The EU is one of the biggest players in the international market for trading goods. As a result, many countries around the world wish to import all manners of products there. Approx. EUR 3 trillion worth of goods were imported into the EU in 20221. If companies wish to import their products at all, they must comply with all the legal requirements related to product safety. The EU is now seeking to protect its outer borders and provide transparent customs controls. The Import Control System 2 (ICS2), a cargo information system for registering and checking goods entering the EU before they arrive, is an important control tool for the customs authorities.
ICS2 should no longer be an unfamiliar topic for freight forwarders. The first part of the three-stage transition strategy for importing items into the EU already came into effect on 15 March 2021. The aim is to gradually replace the ICS1 process, which has been in effect since 2011. Shippers have had to send the Pre-Loading Advance Cargo Information (PLAC1) for each air mail and air express consignment to the system for advance checks as part of the first stage of ICS2. The information provides an additional level if safety and security that is effective even before the goods are loaded: the customs authorities receive the most important data about the consignment such as the EORI number (Economic Operators Registration and Identification), HS codes (Harmonised System) or an extensive description even before the goods leave the ground. Using this information, they can then decide whether the cargo may be shipped or not. More information may possibly be required and the customs service communicates this in the form of an RfI (Request for Information).
The second stage of ICS2 has been in force since March and now affects the entire air freight industry. Additional rules have come into effect, such as the need to specify the entire data set of the Entry Summary Declaration (ENS), register the goods’ arrival and send a message to the customs authorities that the goods will be taken to a customs control point – before they are loaded on board the aircraft as well.
The new regulations involve a great deal of work and expense for air freight forwarders. However, ICS2 is being introduced for a good reason: because the cargo data is sent to the system at an early stage, importing goods to the European market is becoming more transparent and secure. As a result, countries and their customs services can recognise risky goods at an early stage and actively intervene to prevent potential risks. ICS2 also centralises the risk and data management processes among EU member states. Because it is an all-encompassing system, the measures increase the transparency of trading operations when third countries ship consignments to the EU – and this provides even greater protection for the single market from external threats. The IT-supported control system also accelerates many customs procedures for companies and private individuals such as the exchange of information between all those involved, risk analyses and therefore customs clearance for imports.
The ICAO (International Civil Aviation Organization, a special agency of the United Nations) defines what kind of cargo is viewed as a high-risk consignment. This includes shipments that represent a threat according to intelligence services, have been manipulated, have suspicious features or were handed in by an unknown person. And even if the goods are such that the basic security checks could oversee potential risks, that also counts as a risk. Checking these indicators is simplified greatly by ICS2: in any cases of doubt, the customs authority can request additional information (RfI) or demand that changes are made to the consignment in question in order to be able to possibly identify hazardous features. If the consignor does not provide this information or refuses to introduce the changes, the customs service can prohibit the shipment and may even alert the customs investigation department.
The EU is issuing a clear message by switching to ICS2: greater transparency guarantees safety & security in customs matters and therefore reinforces legitimate trade within the single market. Sanctions, bans on loading and, if necessary, greater costs for storage are real threats if people contravene the new system. Even minor errors or omissions pose problems and, at best, lead to delays in deliveries or unsatisfied customers. Here is one example: the standard format of the Entry Summary Declaration does not allow any discrepancies. Users now have to communicate six figures of the HS code to classify the product instead of providing an adequate description of the goods in the past or just the first four figures of the HS code. Incomplete or low-quality declarations can be rejected or even lead to safety and security checks by the EU customs authorities.
In this sense, it is not enough for economic players to just be aware of ICS2 if they only vaguely remember the precise procedures and the data that is required. The following check lists offer some guidance for the clearance process and the information that is required for ICS2.
The clearance process can be summarised in five stages:
Before shipping any items, the consignor must
The following information also needs to be available:
While air freight companies are still grappling to understand the principles of the second version, the EU plans to introduce the third phase of ICS2 in March 2024. Aitor Pérez Redón, a Project Manager at Rhenus Freight Network, however, views the current situation as an enormous opportunity for freight forwarders. “The introduction of stage two provides the perfect opportunity to make notes about what functions well and what functions less well.”
The introduction of the second stage can therefore help companies to better understand the most important standards and idiosyncrasies of the new system. This is particularly valuable for companies operating in the rail, road and ocean freight industry, which will be the target of the final rollout of the system.
Our check lists and a precise study of the current situation provide initial pointers to help prevent common errors when dealing with ICS2. However, freight forwarders and trading companies should fully understand which information they need to communicate and at what time in the long term. This is the only way that they will be able to complete the time-sensitive procedures in the best possible way, remain a reliable delivery company and meet the transport deadlines that have been set. Before the introduction of the new customs system, it was normal to rely on a logistics specialist to handle administrative customs issues – and this will continue to be the case under ICS2. Experienced logistics specialists such as Rhenus not only offer many years of expertise, but also specialist personnel and qualified contact partners. They can provide knowledgeable answers to all the questions related to air freight and the new system and offer solutions to guarantee smooth clearance procedures.
It is worth developing a suitable strategy with your service partner in advance to ensure unrestricted customs procedures with ICS2. This is how companies can already actively prepare for the final rollout and cope with all the challenges in the best possible way.
The Rhenus Group can support you with all your questions related to the new EU customs system. Consult one of our special air freight contact partners now.
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