Customs Declaration Service Inventory Linking Exports Dual Running

Customs Declaration Service Inventory Linking Exports Dual Running Solution High level overview May 2019 Official – Protective Marking

Customs Declaration Service Agenda • Background • CSP Solution Overview • Contingency Solution Overview • ILE Dual Running Solution In More Detail • Phase 1 ILE Dual Running Scenarios • Phase 2 ILE Dual Running Scenarios • Relevant CDS Release Timelines • To Summarise Official – Protective Marking 2

Customs Declaration Service Background • Following several engagements and consultations, a big bang cut over was considered not suitable. • 3 viable options were presented to the CSPs for their consideration (including their own): 1. Solution proposed by CSPs – Enables dual message processing of CHIEF and CDS movements and declarations, but consolidations required duplicate messages. 2. Contingency solution – Managed big bang by sector over a specified period of time 3. Optimum solution – Catered for movements, declarations and consolidations in both CHIEF and CDS. The following slides will go into each of these in more detail but the Optimum solution was chosen and renamed the ILE dual running solution. Official – Protective Marking 3

Customs Declaration Service CSP Solution Overview (1/2) CSPs recognise that any effective dual running solution requires them all to be able to handle both EDIFACT and CDS XML messages for declaration, consolidation and movement messages at a given point. This gives SWDs a flexibility to roll out their software at a gradual and managed pace so that individual customers can use either CDS or CHIEF through any CSP controlled export location. The proposal from the CSPs meant: • For an individual declaration, a CSP would be able to accept EDIFACT or XML messages and send to either CHIEF or CDS, as appropriate. • For an individual movement, a CSP would send XML messages and send to CDS only. A new component (Movement Message Aggregator - MMA) within DMS would communicate with CHIEF and process the movement message in both systems. A single aggregated XML response would be returned to the CSP. • For an individual consolidation, a CSP would be able to accept EDIFACT or XML messages and send to either CHIEF or CDS, as appropriate. Official – Protective Marking 4

Customs Declaration Service CSP Solution Overview (2/2) Risk: • If consolidations are sent to only one system, declarations present in the other system will not be risk assessed, arrived or departed Impact: • There will be an increase in unauthorised loading offences as goods will physically leave the UK. • Unfinalised declarations will require manual post departure reconciliation. Mitigation: • Consolidations must be sent to both CHIEF and CDS by either the CSPs or all SWDs who provide consolidation (DEPs) functionality. These systems must be able to handle responses from both systems. • Following external stakeholder engagement with both CSPs & SWDs, feedback suggests that there is a reluctance to make this temporary change, i. e. to support 2 messages concurrently, therefore this solution was discounted. Official – Protective Marking 5

Customs Declaration Service Contingency solution This was a managed migration approach tailored for each CSP but effectively a series of big bang cutovers. • DMS would already be operational • The same go-live date for all CSPs and SWDs • A preparation period (3 -7 days), cutover day followed by a transition period (3 days) • CHIEF would be closed to the trade from the cutover point and all data migrated to CDS from CHIEF of “in-flight” declarations, consolidations and movements after this point. • The level of risk was considered too high by the CSPs, and therefore this solution was discounted. Official – Protective Marking 6

Customs Declaration Service ILE Dual Running Solution Overview (1/9) How does the ILE Dual Running Solution differ to the CSP Solution? The ILE Dual Running solution is an extension of the CSP solution whereby the proposed CDS MMA component is further developed to handle consolidation messages - CHIEF & DMS Aggregator (CDA). For this solution to work, consolidations need to be in XML format during phase 2. In principle, and for the benefit of their customers, CSPs have agreed to convert any incoming EDIFACT EAC and CST messages to XML and visa versa back to the originating source. The added benefits are: • Dual message handling of consolidation messages therefore mitigating risk highlighted in the CSP solution slides. • No additional significant IT build effort for CSPs or SWDs • A phased implementation approach takes away all the risks associated to a big bang cutover. • Phase 1 allows CSPs to “test” the new CDA component and to gradually increase the volume of messages handled by CDS (stress testing) • Phase 2 provides flexibility for software developers and their customers who will benefit from a seamless transition to CDS. • Options for migrating selected supply chain traders per CSP Official – Protective Marking 7

