The EU’s Import Control System 2 (ICS2) entered its third release phase in April 2025, expanding requirements to include rail and road transportation. Businesses moving goods into or through the EU must now submit Entry Summary Declarations (ENS) before loading — not after arrival — a change that significantly alters documentation timing and accuracy expectations. As a result, proof-of-origin documentation must now be more detailed, with declaration errors potentially leading to costly duty reclaims or legal penalties.
For accountants managing import-heavy clients, these developments are more than just policy changes — they’re financial and procedural turning points.
ICS2 Compliance: A New Customs Paradigm
ICS2 is the EU’s large-scale advance cargo information system, developed to improve border security and streamline customs operations. With the third phase (Release 3) now live, it captures data across air, rail, road, and maritime shipments.
For business, Release 3 means:
- Submitting accurate ENS data before goods are loaded outside the EU.
- Collaborating with logistics providers and customs brokers to meet tighter timelines.
- Redesigning compliance procedures to reflect the new pre-loading obligation.
As a result of the changes, accountants now play an even more pivotal role in aligning financial records with logistics documentation. For example, ENS discrepancies can impact not only customs clearance but also the valuation of inventory and the application of tariff preferences.
Revenue Recognition and Proof of Origin
Post-Brexit trade agreements have redefined the conditions for tariff relief. Goods may qualify for zero-tariff treatment, but only if the business can demonstrate proof of origin under strict rules of origin protocols.
This has direct implications for revenue recognition and accounting treatment. Incomplete or inaccurate origin documentation can delay the recognition of revenue, particularly for firms operating under Delivered Duty Paid (DDP) terms, where the seller bears responsibility for customs clearance. Additionally, errors in duty reclaim estimates can create mismatches in quarterly forecasts, leading to financial reporting discrepancies.
To mitigate these risks, accountants must reassess the timing and criteria used to recognise cross-border sales, ensuring that customs compliance is aligned with tax accounting standards. Strengthening these controls is critical to sustaining accuracy in multi-jurisdictional reporting.
Cost-of-Goods Models and Duty Reclaims
With ICS2 extending to rail and road transport, accountants must re-examine how landed costs are modelled within financial statements. The increased data granularity required for ENS submissions—covering everything from product descriptions to transport routes—means even minor discrepancies can delay cargo and distort inventory valuations.
Precise tariff coding and customs classifications are now more important than ever. For clients operating across the EU–UK corridor, this includes verifying that the proof-of-origin documentation matches the specific requirements of the updated trade deal. Inaccurate declarations risk voiding preferential tariffs, triggering unexpected duties and disrupting profit forecasts.
Accountants should also revisit duty reclaim procedures to ensure these align with the expanded ICS2 regime. Delays in customs clearance or unrecognised expenses may affect monthly accruals and skew revenue recognition timelines. A proactive review of reclaim eligibility, timing, and jurisdiction-specific thresholds can support healthier working capital and smoother cross-border cash flow cycles.
By embedding these considerations into updated cost-of-goods models, accountants can help businesses stay compliant while improving financial visibility across multiple transport modes.
Strengthen Customs Resilience with INAA
ICS2 and the EU–UK trade deal represent a double inflexion point for customs accounting. While the operational changes are significant, the financial implications are equally critical. Businesses must now treat customs documentation as a core financial concern, not just a shipping issue.
INAA’s members — spanning over 50 countries — offer advisory and accounting expertise that helps clients adjust to these fast-changing cross-border environments. Whether you’re overhauling documentation procedures or strengthening revenue recognition strategies, INAA’s members provide the local expertise and global understanding needed to ensure compliance and continuity.