PROJECT UPDATE
Automatic Entry Processing (AEP)
reform
1
Project update – AEP Reform
July 2016
Purpose
The purpose of this paper is to provide an update on the Automatic Entry
Processing (AEP) reform project and details of the proposed process
improvements identified for AEP.
Background
Regulatory reform is one of the Department of Agriculture and Water Resources’
key priorities. The reform of the Automatic Entry Processing for Commodities
(AEPCOMM) Approved Arrangement (AA) provides a major opportunity for the
department in this arena. In 2014 the Compliance Division started investigating
the reform of the AA to improve the efficiency and effectiveness of existing
arrangements. As a result of this investigation the AEP Reform Project was
initiated by the Compliance Assessment and Management (CAM) section and was
approved in September 2015. This project provides key benefits for both the
department and industry, and is considered a priority by both parties.
Identified Issues
Of the issues recognised as limiting the uptake and expansion of AEPCOMM,
three primary issues were identified:



The low number of commodities and types of entries currently available
to be processed through AEPCOMM
The complexity of commodity pathways outlined in the Class 19.2
Requirements document (Previously Processes and Outcome Document)
Management of non-compliance.
To address these issues, the project team have identified a number of process
improvements which are aimed to increase the current uptake of AEP and the
overall volume of entries processed. Currently 50% of all entries referred to the
department could be processed through AEP however only 16% are. The
following diagram provides an overview of the new AEP model, with details of
the changes provided in the text below.
2
Project update – AEP Reform
July 2016
The New AEP Model
Basic overview of the new AEP model
Commodity Expansion
The scoping and inclusion of commodities is being conducted over two phases.
Phase 1
Commodities which can be easily included on the AA. The
inclusion of these commodities would require no significant IT
or policy changes. The project team has identified some
potential commodities for phase 1 and is currently consulting
with the commodity sections to gain approval for their inclusion
onto AEP. Once this work is finalised an information paper
detailing the changes for phase 1 will be distributed to industry
stakeholders.
Phase 2
Commodities which will require some further discussions with
technical and IT areas to determine changes required to various
systems. These changes may include the ability to process
multiple outcome entries. This paper focuses primarily on
changes identified for phase 2 which will enable further
commodities to be added to the arrangement.
AIMS enhancement and Phase 2 commodity expansion update
For the second phase CAM has approval and funding to progress an Agriculture
Import Management System (AIMS) enhancement to improve system capabilities
for AEP lodgement. This enhancement will aim to reduce some of the current
restrictions on AEP lodgements such as the ability to process multiple
3
Project update – AEP Reform
July 2016
commodities on the one entry. Greater system capabilities will enable more
commodities to be added to the AA with minimal effort. CAM are working with a
business analyst on this and other process improvements for AEP.
The current model for processing AEP lodgements is highly complex and
technically difficult to maintain. The model is based on individual commodities
and provides various outcomes for each commodity. This is further complicated
by overlaying non commodity concerns and providing all possible outcomes for
managing non commodity and commodity concerns. Data demonstrates that
although there are up to 48 different outcomes, only a small number of outcomes
are used in high volume. Under the current model, an AEP code can lead to
different outcomes (for example, code ‘D’ results in a consignment being released
or inspected) depending on the tariff. Under the new model the ‘codes’ are
designed to be intuitive and they result in the same outcome when combined
with different tariffs. This means that the direction applied to the entry is
determined by the accredited person rather than a code. It reduces the margin
for error in selecting the wrong code and makes the system simpler to use.
For this reason the new AEP model will focus mainly on outcomes that are
commonly used. This will restrict the number of scenarios where AEP can be
used (particularly combined non commodity and commodity outcomes)
however, it will reduce the complexity of the system and allow more
commodities with predictable outcomes to be processed through AEP. AIMS Data
demonstrates that brokers are more likely to use combined AEPCOMM and NCCC
codes when the commodity can be released under AEPCOMM rather than
requiring inspection or treatment. The below table provides AIMS data from
2015/16 on AEP entries where a combined code was used.
