Electronic Customs Coordination Group Item 16 Reporting from the PG analysing the implementation feasibility of Obj 1&2 of the RM Strategy Brussels, 3 December 2014 03/12/2014

1. Context =>Working document TAXUD(2014)2233525 EU Risk Management Strategy Multiple filing inscribed in the UCC Joint meetings ECCG/CCC-RM/CCC-FOR/CCC-DIH on 1/07/2014 and of meeting of TCG on 3/07/2014 =>Working document TAXUD(2014)2233525 03/12/2014

1. Context CPG meeting May & July 2014 => Need for further implementation (feasibility) analysis of approach [1-]2-3 linked to Obj 1&2 of the RM Strategy => Supported by a new Project Group Call for interest to CPG in July 2014 PG Kick-off on 11 September 2014 1. Context 03/12/2014

2. Mandate & role of the PG Objective: Prepare a comprehensive analysis for the CPG Meeting of December 2014 to examine the feasibility of the implementation in terms of processes and requirements, organisational, technological, financial,… 03/12/2014

"PG supporting the analysis of the implementation feasibility for objectives 1 &2 of the Risk Management Strategy" Working arrangements Number of planned events Plenary meetings + subgroup meetings (risk managament/customs business processes/IT) Use of PICS for e-collaborative edition of document From September till November 2014 Number and Profile of participants Final composition: 25 experts from 13 MS Trade invited on ad hoc basis 03/12/2014

3. Meetings 11/09/2014 1st Plenary + 12/09 RM Subgroup 24-25/09/2014 Subgroups 8-9/10/2014 2nd Plenary + Subgroups 29-30/10/2014 Subgroups + TCG half day 19/11/2014 3rd Plenary 03/12/2014

4. Activities Requirements definition (chapter 3) Risk Management Requirements defined Definition of e-screening Definition of ENS+ lifecycle Functional Requirements defined + what is a new requirement + merger key per transport mode Non functional Requirements defined 03/12/2014

ENS+ Lifecycle ENS+ Lifecycle – Key assumptions The “ENS+ lifecycle” is a term for easy reference to the complex entry process starting with an EO submitting a complete or a partial ENS to Customs; then customs receiving, validating, processing, making the submitted data (ENS or partial ENS) available to other relevant Member States, performing collaboratively security and safety risk management, making available all the data that is being added to the (partial/complete) ENS such as risk results, decisions, control results, etc; and closing the process with customs indicating a final state variable to the actual case of the transaction and potential controls performed. ENS+ Lifecycle – Key assumptions Actors for sending ENS fragments are identified per mode of transport; Keys for the merge of fragments are identified and all the actors holds them; Merge of fragments will be based on that common key. 03/12/2014

Approaches and options confirmed and completed from an IT perspective Architecture definition (chapter 4) Functional blocks identified to build IT landscape SWOT analysis (volumetrics, roles, efficiency, effectiveness, etc) 03/12/2014

Solution architecture options 3 Approches – 6 options 03/12/2014

How we did it? Six IT implementation options Refinement 03/12/2014 CBA: 3 approaches Business and functional requirements + Volumetric Functional Architecture (what we need to do?) Application Architectures (how it will work?) Technological Solutions (what technology can do that?) Refinement Costs Planning Six IT implementation + SWOT Analysis options 03/12/2014

3 Approaches Approach 1: Peer-to-peer networking Approach 2: Common repository for ENS+ lifecycle support Approach 3: Adding a harmonised interface for trade 03/12/2014

Illustrative example of ENS Lifecycle reception/validation e-screening risk analysis reception/validation Make available merge RA - results arrival - status presentation - status control - results 03/12/2014

Functional blocks 03/12/2014

Expected ENS per year in million 326.9 millions of ENS parts are expected from trade per year Expected ENS per year in million Master Partial Postal   6,2 123,2 129,4 Air Cargo 3,4 47,6 51 Express 29 58 Maritime 14,5 72,5 87 Road 1 Rail 0,5 Total 326,9 03/12/2014

Approach 1 – 2 options Approach 1 – Option A: IT trader interfaces are to be operated by each and every MS. The MS architecture is fully decentralised without common IT components except CCN/CCN2 in order to streamline the exchange of data; Approach 1 – Option B: a technically optimised version of Approach 1 – Option A. It introduces a central referential index that would help to find the required information at the right place; 03/12/2014

