Implementation Centre for Customs (ICT)

1. ICT 21.april 2017 Implementation Centre for Customs (ICT)

2. General information regarding the information Implementation Centre for Customs (ICT) This presentation is intended as preliminary information to all parties interested in the future modernization program for the customs area in Denmark. Several analyses have been conducted and currently the overall strategy is being defined. Soon, a formal market dialog process will be initiated leading to the formalisation of a tender strategy and subsequent tender(s). This material was originally written in Danish and has been translated to English. The current situation and overall issues s. 3 - 18 The overall objectives for the future state s. 19 - 28 The Implementation Centre organization s. 29 - 39 The overall project plan s. 40 - 41 All of these materials should be regarded as preliminary, thus adjustment to the content will take place.

3. Fundamental challenges within the Customs area

4. Challenges within the Customs area SKATs customs department (hereinafter Customs) are facing significant challenges over the next years. New legal regulations from the EU (UCC) are to be implemented, whilst the needs of the business are changing. That is why there is a need for a significant investment in the development and implementation capacity in the customs area to ensure compliance with the UCC and the corresponding complex IT-development projects and thus create a new and more efficient, customer-oriented and data-driven customs agency. The implementation of the new EU’s customs codex UCC requires process-, data-, and system-changes in  SKATs  customs department (Customs) towards 2021. Currently, Customs has limited development and implementation capacity and considered to be very challenged in executing the implementation task.  A cornerstone of EU cooperation is the free movement of goods SKAT Customs is the authority which supports the free movement of goods in Denmark. At the same time, it supports the European Union against the introduction of dangerous, harmful or illegal goods in Denmark.  EU poses significant new requirements for the European customs agenciesWith effect from May 2016, the EU introduced a new customs legislation (UCC), which aims to harmonize the customs procedures across the European Union. The consequence is that Customs must revise the majority of work processes after the new legislation and review and reissue around 6,700 authorisations allocated to approximately 4,300 companies under the new rules.  At the same time the European Union is pursuing a complete digitization of the entire customs area which results in the development of a wide array of new common EU IT-systems. For Customs, the consequences of UCC are quite substantial in terms of development of new IT systems and/or adaptation of existing IT systems. Towards 2021 new EU IT systems are put into usage, which change the data model for customs data, increases the number of central EU databases and processing systems that have to be integrated with the Danish customs systems and has extensive new requirements for the Danish customs systems. The result is a series of major IT projects. Several of these are directly linked with the EU project plan. The development of the IT-project can be considered a challenge since it is being developed in parallel with the existing operations and will to a large extent utilize the same customs professional expertise. It is vital to Danish commerce and business that operations keep running unaltered in spite of the parallel development of numerous new IT systems, since any downtime imposes large costs on businesses as it restricts free trade. There is also a significant pressure to have better controls, especially here-and-now ("24-7"), i.e. before the goods are released. The pressure comes from both the EU and Denmark and is amongst others derived from the increased political focus on terrorism, safety and health at the borders.  This challenges Customs in regards to the current process and system requirements, the existing analytical and data-related capabilities and Customs’ current systems and data aimed at risk and control.

5. Outline of Customs’ current situation Customs’ ability to be able to handle the four general requirements are uncovered by analysing the seven areas of Customs. For each area a number of challenges are identified. Requirement #1: Ensure good customer experience with high degree of self-service With regards to the four main requirements to Customs, based on the demands from the EU on the implementation of the UCC and MASP, the increased competition from other countries and ensuring the competitiveness of the Danish economy, Deloitte has uncovered what challenges Customs face. On the following pages Customs’ ability to meet the four requirements from the following seven dimensions has been assessed and mapped: Customer service Economy and strategy Processes Compliance System and data Competencies Organization and management Customs Customer Service Economy and strategy Requirement #4: Ensure a modern and efficient Customs agency Requirement #2: Ensure effective controls Processes Compliance System and data Competencies Organization and management Requirement #3: Ensure compliance with UCC legal requirements

6. Assessment of Customs’ current state shows major challenges The analysis of Customs’ current situation, based on the four requirements, shows that Customs face a number of significant challenges. The largest of these is that there isn't capacity to ensure compliance with the UCC legal requirements, including the development and implementation of new IT-systems and rules. A varying customer experience creates the need to establish a new Customs organization. Customer Service Processes System and Data Organization& management • Customs faces a number of significant challenges that puts the present organization and performance under pressure. • UCC must be complied with and a digitalization of the entire Customs area has to be carried out by developing a wide range of new Customs systems, which changes the data model for Customs data, increases the number of central EU databases and processing systems that are to be integrated with the Danish Customs systems, leading to extensive new requirements. • A significant development capacity to handle the development and transition to UCC , which is happening in parallel and already is delayed, must be established. • The case handling capacity must be increased to review and reissue around 6,700 authorisations to approximately 4,300 businesses in compliance with the new legislations. • One must work efficiently and data-driven to ensure an agile organization that meets the requirements concerning compliance, security and at the same time provides stable operations and a customer-oriented customer service that supports the competitiveness of local businesses. The following pages present a walkthrough of the assessment Very Large Gap Large Gap Essential Gap Small Gap No Gap • The total estimate is made from a holistic view in relation to the significance of the Gap.

7. Customer service Processes Systems & data Organisation & management Customs’ customers In 2014 Customs handled approximately 4 million declarations for import, transit or export. In May 2015* Customs serviced 67,000 import registrations and approximately 48,000 export registrations in Denmark. Approximately 4,300 Companies have an authorization. Freight forwarders are absolutely central customers for Customs, since they (see figure below) account for around 80 % of the total Customs value while 20 % is being cleared by the importers themselves.  The distribution percentage of goods (based on type) is shown by respectively freight forwarders and importers, whom declare the goods themselves (from 2014) Goods classification ■ Food and agriculture ■ Industrial ■ Minerals, chemistry, plastic and wood ■ Natural products (metals, glass, etc.) ■ Clothing and Textile ■ Other Importer carries out even Forwarder carries out Although shippers are central customers, declarations, the customs cleared goods and the total customs value can also be linked back to production companies and commercial enterprises. At the same time represented industries are diversified. Below figures are anonymized. Top 10 Companies – calculated customs in DKK (2015) Top 10 Companies – total value in DKK (2015) Top 10 Companies – Number of declarations (2015) *A Business can be both importers and exporters registered and can be registered with several SE numbers. 

