European Union - Advance Cargo Declarations

In order to improve the safety and security of its Member States, the European Union (EU) is introducing a mandatory advance notification requirement regarding the import, export and transit of goods. This will be in addition to existing customs regulations. The new requirements are due to enter into force on 1 January 2011 and are laid down in various EU Commission Regulations known as “The Security Amendment to the Community Customs Code”. They apply to all sectors of the shipping industry. 

For goods being imported, cargo information in the form of an “Entry Summary Declaration” (ENS) needs to be submitted in advance to the customs office at the first port of entry into the EU. For goods being exported, cargo information is to be submitted in advance either in the form of a “Customs Declaration for Export, Re-export or Outward Processing”, or if such a declaration does not apply, then in the form of an “Exit Summary Declaration” (EXS). The time limits for furnishing the required information differ depending on the cargo being carried and the nature of the trade. Further details regarding the import and export of goods can be found in Annex 30 A to EU Regulation 1875/2006.

Operators that are based in the EU or have regional offices in the EU can apply for “Authorised Economic Operator” (AEO) status. The benefit to the operator of being awarded AEO status is a reduction in the amount of cargo information that needs to be submitted to customs.

In many cases the advance notification will need to be given by the ship operator, carrier or his representative, such as the ship’s agent. At present there is no distinction within the regulations as to whether, in the case of a chartered vessel, the charterer or the owner is considered to be the operator/carrier for the purposes of submitting the required declarations. However, it is expected that the charterers will be defined as the operator/carrier under a time charter, and the owners will be the operator/carrier under a voyage charter party. Further advice on this important issue will be notified to Members when some clarity has been provided by the authorities. In containerised shipping a freight forwarder, or Non Vessel Operating Common Carrier (NVOCC), will normally issue the advance notice. This can only be done with the ship operator’s knowledge and consent. However, in the case of “combined transport” operations where trucks are driven on to a ferry, it is the duty of the haulage company, its representative or the truck driver to submit the advance notification. With regard to vessel sharing arrangements such as slot carrier agreements in the container trade, the declaration is to be issued by the Bill of Lading issuing carrier rather than the ship operator.  

If the information is submitted by a nominated third party, the ship operator will still be held responsible if notice is not delivered in advance or on time. This may result in a penalty. However, the third party will be liable for the accuracy of the information provided. Regardless of who provides the advance cargo declaration, the responsible party must also provide their “Economic Operator Registration and Identification Number” (EORI). The use of an EORI has been mandatory within the EU since 1 July 2009.

Once advance notice had been submitted, a confirmation will be issued containing a unique 18 digit number called a “Movement Reference Number” (MRN).

The entire system will be electronic; therefore the person giving notice to customs will require a computer system that will interface with the customs system. However, at the present time there is no system that is common throughout the EU capable of handling the new declarations; for the time being each Member State will retain its own national system.

An exemption from the requirement to submit declarations for cargo being imported or exported may be granted for vessels trading purely between EU Member State ports if certain specific criteria are met. Further exemptions exist for goods that remain on board a vessel whilst in the EU that are destined for a port outside the EU; these do not need to be declared for export, even when loaded at a previous EU port. In addition a vessel that departs the EU and then calls at a foreign port before returning to the EU does not need to submit export paperwork before departing from the first EU port. However, the cargo must be declared in an ENS before the vessel returns to the EU.

The information submitted in the various declarations will be used by customs to conduct a risk assessment of the cargo from a security and safety standpoint. As a result of the assessment the cargo will be classed as either risk type A, B or C, which in turn determines how the customs will respond. By way of example, if the customs office identifies a serious safety and security risk in relation to cargo to be loaded onto a deep sea container ship and classifies it as risk type A, it will issue a “Do Not Load” (DNL) message preventing the carrier from shipping the cargo.

In addition to submitting an ENS, an operator must also advise customs of a vessel’s arrival by the submission of an “Arrival Notification” (AN) by a means acceptable to the customs office in that particular Member State. The AN may comprise of a list of MRNs relating to the vessel, or what is termed an “Entry Key” which consists of information about the vessel and the cargo (e.g.  mode of transport, the vessel’s IMO number, expected date of arrival).

The foregoing is a brief overview of the new EU cargo declaration regime. The European Community Shipowners’ Association has produced a guidance document which considers the new requirements in detail. Further information can be found on the European Commission Customs Portal.  

Members should ensure that they are ready to comply with the new requirements by 1 January 2011.