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Greetings!
The world of customs law is certainly being inundated with new procedures, laws, requirements, directives. Whether it is the Modernised Customs Code, Authorised Economic Operator status, the raising of the bar for customs (re)applications, the UK Bribery Act or the UK Finance Act to name but a few, businesses are facing the task of getting their heads around a plethora of new obligations and subsequent risks and liabilities. In this edition of "Anything to Declare" we look at yet another impending change to the international trade system with the UK introduction of the Import Control System in November of this year.
Unlike some of the changes alluded to above, the introduction of the Import Control System will affect everybody involved in international trade and businesses should look to begin planning for its introduction sooner rather than later or face potential supply-chain delays, additional costs and potential penalties.
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| The New EU Import Control System
How will it affect EU Importers? |
As part of the safety and security amendment to the EC Customs Code, carriers will be required to provide pre-arrival information in a specified format for all cargo entering the EU regardless of the eventual destination of the cargo. This system is known as the Import Control System (ICS).
Why has this been introduced?
The ICS is one of three inter-related concepts introduced by the safety and security amendment to the European Customs Code:
· Common computerised risk-management
· Mandatory prior notification (ICS)
· Authorised Economic Operator (AEO)
These concepts have been introduced in an attempt to manage the increasing risks posed by international terrorism and a vulnerable international supply chain. The main difference between ICS and AEO is that whereas AEO is a certification programme whose aim is to differentiate between "safe" and "risky" traders, ICS is a transactional program that will enable customs authorities to evaluate shipments prior to their arrival in the EU.
When will this come into force in the UK?
ICS Testing will be implemented on 2 November 2010 in anticipation of the EU-wide "go-live" date of 1 January 2011.
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Lack of upfront investment costs company an ROI of 1500% |
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The ECJ was recently called upon to make a judgement in a case where poor customs planning and a lack of understanding of the legislation resulted in a company mistakenly applying a relief from additional duties only to be hit with a post-clearance demand from Customs.
Isaac is a UK incorporated company with a branch in Germany. It has an office and a warehouse in the UK and a distribution centre in Germany. Isaac imports bicycle parts from China into the UK and then sends them to Germany for distribution. All of the parts imported by Isaac were 'essential bicycle parts' covered by an Exempting Regulation as the goods were liable to Anti Dumping Duty. Isaac imported the goods under End-Use control using CPC code 94.00.69 in order to gain exemption from ADD. Between November 2003 and April 2005, Isaac made 33 importations of less than 300 units per month (this will become relevant later on). At the time of import, Isaac had not read or considered the provisions of the European Customs Code, the Implementing Regulations or the Exemption Regulation but employed an import agent to deal with the formalities.
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