8. Customer service Processes Systems & data Organisation & management Challenges in the customer experience in Customs Customs’ customers are generally satisfied, but experience that compliance and controls are not based an effective risk assessment, that Customs are missing the competencies to ensure a good customer experience, and that Customs does not involve businesses enough concerning development work, and furthermore that Customs’ IT-systems do not deliver the required operational stability.  • Deloitte has carried out a minor qualitative and quantitative analysis where customers have indicated their requirements and a series of challenges which characterizes the interaction Customs has with its customers. Statements can potentially be opposing due to different views from different companies. • Requirement 1: Ensure a good customer experience with a high degree of self-service • According to the interviewed companies Customs’ employees do not possess the necessary professional competencies to provide fast and uniform guidance over the phone (on 1212) and at some service desks. That is why companies are worried about not getting a proper answer if they contact Customs through the official channels. Respondents from questionnaires wish improved support by telephone. • Interviewed companies are experiencing system crashes and lack of system capacity which leads to emergency procedures and delayed transfer of goods, which are very costly for the businesses. Respondents from questionnaires are also calling for a more reliable Customs system. • Many interviewed companies are seeking to build a personal network to Customs’ employees, which they contact outside of the official channels (1212), creating a distinctly personal dependence on the relationship between Customs and businesses.  • The interviewed companies find the guidance and information search on SKATs website difficult to navigate in, which is being supported by questionnaire respondents. • Most companies interviewed do not believe that Customs are offering sufficient information about the possibilities offered by various authorisations and customs procedures that companies can use, although questionnaire respondents would like to do more self-service, which at the same time can improve resource utilization in Customs and compliance. • Requirement 2: Ensure effective controls • Controls are, according to the interviewed companies, not enough risk and results based • This leads to businesses having a negative perception of legal enforcement and security and hence reduce the incentive to comply with legislation. • Requirement 3: ensure compliance with UCC legal requirements • There is a need for deep knowledge of the customer process and journey, so that this can be considered and incorporated in the development of the new IT-systems. • The interviewed companies demand more systematic involvement in the development of the new IT systems and solutions in relation to UCC to ensure predictability and incorporation of business needs. The companies do not believe that they historically have been sufficiently involved.  • Requirements 4: Ensure a modern and efficient Customs agency • Companies overall experience, is that Customs uses relatively few resources to execute their daily Customs activities, which is why there is no adequate resources to implement a significant transformation. • The current Danish Customs procedures are simpler and less resource demanding as compared to other countries and as a result Danish companies are to a lesser extent AEO-certified (AEO is an abbreviation for Authorized Economic Operators). Since the AEO-certified companies can obtain simplifications or easier controls with UCC, it will be cost-reducing to expand AEO certifications. • Interviewed companies and questionnaire respondents are experiencing that Customs does not inform them sufficiently about the possibilities offered by various authorisations such as AEO that companies can acquire, which can also improve resource utilization in Customs. • Questionnaire respondents state that Customs must work to simplify the customs procedures for the benefit of Customs and businesses. It is not specified how this must be achieved. 

9. Customer service Processes Systems & data Organisation & management Customs’ current processes Customs performs the processing and case handling of imports, exports and transit of goods and travellers, handles licenses and requests from customers as well as performs compliance and risk assessments.  Customs’ main processes can be categorized into six focus areas of based on EU’s reference model that constitutes a common framework for all main customs processes and supports a cross-functional and customer-oriented end-to-end perspective on Customs. Customs are subject to legal conditions, which limit the possibilities for process optimization: • Customs has been given mandates that are defined by the European Union, political priorities and other authorities • Customs executes a wide range of tasks which geographically requires a physical presence for processing and compliance. • Customers may approach Customs "24-7" and require immediate processing of goods as well as travellers. Simultaneously, goods and travellers must be subject to compliance "24-7".  Customs process model based on the EU reference architecture (BPM) Examples of services that Customs delivers to customers Import Processes concerning introduction and import of goods, including processing and case handling. Allowing customers to report the import declarations for goods that are to be released in free circulation in Denmark. Manual handling at Customs offices, to e.g. notify the arrival of goods. Transit Processes concerning transit and temporary storage of goods, including processing and case handling. Approving consignments for the entry and exit of consignments which are replaced by other Customs procedures. Manual handling at Customs offices to certify departure at EU external borders. Processes concerning export and exit of goods including processing and case handling. Export Allowing customers to submit export declarations for goods that are to be exported. Manual handling at a Customs office to e.g. release exports and print accompanying documents Handling of customers Processes and case handling for economic operators, licenses, inquiries, decisions and guarantees. Processing applications for authorisations to use simplified procedures. Customs technical guidance and assessment of binding goods classification and country of origin information. Handling of guarantees in case of deferred payment or risk of unpaid duties. Risk Processes and case handling for risk management, physical inspections, investigation of fraud, audit and management of debt. Performing documentary, physical or post-release controls to ensure compliance. Safety & security checks for goods that cannot enter or exit the EU. Risk assessment of goods to assess whether they can be released or need to be controlled. Supporting processes Processes and case handling for tariffs and classification of goods, administration for data management and business and industry statistics. Ensure that applied tariffs are updated and in accordance with decisions taken by the EU.

10. Customer service Processes Systems & data Organisation & management Challenges with Customs processes Customs processes are characterized by manual processes that are resource intensive and not sufficiently coherent. Requirements for improvement of customer service, increased compliance combined with an increase in goods flow and travellers suggests that Customs’ processes should be optimized. • Requirement 1: Ensure good customer experience with a high degree of self-service • Customs are not geographically present at all borders, although the flow of goods and the number of passengers increases, which reduce the possibilities for performing controls • Companies have the perception that information and guidance varies locally and is not uniform across Customs and there are long waiting times for requests from companies. • Requirement 2: Ensure effective controls • Central support tasks such as practical planning and reporting of e.g. physical inspections are very resource intensive and reduces effective time from actual control of goods. • Businesses find that they are subject to more controls, if the company is physically located close to a customs department - and vice versa. • There is a lack of a systematic feedback in terms of data on control results for the establishment and updating of risk profiles.  • Requirement 3: ensure compliance of UCC legal requirements • Large differences are experienced between locations in the execution of Customs processes. Customs have not systematically mapped out central processes, which can challenge the design of new effective processes that are required as a result of UCC and MASP. For example, differences in the application of customs procedures, such as the express procedure for import, standard procedure for export and EU shipments. • Requirement 4: Ensure a modern and efficient customs agency • Customs does not have an overview of the resource consumption on essential processes for manual expeditions, which makes it difficult to integrate process optimization in Customs operations. • Customs have many fixed tasks for companies that need to be manually completed, but these undertakings could in practice be managed by the companies themselves if they had the necessary authorisation for self-service and also used this authorisation.   • Customs has carried out a number of efficiency gains in the last years as part of the overall framework reduction of SKATs authorisations.  • Many tasks and processes are characterised by repetitive lookup and entry of the same information in multiple systems, which prevents both productivity and consistency.  Together with SKAT, an assessment of the optimization potential to improve resource utilisation in Customs’ processes has been carried out. In the light of this assessment five processes have been selected for potential process optimization: 1) Physical controls, 2) 24 hour service, 3) Green channel 4) Tax Free and 5) Manual processing of declarations. 

11. Customer service Processes Systems & data Organisation & management The current system landscape at Customs Several of the core systems in Customs are of average technology and business quality. A number of systems are patchworked, while other newer systems as the ICS and Manifest are based on new technologies, but do not support Customs’ business in an optimal manner. Currently, Customs is supported by a number of IT systems for handling Customs’ tasks in relation to the three main processes import, transit and export as well as a number of enabling processes, such as the handling of customers and risk and fraud. The core processes are supported by the following systems: Import, eExport, NCTS (transit) and Manifest (supports all three main processes). In addition, Customs also applies a number of  SKATs common IT-infrastructure components as well as a wide range of EU systems and registers. SKATs customs systems ICS, Manifest and TARIC score the highest on an assessment of both the current technical and business quality and in terms of fit between the future requirements and the current functionalities. The NCTS, the Risk system and Quota score relatively high while Import And eExport & ECS score the lowest. The matrix below the shows the assessment of Customs’ current systems portfolio in relation to the current business requirements. The current Customs systems are well documented as a result of the recent public tender of the total operations and maintenance of customs systems. The change of operating supplier from Sopra Steria to CGI in regards to the operations and maintenance of the customs system and the system documentation has in the same context been examined and improved. Very Low Low Moderate High Very High

