Airmax Cargo Budapest Zrt., a member of the New Silk Road Network representing Hungary, has shared the latest update about the National Import System in Hungary with the aim of providing practical advice on the current state as well as any changes to the regulations.
Modernisation of the National Import System (NIS)
The Union Customs Code (Regulation No 952/2013 of the European Parliament and of the Council) was published on 10 October 2013 and is about to apply since 1 May 2016. The introduction of the Union Customs Code has been and still is a major challenge for customs authorities from an IT perspective, as the electronic data processing techniques under the Union Customs Code are different from the previous/current IT systems, i.e. they can be used until 31 December 2025, by which time all the electronic systems necessary to apply the provisions of the Union Customs Code will have to be in place. Article 6 of the UCC provides that the exchange and storage of information between customs authorities and between customs authorities and traders must be carried out using an electronic data processing technique. The necessary IT systems must be upgraded, the electronic systems to be developed for this upgrade and the timeframes available are set out in the work programme of the Union Customs Code.
The first planned date for the modernisation of the national import system - currently CDPS in Hungary - was 31 December 2022. Hungary has submitted a derogation request to the European Commission to postpone the mandatory introduction of the new national import system. The request was voted on 16 December 2022, giving Hungary the possibility to postpone the introduction of the new national import system until 31 December 2023. The Hungarian customs administration has decided to introduce the new national import system earlier, on 1 November 2023, and the development project is called "Modernisation of the National Import System" (NIS). At the start of the project, the aim was to further develop the current CDPS, but due to new technical requirements and complicated system interfaces, the development will be carried out in the new e-Customs system, of which the new import system will be a module. In practice, this means that the import declaration module of the current customs declaration processing system (CDPS) will be replaced by the e-Customs (AIS) system.
This system development will also involve the application of a new EU legal framework, with new data elements being added, using new client software delivered by software houses. The new software was tested between 1 July and 3 September 2023 and the results are currently being evaluated.
With the implementation of the new e-Customs system, not only will the customs professional side notice changes and be forced to deal with them, but soon all our customers involved in third country imports will have to prepare to deal with new and discontinued customs documents, corporate governance, accounting, and other internal processes due to the changed processing system.
The Single Administrative Document (SAD), which has been in use since 1995 and has already proved transparent for many of our customers, will be discontinued, from now on, the goods declarations and supplementary declarations will have to be submitted to customs via the new e-Customs system, paper submission will no longer be possible. It is interesting to note that not only paper-based data, but also electronic data will no longer be available on the EV, instead the mandatory/optional data will have to be provided to the customs IT system as a so-called data element.
Under the new system, a decision will only be taken if a custom, VAT or possibly excise duty liability arises. The release of the goods does not justify a decision, the release message is sufficient. In the case of VAT self-assessment, no decision is taken if no customs duty is due, but the customer is still informed of the amount of VAT due under the self-assessment. On the decision document, the decision number is used as the financial identification number, and the annex to the decision, the so-called information sheet, which has been the itemised annex, is not issued.
In cases where no customs duties and import VAT are paid (e.g., most often 0% duty and customs clearance by indirect representation), the customs decision is terminated. Traders who do their accounting based on the customs decision will also need to review their accounting processes to adapt to the new systems in this respect.
In addition to the three stakeholders of the previous EV document (Exporter (heading 2), Importer (heading 8) and Declarant (heading 14)), it is now possible to enter several stakeholders involved in the procurement process. These additional participants can be "Stakeholders in the supply chain": Consolidator, Supplier, Manufacturer and Warehousing Authorisation Holder.
In the case of payment by decision, the existing payment solutions will also change, they will be slightly more sophisticated in the future, e.g., payment by credit card (VPOS, e-bank) and payment by bank transfer will be separated, and we will need to have information about them before customs clearance starts.
To comply with the new data requirements, additional information may be required that was not previously needed to complete customs clearance procedures, so we will also be expanding the data content of our import clearance authorisation soon, and forms with the new data content will be available soon.
