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Customs Handling of Import & Export Freight (CHIEF), the computer system of the United Kingdom's revenue and customs services, HMRC, is soon to be replaced by the Customs Declaration Service (CDS). The major reasons for this switch are that the old CHIEF technology is inflexible, expensive, and incapable of handling large volumes. This changeover will be vital to ensuring trade continues to operate smoothly if customs declarations for the UK skyrocket overnight on March 29, 2019 as a result of Brexit. HMRC estimates an annual increase from 55 million customs declarations in previous years to 255 million after the UK exits the EU.
4 Key Changes in CDS
More Flexible Language Structure The language used to communicate declaration messages between traders and customs authorities in the CHIEF system is Electronic Data Interchange for Administration, Commerce and Transport (EDIFACT). EDIFACT was adopted by the United Nations as an international standard in 1987, and since then programming languages have come a long way. CDS uses Extensible Markup Language (XML), which has the advantage of being readable by both people and machines.
Adoption of WCO and UCC Data Model CDS is based on the WCO and UCC Data Model, which standardizes data elements and data sets per customs flow. This will introduce new but necessary data elements that do not exist in CHIEF to accommodate procedure and process changes and comply with the EU Customs Data Model and UCC requirements.
Change to CDS Reference Data The data returned by CDS will be different than the information that is currently received under CHIEF. For example, CDS will use Declaration Reference Numbers instead of Entry Numbers. Also, CDS will use DMS messages as customs responses to indicate whether goods are accepted, released, or selected for a documentary of physical control.
Registration is Required Traders will need to register themselves to CDS in order to submit declarations via Application Programming Interfaces (API), then re-register every 18 months. Failure to register can lead to delays in business processes, as unregistered traders will not be able to submit declarations.
Although on track with its key milestones, it is still unclear whether go-live for CDS will hit its target of January, 2019. The British customs authorities’ timeline consists of seven Trade Test Milestones (TTMs). TTM5, which includes the simplified and supplementary declarations to release goods into free circulation or placing goods in a customs warehouse, will be released by the end of August. At this point, the HMRC will begin migrating a small group of traders to the system. During TTM6 and preparation for the final release, TTM7, HMRC will add remaining functionalities to support import and export while at the same time bringing on higher volume declarants. For the short-term, CHIEF will run in tandem with CDS to provide assurance during the transition.
Switch to CDS with the Brexit-Proof CAS Solution
Based on feedback C4T has received from its clients, the projected impact on the number of declarations to be processed is enormous. Several companies reported an estimated increase of 30% of their total number of customs declarations. Moreover, there will be a significant number of companies that will be dealing with customs formalities for the first time. One of the major concerns of these companies is who will fulfil the import formalities at destination in the UK or in the EU for flows to clients that have never been confronted with customs formalities.
Modern customs software solutions offer a centralised platform that automates your customs declarations and applies local legal requirements. At C4T, we take you one step further. We designed CAS, a SaaS that automates your customs declarations. CAS is Brexit-proof, as it is already compatible with CDS, so you won’t have to worry about adaptations to your IT systems after the UK leaves the EU. But we knew we could still do more, so we designed a specific feature to help your company thrive in a post-Brexit world: a ‘single message-double filing’ function that simultaneously addresses export customs formalities from the country of departure (UK or EU) and import formalities in the country of destination (UK or EU), combined with transit to ensure frictionless border crossing.
When you take into account the additional costs, administrative burden, and delays Brexit will generate, choosing to automate the management of your customs processes is one of the best ways to accelerate your import and export operations and save money. CAS can be put into production quickly, so you will be prepared well in advance of Brexit.