Logistics firms must start preparing for post-Brexit customs changes

2/26/2020

Freight forwarders and hauliers now have enough clarity to start preparing for a post-Brexit business landscape and should begin implementing the systems they will need from the end of December, according Peter MacSwiney, chairman of UK customs clearance solutions provider Agency Sector Management (ASM).

He stressed that there was “limited time to implement the systems needed to tackle trade friction” following the UK government’s announcement this week that import controls would be brought in on European Union (EU) goods at the border from 1 January.

“We now know there will be no extension of the transitional period – it is the drop-dead-stop scenario – but it means we have clarity,” said MacSwiney, who co-chairs the JCCC Customs Brexit Group (CBG). “We don’t have to like it, but we do now need to get ready to get things done.”

He continued: “Now is the time to get the right software in place, or if you have the software, it might be that you need to get the automation in place to deal with the increased volume of entries that is predicted. It won’t be easy; let’s get on with it, and we need to start now.”

He said the industry should welcome the decision also announced this week to extend the Customs Handling of Import and Export Freight (CHIEF) computer system until 2021, giving more time to prepare for additional changes.

“Safety and security checks post-31 December are more of a worry as the right infrastructure is not in place; that is going to take time and it is hard to see the benefit,” he observed.

In a speech this week 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: “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.”