Industry asks EU to put brake on customs code revisions

Industry asks EU to put brake on customs code revisions    The European Commission should extend its deadline for implementing new revisions to the European community customs code related to supply chain security until member states can fully automate trade processing systems and provide tangible benefits to trusted shippers, 16 industry associations said in a joint letter on Thursday.
      Preliminary revisions to the European Union customs code for combating terrorist and criminal use of international transport systems are scheduled to go into full effect in 2009. A key component of the new rules is the establishment of the Authorized Economic Operator concept, under which cross-border shippers would earn credit for expedited customs processing by meeting three tiers of standards for tight controls over trade compliance, security, or both. The AEO model is generally comparable to the U.S. government's voluntary Customs-Trade Partnership Against Terrorism under which importers who demonstrate that they and their suppliers follow tight supply chain security practices can receive reduced levels of security inspections for their shipments.
   The industry coalition, which includes the World Shipping Council, the European Express Association, the American Chamber of Commerce to the European Union, Freight Forwarders International and the European Shippers’ Council, said the proposed rules provide little benefit to AEOs that invest in computer systems, equipment and personnel that would give customs authorities confidence in the integrity of their shipments. The expense will deter small and medium-size businesses from applying for AEO status and thus make them less globally competitive, the associations said.
   Another major concern is that the implementation schedule does not give industry and member states adequate time to develop and test the automated systems necessary to meet trade data filing requirements. The coalition recommended that the European Commission take time to develop a harmonized, electronic import and export filing system rather than force each of the 25 states to quickly implement separate systems and businesses to set up links with each customs authority. At a minimum, all states should fully implement their version of the customs processing system before it goes live instead of requiring compliance as each state brings its system on line. Industry needs a common window into a single European system to maintain its competitiveness, the group said.
   Companies also need two years to build connections and synchronize their computers to the new government systems.
   Political disagreements within the Commission have resulted in many implementing procedures being issued as guidelines rather than regulations, but such an approach will impose large costs and delays as companies are forced to seek help interpreting the provisions from each country in which they do business, the coalition said.
   The letter also said that the draft proposals for a U.S.-style “24-hour rule” are not clear about which parties to a transaction are responsible for filing advance shipping information for terrorism screening purposes. The approach, as currently constructed, has similar flaws with the U.S. system, which collects shipment data from the ocean carrier rather than the supplier or importer.
   If implementing regulations using semi-manual trade processing systems currently in place are not promulgated until late this year without changing the 2009 start date, delays will ripple down the line and set back the roll out of automated import and export systems, the group said.
   “Given that it is the automated systems that will provide business with some benefits, we would recommend that the work on the basic systems should be set aside to enable the full resources of the Commission and the member states to be directed at completing fully automated systems that will provide the basis of a secure supply chain for the EU, and offer genuine facilitations for business in the EU,” the letter said.