the case of indistinctly applicable measures[91] and those that hinder market access, the state can justify them by using a non-exhaustive list of so-called ‘mandatory requirements’ (introduced in Cassis de Dijon) in addition to the closed list of justifications found in Article 36 TFEU, provided they are proportionate.[92]

However, given Dassonville’s very wide interpretation that resulted in traders challenging any legitimate rules enacted by Member States, the Court introduced the concept of ‘certain selling arrangements’ in Keck and Mithouard.[93] Thus, selling arrangements are Member State measures that do not fall within the scope of the Dassonville formula (and are thus legal), provided they apply to all relevant traders operating in the national territory and they affect in a similar manner (in law and in fact) the marketing of domestic and EU products.

The Court’s case-law on MEEQRs is extensive and over the years it has ended up including a long list of measures. For the purposes of our discussion, the following measures are important:

- ‘Inspections and controls, such as veterinary, sanitary, phytosanitary and other controls, including customs checks on imports and exports’.[94] Such measures will make it more difficult and costly to import and transport goods within the EU.

- Systematic inspections of imported products, regardless of whether they occur at the border or elsewhere.[95] Such measures can only be justified in exceptional circumstances.[96]

Before checking the compatibility of the two E-Systems with the aforementioned rules, we should bear in mind that not only the legal text of the domestic measure is important, but also the ways in which conformity with the E-Systems is checked on the ground.

The original EKAER rules would have clearly met the Dassonville conditions as they were rules enacted by the Hungarian authorities that had a direct and actual effect on freight transport. As Lik mentioned, Hungarian transporters and transport associations lamented that EKAER had a negative impact on the logistics industry, imposed new administrative burdens which resulted in additional costs, and the sanctions imposed were disproportionate.[97] Furthermore, the authorities would systematically check compliance with the EKAER system soon after the Hungary-Romania border crossing, thus constituting a systematic inspection on imported products.

As the measure was indistinctly applicable – applying equally to domestic and intra-EU transports – it could have been saved by one of the limited justifications under Article 36 TFEU or one of the ‘mandatory requirements’ pursuant to the Cassis de Dijon line of jurisprudence. Since the original intent of the authorities was to tackle VAT evasion, such an aim could be considered a legitimate policy objective under the Cassis jurisprudence, which among others includes the ‘effectiveness of fiscal supervision’.[98]

However, just like in the case of Article 36 TFEU, the state must show that the measures are proportionate to the objectives pursued. Using the two-legged proportionality test (the Court sometimes uses a three-legged test), the Member State needs to prove that the measure is suitable/appropriate to achieve the objective pursued and it is ‘necessary’,[99] meaning that there is no less restrictive alternative. The latter part of the proportionality test is quite difficult to prove, since less restrictive alternatives exist to control VAT fraud, such as random checks on the side of the road using the existing CMR waybills, instead of systematic compliance checks with E-Systems at the/close to the border. Furthermore, less intrusive measures to combat VAT fraud are already in place, such as administrative cooperation measures between EU Member States in the field of taxation under Council Directive 2011/16/EU or the pan-European Fiscalis programme that ‘enables participating countries, their tax administrations, and their officials to work together in the fight against tax fraud, tax evasion’.[100]

What about the new EKAER system and the amended version of BIREG? Since the amended version of BIREG does not apply to intra-EU transport, only to internal cabotage in Hungary and to trade with third states, the intra-EU element is not satisfied, and the Dassonville formula does not apply. Thus, the amended version of BIREG does not breach EU FMG law. The new EKAER system is somewhat trickier. It has a much narrower application compared to the old one, applying only to certain ‘risky products’ and to certain grains since 2023. For ‘risky products’, the Dassonville formula would be satisfied, following the same logic as we used for the original EKAER system’s non-conformity assessment. However, given the higher risks associated with risky products for human health and tax evasion, one could argue that the Hungarian State would have an easier task proving the proportionality requirement. Nevertheless, much would depend on how the controls are carried out. If every lorry is stopped to check whether it carries risky products and thus needs to have obtained an EKAER number, then even the new system would breach EU FMG law.

The Romanian system in its current form is very similar to the old version of EKAER, which was found to be incompatible with EU law. The first problem with RO e-Transport is that it openly discriminates between the delivery of goods from the rest of the EU to Romania, or from Romania to the EU, and the delivery of goods within Romania. The new system creates a special/narrow procedure for a list of goods considered to be of a high fiscal risk that are delivered inside of Romania. However, for the intra-EU transportation of goods the application is much broader as the measure applies to all goods, with small exceptions. Since the Cassis type of mandatory requirements can only justify indistinctly applicable measures, they cannot be used to justify the overt distinction applied by RO e-Transport between intra-EU transports and transports within Romania. Thus, the only justifications that can be used are the ones found in the Article 36 TFEU exhaustive list.

From the limited grounds included in Article 36 TFEU, justifications on grounds of public policy could potentially be used, but only if Romania could successfully prove that fighting VAT evasion is a measure of public policy. However, the chances for this are slim because the Court takes a very narrow view of what constitutes ‘public policy’, to include cases of civil unrest and public protests.[101]

Furthermore, the measures should not constitute a ‘means of arbitrary discrimination or a disguised restriction on trade between Member States’. Given the overtly discriminatory character of the measure, it is hard to think that these conditions would be satisfied. Furthermore, the measure should be proportionate to the aim to be pursued, in this case, fighting tax evasion. However, less restrictive measures are already in place to check the veracity of the intra-EU transportation of goods: the aforementioned CMR note pursuant to the CMR Convention (see Section 4.1), the evidentiary documents mentioned in Article 45a of Council Implementing Regulation (EU) 2018/1912 (see Section 4.4), as well as the previously mentioned EU-wide cooperation mechanisms for the fight against tax evasion, such as Fiscalis.

Furthermore, RO e-Transport can also be considered an obstacle to the intra-EU transport of goods for two reasons under Dassonville. Firstly, the measure splits the Internal Market into two (Romania v the rest of the EU) as compliance with the system is ensured by the imposition of checks at Romania’s intra-EU borders with Hungary and Bulgaria. Secondly, EU operators will be less inclined to work with Romanian operators, since RO e-Transport creates additional administrative burdens, not applied in the rest of the EU. EU operators will need to spend money and time to adapt to the RO e-Transport rules, and the emergence of additional costs makes the commercialisation of products more difficult.[102]

In conclusion, RO e-Transport in its current form breaches FMG law, while the old version of Hungary’s EKAER was also in clear breach of it. The new EKAER has a much narrower application, but could still contradict EU FMG law.

