Streamlining Customs Boundaries in Europe: The Impact of NCTS

Shipping goods across Europe is much more than just buying a product online and waiting for it to arrive at your doorstep!

Trans-European Customs Systems

On March 15, the European Commission and Member State customs authorities initiated a significant transition for the trans-European customs systems for export and transit. This involved the deployment of the new UCC AES and UCC NCTS-Phase 5 IT systems in Germany, marking the beginning of a gradual deployment process across Europe until December 2023. These systems offer significant benefits, including services like Centralised Clearance and pre-lodgement facilities, AEO benefits, real-time trade notifications, and seamless cross-border online real-time interactions​​.

Bridging Customs Boundaries in Europe: The Power of NCTS

Have you ever wondered about the dynamics of shipping goods across Europe? Well, there’s much more to it than buying an item online and waiting for it to reach your doorstep! Shipping goods involves navigating complex customs systems, which can be a daunting task. However, thanks to the innovative NCTS, sending goods across Europe and its associated member countries is a breezy affair.

In the context of cases related to public finance, one system that stands out is the NCTS (New Computerized Transit System). This international system facilitates the sending of goods through Europe and associated member countries by transit. Essentially, it allows for the seamless movement of goods across multiple customs checkpoints in different countries. The system enables the exchange of necessary documentation and information, streamlining the transit process. Let’s explore how NCTS works and its implementation in Ukraine.

To utilize the NCTS, businesses need to access a portal where they can submit the relevant decorations for the goods they wish to transport. These decorations include the necessary documentation and information required for customs clearance. The submissions are then connected to a central database, which is accessible to customs officers via dedicated software. This system ensures a smooth flow of information between businesses and customs authorities, enabling efficient processing of transit goods.

What has already been done?

• New software has been deployed and successfully tested for compliance with DG TAXUD requirements (Conformance Testing).
• Updated the translation of the Convention, according to changes made in 2022, which concern the dataset of electronic transit declarations in NCTS Phase 5 (Annex IIIa to the Convention) and the extension of the Convention’s provisions to the territory of Ukraine – bit.ly/4482xN1.
• In January 2023, specifications were published for the software update for developers (bit.ly/3NwC9pk).
• In August 2023, developers of brokerage software were given access to the API for testing message exchange with NCTS Phase 5.

What are the indicators?

The document titled “Transition to the application of NCTS Phase 5”  dated November 27, 2023, provides a comprehensive overview of Ukraine’s implementation of NCTS Phase 4 from October 2022 to November 2023.
Key highlights include:

• Ukraine has completed over 28,000 movements as a country of departure, with top partner countries being Poland, Germany, Lithuania, Romania, Latvia, and the Czech Republic.
• As a destination country, Ukraine has seen over 6,000 completed movements with similar top partner countries.
• More than 34,000 declarations have been processed by customs, and over 2,000 guarantees registered, amounting to more than 200 million EUR.
• The support service has handled over 3,000 inquiries and provided 170 authorizations for transit simplifications to over 50 companies.
• The NCTS Phase 4 Management System registered more than 2,000 guarantees, including 30 general guarantees and over 2,000 individual guarantees, totaling over 92 million EUR and 132 million EUR, respectively.

What’s next?

NCTS Phase 5 represents the next stage in the development of the NCTS IT system compared to Phase 4. 

Ukraine is set to begin using NCTS Phase 5 by no later than May 1, 2024. After this transition, businesses will be required to submit transit declarations according to new rules in the updated transit system – NCTS Phase 5. In the coming years, further development of this system is anticipated, particularly the transition to NCTS Phase 6.

Conclusion

NCTS is one of 17 customs IT systems that Ukraine needs to implement for accession to the EU, and so far, it’s the only one that has been implemented by Ukraine. The introduction of this IT system involves not just its installation, but also its synchronous development along with other countries participating in the Convention.

The implementation of the NCTS system in Ukraine has greatly improved the efficiency of customs procedures and facilitates the smooth transit of goods across different countries.

Happy trading!

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