Preparing for the New Customs Declaration Service
4 minutes to read
By Hemisphere
The UK government is shaking up the customs process for importers and exporters, with the phased rollout of the new Customs Declaration Service (CDS) starting from August 2018. It will replace the current Customs Handling of Import and Export Freight (CHIEF) system. Here, we cover the key details of the new system, outline how Hemisphere is implementing it, and what it means for our customers.
Introducing CDS
The current customs declaration system for the international movement of goods is known as CHIEF – Customs Handling of Import and Export Freight. While CHIEF remains broadly fit for purpose, the system is almost 25 years old, and as such can’t be easily adapted to new requirements. While the decision to replace CHIEF with the new Customs Declaration Service was taken before the 2016 referendum vote to leave the European Union, having the new CDS system in place means the UK will be better placed to scale custom declarations processing to handle any potential increases in volume that result from the UK’s exit from the EU.
Key differences between CHIEF and CDS
Traders who import or export goods outside the EU currently use CHIEF to process declarations for goods entering or leaving through ports and airports. The system allows businesses to complete customs information electronically, and calculate and pay the correct taxes and duties.
CDS will offer the same functionality, but with significantly expanded features, including the ability to view previous import and export data on pre-defined reports, check tariffs, apply for new authorisations and simplifications, and check duty deferment statements. It will also offer a range of online self-service tools, guides and checklists.
As part of the new system, traders will be required to provide some additional information for customs declaration, in order to align with the World Customs Organisation Kyoto Convention (currently implemented in the UK through the Union Customs Code).
Timescales for CDS implementation
From August 2018, a small group of importers have already started to make declarations on CDS, and from November 2018 all import declarations will be able to be submitted on CDS. There hasn’t yet been a formal implementation date revealed for when export declarations will start using CDS – however, the government expects to have the system fully phased in by early 2019. CHIEF will continue to run for a transitional period after CDS becomes live to ensure trade continues smoothly while the new system is bedded in.
What it means for us
At Hemisphere, we have been working on implementing a new system that is compatible with CDS and will allow us to submit declarations going forward. Our own staff and our software provider have been attending seminars to ensure we are all kept up to date with the requirements and implementation of CDS. We are working closely with our software provider to ensure a seamless transition onto the new system, and we will shortly be starting to train all our staff to work with CDS.
What it means for our customers
Hemisphere will continue to submit customs declarations on behalf of our customers. However, CDS requires more information to be provided than CHIEF, which means we will need to ask our customers for these additional details. For example, if you have a deferment account, we will need to know your guarantee number in addition to your deferment number. We will also need to know more about the relationship between you and your supplier, and how this relationship affects the price of the goods.
Customers may also see a change in the customs documentation we send, as the current format of the C88 and E2, which show details of the shipment declared and the amount of duty and VAT paid at import, are likely to change. Needless to say, we intend to work closely with all our customers to ensure the transfer from CHIEF to CDS goes as smoothly as possible. If you are an existing or new customer of Hemisphere and have any queries or concerns about the forthcoming changes, please don’t hesitate to get in touch.