ASM says the Government’s CDS software solution is unworkable for Northern Ireland

Agency Sector Management (ASM), a Customs clearance software provider for freight forwarders, has written to Her Majesty's Revenue and Customs (HMRC) stating it will not be offering or supporting a software solution that uses the Customs Declaration Service (CDS) for shipments in and out of Northern Ireland (NI).

The full letter to Jim Harra, Chief Executive and First Permanent Secretary HMRC, can be found below and – as of the release of this statement – has not yet received a response.

I am writing to formally notify you that ASM will not be offering a software solution, using CDS, for shipments to and from NI. You will be aware that the original plan for CDS migration and the subsequent shut down of CHIEF [Customs Handling of Import and Export Freight] was scheduled for September 2020. After extensive meetings with the SWH's [software house], CSP's [community service provider] and HMRC it was realised and accepted that this date was totally unachievable and a realistic, albeit challenging date, was the end of 2021 and even this was likely to slip. This date was conditional on the CDS Program delivering some functions and changes in agreed timescales but not all of these milestones were met. Whilst some organisations may have been able to accelerate their timescales not everyone has been able to do so and there are significant sectors of trade that will not be ready for 1st January.

When it was announced that CDS was the intended solution for delivery of the NI Protocol and would be required to go live on 1st January 2021 we undertook a review of our readiness for that date. We established that with an amount of de-scoping it was possible that we could have a rudimentary solution available for supplementary import declarations towards the end of the year. We had no possibility of inventory linked import or export functionality being available as there were, and are, significant gaps in some aspects of required functionality from both the CSP’s and the core HMRC CDS system. There are still blocking issues on export declarations, revenue creating import declarations and export dual running (inventory linking etc. when both CHIEF and CDS are in use).

We concluded that we had no realistic chance of releasing a CDS compliant solution, training our users and helpdesk staff before the end of March 2021. We felt that any product we did release carried with it the risk of significant reputational damage as it would be nowhere near the standard expected by our users.

We also had and still have significant reservations over the level of technical support that HMRC can provide. Supporting ten live users making a few thousand declarations a month is a very different proposition from handling the expected one million inbound NI and 40,000 outbound shipments per month. CDS is not only a change of computer system it is a change of data elements and Customs regulations. It is not widely understood amongst our users, who are predominately intermediaries and is even less well known among the end users, importers and exporters, who are required to provide the additional data that will be required. Many of the relationships between intermediaries and their customers are based on electronic data exchange so any changes in what is required may involve changes to both of their internal systems. These changes typically take up to 18 months to complete.

Taking all of this into consideration we consider that there is a totally unacceptable level of risk in mandating CDS and not having any workable contingency plans. There is no benefit to trade in using CDS, it is a decision based on the requirement to operate the UK and the EU tariff concurrently and the requirement to supply the EU with surveillance data. The spectre of paralysing the whole NI’s trade movements is real and we do not think that the TSS [Trader Support Service] can mitigate this to an acceptable level. We would urge you to start to look at viable alternatives, ideally using CHIEF which is currently in use and widely understood by all parties involved in trade with NI.