The finale of a major innovation
The switchover to a single customs declaration system is entering its last phase. Automated Periodic Declarations (abbreviated as GPA in Dutch) and Written Periodic Declarations (SPA) will be phased out from the last quarter of 2019. To facilitate a smooth transition, Customs has made a separate project of this. IT-implementation Coordinator, Remko Dorrestein, and Sub-project Manager, Harry Pap, explain the current state of affairs.
GPA and SPA use procedures and licences that will lapse by virtue of the Union Customs Code (UCC) on 1 January 2021. What will the alternatives be? Dorrestein: “GPA and SPA companies will soon be able to choose from three declaration methods. In addition to the normal procedure, which is currently already available, one may also opt for registration in the administration of the declarant with an application notice to Customsand a periodic supplementary declaration. The third alternative concerns registration in the administration of the declarant plus a real-time supplementary declaration. These three alternatives were developed together with the business community. The implementation thereof will run in parallel with the new version of our declarations system AGS, which will be called DMS – Customs Declarations Management System – and in which the mandatory changes to the declarations dataset are central. This means therefore that companies will not have to modify their automation processes twice.”
Keeping an eye on new developments
“GPA and SPA declarants experience little disruption in their logistical process in the current situation,” says Pap. “Of the companies that use automated periodic declaration, for example, we have analysed the entire administrative organisation and assessed the internal control measures. The conditions that they must satisfy are similar to those for an AEO licence. Many are then also AEO licence holders. For the same reason, we deem companies that use SPA – the ‘paper’ alternative to GPA – trustworthy. However, those last declarations do not currently enter our declarations system directly. That is awkward, as we must consequently arrange the controls separately. That currently occurs administratively in arrears, for both GPA and SPA. To ensure that we further uniformize the controls in terms of approach and implementation and because the Union Customs Code makes electronic declaration mandatory, we would like to see the declarations done in DMS. In this way, we can also immediately satisfy the long-standing requirement of keeping an eye on developments for this type of declaration.”
What do the three declaration alternatives involve? “The first, that is following the normal procedure, means: submitting a complete declaration at the moment that you want to import the goods or place them under a customs procedure,” Dorrestein explains. “You do not need a licence to submit this normal declaration; registration suffices. This alternative is then also open to anyone. Many companies have such a registration, as well as their GPA, and submit all their declarations in AGS, so it is not new to everyone. If a shipment falls into a profile requiring a check, then the company must reserve a holding time for any physical control.”
“In fact, in this alternative, one can submit a declaration in advance,” says Pap. “For AEO licence holders, whether a shipment qualifies for a control consequently becomes clear earlier, meaning they can account for any delay in their logistical planning. Declaration alternative 2 strongly resembles the current GPA procedure. Companies that choose this may assume that we will disrupt the logistical process as little as possible and that we will perform administrative checks retrospectively. We will occasionally perform random spot checks. With alternative 3, we will also disrupt the logistical process as little as possible by performing checks based on individual arrangements. In addition to a number of random spot checks, we will select goods that are subject to statutory-control obligations based on profiles.”
To help the target group make their choices, Customs will inform companies about the conditions for the three alternatives. “For small declarants with fewer than a thousand declarations per month, we think that they must submit their declarations via the normal procedure,” says Pap. “For this target group, the economic advantages of alternative 2 or 3 do not, in many cases, positively weigh up against our efforts to manage the licence and maintain supervisory control. Not to mention the control measures that the company itself must take.”
What is the situation with VENUE, the system for simplified e-commerce declarations, which cannot continue to exist in its current state?* “This is being investigated now in the project,” says Pap. “Unlike for GPA and SPA, we already check e-commerce shipments for other things of topicality. In this regard, companies declare via an advance declaration with a limited dataset. But the simplified dataset makes selection rather complicated. What do you do if a company limits itself to information such as ‘audio module’? Does it concern a MP3 player, iPad or a car radio? Owing to the limited dataset, the possibility of submitting a VENUE declaration is linked to a licence, which is only issued to companies that we have checked out in advance.”
Shipments that fall under the existing exemption threshold of 22 euros are not currently processed in AGS and are profiled in another way. Pap: “If there is an obligation to pay VAT or import duties, then the company must, for this purpose, currently submit a supplementary declaration in AGS within several days. The current method must change in any case, because the exemption threshold lapses on 1 January 2021. The possible scenarios for the replacement of VENUE are therefore being investigated at this moment.”
Over and above any implications for the logistical process, the declaration system will work with new notification specifications flowing from the Union Customs Code. The change in the declaration format therefore has consequences for all the parties who now submit declarations via AGS, and not just for the licence holders. “Companies will have to analyse their own automation,” says Dorrestein. “Each data element must be examined. Is it subject to change? If yes, where is it processed in your software? One must run through all the functionalities and then change and test it if needed. Software suppliers will also have their hands full in the coming period, as many companies cannot or will not want to do it themselves.”
“On our side, we will ensure that our declaration system can cope with the flow,” adds Pap. “Nevertheless, we would prefer more certainty about any increase in volume beforehand. If we know which of the three declaration alternatives companies will choose, we will be able to better prepare for the switchover. Finally, we must also organise our controls according to this. For this reason, Customs wants to know what companies will choose no later – but preferably earlier – than June 2019 For as far as the entrepreneurs themselves are concerned, it is also good if they prepare their organisations in good time. We realise that various developments may compete for precedence, if there is, for example, a hard Brexit. Companies that do a lot of trade with the United Kingdom will probably have to change their logistics in order to comply with customs formalities. But that knowledge will again influence the choice for declaration alternative 2 or 3. In any case, the switchover deserves everyone’s undivided attention. Our advice is to contact your umbrella organisation, your customer manager or a Customs Business Contact Point if you want to know more.”
Customs has already started contacting umbrella organisations (via the Customs-Business Consultation forum) and specific target groups and will make every effort to communicate these developments from January 2019. Submitting a declaration via GPA, SPA or VENUE will no longer be possible from 1 January 2021. This deadline is fixed, irrespective of what Brexit will look like.
* The consequences for VENUE licence holders were not yet entirely clear when this article was published. Brussels is still looking at the reduced dataset and MOSS/i-OSS (VAT) for e-commerce shipments. VENUE licence holders will therefore be informed via tailored information.