12. Customer service Processes Systems & data Organisation & management The current system landscape in the customs area The majority of SKATs core customs systems will be affected by the new comprehensive requirements from UCC and MASP. The systems Import, eExport and ECS will be affected the most. The identified requirements from UCC and the MASP can be categorized in six main types: Modifications of the user interface, including requirements for display of functionality and data in the portal Changes in communication with business and government Changes in processes and business logic New requirements for integrations Modified calculations Changed data models The requirements have been identified by examining UCC including the appendix on MASP and the specifications of the individual MASP projects as well as of other EU documents. In addition to the current Customs system requirements, the MASP also contains a number of new IT systems and registers, including REX, Customs Decisions, PoUS, GUM and CLASS. The new EU systems demand a higher degree of integration and automated exchange of data between the Danish customs systems and the central EU registers and systems. The MASP contains further projects post-2020, which are yet to be scoped or clarified. UCC and MASPs impact on the current systems Very few Get A part Many Comprehensive

13. Customer service Processes Systems & data Organisation & management Challenges in system landscape in the customs area Changing to another operational supplier has led to more stable operations, but the overall systems architecture is not sufficiently robust and operational problems in one system impact the surrounding systems. • Requirement 1: Ensure a good experience with high degree of self-service • Stable systems are according to both customers and customs’ employees a critical factor in building customs operations with the customer in the centre. Operational stability of the individual customs systems is relatively high with an average uptime of 99,8 %, but the overall systems architecture is not sufficiently robust and operational problems in one system therefore often affect surrounding systems. • Any downtime and crashes have direct economic consequences for businesses, which underlines the utmost importance of having a high uptime. • Requirement 2: Ensure effective controls • Customs’ risk system, RIS/RAS, consists of two different systems that are focused on respectively safety and security and national analysis.  • The risk system supports in satisfactory degree the current requirements of the national risk analysis. The MASP-project ICS2.0 poses comprehensive requirements for the risk systems communication with traders and other government authorities, new processes and business logic, new integrations, and a significant higher degree of risk data exchange between EU Member States in addition to changed data models. It represents a major challenge for the existing Customs’ risk system to meet the future requirements. • Requirement 3: Ensure compliance of UCC legal requirements • SKATs core customs systems are only to a limited extent capable of meeting the future requirements stemming from UCC and MASP, and in particular the substantial requirements for changes of the data models in order to harmonize and standardize the processes and data exchange across the EU Member States. Especially the import and export systems are challenged by the future EU requirements, See the table on the previous page. • Requirement 4: Ensure a modern and efficient customs agency • Several of SKATs customs systems are based on outdated technology and has been part of the ongoing developments of the customs systems over the last fifteen years. This evolvement of outdated technology has made the maintenance and further development of the existing systems complicated. For older customs systems a part of the business logic is placed as stored procedures in the database which makes the business logic difficult to maintain. • Outage in operational stability is delaying the employees’ work.  • In several of the existing customs systems, error handling is not optimal, and breakdowns and emergency procedures are very resource intensive for businesses and for Customs.

14. Customer service Processes Systems & data Organisation & management Current data quality in the customs area The data quality from declarations are in general at a high level due to a number of stringent systems validations before acceptance of the customs declaration, and through validations carried out by a third party (Danmarks Statistik).  Customs receive declaration data for goods that are being imported, exported or transit through Denmark borders. These declarations form the basis for processing the movement of goods and ensuring compliance. The data quality of customs data is at a high level when data is considered in accordance with the current technical and business rules. There are technical validations which ensure that information is not being reviewed by Customs before being compliant with these technical rules. Validation occurs at several layers throughout the lifetime of the declaration. The technical validations provide certainty that data coming into the customs system is of good quality, but they do not necessarily ensure that the data is correct. This can also be concluded when looking at the results of compliance studies, which reveal inconsistencies between declarations and documents that are used for movement of goods. The proportion of inconsistencies which have an economic importance is however relatively low. Being controlled There is no control Source: Input from observations, interviews and workshop

15. Customer service Processes Systems & data Organisation & management Challenges presented by data quality in the customs area SKAT has in general high quality data in the customs domain, but there is no data quality reporting for customs data and data ownership is not formalized in a data governance organization. Considering the UCC requirements for harmonized and standardized data exchange across the EU countries, the data models in the current customs systems need to be modified. • Requirements 1: Ensure a good experience with high degree of self-service • The data in itself has no effect on the customer experience or the degree of self-service. • Requirement 2: Ensure effective controls • Findings from compliance studies, which gauge the loss in duties, are being utilized for specific compliance action projects, but the impact of these is not measured systematically nor included in a systematic manner into new requirements for IT systems. • Requirement 3: Ensure compliance of UCC legal requirements • The substantial requirements for changing data models within the customs domain with the aim of harmonizing and standardizing processes and data exchanges across the EU countries is a major challenge for SKATs customs systems, especially the import and export systems.  • Requirements 4: Ensure a modern and efficient customs agency • There is no format for reporting data quality, and it is not possible to read the data quality directly in the current systems. • The current organization places data ownership with the process owners but data ownership is not formalized in a data governance organization. At the same time there is no form of reporting or visualization of data quality. This means that any problems related to data quality are presented through informal processes e.g. issues that have an influence on process execution, or on Danmarks Statistisk validation of declaration data. Very Large Open Large Open Essential Gap Small Open No Open

16. Customer service Processes Systems & data Organisation & management Current application of customs data for reporting and analysis Data from nine source systems from the customs domain are sent in batch to SKATs data warehouse, where data is structured in nine dedicated Customs’ BusinessObjects universes. Based on these universes 57 reports have been established targeting the customs domain. Deloitte’s mapping of the current analytical data sets on SKATs Customs domain has shown the following: Data and analysis strategy: A written data and analysis strategy specific to customs does not exist. Instead SKATs general BI-strategy and SKATs overall strategy to be data-driven is being used. There is therefore a clear strategic ambition to become more data- and analysis-driven, but this ambition is not translated to the customs domain. Technology: SKATs current technology within this domain is data warehouse (DW). The architecture in SKATs DW is divided into silo solutions (called BO-universes), of which nine are dedicated to the area of customs. DW is based on extractions of subsets of data from customs systems with unequal frequency. Furthermore, the solution is not classified as a real operating solution in SKAT since for instance "24-7" support is not granted and there are no SLAs defined for the solution. SKATs DW is in general not ready to support advanced analytics. • Data: Customs data is currently present in the BO universes in SKATs DW and frequently used via standard reports or ad hoc reporting. A challenge with this data is however that there is no transaction or change log for customs data in DW - this is only available in the source systems. It is therefore not possible to report on process flows via the DW. At the same time the data records of time, tasks and efforts are not sufficiently granular to be used to directly link employees with the performed processes (task or control). Similarly missing is a consolidated and structured registration of the controls that are performed incl. the results of these – it is thus not possible to use these control results for scoring of risk profiles. Furthermore, common business definitions of data across the business and dedicated data ownership and data quality monitoring is missing, See previous section. • Processes and competencies: There is a small number of dedicated resources within the customs domain (super users of BO as well as few employees in the 24-7 service), which have specific competencies in the tools and technology area. Interpretation and linking of data happens ad hoc and is based on experience. The more advanced analytical competencies are anchored in SKAT BI&A/DIS. Resources can be allocated to areas through projects. Decisions in relation to processes are primarily based on experience and secondary through standardized historical reports.

