In June 2005 the World Customs Organisation (WCO) council adopted the SAFE Framework. This is a globally agreed set of standards to secure and facilitate global trade that acts as a deterrent to international terrorism, secures revenue collections and promotes trade facilitation worldwide. The facilitation of trade has been highlighted by many industry analysts as one of the key benefits as the framework provides a much higher level of visibility into activities across a global supply chain.
Many countries have introduced their own variant of the SAFE framework, in the European Union, the European Summary Declaration (ENS) was introduced by the 27 member countries for all modes of transport. Mexico, Australia and Brazil have their own rules in place to support the framework and China is currently working on their own version of the rule. North America was one of the first to implement the ruling, partly to help minimise terror related activities and in early 2010 it extended the rule by introducing the ‘10+2’ compliance initiative.
Under the 10+2 compliance ruling, before merchandise arrives in the United States, importers, customs brokers or freight forwarders must submit certain information, 10 data elements, namely the first eight no later than 24 hours before the cargo is loaded on its U.S bound vessel and then submit the last two no later than 24 hours prior to the ship’s arrival at a U.S port. Logistics Carriers must also submit two pieces of information, hence the name 10+2.
In March 2014, Japan will become the latest country to adopt the SAFE Framework with the introduction of their Advanced Filing Requirement (AFR). The AFR goes into effect on 1st March 2014 and the penalty phase will apply ten days later on 10th March 2014. The Japan AFR requires all logistics companies to submit electronic shipping details 24 hours prior to the vessel’s departure for all Bill of Lading covering any goods that are intended to land in Japan. Japan will be getting tough on companies that do not submit information electronically with a potential $5,000 fine or a year in jail. A more serious option could be the Japanese Customs Agency refusing to issue a permit to discharge the cargo.
To ensure compliance many companies have been collaborating with Nippon Automated Cargo and Port Consolidated System (NACCS), the private sector IT division of Japan Customs. NACCS has been working tirelessly over the past 12 months to try and educate the market on what is required to be sent to Japan Customs ahead of the shipment leaving its port of origin. NACCS requires nearly thirty pieces of information to be submitted and the exact data fields required can be found here.
The introduction of the WCO SAFE Framework has helped global customs and border control agencies to significantly improve the way in which they process inbound shipments and remove significant paperwork from their processes. It has also allowed Customs to modernise their IT infrastructures to support global carriers in a more efficient way. Improved visibility of information relating to inbound shipments has not only helped to minimise terror related activities but has also contributed towards a reduction in the amount of counterfeit goods or parts entering today’s global supply chains.
As with other countries, Japan has decided that information to support AFR should be sent electronically via EDI, which is the global ‘language’ of today’s B2B activities across trading partner communities. Businesses today face an increasing amount of regulatory compliance and EDI adoption is helping companies adhere to these new regulations and ensure that the wheels of global trade continue turning.