Table 1 AIMS data for combined AEP codes
Type of AEP code entered
Total entries of containerised cargo
Commodity code D for release on
documentation. No non-commodity
code entered.
53243
Code D for release combined with a
non-commodity code (e.g. RPTD=
rural tailgate, commodity release on
documents).
797 (98% were for rural concerns)
A commodity code for onshore
intervention (e.g. ND for
inspection).No non-commodity code
entered
2444
a code for onshore intervention
combined with a non-commodity
code(e.g. NPNTND= Inspection for
commodity and non-commodity
266 (88% packing/timber treatment
concerns)
Project update – AEP Reform
July 2016
4
concerns)
Note: the data excludes AEPCOMM entries for coffee, rice and onions and shallots.
The data shows that less than 2% of entries processed for containerised sea
freight are processed using a combined commodity and non-commodity code. Of
the combined codes that are used, 74% are to address rural concern when the
commodity was assigned a release code. This option will still be available under
the new AEP model.
One of the new features will be the ability for AEP entries to be processed at the
line level rather than the entry level as per the current model. Under the current
AEP model the same code/outcome must be applied to all active lines and the
same code/outcome cannot be applied to tariffs which are in a different
commodity group. For example an entry with plywood sheeting tariffs and
manufactured wooden articles tariffs cannot currently be processed through AEP
even though they may have the same outcome of release on documents.
Enhancements to the current model include line level processing, this means that
rules will be outcome based rather than commodity based and commodities with
the same outcomes such as plywood sheeting and manufactured wooden articles
can be automatically applied release directions through AEP on the same entry.
Additionally, different directions can be automatically applied to different lines.
For example, in an entry that contains 3 lines, line 1 may be able to be released
while line 2 and 3 may be ordered for inspection.
The model that is currently under consideration combines outcomes for
AEPCOMM and the NCCC.
The following outcomes will be available to manage commodity concerns:
 Release on Documentation
 Inspect (includes all cargo types)
The following outcomes will be available to manage the non-commodity
concerns:
 Rural tailgate
 Tailgate
 Inspection
 Fumigation (untreated timber packing)
 Disposal (untreated timber packing)
Note: Business rules will be incorporated so that non-commodity outcomes will
be available when a commodity is released on documentation or is not subject to
biosecurity. Entries that do not fall within the scope of these outcomes will be
out of scope for the AA and will require assessment by the department.
To provide maximum benefit to industry in utilising this arrangement the project
team will work with technical sections to add high volume commodities that are
assigned predictable outcomes after a document assessment such as inspection
or release.
5
Project update – AEP Reform
July 2016
Under this model the fumigation pathways will still be available to fumigate
untreated timber packaging however, there will be no available treatment
outcomes to deal with commodity related concerns. Commodities that require
onshore treatment will need to be processed by the Assessment Services Group
(ASG) rather than through AEP. Currently the only commodity that has an
available AEP outcome for treatment is the manufactured wooden articles group.
Data from 2015-16 shows that only 103 entries where processed using the AEP
code XDA which assigns a fumigation directions for manufactured wooden
articles.
To help clients identify approved AEP pathways, the project team have
investigated opportunities to incorporate AEP information into BICON to
support the use of AEPCOMM. BICON provides clients with a tool to determine
outcomes based on available documentation. AEP for commodities will remain
optional to allow industry to submit documentation to the department for
assessment if they are unsure of the correct outcome.
AEP/BICON Concept
As outlined above, the project team are currently in discussions with the Import
Conditions and Permits (ICOP) taskforce to plan how BICON can support clients
using AEP now and into the future. The objective of utilising BICON for the
AEPCOMM AA is to improve client experience and uptake of the arrangement by
simplifying identification of approved AEP pathways and relevant AEP codes.
