ICS2 phase two explained: What it is and how to stay compliant

Cross-border ecommerce is more popular than ever, especially in the European Union (EU). Goods imported to the EU account for 15% of the world’s trade! Recognizing the high volume, the European Union has taken steps to increase visibility and ensure the safety of those handling imported goods by upgrading security protocols.

This upgrade is called Import Control System 2 (ICS2), and it requires carriers transporting packages into or through the EU to provide data via ICS2 on the goods being imported prior to arrival. ICS2 is split into three phases (also called “releases”); the first phase rolled out in 2021, and preparations are underway for phase two, which will take effect in March of 2023.

What happens in phase two of ICS2?

From March 1, 2023, all air carriers, freight forwarders, express courier services, and postal operators transporting goods to or through the European Union by air must digitally submit advance cargo information to the EU's new customs pre-arrival security and safety program, Import Control System 2- Second Release, before the shipment’s arrival into the EU. For an in-depth look at ICS2 and its phases, take a look at our ICS2 guide.

Though air carriers, postal operators, and express couriers are held legally responsible for fulfilling ICS2 data requirements, retailers sending packages into the EU can also take steps to prevent shipment delays. Keep reading to learn how all parties can stay compliant and help shipments flow smoothly under ICS2 release two.

This blog will cover the following:

The ideal data flow of ICS2 phase two
How affected parties can prepare for phase two of ICS2
Impact on carriers
Impact on retailers

The ideal data flow of ICS2 phase two

The following is the ideal flow of ecommerce shipment information passing as data from retailer to carrier to customs for ICS2 phase two. However, there will be times when the appropriate data is not available. Read below for information about the ramifications of missing shipment details and some options for automating systems to obtain and submit the required data.

The retailer prepares an EU-bound shipment with detailed information about its contents on the clearance documentation (commercial invoice, CN22, CN23, etc.), including detailed product descriptions and HS codes. (How can I get HS codes?)
The carrier receives the shipment along with its electronically filed shipment details and forms.
- Freight forwarders will either need to submit shipment data to ICS2 or pass it along to the air carrier with the package.
Air carriers will confirm that they have all the information needed for the shipment or that the data was already submitted to ICS2. If the carrier does not have sufficient information to satisfy ICS2 requirements, the package will likely be delayed, and the carrier may:
- Reach out to the retailer for package content information.
- Perform an audit on the shipment, which usually involves opening the packages so they can assign descriptions and HS codes themselves. This may cause problems for the retailer (see below).
Once all of the appropriate information is obtained, the air carrier electronically submits the package data to the Member State’s customs authority via the ICS2 system in two steps:
- Pre-loading advance cargo information (PLACI): Submitted before the cargo is loaded
- Entry Summary Declaration (ENS): Submitted before flight departure if the flight is shorter than four hours or four hours before arrival in the EU if the flight exceeds four hours
The Member State’s customs authority may send messages back to the carrier via ICS2 requesting one of the following actions regarding the shipment:
- Request for Information (RfI): This means the ENS has insufficient information and needs to be amended.
- Request for Screening (RfS): This means the carrier must screen the cargo according to high-risk cargo or mail standards. They must communicate the screening results back to ICS2.
- Do Not Load (DNL): This means the shipment has been flagged as a threat, and the carrier must take immediate steps that follow aviation security protocols to stop the threat.

How can affected parties prepare for release two of ICS2?

Air carriers, freight forwarders, express courier services, and postal operators:

The carriers and freight forwarders are held responsible by the EU to comply with ICS2 regulations.

-Carriers and logistics providers must use the European Commission’s conformance testing environment (available until February 2023) to test their integration with ICS2. They will need to verify their ability to send shipment data and receive message responses from the customs authorities in preparation for the March 2023 phase two release date.

Carriers must file a PLACI and ENS for each shipment via ICS2.
If retailers do not provide HS codes with their shipments, the carrier or logistics provider must assign them; having a quick and accurate way to classify products will help carriers avoid delays.

Retailers and senders:

Although the legal responsibility to provide shipment data for ICS2 lies with the carriers, some carriers may require retailers to provide them with accurate information to send the package. Even if the carrier does not require this, retailers should still take the steps below to minimize shipment delays and avoid the need for carriers to classify their products which could result in products being misclassified and the landed cost of their shipments being altered.
Retailers should prepare clearance documentation for their EU-bound shipments with detailed information about the goods contained in the shipment, including thorough product descriptions and HS codes.
Providing this information will help ensure there will be no confusion or need for additional information from the carrier. Therefore, following ICS2 guidelines about good descriptions and being aware of the information screened under ICS2 can help prevent delayed shipments.
Retailers are recommended to provide accurate HS codes for all goods in their shipments.
If retailers don't supply carriers with HS code(s) for their shipments, the carrier will have to classify the goods. Because carriers don’t know the products as well as the retailer, they may unintentionally use incorrect HS codes, which can result in higher-than-accurate duty rates being assigned to shipments, altering the landed cost. This is especially problematic if the retailer pre-collects duty and tax or ships with prepaid duties and taxes (DDP- Delivered Duty Paid). Additionally, carriers taking time to audit packages and assign HS codes will delay delivery.
For business-to-business (B2B) shipments, retailers should make sure the recipient business' Economic Operators Registration and Identification (EORI) number is on the commercial invoice.

Impact on retailers and senders:

Although the legal responsibility to provide shipment data for ICS2 lies with the carriers, some carriers may require retailers to provide them with accurate information to send the package. Even if the carrier does not require this, retailers should still take the steps below to minimize shipment delays and avoid the need for carriers to classify their products which could result in products being misclassified and the landed cost of their shipments being altered:

Retailers should prepare clearance documentation for their EU-bound shipments with detailed information about the goods contained in the shipment, including thorough product descriptions and HS codes.
- Providing this information will help ensure there will be no confusion or need for additional information from the carrier. Therefore, following ICS2 guidelines about good descriptions and being aware of the information screened under ICS2 can help prevent delayed shipments.
Retailers are recommended to provide accurate HS codes for all goods in their shipments.
- If retailers don't supply carriers with HS code(s) for their shipments, the carrier will have to classify the goods. Because carriers don’t know the products as well as the retailer, they may unintentionally use incorrect HS codes, which can result in higher-than-accurate duty rates being assigned to shipments, altering the landed cost. This is especially problematic if the retailer pre-collects duty and tax or ships with prepaid duties and taxes (DDP- Delivered Duty Paid). Additionally, carriers taking time to audit packages and assign HS codes will delay delivery.
For business-to-business (B2B) shipments, retailers should make sure the recipient business' Economic Operators Registration and Identification (EORI) number is on the commercial invoice.