4.3.  Conformity with the VAT Directive

Besides their implications for the Internal Market, the two E-Systems also touch upon the EU’s VAT rules. This section provides a legal conformity assessment with Directive 2006/112/EC (the VAT Directive).

The VAT Directive is a mammoth piece of secondary legislation that contains 414 articles, a number of annexes, and has as its main aim the creation of a common system of VAT in the EU.[103] It covers the supply of goods and services within the territory of a Member State, the intra-EU acquisition of goods, and the importation of goods into the EU from non‑EU countries.[104] The Directive then goes on to define the taxable persons and transactions, the place of taxation, the chargeable events, the taxable amount, the standard and reduced rates of VAT, the exemptions, the deductions, the obligations of the taxable person, derogations, and other miscellaneous issues.[105] Given the length and complexity of these rules, for the purposes of our discussion, we will focus on those provisions of the VAT Directive that formed the basis of the legal challenges against the initial EKAER system.

The Commission’s Communications that refer to the 2017 and 2019 Letters of Formal Notice (LFN)[106] sent out to Hungary for its alleged infringement of EU rules only mention that the EKAER system (in its original form) did not comply with the VAT Directive, as the system primarily affected intra-EU transactions and introduced administrative formalities connected with the crossing of a border. The Communication, however, does not refer to a specific provision of the Directive. Unfortunately, LFNs are not public, so we cannot check which exact provisions were mentioned in it. If we look at the Court of Justice’s 2021 preliminary order in Eurochem v NÁV,[107] Article 273 of the VAT Directive is mentioned. Pursuant to this article:

‘Member States may impose other obligations which they deem necessary to ensure the correct collection of VAT and to prevent evasion, subject to the requirement of equal treatment as between domestic transactions and transactions carried out between Member States by taxable persons and provided that such obligations do not, in trade between Member States, give rise to formalities connected with the crossing of frontiers (emphasis added)’.

Thus, this provision allows Member States some margin of discretion in adopting further measures they deem necessary to prevent VAT evasion. However, Member States can only adopt such measures if there is equal treatment between domestic and intra-EU transactions, and the new measures do not lead to new border formalities. This textual reading does not provide the full picture of the obligations, as the provisions were further clarified by the Court of Justice in Eurochem, following the reference from the Hungarian Supreme Court.

In this case, EuroChem – a Hungarian commercial transportation company – omitted to submit a simple tax form and according to the Hungarian rules it was designated as a ‘risky tax contributor’. Thus, NÁV decided to review the company’s EKAER submissions and found several inconsistencies. For instance, the company did not upload the exact times for the start of the transport and the product’s unloading, and there were several irregularities concerning the weight of the product.[108] Following NÁV’s investigations, under the old EKAER rules, the company was fined a HUF penalty equivalent of EUR 300,000. Given the size of this fine, the Hungarian Supreme Court asked the Court of Justice whether the margin of discretion enjoyed by Member States under Article 273 of the Directive included the adoption of extra measures that resulted in such high penalties (between 30-40% of the value of the transported goods) and whether these penalties were in line with the principle of proportionality.

Not surprisingly, the Court of Justice concluded that Article 273 and the principle of proportionality precluded the adoption of such excessive penalties. Thus, in order for an additional E-System – introduced by a Member State to combat VAT evasion – to be in line with Article 273 of the VAT Directive, the following cumulative conditions must be met:

- The system should not discriminate between domestic and intra-EU transactions,

- The system should not result in formalities relating to the crossing of borders,

- Any penalties for non-compliance should not be excessive, and

- Any penalties for non-compliance should be proportionate.

As we have seen, the original version of EKAER was heavily amended due to its non-compliance with the latter two conditions. Having spoken to several traders who have used the EKAER system for the transportation of goods from Romania to Hungary, they informed us that compliance with the EKAER system used to be checked on the Hungarian side of the Hungary–Romania border. Such checks would clearly contradict the wording of Article 273 TFEU, which prohibits the setting up of any new formalities relating to the crossing of borders. Furthermore, one could argue that any prior notification of the transportation of goods in an electronic system, in an intra-EU situation, would result in ‘formalities connected with the crossing of frontiers’. However, what about the new, and narrowed-down version of EKAER and BIREG?

In its current and truncated form, EKAER only applies to various risky products. Whilst it does not seem that the system discriminates between domestic and intra-EU transactions, as in the case of both types of transactions, information must be submitted to the EKAER system. If the excessive penalties are still applied, then those penalties would go against the Court’s interpretation of Article 273 of the Directive. Furthermore, if compliance with the system for the products in question is still systematically checked at intra-EU borders, then Hungary is still in breach of Article 273 TFEU as even the narrowed-down version of EKAER would result in ‘formalities connected with the crossing of frontiers’.[109]

BIREG, as we have seen in Section 3.1, has also been amended a month after its entry into force in 2021. In its current form it does not apply to intra-EU transactions. Furthermore, the measure does not have the aim of combatting VAT evasion, but to ensure conformity with the international/bilateral system of transport permits. Thus, one can conclude that the modified BIREG system does not contravene Article 273 of the VAT Directive, either because it has a different subject matter or because intra-EU transactions are not affected.

Analysing RO e-Transport through the lens of the afore-mentioned four cumulative conditions, the following can be concluded. Firstly, the system overtly discriminates between domestic and intra-EU transactions. Secondly, RO e-Transport results in formalities relating to the crossing of borders. Registration in the system results in a UIT number, which needs to be checked at Romania’s intra-EU borders with Hungary and Bulgaria. Thirdly, the penalties for non-compliance for intra-EU deliveries are excessive. Currently, for private individuals the fines are between EUR 2000-10,000, while for companies, fines range from EUR 4000 to20,000 euros (these might be modified by the time the article is published). There are further sanctions in the form of asset seizures or criminal sanctions in some special cases when domestic criminal laws are broken. Lastly, given the size of sanctions, one can argue that they are clearly not proportionate.           

