Software Specialists

Software Specialists

Before moving onto the MCC here is a quick update on the situation relating to UK CHIEF. As mentioned last time, the new development is CHIEF STE in which STE stands for Strategic Technical Enhancement. CHIEF has been a significant success story for HMRC over many years with supreme reliability which may be difficult to replicate. However the system is now quite old and technology moves forward all the time. The changes involved with SAD-H two years ago highlighted many of the issues with the changes affecting more than 30 separate systems, and the plan is to avoid this in the future. 

CHIEF STE remains currently scheduled to be delivered in the summer of 2012 but the CSP’s (Community System Providers) have a number of concerns which are shared by other parts of trade. One change involves the move from Edifact to XML which may well be significant; another is the change of supplier. AFSS has stressed for some time that all HMRC systems need to deliver a near guaranteed 24/7 service as international trade needs this to avoid heavy additional costs if delays are incurred.

Because the HMRC appreciate the need to get it right, discussions between them and their suppliers have been more protracted than first envisaged. No conformation date has yet been announced but as no specifications have yet been issued to the CSP’s or software suppliers it seems extremely doubtful that the original timescales will be met. Then we come to the really significant – or at least potentially significant – change which involves the introduction of the EU Modernised Customs Code. The original intention by the Commission was for this to be introduced totally in June 2013 but whilst this was thought tobe politically possible the technical issues were not properly considered. This will almost certainly result in a phased introduction with timescales still currently being discussed  in Brussels. There remain, however, a significant number of outstanding issues including the need to consider the impact of the Lisbon Treaty on the MCC and Member states have agrees to go back to the European Parliament to revise the date within the MCC allowing all issues to be properly considered. The legal text work needs to be concluded by June 2014.

Some of the significant areas covered by the

MCC involve:

a Centralised clearance

a Valuation

a Customs Debt and guarantees

a Self assessment

a Temporary Storage

It is impossible in an article on this scale to go into too much detail but there are some major implications. One is the growing requirement for AEO (Authorised Economic Operator) status to facilitate future simplifications. Take up for AEO has been slow  to date, but BIFA has recognised that

 serious thought should now be given to future application. Centralised clearance is seen as one of the priorities but is now virtually certain not to be available from June 2013. The actual process has still to be defined and there are issues around the collection and allocation of Duty and VAT. Self assessment follows on from this allowing the customs duty liability to be declared on a VAT-style return without the need for transaction based declarations to customs. The change to Temporary Storage is to classify this as a customs procedure which it previously was not. HMRC do not see any major changes to the current system although it may be developed to cover movements that are now made under national transit procedures. The EC proposal for guarantees for Customs debt involved a transaction based procedure which would be very onerous in terms of cost and in terms of procedures. HMRC has always opposed this as it would not simplify international trade movements – the intended aim of the Modernised code.

Finally valuation has a number of potential changes with major impact. These involve the removal of “earlier sale” provision and the introduction of “last sale”. Proposals also cover items such as royalty payments and the need for further information on the import declaration covering valuation. Suffice it to say that everything has a greater or lesser degree of impact on software systems and means that AFSS members have to continue to keep abreast of all developments. Fortunately we have good links with HMRC that enable this to happen.

AFSS (Association of Freight Software Suppliers) was formed in 1993 and brings together the majority of the leading suppliers of software to the freight and transportation industry. Members of AFSS supply not only software but hardware, communications and consultancy to companies of all sizes involved in freight and international trade. The commission aims to have the work on business process models finalised by around October and to have the legal text updated ready for alignment with the Lisbon Treaty. HMRC are pressing for a fully integrated plan identifying the key tasks for Member States and their trade partners so that a realistic revised implementation date can be agreed. The EC has visited a number of MS to understand their experiences and concerns and it is safe to assume that June 2013 will not be the implementation date. Estimates as to the new date are varied but it would seem that it is likely to be delivered in stages rather than in one big hit.

Ken Gower has been at the helm for the past 6 years following a career in freight forwarding, 11 Round Ash Way, Hartley, Longfield, Kent. DA3 8BT Phone: 01474 703453 Mobile: 07860 393191