17. Customer service Processes Systems & data Organisation & management Challenges for the application of the customs data for reporting and analysis SKATs BI solution architecture is silo-oriented with mutually inconsistent BO-universes. The results of performed controls are not collected in a structured manner. The ICS and risk system are being challenged significantly by the UCC requirements. • Requirement 1: Ensure a good customer experience with high degree of self-service • It is not possible for Customs to research key data on each of their customer segments. The analysis results are not accurate since its not possible to investigate, 1) which trader owns an authorization, since traders often own several authorisations and 2) the total of traders’ customs value are calculated on the basis of an authorisation code and thus will be added together several times for traders with multiple authorisation codes. It is essential that the necessary databases on segments are established, if Customs wants to work data-driven through customer segmentation. • Requirement 2: Ensure effective controls • The process for the creation and modification of risk profiles in the risk system is a manual process and it is not possible to directly and automatically view the result of the configured profiles. • The results of controls (positive and negative) are not collected in structured and uniform manner so that these can be fed back into the risk profiling process and to improve the risk profiles. • Requirement 3: Ensure compliance of UCC legal requirements • The changes that are planned for ICS should optimise the exchange of advance freight information (particularly air freight) and address the shortcomings identified in relation to security and safety and/or data quality with the aim of improving risk analysis. • Development within the context of EU's plan for strengthening risk management will result in extensive changes to the ICS and the risk system. • Requirement 4: Ensure modern and efficient customs authority • SKATs solution architecture within BI is generally based on SAP Business Objects (BO), which provides a good starting point for a structured solution architecture which reuses solution components in the shape of universes. The solution architecture is in practice implemented through silo-oriented universes • SKATs data warehouse is not classified as a real operating solution in SKAT which is why for example "24-7" support is not granted and no SLAs are defined of the solution.

18. Customer service Processes Systems & data Organisation & management Customs current organization and governance Customs is a flat organisation with 24 functional leads and managers, who directly report to the deputy director. The management generally follows SKAT's management model, which is based on target management and the management concept used in SKAT Indsats, where resources are distributed through a common action plan, which does not include the customer service tasks in Customs. Customs' current organization is undergoing change and development and therefore not included here.

19. Temporary target picture of future Customs A business strategy is currently being formulated, which will follow the same principles to be found in this material

20. Target for the future of Customs In order to accommodate the major changes that the UCC entails, it is necessary to put in place development and implementation capabilities to build and commission a future-proof customs department that effectively makes use of data and digital solutions based on customer needs and performs effective controls. A well-functioning customs authority is crucial for business. Today, industry has the perception that customs controls are not sufficiently targeted, that Customs systems are unstable and that the Customs agency does not have the necessary professionalism to deliver prompt and accurate guidance. This situation will be under further pressure as a result of the UCC, which underlines the need for successful implementation of the UCC and, secondly, that this implementation will be difficult to manage for the current Customs organisation. A new Customs must be compliant to four strategic metrics There is a need for detailed knowledge of Customs’ processes in order to develop IT systems that are compliant with the UCC. For this reason it is essential to have a customer service strategy and focus on effective controls as a prerequisite for creating the "right" IT solutions as part of a transformation program. A. The customer at the centre: Developing a service concept that ensures optimization and consistency across customer channels and stable frameworks for the interaction with business, and is a prerequisite for the design of process enabling IT solutions. Result oriented B. Controls based on a data-enabled risk assessment: Customs must have a supporting system for risk assessment C. Stable, efficient, and customized IT support: In the short term, Customs should focus on activities that increase operational stability in the current customs systems. In the long term, SKAT must ensure cost-effective development and implementation of new IT systems that also accommodate the needs of traders, and effectively support the employees' work processes. D. An agile and adaptable Customs agency: The Customs Department must be agile and adaptable to the implementation of the UCC. The major development projects and the significant case handling task regardingcustoms decisions requires a reorganization of Customs, with a focus on the consolidation of geography-independent tasks, the establishment of a single customs management which focuses on increased strategic management and data management, significant improvements to the control and analytics capabilities, together with the optimization of manual operating processes.

21. Targeted implementation of the UCC It is necessary to apply a selective and business case-driven approach for the replacement of IT systems and changes to the processes and organization in order to ensure the most cost-effective and least risky implementation of the UCC. ProcessesThe fundamental processes of the Customs’ administration is customer service, duty collection and compliance. In order to create a solid foundation for the UCC implementation, these processes must be considered together with the new IT solutions. More specifically, it is necessary that a good customer experience and data-enabled risk management can be nested in the cross-cutting processes, organization and in the development of new IT systems. This ensures that Denmark can maintain its position as a business-friendly country and that controls can be more targeted and effective. IT solutionsThe analysis has revealed that there is a need for replacement of the process-supporting IT systems. Modern and efficient customs agencyAs a result of UCC, there is a large number of changes, which requires development and implementation capacity, including the ability to continuously bring new initiatives into operation while processes and IT systems run stable "24-7".  It is therefore necessary to establish an implementation centre for customs, which will be responsible for the development of new IT systems, cf. the MASP, development of new customer service concepts and concepts for better data and risk management. Additionally, the implementation centre must be responsible for the necessary coordination between the different systems, both internally and with the EU. Necessary implementation of UCC and MASP UCC and MASP creates the need for development and amendment of Customs’ processes, IT systems and data Targeted approach to implementation • Processes being optimized before they are anchored in the new IT systems • Customers and data used actively in the optimization of processes • IT systems replaced based on a selective business case-driven approach Target objective To create a future-proof Customs administration, which is effective, agile and supports the Danish industry

22. Target for the future of Customs WHAT IS OUR AMBITION? Denmark’s future Customs agency must be effective and agile as well as support Danish businesses. This means that the agency must create an effective and customised framework for businesses and citizens, as well as facilitate trade based on secure operations and a user-friendly IT support, professionalism, availability, trust, data-driven risk assessment and track compliance studies. CHALLENGES/OPTIONS: WHERE SHOULD WE FOCUS? WHAT DO WE CHOOSE TO DE-SCOPE? MANAGEMENT & CONTROL SYSTEMS • What Challenges/Options must the future Customs agency relate to and deal with? • Challenges • Case management and 24/7 inquiries • System downtime has large consequences  • Competency challenges • Difficult to predict the effect of controls in the safety & security domain • The customs and safety gap consists of an unknown volume of unrecorded cases • Options • Defined customer segmentation enables customisation • What tasks should the  future Customs agency not be involved in and whom shouldn’t it serve? • Manual treatment of cases and inquiries, which can be handled automatically and digital • Processing of tasks that are digitized • Key customers:  • All businesses • Travelling citizens • Focus areas: • Customer centricity • Make compliance data and risk driven • Stable, effective and demand driven IT-support  • An agile and change ready customs agency • Governance And Follow-up: • Integrated task resolution and management • Focused development of KPIs and management through objectives • Process control as integrated part of operational management • Strong execution and transformation-ready organization • Strategic cooperation with BI, Legal, IT etc. • Data-driven management from risk assessments to controls • Close and flexible coordination between authorities • Approach customers through analytics based on a data-driven customer segmentation • Data-driven compliance studies with traceability and historical comparability • Processes and systems (in particular): • Harmonization of management tools including planning tools to allocate employees • Common governance model for contact with customers to ensure a uniform and interconnected service • Proactive recruitment program to counter the aging labour force • Targeted competencies development and career planning • Rule-based validation and quality assurance of reported data from traders • Operational stability and user-friendly customs portal • Stable server- and system operational setup with fall-back solution • Real-time integration between systems • Workflow support and platform for automation of processes HOW CAN WE BECOME SUCCESSFUL? • Integration between customer service and controls in case it makes sense technically • Effective workflow management with process control as well as optimized and automated processes and organisation • Resource allocation and task resolution can swiftly be modified to handle changes in tasks and conditions • Geographical consolidation of geographically independent tasks (e.g. case processing) • Effective cooperation with other authorities with based on customer needs • Effective controls to minimize inconveniences for businesses based on risk assessment. • Risk assessment across the value chain • Ensure that companies declare correct data • Minimize the customs gap leveraging regular compliance studies with traceability between projects and customs gap • Attract and develop strong professional competencies in customs and customer service • Uniform and accessible customer service based on a high degree of professionalism and customer segmentation • A user-friendly and simple Customs portal • Fast, flexible and robust operational IT systems and a timely implementation of MASP with data exchange across systems, authorities and borders • Proactive and targeted guidance and information campaigns  • Minimizing requirements on guarantee management SKILLS AND COMPETENCES CRITICAL CHOICES: • What skills and competencies are crucial so that we can succeed? • Customer service and understanding day-to-day operations of traders • Customs professional competencies, which also can be activated for contact with customers that match the need of traders • Customs controls • Analysis and data competencies • HR and training • Employees whom can engage in both controls and customer service tasks • Management and management support • IT operations and development The future customs agency face the following priorities Control Activity control Effective control Trade politics and competitive condition Competitiveness of the individual businesses Focus Agency servicing Self service Roles EU priorities National and local priorities Priorities