In conclusion, whilst both EKAER and e-Transport are meant to combat VAT evasion, EKAER in its original form was found to breach Article 273 of the VAT Directive. Moreover, the excessive penalties applied by the Romanian authorities pursuant to e-Transport would most certainly also breach Article 273 of the VAT Directive, as interpreted by the Court of Justice in Eurochem.

4.3.  Proving intra-EU transactions for VAT purposes

The VAT Directive includes a very important general exemption, which by now can be considered more as a rule than an exemption for the intra-EU transport of goods. Indeed, under Article 138(1) of the Directive, the intra-EU supply of goods for taxable persons is exempted from the payment of VAT in the country of origin, when ownership of the goods has been transferred from the vendor to the purchaser, the goods have been dispatched/transported to another Member State, and the goods have physically left the territory of the Member Stare of supply.[110]

Even though the VAT number of a company registered in an EU Member State can be easily checked using the EU-wide VAT Information Exchange System (VIES),[111] Member States adopted different approaches when it came to the application of the Article 138 exemptions for cross-border transactions, creating difficulty and legal uncertainty for businesses involved in intra-EU transactions.[112] Therefore, the Council considered that it was important to:

‘specify and harmonise the conditions under which the exemptions can apply. […] As cross-border VAT fraud is primarily linked to the exemption for intra-Community supplies, it [was] necessary to specify certain circumstances in which goods should be considered as having been dispatched or transported from the territory of the Member State of supply’.[113]

To achieve this aim, Council Regulation 2018/1912 was adopted, which amended the VAT Directive’s implementing regulation, namely, Council Implementing Regulation 282/2011. The latter’s new Article 45a[114] provides that for the purposes of applying the exemption under Article 138 of the VAT Directive, a presumption is made for the existence of an intra-EU transaction if the vendor is in possession of ‘two items of non-contradictory’ evidence, issued by two parties independent of each other, such as a signed CMR note, a bill of lading,[115] an invoice from the carrier of the goods, or an insurance policy for the transport of goods, among others. The evidentiary strength of these documents is showcased by the presumption created in favour of the existence of an intra-EU transaction, which the tax authorities can rebut with further evidence. In other words, we do not consider that the Romanian and Hungarian E-Systems provide stronger evidence for the existence of intra-EU transactions, then the ones already introduced by Council Regulation 2018/1912.

Having spoken to traders in Romania involved in the intra-EU supply of goods, the most common form of evidence is the CMR note signed by the acquirer, which can then be sent to the domestic tax authorities. Thus, if there are already EU rules in place that harmonise the evidence needed to prove intra-EU transactions and thus help fight VAT avoidance, why did the Romanian and Hungarian authorities require extra evidence of such transactions in the form of entries into the two E-Systems? In the case of Hungary, one might argue that the original EKAER that became operational in 2015 was adopted prior to amending Regulation 2018/1912 (which came into force in 2020), when no harmonized EU rules existed. However, why would then Romania go ahead with e-Transport, several years after the entry into force of Amending Regulation 2018/1912? This is puzzling, since Regulation 2018/1912 was adopted to assist tax authorities. Thus, it has a similar purpose and is an alternative to e-Transport.

One might argue that it is more convenient for states to have the traders fill out the information concerning the intra-EU supply of goods into an online system, because the burden of entering the proof of the intra-EU transaction is shifted from the domestic tax authorities to the traders. When traders use a signed CMR note as evidence before the tax authorities, the latter still have to enter the data from the CMR note into their databases, unless an e-CMR is used. However, obliging the traders to enter such details into E-Systems, shifts the burden of entering the information to the traders.

In conclusion, the rules that implement the VAT Directive and that apply to intra-EU transactions already provide for several ways of evidencing intra-EU transactions, and the entry of information into EKAER or e-Transport seems superfluous.

4.4.  Conformity with Regulation 1100/2008 on the elimination of internal frontier checks

So far, the two E-Systems touch upon the EU’s FMG and VAT rules. However, their conformity should also be checked with rules adopted under the EU’s Common Transport Policy. For instance, Regulation 1100/2008 applies to ‘controls performed by Member States’, pursuant to EU or national law, on means of road or inland waterways transport.[116] Pursuant to recital 3, ‘Member States perform checks, verifications and inspections relating to technical characteristics, authorisations and other documentation that vehicles and inland waterway vessels must comply with’.

Article 3 of the Regulation imposes a negative obligation on Member States, not to perform the checks listed in Annex I as ‘frontier controls’. Instead, they should be applied ‘throughout the territory of the Member State’, in a non-discriminatory fashion. The Annex then includes a list of checks pursuant to both EU (Part 1) and national law (Part 2), among which one can mention: the maximum authorized dimensions, weight, and road worthiness of the transport vehicles, the driver’s employment contract, transport tickets, recording equipment, the EU authorization for the road transport of goods, driving licenses, controls relating to the transportation of dangerous goods, and controls relating to the means of transport for perishable foodstuffs.

The list included in Annex I is exhaustive. Firstly, the controls included in Part 1 (Section 1, Directives and Section 2, Regulations) and Part 2 of Annex I are clearly numbered and there is no permissive language present that would allow Member States to carry out ‘other’ types of checks, not included in the Annex, as frontier checks. Secondly, pursuant to Article 4 of the Regulation, Annex I can only be amended pursuant to the proposal of the Commission, taking account of ‘technological developments in the field covered’ by the Regulation.[117] This exhaustive list, however, does not in any way include controls to check the compliance with various E-Systems meant to combat intra-EU VAT evasion for the transport of goods.

Thus, we can analyse the conformity of the Romanian and Hungarian systems with Regulation 1100/2008 in two ways. The first one follows a per a contrario style of reasoning. If the checks are not included in the exhaustive list found in Annex I to the Regulation, then they cannot be allowed. Following this type of reasoning, neither the new version of the EKAER for risky products, nor the e-Transport systems are compliant with the Regulation. According to the second reading, even if one could argue that the checks should somehow be included in the exhaustive list, they cannot be performed as frontier checks. Thus, if conformity with the new EKAER is still conducted by the Hungarian authorities at the border with Romania, such checks are not in line with the directly applicable Regulation. As discussed above, compliance with RO e-Transport for intra-EU transports results in physical checks carried out at the EU’s internal borders, namely between Hungary and Romania, and Bulgaria and Romania. Thus, the Romanian system is not in line with the Regulation. As argued in Section 6, instead of carrying out such checks at the border, domestic authorities should introduce random, multi-filter checks carried out in the countries’ interiors and cross-checks for the sellers and buyers.

