Tag / EDI

by Mike Poverello

Hamburg Süd becomes first fully electronic ‘Cargo Reporter’ in South Africa

Hamburg Sud_1

Durban-based Hamburg Süd is the first shipping line – and the first South African Revenue Service (Sars) client – to be granted exemption from the requirement to submit paper manifests to local customs branches, thus becoming the first fully electronic cargo reporter.

While the electronic reporting of pre-arrival manifests to Sars has been a requirement since August 2009, shipping lines are, to date, still required to present pre- and post-arrival paper manifests to local customs branches in order to account for cargo. This was also because the data accuracy of electronic submissions varied significantly between different reporters.

Sars’ implementation of the new Manifest Processing (MPR) system in June 2016, provided industry with the mechanism to also report acquittal manifests electronically. Additionally, the system is able to match customs clearances to their corresponding cargo reports (manifests) in order to identify instances of non-reporting.

Three months after MPR was introduced, the facility for full paperless cargo reporting was made available to shipping lines and airlines who submit both pre-arrival and post-arrival manifests to Sars electronically; submit complete sets of manifests without any omissions; achieve a reporting data accuracy rate of 90% or higher in respect of both their pre-arrival and acquittal manifests reported for each of the three months preceding any application for exemption from paper reporting requirements; and can maintain that level consistently.

A significant benefit to carriers reporting electronically is the cost-saving of hundreds of thousands of rands spent per year in the paper and administrative costs associated with submitting paper manifests to Sars offices. The process is now more efficient allowing for improved risk management, security and confidentiality.

“Hamburg Süd’s core business strategy is to deliver a premium service to our customer, and to achieve this, compliance is a core driver. SARS paperless reporting is in line with our compliance and sustainability strategy,” said Jose Jardim, general manager of Hamburg Süd South Africa.

For Customs, the mandatory submission of cargo reports forms a significant part of the new Customs Control Act (CCA) in order to secure and facilitate the international supply chain.

With the impending implementation of Reporting of Conveyances and Goods (RCG) under the CCA – targeted for 2018 – carriers of internal goods in the sea and air modalities are urged to follow Hamburg Süd’s example and ensure that they become compliant in good time so that they can enjoy a smooth transition to the new legal dispensation.

Paperless cargo reporting would bring an end to one of the last remaining paper-based processes in customs while further contributing to the expedited processing of legitimate trade through an enhanced and integrated risk management environment.

According to a Sars spokesman technical stakeholder sessions to implement the reporting requirements introduced by the new Customs Control Act are due to commence soon and carriers and other supply chain cargo reporters are urged to attend in order to ensure they adapt their systems in good time.

Source: adapted from FTW Online, Venter. L, “German shipping line first Sars client to become fully electronic reporter”, September 14, 2017.

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by Mike Poverello

SARS publishes updated EDI User Manual

sars-edi-user-manualSARS has been operating Electronic Data Interchange (EDI) with its external stakeholders since 2001. More than 98% of all customs declaration (CUSDEC) transactions are today submitted electronically to Customs and the electronic submission of multimodal cargo reports (CUSCAR) is steadily increasing. Today, declaration processing is fully electronic end-to-end thanks to the availability of highly established EDI and Customs software service providers supporting the local customs and logistics community. SARS has also recently introduced a benefit for compliant cargo reporters who will be absolved of certain manual (paper) submission requirements once they attain an acceptable level of electronic submission compliance and data accuracy.

The ultimate objective is to ensure that all Customs-to-Business (C2B) transactions are electronic to enable full supply chain connectivity between the South African business community and Customs. This in turn enables the possibility of SARS accrediting or approving ‘supply chains’ as opposed to just individual trader segments (importers and exporters). The extent of electronic compliance is also a pivotal requirement for traders operating under the new Customs Control Act, to be enacted in the future.

SARS overall EDI capability extends further than declarations and cargo reports. In recent years Customs-to-Government (C2G) messaging has also been successfully established between SARS and the Department of Trade and Industry (dti) as well as the South African Reserve Bank (SARB). SARS is also engaging other government stakeholders concerning IT connectivity and data exchange.