The introduction of the new import system is not expected to be smooth, the continuity of the processing of customs clearance cannot be guaranteed, therefore we would like to draw the attention of our customers that after the introduction there may be slowdowns in the processing of import customs clearance and unforeseen circumstances following an IT changeover of such a volume, which may cause difficulties in the initial period in the usual course of import processes in all modalities. We would like to ask for your patience and understanding for the possible slowdowns and delays due to the implementation, our colleagues will do their best to ensure that we can handle the incoming goods with as little loss of time as possible and to the usual standard.
The "carbon tax" starts in October
As an update also related to the import tariff and trade compliance processes, we would like to draw your attention to the fact that the carbon intensity offsetting mechanism for imported goods, the so-called "carbon duty" or CBAM, will enter into force on 1 October 2023.
Below is a brief description of what it is all about:
Regulation (EU) 2023/956 of the European Parliament and of the Council (hereafter: CBAM Regulation) regulates the obligations related to the import processes for offsetting the carbon intensity of certain imported goods, to address the greenhouse gas emissions embedded in the products. Any importer established in an EU Member State wishing to import such goods into the EU must apply for an authorized CBAM declarant status, as this will be the only way to apply for the customs procedure for release into free circulation after the transitional period from 1 January 2026. If the importer is not established in a Member State, the reporting obligations will be transferred to the indirect customs representative used for the customs procedure. Product coverage covered by the declaration and reporting obligation:
However, the CBAM Regulation does not apply to the following goods:
Unfortunately, the new system of rules will not be simple, so there will be uncertainty for both the authorities and the customer in the initial period. It will be necessary for all stakeholders to review their supply chains, especially their purchases of non-EU goods, including the tariff classification of goods, and the control and review of the calculation methods for direct and indirect GHG emissions related to the business’ activities is also of utmost importance, especially with regard to carbon dioxide equivalence.
Under the provisions on carbon duty, three phases can be distinguished in relation to its introduction:
From 1 October 2023 to 31 December 2025. Each importer or indirect customs representative who imported goods during a given quarter of a calendar year shall submit a CBAM report to the Commission for the said quarter no later than one month after the end of that quarter, which contains information on the goods imported during that quarter. The Regulation imposes an information obligation on customs authorities from the start of the transitional period. This means that customs authorities will inform the importers and indirect customs representatives concerned of their reporting obligations at the latest when the goods are released for free circulation after 1 October 2023.
From 31 December 2024 to 1 January 2023. The importer or the indirect customs representative must apply for CBAM declarant status before the goods covered by the CBAM are brought into the customs territory of the Union. The application for authorisation should be issued to the competent authority of the applicant's place of establishment (no designated authority yet, most probably not customs), provided that the applicant fulfils the necessary conditions. This includes, inter alia, proof of the financial and operational capacity to fulfil the obligations or that the applicant has not been involved in any breach of customs or tax legislation or market abuse within 5 years. The applicant must be established in a Member State and hold an EORI number.
Period from 1 January 2026. The Regulation will become fully applicable, only authorised CBAM declarants will be allowed to bring goods covered by the Regulation into the customs territory of the Union, which will be controlled by customs authorities and only such import shipments will be allowed. From 1 January 2026, the sanctioning system will also be strengthened, creating the possibility for control authorities to impose fines, in some cases up to three to five times the basic amount of the fine.
From 2026, imports of the products concerned will only be possible with a CBAM certificate, for which only an authorised CBAM declarant will be able to purchase a CBAM certificate. The certificate will have to be purchased and will be subject to a fee. The price of the certificate will be determined based on the manufacturer's declaration linked to the imported goods, considering actual emissions, with a so-called default value as defined in the Regulation. It is essential to plan a preparatory process to define the scope, identify and assess the sources of supply, collect supplier/manufacturer declarations of embedded CO2 content. For the economic import activity, a preliminary calculation will be necessary to take into account the cost increase and administrative burden due to the carbon tax, followed by a decision on the procurement (EU internal market < <--> 3rd country procurement <-->own production).
Airmax Cargo Budapest thank to its vast expertise, is actively seeking solutions to guarantee the secure and swift delivery of shipments to its intended destination while staying within a reasonable budget.