Brexit and the CHIEF Replacement


The current outcome and timings on the Brexit negotiations are uncertain, but one aspect is clear: it will have a serious impact on your Customs and Trade Compliance setup (please see infographic as well). In addition, you and your team need to prepare on the upcoming CHIEF replacement with the new Customs Declaration Service (scheduled go-live January 2019). Time is ticking….

CDS timeline at a glance

   

Decommissioning CHIEF

The exact date for decommissioning CHIEF and when its availability will be ceased will be communicated in the run of 2019. It is important to notice that all traders will need to ensure they have migrated by this point.

Getting Ready for CDS - How should businesses prepare for the switch from CHIEF to CDS?

UK-based businesses that import or export goods outside the EU need to prepare for the imminent introduction of a new system for declarations.

All businesses that import and export goods from and to the UK need to get ready for CDS and be prepared. Currently all companies are using CHIEF. After the transition from CHIEF to CDS they will still be able to do the same things with CDS as they did with CHIEF, but with some differences.

Businesses based in or trading with the UK have many significant changes to prepare for at present, as the full legal and regulatory implications of Britain's departure from the European Union gradually reveal themselves. However, in the midst of this Brexit-related upheaval, it is vital that an imminent reform of the way goods are declared does not get overlooked.

Indeed, the decision to introduce a new Customs Declaration Service (CDS) to replace the older Customs Handling of Import and Export Freight (CHIEF) system was actually made before the UK's vote to leave the EU, but given that Brexit is likely to put a greater focus on customs rules than ever before, there is considerable impetus for businesses to make sure they handle the transition smoothly.

As such, business leaders should take time to familiarize themselves with the basics of the new system and make sure they are clear on the timeline for its introduction, so as to ensure they are ready for the changes as they occur.

Why is the system being replaced?

The existing CHIEF system is known as one of the world's largest and most sophisticated electronic services for managing customs declaration processes, with all organizations that import or export goods outside the EU relying on the system.

CHIEF collects around £34 billion in tax and duty on imports from countries outside the EU each year, processing around 55 million customs declarations in 2015-16. However, it is now nearly 25 years old, meaning it can no longer be easily adapted to changing requirements.

As such, CDS has been developed from scratch to offer a new system for processing goods declarations, calculating the correct duty and taxes, and handling customs information electronically.

What can businesses expect from CDS?

When CDS comes online, users will need to sign in with their GOV.UK Government Gateway accounts.

Alongside the same features that CHIEF currently provides, a range of new services can be accessed via a centralized portal.

For example, traders will be able to view previous import and export data on predefined reports, check their tariffs, apply for new authorizations and simplifications, and review their duty deferment statements. Online help will also be available, including self-service tools, guides and checklists.

Some additional information will be required for declarations in order to align with the World Customs Organization Kyoto Convention rules, including an audit trail of previous document IDs; additional party types, such as the buyer and seller; and possible additional commercial references or tracking numbers.

Changes will also be made to a number of key metrics to better align the UK with international standards. These include the way location of goods data is identified, as well as warehouse type code lists, item tax lines, unit of quantity codes, customs procedure quotations, and the number of items on a declaration, which will rise to a maximum of 999 items for CDS, compared to 99 items on CHIEF.

CHIEF will still be available for a certain period of time while businesses is switching to CDS to ensure that trade continues to flow as usual. For more information on the Customs Declaration Service (CDS), please visit the CDS page on GOV.UK.

MIC – Your provider for software to exchange data with the new Custom Declaration Service (CDS) and more

Many global companies decided to implement MICs global customs & trade compliance software solutions from which many of our customers are using our solutions in the UK since more than a decade as well. MIC is certified in the UK for the electronic data exchange with the UK customs authority system (CHIEF) since 1999 and will be ready on time for the upcoming new Customs Declaration Service (CDS).

The MIC Customs & Trade Compliance Software Solutions offer a functional rich and proven suite of modules to support you and your team on the following areas:

  • Global Trade Content Services (MIC GTCS) for the different customs & trade compliance processes (e.g. tariff content, sanction lists, exchange rates) covering 150+ countries – updated automatically on a regular basis in MICs software suite.
  • Central Classification System (MIC CCS) supporting companies in automating the tariff and export control classification process with rule-based and intelligent algorithms in order to achieve consistent classification over all products globally and therefore increase compliance and reduce workload & costs.
  • Origin Calculation System (MIC OCS) for automated management of supplier declarations via an innovative supplier web-portal and automated preferential origin calculation with full audit trail for 90+ Free Trade Agreements (FTAs).
  • Global Filing Solution for automated electronic export and import customs clearance processes (MIC-CUST®) with local customs authorities’ systems in 55+ countries on 6 continents incl. special regimes like Inward Processing Relief (IPR), Bonded Warehouse (BWH), Foreign Trade Zone (FTZ), Free Zone (FZ) and its related legally required customs inventory management.
  • Export Control Management (MIC ECM) for central monitoring of all company transactions under export control law and detailed checks of the business transactions with respect to the relevant regulations. This includes screening of persons and organizations involved in a given transaction against different sanctions lists, checking against embargoed countries, control of goods related to end use and dual-use as well as license determination and license management.

All MIC Modules can either work separately or in combination with each other. Independent on the chosen deployment there will be a seamless integration with your ERP and other logistics and finance systems. MIC is your One-Stop-Shop for Global-Trade-Management.

MIC guides you through the transition to CDS by providing the perfect software solution for CDS. Prepare for the switch from CHIEF to CDS and choose the best option for Customs & Trade Compliance.

If you would like to receive more information on how MIC could help you, please let us know by sending an e-mail to sales@mic-cust.com and we will contact you shortly.