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Dear All,
The Australian Federation of International Forwarders (AFIF) and the Freight & Trade Alliance (FTA) together with Australian Customs and Border Protection Service (ACBPS) representatives met in Canberra on 15 July 2013 to discuss issues recommendations outlined in the AFIF / FTA submission relating to multiple supplier "Assembly Order" cargo reporting compliance issues.
The following notes provide a summary of the AFIF / FTA recommendations and official responses from ACBPS.
AFIF / FTA highlighted the following background detail:
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prior to the October 2005 Integrated Cargo System (ICS) implementation, limitations with the system design were highlighted to ACBPS with numerous recommendations for enhancement before "go live";
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one of the issues highlighted, was the limitation of the ICS in dealing with "assembly order" consignments;
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it was not until post ICS implementation that the Industry Action Group (IAG) was formed with the task to initiate remedial action including systems fixes, enhancements and interim "workarounds";
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whilst the IAG successfully addressed many critical ICS issues, it did not address the assemble order issue;
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over ensuing years, this issue has been dealt with by ACBPS with periodic notices being issued and limited follow-up compliance activity;
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ACBPS had a reluctance to further engage with industry to enhance the system due to a policy decision to limit any further "non-essential" ICS fixes; and
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during May 2013, ACBPS increased its compliance activity sending letters to industry outlining potential cargo reporting breaches and provided warnings of potential sanctions.
ACBPS Response
Accurate and timely cargo information is required to undertake risk assessment and facilitate clearance of the cargo. Compliance activities were increased following an investigation of the nature and scale of the assembly order issue and consultation with industry members of the Customs and Border Protection National Consultative Committee. Compliance activities have included warning letters to certain entities to encourage them to review their activities to ensure that they meet Customs Act cargo reporting requirements. This activity complements a range of other ACBPS measures to reduce deficiencies in cargo reporting. In August 2012, ACBPS sent letters to the top 20 air cargo reporters outlining a proposed strategy to improve cargo reporting. The initiative is starting to deliver the desired results. In April 2013, ACBPS revoked ACN 2007/03, which provided special arrangements for non-compliance with legislated timeframes for lodging cargo reports. The Customs and AusCheck Legislation Amendment (Organised Crime and Other Measures) Act 2013 also implements a range of measures, including increased penalties, which should encourage greater compliance with cargo reporting requirements. |
AFIF / FTA Recommendation 1
A review of ICS functionality be completed to meet the Government's focus on strengthening security in the cargo supply chain. This approach would also minimise any negative impact on the Australian retail sector and would maintain the viability of established supply chain models.
Bearing in mind the renewed focus on this issue from an ACBPS compliance perspective, AFIF and FTA expressed the view that a fix to the ICS should be reassessed as an "essential" enhancement and should be rectified as a high priority.
AFIF and FTA suggested the ICS be enhanced for sea freight LCL and airfreight to provide similar functionality to the FCL / "FCX" functionality. This will allow multiple cargo reports and a single Import Declaration to be provided against each import consignment.
This enhancement to the ICS would have the following benefits of:
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providing transparency to ACBPS of supplier detail;
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negating the need for industry to dismantle existing business models; and
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minimising any increase in supply chain costs.
ACBPS Response
ACBPS advised that there is scope to consider alternative approaches for reporting and clearance of cargo as part of the Services Reform Program. An assessment of system changes required and costs and benefits in the risk assessment and clearance process (including the effect on overall cost recovery through the Import Processing Charge) would need to be considered.
The ACBPS position is:
- the ICS cargo reporting functionality will remain unchanged for the foreseeable future;
- a separate cargo report is required for each consignor / consignee combination;
- the cargo report should quote the number of the associated house bill of lading / house air waybill. Where the cargo reporter is unable to obtain a house bill of lading / house air waybill, the cargo reporter may refer to another document that provides sufficient information to identify the goods and to lodge a cargo report in the ICS for those goods;
- where possible, it would be beneficial if goods were packaged in a way that allows a depot operator to undertake outturn separately for each cargo report; and
- with the already established exception of sea cargo FCX reporting, a separate import declaration is required for each cargo report.
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AFIF / FTA Recommendation 2
A compliance moratorium be introduced until further industry engagement has been completed addressing these core issues. Upon completion of further engagement, it is recommended that ACBPS complete an "informed compliance" campaign to ensure that industry is fully aware of requirements and are operating on a "level playing field".
ACBPS Response
We are not prepared to provide a moratorium on the imposition of sanctions for the following reasons:
- reporting requirements have not changed for many years;
- the adverse implications of incorrect reporting for ACBPS's cargo risk assessment activities;
- the Government's and ACBPS's focus on strengthening security in the cargo supply chain; and
- the importance of allowing ACBPS decision makers to decide on a course of action in each case based on relevant factors and available information.
However, depending on the facts of any case, ACBPS's response could range from further education and warnings, administrative action such as the suspension and revocation of licences and the application of infringement notices, through to prosecution. Relevant factors that ACBPS officers consider when weighing up treatment options include, for example, the significance of the breach, efforts to comply, any relevant remedial or risk mitigation action, compliance history, reliance on ACBPS advice and reasons beyond the person's control. |
AFIF / FTA sought feedback on the following detail:
What can be used in the mandatory house air waybill (HAWB) field or house bill of lading (HBL) fields for a cargo report in circumstances when a commercial bill is not cut. Correspondence from ACBPS dated 26 June 2013 stated that other documents relating to the consignment could be used to fill that field.
It is highly recommended ACBPS allow industry to generate HAWB / HBL data for cargo reporting purposes that is a variation of the main commercial document (adding a trailing alpha or number to differentiate each cargo report). This could be readily facilitated as most software applications already have this functionality.
ACBPS Response
We are nearing finalisation of a comprehensive "Question & Answer" document that will address a number of the scenarios where Cargo Reporters have sought clarification and provide further guidance about legal obligations. |
Summary
AFIF and FTA highlighted that the ACBPS responses will require a significant change to many existing international supply chain practices.
FTA, as an adjunct to the meeting, advised ACBPS of current engagement with major Australian retail associations and that a detailed brief would be provided to them to assist in advising their respective importer client bases.
Thank you and regards,
Brian Lovell
Chief Executive Officer
Australian Federation of International Forwarders Ltd (AFIF)
Suite 403, Level 3
152 Bunnerong Road
Eastgardens NSW 2036
Tel: +61 2 9314 3055
Fax: +61 2 9314 3116 |