Moreover, developments for cross-border Customs-to-Customs (C2C) data exchange are also in the pipeline and could come to fruition with the partner administrations in Mozambique and Swaziland in the foreseeable future. These initiatives will usher in increased supply chain connectivity through active use of the Unique Consignment Reference (UCR) between participating customs administrations. The ultimate objective here is the creation of mutual recognition benefits for local and cross-border traders based on their accreditation status agreed between the participating customs administrations.

The SARS Electronic Data Interchange (EDI) Manual (which can be downloaded from the SARS EDI webpage) has been updated with the latest versions of SARS Edifact Data Mapping Guides as well as improved diagrams explaining the functional composition of the various electronic messages specified for Customs processing. Also included are the requirements for registering as an EDI user with SARS.

The manual includes recent updates relating to cargo reporting (manifests) as well as the updated customs declaration message incorporating recent inclusion of customs surety, penalty and forfeiture requirements. The latter enhancement removes another document based requirement (the Form DA70 Provisional Payment) for Customs Brokers with the view streamlining data requirements, enhancing customs billing and customs status reporting with the trade and logistics community. This EDI Manual will be an important document over the coming months and years in that it will feature updated electronic requirements in support of the new Customs Control Act. Watch this space!

by Mike Poverello

WCO facilitates Data Model training for SARS

WCO Data Model Workshop, Pretoria, South Africa, Dec. 2015

SARS’ EDI and Customs Business Systems representatives with WCO Data Model facilitators Mr. Giandeo Mungroo (2nd from the left) and Ms. Sue Probert (2nd from the right) [Photo – SARS]

Officials of the South African Revenue Service (SARS) last week attended a WCO workshop on the Data Model facilitated by Ms. Sue Probert and Mr. Giandeo Mungroo. The event, held in Pretoria, South Africa was sponsored by the CCF of China as part of the WCO’s Capacity Building endeavours to promote the adoption and use of customs standards and best practice amongst it’s  member states.

The workshop was requested by SARS ahead of new technical and systems developments and requirements informed by SARS’ new Customs Control and Duty Acts. Moreover, there are also political ambition to institute a Border Management Agency for the Republic of South Africa. All of this requires that SARS Customs has a robust electronic tool to assist the organisation in mapping national data requirements according to specific needs.

Besides the use of a value added Data Model tool – GEFEG, it is imperative for the organisation to develop capacity in the knowledge and understanding of the WCO Data Model. SARS has successfully EDI (Electronic Data Interchange) for the last 15 years with various local supply chain trading partners and government agencies. Over the last few years SARS has been actively pursuing and promoting IT connectivity with regional trading partners with the express purpose to extend the benefits of eCommerce across borders.

GEFEG.FX software is used to model data formats and develop implementation guidelines for data interchange standards such as UN/EDIFACT. It is a software tool that brings together modelling, XML schema development, and editing of classic EDI standards under a unified user interface, and supports the development of multilingual implementation guidelines.

Version 3 of the WCO Data Model brought about a distinct shift towards an ‘all-of-government’ approach at international borders with the introduction of the GOVCBR (Government Cross Border Regulatory) message. The message and underlying data requirements facilitate the exchange of customs and other government regulatory information to support a Single Window environment.

WCO Data Model not only includes data sets for different customs procedures but also information needed by other Cross-border Regulatory Agencies for the cross-border release and clearance at the border. The WCO Data Model supports the implementation of a Single Window as it allows the reporting of information to all government agency through the unique way it organizes regulatory information. This instrument is already 10 years old and is seeing increased use by WCO members.

Amongst the benefits derived from the workshop, SARS staff acquired the following competencies that will not only aid their work but business user support as well –

  • Competence in operating the tool to build a source control collaborative environment to support national and regional harmonization;
  • Competence to build a base to conduct national/ regional data harmonization based on the WCO Data Model to support national Single Window implementation as well as Regional Integration;
  • Competence to build systems/ electronic interfaces between Customs and its partner government agencies including a Border Management Agency; and
  • Provide needed competence to develop, maintain and publish national and regional information packages based on the WCO Data Model.
by Mike Poverello

Pakistan and China Customs to accelerate establishment EDI

Sost_Pakistan_Customs_and_Chinese_TrucksPakistan Customs’ experts are in China to make further progress on the establishment of direct Electronic Data Interchange (EDI) with the trusted and neighbouring country to reduce the incidences of revenue losses.

