Businesses must fully understand the new EU import control regulations

Phase 3, all businesses exporting goods into the EU must participate in declarations on the ICS2 system. Source: European Commission website.

EU's early risk identification measures

The EU has been implementing a security and safety program applied by the Customs authorities before the arrival of goods, reinforced by a large-scale goods information collection system - ICS2. The information receipt program through this ICS2 system is one of the important contributions to enhancing integrated customs risk management within the framework of the EU's Common Risk Management Framework (CRMF). The ICS2 system revises the current processes in terms of IT, legal, management, and risk control of the Customs authorities and related trade activities.

Accordingly, the ICS2 system will collect data on all goods before they arrive at the EU border allowing for the early identification of security threats and enabling Customs to intervene at the most appropriate time in the supply chain. Thus, it more effectively protects the safety and security of EU Customs, enhances the protection of EU citizens and the domestic market from terrorist threats.

Additionally, the system also allows EU Customs to identify high-risk shipments earlier and intervene at the most appropriate time in the supply chain; supports appropriate customs measures in crisis response situations; facilitates clearance for legitimate cross-border trade; and modernizes the exchange of information between businesses and EU Customs.

Therefore, businesses will have to declare safe and secure data on the ICS2 system, through the Entry Summary Declaration (ENS). The obligation to submit such declarations will not be the same for all businesses, depending on the type of service provided during international goods transportation and is implemented in three operational phases of the ICS2 system. Specifically:

Phase 1 began on March 15, 2021, applying to three business entities operating in the fields of Express Delivery, Postal, and Postal Authorities from outside the EU.

Phase 2 began on March 1, 2023, applying to five entities including three from phase 1 and additionally courier companies, logistics, and air transport businesses.

Phase 3 begins on June 3, 2024, applying to all remaining entities including five from phases 1 and 2, additionally incorporating businesses involved in sea, rail, and road transport along with importers in the EU.

Severe consequences if businesses show non-compliance

To adapt to EU regulations and to meet the obligations of submitting ENS data, businesses need to upgrade their IT systems, business processes, and train personnel. Moreover, businesses are required to perform self-testing for compliance before beginning the declaration processes in the system.

From June 3, 2024, onwards, all logistics businesses, express delivery, courier, and businesses involved in sea, air, rail, and road transport related to goods exported from Vietnam to the EU must declare data before the goods arrive in the ICS2 system. If Vietnamese businesses are not aware of these regulations, they might face serious consequences such as: containers and shipments being stopped at the EU border; goods not being allowed clearance by EU Customs. Declarations that are incomplete or rejected may even be banned for not complying with EU regulations.

Additionally, businesses are legally responsible for the accuracy, completeness, and timeliness of the information declared on the ENS. Therefore, businesses need to pay attention to the information requirements on the declaration, such as: declaring the HS code (6 digits); the registration and identification number EORI (similar to the business number) of the recipient in the EU (Registration and identification can be verified on the European Commission website (europa.eu) to ensure the information is accurate). Businesses must also declare information about the Seller and Buyer and must have a Full Description of the goods in an easily understandable and sufficiently accurate language so that the Customs authority can identify the goods.

Moreover, businesses also need to be aware of the deadline for submitting ENS for sea, air, rail, and inland waterway transport. The submission of data can be in the form of a complete declaration if the data submitter has all the necessary data, or ENS data can be submitted multiple times in case more than one part of the ENS data is submitted by different parties in the supply chain.

According to regulations, EU Customs may reject an ENS declaration in case of missing information or if risk mitigation interventions are necessary in the stage before loading onto the ship or before the goods arrive, requiring the declarant to provide the necessary data, for instance in cases of inaccurate data. Therefore, businesses must decide whether to develop their own IT systems internally or use the services of an IT service provider to send ENS data to the ICS2 system. Particularly, businesses need to agree early with other parties involved in the supply chain on how to submit the ENS data.

Whether this can be done depends on whether the parties in the supply chain agree to provide the necessary commercial documentation information to the transport company. If "Yes," the transport company sends all requested information to ICS2 in the form of a complete ENS. If "No," the transport company's clients must either send a part of the related ENS information to ICS2 themselves or arrange for a third party in the supply chain to send the information.