Freight & Trade Alliance (FTA) is currently preparing a "Discussion Paper" examining potential solutions to address compliance in the timeliness of Cargo Reporting.
The paper will submitted to the Australian Border Force (ABF) and discussed with industry participants at the Compliance Advisory Group (CAG) meeting scheduled for 13 December 2017.
What is a Cargo Report?
The design of the Integrated Cargo System (ICS) Cargo Report serves three primary functions:
Cargo Control & Accounting (CC&A) providing the framework / manifest of all import sea and air cargo arriving into Australia on vessels and aircraft – against each Cargo Report, a matching clearance (underbond movement, Full Import Declaration or Self-assessment Clearance) is required to acquit and release all consignments;
pre-arrival data used for preliminary ABF risk assessment purposes; and
in some instances, provides an integrated Self-Assessment Clearance for the report AND clearance of low value import consignments.
Underpinning Cargo Reporting is legislation, systems and compliance measures aimed at achieving "accuracy" and "timelines" of cargo reporting by freight forwarders, shipping lines and airlines.
Accurate Cargo Reporting
The following detail gives industry guidance on how to meet accurate Cargo Reporting requirements:
Section 64AB (4B) of the Customs Act 1901 requires that an electronic cargo report must communicate such information as is set out in an approved statement.
The information collected on the cargo report is central to effective cargo control, pre-arrival risk assessments and in determining appropriate risk treatments and response. However, risk assessment and clearance processes can be adversely impacted by the use of deficient terms in cargo reports.
In the Goods Compliance Update – September 2017, the ABF has stated "In the first instance, a cargo reporter should lodge a cargo report based on the information available on the bill of lading."
It is assumed that a similar principle applies in the air cargo environment with Cargo Reporting data to align with that available on a Master Air Waybill (MAWB) or House Air Waybill (HAWB).
The Goods Compliance Update also makes reference to "deficient terms" that are insufficient or generic information in the key fields such as consignee / consignor name, address and goods description. The use of such information does not allow for an adequate risk assessment to be undertaken and may result in delays to clearance.
Examples of frequently used deficient terms include single characters or words such as A, UNKNOWN, GIFTS, SHIPMENT, AUSTRALIA, or NOT KNOWN. A full list of deficient terms can be found at https://www.border.gov.au/Complyingwithyourobligations/Documents/deficient-list-final.pdf
Timeliness of Cargo Reporting
Section 64AB of the Customs Act 1901 requires each Cargo Report to be provided at least 48 hours prior to arrival of the importing vessel at the first Australian port and 2 hours prior to arrival of the importing aircraft at the first Australian airport.
ABF compliance in tackling late Cargo Reporting
The ABF and its predecessor Customs agencies, have managed compliance campaigns since the ICS implementation aimed at improving the timeliness of Cargo Reporting. This has largely been in the form of educational campaigns and more recently through the provision of an online management tool for Cargo Reporters for self-assessment purposes – refer to DIBPN 2017/28.
The ABF are now moving to an increased use of Infringement Notices as demonstrated in the most recent Goods Compliance Update. In 2016 / 2017 a total of 49 Infringement Notices have been issued against Section 64AB(10) totalling $395,100. Subsequent enquiries from FTA to the ABF has highlighted that 92% of the INS were issued for sea cargo late reporting and 8% for air cargo.
The ABF has advised FTA that INS are only issued in circumstances where necessary to form part of a broader industry or sector compliance and enforcement program and where remedial or risk mitigation action was taken following ABF bringing the issues of concern to the person's attention, through a formal warning process.
Inflexible design of the ICS
One of the issues affecting timely Cargo Reporting is the inflexible nature of the ICS denying the ability to amend "consignment key" data including vessel Lloyds and voyage numbers. While a freight forwarder may have ocean Bill of Lading data well in advance of arrival into Australia, they may not know transhipment details including the actual import vessel and voyage preventing early cargo reporting.
FTA has previously requested enhancement to the ICS to allow freight forwarders to report early and to be able to simply amended cargo report data (including vessel, voyage, master B/L, house B/L, MAWB and HAWB). The FTA proposal suggested providing identical functionality and flexibility for Cargo Reporting that exists for amending Import Declarations.
This request has been declined due to complexity of ICS Cargo Reporting design that is reliant fixed consignment key data.
In response and as a means of a work-around, a solution to this scenario currently exists via ACCA Number 2007/08 which outlines the 24-hour screening over-ride procedure including:
withdrawal of the original cargo report;
re-submit new cargo report with correct key identifiers; and
complete B1000 to cargomovementcell@customs.gov.au
Supporting this process, the ABF will assess:
whether the screening period of the original Cargo Report has expired;
delivery of the cargo relatively imminent;
risk / compliance issues with original or re-submitted cargo report; and
circumstances for the change in cargo clearance
Preliminary feedback from FTA members is that this process is not commonly used due to its complexity and cumbersome design.
FTA Advocacy
To support the development of our Discussion Paper and ongoing reform advocacy, we are looking for industry feedback on the operational viability of the above process and other causes of late cargo reporting. We request your feedback by Friday 24 November 2017 to pzalai@FTAlliance.com.au
Paul Zalai – FTA / APSA