The sources told Customs Today that Chief Customs Automation Abdul Qadir, Director Majid Yousfani, Riaz Chaudhary and Azeem from PRAL flew to China on August 9 to hold series of meetings with the Chinese counterparts to make further progress on the EDI.

The sources said, that the EDI will help access trade documents on real time basis from computers of cross-border customs stations. The directorate had exchanged the technical documents with China for EDI, the sources said, adding that the Chinese Customs had given feedback and counter proposal on the technical documents.

In order to expedite finalisation of the EDI arrangement, earlier a meeting with the Chinese Customs for exchange of data relating to the certificate of origin between the two countries was held on February 2 to 4, 2015 in Beijing. And, this is the second meeting of Pakistan Customs officers with the Chinese Customs, sources added.

It is recalled here, that Federal Board of Revenue had issued an alert regarding mis-declaration in imports from China under 50 HS Codes. The Board also showed concerns on the un-warranted concessions granted under various SROs covering preferential or free trade agreements.

The Board had advised verification of suspected Certificates of Origin directly through the commercial missions of Pakistan abroad, discouraging mis-classification of goods to obtain concessions and extending benefits only to goods which strictly matched the description provided in respective SROs.

It may be mentioned, that the export data of China customs for CY 2013 was cross matched with the import data of Pakistan Customs for same period and it transpired that in respect of 376 tariff lines the import value declared before Pakistan Customs was short by $2.437 billion recorded by China Customs as export value to Pakistan.

Moreover, in respect of 13 tariff lines the import value declared before Pakistan Customs was in excess of $829 million that that recorded by China Customs as export value to Pakistan. This is indicative of possible mis-classification of those goods which attract higher rates of duty but are cleared as goods attracting lower rates. Source: CustomsToday

by Mike Poverello

Getting to Grips with the Future Customs Control Act

Having recently introduced a whole new integrated customs business solution last year the South African Revenue Service (SARS) has spent the last six months stabilising its system. At the heart of the system is the Interfront Customs and Border management (iCBS) engine which takes care of all customs declaration processing.

CCB

Click on the image to download the Infogram

A new ‘state-of-the-art’ EDI Gateway infrastructure is at an advanced stage of development and configuration, and will be subjected to a series of rigorous testing both internally and with industry service providers over the next few weeks. The gateway is an important component of the organisation’s future aspirations in C-2-C, C-2-B and C-2-G information exchange with it’s stakeholders.

Over the last 2 years, SARS has been a key participant in the WCO’s Globally Networked Customs (GNC) initiative which seeks to develop standardised electronic information exchanges of commercial customs data and common border procedures between customs administrations. This is ‘greenfield development’ and requires innovative thinking between potential customs partners. In this specific area SARS has engaged both Mozambique and Swaziland Customs as willing partners in such an initiative. Developments with Mozambique are at an advanced stage and will shortly become a reality with the conclusion of the bilateral One Stop Border Post (OSBP) agreement that includes provision for electronic data exchange between the two administrations. More on this in a future post.

Technology aside, perhaps the most daunting task on the horizon is the introduction of the new Customs Duty and Control Acts which are currently in the parliamentary process. Much publicity and robust argument was aired in the printed media over the last year, all of which culminated in the parliamentary hearings overseen by parliament’s Standing Committee on Finance (SCoF) during November and December 2013. While an agreement was reached with the freight forwarding sector of the local supply chain and logistics industry on certain aspects of the Control Bill, there still lies much work and clarification to be addressed in these and other areas.

Notwithstanding the signing into law of the Customs Bills, operational enactment thereof can only occur once the ‘rules’ to execute this legislation are circulated for comment, finalised and gazetted. Even considering the legal and approvals process in a simplistic form, the implementation of this new legislation is just too complex to introduce in a once-off, big-bang approach.  Due consideration must be given to a transitional approach taking into account the practicalities thereof as well as economic and logistical consequences of such approach.   It is no understatement that the impact of the new legislation, its incorporation into current automated systems, policies and procedures as well as the necessary re-adjustments to be made by every entity engaged in business with SARS Customs is no small feat.