In conclusion, one of the most important breaches that result from the two E-Systems, concerns the breach of Regulation 1100/2008 that includes an exhaustive list of checks pursuant to EU and national law, which can only be done in the interior of EU Member States, in a non-discriminatory fashion, and not as systematic checks at their intra-EU borders.

5.   Practical challenges

In this Section, let us focus on the practical challenges caused by the two E-Systems. First and foremost, it is important that amid the hype to create ‘smart’ cities, education, and taxation with the help of various E-Systems, we also recognise that just because something is labelled as ‘smart’ or ‘E-’ does not necessarily result in more efficient outcomes. On the contrary, given the multiple interests that are at play in the intra-EU trade in goods and the fight against VAT evasion, significant practical hurdles can arise. Thus, from a Member State’s perspective, a ‘smart’ system like EKAER or RO e-Transport can be used to increase tax revenue and ‘coerce’ those involved in the transportation of goods to be truthful about their transactions and increase on-the-ground and ex post controls, under the threat of heavy fines. However, such measures should be in line with the EU’s aim to create an internal market and should take into account the interests of traders and freight hauliers, who are at the receiving end.

In order to give a more accurate picture of the practical challenges, we sent out a questionnaire with seven questions to three businesses based in Romania (for the questions and the more detailed presentation of the case studies, see Annex 1). We selected a business that imports and exports lumber and other wooden products to and from Romania, primarily through the Hungary-Romania border (Case Study 1); a business that imports olive oil and other products to Romania, from Greece, the goods having to cross the Romania-Bulgaria border (Case Study 2); and a business whose merchandise was confiscated by the Romanian authorities for not filling out e-Transport and which is currently in a legal battle with ANAF (Case Study 3). Based on the three case studies, as well as various reports and media articles, we group the practical challenges into four categories: (a) increased costs; (b) increased bureaucracy; (c) user friendliness and technical problem; and (d) the fragmentation of the Internal Market. It must also be noted that the practical challenges cannot be neatly separated, as they often overlap.

5.1.  Increased costs

E-Systems, such as the ones discussed in this paper, are often intended to increase efficiency and revenue. Nevertheless, ‘they also impose a significant one-off amount of cost on the taxpayer during the course of their introduction’.[118] For instance, the Hungarian authorities had intensively published information, made presentations, and issued press releases before the adoption of the original EKAER in 2015.[119] Nevertheless, even with the presence of such domestic measures to popularise EKAER, stakeholders and transporters have lamented that the original system caused a lot of chaos.[120] This is understandable. As legal professionals, used to reading national, EU, and international legal texts, we found both the old and new versions of EKAER, BIREG, and RO e-Transport difficult to read and comprehend. After having spoken to the businesses in the three case studies, we identified a set of direct and indirect costs associated with the operation of such E-Systems.

Firstly, there is the initial cost in time needed to learn how to operate a newly introduced E-System and to understand how the rules are implemented. In Case Study 1, the respondent indicated that an employee needs 4-5 working days to fully learn how to use e-Transport, to ensure that not only the workings of the system are properly understood, but also that mock tests are conducted.

Following this initial learning period, the actual time needed to fill out the electronic forms for an individual transport/transaction also needs to be factored in. This, we were told, can vary. If the websites are operating well and, for example, a Romanian business is exporting goods to another EU Member State, then the actual filling out of e-Transport can take 15-30 minutes per transaction when the goods leave the seller and another 10-20 minutes when the goods arrive at the seller. However, this time significantly increases when the websites (quite frequently in the case of e-Transport) are not operational, or when the business imports goods from EU Member States. Thus, if a Romanian business is importing goods from another EU country, the EU business partner must send all the information needed for e-Transport to the Romanian business in advance, so that the latter can fill out RO e-Transport before the shipment occurs. Factoring in different time zones, working hours, weekends, or changing the lorry used for the delivery, such a simple task can take longer than expected. The company (with 2 permanent employees) in Case Study 2 estimated that e-Transport results in 14-15 lost working days/year, amounting to 1000-1500 euros of indirect costs.

One must also factor in the frequent changes to the E-Systems. For example, in 2024, RO-Transport has been amended thrice so far,[121] while EKAER has been significantly amended since 2015 due to the pressure from the Commission and the Court of Justice (see Section 3.1). Frequent amendments often result in extra costs to retrain staff. Small and medium-sized enterprises (SMEs) often do not have the financial resources to employ compliance experts and have to outsource these tasks, increasing their costs. Larger enterprises, with much larger volumes of intra-EU trade (which also means more E-Systems to fill out), either need to train several employees in-house or hire new employees.

Furthermore, following recent amendments to RO e-Transport, businesses are also required to acquire various GPS terminals for the vehicles, so that their real-life geographic position can be communicated to the E-System.[122] However, besides the costs in time, staff, and extra equipment, there are also costs in time that arise from the compliance checks, when national authorities stop lorries to check whether they have filled out RO e-Transport or EKAER. According to Case Study 2, even if a company fills out e-Transport well, the freight haulier can encounter problems if other companies using the same lorry have not filled out the E-System.

Lastly, EKAER in its original format imposed very hefty fines. These disproportionate fines were successfully challenged before the Court of Justice in the afore-mentioned Eurochem. However, Romania – at the moment of writing – still imposes significant penalties that can include the confiscation of the merchandise when e-Transport is missing. Case Study 3 describes such a situation that resulted in a fine and the sequestration of goods worth EUR 20,000. Challenging the fines and confiscation results in lengthy court proceedings and legal costs.

In conclusion, national E-Systems meant to combat VAT evasion generate increased direct and indirect costs to businesses, such as costs in time, staff training or the hiring of new staff, the acquisition of geolocation equipment, costs incurred during the compliance checks, and the potential fines and legal costs to challenge such fines.