Customs Declaration Service ILE Dual Running Solution Overview (2/9) The implementation of Phase 2 of this solution will take place on a specific date once all the CSPs have indicated that they are ready to communicate using CDS XML messages or have a message translator in operation, but can continue to accept CHIEF EDIFACT messages for declarations only. This gives SWDs a flexibility to roll out their software at a gradual and managed pace so that individual customers can use either CDS or CHIEF (or both) through any CSP controlled export location • For an individual declaration, a CSP will be able to accept EDIFACT or XML messages and send to either CHIEF or CDS, as appropriate. • For all movement, a CSP will send XML messages (converting if required) and send to CDS only. • For all consolidation, a CSP will send XML messages (converting if required) and send to CDS only. • A new component (CDA – CHIEF and DMS Aggregator) within CDS has been built by HMRC. • This component will communicate with CHIEF and process consolidation and movement messages in both systems. A single aggregated XML response for the consolidation and/or movement will be returned to the CSP. Official – Protective Marking 8

Customs Declaration Service ILE Dual Running Solution Overview (3/9) To reduce impact to the trade, a phased approach can be adopted by the individual CSPs: There is a dependency on all CSPs being ready before Phase 2 can commence, this will facilitate SWDs with their software rollout in a manageable and flexible approach through any CSP controlled export location. Phase 1 • Participating CSPs can start to send consolidation and movement messages to CDA • This phase is optional for CSPs but is considered highly desirable as it validates interfaces and volumetrics between CSPs and CDA. • SWDs will not be impacted in this phase. • Declarations will be in CHIEF only • If CSPs are joining this phase they must build a message translator, or should be CDS ready to send and receive consolidation/movement messages in XML format Phase 2 • This phase will commence on a specific date when all CSPs are able to send consolidation, movement and XML declaration messages to CDS only. • Declarations can still be made in CHIEF. • Declaration can now be made in CDS. • SWDs can roll out their CDS software gradually Phase 3 • CHIEF and CDA will be decommissioned on a specific date • All software and messaging will be CDS only Official – Protective Marking 9

Customs Declaration Service ILE Dual Running Solution Overview (4/9) Technical Details In phase 2 of this solution you can submit declarations in both CHIEF and CDS whilst all consolidations and movements will be handled by CDS only. CDS consists of 2 core components: • Declaration Management System (DMS) – handles declarations • Inventory Linking Exports (ILE) – handles consolidations and movements • CDA is a temporary additional component to enable dual message processing between CHIEF and CDS Official – Protective Marking ILE DMS CDS CHIEF CDA 10

Customs Declaration Service ILE Dual Running Solution Overview (5/9) Consolidations at DUCR level During phase 1, CSPs will be sending declarations to CHIEF only and participating CSPs will be sending EAC messages to CHIEF via CDS. During phase 2, all CSPs will be sending EAC messages to CHIEF via CDS. For EAC messages - CDA will initially query ILE (which is in sync with DMS) for the DUCR and receive either a positive or negative response back. • A positive response will result in the EAC message being sent to ILE where an ILE MUCR tree will be maintained. • A negative response will result in the EAC message being sent to CHIEF where a CHIEF MUCR tree will be maintained. ILE SWD Key EDI Message translator XML CSP Positive ILE query response Query Kept in sync DMS CHIEF CDS CDA Negative CHIEF query response Phase 2 (CSP with message translator) EAC Official – Protective Marking 11

Customs Declaration Service ILE Dual Running Solution Overview (6/9) Consolidations at MUCR Level During phase 1, CSPs will be sending declarations to CHIEF only and participating CSPs will be sending EAC messages to CHIEF via CDS. During phase 2, all CSPs will be sending EAC messages to CHIEF via CDS. For EAC messages - CDA will send to both systems. • Where the MUCR exists fully in one system, a new MUCR tree will be maintained. CDA will return an XML response and supress the negative response from the other system. • Where the MUCR exists partially in both systems, CDA will aggregate both responses and return a single response to the CSP. CST messages - CDA will automatically send to both ILE and CHIEF. ILE SWD Key EDI Kept in sync DMS Message translator XML CSP CDS CHIEF CDA CST Phase 2 (CSP with message translator) EAC Official – Protective Marking 12

