Legal Brief
ASM Chairman Seeks Greater Flexibility Over Customs Changes
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The head of Agency Sector Management(ASM) has cautioned the European Union (EU) to be more flexible in the implementation of the next stage of its overhaul of European Customs procedures, or risk major disruption to supply chains next summer when they take effect.
Peter MacSwiney, ASM chairman, has echoed industry-wide concerns that businesses will not have enough time to get ready for the pre-arrival and pre-departure information submission requirements when the new Import and Export Control Systems become live on 1st July 2009.
Mr MacSwiney says: “We are concerned that the full technical specifications for the new systems are not yet fully established. It is now just under a year away from the date by which companies must provide the required data to the relevant Customs authority as part of the Pre-Arrival and Pre-Departure (PAPD) security declaration programme leaving us only one year to make the substantial and necessary changes to systems and procedures.
“The EU claims that member states are well advanced with their implementation plans for exportation (ECS2) and transit (NCTS4) which will facilitate the submission by trade of pre-departure data. But, it has expressed concerns with the plans to implement across the EU member states an Import Control System (ICS) which will enable pre-arrival data to be submitted and checked for security clearance.
“The ongoing delay in the provision of these specifications almost guarantees the implementation next July will be problematic, risking a potential brake on EU-wide export activity that can only harm the EU’s bottom-line.”
“In light of this, ASM is asking the EU to consider taking a more flexible approach over the imposition of the new ICS / ECS regime.”
ICS/ECS is designed to facilitate communication of Customs information between member states’ Customs authorities about “third country” exports that originate in one EU country, but leave the EU through another state. Currently indirect exports use SAD (Single Administrative Document) travelling copy 3 to identify to Customs, at the point of exit from the EU, that the consignment has been placed under export procedure in the originating member state. This confirms that the goods have been exported from the EU from the originating member state and, therefore, satisfies requirements for VAT zero-rating at export.
Mr MacSwiney adds: “By legislating for PAPD, the EC is seeking to establish a common EU-wide standard level of protection in customs controls for goods brought into, or dispatched from, the European Community to take effect from July 2009.
“As can be appreciated, the PAPD programme is not just grandiose in concept, but is proving equally daunting in terms of practical implementation. The complexity of the international supply chain, coupled with the need for 27 member states to agree on common standards, as well as the cost of providing individual IT platforms, is proving very difficult for both the trade and the Commission to reconcile. Even when the functional and technical specifications are agreed, it will take at least 18 to 24 months after sign off before the programme can be considered for implementation.
“The EU has sailed close to the wind before in the implementation of new Customs procedures. We recall how close we came to meltdown as an economic bloc with the implementation of SAD-H. That situation was saved when the EU listened to interested parties, like ASM, and adjusted their implementation plans accordingly. They must do the same with ICS/ECS to give the industry more time and spell out the specifications now, to avoid a potential administrative roadblock. The goal of July 2009 is looking increasingly unlikely.”
Mr MacSwiney says: “We are concerned that the full technical specifications for the new systems are not yet fully established. It is now just under a year away from the date by which companies must provide the required data to the relevant Customs authority as part of the Pre-Arrival and Pre-Departure (PAPD) security declaration programme leaving us only one year to make the substantial and necessary changes to systems and procedures.
“The EU claims that member states are well advanced with their implementation plans for exportation (ECS2) and transit (NCTS4) which will facilitate the submission by trade of pre-departure data. But, it has expressed concerns with the plans to implement across the EU member states an Import Control System (ICS) which will enable pre-arrival data to be submitted and checked for security clearance.
“The ongoing delay in the provision of these specifications almost guarantees the implementation next July will be problematic, risking a potential brake on EU-wide export activity that can only harm the EU’s bottom-line.”
“In light of this, ASM is asking the EU to consider taking a more flexible approach over the imposition of the new ICS / ECS regime.”
ICS/ECS is designed to facilitate communication of Customs information between member states’ Customs authorities about “third country” exports that originate in one EU country, but leave the EU through another state. Currently indirect exports use SAD (Single Administrative Document) travelling copy 3 to identify to Customs, at the point of exit from the EU, that the consignment has been placed under export procedure in the originating member state. This confirms that the goods have been exported from the EU from the originating member state and, therefore, satisfies requirements for VAT zero-rating at export.
Mr MacSwiney adds: “By legislating for PAPD, the EC is seeking to establish a common EU-wide standard level of protection in customs controls for goods brought into, or dispatched from, the European Community to take effect from July 2009.
“As can be appreciated, the PAPD programme is not just grandiose in concept, but is proving equally daunting in terms of practical implementation. The complexity of the international supply chain, coupled with the need for 27 member states to agree on common standards, as well as the cost of providing individual IT platforms, is proving very difficult for both the trade and the Commission to reconcile. Even when the functional and technical specifications are agreed, it will take at least 18 to 24 months after sign off before the programme can be considered for implementation.
“The EU has sailed close to the wind before in the implementation of new Customs procedures. We recall how close we came to meltdown as an economic bloc with the implementation of SAD-H. That situation was saved when the EU listened to interested parties, like ASM, and adjusted their implementation plans accordingly. They must do the same with ICS/ECS to give the industry more time and spell out the specifications now, to avoid a potential administrative roadblock. The goal of July 2009 is looking increasingly unlikely.”
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