Approach 1 – Option A 03/12/2014

Functional IT Architecture – A1A 03/12/2014

Approach 1 – Option B 03/12/2014

Functional IT Architecture – A1B 03/12/2014

Approach 2 – 1 option IT trader interfaces are to be operated by each and every MS. The ENS parts are filed and merged in a common place; they are available from there to all MS. A common repository containing complete ENS data provides the possibility of an effective and efficient implementation of different services such as ENS+ lifecycle services, Risk Management collaboration services and e-screening services. These services are consequently made available to all MS; 03/12/2014

Approach 2 03/12/2014

Functional IT Architecture – A2 03/12/2014

3 Options for Approach 3 Option A: Filing to a selected office Following legal rules, the EO file to a customs office which subsequently pushes data to the responsible customs office of entry. Option B: Harmonised national interfaces The EO has to address the MS trader interface in function of the FCOE or the presumed one. Option C: Central Trader Interface This option provides a central unique IT trader interface. 03/12/2014

Approach 3 - Option A: Filing to one MS An Economic Operator can lodge an ENS submission to any FCOE in the EU via the IT trader interface of the MS to which it is connected to following an assignment protocol; The receiving IT trader interface will route the messages to the FCOE or the presumed one. 03/12/2014

Approach 3 – Option A 03/12/2014

Functional IT Architecture – A3A 03/12/2014

Approach 3 - Option B: Harmonised national interfaces The offered IT trader interfaces across all MS are fully harmonised from business, semantic and IT technical viewpoint; The Economic Operator has to address the IT trader interface of the MS in function of the FCOE or the presumed one. 03/12/2014

Approach 3 – Option B 03/12/2014

Functional IT Architecture – A3B 03/12/2014

Approach 3 - Option C: Central Trader Interface This option provides a shared unique IT implementation of the trader interface. One single gateway for the IT communications between traders and customs. 03/12/2014

Approach 3 – Option C 03/12/2014

Functional IT Architecture – A3C 03/12/2014

Estimated costs 03/12/2014

While EU COM costs raise, MS costs significantly drop as of A2 and A3-C 03/12/2014

Costs by approaches MS vs COMM 03/12/2014

Recommendations to CPG CPG endorsement requested for Approach 2 and set up a Common Repository for mandatory use by all Member States. as an "add-on" to the Common Repository, the possibility of collaboration among interested Member States with the support of the Commission to be applied for the development, implementation and operation of a Shared Trader Interface. as an “add on” to the Common Repository, the introduction of a shared functionality for e-screening. 03/12/2014

Options 3 1 2 Trader Interface National National Shared Shared e-screening National Shared Shared National National Risk Analysis National Risk Analysis National Risk Analysis National Risk Analysis National e-screening National e-screening 3 Shared e-screening Common Repository & Services (mandatory) 1 National Trader Interface National Trader Interface Shared Trader Interface 2 Trader Trader Trader Trader 03/12/2014

Operational responsabilities remain with MS. The Common Repository will be a commonly shared service developed and technically operated by the Commission on the basis of commonly agreed business rules and IT compliance defined in close cooperation with the Member States. Operational responsabilities remain with MS. 03/12/2014

Recommendations to CPG Legal implications Concerning the ENS+ lifecycle Concerning the implementation of the recommended option Concerning data protection and data security Statements on Resource and Critical dependencies 03/12/2014

Way forward Business Case & Vision document GO/NO GO decision CPG: GO/NO GO decision System Specifications ready GO/NO GO decision Solution operational (first release) Solution developed 2014 2015 2016 Project coordination (EU Commission in the lead) Common repository & services (EU Commission in the lead) Preparation of CPG document Inception Phase Elaboration Phase Construction Phase Transition Phase e-screening (“Opt-in Member States” leading committees) Shared trader interface (“Opt-in Member States” leading committees) 03/12/2014

Thank you ! 03/12/2014

Annex slides In Case of… 03/12/2014

ENS+ Lifecycle ENS+ Lifecycle – Key assumptions The “ENS+ lifecycle” is a term for easy reference to the complex entry process starting with an EO submitting a complete or a partial ENS to Customs; then customs receiving, validating, processing, making the submitted data (ENS or partial ENS) available to other relevant Member States, performing collaboratively security and safety risk management, making available all the data that is being added to the (partial/complete) ENS such as risk results, decisions, control results, etc; and closing the process with customs indicating a final state variable to the actual case of the transaction and potential controls performed. ENS+ Lifecycle – Key assumptions Actors for sending ENS fragments are identified per mode of transport; Keys for the merge of fragments are identified and all the actors holds them; Merge of fragments will be based on that common key. 03/12/2014

Illustrative example of ENS Lifecycle reception/validation e-screening risk analysis reception/validation Make available merge RA - results arrival - status presentation - status control - results 03/12/2014