Business, Forwarding, Freight News, IT, Logistics

ASM reveals HMRC’s ‘Hard Brexit’ plans – updated

[ January 16, 2019   //   ]

Freight software firm Agency Sector Management (ASM) says that measures are being put in place to keep freight flowing through Dover in the event of a no-deal Brexit. Predictions of widespread chaos on 29 March were exaggerated, it said.
ASM says that HM Revenue and Customs (HMRC) has developed contingency plans which (for the UK side of the border at least) do not involve inventory systems or mandatory reporting to the frontier for either exports or imports.
ASM chairman Peter MacSwiney, said that for imports of EU goods, the plan involves all goods being declared as a pre-lodged non-inventory linked declaration, prior to the ferry arriving in the UK.
On arrival, the trader would ‘arrive’ the declaration and, only if the goods are selected for examination will the vehicle have to report to Customs. Otherwise, the driver can carry on to destination as now.
However, the information contained in such declarations would almost certainly be more limited than that available for third country imports at the moment. MacSwiney pointed out that Dover Eastern Docks, which handles all the port’s inbound ro ro freight, is not in fact a Customs-approved port. All it is able to do is to ‘arrive’ the ship, he suggested.
The ferry operator may know what trucks are on board, but, as things stand it would have no way of finding out what they actually contain, in any detail. It’s also unlikely that truck drivers would have this information, or at least not in all cases.
It would appear that HMRC’s plans are a pragmatic acceptance of the fact that there are no viable systems in place that could fully customs clear the sheer volume of traffic coming into Dover or the Channel Tunnel. It would clearly be unfeasible for every truck to go through anything like a full clearance procedure without creating total paralysis.
However, MacSwiney played down suggestions that the situation would create opportunities for dishonest traders to avoid paying tax and duty; there were most likely equal opportunities under the current system.
The port of Calais has suggested that it will introduce a system that creates a connection between the truck registration plate and electronic customs documents. MacSwiney said: “I suspect that such Automatic Numberplate Recognition (ANPR) systems are already in use for some purposes in Dover. But there is currently no specific field on the customs entry for a registration number. It could be entered somewhere, like Box 44 on the current Chief system, but someone also needs to extract that information and that system doesn’t exist at the moment.”
If there had been any discussions on ANPR between the UK and French customs authorities, they had certainly not been communicated to the trade, and it would likely take 18 months to put any system in place, he suggested.
Indeed, the whole issue of post-Brexit customs had been hedged about by Government Non-Disclosure Agreements, which was making it very hard to get meaningful information out to business. ASM itself has not yet been officially told what needed to be done, still less had shippers and importers been informed whether they would be asked to make customs entries.
“ASM does have the technology to automate entries – which would be realistically the only way of doing it – but we would need to be able to build links to commercial systems, and that would take a minimum of 18 months to do,” MacSwiney pointed out.
ASM is anticipating that more companies – traders, retailers and hauliers – will need to buy and install software and train staff how to use it. It is also expecting an upsurge in enquiries for its helpdesk and has been trying to recruit extra staff. “However, the problem is that you cannot easily find such people,” says MacSwiney.
Another post-Brexit change that would need to be accommodated would be the proposed switch to postponed VAT accounting – effectively creating a level playing field for imports from the EU and other third countries. It is also unclear whether the implications of this for the Treasury’s cash-flow have been fully appreciated by Government.

Exports from the UK
For exports, pre-lodged declarations will be required (as is currently the case for all third country exports), but for ro ro exports, these will be declared as ‘arrived’. If the declaration receives ‘permission to progress’ (P2P) then the vehicle can proceed to the ferry as now. If selected for examination, the goods would have to be presented to Customs.
The other major unknown factor was the level of veterinary and phytosanitary that could be imposed after Brexit and whether these could take place away from the physical border. MacSwiney pointed out that while HMRC is committed to facilitating trade, checks on inbound food consignments were the responsibility of UK Border Force who were not bound by the same rules. The health authorities might view Brexit as an opportunity to toughen up controls on food imports to a greater degree than is allowed under existing EU Single Market rules.
MacSwiney pointed out also that checks could equally be applied to passenger traffic, which would have the potential to snarl up the Channel ports if other freight traffic was caught behind detained cars or coaches.
Many issues could be resolved if such physical checks could take place a few miles from the port or Tunnel, but that may not be legal under EU or World Trade Organisation rules, he said.
Exports from the UK to the EU could in fact pose the greater problem, MacSwiney continued.
As for the spectre of vital medical supplies being caught up in Dover queues, one solution would be to fly in anything that was urgent. It was unlikely that airports would be seriously affected by customs issues, as most were already geared up to handling third country imports.
France and other countries with direct ro ro links to the UK would be bound by EU law to check and carry out full customs clearances, so Customs could well be more of an issue in this direction, said MacSwiney. “I think the UK could sort out its side of the border reasonably easily, but we cannot influence what happens on the other side – and the law is the law,” he said.
He added that it was unclear whether goods being arrived into the EU would need an Entry Summary Declaration as is normally made for all third country goods entering the EU.
It was true that many of the issues could be resolved if the UK government was to delay Brexit; this could create the minimum two-year transition period that the trade had been asking for, MacSwiney suggested. However, it remained to be seen whether the politicians would be willing to face down the inevitable accusations that they had ‘betrayed Brexit’.
He also said that the plans are not dependent on the Chief replacement, the Customs Declaration Service (CDS), being ready, adding: “Despite anything you may have heard, that new system is not going to be ready by the time we leave the EU.”
CDS was in fact, something of a red herring, said MacSwiney – a beefed up Chief would be able to cope with a surge in customs declarations. In fact, if the CDS project was on the back burner, it might be less of a distraction from the task in hand.