The constant battle against mismatches

Incorrect, incomplete, or inconsistent declarations remain open in Customs’ systems – with all associated consequences. What can entrepreneurs do to prevent this?

Both Customs and the business sector have an interest in formalities being dealt with quickly. However, in practice, this is sometimes easier said than done. As becomes evident, for instance, from the large amount of mismatches between summary and subsequent declarations.

Customs officers Gert Veenvliet and Loekie Lepelaar both work in the Port of Rotterdam – the former as Entry & Exit team leader, and the latter as a member of Customer Management staff. Checking declarations is one of the key tasks performed by Veenvliet and his team. “We for example check whether the ATO (Temporary Storage Declaration) has been submitted in time, that is, within the statutory term. And whether the declaration is complete and correct. In addition, a subsequent declaration must be filed for each item listed on the ATO that corresponds thereto. The checks were and are generally performed subsequently and automatically. And in doing so, we discover significant differences between the summary (ATO) and subsequent NCTS (export) and AGS (import) declarations. These result in mismatches and, ultimately, in open (part) shipments on the ATO.”

Increased likelihood of errors
What do such mismatches entail? Veenvliet: “Let me use box 40 on the subsequent declaration form as an example. If you forget to enter a figure or enter the letter ‘o’ instead of a figure, the system will tell you that the forms do not match. And that results in an open item on the NFV-list (Non-Tax Obligations). Such mismatches may also result from incomplete declarations, differences in weight, or a difference in the number and types of packages. Suppose that your trailer contains ten shipments and you submit a subsequent declaration for nine of them. You will exit the gate, sure, but the tenth shipment will remain open in our system. It cannot be automatically cleared.”

Lepelaar adds: “As can be expected, grouped shipments, where smaller shipments by multiple entrepreneurs are bundled to form one bigger load, are particularly prone to errors, as they involve multiple declarations. The likelihood of errors arising is larger than is the case for a company that every day transports a lot containing one type of items, like whisky or matrasses.”

Explosive growth
Up until the Brexit, the number of open items requiring additional investigation was relatively stable at a yearly average of some 100,000 mismatches. This number increased to some 600,000 a year after the Brexit, despite all attempts by Customs to inform the business sector. Lepelaar: “We have bombarded entrepreneurs with communications, sent letters – even on behalf of our Director-General – and organised a great many information meetings. We also directly contacted companies shipping packages that often result in mismatches. We called them, e-mailed them, wrote to them. And after they made all sorts of promises that they would improve their conduct, we would find a minor, insignificant improvement of the situation. So there was very little progress made.”

Request for clarification
How does Customs tackle those mismatches? Veenvliet: “Everything not matched automatically is still open in our systems. In order to investigate the causes thereof, we employ all sorts of tools, including terminal systems print-outs. We have a dashboard that allows us to link the various declarations and retrieve the subsequent schemes. If 1,000 packages were declared, while the ATO only lists 800, this means you wish to take along more than what you initially declared. And that’s not possible. In such a case, we send the shipbroker an e-mail, explaining that we have discovered a difference of 200 packages. This party then has to prove that these packages have been declared. The same applies in reverse situations: if the ATO lists more packages than the subsequent declaration does, proof must be provided that the remaining packages have been declared. If such is lacking, we will issue a request for payment, including a fine.”

What happens if a company does not respond to a request for clarification? Veenvliet: “You’re given 2 weeks to comply with our request. If you fail to respond to our request for additional information, we will first send a reminder. After that, we can start imposing fines. Incidentally, the vast majority of declarations can easily be cleared. Because if we find that a zero or X is missing, we will resolve the matter ourselves for the sake of expedience. However, this actually means we are correcting the mistakes made by customers, meaning they are relatively unbothered by it, even though they have caused the mismatch.”

Resolving mismatches is costing Customs a lot of time. Veenvliet: “Before the Brexit, we had some 12 members of staff deployed checking all open shipments. This number has doubled this year, which is therefore mainly caused by the Brexit. Our Customer Management service is putting a lot of energy in holding customers causing mismatches to account. These are predominantly importers and exporters. Nevertheless, we still have a backlog and will still be having this problem as long as the declarants don’t change their behaviour.”

Upcoming changes
The good news is that the mismatch problem will slowly disappear with the entry into force of the Container Release Notification (CVB). “This solution forces companies to file a correct declaration,” Veenvliet says. “Declaring a weight in excess of that listed in the ATO will no longer be possible. A container may only leave the terminal once a match exists between the ATO and the subsequent scheme or declaration. It will take a while before we start noticing the positive effects, though, as the CVB will be implemented in four phases.”

“So far, companies do not seem to feel a need for improving their declaration behaviour,” Lepelaar confirms. “Ever since 4 October, we have been checking whether the AGS import declaration data match those of the ATO. This import declaration includes the advance declaration, submitted before the arrival of a ship, and the subsequent declaration, filed after its arrival. Hopefully, the problem of mismatches and open shipments will be a thing of the past following the implementation of the fourth phase of the CVB. Customs will no longer release subsequent declarations as long as items are open.”

Good faith
Veenvliet and Lepelaar continue to be amazed by the large amount of mismatches. “We could understand it if the matter at hand was a complex one,” Lepelaar says. “But the things we’re asking are rather uncomplicated. It is of course possible to erroneously type the letter ‘o’ instead of the figure zero at some point. But we find that certain parties systematically fail to complete certain boxes, or complete them wrongly. So the issue is not just one of carelessness, but also of unwillingness. Of course, there will always be parties that set different priorities. Thankfully, we do find that many of our partners are willing to do the right thing. The Association of Rotterdam Shipbrokers and Agents, for example, is trying to effect a reduction in the number of fines in cooperation with us. It discusses the matter with its members. If all actors in the chain would shoulder their responsibilities, a lot of stagnation could be prevented.”

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