Customs territory

A customs territory is a geographic territory with uniform customs regulations and there are no internal customs or similar taxes within the territory. Customs territories may fall into several types:

• A sovereign state, including a federation
• A trade bloc that has a customs union
• An autonomous or dependent territory that is granted by the sovereign government some degree of independence in foreign trade and customs policy.^{[citation needed]}

There are also some unregulated lands (usually uninhabited) not part of any customs territory.

As of 2010,^[update] most customs unions rarely operate as a single entity and are represented in relations with other customs territories either jointly by their member state governments and the union institutions or by only the member states. Thus, in practice, they rarely appear as a single customs territory and instead they operate as a multiple separate customs territories that have the same or similar customs tariffs. The European Union (EU) is the only trade bloc in which the union institutions have exclusive competence over the common external tariff and thus sign and ratify agreements with foreign states without direct participation of the EU member states.^[1] The EU is also the only trade bloc member of the World Trade Organization, but the EU member states also continue their own separate memberships, as not all of the WTO issues fall within the scope of exclusive EU competences^{[citation needed]}.

The governing organs (government or other responsible administrative entity for the states and territories, secretariat or similar international organization body for the trade blocs) of the customs territories negotiate and sign trade agreements. In some cases the negotiations are conducted by a trade bloc secretariat, but the actual agreement is signed by the member states of the trade bloc. It is also possible for a group of customs territories, that do not form a customs union (regardless if they cooperate as a different type of trade bloc), to negotiate trade agreements together and to sign the resulting agreement individually (for example, the European Free Trade Association).

A customs territory usually has inspection stations at its borders. There can also be border checks between two parts of the same customs territory. For example, there are border checks between the Schengen Area portions of the EU customs territory and those portions in the Common Travel Area formed by the United Kingdom, Crown Dependencies, and Ireland^{[citation needed]}. Another example is the border checks between Israel and the Palestinian Territories, which are in a customs union. The European Union example is particularly complicated, since it also has different boundaries for EU VAT area, the EU excise duty area, the area where EU law applies, and the area considered by the EU statistics agency^{[citation needed]}.