Customs Declaration Service ILE Dual Running Solution Overview (7/9) Movements DUCR During phase 1, participating CSPs can start sending some or all movement messages to CHIEF via CDA. During phase 2, all CSPs will be sending all movement messages to CHIEF and ILE via CDA. • EAA, EAL and EDL messages at DUCR level, CDA will initially query ILE for the DUCR and receive either a positive or negative response back. Dependent on that response, the DUCR will be arrived or departed in the appropriate system. • Generated ERSs will be forwarded to the CSPs. • EAA and EAL messages for which no declaration is found on either system will result in CRC 101/102 codes being returned by CDA to CSPs and a ‘placeholder’ created on both systems. DEP (loader) Message translator EDI CSP ILE CDS XML Query CSP (loader) Key Kept in sync Positive ILE query response CDA DMS CHIEF Negative ILE query response XML EAA/EAL/EDL DUCR Phase 2 Official – Protective Marking 13

Customs Declaration Service ILE Dual Running Solution Overview (8/9) Movements MUCR During phase 1, participating CSPs can start sending some or all movement messages to CHIEF via CDA. During phase 2, all CSPs will be sending all movement messages to CHIEF and ILE via CDA. • EAA, EAL and EDL messages at MUCR level, CDA will automatically send to both ILE and CHIEF. • If a MUCR tree exists (in full or partially) in ILE, these DUCR’s will be arrived/departed. If a MUCR tree exists (in full or partially) in CHIEF, these DUCR’s will be arrived/departed. • In Phase 1, CDA will return generated EMRs from CHIEF to the CSPs. • In Phase 2, CDA will aggregate responses from both CHIEF and ILE and return a single response back to the CSP, integrating data from both MUCR trees if applicable. • EAA and EAL messages for which no declaration is found on either system will result in CRC 101/102 codes being returned by CDA to CSPs and a ‘placeholder’ created on both systems. DEP/Airline (loader) EDI Message translator CSP Key EAA/EAL/EDL MUCR CSP (loader) ILE XML Kept in sync CDS CDA Official – Protective Marking DMS CHIEF Phase 2 14

Customs Declaration Service ILE Dual Running Solution Overview (9/9) Held MUCRs (mixed consolidations) • In Phase 2, CDA will aggregate responses from both CHIEF and ILE and return a single response back to the CSP, integrating data from both MUCR trees if applicable. If one or more DUCRs do not receive clearance (P 2 P), CDA will return the most restrictive status for the MUCR until all DUCRs are cleared. • If a MUCR tree exists partially in both systems, and a DUCR has been held on one system – on clearance, CDA will receive an EMR update from that system and will match it with the previous EMR from the other system before aggregating both responses and returning a single one. • The example below shows a MUCR consolidation – partially maintained in ILE (DUCR 1 and DUCR 2) and CHIEF (DUCR 3 and 4). DUCRs 1 and 3 were held on arrival of MUCR. DUCR 1 is subsequently cleared. Dependant on the Master Opt in the original movement message, ILE sends CDA an updated EMR and ERS. CDA recalls that part of the MUCR is maintained in CHIEF and will find the last EMR from CHIEF. CDA will aggregate the two EMRs and return a single response. MUCR A DUCR 1 DUCR 2 DUCR 3 CSP DUCR 1 DUCR 2 ILE MUCR A DUCR 3 DUCR 4 MUCR A DUCR 1 DUCR 2 DUCR 3 Official – Protective Marking CDA DUCR 4 CHIEF DUCR 4 15

Customs Declaration Service The ILE Dual Running Solution In More Detail • In the following slides we have tried to cover each type of SWD, as well as CSPs, and the various channels into CHIEF and CDS for declarations, consolidations and movements: • Existing Channels to CHIEF • New CDS Channels in Phase 1 • New CDS Channels in Phase 2 • Channels to CHIEF Phase 2 • Phase 1: ILE Dual Running Scenarios • Phase 2: ILE Dual Running Scenarios Official – Protective Marking 16

Customs Declaration Service Declarations, Consolidations and Movements Existing Channels to CHIEF Declaration and Consolidations Declarations, Consolidations and Movements Declarations, Consolidations and Movements 1. Traders direct route to CHIEF via EDCS 2. SWD route to CHIEF via EDCS 3. NES WEB route to CHIEF EDCS XML, email EDCS Gov. uk CSP 5. Route to CHIEF via HCI screen SWD 6. Route to CHIEF via CSP SWD NES WEB ICAB EDI CSP EDI Official – Protective Marking CHIEF CSP EDI SWD 4. Route to CHIEF via HCI screen 7. CSP route to CHIEF XML, email In-house software CHIEF 17