Furthermore, the implications of the recently concluded WTO Agreement on Trade Facilitation for South African Customs and Trade also needs to be determined and understood. While a large proportion of its content is encapsulated within the Revised Kyoto Convention, it is the first time ever that such requirements are subject to the conditions of a trade agreement.

It’s been some time since I last penned thoughts on the Customs Modernisation initiative. In retrospect and thinking ahead, the underlying bottom line to its longer term success lies in increased ‘communication’ with stakeholders – ironically, the World Customs Organisation’s adopted theme for 2014!

Please feel free to download the infogram on the future Customs Control Act by clicking on the picture above. Official links to the Customs Control and Duty Bills are included below. It would also be wise for parties involved in Excise to consider the contemplated changes contained in the Excise Duty Bill (Customs and Excise Amendment Bill).

Related documents

by Mike Poverello

Insight behind the WCO Data Model

WCODMV3 Technical BrochureGovernments around the world have realized that rapid economic growth cannot be achieved in an environment where international trade processes are inefficient and cumbersome. Over the past two decades, serious attention has been devoted to the modernization of international trade and cross-border regulatory procedures. Countries have committed substantial resources to national projects in the areas of customs automation and Electronic Data Interchange (EDI) infrastructure.

Electronic ‘Single Window’ services delivery is now being demanded in several countries. Based on the principle of joined-up government services, the ‘Single Window’ environment has the potential to deliver transformational advantages to business by simplifying and unifying touch-points between members of the trade and the different government departments involved in cross-border regulatory procedures. In addition, new demands on supply chain security and facilitation have emerged, leading to the establishment of the WCO SAFE Framework of Standards.

This booklet provides a brief introduction to WCO Data Model Version 3.0. It explains the scope of the Model, its relationship with other international instruments such as the Revised Kyoto Convention, and its alignment with widely used international standards. The booklet is aimed at project leaders and Information Technology architects from Customs administrations and other cross-border regulatory agencies. The World Customs Organization hopes that this booklet will create a proper understanding of the value of the WCO Data Model as an indispensable instrument in projects that address modernization of regulatory agencies including Customs. Source: WCO.

Please visit: http://wcoomdpublications.org/data-model-3.html for pricing and conditions of online WCO Data Model usage and support. Available for Customs administrations and Trade Practitioners.

Related article

by Mike Poverello

Countdown to D-Day

In little over 2 weeks from now, the South African Revenue Service together with its business partners in South African commercial trade will usher in a new customs clearance dispensation. Notwithstanding many trials and tribulations on both sides, there is a steady commitment and determination to successfully introduce the single biggest change to impact the country’s import / export community. It is only right that there should be anxiety, trepidation, and cautious optimism. Modernisation in the Customs domain is not new, internationally, and most definitely not in South Africa. Obvious too are those who wish to detract from the hard work already accomplished, to the point of seeking any fracture, shortcoming or delay as reason to doubt the ability of this country to implement a modern electronic trading environment.

True, there is a lot of reputation at stake…surely all the more reason to toil tirelessly over the last remaining weeks to best prepare ourselves for this event. In reality it is my wish that this event be a ‘non-event’ – to the extent that it provide as seamless as possible a transition for internal and external users. However, that is wishful thinking since the sheer scope of this programme necessitates ‘challenges’ to both 3rd party service provider, trader, trade practitioner, and customs policy makers alike. Over the last 2 months, not a day has gone by without one or other procedure, policy or IT technical issue being raised which necessitates a rethink or alternative consideration.

Modernisation programmes have a transitional element which poses difficulties in terms of timing and coordination. In the South African context the first phase is about putting Customs and the trading community in the right space to migrate from dated legacy clearance practices to principles of a new customs legal dispensation – to be introduced sometime in 2011. Information Technology is undoubtedly the key enabler here, which is the reason SARS chose the migration from clearance by ‘purpose code’ to ‘customs procedure code’ as the catalyst to kickstart its longer term modernisation strategy. Phase 1 is the most critical delivery in that its outcome not only determines the collective ability of Customs and Trade to modernise, but the ‘apetite’ to continue the journey over the next phases of this programme to bring into being a true fully automated end-to-end supply chain.