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Customs controls are coming, warns Descartes expert

[ January 18, 2019   //   ]

The European Commission will impose full customs controls on all imports from and exports to the UK after 29 March in the case of a No Deal scenario, warns Martin Meacock, a director of software firm Descartes.
He says that the European Commission has called on EU member states to apply the Union Customs Code and the relevant rules regarding indirect taxation on 30 March 2019. Customs authorities may however issue authorisations for the use of facilitation measures provided for in the Union Customs Code, when economic operators request them, and subject to relevant requirements being met.
Nevertheless, says the Commission: “Ensuring a level-playing field and smooth trade flows will be particularly challenging in the areas with the densest goods traffic with the UK. The Commission is working with Member States to help find solutions in full respect of the current legal framework.”
The UK Government has also admitted to the National Audit office that in the case of No Deal, the border would be “less than optimal” – something everyone should be prepared and make allowances for.
Meacock points out: “Fortunately, The EU and the UK have agreed that the UK will remain in the Common Transit Convention. This will benefit trade to be able to start and terminate transit movements away from the immediate port of entry at inland clearance locations, customs warehouses or temporary storage facilities depending on national arrangements; in the UK, for example the use of External Temporary Storage Facilities (ETSF) can allow traders to move goods away from the bottleneck of the ports, airports and border crossing by using a customs approved electronic inventory system.
“So in addition to the ability to submit export declarations companies should also consider whether they will benefit from the ability to turn those export declarations into transit movements.”
The UK has proposed that importers will need to arrange for pre-lodged import declarations to be lodged before ro ro traffic is loaded onto ferry or shuttle services and be able to prove that to the carrier.
Carriers themselves may need to ensure they can provide the necessary pre-arrival safety and security information; for accompanied trailers this will be the responsibility of the haulier. Pre-lodgement of declarations could be important for all imports as could, in some cases, links to port community systems both in the UK and in the EU.
French Customs has already made similar announcements that pre-arrival declarations can be made and that new loading messages can be sent to French Customs from the Channel Tunnel or ferry operators to try and facilitate movement through key French ports.
Meacock adds that pre-lodgement of import declarations are also possible in the Dutch and Belgian systems, “whilst to facilitate a hard Brexit we are also seeing a sudden influx in changes to port-related messages.”

Company action needed
He adds that companies need to consider where future responsibilities will lie for imports and exports and whether they have access to the systems to allow them to submit these themselves. Third party warehousing / fiscal representation services can offer a valid alternative.
However, Meacock says: “Indications are though that if you do choose to use a broker to submit your declarations, they may not have the capacity in the case of a No Deal and would look for you to deliver data electronically to reduce data entry. If you are to be the first-time importer or exporter, you need to ensure you have an EORI registration in the respective territory.”
Companies should check systems to ensure that any handling of UK/EU orders are adjusted to reflect the UK status as a third country – for example sales to the UK from Netherlands or from the UK to the Netherlands should be treated as exports and/or transit movements instead of release into free circulation, while goods imported from the UK should not be treated as free stock into a bonded warehouse.
Meacock hopes that the EU and the UK will be able to adjust their electronic tariff files within the time remaining, but whilst the UK will maintain a unilateral GSP preference, it is not certain that UK exporters will be able to continue to raise preference certificates to countries currently covered by bilateral agreements with the EU, such as Korea or the EUR-Med area. This will clearly affect landed cost calculations and create more uncertainty for exporters to those markets.
For importers, whilst the UK tariff is likely to mirror the EU day one, there could very quickly be divergence, so ensuring your ERP systems are kept up to date is key.
Companies that leave arrangements to the last moment may find that they cannot get systems in place or resources available to assist them should there be a No Deal scenario.
Whilst some traders may look to use a broker or forwarder to perform this on their behalf the opportunity to lodge your own declarations should not be overlooked, Meacock suggests. Using SaaS applications could be quicker and easier to implement and support, but fast action is still needed.

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