23. Action areas and solutions The analysis has identified four action areas that ensures a good customer experience with increased self-service, an outcome based control effort, compliance with UCC legal requirements, together with an efficient and modern organization. A thorough knowledge of the customer and control process is a precondition for the development of the IT systems meeting UCC requirements. The action areas can be realized through 18 proposed solutions. 

24. A. The Customer In the centre  B. Outcome-based control Improvement of the customer experience based on SKATs customer service strategy C. IT Support D. One Customs Agency Customs should further build on a positive customer experience by addressing the customer experience through four solution themes that is operationalizing SKATs customer service strategy and creates the conditions for the development of new process carrying IT systems. The starting point for the solutions is the overall vision of SKATs customer service strategy and its three strategic focus areas: The prerequisite for an effective and coherent management of the challenges within the focus areas is the establishment of a service concept for Customs. • Proposed solution #A.1. Develop an overall service concept for customers  • It is recommended to develop an operational service concept for Customs’ customers, that explicitly determines how and with which service levels Customs shall serve its customers.  • Through strategy based standards for customer service, Customs’ must take responsibility for the customer based on the clear choice on the channels and service level as well as knowledge of customer needs. It requires the establishment of a new service concept that requires systematic focus on Customs’ professional retraining, user adapted customer service without personal dependence, ongoing involvement of businesses, knowledge of customer needs and a data driven management with the knowledge of customer inquiries and Customs’ performance. The aim is to improve the handling of requests and at the same time to increase Customs knowledge and compliance. Put the customer in the centre Customs is yet to translate SKATs overall customer service strategy into a holistic service concept.  Proposed solution #A.2. Increase self-service degree It is recommended that Customs implement a campaign to spread corporate self-service. Through a greater degree of self-service and targeted guidance, built on knowledge about the practice, Customs is to develop a strategy with the aim to digitalize all customs operations. The purpose is to minimize errors, create the greatest possible structural tax gap effect and reduce an unnecessary resource pull among businesses and in customs concerning processing and control. Targeted guidance Customs do not provide enough coherent, proactive and demand-driven guidance regarding self-service opportunities and causes for errors.  The establishment of the Implementation Centre for Customs (ICT) with concept for customer involvement It is recommended that Customs shall ensure that customer involvement will be an integral element in the program organization, that has to realize the long-term development of new processes and IT systems as well as other solution proposals that has a large commercial importance for Customs’ customers, and that is a prerequisite for a functioning automated customer service.  Through the involvement of the businesses in development work and taking into account the fact that Customs’ is to act as an authority, Customs is to provide an increased understanding of the challenges that businesses are experiencing with Customs’ current systems, and ensure a continued focus to exploit the possibilities for increasing digitalization, since Customs, according to businesses, have a great opportunity to ensure a simple customs procedure and develop a user friendly reporting system. The objective is to improve the implementation of UCC and create better conditions for the competitiveness of the Danish economy. Automated customer service  Businesses have not been systematically involved in the development of new IT solutions.

25. A. The Customer In the centre  B. Outcome-based control Targeted and effective control C. IT Support D. One Customs Agency Based on the new strategy for the action areas in SKAT and demands from UCC, Customs must develop the framework for its control efforts. This applies both to the strategic and operational level.  New strategy for SKAT Effort The strategy has importance for the future of Customs’ control efforts. Customs must implement the strategy in a number of areas. Proposed solution #B.1. Development of segment strategies for Customs Proposed solution #B.2. Contribution to the development of the model for effect prioritization Proposed solution #B.3. Contribution to the development of evaluation model and evaluation practice  A stronger evaluation practice and evaluation culture must be established around the efforts, i.e. for both control and guidance efforts. Mapped challenges in the Customs-analysis The analysis of Customs’ control efforts reveals that there is a need for an improvement in IT solutions, selection tools and the organizational set up.  Proposed solution #B.4. Security of data quality and development of the registration framework With a central coordination there must be established a systematic and minimal administrative registration practice of controls carried out. Proposed solution #B.5. The development of risk analysis model or further development of existing model

26. A. The Customer In the centre  B. Outcome-based control Stable, effective and need-driven IT support C. IT Support D. One Customs Agency SKAT must ensure a successful implementation of IT support for being compliant with UCC and at the same time integrate SKAT’s business priorities. Timelines have changed • Proposed solution #C.1. Sourcing strategy • Towards 2021 SKAT can continue to build on selected customs systems while maintaining the current sourcing model. A large part of the core systems in the Customs area should however be replaced. The completed analysis have identified possible sourcing models. • For the core customs systems, that are recommended to be replaced, one solution is that SKAT tender IT development tasks with the freedom to offer both standard systems and custom builds, while the development of workflow support and calculation engines with advanced analytics for risk assessment is handled in-house by SKAT. • UCC AND MASP put new requirements on Customs’ Systems • UCC and MASP put comprehensive demands on SKAT’s customs systems. Particularly for changes of data models in the Customs’ area in order to standardize and optimize processes as well as to ensure data exchange across EU countries. Customs wants to be more data driven  To a far greater extent, Customs must use data as a starting point, including in relation to controls. • Proposed solution #C.2. The governments IT-project council • The scale of the transformation program and the individual IT-projects will require the governments IT-project council to be involved. There is an active dialogue with the council in order to clarify the most appropriate process, as there will probably be a continuous registration for individual (sub)projects. Customs wants to put the customer in the centre Customs needs to develop the new systems with the customers involvement. • Proposed solution #C.3 - #C.7: The development and implementation of new IT systems • SKAT must deploy several large IT projects towards 2021, where a number of projects must run in parallel, due to the time pressure. The development of large process enabling systems should be initiated as soon as possible, with the import project as the most comprehensive and therefore the most urgent to launch. • A series of smaller projects should also be launched with more compressed time schedules. Several of the projects are directly dependent on the EU's specification and implementation of the MASP-projects, and it is therefore necessary to continuously coordinate with the EU and to clarify the MASP implementation with them. • During the whole period it is crucial that there is a close coordination between the IT project and the EU as well as between the individual IT projects. SKAT should actively participate in the relevant EU working groups with a perspective on gaining knowledge on EU’s requirements and to exert influence on these. Customs’ current system portfolio is not fit to meet the challenges The large core and process enabling systems in relation to especially import and export should be replaced. A system replacement in Customs’ is required due to the new business requirements from UCC as well as the development of central EU systems as prescribed in UCC. Timely implementation of UCC and MASP Parallel and delayed IT development puts great demands on an agile and effective project management. • The establishment of the Implementation Centre for Customs for the implementation of IT projects and transformation • Solutions should be developed and implemented by an individual program organization in close interaction with the operating organization where the operational solutions are anchored.

