As you may be aware, HMRC has been developing a new system for processing customs declarations for imports and exports. The Customs Handling of Import and Export Freight (CHIEF) will be replaced by the Customs Declaration Service (CDS) beginning with a phased launch from August 2018.
CHIEF is one of the world’s largest and most sophisticated electronic services for managing customs declarations, but it is nearly 25 years old and is running at capacity.
Planning to replace CHIEF began in 2013 and the final decision to proceed with CDS was made by the government before the EU referendum.
In a recent announcement HMRC confirmed that it is currently working on four major areas ahead of launch: integrating the 8 CDS system components; testing CDS to ensure it can correctly handle the potential increase to 255 million declarations every year; migrating traders from the existing CHIEF service to CDS; and ensuring that users are ready to make customs declarations in the new system.
We are concerned that HMRC is missing testing milestones and not responding to issues raised by systems suppliers, which are critical if HMRC is to avoid any failure and the inevitable knock-on effect to cargo clearances and delays.
We are hopeful that there may be some positive feedback on these concerns at the forthcoming HMRC CDS update session in London on the 10th April.
Norman Global will continue to work closely with HMRC and our systems vendors, to ensure that the eventual migration from CHIEF to the Customs Declaration Service (CDS) takes place in a controlled way and that we have the necessary support during the transition.
We will share information with our customers, when appropriate, to build awareness and understanding of any Customs regulations that are changing, and to make the necessary preparations to be ready to make any new declarations.
Authorised Economic Operator (AEO) status is becoming increasingly critical ahead of Brexit and we will continue to liaise with HMRC on future enhancements to the AEO scheme once the UK leaves the EU.
Successful implementation of CDS will provide a flexible service, which will meet the needs of the Union Customs Code or managing changes to tariffs, Free Trade Agreements and trade quotas.
HMRC is ensuring that CDS can manage the volume of declarations anticipated when the UK leaves the EU, which may result in an additional 199 million customs declarations, bringing the total to 255 million in a twelve-month period.
The department is actually testing the scalability of CDS to manage 300 million declarations a year, with a peak of 100 declarations per second. The Department is also testing the scalability of the current system, Customs Handling of Import and Export (CHIEF), as a contingency option.
If you are a Norman Global Logistics customer, you should not notice any impact from these system changes, as we will manage all aspects of the transition.
Notwithstanding our concerns outlined above, CDS is due to be phased in between August 2018 and early 2019. CHIEF will continue to be available during this time.