Since the onset of globalisation, security and efficiency have become the strategic epicentre of international trade. In this regard, economic communities across the globe are constantly striving to make this process, which involves hundreds of thousands of companies, more agile than ever before.
The European Union has taken a significant step in this direction with the implementation of the Import Control System 2 (ICS2). This innovative, data-driven system is designed to strengthen customs security and facilitate the free flow of goods, offering a number of benefits to the supply chain.
However, since its introduction, ICS2 has entailed a number of changes in customs and logistics processes, affecting a wide range of actors involved in trade with the EU.
What is ICS2?
The Import Control System 2 (ICS2) is an advance cargo information platform developed by EU customs. Its main objective is to collect detailed data on all goods entering the EU territory prior to their arrival.
This information enables customs authorities to assess potential risks and to ensure the safety and security of EU citizens.
ICS2 represents a significant evolution in customs processes by incorporating advanced technologies and a data-driven approach. With this system, authorities can more effectively identify and manage high-risk shipments, ensuring that dangerous or illegal goods are intercepted before they can cause harm.
The ICS2 phases
The implementation of ICS2 has been carried out in three distinct phases, each expanding the scope and requirements of the system. The first phase started on 15 March 2021, focusing on air express operators and postal services, who were required to start providing advance cargo data.
The second phase, which started on 1 March 2023, extended the requirements to air carriers in general. Finally, the third phase, which entered into force on 1 March 2024, covers all remaining economic operators, including those in maritime transport - effective from June 2024 -, rail and road - applicable from 2025 -.
Each phase has required progressive adaptation by companies to meet the new requirements of the system.
Who is affected by this change?
ICS2 directly affects a wide range of actors in the supply chain. Since its inception, all economic operators involved in the handling, forwarding and transport of goods and express and postal consignments have had to adapt to the new data requirements. This includes express operators, air carriers, freight forwarders, consolidators and postal services.
Indirectly, ICS2 also impacts logistics and transport companies (sea, rail and road), final consignees in the EU, and manufacturers and exporters outside the EU. These actors must provide the necessary information to directly affected parties to ensure a smooth flow of trade.
What impact will it have on the supply chain?
ICS2 has brought a higher level of transparency and control in the supply chain.
Customs authorities now have a more detailed and timely view of shipments, which improves the ability to identify and mitigate risks before goods arrive in the EU. This increased visibility helps to reduce the risk of illicit activities and to ensure that dangerous goods are stopped in time.
On the other hand, the implementation of ICS2 has also presented operational challenges for companies. The need to provide accurate and high quality data has forced many organisations to invest in upgraded IT systems and employee training. However, those companies that have made these adaptations have been able to benefit from faster and more efficient clearance of their goods.
These are the advantages of ICS2
One of the main benefits of ICS2 is the enhanced security for EU citizens and the EU internal market. By enabling more accurate risk assessment, customs authorities can intercept dangerous consignments before they enter the market, protecting both individuals and businesses in the EU.
In addition, ICS2 facilitates legitimate trade by simplifying customs processes and improve operational efficiency. Economic operators that comply with the system's requirements experience fewer disruptions and faster clearance of their goods, which can translate into a significant competitive advantage in the international marketplace.
These are the challenges of ICS2
Despite its many advantages, the implementation of ICS2 has also posed significant challenges. Companies have had to adapt their internal processes to ensure the provision of accurate and high quality data, which has required investments in technology and training. Upgrading IT systems and continuous staff training are essential to meet ICS2 requirements.
Lack of adequate preparation can result in serious consequences, such as detention of shipments at EU customs, rejection of deficient declarations and possible penalties for non-compliance. It is therefore crucial that all parties involved take the time to understand and comply with the requirements of ICS2, thus ensuring a smooth flow of trade.
Overall, while adapting to this new system may present challenges, the benefits in terms of security and facilitation of legitimate trade are significant. Companies that prepare adequately will undoubtedly be able to minimise disruptions and take advantage of the opportunities that ICS2 offers.
