Brexit – specifically the risk of a no-deal Brexit – has propelled customs clearance into the forefront of the industry’s minds for much of 2019. With three Brexit deadlines missed and another scheduled for 31st Jan 2020, the issue looks set to continue into yet another year. In this article John Lucy, Manager of International Transport & Trade Procedures at FTA, the voice of logistics, outlines how Brexit may impact customs clearance procedures.
Currently, trade between the UK and EU operates across a frictionless border with no barriers to movement. If the withdrawal agreement is ratified, there will be few changes until a trading agreement is, or is not, reached at the end of December 2020. However, under this new trade agreement, or in the event of a no-deal Brexit should the withdrawal or trade agreement not be passed, the frictionless border will change. The fact is, any type of Brexit arrangement which involves leaving the EU customs union and/or single market will result in new procedures for traders as freight crosses customs territories. It is also important to note that there will be checks of some kind operating in both directions, particularly from the UK into the EU. It will be essential that customs authorities know what goods are passing through their borders and as such, pre-import or export information will be required for processing all import and export movements. All UK exports will require the relevant customs, safety and security declarations, in addition to any necessary agricultural products or controlled goods licences or specific cargo certificates. The EU has also noted that there will be 100% documentary checks on all animal or plant-based products being imported, as well as 20-50% physical checks on certain products such as meat or honey.
Before the creation of the European Single Market in 1993, there were 105 customs agents operating in the port of Dover. However, because of reduced demand since free movement of goods in 1993, Dover has been operating with just 5 port agents dealing with imports and exports outside of the EU. And while currently, there are 55 million customs declarations made in the UK each year, post-Brexit the number of customs declarations is expected to rise above 200 million. As a result, the number of customs agents in both the UK and connecting EU RoRo ports will need to increase significantly to meet industry needs post Brexit. In FTA’s opinion, this is particularly important given that volumes of traffic are far higher today than they were in 1993 and are forecast to continue increasing. The government has recognised this need and has released a series of customs training and IT equipment grants to allow industry to upskill and increase capacity as part of their Brexit preparations, a decision welcomed by the logistics industry.
Post-Brexit driver-accompanied freight will involve drivers stopping at designated offices of departure to have their transit customs documents either scanned or wet stamped when they leave the UK and enter the EU, or vice versa. As a result, there are expectations that any future border architecture in the UK beyond Brexit will become increasingly digital and automated, with data integration and traceability at its core to enable a so-called ‘drive through,’ smart border. This in turn will accelerate the development and digitalization of customs documentation, an area that the EU is actively promoting.
While digital documentation is still in trial stages, in order to be a viable solution, all trading nations would need to legally adopt the strategy. The switch would be a lengthy process and would not take place overnight to suit the UK’s immediate needs post-Brexit. Furthermore, digital documentation would still require a significant capacity increase in both customs officials and customs agents.
In the view of FTA, there are still many questions regarding customs clearance procedures and processes that need to be addressed. The UK government needs to give careful consideration to the impacts of a no-deal Brexit, which still remains a possibility, as well as look ahead to the longer-term EU trade agreement. The logistics industry is highly adaptable however to know what it is preparing for, questions need to be answered in advanced.
Efficient logistics is vital to keep Britain trading, directly having an impact on more than seven million people employed in the making, selling and moving of goods. With Brexit, new technology and other disruptive forces driving change in the way goods move across borders and through the supply chain, logistics has never been more important to UK plc. A champion and challenger, FTA speaks to government with one voice on behalf of the whole sector, with members from the road, rail, sea and air industries, as well as the buyers of freight services such as retailers and manufacturers.
John Lucy, Manager of International Transport & Trade Procedures, FTA