Key minister confirms plans to introduce import and export controls on EU goods at the border after the transition period ends on 31 December.
The Freight Transport Association (FTA) has expressed disappointment that the promise of frictionless trade between the UK and the EU has been replaced with a promise that trade will be “as seamless as possible”, as the UK government confirmed plans to introduce import and export controls on EU goods at the border after the transition period ends on 31 December.
But the FTA also welcomed aspects of yesterday’s announcements about the UK’s future relationship with Europe, which the FTA said provided “much-needed clarity for logistics operators”, even if it was not the frictionless trade between that logistics companies and their customers had been promised.
In a speech yesterday at a Border Delivery Group stakeholder event, the UK’s de facto deputy Prime Minister, Michael Gove – whose official title is Chancellor of the Duchy of Lancaster – confirmed that “all UK exports and imports will be treated equally”, noting that “this will mean traders in the EU and GB will have to submit customs declarations and be liable to goods’ checks.
He also confirmed that the policy easements put in place for a potential ‘no deal’ exit will not be reintroduced, “as businesses have time to prepare”.
Gove said one thing businesses can do to prepare for border controls was “by making sure they have an Economic Operator Registration and Identification (EORI) number, and also looking into how they want to make declarations such as using a customs agent. We will ensure facilitations currently available to rest-of-the-world traders will also be open to those trading between GB and EU.”
He added: “The UK will be outside the single market and outside the customs union, so we will have to be ready for the customs procedures and regulatory checks that will inevitably follow.”
Yesterday’s announcement coincided with a related announcement that UK customs agency HM Revenue and Customs (HMRC) had extended the deadline for businesses to apply for customs support funding to 31 January 2021. To date, applications have been made for around £18.5 million out of a possible £26 million – meaning there is at least £7.5 million left to claim from HMRC.
This is aimed at GB-EU traders and does not apply to the flow of trade between Northern Ireland and Ireland, or between Northern Ireland and GB, the UK government said.
Elizabeth de Jong, FTA’s UK policy director, said yesterday’s announcements about the UK’s future relationship with Europe “provide more much-needed clarity for logistics operators, and his assertion that there will be no extension to the transition period gives businesses a finite deadline to which to work. The news of funding to help industry prepare for operation outside the EU is certainly welcome, whatever the outcome of the negotiations.”
She continued: “Mr Gove put to rest (UK Home Secretary) Sajiv Javid’s assertion that industry had plenty of time to prepare. It is encouraging for industry that he said ‘he does not underestimate what needs to be done’ and that he has his civil servants focussed on capturing and providing industry with the details we need – we hope within the timeframes we need to prepare.
“As representatives of the logistics industry, we are naturally disappointed that the promise of frictionless trade has been replaced with a promise that trade will be as seamless as possible – but not until 2025, with a more realistic but costly ‘make do and mend’ approach to be employed until then. Industry will need the support of government during this period to Keep Britain Trading effectively.”
Gove’s latest comments contradict promises he himself made as a leader of the Vote Leave campaign ahead of the UK’s EU referendum in 2016, when he said the UK would still be able to trade freely within Europe even if it left the EU. In a speech in London four years ago, he said: “There is a free-trade zone stretching from Iceland to Turkey that all European nations have access to… after we vote to leave, we will remain in this zone. By being part of that free-trade zone, we would have full access to the European market, but we would be free from EU regulation which costs us billions of pounds a year.”
The British International Freight Association (BIFA) did not to comment directly on the shift in direction away from frictionless UK-EU trade towards full customs declarations, but it welcomed the extension of the customs support funding period and noted yesterday’s official statement from Jesse Norman, Financial Secretary to the Treasury, that from 1 January 2021 “the way businesses trade will change, and they need to prepare for life outside the EU, including new customs arrangements – including for example, the need to make customs declarations to import and export goods between the UK and the EU once the UK is outside of the EU’s customs territory”.
Robert Keen, director general of BIFA, commented: “During many meetings with both HM Treasury and HMRC over the last three years, BIFA has highlighted the concerns of our members regarding the capability of the Customs brokerage sector to increase capacity, at a time when that sector already faces a shortage of staff of suitable quality. We emphasised that it could take up to a year to train staff to be fully conversant to prepare a range of basic Customs declarations, even if there was a sufficient number of trainers to train those staff, as well as relevant courses for them to attend.
“So, the news of a further extension to the deadline for this funding is very welcome, and we are encouraging our members who believe they might benefit to apply; if they have not done so already.”
BIFA noted that grants are being made available for all customs intermediaries and traders completing customs declarations with the aim of supporting training and the upgrade of IT systems.
Keen added: “This scheme is intended to help support the extra demand for customs brokerage services associated with the UK’s departure from the EU, as well as issues associated with the replacement of the current system used to process customs entries.”
BIFA said the grants could be used to support a business that is extending and taking on new staff, or to help train an existing employee to start completing customs declarations for the company. Training can be delivered by an external provider, or an in-house trainer.
More information on how businesses can apply, and a link to the online application page are available at www.customsintermediarygrant.co.uk or GOV.UK.
Source: Lloyd’s