5.2.  Increased bureaucracy

Besides increased direct and indirect costs, such E-Systems also create administrative burdens for those involved in the intra-EU transportation and sale of goods.

As EKAER has been operational since 2015, more studies show that its introduction had a negative impact on the logistics industry and imposed new administrative burdens.[123] RO e-Transport, in its current form, is in its relative infancy. Nevertheless, some preliminary information is already available on the administrative burdens it creates. Firstly, the rules come with a 26-page guidebook issued by the Romanian Ministry of Finance.[124] This guidebook, however, needs constant updating due to the ongoing amendments to the system. Moreover, due to the efforts of the National Union of Road Hauliers from Romania (Uniunea Națională a Transportatorilor Rutieri din România, UNTRR), some aspects of e-Transport have been postponed, such as the fines for not using GPS equipment to geolocate the lorries.[125] Thus, businesses need to spend considerable time to ensure that they are up to date with the fast-changing rules. Secondly, the rules and their implementation cause a lot of uncertainty and raise many practical questions. On the website of UNTRR, we have come across very frequent questions on whether samples, free goods, packaging and goods transiting the country should be declared[126] The company in Case Study 2 did not understand what the reasons for setting up e-Transport were, since it just resulted in more cumbersome bureaucracy.

Beyond these issues, we have discussed in Sections 4.1 and 4.3 how these E-Systems result in the duplication of information. Furthermore, they come on top of other systems that stakeholders have to comply with, be it recent electronic invoicing systems or special systems for the transportation of certain goods, like wood and lumber (e.g. the SUMAL system and E-Factura).

To sum up, national E-Systems for the combatting of VAT evasion, are often subject to multiple amendments, which creates uncertainty and results in extra administrative burdens for businesses, atop of existing burdens. Furthermore, they result in pushback from various stakeholders, such as transport associations.

5.3.  User ‘friendliness’ and technical problems

As with many E-Systems, there are also issues that concern the user friendliness of the web interface and frequent reports of the websites crashing, time during which no e-numbers can be requested. Without such numbers the traders are liable to pay fines and even the sequestration of their goods.

In the case of EKAER, a practical difficulty that was noted concerned the inability to subsequently change small administrative or clerical errors.[127] Thus, the simple misspelling of the lorry’s number plate could result in a fine. As mentioned, in Romania, a social media group has already been created in which professionals, accountants, and other stakeholders post images and information about ANAF’s various E‑Systems not working.[128] At the moment of writing, the social media group has counted over 500 instances of ANAF’s E-Systems not working or crashing. Even the website of the Romanian Ministry of Finance, which includes the legal rules and amendments to RO e-Transport, was frequently not operational.

In sum, Member States need to ensure that if they do go down the path of using E-Systems to combat VAT evasion, that such systems are user-friendly, stable, and allow for the correction of clerical errors.

5.4.  Fragmentation of the internal market

There are further practical problems one might mention that concern the operation of the Internal Market. Firstly, if each EU Member State introduces its own E-System, the Internal Market risks being fragmented. For instance, scouring various online platforms on which intra-EU traders shared their experiences with RO e-Transport and EKAER, we came across a case[129] where a Hungarian company sent goods to Romania. The Hungarian company organised the transport of the goods but was not aware that the Romanian party had to be informed in advance to upload the transaction into RO e-Transport. Since the transaction did not appear in the system, when the goods arrived in Romania, they were seized by the Romanian authorities for not having been entered into the E-System (see also Case Study 3). Secondly, different national requirements – the non‑observance of which results in hefty fines – can result in trade diversion towards EU Member States that do not have such systems or some intra-EU transactions might simply be called off due to the excess bureaucracy.

In conclusion, Member States must be mindful of the (obvious) fact that they are members of the EU, the aim of which is to create an ‘ever-closer’ Union[130] premised, among others, on the creation of the Internal Market.[131] Thus, any national measures aimed at combating VAT evasion should avoid fragmenting the Internal Market.

6.   Ways forward

From the perspective of EU law, the way forward is relatively simple. Member States must comply with their obligations mentioned in Section 4, including the EU FMG provisions, the VAT Directive, Implementing Regulation 282/2011, and Regulation 1100/2008. However, there are multiple interests and objectives at stake, including those of the EU, the traders/transporters, and the Member States. Furthermore, one needs to reconcile, on the one hand, the need to ensure the well-functioning of the Internal Market, with the aim of combating VAT evasion, on the other. Thus, the way forward needs to consider these competing interests and objectives. In the following sections, we put forward four steps that can help reconcile these competing interests and objectives: (a) Romania and Bulgaria’s full accession to the Schengen Area; (b) better awareness and enforcement of EU Law; (c) an EU-wide E-System; and (d) a multi-filter system for checking compliance combined with cross-checks.

6.1.  Is Romania and Bulgaria’s full accession to the Schengen Area enough?

The Romania-Hungary and the Romania-Bulgaria borders are special cases. The two countries had joined the Schengen Area in 31 March 2024, but only with their maritime and air borders.[132] Then, on 12 December 2024, the Justice and Home Affairs Council decided that Romania and Bulgaria can join the Schengen Area also with their land borders from 1 January 2025.[133] The situation in Cyprus is unique due to it being a divided island, and Ireland is in the Common Travel Area with the UK.

The presence of a physical border invites domestic authorities to use it as an easy choke point where numerous other checks can be carried out, even when EU law prohibits such checks from being carried out at the EU’s internal frontiers. The entry of Romania and Bulgaria into the Schengen Area at least dismantles checks carried out on persons at the countries’ intra-EU borders, which have become bottlenecks for freight transport. According to a 2023 Report by UNTRR, Romanian freight hauliers suffered an estimated loss of 2.4 billion euros annually due to Romania not being part of the Schengen Area, and some lorry queues at the Romania-Hungary border were up to 20km long (!).[134] Thus, eliminating such choke points is crucial for the smooth operation of the Internal Market.

