Tackling mismatches together

A new form of registration of sea freight gradually puts an end to unnecessary work and annoyances for both Customs and business.

Although the number is steadily decreasing, Dutch Customs still has to cope with 15,000 monthly mismatches between declarations for temporary storage and subsequent declarations. A new form of registration of goods arriving by sea should gradually put an end to the current practice of retrospectively rectifying incorrect subsequent declarations. “Some declarers will have to get used to the new method”, say Project Manager Peter van Olst and Implementation Manager Wim de Viet. “But it will ultimately benefit all parties.”

All goods unloaded in the Netherlands require a ‘summary declaration for temporary storage’, generally provided by the cargo broker. Afterwards these goods are assigned a ‘subsequent customs destination’: they are imported, stored, transported or transited. It is important that the summary and subsequent declarations can be automatically linked to monitor the next part of the goods' journey. When this does not happen, it creates a mismatch.

 Customs NL is now putting an end to these mismatches with what is referred to in the corridors as the ‘Container Release Notice’. Due to the major impact this will have a decision was taken to perform the roll-out in stages (see text box). This means that import declarations will be tackled first, followed by transport declarations. Moreover the changes did not come out of the blue. “I have been informing the business community about this transition for at least two years now”, says De Viet. “My primary target group comprises the twenty percent of entrepreneurs that are good for eighty percent of all mismatches.”

 Minor error, major consequences
Three and a half years ago, the figure was at 60,000 mismatches per month, out of a total of 320,000 items to be matched. De Viet: “We now have to cope with 15,000, a quarter of that. The vast majority – 9,000 – involve differences in weight. The shipment number/BL number is good for approximately 3,000 mismatches, the so-called double liabilities – whereby the customer refers to several BLs – around 500. The rest concern double rectifications, or multiple subsequent declarations for a single shipment. We recently had a car importer that submitted a declaration twice for the 1,200 cars he was importing. 'Yes, I made a small mistake’, he replied. This meant that he alone was responsible for 2,400 mismatches.”

Inherited from the past
The goodwill with regard to incorrect subsequent declarations is actually an unwelcome element inherited from the past, explains Van Olst: “Until the end of 2003, customers came to us with their paper documents, and we examined whether there was a match between the summary and subsequent declaration. If so, the declaration was validated. In the case of a mismatch we circled the incorrect field in pencil and sent the customer away with the message: ‘Come back when you’ve sorted it out’. In 2004, we shifted to the electronic summary declaration, but we didn’t have an effective matching module. At the time it was expected that large numbers of declarations would be rejected and that we would create chaos in Rotterdam in a month or two. This is why we opted for retrospective verification and correction, with the expectation that entrepreneurs would clean up their act and ensure a minimum of mismatches. Unfortunately this did not happen. Various consultations with the business community had little effect. Moreover our systems were not capable of rejecting incorrect declarations. So we did not encourage enterprises to do things properly either.”

A great deal of unnecessary work
From an average of 60,000 to 15,000 seems like a positive trend. And the lion’s share of declarations – 96% – are filled in properly, Van Olst and De Viet confirm. Nevertheless all the mismatches create a great deal of unnecessary work for their service. Customs NL is going to enforce the compulsory match via adjustments to the Customs Manifest, AGS and NCTS systems, partly based on requirements from Brussels. Van Olst: “Technically the adjustments are quite manageable, but they will have a significant impact on the business community. In the event of a mismatch the declaration is returned and the motto resounds: first change it, or you will not be able to take the container. On the other hand: if an error message appears, you can immediately change one thing or another and submit the declaration again right away.”
“For every rejection resulting from a mismatch the customer receives a statement with the reason”, explains De Viet. “This is supplied in the form of a notification that the shipment is unknown, the weight inadequate or that there is a case of multiple liabilities. Examples include a cargo broker that submits two shipments with the same number, within a period of 90 days.”

 Preventing premature declarations
The new procedure involves more consequences. De Viet: “At the moment businesses can still submit a declaration before the goods actually arrive in Rotterdam. In fact, this is not permitted, but we simply did not have a system that rejected these premature declarations. By making it impossible to submit a premature declaration we can anticipate the risks of declarations with an incorrect tariff. For example, if your ship arrives on a day when an anti-dumping tax comes into force, it is very tempting to submit a declaration for the shipment a few days in advance.”

Careless mistakes
The two managers propose that the advantages for the process are obvious. Van Olst: “By enforcing accurate declarations, we can use our risk analysis in a more targeted manner. Currently the focus is still unjustly on the customers that cause mismatches, whereas it often boils down to careless mistakes.”
“It is also a terrible nuisance for businesses”, says De Viet. “Because each month we cannot locate a few thousand mismatches in our systems. This means, for example, that we have to ask the customer under which document number the container was removed. If the declaration is accurate, these questions are unnecessary. And the twelve customs officers that currently have to retrospectively rectify the incorrect declarations submitted by the business community, can soon be deployed to perform other tasks. Of the hundred or so customers with whom I have spoken in recent years, nobody views the new procedure negatively. Quite the opposite, many say: you should have done this years ago. Finally it will provide all stakeholders with clarity, much less work and better reporting.”

“We are placing the ball back in the right court: with the business community”, believes Van Olst. “It will take some getting used to at first. But in the end this approach will result in corrective action and the number of mismatches will quickly decrease. And let’s face it: a little effort will surely guarantee the quality of a company’s declarations?”

Roll-out in stages
The new goods registration procedure is broken down into three stages:
• stage 1 (1st Quarter 2017): verification of import declarations, including of a match between the prior declaration and the temporary storage declaration, before a ship arrives and of the subsequent declaration after arrival.
• stage 2 ( 2nd Quarter 2017): ditto for transport declarations.
• stage 3 (3rd Quarter 2017): link between all types of declarations and advance notification of pre-arrival checks. For ongoing verifications from entry goods for which a customs declaration has been submitted will not yet be released.

The project will culminate at the end of next year with the introduction of Container Status Information (CSI). This notification states that a customs declaration has been submitted for all goods in a container that were declared on entry, and that the goods are released for transport from the port to the hinterland.

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