[170216.EN.BIZ] Forwarders: More to Fear Than Cheer in EU's New Customs Code

FORWARDERS say there is more to fear than cheer from the new European Union Customs Code that comes into force in May.

The biggest concern is potentially added costs. For instance, the new regime will make financial guarantees for clearance mandatory across the EU.

British forwarders for instance face no such requirements. And where there are such requirements, forwarders are worried rates will rise, reports Atlanta area Air Cargo World.

The Austrian Chamber of Commerce advised the industry in December that the "reference amount" for bundled exports processed without a declared amount will increase from EUR7,000 (US$7,700) to EUR10,000 per clearance.

Uwe Glaser, CEO of Vienna forwarder Cargomind, said he favours the American system of export bonds that are borne by the shipper. The European regime places the onus on the forwarder, he noted.

But forwarders can obtain a reduction or even an waiver if they sign up for the Authorised Economic Operator (AEO) scheme.

This certifies one as "a party involved in the international movement of goods in whatever function that has been approved by or on behalf of a national Customs administration as complying with WCO or equivalent supply chain security standards".

Authorities seek maximum AEO membership. Only certified AEOs are eligible for a simplified declaration process and for self-assessment although it remains unclear how risk assessment will be handled.

"They are pushing everybody to become AEOs," said Andreiv Geurtsen, general manager of Dutch forwarder Legero.

Probably the most important AEO perk under the new regime is the ability for companies to perform customs clearance in multiple locations from one central spot.

"If you can perform central clearance from one location, you don’t need to duplicate the work and the investment in the requisite skills in all branches in your network," Mr Glaser said.

But incentives come at a cost. Certification fees are between EUR5,000 to EUR10,000 per company. The price tag may make some forwarders think twice.

Smaller agents may have an even larger problem beyond the financial outlay. To be AEO-certified, applicants must have at least three years of demonstrable customs clearance experience, and the licensing process can take about six months. This would be well past the implementation deadline in May for new applicants, he said.

Mr Glaser said broad AEO adoption is an effort to formalise the industry, rather than make it better. "Are you a better forwarder if you are AEO licensed?" he asked. He also questioned whether an AEO cert is any better than an ISO 9002 certification.

Timing concerns The International Air Cargo Association (TIACA). In a note to members, TIACA secretary general Doug Brittin warned that "the Union Customs Code is just six months away from coming into force and will have a considerable impact on businesses importing into, or exporting from, the European Union".

The pending regulations, he wrote, propose "imposing an obligation on traders to provide financial guarantees for the use of temporary storage. "This obligation can be waived, Mr Brittin said, but only by a specific authorisation that must be granted by EU member states.

Source : HKSG.