27. A. The Customer In the centre  B. Outcome-based control An agile organization which safely and competently puts the UCC into operation C. IT Support D. One Customs Agency The UCC implies a large transition in particular of systems that support the customs processes but also to the requirements to Customs’ overall task. There is a need to adapt the organization and work with strategic competence development to ensure that Customs can operationalize the UCC initiative throughout the implementation. A more agile organization with stronger competences will also be able to better adapt to the changing conditions for Customs’ task. • Proposed solution #D1: Reorganize Customs • There is a need to reorganize customs with an objective to establish an agile and change-ready organization that can soundly implement the required new systems and initiatives into operation. Deloitte has drawn up a draft for the future Customs organization, which builds on the integration of the customer service and control processes which Customs has already initiated, increases the capacity for strategic development and follow-up, organizationally gathers geographically independent tasks with the aim of physical proximity and creation of a cross-functional analysis- and coordination function, with the purpose of supporting the management and control across Customs. • UCC changes systems support etc. • Customs must be able to securely receive and operationalize initiatives from the UCC program into the organization as they are developed. • Ongoing changes in businesses’ needs • Customs must be able to adapt quickly to changes in demands, since their competitiveness, especially in a small, open economy as the Danish, is dependent on goods flowing freely across borders. • Proposed solution #D.2: Further develop management • Customs should further develop operational control and make it more data-driven. It is about ensuring that resources are being utilized where the impact is greatest, which requires greater insight into risks as well as a management process that enables continuous priority of resources. It includes amongst others strengthening targeted management, where there is a need for better KPIs which enable follow-up on compliance across Customs. • Ongoing changes in risks, cheating patterns etc. • New ways to circumvent tariffs and legislation are constantly being found, and the security situation changes on an ongoing basis. Customs must therefore be able to transition controls quickly and where needed based on an objective evaluation of risks. Proposed solution #D3: Competence and recruitment strategy The combination of natural retrenchment (e.g. retirement) and a great need for upskilling requires that Customs must ensure that employees have the skills to cope with changes in the conditions and requirements. It calls for the preparation of a competency-based strategy with an associated recruitment strategy as well as the implementation of locally anchored training initiatives in the individual units, where Customs’ key resources conduct training for colleagues in order to raise their skills and competencies. • Mobilisation of adequate resources. • Processing of authorisations and establishment of the program organization involves recruitment and on-boarding 100 employees whose competencies and welfare must be ensured. 

28. A. The Customer In the centre  B. Outcome-based control Optimization of operational processes through digitalization and consolidation C. IT Support D. One Customs Agency Until new systems are designed, current processes can be optimized and automated in the short term through amongst others "robotics" and workflow technology, increased digital self-service and a standardization and consolidation of task solving. The mapping has shown a potential optimization linked to particularly the following four themes solution: • Efficient processes and ensuring uniformity  • A number of customs processes are characterized by a manual task handling, where there is an inefficient use of time and a relatively large amount of time spent on routine tasks that do not directly contribute to the completion of the core task. The low degree of standardization and formalization implies that there is not a uniform process across customs offices which is estimated to reduce efficiency, quality, control and legal security.  • The solution proposed by the #D4: Optimization of operational processes • It is recommended that processes are optimized and automated in the short term through amongst others  "robotics" and workflow technology, increased digital self-service as well as a standardization and consolidation of tasks: • Automation of internal manual processing tasks   • Customs are to implement automation in both customer service as in control to free up resources to increase quality of controls, to ensure better coherence across exams/analysis of control objects and implementation of controls in practice. The tools for automation - called "robotics" and BPM - shall be used until new systems with built-in automation are implemented. Here the tools also help to qualify the requirement concerning the user interface in the new systems.  • Organizational consolidation of the geographically independent tasks  • For support tasks, processing and control, Customs must exhaust the possibilities of implementing an organizational and possibly in the future also a physical consolidation in order to create a basis for economies of scale related to increased quality and efficiency.  • Use of technology to increase physical presence  • Customs should apply technology to establish a virtual customs officer to facilitate processing of travellers on borders to third countries, where it should to be possible to make VAT and customs transactions and where it is simple to commit fraud. A technological solution should also be used in customs offices. • Increase efficiency of manual handling and processing in regards to import, export and transit processes • Customs should continuously work to improve their processes through the development of an improved and increased digital self-service and active promotion of self-declaration and servicing for businesses.  Minimization of geographical spread Customs’ geographical independent tasks are cross-functional and can be resolved without a physical presence. Customs wants to use and develop competencies at an optimal level which is made difficult by the decentralization of tasks, which as a result does not ensure a sufficient volume and repetition to achieve the desired quality and efficiency • Develop Customs and optimize the digital solutions  • Customs’ is not present at locations with VAT- and customs businesses and at the same time the number of travellers to third-party countries is increasing. In such cases, technology is key in order to increase the service locations. It poses the requirement to understand service activities and controls efficiently, flexibly and digitally.  • Increased productivity through better process and operations management  • Customs do not have the necessary overview of the quantity and the usage of resources on manual tasks, which complicates operations management with integrated process optimization and management, in relation to the flow of goods and the customer needs.

29. Establishing a new Customs area

30. How is the Implementation Centre for Customs (ICT) expected to be organized? The organization is under restructuring. There is currently established 4 offices, which covers the below-mentioned areas. The four offices are, however, currently organized in a flatter and more simple structure. Ultimo June there will be +50 employees in ICT. Each office is described in the following pages.

31. Office Description - Strategy and control Line organization and leader Purpose • Ensure the overall strategies in the new Customs governance agency based on the defined visions and ensures that this is reflected in the organization design • Support the ICT program with administrative tasks to allow for the focus on deliveries at program and project level • Manage and control stakeholder interests of all external stakeholders outside of ICT and the customs organization such that stakeholder management happens centrally and is coordinated • Ensure the quality of deliveries and work methods so that these satisfy the internal and external requirements Office Head strategy and control HR Strategy and control Other group functions ICT program manager PMO IT Operations IT Vice President Business Vice President Activities and areas of responsibility • Develop the overall business strategies and establish a framework for the future Customs governance agency. Must involve relevant stakeholders in this work and ensure that the strategies follow the vision. • Ensure that decisions in the steering groups are based on impact assessment analyses across the ICT areas such as data & analysis and IT development. • Tasks in the secretariat such as assisting with practical activities in the program, for example meeting rooms, access cards, physical facilities, etc. • Purchase and contract management including the development of a sourcing and tender strategy, producing tenders and contract management of suppliers • Stakeholder management including all communication towards the business community and the public • Communication and information sharing to the public • Manage minister support in the customs area as well as EU coordination, including participation in meetings/conferences and similar activities at EU level and communication of Denmark’s views on the customs area in the European and the International cooperation • Financial management, including centrally established management and control of the program’s budget as well as support of financial management at project level • Define the quality requirements at program level, carry out quality assurance and inspections of project deliverables and take part in the facilitation of access to external QA functions such as the IT project board or the internal audit

