The global supply chain faces new challenges with the European Union’s (EU) focus on creating a single customs interface and approach for its current 27 member states. The most recent security legislation, the import control system (ICS), is similar to the international initiatives in advanced manifest filing (AMS) in that it requires advanced shipment notification to customs authorities prior to goods arrival in the EU in the form of an entry summary declaration (ENS). That means as of January 1, 2011, the burden of supplying advanced shipment information for products en route to the EU, or going to other destinations via the EU, rests with the carriers.

A critical challenge faced by carriers is having access to accurate data on a timely basis. In certain cases, carriers only have partial data, and rely on importers, exporters and freight forwarders to supply the missing pieces such as authorised economic operator (AEO) status, commodity and dangerous goods codes, consignors, contents, methods of payment, etc. The complexity of the information required, combined with the fact that each EU country uses different data formats and communication protocols, may make it challenging for operations to meet ICS requirements in a timely and efficient manner. As a result, they run the potential risk of delays and penalties.

When selecting a carrier for EU shipments, exporters and importers should consider the following questions:

  1. Can the carrier’s system automatically manage data formatting, information distribution and compliance in accordance with ICS requirements?
  2. Do they have processes in place to perform data validation?
  3. Will their system issue automatic notifications of missing or erroneous data? (This is an important consideration, given that there is the potential for delays relating to inaccurate or missing data.)
  4. How do they manage exceptions?
  5. Can they accept application data from multiple trading partners?
  6. What safeguards are in place to ensure all filings are complete and materially error-free?
  7. Do they have complete auditing and reporting capabilities?

With ICS deadlines looming, exporters and importers need to ensure that their carriers have the resources in place to support their compliance efforts. This need will only continue to grow as more legislation is introduced in the interests of improving global supply chain security. Leveraging a single point of access to manage multiple data entry and filing requirements will become a key resource for ensuring compliance with current legislative requirements while mitigating the risk of errors, delays and penalties.

For more information email [email protected]

Written by Jonathan Wasserman

Senior Vice President, Global Trade Compliance at Descartes