The arrival of the Customs Declaration Service (“CDS”) has been a long time in the waiting.
As of 4 June 2024, the old Customs Handling of Import and Export Freight, or more commonly referred to as the “CHIEF” system, has finally been discontinued.
Having been operating for over 30 years, the introduction of the CDS and removal of CHIEF is likely a welcomed change, in principle. It remains to be seen as to whether persistent problematic issues encountered with CHIEF have been resolved.
An overview of the new CDS system
The new CDS system, which has been operating in a transitional period since 2018, made up around 30% of all export declarations as of March this past year.
Given that CHIEF was originally planned to be shut down in March 2024 (and this was already a delayed date – the CDS was intended to be fully operational when the UK left the EU), the practical difficulties in switching such a substantial system have clearly been evident.
Now that the CDS is (apparently) fully operational – time will tell if the migration of all import and export functions has been successful.
The key question here is whether the CDS system will be functional and effective in practice? This remains to be seen (and we will revisit this in a subsequent update).
The advent and consequences of Brexit have undoubtedly hampered the transition. The capacity implications were massively underestimated.
To combat the shortfall, a deferred migration was planned – allowing traders to stagger the transfer between systems, to maximise the number of declarations possible – whilst increasing CDS capabilities.
The process was prolonged and expensive – but with the switch-over now triggered, the new system faces an immediate challenge. The industry operators need this change to be seamless and efficient – with the expectation that CDS is indeed an effective replacement for its ageing and unfit predecessor.
Towards the end of its life, the CHIEF system has come under sharp criticism from various industries for its practical shortcomings.
Issues surrounding quotas being claimed, the use of duty override codes, and inconsistent advice relating to such have all dented confidence in the CHIEF system.
Will the new CDS system result in a reduction of such issues? Or will the added volume of custom declarations prove to be too much?
In truth, we have no assurances that the new CDS platform can accommodate the volumes and complexities that operators face on a daily basis. We do not yet know if the new system is fit for its intended purpose.
Traders using the new CDS system should ensure they are always up to date with the latest HMRC Guidance – which, in itself, often proves to be a challenging proposition.
If you need legal advice on how to remain compliant, don’t hesitate to contact our team.