32. Office Description - PMO office Line organization and leader Purpose • Establish the framework for the different projects by establishing the ICT program’s delivery methods including a model for program, project and deliverables • Establish tools and maintain standards and information to ensure well-administered program management and project management • Make it easier for project managers to make high quality deliverables by reducing unnecessary bureaucracy, offering guidance and ensure learning • Integrate the management model with the ICT program such that decisions are made by the right people based on the right information • Ensure that the projects have access to the necessary project management skills and resources Office Head PMO HR Strategy and control Other group functions ICT program manager PMO IT Operations IT Vice President Business Vice President Activities and areas of responsibility • Maintain and further develop the program organization and the program management model • Define and maintain tools that are used on program and project level • Own and maintain methods, templates and standards for program and project deliverables, including maintenance of the business case • Manage the following on program and project level: • Plans (program plan, plan of optimization gains, resource plan, etc.) • Registers (quality register, risk register, issue and configuration register, etc.) • Provide support for projects for example in the form of methodology guidance, teaching and facilitation of workshops • On-board of new ICT employees and - with assistance from the change management office - ensure a uniform and appropriate understanding of the work processes and the methodological frameworks for all project employees internally in ICT. This includes ensuring good and effective communication internally in ICT • Report and consolidate management information to the various decision-making authorities • Coordinate the resources in the Customs organization, and support the resource management process, which occurs in the steering groups, by among others maintaining the program resource plan, and track and report on resource utilization • Support a controlled configuration and delivery management administration by providing the tools and methods available for the projects • Contribute and support to solving professional problems in the various individual projects

33. Office Description - IT architecture Line organization and leader Purpose • Develop strategy for the IT architecture that supports the vision for the Customs Governance agency • Ensure that the right skills, processes and tools are available to ensure a coherent IT landscape with the correct integration of security that follows SKAT’s Enterprise Architecture • Define and ensure that there is a uniform transverse application of relevant professional standards within the office’s specialist areas. For example that a framework is created for the development work that ensures that the system landscape supports the future Customs Governance agency and thereby achieves the desired commercial and economic value • Act as a strategic office that works across the projects and participates in the strategic planning for the technical development work Office Head IT architecture ICT program manager Business Vice President IT Vice President Activities and areas of responsibility IT architecture IT development Change and training Data and analysis • The Office will be transversal between the different projects and is focused on securing that all development work follows the defined Backlog architecture and thus has a responsibility to keep the general overview of the systems that are developed and the underlying architecture. • Responsible for establishing a collective architecture strategy solution across the entire program that follows SKAT’s overall enterprise architecture • Responsible for the integration of the system architecture of the various systems as well as developing the IT security architecture • Engage in the sourcing process of the different systems to ensure the optimum use of the strategic architecture framework, including to ensure that the systems can meet safety requirements • At a strategic level, responsible for ensuring the development of architecture decisions that create the framework for the Architecture backlog, which enables the agile development teams to work as self-organized teams • Take part in the PI planning as well as in the agile sprints and ensure that there is a focus on the strategic topics that are developed for the new Customs Governance agency, establish the technical strategic frameworks that all agile teams must follow, and engage in developing the backlog as well as ensuring an appropriate prioritization of the backlog while securing cooperation across the development teams • Responsible for ensuring the implementation strategy in connection with the technological transition from ICT to the new Customs Governance Agency including being engaged in the development of the DevOps • Responsible for ensuring the quality of the deliverables from the office resources, both through participation in the PI planning and by participating in the agile sprints, such that there is an ongoing control that the new systems follow the overall architecture Business Processes DevOps

34. Office Description - DevOps Line organization and leader Purpose • Develop the strategy for DevOps, which will support the IT operations and IT development in the Customs Governance agency and across the taxation agency • Ensure that the right skills, processes and tools are available for the construction of a new IT operation and development unit that can be implemented in the new Customs Governance agency. • Develop an IT operation and development unit, including IT security, which makes the Customs Governance agency responsive to changes in the future by following the DevOps philosophy • Define and ensure that a uniform transverse application of relevant professional standards takes place within the DevOps, including continuous integration and delivery • Act as a transverse resource pool, which ensures that DevOps – through continuous development – plays a role in creating the future processes for operations and development Office Head DevOps ICT program manager Business Vice President IT Vice President Activities and areas of responsibility IT architecture IT development Change and training Data and analysis • Develop the strategies for DevOps in cooperation with strategy consultants, IT architecture and development as well as other relevant stakeholders • Build a DevOps feature (in collaboration with the solution architects and application architects) that can deliver IT operations and development following an agile methodology, including an operating model with a clear management structure as well as operations and development that work closely together • Develop the management structure of software configuration including defining continuous integration (CI) as well as the development of a CI pipeline • Develop an approach for automation of test (together with test lead and quality assurance) including selection of the necessary tools that can support the daily operation’s support • Develop a release strategy including the selection of supporting tools as well as the planning of releases with relevant stakeholders • Develop environmental management strategy, production monitoring strategy and lifecycle management for applications, which will add to the control of continuous delivery (CL), including the construction of a CL pipeline • Ensure that the DevOps follows best practice within the area such as within the automation of code review, unit tests, builds, deployments, continuous testing and environmental management • Engage in PI-planning and drive the development of DevOps ‘ways of working' across the projects including the automation of the test, quality assurance of coding as well as construction of both CI and CL. This way DevOps is anchored in all the development work. • Ensure that the entire new system landscape is ready for production and responsible (together with the change management office) for creating a transition strategy that ensures an effective transition from the current system landscape in the customs organization to the new system landscape without major interference to operations Business Processes DevOps

35. Office Description - IT development Line organization and leader Purpose • Develop strategy for IT development • Ensure that the right skills, processes and tools are available to ensure the development of the projects' technical deliverables • Define and ensure that there is a uniform transverse application of relevant professional standards within the subject areas of the office. For example ensuring that procedures, application of tools, and subject specific standards of documentation within the development area are applied consistently and uniformly across all the ongoing projects • Act as a resource pool and allocates employees to projects in accordance with the priorities of the leadership group Office Head IT development ICT program manager Business Vice President IT Vice President Activities and areas of responsibility IT architecture IT development Change and training Data and analysis • The office resources are included in the staffing of the projects and their main activity is to plan and execute sprints in cooperation with the Product Owner team. Specifically, they: • Break down the functional and technical user stories to task-level and ensures the quality of and the traceability between requirements, documentation, and technical components  • Develop descriptions of solutions and ensure that the business needs are correctly understood to fit the specific system support • Develop the technical solutions within both the "custom build" as well as the "packaged" areas in cooperation with the product owner team • Plan, produce, document and ensure the verification of the developed software, within as well as outside the sprint, and conduct the development of acceptance criteria • Conduct demo and retrospectives and ensure the collection and incorporation of experience in the subsequent sprints and phases • In addition to participating in the sprints the office has the following responsibilities: • Develops strategy for IT development in cooperation with the strategy consultants and other relevant stakeholders • Defines and ensures the methods of development, concepts and tools within the discipline "development“ • Defines and ensures the methodological approach to test within and outside the sprint, including assisting in the development of the overall test strategies on both program level as well as project level in close collaboration with the project and program management office • Ensures that the experiences and methodological adjustments are incorporated into the specific discipline, for example that any process-related changes in the validation processes are reflected across the projects such that experiences are shared and a consistently high level of technical standards are maintained at program level • Responsible for supplier management in relation to the IT deliveries supported by the contract manager Business Processes DevOps