However, unlike the recent media hype around Romania and Bulgaria’s full accession to the Schengen Area,[135] we are somewhat reserved about whether, from 1 January 2025, the changes for freight hauliers will truly be drastic. Firstly, compliance checks with RO e-Transport are done systematically at Romania’s intra-EU borders, combined with other checks, imposed by Romania’s Highways Authority (CNAIR) that systematically measures the weight of lorries on special scales.[136] The Romanian Ministry of Finance has very recently declared that, close to Romania’s borders, the UIT number for e-Transport will continue being checked even after Romania’s full entry into the Schengen Area. However, such checks will only be done pursuant to a risk assessment.[137] Representatives of UNTRR expressed their concern that the Romanian authorities will continue checking compliance with e-Transport and the weights of lorries at Romania’s borders with Hungary and Bulgaria, even after 1 January 2025.[138]

Secondly, Hungary has already announced that it will continue checking every lorry and its documents for at least 6 months following Romania’s full entry into the Schengen Area, while Bulgaria will be charging 25 euros/lorry at the Romania-Bulgaria crossing at Ruse.[139] Lastly, there are an unprecedented number of ‘temporary’ controls between ‘old’ members of the Schengen Area,[140] which will result in temporary border checks still being in place following Romania’s and Bulgaria’s full accession to the Schengen Area.

In conclusion, even following Romania and Bulgaria’s full accession to the Schengen Area, much will depend on the willingness of national authorities not to perform certain checks (other than those on persons) systematically at, or very close to intra-EU borders.

6.2.  Better awareness and enforcement of EU law

There also needs to be better awareness of EU law among domestic and local authorities, as well as stakeholders in the trade/transport industries and even in academic circles. It is quite evident that the Hungarian and Romanian authorities neglected to check the conformity of their measures with EU law, focusing on their own objectives to tackle tax evasion. Some of the authors we read for our research also praised the efficiency of EKAER in fighting VAT evasion but failed to mention the many inconsistencies that exist between these national measures and EU law. It goes without saying that EU law has primacy over inconsistent national law,[141] and Member States have an obligation to remove such inconsistencies. Thus, whilst it is important for Member States to fight VAT evasion, the individual means chosen to reach this objective must be in compliance with EU law.

Furthermore, the Commission also needs to be more vigilant when Member States adopt E-Systems that breach or have the potential to breach EU law. A recent study commissioned by the European Parliament on the re‑introduction of temporary border controls in members of the Schengen Area during the Covid-19 pandemic found that there has been an ‘EU enforcement and evaluation gap’ in an area where the ‘EU has a clear legal competence’.[142] As the Commission can initiate investigations under art. 258 TFEU on its own initiative or following a complaint from the public,[143] we decided to send a complaint form to the Commission on 21 October 2024, describing in detail the inconsistencies between RO e-Transport and EU Law. On 15 November 2024, the Commission responded that they will decide ‘whether further action should be taken’.[144]

Lastly, ever since the Court of Justice had co-opted private parties in the enforcement of EU law in Van Gend en Loos,[145] the various transport associations and other stakeholders/interest groups need to put pressure on their domestic authorities, as seen by recent protests organized by freight hauliers in Romania.[146] Furthermore, they should also be willing to inform the Commission about new state measures that are incompatible with EU law or pursue legal action before the domestic courts.

However, it is also important to bear in mind that there is a problem with VAT evasion resulting from intra-EU trade. According to the Commission’s 2023 VAT Gap Report, there is a ‘VAT Gap’ – the difference between expected VAT revenue and the actual amount collected – in the EU of EUR 61 billion.[147] Whilst some common rules at the EU level exist, the enforcement of those rules is still primarily left to the Member States, which must work with limited information and have their owns interests in mind. As Lik notes, the original EKAER system resulted in a significant increase in VAT revenue, and the shadow economy’s GDP ratio in Hungary fell from 22% in 2015 to 11% in 2019. Thus, there is a legitimate interest to fight VAT evasion, while also protecting the interests of genuine traders/transporters and ensuring the cohesion of the Internal Market.

Consequently, instead of peace-meal measures by individual Member States, an EU-level solution would be advisable. In the next section, let us look into the feasibility of creating an EU-wide E-System for combating VAT evasion.

6.3.  Would an EU-wide E-System be feasible?

Some EU-level solutions for the combating of tax evasion are already in place, such as the Fiscalis Programme established by Regulation (EU) 2021/847 for cooperation between Member States in the field of taxation, covering the period of 2021-2027. However, such measures do not harmonize electronic invoices (e-invoices) or create EU-wide databases for various intra-EU transactions. The Commission, since 2022, has been considering an EU-wide solution for e-invoices, in the form of an EU-wide ‘continuous transaction controls’ (CTC) e-invoicing system that would cover both intra-EU and domestic transactions.[148] During the writing of the paper, the Council (following a special legislative procedure) has agreed on a set of new rules on digital VAT reporting that would create a ‘real-time digital reporting system’ for VAT purposes through e-invoices and which would allow the sharing of data via a new IT system.[149] It is expected that the system will be operational by 2030 and that existing national systems will be interoperable with the EU system by 2035.[150]

There are two facets to such a pan-European solution: the creation of the actual EU-wide E-system that can track the intra-EU transportation of goods and the correct payment of VAT, as well as how/where compliance checks are conducted. Having EU-wide systems of data sharing is not novel, as exemplified by the second-generation Schengen Information System (SIS II),[151] the Visa Information System (VIS), the European Asylum Dactyloscopy Database (EURODAC),[152] or the EU Commission’s TRACES platform for live animals and certain foodstuffs.[153]

However, there are a myriad of questions the setting up of such a system raises. What type of information should it contain? Who enters the information into the system: the domestic authorities or the intra-EU traders/transporters? Should it only focus on e-invoicing or also act as a database that stores all intra-EU transactions in goods (also services)? Which domestic authorities would have access to it? Would it have various functions allowing for cross-border collaboration and cooperation between the national authorities? In the following paragraphs, let us discuss some of these questions, noting that in real life, such EU-wide solutions require very thorough impact assessments (usually commissioned by the EU Commission) and the input of numerous stakeholders.

Firstly, we need to identify the aim and main purpose of an EU-wide system to combat VAT evasion in the intra-EU transportation of goods. In a purely domestic setting, national tax and revenue authorities can easily cross-check information that concerns the transaction, the parties to the transaction, and the invoices, since they are only dealing with domestic participants and businesses have to periodically provide documentation, such as invoices, to the domestic authorities. However, an intra-EU transaction implies that the domestic authorities will have incomplete information on one of the parties to the transaction. Thus, one of the primary functions of an EU-wide E-System would be to provide a platform and repository for information that domestic authorities can easily consult.

