On March 1, 2023, the second implementation phase of the EU Import Control System 2 (ICS2) customs program will begin. For actors involved in the clearance, dispatch and transport of freight, express or mail consignments to or through the EU by air, extended obligations for advance data reporting will then apply. Damaris Lutz, Regional Sales Manager Customs Solutions at Hermes Germany, explains which new obligations are associated with ICS2 and which companies are affected by phase 2.
What is the Import Control System 2 (ICS2) and what is its purpose?
Damaris Lutz: The Import Control System 2 (ICS2) is a centralized cargo information system newly introduced by the EU for the pre-declaration of goods to strengthen customs risk management. The electronic pre-declaration is intended to ensure greater transparency in the import process and also make potential hazards identifiable at the point of departure in the third country.
How is ICS2 being implemented?
Damaris Lutz: Since March 2021, economic operators have been gradually obliged to transmit all relevant data to ICS2 by means of an Entry Summary Declaration (ENS) even prior to the arrival of the consignment of goods at the external EU border. The introduction will take place in phases, staggered according to the type of service in the international movement of goods:
Phase 1 commenced on March 15th 2021 and covered air freight prior to loading and mail and express shipments.
Phase 2 will follow starting 1st of March 2023 and will apply to all air freight shipments as well as mail and express shipments prior to arrival at the EU external border.
Phase 3 includes all goods transported by sea, road, rail, mail and express from 1st of March 2024 onwards.
Who is affected by the obligation to report in advance in phase 2?
Damaris Lutz: With phase 2, all forwarders, express courier services and operators of postal services that transport mail, courier and general cargo shipments by air to or through the EU (including Norway and Switzerland) are required to provide advance data reporting. Service operators bear the legal responsibility for providing the data and must either report it directly via ICS2, or submit it to the carrier for filing. Postal and express courier service operators, who were only required to submit limited data in Phase 1, must also coordinate with carriers in the future to submit all required declarations. If they fail to do so, customs will not continue to clear the shipments/loads at the EU customs border. Deficient declarations may be rejected or result in penalties for non-compliance.
The advantage of ICS2: Submitting data via web-based interface
Damaris Lutz: The new system is internet-based and enables economic operators and partners in the supply chain to submit security data via the service interface STI (“Shared Trader Interface”) of the European Commission easily and independent of the national customs clearance systems (such as ATLAS in Germany). Alternatively, the member states have the option of setting up a national service interface themselves to merge the data in the Common Repository System.
The central customs information system enables:
- improving security in the supply chain and, in the event of hazards, intervening in the most appropriate place
- Increased protection of EU citizens and the internal market from security threats and dangers.
- easier identification of high-risk consignments by EU customs authorities
- appropriate and targeted customs measures at the external borders in crisis situations
- the facilitation of cross-border clearance for legitimate trade
- improved exchange of information between economic operators and EU customs authorities
What changes compared to the previous ENS data transmission?
Damaris Lutz: ICS2 replaces the current import control system. The transmission of the Entry Summary Declaration has already been mandatory since December 31st 2010 – however, this data must now be forwarded to the new Import Control System.
The entry declaration must already be submitted to the responsible customs authority before the shipment is loaded. In addition, ICS 2 requires a much more precise data transmission – for example, those responsible must document the first six digits of the Harmonized System (HS) code in the declaration instead of four, which had previously been the requirement.
A new feature is the possibility of joint submission of data by different actors in the supply chain. Importers are now also required to submit data to carriers and forwarders, who previously bore full responsibility for the content of the entry summary declarations.
The system will support the following processes:
- Submission of the ENS with preliminary cargo information to customs
- Security risk analysis by customs
- Arrival of the means of transport
- Presentation of goods to customs
- Customs control of the goods, if necessary
How can companies implement ICS2, what do they have to consider?
Damaris Lutz: First of all, an access for the EU Trader portal is required – this is a web application with an integrated technical interface for the customs software. Companies that do not yet work with such access must acquire it. In order to be able to provide high-quality and precise data in the future and to be prepared for the exchange of information, the IT infrastructure in particular should be expanded, developed or updated accordingly. It will also be crucial to analyze the business processes with regard to the new requirements and to adapt them accordingly. In order to make the necessary processes transparent, all employees involved should be trained accordingly. Companies that will not be addressed in phase 3 until 2024 should also begin their preparations in good time.
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Related links: Detailed information about the new ICS2 at the EU Commission.