36. Office Description - Change and Training Line organization and leader Purpose • Develop strategies for change management • Ensure that the right skills, processes and tools are available for the design of the new Customs Governance agency and enables a successful transition from the current customs organization into the future Customs Governance agency • Define and ensure quality in deliverables by ensuring a uniform application of relevant professional standards within the subject areas of the office such as rooting the change within leaders from both the customs organization and ICT • Act as a transverse resource pool and allocates employees to projects in accordance with the priorities of the leadership group Office Head Change and training ICT program manager Business Vice President IT Vice President Activities and areas of responsibility IT architecture IT development Change and training Data and analysis • Develop change management strategies aimed at ensuring a Customs Governance agency that is organized for change (in cooperation with the strategy consultants and other relevant stakeholders) • Prepare an operating model for the new Customs Governance agency and design the overall business processes, and in collaboration with the Service design lead the office must ensure that these set the scene for the best customer journey. This way the work is conducted on both system and organizational level • Identify the impacts of the change for relevant internal and external stakeholders. Based on these, change management strategies are developed, which are focused on the change from the old to the new reality in the Customs Governance agency • Work with change by anchoring this at the management level and thus focusing on management involvement and the development of a network of change agents, and the office should continually adapt the change management strategies such that they are best suited to meet the current needs of the organization • Planning, managing and tracking the change management activities in close cooperation with relevant stakeholders and the projects to ensure that the changes have the highest relevance and the greatest impact possible • Cooperate with the Secretariat in the development of stakeholder management strategies and methods, and be responsible for the execution of all change management activities • Manage the communication with the customs organization and all its employees. This includes being responsible for the development of communication strategies, communication material, and the execution of communication activities with Told (Customs). The office should support the PMO in the communication with ICT • Manage training and ensure that this supports the other change activities in the best possible way to get the greatest effect possible, responsible for identifying the training needs and developing training strategies based on these needs, and responsible for developing training material and conducting training as well as follow-up support Business Processes DevOps

37. Office description - Business Processes Line organization and leader Purpose • Develop strategy for business processes that supports the vision for the Customs Governance agency, including being customer-oriented and data-driven • Ensure that the right skills, processes and tools are available to enable the development of overall process design and customer journeys as well as to ensure that the projects can effectively formulate the business needs for IT support   • Define and ensure that there is a uniform transverse application of relevant professional standards within agile development, process design and customer journeys. For example ensuring that procedures, application of tools, documentation and product requirements are managed and pursued consistently across the program • Act as a resource pool and allocates employees to the projects in accordance with the priorities of the steering group Office Head Business processes ICT program manager Business Vice President IT Vice President Activities and areas of responsibility IT architecture IT development Change and training Data and analysis • The office resources are included in the project staffing and their main activity is to formulate and break down business needs in features and user stories. Afterwards the PO team plans and defines the individual sprints in cooperation with the IT development team, where they specifically: • Align expectations and requirements for the system support together with system users and business specialists • Communicate the project vision to the IT development team • Break down business requirements from epics into features and user stories • Own the business requirements of the project and prioritize these in a backlog of user stories to the development team based on the risk and business value creation • Contribute to well-coordinated change management at both project and program level • Secure the validation process together with business specialists • In addition to the commercial role in the project sprints, the office has the following responsibilities: • Responsible for the development of the business processes strategy, which for example supports a customer-oriented management board in cooperation with the strategy consultants and other relevant stakeholders • Responsible for developing the overall business processes that support the strategies that will be developed across the ICT • Responsible for ensuring that the customer journey is deeply embedded in the future Customs Governance agency, including the design of the overall customer journeys that will be part of the tender process • Ensures that experiences and methodological adjustments are incorporated in the agile process, for example that any process-related changes to the product specification processes are reflected across the projects such that experiences are shared and a consistently high level of technical standards are maintained at program level Business Processes DevOps

38. Office description – Data & Analysis Line organization and leader Purpose • The future Customs agency • Cascade strategy for an analysis and data driven Customs agency • Automated information flow that creates the greatest possible value for customs processes and customers • Develop and maintain core deliverables such as data model, calculation engine and the BI platform • Develop technology and professional standards • The organization of ICT • Contribute to a common ICT strategy and understanding of the future Customs agency • Develop ambitious strategy for Data & Analysis - including cascade strategy for 'data-driven customs‘ • Establish an office with strong competences and capacities within the entire value chain from source systems to analytics to relevant BI and ad-hoc analysis. • Continually deliver ad hoc analyses and consultancy. • Work closely with SKAT IT and across the implementation centres. Office Head for Data & Analysis Activities and areas of responsibility • The office resources are included in the staffing of the projects and their main activities are to: • Develop strategy for data & analysis that for example supports an intelligent and data-driven Customs Governance agency, and carry out this in cooperation with the strategy consultants, other ICT offices as well as other relevant stakeholders • Cooperate across the implementation centres to ensure alignment with data models and strategies across the Ministry of Taxation • Develop the transverse data and data management models, build data warehouses and hereby enable BI and the analysis work • Define the overall data architecture as well as the supporting features, including to ensure consistency between the IT architecture and the data architecture • Ensure data quality, including data management, rules, policies and procedures that comply with the current regulation in the area • Work with relevant stakeholders to develop specification of requirements for data in accordance with current EU data standards, including to help with creating data standards across the IT systems • Work with data security and safety in connection to the reporting and data storage • Prepare a vision, a strategy and an approach for analysis as well as develop models and algorithms to support these • Conduct and ensure that all data work, including the data architecture, supports the needs for analysis-driven business processes that are defined in the projects • Work across the organization and across projects to help ensure integration between data and business processes with a focus on developing a data-driven and analysis-driven organization • Manage all data conversion work in relation to all the projects • Support the quality assurance work

39. Steering group staffing from the leadership in the ICT line organization and SKAT √ 2 1 ICT steering group 4 √ Customs operating forum ICT working group 2 ICT program leadership group Data and Architecture 3 Program manager 3 Other reference groups SAB – System Advisory Board Project 1..n SG for Data, IT architecture and Central Systems Project manager 1 4 SG business strategy and processes Project manager Project manager Portfolio manager

40. High level summary of the detailed implementation plan

41. High Level Implementation Plan The following plan is a high level summary of the detailed implementation plan, which includes contingency buffers that have automatically affected the Go Live dates. The project have been aligned to State IT council project phases. 2017 2018 2019 2020 2021 2022 2023 2024 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Activity Transformational Projects Integrated Tariff (TARIC, Surv 3) Procurement starts Risk Procurement starts Customs Debtor ICS (Phase 1 and Phase 2) Procurement starts SUBJECT TO CHANGE Guarantee Management Procurement starts Imports, Special Procedures for import, Centralised Clearance, and Quota Procurement starts Export, Exit, Centralised Clearance - Special Procedures for Export Procurement starts NCTS (Phase 1 and Phase 2) Procurement starts Manifest (NoA, PN, Temp Storage) Enabling Projects (Program/ICT Level) Procurement starts Program Management Agency of the Future Infrastructure Architecture Data Sourcing Communication Change Management Mobilisation of ICT ICT staffing ramp up ICT staffing ramp up Baseline Staffing level to be maintained throughout ICT program Ramp up shows when we peak in terms of resources Ramp up shows when we peak in terms of resources Tender preparation activity Tender preparation activity The plan will be open for adjustments regarding the overall structure of the transitional project after input from the current market dialogue