SIS II can provide some guidance. The system, in its initial form, has been operational since 1995 and provides access to border police, immigration, customs, and judicial authorities from EU countries and Schengen associated countries.[154] Besides the numerous national authorities that have access to it, the system also acts as a repository of information (fingerprints, photographs, identification data, DNA profiles, etc.) and as a system in which alerts can be placed.[155] Thus, an EU-wide E-System for combatting VAT evasion, could grant access to a variety of national authorities (border police, revenue and tax authorities, judicial authorities, etc.) and could serve as a data repository, as well as a system in which alerts could be sent out in case of suspicious transactions.

Secondly, what type of information should be entered into the EU-wide E-System? Both EKAER and RO e-Transport require extensive information, such as the parties to the transaction, the goods being transported (type, value, weight), the freight haulier being used (name, number plates, etc.), as well as the place of loading and unloading. An EU-wide system could also include such information. As we have seen, SIS II includes several types of data, and the system is periodically reviewed to add new categories of data. Such flexibility should be a part of an EU-wide E-System as well. Furthermore, unlike SIS II, which includes very sensitive data, such as fingerprints, DNA profiles for missing persons, and photographs, an E-System for combatting VAT evasion would include fewer sensitive data, thus ensuring easier compliance with the EU’s data protection rules.[156]

Thirdly, and very importantly, who should enter the data? Both EKAER (in its original and revised version) and e-Transport shift the burden of data entry from the state to the businesses. In the case of RO e-Transport, there is clear discrimination between wholly internal transactions and intra-EU transactions, since RO e-Transport applies to the former under very limited grounds. Thus, it is important that the EU-wide E-System should not discriminate between intra-EU and wholly internal transactions, by obliging intra-EU traders to enter information into it, without doing the same for wholly internal transactions. It follows that the data into the EU-wide system should be entered by the domestic authorities. As mentioned, all businesses must, periodically send their invoices and other documents to the domestic revenue and tax authorities. Thus, the authorities are already in possession of such information, which they can uploaded into the system. Furthermore, e-invoices and e-CMRs could be directly connected to the system and with the help of artificial intelligence, finding discrepancies should become much easier.

Nonetheless, there are costs when setting up such a system. For instance, according to the European Court of Auditors, setting up the various E-Systems for the monitoring of the Schengen Area’s external borders cost 600 million euros.[157] Furthermore, even in a small country like Hungary, EKAER received millions of notifications yearly. An EU-wide system would potentially include tens of millions of transactions per year. Thus, the system would need to be robust enough to handle large volumes of data. It should also allow the various national authorities to conduct ex post audits, and entries into the system should be amendable. However, it is to be expected that the efficiency of such a system will also greatly depend on whether the data entries are complete and entered in a timely manner.[158]

The second aspect concerns the checking of compliance with the system. This would not result in major modifications to the existing legal framework. Annex I to Regulation 1100/2008 could be amended to include internal checks for compliance with the EU-wide E-System. Such checks, as the Regulation very clearly says, should be done internally, throughout the territory of the Member States, and not systematically as frontier checks. Similar checks, for instance, on the road worthiness of commercial vehicles, are already conducted in EU Member States internally, but the number of checks differs significantly. According to a 2020 Report of the European Commission to the European Parliament, some Member States make more roadside controls than others, Germany having led the way with 1.620.465 vehicle checks in 2015-2016 while countries such as Italy only checked 5514 vehicles in the same period.[159]

To conclude, an EU-wide system for combating VAT evasion for intra-EU transactions could be feasible. However, the design of such a system would need to have a clear aim and define the information that needs to be entered, domestic authorities should enter the information, it should be robust and with reasonable costs. In the next section we propose a multi-filter system and cross checks that could help domestic authorities carry out compliance checks with E-Systems, whether national or EU-wide.

6.4.  A multi-filter system and cross check for checking compliance

In practice, the actual compliance checks could be done using a multi-filter system. Firstly, we must acknowledge that not all transport of goods is genuine. Traders might declare one set of goods, when in reality other goods are the object of transport, as recently exemplified by lorries carrying waste to Romania that had been declared as other goods.[160] Furthermore, traders might also declare a different volume, weight, quantity or value, so as to pay less VAT and other types of taxes. Therefore, public authorities have an interest in checking the transport of goods. However, such checks should not result in checks at the EU’s internal borders, unnecessary impediments to the intra-EU movement of goods, and should be in line with the EU’s VAT Directive.

Thus, public authorities could choose to institute roadside controls, in their countries’ interior, using a multi-filter approach and cross-checks at the seller and buyer. In order not to create unnecessary traffic jams and congestion, permanent, fixed checkpoints could be created in different locations inside the country, to which more flexible measures could be added, such as: ad-hoc checkpoints, mobile control teams, road cameras, the aerial surveillance of roads using drones, helicopters, road scales for weight checks, and checks conducted at parking places for lorries. Furthermore, Member States authorities could cooperate, using even existing mechanisms in place such as the Fiscalis Programme, to cross-check the information at the loading place, transport company and delivery place. Multi-filter systems and cross checks could also benefit from more de-centralisation. For example, authorities that are performing the checks could be given more autonomy in order to perform checks where they consider it necessary.

According to statista.com, Romania and Hungary have some of the lowest controls performed by the countries’ internal police in the EU[161] (see Figure 4). This is problematic because it increases the likelihood of traders and freight hauliers not obeying the law, which ultimately results in the authorities using their national borders to create checkpoints where compliance can be checked with cumbersome E-Systems. Contrary to this, Austria, which neighbours Hungary and is close to Romania, does not implement systems like EKAER or Ro e-Transport since Austrian authorities perform numerous internal checks.[162]

Figure 4. Percentage of people that have been stopped by the police in the last twelve months in selected European countries in 2019, by country.

