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Changes in UK Customs Demand More Capable Technology

New UK customs systems will manage shipments of export cargo and import cargo in international trade.

Changes in UK Customs Demand More Capable Technology

The UK logistics community, and its software providers, needs to be well-prepared for the completely new Customs Declaration Services (CDS) compliance and reporting regime that’s fast-tracked for arrival by the end of 2017.

Her Majesty’s Revenue & Customs (HMRC) is currently completing a comprehensive program of workshops around the country aimed at determining what the industry is looking for in the design of the new CDS. They’ve also been visiting software vendors to discuss the technical specifics of the move and to discover what the next generation of streamlined logistics technology should look like.

The UK’s current CHIEF system has been a solid platform for 20 years, but with changes coming from the Union Customs Code, HMRC had to decide whether to patch the changes to existing and potentially end-of-life technologies, or to start fresh.

Because of the large volumes of transactions now being processed, as well as the increasing difficulty in maintaining the older platform, HMRC has chosen to follow the new path. They’re now entering the design and procurement stage, since CDS will be part off-the-shelf and part tailor-made. It is anticipated that much of the CHIEF functionality will be brought over, and new workflows for regulatory changes and coding will be developed.

HMRC has wisely chosen to make key providers active participants in the development of their agile plan to build and release the system, using a program of iterations. If software suppliers had been presented with a fait accompli, implementation may have been rushed and sub-optimal. With this iterative approach, software suppliers will be able to allocate appropriate resources and work hand-in-hand with HMRC during the development period to become compliant.

HMRC’s decision to ensure that potential problems are identified sooner rather than later is a smart one. Traders don’t want the risk of finding out on the very first day that the CDS doesn’t work or that it’s too slow.

Inevitably, some software vendors will lack the ability to update their systems to meet the new requirements, and traders may scramble to look for a replacement. Other vendors may delay their updates until HMRC finishes the system, leaving little time to test or improve their systems. For traders, HMRC’s release plan creates a good opportunity to evaluate their current software, and if necessary, implement new, more advanced and capable systems well ahead of implementation deadlines.

HMRC has been taking note of the points raised in workshops and forums. Authentication is one of the hot topics. How will the system know who it’s talking to? What will it allow those people to do and not to do?

At the moment, the current system works at a company level and doesn’t require the identification of the person at each terminal. But the government’s digital strategy is centered on individual users. The trader associations and the more active software providers are keen to help find a middle ground that will achieve the desired result for HMRC while not overly burdening businesses.

The choice of messaging protocol is also creating a buzz. The government’s preference is to use a new protocol that most traders haven’t heard of. Many traders would prefer to stick with the 1970s protocols that they are familiar with. Again, it’s important to find a trusted middle ground, for example, moving everything through a global XML-based messaging exchange hub.

New legislation being introduced May 1—calling for the end of paper-based filing—is one of the driving factors for the CDS as we move toward a harmonized Union Customs Code.

HMRC has its eyes on the future, and it’s doing a fantastic job of addressing concerns and involving the community of logistics providers and software vendors to ensure maximum wins and minimum drawbacks. The result will be a system that benefits all participants in the supply chain.

Daniel Clarke, is a senior developer at WiseTech Global, a developer of cloud-based software for international logistics based in Sydney, Australia.