EU Advance Cargo Declaration Regime

INTERTANKO G uidance and Model EUACD Charterparty Clauses

General

This EUACD Regulation (Reg. 648/2005) amends the Community Customs Code (Reg. 2913/92) laid down in 1992. The Customs Code was designed to provide complete EU legislation and effective co-operation between Member States on customs controls. The EUACD introduces a number of further measures to tighten up security for goods entering or leaving the EU by assessing any risk the goods present to the safety and security of the EU, its Member States and individuals. These measures include pre-arrival and pre-departure information which must be provided to the customs authorities in electronic format before the goods are brought into or taken out of the EU. Different time frames apply depending on the nature of the goods. Anyone filing customs declarations will also have an individual Economic Operator Registration and Identification (EORI) number, valid throughout the EU. The application process for an EORI need only therefore be carried out once.

Members should note that:

· The EUACD Regulation applies in addition to existing customs rules laid down in the Community Customs Code. The Regulation in fact amends the Customs Code.

· The EUACD Regulation applies to all shipping sectors.

· The EUACD rules will apply to all goods being imported to and exported from the EU.

· In the case of the import of goods an Entry Summary Declaration (ENS) must be filed with the customs office of first entry into the EU.

· In the case of export, re-export or outward processing of goods, a customs declaration or Exit Summary Declaration (EXS) must be filed with the customs office at the port of departure from the EU.

· The person making the summary declaration will receive confirmation of the receipt through a "Movement Reference Number".

· In the event of diversion of the ship, a diversion request must be submitted.

· The person responsible, and liable to declare the cargo information in advance, is the economic operator (either by himself or on his behalf e.g. by his agent). This will usually be the carrier, or his agents.

· The information submitted to the customs office must include the unique "Economic Operator Registration and Identification" number (EORI).

· Any failure by the carrier to comply with this regime will put the carrier at the risk of being penalised by individual Member States in accordance with their national legislation.

· The legal responsibility always lies with the carrier/operator of the vessel also in cases where the security filing is done by a third party.

· Penalties and fines for non-compliance are not covered by P & I insurance.

What information is required?

The cargo information that must be submitted to the customs office in advance is set out in Annex 30 A of Annex III to Regulation 1875/2006

Annex 30 A can be downloaded by clicking here.


How do I obtain an EORI number?

Many Members have asked us to clarify how they or their representatives can obtain an EORI number. The process to apply for an EORI number is set out in the attached guidance produced by the European Commission (EORI Guidelines)

Members will note that the application process differs depending on whether the applicant is established in or outside the EU:

1. Economic operators established in the EU will be registered by the customs authority of the Member State in which they are established.

2. Economic operators not established in the EU will be registered by the customs authority of the Member State where they first perform one of a number of customs activities listed in the EU Customs Code. These are listed in section 1.1.2. of the EORI guidance above.

That said, by registering, for customs purposes, in one Member State, operators are able to obtain a unique EORI number that is valid throughout the European Community. Note that the use of an EORI has been in place in the EU since July 2009.

Electronic filing

The advance cargo declarations must be filed electronically. The idea is to facilitate data exchange between the Member States’ customs authorities to enable an automated system of risk analysis. Unfortunately there is no EU-wide computer system available, nor is one planned for the immediate future. Each Member State therefore has different specification/file format requirements for communication with them in an electronic manner.

This means that shipping companies must use different formats for the electronic filing as required by each of the customs authorities in each Member State. To find out how to report in each Member State, shipping companies will have to contact that Member State. To assist with this, each Member State has an appointed IT manager acting as contact person for shipping companies. (For the list of IT managers for import click here, for export click here).

For companies who do not wish to establish their own system to enable them to meet the varied requirements of the computer systems of the relevant customs office, there are essentially two alternatives. We are aware that some of the larger agents are offering a solution that will deal with all Member State declarations. Alternatively Members may purchase a software solution from one of the market providers. A number of companies have developed software which will ensure that messages reach the national customs authorities according to the relevant national specifications.

Who is responsible for the declaration - Owner or charterer?

A number of Members have asked us which entity is responsible for making the summary declaration, the owner or the charterer. It might seem sensible for the summary declaration to be filed by the owner where the ship is on voyage charter and by the charterer when the ship is on time charter. However, such a division of responsibility may not suit all tanker trades. We understand certain owners have taken on responsibility for these declarations regardless of the form of the fixture involved.