Customs Declaration Service Declarations, Consolidations and Movements New CDS Channels in Phase 1 Declarations, Consolidations and Movements 8. Route to CDS via CDS UI (restricted to selected traders only) XML Gov. uk CDS CHIEF CDS CHIEF Consolidations and Movements Passing Through CDS to CHIEF in Phase 1 Consolidations and Movements 9. Route to CDS via CSP (participating in Phase 1) 10. Route to CDS from CSP (participating in Phase 1) SWD EDI CSP XML CSP Declarations, Consolidations and Movements New CDS Channels in Phase 2 Declarations, Consolidations and Movements 11. Route to CDS via CSP Declaration and Consolidations 12. Traders direct route to CDS Declaration and Consolidations 13. SWD route to CDS SWD In-house software XML CSP XML SWD Official – Protective Marking XML 18

Customs Declaration Service Declarations, Consolidations and Movements Channels to CHIEF in Phase 2 Declaration with Consolidations (not EAC/CST) Declaration with Consolidations (not EAC /CST or movement messages) 1. Traders direct route to CHIEF via EDCS 2. SWD route to CHIEF via EDCS 3. NES WEB route to CHIEF XML, email In-house software EDCS XML, email 4. Route to CHIEF via HCI screen CSP Declaration with Consolidations (not EAC /CST or movement messages) 5. Route to CHIEF via HCI screen SWD EDCS Declarations, Consolidations and Movements 6. Route to CHIEF via CSP SWD Declarations, Consolidations and Movements 7. CSP route to CHIEF NES WEB ICAB EDI CSP ICAB CHIEF EDI Official – Protective Marking CHIEF CSP CHIEF EDI SWD Gov. uk EDI CHIEF 19

Customs Declaration Service Phase 1: ILE dual running scenarios • Declarations can be submitted to CHIEF. Declarations can also be submitted to CDS through the CDS UI or CDS API by migrated traders only. • For ILE dual running to run successfully, it is advisable that SWD (with multideclarants/consolidators) do not switch to CDS until Phase 2 has commenced. • In-house SWDs (with single declarant/consolidator) may choose to switch to CDS in Phase 1 • N. B. movements MUST be submitted via either CDS UI or a CSP that is participating in Phase 1 The following slides run through some Phase 1 scenarios: • Scenario A – CHIEF only consolidation • Scenario B – CDS only consolidation • Scenario C – CHIEF movement • Scenario D – CDS movement Official – Protective Marking 20

Customs Declaration Service Phase 1 Scenario A: CHIEF only consolidation Declarations Route to CHIEF via HCI screen CSP Route to CHIEF via CSP SWD Consolidations Route to CHIEF via CSP not participating in Phase 1 ICAB EDI CHIEF EDI CSP SWD CHIEF (not Participating in Phase 1) OR ILE EDI Route to CHIEF via CSP participating in Phase 1 CHIEF Kept in sync Message translator SWD XML Negative ILE query Query response CSP CDS CHIEF DUCR 1 CHIEF DUCR 2 CHIEF consolidation of DUCR 1 and 2 DMS CHIEF consolidation of DUCR 1 and 2 CDA Key CST EAC Official – Protective Marking 21

Customs Declaration Service Phase 1 Scenario B: CDS only consolidation (Exported through a non-inventory linked location) Declarations In-house software XML Gov. uk (MDTP) XML Direct API route to CDS In-house software XML CDS UI route to CDS Gov. uk (MDTP) XML Direct API route to CDS UI route to CDS CDS DUCR 1 and 2 CDS DUCR 3 and 4 CDS consolidation of DUCR 1 and 2 CDS consolidation of DUCR 3 and 4 Consolidations (EAC and CST) Official – Protective Marking 22

Customs Declaration Service Phase 1 Scenario C: CHIEF movement Route to CHIEF via CSP (not participating in Phase 1) DEP/ airline (loader) EDI CSP CHIEF MUCR/DUCR arrived and departed in CHIEF EDI (not participating in Phase 1) CSP EDI (loader) (not participating in Phase 1) OR SWD EDI Key Route to CHIEF via CSP (participating in Phase 1) Kept in sync ILE CDS Message translator CSP XML Negative ILE DUCR query response DMS DUCR Query CDA EAA/EAL/EDL MUCR OR EAA/EAL/EDL DUCR Kept in sync DEP (loader) ILE EDI Message translator CSP Loader XML Negative ILE DUCR query response DMS CDS DUCR Query XML Official – Protective Marking CHIEF CDA 23

