Assembly Order Update and Customs Fact Sheets

Monday, 12 August 2013

Assembly Order Update and Customs Fact Sheet

Dear All,

As members would be well aware, the Australian Federation of International Forwarders (AFIF) and the Freight and Trade Alliance (FTA) have engaged with the Australian Customs and Border Protection Service (ACBPS) in recent months in terms of assembly order / multiple supplier cargo reporting and import declaration processes.

This approach has included formal submissions, meetings and provision of extensive feedback on proposed models with a focus of enhancing Integrated Cargo Systems (ICS) functionality and implementation of an appropriate moratorium period.

PROPOSED ICS ENHANCEMENT:

AFIF and FTA suggested the Integrated Cargo Systems (ICS) be enhanced for sea freight LCL and airfreight to provide similar functionality to the FCL / "FCX" functionality allowing multiple cargo reports and a single Import Declaration to be provided against each import consignment (as recommended by industry prior to the 2005 ICS implementation).

This enhancement to the ICS would have the following benefits of:

providing transparency to ACBPS of supplier detail;
negating the need for industry to dismantle existing business models; and
minimising any increase in supply chain costs.

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.

PROPOSED COMPLIANCE MORATORIUM:

AFIF and FTA continue to espouse the view that ACBPS should impose a moratorium until full ramifications of the change in practices have been assessed. 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 advised that they 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.

CURRENT STATUS:

It is important to note that despite the ongoing efforts of both AFIF and FTA, currently no moratorium applies.

The ACBPS has received support from other industry representatives who have publicly stated a view that a moratorium is unnecessary and would create further uncertainty for industry. A collaborative approach between these parties has also resulted in the development of a fact sheet in an attempt to address industry's concerns and to form the foundation for a compliance framework.

Both AFIF and FTA were subsequently asked for our responses to the final draft of the fact sheet and have provided commentary. The final release of the fact sheet provides 10 models which do not include all scenarios or operational issues which AFIF and FTA brought to the attention of ACBPS - the final fact sheet has been released and is attached for your reference.

For further information / clarification, ACBPS have noted that industry should contact the Customs Information and Support Centre on phone 1300 558 099 or email: cargosupport@customs.gov.au

COMMENTARY:

The fact sheet, whilst providing some clarity of ACBPS compliance expectations, does not address all operational issues. AFIF and FTA remain committed to reforms in line with its formal submissions.

The scenario of assembly order / multiple supplier import practices highlights an opportunity to enhance ACBPS systems' capabilities and to integrate reforms with other global initiatives whilst facilitating contemporary logistics practices.

AFIF and FTA will continue to liaise with trade groups and ACBPS to use this issue as a catalyst to give the ACBPS Blueprint for Reform 2013 - 2018 some early momentum and the opportunity to evolve towards a longer term outcome of having in place world leading cargo management systems and strategies.

Kind 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