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Industry tells House of Lords committee it has ‘grave reservations’ about CDS

The Customs Declaration Service is untested, unproven and not ready, and HMRC is taking a “cloak and dagger approach” to working with the industry, hears a Lords committee – but HMRC says delivery of Brexit IT is on track

Industry has warned that the Customs Declaration Service (CDS), which will be used on the Ireland/Northern Ireland border from 1 January 2021, is not ready, and its functionality remains “unproven”.

CDS is the replacement for the old Customs Handling of Import and Export Freight (Chief) system. Originally, HMRC was due to turn off Chief by March 2020, but the department is now planning to run it as part of a dual approach, where traders use Chief for customs declarations relating to imports in Great Britain, while CDS will be used for those relating to Northern Ireland until CDS has been scaled to be able to handle the increased volumes of declarations.

Giving evidence to the House of Lords EU Goods Sub-Committee, Des Hiscock, regional CEO at Customs Support and UK Association for International Trade director general, said the readiness of CDS to be used at the Irish border is causing concern among industry.

“This system is not ready and is unproven. The system has been dramatically descaled from what was initially promised and is not going to deliver what is needed to effectively manage UK borders,” he said, adding that as of Friday last week (6 November), there were problems in simply communicating with the system.

“With 52 days to go, this is simply unacceptable. This is our biggest issue from a systems perspective,” he said.

“Let’s not forget that CDS is a completely untested system. We don’t actually have any people trained to make declarations on this system.”

Hiscock added that Chief is a robust system which works well, but that the declaration process on CDS is “completely different”. “All our declarants in this country are completely untrained to make a declaration, and CDS is far more complex,” he said. “It takes four times as long to make a declaration into CDS than what it does into chief.”

Untested and incomplete

He said that using CDS is one of the main challenges industry faces by having to use CDS, as well as “the UK’s unnecessary insistence on pursuing this untested and incomplete system”.

“It’s not going to be ready,” he said, adding that it takes four to five times longer to make declarations on CDS than it does on the old Chief system. “It’s unreliable. Its functionality has been significantly reduced. CDS requires more data elements to be completed than what you require in chief. We don’t have declarants trying to make declarations into the system.”

Association of Freight Software Suppliers (AFSS) chair Stephen Bartlett also gave evidence to the committee. He has previously voiced concerns that industry won’t be able to get ready by 1 January, and last month wrote to HMRC as most AFSS members can’t guarantee to have a Customs Declaration Service (CDS) product ready due to not being given enough details on the specifications needed.

As Computer Weekly previously reported in October 2020, there are gaps of detailed information and direction given to industry.

“Even if they could deliver a minimum viable product, it is unrealistic to expect that their users will have sufficient time and knowledge to learn the new processes for January 2021,” he said at the time.

Read more about Brexit and IT

Speaking to the committee, Bartlett said that at the end of last year, a plan was agreed whereby when the software for CDS was delivered at the beginning of 2020, industry could spend the rest of the year testing it, with a view to roll it out to customers in 2020 and 2021. However, earlier this year, it was mandated that CDS would be the standard system used for Northern Ireland, as it complies with the Unified Customs Code.

“We have some grave reservations about that system because we don’t feel it is a proven system yet. We do have a few traders o that system currently, but there are only a few traders doing very simplified declarations,” he said, adding that a lot of the functionality industry requires to “make it a working system” won’t be delivered to them until late November or early December, which leaves us no time at all to test and deploy this to our customers in a month.

“To have a successful integration we need things like stable set of requirements, accurate technical specifications and an agreed timescales, which unfortunately have been sadly lacking,” he added.

HMRC IT on track

CDS is only one of many systems being delivered by HMRC to be used at the UK border by the end of the Brexit transition period.

HMRC’s head of customs transformation, Sue Roberts, repeatedly told the committee that all key IT systems delivered by HMRC are “on track”, including CDS.

“We are confident that from an HMRC IT delivery perspective we will meet the 31 December deadline,” she said, adding that industry was provided with technical specifications “through the summer” and that the latest release was put into trade testing on 15 October. However, she added that she did recognise this was a challenging time for industry.

“In terms of the system, from an HMRC IT delivery we are on track against our plans. We do recognise there are risks associated with that. The test windows and times are very compressed and we are putting in place and strengthening our support arrangements,” she said.

Mark Dearnley, HMRC’s director of IT, EU Transition and Covid-19 Chancellor Schemes, said that CDS “is a live service” and that the priority is to work with industry to ensure readiness.

“CDS is a live system already and we have live declarations going through it. It’s very stable and have been for some time,” he said.

Cloak and dagger

Speaking to the committee, Des Hiscock also criticised HMRC for taking a “cloak and dagger” type approach to development “where industry experts are not involved until it’s absolutely too late.

“I think the consequences could be catastrophic and we need to agree a contingency plan between HMRC and this industry if we are to achieve any measure of success. We need them to be work directly with our industry sector to solve this issue,” he said.

Refusing to comment on the cloak and dagger remark, HMRC’s Sue Roberts said the government has been giving “clear information regarding what will be required by the end of the transition period” and have provided guidance and technical support “to those that need to make changes to their systems”, as well as allowing them to test it.

The government is also funding a £200m trader support service “to complete digital processes on behalf of businesses importing goods” into the country.

Last week, the National Audit Office published a report on the UK’s readiness for the end of the Brexit transition period, which warned that “widespread disruption is likely” and raised concerns over several IT systems.

Dearnley told the committee that the report was a “point in time assessment” done in October, and that since then the department has been working “very hard to bring our systems up to scratch”.

“We have high confidence we will deliver that suite of systems by 1 January and beyond,” he said. 

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