The EUACD Regulation defines the responsible party to be the ‘economic operator’ , which in turn is defined by Commission Regulation 1875/2006/EC as:

‘a person who, in the course of his business, is involved in activities covered by customs legislation’ (Article 1)


There is as yet no clear guidance from the Commission on whether the owner or charterer is to be considered the ‘economic operator’ for the purposes of EUACD. We therefore take the term ‘economic operator’ to mean the ‘carrier’ i.e. in general terms, the registered owner, or in the case of a bareboat charter or where charterers have issued bills of lading, the charterer. (N.B. We have seen many references to the term ‘ship operator’ as the party responsible for filing the declarations. However, nowhere in the Regulation is the term ‘ship operator’ used.)

Given this, and in absence of any clarity from the Commission, we have concluded that the commercial parties must decide who will assume this responsibility, taking into account their own contractual arrangements, the nature of the particular trade and any special circumstances which may apply. Some Members have expressed concern at the prospect of loss of control of the process, regardless of whether they are owners, charter in or are part of a pool; others would rather leave this to time charterers who will have all the required information. That said we have also seen reluctance by some time charterers in assuming responsibility, in particular where they are not EU based and find the Regulations complex and unclear.

INTERTANKO Model Clauses

The Documentary Committee has produced two Model Clauses to address these concerns. These cater for the situation where an owner wishes to retain control of the process and where a charterer will assume that role. The Documentary Committee felt that the production of clauses based on whether the trade is fixed on time or voyage charter failed to recognise the complexities of the tanker trades, and the scenarios various Members presented us with. In addition, a number of Members were concerned that in assuming the role of ‘economic operator’ (carrier) for this purpose there might be a conclusion that they assume the role for all purposes. The clauses therefore also address this point.

The clauses below create a straightforward obligation on whichever party agrees to bear the responsibility for the declaration. Where the owner is to take responsibility it is clear that he will need the charterer to provide him with the requisite information for the declaration. Whilst legal responsibility for the declaration will always lie with the carrier, regardless of who makes the declaration, the Committee did not consider that there was a need to include in the clause any blanket indemnities for the consequences of any failure to comply with the clauses. Such indemnities would likely make the clauses unattractive and are unlikely in any event to give the parties any better rights than already exist as a matter of law for the consequences of a breach of charter. Any failure to comply with the clauses below would in any event be a breach of charter and damages would follow in the usual manner as with any other breach.

EU Advance Cargo Declaration Clause s

Where O wners to be responsible for summary declaration :

Without prejudice to any other provisions of this charterparty, Owners shall assume the role of carrier for the purposes of the EU Advance Cargo Notification Regulation 648/2005 and any subsequent amendments thereto (EUACD Regulation s ) .

Owners shall comply with the EUACD Regulation s . Charterers shall supply Owners with all necessary information at such time as will enable the Owners to comply.

Where C harterers to be responsible for summary declaration

Without prejudice to any other provisions of this charterparty, Charterers shall assume the role of carrier for the purposes of the EU Advance Cargo Notification Regulation 648/2005 and any subsequent amendments thereto (EUACD Regulation s ) .

Charterers shall comply with the EUACD Regulation s .

The Documentary Committee will continue to monitor the Regulations and will revise these clauses as necessary to reflect Members’ experience of how the Regulations are applied by the Member States in practice.

(NB: Whilst the clauses deal specifically with the EUACD Regulation, they could also be extended to incorporate obligations under the US Automated Manifest System Regulations by introducing an addition to paragraph 1. ‘and for the purposes of the US Automated Manifest System Regulations (AMS)’ and adding ‘and AMS Regulations’ to paragraph 2.)

Third party declarations

Members should note that someone other than the carrier can lodge the cargo declaration. The third party should then provide both his and the carrier’s EORI number in the summary declaration. However, this does not relieve the carrier of responsibility to the customs authorities if the declaration is not delivered on time. The Regulations therefore provide that a third party may only lodge the declaration with the carrier’s knowledge and consent. The customs office may assume that such knowledge and consent exists so we advise Members to record this in writing.

In conclusion

This is a complex process which lacks some clarity. Members will appreciate that without practical experience it is difficult to provide further guidance at this stage. This will be developed and the Model clauses reviewed as we see the full practical application of the EUACD Regulations at work. Members are therefore invited to share their experience of the practical application of the Regulations so that the Documentary Committee may revise the clauses to fit with any issues that arise.

Contact: Kristian Fuglesang or Michele White