What is ECS (Export Control System) Phase 1?

ECS Phase 1 is an IT system, that was introduced on 7th December 2007 throughout the EU for the control of indirect exports - i.e. goods that are exported from one Member State (Office of Export) but that are exiting the Community via another Member State (Office of Exit). An example of an indirect export is where goods leave Dublin, are flown to Paris and then onwards to the United States. In this scenario, Ireland is the country of export with Dublin Airport being the Office of Export and France is the country of exit with Charles De Gaulle Airport in Paris being the Office of Exit. Irish and French customs communicate electronically with each other in relation to this indirect export via ECS Phase 1.

How does ECS Phase 1 work?

Customs Authorities in the Member State of export and the Member State of exit will communicate electronically with each other. Specifically electronic messages confirming exit of the goods from the Community will be sent between the Customs Office of Exit and the Customs Office of Export. Proof of exit of the goods from the Community is primarily required in order to ensure that goods, which have been zero-rated for VAT purposes on the basis that they are being exported outside of the Community, are not in fact subsequently diverted and sold within the Community.

What are the benefits of ECS Phase 1?

ECS Phase 1 also allows the trader (or whoever is acting on his behalf) to interact electronically with Customs at both the Offices of Export and Exit to confirm exit of the goods. ECS Phase 1 can be used as an alternative to the 'paper' system whereby the trader has to present the goods to the Office of Exit and have a paper SAD Copy 3 stamped by that Office.

All traders who are involved in indirect exports can opt into the new system. This will avoid the need for the stamping of the paper SAD Copy 3 at the point of exit from the Community. In order to opt into ECS Phase 1, traders will require some limited changes to their existing AEP software.

It should be noted, however, that the system is not mandatory for indirect exports until 1 July 2009. Whilst traders with indirect exports are encouraged to avail of the new electronic system, they can continue to use the paper based SAD Copy 3 for such exports until 1 July 2009.

What is ECS phase 2?

Customs Authorities in the Member State of export and the Member State of exit will communicate electronically with each other. Specifically electronic messages confirming exit of the goods from the Community will be sent between the Customs Office of Exit and the Customs Office of Export. Proof of exit of the goods from the Community is primarily required in order to ensure that goods, which have been zero-rated for VAT purposes on the basis that they are being exported outside of the Community, are not in fact subsequently diverted and sold within the Community.

What impact will ECS phase 2 have on me as a trader?

Under ECS phase 2 traders are required to lodge export declarations, containing additional information known as pre-departure or Exit Summary Declaration data, sufficiently in advance of departure to allow for risk analysis and controls to be carried out where necessary.

The Exit Summary Declaration is submitted together with a SAD as a combined declaration for 99% of exports and the declaration must be lodged electronically.

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