As part of the phase 1 commodity expansion the project team are aiming to have
AEP codes included in the BICON onshore outcomes for applicable commodity
pathways. This information will provide greater support to industry participants
using AEP. Further enhancement to BICON may also be progressed to support
phase 2 expansion of commodities. Some of the proposed features includes:



providing specific AEP onshore assessment questions
including a permit validation check function
providing a 3rd tier of access for AEP participants which is similar to what
officer use when performing an onshore assessment.
Further information on this will be provided as the project progresses.
Audit and Sanctions Policy
The project team are currently reviewing the audit and sanctions policy and are
aiming to implement a modern auditing system that aligns with Service Delivery
Modernisation initiatives by the department. As part of the reform the project
team have identified four key principals that Audit and Sanctions policy should
address:
 Simplicity
 Proportional response
 Ensuring due process
 Informed compliance
6
Project update – AEP Reform
July 2016
A revised audit regime will include a combination of import declaration referrals,
post entry audits and on site audits. The audit regime will be supported by a new
requirement for all documentation associated with AEP entries to be lodged to
the department through the Cargo Online Lodgement System (COLS). Some of
the features proposed for the new audit regime include:
 Changed import declaration referral rules. As per the current regime
Import declaration referrals will be used to monitor compliance however,
a different model will be used. Rather than starting on a low rate of
referral which increases with incidents of non-conformities the new
model will initially refer at a higher rate and then reduce to a low base
level(<3%) of referral once compliance has been demonstrated. Referral
rates will be set for individual commodities and brokerage rather than
just based on the brokerages overall compliance. With documents
available in COLS the department will be able to process the referrals as a
priority without needing to request the documentation for the
assessment. This will reduce the clearance times compared with the
current system.
 Ongoing compliance will be monitored by post entry audits. Post entry
audits will be supported by a new requirement for all AEP documentation
to be lodged to the department through the Cargo Online Lodgement
System (COLS). These audits will have no impact on the clearance of
entries.
 On site entity audits will be conducted every 3 years and will have a
broader scope then the import declaration and post entry audits, looking
at things like training and accreditation records and quality systems.
The new audit regime will provide the department with necessary assurance to
remove some of the current system restrictions and ensure that participants are
complying with the requirements of the AA. It will also enable expanding the
number of commodities that can be processed through AEP.
To streamline the COLS lodgement for AEP documentation it is anticipated that a
new AEP lodgement feature will be built in COLS. The new feature will require
minimal information from the accredited person to lodge the documentation and
will be significantly different from a standard COLS lodgement. Some of the
benefits identified from utilising COLS for AEP lodgements include:
Clients
 Greater incentive to utilise the AEP AA, by limiting the impact of an AEP
audit
 Greater assurance processes by the department which enables more
commodities to be available for AEP
 Better traceability and transparency of the audit transaction and history
 Secure and authenticated interactions with the department
 Reduce need for onsite audits for documentation assessment
 Reduce need to provide documentation on request of the department for
the clearance of cargo
 A modern service interaction
7
Project update – AEP Reform
July 2016

Create greater consistency in how our clients interact with the
department
The department
 Leverage departmental capability to continue to modernise our service
offerings
 Enable improved assurance capabilities and targeting of AEP Audits
 Improved record keeping and access to documentation for investigating
post border incidents
 Improved access to documentation for clearance purposes reducing the
amount of double handling
 Improve reporting and analysis of all AEP lodgements
 Improve management and visibility of workforce and workload
The draft Audit and Sanction policy will be distributed for consultation in the
coming months.
What’s next?
The project team will consider feedback received from the consultation paper
and schedule a follow up meeting/workshop to provide further information,
work through identified issues and seek endorsement for the proposed changes.
Further Information
Please contact:
 Julie Weymouth (02) 6272 3391
 Angus Martin (07) 32468709
 or email [email protected]
8
Project update – AEP Reform
July 2016