business processes are harmonised with the needs of industry and government. In short, we have recognised the need to re-engineer the cargo management system, and not simply convert our current business systems to operate on new technology. We have also determined that our business systems must be built upon sound risk management principles.

The Cargo Management Re-engineering (CMR) Project is the result of nearly a decade of work led by the ACS and involving associated Permit Issuing Agencies (PIA), such as the Australian Quarantine and Inspection Service (AQIS).

The CMR project was implemented in two broad stages. In the first stage, the export side of customs related border control functions was switched to the new system on 6 October 2004. This was an apparently smooth transaction. Even though significant business process changes had to be implemented to meet the new cargo reporting requirements, consistent with changes to legislation, little disruption was reported by industry. In the second stage, the import side of customs related border control functions was switched over to the new system on 12 October 2005. In contrast to exports, the switch on imports has initially proven to be contentious over a number of issues, some of which are beyond the scope of this discussion.
This paper focuses firstly on aspects of the new business process requirements caused by the CMR import system, concentrating on the compliance aspects that traders are now facing. The inability of the ACS to implement a smooth transition has left a number of businesses and service providers with serious problems. The new requirements also demand fundamental business process changes in the area of Self-Assessed Clearance (SAC) declarations that never existed before.
Secondly, the impact of the import CMR system in terms of its effect on business continuity and its financial implications is considered. As the discussion focuses on contemporary issues, reliance is made on current resource material.

2.BACKGROUND:  The ACS Philosophy and the Kyoto Convention

The ACS has been very open about the introduction of its new systems and the ramifications of legislative changes that began as a result of the Customs Legislation Amendment and Repeal (International Trade Modernisation) Act 2001 (Cth) (TML).

The Customs Compliance Continuum (CCC) released by the ACS in April 2001², and shown in Figure 1, provides a good snapshot of the basic philosophical approach adopted by this regulator in discharging its obligations. The CCC shows that the ACS adopts a risk management approach to intervention and control resulting in its own operational responses according to individual circumstances.

The CCC and the TML changes broadly match the thrust of the Revised Kyoto Convention³, particularly as this relates to risk assessment and electronic transmission of data for border control activities. Chapter 7 of the Kyoto Convention supports the introduction of electronic systems as alternatives to paper-based documents, but it does so on the proviso that according to 7.3:
The introduction of information technology shall be carried out in consultation with all relevant parties directly affected, to the greatest extent possible.

Figure 1: Customs Compliance Continuum