Calm before the storm - Customs Amendment Bill - Brief Article

Business Asia, May, 2001 by Nadia Cameron

The long awaited decision from the Federal Government on the Customs Amendment Bill is due out later this month, but already freight forwarders are preparing for the dramatic changes new Cargo Management Re-Engineering (CMR) will bring.

THE CHANGES to cargo processing that CMR will bring are set to revolutionise the screening of goods in and out of Australia.

While the Australian Customs Service is confident that CMR will result in a more cost and time effective method of clearing goods, industry representatives fear that the changes, particularly in reporting standards, will penalise businesses lacking the reporting skills or IT "know-how" required for the new procedures.

Speaking on the Customs Legislation Amendment and Repeal Bill tabled in Parliament recently, the Federal Minister for Justice and Customs Senator Christopher Ellison said it was important the trading community understood and prepared for the changes that new CMR procedures could bring. Supportive of the new Bill, Ellison said that the revamped Customs legislation would be for the better, significantly enhancing the speed and efficiency of customs services in Australia and resulting in massive savings for import and export businesses.

"The changes offer great potential for businesses to save time and money through reduced processing and handling costs, improved transit times and increase their cash flow, as well as simplifying and streamlining cargo management processes," Ellison said.

"We are keen to ensure that ports are operating as efficiently as they can."

At its basic level, the new CMR project covers the physical movement of cargo both on sea and air craft and entails a massive overhaul of the way freight forwarders report and check their goods.

At the heart of the changes is a shift away from traditional manual checks undertaken by Customs staff on the ground, to an electronic screening process based on more advanced and intelligent forms of reporting.

Targeting both importers and exporters, the CMR project will amend several pre-shipment cargo procedures currently in place. For exporters, the biggest change proposed to the clearing of goods will be the replacement of the current export clearance number (ECN), which is required on goods over the value of $500 by sea or air, to a new export declaration number (EDN), required on goods valued at $2000 or more.

Goods that require a permit, regardless of value, will require an EDN. For importers, the biggest adjustment will be the new self-assessment guidelines, which will replace the current Customs checks on imported air cargo.

According to the Australian Customs Service, CMR was also designed to provide exporters and importers with a new array of options for communicating with the main Customs transaction and information database systems. This will be done primarily through an on-line interface.

One of the key changes brought about by the new CMR communications procedures will be the merger of several computer and electronic data interchange (EDI) systems into a single new combined system known as the Integrated Cargo System. This new system will dramatically alter the way data management is undertaken by streamlining information according to the staff or clients' needs.

For example, instead of producing separate reports for each query or delivery, the new system will be able to produce a common set of reports and queries right across the data supplied by the system. Additionally, glossaries and metadata, previously difficult to locate or find on current databases, will also be streamlined and coordinated for easier and user-friendlier access.

To compliment the new integrated system, Customs will also introduce the Customs Connect Facility (CCF), a dedicated tool which will allow clients an on-line interface to connect directly through to the Integrated Cargo System. Taking advantage in particular of the surge into e-commerce and online transactions, the CCF will replace Customs' existing communications gateway, which it currently issues to exporters/importers under an exclusive access arrangement with Tradegate. Instead, CCF gives users secured internet access with a designated digital signature under public key infrastructure (PKI).

Customs believes that CCF's strength lies in its near real-time browser access, which can be used for amending, payment and status queries of import and export declarations, and cargo reports. Eventually, manifests and sub-manifests reports for both air and sea cargo clearance will be valid only if submitted in electronic form.

Customs spokesperson Jennifer Stonebridge believes these new applications and changes will provide freight forwarders with more flexibility in how they communicate with Customs.

"An open gateway, CCF will give exporters and importers a variety of options, including internet-based communication," she said.

The Integrated Cargo System and related business process changes will be implemented in phases, with the first release dealing with cargo reporting of document imports by express couriers scheduled for introduction in April 2002. Full implementation of the entire system should be completed by December 2002.