Furthermore, one can also point to existing examples in Romania of multi-filter systems that are in operation, such as those introduced by the Romanian authorities fighting the illegal trade in tobacco products at Romania’s northern border with Ukraine. Tobacco smuggling from Ukraine and Romania is a recognised problem, due to the high excise taxes one must pay on such products in Romania. Patrolling the 270 km long land border between the two countries is a difficult task, as most of that border is covered by mountains and forested areas. Thus, the Romanian Police and other domestic authorities apply a multi-filter system beyond the border that includes permanent and ad-hoc checkpoints, mobile controls, and checks on warehouses. These checks have resulted in a lowering of illicit trade in tobacco from Ukraine. Currently, the smuggling of and illicit trade in tobacco products is primarily done at the borders with the Republic of Moldova and Bulgaria.[163]

Lastly, the efforts put into raising awareness and preventing the illegal trade in tobacco products should also be mentioned. Unfortunately, EKAER and RO e-Transport do not adequately focus on prevention and ways by which public authorities can help private individuals and companies obey the law. Instead, their approach is to impose hefty fines and sanctions.

In conclusion, a multi-filter approach and cross checks, using random and frequent internal checks would more adequately protect the Internal Market and ensure compliance with Regulation 1100/2008, than systematic border checks.

7.   Conclusions

Following this complex legal and practical analysis of the Hungarian EKAER and Romanian RO e-Transport systems, designed to help combat VAT evasion for the intra-EU trade in goods, we would like to point out the following.

In a well-integrated regional organisation, like the EU, with an internal market that ensures the free movement of all means of production, and which has adopted and continuous to adopt numerous pieces of secondary legislation, in fields such as internal checks, VAT collection, and the common transport policy, ‘doing it alone’ seems not to be a feasible option. The EKAER system in its original version and RO e-Transport in its current version not only create numerous practical problems for traders and freight hauliers, but they also breach the CMR Convention, the EU’s rules on the free movement of goods, the VAT Directive with its implementing regulations, and Regulation 1100/2008.

Instead of such ‘solo’ measures, we would like to remind domestic authorities of what the European Court of Auditors argued in its 2021 Report on Exchanging Tax Information in the EU:

‘A single Member State cannot manage its internal taxation system, especially as regards direct taxation, without receiving information from other Member States. In order to overcome the negative effects of this phenomenon, it is indispensable to have administrative cooperation between the Member States’ tax administrations’.[164]

Annex 1
Questionnaire

1. How big is your company? (no. of employees)
2. What products do you import/export?
3. From/to which EU country do you import/export?
4. Did you have to fill out EKAER/ RO e-Transport?
5. Did you encounter problems with filling out EKAER/ RO e-Transport? If so, what kind of problems?
6. Did the carrier you used encounter problems when the Hungarian/ Romanian authorities checked compliance with EKAER/ RO e-Transport at the Romania-Hungary or Romania-Bulgaria borders?
7. What costs in time and money do you estimate you incur due to the EKAER/ RO e-Transport rules?

Annex 2
Case Study 1

1. Company based in Romania with one permanent employee acting as a commercial intermediary.
2. Transactions involving wood, timber, furniture, and agricultural products.
3. Imports from and exports to Hungary, Bulgaria, Germany, France, Denmark, Slovakia, Czechia, and Serbia (non-EU).
4. Yes.
5. The following problems have been mentioned:

• 5 working days needed to adapt to the new e-System
• Extra time needed to fill out transaction in e-System: 15-30 min per transaction
• Once the merchandise arrives to the EU-based destination another 10-20 min are needed per transaction to confirm the arrival of the product in the e-System
• Doubling of information: the same information is needed when filling out CMR note
• Problems arise when the buyer returns certain faulty/non-conforming products for which the e-System should be filled out again

6. No, because the company used valuable time and resources to fill out the e-System, so that the freight hauliers did not encounter problems.
7. The following costs were mentioned:

• Since e-Transport requires the filling out of information both at the time of loading of the merchandise and after it arrives to the destination, the total time spent per transaction is between 25-60 min, depending on the complexity of the transport
• The costs are not only incurred by the seller, but also by the buyer and the freight haulier. For e.g., the freight haulier needs to wait until all the data is entered into the E-System which can take more time when the system does not work.
• The freight hauliers were checked at Romania’s intra-EU borders before 1 January 2025, and are checked at different points close to the border after Romania’s entry into the Schengen Area
• A lorry normally covers 90 km in 60 minutes, which at a minimum rate of 1 euro/km results in 90 euros/h. Thus, for a lorry to wait for 30 min until the E-System is filled out, a cost of 45 euros is incurred. On top of this one must add the extra labour costs incurred by the seller’s employee to fill out the forms as well as the indirect costs due to lost production time (the time lost completing the forms can be used to gain new clients, perform other, more lucrative tasks, etc)

Case Study 2

1. Company based in Romania, 2 permanent employees.
2. Olive oil, olives, cosmetics, honey, jams, and Turkish delight.
3. Imports products from Greece.
4. Yes.
5. No, the company did not encounter any problems. However, it is a very bureaucratic procedure, cumbersome, and the company does not understand its purpose.
6. Yes, the freight haulier has encountered problems at the Romania-Bulgaria border. However, not because of the company, but because of products of other companies transported by the same freight haulier, for which E-Transport was not filled out.
7. Each year, in total, an estimated 14-15 days are lost just on filling out the relevant forms in the E-System, which results in about EUR 1000-1500 indirect costs to the company.

Case Study 3

1. Company based in Romania with 27 employees.
2. Transactions involving iron-based products, such as gates and fences.
3. Imports products from other EU countries, such as Poland.
4. Yes.
5. Yes. When the lorry, carrying products from Poland, crossed the Hungary-Romania border, the Romanian authorities accused the company of not having the UIT code required by the e-Transport system, even though the company had obtained the code on the same day. Following this, the Romanian authorities imposed a fine and confiscated the goods. The company brought judicial proceedings against ANAF.
6. Yes, at the Romanian border with Hungary the lorry driver was interrogated by the Romanian authorities for lacking the UIT code required by the e-Transport system, even though it was not the duty of the freight haulier to obtain the UIT code.
7. The following costs have been mentioned

• Seizure of the goods worth approximately 100.000 RON (20.000 Euros)
• Fine imposed by the Romanian authorities
• Legal costs: stamp duty for initiating judicial proceedings; legal representation fees

-------------------
European Papers, Vol. 10, 2025, No 1, pp. 55-96
ISSN 2499-8249 - doi: 10.15166/2499-8249/825