Customs Declaration Service Phase 1 Scenario D: CDS movement (Exported through a non-inventory linked location) Movement Example 1 XML Gov. uk (MDTP) CDS UI route to CDS MUCR/DUCR arrived and departed in CDS CHIEF MUCR/DUCR arrived and departed in CDS Loader Movement Example 2 Kept in sync Route to CDS via CSP SWD Loader Key EDI ILE Message translator CSP DMS XML CDS CSP (loader) XML CDA EAA/EAL/EDL MUCR • N. B. where declaration and consolidations have been sent directly to CDS, movements MUST be submitted to CDS via either the CDS UI (MDTP) or a CSP that is participating in Phase 1 • If the movement is via a CSP, the CSP or SWD must be able to process a CDS response which will differ from a CHIEF response Official – Protective Marking 24

Customs Declaration Service Phase 2: ILE dual running scenarios • • Phase 2 will only commence when all CSPs are ready All CSPs will now be sending consolidation and movement messages to CDS only Declarations can be submitted to both CHIEF and CDS via the CSP CDA component within CDS will aggregate responses from CHIEF and DMS and return a single response Any errors arising from the processing of consolidation/movements will be returned in a single combined error response. NESWEB channels for declaration with consolidations (not EAC/CST) will remain open. Movements MUST be submitted to CDS (these must go through CDA) During Phase 2 SWDs can roll out their CDS software gradually The following slides run through some Phase 2 scenarios: • Scenario A – CHIEF only consolidation • Scenario B – CDS only consolidation • Scenario C – Movement of mixed consolidation Official – Protective Marking 25

Customs Declaration Service Phase 2 Scenario A: CHIEF only consolidation Declarations NES WEB route to CHIEF Gov. uk CHIEF EDI SWD EDI CSP CHIEF DUCR 1 CHIEF DUCR 2 Consolidations ILE Route to CHIEF via CSP (CCS-UK) Message translator SWD Negative ILE query response EDI Query CSP Kept in sync XML CDS DMS CHIEF consolidation of DUCR 1 and 2 CDA Key CST EAC Official – Protective Marking 26

Customs Declaration Service Phase 2 Scenario B: CDS only consolidation Declarations Route to CDS via CSP CDS UI route to CDS SWD XML CSP Gov. uk (MDTP) CDS XML CDS DUCR 1 CDS DUCR 2 Consolidations Kept in sync ILE Route to CDS via CSP Positive ILE query response XML Query CDS DMS CHIEF CDS consolidation of DUCR 1 and 2 CDA Key CST EAC Official – Protective Marking 27

Customs Declaration Service Phase 2 Scenario C: Movement of Mixed Consolidation Movement Example 1 MUCR A consolidated in both CHIEF (DUCR 1 and 2) and CDS (DUCR 3 and 4). Route to CDS (and CHIEF) via CSP ILE CSP Kept in sync DMS CDS CHIEF XML Key CDA EAA/EAL/EDL MUCR All DUCRs will be arrived and departed. CDA will send a single aggregated EMR to the CSP. EAA/EAL/EDL DUCR Movement Example 2 MUCR B consolidated in both CHIEF (DUCR 5 and 6) and CDS (DUCR 7 and 8). Route to CDS (and CHIEF) via CDS UI ILE Gov. uk (MDTP) Kept in sync CDS XML CDA Key DMS CHIEF All DUCRs will be arrived and departed. CDA will send a single aggregated EMR to the end user. EAL/EDL MUCR EAL/EDL DUCR Official – Protective Marking 28

Customs Declaration Service Relevant CDS Release Timelines • Release 3. 0 – Trade test drop date: 22 -Apr-2019 Live drop date: 09 -May-2019 • Supplementary declaration submission via API and UI : enabled for traders with specific export authorisations/licences • Tariff validation • Release 3. 1 – Trade test drop date: 23 -May-2019 (delivered) Live drop date: TBC • Frontier declarations submission via API • CDS ILE functionality (movements and consolidations) • CDS UI availability • Phase 1 Dual Running (R 3. 3) • Trade Test : 10 -June-2019 (delivered) – Upgrade to CSP-CDS interface (CHIEF stubbed) • Trade Test : August (TBC) – Testing with CHIEF enabled • Live Drop: TBC • Phase 2 Dual Running • Trade Test : Early Autumn 2019 • Live Drop : Date TBC – dependent upon all CSP migration. Official – Protective Marking 29

Customs Declaration Service To Summarise • • Limited/no additional development work for SWDs Flexible roll-out phases Limited disruption to supply chain Minimum business impact Next steps • Follow-up call to review any questions and actions. Official – Protective Marking 30